(D) by redesignating subparagraphs (F)
and (G) as subparagraphs (E) and (F), respec-
tively; and
(E) by adding at the end the following new
flush material:
‘‘In making grants under this subsection, the Sec-
retary may select a lower-rated application that
meets the requirements pursuant to this section in-
stead of a higher-rated application to increase the na-
tional geographic diversity among applications ap-
proved under this section.’’.
(c) EXCEPTIONS TO GENERAL PROGRAM REQUIRE-
MENTS.—Section 24(e) of the United States Housing Act
of 1937 is amended—
(1) by striking the first sentence of paragraph
(2) and inserting the following new sentence: ‘‘For
projects revitalized under this section, a public hous-
ing agency may—
‘‘(A) in lieu of selecting tenants pursuant to
the 
preferences 
specified 
under 
section
6(c)(4)(A)(i), select tenants pursuant to a local
system of preferences;
‘‘(B) in making dwelling units in such
projects available for occupancy, disregard the
order in which applications were made for resi-
dency in public housing dwelling units or any
waiting lists established for such residency to
provide for substantial variation in the incomes
of families residing in the project, subject to the
provisions of this Act relating to income eligi-
bility in public housing projects (as modified
under subparagraph (C));
‘‘(C) notwithstanding section 16 of this Act,
provide for low-income families to occupy not
more than 50 percent of the dwelling units in a
project, and
‘‘(D) establish ceiling rents under section
3(a)(2).’’; and
(2) by adding at the end the following new para-
graph:
‘‘(3) DEMOLITION AND REPLACEMENT.—
‘‘(A) IN
GENERAL.—Notwithstanding any
other applicable law or regulation, a revitaliza-
tion plan under this section may include demoli-
tion of public housing units and replacement of
such units on site or in the same neighborhood
if the number of replacement units provided in
the same neighborhood is fewer than the number
of units demolished as a result of the revitaliza-
tion effort.
‘‘(B) 
TENANT-BASED
ASSISTANCE.—Not-
withstanding the limitation in subparagraph (C)
of section 18(b)(3), a public housing agency may
replace not more than one-third of the units de-
molished or disposed of through a revitalization
project under this section with tenant-based as-
sistance under section 8, but only if the public
housing agency demonstrates to the satisfaction
of the Secretary that the local housing market in
which the assistance is to be used has had a va-
cancy rate, among units whose rent does not ex-
ceed the fair market rental for the area estab-
lished under section 8(e), of more than 3 percent
for at least 6 consecutive months.
‘‘(C) ALTERNATIVE METHODS OF REPLACE-
MENT.—A revitalization plan under this section
may provide for replacement of public housing
units in the manners under subparagraph (D) of
this paragraph (and not subject to the require-
ments of subparagraph (B) of section 18(b)(3)) if
the agency or corporation enters into such agree-
ments as the Secretary considers necessary to en-
sure that the replacement units will remain af-
fordable to families eligible for residency in pub-
lic housing for the remaining useful life of the
units, as determined by the Secretary.
‘‘(D) CERTIFICATE AND NEW UNIT MIX.—
Each such dwelling unit demolished, disposed of,
or otherwise eliminated pursuant to this para-
graph shall be replaced with an additional
dwelling unit through any combination of—
‘‘(i) additional public housing dwelling
units;
‘‘(ii) units or housing described in
clause (iv), (v), (vii), (viii), or (ix) of sec-
tion 18(b)(3)(A);
‘‘(iii) rental units that are (I) assisted
under title II of the Cranston-Gonzalez Na-
tional Affordable Housing Act (notwith-
standing section 212(d)(2) of such Act), or
(II) assisted under a State or local rental
assistance program that provides for rental
assistance over a term of not less than 5
years that is comparable in terms of eligi-
bility and contribution to rent to assistance
under section 8; but this clause shall apply
to a revitalization program only if the
agency demonstrates to the satisfaction of
the Secretary that the local housing market
in which the assistance is to be used has
had a vacancy rate, among units whose rent
does not exceed the fair market rental for
the area established under section 8(e), of
more than 3 percent for at least 6 consecu-
tive months; or
‘‘(iv) other manners approved by the
Secretary.’’.
(d) DEFINITIONS.—Subsection (h) of section 24 of the
United States Housing Act of 1937 is amended—
(1) by striking paragraph (5) and inserting the
following new paragraphs:
‘‘(6) SEVERELY DISTRESSED PUBLIC HOUSING.—
The term ‘severely distressed public housing’ means a
public housing project or building in a project that—
‘‘(A) requires major redesign, reconstruc-
tion, or redevelopment, or partial or total demo-
lition, to correct serious deficiencies in the origi-
nal design (including inappropriately high pop-
ulation density), deferred maintenance, physical
deterioration or obsolescence of major systems,
and other deficiencies in the physical plant of
the project;
‘‘(B) is—
‘‘(i)(I) occupied predominantly by
families with children which have extremely
low incomes, high rates of unemployment,
and extensive dependency on various forms
of public assistance; and
‘‘(II) has high rates of vandalism and
criminal activity (including drug-related
criminal activity) in comparison to other
housing in the area; or
‘‘(ii) has a vacancy rate, as determined
by the Secretary, of 50 percent or more;
‘‘(C) can not be revitalized through assist-
ance under other programs, such as the programs
under sections 9 and 14, or through other ad-
ministrative means because of the inadequacy of
available amounts; and
‘‘(D) in the case of an individual building,
the building is (in the determination of the Sec-
retary) sufficiently separable from the remainder
of the project of which the building is part to
make use of the building feasible for purposes of
this section.
