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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4816 Introduced in House (IH)]

<DOC>

114th CONGRESS
  2d Session
                                H. R. 4816

To reform laws relating to small public housing agencies, and for other 
                               purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 21, 2016

   Mr. Palazzo (for himself, Mr. Ashford, Mr. Bishop of Georgia, Mr. 
 Fleischmann, Mr. Frelinghuysen, Mr. Harper, Mrs. Hartzler, Mr. Posey, 
    Ms. Kuster, Mr. Thompson of Mississippi, and Mr. Westmoreland) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

_______________________________________________________________________

                                 A BILL

 
To reform laws relating to small public housing agencies, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Public Housing Agency 
Opportunity Act of 2016''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) Although small public housing agencies are numerous, 
        they administer only a small fraction of the financial 
        resources provided under the Federal housing programs.
            (2) The oversight of small public housing agencies by the 
        Department of Housing and Urban Development is disproportionate 
        to the financial risk the operations of these agencies pose to 
        the Federal Government.
            (3) Small public housing agencies perform better than 
        larger agencies, as public housing agency performance is 
        presently measured by the Federal Government.
            (4) The Department of Housing and Urban Development should 
        deploy its administrative oversight resources in a manner that 
        reflects relative risk to the Federal Government.
            (5) Regulatory and administrative burdens that may be 
        reasonable for larger public housing agencies may not be so for 
        smaller public housing agencies with more limited resources.
            (6) Eliminating unnecessary or unreasonable regulatory and 
        administrative burdens will improve the effectiveness of small 
        public housing agencies as providers of housing assistance to 
        low-income families.
            (7) Small public housing agencies and their residents would 
        benefit from, and small public housing agencies should be 
        afforded, maximum flexibility in the use of their resources.
            (8) Congress and the Department of Housing and Urban 
        Development should reduce administrative and regulatory burdens 
        on small public housing agencies.
            (9) Public housing revitalization funding has been largely 
        unavailable to small public housing agencies.
            (10) Congress should establish a program of assistance to 
        enable public housing revitalization activities by small public 
        housing agencies.
    (b) Purposes.--The purposes of this Act are--
            (1) to assure the long-term viability and effectiveness of 
        the small public housing agencies and the housing assistance 
        programs they operate;
            (2) to ensure that small public housing agencies are not 
        subject to unnecessary Federal regulatory control and 
        administrative requirements;
            (3) to afford flexibility to small public housing agencies 
        in the use of their resources;
            (4) to adjust Federal oversight requirements for small 
        public housing agencies to better reflect financial risk to the 
        Federal Government and the relative resources of such agencies;
            (5) to explore innovative approaches to simplifying 
        determination of income and tenant rents; and
            (6) to ensure that small public housing agencies have 
        access to the resources necessary for the modernization and 
        revitalization of their public housing stock.

SEC. 3. SMALL PUBLIC HOUSING AGENCIES.

    (a) In General.--Title I of the United States Housing Act of 1937 
(42 U.S.C. 1437 et seq.) is amended by adding at the end the following:

``SEC. 37. SMALL PUBLIC HOUSING AGENCIES.

