S. 1299 (103rd): Multifamily Housing Property Disposition Reform Act of 1994

103rd Congress, 1993–1994. Text as of Jul 28, 1993 (Introduced).

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S 1299 IS

103d CONGRESS

1st Session

S. 1299

To reform requirements for the disposition of multifamily property owned by the Secretary of Housing and Urban Development, enhance program flexibility, authorize a program to combat crime, and for other purposes.

IN THE SENATE OF THE UNITED STATES

July 28 (legislative day, JUNE 30), 1993

Mr. RIEGLE (for himself and Mr. SARBANES) (by request) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs


A BILL

To reform requirements for the disposition of multifamily property owned by the Secretary of Housing and Urban Development, enhance program flexibility, authorize a program to combat crime, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SHORT TITLE AND TABLE OF CONTENTS

    SECTION 1. (a) SHORT TITLE- This Act may be cited as the ‘Housing and Community Development Act of 1993’.

    (b) TABLE OF CONTENTS-

TITLE I--FHA MULTIFAMILY REFORMS

      Sec. 101. Multifamily property disposition.

      Sec. 102. Amend the requirement for State and local government right of first refusal.

      Sec. 103. Repeal State agency multifamily property disposition demonstration.

      Sec. 104. Demonstration: RTC marketing and disposition of multifamily properties owned by HUD.

      Sec. 105. Authorize civil money penalties against general partners and certain managing agents of multifamily projects.

      Sec. 106. Extend HUD review period for approval of management improvement and operating plans.

      Sec. 107. Use of flexible subsidy in preservation projects.

      Sec. 108. Delete requirement to reduce interest rates to avoid foreclosure on assigned mortgages.

TITLE II--ENHANCE PROGRAM FLEXIBILITY

Subtitle A--Office of Public and Indian Housing

      Sec. 201. Freeze fees for administration of the certificate and voucher programs.

      Sec. 202. Revitalization of severely distressed public housing.

      Sec. 203. Disallowance of earned income for residents who obtain employment.

      Sec. 204. Ceiling rents based on reasonable rental value.

Subtitle B--Office of Community Planning and Development

      Sec. 210. Economic revitalization initiative.

      Sec. 211. HOME investment partnerships.

      Sec. 212. Reduce HOPE 3 match requirement to 25 percent.

Subtitle C--Community Partnerships Against Crime

      Sec. 220. COMPAC program.

TITLE III--TECHNICAL AND OTHER AMENDMENTS

Subtitle A--Public and Assisted Housing

      Sec. 301. Correct the definition of family in the 1937 Act to clarify that families are not required to include children.

      Sec. 302. Eliminate requirement for identification of CIAP replacement needs.

      Sec. 303. Applicability of public housing amendments to Indian housing.

      Sec. 304. Increase the unit threshold above which PHAs are required to adopt project-based accounting.

Subtitle B--Multifamily Housing

      Sec. 310. Correct errors in multifamily mortgage limits.

      Sec. 311. FHA multifamily risk-sharing HFA pilot program amendments.

      Sec. 312. Subsidy layering review.

TITLE I--FHA MULTIFAMILY REFORMS

MULTIFAMILY PROPERTY DISPOSITION

    SEC. 101. (a) SUBSIDIZED AND UNSUBSIDIZED PROJECTS- Section 203 of the Housing and Community Development Amendments of 1978 is amended--

      (1) in subsection (a)--

        (A) by redesignating paragraphs (2) through (6) as paragraphs (3) through (7), respectively; and

        (B) by striking paragraph (1) and inserting in lieu thereof the following:

      ‘(1) preserving so that they are available to and affordable by low-income persons--

        ‘(A) in the case of a subsidized or formerly subsidized multifamily housing project referred to in subsections (i)(2) (A) through (C), all units in the project;

        ‘(B) in the case of a subsidized or formerly subsidized project referred to in subsection (i)(2)(D), all units in the project that are covered, or were covered immediately before foreclosure or acquisition of the project by the Secretary, by an assistance contract under any of the authorities referred to in such subsection;

        ‘(C) in all other multifamily housing projects, at least the units that are covered, or were covered immediately before foreclosure or acquisition of the project by the Secretary, by a project-based assistance contract under--

          ‘(i) section 8(b)(2) of the United States Housing Act of 1937 (as such section existed before October 1, 1983) (new construction and substantial rehabilitation); section 8(b) of such Act (property disposition); section 8(d)(2) of such Act (project-based certificates); section 8(e)(2) of such Act (moderate rehabilitation); section 23 of such Act (as in effect before January 1, 1975); or section 101 of the Housing and Urban Development Act of 1965 (rent supplements); or

          ‘(ii) section 8 of the United States Housing Act of 1937, following conversion from such section 101;

      ‘(2) in the case of multifamily housing projects other than subsidized projects, providing project-based rental assistance to units that were covered by an assistance contract under the Loan Management Set-Aside program under section 8(b) of such Act immediately before foreclosure or acquisition of the project by the Secretary: Provided, That the assistance shall be limited to--

        ‘(A) tenants residing in the units immediately before the foreclosure or acquisition; and

        ‘(B) tenants initially admitted to units under such contract that were vacant at the time of the foreclosure or sale by HUD of the project;

      and such assistance shall not be provided to subsequent tenants;’;

      (2) in subsection (b)--

        (A) in paragraph (1)--

          (i) by striking ‘, including’ and all that follows through ‘persons,’; and

          (ii) by inserting ‘competent and’ immediately before ‘capable’;

        (B) by adding at the end thereof the following new paragraph:

      ‘(3) to develop such procedures as the Secretary determines necessary to obtain appropriate community or resident input into disposition plans; and’;

      (3) by striking paragraph (1) of subsection (d) and the introductory material preceding such paragraph (1), and inserting in lieu thereof the following: ‘In carrying out the goals specified in subsections (a)(1) and (2), the Secretary shall take not less than one of the following actions:

      ‘(1) Enter into contracts under section 8 of the United States Housing Act of 1937, to the extent budget authority is available, with owners of multifamily housing projects that are acquired by a purchaser other than the Secretary at foreclosure or after sale by the Secretary.

