H. R. 3700—18 
to continuation, termination, or expiration, and shall 
specify that upon termination or expiration of the con-
tract without extension, each assisted family may elect 
to use its assistance under this subsection to remain 
in the same project if its unit complies with the inspec-
tion requirements under paragraph (8), the rent for 
the unit is reasonable as required by paragraph (10)(A), 
and the family pays its required share of the rent 
and the amount, if any, by which the unit rent 
(including the amount allowed for tenant-based utili-
ties) exceeds the applicable payment standard.’’; 
(5) in subparagraph (G), by striking ‘‘15 years’’ and 
inserting ‘‘20 years’’; 
(6) by striking subparagraph (I) and inserting the following 
new subparagraph: 
‘‘(I) RENT ADJUSTMENTS.—A housing assistance pay-
ments contract pursuant to this paragraph entered into 
after the date of the enactment of the Housing Opportunity 
Through Modernization Act of 2016 shall provide for annual 
rent adjustments upon the request of the owner, except 
that— 
‘‘(i) by agreement of the parties, a contract may 
allow a public housing agency to adjust the rent for 
covered units using an operating cost adjustment factor 
established by the Secretary pursuant to section 524(c) 
of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (which shall not result in 
a negative adjustment), in which case the contract 
may require an additional adjustment, if requested, 
up to the reasonable rent periodically during the term 
of the contract, and shall require such an adjustment, 
if requested, upon extension pursuant to subparagraph 
(G); 
‘‘(ii) the adjusted rent shall not exceed the max-
imum rent permitted under subparagraph (H); 
‘‘(iii) the contract may provide that the maximum 
rent permitted for a dwelling unit shall not be less 
than the initial rent for the dwelling unit under the 
initial housing assistance payments contract covering 
the units; and 
‘‘(iv) the provisions of subsection (c)(2)(C) shall not 
apply.’’; 
(7) in subparagraph (J)— 
(A) in the first sentence— 
(i) by striking ‘‘shall’’ and inserting ‘‘may’’; and 
(ii) by inserting before the period the following: 
‘‘or may permit owners to select applicants from site- 
based waiting lists as specified in this subparagraph’’; 
(B) by striking the third sentence and inserting the 
following: ‘‘The agency or owner may establish preferences 
or criteria for selection for a unit assisted under this para-
graph that are consistent with the public housing agency 
plan for the agency approved under section 5A and that 
give preference to families who qualify for voluntary serv-
ices, including disability-specific services, offered in 
conjunction with assisted units.’’; and
H. R. 3700—19 
(C) by striking the fifth and sixth sentences and 
inserting the following: ‘‘A public housing agency may 
establish and utilize procedures for owner-maintained site- 
based waiting lists, under which applicants may apply 
at, or otherwise designate to the public housing agency, 
the project or projects in which they seek to reside, except 
that all eligible applicants on the waiting list of an agency 
for assistance under this subsection shall be permitted 
to place their names on such separate list, subject to poli-
cies and procedures established by the Secretary. All such 
procedures shall comply with title VI of the Civil Rights 
Act of 1964, the Fair Housing Act, section 504 of the 
Rehabilitation Act of 1973, and other applicable civil rights 
laws. The owner or manager of a project assisted under 
this paragraph shall not admit any family to a dwelling 
unit assisted under a contract pursuant to this paragraph 
other than a family referred by the public housing agency 
from its waiting list, or a family on a site-based waiting 
list that complies with the requirements of this subpara-
graph. A public housing agency shall disclose to each 
applicant all other options in the selection of a project 
in which to reside that are provided by the public housing 
agency and are available to the applicant.’’; 
(8) in subparagraph (M)(ii), by inserting before the period 
at the end the following: ‘‘relating to funding other than housing 
assistance payments’’; and 
(9) by adding at the end the following new subparagraphs: 
‘‘(N) STRUCTURE OWNED BY AGENCY.—A public housing 
agency engaged in an initiative to improve, develop, or 
replace a public housing property or site may attach assist-
ance to an existing, newly constructed, or rehabilitated 
structure in which the agency has an ownership interest 
or which the agency has control of without following a 
competitive process, provided that the agency has notified 
the public of its intent through its public housing agency 
plan and subject to the limitations and requirements of 
this paragraph. 
‘‘(O) SPECIAL PURPOSE VOUCHERS.—A public housing 
agency that administers vouchers authorized under sub-
section (o)(19) or (x) of this section may provide such assist-
ance in accordance with the limitations and requirements 
of this paragraph, without additional requirements for 
approval by the Secretary.’’. 
(b) EFFECTIVE DATE.—The Secretary of Housing and Urban 
Development shall issue notice or regulations to implement sub-
section (a) of this section and such subsection shall take effect 
upon such issuance. 
SEC. 107. ESTABLISHMENT OF FAIR MARKET RENT. 
(a) IN GENERAL.—Paragraph (1) of section 8(c) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(c)(1)) is amended— 
(1) by inserting ‘‘(A)’’ after the paragraph designation; 
(2) by striking the fourth, seventh, eighth, and ninth sen-
tences; and 
(3) by adding at the end the following: 
‘‘(B) Fair market rentals for an area shall be published not 
less than annually by the Secretary on the site of the Department
H. R. 3700—20 
on the World Wide Web and in any other manner specified by 
the Secretary. Notice that such fair market rentals are being pub-
lished shall be published in the Federal Register, and such fair 
market rentals shall become effective no earlier than 30 days after 
the date of such publication. The Secretary shall establish a proce-
dure for public housing agencies and other interested parties to 
comment on such fair market rentals and to request, within a 
time specified by the Secretary, reevaluation of the fair market 
rentals in a jurisdiction before such rentals become effective. The 
Secretary shall cause to be published for comment in the Federal 
Register notices of proposed material changes in the methodology 
for estimating fair market rentals and notices specifying the final 
decisions regarding such proposed substantial methodological 
changes and responses to public comments.’’. 
