‘‘Sec. 69. Limitation on certain tax benefits for higher income
taxpayers.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1995.
SEC. 102. REPEAL OF INCREASE IN BASIS OF PROPERTY AC-
QUIRED FROM A DECEDENT; PHASEIN OF
CAPITAL GAINS TAX ON INHERITED PROP-
ERTY.
(a) IN GENERAL.—Section 1014 of the Internal Rev-
enue Code of 1986 (relating to basis of property acquired
from a decedent) is hereby repealed.
(b) BASIS TO BE DETERMINED UNDER RULES AP-
PLICABLE TO GIFTS.—Section 1015 of such Code (relat-
ing to basis of property acquired by gifts and transfers
in trusts) is amended by adding at the end the following
new subsection:
‘‘(f) PROPERTY ACQUIRED FROM OR PASSING FROM
A DECEDENT.—
‘‘(1) IN GENERAL.—Property acquired from a
decedent dying after December 31, 1995, or passed
from such a decedent shall be treated for purposes
of subsection (a) as acquired by gift for purposes of
this section.
‘‘(2) PROPERTY
ACQUIRED
FROM
A
DECE-
DENT.—Section 1014(b) (as in effect on the day be-
fore the date of the enactment of the Federal Hous-
ing Trust Fund Act of 1995) shall apply for pur-
poses of whether property is considered to have been
acquired from or to have passed from the decedent.
‘‘(3) INCREASE
IN
BASIS
FOR
ESTATE
TAX
PAID.—
‘‘(A) IN
GENERAL.—The basis of any
property which this subsection applies shall be
the basis determined under subsection (a) in-
creased by the portion of the aggregate death
tax adjustment which is allocated to the prop-
erty pursuant to this paragraph.
‘‘(B) LIMITATION.—The death tax adjust-
ment for any property shall not exceed—
‘‘(i) the net appreciation in such prop-
erty, multiplied by
‘‘(ii) the Federal marginal estate tax
rate.
‘‘(C) NET
APPRECIATION.—For purposes
of this paragraph, the net appreciation in value
of any property is the amount by which—
‘‘(i) the fair market value of such
property, exceeds
‘‘(ii) the initial basis of such property
increased by the minimum basis adjust-
ment of such property.
‘‘(4) AGGREGATE DEATH TAX ADJUSTMENT.—
In the case of any estate—
‘‘(A) IN GENERAL.—The aggregate death
tax adjustment is the product of—
‘‘(i) the aggregate net appreciation of
all properties which have net appreciation,
and
‘‘(ii) the Federal marginal estate tax
rate.
‘‘(B) LIMITATION.—The amount taken
into account under subparagraph (A)(i) shall
not exceed the taxable estate.
‘‘(C) FEDERAL
MARGINAL
ESTATE
TAX
RATE.—The term ‘Federal marginal estate tax
rate’ means the highest rate in the rate sched-
ule set forth in section 2001(c)—
‘‘(i) which is used in determining the
tentative tax under section 2001(b)(1) with
respect to the estate of the decedent, and
‘‘(ii) the amount subject to which is at
least $50,000.
In no event shall the Federal marginal estate
tax rate be less than 30 percent.
‘‘(5) ALLOCATION RULES.—The executor shall
allocate the adjustments under this subsection
among the properties on the return of the tax im-
posed by chapter 11.’’
(c) PHASE-IN OF CAPITAL GAINS TAX ON INHERITED
PROPERTY.—Subsection (h) of section 1 of such Code (re-
lating to maximum capital gains rate) is amended to read
as follows:
‘‘(h) MAXIMUM CAPITAL GAINS RATE.—
‘‘(1) IN GENERAL.—If a taxpayer has a net
capital gain for any taxable year, then the tax im-
posed by this section shall not exceed the sum of—
‘‘(A) a tax computed at the rates and in
the same manner as if this subsection had not
been enacted on the greater of—
‘‘(i) taxable income reduced by the
amount of the net capital gain, or
‘‘(ii) the amount of taxable income
taxed at a rate below 28 percent, plus
‘‘(B) a tax equal to the sum of—
‘‘(i) the applicable percentage of so
much of such net capital gain as is attrib-
utable to property acquired by the tax-
payer from a decedent dying after Decem-
ber 31, 1995 (or passed to the taxpayer
from such a decedent), and
‘‘(ii) 28 percent of the amount of the
taxable income in excess of the sum of the
amount determined under subparagraph
(A) and the net capital gain described in
clause (i) of this subparagraph.
‘‘(2) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1), the term ‘applicable percentage’
means—
‘‘(A) 10 percent in the case of taxable
years ending during 1996,
‘‘(B) 15 percent in the case of taxable
years ending during 1997,
‘‘(C) 20 percent in the case of taxable
years ending during 1998, and
‘‘(D) 25 percent in the case of taxable
years ending during 1999.
‘‘(3) ELECTION
TO
MARK-TO-MARKET
PROP-
ERTY ACQUIRED FROM A DECEDENT.—If the tax-
payer elects this paragraph with respect to any prop-
erty described in paragraph (1)(B)(i), such property
shall be treated as sold (for its fair market value as
of the first day of the taxpayer year) and any gain
or loss shall be treated as received or accrued on
such day.’’
(d) CONFORMING AMENDMENTS.—
(1) The table of sections for part II of sub-
chapter O of chapter 1 of such Code is amended by
striking the item relating to section 1014.
(2) The heading of section 1015 of such Code
is amended to read as follows:
‘‘SEC. 1015. BASIS OF PROPERTY ACQUIRED BY GIFT, FROM
A DECEDENT, OR TRANSFERRED IN TRUST.’’
(3) The table of sections for part II of sub-
chapter O of chapter 1 of such Code is amended by
striking the item relating to section 1015 and insert-
ing the following new item:
‘‘Sec. 1015. Basis of property acquired by gift, from a decedent,
or transferred in trust.’’
(e) EFFECTIVE DATES.—
(1) CARRYOVER BASIS.—Except as provided in
paragraph (2), the amendments made by this section
shall apply to decedents dying after December 31,
1995.
(2) TAX
ON
INHERITED
PROPERTY.—The
amendment made by subsection (c) shall apply to
taxable years ending after December 31, 1995.
SEC. 103. ESTABLISHMENT OF HOUSING TRUST FUND.
(a) IN GENERAL.—Subchapter A of chapter 98 of the
Internal Revenue Code of 1986 (relating to trust funds)
is amended by adding at the end thereof the following new
section:
‘‘SEC. 9512. HOUSING TRUST FUND.
‘‘(a) CREATION OF TRUST FUND.—There is hereby
established in the Treasury of the United States a trust
fund to be known as the ‘Housing Trust Fund’, consisting
of such amounts as may be appropriated or credited to
such trust fund as provided in this section, section
9602(b) of this title, or section 201(e) or 212(a)(3)(B)
of the Federal Housing Trust Fund Act of 1995.
‘‘(b) CREDITS TO TRUST FUND.—There are hereby
appropriated to the Housing Trust Fund amounts equiva-
lent to the increase in income tax liability attributable to
section 69.
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts
in the Housing Trust Fund are available each fiscal year
to the Secretary of Housing and Urban Development for
carrying out title II of the Federal Housing Trust Fund
Act of 1995, but shall not be available for any other pur-
pose.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for such subchapter A is amended by adding at the end
thereof the following new item:
‘‘Sec. 9512. Housing Trust Fund.’’.
TITLE II—ADMINISTRATION OF
HOUSING TRUST FUND AND
ENTITLEMENT PROGRAM FOR
FORMULA GRANTS FOR AF-
FORDABLE HOUSING
SEC. 201. GRANTS FOR ELIGIBLE PUBLIC ENTITIES.
(a) IN GENERAL.—The Secretary of Housing and
Urban Development shall, for fiscal year 1996 and each
fiscal year thereafter, make a grant under this title to each
eligible public entity for which an allotment is made under
section 210. The amount of the grant for such an eligible
public entity shall be equal to the amount of the allotment
for the eligible public entity determined in accordance with
section 209.
(b) USE OF TRUST FUNDS.—Grants under this title
shall be made only using amounts from the Housing Trust
Fund established in section 9512 of the Internal Revenue
Code of 1986.
