as is necessary to comply with the requirements of section
107.
(e) ACTIONS TO CHANGE PLAN.—A local housing and
management authority that has submitted a plan under sec-
tion 107 may change actions or policies described in the
plan before submission and review of the plan of the author-
ity for the next fiscal year only if—
(1) in the case of costly or nonroutine changes,
the authority submits to the Secretary an amendment
to the plan under subsection (f) which is reviewed in
accordance with such subsection; or
(2) in the case of inexpensive or routine changes,
the authority describes such changes in such local
housing management plan for the next fiscal year.
(f) AMENDMENTS TO PLAN.—
(1) IN GENERAL.—During the annual or 5-year
period covered by the plan for a local housing and
management authority, the authority may submit to
the Secretary any amendments to the plan.
(2) REVIEW.—The Secretary shall conduct a lim-
ited review of each proposed amendment submitted
under this subsection to determine whether the plan,
as amended by the amendment, complies with the re-
quirements of section 107 and notify each local hous-
ing and management authority submitting the
amendment whether the plan, as amended, complies
with such requirements not later than 30 days after
receiving the amendment. If the Secretary determines
that a plan, as amended, does not comply with the re-
quirements under section 107, such notice shall indi-
cate the reasons for the noncompliance and any modi-
fications necessary for the plan to meet the require-
ments under section 107. If the Secretary does not no-
tify the local housing and management authority as
required under this paragraph, the plan, as amended,
shall be considered, for purposes of this section, to
comply with the requirements under section 107.
(3) STANDARDS FOR DETERMINATION OF NON-
COMPLIANCE.—The Secretary may determine that a
plan, as amended by a proposed amendment, does not
comply with the requirements under section 107 only
if—
(A) the plan, as amended, would be subject
to a determination of noncompliance in accord-
ance with the provisions of subsection (c); or
(B) the Secretary determines that—
(i) the proposed amendment is plainly
inconsistent with the activities specified in
the plan;
(ii) there is evidence that challenges, in
a substantial manner, any information con-
tained in the amendment; or
(3) the Secretary determines that the plan, as
amended, violates the purposes of this Act because it
fails to provide housing that will be viable on a long-
term basis at a reasonable cost.
(4) AMENDMENTS
TO
EXTEND
TIME
OF
PER-
FORMANCE.—Notwithstanding any other provision of
this subsection, the Secretary may not determine that
any amendment to the plan of a local housing and
management authority that extends the time for per-
formance of activities assisted with amounts provided
under this title fails to comply with the requirements
under section 107 if the Secretary has not provided
the amount of assistance set forth in the plan or has
not provided the assistance in a timely manner.
SEC. 109. PET OWNERSHIP.
A resident of a public housing dwelling unit or an as-
sisted dwelling unit (as such term is defined in section 371)
may own common household pets or have common household
pets present in the dwelling unit of such resident to the ex-
tent allowed by the local housing and management author-
ity or the owner of the assisted dwelling unit, respectively.
Notwithstanding the preceding sentence, pet ownership in
housing assisted under this Act that is federally assisted
rental housing for the elderly or handicapped (as such term
is defined in section 227 of the Housing and Urban-Rural
Recovery Act of 1983) shall be governed by the provisions
of section 227 of such Act.
SEC. 110. ADMINISTRATIVE GRIEVANCE PROCEDURE.
(a) REQUIREMENTS.—Each local housing and man-
agement authority receiving assistance under this Act shall
establish and implement an administrative grievance proce-
dure under which residents of public housing and assisted
families under title III will—
(1) be advised of the specific grounds of any pro-
posed adverse local housing and management author-
ity action;
(2) have an opportunity for a hearing before an
impartial party upon timely request within a reason-
able period of time;
(3) have an opportunity to examine any docu-
ments or records or regulations related to the pro-
posed action;
(4) be entitled to be represented by another per-
son of their choice at any hearing;
(5) be entitled to ask questions of witnesses and
have others make statements on their behalf; and
(6) be entitled to receive a written decision by
the local housing and management authority on the
proposed action.
(b) EXCLUSION FROM ADMINISTRATIVE PROCEDURE
OF GRIEVANCES CONCERNING EVICTIONS FROM PUBLIC
HOUSING.—A local housing and management authority
shall exclude from its procedure established under subsection
(a) any grievance concerning an eviction from or termi-
nation of tenancy in public housing in any State which
requires that, prior to eviction, a resident be provided a
hearing in court which the Secretary determines provides
the basic elements of due process.
(c) COSTS OF GRIEVANCE PROCEDURE.—The costs of
administering a grievance procedure under this section (in-
cluding costs of retaining counsel) shall be considered oper-
ating activities of a local housing and management author-
ity.
