```

[House Report 111-678]
[From the U.S. Government Publishing Office]

111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-678

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

 
VETERANS, WOMEN, FAMILIES WITH CHILDREN, AND PERSONS WITH DISABILITIES 
                      HOUSING FAIRNESS ACT OF 2010

                                _______
                                

December 9, 2010.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 476]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 476) to authorize funds to prevent housing 
discrimination through the use of nationwide testing, to 
increase funds for the Fair Housing Initiatives Program, and 
for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                              ----------                              
                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     4
Background and Need for Legislation..............................     5
Hearings.........................................................    10
Committee Consideration..........................................    10
Committee Votes..................................................    11
Committee Oversight Findings.....................................    11
Performance Goals and Objectives.................................    11
New Budget Authority, Entitlement Authority, and Tax Expenditures    11
Committee Cost Estimate..........................................    12
Congressional Budget Office Estimate.............................    12
Federal Mandates Statement.......................................    13
Advisory Committee Statement.....................................    13
Constitutional Authority Statement...............................    13
Applicability to Legislative Branch..............................    13
Earmark Identification...........................................    13
Section-by-Section Analysis of the Legislation...................    13
Changes in Existing Law Made by the Bill, as Reported............    15
Dissenting Views.................................................    18

                               Amendment

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

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Veterans, Women, Families with 
Children, and Persons With Disabilities Housing Fairness Act of 2010''.

SEC. 2. TESTING FOR DISCRIMINATION.

  (a) In General.--The Secretary of Housing and Urban Development shall 
conduct a nationwide program of testing to--
          (1) detect and document differences in the treatment of 
        persons seeking to rent or purchase housing or obtain or 
        refinance a home mortgage loan, and measure patterns of adverse 
        treatment because of the race, color, religion, sex, familial 
        status, disability status, or national origin of a renter, home 
        buyer, or borrower; and
          (2) measure the prevalence of such discriminatory practices 
        across the housing and mortgage lending markets as a whole.
  (b) Administration.--The Secretary of Housing and Urban Development 
shall enter into agreements with qualified fair housing enforcement 
organizations, as such organizations are defined under subsection (h) 
of section 561 of the Housing and Community Development Act of 1987 (42 
U.S.C. 3616a(h)), for the purpose of conducting the testing required 
under subsection (a).
  (c) Program Requirements.--The Secretary shall--
          (1) submit to the Congress an evaluation by the Secretary of 
        the effectiveness of the program under this section; and
          (2) issue regulations that require each application for the 
        program under this section to contain--
                  (A) a description of the assisted activities proposed 
                to be undertaken by the applicant;
                  (B) a description of the experience of the applicant 
                in formulating or carrying out programs to carry out 
                the activities described in subsection (a); and
                  (C) a description of proposed procedures to be used 
                by the applicant for evaluating the results of the 
                activities proposed to be carried out under the 
                program.
  (d) Report.--The Secretary of Housing and Urban Development shall 
report to Congress--
          (1) on a biennial basis, the aggregate outcomes of testing 
        required under subsection (a) along with any recommendations or 
        proposals for legislative or administrative action to address 
        any issues raised by such testing; and
          (2) on an annual basis, a detailed summary of the messages 
        received by the Office of Fair Housing and Equal Opportunity of 
        the Department through its 24-hour toll-free telephone hotline, 
        through electronic mail, and through its website.
The Secretary may submit the reports required under paragraph (1) of 
this subsection as part of the reports prepared in accordance with 
paragraphs (2) and (6) of section 808(e) of the Fair Housing Act (42 
U.S.C. 3608(e)) and section 561(j) of the Housing and Community 
Development Act of 1987 (42 U.S.C. 3616a(j)).
  (e) Use of Results.--The results of any testing required under 
subsection (a) may be used as the basis for the Secretary, or any 
Federal agency authorized to bring such an enforcement action, or any 
State or local government or agency, public or private nonprofit 
organization or institution, or other public or private entity that the 
Secretary has entered into a contract or cooperative agreement with 
under section 561 of the Housing and Community Development Act of 1987 
(42 U.S.C. 3616a) to commence, undertake, or pursue any investigation 
or enforcement action to remedy any discriminatory housing practice (as 
such term is defined in section 802 of the Fair Housing Act (42 U.S.C. 
3602)) uncovered as a result of such testing.
  (f) Definitions.--As used in this section:
          (1) Disability status.--The term ``disability status'' has 
        the same meaning given the term ``handicap'' in section 802 of 
        the Civil Rights Act of 1968 (42 U.S.C. 3602).
          (2) Familial status.--The term ``familial status'' has the 
        same meaning given that term in section 802 of the Civil Rights 
        Act of 1968 (42 U.S.C. 3602).
  (g) Relationship to Other Laws.--Nothing in this section may be 
construed to amend, alter, or affect any provision of criminal law or 
the Truth in Lending Act (15 U.S.C. 1601 et seq.).
  (h) Regulations.--Not later than the expiration of the 180-day period 
beginning on the date of the enactment of this Act, the Secretary of 
Housing and Urban Development shall issue regulations that establish 
minimum standards for the training of testers of organizations 
conducting testing required under subsection (a). Such regulations 
shall serve as the basis of an evaluation of such testers, which shall 
be developed by the Secretary, and such regulations shall be issued 
after notice and an opportunity for public comment in accordance with 
the procedure 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).
