US (United States) Code. Title 42. Chapter 8: Low-income housing

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GAO REPORT ON SECTION 8 RENTAL ASSISTANCE FOR MULTIFAMILY HOUSING

PROJECTS

Section 532 of Pub. L. 105-65 provided that: "Not later than the

expiration of the 18-month period beginning on the date of the

enactment of this Act [Oct. 27, 1997], the Comptroller General of

the United States shall submit a report to the Congress analyzing -

"(1) the housing projects for which project-based assistance is

provided under section 8 of the United States Housing Act of 1937

[42 U.S.C. 1437f], but which are not subject to a mortgage

insured or held by the Secretary under the National Housing Act

[12 U.S.C. 1701 et seq.];

"(2) how State and local housing finance agencies have

benefited financially from the rental assistance program under

section 8 of the United States Housing Act of 1937, including any

benefits from fees, bond financings, and mortgage refinancings;

and

"(3) the extent and effectiveness of State and local housing

finance agencies oversight of the physical and financial

management and condition of multifamily housing projects for

which project-based assistance is provided under section 8 of the

United States Housing Act of 1937."

ADMINISTRATIVE FEES FOR CERTIFICATE AND HOUSING VOUCHER PROGRAMS

Section 202 of Pub. L. 104-204 provided that: "Notwithstanding

section 8(q) of the United States Housing Act of 1937 [42 U.S.C.

1437f(q)], as amended -

"(a) The Secretary shall establish fees for the cost of

administering the certificate, voucher and moderate rehabilitation

programs.

"(1)(A) For fiscal year 1997, the fee for each month for which

a dwelling unit is covered by an assistance contract shall be 7.5

percent of the base amount, adjusted as provided herein, in the

case of an agency that, on an annual basis, is administering a

program of no more than 600 units, and 7 percent of the base

amount, adjusted as provided herein, for each additional unit

above 600.

"(B) The base amount shall be the higher of -

"(i) the fair market rental for fiscal year 1993 for a

2-bedroom existing rental dwelling unit in the market area of

the agency; and

"(ii) such fair market rental for fiscal year 1994, but not

more than 103.5 percent of the amount determined under clause

(i).

"(C) The base amount shall be adjusted to reflect changes in

the wage data or other objectively measurable data that reflect

the costs of administering the program during fiscal year 1996;

except that the Secretary may require that the base amount be not

less than a minimum amount and not more than a maximum amount.

"(2) For subsequent fiscal years, the Secretary shall publish a

notice in the Federal Register, for each geographic area,

establishing the amount of the fee that would apply for the

agencies administering the program, based on changes in wage data

or other objectively measurable data that reflect the cost of

administering the program, as determined by the Secretary.

"(3) The Secretary may increase the fee if necessary to reflect

higher costs of administering small programs and programs

operating over large geographic areas.

"(4) The Secretary may decrease the fee for PHA-owned units.

"(b) Beginning in fiscal year 1997 and thereafter, the Secretary

shall also establish reasonable fees (as determined by the

Secretary) for -

"(1) the costs of preliminary expenses, in the amount of $500,

for a public housing agency, but only in the first year it

administers a tenant-based assistance program under the United

States Housing Act of 1937 [42 U.S.C. 1437 et seq.] and only if,

immediately before the effective date of this Act [Sept. 26,

1996], it was not administering a tenant-based assistance program

under the 1937 Act (as in effect immediately before the effective

date of this Act), 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 program; and

"(3) extraordinary costs approved by the Secretary."

Similar provisions were contained in the following prior

appropriations Acts:

Pub. L. 104-99, title IV, Sec. 403(b), Jan. 26, 1996, 110 Stat.

43.

Pub. L. 103-120, Sec. 11(a), Oct. 27, 1993, 107 Stat. 1151.

CONTRACT RENEWALS

Section 211 of Pub. L. 104-204, as amended by Pub. L. 105-18,

title II, Sec. 10006, June 12, 1997, 111 Stat. 201; Pub. L. 105-65,

title V, Sec. 523(e), Oct. 27, 1997, 111 Stat. 1407; Pub. L.

106-400, Sec. 2, Oct. 30, 2000, 114 Stat. 1675, provided that:

"(a) Definitions. - For purposes of this section -

"(1) the term 'expiring contract' means a contract for

project-based assistance under section 8 of the United States

Housing Act of 1937 [42 U.S.C. 1437f] that expires during fiscal

year 1997;

"(2) the term 'family' has the same meaning as in section 3(b)

of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)];

"(3) the term 'multifamily housing project' means a property

consisting of more than 4 dwelling units that is covered in whole

or in part by a contract for project-based assistance under

section 8 of the United States Housing Act of 1937;

"(4) the term 'owner' has the same meaning as in section 8(f)

of the United States Housing Act of 1937;

"(5) the term 'project-based assistance' means rental

assistance under section 8 of the United States Housing Act of

1937 that is attached to a multifamily housing project;

"(6) the term 'public agency' means a State housing finance

agency, a local housing agency, or other agency with a public

purpose and status;

"(7) the term 'Secretary' means the Secretary of Housing and

Urban Development; and

"(8) the term 'tenant-based assistance' has the same meaning as

in section 8(f) of the United States Housing Act of 1937.

"(b) Section 8 Contract Renewal Authority. -

"(1) In general. - Notwithstanding section 405(a) of the

Balanced Budget Downpayment Act, I [Pub. L. 104-99, set out

below], upon the request of the owner of a multifamily housing

project that is covered by an expiring contract, the Secretary

shall use amounts made available for the renewal of assistance

under section 8 of the United States Housing Act of 1937 [42

U.S.C. 1437f] to renew the expiring contract as project-based

assistance for a period of not more than one year, at rent levels

that are equal to those under the expiring contract as of the

date on which the contract expires: Provided, That those rent

levels do not exceed 120 percent of the fair market rent for the

market area in which the project is located. For an FHA-insured

multifamily housing project with an expiring contract at rent

levels that exceed 120 percent of the fair market rent for the

market area, the Secretary shall provide, at the request of the

owner, section 8 project-based assistance, for a period of not

more than one year, at rent levels that do not exceed 120 percent

of the fair market rent.

"(2) Exemption for state and local housing agency projects. -

Notwithstanding paragraph (1), upon the expiration of a contract

with rent levels that exceed the percentage described in that

paragraph, if the Secretary determines that the primary financing

or mortgage insurance for the multifamily housing project that is

covered by that expiring contract was provided by a public

agency, the Secretary shall, at the request of the owner and the

public agency, renew the expiring contract -

"(A) for a period of not more than one year; and

"(B) at rent levels that are equal to those under the

expiring contract as of the date on which the contract expires.

"(3) Exemption of certain other projects. - Notwithstanding

paragraph (1), for section 202 projects, section 515 projects,

projects with contracts entered into pursuant to section 441 of

the McKinney-Vento Homeless Assistance Act [42 U.S.C. 11401], and

projects with rents that exceed 100 percent of fair market rent

for the market area, but that are less than rents for comparable

projects, upon the expiration of a section 8 contract, the

Secretary shall, at the request of the owner, renew the expiring

contract -

"(A) for a period of not more than one year; and

"(B) at rent levels that are equal to those under the

expiring contract as of the date on which the contract expires.

"(4) Other contracts. -

"(A) Participation in demonstration. - For a contract

covering an FHA-insured multifamily housing project that

expires during fiscal year 1997 with rent levels that exceed

the percentage described in paragraph (1) and after notice to

the tenants, the Secretary shall, at the request of the owner

of the project and after notice to the tenants, include that

multifamily housing project in the demonstration program under

section 212 of this Act [set out below]. The Secretary shall

ensure that a multifamily housing project with an expiring

contract in fiscal year 1997 shall be allowed to be included in

the demonstration.

"(B) Effect of material adverse actions and omissions. -

Notwithstanding paragraph (1) or any other provision of law,

the Secretary shall not renew an expiring contract if the

Secretary determines that the owner of the multifamily housing

project has engaged in material adverse financial or managerial

actions or omissions with regard to the project (or with regard

to other similar projects if the Secretary determines that such

actions or omissions constitute a pattern of mismanagement that

would warrant suspension or debarment by the Secretary). The

term 'owner', as used in this subparagraph, in addition to it

having the same meaning as in section 8(f) of the United States

Housing Act of 1937 [42 U.S.C. 1437f(f)], also means an

affiliate of the owner. The term 'affiliate of the owner' means

any person or entity (including, but not limited to, a general

partner or managing member, or an officer of either) that

controls an owner, is controlled by an owner, or is under

common control with the owner. The term 'control' means the

direct or indirect power (under contract, equity ownership, the

right to vote or determine a vote, or otherwise) to direct the

financial, legal, beneficial, or other interests of the owner.

"(C) Transfer of property. - For properties disqualified from

the demonstration program because of actions by an owner or

purchaser in accordance with subparagraph (B), the Secretary

shall establish procedures to facilitate the voluntary sale or

transfer of the property, with a preference for tenant

organizations and tenant-endorsed community-based nonprofit and

public agency purchasers meeting such reasonable qualifications

as may be established by the Secretary. The Secretary may

include the transfer of section 8 project-based assistance.

"(5) Tenant protections. - Any family residing in an assisted

unit in a multifamily housing project that is covered by an

expiring contract that is not renewed, shall be offered

tenant-based assistance before the date on which the contract

expires or is not renewed."

Pub. L. 104-120, Sec. 2(a), Mar. 28, 1996, 110 Stat. 834,

provided that: "Notwithstanding section 405(b) of the Balanced

Budget Downpayment Act, I (Public Law 104-99; 110 Stat. 44) [set

out below], at the request of the owner of any project assisted

under section 8(e)(2) of the United States Housing Act of 1937 [42

U.S.C. 1437f(e)(2)] (as such section existed immediately before

October 1, 1991), the Secretary of Housing and Urban Development

may renew, for a period of 1 year, the contract for assistance

under such section for such project that expires or terminates

during fiscal year 1996 at current rent levels."

Section 405(a), (b) of Pub. L. 104-99, as amended by Pub. L.

105-65, title V, Sec. 523(d), Oct. 27, 1997, 111 Stat. 1407,

provided that:

"(a) Notwithstanding part 24 of title 24 of the Code of Federal

Regulations, for fiscal year 1996 and henceforth, the Secretary of

Housing and Urban Development may use amounts available for the

renewal of assistance under section 8 of the United States Housing

Act of 1937 [42 U.S.C. 1437f], upon termination or expiration of a

contract for assistance under section 8 of such Act of 1937 (other

than a contract for tenant-based assistance and notwithstanding

section 8(v) of such Act for loan management assistance), to

provide assistance under section 8 of such Act, subject to the

Section 8 Existing Fair Market Rents, for the eligible families

assisted under the contracts at expiration or termination, which

assistance shall be in accordance with terms and conditions

prescribed by the Secretary.

"(b) Notwithstanding subsection (a) and except for projects

assisted under section 8(e)(2) of the United States Housing Act of

1937 (as it existed immediately prior to October 1, 1991), at the

request of the owner, the Secretary shall renew for a period of one

year contracts for assistance under section 8 that expire or

terminate during fiscal year 1996 at the current rent levels."

FHA MULTIFAMILY DEMONSTRATION AUTHORITY

Section 212 of title II of Pub. L. 104-204, as amended by Pub. L.

105-65, title V, Sec. 523(f), Oct. 27, 1997, 111 Stat. 1407,

provided that:

"(a) In General. -

"(1) Repeal. -

"(A) In general. - Section 210 of the Departments of Veterans

Affairs and Housing and Urban Development and Independent

Agencies Appropriations Act, 1996 (110 Stat. 1321) [section

101(e) [title II, Sec. 210] of Pub. L. 104-134, formerly set

out as a note below] is repealed.

"(B) Exception. - Notwithstanding the repeal under

subparagraph (A), amounts made available under section 210(f)

[of] the Departments of Veterans Affairs and Housing and Urban

Development and Independent Agencies Appropriations Act, 1996

shall remain available for the demonstration program under this

section through the end of fiscal year 1997.

"(2) Savings provisions. - Nothing in this section shall be

construed to affect any commitment entered into before the date

of enactment of this Act [Sept. 26, 1996] under the demonstration

program under section 210 of the Departments of Veterans Affairs

and Housing and Urban Development and Independent Agencies

Appropriations Act, 1996.

"(3) Definitions. - For purposes of this section -

"(A) the term 'demonstration program' means the program

established under subsection (b);

"(B) the term 'expiring contract' means a contract for

project-based assistance under section 8 of the United States

Housing Act of 1937 [42 U.S.C. 1437f] that expires during

fiscal year 1997;

"(C) the term 'family' has the same meaning as in section

3(b) of the United States Housing Act of 1937 [42 U.S.C.

1437a(b)];

"(D) the term 'multifamily housing project' means a property

consisting of more than 4 dwelling units that is covered in

whole or in part by a contract for project-based assistance;

"(E) the term 'owner' has the same meaning as in section 8(f)

of the United States Housing Act of 1937;

"(F) the term 'project-based assistance' means rental

assistance under section 8 of the United States Housing Act of

1937 that is attached to a multifamily housing project;

"(G) the term 'Secretary' means the Secretary of Housing and

Urban Development; and

"(H) the term 'tenant-based assistance' has the same meaning

as in section 8(f) of the United States Housing Act of 1937.

"(b) Demonstration Authority. -

"(1) In general. - Subject to the funding limitation in

subsection (l), the Secretary shall administer a demonstration

program with respect to multifamily projects -

"(A) whose owners agree to participate;

"(B) with rents on units assisted under section 8 of the

United States Housing Act of 1937 [42 U.S.C. 1437f] that are,

in the aggregate, in excess of 120 percent of the fair market

rent of the market area in which the project is located; and

"(C) the mortgages of which are insured under the National

Housing Act [12 U.S.C. 1701 et seq.].

"(2) Purpose. - The demonstration program shall be designed to

obtain as much information as is feasible on the economic

viability and rehabilitation needs of the multifamily housing

projects in the demonstration, to test various approaches for

restructuring mortgages to reduce the financial risk to the FHA

Insurance Fund while reducing the cost of section 8 subsidies,

and to test the feasibility and desirability of -

"(A) ensuring, to the maximum extent practicable, that the

debt service and operating expenses, including adequate

reserves, attributable to such multifamily projects can be

supported at the comparable market rent with or without

mortgage insurance under the National Housing Act and with or

without additional section 8 rental subsidies;

"(B) utilizing section 8 rental assistance, while taking into

account the capital needs of the projects and the need for

adequate rental assistance to support the low- and very

low-income families residing in such projects; and

"(C) preserving low-income rental housing affordability and

availability while reducing the long-term cost of section 8

rental assistance.

"(c) Goals. -

"(1) In general. - The Secretary shall carry out the

demonstration program in a manner that will protect the financial

interests of the Federal Government through debt restructuring

and subsidy reduction and, in the least costly fashion, address

the goals of -

"(A) maintaining existing affordable housing stock in a

decent, safe, and sanitary condition;

"(B) minimizing the involuntary displacement of tenants;

"(C) taking into account housing market conditions;

"(D) encouraging responsible ownership and management of

property;

"(E) minimizing any adverse income tax impact on property

owners; and

"(F) minimizing any adverse impacts on residential

neighborhoods and local communities.

"(2) Balance of competing goals. - In determining the manner in

which a mortgage is to be restructured or a subsidy reduced under

this subsection, the Secretary may balance competing goals

relating to individual projects in a manner that will further the

purposes of this section.

"(d) Participation Arrangements. -

"(1) In general. - In carrying out the demonstration program,

the Secretary may enter into participation arrangements with

designees, under which the Secretary may provide for the

assumption by designees (by delegation, by contract, or

otherwise) of some or all of the functions, obligations,

responsibilities and benefits of the Secretary.

"(2) Designees. - In entering into any arrangement under this

subsection, the Secretary shall select state housing finance

agencies, housing agencies or nonprofits (separately or in

conjunction with each other) to act as designees to the extent

such agencies are determined to be qualified by the Secretary. In

locations where there is no qualified State housing finance

agency, housing agency or nonprofit to act as a designee, the

Secretary may act as a designee. Each participation arrangement

entered into under this subsection shall include a designee as

the primary partner. Any organization selected by the Secretary

under this section shall have a long-term record of service in

providing low-income housing and meet standards of fiscal

responsibility, as determined by the Secretary.

"(3) Designee partnerships. - For purposes of any participation

arrangement under this subsection, designees are encouraged to

develop partnerships with each other, and to contract or

subcontract with other entities, including -

"(A) public housing agencies;

"(B) financial institutions;

"(C) mortgage servicers;

"(D) nonprofit and for-profit housing organizations;

"(E) the Federal National Mortgage Association;

"(F) the Federal Home Loan Mortgage Corporation;

"(G) Federal Home Loan Banks; and

"(H) other State or local mortgage insurance companies or

bank lending consortia.

"(e) Long-Term Affordability. -

"(1) In general. - After the renewal of a section 8 contract

pursuant to a restructuring under this section, the owner shall

accept each offer to renew the section 8 contract, for a period

of 20 years from the date of the renewal under the demonstration,

if the offer to renew is on terms and conditions, as agreed to by

the Secretary or designee and the owner under a restructuring.

"(2) Affordability requirements. - Except as otherwise provided

by the Secretary, in exchange for any mortgage restructuring

under this section, a project shall remain affordable for a

period of not less than 20 years. Affordability requirements

shall be determined in accordance with guidelines established by

the Secretary or designee. The Secretary or designee may waive

these requirements for good cause.

"(f) Procedures. -

"(1) Notice of participation in demonstration. - Not later than

45 days before the date of expiration of an expiring contract (or

such later date, as determined by the Secretary, for good cause),

the owner of the multifamily housing project covered by that

expiring contract shall notify the Secretary or designee and the

residents of the owner's intent to participate in the

demonstration program.

"(2) Demonstration contract. - Upon receipt of a notice under

paragraph (1), the owner and the Secretary or designee shall

enter into a demonstration contract, which shall provide for

initial section 8 project-based rents at the same rent levels as

those under the expiring contract or, if practical, the

budget-based rent to cover debt service, reasonable operating

expenses (including reasonable and appropriate services), and a

reasonable return to the owner, as determined solely by the

Secretary. The demonstration contract shall be for the minimum

term necessary for the rents and mortgages of the multifamily

housing project to be restructured under the demonstration

program, but shall not be for a period of time to exceed 180

days, unless extended for good cause by the Secretary.

"(g)(1) Project-Based Section 8. - The Secretary shall renew all

expiring contracts under the demonstration as section 8

project-based contracts, for a period of time not to exceed one

year, unless otherwise provided under subsection (h) or in

paragraph (2).

"(2) The Secretary may renew a demonstration contract for an

additional period of not to exceed 120 days, if -

"(A) the contract was originally executed before February 1,

1997, and the Secretary determines, in the sole discretion of the

Secretary, that the renewal period for the contract needs to

exceed 1 year, due to delay of publication of the Secretary's

demonstration program guidelines until January 23, 1997 (not to

exceed 21 projects); or

"(B) the contract was originally executed before October 1,

1997, in connection with a project that has been identified for

restructuring under the joint venture approach described in

section VII.B.2. of the Secretary's demonstration program

guidelines, and the Secretary determines, in the sole discretion

of the Secretary, that the renewal period for the contract needs

to exceed 1 year, due to delay in implementation of the joint

venture agreement required by the guidelines (not to exceed 25

projects).

"(h) Demonstration Actions. -

"(1) Demonstration actions. - For purposes of carrying out the

demonstration program, and in order to ensure that contract

rights are not abrogated, subject to such third party consents as

are necessary (if any), including consent by the Government

National Mortgage Association if it owns a mortgage insured by

the Secretary, consent by an issuer under the mortgage-backed

securities program of the Association, subject to the

responsibilities of the issuer to its security holders and the

Association under such program, and consent by parties to any

contractual agreement which the Secretary proposes to modify or

discontinue, the Secretary or, except with respect to

subparagraph (B), designee, subject to the funding limitation in

subsection (l), shall take not less than one of the actions

specified in subparagraphs (G), (H), and (I) and may take any of

the following actions:

"(A) Removal of restrictions. -

"(i) In general. - Consistent with the purposes of this

section, subject to the agreement of the owner of the project

and after consultation with the tenants of the project, the

Secretary or designee may remove, relinquish, extinguish,

modify, or agree to the removal of any mortgage, regulatory

agreement, project-based assistance contract, use agreement,

or restriction that had been imposed or required by the

Secretary, including restrictions on distributions of income

which the Secretary or designee determines would interfere

with the ability of the project to operate without

above-market rents.

"(ii) Accumulated residual receipts. - The Secretary or

designee may require an owner of a property assisted under

the section 8 new construction/substantial rehabilitation

program under the United States Housing Act of 1937 [42

U.S.C. 1437 et seq.] to apply any accumulated residual

receipts toward effecting the purposes of this section.

"(B) Reinsurance. - With respect to not more than 5,000 units

within the demonstration during fiscal year 1997, the Secretary

may enter into contracts to purchase reinsurance, or enter into

participations or otherwise transfer economic interest in

contracts of insurance or in the premiums paid, or due to be

paid, on such insurance, on such terms and conditions as the

Secretary may determine. Any contract entered into under this

paragraph shall require that any associated units be maintained

as low-income units for the life of the mortgage, unless waived

by the Secretary for good cause.

"(C) Participation by third parties. - The Secretary or

designee may enter into such agreements, provide such

concessions, incur such costs, make such grants (including

grants to cover all or a portion of the rehabilitation costs

for a project) and other payments, and provide other valuable

consideration as may reasonably be necessary for owners,

lenders, servicers, third parties, and other entities to

participate in the demonstration program. The Secretary may

establish performance incentives for designees.

"(D) Section 8 administrative fees. - Notwithstanding any

other provision of law, the Secretary may make fees available

from the section 8 contract renewal appropriation to a designee

for contract administration under section 8 of the United

States Housing Act of 1937 [42 U.S.C. 1437f] for purposes of

any contract restructured or renewed under the demonstration

program.

"(E) Full or partial payment of claim. - Notwithstanding any

other provision of law, the Secretary may make a full payment

of claim or partial payment of claim prior to default.

"(F) Credit enhancement. -

"(i) In general. - The Secretary or designee may provide

FHA multifamily mortgage insurance, reinsurance, or other

credit enhancement alternatives, including retaining the

existing FHA mortgage insurance on a restructured first

mortgage at market value or using the multifamily

risk-sharing mortgage programs, as provided under section 542

of the Housing and Community Development Act of 1992 [12

U.S.C. 1707 note]. Any limitations on the number of units

available for mortgage insurance under section 542 shall not

apply to insurance issued for purposes of the demonstration

program.

"(ii) Maximum percentage. - During fiscal year 1997, not

more than 25 percent of the units in multifamily housing

projects with expiring contracts in the demonstration, in the

aggregate, may be restructured without FHA insurance, unless

otherwise agreed to by the owner of a project.

"(iii) Credit subsidy. - Any credit subsidy costs of

providing mortgage insurance shall be paid from amounts made

available under subsection (l).

"(G) Mortgage restructuring. -

"(i) In general. - The Secretary or designee may

restructure mortgages to provide a restructured first

mortgage to cover debt service and operating expenses

(including a reasonable rate of return to the owner) at the

market rent, and a second mortgage equal to the difference

between the restructured first mortgage and the mortgage

balance of the eligible multifamily housing project at the

time of restructuring.

"(ii) Credit subsidy. - Any credit subsidy costs of

providing a second mortgage shall be paid from amounts made

available under subsection (l).

"(H) Debt forgiveness. - The Secretary or designee, for good

cause and at the request of the owner of a multifamily housing

project, may forgive at the time of the restructuring of a

mortgage any portion of a debt on the project that exceeds the

market value of the project.

"(I) Budget-based rents. - The Secretary or designee may

renew an expiring contract, including a contract for a project

in which operating costs exceed comparable market rents, for a

period of not more than one year, at a budget-based rent that

covers debt service, reasonable operating expenses (including

all reasonable and appropriate services), and a reasonable rate

of return to the owner, as determined solely by the Secretary,

provided that the contract does not exceed the rent levels

under the expiring contract. The Secretary may establish a

preference under the demonstration program for budget-based

rents for unique housing projects, such as projects designated

for occupancy by elderly families and projects in rural areas.

"(J) Section 8 tenant-based assistance. - For not more than

10 percent of units in multifamily housing projects that have

had their mortgages restructured in any fiscal year under the

demonstration, the Secretary or designee may provide, with the

agreement of an owner and in consultation with the tenants of

the housing, section 8 tenant-based assistance for some or all

of the assisted units in a multifamily housing project in lieu

of section 8 project-based assistance. Section 8 tenant-based

assistance may only be provided where the Secretary determines

and certifies that there is adequate available and affordable

housing within the local area and that tenants will be able to

use the section 8 tenant-based assistance successfully.

"(2) Offer and acceptance. - Notwithstanding any other

provision of law, an owner of a project in the demonstration must

accept any reasonable offer made by the Secretary or a designee

under this subsection. An owner may appeal the reasonableness of

any offer to the Secretary and the Secretary shall respond within

30 days of the date of appeal with a final offer. If the final

offer is not acceptable, the owner may opt out of the program.

"(i) Community and Tenant Input. - In carrying out this section,

the Secretary shall develop procedures to provide appropriate and

timely notice, including an opportunity for comment and timely

access to all relevant information, to officials of the unit of

general local government affected, the community in which the

project is situated, and the tenants of the project.

"(j) Transfer of Property. - The Secretary shall establish

procedures to facilitate the voluntary sale or transfer of

multifamily housing projects under the demonstration to tenant

organizations and tenant-endorsed community-based nonprofit and

public agency purchasers meeting such reasonable qualifications as

may be established by the Secretary.

"(k) Limitation on Demonstration Authority. - The Secretary shall

carry out the demonstration program with respect to mortgages not

to exceed 50,000 units.

"(l) Funding. - In addition to the $30,000,000 made available

under section 210 of the Departments of Veterans Affairs and

Housing and Urban Development and Independent Agencies

Appropriations Act, 1996 (110 Stat. 1321) [section 101(e) [title

II, Sec. 210] of Pub. L. 104-134, formerly set out as a note

below], for the costs (including any credit subsidy costs

associated with providing direct loans or mortgage insurance) of

modifying and restructuring loans held or guaranteed by the Federal

Housing Administration, as authorized under this section,

$10,000,000 is hereby appropriated, to remain available until

September 30, 1998.

