109
under this title. Notwithstanding any other provision of
this title, a local housing and management authority may
use grant amounts provided under this title in the amount
of the fee authorized under this section for such costs.
(b) AMOUNT.—The amount of the fee under sub-
section (a) for a grant for a fiscal year under any grant
agreement shall be equal to 6.0 percent of the total grant
amount provided to the local housing and management au-
thority for the fiscal year. The Secretary may increase the
fee if necessary to reflect the higher costs of administering
small programs and programs operating over large geo-
graphic areas.
SEC. 305. AUTHORIZATIONS OF APPROPRIATIONS.
There is authorized to be appropriated, for grants
under this title for providing housing assistance,
$862,000,000 for each of fiscal years 1996, 1997, 1998,
1999, and 2000.
SEC. 306. CONVERSION OF SECTION 8 ASSISTANCE.
Any amounts made available to a local housing and
management authority under a contract for annual con-
tributions for assistance under section 8 of the United
States Housing Act of 1937 (as in effect before the enact-
ment of this Act) that have not been obligated for such
assistance by such authority before such enactment shall
be used to provide assistance under this title, except to
110
the extent the Secretary determines such use is inconsist-
ent with existing commitments.
Subtitle B—Choice-Based Housing
Assistance for Eligible Families
SEC. 321. ELIGIBLE FAMILIES AND PREFERENCES FOR AS-
SISTANCE.
(a) LOW-INCOME REQUIREMENT.—Housing assist-
ance under this title may be provided only on behalf of
a family that—
(1) at the time that such assistance is initially
provided on behalf of the family and at the time of
the most recent review of the income of the family
for purposes of this title, is determined by the local
housing and management authority to be a low-in-
come family; or
(2) qualifies to receive such assistance under
any other provision of Federal law.
(b) REVIEWS OF FAMILY INCOMES.—
(1) IN GENERAL.—Reviews of family incomes
for purposes of this title shall be subject to the pro-
visions of section 904(e) of the Stewart B. McKin-
ney Homeless Assistance Amendments Act of 1988
and shall be conducted upon the initial provision of
housing assistance for the family and thereafter not
less than—
111
(A) once every 3 years, in the cases of el-
derly families and disabled families; and
(B) annually, in the case of nonelderly
families.
(2) PROCEDURES.—Each local housing and
management authority administering housing assist-
ance under this title shall establish procedures that
are appropriate and necessary to ensure that income
data provided to the authority and owners by fami-
lies applying for or receiving housing assistance from
the authority is complete and accurate.
(c) PREFERENCES FOR ASSISTANCE.—
(1) AUTHORITY
TO
ESTABLISH.—Any local
housing and management authority that receives
grant amounts under this title may establish a sys-
tem for making housing assistance available on be-
half of eligible families that provides preference for
such assistance to eligible families having certain
characteristics.
(2) CONTENT.—Each system of preferences es-
tablished pursuant to this subsection shall be based
upon local housing needs and priorities, as deter-
mined by the local housing and management author-
ity.
112
(d) TREATMENT OF ASSISTED FAMILIES WHO MOVE
OUT OF JURISDICTION OF LHMA.—A local housing and
management authority may, in the discretion of the agen-
cy and notwithstanding any preferences under subsection
(c), provide housing assistance for eligible families (or a
certain number of such families) who have moved into the
jurisdiction of the authority and on whose behalf such as-
sistance was being provided, at the time of such move, by
the authority for the jurisdiction from which the family
moved.
(e) TREATMENT
OF FAMILIES
ON WAITING LIST
WHO MOVE OUT OF JURISDICTION OF LHMA.—
(1) MOVE TO JURISDICTION WITH OPEN WAIT-
ING LIST.—Except as provided in paragraph (2), if
an eligible family (A) applies for choice-based hous-
ing assistance while residing within the jurisdiction
of a local housing and management authority, (B)
moves outside of the jurisdiction of the authority be-
fore such assistance is provided on behalf of the
family, and (C) applies for housing assistance from
the local housing and management authority for the
jurisdiction to which the family moves, such author-
ity shall consider the application to have been made
upon the date that the family applied for assistance
113
with the authority in whose jurisdiction the family
previously resided.
(2) MOVE
TO
JURISDICTION
WITH
CLOSED
WAITING LIST.—If the local housing and manage-
ment authority for the jurisdiction to which an eligi-
ble family described in paragraph (1) moves is not
generally accepting applications for housing assist-
ance, such jurisdiction shall accept the application of
such family but shall treat the application as having
been made on the date on which it is actually made.
(f) AUTHORITY TO DENY ASSISTANCE TO CERTAIN
FAMILIES WHO MOVE.—A local housing and management
authority may establish criteria for denying housing as-
sistance, and pursuant to such criteria may deny such as-
sistance, to an eligible family who has moved from the ju-
risdiction of another authority, who received housing as-
sistance from the authority for such other jurisdiction, and
whose assistance was terminated by such other authority
for reasons other than income ineligibility or the change
of residence.
SEC. 322. RESIDENT CONTRIBUTION.
