```

[House Report 105-76]
[From the U.S. Government Publishing Office]

105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     105-76
_______________________________________________________________________

 
           HOUSING OPPORTUNITY AND RESPONSIBILITY ACT OF 1997

                                _______
                                

 April 25, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________

   Mr. Leach, from the Committee on Banking and Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

               ADDITIONAL, MINORITY, AND DISSENTING VIEWS

                         [To accompany H.R. 2]

    The Committee on Banking and Financial Services, to whom 
was referred the bill (H.R. 2) to repeal the United States 
Housing Act of 1937, deregulate the public housing program and 
the program for rental housing assistance for low-income 
families, and increase community control over such programs, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Housing Opportunity 
and Responsibility Act of 1997''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Declaration of policy to renew American neighborhoods.

                      TITLE I--GENERAL PROVISIONS

Sec. 101. Statement of purpose.
Sec. 102. Definitions.
Sec. 103. Organization of public housing agencies.
Sec. 104. Determination of adjusted income and median income.
Sec. 105. Community work and family self-sufficiency requirements.
Sec. 106. Local housing management plans.
Sec. 107. Review of plans.
Sec. 108. Reporting requirements.
Sec. 109. Pet ownership.
Sec. 110. Administrative grievance procedure.
Sec. 111. Headquarters reserve fund.
Sec. 112. Labor standards.
Sec. 113. Nondiscrimination.
Sec. 114. Prohibition on use of funds.
Sec. 115. Inapplicability to Indian housing.
Sec. 116. Regulations.

                        TITLE II--PUBLIC HOUSING

                        Subtitle A--Block Grants

Sec. 201. Block grant contracts.
Sec. 202. Grant authority, amount, and eligibility.
Sec. 203. Eligible and required activities.
Sec. 204. Determination of grant allocation.
Sec. 205. Sanctions for improper use of amounts.

           Subtitle B--Admissions and Occupancy Requirements

Sec. 221. Low-income housing requirement.
Sec. 222. Family eligibility.
Sec. 223. Preferences for occupancy.
Sec. 224. Admission procedures.
Sec. 225. Family choice of rental payment.
Sec. 226. Lease requirements.
Sec. 227. Designated housing for elderly and disabled families.

                         Subtitle C--Management

Sec. 231. Management procedures.
Sec. 232. Housing quality requirements.
Sec. 233. Employment of residents.
Sec. 234. Resident councils and resident management corporations.
Sec. 235. Management by resident management corporation.
Sec. 236. Transfer of management of certain housing to independent 
manager at request of residents.
Sec. 237. Resident opportunity program.

                       Subtitle D--Homeownership

Sec. 251. Resident homeownership programs.

Subtitle E--Disposition, Demolition, and Revitalization of Developments

Sec. 261. Requirements for demolition and disposition of developments.
Sec. 262. Demolition, site revitalization, replacement housing, and 
choice-based assistance grants for developments.
Sec. 263. Voluntary voucher system for public housing.

                Subtitle F--Mixed-Finance Public Housing

Sec. 271. Authority.
Sec. 272. Mixed-finance housing developments.
Sec. 273. Mixed-finance housing plan.
Sec. 274. Rent levels for housing financed with low-income housing tax 
credit.
Sec. 275. Carry-over of assistance for replaced housing.

                     Subtitle G--General Provisions

Sec. 281. Payment of non-Federal share.
Sec. 282. Authorization of appropriations for block grants.
Sec. 283. Funding for operation safe home.
Sec. 284. Funding for relocation of victims of domestic violence.

TITLE III--CHOICE-BASED RENTAL HOUSING AND HOMEOWNERSHIP ASSISTANCE FOR 
                          LOW-INCOME FAMILIES

                         Subtitle A--Allocation

Sec. 301. Authority to provide housing assistance amounts.
Sec. 302. Contracts with PHA's.
Sec. 303. Eligibility of PHA's for assistance amounts.
Sec. 304. Allocation of amounts.
Sec. 305. Administrative fees.
Sec. 306. Authorizations of appropriations.
Sec. 307. Conversion of section 8 assistance.
Sec. 308. Recapture and reuse of annual contract project reserves under 
choice-based housing assistance and section 8 tenant-based assistance 
programs.

   Subtitle B--Choice-Based Housing Assistance for Eligible Families

Sec. 321. Eligible families and preferences for assistance.
Sec. 322. Resident contribution.
Sec. 323. Rental indicators.
Sec. 324. Lease terms.
Sec. 325. Termination of tenancy.
Sec. 326. Eligible owners.
Sec. 327. Selection of dwelling units.
Sec. 328. Eligible dwelling units.
Sec. 329. Homeownership option.
Sec. 330. Assistance for rental of manufactured homes.

    Subtitle C--Payment of Housing Assistance on Behalf of Assisted 
                                Families

Sec. 351. Housing assistance payments contracts.
Sec. 352. Amount of monthly assistance payment.
Sec. 353. Payment standards.
Sec. 354. Reasonable rents.
Sec. 355. Prohibition of assistance for vacant rental units.

            Subtitle D--General and Miscellaneous Provisions

Sec. 371. Definitions.
Sec. 372. Rental assistance fraud recoveries.
Sec. 373. Study regarding geographic concentration of assisted 
families.
Sec. 374. Study regarding rental assistance.

               TITLE IV--HOME RULE FLEXIBLE GRANT OPTION

Sec. 401. Purpose.
Sec. 402. Flexible grant program.
Sec. 403. Covered housing assistance.
Sec. 404. Program requirements.
Sec. 405. Applicability of certain provisions.
Sec. 406. Application.
Sec. 407. Training.
Sec. 408. Accountability.
Sec. 409. Definitions.

    TITLE V--ACCOUNTABILITY AND OVERSIGHT OF PUBLIC HOUSING AGENCIES

Subtitle A--Study of Alternative Methods for Evaluating Public Housing 
                                Agencies

Sec. 501. In general.
Sec. 502. Purposes.
Sec. 503. Evaluation of various performance evaluation systems.
Sec. 504. Consultation.
Sec. 505. Contract to conduct study.
Sec. 506. Report.
Sec. 507. Funding.
Sec. 508. Effective date.

         Subtitle B--Housing Evaluation and Accreditation Board

Sec. 521. Establishment.
Sec. 522. Membership.
Sec. 523. Functions.
Sec. 524. Powers.
Sec. 525. Fees.
Sec. 526. GAO audit.

    Subtitle C--Interim Applicability of Public Housing Management 
                           Assessment Program

Sec. 531. Interim applicability.
Sec. 532. Management assessment indicators.
Sec. 533. Designation of PHA's.
Sec. 534. On-site inspection of troubled PHA's.
Sec. 535. Administration.

   Subtitle D--Accountability and Oversight Standards and Procedures

Sec. 541. Audits.
Sec. 542. Performance agreements for authorities at risk of becoming 
troubled.
Sec. 543. Performance agreements and CDBG sanctions for troubled PHA's.
Sec. 544. Option to demand conveyance of title to or possession of 
public housing.
Sec. 545. Removal of ineffective PHA's.
Sec. 546. Mandatory takeover of chronically troubled PHA's.
Sec. 547. Treatment of troubled PHA's.
Sec. 548. Maintenance of records.
Sec. 549. Annual reports regarding troubled PHA's.
Sec. 550. Applicability to resident management corporations.
Sec. 551. Advisory council for Housing Authority of New Orleans.

                TITLE VI--REPEALS AND RELATED AMENDMENTS

      Subtitle A--Repeals, Effective Date, and Savings Provisions

Sec. 601. Effective date and repeal of United States Housing Act of 
1937.
Sec. 602. Other repeals.

  Subtitle B--Other Provisions Relating to Public Housing and Rental 
                          Assistance Programs

Sec. 621. Allocation of elderly housing amounts.
Sec. 622. Pet ownership.
Sec. 623. Review of drug elimination program contracts.
Sec. 624. Amendments to Public and Assisted Housing Drug Elimination 
Act of 1990.

  Subtitle C--Limitations Relating to Occupancy in Federally Assisted 
                                Housing

Sec. 641. Screening of applicants.
Sec. 642. Termination of tenancy and assistance for illegal drug users 
and alcohol abusers.
Sec. 643. Lease requirements.
Sec. 644. Availability of criminal records for tenant screening and 
eviction.
Sec. 645. Definitions.

       TITLE VII--AFFORDABLE HOUSING AND MISCELLANEOUS PROVISIONS

Sec. 701. Rural housing assistance.
Sec. 702. Treatment of occupancy standards.
Sec. 703. Implementation of plan.
Sec. 704. Income eligibility for HOME and CDBG programs.
Sec. 705. Prohibition of use of CDBG grants for employment relocation 
activities.
Sec. 706. Use of American products.
Sec. 707. Consultation with affected areas in settlement of litigation.
Sec. 708. Use of assisted housing by aliens.
Sec. 709. Effective date.

SEC. 2. DECLARATION OF POLICY TO RENEW AMERICAN NEIGHBORHOODS.

  The Congress hereby declares that--
          (1) the Federal Government has a responsibility to promote 
        the general welfare of the Nation--
                  (A) by using Federal resources to aid families and 
                individuals seeking affordable homes that are safe, 
                clean, and healthy and, in particular, assisting 
                responsible, deserving citizens who cannot provide 
                fully for themselves because of temporary circumstances 
                or factors beyond their control;
                  (B) by working to ensure a thriving national economy 
                and a strong private housing market; and
                  (C) by developing effective partnerships among the 
                Federal Government, State and local governments, and 
                private entities that allow government to accept 
                responsibility for fostering the development of a 
                healthy marketplace and allow families to prosper 
                without government involvement in their day-to-day 
                activities;
          (2) the Federal Government cannot through its direct action 
        alone provide for the housing of every American citizen, or 
        even a majority of its citizens, but it is the responsibility 
        of the Government to promote and protect the independent and 
        collective actions of private citizens to develop housing and 
        strengthen their own neighborhoods;
          (3) the Federal Government should act where there is a 
        serious need that private citizens or groups cannot or are not 
        addressing responsibly;
          (4) housing is a fundamental and necessary component of 
        bringing true opportunity to people and communities in need, 
        but providing physical structures to house low-income families 
        will not by itself pull generations up from poverty;
          (5) it is a goal of our Nation that all citizens have decent 
        and affordable housing; and
          (6) our Nation should promote the goal of providing decent 
        and affordable housing for all citizens through the efforts and 
        encouragement of Federal, State, and local governments, and by 
        the independent and collective actions of private citizens, 
        organizations, and the private sector.

                      TITLE I--GENERAL PROVISIONS

SEC. 101. STATEMENT OF PURPOSE.

  The purpose of this Act is to promote safe, clean, and healthy 
housing that is affordable to low-income families, and thereby 
contribute to the supply of affordable housing, by--
          (1) deregulating and decontrolling public housing agencies, 
        thereby enabling them to perform as property and asset 
        managers;
          (2) providing for more flexible use of Federal assistance to 
        public housing agencies, allowing the authorities to leverage 
        and combine assistance amounts with amounts obtained from other 
        sources;
          (3) facilitating mixed income communities;
          (4) increasing accountability and rewarding effective 
        management of public housing agencies;
          (5) creating incentives and economic opportunities for 
        residents of dwelling units assisted by public housing agencies 
        to work, become self-sufficient, and transition out of public 
        housing and federally assisted dwelling units;
          (6) recreating the existing rental assistance voucher program 
        so that the use of vouchers and relationships between landlords 
        and tenants under the program operate in a manner that more 
        closely resembles the private housing market; and
          (7) remedying troubled public housing agencies and replacing 
        or revitalizing severely distressed public housing 
        developments.

SEC. 102. DEFINITIONS.

  For purposes of this Act, the following definitions shall apply:
          (1) Acquisition cost.--When used in reference to public 
        housing, the term ``acquisition cost'' means the amount 
        prudently expended by a public housing agency in acquiring 
        property for a public housing development.
          (2) Development.--The terms ``public housing development'' 
        and ``development'' (when used in reference to public housing) 
        mean--
                  (A) public housing; and
                  (B) the improvement of any such housing.
          (3) Disabled family.--The term ``disabled family'' means a 
        family whose head (or his or her spouse), or whose sole member, 
        is a person with disabilities. Such term includes 2 or more 
        persons with disabilities living together, and 1 or more such 
        persons living with 1 or more persons determined under the 
        regulations of the Secretary to be essential to their care or 
        well-being.
          (4) Drug-related criminal activity.--The term ``drug-related 
        criminal activity'' means the illegal manufacture, sale, 
        distribution, use, or possession with intent to manufacture, 
        sell, distribute, or use, of a controlled substance (as such 
        term is defined in section 102 of the Controlled Substances 
        Act).
          (5) Effective date.--The term ``effective date'', when used 
        in reference to this Act, means the effective date determined 
        under section 601(a).
          (6) Elderly families and near elderly families.--The terms 
        ``elderly family'' and ``near-elderly family'' mean a family 
        whose head (or his or her spouse), or whose sole member, is an 
        elderly person or a near-elderly person, respectively. Such 
        terms include 2 or more elderly persons or near-elderly persons 
        living together, and 1 or more such persons living with 1 or 
        more persons determined under the regulations of the Secretary 
        to be essential to their care or well-being.
          (7) Elderly person.--The term ``elderly person'' means a 
        person who is at least 62 years of age.
          (8) Eligible public housing agency.--The term ``eligible 
        public housing agency'' means, with respect to a fiscal year, a 
        public housing agency that is eligible under section 202(d) for 
        a grant under this title.
          (9) Family.--The term ``family'' includes a family with or 
        without children, an elderly family, a near-elderly family, a 
        disabled family, and a single person.
          (10) Group home and independent living facility.--The terms 
        ``group home'' and ``independent living facility'' have the 
        meanings given such terms in section 811(k) of the Cranston-
        Gonzalez National Affordable Housing Act.
          (11) Income.--The term ``income'' means, with respect to a 
        family, income from all sources of each member of the 
        household, as determined in accordance with criteria prescribed 
        by the applicable public housing agency and the Secretary, 
        except that the following amounts shall be excluded:
                  (A) Any amounts not actually received by the family.
                  (B) Any amounts that would be eligible for exclusion 
                under section 1613(a)(7) of the Social Security Act.
          (12) Local housing management plan.--The term ``local housing 
        management plan'' means, with respect to any fiscal year, the 
        plan under section 106 of a public housing agency for such 
        fiscal year.
          (13) Low-income family.--The term ``low-income family'' means 
        a family whose income does not exceed 80 percent of the median 
        income for the area, as determined by the Secretary with 
        adjustments for smaller and larger families, except that the 
        Secretary may, for purposes of this paragraph, establish income 
        ceilings higher or lower than 80 percent of the median for the 
        area on the basis of the public housing agency's findings that 
        such variations are necessary because of unusually high or low 
        family incomes.
          (14) Low-income housing.--The term ``low-income housing'' 
        means dwellings that comply with the requirements--
                  (A) under title II for assistance under such title 
                for the dwellings; or
                  (B) under title III for rental assistance payments 
                under such title for the dwellings.
          (15) Near-elderly person.--The term ``near-elderly person'' 
        means a person who is at least 55 years of age.
          (16) Operation.--When used in reference to public housing, 
        the term ``operation'' means any or all undertakings 
        appropriate for management, operation, services, maintenance, 
        security (including the cost of security personnel), or 
        financing in connection with a public housing development, 
        including the financing of resident programs and services.
          (17) Person with disabilities.--The term ``person with 
        disabilities'' means a person who--
                  (A) has a disability as defined in section 223 of the 
                Social Security Act,
                  (B) is determined, pursuant to regulations issued by 
                the Secretary, to have a physical, mental, or emotional 
                impairment which (i) is expected to be of long-
                continued and indefinite duration, (ii) substantially 
                impedes his or her ability to live independently, and 
                (iii) is of such a nature that such ability could be 
                improved by more suitable housing conditions, or
                  (C) has a developmental disability as defined in 
                section 102 of the Developmental Disabilities 
                Assistance and Bill of Rights Act.
        Such term shall not exclude persons who have the disease of 
        acquired immunodeficiency syndrome or any conditions arising 
        from the etiologic agent for acquired immunodeficiency 
        syndrome. Notwithstanding any other provision of law, no 
        individual shall be considered a person with disabilities, for 
        purposes of eligibility for public housing under title II of 
        this Act, solely on the basis of any drug or alcohol 
        dependence. The Secretary shall consult with other appropriate 
        Federal agencies to implement the preceding sentence.
          (18) Production.--When used in reference to public housing, 
        the term ``production'' means any or all undertakings necessary 
        for planning, land acquisition, financing, demolition, 
        construction, or equipment, in connection with the 
        construction, acquisition, or rehabilitation of a property for 
        use as a public housing development, including activity in 
        connection with a public housing development that is confined 
        to the reconstruction, remodeling, or repair of existing 
        buildings.
          (19) Production cost.--When used in reference to public 
        housing, the term ``production cost'' means the costs incurred 
        by a public housing agency for production of public housing and 
        the necessary financing for production (including the payment 
        of carrying charges and acquisition costs).
          (20) Public housing.--The term ``public housing'' means 
        housing, and all necessary appurtenances thereto, that--
                  (A) is low-income housing, low-income dwelling units 
                in mixed-finance housing (as provided in subtitle F), 
                or low-income dwelling units in mixed income housing 
                (as provided in section 221(c)(2)); and
                  (B)(i) is subject to an annual block grant contract 
                under title II; or
                  (ii) was subject to an annual block grant contract 
                under title II (or an annual contributions contract 
                under the United States Housing Act of 1937) which is 
                not in effect, but for which occupancy is limited in 
                accordance with the requirements under section 222(a).
          (21) Public housing agency.--The term ``public housing 
        agency'' is defined in section 103.
          (22) Resident council.--The term ``resident council'' means 
        an organization or association that meets the requirements of 
        section 234(a).
          (23) Resident management corporation.--The term ``resident 
        management corporation'' means a corporation that meets the 
        requirements of section 234(b)(2).
          (24) Resident program.--The term ``resident programs and 
        services'' means programs and services for families residing in 
        public housing developments. Such term includes (A) the 
        development and maintenance of resident organizations which 
        participate in the management of public housing developments, 
        (B) the training of residents to manage and operate the public 
        housing development and the utilization of their services in 
        management and operation of the development, (C) counseling on 
        household management, housekeeping, budgeting, money 
        management, homeownership issues, child care, and similar 
        matters, (D) advice regarding resources for job training and 
        placement, education, welfare, health, and other community 
        services, (E) services that are directly related to meeting 
        resident needs and providing a wholesome living environment; 
        and (F) referral to appropriate agencies in the community when 
        necessary for the provision of such services. To the maximum 
        extent available and appropriate, existing public and private 
        agencies in the community shall be used for the provision of 
        such services.
          (25) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
          (26) State.--The term ``State'' means the States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, and any other 
        territory or possession of the United States and Indian tribes.
          (27) Very low-income family.--The term ``very low-income 
        family'' means a low-income family whose income does not exceed 
        50 percent of the median family income for the area, as 
        determined by the Secretary with adjustments for smaller and 
        larger families, except that the Secretary may, for purposes of 
        this paragraph, establish income ceilings higher or lower than 
        50 percent of the median for the area on the basis of the 
        public housing agency's findings that such variations are 
        necessary because of unusually high or low family incomes.

SEC. 103. ORGANIZATION OF PUBLIC HOUSING AGENCIES.

  (a) Requirements.--For purposes of this Act, the terms ``public 
housing agency'' and ``agency'' mean any entity that--
          (1) is--
                  (A) a public housing agency that was authorized under 
                the United States Housing Act of 1937 to engage in or 
                assist in the development or operation of low-income 
                housing;
                  (B) authorized under this Act to engage in or assist 
                in the development or operation of low-income housing 
                by any State, county, municipality, or other 
                governmental body or public entity;
                  (C) an entity authorized by State law to administer 
                choice-based housing assistance under title III; or
                  (D) an entity selected by the Secretary, pursuant to 
                subtitle D of title V, to manage housing; and
          (2) complies with the requirements under subsection (b).
The term does not include any entity that is an Indian housing 
authority for purposes of the United States Housing Act of 1937 (as in 
effect before the effectiveness of the Native American Housing 
Assistance and Self-Determination Act of 1996) or a tribally designated 
housing entity, as such term is defined in section 4 of the Native 
American Housing Assistance and Self-Determination Act of 1996.
  (b) Governance.--
          (1) Board of directors.--Each public housing agency shall 
        have a board of directors or other form of governance as 
        prescribed in State or local law. No person may be barred from 
        serving on such board or body because of such person's 
        residency in a public housing development or status as an 
        assisted family under title III.
          (2) Resident membership.--
                  (A) In general.--Except as provided in subparagraph 
                (B), in localities in which a public housing agency is 
                governed by a board of directors or other similar body, 
                the board or body shall include not less than 1 member 
                who is an elected public housing resident member (as 
                such term is defined in paragraph (5)).
                  (B) Exceptions.--The requirement in subparagraph (A) 
                with respect to elected public housing resident members 
                shall not apply to--
                          (i) any State or local governing body that 
                        serves as a public housing agency for purposes 
                        of this Act and whose responsibilities include 
                        substantial activities other than acting as the 
                        public housing agency, except that such 
                        requirement shall apply to any advisory 
                        committee or organization that is established 
                        by such governing body and whose 
                        responsibilities relate only to the governing 
                        body's functions as a public housing agency for 
                        purposes of this Act;
                          (ii) any public housing agency that owns or 
                        operates less than 250 public housing dwelling 
                        units (including any agency that does not own 
                        or operate public housing); or
                          (iii) any public housing agency in a State 
                        that requires the members of the board of 
                        directors or other similar body of a public 
                        housing agency to be salaried and to serve on a 
                        full-time basis.
          (3) Full participation.--No public housing agency may limit 
        or restrict the capacity or offices in which a member of such 
        board or body may serve on such board or body solely because of 
        the member's status as a resident member.
          (4) Conflicts of interest.--The Secretary shall establish 
        guidelines to prevent conflicts of interest on the part of 
        members of the board or directors or governing body of a public 
        housing agency.
          (5) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                  (A) Elected public housing resident member.--The term 
                ``elected public housing resident member'' means, with 
                respect to the public housing agency involved, an 
                individual who is a resident member of the board of 
                directors (or other similar governing body of the 
                agency) by reason of election to such position pursuant 
                to an election--
                          (i) in which eligibility for candidacy in 
                        such election is limited to individuals who--
                                  (I) maintain their principal 
                                residence in a dwelling unit of public 
                                housing administered or assisted by the 
                                agency; and
                                  (II) have not been convicted of a 
                                felony;
                          (ii) in which only residents of dwelling 
                        units of public housing administered by the 
                        agency may vote; and
                          (iii) that is conducted in accordance with 
                        standards and procedures for such election, 
                        which shall be established by the Secretary.
                  (B) Resident member.--The term ``resident member'' 
                means a member of the board of directors or other 
                similar governing body of a public housing agency who 
                is a resident of a public housing dwelling unit owned, 
                administered, or assisted by the agency or is a member 
                of an assisted family (as such term is defined in 
                section 371) assisted by the agency.
  (c) Establishment of Policies.--Any rules, regulations, policies, 
standards, and procedures necessary to implement policies required 
under section 106 to be included in the local housing management plan 
for a public housing agency shall be approved by the board of directors 
or similar governing body of the agency and shall be publicly available 
for review upon request.

SEC. 104. DETERMINATION OF ADJUSTED INCOME AND MEDIAN INCOME.

  (a) Adjusted Income.--For purposes of this Act, the term ``adjusted 
income'' means, with respect to a family, the difference between the 
income of the members of the family residing in a dwelling unit or the 
persons on a lease and the amount of any income exclusions for the 
family under subsections (b) and (c), as determined by the public 
housing agency.
  (b) Mandatory Exclusions From Income.--In determining adjusted 
income, a public housing agency shall exclude from the annual income of 
a family the following amounts:
          (1) Elderly and disabled families.--$400 for any elderly or 
        disabled family.
          (2) Medical expenses.--The amount by which 3 percent of the 
        annual family income is exceeded by the sum of--
                  (A) unreimbursed medical expenses of any elderly 
                family;
                  (B) unreimbursed medical expenses of any nonelderly 
                family, except that this subparagraph shall apply only 
                to the extent approved in appropriation Acts; and
                  (C) unreimbursed reasonable attendant care and 
                auxiliary apparatus expenses for each handicapped 
                member of the family, to the extent necessary to enable 
                any member of such family (including such handicapped 
                member) to be employed.
          (3) Child care expenses.--Any reasonable child care expenses 
        necessary to enable a member of the family to be employed or to 
        further his or her education.
          (4) Minors, students, and persons with disabilities.--$480 
        for each member of the family residing in the household (other 
        than the head of the household or his or her spouse) who is 
        less than 18 years of age or is attending school or vocational 
        training on a full-time basis, or who is 18 years of age or 
        older and is a person with disabilities.
          (5) Child support payments.--Any payment made by a member of 
        the family for the support and maintenance of any child who 
        does not reside in the household, except that the amount 
        excluded under this paragraph may not exceed $480 for each 
        child for whom such payment is made.
          (6) Earned income of minors.--The amount of any earned income 
        of a member of the family who is not--
                  (A) 18 years of age or older; and
                  (B) the head of the household (or the spouse of the 
                head of the household).
  (c) Permissive Exclusions From Income.--In determining adjusted 
income, a public housing agency may, in the discretion of the agency, 
establish exclusions from the annual income of a family. Such 
exclusions may include the following amounts:
          (1) Excessive travel expenses.--Excessive travel expenses in 
        an amount not to exceed $25 per family per week, for 
        employment- or education-related travel.
          (2) Earned income.--An amount of any earned income of the 
        family, established at the discretion of the public housing 
        agency, which may be based on--
                  (A) all earned income of the family,
                  (B) the amount earned by particular members of the 
                family;
                  (C) the amount earned by families having certain 
                characteristics; or
                  (D) the amount earned by families or members during 
                certain periods or from certain sources.
          (3) Others.--Such other amounts for other purposes, as the 
        public housing agency may establish.
  (d) Median Income.--In determining median incomes (of persons, 
families, or households) for an area or establishing any ceilings or 
limits based on income under this Act, the Secretary shall determine or 
establish area median incomes and income ceilings and limits for 
Westchester and Rockland Counties, in the State of New York, as if each 
such county were an area not contained within the metropolitan 
statistical area in which it is located. In determining such area 
median incomes or establishing such income ceilings or limits for the 
portion of such metropolitan statistical area that does not include 
Westchester or Rockland Counties, the Secretary shall determine or 
establish area median incomes and income ceilings and limits as if such 
portion included Westchester and Rockland Counties.

SEC. 105. COMMUNITY WORK AND FAMILY SELF-SUFFICIENCY REQUIREMENTS.

  (a) Community Work Requirement.--
          (1) In general.--Except as provided in paragraph (3), each 
        public housing agency shall require, as a condition of 
        occupancy of a public housing dwelling unit by a family and of 
        providing housing assistance under title III on behalf of a 
        family, that each adult member of the family shall contribute 
        not less than 8 hours of work per month (not including 
        political activities) within the community in which the family 
        resides, which may include work performed on locations not 
        owned by the public housing agency).
          (2) Employment status and liability.--The requirement under 
        paragraph (1) may not be construed to establish any employment 
        relationship between the public housing agency and the member 
        of the family subject to the work requirement under such 
        paragraph or to create any responsibility, duty, or liability 
        on the part of the public housing agency for actions arising 
        out of the work done by the member of the family to comply with 
        the requirement, except to the extent that the member of the 
        family is fulfilling the requirement by working directly for 
        such public housing agency.
          (3) Exemptions.--A public housing agency shall provide for 
        the exemption, from the applicability of the requirement under 
        paragraph (1), of each individual who is--
          (1) an elderly person;
          (2) a person with disabilities;
          (3) working, attending school or vocational training, or 
        otherwise complying with work requirements applicable under 
        other public assistance programs (as determined by the agencies 
        or organizations responsible for administering such programs); 
        or
          (4) otherwise physically impaired to the extent that they are 
        unable to comply with the requirement, as certified by a 
        doctor.
  (b) Requirement Regarding Target Date for Transition Out of Assisted 
Housing.--
          (1) In general.--Each public housing agency shall require, as 
        a condition of occupancy of a public housing dwelling unit by a 
        family and of providing housing assistance under title III on 
        behalf of a family, that the family and the agency enter into 
        an agreement (included, pursuant to subsection (d)(2)(C), as a 
        term of an agreement under subsection (d)) establishing a 
        target date by which the family intends to graduate from, 
        terminate tenancy in, or no longer receive public housing or 
        housing assistance under title III.
          (2) Rights of occupancy.--This subsection may not be 
        construed (nor may any provision of subsection (d) or (e)) to 
        create a right on the part of any public housing agency to 
        evict or terminate assistance for a family solely on the basis 
        of any failure of the family to comply with the target date 
        established pursuant to paragraph (1).
          (3) Factors.--In establishing a target date pursuant to 
        paragraph (1) for a family that receives benefits for welfare 
        or public assistance from a State or other public agency under 
        a program that limits the duration during which such benefits 
        may be received, the public housing agency and the family may 
        take into consideration such time limit. This section may not 
        be construed to require any public housing agency to adopt any 
        such time limit on the duration of welfare or public assistance 
        benefits as the target date pursuant to paragraph (1) for a 
        resident.
          (4) Exemptions.--A public housing agency shall provide for 
        the exemption, from the applicability of the requirements under 
        paragraph (1), of each individual who is--
          (1) an elderly person;
          (2) a person with disabilities;
          (3) working, attending school or vocational training, or 
        otherwise complying with work requirements applicable under 
        other public assistance programs (as determined by the agencies 
        or organizations responsible for administering such programs); 
        or
          (4) otherwise physically impaired to the extent that they are 
        unable to comply with the requirement, as certified by a 
        doctor.
  (c) Treatment of Income Changes Resulting From Welfare Program 
Requirements.--
          (1) Covered family.--For purposes of this subsection, the 
        term ``covered family'' means a family that (A) receives 
        benefits for welfare or public assistance from a State or other 
        public agency under a program for which the Federal, State, or 
        local law relating to the program requires, as a condition of 
        eligibility for assistance under the program, participation of 
        a member of the family in an economic self-sufficiency program, 
        and (B) resides in a public housing dwelling unit or is 
        provided housing assistance under title III.
          (2) Decreases in income for failure to comply.--
        Notwithstanding the provisions of sections 225 and 322 
        (relating to family rental contributions), if the welfare or 
        public assistance benefits of a covered family are reduced 
        under a Federal, State, or local law regarding such an 
        assistance program because of any failure of any member of the 
        family to comply with the conditions under the assistance 
        program requiring participation in an economic self-sufficiency 
        program, the amount required to be paid by the family as a 
        monthly contribution toward rent may not be decreased, during 
        the period of the reduction, as a result of any decrease in the 
        income of the family (to the extent that the decrease in income 
        is a result of the benefits reduction).
          (3) Effect of fraud.--Notwithstanding the provisions of 
        sections 225 and 322 (relating to family rental contributions), 
        if the welfare or public assistance benefits of a covered 
        family are reduced because of an act of fraud by a member of 
        the family under the law or program, the amount required to be 
        paid by the covered family as a monthly contribution toward 
        rent may not be decreased, during the period of the reduction, 
        as a result of any decrease in the income of the family (to the 
        extent that the decrease in income is a result of the benefits 
        reduction).
          (4) Notice.--Paragraphs (2) and (3) shall not apply to any 
        covered family before the public housing agency providing 
        assistance under this Act on behalf of the family obtains 
        written notification from the relevant welfare or public 
        assistance agency specifying that the family's benefits have 
        been reduced because of noncompliance with economic self-
        sufficiency program requirements or fraud and the level of such 
        reduction.
          (5) Occupancy rights.--This subsection may not be construed 
        to authorize any public housing agency to establish any time 
        limit on tenancy in a public housing dwelling unit or on 
        receipt of housing assistance under title III.
          (6) Review.--Any covered family residing in public housing 
        that is affected by the operation of this subsection shall have 
        the right to review the determination under this subsection 
        through the administrative grievance procedure established 
        pursuant to section 110 for the public housing agency.
          (7) Cooperation agreements for economic self-sufficiency 
        activities.--
                  (A) Requirement.--A public housing agency providing 
                public housing dwelling units or housing assistance 
                under title III for covered families shall make its 
                best efforts to enter into such cooperation agreements, 
                with State, local, and other agencies providing 
                assistance to covered families under welfare or public 
                assistance programs, as may be necessary, to provide 
                for such agencies to transfer information to facilitate 
                administration of subsection (a) and paragraphs (2), 
                (3), and (4) of this subsection, and other information 
                regarding rents, income, and assistance that may assist 
                a public housing agency or welfare or public assistance 
                agency in carrying out its functions.
                  (B) Contents.--A public housing agency shall seek to 
                include in a cooperation agreement under this paragraph 
                requirements and provisions designed to target 
                assistance under welfare and public assistance programs 
                to families residing in public housing developments and 
                receiving choice-based assistance under title III, 
                which may include providing for self-sufficiency 
                services within such housing, providing for services 
                designed to meet the unique employment-related needs of 
                residents of such housing and recipients of such 
                assistance, providing for placement of workfare 
                positions on-site in such housing, and such other 
                elements as may be appropriate.
                  (C) Confidentiality.--This paragraph may not be 
                construed to authorize any release of information that 
                is prohibited by, or in contravention of, any other 
                provision of Federal, State, or local law.
  (d) Community Work and Family Self-Sufficiency Agreements.--
          (1) In general.--A public housing agency shall enter into a 
        community work and family self-sufficiency agreement under this 
        subsection with each adult member and head of household of each 
        family who is to reside in a dwelling unit in public housing of 
        the agency and each family on behalf of whom the agency will 
        provide housing assistance under title III. Under the agreement 
        the family shall agree that, as a condition of occupancy of the 
        public housing dwelling unit or of receiving such housing 
        assistance, the family will comply with the terms of the 
        agreement.
          (2) Terms.--An agreement under this subsection shall include 
        the following:
                  (A) Terms designed to encourage and facilitate the 
                economic self-sufficiency of the assisted family 
                entering into the agreement and the graduation of the 
                family from assisted housing to unassisted housing.
                  (B) Notice of the requirements under subsection (a) 
                (relating to community work) and the conditions imposed 
                by, and exemptions from, such requirement.
                  (C) The target date agreed upon by the family 
                pursuant to subsection (b) for graduation from, 
                termination of tenancy in, or termination of receipt of 
                public housing or housing assistance under title III.
                  (D) Terms providing for any resources, services, and 
                assistance relating to self-sufficiency that will be 
                made available to the family, including any assistance 
                to be made available pursuant to subsection (c)(7)(B) 
                under a cooperation agreement entered into under 
                subsection (c)(7).
                  (E) Notice of the provisions of paragraphs (2) 
                through (7) of subsection (c) (relating to effect of 
                changes in income on rent and assisted families rights 
                under such circumstances).
  (e) Lease Provisions.--A public housing agency shall incorporate into 
leases under sections 226, and into any agreements for the provision of 
choice-based assistance under title III on behalf of a family--
          (1) a provision requiring compliance with the requirement 
        under subsection (a); and
          (2) provisions incorporating the conditions under subsection 
        (c).
  (f) Treatment of Income.--Notwithstanding any other provision of this 
section, in determining the income or tenancy of a family who resides 
in public housing or receives housing assistance under title III, a 
public housing agency shall consider any decrease in the income of a 
family that results from the reduction of any welfare or public 
assistance benefits received by the family under any Federal, State, or 
local law regarding a program for such assistance if the family (or a 
member thereof, as applicable) has complied with the conditions for 
receiving such assistance and is unable to obtain employment 
notwithstanding such compliance.
  (g) Definition.--For purposes of this section, the term ``economic 
self-sufficiency program'' means any program designed to encourage, 
assist, train, or facilitate the economic independence of participants 
and their families or to provide work for participants, including 
programs for job training, employment counseling, work placement, basic 
skills training, education, workfare, financial or household 
management, apprenticeship, or other activities as the Secretary may 
provide.

SEC. 106. LOCAL HOUSING MANAGEMENT PLANS.

  (a) 5-Year Plan.--The Secretary shall provide for each public housing 
agency to submit to the Secretary, once every 5 years, a plan under 
this subsection for the agency covering a period consisting of 5 fiscal 
years. Each such plan shall contain, with respect to the 5-year period 
covered by the plan, the following information:
          (1) Statement of mission.--A statement of the mission of the 
        agency for serving the needs of low-income families in the 
        jurisdiction of the agency during such period.
          (2) Goals and objectives.--A statement of the goals and 
        objectives of the agency that will enable the agency to serve 
        the needs identified pursuant to paragraph (1) during such 
        period.
          (3) Capital improvement overview.--If the agency will provide 
        capital improvements for public housing developments during 
        such period, an overview ofsuch improvements, the rationale for 
such improvements, and an analysis of how such improvements will enable 
the agency to meet its goals, objectives, and mission.
The first 5-year plan under this subsection for a public housing agency 
shall be submitted for the 5-year period beginning with the first 
fiscal year for which the agency receives assistance under this Act.
  (b) Annual Plan.--The Secretary shall provide for each public housing 
agency to submit to the Secretary a local housing management plan under 
this section for each fiscal year that contains the information 
required under subsection (d). For each fiscal year after the initial 
submission of a plan under this section by a public housing agency, the 
agency may comply with requirements for submission of a plan under this 
subsection by submitting an update of the plan for the fiscal year.
  (c) Procedures.--The Secretary shall establish requirements and 
procedures for submission and review of plans, including requirements 
for timing and form of submission, and for the contents of such plans. 
Such procedures shall provide that a public housing agency--
          (1) shall, in conjunction with the relevant State or unit of 
        general local government, establish procedures to ensure that 
        the plan under this section is consistent with the applicable 
        comprehensive housing affordability strategy (or any 
        consolidated plan incorporating such strategy) for the 
        jurisdiction in which the public housing agency is located, in 
        accordance with title I of the Cranston-Gonzalez National 
        Affordable Housing Act; and
          (2) may, at the option of the agency, submit a plan under 
        this section together with, or as part of, the comprehensive 
        housing affordability strategy (or any consolidated plan 
        incorporating such strategy) for the relevant jurisdiction, and 
        for concomitant review of such plans submitted together.
  (d) Contents.--An annual local housing management plan under this 
section for a public housing agency shall contain the following 
information relating to the upcoming fiscal year for which the 
assistance under this Act is to be made available:
          (1) Needs.--A statement of the housing needs of low-income 
        and very low-income families residing in the community served 
        by the agency, and of other low-income families on the waiting 
        list of the agency (including the housing needs of elderly 
        families and disabled families), and the means by which the 
        agency intends, to the maximum extent practicable, to address 
        such needs.
          (2) Financial resources.--A statement of financial resources 
        available for the agency the planned uses of such resources 
        that includes--
                  (A) a description of the financial resources 
                available to the agency;
                  (B) the uses to which such resources will be 
                committed, including all proposed eligible and required 
                activities under section 203 and housing assistance to 
                be provided under title III;
                  (C) an estimate of the costs of operation and the 
                market rental value of each public housing development; 
                and
                  (D) a specific description, based on population and 
                demographic data, of the unmet affordable housing needs 
                of families in the community served by the agency 
                having incomes not exceeding 30 percent of the area 
                median income and a statement of how the agency will 
                expend grant amounts received under this Act to meet 
                the housing needs of such families.
          (3) Population served.--A statement of the policies of the 
        agency governing eligibility, admissions, and occupancy of 
        families with respect to public housing dwelling units and 
        housing assistance under title III, including--
                  (A) the requirements for eligibility for such units 
                and assistance and the method and procedures by which 
                eligibility and income will be determined and verified;
                  (B) the requirements for selection and admissions of 
                eligible families for such units and assistance, 
                including any preferences and procedures established by 
                the agency and any outreach efforts;
                  (C) the procedures for assignment of families 
                admitted to dwelling units owned, leased, managed, 
                operated, or assisted by the agency;
                  (D) any standards and requirements for occupancy of 
                public housing dwelling units and units assisted under 
                title III, including resident screening policies, 
                standard lease provisions, conditions for continued 
                occupancy, termination of tenancy, eviction, and 
                conditions for termination of housing assistance;
                  (E) the procedures for maintaining waiting lists for 
                admissions to public housing developments of the 
                agency, which may include a system of site-based 
                waiting lists under section 224(c);
                  (F) the criteria for providing and denying housing 
                assistance under title III to families moving into the 
                jurisdiction of the agency; and
                  (G) the fair housing policy of the agency.
          (4) Rent determination.--A statement of the policies of the 
        agency governing rents charged for public housing dwelling 
        units and rental contributions of assisted families under title 
        III and the system used by the agency to ensure that such rents 
        comply with the requirements of this Act.
          (5) Operation and management.--A statement of the rules, 
        standards, and policies of the public housing agency governing 
        maintenance and management of housing owned and operated by the 
        agency, and management of the public housing agency and 
        programs of the agency, including--
                  (A) a description of the manner in which the agency 
                is organized (including any consortia or joint 
                ventures) and staffed to perform the duties and 
                functions of the public housing agency and to 
                administer the operating fund distributions of the 
                agency;
                  (B) policies relating to the rental of dwelling 
                units, including policies designed to reduce vacancies;
                  (C) housing quality standards in effect pursuant to 
                sections 232 and 328 and any certifications required 
                under such sections;
                  (D) emergency and disaster plans for public housing;
                  (E) priorities and improvements for management of 
                public housing, including initiatives to control costs; 
                and
                  (F) policies of the agency requiring the loss or 
                termination of housing assistance and tenancy under 
                sections 641 and 642 (relating to occupancy standards 
                for federally assisted housing).
          (6) Grievance procedure.--A statement of the grievance 
        procedures of the agency under section 110.
          (7) Capital improvements.--With respect to public housing 
        developments owned or operated by the agency, a plan describing 
        the capital improvements necessary to ensure long-term physical 
        and social viability of the developments.
          (8) Demolition and disposition.--With respect to public 
        housing developments owned or operated by the agency--
                  (A) a description of any such housing to be 
                demolished or disposed of under subtitle E of title II; 
                and
                  (B) a timetable for such demolition or disposition.
          (9) Designation of housing for elderly and disabled 
        families.--With respect to public housing developments owned or 
        operated by the agency, a description of any developments (or 
        portions thereof) that the agency has designated or will 
        designate for occupancy by elderly and disabled families in 
        accordance with section 227 and any information required under 
        section 227(d) for such designated developments.
          (10) Conversion of public housing.--With respect to public 
        housing owned or operated by the agency, a description of any 
        building or buildings that the agency is required, under 
        section 203(b), to convert to housing assistance under title 
        III or that the agency voluntarily converts, an analysis of 
        such buildings required under such section for conversion, and 
        a statement of the amount of grant amounts under title II to be 
        used for rental assistance or other housing assistance.
          (11) Homeownership activities.--A description of any 
        homeownership programs of the agency under subtitle D of title 
        II or section 329 for the agency and the requirements and 
        assistance available under such programs.
          (12) Economic self-sufficiency and coordination with welfare 
        and other appropriate agencies.--A description of--
                  (A) policies relating to services and amenities 
                provided or offered to assisted families, including the 
                provision of service coordinators and services designed 
                for certain populations (such as the elderly and 
                disabled);
                  (B) how the agency will coordinate with State, local, 
                and other agencies providing assistance to families 
                participating in welfare or public assistance programs;
                  (C) how the agency will implement and administer 
                section 105; and
                  (D) any policies, programs, plans, and activities of 
                the agency for the enhancement of the economic and 
                social self-sufficiency of residents assisted by the 
                programs of the agency, including rent structures to 
                encourage self-sufficiency.
          (13) Safety and crime prevention.--A plan established by the 
        public housing agency, which shall be subject to the following 
        requirements:
                  (A) Safety measures.--The plan shall provide, on a 
                development-by-development basis, for measures to 
                ensure the safety of public housing residents.
                  (B) Establishment.--The plan shall be established, 
                with respect to each development, in consultation with 
                the police officer or officers in command for the 
                precinct in which the development is located.
                  (C) Content.--The plan shall describe the need for 
                measures to ensure the safety of public housing 
                residents and for crime prevention measures, describe 
                any such activities conducted, or to be conducted, by 
                the agency, and provide for coordination between the 
                public housing agency and the appropriate police 
                precincts for carrying out such measures and 
                activities.
                  (D) Secretarial action.--If the Secretary determines, 
                at any time, that the security needs of a development 
                are not being adequately addressed by the plan, or that 
                the local police precinct is not complying with the 
                plan, the Secretary may mediate between the public 
                housing agency and the local precinct to resolve any 
                issues of conflict. If after such mediation has 
                occurred and the Secretary determines that the security 
                needs of the development are not adequately addressed, 
                the Secretary may require the public housing agency to 
                submit an amended plan.
          (14) Annual audit.--The results of the most recent fiscal 
        year audit of the agency required under section 541(b).
          (15) Troubled agencies.--Such other additional information as 
        the Secretary may determine to be appropriate for each public 
        housing agency that is designated--
                  (A) under section 533(c) as at risk of becoming 
                troubled; or
                  (B) under section 533(a) as troubled.
          (16) Asset management.--A statement of how the agency will 
        carry out its asset management functions with respect to the 
        public housing inventory of the agency, including how the 
        agency will plan for the long-term operating, capital 
        investment, rehabilitation, modernization, disposition, and 
        other needs for such inventory.
  (e) Citizen Participation.--
          (1) Publication of notice.--Not later than 45 days before the 
        date of a hearing conducted under paragraph (2) by the 
        governing body of a public housing agency, the agency shall--
                  (A) publish a notice informing the public that the 
                proposed local housing management plan or amendment is 
                available for inspection at the principal office of the 
                public housing agency during normal business hours and 
                make the plan or amendment so available for inspection 
                during such period; and
                  (B) publish a notice informing the public that a 
                public hearing will be conducted to discuss the local 
                housing management plan and to invite public comment 
                regarding that plan.
          (2) Public hearing.--Before submitting a plan under this 
        section or a significant amendment under section 107(f) to a 
        plan, a public housing agency shall, at a location that is 
        convenient to residents, conduct a public hearing, as provided 
        in the notice published under paragraph (1), regarding the 
        public housing plan or the amendment of the agency.
          (3) Consideration of comments.--A public housing agency shall 
        consider any comments or views made available pursuant to 
        paragraphs (1) and (2) in preparing a final plan or amendment 
        for submission to the Secretary. A summary of such comments or 
        views shall be attached to the plan, amendment, or report 
        submitted.
          (4) Adoption of plan.--After conducting the public hearing 
        under paragraph (2) and considering public comments in 
        accordance with paragraph (3), the public housing agency shall 
        make any appropriate changes to the local housing management 
        plan or amendment and shall--
                  (A) adopt the local housing management plan;
                  (B) submit the plan to any local elected official or 
                officials responsible for appointing the members of the 
                board of directors (or other similar governing body) of 
                the public housing agency for review and approval under 
                subsection (f);
                  (C) submit the plan to the Secretary in accordance 
                with this section; and
                  (D) make the submitted plan or amendment publicly 
                available.
  (f) Local Review.--The public housing agency shall submit a plan 
under this subsection to any local elected official or officials 
responsible for appointing the members of the board of directors (or 
other similar governing body) of the public housing agency for review 
and approval for a 45-day period beginning on the date that the plan is 
submitted to such local official or officials (which period may run 
concurrently with any period under subsection (e) for public comment). 
If the local official or officials responsible under this subsection do 
not act within 45 days of submission of the plan, the plan shall be 
considered approved. If the local official or officials responsible 
under this subsection reject the public housing agency's plan, they 
shall return the plan with their recommended changes to the agency 
within 5 days of their disapproval. The agency shall resubmit an 
updated plan to the local official or officials within 30 days of 
receiving the objections, If the local official or officials again 
reject the plan, the resubmitted plan, together with the local 
official's objections, shall be submitted to the Secretary for 
approval.
  (g) Plans for Small PHA's and PHA's Administering Only Rental 
Assistance.--The Secretary shall establish requirements for submission 
of plans under this section and the information to be included in such 
plans applicable to public housing agencies that own or operate less 
than 250 public housing dwelling units and shall establish requirements 
for such submission and information applicable to agencies that only 
administer housing assistance under title III (and do not own or 
operate public housing). Such requirements shall waive any requirements 
under this section that the Secretary determines are burdensome or 
unnecessary for such agencies.

SEC. 107. REVIEW OF PLANS.

  (a) Review and Notice.--
          (1) Review.--The Secretary shall conduct a limited review of 
        each local housing management plan submitted to the Secretary 
        to ensure that the plan is complete and complies with the 
        requirements of section 106. The Secretary shall have the 
        discretion to review a plan to the extent that the Secretary 
        considers review is necessary.
          (2) Notice.--The Secretary shall notify each public housing 
        agency submitting a plan whether the plan complies with such 
        requirements not later than 75 days after receiving the plan. 
        If the Secretary does not notify the public housing agency, as 
        required under this subsection and subsection (b), the 
        Secretary shall be considered, for purposes of this Act, to 
        have made a determination that the plan complies with the 
        requirements under section 106 and the agency shall be 
        considered to have been notified of compliance upon the 
        expiration of such 75-day period. The preceding sentence shall 
        not preclude judicial review regarding such compliance pursuant 
        to chapter 7 of title 5, United States Code, or an action 
        regarding such compliance under section 1979 of the Revised 
        Statutes of the United States (42 U.S.C. 1883).
  (b) Notice of Reasons for Determination of Noncompliance.--If the 
Secretary determines that a plan, as submitted, does not comply with 
the requirements under section 106, the Secretary shall specify in the 
notice under subsection (a) the reasons for the noncompliance and any 
modifications necessary for the plan to meet the requirements under 
section 106.
  (c) Standards for Determination of Noncompliance.--The Secretary may 
determine that a plan does not comply with the requirements under 
section 106 only if--
          (1) the plan is incomplete in significant matters required 
        under such section;
          (2) there is evidence available to the Secretary that 
        challenges, in a substantial manner, any information provided 
        in the plan;
          (3) the Secretary determines that the plan does not comply 
        with Federal law or violates the purposes of this Act because 
        it fails to provide housing that will be viable on a long-term 
        basis at a reasonable cost;
          (4) the plan plainly fails to adequately identify the needs 
        of low-income families for housing assistance in the 
        jurisdiction of the agency;
          (5) the plan plainly fails to adequately identify the capital 
        improvement needs for public housing developments in the 
        jurisdiction of the agency;
          (6) the activities identified in the plan are plainly 
        inappropriate to address the needs identified in the plan; or
          (7) the plan is inconsistent with the requirements of this 
        Act.
The Secretary shall determine that a plan does not comply with the 
requirements under section 106 if the plan does not include the 
information required under section 106(d)(2)(D).
  (d) Treatment of Existing Plans.--Notwithstanding any other provision 
of this title, a public housing agency shall be considered to have 
submitted a plan under this section if the agency has submitted to the 
Secretary a comprehensive plan under section 14(e) of the United States 
Housing Act of 1937 (as in effect immediately before the effective date 
of the repeal under section 601(b) of this Act) or under the 
comprehensive improvement assistance program under such section 14, and 
the Secretary has approved such plan, before January 1, 1997. The 
Secretaryshall provide specific procedures and requirements for such 
authorities to amend such plans by submitting only such additional 
information as is necessary to comply with the requirements of section 
106.
  (e) Actions To Change Plan.--A public housing agency that has 
submitted a plan under section 106 may change actions or policies 
described in the plan before submission and review of the plan of the 
agency for the next fiscal year only if--
          (1) in the case of costly or nonroutine changes, the agency 
        submits to the Secretary an amendment to the plan under 
        subsection (f) which is reviewed in accordance with such 
        subsection; or
          (2) in the case of inexpensive or routine changes, the agency 
        describes such changes in such local housing management plan 
        for the next fiscal year.
  (f) Amendments to Plan.--
          (1) In general.--During the annual or 5-year period covered 
        by the plan for a public housing agency, the agency may submit 
        to the Secretary any amendments to the plan.
          (2) Review.--The Secretary shall conduct a limited review of 
        each proposed amendment submitted under this subsection to 
        determine whether the plan, as amended by the amendment, 
        complies with the requirements of section 106 and notify each 
        public housing agency submitting the amendment whether the 
        plan, as amended, complies with such requirements not later 
        than 30 days after receiving the amendment. If the Secretary 
        determines that a plan, as amended, does not comply with the 
        requirements under section 106, such notice shall indicate the 
        reasons for the noncompliance and any modifications necessary 
        for the plan to meet the requirements under section 106. If the 
        Secretary does not notify the public housing agency as required 
        under this paragraph, the plan, as amended, shall be 
        considered, for purposes of this section, to comply with the 
        requirements under section 106.
          (3) Standards for determination of noncompliance.--The 
        Secretary may determine that a plan, as amended by a proposed 
        amendment, does not comply with the requirements under section 
        106 only if--
                  (A) the plan, as amended, would be subject to a 
                determination of noncompliance in accordance with the 
                provisions of subsection (c);
                  (B) the Secretary determines that--
                          (i) the proposed amendment is plainly 
                        inconsistent with the activities specified in 
                        the plan; or
                          (ii) there is evidence that challenges, in a 
                        substantial manner, any information contained 
                        in the amendment; or
                  (C) the Secretary determines that the plan, as 
                amended, violates the purposes of this Act because it 
                fails to provide housing that will be viable on a long-
                term basis at a reasonable cost.
          (4) Amendments to extend time of performance.--
        Notwithstanding any other provision of this subsection, the 
        Secretary may not determine that any amendment to the plan of a 
        public housing agency that extends the time for performance of 
        activities assisted with amounts provided under this title 
        fails to comply with the requirements under section 106 if the 
        Secretary has not provided the amount of assistance set forth 
        in the plan or has not provided the assistance in a timely 
        manner.

SEC. 108. REPORTING REQUIREMENTS.

  (a) Performance and Evaluation Report.--Each public housing agency 
shall annually submit to the Secretary, on a date determined by the 
Secretary, a performance and evaluation report concerning the use of 
funds made available under this Act. The report of the public housing 
agency shall include an assessment by the agency of the relationship of 
such use of funds made available under this Act, as well as the use of 
other funds, to the needs identified in the local housing management 
plan and to the purposes of this Act. The public housing agency shall 
certify that the report was available for review and comment by 
affected tenants prior to its submission to the Secretary.
  (b) Review of PHA's.--The Secretary shall, at least on an annual 
basis, make such reviews as may be necessary or appropriate to 
determine whether each public housing agency receiving assistance under 
this section--
          (1) has carried out its activities under this Act in a timely 
        manner and in accordance with its local housing management 
        plan; and
          (2) has a continuing capacity to carry out its local housing 
        management plan in a timely manner.
  (c) Records.--Each public housing agency shall collect, maintain, and 
submit to the Secretary such data and other program records as the 
Secretary may require, in such form and in accordance with such 
schedule as the Secretary may establish.

SEC. 109. PET OWNERSHIP.

  Pet ownership in housing assisted under this Act that is federally 
assisted rental housing (as such term is defined in section 227 of the 
Housing and Urban-Rural Recovery Act of 1983) shall be governed by the 
provisions of section 227 of such Act.

SEC. 110. ADMINISTRATIVE GRIEVANCE PROCEDURE.

  (a) Requirements.--Each public housing agency receiving assistance 
under this Act shall establish and implement an administrative 
grievance procedure under which residents of public housing will--
          (1) be advised of the specific grounds of any proposed 
        adverse public housing agency action;
          (2) have an opportunity for a hearing before an impartial 
        party (including appropriate employees of the public housing 
        agency) upon timely request within a reasonable period of time;
          (3) have an opportunity to examine any documents or records 
        or regulations related to the proposed action;
          (4) be entitled to be represented by another person of their 
        choice at any hearing;
          (5) be entitled to ask questions of witnesses and have others 
        make statements on their behalf; and
          (6) be entitled to receive a written decision by the public 
        housing agency on the proposed action.
  (b) Exclusion From Administrative Procedure of Grievances Concerning 
Evictions From Public Housing.--A public housing agency shall exclude 
from its procedure established under subsection (a) any grievance 
concerning an eviction from or termination of tenancy in public housing 
in any State which requires that, prior to eviction, a resident be 
provided a hearing in court which the Secretary determines provides the 
basic elements of due process.
  (c) Inapplicability to Choice-Based Rental Housing Assistance.--This 
section may not be construed to require any public housing agency to 
establish or implement an administrative grievance procedure with 
respect to assisted families under title III.

SEC. 111. HEADQUARTERS RESERVE FUND.

  (a) Annual Reservation of Amounts.--Notwithstanding any other 
provision of law, the Secretary may retain not more than 2 percent of 
the amounts appropriated to carry out title II for any fiscal year for 
use in accordance with this section.
  (b) Use of Amounts.--Any amounts that are retained under subsection 
(a) or appropriated for use under this section shall be available for 
subsequent allocation to specific areas and communities, and may only 
be used for the Department of Housing and Urban Development and--
          (1) for unforeseen housing needs resulting from natural and 
        other disasters;
          (2) for housing needs resulting from emergencies, as 
        determined by the Secretary, other than such disasters;
          (3) for housing needs related to a settlement of litigation, 
        including settlement of fair housing litigation; and
          (4) for needs related to the Secretary's actions under this 
        Act regarding troubled and at-risk public housing agencies.
Housing needs under this subsection may be met through the provision of 
assistance in accordance with title II or title III, or both.

SEC. 112. LABOR STANDARDS.

  (a) In General.--Any contract for grants, sale, or lease pursuant to 
this Act relating to public housing shall contain the following 
provisions:
          (1) Operation.--A provision requiring that not less than the 
        wages prevailing in the locality, as determined or adopted 
        (subsequent to a determination under applicable State or local 
        law) by the Secretary, shall be paid to all contractors and 
        persons employed in the operation of the low-income housing 
        development involved.
          (2) Production.--A provision that not less than the wages 
        prevailing in the locality, as predetermined by the Secretary 
        of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 276a-276a-
        5), shall be paid to all laborers and mechanics employed in the 
        production of the development involved.
The Secretary shall require certification as to compliance with the 
provisions of this section before making any payment under such 
contract.
  (b) Exceptions.--Subsection (a) and the provisions relating to wages 
(pursuant to subsection (a)) in any contract for grants, sale, or lease 
pursuant to this Act relating to public housing, shall not apply to any 
individual who--
          (1) performs services for which the individual volunteered;
          (2)(A) does not receive compensation for such services; or
          (B) is paid expenses, reasonable benefits, or a nominal fee 
        for such services; and
          (3) is not otherwise employed at any time in the construction 
        work.

SEC. 113. NONDISCRIMINATION.

  (a) In General.--No person in the United States shall on the grounds 
of race, color, national origin, religion, or sex be excluded from 
participation in, be denied the benefits of, or be subjected to 
discrimination under any program or activity funded in whole or in part 
with amounts made available under this Act. Any prohibition against 
discrimination on the basis of age under the Age Discrimination Act of 
1975 or with respect to an otherwise qualified handicapped individual 
as provided in section 504 of the Rehabilitation Act of 1973 shall also 
apply to any such program or activity.
  (b) Civil Rights Compliance.--Each public housing agency that 
receives grant amounts under this Act shall use such amounts and carry 
out its local housing management plan approved under section 107 in 
conformity with title VI of the Civil Rights Act of 1964, the Fair 
Housing Act, section 504 of the Rehabilitation Act of 1973, the Age 
Discrimination Act of 1975, and the Americans With Disabilities Act of 
1990, and shall affirmatively further fair housing.

SEC. 114. PROHIBITION ON USE OF FUNDS.

  None of the funds made available to the Department of Housing and 
Urban Development to carry out this Act, which are obligated to State 
or local governments, public housing agencies, housing finance 
agencies, or other public or quasi-public housing agencies, shall be 
used to indemnify contractors or subcontractors of the government or 
agency against costs associated with judgments of infringement of 
intellectual property rights.

SEC. 115. INAPPLICABILITY TO INDIAN HOUSING.

  Except as specifically provided by law, the provisions of this title, 
and titles II, III, IV, and V shall not apply to public housing 
developed or operated pursuant to a contract between the Secretary and 
an Indian housing authority under the United States Housing Act of 1937 
or to housing assisted under the Native American Housing Assistance and 
Self-Determination Act of 1996.

SEC. 116. REGULATIONS.

  (a) In General.--The Secretary may issue any regulations necessary to 
carry out this Act. This subsection shall take effect on the date of 
the enactment of this Act.
  (b) Rule of Construction.--Any failure by the Secretary to issue any 
regulations authorized under subsection (a) shall not affect the 
effectiveness of any provision of this Act or any amendment made by 
this Act.

                        TITLE II--PUBLIC HOUSING

                        Subtitle A--Block Grants

SEC. 201. BLOCK GRANT CONTRACTS.

  (a) In General.--The Secretary shall enter into contracts with public 
housing agencies under which--
          (1) the Secretary agrees to make a block grant under this 
        title, in the amount provided under section 202(c), for 
        assistance for low-income housing to the public housing agency 
        for each fiscal year covered by the contract; and
          (2) the agency agrees--
                  (A) to provide safe, clean, and healthy housing that 
                is affordable to low-income families and services for 
                families in such housing;
                  (B) to operate, or provide for the operation, of such 
                housing in a financially sound manner;
                  (C) to use the block grant amounts in accordance with 
                this title and the local housing management plan for 
                the agency that complies with the requirements of 
                section 106;
                  (D) to involve residents of housing assisted with 
                block grant amounts in functions and decisions relating 
                to management and the quality of life in such housing;
                  (E) that the management of the public housing of the 
                agency shall be subject to actions authorized under 
                subtitle D of title V;
                  (F) that the Secretary may take actions under section 
                205 with respect to improper use of grant amounts 
                provided under the contract; and
                  (G) to otherwise comply with the requirements under 
                this title.
  (b) Small Public Housing Agency Capital Grant Option.--For any fiscal 
year, upon the request of the Governor of the State, the Secretary 
shall make available directly to the State, from the amounts otherwise 
included in the block grants for all public housing agencies in such 
State which own or operate less than 100 dwelling units, \1/2\ of that 
portion of such amounts that is derived from the capital improvement 
allocations for such agencies pursuant to section 203(c)(1) or 
203(d)(2), as applicable. The Governor of the State will have the 
responsibility to distribute all of such funds, in amounts determined 
by the Governor, only to meet the exceptional capital improvement 
requirements for the various public housing agencies in the State which 
operate less than 100 dwelling units: Provided, however, that for 
States where Federal funds provided to the State are subject to 
appropriation action by the State legislature, the capital funds made 
available to the Governor under this subsection shall be subject to 
such appropriation by the State legislature.
  (c) Modification.--Contracts and agreements between the Secretary and 
a public housing agency may not be amended in a manner which would--
          (1) impair the rights of--
                  (A) leaseholders for units assisted pursuant to a 
                contract or agreement; or
                  (B) the holders of any outstanding obligations of the 
                public housing agency involved for which annual 
                contributions have been pledged; or
          (2) provide for payment of block grant amounts under this 
        title in an amount exceeding the allocation for the agency 
        determined under section 204.
Any rule of law contrary to this subsection shall be deemed 
inapplicable.

SEC. 202. GRANT AUTHORITY, AMOUNT, AND ELIGIBILITY.

  (a) Authority.--The Secretary shall make block grants under this 
title to eligible public housing agencies in accordance with block 
grant contracts under section 201.
  (b) Performance Funds.--
          (1) In general.--The Secretary shall establish 2 funds for 
        the provision of grants to eligible public housing agencies 
        under this title, as follows:
                  (A) Capital fund.--A capital fund to provide capital 
                and management improvements to public housing 
                developments.
                  (B) Operating fund.--An operating fund for public 
                housing operations.
          (2) Flexibility of funding.--
                  (A) In general.--A public housing agency may use up 
                to 20 percent of the amounts from a grant under this 
                title that are allocated and provided from the capital 
                fund for activities that are eligible under section 
                203(a)(2) to be funded with amounts from the operating 
                fund.
                  (B) Full flexibility for small pha's.--In the case of 
                a public housing agency that owns or operates less than 
                250 public housing dwelling units and is (in the 
                determination of the Secretary) operating and 
                maintaining its public housing in a safe, clean, and 
                healthy condition, the agency may use amounts from a 
                grant under this title for any eligible activities 
                under section 203(a), regardless of the fund from which 
                the amounts were allocated and provided.
  (c) Amount of Grants.--The amount of the grant under this title for a 
public housing agency for a fiscal year shall be the amount of the 
allocation for the agency determined under section 204, except as 
otherwise provided in this title and title V.
  (d) Eligibility.--A public housing agency shall be an eligible public 
housing agency with respect to a fiscal year for purposes of this title 
only if--
          (1) the Secretary has entered into a block grant contract 
        with the agency;
          (2) the agency has submitted a local housing management plan 
        to the Secretary for such fiscal year;
          (3) the plan has been determined to comply with the 
        requirements under section 106 and the Secretary has not 
        notified the agency that the plan fails to comply with such 
        requirements;
          (4) the agency is exempt from local taxes, as provided under 
        subsection (e), or receives a contribution, as provided under 
        such subsection;
          (5) no member of the board of directors or other governing 
        body of the agency, or the executive director, has been 
        convicted of a felony;
          (6) the agency has entered into an agreement providing for 
        local cooperation in accordance with subsection (f); and
          (7) the agency has not been disqualified for a grant pursuant 
        to section 205(a) or title V.
  (e) Payments in Lieu of State and Local Taxation of Public Housing 
Developments.--
          (1) Exemption from taxation.--A public housing agency may 
        receive a block grant under this title only if--
                  (A)(i) the developments of the agency (exclusive of 
                any portions not assisted with amounts provided under 
                this title) are exempt from all real and personal 
                property taxes levied or imposed by the State, city, 
                county, or other political subdivision; and
                  (ii) the public housing agency makes payments in lieu 
                of taxes to such taxing authority equal to 10 percent 
                of the sum, for units charged in the developments of 
                the agency, of the difference between the gross rent 
                and the utility cost, or such lesser amount as is--
                          (I) prescribed by State law;
                          (II) agreed to by the local governing body in 
                        its agreement under subsection (f) for local 
                        cooperation with the public housing agency or 
                        under a waiver by the local governing body; or
                          (III) due to failure of a local public body 
                        or bodies other than the public housing agency 
                        to perform any obligation under such agreement; 
                        or
                  (B) the agency complies with the requirements under 
                subparagraph (A) with respect to public housing 
                developments (including public housing units in mixed-
                income developments), but the agency agrees that the 
                units other than public housing units in any mixed-
                income developments (as such term is defined in section 
                221(c)(2)) shall be subject to any otherwise applicable 
                real property taxes imposed by the State, city, county 
                or other political subdivision.
          (2) Effect of failure to exempt from taxation.--
        Notwithstanding paragraph (1), a public housing agency that 
        does not comply with the requirements under such paragraph may 
        receive a block grant under this title, but only if the State, 
        city, county, or other political subdivision in which the 
        development is situated contributes, in the form of cash or tax 
        remission, the amount by which the taxes paid with respect to 
        the development exceed 10 percent of the gross rent and utility 
        cost charged in the development.
  (f) Local Cooperation.--In recognition that there should be local 
determination of the need for low-income housing to meet needs not 
being adequately met by private enterprise, the Secretary may not make 
any grant under this title to a public housing agency unless the 
governing body of the locality involved has entered into an agreement 
with the agency providing for the local cooperation required by the 
Secretary pursuant to this title.
  (g) Exception.--Notwithstanding subsection (a), the Secretary may 
make a grant under this title for a public housing agency that is not 
an eligible public housing agency but only for the period necessary to 
secure, in accordance with this title, an alternative public housing 
agency for the public housing of the ineligible agency.
  (h) Recapture of Capital Assistance Amounts.--The Secretary may 
recapture, from any grant amounts made available to a public housing 
agency from the capital fund, any portion of such amounts that are not 
used or obligated by the public housing agency for use for eligible 
activities under section 203(a)(1) (or dedicated for use pursuant to 
section 202(b)(2)(A)) before the expiration of the 24-month period 
beginning upon the award of such grant to the agency.

SEC. 203. ELIGIBLE AND REQUIRED ACTIVITIES.

  (a) Eligible Activities.--Except as provided in subsection (b) and in 
section 202(b)(2), grant amounts allocated and provided from the 
capital fund and grant amounts allocated and provided from the 
operating fund may be used for the following activities:
          (1) Capital fund activities.--Grant amounts from the capital 
        fund may be used for--
                  (A) the production and modernization of public 
                housing developments, including the redesign, 
                reconstruction, and reconfiguration of public housing 
                sites and buildings and the production of mixed-income 
                developments;
                  (B) vacancy reduction;
                  (C) addressing deferred maintenance needs and the 
                replacement of dwelling equipment;
                  (D) planned code compliance;
                  (E) management improvements;
                  (F) demolition and replacement under section 261;
                  (G) tenant relocation;
                  (H) capital expenditures to facilitate programs to 
                improve the economic empowerment and self-sufficiency 
                of public housing tenants; and
                  (I) capital expenditures to improve the security and 
                safety of residents.
          (2) Operating fund activities.--Grant amounts from the 
        operating fund may be used for--
                  (A) procedures and systems to maintain and ensure the 
                efficient management and operation of public housing 
                units;
                  (B) activities to ensure a program of routine 
                preventative maintenance;
                  (C) anti-crime and anti-drug activities, including 
                the costs of providing adequate security for public 
                housing tenants;
                  (D) activities related to the provision of services, 
                including service coordinators for elderly persons or 
                persons with disabilities;
                  (E) activities to provide for management and 
                participation in the management of public housing by 
                public housing tenants;
                  (F) the costs associated with the operation and 
                management of mixed-income developments;
                  (G) the costs of insurance;
                  (H) the energy costs associated with public housing 
                units, with an emphasis on energy conservation;
                  (I) the costs of administering a public housing 
                community work program under section 105, including the 
                costs of any related insurance needs; and
                  (J) activities in connection with a homeownership 
                program for public housing residents under subtitle D, 
                including providing financing or assistance for 
                purchasing housing, or the provision of financial 
                assistance to resident management corporations or 
                resident councils to obtain training, technical 
                assistance, and educational assistance to promote 
                homeownership opportunities.
  (b) Required Conversion of Assistance for Public Housing to Rental 
Housing Assistance.--
          (1) Requirement.--A public housing agency that receives grant 
        amounts under this title shall provide assistance in the form 
        of rental housing assistance under title III, or appropriate 
        site revitalization or other appropriate capital improvements 
        approved by the Secretary, in lieu of assisting the operation 
        and modernization of any building or buildings of public 
        housing, if the agency provides sufficient evidence to the 
        Secretary that the building or buildings--
                  (A) are on the same or contiguous sites;
                  (B) consist of more than 300 dwelling units;
                  (C) have a vacancy rate of at least 10 percent for 
                dwelling units not in funded, on-schedule modernization 
                programs;
                  (D) are identified as distressed housing for which 
                the public housing agency cannot assure the long-term 
                viability as public housing through reasonable 
                revitalization, density reduction, or achievement of a 
                broader range of household income; and
                  (E) have an estimated cost of continued operation and 
                modernization as public housing that exceeds the cost 
                of providing choice-based rental assistance under title 
                III for all families in occupancy, based on appropriate 
                indicators of cost (such as the percentage of the total 
                development cost required for modernization).
        Public housing agencies shall identify properties that meet the 
        definition of subparagraphs (A) through (E) and shall consult 
        with the appropriate public housing residents and the 
        appropriate unit of general local government in identifying 
        such properties.
          (2) Use of other amounts.--In addition to grant amounts under 
        this title attributable (pursuant to the formulas under section 
        204) to the building or buildings identified under paragraph 
        (1), the Secretary may use amounts provided in appropriation 
        Acts for choice-based housing assistance under title III for 
        families residing in such building or buildings or for 
        appropriate site revitalization or other appropriate capital 
        improvements approved by the Secretary.
          (3) Enforcement.--The Secretary shall take appropriate action 
        to ensure conversion of any building or buildings identified 
        under paragraph (1) and any other appropriate action under this 
        subsection, if the public housing agency fails to take 
        appropriate action under this subsection.
          (4) Failure of pha's to comply with conversion requirement.--
        If the Secretary determines that--
                  (A) a public housing agency has failed under 
                paragraph (1) to identify a building or buildings in a 
                timely manner,
                  (B) a public housing agency has failed to identify 
                one or more buildings which the Secretary determines 
                should have been identified under paragraph (1), or
                  (C) one or more of the buildings identified by the 
                public housing agency pursuant to paragraph (1) should 
                not, in the determination of the Secretary, have been 
                identified under that paragraph,
        the Secretary may identify a building or buildings for 
        conversion and take other appropriate action pursuant to this 
        subsection.
          (5) Cessation of unnecessary spending.--Notwithstanding any 
        other provision of law, if, in the determination of the 
        Secretary, a building or buildings meets or is likely to meet 
        the criteria set forth in paragraph (1), the Secretary may 
        direct the public housing agency to cease additional spending 
        in connection with such building or buildings, except to the 
        extent that additional spending is necessary to ensure safe, 
        clean, and healthy housing until the Secretary determines or 
        approves an appropriate course of action with respect to such 
        building or buildings under this subsection.
          (6) Use of budget authority.--Notwithstanding any other 
        provision of law, if a building or buildings are identified 
        pursuant to paragraph (1), the Secretary may authorize or 
        direct the transfer, to the choice-based or tenant-based 
        assistance program of such agency or to appropriate site 
        revitalization or other capital improvements approved by the 
        Secretary, of--
                  (A) in the case of an agency receiving assistance 
                under the comprehensive improvement assistance program, 
                any amounts obligated by the Secretary for the 
                modernization of such building or buildings pursuant to 
                section 14 of the United States Housing Act of 1937 (as 
                in effect immediately before the effective date of the 
                repeal under section 601(b));
                  (B) in the case of an agency receiving public housing 
                modernization assistance by formula pursuant to such 
                section 14, any amounts provided to the agency which 
                are attributable pursuant to the formula for allocating 
                such assistance to such building or buildings;
                  (C) in the case of an agency receiving assistance for 
                the major reconstruction of obsolete projects, any 
                amounts obligated by the Secretary for the major 
                reconstruction of such building or buildings pursuant 
                to section 5(j)(2) of the United States Housing Act of 
                1937, as in effect immediately before the effective 
                date of the repeal under section 601(b); and
                  (D) in the case of an agency receiving assistance 
                pursuant to the formulas under section 204, any amounts 
                provided to the agency which are attributable pursuant 
                to the formulas for allocating such assistance to such 
                building or buildings.
          (7) Relocation Requirements.--Any public housing agency 
        carrying out conversion of public housing under this subsection 
        shall--
                  (A) notify the families residing in the public 
                housing development subject to the conversion, in 
                accordance with any guidelines issued by the Secretary 
                governing such notifications, that--
                          (i) the development will be removed from the 
                        inventory of the public housing agency; and
                          (ii) the families displaced by such action 
                        will receive choice-based housing assistance or 
                        occupancy in a unit operated or assisted by the 
                        public housing agency;
                  (B) ensure that each family that is a resident of the 
                development is relocated to other safe, clean, and 
                healthy affordable housing, which is, to the maximum 
                extent practicable, housing of the family's choice, 
                including choice-based assistance under title III 
                (provided that with respect to choice-based assistance, 
                the preceding requirement shall be fulfilled only upon 
                the relocation of such family into such housing);
                  (C) provide any necessary counseling for families 
                displaced by such action to facilitate relocation; and
                  (D) provide any reasonable relocation expenses for 
                families displaced by such action.
          (8) Transition.--Any amounts made available to a public 
        housing agency to carry out section 202 of the Departments of 
        Veterans Affairs and Housing and Urban Development, and 
        Independent Agencies Appropriations Act, 1996 (enacted as 
        section 101(e) of Omnibus Consolidated Rescissions and 
        Appropriations Act of 1996 (Public Law 104-134; 110 Stat. 1321-
        279)) may be used to carry out this section. The Secretary 
        shall provide for public housing agencies to conform and 
        continue actions taken under such section 202 in accordance 
        with the requirements under this section.
  (c) Extension of Deadlines.--The Secretary may, for a public housing 
agency, extend any deadline established pursuant to this section or a 
local housing management plan for up to an additional 5 years if the 
Secretary makes a determination that the deadline is impracticable.
  (d) Compliance With Plan.--The local housing management plan 
submitted by a public housing agency (including any amendments to the 
plan), unless determined under section 107 not to comply with the 
requirements under section 106, shall be binding upon the Secretary and 
the public housing agency and the agency shall use any grant amounts 
provided under this title for eligible activities under subsection (a) 
in accordance with the plan. This subsection may not be construed to 
preclude changes or amendments to the plan, as authorized under section 
107 or any actions authorized by this Act to be taken without regard to 
a local housing management plan.

SEC. 204. DETERMINATION OF GRANT ALLOCATION.

  (a) In General.--For each fiscal year, after reserving amounts under 
section 111 from the aggregate amount made available for the fiscal 
year for carrying out this title, the Secretary shall allocate any 
remaining amounts among eligible public housing agencies in accordance 
with this section, so that the sum of all of the allocations for all 
eligible authorities is equal to such remaining amount.
  (b) Allocation Amount.--The Secretary shall determine the amount of 
the allocation for each eligible public housing agency, which shall 
be--
          (1) for any fiscal year beginning after the enactment of a 
        law containing the formulas described in paragraphs (1) and (2) 
        of subsection (c), the sum of the amounts determined for the 
        agency under each such formula; or
          (2) for any fiscal year beginning before the expiration of 
        such period, the sum of--
                  (A) the operating allocation determined under 
                subsection (d)(1) for the agency; and
                  (B) the capital improvement allocation determined 
                under subsection (d)(2) for the agency.
  (c) Permanent Allocation Formulas for Capital and Operating Funds.--
          (1) Establishment of capital fund formula.--The formula under 
        this paragraph shall provide for allocating assistance under 
        the capital fund for a fiscal year. The formula may take into 
        account such factors as--
                  (A) the number of public housing dwelling units owned 
                or operated by the public housing agency, the 
                characteristics and locations of the developments, and 
                the characteristics of the families served and to be 
                served (including the incomes of the families);
                  (B) the need of the public housing agency to carry 
                out rehabilitation and modernization activities, and 
                reconstruction, production, and demolition activities 
                related to public housing dwelling units owned or 
                operated by the public housing agency, including 
                backlog and projected future needs of the agency;
                  (C) the cost of constructing and rehabilitating 
                property in the area; and
                  (D) the need of the public housing agency to carry 
                out activities that provide a safe and secure 
                environment in public housing units owned or operated 
                by the public housing agency.
          (2) Establishment of operating fund formula.--
                  (A) In general.--The formula under this paragraph 
                shall provide for allocating assistance under the 
                operating fund for a fiscal year. The formula may take 
                into account such factors as--
                          (i) standards for the costs of operating and 
                        reasonable projections of income, taking into 
                        account the characteristics and locations of 
                        the public housing developments and 
                        characteristics of the families served and to 
                        be served (including the incomes of the 
                        families), or the costs of providing comparable 
                        services as determined in accordance with 
                        criteria or a formula representing the 
                        operations of a prototype well-managed public 
                        housing development;
                          (ii) the number of public housing dwelling 
                        units owned or operated by the public housing 
                        agency;
                          (iii) the need of the public housing agency 
                        to carry out anti-crime and anti-drug 
                        activities, including providing adequate 
                        security for public housing residents; and
                          (iv) any record by the public housing agency 
                        of exemplary performance in the operation of 
                        public housing.
                  (B) Incentive to increase income.--The formula shall 
                provide an incentive to encourage public housing 
                agencies to increase nonrental income and to increase 
                rental income attributable to their units by 
                encouraging occupancy by families whose incomes have 
                increase while in occupancy and newly admitted 
                families. Any such incentive shall provide that the 
                agency shall derive the full benefit of any increase in 
                nonrental or rental income, and such increase shall not 
                result in a decrease in amounts provided to the agency 
                under this title. In addition, an agency shall be 
                permitted to retain, from each fiscal year, the full 
                benefit of such an increase in nonrental or rental 
                income, except to the extent that such benefit exceeds 
                (i) 100 percent of the total amount of the operating 
                allocation for which the agency is eligible under this 
                section, and (ii) the maximum balance permitted for the 
                agency's operating reserve under this section and any 
                regulations issued under this section.
                  (C) Treatment of utility rates.--The formula shall 
                not take into account the amount of any cost reductions 
                for a public housing agency due to the difference 
                between projected and actual utility rates attributable 
                to actions that are taken by the agency which lead to 
                such reductions, as determined by the Secretary. In the 
                case of any public housing agency that receives 
                financing from any person or entity other than the 
                Secretary or enters into a performance contract to 
                undertake energy conservation improvements in a public 
                housing development, under which the payment does not 
                exceed the cost of the energy saved as a result of the 
                improvements during a reasonable negotiated contract 
                period, the formula shall not take into account the 
                amount of any cost reductions for the agency due to the 
                differences between projected and actual utility 
                consumption attributable to actions that are taken by 
                the agency which lead to such reductions, as determined 
                by the Secretary. Notwithstanding the preceding 2 
                sentences, after the expiration of the 10-year period 
                beginning upon the savings initially taking effect, the 
                Secretary may reduce the amount allocated to the agency 
                under the formula by up to 50 percent of such 
                differences.
          (3) Consideration of performance, costs, and other factors.--
        The formulas under paragraphs (1) and (2) should each reward 
        performance and may each consider appropriate factors that 
        reflect the different characteristics and sizes of public 
        housing agencies, the relative needs, revenues, costs, and 
        capital improvements of agencies, and the relative costs to 
        agencies of operating a well-managed agency that meets the 
        performance targets for the agency established in the local 
        housing management plan for the agency.
          (4) Development under negotiated rulemaking procedure.--The 
        formulas under this subsection shall be developed according to 
        procedures for issuance of regulations under the negotiated 
        rulemaking procedure under subchapter III of chapter 5 of title 
        5, United States Code, except that the formulas shall not be 
        contained in a regulation.
          (5) Report.--Not later than the expiration of the 12-month 
        period beginning upon the enactment of this Act, the Secretary 
        shall submit a report to the Congress containing the proposed 
        formulas established pursuant to paragraph (4) that meets the 
        requirements of this subsection.
  (d) Interim Allocation Requirements.--
          (1) Operating allocation.--
                  (A) Applicability to appropriated amounts.--Of any 
                amounts available for allocation under this subsection 
                for a fiscal year, an amount shall be used only to 
                provide amounts for operating allocations under this 
                paragraph for eligible public housing agencies that 
                bears the same ratio to such total amount available for 
                allocation that the amount appropriated for fiscal year 
                1997 for operating subsidies under section 9 of the 
                United States Housing Act of 1937 bears to the sum of 
                such operating subsidy amounts plus the amounts 
                appropriated for such fiscal year for modernization 
                under section 14 of such Act.
                  (B) Determination.--The operating allocation under 
                this paragraph for a public housing agency for a fiscal 
                year shall be an amount determined by applying, to the 
                amount to be allocated under this paragraph, the 
                formula used for determining the distribution of 
                operating subsidies for fiscal year 1997 to public 
                housing agencies (as modified under subparagraphs (C) 
                and (D)) under section 9 of the United States Housing 
                Act of 1937, as in effect immediately before the 
                effective date of the repeal under section 601(b).
                  (C) Treatment of chronically vacant units.--The 
                Secretary shall revise the formula referred to in 
                subparagraph (B) so that the formula does not provide 
                any amounts, other than utility costs and other 
                necessary costs (such as costs necessary for the 
                protection of persons and property), attributable to 
                any dwelling unit of a public housing agency that has 
                been vacant continuously for 6 or more months. A unit 
                shall not be considered vacant for purposes of this 
                paragraph if the unit is unoccupied because of 
                rehabilitation or renovation that is on schedule.
                  (D) Treatment of increases in income.--The Secretary 
                shall revise the formula referred to in subparagraph 
                (B) to provide an incentive to encourage public housing 
                agencies to increase nonrental income and to increase 
                rental income attributable to their units by 
                encouraging occupancy by families whose incomes have 
                increased while in occupancy and newly admitted 
                families. Any such incentive shall provide that the 
                agency shall derive the full benefit of any increase in 
                nonrental or rental income, and such increase shall not 
                result in a decrease in amounts provided to the agency 
                under this title. In addition, an agency shall be 
                permitted to retain, from each fiscal year, the full 
                benefit of such an increase in nonrental or rental 
                income, except that such benefit may not be retained 
                if--
                          (i) the agency's operating allocation equals 
                        100 percent of the amount for which it is 
                        eligible under section 9 of the United States 
                        Housing Act of 1937, as in effect immediately 
                        before the effective date of the repeal under 
                        section 601(b) of this Act; and
                          (ii) the agency's operating reserve balance 
                        is equal to the maximum amount permitted under 
                        section 9 of the United States Housing Act of 
                        1937, as in effect immediately before the 
                        effective date of the repeal under section 
                        601(b) of this Act.
          (2) Capital improvement allocation.--
                  (A) Applicability to appropriated amounts.--Of any 
                amounts available for allocation under this subsection 
                for a fiscal year, an amount shall be used only to 
                provide amounts for capital improvement allocations 
                under this paragraph for eligible public housing 
                agencies that bears the same ratio to such total amount 
                available for allocation that the amount appropriated 
                for fiscal year 1997 for modernization under section 14 
                of the United States Housing Act of 1937 bears to the 
                sum of such modernization amounts plus the amounts 
                appropriated for such fiscal year for operating 
                subsidies under section 9 of such Act.
                  (B) Determination.--The capital improvement 
                allocation under this paragraph for an eligible public 
                housing agency for a fiscal year shall be determined by 
                applying, to the amount to be allocated under this 
                paragraph, the formula used for determining the 
                distribution of modernization assistance for fiscal 
                year 1997 to public housing agencies under section 14 
                of the United States Housing Act of 1937, as in effect 
                immediately before the effective date of the repeal 
                under section 601(b), except that the Secretary shall 
                establish a method for taking into consideration 
                allocation of amounts under the comprehensive 
                improvement assistance program.
  (e) Eligibility of Units Acquired From Proceeds of Sales Under 
Demolition or Disposition Plan.--If a public housing agency uses 
proceeds from the sale of units under a homeownership program in 
accordance with section 251 to acquire additional units to be sold to 
low-income families, the additional units shall be counted as public 
housing for purposes of determining the amount of the allocation to the 
agency under this section until sale by the agency, but in any case no 
longer than 5 years.

SEC. 205. SANCTIONS FOR IMPROPER USE OF AMOUNTS.

  (a) In General.--In addition to any other actions authorized under 
this title, if the Secretary finds pursuant to an audit under section 
541 that a public housing agency receiving grant amounts under this 
title has failed to comply substantially with any provision of this 
title, the Secretary may--
          (1) terminate payments under this title to the agency;
          (2) withhold from the agency amounts from the total 
        allocation for the agency pursuant to section 204;
          (3) reduce the amount of future grant payments under this 
        title to the agency by an amount equal to the amount of such 
        payments that were not expended in accordance with this title;
          (4) limit the availability of grant amounts provided to the 
        agency under this title to programs, projects, or activities 
        not affected by such failure to comply;
          (5) withhold from the agency amounts allocated for the agency 
        under title III; or
          (6) order other corrective action with respect to the agency.
  (b) Termination of Compliance Action.--If the Secretary takes action 
under subsection (a) with respect to a public housing agency, the 
Secretary shall--
          (1) in the case of action under subsection (a)(1), resume 
        payments of grant amounts under this title to the agency in the 
        full amount of the total allocation under section 204 for the 
        agency at the time that the Secretary first determines that the 
        agency will comply with the provisions of this title;
          (2) in the case of action under paragraph (2), (5), or (6) of 
        subsection (a), make withheld amounts available as the 
        Secretary considers appropriate to ensure that the agency 
        complies with the provisions of this title; or
          (3) in the case of action under subsection (a)(4), release 
        such restrictions at the time that the Secretary first 
        determines that the agency will comply with the provisions of 
        this title.

           Subtitle B--Admissions and Occupancy Requirements

SEC. 221. LOW-INCOME HOUSING REQUIREMENT.

  (a) Production Assistance.--Any public housing produced using amounts 
provided under a grant under this title or under the United States 
Housing Act of 1937 shall be operated as public housing for the 40-year 
period beginning upon such production.
  (b) Operating Assistance.--No portion of any public housing 
development operated with amounts from a grant under this title or 
operating assistance provided under the United States Housing Act of 
1937 may be disposed of before the expiration of the 10-year period 
beginning upon the conclusion of the fiscal year for which the grant or 
such assistance was provided, except as provided in this Act.
  (c) Capital Improvements Assistance.--Amounts may be used for 
eligible activities under section 203(a)(1) only for the following 
housing developments:
          (1) Low-income developments.--Amounts may be used for a low-
        income housing development that--
                  (A) is owned by public housing agencies;
                  (B) is operated as low-income rental housing and 
                produced or operated with assistance provided under a 
                grant under this title; and
                  (C) is consistent with the purposes of this title.
        Any development, or portion thereof, referred to in this 
        paragraph for which activities under section 203(a)(1) are 
        conducted using amounts from a grant under this title shall be 
        maintained and used as public housing for the 20-year period 
        beginning upon the receipt of such grant. Any public housing 
        development, or portion thereof, that received the benefit of a 
        grant pursuant to section 14 of the United States Housing Act 
        of 1937 shall be maintained and used as public housing for the 
        20-year period beginning upon receipt of such amounts.
          (2) Mixed income developments.--Amounts may be used for 
        eligible activities under section 203(a)(1) for mixed-income 
        developments, which shall be a housing development that--
                  (A) contains dwelling units that are available for 
                occupancy by families other than low-income families;
                  (B) contains a number of dwelling units--
                          (i) which units are made available (by master 
                        contract or individual lease) for occupancy 
                        only by low- and very low-income families 
                        identified by the public housing agency;
                          (ii) which number is not less than a 
                        reasonable number of units, including related 
                        amenities, taking into account the amount of 
                        the assistance provided by the agency compared 
                        to the total investment (including costs of 
                        operation) in the development;
                          (iii) which units are subject to the 
                        statutory and regulatory requirements of the 
                        public housing program, except that the 
                        Secretary may grant appropriate waivers to such 
                        statutory and regulatory requirements if 
                        reductions in funding or other changes to the 
                        program make continued application of such 
                        requirements impracticable;
                          (iv) which units are specially designated as 
                        dwelling units under this subparagraph, except 
                        the equivalent units in the development may be 
                        substituted for designated units during the 
                        period the units are subject to the 
                        requirements of the public housing program; and
                          (v) which units shall be eligible for 
                        assistance under this title; and
                  (C) is owned by the public housing agency, an 
                affiliate controlled by it, or another appropriate 
                entity.
        Notwithstanding any other provision of this title, to 
        facilitate the establishment of socioeconomically mixed 
        communities, a public housing agency that uses grant amounts 
        under this title for a mixed income development under this 
        paragraph may, to the extent that income from such a 
        development reduces the amount of grant amounts used for 
        operating or other costs relating to public housing, use such 
        resulting savings to rent privately developed dwelling units in 
        the neighborhood of the mixed income development. Such units 
        shall be made available for occupancy only by low-income 
        families eligible for residency in public housing.

SEC. 222. FAMILY ELIGIBILITY.

  (a) In General.--Dwelling units in public housing may be rented only 
to families who are low-income families at the time of their initial 
occupancy of such units.
  (b) Income Mix Within Developments.--A public housing agency may 
establish and utilize income-mix criteria for the selection of 
residents for dwelling units in public housing developments that limit 
admission to a development by selecting applicants having incomes 
appropriate so that the mix of incomes of families occupying the 
development at any time is proportional to the income mix in the 
eligible population of the jurisdiction of the agency at such time, as 
adjusted to take into consideration the severity of housing need. Any 
criteria established under this subsection shall be subject to the 
provisions of subsection (c).
  (c) Income Mix.--
          (1) PHA income mix.--Of the public housing dwelling units of 
        a public housing agency made available for occupancy by 
        eligible families, not less than 35 percent shall be occupied 
        by families whose incomes at the time of occupancy do not 
        exceed 30 percent of the area median income, as determined by 
        the Secretary with adjustments for smaller and larger families, 
        except that the Secretary, may for purposes of this subsection, 
        establish income ceilings higher or lower than 30 percent of 
        the median for the area on the basis of the Secretary's 
        findings that such variations are necessary because of 
        unusually high or low family incomes. This paragraph may not be 
        construed to create any authority on the part of any public 
        housing agency to evict any family residing in public housing 
        solely because of the income of the family or because of any 
        noncompliance or overcompliance with the requirement of this 
        paragraph.
          (2) Prohibition of concentration of low-income families.--A 
        public housing agency may not, in complying with the 
        requirements under paragraph (1), concentrate very low-income 
        families (or other families with relatively low incomes) in 
        public housing dwelling units in certain public housing 
        developments or certain buildings within developments. The 
        Secretary may review the income and occupancy characteristics 
        of the public housing developments, and the buildings of such 
        developments, of public housing agencies to ensure compliance 
        with the provisions of this paragraph.
          (3) Fungibility with choice-based assistance.--If, during a 
        fiscal year, a public housing agency provides choice-based 
        housing assistance under title III for a number of low-income 
        families, who are initially assisted by the agency in such year 
        and have incomes described in section 321(b) (relating to 
        income targeting), which exceeds the number of families that is 
        required for the agency to comply with the percentage 
        requirement under such section 321(b) for such fiscal year, 
        notwithstanding paragraph (1) of this subsection, the number of 
        public housing dwelling units that the agency must otherwise 
        make available in accordance with such paragraph to comply with 
        the percentage requirement under such paragraph shall be 
        reduced by such excess number of families for such fiscal year.
  (d) Waiver of Eligibility Requirements for Occupancy by Police 
Officers.--
          (1) Authority and waiver.--To the extent necessary to provide 
        occupancy in public housing dwelling units to police officers 
        and other law enforcement or security personnel (who are not 
        otherwise eligible for residence in public housing) and to 
        increase security for other public housing residents in 
        developments where crime has been a problem, a public housing 
        agency may, with respect to such units and subject to paragraph 
        (2)--
                  (A) waive--
                          (i) the provisions of subsection (a) of this 
                        section and section 225(a); and
                          (ii) the applicability of--
                                  (I) any preferences for occupancy 
                                established under section 223;
                                  (II) the minimum rental amount 
                                established pursuant to section 225(c) 
                                and any maximum monthly rental amount 
                                established pursuant to section 225(b);
                                  (III) any criteria relating to income 
                                mix within developments established 
                                under subsection (b);
                                  (IV) the income mix requirements 
                                under subsection (c); and
                                  (V) any other occupancy limitations 
                                or requirements; and
                  (B) establish special rent requirements and other 
                terms and conditions of occupancy.
          (2) Conditions of waiver.--A public housing agency may take 
        the actions authorized in paragraph (1) only if agency 
        determines that such actions will increase security in the 
        public housing developments involved and will not result in a 
        significant reduction of units available for residence by low-
        income families.

SEC. 223. PREFERENCES FOR OCCUPANCY.

  (a) Authority To Establish.--Each public housing agency may establish 
a system for making dwelling units in public housing available for 
occupancy that provides preference for such occupancy to families 
having certain characteristics.
  (b) Content.--Each system of preferences established pursuant to this 
section shall be based upon local housing needs and priorities, as 
determined by the public housing agency using generally accepted data 
sources, including any information obtained pursuant to an opportunity 
for public comment as provided under section 106(e) and under the 
requirements applicable to the comprehensive housing affordability 
strategy for the relevant jurisdiction.
  (c) Sense of the Congress.--It is the sense of the Congress that, to 
the greatest extent practicable, public housing agencies involved in 
the selection of tenants under the provisions of this title should 
adopt preferences for individuals who are victims of domestic violence.

SEC. 224. ADMISSION PROCEDURES.

  (a) Admission Requirements.--A public housing agency shall ensure 
that each family residing in a public housing development owned or 
administered by the agency is admitted in accordance with the 
procedures established under this title by the agency and the income 
limits under section 222.
  (b) Notification of Application Decisions.--A public housing agency 
shall establish procedures designed to provide for notification to an 
applicant for admission to public housing of the determination with 
respect to such application, the basis for the determination, and, if 
the applicant is determined to be eligible for admission, the projected 
date of occupancy (to the extent such date can reasonably be 
determined). If an agency denies an applicant admission to public 
housing, the agency shall notify the applicant that the applicant may 
request an informal hearing on the denial within a reasonable time of 
such notification.
  (c) Site-Based Waiting Lists.--A public housing agency may establish 
procedures for maintaining waiting lists for admissions to public 
housing developments of the agency, which may include (notwithstanding 
any other law, regulation, handbook, or notice to the contrary) a 
system of site-based waiting lists whereby applicants may apply 
directly at or otherwise designate the development or developments in 
which they seek to reside. All such procedures shall comply with all 
provisions of title VI of the Civil Rights Act of 1964, the Fair 
Housing Act, and other applicable civil rights laws.
  (d) Confidentiality for Victims of Domestic Violence.--A public 
housing agency shall be subject to the restrictions regarding release 
of information relating to the identity and new residence of any family 
in public housing that was a victim of domestic violence that are 
applicable to shelters pursuant to the Family Violence Prevention and 
Services Act. The agency shall work with the United States Postal 
Service to establish procedures consistent with the confidentiality 
provisions in the Violence Against Women Act of 1994.
  (e) Transfers.--A public housing agency may apply, to each public 
housing resident seeking to transfer from one development to another 
development owned or operated by the agency, the screening procedures 
applicable at such time to new applicants for public housing.

SEC. 225. FAMILY CHOICE OF RENTAL PAYMENT.

  (a) Rental Contribution by Resident.--A family residing in a public 
housing dwelling shall pay as monthly rent for the unit the amount 
determined under paragraph (1) or (2) of subsection (b), subject to the 
requirement under subsection (c). Each public housing agency shall 
provide for each family residing in a public housing dwelling unit 
owned or administered by the agency to elect annually whether the rent 
paid by such family shall be determined under paragraph (1) or (2) of 
subsection (b).
  (b) Allowable Rent Structures.--
          (1) Flat rents.--Each public housing agency shall establish, 
        for each dwelling unit in public housing owned or administered 
        by the agency, a flat rental amount for the dwelling unit, 
        which shall--
                  (A) be based on the rental value of the unit, as 
                determined by the public housing agency; and
                  (B) be designed in accordance with subsection (e) so 
                that the rent structures do not create a disincentive 
                for continued residency in public housing by families 
                who are attempting to become economically self-
                sufficient through employment or who have attained a 
                level of self-sufficiency through their own efforts.
        The rental amount for a dwelling unit shall be considered to 
        comply with the requirements of this paragraph if such amount 
        does not exceed the actual monthly costs to the public housing 
        agency attributable to providing and operating the dwelling 
        unit. The preceding sentence may not be construed to require 
        establishment of rental amounts equal to or based on operating 
        costs or to prevent public housing agencies from developing 
        flat rents required under this paragraph in any other manner 
        that may comply with this paragraph.
          (2) Income-based rents.--The monthly rental amount determined 
        under this paragraph for a family shall be an amount, 
        determined by the public housing agency, that does not exceed 
        the greatest of the following amounts (rounded to the nearest 
        dollar):
                  (A) 30 percent of the monthly adjusted income of the 
                family.
                  (B) 10 percent of the monthly income of the family.
                  (C) If the family is receiving payments for welfare 
                assistance from a public agency and a part of such 
                payments, adjusted in accordance with the actual 
                housing costs of the family, is specifically designated 
                by such agency to meet the housing costs of the family, 
                the portion of such payments that is so designated.
        Nothing in this paragraph may be construed to require a public 
        housing agency to charge a monthly rent in the maximum amount 
        permitted under this paragraph.
  (c) Minimum Rental Amount.--Notwithstanding the method for rent 
determination elected by a family pursuant to subsection (a), each 
public housing agency shall require that the monthly rent for each 
dwelling unit in public housing owned or administered by the agency 
shall not be less than a minimum amount (which amount shall include any 
amount allowed for utilities), which shall be an amount determined by 
the agency that is not less than $25 nor more than $50.
  (d) Hardship Provisions.--
          (1) Minimum rental.--
                  (A) In general.--Notwithstanding subsection (c), a 
                public housing agency shall grant an exemption from 
                application of the minimum monthly rental under such 
                subsection to any family unable to pay such amount 
                because of financial hardship, which shall include 
                situations in which (i) the family has lost eligibility 
                for or is awaiting an eligibility determination for a 
                Federal, State, or local assistance program; (ii) the 
                family would be evicted as a result of the imposition 
                of the minimum rent requirement under subsection (c); 
                (iii) the income of the family has decreased because of 
                changed circumstance, including loss of employment; and 
                (iv) a death in the family has occurred; and other 
                situations as may be determined by the agency.
                  (B) Waiting period.--If a resident requests a 
                hardship exemption under this paragraph and the public 
                housing agency reasonably determines the hardship to be 
                of a temporary nature, an exemption shall not be 
                granted during the 90-day period beginning upon the 
                making of a request for the exemption. A resident may 
                not be evicted during such 90-day period for nonpayment 
                of rent. In such a case, if the resident thereafter 
                demonstrates that the financial hardship is of a long-
                term basis, the agency shall retroactively exempt the 
                resident from the applicability of the minimum rent 
                requirement for such 90-day period.
          (2) Switching rent determination methods.--Notwithstanding 
        subsection (a), in the case of a family that has elected to pay 
        rent in the amount determined under subsection (b)(1), a public 
        housing agency shall provide for the family to pay rent in the 
        amount determined under subsection (b)(2) during the period for 
        which such election was made if the family is unable to pay 
theamount determined under subsection (b)(1) because of financial 
hardship, including--
                  (A) situations in which the income of the family has 
                decreased because of changed circumstances, loss of 
                reduction of employment, death in the family, and 
                reduction in or loss of income or other assistance;
                  (B) an increase, because of changed circumstances, in 
                the family's expenses for--
                          (i) medical costs;
                          (ii) child care;
                          (iii) transportation;
                          (iv) education; or
                          (v) similar items; and
                  (C) such other situations as may be determined by the 
                agency.
  (e) Encouragement of Self-Sufficiency.--The rental policy developed 
by each public housing agency shall encourage and reward employment and 
economic self-sufficiency.
  (f) Income Reviews.--Each public housing agency shall review the 
income of each family occupying a dwelling unit in public housing owned 
or administered by the agency not less than annually, except that, in 
the case of families that are paying rent in the amount determined 
under subsection (b)(1), the agency shall review the income of such 
family not less than once every 3 years.
  (g) Disallowance of Earned Income From Rent Determinations.--
          (1) In general.--Notwithstanding any other provision of law, 
        the rent payable under this section by a family whose income 
        increases as a result of employment of a member of the family 
        who was previously unemployed for 1 or more years (including a 
        family whose income increases as a result of the participation 
        of a family member in any family self-sufficiency or other job 
        training program) may not be increased as a result of the 
        increased income due to such employment during the 18-month 
        period beginning on the date on which the employment is 
        commenced.
          (2) Phase-in of rent increases.--After the expiration of the 
        18-month period referred to in paragraph (1), rent increases 
        due to the continued employment of the family member described 
        in paragraph (1) shall be phased in over a subsequent 3-year 
        period.
          (3) Transition.--Notwithstanding the provisions of paragraphs 
        (1) and (2), any resident of public housing participating in 
        the program under the authority contained in the undesignated 
        paragraph at the end of section 3(c)(3) of the United States 
        Housing Act of 1937 (as in effect before the effective date of 
        the repeal under section 601(b) of this Act) shall be governed 
        by such authority after such date.
  (h) Phase-In of Rent Contribution Increases After Effective Date.--
          (1) In general.--Except as provided in paragraph (2), for any 
        family residing in a dwelling unit in public housing upon the 
        effective date of this Act, if the monthly contribution for 
        rental of an assisted dwelling unit to be paid by the family 
        upon initial applicability of this title is greater than the 
        amount paid by the family under the provisions of the United 
        States Housing Act of 1937 immediately before such 
        applicability, any such resulting increase in rent contribution 
        shall be--
                  (A) phased in equally over a period of not less than 
                3 years, if such increase is 30 percent or more of such 
                contribution before initial applicability; and
                  (B) limited to not more than 10 percent per year if 
                such increase is more than 10 percent but less than 30 
                percent of such contribution before initial 
                applicability.
          (2) Exception.--The minimum rental amount under subsection 
        (c) shall apply to each family described in paragraph (1) of 
        this subsection, notwithstanding such paragraph.

SEC. 226. LEASE REQUIREMENTS.

  In renting dwelling units in a public housing development, each 
public housing agency shall utilize leases that--
          (1) do not contain unreasonable terms and conditions;
          (2) obligate the public housing agency to maintain the 
        development in compliance with the housing quality requirements 
        under section 232;
          (3) require the public housing agency to give adequate 
        written notice of termination of the lease, which shall not be 
        less than--
                  (A) the period provided under the applicable law of 
                the jurisdiction or 14 days, whichever is less, in the 
                case of nonpayment of rent;
                  (B) a reasonable period of time, but not to exceed 14 
                days, when the health or safety of other residents or 
                public housing agency employees is threatened; and
                  (C) the period of time provided under the applicable 
                law of the jurisdiction, in any other case;
          (4) contain the provisions required under sections 642 and 
        643 (relating to limitations on occupancy in federally assisted 
        housing); and
          (5) specify that, with respect to any notice of eviction or 
        termination, notwithstanding any State law, a public housing 
        resident shall be informed of the opportunity, prior to any 
        hearing or trial, to examine any relevant documents, records or 
        regulations directly related to the eviction or termination.

SEC. 227. DESIGNATED HOUSING FOR ELDERLY AND DISABLED FAMILIES.

  (a) Authority To Provide Designated Housing.--
          (1) In general.--Subject only to provisions of this section 
        and notwithstanding any other provision of law, a public 
        housing agency for which the information required under 
        subsection (d) is in effect may provide public housing 
        developments (or portions of developments) designated for 
        occupancy by (A) only elderly families, (B) only disabled 
        families, or (C) elderly and disabled families.
          (2) Priority for occupancy.--In determining priority for 
        admission to public housing developments (or portions of 
        developments) that are designated for occupancy as provided in 
        paragraph (1), the public housing agency may make units in such 
        developments (or portions) available only to the types of 
        families for whom the development is designated.
          (3) Eligibility of near-elderly families.--If a public 
        housing agency determines that there are insufficient numbers 
        of elderly families to fill all the units in a development (or 
        portion of a development) designated under paragraph (1) for 
        occupancy by only elderly families, the agency may provide that 
        near-elderly families may occupy dwelling units in the 
        development (or portion).
  (b) Standards Regarding Evictions.--Except as provided in subtitle C 
of title VI, any tenant who is lawfully residing in a dwelling unit in 
a public housing development may not be evicted or otherwise required 
to vacate such unit because of the designation of the development (or 
portion of a development) pursuant to this section or because of any 
action taken by the Secretary or any public housing agency pursuant to 
this section.
  (c) Relocation Assistance.--A public housing agency that designates 
any existing development or building, or portion thereof, for occupancy 
as provided under subsection (a)(1) shall provide, to each person and 
family who agrees to be relocated in connection with such designation--
          (1) notice of the designation and an explanation of available 
        relocation benefits, as soon as is practicable for the agency 
        and the person or family;
          (2) access to comparable housing (including appropriate 
        services and design features), which may include choice-based 
        rental housing assistance under title III, at a rental rate 
        paid by the tenant that is comparable to that applicable to the 
        unit from which the person or family has vacated; and
          (3) payment of actual, reasonable moving expenses.
  (d) Required Inclusions in Local Housing Management Plan.--A public 
housing agency may designate a development (or portion of a 
development) for occupancy under subsection (a)(1) only if the agency, 
as part of the agency's local housing management plan--
          (1) establishes that the designation of the development is 
        necessary--
                  (A) to achieve the housing goals for the jurisdiction 
                under the comprehensive housing affordability strategy 
                under section 105 of the Cranston-Gonzalez National 
                Affordable Housing Act; or
                  (B) to meet the housing needs of the low-income 
                population of the jurisdiction; and
          (2) includes a description of--
                  (A) the development (or portion of a development) to 
                be designated;
                  (B) the types of tenants for which the development is 
                to be designated;
                  (C) any supportive services to be provided to tenants 
                of the designated development (or portion);
                  (D) how the design and related facilities (as such 
                term is defined in section 202(d)(8) of the Housing Act 
                of 1959) of the development accommodate the special 
                environmental needs of the intended occupants; and
                  (E) any plans to secure additional resources or 
                housing assistance to provide assistance to families 
                that may have been housed if occupancy in the 
                development were not restricted pursuant to this 
                section.
For purposes of this subsection, the term ``supportive services'' means 
services designed to meet the special needs of residents. 
Notwithstanding section 107, the Secretary may approve a local housing 
management plan without approving the portion of the plan covering 
designation of a development pursuant to this section.
  (e) Effectiveness.--
          (1) Initial 5-year effectiveness.--The information required 
        under subsection (d) shall be in effect for purposes of this 
        section during the 5-year period that begins upon notification 
        under section 107(a) of the public housing agency that the 
        information complies with the requirements under section 106 
        and this section.
          (2) Renewal.--Upon the expiration of the 5-year period under 
        paragraph (1) or any 2-year period under this paragraph, an 
        agency may extend the effectiveness of the designation and 
        information for an additional 2-year period (that begins upon 
        such expiration) by submitting to the Secretary any information 
        needed to update the information. The Secretary may not limit 
        the number of times a public housing agency extends the 
        effectiveness of a designation and information under this 
        paragraph.
          (3) Treatment of existing plans.--Notwithstanding any other 
        provision of this section, a public housing agency shall be 
        considered to have submitted the information required under 
        this section if the agency has submitted to the Secretary an 
        application and allocation plan under section 7 of the United 
        States Housing Act of 1937 (as in effect before the effective 
        date of the repeal under section 601(b) of this Act) that has 
        not been approved or disapproved before such effective date.
          (4) Transition provision.--Any application and allocation 
        plan approved under section 7 of the United States Housing Act 
        of 1937 (as in effect before the effective date of the repeal 
        under section 601(b) of this Act) before such effective date 
        shall be considered to be the information required to be 
        submitted under this section and that is in effect for purposes 
        of this section for the 5-year period beginning upon such 
        approval.
  (f) Inapplicability of Uniform Relocation Assistance and Real 
Property Acquisitions Policy Act of 1970.--No resident of a public 
housing development shall be considered to be displaced for purposes of 
the Uniform Relocation Assistance and Real Property Acquisitions Policy 
Act of 1970 because of the designation of any existing development or 
building, or portion thereof, for occupancy as provided under 
subsection (a) of this section.
  (g) Use of Amounts.--Any amounts appropriated pursuant to section 
10(b) of the Housing Opportunity Program Extension Act of 1996 (Public 
Law 104-120) may also be used for choice-based rental housing 
assistance under title III for public housing agencies to implement 
this section.

                         Subtitle C--Management

SEC. 231. MANAGEMENT PROCEDURES.

  (a) Sound Management.--A public housing agency that receives grant 
amounts under this title shall establish and comply with procedures and 
practices sufficient to ensure that the public housing developments 
owned or administered by the agency are operated in a sound manner.
  (b) Accounting System for Rental Collections and Costs.--
          (1) Establishment.--Each public housing agency that receives 
        grant amounts under this title shall establish and maintain a 
        system of accounting for rental collections and costs 
        (including administrative, utility, maintenance, repair, and 
        other operating costs) for each project and operating cost 
        center (as determined by the Secretary).
          (2) Access to records.--Each public housing agency shall make 
        available to the general public the information required 
        pursuant to paragraph (1) regarding collections and costs.
          (3) Exemption.--The Secretary may permit authorities owning 
        or operating fewer than 500 dwelling units to comply with the 
        requirements of this subsection by accounting on an agency-wide 
        basis.
  (c) Management by Other Entities.--Except as otherwise provided under 
this Act, a public housing agency may contract with any other entity to 
perform any of the management functions for public housing owned or 
operated by the public housing agency.

SEC. 232. HOUSING QUALITY REQUIREMENTS.

  (a) In General.--Each public housing agency that receives grant 
amounts under this Act shall maintain its public housing in a condition 
that complies--
          (1) in the case of public housing located in a jurisdiction 
        which has in effect laws, regulations, standards, or codes 
        regarding habitability of residential dwellings, with such 
        applicable laws, regulations, standards, or codes; or
          (2) in the case of public housing located in a jurisdiction 
        which does not have in effect laws, regulations, standards, or 
        codes described in paragraph (1), with the housing quality 
        standards established under subsection (b).
  (b) Federal Housing Quality Standards.--The Secretary shall establish 
housing quality standards under this subsection that ensure that public 
housing dwelling units are safe, clean, and healthy. Such standards 
shall include requirements relating to habitability, including 
maintenance, health and sanitation factors, condition, and construction 
of dwellings, and shall, to the greatest extent practicable, be 
consistent with the standards established under section 328(c). The 
Secretary shall differentiate between major and minor violations of 
such standards.
  (c) Determinations.--Each public housing agency providing housing 
assistance shall identify, in the local housing management plan of the 
agency, whether the agency is utilizing the standard under paragraph 
(1) or (2) of subsection (a).
  (d) Annual Inspections.--Each public housing agency that owns or 
operates public housing shall make an annual inspection of each public 
housing development to determine whether units in the development are 
maintained in accordance with the requirements under subsection (a). 
The agency shall retain the results of such inspections and, upon the 
request of the Secretary, the Inspector General for the Department of 
Housing and Urban Development, or any auditor conducting an audit under 
section 541, shall make such results available.

SEC. 233. EMPLOYMENT OF RESIDENTS.

  Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 
1701u) is amended--
          (1) in subsection (c)(1)--
                  (A) in subparagraph (A)--
                          (i) by striking ``public and Indian housing 
                        agencies'' and inserting ``public housing 
                        agencies and recipients of grants under the 
                        Native American Housing Assistance and Self-
                        Determination Act of 1996''; and
                          (ii) by striking ``development assistance'' 
                        and all that follows through the end and 
                        inserting ``assistance provided under title II 
                        of the Housing Opportunity and Responsibility 
                        Act of 1997 and used for the housing 
                        production, operation, or capital needs.''; and
                  (B) in subparagraph (B)(ii), by striking ``managed by 
                the public or Indian housing agency'' and inserting 
                ``assisted by the public housing agency or the 
                recipient of a grant under the Native American Housing 
                Assistance and Self-Determination Act of 1996''; and
          (2) in subsection (d)(1)--
                  (A) in subparagraph (A)--
                          (i) by striking ``public and Indian housing 
                        agencies'' and inserting ``public housing 
                        agencies and recipients of grants under the 
                        Native American Housing Assistance and Self-
                        Determination Act of 1996''; and
                          (ii) by striking ``development assistance'' 
                        and all that follows through ``section 14 of 
                        that Act'' and inserting ``assistance provided 
                        under title II of the Housing Opportunity and 
                        Responsibility Act of 1997 and used for the 
                        housing production, operation, or capital 
                        needs''; and
                  (B) in subparagraph (B)(ii), by striking ``operated 
                by the public or Indian housing agency'' and inserting 
                ``assisted by the public housing agency or the 
                recipient of a grant under the Native American Housing 
                Assistance and Self-Determination Act of 1996''.

SEC. 234. RESIDENT COUNCILS AND RESIDENT MANAGEMENT CORPORATIONS.

  (a) Resident Councils.--The residents of a public housing development 
may establish a resident council for the development for purposes of 
consideration of issues relating to residents, representation of 
resident interests, and coordination and consultation with a public 
housing agency. A resident council shall be an organization or 
association that--
          (1) is nonprofit in character;
          (2) is representative of the residents of the eligible 
        housing;
          (3) adopts written procedures providing for the election of 
        officers on a regular basis; and
          (4) has a democratically elected governing board, which is 
        elected by the residents of the eligible housing on a regular 
        basis.
  (b) Resident Management Corporations.--
          (1) Establishment.--The residents of a public housing 
        development may establish a resident management corporation for 
        the purpose of assuming the responsibility for the management 
        of the development under section 235 or purchasing a 
        development.
          (2) Requirements.--A resident management corporation shall be 
        a corporation that--
                  (A) is nonprofit in character;
                  (B) is organized under the laws of the State in which 
                the development is located;
                  (C) has as its sole voting members the residents of 
                the development; and
                  (D) is established by the resident council for the 
                development or, if there is not a resident council, by 
                a majority of the households of the development.

SEC. 235. MANAGEMENT BY RESIDENT MANAGEMENT CORPORATION.

  (a) Authority.--A public housing agency may enter into a contract 
under this section with a resident management corporation to provide 
for the management of public housing developments by the corporation.
  (b) Contract.--A contract under this section for management of public 
housing developments by a resident management corporation shall 
establish the respective management rights and responsibilities of the 
corporation and the public housing agency. The contract shall be 
consistent with the requirements of this Act applicable to public 
housing development and may include specific terms governing management 
personnel and compensation, access to public housing records, 
submission of and adherence to budgets, rent collection procedures, 
resident income verification, resident eligibility determinations, 
resident eviction, the acquisition of supplies and materials and such 
other matters as may be appropriate. The contract shall be treated as a 
contracting out of services.
  (c) Bonding and Insurance.--Before assuming any management 
responsibility for a public housing development, the resident 
management corporation shall provide fidelity bonding and insurance, or 
equivalent protection. Such bonding and insurance, or its equivalent, 
shall be adequate to protect the Secretary and the public housing 
agency against loss, theft, embezzlement, or fraudulent acts on the 
part of the resident management corporation or its employees.
  (d) Block Grant Assistance and Income.--A contract under this section 
shall provide for--
          (1) the public housing agency to provide a portion of the 
        block grant assistance under this title to the resident 
        management corporation for purposes of operating the public 
        housing development covered by the contract and performing such 
        other eligible activities with respect to the development as 
        may be provided under the contract;
          (2) the amount of income expected to be derived from the 
        development itself (from sources such as rents and charges);
          (3) the amount of income to be provided to the development 
        from the other sources of income of the public housing agency 
        (such as interest income, administrative fees, and rents); and
          (4) any income generated by a resident management corporation 
        of a public housing development that exceeds the income 
        estimated under the contract shall be used for eligible 
        activities under section 203(a).
  (e) Calculation of Total Income.--
          (1) Maintenance of support.--Subject to paragraph (2), the 
        amount of assistance provided by a public housing agency to a 
        public housing development managed by a resident management 
        corporation may not be reduced during the 3-year period 
        beginning on the date on which the resident management 
        corporation is first established for the development.
          (2) Reductions and increases in support.--If the total income 
        of a public housing agency is reduced or increased, the income 
        provided by the public housing agency to a public housing 
        development managed by a resident management corporation shall 
        be reduced or increased in proportion to the reduction or 
        increase in the total income of the agency, except that any 
        reduction in block grant amounts under this title to the agency 
        that occurs as a result of fraud, waste, or mismanagement by 
        the agency shall not affect the amount provided to the resident 
        management corporation.

SEC. 236. TRANSFER OF MANAGEMENT OF CERTAIN HOUSING TO INDEPENDENT 
                    MANAGER AT REQUEST OF RESIDENTS.

  (a) Authority.--The Secretary may transfer the responsibility and 
authority for management of specified housing (as such term is defined 
in subsection (h)) from a public housing agency to an eligible 
management entity, in accordance with the requirements of this section, 
if--
          (1) such housing is owned or operated by a public housing 
        agency that is designated as a troubled agency under section 
        533(a); and
          (2) the Secretary determines that--
                  (A) such housing has deferred maintenance, physical 
                deterioration, or obsolescence of major systems and 
                other deficiencies in the physical plant of the 
                project;
                  (B) such housing is occupied predominantly by 
                families with children who are in a severe state of 
                distress, characterized by such factors as high rates 
                of unemployment, teenage pregnancy, single-parent 
                households, long-term dependency on public assistance 
                and minimal educational achievement;
                  (C) such housing is located in an area such that the 
                housing is subject to recurrent vandalism and criminal 
                activity (including drug-related criminal activity); 
                and
                  (D) the residents can demonstrate that the elements 
                of distress for such housing specified in subparagraphs 
                (A) through (C) can be remedied by an entity that has a 
                demonstrated capacity to manage, with reasonable 
                expenses for modernization.
Such a transfer may be made only as provided in this section, pursuant 
to the approval by the Secretary of a request for the transfer made by 
a majority vote of the residents for the specified housing, after 
consultation with the public housing agency for the specified housing.
  (b) Block Grant Assistance.--Pursuant to a contract under subsection 
(c), the Secretary shall require the public housing agency for 
specified housing to provide to the manager for the housing, from any 
block grant amounts under this title for the agency, fair and 
reasonable amounts for operating costs for the housing. The amount made 
available under this subsection to a manager shall be determined by the 
Secretary based on the share for the specified housing of the total 
block grant amounts for the public housing agency transferring the 
housing, taking into consideration the operating and capital 
improvement needs of the specified housing, the operating and capital 
improvement needs of the remaining public housing units managed by the 
public housing agency, and the local housing management plan of such 
agency.
  (c) Contract Between Secretary and Manager.--
          (1) Requirements.--Pursuant to the approval of a request 
        under this section for transfer of the management of specified 
        housing, the Secretary shall enter into a contract with the 
        eligible management entity.
          (2) Terms.-- A contract under this subsection shall contain 
        provisions establishing the rights and responsibilities of the 
        manager with respect to the specified housing and the Secretary 
        and shall be consistent with the requirements of this Act 
        applicable to public housing developments.
  (d) Compliance With Local Housing Management Plan.--A manager of 
specified housing under this section shall comply with the approved 
local housing management plan applicable to the housing and shall 
submit such information to the public housing agency from which 
management was transferred as may be necessary for such agency to 
prepare and update its local housing management plan.
  (e) Demolition and Disposition by Manager.--A manager under this 
section may demolish or dispose of specified housing only if, and in 
the manner, provided for in the local housing management plan for the 
agency transferring management of the housing.
  (f) Limitation on PHA Liability.--A public housing agency that is not 
a manager for specified housing shall not be liable for any act or 
failure to act by a manager or resident council for the specified 
housing.
  (g) Treatment of Manager.--To the extent not inconsistent with this 
section and to the extent the Secretary determines not inconsistent 
with the purposes of this Act, a manager of specified housing under 
this section shall be considered to be a public housing agency for 
purposes of this title.
  (h) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Eligible management entity.--The term ``eligible 
        management entity'' means, with respect to any public housing 
        development, any of the following entities:
                  (A) Nonprofit organization.--A public or private 
                nonprofit organization, which shall--
                          (i) include a resident management corporation 
                        or resident management organization and, as 
                        determined by the Secretary, a public or 
                        private nonprofit organization sponsored by the 
                        public housing agency that owns the 
                        development; and
                          (ii) not include the public housing agency 
                        that owns the development.
                  (B) For-profit entity.--A for-profit entity that has 
                demonstrated experience in providing low-income 
                housing.
                  (C) State or local government.--A State or local 
                government, including an agency or instrumentality 
                thereof.
                  (D) Public housing agency.--A public housing agency 
                (other than the public housing agency that owns the 
                development).
        The term does not include a resident council.
          (2) Manager.--The term ``manager'' means any eligible 
        management entity that has entered into a contract under this 
        section with the Secretary for the management of specified 
        housing.
          (3) Nonprofit.--The term ``nonprofit'' means, with respect to 
        an organization, association, corporation, or other entity, 
        that no part of the net earnings of the entity inures to the 
        benefit of any member, founder, contributor, or individual.
          (4) Private nonprofit organization.--The term ``private 
        nonprofit organization'' means any private organization 
        (including a State or locally chartered organization) that--
                  (A) is incorporated under State or local law;
                  (B) is nonprofit in character;
                  (C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                  (D) has among its purposes significant activities 
                related to the provision of decent housing that is 
                affordable to low-income families.
          (5) Public housing agency.--The term ``public housing 
        agency'' has the meaning given such term in section 103(a).
          (6) Public nonprofit organization.--The term ``public 
        nonprofit organization'' means any public entity that is 
        nonprofit in character.
          (7) Specified housing.--The term ``specified housing'' means 
        a public housing development or developments, or a portion of a 
        development or developments, for which the transfer of 
        management is requested under this section. The term includes 
        one or more contiguous buildings and an area of contiguous row 
        houses, but in the case of a single building, the building 
        shall be sufficiently separable from the remainder of the 
        development of which it is part to make transfer of the 
        management of the building feasible for purposes of this 
        section.

SEC. 237. RESIDENT OPPORTUNITY PROGRAM.

  (a) Purpose.--The purpose of this section is to encourage increased 
resident management of public housing developments, as a means of 
improving existing living conditions in public housing developments, by 
providing increased flexibility for public housing developments that 
are managed by residents by--
          (1) permitting the retention, and use for certain purposes, 
        of any revenues exceeding operating and project costs; and
          (2) providing funding, from amounts otherwise available, for 
        technical assistance to promote formation and development of 
        resident management entities.
For purposes of this section, the term ``public housing development'' 
includes one or more contiguous buildings or an area of contiguous row 
houses the elected resident councils of which approve the establishment 
of a resident management corporation and otherwise meet the 
requirements of this section.
  (b) Program Requirements.--
          (1) Resident council.--As a condition of entering into a 
        resident opportunity program, the elected resident council of a 
        public housing development shall approve the establishment of a 
        resident management corporation that complies with the 
        requirements of section 234(b)(2). When such approval is made 
        by the elected resident council of a building or row house 
        area, the resident opportunity program shall not interfere with 
        the rights of other families residing in the development or 
        harm the efficient operation of the development. The resident 
        management corporation and the resident council may be the same 
        organization, if the organization complies with the 
        requirements applicable to both the corporation and council.
          (2) Public housing management specialist.--The resident 
        council of a public housing development, in cooperation with 
        the public housing agency, shall select a qualified public 
        housing management specialist to assist in determining the 
        feasibility of, and to help establish, a resident management 
        corporation and to provide training and other duties agreed to 
        in the daily operations of the development.
          (3) Management responsibilities.--A resident management 
        corporation that qualifies under this section, and that 
        supplies insurance and bonding or equivalent protection 
        sufficient to the Secretary and the public housing agency, 
        shall enter into a contract with the agency establishing the 
        respective management rights and responsibilities of the 
        corporation and the agency. The contract shall be treated as a 
        contracting out of services and shall be subject to the 
        requirements under section 235 for such contracts.
          (4) Annual audit.--The books and records of a resident 
        management corporation operating a public housing development 
        shall be audited annually by a certified public accountant. A 
        written report of each such audit shall be forwarded to the 
        public housing agency and the Secretary.
  (c) Comprehensive Improvement Assistance.--Public housing 
developments managed by resident management corporations may be 
provided with modernization assistance from grant amounts under this 
title for purposes of renovating such developments. If such renovation 
activities (including the planning and architectural design of the 
rehabilitation) are administered by a resident management corporation, 
the public housing agency involved may not retain, for any 
administrative or other reason, any portion of the assistance provided 
pursuant to this subsection unless otherwise provided by contract.
  (d) Waiver of Federal Requirements.--
          (1) Waiver of regulatory requirements.--Upon the request of 
        any resident management corporation and public housing agency, 
        and after notice and an opportunity to comment is afforded to 
        the affected residents, the Secretary may waive (for both the 
        resident management corporation and the public housing agency) 
        any requirement established by the Secretary (and not specified 
        in any statute) that the Secretary determines to unnecessarily 
        increase the costs or restrict the income of a public housing 
        development.
          (2) Waiver to permit employment.--Upon the request of any 
        resident management corporation, the Secretary may, subject to 
        applicable collective bargaining agreements, permit residents 
        of such development to volunteer a portion of their labor.
          (3) Exceptions.--The Secretary may not waive under this 
        subsection any requirement with respect to income eligibility 
        for purposes of section 222, family rental payments under 
        section 225, tenant or applicant protections, employee 
        organizing rights, or rights of employees under collective 
        bargaining agreements.
