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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3740 Introduced in House (IH)]

104th CONGRESS
  2d Session
                                H. R. 3740

To consolidate the community and economic revitalization and affordable 
  housing programs of the Department of Housing and Urban Development 
          into two performance funds, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 27, 1996

Mr. Lazio of New York (by request) introduced the following bill; which 
was referred to the Committee on Banking and Financial Services, and in 
    addition to the Committee on Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL

 
To consolidate the community and economic revitalization and affordable 
  housing programs of the Department of Housing and Urban Development 
          into two performance funds, 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 AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Community 
Development Block Grant Performance Fund and HOME Performance Fund Act 
of 1996''.
    (b) Table of Contents.

Sec. 1. Short title and table of contents.
Sec. 2. Implementation.
                       TITLE I--PERFORMANCE FUNDS

Sec. 10. Findings and purposes.
     Subtitle A--Community Development Block Grant Performance Fund

Sec. 11. Definition of consolidated plan.
Sec. 12. Authorizations.
Sec. 13. Statement of activities and review.
Sec. 14. Eligible activities.
Sec. 15. Allocation and distribution of funds.
Sec. 16. Technical assistance and special activities.
Sec. 17. Guarantee of loans.
Sec. 18. Challenge grant fund.
Sec. 19. Reporting requirements.
Sec. 20. Termination of existing programs.
                   Subtitle B--Home Performance Fund

Sec. 21. Definitions; findings and purposes; program administration.
Sec. 22. Amendments to the comprehensive housing affordability 
                            strategy.
Sec. 23. Authorization.
Sec. 24. Eligible uses of investment.
Sec. 25. Income targeting.
Sec. 26. Qualification as affordable housing.
Sec. 27. Reallocation.
Sec. 28. Allocation of resources.
Sec. 29. HOME investment trust funds.
Sec. 30. Repayment of investment; matching requirements.
Sec. 31. Distribution of assistance.
Sec. 32. Performance review and sanctions.
Sec. 33. Challenge grant fund.
Sec. 34. Tenant and participant protections.
Sec. 35. Loan guarantees.
Sec. 36. Housing education, organizational, and other support.
Sec. 37. Priorities for capacity development.
Sec. 38. Conditions of contracts.
Sec. 39. Other assistance.
Sec. 40. Termination of existing programs.
              TITLE II--DEVELOPING COMMUNITIES INITIATIVE

Sec. 51. Basic authority.
Sec. 52. Funding.
Sec. 53. Program administration.
Sec. 54. Records, reports, and audits.
Sec. 55. Definitions.
                   TITLE III--MISCELLANEOUS PROGRAMS

Sec. 61. Use of technical assistance funds by or for HUD staff.
Sec. 62. HUD research and development.
Sec. 63. Fair housing initiatives program.
Sec. 64. Lead-based paint target housing hazard reduction program.

SEC. 2. IMPLEMENTATION.

    (a) In General.--Notwithstanding 42 U.S.C. 3535(o) or 24 CFR part 
10, the Secretary shall issue such regulations as may be necessary to 
implement any provision of this Act, and any amendment made by this 
Act, in accordance with section 552 or 553 of title 5, United States 
Code, as determined by the Secretary.
    (b) Use of Existing Rules.--In implementing any provision of this 
Act, the Secretary may, in the Secretary's discretion, provide for the 
use of existing rules to the extent appropriate, without the need for 
further rulemaking.

                       TITLE I--PERFORMANCE FUNDS

SEC. 10. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) the effectiveness of Federal housing assistance and 
        community development efforts has been diminished by the 
        proliferation of dozens of separate, duplicative programs which 
        are generally complex and overly prescriptive; and
            (2) the current system impedes the ability of communities 
        to respond to housing and community development needs in a 
        coordinated way, places an intolerable administrative burden on 
        program recipients, and inhibits innovation and flexibility.
    (b) Purposes.--The purposes of this title are--
            (1) to redefine the Federal Government's relationship with 
        communities across the Nation by consolidating housing 
        assistance and community development programs into a small 
        number of performance-based funds thereby allowing greater 
        discretion, coordination, and innovation in the application of 
        Federal assistance by community, local, and State leaders;
            (2) to devolve responsibility in a manner which maximizes 
        choice and dignity for families, promotes community 
        participation, expands the commitment to America's most 
        vulnerable populations, complies with Federal fair housing and 
        civil rights laws, and upholds the values of work and 
        homeownership;
            (3) to enhance performance-based accountability of States 
        and localities consistent with the foregoing national ideals 
        and to reward them with challenge grants and other benefits for 
        their successes; and
            (4) to establish an orderly and rational schedule of 
        transition to the new consolidated, performance-based program 
        structure.

     Subtitle A--Community Development Block Grant Performance Fund

SEC. 11. DEFINITION OF CONSOLIDATED PLAN.

    Section 102(a) of the Housing and Community Development Act of 1974 
is amended by adding the following new paragraph at the end:
            ``(24) The term `consolidated plan' means the single 
        comprehensive plan that the Secretary prescribes for submission 
        by jurisdictions that consolidates and fulfills the 
        requirements of--
                    ``(A) the comprehensive housing affordability 
                strategy under title I of the Cranston-Gonzalez 
                National Affordable Housing Act;
                    ``(B) the community development plan under section 
                104 of this Act; and
                    ``(C) the submission requirements for formula 
                funding under--
                            ``(i) the Community Development Block Grant 
                        Performance Fund under this title;
                            ``(ii) the HOME Performance Fund 
                        (authorized by title II of the Cranston-
                        Gonzalez National Affordable Housing Act, as 
                        amended by the Community Development Block 
                        Grant Performance Fund and HOME Performance 
                        Fund Act of 1996);
                            ``(iii) the Homeless Assistance Performance 
                        Fund (authorized by title IV of the Steward B. 
                        McKinney Homeless Assistance Act, as amended by 
                        the Homeless Assistance Performance Fund Act of 
                        1996); and
                            ``(iv) the AIDS Housing Opportunity Act 
                        (authorized by subtitle D of title VIII of the 
                        Cranston-Gonzalez National Affordable Housing 
                        Act).
        A jurisdiction's consolidated plan shall be coordinated and 
        consistent with a public housing agency's five-year 
        comprehensive plan, if any, required under section 14(e) of the 
        United States Housing Act of 1937.''.

SEC. 12. AUTHORIZATIONS.

    The second sentence of section 103 of the Housing and Community 
Development Act of 1974 is amended to read as follows: ``For purposes 
of assistance under section 106, there are authorized to be 
appropriated $4,600,000,000 for fiscal year 1997 and such sums as may 
be necessary for fiscal years 1998, 1999, and 2000. In addition, for 
the purpose of establishing the challenge grant fund under section 
112, there are authorized to be appropriated $300,000,000 for fiscal 
year 1997, $100,000,000 of which shall be for challenge grants 
authorized under section 112, and $200,000,000 of which shall be for 
grants for enterprise communities and empowerment zones designated 
after October 1, 1996 under section 1391 of the Internal Revenue Code 
of 1986, and such sums as may be necessary for fiscal years 1998, 1999, 
and 2000.''.

SEC. 13. STATEMENT OF ACTIVITIES AND REVIEW.