    ``(a) Definitions.--In this section, the following definitions 
shall apply:
            ``(1) Housing voucher program.--The term `housing voucher 
        program' means a program for tenant-based assistance under 
        section 8.
            ``(2) Small public housing agency.--The term `small public 
        housing agency' means a public housing agency for which the sum 
        of the number of public housing dwelling units administered by 
        the agency and the number of vouchers under section 8(o) 
        administered by the agency is 550 or fewer.
            ``(3) Troubled small public housing agency.--The term 
        `troubled small public housing agency' means a small public 
        housing agency designated by the Secretary as a troubled small 
        public housing agency under subsection (c)(4).
    ``(b) Applicability.--Except as otherwise provided in this section, 
a small public housing agency shall be subject to the same requirements 
as a public housing agency.
    ``(c) Program Inspections and Evaluations.--
            ``(1) Public housing projects.--
                    ``(A) Physical inspections.--
                            ``(i) Frequency of inspections by 
                        secretary.--The Secretary shall carry out an 
                        inspection of the physical condition of a small 
                        public housing agency's public housing projects 
                        not more frequently than once every 3 years, 
                        unless the agency has been designated by the 
                        Secretary as troubled small public housing 
                        agency based on deficiencies in the physical 
                        condition of its public housing projects.
                            ``(ii) Standards.--The Secretary shall 
                        apply to small public housing agencies the same 
                        standards for the acceptable condition of 
                        public housing projects that apply to projects 
                        assisted under section 8.
                    ``(B) Financial condition.--
                            ``(i) In general.--The Secretary shall 
                        determine the financial condition of the public 
                        housing program of a small public housing 
                        agency solely on the basis of the ratio of 
                        current assets to current liabilities.
                            ``(ii) Ratio.--A ratio described in clause 
                        (i) of not less than 1 shall result in a 
                        determination that the financial condition of a 
                        small public housing agency is acceptable.
                    ``(C) Management condition.--
                            ``(i) Determination.--
                                    ``(I) In general.--Except as 
                                provided in clause (ii), the Secretary 
                                shall determine the management 
                                condition of the public housing program 
                                of a small public housing agency solely 
                                on the basis of the ratio of vacant 
                                unit months to eligible unit months.
                                    ``(II) Ratio.--Except as provided 
                                in subclause (III), a ratio described 
                                in subclause (I) of not more than 10 
                                percent shall result in a determination 
                                that the management condition of a 
                                small public housing agency is 
                                acceptable.
                                    ``(III) Exception.--In determining 
                                the management condition of a program 
                                or project of a small public housing 
                                agency with an extremely low number of 
                                public housing units, the Secretary may 
                                apply a ratio or standard that is 
                                different than the standard under this 
                                subparagraph.
                            ``(ii) Changing market conditions.--In 
                        determining the management condition of the 
                        public housing program of a small public 
                        housing agency, the Secretary shall take into 
                        consideration a demonstration by the small 
                        public housing agency that the inability of the 
                        small public housing agency to lease an 
                        adequate number of units is a result of changes 
                        in market conditions.
            ``(2) Housing voucher program.--
                    ``(A) Physical inspection of assisted units.--A 
                small public housing agency administering assistance 
                under section 8(o) shall make periodic physical 
                inspections of each assisted dwelling unit not less 
                frequently than once every 3 years to determine whether 
                the unit is maintained in accordance with the 
                requirements under section 8(o)(8)(A).
                    ``(B) Management assessment.--
                            ``(i) In general.--The Secretary shall 
                        evaluate the management of a voucher program of 
                        a small public housing agency solely on the 
                        basis of the lease-up rate or the budget 
                        utilization rate of the small public housing 
                        agency.
                            ``(ii) Rate.--A lease-up rate or budget 
                        utilization rate described in clause (i) of not 
                        less than 90 percent shall result in a 
                        determination that the management of the 
                        voucher program is acceptable.
            ``(3) High-performing agencies.--The Secretary shall 
        designate a small public housing agency as a high-performing 
