I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Public Housing 

5 Agency Opportunity Act of 2016’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 

8 (1) Although small public housing agencies are 

9 numerous, they administer only a small fraction of 


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1 the financial resources provided under the Federal 

2 housing programs. 

3 (2) The oversight of small public housing agen4 cies by the Department of Housing and Urban De5 velopment is disproportionate to the financial risk 

6 the operations of these agencies pose to the Federal 

7 Government. 

8 (3) Small public housing agencies perform bet9 ter than larger agencies, as public housing agency 

10 performance is presently measured by the Federal 

11 Government. 

12 (4) The Department of Housing and Urban De13 velopment should deploy its administrative oversight 

14 resources in a manner that reflects relative risk to 

15 the Federal Government. 

16 (5) Regulatory and administrative burdens that 

17 may be reasonable for larger public housing agencies 

18 may not be so for smaller public housing agencies 

19 with more limited resources. 

20 (6) Eliminating unnecessary or unreasonable 

21 regulatory and administrative burdens will improve 

22 the effectiveness of small public housing agencies as 

23 providers of housing assistance to low-income fami24 lies. 


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1 (7) Small public housing agencies and their 

2 residents would benefit from, and small public hous3 ing agencies should be afforded, maximum flexibility 

4 in the use of their resources. 

5 (8) Congress and the Department of Housing 

6 and Urban Development should reduce administra7 tive and regulatory burdens on small public housing 

8 agencies. 

9 (9) Public housing revitalization funding has 

10 been largely unavailable to small public housing 

11 agencies. 

12 (10) Congress should establish a program of as13 sistance to enable public housing revitalization ac14 tivities by small public housing agencies. 

15 (b) PURPOSES.—The purposes of this Act are— 

16 (1) to assure the long-term viability and effec17 tiveness of the small public housing agencies and the 

18 housing assistance programs they operate; 

19 (2) to ensure that small public housing agencies 

20 are not subject to unnecessary Federal regulatory 

21 control and administrative requirements; 

22 (3) to afford flexibility to small public housing 

23 agencies in the use of their resources; 

24 (4) to adjust Federal oversight requirements for 

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1 cial risk to the Federal Government and the relative 

2 resources of such agencies; 

3 (5) to explore innovative approaches to simpli4 fying determination of income and tenant rents; and 

5 (6) to ensure that small public housing agencies 

6 have access to the resources necessary for the mod7 ernization and revitalization of their public housing 

8 stock. 

9 SEC. 3. SMALL PUBLIC HOUSING AGENCIES. 

10 (a) IN GENERAL.—Title I of the United States Hous11 ing Act of 1937 (42 U.S.C. 1437 et seq.) is amended by 

12 adding at the end the following: 

13 ‘‘SEC. 37. SMALL PUBLIC HOUSING AGENCIES. 

14 ‘‘(a) DEFINITIONS.—In this section, the following 

15 definitions shall apply: 

16 ‘‘(1) HOUSING VOUCHER PROGRAM.—The term 

17 ‘housing voucher program’ means a program for ten18 ant-based assistance under section 8. 

19 ‘‘(2) SMALL PUBLIC HOUSING AGENCY.—The 

20 term ‘small public housing agency’ means a public 

21 housing agency for which the sum of the number of 

22 public housing dwelling units administered by the 

23 agency and the number of vouchers under section 

24 8(o) administered by the agency is 550 or fewer. 


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1 ‘‘(3) TROUBLED SMALL PUBLIC HOUSING AGEN2 CY.—The term ‘troubled small public housing agen3 cy’ means a small public housing agency designated 

4 by the Secretary as a troubled small public housing 

5 agency under subsection (c)(4). 

6 ‘‘(b) APPLICABILITY.—Except as otherwise provided 

7 in this section, a small public housing agency shall be sub8 ject to the same requirements as a public housing agency. 

9 ‘‘(c) PROGRAM INSPECTIONS AND EVALUATIONS.— 

10 ‘‘(1) PUBLIC HOUSING PROJECTS.— 

11 ‘‘(A) PHYSICAL INSPECTIONS.— 

12 ‘‘(i) FREQUENCY OF INSPECTIONS BY

13 SECRETARY.—The Secretary shall carry 

14 out an inspection of the physical condition 

15 of a small public housing agency’s public 

16 housing projects not more frequently than 

17 once every 3 years, unless the agency has 

18 been designated by the Secretary as trou19 bled small public housing agency based on 

20 deficiencies in the physical condition of its 

21 public housing projects. 