    (a) Content of Statement.--Section 104(a)(1) of the Housing and 
Community Development Act of 1974 is amended by striking the last 
sentence and inserting the following: ``In the case of States receiving 
grants pursuant to section 106(d), the statement of projected use of 
funds shall consist of the method by which the States will distribute 
funds, if any, to units of general local government and the proposed 
community development activities, if any. The final statement shall 
include specific performance measures and benchmarks provided by the 
grantee in developing the consolidated plan referred to in subsection 
(b)(4). The Secretary shall work with grantees to develop benchmarks 
and measures that can enable performance to be compared among 
jurisdictions.''.
    (b) Consolidated Plan.--Section 104(b)(4) of such Act is amended by 
adding after ``has developed'' the following: ``the consolidated plan, 
which shall also include''.
    (c) Certification.--Section 104(c) of such Act is amended to read 
as follows:
    ``(c) A grant may be made under section 106(b) or section 106(d) 
only if the unit of general local government or the State certifies 
that it is following a current consolidated plan.''.
    (d) Performance Report.--Section 104(e) of such Act is amended--
            (1) by inserting before the period at the end of the first 
        sentence the following: ``and the performance of the grantee as 
        measured against the grantee's specific performance measures 
        and benchmarks'';
            (2) by striking the fifth and sixth sentences;
            (3) in paragraph (1)--
                    (A) by striking ``section 106(d)(z)(B)'' and 
                inserting ``section 106(d), where applicable''; and
                    (B) by striking ``housing assistance plan'' and 
                inserting ``consolidated plan that includes a 
                comprehensive housing affordability strategy''; and
            (4) in paragraph (2), by adding ``where applicable,'' after 
        ``section 106(d),''.
    (e) Program Income.--Section 104(j) of such Act is amended by 
adding the following sentence at the end: ``The Secretary shall also 
exclude from consideration as program income any other amounts, if the 
Secretary determines that there is good cause for such exclusion and 
that the use of such funds will further the purposes of the Act.''.
    (f) Conforming.--Section 104(m)(1) of such Act is amended by 
striking ``subsection (b), (d)(1), or (d)(2)(B) of section 106'' and 
inserting ``section 106 (b) or (d)''.

SEC. 14. ELIGIBLE ACTIVITIES.

    (a) Eligible Activities.--Section 105(a) of the Housing and 
Community Development Act of 1974 is amended--
            (1) by striking paragraph (4) and inserting the following:
            ``(4) clearance (including removal of toxic materials and 
        other contaminants from properties), demolition, removal, 
        reconstruction, and rehabilitation (including rehabilitation 
        that improves energy efficiency) of buildings and improvements 
        (including interim assistance, and financing public or private 
        acquisition for reconstruction or rehabilitation, and 
        reconstruction or rehabilitation of privately owned properties, 
        including the renovation of closed school buildings);'';
            (2) by striking paragraph (14) and inserting the following:
            ``(14) provision of assistance including loans (both 
        interim and long-term) and grants for economic revitalization 
        activities which are carried out by public or private nonprofit 
        entities, including job creation activities by public agencies 
or nonprofit entities to enable families on welfare to become self-
sufficient;'';
            (3) by striking ``and'' at the end of paragraph (24);
            (4) by striking the period at the end of paragraph (25) and 
        inserting ``; and''; and
            (5) by adding at the end the following:
            ``(26) provision of services designed to further the 
        objectives of the Fair Housing Act, which may include services 
        relating to the provision of housing opportunities without 
        regard to race, color, religion, sex, national origin, familial 
        status, or disability; and other fair housing enforcement, 
        education, and outreach activities;''.
    (b) Low/Mod Benefit.--Section 105(c) of such Act is amended by 
adding at the end the following new paragraph:
            ``(5) Any activity carried out under subsection (a)(26) 
        shall be presumed to benefit persons of low and moderate 
        income.''.

SEC. 15. ALLOCATION AND DISTRIBUTION OF FUNDS.

    (a) Entitlement Reallocation.--Section 106(c) of such Act is 
amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) Any amounts allocated to a metropolitan city or an 
        urban county pursuant to the preceding provisions of this 
        section which are not received by the city or county for a 
        fiscal year because of failure to meet the requirements of 
        section 104(a), (b), (c), or (d), or which become available as 
        a result of actions under section 104(e) or 111, shall be 
        reallocated to the challenge grant fund under section 112.''; 
        and
            (2) by striking paragraphs (2) and (4) and redesignating 
        paragraph (3) as paragraph (2).
    (b) Conforming.--Section 106(d)(1) of such Act is amended by 
striking ``paragraphs (1) and (2)'' and inserting ``paragraph (1)''.
    (c) Use of Funds.--Section 106(d)(2)(A) of such Act is amended--
            (1) by adding after ``allocated under paragraph (1)'' the 
        following: ``shall be used by the State to carry out community 
        development activities in nonentitlement areas of the State if 
        the unit of general local government concurs in such action, 
        or''; and
            (2) by striking the third and fourth sentences.
    (d) State Administration.--Section 106(d)(3) of such Act is 
amended--
            (1) in subparagraph (A)--
                    (A) in the first sentence, by striking ``If the 
                State receives and distributes such amounts'' and 
                inserting the following: ``To the extent the State 
                distributes such amounts it receives''; and
                    (B) in the third sentence--
                            (i) by inserting ``and distributed'' after 
                        ``received''; and
                            (ii) by striking ``and its administrative 
                        expenses under section 810 of this Act'';
            (2) in subparagraph (C), by striking ``to amounts allocated 
        to all States under paragraph (1) for the succeeding fiscal 
        year'' and inserting ``to the challenge grant fund under 
        section 112'';
            (3) by redesignating paragraph (6) as paragraph (7); and
            (4) by redesignating paragraph (5) the second place it 
        appears as paragraph (6).
    (e) Conforming.--Section 106(d)(7) of such Act, as redesignated, is 
amended by inserting immediately after ``amounts received by'' the 
first place it appears the following: ``a State or''.
    (f) Permanent Extension of Colonias Authority.--Section 916(f) of 
the Cranston-Gonzalez National Affordable Housing Act is hereby 
repealed.

SEC. 16. TECHNICAL ASSISTANCE AND SPECIAL ACTIVITIES.

    (a) Set-Aside.--Section 107(a)(1) of the Housing and Community 
Development Act of 1974 is amended to read as follows:
    ``(a)(1) In General.--Of the total amount provided in appropriation 
Acts under the second sentence of section 103, the Secretary may set 
aside up to $45,500,000 for each fiscal year to make grants under 
subsections (b)(1), (b)(2), (b)(3), (b)(5), and (c)(1), provide 
technical assistance under subsection (b)(4), and carry out activities 
in connection with management information systems under subsection 
(c)(2).''.
    (b) Technical Assistance.--Section 107(b) of such Act is amended--
            (1) by adding ``and'' after the semicolon at the end of 
        paragraph (4);
            (2) by striking ``; and'' at the end of paragraph (6) and 
        inserting a period; and
            (3) by striking paragraphs (5) and (7) and redesignating 
        paragraph (6) as paragraph (5).
    (c) Work Study and Management Information Systems.--Section 107(c) 
of such Act is amended--
            (1) by inserting ``(1)'' after ``(c)'';
            (2) in paragraph (1), as redesignated by paragraph (1) of 
        this subsection, by inserting after ``education,'' the 
        following ``including Hispanic-serving institutions,''; and
            (3) by inserting a new paragraph at the end to read as 
        follows:
    ``(2) For fiscal year 1997 and fiscal year 1998, from the amount 
set aside under subsection (a)(1), the Secretary is authorized to set 
aside an amount up to 0.4 percent of the total amount provided in 
appropriation Acts under the second sentence of section 103, but not 
less than $18,000,000, to develop, implement, and refine management 
information systems in order to establish a national database on local 
needs and priorities, and to provide grantees and community members 
with software to plan and track performance.''.

SEC. 17. GUARANTEE OF LOANS.

    (a) Conforming.--The heading of section 108 of the Housing and 
Community Development Act of 1974 is amended to read as follows: 
``guarantee of loans''.
    (b) Eligible Activities and Funding Authority.--Section 108 of such 
Act is amended--
            (1) in the first sentence of subsection (a), by striking 
        ``the purposes of financing'' and all that follows up to the 
        period and inserting ``any activities eligible under section 
        105'';
            (2) in the fifth sentence of subsection (a), by striking 
        ``$2,000,000,000 for fiscal year 1993 and $2,000,000,000 for 
        fiscal year 1994'' and inserting the following: 
        ``$2,000,000,000 for fiscal year 1997 and such sums as may be 
        necessary for fiscal year 1998 and subsequent fiscal years''; 
        and
            (3) in subsection (k)(1), by striking ``$4,500,000,000'' 
        and inserting ``$6,000,000,000''.
    (c) Federal Financing Bank Financing.--Section 108(l) of such Act 
is hereby repealed.
    (d) Conforming.--Section 108(h) of such Act is amended by striking 
``subsection (j)'' and inserting ``subsection (i)''.
    (e) Conforming.--Section 108 of such Act, as amended by subsection 
(c), is amended by redesignating subsections (j) through (r) as 
subsections (i) through (p).

