I
106TH CONGRESS
1ST SESSION
H. R. 1073
To amend title IV of the Stewart B. McKinney Homeless Assistance Act
to consolidate the Federal programs for housing assistance for the home-
less into a block grant program that ensures that States and communities
are provided sufficient flexibility to use assistance amounts effectively.
IN THE HOUSE OF REPRESENTATIVES
MARCH 11, 1999
Mr. LAZIO (for himself and Mr. FRANK of Massachusetts) introduced the fol-
lowing bill; which was referred to the Committee on Banking and Finan-
cial Services
A BILL
To amend title IV of the Stewart B. McKinney Homeless
Assistance Act to consolidate the Federal programs for
housing assistance for the homeless into a block grant
program that ensures that States and communities are
provided sufficient flexibility to use assistance amounts
effectively.
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 ‘‘Homeless Housing
Programs Consolidation and Flexibility Act’’.
SEC. 2. FINDINGS; PURPOSE.
(a) FINDINGS.—The Congress finds that—
(1) the United States faces a crisis of individ-
uals and families who lack basic affordable housing
and appropriate shelter;
(2) assistance from the Federal Government is
an important factor in the success of efforts by
State and local governments and the private sector
to address the problem of homelessness in a com-
prehensive manner;
(3) there are a multitude of Federal Govern-
ment programs to assist the homeless, including pro-
grams for elderly persons, persons with disabilities,
Native Americans, and veterans;
(4) many of the Federal programs for the
homeless have overlapping objectives, resulting in
multiple sources of Federal funding for the same or
similar purposes;
(5) while the results of Federal programs to as-
sist the homeless generally have been positive, it is
clear that there is a need for consolidation and sim-
plification of such programs to better support local
efforts;
(6) increasing resources available to reduce
homelessness are utilized in the development of serv-
ices rather than the creation of housing;
(7) housing programs must be evaluated on the
basis of their effectiveness in reducing homelessness,
transitioning individuals to permanent housing and
self-sufficiency, and creating an adequate plan to
discharge homeless persons to and from mainstream
service systems;
(8) effective homelessness treatment should pro-
vide a comprehensive housing system (including
transitional and permanent housing) and, while not
all homeless individuals and families attain self-suffi-
ciency and independence by utilizing transitional
housing and then permanent housing, in many cases
such individuals and families are best able to reenter
society directly through permanent, supportive hous-
ing;
(9) supportive housing activities support home-
less persons in an environment that can meet their
short-term or long-term needs and prepare them to
reenter society as appropriate;
(10) homelessness should be treated as part of
a symptom of many neighborhood and community
problems, whose remedies require a holistic approach
integrating all available resources;
(11) there are many private sector entities, par-
ticularly nonprofit organizations, that have success-
fully operated homeless programs;
(12) employment programs for homeless per-
sons, particularly those who are able-bodied, can be
effective in helping homeless persons reenter the
workplace and, therefore, such programs should be
emphasized as a supportive service;
(13) government restrictions and regulations
may discourage and impede innovative approaches to
homelessness, such as coordination of the various
types of assistance that are required by homeless
persons; and
(14) the Federal Government has a responsibil-
ity to establish partnerships with State and local
governments and the private sector to address com-
prehensively the problems of homelessness.
(b) PURPOSE.—It is the purpose of this Act—
(1) to consolidate the existing housing pro-
grams for homeless persons under title IV of the
Stewart B. McKinney Homeless Assistance Act into
a single block grant program for housing assistance
for the homeless;
(2) to allow flexibility and creativity in rethink-
ing solutions to homelessness, including alternative
housing strategies and an improved service sector;
(3) to provide Federal assistance to reduce
homelessness on a basis that requires recipients of
such assistance to supplement the federally provided
amounts and thereby guarantee the provision of a
certain level of housing and complementary services
necessary to meet the needs of the homeless popu-
lation; and
(4) to ensure that multiple Federal agencies are
involved in the provision of housing, human services,
employment, and education assistance both through
the funding provided for implementation of the
Stewart B. McKinney Homeless Assistance Act and
mainstream funding and to encourage entrepreneur-
ial approaches in the provision of housing for home-
less people.
SEC. 3. GENERAL PROVISIONS.
Title I of the Stewart B. McKinney Homeless Assist-
ance Act (42 U.S.C. 11301 et seq.) is amended—
(1) by striking section 102;
(2) in section 103—
(A) in subsection (a), by striking ‘‘the
term ‘homeless’ or ‘homeless individual or
homeless person’ includes’’ and inserting ‘‘the
terms ‘homeless individual’ and ‘homeless per-
son’ include’’; and
(B) in subsection (c), by striking ‘‘the term
‘homeless’ or ‘homeless individual’ does not in-
clude’’ and inserting ‘‘the terms ‘homeless indi-
vidual’ and ‘homeless person’ do not include’’;
and
(3) by redesignating sections 103, 104, and 105
as sections 102, 103, and 104, respectively.
SEC. 4. FEDERAL EMERGENCY MANAGEMENT AGENCY
FOOD AND SHELTER PROGRAM.
Section 322 of the Stewart B. McKinney Homeless
Assistance Act (42 U.S.C. 11352) is amended to read as
follows:
‘‘SEC. 322. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out
this title such sums as may be necessary for each of fiscal
years 2000, 2001, 2002, 2003, and 2004.’’.
SEC. 5. PERMANENT HOUSING DEVELOPMENT AND FLEXI-
BLE BLOCK GRANT HOMELESS ASSISTANCE
PROGRAM.
(a) IN GENERAL.—Title IV of the Stewart B. McKin-
ney Homeless Assistance Act (42 U.S.C. 11361 et seq.)
is amended to read as follows:
‘‘TITLE IV—PERMANENT HOUS-
ING 
DEVELOPMENT 
AND
FLEXIBLE 
BLOCK 
GRANT
HOMELESS ASSISTANCE PRO-
GRAM
‘‘Subtitle A—General Provisions
‘‘SEC. 401. PURPOSE; PERFORMANCE MEASURES.
‘‘(a) PURPOSE.—The purpose of the program under
this title is to provide assistance for permanent housing
development for homeless persons and promote the devel-
opment of a comprehensive housing system that transi-
tions homeless persons to live as independently as possible,
including assistance in the form of permanent housing de-
velopment, supportive housing, emergency shelters, sup-
portive services, and activities to prevent homelessness.
‘‘(b) PERFORMANCE MEASURES.—Consistent with
the purposes and requirements of the Government Per-
formance and Results Act of 1993, the programs under
this title and the implementation of such programs by the
Department of Housing and Urban Development shall
comply with the following performance goals:
‘‘(1) The Federal Government shall ensure an
effective grant allocation process and sound financial
management of the process. Such grant allocation
process shall be implemented to ensure that—
‘‘(A) local governments shall work with the
appropriate local board to create innovative
plans sufficient to address the needs of home-
less people in their community; and
‘‘(B) all eligible communities receive funds
to address the needs of homeless people in such
communities through local governments or pri-
vate nonprofit organizations.