SEC. 111. HEADQUARTERS RESERVE FUND.
(a) ANNUAL RESERVATION OF AMOUNTS.—Notwith-
standing any other provision of law, the Secretary may re-
tain not more than 3 percent of the amounts appropriated
to carry out title II for any fiscal year to provide incremen-
tal housing assistance under title III in accordance with
this section.
(b) USE OF AMOUNTS.—Any amounts that are re-
tained under subsection (a) shall be available for subsequent
allocation to specific areas and communities, and may only
be used for the Department of Housing and Urban Develop-
ment and—
(1) unforeseen housing needs resulting from nat-
ural and other disasters;
(2) housing needs resulting from emergencies, as
certified by the Secretary, other than such disasters;
(3) housing needs related to a settlement of liti-
gation, including settlement of fair housing litigation;
and
(4) providing technical assistance, training, and
electronic information systems for the Department of
Housing and Urban Development and local housing
and management authorities to improve management
of such authorities.
SEC. 112. LABOR STANDARDS.
(a) IN GENERAL.—Any contract for grants, sale, or
lease pursuant to this Act relating to public housing shall
contain the following provisions:
(1) OPERATION.—A provision requiring that not
less than the wages prevailing in the locality, as de-
termined or adopted (subsequent to a determination
under applicable State or local law) by the Secretary,
shall be paid to all contractors and persons employed
in the operation of the low-income housing develop-
ment involved.
(2) PRODUCTION.—A provision that not less
than the wages prevailing in the locality, as predeter-
mined by the Secretary of Labor pursuant to the
Davis-Bacon Act (40 U.S.C. 276a–276a–5), shall be
paid to all laborers and mechanics employed in the
production of the development involved.
The Secretary shall require certification as to compliance
with the provisions of this section before making any pay-
ment under such contract.
(b) EXCEPTIONS.—Subsection (a) and the provisions
relating to wages (pursuant to subsection (a)) in any con-
tract for grants, sale, or lease pursuant to this Act relating
to public housing, shall not apply to any of the following
individuals:
(1) VOLUNTEERS.—Any individual who—
(A) performs services for which the individ-
ual volunteered;
(B)(i) does not receive compensation for
such services; or
(ii) is paid expenses, reasonable benefits, or
a nominal fee for such services; and
(C) is not otherwise employed at any time
in the construction work.
(2) RESIDENTS EMPLOYED BY LHMA.—Any resi-
dent of a public housing development who is an em-
ployee of the local housing and management authority
for the development and performs services in connec-
tion with the operation or production of a low-income
housing project owned or managed by such authority.
SEC. 113. NONDISCRIMINATION.
(a) IN GENERAL.—No person in the United States
shall on the grounds of race, color, national origin, religion,
or sex be excluded from participation in, be denied the bene-
fits of, or be subjected to discrimination under any program
or activity funded in whole or in part with amounts made
available under this Act. Any prohibition against discrimi-
nation on the basis of age under the Age Discrimination
Act of 1975 or with respect to an otherwise qualified handi-
capped individual as provided in section 504 of the Reha-
bilitation Act of 1973 shall also apply to any such program
or activity.
(b) CIVIL RIGHTS COMPLIANCE.—Each local housing
and management authority that receives grant amounts
under this Act shall use such amounts and carry out its
local housing management plan approved under section 108
in conformity with title VI of the Civil Rights Act of 1964,
the Fair Housing Act, section 504 of the Rehabilitation Act
of 1973, the Age Discrimination Act of 1975, and the Amer-
icans With Disabilities Act of 1990, and shall affirmatively
further fair housing.
SEC. 114. EFFECTIVE DATE AND REGULATIONS.
(a) EFFECTIVE DATE.—The provisions of this Act and
the amendments made by this Act shall take effect and shall
apply on the date of the enactment of this Act, unless such
provisions or amendments specifically provide for effective-
ness or applicability on another date certain.
(b) REGULATIONS.—The Secretary may issue any reg-
ulations necessary to carry out this Act.
(c) RULE OF CONSTRUCTION.—Any failure by the Sec-
retary to issue any regulations authorized under subsection
(b) shall not affect the effectiveness of any provision of this
Act or any amendment made by this Act.
TITLE II—PUBLIC HOUSING
Subtitle A—Block Grants
SEC. 201. BLOCK GRANT CONTRACTS.
