SEC. 2. STANDARDS FOR PHYSICAL CONDITION AND MAN-
AGEMENT OF HOUSING RECEIVING ASSIST-
ANCE PAYMENTS. 
Section 8 of the United States Housing Act of 1937 
(42 U.S.C. 1437f) is amended by inserting after sub-
section (v) the following: 
‘‘(w) STANDARDS FOR PHYSICAL CONDITION AND 
MANAGEMENT OF HOUSING RECEIVING ASSISTANCE PAY-
MENTS.— 
‘‘(1) STANDARDS
FOR
PHYSICAL
CONDITION 
AND MANAGEMENT OF HOUSING.—Any entity receiv-
ing assistance payments under this section shall 
maintain decent, safe, and sanitary conditions, as 
determined by the Secretary, for any structure cov-
ered under a housing assistance payment contract. 
‘‘(2) SURVEY
OF
TENANTS.—The Secretary 
shall develop a process by which a Performance- 
Based Contract Administrator shall, on a semi-
annual basis, conduct a survey of the tenants of 
each structure covered under a housing assistance 
payment contract for the purpose of identifying con-
sistent or persistent problems with the physical con-
dition of the structure or performance of the man-
ager of the structure. 
‘‘(3) 
REMEDIATION.—A 
structure 
covered 
under a housing assistance payment contract shall 
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be referred to the Secretary for remediation if a Per-
formance-Based Contract Administrator identifies a 
consistent or persistent problem with the structure 
or the management of the structure based on— 
‘‘(A) a survey conducted under paragraph 
(2); or 
‘‘(B) any other observation made by the 
Performance-Based 
Contract 
Administrator 
during the normal course of business. 
‘‘(4) PENALTY
FOR
FAILURE
TO
UPHOLD 
STANDARDS.— 
‘‘(A) IN
GENERAL.—The Secretary may 
impose a penalty on any owner of a structure 
covered under a housing assistance payment 
contract if the Secretary finds that the struc-
ture or manager of the structure— 
‘‘(i) did not satisfactorily meet the re-
quirements under paragraph (1); or 
‘‘(ii) is repeatedly referred to the Sec-
retary for remediation by a Performance- 
Based Contract Administrator through the 
process established under paragraph (3). 
‘‘(B) AMOUNT.—A penalty imposed under 
subparagraph (A) shall be in an amount equal 
to not less than 1 percent of the annual budget 
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authority the owner is allocated under a hous-
ing assistance payment contract. 
‘‘(C) USE
OF
AMOUNTS.—Any amounts 
collected under this paragraph shall be used 
solely for the purpose of supporting safe and 
sanitary conditions at applicable structures or 
for tenant relocation, as designated by the Sec-
retary, with priority given to the tenants of the 
structure that led to the penalty. 
‘‘(5) APPLICABILITY.—This subsection shall not 
apply to any property assisted under subsection 
(o).’’. 
SEC. 3. ISSUANCE OF REPORT. 
Not later than 1 year after the date of enactment 
of this Act, the Secretary of Housing and Urban Develop-
ment shall submit to Congress a report that— 
(1) examines the adequacy of capital reserves 
for each structure covered under a housing assist-
ance payment contract under section 8 of the United 
States Housing Act of 1937 (42 U.S.C. 1437f); 
(2) examines the use of funds derived from a 
housing assistance payment contract for purposes 
unrelated to the maintenance and capitalization of 
the structure covered under the contract; and 
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(3) includes any administrative or legislative 
recommendations to further improve the living con-
ditions at those structures. 
Æ 
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