‘‘(2) The financial resources provided under
this title shall be used effectively to create more low-
cost permanent housing and to transition homeless
people to self-sufficiency and permanent housing.
‘‘(3) The Federal Government shall use the
Interagency Council on the Homeless as a vehicle to
coordinate services, programs, and funds to promote
the transition of homeless people to self-sufficiency
in permanent housing.
‘‘SEC. 402. GRANT AUTHORITY.
‘‘(a) IN GENERAL.—The Secretary may make grants
as provided under this title to eligible grantees for States,
metropolitan cities, urban counties, and insular areas for
carrying out eligible activities under subtitles B and C.
‘‘(b) GRANT AMOUNTS.—Except as otherwise pro-
vided under this title, amounts for a fiscal year allocated
under section 406 shall be used as follows:
‘‘(1) INSULAR
AREAS.—Any amounts for the
fiscal year allocated under section 406(a) for an in-
sular area shall be used for a grant to the eligible
grantee for the insular area for such fiscal year.
‘‘(2) PERMANENT
HOUSING
DEVELOPMENT.—
Any amounts allocated under section 406(b) for use
under subtitle B shall be used for grants under sec-
tion 406(b)(2) to States, metropolitan cities, and
urban counties for such fiscal year.
‘‘(3) FLEXIBLE BLOCK GRANT HOMELESS AS-
SISTANCE.—Any amounts allocated under section
406(c) for a State, metropolitan city, or urban coun-
ty, shall be used for a grant under section 406(c) to
the eligible grantee for the State, metropolitan city,
or urban county, for the fiscal year.
‘‘(c) 
USE
FOR
ELIGIBLE
ACTIVITIES.—Grant
amounts provided under this title and any supplemental
funds provided under section 407 may be used only as fol-
lows:
‘‘(1) INSULAR AREA GRANTS.—In the case of a
grant under subsection (b)(1) for an insular area,
for eligible activities under subtitle C benefiting the
insular area.
‘‘(2) PERMANENT
HOUSING
DEVELOPMENT
GRANTS.—In the case of a grant under subsection
(b)(2) to a State, metropolitan city, or urban county,
for eligible activities under subtitle B within the
State, metropolitan city, or urban county, respec-
tively.
‘‘(3) FLEXIBLE BLOCK GRANT HOMELESS AS-
SISTANCE.—In the case of a grant under subsection
(b)(3) for a State, metropolitan city, or urban coun-
ty, for eligible activities under subtitle C benefiting
the State, metropolitan city, or urban county, and
carried out only within nonentitlement areas of the
State, within the metropolitan city, or county, re-
spectively, or within a metropolitan city or county
that borders on the metropolitan city or county re-
ceiving the grant, as applicable.
‘‘SEC. 403. ELIGIBLE GRANTEES.
‘‘For purposes of this title, the term ‘eligible grantee’
has the following meaning:
‘‘(1) GRANTS
FOR
INSULAR
AREAS.—In the
case of a grant from amounts allocated under sec-
tion 406(a) for an insular area, such term means—
‘‘(A) the insular area, or an agency, office,
or other entity of the area; or
‘‘(B) to the extent that an entity that is a
private nonprofit organization is authorized by
the government of the insular area to act as the
grantee for the area for purposes of this title,
such private nonprofit entity.
‘‘(2) GRANTS FOR PERMANENT HOUSING DE-
VELOPMENT
AND
FLEXIBLE
ASSISTANCE.—In the
case of a grant from amounts allocated under sec-
tion 406(b) or section 406(c) for a State, metropoli-
tan city, or urban county, such term means—
‘‘(A) the State, metropolitan city, or urban
county, respectively, or an agency, office, or
other entity of the State, city, or county, re-
spectively; and
‘‘(B) to the extent that a private nonprofit
organization is authorized by the government of
the State, metropolitan city, county to act as
the grantee for the State, metropolitan city, or
county, respectively, for purposes of this title,
such private nonprofit organization.
‘‘SEC. 404. USE OF PROJECT SPONSORS.
‘‘(a) TRANSFER OF GRANT AMOUNTS BY GRANT-
EES.—Eligible activities assisted with grant amounts pro-
vided under this title may be carried out directly by the
grantee or by other entities serving as project sponsors
which are provided such grant amounts by the grantee or
a subgrantee of the grantee.
‘‘(b) COMPETITIVE SELECTION CRITERIA.—To the
extent that a grantee does not use grant amounts for eligi-
ble activities carried out directly by the grantee, the grant-
ee shall select eligible activities for assistance and project
sponsors to carry out such eligible activities pursuant to
a competition based on criteria established by the Sec-
retary, which shall include—
‘‘(1) whether the project sponsor that will carry
out the activity is financially responsible;
‘‘(2) the ability of the project sponsor to carry
out the eligible activity and the project sponsor’s ex-
perience in successfully transitioning homeless per-
sons into stable, long-term housing;
‘‘(3) the need for the type of eligible activity in
the area to be served;
‘‘(4) the extent to which the amount of assist-
ance to be provided with grant amounts will be sup-
plemented with resources from other public and pri-
vate sources;
‘‘(5) the cost-effectiveness of the proposed eligi-
ble activity, considered in relation to the ultimate
goal of moving people out of homelessness perma-
nently, including consideration of high-cost area
services, and other necessary amenities;
‘‘(6) the extent to which the project sponsor
carrying out the eligible activity—
‘‘(A) will coordinate with Federal, State,
local, and private entities serving homeless per-
sons in the development of a comprehensive
housing system and in the planning and oper-
ation of the activity; and
‘‘(B) will, pursuant to section 408(m)(3),
carry out the activity in coordination and con-
junction with federally funded activities for the
homeless;
‘‘(7) the extent to which the project sponsor
employs homeless persons or involves homeless per-
sons or formerly homeless persons in the operation
and design of its programs; and
‘‘(8) such other factors as the Secretary deter-
mines to be appropriate to carry out this title in an
effective and efficient manner.
‘‘SEC. 405. COMPREHENSIVE HOUSING AFFORDABILITY
STRATEGY COMPLIANCE.