(a) IN GENERAL.—The Secretary shall enter into con-
tracts with local housing and management authorities
under which—
(1) the Secretary agrees to make a block grant
under this title, in the amount provided under section
202(c), for assistance for low-income housing to the
local housing and management authority for each fis-
cal year covered by the contract; and
(2) the authority agrees—
(A) to provide safe, clean, and healthy hous-
ing that is affordable to low-income families and
services for families in such housing;
(B) to operate, or provide for the operation,
of such housing in a financially sound manner;
(C) to use the block grant amounts in ac-
cordance with this title and the local housing
management plan for the authority that complies
with the requirements of section 107;
(D) to involve residents of housing assisted
with block grant amounts in functions and deci-
sions relating to management and the quality of
life in such housing;
(E) that the management of the public hous-
ing of the authority shall be subject to actions
authorized under subtitle B of title IV;
(F) that the Secretary may take actions
under section 205 with respect to improper use
of grant amounts provided under the contract;
and
(G) to otherwise comply with the require-
ments under this title.
(b) MODIFICATION.—Contracts and agreements be-
tween the Secretary and a local housing and management
authority may not be amended in a manner which would—
(1) impair the rights of—
(A) leaseholders for units assisted pursuant
to a contract or agreement; or
(B) the holders of any outstanding obliga-
tions of the local housing and management au-
thority involved for which annual contributions
have been pledged; or
(2) provide for payment of block grant amounts
under this title in an amount exceeding the allocation
for the authority determined under section 204.
Any rule of law contrary to this subsection shall be deemed
inapplicable.
(c) CONDITIONS ON RENEWAL.—Each block grant con-
tract under this section shall provide, as a condition of re-
newal of the contract with the local housing and manage-
ment authority, that the authority’s accreditation be re-
newed by the Housing Foundation and Accreditation Board
pursuant to review under section 433 by such Board.
SEC. 202. BLOCK GRANT AUTHORITY AND AMOUNT.
(a) AUTHORITY.—The Secretary shall make block
grants under this title to eligible local housing and manage-
ment authorities in accordance with block grant contracts
under section 201.
(b) ELIGIBILITY.—A local housing and management
authority shall be an eligible local housing and manage-
ment authority with respect to a fiscal year for purposes
of this title only if—
(1) the Secretary has entered into a block grant
contract with the authority;
(2) the authority has submitted a local housing
management plan to the Secretary for such fiscal
year;
(3) the plan has been determined to comply with
the requirements under section 107 and the Secretary
has not notified the authority that the plan fails to
comply with such requirements;
(4) the authority is accredited under section 433
by the Housing Foundation and Accreditation Board;
(5) the authority is exempt from local taxes, as
provided under subsection (d), or receives a contribu-
tion, as provided under such subsection;
(6) no member of the board of directors or other
governing body of the authority, or the executive di-
rector, has been convicted of a felony;
(7) the authority has entered into an agreement
providing for local cooperation in accordance with
subsection (e); and
(8) the authority has not been disqualified for a
grant pursuant to section 205(a) or subtitle B of title
IV.
(c) AMOUNT OF GRANTS.—The amount of the grant
under this title for a local housing and management author-
ity for a fiscal year shall be the amount of the allocation
for the authority determined under section 204, except as
otherwise provided in this title and subtitle B of title IV.
(d) PAYMENTS IN LIEU OF STATE AND LOCAL TAX-
ATION OF PUBLIC HOUSING DEVELOPMENTS.—
(1) EXEMPTION FROM TAXATION.—A local hous-
ing and management authority may receive a block
grant under this title only if—
(A)(i) the developments of the authority (ex-
clusive of any portions not assisted with
amounts provided under this title) are exempt
from all real and personal property taxes levied
or imposed by the State, city, county, or other
political subdivision; and
(ii) the local housing and management au-
thority makes payments in lieu of taxes to such
taxing authority equal to 10 percent of the sum,
for units charged in the developments of the au-
thority, of the difference between the gross rent
and the utility cost, or such lesser amount as
is—
(I) prescribed by State law;
(II) agreed to by the local governing
body in its agreement under subsection (e)
for local cooperation with the local housing
and management authority or under a
waiver by the local governing body; or
(III) due to failure of a local public
body or bodies other than the local housing
and management authority to perform any
obligation under such agreement; or
(B) the authority complies with the require-
ments under subparagraph (A) with respect to
public housing developments (including public
housing units in mixed-income developments),
but the authority agrees that the units other than
public housing units in any mixed-income devel-
opments (as such term is defined in section
221(c)(2)) shall not be subject to any otherwise
applicable real property taxes imposed by the
State, city, county or other political subdivision.