"(m) Report to Congress. -

"(1) In general. -

"(A) Quarterly reports. - Not less than every 3 months, the

Secretary shall submit to the Congress a report describing and

assessing the status of the projects in the demonstration

program.

"(B) Final report. - Not later than 6 months after the end of

the demonstration program, the Secretary shall submit to the

Congress a final report on the demonstration program.

"(2) Contents. - Each report submitted under paragraph (1)(A)

shall include a description of -

"(A) each restructuring proposal submitted by an owner of a

multifamily housing project, including a description of the

physical, financial, tenancy, and market characteristics of the

project;

"(B) the Secretary's evaluation and reasons for each

multifamily housing project selected or rejected for

participation in the demonstration program;

"(C) the costs to the FHA General Insurance and Special Risk

Insurance funds;

"(D) the subsidy costs provided before and after

restructuring;

"(E) the actions undertaken in the demonstration program,

including the third-party arrangements made; and

"(F) the demonstration program's impact on the owners of the

projects, including any tax consequences.

"(3) Contents of final report. - The report submitted under

paragraph (1)(B) shall include -

"(A) the required contents under paragraph (2); and

"(B) any findings and recommendations for legislative

action."

Section 101(e) [title II, Sec. 210] of title I of Pub. L.

104-134, Apr. 26, 1996, 110 Stat. 1321-257, 1321-285; renumbered

title I, Pub. L. 104-140, Sec. 1(a), May 2, 1996, 110 Stat. 1327,

which authorized the Secretary of Housing and Urban Development on

and after Oct. 1, 1995, and before Oct. 1, 1997, to initiate a FHA

multifamily demonstration program, was repealed by Pub. L. 104-204,

title II, Sec. 212(a)(1)(A), Sept. 26, 1996, 110 Stat. 2897.

PUBLIC HOUSING MOVING TO WORK DEMONSTRATION

Section 101(e) [title II, Sec. 204] of Pub. L. 104-134, as

amended by Pub. L. 105-276, title V, Sec. 522(b)(3), Oct. 21, 1998,

112 Stat. 2564, provided that:

"(a) Purpose. - The purpose of this demonstration is to give

public housing agencies and the Secretary of Housing and Urban

Development the flexibility to design and test various approaches

for providing and administering housing assistance that: reduce

cost and achieve greater cost effectiveness in Federal

expenditures; give incentives to families with children where the

head of household is working, seeking work, or is preparing for

work by participating in job training, educational programs, or

programs that assist people to obtain employment and become

economically self-sufficient; and increase housing choices for

low-income families.

"(b) Program Authority. - The Secretary of Housing and Urban

Development shall conduct a demonstration program under this

section beginning in fiscal year 1996 under which up to 30 public

housing agencies (including Indian housing authorities)

administering the public or Indian housing program and the section

8 [42 U.S.C. 1437f] housing assistance payments program may be

selected by the Secretary to participate. The Secretary shall

provide training and technical assistance during the demonstration

and conduct detailed evaluations of up to 15 such agencies in an

effort to identify replicable program models promoting the purpose

of the demonstration. Under the demonstration, notwithstanding any

provision of the United States Housing Act of 1937 [42 U.S.C. 1437

et seq.] except as provided in subsection (e), an agency may

combine operating assistance provided under section 9 of the United

States Housing Act of 1937 [42 U.S.C. 1437g], modernization

assistance provided under section 14 of such Act [42 U.S.C. 1437l],

and assistance provided under section 8 of such Act for the

certificate and voucher programs, to provide housing assistance for

low-income families, as defined in section 3(b)(2) of the United

States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)], and services to

facilitate the transition to work on such terms and conditions as

the agency may propose and the Secretary may approve.

"(c) Application. - An application to participate in the

demonstration -

"(1) shall request authority to combine assistance under

sections 8, 9, and 14 of the United States Housing Act of 1937

[42 U.S.C. 1437f, 1437g, 1437l];

"(2) shall be submitted only after the public housing agency

provides for citizen participation through a public hearing and,

if appropriate, other means;

"(3) shall include a plan developed by the agency that takes

into account comments from the public hearing and any other

public comments on the proposed program, and comments from

current and prospective residents who would be affected, and that

includes criteria for -

"(A) families to be assisted, which shall require that at

least 75 percent of the families assisted by participating

demonstration public housing authorities shall be very

low-income families, as defined in section 3(b)(2) of the

United States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)];

"(B) establishing a reasonable rent policy, which shall be

designed to encourage employment and self-sufficiency by

participating families, consistent with the purpose of this

demonstration, such as by excluding some or all of a family's

earned income for purposes of determining rent;

"(C) continuing to assist substantially the same total number

of eligible low-income families as would have been served had

the amounts not been combined;

"(D) maintaining a comparable mix of families (by family

size) as would have been provided had the amounts not been used

under the demonstration; and

"(E) assuring that housing assisted under the demonstration

program meets housing quality standards established or approved

by the Secretary; and

"(4) may request assistance for training and technical

assistance to assist with design of the demonstration and to

participate in a detailed evaluation.

"(d) Selection. - In selecting among applications, the Secretary

shall take into account the potential of each agency to plan and

carry out a program under the demonstration, the relative

performance by an agency under the public housing management

assessment program under section 6(j) of the United States Housing

Act of 1937 [42 U.S.C. 1437d(j)], and other appropriate factors as

determined by the Secretary.

"(e) Applicability of 1937 Act Provisions. -

"(1) Section 18 of the United States Housing Act of 1937 [42

U.S.C. 1437p] shall continue to apply to public housing

notwithstanding any use of the housing under this demonstration.

"(2) Section 12 of such Act [42 U.S.C. 1437j] shall apply to

housing assisted under the demonstration, other than housing

assisted solely due to occupancy by families receiving

tenant-based assistance.

"(f) Effect on Section 8, Operating Subsidies, and Comprehensive

Grant Program Allocations. - The amount of assistance received

under section 8, section 9, or pursuant to section 14 [42 U.S.C.

1437f, 1437g, 1437l] by a public housing agency participating in

the demonstration under this part [section] shall not be diminished

by its participation.

"(g) Records, Reports, and Audits. -

"(1) Keeping of records. - Each agency shall keep such records

as the Secretary may prescribe as reasonably necessary to

disclose the amounts and the disposition of amounts under this

demonstration, to ensure compliance with the requirements of this

section, and to measure performance.

"(2) Reports. - Each agency shall submit to the Secretary a

report, or series of reports, in a form and at a time specified

by the Secretary. Each report shall -

"(A) document the use of funds made available under this

section;

"(B) provide such data as the Secretary may request to assist

the Secretary in assessing the demonstration; and

"(C) describe and analyze the effect of assisted activities

in addressing the objectives of this part [section].

"(3) Access to documents by the secretary. - The Secretary

shall have access for the purpose of audit and examination to any

books, documents, papers, and records that are pertinent to

assistance in connection with, and the requirements of, this

section.

"(4) Access to documents by the comptroller general. - The

Comptroller General of the United States, or any of the duly

authorized representatives of the Comptroller General, shall have

access for the purpose of audit and examination to any books,

documents, papers, and records that are pertinent to assistance

in connection with, and the requirements of, this section.

"(h) Evaluation and Report. -

"(1) Consultation with pha and family representatives. - In

making assessments throughout the demonstration, the Secretary

shall consult with representatives of public housing agencies and

residents.

"(2) Report to congress. - Not later than 180 days after the

end of the third year of the demonstration, the Secretary shall

submit to the Congress a report evaluating the programs carried

out under the demonstration. The report shall also include

findings and recommendations for any appropriate legislative

action.

"(i) Funding for Technical Assistance and Evaluation. - From

amounts appropriated for assistance under section 14 of the United

States Housing Act of 1937 [42 U.S.C. 1437l] for fiscal years 1996,

1997, and 1998, the Secretary may use up to a total of $5,000,000 -

"(1) to provide, directly or by contract, training and

technical assistance -

"(A) to public housing agencies that express an interest to

apply for training and technical assistance pursuant to

subsection (c)(4), to assist them in designing programs to be

proposed for the demonstration; and

"(B) to up to 10 agencies selected to receive training and

technical assistance pursuant to subsection (c)(4), to assist

them in implementing the approved program; and

"(2) to conduct detailed evaluations of the activities of the

public housing agencies under paragraph (1)(B), directly or by

contract.

"(j) Capital and Operating Fund Assistance. - With respect to any

public housing agency participating in the demonstration under this

section that receives assistance from the Capital or Operating Fund

under section 9 of the United States Housing Act of 1937 [42 U.S.C.

1437g] (as amended by the Quality Housing and Work Responsibility

Act of 1998), for purposes of this section -

"(1) any reference to assistance under section 9 of the United

States Housing Act of 1937 shall be considered to refer also to

assistance provided from the Operating Fund under section 9(e) of

such Act (as so amended); and

"(2) any reference to assistance under section 14 of the United

States Housing Act of 1937 [former 42 U.S.C. 1437l] shall be

considered to refer also to assistance provided from the Capital

Fund under section 9(d) of such Act (as so amended)."

PROHIBITION AGAINST PREFERENCES WITH RESPECT TO CERTAIN PROJECTS

Pub. L. 104-99, title IV, Sec. 402(d)(4)(B), Jan. 26, 1996, 110

Stat. 42, provided that: "Notwithstanding any other provision of

law, no Federal tenant selection preferences under the United

States Housing Act of 1937 [42 U.S.C. 1437 et seq.] shall apply

with respect to -

"(i) housing constructed or substantially rehabilitated

pursuant to assistance provided under section 8(b)(2) of the

United States Housing Act of 1937 [42 U.S.C. 1437f(b)(2)] (as

such section existed on the day before October 1, 1983); or

"(ii) projects financed under section 202 of the Housing Act of

1959 [12 U.S.C. 1701q] (as such section existed on the day before

the date of enactment of the Cranston-Gonzalez National

Affordable Housing Act [Nov. 28, 1990])."

[Pub. L. 105-276, title V, Sec. 514(c)(2), Oct. 21, 1998, 112

Stat. 2548, provided that: "Notwithstanding any other provision of

law (including subsection (f) of this section [set out as an

Effective and Termination Dates of 1996 Amendments note under

section 1437a of this title]), section 402(d)(4)(B) of The Balanced

Budget Downpayment Act, I [Pub. L. 104-99, set out above] (42

U.S.C. 1437a note) shall apply to fiscal year 1999 and

thereafter."]

[Section 402(d)(4)(B) of Pub. L. 104-99, set out above, effective

Jan. 26, 1996, only for fiscal years 1996, 1997, and 1998, and to

cease to be effective Oct. 21, 1998, see section 402(f) of Pub. L.

104-99, as amended, and section 514(f) of Pub. L. 105-276, set out

as Effective and Termination Dates of 1996 Amendments notes under

section 1437a of this title.]

COMMUNITY INVESTMENT DEMONSTRATION PROGRAM

Pub. L. 103-120, Sec. 6, Oct. 27, 1993, 107 Stat. 1148, as

amended by Pub. L. 104-316, title I, Sec. 122(j), Oct. 19, 1996,

110 Stat. 3837, provided that:

"(a) Demonstration Program. - The Secretary shall carry out a

demonstration program to attract pension fund investment in

affordable housing through the use of project-based rental

assistance under section 8 of the United States Housing Act of 1937

[42 U.S.C. 1437f].

"(b) Funding Requirements. - In carrying out this section, the

Secretary shall ensure that not less than 50 percent of the funds

appropriated for the demonstration program each year are used in

conjunction with the disposition of either -

"(1) multifamily properties owned by the Department; or

"(2) multifamily properties securing mortgages held by the

Department.

"(c) Contract Terms. -

"(1) In general. - Project-based assistance under this section

shall be provided pursuant to a contract entered into by the

Secretary and the owner of the eligible housing that -

"(A) provides assistance for a term of not less than 60

months and not greater than 180 months; and

"(B) provides for contract rents, to be determined by the

Secretary, which shall not exceed contract rents permitted

under section 8 of the United States Housing Act of 1937 [42

U.S.C. 1437f], taking into consideration any costs for the

construction, rehabilitation, or acquisition of the housing.

"(2) Amendment to section 203. - [Amended section 1701z-11 of

Title 12, Banks and Banking.]

"(d) Limitation. - (1) The Secretary may not provide (or make a

commitment to provide) more than 50 percent of the funding for

housing financed by any single pension fund, except that this

limitation shall not apply if the Secretary, after the end of the

6-month period beginning on the date notice is issued under

subsection (e) -

"(A) determines that -

"(i) there are no expressions of interest that are likely to

result in approvable applications in the reasonably foreseeable

future; or

"(ii) any such expressions of interest are not likely to use

all funding under this section; and

"(B) so informs the Committee on Banking, Finance and Urban

Affairs [now Committee on Financial Services] of the House of

Representatives and the Committee on Banking, Housing, and Urban

Affairs of the Senate.

"(2) If the Secretary determines that there are expressions of

interest referred to in paragraph (1)(A)(ii), the Secretary may

reserve funding sufficient in the Secretary's determination to fund

such applications and may use any remaining funding for other

pension funds in accordance with this section.

"(e) Implementation. - The Secretary shall by notice establish

such requirements as may be necessary to carry out the provisions

of this section. The notice shall take effect upon issuance.

"(f) Applicability of ERISA. - Notwithstanding section 514(d) of

the Employee Retirement Income Security Act of 1974 [29 U.S.C.

1144(d)], nothing in this section shall be construed to authorize

any action or failure to act that would constitute a violation of

such Act [29 U.S.C. 1001 et seq.].

"(g) Report. - Not later than 3 months after the last day of each

fiscal year, the Secretary shall submit to the Committee on

Banking, Finance and Urban Affairs [now Committee on Financial

Services] of the House of Representatives and the Committee on

Banking, Housing, and Urban Affairs of the Senate a report

summarizing the activities carried out under this section during

that fiscal year.

"(h) Establishment of Standards. - Mortgages secured by housing

assisted under this demonstration shall meet such standards

regarding financing and securitization as the Secretary may

establish.

"(i) Authorization of Appropriations. - There are authorized to

be appropriated $100,000,000 for fiscal year 1994 to carry out this

section.

"[(j) Redesignated (i).]

"(k) Termination Date. - The Secretary shall not enter into any

new commitment to provide assistance under this section after

September 30, 1998."

ADMINISTRATIVE FEES FOR CERTIFICATE AND HOUSING VOUCHER PROGRAMS

DURING FISCAL YEAR 1994

Pub. L. 103-120, Sec. 11(a), Oct. 27, 1993, 107 Stat. 1151,

provided that: "Notwithstanding the second sentence of section

8(q)(1) of the United States Housing Act of 1937 [42 U.S.C.

1437f(q)(1)], other applicable law, or any implementing regulations

and related requirements, the fee for the ongoing costs of

administering the certificate and housing voucher programs under

subsections (b) and (o) of section 8 of such Act during fiscal year

1994 shall be -

"(1) not less than a fee calculated in accordance with the fair

market rents for Federal fiscal year 1993; or

"(2) not more than -

"(A) a fee calculated in accordance with section 8(q) of such

Act, except that such fee shall not be in excess of 3.5 percent

above the fee calculated in accordance with paragraph (1); or

"(B) to the extent approved in an appropriation Act, a fee

calculated in accordance with such section 8(q)."

EFFECTIVENESS OF ASSISTANCE FOR PHA-OWNED UNITS

Section 150 of Pub. L. 102-550 provided that: "The amendments

made by section 548 of the Cranston-Gonzalez National Affordable

Housing Act [Pub. L. 101-625, amending this section] shall be

effective notwithstanding the absence of any regulations issued by

the Secretary of Housing and Urban Development."

MOVING TO OPPORTUNITY FOR FAIR HOUSING

Section 152 of Pub. L. 102-550, as amended by Pub. L. 103-120,

Sec. 3, Oct. 27, 1993, 107 Stat. 1148, which directed Secretary of

Housing and Urban Development to carry out demonstration program in

eligible cities to provide tenant-based assistance to very

low-income families with children to move out of areas of high

concentrations of persons living in poverty to areas with low

concentrations of such persons, required biennial report to

Congress evaluating effectiveness and final report not later than

Sept. 30, 2004, provided for increased funding under section

1437c(c) of this title to carry out demonstration, and authorized

implementation by notice of requirements necessary to carry out

program, was repealed by Pub. L. 105-276, title V, Sec. 550(f),

Oct. 21, 1998, 112 Stat. 2610.

DIRECTIVE TO FURTHER FAIR HOUSING OBJECTIVES UNDER CERTIFICATE AND

VOUCHER PROGRAMS

Section 153 of Pub. L. 102-550, which directed Secretary of

Housing and Urban Development, not later than 2 years after Oct.

28, 1992, to review and comment upon study prepared pursuant to

section 558(3) of Pub. L. 101-625, formerly set out as a note

below, to evaluate implementation and effects of existing

demonstration and judicially mandated programs, to assess factors

that might impede geographic dispersion of families receiving

section 8 certificates and vouchers, to identify and implement

administrative revisions that would enhance dispersion and tenant

choice, and to submit report to Congress describing findings,

actions taken, and recommendations, was repealed by Pub. L.

105-276, title V, Sec. 582(a)(3), Oct. 21, 1998, 112 Stat. 2643.

INAPPLICABILITY OF CERTAIN 1992 AMENDMENTS TO INDIAN PUBLIC HOUSING

Amendment by section 623(b) of Pub. L. 102-550 not applicable

with respect to lower income housing developed or operated pursuant

to contract between Secretary of Housing and Urban Development and

Indian housing authority, see section 626 of Pub. L. 102-550, set

out as a note under section 1437a of this title.

TERMINATION OF EXISTING HOUSING PROGRAMS

Except with respect to projects and programs for which binding

commitments have been entered into prior to Oct. 1, 1991, no new

grants or loans to be made after Oct. 1, 1991, under subsec. (e)(2)

of this section except for funds allocated under such section for

single room occupancy dwellings as authorized by subchapter IV

(Sec. 11361 et seq.) of chapter 119 of this title, see section

12839(a)(4) of this title.

PUBLIC HOUSING MIXED INCOME NEW COMMUNITIES STRATEGY DEMONSTRATION

Section 522 of Pub. L. 101-625, as amended by Pub. L. 104-66,

title I, Sec. 1071(b), Dec. 21, 1995, 109 Stat. 720; Pub. L.

104-99, title IV, Sec. 402(d)(6)(B), Jan. 26, 1996, 110 Stat. 43,

which directed Secretary of Housing and Urban Development to carry

out program to demonstrate effectiveness of promoting

revitalization of troubled urban communities through provision of

public housing in socioeconomically mixed settings, directed

appointment of coordinating committees to develop implementation

plans, set forth scope of program including provision of supportive

services, required report to Congress evaluating program's

effectiveness and including findings and recommendations, and

provided for termination of the program 10 years after Nov. 28,

1990, was repealed by Pub. L. 105-276, title V, Sec. 582(a)(10),

Oct. 21, 1998, 112 Stat. 2644.

STUDY OF PUBLIC HOUSING FUNDING SYSTEM

Section 524 of Pub. L. 101-625 directed Secretary of Housing and

Urban Development to conduct a study assessing one or more revised

methods of providing sufficient Federal funds to public housing

agencies for operation, maintenance and modernization of public

housing, which study was to include a comparison of existing

methods of funding in public housing with those used by Department

of Housing and Urban Development in housing assisted under this

section and a review of results of study entitled "Alternative

Operating Subsidies Systems for the Public Housing Program", with

an update of such study as necessary, and to submit a report to

Congress not later than 12 months after Nov. 28, 1990, detailing

the findings of this study.

STUDY OF PROSPECTIVE PAYMENT SYSTEM FOR PUBLIC HOUSING

Section 525 of Pub. L. 101-625 directed Secretary of Housing and

Urban Development to conduct a study assessing one or more revised

methods of providing Federal housing assistance through local

public housing agencies, examining methods of prospective payment,

including the conversion of PHA operating assistance,

modernization, and other Federal housing assistance to a schedule

of steady and predictable capitated Federal payments on behalf of

low income public housing tenants, and making specific assessments

and to submit a report to Congress not later than 12 months after

Nov. 28, 1990.

GAO STUDY OF ALTERNATIVES IN PUBLIC HOUSING DEVELOPMENT

Section 526 of Pub. L. 101-625 directed Comptroller General to

conduct a study assessing alternative methods of developing public

housing dwelling units, other than under the existing public

housing development program under this chapter, and submit a report

to Congress regarding the findings and conclusions of the study not

later than 12 months after Nov. 28, 1990.

PREFERENCE FOR NEW CONSTRUCTION UNDER THIS SECTION

Section 545(c) of Pub. L. 101-625, as amended by Pub. L. 104-99,

title IV, Sec. 402(d)(4)(A), Jan. 26, 1996, 110 Stat. 42, which

provided that, with respect to housing constructed or substantially

rehabilitated pursuant to assistance provided under subsec. (b)(2)

of this section, as such provisions existed before Oct. 1, 1983,

and projects financed under section 1701q of Title 12, Banks and

Banking, notwithstanding tenant selection criteria under contract

between Secretary and owner pursuant to first sentence of such

section, for at least 70 percent of units becoming available,

tenant selection criteria for such housing was to give preference

to families occupying substandard housing (including homeless

families and those living in shelters), paying more than 50 percent

of family income for rent, or involuntarily displaced, and system

of local preferences established under subsec. (d)(1)(A)(ii) of

this section by public housing agency was to apply to remaining

units that became available, to extent that such preferences were

applicable with respect to tenant eligibility limitations, was

repealed by Pub. L. 105-276, title V, Sec. 514(c)(1), Oct. 21,

1998, 112 Stat. 2548.

DOCUMENTATION OF EXCESSIVE RENT BURDENS

Section 550(b) of Pub. L. 101-625 provided that:

"(1) Data. - The Secretary of Housing and Urban Development shall

collect and maintain, in an automated system, data describing the

characteristics of families assisted under the certificate and

voucher programs established under section 8 of the United States

Housing Act of 1937 [42 U.S.C. 1437f], which data shall include the

share of family income paid toward rent.

"(2) Report. - Not less than annually, the Secretary shall submit

a report to the Congress setting forth, for each of the certificate

program and the voucher program, the percentage of families

participating in the program who are paying for rent more than the

amount determined under section 3(a)(1) of such Act [42 U.S.C.

1437a(a)(1)]. The report shall set forth data in appropriate

categories, such as various areas of the country, types and sizes

of public housing agencies, types of families, and types or

markets. The data shall identify the jurisdictions in which more

than 10 percent of the families assisted under section 8 of such

Act pay for rent more than the amount determined under section

3(a)(1) of such Act and the report shall include an examination of

whether the fair market rent for such areas is appropriate. The

report shall also include any recommendations of the Secretary for

legislative and administrative actions appropriate as a result of

analysis of the data.

"(3) Availability of data. - The Secretary shall make available

to each public housing agency administering assistance under the

certificate or voucher program any data maintained under this

subsection that relates to the public housing agency."

[For termination, effective May 15, 2000, of reporting provisions

in section 550(b)(2) of Pub. L. 101-625, set out above, see section

3003 of Pub. L. 104-66, as amended, set out as a note under section

1113 of Title 31, Money and Finance, and item 16 on page 103 of

House Document No. 103-7.]

INCOME ELIGIBILITY FOR TENANCY IN NEW CONSTRUCTION UNITS

Section 555 of Pub. L. 101-625 provided that: "Any dwelling units

in any housing constructed or substantially rehabilitated pursuant

to assistance provided under section 8(b)(2) of the United States

Housing Act of 1937 [42 U.S.C. 1437f(b)(2)], as such section

existed before October 1, 1983, and with a contract for assistance

under such section, shall be reserved for occupancy by low-income

families and very low-income families."

GAO STUDY REGARDING FAIR MARKET RENT CALCULATION

Section 558 of Pub. L. 101-625 directed Comptroller General to

conduct a study to examine fair market rentals under subsec. (c)(1)

of this section which are wholly contained within such market areas

and submit a report to Congress not later than 18 months after Nov.

28, 1990, regarding findings and conclusions.

STUDY OF UTILIZATION RATES

Section 559 of Pub. L. 101-625 directed Secretary of Housing and

Urban Development to conduct a study of reasons for success or

failure, within appropriate cities and localities, in utilizing

assistance made available for such areas under this section and

submit a report to Congress concerning this study not later than

the expiration of the 1-year period beginning on Nov. 28, 1990.

FEASIBILITY STUDY REGARDING INDIAN TRIBE ELIGIBILITY FOR VOUCHER

PROGRAM

Section 561 of Pub. L. 101-625 directed Secretary of Housing and

Urban Development to conduct a study to determine feasibility and

effectiveness of entering into contracts with Indian housing

authorities to provide voucher assistance under subsec. (o) of this

section and submit a report to Congress regarding findings and

conclusions not later than the expiration of the 1-year period

beginning on Nov. 28, 1990.

STUDY OF PRIVATE NONPROFIT INITIATIVES

Section 582 of Pub. L. 101-625 directed Secretary of Housing and

Urban Development to conduct a study to examine how private

nonprofit initiatives to provide low-income housing development in

local communities across the country have succeeded, with

particular emphasis on how Federal housing policy and tax

structures can best promote local private nonprofit organizations

involvement in low-income housing development, and submit a report

to Congress regarding findings not later than 1-year after Nov. 28,

1990.

PREFERENCES FOR NATIVE HAWAIIANS ON HAWAIIAN HOMELANDS UNDER HUD

PROGRAMS

Section 958 of Pub. L. 101-625, which directed Secretary of

Housing and Urban Development to provide preferences for housing

assistance programs to native Hawaiians in subsec. (a), described

assistance programs available in subsec. (b), authorized Secretary

to provide mortgage insurance in certain situations in subsec. (c),

and defined pertinent terms in subsec. (d), was repealed by Pub. L.

102-238, Sec. 5(b), Dec. 17, 1991, 105 Stat. 1910.

AUTHORIZATION FOR PROVISION OF ASSISTANCE TO PROGRAMS ADMINISTERED

BY STATE OF HAWAII UNDER ACT OF JULY 9, 1921

Section 962 of Pub. L. 101-625, as added by Pub. L. 102-238, Sec.

5(a), Dec. 17, 1991, 105 Stat. 1909, provided that:

"(a) Assistance Authorized. - The Secretary of Housing and Urban

Development is authorized to provide assistance, under any housing

assistance program administered by the Secretary, to the State of

Hawaii, for use by the State in meeting the responsibilities with

which it has been charged under the provisions of the Act of July

9, 1921 (42 Stat. 108) [formerly 48 U.S.C. 691-718].