SEC. 18. CHALLENGE GRANT FUND.

    (a) Basic Authority.--Section 112 of the Housing and Community 
Development Act of 1974 is amended to read as follows:

                         ``challenge grant fund

    ``Sec. 112. (a) Basic Authority.--Of the amount approved in an 
appropriation Act under section 103 for grants in any year under this 
section and from amounts reallocated pursuant to sections 106(c)(1) and 
(d)(3)(C), the Secretary is authorized to make grants from a challenge 
grant fund--
            ``(1) for job creation activities and projects to grantees 
        under this title; or
            ``(2) in accordance with section 108(o)\1\.
---------------------------------------------------------------------------
    \1\Section 108(q) would be redesignated as section 108(o).
---------------------------------------------------------------------------
    ``(b) Eligibility for Awards.--To be eligible for consideration for 
an award from the challenge grant fund, a grantee shall at minimum--
            ``(1) meet the requirements of this title, as determined by 
        the Secretary under section 104(e);
            ``(2) meet or exceed performance measures and benchmarks 
        included in its consolidated plan for activities under this 
        title, including any activities under this section, which 
        measures and benchmarks shall reflect performance levels 
of grantees determined by the Secretary to be similarly situated; and
            ``(3) demonstrate it has expended grant funds on a timely 
        basis.
    ``(c) Submission Requirements.--The Secretary shall establish 
submission requirements for grantees to include in their consolidated 
plans.
    ``(d) Eligible Activities.--Challenge grants under this subsection 
shall be limited to activities and projects which--
            ``(1) spur community economic revitalization in low-income 
        areas, including--
                    ``(A) projects which clean up brownfields and other 
                environmentally deteriorated areas for which funds can 
                be used under section 105(a)(4), and
                    ``(B) projects and activities that serve as a 
                catalyst for new investment and development in nearby 
                areas, and create jobs for neighborhood residents; and
            ``(2) link low-income persons to job opportunities, 
        including job training, education, transportation, and child 
        care.
    ``(e) Selection Criteria.--The Secretary shall award grants under 
this section pursuant to a competition in which the following selection 
criteria shall be used--
            ``(1) the grantee's performance in expending funds in a 
        timely manner;
            ``(2) the extent to which the grantee has met or exceeded 
        the performance measures and benchmarks established in its 
        consolidated plan, and the extent to which those measures and 
        benchmarks were ambitious compared to those of other comparable 
        jurisdictions;
            ``(3) the extent of low-income targeting by the grantee, 
        with particular emphasis on job creation for persons of low-
        income;
            ``(4) the extent to which the grantee applies and leverages 
        its community development grants to job creation and to 
        implementing neighborhood investment strategies to revitalize 
        distressed neighborhoods;
            ``(5) the extent to which the jurisdiction uses the 
        challenge grant to gain access to regional resources and to 
        address regional economic revitalization problems;
            ``(6) the extent to which proposed activities or projects 
        link low-income residents of distressed areas with job 
        opportunities that will enable them to enter the mainstream 
        regional economy;
            ``(7) the extent of leveraging of other public and private 
        resources, including loan guarantees under section 108;
            ``(8) the extent to which the grantee has met or exceeded 
        its performance measures and benchmarks established in its 
        consolidated plan for other performance funds under programs of 
        the Secretary;
            ``(9) the extent to which the submission specifies 
        ambitious and realistic performance measures and benchmarks for 
        determining the success of the challenge grant proposal; and
            ``(10) such other factors as the Secretary determines 
        appropriate to achieve the objectives of this section.
    ``(f) Compliance With Program Requirements.--For all or a portion 
of a grant under this section, the Secretary may condition use of the 
grant, reduce the amount of the grant, or cancel the grant, based on 
whether the grantee has made measurable, objective progress in meeting 
the performance measures and benchmarks established in the consolidated 
plan and has complied with the requirements of the performance 
agreement entered into under this section.''.

SEC. 19. REPORTING REQUIREMENTS.

    Section 113 of the Housing and Community Development Act of 1974 is 
amended to read as follows:

                        ``reporting requirements

    ``Sec. 113. The Secretary is authorized to require recipients of 
assistance under this title to submit such reports and other 
information as the Secretary determines appropriate to carry out the 
responsibilities of the Secretary under this title.''.

SEC. 20. TERMINATION OF EXISTING PROGRAMS.

    (a) In General.--The following provisions of law are repealed:
            (1) Subtitle D of title IV of the Cranston-Gonzalez 
        National Affordable Housing Act, effective on October 1, 1997.
            (2) Section 222 of the Housing and Urban-Rural Recovery Act 
        of 1983, effective on the date of enactment of this Act.
            (3) Section 123 of the Housing and Urban-Rural Recovery Act 
        of 1983, effective on the date of enactment of this Act.
    (b) Authority To Provide Assistance.--On and after the effective 
date of such repeal, the Secretary may not make assistance available 
under any of the authorities listed in subsection (a) (as they existed 
immediately before such effective date), except pursuant to a legally 
binding commitment entered into before that date.
    (c) Law Governing.--Any amounts made available under any authority 
listed in subsection (a) before such effective date shall continue to 
be governed by the provisions of such authority, as they existed 
immediately before that date, except that each grantee may, in its 
discretion pursuant to procedures established by the Secretary, provide 
for the use, in accordance with the provisions of title I of the 
Housing and Community Development Act of 1974, of any such amounts that 
it has not obligated under such authority.
    (d) Status of Funds.--Any amounts appropriated under any authority 
listed in subsection (a) before such effective date that are available 
for obligation immediately before such date, or that become available 
for obligation on or after that date, shall be transferred and added to 
the amounts appropriated for title I of the Housing and Community 
Development Act of 1974 and shall thereafter be available for use in 
accordance with its provisions. Any amounts so transferred shall remain 
available for obligation only for the time periods for which such 
respective amounts were available before such transfer.

                   Subtitle B--Home Performance Fund

SEC. 21. DEFINITIONS; FINDINGS AND PURPOSES; PROGRAM ADMINISTRATION.

    (a) Definitions.--Section 104 of the Cranston-Gonzalez National 
Affordable Housing Act is amended by inserting at the end the following 
new paragraph:
            ``(26) The term `consolidated plan' means the single 
        comprehensive plan that the Secretary prescribes for submission 
        by jurisdictions that consolidates and fulfills the 
        requirements of--
                    ``(A) the comprehensive housing affordability 
                strategy under this title;
                    ``(B) the community development plan under section 
                104 of the Housing and Community Development Act of 
                1974; and
                    ``(C) the submission requirements for formula 
                funding under--
                            ``(i) the Community Development Block Grant 
                        Performance Fund (authorized by title I of the 
                        Housing and Community Development Act of 1974, 
                        as amended by the Community Development Block 
                        Grant Performance Fund and HOME Performance 
                        Fund Act of 1996);
                            ``(ii) the HOME Performance Fund 
                        (authorized by title II of this Act);
                            ``(iii) the Homeless Assistance Performance 
                        Fund (authorized by title IV of the Stewart B. 
                        McKinney Homeless Assistance Act, as amended by 
                        the Homeless Assistance Performance Fund Act of 
                        1996); and
                            ``(iv) the AIDS Housing Opportunity Act 
                        (authorized by subtitle D of title VIII of this 
                        Act).
        A jurisdiction's consolidated plan shall be coordinated and 
        consistent with a public housing agency's five-year 
        comprehensive plan, if any, required under section 14(e) of the 
        United States Housing Act of 1937.''.
    (b) Findings and Purposes.--
            (1) Section 203 of such Act is amended by inserting after 
        paragraph (2) the following new paragraphs, and redesignating 
        the remaining paragraphs accordingly:
            ``(3) to enhance performance-based accountability of States 
        and localities consistent with the purposes of this title and 
        to reward them with challenge grants and other benefits for 
        their successes;
            ``(4) to assist State and local governments in providing 
        housing for persons with special needs, including persons with 
        disabilities and the frail elderly, to help these individuals 
        live with dignity and independence in their communities;''.
            (2) Section 203(8) of such Act, as redesignated, is amended 
        to read as follows:
            ``(8) to expand the capacity of community housing 
        development organizations and other nonprofit organizations to 
        develop and manage decent, safe, sanitary, and affordable 
        housing;''.
    (c) Program Administration.--Section 204 of such Act is amended by 
striking ``through the Office of the Assistant Secretary for Housing--
FHA Commissioner of the Department of Housing and Urban Development,''.