(a) IN GENERAL.—An assisted family shall contrib-
ute on a monthly basis for the rental of an assisted dwell-
ing unit an amount that the local housing and manage-
114
ment authority determines is appropriate with respect to
the family and the unit, which shall be—
(1) based upon factors including the adjusted
income of the family, the type and size of the dwell-
ing unit, and any other factors that the authority
considers appropriate;
(2) not less than $50; and
(3) not more than the applicable payment
standard established under section 353 for the size
and type of the assisted dwelling unit for the area
in which the unit is located.
(b) RENTAL CONTRIBUTION FOR ELDERLY AND DIS-
ABLED FAMILIES.—In establishing the amount of monthly
rental contributions under this section for disabled fami-
lies and elderly families residing in assisted dwelling units,
a local housing and management authority shall waive the
applicability of any provision of subsection (a) that may
be necessary to establish such contributions that are rea-
sonable based on the adjusted incomes of such families.
SEC. 323. RENTAL INDICATORS.
(a) IN GENERAL.—The Secretary shall establish and
issue rental indicators under this section periodically, but
not less than annually, for existing rental dwelling units
that are eligible dwelling units. The Secretary shall estab-
lish and issue the rental indicators by housing market area
116
SEC. 324. LEASE TERMS.
Rental assistance may be provided for an eligible
dwelling unit only if the assisted family and the owner of
the dwelling unit enter into a lease for the unit that—
(1) has a lease term that is agreed to by the
owner and the assisted family;
(2) contains terms and conditions specifying
that termination of tenancy during the term of a
lease shall be subject to the provisions set forth in
section 325;
(3) is set forth in the standard form, which is
used in the local housing market area by the owner
and applies generally to any other tenants in the
property who are not assisted families, together with
any addendum necessary to include the many terms
required under this section; and
(4) contains other terms and conditions that
the local housing and management authority deter-
mines are appropriate.
SEC. 325. TERMINATION OF TENANCY.
(a) GENERAL GROUNDS FOR TERMINATION OF TEN-
ANCY.—Each housing assistance payments contract under
section 351 shall provide that the owner of any assisted
dwelling unit assisted under the contract may, before expi-
ration of a lease for a unit, terminate the tenancy of any
tenant of the unit, but only for—
117
(1) violation of the terms and conditions of the
lease, violation of applicable Federal, State, or local
law, or other good cause; or
(2) any activity, engaged in by the tenant, any
member of the tenant’s household, or any guest or
other person under the tenant’s control (regardless
of whether the resident had actual knowledge of
such activity), that—
(A) threatens the health or safety of, or
right to peaceful enjoyment of the premises by,
other tenants or employees of the owner or
manager of the housing;
(B) threatens the health or safety of, or
right to peaceful enjoyment of their residences
by, persons residing in the immediate vicinity of
the premises; or
(C) is criminal activity (including drug-re-
lated criminal activity).
(b) MANNER OF TERMINATION.—Each housing as-
sistance payments contract shall provide that the owner
shall conduct the termination of tenancy of any tenant of
an assisted dwelling unit under the contract in accordance
with applicable State or local laws, including providing any
notice of termination required under such laws.
118
SEC. 326. ELIGIBLE OWNERS.
(a) OWNERSHIP ENTITY.—Rental assistance under
this title may be provided for any eligible dwelling unit
for which the owner is any public agency, private person
or entity (including a cooperative), nonprofit organization,
agency of the Federal Government, or local housing and
management authority.
(b) INELIGIBLE
OWNERS.—Notwithstanding sub-
section (a), a local housing and management authority
may not provide rental assistance under this title for the
rental of a dwelling unit if the owner of the unit is
debarred, suspended, or subject to limited denial of par-
ticipation under part 24 of title 24, Code of Federal Regu-
lations.
SEC. 327. SELECTION OF DWELLING UNITS.
The determination of the dwelling unit in which an
assisted family resides and for which housing assistance
is provided under this title shall be made solely by the
assisted family, subject to the provisions of this title.
SEC. 328. ELIGIBLE DWELLING UNITS.
(a) IN GENERAL.—A dwelling unit shall be an eligible
dwelling unit for purposes of this title only if the local
housing and management authority to provide housing as-
sistance for the dwelling unit—
(1) determines that the dwelling unit is an ex-
isting dwelling unit that is not located within a nurs-
119
ing home or the grounds of any penal, reformatory,
medical, mental, or similar public or private institu-
tion;
(2) determines that the dwelling unit com-
plies—
(A) with applicable State or local laws,
regulations, standards, or codes regarding hab-
itability of residential dwellings that—
(i) are in effect for the jurisdiction in
which the dwelling unit is located;
(ii) provide protection to residents of
the dwellings that is equal to or greater
than the protection provided under the
housing 
quality 
standards 
established
under subsection (b); and
(iii) that do not severely restrict hous-
ing choice; or
(B) in the case of a dwelling unit located
in a jurisdiction which does not have in effect
laws, regulations, standards, or codes described
in subparagraph (A), with the housing quality
standards established under subsection (b); and
(3) makes the determinations required under
paragraphs (1) and (2) pursuant to an inspection of
120
the dwelling unit conducted before any assistance
payment is made for the unit.