‘‘A grant under this title may be provided to an eligi-
ble grantee only if—
‘‘(1) the applicable jurisdiction for which the
grant amounts are allocated under section 406 has
submitted to the Secretary a comprehensive housing
affordability strategy in accordance with section 105
of the Cranston-Gonzalez National Affordable Hous-
ing Act and any other requirement established by
the Secretary and which is in effect for the fiscal
year for which such grant amounts are to be pro-
vided; and
‘‘(2) the public official of such applicable juris-
diction who is responsible for submitting the com-
prehensive housing affordability strategy required by
paragraph (1) certifies to the Secretary that the eli-
gible activities to be assisted with such grant
amounts are or will be consistent with such com-
prehensive housing affordability strategy, including
the plans in such strategy for addressing housing
needs for homeless families.
‘‘SEC. 406. ALLOCATION AND AVAILABILITY OF AMOUNTS.
‘‘(a) ALLOCATION
FOR INSULAR AREAS.—Of the
amount made available for grants under this title for a
fiscal year, the Secretary shall reserve for grants for each
of the insular areas amounts in accordance with an alloca-
tion formula established by the Secretary.
‘‘(b) ALLOCATION FOR PERMANENT HOUSING DE-
VELOPMENT GRANTS UNDER SUBTITLE B.—
‘‘(1) ANNUAL
PORTION
OF
APPROPRIATED
AMOUNT AVAILABLE.—Of the amount made avail-
able for grants under this title for a fiscal year that
remains after amounts are reserved under subsection
(a), the Secretary shall allocate for use under sub-
title B, 30 percent of such funds.
‘‘(2) GRANTS.—Using the amounts allocated for
use under subtitle B for a fiscal year, the Secretary
shall make grants to States, metropolitan cities, and
urban counties pursuant to a national competition
based on the criteria specified in section 404(b) and
in accordance with such other factors and proce-
dures as the Secretary determines to be appropriate
to carry out this title in an effective and efficient
manner.
‘‘(3) LIMITATION.—In making grants using
amounts allocated for use under subtitle B for any
fiscal year, the Secretary shall ensure that not more
than 35 percent of the total amount allocated for
such use for such fiscal year is used for activities
under section 441 of this Act, as in effect on Octo-
ber 31, 1998.
‘‘(c) ALLOCATION
FOR FLEXIBLE BLOCK GRANT
HOMELESS ASSISTANCE UNDER SUBTITLE C.—
‘‘(1) ANNUAL
PORTION
OF
APPROPRIATED
AMOUNT AVAILABLE FOR SUBTITLE C ACTIVITIES.—
Of the amount made available for grants under this
title for a fiscal year that remains after amounts are
reserved under subsection (a), the Secretary shall al-
locate for use under subtitle C 70 percent of such
funds.
‘‘(2) ALLOCATION OF AMOUNT AVAILABLE BE-
TWEEN METROPOLITAN CITIES AND URBAN COUN-
TIES AND STATES.—Of the amount allocated pursu-
ant to paragraph (1) for use under subtitle C for a
fiscal year, 70 percent shall be allocated for metro-
politan cities and urban counties and 30 percent
shall be allocated for States.
‘‘(3) INTERIM DETERMINATION OF ALLOCATED
AMOUNT.—Except as provided in paragraph (4), the
Secretary shall allocate amounts available for use
under subtitle C for a fiscal year so that—
‘‘(A) for each metropolitan city and urban
county, the percentage of the total amount allo-
cated under this subsection for cities and coun-
ties that is allocated for such city or county is
equal to the percentage of the total amount
available for the preceding fiscal year under
section 106(b) of the Housing and Community
Development Act of 1974 for grants to metro-
politan cities and urban counties that was allo-
cated for such city or county; and
‘‘(B) for each State, the percentage of the
total amount allocated under this subsection for
States that is allocated for such State is equal
to the percentage of the total amount available
for the preceding fiscal year under section
106(d) of the Housing and Community Devel-
opment Act of 1974 for grants to States that
was allocated for such State.
‘‘(4) 
MINIMUM
APPROPRIATION
REQUIRE-
MENT.—If, by December 1 of any fiscal year, the
amount appropriated for grants under this title for
such fiscal year is less than $750,000,000—
‘‘(A) the Secretary shall not allocate
amounts for such fiscal year under subsection
(b) and this subsection;
‘‘(B) subsection (d) shall not apply to
amounts for such fiscal year; and
‘‘(C) notwithstanding any other provision
of this title, the Secretary shall make grants
under this title from such amounts to States,
units of general local government, and private
nonprofit organizations, pursuant to a national
competition based on the criteria specified in
section 404(b).
‘‘(5) STUDY; SUBMISSION OF INFORMATION TO
CONGRESS RELATED TO ALTERNATIVE METHODS OF
ALLOCATION.—Not later than 1 year after the date
of the enactment of the Homeless Housing Pro-
grams Consolidation and Flexibility Act, the Sec-
retary shall—
‘‘(A) submit to Congress—
‘‘(i) the best available methodology for
determining a formula relative to the geo-
graphic allocation of funds under this sub-
title among entitlement communities and
nonentitlement areas based on the inci-
dence of homelessness and factors that
lead to homelessness;
‘‘(ii) proposed alternatives to the for-
mula submitted pursuant to clause (i) for
allocating funds under this section, includ-
ing an evaluation and recommendation on
a 75/25 percent formula and other alloca-
tions of flexible block grant homeless as-
sistance between metropolitan cities and
urban counties and States under para-
graph (2);
‘‘(iii) an analysis of the deficiencies in
the current allocation formula described in
section 106(b) of the Housing and Com-
munity Development Act of 1974;
‘‘(iv) an analysis of the adequacy of
current indices used as proxies for measur-
ing homelessness; and
‘‘(v) an analysis of the bases underly-
ing each of the proposed allocation meth-
ods;
‘‘(B) perform the duties required by this
paragraph in ongoing consultation with—
‘‘(i) the Subcommittee on Housing
Opportunity and Community Development
of the Committee on Banking, Housing,
and Urban Affairs of the Senate;
‘‘(ii) the Subcommittee on Housing
and Community Opportunity of the Com-
mittee on Banking and Financial Services
of the House of Representatives;
‘‘(iii) 
organizations 
representing
States, metropolitan cities and urban coun-
ties;
‘‘(iv) organizations representing rural
communities;
‘‘(v) organizations representing veter-
ans;
‘‘(vi) organizations representing per-
sons with disabilities;
‘‘(vii) members of the academic com-
munity; and
‘‘(viii) national homelessness advocacy
groups; and
‘‘(C) estimate the amount of funds that
will be received annually by each entitlement
community and nonentitlement area under each
such alternative allocation system and compare
such amounts to the amount of funds received
by each entitlement community and nonentitle-
ment area in prior years under this section.
