H. R. 4194—91
Subtitle B—Public Housing
PART 1—CAPITAL AND OPERATING
ASSISTANCE
SEC. 518. CONTRIBUTIONS FOR LOWER INCOME HOUSING PROJECTS.
(a) REPEALS.—
(1) IN GENERAL.—Section 5 of the United States Housing
Act of 1937 (42 U.S.C. 1437c) is amended—
(A) by striking subsections (h) through (k); and
(B) by redesignating subsection (l), as added by the
preceding provisions of this Act, as subsection (i).
(2) CONFORMING AMENDMENTS.—The United States Hous-
ing Act of 1937 is amended—
(A) in section 21(d) (42 U.S.C. 1437s(d)), by striking
‘‘section 5(h) or’’; and
(C) in section 307 (42 U.S.C. 1437aaa–6), by striking
‘‘section 5(h) and’’.
(b) LOCAL NOTIFICATION.—Section 5(e)(2) of the United States
Housing Act of 1937 (42 U.S.C. 1437c(e)(2)) is amended by inserting
before the period at the end the following: ‘‘; the Secretary shall
require that each such agreement shall provide that, notwithstand-
ing any order, judgment, or decree of any court (including any
settlement order), before making any amounts that are provided
pursuant to any contract for contributions under this title available
for use for the development of any housing or other property not
previously used as public housing, the public housing agency shall
(A) notify the chief executive officer (or other appropriate official)
of the unit of general local government in which the public housing
for which such amounts are to be so used is located (or to be
located) of such use, and (B) pursuant to the request of such
unit of general local government, provide such information as may
reasonably be requested by such unit of general local government
regarding the public housing to be so assisted (except to the extent
otherwise prohibited by law)’’.
SEC. 519. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS.
(a) IN GENERAL.—Section 9 of the United States Housing Act
of 1937 (42 U.S.C. 1437g) is amended to read as follows:
‘‘SEC. 9. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS.
‘‘(a) MERGER INTO CAPITAL FUND.—Except as otherwise pro-
vided in the Quality Housing and Work Responsibility Act of 1998,
any assistance made available for public housing under section
14 of this Act before October 1, 1999, shall be merged into the
Capital Fund established under subsection (d).
‘‘(b) MERGER INTO OPERATING FUND.—Except as otherwise pro-
vided in the Quality Housing and Work Responsibility Act of 1998,
any assistance made available for public housing under section
9 of this Act before October 1, 1999, shall be merged into the
Operating Fund established under subsection (e).
‘‘(c) ALLOCATION AMOUNT.—
‘‘(1) IN GENERAL.—For fiscal year 2000 and each fiscal
year thereafter, the Secretary shall allocate amounts in the
Capital Fund and Operating Funds for assistance for public
housing agencies eligible for such assistance. The Secretary
shall determine the amount of the allocation for each eligible
H. R. 4194—92
agency, which shall be, for any fiscal year beginning after
the effective date of the formulas described in subsections (d)(2)
and (e)(2)—
‘‘(A) for assistance from the Capital Fund, the amount
determined for the agency under the formula under sub-
section (d)(2); and
‘‘(B) for assistance from the Operating Fund, the
amount determined for the agency under the formula under
subsection (e)(2).
‘‘(2) FUNDING.—There are authorized to be appropriated
for assistance for public housing agencies under this section
the following amounts:
‘‘(A) CAPITAL FUND.—For allocations of assistance from
the Capital Fund, $3,000,000,000 for fiscal year 1999, and
such sums as may be necessary for fiscal years 2000, 2001,
2002, and 2003.
‘‘(B) OPERATING FUND.—For allocations of assistance
from the Operating Fund, $2,900,000,000 for fiscal year
1999, and such sums as may be necessary for each of
fiscal years 2000, 2001, 2002, and 2003.