  (e) Operating Assistance and Development Income.--
          (1) Calculation of operating subsidy.--The grant amounts 
        received under this title by a public housing agency used for 
        operating fund activities under section 203(a)(2) that are 
        allocated to a public housing development managed by a resident 
        management corporation shall not be less than per unit monthly 
        amount of such assistance used by the public housing agency in 
        the previous year, as determined on an individual development 
        basis.
          (2) Contract requirements.--Any contract for management of a 
        public housing development entered into by a public housing 
        agency and a resident management corporation shall specify the 
        amount of income expected to be derived from the development 
        itself (from sources such as rents and charges) and the amount 
        of income funds to be provided to the development from the 
        other sources of income of the agency (such as assistance for 
        operating activities under section 203(a)(2), interest income, 
        administrative fees, and rents).
  (f) Resident Management Technical Assistance and Training.--
          (1) Financial assistance.--To the extent budget authority is 
        available under this title, the Secretary shall provide 
        financial assistance to resident management corporations or 
        resident councils that obtain, by contract or otherwise, 
        technical assistance for the development of resident management 
        entities, including the formation of such entities, the 
        development of the management capability of newly formed or 
        existing entities, the identification of the social support 
        needs of residents of public housing developments, and the 
        securing of such support. In addition, the Secretary may 
        provide financial assistance to resident management 
        corporations or resident councils for activities sponsoredby 
resident organizations for economic uplift, such as job training, 
economic development, security, and other self-sufficiency activities 
beyond those related to the management of public housing. The Secretary 
may require resident councils or resident management corporations to 
utilize public housing agencies or other qualified organizations as 
contract administrators with respect to financial assistance provided 
under this paragraph.
          (2) Limitation on assistance.--The financial assistance 
        provided under this subsection with respect to any public 
        housing development may not exceed $100,000.
          (3) Prohibition.--A resident management corporation or 
        resident council may not, before the award to the corporation 
        or council of a grant amount under this subsection, enter into 
        any contract or other agreement with any entity to provide such 
        entity with amounts from the grant for providing technical 
        assistance or carrying out other activities eligible for 
        assistance with amounts under this subsection. Any such 
        agreement entered into in violation of this paragraph shall be 
        void and unenforceable.
          (4) Funding.--Of any amounts made available for financial 
        assistance under this title, the Secretary may use to carry out 
        this subsection $15,000,000 for fiscal year 1998.
          (5) Limitation regarding assistance under hope grant 
        program.--The Secretary may not provide financial assistance 
        under this subsection to any resident management corporation or 
        resident council with respect to which assistance for the 
        development or formation of such entity is provided under title 
        III of the United States Housing Act of 1937 (as in effect 
        before the effective date of the repeal under section 601(b) of 
        this Act).
          (6) Technical assistance and clearinghouse.--The Secretary 
        may use up to 10 percent of the amount made available pursuant 
        to paragraph (4)--
                  (A) to provide technical assistance, directly or by 
                grant or contract, and
                  (B) to receive, collect, process, assemble, and 
                disseminate information,
        in connection with activities under this subsection.
  (g) Assessment and Report by Secretary.--Not later than 3 years after 
the date of the enactment of this Act, the Secretary shall--
          (1) conduct an evaluation and assessment of resident 
        management, and particularly of the effect of resident 
        management on living conditions in public housing; and
          (2) submit to the Congress a report setting forth the 
        findings of the Secretary as a result of the evaluation and 
        assessment and including any recommendations the Secretary 
        determines to be appropriate.
  (h) Applicability.--Any management contract between a public housing 
agency and a resident management corporation that is entered into after 
the date of the enactment of the Stewart B. McKinney Homeless 
Assistance Amendments Act of 1988 shall be subject to this section and 
any regulations issued to carry out this section.

                       Subtitle D--Homeownership

SEC. 251. RESIDENT HOMEOWNERSHIP PROGRAMS.

  (a) In General.--A public housing agency may carry out a 
homeownership program in accordance with this section and the local 
housing management plan of the agency to make public housing dwelling 
units, public housing developments, and other housing projects 
available for purchase by low-income families. An agency may transfer a 
unit only pursuant to a homeownership program approved by the 
Secretary. Notwithstanding section 107, the Secretary may approve a 
local housing management plan without approving the portion of the plan 
regarding a homeownership program pursuant to this section. In the case 
of the portion of a plan regarding the homeownership program that is 
submitted separately pursuant to the preceding sentence, the Secretary 
shall approve or disapprove such portion not later than 60 days after 
the submission of such portion.
  (b) Participating Units.--A program under this section may cover any 
existing public housing dwelling units or projects, and may include 
other dwelling units and housing owned, operated, or assisted, or 
otherwise acquired for use under such program, by the public housing 
agency.
  (c) Eligible Purchasers.--
          (1) Low-income requirement.--Only low-income families 
        assisted by a public housing agency, other low-income families, 
        and entities formed to facilitate such sales by purchasing 
        units for resale to low-income families shall be eligible to 
        purchase housing under a homeownership program under this 
        section.
          (2) Other requirements.--A public housing agency may 
        establish other requirements or limitations for families to 
        purchase housing under a homeownership program under this 
        section, including requirements or limitations regarding 
        employment or participation in employment counseling or 
        training activities, criminal activity, participation in 
        homeownership counseling programs, evidence of regular income, 
        and other requirements. In the case of purchase by an entity 
        for resale to low-income families, the entity shall sell the 
        units to low-income families within 5 years from the date of 
        its acquisition of the units. The entity shall use any net 
        proceeds from the resale and from managing the units, as 
        determined in accordance with guidelines of the Secretary, for 
        housing purposes, such as funding resident organizations and 
        reserves for capital replacements.
  (d) Financing and Assistance.--A homeownership program under this 
section may provide financing for acquisition of housing by families 
purchasing under the program or by the public housing agency for sale 
under this program in any manner considered appropriate by the agency 
(including sale to a resident management corporation).
  (e) Downpayment Requirement.--
          (1) In general.--Each family purchasing housing under a 
        homeownership program under this section shall be required to 
        provide from its own resources a downpayment in connection with 
        any loan for acquisition of the housing, in an amount 
        determined by the public housing agency. Except as provided in 
        paragraph (2), the agency shall permit the family to use grant 
        amounts, gifts from relatives, contributions from private 
        sources, and similar amounts as downpayment amounts in such 
        purchase,
          (2) Direct family contribution.--In purchasing housing 
        pursuant to this section, each family shall contribute an 
        amount of the downpayment, from resources of the family other 
        than grants, gifts, contributions, or other similar amounts 
        referred to in paragraph (1), that is not less than 1 percent 
        of the purchase price.
  (f) Ownership Interests.--A homeownership program under this section 
may provide for sale to the purchasing family of any ownership interest 
that the public housing agency considers appropriate under the program, 
including ownership in fee simple, a condominium interest, an interest 
in a limited dividend cooperative, a shared appreciation interest with 
a public housing agency providing financing.
  (g) Resale.--
          (1) Authority and limitation.--A homeownership program under 
        this section shall permit the resale of a dwelling unit 
        purchased under the program by an eligible family, but shall 
        provide such limitations on resale as the agency considers 
        appropriate (whether the family purchases directly from the 
        agency or from another entity) for the agency to recapture--
                  (A) from any economic gain derived from any such 
                resale occurring during the 5-year period beginning 
                upon purchase of the dwelling unit by the eligible 
                family, a portion of the amount of any financial 
                assistance provided under the program by the agency to 
                the eligible family; and
                  (B) after the expiration of such 5-year period, only 
                such amounts as are equivalent to the assistance 
                provided under this section by the agency to the 
                purchaser.
          (2) Considerations.--The limitations referred to in paragraph 
        (1) may provide for consideration of the aggregate amount of 
        assistance provided under the program to the family, the 
        contribution to equity provided by the purchasing eligible 
        family, the period of time elapsed between purchase under the 
        homeownership program and resale, the reason for resale, any 
        improvements to the property made by the eligible family, any 
        appreciation in the value of the property, and any other 
        factors that the agency considers appropriate.
  (h) Sale of Certain Scattered-Site Housing.--A public housing agency 
that the Secretary has determined to be a high-performing agency may 
use the proceeds from the disposition of scattered-site public housing 
under a homeownership program under this section to purchase 
replacement scattered-site dwelling units, to the extent such use is 
provided for in the local housing management plan for the agency 
approved under section 107. Any such replacement dwelling units shall 
be considered public housing for purposes of this Act.
  (i) Inapplicability of Disposition Requirements.--The provisions of 
section 261 shall not apply to disposition of public housing dwelling 
units under a homeownership program under this section, except that any 
dwelling units sold undersuch a program shall be treated as public 
housing dwelling units for purposes of subsections (e) and (f) of 
section 261.

Subtitle E--Disposition, Demolition, and Revitalization of Developments

SEC. 261. REQUIREMENTS FOR DEMOLITION AND DISPOSITION OF DEVELOPMENTS.

  (a) Authority and Flexibility.--A public housing agency may demolish, 
dispose of, or demolish and dispose of nonviable or nonmarketable 
public housing developments of the agency in accordance with this 
section.
  (b) Local Housing Management Plan Requirement.--A public housing 
agency may take any action to demolish or dispose of a public housing 
development (or a portion of a development) only if such demolition or 
disposition complies with the provisions of this section and is in 
accordance with the local housing management plan for the agency. 
Notwithstanding section 107, the Secretary may approve a local housing 
management plan without approving the portion of the plan covering 
demolition or disposition pursuant to this section.
  (c) Purpose of Demolition or Disposition.--A public housing agency 
may demolish or dispose of a public housing development (or portion of 
a development) only if the agency provides sufficient evidence to the 
Secretary that--
          (1) the development (or portion thereof) is severely 
        distressed or obsolete;
          (2) the development (or portion thereof) is in a location 
        making it unsuitable for housing purposes;
          (3) the development (or portion thereof) has design or 
        construction deficiencies that make cost-effective 
        rehabilitation infeasible;
          (4) assuming that reasonable rehabilitation and management 
        intervention for the development has been completed and paid 
        for, the anticipated revenue that would be derived from 
        charging market-based rents for units in the development (or 
        portion thereof) would not cover the anticipated operating 
        costs and replacement reserves of the development (or portion) 
        at full occupancy and the development (or portion) would 
        constitute a substantial burden on the resources of the public 
        housing agency;
          (5) retention of the development (or portion thereof) is not 
        in the best interests of the residents of the public housing 
        agency because--
                  (A) developmental changes in the area surrounding the 
                development adversely affect the health or safety of 
                the residents or the feasible operation of the 
                development by the public housing agency;
                  (B) demolition or disposition will allow the 
                acquisition, development, or rehabilitation of other 
                properties which will be more efficiently or 
                effectively operated as low-income housing; or
                  (C) other factors exist that the agency determines 
                are consistent with the best interests of the residents 
                and the agency and not inconsistent with other 
                provisions of this Act;
          (6) in the case only of demolition or disposition of a 
        portion of a development, the demolition or disposition will 
        help to ensure the remaining useful life of the remainder of 
        the development; or
          (7) in the case only of property other than dwelling units--
                  (A) the property is excess to the needs of a 
                development; or
                  (B) the demolition or disposition is incidental to, 
                or does not interfere with, continued operation of a 
                development.
The evidence required under this subsection shall include, as a 
condition of demolishing or disposing of a public housing development 
(or portion of a development) estimated to have a value of $100,000 or 
more, a statement of the market value of the development (or portion), 
which has been determined by a party not having any interest in the 
housing or the public housing agency and pursuant to not less than 2 
professional, independent appraisals of the development (or portion).
  (d) Consultation.--A public housing agency may demolish or dispose of 
a public housing development (or portion of a development) only if the 
agency notifies and confers regarding the demolition or disposition 
with--
          (1) the residents of the development (or portion); and
          (2) appropriate local government officials.
  (e) Counseling.--A public housing agency may demolish or dispose of a 
public housing development (or a portion of a development) only if the 
agency provides any necessary counseling for families displaced by such 
action to facilitate relocation.
  (f) Use of Proceeds.--Any net proceeds from the disposition of a 
public housing development (or portion of a development) shall be used 
for--
          (1) housing assistance for low-income families that is 
        consistent with the low-income housing needs of the community, 
        through acquisition, development, or rehabilitation of, or 
        homeownership programs for, other low-income housing or the 
        provision of choice-based assistance under title III for such 
        families;
          (2) supportive services relating to job training or child 
        care for residents of a development or developments; or
          (3) leveraging amounts for securing commercial enterprises, 
        on-site in public housing developments of the public housing 
        agency, appropriate to serve the needs of the residents.
  (g) Relocation.--A public housing agency that demolishes or disposes 
of a public housing development (or portion of a development thereof) 
shall ensure that--
          (1) each family that is a resident of the development (or 
        portion) that is demolished or disposed of is relocated to 
        other safe, clean, healthy, and affordable housing, which is, 
        to the maximum extent practicable, housing of the family's 
        choice, including choice-based assistance under title III 
        (provided that with respect to choice-based assistance, the 
        preceding requirement shall be fulfilled only upon the 
        relocation of the such family into such housing);
          (2) the public housing agency does not take any action to 
        dispose of any unit until any resident to be displaced is 
        relocated in accordance with paragraph (1); and
          (3) each resident family to be displaced is paid relocation 
        expenses, and the rent to be paid initially by the resident 
        following relocation does not exceed the amount permitted under 
        section 225(a).
  (h) Right of First Refusal for Resident Organizations and Resident 
Management Corporations.--
          (1) In general.--A public housing agency may not dispose of a 
        public housing development (or portion of a development) unless 
        the agency has, before such disposition, offered to sell the 
        property, as provided in this subsection, to each resident 
        organization and resident management corporation operating at 
        the development for continued use as low-income housing, and no 
        such organization or corporation purchases the property 
        pursuant to such offer. A resident organization may act, for 
        purposes of this subsection, through an entity formed to 
        facilitate homeownership under subtitle D.
          (2) Timing.--Disposition of a development (or portion 
        thereof) under this section may not take place--
                  (A) before the expiration of the period during which 
                any such organization or corporation may notify the 
                agency of interest in purchasing the property, which 
                shall be the 30-day period beginning on the date that 
                the agency first provides notice of the proposed 
                disposition of the property to such resident 
                organizations and resident management corporations;
                  (B) if an organization or corporation submits notice 
                of interest in accordance with subparagraph (A), before 
                the expiration of the period during which such 
                organization or corporation may obtain a commitment for 
                financing to purchase the property, which shall be the 
                60-day period beginning upon the submission to the 
                agency of the notice of interest; or
                  (C) if, during the period under subparagraph (B), an 
                organization or corporation obtains such financing 
                commitment and makes a bona fide offer to the agency to 
                purchase the property for a price equal to or exceeding 
                the applicable offer price under paragraph (3).
        The agency shall sell the property pursuant to any purchase 
        offer described in subparagraph (C).
          (3) Terms of offer.--An offer by a public housing agency to 
        sell a property in accordance with this subsection shall 
        involve a purchase price that reflects the market value of the 
        property, the reason for the sale, the impact of the sale on 
        the surrounding community, and any other factors that the 
        agency considers appropriate.
  (i) Information for Local Housing Management Plan.--A public housing 
agency may demolish or dispose of a public housing development (or 
portion thereof) only if it includes in the applicable local housing 
management plan information sufficient to describe--
          (1) the housing to be demolished or disposed of;
          (2) the purpose of the demolition or disposition under 
        subsection (c) and why the demolition or disposition complies 
        with the requirements under subsection (c), and includes 
        evidence of the market value of the development (or portion) 
        required under subsection (c);
          (3) how the consultations required under subsection (d) will 
        be made;
          (4) how the net proceeds of the disposition will be used in 
        accordance with subsection (f);
          (5) how the agency will relocate residents, if necessary, as 
        required under subsection (g); and
          (6) that the agency has offered the property for acquisition 
        by resident organizations and resident management corporations 
        in accordance with subsection (h).
  (j) Site and Neighborhood Standards Exemption.--Notwithstanding any 
other provision of law, a public housing agency may provide for 
development of public housing dwelling units on the same site or in the 
same neighborhood as any dwelling units demolished, pursuant to a plan 
under this section, but only if such development provides for 
significantly fewer dwelling units.
  (k) Treatment of Replacement Units.--
          (1) Provision of other housing assistance.--In connection 
        with any demolition or disposition of public housing under this 
        section, a public housing agency may provide for other housing 
        assistance for low-income families that is consistent with the 
        low-income housing needs of the community, including--
                  (A) the provision of choice-based assistance under 
                title III; and
                  (B) the development, acquisition, or lease by the 
                agency of dwelling units, which dwelling units shall--
                          (i) be eligible to receive assistance with 
                        grant amounts provided under this title; and
                          (ii) be made available for occupancy, 
                        operated, and managed in the manner required 
                        for public housing, and subject to the other 
                        requirements applicable to public housing 
                        dwelling units.
          (2) Treatment of Individuals.--For purposes of this 
        subsection, an individual between the ages of 18 and 21, 
        inclusive, shall, at the discretion of the individual, be 
        considered a family.
  (l) Use of New Dwelling Units.--A public housing agency demolishing 
or disposing of a public housing development (or portion thereof) under 
this section shall seek, where practical, to ensure that, if housing 
units are provided on any property that was previously used for the 
public housing demolished or disposed of, not less than 25 percent of 
such dwelling units shall be dwelling units reserved for occupancy 
during the remaining useful life of the housing by low-income families.
  (m) Permissible Relocation Without Plan.--If a public housing agency 
determines that because of an emergency situation public housing 
dwelling units are severely uninhabitable, the public housing agency 
may relocate residents of such dwelling units before the submission of 
a local housing management plan providing for demolition or disposition 
of such units.
  (n) Consolidation of Occupancy Within or Among Buildings.--Nothing in 
this section may be construed to prevent a public housing agency from 
consolidating occupancy within or among buildings of a public housing 
development, or among developments, or with other housing for the 
purpose of improving living conditions of, or providing more efficient 
services to, residents.
  (o) De Minimis Exception to Demolition Requirements.--Notwithstanding 
any other provision of this section, in any 5-year period a public 
housing agency may demolish not more than the lesser of 5 dwelling 
units or 5 percent of the total dwelling units owned and operated by 
the public housing agency, without providing for such demolition in a 
local housing management plan, but only if the space occupied by the 
demolished unit is used for meeting the service or other needs of 
public housing residents or the demolished unit was beyond repair.

SEC. 262. DEMOLITION, SITE REVITALIZATION, REPLACEMENT HOUSING, AND 
                    CHOICE-BASED ASSISTANCE GRANTS FOR DEVELOPMENTS.

  (a) Purposes.--The purpose of this section is to provide assistance 
to public housing agencies for the purposes of--
          (1) reducing the density and improving the living environment 
        for public housing residents of severely distressed public 
        housing developments through the demolition of obsolete public 
        housing developments (or portions thereof);
          (2) revitalizing sites (including remaining public housing 
        dwelling units) on which such public housing developments are 
        located and contributing to the improvement of the surrounding 
        neighborhood; and
          (3) providing housing that will avoid or decrease the 
        concentration of very low-income families; and
          (4) providing choice-based assistance in accordance with 
        title III for the purpose of providing replacement housing and 
        assisting residents to be displaced by the demolition.
  (b) Grant Authority.--The Secretary may make grants available to 
public housing agencies as provided in this section.
  (c) Contribution Requirement.--The Secretary may not make any grant 
under this section to any applicant unless the applicant certifies to 
the Secretary that the applicant will supplement the amount of 
assistance provided under this section with an amount of funds from 
sources other than this section equal to not less than 5 percent of the 
amount provided under this section, including amounts from other 
Federal sources, any State or local government sources, any private 
contributions, and the value of any in-kind services or administrative 
costs provided.
  (d) Eligible Activities.--Grants under this section may be used for 
activities to carry out revitalization programs for severely distressed 
public housing, including--
          (1) architectural and engineering work, including the 
        redesign, reconstruction, or redevelopment of a severely 
        distressed public housing development, including the site on 
        which the development is located;
          (2) the demolition, sale, or lease of the site, in whole or 
        in part;
          (3) covering the administrative costs of the applicant, which 
        may not exceed such portion of the assistance provided under 
        this section as the Secretary may prescribe;
          (4) payment of reasonable legal fees;
          (5) providing reasonable moving expenses for residents 
        displaced as a result of the revitalization of the development;
          (6) economic development activities that promote the economic 
        self-sufficiency of residents under the revitalization program;
          (7) necessary management improvements;
          (8) leveraging other resources, including additional housing 
        resources, retail supportive services, jobs, and other economic 
        development uses on or near the development that will benefit 
        future residents of the site;
          (9) replacement housing and housing assistance under title 
        III;
          (10) transitional security activities; and
          (11) necessary supportive services, except that not more than 
        10 percent of the amount of any grant may be used for 
        activities under this paragraph.
  (e) Application and Selection.--
          (1) Application.--An application for a grant under this 
        section shall contain such information and shall be submitted 
        at such time and in accordance with such procedures, as the 
        Secretary shall prescribe.
          (2) Selection criteria.--The Secretary shall establish 
        selection criteria for the award of grants under this section, 
        which shall include--
                  (A) the relationship of the grant to the local 
                housing management plan for the public housing agency 
                and how the grant will result in a revitalized site 
                that will enhance the neighborhood in which the 
                development is located;
                  (B) the capability and record of the applicant public 
                housing agency, or any alternative management agency 
                for the agency, for managing large-scale redevelopment 
                or modernization projects, meeting construction 
                timetables, and obligating amounts in a timely manner;
                  (C) the extent to which the public housing agency 
                could undertake such activities without a grant under 
                this section;
                  (D) the extent of involvement of residents, State and 
                local governments, private service providers, financing 
                entities, and developers, in the development of a 
                revitalization program for the development; and
                  (E) the amount of funds and other resources to be 
                leveraged by the grant.
        The Secretary shall give preference in selection to any public 
        housing agency that has been awarded a planning grant under 
        section 24(c) of the United States Housing Act of 1937 (as in 
        effect before the effective date of the repeal under section 
        601(b) of this Act).
  (f) Cost Limits.--Subject to the provisions of this section, the 
Secretary--
          (1) shall establish cost limits on eligible activities under 
        this section sufficient to provide for effective revitalization 
        programs; and
          (2) may establish other cost limits on eligible activities 
        under this section.
  (g) Demolition and Replacement.--Any severely distressed public 
housing demolished or disposed of pursuant to a revitalization plan and 
any public housing produced in lieu of such severely distressed 
housing, shall be subject to the provisions of section 261.
  (h) Administration by Other Entities.--The Secretary may require a 
grantee under this section to make arrangements satisfactory to the 
Secretary for use of an entity other than the public housing agency to 
carry out activities assisted under the revitalization plan, if the 
Secretary determines that such action will help to effectuate the 
purposes of this section.
  (i) Withdrawal of Funding.--If a grantee under this section does not 
proceed expeditiously, in the determination of the Secretary, the 
Secretary shall withdraw any grant amounts under this section that have 
not been obligated by the public housing agency. The Secretary shall 
redistribute any withdrawn amounts to one or more public housing 
agencies eligible for assistance under this section or to one or more 
other entities capable of proceeding expeditiously in the same locality 
in carrying out the revitalization plan of the original grantee.
  (j) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Applicant.--The term ``applicant'' means--
                  (A) any public housing agency that is not designated 
                as troubled pursuant to section 533(a);
                  (B) any public housing agency or private housing 
                management agent selected, or receiver appointed 
                pursuant, to section 545; and
                  (C) any public housing agency that is designated as 
                troubled pursuant to section 533(a) that--
                          (i) is so designated principally for reasons 
                        that will not affect the capacity of the agency 
                        to carry out a revitalization program;
                          (ii) is making substantial progress toward 
                        eliminating the deficiencies of the agency; or
                          (iii) is otherwise determined by the 
                        Secretary to be capable of carrying out a 
                        revitalization program.
          (2) Private nonprofit corporation.--The term ``private 
        nonprofit organization'' means any private nonprofit 
        organization (including a State or locally chartered nonprofit 
        organization) that--
                  (A) is incorporated under State or local law;
                  (B) has no part of its net earnings inuring to the 
                benefit of any member, founder, contributor, or 
                individual;
                  (C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                  (D) has among its purposes significant activities 
                related to the provision of decent housing that is 
                affordable to very low-income families.
          (3) Severely distressed public housing.--The term ``severely 
        distressed public housing'' means a public housing development 
        (or building in a development) that--
                  (A) requires major redesign, reconstruction or 
                redevelopment, or partial or total demolition, to 
                correct serious deficiencies in the original design 
                (including inappropriately high population density), 
                deferred maintenance, physical deterioration or 
                obsolescence of major systems and other deficiencies in 
                the physical plant of the development;
                  (B) is a significant contributing factor to the 
                physical decline of and disinvestment by public and 
                private entities in the surrounding neighborhood;
                  (C)(i) is occupied predominantly by families who are 
                very low-income families with children, are unemployed, 
                and dependent on various forms of public assistance; 
                and
                  (ii) has high rates of vandalism and criminal 
                activity (including drug-related criminal activity) in 
                comparison to other housing in the area;
                  (D) cannot be revitalized through assistance under 
                other programs, such as the public housing block grant 
                program under this title, or the programs under 
                sections 9 and 14 of the United States Housing Act of 
                1937 (as in effect before the effective date of the 
                repeal under section 601(b) of this Act), because of 
                cost constraints and inadequacy of available amounts; 
                and
                  (E) in the case of individual buildings, is, in the 
                Secretary's determination, sufficiently separable from 
                the remainder of the development of which the building 
                is part to make use of the building feasible for 
                purposes of this section.
          (4) Supportive services.--The term ``supportive services'' 
        includes all activities that will promote upward mobility, 
        self-sufficiency, and improved quality of life for the 
        residents of the public housing development involved, including 
        literacy training, job training, day care, and economic 
        development activities.
  (k) Annual Report.--The Secretary shall submit to the Congress an 
annual report setting forth--
          (1) the number, type, and cost of public housing units 
        revitalized pursuant to this section;
          (2) the status of developments identified as severely 
        distressed public housing;
          (3) the amount and type of financial assistance provided 
        under and in conjunction with this section; and
          (4) the recommendations of the Secretary for statutory and 
        regulatory improvements to the program established by this 
        section.
  (l) Funding.--
          (1) Authorization of appropriations.--There are authorized to 
        be appropriated for grants under this section $500,000,000 for 
        each of fiscal years 1998, 1999, and 2000.
          (2) Technical assistance.--Of the amount appropriated 
        pursuant to paragraph (1) for any fiscal year, the Secretary 
        may use not more than 0.50 percent for technical assistance. 
        Such assistance may be provided directly or indirectly by 
        grants, contracts, or cooperative agreements, and shall include 
        training, and the cost of necessary travel for participants in 
        such training, by or to officials of the Department of Housing 
        and Urban Development, of public housing agencies, and of 
        residents.
  (m) Sunset.--No assistance may be provided under this section after 
September 30, 2000.

SEC. 263. VOLUNTARY VOUCHER SYSTEM FOR PUBLIC HOUSING.

  (a) In General.--A public housing agency may convert any public 
housing development (or portion thereof) owned and operated by the 
agency to a system of choice-based rental housing assistance under 
title III, in accordance with this section.
  (b) Assessment and Plan Requirement.--In converting under this 
section to a choice-based rental housing assistance system, the public 
housing agency shall develop a conversion assessment and plan under 
this subsection, in consultation with the appropriate public officials 
and with significant participation by the residents of the development 
(or portion thereof), which assessment and plan shall--
          (1) be consistent with and part of the local housing 
        management plan for the agency;
          (2) describe the conversion and future use or disposition of 
        the public housing development, including an impact analysis on 
        the affected community;
          (3) include a cost analysis that demonstrates whether or not 
        the cost (both on a net present value basis and in terms of new 
        budget authority requirements) of providing choice-based rental 
        housing assistance under title III for the same families in 
        substantially similar dwellings over the same period of time is 
        less expensive than continuing public housing assistance in the 
        public housing development proposed for conversion for the 
        remaining useful life of the development;
          (4) identify the actions, if any, that the public housing 
        agency will take with regard to converting any public housing 
        development or developments (or portions thereof) of the agency 
        to a system of choice-based rental housing assistance under 
        title III;
          (5) require the public housing agency to--
                  (A) notify the families residing in the public 
                housing development subject to the conversion, in 
                accordance with any guidelines issued by the Secretary 
                governing such notifications, that--
                          (i) the development will be removed from the 
                        inventory of the public housing agency; and
                          (ii) the families displaced by such action 
                        will receive choice-based housing assistance;
                  (B) provide any necessary counseling for families 
                displaced by such action to facilitate relocation; and
                  (C) provide any reasonable relocation expenses for 
                families displaced by such action; and
          (6) ensure that each family that is a resident of the 
        development is relocated to other safe, clean, and healthy 
        affordable housing, which is, to the maximum extent 
        practicable, housing of the family's choice, including choice-
        based assistance under title III (provided that with respect to 
        choice-based assistance, the preceding requirement shall be 
        fulfilled only upon the relocation of such family into such 
        housing).
  (c) Streamlined Assessment and Plan.--At the discretion of the 
Secretary or at the request of a public housing agency, the Secretary 
may waive any or all of the requirements of subsection (b) or otherwise 
require a streamlined assessment with respect to any public housing 
development or class of public housing developments.
  (d) Implementation of Conversion Plan.--
          (1) In general.--A public housing agency may implement a 
        conversion plan only if the conversion assessment under this 
        section demonstrates that the conversion--
                  (A) will not be more expensive than continuing to 
                operate the public housing development (or portion 
                thereof) as public housing; and
                  (B) will principally benefit the residents of the 
                public housing development (or portion thereof) to be 
                converted, the public housing agency, and the 
                community.
          (2) Disapproval.--The Secretary shall disapprove a conversion 
        plan only if the plan is plainly inconsistent with the 
        conversion assessment under subsection (b) or there is reliable 
        information and data available to the Secretary that 
        contradicts that conversion assessment.
  (e) Other Requirements.--To the extent approved by the Secretary, the 
funds used by the public housing agency to provide choice-based rental 
housing assistance under title III shall be added to the housing 
assistance payment contract administered by the public housing agency 
or any entity administering the contract on behalf of the public 
housing agency.
  (f) Savings Provision.--This section does not affect any contract or 
other agreement entered into under section 22 of the United States 
Housing Act of 1937 (as such section existed before the effective date 
of the repeal under section 601(b) of this Act).

                Subtitle F--Mixed-Finance Public Housing

SEC. 271. AUTHORITY.

  Notwithstanding sections 203 and 262, the Secretary may, upon such 
terms and conditions as the Secretary may prescribe, authorize a public 
housing agency to provide for the use of grant amounts allocated and 
provided from the capital fund or from a grant under section 262, to 
produce mixed- finance housing developments, or replace or revitalize 
existing public housing dwelling units with mixed-finance housing 
developments, but only if the agency submits to the Secretary a plan 
for such housing that is approved pursuant to section 273 by the 
Secretary.

SEC. 272. MIXED-FINANCE HOUSING DEVELOPMENTS.

  (a) In General.--For purposes of this subtitle, the term ``mixed-
finance housing'' means low-income housing or mixed-income housing (as 
described in section 221(c)(2)) for which the financing for production 
or revitalization is provided, in part, from entities other than the 
public housing agency.
  (b) Production.--A mixed-finance housing development shall be 
produced or revitalized, and owned--
          (1) by a public housing agency or by an entity affiliated 
        with a public housing agency;
          (2) by a partnership, a limited liability company, or other 
        entity in which the public housing agency (or an entity 
        affiliated with a public housing agency) is a general partner, 
        is a managing member, or otherwise participates in the 
        activities of the entity;
          (3) by any entity that grants to the public housing agency 
        the option to purchase the public housing project during the 
        20-year period beginning on the date of initial occupancy of 
        the public housing project in accordance with section 42(l)(7) 
        of the Internal Revenue Code of 1986; or
          (4) in accordance with such other terms and conditions as the 
        Secretary may prescribe by regulation.
This subsection may not be construed to require production or 
revitalization, and ownership, by the same entity.

SEC. 273. MIXED-FINANCE HOUSING PLAN.

  The Secretary may approve a plan for production or revitalization of 
mixed-finance housing under this subtitle only if the Secretary 
determines that--
          (1) the public housing agency has the ability, or has 
        provided for an entity under section 272(b) that has the 
        ability, to use the amounts provided for use under the plan for 
        such housing, effectively, either directly or through contract 
        management;
          (2) the plan provides permanent financing commitments from a 
        sufficient number of sources other than the public housing 
        agency, which may include banks and other conventional lenders, 
        States, units of general local government, State housing 
        finance agencies, secondary market entities, and other 
        financial institutions;
          (3) the plan provides for use of amounts provided under 
        section 271 by the public housing agency for financing the 
        mixed-income housing in the form of grants, loans, advances, or 
        other debt or equity investments, including collateral or 
        credit enhancement of bond issued by the agency for production 
        or revitalization of the development; and
          (4) the plan complies with any other criteria that the 
        Secretary may establish.

SEC. 274. RENT LEVELS FOR HOUSING FINANCED WITH LOW-INCOME HOUSING TAX 
                    CREDIT.

  With respect to any dwelling unit in a mixed-finance housing 
development that is assisted pursuant to the low-income housing tax 
credit under section 42 of the Internal Revenue Code of 1986, the rents 
charged to the residents of the unit shall be set at levels not to 
exceed the amounts allowable under such section.

SEC. 275. CARRY-OVER OF ASSISTANCE FOR REPLACED HOUSING.

  In the case of a mixed-finance housing development that is 
replacement housing for public housing demolished or disposed of, or is 
the result of the revitalization of existing public housing, the share 
of assistance received from the capital fund and the operating fund by 
the public housing agency that owned or operated the housing 
demolished, disposed of, or revitalized shall not be reduced because of 
such demolition, disposition, or revitalization after the commencement 
of such demolition, disposition, or revitalization, unless--
          (1) upon the expiration of the 18-month period beginning upon 
        the approval of the plan under section 273 for the mixed-
        finance housing development, the agency does not have binding 
        commitments for production or revitalization, or a construction 
        contract, for such development;
          (2) upon the expiration of the 4-year period beginning upon 
        the approval of the plan, the mixed-finance housing development 
        is not substantially ready for occupancy and is placed under 
        the block grant contract for the agency under section 201; or
          (3) the number of dwelling units in the mixed-finance housing 
        development that are made available for occupancy only by low-
        income families is substantially less than the number of such 
        dwelling units in the public housing demolished, disposed of, 
        or revitalized.
The Secretary may extend the period under paragraph (1) or (2) for a 
public housing agency if the Secretary determines that circumstances 
beyond the control of the agency caused the agency to fail to meet the 
deadline under such paragraph.

                     Subtitle G--General Provisions

SEC. 281. PAYMENT OF NON-FEDERAL SHARE.

  Rental or use-value of buildings or facilities paid for, in whole or 
in part, from production, modernization, or operation costs financed 
under this title may be used as the non-Federal share required in 
connection with activities undertaken under Federal grant-in-aid 
programs which provide social, educational, employment, and other 
services to the residents in a project assisted under this title.

SEC. 282. AUTHORIZATION OF APPROPRIATIONS FOR BLOCK GRANTS.

  There are authorized to be appropriated for grants under this title, 
the following amounts:
          (1) Capital fund.--For the allocations from the capital fund 
        for grants, $2,500,000,000 for each of fiscal years 1998, 1999, 
        2000, 2001, and 2002; and
          (2) Operating fund.--For the allocations from the operating 
        fund for grants, $2,900,000,000 for each of fiscal years 1998, 
        1999, 2000, 2001, and 2002.

SEC. 283. FUNDING FOR OPERATION SAFE HOME.

  Of any amounts made available for fiscal years 1998 and 1999 for 
carrying out the Community Partnerships Against Crime Act of 1997 (as 
so designated pursuant to section 624(a) of this Act), not more than 
$20,000,000 shall be available in each such fiscal year, for use under 
the Operation Safe Home program administered by the Office of the 
Inspector General of the Department of Housing and Urban Development, 
for law enforcement efforts to combat violent crime on or near the 
premises of public and federally assisted housing and to provide 
assistance (including housing assistance under title III) for 
relocating witnesses of crimes pursuant to requests from law 
enforcement or prosecuting agencies.

SEC. 284. FUNDING FOR RELOCATION OF VICTIMS OF DOMESTIC VIOLENCE.

  Of any amounts made available for fiscal years 1998, 1999, 2000, 
2001, and 2002 for choice-based housing assistance under title III of 
this Act, not more than $700,000 shall be available in each such fiscal 
year for relocating residents of public housing (including providing 
assistance for costs of relocation and housing assistance under title 
III of this Act) who are residing in public housing, who have been 
subject to domestic violence, and for whom provision of assistance is 
likely to reduce or eliminate the threat of subsequent violence to the 
members of the family. The Secretary shall establish procedures for 
eligibility and administration of assistance under this section.

TITLE III--CHOICE-BASED RENTAL HOUSING AND HOMEOWNERSHIP ASSISTANCE FOR 
                          LOW-INCOME FAMILIES

                         Subtitle A--Allocation

SEC. 301. AUTHORITY TO PROVIDE HOUSING ASSISTANCE AMOUNTS.

  To the extent that amounts to carry out this title are made 
available, the Secretary may enter into contracts with public housing 
agencies for each fiscal year to provide housing assistance under this 
title.

SEC. 302. CONTRACTS WITH PHA'S.

  (a) Condition of Assistance.--The Secretary may provide amounts under 
this title to a public housing agency for a fiscal year only if the 
Secretary has entered into a contract under this section with the 
public housing agency, under which the Secretary shall provide such 
agency with amounts (in the amount of the allocation for the agency 
determined pursuant to section 304) for housing assistance under this 
title for low-income families.
  (b) Use for Housing Assistance.--A contract under this section shall 
require a public housing agency to use amounts provided under this 
title to provide housing assistance in any manner authorized under this 
title.
  (c) Annual Obligation of Authority.--A contract under this title 
shall provide amounts for housing assistance for 1 fiscal year covered 
by the contract.
  (d) Enforcement of Housing Quality Requirements.--Each contract under 
this section shall require the public housing agency administering 
assistance provided under the contract--
          (1) to ensure compliance, under each housing assistance 
        payments contract entered into pursuant to the contract under 
        this section, with the provisions of the housing assistance 
        payments contract included pursuant to section 351(c)(4); and
          (2) to establish procedures for assisted families to notify 
        the agency of any noncompliance with such provisions.

SEC. 303. ELIGIBILITY OF PHA'S FOR ASSISTANCE AMOUNTS.

  The Secretary may provide amounts available for housing assistance 
under this title pursuant to the formula established under section 
304(a) to a public housing agency only if--
          (1) the agency has submitted a local housing management plan 
        to the Secretary for such fiscal year and applied to the 
        Secretary for such assistance;
          (2) the plan has been determined to comply with the 
        requirements under section 106 and the Secretary has not 
        notified the agency that the plan fails to comply with such 
        requirements;
          (3) no member of the board of directors or other governing 
        body of the agency, or the executive director, has been 
        convicted of a felony; and
          (4) the agency has not been disqualified for assistance 
        pursuant to title V.

SEC. 304. ALLOCATION OF AMOUNTS.

  (a) Formula Allocation.--
          (1) In general.--When amounts for assistance under this title 
        are first made available for reservation, after reserving 
        amounts in accordance with subsections (b)(3) and (c), the 
        Secretary shall allocate such amounts, only among public 
        housing agencies meeting the requirements under this title to 
        receive such assistance, on the basis of a formula that is 
        established in accordance with paragraph (2) and based upon 
        appropriate criteria to reflect the needs of different States, 
        areas, and communities, using the most recent data available 
        from the Bureau of the Census of the Department of Commerce and 
        the comprehensive housing affordability strategy under section 
        105 of the Cranston-Gonzalez National Affordable Housing Act 
        (or any consolidated plan incorporating such strategy) for the 
        applicable jurisdiction. The Secretary may establish a minimum 
        allocation amount, in which case only the public housing 
        agencies that, pursuant to the formula, are provided an amount 
        equal to or greater than the minimum allocation amount, shall 
        receive an allocation.
          (2) Regulations.--The formula under this subsection shall be 
        established by regulation issued by the Secretary. 
        Notwithstanding sections 563(a) and 565(a) of title 5, United 
        States Code, any proposed regulation containing such formula 
        shall be issued pursuant to a negotiated rulemaking procedure 
        under subchapter III of chapter 5 of such title and the 
        Secretary shall establish a negotiated rulemaking committee for 
        development of any such proposed regulations.
  (b) Allocation Considerations.--
          (1) Limitation on reallocation for another state.--Any 
        amounts allocated for a State or areas or communities within a 
        State that are not likely to be used within the fiscal year for 
        which the amounts are provided shall not be reallocated for use 
        in another State, unless the Secretary determines that other 
        areas or communities within the same State (that are eligible 
        for amounts under this title) cannot use the amounts within the 
        same fiscal year.
          (2) Effect of receipt of tenant-based assistance for disabled 
        families.--The Secretary may not consider the receipt by a 
        public housing agency of assistance under section 811(b)(1) of 
        the Cranston-Gonzalez National Affordable Housing Act, or the 
        amount received, in approving amounts under this title for the 
        agency or in determining the amount of such assistance to be 
        provided to the agency.
          (3) Exemption from formula allocation.--The formula 
        allocation requirements of subsection (a) shall not apply to 
        any assistance under this title that is approved in 
        appropriation Acts for uses that the Secretary determines are 
        incapable of geographic allocation, including amendments of 
        existing housing assistance payments contracts, renewal of such 
        contracts, assistance to families that would otherwise lose 
        assistance due to the decision of the project owner to prepay 
        the project mortgage or not to renew the housing assistance 
        payments contract, assistance to prevent displacement from 
        public or assisted housing or to provide replacement housing in 
        connection with the demolition or disposition of public 
        housing, assistance for relocation from public housing, 
        assistance in connection with protection of crime witnesses, 
        assistance for conversion from leased housing contracts under 
        section 23 of the United States Housing Act of 1937 (as in 
        effect before the enactment of the Housing and Community 
        Development Act of 1974), and assistance in support of the 
        property disposition and portfolio management functions of the 
        Secretary.
  (c) Recapture of Amounts.--
          (1) Authority.--In each fiscal year, from any budget 
        authority made available for assistance under this title or 
        section 8 of the United States Housing Act of 1937 (as in 
        effect before the effective date of the repeal under section 
        601(b) of this Act) that is obligated to a public housing 
        agency but remains unobligated by the agency upon the 
        expiration of the 8-month period beginning upon the initial 
        availability of such amounts for obligation by the agency, the 
        Secretary may deobligate an amount, as determined by the 
        Secretary, not exceeding 50 percent of such unobligated amount.
          (2) Use.--The Secretary may reallocate and transfer any 
        amounts deobligated under paragraph (1) only to public housing 
        agencies in areas that the Secretary determines have received 
        less funding than other areas, based on the relative needs of 
        all areas.

SEC. 305. ADMINISTRATIVE FEES.

  (a) Fee for Ongoing Costs of Administration.--
          (1) In general.--The Secretary shall establish fees for the 
        costs of administering the choice-based housing assistance 
        program under this title.
          (2) Fiscal year 1998.--
                  (A) Calculation.--For fiscal year 1998, the fee for 
                each month for which a dwelling unit is covered by a 
                contract for assistance under this title shall be--
                          (i) in the case of a public housing agency 
                        that, on an annual basis, is administering a 
                        program for not more than 600 dwelling units, 
                        7.65 percent of the base amount; and
                          (ii) in the case of an agency that, on an 
                        annual basis, is administering a program for 
                        more than 600 dwelling units--
                                  (I) for the first 600 units, 7.65 
                                percent of the base amount; and
                                  (II) for any additional dwelling 
                                units under the program, 7.0 percent of 
                                the base amount.
                  (B) Base amount.--For purposes of this paragraph, the 
                base amount shall be the higher of--
                          (i) the fair market rental established under 
                        section 8(c) of the United States Housing Act 
                        of 1937 (as in effect immediately before the 
                        effective date of the repeal under section 
                        601(b) of this Act) for fiscal year 1993 for a 
                        2-bedroom existing rental dwelling unit in the 
                        market area of the agency, and
                          (ii) the amount that is the lesser of (I) 
                        such fair market rental for fiscal year 1994 or 
                        (II) 103.5 percent of the amount determined 
                        under clause (i),
                adjusted based on changes in wage data or other 
                objectively measurable data that reflect the costs of 
                administering the program, as determined by the 
                Secretary. The Secretary may require that the base 
                amount be not less than a minimum amount and not more 
                than a maximum amount.
          (3) Subsequent fiscal years.--For subsequent fiscal years, 
        the Secretary shall publish a notice in the Federal Register, 
        for each geographic area, establishing the amount of the fee 
        that would apply for public housing agencies administering the 
        program, based on changes in wage data or other objectively 
        measurable data that reflect the costs of administering the 
        program, as determined by the Secretary.
          (4) Increase.--The Secretary may increase the fee if 
        necessary to reflect the higher costs of administering small 
        programs and programs operating over large geographic areas.
  (b) Fee for Preliminary Expenses.--The Secretary shall also establish 
reasonable fees (as determined by the Secretary) for--
          (1) the costs of preliminary expenses, in the amount of $500, 
        for a public housing agency, but only in the first year that 
        the agency administers a choice-based housing assistance 
        program under this title, and only if, immediately before the 
        effective date of this Act, the agency was not administering a 
        tenant-based rental assistance program under the United States 
        Housing Act of 1937 (as in effect immediately before such 
        effective date), in connection with its initial increment of 
        assistance received;
          (2) the costs incurred in assisting families who experience 
        difficulty (as determined by the Secretary) in obtaining 
        appropriate housing under the programs; and
          (3) extraordinary costs approved by the Secretary.
  (c) Transfer of Fees in Cases of Concurrent Geographical 
Jurisdiction.--In each fiscal year, if any public housing agency 
provides tenant-based rental assistance under section 8 of the United 
States Housing Act of 1937 or housing assistance under this title on 
behalf of a family who uses such assistance for a dwelling unit that is 
located within the jurisdiction of such agency but is also within the 
jurisdiction of another public housing agency, the Secretary shall take 
such steps as may be necessary to ensure that the public housing agency 
that provides the services for a family receives all or part of the 
administrative fee under this section (as appropriate).

SEC. 306. AUTHORIZATIONS OF APPROPRIATIONS.

  (a) In General.--There is authorized to be appropriated for providing 
public housing agencies with housing assistance under this title, 
$1,861,668,000 for each of fiscal years 1998, 1999, 2000, 2001, and 
2002.
  (b) Assistance for Disabled Families.--
          (1) Authorization of appropriations.--There is authorized to 
        be appropriated, for choice-based housing assistance under this 
        title to be used in accordance with paragraph (2), $50,000,000 
        for fiscal year 1998, and such sums as may be necessary for 
        each subsequent fiscal year.
          (2) Use.--The Secretary shall provide amounts made available 
        under paragraph (1) to public housing agencies only for use to 
        provide housing assistance under this title for nonelderly 
        disabled families (including such families relocating pursuant 
        to designation of a public housing development under section 
        227 and other nonelderly disabled families who have applied to 
        the agency for housing assistance under this title).
          (3) Allocation of amounts.--The Secretary shall allocate and 
        provide amounts made available under paragraph (1) to public 
        housing agencies as the Secretary determines appropriate based 
        on the relative levels of need among the authorities for 
        assistance for families described in paragraph (1).
  (c) Assistance for Witness Relocation.--Of the amounts made available 
for choice-based housing assistance under this title for each fiscal 
year, the Secretary, in consultation with the Inspector General, shall 
make available such sums as may be necessary for such housing 
assistance for the relocation of witnesses in connection with efforts 
to combat crime in public and assisted housing pursuant to requests 
from law enforcement and prosecutive agencies.

SEC. 307. CONVERSION OF SECTION 8 ASSISTANCE.

  (a) In General.--Any amounts made available to a public housing 
agency under a contract for annual contributions for assistance under 
section 8 of the United States Housing Act of 1937 (as in effect before 
the effective date of the repeal under section 601(b) of this Act) that 
have not been obligated for such assistance by such agency before such 
effective date shall be used to provide assistance under this title, 
except to the extent the Secretary determines such use is inconsistent 
with existing commitments.
  (b) Exception.--Subsection (a) shall not apply to any amounts made 
available under a contract for housing constructed or substantially 
rehabilitated pursuant to section 8(b)(2) of the United States Housing 
Act of 1937, as in effect before October 1, 1983.

SEC. 308. RECAPTURE AND REUSE OF ANNUAL CONTRACT PROJECT RESERVES UNDER 
                    CHOICE-BASED HOUSING ASSISTANCE AND SECTION 8 
                    TENANT-BASED ASSISTANCE PROGRAMS.

  To the extent that the Secretary determines that the amount in the 
reserve account for annual contributions contracts (for housing 
assistance under this title or tenant-based assistance under section 8 
of the United States Housing Act of 1937) that is under contract with a 
public housing agency for such assistance is in excess of the amounts 
needed by the agency, the Secretary shall recapture such excess amount. 
The Secretary may hold recaptured amounts in reserve until needed to 
enter into, amend, or renew contracts under this title or to amend or 
renew contracts under section 8 of such Act for tenant-based assistance 
with any agency.

   Subtitle B--Choice-Based Housing Assistance for Eligible Families

SEC. 321. ELIGIBLE FAMILIES AND PREFERENCES FOR ASSISTANCE.

  (a) Low-Income Requirement.--Housing assistance under this title may 
be provided only on behalf of a family that--
          (1) at the time that such assistance is initially provided on 
        behalf of the family, is determined by the public housing 
        agency to be a low-income family; or
          (2) qualifies to receive such assistance under any other 
        provision of Federal law.
  (b) Income Targeting.--Of the families initially assisted under this 
title by a public housing agency in any year, not less than 40 percent 
shall be families whose incomes do not exceed 30 percent of the area 
median income, as determined by the Secretary with adjustments for 
smaller and larger families. The Secretary may establish income ceiling 
higher or lower than 30 percent of the area median income on the basis 
of the Secretary's findings that such variations are necessary because 
of unusually high or low family incomes.
  (c) Reviews of Family Incomes.--
          (1) In general.--Reviews of family incomes for purposes of 
        this title shall be subject to the provisions of section 904 of 
        the Stewart B. McKinney Homeless Assistance Amendments Act of 
        1988 and shall be conducted upon the initial provision of 
        housing assistance for the family and thereafter not less than 
        annually.
          (2) Procedures.--Each public housing agency administering 
        housing assistance under this title shall establish procedures 
        that are appropriate and necessary to ensure that income data 
        provided to the agency and owners by families applying for or 
        receiving housing assistance from the agency is complete and 
        accurate.
  (d) Preferences for Assistance.--
          (1) Authority to establish.--Any public housing agency that 
        receives amounts under this title may establish a system for 
        making housing assistanceavailable on behalf of eligible 
families that provides preference for such assistance to eligible 
families having certain characteristics.
          (2) Content.--Each system of preferences established pursuant 
        to this subsection shall be based upon local housing needs and 
        priorities, as determined by the public housing agency using 
        generally accepted data sources, including any information 
        obtained pursuant to an opportunity for public comment as 
        provided under section 106(e) and under the requirements 
        applicable to the comprehensive housing affordability strategy 
        for the relevant jurisdiction.
          (3) Sense of the congress.--It is the sense of the Congress 
        that, to the greatest extent practicable, public housing 
        agencies involved in the selection of tenants under the 
        provisions of this title should adopt preferences for 
        individuals who are victims of domestic violence.
  (e) Portability of Housing Assistance.--
          (1) National portability.--An eligible family that is 
        selected to receive or is receiving assistance under this title 
        may rent any eligible dwelling unit in any area where a program 
        is being administered under this title. Notwithstanding the 
        preceding sentence, a public housing agency may require that 
        any family not living within the jurisdiction of the public 
        housing agency at the time the family applies for assistance 
        from the agency shall, during the 12-month period beginning on 
        the date of initial receipt of housing assistance made 
        available on behalf of the family from such agency, lease and 
        occupy an eligible dwelling unit located within the 
        jurisdiction served by the agency. The agency for the 
        jurisdiction into which the family moves shall have the 
        responsibility for administering assistance for the family.
          (2) Source of funding for a family that moves.--For a family 
        that has moved into the jurisdiction of a public housing agency 
        and that, at the time of the move, has been selected to 
        receive, or is receiving, assistance provided by another 
        agency, the agency for the jurisdiction into which the family 
        has moved may, in its discretion, cover the cost of assisting 
        the family under its contract with the Secretary or through 
        reimbursement from the other agency under that agency's 
        contract.
          (3) Authority to deny assistance to certain families who 
        move.--A family may not receive housing assistance as provided 
        under this subsection if the family has moved from a dwelling 
        unit in violation of the lease for the dwelling unit.
          (4) Funding allocations.--In providing assistance amounts 
        under this title for public housing agencies for any fiscal 
        year, the Secretary may give consideration to any reduction or 
        increase in the number of resident families under the program 
        of an agency in the preceding fiscal year as a result of this 
        subsection.
  (f) Confidentiality for Victims of Domestic Violence.--A public 
housing agency shall be subject to the restrictions regarding release 
of information relating to the identity and new residence of any family 
receiving housing assistance who was a victim of domestic violence that 
are applicable to shelters pursuant to the Family Violence Prevention 
and Services Act. The agency shall work with the United States Postal 
Service to establish procedures consistent with the confidentiality 
provisions in the Violence Against Women Act of 1994.

SEC. 322. RESIDENT CONTRIBUTION.

  (a) Amount.--
          (1) Monthly rent contribution.--An assisted family shall 
        contribute on a monthly basis for the rental of an assisted 
        dwelling unit an amount that the public housing agency 
        determines is appropriate with respect to the family and the 
        unit, but which--
                  (A) shall not be less than the minimum monthly rental 
                contribution determined under subsection (b); and
                  (B) shall not exceed the greatest of--
                          (i) 30 percent of the monthly adjusted income 
                        of the family;
                          (ii) 10 percent of the monthly income of the 
                        family; and
                          (iii) if the family is receiving payments for 
                        welfare assistance from a public agency and a 
                        part of such payments, adjusted in accordance 
                        with the actual housing costs of the family, is 
                        specifically designated by such agency to meet 
                        the housing costs of the family, the portion of 
                        such payments that is so designated.
          (2) Excess rental amount.--In any case in which the monthly 
        rent charged for a dwelling unit pursuant to the housing 
        assistance payments contract exceeds the applicable payment 
        standard (established under section 353) for the dwelling unit, 
        the assisted family residing in the unit shall contribute (in 
        addition to the amount of the monthly rent contribution 
        otherwise determined under paragraph (1) for such family) such 
        entire excess rental amount.
  (b) Minimum Monthly Rental Contribution.--
          (1) In general.--The public housing agency shall determine 
        the amount of the minimum monthly rental contribution of an 
        assisted family (which rent shall include any amount allowed 
        for utilities), which--
                  (A) shall be based upon factors including the 
                adjusted income of the family and any other factors 
                that the agency considers appropriate;
                  (B) shall be not less than $25, nor more than $50; 
                and
                  (C) may be increased annually by the agency, except 
                that no such annual increase may exceed 10 percent of 
                the amount of the minimum monthly contribution in 
                effect for the preceding year.
          (2) Hardship Provisions.--
                  (A) In general.--Notwithstanding paragraph (1), a 
                public housing agency shall grant an exemption in whole 
                or in part from payment of the minimum monthly rental 
                contribution established under this paragraph to any 
                assisted family unable to pay such amount because of 
                financial hardship, which shall include situations in 
                which (i) the family has lost eligibility for or is 
                awaiting an eligibility determination for a Federal, 
                State, or local assistance program; (ii) the family 
                would be evicted as a result of imposition of the 
                minimum rent; (iii) the income of the family has 
                decreased because of changed circumstance, including 
                loss of employment; and (iv) a death in the family has 
                occurred; and other situations as may be determined by 
                the agency.
                  (B) Waiting period.--If an assisted family requests a 
                hardship exemption under this paragraph and the public 
                housing agency reasonably determines the hardship to be 
                of a temporary nature, an exemption shall not be 
                granted during the 90-day period beginning upon the 
                making of a request for the exemption. An assisted 
                family may not be evicted during such 90-day period for 
                nonpayment of rent. In such a case, if the assisted 
                family thereafter demonstrates that the financial 
                hardship is of a long-term basis, the agency shall 
                retroactively exempt the family from the applicability 
                of the minimum rent requirement for such 90-day period.
  (c) Treatment of Changes in Rental Contribution.--
          (1) Notification of changes.--A public housing agency shall 
        promptly notify the owner of an assisted dwelling unit of any 
        change in the resident contribution by the assisted family 
        residing in the unit that takes effect immediately or at a 
        later date.
          (2) Collection of retroactive changes.--In the case of any 
        change in the rental contribution of an assisted family that 
        affects rental payments previously made, the public housing 
        agency shall collect any additional amounts required to be paid 
        by the family under such change directly from the family and 
        shall refund any excess rental contribution paid by the family 
        directly to the family.
  (d) Phase-In of Rent Contribution Increases.--
          (1) In general.--Except as provided in paragraph (2), for any 
        family that is receiving tenant-based rental assistance under 
        section 8 of the United States Housing Act of 1937 upon the 
        initial applicability of the provisions of this title to such 
        family, if the monthly contribution for rental of an assisted 
        dwelling unit to be paid by the family upon such initial 
        applicability is greater than the amount paid by the family 
        under the provisions of the United States Housing Act of 1937 
        immediately before such applicability, any such resulting 
        increase in rent contribution shall be--
                  (A) phased in equally over a period of not less than 
                3 years, if such increase is 30 percent or more of such 
                contribution before initial applicability; and
                  (B) limited to not more than 10 percent per year if 
                such increase is more than 10 percent but less than 30 
                percent of such contribution before initial 
                applicability.
          (2) Exception.--The minimum rent contribution requirement 
        under subsection (b)(1) shall apply to each family described in 
        paragraph (1) of this subsection, notwithstanding such 
        paragraph.

SEC. 323. RENTAL INDICATORS.

  (a) In General.--The Secretary shall establish and issue rental 
indicators under this section periodically, but not less than annually, 
for existing rental dwelling units that are eligible dwelling units. 
The Secretary shall establish and issuethe rental indicators by housing 
market area (as the Secretary shall establish) for various sizes and 
types of dwelling units.
  (b) Amount.--For a market area, the rental indicator established 
under subsection (a) for a dwelling unit of a particular size and type 
in the market area shall be a dollar amount that reflects the rental 
amount for a standard quality rental unit of such size and type in the 
market area that is an eligible dwelling unit.
  (c) Effective Date.--The Secretary shall cause the proposed rental 
indicators established under subsection (a) for each market area to be 
published in the Federal Register with reasonable time for public 
comment, and such rental indicators shall become effective upon the 
date of publication in final form in the Federal Register.
  (d) Annual Adjustment.--Each rental indicator in effect under this 
section shall be adjusted to be effective on October 1 of each year to 
reflect changes, based on the most recent available data trended so 
that the indicators will be current for the year to which they apply, 
in rents for existing rental dwelling units of various sizes and types 
in the market area suitable for occupancy by families assisted under 
this title.

SEC. 324. LEASE TERMS.

  Rental assistance may be provided for an eligible dwelling unit only 
if the assisted family and the owner of the dwelling unit enter into a 
lease for the unit that--
          (1) provides for a single lease term of 12 months and 
        continued tenancy after such term under a periodic tenancy on a 
        month-to-month basis;
          (2) contains terms and conditions specifying that termination 
        of tenancy during the term of a lease shall be subject to the 
        provisions set forth in sections 642 and 643; and
          (3) is set forth in the standard form, which is used in the 
        local housing market area by the owner and applies generally to 
        any other tenants in the property who are not assisted 
        families, together with any addendum necessary to include the 
        many terms required under this section.
A lease may include any addenda appropriate to set forth the provisions 
under this title.

SEC. 325. TERMINATION OF TENANCY.

  Each housing assistance payments contract shall provide that the 
owner shall conduct the termination of tenancy of any tenant of an 
assisted dwelling unit under the contract in accordance with applicable 
State or local laws, including providing any notice of termination 
required under such laws.

SEC. 326. ELIGIBLE OWNERS.

  (a) Ownership Entity.--Rental assistance under this title may be 
provided for any eligible dwelling unit for which the owner is any 
public agency, private person or entity (including a cooperative), 
nonprofit organization, agency of the Federal Government, or public 
housing agency.
  (b) Ineligible Owners.--
          (1) In general.--Notwithstanding subsection (a), a public 
        housing agency--
                  (A) may not enter into a housing assistance payments 
                contract (or renew an existing contract) covering a 
                dwelling unit that is owned by an owner who is 
                debarred, suspended, or subject to limited denial of 
                participation under part 24 of title 24, Code of 
                Federal Regulations;
                  (B) may prohibit, or authorize the termination or 
                suspension of, payment of housing assistance under a 
                housing assistance payments contract in effect at the 
                time such debarment, suspension, or limited denial of 
                participation takes effect.
        If the public housing agency takes action under subparagraph 
        (B), the agency shall take such actions as may be necessary to 
        protect assisted families who are affected by the action, which 
        may include the provision of additional assistance under this 
        title to such families.
          (2) Prohibition of sale or rental to related parties.--The 
        Secretary shall establish guidelines to prevent housing 
        assistance payments for a dwelling unit that is owned by any 
        spouse, child, or other party who allows an owner described in 
        paragraph (1) to maintain control of the unit.

SEC. 327. SELECTION OF DWELLING UNITS.

  (a) Family Choice.--The determination of the dwelling unit in which 
an assisted family resides and for which housing assistance is provided 
under this title shall be made solely by the assisted family, subject 
to the provisions of this title and any applicable law.
  (b) Deed Restrictions.--Housing assistance may not be used in any 
manner that abrogates any local deed restriction that applies to any 
housing consisting of 1 to 4 dwelling units. Nothing in this section 
may be construed to affect the provisions or applicability of the Fair 
Housing Act.

SEC. 328. ELIGIBLE DWELLING UNITS.

  (a) In General.--A dwelling unit shall be an eligible dwelling unit 
for purposes of this title only if the public housing agency to provide 
housing assistance for the dwelling unit determines that the dwelling 
unit--
          (1) is an existing dwelling unit that is not located within a 
        nursing home or the grounds of any penal, reformatory, medical, 
        mental, or similar public or private institution; and
          (2) complies--
                  (A) in the case of a dwelling unit located in a 
                jurisdiction which has in effect laws, regulations, 
                standards, or codes regarding habitability of 
                residential dwellings, with such applicable laws, 
                regulations, standards, or codes; or
                  (B) in the case of a dwelling unit located in a 
                jurisdiction which does not have in effect laws, 
                regulations, standards, or codes described in 
                subparagraph (A), with the housing quality standards 
                established under subsection (c).
Each public housing agency providing housing assistance shall identify, 
in the local housing management plan for the agency, whether the agency 
is utilizing the standard under subparagraph (A) or (B) of paragraph 
(2).
  (b) Determinations.--
          (1) In general.--A public housing agency shall make the 
        determinations required under subsection (a) pursuant to an 
        inspection of the dwelling unit conducted before any assistance 
        payment is made for the unit.
          (2) Expeditious inspection.--Inspections of dwelling units 
        under this subsection shall be made before the expiration of 
        the 15-day period beginning upon a request by the resident or 
        landlord to the public housing agency. The performance of the 
        agency in meeting the 15-day inspection deadline shall be taken 
        into account in assessing the performance of the agency.
  (c) Federal Housing Quality Standards.--The Secretary shall establish 
housing quality standards under this subsection that ensure that 
assisted dwelling units are safe, clean, and healthy. Such standards 
shall include requirements relating to habitability, including 
maintenance, health and sanitation factors, condition, and construction 
of dwellings, and shall, to the greatest extent practicable, be 
consistent with the standards established under section 232(b). The 
Secretary shall differentiate between major and minor violations of 
such standards.
  (d) Annual Inspections.--Each public housing agency providing housing 
assistance shall make an annual inspection of each assisted dwelling 
unit during the term of the housing assistance payments contracts for 
the unit to determine whether the unit is maintained in accordance with 
the requirements under subsection (a)(2). The agency shall retain the 
records of the inspection for a reasonable time and shall make the 
records available upon request to the Secretary, the Inspector General 
for the Department of Housing and Urban Development, and any auditor 
conducting an audit under section 541.
  (e) Inspection Guidelines.--The Secretary shall establish procedural 
guidelines and performance standards to facilitate inspections of 
dwelling units and conform such inspections with practices utilized in 
the private housing market. Such guidelines and standards shall take 
into consideration variations in local laws and practices of public 
housing agencies and shall provide flexibility to authorities 
appropriate to facilitate efficient provision of assistance under this 
title.
  (f) Rule of Construction.--This section may not be construed to 
prevent the provision of housing assistance in connection with 
supportive services for elderly or disabled families.

SEC. 329. HOMEOWNERSHIP OPTION.

  (a) In General.--A public housing agency providing housing assistance 
under this title may provide homeownership assistance to assist 
eligible families to purchase a dwelling unit (including purchase under 
lease-purchase homeownership plans).
  (b) Requirements.--A public housing agency providing homeownership 
assistance under this section shall, as a condition of an eligible 
family receiving such assistance, require the family to--
          (1) demonstrate that the family has sufficient income from 
        employment or other sources (other than public assistance), as 
        determined in accordance with requirements established by the 
        agency; and
          (2) meet any other initial or continuing requirements 
        established by the public housing agency.
  (c) Downpayment Requirement.--
          (1) In general.--A public housing agency may establish 
        minimum downpayment requirements, if appropriate, in connection 
        with loans made for the purchase of dwelling units for which 
        homeownership assistance is provided under this section. If the 
        agency establishes a minimum downpayment requirement, the 
        agency shall permit the family to use grant amounts, gifts from 
        relatives, contributions from private sources, and similar 
        amounts as downpayment amounts in such purchase, subject to the 
        requirements of paragraph (2).
          (2) Direct family contribution.--In purchasing housing 
        pursuant to this section subject to a downpayment requirement, 
        each family shall contribute an amount of the downpayment, from 
        resources of the family other than grants, gifts, 
        contributions, or other similar amounts referred to in 
        paragraph (1), that is not less than 1 percent of the purchase 
        price.
  (d) Ineligibility Under Other Programs.--A family may not receive 
homeownership assistance pursuant to this section during any period 
when assistance is being provided for the family under other Federal 
homeownership assistance programs, as determined by the Secretary, 
including assistance under the HOME Investment Partnerships Act, the 
Homeownership and Opportunity Through HOPE Act, title II of the Housing 
and Community Development Act of 1987, and section 502 of the Housing 
Act of 1949.

SEC. 330. ASSISTANCE FOR RENTAL OF MANUFACTURED HOMES.

  (a) Authority.--Nothing in this title may be construed to prevent a 
public housing agency from providing housing assistance under this 
title on behalf of a low-income family for the rental of--
          (1) a manufactured home that is the principal residence of 
        the family and the real property on which the home is located; 
        or
          (2) the real property on which is located a manufactured 
        home, which is owned by the family and is the principal 
        residence of the family.
  (b) Assistance for Certain Families Owning Manufactured Homes.--
          (1) Authority.--Notwithstanding section 351 or any other 
        provision of this title, a public housing agency that receives 
        amounts under a contract under section 302 may enter into a 
        housing assistance payment contract to make assistance payments 
        under this title to a family that owns a manufactured home, but 
        only as provided in paragraph (2).
          (2) Limitations.--In the case only of a low-income family 
        that owns a manufactured home, rents the real property on which 
        it is located, and to whom housing assistance under this title 
        has been made available for the rental of such property, the 
        public housing agency making such assistance available shall 
        enter into a contract to make housing assistance payments under 
        this title directly to the family (rather than to the owner of 
        such real property) if--
                  (A) the owner of the real property refuses to enter 
                into a contract to receive housing assistance payments 
                pursuant to section 351(a);
                  (B) the family was residing in such manufactured home 
                on such real property at the time such housing 
                assistance was initially made available on behalf of 
                the family;
                  (C) the family provides such assurances to the 
                agency, as the Secretary may require, to ensure that 
                amounts from the housing assistance payments are used 
                for rental of the real property; and
                  (D) the rental of the real property otherwise 
                complies with the requirements for assistance under 
                this title.
        A contract pursuant to this subsection shall be subject to the 
        provisions of section 351 and any other provisions applicable 
        to housing assistance payments contracts under this title, 
        except that the Secretary may provide such exceptions as the 
        Secretary considers appropriate to facilitate the provision of 
        assistance under this subsection.

    Subtitle C--Payment of Housing Assistance on Behalf of Assisted 
                                Families

SEC. 351. HOUSING ASSISTANCE PAYMENTS CONTRACTS.

  (a) In General.--Each public housing agency that receives amounts 
under a contract under section 302 may enter into housing assistance 
payments contracts with owners of existing dwelling units to make 
housing assistance payments to such owners in accordance with this 
title.
  (b) PHA Acting As Owner.--A public housing agency may enter into a 
housing assistance payments contract to make housing assistance 
payments under this title to itself (or any agency or instrumentality 
thereof) as the owner of dwelling units (other than public housing), 
and the agency shall be subject to the same requirements that are 
applicable to other owners, except that the determinations under 
section 328(a) and 354(b) shall be made by a competent party not 
affiliated with the agency, and the agency shall be responsible for any 
expenses of such determinations.
  (c) Provisions.--Each housing assistance payments contract shall--
          (1) have a term of not more than 12 months;
          (2) require that the assisted dwelling unit may be rented 
        only pursuant to a lease that complies with the requirements of 
        section 324;
          (3) comply with the requirements of sections 325, 642, and 
        643 (relating to termination of tenancy);
          (4) require the owner to maintain the dwelling unit in 
        accordance with the applicable standards under section 
        328(a)(2); and
          (5) provide that the screening and selection of eligible 
        families for assisted dwelling units shall be the function of 
        the owner.

SEC. 352. AMOUNT OF MONTHLY ASSISTANCE PAYMENT.

  (a) Units Having Gross Rent Exceeding Payment Standard.--In the case 
of a dwelling unit bearing a gross rent that exceeds the payment 
standard established under section 353 for a dwelling unit of the 
applicable size and located in the market area in which such assisted 
dwelling unit is located, the amount of the monthly assistance payment 
shall be the amount by which such payment standard exceeds the amount 
of the resident contribution determined in accordance with section 
322(a)(1).
  (b) Shopping Incentive for Units Having Gross Rent Not Exceeding 
Payment Standard.--In the case of an assisted family renting an 
eligible dwelling unit bearing a gross rent that does not exceed the 
payment standard established under section 353 for a dwelling unit of 
the applicable size and located in the market area in which such 
assisted dwelling unit is located, the following requirements shall 
apply:
          (1) Amount of monthly assistance payment.--The amount of the 
        monthly assistance payment for housing assistance under this 
        title on behalf of the assisted family shall be the amount by 
        which the gross rent for the dwelling unit exceeds the amount 
        of the resident contribution.
          (2) Escrow of shopping incentive savings.--An amount equal to 
        50 percent of the difference between payment standard and the 
        gross rent for the dwelling unit shall be placed in an interest 
        bearing escrow account on behalf of such family on a monthly 
        basis by the public housing agency. Amounts in the escrow 
        account shall be made available to the assisted family on an 
        annual basis.
          (3) Deficit reduction.--The public housing agency making 
        housing assistance payments on behalf of such assisted family 
        in a fiscal year shall reserve from amounts made available to 
        the agency for assistance payments for such fiscal year an 
        amount equal to the amount described in paragraph (2). At the 
        end of each fiscal year, the Secretary shall recapture any such 
        amounts reserved by public housing agencies and such amounts 
        shall be covered into the General Fund of the Treasury of the 
        United States.
For purposes of this section, in the case of a family receiving 
homeownership assistance under section 329, the term ``gross rent'' 
shall mean the homeownership costs to the family as determined in 
accordance with guidelines of the Secretary.

SEC. 353. PAYMENT STANDARDS.

  (a) Establishment.--Each public housing agency providing housing 
assistance under this title shall establish payment standards under 
this section for various areas, and sizes and types of dwelling units, 
for use in determining the amount of monthly housing assistance payment 
to be provided on behalf of assisted families.
  (b) Use of Rental Indicators.--The payment standard for each size and 
type of housing for each market area shall be an amount that is not 
less than 80 percent, and not greater than 120 percent, of the rental 
indicator established under section 323 for such size and type for such 
area.
  (c) Review.--If the Secretary determines, at any time, that a 
significant percentage of the assisted families who are assisted by a 
public housing agency and are occupying dwelling units of a particular 
size are paying more than 30 percent of their adjusted incomes for 
rent, the Secretary shall review the payment standardestablished by the 
agency for such size dwellings. If, pursuant to the review, the 
Secretary determines that such payment standard is not appropriate to 
serve the needs of the low-income population of the jurisdiction served 
by the agency (taking into consideration rental costs in the area), as 
identified in the approved community improvement plan of the agency, 
the Secretary may require the public housing agency to modify the 
payment standard.

SEC. 354. REASONABLE RENTS.

  (a) Establishment.--The rent charged for a dwelling unit for which 
rental assistance is provided under this title shall be established 
pursuant to negotiation and agreement between the assisted family and 
the owner of the dwelling unit.
  (b) Reasonableness.--
          (1) Determination.--A public housing agency providing rental 
        assistance under this title for a dwelling unit shall, before 
        commencing assistance payments for a unit (with respect to 
        initial contract rents and any rent revisions), determine 
        whether the rent charged for the unit exceeds the rents charged 
        for comparable units in the applicable private unassisted 
        market.
          (2) Unreasonable rents.--If the agency determines that the 
        rent charged for a dwelling unit exceeds such comparable rents, 
        the agency shall--
                  (A) inform the assisted family renting the unit that 
                such rent exceeds the rents for comparable unassisted 
                units in the market; and
                  (B) refuse to provide housing assistance payments for 
                such unit.

SEC. 355. PROHIBITION OF ASSISTANCE FOR VACANT RENTAL UNITS.

  If an assisted family vacates a dwelling unit for which rental 
assistance is provided under a housing assistance payments contract 
before the expiration of the term of the lease for the unit, rental 
assistance pursuant to such contract may not be provided for the unit 
after the month during which the unit was vacated.

            Subtitle D--General and Miscellaneous Provisions

SEC. 371. DEFINITIONS.

  For purposes of this title:
          (1) Assisted dwelling unit.--The term ``assisted dwelling 
        unit'' means a dwelling unit in which an assisted family 
        resides and for which housing assistance payments are made 
        under this title.
          (2) Assisted family.--The term ``assisted family'' means an 
        eligible family on whose behalf housing assistance payments are 
        made under this title or who has been selected and approved for 
        housing assistance.
          (3) Choice-based.--The term ``choice-based'' means, with 
        respect to housing assistance, that the assistance is not 
        attached to a dwelling unit but can be used for any eligible 
        dwelling unit selected by the eligible family.
          (4) Eligible dwelling unit.--The term ``eligible dwelling 
        unit'' means a dwelling unit that complies with the 
        requirements under section 328 for consideration as an eligible 
        dwelling unit.
          (5) Eligible family.--The term ``eligible family'' means a 
        family that meets the requirements under section 321(a) for 
        assistance under this title.
          (6) Homeownership assistance.--The term ``homeownership 
        assistance'' means housing assistance provided under section 
        329 for the ownership of a dwelling unit.
          (7) Housing assistance.--The term ``housing assistance'' 
        means choice-based assistance provided under this title on 
        behalf of low-income families for the rental or ownership of an 
        eligible dwelling unit.
          (8) Housing assistance payments contract.--The term ``housing 
        assistance payments contract'' means a contract under section 
        351 between a public housing agency (or the Secretary) and an 
        owner to make housing assistance payments under this title to 
        the owner on behalf of an assisted family.
          (9) Public housing agency.--The terms ``public housing 
        agency'' and ``agency'' have the meaning given such terms in 
        section 103, except that the terms include--
                  (A) a consortia of public housing agencies that the 
                Secretary determines has the capacity and capability to 
                administer a program for housing assistance under this 
                title in an efficient manner;
                  (B) any other entity that, upon the effective date of 
                this Act, was administering any program for tenant-
                based rental assistance under section 8 of the United 
                States Housing Act of 1937 (as in effect before the 
                effective date of the repeal under section 601(b) of 
                this Act), pursuant to a contract with the Secretary or 
                a public housing agency; and
                  (C) with respect to any area in which no public 
                housing agency has been organized or where the 
                Secretary determines that a public housing agency is 
                unwilling or unable to implement this title, or is not 
                performing effectively--
                          (i) the Secretary or another entity that by 
                        contract agrees to receive assistance amounts 
                        under this title and enter into housing 
                        assistance payments contracts with owners and 
                        perform the other functions of public housing 
                        agency under this title; or
                          (ii) notwithstanding any provision of State 
                        or local law, a public housing agency for 
                        another area that contracts with the Secretary 
                        to administer a program for housing assistance 
                        under this title, without regard to any 
                        otherwise applicable limitations on its area of 
                        operation.
          (10) Owner.--The term ``owner'' means the person or entity 
        having the legal right to lease or sublease dwelling units. 
        Such term includes any principals, general partners, primary 
        shareholders, and other similar participants in any entity 
        owning a multifamily housing project, as well as the entity 
        itself.
          (11) Rent.--The terms ``rent'' and ``rental'' include, with 
        respect to members of a cooperative, the charges under the 
        occupancy agreements between such members and the cooperative.
          (12) Rental assistance.--The term ``rental assistance'' means 
        housing assistance provided under this title for the rental of 
        a dwelling unit.

SEC. 372. RENTAL ASSISTANCE FRAUD RECOVERIES.

  (a) Authority To Retain Recovered Amounts.--The Secretary shall 
permit public housing agencies administering housing assistance under 
this title to retain, out of amounts obtained by the authorities from 
tenants that are due as a result of fraud and abuse, an amount 
(determined in accordance with regulations issued by the Secretary) 
equal to the greater of--
          (1) 50 percent of the amount actually collected; or
          (2) the actual, reasonable, and necessary expenses related to 
        the collection, including costs of investigation, legal fees, 
        and collection agency fees.
  (b) Use.--Amounts retained by an agency shall be made available for 
use in support of the affected program or project, in accordance with 
regulations issued by the Secretary. If the Secretary is the principal 
party initiating or sustaining an action to recover amounts from 
families or owners, the provisions of this section shall not apply.
  (c) Recovery.--Amounts may be recovered under this section--
          (1) by an agency through a lawsuit (including settlement of 
        the lawsuit) brought by the agency or through court-ordered 
        restitution pursuant to a criminal proceeding resulting from an 
        agency's investigation where the agency seeks prosecution of a 
        family or where an agency seeks prosecution of an owner;
          (2) through administrative repayment agreements with a family 
        or owner entered into as a result of an administrative 
        grievance procedure conducted by an impartial decisionmaker in 
        accordance with section 110; or
          (3) through an agreement between the parties.

SEC. 373. STUDY REGARDING GEOGRAPHIC CONCENTRATION OF ASSISTED 
                    FAMILIES.

  (a) In General.--The Secretary shall conduct a study of the 
geographic areas in the State of Illinois served by the Housing 
Authority of Cook County and the Chicago Housing Authority and submit 
to the Congress a report and a specific proposal, which addresses and 
resolves the issues of--
          (1) the adverse impact on local communities due to geographic 
        concentration of assisted households under the tenant-based 
        housing programs under section 8 of the United States Housing 
        Act of 1937 (as in effect upon the enactment of this Act) and 
        under this title; and
          (2) facilitating the deconcentration of such assisted 
        households by providing broader housing choices to such 
        households.
The study shall be completed, and the report shall be submitted, not 
later than 90 days after the date of the enactment of this Act.
  (b) Concentration.--For purposes of this section, the term 
``concentration'' means, with respect to any area within a census 
tract, that--
          (1) 15 percent or more of the households residing within such 
        area have incomes which do not exceed the poverty level; or
          (2) 15 percent or more of the total affordable housing stock 
        located within such area is assisted housing.
  (c) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 374. STUDY REGARDING RENTAL ASSISTANCE.

  The Secretary shall conduct a nationwide study of the choice-based 
housing assistance program under this title and the tenant-based rental 
assistance program under section 8 of the United States Housing Act of 
1937 (as in effect pursuant to section 601(c) and 602(b)). The study 
shall, for various localities--
          (1) determine who are the providers of the housing in which 
        families assisted under such programs reside;
          (2) describe and analyze the physical and demographic 
        characteristics of the housing in which such assistance is 
        used, including, for housing in which at least one such 
        assisted family resides, the total number of units in the 
        housing and the number of units in the housing for which such 
        assistance is provided;
          (3) determine the total number of units for which such 
        assistance is provided;
          (4) describe the durations that families remain on waiting 
        lists before being provided such housing assistance; and
          (5) assess the extent and quality of participation of housing 
        owners in such assistance programs in relation to the local 
        housing market, including comparing--
                  (A) the quality of the housing assisted to the 
                housing generally available in the same market; and
                  (B) the extent to which housing is available to be 
                occupied using such assistance to the extent to which 
                housing is generally available in the same market.
The Secretary shall submit a report describing the results of the study 
to the Congress not later than the expiration of the 2-year period 
beginning on the date of the enactment of this Act.

               TITLE IV--HOME RULE FLEXIBLE GRANT OPTION

SEC. 401. PURPOSE.

  The purpose of this title is to give local governments and 
municipalities the flexibility to design creative approaches for 
providing and administering Federal housing assistance based on the 
particular needs of the communities that--
          (1) give incentives to low-income families with children 
        where the head of household is working, seeking work, or 
        preparing for work by participating in job training, 
        educational programs, or programs that assist people to obtain 
        employment and become economically self-sufficient;
          (2) reduce cost and achieve greater cost-effectiveness in 
        Federal housing assistance expenditures;
          (3) increase housing choices for low-income families; and
          (4) reduce excessive geographic concentration of assisted 
        families.

SEC. 402. FLEXIBLE GRANT PROGRAM.

  (a) Authority and Use.--The Secretary shall carry out a program under 
which a jurisdiction may, upon the application of the jurisdiction and 
the review and approval of the Secretary, receive, combine, and enter 
into performance-based contracts for the use of amounts of covered 
housing assistance in a period consisting of not less than 1 nor more 
than 5 fiscal years in the manner determined appropriate by the 
participating jurisdiction--
          (1) to provide housing assistance and services for low-income 
        families in a manner that facilitates the transition of such 
        families to work;
          (2) to reduce homelessness;
          (3) to increase homeownership among low-income families; and
          (4) for other housing purposes for low-income families 
        determined by the participating jurisdiction.
  (b) Inapplicability of Categorical Program Requirements.--
          (1) In general.--Except as provided in paragraph (2) and 
        section 405, the provisions of this Act regarding use of 
        amounts made available under each of the programs included as 
        covered housing assistance and the program requirements 
        applicable to each such program shall not apply to amounts 
        received by a jurisdiction pursuant to this title.
          (2) Applicability of certain laws.--This title may not be 
        construed to exempt assistance under this Act from, or make 
        inapplicable any provision of this Act or of any other law that 
        requires that assistance under this Act be provided in 
        compliance with--
                  (A) title VI of the Civil Rights Act of 1964 (42 
                U.S.C. 2000d et seq.);
                  (B) the Fair Housing Act (42 U.S.C. 3601 et seq.);
                  (C) section 504 of the Rehabilitation Act of 1973 (29 
                U.S.C. 701 et seq.);
                  (D) title IX of the Education Amendments of 1972 (86 
                Stat. 373 et seq.);
                  (E) the Age Discrimination Act of 1975 (42 U.S.C. 
                6101 et seq.);
                  (F) the Americans with Disabilities Act of 1990; or
                  (G) the National Environmental Policy Act of 1969 and 
                other provisions of law that further protection of the 
                environment (as specified in regulations that shall be 
                issued by the Secretary).
  (c) Effect on Program Allocations for Covered Housing Assistance.--
The amount of assistance received pursuant to this title by a 
participating jurisdiction shall not be decreased, because of 
participation in the program under this title, from the sum of the 
amounts that otherwise would be made available for or within the 
participating jurisdiction under the programs included as covered 
housing assistance.

SEC. 403. COVERED HOUSING ASSISTANCE.

  For purposes of this title, the term ``covered housing assistance'' 
means--
          (1) operating assistance provided under section 9 of the 
        United States Housing Act of 1937 (as in effect before the 
        effective date of the repeal under section 601(b) of this Act);
          (2) modernization assistance provided under section 14 of 
        such Act;
          (3) assistance provided under section 8 of such Act for the 
        certificate and voucher programs;
          (4) assistance for public housing provided under title II of 
        this Act; and
          (5) choice-based rental assistance provided under title III 
        of this Act.
Such term does not include any amounts obligated for assistance under 
existing contracts for project-based assistance under section 8 of the 
United States Housing Act of 1937 or section 601(f) of this Act.

SEC. 404. PROGRAM REQUIREMENTS.

  (a) Eligible Families.--Each family on behalf of whom assistance is 
provided for rental or homeownership of a dwelling unit using amounts 
made available pursuant to this title shall be a low-income family. 
Each dwelling unit assisted using amounts made available pursuant to 
this title shall be available for occupancy only by families that are 
low-income families at the time of their initial occupancy of the unit.
  (b) Compliance With Assistance Plan.--A participating jurisdiction 
shall provide assistance using amounts received pursuant to this title 
in the manner set forth in the plan of the jurisdiction approved by the 
Secretary under section 406(a)(2).
  (c) Rent Policy.--A participating jurisdiction shall ensure that the 
rental contributions charged to families assisted with amounts received 
pursuant to this title are reasonable and designed to encourage 
employment and self-sufficiency by participating families.
  (d) Housing Quality Standards.--
          (1) Compliance.--A participating jurisdiction shall ensure 
        that housing assisted with amounts received pursuant to this 
        title is maintained in a condition that complies--
                  (A) in the case of housing located in a jurisdiction 
                which has in effect laws, regulations, standards, or 
                codes regarding habitability of residential dwellings, 
                with such applicable laws, regulations, standards, or 
                codes; or
                  (B) in the case of housing located in a jurisdiction 
                which does not have in effect laws, regulations, 
                standards, or codes described in paragraph (1), with 
                the housing quality standards established under 
                paragraph (2).
          (2) Federal housing quality standards.--The Secretary shall 
        establish housing quality standards under this paragraph that 
        ensure that dwelling units assisted under this title are safe, 
        clean, and healthy. Such standards shall include requirements 
        relating to habitability, including maintenance, health and 
        sanitation factors, condition, and construction of dwellings, 
        and shall, to the greatest extent practicable, be consistent 
        with the standards established under sections 232(b) and 
        328(c). The Secretary shall differentiate between major and 
        minor violations of such standards.
  (e) Number of Families Assisted.--A participating jurisdiction shall 
ensure that, in providing assistance with amounts received pursuant to 
this title in each fiscal year, not less than substantially the same 
total number of eligible low-income families are assisted as would have 
been assisted had the amounts of covered housing assistance not been 
combined for use under this title.
  (f) Consistency With Welfare Program.--A participating jurisdiction 
shall ensure that assistance provided with amounts received pursuant to 
this title is provided in a manner that is consistent with the welfare, 
public assistance, or other economic self-sufficiency programs 
operating in the jurisdiction by facilitating the transition of 
assisted families to work, which may include requiring compliance with 
the requirements under such welfare, public assistance, or self-
sufficiency programs as a condition of receiving housing assistance 
with amounts provided under this title.
  (g) Treatment of Currently Assisted Families.--
          (1) Continuation of assistance.--A participating jurisdiction 
        shall ensure that each family that was receiving housing 
        assistance or residing in an assisted dwelling unit pursuant to 
        any of the programs included as covered housing assistance 
        immediately before the jurisdiction initially provides 
        assistance pursuant to this title shall be offered assistance 
        or an assisted dwelling unit under the program of the 
        jurisdiction under this title.
          (2) Phase-in of rent contribution increases.--For any family 
        that was receiving housing assistance pursuant to any of the 
        programs included as covered housing assistance immediately 
        before the jurisdiction initially provides assistance pursuant 
        to this title, if the monthly contribution for rental of a 
        dwelling unit assisted under this title to be paid by the 
        family upon initial applicability of this title is greater than 
        the amount paid by the family immediately before such 
        applicability, any such resulting increase in rent contribution 
        shall be--
                  (A) phased in equally over a period of not less than 
                3 years, if such increase is 30 percent or more of such 
                contribution before initial applicability; and
                  (B) limited to not more than 10 percent per year if 
                such increase is more than 10 percent but less than 30 
                percent of such contribution before initial 
                applicability.
  (h) Amount of Assistance.--In providing housing assistance using 
amounts received pursuant to this title, the amount of assistance 
provided by a participating jurisdiction on behalf of each assisted 
low-income family shall be sufficient so that if the family used such 
assistance to rent a dwelling unit having a rent equal to the 40th 
percentile of rents for standard quality rental units of the same size 
and type in the same market area, the contribution toward rental paid 
by the family would be affordable (as such term is defined by the 
jurisdiction) to the family.
  (i) Portability.--A participating jurisdiction shall ensure that 
financial assistance for housing provided with amounts received 
pursuant to this title may be used by a family moving from an assisted 
dwelling unit located within the jurisdiction to obtain a dwelling unit 
located outside of the jurisdiction.
  (j) Preferences.--In providing housing assistance using amounts 
received pursuant to this section, a participating jurisdiction may 
establish a system for making housing assistance available that 
provides preference for assistance to families having certain 
characteristics. A system of preferences established pursuant to this 
subsection shall be based on local housing needs and priorities, as 
determined by the jurisdiction using generally accepted data sources.

SEC. 405. APPLICABILITY OF CERTAIN PROVISIONS.

  (a) Public Housing Demolition and Disposition Requirements.--Section 
261 shall continue to apply to public housing notwithstanding any use 
of the housing under this title.
  (b) Labor Standards.--Section 112 shall apply to housing assisted 
with amounts provided pursuant to this title, other than housing 
assisted solely due to occupancy by families receiving tenant-based 
assistance.

SEC. 406. APPLICATION.

  (a) In General.--The Secretary shall provide for jurisdictions to 
submit applications to receive and use covered housing assistance 
amounts as authorized in this title for periods of not less than 1 and 
not more than 5 fiscal years. An application--
          (1) shall be submitted only after the jurisdiction provides 
        for citizen participation through a public hearing and, if 
        appropriate, other means;
          (2) shall include a plan developed by the jurisdiction for 
        the provision of housing assistance with amounts received 
        pursuant to this title that takes into consideration comments 
        from the public hearing and any other public comments on the 
        proposed program, and comments from current and prospective 
        residents who would be affected, and that includes criteria for 
        meeting each of the requirements under section 404 and this 
        title;
          (3) shall describe how the plan for use of amounts will 
        assist in meeting the goals set forth in section 401;
          (4) shall propose standards for measuring performance in 
        using assistance provided pursuant to this title based on the 
        performance standards under subsection (b)(2);
          (5) shall propose the length of the period for which the 
        jurisdiction is applying for assistance under this title;
          (6) may include a request assistance for training and 
        technical assistance to assist with design of the program and 
        to participate in a detailed evaluation;
          (7) shall--
                  (A) in the case of the application of any 
                jurisdiction within whose boundaries are areas subject 
                to any other unit of general local government, include 
                the signed consent of the appropriate executive 
                official of such unit to the application; and
                  (B) in the case of the application of a consortia of 
                units of general local government (as provided under 
                section 409(1)(B)), include the signed consent of the 
                appropriate executive officials of each unit included 
                in the consortia;
          (8) shall include information sufficient, in the 
        determination of the Secretary--
                  (A) to demonstrate that the jurisdiction has or will 
                have management and administrative capacity sufficient 
                to carry out the plan under paragraph (2);
                  (B) to demonstrate that carrying out the plan will 
                not result in excessive duplication of administrative 
                efforts and costs, particularly with respect to 
                activities performed by public housing agencies 
                operating within the boundaries of the jurisdiction;
                  (C) to describe the function and activities to be 
                carried out by such public housing agencies affected by 
                the plan; and
                  (D) to demonstrate that the amounts received by the 
                jurisdiction will be maintained separate from other 
                funds available to the jurisdiction and will be used 
                only to carry out the plan; and
          (9) shall include information describing how the jurisdiction 
        will make decisions regarding asset management of housing for 
        low-income families under programs for covered housing 
        assistance or assisted with grant amounts under this title.
A plan required under paragraph (2) to be included in the application 
may be contained in a memorandum of agreement or other document 
executed by a jurisdiction and public housing agency, if such document 
is submitted together with the application.
  (b) Review, Approval, and Performance Standards.--
          (1) Review.--The Secretary shall review applications for 
        assistance pursuant to this title and shall approve or 
        disapprove such applications within 60 days after their 
        submission. The Secretary shall provide affected public housing 
        agencies an opportunity to review an application submitted 
        under this subsection and to provide written comments on the 
        application, which shall be a period of not less than 30 days 
        ending before the Secretary approves or disapproves the 
        application. If the Secretary determines that the application 
        complies with the requirements of this title, the Secretary 
        shall offer to enter into an agreement with jurisdiction 
        providing for assistance pursuant to this title and 
        incorporating a requirement that the jurisdiction achieve a 
        particular level of performance in each of the areas for which 
        performance standards are established under paragraph (2). If 
        the Secretary determines that an application does not comply 
        with the requirements of this title, the Secretary shall notify 
        the jurisdiction submitting the application of the reasons for 
        such disapproval and actions that may be taken to make the 
        application approvable.
          (2) Performance standards.--The Secretary shall establish 
        standards for measuring performance of jurisdictions in the 
        following areas:
                  (A) Success in moving dependent low-income families 
                to economic self-sufficiency.
                  (B) Success in reducing the numbers of long-term 
                homeless families.
                  (C) Decrease in the per-family cost of providing 
                assistance.
                  (D) Reduction of excessive geographic concentration 
                of assisted families.
                  (E) Any other performance goals that the Secretary 
                may prescribe.
          (3) Approval.--If the Secretary and a jurisdiction that the 
        Secretary determines has submitted an application meeting the 
        requirements of this title enter into an agreement referred to 
        in paragraph (1), the Secretary shall approve the application 
        and provide covered housing assistance for the jurisdiction in 
        the manner authorized under this title. The Secretary may not 
        approve any application for assistance pursuant to this title 
        unless the Secretary and jurisdiction enter into an agreement 
        referred to in paragraph (1). The Secretary shall establish 
        requirements for the approval of applications under this 
        section submitted by public housing agencies designated under 
        section 533(a) as troubled, which may include additional or 
        different criteria determined by the Secretary to be more 
        appropriate for such agencies.
  (c) Status of PHA's.--Nothing in this section or title may be 
construed to require any change in the legal status of any public 
housing agency or in any legal relationship between a jurisdiction and 
a public housing agency as a condition of participation in the program 
under this title.

SEC. 407. TRAINING.

  The Secretary, in consultation with representatives of public and 
assisted housing interests, shall provide training and technical 
assistance relating to providing assistance under this title and 
conduct detailed evaluations of up to 30 jurisdictions for the purpose 
of identifying replicable program models that are successful at 
carrying out the purposes of this title.

SEC. 408. ACCOUNTABILITY.

  (a) Performance Goals.--The Secretary shall monitor the performance 
of participating jurisdictions in providing assistance pursuant to this 
title based on the performance standards contained in the agreements 
entered into pursuant to section 406(b)(1).
  (b) Keeping Records.--Each participating jurisdiction shall keep such 
records as the Secretary may prescribe as reasonably necessary to 
disclose the amounts and the disposition of amounts provided pursuant 
to this title, to ensure compliance with the requirements of this title 
and to measure performance against the performance goals under 
subsection (a).
  (c) Reports.--Each participating jurisdiction agency shall submit to 
the Secretary a report, or series of reports, in a form and at a time 
specified by the Secretary. The reports shall--
          (1) document the use of funds made available under this 
        title;
          (2) provide such information as the Secretary may request to 
        assist the Secretary in assessing the program under this title; 
        and
          (3) describe and analyze the effect of assisted activities in 
        addressing the purposes of this title.
  (d) Access to Documents by Secretary.--The Secretary shall have 
access for the purpose of audit and examination to any books, 
documents, papers, and records that are pertinent to assistance in 
connection with, and the requirements of, this title.
  (e) Access to Documents by Comptroller General.--The Comptroller 
General of the United States, or any of the duly authorized 
representatives of the Comptroller General, shall have access for the 
purpose of audit and examination to any books, documents, papers, and 
records that are pertinent to assistance in connection with, and the 
requirements of, this title.

SEC. 409. DEFINITIONS.

  For purposes of this title, the following definitions shall apply:
          (1) Jurisdiction.--The term ``jurisdiction'' means--
                  (A) a unit of general local government (as such term 
                is defined in section 104 of the Cranston-Gonzalez 
                National Affordable Housing Act) that has boundaries, 
                for purposes of carrying out this title, that--
                          (i) wholly contain the area within which a 
                        public housing agency is authorized to operate; 
                        and
                          (ii) do not contain any areas contained 
                        within the boundaries of any other 
                        participating jurisdiction; and
                  (B) a consortia of such units of general local 
                government, organized for purposes of this title.
          (2) Participating jurisdiction.--The term ``participating 
        jurisdiction'' means, with respect to a period for which such 
        approval is made, a jurisdiction that has been approved under 
        section 406(b)(3) to receive assistance pursuant to this title 
        for such fiscal year.

    TITLE V--ACCOUNTABILITY AND OVERSIGHT OF PUBLIC HOUSING AGENCIES

Subtitle A--Study of Alternative Methods for Evaluating Public Housing 
                                Agencies

SEC. 501. IN GENERAL.

  The Secretary of Housing and Urban Development shall provide under 
section 505 for a study to be conducted to determine the effectiveness 
of various alternative methods of evaluating the performance of public 
housing agencies and other providers of federally assisted housing.

SEC. 502. PURPOSES.

  The purposes of the study under this subtitle shall be--
          (1) to identify and examine various methods of evaluating and 
        improving the performance of public housing agencies in 
        administering public housing and tenant-based rental assistance 
        programs and of other providers of federally assisted housing, 
        which are alternatives to oversight by the Department of 
        Housing and Urban Development; and
          (2) to identify specific monitoring and oversight activities 
        currently conducted by the Department of Housing and Urban 
        Development that are insufficient or ineffective in accurately 
        and efficiently assessing the performance of public housing 
        agencies and other providers of federally assisted housing, and 
        to evaluate whether such activities should be eliminated, 
        modified, or transferred to other entities (including 
        government and private entities) to increase accuracy and 
        effectiveness and improve monitoring.

SEC. 503. EVALUATION OF VARIOUS PERFORMANCE EVALUATION SYSTEMS.

  To carry out the purpose under section 502(1), the study under this 
subtitle shall identify, and analyze and assess the costs and benefits 
of, the following methods of regulating and evaluating the performance 
of public housing agencies and other providers of federally assisted 
housing:
          (1) Current system.--The system pursuant to the United States 
        Housing Act of 1937 (as in effect upon the enactment of this 
        Act), including the methods and requirements under such system 
        for reporting, auditing, reviewing, sanctioning, and monitoring 
        of such agencies and housing providers and the public housing 
        management assessment program pursuant to subtitle C of this 
        title (and section 6(j) of the United States Housing Act of 
        1937 (as in effect upon the enactment of this Act)).
          (2) Accreditation models.--Various models that are based upon 
        accreditation of such agencies and housing providers, subject 
        to the following requirements:
                  (A) The study shall identify and analyze various 
                models used in other industries and professions for 
                accreditation and determine the extent of their 
                applicability to the programs for public housing and 
                federally assisted housing.
                  (B) If any accreditation models are determined to be 
                applicable to the public and federally assisted housing 
                programs, the study shall identify appropriate goals, 
                objectives, and procedures for an accreditation program 
                for such agencies housing providers.
                  (C) The study shall evaluate the effectiveness of 
                establishing an independent accreditation and 
                evaluation entity to assist, supplement, or replace the 
                role of the Department of Housing and Urban Development 
                in assessing and monitoring the performance of such 
                agencies and housing providers.
                  (D) The study shall identify the necessary and 
                appropriate roles and responsibilities of various 
                entities that would be involved in an accreditation 
                program, including the Department of Housing and Urban 
                Development, the Inspector General of the Department, 
                an accreditation entity, independent auditors and 
                examiners, local entities, and public housing agencies.
                  (E) The study shall determine the costs involved in 
                developing and maintaining such an independent 
                accreditation program.
                  (F) The study shall analyze the need for technical 
                assistance to assist public housing agencies in 
                improving performance and identify the most effective 
                methods to provide such assistance.
          (3) Performance based models.--Various performance-based 
        models, including systems that establish performance goals or 
        targets, assess the compliance with such goals or targets, and 
        provide for incentives or sanctions based on performance 
        relative to such goals or targets.
          (4) Local review and monitoring models.--Various models 
        providing for local, resident, and community review and 
        monitoring of such agencies and housing providers, including 
        systems for review and monitoring by local and State 
        governmental bodies and agencies.
          (5) Private models.--Various models using private contractors 
        for review and monitoring of such agencies and housing 
        providers.
          (6) Other models.--Various models of any other systems that 
        may be more effective and efficient in regulating and 
        evaluating such agencies and housing providers.

SEC. 504. CONSULTATION.

  The entity that, pursuant to section 505, carries out the study under 
this subtitle shall, in carrying out the study, consult with 
individuals and organization experienced in managing public housing, 
private real estate managers, representatives from State and local 
governments, residents of public housing, families and individuals 
receiving choice- or tenant-based assistance, the Secretary of Housing 
and Urban Development, the Inspector General of the Department of 
Housing and Urban Development, and the Comptroller General of the 
United States.

SEC. 505. CONTRACT TO CONDUCT STUDY.

  (a) In General.--Subject to subsection (b), the Secretary shall enter 
into a contract with a public or nonprofit private entity to conduct 
the study under this subtitle, using amounts made available pursuant to 
section 507.
  (b) National Academy of Public Administration.--The Secretary shall 
request the National Academy of Public Administration to enter into the 
contract under paragraph (1) to conduct the study under this subtitle. 
If such Academy declines to conduct the study, the Secretary shall 
carry out such paragraph through other public or nonprofit private 
entities.

SEC. 506. REPORT.

  (a) Interim Report.--The Secretary shall ensure that not later than 
the expiration of the 6-month period beginning on the date of the 
enactment of this Act, the entity conducting the study under this 
subtitle submits to the Congress an interim report describing the 
actions taken to carry out the study, the actions to be taken to 
complete the study, and any findings and recommendations available at 
the time.
  (b) Final Report.--The Secretary shall ensure that--
          (1) not later than the expiration of the 12-month period 
        beginning on the date of the enactment of this Act, the study 
        required under this subtitle is completed and a report 
        describing the findings and recommendations as a result of the 
        study is submitted to the Congress; and
          (2) before submitting the report under this subsection to the 
        Congress, the report is submitted to the Secretary and national 
        organizations for public housing agencies at such time to 
        provide the Secretary and such agencies an opportunity to 
        review the report and provide written comments on the report, 
        which shall be included together with the report upon 
        submission to the Congress under paragraph (1).

SEC. 507. FUNDING.

  Of any amounts made available under title V of the Housing and Urban 
Development Act of 1970 for policy development and research for fiscal 
year 1998, $500,000 shall be available to carry out this subtitle.

SEC. 508. EFFECTIVE DATE.

  This subtitle shall take effect on the date of the enactment of this 
Act.

         Subtitle B--Housing Evaluation and Accreditation Board

SEC. 521. ESTABLISHMENT.

  (a) In General.--There is established an independent agency in the 
executive branch of the Government to be known as the Housing 
Foundation and Accreditation Board (in this title referred to as the 
``Board'').
  (b) Requirement for Congressional Review of Study.--Notwithstanding 
any other provision of this Act, sections 523, 524, and 525 shall not 
take effect and the Board shall not have any authority to take any 
action under such sections (or otherwise) unless there is enacted a law 
specifically providing for the repeal of this subsection. This 
subsection may not be construed to prevent the appointment of the Board 
under section 522.
  (c) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 522. MEMBERSHIP.

  (a) In General.--The Board shall be composed of 12 members appointed 
by the President not later than 180 days after the date of the final 
report regarding the study required under subtitle A is submitted to 
the Congress pursuant to section 506(b), as follows:
          (1) 4 members shall be appointed from among 10 individuals 
        recommended by the Secretary of Housing and Urban Development.
          (2) 4 members shall be appointed from among 10 individuals 
        recommended by the Chairman and Ranking Minority Member of the 
        Committee on Banking, Housing, and Urban Affairs of the Senate.
          (3) 4 members appointed from among 10 individuals recommended 
        by the Chairman and Ranking Minority Member of the Committee on 
        Banking and Financial Services of the House of Representatives.
  (b) Qualifications.--
          (1) Required representation.--The Board shall at all times 
        have the following members:
                  (A) 2 members who are residents of public housing or 
                dwelling units assisted under title III of this Act or 
                the provisions of section 8 of the United States 
                Housing Act of 1937 (as in effect before the effective 
                date of the repeal under section 601(b) of this Act).
                  (B) At least 2, but not more than 4 members who are 
                executive directors of public housing agencies.
                  (C) 1 member who is a member of the Institute of Real 
                Estate Managers.
                  (D) 1 member who is the owner of a multifamily 
                housing project assisted under a program administered 
                by the Secretary of Housing and Urban Development.
          (2) Required experience.--The Board shall at all times have 
        as members individuals with the following experience:
                  (A) At least 1 individual who has extensive 
                experience in the residential real estate finance 
                business.
                  (B) At least 1 individual who has extensive 
                experience in operating a nonprofit organization that 
                provides affordable housing.
                  (C) At least 1 individual who has extensive 
                experience in construction of multifamily housing.
                  (D) At least 1 individual who has extensive 
                experience in the management of a community development 
                corporation.
                  (E) At least 1 individual who has extensive 
                experience in auditing participants in government 
                programs.
        A single member of the board with the appropriate experience 
        may satisfy the requirements of more than 1 subparagraph of 
        this paragraph. A single member of the board with the 
        appropriate qualifications and experience may satisfy the 
        requirements of a subparagraph of paragraph (1) and a 
        subparagraph of this paragraph.
  (c) Political Affiliation.--Not more than 6 members of the Board may 
be of the same political party.
  (d) Terms.--
          (1) In general.--Each member of the Board shall be appointed 
        for a term of 4 years, except as provided in paragraphs (2) and 
        (3).
          (2) Terms of initial appointees.--As designated by the 
        President at the time of appointment, of the members first 
        appointed--
                  (A) 3 shall be appointed for terms of 1 year;
                  (B) 3 shall be appointed for terms of 2 years;
                  (C) 3 shall be appointed for terms of 3 years; and
                  (D) 3 shall be appointed for terms of 4 years.
          (3) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of that term. A member may serve after the 
        expiration of that member's term until a successor has taken 
        office. A vacancy in the Board shall be filled in the manner in 
        which the original appointment was made.
  (e) Chairperson.--The Board shall elect a chairperson from among 
members of the Board.
  (f) Quorum.--A majority of the members of the Board shall constitute 
a quorum for the transaction of business.
  (g) Voting.--Each member of the Board shall be entitled to 1 vote, 
which shall be equal to the vote of every other member of the Board.
  (h) Prohibition on Additional Pay.--Members of the Board shall serve 
without compensation, but shall be reimbursed for travel, subsistence, 
and other necessary expenses incurred in the performance of their 
duties as members of the Board.

SEC. 523. FUNCTIONS.

  The purpose of this subtitle is to establish the Board as a 
nonpolitical entity to carry out, not later than the expiration of the 
12-month period beginning upon the appointment under section 522 of all 
of the initial members of the Board (or such other date as may be 
provided by law), the following functions:
          (1) Establishment of performance benchmarks.--The Board shall 
        establish standards and guidelines for use by the Board in 
        measuring the performance and efficiency of public housing 
        agencies and other owners and providers of federally assisted 
        housing in carrying out operational and financial functions. 
        The standards and guidelines shall be designed to replace the 
        public housing management assessment program under section 6(j) 
        of the United States Housing Act of 1937 (as in effect before 
        the enactment of this Act) and improve the evaluation of the 
        performance of housing providers relative to such program. In 
        establishing such standards and guidelines, the Board shall 
        consult with the Secretary, the Inspector General of the 
        Department of Housing and Urban Development, and such other 
        persons and entities as the Board considers appropriate.
          (2) Establishment of accreditation procedure and 
        accreditation.--The Board shall--
                  (A) establish a procedure for the Board to accredit 
                public housing agencies to receive block grants under 
                title II for the operation, maintenance, and production 
                of public housing and amounts for housing assistance 
                under title III, based on the performance of agencies, 
                as measured by the performance benchmarks established 
                under paragraph (1) and any audits and reviews of 
                agencies; and
                  (B) commence the review and accreditation of public 
                housing agencies under the procedures established under 
                subparagraph (A).
In carrying out the functions under this section, the Board shall take 
into consideration the findings and recommendations contained in the 
report issued under section 506(b).

SEC. 524. POWERS.

  (a) Hearings.--The Board may, for the purpose of carrying out this 
subtitle, hold such hearings and sit and act at such times and places 
as the Board determines appropriate.
  (b) Rules and Regulations.--The Board may adopt such rules and 
regulations as may be necessary to establish its procedures and to 
govern the manner of its operations, organization, and personnel.
  (c) Assistance From Federal Agencies.--
          (1) Information.--The Board may secure directly from any 
        department or agency of the Federal Government such information 
        as the Board may require for carrying out its functions, 
        including public housing agency plans submitted to the 
        Secretary by public housing agencies under title I. Upon 
        request of the Board, any such department or agency shall 
        furnish such information.
          (2) General services administration.--The Administrator of 
        General Services shall provide to the Board, on a reimbursable 
        basis, such administrative support services as the Board may 
        request.
          (3) Department of housing and urban development.--Upon the 
        request of the chairperson of the Board, the Secretary of 
        Housing and Urban Development shall, to the extent possible and 
        subject to the discretion of the Secretary, detail any of the 
        personnel of the Department of Housing and Urban Development, 
        on a nonreimbursable basis, to assist the Board in carrying out 
        its functions under this subtitle.
          (4) HUD inspector general.--The Inspector General of the 
        Department of Housing and Urban Development shall serve the 
        Board as a principal adviser with respect to all aspects of 
        audits of public housing agencies. The Inspector General may 
        advise the Board with respect to other activities and functions 
        of the Board.
  (d) Mails.--The Board may use the United States mails in the same 
manner and under the same conditions as other Federal agencies.
  (e) Contracting.--The Board may, to such extent and in such amounts 
as are provided in appropriation Acts, enter into contracts with 
private firms, institutions, and individuals for the purpose of 
conducting evaluations of public housing agencies, audits of public 
housing agencies, and research and surveys necessary to enable the 
Board to discharge its functions under this subtitle.
  (f) Staff.--
          (1) Executive director.--The Board shall appoint an executive 
        director of the Board, who shall be compensated at a rate fixed 
        by the Board, but which shall not exceed the rate established 
        for level V of the Executive Schedule under title 5, United 
        States Code.
          (2) Other personnel.--In addition to the executive director, 
        the Board may appoint and fix the compensation of such 
        personnel as the Board considers necessary, in accordance with 
        the provisions of title 5, United States Code, governing 
        appointments to the competitive service, and the provisions of 
        chapter 51 and subchapter III of chapter 53 of such title, 
        relating to classification and General Schedule pay rates.
  (g) Access to Documents.--The Board shall have access for the 
purposes of carrying out its functions under this subtitle to any 
books, documents, papers, and records of a public housing agency to 
which the Secretary has access under this Act.

SEC. 525. FEES.

  (a) Accreditation Fees.--The Board may establish and charge 
reasonable fees for the accreditation of public housing agencies as the 
Board considers necessary to cover the costs of the operations of the 
Board relating to its functions under section 523.
  (b) Fund.--Any fees collected under this section shall be deposited 
in an operations fund for the Board, which is hereby established in the 
Treasury of the United States. Amounts in such fund shall be available, 
to the extent provided in appropriation Acts, for the expenses of the 
Board in carrying out its functions under this subtitle.

SEC. 526. GAO AUDIT.

  The activities and transactions of the Board shall be subject to 
audit by the Comptroller General of the United States under such rules 
and regulations as may be prescribed by the Comptroller General. The 
representatives of the General Accounting Office shall have access for 
the purpose of audit and examination to any books, documents, papers, 
and records of the Board that are necessary to facilitate an audit.

    Subtitle C--Interim Applicability of Public Housing Management 
                           Assessment Program

SEC. 531. INTERIM APPLICABILITY.

  This subtitle shall be effective only during the period that begins 
on the effective date of this Act and ends upon the date of the 
effectiveness of the standards and procedures required under section 
523.

SEC. 532. MANAGEMENT ASSESSMENT INDICATORS.

  (a) Establishment.--The Secretary shall develop and publish in the 
Federal Register indicators to assess the management performance of 
public housing agencies and other entities managing public housing 
(including resident management corporations, independent managers 
pursuant to section 236, and management entities pursuant to subtitle 
D). The indicators shall be established by rule under section 553 of 
title 5, United States Code. Such indicators shall enable the Secretary 
to evaluate the performance of public housing agencies and such other 
managers of public housing in all major areas of management operations.
  (b) Content.--The management assessment indicators shall include the 
following indicators:
          (1) The number and percentage of vacancies within an agency's 
        or manager's inventory, including the progress that an agency 
        or manager has made within the previous 3 years to reduce such 
        vacancies.
          (2) The amount and percentage of funds obligated to the 
        public housing agency or manager from the capital fund or under 
        section 14 of the United States Housing Act of 1937 (as in 
        effect before the effective date of the repeal under section 
        601(b) of this Act), which remain unexpended after 3 years.
          (3) The percentage of rents uncollected.
          (4) The energy consumption (with appropriate adjustments to 
        reflect different regions and unit sizes).
          (5) The average period of time that an agency or manager 
        requires to repair and turn-around vacant dwelling units.
          (6) The proportion of maintenance work orders outstanding, 
        including any progress that an agency or manager has made 
        during the preceding 3 years to reduce the period of time 
        required to complete maintenance work orders.
          (7) The percentage of dwelling units that an agency or 
        manager fails to inspect to ascertain maintenance or 
        modernization needs within such period of time as the Secretary 
        deems appropriate (with appropriate adjustments, if any, for 
        large and small agencies or managers).
          (8) The extent to which the rent policies of any public 
        housing agency establishing rental amounts in accordance with 
        section 225(b) comply with the requirement under section 
        225(c).
          (9) Whether the agency is providing acceptable basic housing 
        conditions, as determined by the Secretary.
          (10) Any other factors as the Secretary deems appropriate.
  (c) Considerations in Evaluation.--The Secretary shall--
          (1) administer the system of evaluating public housing 
        agencies and managers flexibly to ensure that agencies and 
        managers are not penalized as result of circumstances beyond 
        their control;
          (2) reflect in the weights assigned to the various management 
        assessment indicators the differences in the difficulty of 
        managing individual developments that result from their 
        physical condition and their neighborhood environment; and
          (3) determine a public housing agency's or manager's status 
        as ``troubled with respect to modernization'' under section 
        533(b) based upon factors solely related to its ability to 
        carry out modernization activities.

SEC. 533. DESIGNATION OF PHA'S.

  (a) Troubled PHA's.--The Secretary shall, under the rulemaking 
procedures under section 553 of title 5, United States Code, establish 
procedures for designating troubled public housing agencies and 
managers, which procedures shall include identification of serious and 
substantial failure to perform as measured by (1) the performance 
indicators specified under section 532 and such other factors as the 
Secretary may deem to be appropriate; or (2) such other evaluation 
system as is determined by the Secretary to assess the condition of the 
public housing agency or other entity managing public housing, which 
system may be in addition to or in lieu of the performance indicators 
established under section 532. Such procedures shall provide that an 
agency that does not provide acceptable basic housing conditions shall 
be designated a troubled public housing agency.
  (b) Agencies Troubled With Respect to Capital Activities.--The 
Secretary shall designate, by rule under section 553 of title 5, United 
States Code, agencies and managers that are troubled with respect to 
capital activities.
  (c) Agencies at Risk of Becoming Troubled.--The Secretary shall 
designate, by rule under section 553 of title 5, United States Code, 
agencies and managers that are at risk of becoming troubled.
  (d) Exemplary Agencies.--The Secretary may also, in consultation with 
national organizations representing public housing agencies and 
managers and public officials (as the Secretary determines 
appropriate), identify and commend public housing agencies and managers 
that meet the performance standards established under section 532 in an 
exemplary manner.
  (e) Appeal of Designation.--The Secretary shall establish procedures 
for public housing agencies and managers to appeal designation as a 
troubled agency or manager (including designation as a troubled agency 
or manager for purposes of capital activities), to petition for removal 
of such designation, and to appeal any refusal to remove such 
designation.

SEC. 534. ON-SITE INSPECTION OF TROUBLED PHA'S.

  (a) In General.--Upon designating a public housing agency or manager 
as troubled pursuant to section 533 and determining that an assessment 
under this section will not duplicate any other review previously 
conducted or required to be conducted of the agency or manager, the 
Secretary shall provide for an on-site, independent assessment of the 
management of the agency or manager.
  (b) Content.--To the extent the Secretary deems appropriate (taking 
into consideration an agency's or manager's performance under the 
indicators specified under section 532, the assessment team shall also 
consider issues relating to the agency's or manager's resident 
population and physical inventory, including the extent to which--
          (1) the public housing agency plan for the agency or manager 
        adequately and appropriately addresses the rehabilitation needs 
        of the public housing inventory;
          (2) residents of the agency or manager are involved in and 
        informed of significant management decisions; and
          (3) any developments in the agency's or manager's inventory 
        are severely distressed (as such term is defined under section 
        262.
  (c) Independent Assessment Team.--An independent assessment under 
this section shall be carried out by a team of knowledgeable 
individuals selected by the Secretary (referred to in this title as the 
``assessment team'') with expertise in public housing and real estate 
management. In conducting an assessment, the assessment team shall 
consult with the residents and with public and private entities in the 
jurisdiction in which the public housing is located. The assessment 
team shall provide to the Secretary and the public housing agency or 
manager a written report, which shall contain, at a minimum, 
recommendations for such management improvements as are necessary to 
eliminate or substantially remedy existing deficiencies.

SEC. 535. ADMINISTRATION.

  (a) PHA's.--The Secretary shall carry out this subtitle with respect 
to public housing agencies substantially in the same manner as the 
public housing management assessment system under section 6(j) of the 
United States Housing Act of 1937 (as in effect immediately before the 
effective date of the repeal under section 601(b) of this Act) was 
required to be carried out with respect to public housing agencies. The 
Secretary may comply with the requirements under this subtitle by using 
any regulations issued to carry out such system and issuing any 
additional regulations necessary to make such system comply with the 
requirements under this subtitle.
  (b) Other Managers.--The Secretary shall establish specific standards 
and procedures for carrying out this subtitle with respect to managers 
of public housing that are not public housing agencies. Such standards 
and procedures shall take in consideration special circumstances 
relating to entities hired, directed, or appointed to manage public 
housing.

   Subtitle D--Accountability and Oversight Standards and Procedures

SEC. 541. AUDITS.

  (a) By Secretary and Comptroller General.--Each block grant contract 
under section 201 and each contract for housing assistance amounts 
under section 302 shall provide that the Secretary, the Inspector 
General of the Department of Housing and Urban Development, andthe 
Comptroller General of the United States, or any of their duly 
authorized representatives, shall, for the purpose of audit and 
examination, have access to any books, documents, papers, and records 
of the public housing agency (or other entity) entering into such 
contract that are pertinent to this Act and to its operations with 
respect to financial assistance under the this Act.
  (b) By PHA.--
          (1) Requirement.--Each public housing agency that owns or 
        operates 250 or more public housing dwelling units and receives 
        assistance under this Act shall have an audit made in 
        accordance with chapter 75 of title 31, United States Code. The 
        Secretary, the Inspector General of the Department of Housing 
        and Urban Development, and the Comptroller General of the 
        United States shall have access to all books, documents, 
        papers, or other records that are pertinent to the activities 
        carried out under this Act in order to make audit examinations, 
        excerpts, and transcripts.
          (2) Withholding of amounts.--The Secretary may, in the sole 
        discretion of the Secretary, arrange for, and pay the costs of, 
        an audit required under paragraph (1). In such circumstances, 
        the Secretary may withhold, from assistance otherwise payable 
        to the agency under this Act, amounts sufficient to pay for the 
        reasonable costs of conducting an acceptable audit, including, 
        when appropriate, the reasonable costs of accounting services 
        necessary to place the agency's books and records in auditable 
        condition.

SEC. 542. PERFORMANCE AGREEMENTS FOR AUTHORITIES AT RISK OF BECOMING 
                    TROUBLED.

  (a) In General.--Upon designation of a public housing agency as at 
risk of becoming troubled under section 533(c), the Secretary shall 
seek to enter into an agreement with the agency providing for 
improvement of the elements of the agency that have been identified. An 
agreement under this section shall contain such terms and conditions as 
the Secretary determines are appropriate for addressing the elements 
identified, which may include an on-site, independent assessment of the 
management of the agency.
  (b) Powers of Secretary.--If the Secretary determines that such 
action is necessary to prevent the public housing agency from becoming 
a troubled agency, the Secretary may--
          (1) solicit competitive proposals from other public housing 
        agencies and private housing management agents (which may be 
        selected by existing tenants through administrative procedures 
        established by the Secretary), for any case in which such 
        agents may be needed for managing all, or part, of the housing 
        or functions administered by the agency; or
          (2) solicit competitive proposals from other public housing 
        agencies and private entities with experience in construction 
        management, for any case in which such authorities or firms may 
        be needed to oversee implementation of assistance made 
        available for capital improvement for public housing of the 
        agency.

SEC. 543. PERFORMANCE AGREEMENTS AND CDBG SANCTIONS FOR TROUBLED PHA'S.

  (a) In General.--Upon designation of a public housing agency as a 
troubled agency under section 533(a) and after reviewing the report 
submitted pursuant to section 534(c) and consulting with the assessment 
team for the agency under section 534, the Secretary shall seek to 
enter into an agreement with the agency providing for improving the 
management performance of the agency.
  (b) Contents.--An agreement under this section between the Secretary 
and a public housing agency shall set forth--
          (1) targets for improving performance, as measured by the 
        guidelines and standards established under section 532 and 
        other requirements within a specified period of time, which 
        shall include targets to be met upon the expiration of the 12-
        month period beginning upon entering into the agreement;
          (2) strategies for meeting such targets;
          (3) sanctions for failure to implement such strategies; and
          (4) to the extent the Secretary deems appropriate, a plan for 
        enhancing resident involvement in the management of the public 
        housing agency.
  (c) Local Assistance in Implementation.--The Secretary and the public 
housing agency shall, to the maximum extent practicable, seek the 
assistance of local public and private entities in carrying out an 
agreement under this section.
  (d) Default Under Performance Agreement.--Upon the expiration of the 
12-month period beginning upon entering into an agreement under this 
section with a public housing agency, the Secretary shall review the 
performance of the agency in relation to the performance targets and 
strategies under the agreement. If the Secretary determines that the 
agency has failed to comply with the performance targets established 
for such period, the Secretary shall take the action authorized under 
subsection (b)(2) or (b)(5) of section 545.
  (e) CDBG Sanction Against Local Government Contributing to Troubled 
Status of PHA.--If the Secretary determines that the actions or 
inaction of any unit of general local government within which any 
portion of the jurisdiction of a public housing agency is located has 
substantially contributed to the conditions resulting in the agency 
being designated under section 533(a) as a troubled agency, the 
Secretary may redirect or withhold, from such unit of general local 
government any amounts allocated for such unit under section 106 of the 
Housing and Community Development Act of 1974.

SEC. 544. OPTION TO DEMAND CONVEYANCE OF TITLE TO OR POSSESSION OF 
                    PUBLIC HOUSING.

  (a) Authority for Conveyance.--A contract under section 201 for block 
grants under title II (including contracts which amend or supersede 
contracts previously made (including contracts for contributions)) may 
provide that upon the occurrence of a substantial default with respect 
to the covenants or conditions to which the public housing agency is 
subject (as such substantial default shall be defined in such 
contract), the public housing agency shall be obligated, at the option 
of the Secretary, to--
          (1) convey title in any case where, in the determination of 
        the Secretary (which determination shall be final and 
        conclusive), such conveyance of title is necessary to achieve 
        the purposes of this Act; or
          (2) deliver to the Secretary possession of the development, 
        as then constituted, to which such contract relates.
  (b) Obligation to Reconvey.--Any block grant contract under title II 
containing the provisions authorized in subsection (a) shall also 
provide that the Secretary shall be obligated to reconvey or redeliver 
possession of the development, as constituted at the time of 
reconveyance or redelivery, to such public housing agency or to its 
successor (if such public housing agency or a successor exists) upon 
such terms as shall be prescribed in such contract, and as soon as 
practicable after--
          (1) the Secretary is satisfied that all defaults with respect 
        to the development have been cured, and that the development 
        will, in order to fulfill the purposes of this Act, thereafter 
        be operated in accordance with the terms of such contract; or
          (2) the termination of the obligation to make annual block 
        grants to the agency, unless there are any obligations or 
        covenants of the agency to the Secretary which are then in 
        default.
Any prior conveyances and reconveyances or deliveries and redeliveries 
of possession shall not exhaust the right to require a conveyance or 
delivery of possession of the development to the Secretary pursuant to 
subsection (a) upon the subsequent occurrence of a substantial default.
  (c) Continued Grants for Repayment of Bonds and Notes Under 1937 
Act.--If--
          (1) a contract for block grants under title II for an agency 
        includes provisions that expressly state that the provisions 
        are included pursuant to this subsection, and
          (2) the portion of the block grant payable for debt service 
        requirements pursuant to the contract has been pledged by the 
        public housing agency as security for the payment of the 
        principal and interest on any of its obligations, then--
                  (A) the Secretary shall (notwithstanding any other 
                provisions of this Act), continue to make the block 
                grant payments for the agency so long as any of such 
                obligations remain outstanding; and
                  (B) the Secretary may covenant in such a contract 
                that in any event such block grant amounts shall in 
                each year be at least equal to an amount which, 
                together with such income or other funds as are 
                actually available from the development for the purpose 
                at the time such block grant payments are made, will 
                suffice for the payment of all installments of 
                principal and interest on the obligations for which the 
                amounts provided for in the contract shall have been 
                pledged as security that fall due within the next 
                succeeding 12 months.
In no case shall such block grant amounts be in excess of the maximum 
sum specified in the contract involved, nor for longer than the 
remainder of the maximum period fixed by the contract.

SEC. 545. REMOVAL OF INEFFECTIVE PHA'S.

  (a) Conditions of Removal.--The actions specified in subsection (b) 
may be taken only upon--
          (1) the occurrence of events or conditions that constitute a 
        substantial default by a public housing agency with respect to 
        (A) the covenants or conditions to which the public housing 
        agency is subject, or (B) an agreement entered into under 
        section 543; or
          (2) submission to the Secretary of a petition by the 
        residents of the public housing owned or operated by a public 
        housing agency that is designated as troubled pursuant to 
        section 533(a).
  (b) Removal Actions.--Notwithstanding any other provision of law or 
of any block grant contract under title II or any grant agreement under 
title III, in accordance with subsection (a), the Secretary may--
          (1) solicit competitive proposals from other public housing 
        agencies and private housing management agents (which, in the 
        discretion of the Secretary, may be selected by existing public 
        housing residents through administrative procedures established 
        by the Secretary) and, if appropriate, provide for such agents 
        to manage all, or part, of the housing administered by the 
        public housing agency or all or part of the other functions of 
        the agency;
          (2) take possession of the public housing agency, including 
        any developments or functions of the agency under any section 
        of this Act;
          (3) solicit competitive proposals from other public housing 
        agencies and private entities with experience in construction 
        management and, if appropriate, provide for such authorities or 
        firms to oversee implementation of assistance made available 
        for capital improvements for public housing;
          (4) require the agency to make other arrangements acceptable 
        to the Secretary and in the best interests of the public 
        housing residents and assisted families under title III for 
        managing all, or part of, the public housing administered by 
        the agency or the functions of the agency; or
          (5) petition for the appointment of a receiver for the public 
        housing agency to any district court of the United States or to 
        any court of the State in which any portion of the jurisdiction 
        of the public housing agency is located, that is authorized to 
        appoint a receiver for the purposes and having the powers 
        prescribed in this section.