22 ‘‘(ii) STANDARDS.—The Secretary 

23 shall apply to small public housing agen24 cies the same standards for the acceptable 


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1 condition of public housing projects that 

2 apply to projects assisted under section 8. 

3 ‘‘(B) FINANCIAL CONDITION.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 shall determine the financial condition of 

6 the public housing program of a small pub7 lic housing agency solely on the basis of 

8 the ratio of current assets to current liabil9 ities. 

10 ‘‘(ii) RATIO.—A ratio described in 

11 clause (i) of not less than 1 shall result in 

12 a determination that the financial condi13 tion of a small public housing agency is ac14 ceptable. 

15 ‘‘(C) MANAGEMENT CONDITION.— 

16 ‘‘(i) DETERMINATION.— 

17 ‘‘(I) IN GENERAL.—Except as 

18 provided in clause (ii), the Secretary 

19 shall determine the management con20 dition of the public housing program 

21 of a small public housing agency sole22 ly on the basis of the ratio of vacant 

23 unit months to eligible unit months. 

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1 scribed in subclause (I) of not more 

2 than 10 percent shall result in a de3 termination that the management con4 dition of a small public housing agen5 cy is acceptable. 

6 ‘‘(III) EXCEPTION.—In deter7 mining the management condition of a 

8 program or project of a small public 

9 housing agency with an extremely low 

10 number of public housing units, the 

11 Secretary may apply a ratio or stand12 ard that is different than the standard 

13 under this subparagraph. 

14 ‘‘(ii) CHANGING MARKET CONDI15 TIONS.—In determining the management 

16 condition of the public housing program of 

17 a small public housing agency, the Sec18 retary shall take into consideration a dem19 onstration by the small public housing 

20 agency that the inability of the small pub21 lic housing agency to lease an adequate 

22 number of units is a result of changes in 

23 market conditions. 

24 ‘‘(2) HOUSING VOUCHER PROGRAM.— 


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1 ‘‘(A) PHYSICAL INSPECTION OF ASSISTED

2 UNITS.—A small public housing agency admin3 istering assistance under section 8(o) shall 

4 make periodic physical inspections of each as5 sisted dwelling unit not less frequently than 

6 once every 3 years to determine whether the 

7 unit is maintained in accordance with the re8 quirements under section 8(o)(8)(A). 

9 ‘‘(B) MANAGEMENT ASSESSMENT.— 

10 ‘‘(i) IN GENERAL.—The Secretary 

11 shall evaluate the management of a vouch12 er program of a small public housing agen13 cy solely on the basis of the lease-up rate 

14 or the budget utilization rate of the small 

15 public housing agency. 

16 ‘‘(ii) RATE.—A lease-up rate or budg17 et utilization rate described in clause (i) of 

18 not less than 90 percent shall result in a 

19 determination that the management of the 

20 voucher program is acceptable. 

21 ‘‘(3) HIGH-PERFORMING AGENCIES.—The Sec22 retary shall designate a small public housing agency 

23 as a high-performing agency if the Secretary deter24 mines that the small public housing agency exceeds 

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1 graphs (1) and (2) by an extent established by rule 

2 by the Secretary. 

3 ‘‘(4) TROUBLED SMALL PUBLIC HOUSING AGEN4 CIES.— 

5 ‘‘(A) PUBLIC HOUSING PROGRAM.—Not6 withstanding any other provision of law, the 

7 Secretary may designate a small public housing 

8 agency as a troubled small public housing agen9 cy with respect to the public housing program 

10 of the small public housing agency only if the 

11 Secretary determines that the agency— 

12 ‘‘(i) has failed— 

13 ‘‘(I) to maintain the public hous14 ing units of the small public housing 

15 agency in a satisfactory physical con16 dition, based upon an inspection con17 ducted by the Secretary; and 