(2) EFFECT OF FAILURE TO EXEMPT FROM TAX-
ATION.—Notwithstanding paragraph (1), a local
housing and management authority that does not
comply with the requirements under such paragraph
may receive a block grant under this title, but only
if the State, city, county, or other political subdivi-
sion in which the development is situated contributes,
in the form of cash or tax remission, the amount by
which the taxes paid with respect to the development
exceed 10 percent of the gross rent and utility cost
charged in the development.
(e) LOCAL COOPERATION.—In recognition that there
should be local determination of the need for low-income
housing to meet needs not being adequately met by private
enterprise, the Secretary may not make any grant under
this title to a local housing and management authority un-
less the governing body of the locality involved has entered
into an agreement with the authority providing for the local
cooperation required by the Secretary pursuant to this title.
(f) EXCEPTION.—Notwithstanding subsection (a), the
Secretary may make a grant under this title for a local
housing and management authority that is not an eligible
local housing and management authority but only for the
period necessary to secure, in accordance with this title, an
alternative local housing and management authority for the
public housing of the ineligible authority.
SEC. 203. ELIGIBLE AND REQUIRED ACTIVITIES.
(a) ELIGIBLE ACTIVITIES.—Except as provided in
subsection (b), amounts from a grant made under this title
may be used only for the following activities and costs:
(1) PRODUCTION.—Production of public housing
developments and any production costs.
(2) OPERATION.—Operation of public housing
developments in a manner appropriate to ensure the
viability of the developments as low-income housing
and provision of safety, security, and law enforcement
measures and activities necessary to protect residents
from crime, which shall include providing adequate
operating services and reserve funds.
(3) MODERNIZATION.—Improvement of the phys-
ical condition of existing public housing developments
(including routine and timely improvements, reha-
bilitation, and replacement of systems, and major re-
habilitation, redesign, reconstruction, and redevelop-
ment) and upgrading the management and operation
of such developments, to ensure that such develop-
ments continue to be available for use as low-income
housing.
(4) RESIDENT PROGRAMS.—Provision of social,
educational, employment, self-sufficiency, and other
services to the residents of public housing develop-
ments, including providing part of the non-Federal
share required in connection with activities under-
taken under Federal grant-in-aid programs.
(5) HOMEOWNERSHIP ACTIVITIES.—Activities in
connection with a homeownership program for public
housing residents under subtitle D, including provid-
ing financing or assistance for purchasing housing, or
the provision of financial assistance to resident man-
agement corporations or resident councils to obtain
training, technical assistance, and educational assist-
ance to promote homeownership opportunities.
(6) RESIDENT
MANAGEMENT
ACTIVITIES.—Ac-
tivities in connection with establishing, organizing,
training, and assisting resident councils and resident
management corporations for public housing develop-
ments.
(7) DEMOLITION AND DISPOSITION ACTIVITIES.—
Activities in connection with the disposition or demo-
lition of public housing under section 261.
(8) PAYMENTS IN LIEU OF TAXES.—Payments in
accordance with the requirement under section
202(d)(1).
(9) EMERGENCY
CORRECTIONS.—Correction of
conditions that constitute an immediate threat to the
health or safety of residents of public housing develop-
ments, without regard to whether the need for such
correction is indicated in the local housing manage-
ment plan of the authority.
(10) PREPARATION OF LOCAL HOUSING MANAGE-
MENT PLANS.—Preparation of local housing manage-
ment plans (including reasonable costs that may be
necessary to assist residents in participating in the
planning process in a meaningful way) and conduct-
ing annual financial and performance audits under
section 432.
(11) LHMA INSURANCE.—Purchase of insurance
by local housing and management authorities (and
their contractors), except that—
(A) any such insurance so purchased shall
be competitively selected;
(B) any coverage provided under such poli-
cies, as certified by the authority, shall provide
reasonable coverage for the risk of liability expo-
sure, taking into consideration the potential li-
ability concerns inherent in the testing and
abatement of lead-based paint, and the manage-
rial and quality assurance responsibilities asso-
ciated with the conduct of such activities; and
(C) notwithstanding any other provision of
State or Federal law, regulation or other require-
ment, any line of insurance from a nonprofit in-
surance entity, owned and controlled by local
housing and management authorities and ap-
proved by the Secretary, may be purchased with-
out regard to competitive procurement.
(12) PAYMENT OF OUTSTANDING DEVELOPMENT
BONDS AND NOTES ISSUED UNDER 1937 ACT.—Pay-
ment of principal and interest payable on obligations
issued pursuant to section 5 of the United States
Housing Act of 1937 (as in effect before the date of
the enactment of this Act) by a local housing and
management authority to finance the production of
public housing, except that the Secretary shall retain
the authority to forgive such debt.