  (i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the provisions of this section $15,000,000 
for each of fiscal years 2011 through 2015.

SEC. 3. INCREASE IN FUNDING FOR THE FAIR HOUSING INITIATIVES PROGRAM.

  (a) In General.--Section 561 of the Housing and Community Development 
Act of 1987 (42 U.S.C. 3616a) is amended--
          (1) in subsection (b)--
                  (A) in paragraph (1), by inserting ``qualified'' 
                before ``private nonprofit fair housing enforcement 
                organizations,''; and
                  (B) in paragraph (2), by inserting ``qualified'' 
                before ``private nonprofit fair housing enforcement 
                organizations,'';
          (2) by striking subsection (g) and inserting the following:
  ``(g) Authorization of Appropriations.--
          ``(1) In general.--There are authorized to be appropriated to 
        carry out the provisions of this section $42,500,000 for each 
        of fiscal years 2011 through 2015, of which--
                  ``(A) not less than 75 percent of such amounts shall 
                be for private enforcement initiatives authorized under 
                subsection (b);
                  ``(B) not more than 10 percent of such amounts shall 
                be for education and outreach programs under subsection 
                (d); and
                  ``(C) any remaining amounts shall be used for program 
                activities authorized under this section.
          ``(2) Availability.--Any amount appropriated under this 
        section shall remain available until expended to carry out the 
        provisions of this section.'';
          (3) in subsection (h), in the matter following subparagraph 
        (C), by inserting ``and meets the criteria described in 
        subparagraphs (A) and (C)'' after ``subparagraph (B)''; and
          (4) in subsection (d)--
                  (A) in paragraph (1)--
                          (i) in subparagraph (C), by striking ``and'' 
                        at the end;
                          (ii) in subparagraph (D), by striking the 
                        period and inserting ``; and''; and
                          (iii) by adding after subparagraph (D) the 
                        following new subparagraph:
                  ``(E) websites and other media outlets.'';
                  (B) in paragraph (2), by striking ``or other public 
                or private entities'' and inserting ``or other public 
                or private nonprofit entities''; and
                  (C) in paragraph (3), by striking ``or other public 
                or private entities'' and inserting ``or other public 
                or private nonprofit entities''.
  (b) Regulations.--Not later than the expiration of the 180-day period 
beginning on the date of the enactment of this Act, the Secretary of 
Housing and Urban Development shall issue regulations that establish 
minimum standards for the training of testers of organizations funded 
with any amounts made available to carry out this section for any of 
fiscal years 2011 through 2015. Such regulations shall serve as the 
basis of an evaluation of such testers, which shall be developed by the 
Secretary, and shall be issued after notice and an opportunity for 
public comment in accordance with the procedure 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).

SEC. 4. SENSE OF CONGRESS.

  It is the sense of Congress that the Secretary of Housing and Urban 
Development should--
          (1) fully comply with the requirements of section 561(d) of 
        the Housing and Community Development Act of 1987 (42 U.S.C. 
        3616a(d)) to establish, design, and maintain a national 
        education and outreach program to provide a centralized, 
        coordinated effort for the development and dissemination of the 
        fair housing rights of individuals who seek to rent, purchase, 
        sell, or facilitate the sale of a home;
          (2) expend for such education and outreach programs all 
        amounts appropriated for such programs;
          (3) promulgate regulations regarding the fair housing 
        obligations of each recipient of Federal housing and community 
        development funds to affirmatively further fair housing, as 
        that term is defined under title VIII of the Civil Rights Act 
        of 1968 (42 U.S.C. 3601 et seq.); and
          (4) fully comply with the requirements of section 810(a) of 
        the Fair Housing Act (42 U.S.C. 3610(a)).

SEC. 5. GRANTS TO PRIVATE ENTITIES TO STUDY HOUSING DISCRIMINATION.

  (a) Grant Program.--The Secretary of Housing and Urban Development 
shall carry out a competitive matching grant program to assist public 
and private nonprofit organizations in--
          (1) conducting comprehensive studies that examine--
                  (A) the causes of housing discrimination and 
                segregation;
                  (B) the effects of housing discrimination and 
                segregation on education, poverty, and economic 
                development; or
                  (C) the incidences, causes, and effects of housing 
                discrimination and segregation on veterans and military 
                personnel; and
          (2) implementing pilot projects that test solutions that will 
        help prevent or alleviate housing discrimination and 
        segregation.
  (b) Eligibility.--To be eligible to receive a grant under this 
section, a public or private nonprofit organization shall--
          (1) submit an application to the Secretary of Housing and 
        Urban Development, containing such information as the Secretary 
        shall require;
          (2) agree to provide matching non-Federal funds for 50 
        percent of the total amount of the grant, which matching funds 
        may include items donated on an in-kind contribution basis; and
          (3) meet the requirements of a qualified fair housing 
        enforcement organization, as such term is defined in section 
        561(h) of the Housing and Community Development Act of 1987 (42 
        U.S.C. 3616a(h)), or subcontract with a qualified fair housing 
        enforcement organization as a primary subcontractor.