‘‘(7) SUPPORT
SERVICES.—The term ‘support
services’ includes all activities which will promote up-
ward mobility, self-sufficiency, and improved quality
of life for the residents of the public housing project
involved, and shall include literacy training, job
training, day care, and economic development activi-
ties. Support services may be provided to residents of
the neighborhood in which the public housing project
involved is located.’’;
(2) by redesignating paragraphs (2) through (4)
as paragraphs (3) through (5), respectively; and
(3) by inserting after paragraph (1) the follow-
ing new paragraph:
‘‘(2) COMMUNITY SERVICE.—The term ‘commu-
nity service’ means services provided on a volunteer
or limited stipend basis for the social, economic, or
physical improvement of the community to be served,
including opportunity for the upward mobility of
participants 
providing 
the 
community 
service,
through completion of education requirements, job
training, or alternative methods of developing skills
and job readiness.’’.
(e) REPORTS.—Section 24(i) of the United States
Housing Act of 1937 is amended—
(1) by striking paragraph (2); and
(2) by redesignating paragraphs (3) and (4) as
paragraphs (2) and (3), respectively.
(f) REPEAL.—Section 24 of the United States Housing
Act of 1937 (42 U.S.C. 1437v) is amended by striking sub-
section (b).
(g) APPLICABILITY.—Section 24 of the United States
Housing Act of 1937 is amended by adding at the end the
following new subsection:
‘‘(j) APPLICABILITY.—Notwithstanding any provision
of this Act, with respect to a public housing project that
(1) has been selected for funding under this section 24 or
through the urban revitalization demonstration program
under the Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies Appro-
priations Act, 1993 (Public Law 102–389, 106 Stat. 1579;
42 U.S.C. 1437l note) or the Departments of Veterans Af-
fairs and Housing and Urban Development, and Independ-
ent Agencies Appropriations Act, 1994 (Public Law 103–
124, 107 Stat. 1285; 42 U.S.C. 1437l note), and (2) has
an approved comprehensive plan under section 14 of this
Act, the Secretary may apply any provision of this section
and the regulations hereunder to all activities undertaken
at such projects only during revitalization (including ac-
tivities relating to demolition, modernization, reconstruc-
tion, site improvement, and replacement housing).’’.
(h) CONFORMING AMENDMENT.—The first sentence of
section 25(m)(1) of the United States Housing Act of 1937
(42 U.S.C. 1437w(m)(1)) is amended to read as follows:
‘‘The term ‘eligible housing’ means a public housing project,
or one or more buildings within a project, that is owned
or operated by a troubled public housing agency that has
been troubled for not less than 3 years and that, as deter-
mined by the Secretary, has failed to make substantial
progress toward effective management.’’.
(i) APPLICABILITY
TO
CERTAIN
PROJECT.—The
amendments made by this section shall apply with respect
to assistance provided before the date of the enactment of
this Act under section 24 of the United States Housing Act
of 1937 for the Desire Housing Development, located in New
Orleans, Louisiana, but only to the extent that the Housing
Authority of New Orleans submits to the Secretary of Hous-
ing and Urban Development a description of the revitaliza-
tion program for such project describing the use of such as-
sistance under the provisions of such section 24, as amend-
ed, which is approved by the Secretary.
SEC. 128. PROGRAM MONITORING AND TECHNICAL ASSIST-
ANCE.
(a) DEFINITION.—Section 3 of the United States
Housing Act of 1937 (42 U.S.C. 1437a), as amended by
adding at the end the following new subsection:
‘‘(e) TECHNICAL ASSISTANCE AND SERVICES.—As used
in sections 5(c)(9) and 14(k)(1)(B), the term ‘technical as-
sistance and services’ shall include any or all undertakings
by the Secretary, directly using officials and employees of
the Secretary, or indirectly under contract or otherwise, re-
lated to the inspection or oversight of project or program
development or implementation, training and technical as-
sistance, public housing agency or Indian housing author-
ity program, project, or general management, crisis man-
agement and operations, survey research, and the prepara-
tion of reports or recommendations to the Secretary.’’.
(b) AVAILABILITY OF DEVELOPMENT AMOUNTS.—Sec-
tion 5(c) of the United States Housing Act of 1937 (42
U.S.C. 1437c(c)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(9) Of any amounts appropriated pursuant to this
Act in fiscal year 1995 for public housing development (in-
cluding Indian housing development), the Secretary may
use not more than 0.5 percent for technical assistance and
services.’’.
(c) AVAILABILITY OF MODERNIZATION AMOUNTS.—
Section 14(k)(1) of the United States Housing Act of 1937
(42 U.S.C. 1437l(k)(1)), as amended by the preceding provi-
sions of this Act, is amended—
(1) by inserting ‘‘(A)’’ before the first sentence;
and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) Of any amounts approved in appropriation Acts
for grants under this section in fiscal year 1995, the Sec-
retary may use not more than 1 percent for technical assist-
ance and services.’’.