        ‘(A)(i) In the case of a subsidized or formerly subsidized project referred to in subsections (i)(2) (A) through (C), the contract shall be for a term of at least 15 years and shall be sufficient to assist at least all units covered by an assistance contract under any of the authorities referred to in subsection (i)(2)(D). In order to make available to families any of such units that are occupied by persons not eligible for assistance under section 8, but that subsequently become vacant, a contract under this clause shall also provide that when any such vacancy occurs, the owner shall lease the available unit to a family eligible for assistance under section 8. The Secretary shall use the authority contained in paragraph (3) in connection with any unit in such projects that does not receive project-based assistance under this paragraph.

        ‘(ii) In the case of a subsidized or formerly subsidized project referred to in subsection (i)(2)(D), the contract shall be for a term of at least 15 years and shall be sufficient to assist at least all units in the project that are covered, or were covered immediately before foreclosure or acquisition of the project by the Secretary, by an assistance contract under any of the authorities referred to in such subsection. In order to make available to families any of such units that are occupied by persons not eligible for assistance under section 8, but that subsequently become vacant, a contract under this clause shall also provide that when any such vacancy occurs, the owner shall lease the available unit to a family eligible for assistance under section 8.

        ‘(iii) Contracts under clauses (i) and (ii) shall be at contract rents that, consistent with subsection (a), provide for the necessary rehabilitation of such project and do not exceed such percentage of the existing housing fair market rents for the area (as determined by the Secretary under section 8(c) of the United States Housing Act of 1937) as the Secretary may prescribe.

        ‘(B) In all other multifamily housing projects the contract shall be for an initial term of at least five years and shall at least be sufficient to provide project-based rental assistance for all units--

          ‘(i) that are covered, or were covered immediately before foreclosure or acquisition of the project by the Secretary, by an assistance contract under--

            ‘(I) section 8(b)(2) of the United States Housing Act of 1937 (as such section existed before October 1, 1983) (new construction and substantial rehabilitation); section 8(b) property disposition); section 8(d)(2) of such Act (project-based certificates); section 8(e)(2) of such Act (moderate rehabilitation); section 23 of such Act (as in effect before January 1, 1975); or section 101 of the Housing and Urban Development Act of 1965 (rent supplements); or

            ‘(II) section 8 of the United States Housing Act of 1937, following conversion from such section 101; and

          ‘(ii) that were covered by an assistance contract under the Loan Management Set-Aside program under section 8(b) of such Act immediately before foreclosure or acquisition of the project by the Secretary: Provided, That the assistance shall be limited to--

            ‘(I) tenants residing in the units immediately before the foreclosure or acquisition; and

            ‘(II) tenants initially admitted to units under such contract that were vacant at the time of the foreclosure or sale by HUD of the project;

          and such assistance shall not be provided to subsequent tenants.’;

      (4) by adding the following new paragraph at the end of subsection (d):

      ‘(4) In connection with projects referred to in paragraph (1), the Secretary is authorized to make available tenant-based rental assistance under section 8 (b) or (o) of such Act to very low-income families (as defined in section 3(b)(2) of the United States Housing Act of 1937) that do not qualify for project-based assistance under such paragraph.’; and

      (5) in subsections (e) (3) and (4), by striking ‘15-year period’ and inserting in lieu thereof the following: ‘the period of assistance’.

    (b) TENANT-BASED ASSISTANCE- Section 203(d)(2) of such Act is amended--

      (1) in the first sentence, by striking the parenthetical; and

      (2) by adding at the end thereof the following new sentence: ‘Actions pursuant to this paragraph may be taken in connection with not more than 10 percent of the units in subsidized or formerly subsidized projects owned by the Secretary.’.

    (c) ALTERNATE ASSISTANCE- Section 203(d)(3) of such Act is amended by striking ‘will ensure that,’ and all that follows through the end, and inserting in lieu thereof the following: ‘will ensure that--

        ‘(A) the project is available to, and affordable by, low-income persons; and

        ‘(B) for a period of not less than 15 years, there shall be in force such use restrictions and rent regulation as the Secretary may prescribe.’.

    (d) NONRENTAL, NONRESIDENTIAL USE- Section 203(d) of such Act, as amended by the previous provisions of this section, is amended--

      (1) by adding the following new paragraph at the end thereof:

      ‘(5)(A) Notwithstanding any other provision of law, of the total number of units in multifamily housing projects that are owned by the Secretary, the Secretary may make up to--

        ‘(i) 10 percent available for uses, other than rental or cooperative use, such as low-income homeownership opportunities, shelters for the homeless, and office space for resident or housing-related social service providers; and

        ‘(ii) five percent available for any use, if the Secretary, in consultation with the local or areawide governing body, determines that such action will assist efforts to deconcentrate low-income housing opportunities.

      ‘(B) In connection with projects referred to in subparagraph (A), the Secretary is authorized to make available tenant-based rental assistance under section 8 (b) or (o) of such Act to very low-income families (as defined in section 3(b)(2) of the United States Housing Act of 1937) to assist them in locating other decent, safe, and sanitary housing.’; and

      (2) in the last sentence of subsection (e)(1), by striking ‘value’ and all that follows through ‘(d)’ and inserting in lieu thereof the following: ‘intended use of the property after sale’.

    (e) DISPLACEMENT- Sections 203(f)(2) (B) and (C) are each amended by striking ‘above-moderate income’ and inserting in lieu thereof ‘above low-income’.

    (f) SALE OF MORTGAGES ON UNSUBSIDIZED PROJECTS- Section 203(h) of such Act is amended by adding at the end thereof the following new paragraph:

      ‘(4) Notwithstanding any other provision of law, the Secretary is authorized to sell mortgages held on multifamily housing projects other than subsidized projects on such terms and conditions as the Secretary may prescribe.’.