‘‘(6) MINIMUM ALLOCATION AMOUNTS.—
‘‘(A) IN GENERAL.—
‘‘(i) 
METROPOLITAN
CITIES
AND
URBAN COUNTIES.—Notwithstanding para-
graph (3), if for any fiscal year, the alloca-
tion under subtitle C for a metropolitan
city or urban county is less than 0.05 per-
cent of the amounts available for such use,
such metropolitan city or urban county
shall not receive a grant and its allocation
shall be added to the allocation for the
State in which such metropolitan city or
urban county is located, except that any
such metropolitan city or urban county
that received a grant under this title in a
previous fiscal year shall be allocated an
amount equal to 0.05 percent of the
amounts appropriated for such use.
‘‘(ii) STATES.—Notwithstanding para-
graph (3), if in any fiscal year the alloca-
tion under subtitle C for a State is less
than $2,000,000, the allocation for that
State shall be increased to $2,000,000 and
the increase shall be provided by deducting
pro rata amounts from the allocations
under such subtitle of States with alloca-
tions of more than $2,000,000.
‘‘(B) GRADUATED
MINIMUM
GRANT
ALLOCA-
TIONS.—Notwithstanding subparagraph (A) of this
paragraph and notwithstanding paragraph (3), a
State, metropolitan city, or urban county shall re-
ceive no less funding under this subsection in the
first full fiscal year after the date of the enactment
of the Homeless Housing Programs Consolidation
and Flexibility Act than 90 percent of the average
of the amounts awarded annually to that jurisdiction
for homeless assistance programs administered by
the Secretary (not including allocations for shelter
plus care and single room occupancy programs as
defined in, and in effect pursuant to, this Act prior
to the date of the enactment of the Homeless Hous-
ing Programs Consolidation and Flexibility Act)
under this title during fiscal years 1996 through
1999, no less than 85 percent in the second full fis-
cal year after the date of the enactment of the
Homeless Housing Programs Consolidation and
Flexibility Act, no less than 80 percent in the third
and fourth full fiscal years after the date of the en-
actment of the Homeless Housing Programs Con-
solidation and Flexibility Act, and no less than 75
percent in the fifth full fiscal year after the date of
the enactment of the Homeless Housing Programs
Consolidation and Flexibility Act, but only if the
amount appropriated pursuant to section 435 in
each such fiscal year exceeds $800,000,000. If that
amount does not exceed $800,000,000 in any fiscal
year referred to in the first sentence of this para-
graph, the jurisdiction may receive its proportionate
share of the amount appropriated which may be less
than the amount stated in such sentence for such
fiscal year.
‘‘(7) 
REDUCTION.—Notwithstanding 
para-
graphs (1) through (6), in any fiscal year, the Sec-
retary may provide a grant under this subsection for
a State, metropolitan city, or urban county, in an
amount less than the amount allocated under those
paragraphs, if the Secretary determines that the ju-
risdiction has failed to comply with requirements of
this title, or that such action is otherwise appro-
priate.
‘‘(d) RECAPTURE OF ALLOCATED AMOUNTS.—The
Secretary shall recapture the following amounts:
‘‘(1) UNUSED AMOUNTS.—Not less than once
during each fiscal year, the Secretary shall recapture
any amounts allocated under this section that—
‘‘(A) are allocated for a State, metropoli-
tan city or urban county, or insular area, but
not provided to an eligible grantee for the juris-
diction because of failure to apply for a grant
under this title or failure to comply with the re-
quirements of this title;
‘‘(B) were provided to a grantee and (i) re-
captured under this title, or (ii) not utilized by
the grantee in accordance with the purposes
and objectives of the approved application of
the grantee within a reasonable time period,
which the Secretary shall establish; or
‘‘(C) are returned to the Secretary by the
time of such reallocation.
‘‘(2) AMOUNTS ALLOCATED TO GRANTEES THAT
FAIL TO COMPLY WITH COMPREHENSIVE HOUSING
AFFORDABILITY
STRATEGY
REQUIREMENTS.—Not-
withstanding paragraph (1), if, for any fiscal year,
a metropolitan city or urban county fails to comply
with the requirement under section 405(1) during
the 90-day period beginning on the date that
amounts for grants under this title for such fiscal
year first become available for allocation, the
amounts that would have been allocated under sub-
section (c) of this section for such city or county
shall be reallocated for the State in which the unit
is located, but only if the State has complied with
the requirement under section 405(1). Any amounts
that cannot be allocated for a State under the pre-
ceding sentence shall be reallocated for other metro-
politan cities and urban counties and States that
comply with such requirement and demonstrate ex-
traordinary need or large numbers of homeless per-
sons, as determined by the Secretary.
‘‘(e) REALLOCATION OF AMOUNTS.—Any amounts
allocated under subsection (b) that are recaptured pursu-
ant to subsection (d)(1) shall be reallocated only for use
under subtitle B. Any amounts allocated under subsection
(c) that are recaptured pursuant to subsection (d)(1) shall
be reallocated only for use under subtitle C.
‘‘SEC. 407. MATCHING FUNDS REQUIREMENT.
‘‘(a) IN GENERAL.—Each State, metropolitan city or
urban county, and insular area for which a grant under
this title is made shall supplement the amount of the grant
provided under this title with an amount that is not less
than—
‘‘(1) 50 percent of the amount of such grant,
if the State, metropolitan city or urban county, and
insular area has indicated in its application for such
grant that it will not include as a portion of its sup-
plementation the cost or value of donated services;
or
‘‘(2) 100 percent of the grant amount, if the
State, metropolitan city, urban county, or insular
area indicated in its application for such grant that
it will include as a portion of its supplementation the
cost or value of donated services.
‘‘(b) MATCHING REQUIREMENT FOR USE OF MORE
THAN 35 PERCENT OF FUNDS FOR SUPPORTIVE SERV-
ICES.—In addition to the supplemental funds required
pursuant to subsection (a), for the second full fiscal year
after the date of the enactment of the Homeless Housing
Programs Consolidation and Flexibility Act and each fis-
cal year thereafter, a State, metropolitan city, or urban
county shall supplement the grant funds for the State,
metropolitan city, or urban county in an amount equal to
the amount used by that State, metropolitan city, or urban
county for supportive services in a fiscal year that exceeds
35 percent of the total grant amount for the State, metro-
politan city, or urban county for that fiscal year.
‘‘(c) TREATMENT
OF
INDEPENDENT
STATE
OR
LOCAL GOVERNMENT FUNDS.—Any State or local govern-
ment funds used independently from the program under
this title, or designated for such use, to assist the homeless
by carrying out activities that would be eligible for assist-
ance under this subtitle may be counted toward the
amount required pursuant to subsection (a).
‘‘(d) AUTHORITY FOR GRANTEES TO REQUIRE SUP-
PLEMENTATION.—
‘‘(1) IN GENERAL.—Each grantee under this
title may require any subgrantee or project sponsor
to whom it provides such grant amounts to provide
supplemental amounts required under subsections
(a) and (b) with an amount of funds from sources
other than this title.