18 ‘‘(II) to correct deficiencies be19 fore the date that is 90 days after the 

20 date on which the Secretary verifies 

21 the inspection results; 

22 ‘‘(ii) does not have, as of the last day 

23 of any fiscal year, an acceptable ratio of 

24 current assets to current liabilities, as de25 termined under paragraph (1)(B); 


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1 ‘‘(iii) has failed to maintain an accept2 able average ratio of vacant unit months to 

3 eligible unit months during any calendar 

4 year, as determined under paragraph 

5 (1)(C), and that the failure is not the re6 sult of changes in market conditions; or 

7 ‘‘(iv) has failed to account for the rev8 enues and expenses of the small public 

9 housing agency, misappropriated Federal 

10 funds, or otherwise failed to comply with 

11 applicable Federal law. 

12 ‘‘(B) HOUSING VOUCHER PROGRAM.—Not13 withstanding any other provision of law, the 

14 Secretary may designate a small public housing 

15 agency as a troubled small public housing agen16 cy with respect to the housing voucher program 

17 of the small public housing agency only if the 

18 Secretary determines that the agency— 

19 ‘‘(i) has failed to comply with the in20 spection requirements under paragraph 

21 (2)(A); 

22 ‘‘(ii) during a calendar year has failed 

23 to maintain an acceptable lease-up rate or 

24 budget utilization rate, as determined 

25 under paragraph (2)(B); or 


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1 ‘‘(iii) has failed to account for the rev2 enues and expenses of the small public 

3 housing agency, misappropriated Federal 

4 funds, or otherwise failed to comply with 

5 applicable Federal law. 

6 ‘‘(C) APPEALS.— 

7 ‘‘(i) ESTABLISHMENT.—The Secretary 

8 shall establish an appeals process under 

9 which a small public housing agency may 

10 dispute a designation as a troubled small 

11 public housing agency. 

12 ‘‘(ii) OFFICIAL.—The appeals process 

13 established under clause (i) shall provide 

14 for a decision by an official who has not 

15 been involved, and is not subordinate to a 

16 person who has been involved, in the origi17 nal determination to designate a small 

18 public housing agency as a troubled small 

19 public housing agency. 

20 ‘‘(D) CORRECTIVE ACTION AGREEMENT.— 

21 ‘‘(i) AGREEMENT REQUIRED.—Not 

22 later than 60 days after the date on which 

23 a small public housing agency is des24 ignated as a troubled public housing agen25 cy under subparagraph (A) or (B), the 


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1 Secretary and the small public housing 

2 agency shall enter into a corrective action 

3 agreement under which the small public 

4 housing agency shall undertake actions to 

5 correct the deficiencies upon which the des6 ignation is based. 

7 ‘‘(ii) TERMS OF AGREEMENT.—A cor8 rective action agreement entered into 

9 under clause (i) shall— 

10 ‘‘(I) have a term of 1 year, and 

11 shall be renewable at the option of the 

12 Secretary; 

13 ‘‘(II) provide, where feasible, for 

14 technical assistance to assist the pub15 lic housing agency in curing its defi16 ciencies; 

17 ‘‘(III) provide for— 

18 ‘‘(aa) reconsideration of the 

19 designation of the small public 

20 housing agency as a troubled 

21 small public housing agency not 

22 less frequently than annually; 

23 and 

24 ‘‘(bb) termination of the 

25 agreement when the Secretary 


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1 determines that the small public 

2 housing agency is no longer a 

3 troubled small public housing 

4 agency; and 

5 ‘‘(IV) provide that in the event of 

6 substantial noncompliance by the 

7 small public housing agency under the 

8 agreement, the Secretary may— 

9 ‘‘(aa) contract with another 

10 public housing agency or a pri11 vate entity to manage the public 

12 housing of the troubled small 

13 public housing agency; 

14 ‘‘(bb) withhold funds other15 wise distributable to the troubled 

16 small public housing agency; 

17 ‘‘(cc) assume possession of, 

18 and direct responsibility for, 

19 managing the public housing of 

20 the troubled small public housing 

21 agency; 

22 ‘‘(dd) petition for the ap23 pointment of a receiver, in ac24 cordance with section 

25 6(j)(3)(A)(ii); and 


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1 ‘‘(ee) exercise any other 

2 remedy available to the Secretary 

3 in the event of default under the 

4 public housing annual contribu5 tions contract entered into by the 

6 small public housing agency 

7 under section 5. 