    (g) DEFINITION OF ‘SUBSIDIZED PROJECT.’--Section 203(i) of such Act is amended--

      (1) in paragraph (1), by striking ‘or section 312 of the Housing Act of 1964’;

      (2) by striking subparagraph (C) of paragraph (2) and renumbering the remaining subparagraphs accordingly;

      (3) in paragraph (2)(C), as redesignated by paragraph (2) of this subsection, by striking ‘or to’ and all that follows through ‘1964’;

      (4) by striking subparagraph (D) of paragraph (2), as redesignated by paragraph (2) of this subsection, and inserting in lieu thereof the following new subparagraph:

        ‘(D)(i) rent supplement payments under section 101 of the Housing and Urban Development of 1965; (ii) housing assistance payments made under section 23 of the United States Housing Act of 1937 (as in effect before January 1, 1975); or (iii) housing assistance payments made under section 8 of the United States Housing Act of 1937 (excluding payments made for certificates under subsection (b)(1) or vouchers under subsection (o)), if (except for purposes of paragraphs (1) and (2) of subsection (h) and section 183(c) of the Housing and Community Development Act of 1987) such assistance payments are made to more than 50 percent of the units in the project.’; and

      (5) by striking paragraph (i)(4).

    (h) OTHER PROVISIONS- Section 203 of such Act is amended by adding at the end thereof the following new subsection:

    ‘(k) In providing tenant-based assistance in connection with activities pursuant to subsection (d)(4) or (d)(5)(B), the Secretary shall take into consideration the condition of the local market in which the assistance will be used and shall take such steps as the Secretary deems necessary for the successful use of the assistance.’.

    (i) USE OF SAVINGS IN MANDATORY EXPENDITURES- (1) From amounts of savings in mandatory expenditures that result from the amendments made by this section, the Secretary shall--

      (A) make grants to States and units of general local government in a total amount of $400,000,000 for the rehabilitation of multifamily projects formerly owned by the Secretary that have been transferred to such governmental entities;

      (B) transfer a sufficient number of multifamily housing projects owned by the Secretary to States and units of general local government to assure full use of the amount required for grants under subparagraph (A); and

      (C) require that the grantees comply with requirements established by the Secretary governing use of the project and the grant, including requirements governing use of the units for rental by low-income families and affordability of rents, as determined by the Secretary.

    The Secretary’s authority to make expenditures for grants under this subparagraph shall terminate on September 30, 1994. The Secretary shall, by notice published in the Federal Register, establish such requirements as may be necessary to carry out the provisions of this subparagraph, including a requirement that States and units of general local government do not earn arbitrage profits from these grants.

    (2) For purposes of this subsection--

      (A) the term ‘low-income families’ has the meaning given such term in section 3(b)(2) of the United States Housing Act of 1937;

      (B) the term ‘Secretary’ means the Secretary of Housing and Urban Development;

      (C) the term ‘State’ has the meaning given such term in section 104(2) of the Cranston-Gonzalez National Affordable Housing Act, including any agency or instrumentality thereof that is established pursuant to legislation and designated by the chief executive to act on behalf of the State with regard to paragraph (1)(A); and

      (D) the term ‘unit of general local government’ has the meaning given such term in section 104(1) of the Cranston-Gonzalez National Affordable Housing Act, including any agency or instrumentality thereof that is established pursuant to legislation and designated by the chief executive to act on behalf of the jurisdiction with regard to paragraph (1)(A).

AMEND THE REQUIREMENT FOR STATE AND LOCAL GOVERNMENT RIGHT OF FIRST REFUSAL

    SEC. 102. (a) Section 203(e)(2) of the Housing and Community Development Amendments of 1978 is amended to read as follows:

      ‘(2) The Secretary, within 60 days of acquiring title to a project, shall notify the unit of general local government and the State housing finance agency (or other agency or agencies designated by the Governor) of the acquisition of such title. Within 60 days of this notice, the local government or designated State agency may submit to the Secretary a preliminary expression of interest in the project. The Secretary may take such actions as may be necessary to require the local government or designated State agency to substantiate such interest. If the local government or designated State agency has expressed interest within the 60-day period, and has substantiated such interest if requested, upon approval of a disposition plan for a project, the Secretary shall notify the local government and designated State agency of the terms and conditions of the disposition plan and give the local government or designated State agency 90 days from the date of the notification to make an offer to purchase the project. If the local govenment or designated State agency does not express interest within the 60-day period, or does not substantiate an expressed interest if requested, the Secretary, upon approval of a disposition plan, may offer the project for sale to any interested person or entity.’.

    (b) Section 203(e)(3) of such Act is amended by striking ‘The’ in the first sentence and inserting ‘Where the Secretary has given the local government or designated State agency 90 days to make an offer to purchase the project, the’.

    (c) Section 203(e) of such Act, as amended by subsections (a) and (b), shall apply to projects that are acquired on or after the effective date of this section. With respect to projects acquired before the effective date of this section, the Secretary may apply--

      (1) the requirements of sections 203 (e)(2) and (e)(3) of such Act as they existed immediately before the effective date of this section; or

      (2) the requirements of section 203 (e)(2) and (e)(3) of such Act, as amended by subsections (a) and (b), respectively, if the Secretary gives the local government and designated State agency 60 days to express interest in the project, and for those that express interest within the 60-day period, and substantiate such interest if requested, 90 days from the date of notification of the terms and conditions of the disposition plan to make an offer to purchase the project.

REPEAL STATE AGENCY MULTIFAMILY PROPERTY DISPOSITION DEMONSTRATION

    SEC. 103. Section 184 of the Housing and Community Development Act of 1987 is hereby repealed.

DEMONSTRATION: RTC MARKETING AND DISPOSITION OF MULTIFAMILY PROPERTIES OWNED BY HUD

    SEC. 104. (a) The Secretary of Housing and Urban Development may carry out a demonstration with up to 50 multifamily properties owned by the Secretary, using the Resolution Trust Corporation (RTC) for the marketing and disposition of the properties. Any such demonstration shall be carried out by agreement of the RTC and the Secretary on such terms and conditions as are acceptable to the RTC and the Secretary. The RTC shall establish policies and procedures for marketing and disposition, subject to review and approval by the Secretary.

    (b) The Secretary may waive the requirements of section 203 of the Housing and Community Development Amendments of 1978 and any related requirements, including restrictions on the incomes of families occupying the units and requirements for continued assistance. The Secretary may also waive any other statutory and regulatory requirements that apply to the project and that the Secretary determines are not consistent with the purposes of a demonstration, except that the Secretary may not waive any equal opportunity or nondiscrimination statutory or regulatory requirements or procedures.