‘‘(2) AMOUNT ALLOWED TO BE REQUIRED BY
GRANTEE.—
‘‘(A) GRANT
AMOUNT.—Except as pro-
vided in paragraph (3), a grantee may not re-
quire any subgrantee or project sponsor to
whom it provides such grant amounts under
this title to provide—
‘‘(i) supplemental amounts required
under subsection (a)(1) in an amount ex-
ceeding 25 percent of the grant amount
provided to the subgrantee or project spon-
sor; or
‘‘(ii) supplemental amounts required
under subsection (a)(2) in an amount ex-
ceeding 50 percent of the grant amount
provided to the subgrantee or project spon-
sor.
‘‘(B) SUPPORTIVE
SERVICES.—A grantee
may require any subgrantee or project sponsor
to whom it provides grant amounts under this
title to provide supplemental amounts required
under subsection (b) in an amount equal to the
amount used by subgrantee or project sponsor
for supportive services in a fiscal year that ex-
ceeds 35 percent of the total amount allocated
pursuant to this subsection for that fiscal year.
‘‘(3) SUPPLEMENTAL FUNDS MAY BE CONSID-
ERED
AS
MATCHING
FUNDS.—Supplemental
amounts provided by a subgrantee or project sponsor
pursuant to this subsection may be considered sup-
plemental amounts for purposes of compliance by
any grantee with the requirement under subsections
(a) and (b).
‘‘(e) USE OF FUNDS.—Any supplemental funds made
available in compliance with this section shall be available
only to carry out eligible activities (1) under subtitle B,
if the grant amounts are available only for such activities,
or (2) under subtitle C, if the grant amounts are available
only for such activities.
‘‘(f) SUPPLEMENTAL FUNDS.—In determining the
amount of supplemental funds provided in accordance with
this section, the following amounts may be included:
‘‘(1) Cash.
‘‘(2) The value of any donated or purchased
material or building.
‘‘(3) The value of any lease on a building.
‘‘(4) The proceeds from bond financing validly
issued by a State or unit of general local govern-
ment, agency, or instrumentality thereof, and repay-
able with revenues derived from the activity assisted
under this title.
‘‘(5) The amount of any salary paid to staff to
carry out a program for eligible activities under sub-
title B or C.
‘‘(6) The cost or value of any donated goods.
‘‘(7) The value of taxes, fees, or other charges
that are normally and customarily imposed, but
which are waived or foregone to assist in providing
housing or services for the homeless.
‘‘(8) The cost of on-site and off-site infrastruc-
ture that is directly related to and necessary for pro-
viding housing or services for the homeless.
‘‘(9) The cost or value of any donated services,
but only if the State, metropolitan city, urban coun-
ty, or insular area has stated in its application for
a grant under this title that it shall supplement the
amount of such grant, in accordance with section
407(a)(2).
‘‘(g) REDUCTION IN MATCHING REQUIREMENTS.—If
a jurisdiction certifies to the Secretary that it is in fiscal
distress (as defined in section 220(d)(2) of the Cranston-
Gonzalez National Affordable Housing Act) for a fiscal
year, the Secretary shall apply the matching requirement
under subsection (a) to such jurisdiction for such fiscal
year by reducing such percentage under subsection (a) to
the same extent, in the same manner, and according to
the same criteria as matching requirements are reduced
under section 220(d) of the Cranston-Gonzalez National
Affordable Housing Act.
‘‘SEC. 408. PROGRAM REQUIREMENTS.
‘‘(a) APPLICATIONS.—
‘‘(1) FORM AND PROCEDURE.—The Secretary
shall make a grant under this title only pursuant to
an application for a grant submitted by an eligible
grantee in the form required by this section and in
accordance with such other factors and procedures
as the Secretary determines to be appropriate. The
Secretary may not give preference or priority to any
application on the basis that the application was
submitted by any particular type of eligible grantee.
‘‘(2) CONTENTS.—The Secretary shall require
that applications contain at a minimum the following
information:
‘‘(A) GRANTS FOR PERMANENT HOUSING
DEVELOPMENT ACTIVITIES.—In the case of an
application for a grant available for use for ac-
tivities under subtitle B or an application for a
grant available for use under subtitle C for per-
manent housing development assistance—
‘‘(i) a description of the permanent
housing development activities to be as-
sisted;
‘‘(ii) a description of the entities that
will carry out such activities and the pro-
grams for carrying out such activities; and
‘‘(iii) assurances satisfactory to the
Secretary that the facility will comply with
the requirement under subsection (j).
‘‘(B) FLEXIBLE BLOCK GRANT HOMELESS
ASSISTANCE.—In the case of an application for
a grant available for use for activities under
subtitle C—
‘‘(i) a description of the eligible activi-
ties to be assisted, to the extent available
at the time;
‘‘(ii) in the case of a grant for a facil-
ity assisted under paragraph (1) or (2) of
section 421(a), assurances satisfactory to
the Secretary that the facility will comply
with the requirement under subsection (j);
‘‘(iii) in the case of a grant for a sup-
portive housing facility assisted under this
title that does not receive assistance under
paragraph (1) or (2) of section 421(a), an-
nual assurances during the period specified
in the application that the facility will be
operated for the purpose specified in the
application for such period; and
‘‘(iv) in the case of a grant for a sup-
portive housing facility, reasonable assur-
ances that the project sponsor will own or
have control of a site not later than the ex-
piration of the 12-month period beginning
upon notification of an award of grant as-
sistance, unless the application proposes
providing 
supportive 
housing 
assisted
under section 421(a)(3) or housing that
will eventually be owned or controlled by
the families and individuals served; except
that a project sponsor may obtain owner-
ship or control of a suitable site different
from the site specified in the application.
‘‘(C) ALL GRANTS.—In the case of an ap-
plication for any grant under this title—
‘‘(i) a description of the size and char-
acteristics of the population, including spe-
cific references to populations with special
needs, that will be served by the eligible
activities assisted with grant amounts;
‘‘(ii) a description of the public and
private resources that are expected to be
made available in connection with grant
amounts provided;
‘‘(iii) a description of the process to
be used in compliance with section 404(b)
to select eligible activities to be assisted
and project sponsors;
‘‘(iv) a certification that the applicant
will comply with the requirements of the
Fair Housing Act, title VI of the Civil
Rights Act of 1964, section 504 of the Re-
habilitation Act of 1973, and the Age Dis-
crimination Act of 1975, and will affirma-
tively further fair housing; and
‘‘(v) a statement of whether the appli-
cant will or will not include, as a portion
of its supplementation amount required
under section 407(a), the cost or value of
donated services.