  (c) Emergency Assistance.--The Secretary may make available to 
receivers and other entities selected or appointed pursuant to this 
section such assistance as is fair and reasonable to remedy the 
substantial deterioration of living conditions in individual public 
housing developments or other related emergencies that endanger the 
health, safety and welfare of public housing residents or assisted 
families under title III.
  (d) Powers of Secretary.--If the Secretary takes possession of an 
agency, or any developments or functions of an agency, pursuant to 
subsection (b)(2), the Secretary--
          (1) may abrogate contracts that substantially impede 
        correction of the substantial default or improvement of the 
        classification, but only after efforts to renegotiate such 
        contracts have failed and the Secretary has made a written 
        determination regarding such abrogation, which shall be 
        available to the public upon request, identify such contracts, 
        and explain the determination that such contracts may be 
        abrogated;
          (2) may demolish and dispose of assets of the agency in 
        accordance with section 261;
          (3) where determined appropriate by the Secretary, may 
        require the establishment of one or more new public housing 
        agencies;
          (4) may consolidate the agency into other well-managed public 
        housing agencies with the consent of such well-managed 
        authorities;
          (5) shall not be subject to any State or local laws relating 
        to civil service requirements, employee rights, procurement, or 
        financial or administrative controls that, in the determination 
        of the Secretary, substantially impede correction of the 
        substantial default or improvement of the classification, but 
        only if the Secretary has made a written determination 
        regarding such inapplicability, which shall be available to the 
        public upon request, identify such inapplicable laws, and 
        explain the determination that such laws impede such 
        correction; and
          (6) shall have such additional authority as a district court 
        of the United States has the authority to confer under like 
        circumstances upon a receiver to achieve the purposes of the 
        receivership.
The Secretary may appoint, on a competitive or noncompetitive basis, an 
individual or entity as an administrative receiver to assume the 
Secretary's responsibility under this paragraph for the administration 
of a public housing agency. The Secretary may delegate to the 
administrative receiver any or all of the powers of the Secretary under 
this subsection. Regardless of any delegation under this subsection, an 
administrative receiver may not require the establishment of one or 
more new public housing agencies pursuant to paragraph (3) unless the 
Secretary first approves such establishment. For purposes of this 
subsection, the term ``public housing agency'' includes any 
developments or functions of a public housing agency under any section 
of this title.
  (e) Receivership.--
          (1) Required appointment.--In any proceeding under subsection 
        (b)(5), upon a determination that a substantial default has 
        occurred, and without regard to the availability of alternative 
        remedies, the court shall appoint a receiver to conduct the 
        affairs of the public housing agency in a manner consistent 
        with this Act and in accordance with such further terms and 
        conditions as the court may provide. The receiver appointed may 
        be another public housing agency, a private management 
        corporation, the Secretary, or any other appropriate entity. 
        The court shall have power to grant appropriate temporary or 
        preliminary relief pending final disposition of the petition by 
        the Secretary.
          (2) Powers of receiver.--If a receiver is appointed for a 
        public housing agency pursuant to subsection (b)(5), in 
        addition to the powers accorded by the court appointing the 
        receiver, the receiver--
                  (A) may abrogate contracts that substantially impede 
                correction of the substantial default or improvement of 
                the classification, but only after bona fide efforts to 
                renegotiate such contracts have failed and the receiver 
                has made a written determination regarding such 
                abrogation, which shall be available to the public upon 
                request, identify such contracts, and explain the 
                determination that such contracts may be abrogated;
                  (B) may demolish and dispose of assets of the agency 
                in accordance with section 261;
                  (C) where determined appropriate by the Secretary, 
                may require the establishment of one or more new public 
                housing agencies, to the extent permitted by State and 
                local law; and
                  (D) except as provided in subparagraph (C), shall not 
                be subject to any State or local laws relating to civil 
                service requirements, employee rights, procurement, or 
                financial or administrative controls that, in the 
                determination of the receiver, substantially impede 
                correction of the substantial default or improvement of 
                the classification, but only if the receiver has made a 
                written determination regarding such inapplicability, 
                which shall be available to the public upon request, 
                identify such inapplicable laws, and explain the 
                determination that such laws impede such correction.
        For purposes of this paragraph, the term ``public housing 
        agency'' includes any developments or functions of a public 
        housing agency under any section of this title.
          (3) Termination.--The appointment of a receiver pursuant to 
        this subsection may be terminated, upon the petition of any 
        party, when the court determines that all defaults have been 
        cured or the public housing agency will be able to make the 
        same amount of progress in correcting the management of the 
        housing as the receiver.
  (f) Liability.--If the Secretary takes possession of an agency 
pursuant to subsection (b)(2) or a receiver is appointed pursuant to 
subsection (b)(5) for a public housing agency, the Secretary or the 
receiver shall be deemed to be acting in the capacity of the public 
housing agency (and not in the official capacity as Secretary or other 
official) and any liability incurred shall be a liability of the public 
housing agency.
  (g) Effectiveness.--The provisions of this section shall apply with 
respect to actions taken before, on, or after the effective date of 
this Act and shall apply to any receivers appointed for a public 
housing agency before the effective date of this Act.

SEC. 546. MANDATORY TAKEOVER OF CHRONICALLY TROUBLED PHA'S.

  (a) Removal of Agency.--Notwithstanding any other provision of this 
Act, not later than the expiration of the 180-day period beginning on 
the effective date of this Act, the Secretary shall take one of the 
following actions with respect to each chronically troubled public 
housing agency:
          (1) Contracting for management.--Solicit competitive 
        proposals for the management of the agency pursuant to section 
        545(b)(1) and replace the management of the agency pursuant to 
        selection of such a proposal.
          (2) Takeover.--Take possession of the agency pursuant to 
        section 545(b)(2) of such Act.
          (3) Petition for receiver.--Petition for the appointment of a 
        receiver for the agency pursuant to section 545(b)(5).
  (b) Definition.--For purposes of this section, the term ``chronically 
troubled public housing agency'' means a public housing agency that, as 
of the effective date of this Act, is designated under section 6(j)(2) 
of the United States Housing Act of 1937 (as in effect immediately 
before the effective date of the repeal under section 601(b) of this 
Act) as a troubled public housing agency and has been so designated 
continuously for the 3-year period ending upon the effective date of 
this Act; except that such term does not include any agency that owns 
or operates less than 1250 public housing dwelling units and that the 
Secretary determines can, with a reasonable amount of effort, make such 
improvements or remedies as may be necessary to remove its designation 
as troubled within 12 months.

SEC. 547. TREATMENT OF TROUBLED PHA'S.

  (a) Effect of Troubled Status on CHAS.--The comprehensive housing 
affordability strategy (or any consolidated plan incorporating such 
strategy) for the State or unit of general local government in which 
any troubled public housing agency is located shall not be considered 
to comply with the requirements under section 105 of the Cranston-
Gonzalez National Affordable Housing Act unless such plan includes a 
description of the manner in which the State or unit will assist such 
troubled agency in improving its operations to remove such designation.
  (b) Definition.--For purposes of this section, the term ``troubled 
public housing agency'' means a public housing agency that--
          (1) upon the effective date of this Act, is designated under 
        section 6(j)(2) of the United States Housing Act of 1937 (as in 
        effect immediately before theeffective date of the repeal under 
section 601(b) of this Act) as a troubled public housing agency; and
          (2) is not a chronically troubled public housing agency, as 
        such term is defined in section 546(b) of this Act.

SEC. 548. MAINTENANCE OF RECORDS.

  Each public housing agency shall keep such records as may be 
reasonably necessary to disclose the amount and the disposition by the 
agency of the proceeds of assistance received pursuant to this Act and 
to ensure compliance with the requirements of this Act.

SEC. 549. ANNUAL REPORTS REGARDING TROUBLED PHA'S.

  The Secretary shall submit a report to the Congress annually, as a 
part of the report of the Secretary under section 8 of the Department 
of Housing and Urban Development Act, that--
          (1) identifies the public housing agencies that are 
        designated under section 533 as troubled or at-risk of becoming 
        troubled and the reasons for such designation; and
          (2) describes any actions that have been taken in accordance 
        with sections 542, 543, 544, and 545.

SEC. 550. APPLICABILITY TO RESIDENT MANAGEMENT CORPORATIONS.

  The Secretary shall apply the provisions of this subtitle to resident 
management corporations in the same manner as applied to public housing 
agencies.

SEC. 551. ADVISORY COUNCIL FOR HOUSING AUTHORITY OF NEW ORLEANS.

  (a) Establishment.--The Secretary and the Housing Authority of New 
Orleans (in this section referred to as the ``Housing Authority'') 
shall, pursuant to the cooperative endeavor agreement in effect between 
the Secretary and the Housing Authority, establish an advisory council 
for the Housing Authority of New Orleans (in this section referred to 
as the ``advisory council'') that complies with the requirements of 
this section.
  (b) Membership.--
          (1) In general.--The advisory council shall be appointed by 
        the Secretary, not later than 90 days after the date of the 
        enactment of this Act, and shall be composed of the following 
        members:
                  (A) The Inspector General of the Department of 
                Housing and Urban Development (or the Inspector 
                General's designee).
                  (B) Not more than 7 other members, who shall be 
                selected for appointment based on their experience in 
                successfully reforming troubled public housing agencies 
                or in providing affordable housing in coordination with 
                State and local governments, the private sector, 
                affordable housing residents, or local nonprofit 
                organizations.
          (2) Prohibition on additional pay.--Members of the advisory 
        council shall serve without compensation, but shall be 
        reimbursed for travel, subsistence, and other necessary 
        expenses incurred in the performance of their duties as members 
        of the Board using amounts from the Headquarters Reserve fund 
        pursuant to section 111(b)(4).
  (c) Functions.--The advisory council shall--
          (1) establish standards and guidelines for assessing the 
        performance of the Housing Authority in carrying out 
        operational, asset management, and financial functions for 
        purposes of the reports and finding under subsections (d) and 
        (e), respectively;
          (2) provide advice, expertise, and recommendations to the 
        Housing Authority regarding the management, operation, repair, 
        redevelopment, revitalization, demolition, and disposition of 
        public housing developments of the Housing Authority;
          (3) report to the Congress under subsection (d) regarding any 
        progress of the Housing Authority in improving the performance 
        of its functions; and
          (4) make a final finding to the Congress under subsection (e) 
        regarding the future of the Housing Authority.
  (d) Quarterly Reports.--The advisory council shall report to the 
Congress and the Secretary not less than every 3 months regarding the 
performance of the Housing Authority and any progress of the authority 
in improving its performance and carrying out its functions.
  (e) Final Finding.--Upon the expiration of the 18-month period that 
begins upon the appointment under subsection (b)(1) of all members of 
the advisory council, the council shall make and submit to the Congress 
and the Secretary a finding of whether the Housing Authority has 
substantially improved its performance, the performance of its 
functions, and the overall condition of the Authority such that the 
Authority should be allowed to continue to operate as the manager of 
the public housing of the Authority. In making the finding under this 
subsection, the advisory council shall consider whether the Housing 
Authority has made sufficient progress in the demolition and 
revitalization of the Desire Homes development, the revitalization of 
the St. Thomas Homes development, the appropriate allocation of 
operating subsidy amounts, and the appropriate expending of 
modernization amounts.
  (f) Receivership.--If the advisory council finds under subsection (e) 
that the Housing Authority has not substantially improved its 
performance such that the Authority should be allowed to continue to 
operate as the manager of the public housing of the Authority, the 
Secretary shall (notwithstanding section 545(a)) petition under section 
545(b) for the appointment of a receiver for the Housing Authority, 
which receivership shall be subject to the provisions of section 545.
  (g) Exemption.--The provisions of section 546 shall not apply to the 
Housing Authority.

                TITLE VI--REPEALS AND RELATED AMENDMENTS

      Subtitle A--Repeals, Effective Date, and Savings Provisions

SEC. 601. EFFECTIVE DATE AND REPEAL OF UNITED STATES HOUSING ACT OF 
                    1937.

  (a) Effective Date.--
          (1) In general.--This Act and the amendments made by this Act 
        shall take effect upon the expiration of the 6-month period 
        beginning on the date of the enactment of this Act, except as 
        otherwise provided in this section.
          (2) Exception.--If the Secretary determines that action under 
        this paragraph is necessary for program administration or to 
        avoid hardship, the Secretary may, by notice in accordance with 
        subsection (d), delay the effective date of any provision of 
        this Act until a date not later than October 1, 1998.
          (3) Specific effective dates.--Any provision of this Act that 
        specifically provides for the effective date of such provision 
        shall take effect in accordance with the terms of the 
        provision.
  (b) Repeal of United States Housing Act of 1937.--Effective upon the 
effective date under subsection (a)(1), the United States Housing Act 
of 1937 (42 U.S.C. 1437 et seq.) is repealed, subject to the conditions 
under subsection (c). Subsection (a)(2) shall not apply to this 
subsection.
  (c) Savings Provisions.--
          (1) Obligations under 1937 act.--Any obligation of the 
        Secretary made under authority of the United States Housing Act 
        of 1937 shall continue to be governed by the provisions of such 
        Act, except that--
                  (A) notwithstanding the repeal of such Act, the 
                Secretary may make a new obligation under such Act upon 
                finding that such obligation is required--
                          (i) to protect the financial interests of the 
                        United States or the Department of Housing and 
                        Urban Development; or
                          (ii) for the amendment, extension, or renewal 
                        of existing obligations; and
                  (B) notwithstanding the repeal of such Act, the 
                Secretary may, in accordance with subsection (d), issue 
                regulations and other guidance and directives as if 
                such Act were in effect if the Secretary finds that 
                such action is necessary to facilitate the 
                administration of obligations under such Act.
          (2) Transition of funding.--Amounts appropriated under the 
        United States Housing Act of 1937 shall, upon repeal of such 
        Act, remain available for obligation under such Act in 
        accordance with the terms under which amounts were made 
        available.
          (3) Cross references.--The provisions of the United States 
        Housing Act of 1937 shall remain in effect for purposes of the 
        validity of any reference to a provision of such Act in any 
        statute (other than such Act) until such reference is modified 
        by law or repealed.
  (d) Publication and Effective Date of Notices of Delay.--
          (1) Submission to congress.--The Secretary shall submit to 
        the Committee on Banking and Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate a copy of anyproposed notice under 
subsection (a)(2) or any proposed regulation, guidance, or directive 
under subsection (c)(1)(B).
          (2) Opportunity to review.--Such a regulation, notice, 
        guidance, or directive may not be published for comment or for 
        final effectiveness before or during the 15-calendar day period 
        beginning on the day after the date on which such regulation, 
        notice, guidance, or directive was submitted to the Congress.
          (3) Effective date.--No regulation, notice, guideline, or 
        directive may become effective until after the expiration of 
        the 30-calendar day period beginning on the day after the day 
        on which such rule or regulation is published as final.
          (4) Waiver.--The provisions of paragraphs (2) and (3) may be 
        waived upon the written request of the Secretary, if agreed to 
        by the Chairmen and Ranking Minority Members of both 
        Committees.
  (e) Modifications.--Notwithstanding any provision of this Act or any 
annual contributions contract or other agreement entered into by the 
Secretary and a public housing agency pursuant to the provisions of the 
United States Housing Act of 1937 (as in effect before the effective 
date of the repeal under section 601(b) of this Act), the Secretary and 
the agency may by mutual consent amend, supersede, or modify any such 
agreement as appropriate to provide for assistance under this Act, 
except that the Secretary and the agency may not consent to any such 
amendment, supersession, or modification that substantially alters any 
outstanding obligations requiring continued maintenance of the low-
income character of any public housing development and any such 
amendment, supersession, or modification shall not be given effect.
  (f) Section 8 Project-Based Assistance.--
          (1) In general.--The provisions of the United States Housing 
        Act of 1937 (42 U.S.C. 1437 et seq.) shall remain in effect 
        after the effectiveness of the repeal under subsection (b) with 
        respect to all section 8 project-based assistance, pursuant to 
        existing and future contracts, except as otherwise provided by 
        this section.
          (2) Tenant selection preferences.--An owner of housing 
        assisted with section 8 project-based assistance shall give 
        preference, in the selection of tenants for units of such 
        projects that become available, according to any system of 
        local preferences established pursuant to section 223 by the 
        public housing agency having jurisdiction for the area in which 
        such projects are located.
          (3) 1-year notification.--Paragraphs (9) and (10) of section 
        8(c) of the United States Housing Act of 1937 (42 U.S.C. 
        1437f(c)) shall not be applicable to section 8 project-based 
        assistance.
          (4) Lease terms.--Leases for dwelling units assisted with 
        section 8 project-based assistance shall comply with the 
        provisions of paragraphs (1) and (3) of section 324 of this Act 
        and shall not be subject to the provisions of 8(d)(1)(B) of the 
        United States Housing Act of 1937.
          (5) Termination of tenancy.--Any termination of tenancy of a 
        resident of a dwelling unit assisted with section 8 project-
        based assistance shall comply with the provisions of section 
        324(2) and section 325 of this Act and shall not be subject to 
        the provisions of section 8(d)(1)(B) of the United States 
        Housing Act of 1937.
          (6) Definition.--For purposes of this subsection, the term 
        ``section 8 project-based assistance'' means assistance under 
        any of the following programs:
                  (A) The new construction or substantial 
                rehabilitation program under section 8(b)(2) of the 
                United States Housing Act of 1937 (as in effect before 
                October 1, 1983).
                  (B) The property disposition program under section 
                8(b) of the United States Housing Act of 1937 (as in 
                effect before the effective date of the repeal under 
                section 601(b) of this Act).
                  (C) The loan management set-aside program under 
                subsections (b) and (v) of section 8 of such Act.
                  (D) The project-based certificate program under 
                section 8(d)(2) of such Act.
                  (E) The moderate rehabilitation program under section 
                8(e)(2) of the United States Housing Act of 1937 (as in 
                effect before October 1, 1991).
                  (F) The low-income housing preservation program under 
                Low-Income Housing Preservation and Resident 
                Homeownership Act of 1990 or the provisions of the 
                Emergency Low Income Housing Preservation Act of 1987 
                (as in effect before November 28, 1990).
                  (G) Section 8 of the United States Housing Act of 
                1937 (as in effect before the effective date of the 
                repeal under section 601(b) of this Act), following 
                conversion from assistance under section 101 of the 
                Housing and Urban Development Act of 1965 or section 
                236(f)(2) of the National Housing Act.
  (g) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 602. OTHER REPEALS.

  (a) In General.--The following provisions of law are hereby repealed:
          (1) Assisted housing allocation.--Section 213 of the Housing 
        and Community Development Act of 1974 (42 U.S.C. 1439).
          (2) Public housing rent waivers for police.--Section 519 of 
        the Cranston-Gonzalez National Affordable Housing Act (42 
        U.S.C. 1437a-1).
          (3) Treatment of certificate and voucher holders.--Subsection 
        (c) of section 183 of the Housing and Community Development Act 
        of 1987 (42 U.S.C. 1437f note).
          (4) Excessive rent burden data.--Subsection (b) of section 
        550 of the Cranston-Gonzalez National Affordable Housing Act 
        (42 U.S.C. 1437f note).
          (5) Moving to opportunity for fair housing.--Section 152 of 
        the Housing and Community Development Act of 1992 (42 U.S.C. 
        1437f note).
          (6) Report regarding fair housing objectives.--Section 153 of 
        the Housing and Community Development Act of 1992 (42 U.S.C. 
        1437f note).
          (7) Special projects for elderly or handicapped families.--
        Section 209 of the Housing and Community Development Act of 
        1974 (42 U.S.C. 1438).
          (8) Access to pha books.--Section 816 of the Housing Act of 
        1954 (42 U.S.C. 1435).
          (9) Miscellaneous provisions.--Subsections (b)(1) and (d) of 
        section 326 of the Housing and Community Development Amendments 
        of 1981 (Public Law 97-35, 95 Stat. 406; 42 U.S.C. 1437f note).
          (10) Payment for development managers.--Section 329A of the 
        Housing and Community Development Amendments of 1981 (42 U.S.C. 
        1437j-1).
          (11) Procurement of insurance by pha's.--In the item relating 
        to ``administrative provisions'' under the heading ``Management 
        and Administration'' in title II of the Departments of Veterans 
        Affairs and Housing and Urban Development, and Independent 
        Agencies Appropriations Act, 1991, the penultimate undesignated 
        paragraph of such item (Public Law 101-507; 104 Stat. 1369).
          (12) Public housing childhood development.--Section 222 of 
        the Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 
        1701z-6 note).
          (13) Indian housing childhood development.--Section 518 of 
        the Cranston-Gonzalez National Affordable Housing Act (12 
        U.S.C. 1701z-6 note).
          (14) Public housing comprehensive transition demonstration.--
        Section 126 of the Housing and Community Development Act of 
        1987 (42 U.S.C. 1437f note).
          (15) Public housing one-stop perinatal services 
        demonstration.--Section 521 of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 1437t note).
          (16) Public housing mincs demonstration.--Section 522 of the 
        Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
        1437f note).
          (17) Public housing energy efficiency demonstration.--Section 
        523 of the Cranston-Gonzalez National Affordable Housing Act 
        (42 U.S.C. 1437g note).
          (18) Omaha homeownership demonstration.--Section 132 of the 
        Housing and Community Development Act of 1992 (Public Law 102-
        550; 106 Stat. 3712).
          (19) Public and assisted housing youth sports programs.--
        Section 520 of the Cranston-Gonzalez National Affordable 
        Housing Act (42 U.S.C. 11903a).
          (20) Frost-leland provisions.--Section 415 of the Department 
        of Housing and Urban Development--Independent Agencies 
        Appropriations Act, 1988 (Public Law 100-202; 101 Stat. 1329-
        213); except that, notwithstanding any other provision of law, 
        beginning on the date of enactment of this Act, the public 
        housing projects described in section 415 of such 
        appropriations Act (as such section existed immediately before 
        the date of enactment of this Act) shall be eligible for 
        demolition--
                  (A) under section 14 of the United States Housing Act 
                of 1937 (as such section existed upon the enactment of 
                this Act); and
                  (B) under section 9 of the United States Housing Act 
                of 1937.
          (21) Multifamily financing.--The penultimate sentence of 
        section 302(b)(2) of the National Housing Act (12 U.S.C. 
        1717(b)(2)) and the penultimate sentence of section 305(a)(2) 
        of the Emergency Home Finance Act of 1970 (12 U.S.C. 
        1454(a)(2)).
          (22) Conflicts of interest.--Subsection (c) of section 326 of 
        the Housing and Community Development Amendments of 1981 (42 
        U.S.C. 1437f note).
          (23) Conversion of public housing.--Section 202 of the 
        Departments of Veterans Affairs and Housing and Urban 
        Development, and Independent Agencies Appropriations Act, 1996 
        (42 U.S.C. 1437l note) (enacted as section 101(e) of Omnibus 
        Consolidated Rescissions and Appropriations Act of 1996 (Public 
        Law 104-134; 110 Stat. 1321-279)).
  (b) Savings Provision.--Except to the extent otherwise provided in 
this Act--
          (1) the repeals made by subsection (a) shall not affect any 
        legally binding obligations entered into before the effective 
        date of this Act; and
          (2) any funds or activities subject to a provision of law 
        repealed by subsection (a) shall continue to be governed by the 
        provision as in effect immediately before such repeal.

  Subtitle B--Other Provisions Relating to Public Housing and Rental 
                          Assistance Programs

SEC. 621. ALLOCATION OF ELDERLY HOUSING AMOUNTS.

  Section 202(l) of the Housing Act of 1959 (12 U.S.C. 1701q(l)) is 
amended by adding at the end the following new paragraph:
          ``(4) Consideration in allocating assistance.--Assistance 
        under this section shall be allocated in a manner that ensures 
        that the awards of the assistance are made for projects of 
        sufficient size to accommodate facilities for supportive 
        services appropriate to the needs of frail elderly 
        residents.''.

SEC. 622. PET OWNERSHIP.

  Section 227 of the Housing and Urban-Rural Recovery Act of 1983 (12 
U.S.C. 1701r-1) is amended to read as follows:

``SEC. 227. PET OWNERSHIP IN FEDERALLY ASSISTED RENTAL HOUSING.

  ``(a) Right of Ownership.--A resident of a dwelling unit in federally 
assisted rental housing may own common household pets or have common 
household pets present in the dwelling unit of such resident, subject 
to the reasonable requirements of the owner of the federally assisted 
rental housing and providing that the resident maintains the animals 
responsibly and in compliance with applicable local and State public 
health, animal control, and anticruelty laws. Such reasonable 
requirements may include requiring payment of a nominal fee and pet 
deposit by residents owning or having pets present, to cover the 
operating costs to the project relating to the presence of pets and to 
establish an escrow account for additional such costs not otherwise 
covered, respectively. Notwithstanding section 225(d) of the Housing 
Opportunity and Responsibility Act of 1997, a public housing agency may 
not grant any exemption under such section from payment, in whole or in 
part, of any fee or deposit required pursuant to the preceding 
sentence.
  ``(b) Prohibition Against Discrimination.--No owner of federally 
assisted rental housing may restrict or discriminate against any person 
in connection with admission to, or continued occupancy of, such 
housing by reason of the ownership of common household pets by, or the 
presence of such pets in the dwelling unit of, such person.
  ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
          ``(1) Federally assisted rental housing.--The term `federally 
        assisted rental housing' means any multifamily rental housing 
        project that is--
                  ``(A) public housing (as such term is defined in 
                section 103 of the Housing Opportunity and 
                Responsibility Act of 1997);
                  ``(B) assisted with project-based assistance pursuant 
                to section 601(f) of the Housing Opportunity and 
                Responsibility Act of 1997 or under section 8 of the 
                United States Housing Act of 1937 (as in effect before 
                the effective date of the repeal under section 601(b) 
                of the Housing Opportunity and Responsibility Act of 
                1997);
                  ``(C) assisted under section 202 of the Housing Act 
                of 1959 (as amended by section 801 of the Cranston-
                Gonzalez National Affordable Housing Act);
                  ``(D) assisted under section 202 of the Housing Act 
                of 1959 (as in effect before the enactment of the 
                Cranston-Gonzalez National Affordable Housing Act);
                  ``(E) assisted under title V of the Housing Act of 
                1949; or
                  ``(F) insured, assisted, or held by the Secretary or 
                a State or State agency under section 236 of the 
                National Housing Act.
          ``(2) Owner.--The term `owner' means, with respect to 
        federally assisted rental housing, the entity or private 
        person, including a cooperative or public housing agency, that 
        has the legal right to lease or sublease dwelling units in such 
        housing (including a manager of such housing having such 
        right).
  ``(d) Regulations.--This section shall take effect upon the date of 
the effectiveness of regulations issued by the Secretary to carry out 
this section. Such regulations shall be issued not later than the 
expiration of the 1-year period beginning on the date of the enactment 
of the Housing Opportunity and Responsibility Act of 1997 and after 
notice and 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. 623. REVIEW OF DRUG ELIMINATION PROGRAM CONTRACTS.

  (a) Requirement.--The Secretary of Housing and Urban Development 
shall investigate all security contracts awarded by grantees under the 
Public and Assisted Housing Drug Elimination Act of 1990 (42 U.S.C. 
11901 et seq.) that are public housing agencies that own or operate 
more than 4,500 public housing dwelling units--
          (1) to determine whether the contractors under such contracts 
        have complied with all laws and regulations regarding 
        prohibition of discrimination in hiring practices;
          (2) to determine whether such contracts were awarded in 
        accordance with the applicable laws and regulations regarding 
        the award of such contracts;
          (3) to determine how many such contracts were awarded under 
        emergency contracting procedures;
          (4) to evaluate the effectiveness of the contracts; and
          (5) to provide a full accounting of all expenses under the 
        contracts.
  (b) Report.--Not later than 180 days after the date of the enactment 
of this Act, the Secretary shall complete the investigation required 
under subsection (a) and submit a report to the Congress regarding the 
findings under the investigation. With respect to each such contract, 
the report shall (1) state whether the contract was made and is 
operating, or was not made or is not operating, in full compliance with 
applicable laws and regulations, and (2) for each contract that the 
Secretary determines is in such compliance issue a personal 
certification of such compliance by the Secretary of Housing and Urban 
Development.
  (c) Actions.--For each contract that is described in the report under 
subsection (b) as not made or not operating in full compliance with 
applicable laws and regulations, the Secretary of Housing and Urban 
Development shall promptly take any actions available under law or 
regulation that are necessary--
          (1) to bring such contract into compliance; or
          (2) to terminate the contract.
  (d) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 624. AMENDMENTS TO PUBLIC AND ASSISTED HOUSING DRUG ELIMINATION 
                    ACT OF 1990.

  (a) Short Title, Purposes, and Authority to Make Grants.--Chapter 2 
of subtitle C of title V of the Anti-Drug Abuse Act of 1988 (42 U.S.C. 
11901 et seq.) is amended by striking the chapter heading and all that 
follows through section 5123 and inserting the following:

           ``CHAPTER 2--COMMUNITY PARTNERSHIPS AGAINST CRIME

``SEC. 5121. SHORT TITLE.

  ``This chapter may be cited as the `Community Partnerships Against 
Crime Act of 1997'.

``SEC. 5122. PURPOSES.

  ``The purposes of this chapter are to--
          ``(1) improve the quality of life for the vast majority of 
        law-abiding public housing residents by reducing the levels of 
        fear, violence, and crime in their communities;
          ``(2) broaden the scope of the Public and Assisted Housing 
        Drug Elimination Act of 1990 to apply to all types of crime, 
        and not simply crime that is drug-related; and
          ``(3) reduce crime and disorder in and around public housing 
        through the expansion of community-oriented policing activities 
        and problem solving.

``SEC. 5123. AUTHORITY TO MAKE GRANTS.

  ``The Secretary of Housing and Urban Development may make grants in 
accordance with the provisions of this chapter for use in eliminating 
crime in and around public housing and other federally assisted low-
income housing projects to (1) publichousing agencies, and (2) private, 
for-profit and nonprofit owners of federally assisted low-income 
housing.''.
  (b) Eligible Activities.--
          (1) In general.--Section 5124(a) of the Anti-Drug Abuse Act 
        of 1988 (42 U.S.C. 11903(a)) is amended--
                  (A) in the matter preceding paragraph (1), by 
                inserting ``and around'' after ``used in'';
                  (B) in paragraph (3), by inserting before the 
                semicolon the following: ``, including fencing, 
                lighting, locking, and surveillance systems'';
                  (C) in paragraph (4), by striking subparagraph (A) 
                and inserting the following new subparagraph:
                  ``(A) to investigate crime; and'';
                  (D) in paragraph (6)--
                          (i) by striking ``in and around public or 
                        other federally assisted low-income housing 
                        projects''; and
                          (ii) by striking ``and'' after the semicolon; 
                        and
                  (E) by striking paragraph (7) and inserting the 
                following new paragraphs:
          ``(7) providing funding to nonprofit public housing resident 
        management corporations and resident councils to develop 
        security and crime prevention programs involving site 
        residents;
          ``(8) the employment or utilization of one or more 
        individuals, including law enforcement officers, made available 
        by contract or other cooperative arrangement with State or 
        local law enforcement agencies, to engage in community- and 
        problem-oriented policing involving interaction with members of 
        the community in proactive crime control and prevention 
        activities;
          ``(9) programs and activities for or involving youth, 
        including training, education, recreation and sports, career 
        planning, and entrepreneurship and employment activities and 
        after school and cultural programs; and
          ``(10) service programs for residents that address the 
        contributing factors of crime, including programs for job 
        training, education, drug and alcohol treatment, and other 
        appropriate social services.''.
          (2) Other pha-owned housing.--Section 5124(b) of the Anti-
        Drug Abuse Act of 1988 (42 U.S.C. 11903(b)) is amended--
                  (A) in the matter preceding paragraph (1)--
                          (i) by striking ``drug-related crime in'' and 
                        inserting ``crime in and around''; and
                          (ii) by striking ``paragraphs (1) through 
                        (7)'' and inserting ``paragraphs (1) through 
                        (10)''; and
                  (B) in paragraph (2), by striking ``drug-related'' 
                and inserting ``criminal''.
  (c) Grant Procedures.--Section 5125 of the Anti-Drug Abuse Act of 
1988 (42 U.S.C. 11904) is amended to read as follows:

``SEC. 5125. GRANT PROCEDURES.

  ``(a) PHA's With 250 or More Units.--
          ``(1) Grants.--In each fiscal year, the Secretary shall make 
        a grant under this chapter from any amounts available under 
        section 5131(b)(1) for the fiscal year to each of the following 
        public housing agencies:
                  ``(A) New applicants.--Each public housing agency 
                that owns or operates 250 or more public housing 
                dwelling units and has--
                          ``(i) submitted an application to the 
                        Secretary for a grant for such fiscal year, 
                        which includes a 5-year crime deterrence and 
                        reduction plan under paragraph (2); and
                          ``(ii) had such application and plan approved 
                        by the Secretary.
                  ``(B) Renewals.--Each public housing agency that owns 
                or operates 250 or more public housing dwelling units 
                and for which--
                          ``(i) a grant was made under this chapter for 
                        the preceding Federal fiscal year;
                          ``(ii) the term of the 5-year crime 
                        deterrence and reduction plan applicable to 
                        such grant includes the fiscal year for which 
                        the grant under this subsection is to be made; 
                        and
                          ``(iii) the Secretary has determined, 
                        pursuant to a performance review under 
                        paragraph (4), that during the preceding fiscal 
                        year the agency has substantially fulfilled the 
                        requirements under subparagraphs (A) and (B) of 
                        paragraph (4).
        Notwithstanding subparagraphs (A) and (B), the Secretary may 
        make a grant under this chapter to a public housing agency that 
        owns or operates 250 or more public housing dwelling units only 
        if the agency includes in the application for the grant 
        information that demonstrates, to the satisfaction of the 
        Secretary, that the agency has a need for the grant amounts 
        based on generally recognized crime statistics showing that (I) 
        the crime rate for the public housing developments of the 
        agency (or the immediate neighborhoods in which such 
        developments are located) is higher than the crime rate for the 
        jurisdiction in which the agency operates, (II) the crime rate 
        for the developments (or such neighborhoods) is increasing over 
        a period of sufficient duration to indicate a general trend, or 
        (III) the operation of the program under this chapter 
        substantially contributes to the reduction of crime.
          ``(2) 5-year crime deterrence and reduction plan.--Each 
        application for a grant under this subsection shall contain a 
        5-year crime deterrence and reduction plan. The plan shall be 
        developed with the participation of residents and appropriate 
        law enforcement officials. The plan shall describe, for the 
        public housing agency submitting the plan--
                  ``(A) the nature of the crime problem in public 
                housing owned or operated by the public housing agency;
                  ``(B) the building or buildings of the public housing 
                agency affected by the crime problem;
                  ``(C) the impact of the crime problem on residents of 
                such building or buildings; and
                  ``(D) the actions to be taken during the term of the 
                plan to reduce and deter such crime, which shall 
                include actions involving residents, law enforcement, 
                and service providers.
        The term of a plan shall be the period consisting of 5 
        consecutive fiscal years, which begins with the first fiscal 
        year for which funding under this chapter is provided to carry 
        out the plan.
          ``(3) Amount.--In any fiscal year, the amount of the grant 
        for a public housing agency receiving a grant pursuant to 
        paragraph (1) shall be the amount that bears the same ratio to 
        the total amount made available under section 5131(b)(1) as the 
        total number of public dwelling units owned or operated by such 
        agency bears to the total number of dwelling units owned or 
        operated by all public housing agencies that own or operate 250 
        or more public housing dwelling units that are approved for 
        such fiscal year.
          ``(4) Performance review.--For each fiscal year, the 
        Secretary shall conduct a performance review of the activities 
        carried out by each public housing agency receiving a grant 
        pursuant to this subsection to determine whether the agency--
                  ``(A) has carried out such activities in a timely 
                manner and in accordance with its 5-year crime 
                deterrence and reduction plan; and
                  ``(B) has a continuing capacity to carry out such 
                plan in a timely manner.
          ``(5) Submission of applications.--The Secretary shall 
        establish such deadlines and requirements for submission of 
        applications under this subsection.
          ``(6) Review and determination.--The Secretary shall review 
        each application submitted under this subsection upon 
        submission and shall approve the application unless the 
        application and the 5-year crime deterrence and reduction plan 
        are inconsistent with the purposes of this chapter or any 
        requirements established by the Secretary or the information in 
        the application or plan is not substantially complete. Upon 
        approving or determining not to approve an application and plan 
        submitted under this subsection, the Secretary shall notify the 
        public housing agency submitting the application and plan of 
        such approval or disapproval.
          ``(7) Disapproval of applications.--If the Secretary notifies 
        an agency that the application and plan of the agency is not 
        approved, not later than the expiration of the 15-day period 
        beginning upon such notice of disapproval, the Secretary shall 
        also notify the agency, in writing, of the reasons for the 
        disapproval, the actions that the agency could take to comply 
        with the criteria for approval, and the deadlines for such 
        actions.
          ``(8) Failure to approve or disapprove.--If the Secretary 
        fails to notify an agency of approval or disapproval of an 
        application and plan submitted under this subsection before the 
        expiration of the 60-day period beginning upon the submission 
        of the plan or fails to provide notice under paragraph (7) 
        within the 15-day period under such paragraph to an agency 
        whose application has been disapproved, the application and 
        plan shall be considered to have been approved for purposes of 
        this section.
  ``(b) PHA's With Fewer Than 250 Units and Owners of Federally 
Assisted Low-Income Housing.--
          ``(1) Applications and plans.--To be eligible to receive a 
        grant under this chapter, a public housing agency that owns or 
        operates fewer than 250 public housing dwelling units or an 
        owner of federally assisted low-income housing shall submit an 
        application to the Secretary at such time, in such manner, and 
        accompanied by such additional information as the Secretary may 
        require. The application shall include a plan for addressing 
        the problem of crime in and around the housing for which the 
        application is submitted, describing in detail activities to be 
        conducted during the fiscal year for which the grant is 
        requested.
          ``(2) Grants for pha's with fewer than 250 units.--In each 
        fiscal year the Secretary may, to the extent amounts are 
        available under section 5131(b)(2), make grants under this 
        chapter to public housing agencies that own or operate fewer 
        than 250 public housing dwelling units and have submitted 
        applications under paragraph (1) that the Secretary has 
        approved pursuant to the criteria under paragraph (4).
          ``(3) Grants for federally assisted low-income housing.--In 
        each fiscal year the Secretary may, to the extent amounts are 
        available under section 5131(b)(3), make grants under this 
        chapter to owners of federally assisted low-income housing that 
        have submitted applications under paragraph (1) that the 
        Secretary has approved pursuant to the criteria under 
        paragraphs (4) and (5).
          ``(4) Criteria for approval of applications.--The Secretary 
        shall determine whether to approve each application under this 
        subsection on the basis of--
                  ``(A) the extent of the crime problem in and around 
                the housing for which the application is made;
                  ``(B) the quality of the plan to address the crime 
                problem in the housing for which the application is 
                made;
                  ``(C) the capability of the applicant to carry out 
                the plan; and
                  ``(D) the extent to which the tenants of the housing, 
                the local government, local community-based nonprofit 
                organizations, local tenant organizations representing 
                residents of neighboring projects that are owned or 
                assisted by the Secretary, and the local community 
                support and participate in the design and 
                implementation of the activities proposed to be funded 
                under the application.
        In each fiscal year, the Secretary may give preference to 
        applications under this subsection for housing made by 
        applicants who received a grant for such housing for the 
        preceding fiscal year under this subsection or under the 
        provisions of this chapter as in effect immediately before the 
        date of the enactment of the Housing Opportunity and 
        Responsibility Act of 1997.
          ``(5) Additional criteria for federally assisted low-income 
        housing.--In addition to the selection criteria under paragraph 
        (4), the Secretary may establish other criteria for evaluating 
        applications submitted by owners of federally assisted low-
        income housing, except that such additional criteria shall be 
        designed only to reflect--
                  ``(A) relevant differences between the financial 
                resources and other characteristics of public housing 
                agencies and owners of federally assisted low-income 
                housing; or
                  ``(B) relevant differences between the problem of 
                crime in public housing administered by such 
                authorities and the problem of crime in federally 
                assisted low-income housing.''.
  (d) Definitions.--Section 5126 of the Anti-Drug Abuse Act of 1988 (42 
U.S.C. 11905) is amended--
          (1) by striking paragraphs (1) and (2);
          (2) in paragraph (4)(A), by striking ``section'' before 
        ``221(d)(4)'';
          (3) by redesignating paragraphs (3) and (4) (as so amended) 
        as paragraphs (1) and (2), respectively; and
          (4) by adding at the end the following new paragraph:
          ``(3) Public housing agency.--The term `public housing 
        agency' has the meaning given the term in section 103 of the 
        Housing Opportunity and Responsibility Act of 1997.''.
  (e) Implementation.--Section 5127 of the Anti-Drug Abuse Act of 1988 
(42 U.S.C. 11906) is amended by striking ``Cranston-Gonzalez National 
Affordable Housing Act'' and inserting ``Housing Opportunity and 
Responsibility Act of 1997''.
  (f) Reports.--Section 5128 of the Anti-Drug Abuse Act of 1988 (42 
U.S.C. 11907) is amended--
          (1) by striking ``drug-related crime in'' and inserting 
        ``crime in and around''; and
          (2) by striking ``described in section 5125(a)'' and 
        inserting ``for the grantee submitted under subsection (a) or 
        (b) of section 5125, as applicable''.
  (g) Funding and Program Sunset.--Chapter 2 of subtitle C of title V 
of the Anti-Drug Abuse Act of 1988 is amended by striking section 5130 
(42 U.S.C. 11909) and inserting the following new section:

``SEC. 5130. FUNDING.

  ``(a) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this chapter $290,000,000 for each of fiscal 
years 1998, 1999, 2000, 2001, and 2002.
  ``(b) Allocation.--Of any amounts available, or that the Secretary is 
authorized to use, to carry out this chapter in any fiscal year--
          ``(1) 85 percent shall be available only for assistance 
        pursuant to section 5125(a) to public housing agencies that own 
        or operate 250 or more public housing dwelling units;
          ``(2) 10 percent shall be available only for assistance 
        pursuant to section 5125(b)(2) to public housing agencies that 
        own or operate fewer than 250 public housing dwelling units; 
        and
          ``(3) 5 percent shall be available only for assistance to 
        federally assisted low-income housing pursuant to section 
        5125(b)(3).
  ``(c) Retention of Proceeds of Asset Forfeitures by Inspector 
General.--Notwithstanding section 3302 of title 31, United States Code, 
or any other provision of law affecting the crediting of collections, 
the proceeds of forfeiture proceedings and funds transferred to the 
Office of Inspector General of the Department of Housing and Urban 
Development, as a participating agency, from the Department of Justice 
Assets Forfeiture Fund or the Department of the Treasury Forfeiture 
Fund, as an equitable share from the forfeiture of property in 
investigations in which the Office of Inspector General participates, 
shall be deposited to the credit of the Office of Inspector General for 
Operation Safe Home activities authorized under the Inspector General 
Act of 1978, as amended, to remain available until expended.''.
  (h) Conforming Amendments.--The table of contents in section 5001 of 
the Anti-Drug Abuse Act of 1988 (Public Law 100-690; 102 Stat. 4295) is 
amended--
          (1) by striking the item relating to the heading for chapter 
        2 of subtitle C of title V and inserting the following:

          ``Chapter 2--Community Partnerships Against Crime'';

          (2) by striking the item relating to section 5122 and 
        inserting the following new item:

``Sec. 5122. Purposes.'';

          (3) by striking the item relating to section 5125 and 
        inserting the following new item:

``Sec. 5125. Grant procedures.'';

        and
          (4) by striking the item relating to section 5130 and 
        inserting the following new item:

``Sec. 5130. Funding.''.

  (i) Treatment of NOFA.--The cap limiting assistance under the Notice 
of Funding Availability issued by the Department of Housing and Urban 
Development in the Federal Register of April 8, 1996, shall not apply 
to a public housing agency within an area designated as a high 
intensity drug trafficking area under section 1005(c) of the Anti-Drug 
Abuse Act of 1988 (21 U.S.C. 1504(c)).
  (j) Effective Date.--This section and the amendments made by this 
section shall take effect on the date of the enactment of this Act.

  Subtitle C--Limitations Relating to Occupancy in Federally Assisted 
                                Housing

SEC. 641. SCREENING OF APPLICANTS.

  (a) Ineligibility Because of Eviction.--Any household or member of a 
household evicted from federally assisted housing (as such term is 
defined in section 645) shall not be eligible for federally assisted 
housing--
          (1) in the case of eviction by reason of drug-related 
        criminal activity, for a period of not less than 3 years that 
        begins on the date of such eviction, unless the evicted member 
        of the household successfully completes a rehabilitation 
        program; and
          (2) in the case of an eviction for other serious violations 
        of the terms or conditions of the lease, for a reasonable 
        period of time, as determined by the public housing agency or 
        owner of the federally assisted housing, as applicable.
The requirements of paragraphs (1) and (2) may be waived if the 
circumstances leading to eviction no longer exist.
  (b) Ineligibility of Illegal Drug Users and Alcohol Users.--
          (1) In general.--Notwithstanding any other provision of law, 
        a public housing agency or an owner of federally assisted 
        housing, or both, as determined by the Secretary, shall 
        establish standards that prohibit admission to the program or 
        admission to federally assisted housing for any household with 
        a member--
                  (A) who the public housing agency or owner determines 
                is engaging in the illegal use of a controlled 
                substance; or
                  (B) with respect to whom the public housing agency or 
                owner determines that it has reasonable cause to 
                believe that such household member's illegal use (or 
                pattern of illegal use) of a controlled substance, or 
                abuse (or pattern of abuse) of alcohol, would interfere 
                with the health, safety, or right to peaceful enjoyment 
                of the premises by other residents.
          (2) Consideration of rehabilitation.--In determining whether, 
        pursuant to paragraph (1)(B), to deny admission to the program 
        or to federally assisted housing to any household based on a 
        pattern of illegal use of a controlled substance or a pattern 
        of abuse of alcohol by a household member, a public housing 
        agency or an owner may consider whether such household member--
                  (A) has successfully completed an accredited drug or 
                alcohol rehabilitation program (as applicable) and is 
                no longer engaging in the illegal use of a controlled 
                substance or abuse of alcohol (as applicable);
                  (B) has otherwise been rehabilitated successfully and 
                is no longer engaging in the illegal use of a 
                controlled substance or abuse of alcohol (as 
                applicable); or
                  (C) is participating in an accredited drug or alcohol 
                rehabilitation program (as applicable) and is no longer 
                engaging in the illegal use of a controlled substance 
                or abuse of alcohol (as applicable).
  (c) Authority To Deny Admission to Criminal Offenders.--Except as 
provided in subsections (a) and (b) and in addition to any other 
authority to screen applicants, in selecting among applicants for 
admission to the program or to federally assisted housing, if the 
public housing agency or owner of such housing (as applicable) 
determines that an applicant or any member of the applicant's household 
is or was, during a reasonable time preceding the date when the 
applicant household would otherwise be selected for admission, engaged 
in any criminal activity (including drug-related criminal activity), 
the public housing agency or owner may--
          (1) deny such applicant admission to the program or to 
        federally assisted housing;
          (2) consider the applicant (for purposes of any waiting list) 
        as not having applied for the program or such housing; and
          (3) after the expiration of the reasonable period beginning 
        upon such activity, require the applicant, as a condition of 
        admission to the program or to federally assisted housing, to 
        submit to the public housing agency or owner evidence 
        sufficient (as the Secretary shall by regulation provide) to 
        ensure that the individual or individuals in the applicant's 
        household who engaged in criminal activity for which denial was 
        made under paragraph (1) have not engaged in any criminal 
        activity during such reasonable period.
  (d) Authority To Require Access to Criminal Records.--A public 
housing agency and an owner of federally assisted housing may require, 
as a condition of providing admission to the program or admission to or 
occupancy in federally assisted housing, that each adult member of the 
household provide a signed, written authorization for the public 
housing agency to obtain the records described in section 644(a) 
regarding such member of the household from the National Crime 
Information Center, police departments, other law enforcement agencies, 
and State registration agencies referred to in such section. In the 
case of an owner of federally assisted housing that is not a public 
housing agency, the owner shall request the public housing agency 
having jurisdiction over the area within which the housing is located 
to obtain the records pursuant to section 644.
  (e) Admission Based on Disability.--
          (1) In general.--Notwithstanding any other provision of law, 
        for purposes of determining eligibility for admission to 
        federally assisted housing, a person shall not be considered to 
        have a disability or a handicap solely because of theprior or 
current illegal use of a controlled substance (as defined in section 
102 of the Controlled Substances Act) or solely by reason of the prior 
or current use of alcohol.
          (2) Continued occupancy.--This subsection may not be 
        construed to prohibit the continued occupancy of any person who 
        is a resident in assisted housing on the effective date of this 
        Act.

SEC. 642. TERMINATION OF TENANCY AND ASSISTANCE FOR ILLEGAL DRUG USERS 
                    AND ALCOHOL ABUSERS.

  Notwithstanding any other provision of law, a public housing agency 
or an owner of federally assisted housing (as applicable), shall 
establish standards or lease provisions for continued assistance or 
occupancy in federally assisted housing that allow the agency or owner 
(as applicable) to terminate the tenancy or assistance for any 
household with a member--
          (1) who the public housing agency or owner determines is 
        engaging in the illegal use of a controlled substance; or
          (2) whose illegal use of a controlled substance, or whose 
        abuse of alcohol, is determined by the public housing agency or 
        owner to interfere with the health, safety, or right to 
        peaceful enjoyment of the premises by other residents.

SEC. 643. LEASE REQUIREMENTS.

  In addition to any other applicable lease requirements, each lease 
for a dwelling unit in federally assisted housing shall provide that--
          (1) the owner may not terminate the tenancy except for 
        violation of the terms or conditions of the lease, violation of 
        applicable Federal, State, or local law, or for other good 
        cause; and
          (2) grounds for termination of tenancy shall include any 
        criminal or other activity, engaged in by the tenant, any 
        member of the tenant's household, any guest, or any other 
        person under the control of the household, that--
                  (A) threatens the health or safety of, or right to 
                peaceful enjoyment of the premises by, other tenant or 
                employees of the owner or other manager of the housing;
                  (B) threatens the health or safety of, or right to 
                peaceful enjoyment of their premises by, persons 
                residing in the immediate vicinity of the premises.

SEC. 644. AVAILABILITY OF CRIMINAL RECORDS FOR TENANT SCREENING AND 
                    EVICTION.

  (a) In General.--
          (1) Criminal conviction information.--Notwithstanding any 
        other provision of law other than paragraphs (3) and (4), upon 
        the request of a public housing agency, the National Crime 
        Information Center, a police department, and any other law 
        enforcement agency shall provide to the public housing agency 
        information regarding the criminal conviction records of an 
        adult applicant for, or tenants of, federally assisted housing 
        for purposes of applicant screening, lease enforcement, and 
        eviction, but only if the public housing agency requests such 
        information and presents to such Center, department, or agency 
        a written authorization, signed by such applicant, for the 
        release of such information to the public housing agency or 
        other owner of the federally assisted housing.
          (2) Information regarding crimes against children.--
        Notwithstanding any other provision of law other than 
        paragraphs (3) and (4), upon the request of a public housing 
        agency, a State law enforcement agency designated as a 
        registration agency under a State registration program under 
        subtitle A of title XVII of the Violent Crime Control and Law 
        Enforcement Act of 1994 (42 U.S.C. 14071) and any local law 
        enforcement agency authorized by the State agency shall provide 
        to a public housing agency the information collected under such 
        State registration program regarding an adult applicant for, or 
        tenant of, federally assisted housing for purposes of applicant 
        screening, lease enforcement, and eviction, but only if the 
        public housing agency requests such information and presents to 
        such State registration agency or other local law enforcement 
        agency a written authorization, signed by such applicant, for 
        the release of such information to the public housing agency or 
        other owner of the federally assisted housing.
          (3) Delayed effective date for owners other than pha's.--The 
        provisions of paragraphs (1) and (2) authorizing obtaining 
        information for owners of federally assisted housing other than 
        public housing agencies shall not take effect before--
                  (A) the expiration of the 1-year period beginning on 
                the date of enactment of this Act; and
                  (B) the Secretary and the Attorney General of the 
                United States have determined that access to such 
                information is feasible for such owners and have 
                provided for the terms of release of such information 
                to owners.
          (4) Exception.--The information provided under paragraphs 
        (1), (2), and (3) shall include information regarding any 
        criminal conviction of a juvenile only to the extent that the 
        release of such information is authorized under the law of the 
        applicable State, tribe, or locality.
  (b) Confidentiality.--A public housing agency or owner receiving 
information under this section may use such information only for the 
purposes provided in this section and such information may not be 
disclosed to any person who is not an officer, employee, or authorized 
representative of the agency or owner and who has a job-related need to 
have access to the information in connection with admission of 
applicants, eviction of tenants, or termination of assistance. For 
judicial eviction proceedings, disclosures may be made to the extent 
necessary. The Secretary shall, by regulation, establish procedures 
necessary to ensure that information provided under this section to a 
public housing agency or owner is used, and confidentiality of such 
information is maintained, as required under this section.
  (c) Opportunity to Dispute.--Before an adverse action is taken with 
regard to assistance under for federally assisted housing on the basis 
of a criminal record, the public housing agency or owner shall provide 
the tenant or applicant with a copy of the criminal record and an 
opportunity to dispute the accuracy and relevance of that record.
  (d) Fee.--A public housing agency may be charged a reasonable fee for 
information provided under subsection (a). A public housing agency may 
require an owner of federally assisted housing (that is not a public 
housing agency) to pay such fee for any information that the agency 
acquires for the owner pursuant to section 641(d) and subsection (a) of 
this section.
  (e) Records Management.--Each public housing agency and owner of 
federally assisted housing that receives criminal record information 
pursuant to this section shall establish and implement a system of 
records management that ensures that any criminal record received by 
the agency or owner is--
          (1) maintained confidentially;
          (2) not misused or improperly disseminated; and
          (3) destroyed in a timely fashion, once the purpose for which 
        the record was requested has been accomplished.
  (f) Penalty.--Any person who knowingly and willfully requests or 
obtains any information concerning an applicant for, or tenant of, 
federally assisted housing pursuant to the authority under this section 
under false pretenses, or any person who knowingly and willfully 
discloses any such information in any manner to any individual not 
entitled under any law to receive it, shall be guilty of a misdemeanor 
and fined not more than $5,000. The term ``person'' as used in this 
subsection shall include an officer, employee, or authorized 
representative of any public housing agency or owner.
  (g) Civil Action.--Any applicant for, or tenant of, federally 
assisted housing affected by (1) a negligent or knowing disclosure of 
information referred to in this section about such person by an 
officer, employee, or authorized representative of any public housing 
agency or owner of federally assisted housing, which disclosure is not 
authorized by this section, or (2) any other negligent or knowing 
action that is inconsistent with this section, may bring a civil action 
for damages and such other relief as may be appropriate against any 
public housing agency or owner responsible for such unauthorized 
action. The district court of the United States in the district in 
which the affected applicant or tenant resides, in which such 
unauthorized action occurred, or in which the officer, employee, or 
representative alleged to be responsible for any such unauthorized 
action resides, shall have jurisdiction in such matters. Appropriate 
relief that may be ordered by such district courts shall include 
reasonable attorney's fees and other litigation costs.
  (h) Definition.--For purposes of this section, the term ``adult'' 
means a person who is 18 years of age or older, or who has been 
convicted of a crime as an adult under any Federal, State, or tribal 
law.

SEC. 645. DEFINITIONS.

  For purposes of this subtitle, the following definitions shall apply:
          (1) Federally assisted housing.--The term ``federally 
        assisted housing'' means a dwelling unit--
                  (A) in public housing (as such term is defined in 
                section 102);
                  (B) assisted with choice-based housing assistance 
                under title III;
                  (C) in housing that is provided project-based 
                assistance under section 8 of the United States Housing 
                Act of 1937 (as in effect before the effective date of 
                the repeal under section 601(b) of this Act) or 
                pursuant to section 601(f) of this Act, including new 
                construction and substantial rehabilitation projects;
                  (D) in housing that is assisted under section 202 of 
                the Housing Act of 1959 (as amended by section 801 of 
                the Cranston-Gonzalez National Affordable Housing Act);
                  (E) in housing that is assisted under section 202 of 
                the Housing Act of 1959, as such section existed before 
                the enactment of the Cranston-Gonzalez National 
                Affordable Housing Act;
                  (F) in housing that is assisted under section 811 of 
                the Cranston-Gonzalez National Affordable Housing Act;
                  (G) in housing financed by a loan or mortgage insured 
                under section 221(d)(3) of the National Housing Act 
                that bears interest at a rate determined under the 
                proviso of section 221(d)(5) of such Act;
                  (H) in housing insured, assisted, or held by the 
                Secretary or a State or State agency under section 236 
                of the National Housing Act;
                  (I) for purposes only of subsections 641(c), 641(d), 
                643, and 644, in housing assisted under section 515 of 
                the Housing Act of 1949.
          (2) Owner.--The term ``owner'' means, with respect to 
        federally assisted housing, the entity or private person 
        (including a cooperative or public housing agency) that has the 
        legal right to lease or sublease dwelling units in such 
        housing.

       TITLE VII--AFFORDABLE HOUSING AND MISCELLANEOUS PROVISIONS

SEC. 701. RURAL HOUSING ASSISTANCE.

  The last sentence of section 520 of the Housing Act of 1949 (42 
U.S.C. 1490) is amended by inserting before the period the following: 
``, and the city of Altus, Oklahoma, shall be considered a rural area 
for purposes of this title until the receipt of data from the decennial 
census in the year 2000''.

SEC. 702. TREATMENT OF OCCUPANCY STANDARDS.

  The Secretary of Housing and Urban Development shall not directly or 
indirectly establish a national occupancy standard.

SEC. 703. IMPLEMENTATION OF PLAN.

  (a) Implementation.--
          (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the Secretary shall implement the 
        Ida Barbour Revitalization Plan of the City of Portsmouth, 
        Virginia, in a manner consistent with existing limitations 
        under law.
          (2) Waivers.--In carrying out paragraph (1), the Secretary 
        shall consider and make any waivers to existing regulations and 
        other requirements consistent with the plan described in 
        paragraph (1) to enable timely implementation of such plan, 
        except that generally applicable regulations and other 
        requirements governing the award of funding under programs for 
        which assistance is applied for in connection with such plan 
        shall apply.
  (b) Report.--
          (1) In general.--Not later than 1 year after the date of the 
        enactment of this Act and annually thereafter through the year 
        2000, the city described in subsection (a)(1) shall submit a 
        report to the Secretary on progress in implementing the plan 
        described in that subsection.
          (2) Contents.--Each report submitted under this subsection 
        shall include--
                  (A) quantifiable measures revealing the increase in 
                homeowners, employment, tax base, voucher allocation, 
                leverage ratio of funds, impact on and compliance with 
                the consolidated plan of the city;
                  (B) identification of regulatory and statutory 
                obstacles that--
                          (i) have caused or are causing unnecessary 
                        delays in the successful implementation of the 
                        consolidated plan; or
                          (ii) are contributing to unnecessary costs 
                        associated with the revitalization; and
                  (C) any other information that the Secretary 
                considers to be appropriate.

SEC. 704. INCOME ELIGIBILITY FOR HOME AND CDBG PROGRAMS.

  (a) Home Investment Partnerships.--The Cranston-Gonzalez National 
Affordable Housing Act is amended as follows:
          (1) Definitions.--In section 104(10) (42 U.S.C. 12704(10))--
                  (A) by striking ``income ceilings higher or lower'' 
                and inserting ``an income ceiling higher'';
                  (B) by striking ``variations are'' and inserting 
                ``variation is''; and
                  (C) by striking ``high or''.
          (2) Income targeting.--In section 214(1)(A) (42 U.S.C. 
        12744(1)(A))--
                  (A) by striking ``income ceilings higher or lower'' 
                and inserting ``an income ceiling higher'';
                  (B) by striking ``variations are'' and inserting 
                ``variation is''; and
                  (C) by striking ``high or''.
          (3) Rent limits.--In section 215(a)(1)(A) (42 U.S.C. 
        12745(a)(1)(A))--
                  (A) by striking ``income ceilings higher or lower'' 
                and inserting ``an income ceiling higher'';
                  (B) by striking ``variations are'' and inserting 
                ``variation is''; and
                  (C) by striking ``high or''.
  (b) CDBG.--Section 102(a)(20) of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5302(a)(20)) is amended by striking 
subparagraph (B) and inserting the following new subparagraph:
          ``(B) The Secretary may--
                  ``(i) with respect to any reference in subparagraph 
                (A) to 50 percent of the median income of the area 
                involved, establish percentages of median income for 
                any area that are higher or lower than 50 percent if 
                the Secretary finds such variations to be necessary 
                because of unusually high or low family incomes in such 
                area; and
                  ``(ii) with respect to any reference in subparagraph 
                (A) to 80 percent of the median income of the area 
                involved, establish a percentage of median income for 
                any area that is higher than 80 percent if the 
                Secretary finds such variation to be necessary because 
                of unusually low family incomes in such area.''.

SEC. 705. PROHIBITION OF USE OF CDBG GRANTS FOR EMPLOYMENT RELOCATION 
                    ACTIVITIES.

  Section 105 of the Housing and Community Development Act of 1974 (42 
U.S.C. 5305) is amended by adding at the end the following new 
subsection:
  ``(h) Prohibition of Use of Assistance for Employment Relocation 
Activities.--Notwithstanding any other provision of law, no amount from 
a grant under section 106 made in fiscal year 1997 or any succeeding 
fiscal year may be used for any activity (including any infrastructure 
improvement) that is intended, or is likely, to facilitate the 
relocation or expansion of any industrial or commercial plant, 
facility, or operation, from one area to another area, if the 
relocation or expansion will result in a loss of employment in the area 
from which the relocation or expansion occurs.''.

SEC. 706. USE OF AMERICAN PRODUCTS.

  (a) Purchase of American-Made Equipment and Products.--It is the 
sense of the Congress that, to the greatest extent practicable, all 
equipment and products purchased with funds made available in this Act 
should be American made.
  (b) Notice Requirement.--In providing financial assistance to, or 
entering into any contract with, any entity using funds made available 
in this Act, the head of each Federal agency, to the greatest extent 
practicable, shall provide to such entity a notice describing the 
statement made in subsection (a) by the Congress.

SEC. 707. CONSULTATION WITH AFFECTED AREAS IN SETTLEMENT OF LITIGATION.

  In negotiating any settlement of, or consent decree for, any 
litigation regarding public housing or rental assistance (under title 
III of this Act or the United States Housing Act of 1937, as in effect 
before the effective date of the repeal under section 601(b) of this 
Act) that involves the Secretary and any public housing agency or any 
unit of general local government, the Secretary shall consult with any 
units of general local government and public housing agencies having 
jurisdictions that are adjacent to the jurisdiction of the public 
housing agency involved.

SEC. 708. USE OF ASSISTED HOUSING BY ALIENS.

  Section 214 of the Housing and Community Development Act of 1980 (42 
U.S.C. 1436a) is amended--
          (1) in subsection (b)(2), by striking ``Secretary of Housing 
        and Urban Development'' and inserting ``applicable Secretary'';
          (2) in subsection (c)(1)(B), by moving clauses (ii) and (iii) 
        2 ems to the left;
          (3) in subsection (d)--
                  (A) in paragraph (1)(A)--
                          (i) by striking ``Secretary of Housing and 
                        Urban Development'' and inserting ``applicable 
                        Secretary''; and
                          (ii) by striking ``the Secretary'' and 
                        inserting ``the applicable Secretary'';
                  (B) in paragraph (2), in the matter following 
                subparagraph (B)--
                          (i) by inserting ``applicable'' before 
                        ``Secretary''; and
                          (ii) by moving such matter (as so amended by 
                        clause (i)) 2 ems to the right;
                  (C) in paragraph (4)(B)(ii), by inserting 
                ``applicable'' before ``Secretary'';
                  (D) in paragraph (5), by striking ``the Secretary'' 
                and inserting ``the applicable Secretary''; and
                  (E) in paragraph (6), by inserting ``applicable'' 
                before ``Secretary'';
          (4) in subsection (h) (as added by section 576 of the Illegal 
        Immigration Reform and Immigrant Responsibility Act of 1996 
        (division C of Public Law 104-208))--
                  (A) in paragraph (1)--
                          (i) by striking ``Except in the case of an 
                        election under paragraph (2)(A), no'' and 
                        inserting ``No'';
                          (ii) by striking ``this section'' and 
                        inserting ``subsection (d)''; and
                          (iii) by inserting ``applicable'' before 
                        ``Secretary''; and
                  (B) in paragraph (2)--
                          (i) by striking subparagraph (A) and 
                        inserting the following new subparagraph:
                  ``(A) may, notwithstanding paragraph (1) of this 
                subsection, elect not to affirmatively establish and 
                verify eligibility before providing financial 
                assistance''; and
                          (ii) in subparagraph (B), by striking ``in 
                        complying with this section'' and inserting 
                        ``in carrying out subsection (d)''; and
          (5) by redesignating subsection (h) (as amended by paragraph 
        (4)) as subsection (i).

SEC. 709. EFFECTIVE DATE.

  This title and the amendments made by this title shall take effect on 
the date of the enactment of this Act.

                     Explanation of the Legislation

    1H.R. 2, the Housing Opportunity and Responsibility Act of 
1997, fundamentally changes the public housing and Section 8 
rental assistance programs, both of which are under the 
jurisdiction of the Department of Housing and Urban Development 
(HUD). This legislation represents the first step toward 
creating a new role for the Federal government in supporting 
local communities and their efforts at improvement.
    The predecessor to H.R. 2 in the 104th Congress was H.R. 
2406, the United States Housing Act of 1996, introduced by 
Chairman Lazio on September 27, 1995. The Committee on Banking 
and Financial Services marked up H.R. 2406 and ordered it to be 
reported by a vote of 27 to 18 on November 9, 1995 (Report 104-
461 Part I and II). On May 9, 1996, the House of 
Representatives passed H.R. 2406 by a vote of 315 to 107. 
Although the Senate passed a companion bill S. 1260, the Public 
Housing Reform and Empowerment Act of 1995, on January 10, 
1996, House and Senate conferees were unable to reach agreement 
regarding the differences between the two bills.
    The House, Senate and the Administration agree on the 
critical need for public housing authorization legislation. 
Secretary Cuomo has expressed his willingness to work with 
Congress to craft a bill that can be passed this year. All 
parties are in agreement that incremental reforms currently 
found in annual appropriations measures are inadequate to the 
task of fundamental reform. The disincentives to work and self-
sufficiency, the overconcentration of poverty in certain 
neighborhoods, and the deplorable conditions that residents 
live in must be changed. Moreover, by the year 2002, many 
programs will come under increasing budgetary constraints. The 
Committee believes that in this environment of diminishing 
Federal resources, housing programs must change in two 
significant ways: they must be focused through consolidation to 
provide the most service for the least cost; and they must be 
tailored to local needs so that limited Federal funding is 
invested where, through local discretion, it can achieve the 
greatest return.
    H.R. 2 replaces the United States Housing Act of 1937 (the 
``1937 Act''), eliminating disincentives to work currently 
found in the public and assisted housing programs by providing 
residents with a choice between income-based rents or flat 
rents. A resident may choose to pay a rent that shall not 
exceed thirty percent (30%) of their income or, a flat rent for 
the unit established by the public housing authority (``PHA''). 
In this manner, as the resident increases his or her income by 
working harder, they know that there will be a set rent (the 
flat rent) beyond which any increases in their income will not 
result in any concurrent rent increases. In addition, the 
tenant protections afforded by providing that residents shall 
not pay more than 30% of their income as rent are maintained in 
law.
    In order to promote work and self sufficiency efforts on 
the part of residents, and for the purpose of creating an 
environment where individuals feel that there is a mutuality of 
obligation between recipients of Federal aid and the provider 
of such assistance, H.R. 2 requires that each non-working 
resident who is not elderly, disabled, or otherwise subject to 
local welfare work requirements, to contribute not less than 
eight (8) hours a month in community service to their 
communities. Regarding local welfare reform efforts, H.R. 2 
provides for coordination at the local level by ensuring that 
those whose benefits are reduced due to the imposition of any 
welfare sanctions not get a reduction in their rent due to a 
decrease in income.
    H.R. 2 eliminates the Federal mandates, known as 
``preferences'', which have inadvertently created concentrated 
pockets of poverty that have destroyed communities and 
neighborhoods. Along with its rent reform provisions, H.R. 2 
provides PHAs with the flexibility needed to create mixed-
income communities, providing children with the proper role 
models and adding to the overall social capital of the 
neighborhood.
    The existing Section 8 certificate and voucher programs are 
consolidated and recreated so they can be operated in a manner 
that more closely resembles the private housing market. 
Recipients are allowed to use choice-based assistance not only 
as rent but in conjunction with homeownership programs. Instead 
of only paying for their rent, the same money can be used by 
the recipient to achieve ownership.
    H.R. 2 returns decision-making to the local level, 
deregulating well-run PHAs and allowing them to provide clean, 
safe, healthy and affordable housing to needy families in a 
more cost-effective and managerially-sound manner. It requires 
that PHAs include in their annual planning an asset management 
component regarding their inventory of housing units and 
developments, in addition to the property management planning 
approach that PHAs have traditionally used. This will require 
that PHAs behave more like asset managers in the private 
sector, making long-term decisions regarding their inventory 
and how they should be allocating their resources to maximize 
future use. In addition, PHAs are provided with new flexibility 
to create mixed-finance developments, allowing localities to 
develop public housing in conjunction with private, non-
subsidized housing units so that mixed-income communities can 
be created.
    In order to encourage greater coordination of resources and 
more effective delivery of services, H.R. 2 contains provisions 
empowering local officials, on a voluntary basis, to address 
community needs by providing local flexibility in program 
design and administration. Title IV, the Home Rule Flexible 
Grant Option, requires that the Department of Housing and Urban 
Development (HUD) provide local government leaders the option 
to combine Federal housing assistance funds into a flexible 
grant for use in administering these locally-developed 
approaches to meet the housing needs of their communities. 
Localities that wish to take advantage will enter performance 
agreement contracts with HUD, not to exceed five years, with 
specific, measurable goals. The focus is shifted from process-
oriented compliance with Federal mandates to accomplishing the 
goals of the programs at the local community level.
    Chronically troubled PHAs, whose long-standing failure have 
been a hallmark of government involvement in housing and urban 
development, are no longer tolerated. HUD is required to take 
strong action and afforded several avenues to address these 
problem authorities, including appointment of a receiver to 
manage the PHA or replacement of management with professional 
management entities that have the expertise to meet the goals 
of this legislation.

                         Findings and Purposes

    The purpose of this legislation is to promote safe, clean, 
and healthy housing that is affordable to responsible, 
deserving low-income families who cannot provide fully for 
themselves. H.R. 2 seeks to eliminate the perverse 
disincentives to work and self-sufficiency efforts faced by 
residents as a result of current law governing rent by giving 
residents the power of choice in how their rents are 
determined. This legislation gives PHAs the flexibility they 
need to begin to create healthy neighborhoods, where working 
adults serve as role models for children, and allows them to 
encourage mixed-income populations so that extreme 
concentrations of poverty are no longer tolerated.
    This legislation reverses the accumulation of power at the 
Federal level. The Committee recognizes that it is impossible 
for the Federal government, through its direct action or 
involvement, to provide housing for every American citizen. 
Despite this constraint, however, the Federal government does 
have a responsibility to promote and protect the independent 
and collective actions of private citizens to develop housing 
and to strengthen communities. In order to develop this 
responsible yet appropriate Federal role while increasing the 
effectiveness of our efforts, decision-making and 
administrative freedom is returned in great part to the PHAs. 
The existing public housing programs are consolidated into two 
block grants for operating and capital costs. The current 
Section 8 and voucher programs are combined into one choice-
based assistance program that will operate more like the 
private sector. In addition, PHAs are given more authority to 
fight drugs and crime in their developments by evicting those 
residents involved in such activity.
    To encourage innovation, H.R. 2 provides statutory 
parameters and significant flexibility to encourage local 
ingenuity and creativity on the part of PHAs. In return for 
deregulation, PHAs are expected to administer Federally 
assisted housing programs, perform as effective property and 
asset managers and operate their housing inventory in a manner 
that serves local needs. A PHA may, for example, decide to 
demolish a large, severely distressed public housing project 
and provide alternative housing choices to displaced residents. 
Likewise, the PHA might choose to enter into a joint-venture 
with a private sector partner and build new affordable housing 
using tax incentives, grants and loans. In either situation, 
the legislation encourages partnerships with the private sector 
as well as local and state governments. PHAs are given the 
flexibility to create mixed-finance developments so that public 
housing units can be developed in conjunction with private 
units.
    The Committee recognizes that traditional monitoring 
techniques used by HUD must be redesigned. HUD monitoring of 
PHAs has become overly process-oriented, and not effective in 
determining true performance. As a result, the Committee bill 
requires that a study be conducted regarding alternative 
methods by which the performance of PHAs can be evaluated. At 
the same time, an accreditation board is established upon the 
enactment of the legislation so as to develop professional, 
non-political standards by which the performance of PHAs that 
accept Federal housing block grants should be judged. The 
accreditation board is to take into account the findings of the 
study regarding alternative evaluation methods.
    In keeping with the Committee's goal of providing local 
flexibility to develop innovative and more effective ways of 
addressing the housing needs of our communities, Title IV gives 
local governments the opportunity to create and administer 
innovative programs designed to address more effectively the 
needs of their communities. Exercise of this Home Rule 
Flexibility Option is purely voluntary, and would have no 
adverse impact on the funding otherwise received by the 
locality under the traditional public and choice-based housing 
programs. The local communities would, upon HUD review and 
approval of their plan, be allowed to use Federal housing funds 
for these programs. In this manner, communities are given the 
incentive to work with their public housing agencies to end the 
economic and social isolation of many of our public housing 
developments, and to bring public housing residents into the 
mainstream of their community.
    The Committee recognizes that it is not enough for families 
to live in soundly built houses--the family must also have 
access to schools, churches and grocery stores. Coordinating 
local strategies and encouraging local involvement will lead to 
greater integration of Federal resources, such as Community 
Development Block Grant (CDBG) and HOME funds, with affordable 
housing funds. The Committee believes that such integration 
will foster economic growth, creating economic opportunity for 
residents of public and assisted housing.
    Finally, the Committee believes the 1937 Act is outdated 
and must be replaced. This Depression-era legislation was 
written for a very different time, and the current Federal 
housing programs are faced with huge challenges that must be 
addressed forcefully and dramatically. In order to effectuate 
true change that will impact positively on the lives of the 
poor, the Committee believes that the time has come for a new 
foundation to be established in Federal housing policy. Simply 
amending the 1937 Act will signal to those participants in our 
housing programs, both providers and recipients, that change is 
incremental. The Committee believes that our Nation cannot 
continue to allow children to grow up in assisted housing where 
there are no role models, where work is punished, where they 
are subject to random and violent crime, and where they are 
isolated from the economic and social opportunities of 
mainstream communities. TheCommittee heard substantial 
testimony that not clearing the decks of outdated legislation and 
Federal mandates may have the unintended consequence of undermining the 
Committee's efforts at fundamental and sweeping reform. For purely 
pragmatic reasons, therefore, the Committee believes that replacement 
of the 1937 Act by a new model geared to the needs of future 
generations of children is imperative to breaking the continuing cycle 
of poverty.

                 I. BACKGROUND AND NEED FOR LEGISLATION

    Most participants in the low-income housing community agree 
that the law authorizing the public housing and Section 8 
rental assistance programs is extremely complex. In fact, the 
public housing program is one of the most perplexing areas of 
HUD's Federal mandate. Most Americans believe that public 
housing is a failure and a waste of their hard-earned taxpayer 
dollars. This perception is based largely on projects like 
Robert Taylor Homes in Chicago, Illinois, Hayes Homes in 
Newark, New Jersey, Desire in New Orleans, Louisiana, and Allen 
Parkway Village in Houston, Texas, all of which are in 
deplorable condition and are largely vacant. Unfortunately, the 
perception problem is bolstered by the knowledge that 
approximately 20% of the public housing budget has flowed to 
chronically troubled PHAs like Philadelphia, Chicago, 
Washington, D.C., and New Orleans--PHAs that have failed to 
carry out their missions.
    Similarly, the Section 8 rental assistance program is 
plagued by problems. Most people confuse this privately owned 
housing program with public housing--a sore point for many 
landlords and property managers. Excessive legislative 
mandates, bureaucratic micromanagment, and other structural 
deficiencies hamper what could be an otherwise worthwhile 
program, and may lead to a decrease in the supply of clean, 
healthy, and affordable housing.
    Fortunately, most people familiar with the programs--the 
Congress, the Administration, the low-income housing industry, 
and the recipients of assistance--agree they must be reformed 
and basic underlying principles changed. Even PHAs that manage 
their housing inventories effectively concur that the current 
construction of the public housing and Section 8 rental 
assistance programs must change dramatically if they are to 
continue to serve low-income clients.
    Critical reform components include creating a new 
environment in which: (1) residents are expected and encouraged 
to become self-sufficient; (2) PHAs are empowered to make 
management decisions about the viability of their stock and are 
rewarded for performance; (3) management failures are no longer 
tolerated but are dealt with swiftly, eliminating the 
conditions that lead to chronically-troubled authorities; and 
(4) local governments are encouraged to become active and 
innovative contributors to the Federal housing programs in 
their jurisdictions so that these programs are no longer 
isolated from the community.
    H.R. 2 offers a new approach which renews the premise that 
the Federal government has a role to play in providing safe, 
healthy, and affordable housing for families of low-income, but 
that such a role should be responsible, effective, and 
appropriate. Housing assistance is not an entitlement under the 
Constitution. Moreover, no President or Congress has ever moved 
towards making public housing and low income rental assistance 
an entitlement by funding it at levels necessary to meet the 
needs of the country's eligible population. Yet since the 
passage of the 1937 Act, the Federal government's control of 
low-income housing has steadily grown, increasing year by year 
the mandates and requirements imposed upon localities until 
local decision making and policy determination were completely 
supplanted by Washington-knows-best approaches.
    The 1937 Act itself was originally straightforward and 
simple. Its stated objective was to stimulate the economy, to 
assist business and labor, and to create jobs by stabilizing 
the industrial activity of the United States during the 
Depression. Additionally, the legislation sought to eliminate 
slums and provide decent homes for families who had, under the 
circumstances that prevailed at the time, become dependent on 
public aid to improve their housing conditions. When passed, 
the 1937 Act comprised only 12 pages of the United States 
Statutes at Large. The original legislation did not provide 
much direction about who was to receive assistance or how a 
local authority was to make decisions regarding everyday 
matters like admissions, rent structure, maintenance and 
capital improvements. Special programmatic set-asides did not 
exist, nor did the legislation contemplate providing money for 
operating expenses of a dwelling unit.
    Federal micromanagement has increased substantially beyond 
what was intended by the 75th Congress. The more than 300 pages 
of current law are filled with prescriptive solutions that 
cannot be tailored to the needs of individual PHAs or the 
families they serve. Unrealistic policies require obsolete 
housing to be rehabilitated for millions of dollars even if 
other available forms of housing are less expensive. Local 
governments are precluded from making even basic decisions 
about how to help their constituencies. PHAs are flooded by a 
steady flow of mandates from Washington. Often many of these 
mandates infringe on local control and, ultimately, are part of 
ill-conceived attempts to create a ``one size fits all'' policy 
for a resource that should be tailored to widely varying local 
housing needs.
    As Steven Goldsmith, Mayor of Indianapolis, stated before 
the Subcommittee on Housing and Community Opportunity in 
testimony on March 11, 1997, regarding H.R. 2:

          The Federal government has responded to every concern 
        or potential mistake by creating a mountain of 
        restrictions and rules. I have been told by more than 
        one of the ``best'' public housing managers of the 
        nation that it is not possible to operate a public 
        housing agency within the rules as they exist. They 
        tell me that they succeed because they ignore the most 
        nonsensical rules.

    Sixty years of continued amendments to the 1937 Act, 
hundreds of thousands of pages of Federal regulations and HUD 
handbooks, and the existence of a culture that has rewarded 
compliance with process rather than performance and innovation, 
lead the Committee to the conclusion that the goals of our 
Federal housing programs can only be achieved under a modern 
framework. The 1937 Act reflects the philosophy of a different 
era, and much of the language and ideas contained in the 1937 
Act are outdated. Many programs authorized by the legislation 
have not been funded or utilized for years. In fact, some 
programs have never been implemented.
    Simply amending the 1937 Act rather than repealing it 
outright may, in the Committee's judgment, lead to unintended 
consequences that slow down and possibly undermine our efforts 
at comprehensive reform. Regarding the need for repeal, Joseph 
G. Schiff, a former Assistant Secretary for Public and Indian 
Housing, stated on March 11, 1997, in testimony before the 
Subcommittee:

          I firmly believe that this is an essential step for 
        true reform of public housing. The fact that public 
        housing must have a different look five or ten years 
        from now has become an accepted viewpoint concerning 
        the program. The only thing we are still debating is 
        what it will look like and how should we get there. I 
        believe repealing the 1937 Act is an essential step on 
        this journey. The sixty years of baggage this Act is 
        mired in must be swept away. Repealing the Act is the 
        cleanest way to do so.

    Mayor Goldsmith, strongly voiced his support for repeal of 
the 1937 Act:

          Finally, I think the repeal of the Housing Act of 
        1937 may be a particularly good idea * * * The 
        Committee has gone to great trouble to create a bill 
        that deregulates and simplifies the current program. It 
        expects H.R. 2 to set the parameters of public housing 
        policy in the United States. Without a recodification 
        of the law, then the Committee may have been less 
        encompassing than it had intended. In my experience, 
        and my experience is not unique, the answer to legal 
        question about public housing seems to be based upon 
        the opinion of the official offering the answer. 
        Because the law has grown by accretion * * * there is a 
        body of law that is so large and unfathomable that it 
        seems one can find a legal requirement on both sides of 
        any issue one would care to raise. If you add the 
        substance of H.R. 2 to the body of law that already 
        exists, you may find that a reluctant Administration 
        will find ways to frustrate your intent.

    The question before this Committee was whether the housing 
needs of our nation could be addressed by retaining the current 
legal structure of public and Section 8 housing programs as 
embodied by the 1937 Act and all the legal precedent associated 
with the Act. After listening to the testimony of experts in 
the housing industry, the response to the question is no.

                        II. PURPOSE AND SUMMARY

A. Overview

    Today, over 3,400 local entities, called public housing 
authorities (PHAs), own and operate about 13,200 public housing 
developments. The inventory includes 1.4 million dwelling 
units--high rises, garden apartments, town houses and single-
family homes.\1\ These homes are occupied by 4.3 million 
families, most of whom stay an average of seven to ten years. 
There are families, however, who live in public housing for 
generations, changing a resource from what originally was 
intended to be temporary assistance to a lifelong entitlement.
---------------------------------------------------------------------------
    \1\ About 13 million families meet the Federal eligibility 
requirements for public housing. The structure of the housing programs, 
along with receipt of other Federal entitlements, create significant 
disincentives to self-sufficiency. Therefore, while one family is 
housed, pays low rent, and has access to many services which have 
nothing to do with housing, another family pays 60-80 percent of its 
income to rent substandard housing with no access to services.
---------------------------------------------------------------------------
    Resident rents are dictated by Federal rules, which require 
that rents be 30% of a resident's income. These strict income-
rent ratios have unintentionally created disincentives to work, 
self sufficiency and family unification since a family's rent 
burden increases as they earn more income. Federal preferences, 
which mandate that PHAs give priority to certain populations 
(the homeless, the extremely low-income, and others) have 
unintentionally led to the creation of concentrated pockets of 
poverty in many of our inner cities. The result has been the 
destruction of neighborhoods.
    The relationship between the Federal government and the PHA 
is contractual. PHAs own and operate public housing in their 
jurisdictions independently of local municipal governments. In 
return for Federal payment of the costs of construction, 
rehabilitation, modernization, and operating expenses, PHAs 
agree to abide by Congressional statutes and HUD regulations. 
Over the years, the rules have multiplied, tying in knots even 
well-run PHAs. In addition, the direct relationship between the 
Federal government and its micromanagement of every aspect of 
the program has led to many local governments viewing public 
housing developments as enclaves of the Federal government over 
which they have very little control or input, and to which they 
are loathe to devote resources.
    Because of the tremendous pressure and commitment within 
both the Congress and the Administration to balance the Federal 
budget by the year 2002, many programs will come under 
increasing budgetary constraints. The Committee believes that 
in this environment of diminishing Federal resources, housing 
programs must change in two significant ways: they must be 
focused through consolidation to provide the most service for 
the least cost; and they must be tailored to local needs so 
that limited Federal funding is invested where, through local 
discretion, it can achieve the greatest return.
    For several years, academic experts, state and local 
governments, and congressional committees have exhorted the 
Department of Housing and Urban Development to limit growth in 
the number of programs and focus on those programs that 
complement its mission. In July 1994, under a congressional 
mandate, the National Academy of Public Administration (NAPA) 
completed its study of HUD, focusing on HUD's organization. One 
of NAPA's conclusions was the following:

          The Academy panel's first priority is a legislative 
        overhaul of HUD's programs. Absent this, other changes 
        will bring only marginal improvement in HUD operations. 
        Congress and the executive branch must work together to 
        redefine and consolidate HUD's assorted program menu 
        and determine whether some programs can be eliminated. 
        Those that remain should be organized under broad 
        mandates that permit the nation's communities to apply 
        the funds flexibly and reduce the administrative 
        burdens within HUD and among its program users.

    NAPA went on to recommend that HUD submit to the Office of 
Management and Budget (OMB) and Congress a comprehensive 
proposal to reorganize HUD programs and group under them 
individual activities. Additionally, in late 1994, HUD's Office 
of Inspector General (OIG) reported on its review of 240 active 
and inactive HUD programs. The OIG concluded that many programs 
warranted serious consideration of elimination, consolidation, 
or restructuring.

B. Rent reform

    Currently, resident rent contributions are largely dictated 
by Federal rules. With few exceptions, residents must pay 30 
percent of their adjusted income for rent. Consequently, as a 
family's income increases, the rent it must pay increases as 
well--in contrast to the private market where rents are 
determined by market conditions and operating costs.
    Prior to 1969, PHAs were relatively financially self-
sufficient and did not receive operating subsidies from the 
Federal government. Instead they charged rents, set at minimum 
and maximum levels, which allowed them to pay normal operating 
expenses. The rent levels were graduated between the minimum 
and maximum levels as appropriate for each resident. In 1969, 
Congress passed legislation (called the Brooke amendment for 
its sponsor, Senator Edward Brooke) prohibiting PHAs from 
charging more than 25% of a family's income for rent. The 
immediate effect upon PHAs was a dramatic loss in revenue. To 
make up for this loss, PHAs were often forced to forgo routine 
maintenance and properties fell into disrepair. The Federal 
government authorized the payment of operating subsidies to 
PHAs in 1972. Three years later, in 1975, virtually all PHAs 
required assistance and subsidies were distributed nationwide.
    Hoping to curb the increasing reliance of PHAs on operating 
subsidies, in 1981, Congress amended the Brooke amendment and 
raised rental contributions to 30% of income. By itself, this 
amendment was not damaging. However, at the same time, Congress 
repealed the ability of PHAs to set maximum rent ``ceilings.'' 
These statutory changes contributed greatly to the destruction 
of the financial integrity of many PHAs. Although the motive 
behind these policies was to encourage everyone to pay their 
own way, the law had just the opposite effect. Because rents 
were raised each time a resident found a job or received a pay 
raise, residents either quit working (or never sought 
employment), or they left public housing.\2\ As working 
families left public housing, the need for operating subsidies 
to make up lost income increased. The incentive to work was 
further eroded when it became apparent that, because of the 
combination of these laws, some families paid rents that 
exceeded the value of their apartment.
---------------------------------------------------------------------------
    \2\ Under the Brooke amendment, assisted families were penalized 
for working because, for every additional dollar they earned, 30 cents 
would be taken away in the form of increased contributions toward rent. 
This high marginal ``tax'' on earnings, when coupled with reduction or 
loss of other income support benefits when families increase their 
earnings from work, created severe disincentives to work. Residents are 
effectively punished for leaving welfare and trying to better provide 
for themselves. It is even possible that the Brooke amendment 
encourages fraud by forcing residents to under report income if they 
want to get ahead. Even worse, in the case of a low-income family 
trying to stay together, the Brooke amendment can destroy families by 
forcing a working parent out of the house because even a low-paying 
temporary job increases a family's rent contribution. Family members 
have to make the decision to either work and take the increase or leave 
the family.
---------------------------------------------------------------------------
    Under this type of rent structure, some families paid no 
rent at all because 30% of an income that is $0 is $0; in other 
words, if a family living in public housing had no income, they 
were not required to pay rent. Nevertheless, the PHA continued 
to pay the utilities of the unit, as well as other normal 
operating expenses such as insurance, maintenance, and security 
which increased the need for operating subsidies. A concurrent 
problem was that PHAs did not have the ability to project their 
rental income because it fluctuated with the income levels of 
the residents. This inability made it virtually impossible for 
PHAs to estimate their future operating subsidy requirements or 
to operate and manage their assets in a businesslike fashion.
    Substantial evidence exists to show that continuing these 
rental policies will damage public housing residents both 
socially and economically. The Public Housing Authorities 
Directors Association (PHADA) has stated repeatedly that an 
AFDC recipient who heads a household and chooses to go to work 
full time at a minimum wage job faces a rent increase that 
contributes to an effective tax rate of anywhere from 117 to 
135 percent. The Georgia Association of Housing Redevelopment 
Authorities has stated that:

          [D]ysfunctional Federal rent policy decisions have 
        created powerful disincentives to employment and upward 
        mobility. The result has transformed once thriving 
        public housing neighborhoods into welfare ghettos--its 
        residents robbed of opportunity and hope and its social 
        fabric rendered inadequate to cope with challenges like 
        drugs, crime and youth gangs.

    It should be noted that working families, because rent is 
tied to income, must pay higher rents than their apartments 
would command in the private market. As a result, residents who 
work to become educated or who advance economically leave the 
developments for the private markets. These individuals provide 
the best role models, and help others find jobs. These are the 
very individuals that add to the social capital of a community.
    H.R. 2406, passed in the 104th Congress, sought to reform 
significantly the rental structure of public housing, focusing 
on several factors: the value of the real estate, the ability 
of the family to pay, and the program's goal to serve low-
income families. Additionally, H.R. 2406 scaled back Federal 
control over admissions policies and preferences so that 
localities can create rental systems that work in their unique 
circumstances.
    Concerns were raised during the 1996 debate on H.R. 2406 
regarding the flexibility granted to PHAs to determine rent 
levels. Resident groups were concerned that PHAs would increase 
rents precipitously. While the Committee believed that much of 
the public housing real estate would simply not support such 
rent increases, H.R. 2 addresses these concerns and maintains 
modified resident rent protections that are tied to the 
resident's income levels. However, instead of mandating that a 
resident pay 30% of their income as rent, a PHA can now charge 
an amount that shall not exceed 30% of the income of the 
resident.
    While this modified 30% rule eliminates the requirement 
that a PHA raise rents on any residents that earn more income, 
the Committee feared that without the prior flexibility 
afforded PHAs under H.R. 2406 to set flat rents across their 
entire inventory, most PHAs in order to maximize revenues would 
raise the rents to the 30% level. Because Federal funding is 
limited in the public housing system, tying rental amounts to 
resident income levels is likely to lead to rent increases upon 
residents who earn more. While a PHA would not be required to 
increase rents, it could increase rents. In the current fiscal 
environment, the Committee believed that PHAs would increase 
rents. Rent-income ratios, therefore, contain the potential for 
continued disincentives to work and self-sufficiency.
    In order to address this dilemma, residents under Section 
225 of H.R. 2, the Family Choice of Rental Payment, are 
afforded a choice annually on whether they would prefer to pay 
rent based on their income (the modified 30% rule), or to pay a 
flat-rent for their unit, determined by the PHA. Of course, a 
resident would always pay the lower amount. However, the 
resident would know that if he or she earned more money, they 
would not be subject to rent increases beyond the flat rent. At 
that point, they could ``switch over'' to the flat rent. In 
addition, if residents were paying the flat rent amount,they 
would not be subject to the burdensome income reviews that PHAs must 
conduct annually to determine rental payments.
    This rental structure essentially creates a requirement 
that PHAs establish a ceiling rent for each unit. Granting 
families the power of choice between income-based rent or the 
flat rent is the enforcement mechanism. The rental option 
places individual power into the hands of the resident, and 
while not perfectly analogous, starts the process by which they 
start thinking of real estate in similar market terms as the 
private sector.
    PHA industry advocates argued that such a structure would 
be administratively burdensome. The Committee finds it 
difficult to understand how a landlord (the PHA) would find as 
administratively burdensome the simple task of assigning a 
rental value to a unit. Every landlord, after all, asks for 
rent. In the private sector, leases are commonly renewed 
annually. At that time, the rent for the unit is discussed. As 
stated previously, PHAs currently review annually each and 
every resident family's income in order to determine an income-
based rent. That type of annual and intrusive review of a 
resident's finances is certainly administratively burdensome. 
This Committee finds extremely unpersuasive the argument 
advanced by PHA groups that informing a resident of a unit's 
flat rent and offering that resident a choice, at the same time 
that income reviews are conducted, would be an administrative 
burden. We find it more likely that PHAs, understandably, would 
simply prefer to retain the freedom and flexibility to increase 
rents.
    While it is true that private sector landlords do not have 
to provide their tenants with this rental choice, private 
sector landlords also do not have to tie their rents to the 
income levels of their tenants. The Committee believes the need 
for this choice of rent structure arises from the very fact 
that imposed upon the system existence are income-rent ratios. 
In addition, inserting a requirement that PHAs determine a flat 
rent for each unit in their inventory would begin the process 
of having these agencies behave more like true property 
managers by inserting a pricing mechanism into the public 
housing system.
    Like H.R. 2406, H.R. 2 requires that residents pay a 
monthly minimum rental amount. H.R. 2's provisions call for a 
PHA to set minimum rents no lower than $25 and no higher than 
$50. Imposing a minimum rent has two purposes: to promote the 
philosophy that public housing is not an entitlement but 
temporary help to families during a period of trouble. Second, 
by allowing a minimum rent, PHAs are able to craft an operating 
budget that makes sense and, more importantly, is predictable--
a necessary component of any well-run business.
    During markup of the Committee's bill, concerns were raised 
that hardship exemptions were not mandated by the legislation 
but were discretionary with the PHA. In particular, much debate 
occurred on the issue of whether legal immigrants who were 
losing benefits in accordance with provisions of the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 
should be afforded a mandatory exemption from payment of the 
minimum rent. Several members were sympathetic but believed 
that issues involving the level of benefits to legal immigrants 
should be discussed in a different forum by other committees of 
Congress with jurisdiction and expertise. Many members 
commented that allowing this mandatory hardship would be in 
effect creating two classes within public housing, since 
citizens who lost benefits under recent welfare reform 
legislation would not receive a mandatory exemption. However, 
it is the intent of this Committee that in granting 
discretionary hardship exemptions for payment of minimum rent, 
PHAs not discriminate against legal immigrants based solely on 
their citizenship status. The same standards developed by a PHA 
regarding the granting of hardship exemptions should be used 
for all residents in the PHA's inventory.
    The Committee heard substantial testimony from HUD 
officials, public housing residents, and many public housing 
industry associations about how desperately rent reform is 
needed to encourage work and retain working families in public 
housing. Moreover, concern was raised that current rental 
policies force PHAs to depend heavily on Federal operating 
subsidies to cover their expenses--a dependence that will only 
increase. A serious problem is that average tenant incomes have 
declined dramatically. In 1981, the median income of a tenant 
in public housing was approximately 30 percent of the area 
median. Today, the median income is approximately 16 percent. 
This decline also has triggered the need for increased 
operating subsidies from HUD to cover costs not paid for 
through tenant rent contributions. According to GAO testimony 
before the House Subcommittee on Human Resources and 
Intergovernmental Relations on February 22, 1995, declining 
tenant incomes--caused in part by the rent rules and the effect 
they have on concentrating poor people in public housing--have 
resulted in dramatic increases in operating subsidy needs over 
the last five to six years. Currently, the need for Federal 
operating subsidies for public housing is over $3 billion per 
year and rising.
    While there has been bipartisan consensus for some time on 
the effect Federal rent rules have had and the need to change 
them, the urgency to do so is much greater this year as 
Congress and the Administration work toward a balanced budget. 
Now, rent reform is a good idea not only because it will do 
more to encourage public housing residents to work but also 
because it will be critical to enable PHAs to attract somewhat 
higher-income families, thereby decreasing dependence on 
Federal subsidies.

C. Community work: requiring responsibility and mutuality of obligation

    The Committee believes housing is a fundamental component 
of bringing true opportunity to people and communities in need. 
However, as set forth in the declaration of policy, the 
Committee also recognizes that merely providing the means to 
house low-income families is not a panacea that will pull every 
family and individual up from poverty. For decades public 
housing and Section 8 housing assistance sought to alleviate 
housing problems; these programs operated in a vacuum with 
little direct involvement assessing the social and economic 
needs of assisted families. Assisted families received housing 
assistance with little or no expectation that they attempt to 
gain the education, job training, and work skills needed to 
better themselves.\3\ H.R. 2 reemphasizes the need for housing 
assistance to be provided as part of a well thought-out 
approach by the PHA to enhance the economic and social well 
being of assisted families and, where appropriate, help break 
the shackles of poverty and dependence. In this regard, the 
bill makes several fundamental changes to the way that current 
housing law has promoted--or not promoted--self-sufficiency.
---------------------------------------------------------------------------
    \3\ This situation began to change in the late 1980s with two 
limited HUD demonstration programs--Project Self-Sufficiency and 
Operation Bootstrap--provided through HUD's Section 8 certificate and 
voucher programs. These demonstrations provided housing assistance, but 
as a condition of receiving such assistance, assisted families were 
required to enroll in programs that fostered self-sufficiency and 
economic independence. The FSS program, while well intentioned, was 
limited in scope: program size was limited to the cumulative number of 
incremental public housing and Section 8 certificate and vouchers 
received after enactment. It did not encompass the nearly 3 million 
families and individuals already receiving HUD rental housing 
assistance. Additionally, the program was bound by a plethora of rules 
and other guidance created by the underlying legislation and HUD 
rulemakers.
---------------------------------------------------------------------------
    One fundamental shift promulgated by H.R. 2 is the belief 
that it is appropriate to demand that recipients of Federal 
assistance meet certain obligations in return for such 
assistance. Among the beliefs inherent in this legislation are 
that Federal housing assistance should be temporary assistance 
allowing a family to advance economically toward self-
sufficiency, that there is a duty on a recipient of assistance 
to pursue vigorously self-sufficiency efforts, and that each 
recipient bears a responsibility to contribute something toward 
the improvement of their community as a means of giving 
something back for this assistance. The Committee strongly 
believes in the principle that there exists a mutuality of 
obligation between recipient of assistance and provider.
    Section 105 of the bill embodies these principles. It 
requires that each public housing resident set a target 
graduation date for when they plan to graduate from Federal 
assistance. The provision requires that the PHA work with the 
resident to identify resources at the local level that may help 
that resident in their self-sufficiency efforts. Additionally, 
Section 105 requires that each adult member in a family 
receiving assistance through public housing or through choice-
based rental housing, agree to contribute not less than 8 hours 
of work per month within the community in which the family 
resides. As an alternative, physically-able adults may agree 
contractually to participate in an ongoing basis in a program 
designed to promote economic self-sufficiency. Exemptions to 
this requirement are provided for the elderly, students, 
persons who are working or are in some sort of job training, 
and those who have disabilities or are otherwise physically 
impaired.
    Concerns have been raised by some that this provision is 
intended to be punitive. Quite the contrary, the Committee 
believes that relegating many of our poor to a life of 
continued dependency and not expecting or demanding positive 
behavior is the cruelest approach to individuals. Benign 
neglect has not improved the lives of people in Federally-
assisted housing.
    David Kuo, Executive Director of The American Compass, a 
charitable organization dedicated to raising money for and the 
profile of small charities that serve the poor, testified 
before the Subcommittee on Housing and Community Opportunity on 
February 25, 1997, stating that the provisions of H.R. 2 
comprise:

          * * * a unique amalgamation of diverse principles of 
        what has come to be called ``effective compassion.'' 
        History and experience both suggest that efforts and 
        programs which are at once challenging--making moral 
        demands of both givers and recipients--personal--where 
        people are engaged and involved in each others lives--
        and spiritual--treating people as though they were more 
        than social security numbers with arms and legs--are 
        the most effective and efficient in meeting the needs 
        of the poor. This bill seems to embody those principles 
        and that is profoundly exciting.

    This provision was modified during markup of H.R.2 to 
ensure that some of the concerns raised regarding time limits 
on public housing, duplication with local welfare reform 
efforts, and exposure of PHAs to increased liability were 
addressed. Specifically, the introduced version of H.R. 2 was 
revised to add language to this provision ensuring that an 
``employment relationship'' would not be deemed by a court to 
have been established for purposes of State or local labor, 
employment compensation, or civil service or other such laws.
    In authorizing the community work requirement, the 
Committee does not intend to adversely affect current workers 
or opportunities for permanent employment. It is the 
Committee's intent that in implementing community work 
requirements, public housing authorities neither directly or 
indirectly displace public housing employees or supplant jobs 
at locations where community work requirements under Section 
105 are fulfilled.
    The revisions to Section 105 clarify that failure by a 
resident to meet a target graduation date shall not be 
considered an event giving rise to possible eviction. The 
revised section exempts those individuals who are complying 
with self-sufficiency requirements that are a result of or in 
connection with local welfare reform efforts, and ensures 
coordination with local welfare reform efforts. For example, if 
a person is sanctioned by a local welfare agency for failure to 
comply with any conditions of assistance, than that person 
shall not be entitled to a decrease in their rent as a result 
of their reduction in income. In other words, if a person that 
is required by local welfare reform efforts to fulfill a work 
requirement as a condition of receiving welfare payments 
refuses to comply, and as a result of that failure to comply, 
their benefits get reduced, that recipient cannot go to the PHA 
and demand that their rent be reduced because they now have no 
money to pay.
    The Committee bill requires that PHAs, as part of their 
local housing management plans, describe how the authority will 
coordinate with State welfare agencies to ensure that public 
housing residents and families assisted through choice-based 
housing will be provided the access to resources to assist in 
obtaining employment and achieving self-sufficiency. Under this 
provision, PHAs are given the latitude to develop initiatives 
and use innovative techniques to foster service delivery 
without detailed direction from Congress or HUD.
    The Committee would like to note that the idea that 
individuals, in order to add to their community, should be 
asked to perform certain duties is not a new one. This notion 
of community building and of individuals working together in 
positive ways is at the heart of our Nation. In many cases, 
this notion has already taken hold in public housing 
developments, where resident groups have become a force for 
positive change. An example involves the Housing Authority of 
the City of Milwaukee and how it has worked with its resident 
groups at the Hillside Terrace development. Residents of this 
development are asked to sign a Lease Addendum, which states 
that as a condition of occupancy residents shall, among other 
things: (1) attend at least 6 resident council meetings per 
year, (2) enroll and actively participate in the neighborhood 
block watch program in the micro neighborhood in which they 
live, (3) have all minor children enrolled in at least one 
supervised youth activity, (4) agree to clean and maintain the 
common areas according to a schedule, and (5) complete at least 
4 hours per month of volunteer service within the Hillside 
Terrace community. Because of the active community involvement 
and required participation on their block watch program, the 
residents of Hillside Terrace have managed to effect a dramatic 
reduction in the crime rate that once afflicted their 
neighborhood.
    The Committee believes that the goals of H. R. 2 of 
increasing the community involvement of those residents who are 
not employed or otherwise exempted from Section 105, so that 
the community benefits, is a reasonable obligation to ask of 
persons who are receiving a valuable and scarce public benefit. 
For example, Habitat for Humanity, a volunteer organization 
that builds homes for low-income person, requires each person 
who has such a home built for them to agree to volunteer in 
helping build a home for another. This striving toward 
community is not a partisan matter, nor does the Committee 
believe it should be. In fact, the Committee believes that the 
Administration's efforts in support of the Americorp program 
parallel to a great extent the goals of this legislation. The 
Committee notes that the public housing reform legislation 
submitted by Secretary Cuomo and introduced upon request by Mr. 
Lazio and Mr. Kennedy also contains a requirement that each 
adult member of a family residing in public or assisted housing 
contribute not less than 8 hours per month in community service 
activities.\4\
---------------------------------------------------------------------------
    \4\ The Public Housing Management Reform Act of 1997, H.R 1447, 
Section 111.
---------------------------------------------------------------------------
    The Committee intends that PHAs, in complying with this 
provision, have the ability and flexibility to partner with 
resident councils and management corporations, local volunteer 
groups, and other groups doing work in the community that 
couldincorporate and use these residents. PHAs can enter into 
agreements with Resident Management Corporations to conduct much of the 
community service work. Activities such as participating in block watch 
programs to help fight crime, as in Milwaukee's Hillside Terrace, 
working as crosswalk guards to oversee children coming home from 
school, and participating in graffiti clean-up projects--these are just 
a few examples of what can be accomplished.
    D. Promoting mixed-income developments: federal preferences 
and income targeting
    The Committee agrees with the belief that three of the key 
structural consequences of the existing public housing program 
are that (1) public housing concentrates the very poor, (2) 
public housing itself is concentrated in high poverty 
neighborhoods, and (3) Federal laws penalize public housing 
tenants who work.\5\ The initial intent of the public housing 
program was to help house the working poor. Yet the Committee 
notes that over time, legislation and subsequent Federal 
regulations have forced PHAs to admit a larger proportion of 
very low-income persons while simultaneously creating 
disincentives to work and self-sufficiency. These mandates 
include instituting Federal preferences that require PHAs to 
admit to public housing certain individuals (namely the poorest 
of the poor) before low-income working families. Additionally, 
very high income targeting requirements (provisions on the 
percentage of public housing units that must only be used for 
extremely low-income persons) are imposed on PHAs. Coupled with 
the disincentives created by strict income-rent ratios (the 
Brooke Amendment), these Federal mandates created a dynamic 
where higher numbers of extremely low-income individuals were 
admitted to public housing while working families were 
discouraged from remaining. As the National Commission on 
Severely Distressed Public Housing reported in 1992:
---------------------------------------------------------------------------
    \5\ HUD Secretary Henry Cisneros testimony before the Senate 
Committee on Banking, Housing, and Urban Affairs on September 28, 1995.

          Federal statute-mandated preferences, income 
        standards, and rent-to-income ratios have effectively 
        excluded the `working poor' from public housing and 
        that authorities should be allowed to admit residents 
        based on a range of eligible income levels to promote a 
        higher level of economic activity within public housing 
---------------------------------------------------------------------------
        communities.

    The overall effect of Federal policies has been to 
warehouse low-income families and individuals in public 
housing, without role models, networks, or adequate 
opportunities to interact with the mainstream economy--in 
essence creating a poverty trap. The Committee firmly believes 
that we must not only discontinue these policies, but that they 
should affirmatively and aggressively move toward reversing 
their effects and establish policies which lead to the creation 
of mixed-income communities.
    Noted social policy researcher William Julius Wilson has 
written on the necessity to create mixed-income communities. In 
``The Truly Disadvantaged: The Inner City, the Underclass, and 
Public Policy,'' he refers to the concept of mixed income as 
creating a ``social buffer'' which is:

          The presence of a sufficient number of working- and 
        middle-class professional families to absorb the shock 
        or cushion the effect of uneven economic growth and 
        periodic recessions on inner-city neighborhoods * * * 
        the removal of these [higher income] families made it 
        more difficult to sustain the basic institutions in the 
        inner city (including churches, stores, schools, 
        recreational facilities, etc.) in the face of prolonged 
        joblessness. And as the basic institutions declined, 
        the social organization of inner-city neighborhoods 
        (defined here to include a sense of community, positive 
        neighborhood identification, and explicit norms and 
        sanctions against aberrant behavior) likewise declined 
        * * * [.]
          It is true that the presence of stable working- and 
        middle-class families in the ghetto provides mainstream 
        role models that reinforce family structures. But, in 
        the final analysis, a far more important effect is the 
        institutional stability that these families are able to 
        provide in their neighborhoods because of their greater 
        economic and educational resources, especially during 
        periods of an economic turndown--periods in which 
        joblessness in poor urban areas tends to substantially 
        increase.

    The Committee bill moves Federal policy in this direction 
by eliminating Federal preferences, changing the levels of 
income targeting, and providing PHAs with added flexibility in 
achieving these income targets.
            Federal preference rules
    Prior to the imposition of Federally-mandated preferences, 
local PHAs and project owners, at their discretion, often 
adopted admissions policies that gave preferences to certain 
applicants. At first glance, it is easy to understand why PHAs 
utilized preferences, particularly in the cases of natural 
disasters or displacement resulting from Federal actions. In 
1979, however, mandatory Federal preferences were enacted and 
have expanded over the last decade to include applicants 
involuntarily displaced, living in substandard housing, or 
paying more than 50% of family income for rent. The result has 
been that certain groups of people have moved to the top of 
waiting lists, ahead of other local applicants for housing.\6\
---------------------------------------------------------------------------
    \6\ According to HUD's PD & R 1989 report, ``Characteristics of 
HUD-Assisted Renters and Their Units in 1989, among families that 
participated in assisted housing programs in 1989, public housing 
residents had the lowest median household income. Only 35 percent of 
public housing residents reported their primary source of income was 
from wages/salaries. Meanwhile, almost 50 percent of residents reported 
that they received their primary income from welfare, Supplemental 
Security Income, and/or food stamps.
---------------------------------------------------------------------------
    Any rent reform should be coupled with the elimination of 
Federal housing preferences, and H.R. 2 permanently eliminates 
Federally-mandated preferences in favor of authorizing PHAs to 
develop locally-based admission preferences aimed at producing 
a mix of tenant incomes. During the Committee markup of H.R. 2, 
instituting a preference for victims of domestic violence was 
discussed as perhaps one preference which should be imposed by 
the Federal government. A proposed amendment on this issue was 
subsequently withdrawn when it became clear that there are many 
other populations with particular characteristics that might be 
as deserving of preferential treatment in obtaining shelter. 
The Committee bill instead provides for a sense of the Congress 
that PHAs should make some efforts to address this need at the 
local level. However, the language in the Committee's bill 
regarding this issue should not be construed as a Federal 
mandate, but rather a matter of local preference.
            Income targeting
    One of the most difficult issues the Committee faced during 
development of this public housing reform legislation involve 
the issue of the level of income targeting appropriate for 
targeting assistance in public housing. At odds were two very 
worthwhile goals: (1) encouraging the creation of mixed-income 
communities that offered healthy environments to residents, and 
(2) ensuring that the housing needs of our poorest citizens be 
addressed. A related and contentious issue was whether the 
final income targeting levels would be applied to the PHA's 
current profile inventory (``profile targeting'') or to new 
entrants into the inventory (``new entrants targeting''). 
Profile targeting allows a PHA to diversify its population more 
quickly by admitting working class families; thereby moving 
more quickly in the direction of creating mixed-income 
communities. ``New entrants'' targeting directs public housing 
resources at the poorest of the poor--ensuring that these 
individuals also are given access to Federally-assisted housing 
resources.
    Under the targeting provisions of H.R. 2 as introduced 
(which were based on profile targeting), 35% of public housing 
units would be occupied by those at or below 30% of area median 
income. For the choice-based program, the level would be 40%. 
Concerns were raised with using profile targeting because most 
PHAs already exceed these targeting levels. Consequently, many 
PHAs would not be required to admit those families under 30% of 
area median income for a significant period of time. Housing 
assistance would possibly be denied to the poorest families 
since PHAs would be moving to create mixed-income communities. 
Simply applying these same targeting levels to new entrants, 
however, was itself problematic because it would severely 
restrict PHAs from creating mixed-income, healthy and stable 
communities.
    During markup of H.R. 2, Mr. Lazio, Chairman of the 
Subcommittee on Housing and Community Opportunity, offered a 
Manager's Amendment which provided a compromise on the income-
targeting issue that addressed both the Committee's desire to 
create mixed-income communities while at the same time ensuring 
that the poorest are not excluded from admittance to public 
housing for what could have been several years. At the request 
of Mr. Kennedy, Ranking Member of the Subcommittee on Housing 
and Community Opportunity, this provision was removed from the 
Manager's Amendment and offered as a freestanding amendment by 
Mr. Lazio so that it could be debated in the context of income 
targeting. Mr. Lazio's amendment to H.R. 2 addressed the 
``profile targeting'' vs. ``new entrants'' issue by 
establishing fungible targeting requirements between the public 
housing and choice-based programs and applying targeting levels 
to new entrants. This ``fungibility feature'' is added as a 
subparagraph 3 to Section 222(c) of H.R. 2.
    Under current law and under the provisions of H.R.2 as 
introduced, distinct income targeting requirements are 
established for the choice-based and public housing programs. 
Mr. Lazio's amendment, by inserting a fungibility feature 
between both programs, allows a PHA to offset the targeting 
requirements on new entrants in its public housing stock with 
increased voluntary targeting in the choice-based program. For 
example, under H.R. 2 as amended by Mr. Lazio's fungibility 
feature, a PHA that in a given year has 100 units of public 
housing available for occupancy must offer 35 of those units 
(35% being H.R. 2's public housing targeting levels) to 
families with incomes at or below 30% of area median income. 
The same PHA must offer 40% of its available choice-based 
assistance to those at or below this level of income. However, 
because these targeting requirements are now fungible, a PHA 
can reduce the number of public housing units that it must make 
available to those at or below 30% of area median income by 
offering them choice based assistance that is additional to the 
choice-based assistance (40%) targeted to this group. In the 
example of the PHA with 100 units available for occupancy, 
therefore, the PHA can meet its targeting requirements by 
either (1) making 35 units available to families at or below 
30% of area median income or (2) providing these 35 families 
with choice-based assistance (above the level of targeting for 
choice-based) and offering all 100 public housing units to 
families above this level of income so as to promote mixed-
income developments.
    Obviously, the PHA could meet its targeting levels using 
combinations between these two options, but the important point 
to note is that the same number of very poor families would 
have received housing assistance under either scenario. Because 
choice-based housing assistance is not as subject to the same 
concerns regarding excessive overconcentration of poverty that 
public housing assistance creates, PHAs should be given the 
flexibility to offset public housing targeting with higher 
levels of choice-based targeting. In this manner, a PHA that 
needs to create mixed-income developments will have increased 
flexibility to do so, as long as they provide additional 
resources to the poorest in their choice-based housing 
programs.
    The Committee's bill eliminating Federal preferences and 
establishing new fungible income targeting requirements would 
go a long way toward allowing PHAs to create healthy and stable 
communities. These communities provide role models and a 
neighborhood infrastructure that enables residents to move into 
employment and self-sufficiency. Unemployed families in mixed-
income developments can see working families as role models; 
the presence of working families promotes the development of 
needed economic and community institutions--schools, stores, 
churches, that comprisethe social capital of a community. 
Without the changes in Federal housing policy found in H.R. 2, the 
Committee believes that another generation of our young citizens may be 
trapped without exposure to the proper role models, or access to the 
opportunities that may exist for them in their community's economic 
mainstream.

E. Providing local flexibility and encouraging innovation

            Flexibility and decontrol for PHAs
    Historically, housing authorities have been responsible for 
carrying out Federal public and assisted housing programs with 
little interaction in broader community development activities. 
Today, public housing policy is shaped and controlled almost 
exclusively by the Federal government. PHAs do not control the 
mix of tenants they admit because HUD regulations dictate 
admission preferences. Moreover, the chasm between housing 
authorities, the local government and the community has 
increased the isolation of the public housing residents 
themselves, and has sometimes hampered the ability of housing 
authorities to obtain other much-needed services for public 
housing residents. The Committee believes that the enactment of 
welfare reform and budget reductions make it increasingly 
necessary for local governments, the PHA, and community 
residents to work together using available resources to make 
public housing a viable part of the broader community.
    In addition, the Committee believes that too many narrowly 
focused programs with so many set-asides result in local 
communities having great difficulty allocating Federal 
resources to respond to specific needs. In turn, limited 
Federal assistance for housing programs is diluted among too 
many programs, with the programs that provide real housing 
assistance receiving too little attention and funding. The HUD 
Inspector General's report listed 92 programs whose 
relationships to the Department's primary mission were 
questionable. Further refinement of the Inspector General's 
analysis by GAO showed that 27 programs from the IG's list of 
92 did not provide direct housing assistance though they 
received $1 billion in Federal funds during 1995.
    The Committee believes Federal deregulation coupled with 
increased accountability are the keys to transforming public 
housing into a viable resource for low-income families into the 
next century. Each year PHAs must submit volumes of data to HUD 
so that HUD can monitor their financial and management 
performance, despite the fact that the majority of PHAs are 
adequate performers. Deregulation involves letting PHAs manage 
their programs and report to HUD only when necessary. 
Accountability requires PHAs to achieve results, managing their 
housing inventory in a manner that is fiscally prudent and that 
provides clean, safe and healthy homes.
    The Committee envisions an administrative apparatus for 
public housing that is leaner, simpler, and more sensible. HUD 
will go from issuing subsidy or grant payments for many 
programs--operating subsidies, modernization, drug elimination, 
resident programs, demolition/disposition, development, and 
resident initiatives, and others--to issuing just two forms of 
block grants. Instead of reviewing each PHA's operating budget, 
modernization plans, and other management-related paperwork 
annually during the PHMAP process, HUD will put more focus on 
PHAs who are found to be troubled and/or whose plans do not 
adequately serve the jurisdictions low-income population. At 
the same time, PHAs will be transformed from entities 
administering a program shaped, funded, and regulated by the 
Federal government, to entrepreneurial bodies acting as asset 
managers in a way that meets generally accepted professional 
standards.
            Flexibility for small public housing authorities
    The Committee approved an amendment that provides state 
governments with the option to request that 50% of the capital 
funds for all small PHAs within the state be directed to the 
state for distribution to those PHAs. Too often, small PHAs are 
frequently unable to develop reserves to meet the high costs of 
significant and/or capital improvements. The Committee bill 
establishes a procedure whereby these small PHAs may compete on 
a local level for much needed capital improvement funds. 
Specifically, a Governor may request, and HUD shall provide, 
that one-half of the capital improvement allocations under the 
public housing block grants for all small PHAs (defined as 
those under 100 units) located in that state be sent directly 
to the state. The Governor will than have the responsibility, 
subject to applicable state appropriation laws, to distribute 
all of the funds to the small PHAs, with priority given to 
exceptional capital improvement needs of these small PHAs. The 
Committee believes that this option will further empower local 
elected officials to better meet the needs of residents of 
small public housing authorities.
            Flexibility for communities: The home rule flexible grant 
                    option
    The Committee believes that the Federal government should 
rely more on the ingenuity and commitment of local elected and 
community leaders in developing solutions to the problems faced 
by our cities. The notion that Washington knows best in all 
matters has led to many of the problems that have arisen with 
our policies, such as Federal mandates and strict rent-income 
ratios. A major goal of H.R. 2 is to establish into law a 
mechanism that would encourage local communities to integrate 
their resources and coordinate these resources at the local 
level, in a concerted effort to meet the housing needs of their 
citizens. A balance must be achieved between the need to grant 
localities great flexibility while maintaining the Federal 
commitment to housing and ensuring that taxpayer dollars are 
used as effectively as possible for the purposes intended.
    In order to accomplish these goals, the Committee's bill 
establishes a voluntary mechanism for local jurisdictions to 
develop their own housing programs as alternatives to the 
Federal assisted housing programs, subject of course to HUD 
approval. Title IV of H.R 2 establishes the Home Rule 
Flexibility Grant Option, which requires that HUD provide local 
government leaders the option to combine Federal housing 
assistance funds into a flexible seamless grant for use in 
meeting the housing needs of their communities. The funds must 
be used by these communitiesfor purposes of providing housing 
for low-income families. For jurisdictions wishing to participate, 
there is required a submission to HUD of locally-developed proposals 
for using current Federal funds in more effective and meaningful ways 
to meet a community's needs. Upon HUD approval, local governments are 
given the administrative flexibility from Federal rules and regulations 
that is needed to make their programs work at the local level. In order 
to encourage innovation, jurisdictions that create alternative programs 
under Title IV are guaranteed the same level of funding that would have 
been provided under their original categorical HUD programs.
    As Mayor Goldsmith of Indianapolis said in his testimony 
before the Subcommittee on Housing and Community Opportunity:

          I think the Home Rule option provides an opportunity 
        for local government to respond to the triple 
        challenges of welfare reform, expiring HUD subsidies 
        and failed public housing. * * * Cities, PHAs, and the 
        Federal government must respond to these issues in a 
        holistic manner. Public housing does not exist in a 
        vacuum. Title [IV] provides an opportunity to use the 
        available resources to develop a program that responds 
        to local needs and conditions.\7\

    \7\ Testimony before the Subcommittee on Housing and Community 
Opportunity, March 11, 1997.
---------------------------------------------------------------------------
    The Committee would like to emphasize the voluntary and 
cooperative approach envisioned by this legislation. Only local 
leaders who truly want to institute what they consider 
innovative or improved methods of solving their communities' 
housing problems need apply. For those who are satisfied with 
how Federal housing programs are working in their particular 
communities, or who do not believe they would have the 
capability to accomplish more than the Federal programs, the 
Federal low-income housing programs will continue to provide 
assistance to low-income persons in their communities with no 
adverse funding consequences.
    The Committee believes that accountability in programs will 
be increased. Localities will enter performance agreement 
contracts with HUD, not to exceed five years, with specific, 
measurable goals. Focus is shifted from compliance with 
burdensome Federal rules concerned with process, to the 
achievement of mutually-agreed upon results.
    Substantial additions and revisions were made to Title IV 
in response to concerns raised by the PHA industry, and the 
Committee believes these comments have added to and improved 
the concept. Delineated in the statute are specific 
requirements that the Secretary of HUD must review, prior to 
the Secretary approving any local plan. Included among these 
many protections are requirements that information be provided 
by the local jurisdiction enabling the Secretary to determine 
that (1) the jurisdiction has the requisite management and 
administrative capacity to carry out the plan; (2) that the 
jurisdiction's plan does not lead to excessive duplication of 
administrative efforts; (3) that the plan contains information 
demonstrating the functions and activities of the local public 
housing agency; and (4) that these housing funds remain 
separate from other city funds to ensure they are used for the 
purposes intended.
    Further provisions added to H.R. 2 provide that local 
public housing authorities have adequate opportunity to comment 
on alternative housing plans submitted to HUD. In addition, 
where jurisdictional concerns regarding funding may arise, all 
localities must consent to the plan. Because of their very 
different situations, H.R.2 also allows the Secretary to 
establish different requirements in the case of troubled PHAs.
    The Committee believes that this is the type of government 
structure that could lead to real reform and solutions to many 
of the problems facing our communities. As Secretary Cuomo 
stated, ``the object of our efforts must be the development of 
self-sufficiency, not the perpetuation of programs.'' \8\ H.R. 
2 establishes into law a mechanism for encouraging innovation 
and fostering greater coordination of resources at the local 
level. The Committee does not intend by this Title to supplant 
PHAs or end the good work that well-run authorities accomplish. 
In fact, clarification is provided that nothing in Title IV 
requires that a city takeover or require a change in the legal 
status of the PHA under its jurisdiction. Quite the contrary, 
the Committee envisions local forces, including the PHA, 
joining in an effort to accomplish the goals of moving people 
from dependency to self-sufficiency, of creating more stable, 
healthier communities, without the unnecessary and overly-
bureaucratic interference from agencies at the Federal level.
---------------------------------------------------------------------------
    \8\ Testimony given at confirmation hearing before the Senate 
Banking Committee, January 23, 1997.
---------------------------------------------------------------------------
    In order to attack the severe isolation of many of public 
housing developments and bring residents into the economic 
mainstream of the greater communities, it is imperative that 
local leaders take an interest in these developments rather 
than treating them as Federal enclaves within their cities. The 
Committee believes that this level of increased commitment to 
developing innovative and interrelated programs--which could 
involve a commitment by a jurisdiction of its own scarce 
resources to attacking these problems, is unlikely to occur 
unless we allow the flexibility to fashion and administer a 
program that works at the local level. Based on testimony heard 
and the experience of Members of this Committee, local 
governments are hesitant to commit time or resources to these 
various problems because of the belief that the Federal 
government, through its uniform polices and through HUD, will 
undermine their success.
    The Committee believes that only when many cities and PHAs 
experiment at the local level will we begin to develop workable 
models for ending the problems of public housing. To this end, 
Title IV has been drafted so as not to be overly prescriptive 
so that innovation can occur. In developing procedures for 
implementation of Title IV, it is theintent of this Committee 
that HUD not be prescriptive so as to frustrate its overall intent. It 
is the Committee's view that HUD should not only be in the role of 
assuring that overall Federal goals are achieved, but also be in a 
consultant role, helpful to localities in developing plans that address 
their needs adequately.

F. Evaluation and monitoring of PHA performance

    The Committee notes that HUD has in the past been unable to 
properly evaluate the performance of program participants, 
including PHAs. Much of this can be attributed to the 
management problems endemic to HUD. According to Susan Gaffney, 
Inspector General of HUD, in testimony given before the 
Subcommittee on Housing and Community Opportunity on March 11, 
1997:

          HUD does not have a very good track record when it 
        comes to managing its programs. It has failed dismally 
        in some cases. In fact, in 1994, the General Accounting 
        Office (GAO) designated HUD as a ``high-risk'' area, 
        the first cabinet level agency to be so designated by 
        GAO. In subsequent testimony before Congress, GAO 
        stated that HUD programs would continue to be at high 
        risk in the foreseeable future.

    In 1990, the Congress enacted the Public Housing Management 
Assessment Program (PHMAP) so that HUD could measure PHA 
performance in nine basic areas of their operations. The PHMAP 
data, collected annually by HUD, was supposed to differentiate 
between those PHAs that worked well (``standard'' or ``high'' 
performers) and those that needed significant management 
improvements (``troubled'' PHAs). Those PHAs that HUD 
determined to be troubled were subjected to closer scrutiny by 
HUD, often receiving technical assistance and monitoring 
intended to raise their scores to non-troubled status. 
Developments with serious and extreme social and structural 
problems were deemed ``severely distressed'' and became 
eligible for HOPE VI grants of up to $50 million to 
rehabilitate no more than 500 housing units.
    Whether due to the inherent structure or design of PHMAP, 
management failures on the part of HUD Headquarters and Field 
staff in its execution when conducting evaluations of PHAs, or 
perhaps due to both, this Committee is unconvinced that, in and 
of itself, PHMAP is an adequate tool for monitoring PHAs.
    The Committee believes the PHMAP system rewards failure. 
The most significant attention, assistance, and additional 
funding a PHA can get often comes only when its condition has 
deteriorated to the point of being troubled or severely 
distressed. For example, a PHA executive director testified 
before this Committee that when his authority was designated as 
a high performer under PHMAP, he received a letter of 
commendation from the HUD Secretary, while a nearby, long-
troubled authority was awarded a $49 million HOPE VI grant to 
rehabilitate its most distressed properties. Furthermore, 
evidence exists that the PHMAP does not encourage PHAs to 
engage in continuous improvement (that is, beyond what it takes 
them to avoid the ``troubled'' designation). To make things 
worse, high performing PHAs are subjected to the same rules, 
regulations, paperwork, and other reporting requirements 
applied to standard and poor performers.