Each local housing and management authority providing
housing assistance shall identify, in the community im-
provement plan for the authority, whether the authority
is utilizing the standard under subparagraph (A) or (B)
of paragraph (2) and, if the authority utilizes the standard
under subparagraph (A), shall certify in such plan that
the applicable State or local laws, regulations, standards,
or codes comply with the requirements under such sub-
paragraph.
(b) FEDERAL HOUSING QUALITY STANDARDS.—The
Secretary shall establish housing quality standards under
this subsection that ensure that assisted dwelling units are
safe, clean, and healthy. Such standards shall include re-
quirements relating to habitability, including maintenance,
health and sanitation factors, condition, and construction
of dwellings, and shall, to the greatest extent practicable,
be consistent with the standards established under section
233(b). The Secretary shall differentiate between major
and minor violations of such standards.
(c) ANNUAL INSPECTIONS.—Each local housing and
management authority providing housing assistance shall
make an annual inspection of each assisted dwelling unit
during the term of the housing assistance payments con-
121
tracts for the unit to determine whether the unit is main-
tained in accordance with the requirements under sub-
section (a)(2). The authority shall submit the results of
such inspections to the Secretary and the Inspector Gen-
eral for the Department of Housing and Urban Develop-
ment and such results shall be available to the Housing
Foundation and Accreditation Board established under
title IV and any auditor conducting an audit under section
432.
(d) INSPECTION GUIDELINES.—The Secretary shall
establish procedural guidelines and performance standards
to facilitate inspections of dwelling units and conform such
inspections with practices utilized in the private housing
market. Such guidelines and standards shall take into con-
sideration variations in local laws and practices of local
housing and management authorities and shall provide
flexibility to authorities appropriate to facilitate efficient
provision of assistance under this title.
(e) RULE OF CONSTRUCTION.—This section may not
be construed to prevent the provision of housing assistance
in connection with supportive services for elderly or dis-
abled families.
SEC. 329. HOMEOWNERSHIP OPTION.
(a) IN GENERAL.—A local housing and management
authority providing housing assistance under this title
122
may provide homeownership assistance to assist eligible
families to purchase a dwelling unit.
(b) REQUIREMENTS.—A local housing and manage-
ment authority providing homeownership assistance under
this section shall, as a condition of an eligible family re-
ceiving such assistance, require the family to—
(1) demonstrate that the family has income
from employment or other sources (other than public
assistance), as determined in accordance with re-
quirements established by the authority; and
(2) meet any other initial or continuing require-
ments established by the local housing and manage-
ment authority.
(c) DOWNPAYMENT REQUIREMENT.—A local housing
and management authority may establish minimum down-
payment requirements, if appropriate, in connection with
loans made for the purchase of dwelling units for which
homeownership assistance is provided under this section.
SEC. 330. ADMINISTRATIVE GRIEVANCE PROCEDURE.
Each local housing and management authority pro-
viding housing assistance with grant amounts under this
title shall establish and implement an administrative griev-
ance procedure under which assisted families will have an
opportunity for disposition of grievances concerning ad-
verse housing management authority actions.
123
Subtitle C—Payment of Housing
Assistance on Behalf of Assisted
Families
SEC. 351. HOUSING ASSISTANCE PAYMENTS CONTRACTS.
(a) IN GENERAL.—Each local housing and manage-
ment authority that receives amounts under a grant agree-
ment may enter into housing assistance payments con-
tracts with owners of existing dwelling units to make hous-
ing assistance payments to such owners in accordance with
this title.
(b) LHMA ACTING AS OWNER.—A local housing and
management authority may enter into a housing assist-
ance payments contract to make housing assistance pay-
ments under this title to itself (or any agency or instru-
mentality thereof) as the owner of dwelling units, and the
authority shall be subject to the same requirements that
are applicable to other owners.
(c) PROVISIONS.—Each housing assistance payments
contract shall—
(1) have a term of not less than 1 month nor
more than 24 months;
(2) require that the assisted dwelling unit may
be rented only pursuant to a lease that complies
with the requirements of section 324;
124
(3) comply with the requirements of section 325
(relating to termination of tenancy);
(4) require the owner to maintain the dwelling
unit in accordance with the applicable standards
under section 328(a)(2); and
(5) provide that the screening and selection of
eligible families for assisted dwelling units shall be
the function of the owner.
SEC. 352. AMOUNT OF MONTHLY ASSISTANCE PAYMENT.
The amount of the monthly assistance payment for
housing assistance under this title on behalf of an assisted
family shall be as follows:
(1) UNITS
HAVING
GROSS
RENT
LESS
THAN
PAYMENT
STANDARD.—In the case of a dwelling
unit bearing a gross rent that does not exceed the
payment standard established under section 353 for
a dwelling unit of the applicable size and located in
the market area in which such assisted dwelling unit
is located, the amount by which the gross rent for
the dwelling unit exceeds the amount of the resident
contribution determined in accordance with section
322.