‘‘(b) REQUIRED AGREEMENTS.—The Secretary may
not provide a grant under this title for any applicant un-
less the applicant agrees—
‘‘(1) to ensure that the eligible activities carried
out with grant amounts will be carried out in ac-
cordance with the provisions of this title;
‘‘(2) to conduct an ongoing assessment of the
supportive services required by homeless persons as-
sisted by the eligible activities and the availability of
such services to such persons;
‘‘(3) in the case of grant amounts to be used
under subtitle C for a supportive housing facility or
an emergency shelter, to ensure the provision of
such residential supervision as the Secretary deter-
mines is necessary to facilitate the adequate provi-
sion of supportive services to the residents and users
of the facility or shelter;
‘‘(4) to monitor and report under section 431 to
the Secretary on the progress of the eligible activi-
ties carried out with grant amounts;
‘‘(5) to develop and implement procedures to
ensure—
‘‘(A) the confidentiality of records pertain-
ing to any individual provided family violence
prevention or treatment services through any
activities assisted with grant amounts; and
‘‘(B) that the address or location of any
family violence shelter facility assisted with
grant amounts will not be made public, except
with written authorization of the person or per-
sons responsible for the operation of such facil-
ity;
‘‘(6) to the maximum extent practicable, to in-
volve homeless persons and families, through em-
ployment, volunteer services, or otherwise, in carry-
ing out eligible activities assisted with grant
amounts; and
‘‘(7) to comply with such other terms and con-
ditions as the Secretary may establish to carry out
this title in an effective and efficient manner.
‘‘(c) OCCUPANCY CHARGE.—Any homeless person or
family residing in a dwelling unit assisted under this title
may be required to pay an occupancy charge in an amount
determined by the grantee providing the assistance, which
may not exceed an amount equal to 30 percent of the ad-
justed income (as such term is defined in section 3(b) of
the United States Housing Act of 1937 or any other sub-
sequent provision of Federal law defining such term for
purposes of eligibility for, or rental charges in, public
housing) of the person or family. Occupancy charges paid
may be reserved, in whole or in part, to assist residents
in moving to permanent housing.
‘‘(d) FLOOD PROTECTION STANDARDS.—Flood pro-
tection standards applicable to housing acquired, rehabili-
tated, constructed, or assisted with grant amounts pro-
vided under this title shall be no more restrictive than the
standards applicable under Executive Order No. 11988
(42 U.S.C. 4321 note; relating to floodplain management)
to the other programs in effect under this title imme-
diately before the enactment of the Homeless Housing
Programs Consolidation and Flexibility Act.
‘‘(e) PARTICIPATION OF CITIZENS AND OTHERS.
‘‘(1) IN GENERAL.—Each grantee shall—
‘‘(A) each fiscal year, make available to its
citizens, public agencies, and other interested
parties information concerning the amount of
assistance the jurisdiction expects to receive
and the range of activities that may be under-
taken with the assistance;
‘‘(B) publish the proposed application in a
manner that, in the determination of the Sec-
retary, affords affected citizens, public agencies,
and other interested parties a reasonable oppor-
tunity to examine its content and to submit
comments on it;
‘‘(C) each fiscal year, hold one or more
public hearings to obtain the views of citizens,
public agencies, and other interested parties on
the housing needs of the jurisdiction; and
‘‘(D) provide citizens, public agencies, and
other interested parties with reasonable access
to records regarding any uses of any assistance
the grantee may have received under this sub-
title during the preceding 5 years.
‘‘(2) ELECTRONIC
ACCESS.—A grantee may
comply with the requirement under subparagraphs
(A), (B), and (D) of paragraph (1) by making the
information available through interactive computer
or telephone services or other electronic information
networks and systems appropriate for making such
information widely available to the public.
‘‘(3) NOTICE AND COMMENT.—Before submit-
ting any substantial amendment to an application
under this Act, a grantee shall provide citizens with
reasonable notice of, and opportunity to comment
on, the amendment.
‘‘(4) CONSIDERATION OF COMMENTS.—A grant-
ee shall consider any comments or views of citizens
in preparing a final application or amendment to an
application for submission. A summary of such com-
ments or views shall be attached when an application
or amendment to an application is submitted. The
submitted application or amendment shall be made
available to the public.
‘‘(5) AUTHORITY
OF
SECRETARY.—The Sec-
retary shall establish procedures appropriate and
practicable for providing a fair hearing and timely
resolution of citizen complaints related to applica-
tions under this subtitle.
‘‘(6) HOMELESS INDIVIDUALS.—The Secretary
shall, by regulation, require each grantee to ensure
that each project sponsor assisted by the grantee
provides for the participation of not less than 1
homeless person or former homeless person on the
board of directors or other equivalent policymaking
entity of the project sponsor, to the extent that such
sponsor considers and makes policies and decisions
regarding any activity, facility, supportive services,
or assistance provided with grant amounts under
this title. The Secretary shall provide that a grantee
may grant waivers to project sponsors unable to
meet the requirement under the preceding sentence
if the sponsor agrees to otherwise consult with
homeless or formerly homeless persons in consider-
ing and making such policies and decisions.
‘‘(f) LIMITATION
ON USE
OF FUNDS.—No grant
amounts received under this title (or any funds provided
under section 407 or otherwise to supplement such grants)
may be used to replace other State or local funds pre-
viously used, or designated for use, to assist homeless per-
sons.
‘‘(g) LIMITATION ON ADMINISTRATIVE EXPENSES.—
Notwithstanding any other provision of this title, of any
grant amounts under this title used to carry out eligible
activities, the grantee or the project sponsor may use for
administrative purposes—
‘‘(1) an amount not exceeding 5 percent of such
grant amount; or
‘‘(2) if the grantee implements use of a stand-
ardized homeless database management system to
record and assess data on the usage of homeless
housing, services, and client needs, and on the num-
ber of and other information related to populations
with special needs, an amount not exceeding 7.5 per-
cent of such grant amount.
‘‘(h) HOUSING QUALITY.—
‘‘(1) REQUIREMENT.—Assistance may not be
provided with grant amounts made available for use
under this title for any permanent housing develop-
ment, dwelling unit, supportive housing facility, or
emergency shelter that fails to comply with the hous-
ing quality standards applicable under paragraph (2)
in the jurisdiction in which the housing is located,
unless the deficiency is promptly corrected and the
project sponsor verifies the correction.
‘‘(2) APPLICABLE
STANDARDS.—The housing
quality standards applicable under this subsection to
any permanent housing, dwelling unit, supportive
housing facility, or emergency shelter shall be—
‘‘(A) in the case of permanent housing, a
unit, facility, or shelter located in a jurisdiction
which has in effect laws, regulations, standards,
or codes regarding habitability of such housing,
units, facilities, or shelters that provide protec-
tion to residents of the dwellings that is equal
to or greater than the protection provided under
the housing quality standards established under
paragraph (3), such applicable laws, regula-
tions, standards, or codes; or
‘‘(B) in the case of permanent housing, a
unit, facility, or shelter located in a jurisdiction
which does not have in effect laws, regulations,
standards, or codes described in subparagraph
(A), the housing quality standards established
under paragraph (3).