"(b) Mortgage Insurance. -

"(1) In general. - Notwithstanding any other provision or

limitation of this Act [see Short Title note set out under

section 12701 of this title], or the National Housing Act [12

U.S.C. 1701 et seq.], including those relating to marketability

of title, the Secretary of Housing and Urban Development may

provide mortgage insurance covering any property on lands set

aside under the provisions of the Act of July 9, 1921 (42 Stat.

108), upon which there is or will be located a multifamily

residence, for which the Department of the Hawaiian Home Lands of

the State of Hawaii -

"(A) is the mortgagor or co-mortgagor;

"(B) guarantees in writing to reimburse the Secretary for any

mortgage insurance claim paid in connection with such property;

or

"(C) offers other security that is acceptable to the

Secretary, subject to appropriate conditions prescribed by the

Secretary.

"(2) Sale on default. - In the event of a default on a mortgage

insured pursuant to paragraph (1), the Department of Hawaiian

Home Lands of the State of Hawaii may sell the insured property

or housing unit to an eligible beneficiary as defined in the Act

of July 9, 1921 (42 Stat. 108)."

ANNUAL ADJUSTMENT FACTORS FOR RENTS UNDER LOWER-INCOME HOUSING

ASSISTANCE PROGRAM

Section 801(a), (b), (d), (e) of Pub. L. 101-235 provided that:

"(a) Effect of Prior Comparability Studies. -

"(1) In general. - In any case in which, in implementing

section 8(c)(2) of the United States Housing Act of 1937 [42

U.S.C. 1437f(c)(2)] -

"(A) the use of comparability studies by the Secretary of

Housing and Urban Development or the appropriate State agency

as an independent limitation on the amount of rental

adjustments resulting from the application of an annual

adjustment factor under such section has resulted in the

reduction of the maximum monthly rent for units covered by the

contract or the failure to increase such contract rent to the

full amount otherwise permitted under the annual adjustment

factor, or

"(B) an assistance contract requires a project owner to make

a request before becoming eligible for a rent adjustment under

the annual adjustment factor and the project owner certifies

that such a request was not made because of anticipated

negative adjustment to the project rents,

for fiscal year 1980, and annually thereafter until regulations

implementing this section take effect, rental adjustments shall

be calculated as an amount equal to the annual adjustment factor

multiplied by a figure equal to the contract rent minus the

amount of contract rent attributable to debt service. Upon the

request of the project owner, the Secretary shall pay to the

project owner the amount, if any, by which the total rental

adjustment calculated under the preceding sentence exceeds the

total adjustments the Secretary or appropriate State agency

actually approved, except that solely for purposes of calculating

retroactive payments under this subsection, in no event shall any

project owner be paid an amount less than 30 percent of a figure

equal to the aggregate of the annual adjustment factor multiplied

by the full contract rent for each year on or after fiscal year

1980, minus the sum of the rental payments the Secretary or

appropriate State agency actually approved for those years. The

method provided by this subsection shall be the exclusive method

by which retroactive payments, whether or not requested, may be

made for projects subject to this subsection for the period from

fiscal year 1980 until the regulations issued under subsection

(e) take effect. For purposes of this paragraph, 'debt service'

shall include interest, principal, and mortgage insurance premium

if any.

"(2) Applicability. -

"(A) In general. - Subsection (a) shall apply with respect to

any use of comparability studies referred to in such subsection

occurring before the effective date of the regulations issued

under subsection (e).

"(B) Final litigation. - Subsection (a) shall not apply to

any project with respect to which litigation regarding the

authority of the Secretary to use comparability studies to

limit rental adjustments under section 8(c)(2) of the United

States Housing Act of 1937 has resulted in a judgment before

the effective date of this Act [Dec. 15, 1989] that is final

and not appealable (including any settlement agreement).

"(b) 3-Year Payments. - The Secretary shall provide the amounts

under subsection (a) over the 3-year period beginning on the

effective date of the regulations issued under subsection (e). The

Secretary shall provide the payments authorized under subsection

(a) only to the extent approved in subsequent appropriations Acts.

There are authorized to be appropriated such sums as may be

necessary for this purpose.

"(d) Determination of Contract Rent. - (1) The Secretary shall

upon the request of the project owner, make a one-time

determination of the contract rent for each project owner referred

to in subsection (a). The contract rent shall be the greater of the

contract rent -

"(A) currently approved by the Secretary under section 8(c)(2)

of the United States Housing Act of 1937 [42 U.S.C. 1437f(c)(2)],

or

"(B) calculated in accordance with the first sentence of

subsection (a)(1).

"(2) All adjustments in contract rents under section 8(c)(2) of

the United States Housing Act of 1937, including adjustments

involving projects referred to in subsection (a), that occur

beginning with the first anniversary date of the contract after the

regulations issued under subsection (e) take effect shall be made

in accordance with the annual adjustment and comparability

provisions of sections 8(c)(2)(A) and 8(c)(2)(C) of such Act,

respectively, using the one-time contract rent determination under

paragraph (1).

"(e) Regulations. - The Secretary shall issue regulations to

carry out this section and the amendments made by this section

[amending this section], including the amendments made by

subsection (c) with regard to annual adjustment factors and

comparability studies. The Secretary shall issue such regulations

not later than the expiration of the 180-day period beginning on

the date of the enactment of this Act [Dec. 15, 1989]."

PROHIBITION OF REDUCTION OF CONTRACT RENTS; BUDGET COMPLIANCE

Section 1004(b) of Pub. L. 100-628 provided that: "During fiscal

year 1989, the amendment made by subsection (a)(2) [amending this

section] shall be effective only to such extent or in such amounts

as are provided in appropriation Acts. For purposes of section 202

of the Balanced Budget and Emergency Deficit Control Reaffirmation

Act of 1987 (Public Law 100-119) [2 U.S.C. 909], to the extent that

this section has the effect of transferring an outlay of the United

States from one fiscal year to an adjacent fiscal year, the

transfer is a necessary (but secondary) result of a significant

policy change."

PROJECT-BASED LOWER-INCOME HOUSING ASSISTANCE; IMPLEMENTATION OF

PROGRAM

Section 1005(a) of Pub. L. 100-628 provided that: "To implement

the amendment made by section 148 of the Housing and Community

Development Act of 1987 [Pub. L. 100-242, see 1988 Amendment note

above], the Secretary of Housing and Urban Development shall issue

regulations that take effect not later than 30 days after the date

of the enactment of this Act [Nov. 7, 1988]. Until the effective

date of the regulations, the Secretary of Housing and Urban

Development shall consider each application from a public housing

agency to attach a contract for assistance payments to a structure,

in accordance with the amendment made by such section 148 to

section 8(d)(2) of the United States Housing Act of 1937 (42 U.S.C.

1437f(d)(2)), and shall promptly approve such application if it

meets the requirements of such section 8(d)(2)."

PROJECT-BASED LOWER-INCOME HOUSING ASSISTANCE IN NEW CONSTRUCTION;

REGULATIONS IMPLEMENTING PROGRAM

Section 1005(b)(2) of Pub. L. 100-628 provided that: "To

implement the amendments made by this subsection [amending this

section], the Secretary of Housing and Urban Development shall

issue regulations that take effect not later than 90 days after the

date of the enactment of this Act [Nov. 7, 1988]."

USE OF FUNDS RECAPTURED FROM REFINANCING STATE AND LOCAL FINANCE

PROJECTS

Section 1012 of Pub. L. 100-628, as amended by Pub. L. 102-273,

Sec. 2(a), (c)(1), Apr. 21, 1992, 106 Stat. 113; Pub. L. 102-550,

title I, Sec. 163, Oct. 28, 1992, 106 Stat. 3722, provided that:

"(a) Definition of Qualified Project. - For purposes of this

section, the term 'qualified project' means any State financed

project or local government or local housing agency financed

project, that -

"(1) was -

"(A) provided a financial adjustment factor under section 8

of the United States Housing Act of 1937 [42 U.S.C. 1437f]; or

"(B) constructed or substantially rehabilitated pursuant to

assistance provided under a contract under section 8(b)(2) of

the United States Housing Act of 1937 (as in effect on

September 30, 1983) entered into during any of calendar years

1979 through 1984; and

"(2) is being refinanced.

"(b) Availability of Funds. - The Secretary shall make available

to the State housing finance agency in the State in which a

qualified project is located, or the local government or local

housing agency initiating the refinancing of the qualified project,

as applicable, an amount equal to 50 percent of the amounts

recaptured from the project (as determined by the Secretary on a

project-by-project basis). Notwithstanding any other provision of

law, such amounts shall be used only for providing decent, safe,

and sanitary housing affordable for very low-income families and

persons.

"(c) Applicability and Budget Compliance. -

"(1) Retroactivity. - This section shall apply to refinancings

of projects for which settlement occurred or occurs before, on,

or after the date of the enactment of the Housing and Community

Development Act of 1992 [Oct. 28, 1992], subject to the

provisions of paragraph (2).

"(2) Budget compliance. - This section shall apply only to the

extent or in such amounts as are provided in appropriation Acts."

[Section 2(b) of Pub. L. 102-273 provided that: "The amendments

made by subsection (a) [amending section 1012 of Pub. L. 100-628,

set out above] shall apply to any refinancing of a local government

or local housing agency financed project approved by the Secretary

of Housing and Urban Development for which settlement occurred

after January 1, 1992."]

PUBLIC HOUSING COMPREHENSIVE TRANSITION DEMONSTRATION

Section 126 of Pub. L. 100-242, which directed Secretary of

Housing and Urban Development to carry out program in 11 public

housing agencies to demonstrate effectiveness of providing services

to ensure transition of public housing residents to private

housing, set forth requirements of program, and required interim

report to Congress not later than 2 years after Feb. 5, 1988, and

final report not later than 60 days after termination of program 7

years after such date, was repealed by Pub. L. 105-276, title V,

Sec. 582(a)(8), Oct. 21, 1998, 112 Stat. 2644.

NONDISCRIMINATION AGAINST SECTION 8 CERTIFICATE HOLDERS AND VOUCHER

HOLDERS

Section 183(c) of Pub. L. 100-242, which prohibited owner of

subsidized project to refuse to lease dwelling unit to holder of

certificate of eligibility or voucher under this section, where

proximate cause of refusal was status of prospective tenant as

holder of such certificate or voucher, was repealed by Pub. L.

105-276, title V, Sec. 582(a)(2), Oct. 21, 1998, 112 Stat. 2643.

WITHDRAWAL BY OWNERS, DEVELOPERS, AND SPONSORS FROM PROGRAMS UNDER

THIS SECTION; SURVEY AND DETERMINATION OF NUMBER; NOTIFICATION OF

RENT INCREASES; REPORT TO CONGRESS; REGULATIONS TO PREVENT CONFLICT

OF INTEREST ON THE PART OF FEDERAL, STATE, AND LOCAL OFFICIALS;

RECOVERY OF LEGAL EXPENSES; CONTENTS OF ANNUAL REPORT

Section 326(b)-(d) of Pub. L. 97-35, as amended by Pub. L.

102-550, title I, Sec. 129(a), Oct. 28, 1992, 106 Stat. 3711; Pub.

L. 105-276, title V, Sec. 582(a)(4), Oct. 21, 1998, 112 Stat. 2643,

provided that:

"(b)[(1) Repealed. Pub. L. 105-276, title V, Sec. 582(a)(4), Oct.

21, 1998, 112 Stat. 2643.]

"(2) Not later than one year after the date of the enactment of

this Act [Aug. 13, 1981], the Secretary shall transmit to the

Congress a report indicating alternative methods which may be

utilized for recapturing the cost to the Federal Government of

front-end investment in those units which are removed from the

section 8 program.

"[(c) Repealed. Pub. L. 105-276, title V, Sec. 582(a)(4), Oct.

21, 1998, 112 Stat. 2643.]

"(d) Rental Assistance Fraud Recoveries. -

"(1) Authority to retain recovered amounts. - The Secretary of

Housing and Urban Development shall permit public housing

agencies administering the housing assistance payments program

under section 8 of the United States Housing Act of 1937 [42

U.S.C. 1437f] to retain, out of amounts obtained by the agencies

from tenants that are due as a result of fraud and abuse, an

amount (determined in accordance with regulations issued by the

Secretary) equal to the greater of -

"(A) 50 percent of the amount actually collected, or

"(B) the actual, reasonable, and necessary expenses related

to the collection, including costs of investigation, legal

fees, and collection agency fees.

"(2) Use. - Amounts retained by an agency shall be made

available for use in support of the affected program or project,

in accordance with regulations issued by the Secretary. Where 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.

"(3) Recovery. - Amounts may be recovered under this paragraph

-

"(A) by an agency through a lawsuit (including settlement of

the lawsuit) brought by the agency or through court-ordered

restitution pursuant to a criminal proceeding resulting from an

agency's investigation where the agency seeks prosecution of a

family or where an agency seeks prosecution of an owner; or

"(B) through administrative repayment agreements with a

family or owner entered into as a result of an administrative

grievance procedure conducted by an impartial decisionmaker in

accordance with section 6(k) of the United States Housing Act

of 1937 [42 U.S.C. 1437d(k)]."

[Section 129(b) of Pub. L. 102-550, provided that: "Subsection

(a) [amending section 326(d) of Pub. L. 97-35, set out above] shall

apply with respect to actions by public housing agencies initiated

on or after the date of the enactment of this Act [Oct. 28, 1992]."

STUDY BY SECRETARY CONCERNING FEASIBILITY OF MINIMUM RENT PAYMENT

REQUIREMENTS

Section 212 of Pub. L. 96-153 directed the Secretary of Housing

and Urban Development to conduct a study of the feasibility and

financial desirability of requiring minimum rent payments from

tenants in low-income housing assisted under this chapter, and to

submit a report to the Congress containing the findings and

conclusions of such study not later than ten days after the Budget

for fiscal year 1981 is transmitted pursuant to section 11 of

former Title 31, Money and Finance, and directed the Secretary of

Housing and Urban Development to conduct a study to provide

detailed comparisons between the rents paid by tenants occupying

low-income housing assisted under this chapter and the rents paid

by tenants at the same income level who are not in assisted housing

and to transmit a report on such study to the Congress not later

than Mar. 1, 1980.

STUDY OF ALTERNATIVE MEANS OF ENCOURAGING THE DEVELOPMENT OF

HOUSING

Section 208 of Pub. L. 95-557 directed that Secretary of Housing

and Urban Development conduct a study for purpose of examining

alternative means of encouraging development of housing to be

assisted under this section for occupancy by large families which

reside in areas with a low-vacancy rate in rental housing and

report to Congress no later than one year after Oct. 31, 1978, for

purpose of providing legislative recommendations with respect to

this study.

TAXATION OF INTEREST PAID ON OBLIGATIONS SECURED BY INSURED

MORTGAGE AND ISSUED BY PUBLIC AGENCY

Section 319(b) of Pub. L. 93-383, as amended by Pub. L. 99-514,

Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "With respect

to any obligation secured by a mortgage which is insured under

section 221(d)(3) of the National Housing Act [section 1715l(d)(3)

of Title 12, Banks and Banking] and issued by a public agency as

mortgagor in connection with the financing of a project assisted

under section 8 of the United States Housing Act of 1937 [this

section], the interest paid on such obligation shall be included in

gross income for purposes of chapter 1 of the Internal Revenue Code

of 1986 [formerly I.R.C. 1954] [chapter 1 of Title 26, Internal

Revenue Code]."

RENTAL OR INCOME CONTRIBUTIONS; USE OF SPECIAL SCHEDULES OF

REQUIRED PAYMENTS FOR PARTICIPANTS IN MUTUAL HELP PROJECTS

CONTRIBUTING LABOR, ETC.

Section 203 of Pub. L. 93-383 provided that: "The rental or

income contribution provisions of the United States Housing Act of

1937 [sections 1437 to 1437j of this title], as amended by section

201 of this Act, shall not preclude the use of special schedules of

required payments as approved by the Secretary for participants in

mutual help housing projects who contribute labor, land, or

materials to the development of such projects."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1396r-1a, 1436a, 1436d,

1437, 1437a, 1437c, 1437c-1, 1437d, 1437e, 1437g, 1437j, 1437m,

1437n, 1437p, 1437s, 1437t, 1437u, 1437v, 1437y, 1437z, 1437z-1,

1437z-5, 1437aaa, 1437aaa-2, 1437aaa-3, 1437bbb-2, 1437bbb-3,

1437bbb-4, 1439, 1472, 1490j, 1490m, 4822, 4851b, 4855, 5302, 5304,

8011, 8012, 8013, 11401, 11403e-1, 11404b, 11405b, 11406b, 11407,

11905, 12742, 12745, 12747, 12839, 12871, 12873, 12874, 12899d,

12908, 12909, 12910, 13603, 13611, 13613, 13614, 13615, 13616,

13617, 13619, 13641, 13664 of this title; title 12 sections

1701q-2, 1701s, 1701z-11, 1701z-12, 1701z-13, 1709, 1715l, 1715z-1,

1715z-1a, 1715z-1b, 1715z-1c, 1715z-6, 4105, 4109, 4110, 4111,

4112, 4113, 4114, 4116, 4119, 4125; title 26 sections 42, 142, 143,

1250; title 38 sections 2003, 2052; title 40 section 14503.

-FOOTNOTE-

(!1) So in original. Probably should be section "671".

(!2) So in original. No opening parenthesis was enacted.

(!3) So in original. Probably should be followed by a period.

(!4) See References in Text note below.

(!5) See References in Text note below.

-End-

-CITE-

42 USC Sec. 1437g 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437g. Public housing Capital and Operating Funds

-STATUTE-

(a) Merger into Capital Fund

Except as otherwise provided in the Quality Housing and Work

Responsibility Act of 1998, any assistance made available for

public housing under section 1437l of this title before October 1,

1999, shall be merged into the Capital Fund established under

subsection (d) of this section.

(b) Merger into Operating Fund

Except as otherwise provided in the Quality Housing and Work

Responsibility Act of 1998, any assistance made available for

public housing under this section before October 1, 1999, shall be

merged into the Operating Fund established under subsection (e) of

this section.

(c) Allocation amount

(1) In general

For fiscal year 2000 and each fiscal year thereafter, the

Secretary shall allocate amounts in the Capital Fund and

Operating Funds (!1) for assistance for public housing agencies

eligible for such assistance. The Secretary shall determine the

amount of the allocation for each eligible agency, which shall

be, for any fiscal year beginning after the effective date of the

formulas described in subsections (d)(2) and (e)(2) of this

section -

(A) for assistance from the Capital Fund, the amount

determined for the agency under the formula under subsection

(d)(2) of this section; and

(B) for assistance from the Operating Fund, the amount

determined for the agency under the formula under subsection

(e)(2) of this section.

(2) Funding

There are authorized to be appropriated for assistance for

public housing agencies under this section the following amounts:

(A) Capital Fund

For allocations of assistance from the Capital Fund,

$3,000,000,000 for fiscal year 1999, and such sums as may be

necessary for fiscal years 2000, 2001, 2002, and 2003.

(B) Operating Fund

For allocations of assistance from the Operating Fund,

$2,900,000,000 for fiscal year 1999, and such sums as may be

necessary for each of fiscal years 2000, 2001, 2002, and 2003.

(d) Capital Fund

(1) In general

The Secretary shall establish a Capital Fund for the purpose of

making assistance available to public housing agencies to carry

out capital and management activities, including -

(A) the development, financing, and modernization of public

housing projects, including the redesign, reconstruction, and

reconfiguration of public housing sites and buildings

(including accessibility improvements) and the development of

mixed-finance projects;

(B) vacancy reduction;

(C) addressing deferred maintenance needs and the replacement

of obsolete utility systems and dwelling equipment;

(D) planned code compliance;

(E) management improvements, including the establishment and

initial operation of computer centers in and around public

housing through a Neighborhood Networks initiative, for the

purpose of enhancing the self-sufficiency, employability, and

economic self-reliance of public housing residents by providing

them with onsite computer access and training resources;

(F) demolition and replacement;

(G) resident relocation;

(H) capital expenditures to facilitate programs to improve

the empowerment and economic self-sufficiency of public housing

residents and to improve resident participation;

(I) capital expenditures to improve the security and safety

of residents; and

(J) homeownership activities, including programs under

section 1437z-4 of this title.

(2) Formula

The Secretary shall develop a formula for determining the

amount of assistance provided to public housing agencies from the

Capital Fund for a fiscal year, which shall include a mechanism

to reward performance. The formula may take into account such

factors as -

(A) the number of public housing dwelling units owned,

assisted, or operated by the public housing agency, the

characteristics and locations of the projects, and the

characteristics of the families served and to be served

(including the incomes of the families);

(B) the need of the public housing agency to carry out

rehabilitation and modernization activities, replacement

housing, and reconstruction, construction, and demolition

activities related to public housing dwelling units owned,

assisted, or operated by the public housing agency, including

backlog and projected future needs of the agency;

(C) the cost of constructing and rehabilitating property in

the area;

(D) the need of the public housing agency to carry out

activities that provide a safe and secure environment in public

housing units owned, assisted, or operated by the public

housing agency;

(E) any record by the public housing agency of exemplary

performance in the operation of public housing, as indicated by

the system of performance indicators established pursuant to

section 1437d(j) of this title; and

(F) any other factors that the Secretary determines to be

appropriate.

(3) Conditions on use for development and modernization

(A) Development

Except as otherwise provided in this chapter, any public

housing developed using amounts provided under this subsection,

or under section 1437l of this title as in effect before the

effective date under section 503(a) of the Quality Housing and

Work Responsibility Act of 1998, shall be operated under the

terms and conditions applicable to public housing during the

40-year period that begins on the date on which the project (or

stage of the project) becomes available for occupancy.

(B) Modernization

Except as otherwise provided in this chapter, any public

housing or portion thereof that is modernized using amounts

provided under this subsection or under section 1437l of this

title (as in effect before the effective date under section

503(a) of the Quality Housing and Work Responsibility Act of

1998) shall be maintained and operated under the terms and

conditions applicable to public housing during the 20-year

period that begins on the latest date on which modernization is

completed.

(C) Applicability of latest expiration date

Public housing subject to this paragraph or to any other

provision of law mandating the operation of the housing as

public housing or under the terms and conditions applicable to

public housing for a specified length of time, shall be

maintained and operated as required until the latest such

expiration date.

(e) Operating Fund

(1) In general

The Secretary shall establish an Operating Fund for the purpose

of making assistance available to public housing agencies for the

operation and management of public housing, including -

(A) procedures and systems to maintain and ensure the

efficient management and operation of public housing units

(including amounts sufficient to pay for the reasonable costs

of review by an independent auditor of the documentation or

other information maintained pursuant to section 1437d(j)(6) of

this title by a public housing agency or resident management

corporation to substantiate the performance of that agency or

corporation);

(B) activities to ensure a program of routine preventative

maintenance;

(C) anticrime and antidrug activities, including the costs of

providing adequate security for public housing residents,

including above-baseline police service agreements;

(D) activities related to the provision of services,

including service coordinators for elderly persons or persons

with disabilities;

(E) activities to provide for management and participation in

the management and policymaking of public housing by public

housing residents;

(F) the costs of insurance;

(G) the energy costs associated with public housing units,

with an emphasis on energy conservation;

(H) the costs of administering a public housing work program

under section 1437j of this title, including the costs of any

related insurance needs;

(I) the costs of repaying, together with rent contributions,

debt incurred to finance the rehabilitation and development of

public housing units, which shall be subject to such reasonable

requirements as the Secretary may establish;

(J) the costs associated with the operation and management of

mixed finance projects, to the extent appropriate; and

(K) the costs of operating computer centers in public housing

through a Neighborhood Networks initiative described in

subsection (d)(1)(E) of this section, and of activities related

to that initiative.

(2) Formula

(A) In general

The Secretary shall establish a formula for determining the

amount of assistance provided to public housing agencies from

the Operating Fund for a fiscal year. The formula may take into

account -

(i) standards for the costs of operating and reasonable

projections of income, taking into account the

characteristics and locations of the public housing projects

and characteristics of the families served and to be served

(including the incomes of the families), or the costs of

providing comparable services as determined in accordance

with criteria or a formula representing the operations of a

prototype well-managed public housing project;

(ii) the number of public housing dwelling units owned,

assisted, or operated by the public housing agency;

(iii) the number of public housing dwelling units owned,

assisted, or operated by the public housing agency that are

chronically vacant and the amount of assistance appropriate

for those units;

(iv) to the extent quantifiable, the extent to which the

public housing agency provides programs and activities

designed to promote the economic self-sufficiency and

management skills of public housing residents;

(v) the need of the public housing agency to carry out

anti-crime and anti-drug activities, including providing

adequate security for public housing residents;

(vi) the amount of public housing rental income foregone by

the public housing agency as a result of escrow savings

accounts under section 1437u(d)(2) of this title for families

participating in a family self-sufficiency program of the

agency under such section 1437u of this title; and

(vii) any other factors that the Secretary determines to be

appropriate.

(B) Incentive to increase certain rental income

The formula shall provide an incentive to encourage public

housing agencies to facilitate increases in earned income by

families in occupancy. Any such incentive shall provide that

the agency shall benefit from increases in such rental income

and that such amounts accruing to the agency pursuant to such

benefit may be used only for low-income housing or to benefit

the residents of the public housing agency.

(C) Treatment of savings

The treatment of utility and waste management costs under the

formula shall provide that a public housing agency shall

receive the full financial benefit from any reduction in the

cost of utilities or waste management resulting from any

contract with a third party to undertake energy conservation

improvements in one or more of its public housing projects.

(3) Condition on use

No portion of any public housing project operated using amounts

provided under this subsection, or under this section as in

effect before the effective date under section 503(a) of the

Quality Housing and Work Responsibility Act of 1998, may be

disposed of before the expiration of the 10-year period beginning

upon the conclusion of the fiscal year for which such amounts

were provided, except as otherwise provided in this chapter.

(f) Negotiated rulemaking procedure

The formulas under subsections (d)(2) and (e)(2) of this section

shall be developed according to procedures for issuance of

regulations under the negotiated rulemaking procedure under

subchapter III of chapter 5 of title 5.

(g) Limitations on use of funds

(1) Flexibility for Capital Fund amounts

Of any amounts appropriated for fiscal year 2000 or any fiscal

year thereafter that are allocated for fiscal year 2000 or any

fiscal year thereafter from the Capital Fund for any public

housing agency, the agency may use not more than 20 percent for

activities that are eligible under subsection (e) of this section

for assistance with amounts from the Operating Fund, but only if

the public housing agency plan for the agency provides for such

use.