  (c) Report.--The Secretary of Housing and Urban Development shall 
submit a report to the Congress on a biennial basis that provides a 
detailed summary of the results of the comprehensive studies and pilot 
projects carried out under subsection (a), together with any 
recommendations or proposals for legislative or administrative actions 
to address any issues raised by such studies. The Secretary may submit 
the reports required under this subsection as part of the reports 
prepared in accordance with paragraphs (2) and (6) of section 808(e) of 
the Fair Housing Act (42 U.S.C. 10 3608(e)) and section 561(j) of the 
Housing and Community Development Act of 1987 (42 U.S.C. 3616a(j)).
  (d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the provisions of this section $5,000,000 for 
each of fiscal years 2011 through 2015.

SEC. 6. LIMITATION ON USE OF FUNDS.

  None of the funds made available under this Act, or the amendments 
made by this Act, may be used for any political activities, political 
advocacy, or lobbying (as such terms are defined by Circular A-122 of 
the Office of Management and Budget, entitled ``Cost Principles for 
Non-Profit Organizations''), or for expenses for travel to engage in 
political activities or preparation of or provision of advice on tax 
returns.

                          Purpose and Summary

    H.R. 476 is intended to strengthen enforcement of federal 
fair housing laws as well as improve education efforts 
surrounding discrimination in home rentals, sales, insurance, 
and lending. Specifically, the bill would authorize a 
nationwide fair housing enforcement testing program, increase 
the authorization level for the Department of Housing and Urban 
Development's (HUD) Fair Housing Initiatives Program (FHIP), 
and establish a competitive matching grant program at HUD for 
private nonprofit organizations to examine the causes of 
housing discrimination and segregation and its effects on 
education, poverty, and economic development.

                  Background and Need for Legislation

    The federal Fair Housing Act (FHA) was enacted in April 
1968 in response to the assassination of Dr. Martin Luther King 
``to provide, within constitutional limitations, for fair 
housing throughout the United States.'' The Act, which applies 
to all types of public and private housing, including single 
family homes, apartments, condominiums, mobile homes, and 
others, originally prohibited discrimination on the basis of 
``race, color, religion, or national origin'' in the sale or 
rental of housing, the financing of housing, or the provision 
of brokerage services. In 1974, the Act was amended to add sex 
discrimination to the list of prohibited activities. Similarly, 
in 1988 the Act was amended to prohibit discrimination on the 
additional grounds of physical and mental handicap, as well as 
familial status. The 1988 amendments also provided HUD and the 
Department of Justice (DOJ) with the authority to initiate 
complaint proceedings and impose additional remedies. The Act 
also was extended to cover ``residential real estate-related 
transactions,'' which include both the ``making [and] 
purchasing of loans . . . secured by residential real estate 
[and] the selling, brokering, or appraising of residential real 
property.'' Thus, the provisions of the FHA extend to the 
secondary mortgage market.
    The FHA may be enforced in varying ways by HUD, the 
Attorney General, and victims of discrimination. While HUD has 
primary enforcement through agency adjudication, the DOJ and 
aggrieved individuals may also bring actions in federal courts 
under certain circumstances. The Office of Fair Housing and 
Equal Opportunity (FHEO) within HUD is responsible for 
investigating both individual and systemic complaints of 
lending discrimination. FHEO also undertakes Secretary-
initiated investigations based on Home Mortgage Disclosure Act 
data or other information that suggests that a lender may have 
discriminated on a prohibited basis. In addition, FHEO also 
carries out activities to educate the public about lending 
discrimination. In 2009, the Patricia Roberts Harris National 
Fair Housing Training Academy began its Fair Lending Initiative 
to combat the effects of the mortgage lending crisis. This 
effort was strengthened by an additional appropriation provided 
by Congress in FY 2009, which enabled FHEO to establish a $2 
million mortgage rescue component within the Fair Housing 
Initiative Program for nonprofit groups assisting victims of 
fraud and lending abuse.
    Despite some progress made by HUD, DOJ, and others in 
eradicating housing discrimination, alleged and actual 
violations of the Act persist. According to testimony by 
several witnesses before the Housing and Community Opportunity 
Subcommittee, African Americans still experience the highest 
degree of residential segregation. One witness commented that 
65 percent of the African American population would have to 
move in order to become fully integrated into a metropolitan 
area. Furthermore, according to testimony by John Trasvina, 
Assistant Secretary for Fair Housing and Equal Opportunity 
(FHEO), racial and ethnic minorities continue to be subject to 
different treatment when securing a mortgage. Assistant 
Secretary Trasvina stated that approximately five percent of 
the housing discrimination cases that are filed each year with 
the Department and its State and local fair housing agency 
partners in the Fair Housing Assistance Program (FHAP) involve 
lending discrimination while thirty percent of these cases have 
resulted in a determination of ``cause to believe 
discrimination occurred,'' a settlement, or a conciliation. His 
testimony noted that these cases resulted in over $2 million in 
monetary compensation or assistance to complainants and policy 
changes.
    HUD's most recent Housing Discrimination Study, which was 
conducted by the Urban Institute, found high rates of housing 
discrimination nationwide in the rental and sale of housing. 
The study found discrimination in 20.3 percent of cases in 
which an African American tried to rent an apartment and in 
16.8 percent of cases in which an African American attempted to 
purchase a home. For Hispanics, the numbers were even higher; 
discrimination was found in 23.4 percent of cases in which they 
tried to rent an apartment and 18.3 percent in cases where they 
tried to purchase a home. Those numbers were similar for Asian 
American and Pacific Islanders as well. HUD's report found 
discrimination in 21.5 percent of the time for rentals and 20.4 
percent of the time for home purchases.