        agency if the Secretary determines that the small public 
        housing agency exceeds the criteria for acceptability 
        established under paragraphs (1) and (2) by an extent 
        established by rule by the Secretary.
            ``(4) Troubled small public housing agencies.--
                    ``(A) Public housing program.--Notwithstanding any 
                other provision of law, the Secretary may designate a 
                small public housing agency as a troubled small public 
                housing agency with respect to the public housing 
                program of the small public housing agency only if the 
                Secretary determines that the agency--
                            ``(i) has failed--
                                    ``(I) to maintain the public 
                                housing units of the small public 
                                housing agency in a satisfactory 
                                physical condition, based upon an 
                                inspection conducted by the Secretary; 
                                and
                                    ``(II) to correct deficiencies 
                                before the date that is 90 days after 
                                the date on which the Secretary 
                                verifies the inspection results;
                            ``(ii) does not have, as of the last day of 
                        any fiscal year, an acceptable ratio of current 
                        assets to current liabilities, as determined 
                        under paragraph (1)(B);
                            ``(iii) has failed to maintain an 
                        acceptable average ratio of vacant unit months 
                        to eligible unit months during any calendar 
                        year, as determined under paragraph (1)(C), and 
                        that the failure is not the result of changes 
                        in market conditions; or
                            ``(iv) has failed to account for the 
                        revenues and expenses of the small public 
                        housing agency, misappropriated Federal funds, 
                        or otherwise failed to comply with applicable 
                        Federal law.
                    ``(B) Housing voucher program.--Notwithstanding any 
                other provision of law, the Secretary may designate a 
                small public housing agency as a troubled small public 
                housing agency with respect to the housing voucher 
                program of the small public housing agency only if the 
                Secretary determines that the agency--
                            ``(i) has failed to comply with the 
                        inspection requirements under paragraph (2)(A);
                            ``(ii) during a calendar year has failed to 
                        maintain an acceptable lease-up rate or budget 
                        utilization rate, as determined under paragraph 
                        (2)(B); or
                            ``(iii) has failed to account for the 
                        revenues and expenses of the small public 
                        housing agency, misappropriated Federal funds, 
                        or otherwise failed to comply with applicable 
                        Federal law.
                    ``(C) Appeals.--
                            ``(i) Establishment.--The Secretary shall 
                        establish an appeals process under which a 
                        small public housing agency may dispute a 
                        designation as a troubled small public housing 
                        agency.
                            ``(ii) Official.--The appeals process 
                        established under clause (i) shall provide for 
                        a decision by an official who has not been 
                        involved, and is not subordinate to a person 
                        who has been involved, in the original 
                        determination to designate a small public 
                        housing agency as a troubled small public 
                        housing agency.
                    ``(D) Corrective action agreement.--
                            ``(i) Agreement required.--Not later than 
                        60 days after the date on which a small public 
                        housing agency is designated as a troubled 
                        public housing agency under subparagraph (A) or 
                        (B), the Secretary and the small public housing 
                        agency shall enter into a corrective action 
                        agreement under which the small public housing 
                        agency shall undertake actions to correct the 
                        deficiencies upon which the designation is 
                        based.
                            ``(ii) Terms of agreement.--A corrective 
                        action agreement entered into under clause (i) 
                        shall--
                                    ``(I) have a term of 1 year, and 
                                shall be renewable at the option of the 
                                Secretary;
                                    ``(II) provide, where feasible, for 
                                technical assistance to assist the 
                                public housing agency in curing its 
                                deficiencies;
                                    ``(III) provide for--
                                            ``(aa) reconsideration of 
                                        the designation of the small 
                                        public housing agency as a 
                                        troubled small public housing 
                                        agency not less frequently than 
                                        annually; and
                                            ``(bb) termination of the 
                                        agreement when the Secretary 
                                        determines that the small 
                                        public housing agency is no 