    PHMAP has also been criticized because its indicators do 
not measure the actual quality of housing or the living 
conditions provided to residents. The HUD Inspector General 
testified before the Subcommittee on Housing and Community 
Opportunity on March 11, 1997, that:

          The problem with PHMAP is that it's an incomplete 
        system. It does not provide an all-inclusive and 
        encompassing view of a housing authority's operations, 
        and it's somewhat process-oriented. So what can happen 
        under PHMAP is that a housing authority can receive a 
        standard (or even high-performing) rating under PHMAP, 
        yet its tenants may be residing in less than decent or 
        deteriorating housing. The most important 
        responsibility of housing authorities is to ensure that 
        their residents are provided with safe and decent 
        living conditions; yet PHMAP fails to measure the 
        performance of housing authorities in this regard.

    Furthermore, PHMAP has been criticized as being too 
inflexible, leaving PHA executive directors feeling that it is 
necessary to adapt external standards to their individual, 
unique operating conditions. Though HUD continues to attempt to 
revise the PHMAP indicators to more closely parallel private 
sector real estate management practices, it is the fear of this 
Committee that PHMAP will remain a tool with which HUD measures 
compliance rather than performance or improvement.
    H.R. 2406, the predecessor to H.R. 2, sought to change 
dramatically the way oversight of public housing is conducted 
by establishing a system of accreditation, similar in concept 
to those in place for hospitals and universities, intended to 
reward performance and to improve public housing management. 
Accreditation would both eliminate the specific problems with 
PHMAP and would, this Committee believed, served as a better 
tool for fostering and providing incentives for continuous 
improvement in public housing management. H.R. 2406 called for 
the establishment of a Housing Foundation and Accreditation 
Board, consisting of housing and real estate management 
professionals who were to develop standards, evaluate PHA 
performance, and provide sound technical assistance so that all 
PHAs could work to improve their performance.
    HUD expressed concerns that establishment of an 
accreditation board would simply create another oversight 
bureaucracy outside of HUD. In contrast to H.R. 2406, H.R.2 
establishes an accreditation board but does not grant it powers 
to begin pending completion of a study of alternative methods 
for evaluating the performance of PHAs. The Committee would 
hope that the National Academy of Public Administration conduct 
the study. The accreditation board is established in advance of 
the study for two reasons. First, the Committee believes that 
some form of future accreditation will benefitthe public 
housing program. An accreditation system will develop professional 
standards, and provide an objective and a non-political assessment of 
how well a PHA meets those standards. Second, the Committee would like 
a structure in place to implement the findings of the study. If such 
study concludes that an accreditation system would be unwise for the 
public housing program, then Congress will be in a position to either 
change the focus of the accreditation board in accordance with the 
study's findings, or simply eliminate the Board.
    The Committee bill seeks to transform HUD's oversight from 
a bureaucratic, paperwork-heavy system focused on compliance 
with HUD rules and regulations into one that identifies areas 
where good performers can improve, and offers technical 
assistance to foster continuous improvement among all PHAs. 
Under the provisions of H.R. 2, HUD will set broad parameters 
within which PHAs will operate, monitor PHAs to see that they 
stay within those parameters, provide flexible block grants for 
PHAs, and address aggressively the small minority of PHAs that 
prove to be troubled or are at risk of becoming troubled. These 
new approaches will give local programs the best chance of 
achieving their goals. In addition, reassigning 
responsibilities in this manner will reduce the demands on 
HUD's bureaucracy. HUD will not be required to be heavily 
involved in day-to-day details of PHA operations. By 
emphasizing local development and management of operating 
policies and consolidation of numerous subsidy programs into 
two block grants for operating costs and capital costs, the 
bill minimizes the need for Federal bureaucracy and its 
administrative requirements.
    In terms of increasing the power the Secretary has in 
addressing PHAs that have clearly failed, the Committee's bill 
(1) requires that HUD take over or replace the management of 
chronically troubled housing authorities (those large 
authorities that have been troubled for three or more 
consecutive years) or petition to appoint a receiver; (2) 
substantially broadens the authority of the Secretary to 
require remedial or disciplinary actions against PHAs that are 
or become troubled; and (3) gives the Secretary authority to 
take action when HUD determines a PHA is at risk of becoming 
troubled.

G. Opportunities for residents

            Homeownership opportunities
    One of the Committee's continued goals is to encourage 
homeownership by as many American families as possible. Over 
the past 12 years HUD has had extensive experience with public 
housing homeownership. H.R. 2 builds on that experience and is 
designed to encourage development of a wide variety of 
approaches to the sale of public housing to residents. The 
Committee's bill gives PHAs the authority to create and 
implement resident homeownership programs to encourage public 
housing families and families eligible for public housing to 
become owners of their own homes by purchasing existing public 
housing units and other housing projects available for purchase 
by low-income families. H.R. 2 allows PHAs to sell public 
housing authorities to non-profit intermediaries, for eventual 
resale to low-income residents.
    The Committee's belief is that creative solutions to 
various issues associated with these resident sales can best be 
developed at the local level, by people most familiar with the 
particular situations. Therefore, the Committee bill sets forth 
certain basic requirements which all applicants must meet; the 
bill leaves most issues open to local solution. In particular, 
each family is required to provide not less than 1 percent of 
the purchase price from its own resources as a downpayment. 
However, a family is permitted to use grant amounts, gifts from 
relatives, contributions from private sources, and similar 
amounts as downpayment amounts. The provision also allows the 
authority to recapture funds from the resale of dwellings 
bought by a purchaser with government assistance. Purchasers 
who sell a dwelling after purchase are required to refund any 
financial gain in excess of the original purchase price they 
received from the sale of the property. After five years, 
homeowners must provide a refund for the assistance they 
received from the local authority.
    Importantly, H.R. 2 provides a new avenue for helping low-
income families achieve homeownership--allowing the use of 
choice-based assistance in homeownership programs. The 
Committee believes that it is simply wise policy to allow a 
person receiving an amount of Federal money to use for rent, to 
use that same amount as a component of a mortgage in a properly 
structured homeownership program.
    The hope and intent of this Committee that PHAs will use 
the flexibility provided by this bill to create diverse 
homeownership programs designed to allow families to have a 
stake in their neighborhoods. Lease-purchase programs involving 
both public housing and choice-based housing, partnerships with 
local groups involved in homeownership, and other such 
proactive solutions are strongly encouraged.
            Resident Opportunity Program
    To further emphasize the goal of creating opportunities for 
residents, the Committee bill includes a Resident Opportunity 
Program. This provision builds upon the current Resident 
Management Technical Assistance and Training Program that funds 
resident councils, organizing efforts among public housing 
residents, and Resident Management Councils. As a means of 
improving existing living conditions in public housing 
developments, this program provides increased flexibility for 
developments that are managed by residents by permitting the 
retention of, and use for, certain purposes, any revenues 
exceeding operating and project costs. The Committee intends 
that residents should be rewarded for their successes by 
further investing excess operating income for project purposes, 
including job creation.
    The program is intended to build the capacity of public 
housing residents to participate in their own self-sufficiency 
and economic improvement through the organization of residents 
and resident councils, and is meant to broaden opportunities 
for public housing residents to teach job skills and widen 
employment opportunities, including their own small businesses.
    However, the Committee is concerned with the potential 
waste of scarce public housing resources on questionable 
resident training activities and travel expenditures funded 
through HUD's Tenant Opportunity Program (TOP).\9\ 
Nevertheless, the Committee is aware of numerous successful 
resident-managed public housing developments throughout the 
country. Recognizing these successes, the Committee maintains 
the Resident Opportunity Program as a separate program for 
fiscal year 1998. However, it is the Committee's intent that 
after fiscal year 1998, the Resident Opportunity Program become 
integrated with the public housing block grant authorized in 
Section 201. The Committee notes that Section 203 includes 
resident management activities as an eligible purpose of block 
grant funds. The program is authorized at $15 million for 
fiscal year 1998.
---------------------------------------------------------------------------
    \9\ On November 9, 1995, the House Subcommittee on Human Resources 
and Intergovernmental Relations examined evidence that HUD approved TOP 
funds for a public housing tenant convention in a Puerto Rico resort 
hotel and casino billed by its sponsors as ``a vacation that will be 
unforgettable.'' Evidence exists that several programs were clearly 
political in nature. The TOP Notice of Funding Availability clearly 
states in the list of eligible and ineligible activities that the TOP 
grant may not be used for entertainment or lobbying purposes.
---------------------------------------------------------------------------

H. Troubled public housing and severely distressed developments

    Troubled public housing authorities, especially large 
authorities, have persistently plagued HUD's public housing 
program. The less than 70 truly poor performing PHAs give the 
rest of the 3,400 housing authorities a bad reputation. Eleven 
of the largest housing authorities (those with 1,250 units or 
more) operate most of the distressed, dilapidated, and boarded 
up housing stock. In fact, these 11 troubled housing 
authorities make up approximately 200,000 units of public 
housing, or almost 15% of the entire public housing inventory. 
These 11 troubled housing authorities, many have been troubled 
since 1979 when HUD began keeping track of such performance. 
Because of the excessive cost and poor housing services 
associated with troubled authorities, the Committee and the 
Administration believe it is crucial to develop a strategy to 
address effectively incorrigible PHAs.
    A condition that contributes significantly to a troubled 
authority's problems is a high vacancy rate. Although public 
housing vacancies nationwide average approximately 8 percent 
(approximately 100,000 units), the GAO reported that 27 large 
housing authorities account for about half of the vacant units, 
implying that vacancies tend to be concentrated in relatively 
few places. Furthermore, vacancies generally are not evenly 
distributed within specific housing authorities. GAO reported 
that at 41 housing authorities managing 70 developments with 
vacancy rates exceeding 70 percent, 57 of the 70 developments 
contained almost 1200 buildings that were completely vacant.
    However, if these or other housing authorities try to 
demolish or sell off any of their vacant or uninhabitable 
buildings, without permanent public housing reform, under 
current law they must replace the housing units on a one-for-
one basis with new or other viable housing or provide 
equivalent rental assistance to the tenants (this requirement 
has been temporarily repealed on a year-to-year basis through 
appropriations measures since the 1995 rescission bill). Lack 
of money is not the only problem. When a PHA plans to demolish 
or dispose of deteriorated public housing, Federal regulations 
require HUD approval of both the PHAs application for 
demolition or disposition and its plan to replace the housing. 
Extensive documentation and plans must be included with any 
such application. The approval process is lengthy and in the 
past has sometimes taken years.
    Coupled with the one-for-one replacement rule are site and 
neighborhood standards, designed to ensure that minority and 
low-income families are provided with housing opportunities 
outside of housing market areas to which they have been 
traditionally limited. According to HUD regulations, proposed 
sites where public housing developments will be constructed or 
rehabilitated must meet strict standards. These standards 
present huge barriers to providing decent housing. PHAs in 
cities with large proportions of minority groups are 
effectively precluded from building new housing. PHAs in other 
cities cannot build because of the high cost of acquiring land 
that meets the standards and does not pose undue difficulties 
in reaching agreements with existing community groups about 
locating assisted persons in their neighborhoods.
    In combination, these two provisions contribute to the 
continuation of severely distressed sites as well as to 
financial waste.

          The U.S. is losing millions of dollars by subsidizing 
        vacant units in large public housing authorities 
        because the buildings can't legally be torn down. In 
        Philadelphia, * * * the U.S. has paid $7.9 million to 
        maintain largely vacant units in a complex of eight 
        buildings. In another project in that city, the debate 
        over what to do about two vacant high-rises containing 
        448 units has lasted for 18 years. In Cleveland, the 
        U.S. has paid $47 million in the last seven years to 
        maintain vacant units, which the housing authority was 
        losing $2.4 million a year that would have come from 
        renting the units * * * \10\
---------------------------------------------------------------------------
    \10\ The Wall Street Journal, p. A2, March 22, 1994.

Section 18 of the USHA of 1937, better known as the one-for-one 
replacement rule is an underlying cause of excessive vacancy 
rates. As GAO has reported, significant problems of retaining 
obsolete public housing are excessive operating costs and the 
crime and vandalism associated with vacant public housing. To 
substantiate these findings, HUD's Inspector General has 
concluded that the one-for-one requirement, along with national 
site and neighborhood standards that purports to protect 
against over-concentrations of low-income people, is 
responsible for the increase in vacancy rates from 5.8 percent 
in 1985 to today's eight percent.
    Of even greater concern to the Committee, however, are the 
number of families that have no choice but to live under these 
deplorable conditions. It is inconceivable that the Federal 
government subsidize properties that are nothing more than 
slums. However, the costs to rehabilitate these properties to a 
point where they are safe and healthy are astronomical. In 
fact, a study conducted for the National Commission on Severely 
Distressed Public Housing stated that the backlog of 
modernization needs was as high as $28 billion. Some of this 
need can be eliminated simply by demolishing and/or selling 
obsolete developments.
    Therefore, the Committee's bill eliminates the one-for-one 
replacement statute and allows PHAs to rebuild housing on 
existing public housing sites. Consequently, Federal funds are 
saved because housing authorities can begin to use finite 
modernization dollars to maintain viable buildings and systems 
rather than propping up hundreds of obsolete buildings. To the 
extent that high vacancies have a negative effect on the 
performance of many large urban housing authorities, these 
authorities are no longer required to maintain developments 
that are not cost-effective and, in fact, are draining the 
authorities of precious resources.
    Demolition, however, cannot be accomplished 
indiscriminately. PHAs must prove the demolition is in 
accordance with the local housing management plan for the 
authority, discussed in Section 106 of the bill. Capricious 
demolition, demolition for purposes of gentrification, or 
demolition otherwise inconsistent with a housing authority's 
long-range goals, is considered unlawful under this bill.
    Second, a PHA may demolish or dispose of public housing 
only if it satisfies one of a number of criteria which, if met, 
ensures that the action is necessary either to protect the 
residents' well-being and interests, conserve the housing 
authority's resources, or rid the authority of housing that is 
obsolete or cannot be rehabilitated cost-effectively.
    These changes, in conjunction with other regulatory relief, 
will enable the industry to resolve the problems of funding, 
occupancy, maintenance, and crime before they strangle the 
provision of housing assistance. Housing authorities must have 
the authority to eliminate their most costly and distressed 
stock.
    Finally, the Federal government must be provided an 
effective means of identifying chronically poor performers and 
denying them funding if they cannot improve their performance. 
In its Reinvention Blueprint, HUD requested significant new 
powers to handle chronically troubled PHAs. While H. R. 2 
authorizes these powers, the legislation also provides 
significant new sanctions that HUD can invoke against those 
authorities that are not managing their properties 
appropriately. One of the most significant of these sanctions 
is the provision of authority to withhold Community Development 
Block Grant (CDBG) funds from a city government or entitlement 
community if that entity has substantially contributed to the 
troubled status of the authority.
    By the clear language of the statute, the Committee does 
not expect this sanction to be used indiscriminately nor is it 
meant to subsidize the level of a PHAs block grant. However, 
the Committee does intend that the Secretary consider wielding, 
and in appropriate cases imposing, this sanction against those 
entities that contribute substantially to the troubled status 
of a housing authority. The Committee does intend that it be 
clear that it is the unit of general local government that is 
to be the subject of the sanction, and not the community 
itself. The Committee intends that in cases where the Secretary 
imposes the sanction, CDBG funds are redirected through an 
alternative entity, such as a local non-profit organization or 
other similar agency, for the administration of funds to the 
community. Also, this provision is not intended to affect 
communities which receive CDBG funds through the county in 
which they are located if those communities have not 
contributed to the conditions at any troubled housing 
authorities in the county. The Secretary shall ensure that a 
process exists whereby communities located in a county subject 
to CDBG sanctions under this section may petition for continued 
use of CDBG funds.
    Obviously, the Secretary must weigh the circumstances of 
each case before levying this sanction and using it to penalize 
bad actors. For example, evidence has been presented to this 
Committee that some localities did not provide adequate city 
services to public housing developments. Other evidence shows 
that promised sites did not materialize because of 
disagreements between the city and the PHA. These actions 
exacerbate the problems of a troubled authority and are 
unacceptable.
    Finally, H. R. 2 mandates that HUD either ``takeover'' or 
contract out the management of any housing authority that has 
been troubled for three years or more. The Committee is pleased 
that recently HUD has been far more aggressive in beginning to 
overhaul those PHAs that are systemically troubled. 
Historically, however, HUD has made limited use of the 
authority it has to take action against troubled authorities. 
H. R. 2 ensures that HUD act quickly to takeover bad managers.
    The legislation also allows HUD to expand the use of 
private and resident managers, to breakup and decentralize 
large troubled authorities, and to consolidate small, rural 
authorities. HUD may utilize competitive bidding in troubled 
PHAs to lower the costs of management and to stimulate an 
environment of competition. All of these tools are provided 
with the expectation that HUD use them aggressively.
    The Committee chose to retain a severely distressed public 
housing program for two more years, that is similar to the HOPE 
VI Urban Revitalization Demonstration (URD) program. In its 
1994 Reinvention Blueprint, HUD acknowledged that these 
properties contribute to the physical decline of and 
disinvestment in the surrounding neighborhoods and suggested 
major reforms to the URD program, including more widespread use 
of vouchers and neighborhood planning.
    Section 262 affirms this concern, and provides housing 
authorities with far more flexibility and latitude to utilize 
these grants creatively. Housing authorities areencouraged to 
identify severely distressed properties and demolish them as quickly as 
possible. Displaced families may be provided with voucher assistance 
and the housing authority may choose whether to rebuild the property by 
entering into new partnerships with the private sector and local 
governments. If the choice is to rebuild, PHAs must show their 
commitment to the redevelopment by matching the revitalization grant 
from HUD with an amount of no less than 5%. It is the hope of this 
Committee, that these reforms to the URD program will produce a healthy 
urban landscape and promote economic opportunities.

I. Deterring crime in public housing

            Added protection against drug and alcohol abusers
    Since the 1980s, public housing has become the ``housing of 
last resort,'' housing the nation's very poor along with the 
disenfranchised. Most residents are law-abiding citizens 
attempting to live peacefully and seeking a healthy community 
life. However, increasing crime has made it extremely difficult 
for families in public housing to create a normal environment 
within which to raise their children or to live peacefully on 
fixed incomes. Although exact statistics are not available, 
according to HUD's Office of Public and Indian Housing, in many 
communities, public housing accounts for less than five or ten 
percent of the local population, but more than twice the share 
of the locality's crime occurs in and around public housing. 
Residents of public housing, whether they are young families or 
elderly people, find themselves victims of crimes that are 
frequently committed by persons abusing alcohol or drugs. Crime 
persists as our nation's dominant fear, and because of the 
increase in the crime rate in public housing, due to increases 
in alcohol and drug abuse, particularly crack cocaine abuse, 
the Committee's bill curtails the admission of drug and alcohol 
abusers to public housing and choice-based housing.
    While crime in the most severely distressed developments 
makes the most lurid news, no public housing development is 
immune from the problems arising from alcohol and drug abuse. 
According to a 1988 NAHRO survey, 55 percent of public housing 
authorities said that they had a drug or alcohol problem. The 
problem was especially prevalent among the largest 
authorities--77 percent reported drug and alcohol problems. 
Forty-five percent of small PHAs reported such problems. 
Although this survey has not been updated, the Committee 
believes conditions have worsened since 1988. Public housing 
residents, who themselves are in need of social and support 
services, tend to be more vulnerable to the activities of 
gangs, drug dealers, and other negative elements.
    Clearly, drug and alcohol-related crime has not only a 
profound destabilizing influence on the residents, but it also 
takes a toll on public housing property. Substance abusers 
violate the rights of other persons, intimidate them, damage 
property, and create the need for costly maintenance. In turn, 
deteriorated and dilapidated property attracts substance 
abusers, who occupy the property or operate their drug business 
from it. This behavior exacts an extraordinary physical cost in 
terms of increases in permanently abandoned projects, 
additional personnel, and greatly expanded investment in 
substance abuse counseling and education. Caught within this 
web are the victims--the public housing residents.
    The cycle of substance abuse, crime, and property 
deterioration has escalated dramatically for more than a 
decade. A 1982 President's Commission on Housing Report does 
not even mention alcoholism, drug abuse, or crime in its 
chapter dealing with problems in public housing. Six years 
later in 1988, the Congress passed the Public Housing Drug 
Elimination Act as part of the Anti-Drug Abuse Act of 1988 
(P.L. 100-690). This act authorized PHAs to evict tenants 
involved, either directly or indirectly, in any drug-related 
criminal activity on or near the public housing premises. A 
year later, the Congress established the National Commission on 
Severely Distressed Public Housing. In its 1992 report, the 
National Commission recognized that one of the defining 
characteristics of severely distressed public housing was 
serious crime and that crime was more often than not 
accompanied by drug and alcohol abuse.
    The Committee is concerned that these measures, while well-
intentioned, have not been sufficient to address the crime in 
public housing. Therefore, provisions of this legislation make 
it easier for PHAs to evict persons with drug or alcohol-
related problems. Certain clarifying changes were made to the 
language at the request of Mr. Watt, but the intent of Section 
642 remains to protect the majority of public housing 
residents--those law-abiding families and individuals seeking 
affordable homes that are safe, clean, and healthy--from being 
subjected to substance abusers.
    This Committee bill allows PHAs to establish standards for 
occupancy in both the public housing and choice-based rental 
assistance programs that prohibit admission by any person that 
is either currently illegally using a controlled substance or 
whose history of drug or alcohol abuse provides reasonable 
cause for the authority to believe that occupancy by such 
person may interfere with the health, safety, or right to 
peaceful habitation by other residents. With this provision, 
the Committee also recognizes that the successfully 
rehabilitated individual, if eligible, also has a right to 
residency and may obtain admission to public housing, given 
proof of successful participation or completion of a supervised 
drug or alcohol rehabilitation program.
    Because PHAs are not experts in the epidemiology of 
treatment of substance abuse, the Committee recommends they 
consult with community experts, including but not limited to 
public health officials, treatment specialists, social/welfare 
workers, mental health professionals, and safety personnel in 
developing their occupancy standards. These standards form the 
basis for determining how and when individuals can be excluded 
from occupancy based on their history of abuse. It is not the 
intent of the Committee to punish individuals with successful 
treatment histories; therefore, the standards should provide 
for consideration of appropriate treatment protocols, social 
and family history as well as duration of use.
            Designated housing--balancing the need of elderly and 
                    disabled
    Section 227 of this legislation authorizes designated 
housing for elderly and disabled families. PHAs may designate 
specific developments or portions of developments for occupancy 
by (a) elderly families only, (b) disabled families only, or 
(c) elderly and disabled families.\11\
---------------------------------------------------------------------------
    \11\ This provision is virtually identical to Section 10 of Public 
Law 104-120, ``Housing Opportunity Program Extension Act of 1996'' 
except that H.R. 2 clarifies that a PHA must establish that the 
designation of the project is necessary to either achieve the housing 
goals for the jurisdiction under the comprehensive housing 
affordability strategy (CHAS), or meet the housing needs of the low-
income population of the jurisdiction. Current law has been interpreted 
to require that both conditions must be met in order for designation to 
occur.
---------------------------------------------------------------------------
    Mixing disabled and elderly residents in the same living 
space has created numerous problems. Many elderly residents who 
anticipated a quiet, all-elderly environment are frightened and 
disturbed by younger residents who tend to have different 
lifestyles. Conversely, young disabled people in these elderly 
developments complain that their elderly neighbors treat them 
with suspicion and resentment.
    In 1992, the GAO reported that 31 percent of non-elderly 
persons with mental disabilities caused moderate or serious 
problems to their elderly neighbors, including threatening them 
and having disruptive visitors. GAO also found that alcohol 
abuse among the non-elderly disabled people living in elderly 
developments was a significant problem for 20 percent of all 
PHAs and 40 percent of all large PHAs.
    In response to these findings and other complaints, the 
Congress rewrote the laws regarding mixed populations in Title 
VI of the Housing and Community Development Act of 1992 (HCDA 
of 1992) [P.L. 102-550]. Under Title VI, PHAs and Federally 
assisted apartment owners could designate certain buildings as 
``elderly only'' if the owners implemented a plan to provide 
alternative housing for those non-elderly residents who were 
eligible for Federally assisted housing and met the eligibility 
requirements of the Americans With Disabilities Act. That 
legislation, however, was very clear that current non-elderly 
residents could not be evicted without cause and that neither 
PHAs nor landlords could leave units vacant for excessive 
periods of time while seeking eligible elderly tenants. Title 
VI further provided that if an elderly tenant could not be 
found for a vacant unit after a predetermined period of time, 
then the unit must be filled with the next eligible disabled 
person on the waiting list.
    According to the HUD Inspector General, both the statute 
and HUD's rules implementing Title VI have proven overly 
burdensome and complicated for PHAs attempting to receive 
``elderly only'' designations. The Committee believes that 
Title VI of the HCDA of 1992 is flawed, and proposes that 
Section 227 rectify that flaw in several important ways. First, 
Section 227 grants PHAs greater flexibility in designating 
their developments ``elderly-only'', thereby allowing their 
elderly population to live in security and with less fear of 
crime or other dangers. Second, the provision permits PHAs to 
fill their designated elderly-only developments with near-
elderly families rather than younger people with disabilities, 
if there are insufficient numbers of elderly families to fill 
all the units. Finally, the statute prohibits occupancy in 
designated units by individuals who currently illegally use a 
controlled substance or who have a history of such use so that 
the PHA would believe that such a person may interfere with the 
health, safety, and right to peaceful enjoyment of the premises 
by other residents. In recognition of the desirability in many 
cases of providing separate housing for the elderly without 
diminishing the housing resources available to younger disabled 
people, subsection 306(b) authorizes funding for FY98 for 
housing authorities to provide housing for the disabled in 
cases where needed because the authority has designated 
buildings once available to the disabled as elderly only.
            Availability of criminal records
    The Committee is keenly aware of the concerns expressed by 
both PHAs and residents that public housing must provide safe 
and secure living environments. Therefore, Section 644 preempts 
State and local law and overrides other Federal laws to enable 
PHAs to obtain information on the criminal records of 
applicants for, and residents of, public housing for the 
purpose of applicant screening, lease enforcement, and 
eviction. However, access to criminal records for persons under 
the age of eighteen is prohibited. In addition, another 
valuable Federal data base--the National Crime Information 
Center (NCIC)--may be accessed by PHAs. Housing authorities are 
authorized to pay a reasonable fee for this information. Mr. 
Castle amended H.R. 2 to ensure that PHAs would have access to 
state criminal records held by a state registration agency 
pursuant to the provisions of title XVII of the Violent Crime 
Control and law Enforcement Act of 1994.
    Current regulations (24 CFR Part 860) direct PHAs to avoid 
admitting families that have the potential to damage the social 
or financial stability of developments. Police departments are 
specifically cited in the regulations as sources of information 
PHAs may contact. Similarly, in 24 CFR Part 966, PHAs are 
directed to have lease provisions that make criminal activity 
grounds for eviction.
    The Department has advised the Committee that these 
requirements are difficult to carry out. The problem is that in 
some localities the police departments are either uncooperative 
or are barred by State law and local ordinances from providing 
criminal records. In the State of California, for example, the 
only persons with access to police records are police 
departments and then only for law enforcement purposes.
    The Committee is also mindful of the need to protect 
residents and applicants from the unfair actions of PHAs. 
Therefore, provisions pertaining to confidentiality, penalties, 
and civil action against the administering agency are included. 
Importantly, theprovision also ensures the confidentiality of 
the identity of victims of domestic violence who reside in public 
housing.
            Operation safe home
    The Committee commends HUD and the Office of Inspector 
General (OIG) for the success of the Operation Safe Home 
Program in combating violent crime in public and assisted 
housing. Section 273 authorizes $20 million for Operation Safe 
Home from funds made available for COMPAC for fiscal years 1998 
and 1999. The funds are to be used for law enforcement purposes 
to combat violent crime on or near the premises of public and 
Federally-assisted housing. The Committee bill also clarifies 
that of the amounts made available for choice-based housing 
assistance under Title III, the Secretary, in consultation with 
the Inspector General, shall make such sums as may be necessary 
to provide housing assistance pursuant to the relocation of 
witnesses in connection with efforts to combat crime in public 
and assisted housing as requested by law enforcement and 
prosecuting agencies.
    The Operation Safe Home strategy for combating crime in 
public and assisted housing entails: collaboration by the OIG 
and Federal, state, and local law enforcement agencies in law 
enforcement efforts targeted at public and assisted housing; 
collaboration among the OIG, law enforcement agencies, public/
assisted housing managers, and public/assisted housing 
residents in devising methods to prevent violent crime; and HUD 
programmatic initiatives specifically geared to prevent violent 
crime in public and assisted housing.
    Under the aegis of Operation Safe Home, OIG Special Agents 
were assigned to 129 law enforcement task forces working in 
operation in public housing throughout the country as of 
September 30, 1995. Operation Safe Home was a catalyst for 
formation of 99 of the 129 task forces. As of 1996, Operation 
Safe Home task force operations resulted in 6,826 persons 
arrested for crimes involving drugs and weapons, as well as 
confiscation of 558 weapons (including 100 assault weapons and 
shotguns), $1,620,158 in cash, and drugs having an estimated 
street value of at least $2,854,172. Additionally, over 730 
search warrants have been served.
    The HUD OIG also coordinates a witness relocation program 
in conjunction with efforts to curb crime in public and 
assisted housing. The HUD OIG has been instrumental in 
relocating 168 witnesses/families who were residents of public 
housing or eligible applicants and feared reprisals from 
criminals as a result of their testimony or other assistance 
they provided to law enforcement officials. Over 100 of those 
families were relocated during the fiscal year ending September 
30, 1995.
    HUD's witness relocation effort is distinct from any 
witness ``protection'' activity administered by the U.S. 
Marshals Service. The program is limited to relocating the 
witness-family from the public housing in which they were 
threatened to other suitable HUD-supported housing. Any 
physical protection of the witness remains the responsibility 
of the primary Federal, state or local law enforcement agency 
investigating the case. Lastly, OIG personnel have worked with 
local HUD program staff and local housing staffs to improve the 
safety and security of persons living in public and assisted 
housing.
    Finally, the Committee bill also makes amendments to the 
Public and Assisted Housing Drug Elimination Act of 1990 by 
authorizing for FY 1998 through 2002 the Community Partnerships 
Against Crime Act of 1995. The Committee intends that this 
authorization is transitional allowing sufficient time for 
these activities to be integrated into the public housing block 
grant. The Committee believes that the Department, PHAs, and 
assisted housing managers utilize the experiences from the 
Operation Safe Home Program in combating violent crime in 
public and assisted housing.

J. More efficient rental assistance program (section 8)

            Encouraging the private sector to enter the program
    The Section 8 certificate and voucher programs are 
generally regarded as successful. A 1994 study conducted by Abt 
Associates for HUD concluded that 87 percent of sampled 
enrollees found housing with their Section 8 assistance.\12\ 
Despite this success, however, the program has been criticized 
for rules that unnecessarily discourage housing owners from 
participating. For example, the following facts are taken from 
a report prepared by Abt Associates for the National Multi 
Housing Council/National Apartment Association:\13\
---------------------------------------------------------------------------
    \12\ ``Section 8 Rental Voucher and Rental Certificate Utilization 
Study: Final Report,'' Prepared by Abt Associates, Inc. for HUD (Oct. 
1994). ``Final Report on Recommendations on Ways to Make the Section 8 
Program More Acceptable in the Private Rental Market,'' Report prepared 
by Abt Associates, Inc., for the National Multi-Housing Council/
National Apartment Association (March 1994).
    \13\ ``Final Report on Recommendations on Ways to Make the Section 
8 Program More Acceptable in the Private Rental Market,'' Report 
prepared by Abt Associates, Inc., for the National Multi-Housing 
Council/National Apartment Association (March 1994).

          Under the ``take one, take all'' provision, owners 
        that accepted one assisted household could not refuse 
        to rent to other tenants solely because they received 
        Section 8 assistance.
          The portion of the security deposit paid by the 
        assisted family was one month's contribution toward 
        rent (30% of adjusted income) which created little 
        incentive on the part of the renter to maintain the 
        unit.\14\ In addition, cumbersome procedures for the 
        reimbursement of damages to the unit sometimes required 
        owners to hold the unit vacant for extended periods of 
        time, causing further loss of rental income.
---------------------------------------------------------------------------
    \14\ Under Section 8 Conforming Rule of Summer 1995, HUD now allows 
security deposits to be collected in conformance with local practice.
---------------------------------------------------------------------------
          Owners could not get rid of troublesome tenants by 
        refusing to renew their leases--an otherwise common 
        practice in the private market. Rather, owners had to 
        go through time-consuming eviction procedures.

    Accordingly, the Committee bill changes the program in 
response to the findings of the Abt Associates report, and the 
``take one, take-all'' provision is repealed. In addition, the 
``endless lease'' provisions are repealed. Section 324 of H.R. 
2 requires that leases be set forth in standard terms which are 
typically used in the local housing market area by the owner 
and apply generally to tenants who are not assisted through the 
Section 8 program.
    The Committee believes that these and other revisions 
contained in H.R. 2 will eliminate some of the most egregious 
conditions that have caused owner dissatisfaction with choice-
based housing, while retaining needed tenant projection. 
Furthermore, these changes will encourage other apartment 
owners to participate in the program, thereby expanding the 
universe of affordable housing for low-income families.
            Eliminating over-regulation
    In addition to the changes discussed above, H.R. 2 contains 
other provisions to reduce over-regulation. For example, the 
Committee's bill eliminates the requirement that participating 
housing owners notify the local housing authority 90 days 
before terminating the lease of an assisted family. This 
provision may have been necessary when contract terms were for 
twenty years. However, contracts are now renewed annually, and 
this provision only serves to frighten residents of these 
developments.
    The bill also streamlines inspection procedures. Under 
current program rules, before a low-income family with Section 
8 assistance can occupy subsidized housing, the unit must be 
inspected by the local PHA to determine that it meets HUD's 
housing quality standards. If repairs are needed, the PHA must 
reinspect the unit. These inspections take time and penalize 
the low-income family and the housing owner. Under the 
Committee's bill, a PHA must inspect the unit within 15 days of 
a submission of a request to the PHA by the resident or owner. 
The performance of the PHA in meeting the 15-day deadline is to 
be considered in assessing the performance of the agency.
    Finally, the Committee's bill merges the current 
certificate and housing voucher programs into one choice-based 
housing program. Under current law, assisted households are 
treated differently depending on the form of assistance they 
receive, and housing owners are subject to different 
requirements for two families if one family has a certificate 
and the other has a housing voucher. These differences are 
eliminated by merging the two programs. Although HUD has 
already acted to conform the requirements of the two programs 
in its July 1995 rulemaking the provisions in theCommittee bill 
are necessary to complete the reform. Previous attempts to merge the 
certificate and voucher program have enjoyed the universal support by 
this Committee, owners and housing agencies, HUD, and GAO.
            Choice, portability, and low-income concentration
    Portability enables Section 8 recipients to seek housing 
wherever they wish, without regard to political jurisdictional 
boundaries or PHA boundaries, thereby promoting wider housing 
choice. At the same time, however, the Committee is aware of 
the bookkeeping and administrative burdens produced by 
portability.
    Under current law, PHAs that lose Section 8 renters to 
another jurisdiction may make assistance payments to support 
that family in the other jurisdiction if the receiving PHA 
chooses not to absorb the family into its own program. If the 
family has moved to a higher rent area, the initial PHA must 
make up the difference in the rental cost at the expense of its 
own program. In addition, this billing arrangement generates a 
billing and accounting paperwork burden for both the losing and 
the receiving PHA.
    Because of reported abuses, in 1992 Congress enacted 
legislation that somewhat limits portability of assistance. At 
that time, it was reported that families were ``wait-list 
shopping;'' placing their names on waiting lists for Section 8 
assistance in areas with short or no waiting lists and 
obtaining certificates or vouchers from a local PHA, with no 
intention of living in the PHA's jurisdiction. After receiving 
assistance, the families immediately leased units in some other 
area, such as one with a long Section 8 waiting list. This 
``wait-list shopping'' adversely impacted the losing PHA and 
created unneeded administrative burdens for both the losing and 
the receiving PHA.
    The Committee's bill provides flexibility for losing and 
gaining PHAs to deal with portability issues. Assistance is 
portable on a national scale. A PHA may, for a family applying 
for assistance that does not at the time of application live in 
that PHAs jurisdiction, require the family to live in the 
jurisdiction of the PHA for 12 months after beginning 
assistance to the family. Families may not receive assistance, 
however, if they have moved as a result of an eviction due to a 
lease violation.
            Portability may not promote housing choice
    The Section 8 certificate and voucher programs were enacted 
under the premise that assisted households would obtain housing 
of their choice that met HUD's rent and quality standards. It 
was hoped that families would not, as is too often the case in 
public housing, be warehoused in deteriorating developments at-
risk for their lives and with little hope for the future. 
Rather, certificates and vouchers were seen as a means for 
families to select safe housing, located in neighborhoods that 
provided positive role models, and allowed increased access to 
jobs, education, and services.
    There is increasing concern, however, that ``Section 8 
submarkets'' are being created.\15\ That is, by the programs' 
very design, assisted households are herded into poorer areas. 
This situation may occur because, as a general rule, Section 8 
assistance has been limited to housing that rents at a level in 
which 45 percent of an area's rental housing could be obtained. 
The problem may be exacerbated by the reduction of the fair 
market rent standard to the 40th percentile in 1995.\16\
---------------------------------------------------------------------------
    \15\ See the previously-cited reports on (1) voucher and 
certificate utilization and (2) making the Section 8 program more 
acceptable in the private rental market, as well as another HUD report 
entitled ``Promoting Housing Choice in HUD's Rental Assistance 
Programs: A Report to Congress'' (Apr. 1995).
    \16\ HUD Fair Market Rents, 1995.
---------------------------------------------------------------------------
    For example, HUD's June 1995 study cited above reported 
that:

          * * * families receiving certificates and vouchers 
        obtain housing in areas that are generally less poor 
        and less segregated than the neighborhoods surrounding 
        conventional public housing projects. This finding, 
        offers the first quantitative evidence that, even in 
        the absence of directed counseling, HUD rental 
        assistance yields a lower concentration of urban 
        poverty than project-based forms of assistance.
          Nonetheless, the locational outcomes of recipients 
        mirror the broad pattern of isolation experienced by 
        many low-income and minority households in the private 
        rental market. Despite the expanded housing choice 
        options that their enhanced purchasing power would seem 
        to offer, many Section 8 families continue to live in 
        relatively segregated and economically distressed 
        neighborhoods.

    H.R. 2 addresses this issue in two ways. First, Section 353 
of the bill provides that each PHA establish a payment standard 
for Section 8 assistance that is between 80 percent and 120 
percent of the ``rental indicator'' established by HUD (under 
Section 323) for the local market area.\17\ This provision 
allows the PHA sufficient flexibility to establish a payment 
standard that reflects local conditions and is more conducive 
to providing adequate housing choice.
---------------------------------------------------------------------------
    \17\ Rental indicators established under H. R. 2 take the place of 
the current system of HUD-established ``fair market rents.''
---------------------------------------------------------------------------
    Second, Section 373 of the bill requires the Secretary to 
conduct a study of the geographic areas of the State of 
Illinois served by the Housing Authority of Cook County and the 
Chicago Housing Authority. The purpose of the study is to 
address and resolve issues on the adverse impact on local 
communities due to the geographic concentration of assisted 
households and ways to deconcentrate assisted households by 
providing broader housing choice. The report is to be completed 
not later than 90 days after the enactment of the Act.
            Administrative fees for choice-based rental housing
    Since 1975, Congress has provided funds to HUD to reimburse 
PHAs for costs incurring administering the Section 8 tenant-
based rental housing assistance programs. This fee is composed 
of several components: (1) a one-time fee (up to $275) to cover 
the preliminary expenses involved in getting an assisted 
household into the Section 8 program (for example, to reimburse 
the PHA for costs incurred in taking applications, rent 
reasonableness negotiations with the housing owner, complaint 
handling, income recertification and unit inspections), (2) 
ongoing fees to cover costs over time (averaging about 7.6% of 
the fair-market rent (FMR) for a two-bedroom unit), and (3) for 
other purposes, such as for the costs to help families that 
experience difficulty in renting appropriate housing, costs to 
coordinate services for seniors and disabled families, costs 
for audits, and for extraordinary costs, as determined 
necessary by HUD.
    The second component of the fee is by far the most 
significant for PHAs because of its linkage to the FMR and 
because the other two components of the fee are one-time 
payments. According to a 1993 HUD report, the average ongoing 
reimbursement (excluding the preliminary and certain other 
fees) equaled roughly $44 per unit per month of assistance, 
with a total national cost of $659 million per year.\18\
---------------------------------------------------------------------------
    \18\ Office of Policy Development and Research, HUD, ``Section 8 
Administrative Fees: A Report to Congress'' (June 1994).
---------------------------------------------------------------------------
    There are significant problems associated with setting 
administrative fees. PHA characteristics, which are different 
for each PHA, affect cost markedly that may lead to some PHAs 
being overcompensated and some undercompensated. For example, 
the number of certificates and vouchers administered by PHAs 
range from a handful to upwards of tens of thousands. Also, 
some PHAs serve a single city or county while others serve a 
multi-county or state-wide area. All these factors affect the 
level of expenses. Determining what constitutes a reasonable 
payment to the 2,600 PHAs that administer these programs and 
developing a fee schedule that fairly compensates all of them 
is a difficult task.
    As a first step towards making this determination, Section 
305 sets the administrative fee level for FY1998 for PHAs at 
7.65% of the base amount using FY 1993 and 1994 FMRs for the 
first 600 units (for 2-bedroom units), and 7.0% of the base 
amount for all units in excess of 600. After FY1998, the 
Secretary is required to establish a fee that reflects changes 
in wage data or other objectively measurable data that reflects 
costs of administering the choice-based rental housing 
assistance program. The Secretary may increase this fee to 
reflect higher costs of administering small programs 
andprograms operating over larger geographic areas. The Committee bill 
also provides for an administrative fee for (1) the costs of assisting 
families that have difficulty in finding appropriate housing, (2) in 
certain circumstances, a one-time $500 preliminary fee, and (3) amounts 
to cover extraordinary costs as determined by the Secretary.

K. Designing better indicators of market rents

    Rental assistance provided to qualified households is 
currently limited by fair market rents (FMR) which are nothing 
more than statistically-determined indicators of appropriate, 
affordable rent levels for the area. HUD establishes FMRs on an 
annual basis for different housing market areas by type and 
size of dwelling units. HUD relies on metropolitan statistical 
areas and primary metropolitan statistical areas established by 
the Office of Management and Budget as the housing market on 
which to base FMRs because of the close correspondence that has 
typically existed between these areas and housing market areas. 
The composition of a single jurisdiction can range from a 
single community to numerous counties spread over several 
states.
    In general, the FMR for an area is the amount needed to pay 
the gross rent (shelter plus utilities) for modest, decent, 
safe, and sanitary housing. In setting the FMRs, HUD tries to 
strike a balance between permitting the assisted households a 
wide selection of units and neighborhoods, and serving as many 
households as possible. Specifically, beginning in fiscal year 
1996, FMRs were set at the 40th percentile of a defined housing 
market area's rental housing; that is, the level at which about 
40 percent of a market area's rental housing can be obtained. 
HUD establishes FMRs annually for about 2,700 market areas--
over 350 metropolitan areas and nearly 2,400 nonmetropolitan 
counties. Most recipients of Federally-assisted housing reside 
in metropolitan areas.
            Problems with rent setting standards
    Despite its best efforts, HUD's FMRs do not always 
accurately reflect true market rents for certain areas and 
submarkets within broadly defined areas. In fact, the 
description most often made of FMRs is that they are neither 
fair nor market. Therefore, H.R. 2 has changed the name of FMRs 
to ``rental indicators'' in an attempt to reflect their actual 
purpose. When FMRs are inaccurate--a significant problem in the 
past--subsidies may be too high for prevailing rents in some 
submarkets and too low in others.\19\
---------------------------------------------------------------------------
    \19\ In 1993, over 1,200 market areas appealed HUD's FMRs with the 
result that more than 600 communities had FMRs adjusted upward to 
accurately reflect the local market rents.
---------------------------------------------------------------------------
    For example, in areas where either situation exists, a 
metropolitan area-wide FMR makes less than 40 percent of the 
housing stock available to assisted households in more 
expensive submarkets. Conversely, in areas with rents that are 
below the metropolitan area-wide FMR, assisted households have 
access to more than 40 percent of the available housing stock 
in that area. In addition, areas where rents are high and the 
subsidy is low, assisted families become concentrated in areas 
that are at the lower end of the market--a situation that has 
occurred in the past and is inconsistent with the statutory 
objective of mobility and full access to the market.
    Further, within any market area, rents vary because of the 
units' age, quality of construction and maintenance, location, 
and differences in amenities. Unless, and perhaps even if, an 
area were defined as a few square blocks, rent variations would 
remain and could be significant. Finally, establishing an FMR 
for smaller areas could be too time-consuming and costly for 
HUD. GAO recently estimated that the cost of collecting 
additional data to establish an FMR for an individual public 
housing agency's jurisdiction could range from $5 million to 
more than $750 million a year, depending on the level of 
accuracy and reliability desired.\20\
---------------------------------------------------------------------------
    \20\ Rental Housing: Use of Smaller Market Areas to Set Rent 
Subsidy Levels Has Drawbacks (GAO/RCED-94-122, June 24, 1994).
---------------------------------------------------------------------------
            Establishing variable payment standards
    Under the Committee's bill, HUD is responsible for 
establishing rental indicators that account for the various 
sizes and types of dwelling units within a given housing market 
area. PHAs may establish payment standards for their locality 
between 80 to 120 percent of the rental indicator. This 
flexibility enables local authorities to set rent ranges that 
are based on factors like a unit's age, location, amenities, 
quality of construction and maintenance, and the provision of 
local public services, such as employment opportunities and 
transportation--detailed information that HUD does not have 
access to when establishing the FMR.
    Authorities with apartments located in a suburban or rural 
area may assign a lower payment standard if the comparable 
rents in the area are below the housing market area's rental 
indicator. Conversely, the authorities are able to set the 
payment standard above the rental indicator to meet the rental 
costs of a high rent market.

L. Other general provisions

            Pet ownership
    The Committee bill continues to recognize the benefits that 
pet ownership provides individuals and families and which has 
been substantiated by scientific studies. Residents of 
Federally-assisted rental housing are allowed to keep common 
household pets in their dwelling units, subject to the 
reasonable requirements of the owner. Those requirements may 
include the payment by the resident of a nominal fee, and a 
security ``pet'' deposit to cover costs associated with the 
presence of pets. A nominal monthly fee should not exceed $10. 
Any deposit should be kept in an interest bearing escrow 
account by the local housing and management authority or the 
property manager. Deposit moneys only should be used to pay for 
the reasonable and extraordinary expenses related to the 
resident/depositor's pet. Remaining deposit money should be 
returned to the resident/depositor in a timely fashion once the 
resident/depositor has vacated the facility or no longer owns a 
pet.
    Additionally, in allowing pets in Federally-assisted rental 
housing, the Committee recognizes that, at times, it is 
necessary to accommodate residents whose allergies or other 
medical conditions are exacerbated by the presence of animals. 
Such remedies should be appropriate to the needs of the 
resident(s) and the property, including but not limited to pet 
free areas, and consistent with the goals of Section 622.
    Owners are prohibited from discriminating against persons 
in connection with admission to or occupancy of Federally-
assisted rental housing only because of the presence of common 
household pets in the dwelling unit of that person.
            Review of drug elimination program contracts
    Section 623 requires the Secretary to investigate all 
security contracts of PHAs owning and operating more than 4,500 
units and that were awarded by grantees under the Public and 
Assisted Housing Drug Elimination Act of 1990. In particular, 
the Committee is concerned with security firms affiliated with 
the Nation of Islam which have received over $20 million in 
contracts awarded by HUD. Members of this Committee are 
concerned about allegations that such firms have benefited from 
flagrant violations of procurement procedures, engaged in anti-
discriminatory hiring practices, and permitted their employees 
to proselytize while on duty. In spite of requests from Members 
of this Committee to the Secretary for details on these 
contracts, and of possible non-compliance with Federal hiring 
and employment requirements by some firms, HUD has failed to 
provide this information.
    In an effort to obtain information about the contractual 
relationship between Nation of Islam affiliated firms and HUD, 
the House Banking Subcommittee on General Oversight and 
Investigations held a hearing on March 2, 1995. In spite of 
HUD's repeated assurances that documents would be provided to 
the Subcommittee, HUD has failed to secure for the Subcommittee 
documentation of the hiring practices of such firms.
    The failure of HUD to uphold its oversight and enforcement 
responsibilities of the security contracts of PHAs has 
compelled the Committee to act legislatively. As a result, the 
Committee bill calls for HUD to provide a thorough accounting 
of its contractual relationship with security companies, and a 
requirement that HUD either bring existing public housing 
security contracts into full compliance with appropriate 
requirements, or terminate them.
            Effect of repeal of USHA of 1937 on PHA payment of 
                    outstanding debt and existing contracts
    Despite the repeal of the USHA of 1937, the Committee 
realizes that the financial records of numerous PHAs continue 
to reflect debt that is held by the Secretary, generally in the 
form of Advance Notes. The Committee does not intend that such 
debt obstruct the ability of PHAs to seek other forms of 
financial assistance from private market sources. Therefore, 
the Secretary is encouraged to continue to forgive this debt as 
it comes due.
    Furthermore, the legislation should not affect the 
continuing obligation of the Federal government to make annual 
contributions, in amounts not exceeding the sum PHAs annually 
require to pay principal and interest on obligations incurred 
under the USHA of 1937, and issued with the full faith and 
credit of the United States. Individuals and institutions 
holding such instruments should reasonably expect that the 
United States will continue to honor its obligations.
    Section 601(c) makes clear that repealing the USHA of 1937 
does not affect any legally binding obligation entered into 
under such laws, and that any provision of law repealed by the 
new Act shall continue to govern funds or activities subject to 
the Act.
            Occupancy standards
    Section 702 of the Committee bill prohibits the Secretary 
from establishing a national occupancy standard. Occupancy 
standards are guidelines set by a housing provider or states on 
the number of people permitted to live in a housing unit. This 
section was designed in response to efforts by HUD to require 
housing providers to house substantially more people than is 
widely considered appropriate and reasonable. HUD's current 
guidelines and manuals state that 2 persons per bedroom is 
generally the occupancy standard for its public and assisted 
housing programs. During markup of the Committee bill, certain 
paragraphs from Section 702 (as introduced) that dealt with a 
default occupancy standard for States without their own 
provisions were deleted. The Committee is concerned that 
efforts to change this would result in severe overcrowding in 
many rental communities, depleting the stock of affordable 
housing and having a detrimental effect on the quality of life 
for residents in the housing units.\21\
---------------------------------------------------------------------------
    \21\ Section 702 is not intended to annul the continuing effect of 
the Keating Memorandum, which was and is recognized by Congress in P.L. 
104-134 as the appropriate guidance for HUD to use in any enforcement 
actions with respect to a complaint of discrimination under the Fair 
Housing Act (42 U.S.C. Sec. 3601 et seq.) on the basis of familial 
status and which involves an occupancy standard established by a 
housing provider (the ``Keating Memorandum'' refers to the March 20, 
1991 Memorandum from the General Counsel of the Department of Housing 
and Urban Development to all regional counsel regarding fair housing 
enforcement policy in occupancy areas).
---------------------------------------------------------------------------
            Excess federal property
    Although H.R. 2 as introduced included a section to allow 
self-help housing programs the same eligibility for surplus 
Federal property transfers as homeless providers enjoy, the 
Committee deleted the provision in the managers amendment. The 
Committee understands that the Committee on Government Reform 
and Oversight, which has jurisdiction over the ``overall 
economy, efficiency and management of government operations and 
activities, including Federal procurement'' will be considering 
legislation relevant to excess Federal property in the very 
near future.
            Departmental reorganization
    Although H.R. 2 deals with the reforms in public housing, 
the committee is also concerned with the capacity of HUD to 
implement public housing and other comprehensive reforms, 
including community and economic development. In particular, 
HUD plans to reduce overall Department staffing to 7,500 over 
the next several years. The Committee believes that the 
Congress should be consulted before implementation of a 
reorganization plan. The Committee will consult with HUD to 
provide a consultation process, without the necessity of 
statutory requirements. Additionally, the Committee is 
concerned that any staff reorganization consider the primary 
focus of the Department, including ``urban development'' and 
provide a Departmental presence in the largest metropolitan 
areas, where HUD can facilitate and partner to effectuate 
economic and community opportunities.

         H.R. 2--THE HOUSING OPPORTUNITY AND RESPONSIBILITY ACT OF 1997--AUTHORIZATION OF APPROPRIATIONS        
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                  Fiscal years--                
                                                                ------------------------------------------------
                            Programs                                             1998-2002--H.R.       1998     
                                                                  1997 enacted   2 [as passed by  administration
                                                                                    Committee]        budget    
----------------------------------------------------------------------------------------------------------------
Title II--Public Housing:                                                                                       
    Operation Safe Home........................................            [10]             [20]            [20]
    Demolition, Site Revitalization, Replacement...............             550          \1\ 500             524
    Capital Fund...............................................           2,500            2,500           2,500
    Operating Fund.............................................           2,900            2,900           2,900
    Relocation of Victims of Domestic Violence.................           (\2\)            (\3\)           (\2\)
Title III--Choice-Based Housing:                                                                                
    Tenant Based Assistance....................................           (\2\)            1,862           (\2\)
    Ass't for Disabled.........................................            [50]             [50]            [50]
Title V--Repealers and Conforming:                                                                              
    Public Housing Agency Performance Study....................           (\2\)             [.5]           (\2\)
    Drug Elimination...........................................             290              290             290
                                                                ------------------------------------------------
      Total for FY1998.........................................  ..............            8,052  ..............
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal years 1998-2000.                                                                                     
\2\ Not applicable.                                                                                             
\3\ Such sums not more than $.7.                                                                                

                        Constitutional Authority

    In compliance with clause 2(l)(4) of rule XI of the Rules 
of the House of Representatives, the constitutional authority 
for Congress to enact this legislation is derived from the 
general welfare clause (Article I, Sec. 8).

                                Hearings

    The Subcommittee on Housing and Community Opportunity held 
three hearings on the ``Housing Opportunity and Responsibility 
Act of 1997.''
    The first hearing was held on February 25, 1997. Testifying 
before the Subcommittee were: Dr. Ira Harkavy, Executive 
Director, Center for Community Partnerships at the University 
of Pennsylvania; Mr. David Kuo, Executive Director of American 
Compass in Washington, D.C.; Mr. Abdur Rahman Farrakhan, 
Executive Director of the Oceanhill Brownsville Tenants 
Association in Brooklyn, New York; and, Mr. Howard Husock, 
Executive Director of the Case Program at the John F. Kennedy 
School of Government, Harvard University.
    The second hearing was held on March 6, 1997. Testifying 
before the Subcommittee were: Secretary Andrew Cuomo, 
Department of Housing and Urban Development; Mr. John Hiscox, 
Executive Director of the Macon (Georgia) Housing Authority on 
behalf of the Public Housing Authorities Directors Association; 
Mr. Rick Gentry, President of the National Association of 
Housing and Redevelopment Officials; Ms. Sunia Zaterman, 
Executive Director of the Council of Large Public Housing 
Authorities; Mr. Harold Sole, Director of Leased Housing, New 
York City Housing Authority, on behalf of National Leased 
Housing Association; Mr. Jack Murray, Managing Director of 
Insignia Residential Group, on behalf of the National Multi-
Housing Council; Mr. Benson Roberts, Vice-President for Policy 
of the Local Initiatives Support Corporation in Washington, 
D.C.; Mr. Bob Moore, President of the Development Corporation 
of Columbia Heights in Washington, D.C.; Ms. Paulette Turner, 
President of the Massachusetts Union of Public Housing Tenants; 
Ms. Mary Rone, President of the New Jersey Association of 
Public and Assisted Housing Residents; Ms. Cushing Dolbeare, 
Board of Directors Member of the National Low-Income Housing 
Coalition; and Mr. David Bryson, Acting Director of the 
National Housing Law Project.
    The third hearing was held on March 11, 1997. Testifying 
before the Subcommittee were: Mr. Steven Goldsmith, Mayor of 
Indianapolis, Indiana; HUD Inspector General Susan Gaffney; Mr. 
Joseph Schiff, former HUD Assistant Secretary for Public and 
Assisted Housing and President of the Schiff Group in 
Washington, D.C.; and, Mr. Ned Epstein, of Housing Partners, 
Inc. in Boston, Massachusetts.

     Committee Consideration and Votes (Rule XI, Clause 2(l)(2)(b))

    The Committee met in open session to mark up H.R. 2, 
``Housing Opportunity and Responsibility Act of 1997'' on April 
15, 16, 17 and 23, 1997. The Committee considered the original 
text introduced by Mr. Lazio for purposes of amendments.
    During the markup, the Committee approved 40 amendments 
including a managers amendment and an en bloc amendment by 
voice vote. The Committee also defeated three (3) amendments by 
voice vote. Sixteen amendments were withdrawn. The Committee 
defeated, by recorded vote, 17 amendments. Pursuant to the 
provisions of clause 2(1)(2)(B) of rule XI of the House of 
Representatives, the results of each roll call vote and the 
motion to report, together with the names of those voting for 
and those against are printed below:

                             ROLLCALL NO. 1

    Date: April 16, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Motion by: Mr. Kennedy.
    Description of motion: Substitute amendment to Lazio 
(targeting) Amendment to allow a PHA to offset certain 
targeting requirements of the public housing program if the PHA 
voluntarily chooses to increase the targeting of choice-based 
assistance to those people with incomes under 30 percent of the 
area median income.
    Results: Rejected 25 to 26.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. LaFalce                         Mr. McCollum
Mr. Vento                           Mrs. Roukema
Mr. Schumer                         Mr. Bereuter
Mr. Frank                           Mr. Baker
Mr. Kennedy                         Mr. Lazio
Mr. Flake                           Mr. Bachus
Ms. Waters                          Mr. Castle
Mr. Sanders                         Mr. King
Mrs. Maloney                        Mr. Campbell
Mr. Gutierrez                       Mr. Royce
Ms. Roybal-Allard                   Mr. Lucas
Mr. Barrett                         Mr. Metcalf
Ms. Velazquez                       Mr. Ney
Mr. Watt                            Mr. Ehrlich
Mr. Hinchey                         Mr. Barr
Mr. Ackerman                        Mrs. Kelly
Mr. Bentsen                         Dr. Paul
Mr. Jackson                         Mr. Ryun
Ms. McKinney                        Mr. Cook
Ms. Kilpatrick                      Mr. Snowbarger
Mr. Maloney                         Mr. Riley
Ms. Hooley                          Mr. Hill
Ms. Carson                          Mr. LaTourette
Mr. Torres                          Mr. Manzullo
                                    Mr. Jones

                             ROLLCALL No. 2

    Date: April 16, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Motion by: Mr. Metcalf.
    Description of motion: Amendment to Sanders Amendment to 
provide all the savings from the elimination of the mortgage 
interest deduction towards the reduction of the federal 
deficit.
    Results: Rejected 11 to 34.
        YEAS                          NAYS
Mr. Metcalf                         Mr. Leach
Ms. Waters                          Mr. McCollum
Mr. Sanders                         Mrs. Roukema
Ms. Roybal-Allard                   Mr. Bereuter
Mr. Barrett                         Mr. Baker
Mr. Watt                            Mr. Lazio
Mr. Hinchey                         Mr. Bachus
Mr. Jackson                         Mr. King
Ms. McKinney                        Mr. Campbell
Ms. Kilpatrick                      Mr. Royce
Ms. Carson                          Mr. Lucas
                                    Mr. Ney
                                    Mr. Ehrlich
                                    Mr. Barr
                                    Mr. Fox
                                    Mrs. Kelly
                                    Dr. Paul
                                    Dr. Weldon
                                    Mr. Ryun
                                    Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Sessions
                                    Mr. LaTourette
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones
                                    Mr. Gonzalez
                                    Mr. Vento
                                    Mr. Kanjorski
                                    Mr. Flake
                                    Mr. Bentsen
                                    Mr. Maloney
                                    Ms. Hooley

                             ROLLCALL No. 3

    Date: April 16, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Motion by: Mr. Jackson.
    Description of motion: Deletes work requirement, graduation 
date from self-sufficiency contracts, and binding lease terms 
and exemption in Title I, Section 105.
    Result: Defeated 19to 26.
        YEAS                          NAYS
Mr. Bachus                          Mr. Leach
Mr. Campbell                        Mr. McCollum
Mr. LaTourette                      Mrs. Roukema
Mr. Gonzalez                        Mr. Bereuter
Mr. Vento                           Mr. Baker
Mr. Frank                           Mr. Lazio
Mr. Kennedy                         Mr. King
Ms. Waters                          Mr. Royce
Mr. Sanders                         Mr. Lucas
Mrs. Maloney                        Mr. Metcalf
Ms. Roybal-Allard                   Mr. Ney
Mr. Barrett                         Mr. Ehrlich
Mr. Watt                            Mr. Barr
Mr. Hinchey                         Mrs. Kelly
Mr. Bentsen                         Dr. Paul
Mr. Jackson                         Dr. Weldon
Ms. Kilpatrick                      Mr. Ryun
Ms. Hooley                          Mr. Cook
Ms. Carson                          Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Sessions
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones
                                    Mr. Ackerman
                                    Mr. Maloney

                             ROLLCALL No. 4

    Date: April 16, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Motion by: Mr. Jackson.
    Description of motion: To provide that nothing in the self-
sufficiency and community work agreement constitutes a binding 
lease term in Title I, Section 105(a), (c).
    Results: Rejected 14 to 26.
        YEAS                          NAYS
Mr. LaTourette                      Mr. Leach
Mr. Vento                           Mrs. Roukema
Mr. Kanjorski                       Mr. Bereuter
Mr. Kennedy                         Mr. Baker
Mr. Sanders                         Mr. Lazio
Mr. Gutierrez                       Mr. Bachus
Ms. Roybal-Allard                   Mr. King
Mr. Barrett                         Mr. Royce
Mr. Watt                            Mr. Lucas
Mr. Hinchey                         Mr. Metcalf
Mr. Bentsen                         Mr. Ney
Mr. Jackson                         Mr. Ehrlich
Ms. Kilpatrick                      Mr. Fox
Ms. Hooley                          Mrs. Kelly
                                    Dr. Paul
                                    Dr. Weldon
                                    Mr. Ryun
                                    Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Hill
                                    Mr. Sessions
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones
                                    Mr. Maloney

                             ROLLCALL No. 5

    Date: April 17, 1997.
    Motion by: Mr. Jackson.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description of motion: To provide that Section 105 shall be 
effective only to the extent that Congress appropriates funds 
to specifically cover costs to the Housing Authorities for 
implementation, enforcement, liability, and other costs arising 
from such agreements.
    Results: Rejected 17 to 23.
        YEAS                          NAYS
Mr. Vento                           Mr. Leach
Mr. Frank                           Mrs. Roukema
Mr. Kennedy                         Mr. Baker
Mr. Flake                           Mr. Lazio
Ms. Waters                          Mr. Royce
Mr. Sanders                         Mr. Lucas
Mrs. Maloney                        Mr. Metcalf
Mr. Gutierrez                       Mr. Ney
Ms. Roybal-Allard                   Mr. Ehrlich
Mr. Barrett                         Mr. Barr
Ms. Velazquez                       Mr. Fox
Mr. Watt                            Mrs. Kelly
Mr. Bentsen                         Dr. Paul
Mr. Jackson                         Dr. Weldon
Ms. Kilpatrick                      Mr. Ryun
Mr. Maloney                         Mr. Cook
Ms. Hooley                          Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Hill
                                    Mr. Sessions
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones

                             ROLLCALL No. 6

    Date: April 17, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Motion by: Ms. Waters and Ms. Kilpatrick.
    Description of motion: To strike provisions regarding 
administrative grievance procedures concerning evictions from 
public housing and retains current law.
    Results: Rejected 17 to 24.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. Vento                           Mrs. Roukema
Mr. Frank                           Mr. Bereuter
Mr. Kanjorski                       Mr. Baker
Mr. Flake                           Mr. Lazio
Ms. Waters                          Mr. Royce
Mr. Sanders                         Mr. Lucas
Mr. Gutierrez                       Mr. Metcalf
Ms. Roybal-Allard                   Mr. Ney
Mr. Barrett                         Mr. Ehrlich
Ms. Velazquez                       Mr. Barr
Mr. Watt                            Mr. Fox
Mr. Bentsen                         Mrs. Kelly
Mr. Jackson                         Dr. Paul
Ms. Kilpatrick                      Dr. Weldon
Mr. Maloney                         Mr. Ryun
Ms. Hooley                          Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Hill
                                    Mr. Sessions
                                    Mr. LaTourette
                                    Mr. Manzullo
                                    Mr. Jones

                             ROLLCALL NO. 7

    Date: April 17, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Motion by: Mr. Frank.
    Description of motion: Provides Public Housing Authority 
with discretionary authority to implement community work 
requirements in Title I, Section 105.
    Results: Rejected 13 to 24.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. Frank                           Mrs. Roukema
Mr. Flake                           Mr. Bereuter
Ms. Waters                          Mr. Baker
Mr. Sanders                         Mr. Lazio
Ms. Roybal-Allard                   Mr. Bachus
Mr. Barrett                         Mr. Castle
Ms. Velazquez                       Mr. Lucas
Mr. Watt                            Mr. Metcalf
Mr. Bentsen                         Mr. Ney
Mr. Jackson                         Mr. Barr
Mr. Maloney                         Mr. Fox
Ms. Hooley                          Mrs. Kelly
                                    Dr. Paul
                                    Dr. Weldon
                                    Mr. Ryun
                                    Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Hill
                                    Mr. Sessions
                                    Mr. LaTourette
                                    Mr. Manzullo
                                    Mr. Jones

                             ROLLCALL NO. 8

    Date: April 17, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description of motion: Strikes community work requirement 
in Title I, Section 105.
    Results: Rejected 15 to 27.
        YEAS                          NAYS
Mr. LaTourette                      Mr. Leach
Mr. Gonzalez                        Mr. McCollum
Mr. Vento                           Mrs. Roukema
Mr. Flake                           Mr. Bereuter
Ms. Waters                          Mr. Baker
Mr. Sanders                         Mr. Lazio
Mr. Gutierrez                       Mr. Bachus
Ms. Roybal-Allard                   Mr. Castle
Mr. Barrett                         Mr. Royce
Ms. Velazquez                       Mr. Lucas
Mr. Watt                            Mr. Metcalf
Mr. Bentsen                         Mr. Ney
Mr. Jackson                         Mr. Barr
Ms. Kilpatrick                      Mr. Fox
Ms. Hooley                          Mrs. Kelly
                                    Dr. Paul
                                    Dr. Weldon
                                    Mr. Ryun
                                    Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Hill
                                    Mr. Sessions
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones
                                    Mr. Maloney

                             ROLLCALL NO. 9

    Date: April 17, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Motion by: Ms. Velazquez.
    Description of motion: To amend Title II, Section 225 to 
allow minimum rents from $0 to $25.
    Results: Rejected 16 to 22.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. Vento                           Mr. Bereuter
Mr. Kennedy                         Mr. Lazio
Mr. Flake                           Mr. Bachus
Ms. Waters                          Mr. Castle
Mr. Gutierrez                       Mr. Royce
Ms. Roybal-Allard                   Mr. Lucas
Mr. Barrett                         Mr. Ney
Ms. Velazquez                       Mr. Barr
Mr. Watt                            Mr. Fox
Mr. Bentsen                         Mrs. Kelly
Mr. Jackson                         Dr. Paul
Ms. Kilpatrick                      Mr. Ryun
Mr. Maloney                         Mr. Cook
Ms. Hooley                          Mr. Snowbarger
Mr. Torres                          Mr. Riley
                                    Mr. Hill
                                    Mr. Sessions
                                    Mr. LaTourette
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones

                            ROLLCALL NO. 10

    Date: April 17, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description of motion: To insure that housing units built 
on land formerly used for public housing include not less than 
\1/3\ of such units for low-income housing.
    Results: Rejected 19 to 20.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. Vento                           Mr. Bereuter
Mr. Frank                           Mr. Lazio
Mr. Kennedy                         Mr. Bachus
Mr. Flake                           Mr. Royce
Ms. Waters                          Mr. Metcalf
Mr. Sanders                         Mr. Ehrlich
Mrs. Maloney                        Mr. Fox
Mr. Gutierrez                       Mrs. Kelly
Ms. Roybal-Allard                   Dr. Paul
Mr. Barrett                         Mr. Ryun
Mr. Watt                            Mr. Cook
Mr. Bentsen                         Mr. Snowbarger
Mr. Jackson                         Mr. Riley
Ms. Kilpatrick                      Mr. Hill
Mr. Maloney                         Mr. Sessions
Ms. Hooley                          Mr. LaTourette
Ms. Carson                          Mr. Manzullo
Mr. Torres                          Mr. Foley
                                    Mr. Jones

                            ROLLCALL NO. 11

    Date: April 17, 1997.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description of motion: Authorizes full funding of the 
Operating Fund reflected in the Local Housing Management Plans.
    Results: Rejected 20 to 25.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. Vento                           Mr. McCollum
Mr. Frank                           Mr. Bereuter
Mr. Kennedy                         Mr. Lazio
Mr. Flake                           Mr. Bachus
Ms. Waters                          Mr. King
Mr. Sanders                         Mr. Royce
Mrs. Maloney                        Mr. Lucas
Mr. Gutierrez                       Mr. Metcalf
Ms. Roybal-Allard                   Mr. Ney
Mr. Barrett                         Mr. Ehrlich
Mr. Watt                            Mr. Barr
Mr. Ackerman                        Mr. Fox
Mr. Bentsen                         Mrs. Kelly
Mr. Jackson                         Dr. Weldon
Ms. Kilpatrick                      Mr. Ryun
Mr. Maloney                         Mr. Cook
Ms. Hooley                          Mr. Snowbarger
Ms. Carson                          Mr. Riley
Mr. Torres                          Mr. Hill
                                    Mr. Sessions
                                    Mr. LaTourette
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones

                            ROLLCALL NO. 12

    Date: April 23, 1997.
    Motion by: Mr. Vento.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description: Provides for hardship exemption from minimum 
rent requirements, included in the legislation, of $25-$50 
where a legal alien has lost public benefits because of the 
implementation of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996.
    Result: Rejected 13 to 25.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. LaFalce                         Mrs. Roukema
Mr. Vento                           Mr. Baker
Mr. Frank                           Mr. Lazio
Ms. Waters                          Mr. King
Mr. Gutierrez                       Mr. Royce
Mr. Barrett                         Mr. Lucas
Mr. Watt                            Mr. Metcalf
Mr. Ackerman                        Mr. Ney
Mr. Jackson                         Mr. Ehrlich
Mr. Maloney                         Mr. Barr
Ms. Carson                          Mrs. Kelly
Mr. Torres                          Dr. Paul
                                    Dr. Weldon
                                    Mr. Ryun
                                    Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Hill
                                    Mr. Sessions
                                    Mr. LaTourette
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones
                                    Ms. Hooley

                            ROLLCALL NO. 13

    Date: April 23, 1997.
    Motion by: Mrs. Kelly.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description: Previous Question on the Debate of Mr. Vento's 
motion strike language imposing CDBG sanctions on CDBG 
entitlement communities that substantially contribute to their 
Public Housing Authority's ``troubled'' designation status.
    Result: Accepted 23 to 19 with one pass.
        YEAS                          NAYS
Mr. Leach                           Mr. Cook
Mrs. Roukema                        Mr. Gonzalez
Mr. Baker                           Mr. Vento
Mr. Lazio                           Mr. Kennedy
Mr. King                            Mr. Flake
Mr. Royce                           Ms. Waters
Mr. Lucas                           Mr. Sanders
Mr. Metcalf                         Mrs. Maloney
Mr. Ney                             Mr. Gutierrez
Mr. Ehrlich                         Ms. Roybal-Allard
Mr. Barr                            Mr. Barrett
Mr. Fox                             Mr. Watt
Mrs. Kelly                          Mr. Ackerman
Dr. Paul                            Mr. Bentsen
Dr. Weldon                          Mr. Jackson
Mr. Ryun                            Mr. Maloney
Mr. Snowbarger                      Ms. Hooley
Mr. Riley                           Ms. Carson
Mr. Hill                            Mr. Torres
Mr. LaTourette
Mr. Manzullo
Mr. Foley
Mr. Jones

                            ROLLCALL NO. 14

    Date: April 23, 1997.
    Motion by: Mr. Vento.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description: Strike language imposing CDBG sanctions on 
CDBG entitlement communities that substantially contribute to 
their Public Housing Authority's ``troubled'' designation 
status.
    Result: Rejected 19 to 26.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. LaFalce                         Mrs. Roukema
Mr. Vento                           Mr. Bereuter
Mr. Kennedy                         Mr. Baker
Mr. Flake                           Mr. Lazio
Ms. Waters                          Mr. Castle
Mr. Sanders                         Mr. King
Mrs. Maloney                        Mr. Royce
Mr. Gutierrez                       Mr. Lucas
Ms. Roybal-Allard                   Mr. Metcalf
Mr. Barrett                         Mr. Ney
Mr. Watt                            Mr. Ehrlich
Mr. Ackerman                        Mr. Barr
Mr. Bentsen                         Mr. Fox
Mr. Jackson                         Mrs. Kelly
Mr. Maloney                         Dr. Paul
Ms. Hooley                          Dr. Weldon
Ms. Carson                          Mr. Ryun
Mr. Torres                          Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Hill
                                    Mr. LaTourette
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones

                            ROLLCALL NO. 15

    Date: April 23, 1997.
    Motion by: Mr. Kennedy.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description: Strike Title IV--Home Rule Flexible Grant 
Option. Title IV would allow local governments, on a voluntary 
basis, to petition HUD to merge public housing programs with 
other local governmental programs in order to address 
comprehensive neighborhood problems.
    Result: Rejected 19 to 29.
        YEAS                          NAYS
Mr. Gonzalez                        Mr. Leach
Mr. LaFalce                         Mr. McCollum
Mr. Vento                           Mrs. Roukema
Mr. Frank                           Mr. Bereuter
Mr. Kennedy                         Mr. Baker
Mr. Flake                           Mr. Lazio
Ms. Waters                          Mr. Bachus
Mr. Sanders                         Mr. Castle
Mrs. Maloney                        Mr. King
Mr. Gutierrez                       Mr. Royce
Ms. Roybal-Allard                   Mr. Lucas
Mr. Barrett                         Mr. Metcalf
Mr. Watt                            Mr. Ney
Mr. Hinchey                         Mr. Ehrlich
Mr. Ackerman                        Mr. Barr
Mr. Jackson                         Mr. Fox
Mr. Maloney                         Mrs. Kelly
Ms. Hooley                          Dr. Paul
Ms. Carson                          Dr. Weldon
                                    Mr. Ryun
                                    Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Hill
                                    Mr. LaTourette
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones
                                    Mr. Bentsen

                            ROLLCALL NO. 16

    Date: April 23, 1997.
    Motion by: Mr. Gutierrez.
    Measure: Housing Opportunity and Responsibility Act of 
1997.
    Description: Strike Title VII, Section 704 that would 
provide the HUD Secretary with authority only to raise income 
eligibility levels for the HOME and CDBG programs, and not 
lower them to a national average.
    Result: Rejected 14 to 27.
        YEAS                          NAYS
Mr. Kanjorski                       Mr. Leach
Mr. Kennedy                         Mr. McCollum
Mr. Flake                           Mrs. Roukema
Mr. Sanders                         Mr. Bereuter
Mr. Gutierrez                       Mr. Baker
Ms. Roybal-Allard                   Mr. Lazio
Mr. Barrett                         Mr. Bachus
Mr. Watt                            Mr. Castle
Mr. Bentsen                         Mr. King
Mr. Jackson                         Mr. Campbell
Ms. McKinney                        Mr. Royce
Mr. Maloney                         Mr. Lucas
Ms. Hooley                          Mr. Metcalf
Ms. Carson                          Mr. Ney
                                    Mr. Ehrlich
                                    Mr. Barr
                                    Mr. Fox
                                    Mrs. Kelly
                                    Dr. Paul
                                    Dr. Weldon
                                    Mr. Ryun
                                    Mr. Cook
                                    Mr. Snowbarger
                                    Mr. Riley
                                    Mr. Manzullo
                                    Mr. Foley
                                    Mr. Jones
    A motion to adopt H.R. 2 and favorably report H.R. 2 as 
amended to the House was approved 28-19 on April 23, 1997. The 
Committee then passed by voice vote to authorize the Chairman 
to make any technical or conforming amendments.
        YEAS                          NAYS
Mr. Leach                           Dr. Paul
Mr. McCollum                        Mr. Gonzalez
Mrs. Roukema                        Mr. Vento
Mr. Bereuter                        Mr. Schumer
Mr. Baker                           Mr. Kanjorski
Mr. Lazio                           Mr. Kennedy
Mr. Bachus                          Mr. Flake
Mr. Castle                          Ms. Waters
Mr. King                            Mr. Sanders
Mr. Campbell                        Mrs. Maloney
Mr. Lucas                           Mr. Gutierrez
Mr. Metcalf                         Ms. Roybal-Allard
Mr. Ney                             Mr. Barrett
Mr. Ehrlich                         Mr. Watt
Mr. Barr                            Mr. Jackson
Mr. Fox                             Ms. McKinney
Mrs. Kelly                          Mr. Maloney
Dr. Weldon                          Ms. Hooley
Mr. Ryun                            Ms. Carson
Mr. Cook
Mr. Snowbarger
Mr. Riley
Mr. LaTourette
Mr. Manzullo
Mr. Foley
Mr. Jones
Mr. Ackerman
Mr. Bentsen

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings and recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI and clause 4(c)(2) of rule X of 
the Rules of the House of Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of rule XI of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority for increased tax 
expenditures.

               Congressional Budget Office Cost Estimates

    The cost estimate pursuant to Clause 2(l)(3)(C) of rule XI, 
of the Rules of the House of Representatives and Section 403 of 
the Congressional Budget Act of 1974 has been requested, but 
had not been prepared as of the filing of Part I of this 
report. The estimate will be included in Part II of this report 
to be filed at a future date.

                      Advisory Committee Statement

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

                    Congressional Accountability Act

    The reporting requirement under Section 102(b)(3) of the 
Congressional Accountability Act (P.L. 104-1) is inapplicable 
because this legislation does not relate to terms and 
conditions of employment or access to public services or 
accommodations.

       Congressional Budget Office Federal Mandate Cost Estimate

    The cost estimate pursuant to Section 424 of the Unfunded 
Mandates Reform Act (P.L. 104-4) has been requested, but had 
not been prepared as of the filing of this report. The estimate 
will be filed in Part II of this report to be filed at a future 
date.

                           Section-by-Section

              Section 1--Short title and table of contents

    This Act may be cited as the ``Housing Opportunity and 
Responsibility Act of 1997.''

    Section 2--Declaration of policy to renew American neighborhoods

    States that the federal government:
    (1) has a responsibility to promote the general welfare of 
the nation (a) by using federal resources to aid families and 
individuals seeking affordable homes that are safe, clean, and 
healthy, and in particular, assisting responsible, deserving 
citizens who cannot provide fully for themselves because of 
temporary circumstances or factors beyond their control; (b) by 
working to ensure a thriving national economy and a strong 
private housing market; and (c) by developing effective 
partnerships among the federal government, state and local 
governments, and private entities that allow government to 
accept responsibility for fostering the development of a 
healthy marketplace, and allow families to prosper and thrive 
without government involvement in their day-to-day activities;
    (2) cannot through its direct action or involvement provide 
for the housing of every American citizen, or even a majority 
of its citizens, but it is the responsibility of government to 
promote and protect the independent and collective actions of 
private citizens to develop housing and strengthen their own 
neighborhoods;
    (3) should act only where there is a serious need that 
private citizens or groups cannot or are not addressing 
responsibly, and that by merely providing physical structures 
to house the poor, will not pull generations up from poverty.
    This section also states that it is the goal of our Nation 
that all citizens have decent and affordable housing.

                      TITLE I--GENERAL PROVISIONS

                   Section 101--statement of purpose.

    States that the purpose of the Housing Opportunity and 
Responsibility Act of 1997 (the ``Act'') is to promote safe, 
clean and healthy housing, and affordable housing opportunities 
to low-income families by (1) deregulating public housing 
agencies (``PHAs''); (2) providing for more flexible use of 
Federal assistance; (3) facilitating mixed income communities; 
(4) increasing accountability and rewarding effective 
management of PHAs; (5) creating incentives to work for 
residents of dwelling unitsassisted by PHAs; and (6) recreating 
the existing rental assistance voucher program to more closely resemble 
the private housing market.

                        section 102--definitions

    Defines various terms for the purpose of this Act.

          section 103--organization of public housing agencies

    Defines ``public housing agency'' and ``agency.'' Requires 
that the board of directors of a PHA include at least one 
elected public housing resident, except where the PHA: (1) is a 
State or local governing body; (2) oversees less than 250 
public housing dwelling units; or (3) is required by State law 
to have a salaried, full-time Board of Directors.

    section 104--determination of adjusted income and median income

    Defines ``adjusted income'' as the difference between the 
income of the members of the family residing in a dwelling unit 
(or the person on the lease) and the amount of any income 
exclusions--some of which are mandatory. Mandatory exclusions 
are for: (1) $400 for elderly or disabled families; (2) 
unreimbursed medical expenses over 3 percent of the family's 
annual income; (3) reasonable child care expenses necessary for 
enabling a person to work; (4) any earned income of minors 
residing in the household; and (5) certain child support 
payments.

   section 105--community work and family self-sufficiency agreements

    Requires adult residents of public housing or choice-based 
assistance to enter into a self-sufficiency program, contribute 
no less than eight hours of work per month within the community 
in which the adult resides or participate on an ongoing basis 
in a program designed to promote economic self-sufficiency, and 
set a target date by which the family hopes to move out of 
public housing. Exceptions to this requirement include working 
families, senior citizens, disabled families, persons attending 
school or vocational training, or physically impaired persons. 
In addition, persons complying with work or economic self-
sufficiency program requirements, under welfare or public 
assistance programs, are exempt from the work requirement. 
Compliance with target date requirements shall not be construed 
by a PHA as grounds for eviction.
    Ensures that a resident whose public assistance was 
decreased as a result of inability to find work despite 
compliance with welfare requirements will receive a rent 
reduction according to current calculations of residential 
rental payments. However, those who do not comply with welfare 
regulations will not receive a reduction in rent if their 
public assistance is decreased.

              section 106--local housing management plans

    Requires each PHA to submit a local housing management 
plan, composed of an initial five-years showing the PHA's 
statement of needs and goals for that period (updated every 
five years), and a more detailed operating plan, which shall be 
submitted annually. The contents of the plan (which may be 
submitted as part of a comprehensive housing affordability 
strategy) must include, among other things, information on the 
housing needs of the locality, population served, method of 
rent determination, operations, capital improvements, unmet 
housing needs of families with incomes less than 30 percent of 
median, homeownership efforts, and efforts to coordinate the 
program with local welfare agencies and providers. The plan 
must also establish safety measures in consultation with police 
officers. The plan must be submitted to local elected officials 
for review and approval. Each PHA must also make its plan and 
any amendment thereto available to the public in a manner that 
affords affected public housing residents, assisted families, 
and other interested parties an opportunity to examine its 
content and to submit comments. The Secretary may grant waivers 
from some of these requirements for PHAs managing less than 250 
units.

                      section 107--review of plans

    Discusses standards by which the Secretary may review Local 
Housing Management Plans.

                  section 108--reporting requirements

    Each PHA is required to submit annually a performance and 
evaluation report on the use of funds provided under this Act 
and how such use coincides with the needs of the community as 
identified in the PHA's plan.

                       section 109--pet ownership

    Allows ownership of pets in federally-assisted housing 
pursuant to Section 227 of the Housing and Urban-Rural Recovery 
Act of 1983 (see Section 622).

            section 110--administrative grievance procedure

    Requires each PHA to establish a grievance procedure that 
provides due process for residents, except that a PHA does not 
need to use such grievance procedure involving an eviction or 
termination of tenancy wherein the tenant is entitled to a 
court hearing which affords due process.

                 section 111--headquarters reserve fund

    Authorizes the Secretary to retain not more than 2 percent 
of funds appropriated under Title II for use in connection with 
the provision of assistance in the case of natural disasters, 
emergencies, settlement of litigation, or actions taken by the 
Secretary regarding PHAs that are designated as ``troubled'' or 
``at risk'' PHAs (as defined in Section 533 of this Act).

                      section 112--labor standards

    Provides that grants or sales under the Act are subject to 
prevailing wages under Davis-Bacon, except for volunteers.

                     Section 113--Nondiscrimination

    Requires PHAs and their contractors to comply with 
nondiscrimination and civil rights laws.

                Section 114--Prohibition on use of funds

    Prohibits use of funds for indemnification of contractors 
or subcontractors for losses associated with judgments 
involving infringement of intellectual property rights.

             Section 115--Inapplicability to Indian housing

    Makes the Act inapplicable to Indian PHAs, which are now 
subject to the provisions of the Native American Housing 
Assistance and Self-Determination Act of 1996 (Public Law: 104-
330).

                        Section 116--Regulations

    Permits the Secretary to issue appropriate regulations.

                        TITLE II--PUBLIC HOUSING

                        Subtitle A--Block Grants

                   Section 201--Block Grant Contracts

    Provides general parameters for block grant contracts to be 
entered into between the Secretary and the PHAs. The PHAs must 
agree to provide safe, clean, and healthy housing that is 
affordable in return for assistance.

         Section 202--Grant authority, amount, and eligibility

    Requires the Secretary to establish two funds for provision 
of block grants to PHAs: a capital fund for capital 
improvements, and an operating fund for the costs of PHA 
operations. A PHA shall have the ability to use up to 20 
percent of its capital grant for PHA operations. In return for 
receiving federal assistance, the PHA is required to have 
entered into a local cooperation agreement with the local 
government. Allows the Secretary to provide grants to an 
ineligible PHA, but only for a period necessary to secure an 
alternative management entity.
    Allows a PHA that owns or operates less than 250 units 
flexibility to use amounts from grants under this Title for any 
eligible activities under Section 203. Allows the Secretary to 
recapture grants from PHA's capital funds if the amounts are 
not used or obligated 24 months after distribution. Allows a 
governor to request 50 percent of the capital funds for PHAs 
with less than 100 units be directed to the state for 
distribution by the governor.
    The amount of the grant is to be determined pursuant to a 
formula, developed pursuant to Section 204.

             Section 203--Eligible and required activities

    Authorizes capital grant uses for production and 
modernization of public housing, and operating grant uses for 
the costs of administering the program and certain other 
activities.
    Contains a mandatory conversion provision requiring PHAs to 
provide housing assistance in the form of vouchers in lieu of 
continuing to subsidize certain distressed developments under 
certain circumstances, including where a cost analysis shows 
that using vouchers would be less expensive than continuing to 
operate the development as public housing. Requires 
notification of tenants in public housing developments subject 
to conversion and provides them choice-based housing assistance 
or occupancy in a unit operated or assisted by the PHA.
    Authorizes the Secretary to determine whether a PHA has 
failed to comply with this subsection and, in such case, to 
withdraw funding from the development.

             Section 204--Determination of grant allocation

    Provides for interim allocations to PHAs pending the 
development of a permanent grant formula for allocating capital 
funds and a permanent grant formula for allocating operating 
funds. Each formula is to be developed using a negotiated 
rulemaking procedure and should reward performance.
    Prescribes that chronically vacant (six months or more) 
units are ineligible to receive subsidy except to the extent of 
paying utilities. Provides incentives to encourage PHAs to 
increase nonrental income. Allows that any benefit of increase 
in income will not result in a decrease of grants provided 
under this Title. An agency may retain full benefit of income, 
except in specific circumstances.

           Section 205--Sanctions for improper use of amounts

    Allows the Secretary to terminate, withhold, reduce, or 
limit the availability of payments under this Act if the PHA 
does not comply with its requirements.

           Subtitle B--Admissions and Occupancy Requirements

              Section 221--Low-income housing requirements

    Requires public housing produced under this Act (or the 
1937 Act) to be operated as public housing for a 40-year period 
and limits the sale or disposition of any public housing if the 
property has received an operating subsidy within 10 years of 
the sale date. Permits the use of assistance for creating 
mixed-income developments.

                    Section 222--Family eligibility

    Limits occupancy of public housing to families who, at the 
time of the initial occupancy, qualify as low-income. PHAs may 
create a selection criteria for incoming residents that are 
aimed at creating an income mix that reflects the eligible 
population of that jurisdiction provided at least 35 percent of 
the units made available for incoming occupancy are occupied by 
families whose income does not exceed 30 percent of area median 
income. PHAs are prohibited from concentrating or restricting 
very-low income families in particular developments. Certain 
income and eligibility restrictions may be waived by the PHA in 
order to provide units to police officers, law enforcement, and 
security personnel. Allows fungibility for choice-based housing 
assistance such that a PHA may meet the targeting level of 35 
percent by providing choice-based certificates to residents 
with income levels below 30 percent of median income.

                 Section 223--Preferences for occupancy

    Authorizes PHAs to establish local preferences based on 
local housing needs and priorities. Provides a sense of the 
Congress that PHAs should adopt preferences for individuals who 
are victims of domestic violence.

                   Section 224--Admission procedures

    Authorizes a PHA to ensure that each family residing in a 
public housing development owned or managed by the PHA has been 
admitted in accordance with this Title. Applicants who are 
denied admission must be granted a hearing. Allows PHAs to 
create site-based waiting lists for admissions to individual 
developments. Requires PHAs to maintain the confidentiality of 
victims of domestic violence. Requires procedures to comply 
with applicable civil rights laws.

              Section 225--Family choice of rental payment

    A family will be given a choice, to be exercised annually, 
of paying as rent either (1) an amount that shall not exceed 30 
percent of their adjusted income, or (2) a flat rent, which the 
PHA is to determine for each unit in its inventory. In making 
these rent determinations, PHAs shall strive to develop rent 
structures that do not create disincentives to work and self-
sufficiency. Regardless of income, every family shall pay a 
minimum monthly rental which shall be determined by the PHA in 
an amount between $25 and $50, except in cases of severe 
financial hardship and certain other circumstances. The amount 
a tenant pays for utilities will be included as payment toward 
the minimum rent. The income of newly employed individuals is 
disallowed for an 18-month period after the beginning date of 
employment.
    Any monthly contribution increase greater than 30 percent 
of the monthly contribution amount that would have been paid by 
a family for an assisted housing unit under the provisions of 
the Housing Act of 1937 immediately prior to the effective date 
of this Title, unless resulting from the requirement to pay the 
minimum rent, shall be phased in equally over a period of three 
years.

                    Section 226--Lease requirements

    Requires a PHA to utilize leases that do not contain 
unreasonable terms or conditions, that require the PHA to 
comply with housing quality standards, and that obligate the 
PHA to give adequate written notice of termination. Leases must 
also grant residents the right to review relevant documents 
related to any termination or eviction procedures instituted 
against them.

   Section 227--Designated housing for elderly and disabled families

    Permits a PHA to designate all or part of a development as 
being for only elderly, only disabled, or only elderly and 
disabled, provided the designation is part of the PHA's Local 
Housing Management Plan. A PHA must establish that designation 
of a development is necessary to meet certain goals and needs, 
and must include information regarding the supportive services 
and other assets that will be provided to serve the residents, 
including those adversely affected by the designation.
    Allows a PHA to admit ``near-elderly'' applicants (those 
who are aged 55 years or more) to elderly developments with 
excessive vacancies. A PHA may not evict a resident because of 
the designation under this section of a development where that 
resident's unit is located. A resident who agrees to relocate 
as a result of the designation, however, shall receive notice 
of and an explanation of available relocation benefits as soon 
as practicable, access to comparable housing, and payment of 
actual, reasonable moving expenses.

                         Subtitle C--Management

                   Section 231--Management procedures

    Requires PHAs to ensure sound management and authorizes 
them to contract with other entities to perform management 
functions.

               Section 232--Housing quality requirements

    Requires PHAs to maintain public housing pursuant to the 
local jurisdiction's laws, regulations, standards, or codes 
regarding habitability or, in the absence of such local codes, 
in accordance with the housing quality standards promulgated by 
the Secretary pursuant to subparagraph (b) of this Section. 
Requires annual inspections by the PHAs. Inspection results 
must be retained and submitted upon request to the Secretary, 
to the HUD Inspector General, or to any auditor conducting an 
audit pursuant to Section 541.

                  Section 233--Employment of residents

    Sets forth conforming amendments to Section 3 of the 
Housing and Urban Development Act of 1968, which allows PHAs to 
employ residents in any capacity and requires that contractors 
and subcontractors must use their best efforts to employ and 
train residents of public housing.

  Section 234--Resident councils and resident management corporations

    Authorizes formation of resident councils by residents of a 
public housing development to consider issues relating to 
resident interests and to consult with the PHA. A council shall 
be representative of the residents, adopt written procedures 
for the election of officers, and have a democratically elected 
governing board.
    Authorizes residents to create resident management 
corporations (RMC) for purposes of assuming management 
functions or purchasing developments. A RMC must be organized 
under state law, have as its sole voting members the residents 
of the development, and be supported by the resident council 
or, in the absence of a resident council, by a majority of the 
households of the development.

       Section 235--Management by resident management corporation

    Allows a PHA to contract with a RMC to manage one or more 
developments. The contract must require the corporation to 
follow the relevant rules and laws of this Act, and may include 
specific terms relevant to all other management issues. The RMC 
must provide the PHA with bonding or insurance related to loss, 
theft, embezzlement, or fraudulent acts on the part of the RMC 
or its employees. Sets forth the requirements for each contract 
regarding funding of the RMC by the PHA.

 Section 236--Transfer of management of certain housing to independent 
                    manager at request of residents

    Permits the Secretary, at the request of the residents, to 
transfer the management of any portion of a development, 
including an entire development, to an independent management 
entity in certain, specified circumstances. Requires that 
transfers of management be approved by a majority of the 
resident council.

               Section 237--Resident opportunity program

    Reauthorizes for one year at $15 million the Resident 
Opportunity Program which encourages, among other things, the 
formation of resident management entities. Requires a report 
from the Secretary assessing the program three years after the 
date of enactment of this Act.

                       Subtitle D--Homeownership

              Section 251--Resident homeownership programs

    Authorizes PHAs to design homeownership programs for sale 
of public housing units to public housing residents, to 
entities for resale to residents or other low-income persons, 
or directly to low-income persons. There is a downpayment 
requirement of one percent of the purchase price of any unit, 
to be provided by the purchasing family. Resale restrictions 
are imposed on purchasers for five years after sale to prevent 
purely speculative purchases. Homeownership programs under this 
section are not subject to the demolition or disposition 
requirements of Section 261 of this Act. Allows high-performing 
PHAs to use proceeds from disposition of scatter-site public 
housing to purchase replacement scattered-site housing which 
will be considered public housing.

Subtitle E--Disposition, Demolition, and Revitalization of Developments

      Section 261--Requirements for demolition and disposition of 
                              developments

    Eliminates the requirement that a PHA replace, on a one-
for-one basis, every unit of public housing that the PHA 
disposes of or demolishes. However, if housing units are 
provided in property that was previously public housing and 
subsequently was demolished, the PHA shall seek to ensure that 
25 percent of the new units will be reserved for low-income 
families.
    Provides PHAs with the parameters by which they may 
demolish or dispose of certain nonviable or nonmarketable 
developments consistent with their community improvement plan. 
Included are developments that are located in unsuitable 
locations, severely distressed or obsolete, financially 
infeasible for rehabilitation or operation, and developments 
retention of which are not in the best interests of the PHA. 
Parameters exist for partial disposition of demolition of a 
development, as well as for disposition of undeveloped 
property.
    Requires the Local Housing Management Plan to include 
details relating to most aspects of any proposal to demolish or 
dispose of property, including the purpose of the action, how 
proceeds will be used, and plans for relocation of any 
displaced residents. Requires 2 independent appraisals for land 
valued over $100,000 before demolition or disposition of public 
housing development. In emergency circumstances PHAs may 
demolish or dispose of units not included in the plan.
    Requires the PHA to consult with local officials and 
residents of the development. Resident organizations and 
resident management organizations are given special notice of 
disposition and a special right to purchase the project. 
Requires notification to tenants in public housing developments 
subject to demolition or disposition, and requires counseling 
for displaced families. Other relocation procedures for 
displaced families are defined.
    The permitted uses of any proceeds from disposition include 
payment of project costs and other obligations, providing 
additional housing assistance, job training, child care, or 
supportive services, and inducing private commercial 
enterprises on public housing sites.

Section 262--Demolition, site revitalization, replacement housing, and 
            choice-based assistance grants for developments

    Authorizes grants for fiscal years 1998, 1999, and 2000 of 
$500 million for each year, to be used to demolish obsolete or 
severely distressed public housing developments, to revitalize 
sites, to decrease overdue concentrations of poverty, and to 
provide choice-based housing in connection with any of these 
efforts. A PHA must contribute 5 percent of the grant amount. 
Eligible activities include provision of services to residents, 
butexpenditures for services must not exceed 10 percent of the 
grant amount. The Secretary is to issue cost limits on eligible 
activities. If a PHA does not use the funds provided in a timely 
manner, the Secretary has the power to withdraw the funds and redirect 
the amounts to other entities. The Secretary is required to provide an 
annual report on activities taken under this section.

        Section 263--Voluntary voucher system for public housing

    Enables a PHA, in its discretion, to convert a public 
housing development to a housing voucher system. The PHA must 
submit a conversion assessment plan which shows the consistency 
of such conversion with the local housing management plan, 
describes the future use of the public housing development, and 
shows that the cost of such conversion is less expensive than 
continuing assistance as public housing. The Secretary has 
discretionary authority to waive these requirements or provide 
for a streamlined assessment. Requires tenant notification and 
counseling for displaced families. Provides choice-based 
assistance and reasonable relocation expenses to displaced 
families.

                Subtitle F--Mixed-Finance Public Housing

                         Section 265--Authority

    Allows the Secretary to authorize a PHA to use grant 
amounts under Section 262 or amounts from the capital fund to 
produce mixed-finance housing developments or replace or 
revitalize existing public housing units connected with mixed-
finance housing developments.

            Section 266--Mixed-finance housing developments

    Provides definition of mixed-finance housing. Allows mixed-
finance housing developments to be produced, or revitalized and 
owned by (1) a PHA or entity affiliated with a PHA, (2) a 
partnership, a limited liability company or entity in which the 
PHA is a general partner, managing member or participant in 
activities of the entity or (3) any entity that grants to the 
PHA the option to purchase the project under certain 
provisions.

                Section 267--Mixed-finance housing plan

    Provides that the Secretary only approve a mixed-finance 
housing plan if the PHA or approved entity has the ability to 
use the amounts provided under the plan effectively, the plan 
provides permanent financing commitments from a sufficient 
number of sources, the plan provides for use of amounts 
provided under Section 265 for financing mixed-income housing, 
and the plan complies with any other criteria set forth by the 
Secretary.

 Section 268--Rent levels for housing financed with low-income housing 
                               tax credit

    With respect to any dwelling unit in a mixed-finance 
housing development that is assisted pursuant to the Low-Income 
Housing Tax Credit, the rents charged to residents of such unit 
shall not exceed rents allowed under laws governing Low-Income 
Housing Tax Credit.

       Section 269--Carry-over of assistance for replaced housing

    Provides that in the case of a mixed-finance housing 
development that is replacement housing for public housing 
demolished or disposed of, or is the result of the 
revitalization of existing public housing, the share of 
assistance received from the capital and operating funds by the 
PHA that owner or operated the demolished, disposed, or 
revitalized housing shall not be reduced due to such actions, 
except in certain circumstances.

                     Subtitle G--General Provisions

               Section 271--Payment of non-Federal share

    Allows that the use value of public housing buildings 
developed or maintained by federal assistance may be used as 
the non-federal share of federal programs requiring non-federal 
participation in programs assisting residents.

     Section 272--Authorization of appropriations for block grants

    Allocates grants for each fiscal year up to and including 
2002 of $2.5 billion for the capital fund and $2.9 billion for 
the operating fund.

              Section 273--Funding for operation safe home

    Allows not more than $20 million of the amounts made 
available for each fiscal year 1998 and 1999 for carrying out 
the Community Partnerships Against Crime Act of 1997be 
available each fiscal year for use under the Operating Safe 
Home Program.

  Section 274--Funding for relocation of victims of domestic violence

    Allows not more than $700,000 of the amounts made available 
each fiscal year up to and including 2002 for choice-based 
housing assistance under Title III be made available for 
relocating residents of public housing who have been subject to 
domestic violence and for whom the assistance is likely to 
reduce or eliminate the threat of subsequent violence to 
members of the family.

TITLE III--CHOICE-BASED RENTAL HOUSING AND HOMEOWNERSHIP ASSISTANCE FOR 
                          LOW-INCOME FAMILIES

                         Subtitle A--Allocation

      Section 301--Authority to provide housing assistance amounts

    Authorizes the Secretary to enter into contracts with PHAs 
to provide assistance under this Title.

                   Section 302--Contracts with PHA's

    Authorizes contracts with PHAs for one fiscal year. PHAs 
are required to enforce the relevant housing quality standards 
pursuant to Section 351(c)(4)and to establish a grievance 
procedure for residents who allege non-compliance with such 
quality standards.

        Section 303--Eligibility of PHA's for assistance amounts

    Provides that assistance may be allocated pursuant to a 
formula (Section 304) only to those PHAs that: (1) have 
submitted a Local Housing Management Plan for the fiscal year; 
(2) have not received any notification from the Secretary that 
such plan is not in compliance with all requirements; (3) have 
no members on the Board that have been convicted of a felony; 
and (4) have not been disqualified for assistance under Title 
IV of this Act.

                   Section 304--Allocation of amounts

    Requires the Secretary to develop a formula, pursuant to 
negotiated rulemaking, for allocating assistance based, in 
part, on census data, the various needs of the community, and 
its comprehensive housing affordability strategy. The Secretary 
may recapture up to 50 percent of any funds that remain 
unobligated by a PHA for a period of eight months or more after 
receipt of the funds.
    Requires the Secretary to determine the set-aside for an 
Indian tenant-based program.

                    Section 305--Administrative fees

    Sets administrative fees for PHAs at 7.5 percent of their 
grant amount for the first 600 units and 7.0 percent of the 
grant amount for all units in excess of 600. The Secretary may 
increase this fee in certain circumstances.
    The Secretary shall ensure that, in cases where more than 
one PHA has jurisdiction over an area where a recipient of 
choice-based assistance resides, the PHA actually administering 
the assistance shall receive the fee.

             Section 306--Authorizations of appropriations

    Authorizes $1,861,668,000 grant under this Title as the 
appropriation level for each fiscal year through 2002, 
including $50 million for nonelderly, disabled families for 
each fiscal year. The Secretary and Inspector General shall 
make money available out of choice-based housing assistance for 
relocation of witnesses in connection with efforts to combat 
crime in public and assisted housing.

            Section 307--Conversion of section 8 assistance

    Requires conversion of section 8 assistance that remains 
unused as of the effective date of this Act to choice-based 
assistance under this Title, unless the Secretary determines 
such conversion would be inconsistent with existing 
commitments.

 Section 308--Recapture and reuse of annual contract project reserves 
   under choice-based housing assistance and section 8 tenant-based 
                          assistance programs

    Requires the HUD Secretary to recapture excess Section 8 
contract reserves, from both project-based and tenant-based 
assistance contracts, to hold until needed to enter into, 
amend, or renew Section 8 contracts.

   Subtitle B--Choice-Based Housing Assistance for Eligible Families

     Section 321--Eligible families and preferences for assistance

    Requires that assistance under this Title be provided to 
families who are low-income families or otherwise qualified by 
federal law. Not less than 40 percent of the families receiving 
assistance under this Title shall have incomes not exceeding 30 
percent of area median income. Income reviews shall take place 
annually. Local preferences may be established by a PHA after a 
public hearing and an opportunity for interested parties to 
comment.
    Assistance is portable on a national scale. Families may 
not receive assistance, however, if they have moved as a result 
of an eviction due to a lease violation. A PHA may, for a 
family applying for assistance under this Title that does not 
at the time of application live in that PHA's jurisdiction, 
require such family to live in the jurisdiction of the PHA for 
twelve months after beginning assistance to the family. 
Confidentiality is provided for victims of domestic violence. 
Provides a sense of the Congress that PHAs should adopt 
preferences for individuals who are victims of domestic 
violence.

                   Section 322--Resident contribution

    Provides that an assisted family shall pay as rent no more 
than (i) 30 percent of the adjusted income of the family, (ii) 
10 percent of the monthly income of the family, or (iii) that 
portion of a welfare payment designated as housing assistance, 
provided, however, that every family shall pay a minimum rental 
amount to be established by the PHA. Minimum rent shall not be 
less than $25 nor more than $50, with certain hardship 
exemptions provided. Monthly contribution increases for a 
family greater than $15 per month which result from provisions 
of this Act (except as a result of imposition of the minimum 
rent requirement) shall be implemented in phases.

                     Section 323--Rental indicators

    Requires the Secretary to establish and to publish annually 
rental indicators for a market area that may vary depending on 
the size and type of the dwelling unit. The rental indicators 
shall be adjusted annually based on the most recent available 
data.

                        Section 324--Lease terms

    Allows the owner of property to utilize leases that are of 
twelve months duration, restricted only in accordance with 
Section 325 (concerning termination), and that are in the 
standard form of leases used in the local housing market.

                  Section 325--Termination of tenancy

    Allows owners to terminate leases for any criminal activity 
on the part of the tenants, including drug crimes. Requires 
that leases include provisions notifying residents that cause 
for termination includes any such acts within a resident's 
unit. An owner must terminate tenancy in accordance with 
applicable State or local laws, including any notice provisions 
as required by law.

                      Section 326--Eligible owners

    Prescribes that eligible owners include individuals or 
entities that have not been debarred from participating in 
Federal programs.

                Section 327--Selection of dwelling units

    Permits the assisted family to make the determination of 
which dwelling unit they will lease provided the dwelling unit 
does not violate local deed restrictions.

                  Section 328--Eligible dwelling units

    Limits eligible dwelling units to those that are not 
located in a nursing home, penal, reformatory, medical, mental, 
or similar public or private institution. Each unit must be 
maintained to the extent required by the local jurisdiction's 
laws, regulations, standards, or codes regarding habitability 
or, if the local jurisdiction does not have such laws, 
regulations, standards, or codes, than the unit must be 
maintained at a standard to be set by the Secretary.
    Requires the PHA to inspect each dwelling unit at least 
annually and to retain records or inspection by the Secretary, 
the Inspector General, or any auditor conducting an audit under 
Section 541 of this Act.

                   Section 329--Homeownership option

    Allows a PHA to use funds under this Title to assist low-
income families in achieving homeownership. Eligible families 
must have sufficient income from employment or sources other 
than public assistance and must meet initial and continuing 
requirements established by the PHA. A PHA may establish a 
minimum downpayment requirement, with certain restrictions.

        Section 330--Assistance for rental of manufactured homes

    Provides that a PHA may provide assistance to low-income 
families under this Title for rental of manufactured housing. 
Sets forth requirements for entering into housing assistance 
contracts for those families who own the manufactured home but 
pay rent to the owner of land on which the home is located.

    Subtitle C--Payment of Housing Assistance on Behalf of Assisted 
                                Families

           Section 351--Housing assistance payments contracts

    Allows PHAs to enter into contracts with owners by which 
owners screen residents and provide units for eligible 
families, and for which the PHAs make payments directly to the 
owners on behalf of eligible families. A PHA may enter into a 
contract with itself for units it manages or owns. The term of 
the contract shall be not more than 12 months, and a lease 
pursuant to such a contract must conform with Sections 324, 
325, 328(a)(2), 642 and 643 of this Act.

           Section 352--Amount of monthly assistance payment

    Provides that the monthly payment for assistance under this 
Title shall be (a) in the case of a unit with gross rent that 
exceeds the payment standard under section 353, the payment 
standard less the resident's contribution, and (b) in the case 
of a unit with gross rent that is less than the payment 
standard under section 353, the amount by which the gross rent 
exceeds the resident's contribution (gross rent less the 
resident's contribution). In the case of (b), 50 percent of the 
difference between the payment standard and the gross rent 
shall be escrowed on behalf of the tenant; the remainder is 
returned to the U.S. Treasury.

                     Section 353--Payment standards

    Permits each PHA providing assistance under this Title to 
establish payment standards for varying size and type dwelling 
units in their local market areas. The payment standard shall 
be an amount that is not less than 80 percent and not greater 
than 120 percent of the rental indicators for the area as 
established under Section 323 of this Title.

                     Section 354--Reasonable rents

    Permits the rent to be set at levels based upon a 
negotiation between the owner and the renter. The PHA, however, 
shall determine whether the rent negotiated exceeds the rent 
charged for comparable units. If the PHA determines that the 
rent negotiated exceeds comparable rents, it shall notify the 
renter and may refuse to provide the payments for such units.

     Section 355--Prohibition of assistance for vacant rental units

    Prohibits payments to units vacated by residents, beginning 
on the first month after the resident vacates the unit.

            Subtitle D--General and Miscellaneous Provisions

                        Section 371--Definitions

    Sets forth definitions of terms used in the Act.

            Section 372--Rental assistance fraud recoveries

    Permits PHAs to retain the greater of 50 percent of the 
amounts recaptured from renters who abuse the program or 
expenses of the collection effort. The PHAs must use the 
proceeds within the assistance program.

   Section 373--Study regarding geographic concentration of assisted 
                                families

    Requires the Secretary to conduct a study which addresses 
and resolves the problems associated with the concentration of 
assisted families in Cook County, Illinois.

             Section 374--Study regarding rental assistance

    Requires the HUD Secretary to conduct a nationwide study of 
the choice-based housing assistance program and the Section 8 
tenant-based rental assistance regarding: housing providers, 
the physical and demographic conditions of assisted housing, 
total number of units for which assistance is provided, 
duration families remain on waiting lists before receiving 
assistance, and an assessment of the extent and quality of 
housing owners participation in relation to local housing 
market including availability and quality of housing. The 
Secretary shall submit the report to Congress no later than two 
years from date of enactment of this Act.

               TITLE IV--HOME RULE FLEXIBLE GRANT OPTION

                          section 401--purpose

    States purpose as providing local governments with greater 
flexibility in designing and administering federal housing 
assistance so that they may give incentives for self-
sufficiency, cost reduction, expansion of housing choices, or 
reduction of geographic concentrations of poverty.

                  section 402--flexible grant program

    Provides that a jurisdiction may, upon review and approval 
of the Secretary, combine federal housing assistance that would 
otherwise have gone to the jurisdiction (public housing, 
choice-based). The jurisdiction is required to enter into a 
performance contract with HUD upon approval of the proposed 
program. Provides that the amount of assistance to a 
jurisdiction shall not be decreased because of its 
participation under this Title.

                section 403--covered housing assistance

    Assistance available to be combined includes operating 
assistance provided to a PHA (operating subsidy), modernization 
funds, choice-based rental assistance under Title III, and 
Section 8 housing vouchers (Section 8 project-based assistance, 
which is subject to existing contracts, is not included).

                   section 404--program requirements

    Assistance must be provided to low-income families. Rental 
policies must be reasonable and designed to encourage 
employment and self-sufficiency. Not less than substantially 
the same number of families must be assisted, and the provision 
of assistance must be consistent with local welfare reform 
efforts.

            section 405--applicability of certain provisions

    Retains applicability of provisions governing demolition 
and disposition of public housing (Section 261) and labor 
standards (Section 112).

                        section 406--application

    Jurisdictions wishing to participate must submit 
applications to the Secretary, and shall be limited to periods 
of one to five years. The PHA is to provide for citizen 
participation in the development of the plan, to propose 
performance standards that would enable HUD to monitor the 
PHA's performance, and to show how the goals set forth by the 
jurisdiction in the plan are to be achieved. The Secretary 
shall review each application, establish performance standards, 
and be responsible for approving or disapproving each 
jurisdiction's proposal. The application must also include 
information so the Secretary can determine that the 
jurisdiction has the management capacity, the plan does not 
lead to excessive duplication of administrative efforts, and 
that the housing funds will remain separate for other city 
funds to ensure that they are used for the purpose intended. 
Allows affected PHAs to review application and submit written 
comments.

                         section 407--training

    The Secretary shall, in consultation with industry groups, 
provide for technical assistance. Detailed evaluations of 
thirty jurisdictions shall be conducted for purposes of 
providing program models that can be replicated.

                      section 408--accountability

    The Secretary shall monitor the performance of each 
jurisdiction under its plan. Sets forth reporting requirements 
for participating jurisdictions.

                       section 409--definitions.

    Provides definitions for terms used in this Title, 
including ``participating jurisdictions''.

  TITLE V--ACCOUNTABILITY AND OVERSIGHT OF PUBLIC HOUSING AUTHORITIES

Subtitle A--Study of Alternative Methods for Evaluating Public Housing 
                                Agencies

                        section 501--In general

    States that the Secretary shall provide that a study be 
conducted regarding various alternative methods of evaluating 
the performance of PHAs.

                         section 502--purposes

    States that the purpose of the study is to identify 
ineffective or inefficient evaluation methods currently used by 
HUD and to identify and examine various methods of evaluating 
and improving the performance of PHAs as alternatives to HUD 
oversight.

   section 503--evaluation of various performance evaluation systems

    Lists several approaches and methods of evaluating PHA 
performance that the study must assess and for which it must 
provide conclusions. These include the current system of HUD 
monitoring, accreditation models, performance-based models, 
local review options, and the use of private contractors to 
conduct evaluations.

                       section 504--consultation

    The entity chosen to conduct the study shall consult with 
individuals and organizations knowledgeable about public 
housing, representatives of State and local governments, and 
others.

                 section 505--contract to conduct study

    Authorizes the Secretary to enter into a contract with a 
private entity capable of conducting this study, preferably the 
National Academy of Public Administration.

                          section 506--report

    An interim report to Congress is due six months after the 
date of enactment of this Act, and a final report is due twelve 
months after enactment.

                          section 507--funding

    Authorizes $500,000 for the study from funds appropriated 
for HUD's Office of Policy Development and Research.

                      section 508--effective date

    This subtitle takes effect upon date of enactment of the 
Act.

         Subtitle B--Housing Evaluation and Accreditation Board

                       section 521--establishment

    Establishes a Housing Evaluation and Accreditation Board 
(the ``Board''). The Board is without power to act until 
Congress repeals this section and provides the Board with 
specific powers. This section is intended to allow Congress 
time to review the evaluation study conducted pursuant to 
Sections 501-508 regarding accreditation models, while creating 
a duty to take future action regarding the already established 
Board--either abolishing it if appropriate or setting forth its 
powers.

                        section 522--membership

    Requires the President, not later than 180 days after 
enactment, to appoint 12 members to the Board: four individuals 
of 10 recommended by the Secretary; four individuals of 10 
recommended by the Chairman and Ranking Minority Member of the 
Committee on Banking, Housing, and Urban Affairs of the Senate; 
and four individuals of 10 recommended by the Chairman and 
Ranking Minority Member of the Committee on Banking and 
Financial Services of the House of Representatives.
    Requires the membership of the Board to include two members 
of Section 8 or public housing, two members who are executive 
directors of PHAs, one who is a member of the Institute of Real 
Estate Managers, and one member who is the owner of a 
multifamily housing project which receives assistance from HUD. 
Moreover, the Board shall at all times have members with 
extensive experience in the following areas: residential real 
estate finance; the operations of a nonprofit involved in 
providing affordable housing; construction of multifamily 
housing; and management of community development corporations. 
No more than six members of the Board may be of the same 
political party.
    Mandates that members will serve one four year term, that 
is staggered, with the original appointees receiving terms of 
one, two, three, or four years. Standard appointment, 
resignation, election of a chairperson, and other governing 
rules are stated. Provides only for expenses to be reimbursed.

                         section 523--functions

    Requires the Board to establish performance benchmarks for 
PHAs and to establish a procedure for the accreditation of 
PHAs.

                          section 524--powers

    Allows the Board to hold hearings when and where it deems 
appropriate. The Board may determine and adopt rules governing 
its operations. The Board shall have access to any information 
it needs from other federal government sources and any 
information from PHAs to the same extent as the Secretary. The 
Administrator of the General Services Administration shall 
provide necessary reimbursable support services. HUD shall 
provide, at the discretion of the Secretary, nonreimbursable 
personnel to the Board.
    Provides the Board with authority to contract for services 
with any entity. The staff of the Board shall include an 
executive director and other personnel.

                           section 525--fees

    The Board may charge PHAs reasonable accreditation fees for 
their accreditation, which funds are to be used to pay the 
costs of operation of the Board. The funds will be deposited in 
the U.S. Treasury and shall be available to the Board to the 
extent provided in appropriation Acts.

                         section 526--gao audit

    Activities of the Board are subject to audit by the General 
Accounting Office of the United States.

    Subtitle C--Interim Applicability of Public Housing Management 
                           Assessment Program

                   section 531--interim applicability

    The Public Housing Management Assessment Program (PHMAP) 
set forth in this subtitle C shall be effective until standards 
are issued by the Board pursuant to Section 523.

             section 532--management assessment indicators

    Requires the Secretary to publish in the Federal Register 
performance measurements or indicators to assess the management 
of PHAs. Included shall be indicators on vacancies, unexpended 
obligated funds, housing conditions, percentage of rent 
collections, energy consumption, and other such performance 
measures. Sets forth certain specific considerations to be 
taken into account by HUD in evaluating PHAs (such as the level 
of management difficulty of particular developments).

                   section 533--designation of pha's

    Requires designation of PHAs as: (a) troubled; (b) troubled 
only in terms of their capital or modernization programs; (c) 
agencies at risk of becoming troubled (``at-risk PHAs''), and 
(d) exemplary PHAs. Requires designation of troubled to any PHA 
that does not provide acceptable basic housing conditions. The 
Secretary shall establish appeal procedures for PHAs designated 
as troubled.

           section 534--on-site inspection of troubled pha's

    Upon designation of a PHA as troubled, an independent, on-
site assessment of the agency shall be conducted by a team of 
knowledgeable individuals chosen by the Secretary.

                      section 535--administration

    To be administered in substantially the same manner as the 
Public Housing Management Assessment Program established under 
Section 6(j) of the Housing Act of 1937, as in effect 
immediately before the passage of this Act.

   Subtitle D--Accountability and Oversight Standards and Procedures

                          section 541--audits

    Provides certain government auditing agencies with access 
to a PHA's books and records. Requires an annual audit of each 
PHA with over 250 units in its inventory. The Secretary may 
withhold funds if a PHA fails to comply with this requirement.

section 542--performance agreements for authorities at risk of becoming 
                                troubled

    Requires the Secretary, upon designation of a PHA as an 
``at-risk'' agency, to seek to enter into an agreement with the 
PHA providing for the improvement of the management of the 
agency.
    Authorizes the Secretary to prevent the PHA from falling 
into troubled status by soliciting competitive proposals from 
other PHAs or private management entities to take over 
management of certain functions or developments.

  Section 543--Performance agreements and CDBG sanctions for troubled 
                                  PHAs

    Requires the Secretary, upon designation of a PHA as 
troubled, to enter into a ``performance agreement'' with the 
PHA for improving the management of the agency. Such 
performance agreement shall contain specific performance 
targets to be achieved by the PHA. If after twelve months the 
PHA has failed to comply with the performance agreement, in the 
determination of the Secretary, then the Secretary shall take 
action under Section 545 governing removal of ineffective PHAs.
    Authorizes the Secretary to redirect or withhold CDBG funds 
for the geographical jurisdiction of the troubled PHA if the 
Secretary determines that the local government has 
substantially contributed to the PHA's status as troubled.

 Section 544--Option to demand conveyance of title to or possession of 
                             public housing

    Contracts under Title II may provide that, upon a 
substantial default by a PHA under the contract, the Secretary 
may obligate the PHA to convey title of any development, in any 
case necessary to achieve the purposes of this Act, or to 
deliver to the Secretary possession of the development to which 
such contract relates. If the contract permits the preceding 
action, it also shall provide that the Secretary shall be 
obligated to reconvey the asset to the PHA, or its successor-
in-interest, as soon as practicable after (1) the Secretary is 
satisfied that all defaults under the contract have been cured 
and (2) the PHA is able to operate in accordance with all 
provisions of the contract.

               Section 545--Removal of ineffective PHA's

    Authorizes the Secretary to (a) solicit proposals from 
other entities to manage all or part of the PHA's assets, (b) 
take possession of all or part of the PHA's assets, (c) require 
the PHA to make other arrangements to manage its assets, or (d) 
petition for the appointment of a receiver for the PHA. Any 
such action can be taken only upon a substantial default by the 
PHA under its contract, or under an agreement entered into 
pursuant to Section 543 of this Title, or submission to the 
Secretary of a petition by the residents. The Secretary may 
provide emergency assistance to a successor entity of a PHA.
    Authorizes the Secretary to abrogate contracts, demolish 
and dispose of assets pursuant to this Title, provide for the 
establishment of additional PHAs to manage the assets, or 
consolidate the assets into another consenting PHA's inventory. 
When a contract is abrogated, the determination and basis for 
determination shall be made public. The Secretary shall have 
the maximum amount of authority and scope of powers as 
available to a receiver appointed by a federal district court.

     Section 546--Mandatory takeover of chronically troubled PHA's

    Requires the Secretary to take-over each chronically 
troubled PHA not later than 180 days after the effective date 
of this Act. A ``chronically troubled public housing agency'' 
is defined as a PHA that has been classified as troubled for 
three years or more. The Secretary may either solicit proposals 
and take the necessary actions to replace management of the 
agency pursuant to section 535(b)(1), take possession of the 
agency pursuant to section 545(b)(2), or petition for 
appointment of a receiver for the agency pursuant to Section 
545(b)(5).

                Section 547--Treatment of troubled PHA's

    Requires the local government with jurisdiction over a 
troubled PHA to describe in its comprehensive housing 
affordability strategy or consolidated plan how it intends to 
assist the agency.

                  Section 548--Maintenance of records

    Requires each PHA to maintain appropriate records. The 
Secretary and the Comptroller General of the United States 
shall have access to such records.

          Section 549--Annual reports regarding troubled PHA's

    Requires the Secretary to submit a report to Congress that 
identifies PHAs that are troubled or at-risk of becoming 
troubled and any action taken pursuant to Sections 542, 543, 
544, and 545.

     Section 550--Applicability to resident management corporations

    Applies this subtitle's provisions to resident management 
corporations.

 Section 551--Advisory council for the Housing Authority of New Orleans

    Establishes an advisory council for the Housing Authority 
of New Orleans (HANO) composed of the Inspector General of HUD 
(or a designee) and not more than seven appointed members. 
Provides payment of expenses but not compensation for council 
members.
    The council shall provide advice, expertise and 
recommendations to HANO. In addition, the council shall 
establish standards and guidelines for assessing the 
performance of HANO in carrying out operational, asset 
management and financial functions for quarterly reports and a 
final findings report submitted to Congress and the Secretary 
after 18 months of enactment of this Act. The final finding 
report shall assess whether HANO should continue to operate as 
manager of public housing given the progress it has made in 
performance and overall conditions.

                TITLE VI--REPEALS AND RELATED AMENDMENTS

       Subtitle A--Repeals, Effective Date, and Savings Provision

Section 601--Effective date and repeal of United States Housing Act of 
                                  1937

    The effective date of the Act is the date which is six 
months after the date of enactment of the Act. This is done so 
that any unforeseen consequences arising from the repeal of the 
1937 Act may be addressed. In addition, the Secretary may, by 
notice to Congress, delay the effective date of any provision 
of this Act until a later date (no later than October 1, 1998) 
in order to avoid hardship or if necessary for program 
administration. A savings provision is included to govern prior 
obligations made under the provisions of the 1937 Act. Excludes 
Section 8 project-based assistance from the provisions of this 
Act. Eliminates the requirement that owners grant one year 
notice to tenants prior to termination of a Section 8 contract.

                       Section 602--Other repeals

    Repeals specific provisions of various housing legislation 
(i.e. Public Housing One-Stop Perinatal Services Demonstration, 
Public Housing Energy Efficiency Demonstration, etc.).

  Subtitle B--Other Provisions Relating to Public Housing and Rental 
                          Assistance Programs

           Section 621--Allocation of elderly housing amounts

    Amends Section 202(l) of the Housing Act of 1959, to 
require that funds available under such section shall be 
allocated so that the awards go to projects of sufficient size 
to accommodate facilities for supportive services for the frail 
elderly.

                       Section 622--Pet ownership

    Provides that a resident of a federally-assisted dwelling 
unit may own common household pets, subject to reasonable 
requirements of the owner of the facility. Provides that a PHA 
may not exempt any resident from paying any deposit required in 
connection with the resident's ownership of a pet. This section 
applies to public housing, Section 8 project-based housing 
under the 1937 Act, elderly housing under Section 202 of the 
Housing Act of 1959, and certain other housing programs. The 
Secretary shall issue regulations to carry out this section 
within one year of enactment.

       Section 623--Review of drug elimination program contracts

    The Secretary is to review all security contracts awarded 
under the Public Housing and Assisted Housing Drug Elimination 
Act of 1990 to determine whether the contractors under such 
contracts have complied with federal anti-discrimination laws 
and other requirements.

Section 624--Amendments to Public and Assisted Housing Drug Elimination 
                              Act of 1990

    Amends certain provisions of the Anti-Drug Abuse Act of 
1988, and inserts a new chapter entitled the ``Community 
Partnerships Against Crime Act of 1997,'' which broadens the 
scope of the Public Housing Drug Elimination Act of 1990 to 
apply to all types of crime, and not simply drug-related 
crimes. The Secretary may make grants for use in eliminating 
crime in and around public housing and other federally assisted 
low-income housing projects.
    Requires that the Secretary provide a grant for each PHA 
with over 250 units that applies, as long as in the 
application, the PHA demonstrates that it has need of the grant 
amounts based on crime statistics showing (I) the crime rate in 
or around the public housing development is higher than for the 
jurisdiction in which the agency operates, (II) the crime rate 
for the development is increasing over a period to indicate a 
general trend, and (III) the operation of the program under 
this chapter contributes to the reduction in crime.
    A five-year crime deterrence and reduction plan must be 
included with each grant application. The amount of the grant 
shall be a pro rata amount of the funds appropriated, to be 
determined based on the number of units of the PHA as compared 
to the total number of units of all PHAs over 250 units which 
apply for the grants. PHAs with less than 250 units and owners 
of federally-assisted low-income housing are subject to 
different requirements.
    An authorization of $290 million is provided for each of 
fiscal years 1998 through 2002, to be used as follows: 85 
percent for PHAs with 250 units or more; 10 percent for PHAs 
with less than 250 units; and 5 percent for owners of 
federally-assisted housing. Requires proceeds of forfeiture 
that are transferred to the Office of the IG of HUD to be 
credited to Operation Safe Home activities.

  Subtitle C--Limitations Relating to Occupancy in Federally Assisted 
                                Housing

                  Section 641--Screening of applicants

    Provides that a family is ineligible for federally-assisted 
housing for three years if evicted by reason of drug-related 
criminal activity or for a reasonable time (as may be 
determined by the PHA) for other criminal activity. A PHA or 
owner of federally-assisted housing shall establish standards 
prohibiting admission of persons or families who the PHA 
reasonably determines to be using an illegal substance or whose 
use of illegal substances or alcohol would interfere with the 
health, safety, or right to peaceful enjoyment of the premises 
by other residents.