(c) ENTITLEMENT STATUS OF GRANTS.—
(1) IN GENERAL.—Subject to subsection (d),
each eligible public entity is entitled to payment of
the grant required by subsection (a) for fiscal year
1996 and each subsequent fiscal year.
(2) RULE OF CONSTRUCTION.—Paragraph (1)
may not be construed to establish, with respect to
this section, an entitlement of any individual to have
carried out on behalf of the individual any activity
authorized in this title.
(d) LIMITATIONS.—An entitlement is established pur-
suant to subsection (a) for a fiscal year for an eligible pub-
lic entity—
(1) only to the extent that there are amounts
in the Fund and only to the extent of the amount
of the allotment made under section 210 for the en-
tity; and
(2) only if the allotment for the entity has not
been terminated pursuant to section 212(c)(1).
(e) 
DURATION
OF
AVAILABILITY
OF
GRANT
AMOUNTS.—With respect to the 24-month period begin-
ning on the date on which a grant under subsection (a)
for a fiscal year becomes available to an eligible public en-
tity, any portion of the grant that is not obligated by the
entity before the expiration of such period shall be covered
into the Fund and be available for grants under such sub-
section for the following fiscal year.
(f) PAYMENT
OF GRANT AMOUNTS.—The grant
amounts for each eligible public entity shall be paid di-
rectly to the agency designated pursuant to section 206(2)
by the eligible public entity and shall be available only for
activities authorized under section 202.
SEC. 202. ELIGIBLE ACTIVITIES FOR USE OF GRANT
AMOUNTS.
(a) IN GENERAL.—Grant amounts provided under
this title for a fiscal year may be expended by the eligible
public entity receiving the grant only in accordance with
the Trust Fund grant plan for the entity for such year
approved by the Secretary under section 208 to carry
out—
(1) a housing costs assistance program under
section 203;
(2) a housing supply assistance program under
section 204; and
(3) administrative activities, to the extent pro-
vided in subsection (c).
(b) ALLOCATION
OF GRANT AMOUNTS BETWEEN
PROGRAMS.—
(1) IN GENERAL.—Except to the extent pro-
vided in subsection (a)(3) and paragraph (2) of this
subsection, from the grant amounts provided to an
eligible public entity for a fiscal year, the entity shall
use—
(A) the amount provided to the entity
under paragraph (1)(A), (2)(A), or (3)(A), as
applicable, of section 210(a) for carrying out
the housing costs assistance program under sec-
tion 203 of the entity; and
(B) the amount provided to the entity
under paragraph (1)(B), (2)(B), or (3)(B), as
applicable, of section 210(a) for carrying out
the housing supply assistance program under
section 204 of the entity.
(2) EXCEPTION.—If in any fiscal year any
grant amounts referred to in paragraph (1)(A) re-
main available for commitment for housing costs as-
sistance for eligible families 9 months after such
amounts are first made available to the eligible pub-
lic entity because of a lack of eligible families or the
failure of eligible families to obtain suitable dwelling
units, the eligible public entity may use such
amounts for carrying out the housing supply assist-
ance program of the entity.
(c) ADMINISTRATIVE EXPENSES.—
(1) LIMITATION.—An eligible public entity that
receives grant amounts for a fiscal year may use for
administrative expenses relating to carrying out the
housing costs assistance program and housing sup-
ply assistance program of the entity not more than
the applicable percentage of such amounts as the
Secretary shall establish by regulation for purposes
of this subsection. The Secretary may establish dif-
ferent percentage limitations based on the amount of
grant amounts received, but no such limitation may
exceed 6 percent.
(2) INCLUDED
EXPENSES.—For purposes of
paragraph (1), the term ‘‘administrative expenses’’
includes expenses relating to performance reports re-
quired under section 212(a), expenses of a public en-
tity in administering a grant under this section, and
expenses of a public entity or other subgrantee orga-
nization or entity in administering a housing costs
assistance program or housing supply assistance
program.
SEC. 203. HOUSING COSTS ASSISTANCE PROGRAM.
(a) REQUIREMENT TO CARRY OUT PROGRAM.—Each
eligible public entity that receives grant amounts under
paragraph (1)(A), (2)(A), or (3)(A), as applicable, of sec-
tion 210(a) shall carry out a housing costs assistance pro-
gram under this section using such grant amounts to pro-
vide financial assistance on behalf of eligible families for
the rental or purchase of dwelling units occupied by such
families.
(b) ELIGIBLE HOUSING.—A housing costs assistance
program may provide assistance on behalf of an eligible
family only for the costs of—
(1) renting a dwelling unit that is—
(A) affordable housing;
program of the entity for all eligible families residing in
the jurisdiction of the entity—
(1) 70 percent of the grant amounts received by
the entity under paragraph (1)(A), (2)(A), or (3)(A),
as applicable, of section 210(a) shall be used subject
to a preference for assisting eligible families de-
scribed in section 8(d)(1)(A)(i) of the United States
Housing Act of 1937; and
(2) 30 percent of such grant amounts shall be
used subject to a preference for assisting eligible
families who qualify under a system of local pref-
erences established by the eligible public entity.
(e) METHOD
OF ASSISTANCE.—Under a housing
costs assistance program under this section—
(1) the eligible public entity carrying out the
program shall make assistance payments on behalf
of the eligible family assisted to the owner of, or
mortgage servicer for, the dwelling unit occupied by
the eligible family;
(2) the owner of a rental dwelling unit to be oc-
cupied by a family assisted under the program shall
enter into a contract with the eligible public entity
that—
(A) provides for making of the assistance
payments under the program;
(B) has a term not shorter than the term
of the lease for the dwelling unit and not longer
than 60 months; and
(C) provides that the housing shall be sub-
ject to the procedures established under section
207(b)(3) by the eligible public entity to ensure
compliance of the housing with housing codes or
quality standards;
(3) a family assisted under the program who is
purchasing the dwelling occupied by the family shall
enter into a contract with the eligible public entity
that—
(A) provides for the making the assistance
payments under the program;
(B) has a term not longer than 60 months,
which shall be renewable subject only to the
availability of amounts, the need for such as-
sistance, and compliance by the assisted family
with the conditions of the program; and
(C) provides that the housing shall be sub-
ject to the procedures established under section
207(b)(3) by the eligible public entity to ensure
compliance of the housing with housing codes or
quality standards; and
(4) any eligible family on behalf of whom assist-
ance is provided under the program and who moves
to an affordable dwelling unit located not more than
100 miles from the jurisdiction of the eligible public
entity providing such assistance may use the assist-
ance to rent or purchase the dwelling unit.
(f) HOUSING CHOICE ASSISTANCE.—
(1) IN GENERAL.—A housing costs assistance
program may reserve not more than 20 percent of
the amount of assistance available for any fiscal year
under the program for use only to provide assistance
under the program for eligible families who are mi-
nority families and are moving to dwelling units lo-
cated in areas without high concentrations of per-
sons living in poverty.
(2) AUTHORITY
TO
INCREASE
ASSISTANCE.—
Notwithstanding subsection (c), the amount of fi-
nancial assistance provided under a housing costs
assistance program on behalf of an eligible family
who meets the requirements for assistance with
amounts reserved under this subsection may exceed
the amount determined under subsection (c), but
only to the extent necessary to enable the family as-
sisted to relocate to and maintain residence in an af-
fordable dwelling unit in an area described in para-
graph (1) of this subsection.
(3) AMOUNT OF INCREASE.—In no event may
the amount of such financial assistance exceed the
sum of—
(A) the cost of relocating to a dwelling unit
in an area described in paragraph (1); and
(B) the difference between (i) the amount
by which 125 percent of the fair market rental
for a dwelling unit of the size appropriate for
the family and located in the applicable housing
market (to which the family is moving), and (ii)
the lesser of 30 percent of the adjusted income
of the family or 5 percent of the gross income
of the family.
(g) HOUSING COUNSELING.—Each family assisted
under a housing costs assistance program shall be pro-
vided counseling regarding housing quality, obtaining a
decent and affordable dwelling unit, and the choice of a
neighborhood in which to reside.
