113
operative, a shared appreciation interest with a local hous-
ing and management authority providing financing.
(g) RESALE.—
(1) AUTHORITY
AND
LIMITATION.—A home-
ownership program under this section shall permit
the resale of a dwelling unit purchased under the pro-
gram by an eligible family, but shall provide such
limitations on resale as the authority considers ap-
propriate for the authority to recapture—
(A) from any economic gain derived from
any such resale occurring during the 5-year pe-
riod beginning upon purchase of the dwelling
unit by the eligible family, a portion of the
amount of any financial assistance provided
under the program by the authority to the eligi-
ble family; and
(B) after the expiration of such 5-year pe-
riod, only such amounts as are equivalent to the
assistance provided under this section by the au-
thority to the purchaser.
(2) CONSIDERATIONS.—The limitations referred
to in paragraph (1) may provide for consideration of
the aggregate amount of assistance provided under the
program to the family, the contribution to equity pro-
vided by the purchasing eligible family, the period of
114
time elapsed between purchase under the homeowner-
ship program and resale, the reason for resale, any
improvements to the property made by the eligible
family, any appreciation in the value of the property,
and any other factors that the authority considers ap-
propriate.
(h) INAPPLICABILITY
OF
DISPOSITION
REQUIRE-
MENTS.—The provisions of section 261 shall not apply to
disposition of public housing dwelling units under a home-
ownership program under this section, except that any
dwelling units sold under such a program shall be treated
as public housing dwelling units for purposes of subsections
(e) and (f) of section 261.
Subtitle E—Disposition, Demolition,
and Revitalization of Developments
SEC. 261. REQUIREMENTS FOR DEMOLITION AND DISPOSI-
TION OF DEVELOPMENTS.
(a) AUTHORITY AND FLEXIBILITY.—A local housing
and management authority may demolish, dispose of, or de-
molish and dispose of nonviable or nonmarketable public
housing developments of the authority in accordance with
this section.
(b) LOCAL HOUSING MANAGEMENT PLAN REQUIRE-
MENT.—A local housing and management authority may
take any action to demolish or dispose of a public housing
115
development (or a portion of a development) only if such
demolition or disposition complies with the provisions of
this section and is in accordance with the local housing
management plan for the authority.
(c) PURPOSE OF DEMOLITION OR DISPOSITION.—A
local housing and management authority may demolish or
dispose of a public housing development (or portion of a
development) only if the authority provides sufficient evi-
dence to the Secretary that—
(1) the development (or portion thereof) is se-
verely distressed or obsolete;
(2) the development (or portion thereof) is in a
location making it unsuitable for housing purposes;
(3) the development (or portion thereof) has de-
sign or construction deficiencies that make cost-effec-
tive rehabilitation infeasible;
(4) assuming that reasonable rehabilitation and
management intervention for the development has
been completed and paid for, the anticipated revenue
that would be derived from charging market-based
rents for units in the development (or portion thereof)
would not cover the anticipated operating costs and
replacement reserves of the development (or portion)
at full occupancy and the development (or portion)
116
would constitute a substantial burden on the resources
of the local housing and management authority;
(5) retention of the development (or portion
thereof) is not in the best interests of the residents of
the local housing and management authority be-
cause—
(A) developmental changes in the area sur-
rounding the development adversely affect the
health or safety of the residents or the feasible
operation of the development by the local housing
and management authority;
(B) demolition or disposition will allow the
acquisition, development, or rehabilitation of
other properties which will be more efficiently or
effectively operated as low-income housing; or
(C) other factors exist that the authority de-
termines are consistent with the best interests of
the residents and the authority and not incon-
sistent with other provisions of this Act;
(6) in the case only of demolition or disposition
of a portion of a development, the demolition or dis-
position will help to ensure the remaining useful life
of the remainder of the development; or
(7) in the case only of property other than dwell-
ing units—
117
(A) the property is excess to the needs of a
development; or
(B) the demolition or disposition is inciden-
tal to, or does not interfere with, continued oper-
ation of a development.
(d) CONSULTATION.—A local housing and manage-
ment authority may demolish or dispose of a public housing
development (or portion of a development) only if the au-
thority notifies and confers regarding the demolition or dis-
position with—
(1) the residents of the development (or portion);
and
(2) appropriate local government officials.
(e) USE OF PROCEEDS.—Any net proceeds from the
disposition of a public housing development (or portion of
a development) shall be used for—
(1) housing assistance for low-income families
that is consistent with the low-income housing needs
of the community, through acquisition, development,
or rehabilitation of, or homeownership programs for,
other low-income housing or the provision of choice-
based assistance under title III for such families;
(2) supportive services relating to job training or
child care for residents of a development or develop-
ments; or
118
(3) leveraging amounts for securing commercial
enterprises, on-site in public housing developments of
the local housing and management authority, appro-
priate to serve the needs of the residents.
(f) RELOCATION.—A local housing and management
authority that demolishes or disposes of a public housing
development (or portion of a development thereof) shall en-
sure that—
(1) each family that is a resident of the develop-
ment (or portion) that is demolished or disposed of is
relocated to other safe, clean, healthy, and affordable
housing, which is, to the maximum extent practicable,
housing of the family’s choice or is provided with
choice-based assistance under title III;
(2) the local housing and management authority
does not take any action to dispose of any unit until
any resident to be displaced is relocated in accordance
with paragraph (1); and
(3) each resident family to be displaced is paid
relocation expenses, and the rent to be paid initially
by the resident following relocation does not exceed the
amount permitted under section 225(a).
(g) RIGHT OF FIRST REFUSAL FOR RESIDENT ORGA-
NIZATIONS
AND
RESIDENT
MANAGEMENT
CORPORA-
TIONS.—
119
(1) IN GENERAL.—A local housing and manage-
ment authority may not dispose of a public housing
development (or portion of a development) unless the
authority has, before such disposition, offered to sell
the property, as provided in this subsection, to each
resident organization and resident management cor-
poration operating at the development for continued
use as low-income housing, and no such organization
or corporation purchases the property pursuant to
such offer. A resident organization may act, for pur-
poses of this subsection, through an entity formed to
facilitate homeownership under subtitle D.
(2) TIMING.—Disposition of a development (or
portion thereof) under this section may not take
place—
(A) before the expiration of the period dur-
ing which any such organization or corporation
may notify the authority of interest in purchas-
ing the property, which shall be the 30-day pe-
riod beginning on the date that the authority
first provides notice of the proposed disposition
of the property to such resident organizations
and resident management corporations;
(B) if an organization or corporation sub-
mits notice of interest in accordance with sub-
120
paragraph (A), before the expiration of the pe-
riod during which such organization or corpora-
tion may obtain a commitment for financing to
purchase the property, which shall be the 60-day
period beginning upon the submission to the au-
thority of the notice of interest; or
(C) if, during the period under subpara-
graph (B), an organization or corporation ob-
tains such financing commitment and makes a
bona fide offer to the authority to purchase the
property for a price equal to or exceeding the ap-
plicable offer price under paragraph (3).
The authority shall sell the property pursuant to any
purchase offer described in subparagraph (C).
(3) TERMS OF OFFER.—An offer by a local hous-
ing and management authority to sell a property in
accordance with this subsection shall involve a pur-
chase price that reflects the market value of the prop-
erty, the reason for the sale, the impact of the sale on
the surrounding community, and any other factors
that the authority considers appropriate.
(h) INFORMATION FOR LOCAL HOUSING MANAGEMENT
PLAN.—A local housing and management authority may
demolish or dispose of a public housing development (or
portion thereof) only if it includes in the applicable local
121
housing management plan information sufficient to de-
scribe—
(1) the housing to be demolished or disposed of;
(2) the purpose of the demolition or disposition
under subsection (c) and why the demolition or dis-
position complies with the requirements under sub-
section (c);
(3) how the consultations required under sub-
section (d) will be made;
(4) how the net proceeds of the disposition will
be used in accordance with subsection (e);
(5) how the authority will relocate residents, if
necessary, as required under subsection (f); and
(6) that the authority has offered the property
for acquisition by resident organizations and resident
management corporations in accordance with sub-
section (g).
(i) SITE AND NEIGHBORHOOD STANDARDS EXEMP-
TION.—Notwithstanding any other provision of law, a local
housing and management authority may provide for devel-
opment of public housing dwelling units on the same site
or in the same neighborhood as any dwelling units demol-
ished, pursuant to a plan under this section, but only if
such development provides for significantly fewer dwelling
units.
122
(j) TREATMENT OF REPLACEMENT UNITS.—In connec-
tion with any demolition or disposition of public housing
under this section, a local housing and management author-
ity may provide for other housing assistance for low-income
families that is consistent with the low-income housing
needs of the community, including—
(1) the provision of choice-based assistance under
title III; and
(2) the development, acquisition, or lease by the
authority of dwelling units, which dwelling units
shall—
(A) be eligible to receive assistance with
grant amounts provided under this title; and
(B) be made available for occupancy, oper-
ated, and managed in the manner required for
public housing, and subject to the other require-
ments applicable to public housing dwelling
units.
(k) PERMISSIBLE RELOCATION WITHOUT PLAN.—If a
local housing and management authority determines that
public housing dwelling units are not clean, safe, and
healthy or cannot be maintained cost-effectively in a clean,
safe, and healthy condition, the local housing and manage-
ment authority may relocate residents of such dwelling
123
units before the submission of a local housing management
plan providing for demolition or disposition of such units.
(l) CONSOLIDATION OF OCCUPANCY WITHIN OR AMONG
BUILDINGS.—Nothing in this section may be construed to
prevent a local housing and management authority from
consolidating occupancy within or among buildings of a
public housing development, or among developments, or
with other housing for the purpose of improving living con-
ditions of, or providing more efficient services to, residents.
(m) DE MINIMIS EXCEPTION TO DEMOLITION RE-
QUIREMENTS.—Notwithstanding any other provision of this
section, in any 5-year period a local housing and manage-
ment authority may demolish not more than the lesser of
5 dwelling units or 5 percent of the total dwelling units
owned and operated by the local housing and management
authority, without providing for such demolition in a local
housing management plan, but only if the space occupied
by the demolished unit is used for meeting the service or
other needs of public housing residents or the demolished
unit was beyond repair.
124
SEC. 262. DEMOLITION, SITE REVITALIZATION, REPLACE-
MENT HOUSING, AND CHOICE-BASED ASSIST-
ANCE GRANTS FOR DEVELOPMENTS.