SEC. 22. AMENDMENTS TO THE COMPREHENSIVE HOUSING AFFORDABILITY 
              STRATEGY.

    Section 105(b) of such Act is amended--
            (1) in paragraph (16), the first place it appears, by 
        striking the period and inserting a semicolon;
            (2) in paragraph (16), the second place it appears--
                    (A) by redesignating such paragraph as paragraph 
                (17); and
                    (B) by striking ``and'' at the end;
            (3) by moving the flush material that follows paragraph 
        (17), as redesignated, to the end of such subsection;
            (4) by striking ``(17) for'' and inserting ``(18) for'';
            (5) in paragraph (18), as redesignated, by striking ``and'' 
        at the end;
            (6) by striking ``(17) describe'' and inserting ``(19) 
        describe'';
            (7) by striking the period at the end of paragraph (19), as 
        redesignated, and inserting a semicolon; and
            (8) by adding at the end the following new paragraphs:
            ``(20) include specific performance measures and benchmarks 
        provided by the jurisdiction in developing the consolidated 
        plan (the Secretary shall work with jurisdictions to develop 
        benchmarks and measures that can enable performance to be 
        compared among jurisdictions); and
            ``(21) include other information or strategies as may be 
        specified by the Secretary.''.

SEC. 23. AUTHORIZATION.

    Section 205 of such Act is amended to read as follows:

``SEC. 205. AUTHORIZATION.

    ``There are authorized to be appropriated to carry out this title 
$1,400,000,000 for fiscal year 1997 and such amounts as may be 
necessary for fiscal years 1998, 1999, and 2000. In addition, for 
purposes of assistance under section 223(c), there are authorized to be 
appropriated $150,000,000 for fiscal year 1997 and such sums as may be 
necessary for fiscal years 1998, 1999, and 2000.''.

SEC. 24. ELIGIBLE USES OF INVESTMENT.

    Section 212(a) of such Act is amended--
            (1) by redesignating paragraph (5) as paragraph (4); and
            (2) in paragraph (4), as redesignated, by inserting before 
        the period the following: ``, including blood-lead level 
        testing of children residing in housing assisted under this 
        title, and for the education of the public on the nature and 
        causes of lead poisoning and measures to reduce exposure to 
        lead, including exposure due to residential lead-based paint 
        hazards''.

SEC. 25. INCOME TARGETING.

    Section 214 of such Act is amended--
            (1) in paragraph (1)(A), by striking ``at the time of 
        occupancy or at the time funds are invested, whichever is 
        later,''; and
            (2) in paragraph (2), by striking ``at the time of 
        occupancy or at the time funds are invested, whichever is 
        later''.

SEC. 26. QUALIFICATION AS AFFORDABLE HOUSING.

    Section 215 of such Act is amended--
            (1) in subsection (a)(1)(B), by inserting ``or local'' 
        after ``State''; and
            (2) by adding the following new subsection:
    ``(c) Exception to General Requirements.--The Secretary may modify 
the qualifying rental housing requirements and the qualifying 
homeownership requirements under subsections (a) and (b) for housing 
authorized under section 214(c).''.

SEC. 27. REALLOCATION.

    Section 216 of such Act is amended--
            (1) by striking paragraph (5) and redesignating the 
        remaining paragraphs accordingly;
            (2) in paragraph (5), as redesignated--
                    (A) by striking ``previous 3 paragraphs'' and 
                inserting ``previous 2 paragraphs'';
                    (B) by striking subparagraph (A)(ii) and inserting 
                the following:
                    ``(ii) add the remainder to the challenge grant 
                fund under section 223(c).'';
                    (C) by striking subparagraph (C)(ii) and inserting 
                the following:
                    ``(ii) add the remainder to the challenge grant 
                fund under section 223(c).''; and
                    (D) in subparagraph (D), by striking ``paragraphs 
                (3), (4), and (5)'' and inserting ``paragraphs (3) and 
                (4)'';
            (3) in paragraph (7), as redesignated--
                    (A) in the first sentence, by striking ``paragraph 
                (9)'' and inserting ``paragraph (8)''; and
                    (B) in the second sentence, by striking 
                ``paragraphs (3) through (6)'' and inserting 
                ``paragraphs (3) through (5)'';
            (4) in paragraph (8), as redesignated--
                    (A) in the first sentence, by striking ``paragraph 
                (10)'' and inserting ``paragraph (9)''; and
                    (B) in the second sentence, by striking ``paragraph 
                (6)'' and inserting ``paragraph (5)''; and
            (5) in paragraph (9), as redesignated, by striking 
        ``paragraph (9)'' and inserting ``paragraph (8)''.

SEC. 28. ALLOCATION OF RESOURCES.

    (a) In General.--Section 217(a) of such Act is amended to read as 
follows:
    ``(a) In General.--
            ``(1) Indian allocation.--For each fiscal year, the 
        Secretary shall reserve for grants to Indian tribes 1.5 percent 
        of the amounts approved in an appropriations Act to carry out 
        this title pursuant to the first sentence of section 205. The 
        Secretary shall provide for distribution of amounts under this 
        paragraph to Indian tribes on the basis of a competition 
        conducted pursuant to specific criteria, established by the 
        Secretary, for the selection of Indian tribes to receive such 
        amounts. The Secretary may also reserve up to 1.5 percent of 
        the total amount available under section 242 for any fiscal 
        year for capacity building for Indian tribes in accordance with 
        section 242.
            ``(2) Insular areas.--For each fiscal year, of the amounts 
        approved in an appropriations Act to carry out this title 
        pursuant to the first sentence of section 205, the Secretary 
        shall reserve for grants to the Insular areas the greater of 
        (A) $750,000, or (B) 0.2 percent of the amounts appropriated. 
        The Secretary shall provide for the distribution of amounts 
        reserved under this paragraph among the Insular areas pursuant 
        to specific criteria, established by the Secretary, for such 
        distribution.
            ``(3) Capacity building and other assistance.--For each 
        fiscal year, of the amount approved in an appropriations Act to 
        carry out this title pursuant to the first sentence of section 
        205--
                    ``(A) the greater of 2.5 percent of the funds or 
                $38,000,000 may be used for assistance authorized under 
                sections 233, 242, and 244 (a), and (c), and (d);
                    ``(B) up to 0.5 percent of the funds, but not less 
                than $7,000,000 shall be available for the development 
                and operation of management information systems 
                authorized under section 244(b); and
                    ``(C) beginning in fiscal year 1998, up to 
                $10,000,000 may be used for assistance for childhood 
                lead poisoning prevention activities authorized under 
                section 244(e).
            ``(4) Loan guarantees.--For each fiscal year, such amounts 
        as may be necessary for the cost to the Government, as defined 
        in section 502 of the Congressional Budget Act, of guaranteed 
        loans under section 227 shall be taken from funds appropriated 
        to carry out this title.
            ``(5) States and units of general local government.--After 
        reserving amounts under paragraphs (1) through (4), the 
        Secretary shall allocate funds approved in an appropriations 
        Act to carry out this title pursuant to the first sentence of 
section 205 by formula as provided in subsection (b). Of the funds made 
available under the preceding sentence, the Secretary shall initially 
allocate 60 percent among units of general local government and 40 
percent among States.''.
    (b) Criteria for Direct Reallocation.--Section 217 of such Act is 
amended by striking subsection (c) and redesignating subsection (d) as 
subsection (c).
    (c) Reallocations.--Section 217(c) of such Act, as redesignated by 
subsection (b), is amended--
            (1) by striking paragraph (1) and redesignating the 
        remaining paragraphs accordingly; and
            (2) by amending paragraph (2), as redesignated, to read as 
        follows:
            ``(2) Limitation.--Unless otherwise specified in this 
        subtitle, any funds from a State which are added to the 
        challenge grant fund shall be awarded only to participating 
        States, and any funds added to such fund from units of general 
        local government shall be awarded only to participating units 
        of general local government.''.

