I 
116TH CONGRESS 
1ST SESSION H. R. 3745 
To provide physical standards and reform the inspection process for housing 
assisted under section 8 of the United States Housing Act of 1937, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 12, 2019 
Mr. LAWSON of Florida (for himself, Ms. ADAMS, Ms. VELA´ZQUEZ, Mr. CRIST, 
Mr. BISHOP of Georgia, Mr. RASKIN, Ms. NORTON, Mr. MCGOVERN, Ms. 
PRESSLEY, Ms. LEE of California, Mrs. CAROLYN B. MALONEY of New 
York, Ms. GARCIA of Texas, Ms. ROYBAL-ALLARD, Mrs. DEMINGS, Mr. 
VARGAS, and Mr. LYNCH) introduced the following bill; which was re-
ferred to the Committee on Financial Services 
A BILL 
To provide physical standards and reform the inspection 
process for housing assisted under section 8 of the 
United States Housing Act of 1937, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘HUD Inspection Over-
sight Act of 2019’’. 
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SEC. 2. ENFORCEMENT OF PHYSICAL CONDITION STAND-
ARDS AND TENANT PROTECTION. 
Section 8(c) of the United States Housing Act of 
1937 (42 U.S.C. 1437f(c)) is amended by adding at the 
end the following: 
‘‘(9) MAINTENANCE OF PROPERTY.—Any entity 
receiving housing assistance payments with respect 
to dwelling units covered by a housing assistance 
payments contract shall— 
‘‘(A) maintain decent, safe, and sanitary 
conditions at those dwelling units, as deter-
mined by the Secretary; and 
‘‘(B) comply with any standards under ap-
plicable State or local laws, rules, ordinances, or 
regulations relating to the physical condition of 
those dwelling units. 
‘‘(10) ENFORCEMENT OF PHYSICAL CONDITION 
STANDARDS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
take action under subparagraph (C) against an 
entity with a housing assistance payments con-
tract for project-based assistance with respect 
to a multifamily housing project if— 
‘‘(i) the project receives an inspection 
score of not more than 60; or 
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‘‘(ii) the entity fails to certify in writ-
ing to the Secretary within 3 days of re-
ceiving the score under clause (i) that all 
exigent health and safety deficiencies iden-
tified by the inspector at the project have 
been corrected. 
‘‘(B) APPLICABILITY.—Subparagraph (A) 
shall— 
‘‘(i) apply with respect to insured and 
noninsured projects with dwelling units re-
ceiving assistance under this section other 
than under subsection (o)(13); and 
‘‘(ii) not apply to dwelling units re-
ceiving assistance with capital or operating 
funds under section 9. 
‘‘(C) 
NOTIFICATION
AND
ENFORCE-
MENT.— 
‘‘(i) IN GENERAL.—If an entity vio-
lates clause (i) or (ii) of subparagraph (A), 
within 15 days after the results of the in-
spection the Secretary shall issue the enti-
ty a Notice of Default, which shall provide 
for a reasonable period to cure all project 
deficiencies and for the entity to provide 
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any response determined appropriate by 
the Secretary. 
‘‘(ii) PLAN
AND
NOTICE
OF
DE-
FAULT.—If violations remain at a project 
after the expiration of the cure period pre-
scribed by the Secretary in the Notice of 
Default pursuant to clause (i), the Sec-
retary shall— 
‘‘(I) develop a remediation plan, 
separate from the Notice of Default, 
and in consultation with tenants or le-
gitimate tenant organizations, or both, 
not later than 45 days after the expi-
ration of the cure period prescribed by 
the Secretary in the Notice of Default, 
to bring the project into compliance; 
‘‘(II) provide the owner with the 
remediation plan with a specified 
timetable, determined by the Sec-
retary, for correcting all project defi-
ciencies, and 
‘‘(III) provide the tenants of the 
property, legitimate tenant organiza-
tions, the local government, any mort-
gagees, and any contract adminis-
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trator of the project with the Notice 
of Default and the remediation plan 
with the specified timetable, deter-
mined by the Secretary, for correcting 
all deficiencies. 
‘‘(iii) WITHDRAWAL
OF
NOTICE
OF 
DEFAULT.—If an appeal submitted by the 
entity results in an inspection score of not 
less than 60, the Secretary may withdraw 
a Notice of Default issued under clause 
(ii)(II). 