(h) REQUIREMENTS FOR HOMEOWNERSHIP ASSIST-
ANCE.—The Secretary shall by regulation establish re-
quirements applicable to housing costs assistance pro-
grams established under this section to provide that, in
the case of assistance for purchase of a dwelling unit—
(1) such assistance is provided only on behalf of
eligible families for whom the terms of the purchase
(including the loan amount and interest rate, other
financing provisions, and other obligations) are rea-
sonable, taking into consideration the assets, income,
and obligations of the eligible family assisted; and
(2) upon the sale of the dwelling unit by the eli-
gible family, the housing costs assistance program
shall recapture from any net proceeds of the sale the
amount necessary to avoid any unreasonable profit
to the eligible family and make such amount avail-
able for use under the program.
SEC. 204. HOUSING SUPPLY ASSISTANCE PROGRAM.
(a) REQUIREMENT TO CARRY OUT PROGRAM.—Each
eligible public entity that receives grant amounts under
paragraph (1)(B), (2)(B), or (3)(B), as applicable, of sec-
tion 210(a) shall carry out a housing supply assistance
program under this section using such grant amounts to
provide financial assistance for increasing the supply of
affordable housing in the jurisdiction of the eligible public
entity.
(b) ELIGIBLE
HOUSING
DEVELOPMENT
ACTIVI-
TIES.—
(1) IN GENERAL.—A housing supply assistance
program shall provide assistance for the development
of affordable housing for rental or homeownership.
Such assistance may be provided for the acquisition,
new construction, reconstruction, and moderate or
substantial rehabilitation of affordable housing,
which may include costs for real property acquisi-
tion, site improvement, conversion, and demolition,
financing costs, relocation expenses of any displaced
persons, families, businesses, or organizations, rea-
sonable administrative and planning costs, and any
other expenses as the Secretary may provide.
(2) 
AFFORDABILITY
REQUIREMENT.—Any
housing for which assistance is provided pursuant to
paragraph (1) with grant amounts shall be subject
to binding restrictions sufficient to ensure that, for
the entire useful life of the housing, the housing is
used as affordable housing.
(3) COST LIMITS.—The Secretary shall by regu-
lation establish limitations on the amount of assist-
ance provided under a housing assistance supply
program that may be used for administrative, plan-
ning, and development costs of affordable housing.
(4) REQUIRED
NUMBER
OF
UNITS
FOR
EX-
TREMELY LOW-, VERY LOW-, AND LOW-INCOME FAM-
ILIES.—Of the number of dwelling units in housing
assisted under this subsection under the housing
supply assistance program of an eligible public entity
in a fiscal year—
(A) the percentage of such number that
are subject to binding restrictions ensuring af-
fordability to, and priority for occupancy by, ex-
tremely low-income families shall not be less
than the percentage of low-income renter fami-
lies with housing problems in the jurisdiction of
the eligible public entity that are extremely low-
income families, as determined based on the
most recent information available from the Sec-
retary;
(B) the percentage of such number that
are subject to binding restrictions ensuring af-
fordability to, and priority for occupancy by,
very low-income families shall not be less than
the percentage of low-income renter families
with housing problems in the jurisdiction of the
eligible public entity that are very low-income
families (but not extremely low-income fami-
lies), as determined based on the most recent
information available from the Secretary; and
(C) the percentage of such number that
are subject to binding restrictions ensuring af-
fordability to, and priority for occupancy by,
low-income families shall not be less than the
percentage of low-income renter families with
housing problems in the jurisdiction of the eligi-
ble public entity that are low-income families
(but not very low-income families), as deter-
mined based on the most recent information
available from the Secretary.
(5) REQUIRED PROPORTION OF RENTAL UNITS
TO
HOMEOWNERSHIP
UNITS.—Of the number of
dwelling units in housing assisted under this sub-
section under a housing supply assistance program
of an eligible public entity in a fiscal year, the per-
centage of such number that are units available for
rental shall not be less than the percentage that is
10 percent less than the percentage of low-income
families with housing problems in the jurisdiction of
the entity that are renters, as determined based on
the most recent information available to the Sec-
retary.
(6) REQUIRED
PROPORTION
OF
ASSISTED
UNITS IN POVERTY AREAS.—Of the number of dwell-
ing units in housing assisted under this subsection
under a housing supply assistance program of an eli-
gible public entity in a fiscal year, the percentage of
such number that are located in poverty areas shall
not be less than the percentage of the number of
low-income families residing within the jurisdiction
of the entity that reside within poverty areas, as de-
termined based on the most recent information avail-
able to the Secretary.
(7) ALLOCATION FOR RURAL AREAS.—Of the
grant amounts available for a fiscal year for a public
entity that is a State to carry out a housing supply
assistance program under this section, the State
shall allocate an amount for each rural area based
on a formula, determined by the Secretary, that de-
termines the need for such assistance in each such
area based on the number of extremely low- and
very low-income families residing in the area. The
weight given under the formula to the number of ex-
tremely low-income families residing in a rural area
shall be twice the weight given under the formula to
the number of such very-low income families.
(c) ELIGIBLE HOUSING REPAIR ACTIVITIES.—
(1) IN GENERAL.—A housing supply assistance
program may provide assistance for emergency re-
pairs of housing, abatement of lead-based paint, and
removal of such other hazards in housing as the Sec-
retary shall provide.
(2) LIMITATION ON HOUSING ASSISTED.—As-
sistance may be provided under paragraph (1) only
if—
(A) the housing assisted is subject to bind-
ing restrictions sufficient to ensure that, for the
entire useful life of the housing, the housing is
used as affordable housing; or
(B) the activities conducted with such as-
sistance are conducted on behalf of residents of
the housing who are very low-income families to
enable such families to remain in the housing.
(d) ELIGIBLE HOUSING SERVICES ACTIVITIES.—
(1) IN GENERAL.—A housing supply assistance
program may provide assistance for carrying out
services relating to the development of decent and
affordable housing, eliminating segregation in the
availability and occupancy of such housing, and im-
proving the capacity of moderate-income families to
obtain and maintain such housing.
(2) ELIGIBLE
ACTIVITIES.—Activities eligible
for assistance under this subsection shall include—
(A) fair housing enforcement activities;
(B) counseling relating to housing and
neighborhood choice;
(C) counseling regarding homeownership
and tenant affairs and responsibilities;
(D) support services for nonprofit organi-
zations engaged in developing or managing af-
fordable housing;
(E) employment training for moderate-in-
come families;
(F) development of the capacity of commu-
nity housing development organizations and
tenant organizations;
(G) supportive services for moderate-in-
come residents of affordable housing (including
day care and job counseling);
(H) technical assistance to organizations in
developing proposals for assistance under the
housing supply assistance program; and
(I) other services as the Secretary may
provide.
(3) 
LIMITATION
ON
AVAILABILITY
OF
AMOUNTS.—The Secretary shall establish, by regula-
tion, limitations on the portion of grant amounts for
a fiscal year received by an eligible public entity and
available for carrying out a housing supply assist-
ance program that may be used for services under
this subsection. The limitations shall be expressed in
terms of percentages of the grant amounts available
for carrying out the housing supply assistance pro-
gram, none of which may exceed 15 percent and
which shall progressively decrease as such amount
increases.
(e) PROHIBITED USES.—Amounts available for car-
rying out a housing assistance supply program may not
be used—
(1) to provide tenant-based assistance for the
rental of a dwelling unit, including providing re-
placement units for public housing to meet the re-
quirements under section 18 of the United States
Housing Act of 1937;
(2) provide non-Federal matching contributions
required under any other Federal program;
(3) provide assistance authorized under section
9 of the United States Housing Act of 1937;
(4) carry out activities authorized under section
14 of the United States Housing Act of 1937; or
(5) provide assistance to eligible low-income
housing under the provisions of the Emergency Low
Income Housing Preservation Act of 1987 or the
Low-Income Housing Preservation and Resident
Homeownership Act of 1990, except in the case of
such assistance in connection with acquisition of the
housing by a priority purchaser (as such term is de-
fined in section 231(a) of the Low-Income Housing
Preservation and Resident Homeownership Act of
1990).
(f) ECONOMIC OPPORTUNITIES
FOR LOW-INCOME
PERSONS.—Amounts available to carry out a housing sup-
ply assistance program shall be considered the provision
of housing assistance for purposes of section 3 of the
Housing and Urban Development Act of 1968. The Sec-
retary shall issue regulations to carry out the provisions
of such section with respect to assistance provided under
housing supply assistance programs.