(13) MUTUAL
HELP
HOMEOWNERSHIP
OPPOR-
TUNITY PROGRAMS FOR INDIAN HOUSING AUTHORI-
TIES.—In the case of an Indian housing authority,
production, operation, and modernization of develop-
ments under a mutual help homeownership program
subject to the requirements under section 202 of the
United States Housing Act of 1937 (as in effect im-
mediately before the enactment of this Act), except
that any reference in such section to assistance under
such section or such Act shall be construed to refer to
assistance under this title and subsection (b) of such
section shall not apply.
(b) REQUIRED CONVERSION OF ASSISTANCE FOR PUB-
LIC HOUSING TO RENTAL HOUSING ASSISTANCE.—
(1) REQUIREMENT.—A local housing and man-
agement authority that receives grant amounts under
this title shall provide assistance in the form of rental
housing assistance under title III or appropriate site
revitalization or other appropriate capital improve-
ments approved by the Secretary, in lieu of assisting
the operation and modernization of any building or
buildings of public housing, if the authority provides
sufficient evidence to the Secretary that—
(A) the building is distressed or substan-
tially vacant;
(B) the estimated cost of continued oper-
ation and modernization of the building exceeds
the cost of providing choice-based rental assist-
ance under title III; and
(C) there is a sufficient supply of available
and affordable housing to make the use of such
voucher assistance feasible.
(2) USE OF OTHER AMOUNTS.—In addition to
grant amounts under this title attributable (pursuant
to the formula under section 204) to the building or
buildings identified under paragraph (1), the Sec-
retary may use amounts provided in appropriation
Acts for incremental choice-based housing assistance
and, to the extent approved in advance, for the re-
newal of assistance under section 8 of the United
States Housing Act of 1937 (as in effect before the
date of enactment of this Act), for assistance under
title III for families residing in such building or
buildings or for appropriate site revitalization or
other appropriate capital improvements approved by
the Secretary.
(3) ENFORCEMENT.—The Secretary shall take
appropriate action to ensure conversion of any build-
ing or buildings identified under paragraph (1) and
any other appropriate action under this subsection, if
the local housing and management authority fails to
take appropriate action under this subsection.
(4) FAILURE OF LHMA’S TO COMPLY WITH CON-
VERSION REQUIREMENT.—If the Secretary determines
that—
(A) a local housing and management au-
thority has failed under paragraph (1) to iden-
tify a building or buildings in a timely manner,
(B) a local housing and management au-
thority has failed to identify one or more build-
ings which the Secretary determines should have
been identified under paragraph (1), or
(C) one or more of the buildings identified
by the local housing and management authority
pursuant to paragraph (1) should not, in the de-
termination of the Secretary, have been identi-
fied under that paragraph,
the Secretary may identify a building or buildings for
conversion and other appropriate action pursuant to
this subsection.
(5) CESSATION OF UNNECESSARY SPENDING.—
Notwithstanding any other provision of law, if, in the
determination of the Secretary, a building or build-
ings meets or is likely to meet the criteria set forth
in paragraph (1), the Secretary may direct the local
housing and management authority to cease addi-
tional spending in connection with such building or
buildings, except to the extent that additional spend-
ing is necessary to ensure safe, clean, and healthy
housing until the Secretary determines or approves
an appropriate course of action with respect to such
building or buildings under this subsection.
(6) USE
OF
BUDGET
AUTHORITY.—Notwith-
standing any other provision of law, if a building or
buildings are identified pursuant to paragraph (1),
the Secretary may authorize or direct the transfer, to
the choice-based or tenant-based assistance program of
such authority or to appropriate site revitalization or
other capital improvements approved by the Sec-
retary, of—
(A) in the case of an authority receiving as-
sistance under the comprehensive improvement
assistance program, any amounts obligated by
the Secretary for the modernization of such
building or buildings pursuant to section 14 of
the United States Housing Act of 1937, as in ef-
fect immediately before the date of enactment of
this Act;
(B) in the case of an authority receiving
public and Indian housing modernization assist-
ance by formula pursuant to such section 14,
any amounts provided to the authority which
are attributable pursuant to the formula for allo-
cating such assistance to such building or build-
ings;
(C) in the case of an authority receiving as-
sistance for the major reconstruction of obsolete
projects, any amounts obligated by the Secretary
for the major reconstruction of such building or
buildings pursuant to section 5(j)(2) of the Unit-
ed States Housing Act of 1937, as in effect im-
mediately before the date of enactment of this
Act; and
(D) in the case of an authority receiving as-
sistance pursuant to the formula under section
204, any amounts provided to the authority
which are attributable pursuant to the formula
for allocating such assistance to such building or
buildings.