    Independent studies also have reached similar conclusions 
to those documented in HUD's Housing Discrimination Study. A 
recent study by the National Fair Housing Alliance (NFHA) found 
that 30,758 fair housing complaints were filed in 2008, which 
is the highest total number of complaints on record. Private 
fair housing groups processed 20,173, or 66 percent, of the 
total complaint load. In contrast, HUD processed 2,123 
complaints, and state and local fair housing agencies processed 
8,429 complaints. The Department of Justice (DOJ) filed 33 fair 
housing cases. These complaints, however, represent only a 
small fraction of the actual violations. According to testimony 
by Shanna Smith, Executive Director and Chief Executive Office 
of NFHA, an estimated 4 million fair housing violations occur 
each year. Ms. Smith noted that one reason that so few victims 
file housing discrimination complaints each year is that the 
discrimination is so subtle as to be undetectable by most 
individuals. Another reason cited by Ms. Smith is that private 
fair housing groups that conduct the majority of fair housing 
enforcement work nationwide historically have lacked the 
funding needed to operate at a capacity that can adequately 
address the high level of housing discrimination.
    While the FHA was enacted more than 40 years ago, the 
Committee notes that numerous studies and witnesses 
acknowledged that housing discrimination continues. To more 
effectively address this problem, the bill proposes to 
strengthen enforcement of the nation's fair housing laws by 
expanding testing for housing discrimination, increasing the 
authorization for HUD's Fair Housing Initiative Program, 
establishing a competitive matching grant program at HUD to 
examine the causes of housing discrimination and segregation 
and their effects on education, poverty, and economic 
development, and encourage HUD to issue new regulations in 
connection with its mandate to affirmatively further fair 
housing.

                   TESTING FOR HOUSING DISCRIMINATION

    Detecting housing discrimination is usually done by what is 
called ``paired testing''. Paired testing uses two testers. 
These testers pose as identical home seekers except for the 
trait being discriminated against and visit real estate or 
rental agents to inquire about the availability of advertised 
housing units. Most paired testing uses paired minority and 
white applicants testing for racial and/or ethnic 
discrimination, but paired testing can be done using testers 
posing as applicants of different sexes, religions, familial 
status, or disability status if discrimination based on those 
traits is being tested. This methodology provides direct 
evidence of possible discrimination in rental, purchase, or 
mortgage markets.
    Fair housing organizations, federal, state and local 
governments, researchers and academics, and the housing 
industry use testing evidence to identify disparate treatment 
in the housing market. In testimony before the Housing and 
Community Opportunity Subcommittee, Assistant Secretary 
Trasvina expressed the Department's support for expansion of 
testing, noting that testing has been widely accepted by 
federal courts. Indeed, the U.S. Supreme Court recognized the 
use of testers as a legitimate and vital enforcement tool in 
its 1982 decision in Realty Corp. v. Coleman (455 U.S. 363, 373 
(1982)) in which it granted standing to testers to sue for 
injuries under the federal Fair Housing Act. Writing for the 
Court, Justice Brennan described testers as ``individuals who, 
without an intent to rent or purchase a home or apartment, pose 
as renters or purchasers for the purpose of collecting evidence 
of unlawful steering practices.'' Assistant Secretary Trasvina 
and several other witnesses who testified before the Housing 
and Community Opportunity Subcommittee commented that the U.S. 
Court of Appeals for the Seventh Circuit expressed support for 
testing as a tool for proving unlawful housing discrimination 
in Richards v. Howard, 712 F.2d 319, 321 (7th Cir. 1983) 
finding that ``[i]t is frequently difficult to develop proof in 
discrimination cases and the evidence provided by testers is 
frequently valuable, if not indispensible.'' Indeed, Assistant 
Secretary Trasvina testified that testing proved to be 
indispensible in a number of the Department's investigations 
that led to charges of discrimination based on familial and 
racial status. In one case, FHEO utilized on-site and telephone 
tests in Pennsylvania to uncover a prohibited discriminatory 
practice against families, while in another case, FHEO sent 
testers to a property following a number of individual 
complaints by African American renters who sought to live in a 
64-unit townhouse property in Ohio. Other witnesses testified 
that targeted testing of housing service providers has changed 
the business practices of apartment management companies, real 
estate agencies, homeowners insurance providers, architects and 
housing developers and mortgage lenders and insurance 
providers.
    By providing for a nationwide enforcement testing program, 
H.R. 476 recognizes that testing is a critical tool not only 
for investigating and redressing housing discrimination but 
also for systemic enforcement efforts to indentify the very 
types of subtle discrimination that currently go unreported. As 
one witness testified, such an approach is consistent with the 
federal government's longstanding tradition of focusing on 
eradication of large-scale forms of discrimination, which 
otherwise would not likely be redressed by State and local fair 
housing organizations, civil rights organizations or private 
individuals because of limited budgets and resources. Knowledge 
of the nationwide testing program will also serve to promote 
awareness of the various forms of discriminatory housing 
practices that are prohibited by the federal Fair Housing Act 
and, as a result, also serve to deter violations and strengthen 
compliance.