(2) UNITS
HAVING
GROSS
RENT
EXCEEDING
PAYMENT
STANDARD.—In the case of a dwelling
unit bearing a gross rent that exceeds the payment
125
standard established under section 353 for a dwell-
ing unit of the applicable size and located in the
market area in which such assisted dwelling unit is
located, the amount by which such payment stand-
ard exceeds the amount of the resident contribution
determined in accordance with section 322.
SEC. 353. PAYMENT STANDARDS.
(a) ESTABLISHMENT.—Each local housing and man-
agement authority providing housing assistance under this
title shall establish payment standards under this section
for various areas, and sizes and types of dwelling units,
for use in determining the amount of monthly housing as-
sistance payment to be provided on behalf of assisted fami-
lies.
(b) USE
OF RENTAL INDICATORS.—The payment
standards for each market area and size and type of hous-
ing shall be based on rental indicators established under
section 323 for such area, size, and type.
SEC. 354. REASONABLE RENTS.
(a) ESTABLISHMENT.—The rent charged for a dwell-
ing unit for which rental assistance is provided under this
title shall be established pursuant to negotiation and
agreement between the assisted family and the owner of
the dwelling unit.
(b) REASONABLENESS.—
126
(1) DETERMINATION.—A local housing and
management authority providing rental assistance
under this title for a dwelling unit shall, before com-
mencing assistance payments for a unit, determine
whether the rent charged for the unit exceeds the
rents charged for comparable units in the applicable
private unassisted market.
(2) UNREASONABLE RENTS.—If the authority
determines that the rent charged for a dwelling unit
exceeds such comparable rents, the authority—
(A) shall inform the assisted family renting
the unit that such rent exceeds the rents for
comparable unassisted units in the market; and
(B) may refuse to provide housing assist-
ance payments for such unit.
SEC. 355. PROHIBITION OF ASSISTANCE FOR VACANT
RENTAL UNITS.
If an assisted family vacates a dwelling unit for which
rental assistance is provided under a housing assistance
payments contract before the expiration of the term of the
lease for the unit, rental assistance pursuant to such con-
tract may not be provided for the unit after the month
during which the unit was vacated.
127
SEC. 356. PROHIBITION OF PORTABILITY.
If an assisted family moves outside of the jurisdiction
of the local housing and management authority providing
the housing assistance for the family, the authority may
not provide assistance for the new dwelling unit of the
family.
Subtitle D—General and
Miscellaneous Provisions
SEC. 371. DEFINITIONS.
For purposes of this title:
(1) ASSISTED DWELLING UNIT.—The term ‘‘as-
sisted dwelling unit’’ means a dwelling unit in which
an assisted family resides and for which housing as-
sistance payments are made under this title.
(2) ASSISTED
FAMILY.—The term ‘‘assisted
family’’ means an eligible family on whose behalf
housing assistance payments are made under this
title or who has been selected and approved for
housing assistance.
(3) CHOICE-BASED.—The term ‘‘choice-based’’
means, with respect to housing assistance, that the
assistance is not attached to a dwelling unit but can
be used for any eligible dwelling unit selected by the
eligible family.
(4) ELIGIBLE DWELLING UNIT.—The term ‘‘eli-
gible dwelling unit’’ means a dwelling unit that com-
128
plies with the requirements under section 328 for
consideration as an eligible dwelling unit.
(5) ELIGIBLE
FAMILY.—The term ‘‘eligible
family’’ means a family that meets the requirements
under section 321(a) for assistance under this title.
(6) GRANT
AGREEMENT.—The term ‘‘grant
agreement’’ means an agreement under section 302
between the Secretary and a local housing and man-
agement authority for the Secretary to provide grant
amounts for housing assistance under this title.
(7) HOMEOWNERSHIP ASSISTANCE.—The term
‘‘homeownership assistance’’ means housing assist-
ance provided under section 329 for the ownership
of a dwelling unit.
(8) HOUSING ASSISTANCE.—The term ‘‘housing
assistance’’ means assistance provided under this
title on behalf of low-income families for the rental
or ownership of an eligible dwelling unit.
(9) HOUSING
ASSISTANCE
PAYMENTS
CON-
TRACT.—The term ‘‘housing assistance payments
contract’’ means a contract under section 351 be-
tween a local housing and management authority (or
the Secretary) and an owner to make housing assist-
ance payments under this title to the owner on be-
half of an assisted family.
129
(10) LOCAL HOUSING AND MANAGEMENT AU-
THORITY.—The terms ‘‘local housing and manage-
ment authority’’ and ‘‘authority’’ have the meaning
given such terms in section 103, except that the
terms include—
(A) a consortia of local housing and man-
agement authorities that the Secretary deter-
mines has the capacity and capability to admin-
ister a program for housing assistance under
this title in an efficient manner;
(B) any other entity that, upon the date of
the enactment of this Act, was administering
any program for tenant-based rental assistance
under section 8 of the United States Housing
Act of 1937 (as in effect before the enactment
of this Act); and
(C) with respect to any area in which no
local housing and management authority has
been organized or where the Secretary deter-
mines that a local housing and management au-
thority is unwilling or unable to implement this
title, or is not performing effectively—
(i) the Secretary or another entity
that by contract agrees to receive grant
amounts under this title and enter into
130
housing assistance payments contracts
with owners and perform the other func-
tions of local housing and management au-
thority under this title; or
(ii) notwithstanding any provision of
State or local law, a local housing and
management authority for another area
that contracts with the Secretary to ad-
minister a program for housing assistance
under this title, without regard to any oth-
erwise applicable limitations on its area of
operation.