SEC. 129. APPLICABILITY OF PUBLIC HOUSING AMEND-
MENTS TO INDIAN HOUSING.
(a) AMENDMENT.—Section 201(b) of the United States
Housing Act of 1937 (42 U.S.C. 1437aa(b)) is amended to
read as follows:
‘‘(b) APPLICABILITY OF TITLE I.—Except as otherwise
provided by law, the provisions of title I shall apply to low-
income housing developed or operated pursuant to a con-
tract between the Secretary and an Indian housing author-
ity.’’.
(b) APPLICABILITY OF AMENDMENT.—The amendment
made by subsection (a) shall not affect provisions of the
United States Housing Act of 1937 that were made applica-
ble to public housing developed or operated pursuant to a
contract between the Secretary and an Indian housing au-
thority in accordance with section 201(b)(2) of such Act,
as such section existed before the effective date of this sec-
tion.
(c) APPLICABILITY OF HOUSING AND COMMUNITY DE-
VELOPMENT ACT OF 1992.—The provisions of, and the
amendments made by, sections 103(a)(1), 112, 114, 116,
118, 903, and 927 of the Housing and Community Develop-
ment Act of 1992 and sections 301, 302, 303, and 304 of
the Multifamily Housing Property Disposition Reform Act
of 1994 shall apply to public housing developed or operated
pursuant to a contract between the Secretary and an In-
dian housing authority.
SEC. 130. EARLY CHILDHOOD DEVELOPMENT PROGRAM.
(a) AUTHORIZATION
OF APPROPRIATIONS.—Section
222(g) of the Housing and Urban-Rural Recovery Act of
1983 (12 U.S.C. 1701z–6 note) is amended by striking the
first two sentences and inserting the following new sentence:
‘‘There are authorized to be appropriated to carry out this
section $35,000,000 for fiscal year 1995 and $35,000,000
for fiscal year 1996.’’.
(b) ELIGIBILITY FOR ASSISTANCE.—Section 222(b)(1)
of the Housing and Urban-Rural Recovery Act of 1983 is
amended by inserting before the semicolon at the end the
following: ‘‘, except that the Secretary may make a grant
to provide additional assistance for an existing child care
center assisted under this section or to expand an existing
child care center regardless of whether such center was pre-
viously assisted under this section’’.
(c) ASSISTANCE FOR HOMELESS FAMILIES.—Section
222(a)(1) of the Housing and Urban-Rural Recovery Act
of 1983 amended by inserting before the period at the end
the following: ‘‘(including, for purposes of this section,
homeless families with children, as defined by the Sec-
retary)’’.
(d) CLERICAL AMENDMENT.—The heading for section
222 of the Housing and Urban-Rural Recovery Act of 1983
is amended to read as follows: ‘‘EARLY CHILDHOOD DEVEL-
OPMENT PROGRAMS’’.
SEC. 131. INDIAN HOUSING CHILDHOOD DEVELOPMENT
SERVICES.
(a) FUNDING.—Section 518(a) of the Cranston-Gon-
zalez National Affordable Housing Act (12 U.S.C. 1701z–
6 note) is amended by striking the first and second sentences
and inserting the following new sentence: ‘‘There are au-
thorized to be appropriated to carry out the demonstration
program under this section $6,000,000 for fiscal year 1995
and $6,000,000 for fiscal year 1996.’’.
SEC. 132. PUBLIC HOUSING ONE-STOP PERINATAL SERV-
ICES DEMONSTRATION.
Section 521(g) of the Cranston-Gonzalez National Af-
fordable Housing Act (42 U.S.C. 1437t note) is amended
to read as follows:
‘‘(g) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated for carrying out the dem-
onstration program under this section such sums as may
be necessary for each of fiscal years 1995 and 1996.’’.
SEC. 133. SALE OF CERTAIN SCATTERED SITE PUBLIC
HOUSING.
Section 131 of the Housing and Community Develop-
ment Act of 1992 (Public Law 102–550; 106 Stat. 3712)
is amended by adding at the end the following new sentence:
‘‘During the term of the annual contributions contract re-
lating to the scattered-site public housing originally sold
under this section, any proceeds from the disposition of re-
placement scattered-site dwellings purchased with (1) the
proceeds from such original disposition, or (2) the proceeds
from the disposition of any replacement scattered-site dwell-
ings, shall be used to purchase additional replacement scat-
tered site dwellings, which shall be considered public hous-
ing for the purposes of such Act and for which the Secretary
shall provide annual contributions for operation, using
amounts made available under section 9(c) of such Act.’’.
SEC. 134. ELIGIBILITY OF CERTAIN PUBLIC HOUSING FOR
DEMOLITION.
Section 415 of the Department of Housing and Urban
Development—Independent Agencies Appropriations Act,
1988 (Public Law 100–202; 101 Stat. 1329–213), is amend-
ed by striking ‘‘George Loving Place, at 3320 Rupert Street,
Edgar Ward Place, at 3901 Holystone, Elmer Scott Place,
at 2600 Morris, in Dallas, Texas, or’’.
SEC. 135. DEMONSTRATION PROGRAM FOR INNOVATIVE
PUBLIC HOUSING AGENCIES AND RESIDENT
MANAGEMENT CORPORATIONS.