8 ‘‘(E) EMERGENCY ACTIONS.—Nothing in 

9 this paragraph may be construed to prohibit the 

10 Secretary from taking any emergency action 

11 necessary to protect Federal financial resources 

12 or the health or safety of residents of public 

13 housing projects. 

14 ‘‘(d) REDUCTION OF ADMINISTRATIVE BURDENS.— 

15 ‘‘(1) REPORTS.— 

16 ‘‘(A) COMPARABILITY WITH SECTION 8 RE17 QUIREMENTS.—Notwithstanding any other pro18 vision of law, and except as otherwise provided 

19 in this section, the Secretary may not require a 

20 small public housing agency to submit any re21 port, plan, or other information with respect to 

22 the public housing units, projects, or programs 

23 of the small public housing agency if the report, 

24 plan, or other information is not required to be 

25 submitted by the owner of a project assisted 


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1 under section 8 that is covered by a mortgage 

2 insured by the Secretary. 

3 ‘‘(B) EXCEPTION FOR DESIGNATED HOUS4 ING FOR ELDERLY AND DISABLED FAMILIES.— 

5 A small public housing agency shall submit to 

6 the Secretary the plan required under section 7 

7 in order to designate occupancy in public hous8 ing units in accordance with section 7. 

9 ‘‘(C) COMPLIANCE.—For purposes of de10 termining the benefits or funding available to a 

11 small public housing agency, the small public 

12 housing agency shall be deemed to be in compli13 ance with a requirement under Federal law to 

14 submit a report, plan, or other information with 

15 respect to the public housing units, projects, or 

16 programs of the small public housing agency if 

17 the small public housing agency submits the re18 ports, plans, or other information required 

19 under subparagraphs (A) and (B). 

20 ‘‘(2) COMMUNITY SERVICE.— 

21 ‘‘(A) IN GENERAL.—Notwithstanding any 

22 other provision of law, a small public housing 

23 agency may elect to comply with the require24 ments under section 12(c)(3) through the use of 

25 tenant certifications. 


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1 ‘‘(B) MONITORING OF COMPLIANCE.— 

2 ‘‘(i) DEFINITION.—In this subpara3 graph, the term ‘administrative burden or 

4 requirement’ includes a requirement to re5 view or verify information contained in a 

6 tenant certification. 

7 ‘‘(ii) REQUIREMENT.—The Secretary 

8 may not impose any administrative burden 

9 or requirement with respect to the moni10 toring of compliance with section 12(c) on 

11 a small public housing agency that has 

12 made an election under subparagraph (A), 

13 except a requirement to obtain tenant cer14 tifications and make the tenant certifi15 cations available to the Secretary. 

16 ‘‘(C) DETERMINATION OF NONCOMPLI17 ANCE.—A small public housing agency may not 

18 make an election under subparagraph (A) if the 

19 Secretary determines that there is substantial 

20 noncompliance by the tenants at the small pub21 lic housing agency with the requirements under 

22 section 12(c). 

23 ‘‘(D) INSUFFICIENT RESOURCES.—Not24 withstanding any other provision of law, section 

25 12(c) shall not apply to residents of any public 


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1 housing project that is located in a community 

2 having a population of less than 7,500, as de3 termined using data from the most recently 

4 available decennial census, and that is adminis5 tered by a small public housing agency, if the 

6 agency certifies to the Secretary, in accordance 

7 with such requirements as the Secretary shall 

8 establish, that there are insufficient community 

9 resources to allow tenants to comply with the 

10 requirements under such section. 

11 ‘‘(3) ECONOMIC OPPORTUNITY.—Section 3 of 

12 the Housing and Urban Development Act of 1968 

13 (12 U.S.C. 1701u) shall apply to a small public 

14 housing agency only to the extent that such section 

15 3 applies to the owner of a project assisted under 

16 section 8 of this Act. 