‘‘(d) CAPITAL FUND.—
‘‘(1) IN GENERAL.—The Secretary shall establish a Capital
Fund for the purpose of making assistance available to public
housing agencies to carry out capital and management activi-
ties, including—
‘‘(A) the development, financing, and modernization of
public housing projects, including the redesign, reconstruc-
tion, and reconfiguration of public housing sites and build-
ings 
(including 
accessibility 
improvements) 
and 
the
development of mixed-finance projects;
‘‘(B) vacancy reduction;
‘‘(C) addressing deferred maintenance needs and the
replacement of obsolete utility systems and dwelling equip-
ment;
‘‘(D) planned code compliance;
‘‘(E) management improvements;
‘‘(F) demolition and replacement;
‘‘(G) resident relocation;
‘‘(H) capital expenditures to facilitate programs to
improve the empowerment and economic self-sufficiency
of public housing residents and to improve resident partici-
pation;
‘‘(I) capital expenditures to improve the security and
safety of residents; and
‘‘(J) homeownership activities, including programs
under section 32.
‘‘(2) FORMULA.—The Secretary shall develop a formula for
determining the amount of assistance provided to public hous-
ing agencies from the Capital Fund for a fiscal year, which
shall include a mechanism to reward performance. The formula
may take into account such factors as—
‘‘(A) the number of public housing dwelling units
owned, assisted, or operated by the public housing agency,
the characteristics and locations of the projects, and the
characteristics of the families served and to be served
(including the incomes of the families);
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‘‘(B) the need of the public housing agency to carry
out rehabilitation and modernization activities, replace-
ment housing, and reconstruction, construction, and demo-
lition activities related to public housing dwelling units
owned, assisted, or operated by the public housing agency,
including backlog and projected future needs of the agency;
‘‘(C) the cost of constructing and rehabilitating property
in the area;
‘‘(D) the need of the public housing agency to carry
out activities that provide a safe and secure environment
in public housing units owned, assisted, or operated by
the public housing agency;
‘‘(E) any record by the public housing agency of exem-
plary performance in the operation of public housing, as
indicated by the system of performance indicators estab-
lished pursuant to section 6( j); and
‘‘(F) any other factors that the Secretary determines
to be appropriate.
‘‘(3) CONDITIONS
ON
USE
FOR
DEVELOPMENT
AND
MOD-
ERNIZATION.—
‘‘(A) DEVELOPMENT.—Except as otherwise provided in
this Act, any public housing developed using amounts pro-
vided under this subsection, or under section 14 as in
effect before the effective date under section 503(a) of the
Quality Housing and Work Responsibility Act of 1998, shall
be operated under the terms and conditions applicable
to public housing during the 40-year period that begins
on the date on which the project (or stage of the project)
becomes available for occupancy.
‘‘(B) MODERNIZATION.—Except as otherwise provided
in this Act, any public housing or portion thereof that
is modernized using amounts provided under this sub-
section or under section 14 (as in effect before the effective
date under section 503(a) of the Quality Housing and Work
Responsibility Act of 1998) shall be maintained and oper-
ated under the terms and conditions applicable to public
housing during the 20-year period that begins on the latest
date on which modernization is completed.
‘‘(C) APPLICABILITY OF LATEST EXPIRATION DATE.—Pub-
lic housing subject to this paragraph or to any other provi-
sion of law mandating the operation of the housing as
public housing or under the terms and conditions applicable
to public housing for a specified length of time, shall be
maintained and operated as required until the latest such
expiration date.