(a) PURPOSES.—The purpose of this section is to pro-
vide assistance to local housing and management authori-
ties for the purposes of—
(1) reducing the density and improving the liv-
ing environment for public housing residents of se-
verely distressed public housing developments through
the demolition of obsolete public housing developments
(or portions thereof);
(2) revitalizing sites (including remaining public
housing dwelling units) on which such public housing
developments are located and contributing to the im-
provement of the surrounding neighborhood; and
(3) providing housing that will avoid or decrease
the concentration of very low-income families; and
(4) providing choice-based assistance in accord-
ance with title III for the purpose of providing re-
placement housing and assisting residents to be dis-
placed by the demolition.
(b) GRANT AUTHORITY.—The Secretary may make
grants available to local housing and management authori-
ties as provided in this section.
(c) CONTRIBUTION
REQUIREMENT.—The Secretary
may not make any grant under this section to any appli-
125
cant unless the applicant certifies to the Secretary that the
applicant will supplement the amount of assistance pro-
vided under this section with an amount of funds from
sources other than this section equal to not less than 5 per-
cent of the amount provided under this section, including
amounts from other Federal sources, any State or local gov-
ernment sources, any private contributions, and the value
of any in-kind services or administrative costs provided.
(d) ELIGIBLE ACTIVITIES.—Grants under this section
may be used for activities to carry out revitalization pro-
grams for severely distressed public housing, including—
(1) architectural and engineering work, includ-
ing the redesign, reconstruction, or redevelopment of
a severely distressed public housing development, in-
cluding the site on which the development is located;
(2) the demolition, sale, or lease of the site, in
whole or in part;
(3) covering the administrative costs of the ap-
plicant, which may not exceed such portion of the as-
sistance provided under this section as the Secretary
may prescribe;
(4) payment of reasonable legal fees;
(5) providing reasonable moving expenses for
residents displaced as a result of the revitalization of
the development;
126
(6) economic development activities that promote
the economic self-sufficiency of residents under the re-
vitalization program;
(7) necessary management improvements;
(8) leveraging other resources, including addi-
tional housing resources, retail supportive services,
jobs, and other economic development uses on or near
the development that will benefit future residents of
the site;
(9) replacement housing and housing assistance
under title III;
(10) transitional security activities; and
(11) necessary supportive services, except that
not more than 10 percent of the amount of any grant
may be used for activities under this paragraph.
(e) APPLICATION AND SELECTION.—
(1) APPLICATION.—An application for a grant
under this section shall contain such information and
shall be submitted at such time and in accordance
with such procedures, as the Secretary shall prescribe.
(2) SELECTION CRITERIA.—The Secretary shall
establish selection criteria for the award of grants
under this section, which shall include—
(A) the relationship of the grant to the local
housing management plan for the local housing
127
and management authority and how the grant
will result in a revitalized site that will enhance
the neighborhood in which the development is lo-
cated;
(B) the capability and record of the appli-
cant local housing and management authority,
or any alternative management agency for the
authority, for managing large-scale redevelop-
ment or modernization projects, meeting con-
struction timetables, and obligating amounts in
a timely manner;
(C) the extent to which the local housing
and management authority could undertake such
activities without a grant under this section;
(D) the extent of involvement of residents,
State and local governments, private service pro-
viders, financing entities, and developers, in the
development of a revitalization program for the
development;
(E) the amount of funds and other resources
to be leveraged by the grant; and
(F) whether the applicant local housing and
management authority has been awarded a plan-
ning grant under section 24(c) of the United
States Housing Act of 1937 (as in effect imme-
128
diately before the date of the enactment of this
Act).
(f) COST LIMITS.—Subject to the provisions of this sec-
tion, the Secretary—
(1) shall establish cost limits on eligible activities
under this section sufficient to provide for effective re-
vitalization programs; and
(2) may establish other cost limits on eligible ac-
tivities under this section.
(h) DEMOLITION AND REPLACEMENT.—Any severely
distressed public housing demolished or disposed of pursu-
ant to a revitalization plan and any public housing pro-
duced in lieu of such severely distressed housing, shall be
subject to the provisions of section 261.
(i) ADMINISTRATION BY OTHER ENTITIES.—The Sec-
retary may require a grantee under this section to make
arrangements satisfactory to the Secretary for use of an en-
tity other than the local housing and management authority
to carry out activities assisted under the revitalization
plan, if the Secretary determines that such action will help
to effectuate the purposes of this section.
(j) WITHDRAWAL OF FUNDING.—If a grantee under
this section does not proceed expeditiously, in the deter-
mination of the Secretary, the Secretary shall withdraw
any grant amounts under this section that have not been
129
obligated by the local housing and management authority.
The Secretary shall redistribute any withdrawn amounts
to one or more local housing and management authorities
eligible for assistance under this section.
(k) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) APPLICANT.—The term ‘‘applicant’’ means—
(A) any local housing and management au-
thority that is not designated as troubled pursu-
ant to section 431(a)(2)(D);
(B) any local housing and management au-
thority or private housing management agent se-
lected, or receiver appointed pursuant, to section
438; and
(C) any local housing and management au-
thority that is designated as troubled pursuant
to section 431(a)(2)(D) that—
(i) is so designated principally for rea-
sons that will not affect the capacity of the
authority to carry out a revitalization pro-
gram;
(ii) is making substantial progress to-
ward eliminating the deficiencies of the au-
thority; or
130
(iii) is otherwise determined by the
Secretary to be capable of carrying out a re-
vitalization program.
(2) PRIVATE
NONPROFIT
CORPORATION.—The
term ‘‘private nonprofit organization’’ means any
private nonprofit organization (including a State or
locally chartered nonprofit organization) that—
(A) is incorporated under State or local
law;
(B) has no part of its net earnings inuring
to the benefit of any member, founder, contribu-
tor, or individual;
(C) complies with standards of financial ac-
countability acceptable to the Secretary; and
(D) has among its purposes significant ac-
tivities related to the provision of decent housing
that is affordable to very low-income families.
(3) SEVERELY DISTRESSED PUBLIC HOUSING.—
The term ‘‘severely distressed public housing’’ means
a public housing development (or building in a devel-
opment)—
(A) that requires major redesign, recon-
struction or redevelopment, or partial or total
demolition, to correct serious deficiencies in the
original design (including inappropriately high
131
population density), deferred maintenance, phys-
ical deterioration or obsolescence of major sys-
tems and other deficiencies in the physical plant
of the development;
(B) is a significant contributing factor to
the physical decline of and disinvestment by
public and private entities in the surrounding
neighborhood;
(C)(i) is occupied predominantly by fami-
lies who are very low-income families with chil-
dren, are unemployed, and dependent on various
forms of public assistance; and
(ii) has high rates of vandalism and crimi-
nal activity (including drug-related criminal ac-
tivity) in comparison to other housing in the
area;
(D) cannot be revitalized through assistance
under other programs, such as the public housing
block grant program under this title, or the pro-
grams under sections 9 and 14 of the United
States Housing Act of 1937 (as in effect before
the date of the enactment of this Act), because of
cost constraints and inadequacy of available
amounts; and
132
(E) in the case of individual buildings, the
building is, in the Secretary’s determination,
sufficiently separable from the remainder of the
development of which the building is part to
make use of the building feasible for purposes of
this section.
(4) SUPPORTIVE SERVICES.—The term ‘‘support-
ive services’’ includes all activities that will promote
upward mobility, self-sufficiency, and improved qual-
ity of life for the residents of the public housing devel-
opment involved, including literacy training, job
training, day care, and economic development activi-
ties.
(l) ANNUAL REPORT.—The Secretary shall submit to
the Congress an annual report setting forth—
(1) the number, type, and cost of public housing
units revitalized pursuant to this section;
(2) the status of developments identified as se-
verely distressed public housing;
(3) the amount and type of financial assistance
provided under and in conjunction with this section;
and
(4) the recommendations of the Secretary for
statutory and regulatory improvements to the pro-
gram established by this section.
133
(m) FUNDING.—
(1) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated for grants
under this section such sums as may be necessary for
fiscal year 1996.
(2) TECHNICAL ASSISTANCE.—Of the amount ap-
propriated pursuant to paragraph (1) for any fiscal
year, the Secretary may use not more than 0.50 per-
cent for technical assistance. Such assistance may be
provided directly or indirectly by grants, contracts, or
cooperative agreements, and shall include training,
and the cost of necessary travel for participants in
such training, by or to officials of the Department of
Housing and Urban Development, of local housing
and management authorities, and of residents.
(n) SUNSET.—No assistance may be provided under
this section after September 30, 1996.
Subtitle F—General Provisions
SEC. 271. CONVERSION TO BLOCK GRANT ASSISTANCE.
(a) SAVINGS PROVISIONS.—Any amounts made avail-
able to a public housing agency for assistance for public
housing pursuant to the United States Housing Act of 1937
(or any other provision of law relating to assistance for
public housing) under an appropriation for fiscal year
1996 or any previous fiscal year shall be subject to the pro-
134
visions of such Act as in effect before the enactment of this
Act, notwithstanding the repeals made by this Act, except
to the extent the Secretary provides otherwise to provide for
the conversion of public housing and public housing assist-
ance to the system provided under this Act.
(b) MODIFICATIONS.—Notwithstanding any provision
of this Act or any annual contributions contract or other
agreement entered into by the Secretary and a public hous-
ing agency pursuant to the provisions of the United States
Housing Act of 1937 (as in effect before the enactment of
this Act), the Secretary and the agency may by mutual con-
sent amend, supersede, modify any such agreement as ap-
propriate to provide for assistance under this title, except
that the Secretary and the agency may not consent to any
such amendment, supersession, or modification that sub-
stantially alters any outstanding obligations requiring con-
tinued maintenance of the low-income character of any pub-
lic housing development and any such amendment,
supersession, or modification shall not be given effect.
SEC. 272. PAYMENT OF NON-FEDERAL SHARE.
Rental or use-value of buildings or facilities paid for,
in whole or in part, from production, modernization, or op-
eration costs financed under this title may be used as the
non-Federal share required in connection with activities
undertaken under Federal grant-in-aid programs which
135
provide social, educational, employment, and other services
to the residents in a project assisted under this title.
SEC. 273. DEFINITIONS.
For purposes of this title, the following definitions
shall apply:
(1) ACQUISITION COST.—The term ‘‘acquisition
cost’’ means the amount prudently expended by a
local housing and management authority in acquir-
ing property for a public housing development.
(2) DEVELOPMENT.—The terms ‘‘public housing
development’’ and ‘‘development’’ mean—
(A) public housing; and
(B) the improvement of any such housing.
(3) ELIGIBLE LOCAL HOUSING AND MANAGEMENT
AUTHORITY.—The term ‘‘eligible local housing and
management authority’’ means, with respect to a fis-
cal year, a local housing and management authority
that is eligible under section 202(b) for a grant under
this title.