(a) AUTHORITY.—The Secretary may authorize public
housing agencies and resident management corporations to
carry out demonstrations for public housing that—
(1) test the extent to which aspects of the public
housing program may be exempt from certain statu-
tory requirements while continuing to serve eligible
families, and
(2) permit agencies and resident management
corporations to establish policies for the operation,
maintenance, management, and development (includ-
ing modernization) of one or more projects, without
regard to the requirements applicable to public hous-
ing in the United States Housing Act of 1937.
In establishing such policies, public housing agencies and
resident management corporations shall be subject to any
applicable State or local law.
(b) WAIVER OF PROVISIONS OF 1937 ACT.—For any
demonstration authorized under this section, the Secretary
may waive the applicability of any requirements of the
United States Housing Act of 1937 that the Secretary deter-
mines are not consistent with the purposes of a demonstra-
tion, except requirements—
(1) limiting occupancy of public housing to low-
income families, as defined in section 3 of the United
States Housing Act of 1937;
(2) under section 18 of such Act requiring re-
placement of units in the case of demolition or dis-
position (except that the limitation on the use of ten-
ant-based assistance to applications proposing demo-
lition or disposition of 200 or more units may be
waived); and
(3) relating to labor standards.
(c) REPLACEMENT HOUSING.—
(1) AUTHORITY.—In authorizing a demonstra-
tion under this section, the Secretary may authorize
a public housing agency to demolish or dispose of
public housing units and replace such units on site or
in the same neighborhood if the number of replace-
ment units provided in the same neighborhood is
fewer than the number of units demolished under the
demonstration.
(2) TENANT-BASED ASSISTANCE.—Notwithstand-
ing the limitations in subparagraphs (A)(v) and (C)
of section 18(b)(3), a public housing agency may re-
place not more than one-third of the units demolished
or disposed of under a demonstration under this sec-
tion with tenant-based assistance under section 8, but
only if the public housing agency demonstrates to the
satisfaction of the Secretary that the local housing
market in which the assistance is to be used has had
a vacancy rate, among units whose rent does not ex-
ceed the fair market rental for the area established
under section 8(e), of more than 3 percent for at least
6 consecutive months.
(3) 
ALTERNATIVE
METHODS
OF
REPLACE-
MENT.—In authorizing a demonstration under this
section, the Secretary may authorize a public housing
agency to provide for replacement of public housing
units in the manners under paragraph (4) of this
subsection rather than in the manners specified under
the various clauses of section 18(b)(3)(A) (and not
subject to the requirements of subparagraph (B) of
section 18(b)(3)) if the agency enters into such agree-
ments as the Secretary considers necessary to ensure
that the replacement units will remain affordable to
families eligible for residency in public housing for
the remaining useful life of the units, as determined
by the Secretary.
(4) CERTIFICATE
AND
NEW
UNIT
MIX.—Each
such dwelling unit demolished, disposed of, or other-
wise eliminated pursuant to this subsection shall be
replaced with an additional dwelling unit through
any combination of—
(A) additional public housing dwelling
units;
(B) units acquired or otherwise provided for
homeownership (including cooperative and con-
dominium interests) by public housing residents
under section 5(h), subtitle B or C of title IV of
the 
Cranston-Gonzalez 
National 
Affordable
Housing Act, or other programs for homeowner-
ship that have program requirements substan-
tially equivalent to the requirements established
under section 605 of the Housing and Commu-
nity Development Act of 1987;
(C) affordable housing homeownership units
assisted under title II of the Cranston-Gonzalez
National Affordable Housing Act and sold to
public housing residents;
(D) rental units that are (i) assisted under
title II of the Cranston-Gonzalez National Af-
fordable Housing Act (notwithstanding section
212(d)(2) of such Act), or (ii) assisted under a
State or local rental assistance program that
provides for rental assistance over a term of not
less than 5 years that is comparable in terms of
eligibility and contribution to rent to assistance
under section 8; but this subparagraph shall
apply to a public housing agency only if the
agency demonstrates to the satisfaction of the
Secretary that the local housing market in which
the assistance is to be used has had a vacancy
rate, among units whose rent does not exceed the
fair market rental for area established under sec-
tion 8(e), of more than 3 percent for at least 6
consecutive months;
(E) housing assisted by a tax credit under
section 42 of the Internal Revenue Code;
(F) housing acquired from the Resolution
Trust Corporation or the Federal Deposit Insur-
ance Corporation;
(G) housing acquired under section 203 of
the Housing and Community Development
Amendments of 1978; or
(H) other manners approved by the Sec-
retary.
(d) WAIVER
OF
OTHER
STATUTORY
REQUIRE-
MENTS.—For any demonstration authorized under this sec-
tion, the Secretary may also waive the applicability of any
provision of law that applies to the projects under the dem-
onstration and that the Secretary determines is not consist-
ent with the purposes of a demonstration, except that the
Secretary may not waive any provision of the Uniform Re-
location Assistance and Real Property Acquisition Policies
Act of 1970 or any other provision of law relating to equal
opportunity, nondiscrimination, or the environment.
(e) SELECTION OF DEMONSTRATIONS.—
(1) SCOPE.—The Secretary may select not more
than 25 public housing agencies or resident manage-
ment corporations (or a combination of both) to carry
out not more than 25 demonstrations under this sec-
tion. Not more than 5 of the agencies selected may be
agencies designated pursuant to section 6(j) of the
United States Housing Act of 1937 as troubled or
troubled with respect to the public housing moderniza-
tion program under section 14 of such Act.