(11) OWNER.—The term ‘‘owner’’ means the
person or entity having the legal right to lease or
sublease dwelling units. Such term includes any
principals, general partners, primary shareholders,
and other similar participants in any entity owning
a multifamily housing project, as well as the entity
itself.
(12) RENT.—The terms ‘‘rent’’ and ‘‘rental’’
include, with respect to members of a cooperative,
the charges under the occupancy agreements be-
tween such members and the cooperative.
131
(13) RENTAL ASSISTANCE.—The term ‘‘rental
assistance’’ means housing assistance provided
under this title for the rental of a dwelling unit.
SEC. 372. RENTAL ASSISTANCE FRAUD RECOVERIES.
(a) 
AUTHORITY
TO
RETAIN
RECOVERED
AMOUNTS.—The Secretary shall permit local housing and
management authorities administering housing assistance
under this title to retain, out of amounts obtained by the
authorities from tenants that are due as a result of fraud
and abuse, an amount (determined in accordance with reg-
ulations issued by the Secretary) equal to the greater of—
(1) 50 percent of the amount actually collected;
or
(2) the actual, reasonable, and necessary ex-
penses related to the collection, including costs of in-
vestigation, legal fees, and collection agency fees.
(b) USE.—Amounts retained by an authority shall be
made available for use in support of the affected program
or project, in accordance with regulations issued by the
Secretary. If the Secretary is the principal party initiating
or sustaining an action to recover amounts from families
or owners, the provisions of this section shall not apply.
(c) RECOVERY.—Amounts may be recovered under
this section—
132
(1) by an authority through a lawsuit (including
settlement of the lawsuit) brought by the authority
or through court-ordered restitution pursuant to a
criminal proceeding resulting from an authority’s in-
vestigation where the authority seeks prosecution of
a family or where an authority seeks prosecution of
an owner;
(2) through administrative repayment agree-
ments with a family or owner entered into as a re-
sult of an administrative grievance procedure con-
ducted by an impartial decisionmaker in accordance
with section 330; or
(3) through an agreement between the parties.
Subtitle E—Provisions Relating to
Discontinued 
HUD-Adminis-
tered 
Programs 
for 
Project-
Based Assistance
SEC. 381. PROHIBITION OF DISCRIMINATION IN SUB-
SIDIZED PROJECTS.
(a) IN GENERAL.—No owner of a subsidized project
shall refuse to lease any available dwelling unit in any such
project of such owner that rents for an amount not greater
than the applicable rental indicator for a comparable unit,
as determined under section 305, to an assisted family
under this title, a proximate cause of which is the status
133
of such prospective tenant as an assisted family, and to
enter into a housing assistance payments contract respect-
ing such unit.
(b) DEFINITION.—For purposes of this section, the
term ‘‘subsidized project’’ has the meaning given the term
in section 203(b) of the Housing and Community Develop-
ment Amendments of 1978.
TITLE IV—ACCREDITATION AND
OVERSIGHT OF LOCAL HOUS-
ING AND MANAGEMENT AU-
THORITIES
Subtitle A—Housing Foundation
and Accreditation Board
SEC. 401. ESTABLISHMENT.
There is established an independent agency in the ex-
ecutive branch of the Government to be known as the
Housing Foundation and Accreditation Board (in this title
referred to as the ‘‘Board’’).
SEC. 402. MEMBERSHIP.
(a) IN GENERAL.—The Board shall be composed of
12 members appointed by the President not later than 180
days after the date of the enactment of this Act, as fol-
lows:
134
(1) 4 members shall be appointed from among
10 individuals recommended by the Secretary of
Housing and Urban Development.
(2) 4 members shall be appointed from among
10 individuals recommended by the Chairman and
Ranking Minority Member of the Committee on
Banking, Housing, and Urban Affairs of the Senate.
(3) 4 members appointed from among 10 indi-
viduals recommended by the Chairman and Ranking
Minority Member of the Committee on Banking and
Financial Services of the House of Representatives.
(b) QUALIFICATIONS.—
(1) REQUIRED REPRESENTATION.—The Board
shall at all times have the following members:
(A) 2 members who are residents of public
housing or dwelling units assisted under title
III of this Act or the provisions of section 8 of
the United States Housing Act of 1937 (as in
effect before the enactment of this Act).
(B) 2 members who are executive directors
of local housing and management authorities.
(C) 1 member who is a member of the In-
stitute of Real Estate Managers.
(D) 1 member who is the owner of a multi-
family housing project assisted under a pro-
135
gram administered by the Secretary of Housing
and Urban Development.
(2) REQUIRED EXPERIENCE.—The Board shall
at all times have as members individuals with the
following experience:
(A) At least 1 individual who has extensive
experience in the residential real estate finance
business.
