the family was receiving assistance under this section at 
the time the fair market rental was reduced’’. 
SEC. 14. SCREENING OF APPLICANTS. 
Subparagraph (B) of section 8(o)(6) of the United 
States Housing Act of 1937 (1437f(o)(6)(B)) is amended by 
inserting after the period at the end of the second sentence 
the following: ‘‘A public housing agency’s elective screening 
shall be limited to criteria that are directly related to an 
applicant’s ability to fulfill the obligations of an assisted 
lease and shall consider mitigating circumstances related 
to such applicant. Any applicant or participant determined 
to be ineligible for admission or continued participation to 
the program shall be notified of the basis for such deter-
mination and provided, within a reasonable time after the 
determination, an opportunity for an informal hearing on 
such determination at which mitigating circumstances, in-
cluding remedial conduct subsequent to the notice, shall be 
considered.’’. 
SEC. 15. ENHANCED VOUCHERS. 
Subparagraph (B) of section 8(t)(1) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(t)(1)(B)) is 
amended by inserting after ‘‘eligibility event for the 
project,’’ the following: ‘‘regardless of unit and family size 
standards normally used by the administering agency (ex-
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cept that tenants may be required to move to units of appro-
priate size if available on the premises),’’. 
SEC. 16. HOUSING INNOVATION PROGRAM. 
(a) ESTABLISHMENT OF PROGRAM.—Title I of the 
United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) 
is amended by adding at the end the following new section: 
‘‘SEC. 36. HOUSING INNOVATION PROGRAM. 
‘‘(a) PURPOSE.—The purpose of the program under 
this section is to provide public housing agencies and the 
Secretary the flexibility to design and evaluate innovative 
approaches to providing housing assistance that— 
‘‘(1) increase housing opportunities for low-in-
come families, including preventing homelessness, re-
habilitate or replace housing at risk of physical dete-
rioration or obsolescence, and develop additional af-
fordable housing; 
‘‘(2) leverage other Federal, State, and local 
funding sources, including the low-income housing tax 
credit program, to expand and preserve affordable 
housing opportunities, including public housing; 
‘‘(3) provide financial incentives and other sup-
port mechanisms to families to obtain employment 
and increase earned income; 
‘‘(4) test alternative rent-setting policies to deter-
mine whether rent determinations can be simplified 
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and administrative cost savings can be realized while 
protecting extremely low- and very low-income fami-
lies from increased rent burdens; 
‘‘(5) are subject to rigorous evaluation to test the 
effectiveness of such innovative approaches; and 
‘‘(6) are developed with the support of the local 
community and with the substantial participation of 
affected residents. 
‘‘(b) PROGRAM AUTHORITY.— 
‘‘(1) SCOPE.—The Secretary shall carry out a 
housing innovation program under this section under 
which the Secretary may designate not more than 60 
public housing agencies to participate, at any one 
time, in the housing innovation program, in accord-
ance with subsections (c) and (d), except that, in ad-
dition to such 60 agencies, the Secretary may des-
ignate an additional 20 agencies to participate in the 
program under the terms of subsection (h). 
‘‘(2) DURATION.—The Secretary may carry out 
the housing innovation program under this section 
only during the 10-year period beginning on the date 
of the enactment of the Section 8 Voucher Reform Act 
of 2007. 
‘‘(c) PARTICIPATION OF EXISTING MTW AGENCIES.— 
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‘‘(1) EXISTING MTW AGENCIES.—Subject to the 
requirements of paragraph (2), all existing MTW 
agencies shall be designated to participate in the pro-
gram. 
‘‘(2) CONDITIONS OF PARTICIPATION.—The Sec-
retary shall approve and transfer into the housing in-
novation program under this section each existing 
MTW agency that the Secretary determines is not in 
default under such agreement and which the Sec-
retary also determines is meeting the goals and objec-
tives of its moving to work plan. Each such agency 
shall, within two years after the date of the enactment 
of the Section 8 Voucher Reform Act of 2007, make 
changes to its policies that were implemented before 
such date of enactment in order to comply with the 
requirements of this section. 