(2) CRITERIA.—The Secretary shall select agen-
cies and corporations based on selection criteria estab-
lished by the Secretary, which shall include the fol-
lowing factors:
(A) The need for a range of project sizes.
(B) The need for a range of types of public
housing agencies and resident management cor-
porations.
(C) The potential effects and benefits that
the variations proposed by the agency or cor-
poration could have on the public housing pro-
gram if the variations were adopted for the
whole program.
(f) REQUIREMENTS.—The Secretary may authorize a
demonstration program under this section only if the Sec-
retary determines that the demonstration—
(1) would not, over the term of the demonstra-
tion, result in the Federal Government incurring
greater costs than the government would otherwise
incur if the demonstration were not authorized;
(2) is consistent with the overall purposes of the
public housing program;
(3) is evaluated by an independent party; and
(4) is consistent with the Fair Housing Act, title
VI of the Civil Rights Act of 1964, section 504 of the
Rehabilitation Act of 1973, the Age Discrimination
Act of 1975, and the National Environmental Policy
Act of 1969.
(g) AUTHORITY TO ESTABLISH ADDITIONAL REQUIRE-
MENTS.—In authorizing a demonstration under this sec-
(i) TERM OF DEMONSTRATIONS.—The authority to
carry out a demonstration program under this section shall
be effective only for the period specified by the Secretary
in authorizing the demonstration program, which may not
exceed 5 years.
(j) DEFINITIONS.—For purposes of this section, the fol-
lowing definitions shall apply:
(1) The terms ‘‘public housing agency’’ and
‘‘agency’’ mean a public housing agency, as such term
is defined in section 3(b) of the United States Hous-
ing Act of 1937.
(2) The terms ‘‘resident management corpora-
tion’’ and ‘‘corporation’’ mean a resident manage-
ment corporation established in accordance with re-
quirements of the Secretary under section 20 of the
United States Housing Act of 1937.
(3) The term ‘‘Secretary’’ means the Secretary of
Housing and Urban Development.
(k) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated $1,000,000 for the evaluation
of demonstrations under this section.
SEC. 136. DEMONSTRATION PROGRAM FOR OCCUPANCY OF
OTHERWISE VACANT PUBLIC HOUSING UNITS
BY MODERATE-INCOME FAMILIES.
(a) AUTHORITY.—The Secretary of Housing and
Urban Development may carry out a demonstration pro-
gram under which public housing agencies may lease units
in public housing projects assisted under the United States
Housing Act of 1937 to moderate-income families, as such
term is defined by the Secretary.
(b) REQUIREMENTS FOR PARTICIPATION.—The Sec-
retary may approve a request by a public housing agency
to participate in the demonstration program only if the
Secretary determines that—
(1) the units proposed for leasing to moderate-in-
come families would otherwise remain vacant;
(2) the agency has demonstrated that it has ac-
tively marketed the units to eligible families and that
eligible families are not available to fill the units cov-
ered by the application and are not expected to be
available for at least 12 months; and
(3) the agency has agreed not to provide tenant-
based assistance under the United States Housing Act
of 1937 for unit sizes available for occupancy under
the demonstration.
(c) DURATION.—The Secretary may authorize a public
housing agency to participate in the demonstration for up
to a 2-year term and may extend the term for additional
periods of up to 2 years, if the agency submits another ap-
plication that meets the requirements of this section.
SEC. 137. STUDY OF ADEQUACY OF PAYMENT IN LIEU OF
TAXES.
The Comptroller General of the United States shall
conduct a study of the payments made during recent years
by public housing agencies to State and local governments
in lieu of taxes, pursuant to section 6(d) of the United
States Housing Act of 1937, to determine whether such pay-
ments adequately compensate for the amount of taxes fore-
gone by such governments pursuant to such section. The
Comptroller General shall submit a report to the Congress
describing the results of the study not later than the expira-
tion of the 1-year period beginning on the date of the enact-
ment of this Act.
Subtitle C—Section 8 Assistance
SEC. 141. COMMUNITY INVESTMENT DEMONSTRATION PRO-
GRAM.
Section 6(j) of the HUD Demonstration Act of 1993
(42 U.S.C. 1437f note) is amended to read as follows:
‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—Of any
amounts appropriated for incremental assistance under sec-
tion 8 of the United States Housing Act of 1937, the Sec-
retary may use not more than $150,000,000 in fiscal year
1995 and $200,000,000 in fiscal year 1996 to carry out
this section.’’.
SEC. 142. MERGER OF SECTION 8 RENTAL ASSISTANCE PRO-
GRAMS.
(a) IN GENERAL.—Section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f) is amended to read
as follows:
‘‘RENTAL HOUSING ASSISTANCE FOR LOW-INCOME
FAMILIES
‘‘SEC. 8. (a) AUTHORITY AND PURPOSE.—
‘‘(1) IN GENERAL.—For the purposes of aiding
low-income families in obtaining a decent place to
live and promoting economically mixed housing, the
Secretary may provide assistance payments with re-
spect to existing housing in accordance with the pro-
visions of this section.
