‘‘(A) ELDERLY AND DISABLED FAMILIES.— 
$525 in the case of any family that is an elderly 
family or a disabled family. 
‘‘(B) DEPENDENTS.—In the case of any 
family, $525 for each member who— 
‘‘(i) is less than 18 years of age or at-
tending school or vocational training on a 
full-time basis; or 
‘‘(ii) is a person who is 18 years of age 
or older, resides in the household, and is 
certified as disabled and unable to work by 
the public housing agency of jurisdiction. 
‘‘(C) CHILD CARE.—The amount, if any, 
that exceeds 5 percent of annual family income 
that is used to pay for unreimbursed child care 
expenses, which shall include child care for pre-
school-age children, for before- and after-care for 
children in school, and for other child care nec-
essary to enable a member of the family to be 
employed or further his or her education. 
‘‘(D) HEALTH AND MEDICAL EXPENSES.— 
The amount, if any, by which 10 percent of an-
nual family income is exceeded by the sum of— 
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‘‘(i) in the case of any elderly or dis-
abled family, any unreimbursed health and 
medical care expenses; and 
‘‘(ii) any unreimbursed reasonable at-
tendant care and auxiliary apparatus ex-
penses for each handicapped member of the 
family, if determined necessary by the pub-
lic housing agency or owner to enable any 
member of such family to be employed. 
The Secretary shall, by regulation, provide hard-
ship exemptions to the requirements of this sub-
paragraph and subparagraph (C) for impacted 
families who demonstrate an inability to pay 
calculated rents because of financial hardship. 
Such regulations shall include a requirement to 
notify tenants regarding any changes to the de-
termination of adjusted income pursuant to such 
subparagraphs based on the determination of the 
family’s claim of financial hardship exemptions 
required by the preceding sentence. Such regula-
tions shall be promulgated in consultation with 
tenant organizations, industry participants, and 
the Secretary of Health and Human Services, 
with an adequate comment period provided for 
interested parties. 
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‘‘(E) PERMISSIVE DEDUCTIONS.—Such ad-
ditional deductions as a public housing agency 
may, at its discretion, establish, except that the 
Secretary shall establish procedures to ensure 
that such deductions do not materially increase 
Federal expenditures. 
The Secretary shall annually calculate the amounts of 
the deductions under subparagraphs (A) and (B), as 
such amounts may have been previously calculated, 
by applying an inflationary factor as the Secretary 
shall, by regulation, establish, except that the actual 
deduction determined for each year shall be estab-
lished by rounding such amount to the next lowest 
multiple of $25.’’. 
(d) HOUSING CHOICE VOUCHER PROGRAM.—Section 
8(o) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(o)) is amended— 
(1) in paragraph (1)(D), by inserting before the 
period at the end the following: ‘‘, except that a public 
housing agency may establish a payment standard of 
not more than 120 percent of the fair market rent 
where necessary as a reasonable accommodation for a 
person with a disability, without approval of the Sec-
retary. A public housing agency may use a payment 
standard that is greater than 120 percent of the fair 
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market rent as a reasonable accommodation for a per-
son with a disability, but only with the approval of 
the Secretary. In connection with the use of any in-
creased payment standard established or approved 
pursuant to either of the preceding two sentences as 
a reasonable accommodation for a person with a dis-
ability, the Secretary may not establish additional re-
quirements regarding the amount of adjusted income 
paid by such person for rent’’; and 
(2) in paragraph (5)— 
(A) in the paragraph heading, by striking 
‘‘ANNUAL REVIEW’’ and inserting ‘‘REVIEWS’’; 
(B) in subparagraph (A)— 
(i) by striking ‘‘the provisions of’’ and 
inserting ‘‘paragraphs (1), (6), and (7) of 
section 3(a) and to’’; and 
(ii) by striking ‘‘and shall be con-
ducted’’ and all that follows through the end 
of the subparagraph and inserting a period; 
and 
(C) in subparagraph (B), by striking the 
second sentence. 
(e) 
ENHANCED
VOUCHER
PROGRAM.—Section 
8(t)(1)(D) of the United States Housing Act of 1937 (42 
U.S.C. 1437f(t)(1)(D)) is amended by striking ‘‘income’’ 
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each place such term appears and inserting ‘‘annual ad-
justed income’’. 
(f) PROJECT-BASED HOUSING.—Paragraph (3) of sec-
tion 8(c) of the United States Housing Act of 1937 (42 
U.S.C. 1437f(c)(3)) is amended by striking the last sentence. 
(g) IMPACT ON PUBLIC HOUSING REVENUES.— 
(1) ADJUSTMENTS TO OPERATING FORMULA.—If 
the Secretary of Housing and Urban Development de-
termines that the application of subsections (a) 
through (e) of this section results in a material and 
disproportionate reduction in the rental income of 
certain public housing agencies during the first year 
in which such subsections are implemented, the Sec-
retary may make appropriate adjustments in the for-
mula income for such year of those agencies experi-
encing such a reduction. 
(2) HUD REPORTS ON REVENUE AND COST IM-
PACT.—In each of the first two years after the first 
year in which subsections (a) through (e) are imple-
mented, the Secretary of Housing and Urban Devel-
opment shall submit a report to Congress identifying 
and calculating the impact of changes made by such 
subsections and section 104 of this Act on the revenues 
and costs of operating public housing units, the 
voucher program for rental assistance under section 8 
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