                                        longer a troubled small public 
                                        housing agency; and
                                    ``(IV) provide that in the event of 
                                substantial noncompliance by the small 
                                public housing agency under the 
                                agreement, the Secretary may--
                                            ``(aa) contract with 
                                        another public housing agency 
                                        or a private entity to manage 
                                        the public housing of the 
                                        troubled small public housing 
                                        agency;
                                            ``(bb) withhold funds 
                                        otherwise distributable to the 
                                        troubled small public housing 
                                        agency;
                                            ``(cc) assume possession 
                                        of, and direct responsibility 
                                        for, managing the public 
                                        housing of the troubled small 
                                        public housing agency;
                                            ``(dd) petition for the 
                                        appointment of a receiver, in 
                                        accordance with section 
                                        6(j)(3)(A)(ii); and
                                            ``(ee) exercise any other 
                                        remedy available to the 
                                        Secretary in the event of 
                                        default under the public 
                                        housing annual contributions 
                                        contract entered into by the 
                                        small public housing agency 
                                        under section 5.
                    ``(E) Emergency actions.--Nothing in this paragraph 
                may be construed to prohibit the Secretary from taking 
                any emergency action necessary to protect Federal 
                financial resources or the health or safety of 
                residents of public housing projects.
    ``(d) Reduction of Administrative Burdens.--
            ``(1) Reports.--
                    ``(A) Comparability with section 8 requirements.--
                Notwithstanding any other provision of law, and except 
                as otherwise provided in this section, the Secretary 
                may not require a small public housing agency to submit 
                any report, plan, or other information with respect to 
                the public housing units, projects, or programs of the 
                small public housing agency if the report, plan, or 
                other information is not required to be submitted by 
                the owner of a project assisted under section 8 that is 
                covered by a mortgage insured by the Secretary.
                    ``(B) Exception for designated housing for elderly 
                and disabled families.--A small public housing agency 
                shall submit to the Secretary the plan required under 
                section 7 in order to designate occupancy in public 
                housing units in accordance with section 7.
                    ``(C) Compliance.--For purposes of determining the 
                benefits or funding available to a small public housing 
                agency, the small public housing agency shall be deemed 
                to be in compliance with a requirement under Federal 
                law to submit a report, plan, or other information with 
                respect to the public housing units, projects, or 
                programs of the small public housing agency if the 
                small public housing agency submits the reports, plans, 
                or other information required under subparagraphs (A) 
                and (B).
            ``(2) Community service.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, a small public housing agency may 
                elect to comply with the requirements under section 
                12(c)(3) through the use of tenant certifications.
                    ``(B) Monitoring of compliance.--
                            ``(i) Definition.--In this subparagraph, 
                        the term `administrative burden or requirement' 
                        includes a requirement to review or verify 
                        information contained in a tenant 
                        certification.
                            ``(ii) Requirement.--The Secretary may not 
                        impose any administrative burden or requirement 
                        with respect to the monitoring of compliance 
                        with section 12(c) on a small public housing 
                        agency that has made an election under 
                        subparagraph (A), except a requirement to 
                        obtain tenant certifications and make the 
                        tenant certifications available to the 
                        Secretary.
                    ``(C) Determination of noncompliance.--A small 
                public housing agency may not make an election under 
                subparagraph (A) if the Secretary determines that there 
                is substantial noncompliance by the tenants at the 
                small public housing agency with the requirements under 
                section 12(c).
                    ``(D) Insufficient resources.--Notwithstanding any 
                other provision of law, section 12(c) shall not apply 
                to residents of any public housing project that is 
                located in a community having a population of less than 
                7,500, as determined using data from the most recently 
                available decennial census, and that is administered by 
                a small public housing agency, if the agency certifies 