    A PHA or owner of federally-assisted housing may deny 
admission to any applicant household that, during a reasonable 
period prior to applying for housing assistance, had engaged in 
any criminal activity. A PHA or federally-assisted housing 
owner may require that an applicant household prior to 
admission authorize the PHA to obtain any relevant criminal 
records from the National Crime Information Center, police 
departments, and other law enforcement agencies.
    For purposes of determining eligibility for housing 
assistance, a person shall not be considered to have a 
disability or handicap solely because of the prior or current 
use of an illegal substance or alcohol.

  Section 642--Termination of tenancy and assistance for illegal drug 
                       users and alcohol abusers

    Requires a PHA or owner of federally-assisted housing to 
establish safeguards and lease provisions allowing termination 
of assistance to residents who the PHA or owner determines to 
be engaging in the use of a controlled substance or whose 
illegal use of a controlled substance interferes with the 
health, safety, or right to peaceful enjoyment of the premises 
by other residents.

                    Section 643--Lease requirements

    Provides that leases shall contain provisions setting forth 
grounds for termination that include criminal activity and 
activity which threaten the health and safety of other 
residents.

Section 644--Availability of criminal records for tenant screening and 
                                eviction

    Provides that the National Crime Information Center, police 
departments, state law enforcement agencies designated as 
registration agencies under a state registration program, or 
other law enforcement agencies shall provide to the PHA upon 
its request information regarding the criminal background of an 
adult applicant for housing assistance. An applicant must be 
given an opportunity to dispute any such information. PHAs may 
be charged a reasonable fee for provision of the information.

                        Section 645--Definitions

    Sets forth definitions of certain terms used in this 
subtitle.

       TITLE VII--AFFORDABLE HOUSING AND MISCELLANEOUS PROVISIONS

                 Section 701--Rural housing assistance

    Designates the city of Altus, Oklahoma as a rural area 
until receipt of data from the decennial census in the year 
2000.

             Section 702--Treatment of occupancy standards

    Prohibits HUD from establishing, directly or indirectly, a 
national occupancy standard.

                  Section 703--Implementation of plan

    Orders the Secretary to implement the Ida Barbour 
Revitalization Plan of the City of Portsmouth, Virginia, within 
120 days after the date of enactment of this Act.

       Section 704--Income eligibility for HOME and CDBG programs

    Amends the National Affordable Housing Act to prevent HUD 
from lowering income eligibility levels for individual 
communities.

     Section 705--Prohibition of use of CDBG grants for employment 
                         relocation activities

    Amends Section 105 of the Housing and Community Development 
Act to prevent a locality from using CDBG funds to facilitate 
relocation of a business to that locality from another 
community.

                 Section 706--Use of American products

    States a sense of the Congress that all equipment and 
products purchased with funds made available under this Act be 
American made.

    Section 707--Consultation with affected areas in settlement of 
                               litigation

    Requires HUD to consult with the unit of local government 
before entering into a settlement agreement regarding public 
housing or rental assistance within the jurisdiction of that 
unit of local government.

             Section 708--Use of assisted housing by aliens

    Makes certain technical drafting corrections to the Illegal 
Immigration Reform and Immigrant Responsibility Act of 1996 
(the Immigration Reform Act). The corrections are necessary to 
prevent a PHA from having the option not to enforce the 
provisions of the Immigration Reform Act contrary to the intent 
of Congress.

                      Section 709--Effective date

    The effective date of this Title is upon enactment of the 
Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 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 italics, existing law in which no change is proposed 
is shown in roman):

       SECTION 3 OF THE HOUSING AND URBAN DEVELOPMENT ACT OF 1968

SEC. 3. ECONOMIC OPPORTUNITIES FOR LOW- AND VERY LOW-INCOME PERSONS.

  (a) Findings.--The Congress finds that--
          * * * * * * *
  (c) Employment.--
          (1) Public and indian housing program.--
                  (A) In general.--The Secretary shall require 
                that [public and Indian housing agencies] 
                public housing agencies and recipients of 
                grants under the Native American Housing 
                Assistance and Self-Determination Act of 1996, 
                and their contractors and subcontractors, make 
                their best efforts, consistent with existing 
                Federal, State, and local laws and regulations, 
                to give to low- and very low-income persons the 
                training and employment opportunities generated 
                by [development assistance provided pursuant to 
                section 5 of the United States Housing Act of 
                1937, operating assistance provided pursuant to 
                section 9 of that Act, and modernization grants 
                provided pursuant to section 14 of that Act.] 
                assistance provided under title II of the 
                Housing Opportunity and Responsibility Act of 
                1997 and used for the housing production, 
                operation, or capital needs.
                  (B) Priority.--The efforts required under 
                subparagraph (A) shall be directed in the 
                following order of priority:
                          (i) * * *
                          (ii) To residents of other 
                        developments [managed by the public or 
                        Indian housing agency] assisted by the 
                        public housing agency or the recipient 
                        of a grant under the Native American 
                        Housing Assistance and Self-
                        Determination Act of 1996 that is 
                        expending the assistance.
          * * * * * * *
  (d) Contracting.--
          (1) Public and indian housing program.--
                  (A) In general.--The Secretary shall require 
                that [public and Indian housing agencies] 
                public housing agencies and recipients of 
                grants under the Native American Housing 
                Assistance and Self-Determination Act of 1996, 
                and their contractors and subcontractors, make 
                their best efforts, consistent with existing 
                Federal, State, and local laws and regulations, 
                to award contracts for work to be performed in 
                connection with [development assistance 
                provided pursuant to section 5 of the United 
                States Housing Act of 1937, operating 
                assistance provided pursuant to section 9 of 
                that Act, and modernization grants provided 
                pursuant to section 14 of that Act] assistance 
                provided under title II of the Housing 
                Opportunity and Responsibility Act of 1997 and 
                used for the housing production, operation, or 
                capital needs, to business concerns that 
                provide economic opportunities for low- and 
                very low-income persons.
                  (B) Priority.--The efforts required under 
                subparagraph (A) shall be directed in the 
                following order of priority:
                          (i) * * *
                          (ii) To business concerns that 
                        provide economic opportunities for 
                        residents of other housing developments 
                        [operated by the public and Indian 
                        housing agency] assisted by the public 
                        housing agency or the recipient of a 
                        grant under the Native American Housing 
                        Assistance and Self-Determination Act 
                        of 1996 that is providing the 
                        assistance.
          * * * * * * *
                              ----------                              

                   UNITED STATES HOUSING ACT OF 1937

             [TITLE I--GENERAL PROGRAM OF ASSISTED HOUSING

                              [short title

  [Section 1. This Act may be cited as the ``United States 
Housing Act of 1937''.

                         [declaration of policy

  [Sec. 2. It is the policy of the United States to promote the 
general welfare of the Nation by employing its funds and 
credit, as provided in this Act, to assist the several States 
and their political subdivisions to remedy the unsafe and 
unsanitary housing conditions and the acute shortage of decent, 
safe, and sanitary dwellings for families of lower income and, 
consistent with the objectives of this Act, to vest in local 
public housing agencies the maximum amount of responsibility in 
the administration of their housing programs. No person should 
be barred from serving on the board of directors or similar 
governing body of a local public housing agency because of his 
tenancy in a low-income housing project.

                     [rental payments; definitions

  [Sec. 3. (a)(1) Dwelling units assisted under this Act shall 
be rented only to families who are low-income families at the 
time of their initial occupancy of such units. Reviews of 
family income shall be made at least annually. Except as 
provided in paragraph(2), a family shall pay as rent for a 
dwelling unit assisted under this Act (other than a family assisted 
under section 8(o) or (y) or paying rent under section 8(c)(3)(B)) the 
highest of the following amounts, rounded to the nearest dollar:
          [(A) 30 per centum of the family's monthly adjusted 
        income;
          [(B) 10 per centum of the family's monthly income; or
          [(C) if the family is receiving payments for welfare 
        assistance from a public agency and a part of such 
        payments, adjusted in accordance with the family's 
        actual housing costs, is specifically designated by 
        such agency to meet the family's housing costs, the 
        portion of such payments which is so designated.
          [(2) Notwithstanding paragraph (1), a public housing 
        agency may--
                  [(A) adopt ceiling rents that reflect the 
                reasonable market value of the housing, but 
                that are not less than the monthly costs--
                          [(i) to operate the housing of the 
                        agency; and
                          [(ii) to make a deposit to a 
                        replacement reserve (in the sole 
                        discretion of the public housing 
                        agency); and
                  [(B) allow families to pay ceiling rents 
                referred to in subparagraph (A), unless, with 
                respect to any family, the ceiling rent 
                established under this paragraph would exceed 
                the amount payable as rent by that family under 
                paragraph (1).
  [(b) When used in this Act:
  [(1) The term ``low-income housing'' means decent, safe, and 
sanitary dwellings assisted under this Act. The term ``public 
housing'' means low-income housing, and all necessary 
appurtenances thereto, assisted under this Act other than under 
section 8. When used in reference to public housing, the term 
``low-income housing project'' or ``project'' means (A) housing 
developed, acquired, or assisted by a public housing agency 
under this Act, and (B) the improvement of any such housing.
  [(2) The term ``low-income families'' means those families 
whose incomes do not exceed 80 per centum of the median income 
for the area, as determined by the Secretary with adjustments 
for smaller and larger families, except that the Secretary may 
establish income ceilings higher or lower than 80 per centum of 
the median for the area on the basis of the Secretary's 
findings that such variations are necessary because of 
prevailing levels of construction costs or unusually high or 
low family incomes. The term ``very low-income families'' means 
low-income families whose incomes do not exceed 50 per centum 
of the median family income for the area, as determined by the 
Secretary with adjustments for smaller and larger families, 
except that the Secretary may establish income ceilings higher 
or lower than 50 per centum of the median for the area on the 
basis of the Secretary's findings that such variations are 
necessary because of unusually high or low family incomes. Such 
ceilings shall be established in consultation with the 
Secretary of Agriculture for any rural area, as defined in 
section 520 of the Housing Act of 1949, taking into account the 
subsidy characteristics and types of programs to which such 
ceilings apply. In determining median incomes (of persons, 
families, or households) for an area or establishing any 
ceilings or limits based on income under this Act, the 
Secretary shall determine or establish area median incomes and 
income ceilings and limits for Westchester County, in the State 
of New York, as if such county were an area not contained 
within the metropolitan statistical area in which it is 
located. In determining such area median incomes or 
establishing such income ceilings or limits for the portion of 
such metropolitan statistical area that does not include 
Westchester County, the Secretary shall determine or establish 
area median incomes and income ceilings and limits as if such 
portion included Westchester County.
  [(3) Persons and families.--
          [(A) Single persons.--The term ``families'' includes 
        families consisting of a single person in the case of 
        (i) an elderly person, (ii) a disabled person, (iii) a 
        displaced person, (iv) the remaining member of a tenant 
        family, and (v) any other single persons. In no event 
        may any single person under clause (v) of the first 
        sentence be provided a housing unit assisted under this 
        Act of 2 or more bedrooms. In determining priority for 
        admission to housing under this Act, the Secretary 
        shall give preference to single persons who are 
        elderly, disabled, or displaced persons before single 
        persons who are eligible under clause (v) of the first 
        sentence.
          [(B) Families.--The term ``families'' includes 
        families with children and, in the cases of elderly 
        families, near-elderly families, and disabled families, 
        means families whose heads (or their spouses), or whose 
        sole members, are elderly, near-elderly, or persons 
        with disabilities, respectively. The term includes, in 
        the cases of elderly families, near-elderly families, 
        and disabled families, 2 or more elderly persons, near-
        elderly persons, or persons with disabilities living 
        together, and 1 or more such persons living with 1 or 
        more persons determined under the regulations of the 
        Secretary to be essential to their care or well-being.
          [(C) Absence of children.--The temporary absence of a 
        child from the home due to placement in foster care 
        shall not be considered in determining family 
        composition and family size.
          [(D) Elderly person.--The term ``elderly person'' 
        means a person who is at least 62 years of age.
          [(E) Person with disabilities.--The term ``person 
        with disabilities'' means a person who--
                  [(i) has a disability as defined in section 
                223 of the Social Security Act,
                  [(ii) is determined, pursuant to regulations 
                issued by the Secretary, to have a physical, 
                mental, or emotional impairment which (I) is 
                expected to be of long-continued and indefinite 
                duration, (II) substantially impedes his or her 
                ability to live independently, and (III) is of 
                such a nature that such ability could be 
                improved by more suitable housing conditions, 
                or
                  [(iii) has a developmental disability as 
                defined in section 102 of the Developmental 
                Disabilities Assistance and Bill of Rights Act.
        Such term shall not exclude persons who have the 
        disease of acquired immunodeficiency syndrome or any 
        conditions arising from the etiologic agent for 
        acquired immunodeficiency syndrome.
          [(F) Displaced person.--The term ``displaced person'' 
        means a person displaced by governmental action, or a 
        person whose dwelling has been extensively damaged or 
        destroyed as a result of a disaster declared or 
        otherwise formally recognized pursuant to Federal 
        disaster relief laws.
          [(G) Near-elderly person.--The term ``near-elderly 
        person'' means a person who is at least 50 years of age 
        but below the age of 62.
  [(4) The term ``income'' means income from all sources of 
each member of the household, as determined in accordance with 
criteria prescribed by the Secretary, in consultation with the 
Secretary of Agriculture, except that any amounts not actually 
received by the family and any amounts which would be eligible 
for exclusion under section 1613(a)(7) of the Social Security 
Act (42 U.S.C. 1382b(a)(7)) may not be considered as income 
under this paragraph.
  [(5) The term ``adjusted income'' means the income which 
remains after excluding--
                  [(A) $550 for each member of the family 
                residing in the household (other than the head 
                of the household or his spouse) who is under 18 
                years or age or who is 18 years of age or older 
                and is disabled or handicapped or a full-time 
                student;
                  [(B) $400 for any elderly or disabled family;
                  [(C) the amount by which the aggregate of the 
                following expenses of the family exceeds 3 
                percent of annual family income: (i) medical 
                expenses for any family; and (ii) reasonable 
                attendant care and auxiliary apparatus expenses 
                for each handicapped member of any family, to 
                the extent necessary to enable any member of 
                such family (including such handicapped member) 
                to be employed;
                  [(D) child care expenses to the extent 
                necessary to enable another member of the 
                family to be employed or to further his or her 
                education;
                  [(E) 10 percent of the earned income of the 
                family;
                  [(F) any payment made by a member of the 
                family for the support and maintenance of any 
                child, spouse, or former spouse who does not 
                reside in the household, except that the amount 
                excluded under this subparagraph shall not 
                exceed the lesser of (i) the amount that such 
                family member has a legal obligation to pay; or 
                (ii) $550 for each individual for whom such 
                payment is made;
                  [(G) excessive travel expenses, not to exceed 
                $25 per family per week, for employment- or 
                education-related travel, except that this 
                subparagraph shall apply only to families 
                assisted by Indian housing authorities.
                  [(H) for public housing, any other 
                adjustments to earned income established by the 
                public housing agency. If a public housing 
                agency adopts other adjustments to income 
                pursuant to subparagraph (H), the Secretary 
                shall not take into account any reduction of or 
                increase in the public housing agency's per 
                unit dwelling rental income resulting from 
                those adjustments when calculating the 
                contributions under section 9 for the public 
                housing agency for the operation of the public 
                housing.
  [(6) The term ``public housing agency'' means any State, 
county, municipality, or other governmental entity or public 
body (or agency or instrumentality thereof) which is authorized 
to engage in or assist in the development or operation of low-
income housing. The term includes any Indian housing authority.
  [(7) The term ``State'' includes the several States, the 
District of Columbia, the Commonwealth of Puerto Rico, the 
territories and possessions of the United States, the Trust 
Territory of the Pacific Islands, and Indian tribes.
  [(8) The term ``Secretary'' means the Secretary of Housing 
and Urban Development.
  [(9) The term ``Indian'' means any person recognized as being 
an Indian or Alaska Native by an Indian tribe, the Federal 
Government, or any State.
  [(10) The term ``Indian area'' means the area within which an 
Indian housing authority is authorized to provide low-income 
housing.
  [(11) The term ``Indian housing authority'' means any entity 
that--
          [(A) is authorized to engage in or assist in the 
        development or operation of low-income housing for 
        Indians; and
          [(B) is established--
                  [(i) by exercise of the power of self-
                government of an Indian tribe independent of 
                State law; or
                  [(ii) by operation of State law providing 
                specifically for housing authorities for 
                Indians, including regional housing authorities 
                in the State of Alaska.
  [(12) The term ``Indian tribe'' means any tribe, band, 
pueblo, group, community, or nation of Indians or Alaska 
Natives.
  [(c) When used in reference to public housing:
  [(1) The term ``development'' means any or all undertakings 
necessary for planning, land acquisition, demolition, 
construction, or equipment, in connection with a low-income 
housing project. The term ``development cost'' comprises the 
costs incurred by a public housing agency in such undertakings 
and their necessary financing (including the payment of 
carrying charges), and in otherwise carrying out the 
development of such project. Construction activity in 
connection with a low-income housing project may be confined to 
the reconstruction, remodeling, or repair of existing 
buildings.
  [(2) The term ``operation'' means any or all undertakings 
appropriate for management, operation, services, maintenance, 
security (including the cost of security personnel), or 
financing in connection with a low-income housing project. The 
term also means the financing of tenant programs and services 
for families residing in low-income housing projects, 
particularly where there is maximum feasible participation of 
the tenants in the development and operation of such tenant 
programs and services. As used in this paragraph, the term 
``tenant programs and services'' includes the development and 
maintenance of tenant organizations which participate in the 
management of low-income housing projects; the training of 
tenants to manage and operate such projects and the utilization 
of their services in project management and operation; 
counseling on household management, housekeeping, budgeting, 
money management, child care, and similar matters; advice as to 
resources for job training and placement, education, welfare, 
health, and other community services; services which are 
directly related to meeting tenant needs and providing a 
wholesome living environment; and referral to appropriate 
agencies in the community when necessary for the provision of 
such services. To the maximum extent available and appropriate, 
existing public and private agencies in the community shall be 
used for the provision of such services.
  [(3) The term ``acquisition cost'' means the amount prudently 
required to be expended by a public housing agency in acquiring 
property for a low-income housing project.
  [The earnings of and benefits to any public housing resident 
resulting from participation in a program providing employment 
training and supportive services in accordance with the Family 
Support Act of 1988, section 22 of this Act, or any comparable 
Federal, State, or local law shall not be considered as income 
for the purposes of determining a limitation on the amount of 
rent paid by the resident during--
          [(1) the period that the resident participates in 
        such program; and
          [(2) the period that--
                  [(A) begins with the commencement of 
                employment of the resident in the first job 
                acquired by the person after completion of such 
                program that is not funded by assistance under 
                this Act; and
                  [(B) ends on the earlier of--
                          [(i) the date the resident ceases to 
                        continue employment without good cause 
                        as the Secretary shall determine; or
                          [(ii) the expiration of the 18-month 
                        period beginning on the date referred 
                        to in subparagraph (A).

                [loans for lower income housing projects

  [Sec. 4. (a) The Secretary may make loans or commitments to 
make loans to public housing agencies to help finance or 
refinance the development, acquisition, or operation of low-
income housing projects by such agencies. Any contract for such 
loans and any amendment to a contract for such loans shall 
provide that such loans shall bear interest at a rate specified 
by the Secretary which shall not be less than a rate determined 
by the Secretary of the Treasury taking into consideration the 
current average market yield on outstanding marketable 
obligations of the United States with remaining periods to 
maturity comparable to the average maturities of such loans, 
plus one-eighth of 1 per centum. Such loans shall be secured in 
such manner and shall be repaid within suchperiod not exceeding 
forty years, or not exceeding forty years from the date of the bonds 
evidencing the loan, as the Secretary may determine. The Secretary may 
require loans or commitments to make loans under this section to be 
pledged as security for obligations issued by a public housing agency 
in connection with a low-income housing project.
  [(b) The Secretary may issue and have outstanding at any one 
time notes and other obligations for purchase by the Secretary 
of the Treasury in an amount which will not, unless authorized 
by the President, exceed $1,500,000,000. For the purpose of 
determining obligations incurred to make loans pursuant to this 
Act against any limitation otherwise applicable with respect to 
such loans, the Secretary shall estimate the maximum amount to 
be loaned at any one time pursuant to loan agreements then 
outstanding with public housing agencies. Such notes or other 
obligations shall be in such forms and denominations and shall 
be subject to such terms and conditions as may be prescribed by 
the Secretary with the approval of the Secretary of the 
Treasury. The notes or other obligations issued under this 
subsection shall have such maturities and bear such rate or 
rates of interest as shall be determined by the Secretary of 
the Treasury. The Secretary of the Treasury is authorized and 
directed to purchase any notes or other obligations of the 
Secretary issued hereunder and for such purpose is authorized 
to use as a public debt transaction the proceeds from the sale 
of any securities issued under chapter 31 of title 31, United 
States Code, and the purposes for which securities may be 
issued under such chapter are extended to include any purchases 
of such obligations. The Secretary of the Treasury may at any 
time sell any of the notes or other obligations acquired by him 
under this section. All redemptions, purchases, and sales by 
the Secretary of the Treasury of such notes or other 
obligations shall be treated as public debt transactions of the 
United States.
  [(c)(1) At such times as the Secretary may determine, and in 
accordance with such accounting and other procedures as the 
Secretary may prescribe, each loan made by the Secretary under 
subsection (a) that has any principal amount outstanding or any 
interest amount outstanding or accrued shall be forgiven; and 
the terms and conditions of any contract, or any amendment to a 
contract, for such loan with respect to any promise to repay 
such principal and interest shall be canceled. Such 
cancellation shall not affect any other terms and conditions of 
such contract, which shall remain in effect as if the 
cancellation had not occurred. This paragraph shall not apply 
to any loan the repayment of which was not to be made using 
annual contributions, or to any loan all or part of the 
proceeds of which are due a public housing agency from 
contractors or others.
  [(2)(A) On the date of the enactment of the Housing and 
Community Development Reconciliation Amendments of 1985, each 
note or other obligation issued by the Secretary to the 
Secretary of the Treasury pursuant to subsection (b), together 
with any promise to repay the principal and unpaid interest 
that has accrued on each note or obligation, shall be forgiven; 
and any other term or condition specified by each such 
obligation shall be canceled.
  [(B) On September 30, 1986, and on any subsequent September 
30, each such note or other obligation issued by the Secretary 
to the Secretary of the Treasury pursuant to subsection (b) 
during the fiscal year ending on such date, together with any 
promise to repay the principal and unpaid interest that has 
accrued on each note or obligation, shall be forgiven; and any 
other term or condition specified by each such obligation shall 
be canceled.
  [(3) Any amount of budget authority (and contract authority) 
that becomes available during any fiscal year as a result of 
the forgiveness of any loan, note, or obligation under this 
subsection shall be rescinded.

            [contributions for lower income housing projects

  [Sec. 5. (a)(1) The Secretary may make annual contributions 
to public housing agencies to assist in achieving and 
maintaining the lower income character of their projects. The 
Secretary shall embody the provisions for such annual 
contributions in a contract guaranteeing their payment. The 
contribution payable annually under this section shall in no 
case exceed a sum equal to the annual amount of principal and 
interest payable on obligations issued by the public housing 
agency to finance the development or acquisition cost of the 
lower income project involved. Annual contributions payable 
under this section shall be pledged, if the Secretary so 
requires, as security for obligations issued by a public 
housing agency to assist the development or acquisition of the 
project to which annual contributions relate and shall be paid 
over a period not to exceed 40 years.
  [(2) The Secretary may make contributions (in the form of 
grants) to public housing agencies to cover the development 
cost of public housing projects. The contract under which such 
contributions shall be made shall specify the amount of capital 
contributions required for each project to which the contract 
pertains, and that the terms and conditions of such contract 
shall remain in effect for a 40-year period.
  [(3) The amount of contributions that would be established 
for a newly constructed project by a public housing agency 
designed to accommodate a number of families of a given size 
and kind may be established under this section for a project by 
such public housing agency that would provide housing for the 
comparable number, sizes, and kinds of families through the 
acquisition and rehabilitation, or use under lease, of 
structures that are suitable for low-income housing use and 
obtained in the local market.
  [(b) The Secretary may prescribe regulations fixing the 
maximum contributions available under different circumstances, 
giving consideration to cost, location, size, rent-paying 
ability of prospective tenants, or other factors bearing upon 
the amounts and periods of assistance needed to achieve and 
maintain low rentals. Such regulations may provide for rates of 
contribution based upon development, acquisition, or operation 
costs, number of dwelling units, number of persons housed, 
interest charges, or other appropriate factors.
  [(c)(1) The Secretary may enter into contracts for annual 
contributions aggregating not more than $7,875,049,000 per 
annum, which amount shall be increased by $1,494,400,000 on 
October 1, 1980, and by $906,985,000 on October 1, 1981. The 
additional authority to enter into such contracts provided on 
or after October 1, 1980, shall be effective only in such 
amounts as may be approved in appropriation Acts. In addition, 
the aggregate amount which may be obligated over the duration 
of the contracts may not exceed $31,200,000 with respect to the 
additional authority provided on October 1, 1980, and 
$18,087,370,000 with respect to the additional authority 
provided on October 1, 1981.
  [(2) The Secretary shall enter into only such new contracts 
for preliminary loans as are consistent with the number of 
dwelling units for which contracts for annual contributions may 
be entered into.
  [(3) The full faith and credit of the United States is 
solemnly pledged to the payment of all annual contributions 
contracted for pursuant to this section, and there are hereby 
authorized to be appropriated in each fiscal year, out of any 
money in the Treasury not otherwise appropriated, the amounts 
necessary to provide for such payments.
  [(4) All payments of annual contributions pursuant to this 
section shall be made out of any funds available for purposes 
of this Act when such payments are due, except that funds 
obtained through the issuance of obligations pursuant to 
section 4(b) (including repayments or other realizations of the 
principal of loans made out of such funds) shall not be 
available for the payment of such annual contributions.
  [(5) During such period as the Secretary may prescribe for 
starting construction, the Secretary may approve the conversion 
of public housing development authority for use under section 
14 or for use for the acquisition and rehabilitation of 
property to be used in public housing, if the public housing 
agency, after consultation with the unit of local government, 
certifies that such assistance would be more effectively used 
for such purpose, and if the total number of units assisted 
will not be less than 90 per centum of the units covered by the 
original reservation.
  [(6) The aggregate amount of budget authority which may be 
obligated for contracts for annual contributions and for grants 
under section 17 is increased by $9,912,928,000 on October 1, 
1983, and by such sums as may be approved in appropriation Acts 
on October 1, 1984. The aggregate amount of budget authority 
that may be obligated for contracts for annual contributions 
for assistance under section 8, for contracts referred to in 
paragraphs (7)(A)(iv) and (7)(B)(iv), for grants for public 
housing, for comprehensive improvement assistance, and for 
amendments to existing contracts, is increased (to the extent 
approved in appropriation Acts) by $7,167,000,000 on October 1, 
1987, and by $7,300,945,000 on October 1, 1988. The aggregate 
amount of budget authority that may be obligated for assistance 
referred to in paragraph (7) is increased (to the extent 
approved in appropriation Acts) by $16,194,000,000 on October 
1, 1990, and by $14,709,400,000 on October 1, 1991. The 
aggregate amount of budget authority that may be obligated for 
assistance referred to in paragraph (7) is increased (to the 
extent approved in appropriation Acts) by $14,710,990,520 on 
October 1, 1992, and by $15,328,852,122 on October 1993.
  [(7)(A) Using the additional budget authority provided under 
paragraph (6) and the balances of budget authority that become 
available during fiscal year 1993, the Secretary shall, to the 
extent approved in appropriation Acts, reserve authority to 
enter into obligations aggregating--
          [(i) for public housing grants under subsection 
        (a)(2), not more than $830,900,800, of which amount not 
        more than $257,320,000 shall be available for Indian 
        housing;
          [(ii) for assistance under section 8, not more than 
        $1,977,662,720, of which $20,000,000 shall be available 
        for 15-year contracts for project-based assistance to 
        be used for a multicultural tenant empowerment and 
        homeownership project located in the District of 
        Columbia, except that assistance provided for such 
        project shall not be considered for purposes of the 
        percentage limitations under section 8(i)(2); except 
        that not more than 49 percent of any amounts 
        appropriated under this clause may be used for vouchers 
        under section 8(o);
          [(iii) for comprehensive improvement assistance 
        grants under section 14(k), not more than 
        $3,100,000,000;
          [(iv) for assistance under section 8 for property 
        disposition, not more than $93,032,000;
          [(v) for assistance under section 8 for loan 
        management, not more than $202,000,000;
          [(vi) for extensions of contracts expiring under 
        section 8, not more than $6,746,135,000, which shall be 
        for 5-year contracts for assistance under section 8 and 
        for loan management assistance under such section;
          [(vii) for amendments to contracts under section 8, 
        not more than $1,350,000,000;
          [(viii) for public housing lease adjustments and 
        amendments, not more than $83,055,000;
          [(ix) for conversions from leased housing contracts 
        under section 23 of this Act (as in effect immediately 
        before the enactment of the Housing and Community 
        Development Act of 1974) to assistance under section 8, 
        not more than $12,767,000; and
          [(x) for grants under section 24 for revitalization 
        of severely distressed public housing, not more than 
        $300,000,000.
  [(B) Using the additional budget authority provided under 
paragraph (6) and the balances of budget authority that become 
available during fiscal year 1994, the Secretary shall, to the 
extent approved in appropriation Acts, reserve authority to 
enter into obligations aggregating--
          [(i) for public housing grants under subsection 
        (a)(2), not more than $865,798,634, of which amount not 
        more than $268,127,440 shall be available for Indian 
        housing;
          [(ii) for assistance under section 8, not more than 
        $2,060,724,554, of which $20,000,000 shall be available 
        for 15-year contracts for project-based assistance to 
        be used for a multicultural tenant empowerment and 
        homeownership project located in the District of 
        Columbia, except that assistance provided for such 
        project shall not be considered for purposes of the 
        percentage limitations under section 8(i)(2); except 
        that not more than 49 percent of any amounts 
        appropriated under this clause may be used for vouchers 
        under section 8(o);
          [(iii) for comprehensive improvement assistance 
        grants under section 14(k), not more than 
        $3,230,200,000;
          [(iv) for assistance under section 8 for property 
        disposition, not more than $96,939,344;
          [(v) for assistance under section 8 for loan 
        management, not more than $210,484,000;
          [(vi) for extensions of contracts expiring under 
        section 8, not more than $7,029,472,670, which shall be 
        for 5-year contracts for assistance under section 8 and 
        for loan management assistance under such section;
          [(vii) for amendments to contracts under section 8, 
        not more than $1,406,700,000;
          [(viii) for public housing lease adjustments and 
        amendments, not more than $86,543,310;
          [(ix) for conversions from leased housing contracts 
        under section 23 of this Act (as in effect immediately 
        before the enactment of the Housing and Community 
        Development Act of 1974) to assistance under section 8, 
        not more than $13,303,214; and
          [(x) for grants under section 24 for revitalization 
        of severely distressed public housing, not more than 
        $312,600,000.
  [(C)(i) Any amount available for the conversion of a project 
to assistance under section 8(b)(1), if not required for such 
purpose, shall be used for assistance under section 8(b)(1).
  [(ii) Any amount available for assistance under section 8 for 
property disposition, if not required for such purpose, shall 
be used for assistance under section 8(b)(1).
  [(8) Any amount available for Indian housing under subsection 
(a) that is recaptured shall be used only for such housing.
  [(d) Any contract for loans or annual contributions, or both, 
entered into by the Secretary with a public housing agency, may 
cover one or more than one low-income housing project owned by 
such public housing agency; in the event the contract covers 
two or more projects, such projects may, for any of the 
purposes of this Act and of such contract (including, but not 
limited to, the determination of the amount of the loan, annual 
contributions, or payments in lieu of taxes, specified in such 
contract), be treated collectively as one project.
  [(e) In recognition that there should be local determination 
of the need for low-income housing to meet needs not being 
adequately met by private enterprise--
          [(1) the Secretary shall not make any contract with a 
        public housing agency for preliminary loans (all of 
        which shall be repaid out of any moneys which become 
        available to such agency for the development of the 
        projects involved) for surveys and planning in respect 
        to any low-income housing projects (i) unless the 
        governing body of the locality involved has by 
        resolution approved the application of the public 
        housing agency for such preliminary loan; and (ii) 
        unless the public housing agency has demonstrated to 
        the satisfaction of the Secretary that there is need 
        for such low-income housing which is not being met by 
        private enterprise; and
          [(2) the Secretary shall not make any contract for 
        loans (other than preliminary loans) or for 
        contributions pursuant to this Act unless the governing 
        body of the locality involved has entered into an 
        agreement with the public housing agency providing for 
        the local cooperation required by the Secretary 
        pursuant to this Act.
  [(f) Subject to the specific limitations or standards in this 
Act governing the terms of sales, rentals, leases, loans, 
contracts for annual contributions, or other agreements, the 
Secretary may, whenever he deems it necessary or desirable in 
the fulfillment of the purposes of this Act, consent to the 
modification, with respect to rate of interest, time of payment 
of any installment of principal or interest, security, amount 
of annual contribution, or any other term, of any contract or 
agreement of any kind to which the Secretary is a party. When 
the Secretary finds that it would promote economy or be in the 
financial interest of the Federal Government or is necessary to 
assure or maintain the lower income character of the project or 
projects involved, any contract heretofore or hereafter made 
for annual contributions, loans, or both, may be amended or 
superseded by a contract entered into by mutual agreement 
between the public housing agency and the Secretary. Contracts 
may not be amended or superseded in a manner which would impair 
the rights of the holders of any outstanding obligations of the 
public housing agency involved for which annual contributions 
have been pledged. Any rule of law contrary to this provision 
shall be deemed inapplicable.
  [(g) In addition to the authority of the Secretary under 
subsection (a) to pledge annual contributions as security for 
obligations issued by a public housing agency, the Secretary is 
authorized to pledge annual contributions as a guarantee of 
payment by a public housing agency of all principal and 
interest on obligations issued by it to assist the development 
or acquisition of the project to which the annual contributions 
relate, except that no obligation shall be guaranteed under 
this subsection if the income thereon is exempt from Federal 
taxation.
  [(h) Notwithstanding any other provision of law, a public 
housing agency may sell a low-income housing project to its 
lower income tenants, on such terms and conditions as the 
agency may determine, without affecting the Secretary's 
commitment to pay annual contributions with respect to that 
project, but such contributions shall not exceed the maximum 
contributions authorized under subsection (a) of this section.
  [(i) In entering into contracts for assistance with respect 
to newly constructed or substantially rehabilitated projects 
under this section (other than for projects assisted pursuant 
to section 8), the Secretary shall require the installation of 
a passive or active solar energy system in any such project 
where the Secretary determines that such installation would be 
cost effective over the estimated life of the system.
  [(j)(1) After September 30, 1987, in providing assistance 
under this Act to a public housing agency for public housing 
(other than for Indian families), the Secretary shall reserve 
funds for the development of public housing only if--
          [(A) the Secretary determines that additional amounts 
        are required to complete the development of dwelling 
        units for which amounts are obligated on or before such 
        date;
          [(B) the public housing agency certifies to the 
        Secretary that 85 percent of the public housing 
        dwelling units of the public housing agency--
                  [(i) are maintained in substantial compliance 
                with the housing quality standards established 
                by the Secretary under section 8(o)(6);
                  [(ii) will be so maintained upon completion 
                of modernization for which funding has been 
                awarded; or
                  [(iii) will be so maintained upon completion 
                of modernization for which applications are 
                pending that have been submitted in good faith 
                under section 14 (or a comparable State or 
                local government program) and that there is a 
                reasonable expectation, as determined by the 
                Secretary in writing, that the applications 
                would be approved;
          [(C) the public housing agency certifies that such 
        development--
                  [(i) will replace dwelling units that are 
                disposed of or demolished by the public housing 
                agency, including dwelling units disposed of or 
                lost through sale to tenants or through units 
                redesign; or
                  [(ii) is required to comply with court orders 
                or directions of the Secretary;
          [(D) the public housing agency certifies that it has 
        demands for family housing not satisfied by the rental 
        assistance programs established in subsection (b) or 
        (o) of section 8 for which it plans to construct or 
        acquire projects of not more than 100 units; or
          [(E) the Secretary makes such reservation under 
        paragraph (2).
          [(F) in the case of an application for development of 
        projects (or portions of projects) designated under 
        section 7(a)(1) for occupancy for elderly families, 
        only if the agency certifies to the Secretary that the 
        use of such assistance will assist in expanding the 
        housing available for eligible persons with 
        disabilities identified in the allocation plan for the 
        agency submitted under section 7(f); and
  [(2)(A) Notwithstanding any other provision of law, the 
Secretary may reserve not more than 20 percent of any amounts 
appropriated for development of public housing in each fiscal 
year for the substantial redesign, reconstruction, or 
redevelopment of existing obsolete public housing projects or 
buildings and for the costs of improving the management and 
operation of projects undergoing redesign, reconstruction, or 
redevelopment under this paragraph (to the extent that such 
improvement is necessary to maintain the physical improvements 
resulting from such redesign, reconstruction, or 
redevelopment).
  [(B) For purposes of this paragraph, the term ``obsolete 
public housing project or building'' means a public housing 
project or building (i) having design or marketability problems 
resulting in vacancy in more than 25 percent of the units, or 
(ii)(I) for which the costs for redesign, reconstruction, or 
redevelopment (includingany costs for lead-based paint 
abatement activities) exceed 70 percent of the total development cost 
limits for new construction of similar units in the area, and (II) 
which has an occupancy density or a building height that is 
significantly in excess of that which prevails in the neighborhood in 
which the project is located, a bedroom configuration that could be 
altered to better serve the needs of families seeking occupancy to 
dwellings of the public housing agency, significant security problems 
in and around the project, or significant physical deterioration or 
inefficient energy and utility systems.
  [(C) The Secretary shall allocate amounts reserved under this 
section to public housing agencies on the basis of a 
competition among public housing agencies applying for such 
amounts. The competition shall be based on--
          [(ii) the expected term of the useful life of the 
        project or building after redesign, reconstruction or 
        redevelopment; and
          [(iii) the likelihood of achieving full occupancy 
        within the projects or buildings of the agency that are 
        to be assisted under this paragraph.
  [(D) The Secretary shall establish limitations on the total 
costs of any project or building receiving amounts under this 
paragraph for redesign, reconstruction, and redevelopment. The 
cost limitations shall not be related to the total development 
cost system for new development or to the cost limits for 
modernization and shall recognize the higher direct costs of 
such work.
  [(E) Assistance may not be provided under this paragraph for 
any project or building assisted under section 14.
  [(F)(i) For each fiscal year for which amounts are reserved 
or appropriated for the purposes of this paragraph, the 
Secretary shall establish performance goals to evaluate the 
effectiveness of the use of such amounts. The goals shall--
          [(I) be designed to maximize the effectiveness of the 
        expenditures in a quantifiable manner; and
          [(II) describe the number of units to be redesigned, 
        redeveloped, and reconstructed with such amounts and 
        improvements in the management of projects so assisted 
        to be accomplished with such amounts.
  [(ii) Not later than 60 days after the end of each such 
fiscal year, the Secretary shall submit a report to the 
Congress, which shall describe the performance goals 
established for the fiscal year, the activities carried out 
with such amounts, and a statement of whether the performance 
goals were met. If the performance goals were not met, the 
report shall t shall contain--
          [(I) an explanation of why the goals were not met and 
        a description of any managerial deficiencies or legal 
        problems that contributed to not meeting such goals;
          [(II) plans and a schedule for achieving the level of 
        performance under such performance goals;
          [(III) recommendations for legislative or regulatory 
        changes necessary to achieve the performance goals or 
        improve performance; and
          [(IV) a statement of whether the performance goals 
        established for the fiscal year were impractical or 
        infeasible, and, if so, the factors that contributed 
        and resulted in establishing such impractical or 
        infeasible goals and recommendations of actions to meet 
        such goals, which may include changing the goals or 
        altering or eliminating the program under this 
        paragraph for major reconstruction of projects.
  [(G)(i) In fiscal years 1993 and 1994, the Secretary shall 
commit for use under clause (ii) not less than 5 percent of any 
amounts reserved under subparagraph (A) for each such fiscal 
year.
  [(ii) The amounts referred to in clause (i) shall be 
available to public housing agencies only for use for projects 
(or portions of projects) designated for occupancy under 
section 7(a)(1) and (e) by disabled families.
  [(iii) In allocating amounts reserved under this subparagraph 
among public housing agencies, the Secretary shall consider the 
need for any such amounts as identified in the allocation plans 
submitted by agencies under section 7(f).
  [(3)(A) In fiscal years 1993 and 1994, the Secretary shall 
reserve for use under subparagraph (B) not less than 5 percent 
of any amounts approved in appropriation Acts for each such 
fiscal year for public housing grants under subsection (a)(2) 
that are not designated under such Acts for use under paragraph 
(2) of this subsection for the substantial redesign, 
reconstruction, or redevelopment of existing public housing 
projects, buildings, or units.
  [(B) Any amount reserved under subparagraph (A) shall be 
available only to public housing agencies that have designated 
projects (or portions of projects) for occupancy under section 
7(a)(1) for use only for the costs of development or 
acquisition of public housing projects or buildings designated 
for occupancy under section 7(a)(1) and (e) by disabled 
families. A building so assisted may not contain more than 25 
dwelling units, except that the Secretary may (in the 
discretion of the Secretary) waive such limitation for a 
building.
  [(C) The Secretary shall carry out a competition for budget 
authority reserved under subparagraph (A) among eligible public 
housing agencies and shall allocate such budget authority to 
public housing agencies pursuant to the competition, based on 
(i) the need of the agency for such assistance (taking into 
consideration the allocation plans submitted under section 7(f) 
by agencies), and (ii) the extent to which the public housing 
projects and buildings to be developed or assisted meet the 
requirements of section 7(e).
  [(k) After the reservation of public housing development 
funds to a public housing agency, the Secretary may not 
recapture any of the amounts included in such reservation due 
to the failure of a public housing agency to begin construction 
or rehabilitation, or to complete acquisition, during the 30-
month period following the date of such reservation. During 
such 30-month period, the public housing agency shall be 
permitted to change the site of the public housing project or 
reformulate the project, if not less than the original number 
of dwelling units are to be constructed, rehabilitated, or 
acquired. There shall be excluded from the computation of such 
30-month period any delay in the beginning of construction or 
rehabilitation of such project caused by (1) the failure of the 
Secretary to process such project within a reasonable period of 
time; (2) any environmental review requirement; (3) any legal 
action affectingsuch project; or (4) any other factor beyond 
the control of the public housing agency.
  [(l) The Secretary may not use as a criterion for 
distributing assistance under this section the progress made by 
an Indian public housing agency in collecting rents owed by 
tenants unless--
          [(1) such criterion is used as 1 of several criteria 
        that are weighted proportionally and is established by 
        regulations issued after public notice and opportunity 
        to comment in accordance with section 553 of title 5, 
        United States Code; or
          [(2) the Secretary determines that the Indian public 
        housing agency has demonstrated a pattern of 
        substantial noncompliance with requirements governing 
        the collection of rents.

                 [contract provisions and requirements

  [Sec. 6. (a) The Secretary may include in any contract for 
loans, contributions, sale, lease, mortgage, or any other 
agreement or instrument made pursuant to this Act, such 
covenants, conditions, or provisions as he may deem necessary 
in order to insure the lower income character of the project 
involved. Any such contract may contain a condition requiring 
the maintenance of an open space or playground in connection 
with the housing project involved if deemed necessary by the 
Secretary for the safety or health of children. Any such 
contract shall require that, except in the case of housing 
predominantly for elderly or disabled families, high-rise 
elevator projects shall not be provided for families with 
children unless the Secretary makes a determination that there 
is no practical alternative.
  [(b)(1) Each contract for loans (other than preliminary 
loans) or contributions for the development, acquisition, or 
operation of public housing and public housing for Indians and 
Alaska Natives in accordance with the Indian Housing Act of 
1988 shall provide that the total development cost of the 
project on which the computation of any annual contributions 
under this Act may be based may not exceed the amount 
determined under paragraph (2) (for the appropriate structure 
type) unless the Secretary provides otherwise, and in any case 
may not exceed 110 per centum of such amount unless the 
Secretary for good cause determines otherwise.
  [(2) For purposes of paragraph (1), the Secretary shall 
determine the total development cost by multiplying the 
construction cost guideline for the project (which shall be 
determined by averaging the current construction costs, as 
listed by not less than 2 nationally recognized residential 
construction cost indices, for publicly bid construction of a 
good and sound quality) by--
          [(A) in the case of elevator type structures, 1.6; 
        and
          [(B) in the case of nonelevator type structures, 
        1.75.
  [(c) Every contract for contributions shall provide that--
          [(1) the Secretary may require the public housing 
        agency to review and revise its maximum income limits 
        if the Secretary determines that changed conditions in 
        the locality make such revision necessary in achieving 
        the purposes of this Act;
          [(2) the public housing agency shall determine, and 
        so certify to the Secretary, that each family in the 
        project was admitted in accordance with duly adopted 
        regulations and approved income limits; and the public 
        housing agency shall review the incomes of families 
        living in the project no less frequently than annually;
          [(3) the public housing agency shall promptly notify 
        (i) any applicant determined to be ineligible for 
        admission to the project of the basis for such 
        determination and provide the applicant upon request, 
        within a reasonable time after the determination is 
        made, with an opportunity for an informal hearing on 
        such determination, and (ii) any applicant determined 
        to be eligible for admission to the project of the 
        approximate date of occupancy insofar as such date can 
        be reasonably determined;
          [(4) the public housing agency shall comply with such 
        procedures and requirements as the Secretary may 
        prescribe to assure that sound management practices 
        will be followed in the operation of the project, 
        including requirements pertaining to--
                  [(A) the establishment, after public notice 
                and an opportunity for public comment, of a 
                written system of preferences for admission to 
                public housing, if any, that is not 
                inconsistent with the comprehensive housing 
                affordability strategy under title I of the 
                Cranston-Gonzalez National Affordable Housing 
                Act;
                  [(E) except in the case of agencies not 
                receiving operating assistance under section 9, 
                the establishment and maintenance of a system 
                of accounting for rental collections and costs 
                (including administrative, utility, 
                maintenance, repair and other operating costs) 
                for each project or operating cost center (as 
                determined by the Secretary), which collections 
                and costs shall be made available to the 
                general public and submitted to the appropriate 
                local public official (as determined by the 
                Secretary); except that the Secretary may 
                permit agencies owning or operating less than 
                500 units to comply with the requirements of 
                this subparagraph by accounting on an agency-
                wide basis; and
                  [(F) requiring the public housing agency to 
                ensure and maintain compliance with subtitle C 
                of title VI of the Housing and Community 
                Development Act of 1992 and any regulations 
                issued under such subtitle.
  [(d) Every contract for contributions with respect to a low-
income housing project shall provide that no contributions by 
the Secretary shall be made available for such project unless 
such project (exclusive of any portion thereof which is not 
assisted by contributions under this Act) is exempt from all 
real and personal property taxes levied or imposed by the 
State, city, county, or other political subdivision; and such 
contract shall require the public housing agency to make 
payments in lieu of taxes equal to 10 per centum of the sum of 
the shelter rents charged in such project, or such lesser 
amount as (i) is prescribed by State law, or (ii) is agreed to 
by the local governing body in its agreement for local 
cooperation with the public housing agency required under 
section 5(e)(2) of this Act, or (iii) is due to failure of a 
local public body or bodies other than the public housing 
agency to perform any obligation under such agreement. If any 
such project is not exempt from all real and personal property 
taxes levied or imposed by the State,city, county, or other 
political subdivision, such contract shall provide, in lieu of the 
requirement for tax exemption and payments in lieu of taxes, that no 
contributions by the Secretary shall be made available for such project 
unless and until the State, city, county, or other political 
subdivision in which such project is situated shall contribute, in the 
form of cash or tax remission, the amount by which the taxes paid with 
respect to the project exceed 10 per centum of the shelter rents 
charged in such project.
  [(e) Every contract for contributions shall provide that 
whenever in any year the receipts of a public housing agency in 
connection with a low-income housing project exceed its 
expenditures (including debt service, operation, maintenance, 
establishment of reserves, and other costs and charges), an 
amount equal to such excess shall be applied, or set aside for 
application, to purposes which, in the determination of the 
Secretary, will effect a reduction in the amount of subsequent 
annual contributions.
  [(g) Every contract for contributions (including contracts 
which amend or supersede contracts previously made) may provide 
that--
          [(1) upon the occurrence of a substantial default in 
        respect to the covenants or conditions to which the 
        public housing agency is subject (as such substantial 
        default shall be defined in such contract), the public 
        housing agency shall be obligated at the option of the 
        Secretary either to convey title in any case where, in 
        the determination of the Secretary (which determination 
        shall be final and conclusive), such conveyance of 
        title is necessary to achieve the purposes of this Act, 
        or to deliver to the Secretary possession of the 
        project, as then constituted, to which such contract 
        relates; and
          [(2) the Secretary shall be obligated to reconvey or 
        redeliver possession of the project, as constituted at 
        the time of reconveyance or redelivery, to such public 
        housing agency or to its successor (if such public 
        housing agency or a successor exists) upon such terms 
        as shall be prescribed in such contract, and as soon as 
        practicable (i) after the Secretary is satisfied that 
        all defaults with respect to the project have been 
        cured, and that the project will, in order to fulfill 
        the purposes of this Act, thereafter be operated in 
        accordance with the terms of such contract; or (ii) 
        after the termination of the obligation to make annual 
        contributions available unless there are any 
        obligations or covenants of the public housing agency 
        to the Secretary which are then in default. Any prior 
        conveyances and reconveyances or deliveries and 
        redeliveries of possession shall not exhaust the right 
        to require a conveyance or delivery of possession of 
        the project to the Secretary pursuant to subparagraph 
        (1) upon the subsequent occurrence of a substantial 
        default.
Whenever such a contract for annual contributions includes 
provisions which the Secretary in such contract determines are 
in accordance with this subsection, and the portion of the 
annual contribution payable for debt service requirements 
pursuant to such contract has been pledged by the public 
housing agency as security for the payment of the principal and 
interest on any of its obligations, the Secretary 
(notwithstanding any other provisions of this Act) shall 
continue to make such annual contributions available for the 
project so long as any of such obligations remain outstanding, 
and may covenant in such contract that in any event such annual 
contributions shall in each year be at least equal to an amount 
which, together with such income or other funds as are actually 
available from the project for the purpose at the time such 
annual contribution is made, will suffice for the payment of 
all installments, falling due within the next succeeding twelve 
months, of principal and interest on the obligations for which 
the annual contributions provided for in the contract shall 
have been pledged as security. In no case shall such annual 
contributions be in excess of the maximum sum specified in the 
contract involved, nor for longer than the remainder of the 
maximum period fixed by the contract.
  [(h) On or after October 1, 1983, the Secretary may enter 
into a contract involving new construction only if the public 
housing agency demonstrates to the satisfaction of the 
Secretary that the cost of new construction in the neighborhood 
where the public housing agency determines the housing is 
needed is less than the cost of acquisition or acquisition and 
rehabilitation in such neighborhood, including any reserve fund 
under subsection (i), would be.
  [(i) The Secretary may, upon application by a public housing 
agency in connection with the acquisition of housing for use as 
public housing, establish and set aside a reserve fund in an 
amount not to exceed 30 per centum of the acquisition cost 
which shall be available for use for major repairs to such 
housing.
  [(j)(1) The Secretary shall develop and publish in the 
Federal Register indicators to assess the management 
performance of public housing agencies and resident management 
corporations. The indicators shall be established by rule under 
section 553 of title 5, United States Code. Such indicators 
shall enable the Secretary to evaluate the performance of 
public housing agencies and resident management corporations in 
all major areas of management operations. The Secretary shall, 
in particular, use the following indicators:
          [(A) The number and percentage of vacancies within an 
        agency's inventory, including the progress that an 
        agency has made within the previous 3 years to reduce 
        such vacancies.
          [(B) The amount and percentage of funds obligated to 
        the public housing agency under section 14 of this Act 
        which remain unexpended after 3 years.
          [(C) The percentage of rents uncollected.
          [(D) The energy consumption (with appropriate 
        adjustments to reflect different regions and unit 
        sizes).
          [(E) The average period of time that an agency 
        requires to repair and turn-around vacant units.
          [(F) The proportion of maintenance work orders 
        outstanding, including any progress that an agency has 
        made during the preceding 3 years to reduce the period 
        of time required to complete maintenance work orders.
          [(G) The percentage of units that an agency fails to 
        inspect to ascertain maintenance or modernization needs 
        within such period of time as the Secretary deems 
        appropriate (with appropriate adjustments, if any, for 
        large and small agencies).
          [(H) Any other factors as the Secretary deems 
        appropriate.
  [(2)(A)(i) The Secretary shall, under the rulemaking 
procedures under section 553 of title 5, United States Code, 
establish procedures for designating troubled public housing 
agencies, which procedures shall include identification of 
serious and substantial failure to perform as measured by the 
performance indicators specified under paragraph (1) and such 
other factors as the Secretary may deem to be appropriate. The 
Secretary shall also designate, by rule under section 553 of 
title 5, United States Code, agencies that are troubled with 
respect to the program under section 14.
  [(ii) The Secretary may also, in consultation with national 
organizations representing public housing agencies and public 
officials (as the Secretary determines appropriate), identify 
and commend public housing agencies that meet the performance 
standards established under paragraph (1) in an exemplary 
manner.
  [(iii) The Secretary shall establish procedures for public 
housing agencies to appeal designation as a troubled agency 
(including designation as a troubled agency for purposes of the 
program under section 14), to petition for removal of such 
designation, and to appeal any refusal to remove such 
designation.
  [(B)(i) Upon designating a public housing agency as troubled 
pursuant to subparagraph (A) and determining that an assessment 
under this subparagraph will not duplicate any review conducted 
under section 14(p), the Secretary shall provide for an on-
site, independent assessment of the management of the agency.
  [(ii) To the extent the Secretary deems appropriate (taking 
into account an agency's performance under the indicators 
specified under paragraph (1)), the assessment team shall also 
consider issues relating to the agency's resident population 
and physical inventory, including the extent to which (I) the 
agency's comprehensive plan prepared pursuant to section 14 
adequately and appropriately addresses the rehabilitation needs 
of the agency's inventory, (II) residents of the agency are 
involved in and informed of significant management decisions, 
and (III) any projects in the agency's inventory are severely 
distressed and eligible for assistance pursuant to section 24.
  [(iii) An independent assessment under this subparagraph 
shall be carried out by a team of knowledgeable individuals 
selected by the Secretary (referred to in this section as the 
``assessment team'') with expertise in public housing and real 
estate management. In conducting an assessment, the assessment 
team shall consult with the residents and with public and 
private entities in the jurisdiction in which the public 
housing is located. The assessment team shall provide to the 
Secretary and the public housing agency a written report, which 
shall contain, at a minimum, recommendations for such 
management improvements as are necessary to eliminate or 
substantially remedy existing deficiencies.
  [(C) The Secretary shall seek to enter into an agreement with 
each troubled public housing agency, after reviewing the report 
submitted pursuant to subparagraph (B) and consulting with the 
agency's assessment team.
To the extent the Secretary deems appropriate (taking into 
account an agency's performance under the indicators specified 
under paragraph (1)), such agreement shall also set forth a 
plan for enhancingresident involvement in the management of the 
public housing agency. Such agreement shall set forth--
          [(i) targets for improving performance as measured by 
        the performance indicators specified under paragraph 
        (1) and other requirements within a specified period of 
        time;
          [(ii) strategies for meeting such targets, including 
        a description of the technical assistance that the 
        Secretary will make available to the agency; and
          [(iii) incentives or sanctions for effective 
        implementation of such strategies, which may include 
        any constraints on the use of funds that the Secretary 
        determines are appropriate.
The Secretary and the public housing agency shall, to the 
maximum extent practicable, seek the assistance of local public 
and private entities in carrying out the agreement.
                  [(D) The Secretary shall apply the provisions 
                of this paragraph to resident management 
                corporations as well as public housing 
                agencies.
  [(3)(A) Notwithstanding any other provision of law or of any 
contract for contributions, upon the occurrence of events or 
conditions that constitute a substantial default by a public 
housing agency with respect to the covenants or conditions to 
which the public housing agency is subject or an agreement 
entered into under paragraph (2), the Secretary may--
          [(i) solicit competitive proposals from other public 
        housing agencies and private housing management agents 
        (which may be selected by existing tenants through 
        administrative procedures established by the Secretary) 
        in the eventuality that these agents may be needed for 
        managing all, or part, of the housing administered by a 
        public housing agency;
          [(ii) petition for the appointment of a receiver 
        (which may be another public housing agency or a 
        private management corporation) of the public housing 
        agency to any district court of the United States or to 
        any court of the State in which the real property of 
        the public housing agency is situated, that is 
        authorized to appoint a receiver for the purposes and 
        having the powers prescribed in this subsection;
          [(iii) solicit competitive proposals from other 
        public housing agencies and private entities with 
        experience in construction management in the 
        eventuality that such agencies or firms may be needed 
        to oversee implementation of assistance made available 
        under section 14 for the housing; and
          [(iv) require the agency to make other arrangements 
        acceptable to the Secretary and in the best interests 
        of the public housing residents for managing all, or 
        part of, such housing.
Residents of a public housing agency designated as troubled 
pursuant to paragraph (2)(A) may petition the Secretary in 
writing to take 1 or more of the actions referred to in this 
subparagraph. The Secretary shall respond to such petitions in 
a timely manner with a written description of the actions, if 
any, the Secretary plans to take and, where applicable, the 
reasons why such actions differ from the course proposed by the 
residents.
  [(B) The Secretary may make available to receivers and other 
entities selected or appointed pursuant to this paragraph such 
assistance as is necessary to remedy the substantial 
deterioration of living conditions in individual public housing 
developments or other related emergencies that endanger the 
health, safety and welfare of the residents.
  [(C) In any proceeding under subparagraph (A)(ii), upon a 
determination that a substantial default has occurred, and 
without regard to the availability of alternative remedies, the 
court shall appoint a receiver to conduct the affairs of the 
public housing agency in a manner consistent with this Act and 
in accordance with such further terms and conditions as the 
court may provide. The court shall have power to grant 
appropriate temporary or preliminary relief pending final 
disposition of the petition by the Secretary.
  [(D) The appointment of a receiver pursuant to this 
subsection may be terminated, upon the petition of any party, 
when the court determines that all defaults have been cured and 
the housing operated by the public housing agency will 
thereafter be operated in accordance with the covenants and 
conditions to which the public housing agency is subject.
  [(4) The Secretary shall submit to the Congress annually, as 
a part of the report of the Secretary under section 8 of the 
Department of Housing and Urban Development Act, a report 
that--
          [(A) identifies the public housing agencies that have 
        been designated as troubled under paragraph (2);
          [(B) describes the grounds on which such public 
        housing agencies were designated as troubled and 
        continue to be so designated;
          [(C) describes the agreements that have been entered 
        into with such agencies under such paragraph;
          [(D) describes the status of progress under such 
        agreements;
          [(E) describes any action that has been taken in 
        accordance with paragraph (3); and
          [(F) describes the status of any public housing 
        agency designated as troubled with respect to the 
        program under section 14 and specifies the amount of 
        assistance the agency received under section 14 and any 
        credits accumulated by the agency under section 
        14(k)(5)(D).
  [(k) The Secretary shall by regulation require each public 
housing agency receiving assistance under this Act to establish 
and implement an administrative grievance procedure under which 
tenants will--
          [(1) be advised of the specific grounds of any 
        proposed adverse public housing agency action;
          [(2) have an opportunity for a hearing before an 
        impartial party upon timely request within any period 
        applicable under subsection (l);
          [(3) have an opportunity to examine any documents or 
        records or regulations related to the proposed action;
          [(4) be entitled to be represented by another person 
        of their choice at any hearing;
          [(5) be entitled to ask questions of witnesses and 
        have others make statements on their behalf; and
          [(6) be entitled to receive a written decision by the 
        public housing agency on the proposed action.
For any grievance concerning an eviction or termination of 
tenancy that involves any activity that threatens the health, 
safety, or right to peaceful enjoyment of the premises of other 
tenants or employees of the public housing agency or any drug-
related criminal activity on or off such premises, the agency 
may (A) establish an expedited grievance procedure as the 
Secretary shall provide by rule under section 553 of title 5, 
United States Code, or (B) exclude from its grievance procedure 
any such grievance, in any jurisdiction which requires that 
prior to eviction, a tenant be given a hearing in court which 
the Secretary determines provides the basic elements of due 
process (which the Secretary shall establish by rule under 
section 553 of title 5, United States Code). Such elements of 
due process shall not include a requirement that the tenant be 
provided an opportunity to examine relevant documents within 
the possession of the public housing agency. The agency shall 
provide to the tenant a reasonable opportunity, prior to 
hearing or trial, to examine any relevant documents, records, 
or regulations directly related to the eviction or termination.
  [(l) Each public housing agency shall utilize leases which--
          [(1) do not contain unreasonable terms and 
        conditions;
          [(2) obligate the public housing agency to maintain 
        the project in a decent, safe, and sanitary condition;
          [(3) require the public housing agency to give 
        adequate written notice of termination of the lease 
        which shall not be less than--
                  [(A) a reasonable time, but not to exceed 30 
                days, when the health or safety of other 
                tenants or public housing agency employees is 
                threatened;
                  [(B) 14 days in the case of nonpayment of 
                rent; and
                  [(C) 30 days in any other case;
          [(4) require that the public housing agency may not 
        terminate the tenancy except for serious or repeated 
        violation of the terms or conditions of the lease or 
        for other good cause;
          [(5) provide that any criminal activity that 
        threatens the health, safety, or right to peaceful 
        enjoyment of the premises by other tenants or any drug-
        related criminal activity on or off such premises, 
        engaged in by a public housing tenant, any member of 
        the tenant's household, or any guest or other person 
        under the tenant's control, shall be cause for 
        termination of tenancy;
          [(6) specify that with respect to any notice of 
        eviction or termination, notwithstanding any State law, 
        a public housing tenant shall be informed of the 
        opportunity, prior to any hearing or trial, to examine 
        any relevant documents, records or regulations directly 
        related to the eviction or termination; and
          [(7) provide that it shall be cause for immediate 
        termination of the tenancy of a public housing tenant 
        if such tenant--
                  [(A) is fleeing to avoid prosecution, or 
                custody or confinement after conviction, under 
                the laws of the place from which the individual 
                flees, for a crime, or attempt to commit a 
                crime, which is a felony under the laws of the 
                place from which the individual flees, or 
                which, in the case of the State of New Jersey, 
                is a high misdemeanor under the laws of such 
                State; or
          [(2) is violating a condition of probation or parole 
        imposed under Federal or State law.
For purposes of paragraph (5), the term ``drug-related criminal 
activity'' means the illegal manufacture, sale, distribution, 
use, or possession with intent to manufacture, sell, 
distribute, or use, of a controlled substance (as defined in 
section 102 of the Controlled Substances Act (21 U.S.C. 802)).
  [(m) The Secretary shall not impose any unnecessarily 
duplicative or burdensome reporting requirements on tenants or 
public housing agencies assisted under this Act.
  [(n) When a public housing agency evicts an individual or 
family from a dwelling unit for engaging in criminal activity, 
including drug-related criminal activity, the public housing 
agency shall notify the local post office serving that dwelling 
unit that such individual or family is no longer residing in 
the dwelling unit.
  [(o) Subject to the written system of preferences for 
selection established pursuant to subsection (c)(4)(A), in 
providing housing in low-income housing projects, each public 
housing agency may coordinate with any local public agencies 
involved in providing for the welfare of children to make 
available dwelling units to--
          [(1) families identified by the agencies as having a 
        lack of adequate housing that is a primary factor--
                  [(A) in the imminent placement of a child in 
                foster care; or
                  [(B) in preventing the discharge of a child 
                from foster care and reunification with his or 
                her family; and
          [(2) youth, upon discharge from foster care, in cases 
        in which return to the family or extended family or 
        adoption is not available.
  [(p) With respect to amounts available for obligation on or 
after October 1, 1991, the criteria established under section 
213(d)(5)(B) of the Housing and Community Development Act of 
1974 for any competition for assistance for new construction, 
acquisition, or acquisition and rehabilitation of public 
housing shall give preference to applications for housing to be 
located in a local market area that has an inadequate supply of 
housing available for use by very low-income families. The 
Secretary shall establish criteria for determining that the 
housing supply of a local market area is inadequate, which 
shall require--
          [(1)(A) information regarding housing market 
        conditions showing that the supply of rental housing 
        affordable by very low-income families is inadequate, 
        taking into account vacancy rates in such housing and 
        other market indicators; and
          [(B) evidence that significant numbers of families in 
        the local market area holding certificates and vouchers 
        under section 8 are experiencing significant difficulty 
        in leasing housing meeting program and family-size 
        requirements; or
          [(2) evidence that the proposed development would 
        provide increased housing opportunities for minorities 
        or address special housing needs.
  [(q) Availability of Records.--
          [(1) In general.--
                  [(A) Provision of information.--
                Notwithstanding any other provision of law, 
                except as provided in subparagraph (B), the 
                National Crime Information Center, police 
                departments, and other law enforcement agencies 
                shall, upon request, provide information to 
                public housing agencies regarding the criminal 
                conviction records of adult applicants for, or 
                tenants of, public housing for purposes of 
                applicant screening, lease enforcement, and 
                eviction.
                  [(B) Exception.--A law enforcement agency 
                described in subparagraph (A) shall provide 
                information under this paragraph relating to 
                any criminal conviction of a juvenile only to 
                the extent that the release of such information 
                is authorized under the law of the applicable 
                State, tribe, or locality.
          [(2) Opportunity to dispute.--Before an adverse 
        action is taken with regard to assistance under this 
        title on the basis of a criminal record, the public 
        housing agency shall provide the tenant or applicant 
        with a copy of the criminal record and an opportunity 
        to dispute the accuracy and relevance of that record.
          [(3) Fee.--A public housing agency may be charged a 
        reasonable fee for information provided under paragraph 
        (1).
          [(4) Records management.--Each public housing agency 
        shall establish and implement a system of records 
        management that ensures that any criminal record 
        received by the public housing agency is--
                  [(A) maintained confidentially;
                  [(B) not misused or improperly disseminated; 
                and
                  [(C) destroyed, once the purpose for which 
                the record was requested has been accomplished.
          [(5) Definition.--For purposes of this subsection, 
        the term ``adult'' means a person who is 18 years of 
        age or older, or who has been convicted of a crime as 
        an adult under any Federal, State, or tribal law.
  [(r) Ineligibility Because of Eviction for Drug-Related 
Activity.--Any tenant evicted from housing assisted under this 
title by reason of drug-related criminal activity (as that term 
is defined in section 8(f)) shall not be eligible for housing 
assistance under this title during the 3-year period beginning 
on the date of such eviction, unless the evicted tenant 
successfully completes a rehabilitation program approved by the 
public housing agency (which shall include a waiver of this 
subsection if the circumstances leading to eviction no longer 
exist).

         [designated housing for elderly and disabled families

  [Sec. 7. (a) Authority To Provide Designated Housing.--
          [(1) In general.--Subject only to provisions of this 
        section and notwithstanding any other provision of law, 
        a public housing agency for which a plan under 
        subsection (d) is in effect may provide public housing 
        projects (or portions of projects) designated for 
        occupancy by (A) only elderly families, (B) only 
        disabled families, or (C) elderly and disabled 
        families.
          [(2) Priority for occupancy.--In determining priority 
        for admission to public housing projects (or portions 
        of projects) that are designated for occupancy as 
        provided in paragraph (1), the public housing agency 
        may make units in such projects (or portions) available 
        only to the types of families for whom the project is 
        designated.
          [(3) Eligibility of near-elderly families.--If a 
        public housing agency determines that there are 
        insufficient numbers of elderly families to fill all 
        the units in a project (or portion of a project) 
        designated under paragraph (1) for occupancy by only 
        elderly families, the agency may provide that near-
        elderly families may occupy dwelling units in the 
        project (or portion).
  [(b) Standards Regarding Evictions.--Except as provided in 
section 16(e)(1)(B), any tenant who is lawfully residing in a 
dwelling unit in a public housing project may not be evicted or 
otherwise required to vacate such unit because of the 
designation of the project (or portion of a project) pursuant 
to this section or because of any action taken by the Secretary 
or any public housing agency pursuant to this section.
  [(c) Relocation Assistance.--A public housing agency that 
designates any existing project or building, or portion 
thereof, for occupancy as provided under subsection (a)(1) 
shall provide, to each person and family who agrees to be 
relocated in connection with such designation--
          [(1) notice of the designation and an explanation of 
        available relocation benefits, as soon as is 
        practicable for the agency and the person or family;
          [(2) access to comparable housing (including 
        appropriate services and design features), which may 
        include tenant-based rental assistance under section 8, 
        at a rental rate paid by the tenant that is comparable 
        to that applicable to the unit from which the person or 
        family has vacated; and
          [(3) payment of actual, reasonable moving expenses.
  [(d) Required Plan.--A plan under this subsection for 
designating a project (or portion of a project) for occupancy 
under subsection (a)(1) is a plan, prepared by the public 
housing agency for the project and submitted to the Secretary, 
that--
          [(1) establishes that the designation of the project 
        is necessary--
                  [(A) to achieve the housing goals for the 
                jurisdiction under the comprehensive housing 
                affordability strategy under section 105 of the 
                Cranston-Gonzalez National Affordable Housing 
                Act; and
                  [(B) to meet the housing needs of the low-
                income population of the jurisdiction; and
          [(2) includes a description of--
                  [(A) the project (or portion of a project) to 
                be designated;
                  [(B) the types of tenants for which the 
                project is to be designated;
                  [(C) any supportive services to be provided 
                to tenants of the designated project (or 
                portion);
                  [(D) how the design and related facilities 
                (as such term is defined in section 202(d)(8) 
                of the Housing Act of 1959) of the project 
                accommodate the special environmental needs of 
                the intended occupants; and
                  [(E) any plans to secure additional resources 
                or housing assistance to provide assistance to 
                families that may have been housed if occupancy 
                in the project were not restricted pursuant to 
                this section.
For purposes of this subsection, the term ``supportive 
services'' means services designed to meet the special needs of 
residents.
  [(e) Review of Plans.--
          [(1) Review and notification.--The Secretary shall 
        conduct a limited review of each plan under subsection 
        (d) that is submitted to the Secretary to ensure that 
        the plan is complete and complies with the requirements 
        of subsection (d). The Secretary shall notify each 
        public housing agency submitting a plan whether the 
        plan complies with such requirements not later than 60 
        days after receiving the plan. If the Secretary does 
        not notify the public housing agency, as required under 
        this paragraph or paragraph (2), the plan shall be 
        considered, for purposes of this section, to comply 
        with the requirements under subsection (d) and the 
        Secretary shall be considered to have notified the 
        agency of such compliance upon the expiration of such 
        60-day period.
          [(2) Notice of reasons for determination of 
        noncompliance.--If the Secretary determines that a 
        plan, as submitted, does not comply with the 
        requirements under subsection (d), the Secretary shall 
        specify in the notice under paragraph (1) the reasons 
        for the noncompliance and any modifications necessary 
        for the plan to meet such requirements.
          [(3) Standards for determination of noncompliance.--
        The Secretary may determine that a plan does not comply 
        with the requirements under subsection (d) only if--
                  [(A) the plan is incomplete in significant 
                matters required under such subsection; or
                  [(B) there is evidence available to the 
                Secretary that challenges, in a substantial 
                manner, any information provided in the plan.
          [(4) Treatment of existing plans.--Notwithstanding 
        any other provision of this section, a public housing 
        agency shall be considered to have submitted a plan 
        under this subsection if the agency has submitted to 
        the Secretary an application and allocation plan under 
        this section (as in effect before the date of the 
        enactment of the Housing Opportunity Program Extension 
        Act of 1996) that have not been approved or disapproved 
        before such date of enactment.
  [(f) Effectiveness.--
          [(1) 5-year effectiveness of original plan.--A plan 
        under subsection (d) shall be in effect for purposes of 
        this section during the 5-year period that begins upon 
        notification under subsection (e)(1) of the public 
        housing agency that the plan complies with the 
        requirements under subsection (d).
          [(2) Renewal of plan.--Upon the expiration of the 5-
        year period under paragraph (1) or any 2-year period 
        under this paragraph, an agency may extend the 
        effectiveness of the designation and plan for an 
        additional 2-year period (that begins upon such 
        expiration) by submitting to the Secretary any 
        information needed to update the plan. The Secretary 
        may not limit the number of times a public housing 
        agency extends the effectiveness of a designation and 
        plan under this paragraph.
          [(3) Transition provision.--Any application and 
        allocation plan approved under this section (as in 
        effect before the date of the enactment of the Housing 
        Opportunity Program Extension Act of 1996) before such 
        date of enactment shall be considered to be a plan 
        under subsection (d) that is in effect for purposes of 
        this section for the 5-year period beginning upon such 
        approval.
  [(g) Inapplicability of Uniform Relocation Assistance and 
Real Property Acquisitions Policy Act of 1970.--No tenant of a 
public housing project shall be considered to be displaced for 
purposes of the Uniform Relocation Assistance and Real Property 
Acquisitions Policy Act of 1970 because of the designation of 
any existing project or building, or portion thereof, for 
occupancy as provided under subsection (a) of this section.
  [(h) Inapplicability to Indian Housing.--The provisions of 
this section shall not apply with respect to low-income housing 
developed or operated pursuant to a contract between the 
Secretary and an Indian housing authority.

                    [lower income housing assistance

  [Sec. 8. (a) For the purpose of aiding lower-income families 
in obtaining a decent place to live and of promoting 
economically mixed housing, assistance payments may be made 
with respect to existing housing in accordance with the 
provisions of this section. A public housing agency may 
contract to make assistance payments to itself (or any agency 
or instrumentality thereof) as the owner of dwelling units if 
such agency is subject to the same program requirements as are 
applied to other owners. In such cases, the Secretary may 
establish initial rents within applicable limits.
  [(b) Rental Certificates and Other Existing Housing 
Programs.--(1) The Secretary is authorized to enter into annual 
contributions contracts with public housing agenices pursuant 
to which such agencies may enter into contracts to make 
assistance payments to owners of existing dwelling units in 
accordance with this section. The Secretary shall enter into a 
separate annual contributions contract with each public housing 
agency to obligate the authority approved each year, beginning 
with the authority approved in appropriations Acts for fiscal 
year 1988 (other than amendment authority to increase 
assistance payments being made using authority approved prior 
to the appropriations Acts for fiscal year 1988), and such 
annual contributions contract (other than for annual 
contributions under subsection (o)) shall bind the Secretary to 
make such authority, and any amendments increasing such 
authority, available to the public housing agency for a 
specified period. In areas where no public housing agency has 
been organized or where the Secretary determines that a public 
housing agency is unable to implement the provisions of this 
section, the Secretary is authorized to enter into such 
contracts and to perform the other functions assigned to a 
public housing agency by this section.
  [(2) The Secretary is authorized to enter into annual 
contributions contracts with public housing agencies for the 
purpose of replacing public housing transferred in accordance 
with title III ofthis Act. Each contract entered into under 
this subsection shall be for a term of not more than 60 months.
  [(c)(1) An assistance contract entered into pursuant to this 
section shall establish the maximum monthly rent (including 
utilities and all maintenance and management charges) which the 
owner is entitled to receive for each dwelling unit with 
respect to which such assistance payments are to be made. The 
maximum monthly rent shall not exceed by more than 10 per 
centum the fair market rental established by the Secretary 
periodically but not less than annually for existing or newly 
constructed rental dwelling units of various sizes and types in 
the market area suitable for occupancy by persons assisted 
under this section, except that the maximum monthly rent may 
exceed the fair market rental (A) by more than 10 but not more 
than 20 per centum where the Secretary determines that special 
circumstances warrant such higher maximum rent or that such 
higher rent is necessary to the implementation of a housing 
strategy as defined in section 105 of the Cranston-Gonzalez 
National Affordable Housing Act, or (B) by such higher amount 
as may be requested by a tenant and approved by the public 
housing agency in accordance with paragraph (3)(B). In the case 
of newly constructed and substantially rehabilitated units, the 
exception in the preceding sentence shall not apply to more 
than 20 per centum of the total amount of authority to enter 
into annual contributions contracts for such units which is 
allocated to an area and obligated with respect to any fiscal 
year beginning on or after October 1, 1980. Proposed fair 
market rentals for an area shall be published in the Federal 
Register with reasonable time for public comment, and shall 
become effective upon the date of publication in final form in 
the Federal Register. Each fair market rental in effect under 
this subsection shall be adjusted to be effective on October 1 
of each year to reflect changes, based on the most recent 
available data trended so the rentals will be current for the 
year to which they apply, of rents for existing or newly 
constructed rental dwelling units, as the case may be, of 
various sizes and types in the market area suitable for 
occupancy by persons assisted under this section. 
Notwithstanding any other provision of this section, after the 
date of enactment of the Housing and Community Development Act 
of 1977, the Secretary shall prohibit high-rise elevator 
projects for families with children unless there is no 
practical alternative. The Secretary shall establish separate 
fair market rentals under this paragraph for Westchester County 
in the State of New York. The Secretary shall also establish 
separate fair market rentals under this paragraph for Monroe 
County in the Commonwealth of Pennsylvania. In establishing 
fair market rentals for the remaining portion of the market 
area in which Monroe County is located, the Secretary shall 
establish the fair market rentals as if such portion included 
Monroe County. If units assisted under this section are exempt 
from local rent control while they are so assisted or 
otherwise, the maximum monthly rent for such units shall be 
reasonable in comparison with other units in the market area 
that are exempt from local rent control.
  [(2)(A) The assistance contract shall provide for adjustment 
annually or more frequently in the maximum monthly rents for 
units covered by the contract to reflect changes in the fair 
marketrentals established in the housing area for similar types 
and sizes of dwelling units or, if the Secretary determines, on the 
basis of a reasonable formula. However, where the maximum monthly rent, 
for a unit in a new construction, substantial rehabilitation, or 
moderate rehabilitation project, to be adjusted using an annual 
adjustment factor exceeds the fair market rental for an existing 
dwelling unit in the market area, the Secretary shall adjust the rent 
only to the extent that the owner demonstrates that the adjusted rent 
would not exceed the rent for an unassisted unit of similar quality, 
type, and age in the same market area, as determined by the Secretary. 
The immediately foregoing sentence shall be effective only during 
fiscal year 1995, fiscal year 1996 prior to April 26, 1996, and fiscal 
year 1997. Except for assistance under the certificate program, for any 
unit occupied by the same family at the time of the last annual rental 
adjustment, where the assistance contract provides for the adjustment 
of the maximum monthly rent by applying an annual adjustment factor and 
where the rent for a unit is otherwise eligible for an adjustment based 
on the full amount of the factor, 0.01 shall be subtracted from the 
amount of the factor, except that the factor shall not be reduced to 
less than 1.0. In the case of assistance under the certificate program, 
0.01 shall be subtracted from the amount of the annual adjustment 
factor (except that the factor shall not be reduced to less than 1.0), 
and the adjusted rent shall not exceed the rent for a comparable 
unassisted unit of similar quality, type, and age in the market area. 
The immediately foregoing two sentences shall be effective only during 
fiscal year 1995, fiscal year 1996 prior to April 26, 1996, and fiscal 
year 1997.
  [(B) The contract shall further provide for the Secretary to 
make additional adjustments in the maximum monthly rent for 
units under contract to the extent he determines such 
adjustments are necessary to reflect increases in the actual 
and necessary expenses of owning and maintaining the units 
which have resulted from substantial general increases in real 
property taxes, utility rates, or similar costs which are not 
adequately compensated for by the adjustment in the maximum 
monthly rent authorized by subparagraph (A). The Secretary 
shall make additional adjustments in the maximum monthly rent 
for units under contract (subject to the availability of 
appropriations for contract amendments) to the extent the 
Secretary determines such adjustments are necessary to reflect 
increases in the actual and necessary expenses of owning and 
maintaining the units that have resulted from the expiration of 
a real property tax exemption. Where the Secretary determines 
that a project assisted under this section is located in a 
community where drug-related criminal activity is generally 
prevalent and the project's operating, maintenance, and capital 
repair expenses have been substantially increased primarily as 
a result of the prevalence of such drug-related activity, the 
Secretary may (at the discretion of the Secretary and subject 
to the availability of appropriations for contract amendments 
for this purpose), on a project by project basis, provide 
adjustments to the maximum monthly rents, to a level no greater 
than 120 percent of the project rents, to cover the costs of 
maintenance, security, capital repairs, and reserves required 
for the owner to carry out a strategy acceptable to the 
Secretary for addressing the problem of drug-related criminal 
activity. Any rent comparability standard required under this 
paragraph may be waived by the Secretary to so implement the 
preceding sentence. The Secretary may (at the discretion of the 
Secretary and subject to the availability of appropriations for 
contract amendments), on a project by project basis for 
projects receiving project-based assistance, provide 
adjustments to the maximum monthly rents to cover the costs of 
evaluating and reducing lead-based paint hazards, as defined in 
section 1004 of the Residential Lead-Based Paint Hazard 
Reduction Act of 1992.
  [(C) Adjustments in the maximum rents under subparagraphs (A) 
and (B) shall not result in material differences between the 
rents charged for assisted units and unassisted units of 
similar quality, type, and age in the same market area, as 
determined by the Secretary. In implementing the limitation 
established under the preceding sentence, the Secretary shall 
establish regulations for conducting comparability studies for 
projects where the Secretary has reason to believe that the 
application of the formula adjustments under subparagraph (A) 
would result in such material differences. The Secretary shall 
conduct such studies upon the request of any owner of any 
project, or as the Secretary determines to be appropriate by 
establishing, to the extent practicable, a modified annual 
adjustment factor for such market area, as the Secretary shall 
designate, that is geographically smaller than the applicable 
housing area used for the establishment of the annual 
adjustment factor under subparagraph (A). The Secretary shall 
establish such modified annual adjustment factor on the basis 
of the results of a study conducted by the Secretary of the 
rents charged, and any change in such rents over the previous 
year, for assisted units and unassisted units of similar 
quality, type, and age in the smaller market area. Where the 
Secretary determines that such modified annual adjustment 
factor cannot be established or that such factor when applied 
to a particular project would result in material differences 
between the rents charged for assisted units and unassisted 
units of similar quality, type, and age in the same market 
area, the Secretary may apply an alternative methodology for 
conducting comparability studies in order to establish rents 
that are not materially different from rents charged for 
comparable unassisted units. If the Secretary or appropriate 
State agency does not complete and submit to the project owner 
a comparability study not later than 60 days before the 
anniversary date of the assistance contract under this section, 
the automatic annual adjustment factor shall be applied. The 
Secretary may not reduce the contract rents in effect on or 
after April 15, 1987, for newly constructed, substantially 
rehabilitated, or moderately rehabilitated projects assisted 
under this section (including projects assisted under this 
section as in effect prior to November 30, 1983), unless the 
project has been refinanced in a manner that reduces the 
periodic payments of the owner. Any maximum monthly rent that 
has been reduced by the Secretary after April 14, 1987, and 
prior to the enactment of this sentence shall be restored to 
the maximum monthly rent in effect on April 15, 1987. For any 
project which has had its maximum monthly rents reduced after 
April 14, 1987, the Secretary shall make assistance payments 
(from amounts reserved for the originalcontract) to the owner 
of such project in an amount equal to the difference between the 
maximum monthly rents in effect on April 15, 1987, and the reduced 
maximum monthly rents, multiplied by the number of months that the 
reduced maximum monthly rents were in effect.
  [(3)(A) The amount of the monthly assistance payment with 
respect to any dwelling unit shall be the difference between 
the maximum monthly rent which the contract provides that the 
owner is to receive for the unit and the rent the family is 
required to pay under section 3(a) of this Act. Reviews of 
family income shall be made no less frequently than annually.
  [(B)(i) A family receiving tenant-based rental assistance 
under subsection (b)(1) may pay a higher percentage of income 
than that specified under section 3(a) of this Act if--
          [(I) the family notifies the local public housing 
        agency of its interest in a unit renting for an amount 
        which exceeds the permissible maximum monthly rent 
        established for the market area under paragraph (1), 
        and
          [(II) such agency determines that the rent for the 
        unit and the rental payments of the family are 
        reasonable, after taking into account other family 
        expenses (including child care, unreimbursed medical 
        expenses, and other appropriate family expenses).
  [(ii) A public housing agency shall not approve such excess 
rentals for more than 10 percent of its annual allocation of 
incremental rental assistance under subsection (b)(1). A public 
housing agency that approves such excess rentals for more than 
5 percent of its annual allocation shall submit a report to the 
Secretary not later than 30 days following the end of the 
fiscal year. The report shall be submitted in such form and in 
accordance with such procedures as the Secretary shall 
establish and shall describe the public housing agency's 
reasons for making the exceptions, including any available 
evidence that the exceptions were made necessary by problems 
with the fair market rent established for the area. The 
Secretary shall ensure that each report submitted in accordance 
with this clause is readily available for public inspection for 
a period of not less than 3 years, beginning not less than 30 
days following the date on which the report is submitted to the 
Secretary.
  [(iii) The Secretary shall, not later than 3 months following 
the end of each fiscal year, submit a report to Congress that 
identifies the public housing agencies that have submitted 
reports for such fiscal year under clause (ii), summarizes and 
assesses such reports, and includes recommendations for such 
legislative or administrative actions that the Secretary deems 
appropriate to correct problems identified in such reports.
  [(4) The assistance contract shall provide that assistance 
payments may be made only with respect to a dwelling unit under 
lease for occupancy by a family determined to be a lower income 
family at the time it initially occupied such dwelling unit or 
by a family that qualifies to receive assistance under 
subsection (b) pursuant to section 223 or 226 of the Low-Income 
Housing Preservation and Resident Homeownership Act of 1990, 
except that such payments may be made with respect to 
unoccupied units for a period not exceeding sixty days (A) in 
the event that a family vacates a dwelling unit before the 
expiration date of the lease for occupancy or (B) where a good 
faith effort is being made to fill an unoccupied unit, and, 
subject to the provisions of the following sentence, such 
payments may be made, in the case of a newly constructed or 
substantially rehabilitated project, after such sixty-day 
period in an amount equal to the debt service attributable to 
such an unoccupied dwelling unit for a period not to exceed one 
year, if a good faith effort is being made to fill the unit and 
the unit provides decent, safe, and sanitary housing. No such 
payment may be made after such sixty-day period if the 
Secretary determines that the dwelling unit is in a project 
which provides the owner with revenues exceeding the costs 
incurred by such owner with respect to such project.
  [(5) Assistance payments may be made with respect to up to 
100 per centum of the dwelling units in any structure upon the 
application of the owner or prospective owner. Within the 
category of projects containing more than fifty units and 
designed for use primarily for nonelderly and nonhandicapped 
persons which are not subject to mortgages purchased under 
section 305 of the National Housing Act, the Secretary may give 
preference to applications for assistance involving not more 
than 20 per centum of the dwelling units in a project. In 
according any such preference, the Secretary shall compare 
applications received during distinct time periods not 
exceeding sixty days in duration.
  [(6) The Secretary shall take such steps as may be necessary, 
including the making of contracts for assistance payments in 
amounts in excess of the amounts required at the time of the 
initial renting of dwelling units, the reservation of annual 
contributions authority for the purpose of amending housing 
assistance contracts, or the allocation of a portion of new 
authorizations for the purpose of amending housing assistance 
contracts, to assure that assistance payments are increased on 
a timely basis to cover increases in maximum monthly rents or 
decreases in family incomes.
  [(7) To the extent authorized in contracts entered into by 
the Secretary with a public housing agency, such agency may 
purchase any structure containing one or more dwelling units 
assisted under this section for the purpose of reselling the 
structure to the tenant or tenants occupying units aggregating 
in value at least 80 per centum of the structure's total value. 
Any such resale may be made on the terms and conditions 
prescribed under section 5(h) and subject to the limitation 
contained in such section.
  [(8) Each contract under this section (other than a contract 
for assistance under the certificate or voucher program) shall 
provide that the owner will notify tenants at least 90 days 
prior to the expiration of the contract of any rent increase 
which may occur as a result of the expiration of such contract.
  [(9) Not less than 1 year prior to terminating any contract 
under which assistance payments are received under this 
section, other than a contract under the certificate or voucher 
program, an owner shall provide written notice to the Secretary 
and the tenants involved of the proposed termination, 
specifying the reasons for the termination with sufficient 
detail to enable the Secretary to evaluate whether the 
termination is lawful and whether there are additional actions 
that can be taken by the Secretary to avoid the termination.The 
owner's notice shall include a statement that the owner and the 
Secretary may agree to a renewal of the contract, thus avoiding the 
termination. The Secretary shall review the owner's notice, shall 
consider whether there are additional actions that can be taken by the 
Secretary to avoid the termination, and shall ensure a proper 
adjustment of the contract rents for the project in conformity with the 
requirements of paragraph (2). The Secretary shall issue a written 
finding of the legality of the termination and the reasons for the 
termination, including the actions considered or taken to avoid the 
termination. Within 30 days of the Secretary's finding, the owner shall 
provide written notice to each tenant of the Secretary's decision. For 
purposes of this paragraph, the term ``termination'' means the 
expiration of the assistance contract or an owner's refusal to renew 
the assistance contract, and such term shall include termination of the 
contract for business reasons.
  [(10) If an owner provides notice of proposed termination 
under paragraph (9) and the contract rent is lower than the 
maximum monthly rent for units assisted under subsection 
(b)(1), the Secretary shall adjust the contract rent based on 
the maximum monthly rent for units assisted under subsection 
(b)(1) and the value of the low-income housing after 
rehabilitation.
  [(d)(1) Contracts to make assistance payments entered into by 
a public housing agency with an owner of existing housing units 
shall provide (with respect to any unit) that--
          [(A) the selection of tenants shall be the function 
        of the owner, subject to the provisions of the annual 
        contributions contract between the Secretary and the 
        agency, except that for the certificate and moderate 
        rehabilitation programs only, for the purpose of 
        selecting families to be assisted, the public housing 
        agency may establish, after public notice and an 
        opportunity for public comment, a written system of 
        preferences for selection that is not inconsistent with 
        the comprehensive housing affordability strategy under 
        title I of the Cranston-Gonzalez National Affordable 
        Housing Act;
          [(B)(i) the lease between the tenant and the owner 
        shall be for at least one year or the term of such 
        contract, whichever is shorter, and shall contain other 
        terms and conditions specified by the Secretary;
          [(ii) during the term of the lease, the owner shall 
        not terminate the tenancy except for serious or 
        repeated violation of the terms and conditions of the 
        lease, for violation of applicable Federal, State, or 
        local law, or for other good cause;
          [(iii) during the term of the lease, any criminal 
        activity that threatens the health, safety, or right to 
        peaceful enjoyment of the premises by other tenants, 
        any criminal activity that threatens the health, 
        safety, or right to peaceful enjoyment of their 
        residences by persons residing in the immediate 
        vicinity of the premises, or any drug-related criminal 
        activity on or near such premises, engaged in by a 
        tenant of any unit, any member of the tenant's 
        household, or any guest or other person under the 
        tenant's control, shall be cause for termination of 
        tenancy;
          [(iv) any termination of tenancy shall be preceded by 
        the owner's provision of written notice to the tenant 
        specifying the grounds for such action; and
          [(v) it shall be cause for termination of the tenancy 
        of a tenant if such tenant--
                  [(I) is fleeing to avoid prosecution, or 
                custody or confinement after conviction, under 
                the laws of the place from which the individual 
                flees, for a crime, or attempt to commit a 
                crime, which is a felony under the laws of the 
                place from which the individual flees, or 
                which, in the case of the State of New Jersey, 
                is a high misdemeanor under the laws of such 
                State; or
                  [(II) is violating a condition of probation 
                or parole imposed under Federal or State law;
          [(C) maintenance and replacement (including 
        redecoration) shall be in accordance with the standard 
        practice for the building concerned as established by 
        the owner and agreed to by the agency; and
          [(D) the agency and the owner shall carry out such 
        other appropriate terms and conditions as may be 
        mutually agreed to by them.
  [(2)(A) Each contract for an existing structure entered into 
under this section shall be for a term of not less than one 
month nor more than one hundred and eighty months. The 
Secretary shall permit public housing agencies to enter into 
contracts for assistance payments of less than 12 months 
duration in order to avoid disruption in assistance to eligible 
families if the annual contributions contract is within 1 year 
of its expiration date. Where the Secretary enters into an 
annual contributions contract with a public housing agency 
pursuant to which the agency will enter into a contract for 
assistance payments with respect to an existing structure, the 
contract for assistance payments may not be attached to the 
structure unless (i) the Secretary and the public housing 
agency approve such action, and (ii) the owner agrees to 
rehabilitate the structure other than with assistance under 
this Act and otherwise complies with the requirements of this 
section, except that the Secretary shall permit the public 
housing agency to approve such attachment with respect to not 
more than 15 percent of the assistance provided by the public 
housing agency if the requirements of clause (ii) are met. 
Notwithstanding any other provision of this section, a public 
housing agency and an applicable State agency may, on a 
priority basis, attach to structures not more than an 
additional 15 percent of the assistance provided by the public 
housing agency or the applicable State agency only with respect 
to projects assisted under a State program that permits the 
owner of the projects to prepay a State assisted or subsidized 
mortgage on the structure, except that attachment of assistance 
under this sentence shall be for the purpose of (i) providing 
incentives to owners to preserve such projects for occupancy by 
lower and moderate income families (for the period that 
assistance under this sentence is available), and (ii) to 
assist lower income tenants to afford any increases in rent 
that may be required to induce the owner to maintain occupancy 
in the project by lower and moderate income tenants.
  [(B) The Secretary shall permit any public housing agency to 
approve the attachment of assistance under subsection (b)(1) 
with respect to any newly constructed structure if--
          [(i) the owner or prospective owner agrees to 
        construct the structure other than with assistance 
        under this Act and otherwise complies with the 
        requirements of this section; and
          [(ii) the aggregate assistance provided by the public 
        housing agency pursuant to this subparagraph and the 
        last sentence of subparagraph (A) does not exceed 15 
        percent of the assistance provided by the public 
        housing agency.
  [(C) In the case of a contract for assistance payments that 
is attached to a structure under this paragraph, a public 
housing agency shall enter into a contract with an owner, 
contingent upon the future availability of appropriations for 
the purpose of renewing expiring contracts for assistance 
payments as provided in appropriations Acts, to extend the term 
of the underlying contract for assistance payments for such 
period or periods as the Secretary determines to be appropriate 
to achieve long-term affordability of the housing. The contract 
shall obligate the owner to have such extensions of the 
underlying contract for assistance payments accepted by the 
owner and the owner's successors in interest. To the extent 
assistance is used as provided in the penultimate sentence of 
subparagraph (A), the contract for assistance may, at the 
option of the public housing agency, have an initial term not 
exceeding 15 years.
  [(D) Where a contract for assistance payments is attached to 
a structure, the owner shall adopt written tenant selection 
procedures that are satisfactory to the Secretary as (i) 
consistent with the purpose of improving housing opportunities 
for very low-income families; and (ii) reasonably related to 
program eligibility and an applicant's ability to perform the 
obligations of the lease. An owner shall promptly notify in 
writing any rejected applicant of the grounds for any 
rejection.
  [(E) The Secretary shall annually survey public housing 
agencies to determine which public housing agencies have, in 
providing assistance in such year, reached the 15 percent 
limitations contained in subparagraphs (A) and (B), and shall 
report to the Congress on the results of such survey.
  [(F)(i) In determining the amount of assistance provided 
under an assistance contract for project-based assistance under 
this paragraph or a contract for assistance for housing 
constructed or substantially rehabilitated pursuant to 
assistance provided under section 8(b)(2) of this Act (as such 
section existed immediately before October 1, 1983), the 
Secretary may consider and annually adjust, with respect to 
such project, for the cost of employing or otherwise retaining 
the services of one or more service coordinators under section 
661 of the Housing and Community Development Act of 1992 to 
coordinate the provision of any services within the project for 
residents of the project who are elderly or disabled families.
  [(ii) The budget authority available under section 5(c) for 
assistance under this section is authorized to be increased by 
$15,000,000 on or after October 1, 1992, and by $15,000,000 on 
or after October 1, 1993. Amounts made available under this 
subparagraph shall be used to provide additional amounts under 
annual contributions contracts for assistance under this 
section which shall be made available through assistance 
contracts only for the purpose of providing service 
coordinators under clause (i) for projects receiving project-
based assistance under this paragraph and to provide additional 
amounts under contracts for assistance for projects constructed 
or substantially rehabilitated pursuant to assistance provided 
under section 8(b)(2) of this Act (as such section existed 
immediately before October 1, 1983) only for such purpose.
  [(G) An assistance contract for project-based assistance 
under this paragraph shall provide that the owner shall ensure 
and maintain compliance with subtitle C of title VI of the 
Housing and Community Development Act of 1992 and any 
regulations issued under such subtitle.
  [(H) An owner of a covered section 8 housing project (as such 
term is defined in section 659 of the Housing and Community 
Development Act of 1992) may give preference for occupancy of 
dwelling units in the project, and reserve units for occupancy, 
in accordance with subtitle D of title VI of the Housing and 
Community Development Act of 1992.
  [(3) Notwithstanding any other provision of law, with the 
approval of the Secretary the public housing agency 
administering a contract under this section with respect to 
existing housing units may exercise all management and 
maintenance responsibilities with respect to those units 
pursuant to a contract between such agency and the owner of 
such units.
  [(4) A public housing agency that serves more than one unit 
of general local government may, at the discretion of the 
agency, in allocating assistance under this section, give 
priority to disabled families that are not elderly families.
  [(e)(1) Nothing in this Act shall be deemed to prohibit an 
owner from pledging, or offering as security for any loan or 
obligation, a contract for assistance payments entered into 
pursuant to this section: Provided, That such security is in 
connection with a project constructed or rehabilitated pursuant 
to authority granted in this section, and the terms of the 
financing or any refinancing have been approved by the 
Secretary.
  [(f) As used in this section--
          [(1) the term ``owner'' means any private person or 
        entity, including a cooperative, an agency of the 
        Federal Government, or a public housing agency, having 
        the legal right to lease or sublease dwelling units;
          [(2) the terms ``rent'' or ``rental'' mean, with 
        respect to members of a cooperative, the charges under 
        the occupancy agreements between such members and the 
        cooperative;
          [(3) the term ``debt service'' means the required 
        payments for principal and interest made with respect 
        to a mortgage secured by housing assisted under this 
        Act;
          [(4) the term ``participating jurisdiction'' means a 
        State or unit of general local government designated by 
        the Secretary to be a participating jurisdiction under 
        title II of the Cranston-Gonzalez National Affordable 
        Housing Act;
          [(5) the term ``drug-related criminal activity'' 
        means the illegal manufacture, sale, distribution, use, 
        or possession with intent to manufacture, sell, 
        distribute, or use, of a controlledsubstance (as 
defined in section 102 of the Controlled Substances Act (21 U.S.C. 
802));
          [(6) the term ``project-based assistance'' means 
        rental assistance under subsection (b) that is attached 
        to the structure pursuant to subsection (d)(2); and
          [(7) the term ``tenant-based assistance'' means 
        rental assistance under subsection (b) or (o) that is 
        not project-based assistance.
  [(g) Notwithstanding any other provision of this Act, 
assistance payments under this section may be provided, in 
accordance with regulations prescribed by the Secretary, with 
respect to some or all of the units in any project approved 
pursuant to section 202 of the Housing Act of 1959.
  [(h) Sections 5(e) and 6 and any other provisions of this Act 
which are inconsistent with the provisions of this section 
shall not apply to contracts for assistance entered into under 
this section.
  [(i) The Secretary may not consider the receipt by a public 
housing agency of assistance under section 811(b)(1) of the 
Cranston-Gonzalez National Affordable Housing Act, or the 
amount received, in approving assistance for the agency under 
this section or determining the amount of such assistance to be 
provided.
  [(j)(1) The Secretary may enter into contracts to make 
assistance payments under this subsection to assist low-income 
families by making rental assistance payments on behalf of any 
such family which utilizes a manufactured home as its principal 
place of residence. Such payments may be made with respect to 
the rental of the real property on which there is located a 
manufactured home which is owned by any such family or with 
respect to the rental by such family of a manufactured home and 
the real property on which it is located. In carrying out this 
subsection, the Secretary may--
          [(A) enter into annual contributions contracts with 
        public housing agencies pursuant to which such agencies 
        may enter into contracts to make such assistance 
        payments to the owners of such real property, or
          [(B) enter into such contracts directly with the 
        owners of such real property.
  [(2)(A) A contract entered into pursuant to this paragraph 
shall establish the maximum monthly rent (including maintenance 
and management charges) which the owner is entitled to receive 
for the space on which a manufactured home is located and with 
respect to which assistance payments are to be made. The 
maximum monthly rent shall not exceed by more than 10 per 
centum the fair market rental established by the Secretary 
periodically (but not less than annually) with respect to the 
market area for the rental of real property suitable for 
occupancy by families assisted under this paragraph.
  [(B) The amount of any monthly assistance payment with 
respect to any family which rents real property which is 
assisted under this paragraph, and on which is located a 
manufactured home which is owned by such family shall be the 
difference between the rent the family is required to pay under 
section 3(a) of this Act and the sum of--
          [(i) the monthly payment made by such family to 
        amortize the cost of purchasing the manufactured home;
          [(ii) the monthly utility payments made by such 
        family, subject to reasonable limitations prescribed by 
        the Secretary; and
          [(iii) the maximum monthly rent permitted with 
        respect to the real property which is rented by such 
        family for the purpose of locating its manufactured 
        home;
except that in no case may such assistance exceed the total 
amount of such maximum monthly rent.
  [(3)(A) Contracts entered into pursuant to this paragraph 
shall establish the maximum monthly rent permitted with respect 
to the manufactured home and the real property on which it is 
located and with respect to which assistance payments are to be 
made. The maximum monthly rent shall not exceed by more than 10 
per centum the fair market rental established by the Secretary 
periodically (but not less than annually) with respect to the 
market area for the rental of a manufactured home and the real 
property on which it is located suitable for occupancy by 
families assisted under this paragraph, except that the maximum 
monthly rent may exceed the fair market rental by more than 10 
but not more than 20 per centum where the Secretary determines 
that special circumstances warrant such higher maximum rent.
  [(B) The amount of any monthly assistance payment with 
respect to any family which rents a manufactured home and the 
real property on which it is located and which is assisted 
under this paragraph shall be the difference between the rent 
the family is required to pay under section 3(a) of this Act 
and the sum of--
          [(i) the monthly utility payments made by such 
        family, subject to reasonable limitations prescribed by 
        the Secretary; and
          [(ii) the maximum monthly rent permitted with respect 
        to the manufactured home and real property on which it 
        is located.
  [(4) The provisions of subsection (c)(2) of this section 
shall apply to the adjustments of maximum monthly rents under 
the subsection.
  [(5) Each contract entered into under the subsection shall be 
for a term of not less than one month and not more than 180 
months, except that in any case in which the manufactured home 
park is substantially rehabilitated or newly constructed, such 
term may not be less than 240 months, nor more than the maximum 
term for a manufactured home loan permitted under section 2(b) 
of the National Housing Act.
  [(6) The Secretary may carry out this subsection without 
regard to whether the manufactured home park is existing, 
substantially rehabilitated, or newly constructed.
  [(7) In the case of any substantially rehabilitated or newly 
constructed manufactured home park containing spaces with 
respect to which assistance is made under this subsection, the 
principal amount of the mortgage attributable to the rental 
spaces within the park may not exceed an amount established by 
the Secretary which is equal to or less than the limitation for 
manufactured home parks described in section 207(c)(3) of the 
National Housing Act, and the Secretary may increase such 
limitation in high cost areas in the manner described in such 
section.
  [(8) The Secretary may prescribe other terms and conditions 
which are necessary for the purpose of carrying out the 
provisions of this subsection and which are consistent with the 
purposes of this subsection.
  [(k) The Secretary shall establish procedures which are 
appropriate and necessary to assure that income data provided 
to public housing agencies and owners by families applying for 
or receiving assistance under this section is complete and 
accurate. In establishing such procedures, the Secretary shall 
randomly, regularly, and periodically select a sample of 
families to authorize the Secretary to obtain information on 
these families for the purpose of income verification, or to 
allow those families to provide such information themselves. 
Such information may include, but is not limited to, data 
concerning unemployment compensation and Federal income 
taxation and data relating to benefits made available under the 
Social Security Act, the Food Stamp Act of 1977, or title 38, 
United States Code. Any such information received pursuant to 
this subsection shall remain confidential and shall be used 
only for the purpose of verifying incomes in order to determine 
eligibility of families for benefits (and the amount of such 
benefits, if any) under this section.
  [(n) In making assistance available under subsections (b)(1) 
and (e)(2), the Secretary may provide assistance with respect 
to residential properties in which some or all of the dwelling 
units do not contain bathroom or kitchen facilities, if--
          [(1) the property is located in an area in which 
        there is a significant demand for such units, as 
        determined by the Secretary;
          [(2) the unit of general local government in which 
        the property is located and the local public housing 
        agency approve of such units being utilized for such 
        purpose; and
          [(3) in the case of assistance under subsection 
        (b)(1), the unit of general local government in which 
        the property is located and the local public housing 
        agency certify to the Secretary that the property 
        complies with local health and safety standards.
The Secretary may waive, in appropriate cases, the limitation 
and preference described in the second and third sentences of 
section 3(b)(3) with respect to the assistance made available 
under this subsection.
  [(o) Rental Vouchers.--(1) The Secretary may provide 
assistance using a payment standard in accordance with this 
subsection. The payment standard shall be used to determine the 
monthly assistance which may be paid for any family, as 
provided in paragraph (2) of this subsection, and shall be 
based on the fair market rental established under subsection 
(c).
  [(2) The monthly assistance payment for any family shall be 
the amount by which the payment standard for the area exceeds 
30 per centum of the family's monthly adjusted income, except 
that such monthly assistance payment shall not exceed the 
amount by which the rent for the dwelling unit (including the 
amount allowedfor utilities in the case of a unit with separate 
utility metering) exceeds 10 per centum of the family's monthly income.
  [(3)(A) Assistance payments may be made only for (i) a family 
determined to be a very low-income family at the time it 
initially receives assistance, (ii) a family previously 
assisted under this Act, (iii) a family that is determined to 
be a low-income family at the time it initially receives 
assistance and that is displaced by activities under section 
17(c), (iv) a family that qualifies to receive a voucher in 
connection with a homeownership program approved under title IV 
of the Cranston-Gonzalez National Affordable Housing Act, or 
(v) a family that qualifies to receive a voucher under section 
223 or 226 of the Low-Income Housing Preservation and Resident 
Homeownership Act of 1990.
  [(B) For the purpose of selecting families to be assisted 
under this subsection, the public housing agency may establish, 
after public notice and an opportunity for public comment, a 
written system of preferences for selection that is not 
inconsistent with the comprehensive housing affordability 
strategy under title I of the Cranston-Gonzalez National 
Affordable Housing Act.
  [(4) If a family vacates a dwelling unit before the 
expiration of a lease term, no assistance payment may be made 
with respect to the unit after the month during which the unit 
was vacated.
  [(5) A contract with a public housing agency for annual 
contributions under this subsection shall be for an initial 
term of sixty months. The Secretary shall require (with respect 
to any unit) that (A) the public housing agency inspect the 
unit before any assistance payment may be made to determine 
that it meets housing quality standards for decent, safe, and 
sanitary housing established by the Secretary for the purpose 
of this section, and (B) the public housing agency make annual 
or more frequent inspections during the contract term. No 
assistance payment may be made for a dwelling unit which fails 
to meet such quality standards, unless any such failure is 
promptly corrected by the owner and the correction verified by 
the public housing agency.
  [(6)(A) The amount of assistance payments under this 
subsection may, in the discretion of the public housing agency, 
be adjusted annually where necessary to assure continued 
affordability. The aggregate amount of adjustments pursuant to 
the preceding sentence may not exceed the amount of any excess 
of the annual contributions provided for in the contract over 
the amount of assistance payments actually paid (including 
amounts which otherwise become available during the contract 
period).
  [(B) For the purpose of subparagraph (A), each contract with 
a public housing agency for annual contributions under this 
subsection shall provide annual contributions equal to 115 per 
centum of the estimated aggregate amount of assistance required 
during the first year of the contract.
  [(C) Any amounts not needed for adjustments under 
subparagraph (A) may be used to provide assistance payments for 
additional families.
  [(7) A public housing agency may utilize authority available 
under this subsection to provide assistance with respect to 
cooperative or mutual housing which has a resale structure 
which maintains affordability for low-income families where the 
agency determines such action will assist in maintaining the 
affordability of such housing for such families.
  [(8) The Secretary may set aside up to 5 percent of the 
budget authority available under this subsection as an 
adjustment pool. The Secretary shall use amounts in the 
adjustment pool for adjustments pursuant to paragraph (6)(A) to 
ensure continued affordability where the Secretary determines 
additional assistance for this purpose is necessary, based on 
documentation submitted by a public housing agency.
  [(9) The Secretary is authorized to enter into contracts with 
public housing agencies to provide rental vouchers for the 
purpose of replacing public housing transferred in accordance 
with title III of this Act. Each contract entered into under 
this paragraph shall be for a term of not more than 60 months.
  [(10)(A) The rent for units assisted under this subsection 
shall be reasonable in comparison with rents charged for 
comparable units in the private unassisted market or assisted 
under section (b). A public housing agency shall, at the 
request of a family assisted under this subsection, assist such 
family in negotiating a reasonable rent with an owner. A public 
housing agency shall review all rents for units under 
consideration by families assisted under this subsection (and 
all rent increases for units under lease by families assisted 
under this subsection) to determine whether the rent (or rent 
increase) requested by an owner is reasonable. If a public 
housing agency determines that the rent (or rent increase) for 
a unit is not reasonable, the agency may disapprove a lease for 
such unit.
  [(11)(A) The Secretary may enter into contracts to make 
assistance payments under this paragraph to assist low-income 
families by making rental assistance payments on behalf of any 
such family which utilizes a manufactured home as its principal 
place of residence. Such payments may be made with respect to 
the rental of the real property on which there is located a 
manufactured home which is owned by any such family. In 
carrying out this paragraph the Secretary shall enter into 
annual contributions contracts with public housing agencies 
pursuant to which such agencies may enter into contracts to 
make such assistance payments to the owners of such real 
property.
  [(B)(i) A contract entered into pursuant to this subparagraph 
shall establish the rent (including maintenance and management 
charges) for the space on which a manufactured home is located 
and with respect to which assistance payments are to be made. 
The public housing agency shall establish a payment standard 
based on the fair market rental established by the Secretary 
periodically (but not less than annually) with respect to the 
market area for the rental of real property suitable for 
occupancy by families assisted under this subparagraph.
  [(ii) The amount of any monthly assistance payment with 
respect to any family which rents real property which is 
assisted under this subparagraph and on which is located a 
manufactured home which is owned by such family shall be the 
amount by which 30 percent of the family's monthly adjusted 
income is exceeded by the sum of--
          [(I) the monthly payment made by such family to 
        amortize the cost of purchasing the manufactured home;
          [(II) the monthly utility payments made by such 
        family, subject to reasonable limitations prescribed by 
        the Secretary; and
          [(III) the payment standard with respect to the real 
        property which is rented by such family for the purpose 
        of locating its manufactured home;
except that in no case may such assistance exceed the amount by 
which the rent for the property exceeds 10 percent of the 
family's monthly income.
  [(C) The provisions of paragraph (6)(A) shall apply to the 
adjustments of maximum monthly rents under this paragraph.
  [(D) The Secretary may carry out this paragraph without 
regard to whether the manufactured home park is existing, 
substantially rehabilitated, or newly constructed.
  [(E) In the case of any substantially rehabilitated or newly 
constructed manufactured home park containing spaces with 
respect to which assistance is made under this paragraph, the 
principal amount of the mortgage attributable to the rental 
spaces within the park may not exceed an amount established by 
the Secretary which is equal to or less than the limitation for 
manufactured home parks described in section 207(c)(3) of the 
National Housing Act, and the Secretary may increase such 
limitation in high cost areas in the manner described in such 
section.
  [(F) The Secretary may prescribe other terms and conditions 
which are necessary for the purpose of carrying out the 
provisions of this paragraph and which are consistent with the 
purposes of this paragraph.
  [(p) In order to assist elderly families (as defined in 
section 3(b)(3)) who elect to live in a shared housing 
arrangement in which they benefit as a result of sharing the 
facilities of a dwelling with others in a manner that 
effectively and efficiently meets their housing needs and 
thereby reduces their costs of housing, the Secretary shall 
permit assistance provided under the existing housing and 
moderate rehabilitation programs to be used by such families in 
such arrangements. In carrying out this subsection, the 
Secretary shall issue minimum habitability standards for the 
purpose of assuring decent, safe, and sanitary housing for such 
families while taking into account the special circumstances of 
shared housing.
  [(q)(1) The Secretary shall establish a fee for the costs 
incurred in administering the certificate and housing voucher 
programs under subsections (b) and (o). The amount of the fee 
for each month for which a dwelling unit is covered by an 
assistance contract shall be 8.2 percent of the fair market 
rental established under subsection (c)(1) for a 2-bedroom 
existing rental dwelling unit in the market area of the public 
housing agency. The Secretary may increase the fee if necessary 
to reflect the higher costs of administering small programs and 
programs operating over large geographic areas.
  [(2)(A) The Secretary shall also establish reasonable fees 
(as determined by the Secretary) for--
          [(i) the costs of preliminary expenses (not to exceed 
        $275) that the public housing agency documents it has 
        incurred in connection with new allocations of 
        assistance under the certificate and housing voucher 
        programs under subsections (b) and (o);
          [(ii) the costs incurred in assisting families who 
        experience difficulty (as determined by the Secretary) 
        in obtaining appropriate housing under the programs; 
        and
          [(iii) extraordinary costs approved by the Secretary.
  [(B) The method used to calculate fees under subparagraph (A) 
shall be the same for the certificate and housing voucher 
programs under subsections (b) and (o) and shall take into 
account local cost differences.
  [(3)(A) Fees under this subsection may be used for the costs 
of employing or otherwise retaining the services of one or more 
service coordinators under section 661 of the Housing and 
Community Development Act of 1992 to coordinate the provision 
of supportive services for elderly families and disabled 
families on whose behalf tenant-based assistance is provided 
under this section or section 811(b)(1). Such service 
coordinators shall have the same responsibilities with respect 
to such families as service coordinators of covered federally 
assisted housing projects have under section 661 of such Act 
with respect to residents of such projects.
   [(B) To the extent amounts are provided in appropriation 
Acts under subparagraph (C), the Secretary shall increase fees 
under this subsection to provide for the costs of such service 
coordinators for public housing agencies.
  [(C) The budget authority available under section 5(c) for 
assistance under this section is authorized to be increased by 
$5,000,000 on or after October 1, 1992, and by $5,000,000 on or 
after October 1, 1993. Amounts made available under this 
subparagraph shall be used to provide additional amounts under 
annual contributions contracts for increased fees under this 
subsection, which shall be used only for the purpose of 
providing service coordinators for public housing agencies 
described in subparagraph (A).
  [(4) The Secretary may establish or increase a fee in 
accordance with this subsection only to such extent or in such 
amounts as are provided in appropriation Acts.
  [(r)(1) Any family assisted under subsection (b) or (o) may 
receive such assistance to rent an eligible dwelling unit if 
the dwelling unit to which the family moves is within the same 
State, or the same or a contiguous metropolitan statistical 
area as the metropolitan statistical area within which is 
located the area of jurisdiction of the public housing agency 
approving such assistance; except that any family not living 
within the jurisdiction of a public housing agency at the time 
that such family applies for assistance from such agency shall, 
during the 12-month period beginning upon the receipt of any 
tenant-based rental assistance made available on behalf of the 
family, use such assistance to rent an eligible dwelling unit 
located within the jurisdiction served by such public housing 
agency.
  [(2) The public housing agency having authority with respect 
to the dwelling unit to which a family moves under this 
subsection shall have the responsibility of carrying out the 
provisions of this subsection with respect to the family. If no 
public housing agency has authority with respect to the 
dwelling unit to which a familymoves under this subsection, the 
public housing agency approving the assistance shall have such 
responsibility.
  [(3) In providing assistance under subsection (b) or (o) for 
any fiscal year, the Secretary shall give consideration to any 
reduction in the number of resident families incurred by a 
public housing agency in the preceding fiscal year as a result 
of the provisions of this subsection.
  [(4) The provisions of this subsection may not be construed 
to restrict any authority of the Secretary under any other 
provision of law to provide for the portability of assistance 
under this section.
  [(s) In selecting families for the provision of assistance 
under this section (including subsection (o)), a public housing 
agency may not exclude or penalize a family solely because the 
family resides in a public housing project.
  [(u) In the case of low-income families living in rental 
projects rehabilitated under section 17 of this Act or section 
533 of the Housing Act of 1949 before rehabilitation--
          [(1) certificates or vouchers under this section 
        shall be made for families who are required to move out 
        of their units because of the physical rehabilitation 
        activities or because of overcrowding;
          [(2) at the discretion of each public housing agency 
        or other agency administering the allocation of 
        assistance, certificates or vouchers under this section 
        may be made for families who would have to pay more 
        than 30 percent of their adjusted income for rent after 
        rehabilitation whether they choose to remain in, or to 
        move from, the project; and
          [(3) the Secretary shall allocate assistance for 
        certificates or vouchers under this section to ensure 
        that sufficient resources are available to address the 
        physical or economic displacement, or potential 
        economic displacement, of existing tenants pursuant to 
        paragraphs (1) and (2).
  [The Secretary may extend expiring contracts entered into 
under this section for project-based loan management assistance 
to the extent necessary to prevent displacement of low-income 
families receiving such assistance as of September 30, 1996.
  [(w) Renewal of Expiring Contracts.--Not later than 30 days 
after the beginning of each fiscal year, the Secretary shall 
publish in the Federal Register a plan for reducing, to the 
extent feasible, year-to-year fluctuations in the levels of 
budget authority that will be required over the succeeding 5-
year period to renew expiring rental assistance contracts 
entered into under this section since the enactment of the 
Housing and Community Development Act of 1974. To the extent 
necessary to carry out such plan and to the extent approved in 
appropriations Acts, the Secretary is authorized to enter into 
annual contributions contracts with terms of less than 60 
months.
  [(x) Family Unification.--
          [(1) Increase in budget authority.--The budget 
        authority available under section 5(c) for assistance 
        under section 8(b) is authorized to be increased by 
        $100,000,000 on or after October 1, 1992, and by 
        $104,200,000 on or after October 1, 1993.
          [(2) Use of funds.--The amounts made available under 
        this subsection shall be used only in connection with 
        housing certificate assistance under section 8 on 
        behalf of any family (A) who is otherwise eligible for 
        such assistance, and (B) who the public child welfare 
        agency for the jurisdiction has certified is a family 
        for whom the lack of adequate housing is a primary 
        factor in the imminent placement of the family's child 
        or children in out-of-home care or the delayed 
        discharge of a child or children to the family from 
        out-of-home care.
          [(3) Allocation.--The amounts made available under 
        this subsection shall be allocated by the Secretary 
        through a national competition among applicants based 
        on demonstrated need for assistance under this 
        subsection. To be considered for assistance, an 
        applicant shall submit to the Secretary a written 
        proposal containing a report from the public child 
        welfare agency serving the jurisdiction of the 
        applicant that describes how a lack of adequate housing 
        in the jurisdiction is resulting in the initial or 
        prolonged separation of children from their families, 
        and how the applicant will coordinate with the public 
        child welfare agency to identify eligible families and 
        provide the families with assistance under this 
        subsection.
          [(4) Definitions.--For purposes of this subsection:
                  [(A) Applicant.--The term ``applicant'' means 
                a public housing agency or any other agency 
                responsible for administering assistance under 
                section 8.
                  [(B) Public child welfare agency.--The term 
                ``public child welfare agency'' means the 
                public agency responsible under applicable 
                State law for determining that a child is at 
                imminent risk of placement in out-of-home care 
                or that a child in out-of-home care under the 
                supervision of the public agency may be 
                returned to his or her family.
  [(y) Homeownership Option.--
          [(1) Use of assistance for homeownership.--A family 
        receiving tenant-based assistance under this section 
        may receive assistance for occupancy of a dwelling 
        owned by one or more members of the family if the 
        family--
                  [(A) is a first-time homeowner;
                  [(B)(i) participates in the family self-
                sufficiency program under section 23 of the 
                public housing agency providing the assistance; 
                or
                  [(ii) demonstrates that the family has income 
                from employment or other sources (other than 
                public assistance), as determined in accordance 
                with requirements of the Secretary, that is not 
                less than twice the payment standard 
                established by the public housing agency (or 
                such other amount as may be established by the 
                Secretary);
                  [(C) except as provided by the Secretary, 
                demonstrates at the time the family initially 
                receives tenant-based assistance under this 
                subsection that one or more adult members of 
                the family have achieved employment for the 
                period as the Secretary shall require;
                  [(D) participates in a homeownership and 
                housing counseling program provided by the 
                agency; and
                  [(E) meets any other initial or continuing 
                requirements established by the public housing 
                agency in accordance with requirements 
                established by the Secretary.
          [(2) Monthly assistance payment.--
                  [(A) In general.--Notwithstanding any other 
                provisions of this section governing 
                determination of the amount of assistance 
                payments under this section on behalf of a 
                family, the monthly assistance payment for any 
                family assisted under this subsection shall be 
                the amount by which the fair market rental for 
                the area established under subsection (c)(1) 
                exceeds 30 percent of the family's monthly 
                adjusted income; except that the monthly 
                assistance payment shall not exceed the amount 
                by which the monthly homeownership expenses, as 
                determined in accordance with requirements 
                established by the Secretary, exceeds 10 
                percent of the family's monthly income.
                  [(B) Exclusion of equity from income.--For 
                purposes of determining the monthly assistance 
                payment for a family, the Secretary shall not 
                include in family income an amount imputed from 
                the equity of the family in a dwelling occupied 
                by the family with assistance under this 
                subsection.
          [(3) Recapture of certain amounts.--Upon sale of the 
        dwelling by the family, the Secretary shall recapture 
        from any net proceeds the amount of additional 
        assistance (as determined in accordance with 
        requirements established by the Secretary) paid to or 
        on behalf of the eligible family as a result of 
        paragraph (2)(B).
          [(4) Downpayment requirement.--Each public housing 
        agency providing assistance under this subsection shall 
        ensure that each family assisted shall provide from its 
        own resources not less than 80 percent of any 
        downpayment in connection with a loan made for the 
        purchase of a dwelling. Such resources may include 
        amounts from any escrow account for the family 
        established under section 23(d). Not more than 20 
        percent of the downpayment may be provided from other 
        sources, such as from nonprofit entities and programs 
        of States and units of general local government.
          [(5) Ineligibility under other programs.--A family 
        may not receive assistance under this subsection during 
        any period when assistance is being provided for the 
        family under other Federal homeownership assistance 
        programs, as determined by the Secretary, including 
        assistance under the HOME Investment Partnerships Act, 
        the Homeownership and Opportunity Through HOPE Act, 
        title II of the Housing and Community Development Act 
        of 1987, and section 502 of the Housing Act of 1949.
          [(6) Inapplicability of certain provisions.--
        Assistance under this subsection shall not be subject 
        to the requirements of the following provisions:
                  [(A) Subsection (c)(3)(B) of this section.
                  [(B) Subsection (d)(1)(B)(i) of this section.
                  [(C) Any other provisions of this section 
                governing maximum amounts payable to owners and 
                amounts payable by assisted families.
                  [(D) Any other provisions of this section 
                concerning contracts between public housing 
                agencies and owners.
                  [(E) Any other provisions of this Act that 
                are inconsistent with the provisions of this 
                subsection.
          [(7) Reversion to rental status.--
                  [(A) FHA-insured mortgages.--If a family 
                receiving assistance under this subsection for 
                occupancy of a dwelling defaults under a 
                mortgage for the dwelling insured by the 
                Secretary under the National Housing Act, the 
                family may not continue to receive rental 
                assistance under this section unless the family 
                (i) transfers to the Secretary marketable title 
                to the dwelling, (ii) moves from the dwelling 
                within the period established or approved by 
                the Secretary, and (iii) agrees that any 
                amounts the family is required to pay to 
                reimburse the escrow account under section 
                23(d)(3) may be deducted by the public housing 
                agency from the assistance payment otherwise 
                payable on behalf of the family.
                  [(B) Other mortgages.--If a family receiving 
                assistance under this subsection defaults under 
                a mortgage not insured under the National 
                Housing Act, the family may not continue to 
                receive rental assistance under this section 
                unless it complies with requirements 
                established by the Secretary.
                  [(C) All mortgages.--A family receiving 
                assistance under this subsection that defaults 
                under a mortgage may not receive assistance 
                under this subsection for occupancy of another 
                dwelling owned by one or more members of the 
                family.
          [(8) Definition of first-time homeowner.--For 
        purposes of this subsection, the term ``first-time 
        homeowner'' means--
                  [(A) a family, no member of which has had a 
                present ownership interest in a principal 
                residence during the 3 years preceding the date 
                on which the family initially receives 
                assistance for homeownership under this 
                subsection; and
                  [(B) any other family, as the Secretary may 
                prescribe.
  [(aa) Refinancing Incentive.--
          [(1) In general.--The Secretary may pay all or a part 
        of the up front costs of refinancing for each project 
        that--
                  [(A) is constructed, substantially 
                rehabilitated, or moderately rehabilitated 
                under this section;
                  [(B) is subject to an assistance contract 
                under this section; and
                  [(C) was subject to a mortgage that has been 
                refinanced under section 223(a)(7) or section 
                223(f) of the National Housing Act to lower the 
                periodic debt service payments of the owner.
          [(2) Share from reduced assistance payments.--The 
        Secretary may pay the up front cost of refinancing 
        only--
                  [(A) to the extent that funds accrue to the 
                Secretary from the reduced assistance payments 
                that results from the refinancing; and
                  [(B) after the application of amounts in 
                accordance with section 1012 of the Stewart B. 
                McKinney Homeless Assistance Amendments Act of 
                1988.
  [(z) Termination of Section 8 Contracts and Reuse of 
Recaptured Budget Authority.--
          [(1) General authority.--The Secretary may reuse any 
        budget authority, in whole or part, that is recaptured 
        on account of termination of a housing assistance 
        payments contract (other than a contract for tenant-
        based assistance) only for one or more of the 
        following:
                  [(A) Tenant-based assistance.--Pursuant to a 
                contract with a public housing agency, to 
                provide tenant-based assistance under this 
                section to families occupying units formerly 
                assisted under the terminated contract.
                  [(B) Project-based assistance.--Pursuant to a 
                contract with an owner, to attach assistance to 
                one or more structures under this section, for 
                relocation of families occupying units formerly 
                assisted under the terminated contract.
          [(2) Families occupying units formerly assisted under 
        terminated contract.--Pursuant to paragraph (1), the 
        Secretary shall first make available tenant- or 
        project-based assistance to families occupying units 
        formerly assisted under the terminated contract. The 
        Secretary shall provide project-based assistance in 
        instances only where the use of tenant-based assistance 
        is determined to be infeasible by the Secretary.
          [(3) Effective date.--This subsection shall be 
        effective for actions initiated by the Secretary on or 
        before September 30, 1995.
  [(bb) Transfer of Budget Authority.--If an assistance 
contract under this section, other than a contract for tenant-
based assistance, is terminated or is not renewed, or if the 
contract expires, the Secretary shall, in order to provide 
continued assistance to eligible families, including eligible 
families receiving the benefit of the project-based assistance 
at the time of the termination, transfer any budget authority 
remaining in the contract to another contract. The transfer 
shall be under such terms as the Secretary may prescribe.