(g) ELIGIBLE HOUSING PROVIDERS.—Assistance for
activities under this section may be provided to any entity
capable, in the determination of the eligible public entity
providing the assistance, to carry out such activities, in-
cluding nonprofit organizations, cooperative housing orga-
nizations, public housing agencies and other public agen-
cies, and for-profit housing providers.
(h) USE
OF ASSISTANCE UNDER OTHER PRO-
GRAMS.—Except as provided in subsection (e), amounts
available to carry out a housing supply assistance program
may be used for activities under other Federal, State, and
local programs to the extent the use of such assistance
complies with the requirements under this title.
SEC. 205. AFFORDABILITY.
(a) IN GENERAL.—The Secretary shall issue regula-
tions establishing requirements that must be met for hous-
ing to be considered affordable housing for purposes of
this title.
(b) CONTENT.—The regulations under subsection (a)
shall include requirements regarding—
(1) in the case of rental dwelling units, the
maximum monthly rents for the units, which shall
take into consideration the fair market rentals for
the relevant area and, if applicable, the income
group for which the unit is to be affordable; and
(2) in the case of homeownership dwelling
units—
(A) the maximum purchase price of the
units;
(B) resale restrictions appropriate—
(i) to allow for subsequent purchase of
the property only by an eligible family at
a price that will—
(I) provide the owner with a fair
return on investment, including any
improvements; and
(II) ensure that the housing will
remain affordable; or
(ii) to recapture from any net pro-
ceeds of the sale the amount necessary to
avoid any unreasonable profit to the seller
and make such amount available for use
under the program; and
(3) in the case of multifamily housing—
(A) the number or percentage of units in
the housing that comply with the applicable re-
quirements established under paragraph (1) or
(2); and
(B) the number or percentage of units in
the housing available for occupancy only by eli-
gible families.
(c) STANDARDS FOR INCOME GROUPS.—The Sec-
retary shall issue regulations establishing requirements
that must be met for a dwelling unit to be considered af-
fordable for purposes of this title for each of the income
groups.
SEC. 206. ELIGIBLE PUBLIC ENTITIES.
For purposes of this title, the term ‘‘eligible public
entity’’ means, with respect to a fiscal year, a public entity
that meets the following requirements:
(1) SUBMISSION OF CHAS.—The public entity
has submitted to the Secretary a comprehensive
housing affordability strategy under section 105 of
the Cranston-Gonzalez National Affordable Housing
Act for such year that has been approved under such
section.
(2) DESIGNATION OF RECIPIENT AGENCY.—The
public entity has designated or established a public
agency of the government of the public entity for
purposes of carrying out this title for the public en-
tity, which such agency—
(A) is governed by a board of directors or
other similar governing body whose members—
(i) are appointed by the chief execu-
tive officer of the government for the pub-
lic entity, except that not less than 50 per-
cent of the members shall be individuals
who were recommended for membership by
individuals and entities other than the
agency referred to in the matter preceding
subparagraph (A) or any official of the
government for the public entity or of such
agency;
(ii) include—
(I) not less than 1 individual who
is homeless at the time of such ap-
pointment or previously was homeless;
(II) not less than 1 individual
who represents a nonprofit organiza-
tion significantly engaged in low-in-
come housing advocacy activities; and
(III) not less than 1 individual
who represents a nonprofit organiza-
tion significantly engaged in providing
housing assistance and supportive
services to low-income and homeless
families; and
(iii) in the case of an agency for a
public entity that is a State, complies with
the requirements for geographic distribu-
tion that the Secretary shall establish to
ensure that the various geographic areas of
the State are fairly represented in the
membership of the governing body; and
(B) complies with requirements that the
Secretary shall establish to ensure that the
agency is capable of carrying out activities
under this title for the public entity, including
receiving and distributing the grant for the
public entity, conducting activities under sec-
tions 203 and 204 or selecting subgrantee orga-
nizations and entities to undertake such activi-
ties, and monitoring such activities in accord-
ance with section 212(a).
(3) PLAN.—The public entity has submitted to
the Secretary a Trust Fund grant plan in accord-
ance with section 208 for the fiscal year that has
been approved by the Secretary under such section.
(4) COMPLIANCE
WITH
PROGRAM
REQUIRE-
MENTS.—The public entity has entered into an
agreement with the Secretary, as the Secretary may
require, to comply with the provisions of this title
and the Trust Fund grant plan for such year for the
entity that is approved by the Secretary.
SEC. 207. REQUIREMENTS OF ELIGIBLE PUBLIC ENTITIES.
(a) CITIZEN PARTICIPATION PROCEDURES.—Each
eligible public entity that receives grant amounts for a fis-
cal year shall establish procedures, in accordance with reg-
ulations that the Secretary shall issue to carry out this
subsection, to ensure the participation of citizens in deter-
minations relating to the programs for assistance under
sections 203 and 204, subject to the following require-
ments:
(1) COVERED
ISSUES.—The citizen participa-
tion procedures under this subsection shall apply to
any determinations made for the eligible public en-
tity regarding the following issues:
(A) Identifying the housing needs of the
entity and priorities for use of grant amounts
for addressing such needs.
(B) Developing requirements and proce-
dures for expending grant amounts.
(C) Reviewing proposals for assistance
with grant amounts and determining the alloca-
tion of grant amounts among such proposals.
(D) Monitoring and reviewing the perform-
ance of the eligible public entity in complying
with the Trust Fund grant plan of the entity.
(E) Recommending and developing im-
provements in the operations of the eligible
public entity to implement the Trust Fund
grant plan of the entity.
(F) Amending or changing the Trust Fund
grant plan for the entity.
(G) Submitting a performance review
under section 212(a) for the entity.
(H) Establishing a system of local pref-
erences under section 203(d)(2) for housing
costs assistance.
(I) Such other issues as the Secretary may
provide.
(2) PROCEDURE.—The citizen participation re-
quirements under this subsection for an eligible pub-
lic entity shall provide for—
(A) public hearings to obtain the views of
citizens, public agencies, and other interested
parties regarding significant actions referred to
in paragraph (1), which shall be conducted a
reasonable period of time before any such ac-
tion is taken;
(B) publication of each performance review
under section 212(a) and any substantial
amendment to or change in the Trust Fund
grant plan for the entity; and
(C) a procedure for submission of com-
plaints and grievances regarding the operation
of the programs of the public entity assisted
under this title and for a written response by
the public entity to each such grievance and
complaint not later than 15 days after submis-
sion.
(b) HOUSING QUALITY STANDARDS AND ENFORCE-
MENT.—
(1) SECTION
STANDARDS.—Except as pro-
vided in paragraph (2), each dwelling unit assisted
with grant amounts shall be maintained in the con-
dition that is required under the housing quality
standards established under section 8 of the United
States Housing Act of 1937 with respect to dwelling
units assisted under such section.
(2) ESTABLISHMENT OF LOCAL STANDARDS.—
Each dwelling unit assisted with grant amounts pro-
vided to an eligible public entity whose jurisdiction
is subject to a housing code or quality standards
that have been determined by the Secretary to pro-
vide protection for the health and safety of housing
residents equivalent to or greater than the protection
provided by the standards applicable to housing as-
sisted under section 8 of the United States Housing
Act of 1937 shall be maintained in compliance with
such local code or standards.
(3) ENFORCEMENT.—Each eligible public entity
that receives grant amounts for a fiscal year shall
have in effect procedures, in accordance with regula-
tions that the Secretary shall issue to carry out this
paragraph, to ensure that each dwelling unit of
housing assisted with grant amounts is maintained
in accordance with the housing code or quality
standards applicable under paragraph (1) or (2).
Such procedures may include providing for the vol-
untary transfer of housing that violates such code or
standards in a significant manner to an owner who
will remedy such violations and maintain the hous-
ing in accordance with such code or standards.
(c) PREVENTION OF DISPLACEMENT.—
(1) IN GENERAL.—Each eligible public entity
that receives grant amounts for a fiscal year shall
establish standards and procedures, in accordance
with regulations established by the Secretary, to
minimize the displacement of moderate-income fami-
lies by activities conducted in whole or in part with
grant amounts.