‘‘(3) FEDERAL
HOUSING
QUALITY
STAND-
ARDS.—The Secretary shall establish housing quality
standards under this paragraph that ensure that
permanent housing, dwelling units, supportive hous-
ing facilities, and emergency shelters assisted under
this title are safe, clean, and healthy. Such stand-
ards shall include requirements relating to habit-
ability, including maintenance, health and sanitation
factors, condition, and construction of dwellings. The
Secretary shall differentiate between major and
minor violations of such standards and may estab-
lish separate standards for permanent housing,
dwelling units, supportive housing facilities, and
emergency shelters.
‘‘(i) TERMINATION OF ASSISTANCE.—If a person or
family (not including residents of an emergency shelter)
who receives assistance under this title violates program
requirements, the project sponsor may terminate assist-
ance in accordance with a formal process established by
such sponsor that recognizes the rights of individuals re-
ceiving such assistance to due process of law, which may
include a hearing.
‘‘(j) USE RESTRICTIONS.—
‘‘(1) ACQUISITION, REHABILITATION, AND NEW
CONSTRUCTION.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), each housing facility assisted
under subtitle B or subtitle C shall be operated
as housing for the purpose specified in the ap-
plication for assistance with amounts under this
title for not less than 20 years after such facil-
ity is initially placed in service pursuant to such
assistance.
‘‘(B) EXCEPTIONS.—
(i) INABILITY
TO
OPERATE
FACIL-
ITY.—If, within such 20-year period, the
need for maintaining the facility as hous-
ing for the purpose specified in the appli-
cation for assistance ceases to exist (as de-
termined by the Secretary pursuant to a
recommendation by the chief executive offi-
cer of the appropriate unit of general local
government or project sponsor, taking into
consideration the comprehensive housing
affordability strategy of the jurisdiction),
or the project sponsor is unable to operate
the facility as supportive housing, the facil-
ity may be used as affordable housing (in
accordance with section 215 of the Cran-
ston-Gonzalez National Affordable Housing
Act).
‘‘(ii) APPLICABILITY OF OTHER PRO-
GRAM RESTRICTION.—If the housing facil-
ity receives assistance under any other
Federal program (including assistance
under section 42 of the Internal Revenue
Code of 1986) for low-income families,
homeless persons, or any other use consist-
ent with assistance under this title, and
the use restriction under such program is
less than 20 years, the restriction under
such program shall apply.
‘‘(2) OTHER ASSISTANCE.—Each housing facil-
ity assisted under subtitle C shall be operated for
the purposes specified in the application for assist-
ance with amounts under this title for the duration
of the period covered by the grant.
‘‘(3) 
CONVERSION.—Notwithstanding 
para-
graphs (1) and (2), if the Secretary determines that
a housing facility is no longer needed for use as
housing for the purposes specified in the application
for assistance and approves the use of the facility
for the direct benefit of low-income persons pursuant
to a request for such use by the project sponsor, the
Secretary may authorize the sponsor to convert the
facility to such use.
‘‘(k) REPAYMENT OF ASSISTANCE AND PREVENTION
OF UNDUE BENEFITS.—
‘‘(1) REPAYMENT.—If a facility assisted under
subtitle B or subtitle C violates the requirement
under subsection (j)(1)(A) or (j)(1)(B)(ii) of this
section during the 10-year period beginning upon
placement of the facility in service pursuant to such
assistance, the Secretary shall require the grantee to
repay to the Secretary 100 percent of any grant
amounts received for such facility under such para-
graph. If such a facility violates such requirement
after such 10-year period, the Secretary shall require
the grantee to repay the percentage of any grant
amounts received for such facility that is equal to
100 percent minus 10 percent for each year in ex-
cess of 10 that the facility is operated as supportive
housing.
‘‘(2) PREVENTION OF UNDUE BENEFITS.—Ex-
cept as provided in paragraph (3), upon any sale or
other disposition of a facility assisted under subtitle
B or C occurring before the expiration of the 20-
year period beginning on the date that the facility
is placed in service, the project sponsor shall comply
with such terms and conditions as the Secretary may
prescribe to prevent the sponsor from unduly bene-
fiting from such sale or disposition.
‘‘(3) EXCEPTION.—Paragraphs (1) and (2)
shall not apply to any sale or disposition of a facility
that results in the use of the facility for the direct
benefit of very low-income families if all of the pro-
ceeds are used to provide housing meeting the re-
quirements of subtitle B or C.
‘‘(4) FAILURE TO OBTAIN SITE.—If a grantee
of assistance made available for use under this title
obligates assistance for a housing facility other than
a facility under section 421(a)(3) or housing that
will eventually be owned or controlled by the families
and individuals served, and the project sponsor fails
to obtain ownership or control of a suitable site for
a proposed supportive housing facility during the 12-
month period beginning upon the notification of an
award of grant assistance, the grantee shall recap-
ture the assistance and make such assistance avail-
able under this subtitle.
‘‘(l) LOCAL BOARDS.—
‘‘(1) ESTABLISHMENT
AND
FUNCTION.—The
head of the executive branch of government of each
grantee shall establish and appoint members to a
local board, which shall assist the jurisdiction in—
‘‘(A) determining whether the grant should
be administered by the jurisdiction, a public
agency, a private nonprofit organization, the
State, or the Secretary;
‘‘(B) developing the application under sec-
tion 408;
‘‘(C) overseeing the activities carried out
with assistance under this title; and
‘‘(D) preparing the performance report
under section 431.
‘‘(2) COMPOSITION OF LOCAL BOARDS.—
‘‘(A) NOMINATION.—Members of a local
board appointed to meet the requirements of
subparagraph (D) shall be nominated by per-
sons, other than governmental officials or enti-
ties, that represent the groups listed in sub-
paragraph (D).
‘‘(B) PRIORITY.—Persons who will improve
access to a broad range of services for homeless
persons and who are sensitive to the varying
needs of homeless persons, including veterans,
the mentally ill, families with children, young
persons, battered spouses, victims of substance
abuse, and persons with AIDS, shall be given
preference when selecting local board members.
‘‘(C) 
COMMUNITY
SUPPORT
CONSID-
ERED.—In appointing members to the local
board, the chief executive of each grantee shall
consider the extent of support for the nominee
in the community which the board shall serve.