‘‘(e) OPERATING FUND.—
‘‘(1) IN GENERAL.—The Secretary shall establish an Operat-
ing Fund for the purpose of making assistance available to
public housing agencies for the operation and management
of public housing, including—
‘‘(A) procedures and systems to maintain and ensure
the efficient management and operation of public housing
units (including amounts sufficient to pay for the reason-
able costs of review by an independent auditor of the docu-
mentation or other information maintained pursuant to
section 6( j)(6) by a public housing agency or resident
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management corporation to substantiate the performance
of that agency or corporation);
‘‘(B) activities to ensure a program of routine preventa-
tive maintenance;
‘‘(C) anticrime and antidrug activities, including the
costs of providing adequate security for public housing resi-
dents, including above-baseline police service agreements;
‘‘(D) activities related to the provision of services,
including service coordinators for elderly persons or persons
with disabilities;
‘‘(E) activities to provide for management and partici-
pation in the management and policy making of public
housing by public housing residents;
‘‘(F) the costs of insurance;
‘‘(G) the energy costs associated with public housing
units, with an emphasis on energy conservation;
‘‘(H) the costs of administering a public housing work
program under section 12, including the costs of any related
insurance needs;
‘‘(I) the costs of repaying, together with rent contribu-
tions, debt incurred to finance the rehabilitation and
development of public housing units, which shall be subject
to such reasonable requirements as the Secretary may
establish; and
‘‘(J) the costs associated with the operation and
management of mixed finance projects, to the extent appro-
priate.
‘‘(2) FORMULA.—
‘‘(A) IN GENERAL.—The Secretary shall establish a for-
mula for determining the amount of assistance provided
to public housing agencies from the Operating Fund for
a fiscal year. The formula may take into account—
‘‘(i) standards for the costs of operating and reason-
able projections of income, taking into account the
characteristics and locations of the public housing
projects and characteristics of the families served and
to be served (including the incomes of the families),
or the costs of providing comparable services as deter-
mined in accordance with criteria or a formula rep-
resenting the operations of a prototype well-managed
public housing project;
‘‘(ii) the number of public housing dwelling units
owned, assisted, or operated by the public housing
agency;
‘‘(iii) the number of public housing dwelling units
owned, assisted, or operated by the public housing
agency that are chronically vacant and the amount
of assistance appropriate for those units;
‘‘(iv) to the extent quantifiable, the extent to which
the public housing agency provides programs and
activities designed to promote the economic self-suffi-
ciency and management skills of public housing resi-
dents;
‘‘(v) the need of the public housing agency to carry
out anti-crime and anti-drug activities, including
providing adequate security for public housing resi-
dents;
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‘‘(vi) the amount of public housing rental income
foregone by the public housing agency as a result of
escrow savings accounts under section 23(d)(2) for fami-
lies participating in a family self-sufficiency program
of the agency under such section 23; and
‘‘(vii) any other factors that the Secretary determines
to be appropriate.
‘‘(B) 
INCENTIVE
TO
INCREASE
CERTAIN
RENTAL
INCOME.—The formula shall provide an incentive to encour-
age public housing agencies to facilitate increases in earned
income by families in occupancy. Any such incentive shall
provide that the agency shall benefit from increases in
such rental income and that such amounts accruing to
the agency pursuant to such benefit may be used only
for low-income housing or to benefit the residents of the
public housing agency.
‘‘(C) TREATMENT OF SAVINGS.—The treatment of utility
and waste management costs under the formula shall pro-
vide that a public housing agency shall receive the full
financial benefit from any reduction in the cost of utilities
or waste management resulting from any contract with
a third party to undertake energy conservation improve-
ments in one or more of its public housing projects.
‘‘(3) CONDITION ON USE.—No portion of any public housing
project operated using amounts provided under this subsection,
or under this section as in effect before the effective date
under section 503(a) of the Quality Housing and Work Respon-
sibility Act of 1998, may be disposed of before the expiration
of the 10-year period beginning upon the conclusion of the
fiscal year for which such amounts were provided, except as
otherwise provided in this Act.
‘‘(f ) NEGOTIATED
RULEMAKING
PROCEDURE.—The formulas
under subsections (d)(2) and (e)(2) shall be developed according
to procedures for issuance of regulations under the negotiated rule-
making procedure under subchapter III of chapter 5 of title 5,
United States Code.