SEC. 29. HOME INVESTMENT TRUST FUNDS.

    (a) Line of Credit.--Section 218(b) of such Act is amended--
            (1) in paragraph (1), by striking ``, and'' and inserting a 
        semicolon;
            (2) in paragraph (2), by striking the period and inserting 
        ``; and''; and
            (3) by adding the following new paragraph:
            ``(3) funds awarded from the challenge grant fund under 
        section 223(c).''.
    (b) Reductions.--Section 218(c) of such Act is amended--
            (1) in paragraph (1), by striking the comma and inserting a 
        semicolon;
            (2) in paragraph (2), by striking ``, and'' and inserting a 
        semicolon;
            (3) in paragraph (3), by striking ``section 224.'' and 
        inserting ``section 223(b); and''; and
            (4) by adding at the end the following new paragraph:
            ``(4) funds pledged for repayment of notes, trust 
        certificates, or other obligations guaranteed under section 227 
        which are drawn by the Secretary in accordance with section 
        227(d) or (f).''.
    (c) Expiration of Right To Draw Funds.--The last sentence of 
section 218(g) of such Act is amended by striking ``shall reallocate 
the funds by formula in accordance with section 217(d)'' and inserting 
``shall add the funds to the challenge grant fund under section 
223(c)''.

SEC. 30. REPAYMENT OF INVESTMENT; MATCHING REQUIREMENTS.

    (a) Repayment of Investment.--Section 219 of such Act is amended--
            (1) in subsection (a), by striking ``shall be reallocated 
        in accordance with section 217(d)'' and inserting ``shall be 
        added to the challenge grant fund under section 223(c)''; and
            (2) in subsection (b), by striking ``shall be reallocated 
        in accordance with section 217(d)'' and inserting ``shall be 
        added to the challenge grant fund under section 223(c)''.
    (b) Matching Requirements.--Section 220(a) of such Act is amended 
by striking ``fiscal'' both places it appears and inserting 
``program''.

SEC. 31. DISTRIBUTION OF ASSISTANCE.

    Section 222(b) of such Act is amended--
            (1) in the first sentence, by striking ``Participating 
        States'' and inserting ``(1) Participating states.--
        Participating States'';
            (2) by adding at the end the following new paragraph:
            ``(2) Assistance for colonias.--The States of Texas, New 
        Mexico, Arizona, and California shall invest not less than an 
        amount determined by the Secretary (which amount shall be up to 
        10 percent of the formula allocation amount) to meet the 
        housing needs of the residents of colonias.''; and
            (3) by adding at the end the following new subsection:
    ``(c) Assistance to Migrant Farmworkers.--State and local 
participating jurisdictions with significant migrant farmworker 
populations shall identify the housing needs and other needs of these 
populations in their consolidated plan and set aside funding under this 
title to address these needs.''.

SEC. 32. PERFORMANCE REVIEW AND SANCTIONS.

    Section 223 of such Act is amended--
            (1) by amending the title to read as follows:

``SEC. 223. REVIEW OF PERFORMANCE, PENALTIES FOR MISUSE OF FUNDS, AND 
              CHALLENGE GRANT FUND.'';

            (2) by striking ``If'' and inserting ``(b) Penalities for 
        Misuse of Funds.--If'' before ``If the Secretary'';
            (3) in subsection (b)(3), as designated by paragraph (2), 
        by striking ``or reallocations''; and
            (4) by adding the following new subsection before 
        subsection (b) as designated by paragraph (2):
    ``(a) Performance Reviews.--The Secretary shall, at least on an 
annual basis, make such reviews as may be necessary or appropriate to 
determine whether the participating jurisdiction has carried out its 
activities in a timely manner and whether it has carried out its 
activities and its consolidated plan in accordance with its 
certifications, the requirements of this title, and other applicable 
laws.''.

SEC. 33. CHALLENGE GRANT FUND.

    Section 223 of such Act, as amended by the previous section, is 
further amended by adding the following new subsection:
    ``(c) Challenge Grant Fund.--
            ``(1) In general.--From amounts appropriated under the 
        second sentence of section 205, the Secretary shall make 
        challenge grants to participating jurisdictions pursuant to a 
        performance agreement. States may apply on behalf of units of 
        general local government that do not qualify as participating 
        jurisdictions. The purpose of the grants is to support plans 
        for the revitalization of neighborhoods and other communities 
        by providing assistance for homeownership in homeownership 
        zones.
            ``(2) Eligibility for awards.--To be eligible to apply for 
        a challenge grant under paragraph (1), a participating 
        jurisdiction shall at minimum--
                    ``(A) meet the requirements of this title, as 
                determined by the Secretary under subsection (a);
                    ``(B) meet or exceed performance measures and 
                benchmarks included in its consolidated plan; and
                    ``(C) have targeted in its consolidated plan at 
                least one distressed or declining, predominantly 
                residential neighborhood as a homeownership zone (which 
                may be an empowerment zone, enterprise community, or 
                other distressed area) proposed for revitalization 
                through homeownership as the principal catalyst for 
                change, with assistance under this subsection.
            ``(3) Submission requirements.--The Secretary shall 
        establish submission requirements for participating 
        jurisdictions to include in their consolidated plans. Each 
        jurisdiction shall--
                    ``(A) identify the location of and describe the 
                proposed homeownership zone, which shall be within a 
                concentrated area that is covered by a comprehensive 
                plan to revitalize the neighborhood or other community 
                and be consistent with any requirements of the 
                Secretary relating to the zone's characteristics, such 
                as geography, level of distress, degree of 
                concentration, and number of units;
                    ``(B) identify how the activities to be carried out 
                under the revitalization plan will result in visible 
                improvement of, and have a major impact on, the 
                homeownership zone;
                    ``(C) demonstrate that the applicant has consulted 
                with, and received the support of, residents of the 
                proposed homeownership zone and that the residents will 
                be continuously involved throughout the implementation 
                period;
                    ``(D) describe a proposed local community 
                partnership, which shall--
                            ``(i) consist of public, nonprofit, and 
                        other private sector partners that agree to 
                        provide assistance to increase homeownership 
                        and provide other assistance to empower 
                        citizens and renew the neighborhood or other 
                        community through the revitalization plan; and
                            ``(ii) include commitments from the 
                        partners to carry out the plan;
                    ``(E) specify performance measures and benchmarks 
                for determining the success of the revitalization plan, 
                including how soon after approval construction will 
                start and be completed; and
                    ``(F) provide such other information as the 
                Secretary may require.
            ``(4) Distribution of awards.--The Secretary shall 
        establish a competitive method for distributing challenge 
        grants under this subsection.
            ``(5) Selection criteria.--The Secretary shall award 
        challenge grants under this subsection based on the following 
        selection criteria:
                    ``(A) The extent to which the jurisdiction has met 
                or exceeded the performance measures and benchmarks 
                established in its Consolidated Plan, and the extent to 
                which those measures and benchmarks were ambitious 
                compared to those of other comparable jurisdictions.
                    ``(B) The extent to which the homeownership zone 
                fits in with and furthers a larger comprehensive plan 
                for neighborhood revitalization.
                    ``(C) The extent to which there will be a major 
                impact on and visible improvement of the zone.
                    ``(D) The extent to which the jurisdiction has 
                consulted with and received the support of residents of 
                the proposed zone and the extent to which it will 
                continuously involve residents throughout the 
                implementation period.
                    ``(E) The extent to which the jurisdiction has 
                committed to removing local administrative impediments 
                to the success of the zone proposal.
                    ``(F) The extent to which the proposal specifies 
                ambitious and realistic performance measures and 
                benchmarks for determining success for activities under 
                this subsection.
                    ``(G) The extent to which the jurisdiction targets 
                low-income families, including first-time homebuyers.
                    ``(H) The extent of leveraging through private and 
                public resources.
                    ``(I) Other factors the Secretary determines 
                appropriate.
            ``(6) Eligible activities.--A recipient of assistance under 
        this subsection may use grant amounts only to provide 
        homeownership assistance in the homeownership zone. 
        Homeownership assistance may be used by participating 
        jurisdictions--
                    ``(A) to provide incentives to develop and support 
                affordable rental housing and homeownership 
                affordability through the acquisition, new 
                construction, reconstruction, or moderate or 
                substantial rehabilitation of affordable housing, 
                including real property acquisition, site improvement, 
                conversion, demolition, and other expenses, including 
                financing costs, relocation expenses of any displaced 
                persons, families, businesses, or organizations;
                    ``(B) to provide for the payment of reasonable 
                administrative and planning costs;
                    ``(C) for other activities in support of 
                homeownership that are specified or approved by the 
                Secretary; and
                    ``(D) to provide tenant-based rental assistance.
            ``(7) Eligible families.--Assistance may be provided for 
        families whose incomes do not exceed 115 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 
        115 percent 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.
            ``(8) Term of assistance; compliance with program 
        requirements.--The Secretary may provide assistance to permit a 
        jurisdiction to implement its revitalization plan over a period 
        of up to five years. For all or a portion of a grant under this 
        section, the Secretary may condition use of the grant, reduce 
        the amount of the grant, or cancel the grant, based on whether 
        the jurisdiction has made measurable, objective progress in 
        meeting the performance measures and benchmarks established in 
        the consolidated plan and has complied with the requirements of 
        the performance agreement entered into under this section.''.