(c) FUNGIBILITY OF AMOUNTS.—Any amounts pro-
vided under a block grant under this title may be used for
any eligible activity under subsection (a) or for conversion
under subsection (b), notwithstanding whether such
amounts are attributable to the operating allocation under
section 204(d)(1) or the capital improvements allocation for
the local housing and management authority determined
under section 204(d)(2).
(d) COMPLIANCE WITH PLAN.—The local housing
management plan submitted by a local housing and man-
agement authority (including any amendments to the
plan), unless determined under section 108 not to comply
with the requirements under section 107, shall be binding
upon the Secretary and the local housing and management
authority and the authority shall use any grant amounts
provided under this title for eligible activities under sub-
section (a) in accordance with the plan. This subsection
may not be construed to preclude changes or amendments
to the plan, as authorized under section 108(e) or any ac-
tions authorized by this Act to be taken without regard to
a local housing management plan.
SEC. 204. DETERMINATION OF BLOCK GRANT ALLOCATION.
(a) IN GENERAL.—For each fiscal year, after reserving
amounts under section 111 from the aggregate amount
made available for the fiscal year for carrying out this title,
the Secretary shall allocate any remaining amounts among
eligible local housing and management authorities in ac-
cordance with this section, so that the sum of all of the allo-
cations for all eligible authorities is equal to such remain-
ing amount.
(b) ALLOCATION AMOUNT.—The Secretary shall deter-
mine the amount of the allocation for each eligible local
housing and management authority, which shall be—
(1) for any fiscal year beginning after the enact-
ment of a law containing a formula described in sub-
section (c), the amount determined under such for-
mula; or
(2) for any fiscal year beginning before the expi-
ration of such period, the sum of—
(A) the operating allocation determined
under subsection (d)(1) for the authority; and
(B) the capital improvement allocation de-
termined under subsection (d)(2) for the author-
ity.
(c) PERMANENT ALLOCATION FORMULA.—
(1) FORMULA.—A formula under this subsection
shall provide for allocating amounts available for a
fiscal year for block grants under this title for each
local housing and management authority. The for-
mula should reward performance and may consider
factors that reflect the different characteristics and
sizes of local housing and management authorities,
the relative needs, revenues, costs, and capital im-
provements of authorities, and the relative costs to au-
thorities of operating a well-managed authority that
meets the performance targets for the authority estab-
lished in the local housing management plan for the
authority.
(2) DEVELOPMENT UNDER NEGOTIATED RULE-
MAKING PROCEDURE.—The formula under this sub-
section shall be developed according to procedures for
issuance of regulations under the negotiated rule-
making procedure under subchapter III of chapter 5
of title 5, United States Code, except that the formula
shall not be contained in a regulation.
(3) REPORT.—Not later than the expiration of
the 18-month period beginning upon the enactment of
this Act, the Secretary shall submit a report to the
Congress containing the proposed formula established
pursuant to paragraph (2) that meets the require-
ments of this subsection.
(d) INTERIM ALLOCATION REQUIREMENTS.—
(1) OPERATING ALLOCATION.—
(A) APPLICABILITY TO 50 PERCENT OF AP-
PROPRIATED AMOUNTS.—Of any amounts avail-
able for allocation under this subsection for a fis-
cal year, 50 percent shall be used only to provide
amounts for operating allocations under this
paragraph for eligible local housing and manage-
ment authorities.
(B) DETERMINATION.—The operating allo-
cation under this subsection for a local housing
and management authority for a fiscal year
shall be an amount determined by applying, to
the amount to be allocated under this paragraph,
the formula used for determining the distribution
of operating subsidies for fiscal year 1995 to
public housing agencies (as modified under sub-
paragraph (C)) under section 9 of this Act, as in
effect before the enactment of this Act.
(C) TREATMENT OF CHRONICALLY VACANT
UNITS.—The Secretary shall revise the formula
referred to in subparagraph (B) so that the for-
mula does not provide any amounts, other than
utility costs, attributable to any dwelling unit of
a local housing and management authority that
has been vacant continuously for 6 or more
months. A unit shall not be considered vacant for
purposes of this paragraph if the unit is unoccu-
pied because of rehabilitation or renovation that
is on-schedule.
(2) CAPITAL IMPROVEMENT ALLOCATION.—
(A) APPLICABILITY TO 50 PERCENT OF AP-
PROPRIATED AMOUNTS.—Of any amounts avail-
able for allocation under this subsection for a fis-
cal year, 50 percent shall be used only to provide
amounts for capital improvement allocations
under this paragraph for eligible local housing
and management authorities.