    The Committee recommends that all testing conducted as part 
of the national testing program should be conducted by private 
non-profit fair housing organizations with a successful history 
of bringing enforcement actions and meritorious complaints 
based on evidence gathered through testing. Fair housing 
organizations are based in communities and aware of the 
different market challenges that exist. Regional fair housing 
coalitions and national consortiums can be effective in 
coordinating systemic testing for the most direct and sustained 
impact. To most effectively accomplish the goals of this Act, 
the Committee recommends that funding be directed to national 
and regional fair housing organizations with a long history of 
testing, meritorious complaints and enforcement actions. Such 
groups subsequently may enter into subcontracts with local 
groups that have a proven history of testing.
    To ensure a sustained effort to eliminate systemic 
discrimination and undertake this broad effort, the Committee 
recommends that fair housing organizations receive grants of at 
least 24 to 36 months. Grantees should not face the 12-month 
time constraint present in some of the current FHIP funding. 
Past experience has shown that many FHIP grantees could not 
rely upon consistent funding from HUD, due in part to 
insufficient funding for FHIP. Successful systemic testing 
requires consistent investigation to identify discriminatory 
practices and policies that exist in particular geographic 
areas or that exist across geographic areas but are perpetuated 
by specific persons.

                    FAIR HOUSING INITIATIVES PROGRAM

    The Fair Housing Initiatives Program (FHIP) is a program 
within HUD that assists victims of housing discrimination by 
connecting them with local fair housing organizations and other 
non-profits that receive funding through FHIP. These FHIP 
organizations partner with HUD to help people identify 
government agencies that handle complaints of housing 
discrimination. They also conduct preliminary investigations of 
claims, including sending testers to properties suspected of 
practicing housing discrimination.
    In addition to funding organizations that provide direct 
assistance to individuals who feel they have been discriminated 
against while attempting to purchase or rent housing, FHIP has 
four initiatives that promote fair housing laws and equal 
housing opportunity awareness, including the:
     Fair Housing Organizations Initiative (FHOI)--
provides funding to non-profit fair housing organizations to 
build capacity and handle fair housing enforcement and 
education initiatives;
     Private Enforcement Initiative (PEI)--offers 
testing and enforcement assistance to the nationwide network of 
fair housing groups.
     Education and Outreach Initiative (EOI)--provides 
funding to State and local government agencies and non-profit 
organizations for community outreach initiatives regarding the 
Fair Housing Act.
     Administrative Enforcement Initiative (AEI)--helps 
State and local governments who administer laws similar to the 
Fair Housing Act that broaden an agency's range of enforcement 
and compliance activities. No funds are currently available for 
this program.
    FHIP was last authorized by Congress in 1994 at $26 
million. In FY 2009, eligible and qualified fair housing 
enforcement organizations submitted applications totaling $75.4 
million, which exceeded the amount appropriated by Congress. 
For FY 2010, FHIP was funded at $42.5 million in FY 2010, which 
helped fund 93 fair housing organizations. Despite the 
increase, there are many states and large metropolitan areas 
with no fair housing agency. In addition, many fair housing 
organizations have had to reduce staffing levels or close 
entirely due to insufficient resources. In fact, the bi-
partisan National Commission on Fair Housing and Equal 
Opportunity, co-chaired by former HUD Secretaries Henry 
Cisneros and Jack Kemp, issued a report on the state of fair 
housing in which it recommended a significant increase in FHIP 
funding. In its report, the Commission noted that that ``[t]he 
Fair Housing Initiative Program was created in the late 1980s 
to support and fund fair housing enforcement and education 
across the country. While the program has been an effective 
change agent in communities, severe funding constraints and an 
erratic funding stream have limited its usefulness. Current 
appropriation levels are grossly inadequate to fund existing 
private fair housing groups to perform enforcement activities . 
. . Only 28 groups in the country received consistent funding 
over the five-year period from FY 2003 to FY 2007 and 26 
private fair housing groups including some of the oldest and 
most respected groups, have closed or are at risk.''
    H.R. 476 begins to address the Commission's recommendations 
by increasing the authorization level for FHIP from $26 million 
to $42.5 million, equal to the amount appropriated by Congress 
in FY 2010. This funding level would help fund most of the 
existing fair housing organizations and enable them to develop 
innovative ways to fight emerging discrimination such as 
systemic testing, in which qualified fair housing organizations 
incorporate knowledge of emerging negative housing trends into 
an investigation and develop plans to determine if 
discrimination is driving this trend. Additional funding also 
would provide qualified fair housing organizations with the 
needed resources to follow through on discriminatory housing 
practices that are uncovered in order to take legal action and 
pay for litigation costs.

               AFFIRMATIVELY FURTHER FAIR HOUSING MANDATE

    Title VIII of the federal Fair Housing Act (42 U.S.C. 
Sec. 3608) requires HUD and its grantees to ``affirmatively 
further fair housing.'' This mandate applies to all HUD grant 
programs, including the Community Development Block Grant 
Program and the HOME Investment Partnership Program, two of 
HUD's largest grant programs. A number of witnesses testified 
that this mandate has often gone unmet. In fact, HUD Assistant 
Secretary Trasvina and several other witnesses discussed one 
such case that was brought against Westchester County, New 
York. In this case, it was alleged that Westchester County had 
made false claims to the federal government when it certified 
that it would affirmatively further fair housing, though it had 
never analyzed racial segregation patterns in areas where it 
placed new affordable housing. The Committee commends HUD and 
the Department of Justice for using its authority to help 
facilitate an historic and mutually-beneficial settlement to 
the claims whereby Westchester County has agreed to build 750 
new affordable housing units in neighborhoods with small 
minority populations, remove existing impediments to fair and 
affordable housing and take active steps to ensure its housing 
and development practices are fair to families without regard 
to their race or ethnicity.