                to the Secretary, in accordance with such requirements 
                as the Secretary shall establish, that there are 
                insufficient community resources to allow tenants to 
                comply with the requirements under such section.
            ``(3) Economic opportunity.--Section 3 of the Housing and 
        Urban Development Act of 1968 (12 U.S.C. 1701u) shall apply to 
        a small public housing agency only to the extent that such 
        section 3 applies to the owner of a project assisted under 
        section 8 of this Act.
            ``(4) Asset management.--At the request of a small public 
        housing agency or a public housing agency that administers not 
        more than 400 public housing dwelling units, the Secretary 
        shall exempt the small public housing agency or public housing 
        agency from any asset management requirement otherwise imposed 
        by the Secretary on public housing agencies.
            ``(5) Environmental reviews.--
                    ``(A) Exemption.--Notwithstanding any other 
                provision of law, a small public housing agency shall 
                be exempt from any environmental review requirements 
                with respect to a development or modernization project 
                involving new construction, for any project for which 
                the portion of the total development cost that is 
                attributable to new construction does not exceed 
                $100,000.
                    ``(B) Streamlined procedures.--The Secretary shall, 
                by rule, establish streamlined procedures for 
                environmental reviews of small public housing agency 
                development and modernization projects involving new 
                construction, for any project for which the portion of 
                the total development cost that is attributable to new 
                construction exceeds $100,000.
            ``(6) GPNA provision.--Notwithstanding any other provision 
        of law, small public housing agencies shall be exempt from any 
        requirement to conduct a Green Physical Needs Assessment (GPNA) 
        or other such assessment similar in requirements with respect 
        to any fiscal year for which the aggregate amount provided by 
        the Secretary for nationwide assistance from the Capital Fund 
        under section 9(d) fails to meet the annual accrued need for 
        such assistance nationwide for such fiscal year, as determined 
        by the Secretary.
    ``(e) Fungibility.--
            ``(1) In general.--Notwithstanding any other provision of 
        law and subject to paragraph (2), a small public housing agency 
        may--
                    ``(A) combine funds provided to the small public 
                housing agency for voucher assistance under section 
                8(o), from the Capital Fund, and from the Operating 
                Fund; and
                    ``(B) use the funds combined under subparagraph (A) 
                for any activity authorized under section 8(o) or 
                subsection (d) or (e) of section 9.
            ``(2) Limitation.--In using funds combined under paragraph 
        (1)(A), a small public housing agency shall assist 
        substantially the same number of low-income families, with a 
        comparable mix of families by family size, as the small public 
        housing agency did in the year preceding its qualification as a 
        small public housing agency, with appropriate adjustments made 
        by the Secretary on the basis of any increase or decrease in 
        the number of vouchers or units assisted.
    ``(f) Project-Based Vouchers.--With respect to a program carried 
out by a small public housing agency under section 8(o)--
            ``(1) section 8(o)(13)(B) shall be applied by substituting 
        `50 percent' for `20 percent'; and
            ``(2) section 8(o)(13)(C) shall not apply.
    ``(g) Replacement Housing Factor Funds.--During the first year of 
each 5-year period for which a small public housing agency qualifies 
for the addition of a replacement housing factor under section 
905.400(i) of title 24, Code of Federal Regulations (or any successor 
thereto), the Secretary shall pay to the small public housing agency 
the portion of the total amount that the Secretary plans to make 
available to the small public housing agency from the Capital Fund 
established under section 9(d) during that 5-year period that is 
attributable to the addition of the replacement housing factor.
    ``(h) Annual Adjustment of Minimum Rent.--
            ``(1) Adjustment.--Notwithstanding any other provision of 
        law, section 3(a)(3) shall be applied with respect to small 
        public housing agencies by inserting after `$50 per month,' the 
        following: `as such amount is adjusted annually, for 2017 and 
        years thereafter, to reflect the percentage of the increase (if 
        any) for such period in the Consumer Price Index for all urban 
        consumers published by the Department of Labor,'.
            ``(2) Maintenance of subsidies.--Notwithstanding any other 
        provision of law, in determining the amount of assistance to be 
        provided from the Capital Fund and the Operating Fund under 
        section 9 to any small public housing agency, or in providing 
        such amounts to any such agency, the Secretary may not take 
        into consideration any amounts received by a small public 
        housing agency pursuant to an adjustment made by reason of 
        paragraph (1) of this subsection in the amount of the minimum 
        rent.
    ``(i) De Minimis Exception to Demolition and Disposition 
Requirements.--Notwithstanding any other provision of law, section 
18(f) shall be applied with respect to small public housing agencies by 
striking `the lesser of' and inserting `the greater of'.''.
    (b) Technical and Conforming Amendments.--Section 5A of the United 
States Housing Act of 1937 (42 U.S.C. 1437c-1) is amended--
            (1) in subsection (b), by striking paragraph (3);
            (2) in subsection (e), by striking paragraph (4); and
            (3) in subsection (f), by striking paragraph (5).