(B) DETERMINATION.—The capital im-
provement allocation under this subsection for
an eligible local housing and management au-
thority for a fiscal year shall be determined by
applying, to the amount to be allocated under
this paragraph, the formula used for determining
the distribution of modernization assistance for
fiscal year 1995 to public housing agencies under
section 14 of this Act, as in effect before the en-
actment of this Act, except that Secretary shall
establish a method for taking into consideration
allocation of amounts under the comprehensive
improvement assistance program.
SEC. 205. SANCTIONS FOR IMPROPER USE OF AMOUNTS.
(a) IN GENERAL.—In addition to any other actions
authorized under this title, if the Secretary finds pursuant
to an annual financial and performance audit under sec-
tion 432 that a local housing and management authority
receiving grant amounts under this title has failed to com-
ply substantially with any provision of this title, the Sec-
retary may—
(1) terminate payments under this title to the
authority;
(2) withhold from the authority amounts from
the total allocation for the authority pursuant to sec-
tion 204;
(3) reduce the amount of future grant payments
under this title to the authority by an amount equal
to the amount of such payments that were not ex-
pended in accordance with this title;
(4) limit the availability of grant amounts pro-
vided to the authority under this title to programs,
projects, or activities not affected by such failure to
comply;
(5) withhold from the authority amounts allo-
cated for the authority under title III; or
(6) order other corrective action with respect to
the authority.
(b) TERMINATION OF COMPLIANCE ACTION.—If the
Secretary takes action under subsection (a) with respect to
a local housing and management authority, the Secretary
shall—
(1) in the case of action under subsection (a)(1),
resume payments of grant amounts under this title to
the authority in the full amount of the total allocation
under section 204 for the authority at the time that
the Secretary first determines that the authority will
comply with the provisions of this title;
(2) in the case of action under paragraph (2),
(5), or (6) of subsection (a), make withheld amounts
available as the Secretary considers appropriate to
ensure that the authority complies with the provisions
of this title; or
(3) in the case of action under subsection (a)(4),
release such restrictions at the time that the Secretary
first determines that the authority will comply with
the provisions of this title.
Subtitle B—Admissions and
Occupancy Requirements
SEC. 221. LOW-INCOME HOUSING REQUIREMENT.
(a) PRODUCTION ASSISTANCE.—Any public housing
produced using amounts provided under a grant under this
title or under the United States Housing Act of 1937 shall
be operated as public housing for the 40-year period begin-
ning upon such production.
(b) OPERATING ASSISTANCE.—No portion of any pub-
lic housing development operated with amounts from a
grant under this title or operating assistance provided
under the United States Housing Act of 1937 may be dis-
posed of before the expiration of the 10-year period begin-
ning upon the conclusion of the fiscal year for which the
grant or such assistance was provided, except as provided
in this Act.
(c) CAPITAL IMPROVEMENTS ASSISTANCE.—Amounts
may be used for eligible activities under section 203(a)(3)
only for the following housing developments:
(1) 
LOW-INCOME
DEVELOPMENTS.—Amounts
may be used for a low-income housing development
that—
(A) is owned by local housing and manage-
ment authorities;
(B) is operated as low-income rental hous-
ing and produced or operated with assistance
provided under a grant under this title; and
(C) is consistent with the purposes of this
title.
Any development, or portion thereof, referred to in
this paragraph for which activities under section
203(a)(3) are conducted using amounts from a grant
under this title shall be maintained and used as pub-
lic housing for the 20-year period beginning upon the
receipt of such grant. Any public housing develop-
ment, or portion thereof, that received the benefit of
a grant pursuant to section 14 of the United States
Housing Act of 1937 shall be maintained and used as
public housing for the 20-year period beginning upon
receipt of such amounts.
(2) MIXED
INCOME
DEVELOPMENTS.—Amounts
may be used for mixed-income developments, which
shall be a housing development that—
(A) contains dwelling units that are avail-
able for occupancy by families other than low-in-
come families;
(B) contains a number of dwelling units—
(i) which units are made available (by
master contract or individual lease) for oc-
cupancy only by low- and very low-income
families identified by the local housing and
management authority;
(ii) which number is not less than a
reasonable number of units, including relat-
ed amenities, taking into account the
amount of the assistance provided by the
authority compared to the total investment
(including costs of operation) in the devel-
opment;
(iii) which units are subject to the stat-
utory and regulatory requirements of the
public housing program, except that the
Secretary may grant appropriate waivers to
such statutory and regulatory requirements
if reductions in funding or other changes to
the program make continued application of
such requirements impracticable;
(iv) which units are specially des-
ignated as dwelling units under this sub-
paragraph, except the equivalent units in
the development may be substituted for des-
ignated units during the period the units
are subject to the requirements of the public
housing program; and
(v) which units shall be eligible for as-
sistance under this title; and
(C) is owned by the local housing and man-
agement authority, an affiliate controlled by it,
or another appropriate entity.