17 ‘‘(4) ASSET MANAGEMENT.—At the request of a 

18 small public housing agency or a public housing 

19 agency that administers not more than 400 public 

20 housing dwelling units, the Secretary shall exempt 

21 the small public housing agency or public housing 

22 agency from any asset management requirement 

23 otherwise imposed by the Secretary on public hous24 ing agencies. 

25 ‘‘(5) ENVIRONMENTAL REVIEWS.— 


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1 ‘‘(A) EXEMPTION.—Notwithstanding any 

2 other provision of law, a small public housing 

3 agency shall be exempt from any environmental 

4 review requirements with respect to a develop5 ment or modernization project involving new 

6 construction, for any project for which the por7 tion of the total development cost that is attrib8 utable to new construction does not exceed 

9 $100,000. 

10 ‘‘(B) STREAMLINED PROCEDURES.—The 

11 Secretary shall, by rule, establish streamlined 

12 procedures for environmental reviews of small 

13 public housing agency development and mod14 ernization projects involving new construction, 

15 for any project for which the portion of the 

16 total development cost that is attributable to 

17 new construction exceeds $100,000. 

18 ‘‘(6) GPNA PROVISION.—Notwithstanding any 

19 other provision of law, small public housing agencies 

20 shall be exempt from any requirement to conduct a 

21 Green Physical Needs Assessment (GPNA) or other 

22 such assessment similar in requirements with respect 

23 to any fiscal year for which the aggregate amount 

24 provided by the Secretary for nationwide assistance 

25 from the Capital Fund under section 9(d) fails to 


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1 meet the annual accrued need for such assistance 

2 nationwide for such fiscal year, as determined by the 

3 Secretary. 

4 ‘‘(e) FUNGIBILITY.— 

5 ‘‘(1) IN GENERAL.—Notwithstanding any other 

6 provision of law and subject to paragraph (2), a 

7 small public housing agency may— 

8 ‘‘(A) combine funds provided to the small 

9 public housing agency for voucher assistance 

10 under section 8(o), from the Capital Fund, and 

11 from the Operating Fund; and 

12 ‘‘(B) use the funds combined under sub13 paragraph (A) for any activity authorized under 

14 section 8(o) or subsection (d) or (e) of section 

15 9. 

16 ‘‘(2) LIMITATION.—In using funds combined 

17 under paragraph (1)(A), a small public housing 

18 agency shall assist substantially the same number of 

19 low-income families, with a comparable mix of fami20 lies by family size, as the small public housing agen21 cy did in the year preceding its qualification as a 

22 small public housing agency, with appropriate ad23 justments made by the Secretary on the basis of any 

24 increase or decrease in the number of vouchers or 

25 units assisted. 


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1 ‘‘(f) PROJECT-BASED VOUCHERS.—With respect to a 

2 program carried out by a small public housing agency 

3 under section 8(o)— 

4 ‘‘(1) section 8(o)(13)(B) shall be applied by 

5 substituting ‘50 percent’ for ‘20 percent’; and 

6 ‘‘(2) section 8(o)(13)(C) shall not apply. 

7 ‘‘(g) REPLACEMENT HOUSING FACTOR FUNDS.— 

8 During the first year of each 5-year period for which a 

9 small public housing agency qualifies for the addition of 

10 a replacement housing factor under section 905.400(i) of 

11 title 24, Code of Federal Regulations (or any successor 

12 thereto), the Secretary shall pay to the small public hous13 ing agency the portion of the total amount that the Sec14 retary plans to make available to the small public housing 

15 agency from the Capital Fund established under section 

16 9(d) during that 5-year period that is attributable to the 

17 addition of the replacement housing factor. 

18 ‘‘(h) ANNUAL ADJUSTMENT OF MINIMUM RENT.— 

19 ‘‘(1) ADJUSTMENT.—Notwithstanding any 

20 other provision of law, section 3(a)(3) shall be ap21 plied with respect to small public housing agencies 

22 by inserting after ‘$50 per month,’ the following: ‘as 

23 such amount is adjusted annually, for 2017 and 

24 years thereafter, to reflect the percentage of the in25 crease (if any) for such period in the Consumer 


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1 Price Index for all urban consumers published by 

2 the Department of Labor,’. 