  [annual contributions for operation of lower income housing projects

  [Sec. 9. (a)(1)(A) In addition to the contributions 
authorized to be made for the purposes specified in section 5 
of this Act, the Secretary may make annual contributions to 
public housing agencies for the operation of low-income housing 
projects. The contributions payable annually under this section 
shall not exceed the amounts which the Secretary determines are 
required (i) to assure the lower income character of the 
projects involved, (ii) to achieve and maintain adequate 
operating services and reserve funds, and (iii) with respect to 
housing projects developed under the Indian and Alaskan Native 
housing program assisted under this Act, to provide funds (in 
addition to any other operating costs contributions approved by 
the Secretary under this section) as determined by the 
Secretary to be required to cover the administrative costs to 
an Indian housing authority during the development period of a 
project approved pursuant to section 5 and until such time as 
the project is occupied. The Secretary shall embody the 
provisions for such annual contributions in a contract 
guaranteeing their payment subject to the availability of 
funds, and such contract shall provide that no disposition of 
the low-income housing project, with respect to which the 
contract is entered into, shall occur during and for ten years 
after the period when contributions were made pursuant to such 
contract unless approved by the Secretary. If the Secretary 
determines that a public housing agency has failed to take the 
actions required to submit an acceptable audit on a timely 
basis in accordance with chapter 75 of title 31, United States 
Code, the Secretary may arrange for, and pay the costs of, the 
audit. In such circumstances, the Secretary may withhold, from 
assistance otherwise payable to the agency under this section, 
amounts sufficient to pay for the reasonable costs of 
conducting an acceptable audit, including, when appropriate, 
the reasonable costs of accounting services necessary to place 
the agency's books and records in auditable condition.
  [(B)(i) Annual contributions under this section to any public 
housing agency for any project with a sufficient number of 
residents who are frail elderly or persons with disabilities 
may be used, with respect to such project, for (I) the cost of 
a management staff member to coordinate the provision of any 
services within the project provided through any agency of the 
Federal Government or any other public or private department, 
agency, or organization to residents of the project who are 
frail elderly or persons with disabilities to enable such 
residents to live independently and prevent placement in 
nursing homes or institutions; and (II) expenses for the 
provision of services for such residents of the project to 
enable such residents to live independently and prevent 
placement in nursing homes or institutions, which may include 
meal services, housekeeping and chore assistance, personal 
care, laundry assistance, transportation services, and health-
related services, except that not more than 15 percent of the 
cost of the provision of such services may be provided under 
this section. For purposes of this clause, the term ``frail 
elderly'' shall have the meaning given the term under section 
202(d) of the Housing Act of 1959, except that such term does 
not include any person receiving assistance provided under the 
Congregate Housing Services Act of 1978 or section 802 of the 
Cranston-Gonzalez National Affordable Housing Act, and the term 
``persons with disabilities'' shall have the meaning given the 
term under section 811 of the Cranston-Gonzalez National 
Affordable Housing Act.
  [(ii) Annual contributions under this section to any public 
housing agency for any project may be used, with respect to 
such project, for (I) the cost of employing or otherwise 
retaining the services of one or more service coordinators 
under section 661 of the Housing and Community Development Act 
of 1992 to coordinate the provision of any supportive services 
within the project forresidents of the project who are elderly 
families and disabled families, and (II) expenses for the provision of 
such services for such residents of the project. Not more than 15 
percent of the cost of the provision of such services may be provided 
under this section. Services may not be provided under this clause for 
any person receiving assistance under the Congregate Housing Services 
Act of 1978 or section 802 of the Cranston-Gonzalez National Affordable 
Housing Act. The budget authority available under section 5(c) for 
assistance under this section is authorized to be increased by 
$30,000,000 on or after October 1, 1992, and by $30,000,000 on or after 
October 1, 1993. Amounts made available under this clause shall be used 
to provide additional annual contributions to public housing agencies 
only for the purpose of providing service coordinators and services 
under this clause for public housing projects.
  [(2) The Secretary may not make assistance available under 
this section for any low-income housing project unless such 
project is one developed pursuant to a contributions contract 
authorized by section 5 but not subject to section 8, except 
that after the duration of any such contributions contract with 
respect to a low-income housing project, the Secretary may 
provide assistance under this section with respect to such 
project as long as the lower income nature of such project is 
maintained.
  [(3)(A) For purposes of making payments under this section 
(except for payments under paragraph (1)(B)), the Secretary 
shall utilize a performance funding system that is 
substantially based on the system defined in regulations and in 
effect on the date of the enactment of the Housing and 
Community Development Act of 1987 (as modified by this 
paragraph), and that establishes standards for costs of 
operation and reasonable projections of income, taking into 
account the character and location of the project and the 
characteristics of the families served, in accordance with a 
formula representing the operations of a prototype well-managed 
project. Such performance funding system shall be established 
in consultation with public housing agencies and their 
associations, be contained in a regulation promulgated by the 
Secretary prior to the start of any fiscal year to which it 
applies, and remain in effect for the duration of such fiscal 
year without change. Notwithstanding the preceding sentences, 
the Secretary shall revise the performance funding system by 
June 15, 1988, to accurately reflect the increase in insurance 
costs incurred by public housing agencies. Notwithstanding 
sections 583(a) and 585(a) of title 5, United States Code (as 
added by section 3(a) of the Negotiated Rulemaking Act of 
1990), any proposed regulation providing for amendment, 
alteration, adjustment, or other change to the performance 
funding system relating to vacant public housing units shall be 
issued pursuant to a negotiated rulemaking procedure under 
subchapter IV of chapter 5 of such title (as added by section 
3(a) of the Negotiated Rulemaking Act of 1990), and the 
Secretary shall establish a negotiated rulemaking committee for 
development of any such proposed regulations.
  [(B) Under the performance funding system established under 
this paragraph--
          [(i) in the first year that the reductions occur, any 
        public housing agency shall share equally with the 
        Secretary any cost reductions due to the differences 
        between projected and actual utility rates attributable 
        to actions taken by the agency which lead to such 
        reductions, and in subsequent years, if the energy 
        savings are cost-effective, the Secretary may continue 
        the sharing arrangement with the public housing agency;
          [(ii) in the case of any public housing agency that 
        receives financing (from a person other than the 
        Secretary) or enters into a performance contract to 
        undertake energy conservation improvements in a public 
        housing project, under which payment does not exceed 
        the cost of the energy saved as a result of the 
        improvements during a negotiated contract period of not 
        more than 12 years that is approved by the Secretary--
                  [(I) the public housing agency shall retain 
                100 percent of any cost avoidance due to 
                differences between projected and actual 
                utility consumption (adjusted for heating 
                degree days) attributable to the improvements, 
                until the term of the financing agreement is 
                completed, at which time the annual utility 
                expense level 3-year rolling base procedures 
                shall be applied using--
                          [(a) in the first year following the 
                        end of the contract period, the energy 
                        use during the 2 years prior to 
                        installation of the energy conservation 
                        improvements and the last contract 
                        year;
                          [(b) in the second year following the 
                        end of the contract period, the energy 
                        use during the 1 year prior to 
                        installation of the energy conservation 
                        improvements and the 2 years following 
                        the end of the contract period; and
                          [(c) in the third year following the 
                        end of the contract period, the energy 
                        use in the 3 years following the end of 
                        the contract period; or
                  [(II) the Secretary shall provide an 
                additional operating subsidy above the current 
                allowable utility expense level equivalent to 
                the cost of the energy saved as a result of the 
                improvements and sufficient to cover payments 
                for the improvements through the term of the 
                contract or agreement;
          [(iii) there shall be a formal review process for the 
        purpose of providing such revisions (either increases 
        or reductions) to the allowable expense level of a 
        public housing agency as necessary--
                  [(I) to correct inequities and abnormalities 
                that exist in the base year expense level of 
                such public housing agency;
                  [(II) to accurately reflect changes in 
                operating circumstances since the initial 
                determination of such base year expense level; 
                and
                  [(III) to ensure that the allowable expense 
                limit accurately reflects the higher cost of 
                operating the project in an economically 
                distressed unit of local government and the 
                lower cost of operating the project in an 
                economically prosperous unit of local 
                government;
          [(iv) if a public housing agency redesigns or 
        substantially rehabilitates a public housing project so 
        that 2 or more dwellingunits are combined to create a 
single larger dwelling unit, the payments received under this section 
shall not be reduced solely because of the resulting reduction in the 
number of dwelling units if not less than the same number of 
individuals will reside in the new larger dwelling unit as resided in 
the dwelling units that were combined to form such larger dwelling 
unit; and
          [(v) if a public housing agency renovates, converts, 
        or combines one or more dwelling units in a public 
        housing project to create congregate space to 
        accommodate the provision of supportive services in 
        accordance with section 22 of this Act and section 802 
        of the Cranston-Gonzalez National Affordable Housing 
        Act, the payments received under this section shall not 
        be reduced because of the resulting reduction in the 
        number of dwelling units.
  [(4) Adjustments to a public housing agency's operating 
subsidy made by the Secretary under this section shall reflect 
actual changes in rental income collections resulting from the 
application of section 904 of the Stewart B. McKinney Homeless 
Assistance Amendments Act of 1988.
  [(b) The aggregate rentals required to be paid in any year by 
families residing in the dwelling units administered by a 
public housing agency receiving annual contributions under this 
section shall not be less than an amount equal to one-fifth of 
the sum of the incomes of all such families.
  [(c)(1) There are authorized to be appropriated for purposes 
of providing annual contributions under this section 
$2,282,436,000 for fiscal year 1993 and $2,378,298,312 for 
fiscal year 1994.
  [(2) There are also authorized to be appropriated to provide 
annual contributions under this section, in addition to amounts 
under paragraph (1), such sums as may be necessary for each of 
fiscal years 1993 and 1994, to provide each public housing 
agency with the difference between (A) the amount provided to 
the agency from amounts appropriated pursuant to paragraph (1), 
and (B) all funds for which the agency is eligible under the 
performance funding system without adjustments for estimated or 
unrealized savings.
  [(3) In addition to amounts under paragraphs (1) and (2), 
there are authorized to be appropriated for annual 
contributions under this section to provide for the costs of 
the adjustments to income and adjusted income under the 
amendments made by sections 573(b) and (c) of the Cranston-
Gonzalez National Affordable Housing Act such sums as may be 
necessary for fiscal years 1993 and 1994.
  [(d) If, in any fiscal year beginning after September 30, 
1979, any funds which have been appropriated for such year 
remain after applying the provisions of the second and fourth 
sentences of subsection (a)(1), the Secretary shall distribute 
such funds to low-income housing projects which incurred 
excessive costs which were beyond their control and the full 
extent of which was not taken into account in the original 
distribution of funds for such fiscal year.
  [(e) In the case of any public housing agency that submits 
its budget for any fiscal year of such agency to the Secretary 
in a timely manner in accordance with the regulations issued by 
the Secretary under this section, assistance to be provided to 
such agency under this section for such fiscal year shall 
commence not later than the 1st month of such fiscal year, and 
shall be paid in accordance with such payment schedule as may 
be agreed upon by the Secretary and such agency.

                          [general provisions

  [Sec. 10. (a) In the performance of, and with respect to, the 
functions, powers, and duties vested in him by this Act, the 
Secretary, notwithstanding the provisions of any other law, 
shall--
          [(1) prepare annually and submit a budget program as 
        provided for wholly owned Government corporations by 
        chapter 91 of title 31, United States Code; and
          [(2) maintain an integral set of accounts which may 
        be audited by the General Accounting Office as provided 
        by chapter 91 of title 31, United States Code.
  [(b) All receipts and assets of the Secretary under this Act 
shall be available for the purposes of this Act until expended.
  [(c) The Federal Reserve banks are authorized and directed to 
act as depositories, custodians, and fiscal agents for the 
Secretary in the general exercise of his powers under this Act, 
and the Secretary may reimburse any such bank for its services 
in such manner as may be agreed upon.

                [financing lower income housing projects

  [Sec. 11. (a) Obligations issued by a public housing agency 
in connection with low-income housing projects which (1) are 
secured (A) by a pledge of a loan under any agreement between 
such public housing agency and the Secretary, or (B) by a 
pledge of annual contributions under an annual contributions 
contract between such public housing agency and the Secretary, 
or (C) by a pledge of both annual contributions under an annual 
contributions contract and a loan under an agreement between 
such public housing agency and the Secretary, and (2) bear, or 
are accompanied by, a certificate of the Secretary that such 
obligations are so secured, shall be incontestable in the hands 
of a bearer and the full faith and credit of the United States 
is pledged to the payment of all amounts agreed to be paid by 
the Secretary as security for such obligations.
  [(b) Except as provided in section 5(g), obligations, 
including interest thereon, issued by public housing agencies 
in connection with low-income housing projects shall be exempt 
from all taxation now or hereafter imposed by the United States 
whether paid by such agencies or by the Secretary. The income 
derived by such agencies from such projects shall be exempt 
from all taxation now or hereafter imposed by the United 
States.

                            [labor standards

  [Sec. 12. (a) Any contract for loans, contributions, sale, or 
lease pursuant to this Act shall contain a provision requiring 
that not less than the wages prevailing in the locality, as 
determined or adopted (subsequent to a determination under 
applicable State or local law) by the Secretary, shall be paid 
to all architects, technical engineers, draftsmen, and 
technicians employed in the development,and all maintenance 
laborers and mechanics employed in the operation, of the low-income 
housing project involved; and shall also contain a provision that not 
less than the wages prevailing in the locality, as predetermined by the 
Secretary of Labor pursuant to the Davis-Bacon Act (49 Stat. 1011), 
shall be paid to all laborers and mechanics employed in the development 
of the project involved (including a project with nine or more units 
assisted under section 8 of this Act, where the public housing agency 
or the Secretary and the builder or sponsor enter into an agreement for 
such use before construction or rehabilitation is commenced), and the 
Secretary shall require certification as to compliance with the 
provisions of this section prior to making any payment under such 
contract.
  [(b) Subsection (a) and the provisions relating to wages 
(pursuant to subsection (a)) in any contract for loans, annual 
contributions, sale, or lease pursuant to this Act, shall not 
apply to any individual that--
          [(1) performs services for which the individual 
        volunteered;
          [(2)(A) does not receive compensation for such 
        services; or
          [(B) is paid expenses, reasonable benefits, or a 
        nominal fee for such services; and
          [(3) is not otherwise employed at any time in the 
        construction work.

                          [energy conservation

  [Sec. 13. The Secretary shall, to the maximum extent 
practicable, require that newly constructed and substantially 
rehabilitated projects assisted under this Act with authority 
provided on or after October 1, 1979, shall be equipped with 
heating and cooling systems selected on the basis of criteria 
which include a life-cycle cost analysis of such systems.

                [public and indian housing modernization

  [Sec. 14. (a) It is the purpose of this section to provide 
assistance--
          [(1) to improve the physical condition of existing 
        public housing projects; and
          [(2) to upgrade the management and operation of such 
        projects;
in order to assure that such projects continue to be available 
to serve low-income families.
  [(b)(1) The Secretary may make available and contract to make 
available financial assistance (in such amounts as are 
authorized pursuant to section 5(c) and as may be approved in 
appropriations Acts) to public housing agencies for the purpose 
of improving the physical condition of existing low-rent public 
housing projects and for upgrading the management and operation 
of such projects to the extent necessary to maintain such 
physical improvements.
  [(2) The Secretary may make contributions (in the form of 
grants) to public housing agencies under this section. The 
contract under which the contributions shall be made shall 
specify that the terms and conditions of the contract shall 
remain in effect for a 20-year period for any project receiving 
the benefit of a grant under the contract.
  [(c) Assistance under subsection (b) may be made available 
only for buildings of low-rent housing projects--
          [(1) which projects are owned by public housing 
        agencies;
          [(2) which projects are operated as rental housing 
        projects and assisted under section 5 or section 9 of 
        this Act;
          [(3) which projects are not assisted under section 8 
        of this Act;
          [(4) which buildings are not assisted under section 
        5(j)(2); and
          [(5) which projects meet such other requirements 
        consistent with the purposes of this section as the 
        Secretary may prescribe.
  [(d) Except as provided in subsection (f)(4), no assistance 
may be made available under subsection (b) to a public housing 
agency that owns or operates less than 250 public housing 
dwelling units unless the Secretary has approved an application 
from the public housing agency which has been developed in 
consultation with appropriate local officials and with tenants 
of the housing projects for which assistance is requested. Such 
application shall contain at least--
          [(1) a comprehensive assessment of (A) the current 
        physical condition of each project for which assistance 
        is requested, and (B) the physical improvements 
        necessary for each such project to meet the standards 
        established by the Secretary pursuant to subsection 
        (j);
          [(2) a comprehensive assessment of the improvements 
        needed to upgrade the management and operation of each 
        such project so that decent, safe, and sanitary living 
        conditions will be provided in such projects; such 
        assessment shall include at least an identification of 
        needs related to--
                  [(A) the management, financial, and 
                accounting control systems of the public 
                housing agency which are related to each 
                project eligible for assistance under this 
                section;
                  [(B) the adequacy and qualifications of 
                personnel employed by such public housing 
                agency (in the management and operation of such 
                projects) for each category of employment; and
                  [(C) the adequacy and efficacy of--
                          [(i) tenant programs and services in 
                        such projects;
                          [(ii) the security of each such 
                        project and its tenants;
                          [(iii) policies and procedures of the 
                        public housing agency for the selection 
                        and eviction of tenants in such 
                        projects; and
                          [(iv) other policies and procedures 
                        of such agency relating to such 
                        projects, as specified by the 
                        Secretary; and
          [(3) a plan for making the improvements and for 
        meeting the needs, described in paragraphs (1) and (2); 
        such plan shall include at least--
                  [(A) a schedule of those actions which are to 
                be completed, over a period of not greater than 
                5 years from thedate of approval of such 
application by the Secretary, within each 12-month period covered by 
such plan and which are necessary--
                          [(i) to make the improvements, 
                        described in paragraph (1)(B), for each 
                        project for which assistance is 
                        requested, and
                          [(ii) to upgrade the management and 
                        operation of such projects as described 
                        in paragraph (3); and
                  [(B) the estimated cost of each of the 
                actions described in subparagraph (A).
  [(e)(1) No financial assistance may be made available under 
this section to a public housing agency that owns or operates 
250 or more public housing dwelling units unless the Secretary 
approves (or has approved before the effective date of this 
subsection) a 5-year comprehensive plan submitted by the public 
housing agency, except that the Secretary may provide such 
assistance if it is necessary to correct conditions that 
constitute an immediate threat to the health or safety of 
tenants. The comprehensive plan shall contain--
          [(A) a comprehensive assessment of--
                  [(i) the current physical condition of each 
                public housing project owned or operated by the 
                public housing agency;
                  [(ii) the physical improvements necessary for 
                each such project to permit the project--
                          [(I) to be rehabilitated to a level 
                        at least equal to the modernization 
                        standards specified in the 
                        Modernization Handbook of the 
                        Department of Housing and Urban 
                        Development in effect on the date of 
                        the enactment of the Housing and 
                        Community Development Act of 1987, as 
                        well as the modernization standards 
                        established by the Secretary and in 
                        effect at the time of the preparation 
                        of the comprehensive plan; and
                          [(II) to comply with life-cycle cost-
                        effective energy conservation 
                        performance standards established by 
                        the Secretary to reduce operating costs 
                        over the estimated life of the 
                        building; and
                  [(iii) the replacement needs of equipment 
                systems and structural elements that will be 
                required to be met (assuming routine and timely 
                maintenance is performed) during the 5-year 
                period covered by the comprehensive plan;
          [(B) a comprehensive assessment of the improvements 
        needed to upgrade the management and operation of the 
        public housing agency and of each such project so that 
        decent, safe, and sanitary living conditions will be 
        provided such projects, which assessment shall include 
        at least an identification of needs related to--
                  [(i) the management, financial, and 
                accounting control systems of the public 
                housing agency that are related to such 
                projects;
                  [(ii) the adequacy and qualifications of 
                personnel appropriate to be employed by the 
                public housing agency (in the management and 
                operation of such projects) for each 
                significant category of employment; and
                  [(iii) the improvement of the efficacy of--
                          [(I) tenant programs and services in 
                        such projects;
                          [(II) the security of each such 
                        project and its tenants;
                          [(III) policies and procedures of the 
                        public housing agency for the selection 
                        and eviction of tenants in such 
                        projects; and
                          [(IV) other policies and procedures 
                        of the public housing agency relating 
                        to such projects, as specified by the 
                        Secretary;
          [(C) an analysis, made on a project-by-project basis 
        in accordance with standards and criteria prescribed by 
        the Secretary, demonstrating that completion of the 
        improvements and replacements identified under 
        subparagraphs (A) and (B) will reasonably ensure the 
        long-term physical and social viability of each such 
        project at a reasonable cost;
          [(D) an action plan for making the improvements and 
        replacements identified under subparagraphs (A) and (B) 
        that are determined under the analysis described in 
        subparagraph (C) to reasonably ensure long-term 
        viability of each such project at a reasonable cost, 
        which action plan shall include at least a schedule, in 
        order of priority established by the public housing 
        agency, of the actions that are to be completed over a 
        period of 5 years from the date of approval of the 
        comprehensive plan by the Secretary (or any longer 
        period reasonably needed to make the improvements and 
        replacements, considering the scope of the improvements 
        and replacements and the amount of funding provided) 
        and that are necessary--
                  [(i) to make the improvements and 
                replacements identified under subparagraph (A) 
                for each project expected to receive capital 
                improvements or replacements (with priority to 
                improvements and replacements required to 
                correct any life threatening condition); and
                  [(ii) to upgrade the management and operation 
                of the public housing agency and its public 
                housing projects as described in subparagraph 
                (B);
          [(E) a statement, to be signed by the chief local 
        government official (or Indian tribal official, if 
        appropriate), certifying that--
                  [(i) the comprehensive plan was developed by 
                the public housing agency in consultation with 
                appropriate local government officials (or 
                Indian tribal officials) and with tenants of 
                the housing projects (or tenants of the Indian 
                housing projects) eligible for assistance under 
                this section, which shall include at least one 
                public hearing that shall be held prior to the 
                initial adoption of any plan by the public 
                housing agency for use of such assistance, and 
                afford tenants and interested parties an 
                opportunity to summarize their priorities and 
                concerns, to ensure their due consideration in 
                the planning process of the public housing 
                agency; and
                  [(ii) the comprehensive plan is consistent 
                with the assessment of the community of its 
                low-income housing needs and that the unit of 
                general local government (or Indian tribe) will 
                cooperate in the provision of tenant programs 
                and services (as defined in section 3(c)(2));
          [(F) a statement, to be signed by the chief public 
        housing official, certifying that the public housing 
        agency will carry out the comprehensive plan in 
        conformity with title VI of the Civil Rights Act of 
        1964, title VIII of the Act of April 11, 1968 (commonly 
        known as the Civil Rights Act of 1968), and section 504 
        of the Rehabilitation Act of 1973;
          [(G) a preliminary estimate of the total cost of the 
        items identified in subparagraphs (A) and (B), 
        including a preliminary estimate of the funds that will 
        be required during each year covered by the 
        comprehensive plan to accomplish the work pursuant to 
        the action plan; and
          [(H) such other information as the Secretary may 
        require.
  [(2)(A) The Secretary shall approve a comprehensive plan 
unless--
          [(i) the comprehensive plan is incomplete in 
        significant matters;
          [(ii) on the basis of available significant facts and 
        data pertaining to the physical and operational 
        condition of the public housing projects of the public 
        housing agency or the management and operations of the 
        public housing agency, the Secretary determines that 
        the identification by the public housing agency of 
        needs is plainly inconsistent with such facts and data;
          [(iii) on the basis of the comprehensive plan, the 
        Secretary determines that the action plan described in 
        paragraph (1)(D) is plainly inappropriate to meeting 
        the needs identified in the comprehensive plan, or that 
        the public housing agency has failed to demonstrate 
        that completion of improvements and replacements 
        identified under subparagraphs (A) and (B) of paragraph 
        (1) will reasonably ensure long-term viability of one 
        or more public housing projects to which they relate at 
        a reasonable cost; or
          [(iv) there is evidence available to the Secretary 
        that tends to challenge in a substantial manner any 
        certification contained in the comprehensive plan.
  [(B) The comprehensive plan shall be considered to be 
approved, unless the Secretary notifies the public housing 
agency in writing within 75 calendar days of submission that 
the Secretary has disapproved the comprehensive plan as 
submitted, indicating the reasons for disapproval and 
modifications required to make the comprehensive plan 
approvable.
  [(3)(A) Each public housing agency that owns or operates 250 
or more public housing dwelling units shall, after being 
advised by the Secretary of the estimated assistance it will 
receive under this section in any fiscal year, submit to the 
Secretary, at a date determined by the Secretary, an annual 
statement of the activities and expenditures projected to be 
undertaken, in whole or in part, by such assistance during the 
12-month period immediately following the execution of the 
contract for such assistance. As long as the activities and 
expenditures are consistent with the approved plan, the public 
housing agency shall have total discretion in expending 
assistance for any activity or work set forth in the plan. The 
annual statement shall include a certification by the public 
housing agency that the proposed activities and expenditures 
are consistent with the approved comprehensive plan of the 
public housing agency. The annual statement also shall include 
a certification that the public housing agency has provided the 
tenants of the public housing affected by the planned 
activities the opportunity to review the annual statement and 
comment on it, and that such comments have been taken into 
account in formulating the annual statement as submitted to the 
Secretary.
  [(B) A public housing agency may propose an amendment to its 
comprehensive plan under paragraph (1) in any annual statement. 
Any such proposed amendment shall be reviewed in accordance 
with paragraph (2), and shall include a certification that (i) 
the proposed amendment has been made publicly available for 
comment prior to its submission; (ii) affected tenants have 
been given sufficient time to review and comment on it; and 
(iii) such comments have been taken into consideration in the 
preparation and submission of the amendment. A public housing 
agency shall have a right to amend its comprehensive plan and 
related statements to extend the time for performance whenever 
the Secretary has not provided the amount of assistance set 
forth in the plan or has not provided the assistance in a 
timely manner.
  [(C) The Secretary shall approve the annual statement and any 
amendment to it or the comprehensive plan unless the Secretary 
determines that the statement or amendment is plainly 
inconsistent with the activities specified in the comprehensive 
plan. The statement or amendment shall be considered to be 
approved, unless the Secretary notifies the public housing 
agency in writing before the expiration of the 75-day period 
following its submission that the Secretary has disapproved it 
as submitted, indicating the reasons for disapproval and the 
modifications required to make it approvable.
  [(4)(A) Each public housing agency that owns or operates 250 
or more public housing dwelling units shall submit to the 
Secretary, on a date determined by the Secretary, a performance 
and evaluation report concerning the use of funds made 
available under this section. The report of the public housing 
agency shall include an assessment by the public housing agency 
of the relationship of such use of funds made available under 
this section, as well as the use of other funds, to the needs 
identified in the comprehensive plan of the public housing 
agency and to the purposes of this section. The public housing 
agency shall certify that the report has been made available 
for review and comment by affected tenants prior to its 
submission to the Secretary.
  [(B) The Secretary shall, at least on an annual basis, make 
such reviews as may be necessary or appropriate to determine 
whether each public housing agency receiving assistance under 
this section--
          [(i) has carried out its activities under this 
        section in a timely manner and in accordance with its 
        comprehensive plan;
          [(ii) has a continuing capacity to carry out its 
        comprehensive plan in a timely manner;
          [(iii) has satisfied, or has made reasonable progress 
        towards satisfying, such performance standards as shall 
        be prescribed by the Secretary, and has made reasonable 
        progress in carrying out modernization projects 
        approved under this section.
  [(C) Each public housing agency that owns or operates 250 or 
more public housing dwelling units and receives assistance 
under this section shall have an audit made in accordance with 
chapter 75 of title 31, United States Code. The Secretary, the 
Inspector General of the Department of Housing and Urban 
Development, and the Comptroller General of the United States 
shall have access to all books, documents, papers, or other 
records that are pertinent to the activities carried out under 
this section in order to make audit examinations, excerpts, and 
transcripts.
  [(D) The comprehensive plan, any amendments to the 
comprehensive plan, and the annual statement shall, once 
approved by the Secretary, be binding upon the Secretary and 
the public housing agency. The Secretary may order corrective 
action only if the public housing agency does not comply with 
subparagraph (A) or (B) or if an audit under subparagraph (C) 
reveals findings that the Secretary reasonably believes require 
such corrective action. The Secretary may withhold funds under 
this section only if the public housing agency fails to take 
such corrective action after notice and a reasonable 
opportunity to do so. In administering this section, the 
Secretary shall, to the greatest extent possible, respect the 
professional judgment of the administrators of the public 
housing agency.
  [(f)(1) The amount of financial assistance made available 
under subsection (b) to any public housing agency that owns or 
operates less than 250 public housing dwelling units with 
respect to any year may not exceed the sum of--
          [(A) an amount determined by the Secretary to be 
        necessary to undertake the actions specified for such 
        year in the schedule submitted pursuant to subsection 
        (d)(3)(A);
          [(B) the amount determined necessary by the Secretary 
        to reimburse the public housing agency for the cost of 
        developing the plan described pursuant to subsection 
        (d)(3), less any amount which has been provided such 
        public housing agency with respect to such year under 
        paragraph (4); and
          [(C) in the case of a public housing agency which 
        meets such criteria of financial distress as are 
        established by the Secretary and which has submitted 
        the information described in paragraphs (1) and (2) of 
        subsection (d), the amount determined necessary by the 
        Secretary to enable such agency to develop the plan 
        described pursuant to subsection (d)(3);
except that not more than 5 per centum of the total amount 
utilized for contributions contracts under subsection (b) in 
any year shall be made available for the purposes described in 
paragraphs (3) and (4).
  [(2) A public housing agency that owns or operates 250 or 
more public housing dwelling units may use financial assistance 
received under subsection (b) only--
          [(A) to undertake activities described in its 
        approved comprehensive plan under subsection (e)(1) or 
        its annual statement under subsection (e)(3);
          [(B) to correct conditions that constitute an 
        immediate threat to the health or safety of tenants, 
        whether or not the need for such correction is 
        indicated in its comprehensive plan or annual 
        statement; and
          [(C) to prepare a comprehensive plan under subsection 
        (e)(1), including reasonable costs that may be 
        necessary to assist tenants in participating in the 
        planning process in a meaningful way, an annual 
        statement under subsection (e)(3), an annual 
        performance and evaluation report under subsection 
        (e)(4)(A), and an audit under subsection (e)(4)(C).
  [(g) No assistance shall be made available to a public 
housing agency pursuant to subsection (b) for any year 
subsequent to the first year for which such assistance is made 
available to such agency unless the Secretary has determined 
that such agency has made substantial efforts to meet the 
objectives for the preceding year under the plan described in 
subsection (d)(3) or (e) and approved by the Secretary.
  [(h) In making assistance available under subsection (b) to a 
public housing agency that owns or operates fewer than 250 
public housing dwelling units, the Secretary shall give 
preference to public housing agencies--
          [(1) which request assistance for projects (A) having 
        conditions which threaten the health or safety of the 
        tenants, or (B) having a significant number of vacant, 
        substandard units; and
          [(2) which have demonstrated a capability of carrying 
        out the activities proposed in the plan submitted by 
        the agency pursuant to subsection (d)(3) and approved 
        by the Secretary.
  [(i)(1) In addition to assistance made available under 
subsection (b) to a public housing agency that owns or operates 
fewer than 250 public housing dwelling units, the Secretary 
may, without regard to the requirements of subsection (c), (d), 
(f), (g), or (h), make available and contract to make available 
financial assistance (in such amounts as are authorized 
pursuant to section 5(c) and as approved in appropriation Acts) 
to any public housing agency in an amount which the Secretary 
determines is necessary to meet emergency or special purpose 
needs, especially emergency and special purpose needs which 
relate to fire safety standards. Such needs shall be limited 
to--
          [(A) correcting conditions which threaten the health 
        or safety of the tenants of any project (i) which is 
        described in subsection (c), and (ii) with respect to 
        which an application for assistance pursuant to 
        subsection (d) has not been approved by the Secretary;
          [(B) correcting conditions (i) which threaten the 
        health or safety of the tenants of any project with 
        respect to which an application for assistance pursuant 
        to subsection (d) has been approved, and (ii) which 
        were unanticipated at the time of the development of 
        such application;
          [(C) correcting conditions which threaten the health 
        or safety of the occupants of any low-income housing 
        project not described in subsection (c) and not 
        assisted pursuant to section 8;
          [(D)(i) physical improvements needs which (I) would 
        not otherwise be eligible for assistance under this 
        section, and (II) pertain to any low-income housing 
        project other than a project assisted under section 8; 
        and
          [(ii) physical improvement needs eligible under this 
        subparagraph shall include replacing or repairing major 
        equipment systems or structural elements, upgrading 
        security, increasing accessibility for elderly and 
        disabled families (as such terms are defined in section 
        3(b)(3)), reducing the number of vacant substandard 
        units, and increasing the energy efficiency of the 
        units, except that the Secretary may make financial 
        assistance available under this clause only if the 
        Secretary determines that the physical improvements are 
        necessary and sufficient to extend substantially the 
        useful life of the project; or
          [(E) management improvement needs which (i) would not 
        otherwise be eligible for assistance under this 
        section, and (ii) pertain to any low-income housing 
        project other than a project assisted under section 8.
  [(2) The Secretary may issue such rules and regulations as 
may be necessary to carry out this subsection.
  [(j)(1) The Secretary may issue such rules and regulations as 
may be necessary to carry out the provisions and purposes of 
this section.
  [(2) The Secretary shall issue rules and regulations 
establishing standards which provide for decent, safe, and 
sanitary living conditions in low-rent public housing projects 
and for energy conserving improvements in such projects and 
which, to the extent practicable, are consistent with the 
Minimum Property Standards for Multi-Family Housing as they 
reasonably would be applied to existing housing, except that 
the Secretary may establish higher standards on a project-by-
project basis in such cases where the Secretary deems such 
higher standards appropriate for furthering the purposes of 
this section.
  [(k)(1) From amounts approved in appropriation Acts for 
grants under this section for fiscal year 1992 and each fiscal 
year thereafter, and to the extent provided by such Acts, the 
Secretary shall reserve not more than $75,000,000 (including 
unused amounts reserved during previous fiscal years), which 
shall be available for modernization needs resulting from 
natural and other disasters and from emergencies. Amounts 
provided for emergencies shall be repaid by public housing 
agencies from future allocations of assistance under paragraph 
(2), where available.
  [(2)(A) After determining the amounts to be reserved under 
paragraphs (1) and (5)(D)(iv), the Secretary shall allocate the 
amount remaining pursuant to a formula contained in a 
regulation prescribed by the Secretary, which shall be designed 
to measure the relative needs of public housing agencies. The 
formula shall take into account amounts previously made 
available by the Secretary for modernization under this section 
and for major reconstruction of obsolete  projects,  to  the  
extent  determined  appropriate  by  the Secretary.
  [(B) The Secretary shall allocate half of the amount 
allocated under this paragraph based on the relative backlog 
needs of public housing agencies, determined--
          [(i) for individual public housing agencies with 250 
        or more units and for the aggregate of agencies with 
        fewer than 250 units, where the data are statistically 
        reliable, on the basis of the most recently available, 
        statistically reliable data regarding the (I) backlog 
        of needed repairs and replacements of existing physical 
        systems in public housing projects, (II) items that 
        must be added to projects to meet the modernization 
        standards of the Secretary (referred to in subsection 
        (e)(1)(A)(ii)(I)) and State and local codes, and (III) 
        items that are necessary or highly desirable for the 
        long-term viability of a project; or
          [(ii) for individual public housing agencies with 250 
        or more units, where such data are not statistically 
        reliable, on the basis of estimates of the categories 
        of backlog specified in clause (i) using the most 
        recently available data on the backlog, and objectively 
        measurable data on public housing agency, community, 
        and project characteristics regarding--
                  [(I) the average number of bedrooms in the 
                units in a project;
                  [(II) the proportion of units in a project 
                available for occupancy by very large families;
                  [(III) the extent to which units for families 
                are in high-rise elevator projects;
                  [(IV) the age of the projects;
                  [(V) in the case of a large agency, as 
                determined by the Secretary, the number of 
                units with 2 or more bedrooms;
                  [(VI) the cost of rehabilitating property in 
                the area;
                  [(VII) for family projects, the extent of 
                population decline in the unit of general local 
                government determined on the basis of the 1970 
                and 1980 censuses; and
                  [(VIII) any other factors the Secretary 
                determines are appropriate.
        The Secretary may not establish or amend any criteria 
        regarding the backlog needs of public housing agencies 
        under this subparagraph, except by rule as provided 
        under section 553 of title 5, United States Code.
  [(C) The Secretary shall allocate the other half of the 
amount allocated under this paragraph based on the relative 
accrued needs of public housing agencies for the categories of 
need specified in subparagraphs (B)(i) (I) and (II), 
determined--
          [(i) for individual public housing agencies with 250 
        or more units and for the aggregate of agencies with 
        fewer than 250 units, where the data are statistically 
        reliable, on the basis of the needs that are estimated 
        to have accrued since the date of the last objective 
        measurement of backlog needs under subparagraph (B); or
          [(ii) for individual public housing agencies with 250 
        or more units, where the estimates under clause (i) are 
        not statistically reliable, on the basis of estimates 
        of accrued need using the most recently available data 
        on the backlog, and objectively measurable data on 
        public housing agency, community, and project 
        characteristics regarding--
                  [(I) the average number of bedrooms of the 
                units in a project;
                  [(II) the proportion of units in a project 
                available for occupancy by very large families;
                  [(III) the age of the projects;
                  [(IV) the extent to which the buildings in 
                projects of an agency average fewer than 5 
                units;
                  [(V) the cost of rehabilitating property in 
                the area;
                  [(VI) the total number of units of each 
                agency that owns or operates 250 or more units; 
                and
                  [(VII) any other factors the Secretary 
                determines are appropriate.
        The Secretary may not establish or amend any criteria 
        regarding the accrual needs of public housing agencies 
        under this subparagraph, except by rule as provided 
        under section 553 of title 5, United States Code.
  [(D)(i) In determining how many units an agency owns or 
operates and the relative modernization needs of agencies, the 
Secretary shall, except as otherwise agreed by the Secretary 
and the agency, count each existing unit under the annual 
contributions contract, except that an existing unit under the 
turnkey III and the mutual help programs may be counted as less 
than one unit, to take into account the responsibility of 
families for the costs of certain maintenance and repair. For 
purposes of this section, an agency that qualifies to receive a 
formula grant under paragraph (4) may elect to continue to 
qualify to receive a formula grant if it owns or operates at 
least 200 public housing units.
  [(ii) Where an existing unit under a contract is demolished 
or disposed of, the Secretary shall not adjust the amount the 
agency receives under the formula unless more than one percent 
of the units are affected on a cumulative basis. Where more 
than one percent of the units are demolished or disposed of, 
the Secretary shall reduce the formula amount for the agency 
over a 3-year period to reflect removal of the units from the 
contract.
  [(iii) The Secretary shall determine whether the data under 
subparagraphs (B) and (C) are statistically reliable.
  [(3) The amount determined under the formula for agencies 
with fewer than 250 units shall be allocated in accordance with 
subsection (d).
  [(4) The amount determined under the formula for each agency 
that owns or operates 250 or more units shall be allocated to 
each qualifying agency in accordance with subsection (e).
  [(5)(A) With respect to any agency that is designated as a 
troubled agency with respect to the program under this section 
upon the initial designation of such troubled agencies under 
section 6(j)(2)(A)(i), the Secretary shall limit the total 
amount of funding under this section for the agency for fiscal 
year 1992 and any fiscal year thereafter, if the agency remains 
designated as a troubled agency, to the sum of--
          [(i) the average of the amount that the troubled 
        agency received for modernization activities under this 
        section and for major reconstruction of obsolete 
        projects for each of fiscal years1989, 1990, and 1991, 
which average shall be adjusted to take into account changes in the 
cost of rehabilitating property; plus
          [(ii) 25 percent of the difference between the amount 
        determined under clause (i) and the amount that would 
        be allocated to the agency in such fiscal year if the 
        agency were not designated as a troubled agency.
  [(B) In any fiscal year the Secretary may, pursuant to the 
request of a troubled agency, increase the amount allocated to 
the agency under subparagraph (A) to an amount not exceeding 
the amount that would be allocated to the agency in such fiscal 
year if the agency were not a troubled agency. An increase 
under this subparagraph shall be based on the agency's progress 
toward meeting the performance indicators under section 
6(j)(1). The Secretary shall render a decision in writing on 
each such request not later than 75 days after receipt of the 
request and any necessary supporting documentation.
  [(C) For any fiscal year, any amounts that would have been 
allocated to an agency under the formula under paragraph (2) 
that are not allocated to the agency because the agency 
receives the amount provided under subparagraph (A) of this 
paragraph, shall be allocated in such year pursuant to the 
formula to other agencies with 500 or more units.
  [(D) The Secretary shall carry out a credit system under this 
subparagraph to provide agencies that receive allocations under 
subparagraph (A) with additional assistance under this section 
after the agency is determined not to be a troubled agency, to 
compensate for  amounts  not  received  because  of  the  
troubled  agency  designation. The credit system shall be 
subject to the following requirements:
          [(i) Any agency that receives assistance pursuant to 
        subparagraph (A) for any fiscal year shall receive 
        credits for the difference between the amount that the 
        agency would have been allocated in such year if it 
        were not designated a troubled agency and the amount 
        allocated for the agency for such year under 
        subparagraph (A).
          [(ii) An agency may not receive credits under this 
        subparagraph for more than 3 consecutive fiscal years.
          [(iii) After a 3-year period during which an agency 
        has accrued credits, the credits accrued by the agency 
        shall be--
                  [(I) decreased by 10 percent of the total 
                credits accumulated if the designation as a 
                troubled agency is not removed before  the  
                conclusion  of  the  first  fiscal  year  after 
                 such 3-year period of accrual of credits;
                  [(II) decreased by an additional 20 percent 
                of the original total accumulated credits if 
                the designation as a troubled agency is not 
                removed before the conclusion of the second 
                fiscal year after such 3-year accrual period;
                  [(III) decreased by an additional 30 percent 
                of the original total accumulated credits if 
                the designation as a troubled agency is not 
                removed before the conclusion of the third 
                fiscal year after such 3-year accrual period; 
                and
                  [(IV) eliminated if the designation as a 
                troubled agency is not removed before the 
                conclusion of the fourth fiscal year after such 
                3-year accrual period.
          [(iv) After a determination by the Secretary that an 
        agency is not a troubled agency, the Secretary shall 
        provide the agency with amounts made available under 
        this clause in accordance with the amount of credits 
        accumulated by the agency (subject to the reductions 
        under clause (iii)). Such amounts shall be provided in 
        addition to the amounts allocated to the agency 
        pursuant to the formula under paragraph (2). In each 
        fiscal year, the Secretary shall reserve from amounts 
        available for allocation under paragraph (2)(A) the 
        amount necessary to provide assistance pursuant to such 
        credits, except that the reserved amount may not exceed 
        5 percent of the total amount available for allocation 
        under such paragraph.
          [(v) In making payments for accrued credits in 
        accordance with clause (iv), the Secretary may take 
        into account the ability of the agency to expeditiously 
        expend amounts received for credits.
      [(E) The Secretary shall, by regulation, establish 
special rules for limiting the amount of assistance provided 
under this section to agencies that become troubled after the 
date of the initial designation of troubled agencies under 
section 6(j)(2)(A)(i). The rules may provide for a credit 
system based on the system established under this paragraph.
  [(6) Any amounts (A) allocated under paragraph (4) that 
become available for reallocation because an agency does not 
qualify to receive all or a part of its formula allocation due 
to failure to comply with the requirements of this section 
(other than because of designation as a troubled agency), and 
(B) recaptured by the Secretary for good cause, shall (subject 
to approval in appropriations Acts) be reallocated by the 
Secretary in the next fiscal year to other housing agencies 
that own or operate 250 or more units, based on their relative 
needs. The relative needs of agencies shall be measured by the 
formula established pursuant to paragraph (2)(A).
  [(7) A public housing agency may appeal the amount of its 
allocation determined under the formula on the basis of unique 
circumstances or on the basis that the objectively measurable 
data regarding the agency, community, and project 
characteristics used for determining the formula amount were 
not correct.
  [(8) Amounts allocated to a public housing agency under 
paragraph (3) or (4) may be used for any eligible activity in 
accordance with this section, notwithstanding that the 
allocation amount is determined by allocating half based on 
relative backlog needs and half based on relative accrued needs 
of agencies.
  [(l) The Secretary shall include in the annual report under 
section 8 of the Department of Housing and Urban Development 
Act--
          [(1) a description of the allocation, distribution, 
        and use of assistance under this section on a regional 
        basis and on the basis of public housing agency size; 
        and
          [(2) a national compilation of the total funds 
        requested in comprehensive plans for all public housing 
        agencies owning or operating 250 or more public housing 
        dwelling units.
  [(m) Subject to subsection (k)(1), the Secretary may issue 
any regulations that are necessary to carry out this section.
  [(n) Limitation.--The Secretary shall not make assistance 
under this section available with respect to a property 
transferred under title III.
  [(o) Any amount that the Secretary has obligated to a public 
housing agency under this section other than pursuant to the 
program established under subsection (e), shall be used for the 
purposes for which such amount was provided, or for purposes 
consistent with an action plan submitted by the agency under 
subsection (e) and approved by the Secretary, as the agency 
determines to be appropriate.
  [(p)(1) The Secretary shall require any public housing agency 
that has a vacancy rate among dwelling units owned or operated 
by the agency that exceeds twice the average vacancy rate among 
all agencies, that is designated as a troubled agency under 
section 6(j), or for which a receiver has been appointed 
pursuant to section 6(j)(3), to participate in the vacancy 
reduction program under this subsection.
  [(2) Each public housing agency participating in the program 
under this subsection shall develop and submit to the Secretary 
a vacancy  reduction  plan  regarding  vacancies  in  units  
owned  or operated by the agency. The plan shall include 
statements (A) identifying vacant dwelling units administered 
by the agency and explaining the reasons for the vacancies, (B) 
describing the actions to be taken by the agency during the 
following 5 years to eliminate the vacancies, (C) identifying 
any impediments that will prevent elimination of the vacancies 
within the 5-year period, (D) identifying any vacant units 
subject to comprehensive modernization, major reconstruction, 
demolition, and disposition activities that have been funded or 
approved, (E) identifying any vacant dwelling units that are 
eligible for comprehensive modernization, major reconstruction, 
demolition, or disposition but have not been funded or approved 
for such activities and are not likely to be funded or approved 
for at least 3 years and estimating the amount of assistance 
necessary to complete the comprehensive modernization, major 
reconstruction, demolition, or disposition of such units, (F) 
identifying any vacant units not identified under subparagraphs 
(E) and (F) and describing any appropriate activities relating 
to elimination of the vacancies in such units and estimating 
the amount of assistance necessary to carry out the activities, 
and (G) setting forth an agenda for implementation of 
management improvements (including, as appropriate, 
improvements recommended by the assessment team pursuant to 
paragraph (3)(C)) during the first fiscal year beginning after 
submission of the plan and including an estimate of the amount 
of assistance necessary to implement the improvements.
  [(3)(A) Upon the expiration of the 24-month period beginning 
upon the receipt of assistance under paragraph (5) by a public 
housing agency, the Secretary shall, after reviewing the 
progress made in complying with the plan, reserve from the 
annual contribution attributable to each unit vacant for the 
24-month period an amount determined by the Secretary but not 
exceeding 80 percent of such contribution. The Secretary may 
not reserve any amounts under this subparagraph for any vacant 
dwelling unit that is vacant because of modernization, 
reconstruction, or lead-based paint reduction activities.
  [(B) The Secretary shall deposit any amounts reserved under 
subparagraph (A) in a separate account established on behalf of 
the public housing agency, and such amounts shall be available 
to the agency only for the purpose of carrying out activities 
in compliance with the vacancy reduction plan of the agency.
  [(C) If, after the expiration of the 24-month period 
beginning upon the reservation under subparagraph (A) of 
amounts for a public housing agency, the Secretary determines 
that the agency has not made significant progress to comply 
with the provisions of the vacancy reduction plan of the 
agency, the amount remaining in the account for the agency 
established under subparagraph (B) shall be recaptured by the 
Secretary.
  [(4)(A) In cooperation with each agency participating in the 
program under this subsection, the Secretary shall provide for 
onsite assessment of the vacancy situation of the agency by a 
team of knowledgeable observers. The assessment team shall 
include representatives of the Department of Housing and Urban 
Development, an equal number of independent experts 
knowledgeable with respect to vacancy problems and management 
issues relating to public housing, and officials of the public 
housing agency, all of whom shall be selected by the Secretary. 
The assessment team shall assess the vacancy situation of the 
agency to determine the causes of the vacancies, including any 
management deficiencies or modernization activities.
  [(B) The assessment team shall also examine indicators of the 
management performance of the agency relating to vacancy, which 
shall include consideration of the performance of the agency as 
measured by the indicators under subparagraphs (A) and (E) of 
section 6(j)(1).
  [(C) The assessment team shall submit to the agency and the 
Secretary written recommendations for management improvements 
to eliminate or alleviate management deficiencies, and may 
assist the agency in preparing the vacancy reduction plan under 
paragraph (2), including determining appropriate actions to 
eliminate vacancies.
  [(D) The Secretary may use amounts made available under 
paragraph (6) for any travel and administrative expenses of 
assessment teams under this paragraph.
  [(5) The Secretary shall, subject to the availability of 
amounts under paragraph (6), provide assistance under this 
subsection to public housing agencies submitting vacancy 
reduction plans for reasonable costs of--
          [(A) implementing management improvements;
          [(B) rehabilitating vacant dwelling units identified 
        in the statement under paragraph (2), except that the 
        Secretary may provide assistance to a public housing 
        agency designated as a troubled agency for the purposes 
        under this subparagraph only if the Secretary 
        determines that the agency is making substantial 
        progress in remedying management deficiencies, if any, 
        or that the agency has provided reasonable assurances 
        that such progress will be made; and
          [(C) carrying out vacancy reduction activities 
        described in the statement under paragraph (2).
  [(6)(A) Of any amounts available under this section in each 
of fiscal years 1993 and 1994 (after amounts are reserved 
pursuant to subsection (k)(1)), an amount equal to 4 percent of 
such remaining funds shall be available in each such fiscal 
year for the purposes under subparagraph (B).
  [(B) Of such amounts available under subparagraph (A) in each 
such fiscal year--
          [(i) 20 percent shall be available only for carrying 
        out activities under section 6(j); and
          [(ii) 80 percent shall be available for carrying out 
        this subsection.
  [(q)(1) In addition to the purposes enumerated in subsections 
(a) and (b), a public housing agency may use modernization 
assistance provided under section 14, and development 
assistance provided under section 5(a) that was not allocated, 
as determined by the Secretary, for priority replacement 
housing, for any eligible activity authorized by this section, 
by section 5, or by applicable Appropriations Acts for a public 
housing agency, including the demolition, rehabilitation, 
revitalization, and replacement of existing units and projects 
and, for up to 10 percent of its allocation of such funds in 
any fiscal year, for any operating subsidy purpose authorized 
in section 9. Except for assistance used for operating subsidy 
purposes under the preceding sentence, assistance provided to a 
public housing agency under this section shall principally be 
used for the physical improvement, replacement of public 
housing, other capital purposes, and for associated management 
improvements, and such other extraordinary purposes as may be 
approved by the Secretary. Low-income and very low-income units 
assisted under this paragraph shall be eligible for operating 
subsidies, unless the Secretary determines that such units or 
projects do not meet other requirements of this Act.
  [(2) A public housing agency may provide assistance to 
developments that include units, other than units assisted 
under this Act (except for units assisted under section 8 
hereof) (``mixed income developments''), in the form of a 
grant, loan, operating assistance, or other form of investment 
which may be made to--
          [(A) a partnership, a limited liability company, or 
        other legal entity in which the public housing agency 
        or its affiliate is a general partner, managing member, 
        or otherwise participates in the activities of such 
        entity; or
          [(B) any entity which grants to the public housing 
        agency the option to purchase the development within 20 
        years after initial occupancy in accordance with 
        section 42(i)(7) of the Internal Revenue Code of 1986, 
        as amended.
          [Units shall be made available in such developments 
        for periods of not less than 20 years, by master 
        contract or by individual lease, for occupancy by low-
        income and very low-income families referred from time 
        to time by the public housing agency. The number of 
        such units shall be:
                  [(i) in the same proportion to the total 
                number of units in such development that the 
                total financial commitment provided by the 
                public housing agency bears to the value of the 
                total financial commitment in the development, 
                or
                  [(ii) not be less than the number of units 
                that could have been developed under the 
                conventional public housing program with the 
                assistance involved, or
                  [(iii) as may otherwise be approved by the 
                Secretary.
  [(3) A mixed income development may elect to have all units 
subject only to the applicable local real estate taxes, 
notwithstanding that the low-income units assisted by public 
housing funds would otherwise be subject to section 6(d) of the 
Housing Act of 1937.
  [(4) If an entity that owns or operates a mixed-income 
project under this subsection enters into a contract with a 
public housing agency, the terms of which obligate the entity 
to operate and maintain a specified number of units in the 
project as public housing units in accordance with the 
requirements of this Act for the period required by law, such 
contractual terms may provide that, if, as a result of a 
reduction in appropriations under section 9, or any other 
change in applicable law, the public housing agency is unable 
to fulfill its contractual obligations with respect to those 
public housing units, that entity may deviate, under procedures 
and requirements developed through regulations by the 
Secretary, from otherwise applicable restrictions under this 
Act regarding rents, income eligibility, and other areas of 
public housing management with respect to a portion or all of 
those public housing units, to the extent necessary to preserve 
the viability of those units while maintaining the low-income 
character of the units, to the maximum extent practicable.

                      [payment of nonfederal share

  [Sec. 15. Any of the following may be used as the non-Federal 
share required in connection with activities undertaken under 
Federal grant-in-aid programs which provide social, 
educational, employment, and other services to the tenants in a 
project assisted under this Act, other than under section 8:
          [(1) annual contributions under this Act for 
        operation of the project; or
          [(2) rental or use-value of buildings or facilities 
        paid for, in whole or in part, from development, 
        modernization, or operation cost financed under this 
        Act.

                   [eligibility for assisted housing6

  [Sec. 16. (a) Not more than 25 per centum of the dwelling 
units which were available for occupancy under public housing 
annual contributions contracts and section 8 housing assistance 
payments contracts under this Act before the effective date of 
the Housing and Community Development Amendments of 1981, and 
which will be leased on or after such effective date shall be 
available for leasing by low-income families other than very 
low-income families.
  [(b)(1) Not more than 15 percent of the dwelling units which 
become available for occupancy under public housing 
contributions contracts and section 8 housing assistance 
payments contracts under this Act on or after the effective 
date of the Housing andCommunity Development Amendments of 1981 
shall be available for leasing by low-income families other than very 
low-income families.
  [(2) Not more than 25 percent of the dwelling units in any 
project of any agency shall be available for occupancy by low-
income families other than very low-income families. The 
limitation shall not apply in the case of any project in which, 
before the date of the enactment of the Cranston-Gonzalez 
National Affordable Housing Act, such low-income families 
occupy more than 25 percent of the dwelling units.
  [(c) In developing admission procedures implementing 
subsection (b), the Secretary may not totally prohibit 
admission of low-income families other than very low-income 
families and shall establish an appropriate specific percentage 
of low-income families other than very-low-income families that 
may be assisted in each assisted housing program that, when 
aggregated, will achieve the overall percentage limitation 
contained in subsection (b). In developing such admission 
procedures, the Secretary shall prohibit project owners from 
selecting families for residence in an order different from the 
order on the waiting list for the purpose of selecting 
relatively higher income families for residence; except that 
such prohibition shall not apply with respect to families 
selected for occupancy in public housing under the written 
system of preferences for selection established by the public 
housing agency pursuant to section 6(c)(4)(A). The Secretary 
shall issue regulations to carry out this subsection not later 
than 60 days after the date of the enactment of the Housing and 
Community Development Act of 1987.
  [(d)(1) The limitations established in subsection (b) shall 
not apply to dwelling units made available under section 8 
housing assistance contracts for the purpose of preventing 
displacement, or ameliorating the effects of displacement, 
including displacement caused by rents exceeding 30 percent of 
monthly adjusted family income, of low-income families from 
projects being rehabilitated with assistance from 
rehabilitation grants under section 17 and the Secretary shall 
not otherwise unduly restrict the use of payments under section 
8 housing assistance contracts for this purpose.
  [(2) The limitations established in subsections (a) and (b) 
shall not apply to dwelling units assisted by Indian public 
housing agencies, to scattered site public housing dwelling 
units sold or intended to be sold to public housing tenants 
under section 5(h) of this title..
  [(e) Ineligibility of Illegal Drug Users and Alcohol 
Abusers.--
          [(1) In general.--Notwithstanding any other provision 
        of law, a public housing agency shall establish 
        standards for occupancy in public housing dwelling 
        units and assistance under section 8--
                  [(A) that prohibit occupancy in any public 
                housing dwelling unit by, and assistance under 
                section 8 for, any person--
                          [(i) who the public housing agency 
                        determines is illegally using a 
                        controlled substance; or
                          [(ii) if the public housing agency 
                        determines that it has reasonable cause 
                        to believe that such person's illegal 
                        use (or pattern of illegal use) of a 
                        controlled substance, or abuse (or 
                        pattern of abuse) of alcohol, may 
                        interfere with the health, safety, or 
                        right to peaceful enjoyment of the 
                        premises by other residents of the 
                        project; and
                  [(B) that allow the public housing agency to 
                terminate the tenancy in any public housing 
                unit of, and the assistance under section 8 
                for, any person--
                          [(i) who the public housing agency 
                        determines is illegally using a 
                        controlled substance; or
                          [(ii) whose illegal use of a 
                        controlled substance, or whose abuse of 
                        alcohol, is determined by the public 
                        housing agency to interfere with the 
                        health, safety, or right to peaceful 
                        enjoyment of the premises by other 
                        residents of the project.
          [(2) Consideration of rehabilitation.--In determining 
        whether, pursuant to paragraph (1), to deny occupancy 
        or assistance to any person based on a pattern of use 
        of a controlled substance or a pattern of abuse of 
        alcohol, a public housing agency may consider whether 
        such person--
                  [(A) has successfully completed a supervised 
                drug or alcohol rehabilitation program (as 
                applicable) and is no longer engaging in the 
                illegal use of a controlled substance or abuse 
                of alcohol (as applicable);
                  [(B) has otherwise been rehabilitated 
                successfully and is no longer engaging in the 
                illegal use of a controlled substance or abuse 
                of alcohol (as applicable); or
                  [(C) is participating in a supervised drug or 
                alcohol rehabilitation program (as applicable) 
                and is no longer engaging in the illegal use of 
                a controlled substance or abuse of alcohol (as 
                applicable).
          [(3) Inapplicability to indian housing.--This 
        subsection does not apply to any dwelling unit assisted 
        by an Indian housing authority.

             [demolition and disposition of public housing

  [Sec. 18. (a) The Secretary may not approve an application by 
a public housing agency for permission, with or without 
financial assistance under this Act, to demolish or dispose of 
a public housing project or a portion of a public housing 
project unless the Secretary has determined that--
          [(1) in the case of an application proposing 
        demolition of a public housing project or a portion of 
        a public housing project, the project or portion of the 
        project is obsolete as to physical condition, location, 
        or other factors, making it unusable for housing 
        purposes, and no reasonable program of modifications is 
        feasible to return the project or portion of the 
        project to useful life; or in the case of an 
        application proposing the demolition of only a portion 
        of a project, the demolition will help to assure the 
        useful life of the remaining portion of the project;
          [(2) in the case of an application proposing 
        disposition of real property of a public housing agency 
        by sale or other transfer--
                  [(A)(i) the property's retention is not in 
                the best interests of the tenants or the public 
                housing agency because developmental changes in 
                the area surrounding the project adversely 
                affect the health or safety of the tenants or 
                the feasible operation of the project by the 
                public housing agency, because disposition 
                allows the acquisition, development, or 
                rehabilitation of other properties which will 
                be more efficiently or effectively operated as 
                low-income housing projects and which will 
                preserve the total amount of low-income housing 
                stock available in the community, or because of 
                other factors which the Secretary determines 
                are consistent with the best interests of the 
                tenants and public housing agency and which are 
                not inconsistent with other provisions of this 
                Act; and
                  [(ii) for property other than dwelling units, 
                the property is excess to the needs of a 
                project or the disposition is incidental to, or 
                does not interfere with, continued operation of 
                a project; and
                  [(B) the net proceeds of the disposition will 
                be used for (i) the payment of development cost 
                for the project and for the retirement of 
                outstanding obligations issued to finance 
                original development or modernization of the 
                project, which, in the case of scattered-site 
                housing of a public housing agency, shall be in 
                an amount that bears the same ratio to the 
                total of such costs and obligations as the 
                number of units disposed of bears to the total 
                number of units of the project at the time of 
                disposition, and (ii) to the extent that any 
                proceeds remain after the application of 
                proceeds in accordance with clause (i), the 
                provision of housing assistance for low-income 
                families through such measures as modernization 
                of low-income housing, or the acquisition, 
                development, or rehabilitation of other 
                properties to operate as low-income housing; or
          [(3) in the case of an application proposing 
        demolition or disposition of any portion of a public 
        housing project, assisted at any time under section 
        5(j)(2)--
                  [(A) such assistance has not been provided 
                for the portion of the project to be demolished 
                or disposed within the 10-year period ending 
                upon submission of the application; or
                  [(B) the property's retention is not in the 
                best interest of the tenants or the public 
                housing agency because of extraordinary changes 
                in the area surrounding the project or other 
                extraordinary circumstances of the project.
  [(b) The Secretary may not approve an application or furnish 
assistance under this section or under this Act unless--
          [(1) the application from the public housing agency 
        has been developed in consultation with tenants and 
        tenant councils, if any, who will be affected by the 
        demolition or disposition, and the tenant councils, 
        resident management corporation, and tenant cooperative 
        of the project or portion of the project covered by the 
        application, if any, have been given appropriate 
        opportunities to purchase the project or portion of the 
        project covered by the application, and contains a 
        certification by appropriate local government officials 
        that the proposed activity is consistent with the 
        applicable housing assistance plan; and
          [(2) all tenants to be displaced as a result of the 
        demolition or disposition will be given assistance by 
        the public housing agency and are relocated to other 
        decent, safe, sanitary, and affordable housing, which 
        is, to the maximum extent practicable, housing of their 
        choice, including housing assisted under section 8 of 
        this Act, and the public housing agency provides for 
        the payment of the relocation expenses of each tenant 
        to be displaced, ensures that the rent paid by the 
        tenant following relocation will not exceed the amount 
        permitted under this Act and shall not commence 
        demolition or disposition of any unit until the tenant 
        of the unit is relocated.
  [(c) Notwithstanding any other provision of law, the 
Secretary is authorized to make available financial assistance 
for applications approved under this section using available 
contributions authorized under section 5.
  [(d) A public housing agency shall not take any action to 
demolish or dispose of a public housing project or a portion of 
a public housing project without obtaining the approval of the 
Secretary and satisfying the conditions specified in 
subsections (a) and (b): Provided, That nothing in this section 
shall prevent a public housing agency from consolidating 
occupancy within or among buildings of a public housing 
project, or among projects, or with other housing for the 
purpose of improving the living conditions of or providing more 
efficient services to its tenants.
  [(e)(1) In each of fiscal years 1993 and 1994, the Secretary 
may reserve from any budget authority appropriated for such 
year for assistance under section 8 that is available for 
families not currently receiving such assistance not more than 
10 percent of such budget authority for providing replacement 
housing under subsection (b)(3)(A) for units demolished or 
disposed of pursuant to this section.
  [(2) In each of fiscal years 1993 and 1994, the Secretary may 
reserve from any budget authority appropriated for such year 
for development of public housing under section 5(a)(2) not 
more than the lesser of 30 percent of such budget authorization 
or $150,000,000, for providing replacement housing under 
subsection (b)(3)(A) for units demolished or disposed of 
pursuant to this section.
  [(f) Notwithstanding any other provision of law, replacement 
housing units for public housing units demolished may be built 
on the original public housing site or in the same neighborhood 
if the number of such replacement units is significantly fewer 
than the number of units demolished. No one may rely on the 
preceding sentence as the basis for reconsidering a final order 
of a court issued, or a settlement approved, by a court.
  [(g) The provisions of this section shall not apply to the 
disposition of a public housing project in accordance with an 
approved homeownership program under title III of this Act.

                         [financing limitations

  [Sec. 19. On and after October 1, 1983, the Secretary--
          [(1) may only enter into contracts for annual 
        contributions regarding obligations financing public 
        housing projects authorized by section 5(c) if such 
        obligations are exempt from taxation under section 
        11(b), or if such obligations are issued under section 
        4 and such obligations are exempt from taxation; and
          [(2) may not enter into contracts for periodic 
        payments to the Federal Financing Bank to offset the 
        costs to the Bank of purchasing obligations (as 
        described in the first sentence of section 16(b) of the 
        Federal Financing Bank Act of 1973) issued by local 
        public housing agencies for purposes of financing 
        public housing projects authorized by section 5(c) of 
        this Act.

                  [public housing resident management

  [Sec. 20. (a) Purpose.--The purpose of this section is to 
encourage increased resident management of public housing 
projects, as a means of improving existing living conditions in 
public housing projects, by providing increased flexibility for 
public housing projects that are managed by residents by--
          [(1) permitting the retention, and use for certain 
        purposes, of any revenues exceeding operating and 
        project costs; and
          [(2) providing funding, from amounts otherwise 
        available, for technical assistance to promote 
        formation and development of resident management 
        entities.
For purposes of this section, the term ``public housing 
project'' includes one or more contiguous buildings or an area 
of contiguous row houses the elected resident councils of which 
approve the establishment of a resident management corporation 
and otherwise meet the requirements of this section.
  [(b) Program Requirements.--
          [(1) Resident council.--As a condition of entering 
        into a resident management program, the elected 
        resident council of a public housing project shall 
        approve the establishment of a resident management 
        corporation. When such approval is made by the elected 
        resident council of a building or row house area, the 
        resident management program shall not interfere with 
        the rights of other families residing in the project or 
        harm the efficient operation of the project. The 
        resident management corporation and the resident 
        council may be the same organization, if the 
        organization complies with the requirements applicable 
        to both the corporation and council. The corporation 
        shall be a nonprofit corporation organized under the 
        laws of the State in which the project is located, and 
        the tenants of the project shall be the sole voting 
        members of the corporation. If there is no elected 
        resident council, a majority of the households of the 
        public housing project shall approve the establishment 
        of a resident council to determine the feasibility of 
        establishing a resident management corporation to 
        manage the project.
          [(2) Public housing management specialist.--The 
        resident council of a public housing project, in 
        cooperation with the public housing agency, shall 
        select a qualified public housing management specialist 
        to assist in determining the feasibility of, and to 
        help establish, a resident management corporation and 
        to provide training and other duties agreed to in the 
        daily operations of the project.
          [(3) Bonding and insurance.--Before assuming any 
        management responsibility for a public housing project, 
        the resident management corporation shall provide 
        fidelity bonding and insurance, or equivalent 
        protection, in accordance with regulations and 
        requirements of the Secretary and the public housing 
        agency. Such bonding and insurance, or its equivalent, 
        shall be adequate to protect the Secretary and the 
        public housing agency against loss, theft, 
        embezzlement, or fraudulent acts on the part of the 
        resident management corporation or its employees.
          [(4) Management responsibilities.--A resident 
        management corporation that qualifies under this 
        section, and that supplies insurance and bonding or 
        equivalent protection sufficient to the Secretary and 
        the public housing agency, shall enter into a contract 
        with the public housing agency establishing the 
        respective management rights and responsibilities of 
        the corporation and the public housing agency. Such 
        contract shall be consistent with the requirements of 
        this Act applicable to public housing projects and may 
        include specific terms governing management personnel 
        and compensation, access to public housing project 
        records, submission of and adherence to budgets, rent 
        collection procedures, tenant income verification, 
        tenant eligibility determinations, tenant eviction, the 
        acquisition of supplies and materials and such other 
        matters as may be appropriate. The contract shall be 
        treated as a contracting out of services and shall be 
        subject to any provision of a collective bargaining 
        agreement regarding contracting out to which the public 
        housing agency is subject.
          [(5) Annual audit.--The books and records of a 
        resident management corporation operating a public 
        housing project shall be audited annually by a 
        certified public accountant. A written report of each 
        audit shall be forwarded to the public housing agency 
        and the Secretary.
  [(c) Comprehensive Improvement Assistance.--Public housing 
projects managed by resident management corporations may be 
provided with comprehensive improvement assistance under 
section 14 for purposes of renovating such projects in 
accordance with such section. If such renovation activities 
(including the planning and architectural design of the 
rehabilitation) are administered by a resident management 
corporation, the public housing agency involved may not retain, 
for any administrative or other reason, any portion of the 
assistance provided pursuant to this subsection unless 
otherwise provided by contract.
  [(d) Waiver of Federal Requirements.--
          [(1) Waiver of regulatory requirements.--Upon the 
        request of any resident management corporation and 
        public housing agency, and after notice and an 
        opportunity to comment is afforded to the affected 
        tenants, the Secretary may waive (for both the resident 
        management corporation and the public housing agency) 
        any requirement established by the Secretary (and not 
        specified in any statute) that the Secretarydetermines 
to unnecessarily increase the costs or restrict the income of a public 
housing project.
          [(2) Waiver to permit employment.--Upon the request 
        of any resident management corporation, the Secretary 
        may, subject to applicable collective bargaining 
        agreements, permit residents of such project to 
        volunteer a portion of their labor.
          [(3) Report on additional waivers.--Not later than 6 
        months after the date of the enactment of the Housing 
        and Community Development Act of 1987, the Secretary 
        shall submit to the Congress a report setting forth any 
        additional waivers of Federal law that the Secretary 
        determines are necessary or appropriate to carry out 
        the provisions of this section. In preparing the 
        report, the Secretary shall consult with resident 
        management corporations and public housing agencies.
          [(4) Exceptions.--The Secretary may not waive under 
        this subsection any requirement with respect to income 
        eligibility for purposes of section 16, rental payments 
        under section 3(a), tenant or applicant protections, 
        employee organizing rights, or rights of employees 
        under collective bargaining agreements.
  [(e) Operating Subsidy and Project Income.--
          [(1) Calculation of operating subsidy.--
        Notwithstanding any provision of section 9 or any 
        regulation under such section, and subject to the 
        exception provided in paragraph (3), the portion of the 
        operating subsidy received by a public housing agency 
        under section 9 that is allocated to a public housing 
        project managed by a resident management corporation 
        shall not be less than the public housing agency per 
        unit monthly amount provided in the previous year as 
        determined on an individual project basis.
          [(2) Contract requirements.--Any contract for 
        management of a public housing project entered into by 
        a public housing agency and a resident management 
        corporation shall specify the amount of income expected 
        to be derived from the project itself (from sources 
        such as rents and charges) and the amount of income 
        funds to be provided to the project from the other 
        sources of income of the public housing agency (such as 
        operating subsidy under section 9, interest income, 
        administrative fees, and rents).
          [(3) Calculation of total income.--
                  [(A) Subject to subparagraph (B), the amount 
                of funds provided by a public housing agency to 
                a public housing project managed by a resident 
                management corporation may not be reduced 
                during the 3-year period beginning on the date 
                of enactment of the Housing and Community 
                Development Act of 1987 or on any later date on 
                which a resident management corporation is 
                first established for the project.
                  [(B) If the total income of a public housing 
                agency (including the operating subsidy 
                provided to the public housing agency under 
                section 9) is reduced or increased, the income 
                provided by the public housing agency to a 
                public housing project managed by a resident 
                management corporation shall be reduced or 
                increased in proportion to the reduction or 
                increase in the total income of the public 
                housing agency, except that any reduction in 
                operating subsidy that occurs as a result of 
                fraud, waste, or mismanagement by the public 
                housing agency shall not affect the funds 
                provided to the resident management 
                corporation.
          [(4) Retention of excess revenues.--
                  [(A) Any income generated by a resident 
                management corporation of a public housing 
                project that exceeds the income estimated for 
                purposes of this subsection shall be excluded 
                in subsequent years in calculating (i) the 
                operating subsidies provided to the public 
                housing agency under section 9; and (ii) the 
                funds provided by the public housing agency to 
                the resident management corporation.
                  [(B) Any revenues retained by a resident 
                management corporation under subparagraph (A) 
                shall be used for purposes of improving the 
                maintenance and operation of the public housing 
                project, for establishing business enterprises 
                that employ residents of public housing, or for 
                acquiring additional dwelling units for low-
                income families.
  [(f) Resident Management Technical Assistance and Training.--
          [(1) Financial assistance.--To the extent budget 
        authority is available for section 14, the Secretary 
        shall provide financial assistance to resident 
        management corporations or resident councils that 
        obtain, by contract or otherwise, technical assistance 
        for the development of resident management entities, 
        including the formation of such entities, the 
        development of the management capability of newly 
        formed or existing entities, the identification of the 
        social support needs of residents of public housing 
        projects, and the securing of such support.
          [(2) Limitation on assistance.--The financial 
        assistance provided under this subsection with respect 
        to any public housing project may not exceed $100,000.
          [(3) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection $4,750,000 for fiscal year 1993 and 
        $4,949,500 for fiscal year 1994.
          [(4) Limitation regarding assistance under hope grant 
        program.--The Secretary may not provide financial 
        assistance under this subsection to any resident 
        management corporation or resident council with respect 
        to which assistance for the development or formation of 
        such entity is provided under title III.
  [(g) Assessment and Report by the Secretary.--Not later than 
3 years after the date of the enactment of the Housing and 
Community Development Act of 1987, the Secretary shall--
          [(1) conduct an evaluation and assessment of resident 
        management, and particularly of the effect of resident 
        management on living conditions in public housing; and
          [(2) submit to the Congress a report setting forth 
        the findings of the Secretary as a result of the 
        evaluation and assessmentand including any 
recommendations the Secretary determines to be appropriate.
  [(h) Applicability.--Any management contract between a public 
housing agency and a resident management corporation that is 
entered into after the date of the enactment of the Stewart B. 
McKinney Homeless Assistance Amendments Act of 1988 shall be 
subject to this section and the regulations issued to carry out 
this section.

       [public housing homeownership and management opportunities

  [Sec. 21. (a) Homeownership Opportunities in General.--Lower 
income families residing in a public housing project shall be 
provided with the opportunity to purchase the dwelling units in 
the project through a qualifying resident management 
corporation as follows:
          [(1) Formation of resident management corporation.--
        As a condition for public housing homeownership--
                  [(A) the adult residents of a public housing 
                project shall have formed a resident management 
                corporation in accordance with regulations and 
                requirements of the Secretary prescribed under 
                this section and section 20;
                  [(B) the resident management corporation 
                shall have entered into a contract with the 
                public housing agency establishing the 
                respective management rights and 
                responsibilities of the resident management 
                corporation and the public housing agency; and
                  [(C) the resident management corporation 
                shall have demonstrated its ability to manage 
                public housing effectively and efficiently for 
                a period of not less than 3 years.
          [(2) Homeownership assistance.--
                  [(A) The Secretary may provide comprehensive 
                improvement assistance under section 14 to a 
                public housing project in which homeownership 
                activities under this section are conducted.
                  [(B) The Secretary may provide financial 
                assistance to public housing agencies, resident 
                management corporations, or resident councils 
                that obtain, by contract or otherwise, 
                training, technical assistance, and educational 
                assistance as the Secretary determines to be 
                necessary to promote homeownership 
                opportunities under this section.
                  [(C) This paragraph shall not have effect 
                after February 4, 1991. The Secretary may not 
                provide financial assistance under subparagraph 
                (B), after such date, unless the Secretary 
                determines that such assistance is necessary 
                for the development of a homeownership program 
                that was initiated, as determined by the 
                Secretary, before the date of the enactment of 
                the Cranston-Gonzalez National Affordable 
                Housing Act.
          [(3) Conditions of purchase by a resident management 
        corporation.--
                  [(A) A resident management corporation may 
                purchase from a public housing agency one or 
                more multifamily buildings in a public housing 
                project following a determination by the 
                Secretary that--
                          [(i) the resident management 
                        corporation has met the conditions of 
                        paragraph (1);
                          [(ii) the resident management 
                        corporation has applied for and is 
                        prepared to undertake the ownership, 
                        management, and maintenance of the 
                        building or buildings with continued 
                        assistance from the Secretary;
                          [(iii) the public housing agency has 
                        held one or more public hearings to 
                        obtain the views of citizens regarding 
                        the proposed purchase and, in 
                        consultation with the Secretary, has 
                        certified that the purchase will not 
                        interfere with the rights of other 
                        families residing in public housing, 
                        will not harm the efficient operation 
                        of other public housing, and is in the 
                        interest of the community;
                          [(iv) the public housing agency has 
                        certified that it has and will 
                        implement a plan to replace public 
                        housing units sold under this section 
                        within 30 months of the sale, which 
                        plan shall provide for replacement of 
                        100 percent of the units sold under 
                        this section by--
                                  [(I) production, acquisition, 
                                or rehabilitation of vacant 
                                public housing units by the 
                                public housing agency; and
                                  [(II) acquisition by the 
                                resident management corporation 
                                of nonpublicly owned, decent, 
                                and affordable housing units, 
                                which the resident management 
                                corporation shall operate as 
                                rental housing subject to 
                                tenant income and rent 
                                limitations comparable to the 
                                limitations applicable to 
                                public housing; and
                          [(v) the building or buildings meet 
                        the minimum safety and livability 
                        standards applicable under section 14, 
                        and the physical condition, management, 
                        and operation of the building or 
                        buildings are sufficient to permit 
                        affordable homeownership by the 
                        families residing in the project.
                  [(B) The price of a building purchased under 
                the preceding sentence shall be approved by the 
                Secretary, in consultation with the public 
                housing agency and resident management 
                corporation, taking into account the fair 
                market value of the property, the ability of 
                resident families to afford and maintain the 
                property, and such other factors as the 
                Secretary determines to be consistent with 
                increasing the supply of dwelling units 
                affordable to very low income families.
                  [(C) This paragraph shall not have effect 
                after February 4, 1991. The authority for a 
                resident management corporation to purchase 1 
                or more multifamily buildings in a public 
                housing project from a public housing agency 
                shall terminate after such date, unless the 
                Secretary determines that such purchase is 
                necessary for the development of ahomeownership 
program that was initiated, as determined by the Secretary, before the 
date of the enactment of the Cranston-Gonzalez National Affordable 
Housing Act.
          [(4) Conditions of resale.--
                  [(A)(i) A resident management corporation may 
                sell a dwelling unit or ownership rights in a 
                dwelling unit only to a lower income family 
                residing in, or eligible to reside in, public 
                housing and only if the Secretary determines 
                that the purchase will not interfere with the 
                rights of other families residing in the 
                housing project or harm the efficient operation 
                of the project, and the family will be able to 
                purchase and maintain the property.
                  [(ii) The sale of dwelling units or ownership 
                rights in dwelling units under clause (i) shall 
                be made to families in the following order of 
                priority:
                          [(I) a lower income family residing 
                        in the public housing project in which 
                        the dwelling unit is located;
                          [(II) a lower income family residing 
                        in any public housing project within 
                        the jurisdiction of the public housing 
                        agency having jurisdiction with respect 
                        to the project in which the dwelling 
                        unit is located;
                          [(III) a lower income family 
                        receiving Federal housing assistance 
                        and residing in the jurisdiction of 
                        such public housing agency; and
                          [(IV) a lower income family on the 
                        waiting list of such public housing 
                        agency for public housing or assistance 
                        under section 8, with priority given in 
                        the order in which the family appears 
                        on the waiting list.
                  [(iii) Each resident management corporation 
                shall provide each family described in clause 
                (ii) with a notice of the eligibility of the 
                family to purchase a dwelling unit under this 
                paragraph.
                  [(B) A purchase under subparagraph (A) may be 
                made under any of the following arrangements:
                          [(i) Limited dividend cooperative 
                        ownership.
                          [(ii) Condominium ownership.
                          [(iii) Fee simple ownership.
                          [(iv) Shared appreciation with a 
                        public housing agency providing 
                        financing under paragraph (6).
                          [(v) Any other arrangement determined 
                        by the Secretary to be appropriate.
                  [(C) Property purchased under this section 
                shall be resold only to the resident management 
                corporation, a lower income family residing in 
                or eligible to reside in public housing or 
                housing assisted under section 8, or to the 
                public housing agency.
                  [(D) In no case may the owner receive 
                consideration for his or her interest in the 
                property that exceeds the total of--
                          [(i) the contribution to equity paid 
                        by the owner;
                          [(ii) the value, as determined by 
                        such means as the Secretary shall 
                        determine through regulation, of any 
                        improvements installed at the expense 
                        of the owner during the owner's tenure 
                        as owner; and
                          [(iii) the appreciated value 
                        determined by an inflation allowance at 
                        a rate which may be based on a cost of 
                        living index, an income index, or 
                        market index as determined by the 
                        Secretary through regulation and agreed 
                        to by the purchaser and the resident 
                        management corporation or the public 
                        housing agency, whichever is 
                        appropriate, at the time of initial 
                        sale, and applied against the 
                        contribution to equity; the resident 
                        management corporation or the public 
                        housing agency may, at the time of 
                        initial sale, enter into an agreement 
                        with the owner to set a maximum amount 
                        which this appreciation may not exceed.
                  [(E) Upon sale, the resident management 
                corporation or the public housing agency, 
                whichever is appropriate, shall ensure that 
                subsequent owners are bound by the same 
                limitations on resale and further restrictions 
                on equity appreciation.
          [(5) Use of proceeds.--Notwithstanding any other 
        provision of this Act or other law to the contrary, 
        proceeds from the sale of a building or buildings under 
        paragraph (3) and amounts recaptured under paragraph 
        (4) shall be paid to the public housing agency and 
        shall be retained and used by the public housing agency 
        only to increase the number of public housing units 
        available for occupancy. The resident management 
        corporation shall keep and make available to the public 
        housing agency and the Secretary all records necessary 
        to calculate accurately payments due the local housing 
        agency under this section. The Secretary shall not 
        reduce or delay payments under other provisions of law 
        as a result of amounts made available to the local 
        housing agency under this section.
          [(6) Financing.--When financing for the purchase of 
        the property is not otherwise available for purposes of 
        assisting any purchase by a family or resident 
        management corporation under this section, the public 
        housing agency involved may make a loan on the security 
        of the property involved to the family or resident 
        management corporation at a rate of interest that shall 
        not be lower than 70 percent of the market interest 
        rate for conventional mortgages on the date on which 
        the loan is made.
          [(7) Annual contributions.--Notwithstanding the 
        purchase of a building in a public housing project 
        under this section, the Secretary shall continue to pay 
        annual contributions with respect to the project. Such 
        contributions may not exceed the maximum contributions 
        authorized in section 5(a).
          [(8) Operating subsidies.--Operating subsidies shall 
        not be available with respect to a building after the 
        date of its sale by the public housing agency.
  [(b) Protection of Nonpurchasing Families.--
          [(1) Eviction prohibition.--No family residing in a 
        dwelling unit in a public housing project may be 
        evicted by reason of the sale of the project to a 
        resident management corporation under this section.
          [(2) Tenants rights.--Families renting a dwelling 
        unit purchased by a resident management corporation 
        shall have all rights provided to tenants of public 
        housing under this Act.
          [(3) Rental assistance.--If any family resides in a 
        dwelling unit in a building purchased by a resident 
        management corporation, and the family decides not to 
        purchase the dwelling unit, the Secretary shall offer 
        to provide to the family (at the option of the family) 
        a certificate under section 8(b)(1) or a housing 
        voucher under section 8(o) for as long as the family 
        continues to reside in the building. The Secretary may 
        adjust the fair market rent for such certificate to 
        take into account conditions under which the building 
        was purchased.
          [(4) Rental and relocation assistance.--If any family 
        resides in a dwelling unit in a public housing project 
        in which other dwelling units are purchased under this 
        section, and the family decides not to purchase the 
        dwelling unit, the Secretary shall offer (to be 
        selected by the family, at its option)--
                  [(A) to assist the family in relocating to a 
                comparable appropriate sized dwelling unit in 
                another public housing project, and to 
                reimburse the family for their cost of 
                relocation; and
                  [(B) to provide to the family the financial 
                assistance necessary to permit the family to 
                stay in the dwelling unit or to move to another 
                comparable dwelling unit and to pay no more for 
                rent than required under subparagraph (A), (B), 
                or (C) of section 3(a)(1).
  [(c) Financial Assistance for Public Housing Agencies.--The 
Secretary shall provide to public housing agencies such 
financial assistance as is necessary to permit such agencies to 
carry out the provisions of this section.
  [(d) Additional Homeownership and Management Opportunities.--
This section shall not apply to the turnkey III, the mutual 
help, or any other homeownership program established under 
section 5(h) or section 6(c)(4)(D) and in existence before the 
date of the enactment of the Housing and Community Development 
Act of 1987.
  [(e) Regulations.--The Secretary shall issue such regulations 
as may be necessary to carry out the provisions of this 
section. Such regulations may establish any additional terms 
and conditions for homeownership or resident management under 
this section that are determined by the Secretary to be 
appropriate.
  [(g) Limitation.--Any authority of the Secretary under this 
section to provide financial assistance, or to enter into 
contracts to provide financial assistance, shall be effective 
only to such extent or in such amounts as are or have been 
provided in advance in an appropriation Act.

                       [family investment centers

  [Sec. 22. (a) Purpose.--The purpose of this section is to 
provide families living in public housing with better access to 
educational and employment opportunities to achieve self-
sufficiency and independence by--
          [(1) developing facilities in or near public housing 
        for training and support services;
          [(2) mobilizing public and private resources to 
        expand and improve the delivery of such services;
          [(3) providing funding for such essential training 
        and support services that cannot otherwise be funded; 
        and
          [(4) improving the capacity of management to assess 
        the training and service needs of families with 
        children, coordinate the provision of training and 
        services that meet such needs, and ensure the longterm 
        provision of such training and services.
  [(b) Grant Authority.--
          [(1) In general.--The Secretary may make grants to 
        public housing agencies to adapt public housing to help 
        families living in the public housing gain better 
        access to educational and job opportunities to achieve 
        self-sufficiency and independence. Assistance under 
        this section may be made available only to public 
        housing agencies that demonstrate to the satisfaction 
        of the Secretary that supportive services (as such term 
        is defined under subsection (j)) will be made 
        available. Facilities assisted under this section shall 
        be in or near the premises of public housing.
          [(2) Supplemental grant set-aside.--The Secretary may 
        reserve not more than 5 percent of the amounts 
        available in each fiscal year under this section to 
        supplement grants awarded to public housing agencies 
        under this section when, in the determination of the 
        Secretary, such supplemental adjustments are required 
        to maintain adequate levels of services to eligible 
        residents.
  [(c) Use of Amounts.--Amounts received from a grant under 
this section may only be used for--
          [(1) the renovation, conversion, or combination of 
        vacant dwelling units in a public housing project to 
        create common areas to accommodate the provision of 
        supportive services;
          [(2) the renovation of existing common areas in a 
        public housing project to accommodate the provision of 
        supportive services;
          [(3) the renovation of facilities located near the 
        premises of 1 or more public housing projects to 
        accommodate the provision of supportive services;
          [(4) the provision of not more than 15 percent of the 
        cost of any supportive services (which may be provided 
        directly to eligible residents by the public housing 
        agency or by contract or lease through other 
        appropriate agencies or providers) only if the public 
        housing agency demonstrates to the satisfaction of the 
        Secretary that--
                  [(A) the supportive services are appropriate 
                to improve the access of eligible residents to 
                employment and educational opportunities; and
                  [(B) the public housing agency has made 
                diligent efforts to use or obtain other 
                available resources to fund or provide such 
                services; and
          [(5) the employment of service coordinators subject 
        to such minimum qualifications and standards that the 
        Secretary may establish to ensure sound management, who 
        may be responsible for--
                  [(A) assessing the training and service needs 
                of eligible residents;
                  [(B) working with service providers to 
                coordinate the provision of services and tailor 
                such services to the needs and characteristics 
                of eligible residents;
                  [(C) mobilizing public and private resources 
                to ensure that the supportive services 
                identified pursuant to subsection (e)(1) can be 
                funded over the time period identified under 
                such subsection;
                  [(B) monitoring and evaluating the impact and 
                effectiveness of any supportive service program 
                receiving capital or operating assistance under 
                this section; and
                  [(V) performing such other duties and 
                functions that the Secretary determines are 
                appropriate to provide families living in 
                public housing with better access to 
                educational and employment opportunities.
  [(d) Allocation of Grant Amounts.--Assistance under this 
section shall be allocated by the Secretary among approvable 
applications submitted by public housing agencies.
  [(e) Applications.--Applications for assistance under this 
section shall be submitted in such form and in accordance with 
such procedures as the Secretary shall establish. Each 
application for assistance shall contain--
          [(1) a description of the supportive services that 
        are to be provided over a 5-year period (or such longer 
        period that the Secretary determines to be appropriate 
        if assistance is provided for activities under 
        subsection (c) that involve substantial 
        rehabilitation);
          [(2) a firm commitment of assistance from 1 or more 
        sources ensuring that the supportive services will be 
        provided for not less than 1 year following the 
        completion of activities assisted under subsection (c);
          [(3) a description of public or private sources of 
        assistance that can reasonably be expected to fund or 
        provide supportive services for the entire period 
        specified under paragraph (1), including evidence of 
        any intention to provide assistance expressed by State 
        and local governments, private foundations, and other 
        organizations (including profit and nonprofit 
        organizations);
          [(4) certification from the appropriate State or 
        local agency (as determined by the Secretary) that--
                  [(A) the provision of supportive services 
                described in paragraph (1) is well designed to 
                provide resident families better access to 
                educational and employment opportunities; and
                  [(B) there is a reasonable likelihood that 
                such services will be funded or provided for 
                the entire period specified in paragraph (1);
          [(5) a description of assistance for which the public 
        housing agency is applying under this section; and
          [(6) any other information or certifications that the 
        Secretary determines are necessary or appropriate to 
        achieve the purposes of this section.
  [(f) Selection.--The Secretary shall establish selection 
criteria for grants under this section, which shall take into 
account--
          [(1) the ability of the public housing agency or a 
        designated service provider to provide the supportive 
        services identified under subsection (e)(1);
          [(2) the need for such services in the public housing 
        project;
          [(3) the extent to which the envisioned renovation, 
        conversion, and combination activities are appropriate 
        to facilitate the provision of such services;
          [(4) the extent to which the public housing agency 
        has demonstrated that such services will be provided 
        for the period identified under subsection (e)(1);
          [(5) the extent to which the public housing agency 
        has a good record of maintaining and operating public 
        housing; and
          [(6) any other factors that the Secretary determines 
        to be appropriate to ensure that amounts made available 
        under this section are used effectively.
  [(g) Reports.--
          [(1) To secretary.--Each public housing agency 
        receiving a grant under this section shall submit to 
        the Secretary, in such form and at such time as the 
        Secretary shall prescribe, an annual progress report 
        describing and evaluating the use of grant amounts 
        received under this section.
          [(2) To congress.--The Secretary shall submit to the 
        Congress annually, as a part of the report of the 
        Secretary under section 8 of the Department of Housing 
        and Urban Development Act, an evaluation of the 
        effectiveness of activities carried out with grants 
        under this section in such fiscal year. Such report 
        shall summarize the progress reports submitted pursuant 
        to paragraph (1).
  [(h) Employment of Public Housing Residents.--Each public 
housing agency shall, to the maximum extent practicable, employ 
public housing residents to provide the services assisted under 
this section or from other sources. Such persons shall be paid 
at a rate not less than the highest of--
          [(1) the minimum wage that would be applicable to the 
        employee under the Fair Labor Standards Act of 1938, if 
        section 6(a)(1) of such Act applied to the resident and 
        if the resident were not exempt under section 13 of 
        such Act;
          [(2) the State or local minimum wage for the most 
        nearly comparable covered employment; or
          [(3) the prevailing rates of pay for persons employed 
        in similar public occupations by the same employer.
  [(i) Treatment of Income.--No service provided to a public 
housing resident under this section may be treated as income 
for the purpose of any other program or provision of State or 
Federal law.
  [(j) Definition of Supportive Services.--For purpose of this 
section, the term ``supportive services'' means new or 
significantly expanded services that the Secretary determines 
are essential to providing families living with children in 
public housing with better access to educational and employment 
opportunities. Such services may include--
          [(1) child care;
          [(2) employment training and counseling;
          [(3) literacy training;
          [(4) computer skills training;
          [(5) assistance in the attainment of certificates of 
        high school equivalency; and
          [(6) other appropriate services.
  [(k) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section $25,000,000 for 
fiscal year 1993 and $26,050,000 for fiscal year 1994.

SEC. 23. FAMILY SELF-SUFFICIENCY PROGRAM.

  [(a) Purpose.--The purpose of the Family Self-Sufficiency 
program established under this section is to promote the 
development of local strategies to coordinate use of public 
housing and assistance under the certificate and voucher 
programs under section 8 with public and private resources, to 
enable eligible families to achieve economic independence and 
self-sufficiency.
  [(b) Establishment of Program.--
          [(1) Required programs.--Except as provided in 
        paragraph (2), the Secretary shall carry out a program 
        under which each public housing agency that administers 
        assistance under subsection (b) or (o) of section 8 or 
        makes available new public housing dwelling units--
                  [(A) may, during fiscal years 1991 and 1992, 
                carry out a local Family Self-Sufficiency 
                program under this section; and
                  [(B) effective on October 1, 1992, the 
                Secretary shall require each such agency to 
                carry out a local Family Self-Sufficiency 
                program under this section.
        Each local program shall, subject to availability of 
        supportive services, include an action plan under 
        subsection (g) and shall provide comprehensive 
        supportive services for families electing to 
        participate in the program. In carrying out the self-
        sufficiency program under this section, the Secretary 
        shall consult with the heads of other appropriate 
        Federal agencies and provide for cooperative actions 
        and funding agreements with such agencies. Each public 
        housing agency administering an approved local program 
        may employ a service coordinator to administer the 
        local program.
          [(2) Exception.--The Secretary shall not require a 
        public housing agency to carry out a local program 
        under subsection (a) if the public housing agency 
        provides certification (as such term is defined under 
        title I of the Cranston-Gonzalez National Affordable 
        Housing Act) to the Secretary, that the establishment 
        and operation of the program is not feasible because of 
        local circumstances, which may include--
                  [(A) lack of supportive services accessible 
                to eligible families, which shall include 
                insufficient availability of resources for 
                programs under the Job Training Partnerships 
                Act or the Job Opportunities and Basic Skills 
                Training Program under part F of title IV of 
                the Social Security Act;
                  [(B) lack of funding for reasonable 
                administrative costs;
                  [(C) lack of cooperation by other units of 
                State or local government; or
                  [(D) any other circumstances that the 
                Secretary may consider appropriate.
        In allocating assistance available for reservation 
        under this Act, the Secretary may not refuse to provide 
        assistance or decrease the amount of assistance that 
        would otherwise be provided to any public housing 
        agency because the agency has provided a certification 
        under this paragraph or because, pursuant to a 
        certification, the agency has failed to carry out a 
        self-sufficiency program.
          [(3) Scope.--Each public housing agency required to 
        carry out a local program under this section shall make 
        the following housing assistance available under the 
        program in each fiscal year:
                  [(A) Certificate and voucher assistance under 
                section 8(b) and (o), in an amount equivalent 
                to the increase for such year in the number of 
                families so assisted by the agency (as compared 
                to the preceding year).
                  [(B) Public housing dwelling units, in the 
                number equal to the increase for such year in 
                units made available by the agency (as compared 
                to the preceding year).
          [Each such public housing agency shall continue to 
        operate a local program for the number of families 
        determined under this paragraph subject only to the 
        availability under appropriations Acts of sufficient 
        amounts for assistance.
          [(4) Nonparticipation.--Assistance under the 
        certificate or voucher programs under section 8 for a 
        family that elects not to participate in a local 
        program shall not be delayed by reason of such 
        election.
  [(c) Contract of Participation.--
          [(1) In general.--Each public housing agency carrying 
        out a local program under this section shall enter into 
        a contract with each leaseholder receiving assistance 
        under the certificate and voucher programs of the 
        public housing agency under section 8 or residing in 
        public housing administered by the agency, that elects 
        to participate in the self-sufficiency program under 
        this section. The contract shall set forth the 
        provisions of the local program, shall establish 
        specific interim and final goals by which compliance 
        with and performance of the contract may be measured, 
        and shall specify the resources and supportive services 
        to be made available to the participating family 
        pursuant to paragraph (2) and the responsibilities of 
        the participating family. The contract shall provide 
        that the public housing agency may terminate or 
        withhold assistance under section 8 and services under 
        paragraph (2) of this subsection if the public housing 
        agency determines, through an administrative grievance 
        procedure in accordance with the requirements of 
        section 6(k), that the family has failed to comply with 
        the requirements of the contract without good cause 
        (which may include a loss or reduction in access to 
        supportive services, or a change in circumstances that 
        makes the family or individual unsuitable for 
        participation).
          [(2) Supportive services.--A local program under this 
        section shall provide appropriate supportive services 
        under this paragraph to each participating family 
        entering into a contract of participation under 
        paragraph (1). The supportive services shall be 
        provided during the period the family is receiving 
        assistance under section 8 or residing in public 
        housing, and may include--
                  [(A) child care;
                  [(B) transportation necessary to receive 
                services;
                  [(C) remedial education;
                  [(D) education for completion of high school;
                  [(E) job training and preparation;
                  [(F) substance abuse treatment and 
                counseling;
                  [(G) training in homemaking and parenting 
                skills;
                  [(H) training in money management;
                  [(I) training in household management; and
                  [(J) any other services and resources 
                appropriate to assist eligible families to 
                achieve economic independence and self-
                sufficiency.
          [(3) Term and extension.--Each family participating 
        in a local program shall be required to fulfill its 
        obligations under the contract of participation not 
        later than 5 years after entering into the contract. 
        The public housing agency shall extend the term of the 
        contract for any family that requests an extension, 
        upon a finding of the agency of good cause.
          [(4) Employment and counseling.--The contract of 
        participation shall require the head of the 
        participating family to seek suitable employment during 
        the term of the contract. The public housing agency 
        may, during such period, provide counseling for the 
        family with respect to affordable rental and 
        homeownership opportunities in the private housing 
        market and money management counseling.
  [(d) Incentives for Participation.--
          [(1) Maximum rents.--During the term of the contract 
        of participation, the amount of rent paid by any 
        participating family whose monthly adjusted income does 
        not exceed 50 percent of the area median income for 
        occupancy in the public housing unit or dwelling unit 
        assisted under section 8 may not be increased on the 
        basis of any increase in the earned income of the 
        family, unless the increase results in an income 
        exceeding 50 percent of the area median income. The 
        Secretary shall provide for increased rents for 
        participating families whose incomes are between 50 and 
        80 percent of the area median income, so that any 
        family whose income increases to 80 percent or more of 
        the area median income pays 30 percent of the family's 
        monthly adjusted income for rent. Upon completion of 
        the contract of participation, if the participating 
        family continues to qualify for and reside in a 
        dwelling unit in public housing or housing assisted 
        under section 8, the rent charged the participating 
        family shall be increased (if applicable) to 30 percent 
        of the monthly adjusted income of the family.
          [(2) Escrow savings accounts.--For each participating 
        family whose monthly adjusted income is less than 50 
        percent of the area median income, the difference 
        between 30 percent of the adjusted income of the 
        participating family and the amount of rent paid by a 
        participating family shall be placed in an interest-
        bearing escrow account established by the public 
        housing agency on behalf of the participating family. 
        For families with incomes between 50 and 80 percent of 
        the area median income, the Secretary shall provide for 
        escrow of the difference between 30 percent of the 
        family income and the amount paid by the family for 
        rent as determined by the Secretary under paragraph 
        (1). The Secretary shall not escrow any amounts for any 
        family whose adjusted income exceeds 80 percent of the 
        area median income. Amounts in the escrow account may 
        be withdrawn by the participating family after the 
        family ceases to receive income assistance under 
        Federal or State welfare programs, upon successful 
        performance of the obligations of the family under the 
        contract of participation entered into by the family 
        under subsection (c), as determined according to the 
        specific goals and terms included in the contract, and 
        under other circumstances in which the Secretary 
        determines an exception for good cause is warranted. A 
        public housing agency establishing such escrow accounts 
        may make certain amounts in the accounts available to 
        the participating families before full performance of 
        the contract obligations based on compliance with, and 
        completion of, specific interim goals included in the 
        contract; except that any such amounts shall be used by 
        the participating families for purposes consistent with 
        the contracts of participation, as determined by the 
        public housing agency.
          [(3) Plan.--Each public housing agency carrying out a 
        local program under this section shall establish a plan 
        to offer incentives to families to encourage families 
        to participate in the program. The plan shall require 
        the establishment of escrow savings accounts under 
        paragraph (2) and may include any other incentives 
        designed by the public housing agency.
          [(3) Use of escrow savings accounts for section 8 
        homeownership.--Notwithstanding paragraph (3), a family 
        that uses assistance under section 8(y) to purchase a 
        dwelling may use up to 50 percent of the amount in its 
        escrow account established under paragraph (3) for a 
        downpayment on the dwelling. In addition, after the 
        family purchases the dwelling, the family may use any 
        amounts remaining in the escrow account to cover the 
        costs of major repair and replacement needs of the 
        dwelling. If a family defaults in connection with the 
        loan to purchase a dwelling and the mortgage is 
        foreclosed, the remaining amounts in the escrow account 
        shall be recaptured by the Secretary.
  [(e) Effect of Increases in Family Income.--Any increase in 
the earned income of a family during the participation of the 
family in a local program established under this section may 
not be considered as income or a resource for purposes of 
eligibility of the family for other benefits, or amount of 
benefits payable to the family, under any program administered 
by the Secretary, unless the income of the family equals or 
exceeds 80 percent of the median income of the area (as 
determined by the Secretary with adjustments for smaller and 
larger families).
  [(f) Program Coordinating Committee.--
          [(1) Functions.--Each public housing agency shall, in 
        consultation with the chief executive officer of the 
        unit of general local government, develop an action 
        plan under subsection (g), carry out activities under 
        the local program, and secure commitments of public and 
        private resources through a program coordinating 
        committee established by the public housing agency 
        under this subsection.
          [(2) Membership.--The program coordinating committee 
        may consist of representatives of the public housing 
        agency, the unit of general local government, the local 
        agencies (if any) responsible for carrying out programs 
        under the Job Training Partnership Act and the Job 
        Opportunities and Basic Skills Training Program under 
        part F of title IV of the Social Security Act, and 
        other organizations, such as other State and local 
        welfare and employment agencies, public and private 
        education or training institutions, nonprofit service 
        providers, and private businesses. The public housing 
        agency may, in consultation with the chief executive 
        officer of the unit of general local government, 
        utilize an existing entity as the program coordinating 
        committee if it meets the requirements of this 
        subsection.
  [(g) Action Plan.--
          [(1) Required submission.--The Secretary shall 
        require each public housing agency participating in the 
        self-sufficiency program under this section to submit 
        to the Secretary, for approval by the Secretary, an 
        action plan under this subsection in such form and in 
        accordance with such procedures as the Secretary shall 
        require.
          [(2) Development of plan.--In developing the plan, 
        the public housing agency shall consult with the chief 
        executive officer of the applicable unit of general 
        local government, the program coordinating committee 
        established under subsection (f), representatives of 
        residents of the public housing, any local agencies 
        responsible for programs under the Job Training 
        Partnership Act and the Job Opportunities and Basic 
        Skills Training Program under part F of title IV of the 
        Social Security Act, other appropriate organizations 
        (such as other State and local welfare and employment 
        or training institutions, child care providers, 
        nonprofit service providers, and private businesses), 
        and any other public and private service providers 
        affected by the operation of the local program.
          [(3) Contents of plan.--The Secretary shall require 
        that the action plan contain at a minimum--
                  [(A) a description of the size, 
                characteristics, and needs of the population of 
                the families expected to participate in the 
                local self-sufficiency program;
                  [(B) a description of the number of eligible 
                participating families who can reasonably be 
                expected to receive supportive services under 
                the program, based on available and anticipated 
                Federal, State, local, and private resources;
                  [(C) a description of the services and 
                activities under subsection (c)(2) to be 
                provided to families receiving assistance under 
                this section through the section 8 and public 
                housing programs, which shall be provided by 
                both public and private resources;
                  [(D) a description of the incentives pursuant 
                to subsection (d) offered by the public housing 
                agency to families to encourage participation 
                in the program;
                  [(E) a description of how the local program 
                will deliver services and activities according 
                to the needs of the families participating in 
                the program;
                  [(F) a description of both the public and 
                private resources that are expected to be made 
                available to provide the activities and 
                services under the local program;
                  [(G) a timetable for implementation of the 
                local program;
                  [(H) assurances satisfactory to the Secretary 
                that development of the services and activities 
                under the local program has been coordinated 
                with the Job Opportunities and Basic Skills 
                Training Program under part F of title IV of 
                the Social Security Act and program under the 
                Job Training Partnership Act and any other 
                relevant employment, child care, 
                transportation, training, and education 
                programs in the applicable area, and that 
                implementation will continue to be coordinated, 
                in order to avoid duplication of services and 
                activities; and
                  [(I) assurances satisfactory to the Secretary 
                that nonparticipating families will retain 
                their rights to public housing or section 8 
                assistance notwithstanding the provisions of 
                this section.
  [(h) Allowable Public Housing Agency Administrative Fees and 
Costs.--
          [(1) Section 8 fees.--The Secretary shall establish a 
        fee under section 8(q) for the costs incurred in 
        administering the provision of certificate and voucher 
        assistance under section 8 through the self-sufficiency 
        program under this section. The fee shall be the fee in 
        effect under such section on June 1, 1990, except that 
        for purposes of the fee under this paragraph the 
        applicable dollar amount for preliminary expenses under 
        section 8(q)(2)(A)(i) shall, subject to approval in 
        appropriations Acts, be $300. Upon the submission by 
        the Comptroller General of the United States of the 
        report required under section 554(b) of the Cranston-
        Gonzalez National Affordable Housing Act, the Secretary 
        shall revise the fee under this paragraph, taking into 
        consideration the report of the Comptroller General.
          [(2) Performance funding system.--Notwithstanding any 
        provision of section 9, the Secretary shall provide for 
        inclusion under the performance funding system under 
        section 9 of reasonable and eligible administrative 
        costs (including the costs of employing a full-time 
        service coordinator) incurred by public housing 
        agencies carrying out local programs under this 
        section. The Secretary shall include an estimate of the 
        administrative costs likely to be incurred by 
        participating public housing agencies in the annual 
        budget request for the Department of Housing and Urban 
        Development for public housing operating assistance 
        under section 9 and shall include a request for such 
        amounts in the budget request. Of any amounts 
        appropriated under section 9(c) for fiscal year 1993, 
        $25,000,000 is authorized to be used for costs under 
        this paragraph, and of any amounts appropriated under 
        such section for fiscal year 1994, $25,900,000 is 
        authorized to be used for costs under this paragraph.
  [(i) Public Housing Agency Incentive Award Allocation.--
          [(1) In general.--The Secretary shall carry out a 
        competition for budget authority for certificate and 
        voucher assistance under section 8 and public housing 
        development assistance under section 5(a)(2) reserved 
        under paragraph (4) and shall allocate such budget 
        authority to public housing agencies pursuant to the 
        competition.
          [(2) Criteria.--The competition shall be based on 
        successful and outstanding implementation by public 
        housing agencies of a local self-sufficiency program 
        under this section. The Secretary shall establish 
        perfomance criteria for public housing agencies 
        carrying out such local programs and the Secretary 
        shall cause such criteria to be published in the 
        Federal Register.
          [(3) Use.--Each public housing agency that receives 
        an allocation of budget authority under this subsection 
        shall use such authority to provide assistance under 
        the local self-sufficiency program established by the 
        public housing agency under this section.
          [(4) Reservation of budget authority.--
        Notwithstanding section 213(d) of the Housing and 
        Community Development Act of 1974, the Secretary shall 
        reserve for allocation under this subsection not less 
        than 10 percent of the portion of budget authority 
        appropriated in each of fiscal years 1991 and 1992 for 
        section 8 that is available for purposes of providing 
        assistance under the existing housing certificate and 
        housing voucher programs for families not currently 
        receiving assistance, and not less than 10 percent of 
        the public housing development assistance available in 
        such fiscal years for the purpose under section 5(a)(2) 
        (excluding amounts for major reconstruction of obsolete 
        projects).
  [(j) On-Site Facilities.--Each public housing agency carrying 
out a local program may, subject to the approval of the 
Secretary, make available and utilize common areas or 
unoccupied public housing units in public housing projects 
administered by the agency for the provision of supportive 
services under the local program. The use of the facilities of 
a public housing agency under this subsection shall not affect 
the amount of assistance provided to the agency under section 
9.
  [(k) Flexibility.--In establishing and carrying out the self-
sufficiency program under this section, the Secretary shall 
allow public housing agencies, units of general local 
government, and other organizations discretion and flexibility, 
to the extent practicable, in developing and carrying out local 
programs.
  [(l) Reports.--
          [(1) To secretary.--Each public housing agency that 
        carries out a local self-sufficiency program approved 
        by the Secretary under this section shall submit to the 
        Secretary, not less than annually a report regarding 
        the program. The report shall include--
                  [(A) a description of the activities carried 
                out under the program;
                  [(B) a description of the effectiveness of 
                the program in assisting families to achieve 
                economic independence and self-sufficiency;
                  [(C) a description of the effectiveness of 
                the program in coordinating resources of 
                communities to assist families to achieve 
                economic independence and self-sufficiency; and
                  [(D) any recommendations of the public 
                housing agency or the appropriate local program 
                coordinating committee for legislative or 
                administrative action that would improve the 
                self-sufficiency program carried out by the 
                Secretary and ensure the effectiveness of the 
                program.
          [(2) HUD annual report.--The Secretary shall submit 
        to the Congress annually, as a part of the report of 
        the Secretary under section 8 of the Department of 
        Housing and Urban Development Act, a report summarizing 
        the information submitted by public housing agencies 
        under paragraph (1). The report under this paragraph 
        shall also include any recommendations of the Secretary 
        for improving the effectiveness of the self-sufficiency 
        program under this section.
  [(m) GAO Report.--The Comptroller General of the United 
States may submit to the Congress reports under this subsection 
evaluating and describing the Family Self-Sufficiency program 
carried out by the Secretary under this section.
  [(n) Definitions.--As used in this section:
          [(1) The term ``contract of participation'' means a 
        contract under subsection (c) entered into by a public 
        housing agency carrying out a local program under this 
        section and a participating family.
          [(2) The term ``earned income'' means income from 
        wages, tips, salaries, and other employee compensation, 
        and any earnings from self-employment. The term does 
        not include any pension or annuity, transfer payments, 
        or any cash or in-kind benefits.
          [(3) The term ``eligible family'' means a family 
        whose head of household is not elderly, disabled, 
        pregnant, a primary caregiver for children under the 
        age of 3, or for whom the family self-sufficiency 
        program would otherwise be unsuitable. Notwithstanding 
        the preceding sentence, a public housing agency may 
        enroll such families if they choose to participate in 
        the program.
          [(4) The term ``local program'' means a program for 
        providing supportive services to participating families 
        carried out by a public housing agency within the 
        jurisdiction of the public housing agency.
          [(5) The term ``participating family'' means a family 
        that resides in public housing or housing assisted 
        under section 8 and elects to participate in a local 
        self-sufficiency program under this section.
          [(6) The term ``vacant unit'' means a dwelling unit 
        that has been vacant for not less than 9 consecutive 
        months.
  [(o) Effective Date and Regulations.--
          [(1) Regulations.--Not later than the expiration of 
        the 180-day period beginning on the date of the 
        enactment of the Cranston-Gonzalez National Affordable 
        Housing Act, the Secretary shall by notice establish 
        any requirements necessary to carry out this section. 
        Such requirements shall be subject to section 553 of 
        title 5, United States Code. The Secretary shall issue 
        final regulations based on the notice not later than 
        the expiration of the 8-month period beginning on the 
        date of the notice. Such regulations shall become 
        effective upon the expiration of the 1-year period 
        beginning on the date of the publication of the final 
        regulations.
          [(2) Applicability to indian public housing 
        authorities.--Notwithstanding any other provision of 
        law, the provisions of this section shall be optional 
        for Indian housing authorities.

[SEC. 24. REVITALIZATION OF SEVERELY DISTRESSED PUBLIC HOUSING.

  [(a) Program Authority.--The Secretary may make--
          [(1) planning grants under subsection (c) to enable 
        applicants to develop revitalization programs for 
        severely distressed public housing in accordance with 
        this section; and
          [(2) implementation grants under subsection (d) to 
        carry out revitalization programs for severely 
        distressed public housing in accordance with this 
        section.
  [(b) Designation of Eligible Projects.--
          [(1) Identification.--Not later than 90 days after 
        the date of enactment of the Housing and Community 
        Development Act of 1992, public housing agencies shall 
        identify, in such form and manner as the Secretary may 
        prescribe, any public housing projects that they 
        consider to be severely distressed public housing for 
        purposes of receiving assistance under this section.
          [(2) Review by secretary.--The Secretary shall review 
        the projects identified pursuant to paragraph (1) to 
        ascertain whether the projects are severely distressed 
        housing (as such item is defined in subsection (h)). 
        Not later than 180 days after the date of enactment of 
        this section, the Secretary shall publish a list of 
        those projects that the Secretary determines are 
        severely distressed public housing.
          [(3) Appeal of secretary's determination.--The 
        Secretary shall establish procedures for public housing 
        agencies to appeal the Secretary's determination that a 
        project identified by a public housing agency is not 
        severely distressed.
  [(c) Planning Grants.--
          [(1) In general.--The Secretary may make planning 
        grants under this subsection to applicants for the 
        purpose of developing revitalization programs for 
        severely distressed public housing under this section.
          [(2) Amount.--The amount of a planning grant under 
        this subsection may not exceed $200,000 per project, 
        except that the Secretary may for good cause approve a 
        grant in a higher amount.
          [(3) Eligible activities.--A planning grant may be 
        used for activities to develop revitalization programs 
        for severely distressed public housing, including--
                  [(A) studies of the different options for 
                revitalization, including the feasibility, 
                costs and neighborhood impact of such options;
                  [(B) providing technical or organizational 
                support to ensure resident involvement in all 
                phases of the planning and implementation 
                processes;
                  [(C) improvements to stabilize the 
                development, including security investments;
                  [(D) conducting workshops to ascertain the 
                attitudes and concerns of the neighboring 
                community;
                  [(E) preliminary architectural and 
                engineering work;
                  [(F) planning for economic development, job 
                training and self-sufficiency activities that 
                promote the economic self-sufficiency of 
                residents under the revitalization program;
                  [(G) designing a suitable replacement housing 
                plan, in situations where partial or total 
                demolition is considered;
                  [(H) planning for necessary management 
                improvements; and
                  [(I) preparation of an application for an 
                implementation grant under this section.
          [(4) Applications.--An application for a planning 
        grant shall be submitted in such form and in accordance 
        with such procedures as the Secretary shall establish. 
        The Secretary shall require that an application contain 
        at a minimum--
                  [(A) a request for a planning grant, 
                specifying the activities proposed, the 
                schedule for completing the activities, the 
                personnel necessary to complete the activities 
                and the amount of the grant requested;
                  [(B) a description of the applicant and a 
                statement of its qualifications;
                  [(C) identification and description of the 
                project involved, and a description of the 
                composition of the tenants, including family 
                size and income;
                  [(D) a certification by the public official 
                responsible for submitting the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act that the proposed 
                activities are consistent with the approved 
                housing strategy of the State or unit of 
                general local government within which the 
                project is located; and
                  [(E) a certification that the applicant will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing.
          [(5) Selection criteria.--The Secretary shall, by 
        regulation, establish selection criteria for a national 
        competition for assistance under this subsection, which 
        shall include--
                  [(A) the qualities or potential capabilities 
                of the applicant;
                  [(B) the extent of resident interest and 
                involvement in the development of a 
                revitalization program for the project;
                  [(C) the extent of involvement of local 
                public and private entities in the development 
                of a revitalization program for the project and 
                in the provision of supportive services to 
                project residents;
                  [(D) the potential of the applicant for 
                developing a successful and affordable 
                revitalization program and the suitability of 
                the project for such a program;
                  [(E) national geographic diversity among 
                housing for which applicants are selected to 
                receive assistance;
                  [(F) the extent of the need for and potential 
                impact of the revitalization program; and
                  [(G) such other factors that the Secretary 
                determines are appropriate for purposes of 
                carrying out the program established by this 
                section in an effective and efficient manner.
          [(6) Notification.--The Secretary shall notify each 
        applicant, not later than 6 months after the date of 
        the submission of the application, whether the 
        application is approved or disapproved.
  [(d) Implementation Grants.--
          [(1) In general.--The Secretary may make 
        implementation grants under this subsection to 
        applicants for the purpose of carrying out 
        revitalization programs for severely distressed public 
        housing under this section.
          [(2) Eligible activities.--Implementation grants may 
        be used for activities to carry out revitalization 
        programs for severely distressed public housing, 
        including--
                  [(A) architectural and engineering work;
                  [(B) the redesign, reconstruction, or 
                redevelopment of the severely distressed public 
                housing development, including the site on 
                which the development is located;
                  [(C) covering the administrative costs of the 
                applicant, which may not exceed such portion of 
                the assistance provided under this subsection 
                as the Secretary may prescribe;
                  [(D) any necessary temporary relocation of 
                tenants during the activity specified under 
                subparagraph (B);
                  [(E) payment of legal fees;
                  [(F) economic development activities that 
                promote the economic self-sufficiency of 
                residents under the revitalization program;
                  [(G) necessary management improvements;
                  [(H) transitional security activities; and
                  [(I) any necessary support services, except 
                that not more than 15 percent of any grant 
                under this subsection may be used for such 
                purpose.
          [(3) Application.--An application for a 
        implementation grant shall be submitted by an applicant 
        in such form and in accordance with such procedures as 
        the Secretary shall establish. The Secretary shall 
        require that an application contain at a minimum--
                  [(A) a request for an implementation grant, 
                specifying the amount of the grant requested 
                and its proposed uses;
                  [(B) a description of the applicant and a 
                statement of its qualifications;
                  [(C) identification and description of the 
                project involved, and a description of the 
                composition of the tenants, including family 
                size and income;
                  [(D) a certification by the public official 
                responsible for submitting the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act that the proposed 
                activities are consistent with the approved 
                housing strategy of the State or unit of 
                general local government within which the 
                project is located; and
                  [(E) a certification that the applicant will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing.
          [(4) Selection criteria.--The Secretary shall, by 
        regulation, establish selection criteria for a national 
        competition for assistance under this subsection, which 
        shall include--
                  [(A) the qualities or potential capabilities 
                of the applicant;
                  [(B) the extent of resident involvement in 
                the development of a revitalization program for 
                the project;
                  [(C) the extent of involvement of local 
                public and private entities in the development 
                of a revitalization program for the project and 
                in the provision of supportive services to 
                project residents;
                  [(D) the potential of the applicant for 
                developing a successful and affordable 
                revitalization program and the suitability of 
                the project for such a program;
                  [(E) national geographic diversity among 
                housing for which applicants are selected to 
                receive assistance;
                  [(F) the extent of the need for and potential 
                impact of the revitalization program; and
                  [(G) such other factors that the Secretary 
                determines are appropriate for purposes of 
                carrying out the program established by this 
                subtitle in an effective and efficient manner.
          [(5) Notification.--The Secretary shall notify each 
        applicant, not later than 6 months after the date of 
        the submission of the application, whether the 
        application is approved or disapproved.
  [(e) Exception to General Program Requirements.--The 
Secretary may waive or revise rules established under this 
title governing rents, income eligibility, and other areas of 
public housing management, to permit a public housing agency to 
undertake measures that enhance the long-term viability of a 
severely distressed public housing project revitalized under 
this section.
  [(f) Other Program Requirements.--
          [(1) Cost limitations.--Subject to the provisions of 
        this section, the Secretary--
                  [(A) shall establish cost limitations on 
                eligible activities under this section 
                sufficient to provide for effective 
                revitalization programs; and
                  [(B) may establish other cost limitations on 
                eligible activities under this section.
          [(2) Economic development.--Not more than an 
        aggregate of $250,000 from amounts made available under 
        subsections (c) and (d) may be used for economic 
        development activities under subsections (c) and (d) 
        for any project, except that the Secretary may for good 
        cause waive the applicability of this paragraph for a 
        project.
  [(g) Administration.--For the purpose of carrying out the 
revitalization of severely distressed public housing in 
accordance with this section, the Secretary shall establish 
within the Department of Housing and Urban Development an 
Office of Severely Distressed Public Housing Revitalization.
  [(h) Definitions.--For the purposes of this section:
          [(1) Applicant.--The term ``applicant'' means--
                  [(A) any public housing agency that is not 
                designated as troubled pursuant to section 
                6(j)(2);
                  [(B) any public housing agency or private 
                housing management agent selected, or receiver 
                appointed pursuant, to section 6(j)(3);
                  [(C) any public housing agency that is 
                designated as troubled pursuant to section 
                6(j)(2), if such agency acts in concert with a 
                private nonprofit organization, another public 
                housing agency that is not designated as a 
                troubled agency, resident management 
                corporation or other entity approved by the 
                Secretary; and
                  [(D) any public housing agency that is 
                designated as troubled pursuant to section 
                6(j)(2) that--
                          [(i) is so designated principally for 
                        reasons that will not affect the 
                        capacity of the agency to carry out a 
                        revitalization program;
                          [(ii) is making substantial progress 
                        toward eliminating the deficiencies of 
                        the agency; or
                          [(iii) is otherwise determined by the 
                        Secretary to be capable of carrying out 
                        a revitalization program.
          [(2) Private nonprofit corporation.--The term 
        ``private nonprofit organization'' means any private 
        nonprofit organization (including a State or locally 
        chartered nonprofit organization) that--
                  [(A) is incorporated under State or local 
                law;
                  [(B) has no part of its net earnings inuring 
                to the benefit of any member, founder, 
                contributor, or individual;
                  [(C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                  [(D) has among its purposes significant 
                activities related to the provision of decent 
                housing that is affordable to very low-income 
                families.
          [(3) Public housing agency.--The term ``public 
        housing agency'' has the meaning given the term in 
        section 3(b), except that it does not include any 
        Indian housing authority.
          [(4) Resident management corporation.--The term 
        ``resident management corporation'' means a resident 
        management corporation established in accordance with 
        the requirements of the Secretary under section 20.
          [(5) Severely distressed public housing.--The term 
        ``severely distressed public housing'' means a public 
        housing project--
                  [(A) that--
                          [(i) requires major redesign, 
                        reconstruction or redevelopment, or 
                        partial or total demolition, to correct 
                        serious deficiencies in the original 
                        design (including appropriately high 
                        population density), deferred 
                        maintenance, physical deterioration or 
                        obsolescence of major systems and other 
                        deficiencies in the physical plant of 
                        the project;
                          [(ii) is occupied predominantly by 
                        families with children who are in a 
                        severe state of distress, characterized 
                        by such factors as high rates of 
                        unemployment, teenage pregnancy, 
                        single-parent households, long-term 
                        dependency on public assistance and 
                        minimal educational achievement;
                          [(iii) is in a location for recurrent 
                        vandalism and criminal activity 
                        (including drug-related criminal 
                        activity); and
                          [(iv) cannot remedy the elements of 
                        distress specified in clauses (i) 
                        through (iii) through assistance under 
                        other programs, such as the programs 
                        under section 9 or 14, or through other 
                        administrative means; or
                  [(B) that--
                          [(i) is owned by a public housing 
                        agency designated as troubled pursuant 
                        to section 6(j)(2);
                          [(ii) has a vacancy rate, as 
                        determined by the Secretary, of 50 
                        percent or more, unless the project or 
                        building is vacant because it is 
                        awaiting rehabilitation under a 
                        modernization program under section 14 
                        that--
                                  [(I) has been approved and 
                                funded; and
                                  [(II) as determined by the 
                                Secretary, is on schedule and 
                                is expected to result in full 
                                occupancy of the project or 
                                building upon completion of the 
                                program; and
                          [(iii) in the case of individual 
                        buildings, the building is, in the 
                        Secretary's determination, sufficiently 
                        separable from the remainder of the 
                        project to make use of the building 
                        feasible for purposes of this subtitle.
  [(i) Annual Report.--The Secretary shall submit to the 
Congress an annual report setting forth--
          [(1) the number, type, and cost of public housing 
        units revitalized pursuant to this section;
          [(2) the status of projects identified as severely 
        distressed public housing pursuant to subsection (b);
          [(3) the amount and type of financial assistance 
        provided under and in conjunction with this section; 
        and
          [(4) the recommendations of the Secretary for 
        statutory and regulatory improvements to the program 
        established by this section.

[SEC. 25. CHOICE IN PUBLIC HOUSING MANAGEMENT.

  [(a) Short Title.--This section may be cited as the ``Choice 
in Public Housing Management Act of 1992''.
  [(b) Funding.--
          [(1) Rehabilitation and redevelopment grants.--From 
        amounts reserved under section 14(k)(2) for each of 
        fiscal years 1993 and 1994, the Secretary may reserve 
        not more than $50,000,000 in each such fiscal year for 
        activities under this section (which may include 
        funding operating reserves for eligible housing 
        transferred under this section). The Secretary may make 
        grants to managers and ownership entities to 
        rehabilitate eligible housing in accordance with this 
        section, as appropriate.
          [(2) Technical assistance.--The Secretary may use up 
        to 5 percent of the total amount reserved under 
        paragraph (1) for any fiscal year to provide, by 
        contract, technical assistance to residents of public 
        housing and resident councils to help such residents 
        and councils make informed choices about options for 
        alternative management under this section.
  [(c) Program Authority.--
          [(1) Transfer of management.--
                  [(A) In general.--The Secretary may approve 
                not more than 25 applications submitted for 
                fiscal years 1993 and 1994 by resident councils 
                for the transfer of the management of 
                distressed public housing projects, or one or 
                more buildings within projects, that are owned 
                or operated by troubled public housing 
                agencies, from public housing agencies to 
                alternative managers.
                  [(B) Required votes.--An application for such 
                transfer may be submitted and approved only if 
                a majority of the members of the board of the 
                resident council has voted in favor of the 
                proposed transfer of management 
                responsibilities, and a majority of the 
                residents has also voted in favor of the 
                transfer in an election supervised by a 
                disinterested third party.
                  [(C) Assistance of management specialist.--
                Any resident council seeking to transfer 
                management of distressed public housing under 
                this section shall, in cooperation with the 
                public housing agency for such housing, select 
                a qualified public housing management 
                specialist to assist in identifying and 
                acquiring a capable manager for the housing.
          [(2) Rehabilitation and capital improvements.--The 
        Secretary may make rehabilitation grants and provide 
        capital improvement funding under subsection (e) in 
        connection with the transfer of eligible housing to a 
        manager under this section.
  [(d) Operating Subsidies.--
          [(1) Authority to provide.--The Secretary may make 
        operating subsidies under section 9 available to 
        managers under this section.
          [(2) Amount of subsidy.--The Secretary shall 
        establish the amount of the operating subsidies made 
        available to a manager based on the share for the 
        housing under section 9 as determined by the Secretary.
          [(3) Effect on pha grant.--Operating subsidies for 
        any public housing agency transferring management under 
        this section shall be reduced in accordance with the 
        requirements of section 9.
  [(e) Rehabilitation Grants and Capital Improvement Funding.--
          [(1) Rehabilitation grants.--An application under 
        subsection (f) may request approval of amounts set 
        aside under subsection (b) for the rehabilitation of 
        eligible housing. The manager and the Secretary shall 
        enter into a contract governing the use of any such 
        assistance provided.
          [(2) Annual capital improvement funding.--
                  [(A) Authority to provide.--The Secretary may 
                make funding for capital improvements available 
                annually from amounts under section 14 to 
                managers of eligible housing. In accordance 
                with the contract entered into pursuant to 
                subsection (h), each manager receiving such 
                funding shall establish a capital improvements 
                reserve account and deposit in the account each 
                year an amount not less than the annual amount 
                of comprehensive grant funds it receives. 