SEC. 34. TENANT AND PARTICIPANT PROTECTIONS.

    Section 225(b) of such Act is amended to read as follows:
    ``(b) Termination of Tenancy.--An owner may terminate the tenancy 
of a tenant of rental housing assisted under this title in accordance 
with State law.''.

SEC. 35. LOAN GUARANTEES.

    Subtitle A of title II of such Act is amended by adding at the end 
the following new section:

``SEC. 227. LOAN GUARANTEES.

    ``(a) General Authority.--The Secretary is authorized, upon such 
terms and conditions as the Secretary may prescribe, to guarantee and 
make commitments to guarantee, only to such extent or in such amounts 
as provided in appropriations Acts, the notes or other obligations 
issued by eligible participating jurisdictions or by public agencies 
designated by and acting on behalf of eligible participating 
jurisdictions for purposes of financing (including credit enhancements 
and debt service reserves) the acquisition, new construction, 
reconstruction, or moderate or substantial rehabilitation of affordable 
housing (including real property acquisition, site improvement, 
conversion, demolition), and other expenses (including financing costs 
and relocation expenses of any displaced persons, families, businesses, 
or organizations). Housing funded under this section shall meet the 
requirements of this subtitle.
    ``(b) Requirements.--Notes or other obligations guaranteed under 
this section shall be in such form and denominations, have such 
maturities, and be subject to such conditions as may be prescribed by 
the Secretary. The Secretary may not deny a guarantee under this 
section on the basis of the proposed repayment period for the note or 
other obligation, unless the period is more than 20 years or the 
Secretary determines that the period otherwise causes the guarantee to 
constitute an unacceptable financial risk.
    ``(c) Limitations on Total Notes and Obligations.--No guarantee or 
commitment to guarantee shall be made with respect to any note or other 
obligation if the total outstanding notes or obligations guaranteed 
under this section on behalf of a participating jurisdiction (excluding 
any amount defeased under a contract entered into under subsection 
(e)(1)) would thereby exceed an amount equal to 5 times the amount of 
the participating jurisdiction's latest allocation under section 217.
    ``(d) Use of Program Funds.--Notwithstanding any other provision of 
this subtitle, funds allocated to the participating jurisdiction under 
this subtitle (including program income derived therefrom) are 
authorized for use by the participating jurisdiction or by the 
Secretary, in the payment of principal and interest due on the notes or 
other obligations guaranteed pursuant to this section and the payment 
of such servicing, underwriting, or other issuance or collection 
charges as may be specified by the Secretary.
    ``(e) Security Requirements.--To assure the full repayment of notes 
or other obligations guaranteed hereunder, as well as the issuance or 
collection charges specified by the Secretary under subsection (d), and 
as a prior condition for receiving such guarantees, the Secretary shall 
require the participating jurisdiction (and its designated public 
agency issuer, if any) to--
            ``(1) enter into a contract, in a form acceptable to the 
        Secretary, for repayment of such notes or other obligations and 
        the other specified charges;
            ``(2) pledge as security for such repayment any allocation 
        for which the participating jurisdiction may become eligible 
        under this subtitle; and
            ``(3) furnish, at the discretion of the Secretary, such 
        other security as may be deemed appropriate by the Secretary in 
        making such guarantees, which may include increments in local 
        tax receipts generated by the housing assisted under this 
        section or disposition proceeds from the sale of land or 
        housing.
    ``(f) Repayment Authority.--The Secretary is authorized, 
notwithstanding any other provision of this subtitle or any other 
Federal, State or local law, to apply allocations pledged pursuant to 
subsection (e) to any repayments due the United States as a result of 
such guarantees.
    ``(g) Guarantees.--The full faith and credit of the United States 
is pledged to the payment of all guarantees made under this section. 
Any such guarantee made by the Secretary shall be conclusive evidence 
of the eligibility of the notes or other obligations for such guarantee 
with respect to principal and interest, and the validity of any such 
guarantee so made shall be incontestable in the hands of a holder of 
the guaranteed obligations.
    ``(h) Taxable Obligations.--Obligations guaranteed under this 
section shall be subject to Federal taxation as provided in subsection 
(i).
    ``(i) Tax Status.--With respect to any obligation guaranteed 
pursuant to this section, the interest paid on such obligation shall be 
included in gross income for the purpose of the Internal Revenue Code 
of 1986.
    ``(j) Monitoring.--The Secretary shall monitor the use of 
guarantees under this section by eligible participating jurisdictions. 
If the Secretary finds that 50 percent of the aggregate guarantee 
authority for any fiscal year has been committed, the Secretary may 
impose limitations on the amount of guarantees any one participating 
jurisdiction may receive that year.
    ``(k) Guarantee of Trust Certificates.--
            ``(1) The Secretary is authorized, upon such terms and 
        conditions as the Secretary deems appropriate, to guarantee the 
        timely payment of the principal of and interest on such trust 
        certificates or other obligations as shall--
                    ``(A) be offered by the Secretary or by any other 
                offeror approved for purposes of this subsection by the 
                Secretary; and
                    ``(B) be based on and backed by a trust or pool 
                composed of notes or other obligations guaranteed or 
                eligible for guarantee by the Secretary under this 
                section.
            ``(2) To the same extent as provided in subsection (g), the 
        full faith and credit of the United States is pledged to the 
        payment of all amounts which may be required to be paid under 
        any guarantee by the Secretary under this subsection.
            ``(3) In the event the Secretary pays a claim under a 
        guarantee issued under this section, the Secretary shall be 
        subrogated fully to the rights satisfied by such payment.
            ``(4) No State or local law, and no Federal law, shall 
        preclude or limit the exercise by the Secretary of--
                    ``(A) the power to contract with respect to public 
                offerings and other sales of notes, trust certificates, 
                and other obligations guaranteed under this section, 
                upon such terms and conditions as the Secretary deems 
                appropriate;
                    ``(B) the right to enforce, by any means deemed 
                appropriate by the Secretary, any such contract; and
                    ``(C) the Secretary's ownership rights, as 
                applicable, in notes, certificates or other obligations 
                guaranteed under this section, or constituting the 
                trust or pool against which trust certificates or other 
                obligations guaranteed under this section are offered.
    ``(l) Aggregate Limitation.--The total amount of outstanding 
obligations guaranteed on a cumulative basis by the Secretary pursuant 
to subsection (a) shall not at any time exceed $2,000,000,000.''.