‘‘(iv) PENALTIES.—If, at the end of 
the timetable described in clause (ii)(II), 
the entity fails to fully correct all defi-
ciencies in the project, the Secretary shall 
take one or more of the following actions, 
and provide additional notice of those ac-
tions to the owner, the tenants of the prop-
erty, legitimate tenant organizations, the 
local government, any mortgagees, and any 
contract administrator: 
‘‘(I) Require immediate replace-
ment of project management with a 
management agent approved by the 
Secretary. 
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‘‘(II) Impose civil money pen-
alties, which shall be used solely for 
the purpose of supporting safe and 
sanitary conditions at the property, as 
designated by the Secretary, with pri-
ority given to the tenants of the prop-
erty affected by the penalty. 
‘‘(III) Abate the housing assist-
ance payments contract under this 
section, including partial abatement, 
as determined by the Secretary, until 
all deficiencies have been corrected. 
‘‘(IV) Pursue transfer of the 
project to an owner, approved by the 
Secretary under established proce-
dures, which will be obligated to 
promptly make all required repairs 
and to accept renewal of the housing 
assistance payments contract as long 
as such renewal is offered. 
‘‘(V) Transfer the existing hous-
ing 
assistance 
payments 
contract 
under this section to another project 
or projects and owner or owners. 
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‘‘(VI) Pursue exclusionary sanc-
tions, 
including 
suspensions 
or 
debarments from Federal programs. 
‘‘(VII) Seek judicial appointment 
of a receiver to manage the property 
and cure all project deficiencies or 
seek a judicial order of specific per-
formance requiring the owner to cure 
all project deficiencies. 
‘‘(VIII) Work with the owner, 
lender, or other related party to sta-
bilize the property in an attempt to 
preserve the property through compli-
ance, transfer of ownership, or an in-
fusion of capital provided by a third- 
party that requires time to effectuate. 
‘‘(IX) Take any other regulatory 
or contractual remedies available as 
deemed necessary and appropriate by 
the Secretary. 
‘‘(D) CONTRACTS.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall take appropriate steps to ensure that 
project-based contracts remain in effect, 
subject to the exercise of contractual 
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abatement remedies to assist relocation of 
tenants for major threats to health and 
safety after written notice to and informed 
consent of the affected tenants and use of 
other remedies under this paragraph. 
‘‘(ii) OTHER ASSISTANCE.—To the ex-
tent the Secretary determines, in consulta-
tion with the tenants, legitimate tenant or-
ganizations, and the local government, that 
a property is not feasible for continued 
rental assistance payments under this sec-
tion or other housing programs, based on 
consideration of the costs of rehabilitating 
and operating the property and all avail-
able Federal, State, and local resources, in-
cluding rent adjustments under section 
524 of the Multifamily Assisted Housing 
Reform and Affordability Act of 1997 (42 
U.S.C. 1437f note) and environmental con-
ditions that cannot be remedied in a cost- 
effective fashion, the Secretary may, in 
consultation with the tenants of the prop-
erty and any legitimate tenant organiza-
tions, contract for project-based rental as-
sistance payments with an owner or owners 
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of other existing housing properties, or 
provide other rental assistance. 
‘‘(E) REPORT.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall, on a quarterly basis, issue a publicly 
available report on all properties covered 
by this paragraph that— 
‘‘(I) are assessed through the 
Real Estate Assessment Center; and 
‘‘(II)(aa) 
have 
an 
inspection 
score of less than 60; or 
‘‘(bb) received an unsatisfactory 
management and occupancy review 
during the 36-month period preceding 
the report. 
‘‘(ii) CONTENTS.—Each report issued 
under clause (i) shall include specific infor-
mation, disaggregated by the property to 
which it relates, regarding— 
‘‘(I) 
the 
enforcement 
actions 
being taken to address the physical 
conditions of the properties covered in 
the report, including imposition of 
civil money penalties and termination 
of subsidies, and identify properties 
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that have those conditions multiple 
times; 
‘‘(II) actions that the Depart-
ment of Housing and Urban Develop-
ment is taking to protect tenants of 
those properties; and 
‘‘(III) any administrative or leg-
islative recommendations to further 
improve the living conditions at each 
property covered under a housing as-
sistance payments contract. 
