a final rule under this paragraph. Such final rule shall
be issued not later than August 31, 1995.’’.
(b) RETENTION BY PHA’S OF SAVINGS FROM EFFI-
CIENT MANAGEMENT.—Section 6(e) of the United States
Housing Act of 1937 (42 U.S.C. 1437d(e)) is amended
to read as follows:
‘‘(e) TREATMENT OF SAVINGS.—
‘‘(1) IN GENERAL.—Any income generated by a
high-performing public housing agency that exceeds
the income estimated by the agency to be generated,
according to the agency’s annual operating budget,
shall be excluded in subsequent years in calculating
the amount of the operating subsidy provided under
section 9 to the high-performing public housing
agency. Such savings shall be retained by the agency
for other housing purposes.
‘‘(2) 
HIGH-PERFORMING
PUBLIC
HOUSING
AGENCY.—For purposes of paragraph (1), the term
‘high-performing public housing agency’ means, with
respect to a year, a public housing agency that has
been designated pursuant to subsection (j) as a high
performing public housing agency for the last fiscal
year ending before the commencement of such
year.’’.
SEC. 107. DESIGNATED HOUSING.
Section 7(e)(1) of the United States Housing Act of
1937 (42 U.S.C. 1437e(e)(1)) is amended—
(1) in the first sentence, by striking ‘‘and the
Secretary approves an application under this sub-
section for such designation’’; and
(2) in the second sentence, by inserting before
the period at the end the following: ‘‘, which shall
provide that an application for a project (or portion
of a project) shall be submitted and considered for
approval in conjunction with submission and ap-
proval of the allocation plan for the project (or por-
tion) under section 7(f)’’.
SEC. 108. ELIGIBLE USES OF EMERGENCY MODERNIZATION
FUNDS.
Section 14(k)(1) of the United States Housing Act
of 1937 (42 U.S.C. 1437l(k)(1)) is amended—
(1) 
in 
the 
first 
sentence, 
by 
striking
‘‘$75,000,000’’ and inserting ‘‘$50,000,000’’; and
(2) by adding at the end the following new sen-
tence: ‘‘The Secretary shall make any amounts re-
served under this paragraph for any fiscal year that
remain unobligated on September 1 of such fiscal
year available for modernization needs in connection
with the settlement of litigation and desegregation of
public housing. Of the amounts reserved each year
under this paragraph, the Secretary shall make
available to the Inspector General of the Department
of Housing and Urban Development not more than
$5,000,000 for cost in connection with efforts to
combat violent crime in public housing. Using
amounts made available pursuant to the preceding
sentence during fiscal years 1995 and 1996, the Sec-
retary shall provide amounts in each such fiscal year
for the continuation of the drug elimination activi-
ties under Project Nos. IA05PO98003004 and
IA05DEP0980193.’’.
SEC. 109. USE OF MODERNIZATION FUNDS FOR REPLACE-
MENT HOUSING.
(a) IN GENERAL.—Section 14 of the United States
Housing Act of 1937 (42 U.S.C. 1437l) is amended by
adding at the end the following new subsection:
‘‘(q) USE OF AMOUNTS FOR REPLACEMENT HOUS-
ING.—
‘‘(1) AUTHORITY.—A public housing agency
may use assistance under this section to provide re-
placement housing as required by section 18 by de-
veloping or acquiring additional housing under this
Act, in accordance with requirements applicable to
the development of public housing, but only if the
cost of providing such housing (not including costs
of demolition) is more cost effective than the cost of
modernization of the housing proposed to be re-
placed.
‘‘(2) LIMITATION ON AMOUNT.—In any fiscal
year, a public housing agency may use not more
than 50 percent of any assistance provided to the
agency under this section for the fiscal year for pro-
viding replacement housing pursuant to this section.
‘‘(3) REQUIREMENTS.—A public housing agen-
cy may use assistance under this section as provided
in subsection (a) only if the replacement plan of the
agency, required under section 18, has been ap-
proved by the Secretary.’’.
(b) AVAILABLE REPLACEMENT HOUSING.—Section
14(c)(1) of the United States Housing Act of 1937 is
amended by inserting before the semicolon the following:
‘‘or, only in the case of assistance used as provided under
subsection (q), housing or units in housing owned (or
leased for a period to be determined by the Secretary) by
a partnership of a public housing agency and other entity
in which the agency has a controlling interest’’.
SEC. 110. AUTHORITY FOR PUBLIC HOUSING AGENCIES TO
LEVERAGE AMOUNTS FOR REPLACEMENT
AND MODERNIZATION.
Section 14 of the United States Housing Act of 1937
(42 U.S.C. 1437l) is amended by adding after subsection
(q), as added by the preceding provisions of this Act, the
following new subsection:
‘‘(r) AUTHORITY FOR PUBLIC HOUSING AGENCIES
TO LEVERAGE AMOUNTS FOR REPLACEMENT AND MOD-
ERNIZATION.—
‘‘(1) GENERAL
AUTHORIZATION.—The Sec-
retary may, upon such terms and conditions as the
Secretary may prescribe, authorize a public housing
agency (or a partnership including a public housing
agency) to use grants provided under subsection (b)
to leverage amounts which shall be used for financ-
ing housing to replace existing public housing dwell-
ing units or for modernization of public housing, but
only if the agency submits to the Secretary a plan
for such leveraging that is approved by the Sec-
retary.
‘‘(2) REQUIREMENTS.—The Secretary may ap-
prove a plan for leveraging under paragraph (1) only
if the Secretary determines that—
‘‘(A) the public housing agency has an ac-
ceptable rate of obligation of funds under sec-
tion 14 and demonstrates the ability to use
such amounts effectively, directly or through
contract management;
‘‘(B) replacement units, if included in the
plan, will be subject to binding covenants or
commitments sufficient to ensure that they will
be used for housing reserved for occupancy by
low- and very low-income families for not less
than 40 years;
‘‘(C) any modernization to be carried out
under the plan complies with the modernization
plan submitted under this section by the public
housing agency and any replacement of public
housing dwelling units to be carried out under
the plan complies with the requirements of sec-
tion 18;
‘‘(D) the plan provides permanent financ-
ing commitments from additional sources,
which may include banks and other conven-
tional lenders, State housing finance agencies,
secondary market entities, and other financial
institutions, sufficient to ensure the financing
of replacement or modernized units in a timely
manner; and