(B) At least 1 individual who has extensive
experience in operating a nonprofit organization
that provides affordable housing.
(C) At least 1 individual who has extensive
experience in construction of multifamily hous-
ing.
(D) At least 1 individual who has extensive
experience in the management of a community
development corporation.
A single member of the board with the appropriate
experience may satisfy the requirements of more
than 1 subparagraph of this paragraph. A single
member of the board with the appropriate qualifica-
tions and experience may satisfy the requirements of
a subparagraph of paragraph (1) and a subpara-
graph of this paragraph.
136
(c) POLITICAL AFFILIATION.—Not more than 6
members of the Board may be of the same political party.
(d) TERMS.—
(1) IN GENERAL.—Each member of the Board
shall be appointed for a term of 4 years, except as
provided in paragraphs (2) and (3).
(2) TERMS OF INITIAL APPOINTEES.—As des-
ignated by the President at the time of appointment,
of the members first appointed—
(A) 3 shall be appointed for terms of 1
year;
(B) 3 shall be appointed for terms of 2
years;
(C) 3 shall be appointed for terms of 3
years; and
(D) 3 shall be appointed for terms of 4
years;
(3) VACANCIES.—Any member appointed to fill
a vacancy occurring before the expiration of the
term for which the member’s predecessor was ap-
pointed shall be appointed only for the remainder of
that term. A member may serve after the expiration
of that member’s term until a successor has taken
office. A vacancy in the Board shall be filled in the
137
manner in which the original appointment was
made.
(e) CHAIRPERSON.—The Board shall elect a chair-
person from among members of the Board.
(f) QUORUM.—A majority of the members of the
Board shall constitute a quorum for the transaction of
business.
(g) VOTING.—Each member of the Board shall be en-
titled to 1 vote, which shall be equal to the vote of every
other member of the Board.
(h) PROHIBITION ON ADDITIONAL PAY.—Members of
the Board shall serve without compensation, but shall be
reimbursed for travel, subsistence, and other necessary ex-
penses incurred in the performance of their duties as
members of the Board.
SEC. 403. FUNCTIONS.
The purpose of this subtitle is to establish the Board
as a nonpolitical entity to carry out the following func-
tions:
(1) EVALUATION
OF
DEEP
SUBSIDY
PRO-
GRAMS.—Measuring the performance and efficiency
of all ‘‘deep subsidy’’ programs for housing assist-
ance administered by the Secretary of Housing and
Urban Development, including the public housing
program under title II and the programs for tenant-
138
and project-based rental assistance under title III
and section 8 of the United States Housing Act of
1937 (as in effect before the enactment of this Act).
(2) ESTABLISHMENT OF LHMA PERFORMANCE
BENCHMARKS.—Establishing standards and guide-
lines under section 431 for use by the Secretary in
measuring the performance and efficiency of local
housing and management authorities and other own-
ers and providers of federally assisted housing in
carrying out operational and financial functions.
(3) ESTABLISHMENT OF FINANCIAL AND PER-
FORMANCE
AUDIT
REQUIREMENTS.—Establishing
standards, requirements, and procedures for per-
formance and evaluation audits under section 432
and independent auditors conducting such audits.
(4) ACCREDITATION OF LHMA’S.—Establishing
a procedure under section 431(b) for accrediting
local housing and management authorities to receive
block grants under title I for the operation, mainte-
nance, and production of public housing, ensuring
that financial and performance audits under such
section are conducted annually for each local hous-
ing and management authority, and reviewing such
audits for purposes of accreditation.
139
(5) INFORMATION
AND
TECHNICAL
ASSIST-
ANCE.—Providing 
information, 
continuing 
edu-
cational opportunities, and technical assistance to
public and private housing providers.
(6) ESTABLISHMENT OF SYSTEM FOR IDENTI-
FYING LHMA DYSFUNCTIONS.—Establishing a sys-
tem for identifying potential problems in the oper-
ations and financial functions of local housing and
management authorities at a time before such prob-
lems result in serious and complicated deficiencies.
(7) ESTABLISHMENT OF SYSTEMS.—Establish-
ing and making available to local housing and man-
agement authorities and other housing providers ef-
ficient systems to assist in managing housing, in-
cluding computer systems for financial, occupancy,
and other functions that facilitate audits, reviews,
and evaluations under this Act and model practices
and procedures to ensure compliance with the re-
quirements of section 231(a).
(8) OTHER
ACTIVITIES.—Carrying out such
other functions as may otherwise be provided under
law.
140
SEC. 404. INITIAL ESTABLISHMENT OF STANDARDS AND
PROCEDURES FOR LHMA COMPLIANCE.
(a) DEADLINE.—The Board shall establish the stand-
ards, guidelines, and procedures under sections 431 and
432 not later than the expiration of the 12-month period
beginning upon the completion of the appointment, under
section 402, of the initial members of the Board. Before
issuing such standards, guidelines, and procedures in final
form, the Board shall submit a copy to the Congress.