    (c) In determining which properties to include in the demonstration, the Secretary shall take into consideration the size of the inventory of properties owned by the Secretary in the locality and such other factors as the Secretary determines are appropriate.

    (d) The Secretary shall reimburse the RTC for the direct costs associated with the demonstration, including the costs of administration and marketing, property management, and any repair and rehabilitation. The Secretary may use proceeds from the sale of the properties to reimburse the RTC for its costs.

    (e) The demonstration under this section shall--

      (1) be approved personally by the Secretary;

      (2) taken as a whole over the life of the demonstration, not result in higher costs to the Federal Government;

      (3) be generally consistent with the overall purposes of the program or programs under which the waiver is granted;

      (4) be the subject of an evaluation plan for which funding is obligated or set aside at the same time the demonstration is approved and which will be carried out by an independent party; the evaluation shall include an assessment of the impact and effectiveness of (A) any requirements waived pursuant to subsection (b), and (B) any differences between the property disposition procedures of the RTC and the Secretary; and

      (5) be consistent with the Fair Housing Act, title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975.

    (f) In approving the demonstration under this section, the Secretary may impose such requirements as the Secretary considers to be appropriate to further its purposes.

    (g) The RTC shall submit an annual progress report to the Secretary. The Secretary shall submit a report to Congress within one year after completion of the demonstration, describing the results of the demonstration and making any recommendations for legislation.

    (h) The demonstration under this section shall not extend beyond the termination date of the Resolution Trust Corporation.

    (i) There is authorized to be appropriated $1,000,000 for the evaluation of the demonstration under this section.

AUTHORIZE CIVIL MONEY PENALTIES AGAINST GENERAL PARTNERS AND CERTAIN MANAGING AGENTS OF MULTIFAMILY PROJECTS

    SEC. 105. (a) Section 537 of the National Housing Act is amended--

      (1) in subsection (b)(1), by inserting after ‘mortgagor’ the second place it appears the following: ‘or general partner of a partnership mortgagor’;

      (2) in the heading to subsection (c), by deleting ‘VIOLATIONS OF REGULATORY AGREEMENT’ and inserting in lieu thereof the following: ‘OTHER VIOLATIONS’;

      (3) in subsection (c)(1)--

        (A) by deleting ‘any mortgagor of property’ and all that follows through ‘as follows:’ and inserting in lieu thereof the following:

        ‘(A) any mortgagor of property that includes five or more living units and that has a mortgage insured, coinsured, or held pursuant to this Act;

        ‘(B) the general partner of a partnership mortgagor;

        ‘(C) any agent employed to manage the property that has an identity of interest with the general partner; or

        ‘(D) any independent fee management entity, under contract with the mortgagor or general partner of a partnership mortgagor, that fails to notify the Secretary, as required by the Secretary, that it has been instructed by the mortgagor or general partner of a partnership mortgagor to engage in activities that are contrary to regulations and requirements of the Secretary. A penalty may be imposed under this section for knowingly and materially taking any of the following actions:’;

        (B) by adding after subparagraph (L) the following new subparagraphs:

        ‘(M) Failure, when there is adequate project income available, to maintain the premises, accommodations, and the grounds and equipment appurtenant thereto in good repair and condition in accordance with regulations and requirements of the Secretary.

        ‘(N) Failure, by a general partner of a partnership mortgagor, to provide management for the project that is acceptable to the Secretary pursuant to regulations and requirements of the Secretary.’;

        (C) in the last sentence, by deleting ‘of such agreement’ and inserting in lieu thereof the following: ‘of this subsection’; and

        (D) by redesignating subparagraphs (A) through (N) as clauses (i) through (xiv), respectively;

      (4) in subsection (d)(1)(B), by inserting after ‘mortgagor’ the following: ‘, general partner of a partnership mortgagor, or agent employed to manage the property or independent fee management entity as described in subsections (c)(1) (C) and (D), respectively,’;

      (5) in subsection (e)(1), by deleting ‘a mortgagor’ and inserting in lieu thereof the following: ‘an entity or person’;

      (6) in subsection (f), by inserting after ‘mortgagor’ both times that it appears the following: ‘, general partner of a partnership mortgagor, or agent employed to manage the property or independent fee management agent as described in subsections (c)(1) (C) and (D), respectively,’; and

      (7) by amending the heading to read as follows: ‘CIVIL MONEY PENALTIES AGAINST MULTIFAMILY MORTGAGORS, GENERAL PARTNERS OF PARTNERSHIP MORTGAGORS, AND MANAGING AGENTS’.

    (b) The amendments made by subsection (a) shall apply only with respect to--

      (1) violations that occur on or after the effective date of this section; and

      (2) in the case of a continuing violation (as determined by the Secretary of Housing and Urban Development), any portion of a violation that occurs on or after such date.

EXTEND HUD REVIEW PERIOD FOR APPROVAL OF MANAGEMENT IMPROVEMENT AND OPERATING PLANS

    SEC. 106. Section 201(d)(6) of the Housing and Community Development Amendments of 1978 is amended by striking ‘30’ and inserting ‘120’.

USE OF FLEXIBLE SUBSIDY IN PRESERVATION PROJECTS

    SEC. 107. (a) USE OF ASSISTANCE- Section 201(k) of the Housing and Community Development Amendments of 1978 is amended by adding at the end thereof the following new paragraph:

      ‘(4) In providing, and contracting to provide, assistance for capital improvements under this section, the Secretary shall give priority to projects that are eligible for incentives under section 224(b) of the Emergency Low Income Housing Preservation Act of 1987. The Secretary may make such assistance available on a noncompetitive basis.’.

    (b) CERTAIN UNINSURED PROJECTS- Section 201(n)(2) of such Act is amended by inserting a comma immediately after ‘insured mortgages in force’ and the following: ‘projects for which the Secretary holds the mortgage, and projects with respect to which the Secretary makes interest reduction payments under section 236(o) of the National Housing Act’.