‘‘(g) LIMITATIONS ON USE OF FUNDS.—
‘‘(1) FLEXIBILITY
FOR
CAPITAL
FUND
AMOUNTS.—Of any
amounts appropriated for fiscal year 2000 or any fiscal year
thereafter that are allocated for fiscal year 2000 or any fiscal
year thereafter from the Capital Fund for any public housing
agency, the agency may use not more than 20 percent for
activities that are eligible under subsection (e) for assistance
with amounts from the Operating Fund, but only if the public
housing agency plan for the agency provides for such use.
‘‘(2) FULL FLEXIBILITY FOR SMALL PHA’S.—Of any amounts
allocated for any fiscal year for any public housing agency
that owns or operates less than 250 public housing dwelling
units, is not designated pursuant to section 6( j)(2) as a troubled
public housing agency, and (in the determination of the Sec-
retary) is operating and maintaining its public housing in a
safe, clean, and healthy condition, the agency may use any
such amounts for any eligible activities under subsections (d)(1)
and (e)(1), regardless of the fund from which the amounts
were allocated and provided. This subsection shall take effect
on the date of the enactment of the Quality Housing and
Work Responsibility Act of 1998.
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‘‘(3) LIMITATION ON NEW CONSTRUCTION.—
‘‘(A) IN
GENERAL.—Except as provided in subpara-
graphs (B) and (C), a public housing agency may not use
any of the amounts allocated for the agency from the Cap-
ital Fund or Operating Fund for the purpose of constructing
any public housing unit, if such construction would result
in a net increase from the number of public housing units
owned, assisted, or operated by the public housing agency
on October 1, 1999, including any public housing units
demolished as part of any revitalization effort.
‘‘(B) EXCEPTION
REGARDING
USE
OF
ASSISTANCE.—A
public housing agency may use amounts allocated for the
agency from the Capital Fund or Operating Fund for the
construction and operation of housing units that are avail-
able and affordable to low-income families in excess of
the limitations on new construction set forth in subpara-
graph (A), but the formulas established under subsections
(d)(2) and (e)(2) shall not provide additional funding for
the specific purpose of allowing construction and operation
of housing in excess of those limitations (except to the
extent provided in subparagraph (C)).
‘‘(C) EXCEPTION
REGARDING
FORMULAS.—Subject to
reasonable limitations set by the Secretary, the formulas
established under subsections (d)(2) and (e)(2) may provide
additional funding for the operation and modernization
costs (but not the initial development costs) of housing
in excess of amounts otherwise permitted under this para-
graph, and such amounts may be so used, if—
‘‘(i) such units are part of a mixed-finance project
or otherwise leverage significant additional private or
public investment; and
‘‘(ii) the estimated cost of the useful life of the
project is less than the estimated cost of providing
tenant-based assistance under section 8(o) for the same
period of time.
‘‘(h) TECHNICAL ASSISTANCE.—To the extent amounts are pro-
vided in advance in appropriations Acts, the Secretary may make
grants or enter into contracts or cooperative agreements in accord-
ance with this subsection for purposes of providing, either directly
or indirectly—
‘‘(1) technical assistance to public housing agencies, resi-
dent councils, resident organizations, and resident management
corporations, including assistance relating to monitoring and
inspections;
‘‘(2) training for public housing agency employees and resi-
dents;
‘‘(3) data collection and analysis;
‘‘(4) training, technical assistance, and education to public
housing agencies that are—
‘‘(A) at risk of being designated as troubled under
section 6( j), to assist such agencies from being so des-
ignated; and
‘‘(B) designated as troubled under section 6( j), to assist
such agencies in achieving the removal of that designation;
‘‘(5) contract expertise;
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‘‘(6) training and technical assistance to assist in the over-
sight and management of public housing or tenant-based assist-
ance; and
‘‘(7) clearinghouse services in furtherance of the goals and
activities of this subsection.
As used in this subsection, the terms ‘training’ and ‘technical assist-
ance’ shall include training or technical assistance and the cost
of necessary travel for participants in such training or technical
assistance, by or to officials and employees of the Department
and of public housing agencies, and to residents and to other eligible
grantees.