(b) PRIORITY OF INITIAL EVALUATIONS.—After or-
ganization of the Board and establishment of standards,
guidelines, and procedures under sections 431 and 432,
the Board shall commence evaluations under section
434(b) for the purpose of accrediting local housing and
management authorities and shall give priority to conduct-
ing evaluations of local housing and management authori-
ties that are designated as troubled public housing agen-
cies under section 6(j) of the United States Housing Act
of 1937 (as in effect before the date of the enactment of
this Act) pursuant to section 431(d).
SEC. 405. POWERS.
(a) HEARINGS.—The Board may, for the purpose of
carrying out this subtitle, hold such hearings and sit and
act at such times and places as the Board determines ap-
propriate.
141
(b) RULES
AND REGULATIONS.—The Board may
adopt such rules and regulations as may be necessary to
establish its procedures and to govern the manner of its
operations, organization, and personnel.
(c) ASSISTANCE FROM FEDERAL AGENCIES.—
(1) INFORMATION.—The Board may secure di-
rectly from any department or agency of the Federal
Government such information as the Board may re-
quire for carrying out its functions, including com-
munity improvement plans submitted to the Sec-
retary by local housing and management authorities
under title II. Upon request of the Board, any such
department or agency shall furnish such informa-
tion. The Board may acquire information directly
from local housing and management authorities to
the same extent the Secretary may acquire such in-
formation.
(2) GENERAL
SERVICES
ADMINISTRATION.—
The Administrator of General Services shall provide
to the Board, on a reimbursable basis, such adminis-
trative support services as the Board may request.
(3) DEPARTMENT OF HOUSING AND URBAN DE-
VELOPMENT.—Upon the request of the chairperson
of the Board, the Secretary of Housing and Urban
Development shall, to the extent possible and subject
142
to the discretion of the Secretary, detail any of the
personnel of the Department of Housing and Urban
Development, on a nonreimbursable basis, to assist
the Board in carrying out its functions under this
subtitle.
(d) MAILS.—The Board may use the United States
mails in the same manner and under the same conditions
as other Federal agencies.
(e) CONTRACTING.—The Board may, to such extent
and in such amounts as are provided in appropriations
Acts, enter into contracts with private firms, institutions,
and individuals for the purpose of conducting research or
surveys necessary to enable the Board to discharge its
functions under this subtitle.
(f) STAFF.—
(1) EXECUTIVE
DIRECTOR.—The Board shall
appoint an executive director of the Board, who shall
be compensated at a rate fixed by the Board, but
which shall not exceed the rate established for level
V of the Executive Schedule under title 5, United
States Code.
(2) OTHER PERSONNEL.—In addition to the ex-
ecutive director, the Board may appoint and fix the
compensation of such personnel as the Board consid-
ers necessary, in accordance with the provisions of
143
title 5, United States Code, governing appointments
to the competitive service, and the provisions of
chapter 51 and subchapter III of chapter 53 of such
title, relating to classification and General Schedule
pay rates. Such personnel may include personnel for
assessment teams under section 431(b).
SEC. 406. FEES.
(a) ACCREDITATION FEES.—The Board may estab-
lish and charge fees for the accreditation of local housing
and management authorities as the Board considers nec-
essary to cover the costs of the operations of the Board
relating to establishing standards, guidelines, and proce-
dures for evaluating the performance of local housing and
management authorities and performing comprehensive
reviews relating to the accreditation of such authorities.
(b) TECHNICAL ASSISTANCE FEES.—The Board may
establish and charges fees for providing information, tech-
nical assistance, and other products, including information
and systems provided under paragraphs (5) and (7) of sec-
tion 403, as the Board considers appropriate to cover the
costs of such activities.
(c) FUND.—Any fees collected under this section
shall be deposited in an operations fund for the Board,
which is hereby established in the Treasury of the United
States. Amounts in such fund shall be available, to the
144
extent provided in appropriation Acts, for the expenses of
the Board in carrying out its functions under this subtitle.
SEC. 407. REPORTS.
The Board shall submit a report to the Congress an-
nually describing, for the year for which the report is
made—
(1) any modifications made by the Board to the
standards, guidelines, and procedures issued under
section 431 and 432 by the Board;
(2) the results of the assessments, reviews, and
evaluations conducted by the Board under subtitle
B;
(3) the types and extent of assistance, informa-
tion, and products provided by the Board; and
(4) any other activities of the Board.
Subtitle 
B—Accreditation 
and
Oversight Standards and Proce-
dures
SEC. 431. ESTABLISHMENT OF PERFORMANCE BENCH-
MARKS AND ACCREDITATION PROCEDURES.
(a) PERFORMANCE BENCHMARKS.—
(1) 
PERFORMANCE
AREAS.—The 
Housing
Foundation and Accreditation Board established
under section 401 (in this subtitle referred to as the
‘‘Board’’) shall establish standards and guidelines,
145
for use under section 433 by the Secretary, to meas-
ure the performance of local housing and manage-
ment authorities in all aspects relating to—
(A) operational and financial functions;
(B) providing, maintaining, and assisting
low-income housing—
(i) that is safe, clean, and healthy, as
required under sections 233 and 328;
(ii) in a manner consistent with the
comprehensive housing affordability strat-
egy under section 105 of the Cranston-
Gonzalez National Affordable Housing Act;
(iii) that is occupied by eligible fami-
lies; and
(iv) that is affordable to eligible fami-
lies;
(C) producing low-income housing and exe-
cuting capital projects, if applicable;
(D) administering the provision of housing
assistance under title III;
(E) accomplishing the goals and plans set
forth in the community improvement plan for
the authority;
(F) promoting responsibility and self-suffi-
ciency among residents of public housing devel-
146
opments of the authority and assisted families
under title III; and
(G) complying with the other requirements
of the authority under block grant contracts
under title II, grant agreements under title III,
and the provisions of this Act.