DELETE REQUIREMENT TO REDUCE INTEREST RATES TO AVOID FORECLOSURE ON ASSIGNED MORTGAGES

    SEC. 108. Section 7(i)(5) of the Department of Housing and Urban Development Act is amended by striking out the first semicolon, and all that follows through ‘as determined by the Secretary’.

TITLE II--ENHANCE PROGRAM FLEXIBILITY

Subtitle A--Office of Public and Indian Housing Freeze Fees for Administration of the Certificate and Voucher Programs

    SEC. 201. Notwithstanding the second sentence of section 8(q)(1) of the United States Housing Act of 1937, other applicable law, and any implementing regulations and related requirements, the fee for the ongoing costs of administering the certificate and housing voucher programs under sections 8(b) and 8(o) of such Act for Federal fiscal year 1994 shall be based on the fair market rents for Federal fiscal year 1993. However, the Secretary may increase the fee in accordance with the third sentence of section 8(q)(1) and sections 8(q)(2) (ii) and (iii) of such Act.

REVITALIZATION OF SEVERELY DISTRESSED PUBLIC HOUSING

    SEC. 202. (a) SEVERELY DISTRESSED PUBLIC HOUSING- Section 24 of the United States Housing Act of 1937 is amended as provided by this subsection.

      (1) Delete requirement for designation of eligible projects-

        (A) Subsection (b) is hereby repealed.

        (B) Subsection (i)(2) is hereby repealed and the following paragraphs redesignated accordingly.

      (2) INCREASE PLANNING GRANT DOLLAR CAP- Subsection (c)(2) is amended by striking ‘$200,000’ and inserting ‘$500,000’.

      (3) PLANNING GRANT ELIGIBLE ACTIVITIES: COMMUNITY SERVICE- Subsection (c)(3) is amended by inserting the following new subparagraph after subparagraph (D) and redesignating the following subparagraphs accordingly:

        ‘(E) planning for community service activities to be carried out by residents, other members of the community, and other persons willing to contribute to the social, economic, or physical improvement of the community (community service is a required element of the revitalization program);’.

      (4) PLANNING GRANT APPLICATION: COMMUNITY SERVICE- Subsection (c)(4) is amended by inserting the following new subparagraph after subparagraph (C) and redesignating the following subparagraphs accordingly:

        ‘(D) a description of the planning activities for community service to be carried out by residents, other members of the community, and other persons willing to contribute to the social, economic, or physical improvement of the community;’.

      (5) IMPLEMENTATION GRANT ELIGIBLE ACTIVITIES-

        (A) Subsection (d)(2) is amended by inserting the following new subparagraphs after subparagraph (D) and redesignating the following subparagraphs accordingly:

        ‘(E) community service activities to be carried out by residents, other members of the community, and other persons willing to contribute to the social, economic, or physical improvement of the community (community service is a required element of the revitalization program); and

        ‘(F) replacement of public housing units, when required under section 18, through the use of implementation grant funds for the development of replacement units provided through the methods permitted under section 18(b)(3);’.

        (B) Subsection (d)(2)(K), as redesignated by subparagraph (A) of this paragraph, is amended by--

          (i) striking ‘than 15 percent’ and inserting ‘than 20 percent’; and

          (ii) inserting before the period the following: ‘and provided that an amount equal to 15 percent of the amount of any grant under this subsection used for support services shall be contributed from non-Federal sources (this contribution shall be in the form of cash, administrative costs, and the reasonable value of in-kind contributions and may include funding under title I of the Housing and Community Development Act of 1974)’.

      (6) IMPLEMENTATION GRANT APPLICATIONS: COMMUNITY SERVICE- Subsection (d)(3) is amended by inserting the following new subparagraph after subparagraph (C) and redesignating the following subparagraphs accordingly:

        ‘(D) a description of the community service activities to be carried out by residents, other members of the community, and other persons willing to contribute to the social, economic, or physical improvement of the community;’.

      (7) PLANNING GRANT AND IMPLEMENTATION GRANT SELECTION CRITERIA: NATIONAL GEOGRAPHIC DIVERSITY- Subsections (c)(5) and (d)(4) are each amended by--

        (A) striking subparagraph (E) and redesignating the following subparagraphs accordingly; and

        (B) inserting at the end the following new flush matter:

      ‘The Secretary may select a lower-rated, approvable application over a higher-rated application to increase the level of national geographic diversity of applications approved under this section.’.

      (8) IMPLEMENTATION GRANT SELECTION CRITERIA- Subsection (d)(4)(D) is amended by striking ‘the potential of the applicant for developing a successful and affordable’ and inserting ‘the quality of the proposed’.

      (9) DEFINITIONS- (A) Subsection (h)(5) is amended to read as follows:

      ‘(5) SEVERELY DISTRESSED PUBLIC HOUSING- The term ‘severely distressed public housing’ means a public housing project or a building in a project that--

        ‘(A) requires major redesign, reconstruction, or redevelopment, or partial or total demolition, to correct serious deficiencies in the original design (including inappropriately high population density), deferred maintenance, physical deterioration or obsolescence of major systems, and other deficiencies in the physical plant of the project; and

        ‘(B)(i)(I) is occupied predominantly by families with children which have extremely low incomes, high rates of unemployment, and extensive dependency on various forms of public assistance; and

        ‘(II) has high rates of vandalism and criminal activity (including drug-related criminal activity); or

        ‘(ii) has a vacancy rate, as determined by the Secretary, of 50 percent or more; and

        ‘(C) cannot be revitalized through assistance under other programs, such as the programs under sections 9 and 14, or through other administrative means because of the inadequacy of available funds; and

        ‘(D) in the case of individual buildings, the building is, in the Secretary’s determination, sufficiently separable from the remainder of the project to make use of the building feasible for purposes of this section.’.

      (B) Subsection (h) is amended by adding the following new paragraphs at the end thereof:

      ‘(6) COMMUNITY SERVICE- The term ‘community service’ means services provided on a volunteer or limited stipend basis for the social, economic, or physical improvement of the community to be served, including opportunity for the upward mobility of participants providing the community service, through completion of education requirements, job training, or alternative methods of developing skills and job readiness.