SEC. 36. HOUSING EDUCATION, ORGANIZATIONAL, AND OTHER SUPPORT.

    (a) In General.--Section 233(a) of such Act is amended by striking 
``The'' and inserting ``Of the amount available for each fiscal year 
under section 217(a)(2)(A), the''.
    (b) Eligible Activities.--Section 233(b) of such Act is amended by 
adding at the end the following new paragraphs:
            ``(8) Housing project costs.--Assistance under this section 
        may be used for housing project costs, in conjunction with 
        other capacity building activities under this section.
            ``(9) Capacity of nonprofits.--Assistance under this 
        section may be used for building the capacity of new and 
        existing nonprofit organizations.
            ``(10) Assistance to nonprofit organizations.--Assistance 
        under this section may be used for funding operating and 
        project expenses of new and existing nonprofit organizations 
        engaged in stabilizing and revitalizing low-income 
        neighborhoods or areas in accordance with the jurisdiction's 
        consolidated plan.
            ``(11) Other.--Such other activities that the Secretary 
        determines further the purposes of the subtitle.''.

SEC. 37. PRIORITIES FOR CAPACITY DEVELOPMENT.

    Section 242 of such Act is amended--
            (1) by striking ``To carry out section 241, the Secretary'' 
        and inserting ``(a) In General.--To carry out section 241, of 
the amount available for each fiscal year under section 217(a)(2)(A), 
the Secretary'';
            (2) in subsection (a), as redesignated--
                    (A) by striking ``and'' at the end of paragraph 
                (5);
                    (B) by striking the period at the end of paragraph 
                (6) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(7) improve the ability of States and units of general 
        local government, Community Housing Development Organizations, 
        and other nonprofit organizations, and for-profit developers of 
        low-income housing to carry out the provisions of this title 
        and other laws applicable to investments under this title.''; 
        and
            (3) by adding at the end of subsection (a), as designated 
        by paragraph (1), the following new subsection:
    ``(b) Sustainable Community Development.--Funds may also be 
provided for urban design and development and implementation of 
comprehensive plans that focus on local and metropolitan strategies 
which create sustainable community development at the neighborhood, 
city, and metropolitan level.''.

SEC. 38. CONDITIONS OF CONTRACTS.

    Section 243(a) of such Act is amended--
            (1) in paragraph (4), by striking ``or'' after the 
        semicolon;
            (2) in paragraph (5), by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end the following new paragraph:
            ``(6) a public or private college or university.''.

SEC. 39. OTHER ASSISTANCE.

    Section 244 of such Act is amended--
            (1) by amending the title to read as follows:

``SEC. 244. OTHER ASSISTANCE.'';

            (2) in the first sentence, by striking ``The'' and 
        inserting ``(a) Research in Housing Affordability.--Of the 
        amount available for each fiscal year under section 
        217(a)(2)(A), the''; and
            (3) by inserting after subsection (a), as designated by 
        paragraph (2), the following new subsections:
    ``(b) Performance Data.--Of the amount available for each fiscal 
year under section 217(a)(2)(B), the Secretary is authorized to 
establish a national database on local needs and program performance, 
to provide jurisdictions with computer software to plan and track 
performance, and to provide other support or services to facilitate the 
exchange of information under this subtitle among jurisdictions, 
community housing development organizations, other nonprofits, 
community members, and the Secretary.
    ``(c) Joint Grants to Educational Institutions and State and Local 
Governments.--Of the amount available for each fiscal year under 
section 217(a)(2)(A), the Secretary may use up to $5,000,000 to make 
grants to States and units of general local government and institutions 
of higher education having a demonstrated capacity to carry out 
eligible activities under this title, except that the Secretary may 
make a grant under this subsection only to a State or unit of general 
local government that jointly, with an institution of higher education, 
has prepared and submitted to the Secretary an application for such 
grant, as the Secretary shall by regulation require.
    ``(d) Community Outreach Partnership Act.--Of the amount available 
for each fiscal year under section 217(a)(3)(A), the Secretary may use 
up to $7,500,000 to carry out the Community Outreach Partnership Act of 
1992.
    ``(e) Lead Assistance.--Of the amount available for each fiscal 
year beginning in fiscal year 1998 under section 217(a)(3)(C), the 
Secretary is authorized to provide assistance to State and local 
governments to support lead research, technical studies, and education 
materials, concerning lead-based paint hazards, reduction and abatement 
of lead-based paint hazards, and childhood lead poisoning prevention 
activities.''.

SEC. 40. TERMINATION OF EXISTING PROGRAMS.

    Section 289 of such Act is amended by adding at the end the 
following new subsection:
    ``(d) Home Performance Fund Repealers.--
            ``(1) In general.--The following provisions of law are 
        hereby repealed:
                    ``(A) Title III, subtitle A, of the Cranston-
                Gonzalez National Affordable Housing Act, effective on 
                the date of enactment of this Act.
                    ``(B) Title IV, subtitles B and C, of the Cranston-
                Gonzalez National Affordable Housing Act, effective on 
                the date of enactment of this Act.
                    ``(C) Section 1011 of the Housing and Community 
                Development Act of 1992, effective on October 1, 1997.
            ``(2) Authority to provide assistance.--On and after the 
        effective date of such repeal, the Secretary may not make 
        assistance available under any of the authorities listed in 
        paragraph (1) (as they existed immediately before such 
        effective date), except pursuant to a legally binding 
        commitment entered into before that date.
            ``(3) Law governing.--Any amounts made available under any 
        authority listed in paragraph (1) before such effective date 
        shall continue to be governed by the provisions of such 
        authority, as they existed immediately before that date, except 
        that each jurisdiction may, in its discretion pursuant to 
        procedures established by the Secretary, provide for the use, 
        in accordance with the provisions of this title, of any such 
        amounts that it has not obligated under such authority. If the 
        grantee under any of these authorities is not the jurisdiction, 
        the grantee may, pursuant to procedures established by the 
        Secretary, transfer such unobligated funds to the jurisdiction 
        for use in accordance with the provisions of this title or 
        title I of the Housing and Community Development Act of 1974.
            ``(4) Status of funds.--Any amounts appropriated under any 
        authority listed in paragraph (1) before such effective date 
        that are available for obligation immediately before such date, 
        or that become available for obligation on or after that date, 
        shall be transferred and added to, and shall thereafter be 
        available for the purposes of, the appropriation account for 
        this title. Any amounts so transferred shall remain available 
        for obligation only for the time periods for which such 
        respective amounts were available before such transfer.''.

              TITLE II--DEVELOPING COMMUNITIES INITIATIVE

SEC. 51. BASIC AUTHORITY.

    (a) Purposes.--The Secretary may provide assistance in accordance 
with the provisions of this title to nonprofit organizations for the 
purposes of--
            (1) stimulating public and private investment in housing 
        and community development for disadvantaged and underserved 
        individuals in target communities under subsection (b);
            (2) making infrastructure, public health, and safety 
        improvements for such disadvantaged and underserved 
        individuals;
            (3) providing supportive services for such disadvantaged 
        and underserved individuals; and
            (4) developing the capacity of community development 
        corporations to undertake community development and affordable 
        housing projects for such disadvantaged and underserved 
        individuals.
    (b) Target Communities.--Assistance provided under this title shall 
be used, as determined by the Secretary in consultation with the 
Secretary of Agriculture, to assist disadvantaged and underserved 
individuals in communities requiring development due to factors such as 
severe, unmet housing needs, substandard housing, inadequate roads and 
drainage, substandard or the absence of water and sewer facilities, 
inadequate social support services, and inadequate governmental 
funding, including individuals such as--
            (1) residents of colonias;
            (2) farmworkers; and
            (3) Native Americans who are not being adequately served by 
        other programs, as determined by the Secretary.

SEC. 52. FUNDING.