‘‘(2) ELDERLY HOUSING.—Notwithstanding any
other provision of this Act, assistance payments under
this section may be provided, in accordance with reg-
ulations prescribed by the Secretary, with respect to
some or all of the units in any project approved pur-
suant to section 202 of the Housing Act of 1959 (as
in effect before October 1, 1991).
‘‘(b) ANNUAL CONTRIBUTIONS CONTRACTS FOR RENT-
AL ASSISTANCE.—
‘‘(1) IN
GENERAL.—The Secretary may enter
into annual contributions contracts under this sub-
section with public housing agencies to provide rental
housing assistance under this section for low-income
families. Such annual contributions contracts shall
bind the Secretary to make such authority, and any
amendments increasing such authority, available to
the public housing agency for a specified period.
‘‘(2) SECRETARY
ACTING
AS
PHA.—In areas
where no public housing agency has been organized or
where the Secretary determines that a public housing
agency is unable to implement the provisions of this
section, the Secretary may enter into such contracts
and perform the other functions assigned to a public
housing agency by this section.
‘‘(3) TREATMENT OF ASSISTANCE FOR SUPPORT-
IVE
HOUSING
FOR
THE
DISABLED.—The Secretary
may not consider the receipt by a public housing
agency of assistance under section 811(b)(1) of the
Cranston-Gonzalez National Affordable Housing Act,
or the amount received, in approving assistance
under this section for the agency or in determining
the amount of such assistance to be provided to the
agency.
‘‘(c) ASSISTANCE CONTRACTS.—
‘‘(1) IN GENERAL.—Each public housing agency
that receives amounts under an annual contributions
contract may enter into assistance contracts to make
rental assistance payments to owners of existing
dwelling units in accordance with the provisions of
this section.
‘‘(2) PHA ACTING AS OWNER.—A public housing
agency may contract to make rental assistance pay-
ments under this section to itself (or any agency or
instrumentality thereof) as the owner of dwelling
units, and the agency shall be subject to the same pro-
gram requirements as are applied to other owners. In
such cases, the Secretary may establish initial rents
within applicable limits.
‘‘(3) INAPPLICABLE PROVISIONS.—Sections 5(e)
and 6 and any other provisions of this Act that are
inconsistent with the provisions of this section shall
not apply to assistance contracts entered into pursu-
ant to this section.
‘‘(d) MAXIMUM MONTHLY RENT.—
‘‘(1) IN GENERAL.—Each assistance contract en-
tered into pursuant to this section shall establish the
maximum monthly rent (including utilities and all
maintenance and management charges) that the
owner is entitled to receive for each dwelling unit for
100
which rental assistance payments are to be made
under the contract. Except as provided in paragraph
(2), the maximum monthly rent shall not exceed by
more than 10 percent the fair market rental under
subsection (e) for the market area in which the dwell-
ing unit is located. If units assisted under this section
are exempt from local rent control while they are so
assisted or otherwise, the maximum monthly rent for
such units shall be reasonable in comparison with
other units in the market area that are exempt from
local rent control.
‘‘(2) EXCEPTION.—The maximum monthly rent
may exceed the fair market rental—
‘‘(A) by more than 10 but not more than 20
percent, but only if the Secretary determines that
special circumstances warrant such higher maxi-
mum rent or that such higher rent is necessary
to the implementation of a comprehensive hous-
ing affordability strategy under section 105 of
the 
Cranston-Gonzalez 
National 
Affordable
Housing Act; or
‘‘(B) by such higher amount, only if re-
quested by the low-income family assisted and
approved by the public housing agency in ac-
cordance with subsection (f)(2).
101
‘‘(3) ANNUAL
ADJUSTMENTS.—Each assistance
contract shall provide for adjustment in the maxi-
mum monthly rents for units covered by the contract
not less than annually to reflect changes in the fair
market rentals established under subsection (e) for the
housing area for similar types and sizes of dwelling
units or, if the Secretary determines, on the basis of
a reasonable formula.
‘‘(4) ADJUSTMENTS DUE TO EXPENSES.—Each
assistance contract shall further provide for the Sec-
retary to make additional adjustments in the maxi-
mum monthly rent for units assisted under the con-
tract to the extent the Secretary determines such ad-
justments are necessary to reflect increases in the ac-
tual and necessary expenses of owning and maintain-
ing the units that have resulted from substantial gen-
eral increases in real property taxes, utility rates, or
similar costs that are not adequately compensated for
by the adjustment in the maximum monthly rent au-
thorized by paragraph (3). The Secretary shall make
additional adjustments in the maximum monthly
rent for units under contract (subject to the availabil-
ity of appropriations for contract amendments) to the
extent the Secretary determines such adjustments are
necessary to reflect increases in the actual and nec-
102
essary expenses of owning and maintaining the units
that have resulted from the expiration of a real prop-
erty tax exemption.
‘‘(5) ADJUSTMENTS
DUE
TO
CRIMINAL
ACTIV-
ITY.—If the Secretary determines that a project as-
sisted under this section is located in a community
where criminal activity is generally prevalent and the
operating, maintenance, and capital repair expenses
for the project have been substantially increased pri-
marily as a result of the prevalence of such activity,
the Secretary may (at the discretion of the Secretary
and subject to the availability of appropriations for
contract amendments for this purpose), on a project-
by-project basis, provide adjustments to the maximum
monthly rents, to a level not exceeding 120 percent of
the project rents, to cover the costs of maintenance, se-
curity, capital repairs, and reserves required for the
owner to carry out a strategy acceptable to the Sec-
retary for addressing the problem of criminal activ-
ity. The Secretary may waive the applicability of any
rent comparability standard required under this sub-
section to implement this paragraph.