(2) RELOCATION ASSISTANCE.—The standards
and procedures shall ensure that any such family in-
voluntarily displaced by such activities—
(A) is provided assistance under the hous-
ing costs assistance program, if such family is
an eligible family; and
(B) is provided assistance in obtaining and
relocating to a reasonable and suitable alter-
native dwelling unit of decent and affordable
housing.
(d) PROHIBITION OF ASSISTANCE BY STATES FOR
ENTITLEMENT COMMUNITIES.—An eligible public entity
that is a State that receives grant amounts for a fiscal
year may not use any of such amounts for carrying out
eligible activities under section 202(a) in entitlement com-
munities within the State.
(e) ENFORCEMENT OF REQUIREMENTS.—Each eligi-
ble public entity that receives grant amounts for a fiscal
year shall have in effect procedures, in accordance with
regulations that the Secretary shall issue to carry out this
subsection, to ensure that any grant amounts provided to
any subgrantee to carry out a housing costs assistance
program or a housing supply assistance program are used
in accordance with the requirements of this title.
SEC. 208. TRUST FUND GRANT PLANS.
(a) REQUIREMENTS FOR APPROVAL.—A Trust Fund
grant plan for a public entity for a fiscal year is in accord-
ance with this section only if the plan complies with follow-
ing requirements:
(1) SUBMISSION.—The plan is submitted not
later than 90 days before the commencement of the
fiscal year by the agency of the public entity des-
ignated under section 206(2).
(2) HOUSING COSTS ASSISTANCE PROGRAM.—
The plan—
(A) provides for using grant amounts to
the extent provided in section 202(b)(1)(A) to
carry out a housing costs assistance program in
accordance with section 203 within the jurisdic-
tion of the public entity;
(B) describes how assistance will be pro-
vided under the program to assist minority
families to move to areas without high con-
centrations of persons living in poverty;
(C) describes how families receiving assist-
ance under the program will be provided coun-
seling in accordance with section 203(g); and
(D) describes the operation of the program
and identifies and describes the entities admin-
istrating the program.
(3) HOUSING SUPPLY ASSISTANCE PROGRAM.—
The plan—
(A) provides for using grant amounts to
the extent provided in section 202(b)(1)(B) to
carry out a housing supply assistance program
in accordance with section 204 within the juris-
diction of the public entity;
(B) describes, for each income group, the
shortage of decent housing in the jurisdiction of
the public entity that is affordable for the in-
come group;
(C) describes how, and the extent to which,
the program will remedy such shortages;
(D) describes the priorities for the types of
housing to be provided under the program, the
areas for locating housing to be provided under
the program, and the families to be offered oc-
cupancy in such housing;
(E) describes how the program will comply
with the requirements under section 207(c) re-
garding avoiding displacement and providing
assistance for families involuntarily displaced;
(F) describes the provisions under the pro-
gram to comply with section 207(b) regarding
ensuring housing quality; and
(G) describes the operation of the program
and identifies and describes the entities admin-
istrating the program.
(4) CERTIFICATION
OF
PREVIOUS
COMPLI-
ANCE.—With respect to fiscal year 1997 and subse-
quent fiscal years, the plan contains a certification
that, for the most recent fiscal year for which the el-
igible public entity received a grant under this title,
the entity complied with the requirements under this
title.
(5) CITIZEN
PARTICIPATION
IN
PREPARA-
TION.—The public entity has, in preparing the
plan—
(A) made available to citizens, public agen-
cies, and other interested parties reasonable
and timely access to meetings, information, and
records relating to any amounts the entity has
received under this title in previous years, the
amount the entity expects to receive for the fis-
cal year under this title, and the proposed uses
of the grant amounts;
(B) published the proposed plan in a man-
ner that, in the determination of the Secretary,
affords affected citizens, public agencies, and
other interested parties a reasonable oppor-
tunity to examine its content and to submit
comments on the proposed plan;
(C) held 1 or more public hearings to ob-
tain the views of citizens, public agencies, and
other interested parties on the needs of the
public entity with respect to eligible families
and the supply of affordable housing;
(D) considered any comments or views of
citizens in preparing the final plan for submis-
sion under this section and attached a summary
of such comments or views to the plan submit-
ted; and
(E) made the plan submitted available to
the public.
(6) ONGOING
CITIZEN
PARTICIPATION.—The
plan describes the procedures for ongoing citizen
participation required under section 207(a).
(7) HOUSING
QUALITY
ENFORCEMENT
MEAS-
URES.—The plan describes the procedures developed
to comply with the requirement under section
207(b)(3) to enforce the housing code or quality
standards applicable to housing assisted under this
title.
(8) OTHER.—The plan contains any other in-
formation that the Secretary considers appropriate
to carry out the purposes of this title.
(b) REVIEW.—
(1) IN GENERAL.—Upon the submission of a
Trust Fund grant plan under this section, the Sec-
retary shall review the plan to determine whether it
is in accordance with this section. Not later than 90
days after receipt by the Secretary, the Secretary
shall approve the plan unless the Secretary deter-
mines that it has not been submitted in accordance
with this section, in which case the Secretary shall
disapprove the plan.
(2) NOTIFICATION.—The Secretary shall imme-
diately notify the public entity submitting a plan, in
writing, of any approval or disapproval of the plan.
A plan shall be considered to have been approved
under this subsection for purposes of section 206(3)
unless the Secretary provides notice under this para-
graph of disapproval during the period referred to
paragraph (1) of this subsection.
(3) DISAPPROVAL.—In the case of a plan dis-
approved by the Secretary, the Secretary shall in-
clude with the notification of disapproval a written
description of the reasons for the disapproval identi-
fying the specific deficiencies of the plan.
(4) AMENDMENTS
AND
RESUBMISSION.—Any
public entity whose plan has been disapproved may
amend or resubmit the plan during the 60-day pe-
riod beginning upon notice of disapproval. The Sec-
retary shall review, and approve or disapprove, a
plan amended or resubmitted under this paragraph
not later than 60 days after receipt of the resubmit-
ted plan, and shall immediately notify the public en-
tity amending or resubmitting the plan, in writing,
of such approval or disapproval. A plan resubmitted
or amended under this paragraph shall be consid-
ered to have been approved under this subsection for
purposes of section 206(3) unless the Secretary pro-
vides notice under this paragraph of disapproval
during such period.
(c) UPDATED PLANS.—A public entity may, for any
fiscal year, submit to the Secretary a Trust Fund grant
plan that was submitted by the public entity for a preced-
ing fiscal year and approved under this section by the Sec-
retary, together with written changes or amendments to
such plan. Such plan, together with such changes and
amendments, shall be considered for purposes of this title
to be the Trust Fund grant plan submitted by such public
entity for the fiscal year.
SEC. 209. ALLOCATION OF TRUST FUND AMOUNTS FOR
STATES, ENTITLEMENT COMMUNITIES, AND
INDIAN TRIBES.
(a) SET ASIDE FOR HUD ADMINISTRATIVE ACTIVI-
TIES.—For each fiscal year, the Secretary shall reserve
for activities under section 213 an amount equal to 1 per-
cent of the total amounts available for the fiscal year to
carry out this title.
(b) ENTITLEMENT COMMUNITIES.—
(1) IN GENERAL.—In each fiscal year, the Sec-
retary shall allocate a portion of the total Fund
grant amounts (as such term is defined in section
217) for the fiscal year for grants under this title
for eligible public entities that are entitlement com-
munities.
(2) AMOUNT.—For a fiscal year, the amount al-
located for entitlement communities pursuant to
paragraph (1) shall bear the same ratio to the total
Fund grant amounts for the fiscal year that—
(A) the number of low-income families with
a housing problem who reside in an entitlement
community that is an eligible public entity,
bears to
(B) the total number (for all States) of
low-income families with a housing problem.
(c) INDIAN TRIBES.—
(1) IN GENERAL.—In each fiscal year, the Sec-
retary shall allocate a portion of the total Fund
grant amounts for the fiscal year for eligible public
entities that are Indian tribes.
(2) AMOUNT.—For a fiscal year, the amount al-
located for Indian tribes pursuant to paragraph (1)
shall bear the same ratio to the total Fund grant
amounts for the fiscal year that—
(A) the number of low-income families
who—
(i) have a housing problem,
(ii) have a head of household who is
a member of an Indian tribe, and
(iii) reside on Indian land,
bears to
(B) the total number (for all States) of
low-income families with a housing problem.