‘‘(d) ADDITIONAL AGENCIES.— 
‘‘(1) PROPOSALS; SELECTION PROCESS.—In ad-
dition to agencies participating in the program pur-
suant to subsection (c), the Secretary shall, within 18 
months after such date of enactment, select public 
housing agencies to participate in the program pursu-
ant to a competitive process that meets the following 
requirements: 
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‘‘(A) Any public housing agency may be se-
lected to participate in the program, except that 
not more than 5 agencies that are near-troubled 
under the public housing assessment system and/ 
or section 8 management assessment program 
may be selected, and except that any agency for 
which the Secretary has hired an alternative 
management entity for such agency or has taken 
possession of all or any part of such agency’s 
public housing program shall not be eligible for 
participation. Any near-troubled public housing 
agency participating in the program shall re-
main subject to the requirements of this Act gov-
erning tenant rent contributions, eligibility, and 
continued participation, and may not adopt 
policies described in subsection (e)(4) (relating to 
rents and requirements for continued occupation 
and participation). 
‘‘(B) The process provides, to the extent pos-
sible based on eligible agencies submitting appli-
cations and taking into account existing MTW 
agencies participating pursuant to subsection 
(c), for representation among agencies selected of 
agencies having various characteristics, includ-
ing both large and small agencies, agencies serv-
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ing urban, suburban, and rural areas, and agen-
cies in various geographical regions throughout 
the United States, and which may include the se-
lection of agencies that only administer the 
voucher program under section 8(o). 
‘‘(C) Any agency submitting a proposal 
under this paragraph shall have provided notice 
to residents and the local community, not later 
than 30 days before the first of the two public 
meetings required under subparagraph (D). 
‘‘(D) The agency submitting a proposal 
shall hold two public meetings to receive com-
ments on the agency’s proposed application, on 
the implications of changes under the proposal, 
and the possible impact on residents. 
‘‘(E) The process includes criteria for selec-
tion, as follows: 
‘‘(i) The extent to which the proposal 
generally identifies existing rules and regu-
lations that impede achievement of the goals 
and objectives of the proposal and an expla-
nation of why participation in the program 
is necessary to achieve such goals and objec-
tives. 
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‘‘(ii) The extent of commitment and 
funding for carrying out the proposal by 
local government agencies and nonprofit or-
ganizations, including the provision of ad-
ditional funding and other services, and the 
extent of support for the proposal by resi-
dents, resident advisory boards, and mem-
bers of the local community. 
‘‘(iii) The extent to which the agency 
has a successful history of implementing 
strategies similar to those set forth in the 
agency’s proposal. 
‘‘(iv) Whether the proposal pursues a 
priority strategy as specified in paragraph 
(2). In the case of any proposal utilizing a 
such a priority strategy, the proposal shall 
be evaluated based upon— 
‘‘(I) the extent to which the pro-
posal is likely to achieve the objectives 
of developing additional housing dwell-
ing units affordable to extremely low-, 
very low-, and low-income families, 
and preserving, rehabilitating, or mod-
ernizing existing public housing dwell-
ing units; or 
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‘‘(II) the extent to which the pro-
posal is likely to achieve the purposes 
of moving families toward economic 
self-sufficiency and increasing employ-
ment rates and wages of families with-
out imposing a significant rent burden 
on the lowest income families, as well 
as such of the additional purposes as 
may be identified in the proposal, 
which may include expanding housing 
choices utilizing coordinators for the 
family self-sufficiency program under 
section 23, making more effective use of 
program funds, and improving pro-
gram management. 
‘‘(v) Such other factors as the Sec-
retary may provide, in consultation with 
participating 
agencies, 
program 
stake-
holders, and any entity conducting evalua-
tions pursuant to subsection (f). 
‘‘(2) PRIORITY
STRATEGIES.—For purposes of 
paragraph (1)(E)(iv), the following are priority strat-
egies: 
‘‘(A) DEVELOPMENT, REHABILITATION, AND 
FINANCING.—A strategy of development of addi-
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tional affordable housing dwelling units and/or a 
strategy for preservation and physical rehabilita-
tion and modernization of existing public hous-
ing dwelling units. Such strategies may include 
innovative financing proposals, leveraging of 
non-public housing funds (including the low-in-
come housing tax credit program), and com-
bining of funds for assistance under sections 8 
and 9. Each such proposal shall include detailed 
information about the strategies expected to be 
employed, an explanation of why participation 
in the program is necessary to employ such 
strategies, and numerical goals regarding the 
number of dwelling units to be developed, pre-
served, or rehabilitated. 