(4) GROUP HOME AND INDEPENDENT LIVING FA-
CILITY.—The terms ‘‘group home’’ and ‘‘independent
living facility’’ have the meanings given such terms
in section 811(k) of the Cranston-Gonzalez National
Affordable Housing Act.
136
(5) OPERATION.—The term ‘‘operation’’ means
any or all undertakings appropriate for management,
operation, services, maintenance, security (including
the cost of security personnel), or financing in connec-
tion with a public housing development, including the
financing of resident programs and services.
(6) 
PRODUCTION.—The 
term 
‘‘production’’
means any or all undertakings necessary for plan-
ning, land acquisition, financing, demolition, con-
struction, or equipment, in connection with the con-
struction, acquisition, or rehabilitation of a property
for use as a public housing development, including
activity in connection with a public housing develop-
ment that is confined to the reconstruction, remodel-
ing, or repair of existing buildings.
(7) PRODUCTION COST.—The term ‘‘production
cost’’ means the costs incurred by a local housing and
management authority for production of public hous-
ing and the necessary financing for production (in-
cluding the payment of carrying charges and acquisi-
tion costs).
(8) RESIDENT
COUNCIL.—The term ‘‘resident
council’’ means an organization or association that
meets the requirements of section 234(a).
137
(9) RESIDENT
MANAGEMENT
CORPORATION.—
The term ‘‘resident management corporation’’ means
a corporation that meets the requirements of section
234(b).
(10) RESIDENT PROGRAM.—The term ‘‘resident
programs and services’’ means programs and services
for families residing in public housing developments.
Such term includes (A) the development and mainte-
nance of resident organizations which participate in
the management of public housing developments, (B)
the training of residents to manage and operate the
public housing development and the utilization of
their services in management and operation of the de-
velopment, (C) counseling on household management,
housekeeping, budgeting, money management, home-
ownership issues, child care, and similar matters, (D)
advice regarding resources for job training and place-
ment, education, welfare, health, and other commu-
nity services, (E) services that are directly related to
meeting resident needs and providing a wholesome
living environment; and (F) referral to appropriate
agencies in the community when necessary for the
provision of such services. To the maximum extent
available and appropriate, existing public and pri-
138
vate agencies in the community shall be used for the
provision of such services.
SEC. 
274. 
AUTHORIZATION 
OF 
APPROPRIATIONS 
FOR
BLOCK GRANTS.
There is authorized to be appropriated, for block grants
under this title, $6,300,000,000 for each of fiscal years
1996, 1997, 1998, 1999, and 2000.
SEC. 275. AUTHORIZATION OF APPROPRIATIONS FOR OPER-
ATION SAFE HOME.
There is authorized to be appropriated, for assistance
for relocating residents of public housing under the oper-
ation safe home program of the Department of Housing and
Urban Development (including assistance for costs of relo-
cation and housing assistance under title III), $700,000 for
each of fiscal years 1996, 1997, 1998, 1999, and 2000. The
Secretary shall provide that families who are residing in
public housing, who have been subject to domestic violence,
and for whom provision of assistance is likely to reduce or
eliminate the threat of subsequent violence to the members
of the family, shall be eligible for assistance under the oper-
ation safe home program.
139
TITLE III—CHOICE-BASED RENT-
AL 
HOUSING 
AND 
HOME-
OWNERSHIP ASSISTANCE FOR
LOW-INCOME FAMILIES
Subtitle A—Allocation
SEC. 301. AUTHORITY TO PROVIDE HOUSING ASSISTANCE
AMOUNTS.
To the extent that amounts to carry out this title are
made available, the Secretary may enter into contracts with
local housing and management authorities for each fiscal
year to provide housing assistance under this title.
SEC. 302. CONTRACTS WITH LHMA’S.
(a) CONDITION OF ASSISTANCE.—The Secretary may
provide amounts under this title to a local housing and
management authority for a fiscal year only if the Sec-
retary has entered into a contract under this section with
the local housing and management authority, under which
the Secretary shall provide such authority with amounts
(in the amount of the allocation for the authority deter-
mined pursuant to section 304) for housing assistance
under this title for low-income families.
(b) USE
FOR HOUSING ASSISTANCE.—A contract
under this section shall require a local housing and man-
agement authority to use amounts provided under this title
140
to provide housing assistance in any manner authorized
under this title.
(c) ANNUAL OBLIGATION OF AUTHORITY.—A contract
under this title shall provide amounts for housing assistance
for 1 fiscal year covered by the contract.
(d) ENFORCEMENT OF HOUSING QUALITY REQUIRE-
MENTS.—Each contract under this section shall require the
local housing and management authority administering as-
sistance provided under the contract—
(1) to ensure compliance, under each housing as-
sistance payments contract entered into pursuant to
the contract under this section, with the provisions of
the housing assistance payments contract included
pursuant to section 351(c)(4); and
(2) to establish procedures for assisted families to
notify the authority of any noncompliance with such
provisions.
SEC. 
303. 
ELIGIBILITY 
OF 
LHMA’S 
FOR 
ASSISTANCE
AMOUNTS.
The Secretary may provide amounts available for
housing assistance under this title to a local housing and
management authority only if—
(1) the authority has submitted a local housing
management plan to the Secretary for such fiscal year
and applied to the Secretary for such assistance;
141
(2) the plan has been determined to comply with
the requirements under section 107 and the Secretary
has not notified the authority that the plan fails to
comply with such requirements;
(3) the authority is accredited under section 433
by the Housing Foundation and Accreditation Board;
(5) no member of the board of directors or other
governing body of the authority, or the executive di-
rector, has been convicted of a felony; and
(6) the authority has not been disqualified for
assistance pursuant to subtitle B of title IV.
SEC. 304. ALLOCATION OF AMOUNTS.
(a) FORMULA ALLOCATION.—
(1) IN GENERAL.—When amounts for assistance
under this title are first made available for reserva-
tion, after reserving amounts in accordance with sub-
section (c) and section 109, the Secretary shall allo-
cate such amounts, only among local housing and
management authorities meeting the requirements
under this title to receive such assistance, on the basis
of a formula that is established in accordance with
paragraph (2) and based upon appropriate criteria to
reflect the needs of different States, areas, and com-
munities, using the most recent data available from
the Bureau of the Census of the Department of Com-
142
merce and the comprehensive housing affordability
strategy under section 105 of the Cranston-Gonzalez
National Affordable Housing Act (or any consolidated
plan incorporating such strategy) for the applicable
jurisdiction. The Secretary may establish a minimum
allocation amount, in which case only the local hous-
ing and management authorities that, pursuant to the
formula, are provided an amount equal to or greater
than the minimum allocation amount, shall receive
an allocation.
(2) REGULATIONS.—The formula under this sub-
section shall be established by regulation issued by the
Secretary. Notwithstanding sections 563(a) and
565(a) of title 5, United States Code, any proposed
regulation containing such formula shall be issued
pursuant to a negotiated rulemaking procedure under
subchapter of chapter 5 of such title and the Secretary
shall establish a negotiated rulemaking committee for
development of any such proposed regulations.
(b) ALLOCATION CONSIDERATIONS.—
(1) LIMITATION
ON
REALLOCATION
FOR
AN-
OTHER STATE.—Any amounts allocated for a State or
areas or communities within a State that are not
likely to be used within the fiscal year for which the
amounts are provided shall not be reallocated for use
143
in another State, unless the Secretary determines that
other areas or communities within the same State
(that are eligible for amounts under this title) cannot
use the amounts within the same fiscal year.
(2) EFFECT OF RECEIPT OF TENANT-BASED AS-
SISTANCE FOR DISABLED FAMILIES.—The Secretary
may not consider the receipt by a local housing and
management authority of assistance under section
811(b)(1) of the Cranston-Gonzalez National Afford-
able Housing Act, or the amount received, in approv-
ing amounts under this title for the authority or in
determining the amount of such assistance to be pro-
vided to the authority.
(3) EXEMPTION FROM FORMULA ALLOCATION.—
The formula allocation requirements of subsection (a)
shall not apply to any assistance under this title that
is approved in appropriation Acts for uses that the
Secretary determines are incapable of geographic allo-
cation, including amendments of existing housing as-
sistance payments contracts, renewal of such con-
tracts, assistance to families that would otherwise lose
assistance due to the decision of the project owner to
prepay the project mortgage or not to renew the hous-
ing assistance payments contract, assistance to pre-
vent displacement or to provide replacement housing
144
in connection with the demolition or disposition of
public and Indian housing, assistance for relocation
from public housing, assistance in connection with
protection of crime witnesses, assistance for conver-
sion from leased housing contracts under section 23 of
the United States Housing Act of 1937 (as in effect
before the enactment of the Housing and Community
Development Act of 1974), and assistance in support
of the property disposition and loan management
functions of the Secretary.
(c) SET-ASIDE FOR INDIAN HOUSING ASSISTANCE.—
The Secretary shall allocate, in a manner determined by
the Secretary, a portion of the amounts made available in
each fiscal year for assistance under this title for assistance
for Indian housing authorities.
(d) RECAPTURE OF AMOUNTS.—
(1) AUTHORITY.—In each fiscal year, from any
budget authority made available for assistance under
this title or section 8 of the United States Housing
Act of 1937 (as in effect before the enactment of this
Act) that is obligated to a local housing and manage-
ment authority but remains unobligated by the au-
thority upon the expiration of the 8-month period be-
ginning upon the initial availability of such amounts
for obligation by the authority, the Secretary may
145
deobligate an amount, as determined by the Sec-
retary, not exceeding 50 percent of such unobligated
amount.
(2) USE.—The Secretary may reallocate and
transfer any amounts deobligated under paragraph
(1) only to local housing and management authorities
in areas that the Secretary determines have received
less funding than other areas, based on the relative
needs of all areas.
SEC. 305. ADMINISTRATIVE FEES.
(a) FEE FOR ONGOING COSTS OF ADMINISTRATION.—
(1) IN GENERAL.—The Secretary shall establish
fees for the costs of administering the choice-based
housing assistance program under this title.
(2) FISCAL YEAR 1996.—
(A) CALCULATION.—For fiscal year 1996,
the fee for each month for which a dwelling unit
is covered by a contract for assistance under this
title shall be—
(i) in the case of a local housing and
management authority that, on an annual
basis, is administering a program for not
more than 600 dwelling units, 6.5 percent
of the base amount; and
146
(ii) in the case of an authority that, on
an annual basis, is administering a pro-
gram for more than 600 dwelling units—
(I) for the first 600 units, 6.5 per-
cent of the base amount; and
(II) for any additional dwelling
units under the program, 6.0 percent
of the base amount.