‘‘(6) ADJUSTMENTS DUE TO LEAD-BASED PAINT
REDUCTION FOR HOUSING RECEIVING PROJECT-BASED
ASSISTANCE.—The Secretary may (at the discretion
103
of the Secretary and subject to the availability of ap-
propriations for contract amendments), on a project-
by-project basis for projects receiving project-based as-
sistance, provide adjustments to the maximum month-
ly rents to cover the costs of evaluating and reducing
lead-based paint hazards, as defined in section 1004
of the Residential Lead-Based Paint Hazard Reduc-
tion Act of 1992.
‘‘(7) LIMITATIONS ON ADJUSTMENTS.—
‘‘(A) GENERAL COMPARABILITY RULE.—Ad-
justments in the maximum rents under para-
graphs (3) through (6) shall not result in mate-
rial differences between the rents charged for as-
sisted units and unassisted units of similar qual-
ity, type, and age in the same market area, as
determined by the Secretary.
‘‘(B) COMPARABILITY STUDIES.—
‘‘(i) To carry out subparagraph (A),
the Secretary shall issue regulations to pro-
vide for conducting comparability studies
for projects where the Secretary has reason
to believe that the application of the for-
mula adjustments under paragraph (3)
would result in such material differences.
The Secretary shall conduct such studies
104
upon the request of any owner of any
project, or as the Secretary determines to be
appropriate by establishing, to the extent
practicable, a modified annual adjustment
factor for such market area, as the Sec-
retary shall designate, that is geographi-
cally smaller than the applicable housing
area used for the establishment of the an-
nual adjustment factor under paragraph
(3). The Secretary shall establish such modi-
fied annual adjustment factor on the basis
of the results of a study conducted by the
Secretary of the rents charged, and any
change in such rents over the previous year,
for assisted units and unassisted units of
similar quality, type, and age in the small-
er market area. Where the Secretary deter-
mines that such modified annual adjust-
ment factor cannot be established or that
such factor when applied to a particular
project would result in material differences
between the rents charged for assisted units
and unassisted units of similar quality,
type, and age in the same market area, the
Secretary may apply an alternative meth-
105
odology for conducting comparability stud-
ies in order to establish rents that are not
materially different from rents charged for
comparable unassisted units.
‘‘(ii) If the Secretary or appropriate
State agency does not complete and submit
to the project owner a comparability study
not later than 60 days before the anniver-
sary date of the assistance contract under
this section, the automatic annual adjust-
ment factor shall be applied. The Secretary
may not reduce the contract rents in effect
on or after April 15, 1987, for newly con-
structed, 
substantially 
rehabilitated, 
or
moderately rehabilitated projects assisted
under this section (including projects as-
sisted under this section as in effect prior to
November 30, 1983), unless the project has
been refinanced in a manner that reduces
the periodic payments of the owner. Any
maximum monthly rent that has been re-
duced by the Secretary after April 14, 1987,
and prior to November 7, 1988, shall be re-
stored to the maximum monthly rent in ef-
fect on April 15, 1987.
106
‘‘(iii) For any project which has had
its maximum monthly rents reduced after
April 14, 1987, the Secretary shall make as-
sistance payments (from amounts reserved
for the original contract) to the owner of
such project in an amount equal to the dif-
ference between the maximum monthly rents
in effect on April 15, 1987, and the reduced
maximum monthly rents, multiplied by the
number of months that the reduced maxi-
mum monthly rents were in effect.
‘‘(e) FAIR MARKET RENTALS.—
‘‘(1) IN GENERAL.—The Secretary shall establish
fair market rentals under this subsection periodically,
but not less than annually, for existing rental dwell-
ing units suitable for occupancy by low-income fami-
lies assisted under this section. The Secretary shall es-
tablish the fair market rental by market area for var-
ious sizes and types of dwelling units. For a market
area, the fair market rental for any size and type of
dwelling unit shall be a dollar amount not less than
the amount that results in the rents charged for 45
percent of the standard quality rental units of such
size and type in the market area being less than such
dollar amount. For purposes of determining the dollar
107
amount under the preceding sentence, the Secretary
shall consider only rental units occupied by house-
holds whose initial occupancy in their current units
commenced not more than 15 months before the deter-
mination and shall not consider public housing units
and units constructed less than 24 months before the
determination.
‘‘(2) EFFECTIVENESS
AND
ADJUSTMENT.—The
Secretary shall publish proposed fair market rentals
for each area in the Federal Register with reasonable
time for public comment, and such fair market rent-
als shall become effective upon the date of publication
in final form in the Federal Register. Each fair mar-
ket rental in effect under this subsection shall be ad-
justed to be effective on October 1 of each year to re-
flect changes, based on the most recent available data
trended so the rentals will be current for the year to
which they apply, of rents for existing rental dwelling
units, as the case may be, of various sizes and types
in the market area suitable for occupancy by families
assisted under this section.