‘‘(B) RENT REFORMS.—A strategy to imple-
ment rent reforms, which shall be designed to 
help families increase their earned income 
through rent and other work incentives, and may 
also test the effectiveness of achieving adminis-
trative cost savings without increased rent bur-
dens for extremely low- and very low-income 
families. 
‘‘(3) CONTRACT
AMENDMENT.—After selecting 
agencies under this subsection, the Secretary shall 
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promptly amend the applicable annual contributions 
contracts of such agencies to provide that— 
‘‘(A) subject to subparagraph (B), such 
agencies may implement any policies and activi-
ties that are not inconsistent with this section 
without specifying such policies and activities in 
such amendment and without negotiating or en-
tering into any other agreements with the Sec-
retary specifying such policies and activities; 
and 
‘‘(B) the activities to be implemented by an 
agency under the program in a given year shall 
be described in and subject to the requirements of 
the annual plan under subsection (e)(8). Upon 
the enactment of this section, any agency which 
has participated in the Moving to Work dem-
onstration may, at its option, be subject to the 
provisions of this paragraph in lieu of any other 
agreement required by the Secretary for partici-
pation in the program. 
‘‘(4) MAINTAINING PARTICIPATION RATE.—If, at 
any time after the initial selection period under para-
graph (1), the number of public housing agencies par-
ticipating in the program under this section is fewer 
than 40, the Secretary shall promptly solicit applica-
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tions from and select public housing agencies to par-
ticipate in the program under the terms and condi-
tions for application and selection provided in this 
section to increase the number of agencies partici-
pating in the program to 40. 
‘‘(e) PROGRAM REQUIREMENTS.— 
‘‘(1) PROGRAM FUNDS.— 
‘‘(A) IN GENERAL.—To carry out a housing 
innovation program under this section, the par-
ticipating agency may use amounts provided to 
the agency from the Operating Fund under sec-
tion 9(e), amounts provided to the agency from 
the Capital Fund under section 9(d), and 
amounts provided to the agency for voucher as-
sistance under section 8(o). Such program funds 
may be used for any activities that are author-
ized by sections 8(o) or 9, or for other activities 
that are not inconsistent with this section, which 
shall include, without limitation— 
‘‘(i) providing capital and operating 
assistance, and financing for housing pre-
viously developed or operated pursuant to a 
contract between the Secretary and such 
agency; 
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‘‘(ii) the acquisition, new construction, 
rehabilitation, financing, and provision of 
capital or operating assistance for low-in-
come housing (including housing other than 
public housing) and related facilities, which 
may be for terms exceeding the term of the 
program under this section in order to se-
cure other financing for such housing; 
‘‘(iii) costs of site acquisition and im-
provement, providing utility services, demo-
lition, planning, and administration of ac-
tivities under this paragraph; 
‘‘(iv) housing counseling for low-in-
come families in connection with rental or 
homeownership assistance provided under 
the program; 
‘‘(v) safety, security, law enforcement, 
and anticrime activities appropriate to pro-
tect and support families assisted under the 
program; 
‘‘(vi) tenant-based rental assistance, 
which may include the project-basing of 
such assistance; and 
‘‘(vii) appropriate and reasonable fi-
nancial assistance that is required to pre-
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serve low-income housing otherwise assisted 
under programs administered by the Sec-
retary or under State or local low-income 
housing programs. 
‘‘(B) COMBINING FUNDS.—Notwithstanding 
any other provision of law, a participating 
agency may combine and use program funds for 
any activities authorized under this section, ex-
cept that a participating agency may use funds 
provided for assistance under section 8(o) for ac-
tivities other than those authorized under section 
8(o) only if (i) in the calendar year prior to its 
participation in the program, the agency utilized 
not less than 95 percent of such funds allocated 
for that calendar year for such authorized activi-
ties or 95 percent of its authorized vouchers, in-
cluding vouchers ported in to the agency and 
vouchers ported out; or (ii) after approval to 
participate in the program, the agency achieves 
such utilization for a 12-month period. This sub-
paragraph shall not apply to participating agen-
cies approved by the Secretary to combine funds 
from sections 8 and 9 of the Act prior to enact-
ment of this section. 