(B) BASE AMOUNT.—For purposes of this
paragraph, the base amount shall be the higher
of—
(i) the fair market rental established
under section 8(c) of the United States
Housing Act of 1937 (as in effect imme-
diately before the date of the enactment of
this Act) for fiscal year 1993 for a 2-bed-
room existing rental dwelling unit in the
market area of the authority, and
(ii) the amount that is the lesser of (I)
such fair market rental for fiscal year 1994
or (II) 103.5 percent of the amount deter-
mined under clause (i),
adjusted based on changes in wage data or other
objectively measurable data that reflect the costs
of administering the program, as determined by
147
the Secretary. The Secretary may require that
the base amount be not less than a minimum
amount and not more than a maximum amount.
(3) SUBSEQUENT
FISCAL
YEARS.—For subse-
quent fiscal years, the Secretary shall publish a notice
in the Federal Register, for each geographic area, es-
tablishing the amount of the fee that would apply for
local housing and management authorities admin-
istering the program, based on changes in wage data
or other objectively measurable data that reflect the
costs of administering the program, as determined by
the Secretary.
(4) INCREASE.—The Secretary may increase the
fee if necessary to reflect the higher costs of admin-
istering small programs and programs operating over
large geographic areas.
(b) FEE
FOR PRELIMINARY EXPENSES.—The Sec-
retary shall also establish reasonable fees (as determined by
the Secretary) for—
(1) the costs of preliminary expenses, in the
amount of $500, for a local housing and management
authority, but only in the first year that the author-
ity administers a choice-based housing assistance pro-
gram under this title, and only if, immediately before
the date of the enactment of this Act, the authority
148
was not administering a tenant-based rental assist-
ance program under the United States Housing Act
of 1937 (as in effect immediately before such date of
enactment), in connection with its initial increment
of assistance received;
(2) the costs incurred in assisting families who
experience difficulty (as determined by the Secretary)
in obtaining appropriate housing under the pro-
grams; and
(3) extraordinary costs approved by the Sec-
retary.
(c) TRANSFER OF FEES IN CASES OF CONCURRENT
GEOGRAPHICAL JURISDICTION.—
(1) IN GENERAL.—In each fiscal year, if any
local housing and management authority provides
tenant-based rental assistance under section 8 of the
United States Housing Act of 1937 or housing assist-
ance under this title on behalf of a family who uses
such assistance for a dwelling unit that is located
within the jurisdiction of such authority but is also
within the jurisdiction of another local housing and
management authority, the Secretary shall require the
authority issuing such assistance to transfer the
amount provided under paragraph (2) to the closest
eligible authority that is approved to administer the
149
program and is not designated as a troubled author-
ity under section 431(a)(2)(D).
(2) ADMINISTRATIVE
FEE.—The amount pro-
vided under this paragraph is, with respect to each
such family described in subsection (a)—
(A) in the case of assistance under section
8 of the United States Housing Act of 1937, the
amount received under section 8(q) of such Act
that is attributable to the administrative fee
under such section for such family for the por-
tion of the fiscal year during which such family
resides in the dwelling unit described in para-
graph (1); and
(B) in the case of housing assistance under
this title, an amount of the grant amounts re-
ceived under this title that is equal to the admin-
istrative fee for a family established under sec-
tion 305 for such fiscal year, as adjusted based
on the portion of the fiscal year during which
such family resides in the dwelling unit de-
scribed in paragraph (1).
SEC. 306. AUTHORIZATIONS OF APPROPRIATIONS.
(a) IN GENERAL.—There is authorized to be appro-
priated for providing local housing and management au-
thorities with housing assistance under this title,
150
$1,861,668,000 for each of fiscal years 1996, 1997, 1998,
1999, and 2000.
(b) ASSISTANCE FOR DISABLED FAMILIES.—
(1) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated, for choice-
based housing assistance under this title to be used in
accordance with paragraph (2), $50,000,000 for fiscal
year 1997, and such sums as may be necessary for
each subsequent fiscal year.
(2) USE.—The Secretary shall provide amounts
made available under paragraph (1) to local housing
and management authorities only for use to provide
housing assistance under this title for nonelderly dis-
abled families (including such families relocating
pursuant to designation of a public housing develop-
ment under section 227 and other nonelderly disabled
families who have applied to the authority for hous-
ing assistance under this title).
(3) ALLOCATION OF AMOUNTS.—The Secretary
shall allocate and provide amounts made available
under paragraph (1) to local housing and manage-
ment authorities as the Secretary determines appro-
priate based on the relative levels of need among the
authorities for assistance for families described in
paragraph (1).
151
SEC. 307. CONVERSION OF SECTION 8 ASSISTANCE.
(a) IN GENERAL.—Any amounts made available to a
local housing and management authority under a contract
for annual contributions for assistance under section 8 of
the United States Housing Act of 1937 (as in effect before
the enactment of this Act) that have not been obligated for
such assistance by such authority before such enactment
shall be used to provide assistance under this title, except
to the extent the Secretary determines such use is inconsist-
ent with existing commitments.
(b) EXCEPTION.—Subsection (a) shall not apply to
any amounts made available under a contract for housing
constructed or substantially rehabilitated pursuant to sec-
tion 8(b)(2) of the United States Housing Act of 1937, as
in effect before October 1, 1983.
Subtitle B—Choice-Based Housing
Assistance for Eligible Families
SEC. 321. ELIGIBLE FAMILIES AND PREFERENCES FOR AS-
SISTANCE.
(a) LOW-INCOME REQUIREMENT.—Housing assistance
under this title may be provided only on behalf of a family
that—
(1) at the time that such assistance is initially
provided on behalf of the family, is determined by the
local housing and management authority to be a low-
income family; or
152
(2) qualifies to receive such assistance under any
other provision of Federal law.
(b) REVIEWS OF FAMILY INCOMES.—
(1) IN GENERAL.—Reviews of family incomes for
purposes of this title shall be subject to the provisions
of section 904 of the Stewart B. McKinney Homeless
Assistance Amendments Act of 1988 and shall be con-
ducted upon the initial provision of housing assist-
ance for the family and thereafter not less than annu-
ally.
(2) PROCEDURES.—Each local housing and
management authority administering housing assist-
ance under this title shall establish procedures that
are appropriate and necessary to ensure that income
data provided to the authority and owners by families
applying for or receiving housing assistance from the
authority is complete and accurate.
(c) PREFERENCES FOR ASSISTANCE.—
(1) AUTHORITY TO ESTABLISH.—Any local hous-
ing and management authority that receives amounts
under this title may establish a system for making
housing assistance available on behalf of eligible fami-
lies that provides preference for such assistance to eli-
gible families having certain characteristics.
153
(2) CONTENT.—Each system of preferences estab-
lished pursuant to this subsection shall be based upon
local housing needs and priorities, as determined by
the local housing and management authority using
generally accepted data sources, including any infor-
mation obtained pursuant to an opportunity for pub-
lic comment as provided under section 107(e) or
under the requirements applicable to comprehensive
housing affordability strategy for the relevant juris-
diction.
(d) TREATMENT OF ASSISTED FAMILIES WHO MOVE
OUT OF JURISDICTION OF LHMA.—
(1) IN GENERAL.—A local housing and manage-
ment authority may, in the discretion of the agency
and notwithstanding any preferences under subsection
(c), provide housing assistance for eligible families (or
a certain number of such families) who have moved
into the jurisdiction of the authority and on whose be-
half such assistance was being provided, at the time
of such move, by the authority for the jurisdiction
from which the family moved.
(2) ASSISTANCE
UNDER
1937
ACT.—Notwith-
standing any provision of this title, a local housing
and management authority who, upon the date of the
enactment of this Act, is providing assistance under
154
section 8 of the United States Housing Act of 1937
for a family pursuant to subsection (r) of such section
shall continue to provide such assistance (or housing
assistance under this title) in accordance with such
section until the local housing and management au-
thority for the jurisdiction to which the family moved
provides housing assistance on behalf of the family
pursuant to paragraph (1) of this subsection or other-
wise or the authority terminates such assistance for
other reasons.
(e) TREATMENT OF FAMILIES ON WAITING LIST WHO
MOVE OUT OF JURISDICTION OF LHMA.—
(1) MOVE TO JURISDICTION WITH OPEN WAITING
LIST.—Except as provided in paragraph (2), if an el-
igible family (A) applies for choice-based housing as-
sistance while residing within the jurisdiction of a
local housing and management authority, (B) moves
outside of the jurisdiction of the authority before such
assistance is provided on behalf of the family, and (C)
applies for housing assistance from the local housing
and management authority for the jurisdiction to
which the family moves, such authority shall consider
the application to have been made upon the date that
the family applied for assistance with the authority
in whose jurisdiction the family previously resided.
155
(2) MOVE TO JURISDICTION WITH CLOSED WAIT-
ING LIST.—If the local housing and management au-
thority for the jurisdiction to which an eligible family
described in paragraph (1) moves is not generally ac-
cepting applications for housing assistance, such ju-
risdiction shall accept the application of such family
but shall treat the application as having been made
on the date on which it is actually made. Notwith-
standing the preceding sentence, a local housing and
management authority may (at the discretion of the
authority) provide that any application by an eligible
family whose move to the jurisdiction not accepting
applications for assistance was made because of a ver-
ifiable employment opportunity shall be subject to the
provisions of paragraph (1).
(f) AUTHORITY TO DENY ASSISTANCE TO CERTAIN
FAMILIES WHO MOVE.—A local housing and management
authority may establish criteria for denying housing assist-
ance, and pursuant to such criteria may deny such assist-
ance, to an eligible family who has moved from the jurisdic-
tion of another authority, who received housing assistance
from the authority for such other jurisdiction, and whose
assistance was terminated by such other authority for rea-
sons other than income ineligibility or the change of resi-
dence.
156
(g) LOSS
OF ASSISTANCE UPON TERMINATION
OF
TENANCY.—A local housing and management authority
may, to the extent such policies are described in the local
housing management plan of the authority and included
in the lease for a dwelling unit, establish policies providing
that an assisted family whose tenancy is terminated for se-
rious violations of the terms or conditions of the lease
shall—
(1) lose any right to continued housing assist-
ance; and
(2) immediately become ineligible for housing as-
sistance under this title for a period not exceeding 3
years from the date of the termination of the housing
assistance.
(h) CONFIDENTIALITY FOR VICTIMS OF DOMESTIC VIO-
LENCE.—A local housing and management authority shall
be subject to the restrictions regarding release of informa-
tion relating to the identity and new residence of any fam-
ily receiving housing assistance who was a victim of domes-
tic violence that are applicable to shelters pursuant to the
Family Violence Prevention and Services Act. The author-
ity shall work with the United States Postal Service to es-
tablish procedures consistent with the confidentiality provi-
sions in the Violence Against Women Act of 1994.