‘‘(3) CERTAIN AREAS.—The Secretary shall es-
tablish separate fair market rentals under this sub-
section for Westchester County in the State of New
York. The Secretary shall also establish separate fair
108
market rentals under this paragraph for Monroe
County in the Commonwealth of Pennsylvania. In es-
tablishing fair market rentals for the remaining por-
tion of the market areas in which Monroe County is
located, the Secretary shall establish the fair market
rentals as if such portion included Monroe County.
‘‘(4) REQUIRED REVIEW.—If at any time, for
any public housing agency, more than 50 percent of
the families on behalf of whom assistance is provided
under this section by the agency are paying as rent
more than the amount specified under section 3(a) (as
authorized in subsection (f)(2)), the agency shall re-
view the fair market rentals established under this
subsection for the market areas in the jurisdiction of
the public housing agency.
‘‘(f) AMOUNT OF MONTHLY ASSISTANCE PAYMENT AND
DUE PROCESS RIGHTS.—
‘‘(1) IN GENERAL.—The amount of the monthly
assistance payment under this section with respect to
any dwelling unit shall be the difference between the
maximum monthly rent that the contract provides
that the owner is to receive for the unit and the rent
the family is required to pay under section 3(a).
‘‘(2) INCREASED FAMILY PAYMENT.—A family on
behalf of whom tenant-based assistance payments are
109
made under this section may pay as rent for a dwell-
ing unit assisted under this section more than the
amount specified under section 3(a), but only if—
‘‘(A) the family notifies the public housing
agency of its interest in a unit renting for an
amount that exceeds the permissible maximum
monthly rent established for the market area
under subsection (d);
‘‘(B) such agency determines that the rent
for the unit and the rental payments of the fam-
ily are reasonable, after taking into account
other family expenses (including child care, un-
reimbursed medical expenses, transportation,
and other appropriate family expenses; and
‘‘(C) such amount does not exceed 40 per-
cent of the family’s monthly adjusted income.
‘‘(3) INCREASES IN ASSISTANCE PAYMENTS.—The
Secretary shall take any action necessary, including
making contracts for assistance payments in amounts
exceeding the amounts required upon the initial rent-
ing of dwelling units, reserving annual contributions
authority for the purpose of amending assistance con-
tracts, or allocating a portion of new authorizations
for the purpose of amending assistance contracts, to
ensure that assistance payments are increased on a
110
timely basis to cover increases in maximum monthly
rents or decreases in family incomes.
‘‘(4) REVIEWS OF FAMILY INCOMES.—
‘‘(A) IN GENERAL.—Reviews of family in-
comes for purposes of this section shall be made
annually and shall be subject to the provisions of
section 904(e) of the Stewart B. McKinney
Homeless Assistance Amendments Act of 1988.
For families for whom an increased rental pay-
ment has been approved under paragraph (2),
such review shall include determining whether
the rent for the unit and the rental payments of
the family continue to be reasonable, in accord-
ance with subparagraphs (B) and (C) of para-
graph (2).
‘‘(B) PROCEDURES.—The Secretary shall
establish procedures that are appropriate and
necessary to ensure that income data provided to
public housing agencies and owners by families
applying for or receiving assistance under this
section is complete and accurate.
‘‘(C) CONFIDENTIALITY.—Any income infor-
mation received pursuant to this paragraph shall
remain confidential and shall be used only for
the purpose of verifying incomes in order to de-
111
termine eligibility of families for benefits (and
the amount of such benefits, if any) under this
section.
‘‘(5) DUE PROCESS RIGHTS IN CASES OF AD-
VERSE ACTION.—In the case of any action proposed
to be taken by a public housing agency, any family
receiving assistance under this section adversely af-
fected by such action shall have the right to at least
the basic elements of due process with regard to such
action, as follows:
‘‘(A) Written notice of the intended adverse
action and the reason for such action shall be
provided to the family not less than 30 days be-
fore the action is to be taken, or, in a case where
the health or safety of other families is threat-
ened, a reasonable period of time considering the
seriousness of the situation (but not to exceed 30
days).
‘‘(B) The family shall have the right to re-
quest a hearing within 30 days after receipt of
the notice.
‘‘(C) The family shall have the right to a
hearing before an impartial hearing officer.
112
‘‘(D) The family shall have the right to be
represented at the hearing by an attorney or
other advocate.
‘‘(E) The family shall have the right to ex-
amine the evidence supporting the action and all
evidence that the public housing agency intends
to use.
‘‘(F) The family shall have the right to
present testimonial and documentary evidence
and to cross-examine adverse witnesses.
‘‘(G) The hearing officer shall issue a writ-
ten decision, which shall be based solely upon the
evidence introduced at the hearing and which
shall state the basis of the decision.
‘‘(g) ELIGIBILITY OF UNITS FOR ASSISTANCE.—
‘‘(1) OCCUPANCY STATUS.—Each assistance con-
tract shall provide that assistance payments may be
made only with respect to the following dwelling
units:
‘‘(A) OCCUPIED
UNITS.—A dwelling unit
under lease for occupancy by a family deter-
mined to be a low-income family at the time it
initially occupies the dwelling unit or by a fam-
ily that qualifies to receive assistance under this
section pursuant to section 223 or 226 of the