      ‘(7) SUPPORT SERVICES- The term ‘support services’ includes all activities designed to lead toward upward mobility, self-sufficiency, and improved quality of life for the residents of the project, such as literacy training, job training, day care, and economic development, and may include such activities for residents of the neighborhood.’.

    (b) CONFORMING AMENDMENT- The first sentence of section 25(m)(1) of the United States Housing Act of 1937 is amended to read as follows: ‘The term ‘eligible housing’ means a public housing project, or one or more buildings within a project, that is owned or operated by a troubled public housing agency.’.

    (c) COMPREHENSIVE GRANT AND DEVELOPMENT GRANTS FOR REPLACEMENT HOUSING- (1) Section 5(a)(2) of the United States Housing Act of 1937 is amended by adding the following new sentence at the end thereof: ‘In providing assistance under this paragraph, the Secretary may give priority to public housing agencies that use comprehensive grants under section 14(k) for replacement housing under section 18(b)(3)(A).’

    (2) Section 14 of such Act is amended by adding the following new subsection at the end thereof:

    ‘(q) The Secretary may authorize a public housing agency to use assistance allocated to it for use under subsection (e) for the development of additional housing under this Act, in accordance with requirements applicable to the development of public housing, to provide replacement housing as required by section 18.’.

    (d) USE OF TENANT-BASED ASSISTANCE FOR REPLACEMENT HOUSING- (1) Section 18(b)(3)(A) of such Act is amended--

      (A) by striking ‘or’ at the end of clause (v);

      (B) by redesignating clause (vi) as clause (vii); and

      (C) by inserting the following new clause immediately after clause (v):

        ‘(vi) the use of five-year tenant-based assistance under section 8(b) or (o) if--

          ‘(I) the project has been vacant for a period of at least five years;

          ‘(II) the proposed demolition is necessary for revitalization of the remaining units in the project; or

          ‘(III) demolition of the entire project is proposed and some or all of the units will be replaced on the site; or’.

    (2) Section 18(b)(3) of such Act is amended--

      (A) in subparagraph (A)(v), by striking ‘to the extent available’ and all that follows through ‘5 years’; and

      (B) in subparagraph (C), by adding the following new flush matter at the end thereof:

    Provided, That notwithstanding the other provisions of this subparagraph, if the plan involves (I) a demolition described in subparagraph (A)(vi) or (II) the demolition of 200 or more units, tenant-based assistance under section 8(b) or (o) may be approved if the public housing agency determines, in accordance with such requirements as the Secretary may prescribe, that such use is feasible and appropriate to meeting the low-income housing needs in the community;’.

    (3) Section 18(c)(2) of such Act is amended by inserting before the period at the end of the first sentence a comma and the following: ‘except for amounts to be provided from the allocation of comprehensive grant assistance to the public housing agency under section 14’.

    (e) NEED FOR REPLACEMENT HOUSING- The flush matter at the end of section 18(b)(3) of such Act is amended--

      (1) by striking ‘except that,’ and inserting in lieu thereof the following: ‘except that (1)’; and

      (2) by inserting immediately before the period at the end thereof the following: ‘, and (2) a public housing agency may demolish public housing dwelling units without providing an additional unit for each unit to be demolished if there is no need for additional assisted housing in the community, as determined in accordance with criteria determined by the Secretary’.

    (f) REPLACEMENT HOUSING OUTSIDE THE JURISDICTION OF THE PHA- Section 18(b)(3) of such Act is amended by inserting the following new subparagraph after subparagraph (C), and redesignating the following subparagraphs accordingly:

      ‘(D) may provide that all or part of such additional dwelling units may be located outside the jurisdiction of the public housing agency (the ‘original agency’) if--

        ‘(i) the location is in the same housing market area as the original agency, as determined by the Secretary;

        ‘(ii) the plan contains an agreement between the original agency and the public housing agency in the alternate location or other public or private entity that will be responsible for providing the additional units in the alternate location (‘alternate agency or entity’) that the alternate agency or entity will, with respect to the dwelling units involved--

          ‘(I) provide the dwelling units in accordance with subparagraph (A) of this paragraph;

          ‘(II) complete the plan on schedule in accordance with subparagraph (F) of this paragraph;

          ‘(III) meet the requirements of subparagraph (G) of this paragraph and the maximum rent provisions of subparagraph (H) of this paragraph; and

          ‘(IV) not impose a local residency preference on any resident of the jurisdiction of the original agency for purposes of admission to any such units; and

        ‘(iii) the arrangement is approved by the unit of general local government for the jurisdiction in which the additional units will be located.’.

DISALLOWANCE OF EARNED INCOME FOR RESIDENTS WHO OBTAIN EMPLOYMENT

    SEC. 203. (a) DISALLOWANCE OF EARNED INCOME FROM PUBLIC HOUSING RENT DETERMINATIONS-

      (1) IN GENERAL- Section 3 of the United States Housing Act of 1937 is amended by striking the undesignated paragraph at the end thereof and inserting in lieu thereof the following new subsection:

    ‘(d) DISALLOWANCE OF EARNED INCOME FROM PUBLIC HOUSING RENT DETERMINATIONS- Notwithstanding any other provision of law, the rent payable under subsection (a) for any public housing unit by a family whose income increases as a result of employment of a member of the family who was previously unemployed for one or more years not be increased as a result of the increased income due to such employment for a period of 18 months, beginning with the commencement of employment.’.

      (2) APPLICABILITY OF AMENDMENT- Notwithstanding the amendment made by paragraph (1), any resident of public housing participating in the authority contained in such undesignated paragraph immediately before its amendment by this section shall continue to be governed by such authority.

    (b) REPEALER- Section 957 of the Cranston-Gonzalez National Affordable Housing Act is hereby repealed.

CEILING RENTS BASED ON REASONABLE RENTAL VALUE

    SEC. 204. (a) Section 3(a)(2)(A)(iii) of the United States Housing Act of 1937 is amended to read as follows:

      ‘(iii) is not less than the reasonable rental value of the unit, as determined by the Secretary.’.

    (b) The Secretary shall, by notice published in the Federal Register, establish such requirements as may be necessary to carry out the provisions of section 3(a)(2)(A) of the United States Housing Act of 1937, as amended by subsection (a). The notice shall also invite public comments, and the Secretary shall issue final regulations based on the initial notice, taking into account any public comments received.