157
SEC. 322. RESIDENT CONTRIBUTION.
(a) IN GENERAL.—An assisted family shall contribute
on a monthly basis for the rental of an assisted dwelling
unit an amount that the local housing and management
authority determines is appropriate with respect to the fam-
ily. The amount of the minimum monthly rental contribu-
tion—
(1) shall be based upon factors including the ad-
justed income of the family and any other factors that
the authority considers appropriate;
(2) shall be not less than $25;
(3) shall include any portion of the cost of utili-
ties for the dwelling unit for which the resident is re-
sponsible; and
(4) may be increased annually by the authority,
except that no such annual increase may exceed 10
percent of the amount of the minimum monthly con-
tribution in effect for the preceding year.
In any case in which the monthly rent charged for a dwell-
ing unit pursuant to the housing assistance payments con-
tract exceeds the payment standard (established under sec-
tion 353) for the dwelling unit, the assisted family residing
in the unit shall contribute (in addition to the amount of
the monthly rent contribution otherwise determined under
this subsection for such family) such entire excess rental
amount.
158
(b) RENTAL CONTRIBUTION FOR ELDERLY AND DIS-
ABLED FAMILIES.—In establishing the amount of monthly
rental contributions under this section for disabled families
and elderly families residing in assisted dwelling units, a
local housing and management authority shall waive the
applicability of any provision of subsection (a) that may
be necessary to establish such contributions that are reason-
able based on the adjusted incomes of such families.
(c) TREATMENT OF CHANGES IN RENTAL CONTRIBU-
TION.—
(1) NOTIFICATION OF CHANGES.—A local hous-
ing and management authority shall promptly notify
the owner of an assisted dwelling unit of any change
in the resident contribution by the assisted family re-
siding in the unit that takes effect immediately or at
a later date.
(2) COLLECTION OF RETROACTIVE CHANGES.—In
the case of any change in the rental contribution of
an assisted family that affects rental payments pre-
viously made, the local housing and management au-
thority shall collect any additional amounts required
to be paid by the family under such change directly
from the family and shall refund any excess rental
contribution paid by the family directly to the fam-
ily.
159
(d) PHASE-IN OF RENT CONTRIBUTION INCREASES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), for any family that is receiving tenant-
based rental assistance under section 8 of the United
States Housing Act of 1937 upon the initial applica-
bility of the provisions of this title to such family, if
the monthly contribution for rental of an assisted
dwelling unit to be paid by the family upon such ini-
tial applicability is greater than the amount paid by
the family under the provisions of the United States
Housing Act of 1937 immediately before such applica-
bility, any such resulting increase in rent contribu-
tion shall be—
(A) phased in equally over a period of not
less than 3 years, if such increase is 30 percent
or more of such contribution before initial appli-
cability; and
(B) limited to not more than 10 percent per
year if such increase is more than 10 percent but
less than 30 percent of such contribution before
initial applicability.
(2) EXCEPTION.—The minimum rent contribu-
tion requirement under subsection (a)(2) shall apply
to each family described in paragraph (1) of this sub-
section, notwithstanding such paragraph.
160
SEC. 323. RENTAL INDICATORS.
(a) IN GENERAL.—The Secretary shall establish and
issue rental indicators under this section periodically, but
not less than annually, for existing rental dwelling units
that are eligible dwelling units. The Secretary shall estab-
lish and issue the rental indicators by housing market area
(as the Secretary shall establish) for various sizes and types
of dwelling units.
(b) AMOUNT.—For a market area, the rental indicator
established under subsection (a) for a dwelling unit of a
particular size and type in the market area shall be a dollar
amount that reflects the rental amount for a standard qual-
ity rental unit of such size and type in the market area
that is an eligible dwelling unit.
(c) EFFECTIVE DATE.—The Secretary shall cause the
proposed rental indicators established under subsection (a)
for each market area to be published in the Federal Register
with reasonable time for public comment, and such rental
indicators shall become effective upon the date of publica-
tion in final form in the Federal Register.
(d) ANNUAL ADJUSTMENT.—Each rental indicator in
effect under this section shall be adjusted to be effective on
October 1 of each year to reflect changes, based on the most
recent available data trended so that the indicators will be
current for the year to which they apply, in rents for exist-
ing rental dwelling units of various sizes and types in the
161
market area suitable for occupancy by families assisted
under this title.
SEC. 324. LEASE TERMS.
Rental assistance may be provided for an eligible
dwelling unit only if the assisted family and the owner of
the dwelling unit enter into a lease for the unit that—
(1) provides for a single lease term of 12 months
and continued tenancy after such term under a peri-
odic tenancy on a month-to-month basis;
(2) contains terms and conditions specifying
that termination of tenancy during the term of a
lease shall be subject to the provisions set forth in sec-
tion 325; and
(3) is set forth in the standard form, which is
used in the local housing market area by the owner
and applies generally to any other tenants in the
property who are not assisted families, together with
any addendum necessary to include the many terms
required under this section.
A lease may include any addenda appropriate to set forth
the provisions under section 325.
SEC. 325. TERMINATION OF TENANCY.
(a) GENERAL GROUNDS FOR TERMINATION OF TEN-
ANCY.—Each housing assistance payments contract under
section 351 shall provide that the owner of any assisted
162
dwelling unit assisted under the contract may, before expi-
ration of a lease for a unit, terminate the tenancy of any
tenant of the unit, but only for—
(1) violation of the terms and conditions of the
lease, violation of applicable Federal, State, or local
law, or other good cause; or
(2) any activity, engaged in by the tenant, any
member of the tenant’s household, or any guest or
other person under the tenant’s control, that—
(A) threatens the health or safety of, or
right to peaceful enjoyment of the premises by,
other tenants or employees of the owner or man-
ager of the housing;
(B) threatens the health or safety of, or
right to peaceful enjoyment of their residences
by, persons residing in the immediate vicinity of
the premises; or
(C) is criminal activity (including drug-re-
lated criminal activity).
(b) MANNER OF TERMINATION.—Each housing assist-
ance payments contract shall provide that the owner shall
conduct the termination of tenancy of any tenant of an as-
sisted dwelling unit under the contract in accordance with
applicable State or local laws, including providing any no-
tice of termination required under such laws.
163
SEC. 326. ELIGIBLE OWNERS.
(a) OWNERSHIP ENTITY.—Rental assistance under
this title may be provided for any eligible dwelling unit
for which the owner is any public agency, private person
or entity (including a cooperative), nonprofit organization,
agency of the Federal Government, or local housing and
management authority.
(b) INELIGIBLE OWNERS.—
(1) IN
GENERAL.—Notwithstanding subsection
(a), a local housing and management authority may
not enter into a housing assistance payments contract
(or renew an existing contract) covering a dwelling
unit that is owned by an owner who is debarred, sus-
pended, or subject to limited denial of participation
under part 24 of title 24, Code of Federal Regula-
tions.
(2) PROHIBITION
OF
SALE
TO
RELATED
PAR-
TIES.—The Secretary shall establish guidelines to pre-
vent housing assistance payments for a dwelling unit
that is owned by any spouse, child, or other party
who allows an owner described in paragraph (1) to
maintain control of the unit.
(3) RULE OF CONSTRUCTION.—This subsection
may not be construed to prohibit, or authorize the ter-
mination or suspension, of payment of housing assist-
ance under a housing assistance payments contract in
164
effect at the time such debarment, suspension, or lim-
ited denial of participation takes effect.
SEC. 327. SELECTION OF DWELLING UNITS.
(a) FAMILY CHOICE.—The determination of the dwell-
ing unit in which an assisted family resides and for which
housing assistance is provided under this title shall be made
solely by the assisted family, subject to the provisions of
this title.
(b) DEED RESTRICTIONS.—Housing assistance may
not be used in any manner that abrogates any local deed
restriction that applies to any housing consisting of 1 to
4 dwelling units. Nothing in this section may be construed
to affect the provisions or applicability of the Fair Housing
Act.
SEC. 328. ELIGIBLE DWELLING UNITS.
(a) IN GENERAL.—A dwelling unit shall be an eligible
dwelling unit for purposes of this title only if the local hous-
ing and management authority to provide housing assist-
ance for the dwelling unit determines that the dwelling
unit—
(1) is an existing dwelling unit that is not lo-
cated within a nursing home or the grounds of any
penal, reformatory, medical, mental, or similar public
or private institution; and
(2) complies—
165
(A) with applicable State or local laws, reg-
ulations, standards, or codes regarding habit-
ability of residential dwellings that—
(i) are in effect for the jurisdiction in
which the dwelling unit is located;
(ii) provide protection to residents of
the dwellings that is equal to or greater
than the protection provided under the
housing quality standards established under
subsection (b); and
(iii) that do not severely restrict hous-
ing choice; or
(B) in the case of a dwelling unit located in
a jurisdiction which does not have in effect laws,
regulations, standards, or codes described in sub-
paragraph (A), with the housing quality stand-
ards established under subsection (b).
Each local housing and management authority providing
housing assistance shall identify, in the local housing man-
agement plan for the authority, whether the authority is
utilizing the standard under subparagraph (A) or (B) of
paragraph (2) and, if the authority utilizes the standard
under subparagraph (A), shall certify in such plan that the
applicable State or local laws, regulations, standards, or
166
codes comply with the requirements under such subpara-
graph.
(b) DETERMINATIONS.—
(1) IN GENERAL.—A local housing and manage-
ment authority shall make the determinations re-
quired under subsection (a) pursuant to an inspection
of the dwelling unit conducted before any assistance
payment is made for the unit.
(2) FAILURE
TO
INSPECT.—Notwithstanding
subsection (a), if the inspection and the determina-
tions referred to in paragraph (1) are not made before
the expiration of the 7-day period beginning upon a
request by the resident or landlord to the local hous-
ing and management authority—
(A) the dwelling unit shall be considered to
be an eligible dwelling unit for purposes of this
title; and
(B) the assisted family may occupy the
dwelling unit, and assistance payments for the
unit may be made before necessary repairs are
completed, it the owner agrees to make such re-
pairs within 15 days.
(c) FEDERAL HOUSING QUALITY STANDARDS.—The
Secretary shall establish housing quality standards under
this subsection that ensure that assisted dwelling units are
167
safe, clean, and healthy. Such standards shall include re-
quirements relating to habitability, including maintenance,
health and sanitation factors, condition, and construction
of dwellings, and shall, to the greatest extent practicable,
be consistent with the standards established under section
232(b). The Secretary shall differentiate between major and
minor violations of such standards.