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‘‘(2) USE OF PROGRAM FUNDS.—In carrying out 
the housing innovation program under this section, 
each participating agency shall continue to assist— 
‘‘(A) not less than substantially the same 
number of eligible low-income families under the 
program as it assisted in the base year for the 
agency; and 
‘‘(B) a comparable mix of families by fam-
ily size, subject to adjustment to reflect changes 
in the agency’s waiting list, except that the Sec-
retary may approve exceptions to such require-
ments for up to 3 years based on modernization 
or redevelopment activities proposed in an an-
nual plan submitted and approved in accordance 
with paragraph (8). 
Determinations with respect to the number of families 
served shall be adjusted based on any allocation of ad-
ditional vouchers under section 8(o) and to reflect 
any change in the percentage of program funds that 
a participating agency receives compared to the base 
year. 
‘‘(3) RETAINED
PROVISIONS.—Notwithstanding 
any other provision of this section, families receiving 
assistance under this section shall retain the same 
rights of judicial review of agency action as they 
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would otherwise have had if the agency were not par-
ticipating in the program, and each participating 
agency shall comply with the following provisions of 
this Act: 
‘‘(A) Subsections (a)(2)(A) and (b)(1) of 
section 16 (relating to targeting for new admis-
sions in the public housing and voucher pro-
grams). 
‘‘(B) Section 2(b) (relating to tenant rep-
resentatives on the public housing agency board 
of directors). 
‘‘(C) Section 3(b)(2) (relating to definitions 
for the terms ‘low-income families’ and ‘very 
low-income families’). 
‘‘(D) Section 5(A)(e) (relating to the forma-
tion of and consultation with a resident advisory 
board). 
‘‘(E) Sections 6(f)(1) and 8(o)(8)(B) (relat-
ing to compliance of units assisted with housing 
quality standards or other codes). 
‘‘(F) 
Sections 
6(c)(3), 
6(c)(4)(i), 
and 
8(o)(6)(B) (relating to rights of public housing 
applicants and existing procedural rights for ap-
plicants under section 8(o)). 
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‘‘(G) Section 6(k) (relating to grievance 
procedures for public housing tenants) and com-
parable procedural rights for families assisted 
under section 8(o). 
‘‘(H) Section 6(l) (relating to public hous-
ing lease requirements), except that for units as-
sisted both with program funds and low-income 
housing tax credits, the initial lease term may be 
less than 12 months if required to conform lease 
terms with such tax credit requirements. 
‘‘(I) Section 7 (relating to designation of 
housing for elderly and disabled households), ex-
cept that a participating agency may make such 
designations(at initial designation or upon re-
newal) for a term of up to 5 years if the agency 
includes in its annual plan under paragraph (8) 
an analysis of the impact of such designations 
on affected households and such designation is 
subject to the program evaluation. Any partici-
pating agency with a designated housing plan 
that was approved under the moving to work 
demonstration may continue to operate under 
the terms of such plan for a term of 5 years 
(with an option to renew on the same terms for 
an additional 5 years) if it includes in its an-
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nual plan an analysis of the impact of such des-
ignations on affected households and is subject to 
evaluation under subsection (f). 
‘‘(J) Subparagraphs (C) through (E) of sec-
tion 8(o)(7) (relating to lease requirements and 
eviction protections for families assisted with 
tenant-based assistance). 
‘‘(K) Subject to paragraph (1)(B) of this 
subsection, section 8(o)(13)(B) (relating to a per-
centage limitation on project-based assistance), 
except that for purposes of this subparagraph 
such section shall be applied by substituting ‘50 
percent’ for ‘20 percent’. 
‘‘(L) Section 8(o)(13)(E) (relating to resi-
dent choice for tenants of units with project- 
based vouchers), except with respect to— 
‘‘(i) in the case of agencies partici-
pating in the moving to work demonstra-
tion, any housing assistance payment con-
tract entered into within 2 years after the 
enactment of this section; 
‘‘(ii) project-based vouchers that re-
place public housing units; 
‘‘(iii) not more than 10 percent of the 
vouchers available to the participating 
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