SEC. 4. RENT REFORM DEMONSTRATION PROJECT FOR SMALL PUBLIC HOUSING 
              AGENCIES.

    (a) Definitions.--In this section, the following definitions shall 
apply:
            (1) Extremely low-income family.--The term ``extremely low-
        income family'' means a family whose income does not exceed the 
        higher of--
                    (A) the poverty guidelines updated periodically by 
                the Department of Health and Human Services under the 
                authority of section 673(2) of the Community Services 
                Block Grant Act (42 U.S.C. 9902(2)) applicable to a 
                family of the size involved (except that this 
                subparagraph shall not apply in the case of public 
                housing agencies or projects located in Puerto Rico or 
                any other territory or possession of the United 
                States); or
                    (B) 30 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 than 30 
                percent of the median income for the area on the basis 
                of the Secretary's findings that such variations are 
                necessary because of unusually high or low family 
                incomes).
            (2) Income.--The term ``income'' has the meaning given that 
        term by section 3(b)(4) of the United States Housing Act of 
        1937 (42 U.S.C. 1437a(b)(4)).
            (3) 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 the 
        Secretary may establish income ceilings higher or lower than 80 
        percent of the median income for the area if the Secretary 
        determines that such variations are necessary because of 
        unusually high or low family incomes in the area.
            (4) Median income for the area.--The term ``median income 
        for the area'' means the median income of all families in a 
        geographic area, as determined by the Secretary.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (6) Small public housing agency.--The term ``small public 
        housing agency'' has the same meaning as in section 37(a) of 
        the United States Housing Act of 1937, as added by this Act.
            (7) Very low-income family.--The term ``very low-income 
        family'' means a family whose income does not exceed 50 percent 
        of the median income for the area, as determined by the 
        Secretary with adjustments for smaller and larger families, 
        except the Secretary may establish income ceilings higher or 
        lower than 50 percent of the median income for the area if the 
        Secretary determines that such variations are necessary because 
        of unusually high or low family incomes in the area.
    (b) Demonstration Project.--The Secretary shall carry out a 
demonstration project to examine how various methods of determining 
rent in public housing affect--
            (1) the administrative burden on small public housing 
        agencies; and
            (2) the residents of public housing.
    (c) Scope of Demonstration Project.--
            (1) Request to participate.--The Secretary shall select 
        small public housing agencies to participate in the 
        demonstration project from among small public housing agencies 
        that request to participate in the project.
            (2) Number.--The Secretary shall select not more than 20 
        percent of the total number of small public housing agencies to 
        participate in the demonstration project.
            (3) Representation.--The Secretary shall select small 
        public housing agencies representing a broad range of 
        geographic areas and urban and rural locations.
    (d) Rent-Setting Mechanisms.--A small public housing agency 
participating in the demonstration project shall select one or more of 
the following methods for establishing a family's rent contribution for 
a dwelling unit in public housing:
            (1) Tiered system.--
                    (A) Initial rents.--A tiered system under which the 
                amount of initial rent is as follows:
                            (i) For an extremely low-income family, an 
                        amount equal to 30 percent of 10 percent of the 
                        median income for the area.
                            (ii) For a very low-income family, an 
                        amount equal to 30 percent of 30 percent of the 
                        median income for the area.
                            (iii) For a low-income family, an amount 
                        equal to 30 percent of 50 percent of the median 
                        income for the area.
                    (B) Subsequent rents.--
                            (i) Annual adjustment.--The rent 
                        established in accordance with subparagraph (A) 
                        shall be adjusted annually by the small public 
                        housing agency on the basis of changes in area 
                        median incomes.
                            (ii) Continued occupancy.--The annual 
                        adjustment in rent under clause (i) shall apply 
                        to the continued occupancy of an assisted 
                        family.
                    (C) Over-income families.--A family assisted under 
                a tiered system established under subparagraph (A) 
                whose income exceeds 80 percent of the median income 
                for the area shall pay a rent equal to the higher of--
                            (i) 30 percent of 80 percent of the median 
                        income for the area; or
                            (ii) the market rent for the unit as 
                        determined by the small public housing agency.
            (2) Gross income.--
                    (A) Initial rents.--A method under which rent is 
                established in an amount that varies between 26 to 28 
                percent of a family's income, based on family 
                characteristics as determined by the small public 
                housing agency.
                    (B) Subsequent rents.--The rent established under 
                subparagraph (A) shall be adjusted annually between 
                income recertifications on the basis of factors 
                selected by a small public housing agency that are most 
                relevant to the status of a resident.
                    (C) Minimum rent.--In establishing rents in 
                accordance with subparagraph (A), a small public 
                housing agency may impose a minimum rent.
            (3) Existing rent mechanisms.--The method for establishing 
        rents under section 3 of the United States Housing Act of 1937 
        (42 U.S.C. 1437a), except that section 37(h)(1) of such Act (as 
        added by the amendment made by section 3(a) of this Act), shall 
        apply for purposes of this paragraph.
    (e) Income Recertifications.--
            (1) In general.--Not less frequently than once every 5 
        years, a small public housing agency shall review family income 
        for purposes of adjusting rent under paragraphs (1), (2), and 
        (3) of subsection (d), except a family may request a 
        recertification and adjustment in rent at any time if the 
        family income has changed by an amount established by the small 
        public housing agency.
            (2) Determination of family income.--In determining family 
        income, a small public housing agency may use the income of the 
        family as determined by the small public housing agency for the 
        preceding year.
    (f) Hardship Exception.--A small public housing agency shall adopt 
a hardship policy, comparable to the policy described in section 
3(a)(3)(B) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(a)(3)(B)), for use in connection with a minimum rent imposed 
under subsection (d)(2)(C) and in connection with rents established 
under paragraphs (1), (2), and (3) of subsection (d).
    (g) Reports.--
            (1) In general.--Not later than 5 years after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report on the results of the demonstration project carried out 
        under this section.
            (2) Recommendations for action.--The report submitted under 
        paragraph (1) shall recommend that Congress take one or more of 
        the following actions:
                    (A) Continue the demonstration project for a 
                specified period of time.
                    (B) Expand the number of participants in the 
                demonstration project.
                    (C) Apply the terms of the demonstration project to 
                all small public housing agencies.
                    (D) Change any of the terms of the demonstration 
                project.
                    (E) Terminate the demonstration project.
            (3) Recommendations for permanent legislation.--The 
        Secretary shall submit to Congress recommendations for 
        permanent legislation that implements rent reform for small 
        public housing agencies--
                    (A) with the report required under paragraph (1); 
                or
                    (B) before the date on which the Secretary submits 
                the report required under paragraph (1).