(d) ANNUAL INSPECTIONS.—Each local housing and
management authority providing housing assistance shall
make an annual inspection of each assisted dwelling unit
during the term of the housing assistance payments con-
tracts for the unit to determine whether the unit is main-
tained in accordance with the requirements under sub-
section (a)(2). The authority shall submit the results of such
inspections to the Secretary and the Inspector General for
the Department of Housing and Urban Development and
such results shall be available to the Housing Foundation
and Accreditation Board established under title IV and any
auditor conducting an audit under section 432.
(e) INSPECTION GUIDELINES.—The Secretary shall es-
tablish procedural guidelines and performance standards to
facilitate inspections of dwelling units and conform such
inspections with practices utilized in the private housing
market. Such guidelines and standards shall take into con-
sideration variations in local laws and practices of local
168
housing and management authorities and shall provide
flexibility to authorities appropriate to facilitate efficient
provision of assistance under this title.
(f) RULE OF CONSTRUCTION.—This section may not
be construed to prevent the provision of housing assistance
in connection with supportive services for elderly or dis-
abled families.
SEC. 329. HOMEOWNERSHIP OPTION.
(a) IN GENERAL.—A local housing and management
authority providing housing assistance under this title may
provide homeownership assistance to assist eligible families
to purchase a dwelling unit (including purchase under
lease-purchase homeownership plans).
(b) REQUIREMENTS.—A local housing and manage-
ment authority providing homeownership assistance under
this section shall, as a condition of an eligible family receiv-
ing such assistance, require the family to—
(1) demonstrate that the family has income from
employment or other sources (other than public assist-
ance), as determined in accordance with requirements
established by the authority; and
(2) meet any other initial or continuing require-
ments established by the local housing and manage-
ment authority.
(c) DOWNPAYMENT REQUIREMENT.—
169
(1) IN GENERAL.—A local housing and manage-
ment authority may establish minimum downpay-
ment requirements, if appropriate, in connection with
loans made for the purchase of dwelling units for
which homeownership assistance is provided under
this section. If the authority establishes a minimum
downpayment requirement, except as provided in
paragraph (2) the authority shall permit the family
to use grant amounts, gifts from relatives, contribu-
tions from private sources, and similar amounts as
downpayment amounts in such purchase.
(2) DIRECT
FAMILY
CONTRIBUTION.—In pur-
chasing housing pursuant to this section subject to a
downpayment requirement, each family shall contrib-
ute an amount of the downpayment, from resources of
the family other than grants, gifts, contributions, or
other similar amounts referred to in paragraph (1),
that is not less than 1 percent of the purchase price.
(d) INELIGIBILITY UNDER OTHER PROGRAMS.—A
family may not receive homeownership assistance pursuant
to this section during any period when assistance is being
provided for the family under other Federal homeownership
assistance programs, as determined by the Secretary, in-
cluding assistance under the HOME Investment Partner-
ships Act, the Homeownership and Opportunity Through
170
HOPE Act, title II of the Housing and Community Devel-
opment Act of 1987, and section 502 of the Housing Act
of 1949.
Subtitle C—Payment of Housing As-
sistance on Behalf of Assisted
Families
SEC. 351. HOUSING ASSISTANCE PAYMENTS CONTRACTS.
(a) IN GENERAL.—Each local housing and manage-
ment authority that receives amounts under a contract
under section 302 may enter into housing assistance pay-
ments contracts with owners of existing dwelling units to
make housing assistance payments to such owners in ac-
cordance with this title.
(b) LHMA ACTING AS OWNER.—A local housing and
management authority may enter into a housing assistance
payments contract to make housing assistance payments
under this title to itself (or any agency or instrumentality
thereof) as the owner of dwelling units, and the authority
shall be subject to the same requirements that are applicable
to other owners, except that the determinations under sec-
tion 328(a) and 354(b) shall be made by a competent party
not affiliated with the authority or the owner, and the au-
thority shall be responsible for any expenses of such deter-
minations.
171
(c) PROVISIONS.—Each housing assistance payments
contract shall—
(1) have a term of not more than 12 months;
(2) require that the assisted dwelling unit may
be rented only pursuant to a lease that complies with
the requirements of section 324;
(3) comply with the requirements of section 325
(relating to termination of tenancy);
(4) require the owner to maintain the dwelling
unit in accordance with the applicable standards
under section 328(a)(2); and
(5) provide that the screening and selection of el-
igible families for assisted dwelling units shall be the
function of the owner.
SEC. 352. AMOUNT OF MONTHLY ASSISTANCE PAYMENT.
The amount of the monthly assistance payment for
housing assistance under this title on behalf of an assisted
family shall be as follows:
(1) UNITS HAVING GROSS RENT LESS THAN PAY-
MENT
STANDARD.—In the case of a dwelling unit
bearing a gross rent that does not exceed the payment
standard established under section 353 for a dwelling
unit of the applicable size and located in the market
area in which such assisted dwelling unit is located,
the amount by which the gross rent for the dwelling
172
unit exceeds the amount of the resident contribution
determined in accordance with section 322.
(2) UNITS HAVING GROSS RENT EXCEEDING PAY-
MENT
STANDARD.—In the case of a dwelling unit
bearing a gross rent that exceeds the payment stand-
ard established under section 353 for a dwelling unit
of the applicable size and located in the market area
in which such assisted dwelling unit is located, the
amount by which such payment standard exceeds the
amount of the resident contribution determined in ac-
cordance with section 322.
SEC. 353. PAYMENT STANDARDS.
(a) ESTABLISHMENT.—Each local housing and man-
agement authority providing housing assistance under this
title shall establish payment standards under this section
for various areas, and sizes and types of dwelling units,
for use in determining the amount of monthly housing as-
sistance payment to be provided on behalf of assisted fami-
lies.
(b) USE
OF RENTAL INDICATORS.—The payment
standard for each size and type of housing for each market
area shall be an amount that is not less than 80 percent,
and not greater than 120 percent, of the rental indicator
established under section 323 for such size and type for such
area.
173
(c) REVIEW.—If the Secretary determines, at any
time, that a significant percentage of the assisted families
who are assisted by a large local housing and management
authority and are occupying dwelling units of a particular
size are paying more than 30 percent of their adjusted in-
comes for rent, the Secretary shall review the payment
standard established by the authority for such size dwell-
ings. If, pursuant to the review, the Secretary determines
that such payment standard is not appropriate to serve the
needs of the low-income population of the jurisdiction served
by the authority (taking into consideration rental costs in
the area), as identified in the approved community im-
provement plan of the authority, the Secretary may require
the local housing and management authority to modify the
payment standard. For purposes of this subsection, the term
‘‘large local housing and management authority’’ means a
local housing and management authority that provides
housing assistance on behalf of 1250 or more assisted fami-
lies.
SEC. 354. REASONABLE RENTS.
(a) ESTABLISHMENT.—The rent charged for a dwelling
unit for which rental assistance is provided under this title
shall be established pursuant to negotiation and agreement
between the assisted family and the owner of the dwelling
unit.
174
(b) REASONABLENESS.—
(1) DETERMINATION.—A local housing and man-
agement authority providing rental assistance under
this title for a dwelling unit shall, before commencing
assistance payments for a unit, determine whether the
rent charged for the unit exceeds the rents charged for
comparable units in the applicable private unassisted
market.
(2) UNREASONABLE RENTS.—If the authority de-
termines that the rent charged for a dwelling unit ex-
ceeds such comparable rents, the authority shall—
(A) inform the assisted family renting the
unit that such rent exceeds the rents for com-
parable unassisted units in the market; and
(B) refuse to provide housing assistance
payments for such unit.
SEC. 355. PROHIBITION OF ASSISTANCE FOR VACANT RENT-
AL UNITS.
If an assisted family vacates a dwelling unit for which
rental assistance is provided under a housing assistance
payments contract before the expiration of the term of the
lease for the unit, rental assistance pursuant to such con-
tract may not be provided for the unit after the month dur-
ing which the unit was vacated.
175
Subtitle D—General and
Miscellaneous Provisions
SEC. 371. DEFINITIONS.
For purposes of this title:
(1) ASSISTED DWELLING UNIT.—The term ‘‘as-
sisted dwelling unit’’ means a dwelling unit in which
an assisted family resides and for which housing as-
sistance payments are made under this title.
(2) ASSISTED FAMILY.—The term ‘‘assisted fam-
ily’’ means an eligible family on whose behalf housing
assistance payments are made under this title or who
has been selected and approved for housing assistance.
(3) CHOICE-BASED.—The term ‘‘choice-based’’
means, with respect to housing assistance, that the as-
sistance is not attached to a dwelling unit but can be
used for any eligible dwelling unit selected by the eli-
gible family.
(4) ELIGIBLE DWELLING UNIT.—The term ‘‘eligi-
ble dwelling unit’’ means a dwelling unit that com-
plies with the requirements under section 328 for con-
sideration as an eligible dwelling unit.
(5) ELIGIBLE FAMILY.—The term ‘‘eligible fam-
ily’’ means a family that meets the requirements
under section 321(a) for assistance under this title.
176
(6) HOMEOWNERSHIP
ASSISTANCE.—The term
‘‘homeownership assistance’’ means housing assistance
provided under section 329 for the ownership of a
dwelling unit.
(7) HOUSING ASSISTANCE.—The term ‘‘housing
assistance’’ means assistance provided under this title
on behalf of low-income families for the rental or
ownership of an eligible dwelling unit.
(8) 
HOUSING
ASSISTANCE
PAYMENTS
CON-
TRACT.—The term ‘‘housing assistance payments con-
tract’’ means a contract under section 351 between a
local housing and management authority (or the Sec-
retary) and an owner to make housing assistance
payments under this title to the owner on behalf of an
assisted family.
(9) LOCAL HOUSING AND MANAGEMENT AUTHOR-
ITY.—The terms ‘‘local housing and management au-
thority’’ and ‘‘authority’’ have the meaning given
such terms in section 103, except that the terms in-
clude—
(A) a consortia of local housing and man-
agement authorities that the Secretary deter-
mines has the capacity and capability to admin-
ister a program for housing assistance under this
title in an efficient manner;
177
(B) any other entity that, upon the date of
the enactment of this Act, was administering
any program for tenant-based rental assistance
under section 8 of the United States Housing Act
of 1937 (as in effect before the enactment of this
Act), pursuant to a contract with the Secretary
or a public housing agency; and
(C) with respect to any area in which no
local housing and management authority has
been organized or where the Secretary determines
that a local housing and management authority
is unwilling or unable to implement this title, or
is not performing effectively—
(i) the Secretary or another entity that
by contract agrees to receive assistance
amounts under this title and enter into
housing assistance payments contracts with
owners and perform the other functions of
local housing and management authority
under this title; or
(ii) notwithstanding any provision of
State or local law, a local housing and
management authority for another area
that contracts with the Secretary to admin-
ister a program for housing assistance
178
under this title, without regard to any oth-
erwise applicable limitations on its area of
operation.