(2) Full flexibility for small PHAs

Of any amounts allocated for any fiscal year for any public

housing agency that owns or operates less than 250 public housing

dwelling units, is not designated pursuant to section 1437d(j)(2)

of this title as a troubled public housing agency, and (in the

determination of the Secretary) is operating and maintaining its

public housing in a safe, clean, and healthy condition, the

agency may use any such amounts for any eligible activities under

subsections (d)(1) and (e)(1) of this section, regardless of the

fund from which the amounts were allocated and provided. This

subsection shall take effect on October 21, 1998.

(3) Limitation on new construction

(A) In general

Except as provided in subparagraphs (B) and (C), a public

housing agency may not use any of the amounts allocated for the

agency from the Capital Fund or Operating Fund for the purpose

of constructing any public housing unit, if such construction

would result in a net increase from the number of public

housing units owned, assisted, or operated by the public

housing agency on October 1, 1999, including any public housing

units demolished as part of any revitalization effort.

(B) Exception regarding use of assistance

A public housing agency may use amounts allocated for the

agency from the Capital Fund or Operating Fund for the

construction and operation of housing units that are available

and affordable to low-income families in excess of the

limitations on new construction set forth in subparagraph (A),

but the formulas established under subsections (d)(2) and

(e)(2) of this section shall not provide additional funding for

the specific purpose of allowing construction and operation of

housing in excess of those limitations (except to the extent

provided in subparagraph (C)).

(C) Exception regarding formulas

Subject to reasonable limitations set by the Secretary, the

formulas established under subsections (d)(2) and (e)(2) of

this section may provide additional funding for the operation

and modernization costs (but not the initial development costs)

of housing in excess of amounts otherwise permitted under this

paragraph, and such amounts may be so used, if -

(i) such units are part of a mixed-finance project or

otherwise leverage significant additional private or public

investment; and

(ii) the estimated cost of the useful life of the project

is less than the estimated cost of providing tenant-based

assistance under section 1437f(o) of this title for the same

period of time.

(h) Technical assistance

To the extent amounts are provided in advance in appropriations

Acts, the Secretary may make grants or enter into contracts or

cooperative agreements in accordance with this subsection for

purposes of providing, either directly or indirectly -

(1) technical assistance to public housing agencies, resident

councils, resident organizations, and resident management

corporations, including assistance relating to monitoring and

inspections;

(2) training for public housing agency employees and residents;

(3) data collection and analysis;

(4) training, technical assistance, and education to public

housing agencies that are -

(A) at risk of being designated as troubled under section

1437d(j) of this title, to assist such agencies from being so

designated; and

(B) designated as troubled under section 1437d(j) of this

title, to assist such agencies in achieving the removal of that

designation;

(5) contract expertise;

(6) training and technical assistance to assist in the

oversight and management of public housing or tenant-based

assistance;

(7) clearinghouse services in furtherance of the goals and

activities of this subsection; and

(8) assistance in connection with the establishment and

operation of computer centers in public housing through a

Neighborhood Networks initiative described in subsection

(d)(1)(E) of this section.

As used in this subsection, the terms "training" and "technical

assistance" shall include training or technical assistance and the

cost of necessary travel for participants in such training or

technical assistance, by or to officials and employees of the

Department and of public housing agencies, and to residents and to

other eligible grantees.

(i) Eligibility of units acquired from proceeds of sales under

demolition or disposition plan

If a public housing agency uses proceeds from the sale of units

under a homeownership program in accordance with section 1437z-4 of

this title to acquire additional units to be sold to low-income

families, the additional units shall be counted as public housing

for purposes of determining the amount of the allocation to the

agency under this section until sale by the agency, but in no case

longer than 5 years.

(j) Penalty for slow expenditure of capital funds

(1) Obligation of amounts

Except as provided in paragraph (4) and subject to paragraph

(2), a public housing agency shall obligate any assistance

received under this section not later than 24 months after, as

applicable -

(A) the date on which the funds become available to the

agency for obligation in the case of modernization; or

(B) the date on which the agency accumulates adequate funds

to undertake modernization, substantial rehabilitation, or new

construction of units.

(2) Extension of time period for obligation

The Secretary -

(A) may, extend the time period under paragraph (1) for a

public housing agency, for such period as the Secretary

determines to be necessary, if the Secretary determines that

the failure of the agency to obligate assistance in a timely

manner is attributable to -

(i) litigation;

(ii) obtaining approvals of the Federal Government or a

State or local government;

(iii) complying with environmental assessment and abatement

requirements;

(iv) relocating residents;

(v) an event beyond the control of the public housing

agency; or

(vi) any other reason established by the Secretary by

notice published in the Federal Register;

(B) shall disregard the requirements of paragraph (1) with

respect to any unobligated amounts made available to a public

housing agency, to the extent that the total of such amounts

does not exceed 10 percent of the original amount made

available to the public housing agency; and

(C) may, with the prior approval of the Secretary, extend the

time period under paragraph (1), for an additional period not

to exceed 12 months, based on -

(i) the size of the public housing agency;

(ii) the complexity of capital program of the public

housing agency;

(iii) any limitation on the ability of the public housing

agency to obligate the amounts allocated for the agency from

the Capital Fund in a timely manner as a result of State or

local law; or

(iv) such other factors as the Secretary determines to be

relevant.

(3) Effect of failure to comply

(A) Prohibition of new assistance

A public housing agency shall not be awarded assistance under

this section for any month during any fiscal year in which the

public housing agency has funds unobligated in violation of

paragraph (1) or (2).

(B) Withholding of assistance

During any fiscal year described in subparagraph (A), the

Secretary shall withhold all assistance that would otherwise be

provided to the public housing agency. If the public housing

agency cures its failure to comply during the year, it shall be

provided with the share attributable to the months remaining in

the year.

(C) Redistribution

The total amount of any funds not provided public housing

agencies by operation of this paragraph shall be allocated for

agencies determined under section 1437d(j) of this title to be

high-performing.

(4) Exception to obligation requirements

(A) In general

Subject to subparagraph (B), if the Secretary has consented,

before the effective date under section 503(a) of the Quality

Housing and Work Responsibility Act of 1998, to an obligation

period for any agency longer than provided under paragraph (1),

a public housing agency that obligates its funds before the

expiration of that period shall not be considered to be in

violation of paragraph (1).

(B) Prior fiscal years

Notwithstanding subparagraph (A), any funds appropriated to a

public housing agency for fiscal year 1997 or prior fiscal

years shall be fully obligated by the public housing agency not

later than September 30, 1999.

(5) Expenditure of amounts

(A) In general

A public housing agency shall spend any assistance received

under this section not later than 4 years (plus the period of

any extension approved by the Secretary under paragraph (2))

after the date on which funds become available to the agency

for obligation.

(B) Enforcement

The Secretary shall enforce the requirement of subparagraph

(A) through default remedies up to and including withdrawal of

the funding.

(6) Right of recapture

Any obligation entered into by a public housing agency shall be

subject to the right of the Secretary to recapture the obligated

amounts for violation by the public housing agency of the

requirements of this subsection.

(k) Emergency reserve and use of amounts

(1) Set-asides

In each fiscal year after fiscal year 1999, the Secretary shall

set aside, for use in accordance with this subsection, not more

than 2 percent of the total amount made available to carry out

this section for such fiscal year. In addition to amounts set

aside under the preceding sentence, in each fiscal year the

Secretary may set from the total amount made available to carry

out this section for such fiscal year not more than $20,000,000

for the Operation Safe Home program administered by the Office of

the Inspector General of the Department of Housing and Urban

Development, for law enforcement efforts to combat violent crime

on or near the premises of public and federally assisted housing.

(2) Use of funds

Amounts set aside under paragraph (1) shall be available to the

Secretary for use for assistance, as provided in paragraph (3),

in connection with -

(A) emergencies and other disasters; and

(C) (!2) housing needs resulting from any settlement of

litigation; and

(3) Eligible uses

In carrying out this subsection, the Secretary may use amounts

set aside under this subsection to provide -

(A) assistance for any eligible use under the Operating Fund

or the Capital Fund established by this section; or

(B) tenant-based assistance in accordance with section 1437f

of this title.

(4) Limitation

With respect to any fiscal year, the Secretary may carry over

not more than a total of $25,000,000 in unobligated amounts set

aside under this subsection for use in connection with the

activities described in paragraph (2) during the succeeding

fiscal year.

(5) Publication

The Secretary shall publish the use of any amounts allocated

under this subsection relating to emergencies (other than

disasters and housing needs resulting from any settlement of

litigation) in the Federal Register.

(l) Treatment of nonrental income

A public housing agency that receives income from nonrental

sources (as determined by the Secretary) may retain and use such

amounts without any decrease in the amounts received under this

section from the Capital or Operating Fund. Any such nonrental

amounts retained shall be used only for low-income housing or to

benefit the residents assisted by the public housing agency.

(m) Provision of only capital or operating assistance

(1) Authority

In appropriate circumstances, as determined by the Secretary, a

public housing agency may commit capital assistance only, or

operating assistance only, for public housing units, which

assistance shall be subject to all of the requirements applicable

to public housing except as otherwise provided in this

subsection.

(2) Exemptions

In the case of any public housing unit assisted pursuant to the

authority under paragraph (1), the Secretary may, by regulation,

reduce the period under subsection (d)(3) or (e)(3) of this

section, as applicable, during which such units must be operated

under requirements applicable to public housing. In cases in

which there is commitment of operating assistance but no

commitment of capital assistance, the Secretary may make section

8 [42 U.S.C. 1437f] requirements applicable, as appropriate, by

regulation.

(n) Treatment of public housing

(1) Certain State and city funded housing

(A) In general

Notwithstanding any other provision of this section -

(i) for purposes of determining the allocations from the

Operating and Capital Funds pursuant to the formulas under

subsections (d)(2) and (e)(2) of this section and determining

assistance pursuant to section 519(e) of the Quality Housing

and Work Responsibility Act of 1998 and under section 1437g

or 1437l of this title (as in effect before October 21,

1998), for any period before the implementation of such

formulas, the Secretary shall deem any covered locally

developed public housing units as public housing units

developed under this subchapter and such units shall be

eligible for such assistance; and

(ii) assistance provided under this section, under such

section 518(d)(3),(!3) or under such section 1437g or 1437l

of this title to any public housing agency may be used with

respect to any covered locally developed public housing

units.

(B) Covered units

For purposes of this paragraph, the term "covered locally

developed public housing units" means -

(i) not more than 7,000 public housing units developed

pursuant to laws of the State of New York and that received

debt service and operating subsidies pursuant to such laws;

and

(ii) not more than 5,000 dwelling units developed pursuant

to section 34 of chapter 121B of the General Laws of the

State of Massachusetts.

(2) Reduction of asthma incidence

Notwithstanding any other provision of this section, the New

York City Housing Authority may, in its sole discretion, from

amounts provided from the Operating and Capital Funds, or from

amounts provided for public housing before amounts are made

available from such Funds, use not more than exceeding (!4)

$500,000 per year for the purpose of initiating, expanding or

continuing a program for the reduction of the incidence of asthma

among residents. The Secretary shall consult with the

Administrator of the Environmental Protection Agency and the

Secretary of Health and Human Services to identify and consider

sources of funding for the reduction of the incidence of asthma

among recipients of assistance under this subchapter.

(3) Services for elderly residents

Notwithstanding any other provision of this section, the New

York City Housing Authority may, in its sole discretion, from

amounts provided from the Operating and Capital Funds, or from

amounts provided for public housing before the amounts are made

available from such Funds, use not more than $600,000 per year

for the purpose of developing a comprehensive plan to address the

need for services for elderly residents. Such plan may be

developed by a partnership created by such Housing Authority and

may include the creation of a model project for assisted living

at one or more developments. The model project may provide for

contracting with private parties for the delivery of services.

(4) Effective date

This subsection shall apply to fiscal year 1999 and each fiscal

year thereafter.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 9, as added Pub. L. 93-383,

title II, Sec. 201(a), Aug. 22, 1974, 88 Stat. 666; amended Pub. L.

94-375, Sec. 2(c), Aug. 3, 1976, 90 Stat. 1068; Pub. L. 95-24,

title I, Sec. 101(b), Apr. 30, 1977, 91 Stat. 55; Pub. L. 95-128,

title II, Sec. 201(f), Oct. 12, 1977, 91 Stat. 1129; Pub. L.

95-557, title II, Sec. 206(g), Oct. 31, 1978, 92 Stat. 2093; Pub.

L. 96-153, title II, Secs. 201(c), 207, 211(a), Dec. 21, 1979, 93

Stat. 1106, 1109, 1110; Pub. L. 96-399, title II, Sec. 201(b), (d),

Oct. 8, 1980, 94 Stat. 1625; Pub. L. 97-35, title III, Secs.

321(d), 322(c), Aug. 13, 1981, 95 Stat. 399, 402; Pub. L. 98-181,

title II, Sec. 212, Nov. 30, 1983, 97 Stat. 1184; Pub. L. 99-272,

title III, Sec. 3003, Apr. 7, 1986, 100 Stat. 102; Pub. L. 100-242,

title I, Secs. 112(b)(4), 118, Feb. 5, 1988, 101 Stat. 1824, 1828;

renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102

Stat. 681; Pub. L. 101-625, title V, Secs. 507, 572(2), title VIII,

Sec. 802(p), Nov. 28, 1990, 104 Stat. 4186, 4236, 4317; Pub. L.

102-550, title I, Sec. 114, title VI, Sec. 673, Oct. 28, 1992, 106

Stat. 3691, 3827; Pub. L. 103-233, title III, Sec. 304, Apr. 11,

1994, 108 Stat. 370; Pub. L. 104-134, title I, Sec. 101(e) [title

II, Sec. 218], Apr. 26, 1996, 110 Stat. 1321-257, 1321-290;

renumbered title I, Pub. L. 104-140, Sec. 1(a), May 2, 1996, 110

Stat. 1327; Pub. L. 104-330, title V, Sec. 501(b)(5), Oct. 26,

1996, 110 Stat. 4042; Pub. L. 105-276, title II, Sec. 210, title V,

Sec. 519(a), Oct. 21, 1998, 112 Stat. 2485, 2551; Pub. L. 106-377,

Sec. 1(a)(1) [title II, Sec. 214(a)], Oct. 27, 2000, 114 Stat.

1441, 1441A-27.)

-REFTEXT-

REFERENCES IN TEXT

The Quality Housing and Work Responsibility Act of 1998, referred

to in subsecs. (a) and (b), is title V of Pub. L. 105-276, Oct. 21,

1998, 112 Stat. 2518. Section 503(a) of the Act is set out as an

Effective Date of 1998 Amendment note under section 1437 of this

title. Section 519(e) of the Act is set out as a note below. For

complete classification of this Act to the Code, see Short Title of

1998 Amendment note set out under section 1437 of this title and

Tables.

Section 1437l of this title, referred to in subsecs. (a),

(d)(3)(A), (B), and (n)(1)(A)(i), was repealed by Pub. L. 105-276,

title V, Sec. 522(a), Oct. 21, 1998, 112 Stat. 2564.

-COD-

CODIFICATION

October 21, 1998, referred to in subsec. (n)(1)(A)(i), was in the

original "the date of the enactment of this Act", which has been

translated as referring to the date of enactment of the Quality

Housing and Work Responsibility Act of 1998, title V of Pub. L.

105-276, which amended this section generally, to reflect the

probable intent of Congress.

-MISC1-

PRIOR PROVISIONS

A prior section 9 of act Sept. 1, 1937, ch. 896, 50 Stat. 891, as

amended, authorized loans for low-rent housing and slum clearance

projects and was classified to section 1409 of this title, prior to

the general revision of this chapter by Pub. L. 93-383. Similar

provisions are contained in section 1437b of this title.

AMENDMENTS

2000 - Subsec. (d)(1)(E). Pub. L. 106-377, Sec. 1(a)(1) [title

II, Sec. 214(a)(1)], inserted before semicolon ", including the

establishment and initial operation of computer centers in and

around public housing through a Neighborhood Networks initiative,

for the purpose of enhancing the self-sufficiency, employability,

and economic self-reliance of public housing residents by providing

them with onsite computer access and training resources".

Subsec. (e)(1)(K). Pub. L. 106-377, Sec. 1(a)(1) [title II, Sec.

214(a)(2)], added subpar. (K).

Subsec. (h)(8). Pub. L. 106-377, Sec. 1(a)(1) [title II, Sec.

214(a)(3)], added par. (8).

1998 - Pub. L. 105-276, Sec. 519(a), amended section generally,

substituting present provisions for provisions which had: in

subsec. (a), authorized annual contributions for operation of

low-income housing, and provided for determination of the amounts

and use of those contributions, contract authorization, standards

for payments, necessity of contribution contracts, performance

funding system, and audits; in subsec. (b), set forth limitation on

amount of aggregate rentals paid by families residing in dwelling

units receiving annual contributions; in subsec. (c), authorized

appropriations for fiscal years 1993 and 1994; in subsec. (d),

required distribution of remaining appropriated funds to projects

incurring excessive costs; and in subsec. (e), set forth time of

payment of assistance to public housing agency.

Subsec. (a)(3)(A). Pub. L. 105-276, Sec. 210, inserted after

third sentence "Notwithstanding the preceding sentences, the

Secretary may revise the performance funding system in a manner

that takes into account equity among public housing agencies and

that includes appropriate incentives for sound management." and, in

last sentence, inserted ", or any substantial change under the

preceding sentence," after "vacant public housing units".

1996 - Subsec. (a)(1)(A). Pub. L. 104-330, in second sentence,

inserted "and" after comma at end of cl. (i), struck out ", and"

after "reserve funds" in cl. (ii), and struck out cl. (iii) which

read as follows: "with respect to housing projects developed under

the Indian and Alaskan Native housing program assisted under this

chapter, to provide funds (in addition to any other operating costs

contributions approved by the Secretary under this section) as

determined by the Secretary to be required to cover the

administrative costs to an Indian housing authority during the

development period of a project approved pursuant to section 1437c

of this title and until such time as the project is occupied".

Subsec. (a)(3)(B)(i). Pub. L. 104-134 struck out "for a period

not to exceed 6 years" after "with the public housing agency".

1994 - Subsec. (a)(4). Pub. L. 103-233 added par. (4).

1992 - Subsec. (a)(1)(B). Pub. L. 102-550, Sec. 673, designated

existing provisions as cl. (i), redesignated former cls. (i) and

(ii) as subcls. (I) and (II), respectively, substituted "this

clause" for "this subparagraph", inserted reference to section 8011

of this title and a period after "section 8013 of this title", and

added cl. (ii).

Subsec. (a)(3)(A). Pub. L. 102-550, Sec. 114(b), inserted at end

"Notwithstanding sections 583(a) and 585(a) of title 5 (as added by

section 3(a) of the Negotiated Rulemaking Act of 1990), any

proposed regulation providing for amendment, alteration,

adjustment, or other change to the performance funding system

relating to vacant public housing units shall be issued pursuant to

a negotiated rulemaking procedure under subchapter IV of chapter 5

of such title (as added by section 3(a) of the Negotiated

Rulemaking Act of 1990), and the Secretary shall establish a

negotiated rulemaking committee for development of any such

proposed regulations."

Subsec. (a)(3)(B)(i). Pub. L. 102-550, Sec. 114(c), inserted

before semicolon at end ", and in subsequent years, if the energy

savings are cost-effective, the Secretary may continue the sharing

arrangement with the public housing agency for a period not to

exceed 6 years".

Subsec. (c). Pub. L. 102-550, Sec. 114(a), amended subsec. (c)

generally. Prior to amendment, subsec. (c) read as follows: "There

are authorized to be appropriated for purposes of providing annual

contributions under this section $2,000,000,000 for fiscal year

1991 and $2,086,000,000 in fiscal year 1992."

1990 - Subsec. (a)(1). Pub. L. 101-625, Sec. 572(2), substituted

"low-income housing" for "lower income housing" wherever appearing.

Pub. L. 101-625, Sec. 507(b)(1), designated existing provisions

as subpar. (A), redesignated former cls. (A) to (C) as cls. (i) to

(iii), respectively, and added subpar. (B).

Subsec. (a)(2). Pub. L. 101-625, Sec. 572(2), substituted

"low-income housing" for "lower income housing" wherever appearing.

Subsec. (a)(3)(A). Pub. L. 101-625, Sec. 507(b)(2), inserted

after first comma "(except for payments under paragraph (1)(B))".

Subsec. (a)(3)(B)(v). Pub. L. 101-625, Sec. 802(p), added cl.

(v).

Subsec. (c). Pub. L. 101-625, Sec. 507(a), amended subsec. (c)

generally. Prior to amendment, subsec. (c) read as follows: "There

are authorized to be appropriated for purposes of providing annual

contributions under this section $1,500,000,000 for fiscal year

1988 and $1,530,000,000 for fiscal year 1989."

Subsec. (d). Pub. L. 101-625, Sec. 572(2), substituted

"low-income housing" for "lower income housing".

1988 - Subsec. (a)(1). Pub. L. 100-242, Sec. 118(a)(1), struck

out last sentence directing Secretary to establish standards for

costs of operation and reasonable projections of income, for

purposes of making payments under this section.

Pub. L. 100-242, Sec. 118(d), inserted at end "If the Secretary

determines that a public housing agency has failed to take the

actions required to submit an acceptable audit on a timely basis in

accordance with chapter 75 of title 31, the Secretary may arrange

for, and pay the costs of, the audit. In such circumstances, the

Secretary may withhold, from assistance otherwise payable to the

agency under this section, amounts sufficient to pay for the

reasonable costs of conducting an acceptable audit, including, when

appropriate, the reasonable costs of accounting services necessary

to place the agency's books and records in auditable condition."

Subsec. (a)(2). Pub. L. 100-242, Sec. 112(b)(4), substituted "one

developed pursuant to a contributions contract authorized by

section 1437c" for "being assisted by an annual contributions

contract authorized by section 1437c(c)" and "any such" for "any

such annual".

Subsec. (a)(3). Pub. L. 100-242, Sec. 118(a)(2), added par. (3).

Subsec. (c). Pub. L. 100-242, Sec. 118(b), amended subsec. (c)

generally, substituting provisions authorizing appropriations under

this section for fiscal years 1988 and 1989 for provisions

authorizing appropriations for the period beginning on or after

July 1, 1975, through the period beginning on or after Oct. 1,

1985.

Subsec. (e). Pub. L. 100-242, Sec. 118(c), added subsec. (e).

1986 - Subsec. (c). Pub. L. 99-272 struck out "and by" after

"1983," and inserted ", and not to exceed $1,279,000,000 on or

after October 1, 1985" after "1984".

1983 - Subsec. (c). Pub. L. 98-181 substituted "October 1, 1980,

and" for "October 1, 1980," and authorized appropriations of not to

exceed $1,500,000,000 on or after Oct. 1, 1983, and of such sums as

may be necessary on or after Oct. 1, 1984.

1981 - Subsec. (a). Pub. L. 97-35, Sec. 322(c), substituted

reference to lower income for reference to low-income wherever

appearing.

Subsec. (c). Pub. L. 97-35, Sec. 321(d), inserted provisions

respecting authorization on or after Oct. 1, 1981.

Subsec. (d). Pub. L. 97-35, Sec. 322(c), substituted reference to

lower income for reference to low-income.

1980 - Subsec. (a)(1)(C). Pub. L. 96-399, Sec. 201(d), added cl.

(C).

Subsec. (c). Pub. L. 96-399, Sec. 201(b), authorized

appropriation of not to exceed $826,000,000 on or after Oct. 1,

1980.

1979 - Subsec. (a). Pub. L. 96-153, Sec. 211(a), designated

existing provisions as par. (1) and cls. (1) and (2) thereof as (A)

and (B), inserted provisions that such contract shall provide that

no disposition of low-income housing project, with respect to which

the contract is entered into, shall occur during and for ten years

after the period when contributions were made pursuant to such

contract unless approved by the Secretary, and added par. (2).

Subsec. (c). Pub. L. 96-153, Sec. 201(c), authorized

appropriation for annual contributions of $741,500,000 on or after

Oct. 1, 1979.

Subsec. (d). Pub. L. 96-153, Sec. 207, added subsec. (d).

1978 - Subsec. (c). Pub. L. 95-557 inserted "and not to exceed

$729,000,000 on or after October 1, 1978".

1977 - Subsec. (c). Pub. L. 95-128 authorized appropriation for

annual contributions of $685,000,000 on or after Oct. 1, 1977.

Pub. L. 95-24 substituted "and not to exceed $595,600,000 on or

after October 1, 1976" for "and not to exceed $576,000,000 on or

after October 1, 1976".

1976 - Subsec. (c). Pub. L. 94-375 substituted provision

authorizing appropriations for annual contributions not to exceed

$535,000,000 on or after July 1, 1975, not to exceed $80,000,000 on

or after July 1, 1976, and not to exceed $576,000,000 on or after

October 1, 1976 for provision which authorized annual contributions

for contracts entered into on or after July 1, 1974 of not more

than $500,000,000 per annum, which amount was to be increased by

$60,000,000 on July 1, 1975.

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by title V of Pub. L. 105-276 effective and applicable

beginning upon Oct. 1, 1999, except as otherwise provided, with

provision that Secretary may implement amendment before such date,

except to extent that such amendment provides otherwise, and with

savings provision, see section 503 of Pub. L. 105-276, set out as a

note under section 1437 of this title.

Pub. L. 105-276, title V, Sec. 519(e)-(g), Oct. 21, 1998, 112

Stat. 2561, 2562, provided that:

"(e) Transitional Provision of Assistance. -

"(1) In general. - Subject to paragraph (2), before the

implementation of formulas pursuant to sections 9(d)(2) and

9(e)(2) of the United States Housing Act of 1937 [42 U.S.C.

1437g(d)(2), (e)(2)] (as amended by subsection (a) of this

section), the Secretary shall provide that each public housing

agency shall receive funding under sections 9 and 14 of the

United States Housing Act of 1937 [42 U.S.C. 1437g, 1437l], as

those sections existed immediately before the enactment of this

Act [Oct. 21, 1998] (except that such sections shall be subject

to any amendments to such sections that may be contained in title

II of this Act [see Tables for classification]).