(2) PERFORMANCE CATEGORIES.—In establish-
ing standards and guidelines under this section, the
Board shall define various levels of performance,
which shall include the following levels:
(A) EXCEPTIONALLY WELL-MANAGED.—A
minimum acceptable level of performance in the
areas specified in paragraph (1) for classifica-
tion of a local housing and management author-
ity as exceptionally well-managed, which shall
indicate that the authority functions exception-
ally.
(B) WELL-MANAGED.—A minimum accept-
able level of performance in the areas specified
in paragraph (1) for classification of a local
housing and management authority as well-
managed, which shall indicate that the author-
ity functions satisfactorily.
(C) TROUBLED.—A minimum level of per-
formance in the areas specified in paragraph
147
(1) for classification of a local housing and
management authority as a troubled authority,
which shall indicate that the authority functions
unsatisfactorily with respect to certain areas
under paragraph (1), but such deficiencies are
not irreparable.
(D) DYSFUNCTIONAL.—A maximum level
of performance in the areas specified in para-
graph (1) for classification of a local housing
and management authority as dysfunctional,
which shall indicate that the authority suffers
such deficiencies that the authority should not
be allowed to continue to manage low-income
housing or administer housing assistance.
(3) ACCREDITATION STANDARD.—In establish-
ing standards and guidelines under this section, the
Board shall establish a minimum acceptable level of
performance for accrediting a local housing and
management authority for purposes of authorizing
the authority to enter into a new block grant con-
tract under title II or a new grant agreement under
title III.
(b) ACCREDITATION PROCEDURE.—The Accredita-
tion Board shall establish procedures for—
148
(1) reviewing the performance of a local hous-
ing and management authority over the term of the
expiring accreditation, which review shall be con-
ducted during the 12-month period that ends upon
the conclusion of the term of the expiring accredita-
tion;
(2) evaluating the capability of a local housing
and management authority that proposes to enter
into an initial block grant contract under title II or
an initial grant agreement under title III; and
(3) determining whether the authority complies
with the standards and guidelines for accreditation
established under subsection (a)(3).
The procedures for a review or evaluation under this sub-
section shall provide for the review or evaluation to be con-
ducted by an assessment team established by the Board,
which shall review annual financial and performance au-
dits conducted under section 432 and obtain such informa-
tion as the Board may require.
(c) IDENTIFICATION OF POTENTIAL PROBLEMS.—
The standards and guidelines under subsection (a) and the
procedure under subsection (b) shall be established in a
manner designed to identify potential problems in the op-
erations, management, functioning of local housing and
149
management authorities at a time before such problems
result in serious and complicated deficiencies.
(d) INTERIM APPLICABILITY OF PHMAP.—Notwith-
standing any other provision of this subtitle, during the
period that begins on the date of the enactment of this
Act and ends upon the date of the effectiveness of final
regulations establishing the standards, guidelines, and
procedures required under this section and section 432,
the Secretary shall assess the management performance
of local housing and management authorities in the same
manner provided for public housing agencies pursuant to
section 6(j) of the United States Housing Act of 1937 (as
in effect immediately before the enactment of this Act)
and may take actions with respect to local housing and
management authorities that are authorized under such
section with respect to public housing agencies.
SEC. 432. ANNUAL FINANCIAL AND PERFORMANCE AUDIT.
(a) REQUIREMENT.—The Secretary shall require
each local housing and management authority that re-
ceives grant amounts under this Act in a fiscal year to
have a financial and performance audit of the authority
conducted for the fiscal year and to submit the results of
the audit to the Secretary and the Board.
(b) PROCEDURES.— The Accreditation Board shall
establish the requirements and procedures for such audits
150
under this section, in accordance with the requirements
under this section. Such procedures shall—
(1) provide for the audit to be conducted by an
independent auditor jointly selected by board and
authority;
(2) authorize the auditor and the Board to ob-
tain information from a local housing and manage-
ment authority, to access any books, documents, pa-
pers, and records of an authority that are pertinent
to this Act and assistance received pursuant to this
Act, and to review any reports of an authority to the
Secretary.
(3) be designed to identify potential problems in
the operations, management, functioning of a local
housing and management authority at a time before
such problems result in serious and complicated defi-
ciencies.
(c) PURPOSE.—Audits under this section shall be de-
signed to evaluate the financial performance and sound-
ness and management performance of the local housing
and management authority board of directors (or other
similar governing body) and the authority management of-
ficials and staff, assess the compliance of an authority
with all aspects of the standards and guidelines estab-
lished under section 431(a)(1), and provide information