SEC. 5. ENERGY CONSERVATION.

    Section 9(e)(2) of the United States Housing Act of 1937 (42 U.S.C. 
1437g(e)(2)) is amended by adding at the end the following:
                    ``(D) Freeze of consumption levels.--
                            ``(i) In general.--A small public housing 
                        agency, as defined in section 37(a), may elect 
                        to be paid for its utility and waste management 
                        costs under the formula for a period, at the 
                        discretion of the small public housing agency, 
                        of not more than 20 years based on the small 
                        public housing agency's average annual 
                        consumption during the 3-year period preceding 
                        the year in which the election is made 
                        (referred to in this subparagraph as the 
                        `consumption base level').
                            ``(ii) Initial adjustment in consumption 
                        base level.--The Secretary shall make an 
                        initial one-time adjustment in the consumption 
                        base level to account for differences in the 
                        heating degree day average over the most recent 
                        20-year period compared to the average in the 
                        consumption base level.
                            ``(iii) Adjustments in consumption base 
                        level.--The Secretary shall make adjustments in 
                        the consumption base level to account for an 
                        increase or reduction in units, a change in 
                        fuel source, a change in resident controlled 
                        electricity consumption, or for other reasons.
                            ``(iv) Savings.--All cost savings resulting 
                        from an election made by a small public housing 
                        agency under this subparagraph--
                                    ``(I) shall accrue to the small 
                                public housing agency; and
                                    ``(II) may be used for any public 
                                housing purpose at the discretion of 
                                the small public housing agency.
                            ``(v) Third parties.--A small public 
                        housing agency making an election under this 
                        subparagraph--
                                    ``(I) may use, but shall not be 
                                required to use, the services of a 
                                third party in its energy conservation 
                                program; and
                                    ``(II) shall have the sole 
                                discretion to determine the source, and 
                                terms and conditions, of any financing 
                                used for its energy conservation 
                                program.''.

SEC. 6. CONSORTIA.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary of Housing and Urban Development shall develop and deploy 
all electronic information systems necessary to accommodate full 
consolidated reporting by public housing agencies electing to operate 
in consortia under section 13(a) of the United States Housing Act of 
1937 (42 U.S.C. 1437k(a)).

SEC. 7. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect 60 
days after the date of enactment of this Act.
                                 <all>
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