‘‘(i) ELIGIBILITY OF UNITS ACQUIRED FROM PROCEEDS OF SALES
UNDER DEMOLITION
OR DISPOSITION PLAN.—If a public housing
agency uses proceeds from the sale of units under a homeownership
program in accordance with section 32 to acquire additional units
to be sold to low-income families, the additional units shall be
counted as public housing for purposes of determining the amount
of the allocation to the agency under this section until sale by
the agency, but in no case longer than 5 years.
‘‘( j) PENALTY FOR SLOW EXPENDITURE OF CAPITAL FUNDS.—
‘‘(1) OBLIGATION OF AMOUNTS.—Except as provided in para-
graph (4) and subject to paragraph (2), a public housing agency
shall obligate any assistance received under this section not
later than 24 months after, as applicable—
‘‘(A) the date on which the funds become available
to the agency for obligation in the case of modernization;
or
‘‘(B) the date on which the agency accumulates ade-
quate funds to undertake modernization, substantial
rehabilitation, or new construction of units.
‘‘(2) EXTENSION OF TIME PERIOD FOR OBLIGATION.—The Sec-
retary—
‘‘(A) may, extend the time period under paragraph
(1) for a public housing agency, for such period as the
Secretary determines to be necessary, if the Secretary
determines that the failure of the agency to obligate assist-
ance in a timely manner is attributable to—
‘‘(i) litigation;
‘‘(ii) obtaining approvals of the Federal Govern-
ment or a State or local government;
‘‘(iii) complying with environmental assessment
and abatement requirements;
‘‘(iv) relocating residents;
‘‘(v) an event beyond the control of the public hous-
ing agency; or
‘‘(vi) any other reason established by the Secretary
by notice published in the Federal Register;
‘‘(B) shall disregard the requirements of paragraph
(1) with respect to any unobligated amounts made available
to a public housing agency, to the extent that the total
of such amounts does not exceed 10 percent of the original
amount made available to the public housing agency; and
‘‘(C) may, with the prior approval of the Secretary,
extend the time period under paragraph (1), for an addi-
tional period not to exceed 12 months, based on—
‘‘(i) the size of the public housing agency;
H. R. 4194—98
‘‘(ii) the complexity of capital program of the public
housing agency;
‘‘(iii) any limitation on the ability of the public
housing agency to obligate the amounts allocated for
the agency from the Capital Fund in a timely manner
as a result of State or local law; or
‘‘(iv) such other factors as the Secretary determines
to be relevant.
‘‘(3) EFFECT OF FAILURE TO COMPLY.—
‘‘(A) PROHIBITION OF NEW ASSISTANCE.—A public hous-
ing agency shall not be awarded assistance under this
section for any month during any fiscal year in which
the public housing agency has funds unobligated in viola-
tion of paragraph (1) or (2).
‘‘(B) WITHHOLDING OF ASSISTANCE.—During any fiscal
year described in subparagraph (A), the Secretary shall
withhold all assistance that would otherwise be provided
to the public housing agency. If the public housing agency
cures its failure to comply during the year, it shall be
provided with the share attributable to the months remain-
ing in the year.
‘‘(C) REDISTRIBUTION.—The total amount of any funds
not provided public housing agencies by operation of this
paragraph shall be allocated for agencies determined under
section 6( j) to be high-performing.
‘‘(4) EXCEPTION TO OBLIGATION REQUIREMENTS.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), if the
Secretary has consented, before the effective date under
section 503(a) of the Quality Housing and Work Respon-
sibility Act of 1998, to an obligation period for any agency
longer than provided under paragraph (1), a public housing
agency that obligates its funds before the expiration of
that period shall not be considered to be in violation of
paragraph (1).
‘‘(B) PRIOR FISCAL YEARS.—Notwithstanding subpara-
graph (A), any funds appropriated to a public housing
agency for fiscal year 1997 or prior fiscal years shall be
fully obligated by the public housing agency not later than
September 30, 1999.