(d) STATES.—
(1) IN GENERAL.—In each fiscal year, the Sec-
retary shall allocate a portion of the total Fund
grant amounts for the fiscal year for eligible public
entities that are States.
(2) AMOUNT.—For a fiscal year, the amount al-
located for States pursuant to paragraph (1) shall
be equal to the difference between—
(A) the total Fund grant amounts for the
fiscal year; and
(B) the sum of the portions for allocation
for the fiscal year for entitlement communities
and Indian tribes, as determined under sub-
sections (b) and (c), respectively.
(e) SOURCE OF INFORMATION REGARDING FAMILIES
WITH A HOUSING PROBLEM.—In determining the ratios
under subsections (b)(2) and (c)(2), the Secretary shall
use the most recent information regarding the number of
families with housing problems tabulated by the Bureau
of the Census, Department of Commerce, pursuant to in-
formation compiled for use in preparing the comprehensive
housing affordability strategies submitted by participating
jurisdictions under section 105 of the Cranston-Gonzalez
National Affordable Housing Act.
SEC. 210. GRANT ALLOTMENTS.
(a) IN GENERAL.—The amount of the allotment for
an eligible public entity for a fiscal year shall be deter-
mined as follows:
(1) ENTITLEMENT COMMUNITIES.—For an eli-
gible public entity that is an entitlement community,
the amount of the allotment shall be the sum of the
following amounts:
(A) HIGH HOUSING COSTS.—The product
of—
(i) 67 percent of the amount of the al-
location under section 209(b) for the fiscal
year for entitlement communities, and
(ii) the high housing cost ratio under
subsection (b)(1) for the entitlement com-
munity,
as adjusted by the Secretary in accordance with
subsection (c).
(B) AFFORDABLE HOUSING SUPPLY.—The
product of—
(i) 33 percent of the amount of the al-
location under section 209(b) for the fiscal
year for entitlement communities; and
(ii) the affordable housing supply mul-
tiplier under subsection (d) for the entitle-
ment community.
(2) INDIAN TRIBES.—For an eligible public en-
tity that is an Indian tribe, the amount of the allot-
ment shall be the sum of the following amounts:
(A) HIGH HOUSING COSTS.—The product
of—
(i) 67 percent of the amount of the al-
location under section 209(c) for the fiscal
year for Indian tribes, and
(ii) the high housing cost ratio under
subsection (b)(2) for the Indian tribe,
as adjusted by the Secretary in accordance with
subsection (c).
(B) AFFORDABLE HOUSING SUPPLY.—The
product of—
(i) 33 percent of the amount of the al-
location under section 209(c) for the fiscal
year for Indian tribes; and
(ii) the affordable housing supply mul-
tiplier under subsection (d) for the Indian
tribe.
(3) STATES.—For an eligible public entity that
is a State, the amount of the allotment shall be the
sum of the following amounts:
(A) HIGH HOUSING COSTS.—The product
of—
(i) 67 percent of the amount of the al-
location under section 209(d) for the fiscal
year for States, and
(ii) the high housing cost ratio under
subsection (b)(3) for the State,
as adjusted by the Secretary in accordance with
subsection (c).
(B) AFFORDABLE HOUSING SUPPLY.—The
product of—
(i) 33 percent of the amount of the al-
location under section 209(d) for the fiscal
year for States; and
(ii) the affordable housing supply mul-
tiplier under subsection (d) for the State.
(b) HIGH HOUSING COST RATIO.—The ratio under
this subsection for an eligible public entity shall be—
(1) in the case of an entitlement community,
the ratio of—
(A) the number of families residing in the
entitlement community who pay more than 50
percent of the gross family income for housing
costs, to
(B) the total number of families residing in
entitlement communities who pay more than 50
percent of the gross family income for housing
costs;
(2) in the case of an Indian tribe, the ratio of—
(A) number of families who—
(i) pay more than 50 percent of the
gross family income for housing costs,
(ii) have a head of household who is
a member of the tribe, and
(iii) reside on Indian land of the tribe,
to
(B) the total number of families who—
(i) pay more than 50 percent of the
gross family income for housing costs,
(ii) have a head of household who is
a member of an Indian tribe, and
(iii) reside on Indian land; and
(3) in the case of a State, the ratio of—
(A) the number of families residing in the
State (but not within an entitlement commu-
nity) who pay more than 50 percent of the
gross family income for housing costs, to
(B) the total number of families residing in
all States (but not within an entitlement com-
munity) who pay more than 50 percent of the
gross family income for housing costs.
(c) ADJUSTMENT FOR HIGH HOUSING COSTS.—Ad-
justment of an amount for an eligible public entity in ac-
cordance with this subsection shall be an adjustment to
the extent necessary to reflect the cost of affordable hous-
ing in the eligible public entity relative to the cost of af-
fordable housing in other eligible entities, as determined
by the Secretary. Any adjustment of amounts for a fiscal
year in accordance with this subsection shall be made in
such amounts so that the sum of the allotments for all
eligible public entities resulting from paragraphs (1)(A),
(2)(A), and (3)(A) of subsection (a) is equal to 67 percent
of the total Fund grant amounts for the fiscal year.
(d) AFFORDABLE HOUSING SUPPLY MULTIPLIER.—
(1) IN GENERAL.—The Secretary shall, by reg-
ulation, establish a formula to determine, for each
eligible public entity, a number (for purposes of this
section referred to as the ‘‘affordable housing supply
multiplier’’) that reflects the share, for each eligible
public entity, of the total need in all States for addi-
tional units of decent housing that is permanently
affordable for extremely low-, very low-, and low-in-
come families of different size relative to the share
of such need for other eligible public entities, as ad-
justed to take into consideration prevailing levels of
construction and rehabilitation costs.
(2) FACTORS.—The formula established pursu-
ant to paragraph (1) shall be based on objective
measures of inadequate housing supply, including—
(A) population growth;
(B) costs of acquiring, rehabilitating, and
constructing affordable housing;
(C) relative fiscal incapacity to carry out
activities under section 204 without Federal as-
sistance; and
(D) special housing needs.
(e) DE MINIMIS RULE.—Notwithstanding subsection
(a)—
(1) if the allotment determined under sub-
section (a)(1) for an entitlement community is less
than $750,000, the amount of the allotment for the
entitlement community shall instead be $750,000,
and the allotment for each other entitlement commu-
nity shall be adjusted on a pro rata basis;
(2) if the allotment determined under sub-
section (a)(2) for an Indian tribe is less than
$500,000, the amount of the allotment for the In-
dian tribe shall instead be $500,000, and the allot-
ment for each other Indian tribe shall be adjusted
on a pro rata basis; and
(3) if the allotment determined under sub-
section (a)(3) for a State is less than $2,000,000,
the amount of the allotment for the State shall in-
stead be $2,000,000, and the allotment for each
other State shall be adjusted on a pro rata basis.
SEC. 211. MAINTENANCE OF STATE AND LOCAL EFFORT.
Assistance provided with grant amounts may not be
used to replace other public funds previously used, or des-
ignated for use, for activities of the type eligible to be as-
sisted under this title.
SEC. 212. COMPLIANCE.
(a) MONITORING AND PERFORMANCE REPORTS.—
(1) IN GENERAL.—Each eligible public entity
shall monitor the programs for assistance under this
title carried out by the entity and activities assisted
under such programs, and annually conduct a review
of the progress made in carrying out the Trust
Fund grant plan for the entity. Each eligible public
entity shall annually submit a report on such mon-
itoring and review, in the form established by the
Secretary, which shall include information describing
the number and types of families served, including
the number of families in each income group as-
sisted under this title and the racial and ethnic sta-
tus of persons assisted.
(2) SUBMISSION.—The Secretary shall establish
dates for submission of reports under this subsection
and review the reports and make such recommenda-
tions as the Secretary considers appropriate to carry
out the purposes of this title.
(3) FAILURE TO REPORT.—If an eligible public
entity fails to submit a report to the Secretary in a
timely manner or the Secretary determines that the
report is incomplete, assistance under this title to
the entity may be—
(A) withheld until a report satisfactory to
the Secretary is submitted; or
(B) withdrawn and credited to the Fund
for reallocation under section 209 of this title
in the succeeding fiscal year, but only if the
Secretary determines on the record, after notice
to the entity and an opportunity for a hearing,
that the entity will not submit a satisfactory re-
port.