"(2) Qualifications. - Before the implementation of formulas

pursuant to sections 9(d)(2) and 9(e)(2) of the United States

Housing Act of 1937 [42 U.S.C. 1437g(d)(2), (e)(2)] (as amended

by subsection (a) of this section) -

"(A) if a public housing agency establishes a rental amount

that is based on a ceiling rent established pursuant to

subsection (d)(1) of this section [42 U.S.C. 1437a note], the

Secretary shall take into account any reduction of the per unit

dwelling rental income of the public housing agency resulting

from the use of that rental amount in calculating the

contributions for the public housing agency for the operation

of the public housing under section 9 of the United States

Housing Act of 1937 [42 U.S.C. 1437g];

"(B) if a public housing agency establishes a rental amount

that is based on an adjustment to income under section

3(b)(5)(G) of the United States Housing Act of 1937 [42 U.S.C.

1437a(b)(5)(G)] (as in effect immediately before the enactment

of this Act [Oct. 21, 1998]), the Secretary shall not take into

account any reduction of or any increase in the per unit

dwelling rental income of the public housing agency resulting

from the use of that rental amount in calculating the

contributions for the public housing agency for the operation

of the public housing under section 9 of the United States

Housing Act of 1937 [42 U.S.C. 1437g]; and

"(C) if a public housing agency establishes a rental amount

other than as provided under subparagraph (A) or (B) that is

less than the greatest of the amounts determined under

subparagraphs (A), (B), and (C) of section 3(a)(1) of the

United States Housing Act of 1937 [42 U.S.C. 1437a(a)(1)(A),

(B), (C)], the Secretary shall not take into account any

reduction of the per unit dwelling rental income of the public

housing agency resulting from the use of that rental amount in

calculating the contributions for the public housing agency for

the operation of the public housing under section 9 of the

United States Housing Act of 1937 [42 U.S.C. 1437g].

"(f) Effective Date of Operating Formula. - Notwithstanding the

effective date under section 503(a) [42 U.S.C. 1437 note], the

Secretary may extend the effective date of the formula under

section 9(e)(2) of the United States Housing Act of 1937 [42 U.S.C.

1437g(e)(2)] (as amended by subsection (a) of this section) for up

to 6 months if such additional time is necessary to implement such

formula.

"(g) Effective Date. - Subsections (d) [42 U.S.C. 1437a note],

(e), and (f) shall take effect upon the date of the enactment of

this Act [Oct. 21, 1998]."

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-330 effective Oct. 1, 1997, except as

otherwise expressly provided, see section 107 of Pub. L. 104-330,

set out as an Effective Date note under section 4101 of Title 25,

Indians.

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by subtitles B through F of title VI [Secs. 621-685] of

Pub. L. 102-550 applicable upon expiration of 6-month period

beginning Oct. 28, 1992, except as otherwise provided, see section

13642 of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 802(p) of Pub. L. 101-625 deemed enacted

Nov. 5, 1990, see title II of Pub. L. 101-507, set out as a note

under section 1701q of Title 12, Banks and Banking.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section

371 of Pub. L. 97-35, set out as an Effective Date note under

section 3701 of Title 12, Banks and Banking.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-557 effective Oct. 1, 1978, see section

206(h) of Pub. L. 95-557, set out as a note under section 1437c of

this title.

EFFECTIVE DATE

Section effective on such date or dates as the Secretary of

Housing and Urban Development shall prescribe, but not later than

eighteen months after Aug. 22, 1974, except that all of the

provisions of subsec. (c) shall become effective on the same date,

see section 201(b) of Pub. L. 93-383, set out as a note under

section 1437 of this title.

APPLICABILITY OF PENALTIES FOR SLOW EXPENDITURE OF CAPITAL FUNDS

Pub. L. 107-73, title II, Nov. 26, 2001, 115 Stat. 660, provided

in part: "That, hereafter, notwithstanding any other provision of

law or any failure of the Secretary of Housing and Urban

Development to issue regulations to carry out section 9(j) of the

United States Housing Act of 1937 (42 U.S.C. 1437g(j)), such

section is deemed to have taken effect on October 1, 1998, and,

except as otherwise provided in this heading ["public housing

capital fund (including transfer of funds)"], shall apply to all

assistance made available under this same heading on or after such

date".

COOLING DEGREE DAY ADJUSTMENT UNDER PERFORMANCE FUNDING SYSTEM

Section 508 of Pub. L. 101-625 provided that: "In determining the

Performance Funding System utility subsidy for public housing

agencies pursuant to section 9 of the United States Housing Act of

1937 [42 U.S.C. 1437g], the Secretary of Housing and Urban

Development shall include a cooling degree day adjustment factor.

The method by which a cooling degree day adjustment factor is

included shall be identical to the method by which the heating

degree day adjustment factor is included."

ENERGY EFFICIENCY DEMONSTRATION

Section 523 of Pub. L. 101-625, which directed Secretary of

Housing and Urban Development to carry out demonstration program to

encourage use of private energy service companies and demonstrate

opportunities for energy cost reduction through energy services

contracts, and to report findings and recommendations to Congress

as soon as practicable after expiration of 1-year period beginning

on Nov. 28, 1990, was repealed by Pub. L. 105-276, title V, Sec.

582(a)(11), Oct. 21, 1998, 112 Stat. 2644.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1437a, 1437c, 1437c-1,

1437d, 1437k, 1437r, 1437s, 1437u, 1437v, 1437w, 1437z-4, 1437z-5,

1437z-7, 1437aaa-2, 1437aaa-4, 1437bbb-2, 1437bbb-3, 1439, 4822,

12742 of this title; title 12 section 1701u.

-FOOTNOTE-

(!1) So in original. Probably should be "Fund".

(!2) So in original. No subpar. (B) has been enacted.

(!3) So in original. Probably should be section "519(d)(3),".

(!4) So in original.

-End-

-CITE-

42 USC Sec. 1437h 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437h. Implementation of provisions by Secretary

-STATUTE-

(a) Preparation and submission of annual budget program;

maintenance of accounts; audit by General Accounting Office

In the performance of, and with respect to, the functions,

powers, and duties vested in him by this chapter, the Secretary,

notwithstanding the provisions of any other law, shall -

(1) prepare annually and submit a budget program as provided

for wholly owned Government corporations by chapter 91 of title

31; and

(2) maintain an integral set of accounts which may be audited

by the General Accounting Office as provided by chapter 91 of

title 31.

(b) Availability of receipts and assets

All receipts and assets of the Secretary under this chapter shall

be available for the purposes of this chapter until expended.

(c) Federal Reserve banks to act as depositories, custodians and

fiscal agents; reimbursement for services

The Federal Reserve banks are authorized and directed to act as

depositories, custodians, and fiscal agents for the Secretary in

the general exercise of his powers under this chapter, and the

Secretary may reimburse any such bank for its services in such

manner as may be agreed upon.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 10, as added Pub. L. 93-383,

title II, Sec. 201(a), Aug. 22, 1974, 88 Stat. 666; amended Pub. L.

98-479, title II, Sec. 203(b)(2), Oct. 17, 1984, 98 Stat. 2229;

renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102

Stat. 681; Pub. L. 104-316, title I, Sec. 122(k), Oct. 19, 1996,

110 Stat. 3837.)

-MISC1-

PRIOR PROVISIONS

A prior section 10 of act Sept. 1, 1937, ch. 896, 50 Stat. 891,

as amended, authorized annual contributions in assistance of low

rentals for housing projects and was classified to section 1410 of

this title, prior to the general revision of this chapter by Pub.

L. 93-383. Similar provisions are contained in section 1437c of

this title.

AMENDMENTS

1996 - Subsec. (a)(2). Pub. L. 104-316 substituted "maintain an

integral set of accounts which may be audited by the General

Accounting Office as provided by chapter 91 of title 31." for

"maintain an integral set of accounts which shall be audited

annually by the General Accounting Office in accordance with the

principles and procedures applicable to commercial transactions as

provided by chapter 91 of title 31, and no other audit shall be

required."

1984 - Subsec. (a)(1), (2). Pub. L. 98-479 substituted "chapter

91 of title 31" for "the Government Corporations Control Act, as

amended".

-End-

-CITE-

42 USC Sec. 1437i 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437i. Obligations of public housing agencies; contestability;

full faith and credit of United States pledged as security; tax

exemption

-STATUTE-

(a) Obligations issued by a public housing agency in connection

with low-income housing projects which (1) are secured (A) by a

pledge of a loan under any agreement between such public housing

agency and the Secretary, or (B) by a pledge of annual

contributions under an annual contributions contract between such

public housing agency and the Secretary, or (C) by a pledge of both

annual contributions under an annual contributions contract and a

loan under an agreement between such public housing agency and the

Secretary, and (2) bear, or are accompanied by, a certificate of

the Secretary that such obligations are so secured, shall be

incontestable in the hands of a bearer and the full faith and

credit of the United States is pledged to the payment of all

amounts agreed to be paid by the Secretary as security for such

obligations.

(b) Except as provided in section 1437c(g) of this title,

obligations, including interest thereon, issued by public housing

agencies in connection with low-income housing projects shall be

exempt from all taxation now or hereafter imposed by the United

States whether paid by such agencies or by the Secretary. The

income derived by such agencies from such projects shall be exempt

from all taxation now or hereafter imposed by the United States.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 11, as added Pub. L. 93-383,

title II, Sec. 201(a), Aug. 22, 1974, 88 Stat. 667; amended Pub. L.

97-35, title III, Sec. 322(c), Aug. 13, 1981, 95 Stat. 402;

renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102

Stat. 681; Pub. L. 101-625, title V, Sec. 572(2), Nov. 28, 1990,

104 Stat. 4236.)

-MISC1-

PRIOR PROVISIONS

A prior section 11 of act Sept. 1, 1937, ch. 896, 50 Stat. 893,

as amended, authorized capital grants to public housing agencies in

assistance of low rentals and was classified to section 1411 of

this title, prior to the general revision of this chapter by Pub.

L. 93-383.

AMENDMENTS

1990 - Pub. L. 101-625 substituted "low-income housing" for

"lower income housing" wherever appearing.

1981 - Pub. L. 97-35 substituted reference to lower income for

reference to low-income wherever appearing.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section

371 of Pub. L. 97-35, set out as an Effective Date note under

section 3701 of Title 12, Banks and Banking.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1437q of this title; title

26 section 149.

-End-

-CITE-

42 USC Sec. 1437j 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437j. Labor standards and community service requirement

-STATUTE-

(a) Payment of wages prevailing in locality

Any contract for loans, contributions, sale, or lease pursuant to

this chapter shall contain a provision requiring that not less than

the wages prevailing in the locality, as determined or adopted

(subsequent to a determination under applicable State or local law)

by the Secretary, shall be paid to all architects, technical

engineers, draftsmen, and technicians employed in the development,

and all maintenance laborers and mechanics employed in the

operation, of the low-income housing project involved; and shall

also contain a provision that not less than the wages prevailing in

the locality, as predetermined by the Secretary of Labor pursuant

to sections 3141-3144, 3146, and 3147 of title 40, shall be paid to

all laborers and mechanics employed in the development of the

project involved (including a project with nine or more units

assisted under section 1437f of this title, where the public

housing agency or the Secretary and the builder or sponsor enter

into agreement for such use before construction or rehabilitation

is commenced), and the Secretary shall require certification as to

compliance with the provisions of this section prior to making any

payment under such contract.

(b) Exception for volunteers

Subsection (a) of this section and the provisions relating to

wages (pursuant to subsection (a) of this section) in any contract

for loans, annual contributions, sale, or lease pursuant to this

chapter, shall not apply to any individual that -

(1) performs services for which the individual volunteered;

(2)(A) does not receive compensation for such services; or

(B) is paid expenses, reasonable benefits, or a nominal fee for

such services; and

(3) is not otherwise employed at any time in the construction

work.

(c) Community service requirement

(1) In general

Except as provided in paragraph (2) and notwithstanding any

other provision of law, each adult resident of a public housing

project shall -

(A) contribute 8 hours per month of community service (not

including political activities) within the community in which

that adult resides; or

(B) participate in an economic self-sufficiency program (as

that term is defined in subsection (g) of this section) for 8

hours per month.

(2) Exemptions

The Secretary shall provide an exemption from the applicability

of paragraph (1) for any individual who -

(A) is 62 years of age or older;

(B) is a blind or disabled individual, as defined under

section 216(i)(1) or 1614 of the Social Security Act (42 U.S.C.

416(i)(1); 1382c), and who is unable to comply with this

section, or is a primary caretaker of such individual;

(C) is engaged in a work activity (as such term is defined in

section 407(d) of the Social Security Act (42 U.S.C. 607(d)),

as in effect on and after July 1, 1997)); (!1)

(D) meets the requirements for being exempted from having to

engage in a work activity under the State program funded under

part A of title IV of the Social Security Act (42 U.S.C. 601 et

seq.) or under any other welfare program of the State in which

the public housing agency is located, including a

State-administered welfare-to-work program; or

(E) is in a family receiving assistance under a State program

funded under part A of title IV of the Social Security Act (42

U.S.C. 601 et seq.) or under any other welfare program of the

State in which the public housing agency is located, including

a State-administered welfare-to-work program, and has not been

found by the State or other administering entity to be in

noncompliance with such program.

(3) Annual determinations

(A) Requirement

For each public housing resident subject to the requirement

under paragraph (1), the public housing agency shall, 30 days

before the expiration of each lease term of the resident under

section 1437d(l)(1) of this title, review and determine the

compliance of the resident with the requirement under paragraph

(1) of this subsection.

(B) Due process

Such determinations shall be made in accordance with the

principles of due process and on a nondiscriminatory basis.

(C) Noncompliance

If an agency determines that a resident subject to the

requirement under paragraph (1) has not complied with the

requirement, the agency -

(i) shall notify the resident -

(I) of such noncompliance;

(II) that the determination of noncompliance is subject

to the administrative grievance procedure under subsection

(k); (!2) and

(III) that, unless the resident enters into an agreement

under clause (ii) of this subparagraph, the resident's

lease will not be renewed; and

(ii) may not renew or extend the resident's lease upon

expiration of the lease term and shall take such action as is

necessary to terminate the tenancy of the household, unless

the agency enters into an agreement, before the expiration of

the lease term, with the resident providing for the resident

to cure any noncompliance with the requirement under

paragraph (1), by participating in an economic

self-sufficiency program for or contributing to community

service as many additional hours as the resident needs to

comply in the aggregate with such requirement over the

12-month term of the lease.

(4) Ineligibility for occupancy for noncompliance

A public housing agency may not renew or extend any lease, or

provide any new lease, for a dwelling unit in public housing for

any household that includes an adult member who was subject to

the requirement under paragraph (1) and failed to comply with the

requirement.

(5) Inclusion in plan

Each public housing agency shall include in its public housing

agency plan a detailed description of the manner in which the

agency intends to implement and administer this subsection.

(6) Geographic location

The requirement under paragraph (1) may include community

service or participation in an economic self-sufficiency program

performed at a location not owned by the public housing agency.

(7) Prohibition against replacement of employees

In carrying out this subsection, a public housing agency may

not -

(A) substitute community service or participation in an

economic self-sufficiency program, as described in paragraph

(1), for work performed by a public housing employee; or

(B) supplant a job at any location at which community work

requirements are fulfilled.

(8) Third-party coordinating

A public housing agency may administer the community service

requirement under this subsection directly, through a resident

organization, or through a contractor having experience in

administering volunteer-based community service programs within

the service area of the public housing agency. The Secretary may

establish qualifications for such organizations and contractors.

(d) Treatment of income changes resulting from welfare program

requirements

(1) Covered family

For purposes of this subsection, the term "covered family"

means a family that (A) receives benefits for welfare or public

assistance from a State or other public agency under a program

for which the Federal, State, or local law relating to the

program requires, as a condition of eligibility for assistance

under the program, participation of a member of the family in an

economic self-sufficiency program, and (B) resides in a public

housing dwelling unit or is provided tenant-based assistance

under section 1437f of this title.

(2) Decreases in income for failure to comply

(A) In general

Notwithstanding the provisions of section 1437a(a) of this

title (relating to family rental contributions) or paragraph

(4) or (5) of section 1437a(b) of this title (relating to

definition of income and adjusted income), if the welfare or

public assistance benefits of a covered family are reduced

under a Federal, State, or local law regarding such an

assistance program because of any failure of any member of the

family to comply with the conditions under the assistance

program requiring participation in an economic self-sufficiency

program or imposing a work activities requirement, the amount

required to be paid by the family as a monthly contribution

toward rent may not be decreased, during the period of the

reduction, as a result of any decrease in the income of the

family (to the extent that the decrease in income is a result

of the benefits reduction).

(B) No reduction based on time limit for assistance

For purposes of this paragraph, a reduction in benefits as a

result of the expiration of a lifetime time limit for a family

receiving welfare or public assistance benefits shall not be

considered to be a failure to comply with the conditions under

the assistance program requiring participation in an economic

self-sufficiency program or imposing a work activities

requirement. This paragraph shall apply beginning on October

21, 1998.

(3) Effect of fraud

Notwithstanding the provisions of section 1437a(a) of this

title (relating to family rental contributions) or paragraph (4)

or (5) of section 1437a(b) of this title (relating to definition

of income and adjusted income), if the welfare or public

assistance benefits of a covered family are reduced because of an

act of fraud by a member of the family under the law or program,

the amount required to be paid by the covered family as a monthly

contribution toward rent may not be decreased, during the period

of the reduction, as a result of any decrease in the income of

the family (to the extent that the decrease in income is a result

of the benefits reduction). This paragraph shall apply beginning

on October 21, 1998.

(4) Notice

Paragraphs (2) and (3) shall not apply to any covered family

before the public housing agency providing assistance under this

chapter on behalf of the family obtains written notification from

the relevant welfare or public assistance agency specifying that

the family's benefits have been reduced because of noncompliance

with economic self-sufficiency program or work activities

requirements or fraud, and the level of such reduction.

(5) Occupancy rights

This subsection may not be construed to authorize any public

housing agency to establish any time limit on tenancy in a public

housing dwelling unit or on receipt of tenant-based assistance

under section 1437f of this title.

(6) Review

Any covered family residing in public housing that is affected

by the operation of this subsection shall have the right to

review the determination under this subsection through the

administrative grievance procedure established pursuant to

section 1437d(k) of this title for the public housing agency.

(7) Cooperation agreements for economic self-sufficiency

activities

(A) Requirement

A public housing agency providing public housing dwelling

units or tenant-based assistance under section 1437f of this

title for covered families shall make its best efforts to enter

into such cooperation agreements, with State, local, and other

agencies providing assistance to covered families under welfare

or public assistance programs, as may be necessary, to provide

for such agencies to transfer information to facilitate

administration of subsection (c) of this section and paragraphs

(2), (3), and (4) of this subsection and other information

regarding rents, income, and assistance that may assist a

public housing agency or welfare or public assistance agency in

carrying out its functions.

(B) Contents

A public housing agency shall seek to include in a

cooperation agreement under this paragraph requirements and

provisions designed to target assistance under welfare and

public assistance programs to families residing in public

housing projects and families receiving tenant-based assistance

under section 1437f of this title, which may include providing

for economic self-sufficiency services within such housing,

providing for services designed to meet the unique

employment-related needs of residents of such housing and

recipients of such assistance, providing for placement of

workfare positions on-site in such housing, and such other

elements as may be appropriate.

(C) Confidentiality

This paragraph may not be construed to authorize any release

of information prohibited by, or in contravention of, any other

provision of Federal, State, or local law.

(e) Lease provisions

A public housing agency shall incorporate into leases under

section 1437d(l) of this title and into agreements for the

provision of tenant-based assistance under section 1437f of this

title, provisions incorporating the conditions under subsection (d)

of this section.

(f) Treatment of income

Notwithstanding any other provision of this section, in

determining the income of a family who resides in public housing or

receives tenant-based assistance under section 1437f of this title,

a public housing agency shall consider any decrease in the income

of a family that results from the reduction of any welfare or

public assistance benefits received by the family under any

Federal, State, or local law regarding a program for such

assistance if the family (or a member thereof, as applicable) has

complied with the conditions for receiving such assistance and is

unable to obtain employment notwithstanding such compliance.

(g) Definition

For purposes of this section, the term "economic self-sufficiency

program" means any program designed to encourage, assist, train, or

facilitate the economic independence of participants and their

families or to provide work for participants, including programs

for job training, employment counseling, work placement, basic

skills training, education, workfare, financial or household

management, apprenticeship, or other activities as the Secretary

may provide.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 12, as added Pub. L. 93-383,

title II, Sec. 201(a), Aug. 22, 1974, 88 Stat. 667; amended Pub. L.

97-35, title III, Sec. 322(c), Aug. 13, 1981, 95 Stat. 402; Pub. L.

100-242, title I, Sec. 112(b)(5), Feb. 5, 1988, 101 Stat. 1824;

renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102

Stat. 681; Pub. L. 101-625, title V, Sec. 572(2), title IX, Sec.

955(b), Nov. 28, 1990, 104 Stat. 4236, 4421; Pub. L. 105-276, title

V, Sec. 512(a), Oct. 21, 1998, 112 Stat. 2539.)

-REFTEXT-

REFERENCES IN TEXT

The Social Security Act, referred to in subsec. (c)(2)(D), (E),

is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Part A of

title IV of the Act is classified generally to part A (Sec. 601 et

seq.) of subchapter IV of chapter 7 of this title. For complete

classification of this Act to the Code, see section 1305 of this

title and Tables.

Subsection (k), referred to in subsec. (c)(3)(C)(i)(II), probably

means section 1437d(k) of this title, which relates to

administrative grievance procedures. This section does not contain

a subsec. (k).

-COD-

CODIFICATION

In subsec. (a), "sections 3141-3144, 3146, and 3147 of title 40"

substituted for "the Davis-Bacon Act (49 Stat. 1011)" on authority

of Pub. L. 107-217, Sec. 5(c), Aug. 21, 2002, 116 Stat. 1303, the

first section of which enacted Title 40, Public Buildings,

Property, and Works.

-MISC1-

PRIOR PROVISIONS

A prior section 12 of act Sept. 1, 1937, ch. 896, 50 Stat. 894,

as amended, authorized the disposal of low-rent housing projects

transferred to or acquired by the Authority and was classified to

section 1412 of this title, prior to the general revision of this

chapter by Pub. L. 93-383.

AMENDMENTS

1998 - Pub. L. 105-276, Sec. 512(a)(1), inserted "and community

service requirement" after "Labor standards" in section catchline.

Subsecs. (c) to (g). Pub. L. 105-276, Sec. 512(a)(2), added

subsecs. (c) to (g).

1990 - Pub. L. 101-625, Sec. 955(b), designated existing

provisions as subsec. (a) and added subsec. (b).

Pub. L. 101-625, Sec. 572(2), substituted "low-income housing"

for "lower income housing".

1988 - Pub. L. 100-242 struck out "annual" before

"contributions".

1981 - Pub. L. 97-35 substituted reference to lower income for

reference to low-income.

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by title V of Pub. L. 105-276 effective and applicable

beginning upon Oct. 1, 1999, except as otherwise provided, with

provision that Secretary may implement amendment before such date,

except to extent that such amendment provides otherwise, and with

savings provision, see section 503 of Pub. L. 105-276, set out as a

note under section 1437 of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Section 955(d) of Pub. L. 101-625 provided that: "The amendments

made by this section [amending this section, section 5310 of this

title, and section 1701q of Title 12, Banks and Banking] shall

apply to any volunteer services provided before, on, or after the

date of the enactment of this Act [Nov. 28, 1990], except that such

amendments may not be construed to require the repayment of any

wages paid before the date of the enactment of this Act for

services provided before such date."

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section

371 of Pub. L. 97-35, set out as an Effective Date note under

section 3701 of Title 12, Banks and Banking.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1437c-1, 1437d, 1437g of

this title.

-FOOTNOTE-

(!1) So in original. Probably should be only one closing

parenthesis.

(!2) See References in Text note below.

-End-

-CITE-

42 USC Sec. 1437j-1 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437j-1. Repealed. Pub. L. 105-276, title V, Sec. 582(a)(5),

Oct. 21, 1998, 112 Stat. 2643

-MISC1-

Section, Pub. L. 97-35, title III, Sec. 329A, Aug. 13, 1981, 95

Stat. 409, related to payment for development managers of projects

assisted under this chapter.

EFFECTIVE DATE OF REPEAL

Repeal effective and applicable beginning upon Oct. 1, 1999,

except as otherwise provided, with provision that Secretary may

implement the repeal before such date, and with savings provision,

see section 503 of Pub. L. 105-276, set out as an Effective Date of

1998 Amendment note under section 1437 of this title.

-End-

-CITE-

42 USC Sec. 1437k 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437k. Consortia, joint ventures, affiliates, and subsidiaries

of public housing agencies

-STATUTE-

(a) Consortia

(1) In general

Any 2 or more public housing agencies may participate in a

consortium for the purpose of administering any or all of the

housing programs of those public housing agencies in accordance

with this section.

(2) Effect

With respect to any consortium described in paragraph (1) -

(A) any assistance made available under this subchapter to

each of the public housing agencies participating in the

consortium shall be paid to the consortium; and

(B) all planning and reporting requirements imposed upon each

public housing agency participating in the consortium with

respect to the programs operated by the consortium shall be

consolidated.

(3) Restrictions

(A) Agreement

Each consortium described in paragraph (1) shall be formed

and operated in accordance with a consortium agreement, and

shall be subject to the requirements of a joint public housing

agency plan, which shall be submitted by the consortium in

accordance with section 1437c-1 of this title.

(B) Minimum requirements

The Secretary shall specify minimum requirements relating to

the formation and operation of consortia and the minimum

contents of consortium agreements under this paragraph.

(b) Joint ventures

(1) In general

Notwithstanding any other provision of law, a public housing

agency, in accordance with the public housing agency plan, may -

(A) form and operate wholly owned or controlled subsidiaries

(which may be nonprofit corporations) and other affiliates, any

of which may be directed, managed, or controlled by the same

persons who constitute the board of directors or similar

governing body of the public housing agency, or who serve as

employees or staff of the public housing agency; or

(B) enter into joint ventures, partnerships, or other

business arrangements with, or contract with, any person,

organization, entity, or governmental unit -

(i) with respect to the administration of the programs of

the public housing agency, including any program that is

subject to this subchapter; or

(ii) for the purpose of providing or arranging for the

provision of supportive or social services.

(2) Use and treatment of income

Any income generated under paragraph (1) -

(A) shall be used for low-income housing or to benefit the

residents assisted by the public housing agency; and

(B) shall not result in any decrease in any amount provided

to the public housing agency under this subchapter, except as

otherwise provided under the formulas established under section

1437g(d)(2) and 1437g(e)(2) of this title.