                Amounts in the reserve account may be used only 
                for capital improvements and replacements.
                  [(B) Amount of subsidy.--The Secretary shall 
                establish the amount made available to a 
                manager under paragraph (1) for capital 
                improvements based on the share for the housing 
                under the comprehensive grant formula and, to 
                the extent practicable, the public housing 
                agency's comprehensive grant plan, in 
                accordance with section 14, as determined by 
                the Secretary.
                  [(C) Limitation in the case of recent 
                rehabilitation.--Where eligible housing has 
                received rehabilitation funding under paragraph 
                (1) or has otherwise been comprehensively 
                modernized within 3 years before the effective 
                date of the contract between the Secretary and 
                the manager for management of the eligible 
                housing, only the accrual portion of the 
                comprehensive grant formula amount shall be 
                available for payment to the manager.
                  [(D) Effect on pha grant.--The formula amount 
                of a comprehensive grant for a public housing 
                agency transferring the housing under this 
                section shall be reduced in accordance with the 
                requirements of section 14.
          [(3) Relationship to section 14.--The provisions of 
        section 14 shall apply with respect to rehabilitation 
        grants under paragraph (1) or capital improvement 
        funding under paragraph (2); except that the Secretary 
        may waive the applicability of any of the provisions of 
        such section where such provisions are not appropriate 
        to the assistance under this subsection.
  [(f) Application.--
          [(1) Form and procedures.--
                  [(A) In general.--To be eligible for approval 
                for transfer of management from a public 
                housing agency to a manager and for a grant 
                under subsection (e), a resident council shall 
                submit an application to the Secretary in such 
                form and in accordance with such procedures as 
                the Secretary shall establish.
                  [(B) PHA comment on application.--A resident 
                council submitting an application shall provide 
                the public housing agency that owns or operates 
                the housing involved a reasonable opportunity 
                to comment on the application, as the Secretary 
                shall prescribe.
                  [(C) PHA proposal.--The public housing agency 
                may present to the resident council a proposal 
                for the continued management of the housing by 
                the agency, and the resident council shall give 
                reasonable consideration to any such proposal.
          [(2) Minimum requirements.--The Secretary shall 
        require that an application contain--
                  [(A) a description of the resident council 
                and documentation of its authority;
                  [(B) documentation of the votes required 
                under subsection (c)(1)(B);
                  [(C) a description of the proposed manager 
                selected by the applicant (in accordance with 
                procedures established or approved by the 
                Secretary) and documentation of its capacity to 
                manage the eligible housing;
                  [(D) a plan for carrying out the manager's 
                responsibilities for managing the eligible 
                housing;
                  [(E) documentation that the project (or 
                building or buildings) for which management 
                transfer is proposed is eligible housing;
                  [(F) documentation that each of the 
                requirements under paragraph (1)(B) have been 
                fulfilled;
                  [(G)(i) if the application includes a request 
                for a rehabilitation grant under subsection (e) 
                (which shall be included in any application 
                involving eligible housing that is 50 percent 
                or more vacant), the basis for the estimate of 
                the amount requested, including--
                          [(I) the estimate of the eligible 
                        housing's need under the public housing 
                        agency's comprehensive plan (under 
                        section 14(e)(1)); and
                          [(II) an explanation, where 
                        appropriate, if an amount higher than 
                        the amount planned by the agency is 
                        being requested; or
                  [(ii) if the application does not include a 
                request for a rehabilitation grant under 
                subsection (e), a demonstration that needs for 
                capital improvements and replacement for the 
                housing can reasonably be expected to be funded 
                from funding for capital improvements under 
                subsection (e);
                  [(H) if the manager proposes to administer a 
                program to enable residents to achieve economic 
                independence and self-sufficiency, a 
                description of the program and evidence of 
                commitment of resources to the program;
                  [(I) an analysis showing that the planned 
                rehabilitation will result in the long-term 
                viability of the housing at a reasonable cost;
                  [(J) a certification that the manager will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing; and
                  [(K) such other information that the 
                Secretary considers appropriate.
  [(g) Review and Approval by the Secretary.--
          [(1) Applications not requesting rehabilitation 
        assistance.--In the case of applications for the 
        transfer of management of public housing that do not 
        include a request for rehabilitation assistance under 
        subsection (e), the Secretary may approve an 
        application that meets the requirements of subsection 
        (f)(2) and this section.
          [(2) Applications requesting rehabilitation grants.--
        In the case of applications that include a request for 
        rehabilitation assistance under subsection (e), the 
        Secretary shall select applicants for approval based on 
        a national competition. The Secretary shall, by 
        regulation, establish selection criteria for the 
        competition which provide for separate rating of 
        applicants under this paragraph and of applicants under 
        this section, and for selections from a single list of 
        all applicants. The criteria shall include--
                  [(A) the quality of the plan for 
                rehabilitating the eligible housing;
                  [(B) the extent of the capacity or potential 
                capacity of the proposed manager to manage the 
                housing and to carry out the rehabilitation 
                program;
                  [(C) the extent to which a program is 
                proposed to enable residents to achieve 
                economic independence and self-sufficiency;
                  [(D) the extent to which the planned 
                rehabilitation will result in the long-term 
                viability of the housing at a reasonable cost; 
                and
                  [(E) such other criteria as the Secretary may 
                require.
  [(h) Contract Between Secretary and Manager.--
          [(1) Terms.--After the Secretary approves an 
        application, the Secretary shall enter into a contract 
        with the manager for transfer of management of the 
        eligible housing. In addition to other contract 
        provisions required under this section, the contract 
        shall--
                  [(A) give the manager the right to receive 
                operating subsidies under subsection (d) and 
                capital improvement funding under subsection 
                (e);
                  [(B) require the manager to carry out all 
                management responsibilities for the eligible 
                housing, as provided in or required by the 
                contract;
                  [(C) require the manager to carry out, for 
                the eligible housing, all management 
                responsibilities applicable to public housing 
                agencies owning or operating public housing 
                projects, including (i) maintaining the units 
                in decent, safe, and sanitary condition in 
                accordance with any standards for public 
                housing established or adopted by the 
                Secretary, (ii) determining eligibility of 
                applicants for occupancy of units subject to 
                the requirements of this Act, (iii) terminating 
                tenancy in accordance with the procedures 
                applicable to the section 8 new construction 
                program, and (iv) determining the amount of 
                rent paid for units in accordance with this 
                Act; and
                  [(D) permit, but not require, the manager to 
                select applicants from the public housing 
                waiting list maintained by the public housing 
                agency.
          [(2) Extension, expiration, and termination.--
                  [(A) In general.--The Secretary shall provide 
                for a resident council that has entered into a 
                contract under this subsection to--
                          [(i) approve the renewal of the 
                        contract between the Secretary and the 
                        manager; or
                          [(ii) disapprove renewal and submit 
                        an application to the Secretary, in 
                        accordance with subsection (f), 
                        proposing another manager, which may be 
                        the public housing agency.
                  [(B) Default.--If the Secretary determines 
                that a manager is in default of its 
                responsibilities under the contract, the 
                Secretary may require the resident council to 
                submit another application proposing a 
                different manager, which may be the public 
                housing agency.
  [(i) Other Program Requirements.--
          [(1) Cost limitations.--The Secretary may establish 
        cost limitations on activities under this section. The 
        amount of rehabilitation funds under subsection (e)(1) 
        that may be approved may not exceed the per unit cost 
        limit applicable to the comprehensive grant program 
        under section 14.
          [(2) Demolition and disposition not permitted.--A 
        manager may not demolish or dispose of eligible housing 
        under this section.
          [(3) Capability of resident management 
        corporations.--To be eligible to become a manager under 
        this section, a resident management corporation--
                  [(A) shall demonstrate to the Secretary its 
                ability to manage public housing effectively 
                and efficiently, as determined by the 
                Secretary, which shall include evidence of its 
                most recent financial audit; or
                  [(B) shall arrange for operation of the 
                housing by a qualified management entity.
          [(4) Limitations on pha liability.--A public housing 
        agency shall not be liable for any act or failure to 
        act by the manager or resident council.
          [(5) Bonding and insurance.--Before assuming any 
        management responsibility for eligible housing, a 
        manager shall obtain fidelity bonding and insurance, or 
        equivalent protection, in accordance with regulations 
        and requirements established by the Secretary. Such 
        bonding and insurance, or its equivalent, shall be 
        adequate to protect the Secretary and the public 
        housing agency against loss, theft, embezzlement, or 
        fraudulent acts on the part of the manager or its 
        employees.
          [(6) Restriction on displacement before transfer.--A 
        public housing agency may not involuntarily displace, 
        as determined by the Secretary, any resident of 
        eligible housing during the period beginning on the 
        date that an application under subsection (f) is 
        submitted by a resident council, and ending upon 
        transfer of management of the housing or, if the 
        application is disapproved, the date of the 
        disapproval.
  [(j) Performance Review and Compliance.--
          [(1) Monitoring.--The Secretary shall monitor the 
        performance of managers under this section and shall 
        assess their management performance using the 
        performance indicators established under section 
        6(j)(1).
          [(2) Records, reports, and audits of managers.--
                  [(A) Keeping of records.--Each manager and 
                resident council under this subtitle shall keep 
                such records as may be reasonably necessary to 
                disclose the amount and the disposition by the 
                manager of the proceeds of assistance received 
                under this section and to ensure compliance 
                with the requirements of this section.
                  [(B) Access to documents.--
                          [(i) Secretary.--The Secretary shall 
                        have access for the purpose of audit 
                        and examination to any books, 
                        documents, papers, and records of a 
                        manager, resident council, and public 
                        housing agency that are pertinent to 
                        assistance received under, and to the 
                        requirements of, this section.
                          [(ii) GAO.--The Comptroller General 
                        of the United States, and any duly 
                        authorized representatives of the 
                        Comptroller General, shall have access 
                        for the purpose of audit and 
                        examination to any books, documents, 
                        papers, and records of a manager and 
                        resident council that are pertinent to 
                        assistance received under, and to the 
                        requirements of, this section.
                  [(C) Reporting requirements.--Each manager 
                shall submit to the Secretary such reports as 
                the Secretary determines appropriate to carry 
                out the Secretary's responsibilities under this 
                section, including an annual financial audit.
                  [(D) Annual report.--The Secretary shall 
                submit an annual report to the Congress 
                evaluating management transfers under this 
                section compared to other methods of dealing 
                with severely distressed public housing.
  [(k) Nondiscrimination.--No person in the United States 
shall, on the grounds of race, color, national origin, 
religion, or sex, be excluded from participation in, be denied 
the benefits of, or be subjected to discrimination under, any 
program or activity funded in whole or in part with funds made 
available under this section. Any prohibition against 
discrimination on the basis of age under the Age Discrimination 
Act of 1975 or with respect to an otherwise qualified 
handicapped individual as provided in section 504 of the 
Rehabilitation Act of 1973 shall also apply to any such program 
or activity.
  [(l) Relationship to Other Programs.--
          [(1) Homeownership.--After a transfer of management 
        in accordance with this section, the eligible housing 
        shall remain eligible for assistance under title III 
        and for sale under section 5(h). Participation in a 
        homeownership program shall be consistent with a 
        contract between the Secretary and a manager.
          [(2) Self-sufficiency.--Where an application under 
        subsection (f) proposes a program to enable residents 
        to achieve economic independence and self-sufficiency, 
        consistent with the objectives of the program under 
        section 23, and demonstrates that the manager has the 
        capacity to carry out a self-sufficiency program, the 
        Secretary may approve such a program. Where such a 
        program is approved, the Secretary shall authorize the 
        manager to adopt policies consistent with section 23(d) 
        (relating to maximum rents and escrow savings accounts) 
        and section 23(e) (relating to effect of increases in 
        family income).
  [(m) Definitions.--For purposes of this section:
          [(1) The term ``eligible housing'' means a public 
        housing project, or one or more buildings within a 
        project, that--
                  [(A) is owned or operated by a troubled 
                public housing agency; and
                  [(B) has been identified as severely 
                distressed under section 24 of this Act.
        In the case of an individual building, the building 
        shall, in the determination of the Secretary, be 
        sufficiently separable from the remainder of the 
        project to make use of the building feasible for 
        purposes of this section.
          [(2) The term ``manager'' means one of the following 
        entities that has entered into a contract with the 
        Secretary for the management of eligible housing under 
        this section:
                  [(A) A public or private nonprofit 
                organization (including, as determined by the 
                Secretary, such an organization sponsored by 
                the public housing agency).
                  [(B) A for-profit entity, if it has (i) 
                demonstrated experience in providing low-income 
                housing, and (ii) is participating in joint 
                venture with an organization described in 
                paragraph (3).
                  [(C) A State or local government, including 
                an agency or instrumentality thereof.
                  [(D) A public housing agency (other than the 
                public housing agency that owns the project).
        The term does not include a resident council.
          [(3) The term ``private nonprofit organization'' 
        means any private nonprofit organization (including a 
        State or locally chartered nonprofit organization) 
        that--
                  [(A) is incorporated under State or local 
                law;
                  [(B) has no part of its net earnings inuring 
                to the benefit of any member, founder, 
                contributor, or individual;
                  [(C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                  [(D) has among its purposes significant 
                activities related to the provision of decent 
                housing that is affordable to low-income 
                families.
        The term includes resident management corporations.
          [(4) The term ``public housing agency'' has the 
        meaning given such term in section 3(b), except that it 
        does not include Indian housing authorities.
          [(5) The term ``public nonprofit organization'' means 
        any public nonprofit entity, except the public housing 
        agency that owns the eligible housing.
          [(6) The term ``resident council'' means any 
        nonprofit organization or association that--
                  [(A) is representative of the residents of 
                the eligible housing;
                  [(B) adopts written procedures providing for 
                the election of officers on a regular basis; 
                and
                  [(C) has a democratically elected governing 
                board, elected by the residents of the eligible 
                housing.
          [(7) The term ``resident management corporation'' 
        means a resident management corporation established in 
        accordance with the requirements of the Secretary under 
        section 20.
          [(8) The term ``troubled public housing agency'' 
        means a public housing agency with 250 or more units 
        that--
                  [(A) has been designated as a troubled public 
                housing agency for the current Federal fiscal 
                year, and for the 2 preceding Federal fiscal 
                years--
                          [(i) under section 6(j)(2)(A)(i); or
                          [(ii) before the implementation of 
                        such authority, under any other 
                        procedure for designating troubled 
                        public housing agencies that was used 
                        by the Secretary and is determined by 
                        the Secretary to be appropriate for 
                        purposes of this section; and
                  [(B) has not met targets for improved 
                performance under section 6(j)(2)(C).

[SEC. 26. ENVIRONMENTAL REVIEWS.

  [(a) In General.--
          [(1) Release of funds.--In order to assure that the 
        policies of the National Environmental Policy Act of 
        1969 and other provisions of law which further the 
        purposes of such Act (as specified in regulations 
        issued by the Secretary) are most effectively 
        implemented in connection with the expenditure of funds 
        under this title, and to assure to the public 
        undiminished protection of the environment, the 
        Secretary may, under such regulations, in lieu of the 
        environmental protection procedures otherwise 
        applicable, provide for the release of funds for 
        projects or activities under this title, as specified 
        by the Secretary upon the request of a public housing 
        agency (including an Indian housing authority) under 
        this section, if the State or unit of general local 
        government, as designated by the Secretary in 
        accordance with regulations, assumes all of the 
        responsibilities for environmental review, 
        decisionmaking, and action pursuant to such Act, and 
        such other provisions of law as the regulations of the 
        Secretary may specify, which would otherwise apply to 
        the Secretary with respect to the release of funds.
          [(2) Implementation.--The Secretary, after 
        consultation with the Council on Environmental Quality, 
        shall issue such regulations as may be necessary to 
        carry out this section. Such regulations shall specify 
        the programs to be covered.
  [(b) Procedure.--The Secretary shall approve the release of 
funds subject to the procedures authorized by this section only 
if, not less than 15 days prior to such approval and prior to 
any commitment of funds to such projects or activities, the 
public housing agency (including an Indian housing authority) 
has submitted to the Secretary a request for such release 
accompanied by a certification of the State or unit of general 
local government which meets the requirements of subsection 
(c). The Secretary's approval of any such certification shall 
be deemed to satisfy the Secretary's responsibilities under the 
National Environmental Policy Act of 1969 and such other 
provisions of law as the regulations of the Secretary specify 
insofar as those responsibilities relate to the release of 
funds which are covered by such certification.
  [(c) Certification.--A certification under the procedures 
authorized by this section shall--
          [(1) be in a form acceptable to the Secretary;
          [(2) be executed by the chief executive officer or 
        other officer of the State or unit of general local 
        government who qualifies under regulations of the 
        Secretary;
          [(3) specify that the State or unit of general local 
        government under this section has fully carried out its 
        responsibilities as described under subsection (a); and
          [(4) specify that the certifying officer--
                  [(A) consents to assume the status of a 
                responsible Federal official under the National 
                Environmental Policy Act of 1969 and each 
                provision of law specified in regulations 
                issued by the Secretary insofar as the 
                provisions of such Act or other such provision 
                of law apply pursuant to subsection (a); and
                  [(B) is authorized and consents on behalf of 
                the State or unit of general local government 
                and himself or herself to accept the 
                jurisdiction of the Federal courts for the 
                purpose of enforcement of his or her 
                responsibilities as such an official.
  [(d) Approval by States.--In cases in which a unit of general 
local government carries out the responsibilities described in 
subsection (c), the Secretary may permit the State to perform 
those actions of the Secretary described in subsection (b) and 
the performance of such actions by the State, where permitted 
by the Secretary, shall be deemed to satisfy the Secretary's 
responsibilities referred to in the second sentence of 
subsection (b).

[SEC. 27. PROVISION OF INFORMATION TO LAW ENFORCEMENT AND OTHER 
                    AGENCIES.

  [Notwithstanding any other provision of law, the Secretary 
shall, at least 4 times annually and upon request of the 
Immigration and Naturalization Service (hereafter in this 
section referred to as the ``Service''), furnish the Service 
with the name and address of, and other identifying information 
on, any individual who the Secretary knows is unlawfully in the 
United States, and shall ensure that each contract for 
assistance entered into under section 6 or 8 of this Act with a 
public housing agency provides that the public housing agency 
shall furnish such information at such times with respect to 
any individual who the public housing agency knows is 
unlawfully in the United States.

[SEC. 27. EXCHANGE OF INFORMATION WITH LAW ENFORCEMENT AGENCIES.

  [Notwithstanding any other provision of law, each public 
housing agency that enters into a contract for assistance under 
section 6 or 8 of this Act with the Secretary shall furnish any 
Federal, State, or local law enforcement officer, upon the 
request of the officer, with the current address, Social 
Security number, and photograph (if applicable) of any 
recipient of assistance under this Act, if the officer--
          [(1) furnishes the public housing agency with the 
        name of the recipient; and
          [(2) notifies the agency that--
                  [(A) such recipient--
                          [(i) is fleeing to avoid prosecution, 
                        or custody or confinement after 
                        conviction, under the laws of the place 
                        from which the individual flees, for a 
                        crime, or attempt to commit a crime, 
                        which is a felony under the laws of the 
                        place from which the individual flees, 
                        or which, in the case of the State of 
                        New Jersey, is a high misdemeanor under 
                        the laws of such State; or
                          [(ii) is violating a condition of 
                        probation or parole imposed under 
                        Federal or State law; or
                          [(iii) has information that is 
                        necessary for the officer to conduct 
                        the officer's official duties;
                  [(B) the location or apprehension of the 
                recipient is within such officer's official 
                duties; and
                  [(C) the request is made in the proper 
                exercise of the officer's official duties.

       [TITLE II--ASSISTED HOUSING FOR INDIANS AND ALASKA NATIVES

[SEC. 201. ESTABLISHMENT OF SEPARATE PROGRAM OF ASSISTED HOUSING FOR 
                    INDIANS AND ALASKA NATIVES.01

  [(a) General Authority.--The Secretary shall carry out 
programs to provide low-income housing on Indian reservations 
and other Indian areas in accordance with the provisions of 
this title.
  [(b) Applicability of Title I.--
          [(1) In general.--Except as otherwise provided in 
        this title, the provisions of title I shall apply to 
        low-income housing developed or operated pursuant to a 
        contract between the Secretary and an Indian housing 
        authority.
          [(2) Public housing.--No provision of title I (or of 
        any other law specifically modifying the public housing 
        program under title I) that is enacted after the date 
        of the enactment of the Indian Housing Act of 1988 
        shall apply to public housing developed or operated 
        pursuant to a contract between the Secretary and an 
        Indian housing authority, unless the provision 
        explicitly provides for such applicability.
  [(c) Inapplicability of Certain Requirements.--Lower income 
housing developed or operated pursuant to a contract between 
the Secretary and an Indian housing authority shall not be 
subject to section 227 of the Housing and Urban-Rural Recovery 
Act of 1983 (relating to pet ownership in assisted housing for 
the elderly or handicapped) or section 6(h) of the United 
States Housing Act of 1937 (relating to a limitation on 
contracts involving new construction).

[SEC. 202. MUTUAL HELP HOMEOWNERSHIP OPPORTUNITY PROGRAM.

  [(a) Establishment.--The Secretary shall carry out a mutual 
help homeownership opportunity program for Indian families in 
accordance with this section. The program shall be designed to 
meet the homeownership needs of Indian families on Indian 
reservations and other Indian areas, including Indian families 
whose incomes exceed the levels established for low-income 
families.
  [(b) Financial Assistance.--
          [(1) In general.--The Secretary may, to the extent 
        provided in appropriation Acts, enter into contracts 
        with Indian housing authorities under title I to 
        provide financial assistance for the development, 
        acquisition, operation, and improvement of housing 
        projects under this section.
          [(2) Eligibility for ciap.--Notwithstanding the 
        provisions of section 14(c), the Secretary may provide 
        assistance provided for comprehensive modernization 
        under section 14 for the housing projects under this 
        section for the purposes under section 14. Any 
        assistance shall be provided under this paragraph only 
        in the form of a grant for each housing project (or 
        unit within a project) selected for such assistance.
  [(c) Eligible Projects.--
          [(1) Project types.--Projects for which assistance 
        may be provided under this section may include single-
        family detached dwellings and other single-family 
        dwellings (including row houses).
          [(2) Forms of ownership.--In addition to fee simple 
        ownership and other forms of ownership, the Secretary 
        may permit and facilitate cooperative ownership for any 
        project assisted under this section, if the Indian 
        housing authority requests cooperative ownership and 
        the Secretary determines such ownership to be 
        appropriate for the project.
          [(3) Property standards.--Property standards for 
        projects assisted under this section shall be 
        established by regulation, in accordance with section 
        205. The standards shall--
                  [(A) provide sufficient flexibility to permit 
                the use of different designs and materials; and
                  [(B) include cost-effective energy 
                conservation performance standards designed to 
                ensure the lowest total construction and 
                operating costs.
  [(d) Eligible Families.--
          [(1) In general.--Except as provided in paragraph 
        (2), assistance under this section shall be limited to 
        Indian low-income families on Indian reservations and 
        other Indian areas.
          [(2) Exception.--
                  [(A) Demonstrated need.--An Indian housing 
                authority may provide assistance under this 
                section to families on Indian reservations and 
                other Indian areas whose incomes exceed the 
                levels established for low-income families, if 
                the Indian housing authority demonstrates to 
                the satisfaction of the Secretary that there is 
                a need for housing for such families that 
                cannot reasonably be met without such 
                assistance. An Indian housing authority may 
                provide assistance under this section to any 
                non-Indian family on an Indian reservation or 
                other Indian area if the Indian housing 
                authority determines that the presence of the 
                family on the Indian reservation or other 
                Indian area is essential to the well-being of 
                Indian families and the need for housing for 
                the family cannot reasonably be met without 
                such assistance.
                  [(B) Limitation on number of units.--The 
                number of dwelling units in any project 
                assisted under this section that may be 
                occupied by or reserved for families on Indian 
                reservations and other Indian areas whose 
                incomes exceed the levels established for low-
                income families may not exceed whichever of the 
                following is higher:
                          [(i) 10 percent.--10 percent of the 
                        dwelling units in the project.
                          [(ii) 5 units.--5 dwelling units.
  [(e) Mutual Help and Occupancy Agreement.--Each Indian 
housing authority operating a program under this section shall 
require each family selected for housing under this section to 
enter into a mutual help and occupancy agreement. The agreement 
shall provide the following:
          [(1) Family contribution.--
                  [(A) General requirement.--The family shall 
                agree to contribute toward the development cost 
                of a project in the form of land, labor, cash, 
                or materials or equipment. The value of the 
                contribution of each family shall not be less 
                than $1,500.
                  [(B) Contribution by indian tribe.--
                Contributions other than labor may be made by 
                an Indian tribe on behalf of a family.
          [(2) Monthly payment.--
                  [(A) Calculation.--The family shall agree to 
                make a monthly payment to the Indian housing 
                authority that is equal to whichever of the 
                following is higher:
                          [(i) Percentage of adjusted income.--
                        An amount computed by--
                                  [(I) multiplying the monthly 
                                adjusted income of the family 
                                by a percentage that is not 
                                less than 15 percent and not 
                                more than 30 percent, as 
                                determined by the Indian 
                                housing authority to be 
                                appropriate; and
                                  [(II) subtracting the 
                                estimated monthly payments of 
                                the family for the reasonable 
                                use of utilities (excluding 
                                telephone service).
                          [(ii) Administration charge.--The 
                        amount budgeted by the Indian housing 
                        authority for monthly operating 
                        expenses on the dwelling of the family, 
                        excluding any operating cost for which 
                        operating assistance is provided by the 
                        Secretary under section 9.
                  [(B) Other applicable law.--Monthly payments 
                under this section shall be subject to section 
                203 of the Housing and Community Development 
                Act of 1974.
          [(3) Maintenance and utilities.--The family shall be 
        responsible for the maintenance and monthly utility 
        expenses of the dwelling. The Indian housing authority 
        shall have in effect procedures determined by the 
        Secretary to be sufficient for ensuring the timely 
        periodic maintenance of the dwelling by the family.
          [(4) Homeownership opportunities.--The Indian housing 
        authority shall afford the family an opportunity to 
        purchase the dwelling under a lease-purchase, mortgage, 
        or loan agreement with the Indian housing authority or 
        any other qualified entity, if the Indian housing 
        authority determines (in accordance with objective 
        standards and procedures established by the Secretary 
        after consultation with Indian housing authorities) 
        that the family is able to meet the obligations of 
        homeownership.
  [(f) Self-Help Housing Program.--
          [(1) Establishment.--The Secretary shall establish a 
        self-help housing program for projects assisted under 
        this section.
          [(2) Requirements.--In the case of any project 
        approved by the Secretary for participation in the 
        self-help housing program--
                  [(A) each family shall make a contribution 
                under subsection (e)(1) in the form of labor in 
                accordance with labor contribution requirements 
                similar to the requirements applicable under 
                the mutual self-help housing program 
                established in section 523 of the Housing Act 
                of 1949; and
                  [(B) the Secretary shall provide each family 
                with technical and supervisory assistance 
                similar to the assistance available under the 
                mutual self-help housing program established in 
                section 523 of the Housing Act of 1949.
          [(3) Applications.--Any Indian housing authority may 
        submit an application to the Secretary for inclusion of 
        a project assisted under this section in the self-help 
        housing program.

[SEC. 203. ADDITIONAL PROVISIONS.

  [(a) Public Housing Maximum Contributions.--In determining 
the maximum contributions that may be made by the Secretary to 
an Indian housing authority for development of a public housing 
project (including a mutual help homeownership opportunity 
project under this title), the Secretary shall consider all 
relevant factors, including--
          [(1) the logistical problems associated with projects 
        of remote location, low density, or scattered sites; 
        and
          [(2) the availability of skilled labor and acceptable 
        materials.
  [(b) Related Facilities and Services.--The Secretary shall 
take such actions as may be necessary to ensure the timely and 
efficient provision, through the Interdepartmental Agreement on 
Indian Housing, of any roads, water supply and sewage 
facilities, and electrical and fuel distribution systems that 
are required for completion and occupancy of public housing 
projects assisted under this title (including mutual help 
homeownership opportunity projects). Notwithstanding any other 
provision of this Act, the Secretary shall make annual payments 
from funds appropriated under section 9(c) to municipalities 
providing such roads, facilities, and systems in a amount equal 
to--
          [(1) 10 percent of the applicable shelter rent, minus 
        the utility allowance; or
          [(2) $150,
whichever is greater, for each rental housing unit covered by 
this subsection.
  [(c) Accessibility to Physically Handicapped Persons.--The 
Secretary shall, in accordance with Public Law 90-480 (42 
U.S.C. 4151 et seq.; commonly known as the Architectural 
Barriers Act of 1968) and other applicable law, require each 
Indian housing authority to give proper consideration to the 
needs of physically handicapped persons for ready access to, 
and use of, low-income housing assisted under this title.

[SEC. 204. ANNUAL REPORT.

  [The Secretary shall include in the annual report under 
section 8 of the Department of Housing and Urban Development 
Act--
          [(1) a description of the actions taken to carry out 
        the provisions of the Housing and Community Development 
        Act of 1987 that relate to Indian housing;
          [(2) an evaluation of the status of the program of 
        single-family mortgage insurance for Indians and Alaska 
        Natives under section 248 of the National Housing Act;
          [(3) an assessment of the housing needs of native 
        Hawaiians and an evaluation of current Federal programs 
        designed to meet the needs, including programs of 
        housing assistance for low-income families and the 
        program of single-family mortgage insurance for native 
        Hawaiians under section 247 of the National Housing 
        Act;
          [(4) recommendations for resolving concerns relating 
        to Indian housing authorities that are authorized to 
        serve both Indians and non-Indians; and
          [(5) a description of actions taken to ensure the 
        timely and efficient provision, through the 
        Interdepartmental Agreement on Indian Housing, of any 
        roads, water supply and sewage facilities, and 
        electrical and fuel distribution systems that are 
        required for completion and occupancy of public housing 
        projects assisted under this title (including mutual 
        help homeownership opportunity projects).

[SEC. 205. REGULATIONS.

  [(a) Issuance.--The Secretary shall issue regulations to 
carry out this title and the amendments made by the Indian 
Housing Act of 1988. The regulations shall be issued in 
accordance with subsections (b) through (e) of section 553 of 
title 5, United States Code.
  [(b) Consultation With Indian Housing Authorities.--In 
formulating proposed regulations under this section, the 
Secretary shall consult with Indian housing authorities.
  [(c) Effective Date.--The Secretary shall issue regulations 
under this section to become effective before the expiration of 
the 90-day period beginning on the date of the enactment of the 
Indian Housing Act of 1988.

      [TITLE III--HOPE FOR PUBLIC AND INDIAN HOUSING HOMEOWNERSHIP

[SEC. 301. PROGRAM AUTHORITY.

  [(a) In General.--The Secretary is authorized to make--
          [(1) planning grants to help applicants to develop 
        homeownership programs in accordance with this title; 
        and
          [(2) implementation grants to carry out homeownership 
        programs in accordance with this title.
  [(b) Authority To Reserve Housing Assistance.--In connection 
with a grant under this title, the Secretary may reserve 
authority to provide assistance under section 8 of this Act to 
the extent necessary to provide replacement housing and rental 
assistance for a nonpurchasing tenant who resides in the 
project on the date the Secretary approves the application for 
an implementation grant, for use by the tenant in another 
project.

[SEC. 302. PLANNING GRANTS.

  [(a) Grants.--The Secretary is authorized to make planning 
grants to applicants for the purpose of developing 
homeownership programs under this title. The amount of a 
planning grant under this section may not exceed $200,000, 
except that the Secretary may for good cause approve a grant in 
a higher amount.
  [(b) Eligible Activities.--Planning grants may be used for 
activities to develop homeownership programs (which may include 
programs for cooperative ownership), including--
          [(1) development of resident management corporations 
        and resident councils;
          [(2) training and technical assistance for applicants 
        related to development of a specific homeownership 
        program;
          [(3) studies of the feasibility of a homeownership 
        program;
          [(4) inspection for lead-based paint hazards, as 
        required by section 302(a) of the Lead-Based Paint 
        Poisoning Prevention Act;
          [(5) preliminary architectural and engineering work;
          [(6) tenant and homebuyer counseling and training;
          [(7) planning for economic development, job training, 
        and self-sufficiency activities that promote economic 
        self-sufficiency of homebuyers and homeowners under the 
        homeownership program;
          [(8) development of security plans; and
          [(9) preparation of an application for an 
        implementation grant under this title.
  [(c) Application.--
          [(1) Form and procedures.--An application for a 
        planning grant shall be submitted by an applicant in 
        such form and in accordance  with  such  procedures  as 
         the  Secretary  shall establish.
          [(2) Minimum requirements.--The Secretary shall 
        require that an application contain at a minimum--
                  [(A) a request for a planning grant, 
                specifying the activities proposed to be 
                carried out, the schedule for completing the 
                activities, the personnel necessary to complete 
                the activities, and the amount of the grant 
                requested;
                  [(B) a description of the applicant and a 
                statement of its qualifications;
                  [(C) identification and description of the 
                public housing project or projects involved, 
                and a description of the composition of the 
                tenants, including family size and income;
                  [(D) a certification by the public official 
                responsible for submitting the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act that the proposed 
                activities are consistent with the approved 
                housing strategy of the State or unit of 
                general local government within which the 
                project is located (or, during the first 12 
                months after enactment of the Cranston-Gonzalez 
                National Affordable Housing Act, that the 
                application is consistent with such other 
                existing State or local housing plan or 
                strategy that the Secretary shall determine to 
                be appropriate); and
                  [(E) a certification that the applicant will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing.
  [(d) Selection Criteria.--The Secretary shall, by regulation, 
establish selection criteria for a national competition for 
assistance under this section, which shall include--
          [(1)  the  qualifications  or  potential  
        capabilities  of  the  applicant;
          [(2) the extent of tenant interest in the development 
        of a homeownership program for the project;
          [(3) the potential of the applicant for developing a 
        successful and affordable homeownership program and the 
        suitability of the project for homeownership;
          [(4) national geographic diversity among projects for 
        which applicants are selected to receive assistance; 
        and
          [(5) such other factors that the Secretary shall 
        require that (in the determination of the Secretary) 
        are appropriate for purposes of carrying out the 
        program established by this title in an effective and 
        efficient manner.

[SEC. 303. IMPLEMENTATION GRANTS.

  [(a) Grants.--The Secretary is authorized to make 
implementation grants to applicants for the purpose of carrying 
out homeownership programs approved under this title.
  [(b) Eligible Activities.--Implementation grants may be used 
for activities to carry out homeownership programs (including 
programs for cooperative ownership) that meet the requirements 
under this subtitle, including the following activities:
          [(1) Architectural and engineering work.
          [(2) Implementation of the homeownership program, 
        including acquisition of the public housing project 
        from a public housing agency for the purpose of 
        transferring ownership to eligible families in 
        accordance with a homeownership program that meets the 
        requirements under this title.
          [(3) Rehabilitation of any public housing project 
        covered by the homeownership program, in accordance 
        with standards established by the Secretary.
          [(4) Abatement of lead-based paint hazards, as 
        required by section 302(a) of the Lead-Based Paint 
        Poisoning Prevention Act.
          [(5) Administrative costs of the applicant, which may 
        not exceed 15 percent of the amount of assistance 
        provided under this section.
          [(6) Development of resident management corporations 
        and resident management councils, but only if the 
        applicant has not received assistance under section 302 
        for such activities.
          [(7) Counseling and training of homebuyers and 
        homeowners under the homeownership program.
          [(8) Relocation of tenants who elect to move.
          [(9) Any necessary temporary relocation of tenants 
        during rehabilitation.
          [(10) Funding of operating expenses and replacement 
        reserves of the project covered by the homeownership 
        program, except that the amount of assistance for 
        operating expenses shall not exceed the amount the 
        project would have received if it had continued to 
        receive such assistance under section 9, with 
        adjustments comparable to those that would have been 
        made under section 9.
          [(11) Implementation of a replacement housing plan.
          [(12) Legal fees.
          [(13) Defraying costs for the ongoing training needs 
        of the recipient that are related to developing and 
        carrying out the homeownership program.
          [(14) Economic development activities that promote 
        economic self-sufficiency of homebuyers, residents, and 
        homeowners under the homeownership program.
  [(c) Matching Funding.--
          [(1) In general.--Each recipient shall assure that 
        contributions equal to not less than 25 percent of the 
        grant amount made available under this section, 
        excluding any amounts provided for post-sale operating 
        expenses and replacement housing, shall be provided 
        from non-Federal sources to carry out the homeownership 
        program.
          [(2) Form.--Such contributions may be in the form 
        of--
                  [(A) cash contributions from non-Federal 
                resources, which may not include Federal tax 
                expenditures or funds from a grant made under 
                section 106(b) or section 106(d) of the Housing 
                and Community Development Act of 1974;
                  [(B) payment of administrative expenses, as 
                defined by the Secretary, from non-Federal 
                resources, including funds from a grant made 
                under section 106(b) or section 106(d) of the 
                Housing and Community Development Act of 1974;
                  [(C) the value of taxes, fees, or other 
                charges that are normally and customarily 
                imposed but are waived, foregone, or deferred 
                in a manner that facilitates the implementation 
                of a homeownership program assisted under this 
                subtitle;
                  [(D) the value of land or other real property 
                as appraised according to procedures acceptable 
                to the Secretary;
                  [(E) the value of investment in on-site and 
                off-site infrastructure required for a 
                homeownership program assisted under this 
                subtitle; or
                  [(F) such other in-kind contributions as the 
                Secretary may approve.
        Contributions for administrative expenses shall be 
        recognized only up to an amount equal to 7 percent of 
        the total amount of grants made available under this 
        section.
          [(3) Reduction of requirement.--The Secretary shall 
        reduce the matching requirement for homeownership 
        programs carried out under this section in accordance 
        with the formula established under section 220(d) of 
        the Cranston-Gonzalez National Affordable Housing Act.
  [(d) Application.--
          [(1) Form and procedure.--An application for an 
        implementation grant shall be submitted by an applicant 
        in such form and in accordance with such procedures as 
        the Secretary shall establish.
          [(2) Minimum requirements.--The Secretary shall 
        require that an application contain at a minimum--
                  [(A) a request for an implementation grant, 
                specifying the amount of the grant requested 
                and its proposed uses;
                  [(B) if applicable, an application for 
                assistance under section 8 of this Act, which 
                shall specify the proposed uses of such 
                assistance and the period during which the 
                assistance will be needed;
                  [(C) a description of the qualifications and 
                experience of the applicant in providing 
                housing for low-income families;
                  [(D) a description of the proposed 
                homeownership program, consistent with section 
                304 and the other requirements of this title, 
                which shall specify the activities proposed to 
                be carried out and their estimated costs, 
                identifying reasonable schedules for carrying 
                it out, and demonstrating that the program will 
                comply with the affordability requirements 
                under section 304(b);
                  [(E) identification and description of the 
                public housing project or projects involved, 
                and a description of the composition of the 
                tenants, including family size and income;
                  [(F) a description of and commitment for the 
                resources that are expected to be made 
                available to provide the matching funding 
                required under subsection (c) and of other 
                resources that are expected to be made 
                available in support of the homeownership 
                program;
                  [(G) identification and description of the 
                financing proposed for any (i) rehabilitation 
                and (ii) acquisition (I) of the property, where 
                applicable, by a resident council or other 
                entity for transfer to eligible families, and 
                (II) by eligible families of ownership 
                interests in, or shares representing, units in 
                the project;
                  [(H) if the applicant is not a public housing 
                agency, the proposed sales price, if any, the 
                basis for such price determination, and terms 
                to the applicant;
                  [(I) the estimated sales prices, if any, and 
                terms to eligible families;
                  [(J) any proposed restrictions on the resale 
                of units under a homeownership program;
                  [(K) identification and description of the 
                entity that will operate and manage the 
                property;
                  [(L) a certification by the public official 
                responsible for submitting the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act that the proposed 
                activities are consistent with the approved 
                housing strategy of the State or unit of 
                general local government within which the 
                project is located (or, during the first 12 
                months after enactment of the Cranston-Gonzalez 
                National Affordable Housing Act, that the 
                application is consistent with such other 
                existing State or local housing plan or 
                strategy that the Secretary shall determine to 
                be appropriate); and
                  [(M) a certification that the applicant will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing.
  [(e) Selection Criteria.--The Secretary shall establish 
selection criteria for a national competition for assistance 
under this section, which shall include--
          [(1) the ability of the applicant to develop and 
        carry out the proposed homeownership program, taking 
        into account the quality of any related ongoing program 
        of the applicant, and the extent of tenant interest in 
        the development of a homeownership program and 
        community support;
          [(2) the feasibility of the homeownership program;
          [(3) the extent to which current tenants and other 
        eligible families will be able to afford the purchase;
          [(4) the quality and viability of the proposed 
        homeownership program, including the viability of the 
        economic self-sufficiency plan;
          [(5) the extent to which funds for activities that do 
        not qualify as eligible activities will be provided in 
        support of the homeownership program;
          [(6) whether the approved comprehensive housing 
        affordability strategy for the jurisdiction within 
        which the public housing project is located includes 
        the proposed homeownership program as one of the 
        general priorities identified pursuant to section 
        105(b)(7) of the Cranston-Gonzalez National Affordable 
        Housing Act;
          [(7) national geographic diversity among housing for 
        which applicants are selected to receive assistance; 
        and
          [(8) the extent to which a sufficient supply of 
        affordable rental housing exists in the locality, so 
        that the implementation of the homeownership program 
        will not reduce the number of such rental units 
        available to residents currently residing in such units 
        or eligible for residency in such units.
  [(f) Location Within Participating Jurisdictions.--The 
Secretary  may  approve  applications  for  grants  under  this 
 title only  for public housing projects located within the 
boundaries of jurisdictions--
          [(1) which are participating jurisdictions under 
        title III of the Cranston-Gonzalez National Affordable 
        Housing Act; or
          [(2) on behalf of which the agency responsible for 
        affordable housing has submitted a housing strategy or 
        plan.
  [(g) Approval.--The Secretary shall notify each applicant, 
not later than 6 months after the date of the submission of the 
application, whether the application is approved or not 
approved. The Secretary may approve the application for an 
implementation grant with a statement that the application for 
the section 8 assistance for replacement housing and for 
residents of the project not purchasing units is conditionally 
approved, subject to the availability of appropriations in 
subsequent fiscal years.

[SEC. 304. HOMEOWNERSHIP PROGRAM REQUIREMENTS.

  [(a) In General.--A homeownership program under this title 
shall provide for acquisition by eligible families of ownership 
interests in, or shares representing, at least one-half of the 
units in a public housing project under any arrangement 
determined by the Secretary to be appropriate, such as 
cooperative ownership (including limited equity cooperative 
ownership) and fee simple ownership (including condominium 
ownership), for occupancy by the eligible families.
  [(b) Affordability.--A homeownership program under this title 
shall provide for the establishment of sales prices (including 
principal, insurance, taxes, and interest and closing costs) 
for initial acquisition of the property from the public housing 
agency if the applicant is not a public housing agency, and for 
sales to eligible families, such that an eligible family shall 
not be required to expend more than 30 percent of the adjusted 
income of the family per month to complete a sale under the 
homeownership program.
  [(c) Plan.--A homeownership program under this title shall 
provide, and include a plan, for--
          [(1) identifying and selecting eligible families to 
        participate in the homeownership program;
          [(2) providing relocation assistance to families who 
        elect to move;
          [(3) ensuring continued affordability by tenants, 
        homebuyers, and homeowners in the project;
          [(4) providing ongoing training and counseling for 
        homebuyers and homeowners; and
          [(5) replacing units in eligible projects covered by 
        a homeownership program.
  [(d) Acquisition and Rehabilitation Limitations.--Acquisition 
or rehabilitation of public housing projects under a 
homeownership program under this title may not consist of 
acquisition or rehabilitation of less than the whole public 
housing project in a project consisting of more than 1 
building. The provisions of this subsection may be waived upon 
a finding by the Secretary that the sale of less than all the 
buildings in a project is feasible and will not result in a 
hardship to any tenants of the project who are not included in 
the homeownership program.
  [(e) Financing.--
          [(1) In general.--The application shall identify and 
        describe the proposed financing for (A) any 
        rehabilitation, and (B) acquisition (i) of the project, 
        where applicable, by an entity other than the public 
        housing agency for transfer to eligible families, and 
        (ii) by eligible families of ownership interests in, or 
        shares representing, units in the project. Financing 
        may include use of the implementation grant, sale for 
        cash, or other sources of financing (subject to 
        applicable requirements), including conventional 
        mortgage loans and mortgage loans insured under title 
        II of the National Housing Act.
          [(2) Prohibition against pledges.--Property 
        transferred under this title shall not be pledged as 
        collateral for debt or otherwise encumbered except when 
        the Secretary determines that--
                  [(A) such encumbrance will not threaten the 
                long-term availability of the property for 
                occupancy by low-income families;
                  [(B) neither the Federal Government nor the 
                public housing agency will be exposed to undue 
                risks related to action that may have to be 
                taken pursuant to paragraph (3);
                  [(C) any debt obligation can be serviced from 
                project income, including operating assistance; 
                and
                  [(D) the proceeds of such encumbrance will be 
                used only to meet housing standards in 
                accordance with subsection (f) or to make such 
                additional capital improvements as the 
                Secretary determines to be consistent with the 
                purposes of this title.
          [(3) Opportunity to cure.--Any lender that provides 
        financing in connection with a homeownership program 
        under this subtitle shall give the public housing 
        agency, resident management corporation, individual 
        owner, or other appropriate entity a reasonable 
        opportunity to cure a financial default before 
        foreclosing on the property, or taking other action as 
        a result of the default.
  [(f) Housing Quality Standards.--The application shall 
include a plan ensuring that the unit--
          [(1) will be free from any defects that pose a danger 
        to health or safety before transfer of an ownership 
        interest in, or shares representing, a unit to an 
        eligible family; and
          [(2) will, not later than 2 years after the transfer 
        to an eligible family, meet minimum housing standards 
        established by the Secretary for the purposes of this 
        title.
  [(h) Protection of Non-Purchasing Families.--
          [(1) In general.--No tenant residing in a dwelling 
        unit in a public housing project on the date the 
        Secretary approves an application for an implementation 
        grant may be evicted by reason of a homeownership 
        program approved under this title.
          [(2) Replacement assistance.--If the tenant decides 
        not to purchase a unit, or is not qualified to do so, 
        the recipient shall, during the term of any operating 
        assistance under the implementation grant, permit each 
        otherwise qualified tenant to continue to reside in the 
        project at rents that do not exceed levels consistent 
        with section 3(a) of this Act or, if an otherwise 
        qualified tenant chooses to move (at any time during 
        the term of such operating assistance contract), the 
        public housing agency shall, to the extent approved in 
        appropriations Acts, offer such tenant (A) a unit in 
        another public housing project, or (B) section 8 
        assistance for use in other housing.
          [(3) Relocation assistance.--The recipient shall also 
        inform each such tenant that if the tenant chooses to 
        move, the recipient will pay relocation assistance in 
        accordance with the approved homeownership program.
          [(4) Other rights.--Tenants renting a unit in a 
        project transferred under this title shall have all 
        rights provided to tenants of public housing under this 
        Act.

[SEC. 305. OTHER PROGRAM REQUIREMENTS.

  [(a) Sale by Public Housing Agency To Applicant or Other 
Entity Required.--Where the Secretary approves an application 
providing for the transfer of the eligible project from the 
public housing agency to another applicant, the public housing 
agency shall transfer the project to such other applicant, in 
accordance with the approved homeownership program.
  [(b) Preferences.--In selecting eligible families for 
homeownership, the recipient shall give a first preference to 
otherwise qualified current tenants and a second preference to 
otherwise qualified eligible families who have completed 
participation in an economic self-sufficiency program specified 
by the Secretary.
  [(c) Cost Limitations.--The Secretary may establish cost 
limitations on eligible activities under this title, subject to 
the provisions of this title.
  [(d) Annual Contributions.--Notwithstanding the purchase of a 
public housing project under this section, or the purchase of a 
unit in a public housing project by an eligible family, the 
Secretary shall continue to pay annual contributions with 
respect to the project. Such contributions may not exceed the 
maximum contributions authorized in section 5(a).
  [(e) Operating Subsidies.--Operating subsidies under section 
9 of this Act shall not be available with respect to a public 
housing project after the date of its sale by the public 
housing agency.
  [(f) Use of Proceeds From Sales to Eligible Families.--The 
entity that transfers ownership interests in, or shares 
representing, units to eligible families, or another entity 
specified in the approved application, shall use the proceeds, 
if any, from the initial sale for costs of the homeownership 
program, including operating expenses, improvements to the 
project, business opportunities for low-income families, 
supportive services related to the homeownership program, 
additional homeownership opportunities, and other activities 
approved by the Secretary.
  [(g) Restrictions on Resale by Homeowners.--
          [(1) In general.--
                  [(A) Transfer permitted.--A homeowner under a 
                homeownership program may transfer the 
                homeowner's ownership interest in, or shares 
                representing, the unit, except that a 
                homeownership program may establish 
                restrictions on the resale of units under the 
                program.
                  [(B) Right to purchase.--Where a resident 
                management corporation, resident council, or 
                cooperative has jurisdiction over the unit, the 
                corporation, council, or cooperative shall have 
                the right to purchase the ownership interest 
                in, or shares representing, the unit from the 
                homeowner for the amount specified in a firm 
                contract between the homeowner and a 
                prospective buyer. If such an entity does not 
                have jurisdiction over the unit or elects not 
                to purchase and if the prospective buyer is not 
                a low-income family, the public housing agency 
                or the implementation grant recipient shall 
                have the right to purchase the ownership 
                interest in, or shares representing, the unit 
                for the same amount.
                  [(C) Promissory note required.--The homeowner 
                shall execute a promissory note equal to the 
                difference between the market value and the 
                purchase price, payable to the public housing 
                agency or other entity designated in the 
                homeownership plan, together with a mortgage 
                securing the obligation of the note.
          [(2) 6 years or less.--In the case of a transfer 
        within 6 years of the acquisition under the program, 
        the homeownership program shall provide for appropriate 
        restrictions to assure that an eligible family may not 
        receive any undue profit. The plan shall provide for 
        limiting the family's consideration for its interest in 
        the property to the total of--
                  [(A) the contribution to equity paid by the 
                family;
                  [(B) the value, as determined by such means 
                as the Secretary shall determine through 
                regulation, of any improvements installed at 
                the expense of the family during the family's 
                tenure as owner; and
                  [(C) the appreciated value determined by an 
                inflation allowance at a rate which may be 
                based on a cost-of-living index, an income 
                index, or market index as determined by the 
                Secretary through regulation and agreed to by 
                the purchaser and the entity that transfers 
                ownership interests in, or shares representing, 
                units to eligible families (or another entity 
                specified in the approved application), at the 
                time of initial sale, and applied against the 
                contribution to equity.
        Such an entity may, at the time of initial sale, enter 
        into an agreement with the family to set a maximum 
        amount which this appreciation may not exceed.
          [(3) 6-20 years.--In the case of a transfer during 
        the period beginning 6 years after the acquisition and 
        ending 20 years after the acquisition, the 
        homeownership program shall provide for the recapture 
        by the Secretary or the program of an amount equal to 
        the amount of the declining balance on the note 
        described in paragraph (1)(C).
          [(4) Use of recaptured funds.--Fifty percent of any 
        portion of the net sales proceeds that may not be 
        retained by the homeowner under the plan approved 
        pursuant to this subsection shall be paid to the entity 
        that transferred ownership interests in, or shares 
        representing, units to eligible families, or another 
        entity specified in the approved application, for use 
        for improvements to the project, business opportunities 
        for low-income families, supportive services related to 
        the homeownership program, additional homeownership 
        opportunities, and other activities approved by the 
        Secretary. The remaining 50 percent shall be returned 
        to the Secretary for use under this subtitle, subject 
        to limitations contained in appropriations Acts. Such 
        entity shall keep and make available to the Secretary 
        all records necessary to calculate accurately payments 
        due the Secretary under this subsection.
  [(h) Third Party Rights.--The requirements under this title 
regarding quality standards, resale, or transfer of the 
ownership interest of a homeowner shall be judicially 
enforceable against the grant recipient with respect to actions 
involving rehabilitation, and against purchasers of property 
under this subsection or their successors in interest with 
respect to other actions by affected low-income families, 
resident management corporations, resident councils, public 
housing agencies, and any agency, corporation, or authority of 
the United States Government. The parties specified in the 
preceding sentence shall be entitled to reasonable attorney 
fees upon prevailing in any such judicial action.
  [(i) Dollar Limitation on Economic Development Activities.--
Not more than an aggregate of $250,000 from amounts made 
available under sections 302 and 303 may be used for economic 
development activities under sections 302(b)(6) and 303(b)(9) 
for any project.
  [(j) Timely Homeownership.--Recipients shall transfer 
ownership of the property to tenants within a specified period 
of time that the Secretary determines to be reasonable. During 
the interim period when the property continues to be operated 
and managed as rental housing, the recipient shall utilize 
written tenant selection policies and criteria that are 
consistent with the public housing program and that are 
approved by the Secretary as consistent with the purpose of 
improving housing opportunities for low-income families. The 
recipient shall promptly notify in writing any rejected 
applicant of the grounds for any rejection.
  [(k) Capability of Resident Management Corporations and 
Resident Councils.--To be eligible to receive a grant under 
section 303, a resident management corporation or resident 
council shall demonstrate to the Secretary its ability to 
manage public housing by having done so effectively and 
efficiently for a period of not less than 3 years or by 
arranging for management by a qualified management entity.
  [(l) Records and Audit of Recipients of Assistance.--
          [(1) In general.--Each recipient shall keep such 
        records as may be reasonably necessary to fully 
        disclose the amount and the disposition by such 
        recipient of the proceeds of assistance received under 
        this title (and any proceeds from financing obtained in 
        accordance with subsection (b) or sales under 
        subsections (f) and (g)(4)), the total cost of the 
        homeownership program in connection with which such 
        assistance is given or used, and the amount and nature 
        of that portion of the program supplied by other 
        sources, and such other sources as will facilitate an 
        effective audit.
          [(2) Access by the secretary.--The Secretary shall 
        have access for the purpose of audit and examination to 
        any books, documents, papers, and records of the 
        recipient that are pertinent to assistance received 
        under this title.
          [(3) Access by the comptroller general.--The 
        Comptroller General of the United States, or any of the 
        duly authorized representatives of the Comptroller 
        General, shall also have access for the purpose of 
        audit and examination to any books, documents, papers, 
        and records of the recipient that are pertinent to 
        assistance received under this title.

[SEC. 306. DEFINITIONS.

  [For purposes of this title:
          [(1) The term ``applicant'' means the following 
        entities that may represent the tenants of the project:
                  [(A) A public housing agency (including an 
                Indian housing authority).
                  [(B) A resident management corporation, 
                established in accordance with requirements of 
                the Secretary under section 20.
                  [(C) A resident council.
                  [(D) A cooperative association.
                  [(E) A public or private nonprofit 
                organization.
                  [(F) A public body, including an agency or 
                instrumentality thereof.
          [(2) The term ``eligible family'' means--
                  [(A) a family or individual who is a tenant 
                in the public or Indian housing project on the 
                date the Secretary approves an implementation 
                grant;
                  [(B) a low-income family; or
                  [(C) a family or individual who is assisted 
                under a housing program administered by the 
                Secretary or the Secretary of Agriculture (not 
                including any non-low income families assisted 
                under any mortgage insurance program 
                administered by either Secretary).
          [(3) The term ``homeownership program'' means a 
        program for homeownership meeting the requirements 
        under this title.
          [(4) The term ``recipient'' means an applicant 
        approved to receive a grant under this title or such 
        other entity specified in the approved application that 
        will assume the obligations of the recipient under this 
        title.
          [(5) The term ``resident council'' means any 
        incorporated nonprofit organization or association 
        that--
                  [(A) is representative of the tenants of the 
                housing;
                  [(B) adopts written procedures providing for 
                the election of officers on a regular basis; 
                and
                  [(C) has a democratically elected governing 
                board, elected by the tenants of the housing.

[SEC. 307. RELATIONSHIP TO OTHER HOMEOWNERSHIP OPPORTUNITIES.

  [The program authorized under this title shall be in addition 
to any other public housing homeownership and management 
opportunities, including opportunities under section 5(h) and 
title II of this Act.

[SEC. 308. LIMITATION ON SELECTION CRITERIA.

  [In establishing criteria for selecting applicants to receive 
assistance under this title, the Secretary may not establish 
any selection criterion or criteria that grant or deny such 
assistance to an applicant (or have the effect of granting or 
denying assistance) based on the implementation, continuation, 
or discontinuation of any public policy, regulation, or law of 
any jurisdiction in which the applicant or project is located.

[SEC. 309. ANNUAL REPORT.

  [The Secretary shall annually submit to the Congress a report 
setting forth--
          [(1) the number, type, and cost of public housing 
        units sold pursuant to this title;
          [(2) the income, race, gender, children, and other 
        characteristics of families participating (or not 
        participating) in homeownership programs funded under 
        this title;
          [(3) the amount and type of financial assistance 
        provided under and in conjunction with this title;
          [(4) the amount of financial assistance provided 
        under this title that was needed to ensure continued 
        affordability and meet future maintenance and repair 
        costs; and
          [(5) the recommendations of the Secretary for 
        statutory and regulatory improvements to the program.]
                              ----------                              

             HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974

          * * * * * * *

                     TITLE I--COMMUNITY DEVELOPMENT

          * * * * * * *

                              definitions

  Sec. 102. (a) As used in this title--
          (1) * * *
          * * * * * * *
          (20)(A) * * *
          [(B) The Secretary may establish percentages of 
        median income for any area that are higher or lower 
        than the percentages set forth in subparagraph (A), if 
        the Secretary finds such variations to be necessary 
        because of unusually high or low family incomes in such 
        area.]
          (B) The Secretary may--
                  (i) with respect to any reference in 
                subparagraph (A) to 50 percent of the median 
                income of the area involved, establish 
                percentages of median income for any area that 
                are higher or lower than 50 percent if the 
                Secretary finds such variations to be necessary 
                because of unusually high or low family incomes 
                in such area; and
                  (ii) with respect to any reference in 
                subparagraph (A) to 80 percent of the median 
                income of the area involved, establish a 
                percentage of median income for any area that 
                is higher than 80 percent if the Secretary 
                finds such variation to be necessary because of 
                unusually low family incomes in such area.
          * * * * * * *

                          eligible activities

  Sec. 105. (a) * * *
          * * * * * * *
  (h) Prohibition of Use of Assistance for Employment 
Relocation Activities.--Notwithstanding any other provision of 
law, no amount from a grant under section 106 made in fiscal 
year 1997 or any succeeding fiscal year may be used for any 
activity (including any infrastructure improvement) that is 
intended, or is likely, to facilitate the relocation or 
expansion of any industrial or commercial plant, facility, or 
operation, from one area to another area, if the relocation or 
expansion will result in a loss of employment in the area from 
which the relocation or expansion occurs.
          * * * * * * *

                       TITLE II--ASSISTED HOUSING

          * * * * * * *

           [low-income housing for the elderly or handicapped

  [Sec. 209. The Secretary shall consult the Secretary of 
Health and Human Services to insure that special projects for 
elderly or disabled families authorized pursuant to United 
States Housing Act of 1937 shall meet acceptable standards of 
design and shall provide quality services and management 
consistent with the needs of the occupants. Such projects shall 
be specifically designed and equipped with such ``related 
facilities'' (as defined in section 202(d)(8) of the Housing 
Act of 1959) as may be necessary to accommodate the special 
environmental needs of the intended occupants and shall be in 
support of and supported by the applicable State plans for 
comprehensive services pursuant to section 134 of the Mental 
Retardation Facilities and Community Mental Health Center 
Construction Act of 1963 or State and area plans pursuant to 
title III of the Older Americans Act of 1965.]
          * * * * * * *

      [local housing assistance plans; allocation of housing funds

  [Sec. 213. (a)(1) The Secretary of Housing and Urban 
Development, upon receiving an application for housing 
assistance under the United States Housing Act of 1937, section 
101 of the Housing and Urban Development Act of 1965, or if the 
unit of general local government in which the proposed 
assistance is to be provided has an approved housing assistance 
plan, shall--
          [(A) not later than ten days after receipt of the 
        application, notify the chief executive officer of such 
        unit of general local government that such application 
        is under consideration; and
          [(B) afford such unit of general local government, 
        the opportunity, during the thirty-day period beginning 
        on the date of such notification, to object to the 
        approval of the application on the grounds that the 
        application is inconsistent with its housing assistance 
        plan.
Upon receiving an application for such housing assistance, the 
Secretary shall assure that funds made available under this 
section shall be utilized to the maximum extent practicable to 
meet the needs and goals identified in the unit of local 
government's housing assistance plan.
  [(2) If the unit of general local government objects to the 
application on the grounds that it is inconsistent with its 
housing assistance plan, the Secretary may not approve the 
application unless he determines that the application is 
consistent with such housing assistant plan. If the Secretary 
determines, that such application is consistent with the 
housing assistance plan, he shall notify the chief executive 
officer of the unit of general local government of his 
determination and the reasons therefor in writing. If the 
Secretary concurs with the objection of the unit of local 
government, he shall notify the applicant stating the reason 
therefor in writing.
  [(3) If the Secretary does not receive an objection by the 
close of the period referred to in paragraph (1)(B), he may 
approve the application unless he finds it inconsistent with 
the housing assistance plan. If the Secretary determines that 
an application is inconsistent with a housing assistance plan, 
he shall notify the applicant stating the reasons therefor in 
writing.
  [(4) The Secretary shall make the determinations referred to 
in paragraphs (2) and (3) within thirty days after he receives 
an objection pursuant to paragraph (1)(B) or within thirty days 
after the close of the period referred to in paragraph (1)(B), 
whichever is earlier.
  [(5) As used in this section, the term ``housing assistance 
plan'' means a housing assistance plan submitted and approved 
under section 104 of this Act or, in the case of a unit of 
general local government not participating under title I of 
this Act, a housing planapproved by the Secretary as meeting 
the requirements of this section. In developing a housing assistance 
plan under this paragraph a unit of general local government shall 
consult with local public agencies involved in providing for the 
welfare of children to determine the housing needs of (A) families 
identified by the agencies as having a lack of adequate housing that is 
a primary factor in the imminent placement of a child in foster care or 
in preventing the discharge of a child from foster care and 
reunification with his or her family; and (B) children who, upon 
discharge of the child from foster care, cannot return to their family 
or extended family and for which adoption is not available. The unit of 
general local government shall include in the housing assistance plan 
needs and goals with respect to such families and children.
  [(b) The provisions of subsection (a) shall not apply to--
          [(1) applications for assistance involving 12 or 
        fewer units in a single project or development;
          [(2) applications for assistance with respect to 
        housing in new community developments approved under 
        title IV of the Housing and Urban Development Act of 
        1968 or title VII of the Housing and Urban Development 
        Act of 1970 which the Secretary determines are 
        necessary to meet the housing requirements under such 
        title; or
          [(3) applications for assistance with respect to 
        housing financed by loans or loan guarantees from a 
        State or agency thereof, except that the provisions of 
        subsection (a) shall apply where the unit of general 
        local government in which the assistance is to be 
        provided objects in its housing assistance plan to the 
        exemption provided by this paragraph.
  [(c) For areas in which an approved local housing assistance 
plan is not applicable, the Secretary shall not approve an 
application for housing assistance unless he determines that 
there is a need for such assistance, taking into consideration 
any applicable State housing plans, and that there is or will 
be available in the area public facilities and services 
adequate to serve the housing proposed to be assisted. The 
Secretary shall afford the unit of general local government in 
which the assistance is to be provided an opportunity, during a 
30-day period following receipt of an application by him, to 
provide comments or information relevant to the determination 
required to be made by the Secretary under this subsection.
  [(d)(1)(A)(i) Except as provided by subparagraph (B), the 
Secretary shall allocate assistance referred to in subsection 
(a)(1) the first time it is available for reservation on the 
basis of a formula that is contained in a regulation prescribed 
by the Secretary, and that is based on the relative needs of 
different States, areas, and communities, as reflected in data 
as to population, poverty, housing overcrowding, housing 
vacancies, amount of substandard housing, and other objectively 
measurable conditions specified in the regulation. The 
Secretary may allocate assistance under the preceding sentence 
in such a manner that each State shall receive not less than 
one-half of one percent of the amount of funds available for 
each program referred to in subsection (a)(1) in each fiscal 
year. In allocating assistance under this paragraph for each 
program of housing assistance under subsection (a)(1), the 
Secretary shall apply the formula, to the extent practicable, 
in a manner so that the assistance under the program is 
allocated according to the particular relative needs under the 
preceding sentence that are characteristic of and related to 
the particular type of assistance provided under the program. 
Assistance under section 202 of the Housing Act of 1959 shall 
be allocated in a manner that ensures that awards of the 
assistance under such section are made for projects of 
sufficient size to accommodate facilities for supportive 
services appropriate to the needs of frail elderly residents.
  [(ii) Assistance under section 8(b)(1) of the United States 
Housing Act of 1937 shall be allocated in a manner that enables 
participating jurisdictions to carry out, to the maximum extent 
practicable, comprehensive housing affordability strategies 
approved in accordance with section 105 of the Cranston-
Gonzalez National Affordable Housing Act. Such jurisdictions 
shall submit recommendations for allocating assistance under 
such section 8(b)(1) to the Secretary in accordance with 
procedures that the Secretary determines to be appropriate to 
permit allocations of such assistance to be made on the basis 
of timely and complete information. This clause may not be 
construed to prevent, alter, or otherwise affect the 
application of the formula established pursuant to clause (i) 
for purposes of allocating such assistance. For purposes of 
this clause, the term ``participating jurisdiction'' means a 
State or unit of general local government designated by the 
Secretary to be a participating jurisdiction under title II of 
the Cranston-Gonzalez National Affordable Housing Act. The 
preceding sentence shall not apply to projects acquired from 
the Resolution Trust Corporation under section 21A(c) of the 
Federal Home Loan Bank Act.
  [(B) The formula allocation requirements of subparagraph (A) 
shall not apply to--
          [(i) assistance that is approved in appropriation 
        Acts for use under sections 9 or 14, or the rental 
        rehabilitation grant program under section 17, of the 
        United States Housing Act of 1937, except that the 
        Secretary shall comply with section 102 of the 
        Department of Housing and Urban Development Reform Act 
        of 1989 with respect to such assistance; or
          [(ii) other assistance referred to in subsection (a) 
        that is approved in appropriation Acts for uses that 
        the Secretary determines are incapable of geographic 
        allocation, including amendments of existing contracts, 
        renewal of assistance contracts, assistance to families 
        that would otherwise lose assistance due to the 
        decision of the project owner to prepay the project 
        mortgage or not to renew the assistance contract, 
        assistance to prevent displacement or to provide 
        replacement housing in connection with the demolition 
        or disposition of public and Indian housing, and 
        assistance in support of the property disposition and 
        loan management functions of the Secretary.
  [(C) Any allocation of assistance under subparagraph (A) 
shall, as determined by the Secretary, be made to the smallest 
practicable area, consistent with the delivery of assistance 
through a meaningful competitive process designed to serve 
areas with greater needs.
  [(D) Any amounts allocated to a State or areas or communities 
within a State that are not likely to be used within a fiscal 
year shall not be reallocated for use in another State, unless 
the Secretary determines that other areas or communities (that 
are eligible for assistance under the program) within the same 
State cannot use the amounts within that same fiscal year.
  [(2) Not later than sixty days after approval in an 
appropriation Act, the Secretary shall allocate from the 
amounts available for use in nonmetropolitan areas an amount of 
authority for assistance under section 8(d) of the United 
States Housing Act of 1937 determined in consultation with the 
Secretary of Agriculture for use in connection with section 533 
of the Housing Act of 1949 during the fiscal year for which 
such authority is approved. The amount of assistance allocated 
to nonmetropolitan areas pursuant to this section in any fiscal 
year shall not be less than 20 nor more than 25 per centum of 
the total amount of the assistance that is subject to 
allocation under paragraph (1)(A).
  [(3) The Secretary may reserve such housing assistance funds 
as he deems appropriate for use by a State or agency thereof.
  [(4)(A) Notwithstanding any other provision of law, with 
respect to fiscal years beginning after September 30, 1990, the 
Secretary may retain not more than 5 percent of the financial 
assistance that becomes available under programs described in 
subsection (a)(1) during any fiscal year. Any such financial 
assistance that is retained shall be available for subsequent 
allocation to specific areas and communities, and may only be 
used for--
          [(i) unforeseen housing needs resulting from natural 
        and other disasters;
          [(ii) housing needs resulting from emergencies, as 
        certified by the Secretary, other than such disasters;
          [(iii) housing needs resulting from the settlement of 
        litigation; and
          [(iv) housing in support of desegregation efforts.
  [(B) Any amounts retained in any fiscal year under 
subparagraph (A) that are unexpended at the end of such fiscal 
year shall remain available for the following fiscal year under 
the program under subsection (a)(1) from which the amount was 
retained. Such amounts shall be allocated on the basis of the 
formula under subsection (d)(1).
  [(5)(A) The Secretary shall not reserve or obligate 
assistance subject to allocation under paragraph (1)(A) to 
specific recipients, unless the assistance is first allocated 
on the basis of the formula contained in that paragraph and 
then is reserved and obligated pursuant to a competition.
  [(B) Any competition referred to in subparagraph (A) shall be 
conducted pursuant to specific criteria; for the selection of 
recipients of assistance. The criteria shall be contained in--
          [(i) a regulation promulgated by the Secretary after 
        notice and public comment; or
          [(ii) to the extent authorized by law, a notice 
        published in the Federal Register.
  [(C) Subject to the times at which appropriations for 
assistance subject to paragraph (1)(A) may become available for 
reservation in any fiscal year, the Secretary shall take such 
steps as the Secretary deems appropriate to ensure that, to the 
maximum extent practicable, the process referred to in 
subparagraph (A) is carried out with similar frequency and at 
similar times for each fiscal year.
  [(D) This paragraph shall not apply to assistance referred to 
in paragraph (4).
  [(e) From budget authority made available in appropriation 
Acts for fiscal year 1988, the Secretary shall enter into an 
annual contributions contract for a term of 180 months to 
obligate sufficient funds to provide assistance payments 
pursuant to section 8(b)(1) of the United States Housing Act of 
1937 on behalf of 500 lower income families from budget 
authority made available for fiscal year 1988, so long as such 
families occupy properties in the Park Central New Community 
Project or in adjacent areas that are recognized by the unit of 
general local government in which such Project is located as 
being included within the Park Central New Town In Town 
Project. If a lower income family receiving assistance payments 
pursuant to this subsection ceases to qualify for assistance 
payments pursuant to the provisions of section 8 of such Act or 
of this subsection during the 180-month term of the annual 
contributions contract, assistance payments shall be made on 
behalf of another lower income family who occupies a unit 
identified in the previous sentence.]
          * * * * * * *
                              ----------                              

           CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUSING ACT

          * * * * * * *

                TITLE I--GENERAL PROVISIONS AND POLICIES

          * * * * * * *

SEC. 104. DEFINITIONS.

      As used in this title and in title II:
          (1) * * *
          * * * * * * *
          (10) The term ``low-income families'' means families 
        whose incomes do not exceed 80 percent of the median 
        income for the area, as determined by the Secretary 
        with adjustments for smaller and larger families, 
        except that the Secretary may establish [income 
        ceilings higher or lower] an income ceiling higher than 
        80 percent of the median for the area on the basis of 
        the Secretary's findings that such [variations are] 
        variation is necessary because of prevailing levels of 
        construction costs or fair market rents, or unusually 
        [high or] low family incomes.
          * * * * * * *

               TITLE II--INVESTMENT IN AFFORDABLE HOUSING

          * * * * * * *

                Subtitle A--HOME Investment Partnerships

          * * * * * * *

SEC. 214. INCOME TARGETING.

      Each participating jurisdiction shall invest funds made 
available under this subtitle within each fiscal year so that--
          (1) with respect to rental assistance and rental 
        units--
                  (A) not less than 90 percent of (i) the 
                families receiving such rental assistance are 
                families whose incomes do not exceed 60 percent 
                of the median family income for the area, as 
                determined by the Secretary with adjustments 
                for smaller and larger families, (except that 
                the Secretary may establish [income ceilings 
                higher or lower] an income ceiling higher than 
                60 percent of the median for the area on the 
                basis of the Secretary's findings that such 
                [variations are] variation is necessary because 
                of prevailing levels of construction cost or 
                fair market rent, or unusually [high or] low 
                family income) at the time of occupancy or at 
                the time funds are invested, whichever is 
                later, or (ii) the dwelling units assisted with 
                such funds are occupied by families having such 
                incomes; and
          * * * * * * *

SEC. 215. QUALIFICATION AS AFFORDABLE HOUSING.

      (a) Rental Housing.--
          (1) Qualification.--Housing that is for rental shall 
        qualify as affordable housing under this title only if 
        the housing--
                  (A) bears rents not greater than the lesser 
                of (i) the existing fair market rent for 
                comparable units in the area as established by 
                the Secretary under section 8 of the United 
                States Housing Act of 1937, or (ii) a rent that 
                does not exceed 30 percent of the adjusted 
                income of a family whose income equals 65 
                percent of the median income for the area, as 
                determined by the Secretary, with adjustment 
                for number of bedrooms in the unit, except that 
                the Secretary may establish [income ceilings 
                higher or lower] an income ceiling higher than 
                65 percent of the median for the area on the 
                basis of the Secretary's findings that such 
                [variations are] variation is necessary because 
                of prevailing levels of construction costs or 
                fair market rents, or unusually [high or] low 
                family incomes;
          * * * * * * *

                      TITLE V--HOUSING ASSISTANCE

                 Subtitle A--Public and Indian Housing

          * * * * * * *

[SEC. 518. INDIAN PUBLIC HOUSING EARLY CHILDHOOD DEVELOPMENT 
                    DEMONSTRATION PROGRAM.

  [(a) Funding.--To the extent provided in appropriation Acts, 
of any amounts appropriated under section 5(c) of the United 
States Housing Act of 1937 for fiscal year 1993 for public 
housing grants for Indian housing, $5,200,000 may be used to 
carry out the demonstration program under this section. To the 
extent provided in appropriation Acts, of any amounts 
appropriated under section 5(c) of the United States Housing 
Act of 1937 for fiscal year 1994 for public housing grants for 
Indian housing, $5,418,400 may be used to carry out the 
demonstration program under this section. Under the 
demonstration, the Secretary shall make grants to nonprofit 
organizations, Indian housing authorities, and Indian tribes to 
assist such organizations, housing authorities, and tribes in 
providing early childhood development services in or near low-
income housing developed or operated pursuant to a contract 
between the Secretary of Housing and Urban Development and an 
Indian housing authority for low-income families who reside in 
such Indian public housing.
  [(b) Operation of Demonstration.--Except as provided in this 
section, the Secretary of Housing and Urban Development shall 
carry out the demonstration program under this section in low-
income housing developed or operated pursuant to a contract 
between the Secretary and an Indian housing authority in the 
same manner as the demonstration program under section 222 of 
the Housing and Urban-Rural Recovery Act of 1983 is carried 
out. For purposes of this section, any reference to ``public 
housing'' or a ``low income housing project'' in section 222 of 
such Act is deemed to refer to low-income housing developed or 
operated pursuant to a contract between the Secretary and an 
Indian housing authority.
  [(c) Limitations.--
          [(1) Tribal diversity.--The Secretary of Housing and 
        Urban Development shall provide that the demonstration 
        program under this section is carried out in not more 
        than 1 Indian public housing project for any single 
        Indian tribe.
          [(2) Geographic diversity.--The Secretary of Housing 
        and Urban Development shall carry out the demonstration 
        program under this section through various Indian 
        housing authorities and provide for geographic 
        distribution among such housing authorities.
  [(d) Report.--
          [(1) In general.--Not later than the expiration of 
        the 3-year period beginning on the date of the 
        enactment of this Act, the Secretary of Housing and 
        Urban Development shall prepare and submit to the 
        Congress a detailed report setting forth the findings 
        and conclusions of the Secretary as a result of 
        carrying out the demonstration program established in 
        this section. Such report shall include any 
        recommendations of the Secretary with respect to the 
        establishment of a permanent program of assisting early 
        childhood development services in or near low-income 
        housing developed or operated pursuant to a contract 
        between the Secretary and an Indian housing authority.
          [(2) Conforming provision.--Notwithstanding 
        subsection (b) of this section, section 222(e) of the 
        Housing and Urban-Rural Recovery Act of 1983 (regarding 
        submission of a report) shall not apply to this section 
        and the demonstration program carried out under this 
        section.

[SEC. 519. PUBLIC HOUSING RENT WAIVER FOR POLICE OFFICERS.

  [(a) Authority.--Notwithstanding any other provision of law, 
the Secretary of Housing and Urban Development may permit 
public housing agencies to allow police officers and other 
security personnel (who are not otherwise eligible for 
residence in public housing) to reside in public housing 
dwelling units in accordance with this section.
  [(b) Plan.--To be eligible to utilize dwelling units as 
provided under this section, a public housing agency shall 
submit to the Secretary a plan identifying the projects in 
which the police officers or security personnel will reside and 
describing the anticipated benefits from such residence.
  [(c) Approval.--The Secretary may approve a plan and 
authorize the use of dwelling units under this section only if 
the Secretary determines that such use will--
          [(1) increase security for other public housing 
        residents;
          [(2) result in a limited loss of income to the public 
        housing agency; and
          [(3) not result in a significant reduction of units 
        available for residence by families eligible for such 
        residence under the provisions of the United States 
        Housing Act of 1937.
The Secretary shall notify each public housing agency 
submitting a plan under subsection (b) of approval or 
disapproval of the plan not later than 30 days after the 
Secretary receives the plan.
    [(d) Terms.--Upon approving a plan under subsection (b), 
the Secretary shall waive the applicability of any occupancy 
requirements with respect to the officers or other personnel, 
and may permit the public housing agency submitting the plan to 
establish such special rent requirements and other terms and 
conditions of occupancy that the Secretary considers 
appropriate.

[SEC. 520. PUBLIC AND ASSISTED HOUSING YOUTH SPORTS PROGRAMS.

  [(a) Public Housing Youth Sports Program Grants.--From 
amounts provided for public and assisted housing drug 
elimination grants under section 5130(a) of the Anti-Drug Abuse 
Act of 1988, the Secretary of Housing and Urban Development may 
make grants to qualified entities under subsection (b) to carry 
out youth sports programs for residents of projects of public 
housing agencies with substantial drug problems.
  [(b) Entities Qualified To Receive Grants.--Grants under this 
section may be made only to--
          [(1) States;
          [(2) units of general local government;
          [(3) local park and recreation districts and 
        agencies;
          [(4) public housing agencies;
          [(5) nonprofit organizations and institutions of 
        higher learning providing youth sports services 
        programs;
          [(6) Indian tribes;
          [(7) Indian housing authorities; and
          [(8) institutions of higher learning that have never 
        participated in a youth sports program assisted under 
        this section.
  [(c) Use of Grants.--
          [(1) Public housing sites with substantial drug 
        problems.--Grants under this section shall be used for 
        youth sports programs only with respect to public 
        housing sites that the Secretary determines have a 
        substantial problem regarding the use or sale of 
        illegal drugs.
          [(2) Youth sports program eligibility.--To be 
        eligible to receive assistance from a grant under this 
        section, a youth sports program shall be designed and 
        organized as follows:
                  [(A) The sports program shall serve primarily 
                youths from the public housing project in which 
                the program assisted by the grant is operated.
                  [(B) The sports program shall provide 
                positive sports activities or positive 
                cultural, recreational, or other activities, 
                designed to appeal to youths as alternatives to 
                the drug environment in the public housing 
                project.
                  [(C) The sports program shall be operated as, 
                in conjunction with, or in furtherance of, an 
                organized program or plan designed to eliminate 
                drugs and drug-related problems in the public 
                housing project or projects within the public 
                housing agency.
          [(3) Midnight basketball league programs.--
        Notwithstanding any other provision of this subsection 
        and subsection (d), a grant under this section may be 
        used to carry out any youth sports program that meets 
        the requirements of a midnight basketball league 
        program under subsection (l)(4) (not including 
        subparagraph (B) of such subsection) if the program 
        serves primarily youths and young adults from the 
        public housing project in which the program assisted by 
        the grant is operated.
  [(d) Eligible Activities.--Any qualified entity that receives 
a grant under this section may use amounts from the grant to 
assist in carrying  out  a  youth  sports  program  in  any  of 
 the  following manners:
          [(1) Acquisition, construction, or rehabilitation of 
        community centers, parks, or playgrounds.
          [(2) Redesigning or modifying public spaces in public 
        housing projects to provide increased utilization of 
        the areas by youth sports programs.
          [(3) Provision of public services, including salaries 
        and expenses for staff of youth sports programs, 
        cultural activities, transportation costs, educational 
        programs relating to drug abuse, and sports and 
        recreation equipment.
          [(4) In the case only of an eligible entity described 
        in subsection (b)(8), any transportation costs in 
        connection with the program.
  [(e) Grant Amount Limitations.--
          [(1) Matching amount.--The Secretary may not make a 
        grant to any qualified entity that applies for a grant 
        under subsection (f) unless the applicant entity 
        certifies to the Secretary, as the Secretary shall 
        require, that the applicant will supplement the amount 
        provided by the grant with an amount of funds from non-
        Federal sources equal to or greater than 50 percent of 
        the amount provided by the grant.
          [(2) Non-federal funds.--For purposes of this 
        subsection, the term ``funds from non-Federal sources'' 
        includes funds from States, units of general local 
        governments, or agencies of such governments, Indian 
        tribes, private contributions, any salary paid to staff 
        to carry out the youth sports program of the recipient, 
        the value of the time and services contributed by 
        volunteers to carry out the program of the recipient at 
        a rate determined by the Secretary, the value of any 
        donated material, equipment, or building, and the value 
        of any lease on a building.
          [(3) Prohibition of substitution of funds.--Neither 
        amounts received from grants under this section nor any 
        State or local government funds used to supplement such 
        amounts may be used to replace other public funds 
        previously used, or designated for use, for the 
        purposes under this Act.
          [(4) Maximum annual grant amount.--For any single 
        fiscal year, the Secretary may not award grants under 
        this section for carrying out a youth sports program 
        with respect to any single public housing project in an 
        amount exceeding $125,000.
  [(f) Applications.--To be eligible to receive a grant under 
this section, a qualified entity under subsection (b) shall 
submit to the Secretary an application as the Secretary may 
require, which shall include the following:
          [(1) A description of the organization of the youth 
        sports program.
          [(2) A description of the nature of services provided 
        by the youth sports program.
          [(3) An estimate of the number of youth involved.
          [(4) A description of the extent of involvement of 
        local sports organizations or sports figures.
          [(5) A description of the facilities used.
          [(6) A description of plans to continue the youth 
        sports program in the future.
          [(7) A statement regarding the extent to which the 
        youth sports program meets the criteria for selection 
        under subsection (g).
          [(8) A description of the planned schedule and 
        activities of the youth sports program and the 
        financial and other resources committed to each 
        activity and service of the program.
          [(9) A budget describing the share of the costs of 
        the youth sports program provided by the grant under 
        this section and other sources of funds, including 
        funds required under subsection (e)(1).
          [(10) Any other information that the Secretary may 
        require.
  [(g) Selection Criteria.--The Secretary shall select 
qualified entities that have applied under subsection (f) to 
receive grants under this section pursuant to a competition 
based on the following criteria:
          [(1) The extent to which the youth sports program to 
        be assisted with the grant addresses the particular 
        needs of the area to be served by the program and 
        employs methods, approaches, or ideas in the design or 
        implementation of the program particularly suited to 
        fulfilling such needs (whether such methods are 
        conventional or unique and innovative).
          [(2) The technical merit of the application of the 
        qualified entity.
          [(3) The qualifications, capabilities, and experience 
        of the personnel and staff of the sports program who 
        are critical to achieving the objectives of the program 
        as described in the application.
          [(4) The capabilities, related experience, 
        facilities, techniques of the applicant for carrying 
        out the youth sports program and achieving the 
        objectives of the program as described in the 
        application and the potential of the applicant for 
        continuing the youth sports program.
          [(5) The severity of the drug problem at the local 
        public housing site for the youth sports program and 
        the extent of any planned or actual efforts to rid the 
        site of the problem.
          [(6) The extent to which local sports organizations 
        or sports figures are involved.
          [(7) The extent of the support of the public housing 
        agency for the program, coordination of proposed 
        activities with local resident management groups or 
        associations (where such groups exist) and coordination 
        of proposed activities with ongoing programs of the 
        applicant that further the purposes of this section.
          [(8) The extent of non-Federal contributions that 
        exceed the amount of such funds required under 
        subsection (e)(1).
          [(9) In the case of a qualified entity under 
        paragraph (3) or (4) of subsection (b), the extent to 
        which the applicant has demonstrated local government 
        support for the program.
  [(h) Report.--Each qualified entity that receives a grant 
under this section shall submit to the Secretary, not later 
than the expiration of the 90-day period beginning on the date 
on which the grant amounts provided under this section are 
fully expended, a report describing the activities carried out 
with the grant.
  [(i) Definitions.--For purposes of this section:
          [(1) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given such term in section 102(a)(17) of the 
        Housing and Community Development Act of 1974.
          [(2) Public housing agency.--The term ``public 
        housing agency'' has the meaning given the term in 
        section 3(b) of the United States Housing Act of 1937 
        (42 U.S.C. 1437a(b)).
          [(3) Public housing project.--The terms ``project'' 
        and ``public housing'' have the meanings given the 
        terms in section 3(6) of the United States Housing Act 
        of 1937 (42 U.S.C. 1437a(b)).
          [(4) Qualified entity.--The term ``qualified entity'' 
        means an entity eligible under subsection (b) to apply 
        for and receive a grant under this section.
          [(5) State.--The term ``State'' means the States of 
        the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Commonwealth of the 
        Northern Mariana Islands, Guam, the Virgin Islands, 
        American Samoa, the Trust Territory of the Pacific 
        Islands, and any other territory or possession of the 
        United States.
          [(6) Unit of general local government.--The term 
        ``unit of general local government'' means any city, 
        town, township, county, parish, village, or other 
        general purpose political subdivision of a State.
          [(7) Secretary.--The term ``Secretary'' means the 
        Secretary of Housing and Urban Development.
  [(j) Regulations.--The Secretary shall issue any regulations 
necessary to carry out this section.
  [(k) Authorization of Appropriations.--Section 5129 of the 
Anti-Drug Abuse Act of 1988 (42 U.S.C. 11908), as amended by 
the preceding provisions of this Act, is further amended by 
inserting after the first sentence the following new sentence:  
* * *
  [(l) Midnight Basketball League Training and Partnership 
Programs.--
          [(1) Authority.--The Secretary shall make grants, to 
        the extent that amounts are approved in appropriations 
        Acts under paragraph (13), to--
                  [(A) eligible entities to assist such 
                entities in carrying out midnight basketball 
                league programs meeting the requirements of 
                paragraph (4); and
                  [(B) eligible advisory entities to provide 
                technical assistance to eligible entities in 
                establishing and operating such midnight 
                basketball league programs.
          [(2) Eligible entities.--
                  [(A) In general.--Subject to subparagraph 
                (B), grants under paragraph (1)(A) may be made 
                only to the following eligible entities:
                          [(i) Entities eligible under 
                        subsection (b) for a grant under 
                        subsection (a).
                          [(ii) Nonprofit organizations 
                        providing employment counseling, job 
                        training, or other educational 
                        services.
                          [(iii) Nonprofit organizations 
                        providing federally assisted low-income 
                        housing.
                  [(B) Prohibition on second grants.--A grant 
                under paragraph (1)(A) may not be made to an 
                eligible entity if the entity has previously 
                received a grant under such paragraph, except 
                that the Secretary may exempt an eligible 
                advisory entity from the prohibition under this 
                subparagraph in extraordinary circumstances.
          [(3) Use of grant amounts.--Any eligible entity that 
        receives a grant under paragraph (1)(A) may use such 
        amounts only--
                  [(A) to establish or carry out a midnight 
                basketball league program under paragraph (4);
                  [(B) for salaries for administrators and 
                staff of the program;
                  [(C) for other administrative costs of the 
                program, except that not more than 5 percent of 
                the grant amount may be used for such 
                administrative costs; and
                  [(D) for costs of training and assistance 
                provided under paragraph (4)(I).
          [(4) Program requirements.--Each eligible entity 
        receiving a grant under paragraph (1)(A) shall 
        establish a midnight basketball league program as 
        follows:
                  [(A) The program shall establish a basketball 
                league of not less than 8 teams having 10 
                players each.
                  [(B) Not less than 50 percent of the players 
                in the basketball league shall be residents of 
                federally assisted low-income housing or 
                members of low-income families (as such term is 
                defined in section 3(b) of the United States 
                Housing Act of 1937).
                  [(C) The program shall be designed to serve 
                primarily youths and young adults from a 
                neighborhood or community whose population has 
                not less than 2 of the following 
                characteristics (in comparison with national 
                averages):
                          [(i) A substantial problem regarding 
                        use or sale of illegal drugs.
                          [(ii) A high incidence of crimes 
                        committed by youths or young adults.
                          [(iii) A high incidence of persons 
                        infected with the human 
                        immunodeficiency virus or sexually 
                        transmitted diseases.
                          [(iv) A high incidence of pregnancy 
                        or a high birth rate, among 
                        adolescents.
                          [(v) A high unemployment rate for 
                        youths and young adults.
                          [(vi) A high rate of high school 
                        drop-outs.
                  [(D) The program shall require each player in 
                the league to attend employment counseling, job 
                training, and other educational classes 
                provided under the program, which shall be held 
                immediately following the conclusion of league 
                basketball games at or near the site of the 
                games and at other specified times.
                  [(E) The program shall serve only youths and 
                young adults who demonstrate a need for such 
                counseling, training, and education provided by 
                the program, in accordance with criteria for 
                demonstrating need, which shall be established 
                by the Secretary, in consultation with the 
                Advisory Committee.
                  [(F) The majority of the basketball games of 
                the league shall be held between the hours of 
                10:00 p.m. and 2:00 a.m. at a location in the 
                neighborhood or community served by the 
                program.
                  [(G) The program shall obtain sponsors for 
                each team in the basketball league. Sponsors 
                shall be private individuals or businesses in 
                the neighborhood or community served by the 
                program who make financial contributions to the 
                program and participate in or supplement the 
                employment,job training, and educational 
services provided to the players under the program with additional 
training or educational opportunities.
                  [(H) The program shall comply with any 
                criteria established by the Secretary, in 
                consultation with the Advisory Committee 
                established under paragraph (9).
                  [(I) Administrators or organizers of the 
                program shall receive training and technical 
                assistance provided by eligible advisory 
                entities receiving grants under paragraph (8).
          [(5) Grant amount limitations.--
                  [(A) Private contributions.--The Secretary 
                may not make a grant under paragraph (1)(A) to 
                an eligible entity that applies for a grant 
                under paragraph (6) unless the applicant entity 
                certifies to the Secretary that the entity will 
                supplement the grant amounts with amounts of 
                funds from non-Federal sources, as follows:
                          [(i) In each of the first 2 years 
                        that amounts from the grant are 
                        disbursed (under subparagraph (E)), an 
                        amount sufficient to provide not less 
                        than 35 percent of the cost of carrying 
                        out the midnight basketball league 
                        program.
                          [(ii) In each of the last 3 years 
                        that amounts from the grant are 
                        disbursed, an amount sufficient to 
                        provide not less than 50 percent of the 
                        cost of carrying out the midnight 
                        basketball league program.
                  [(B) Non-federal funds.--For purposes of this 
                paragraph, the term ``funds from non-Federal 
                sources'' includes amounts from nonprofit 
                organizations, public housing agencies, States, 
                units of general local government, and Indian 
                housing authorities, private contributions, any 
                salary paid to staff (other than from grant 
                amounts under paragraph (1)(A)) to carry out 
                the program of the eligible entity, in-kind 
                contributions to carry out the program (as 
                determined by the Secretary after consultation 
                with the Advisory Committee), the value of any 
                donated material, equipment, or building, the 
                value of any lease on a building, the value of 
                any utilities provided, and the value of any 
                time and services contributed by volunteers to 
                carry out the program of the eligible entity.
                  [(C) Prohibition on substitution of funds.--
                Grant amounts under paragraph (1)(A) and 
                amounts provided by States and units of general 
                local government to supplement grant amounts 
                may not be used to replace other public funds 
                previously used, or designated for use, under 
                this section.
                  [(D) Maximum and minimum grant amounts.--
                          [(i) In general.--The Secretary may 
                        not make a grant under paragraph (1)(A) 
                        to any single eligible entity in an 
                        amount less than $55,000 or exceeding 
                        $130,000, except as provided in clause 
                        (ii).
                          [(ii) Exception for large leagues.--
                        In the case of a league having more 
                        than 80 players, a grant under 
                        paragraph (1)(A) may exceed $130,000, 
                        but may not exceed the amount equal to 
                        35 percent of the cost of carrying out 
                        the midnight basketball league program.
                  [(E) Disbursement.--Amounts provided under a 
                grant under paragraph (1)(A) shall be disbursed 
                to the eligible entity receiving the grant over 
                the 5-year period beginning on the date that 
                the entity is selected to receive the grant, as 
                follows:
                          [(i) In each of the first 2 years of 
                        such 5-year period, 23 percent of the 
                        total grant amount shall be disbursed 
                        to the entity.
                          [(ii) In each of the last 3 years of 
                        such 5-year period, 18 percent of the 
                        total grant amount shall be disbursed 
                        to the entity.
          [(6) Applications.--To be eligible to receive a grant 
        under paragraph (1)(A), an eligible entity shall submit 
        to the Secretary an application in the form and manner 
        required by the Secretary (after consultation with the 
        Advisory Committee), which shall include--
                  [(A) a description of the midnight basketball 
                league program to be carried out by the entity, 
                including a description of the employment 
                counseling, job training, and other educational 
                services to be provided;
                  [(B) letters of agreement from service 
                providers to provide training and counseling 
                services required under paragraph (4) and a 
                description of such service providers;
                  [(C) letters of agreement providing for 
                facilities for basketball games and counseling, 
                training, and educational services required 
                under paragraph (4) and a description of the 
                facilities;
                  [(D) a list of persons and businesses from 
                the community served by the program who have 
                expressed interest in sponsoring, or have made 
                commitments to sponsor, a team in the midnight 
                basketball league; and
                  [(E) evidence that the neighborhood or 
                community served by the program meets the 
                requirements of paragraph (4)(C).
          [(7) Selection.--The Secretary, in consultation with 
        the Advisory Committee, shall select eligible entities 
        that have submitted applications under paragraph (6) to 
        receive grants under paragraph (1)(A). The Secretary, 
        in consultation with the Advisory Committee, shall 
        establish criteria for selection of applicants to 
        receive such grants. The criteria shall include a 
        preference for selection of eligible entities carrying 
        out midnight basketball league programs in suburban and 
        rural areas.
          [(8) Technical assistance grants.--Technical 
        assistance grants under paragraph (1)(B) shall be made 
        as follows:
                  [(A) Eligible advisory entities.--Technical 
                assistance grants may be made only to entities 
                that--
                          [(i) are experienced and have 
                        expertise in establishing, operating, 
                        or administering successful and 
                        effective programs for midnight 
                        basketball and employment, job 
                        training, and educational services 
                        similar to the programs under paragraph 
                        (4); and
                          [(ii) have provided technical 
                        assistance to other entities regarding 
                        establishment and operation of such 
                        programs.
                  [(B) Use.--Amounts received under technical 
                assistance grants shall be used to establish 
                centers for providing technical assistance to 
                entities receiving grants under paragraph 
                (1)(A) of this subsection and subsection (a) 
                regarding establishment, operation, and 
                administration of effective and successful 
                midnight basketball league programs under this 
                subsection and subsection (c)(3).
                  [(C) Number and amount.--To the extent that 
                amounts are provided in appropriations Acts 
                under paragraph (13)(B) in each fiscal year, 
                the Secretary shall make technical assistance 
                grants under paragraph (1)(B). In each fiscal 
                year that such amounts are available the 
                Secretary shall make 4 such grants, as follows:
                          [(i) 2 grants shall be made to 
                        eligible advisory entities for 
                        development of midnight basketball 
                        league programs in public housing 
                        projects.
                          [(ii) 2 grants shall be made to 
                        eligible advisory entities for 
                        development of midnight basketball 
                        league programs in suburban or rural 
                        areas.
                          [(iii) Each grant shall be in an 
                        amount not exceeding $25,000.
          [(9) Advisory committee.--The Secretary of Housing 
        and Urban Development shall appoint an Advisory 
        Committee to assist the Secretary in providing grants 
        under this subsection. The Advisory Committee shall be 
        composed of not more than 7 members, as follows:
                  [(A) Not less than 2 individuals who are 
                involved in managing or administering midnight 
                basketball programs that the Secretary 
                determines have been successful and effective. 
                Such individuals may not be involved in a 
                program assisted under this subsection or a 
                member or employee of an eligible advisory 
                entity that receives a technical assistance 
                grant under paragraph (1)(B).
                  [(B) A representative of the Center for 
                Substance Abuse Prevention of the Public Health 
                Service, Department of Health and Human 
                Services, who is involved in administering the 
                grant program for prevention, treatment, and 
                rehabilitation model projects for high risk 
                youth under section 509A of the Public Health 
                Service Act (42 U.S.C. 290aa-8), who shall be 
                selected by the Secretary of Health and Human 
                Services.
                  [(C) A representative of the Department of 
                Education, who shall be selected by the 
                Secretary of Education.
                  [(D) A representative of the Department of 
                Health and Human Services, who shall be 
                selected by the Secretary of Health and Human 
                Services from among officers and employees of 
                such Department involved in issues relating to 
                high-risk youth.
          [(10) Reports.--The Secretary shall require each 
        eligible entity receiving a grant under paragraph 
        (1)(A) and each eligible advisory entity receiving a 
        grant under paragraph (1)(B) to submit to the 
        Secretary, for each year in which grant amounts are 
        received by the entity, a report describing the 
        activities carried out with such amounts.
          [(11) Study.--To the extent amounts are provided 
        under appropriation Acts pursuant to paragraph (13)(C), 
        the Secretary shall make a grant to one entity 
        qualified to carry out a study under this paragraph. 
        The entity shall use such grant amounts to carry out a 
        scientific study of the effectiveness of midnight 
        basketball league programs under paragraph (4) of 
        eligible entities receiving grants under paragraph 
        (1)(A). The Secretary shall require such entity to 
        submit a report describing the study and any 
        conclusions and recommendations resulting from the 
        study to the Congress and the Secretary not later than 
        the expiration of the 2-year period beginning on the 
        date that the grant under this paragraph is made.
          [(12) Definitions.--For purposes of this subsection:
                  [(A) The term ``Advisory Committee'' means 
                the Advisory Committee established under 
                paragraph (9).
                  [(B) The term ``eligible advisory entity'' 
                means an entity meeting the requirements under 
                paragraph (8)(A).
                  [(C) The term ``eligible entity'' means an 
                entity described under paragraph (2)(A).
                  [(D) The term ``federally assisted low-income 
                housing'' has the meaning given the term in 
                section 5126 of the Public and Assisted Housing 
                Drug Elimination Act of 1990.
                  [(E) The term ``Secretary'' unless otherwise 
                specified, means the Secretary of Housing and 
                Urban Development.
          [(13) Authorization of appropriations.--There are 
        authorized to be appropriated--
                  [(A) for grants under paragraph (1)(A), 
                $2,650,000 in each of fiscal years 1994 and 
                1995;
                  [(B) for technical assistance grants under 
                paragraph (1)(B), $100,000 in each of fiscal 
                years 1994 and 1995; and
                  [(C) for a study grant under paragraph (11), 
                $250,000 in fiscal year 1994.

[SEC. 521. PUBLIC HOUSING ONE-STOP PERINATAL SERVICES DEMONSTRATION.

  [(a) Establishment of Demonstration Program.--
          [(1) In general.--The Secretary of Housing and Urban 
        Development, in consultation with the Secretary of 
        Health and Human Services, shall carry out a program to 
        demonstrate the effectiveness of providing grants to 
        public housing agencies to assist such agencies in 
        providing facilities for making one-stop perinatal 
        services programs (as defined in subsection (e)(1)) 
        available for pregnant women who reside in public 
        housing. Under the demonstration program, the Secretary 
        shall make grants to not more than 10 public housing 
        agencies.
          [(2) Consultation requirements.--In carrying out the 
        demonstration program under this section, the Secretary 
        shall consult with the heads of other appropriate 
        Federal agencies.
  [(b) Allocation of Assistance.--
          [(1) Preferences.--In selecting public housing 
        agencies for grants under this section, the Secretary 
        shall give preference to the following public housing 
        agencies:
                  [(A) Areas with high infant mortality 
                rates.--Public housing agencies serving areas 
                with high infant mortality rates.
                  [(B) Secure facilities.--Public housing 
                agencies that demonstrate, to the satisfaction 
                of the Secretary, that security will be 
                provided so that women are safe when 
                participating in the one-stop perinatal 
                services program carried out at the facilities 
                provided or assisted under this section.
          [(2) Limitation on grant amount.--The aggregate 
        amount provided under this section for any public 
        housing project may not exceed $15,000.
  [(c) Demonstration Program Requirements.--
          [(1) Applications.--Applications for grants under 
        this section shall be made by public housing agencies 
        in accordance with procedures established by the 
        Secretary and shall include a description of the one-
        stop perinatal services program to be provided in the 
        facilities provided or assisted under this section.
          [(2) Use of grants.--Any public housing agency 
        receiving a grant under this section may use the grant 
        only for the costs of providing facilities and minor 
        renovations of facilities necessary to make one-stop 
        perinatal services programs available to pregnant women 
        who reside in public housing.
          [(3) Reports to secretary.--Each public housing 
        agency receiving a grant under this section for any 
        fiscal year shall submit to the Secretary, not later 
        than 3 months after the end of such fiscal year, a 
        report describing the facilities provided by the public 
        housing agency under this section and the one-stop 
        perinatal services program carried out in such 
        facilities. The report shall include data on the size 
        of the facilities, the costs and extent of any 
        renovations, the previous use of the facilities, the 
        number of women assisted by the program, the trimester 
        of the pregnancy of the women at the time of initial 
        assistance, infant birthweight, infant mortality rate, 
        and other relevant information.
          [(4) Applicable standards.--No provision of this 
        section may be construed to authorize the Secretary to 
        establish any health, safety, or other standards with 
        respect to the services provided by the one-stop 
        perinatal services program or facilities provided or 
        assisted with grants received under this section. Such 
        services and facilities shall comply with all 
        applicable State and local laws, regulations, and 
        ordinances, and all requirements established by the 
        Secretary of Health and Human Services for such 
        services and facilities.
  [(d) Report to Congress.--Not later than 1 year after the 
date that amounts to carry out this section are first made 
available under appropriations Acts, the Secretary shall 
prepare and submit to the Congress a comprehensive report 
setting forth the findings and conclusions of the Secretary as 
a result of carrying out the demonstration program under this 
section. The report shall include any recommendations of the 
Secretary with respect to the establishment of a permanent 
program of providing facilities in public housing for making 
perinatal services available to pregnant women who reside in 
the public housing.
  [(e) Definitions.--For purposes of this section:
          [(1) One-stop perinatal services program.--The term 
        ``one-stop perinatal services program'' means a program 
        to provide a wide range of services for pregnant and 
        new mothers in a coordinated manner at a drop-in 
        center, which may include any of the following:
                  [(A) Information and education.--Information 
                and education for pregnant women regarding 
                perinatal care services, and related services 
                and resources, necessary to decrease infant 
                mortality and disability.
                  [(B) Health care services.--Basic health care 
                services that can be provided without a 
                physician present.
                  [(C) Referral.--Basic health screening of 
                pregnant women and referrals for health care 
                services.
                  [(D) Followup.--Followup assessment of women 
                and infants (including measurement of weight) 
                and referrals for health care services and 
                related services and resources.
                  [(E) Social worker.--Information and 
                assistance regarding Federal and State social 
                services provided by a social worker.
                  [(F) Other.--Any other services to assist 
                pregnant or new mothers.
          [(2) Public housing.--The terms ``public housing'' 
        and ``public housing agency'' have the meanings given 
        such terms in section 3(b) of the United States Housing 
        Act of 1937 (42 U.S.C. 1437a(b)).
          [(3) Secretary.--The term ``Secretary'' means the 
        Secretary of Housing and Urban Development.
  [(f) Regulations.--The Secretary shall issue any regulations 
necessary to carry out this section.
  [(g) Authorization of Appropriations.--There are authorized 
to be appropriated for carrying out the demonstration program 
under this section $200,000 for fiscal year 1993 and $208,400 
for fiscal year 1994.

[SEC. 522. PUBLIC HOUSING MIXED INCOME NEW COMMUNITIES STRATEGY 
                    DEMONSTRATION.

  [(a) Establishment of Demonstration Program.--
          [(1) In general.--The Secretary of Housing and Urban 
        Development shall carry out a program to demonstrate 
        the effectiveness of promoting the revitalization of 
        troubled urban communities through the provision of 
        public housing in socio-economically mixed settings 
        combined with the innovative use of public housing 
        operating subsidies to stimulate the development of new 
        affordable housing in such communities.
          [(2) Comprehensive services.--Housing units provided 
        under the demonstration program under this section 
        shall be made available in connection with a 
        comprehensive program of services and incentives under 
        subsections (h) and (i), in order to prepare 
        participating families for successful transition to 
theprivate rental housing market and homeownership within a reasonable 
period of time.
  [(b) Coordinating Committee.--
          [(1) Establishment.--For a public housing agency to 
        be eligible for designation or selection under 
        subsection (d) for participation in the demonstration 
        program, the chief executive officer of each unit of 
        general local government in which the public housing 
        agency is located shall appoint a coordinating 
        committee under this paragraph. The coordinating 
        committee shall participate in developing a plan for 
        implementing the demonstration program, review, 
        monitor, and make recommendations for improvements in 
        activities under the demonstration program, and ensure 
        the coordination and delivery of services under 
        subsection (h).
          [(2) Membership.--Each coordinating committee shall 
        be composed of 12 members, who shall include, but may 
        not be limited to, the following individuals:
                  [(A) A representative of the chief executive 
                officer of the applicable unit of general local 
                government.
                  [(B) A representative of the applicable 
                public housing agency.
                  [(C) A representative of the regional 
                administrator of the Department of Housing and 
                Urban Development.
                  [(D) A representative of a local resident 
                management corporation.
                  [(E) Not less than 1 individual affiliated 
                with a local agency that administers programs 
                in 1 of the following areas: health, human 
                services, substance abuse, education, economic 
                and business development, law enforcement, and 
                housing.
                  [(F) A representative from among local 
                businesses engaged in housing and real estate.
                  [(G) A representative from among business 
                engaged in real estate financing.
          [(3) Social service committees.--Each coordinating 
        committee established under this subsection shall 
        establish a subcommittee on social services, which 
        shall, before any action is taken under subsection 
        (e)(1) (with respect to the demonstration program as 
        carried out by the applicable public housing agency), 
        identify the specific services that are required to 
        successfully carry out the demonstration program.
  [(c) Interagency Cooperation.--The Secretary shall coordinate 
with the appropriate heads of other Federal agencies as 
necessary to coordinate the implementation of the demonstration 
program and endeavor to ensure the delivery of supportive 
services required under subsection (h).
  [(d) Scope of Demonstration Program.--
          [(1) Participating public housing agencies.--The 
        Secretary shall carry out the demonstration program 
        with respect to public housing for families 
        administered by the Housing Authority of the City of 
        Chicago, in the State of Illinois. The Secretary may 
        also carry out the demonstration program with respect 
        to public housing administered by not more than 3 other 
        public housing agencies.
          [(2) Participating public housing units.--Over the 
        term of the demonstration, the demonstration may be 
        applied to not more than 15 percent of the total number 
        of public housing units for families administered by 
        each participating public housing agency.
          [(3) Nondisplacement.--No person who is a tenant of 
        public housing during the term of the demonstration 
        program may be involuntarily relocated or displaced 
        under the demonstration program.
  [(e) Housing Development.--
          [(1) Use of public housing operating subsidies.--For 
        the purpose of providing reasonable and necessary 
        operating costs in connection with the development of 
        additional affordable housing, under the demonstration 
        program the Secretary shall amend the annual 
        contributions contract between the Secretary and each 
        participating public housing agency as the Secretary 
        determines appropriate to permit the public housing 
        agency to utilize operating subsidy amounts allocated 
        to the agency under section 9 of the United States 
        Housing Act of 1937 with respect to newly constructed 
        or rehabilitated housing units that are privately 
        developed and owned. Such units shall be reserved for 
        use under the demonstration program for occupancy by 
        very low-income families as provided under this 
        subsection and subsection (g).
          [(2) Lease terms.--Operating subsidy amounts shall be 
        provided for the operation of housing under paragraph 
        (1) pursuant to a lease contract between the owner of 
        the housing and the public housing agency, which shall 
        specify--
                  [(A) the number of units to be leased 
                exclusively to the public housing agency for 
                the term of the demonstration program, subject 
                only to the availability of amounts under 
                paragraph (1) or other funds for such purposes; 
                and
                  [(B) the requirements under subsection 
                (f)(6).
          [(3) Transfer of amounts.--Operating subsidy amounts 
        may be provided for a unit of housing under paragraph 
        (1) only after the execution of a lease under 
        subsection (f)(5) for 1 corresponding public housing 
        unit.
          [(4) Rental terms.--Units leased by a participating 
        public housing agency under this subsection shall be 
        available only to very low-income families that reside, 
        or have been offered a unit, in public housing 
        administered by the public housing agency and that 
        enter into a voluntary contract under subsection 
        (g)(1). The rental charge for each unit shall be the 
        amount equal to 30 percent of the adjusted income of 
        the resident family (as determined under section 3(b) 
        of the United States Housing Act of 1937), except that 
        the rental charge may not exceed a ceiling rent 
        determined by the public housing agency in the manner 
        that monthly rent is determined under section 
        3(a)(2)(A) of such Act.
          [(5) Income mix.--Not more than 25 percent of the 
        units in each privately developed housing project under 
        the demonstration program may be leased by a public 
        housing agency pursuant to a lease contract under 
        paragraph (2). The number of units under each such 
        lease may not be less than the number of public housing 
        units that, notwithstanding the demonstration program, 
        would have been assisted with the operating subsidy 
        amounts made available under such contract, to ensure 
        that there shall be no loss of public housing units.
          [(6) Coordination with other entities for development 
        of housing.--A participating public housing agency may 
        seek the cooperation and receive assistance from State, 
        county, and local governments and the private sector to 
        develop housing for use under this subsection. Such 
        assistance may include, but is not limited to--
                  [(A) donations of land and write-downs and 
                discounts on land by local governments;
                  [(B) abatement of real estate taxes for 
                specified periods by local, county, or State 
                governments;
                  [(C) assignment of community development 
                block grant funds and loan guarantees made 
                available under title I of the Housing and 
                Community Development Act of 1974;
                  [(D) low interest rate financing through 
                Federal Home Loan Bank programs, State or 
                Federal programs, and private lenders;
                  [(E) low-income housing tax credits from 
                State and local governments; and
                  [(F) mortgage revenue bonds from State or 
                local governments.
          [(7) Determination of location and number of units.--
                  [(A) In general.--A participating public 
                housing agency and the applicable unit of 
                general local government shall jointly 
                determine the location of any newly constructed 
                or rehabilitated housing to be utilized under 
                the demonstration program carried out by the 
                public housing agency and the number of units 
                to be developed annually, with approval of the 
                legislative body of the local government.
                  [(B) Limitation on number of units.--The 
                total number of newly constructed or 
                rehabilitated units that may be used under this 
                subsection in the demonstration program may not 
                exceed--
                          [(i) for any participating public 
                        housing agency with not more than 5,000 
                        public housing units, 15 percent of the 
                        number of units administered by the 
                        agency;
                          [(ii) for any participating agency 
                        with more than 5,000 but not more than 
                        25,000 units, 10 percent of the number 
                        of units administered by the agency; 
                        and
                          [(iii) for any participating agency 
                        with more than 25,000 units, 4 percent 
                        of the number of units administered by 
                        the agency.
  [(f) Existing Public Housing.--
          [(1) In general.--To facilitate the establishment of 
        socioeconomically mixed communities within existing 
        public housing developments, under the demonstration 
        program the Secretary shall authorize participating 
        public housing agenciesto lease units in existing 
public housing projects, as provided in this subsection, to low-income 
families who are not very low-income families, notwithstanding the 
provisions of section 16(b) of the United States Housing Act of 1937.
          [(2) Limitations on public housing residents.--
                  [(A) In general.--Except as provided in 
                subparagraph (B), not more than 25 percent of 
                the units in each public housing project in 
                which units are utilized under the 
                demonstration program may be occupied by low-
                income families who are not very low-income 
                families. Not less than 75 percent of the units 
                in each such public housing project shall be 
                occupied by very low-income families.
                  [(B) Exception.--Upon determining that a 
                public housing agency has a special need, the 
                Secretary may provide for not more than 50 
                percent of the units in a public housing 
                project utilized under the demonstration 
                program to be occupied by low-income families 
                who are not very low-income families, and the 
                remainder of the units to be occupied by very 
                low-income families. Such special need may 
                include the need to ensure the successful 
                revitalization of troubled public housing 
                through establishing a socioeconomically mixed 
                resident population.
          [(3) Number of units.--The number of such units made 
        available under this subsection by a public housing 
        agency may not exceed the number of units provided 
        under subsection (e) to participating families.
          [(4) Rental terms.--The rent charged any family 
        occupying a unit made available under this subsection 
        may not, at any time during the demonstration period, 
        exceed the ceiling rent level determined by the public 
        housing agency in the manner that monthly rent is 
        determined under section 3(a)(2)(A) of the United 
        States Housing Act of 1937.
          [(5) Lease.--A participating public housing agency 
        shall enter into a lease with each family occupying a 
        public housing unit made available under this 
        subsection. The term of each lease shall be 1 year. 
        Each lease shall be renewable upon expiration for a 
        period not to exceed 7 years. A public housing agency 
        may extend the period as provided under subsection 
        (j)(1).
          [(6) Vacancy.--If, at any time, a participating 
        public housing agency is unable to rent a unit made 
        available under this subsection and the unit has been 
        vacant for a period of 6 months, the agency may--
                  [(A) cancel a lease for 1 unit of housing 
                provided under subsection (e) and recapture any 
                operating subsidy amounts associated with the 
                unit for use with respect to the vacant public 
                housing unit, upon which such public housing 
                unit shall be removed from participation in the 
                demonstration program and made generally 
                available for occupancy as provided under the 
                United States Housing Act of 1937; and
                  [(B) provide the family residing in the 
                housing unit provided under subsection (e) 
                (from which operating subsidy amounts have been 
                recaptured) with assistance under section 8(b) 
                of such Act, subject to the availability of 
                such assistance pursuant to appropriations Acts 
                and notwithstanding any preferences for such 
                assistance under section 8(d)(1)(A)(i) of such 
                Act, and permit the family to remain in the 
                unit.
  [(g) Contracts With Participating Families.--
          [(1) In general.--Under the demonstration program, a 
        participating public housing agency shall enter into a 
        contract with each family that will reside in a unit of 
        privately developed housing leased to the agency under 
        subsection (e). Such family shall voluntarily enter 
        into the contract and shall meet the criteria 
        established under paragraph (2). The contract shall be 
        made part of the lease executed between the family and 
        the public housing agency for such unit, shall set 
        forth the provisions of the demonstration program, and 
        shall specify the resources to be made available to the 
        participating family and the responsibilities of the 
        participating family under the program. The lease shall 
        be for a term of 1 year and shall be renewable upon 
        expiration for a period not to exceed 7 years, except 
        as provided under subsection (j)(1).
          [(2) Establishment of criteria.--Each public housing 
        agency shall establish criteria for participation of 
        families in the demonstration program. The criteria 
        shall be based on factors that may

[SEC. 523. ENERGY EFFICIENCY DEMONSTRATION.

  [(a) Establishment.--The Secretary of Housing and Urban 
Development shall carry out a demonstration program to 
encourage the use of private energy service companies in 
accordance with section 118(a) of the Housing and Community 
Development Act of 1987. The Secretary shall provide technical 
assistance to 5 public housing agencies to demonstrate the 
opportunities for energy cost reduction in 5 public housing 
projects through energy services contracts. Not later than 90 
days after the date of the enactment of this Act, the Secretary 
shall establish such selection criteria for this demonstration 
as the Secretary deems appropriate after consultation with 
representatives of public housing agencies and energy 
efficiency organizations.
  [(b) Report.--As soon as practicable after the expiration of 
the 1-year period beginning on the date of the enactment of 
this Act, the Secretary of Housing and Urban Development shall 
submit to the Congress a report setting forth the findings and 
recommendations of the Secretary as a result of the 
demonstration under this section. The Secretary shall 
disseminate such report, to the extent practicable, to other 
public housing agencies.]
          * * * * * * *

                Subtitle B--Low-Income Rental Assistance

          * * * * * * *

SEC. 550. REVISIONS TO VOUCHER PROGRAM

  (a) * * *
          * * * * * * *
  [(b) Documentation of Excessive Rent Burdens.--
          [(1) Data.--The Secretary of Housing and Urban 
        Development shall collect and maintain, in an automated 
        system, data describing the characteristics of families 
        assisted under the certificate and voucher programs 
        established under section 8 of the United States 
        Housing Act of 1937, which data shall include the share 
        of family income paid toward rent.
          [(2) Report.--Not less than annually, the Secretary 
        shall submit a report to the Congress setting forth, 
        for each of the certificate program and the voucher 
        program, the percentage of families participating in 
        the program who are paying for rent more than the 
        amount determined under section 3(a)(1) of such Act. 
        The report shall set forth data in appropriate 
        categories, such as various areas of the country, types 
        and sizes of public housing agencies, types of 
        families, and types of markets. The data shall identify 
        the jurisdictions in which more than 10 percent of the 
        families assisted under section 8 of such Act pay for 
        rent more than the amount determined under section 
        3(a)(1) of such Act and the report shall include an 
        examination of whether the fair market rent for such 
        areas is appropriate. The report shall also include any 
        recommendations of the Secretary for legislative and 
        administrative actions appropriate as a result of 
        analysis of the data.
          [(3) Availability of data.--The Secretary shall make 
        available to each public housing agency administering 
        assistance under the certificate or voucher program any 
        data maintained under this subsection that relates to 
        the public housing agency.]
          * * * * * * *
                              ----------                              

             HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1987

                      TITLE I--HOUSING ASSISTANCE

      Subtitle A--Programs Under United States Housing Act of 1937

          * * * * * * *

                         PART 2--PUBLIC HOUSING

          * * * * * * *

[SEC. 126. PUBLIC HOUSING COMPREHENSIVE TRANSITION DEMONSTRATION.

  [(a) Establishment of Demonstration Program.--The Secretary 
of Housing and Urban Development (in this section referred to 
as the ``Secretary'') shall carry out a program to demonstrate 
the effectiveness of providing a comprehensive program of 
services to participating public housing residents in order to 
ensure the successful transition of such residents to private 
housing. In carrying out the demonstration program, the 
Secretary shall consult with the heads of other appropriate 
Federal agencies to design and implement procedures to carry 
out the transition from public housing.
  [(b) Scope of Demonstration Program.--The Secretary shall 
carry out the demonstration program with respect to public 
housing administered by the Housing Authority of the City of 
Charlotte, in the State of North Carolina. The Secretary may 
also carry out the demonstration program with respect to public 
housing administered by not more than 10 additional public 
housing agencies.
  [(c) Requirements of Demonstration Program.--The 
demonstration program shall consist of the following 
requirements:
          [(1) Contract of participation.--Each participating 
        public housing agency may enter into a voluntary 
        contract with any family that is to commence residence 
        in a public housing project administered by the public 
        housing agency. The contract shall be made part of the 
        lease, shall set forth the provisions of the 
        demonstration program, and shall specify the resources 
        to be made available to the participating family and 
        the responsibilities of the participating family.
          [(2) Remediation phase.--
                  [(A) During not to exceed the first 2 years 
                of residence of a participating family in 
                public housing, the public housing agency shall 
                ensure the provisions of remediation services 
                to the family in accordance with the terms and 
                conditions of the contract of participation, 
                which may include--
                          [(i) remedial education;
                          [(ii) completion of high school;
                          [(iii) job training and preparation;
                          [(iv) substance abuse treatment and 
                        counseling;
                          [(v) training in homemaking skills 
                        and parenting; and
                          [(vi) training in money management.
                  [(B) During the remediation phase, the amount 
                of rent charged the family may not be increased 
                on the basis of any increase in earned income 
                of the family.
          [(3) Transition phase.--
                  [(A) During not to exceed a 5-year period 
                following completion of the remediation stage--
                          [(i) the head of the family shall be 
                        required to have full-time employment; 
                        and
                          [(ii) the public housing agency shall 
                        ensure the provision of counseling for 
                        the family with respect to 
                        homeownership, money management, and 
                        problem solving.
                  [(B) During the transition phase, the amount 
                of rent charged the family--
                          [(i) may be increased on the basis of 
                        any increase in family income; and
                          [(ii) may not be decreased on the 
                        basis of any decrease in earned income 
                        due to voluntary termination of 
                        employment.
          [(4) Encouragement of savings.--The public housing 
        agency shall take appropriate actions (including the 
        establishment of an escrow savings account) to 
        encourage each participatingfamily to save funds during 
the remediation and transition phases.
          [(5) Effect of increases in family income.--
                  [(A) Any increase in the earned income of a 
                family during participation in the 
                demonstration program under this section may 
                not be considered as income or a resource for 
                the purpose of denying the eligibility of, or 
                reducing the amount of benefits payable to, the 
                family under any other Federal law, unless the 
                income of the family increases at any time to 
                not less than 50 percent of the median income 
                of the area (as determined by the Secretary 
                with adjustments for small and larger 
                families).
                  [(B) If at any time during the participation 
                of a family in the demonstration program the 
                income of the family increases to not less than 
                80 percent of the median income of the area (as 
                determined by the Secretary with adjustments 
                for smaller and larger families), the 
                participation of the family in the 
                demonstration program shall terminate.
          [(6) Completion of transition.--Each family 
        participating in the demonstration program shall be 
        required to complete the transition out of public 
        housing during a period of not more than 7 years. The 
        public housing agency shall extend the period for any 
        family that requests an extension for good cause.
  [(d) Reports to Congress--
          [(1) Interim report.--Not later than 2 years after 
        the date of the enactment of this Act, the Secretary 
        shall submit to the Congress an interim report 
        evaluating the effectiveness of the demonstration 
        program under this section.
          [(2) Final report.--Not later than 60 days after the 
        termination of the demonstration program under 
        subsection (f), the Secretary shall submit to the 
        Congress a final report evaluating the effectiveness of 
        the demonstration program under this section.
  [(e) Regulations.--The Secretary shall issue such regulations 
as may be necessary to carry out this section.
  [(f) Termination of Demonstration Program.--The demonstration 
program under this section shall terminate upon the expiration 
of the 7-year period beginning on the date of the enactment of 
this Act.]
          * * * * * * *

      Subtitle C--Multifamily Housing Management and Preservation

          * * * * * * *

SEC. 183. TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS.

  (a) * * *
          * * * * * * *
  [(c) Nondiscrimination Against Section 8 Certificate Holders 
and Voucher Holders.--No owner of a subsidized project (as 
defined in section 203(i)(2) of the Housing and Community 
Development Amendments of 1978, as amended by section 181(h) of 
this Act) shall refuse--
          [(1) to lease any available dwelling unit in any such 
        project of such owner that rents for an amount not 
        greater than the fair market rent for a comparable 
        unit, as determined by the Secretary under section 8 of 
        the United States Housing Act of 1937, to a holder of a 
        certificate of eligibility under such section, a 
        proximate cause of which is the status of such 
        prospective tenant as a holder of such certificate, and 
        to enter into a housing assistance payments contract 
        respecting such unit; or
          [(2) to lease any available dwelling unit in any such 
        project of such owner to a holder of a voucher under 
        section 8(o) of such Act, and to enter into a voucher 
        contract respecting such unit, a proximate cause of 
        which is the status of such prospective tenant as 
        holder of such voucher.]
          * * * * * * *
                              ----------                              

             HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992

          * * * * * * *

                      TITLE I--HOUSING ASSISTANCE

          * * * * * * *

                 Subtitle B--Public and Indian Housing

          * * * * * * *

[SEC. 132. HOMEOWNERSHIP DEMONSTRATION PROGRAM IN OMAHA, NEBRASKA.

  [(a) Establishment.--The Secretary shall carry out a program 
to facilitate self-sufficiency and homeownership of single-
family homes administered by the Housing Authority of the city 
of Omaha, in the State of Nebraska (in this section referred to 
as the ``Housing Authority''), to demonstrate the effectiveness 
of promoting homeownership and providing support services.
  [(b) Participating Public Housing Units.--For purposes of the 
demonstration program, the Secretary shall authorize the 
Housing Authority to designate single-family housing units for 
eventual homeownership. Over the term of the demonstration, the 
demonstration program may be applied to not more than 20 
percent of the total number of public housing units 
administered by the Housing Authority. In conducting the 
demonstration, the Housing Authority shall affirmatively 
further fair housing objectives.
  [(c) Nondisplacement.--No person who is a tenant of public 
housing may be involuntarily relocated or displaced as a result 
of the demonstration program.
  [(d) Economic Self-Sufficiency.--
          [(1) Establishment of participation criteria.--The 
        Housing Authority shall establish criteria for the 
        participationof families in the demonstration program. 
Such criteria shall be based on factors that may reasonably be expected 
to predict a family's ability to succeed in the homeownership program 
established by this section.
          [(2) Contents of participation criteria.--The 
        criteria referred to in paragraph (1) shall include 
        evidence of interest by the family in homeownership, 
        the employment status and history of employment of 
        family members, and maintenance by the family of the 
        family's previous dwelling.
  [(e) Provision of Supportive Services.--The Housing Authority 
shall ensure the availability of supportive services to each 
family participating in the demonstration program through its 
own resources and through coordination with Federal, State, and 
local agencies and private entities. Supportive services 
available under the demonstration program may include 
counseling, remedial education, education for completion of 
high school, job training and preparation, financial counseling 
emphasizing planning for homeownership, and any other 
appropriate services.
  [(f) Reports to Congress.--
          [(1) Biennial report.--Upon the expiration of the 2-
        year period beginning on the date of enactment of this 
        Act, and each 2-year period thereafter, the Secretary 
        of Housing and Urban Development shall submit to the 
        Congress a report evaluating the effectiveness of the 
        demonstration program established under this section.
          [(2) Final report.--Not later than 60 days after 
        termination of the demonstration program pursuant to 
        subsection (h), the Secretary shall submit to the 
        Congress a final report evaluating the effectiveness of 
        the demonstration program.
  [(g) Regulations.--Not later than the expiration of the 90-
day period beginning on the date of the enactment of this Act 
\1\, the Secretary shall issue interim regulations to carry out 
this section, which shall take effect upon issuance. The 
Secretary shall issue final regulations to carry out this 
subtitle after notice and opportunity for public comment 
regarding the interim regulations, pursuant to the provisions 
of section 553 of title 5, United States Code (notwithstanding 
subsections (a)(2), (b)(B), and (d)(3) of such section). The 
duration of the period for public comment shall not be less 
than 60 days, and the final regulations shall be issued not 
later than the expiration of the 60-day period beginning upon 
the conclusion of the comment period and shall take effect upon 
issuance.
  [(h) Termination.--The demonstration program established 
under this section shall terminate 10 years after the date of 
the enactment of this Act.]
          * * * * * * *

                    Subtitle C--Section 8 Assistance

          * * * * * * *

[SEC. 152. MOVING TO OPPORTUNITY FOR FAIR HOUSING.