Subtitle B--Office of Community Planning and Development Economic Revitalization Initiative

    SEC. 210. (a) ECONOMIC REVITALIZATION GRANTS- (1) Section 108(a) of the Housing and Community Development Act of 1974 is amended by striking the second sentence and inserting in lieu thereof the following: ‘A guarantee under this section (including a guarantee combined with a grant under subsection (q)) may be used to assist a grantee in obtaining financing, only if the grantee has made efforts to obtain the financing without the use of the guarantee (and, if applicable, the grant) and cannot complete the financing consistent with the timely execution of the proposed activities and projects without the guarantee (or, if applicable, the grant).’.

    (2) Section 108 of such Act is further amended by adding at the end thereof the following new subsection:

    ‘(q)(1) The Secretary is authorized to use amounts deobligated under section 119 to provide grants in accordance with this subsection for economic revitalization projects to eligible public entities (units of general local government) in connection with notes or other obligations guaranteed for such entities under this section.

    ‘(2) By regulation, the Secretary shall prescribe the terms and conditions of these grants (in accordance with this title, except as otherwise permitted by this subsection), including guidelines related to economic revitalization projects eligible for grants, the amount of grant funds to be provided for specific economic revitalization projects applied for, and requirements applicable to the use of the grant and the guaranteed loan proceeds by the recipient. The regulations shall at a minimum implement the provisions specified in this subsection.

    ‘(3) The proceeds of the guaranteed loan, and the grant under this subsection, shall be used to finance economic development activities and projects eligible under subsection (a) and specified in the approved application. In this subsection, the term ‘economic revitalization projects’ refers to such eligible economic development projects and activities.

    ‘(4) If the eligible public entity proposes a grant under this subsection, it shall submit its request to HUD, in the form prescribed by HUD, with or as part of its application for loan guarantee assistance under this section.

    ‘(5) To the extent funds are available, grants under this subsection shall be approved on a first-come, first-served basis.’.

    (3) Section 119(o) of such Act is amended by striking ‘shall be’ and all that follows up to the period and inserting in lieu thereof the following: ‘shall, as determined by the Secretary, be added to amounts appropriated under section 103 or be used to provide grants under section 108(q)’.

    (4) Title I of such Act is amended--

      (A) in the second sentence of section 101(c), by striking ‘and, if applicable, the funds received as a result of a guarantee under section 108,’ and by inserting in lieu therof ‘(including any such funds used to make payments on a loan guaranteed by the Secretary under section 108) and, if applicable, any grant received under section 108(q),’ and

      (B) in section 104(b)(3), by striking ‘and, if applicable, as a result of a guarantee under section 108,’ and by inserting in lieu thereof ‘(including any such funds used to make payments on a loan guaranteed by the Secretary under section 108) and, if applicable, any grant received under section 108(q),’.

    (b) SECTION 108 LOAN GUARANTEES FOR COLONIAS- The first sentence of section 108(a) of the Housing and Community Development Act of 1974 is amended--

      (1) by striking ‘or’ immediately after ‘section 105(a);’; and

      (2) by inserting immediately before the period at the end thereof the following: ’; or (5) activities under section 105(a)(2) with respect to colonias under section 916 of the Cranston-Gonzalez National Affordable Housing Act’.

    (c) GUARANTEE OF OBLIGATIONS BACKED BY SECTION 108 LOANS- Section 108 of the Housing and Community Development Act of 1974 is amended by adding at the end thereof the following new subsection:

    ‘(r)(1) The Secretary is authorized, upon such terms and conditions as the Secretary deems appropriate, to guarantee the timely payment of the principal of and interest on such trust certificates or other obligations as shall--

      ‘(A) be offered by the Secretary or by any other offeror approved for purposes of this subsection by the Secretary, and

      ‘(B) be based on and backed by a trust or pool composed of notes or other obligations guaranteed or eligible for guarantee by the Secretary under this section.

    ‘(2) To the same extent as provided in subsection (f), the full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guarantee by the Secretary under this subsection.

    ‘(3) In the event the Secretary pays a claim under a guarantee issued under this section, it shall be subrogated fully to the rights satisfied by such payment.

    ‘(4) No State or local law, and no Federal law, shall preclude or limit the exercise by the Secretary of--

      ‘(A) the power to contract with respect to public offerings and other sales of notes, trust certificates, and other obligations guaranteed under this section upon such terms and conditions as the Secretary deems appropriate,

      ‘(B) the right to enforce by any means deemed appropriate by the Secretary any such contract, and

      ‘(C) the Secretary’s ownership rights, as applicable, in notes, certificates, or other obligations guaranteed under this section, or constituting the trust or pool against which trust certificates, or other obligations guaranteed under this section are offered.’.

HOME INVESTMENT PARTNERSHIPS

    SEC. 211. (a) PARTICIPATION BY STATE AGENCIES OR INSTRUMENTALITIES- Section 104(2) of the Cranston-Gonzalez National Affordable Housing Act is amended--

      (1) by striking ‘and’; and

      (2) by inserting before the period at the end thereof the following: ‘, and any agency or instrumentality thereof that is established pursuant to legislation and designated by the chief executive to act on behalf of the jurisdiction with regard to provisions of this Act’.

    (b) SIMPLIFY PROGRAM-WIDE INCOME TARGETING FOR HOME RENTAL HOUSING- Sections 214(1) (A) and (B) of such Act are amended by striking ‘such funds are invested with respect to dwelling units that are occupied by’ each place it appears and inserting in lieu thereof the following: ‘(i) the families receiving such rental assistance are, or (ii) the dwelling units assisted with such funds are occupied by,’.

    (c) REMOVE FIRST-TIME HOMEBUYER LIMITATION FOR HOME UNITS- Section 215(b) of such Act is amended by striking paragraph (3) and redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.

    (d) SIMPLIFY RESALE PROVISIONS- Section 215(b)(4)(B) of such Act is amended by striking ‘subsection’ and inserting in lieu thereof ‘title’.