(10) OWNER.—The term ‘‘owner’’ means the per-
son or entity having the legal right to lease or sub-
lease dwelling units. Such term includes any prin-
cipals, general partners, primary shareholders, and
other similar participants in any entity owning a
multifamily housing project, as well as the entity it-
self.
(11) RENT.—The terms ‘‘rent’’ and ‘‘rental’’ in-
clude, with respect to members of a cooperative, the
charges under the occupancy agreements between such
members and the cooperative.
(12) RENTAL ASSISTANCE.—The term ‘‘rental as-
sistance’’ means housing assistance provided under
this title for the rental of a dwelling unit.
SEC. 372. RENTAL ASSISTANCE FRAUD RECOVERIES.
(a) AUTHORITY TO RETAIN RECOVERED AMOUNTS.—
The Secretary shall permit local housing and management
authorities administering housing assistance under this
title to retain, out of amounts obtained by the authorities
from tenants that are due as a result of fraud and abuse,
an amount (determined in accordance with regulations is-
sued by the Secretary) equal to the greater of—
179
(1) 50 percent of the amount actually collected;
or
(2) the actual, reasonable, and necessary ex-
penses related to the collection, including costs of in-
vestigation, legal fees, and collection agency fees.
(b) USE.—Amounts retained by an authority shall be
made available for use in support of the affected program
or project, in accordance with regulations issued by the Sec-
retary. If the Secretary is the principal party initiating
or sustaining an action to recover amounts from families
or owners, the provisions of this section shall not apply.
(c) RECOVERY.—Amounts may be recovered under this
section—
(1) by an authority through a lawsuit (including
settlement of the lawsuit) brought by the authority or
through court-ordered restitution pursuant to a crimi-
nal proceeding resulting from an authority’s inves-
tigation where the authority seeks prosecution of a
family or where an authority seeks prosecution of an
owner;
(2) through administrative repayment agree-
ments with a family or owner entered into as a result
of an administrative grievance procedure conducted
by an impartial decisionmaker in accordance with
section 110; or
180
(3) through an agreement between the parties.
SEC. 373. STUDY REGARDING GEOGRAPHIC CONCENTRA-
TION OF ASSISTED FAMILIES.
(a) IN GENERAL.—The Secretary shall conduct a
study of the geographic areas in the State of Illinois served
by the Housing Authority of Cook County and the Chicago
Housing Authority and submit to the Congress a report and
a specific proposal, which addresses and resolves the issues
of—
(1) the adverse impact on local communities due
to geographic concentration of assisted households
under the tenant-based housing programs under sec-
tion 8 of the United States Housing Act of 1937 (as
in effect immediately before the enactment of this Act)
and under this title; and
(2) facilitating the deconcentration of such as-
sisted households by providing broader housing
choices to such households.
The study shall be completed, and the report shall be sub-
mitted, not later than 90 days after the date of the enact-
ment of this Act.
(b) CONCENTRATION.—For purposes of this section, the
term ‘‘concentration’’ means, with respect to any area with-
in a census tract, that—
181
(1) 15 percent or more of the households residing
within such area have incomes which do not exceed
the poverty level; or
(2) 15 percent or more of the total affordable
housing stock located within such area is assisted
housing.
TITLE IV—ACCREDITATION AND
OVERSIGHT OF LOCAL HOUS-
ING AND MANAGEMENT AU-
THORITIES
Subtitle A—Housing Foundation
and Accreditation Board
SEC. 401. ESTABLISHMENT.
There is established an independent agency in the exec-
utive branch of the Government to be known as the Housing
Foundation and Accreditation Board (in this title referred
to as the ‘‘Board’’).
SEC. 402. MEMBERSHIP.
(a) IN GENERAL.—The Board shall be composed of 12
members appointed by the President not later than 180
days after the date of the enactment of this Act, as follows:
(1) 4 members shall be appointed from among 10
individuals recommended by the Secretary of Housing
and Urban Development.
182
(2) 4 members shall be appointed from among 10
individuals recommended by the Chairman and
Ranking Minority Member of the Committee on
Banking, Housing, and Urban Affairs of the Senate.
(3) 4 members appointed from among 10 indi-
viduals recommended by the Chairman and Ranking
Minority Member of the Committee on Banking and
Financial Services of the House of Representatives.
(b) QUALIFICATIONS.—
(1) REQUIRED
REPRESENTATION.—The Board
shall at all times have the following members:
(A) 2 members who are residents of public
housing or dwelling units assisted under title III
of this Act or the provisions of section 8 of the
United States Housing Act of 1937 (as in effect
before the enactment of this Act).
(B) 2 members who are executive directors
of local housing and management authorities.
(C) 1 member who is a member of the Insti-
tute of Real Estate Managers.
(D) 1 member who is the owner of a multi-
family housing project assisted under a program
administered by the Secretary of Housing and
Urban Development.
183
(2) REQUIRED EXPERIENCE.—The Board shall
at all times have as members individuals with the fol-
lowing experience:
(A) At least 1 individual who has extensive
experience in the residential real estate finance
business.
(B) At least 1 individual who has extensive
experience in operating a nonprofit organization
that provides affordable housing.
(C) At least 1 individual who has extensive
experience in construction of multifamily hous-
ing.
(D) At least 1 individual who has extensive
experience in the management of a community
development corporation.
A single member of the board with the appropriate ex-
perience may satisfy the requirements of more than 1
subparagraph of this paragraph. A single member of
the board with the appropriate qualifications and ex-
perience may satisfy the requirements of a subpara-
graph of paragraph (1) and a subparagraph of this
paragraph.
(c) POLITICAL AFFILIATION.—Not more than 6 mem-
bers of the Board may be of the same political party.
(d) TERMS.—
184
(1) IN GENERAL.—Each member of the Board
shall be appointed for a term of 4 years, except as
provided in paragraphs (2) and (3).
(2) TERMS
OF
INITIAL
APPOINTEES.—As des-
ignated by the President at the time of appointment,
of the members first appointed—
(A) 3 shall be appointed for terms of 1 year;
(B) 3 shall be appointed for terms of 2
years;
(C) 3 shall be appointed for terms of 3
years; and
(D) 3 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 appointed
shall be appointed only for the remainder of that
term. A member may serve after the expiration of that
member’s term until a successor has taken office. A
vacancy in the Board shall be filled in the manner in
which the original appointment was made.
(e) CHAIRPERSON.—The Board shall elect a chair-
person from among members of the Board.
(f) QUORUM.—A majority of the members of the Board
shall constitute a quorum for the transaction of business.
185
(g) VOTING.—Each member of the Board shall be enti-
tled to 1 vote, which shall be equal to the vote of every other
member of the Board.
(h) PROHIBITION ON ADDITIONAL PAY.—Members of
the Board shall serve without compensation, but shall be
reimbursed for travel, subsistence, and other necessary ex-
penses incurred in the performance of their duties as mem-
bers of the Board.
SEC. 403. FUNCTIONS.
The purpose of this subtitle is to establish the Board
as a nonpolitical entity to carry out the following functions:
(1) 
EVALUATION
OF
DEEP
SUBSIDY
PRO-
GRAMS.—Measuring the performance and efficiency of
all ‘‘deep subsidy’’ programs for housing assistance
administered by the Secretary of Housing and Urban
Development, including the public housing program
under title II and the programs for tenant- and
project-based rental assistance under title III and sec-
tion 8 of the United States Housing Act of 1937 (as
in effect before the enactment of this Act).
(2) ESTABLISHMENT
OF
LHMA
PERFORMANCE
BENCHMARKS.—Establishing standards and guide-
lines under section 431 for use by the Secretary in
measuring the performance and efficiency of local
housing and management authorities and other own-
186
ers and providers of federally assisted housing in car-
rying out operational and financial functions.
(3) ACCREDITATION OF LHMA’S.—Establishing a
procedure under section 431(b) for accrediting local
housing and management authorities to receive block
grants under title I for the operation, maintenance,
and production of public housing, ensuring that fi-
nancial and performance audits under such section
are conducted annually for each local housing and
management authority, and reviewing such audits for
purposes of accreditation.
(4) CLASSIFICATION
OF
LHMA’S.—Classifying
local housing and management authorities, under to
section 434, according to the performance categories
under section 431(a)(2).
SEC. 404. INITIAL ESTABLISHMENT OF STANDARDS AND
PROCEDURES FOR LHMA COMPLIANCE.
(a) DEADLINE.—Not later than the expiration of the
12-month period beginning upon the completion of the ap-
pointment, under section 402, of the initial members of the
Board, the Board shall organize its structure and oper-
ations, establish the standards, guidelines, and procedures
under sections 431, and establish any fees under section
406. Before issuing such standards, guidelines, and proce-
187
dures in final form, the Board shall submit a copy to the
Congress.
(b) PRIORITY OF INITIAL EVALUATIONS.—After orga-
nization of the Board and establishment of standards,
guidelines, and procedures under sections 431, the Board
shall commence evaluations under section 433(b) for the
purpose of accrediting local housing and management au-
thorities and shall give priority to conducting evaluations
of local housing and management authorities that are des-
ignated as troubled public housing agencies under section
6(j) of the United States Housing Act of 1937 (as in effect
before the date of the enactment of this Act) pursuant to
section 431(d).
SEC. 405. POWERS.
(a) HEARINGS.—The Board may, for the purpose of
carrying out this subtitle, hold such hearings and sit and
act at such times and places as the Board determines appro-
priate.
(b) RULES
AND REGULATIONS.—The Board may
adopt such rules and regulations as may be necessary to
establish its procedures and to govern the manner of its op-
erations, organization, and personnel.
(c) ASSISTANCE FROM FEDERAL AGENCIES.—
(1) INFORMATION.—The Board may secure di-
rectly from any department or agency of the Federal
188
Government such information as the Board may re-
quire for carrying out its functions, including local
housing management plans submitted to the Secretary
by local housing and management authorities under
title II. Upon request of the Board, any such depart-
ment or agency shall furnish such information. The
Board may acquire information directly from local
housing and management authorities to the same ex-
tent the Secretary may acquire such information.
(2) GENERAL SERVICES ADMINISTRATION.—The
Administrator of General Services shall provide to the
Board, on a reimbursable basis, such administrative
support services as the Board may request.
(3) DEPARTMENT OF HOUSING AND URBAN DE-
VELOPMENT.—Upon the request of the chairperson of
the Board, the Secretary of Housing and Urban De-
velopment shall, to the extent possible and subject to
the discretion of the Secretary, detail any of the per-
sonnel of the Department of Housing and Urban De-
velopment, on a nonreimbursable basis, to assist the
Board in carrying out its functions under this sub-
title.