(b) PERFORMANCE REVIEW BY SECRETARY.—
(1) IN GENERAL.—The Secretary shall review
the activities of each eligible public entity that re-
ceives grant amounts for a fiscal year in a timely
manner after the conclusion of such fiscal year.
Such review shall include regular on-site visits in ac-
cordance with a schedule established by the Sec-
retary and assessment of—
(A) management of grant amounts pro-
vided to the eligible public entity;
(B) compliance by the eligible public entity
with the Trust Fund grant plan of the entity;
(C) the accuracy of eligible public entity in
preparing performance reports under subsection
(a); and
(D) efforts of the eligible public entity to
ensure that housing assisted with grant
amounts are maintained in compliance with
contractual agreements and the requirements
under this title.
(2) REPORT.—For each eligible public entity
that submits a performance review under subsection
(a), the Secretary shall submit to the entity a writ-
ten preliminary report evaluating the performance
review. During the 30-day period beginning upon
submission of the report, the eligible public entity
may submit to the Secretary comments regarding
the report. After reviewing such comments but not
later than 30 days after the conclusion of such pe-
riod, the Secretary shall submit to the eligible public
entity a final report evaluating the performance re-
port of the entity. Upon submission to the eligible
public entity, the Secretary shall make the final re-
port, together with the comments submitted by the
entity, publicly available.
(c) REMEDIES
FOR NONCOMPLIANCE WITH PRO-
GRAM REQUIREMENTS.—
(1) AVAILABLE
REMEDIES.—If the Secretary
finds on the record, after reasonable notice and op-
portunity for hearing, that an eligible public entity
has failed to comply substantially with any provision
of this title, the Secretary, until the Secretary deter-
mines that there is no longer any such failure to
comply, shall take one or more of the following ac-
tions:
(A) Termination of the payment of assist-
ance under this title to the entity.
(B) Reduction of the amount of assistance
under this title to the entity by an amount
equal to the amount of such payments which
were not expended in accordance with this title.
(C) Limitation of the availability of pay-
ments under this title to programs, projects, or
activities not affected by such failure to comply.
(D) Termination of the allotment for the
entity for subsequent fiscal years.
(2) CIVIL ACTION.—
(A) AVAILABILITY.—In lieu of, or in addi-
tion to, any action authorized by paragraph (1),
the Secretary may, if the Secretary has reason
to believe that an eligible public entity has
failed to comply substantially with any provision
of this title, refer the matter to the Attorney
General of the United States with a rec-
ommendation that an appropriate civil action be
commenced.
(B) RELIEF SOUGHT.—Upon such a refer-
ral the Attorney General may bring a civil ac-
tion in any United States district court having
venue thereof for such relief as may be appro-
priate, including an action to recover the
amount of the assistance provided under this
title which was not expended in accordance with
this title, or for mandatory or injunctive relief.
(3) PETITION FOR REVIEW.—
(A) AVAILABILITY.—Any eligible public en-
tity which receives notice under paragraph (1)
of the termination, reduction, or limitation of
payments under this title may, within 60 days
after receiving such notice, file with the United
States Court of Appeals for the circuit in which
such State is located, or in the United States
Court of Appeals for the District of Columbia,
a petition for review of the Secretary’s action.
The petitioner shall forthwith transmit copies of
the petition to the Secretary and the Attorney
General of the United States, who shall rep-
resent the Secretary in the litigation.
(B) FILING OF RECORD.—The Secretary
shall file in the court a record of the proceeding
on which the Secretary based the action, as pro-
vided in section 2112 of title 28, United States
Code. No objection to the action of the Sec-
retary shall be considered by the court unless
such objection has been urged before the Sec-
retary.
(C) RULES OF PROCEEDING.—The court
shall have jurisdiction to affirm or modify the
action of the Secretary or to set it aside in
whole or in part. The findings of fact by the
Secretary, if supported by substantial evidence
on the record considered as a whole, shall be
conclusive. The court may order additional evi-
dence to be taken by the Secretary, and to be
made part of the record. The Secretary may
modify findings of fact made by the Secretary,
or make new findings, by reason of the new evi-
dence so taken and filed with the court, and the
Secretary shall also file such modified or new
findings, which findings with respect to ques-
tions of fact shall be conclusive if supported by
substantial evidence on the record considered as
a whole, and shall also file a recommendation,
if any, for the modification or setting aside of
the original action of the Secretary.
(D) JURISDICTION.—Upon the filing of the
record with the court, the jurisdiction of the
court shall be exclusive and its judgment shall
be final, except that such judgment shall be
subject to review by the Supreme Court of the
United States upon writ of certiorari or certifi-
cation as provided in section 1254 of title 28,
United State Code.
SEC. 213. ADMINISTRATIVE EXPENSES.
The Secretary may use the amounts reserved under
section 209(a) for a fiscal year for conducting perform-
ance reviews under section 212(b), for costs of the Hous-
ing Trust Fund Advisory Committee under section 213,
and for costs of administration relating to carrying out
this title.
SEC. 214. HOUSING TRUST FUND PROGRAM ADVISORY
COMMITTEE.
(a) ESTABLISHMENT.—There is hereby established
the Housing Trust Fund Advisory Committee (in this sec-
tion referred to as the ‘‘Committee’’).
(b) MEMBERSHIP.—
(1) APPOINTMENT.—The Committee shall be
composed of an odd number of members, which is
not less than 7 and not more than 15, who shall be
appointed by the Secretary of Housing and Urban
Development.
(2) EXPERIENCE.—Not less than a majority of
the members of the Committee shall be individuals
who—
(A) represent the interests of low-income
families; or
(B) have experience in issues regarding
providing affordable housing for low-income
families and in working on such issues with
low-income families.
(c) CHAIRPERSON.—The Chairperson of the Commit-
tee shall be designated by the Secretary at the time of
appointment.
(d) TERMS.—
(1) IN GENERAL.—Each member of the Com-
mittee shall be appointed for a term of 4 years, ex-
cept as provided in paragraphs (2) and (3).
(2) TERMS OF INITIAL APPOINTEES.—As des-
ignated by the Secretary at the time of appointment,
of the members first appointed—
(A) not less than 1 shall be appointed for
a term of 1 year;
(B) not less than 2 shall be appointed for
terms of 2 years;
(C) not less than 2 shall be appointed for
terms of 3 years; and
(D) not less than 2 shall be appointed for
terms of 4 years.
(3) VACANCIES.—Any member appointed to fill
a vacancy occurring before the expiration of the
term for which the member’s predecessor was ap-
pointed shall be appointed only for the remainder of
such term.
(e) DUTIES.—The Committee shall meet not less
than annually to—
(1) review the use by eligible public entities of
amounts provided under this title to the entities
from the Fund;
(2) make recommendations to the Adminis-
trator for changes in Federal policy to further the
purposes of this title; and
(3) consider such other matters relating to the
Fund and the housing costs assistance and housing
supply assistance programs under this title as the
Committee considers appropriate or requested by the
Secretary, including—
(A) reviewing the allocation of amounts
under section 209;
(B) periodically reviewing the formulas and
system for grant allotments under section 210,
including the establishment of the high housing
cost ratios, adjustments for high housing costs,
and affordable housing supply multipliers; and
(C) analyzing the adequacy of the grant al-
lotments determined under section 210 for ena-
bling public entities to respond to the housing
needs in their jurisdictions.
(f) REIMBURSEMENT FOR EXPENSES.—Members of
the Committee shall serve without pay, but, to the extent
amounts are available pursuant to section 209, shall be
entitled to reimbursement for travel, subsistence, and
other necessary expenses incurred in the performance of
their duties.
(g) EXEMPTION FROM AUTOMATIC TERMINATION
PROVISIONS.—Section 14(a)(2)(B) of the Federal Advi-
sory Committee Act (5 U.S.C. App.; relating to the termi-
nation of advisory committees) shall not apply to the Com-
mittee.
SEC. 215. ADMINISTRATOR OF TRUST FUND IN DEPART-
MENT OF HOUSING AND URBAN DEVELOP-
MENT.