    Finally, while the Committee recognizes that HUD is in the 
process of revising its current regulations regarding the 
obligation of recipients of federal funds to affirmatively 
further fair housing, it notes that Section 5 of the bill 
restates Congress intent in having this mandate fully 
implemented and enforced.

                                Hearings

    The Subcommittee on Housing and Community Opportunity held 
a hearing on January 20, 2010, entitled, ``H.R. 476, the 
Housing Fairness Act of 2009.'' The following witnesses 
testified:

                               PANEL ONE

           The Honorable John Trasvina, Assistant 
        Secretary for Fair Housing and Equal Opportunity, U.S. 
        Department of Housing and Urban Development

                               PANEL TWO

           Ms. Shanna L. Smith, President and Chief 
        Executive Officer, National Fair Housing Alliance/Co-
        Chair of the Leadership Conference on Civil Rights Fair 
        Housing Task Force
           Ms. Leslie Proll, Director, NAACP Legal 
        Defense & Educational Fund, Inc./Co-Chair of the 
        Leadership Conference on Civil Rights Fair Housing Task 
        Force
           Mr. David Berenbaum, Chief Program Officer, 
        National Community Reinvestment Coalition
           Ms. Jeanne McGlynn Delgado, Vice President, 
        Business and Risk Management Policy, National Multi-
        Housing Council/National Apartment Association
           Professor Brian Gilmore, Director, Fair 
        Housing Clinic, Howard University School of Law

                        Committee Consideration

    The Committee on Financial Services met in open session on 
July 28, 2010, and ordered H.R. 476, Veterans, Women, Families 
with Children, and Persons with Disabilities Housing Fairness 
Act of 2010, as amended, favorably reported to the House by a 
voice vote. Earlier, the Subcommittee on Housing and Community 
Opportunity marked up the bill on May 27, 2010, and ordered the 
bill, as amended, forwarded to the Full Committee by a voice 
vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken with in conjunction with the 
consideration of this legislation. A motion by Mr. Frank to 
report the bill, as amended, to the House with a favorable 
recommendation was agreed to by a voice vote.
    During the consideration of the bill in Full Committee, the 
following amendments (to the Committee Print showing the 
amendment recommended by the Subcommittee on Housing Community 
Opportunity) were considered:
    An amendment by Mr. Lee, no. 1, regarding a General 
Accountability Office study on testing for discrimination, was 
offered and withdrawn.
    An amendment by Mr. Carson, no. 2, regarding a HUD report 
on studies and pilot projects, was agreed to by a voice vote.
    During the consideration of the bill in the Subcommittee on 
Housing and Community Opportunity, the following amendment was 
considered:
    An amendment by Mr. Green, no. 1, a manager's amendment, 
was agreed to by a voice vote.

                      Committee Oversight Findings

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

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:

                          Purpose and Summary

    H.R. 476 is intended to strengthen enforcement of federal 
fair housing laws as well as improve education efforts 
surrounding discrimination in home rentals, sales, insurance, 
and lending by authorizing a nationwide fair housing 
enforcement testing program, increasing the authorization level 
for the Fair Housing Initiatives Program, and establishing a 
competitive matching grant program at HUD for private nonprofit 
organizations to examine the causes of housing discrimination 
and segregation and its effects on education, poverty, and 
economic development.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

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

                  Congressional Budget Office Estimate

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 10, 2010.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 476, the Veterans, 
Women, Families with Children, and Persons With Disabilities 
Housing Fairness Act of 2010.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                         Robert A. Sunshine
                              (For Douglas W. Elmendorf, Director).
    Enclosure.

H.R. 476--Veterans, Women, Families with Children, and Persons With 
        Disabilities Housing Fairness Act of 2010

    Summary: H.R. 476 would authorize the appropriation of 
about $255 million over the 2011-2015 period for Department of 
Housing and Urban Development programs to study, detect, and 
prevent discriminatory housing practices. Assuming 
appropriation of the authorized amounts, CBO estimates that 
implementing the bill would cost $214 million over the 2011-
2015 period. Enacting the legislation would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    H.R. 476 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of H.R. 476 is shown in the following table. 
CBO assumes that the amounts authorized will be appropriated by 
the start of each fiscal year and that outlays will follow the 
historical rate of spending for the authorized programs or for 
similar activities. The costs of this legislation fall within 
budget function 750 (administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                     -----------------------------------------------------------
                                                                                                          2011-
                                                        2011      2012      2013      2014      2015      2015
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level.................................        63        48        48        48        48       255
Estimated Outlays...................................        26        42        50        48        48       214
----------------------------------------------------------------------------------------------------------------

    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 476 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. State, local, and tribal governments would 
benefit from grant funds authorized in the bill. Any costs they 
incur, including matching funds, would result from complying 
with conditions of federal assistance.