  [(a) Authority.--Using any amounts available under subsection 
(e), the Secretary of Housing and Urban Development shall carry 
out a demonstration program to provide tenant-based assistance 
under section 8 of the United States Housing Act of 1937 to 
assist very low-income families with children who reside in 
public housing or housing receiving project-based assistance 
under section 8 of the United States Housing Act of 1937 to 
move out of areas with high concentrations of persons living in 
poverty to areas with low concentrations of such persons. The 
demonstration program carried out under this section shall 
compare and contrast the costs associated with implementing 
such a program (including the costs of counseling, supportive 
services, housing assistance payments and other relevant 
program elements) with the costs associated with the routine 
implementation of the section 8 tenant-based rental assistance 
programs. The Secretary shall enter into annual contributions 
contracts with public housing agencies to administer housing 
assistance payments contracts under the demonstration.
  [(b) Eligible Cities.--
          [(1) In general.--The Secretary shall carry out the 
        demonstration only in cities with populations exceeding 
        350,000 that are located in consolidated metropolitan 
        statistical areas (as designated by the Director of the 
        Office of Management and Budget) having populations 
        exceeding 1,500,000.
          [(2) 1993.--Notwithstanding paragraph (1), in fiscal 
        year 1993, only the 5 cities selected for the 
        demonstration under the item relating to ``Housing 
        Programs--annual contributions for assisted housing 
        (including rescission of funds)'' of title II of the 
        Departments of Veterans Affairs and Housing and Urban 
        Development, and Independent Agencies Appropriations 
        Act, 1992 (105 Stat. 745), and the City of Los Angeles, 
        California, shall be eligible for the demonstration 
        under this section.
  [(c) Services.--The Secretary shall enter into contracts with 
nonprofit organizations to provide counseling and services in 
connection with the demonstration.
  [(d) Reports.--
          [(1) Biennial.--Not later than the expiration of the 
        2-year period beginning on the date of the enactment of 
        this Act (and biennially thereafter), the Secretary 
        shall submit interim reports to the Congress evaluating 
        the effectiveness of the demonstration program under 
        this section. The interim reports shall include a 
        statement of the number of persons served, the level of 
        counseling and the types of services provided, the cost 
        of providing such counseling and services, updates on 
        the employment record of families assisted under the 
        program, and any other information the Secretary 
        considers appropriate in evaluating the demonstration.
          [(2) Final.--Not later than September 30, 2004, the 
        Secretary shall submit a final report to the Congress 
        describing the long-term housing, employment, and 
        educational achievements of the families assisted under 
        the demonstration program. Such report shall also 
        contain an assessment of such achievements for a 
        comparable population of section 8 recipients who have 
        not received assistance under the demonstration 
        program.
  [(e) Funding.--The budget authority available under section 
5(c) of the United States Housing Act of 1937 for tenant-based 
assistance under section 8 of such Act is authorized to be 
increased by $50,000,000, on or after October 1, 1992, and by 
$165,000,000, on or after October 1, 1993, to carry out the 
demonstration under this section. Any amounts made available 
under this paragraph shall be used in connection with the 
demonstration under this section.
  [(f) Implementation.--The Secretary may, by notice published 
in the Federal Register, establish any requirements necessary 
to carry out the demonstration under this section and the 
amendment made by this section. The Secretary shall publish 
such notice not later than the expiration of the 90-day period 
beginning on the date of the enactment of this Act and shall 
submit a copy of such notice to the Congress not less than 15 
days before publication.

[SEC. 153. DIRECTIVE TO FURTHER FAIR HOUSING OBJECTIVES UNDER 
                    CERTIFICATE AND VOUCHER PROGRAMS.

  [Not later than 2 years after the date of the enactment of 
this Act, the Secretary of Housing and Urban Development, in 
consultation with individuals representing fair housing 
organizations, low-income tenants, public housing agencies, and 
other interested parties, shall--
          [(1) review and comment upon the study prepared by 
        the Comptroller General of the United States pursuant 
        to section 558(3) of the Cranston-Gonzalez National 
        Affordable Housing Act;
          [(2) evaluate the implementation and effects of 
        existing demonstration and judicially mandated programs 
        that help minority families receiving section 8 
        certificates and vouchers move out of areas with high 
        concentrations of minority persons living in poverty to 
        areas with low concentrations, including how such 
        programs differ from the routine implementation of the 
        section 8 certificate and voucher programs;
          [(3) independently assess factors (including the 
        adequacy of section 8 fair market rentals, the level of 
        counseling provided by public housing agencies, the 
        existence of racial and ethnic discrimination by 
        landlords) that may impede the geographic dispersion of 
        families receiving section 8 certificates and vouchers;
          [(4) identify and implement any administrative 
        revisions that would enhance geographic dispersion and 
        tenant choice and incorporate the positive elements of 
        various demonstration and judicially mandated mobility 
        programs; and
          [(5) submit to the Congress a report describing its 
        findings under paragraphs (1), (2), and (3), the 
        actions taken under paragraph (4), and any 
        recommendations for additional demonstration, research, 
        or legislative action.]
          * * * * * * *
                              ----------                              

                 SECTION 816 OF THE HOUSING ACT OF 1954

     [audits under public housing act of 1937; comptroller general

  [Sec. 816. Every contract for loans or annual contributions 
under the United States Housing Act of 1937, as amended, shall 
provide that the Secretary of Housing and Urban Development and 
the Comptroller General of the United States, or any of their 
duly authorized representatives, shall, for the purpose of 
audit and examination, have access to any books, documents, 
papers, and records of the public housing agency entering into 
such contract that are pertinent to its operations with respect 
to financial assistance under the United States Housing Act of 
1937, as amended.]
                              ----------                              

                SECTION 302 OF THE NATIONAL HOUSING ACT

                        creation of association

    Sec. 302. (a) * * *
    (b)(1) * * *
    (2) For the purposes set forth in section 301(a), the 
corporation is authorized, pursuant to commitments or 
otherwise, to purchase, service, sell, lend on the security of, 
or otherwise deal in mortgages which are not insured or 
guaranteed as provided in paragraph (1) (such mortgages 
referred to hereinafter as ``conventional mortgages''). No such 
purchase of a conventional mortgage secured by a property 
comprising one- to four-family dwelling units shall be made if 
the outstanding principal balance of the mortgage at the time 
of purchase exceeds 80 per centum of the value of the property 
securing the mortgage, unless (A) the seller retains a 
participation of not less than 10 per centum in the mortgage; 
(B) for such period and under such circumstances as the 
corporation may require, the seller agrees to repurchase or 
replace the mortgage upon demand of the corporation in the 
event that the mortgage is in default; or (C) that portion of 
the unpaid principal balance of the mortgage which is in excess 
of such 80 per centum is guaranteed or insured by a qualified 
insurer as determined by the corporation. The corporation shall 
not issue a commitment to purchase a conventional mortgage 
prior to the date the mortgage is originated, if such mortgage 
is eligible for purchase under the preceding sentence only by 
reason of compliance with the requirements of clause (A) of 
such sentence. The corporation may purchase a conventional 
mortgage which was originated more than one year prior to the 
purchase date only if the seller is the Federal Deposit 
Insurance Corporation, the Resolution Trust Corporation, the 
National Credit Union Administration, or any other seller 
currently engaged in mortgage lending or investing activities. 
For the purpose of this section, the term ``conventional 
mortgages'' shall include a mortgage, lien, or other security 
interest on the stock or membership certificate issued to a 
tenant-stockholder or resident-member of a cooperative housing 
corporation, as defined in section 216 of the Internal Revenue 
Code of 1954, and on the proprietary lease, occupancy 
agreement, or right of tenancy in the dwelling unit of the 
tenant-stockholder or resident-member in such cooperative 
housing corporation. The corporation shall establish 
limitations governing the maximum original principal obligation 
of conventional mortgages that are purchased by it; in any case 
in which the corporation purchases a participation interest in 
such a mortgage, the limitation shall be calculated with 
respect to the total original principal obligation of the 
mortgage and not merely with respect to the interest purchased 
by the corporation. Such limitations shall not exceed $93,750 
for a mortgage secured by a single-family residence, $120,000 
for a mortgage secured by a two-family residence, $145,000 for 
a mortgage secured by a three-family residence, and $180,000 
for a mortgage secured by a four-family residence, except that 
such maximum limitations shall be adjusted effective January 1 
of each year beginning with 1981. Each such adjustment shall be 
made by adding to each such amount (as it may have been 
previously adjusted) a percentage thereof equal to the 
percentage increase during the twelve-month period ending with 
the previous October in the national average one-family house 
price in the monthly survey of all major lenders conducted by 
the Federal Housing Finance Board. [With respect to mortgages 
secured by property comprising five or more family dwelling 
units, such limitations shall not exceed 125 per centum of the 
dollar amounts set forth in section 207(c)(3) of this Act, 
except that such limitations may be increased by the 
corporation (taking into account construction costs) to not to 
exceed 240 per centum of such dollar amounts in any 
geographical area for which the Secretary of Housing and Urban 
Development determines under such section that cost levels 
require any increase in the dollar amount limitations under 
such section.] The foregoing limitations may be increased by 
not to exceed 50 per centum with respect to properties located 
in Alaska, Guam, Hawaii, and the Virgin Islands.
          * * * * * * *
                              ----------                              

         SECTION 305 OF THE EMERGENCY HOME FINANCE ACT OF 1979

                          mortgage operations

    Sec. 305. (a)(1) * * *
    (2) No conventional mortgages secured by a property 
comprising one- to four-family dwelling units shall be 
purchased under this section if the outstanding principal 
balance of the mortgage at the time of purchase exceeds 80 per 
centum of the value of the property securing the mortgage, 
unless (A) the seller retains a participation of not less than 
10 per centum in the mortgage; (B) for such period and under 
such circumstances as the Corporation may require, the seller 
agrees to repurchase or replace the mortgage upon demand of the 
Corporation in the event that the mortgage is in default; or 
(C) that portion of the unpaid principal balance of the 
mortgage which is in excess of such 80 per centum is guaranteed 
or insured by a qualified insurer as determined by the 
Corporation. The Corporation shall not issue a commitment to 
purchase a conventional mortgage prior to the date the mortgage 
is originated, if such mortgage is eligible for purchase under 
the preceding sentence only by reason of compliance with the 
requirements of clause (A) of such sentence. The Corporation 
may purchase a conventional mortgage which was originated more 
than one year prior to the purchase date only if the seller is 
the Federal Deposit Insurance Corporation, the Resolution Trust 
Corporation, the National Credit Union Administration, or any 
other seller currently engaged in mortgage lending or investing 
activities. With respect to any transaction in which a seller 
contemporaneously sells mortgages originated more than one year 
old prior to the date of sale to the Corporation and receives 
in payment for such mortgages securities representing undivided 
interests only in those mortgages, the Corporation shall not 
impose any fee or charge upon an eligible seller which is not a 
member of a Federal Home Loan Bank which differs from that 
imposed upon an eligible seller which is such a member. The 
Corporation shall establish limitations governing the maximum 
original principal obligation of conventional mortgages that 
are purchased by it; in any case in which the Corporation 
purchases a participation interest in such a mortgage, the 
limitation shall be calculated with respect to the total 
original principal obligation of the mortgage and not merely 
with respect to the interest purchased by the Corporation. Such 
limitations shall not exceed $93,750 for a mortgage secured by 
a single-family residence, $120,000 for a mortgage secured by a 
two-family residence, and $180,000 for a mortgage secured by a 
three-family residence, and $180,000 for a mortgage secured by 
a four-family residence, except that such maximum limitations 
shall be adjusted effective January 1 of each year beginning 
with 1981. Each such adjustment shall be made by adding to each 
such amount (as it may have been previously adjusted) a 
percentage thereof equal to the percentage increase during the 
twelve-month period ending with the previous October in the 
national average one-family house price in the monthly survey 
of all major lenders conducted by the Federal Housing Finance 
Board. [With respect to mortgages secured by property 
comprising five or more family dwelling units, such limitations 
shall not exceed 125 per centum of the dollar amounts set forth 
in section 207(c)(3) of the National Housing Act, except that 
such limitations may be increased by the Corporation (taking 
into account construction costs) to not to exceed 240 per 
centum of such dollar amounts in any geographical area for 
which the Secretary of Housing and Urban Development determines 
under such section that cost levels require any increase in the 
dollar amount limitations under such section.] The foregoing 
limitations may be increased by not to exceed 50 per centum 
with respect to properties located in Alaska, Guam, Hawaii, and 
the Virgin Islands.
          * * * * * * *
                              ----------                              

          HOUSING AND COMMUNITY DEVELOPMENT AMENDMENTS OF 1981

          * * * * * * *

           TITLE III--BANKING, HOUSING, AND RELATED PROGRAMS

             Subtitle A--Housing and Community Development

          * * * * * * *

                  PART 2--HOUSING ASSISTANCE PROGRAMS

          * * * * * * *

              miscellaneous housing assistance provisions

  Sec. 326. (a) * * *
          * * * * * * *
  [(b)(1) Within one year after the date of enactment of this 
Act, the Secretary of Housing and Urban Development shall 
conduct a survey to determine the number of projects which are 
assisted under section 8 of the United States Housing Act of 
1937 and are owned by developers or sponsors with five-year 
annual contributions contracts who plan to withdraw from the 
section 8 program when their contracts expire and who will 
increase rents in those projects to levels that the current 
residents of those projects will not be able to afford. Where 
such survey indicates that an owner intends to withdraw from 
the program, the Secretary shall notify affected residents of 
possible rent increases.]
          * * * * * * *
  [(c) The Secretary of Housing and Urban Development, after 
consultation with the Attorney General, shall develop 
regulations to prevent possible conflicts of interest on the 
part of Federal, State, and local government officials with 
regard to participation in projects assisted under section 8 of 
the United States Housing Act of 1937, and shall make such 
regulations effective not later than 180 days after the date of 
enactment of this Act.
  [(d) Rental Assistance Fraud Recoveries.--
          [(1) Authority to retain recovered amounts.--The 
        Secretary of Housing and Urban Development shall permit 
        public housing agencies administering the housing 
        assistance payments program under section 8 of the 
        United States Housing Act of 1937 to retain, out of 
        amounts obtained by the agencies from tenants that are 
        due as a result of fraud and abuse, an amount 
        (determined in accordance with regulations issued by 
        the Secretary) equal to the greater of--
                  [(A) 50 percent of the amount actually 
                collected, or
                  [(B) the actual, reasonable, and necessary 
                expenses related to the collection, including 
                costs of investigation, legal fees, and 
                collection agency fees.
          [(2) Use.--Amounts retained by an agency shall be 
        made available for use in support of the affected 
        program or project, in accordance with regulations 
        issued by the Secretary. Where the Secretary is the 
        principal party initiating or sustaining an action to 
        recover amounts from families or owners, the provisions 
        of this section shall not apply.
          [(3) Recovery.--Amounts may be recovered under this 
        paragraph--
                  [(A) by an agency through a lawsuit 
                (including settlement of the lawsuit) brought 
                by the agency or through court-ordered 
                restitution pursuant to a criminal proceeding 
                resulting from an agency's investigation where 
                the agency seeks prosecution of a family or 
                where an agency seeks prosecution of an owner; 
                or
                  [(B) through administrative repayment 
                agreements with a family or owner entered into 
                as a result of an administrative grievance 
                procedure conducted by an impartial 
                decisionmaker in accordance with section 6(k) 
                of the United States Housing Act of 1937.]
          * * * * * * *
  [Sec. 329A. The Secretary of Housing and Urban Development 
shall develop and implement a revised fee schedule for 
development managers of lower income housing projects assisted 
under the United States Housing Act of 1937 so that the 
percentage limitation applicable to fees chargeable in 
connection with smaller projects is increased to a minimum 
level which is practicable.]
          * * * * * * *
                              ----------                              

DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
             INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1991

          * * * * * * *

                                TITLE II

                    DEPARTMENT OF HOUSING AND URBAN

                              DEVELOPMENT

          * * * * * * *

                     Management and Administration

          * * * * * * *

                       administrative provisions

          * * * * * * *
  [Notwithstanding any other provision of law, regulation or 
other requirement, the Secretary shall not require any public 
housing agency or Indian housing authority to seek competitive 
bids for the procurement of any line of insurance when such 
public housing agency or Indian housing authority purchases 
such line of insurance from a nonprofit insurance entity, owned 
and controlled by public housing agencies or Indian housing 
authorities, and approved by the Secretary. In establishing 
standards for approval of such nonprofit insurance entities, 
the Secretary shall be assured that such entities have 
sufficient surplus capital to meet reasonably expected losses, 
reliable accounting systems, sound actuarial projections, and 
employees experienced in the insurance industry. The Secretary 
shall not place restrictions on the investment of funds of any 
such entity that is regulated by the insurance department of 
any State that describes the types of investments insurance 
companies licensed in such State may make. With regard to such 
entities that are not so regulated, the Secretary may establish 
investment guidelines that are comparable to State law 
regulating the investments of insurance companies.]
          * * * * * * *
                              ----------                              

              HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983

          * * * * * * *

                 TITLE II--HOUSING ASSISTANCE PROGRAMS

          * * * * * * *

          [PUBLIC HOUSING EARLY CHILDHOOD DEVELOPMENT PROGRAM

  [Sec. 222. (a) Program Authority.--
          [(1) The Secretary of Housing and Urban Development 
        shall, to the extent approved in appropriation Acts, 
        carry out a demonstration program of making grants to 
        nonprofit organizations to assist such organizations in 
        providing early childhood development services in or 
        near lower income housing projects for lower income 
        families who reside in public housing.
          [(2) The Secretary shall design the program described 
        in paragraph (1) to determine the extent to which the 
        availability of early childhood development services in 
        or near lower income housing projects facilitates the 
        employability of the parents or guardians of children 
        residing in public housing.
  [(b) Eligibility for Assistance.--The Secretary may make a 
grant to a nonprofit organization for early childhood 
development services in or near a lower income housing project 
only if--
          [(1) prior to receipt of assistance under this 
        section, an early childhood development program is not 
        in operation for the project;
          [(2) the public housing agency agrees to provide 
        suitable facilities in or near the project for the 
        provision of early childhood development services;
          [(3) the early childhood development program for the 
        project will serve preschool children during the day, 
        school children after school, or both, in order to 
        permit the parents orguardians of such children to 
obtain, retain, or train for employment;
          [(4) the early childhood development program for the 
        project is designed, to the extent practicable, to 
        involve the participation of the parents of children 
        benefiting from such program;
          [(5) the early childhood development program for the 
        project is designed, to the extent practicable, to 
        employ in part-time positions elderly individuals who 
        reside in the lower income housing project involved; 
        and
          [(6) the early childhood development program for the 
        project complies with all applicable State and local 
        laws, regulations, and ordinances.
  [(c) Allocation of Assistance.--In providing grants under 
this section, the Secretary shall--
          [(1) give priority to nonprofit organizations 
        providing early childhood development services in or 
        near lower income housing projects in which reside the 
        largest number of preschool and school children of 
        lower income families;
          [(2) seek to ensure a reasonable distribution of such 
        grants between urban and rural areas and among 
        nonprofit organizations providing early childhood 
        development services in or near lower income housing 
        projects of varying sizes; and
          [(3) seek to provide such grants to the largest 
        number of nonprofit organizations practicable, 
        considering the amount of funds available under this 
        section and the financial requirements of the 
        particular early childhood development programs to be 
        established for the lower income housing projects for 
        which applications are submitted under this section.
  [(d) Administrative Provisions.--
          [(1) Applications for grants under this section shall 
        be made by nonprofit organizations (in consultation 
        with public housing agencies) in such form, and 
        according to such procedures, as the Secretary may 
        prescribe.
          [(2) Any nonprofit organization receiving a grant 
        under this section may use such grant only for 
        operating expenses and minor renovations of facilities 
        necessary to the provision of early childhood 
        development services under this section.
          [(3) The Secretary shall conduct periodic evaluations 
        of each early childhood development program assisted 
        under this section for purposes of--
                  [(A) determining the effectiveness of such 
                program in providing early childhood 
                development services and permitting the parents 
                or guardians of children residing in public 
                housing to obtain, retain, or train for 
                employment; and
                  [(B) ensuring compliance with the provisions 
                of this section.
          [(4) No provision of this section may be construed to 
        authorize the Secretary to establish any health, 
        safety, educational, or other standards with respect to 
        early childhood development services or facilities 
        assisted with grants received under this section. Such 
        services and facilities shall comply with all 
        applicable State and local laws, regulations, and 
        ordinances, and all requirements established by the 
        Secretary of Health and Human Services for early 
        childhood development services and facilities.
  [(e) Report to Congress.--Not later than the expiration of 
the 3-year period following the date of the enactment of the 
Housing and Community Development Act of 1987, the Secretary 
shall prepare and submit to the Congress a detailed report 
setting forth the findings and conclusions of the Secretary as 
a result of carrying out the demonstration program established 
in this section. Such report shall include any recommendations 
of the Secretary with respect to the establishment of a 
permanent program of assisting early childhood development 
services in or near lower income housing projects.
  [(f) Definitions.--For purposes of this section:
          [(1) The term ``lower income families'' has the 
        meaning given such term in section 3(b)(2) of the 
        United States Housing Act of 1937.
          [(2) The terms ``lower income housing project'' and 
        ``public housing'' have the meanings given such terms 
        in section 3(b)(1) of the United States Housing Act of 
        1937.
          [(3) The term ``public housing agency'' has the 
        meaning given such term in section 3(b)(6) of the 
        United States Housing Act of 1937.
          [(4) The term ``Secretary'' means the Secretary of 
        Housing and Urban Development.
  [(g) Authorization of Appropriations.--To the extent provided 
in appropriation Acts, of any amounts appropriated for fiscal 
year 1993 under section 103 of the Housing and Community 
Development Act of 1974, $5,000,000 shall be available to carry 
out this section. To the extent approved in appropriation Acts, 
of any amounts appropriated for fiscal year 1994 under section 
5(c) of the United States Housing Act of 1937 for grants for 
the development of public housing, $5,210,000 shall be 
available to carry out this section. Any such amounts shall 
remain available until expended.]
          * * * * * * *

     [pet ownership in assisted rental housing for the elderly or 
                              handicapped

    [Sec. 227. (a) No owner or manager of any federally 
assisted rental housing for the elderly or handicapped may--
          [(1) as a condition of tenancy or otherwise, prohibit 
        or prevent any tenant in such housing from owning 
        common household pets or having common household pets 
        living in the dwelling accommodations of such tenant in 
        such housing; or
          [(2) restrict or discriminate against any person in 
        connection with admission to, or continued occupancy 
        of, such housing by reason of the ownership of such 
        pets by, or the presence of such pets in the dwelling 
        accommodations of, such person.
    [(b)(1) Not later than the expiration of the twelve-month 
period following the date of the enactment of this Act, the 
Secretary of Housing and Urban Development and the Secretary of 
Agriculture shall each issue such regulations as may be 
necessary to ensure (A) compliance with the provisions of 
subsection (a) with respectto any program of assistance 
referred to in subsection (d) that is administered by such Secretary; 
and (B) attaining the goal of providing decent, safe, and sanitary 
housing for the elderly or handicapped.
    [(2) Such regulations shall establish guidelines under 
which the owner or manager of any federally assisted rental 
housing for the elderly or handicapped (A) may prescribe 
reasonable rules for the keeping of pets by tenants in such 
housing; and (B) shall consult with the tenants of such housing 
in prescribing such rules. Such rules may consider factors such 
as density of tenants, pet size, types or pets, potential 
financial obligations of tenants, and standards of pet care.
    [(c) Nothing in this section may be construed to prohibit 
any owner or manager of federally assisted rental housing for 
the elderly or handicapped, or any local housing authority or 
other appropriate authority of the community where such housing 
is located, from requiring the removal from any such housing of 
any pet whose conduct or condition is duly determined to 
constitute a nuisance or a threat to the health or safety of 
the other occupants of such housing or of other persons in the 
community where such housing is located.
    [(d) For purposes of this section, the term ``federally 
assisted rental housing for the elderly or handicapped'' means 
any rental housing project that--
          [(1) is assisted under section 202 of the Housing Act 
        of 1959; or
          [(2) is assisted under the United States Housing Act 
        of 1937, the National Housing Act, or title V of the 
        Housing Act of 1949, and is designated for occupancy by 
        elderly or handicapped families, as such term is 
        defined in section 202(d)(4) of the Housing Act of 
        1959.]

SEC. 227. PET OWNERSHIP IN FEDERALLY ASSISTED RENTAL HOUSING.

  (a) Right of Ownership.--A resident of a dwelling unit in 
federally assisted rental housing may own common household pets 
or have common household pets present in the dwelling unit of 
such resident, subject to the reasonable requirements of the 
owner of the federally assisted rental housing and providing 
that the resident maintains the animals responsibly and in 
compliance with applicable local and State public health, 
animal control, and anticruelty laws. Such reasonable 
requirements may include requiring payment of a nominal fee and 
pet deposit by residents owning or having pets present, to 
cover the operating costs to the project relating to the 
presence of pets and to establish an escrow account for 
additional such costs not otherwise covered, respectively. 
Notwithstanding section 225(d) of the Housing Opportunity and 
Responsibility Act of 1997, a public housing agency may not 
grant any exemption under such section from payment, in whole 
or in part, of any fee or deposit required pursuant to the 
preceding sentence.
  (b) Prohibition Against Discrimination.--No owner of 
federally assisted rental housing may restrict or discriminate 
against any person in connection with admission to, or 
continued occupancy of, such housing by reason of the ownership 
of common household pets by, or the presence of such pets in 
the dwelling unit of, such person.
  (c) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Federally assisted rental housing.--The term 
        ``federally assisted rental housing'' means any 
        multifamily rental housing project that is--
                  (A) public housing (as such term is defined 
                in section 103 of the Housing Opportunity and 
                Responsibility Act of 1997);
                  (B) assisted with project-based assistance 
                pursuant to section 601(f) of the Housing 
                Opportunity and Responsibility Act of 1997 or 
                under section 8 of the United States Housing 
                Act of 1937 (as in effect before the effective 
                date of the repeal under section 601(b) of the 
                Housing Opportunity and Responsibility Act of 
                1997);
                  (C) assisted under section 202 of the Housing 
                Act of 1959 (as amended by section 801 of the 
                Cranston-Gonzalez National Affordable Housing 
                Act);
                  (D) assisted under section 202 of the Housing 
                Act of 1959 (as in effect before the enactment 
                of the Cranston-Gonzalez National Affordable 
                Housing Act);
                  (E) assisted under title V of the Housing Act 
                of 1949; or
                  (F) insured, assisted, or held by the 
                Secretary or a State or State agency under 
                section 236 of the National Housing Act.
          (2) Owner.--The term ``owner'' means, with respect to 
        federally assisted rental housing, the entity or 
        private person, including a cooperative or public 
        housing agency, that has the legal right to lease or 
        sublease dwelling units in such housing (including a 
        manager of such housing having such right).
  (d) Regulations.--This section shall take effect upon the 
date of the effectiveness of regulations issued by the 
Secretary to carry out this section. Such regulations shall be 
issued not later than the expiration of the 1-year period 
beginning on the date of the enactment of the Housing 
Opportunity and Responsibility Act of 1997 and after notice and 
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).
          * * * * * * *
                              ----------                              

    SECTION 415 OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT--
             INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1988

  [Sec. 415. None of the funds appropriated by this Act or any 
other Act for any fiscal year shall be used for demolishing 
George Loving Place, at 3320 Rupert Street, Edgar Ward Place, 
at 3901Holystone, Elmer Scott Place, at 2600 Morris, in Dallas, 
Texas, or Allen Parkway Village, 1600 Allen Parkway, in Houston, 
Texas.]
                              ----------                              

  SECTION 202 OF THE DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND 
  URBAN DEVELOPMENT, AND INDEPENDENT AGENCIES APPRORIATIONS ACT, 1996

           [conversion of certain public housing to vouchers

  [Sec. 202. (a) Identification of Units.--Each public housing 
agency shall identify any public housing developments--
          [(1) that are on the same or contiguous sites;
          [(2) that total more than 300 dwelling units;
          [(3) that have a vacancy rate of at least 10 percent 
        for dwelling units not in funded, on-schedule 
        modernization programs;
          [(4) identified as distressed housing that the public 
        housing agency cannot assure the long-term viability as 
        public housing through reasonable revitalization, 
        density reduction, or achievement of a broader range of 
        household income; and
          [(5) for which the estimated cost of continued 
        operation and modernization of the developments as 
        public housing exceeds the cost of providing tenant-
        based assistance under section 8 of the United States 
        Housing Act of 1937 for all families in occupancy, 
        based on appropriate indicators of cost (such as the 
        percentage of total development cost required for 
        modernization).
  [(b) Implementation and Enforcement.--
          [(1) Standards for implementation.--The Secretary 
        shall establish standards to permit implementation of 
        this section in fiscal year 1996.
          [(2) Consultation.--Each public housing agency shall 
        consult with the applicable public housing tenants and 
        the unit of general local government in identifying any 
        public housing developments under subsection (a).
          [(3) Failure of phas to comply with subsection (a).--
        Where the Secretary determines that--
                  [(A) a public housing agency has failed under 
                subsection (a) to identify public housing 
                developments for removal from the inventory of 
                the agency in a timely manner;
                  [(B) a public housing agency has failed to 
                identify one or more public housing 
                developments which the Secretary determines 
                should have been identified under subsection 
                (a); or
                  [(C) one or more of the developments 
                identified by the public housing agency 
                pursuant to subsection (a) should not, in the 
                determination of the Secretary, have been 
                identified under that subsection;
        the Secretary may designate the developments to be 
        removed from the inventory of the public housing agency 
        pursuant to this section.
  [(c) Removal of Units From the Inventories of Public Housing 
Agencies.--
          [(1) Each public housing agency shall develop and 
        carry out a plan in conjunction with the Secretary for 
        the removal of public housing units identified under 
        subsection (a) or subsection (b)(3), over a period of 
        up to five years, from the inventory of the public 
        housing agency and the annual contributions contract. 
        The plan shall be approved by the relevant local 
        official as not inconsistent with the Comprehensive 
        Housing Affordability Strategy under title I of the 
        Housing and Community Development Act of 1992, 
        including a description of any disposition and 
        demolition plan for the public housing units.
          [(2) The Secretary may extend the deadline in 
        paragraph (1) for up to an additional five years where 
        the Secretary makes a determination that the deadline 
        is impracticable.
          [(3) The Secretary shall take appropriate actions to 
        ensure removal of developments identified under 
        subsection (a) or subsection (b)(3) from the inventory 
        of a public housing agency, if the public housing 
        agency fails to adequately develop a plan under 
        paragraph (1), or fails to adequately implement such 
        plan in accordance with the terms of the plan.
          [(4) To the extent approved in appropriations Acts, 
        the Secretary may establish requirements and provide 
        funding under the Urban Revitalization Demonstration 
        program for demolition and disposition of public 
        housing under this section.
          [(5) Notwithstanding any other provision of law, if a 
        development is removed from the inventory of a public 
        housing agency and the annual contributions contract 
        pursuant to paragraph (1), the Secretary may authorize 
        or direct the transfer of--
                  [(A) in the case of an agency receiving 
                assistance under the comprehensive improvement 
                assistance program, any amounts obligated by 
                the Secretary for the modernization of such 
                development pursuant to section 14 of the 
                United States Housing Act of 1937;
                  [(B) in the case of an agency receiving 
                public and Indian housing modernization 
                assistance by formula pursuant to section 14 of 
                the United States Housing Act of 1937, any 
                amounts provided to the agency which are 
                attributable pursuant to the formula for 
                allocating such assistance to the development 
                removed from the inventory of that agency; and
                  [(C) in the case of an agency receiving 
                assistance for the major reconstruction of 
                obsolete projects, any amounts obligated by the 
                Secretary for the major reconstruction of the 
                development pursuant to section 5 of such Act,
        to the tenant-based assistance program or appropriate 
        site revitalization of such agency.
          [(6) Cessation of unnecessary spending.--
        Notwithstanding any other provision of law, if, in the 
        determination of the Secretary, a development meets or 
        is likely to meet the criteria set forth in subsection 
        (a), the Secretary may direct the public housing agency 
        to cease additional spending in connection with the 
        development, except to the extent that 
additionalspending is necessary to ensure decent, safe, and sanitary 
housing until the Secretary determines or approves an appropriate 
course of action with respect to such development under this section.
  [(d) Conversion to Tenant-Based Assistance.--
          [(1) The Secretary shall make authority available to 
        a public housing agency to provide tenant-based 
        assistance pursuant to section 8 to families residing 
        in any development that is removed from the inventory 
        of the public housing agency and the annual 
        contributions contract pursuant to subsection (b).
          [(2) Each conversion plan under subsection (c) 
        shall--
                  [(A) require the agency to notify families 
                residing in the development, consistent with 
                any guidelines issued by the Secretary 
                governing such notifications, that the 
                development shall be removed from the inventory 
                of the public housing agency and the families 
                shall receive tenant-based or project-based 
                assistance, and to provide any necessary 
                counseling for families; and
                  [(B) ensure that all tenants affected by a 
                determination under this section that a 
                development shall be removed from the inventory 
                of a public housing agency shall be offered 
                tenant-based or project-based assistance and 
                shall be relocated, as necessary, to other 
                decent, safe, sanitary, and affordable housing 
                which is, to the maximum extent practicable, 
                housing of their choice.
  [(e) In General.--
          [(1) The Secretary may require a public housing 
        agency to provide such information as the Secretary 
        considers necessary for the administration of this 
        section.
          [(2) As used in this section, the term 
        ``development'' shall refer to a project or projects, 
        or to portions of a project or projects, as 
        appropriate.
          [(3) Section 18 of the United States Housing Act of 
        1937 shall not apply to the demolition of developments 
        removed from the inventory of the public housing agency 
        under this section.]
                              ----------                              

                 SECTION 202 OF THE HOUSING ACT OF 1959

SEC. 202. SUPPORTIVE HOUSING FOR THE ELDERLY.

    (a) * * *
          * * * * * * *
    (l) Allocation of Funds.--
          (1) * * *
          * * * * * * *
          (4) Consideration in allocating assistance.--
        Assistance under this section shall be allocated in a 
        manner that ensures that the awards of the assistance 
        are made for projects of sufficient size to accommodate 
        facilities for supportive services appropriate to the 
        needs of frail elderly residents.
          * * * * * * *
                              ----------                              

                      ANTI-DRUG ABUSE ACT OF 1988

          * * * * * * *

                      TITLE V--USER ACCOUNTABILITY

SEC. 5001. TABLE OF CONTENTS.

  The table of contents for this title is as follows:

                      TITLE V--USER ACCOUNTABILITY

Sec. 5001. Table of contents.

       Subtitle A--Opposition to Legalization and Public Awareness

     * * * * * * *

           Subtitle C--Preventing Drug Abuse in Public Housing

            Chapter 1--Regulatory and Enforcement Provisions

     * * * * * * *

        [Chapter 2--Public and Assisted Housing Drug Elimination]

             Chapter 2--Community Partnerships Against Crime

Sec. 5121. Short title.
[Sec. 5122. Congressional findings.]
Sec. 5122. Purposes.
     * * * * * * *
[Sec. 5125. Applications.]
Sec. 5125. Grant procedures.
     * * * * * * *
[Sec. 5130. Authorization of appropriations.]
Sec. 5130. Funding.
     * * * * * * *

          Subtitle C--Preventing Drug Abuse in Public Housing

          * * * * * * *

        [CHAPTER 2--PUBLIC AND ASSISTED HOUSING DRUG ELIMINATION

[SEC. 5121. SHORT TITLE.

  [This chapter may be cited as the ``Public and Assisted 
Housing Drug Elimination Act of 1990''.

[SEC. 5122. CONGRESSIONAL FINDINGS.

  [The Congress finds that--
          [(1) the Federal Government has a duty to provide 
        public and other federally assisted low-income housing 
        that is decent, safe, and free from illegal drugs;
          [(2) public and other federally assisted low-income 
        housing in many areas suffers from rampant drug-related 
        crime;
          [(3) drug dealers are increasingly imposing a reign 
        of terror on public and other federally assisted low-
        income housing tenants;
          [(4) the increase in drug-related crime not only 
        leads to murders, muggings, and other forms of violence 
        against tenants, but also to a deterioration of the 
        physical environment that requires substantial 
        government expenditures; and
          [(5) local law enforcement authorities often lack the 
        resources to deal with the drug problem in public and 
        other federally assisted low-income housing, 
        particularly in light of the recent reductions in 
        Federal aid to cities.

[SEC. 5123. AUTHORITY TO MAKE GRANTS.

  [The Secretary of Housing and Urban Development, in 
accordance with the provisions of this chapter, may make grants 
to public housing agencies (including Indian Housing 
Authorities), public housing resident management corporations 
that are principally managing, as determined by the Secretary, 
public housing projects owned by public housing agencies, and 
private, for-profit and nonprofit owners of federally assisted 
low-income housing for use in eliminating drug-related crime.]

            CHAPTER 2--COMMUNITY PARTNERSHIPS AGAINST CRIME

SEC. 5121. SHORT TITLE.

  This chapter may be cited as the ``Community Partnerships 
Against Crime Act of 1997''.

SEC. 5122. PURPOSES.

  The purposes of this chapter are to--
          (1) improve the quality of life for the vast majority 
        of law-abiding public housing residents by reducing the 
        levels of fear, violence, and crime in their 
        communities;
          (2) broaden the scope of the Public and Assisted 
        Housing Drug Elimination Act of 1990 to apply to all 
        types of crime, and not simply crime that is drug-
        related; and
          (3) reduce crime and disorder in and around public 
        housing through the expansion of community-oriented 
        policing activities and problem solving.

SEC. 5123. AUTHORITY TO MAKE GRANTS.

  The Secretary of Housing and Urban Development may make 
grants in accordance with the provisions of this chapter for 
use in eliminating crime in and around public housing and other 
federally assisted low-income housing projects to (1) public 
housing agencies, and (2) private, for-profit and nonprofit 
owners of federally assisted low-income housing.

SEC. 5124. ELIGIBLE ACTIVITIES.

  (a) Public and Assisted Housing.--Grants under this chapter 
may be used in and around public housing or other federally 
assisted low-income housing projects for--
          (1) the employment of security personnel;
          (2) reimbursement of local law enforcement agencies 
        for additional security and protective services;
          (3) physical improvements which are specifically 
        designed to enhance security, including fencing, 
        lighting, locking, and surveillance systems;
          (4) the employment of one or more individuals--
                  [(A) to investigate drug-related crime on or 
                about the real property comprising any public 
                or other federally assisted low-income housing 
                project; and]
                  (A) to investigate crime; and
                  (B) to provide evidence relating to such 
                crime in any administrative or judicial 
                proceeding;
          (5) the provision of training, communications 
        equipment, and other related equipment for use by 
        voluntary tenant patrols acting in cooperation with 
        local law enforcement officials;
          (6) programs designed to reduce use of drugs [in and 
        around public or other federally assisted low-income 
        housing projects], including drug-abuse prevention, 
        intervention, referral, and treatment programs; [and]
          [(7) where a public housing agency receives a grant, 
        providing funding to nonprofit public housing resident 
        management corporations and resident councils to 
        develop security and drug abuse prevention programs 
        involving site residents.]
          (7) providing funding to nonprofit public housing 
        resident management corporations and resident councils 
        to develop security and crime prevention programs 
        involving site residents;
          (8) the employment or utilization of one or more 
        individuals, including law enforcement officers, made 
        available by contract or other cooperative arrangement 
        with State or local law enforcement agencies, to engage 
        in community- and problem-oriented policing involving 
        interaction with members of the community in proactive 
        crime control and prevention activities;
          (9) programs and activities for or involving youth, 
        including training, education, recreation and sports, 
        career planning, and entrepreneurship and employment 
        activities and after school and cultural programs; and
          (10) service programs for residents that address the 
        contributing factors of crime, including programs for 
        job training, education, drug and alcohol treatment, 
        and other appropriate social services.
  (b) Other PHA-Owned Housing.--Notwithstanding any other 
provision of this chapter, grants under this chapter may be 
used to eliminate [drug-related crime in housing owned by 
public housing agencies] crime in and around housing owned by 
local housing and management authorities that is not public 
housing assisted under the United States Housing Act of 1937 
and is not otherwise federally assisted, for the activities 
described in paragraphs (1) through [(7)] 10 of subsection (a), 
but only if--
          (1) the housing is located in a high intensity drug 
        trafficking area designated pursuant to section 1005 of 
        this Act; and
          (2) the local housing and management authority owning 
        the housing demonstrates, to the satisfaction of the 
        Secretary, that [drug-related] criminal activity at the 
        housing has adetrimental effect on or about the real 
property comprising any public or other federally assisted low-income 
housing.

[SEC. 5125. APPLICATIONS.

  [(a) In General.--To receive a grant under this chapter, a 
public housing agency, a public housing resident management 
corporation, or an owner of federally assisted low-income 
housing shall submit an application to the Secretary, at such 
time, in such manner, and accompanied by such additional 
information as the Secretary may reasonably require. Such 
application shall include a plan for addressing the problem of 
drug-related crime on the premises of the housing administered 
or owned by the applicant for which the application is being 
submitted.
  [(b) Criteria.--Except as provided by subsections (c) and (d) 
the Secretary shall approve applications under this chapter 
based exclusively on--
          [(1) the extent of the drug-related crime problem in 
        the public or federally assisted low-income housing 
        project or projects proposed for assistance;
          [(2) the quality of the plan to address the crime 
        problem in the public or federally assisted low-income 
        housing project or projects proposed for assistance, 
        including the extent to which the plan includes 
        initiatives that can be sustained over a period of 
        several years;
          [(3) the capability of the applicant to carry out the 
        plan; and
          [(4) the extent to which tenants, the local 
        government and the local community support and 
        participate in the design and implementation of the 
        activities proposed to be funded under the application.
  [(c) Federally Assisted Low-Income Housing.--In addition to 
the selection criteria specified in subsection (b), the 
Secretary may establish other criteria for the evaluation of 
applications submitted by owners of federally assisted low-
income housing, except that such additional criteria shall be 
designed only to reflect--
          [(1) relevant differences between the financial 
        resources and other characteristics of public housing 
        authorities and owners of federally assisted low-income 
        housing, or
          [(2) relevant differences between the problem of 
        drug-related crime in public housing and the problem of 
        drug-related crime in federally assisted low-income 
        housing.
  [(d) High Intensity Drug Trafficking Areas.--In evaluating 
the extent of the drug-related crime problem pursuant to 
subsection (b), the Secretary may consider whether housing 
projects proposed for assistance are located in a high 
intensity drug trafficking area designated pursuant to section 
1005 of the Anti-Drug Abuse Act of 1988.]

SEC. 5125. GRANT PROCEDURES.

  (a) PHA's With 250 or More Units.--
          (1) Grants.--In each fiscal year, the Secretary shall 
        make a grant under this chapter from any amounts 
        available under section 5***(b)(1) for the fiscal year 
        to each of the following public housing agencies:
                  (A) New applicants.--Each public housing 
                agency that owns or operates 250 or more public 
                housing dwelling units and has--
                          (i) submitted an application to the 
                        Secretary for a grant for such fiscal 
                        year, which includes a 5-year crime 
                        deterrence and reduction plan under 
                        paragraph (2); and
                          (ii) had such application and plan 
                        approved by the Secretary.
                  (B) Renewals.--Each public housing agency 
                that owns or operates 250 or more public 
                housing dwelling units and for which--
                          (i) a grant was made under this 
                        chapter for the preceding Federal 
                        fiscal year;
                          (ii) the term of the 5-year crime 
                        deterrence and reduction plan 
                        applicable to such grant includes the 
                        fiscal year for which the grant under 
                        this subsection is to be made; and
                          (iii) the Secretary has determined, 
                        pursuant to a performance review under 
                        paragraph (4), that during the 
                        preceding fiscal year the agency has 
                        substantially fulfilled the 
                        requirements under subparagraphs (A) 
                        and (B) of paragraph (4).
        Notwithstanding subparagraphs (A) and (B), the 
        Secretary may make a grant under this chapter to a 
        public housing agency that owns or operates 250 or more 
        public housing dwelling units only if the agency 
        includes in the application for the grant information 
        that demonstrates, to the satisfaction of the 
        Secretary, that the agency has a need for the grant 
        amounts based on generally recognized crime statistics 
        showing that (I) the crime rate for the public housing 
        developments of the agency (or the immediate 
        neighborhoods in which such developments are located) 
        is higher than the crime rate for the jurisdiction in 
        which the agency operates, (II) the crime rate for the 
        developments (or such neighborhoods) is increasing over 
        a period of sufficient duration to indicate a general 
        trend, or (III) the operation of the program under this 
        chapter substantially contributes to the reduction of 
        crime.
          (2) 5-year crime deterrence and reduction plan.--Each 
        application for a grant under this subsection shall 
        contain a 5-year crime deterrence and reduction plan. 
        The plan shall be developed with the participation of 
        residents and appropriate law enforcement officials. 
        The plan shall describe, for the public housing agency 
        submitting the plan--
                  (A) the nature of the crime problem in public 
                housing owned or operated by the public housing 
                agency;
                  (B) the building or buildings of the public 
                housing agency affected by the crime problem;
                  (C) the impact of the crime problem on 
                residents of such building or buildings; and
                  (D) the actions to be taken during the term 
                of the plan to reduce and deter such crime, 
                which shall include actions involving 
                residents, law enforcement, and service 
                providers.
        The term of a plan shall be the period consisting of 5 
        consecutive fiscal years, which begins with the first 
        fiscal year for which funding under this chapter is 
        provided to carry out the plan.
          (3) Amount.--In any fiscal year, the amount of the 
        grant for a public housing agency receiving a grant 
        pursuant to paragraph (1) shall be the amount that 
        bears the same ratio to the total amount made available 
        under section 5***(b)(1) as the total number of public 
        dwelling units owned or operated by such agency bears 
        to the total number of dwelling units owned or operated 
        by all public housing agencies that own or operate 250 
        or more public housing dwelling units that are approved 
        for such fiscal year.
          (4) Performance review.--For each fiscal year, the 
        Secretary shall conduct a performance review of the 
        activities carried out by each public housing agency 
        receiving a grant pursuant to this subsection to 
        determine whether the agency--
                  (A) has carried out such activities in a 
                timely manner and in accordance with its 5-year 
                crime deterrence and reduction plan; and
                  (B) has a continuing capacity to carry out 
                such plan in a timely manner.
          (5) Submission of applications.--The Secretary shall 
        establish such deadlines and requirements for 
        submission of applications under this subsection.
          (6) Review and determination.--The Secretary shall 
        review each application submitted under this subsection 
        upon submission and shall approve the application 
        unless the application and the 5-year crime deterrence 
        and reduction plan are inconsistent with the purposes 
        of this chapter or any requirements established by the 
        Secretary or the information in the application or plan 
        is not substantially complete. Upon approving or 
        determining not to approve an application and plan 
        submitted under this subsection, the Secretary shall 
        notify the public housing agency submitting the 
        application and plan of such approval or disapproval.
          (7) Disapproval of applications.--If the Secretary 
        notifies an agency that the application and plan of the 
        agency is not approved, not later than the expiration 
        of the 15-day period beginning upon such notice of 
        disapproval, the Secretary shall also notify the 
        agency, in writing, of the reasons for the disapproval, 
        the actions that the agency could take to comply with 
        the criteria for approval, and the deadlines for such 
        actions.
          (8) Failure to approve or disapprove.--If the 
        Secretary fails to notify an agency of approval or 
        disapproval of an application and plan submitted under 
        this subsection before the expiration of the 60-day 
        period beginning upon the submission of the plan or 
        fails to provide notice under paragraph (7) within the 
        15-day period under such paragraph to an agency whose 
        application has been disapproved, the application and 
        plan shall be considered to have been approved for 
        purposes of this section.
  (b) PHA's With Fewer Than 250 Units and Owners of Federally 
Assisted Low-Income Housing.--
          (1) Applications and plans.--To be eligible to 
        receive a grant under this chapter, a public housing 
        agency that owns or operates fewer than 250 public 
        housing dwelling units or an owner of federally 
        assisted low-income housing shall submit an application 
        to the Secretary at such time, in such manner, and 
        accompanied by such additional information as the 
        Secretary may require. The application shall include a 
        plan for addressing the problem of crime in and around 
        the housing for which the application is submitted, 
        describing in detail activities to be conducted during 
        the fiscal year for which the grant is requested.
          (2) Grants for pha's with fewer than 250 units.--In 
        each fiscal year the Secretary may, to the extent 
        amounts are available under section 5***(b)(2), make 
        grants under this chapter to public housing agencies 
        that own or operate fewer than 250 public housing 
        dwelling units and have submitted applications under 
        paragraph (1) that the Secretary has approved pursuant 
        to the criteria under paragraph (4).
          (3) Grants for federally assisted low-income 
        housing.--In each fiscal year the Secretary may, to the 
        extent amounts are available under section 5***(b)(3), 
        make grants under this chapter to owners of federally 
        assisted low-income housing that have submitted 
        applications under paragraph (1) that the Secretary has 
        approved pursuant to the criteria under paragraphs (4) 
        and (5).
          (4) Criteria for approval of applications.--The 
        Secretary shall determine whether to approve each 
        application under this subsection on the basis of--
                  (A) the extent of the crime problem in and 
                around the housing for which the application is 
                made;
                  (B) the quality of the plan to address the 
                crime problem in the housing for which the 
                application is made;
                  (C) the capability of the applicant to carry 
                out the plan; and
                  (D) the extent to which the tenants of the 
                housing, the local government, local community-
                based nonprofit organizations, local tenant 
                organizations representing residents of 
                neighboring projects that are owned or assisted 
                by the Secretary, and the local community 
                support and participate in the design and 
                implementation of the activities proposed to be 
                funded under the application.
        In each fiscal year, the Secretary may give preference 
        to applications under this subsection for housing made 
        by applicants who received a grant for such housing for 
        the preceding fiscal year under this subsection or 
        under the provisions of this chapter as in effect 
        immediately before the date of the enactment of the 
        Housing Opportunity and Responsibility Act of 1997.
          (5) Additional criteria for federally assisted low-
        income housing.--In addition to the selection criteria 
        under paragraph (4), the Secretary may establish other 
        criteria for evaluating applications submitted by 
        owners of federally assisted low-income housing, except 
        that such additional criteria shall be designed only to 
        reflect--
                  (A) relevant differences between the 
                financial resources and other characteristics 
                of public housing agencies and owners of 
                federally assisted low-income housing; or
                  (B) relevant differences between the problem 
                of crime in public housing administered by such 
                authorities and the problem of crime in 
                federally assisted low-income housing.

SEC. 5126. DEFINITIONS.

  For the purposes of this chapter:
          [(1) Controlled substance.--The term ``controlled 
        substance'' has the meaning given such term in section 
        102 of the Controlled Substance Act (21 U.S.C. 802).
          [(2) Drug-related crime.--The term ``drug-related 
        crime'' means the illegal manufacture, sale, 
        distribution, use, or possession with intent to 
        manufacture, sell, distribute, or use a controlled 
        substance.]
          [(3)] (1) Secretary.--The term ``Secretary'' means 
        the Secretary of Housing and Urban Development.
          [(4)] (2) Federally assisted low-income housing.--The 
        term ``federally assisted low-income housing'' means 
        housing assisted under--
                  (A) section 221(d)(3), [section] 221(d)(4), 
                or 236 of the National Housing Act;
                  (B) section 101 of the Housing and Urban 
                Development Act of 1965; or
                  (C) section 8 of the United States Housing 
                Act of 1937.
          (3) Public housing agency.--The term ``public housing 
        agency'' has the meaning given the term in section 103 
        of the Housing Opportunity and Responsibility Act of 
        1997.

SEC. 5127. IMPLEMENTATION.

  The Secretary shall issue regulations to implement this 
chapter within 180 days after the date of enactment of the 
[Cranston-Gonzalez National Affordable Housing Act] Housing 
Opportunity and Responsibility Act of 1997.

SEC. 5128. REPORTS.

  The Secretary shall require grantees to provide periodic 
reports that include the obligation and expenditure of grant 
funds, the progress made by the grantee in implementing the 
plan [described in section 5125(a)] for the grantee submitted 
under subsection (a) or (b) of section 5125, as applicable, and 
any change in the incidence of [drug-related crime in] crime in 
and around projects assisted under this chapter.
          * * * * * * *

[SEC. 5130. AUTHORIZATION OF APPROPRIATIONS.

  [(a) In General.--There are authorized to be appropriated to 
carry out this chapter $175,000,000 for fiscal year 1993 and 
$182,350,000 for fiscal year 1994. Any amount appropriated 
under this section shall remain available until expended.
  [(b) Set-Asides.--Of any amount made available in any fiscal 
year to carry out this chapter, not more than 6.25 percent of 
such amount shall be available for grants for federally 
assisted, low-income housing. Notwithstanding any other 
provision of law, of any amounts appropriated for drug 
elimination grants under this chapter for fiscal years 1993 and 
1994, not more than 6.25 percent shall be available for grants 
for federally assisted low-income housing and 5.0 percent shall 
be available for public housing youth sports program grants 
under section 520 of the Cranston-Gonzalez National Affordable 
Housing Act.
  [(c) Set-Aside for Youth Sports Programs.--Of any amount made 
available in any fiscal year to carry out this chapter, 5 
percent of such amount shall be available for public housing 
youth sports program grants under section 520 of the Cranston-
Gonzalez National Affordable Housing Act for such fiscal year.]

SEC. 5130. FUNDING.

  (a) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this chapter $290,000,000 for each 
of fiscal years 1998, 1999, 2000, 2001, and 2002.
  (b) Allocation.--Of any amounts available, or that the 
Secretary is authorized to use, to carry out this chapter in 
any fiscal year--
          (1) 85 percent shall be available only for assistance 
        pursuant to section 5125(a) to public housing agencies 
        that own or operate 250 or more public housing dwelling 
        units;
          (2) 10 percent shall be available only for assistance 
        pursuant to section 5125(b)(2) to public housing 
        agencies that own or operate fewer than 250 public 
        housing dwelling units; and
          (3) 5 percent shall be available only for assistance 
        to federally assisted low-income housing pursuant to 
        section 5125(b)(3).
  (c) Retention of Proceeds of Asset Forfeitures by Inspector 
General.--Notwithstanding section 3302 of title 31, United 
States Code, or any other provision of law affecting the 
crediting of collections, the proceeds of forfeiture 
proceedings and funds transferred to the Office of Inspector 
General of the Department of Housing and Urban Development, as 
a participating agency, from the Department of Justice Assets 
Forfeiture Fund or the Department of the Treasury Forfeiture 
Fund, as an equitable share from the forfeiture of property in 
investigations in which the Office of Inspector General 
participates, shall be deposited to the credit of the Office of 
Inspector General for Operation Safe Home activities authorized 
under the Inspector General Act of 1978, as amended, to remain 
available until expended.
          * * * * * * *
                              ----------                              

                 SECTION 520 OF THE HOUSING ACT OF 1949

                        definition of rural area

    Sec. 520. As used in this title, the terms ``rural'' and 
``rural area'' mean any open country, or any place, town, 
village, or city which is not (except in the cases of Pajaro, 
in the State of California, and Guadalupe, in the State of 
Arizona) part of or associated with an urban area and which (1) 
has a population not in excess of 2,500 inhabitants, or (2) has 
a population in excess of 2,500 but not in excess of 10,000 if 
it is rural in character, or (3) has a population in excess of 
10,000 but not in excess of 20,000, and (A) is notcontained 
within a standard metropolitan statistical area, and (B) has a serious 
lack of mortgage credit for lower and moderate-income families, as 
determined by the Secretary and the Secretary of Housing and Urban 
Development. For purposes of this title, any area classifed as 
``rural'' or a ``rural area'' prior to October 1, 1990, and determined 
not to be ``rural'' or a ``rural area'' as a result of data received 
from or after the 1990 decennial census shall continue to be so 
classified until the receipt of data from the decennial census in the 
year 2000, if such area has a population in excess of 10,000 but not in 
excess of 25,000, is rural in character, and has a serious lack of 
mortgage credit for lower and moderate-income families. Notwithstanding 
any other provision of this section, the city of Plainview, Texas, 
shall be considered a rural area for purposes of this title, and the 
city of Altus, Oklahoma, shall be considered a rural area for purposes 
of this title until the receipt of data from the decennial census in 
the year 2000.
                              ----------                              

    SECTION 214 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1980

                 restriction on use of assisted housing

    Sec. 214. (a) * * *
    (b)(1) * * *
  (2) If the eligibility for financial assistance of at least 
one member of a family has been affirmatively established under 
the program of financial assistance and under this section, and 
the ineligibility of one or more family members has not been 
affirmatively established under this section, any financial 
assistance made available to that family by the [Secretary of 
Housing and Urban Development] applicable Secretary shall be 
prorated, based on the number of individuals in the family for 
whom eligibility has been affirmatively established under the 
program of financial assistance and under this section, as 
compared with the total number of individuals who are members 
of the family.
  (c)(1) If, following completion of the applicable hearing 
process, financial assistance for any individual receiving such 
assistance on the date of the enactment of the Housing and 
Community Development Act of 1987 is to be terminated, the 
public housing agency or other local governmental entity 
involved (in the case of public housing or assistance under 
section 8 of the United States Housing Act of 1937) or the 
applicable Secretary (in the case of any other financial 
assistance) shall take one of the following actions:
          (A) * * *
          (B)(i) Defer the termination of financial assistance, 
        if necessary to permit the orderly transition of the 
        individual and any family members involved to other 
        affordable housing.
          (ii) Except as provided in clause (iii), any deferral 
        under this subparagraph shall be for a 6-month period 
        and may be renewed by the public housing agency or 
        other entity involved for an aggregate period of 18 
        months. At the beginning of each deferral period, the 
        public housing agency or other entity involved shall 
        inform the individual and family members of their 
        ineligibility for financial assistance and offer them 
        other assistance in finding other affordable housing.
          (iii) The time period described in clause (ii) shall 
        not apply in the case of a refugee under section 207 of 
        the Immigration and Nationality Act or an individual 
        seeking asylum under section 208 of that Act.
          * * * * * * *
    (d) The following conditions apply with respect to 
financial assistance being or to be provided for the benefit of 
an individual:
          (1)(A) There must be a declaration in writing by the 
        individual (or, in the case of an individual who is a 
        child, by another on the individual's behalf), under 
        penalty of perjury, stating whether or not the 
        individual is a citizen or national of the United 
        States, and, if that individual is not a citizen or 
        national of the United States, that the individual is 
        in a satisfactory immigration status. If the 
        declaration states that the individual is not a citizen 
        or national of the United States and that the 
        individual is younger than 62 years of age, the 
        declaration shall be verified by the Immigration and 
        Naturalization Service. If the declaration states that 
        the individual is a citizen or national of the United 
        States, the [Secretary of Housing and Urban 
        Development] applicable Secretary, or the agency 
        administering assistance covered by this section, may 
        request verification of the declaration by requiring 
        presentation of documentation that the applicable 
        Secretary considers appropriate, including a United 
        States passport, resident alien card, alien 
        registration card, social security card, or other 
        documentation.
          (2) If such an individual is not a citizen or 
        national of the United States, is not 62 years of age 
        or older, and is receiving financial assistance on the 
        date of enactment of the Use of Assisted Housing by 
        Aliens Act of 1996 or applying for financial assistance 
        on or after that date, there must be presented either--
                  (A) alien registration documentation or other 
                proof of immigration registration from the 
                Immigration and Naturalization Service that 
                contains the individual's alien admission 
                number or alien file number (or numbers if the 
                individual has more than one number), or
                  (B) such other documents as the applicable 
                Secretary determines constitutes reasonable 
                evidence indicating a satisfactory immigration 
                status.
        In the case of an individual applying for financial 
        assistance on or after the date of enactment of the Use 
        of Assisted Housing by Aliens Act of 1996, the 
        applicable Secretary may not provide any such 
        assistance for the benefit of that individual before 
        documentation is presented and verified under paragraph 
        (3) or (4).
          * * * * * * *
          (4) In the case of such an individual who is not a 
        citizen or national of the United States, is not 62 
        years of age or older, and is receiving financial 
        assistance on the date of enactment of the Use of 
        Assisted Housing by Aliens Act of 1996 or applyingfor 
financial assistance on or after that date, if, at the time of 
application or recertification for financial assistance, the statement 
described in paragraph (1) is submitted but the documentation required 
under paragraph (2) is not presented or if the documentation required 
under paragraph (2)(A) is presented but such documentation is not 
verified under paragraph (3)--
                  (A) * * *
          * * * * * * *
                  (B) if any documents or additional 
                information are submitted as evidence under 
                subparagraph (A), or if appeal is made to the 
                Immigration and Naturalization Service with 
                respect to the verification determination of 
                the Service under paragraph (3)--
                          (i) the applicable Secretary shall 
                        transmit to the Immigration and 
                        Naturalization Service photostatic or 
                        other similar copies of such documents 
                        or additional information for official 
                        verification,
                          (ii) pending such verification or 
                        appeal, the applicable Secretary may 
                        not--
                                  (I) * * *
          * * * * * * *
          (5) If the applicable Secretary determines, after 
        complying with the requirements of paragraph (4), that 
        such an individual is not in a satisfactory immigration 
        status, the applicable Secretary shall--
                  (A) * * *
          * * * * * * *
          (6) The applicable Secretary shall terminate the 
        eligibility for financial assistance of an individual 
        and the members of the household of the individual, for 
        a period of not less than 24 months, upon determining 
        that such individual has knowingly permitted another 
        individual who is not eligible for such assistance to 
        reside in the public or assisted housing unit of the 
        individual. This provision shall not apply to a family 
        if the ineligibility of the ineligible individual at 
        issue was considered in calculating any proration of 
        assistance provided for the family.
For purposes of this subsection, the term ``applicable 
Secretary'' means the applicable Secretary, a public housing 
agency, or another entity that determines the eligibility of an 
individual for financial assistance.
          * * * * * * *
  [(h)] (i) Verification of Eligibility.--
          (1) In general.--[Except in the case of an election 
        under paragraph (2)(A), no] No individual or family 
        applying for financial assistance may receive such 
        financial assistance prior to the affirmative 
        establishment and verification of eligibility of at 
        least the individual or one family member under [this 
        section] subsection (d) by the applicable Secretary or 
        other appropriate entity.
          (2) Rules applicable to public housing agencies.--A 
        public housing agency (as that term is defined in 
        section 3 of the United States Housing Act of 1937)--
                  [(A) may elect not to comply with this 
                section; and]
                  (A) may, notwithstanding paragraph (1) of 
                this subsection, elect not to affirmatively 
                establish and verify eligibility before 
                providing financial assistance; and
                  (B) [in complying with this section] in 
                carrying out subsection (d)--
                          (i) may initiate procedures to 
                        affirmatively establish or verify the 
                        eligibility of an individual or family 
                        under this section at any time at which 
                        the public housing agency determines 
                        that such eligibility is in question, 
                        regardless of whether or not that 
                        individual or family is at or near the 
                        top of the waiting list of the public 
                        housing agency;
                          (ii) may affirmatively establish or 
                        verify the eligibility of an individual 
                        or family under this section in 
                        accordance with the procedures set 
                        forth in section 274A(b)(1) of the 
                        Immigration and Nationality Act; and
                          (iii) shall have access to any 
                        relevant information contained in the 
                        SAVE system (or any successor thereto) 
                        that relates to any individual or 
                        family applying for financial 
                        assistance.
          (3) Eligibility of families.--For purposes of this 
        subsection, with respect to a family, the term 
        ``eligibility'' means the eligibility of each family 
        member.
                ADDITIONAL VIEWS OF HON. BERNIE SANDERS

    One of the arguments being used to cut back on affordable 
housing in this country is that we have a large federal 
deficit, a five trillion dollars national debt, and that to 
move toward a balanced budget we have to make cuts in 
programs--no matter how useful or important those programs may 
be. This of course has included massive cuts in affordable 
housing programs.
    While the Banking Committee was considering H.R. 2, I 
introduced an amendment which addressed this issue 
forthrightly. This amendment asked the Members of the Banking 
Committee to agree that we need to cut back on an outrageous 
housing program which benefits almost exclusively upper income 
people--and that is continuing the policy by which the United 
States government allows for an income tax deduction for 
interest paid on mortgages up to one million dollars. Clearly, 
as a number of organizations from very different political 
perspective agree, one million dollars is an excessive amount 
and constitutes a very large and generous housing welfare 
program for some of the richest people in America.
    First, let me clearly state that I support the home 
interest mortgage deduction program. I believe it is a useful 
and important program for the middle class and working families 
of this country and I will fight hard to see that it is 
maintained for the overwhelming majority of the people that 
utilize the program. On the other hand, when we are cutting 
back on programs for people desperately in need of affordable 
housing, and when we have a five trillion dollar national debt, 
I do not believe that we can afford to maintain a subsidy which 
benefits the wealthiest five percent of Americans.
    My amendment stated a ``Sense of the Banking Committee'' 
that this deduction should be lowered from $1,000,000 to 
$300,000 and that the savings, estimated by the C.B.O. at 12.7 
billion over a five year period should be divided and allocated 
for the following purposes--(A) One half shall go toward 
increased spending in affordable housing, including public 
housing, senior citizen housing, Section 8 housing and programs 
which encourage home ownership; and (B) One half shall go 
toward reduction of the federal deficit. In other words, if 
this amendment became law, this Committee would have an 
additional six billion to invest in affordable housing and six 
billion dollars for deficit reduction.
    This concept is supported by progressives, moderates, and 
conservatives--by the Progressive Caucus, the Progressive 
Policy Institute and the Concord Coalition. Additionally, 
Senator Bob Packwood spoke out in favor of reducing the 
mortgage limit to between $250,000 and $300,000 when he was 
Chairman of the Senate Finance Committee. The Concord Coalition 
in its ``Zero Deficit Plan'' takes a slightly different 
approach which in fact saves even more money than the proposal 
I offer. They would limit the mortgage interest tax deduction 
to $12,000 per year and $20,000 per year for couples. And, in 
the process, save $19 billion in revenue by the year 2002. The 
Concord Coalition says, ``The current high limit on mortgage 
interest deductibility subsidizes expensive homes and provides 
a loophole through which tax payers with substantial home 
equity can get around limits on deductibility on consumer 
investment interest.''
    Let me explain why I think it is outrageous and unwise to 
maintain this tax deduction at the $1,000,000 level. First of 
all, although 63 million American families own their homes, 
only 27 million, fewer than half, claimed any mortgage interest 
deduction in 1994. This is probably because it isn't worth it 
for most nonwealthy taxpayers to itemize their deductions. 
Secondly, according to the Progressive Policy Institute, only 5 
percent of home mortgages are over $300,000. Therefore, this 
change in tax policy would affect only a small minority of 
homeowners--some of the wealthiest people in the nation who own 
multi million dollar mansions. And frankly, the United States 
Congress should not be providing a housing subsidy to these 
people.
    I believe that lowering the mortgage interest deduction is 
of critical importance for two basic reasons. One, it allows 
those of us who believe that the federal government should 
spend more on affordable housing to raise over $6 billion more 
for that purpose. Secondly, it allows those members who want to 
move toward a balanced budget rapidly to lower the deficit by 6 
billion dollars. Clearly these are laudable goals which should 
be embraced by all Members of Congress.

                                   Bernie Sanders.
                  ADDITIONAL VIEWS OF HON. TOM BARRETT

    Our nation's public housing system is in need of reform, 
and our federal government is in the best position to establish 
a national housing policy that places housing as a top priority 
for all levels of government. Moreover, it is the 
responsibility of our government to promote the general welfare 
of our nation by using federal resources to aid families and 
individuals who are seeking safe, clean and affordable housing.
    Congress should pass a comprehensive housing reform bill 
that is responsive to Americans who are in need of housing 
assistance. These reforms should encourage the States and 
localities to find solutions to housing and community 
development problems. Moreover, these reforms should grant 
local housing authorities broader decisionmaking powers given 
the pressures they are facing as a result of declining funding 
for federal housing programs.
    I have concerns, however, with H.R. 2, and in particular 
the bill's provisions dealing with the Brooke Amendment, rent 
setting, minimum rents, income targeting, self-sufficiency 
contracts and the repeal of the 1937 Housing Act. The need to 
house the very lowest income households has never been more 
acute with so many residents and applicants facing reduced SSI 
and welfare payments. H.R. 2 removes important safeguards 
designed to protect the most vulnerable among us and abandons 
our commitment to serving our poorest families who critically 
need housing assistance.
    Chairman Lazio has agreed to some constructive changes in 
the Manager's Amendment including adding my amendment deleting 
the section of the bill exempting residents of public housing 
employed by a public housing authority from prevailing wage 
requirements. The original version of H.R. 2 required that the 
prevailing wage be paid to all contractors, laborers and 
mechanics employed by a local housing authority. But it 
exempted residents of public housing, such as non-union 
maintenance workers, from these important labor protections.
    Why should workers at the same worksite, living in the same 
community, doing the same job make less than their fellow 
workers? The changes made in the Manager's Amendment will 
ensure that American citizens who happen to live in public or 
assisted housing are guaranteed equal rights under the labor 
standards section of the bill. We should not be penalizing 
American citizens simply because they happen to live in public 
or assisted housing.
    In addition, I am especially pleased that Chairman Lazio 
added a provision in H.R. 2 that is virtually identical to a 
bill I have been working to enact into law for the past few 
years. My legislation, the Prohibition of Incentives for 
Relocation Act, would prohibit federal block grant funds from 
being used to move jobs from one part of the country to 
another.
    Under the current law governing the Community Development 
Block Grant (CDBG) program, there is no restriction on the use 
of funds to assist a business in relocating jobs from one 
community to another. Unfortunately, this happened in my 
hometown of Milwaukee when a major employer announced that it 
would move 2,000 jobs to other parts of the country using CDBG 
funds. This should never happen again in Wisconsin or any other 
state in the country.
    The need for Congress to pass this legislation is crucial. 
When one state uses federal funds to literally steal jobs from 
another state, we all lose. We must end the despair of the men 
and women who lose their jobs only to discover that their 
federal tax dollars are directly linked to their unemployment. 
Robbing Peter to pay Paul is not good business and should not 
be the business of the federal government.
    Although I have concerns with H.R. 2, as it is currently 
written, some of the amendments adopted in committee move in a 
positive direction. I remain hopeful that the full House of 
Representatives will make further improvements to the bill and 
that the conferees who are appointed to reconcile the 
differences between the House and Senate versions will each a 
bipartisan agreement on a housing reform bill that is 
acceptable to all of us.
    Public housing has many successes to its credit. But it is 
clear that we need to take additional steps to improve it in 
many areas. Such reforms would improve the management and 
development of public housing. More importantly, these reforms 
would help to ensure public housing programs are responsive to 
our communities and the needs of its residents, especially our 
children.

                                   Tom Barrett.
             ADDITIONAL VIEWS OF HON. JESSE L. JACKSON, JR.

    While we are all in agreement that our public housing 
system is in great need of comprehensive reform, H.R. 2, as 
passed by the Committee fails drastically to meet the critical 
housing needs of millions of Americans. The Housing Act of 1937 
established the fundamental right to safe, affordable, and 
sanitary housing. H.R. 2 destroys this last remnant of the 
safety net for the most vulnerable among us. At a time when our 
nation is facing an affordable housing crisis in which 5.3 
million people are living under ``worst case housing needs'' 
scenario--paying more than fifty percent of their income in 
rent or living under substandard or deplorable conditions, this 
amounts to an outright abandonment of our commitment to 
adequate housing for poor and working class Americans.
    H.R. 2, as reported out of committee, will exacerbate this 
affordable housing crisis through making public housing 
available to higher income residents who can pay higher rents 
at the expense of thousands of low income families. Those 
displaced will include full-time minimum wage workers whose 
incomes fall well below 30% of area median income in major 
metropolitan areas. As a result, low wage workers and Americans 
who we are ostensibly encouraging to successfully make the 
transition from welfare to work will either be forced into 
homelessness or to forgo basic human necessities like medical 
care, groceries, and clothing in order to find alternative 
shelter.
    We are deeply concerned by the community work provisions of 
Section 105 and believe that the Jackson and Watt amendments 
addressing this provision, if they had been adopted by the 
committee, would have protected against one of the most onerous 
and demeaning consequences of this bill. Section 105 creates 
the contradictory requirement of ``mandated volunteerism.'' By 
requiring public housing residents to perform eight hours of 
community work or risk eviction from public housing, we are 
imposing a burden on low-income recipients of housing 
assistance that we do not similarly impose upon middle and 
upper class recipients of housing subsidies, like the millions 
of Americans who take advantage of homeownership deductions 
each year.
    The words ``community work hours'' invoke the type of 
punishment imposed by judges on criminals for crimes committed 
against society. Public housing residents have committed no act 
against society, but are nonetheless subject to this mandate by 
sheer virtue of attaining the unfortunate circumstance of their 
poverty. Why must we vilify the disadvantaged and treat public 
housing residents as if they have committed a crime by being 
poor?
    Furthermore, this provision creates the oxymoronic 
predicament of ``mandating volunteerism'' which, in fact, 
demeans true volunteerism. Community service provides an 
invaluable benefit to a community and to the person 
volunteering their time. By taking ``volunteer'' out of 
volunteerism, however, we take from residents their sense of 
personal responsibility over their efforts. We are saying that 
we do not trust residents to take part in their own 
communities, so we must force them to do so. There is no pride 
in community service when it is mandated as if the resident is 
lazy or has done something wrong.
    We are equally concerned with the potential implications 
this provision holds for low wage workers. Forcing public 
housing residents to perform millions of uncompensated hours of 
work will, no doubt, have the effect of displacing millions of 
low wage workers who are currently, and will potentially be, 
employed in these communities. The community work requirement 
works directly against job creation for the very poor. Coupled 
with the impact of the welfare reform law, and the anticipated 
dearth of jobs to meet the great numbers of Americans 
attempting to transition from welfare to work, we must not 
implement policies which further displace our working poor 
without providing for additional job creation.
    This bill has been hailed by its sponsors as providing 
housing authorities with the flexibility to manage themselves 
efficiently. With this provision we are in essence 
micromanaging their operations by forcing them to implement 
work programs without regard to what they believe to be in the 
best interests of their communities. While our Republican 
colleagues are usually quite sensitive to the notion of 
imposing costs upon jurisdictions without adequately funding 
those costs, Republican committee members roundly rejected 
efforts to protect against imposing such an undue burden in 
H.R. 2. Virtually every housing authority in the nation agrees 
that without additional funds to administer the community work 
program, they will unduly be forced to accept this unfunded 
mandate. The Jackson and Frank amendments offered during markup 
would have ensured that public housing authorities are not 
forced to comply with this additional requirement, absent 
appropriations to cover administrative costs.
    In light of these and additional reasons raised in the 
minority views to this report, we believe that H.R. 2, as 
reported out of committee, will add to the millions of 
Americans currently facing severe housing needs or 
homelessness. For these reasons, we opposed the bill in 
committee and intend to vote against it on the floor if these 
provisions remain incorporated in the legislation.

                                   Jesse L. Jackson, Jr.
                                   Lucille Roybal-Allard.
                                   Carolyn B. Maloney.
                                   Julia Carson.
                                   Maxine Waters.
                                   Carolyn Cheeks Kilpatrick.
                                   Barney Frank.
                                   Bernard Sanders.
                                   Henry Gonzalez.
                                   Nydia M. Velazquez.
        ADDITIONAL VIEWS OF CONGRESSWOMAN CAROLYN C. KILPATRICK

    Dear Colleagues, Friends and Citizens: As a new Member of 
Congress, it is quite interesting and intriguing to note the 
practical and empirical decimation of the many programs that 
have provided a safety net for the poorest of the poor in our 
nation. Last year, witnessed the overhaul of the 61-year-old 
system of welfare. While many of us agree that welfare should 
be reformed, we did not agree to the total purge of many of its 
worthwhile programs on the backs of legal immigrants and 
children.
    The House Banking and Financial Affairs Committee has been 
considering H.R. 2, the so called ``Housing Opportunity and 
Responsibility Act of 1997.'' This bill would repeal the 1937 
U.S. Housing Act, the law that established the majority of our 
current public housing policies. H.R. 2's particularly onerous 
income targeting requirements means that Congress has decided 
to abandon our nation's poor and further fray what is left of 
our social safety net. Current law dictates that the majority 
of public housing residents earn no more than 30 percent of the 
median income level in their region. Now, if you earn no more 
than 30 percent--less than one-thirds--of what is considered to 
be mid-range income, you are practically destitute. You simply 
cannot afford to live anywhere else. For all intents and 
purposes, your options are public housing or public 
homelessness.
    H.R. 2 turns current law on its head. Under H.R. 2, 65 
percent of new tenants in public housing must have a job and 
earn up to 80 percent of the median income of a region. Only 35 
percent of new residents will be eligible to earn no more than 
the current level of 30 percent of median income. Therefore, if 
you are unable to find a job and earn up to 80 percent of the 
median income of your neighborhood, you are stuck. You will not 
have access to safe, affordable, or decent housing. In my 
opinion, not only does H.R. 2 tacitly state that most people 
cannot have safe, affordable, or decent housing; it also 
implies that if you are poor, you do not deserve such housing.
    During Committee consideration of this bill, my colleague 
Maxine Waters of California and I offered an amendment that 
would have retained current law that allowed for public housing 
agencies to reconcile non-criminal, minor disputes without 
having to resort to court. Although this method of resolution 
offered a cost-effective, efficient, and effective way to deal 
with minor infractions that did not involve a criminal 
violation, health code infraction, or a disturbance of the 
peace, it was rejected. Now, everyone--people who left their 
trash out on the wrong day, persons illegally dealing drugs, to 
people keeping cows in their apartments--will be included in 
the same category. Everyone will have to go through the 
expense, trouble and intimidation of a court hearing. This 
simply makes no sense whatsoever and will increase the homeless 
population.
    The best way to measure how a person, a community, a 
government, or a nation should be regarded is how that person, 
community, government or nation treats the least powerful of 
its citizens. H.R. 2 is a clear and manifest denigration of the 
commitment that the Federal government has had to our nation's 
poor, imposes more unfunded mandates to our nation's local and 
state governments, and will increase the bureaucracy of 
managing our already-dwindling public housing stock. I urge my 
colleagues to vote against this legislation in its current 
form.

                                   Carolyn C. Kilpatrick.
                             MINORITY VIEWS

    While there are many provisions and policy changes included 
in H.R. 2 which are to be applauded, the overwhelming number of 
Democratic members and the Independent member voted against 
reporting the Housing Opportunity and Responsibility Act of 
1997 from the Committee on Banking and Financial Services, as 
they did the United States Housing Act of 1995 in the last 
Congress. Like H.R. 2406, the reform bill of the last Congress, 
H.R. 2 represents a dramatic restructuring of the public and 
tenant based section 8 housing programs that will have 
consequences, perhaps unintended, detrimental to the very 
families the programs were intended to serve, the nation's most 
vulnerable.
    As reported, H.R. 2 virtually abandons the poor in favor of 
the moderate income, all in the name of flexibility for the 
local public housing authorities (PHAs). At the same time, it 
requires new federal, duplicative responsibilities and vast new 
PHA responsibilities for micormanaging the lives of residents 
and complying with federal regulations.
    Without compromises on the part of the Republican sponsors 
of this legislation, few of which were reached during Committee 
consideration, Democratic signatories to the minority views do 
not believe that this bill should become law. Without 
compromises H.R. 2 is destined to suffer the same fate as H.R. 
2406 in the last Congress. That public housing reform bill 
failed to become law because of the intransigence of the 
Republican House majority and their failure to compromise on 
many of the same issues that are included in H.R. 2.
    Indeed, although symbolic, H.R. 2 repeals the basic 
underpinnings of housing law, the U.S. Housing Act of 1937. The 
bill establishes an entirely new statutory framework for the 
public housing and tenant based rental assistance programs. In 
many ways, we agree with the majority's assessment that the 
public and section 8 housing programs need major and 
significant reforms. In fact, in the 103rd Congress, the House 
passed similar reforms by a broad bipartisan vote--deregulation 
demonstrations for high performing public housing agencies, 
rent reforms, reforms of the drug elimination grant program, 
reform of the one for one replacement requirements, 
streamlining the section 8 requirements modeled after the 
conventional real estate market, and the merger of the section 
8 certificate and voucher programs.
    While H.R. 2 includes those reforms, the Committee bill 
simply goes too far. Particularly troubling to Democrats are 
unnecessarily loose and unfair targeting of scarce federal 
housing resources; rent setting provisions; a new block grant 
program with few federal standards that siphons funding from 
public housing agencies; and unwieldy accreditation system; and 
community work and self sufficiency contract requirements.
Community work and self sufficiency contracts
    Committee Democrats are deeply concerned about both the 
community work requirements and the self sufficiency contract 
requirements in the bill. While community service is a noble 
goal for all Americans, requiring or mandating volunteerism as 
a condition of the lease from public and assisted housing 
residents barely scrapping by is hardly community service. We 
know of no other Federal benefit, where community work is 
required, except the welfare workfare requirements. We would 
point out that even the poorest resident of public and assisted 
housing pays some rent under this bill; so they are not living 
for free.
    On a more practical note, it is unclear how this work 
requirement will ever be enforced, much less families evicted 
for failing to perform community work. Housing authorities have 
enough to do without creating community work jobs and 
monitoring residents in those jobs. And the courts are 
sufficiently clogged without having to hear eviction cases of 
residents who fail to complete their community work.
    The self sufficiency contracts, although not binding lease 
terms, are in many ways even more troubling to Committee 
Democrats. They smack of social engineering and micro-managing 
families' lives. For the first time, PHAs will be required to 
ask families to set time limits on housing assistance, although 
we are pleased that the majority agreed that families should 
not be evicted if they fail to meet their stated time tables. 
Such a requirement would have been contradictory to the stated 
goal of mixed income communities.
    More importantly, requiring PHAs to administer self 
sufficiency contracts creates an administrative and financial 
burden (an unfunded mandate) for PHAs. It requires PHAs to 
duplicate the role of welfare agencies, a job for which they 
are ill-prepared and ill-equipped. It micro-manages PHAs and 
the lives of residents at the same time, placing new heavy 
burdens on both.
    Committee Democrats favor encouraging moving families from 
welfare to work through job training, education, and job 
placement programs administered by the agencies that know how 
to administer such programs in cooperation with the PHAs, not 
administered by the PHAs. The local housing management plan 
should include ways in which the PHA is coordinating social 
welfare and employment activities for families in public and 
assisted housing. That should be appropriate and sufficient 
without requiring PHAs to administer a self sufficiency 
contract for each family.
Targeting of assistance
    The Committee print establishes income eligibility for 
public housing at below 80 percent of median with targeting of 
35 percent of new admissions to very low income families, at or 
below 30 percent of the area median income. However, it also 
provides that the very low income targeting can be met by 
admitting very low income families to the choice based housing 
program in excess of the 40 percent very low income targeting 
requirement for that program. This is known as ``fungibility.''
    Committee Democrats fear that the targeting remains too 
lax. Targeting 35 percent of the federal assistance to families 
below 30 percent of median income is insufficient. And 
fungibility further dilutes the targeting. There is every 
possibility that no very low income families will be admitted 
to the permanent housing resource of public housing with 
fungibility. We know that these are the same families, many 
elderly, disabled, or large families who have the greatest 
difficulty finding housing under the rental assistance program 
now and the same families who are intimidated by the 
conventional housing market. So Committee Democrats are 
particularly concerned about fungibility.
    Current law requires that between 75 percent and 85 percent 
of the families admitted to public and section 8 housing have 
incomes below 50 percent of median. Further, current law 
requires the housing agencies to admit mostly families with 
federal preferences. This statutory requirement has had the 
effect of housing mostly families who are among the ``poorest 
of the poor.''
    While we support the repeal of federal preferences, we 
believe that this must be accompanied by deeper targeting than 
is the case in H.R. 2. We understand that the majority's 
objective is to give PHAs complete control of their operations 
and to change the income mix of the residents of assisted 
housing, but as Secretary Cuomo pointed out in his testimony 
before the Committee and the Administration's public housing 
bill indicates such lax targeting will alter the fundamental 
mission of public housing: to serve low income Americans unable 
to find decent and safe shelter in the private market.
    Representative Kennedy offered an amendment which would 
have targeted 40 percent of public housing units to households 
with incomes with 30 percent of area median income or below, 
and would have allowed no more than 10 percent of the units to 
be made available to households with incomes between 60 percent 
and 80 percent of median, which mirrors the Administration's 
position.
    HUD's statistics and economic modelling suggest that the 
rental income earned by targeting assistance at or below 80 
percent of median and providing assistance to families earning 
between 60 percent and 80 percent of median would be negligible 
with the authority to set ceiling rents. HUD's data suggests 
that ceiling rents generally kick in when incomes are around 55 
percent of an area's median. However, there could be other 
benefits to public housing communities by allowing broader 
participation in the program.
    Targeting assistance so loosely, we fear will fundamentally 
shift the focus of federal assistance too far from very low 
income families, all in the name of mixed income developments, 
reform, local control, and to make up the shortfall from the 
loss of federal subsidies. Further we believe that it is an 
unwise use of very scarce federal resources. Currently, the 
median income for public housing residents is 17 percent of 
area median income. We are concerned that the 35 percent target 
will become a maximum for new admittants to public housing so 
that the median income can increase more quickly. Fungibility 
will only exacerbate that problem.
    HUD estimates that if PHAs could simply raise the median 
income to 30 percent as it had been in the early 1980s, 
operating subsidies could be reduced by around $800 million, 
nearly one-third. Moreover, PHAs could easily meet the goal of 
making public housing available to working people and creating 
mixed-income communities with the targeting in the Kennedy 
amendment. Specifically, full time workers earning the minimum 
wage still make under 30 percent of area median income in all 
of the top 50 metropolitan areas in the country. Hence, the 
deeper targeting of the Democratic amendment is wholly 
consistent with the goal of encouraging work.
    We believe that the increases in income can occur even if 
the targeting of assistance is deeper. Even with some loosening 
of targeting of current law, but greater than that in the 
Committee bill, and the provision of rent caps, income to the 
property from rents will increase. Higher income residents will 
pay higher rents to offset the lower rents from lower income 
families.
    The targeting issue with respect to the rental assistance 
program is very different. The intent of the rental assistance 
program is to integrate and disperse low and very low income 
families into neighborhoods and the conventional real estate 
market where incomes are generally higher--the same mixed 
income goal as in public housing, but the opposite problem.
    We also recognize that the families with the most serious 
housing needs are those with the lowest incomes. HUD data 
indicates that of unassisted families with incomes below 20 
percent of median more than 71 percent have severe housing 
problems. These are the precise families who could be helped by 
the rental assistance program that would integrate them into 
mixed income neighborhoods.
    Because tenant-based assistance is not tied to particular 
housing projects, there is no inherent concentration of very 
poor households. In fact, well run tenant-based assistance 
programs ensure broader economic integration. Under these 
circumstances, there is simply no justification for refusing to 
target the maximum number of rental vouchers to those earning 
under 30 percent of area median income. Yet, the Kennedy 
amendment to require 75 percent of such assistance to this 
population was defeated.
    Therefore, we strongly believe that the targeting for the 
rental assistance program should be considerably deeper than 
the 40 percent included in the Committee bill, and deeper than 
the targeting to very low income families for the public 
housing program.
    We also believe that the targeting in H.R. 2 will 
exacerbate the problem of the lack of affordable housing, 
particularly for very low income families. The Center for 
Budget and Policy Priorities study, In Short Supply: The 
Growing Affordable Housing Gap, determined that the number of 
low income renters exceeded the number of affordable rental 
units by 4.7 million low income renters. According to the 
study, the nation has lost 43 percent of its affordable housing 
supply, some 2.2 million housing units, over the last two 
decades. Among renter households, at least 13 percent in every 
state spent 50 percent or more of their income tocover the 
rent. More than 5.6 million families today pay more than 50 percent of 
their incomes for rent, or live in substandard housing. They have been 
determined to be families with worst case housing needs.
    Committee Democrats believe the Committee bill's targeting 
may aggravate homelessness and harm the most vulnerable 
residents. Families with very low incomes waiting for public 
housing or rental assistance may simply be too poor for PHAs to 
assist and they may remain homeless. It is ironic that public 
housing is criticized for warehousing and concentrating the 
poor, often in deplorable conditions while the policies in the 
Committee bill may relegate those too poor for public housing 
and rental assistance to homeless shelters, which are often no 
more than barracks, dormitories, or warehouses.

Rent setting

    From its enactment in 1969, the Brooke amendment named 
after former Senator Edward Brooke (R-MA.), its sponsor, was 
intended to protect the most vulnerable residents of public 
housing and later those with section 8 assistance from paying 
too high a percentage of their incomes for rent. The rent to 
income ratio of first 25 percent and then 30 percent was 
thought to be a reasonable contribution in relation to the 
limited incomes of eligible residents. Last year's bill 
eliminated the protection of an income based rent for any 
family with an income above 30 percent of area median, although 
the rent cap was retained for the elderly, disabled, veterans, 
and families with incomes below 30 percent of median pursuant 
to Democratic amendments during House consideration of the 
bill.
    This year under H.R. 2, there is a different approach. 
While we applaud the majority for recognizing the necessity to 
provide income based rents up to 30 percent of median income 
for everyone, we are concerned about the rental choice 
provision that requires a family to choose between an income 
based rent and a market based or flat rent.
    At its best, it would require PHAs to develop certain 
market disciplines in estblishing flat rent schedules (as was 
required prior to Brooke). However Committee Democrats believe 
that the provisions of H.R. 2 would tend to encourage flat 
rents set far higher than 30 percent of most public housing 
tenants' incomes, because rents are to reflect market rents. 
Currently the average monthly rent paid by all public housing 
residents is $185, far less than operating costs or most market 
rents; and 75 percent all current residents have annual incomes 
that are less than $10,000. So the rent choice is hollow. No 
residents will choose to pay more than 30 percent of income for 
rent.
    Committee Democrats believe that at its worst, over time, 
the rent setting methods could end up segregating the very 
poor. PHAs would direct families choosing to pay income based 
rents to those properties with lower flat rents and where the 
PHA would lose the least money. Those who would agree the 
typically higher flat rents would be steered to the better 
properties. We would urge PHAs not to seek only families with 
greater rent paying ability and willing to pay flat rents. Such 
practices will shut out those on the waiting lists who are very 
low income until just the right income mix is achieved to 
generate sufficient operating income.
    Finally, the rental choice provision sets up an 
administratively cumbersome system--an unnecessary and unwanted 
administrative nightmare. Every year families will have to 
decide which rent they will pay. Recertification of income 
rules are different, depending on which rent families choose to 
pay. Families are at a distinct disadvantage in changing rental 
methods if a crisis occurs, the decision resting with the PHA 
not the family, to switch rental payments.
    Although Committee Democrats did not raise the rental 
choice provisions during Committee consideration of the bill, 
Mr. Frank will offer an amendment during House consideration of 
H.R. 2 to simplify rent setting policies and procedures for 
PHAs and families. His amendment will eliminate the choice 
provisions and require that all rents be capped at 30 percent 
of income. Unlike current law, it will not mandate a flat rent 
of 30 percent of income. Adopting a flexible rent to income 
ratio capped at 30 percent will permit very low income families 
to pay less than 30 percent of their limited incomes for rent 
and it will accommodate ceiling rents and income disallowances. 
The Frank approach would tend to encourage setting flat rents 
that were affordable to the overwhelming majority of public 
housing residents, those with incomes that are 30 percent of 
median income, unlike the flat rents proposed in the Committee 
bill.
    Committee Democrats believe that this is a simpler, fairer, 
and more reasonable rent setting system. It will allow the PHA 
the flexibility to establish flat rent schedules; it will 
introduce market disciplines in setting rent schedules; and it 
will eliminate the disincentive to earn additional income, 
which appears to be the only argument that the majority has 
offered for the rental choice provisions in the Committee bill.
    We are pleased that the Committee bill includes provisions 
for ceiling rents or maximum rents, another of the provisions 
from the 103rd Congress's House passed housing bill. Like the 
majority, we believe that ceiling rents are critical to rent 
reform and to attracting and keeping families, especially the 
``working poor'', in public housing. We are aware that more 
than 25 percent of the residents of public housing have earned 
income.
    We believe it makes no sense to penalize families who earn 
more by charging them higher rents. Indeed, we understand in 
certain high cost areas like New York City, without ceiling 
rents it would often be less expensive to move out of public 
housing into private housing of a higher quality. Ceiling rents 
will encourage mixed income communities which will help break 
the destructive concentration of very poor families in public 
housing. On this issue, we agree wholeheartedly with the 
majority and H.R. 2. However, we do not agree with the majority 
about the complete shift of incomes among residents in assisted 
housing that is part of the design of H.R. 2 as reported.

Minimum rents

    The Committee bill establishes a minimum rent of between 
$25 and $50, with certain hardshipexemptions established by the 
PHA. Committee Democrats believe that any requirement above $25.00 may 
pose a genuine hardship on families with no or very little income, such 
as those families who are unemployed, have lost their welfare benefits, 
are in the transition between homelessness and having housing, who have 
just lost their jobs, have unanticipated medical expenses, and are 
awaiting determination of eligibility for public benefits.
    Although we agree that families should pay some token 
amount toward rent, $50.00 is simply too high. We know, that if 
every PHA implemented a $50.00 minimum rent, as H.R. 2 would 
permit, nearly 340,000 elderly and families with children would 
be affected. Families would pay an average of $315.00 more per 
year in rent.
    About two thirds of the families affected by the new 
minimum rent requirement would be families with children, many 
of them in states with low welfare benefits and low wages. 
Right now, 10 percent of all the residents of public housing 
pay less than $50.00 in rent and 22 percent of all residents 
earn less than $5000.
    We also are aware that the imposition of the $50.00 minimum 
rent would have different impacts depending on regions of the 
country. While residents in high cost areas with high welfare 
cash assistance may not be dramatically affected, those with 
lower incomes and lower benefits would be. As an example, in 
Texas, the welfare benefit for a 3 person household is only 
$188.00 monthly. With a $50.00 minimum rent, a resident who had 
been paying $32.00 monthly based on the Brooke cap and 
applicable deductions from income would now be paying $50.00, 
or 46 percent of income.
    Committee Democrats are particularly concerned that 
granting hardship exemptions is solely in the discretion of the 
PHAs. We are pleased that the Committee adopted Representative 
Roybal Allard's amendment which clarified that families can not 
be evicted immediately if they are unable to pay a minimum 
rent; however we believe that a major shortcoming of the 
Committee bill is its failure to specify mandatory exemptions, 
such as loss of job, death or illness, awaiting an eligibility 
determination for benefits, from minimum rents.
    One of the most troubling omissions is a mandatory 
exemption for legal immigrants who will lose their welfare 
benefits, supplemental security income benefits, and food 
stamps as the result of the implementation of the welfare 
reform legislation passed during the 104th Congress. These are 
families, many of them elderly and disabled, who have been in 
this country legally for many years or who have just come to 
this country fleeing oppression. They have been and they are 
playing by the rules for legal immigrants. Soon they will have 
no income because of welfare reform. Representatives Vento and 
Gutierrez offered an amendment which would have provided a 
mandatory exemption from the minimum rent for these families. 
It was defeated on a nearly party line vote like most 
amendments.
    Every day there is a new and agonizing story of the 
emotional toll the fear of losing benefits is taking on legal 
immigrants--even stories of suicides. In many cases these are 
refugees from World War II and the Vietnam War who will be cut 
off from benefits now because they are too old or sick to pass 
the citizenship test. We believe that there is no valid reason 
for not requiring a hardship exemption in these instances.
    Committee Democrats believe that not granting this 
mandatory exemption is simply a case of piling on for little 
gain. When minimum rents for all public housing and section 8 
families were instituted, CBO scored the savings at a mere $25 
million. Legal immigrants represent only a fraction of that 
very small savings. The Republican Congress last year took away 
their income and their food stamps. This year, without a 
mandatory exemption from minimum rents, the Committee bill will 
charge them a minimum rent from their now empty pockets.

Funding

    The Committee bill authorizes funding levels for public 
housing and choice based housing that do not even equal level 
appropriated for the same programs for fiscal year 1997. For 
public housing, including the operating fund, the capital fund, 
the COMPAC program, and the severely distressed housing 
program, the bill authorizes $6.19 billion to be appropriated 
for the term of the bill; the 1997 appropriations bill 
appropriates $6.98 billion, nearly a billion dollars less. For 
the choice based housing program, H.R. 2 simply plucks a number 
out of the air; it seems to have no resemblance to the number 
needed for incremental assistance and renewals. The Republican 
appropriations bill for the last two fiscal years failed to 
provide any incremental section 8 assistance or new choice 
based housing certificates in the lexicon of H.R. 2; rather it 
provides funding for replacement housing certificates and 
renewals. H.R. 2 makes no such distinction.
    Committee Democrats believe the numbers are woefully 
inadequate. Committee Democrats also believe that it is 
critical for the authorizing Committee to establish priorities 
for spending on housing programs that the Budget Committee and 
the Appropriations Committee can use as guideposts during their 
deliberations. The Committee bill fails to do that.
    Just as we argued in the Committee's deliberations over the 
budget views, Committee Democrats, particularly, believe that 
it is critical that this bill include full funding for 
Operating Subsidies. Representative Frank offered an amendment, 
defeated along party lines, that would have required Congress 
to fully fund the operating subsidies needs pursuant to the 
performance funding system and its successor formula for each 
of the ensuing five years.
    Public housing funding in recent years has suffered much 
larger cuts than programs in the domestic discretionary budget, 
including other HUD programs. The ability of PHAs to maintain 
affordable rents and to serve poor people is tied to the level 
of the operating subsidy. Because operating subsidies have 
fallen below that called for by HUD's Performance Funding 
System, pressures have been generated for raising tenant rents 
above the 30 percent cap that has long been public policy, so 
as to avoid having the $90 billion investment in public housing 
deteriorate. This lack of operating subsidy--an estimated 
shortfall of $5.3 billion between FY 1993 and FY 2002--is also 
generating pressures of PHAs to seek tenants at the higher 
income ranges of eligibility.
    There are good reasons for changing the income mix in 
public housing so it does not consist solely of the very poor, 
but changes of this sort should be driven by the desire to 
provide the best overall housing environment, not by a need for 
funds to meet basic maintenance and operating needs. These 
pressures will only mount as welfare and SSI changes take hold 
and any new targeting requirements take effect.
    Committee Democrats are concerned that the short-sighted 
authorization levels and majority budget views are but one more 
example of the Republican strategy of divining policy by the 
numbers without considering the impact on very low income 
families.

Choice based rental housing

    Generally, we support many of the changes in the rental 
assistance program. The provisions essentially merge the 
section 8 certificate and voucher programs into one new 
program, much as the House adopted in the 103rd Congress. The 
new program includes requirements which bring the rental 
assistance program more closely in line with the conventional 
real estate market--reformed lease requirements, repeal of 
``take one, take all'', repeal of the ``endless lease'', and 
others. We believe that the program streamlining and merger 
will make it more attractive to a broader range of landlords 
and rental properties. However, the new program also includes a 
number of provisions with which we strongly disagree.
    The new rental assistance program provides for a minimum 
rental share, rather than a capped family contribution; and 
retains the concept of fair market rent, now called a rental 
indicator, and a payment standard as under the current section 
8 voucher program. It also relaxes targeting and repeals 
federal preferences. As discussed above, we believe that 
retaining a cap of the resident's share of rent is critical as 
is deeper targeting of assistance to very low income families.

Home Rule Flexible Block Grant

    The Committee bill establishes a housing block grant that 
would permit HUD, at a local official's request, to re-direct 
all public and choice based housing funds previously allocated 
to the locality's PHA to the local official. The official, on 
the other hand, is bound by few other restrictions like federal 
rent restrictions, targeting requirements, resident 
participation requirements, or resident protections. As a 
result, we fear that the longstanding federal investment in 
public and assisted housing will be abandoned, leaving many low 
and moderate income families with severe housing needs unmet.
    While we support partnering local and federal efforts to 
increase affordable housing, we united in opposition to the 
block grant approach because it creates an adversarial, rather 
than cooperative, relationship between local and federal 
entities. By permitting a locality to compete directly for all 
of the PHA's funds, we will have stripped the locality and the 
PHA of all incentives to work together. Yet it is crucial to 
the success of these programs for the locality and PHA to 
coordinate city services, such as policing, trash removal, and 
community investment effort. By encouraging competition rather 
than fostering cooperation, we believe that in the end those 
who will suffer the reduction in services will be the 
residents.
    We also believe that the local block grant approach is a 
resounding statement that despite the numerous policy reforms 
included in the bill, housing authorities cannot adequately 
meet the housing needs of the poor. We strongly disagree with 
that notion, and believe that the Committee should continue 
working to improve and strengthen that which we have invested 
in for decades--public housing--and direct PHAs and localities 
to work together in meeting the housing needs of the community. 
We join with former Secretary Henry Cisneros who actively 
opposed efforts to include a local block grant in the 1997 HUD 
budget. He argued in a letter to OMB Director Raines that the 
deregulation and transformation of public housing 
transformation was on course and was successfully enabling PHAs 
to better manage scarce resources and provide residents choice 
and mobility. The block grant, he went on, would only frustrate 
those advancements and achieve OMBs goal of blocking and 
cutting our Nation's housing programs.
    Without question the great majority of housing authorities 
are successfully and efficiently providing an important and 
basic need to our nation's lower income families. In order to 
continue to do so, we believe that PHAs must continue as 
autonomous, federally supported entities, partnering with 
localities. A PHA's autonomy from the local political structure 
increases the agency's accessibility and responsiveness to the 
families they serve.
    But if the locality were to run the grant program, the 
nature of local bureaucracies would prohibit such accessibility 
and responsiveness. Sunia Zaterman, Executive Director of the 
Council of Large Public Housing Authorities, spoke persuasively 
to this issue before the Banking Committee on March 6, 1997. In 
her testimony she stated, ``The insertion of the city will 
entail another layer of bureaucracy and (administrative) cost. 
City Halls, often encumbered with archaic civil service 
systems, are unaccustomed to the exigencies and urgencies of 
real estate management.'' Obviously, autonomy is not only 
important to the empowerment of public and assisted housing 
residents but also to the success of our federally financed 
housing programs.
    We also believe that in this time of fiscal restraint, 
federal housing dollars should be targeted to those with the 
greatest need. According to HUD's study released in March of 
1996, ``Rental Housing Assistance at a Crossroads,'' 70% of 
families below 30% of the area median income have severe 
housing needs. The block grant, however, would permit the 
locality to neglect those families, forcing them to sustain 
extreme rental costs, live in substandard housing, or live on 
the streets.
    In response to that concern, Republican Committee Members 
argue that the block grant will give localities the flexibility 
to implement innovative housing programs that meet those 
families' needs. While that should be a locality's goal, there 
are no requirements in the program to ensure that those 
families are accommodated. In fact, we provide localities 
federal assistance through direct grant programs such as HOME 
and CDBG and encourage localities to be innovative in rehabilitating or 
producing housing through such programs; yet those programs do not 
reach out to the families that are served by the public and assisted 
housing programs because the targeting requirements are broader. 
Therefore, we strongly believe that the public and assisted housing 
programs must be preserved to reach those in need.
    Another fear in block granting these programs is that it is 
a backdoor effort to reduce funds available for housing. As we 
see many of the housing block grants targeted for budgetary 
cuts, it is reasonable to expect that this block grant will be 
at risk in the future as well. Once the majority of the public 
and choice based housing funds are being diverted to the block 
grant, it will be only a matter of time before the entire 
program is turned into a block grant and the federal commitment 
to housing further challenged.

Housing foundation and accreditation board

    The Committee bill authorizes an independent study of the 
possible advantages to implementing a board, or any other 
system, to evaluate and accredit PHAs, but then absurdly 
negates the value of such a study by imposing a federal 
accreditation board upon the completion of the study regardless 
of the study's results. While we recognize that the bill 
improves the Public Housing Management and Assessment Program 
(PHMAP) to include evaluations of a PHA's success in promoting 
self sufficiency and in providing basic, acceptable housing 
conditions and maintains PHMAP while the study is underway, 
these improvements are more than offset by the fiscally 
wasteful and intellectually irrational policy decision to 
mandate a study but ignore the results. WE cannot support a 
costly study that will have little to no value when the 
Republican Congress is cutting social programs left and right.
    With regard to the merits of establishing an accreditation 
board, however, we acknowledge the critical need for more 
accountability of PHAs and their performance. Notwithstanding, 
we have numerous concerns about establishing this board with 
such vast powers.
    We believe that this new entity is duplicative of HUD and 
its responsibilities. There seems to be no sense of where HUD's 
responsibilities end and the board's begin. HUD's Inspector 
General, Susan Gaffney, who testified before the Subcommittee 
on Housing and Community Opportunity on March 11, 1997, 
expounded on that point. In her tempered opposition to 
establishing a Board, she stated, ``The Board could also become 
a parallel and competing organization with HUD, potentially 
resulting in turf battles and finger-pointing.'' We also find 
it somewhat ironic that this board must be created, in part 
according to the majority, because HUD is losing its staff and 
its capacity to monitor housing authorities adequately.
    Congress enacted PHMAP in 1992 precisely to monitor public 
housing agency performance. While its measurement scales are 
quantitative and objective, HUD staff is required to review 
PHMAP scores to provide assistance to housing authorities which 
receive low and failing scores. Certainly, the use of PHMAP can 
be improved with HUD providing greater follow up on the scores 
of PHAs. However, we believe it generally is a system that 
works; yet the new board will use PHMAP only in transition.
    The majority touts the new board for its critical role in 
placing ``death penalties'' on poor performing housing 
authorities. Yet, if such a penalty is imposed, HUD must impose 
it. The entity responsible for making decisions about the 
status of PHAs will be disassociated from those who are 
responsible for implementing those decisions.
    Finally, although the board will be responsible for 
granting accreditation to PHAs, the board's chief 
responsibility seems to be punitive--distinguishing PHAs that 
are poor performers--yet the bill then requires HUD to blindly 
step in and impose sanctions on the agency. We particularly are 
concerned about one sanction--holding back Community 
Development Block Grant (CDBG) funds if the Secretary 
determines that the city substantially added to the PHA's poor 
performance. We are concerned that the very cities sanctioned 
by loss of CDBG are the cities with the greatest housing and 
CDBG needs. The only ones who will lose are the low income 
families. We are also concerned that HUD will lack the proper 
information to accurately make an assessment, resulting in the 
sanction being mis-used as a political tool. Therefore, we 
would urge HUD to impose this sanction sparingly.
    Notwithstanding the favorable outcome of improving the 
status of PHAs in our communities, the new accreditation board 
bureaucracy will simply add another layer of politics an 
confusion. Even the model upon which the board was created, the 
hospital accreditation board, has come under recent attack for 
imposing meaningless standards and not enforcing them. We agree 
that the Committee should thoughtfully address show to improve 
the reputation and performance of PHAs, but the bill, once 
again, goes too far.

COMPAC

    An amendment offered by Representative Vento clarified that 
the broadened the drug elimination grant program, the Community 
Partnerships against Crime (COMPAC) program, would be available 
on a formula basis, but only to those who demonstrate need with 
respect to criminal activity in or around public housing. This 
should address the concerns of large housing authorities in big 
cities with such overwhelming crime problems.
    We believe that COMPAC can and should continue to provide a 
guaranteed resource for local authorities to enlist and retain 
allied law enforcement, provide drug prevention and treatment, 
engage in anti-gang activities, provide youth recreational 
opportunities, and to hire security personnel. So we are 
particularly pleased that another Vento amendment was accepted 
to authorize the COMPAC program for the term of the bill.

Occupancy standards

    In an effort to clarify HUD's role in establishing limits 
on the number of occupants per bedroom for rental housing, the 
Committee bill prohibits HUD from setting a national occupancy 
standard. Because we believe this policy merely legislates what 
is HUD's current practice, we support this provision in the 
bill. In addition, we are encouraged that the Committee 
overwhelminglydecided to preserve the Fair Housing Act's (FHA) 
prohibition on discrimination against families with children, as well 
as HUD's obligations under the FHA, and omit provisions that enforced a 
national occupancy standard. We strongly believe that HUD plays an 
integral and valuable role in enforcing the FHA and should not be 
hamstrung in its efforts to do so. HUD must continue to direct its 
field investigators, as it currently does under the Keating memorandum, 
to consider certain criteria when investigating allegations of 
discrimination under the FHA; and consider promulgating a rule guiding 
housing providers on establishing occupancy limits that do not 
discriminate against any persons based on race, color, religions, 
handicap, sex, familial status, or national origin.
    During the course of the debate regarding whether the 
Congress should impose a national occupancy standard, the 
Committee--with little exception--expressed strong and clear 
opposition to setting a national limitation on the number of 
occupants per bedroom. Members from both parties told of their 
childhood experiences where three siblings shared one bedroom 
or slept in living spaces because the bedrooms were full. They 
recognized that those experiences did not diminish their health 
and well-being or prohibit them from pursuing great things. 
Instead they recognized that the imposition of a national 
occupancy standard would worsen the shortage of housing for 
families with children. In turn, we believe the Committee 
acknowledged that the FHA is working in our communities by 
allowing for reasonable occupancy standards that act to protect 
the health and safety of residents, but prohibiting 
discriminatory standards that merely keep families out.

Legislative process

    The Committee bill represents a major restructuring of the 
two housing programs that serve our nation's low income 
families. It repeals the United States Housing Act of 1937, 
which has stood with amendment through the years, as the basic 
law governing the public housing program and the rental 
assistance program since its enactment. However, this 
Committee, in less than two months and with only three hearings 
before the Subcommittee in Washington, marked up and reported 
H.R. 2. The Subcommittee on Housing and Community Opportunity 
was by-passed in favor of mark-up at the full Committee on 
Banking. We believe an opportunity to air all the issues and 
make important technical and policy refinements was lost.
    We believe that such fundamental change demanded a more 
thorough legislative process. The bill makes wholesale changes 
in public policy, to current law, and to HUD program. Such 
changes are certain to have broad impacts on current and future 
residents of public and assisted housing, on local authorities, 
on private landlords, on housing markets, and on HUD. By 
trampling on the legislative process, we believe we are 
reporting a bill with unintended, unknown, and adverse 
consequences.

                                   Henry B. Gonzalez.
                                   Bruce F. Vento.
                                   Luis V. Gutierrez.
                                   Maurice D. Hinchey.
                                   Paul E. Kanjorski.
                                   Julia Carson.
                                   Carolyn B. Maloney.
                                   Tom Barrett.
                                   Jim Maloney.
                                   Carolyn C. Kilpatrick.
                                   Barney Frank.
                                   Joe Kennedy.
                                   John J. LaFalce.
                                   Lucille Roybal-Allard.
                                   Maxine Waters.
                                   Bernard Sanders.
                                   Esteban E. Torres.
                                   Melvin L. Watt.
                                   Nydia M. Velazquez.
                                   Floyd H. Flake.
                                   Jesse L. Jackson, Jr.
                         Other Dissenting View

                              By Ron Paul

    We, the Congress, are once again asked to re-enact federal 
housing legislation that is unconstitutionally, 
philosophically, economically and practically unsound.
    Prior to the Constitution-circumventing New Deal policies 
of the Fed-induced Depression era, such redistributionist 
policies whereby government takes money from one citizen to pay 
the housing costs (or some other cost) of another was 
forbidden. Supreme Court Justice Samuel Chase, in Calder v. 
Bull, opined that ``a law that takes property from A and gives 
it to B: it is against all reason and justice, for a people to 
intrust a legislature with such powers.'' Yet, this 
redistributionary scheme, rather than the exception, has become 
the rule as well as the rule of law in this twentieth-century, 
special-interest-state.
    But even setting aside the unconstitutionality of 
government's twentieth century housing policy for the moment, 
such redistributionary schemes are philosophically bankrupt as 
well. A right to housing, as espoused by proponents of this 
legislation, (or a right to more than the fruits of one's own 
labor), by definition must deprive some other the right to keep 
the fruit of his or her own labor. Moreover, such a ``right'' 
cannot be a right as it is not enjoyable by all simultaneously. 
For if each is entitled by right to more than the fruit of 
one's own labor, one must then ask from where this additional 
production will come. It is this fallacy that prompted Frederic 
Bastiat, the brilliant 18th Century political-economist to 
remark: ``the state is that great fictitious entity by which 
everyone seeks to live at the expense of everyone else.'' 
Bastiat understood that government was an agreement entered 
into for the purpose of protecting one's own property rather 
than the tool by which individuals could collectively band 
together to deprive others of theirs.
    The problems with government housing extends even beyond 
these not-so-insignificant barriers. The economic and practical 
aspects of such a policy warrant serious scrutiny as well. One 
must not forget that individuals respond to incentives and 
incremental measures moving this country further in the wrong 
policy direction must be actively opposed.
    There are those in this Congress who concede that there are 
serious problems with our federal housing policy but argue that 
we must ``reform'' it to correct these problems. By 
incrementally moving in the right direction we can look out for 
those affected (not just the tenants but the others dependent 
upon the government miscreant as well).
    This incrementalist approach has not worked in the past and 
will not work in the future. This bill will NOT move us 
incrementally in the right direction. The direction in which 
this legislation will lead us could be referred to as a 
continuation of ``mission creep.'' An idea for a small program 
or expenditure, no matter how ``deserving'' or well meaning, 
will only feed an ever-growing appetite for more government 
money.
    This bill will demonstrate yet again the innate nature of a 
government subsidy to grow exponentially. Despite the confident 
assurances of "flatlining" the HUD budget for a few years, 
government subsidized housing will continue to grow. A GAO 
report points out that there are an additional $18 billion in 
FHA insured mortgages at risk. While not a part of H.R. 2 
directly, the liabilities associated with the subsidized 
mortgages on the housing projects and other factors virtually 
assure it, even if it were not the nature of government's quest 
to sate its ravenous consumption of our money.
    The social reformers of the New Deal era persuaded a pliant 
government to address the issue of unemployment and the needs 
of the slum dwellers. Presumably, no one bothered to address 
the responsibility issue. John Weicher of the Hudson Institute 
explains well the logic that brought us the current situation.
    The social reformers of that era chose to ignore market 
forces, human nature and the nature of government. If 
government spends enough of other people's money, government 
can change lives. ``We know better for them than they do (and 
just how to do it),'' was the condescending implication.
    They claimed that poor tenement housing largely caused the 
social ills of the urban dwellers. These so-identified breeding 
grounds of crime, delinquency, disease, mental illness and 
worse were regarded as the result of the poor living 
conditions, not the cause. If government could give them decent 
housing, government could eliminate these problems, they 
dreamed. That dream has become a nightmare for all too many 
people--both for the people trapped by the constraints of the 
public dole and those forced through taxation to pay for it.
    The erstwhile social reformers thought government could 
eliminate the slums, create jobs in a depression and even 
encourage home ownership. Through government, they could 
realize their dreams. They were wrong.
    The United States Housing Act of 1937 established public 
housing, our oldest subsidy program, in order to create 
affordable, Depression-era housing for those temporarily 
unemployed or underemployed, eliminate slums and increase 
employment through make-work construction jobs. The Great 
Depression has long been over, but its misguided largesse and 
Constitution-circumventing redistribution schemes continue. Of 
course, we are still paying the deficit--with compound 
interest--for those jobs despite having institutionalized slum 
life.
    The War on Poverty demonstrated the mission creep. In 1965 
government created the Housing and Urban Development (HUD) 
Agency following the beginning in 1961 of federally-subsidized 
construction of privately-owned housing projects. Subsidized 
housing has now mutated into three forms: public housing, 
privately-owned projects and, Section 8 certificates and 
vouchers for use in privately-owned housing. Each of these 
three forms of government-subsidized housing makes up roughly 
one-third of the subsidized housing stock.
    Of the public housing projects, over 850,000 of the 1.4 
million units were built between 1950 and 1975. Only about 
100,000 new units were added to the public housing stock in the 
last 10 years. These units are built entirely with public 
funds, and the federal government pays part of the cost of 
operation. Over time, the federal government has to pay to 
modernize these developments too.
    However, the local Public Housing Authorities (PHAs) run 
the projects with such ineptitude in so many cases they are 
literally run into the ground. Costs to operate the public 
housing projects are comparable to private housing, according 
to HUD numbers, only if one does not consider the cost of 
building the units in the first place--as if the cost of the 
mortgage on a private housing building should not be a factor 
in setting the rent!
    The federal government then picks up the tab for the so-
called modernization, or rehabilitation, of the projects as 
they deteriorate. With this setup, there is no incentive for 
the local PHA officials to reinvest the rental income back into 
the units. As a consequence, the local PHA does not maintain 
them sufficiently, and the tenants suffer a life in substandard 
housing. Standards that are deemed unacceptable in private 
housing are somehow good enough in the government's eyes for 
those on the lower rungs of the socio-economic ladder.
    The privately-owned projects also bilk taxpayers on a grand 
scale, according to HUD Secretary Andrew Cuomo. He lambastes 
the fact that the government is overpaying rents compared to 
what his department considers Fair Market Rent. HUD is 
subsidizing rents of $849 a month in Chicago neighborhoods 
where the market rate is only $435 a month; paying $972 a month 
in Oakland, Ca., against a market rate of $607 a month; and in 
Boston, government is paying $1, 023 a month vis-a-vis $667 
monthly in the private market, he says.
    Mr. Cuomo attacks these abuses and decries the state of 
subsidized housing, but he does not recognize that these abuses 
are symptomatic of the system he is trying to preserve. ``For 
years we have been trying to grapple with this issue,'' he 
tells us and dangles promises of huge future savings if 
government tinkers around the edges of an ill-conceived system 
that tries to cheat the market, tries to circumvent human 
nature, and ignores the nature of government subsidies.
    His current promises are as false as the promises of his 
predecessors. One of his successors will one day lament the 
horrible state of subsidized housing he inherited and will 
promise grandiose reforms that will save billions if government 
only passes a future subsidized housing bill.
    One of the worst complications of this approach is the 
built-in disincentives to proper management. Under a convoluted 
setup, these privately-owned projects rely on FHA insurance and 
a federal subsidy paycheck to pay for it. Too often, these ill-
managed projects deteriorate so quickly that the units are torn 
down before they pay for their own construction. Under Mr. 
Cuomo's directives, HUD will decide the ``market'' rate 
concerning its subsidies. The market distortions of the tax 
code and FHA insurance make the situation worse.
    Vouchers and certificates are the best of the inherently 
flawed approaches. About 80% of people with vouchers find 
suitable housing of their choice--very often at only 40-60% of 
the cost of (less desirable) public housing. After enacting 
certificates in 1974 and vouchers in 1983, about 1.5 million 
households have been served by this approach--1.1 million 
through certificates and 400,000 through vouchers.
    The benefits of the tenant-based approach include the 
reliance of a quasi-free market competition with the attendant 
bonuses of lower costs, greater efficiency, rewards for 
personal initiative, and individual choice. Under tenant-based 
rental assistance, recipients are less likely to live in 
concentrated poor urban communities that often lack basic 
necessities: safety, good schools, employment opportunities, 
access to financial services, etc. They have a way out of the 
trap of project-based public housing units that have become a 
way of life.
    Market incentives through tenant choice put the renters in 
charge of their housing decisions. They may find the housing of 
their choice and even keep the difference between the rent and 
the voucher if they find housing for less than their voucher 
enabled them. (This is not the case with the certificates.) 
Unfortunately, the household remains tied to the state with the 
contingent constraints and perverse incentives that this 
arrangement implies.
    Unfortunately, H.R. 2 does not address these concerns. It 
leaves uncertain the ``proper'' approach to subsidized housing 
despite the fanfare of a ``new'' approach. While formally 
repealing the 1937 housing act, the mentality remains along 
with the compendium of problems inherently associated with it.
    The bill leaves uncertain whether a ``tenant-based 
approach'' or a ``project-based approach'' will be instituted. 
In the Washington tradition, a compromise is offered. Again, in 
the Washington tradition, this bill embraces the worst aspects 
of both approaches and fuses them together.
    This bill tries to ``target'' their social reforms now. By 
this government attempts to force social reforms through 
osmosis by luring better role models into the modern slums. 
Perhaps the Ellen Wilson housing project in Washington, D.C., 
just blocks away from the Capitol, would reassure us as to the 
benefits of incrementalism. In a city with a waiting list of 
16,000 people, government is spending about $186,000 per unit 
to build subsidized housing instead of spending less per unit 
and housing more people.
    One would hope that at least such incredible sums are going 
to the most needy of the 16,000 people waiting for subsidized 
housing. Yet even those earning up to $78,000 a year could 
qualify. Incremental social reform is not cost efficient.
    The Washington Post wrote on April 24, 1997 that Valley 
Green, a Washington, D.C. housing project built in early 1960s, 
was launched ``to house people displaced by `slum clearance,' 
[and] soon became a slum itself, poisoned over the decades by a 
toxic brew of poverty, rampant vandalism, violent drug dealing 
and government neglect. * * * The resulting wasteland, which 
stretches across 20 acres of silent concrete courtyards and 
rutted city streets, has come to serve in recent years as a 
convenient backdrop for politicians looking to cast blame for 
decades of despair.''
    This story is very indicative. It is one that has been 
retold far too many times in too many places. This expenditure 
has not even provided decent housing to those government was 
trying to help. According to HUD inspection general reports, up 
to 80% of the units fail inspections.
    It is a story that will be retold again and again if this 
bill passes. It is a testimony of the effects of government-
engineered social reform of housing. One must not forget the 
lofty goal of slum elimination of the 1930s that spawned this 
misadventure. That lofty goal of the 1960s spawned the dreamily 
named Valley Green. One can only wonder what name government 
shall bestow upon the next housing project born under H.R. 2's 
new legislative regime.
    Aside from the simple accounting costs associated with 
government subsidized housing, there are other real costs. 
Unfortunately even this simplicity eludes HUD which routinely 
demonstrates that it is incapable of understanding basic 
accounting and accountability. Just this month, a 
Congressionally-instigated investigators of Section 8 contract 
reserve accounts ``discovered'' $5 billion dollars in addition 
to the $1.6 billion in excess reserve funds recaptured late 
last year. I sincerely doubt that the residents of Valley 
Green, other housing projects and taxpayers think this is a 
well-run program.
    Just since HUD was created, government has appropriated 
over $572 billion to the agency. Of course, this figure does 
not include rents and fees collected by the agency, so that it 
could be argued that total funding for public housing has been 
much higher. HUD is budgeted annually around $21.7 billion for 
each of the next five years, but the figure for last year was 
only $19.4 billion. More money will be wasted.
    For fiscal years, 1965-1975, the agency's budget authority 
totalled less than $40 billion. In other words, government has 
spent over half a trillion dollars of taxpayers' hard-earned 
money on subsidized housing in the last 20 years.
    Nor has this half a trillion dollars increased the home 
ownership rates of Americans. The fourth quarter averages of 
home ownership between 1965-1974 averaged 64%. Despite such 
governmental largesse, fourth quarter rates of home ownership 
averaged 64% between 1965-1996. Certainly HUD has not made a 
significantly positive contribution to the goal of home 
ownership. They will be able to point to the easily identified 
few who have been helped at the expense of the less easily 
identified many who were negatively affected.
    One must not forget that the increased government 
expenditures derived through taxation have stifled the ability 
of many would-be home owners to save for the down payment and 
purchase the home of their dreams. Instead, they pay the taxes 
to bankroll the dreams of the social reformers, past and 
present.
    They are paying not only the bills of today but the taxes 
necessary to pay for the deficit spending dreamed up by 
previous social reforms. There is a real economic cost to these 
deficits. The distortions to the free market whereby the most 
efficient allocations of resources are made. HUD shows us the 
alternative (and considered enlightened) path to allocating 
resources better. The HUD bureaucracy consumes valuable 
resources that are best spent elsewhere. Even the new HUD 
Secretary concedes very readily that HUD is inefficient and 
wasteful. Government just needs to give it more time and more 
money, the Secretary pleads. Of course more time and more money 
have already cost us too much.
    This irresponsible pipe dreaming has contributed to unsound 
fiscal and monetary policies and introduced new iterations in 
the business cycle. As the market tries to factor in these 
government-spending-induced booms and busts, security against 
its ravages of higher unemployment and higher interest rates 
takes their toll. This added cost fuels the cycle which 
exacerbates the problem.
    Not only the taxpayers suffer under this approach. The 
civil rights of the tenants of subsidized housing are discarded 
as housing sweeps violative of the fourth amendment are 
conducted in the name of a misdirected war on poverty and lack 
of affordable housing.
    Of course it is the middle class and working poor who pay 
the cost most directly. The rich shelter their money from many 
income taxes and have their FICA taxes for Social Security 
capped. This regressive Social Security tax takes an unfair 
toll on the working poor and middle class. Many more people 
could afford better housing absent paying for the 
inefficiencies of the government's approach to housing.
    H.R. 2 is not the solution to our problems. Rather, it is 
an illustration of the creeping mission of more government for 
a longer period of time not fulfilling the dreams of its 
engineers. This bill is more of the same incrementalism that 
began in the 1930s. Despite proof that it was not working, we 
are asked to vote again to throw more money at the problem, 
give government more control of our lives and reap the rewards.
    In the 1960s, government acknowledged again the failure of 
the mission and expanded the reach of government exponentially. 
With those promises demonstrably unfulfilled, government find 
itself again at a crossroads. Continue creeping incrementally 
towards more government spending and a loss of civil and 
economic liberties OR the path of freedom. I urge government to 
offer liberty.
    I do not doubt the compassion and intentions of many of the 
social reformers, then or now. They are indeed well-meaning 
folks. The problem is that the effects of their good intentions 
run counter to the aims of their endeavors.
    Instead of a "safety net" that merely prevents a newly-
unemployed single mother from falling, the public housing 
project traps her and her family in its net and holds them 
hostage to the whims of the local Public Housing Authorities. 
These PHAs are not accountable to her. She has sacrificed her 
liberty to PHAs that are too often sinecures provided by 
political cronyism. Tales of their abuse are legendary.
    This corrupt scenario produces crime statistics 
proportionately twice as high in and around subsidized housing 
projects as in the communities as wholes, according to HUD's 
Office of Public and Indian Housing. Without the accountability 
inherent in a market situation, abuses are almost predictable. 
The public housing projects are but one of the worst examples 
of flouting the free market and the loss of accountability.
    H.R. 2 attempts to improve the lot of those benefiting from 
subsidized housing and make the bureaucracy less burdensome. 
Unfortunately, by the time this proposal goes to the floor, so 
many changes will have been made, compromises accepted and 
political deals consummated that we end up with a bill in some 
ways worse than the status quo, as bad as that is.
    The end result of this well-meaning attempt to care for 
those less fortunate is higher taxes (especially on the working 
poor), slower economic growth, fewer job offers and a 
reaffirmation of government's determination to keep tenants 
trapped in substandard housing whose managers are not 
accountable to them.
    At the same time, those politically-astute suppliers of 
government housing encourage the continuation of such programs 
at the expense of the more productive suppliers whose political 
polish does not place them in the ambit of those doling out the 
grants.
    We should end this misguided approach to such legislation. 
It punishes all taxpayers with the future additional expense of 
increased eligibility requirements while limiting further the 
availability of subsidized housing for those who currently 
qualify. It rewards special interest favors for the 
politically-connected--both unaccountable subsidized housing 
managers, department bureaucrats, politically-contributing 
public construction businesses and the landlords cashing above 
market government rent checks for substandard housing.
    The opportunity that H.R. 2 provides is squandered in an 
extension of more of the same. While consolidating programs 
could make oversight easier and bureaucrats and local PHAs more 
accountable, it is unlikely that this bill will go far enough 
to address the problems with our subsidized housing programs. 
New problems resulting from ``targeting'' are almost certain. 
Many of the critics of the left are correct to point out this 
mean misallocation of funds from the working poor and middle-
class to tenants with higher incomes than current tenants 
despite the waiting list.
    Only by rewarding individual initiative, choice, 
responsibility and the resultant accountability can government 
reforms better serve the recipients. Of course, only less 
government and lower taxes will truly meet those aims.

                                                          Ron Paul.

                                

```