3 ‘‘(2) MAINTENANCE OF SUBSIDIES.—Notwith4 standing any other provision of law, in determining 

5 the amount of assistance to be provided from the 

6 Capital Fund and the Operating Fund under section 

7 9 to any small public housing agency, or in pro8 viding such amounts to any such agency, the Sec9 retary may not take into consideration any amounts 

10 received by a small public housing agency pursuant 

11 to an adjustment made by reason of paragraph (1) 

12 of this subsection in the amount of the minimum 

13 rent. 

14 ‘‘(i) DE MINIMIS EXCEPTION TO DEMOLITION AND

15 DISPOSITION REQUIREMENTS.—Notwithstanding any 

16 other provision of law, section 18(f) shall be applied with 

17 respect to small public housing agencies by striking ‘the 

18 lesser of’ and inserting ‘the greater of’.’’. 

19 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

20 Section 5A of the United States Housing Act of 1937 (42 

21 U.S.C. 1437c–1) is amended— 

22 (1) in subsection (b), by striking paragraph (3); 

23 (2) in subsection (e), by striking paragraph (4); 

24 and 

25 (3) in subsection (f), by striking paragraph (5). 


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1 SEC. 4. RENT REFORM DEMONSTRATION PROJECT FOR 

2 SMALL PUBLIC HOUSING AGENCIES. 

3 (a) DEFINITIONS.—In this section, the following defi4 nitions shall apply: 

5 (1) EXTREMELY LOW-INCOME FAMILY.—The 

6 term ‘‘extremely low-income family’’ means a family 

7 whose income does not exceed the higher of— 

8 (A) the poverty guidelines updated periodi9 cally by the Department of Health and Human 

10 Services under the authority of section 673(2) 

11 of the Community Services Block Grant Act 

12 (42 U.S.C. 9902(2)) applicable to a family of 

13 the size involved (except that this subparagraph 

14 shall not apply in the case of public housing 

15 agencies or projects located in Puerto Rico or 

16 any other territory or possession of the United 

17 States); or 

18 (B) 30 percent of the median income for 

19 the area, as determined by the Secretary, with 

20 adjustments for smaller and larger families (ex21 cept that the Secretary may establish income 

22 ceilings higher or lower than 30 percent of the 

23 median income for the area on the basis of the 

24 Secretary’s findings that such variations are 

25 necessary because of unusually high or low fam26 ily incomes). 


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1 (2) INCOME.—The term ‘‘income’’ has the 

2 meaning given that term by section 3(b)(4) of the 

3 United States Housing Act of 1937 (42 U.S.C. 

4 1437a(b)(4)). 

5 (3) LOW-INCOME FAMILY.—The term ‘‘low-in6 come family’’ means a family whose income does not 

7 exceed 80 percent of the median income for the 

8 area, as determined by the Secretary with adjust9 ments for smaller and larger families, except the 

10 Secretary may establish income ceilings higher or 

11 lower than 80 percent of the median income for the 

12 area if the Secretary determines that such variations 

13 are necessary because of unusually high or low fam14 ily incomes in the area. 

15 (4) MEDIAN INCOME FOR THE AREA.—The 

16 term ‘‘median income for the area’’ means the me17 dian income of all families in a geographic area, as 

18 determined by the Secretary. 

19 (5) SECRETARY.—The term ‘‘Secretary’’ means 

20 the Secretary of Housing and Urban Development. 

21 (6) SMALL PUBLIC HOUSING AGENCY.—The 

22 term ‘‘small public housing agency’’ has the same 

23 meaning as in section 37(a) of the United States 

24 Housing Act of 1937, as added by this Act. 


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1 (7) VERY LOW-INCOME FAMILY.—The term 

2 ‘‘very low-income family’’ means a family whose in3 come does not exceed 50 percent of the median in4 come for the area, as determined by the Secretary 

5 with adjustments for smaller and larger families, ex6 cept the Secretary may establish income ceilings 

7 higher or lower than 50 percent of the median in8 come for the area if the Secretary determines that 

9 such variations are necessary because of unusually 

10 high or low family incomes in the area. 

11 (b) DEMONSTRATION PROJECT.—The Secretary shall 

12 carry out a demonstration project to examine how various 

13 methods of determining rent in public housing affect— 

14 (1) the administrative burden on small public 

15 housing agencies; and 

16 (2) the residents of public housing. 