    Estimate prepared by: Federal Costs: Mark Grabowicz; Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum; 
Impact on the Private Sector: Jimmy Jin.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

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

                      Advisory Committee Statement

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

                   Constitutional Authority Statement

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

                  Applicability to Legislative Branch

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

                         Earmark Identification

    H.R. 476 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    This section establishes the short title of the bill, the 
``Veterans, Women, Families with Children, and Persons with 
Disabilities Housing Fairness Act of 2010.''

Section 2. Testing for discrimination

    This section authorizes the U.S. Department of Housing and 
Urban Development (HUD) to administer a nationwide enforcement 
testing program to measure patterns of adverse treatment on the 
basis of race, color, religion, sex, familial status, 
disability or national origin in rentals, real estate sales and 
mortgage lending practices. Qualified fair housing enforcement 
organizations will conduct the testing. HUD, State and local 
governments, and fair housing organizations may investigate or 
bring enforcement actions when housing discrimination is found. 
HUD will submit to Congress an evaluation of the effectiveness 
of the program and issue regulations requiring applicants to 
describe the proposed activities and procedures to be used as 
well as regulations establishing minimum standards for the 
training of testers. HUD will report to Congress, on a biennial 
basis, the results of its nationwide enforcement testing, 
including recommendations for legislative or administrative 
actions. In its biennial updates to Congress, HUD will also 
provide a detailed summary of the messages received by the 24-
hour toll-free hotline, through electronic mail, and through 
its website, for reported housing discrimination. This program 
is authorized for $15 million for FY 2011-FY 2015.

Section 3. Increase in funding for the Fair Housing Initiatives Program

    This section amends the Fair Housing Initiative Program 
(FHIP), which was authorized as part of the Housing and 
Community Development Act of 1987, by stipulating that only 
``qualified private nonprofit fair housing enforcement 
organizations'' receive funds under the private enforcement 
initiative. Qualified fair housing organizations are required 
to have at least two years' experience in complaint intake, 
complaint investigation, testing for fair housing violations, 
and enforcement of meritorious claims. Under this section, HUD 
is also required to issue regulations within 180 days of bill 
enactment establishing minimum standards for the training of 
testers.
    This section authorizes $42.5 million annually for FHIP 
from FY 2011 to FY 2015, to be divided as follows:
           No less than 75 percent of total funding for 
        private enforcement; and
           No more than 10 percent of total funding for 
        education and outreach.

Section 4. Sense of Congress

    This section states that HUD should fully comply with FHIP 
authorizing language to develop and disseminate an annual 
national media campaign to educate the general public of fair 
housing rights, including public service announcements, 
television, radio and print advertisements, posters, pamphlets 
and brochures. It also states that HUD should promulgate 
regulations regarding the obligation to affirmatively further 
fair housing for all recipients of federal housing funds as 
required by federal Fair Housing Act (42 U.S.C. 3608).

Section 5. Grants to private entities to study housing discrimination

    This section requires HUD to administer a competitive 
matching grant program for private nonprofit organizations to 
examine the causes of housing discrimination and segregation 
and their effects on education, poverty and economic 
development. This section also expands the scope of research to 
include a study on the extent of housing discrimination against 
veterans and military personnel, the causes of such 
discrimination, and its effects. A non-federal fund match of 50 
percent of the grant amount is required. Qualified fair housing 
enforcement organizations or their primary subcontractor are 
given a priority in grant selection. This section authorizes $5 
million for the competitive grant program annually from FY 2011 
to FY 2015 for this program.
    This section also directs HUD to submit a report to 
Congress, on a biennial basis, that provides a detailed summary 
of the results of the comprehensive studies and pilot projects 
authorized by this Act, as well as specifying any 
recommendations for legislative or administrative actions to 
address any issues raised by the studies.

Section 6. Limitation on use of funds

    This section prohibits funds authorized under this Act from 
being used for any political activity, political advocacy, or 
lobbying, or for expenses for travel to engage in such 
activities or in preparing or providing advice on tax returns.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

    SECTION 561 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1987

SEC. 561. FAIR HOUSING INITIATIVES PROGRAM.

  (a) * * *
  (b) Private Enforcement Initiatives.--
          (1) In general.--The Secretary shall use funds made 
        available under this subsection to conduct, through 
        contracts with qualified private nonprofit fair housing 
        enforcement organizations, investigations of violations 
        of the rights granted under title VIII of the Civil 
        Rights Act of 1968, and such enforcement activities as 
        appropriate to remedy such violations. The Secretary 
        may enter into multiyear contracts and take such other 
        action as is appropriate to enhance the effectiveness 
        of such investigations and enforcement activities.
          (2) Activities.--The Secretary shall use funds made 
        available under this subsection to conduct, through 
        contracts with qualified private nonprofit fair housing 
        enforcement organizations, a range of investigative and 
        enforcement activities designed to--
                  (A) * * *

           *       *       *       *       *       *       *

  (d) Education and Outreach.--
          (1) In general.--The Secretary, through contracts 
        with one or more qualified fair housing enforcement 
        organizations, other fair housing enforcement 
        organizations, and other nonprofit organizations 
        representing groups of persons protected under title 
        VIII of the Civil Rights Act of 1968, shall establish a 
        national education and outreach program. The national 
        program shall be designed to provide a centralized, 
        coordinated effort for the development and 
        dissemination of fair housing media products, 
        including--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) posters; [and]
                  (D) pamphlets and brochures[.]; and
                  (E) websites and other media outlets.