(b) PAYMENT STANDARD.—Subparagraph (B) of section 8(o)(1) 
of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(1)(B)) 
is amended by inserting before the period at the end the following: 
‘‘, except that no public housing agency shall be required as a 
result of a reduction in the fair market rental to reduce the payment 
standard applied to a family continuing to reside in a unit for 
which the family was receiving assistance under this section at 
the time the fair market rental was reduced. The Secretary shall 
allow public housing agencies to request exception payment stand-
ards within fair market rental areas subject to criteria and proce-
dures established by the Secretary’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall take effect upon the date of the enactment of this Act. 
SEC. 108. COLLECTION OF UTILITY DATA. 
Section 8(o) of the United States Housing Act of 1937 (42 
U.S.C. 1437f(o)) is amended by adding at the end the following 
new paragraph: 
‘‘(20) COLLECTION OF UTILITY DATA.— 
‘‘(A) PUBLICATION.—The Secretary shall, to the extent 
that data can be collected cost effectively, regularly publish 
such data regarding utility consumption and costs in local 
areas as the Secretary determines will be useful for the 
establishment of allowances for tenant-paid utilities for 
families assisted under this subsection. 
‘‘(B) USE OF DATA.—The Secretary shall provide such 
data in a manner that— 
‘‘(i) avoids unnecessary administrative burdens for 
public housing agencies and owners; and 
‘‘(ii) protects families in various unit sizes and 
building types, and using various utilities, from high 
rent and utility cost burdens relative to income.’’. 
SEC. 109. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS. 
(a) CAPITAL FUND REPLACEMENT RESERVES.—Section 9 of the 
United States Housing Act of 1937 (42 U.S.C. 1437g) is amended— 
(1) in subsection (j), by adding at the end the following 
new paragraph: 
‘‘(7) TREATMENT OF REPLACEMENT RESERVE.—The require-
ments of this subsection shall not apply to funds held in replace-
ment reserves established pursuant to subsection (n).’’; and 
(2) by adding at the end the following new subsection: 
‘‘(n) ESTABLISHMENT OF REPLACEMENT RESERVES.—
H. R. 3700—21 
‘‘(1) IN GENERAL.—Public housing agencies shall be per-
mitted to establish a replacement reserve to fund any of the 
capital activities listed in subsection (d)(1). 
‘‘(2) SOURCE
AND
AMOUNT
OF
FUNDS
FOR
REPLACEMENT 
RESERVE.—At any time, a public housing agency may deposit 
funds from such agency’s Capital Fund into a replacement 
reserve, subject to the following: 
‘‘(A) At the discretion of the Secretary, public housing 
agencies may transfer and hold in a replacement reserve 
funds originating from additional sources. 
‘‘(B) No minimum transfer of funds to a replacement 
reserve shall be required. 
‘‘(C) At any time, a public housing agency may not 
hold in a replacement reserve more than the amount the 
public housing authority has determined necessary to sat-
isfy the anticipated capital needs of properties in its port-
folio assisted under this section, as outlined in its Capital 
Fund 5-Year Action Plan, or a comparable plan, as deter-
mined by the Secretary. 
‘‘(D) The Secretary may establish, by regulation, a 
maximum replacement reserve level or levels that are 
below amounts determined under subparagraph (C), which 
may be based upon the size of the portfolio assisted under 
this section or other factors. 
‘‘(3) TRANSFER OF OPERATING FUNDS.—In first establishing 
a replacement reserve, the Secretary may allow public housing 
agencies to transfer more than 20 percent of its operating 
funds into its replacement reserve. 
‘‘(4) EXPENDITURE.—Funds in a replacement reserve may 
be used for purposes authorized by subsection (d)(1) and con-
tained in its Capital Fund 5-Year Action Plan. 
‘‘(5) MANAGEMENT AND REPORT.—The Secretary shall estab-
lish appropriate accounting and reporting requirements to 
ensure that public housing agencies are spending funds on 
eligible projects and that funds in the replacement reserve 
are connected to capital needs.’’. 
(b) FLEXIBILITY OF OPERATING FUND AMOUNTS.—Paragraph (1) 
of section 9(g) of the United States Housing Act of 1937 (42 U.S.C. 
1437g(g)(1)) is amended— 
(1) by striking ‘‘(1)’’ and all that follows through ‘‘—Of’’ 
and inserting the following: 
‘‘(1) FLEXIBILITY IN USE OF FUNDS.— 
‘‘(A) FLEXIBILITY
FOR
CAPITAL
FUND
AMOUNTS.—Of’’; 
and 
(2) by adding at the end the following new subparagraph: 
‘‘(B) FLEXIBILITY FOR OPERATING FUND AMOUNTS.—Of 
any amounts appropriated for fiscal year 2016 or any fiscal 
year thereafter that are allocated for fiscal year 2016 or 
any fiscal year thereafter from the Operating Fund for 
any public housing agency, the agency may use not more 
than 20 percent for activities that are eligible under sub-
section (d) for assistance with amounts from the Capital 
Fund, but only if the public housing plan under section 
5A for the agency provides for such use.’’.