17 (c) SCOPE OF DEMONSTRATION PROJECT.— 

18 (1) REQUEST TO PARTICIPATE.—The Secretary 

19 shall select small public housing agencies to partici20 pate in the demonstration project from among small 

21 public housing agencies that request to participate in 

22 the project. 

23 (2) NUMBER.—The Secretary shall select not 

24 more than 20 percent of the total number of small 


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1 public housing agencies to participate in the dem2 onstration project. 

3 (3) REPRESENTATION.—The Secretary shall se4 lect small public housing agencies representing a 

5 broad range of geographic areas and urban and 

6 rural locations. 

7 (d) RENT-SETTING MECHANISMS.—A small public 

8 housing agency participating in the demonstration project 

9 shall select one or more of the following methods for estab10 lishing a family’s rent contribution for a dwelling unit in 

11 public housing: 

12 (1) TIERED SYSTEM.— 

13 (A) INITIAL RENTS.—A tiered system 

14 under which the amount of initial rent is as fol15 lows: 

16 (i) For an extremely low-income fam17 ily, an amount equal to 30 percent of 10 

18 percent of the median income for the area. 

19 (ii) For a very low-income family, an 

20 amount equal to 30 percent of 30 percent 

21 of the median income for the area. 

22 (iii) For a low-income family, an 

23 amount equal to 30 percent of 50 percent 

24 of the median income for the area. 

25 (B) SUBSEQUENT RENTS.— 


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1 (i) ANNUAL ADJUSTMENT.—The rent 

2 established in accordance with subpara3 graph (A) shall be adjusted annually by 

4 the small public housing agency on the 

5 basis of changes in area median incomes. 

6 (ii) CONTINUED OCCUPANCY.—The 

7 annual adjustment in rent under clause (i) 

8 shall apply to the continued occupancy of 

9 an assisted family. 

10 (C) OVER-INCOME FAMILIES.—A family 

11 assisted under a tiered system established 

12 under subparagraph (A) whose income exceeds 

13 80 percent of the median income for the area 

14 shall pay a rent equal to the higher of— 

15 (i) 30 percent of 80 percent of the 

16 median income for the area; or 

17 (ii) the market rent for the unit as de18 termined by the small public housing agen19 cy. 

20 (2) GROSS INCOME.— 

21 (A) INITIAL RENTS.—A method under 

22 which rent is established in an amount that var23 ies between 26 to 28 percent of a family’s in24 come, based on family characteristics as deter25 mined by the small public housing agency. 


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1 (B) SUBSEQUENT RENTS.—The rent es2 tablished under subparagraph (A) shall be ad3 justed annually between income recertifications 

4 on the basis of factors selected by a small pub5 lic housing agency that are most relevant to the 

6 status of a resident. 

7 (C) MINIMUM RENT.—In establishing rents 

8 in accordance with subparagraph (A), a small 

9 public housing agency may impose a minimum 

10 rent. 

11 (3) EXISTING RENT MECHANISMS.—The meth12 od for establishing rents under section 3 of the 

13 United States Housing Act of 1937 (42 U.S.C. 

14 1437a), except that section 37(h)(1) of such Act (as 

15 added by the amendment made by section 3(a) of 

16 this Act), shall apply for purposes of this paragraph. 

17 (e) INCOME RECERTIFICATIONS.— 

18 (1) IN GENERAL.—Not less frequently than 

19 once every 5 years, a small public housing agency 

20 shall review family income for purposes of adjusting 

21 rent under paragraphs (1), (2), and (3) of sub22 section (d), except a family may request a recertifi23 cation and adjustment in rent at any time if the 

24 family income has changed by an amount established 

25 by the small public housing agency. 


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1 (2) DETERMINATION OF FAMILY INCOME.—In 

2 determining family income, a small public housing 

3 agency may use the income of the family as deter4 mined by the small public housing agency for the 

5 preceding year. 

6 (f) HARDSHIP EXCEPTION.—A small public housing 

7 agency shall adopt a hardship policy, comparable to the 

8 policy described in section 3(a)(3)(B) of the United States 

9 Housing Act of 1937 (42 U.S.C. 1437a(a)(3)(B)), for use 

10 in connection with a minimum rent imposed under sub11 section (d)(2)(C) and in connection with rents established 

12 under paragraphs (1), (2), and (3) of subsection (d). 