           *       *       *       *       *       *       *

          (2) Regional and local programs.--The Secretary, 
        through contracts with fair housing enforcement 
        organizations, other nonprofit organizations 
        representing groups of persons protected under title 
        VIII of the Civil Rights Act of 1968, State and local 
        agencies certified by the Secretary under section 
        810(f) of the Fair Housing Act, [or other public or 
        private entities] or other public or private nonprofit 
        entities that are formulating or carrying out programs 
        to prevent or eliminate discriminatory housing 
        practices, shall establish or support education and 
        outreach programs at the regional and local levels.
          (3) Community-based programs.--The Secretary shall 
        provide funding to fair housing organizations and other 
        nonprofit organizations representing groups of persons 
        protected under title VIII of the Civil Rights Act of 
        1968, [or other public or private entities] or other 
        public or private nonprofit entities that are 
        formulating or carrying out programs to prevent or 
        eliminate discriminatory housing practices, to support 
        community-based education and outreach activities, 
        including school, church, and community presentations, 
        conferences, and other educational activities.

           *       *       *       *       *       *       *

  [(g) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out the provisions of this section, 
$21,000,000 for fiscal year 1993 and $26,000,000 for fiscal 
year 1994, of which--
          [(1) not less than $3,820,000 for fiscal year 1993 
        and $8,500,000 for fiscal year 1994 shall be for 
        private enforcement initiatives authorized under 
        subsection (b), divided equally between activities 
        specified under subsection (b)(1) and those specified 
        under subsection (b)(2);
          [(2) not less than $2,230,000 for fiscal year 1993 
        and $8,500,000 for fiscal year 1994 shall be for 
        qualified fair housing enforcement organizations 
        authorized under subsection (c)(1);
          [(3) not less than $2,010,000 for fiscal year 1993 
        and $4,000,000 for fiscal year 1994 shall be for the 
        creation of new fair housing enforcement organizations 
        authorized under subsection (c)(2); and
          [(4) not less than $2,540,000 for fiscal year 1993 
        and $5,000,000 for fiscal year 1994 shall be for 
        education and outreach programs authorized under 
        subsection (d), to be divided equally between 
        activities specified under subsection (d)(1) and those 
        specified under subsections (d)(2) and (d)(3). Any 
        amount appropriated under this section shall remain 
        available until expended.]
  (g) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated to carry out the provisions of this 
        section $42,500,000 for each of fiscal years 2011 
        through 2015, of which--
                  (A) not less than 75 percent of such amounts 
                shall be for private enforcement initiatives 
                authorized under subsection (b);
                  (B) not more than 10 percent of such amounts 
                shall be for education and outreach programs 
                under subsection (d); and
                  (C) any remaining amounts shall be used for 
                program activities authorized under this 
                section.
          (2) Availability.--Any amount appropriated under this 
        section shall remain available until expended to carry 
        out the provisions of this section.
  (h) Qualified Fair Housing Enforcement Organization.--(1) The 
term ``qualified fair housing enforcement organization'' means 
any organization that--
          (A) * * *

           *       *       *       *       *       *       *

An organization which is not solely engaged in fair housing 
enforcement activities may qualify as a qualified fair housing 
enforcement organization, provided that the organization is 
actively engaged in each of the activities listed in 
subparagraph (B) and meets the criteria described in 
subparagraphs (A) and (C).

           *       *       *       *       *       *       *

                            DISSENTING VIEWS

    The Republican Members of the Committee on Financial 
Services support the goal of fair housing and believe that 
housing discrimination in any form is unacceptable. However, we 
continue to be concerned that this bill creates two new 
programs, is duplicative of other Federal initiatives to combat 
this type of discrimination, and authorizes over $100 million 
in new spending with no offset or indication of the source of 
funding.
    H.R. 476 incorporates some Republican suggestions. For 
example, it includes provisions that (1) require the Department 
of Housing and Urban Development (HUD) to issue regulations 
outlining the standards and procedures for the nationwide 
testing program; (2) provide accountability and oversight 
standards governing how funds are spent by Qualified Fair 
Housing Enforcement Organizations (QFHEO); and (3) prohibit 
funds available under this act from being used for political 
activities. While these provisions improve the bill, H.R. 476 
fails to address concerns regarding the creation of a costly 
new program that largely duplicates other Federal initiatives 
administered by HUD and the Department of Justice (DOJ), and 
the authorization of $100 million in new spending at a time 
when American taxpayers are demanding greater fiscal discipline 
from their elected representatives.
    Currently, the Justice Department operates a fair housing 
testing program within its Housing and Civil Enforcement 
Section to identify unlawful housing discrimination based on 
race, national origin, disability, or familial status. Rather 
than establishing a new nationwide testing program through HUD, 
perhaps a better approach would be to have DOJ work in 
consultation with HUD to conduct housing discrimination testing 
through the existing DOJ program.
    Given the fiscal crisis facing America, it is irresponsible 
for Congress to authorize spending on new programs without 
offsetting that spending by eliminating or reducing other 
Federal programs. Accordingly, we cannot support this very 
well-intentioned legislation.
                                   Spencer Bachus.
                                   Randy Neugebauer.
                                   Leonard Lance.
                                   Christopher Lee.
                                   Shelley Moore Capito.
                                   Jeb Hensarling.
                                   Lynn Jenkins.

                                  

```