    (a) Authorization of Appropriations.--The first sentence of section 
106(a)(1) of the Housing and Community Development Act of 1974 is 
amended by inserting before the period the following: ``; and of such 
approved amounts, the Secretary shall reserve $50,000,000 for fiscal 
year 1997 and such sums as may be necessary for fiscal years 1998, 
1999, and 2000 for the Developing Communities Initiative under title II 
of the Community Development Block Grant Performance Fund and HOME 
Performance Fund Act of 1996''.
    (b) Technical Assistance.--The Secretary may use up to 2 percent of 
the amounts available for use under this title in any fiscal year to 
provide technical assistance (through grant awards or directly) in 
conjunction with the administration of the program under this title.
    (c) Allocation of Funding Among Target Communities.--The Secretary 
shall publish a notice in the Federal Register describing how the 
Secretary has determined to allocate assistance under this title among 
the target communities, taking into account their relative need for 
assistance and other appropriate factors.
    (d) Allocation of Assistance for Planning Activities.--Of the 
amounts available for use under this title for each fiscal year, the 
Secretary may designate up to 25 percent for planning activities under 
section 53 of this Act.
    (e) Matching Requirement.--The Secretary, in consultation with the 
Secretary of Agriculture, shall establish the ratio of matching funds 
which a nonprofit organization shall provide from one or more sources 
other than the Developing Communities Initiative for use to carry out 
the activities specified in the application.

SEC. 53. PROGRAM ADMINISTRATION.

    (a) Application and Selection.--The Secretary, in consultation with 
the Secretary of Agriculture, shall prescribe procedures for the 
submission and selection of applications from nonprofit organizations.
    (b) Eligible Activities.--Assistance under this title may be used 
for--
            (1) planning, including the cost of planning community 
        development (including water and sewage facilities), housing 
        activities, and social support services; and
            (2) implementation, including capacity building of 
        organizations in the target communities, the development of 
        affordable housing opportunities, the development of housing 
        infrastructure, the construction of community facilities 
        intended to be used to provide supportive service activities, 
        the establishment of sinking funds, and the initial funding, 
        not to exceed two years, for supportive services.
    (c) Authority of Secretary.--The Secretary, in consultation with 
the Secretary of Agriculture, may prescribe such other requirements for 
providing assistance under this title as the Secretary determines to be 
appropriate.
    (d) Limitations.--
            (1) Time limit on completion of activities.--All activities 
        carried out with assistance provided under this title shall be 
        completed within two years (or within three years where 
        approved by the Secretary for good cause) of the date of 
        execution of the grant agreement by the grantee.
            (2) Maximum amount of assistance.--
                    (A) Planning.--Assistance for planning provided 
                under this title may not exceed $100,000 for each 
                application.
                    (B) Implementation.--Assistance for implementation 
                provided under this title may not exceed $2,000,000 for 
                each application.

SEC. 54. RECORDS, REPORTS, AND AUDITS.

    (a) Keeping of Records.--Each grantee shall keep such records as 
may be reasonably necessary to disclose the amounts and the disposition 
of amounts received under this title and to ensure compliance with the 
requirements of this title.
    (b) Reports.--Each grantee shall submit to the Secretary a report, 
or series of reports, in a form and at a time specified by the 
Secretary. Each report shall--
            (1) describe the use of assistance made available under 
        this title; and
            (2) describe and analyze the effect of assisted activities 
        in addressing the objectives of this title.
    (c) Access to Documents by the Secretary.--The Secretary shall have 
access for the purpose of audit and examination to any books, 
documents, papers, and records of each grantee that are pertinent to 
assistance received in connection with, and the requirements of, this 
title.
    (d) Access to Documents by the 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, of each grantee that are pertinent to assistance received 
under, and the requirements of, this title.

SEC. 55. DEFINITIONS.

    As used in this title--
            (1) The term ``colonia'' has the meaning given the term in 
        section 916(e) of the Cranston-Gonzalez National Affordable 
        Housing Act.
            (2) The term ``farmworkers'' has the meaning given the term 
        in section 514 of the Rural Housing Act.
            (3) The term ``grantee'' means a nonprofit organization 
        that receives assistance from the Secretary under this title.
            (4) The term ``Indian tribe'' or ``tribe'' means any Indian 
        tribe, band, nation, or other organized group or community of 
        Indians, including any Alaska Native Village, which is 
        recognized as eligible for the special programs and services 
        provided by the United States to Indians because of their 
        status as Indians pursuant to the Indian Self-Determination and 
        Education Assistance Act of 1975 (Public Law 92-638), as 
        amended.
            (5) The term ``Native American'' means any person who is a 
        member of an Indian tribe.
            (6) The term ``nonprofit organization'' means a private 
        organization--
                    (A) no title of the net earnings of which inures to 
                benefits of any member, founder, contributor, or 
                individual;
                    (B) that has a voluntary board;
                    (C) that has an accounting system, or has 
                designated a fiscal agent in accordance with 
                requirements established by the Secretary; and
                    (D) that practices nondiscrimination in the 
                provision of assistance.

                   TITLE III--MISCELLANEOUS PROGRAMS

SEC. 61. USE OF TECHNICAL ASSISTANCE FUNDS BY OR FOR HUD STAFF.

    Section 7 of the Department of Housing and Urban Development Act is 
amended by adding at the end the following new subsection:
    ``(t) The Secretary may transfer to any of the accounts of the 
Department for salaries and expenses from any other account from which 
funds may be drawn for capacity building and technical assistance such 
amounts, but not more than 10 percent of the amount available for 
capacity building and technical assistance in any one account, as the 
Secretary determines are reasonable to reimburse such salaries and 
expenses account. Such reimbursement shall be for expenditures for the 
costs of personal services, travel, and transportation, and other 
object classifications that are incurred for the capacity building, 
technical assistance, training, and related activities provided by or 
to officials and employees of the Department for a program that is 
funded from such other account and in which the costs of capacity 
building and technical assistance are otherwise eligible for 
expenditure. The authority to transfer provided in this subsection 
shall be in addition to any other authority to transfer funds among 
accounts that the Secretary may now or hereafter have.''.

SEC. 62. HUD RESEARCH AND DEVELOPMENT.

    The second sentence of section 501 of the Housing and Urban 
Development Act of 1970 is amended to read as follows: ``There are 
authorized to be appropriated to carry out this title $45,000,000 for 
fiscal year 1997 and such sums as may be necessary for fiscal years 
1998, 1999, and 2000.''.

SEC. 63. FAIR HOUSING INITIATIVES PROGRAM.

    Section 561(g) of the Housing and Community Development Act of 1987 
is amended to read as follows:
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the provisions of this section $15,000,000 
for fiscal year 1997, and such sums as may be necessary for fiscal 
years 1998, 1999, and 2000, of which--
            ``(1) not less than $10,500,000 for fiscal year 1997 and 
        such sums as may be necessary for fiscal years 1998, 1999, and 
        2000 shall be for private enforcement initiatives authorized 
        under subsection (b), divided equally between activities 
        specified under subsection (b)(1) and those specified under 
        subsection (b)(2);
            ``(2) not less than $2,700,000 for fiscal year 1997 and 
        such sums as may be necessary for fiscal years 1998, 1999, and 
        2000 shall be for fair housing enforcement organizations 
        authorized under subsection (c);
            ``(3) not less than $1,800,000 for fiscal year 1997 and 
        such sums as may be necessary for fiscal years 1998, 1999, and 
        2000 shall be for education and outreach programs authorized 
        under subsection (d); and
            ``(4) such sums as may be necessary for fiscal years 1998, 
        1999, and 2000 shall be for administrative enforcement.''.

SEC. 64. LEAD-BASED PAINT TARGET HOUSING HAZARD REDUCTION PROGRAM.

    The Residential Lead-Based Paint Hazard Reduction Act of 1992 is 
amended--
            (1) by striking section 1011(p) and inserting in lieu 
        thereof the following:
    ``(p) Authorization of Appropriations.--For the purposes of 
carrying out this Act, there are authorized to be appropriated 
$60,000,000 for fiscal year 1997.''; and
            (2) by striking section 1053 and inserting in lieu thereof 
        the following:

``SEC. 1053. AUTHORIZATION.

    ``Of the total amount approved in appropriation Acts under section 
1011(p), there shall be set aside to carry out this part $10,000,000 
for fiscal year 1997.''.
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