(3) Audits

The Comptroller General of the United States, the Secretary, or

the Inspector General of the Department of Housing and Urban

Development may conduct an audit of any activity undertaken under

paragraph (1) at any time.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 13, as added Pub. L. 96-153,

title II, Sec. 209, Dec. 21, 1979, 93 Stat. 1109; amended Pub. L.

96-399, title II, Sec. 202(b), Oct. 8, 1980, 94 Stat. 1629;

renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102

Stat. 681; Pub. L. 105-276, title V, Sec. 515, Oct. 21, 1998, 112

Stat. 2549.)

-MISC1-

PRIOR PROVISIONS

A prior section 13 of act Sept. 1, 1937, ch. 896, 50 Stat. 894,

as amended, enumerated powers of the Authority and was classified

to section 1413 of this title, prior to the general revision of

this chapter by Pub. L. 93-383.

AMENDMENTS

1998 - Pub. L. 105-276 amended section catchline and text of

section generally. Prior to amendment, text read as follows: "The

Secretary shall, to the maximum extent practicable, require that

newly constructed and substantially rehabilitated projects assisted

under this chapter with authority provided on or after October 1,

1979, shall be equipped with heating and cooling systems selected

on the basis of criteria which include a life-cycle cost analysis

of such systems."

1980 - Pub. L. 96-399 struck out subsec. (a) which related to

consideration by the Secretary, in utilizing contract authority, of

projects which will be modernized to a substantial extent with

weatherization materials as defined in section 6862(9) of this

title, and redesignated former subsec. (b) as entire section.

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by title V of Pub. L. 105-276 effective and applicable

beginning upon Oct. 1, 1999, except as otherwise provided, with

provision that Secretary may implement amendment before such date,

except to extent that such amendment provides otherwise, and with

savings provision, see section 503 of Pub. L. 105-276, set out as a

note under section 1437 of this title.

ENERGY EFFICIENT PUBLIC HOUSING DEMONSTRATION

Pub. L. 100-242, title I, Sec. 125, Feb. 5, 1988, 101 Stat. 1847,

provided that:

"(a) Establishment. - The Secretary of Housing and Urban

Development shall establish a demonstration program through the

assistance of an appropriate technology transfer organization that

specializes in producing detailed energy-efficient designs and in

conducting local and statewide, public participation tests for

energy efficient, needs-oriented housing. The appropriate

technology organization shall carry out the demonstration working

through and with public housing agencies to build and test a

variety of energy-efficient housing designs in 100 separate housing

units in 4 different States that meet local lower income housing

needs (including single parent, disabled, and elderly concerns)

through a composite ranging from single to 12-plex units in the

cluster approach on vacant lots and open areas.

"(b) Report. - As soon as practicable following September 30,

1988, the Secretary of Housing and Urban Development shall submit

to the Congress a report setting forth the findings and

recommendations of the Secretary as a result of the demonstration

under this section.

"(c) Funding. - Of the budget authority authorized to be provided

for the development of public housing, there is authorized to be

appropriated to carry out this section $4,700,000 for fiscal year

1988."

-End-

-CITE-

42 USC Sec. 1437l 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437l. Repealed. Pub. L. 105-276, title V, Sec. 522(a), Oct.

21, 1998, 112 Stat. 2564

-MISC1-

Section, act Sept. 1, 1937, ch. 896, title I, Sec. 14, as added

Pub. L. 96-399, title II, Sec. 202(a), Oct. 8, 1980, 94 Stat. 1625;

amended Pub. L. 97-35, title III, Secs. 322(c), 329G, Aug. 13,

1981, 95 Stat. 402, 410; Pub. L. 98-181, title II, Sec. 214(b),

Nov. 30, 1983, 97 Stat. 1185; Pub. L. 98-479, title II, Sec.

204(b)(2), Oct. 17, 1984, 98 Stat. 2233; Pub. L. 100-242, title I,

Secs. 112(b)(6), 119(b)-(i), 120, Feb. 5, 1988, 101 Stat. 1824,

1830-1837; renumbered title I, Pub. L. 100-358, Sec. 5, June 29,

1988, 102 Stat. 681; Pub. L. 101-625, title IV, Sec. 414, title V,

Secs. 509(a)-(g), 510, 572, Nov. 28, 1990, 104 Stat. 4160, 4187,

4191-4193, 4236; Pub. L. 102-139, title II, Oct. 28, 1991, 105

Stat. 757, 759; Pub. L. 102-550, title I, Secs. 111(b)(1), 115,

title VI, Sec. 625(a)(3), Oct. 28, 1992, 106 Stat. 3688, 3692,

3820; Pub. L. 103-233, title III, Sec. 302, Apr. 11, 1994, 108

Stat. 369; Pub. L. 104-19, title I, Secs. 1001(a), 1003A, July 27,

1995, 109 Stat. 235, 236; Pub. L. 104-134, title I, Sec. 101(e)

[title II, Sec. 201(a)(1)], Apr. 26, 1996, 110 Stat. 1321-257,

1321-277; renumbered title I, Pub. L. 104-140, Sec. 1(a), May 2,

1996, 110 Stat. 1327; Pub. L. 104-330, title V, Sec. 501(b)(6),

Oct. 26, 1996, 110 Stat. 4042; Pub. L. 105-276, title II, Sec. 208,

Oct. 21, 1998, 112 Stat. 2485, related to assistance for public

housing modernization. See section 1437g(a) of this title.

EFFECTIVE DATE OF REPEAL

Repeal effective and applicable beginning upon Oct. 1, 1999,

except as otherwise provided, with provision that Secretary may

implement the repeal before such date, and with savings provision,

see section 503 of Pub. L. 105-276, set out as an Effective Date of

1998 Amendment note under section 1437 of this title.

SAVINGS PROVISION

Pub. L. 105-276, title V, Sec. 522(c), Oct. 21, 1998, 112 Stat.

2565, provided that:

"(1) In general. - Section 14 of the United States Housing Act of

1937 [42 U.S.C. 1437l] shall apply as provided in section 519(e) of

this Act [42 U.S.C. 1437g note].

"(2) Expansion of use of modernization funding. - Before the

implementation of formulas pursuant to sections 9(d)(2) and 9(e)(2)

of the United States Housing Act of 1937 [42 U.S.C. 1437g(d)(2),

(e)(2)] (as amended by section 519(a) of this Act) an agency may

utilize any authority provided under or pursuant to section 14(q)

of such Act [42 U.S.C. 1437l(q)] (including the authority under

section 201(a) of the Departments of Veterans Affairs and Housing

and Urban Development, and Independent Agencies Appropriations Act,

1996 [see Tables for classification] (Public Law 104-134; 110 Stat.

1321-277)), as such provisions (including such section 201(a)) may

be amended thereafter, including any amendment made by title II of

this Act [see Tables for classification]), notwithstanding any

other provision of law (including the repeal made under this

section, the expiration of the applicability of such section 201

[see Tables for classification], or any repeal of such section

201).

"(3) Effective date. - This subsection shall take effect on the

date of the enactment of this Act [Oct. 21, 1998]."

CONVERSION OF CERTAIN PUBLIC HOUSING TO VOUCHERS

Pub. L. 104-134, title I, Sec. 101(e) [title II, Sec. 202], Apr.

26, 1996, 110 Stat. 1321-257, 1321-279; renumbered title I, Pub. L.

104-140, Sec. 1(a), May 2, 1996, 110 Stat. 1327, which required

identification for removal from the inventory of a public housing

agency of developments on same or contiguous sites which had more

than 300 units and vacancy rate of at least 10 percent, were

identified as distressed, and for which estimated cost of continued

operation exceeded cost of providing tenant-based assistance under

section 1437f of this title, provided for implementation and

enforcement of provisions requiring identification, required each

agency to develop and carry out plan for removal over 5-year

period, and required provision of tenant-based assistance to

families residing in any removed development, was repealed by Pub.

L. 105-276, title V, Sec. 537(b), Oct. 21, 1998, 112 Stat. 2592.

Amounts made available to carry out section 101(e) [title II, Sec.

202] of Pub. L. 104-134 authorized to be used, to extent provided

in advance in appropriations Acts, to carry out section 1437z-5 of

this title, and section 101(e) [title II, Sec. 202] of Pub. L.

104-134 as in effect immediately before Oct. 21, 1998, to continue

to apply to public housing developments identified for conversion,

or assessment of whether conversion is required, prior to such

date, see section 537(c) of Pub. L. 105-276, set out as a

Transition note under section 1437z-5 of this title.

-End-

-CITE-

42 USC Sec. 1437m 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437m. Payment of non-Federal share

-STATUTE-

Any of the following may be used as the non-Federal share

required in connection with activities undertaken under Federal

grant-in-aid programs which provide social, educational,

employment, and other services to the tenants in a project assisted

under this chapter, other than under section 1437f of this title;

(1) annual contributions under this chapter for operation of

the project; or

(2) rental or use-value of buildings or facilities paid for, in

whole or in part, from development, modernization, or operation

cost financed under this chapter.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 15, as added Pub. L. 96-399,

title II, Sec. 212, Oct. 8, 1980, 94 Stat. 1636; amended Pub. L.

100-242, title I, Sec. 112(b)(7), Feb. 5, 1988, 101 Stat. 1824;

renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102

Stat. 681.)

-MISC1-

AMENDMENTS

1988 - Cl. (2). Pub. L. 100-242 struck out "with loans or debt

service annual contributions" after "cost financed".

-End-

-CITE-

42 USC Sec. 1437n 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437n. Eligibility for assisted housing

-STATUTE-

(a) Income eligibility for public housing

(1) Income mix within projects

A public housing agency may establish and utilize income-mix

criteria for the selection of residents for dwelling units in

public housing projects, subject to the requirements of this

section.

(2) PHA income mix

(A) (!1) Targeting. - Except as provided in paragraph (4), of

the public housing dwelling units of a public housing agency made

available for occupancy in any fiscal year by eligible families,

not less than 40 percent shall be occupied by families whose

incomes at the time of commencement of occupancy do not exceed 30

percent of the area median income, as determined by the Secretary

with adjustments for smaller and larger families; except that the

Secretary may establish income ceilings higher or lower than 30

percent of the area median income on the basis of the Secretary's

findings that such variations are necessary because of unusually

high or low family incomes.

(3) Prohibition of concentration of low-income families

(A) Prohibition

A public housing agency may not, in complying with the

requirements under paragraph (2), concentrate very low-income

families (or other families with relatively low incomes) in

public housing dwelling units in certain public housing

projects or certain buildings within projects. The Secretary

shall review the income and occupancy characteristics of the

public housing projects and the buildings of such projects of

such agencies to ensure compliance with the provisions of this

paragraph and paragraph (2).

(B) Deconcentration

(i) In general

A public housing agency shall submit with its annual public

housing agency plan under section 1437c-1 of this title an

admissions policy designed to provide for deconcentration of

poverty and income-mixing by bringing higher income tenants

into lower income projects and lower income tenants into

higher income projects. This clause may not be construed to

impose or require any specific income or racial quotas for

any project or projects.

(ii) Incentives

In implementing the policy under clause (i), a public

housing agency may offer incentives for eligible families

having higher incomes to occupy dwelling unit in projects

predominantly occupied by eligible families having lower

incomes, and provide for occupancy of eligible families

having lower incomes in projects predominantly occupied by

eligible families having higher incomes.

(iii) Family choice

Incentives referred to in clause (ii) may be made available

by a public housing agency only in a manner that allows for

the eligible family to have the sole discretion in

determining whether to accept the incentive and an agency may

not take any adverse action toward any eligible family for

choosing not to accept an incentive and occupancy of a

project described in clause (i)(II),(!2) Provided, That the

skipping of a family on a waiting list to reach another

family to implement the policy under clause (i) shall not be

considered an adverse action. An agency implementing an

admissions policy under this subparagraph shall implement the

policy in a manner that does not prevent or interfere with

the use of site-based waiting lists authorized under section

1437d(s) (!3) of this title.

(4) Fungibility with tenant-based assistance

(A) Authority

Except as provided under subparagraph (D), the number of

public housing dwelling units that a public housing agency

shall otherwise make available in accordance with paragraph

(2)(A) to comply with the percentage requirement under such

paragraph for a fiscal year shall be reduced by the credit

number for the agency under subparagraph (B).

(B) Credit for exceeding tenant-based assistance targeting

requirement

Subject to subparagraph (C), the credit number under this

subparagraph for a public housing agency for a fiscal year

shall be the number by which -

(i) the aggregate number of qualified families who, in such

fiscal year, are initially provided tenant-based assistance

under section 1437f of this title by the agency; exceeds

(ii) the number of qualified families that is required for

the agency to comply with the percentage requirement under

subsection (b)(1) of this section for such fiscal year.

(C) Limitations on credit number

The credit number under subparagraph (B) for a public housing

agency for a fiscal year may not in any case exceed the lesser

of -

(i) the number of dwelling units that is equivalent to 10

percent of the aggregate number of families initially

provided tenant-based assistance under section 1437f of this

title by the agency in such fiscal year; or

(ii) the number of public housing dwelling units of the

agency that -

(I) are in projects that are located in census tracts

having a poverty rate of 30 percent or more; and

(II) are made available for occupancy during such fiscal

year and are actually filled only by families whose incomes

at the time of commencement of such occupancy exceed 30

percent of the area median income, as determined by the

Secretary with adjustments for smaller and larger families.

(D) Fungibility floor

Notwithstanding any authority under subparagraph (A), of the

public housing dwelling units of a public housing agency made

available for occupancy in any fiscal year by eligible

families, not less than 30 percent shall be occupied by

families whose incomes at the time of commencement of occupancy

do not exceed 30 percent of the area median income, as

determined by the Secretary with adjustments for smaller and

larger families.

(E) Qualified family

For purposes of this paragraph, the term "qualified family"

means a family having an income described in subsection (b)(1)

of this section.

(b) Income eligibility for tenant-based section 1437f assistance

(1) In general

Of the families initially provided tenant-based assistance

under section 1437f of this title by a public housing agency in

any fiscal year, not less than 75 percent shall be families whose

incomes do not exceed 30 percent of the area median income, as

determined by the Secretary with adjustments for smaller and

larger families; except that the Secretary may establish income

ceilings higher or lower than 30 percent of the area median

income on the basis of the Secretary's findings that such

variations are necessary because of unusually high or low family

incomes.

(2) Jurisdictions served by multiple PHAs

In the case of any 2 or more public housing agencies that

administer tenant-based assistance under section 1437f of this

title with respect solely to identical geographical areas, such

agencies shall be treated as a single public housing agency for

purposes of paragraph (1).

(c) Income eligibility for project-based section 1437f assistance

(1) Pre-1981 act projects

Not more than 25 percent of the dwelling units that were

available for occupancy under section 8 [42 U.S.C. 1437f] housing

assistance payments contracts under this chapter before October

1, 1981, and which will be leased on or after October 1, 1981,

shall be available for leasing by low-income families other than

very low-income families.

(2) Post-1981 act projects

Not more than 15 percent of the dwelling units which become

available for occupancy under section 8 [42 U.S.C. 1437f] housing

assistance payments contracts under this chapter on or after

October 1, 1981, shall be available for leasing by low-income

families other than very low-income families.

(3) Targeting

For each project assisted under a contract for project-based

assistance, of the dwelling units that become available for

occupancy in any fiscal year that are assisted under the

contract, not less than 40 percent shall be available for leasing

only by families whose incomes at the time of commencement of

occupancy do not exceed 30 percent of the area median income, as

determined by the Secretary with adjustments for smaller and

larger families; except that the Secretary may establish income

ceilings higher or lower than 30 percent of the area median

income on the basis of the Secretary's findings that such

variations are necessary because of unusually high or low family

incomes.

(4) Prohibition of skipping

In developing admission procedures implementing paragraphs (1),

(2), and (3), the Secretary shall prohibit project owners from

selecting families for residence in an order different from the

order on the waiting list for the purpose of selecting relatively

higher income families for residence. Nothing in this paragraph

or this subsection may be construed to prevent an owner of

housing assisted under a contract for project-based assistance

from establishing a preference for occupancy in such housing for

families containing a member who is employed.

(5) Exception

The limitations established in paragraphs (1), (2), and (3)

shall not apply to dwelling units made available under

project-based contracts under section 1437f of this title for the

purpose of preventing displacement, or ameliorating the effects

of displacement.

(6) Definition

For purposes of this subsection, the term "project-based

assistance" means assistance under any of the following programs:

(A) The new construction or substantial rehabilitation

program under section 1437f(b)(2) of this title (as in effect

before October 1, 1983).

(B) The property disposition program under section 1437f(b)

of this title (as in effect before the effective date under

section 503(a) of the Quality Housing and Work Responsibility

Act of 1998).

(C) The loan management set-aside program under subsections

(b) and (v) of section 1437f of this title.

(D) The project-based certificate program under section

1437f(d)(2) of this title.

(E) The moderate rehabilitation program under section

1437f(e)(2) of this title (as in effect before October 1,

1991).

(F) The low-income housing preservation program under

Low-Income Housing Preservation and Resident Homeownership Act

of 1990 [12 U.S.C. 4101 et seq.] or the provisions of the

Emergency Low Income Housing Preservation Act of 1987 (as in

effect before November 28, 1990).

(G) Section 1437f of this title (as in effect before the

effective date under section 503(a) of the Quality Housing and

Work Responsibility Act of 1998), following conversion from

assistance under section 1701s of title 12 or section

1715z-1(f)(2) of title 12.

(d) Establishment of different standards

Notwithstanding subsection (a)(2) or (b)(1) of this section, if

approved by the Secretary, a public housing agency may for good

cause establish and implement, in accordance with the public

housing agency plan, an admission standard other than the standard

under such subsection.

(e) Repealed. Pub. L. 105-276, title V, Sec. 576(d)(2), Oct. 21,

1998, 112 Stat. 2640

(f) Ineligibility of individuals convicted of manufacturing or

producing methamphetamine on the premises

Notwithstanding any other provision of law, a public housing

agency shall establish standards for occupancy in public housing

dwelling units and assistance under section 1437f of this title

that -

(1) permanently prohibit occupancy in any public housing

dwelling unit by, and assistance under section 1437f of this

title for, any person who has been convicted of manufacturing or

otherwise producing methamphetamine on the premises in violation

of any Federal or State law; and

(2) immediately and permanently terminate the tenancy in any

public housing unit of, and the assistance under section 1437f of

this title for, any person who is convicted of manufacturing or

otherwise producing methamphetamine on the premises in violation

of any Federal or State law.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 16, as added Pub. L. 97-35,

title III, Sec. 323, Aug. 13, 1981, 95 Stat. 404; amended Pub. L.

98-181, title II, Sec. 213, Nov. 30, 1983, 97 Stat. 1184; Pub. L.

100-242, title I, Secs. 103, 112(b)(8), Feb. 5, 1988, 101 Stat.

1822, 1824; renumbered title I, Pub. L. 100-358, Sec. 5, June 29,

1988, 102 Stat. 681; Pub. L. 100-628, title X, Sec. 1001(a), Nov.

7, 1988, 102 Stat. 3263; Pub. L. 101-625, title V, Secs. 511,

572(1), Nov. 28, 1990, 104 Stat. 4194, 4236; Pub. L. 102-550, title

I, Sec. 105, Oct. 28, 1992, 106 Stat. 3684; Pub. L. 104-99, title

IV, Sec. 402(d)(6)(A)(v), Jan. 26, 1996, 110 Stat. 42; Pub. L.

104-120, Sec. 9(d), Mar. 28, 1996, 110 Stat. 837; Pub. L. 104-330,

title V, Sec. 501(b)(7), Oct. 26, 1996, 110 Stat. 4042; Pub. L.

105-276, title IV, Sec. 428, title V, Secs. 513(a), 576(d)(2), Oct.

21, 1998, 112 Stat. 2511, 2543, 2640; Pub. L. 105-277, div. A, Sec.

123, Oct. 21, 1998, 112 Stat. 2681-546; Pub. L. 106-74, title II,

Sec. 205, Oct. 20, 1999, 113 Stat. 1069.)

-REFTEXT-

REFERENCES IN TEXT

Section 1437d(s) of this title, referred to in subsec.

(a)(3)(B)(iii), probably should be a reference to section 1437d(r)

of this title. Pub. L. 105-276, title V, Secs. 525, 575(d),

576(d)(1)(B), Oct. 21, 1998, 112 Stat. 2568, 2637, 2640, amended

section 1437d by adding a subsec. (s) relating to site-based

waiting lists and a subsec. (t) relating to authority to require

access to criminal records and then redesignated those subsecs. (s)

and (t) as (r) and (s), respectively.

Section 503(a) of the Quality Housing and Work Responsibility Act

of 1998, referred to in subsec. (c)(6)(B), (G), is section 503(a)

of Pub. L. 105-276, which is set out as an Effective Date of 1998

Amendment note under section 1437 of this title.

The Low-Income Housing Preservation and Resident Homeownership

Act of 1990, referred to in subsec. (c)(6)(F), is title II of Pub.

L. 100-242, Feb. 5, 1988, 101 Stat. 1877, as amended, which is

classified principally to chapter 42 (Sec. 4101 et seq.) of Title

12, Banks and Banking. For complete classification of this Act to

the Code, see Short Title note set out under section 4101 of Title

12 and Tables.

The Emergency Low Income Housing Preservation Act of 1987,

referred to in subsec. (c)(6)(F), is title II of Pub. L. 100-242,

Feb. 5, 1988, 101 Stat. 1877, which, as amended by Pub. L. 101-625,

is known as the Low-Income Housing Preservation and Resident

Homeownership Act of 1990. Subtitles A and B of title II, which

were formerly set out as a note under section 1715l of Title 12,

Banks and Banking, and which amended section 1715z-6 of Title 12,

were amended generally by Pub. L. 101-625 and are classified to

subchapter I (Sec. 4101 et seq.) of chapter 42 of Title 12.

Subtitles C and D of title II amended section 1715z-15 of Title 12

and sections 1437f, 1472, 1485, and 1487 of this title. Another

subtitle C of title II of Pub. L. 100-242, as added by Pub. L.

102-550, is classified generally to subchapter II (Sec. 4141 et

seq.) of chapter 42 of Title 12. For complete classification of

this Act to the Code, see Short Title note set out under section

4101 of Title 12 and Tables.

-COD-

CODIFICATION

October 1, 1981, referred to in subsec. (c)(1), (2), was in the

original "the effective date of the Housing and Community

Development Amendments of 1981" and "such effective date", meaning

the effective date of subtitle A of title III of Pub. L. 97-35,

Aug. 13, 1981, 95 Stat. 384, which was generally effective Oct. 1,

1981. See Effective Date note below.

-MISC1-

AMENDMENTS

1999 - Subsecs. (a)(2)(A), (c)(3). Pub. L. 106-74, Sec. 205(1),

inserted before the period at end "; except that the Secretary may

establish income ceilings higher or lower than 30 percent of the

area median income on the basis of the Secretary's findings that

such variations are necessary because of unusually high or low

family incomes".

1998 - Subsecs. (a) to (d). Pub. L. 105-276, Sec. 513(a), as

amended by Pub. L. 105-277, Sec. 123, added subsecs. (a) to (d) and

struck out former subsecs. (a) to (d). Prior to amendment, subsec.

(a) related to percentage availability under contracts prior to

Oct. 1, 1981, subsec. (b) related to percentage availability under

contracts on or after Oct. 1, 1981, subsec. (c) related to

admission procedures implementing subsec. (b), and subsec. (d)

related to applicability of admission procedures limitations.

Subsec. (e). Pub. L. 105-276, Sec. 576(d)(2), struck out heading

and text of subsec. (e), which directed public housing agency to

establish standards to prohibit occupancy by and terminate tenancy

of any person illegally using controlled substance or whose use of

controlled substance or abuse of alcohol might interfere with

peaceful enjoyment of premises by other residents, and authorized

agency to consider rehabilitation of person in making determination

to deny occupancy.

Subsec. (f). Pub. L. 105-276, Sec. 428, added subsec. (f).

1996 - Pub. L. 104-120, Sec. 9(d)(1), substituted "Eligibility"

for "Income eligibility" in section catchline.

Subsec. (c). Pub. L. 104-99 temporarily substituted "the written

system of preferences for selection established by the public

housing agency pursuant to section 1437d(c)(4)(A)" for "the system

of preferences established by the agency pursuant to section

1437d(c)(4)(A)(ii)". See Effective and Termination Dates of 1996

Amendments note below.

Subsec. (d). Pub. L. 104-330, Sec. 501(b)(7)(A), redesignated

par. (1) as entire subsec. and struck out par. (2) which read as

follows: "The limitations established in subsections (a) and (b) of

this section shall not apply to dwelling units assisted by Indian

public housing agencies, to scattered site public housing dwelling

units sold or intended to be sold to public housing tenants under

section 1437c(h) of this title.."

Subsec. (e). Pub. L. 104-120, Sec. 9(d)(2), added subsec. (e).

Subsec. (e)(3). Pub. L. 104-330, Sec. 501(b)(7)(B), struck out

heading and text of par. (3). Text read as follows: "This

subsection does not apply to any dwelling unit assisted by an

Indian housing authority."

1992 - Subsec. (c). Pub. L. 102-550, Sec. 105(a), substituted

"very low-income families and shall" for "very low-income families,

shall" and ". In developing such admission procedures, the

Secretary shall" for ", and shall" and inserted "; except that such

prohibition shall not apply with respect to families selected for

occupancy in public housing under the system of preferences

established by the agency pursuant to section 1437d(c)(4)(A)(ii) of

this title" after "higher income families for residence".

Subsec. (d)(2). Pub. L. 102-550, Sec. 105(b), inserted before

period at end ", to scattered site public housing dwelling units

sold or intended to be sold to public housing tenants under section

1437c(h) of this title."

1990 - Subsec. (a). Pub. L. 101-625, Sec. 572(1), substituted

"low-income families" for "lower income families".

Subsec. (b). Pub. L. 101-625, Sec. 572(1), substituted

"low-income families" for "lower income families" in par. (1).

Pub. L. 101-625, Sec. 511, designated existing provisions as par.

(1), substituted "15 percent" for "5 per centum", and added par.

(2).

Subsecs. (c), (d)(1). Pub. L. 101-625, Sec. 572(1), substituted

"low-income families" for "lower income families" wherever

appearing.

1988 - Subsec. (b). Pub. L. 100-242, Sec. 112(b)(8), struck out

"annual" before "contributions".

Subsec. (c). Pub. L. 100-628 substituted "shall establish an

appropriate specific percentage of lower income families other than

very-low income families that may be assisted in each assisted

housing program" for "and shall establish, as appropriate,

differing percentage limitations on admission of lower income

families in separate assisted housing programs" and inserted before

period at end of first sentence ", and shall prohibit project

owners from selecting families for residence in an order different

from the order on the waiting list for the purpose of selecting

relatively higher income families for residence".