13 (g) REPORTS.— 

14 (1) IN GENERAL.—Not later than 5 years after 

15 the date of enactment of this Act, the Secretary 

16 shall submit to Congress a report on the results of 

17 the demonstration project carried out under this sec18 tion. 

19 (2) RECOMMENDATIONS FOR ACTION.—The re20 port submitted under paragraph (1) shall rec21 ommend that Congress take one or more of the fol22 lowing actions: 

23 (A) Continue the demonstration project for 

24 a specified period of time. 


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1 (B) Expand the number of participants in 

2 the demonstration project. 

3 (C) Apply the terms of the demonstration 

4 project to all small public housing agencies. 

5 (D) Change any of the terms of the dem6 onstration project. 

7 (E) Terminate the demonstration project. 

8 (3) RECOMMENDATIONS FOR PERMANENT LEG9 ISLATION.—The Secretary shall submit to Congress 

10 recommendations for permanent legislation that im11 plements rent reform for small public housing agen12 cies— 

13 (A) with the report required under para14 graph (1); or 

15 (B) before the date on which the Secretary 

16 submits the report required under paragraph 

17 (1). 

18 SEC. 5. ENERGY CONSERVATION. 

19 Section 9(e)(2) of the United States Housing Act of 

20 1937 (42 U.S.C. 1437g(e)(2)) is amended by adding at 

21 the end the following: 

22 ‘‘(D) FREEZE OF CONSUMPTION LEV23 ELS.— 

24 ‘‘(i) IN GENERAL.—A small public 

25 housing agency, as defined in section 


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1 37(a), may elect to be paid for its utility 

2 and waste management costs under the 

3 formula for a period, at the discretion of 

4 the small public housing agency, of not 

5 more than 20 years based on the small 

6 public housing agency’s average annual 

7 consumption during the 3-year period pre8 ceding the year in which the election is 

9 made (referred to in this subparagraph as 

10 the ‘consumption base level’). 

11 ‘‘(ii) INITIAL ADJUSTMENT IN CON12 SUMPTION BASE LEVEL.—The Secretary 

13 shall make an initial one-time adjustment 

14 in the consumption base level to account 

15 for differences in the heating degree day 

16 average over the most recent 20-year pe17 riod compared to the average in the con18 sumption base level. 

19 ‘‘(iii) ADJUSTMENTS IN CONSUMPTION

20 BASE LEVEL.—The Secretary shall make 

21 adjustments in the consumption base level 

22 to account for an increase or reduction in 

23 units, a change in fuel source, a change in 

24 resident controlled electricity consumption, 

25 or for other reasons. 


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1 ‘‘(iv) SAVINGS.—All cost savings re2 sulting from an election made by a small 

3 public housing agency under this subpara4 graph— 

5 ‘‘(I) shall accrue to the small 

6 public housing agency; and 

7 ‘‘(II) may be used for any public 

8 housing purpose at the discretion of 

9 the small public housing agency. 

10 ‘‘(v) THIRD PARTIES.—A small public 

11 housing agency making an election under 

12 this subparagraph— 

13 ‘‘(I) may use, but shall not be re14 quired to use, the services of a third 

15 party in its energy conservation pro16 gram; and 

17 ‘‘(II) shall have the sole discre18 tion to determine the source, and 

19 terms and conditions, of any financing 

20 used for its energy conservation pro21 gram.’’. 

22 SEC. 6. CONSORTIA. 

23 Not later than 180 days after the date of enactment 

24 of this Act, the Secretary of Housing and Urban Develop25 ment shall develop and deploy all electronic information 


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1 systems necessary to accommodate full consolidated re2 porting by public housing agencies electing to operate in 

3 consortia under section 13(a) of the United States Hous4 ing Act of 1937 (42 U.S.C. 1437k(a)). 

5 SEC. 7. EFFECTIVE DATE. 

6 This Act, and the amendments made by this Act, 

7 shall take effect 60 days after the date of enactment of 

8 this Act. 

Æ 


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