‘‘(5) EXPENDITURE OF AMOUNTS.—
‘‘(A) IN GENERAL.—A public housing agency shall spend
any assistance received under this section not later than
4 years (plus the period of any extension approved by
the Secretary under paragraph (2)) after the date on which
funds become available to the agency for obligation.
‘‘(B) ENFORCEMENT.—The Secretary shall enforce the
requirement of subparagraph (A) through default remedies
up to and including withdrawal of the funding.
‘‘(6) RIGHT
OF
RECAPTURE.—Any obligation entered into
by a public housing agency shall be subject to the right of
the Secretary to recapture the obligated amounts for violation
by the public housing agency of the requirements of this sub-
section.
‘‘(k) EMERGENCY RESERVE AND USE OF AMOUNTS.—
‘‘(1) SET-ASIDES.—In each fiscal year after fiscal year 1999,
the Secretary shall set aside, for use in accordance with this
subsection, not more than 2 percent of the total amount made
H. R. 4194—99
available to carry out this section for such fiscal year. In addi-
tion to amounts set aside under the preceding sentence, in
each fiscal year the Secretary may set from the total amount
made available to carry out this section for such fiscal year
not more than $20,000,000 for the Operation Safe Home pro-
gram administered by the Office of the Inspector General of
the Department of Housing and Urban Development, for law
enforcement efforts to combat violent crime on or near the
premises of public and federally assisted housing.
‘‘(2) USE OF FUNDS.—Amounts set aside under paragraph
(1) shall be available to the Secretary for use for assistance,
as provided in paragraph (3), in connection with—
‘‘(A) emergencies and other disasters; and
‘‘(C) housing needs resulting from any settlement of
litigation; and
‘‘(3) ELIGIBLE USES.—In carrying out this subsection, the
Secretary may use amounts set aside under this subsection
to provide—
‘‘(A) assistance for any eligible use under the Operating
Fund or the Capital Fund established by this section; or
‘‘(B) tenant-based assistance in accordance with
section 8.
‘‘(4) LIMITATION.—With respect to any fiscal year, the Sec-
retary may carry over not more than a total of $25,000,000
in unobligated amounts set aside under this subsection for
use in connection with the activities described in paragraph
(2) during the succeeding fiscal year.
‘‘(5) PUBLICATION.—The Secretary shall publish the use
of any amounts allocated under this subsection relating to
emergencies (other than disasters and housing needs resulting
from any settlement of litigation) in the Federal Register.
‘‘(l) TREATMENT
OF NONRENTAL INCOME.—A public housing
agency that receives income from nonrental sources (as determined
by the Secretary) may retain and use such amounts without any
decrease in the amounts received under this section from the Cap-
ital or Operating Fund. Any such nonrental amounts retained shall
be used only for low-income housing or to benefit the residents
assisted by the public housing agency.
‘‘(m) PROVISION OF ONLY CAPITAL OR OPERATING ASSISTANCE.—
‘‘(1) AUTHORITY.—In appropriate circumstances, as deter-
mined by the Secretary, a public housing agency may commit
capital assistance only, or operating assistance only, for public
housing units, which assistance shall be subject to all of the
requirements applicable to public housing except as otherwise
provided in this subsection.
‘‘(2) EXEMPTIONS.—In the case of any public housing unit
assisted pursuant to the authority under paragraph (1), the
Secretary may, by regulation, reduce the period under sub-
section (d)(3) or (e)(3), as applicable, during which such units
must be operated under requirements applicable to public hous-
ing. In cases in which there is commitment of operating assist-
ance but no commitment of capital assistance, the Secretary
may make section 8 requirements applicable, as appropriate,
by regulation.
‘‘(n) TREATMENT OF PUBLIC HOUSING.—
‘‘(1) CERTAIN STATE AND CITY FUNDED HOUSING.—