Pub. L. 100-242, Sec. 103, added subsec. (c).

Subsec. (d). Pub. L. 100-242, Sec. 103, added subsec. (d).

1983 - Subsec. (a). Pub. L. 98-181 increased to 25 from 10 the

percentage of dwelling units available for leasing.

EFFECTIVE DATE OF 1998 AMENDMENTS

Pub. L. 105-277, div. A, Sec. 123, Oct. 21, 1998, 112 Stat.

2681-546, provided that the amendment made by section 123 of Pub.

L. 105-277 is effective upon enactment of Pub. L. 105-276.

Amendment by title V of Pub. L. 105-276 effective and applicable

beginning upon Oct. 1, 1999, except as otherwise provided, with

provision that Secretary may implement amendment before such date,

except to extent that such amendment provides otherwise, and with

savings provision, see section 503 of Pub. L. 105-276, set out as a

note under section 1437 of this title.

Pub. L. 105-276, title V, Sec. 513(b), Oct. 21, 1998, 112 Stat.

2547, provided that: "This section [amending this section] shall

take effect on, and the amendments under this section are made on,

and shall apply beginning upon, the date of the enactment of this

Act [Oct. 21, 1998]."

EFFECTIVE AND TERMINATION DATES OF 1996 AMENDMENTS

Amendment by Pub. L. 104-330 effective Oct. 1, 1997, except as

otherwise expressly provided, see section 107 of Pub. L. 104-330,

set out as an Effective Date note under section 4101 of Title 25,

Indians.

Amendment by Pub. L. 104-120 to be construed to have become

effective Oct. 1, 1995, notwithstanding the effective date of any

regulations issued by Secretary of Housing and Urban Development to

implement amendments by sections 9 and 10 of Pub. L. 104-120 or any

failure by Secretary to issue any such regulations, see section 13

of Pub. L. 104-120, set out as a note under section 1437d of this

title.

Amendment by Pub. L. 104-99 effective Jan. 26, 1996, only for

fiscal years 1996, 1997, and 1998, and to cease to be effective

Oct. 21, 1998, see section 402(f) of Pub. L. 104-99, as amended,

and section 514(f) of Pub. L. 105-276, set out as notes under

section 1437a of this title.

EFFECTIVE DATE

Section effective Oct. 1, 1981, see section 371 of Pub. L. 97-35,

set out as a note under section 3701 of Title 12, Banks and

Banking.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1437c-1, 1437e, 1437f,

1437r, 1437bbb-4 of this title; title 12 section 1715z-1a.

-FOOTNOTE-

(!1) So in original. No subpar. (B) has been enacted.

(!2) So in original. Cl. (i) does not contain subclauses.

(!3) See References in Text note below.

-End-

-CITE-

42 USC Sec. 1437o 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437o. Repealed. Pub. L. 101-625, title II, Sec. 289(b), Nov.

28, 1990, 104 Stat. 4128

-MISC1-

Section, act Sept. 1, 1937, ch. 896, title I, Sec. 17, as added

Nov. 30, 1983, Pub. L. 98-181, title III, Sec. 301, 97 Stat. 1196;

amended Oct. 17, 1984, Pub. L. 98-479, title I, Sec. 103, 98 Stat.

2223; Oct. 18, 1986, Pub. L. 99-500, Sec. 101(g), 100 Stat.

1783-242, and Oct. 30, 1986, Pub. L. 99-591, Sec. 101(g), 100 Stat.

3341-242; Dec. 22, 1987, Pub. L. 100-202, Secs. 101(f) [title I,

Sec. 101], 106, 101 Stat. 1329-187, 1329-189, 1329-433; Feb. 5,

1988, Pub. L. 100-242, title I, Secs. 150, 151, 170(e), 101 Stat.

1853, 1854, 1867; renumbered title I, June 29, 1988, Pub. L.

100-358, Sec. 5, 102 Stat. 681; Nov. 7, 1988, Pub. L. 100-628,

title X, Sec. 1007, 102 Stat. 3266; June 30, 1989, Pub. L. 101-45,

title I, 103 Stat. 112; Dec. 15, 1989, Pub. L. 101-235, title III,

Sec. 304, 103 Stat. 2044; May 25, 1990, Pub. L. 101-302, title II,

104 Stat. 238; Nov. 5, 1990, Pub. L. 101-507, title II, 104 Stat.

1369; Nov. 28, 1990, Pub. L. 101-625, title V, Sec. 572(1), 104

Stat. 4236; Apr. 10, 1991, Pub. L. 102-27, title II, 105 Stat. 150;

Oct. 28, 1992, Pub. L. 102-550, title VI, Sec. 625(a)(4), 106 Stat.

3820, authorized Secretary to make rental rehabilitation and

development grants.

EFFECTIVE DATE OF REPEAL

Repeal effective Oct. 1, 1991, and except with respect to

projects and programs for which binding commitments have been

entered into prior to Oct. 1, 1991, no new grants or loans to be

made after Oct. 1, 1991, under this section, see section

12839(a)(1), (b)(1) of this title.

-End-

-CITE-

42 USC Sec. 1437p 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437p. Demolition and disposition of public housing

-STATUTE-

(a) Applications for demolition and disposition

Except as provided in subsection (b) of this section, upon

receiving an application by a public housing agency for

authorization, with or without financial assistance under this

subchapter, to demolish or dispose of a public housing project or a

portion of a public housing project (including any transfer to a

resident-supported nonprofit entity), the Secretary shall approve

the application, if the public housing agency certifies -

(1) in the case of -

(A) an application proposing demolition of a public housing

project or a portion of a public housing project, that -

(i) the project or portion of the public housing project is

obsolete as to physical condition, location, or other

factors, making it unsuitable for housing purposes; and

(ii) no reasonable program of modifications is

cost-effective to return the public housing project or

portion of the project to useful life; and

(B) an application proposing the demolition of only a portion

of a public housing project, that the demolition will help to

ensure the viability of the remaining portion of the project;

(2) in the case of an application proposing disposition by sale

or other transfer of a public housing project or other real

property subject to this subchapter -

(A) the retention of the property is not in the best

interests of the residents or the public housing agency because

-

(i) conditions in the area surrounding the public housing

project adversely affect the health or safety of the

residents or the feasible operation of the project by the

public housing agency; or

(ii) disposition allows the acquisition, development, or

rehabilitation of other properties that will be more

efficiently or effectively operated as low-income housing;

(B) the public housing agency has otherwise determined the

disposition to be appropriate for reasons that are -

(i) in the best interests of the residents and the public

housing agency;

(ii) consistent with the goals of the public housing agency

and the public housing agency plan; and

(iii) otherwise consistent with this subchapter; or

(C) for property other than dwelling units, the property is

excess to the needs of a public housing project or the

disposition is incidental to, or does not interfere with,

continued operation of a public housing project;

(3) that the public housing agency has specifically authorized

the demolition or disposition in the public housing agency plan,

and has certified that the actions contemplated in the public

housing agency plan comply with this section;

(4) that the public housing agency -

(A) will notify each family residing in a project subject to

demolition or disposition 90 days prior to the displacement

date, except in cases of imminent threat to health or safety,

consistent with any guidelines issued by the Secretary

governing such notifications, that -

(i) the public housing project will be demolished or

disposed of;

(ii) the demolition of the building in which the family

resides will not commence until each resident of the building

is relocated; and

(iii) each family displaced by such action will be offered

comparable housing -

(I) that meets housing quality standards;

(II) that is located in an area that is generally not

less desirable than the location of the displaced person's

housing; and

(III) which may include -

(aa) tenant-based assistance, except that the

requirement under this clause regarding offering of

comparable housing shall be fulfilled by use of

tenant-based assistance only upon the relocation of such

family into such housing;

(bb) project-based assistance; or

(cc) occupancy in a unit operated or assisted by the

public housing agency at a rental rate paid by the family

that is comparable to the rental rate applicable to the

unit from which the family is vacated;

(B) will provide for the payment of the actual and reasonable

relocation expenses of each resident to be displaced;

(C) will ensure that each displaced resident is offered

comparable housing in accordance with the notice under

subparagraph (A); and (!1)

(D) will provide any necessary counseling for residents who

are displaced; and

(E) will not commence demolition or complete disposition

until all residents residing in the building are relocated;

(5) that the net proceeds of any disposition will be used -

(A) unless waived by the Secretary, for the retirement of

outstanding obligations issued to finance the original public

housing project or modernization of the project; and

(B) to the extent that any proceeds remain after the

application of proceeds in accordance with subparagraph (A),

for -

(i) the provision of low-income housing or to benefit the

residents of the public housing agency; or

(ii) leveraging amounts for securing commercial

enterprises, on-site in public housing projects of the public

housing agency, appropriate to serve the needs of the

residents; and

(6) that the public housing agency has complied with subsection

(c) of this section.

(b) Disapproval of applications

The Secretary shall disapprove an application submitted under

subsection (a) of this section if the Secretary determines that -

(1) any certification made by the public housing agency under

that subsection is clearly inconsistent with information and data

available to the Secretary or information or data requested by

the Secretary; or

(2) the application was not developed in consultation with -

(A) residents who will be affected by the proposed demolition

or disposition;

(B) each resident advisory board and resident council, if

any, of the project (or portion thereof) that will be affected

by the proposed demolition or disposition; and

(C) appropriate government officials.

(c) Resident opportunity to purchase in case of proposed

disposition

(1) In general

In the case of a proposed disposition of a public housing

project or portion of a project, the public housing agency shall,

in appropriate circumstances, as determined by the Secretary,

initially offer the property to any eligible resident

organization, eligible resident management corporation, or

nonprofit organization acting on behalf of the residents, if that

entity has expressed an interest, in writing, to the public

housing agency in a timely manner, in purchasing the property for

continued use as low-income housing.

(2) Timing

(A) Expression of interest

A resident organization, resident management corporation, or

other resident-supported nonprofit entity referred to in

paragraph (1) may express interest in purchasing property that

is the subject of a disposition, as described in paragraph (1),

during the 30-day period beginning on the date of notification

of a proposed sale of the property.

(B) Opportunity to arrange purchase

If an entity expresses written interest in purchasing a

property, as provided in subparagraph (A), no disposition of

the property shall occur during the 60-day period beginning on

the date of receipt of that written notice (other than to the

entity providing the notice), during which time that entity

shall be given the opportunity to obtain a firm commitment for

financing the purchase of the property.

(d) Replacement units

Notwithstanding any other provision of law, replacement public

housing units for public housing units demolished in accordance

with this section may be built on the original public housing

location or in the same neighborhood as the original public housing

location if the number of the replacement public housing units is

significantly fewer than the number of units demolished.

(e) Consolidation of occupancy within or among buildings

Nothing in this section may be construed to prevent a public

housing agency from consolidating occupancy within or among

buildings of a public housing project, or among projects, or with

other housing for the purpose of improving living conditions of, or

providing more efficient services to, residents.

(f) De minimis exception to demolition requirements

Notwithstanding any other provision of this section, in any

5-year period a public housing agency may demolish not more than

the lesser of 5 dwelling units or 5 percent of the total dwelling

units owned by the public housing agency, 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.

(g) Uniform Relocation and Real Property Acquisition Act

The Uniform Relocation and Real Property Acquisition Policies Act

of 1970 [42 U.S.C. 4601 et seq.] shall not apply to activities

under this section.

(h) Relocation and replacement

Of the amounts appropriated for tenant-based assistance under

section 1437f of this title in any fiscal year, the Secretary may

use such sums as are necessary for relocation and replacement

housing for dwelling units that are demolished and disposed of from

the public housing inventory (in addition to other amounts that may

be available for such purposes).

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 18, as added Pub. L. 98-181,

title II, Sec. 214(a), Nov. 30, 1983, 97 Stat. 1184; amended Pub.

L. 100-242, title I, Secs. 112(b)(9), 121, 170(f), Feb. 5, 1988,

101 Stat. 1824, 1837, 1867; renumbered title I, Pub. L. 100-358,

Sec. 5, June 29, 1988, 102 Stat. 681; Pub. L. 101-625, title IV,

Sec. 412, title V, Secs. 512(a), 513(b), (c), 572, Nov. 28, 1990,

104 Stat. 4159, 4194-4196, 4236; Pub. L. 102-550, title I, Secs.

111(b)(2), 116(a)-(c), Oct. 28, 1992, 106 Stat. 3688, 3693, 3694;

Pub. L. 104-19, title I, Sec. 1002(a), July 27, 1995, 109 Stat.

235; Pub. L. 104-134, title I, Sec. 101(e) [title II, Sec.

201(b)(2)], Apr. 26, 1996, 110 Stat. 1321-257, 1321-278; renumbered

title I, Pub. L. 104-140, Sec. 1(a), May 2, 1996, 110 Stat. 1327;

Pub. L. 105-276, title V, Sec. 531(a), Oct. 21, 1998, 112 Stat.

2570.)

-REFTEXT-

REFERENCES IN TEXT

The Uniform Relocation and Real Property Acquisition Policies Act

of 1970, referred to in subsec. (g), probably means the Uniform

Relocation Assistance and Real Property Acquisition Policies Act of

1970, Pub. L. 91-646, Jan. 2, 1971, 84 Stat. 1894, as amended, and

which is classified principally to chapter 61 (Sec. 4601 et seq.)

of this title. For complete classification of this Act to the Code,

see Short Title note set out under section 4601 of this title and

Tables.

-MISC1-

AMENDMENTS

1998 - Pub. L. 105-276 amended section generally. Prior to

amendment, subsec. (a) required the Secretary to make certain

determinations before approving the demolition or disposition of

all or part of a public housing project; subsec. (b) required

public housing agency consultation with tenants and provision of

relocation assistance; subsec. (c) authorized financial assistance

using section 1437c contributions; subsec. (d) provided that agency

would not be prevented from consolidating occupancy within or among

buildings or projects; subsec. (e) provided set-asides for

replacement housing in fiscal years 1993 and 1994; subsec. (f)

authorized construction on original site if number of new units

would be less than number of demolished units; and subsec. (g)

declared that this section did not apply to dispositions in

accordance with approved homeownership program under subchapter

II-A of this chapter.

1996 - Subsec. (f). Pub. L. 104-134 inserted at end "No one may

rely on the preceding sentence as the basis for reconsidering a

final order of a court issued, or a settlement approved, by a

court."

1995 - Subsec. (b)(1). Pub. L. 104-19, Sec. 1002(a)(1), inserted

"and" after "housing assistance plan;".

Subsec. (b)(2). Pub. L. 104-19, Sec. 1002(a)(2), substituted ",

and the public housing agency provides for the payment of the

relocation expenses of each tenant to be displaced, ensures that

the rent paid by the tenant following relocation will not exceed

the amount permitted under this chapter and shall not commence

demolition or disposition of any unit until the tenant of the unit

is relocated." for "; and".

Subsec. (b)(3). Pub. L. 104-19, Sec. 1002(a)(3), struck out par.

(3) which made approval conditional upon development of plan for

provision of additional unit for each unit to be demolished or

disposed of.

Subsec. (c). Pub. L. 104-19, Sec. 1002(a)(4), (5), struck out

par. (1) designation and text of par. (2), which read as follows:

"The Secretary shall, upon approving a plan under subsection (b)(3)

of this section, agree to commit (subject to the availability of

future appropriations) the funds necessary to carry out the plan

over the approved schedule of the plan. As part of each annual

budget request for the Department of Housing and Urban Development,

the Secretary shall submit to the Congress a report -

"(A) outlining the commitments the Secretary entered into

during the preceding year to fund plans approved under subsection

(b)(3) of this section; and

"(B) specifying, by fiscal year, the budget authority required

to carry out the commitments specified in subparagraph (A)."

Subsec. (d). Pub. L. 104-19, Sec. 1002(a)(6), inserted before

period at end ": Provided, That nothing in this section shall

prevent a public housing agency from consolidating occupancy within

or among buildings of a public housing project, or among projects,

or with other housing for the purpose of improving the living

conditions of or providing more efficient services to its tenants".

Subsec. (e). Pub. L. 104-19, Sec. 1002(a)(7), which directed the

striking of "under section (b)(3)(A) of this section" each place it

occurred, was executed by striking out "under subsection (b)(3)(A)

of this section" before "for units demolished or disposed of" in

two places, to reflect the probable intent of Congress.

Subsecs. (f), (g). Pub. L. 104-19, Sec. 1002(a)(8), (9), added

subsec. (f) and redesignated former subsec. (f) as (g).

1992 - Subsec. (a)(3). Pub. L. 102-550, Sec. 111(b)(2), added

par. (3).

Subsec. (b)(1). Pub. L. 102-550, Sec. 116(a), inserted "of the

project or portion of the project covered by the application" after

"tenant cooperative".

Subsec. (b)(3). Pub. L. 102-550, Sec. 116(b)(5), inserted at end

"except that, in any 5-year period, a public housing agency may

demolish not more than the lesser of 5 dwelling units or 5 percent

of the total dwelling units owned and operated by the public

housing agency, without providing an additional dwelling unit for

each such public housing dwelling unit to be demolished, but only

if the space occupied by the demolished unit is used for meeting

the service or other needs of public housing residents."

Subsec. (b)(3)(A)(ii). Pub. L. 102-550, Sec. 116(b)(1)(A),

inserted before semicolon at end "to the extent available; or if

such assistance is not available, in the case of an application

proposing demolition or disposition of 200 or more units, the use

of available project-based assistance under section 1437f of this

title having a term of not less than 5 years".

Subsec. (b)(3)(A)(iii). Pub. L. 102-550, Sec. 116(b)(1)(B),

inserted before semicolon at end "to the extent available; or if

such assistance is not available, in the case of an application

proposing demolition or disposition of 200 or more units, the use

of available project-based assistance under other Federal programs

having a term of not less than 5 years".

Subsec. (b)(3)(A)(v). Pub. L. 102-550, Sec. 116(b)(1)(C),

inserted before semicolon "to the extent available; or if such

assistance is not available, in the case of an application

proposing demolition or disposition of 200 or more units, the use

of tenant-based assistance under section 1437f of this title

(excluding vouchers under section 1437f(o) of this title) having a

term of not less than 5 years".

Subsec. (b)(3)(B). Pub. L. 102-550, Sec. 116(b)(4), added subpar.

(B). Former subpar. (B) redesignated (C).

Subsec. (b)(3)(C) to (F). Pub. L. 102-550, Sec. 116(b)(3),

redesignated subpars. (B) to (E) as (C) to (F), respectively.

Former subpar. (F) redesignated (G).

Subsec. (b)(3)(G). Pub. L. 102-550, Sec. 116(b)(3), redesignated

subpar. (F) as (G). Former subpar. (G) redesignated (H).

Pub. L. 102-550, Sec. 116(b)(2), substituted "tenant's choice;"

for "tenant's choice."

Subsec. (b)(3)(H). Pub. L. 102-550, Sec. 116(b)(3), redesignated

subpar. (G) as (H).

Subsecs. (e), (f). Pub. L. 102-550, Sec. 116(c), added subsec.

(e) and redesignated former subsec. (e) as (f).

1990 - Subsec. (a)(2)(A)(i). Pub. L. 101-625, Sec. 572(2),

substituted "low-income housing" for "lower income housing"

wherever appearing.

Subsec. (a)(2)(B). Pub. L. 101-625, Sec. 572, substituted

"low-income families" for "lower income families" and "low-income

housing" for "lower income housing" wherever appearing.

Pub. L. 101-625, Sec. 512(a), inserted before first comma ",

which, in the case of scattered-site housing of a public housing

agency, shall be in an amount that bears the same ratio to the

total of such costs and obligations as the number of units disposed

of bears to the total number of units of the project at the time of

disposition".

Subsec. (b)(1). Pub. L. 101-625, Sec. 412(a), substituted

"disposition, and the tenant councils, resident management

corporation, and tenant cooperative, if any, have been given

appropriate opportunities to purchase the project or portion of the

project covered by the application," for "disposition".

Subsec. (c)(2). Pub. L. 101-625, Sec. 513(b), inserted at end "As

part of each annual budget request for the Department of Housing

and Urban Development, the Secretary shall submit to the Congress a

report - ", and added subpars. (A) and (B).

Subsec. (c)(3). Pub. L. 101-625, Sec. 513(c), struck out par. (3)

which read as follows: "The Secretary shall, in allocating

assistance for the acquisition or development of public housing or

for moderate rehabilitation under section 1437f(e)(2) of this

title, give consideration to housing that replaces demolished

public housing units in accordance with a plan under subsection

(b)(3) of this section."

Subsec. (e). Pub. L. 101-625, Sec. 412(b), added subsec. (e).

1988 - Subsec. (a)(1). Pub. L. 100-242, Sec. 121(a), substituted

"and" for "or" after "purposes,".

Subsec. (b). Pub. L. 100-242, Sec. 170(f), inserted "or" after

"under this section".

Subsec. (b)(3). Pub. L. 100-242, Sec. 121(b), added par. (3).

Subsec. (c). Pub. L. 100-242, Sec. 121(c), designated existing

provisions as par. (1) and added pars. (2) and (3).

Pub. L. 100-242, Sec. 112(b)(9), substituted "contributions

authorized under section 1437c" for "annual contributions

authorized under section 1437c(c)".

Subsec. (d). Pub. L. 100-242, Sec. 121(d), added subsec. (d) and

struck out former subsec. (d) which read as follows: "The

provisions of this section shall not apply to the conveyance of

units in a public housing project for the purpose of providing

homeownership opportunities for lower income families capable of

assuming the responsibilities of homeownership."

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-276, title V, Sec. 531(c), Oct. 21, 1998, 112 Stat.

2574, provided that: "This section [amending this section and

section 1437aaa-3 of this title and enacting provisions set out as

a note under section 1437aaa-3 of this title] shall take effect on,

and the amendments made by this section are made on, and shall

apply beginning upon, the date of the enactment of this Act [Oct.

21, 1998]."

EFFECTIVE DATE OF 1995 AMENDMENT

Amendment by Pub. L. 104-19 effective for applications for

demolition, disposition, or conversion to homeownership of public

housing approved by the Secretary, and other consolidation and

relocation activities of public housing agencies undertaken on,

before, or after Sept. 30, 1995 and on or before Sept. 30, 1998,

see section 1002(d) of Pub. L. 104-19, as amended, set out as a

note under section 1437c of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Section 512(b) of Pub. L. 101-625 provided that: "The amendment

made by this section [amending this section] shall apply to any

scattered-site public housing project or portion of such project

disposed of after the date of the enactment of this Act [Nov. 28,

1990]."

REPLACEMENT HOUSING DEMONSTRATION PROGRAM

Section 513(a) of Pub. L. 101-625 directed Secretary of Housing

and Urban Development to carry out a program to demonstrate the

effectiveness of replacing public housing dwelling units eligible

for demolition or disposition with 5-year certificate assistance

provided under 42 U.S.C. 1437f, with Secretary to carry out the

demonstration only with respect to public housing dwelling units

owned or operated by the public housing authority for Saint Louis,

Missouri, that before the termination of the demonstration program

under this subsection are approved for demolition or disposition,

and with the demonstration program to terminate at end of Sept. 30,

1992.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1437c-1, 1437d, 1437t,

1437v, 1437z-4, 1437z-5, 1437bbb-4 of this title.

-FOOTNOTE-

(!1) So in original. The word "and" probably should not appear.

-End-

-CITE-

42 USC Sec. 1437q 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437q. Financing limitations

-STATUTE-

On and after October 1, 1983, the Secretary -

(1) may only enter into contracts for annual contributions

regarding obligations financing public housing projects

authorized by section 1437c(c) of this title if such obligations

are exempt from taxation under section 1437i(b) of this title, or

if such obligations are issued under section 1437b of this title

and such obligations are exempt from taxation; and

(2) may not enter into contracts for periodic payments to the

Federal Financing Bank to offset the costs to the Bank of

purchasing obligations (as described in the first sentence of

section 2294(b) of title 12) issued by local public housing

agencies for purposes of financing public housing projects

authorized by section 1437c(c) of this title.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 19, as added Pub. L. 98-181,

title II, Sec. 215, Nov. 30, 1983, 97 Stat. 1185; renumbered title

I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102 Stat. 681.)

-End-

-CITE-

42 USC Sec. 1437r 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437r. Public housing resident management

-STATUTE-

(a) Purpose

The purpose of this section is to encourage increased resident

management of public housing projects, as a means of improving

existing living conditions in public housing projects, by providing

increased flexibility for public housing projects that are managed

by residents by -

(1) permitting the retention, and use for certain purposes, of

any revenues exceeding operating and project costs; and

(2) providing funding, from amounts otherwise available, for

technical assistance to promote formation and development of

resident management entities.

For purposes of this section, the term "public housing project"

includes one or more contiguous buildings or an area of contiguous

row houses the elected resident councils of which approve the

establishment of a resident management corporation and otherwise

meet the requirements of this section.

(b) Program requirements

(1) Resident council

As a condition of entering into a resident management program,

the elected resident council of a public housing project shall

approve the establishment of a resident management corporation.

When such approval is made by the elected resident council of a

building or row house area, the resident management program shall

not interfere with the rights of other families residing in the

project or harm the efficient operation of the project. The

resident management corporation and the resident council may be

the same organization, if the organization complies with the

requirements applicable to both the corporation and council. The

corporation shall be a nonprofit corporation organized under the

laws of the State in which the project is located, and the

tenants of the project shall be the sole voting members of the

corporation. If there is no elected resident council, a majority

of the households of the public housing project shall approve the

establishment of a resident council to determine the feasibility

of establishing a resident management corporation to manage the

project.

(2) Public housing management specialist

The resident council of a public housing project, in

cooperation with the public housing agency, shall select a

qualified public housing management specialist to assist in

determining the feasibility of, and to help establish, a resident

management corporation and to provide training and other duties

agreed to in the daily operations of the project.

(3) Bonding and insurance

Before assuming any management responsibility for a public

housing project, the resident management corporation shall

provide fidelity bonding and insurance, or equivalent protection,

in accordance with regulations and requirements of the Secretary

and the public housing agency. Such bonding and insurance, or its

equivalent, shall be adequate to protect the Secretary and the

public housing agency against loss, theft, embezzlement, or

fraudulent acts on the part of the resident management

corporation or its employees.