‘‘(11) TENANT PROTECTION.— 
‘‘(A) IN
GENERAL.—The Secretary may 
provide tenant-based assistance for dwelling 
units covered under a project-based assistance 
subsidy contract if— 
‘‘(i) the owner of the dwelling units 
has received a Notice of Default; and 
‘‘(ii) the dwelling units pose an immi-
nent health and safety risk to the tenants 
of those dwelling units. 
‘‘(B) REIMBURSEMENTS.—To the extent 
that the Secretary determines that dwelling 
units described in subparagraph (A) are not 
feasible for continued rental assistance pay-
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ments or transfer of the project-based assist-
ance subsidy contract associated with those 
dwelling units to another project or projects 
and owner or owners, any remaining amounts 
associated with those dwelling units shall be re-
captured and used to reimburse amounts used 
for tenant-based assistance under subparagraph 
(A).’’. 
SEC. 3. STANDARDS FOR PHYSICAL CONDITION AND MAN-
AGEMENT OF HOUSING RECEIVING ASSIST-
ANCE PAYMENTS. 
Section 8 of the United States Housing Act of 1937 
(42 U.S.C. 1437f) is amended by inserting after sub-
section (v) the following: 
‘‘(w) STANDARDS FOR PHYSICAL CONDITION AND 
MANAGEMENT OF HOUSING RECEIVING ASSISTANCE PAY-
MENTS.— 
‘‘(1) STANDARDS
FOR
PHYSICAL
CONDITION 
AND MANAGEMENT OF HOUSING.—Any entity receiv-
ing assistance payments under this section shall 
maintain decent, safe, and sanitary conditions, as 
determined by the Secretary, for any structure cov-
ered under a housing assistance payment contract. 
‘‘(2) SURVEY OF TENANTS.— 
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‘‘(A) IN GENERAL.—The Secretary shall, 
on a semiannual basis, conduct a survey of the 
tenants of each structure covered under a hous-
ing assistance payment contract for the purpose 
of identifying consistent or persistent problems 
with the physical condition of the structure or 
performance of the manager of the structure. 
‘‘(B) CONFIDENTIALITY.—The Secretary 
shall ensure that the surveys pursuant to sub-
paragraph (A) are conducted in an anonymous 
manner such that the identities of tenants iden-
tifying such problems through such survey are 
not disclosed. 
‘‘(3) REMEDIATION.—If a consistent or per-
sistent problem with the structure or the manage-
ment of the structure covered under a housing as-
sistance payment contract is identified— 
‘‘(A) by the Secretary pursuant a survey 
conducted under paragraph (2), the Secretary 
shall undertake remediation for the structure or 
manager; or 
‘‘(B) by the Performance-Based Contract 
Administrator based on any other observation 
made by the Administrator during the normal 
course of business, the Administrator shall refer 
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the structure or manager to the Secretary for 
remediation. 
‘‘(4) PENALTY
FOR
FAILURE
TO
UPHOLD 
STANDARDS.— 
‘‘(A) IN
GENERAL.—The Secretary may 
impose a penalty on any owner of a structure 
covered under a housing assistance payment 
contract if the Secretary finds that the struc-
ture or manager of the structure— 
‘‘(i) did not satisfactorily meet the re-
quirements under paragraph (1); or 
‘‘(ii) is repeatedly referred to the Sec-
retary for remediation by a Performance- 
Based Contract Administrator through the 
process established under paragraph (3). 
‘‘(B) AMOUNT.—A penalty imposed under 
subparagraph (A) shall be in an amount equal 
to not less than 1 percent of the annual budget 
authority the owner is allocated under a hous-
ing assistance payment contract. 
‘‘(C) USE
OF
AMOUNTS.—Any amounts 
collected under this paragraph shall be used 
solely for the purpose of supporting safe and 
sanitary conditions at applicable structures or 
for tenant relocation, as designated by the Sec-
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retary, with priority given to the tenants of the 
structure that led to the penalty. 
‘‘(5) APPLICABILITY.—This subsection shall not 
apply to any property assisted under subsection 
(o).’’. 
Æ 
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