(d) MAILS.—The Board may use the United States
mails in the same manner and under the same conditions
as other Federal agencies.
189
(e) CONTRACTING.—The Board may, to such extent
and in such amounts as are provided in appropriation
Acts, enter into contracts with private firms, institutions,
and individuals for the purpose of conducting research or
surveys necessary to enable the Board to discharge its func-
tions under this subtitle.
(f) STAFF.—
(1) EXECUTIVE DIRECTOR.—The Board shall ap-
point an executive director of the Board, who shall be
compensated at a rate fixed by the Board, but which
shall not exceed the rate established for level V of the
Executive Schedule under title 5, United States Code.
(2) OTHER PERSONNEL.—In addition to the ex-
ecutive director, the Board may appoint and fix the
compensation of such personnel as the Board consid-
ers necessary, in accordance with the provisions of
title 5, United States Code, governing appointments
to the competitive service, and the provisions of chap-
ter 51 and subchapter III of chapter 53 of such title,
relating to classification and General Schedule pay
rates. Such personnel may include personnel for as-
sessment teams under section 431(b).
SEC. 406. FEES.
(a) ACCREDITATION FEES.—The Board may establish
and charge fees for the accreditation of local housing and
190
management authorities as the Board considers necessary
to cover the costs of the operations of the Board relating
to establishing standards, guidelines, and procedures for
evaluating the performance of local housing and manage-
ment authorities and performing comprehensive reviews re-
lating to the accreditation of such authorities.
(b) FUND.—Any fees collected under this section shall
be deposited in an operations fund for the Board, which
is hereby established in the Treasury of the United States.
Amounts in such fund shall be available, to the extent pro-
vided in appropriation Acts, for the expenses of the Board
in carrying out its functions under this subtitle.
SEC. 407. REPORTS.
The Board shall submit a report to the Congress annu-
ally describing, for the year for which the report is made—
(1) any modifications made by the Board to the
standards, guidelines, and procedures issued under
section 431 by the Board;
(2) the results of the assessments, reviews, and
evaluations conducted by the Board under subtitle B;
(3) the types and extent of assistance, informa-
tion, and products provided by the Board; and
(4) any other activities of the Board.
191
Subtitle B—Accreditation and Over-
sight Standards and Procedures
SEC. 431. ESTABLISHMENT OF PERFORMANCE BENCH-
MARKS AND ACCREDITATION PROCEDURES.
(a) PERFORMANCE BENCHMARKS.—
(1) PERFORMANCE AREAS.—The Housing Foun-
dation and Accreditation Board established under sec-
tion 401 (in this subtitle referred to as the ‘‘Board’’)
shall establish standards and guidelines, for use under
section 434, to measure the performance of local hous-
ing and management authorities in all aspects relat-
ing to—
(A) operational and financial functions;
(B) providing, maintaining, and assisting
low-income housing—
(i) that is safe, clean, and healthy, as
required under sections 232 and 328;
(ii) in a manner consistent with the
comprehensive housing affordability strat-
egy under section 105 of the Cranston-Gon-
zalez National Affordable Housing Act, if
appropriate;
(iii) that is occupied by eligible fami-
lies; and
192
(iv) that is affordable to eligible fami-
lies;
(C) producing low-income housing and exe-
cuting capital projects, if applicable;
(D) administering the provision of housing
assistance under title III;
(E) accomplishing the goals and plans set
forth in the local housing management plan for
the authority;
(F) promoting responsibility and self-suffi-
ciency among residents of public housing devel-
opments of the authority and assisted families
under title III; and
(G) complying with the other requirements
of the authority under block grant contracts
under title II, grant agreements under title III,
and the provisions of this Act.
(2) PERFORMANCE
CATEGORIES.—In establish-
ing standards and guidelines under this section, the
Board shall define various levels of performance,
which shall include the following levels:
(A) EXCEPTIONALLY
WELL-MANAGED.—A
minimum acceptable level of performance in the
areas specified in paragraph (1) for classifica-
tion of a local housing and management author-
193
ity as exceptionally well-managed, which shall
indicate that the authority functions exception-
ally.
(B) WELL-MANAGED.—A minimum accept-
able level of performance in the areas specified in
paragraph (1) for classification of a local hous-
ing and management authority as well-managed,
which shall indicate that the authority functions
satisfactorily.
(C) AT RISK OF BECOMING TROUBLED.—A
minimum acceptable level of performance in the
areas specified in paragraph (1) for classifica-
tion of a local housing and management author-
ity as at risk of becoming troubled, which shall
indicate that there are elements in the oper-
ations, management, or functioning of the au-
thority that must be addressed before they result
in serious and complicated deficiencies.
(D) TROUBLED.—A minimum level of per-
formance in the areas specified in paragraph (1)
for classification of a local housing and manage-
ment authority as a troubled authority, which
shall indicate that the authority functions unsat-
isfactorily with respect to certain areas under
194
paragraph (1), but such deficiencies are not ir-
reparable.
(E) DYSFUNCTIONAL.—A maximum level of
performance in the areas specified in paragraph
(1) for classification of a local housing and man-
agement authority as dysfunctional, which shall
indicate that the authority suffers such defi-
ciencies that the authority should not be allowed
to continue to manage low-income housing or ad-
minister housing assistance.
(3) ACCREDITATION STANDARD.—In establishing
standards and guidelines under this section, the
Board shall establish a minimum acceptable level of
performance for accrediting a local housing and man-
agement authority for purposes of authorizing the au-
thority to enter into a new block grant contract under
title II or a new grant agreement under title III.
(b) ACCREDITATION PROCEDURE.—The Accreditation
Board shall establish procedures for—
(1) reviewing the performance of a local housing
and management authority over the term of the expir-
ing accreditation, which review shall be conducted
during the 12-month period that ends upon the con-
clusion of the term of the expiring accreditation;
195
(2) evaluating the capability of a local housing
and management authority that proposes to enter
into an initial block grant contract under title II or
an initial grant agreement under title III; and
(3) determining whether the authority complies
with the standards and guidelines for accreditation
established under subsection (a)(3).
The procedures for a review or evaluation under this sub-
section shall provide for the review or evaluation to be con-
ducted by an assessment team established by the Board,
which shall review annual financial and performance au-
dits conducted under section 432 and obtain such informa-
tion as the Board may require.
(c) IDENTIFICATION OF POTENTIAL PROBLEMS.—The
standards and guidelines under subsection (a) and the pro-
cedure under subsection (b) shall be established in a manner
designed to identify potential problems in the operations,
management, functioning of local housing and management
authorities at a time before such problems result in serious
and complicated deficiencies.
(d) INTERIM APPLICABILITY OF PHMAP.—Notwith-
standing any other provision of this subtitle, during the pe-
riod that begins on the date of the enactment of this Act
and ends upon the date of the effectiveness of final regula-
tions establishing the standards, guidelines, and procedures
196
required under this section and section 432, the Secretary
shall assess the management performance of local housing
and management authorities in the same manner provided
for public housing agencies pursuant to section 6(j) of the
United States Housing Act of 1937 (as in effect imme-
diately before the enactment of this Act) and may take ac-
tions with respect to local housing and management au-
thorities that are authorized under such section with respect
to public housing agencies.
SEC. 432. ANNUAL FINANCIAL AND PERFORMANCE AUDIT.
(a) REQUIREMENT.—The Secretary shall require each
local housing and management authority that receives
grant amounts under this Act in a fiscal year to have a
financial and performance audit of the authority conducted
for the fiscal year and to submit the results of the audit
to the Secretary and the Board. Not later than 60 days be-
fore submitting a financial and performance audit to the
Secretary and the Board, the local housing and manage-
ment authority shall submit the audit to any local elected
official or officials responsible for appointing the members
of the board of directors (or other similar governing body)
of the local housing and management authority for review
and comment. Any such comments shall be submitted, to-
gether with the audit, to the Secretary and the Board and
197
the Secretary and the Board shall consider such comments
in reviewing the audit.
(b) PROCEDURES.— The requirements for financial
and performance audits shall—
(1) provide for the audit to be conducted by an
independent auditor selected by the authority;
(2) authorize the auditor to obtain information
from a local housing and management authority, to
access any books, documents, papers, and records of
an authority that are pertinent to this Act and assist-
ance received pursuant to this Act, and to review any
reports of an authority to the Secretary; and
(3) be designed to identify potential problems in
the operations, management, functioning of a local
housing and management authority at a time before
such problems result in serious and complicated defi-
ciencies.
(c) PURPOSE.—Audits under this section shall be de-
signed to—
(1) evaluate the financial performance and
soundness and management performance of the local
housing and management authority board of directors
(or other similar governing body) and the authority
management officials and staff;
198
(2) assess the compliance of an authority with
all aspects of the standards and guidelines established
under section 431(a)(1); and
(3) provide information to the Secretary and the
Board regarding the financial performance and man-
agement of the authority and to determine whether a
review under section 225(d) or 353(c) is required.
(d) SINGLE AUDIT ACT COMPLIANCE.—An audit
under this section shall be made in a manner so that the
audit complies with the requirements for audits under
chapter 75 of title 31, United States Code.
(e) WITHHOLDING
OF
AMOUNTS
FOR
COSTS
OF
AUDIT.—If the Secretary determines that a local housing
and management authority has failed to take the actions
required to submit an audit under this section for a fiscal
year, the Secretary may—
(1) arrange for, and pay the costs of, the audit;
and
(2) withhold, from the total allocation for any
fiscal year otherwise payable to the authority under
this Act, amounts sufficient to pay for the reasonable
costs of conducting an acceptable audit, including, if
appropriate, the reasonable costs of accounting serv-
ices necessary to place the authority’s books and
records in condition that permits an audit.
199
SEC. 433. ACCREDITATION.
(a) REVIEW UPON EXPIRATION OF PREVIOUS ACCRED-
ITATION.—The Accreditation Board shall perform a com-
prehensive review of the performance of a local housing and
management authority, in accordance with the procedures
established under section 431(b), before the expiration of the
term for which a previous accreditation was granted under
this subtitle.
(b) INITIAL EVALUATION.—
(1) IN GENERAL.—Before entering into an ini-
tial block grant contract under title II or an initial
contract pursuant to section 302 for assistance under
title III with any local housing and management au-
thority, the Board shall conduct a comprehensive
evaluation of the capabilities of the local housing and
management authority.
(2) EXCEPTION.—Paragraph (1) shall not apply
to an initial block grant contract or grant agreement
entered into during the period beginning upon the
date of the enactment of this Act and ending upon the
date of the effectiveness of final regulations establish-
ing the standards, guidelines, and procedures required
under section 431 with any public housing agency
that received amounts under the United States Hous-
ing Act of 1937 during fiscal year 1995.