Section 4 of the Department of Housing and Urban
Development Act (42 U.S.C. 3533) is amended by adding
at the end the following new subsection:
‘‘(g) ADMINISTRATOR OF TRUST FUND.—There shall
be in the Department an Administrator of the Housing
Trust Fund, who shall be appointed by the President by
and with the advice and consent of the Senate, who shall
be responsible, on behalf of the Secretary, for administer-
ing amounts in the Housing Trust Fund established under
section 9512 of the Internal Revenue Code of 1986 in ac-
cordance with title II of the Federal Housing Trust Fund
Act of 1995.’’.
SEC. 216. DEFINITIONS.
For purposes of this title, the following definitions
shall apply:
(1) The term ‘‘adjusted income’’ means, with
respect to a family, the income of the family (from
all sources) which remains after excluding—
(A) $550 for each member of the family
residing in the household (other than the head
of the household or his spouse) who is under 18
years of age or who is 18 years of age or older
and is disabled or handicapped or a full-time
student;
(B) $400 for any elderly or disabled fam-
ily;
(C) the amount by which the aggregate of
the following expenses of the family exceeds 3
percent of annual family income: (i) medical ex-
penses for any family, and (ii) reasonable at-
tendant care and auxiliary apparatus expenses
for each handicapped member of any family, to
the extent necessary to enable any member of
such family (including such handicapped mem-
ber) to be employed;
(D) child care expenses to the extent nec-
essary to enable another member of the family
to be employed or to further his or her edu-
cation;
(E) 10 percent of the earned income of the
family;
(F) any payment made by a member of the
family for the support and maintenance of any
child, spouse, or former spouse who does not re-
side in the household, except that the amount
excluded under this subparagraph shall not ex-
ceed the lesser of (i) the amount that such fam-
ily member has a legal obligation to pay; or (ii)
$550 for each individual for whom such pay-
ment is made;
(G) an amount equal to 50 percent of ag-
gregate amount of personal exemptions allowed
under section 151 of the Internal Revenue Code
of 1986 for the family; and
(H) excessive travel expenses, not to ex-
ceed $25 per family per week, for employment-
or education-related travel.
(2) The term ‘‘affordable’’ means, with respect
to a particular income group, that a dwelling unit
complies with the requirements established under
section 205(c) for the income group.
(3) The term ‘‘affordable housing’’ means hous-
ing that complies with the requirements established
under section 205(a).
(4) The term ‘‘city’’ has the meaning given the
term in section 102(a) of the Housing and Commu-
nity Development Act of 1974.
(5) The term ‘‘community housing development
organization’’ has the meaning given the term in
section 104 of the Cranston-Gonzalez National Af-
fordable Housing Act.
(6) The term ‘‘decent’’ means, with respect to
housing, that the housing is maintained in the condi-
tion required by the housing quality standards estab-
lished under section 8 of the United States Housing
Act of 1937 with respect to dwelling units assisted
under such section or in compliance with the re-
quirement under paragraph (2) of section 207(b), if
applicable.
(7) The term ‘‘eligible family’’ means a house-
hold, including a single person, for whom the fair
market rental of a dwelling unit of the size appro-
priate for the household and located in the jurisdic-
tion of the eligible public entity providing assistance
under this title for the family exceeds 30 percent of
the household’s adjusted monthly income.
(8) The term ‘‘eligible public entity’’ means a
public entity that meets the requirements of section
206.
(9) The term ‘‘entitlement community’’ means,
with respect to a fiscal year—
(A) any city within a metropolitan area
which is the central city of such area, as de-
fined and used by the Director of the Office of
Management and Budget;
(B) any other city, within a metropolitan
area that has a population of 100,000 or more;
(C) any county that is classified for the fis-
cal year as an urban county for purposes of the
community development block grant program
under title I of the Housing and Community
Development Act of 1974; or
(D) any consortia of units of general local
government that the Secretary determines has
sufficient authority and administrative capacity
to carry out the functions of an entitlement
community under this title on behalf of its
member jurisdictions.
(10) The term ‘‘extremely low-income family’’
means a household whose income does not exceed 30
percent of the median income for the area, as deter-
mined by the Secretary with adjustments for smaller
and larger households.
(11) The term ‘‘fair market rental’’ means the
fair market rental for a dwelling unit established
under section 8 of the United States Housing Act of
1937.
(12) The term ‘‘family with housing problems’’
means a low-income family—
(A) that pays for housing costs an amount
in excess of 30 percent of the adjusted income
of the family; or
(B) lives in a dwelling unit that is over-
crowded or that lacks kitchen or plumbing fa-
cilities.
(13) The term ‘‘Fund’’ means the Housing
Trust Fund established by section 9512 of the Inter-
nal Revenue Code of 1986.
(14) 
The 
term 
‘‘grant 
amounts’’ 
means
amounts provided under this title to an eligible pub-
lic entity.
(15) The term ‘‘homeless individual’’ has the
meaning given the term in section 103 of the Stew-
art B. McKinney Homeless Assistance Act.
(16) The term ‘‘housing costs’’ means, with re-
spect to a family, the sum of the amounts paid by
the family, in rent or loan payments, for a dwelling
unit and essential housing utilities (not including
telephone).
(17) The term ‘‘income group’’ means the fol-
lowing groups:
(A) Extremely low-income families.
(B) Very low-income families.
(C) Low-income families.
(D) Moderate-income families.
(18) The term ‘‘Indian land’’ means any real
property owned by an Indian tribe, any real property
held in trust by the United States for an Indian or
Indian tribes, and any real property held by an In-
dian or Indian tribes that is subject to restrictions
on alienation imposed by the United States.
(19) The term ‘‘Indian tribe’’ has the meaning
given the term in section 102(a) of the Housing and
Community Development Act of 1974.
(20) The term ‘‘low-income family’’ means a
household whose income does not exceed 80 percent
of the median income for the area, as determined by
the Secretary with adjustments for smaller and larg-
er households. The term includes a very low-income
family and an extremely low-income family.
(21) The term ‘‘moderate-income family’’
means a household whose income does not exceed 95
percent of the median income for the area, as deter-
mined by the Secretary with adjustments for smaller
and larger households. The term includes a low-in-
come family, a very low-income family, and an ex-
tremely low-income family.
(22) The term ‘‘poverty area’’ means a census
tract for which more than 10 percent of the house-
holds are extremely low-income families or have in-
comes that do not exceed the poverty line (as estab-
lished by the Office of Management and Budget and
revised periodically in accordance with section
673(2) of the Omnibus Budget Reconciliation Act of
1981) applicable to a family of the size involved.
(23) The term ‘‘public entity’’ means a State,
an entitlement community, or an Indian tribe.
(24) The term ‘‘rural area’’ means any area of
a State not included within an area designated as an
urbanized area by the Bureau of the Census of the
Department of Commerce.
(25) The term ‘‘Secretary’’ means the Secretary
of Housing and Urban Development.
(26) The term ‘‘State’’ means the States of the
United States, the District of Columbia, the Com-
monwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, Guam, the Virgin Is-
lands, American Samoa, and any other territory or
possession of the United States.
(27) The term ‘‘total Fund grant amounts’’
means, with respect to a fiscal year, the difference
between the total amount from the Fund available
for the fiscal year to carry out this title and the
amount reserved pursuant to section 208(a).
(28) The term ‘‘Trust Fund grant plan’’
means, with respect to a fiscal year, a plan under
section 208 for the fiscal year or an update under
section 208(c) for the fiscal year of a plan under
such section submitted and approved for a previous
fiscal year.
(29) The term ‘‘unit of general local govern-
ment’’ any city, town, township, county, parish, vil-
lage, or other general purpose political subdivision of
a State.
(30) The term ‘‘very low-income family’’ means
a household whose income does not exceed 50 per-
cent of the median income for the area, as deter-
mined by the Secretary with adjustments for smaller
and larger households. The term includes a very low-
income family.
SEC. 217. REGULATIONS.
The Secretary shall issue regulations to implement
the provisions of this title. The regulations shall be issued
after notice and opportunity for public comment in accord-
ance with the procedure under section 553 of title 5,
United States Code, applicable to substantive rules (not-
withstanding subsections (a)(2), (b)(B), and (d)(3) of
such section). The regulations shall become effective not
later than 180 days after the date of the enactment of
this Act.
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