‘‘(D) MAJORITY.—Not less than 51 per-
cent of the members of a local board shall be
composed of—
‘‘(i) homeless or formerly homeless
persons;
‘‘(ii) persons who act as advocates for
homeless persons; and
‘‘(iii) persons who provide assistance
to homeless persons, including representa-
tives of local veterans organizations and
veteran service providers who assist home-
less veterans.
‘‘(E) OTHER LOCAL BOARD MEMBERS.—
After the requirements of subparagraph (D) are
met, other members of a local board shall be
chosen from—
‘‘(i) members of the business commu-
nity of the jurisdiction receiving the grant;
‘‘(ii) members of neighborhood advo-
cates in the jurisdiction receiving the
grant; and
‘‘(iii) government officials of the juris-
diction receiving the grant.
‘‘(3) WAIVER OF REQUIREMENTS FOR LOCAL
BOARD.—The Secretary may waive the requirements
of this subsection if the jurisdiction has an existing
board that substantially meets the requirements of
this subsection.
‘‘(m) COORDINATION OF HOMELESS PROGRAMS.—
‘‘(1) PURPOSE.—The purpose of the consulta-
tion and coordination required under this subsection
is to provide various services, activities, and assist-
ance for homeless persons and families in an effi-
cient, effective, and targeted manner designed to
meet the comprehensive needs of the homeless.
‘‘(2) IN
GENERAL.—The Chairperson of the
Interagency Council on the Homeless shall consult
and coordinate with the Secretary of Housing and
Urban Development, the Secretary of Health and
Human Services, the Secretary of Labor, the Sec-
retary of Education, the Secretary of Veterans Af-
fairs, and the Secretary of Agriculture and shall en-
sure that assistance for federally funded activities
for the homeless is made available, to the greatest
extent practicable, in conjunction and coordination
with assistance for other federally funded activities
for the homeless and with assistance under this title.
‘‘(3) REQUIREMENTS
FOR
HOUSING
ASSIST-
ANCE.—The Secretary shall establish such require-
ments as the Secretary considers necessary to ensure
that grant amounts provided under this title are
used by grantees and project sponsors, to the great-
est extent practicable, in coordination and in con-
junction with federally funded activities for the
homeless.
‘‘(4) DEFINITION.—For purposes of this sub-
section, the term ‘federally funded activities for the
homeless’ means activities to assist homeless per-
sons, including homeless veterans, or homeless fami-
lies that are funded (in whole or in part) with
amounts provided by the Federal Government (other
than amounts provided under this title) and
includes—
‘‘(A) the programs for health care under
sections 340 and part C of title V of the Public
Health Service Act;
‘‘(B) the programs for education, training
and community services under title VII of the
Stewart B. McKinney Homeless Assistance Act;
‘‘(C) food assistance for homeless persons
and families through the food programs under
the Food Stamp Act of 1977 and the Emer-
gency Food Assistance Act of 1983;
‘‘(D) the job training, housing, and medi-
cal programs for homeless veterans of the De-
partment of Veterans Affairs;
‘‘(E) the job corps centers for homeless
families program under section 433A of the Job
Training Partnership Act;
‘‘(F) the program for preventive services
for children of homeless families or families at
risk of homelessness under title III of the Child
Abuse Prevention and Treatment Act;
‘‘(G) the programs under the Runaway
and Homeless Youth Act; and
‘‘(H) assistance for homeless persons, in-
cluding homeless veterans, and families under
State programs funded under supplemental se-
curity income programs under part A of title IV
or under title XVI of the Social Security Act.
‘‘(5) COMPANION SERVICES BLOCK GRANTS IN
CASES OF FAILURE TO COMPLY.—
‘‘(A) IN GENERAL.—If, for any fiscal year,
the Chairperson of the Interagency Council on
the Homeless determines that adequate coordi-
nation has not taken place to ensure that as-
sistance for federally funded activities for the
homeless is made available in conjunction and
coordination with assistance under this title (as
required under paragraph (2)), the Chairperson
of the Interagency Council on the Homeless and
the Secretary, in consultation with the Inter-
agency Council on the Homeless, shall carry out
a program under subparagraph (B) to make
companion services block grants available for
such fiscal year.
‘‘(B) 
COMPANION
SERVICE
BLOCK
GRANTS.—The block grant program under this
subparagraph shall provide block grants, using
amounts available pursuant to subparagraph
(C), to eligible grantees under this title to pro-
vide services of the type available under the
programs referred to in paragraph (4) in con-
nection with housing assistance under this title.
‘‘(C) FUNDING.—
‘‘(1) AUTHORIZED USE.—A State, metropolitan
city, or urban county that receives a grant under
section 402(b)(2) from amounts allocated for use
under this subtitle may use grant amounts (and any
supplemental amounts provided under section 407)
only to carry out permanent housing development
activities within such State, metropolitan city, or
urban county. For purposes of this subtitle, the term
‘permanent housing development activities’ means
activities to construct, substantially rehabilitate, or
acquire structures to provide permanent housing, in-
cluding the capitalization of a dedicated project ac-
count from which long-term assistance payments
(which may include operating costs or rental assist-
ance) can be made in order to facilitate such activi-
ties, and activities under section 441 of the this Act,
as in effect on October 31, 1998 (subject to the limi-
tation in section 406(b)(3) of this Act).
‘‘(2) USE FOR SUPPORTIVE SERVICES PROHIB-
ITED.—Amounts allocated for use under this subtitle
may not be used for supportive services activities.
‘‘(b) USE THROUGH NONPROFIT ORGANIZATIONS.—
‘‘(1) IN
GENERAL.—A grantee that receives
grant amounts for a fiscal year for use under this
subtitle may, pursuant to section 404, provide such
amounts to units of general local government and
private nonprofit organizations for use in accordance
with this subtitle, except that the grantee shall en-
sure that more than 50 percent of the amounts re-
ceived by the grantee for the fiscal year are used
through private nonprofit organizations.
‘‘(2) WAIVER OF USE OF NONPROFIT REQUIRE-
MENT.—The Secretary may waive the requirement
under paragraph (1) that a grantee ensure that
more than 50 percent of the amounts received by the
grantee for the fiscal year are used through private
nonprofit organizations if the Secretary determines
that there are not sufficient private nonprofit orga-
nizations available to the grantee to meet that re-
quirement.
‘‘(c) ADMINISTRATIVE FEE.—To the extent provided
in section 408(g), grant amounts provided under this sub-
title may be used by the project sponsor providing such
assistance for costs of administering such assistance.
‘‘(d) TARGETING
POPULATIONS
WITH
SPECIAL
NEEDS.—To the maximum extent practicable, a grantee
shall provide for use of grant amounts made available
under this subtitle in a manner that provides permanent
housing for homeless persons with disabilities, homeless
persons with acquired immunodeficiency syndrome or re-