(4) Management responsibilities

A resident management corporation that qualifies under this

section, and that supplies insurance and bonding or equivalent

protection sufficient to the Secretary and the public housing

agency, shall enter into a contract with the public housing

agency establishing the respective management rights and

responsibilities of the corporation and the public housing

agency. Such contract shall be consistent with the requirements

of this chapter applicable to public housing projects and may

include specific terms governing management personnel and

compensation, access to public housing project records,

submission of and adherence to budgets, rent collection

procedures, tenant income verification, tenant eligibility

determinations, tenant eviction, the acquisition of supplies and

materials, rent determination, community service

requirements,,(!1) and such other matters as may be appropriate.

The contract shall be treated as a contracting out of services

and shall be subject to any provision of a collective bargaining

agreement regarding contracting out to which the public housing

agency is subject.

(5) Annual audit

The books and records of a resident management corporation

operating a public housing project shall be audited annually by a

certified public accountant. A written report of each audit shall

be forwarded to the public housing agency and the Secretary.

(c) Assistance amounts

A contract under this section for management of a public housing

project by a resident management corporation shall provide for -

(1) the public housing agency to provide a portion of the

assistance to agency from the Capital and Operating Funds to the

resident management corporation in accordance with subsection (e)

of this section for purposes of operating the public housing

project covered by the contract and performing such other

eligible activities with respect to the project as may be

provided under the contract;

(2) the amount of income expected to be derived from the

project itself (from sources such as rents and charges);

(3) the amount of income to be provided to the project from the

other sources of income of the public housing agency (such as

interest income, administrative fees, and rents); and

(4) any income generated by a resident management corporation

of a public housing project that exceeds the income estimated

under the contract shall be used for eligible activities under

subsections (d)(1) and (e)(1) of section 1437g of this title.

(d) Waiver of Federal requirements

(1) Waiver of regulatory requirements

Upon the request of any resident management corporation and

public housing agency, and after notice and an opportunity to

comment is afforded to the affected tenants, the Secretary may

waive (for both the resident management corporation and the

public housing agency) any requirement established by the

Secretary (and not specified in any statute) that the Secretary

determines to unnecessarily increase the costs or restrict the

income of a public housing project.

(2) Waiver to permit employment

Upon the request of any resident management corporation, the

Secretary may, subject to applicable collective bargaining

agreements, permit residents of such project to volunteer a

portion of their labor.

(3) Exceptions

The Secretary may not waive under this subsection any

requirement with respect to income eligibility for purposes of

section 1437n of this title, rental payments under section

1437a(a) of this title, tenant or applicant protections, employee

organizing rights, or rights of employees under collective

bargaining agreements.

(e) Direct provision of operating and capital assistance

(1) In general

The Secretary shall directly provide assistance from the

Operating and Capital Funds to a resident management corporation

managing a public housing development pursuant to a contract

under this section, but only if -

(A) the resident management corporation petitions the

Secretary for the release of the funds;

(B) the contract provides for the resident management

corporation to assume the primary management responsibilities

of the public housing agency; and

(C) the Secretary determines that the corporation has the

capability to effectively discharge such responsibilities.

(2) Use of assistance

Any assistance from the Operating and Capital Funds provided to

a resident management corporation pursuant to this subsection

shall be used for purposes of operating the public housing

developments of the agency and performing such other eligible

activities with respect to public housing as may be provided

under the contract.

(3) Responsibility of public housing agency

If the Secretary provides direct funding to a resident

management corporation under this subsection, the public housing

agency shall not be responsible for the actions of the resident

management corporation.

(4) Calculation of Operating Fund allocation

Notwithstanding any provision of section 1437g of this title or

any regulation under such section, and subject to the exception

provided in paragraph (3), the portion of the amount received by

a public housing agency under section 1437g of this title that is

due to an allocation from the Operating Fund and that is

allocated to a public housing project managed by a resident

management corporation shall not be less than the public housing

agency per unit monthly amount provided in the previous year as

determined on an individual project basis.

(5) Calculation of total income

(A) Subject to subparagraph (B), the amount of funds provided

by a public housing agency to a public housing project managed by

a resident management corporation may not be reduced during the

3-year period beginning on February 5, 1988, or on any later date

on which a resident management corporation is first established

for the project.

(B) If the total income of a public housing agency (including

any amounts from the Capital or Operating Funds provided to the

public housing agency under section 1437g of this title) is

reduced or increased, the income provided by the public housing

agency to a public housing project managed by a resident

management corporation shall be reduced or increased in

proportion to the reduction or increase in the total income of

the public housing agency, except that any reduction in amounts

from the Operating Fund that occurs as a result of fraud, waste,

or mismanagement by the public housing agency shall not affect

the funds provided to the resident management corporation.

(6) Retention of excess revenues

(A) Any income generated by a resident management corporation

of a public housing project that exceeds the income estimated for

purposes of this subsection shall be excluded in subsequent years

in calculating (i) the allocations from the Operating Fund for

the public housing agency under section 1437g of this title; and

(ii) the funds provided by the public housing agency to the

resident management corporation.

(B) Any revenues retained by a resident management corporation

under subparagraph (A) shall be used for purposes of improving

the maintenance and operation of the public housing project, for

establishing business enterprises that employ residents of public

housing, or for acquiring additional dwelling units for

low-income families.

(f), (g) Repealed. Pub. L. 105-276, title V, Sec. 532(a)(5), Oct.

21, 1998, 112 Stat. 2575

(h) Applicability

Any management contract between a public housing agency and a

resident management corporation that is entered into after November

7, 1988, shall be subject to this section and the regulations

issued to carry out this section.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 20, as added Pub. L.

100-242, title I, Sec. 122, Feb. 5, 1988, 101 Stat. 1839;

renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102

Stat. 681; amended Pub. L. 100-628, title X, Sec. 1003, Nov. 7,

1988, 102 Stat. 3263; Pub. L. 101-625, title IV, Sec. 415, title V,

Secs. 514, 572(1), Nov. 28, 1990, 104 Stat. 4160, 4196, 4236; Pub.

L. 102-550, title I, Sec. 117, Oct. 28, 1992, 106 Stat. 3695; Pub.

L. 105-276, title V, Sec. 532(a), Oct. 21, 1998, 112 Stat. 2574.)

-MISC1-

PRIOR PROVISIONS

A prior section 1437r, act Sept. 1, 1937, ch. 896, Sec. 20, as

added Nov. 6, 1986, Pub. L. 99-603, title I, Sec. 121(b)(6), 100

Stat. 3391, related to payment for implementation of immigration

status verification system, prior to repeal by Pub. L. 100-242,

Sec. 164(f)(2).

AMENDMENTS

1998 - Subsec. (b)(4). Pub. L. 105-276, Sec. 532(a)(1), inserted

", rent determination, community service requirements," after

"materials".

Subsec. (c). Pub. L. 105-276, Sec. 532(a)(2), added subsec. (c)

and struck out heading and text of former subsec. (c). Text read as

follows: "Public housing projects managed by resident management

corporations may be provided with comprehensive improvement

assistance under section 1437l of this title for purposes of

renovating such projects in accordance with such section. If such

renovation activities (including the planning and architectural

design of the rehabilitation) are administered by a resident

management corporation, the public housing agency involved may not

retain, for any administrative or other reason, any portion of the

assistance provided pursuant to this subsection unless otherwise

provided by contract."

Subsec. (d)(3), (4). Pub. L. 105-276, Sec. 532(a)(3),

redesignated par. (4) as (3) and struck out heading and text of

former par. (3). Text read as follows: "Not later than 6 months

after February 5, 1988, the Secretary shall submit to the Congress

a report setting forth any additional waivers of Federal law that

the Secretary determines are necessary or appropriate to carry out

the provisions of this section. In preparing the report, the

Secretary shall consult with resident management corporations and

public housing agencies."

Subsec. (e)(1) to (3). Pub. L. 105-276, Sec. 532(a)(4)(B), added

subsec. heading and pars. (1) to (3) and struck out former subsec.

heading and former pars. (1) to (3), which in par. (1), specified

amount of operating subsidy to be allocated to a public housing

project managed by a resident management corporation; in par. (2),

set forth requirements for any contract for management of a project

entered into by a public housing agency and a resident management

corporation; and in par. (3), prohibited reduction of funds

provided by an agency to a project during 3-year period beginning

on date on which resident management corporation is first

established for the project, and provided for proportional

reduction or increase if total income of agency is reduced or

increased.

Subsec. (e)(4), (5). Pub. L. 105-276, Sec. 532(a)(4)(B), added

pars. (4) and (5). Former par. (4) redesignated (6).

Subsec. (e)(6). Pub. L. 105-276, Sec. 532(a)(4)(A), redesignated

par. (4) as (6).

Subsec. (e)(6)(A)(i). Pub. L. 105-276, Sec. 532(a)(4)(C),

substituted "the allocations from the Operating Fund for" for "the

operating subsidies provided to".

Subsec. (f). Pub. L. 105-276, Sec. 532(a)(5), struck out heading

and text of subsec. (f) which required Secretary to provide

financial assistance to resident management corporations or

resident councils that obtain technical assistance for the

development of resident management entities, limited assistance to

$100,000 with respect to any public housing project, authorized

appropriations for fiscal years 1993 and 1994, and limited

assistance to corporations or councils where assistance was

provided under subchapter II-A of this chapter.

Subsec. (g). Pub. L. 105-276, Sec. 532(a)(5), struck out heading

and text of subsec. (g). Text read as follows: "Not later than 3

years after February 5, 1988, the Secretary shall -

"(1) conduct an evaluation and assessment of resident

management, and particularly of the effect of resident management

on living conditions in public housing; and

"(2) submit to the Congress a report setting forth the findings

of the Secretary as a result of the evaluation and assessment and

including any recommendations the Secretary determines to be

appropriate."

1992 - Subsec. (f)(3). Pub. L. 102-550 amended par. (3)

generally. Prior to amendment, par. (3) read as follows: "(3)

Funding. - Of amounts made available for financial assistance under

section 1437l of this title, the Secretary may use to carry out

this subsection not more than $5,000,000 for each of fiscal years

1991 and 1992."

1990 - Subsec. (e)(4)(B). Pub. L. 101-625, Sec. 572(1),

substituted "low-income families" for "lower income families".

Subsec. (f)(3). Pub. L. 101-625, Sec. 514, amended par. (3)

generally. Prior to amendment, par. (3) read as follows: "Of the

amounts available for financial assistance under section 1437l of

this title, the Secretary may use to carry out this subsection not

more than $2,500,000 for fiscal year 1988 and not more than

$2,500,000 for fiscal year 1989."

Subsec. (f)(4). Pub. L. 101-625, Sec. 415, added par. (4).

1988 - Subsec. (h). Pub. L. 100-628 added subsec. (h).

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by title V of Pub. L. 105-276 effective and applicable

beginning upon Oct. 1, 1999, except as otherwise provided, with

provision that Secretary may implement amendment before such date,

except to extent that such amendment provides otherwise, and with

savings provision, see section 503 of Pub. L. 105-276, set out as a

note under section 1437 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1437s, 1437aaa-5, 12876

of this title.

-FOOTNOTE-

(!1) So in original.

-End-

-CITE-

42 USC Sec. 1437s 01/06/03

-EXPCITE-

TITLE 42 - THE PUBLIC HEALTH AND WELFARE

CHAPTER 8 - LOW-INCOME HOUSING

SUBCHAPTER I - GENERAL PROGRAM OF ASSISTED HOUSING

-HEAD-

Sec. 1437s. Public housing homeownership and management

opportunities

-STATUTE-

(a) Homeownership opportunities in general

Low-income families residing in a public housing project shall be

provided with the opportunity to purchase the dwelling units in the

project through a qualifying resident management corporation as

follows:

(1) Formation of resident management corporation

As a condition for public housing homeownership -

(A) the adult residents of a public housing project shall

have formed a resident management corporation in accordance

with regulations and requirements of the Secretary prescribed

under this section and section 1437r of this title;

(B) the resident management corporation shall have entered

into a contract with the public housing agency establishing the

respective management rights and responsibilities of the

resident management corporation and the public housing agency;

and

(C) the resident management corporation shall have

demonstrated its ability to manage public housing effectively

and efficiently for a period of not less than 3 years.

(2) Homeownership assistance

(A) The Secretary may provide assistance from the Capital Fund

to a public housing project in which homeownership activities

under this section are conducted.

(B) The Secretary may provide financial assistance to public

housing agencies, resident management corporations, or resident

councils that obtain, by contract or otherwise, training,

technical assistance, and educational assistance as the Secretary

determines to be necessary to promote homeownership opportunities

under this section.

(C) This paragraph shall not have effect after February 4,

1991. The Secretary may not provide financial assistance under

subparagraph (B), after such date, unless the Secretary

determines that such assistance is necessary for the development

of a homeownership program that was initiated, as determined by

the Secretary, before November 28, 1990.

(3) Conditions of purchase by a resident management corporation

(A) A resident management corporation may purchase from a

public housing agency one or more multifamily buildings in a

public housing project following a determination by the Secretary

that -

(i) the resident management corporation has met the

conditions of paragraph (1);

(ii) the resident management corporation has applied for and

is prepared to undertake the ownership, management, and

maintenance of the building or buildings with continued

assistance from the Secretary;

(iii) the public housing agency has held one or more public

hearings to obtain the views of citizens regarding the proposed

purchase and, in consultation with the Secretary, has certified

that the purchase will not interfere with the rights of other

families residing in public housing, will not harm the

efficient operation of other public housing, and is in the

interest of the community;

(iv) the public housing agency has certified that it has and

will implement a plan to replace public housing units sold

under this section within 30 months of the sale, which plan

shall provide for replacement of 100 percent of the units sold

under this section by -

(I) production, acquisition, or rehabilitation of vacant

public housing units by the public housing agency; and

(II) acquisition by the resident management corporation of

nonpublicly owned, decent, and affordable housing units,

which the resident management corporation shall operate as

rental housing subject to tenant income and rent limitations

comparable to the limitations applicable to public housing;

and

(v) the building or buildings meet the housing quality

standards applicable under section 1437d(f) of this title, and

the physical condition, management, and operation of the

building or buildings are sufficient to permit affordable

homeownership by the families residing in the project.

(B) The price of a building purchased under the preceding

sentence shall be approved by the Secretary, in consultation with

the public housing agency and resident management corporation,

taking into account the fair market value of the property, the

ability of resident families to afford and maintain the property,

and such other factors as the Secretary determines to be

consistent with increasing the supply of dwelling units

affordable to very low income families.

(C) This paragraph shall not have effect after February 4,

1991. The authority for a resident management corporation to

purchase 1 or more multifamily buildings in a public housing

project from a public housing agency shall terminate after such

date, unless the Secretary determines that such purchase is

necessary for the development of a homeownership program that was

initiated, as determined by the Secretary, before November 28,

1990.

(4) Conditions of resale

(A)(i) A resident management corporation may sell a dwelling

unit or ownership rights in a dwelling unit only to a lower

income family residing in, or eligible to reside in, public

housing and only if the Secretary determines that the purchase

will not interfere with the rights of other families residing in

the housing project or harm the efficient operation of the

project, and the family will be able to purchase and maintain the

property.

(ii) The sale of dwelling units or ownership rights in dwelling

units under clause (i) shall be made to families in the following

order of priority:

(I) a lower income family residing in the public housing

project in which the dwelling unit is located;

(II) a lower income family residing in any public housing

project within the jurisdiction of the public housing agency

having jurisdiction with respect to the project in which the

dwelling unit is located;

(III) a lower income family receiving Federal housing

assistance and residing in the jurisdiction of such public

housing agency; and

(IV) a lower income family on the waiting list of such public

housing agency for public housing or assistance under section

1437f of this title, with priority given in the order in which

the family appears on the waiting list.

(iii) Each resident management corporation shall provide each

family described in clause (ii) with a notice of the eligibility

of the family to purchase a dwelling unit under this paragraph.

(B) A purchase under subparagraph (A) may be made under any of

the following arrangements:

(i) Limited dividend cooperative ownership.

(ii) Condominium ownership.

(iii) Fee simple ownership.

(iv) Shared appreciation with a public housing agency

providing financing under paragraph (6).

(v) Any other arrangement determined by the Secretary to be

appropriate.

(C) Property purchased under this section shall be resold only

to the resident management corporation, a lower income family

residing in or eligible to reside in public housing or housing

assisted under section 1437f of this title, or to the public

housing agency.

(D) In no case may the owner receive consideration for his or

her interest in the property that exceeds the total of -

(i) the contribution to equity paid by the owner;

(ii) the value, as determined by such means as the Secretary

shall determine through regulation, of any improvements

installed at the expense of the owner during the owner's tenure

as owner; and

(iii) the appreciated value determined by an inflation

allowance at a rate which may be based on a cost of living

index, an income index, or market index as determined by the

Secretary through regulation and agreed to by the purchaser and

the resident management corporation or the public housing

agency, whichever is appropriate, at the time of initial sale,

and applied against the contribution to equity; the resident

management corporation or the public housing agency may, at the

time of initial sale, enter into an agreement with the owner to

set a maximum amount which this appreciation may not exceed.

(E) Upon sale, the resident management corporation or the

public housing agency, whichever is appropriate, shall ensure

that subsequent owners are bound by the same limitations on

resale and further restrictions on equity appreciation.

(5) Use of proceeds

Notwithstanding any other provision of this chapter or other

law to the contrary, proceeds from the sale of a building or

buildings under paragraph (3) and amounts recaptured under

paragraph (4) shall be paid to the public housing agency and

shall be retained and used by the public housing agency only to

increase the number of public housing units available for

occupancy. The resident management corporation shall keep and

make available to the public housing agency and the Secretary all

records necessary to calculate accurately payments due the local

housing agency under this section. The Secretary shall not reduce

or delay payments under other provisions of law as a result of

amounts made available to the local housing agency under this

section.

(6) Financing

When financing for the purchase of the property is not

otherwise available for purposes of assisting any purchase by a

family or resident management corporation under this section, the

public housing agency involved may make a loan on the security of

the property involved to the family or resident management

corporation at a rate of interest that shall not be lower than 70

percent of the market interest rate for conventional mortgages on

the date on which the loan is made.

(7) Capital and operating assistance

Notwithstanding the purchase of a building in a public housing

project under this section, the Secretary shall continue to

provide assistance under section 1437g of this title with respect

to the project. Such assistance may not exceed the allocation for

the project under section 1437g of this title.

(8) Operating Fund allocation

Amounts from the Operating Fund shall not be available with

respect to a building after the date of its sale by the public

housing agency.

(b) Protection of nonpurchasing families

(1) Eviction prohibition

No family residing in a dwelling unit in a public housing

project may be evicted by reason of the sale of the project to a

resident management corporation under this section.

(2) Tenants rights

Families renting a dwelling unit purchased by a resident

management corporation shall have all rights provided to tenants

of public housing under this chapter.

(3) Rental assistance

If any family resides in a dwelling unit in a building

purchased by a resident management corporation, and the family

decides not to purchase the dwelling unit, the Secretary shall

offer to provide to the family (at the option of the family)

tenant-based assistance under section 1437f(o) of this title for

as long as the family continues to reside in the building. The

Secretary may adjust the payment standard for such assistance to

take into account conditions under which the building was

purchased.

(4) Rental and relocation assistance

If any family resides in a dwelling unit in a public housing

project in which other dwelling units are purchased under this

section, and the family decides not to purchase the dwelling

unit, the Secretary shall offer (to be selected by the family, at

its option) -

(A) to assist the family in relocating to a comparable

appropriate sized dwelling unit in another public housing

project, and to reimburse the family for their cost of

relocation; and

(B) to provide to the family the financial assistance

necessary to permit the family to stay in the dwelling unit or

to move to another comparable dwelling unit and to pay no more

for rent than required under subparagraph (A), (B), or (C) of

section 1437a(a)(1) of this title.

(c) Financial assistance for public housing agencies

The Secretary shall provide to public housing agencies such

financial assistance as is necessary to permit such agencies to

carry out the provisions of this section.

(d) Additional homeownership and management opportunities

This section shall not apply to the turnkey III, the mutual help,

or any other homeownership program established under section

1437d(c)(4)(D) of this title, as in effect before the effective

date under section 503(a) of the Quality Housing and Work

Responsibility Act of 1998, and in existence before February 5,

1988.

(e) Regulations

The Secretary shall issue such regulations as may be necessary to

carry out the provisions of this section. Such regulations may

establish any additional terms and conditions for homeownership or

resident management under this section that are determined by the

Secretary to be appropriate.

(f) Repealed. Pub. L. 104-66, title I, Sec. 1071(a), Dec. 21, 1995,

109 Stat. 720

(g) Limitation

Any authority of the Secretary under this section to provide

financial assistance, or to enter into contracts to provide

financial assistance, shall be effective only to such extent or in

such amounts as are or have been provided in advance in an

appropriation Act.

-SOURCE-

(Sept. 1, 1937, ch. 896, title I, Sec. 21, as added Pub. L.

100-242, title I, Sec. 123, Feb. 5, 1988, 101 Stat. 1842;

renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 102

Stat. 681; amended Pub. L. 101-625, title IV, Sec. 416, title V,

Sec. 572(1), Nov. 28, 1990, 104 Stat. 4161, 4236; Pub. L. 102-550,

title I, Sec. 118, Oct. 28, 1992, 106 Stat. 3695; Pub. L. 104-66,

title I, Sec. 1071(a), Dec. 21, 1995, 109 Stat. 720; Pub. L.

105-276, title V, Secs. 518(a)(2)(A), 532(b), Oct. 21, 1998, 112

Stat. 2551, 2575.)

-REFTEXT-

REFERENCES IN TEXT

Section 503(a) of the Quality Housing and Work Responsibility Act

of 1998, referred to in subsec. (d), is section 503(a) of Pub. L.

105-276, which is set out as an Effective Date of 1998 Amendment

note under section 1437 of this title.

-MISC1-

AMENDMENTS

1998 - Subsec. (a)(2)(A). Pub. L. 105-276, Sec. 532(b)(1)(A),

substituted "assistance from the Capital Fund" for "comprehensive

improvement assistance under section 1437l of this title".

Subsec. (a)(3)(A)(v). Pub. L. 105-276, Sec. 532(b)(1)(B),

substituted "housing quality standards applicable under section

1437d(f) of this title" for "minimum safety and livability

standards applicable under section 1437l of this title".

Subsec. (a)(7). Pub. L. 105-276, Sec. 532(b)(1)(C), in heading,

substituted "Capital and operating assistance" for "Annual

contributions", in first sentence, substituted "provide assistance

under section 1437g of this title" for "pay annual contributions",

and at end, substituted "Such assistance may not exceed the

allocation for the project under section 1437g of this title" for

"Such contributions may not exceed the maximum contributions

authorized in section 1437c(a) of this title."

Subsec. (a)(8). Pub. L. 105-276, Sec. 532(b)(1)(D), in heading

substituted "fund allocation" for "subsidies" and in text

substituted "Amounts from the Operating Fund" for "Operating

subsidies".

Subsec. (b)(3). Pub. L. 105-276, Sec. 532(b)(2), in first

sentence, substituted "tenant-based assistance" for "a certificate

under section 1437f(b)(1) of this title or a housing voucher" and,

in second sentence, substituted "payment standard for such

assistance" for "fair market rent for such certificate".

Subsec. (d). Pub. L. 105-276, Sec. 532(b)(3), inserted ", as in

effect before the effective date under section 503(a) of the

Quality Housing and Work Responsibility Act of 1998," after

"section 1437d(c)(4)(D) of this title".

Pub. L. 105-276, Sec. 518(a)(2)(A), struck out "section 1437c(h)

of this title or" after "program established under".

1995 - Subsec. (f). Pub. L. 104-66 struck out heading and text of

subsec. (f). Text read as follows: "The Secretary shall annually

submit to the Congress a report setting forth -

"(1) the number, type, and cost of units sold;

"(2) the income, race, gender, children, and other

characteristics of families purchasing or moving and not

purchasing;

"(3) the amount and type of financial assistance provided;

"(4) the need for subsidy to ensure continued affordability and

meet future maintenance and repair costs;

"(5) any need for the development of additional public housing

dwelling units as a result of the sale of public housing dwelling

units under this section;

"(6) recommendations of the Secretary for additional budget

authority to carry out such development;

"(7) recommendations of the Secretary to ensure decent homes

and decent neighborhoods for low-income families; and

"(8) the recommendations of the Secretary for statutory and

regulatory improvements to the program."

1992 - Subsec. (a)(2)(C), (3)(C). Pub. L. 102-550 substituted

"February 4, 1991" for "the effective date of the regulations

implementing subchapter II-A of this chapter" and "after such date"

for "after such effective date" and made technical amendment to

reference to November 28, 1990, to reflect correction of

corresponding provisions of original act.

1990 - Subsec. (a). Pub. L. 101-625, Sec. 572(1), which directed

substitution of "low-income families" for "lower income families",

was executed by substituting "Low-income families" for "Lower

income families" in introductory provisions to reflect the probable

intent of Congress.

Subsec. (a)(2)(B). Pub. L. 101-625, Sec. 416(1), amended subpar.

(B) generally. Prior to amendment, subpar. (B) read as follows:

"The Secretary, and the public housing agency owning and operating

a public housing project, shall provide such training, technical

assistance, and educational assistance as the Secretary determines

to be necessary to prepare the families residing in the project,

and any resident management corporation established under paragraph

(1), for homeownership."

Subsec. (a)(2)(C). Pub. L. 101-625, Sec. 416(2), substituted "the

effective date of the regulations implementing subchapter II-A of

this chapter. The Secretary may not provide financial assistance

under subparagraph (B), after such effective date, unless the

Secretary determines that such assistance is necessary for the

development of a homeownership program that was initiated, as

determined by the Secretary, before November 28, 1990" for

"September 30, 1990".

Subsec. (a)(3)(C). Pub. L. 101-625, Sec. 416(3), substituted "the

effective date of the regulations implementing subchapter II-A of

this chapter. The authority for a resident management corporation

to purchase 1 or more multifamily buildings in a public housing

project from a public housing agency shall terminate after such

effective date, unless the Secretary determines that such purchase

is necessary for the development of a homeownership program that

was initiated, as determined by the Secretary, before November 28,

1990" for "September 30, 1990".

Subsec. (f)(7). Pub. L. 101-625, Sec. 572(1), substituted

"low-income families" for "lower income families".

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by title V of Pub. L. 105-276 effective and applicable

beginning upon Oct. 1, 1999, except as otherwise provided, with

provision that Secretary may implement amendment before such date,

except to extent that such amendment provides otherwise, and with

savings provision, see section 503 of Pub. L. 105-276, set out as a

note under section 1437 of this title.

-End-