Notwithstanding any other provision of this title, to
facilitate the establishment of socioeconomically mixed
communities, a local housing and management au-
thority that uses grant amounts under this title for
a mixed income development under this paragraph
may, to the extent that income from such a develop-
ment reduces the amount of grant amounts used for
operating or other costs relating to public housing,
use such resulting savings to rent privately developed
dwelling units in the neighborhood of the mixed in-
come development. Such units shall be made available
for occupancy only by low-income families eligible for
residency in public housing.
SEC. 222. FAMILY ELIGIBILITY.
(a) IN GENERAL.—Dwelling units in public housing
may be rented only to families who are low-income families
at the time of their initial occupancy of such units.
(b) INCOME MIX WITHIN DEVELOPMENTS.—A local
housing and management authority may establish and uti-
lize income-mix criteria for the selection of residents for
dwelling units in public housing developments that limit
admission to a development by selecting applicants having
incomes appropriate so that the mix of incomes of families
occupying the development is proportional to the income
mix in the eligible population of the jurisdiction of the au-
thority, as adjusted to take into consideration the severity
of housing need. Any criteria established under this sub-
section shall be subject to the provisions of subsection (c).
(c) INCOME MIX.—Of the public housing dwelling
units of a local housing and management authority made
available for occupancy after the date of the enactment of
this Act, not less than 25 percent shall be occupied by low-
income families whose incomes do not exceed 30 percent of
the area median income.
(d) WAIVER OF ELIGIBILITY REQUIREMENTS FOR OC-
CUPANCY BY POLICE OFFICERS.—
(1) AUTHORITY AND WAIVER.—To provide occu-
pancy in public housing dwelling units to police offi-
cers and other law enforcement or security personnel
(who are not otherwise eligible for residence in public
housing) and to increase security for other public
housing residents in developments where crime has
been a problem, a local housing and management au-
thority may, with respect to such units and subject to
paragraph (2)—
(A) waive—
(i) the provisions of subsection (a) of
this section and section 225(a);
(ii) the applicability of—
(I) any preferences for occupancy
established under section 223;
(II) the minimum rental amount
established pursuant to section 225(b)
and any maximum monthly rental
amount established pursuant to such
section;
(III) any criteria relating to
project income mix established under
subsection (b);
(IV) the income mix requirements
under subsection (c); and
(V) any other occupancy limita-
tions or requirements; and
(B) establish special rent requirements and
other terms and conditions of occupancy.
(2) CONDITIONS OF WAIVER.—A local housing
and management authority may take the actions au-
thorized in paragraph (1) only if authority deter-
mines that such actions will increase security in the
public housing developments involved and will not re-
sult in a significant reduction of units available for
residence by low-income families.
SEC. 223. PREFERENCES FOR OCCUPANCY.
(a) AUTHORITY TO ESTABLISH.—Any local housing
and management authority may establish a system for
making dwelling units in public housing available for occu-
pancy that provides preference for such occupancy to fami-
lies having certain characteristics.
(b) CONTENT.—Each system of preferences established
pursuant to this section shall be based upon local housing
needs and priorities, as determined by the local housing and
management authority using generally accepted data
sources. Each system of preferences established pursuant to
this section shall be based upon local housing needs and
priorities using generally accepted data sources, including
any information obtained pursuant to an opportunity for
(B) the reasonable rental value of the unit;
or
(C) the local market rent for comparable
units of similar size.
(c) INCOME REVIEWS.—If a local housing and man-
agement authority establishes the amount of rent paid by
a family for a public housing dwelling unit based on the
adjusted income of the family, the authority shall review
the incomes of such family occupying dwelling units in pub-
lic housing owned or administered by the authority not less
than annually.
(d) REVIEW OF MAXIMUM AND MINIMUM RENTS.—
(1) RENTAL CHARGES.—If the Secretary deter-
mines, at any time, that a significant percentage of
the public housing dwelling units owned or operated
by a large local housing and management authority
are occupied by households paying more than 30 per-
cent of their adjusted incomes for rent, the Secretary
shall review the maximum and minimum monthly
rental amounts established by the authority.
(2) POPULATION SERVED.—If the Secretary de-
termines, at any time, that less than 40 percent of the
public housing dwelling units owned or operated by
a large local housing and management authority are
occupied by households whose incomes do not exceed