    (e) Stabilization of Home Funding Thresholds-

      (1) Sections 216(10) and 217(b)(4) of such Act are hereby repealed.

      (2) Section 217(b)(3) of such Act is amended--

        (A) in the first sentence, by striking ‘only those jurisdictions’ and all that follows up to the period and inserting in lieu thereof the following: ‘jurisdictions that are not participating jurisdictions that are allocated an amount of $500,000 or greater and jurisdictions that are participating jurisdictions shall receive an allocation’; and

        (B) in the last sentence, by striking ‘, except as provided in paragraph (4)’.

      (3) Section 216 of such Act is amended--

        (A) in paragraph (3), by striking ‘Except as provided in paragraph (10), a jurisdiction’ in the first sentence and inserting in lieu thereof ‘A jurisdiction’; and

        (B) in paragraph (9)(B), by striking ‘, except as provided in paragraph (10)’.

    (f) COMPREHENSIVE AFFORDABLE HOUSING STRATEGY-

      (1) HOME PROGRAM- The first sentence of section 218(d) of such Act is amended by inserting immediately after ‘providing certification’ the following: ‘that it is following a current housing affordability strategy which has been approved by the Secretary in accordance with section 105, and’.

      (2) HOMELESS ASSISTANCE PROGRAMS-

        (A) IN GENERAL- Section 401 of the Stewart B. McKinney Homeless Assistance Act is amended to read as follows:

HOUSING AFFORDABILITY STRATEGY.

    ‘SEC. 401. (a) REQUIREMENT TO FOLLOW A CHAS- Assistance may be made available Under subtitle B to metropolitan cities, urban counties, and States receiving a formula amount under section 413, only if the jurisdiction certifies that it is following a current housing affordability strategy which has been approved by the Secretary in accordance with section 105 of the Cranston-Gonzalez National Affordable Housing Act.

    ‘(b) REQUIREMENT FOR CONSISTENCY WITH CHAS- Assistance may be made available under this title only if the application contains a certification that the proposed project or activities are consistent with the housing strategy of the State or unit of general local government in which the project is located. The certification shall be from the public official responsible for submitting the strategy for the jurisdiction.’.

        (B) CONFORMING CHANGES- Title IV of such Act is amended by striking sections 426(a)(2)(F), 434(a)(10), and 454(b)(9).

    (g) SIMPLIFY HOME MATCHING REQUIREMENTS- Section 220 of the Cranston-Gonzalez National Affordable Housing Act is amended to read as follows:

    ‘(a) CONTRIBUTION- Each participating jurisdiction shall make contributions to housing that qualifies as affordable housing under this title that total, throughout a fiscal year, not less than 25 percent of the funds drawn from the jurisdictions’s HOME Investment Trust Fund in that fiscal year. This contribution shall be in addition to any amounts made available under section 216(3)(A)(ii).’.

    (h) DELETE SEPARATE AUDIT REQUIREMENT FOR THE HOME PROGRAM- Section 283 of such Act is amended--

      (1) by striking the section heading and inserting in lieu thereof the following: ‘audits by the comptroller general.’;

      (2) by striking subsection (a);

      (3) by striking ‘(b) AUDITS BY THE COMPTROLLER GENERAL- ’ and redesignating paragraphs (1) and (2) as subsections (a) and (b), respectively; and

      (4) in subsection (a), as redesignated by paragraph (3), by striking the second sentence.

    (i) HOME ENVIRONMENTAL REVIEW AMENDMENTS- Section 288 of such Act is amended--

      (1)(A) in the first sentence of subsection (a), by striking out ‘participating jurisdictions’ and inserting in lieu thereof the following: ‘jurisdictions, Indian tribes, or insular areas’; and

      (B) in the first sentence of subsection (b) and in subsection (c)(4), by striking ‘participating jurisdiction’ each place it appears and inserting in lieu thereof the following: ‘jurisdiction, Indian tribe, or insular area’; and

      (2) by inserting at the end of subsection (a) the following new sentences: ‘The regulations shall, among other matters, provide for the monitoring of the performance of environmental reviews under this section and, in the discretion of the Secretary, for the provision of facilitation of training for such performance and suspension or termination of the assumption under this section. The Secretary’s duty under the foregoing sentence shall not be construed as being in derogation of any responsibility assumed by a State or unit of general local government with respect to any particular release of funds.’;

      (3) in subsection (d), by striking out ‘ASSISTANCE TO A STATE- In the case of assistance to States’ and inserting in lieu thereof the following: ‘ASSISTANCE TO UNITS OF GENERAL LOCAL GOVERNMENT FROM A STATE- In the case of assistance to units of general local government from a State’.

    (j) USE OF CDBG FUNDS FOR HOME ADMINISTRATIVE EXPENSES- Section 105(a)(13) of the Housing and Community Development Act of 1974 is amended by inserting immediately after ‘charges related to’ the following:

      ‘(A) administering the HOME program under title II of the Cranston-Gonzalez National Affordable Housing Act and (B)’.

    (k) PROJECT DELIVERY COSTS- Section 105(a)(21) of such Act is amended by--

      (1) inserting immediately after ‘housing counseling’ the following: ‘in connection with tenant-based rental assistance and affordable housing projects assisted under title II of the Cranston-Gonzalez National Affordable Housing Act’; and

      (2) striking ‘authorized’ and all that follows through ‘law’ and inserting in lieu thereof the following: ‘assisted under title II of the Cranston-Gonzalez National Affordable Housing Act’.

REDUCE HOPE 3 MATCH REQUIREMENT TO 25 PERCENT

    SEC. 212. Section 443(c)(1) of the Cranston-Gonzalez National Affordable Housing Act is amended by striking ‘33’ and inserting ‘25’.

Subtitle C--Community Partnerships Against Crime Compac Program

    SEC. 220. (a) CONFORMING PROVISIONS- (1) Section 5001 of the Anti-Drug Abuse Act of 1988 is amended--

      (A) by striking

‘Chapter 2--Public and Assisted Housing Drug Elimination’

      and inserting in lieu thereof the following:

‘Chapter 2--Community Partnerships Against Crime’;

      (B) by striking ‘Congressional findings.’ and inserting in lieu thereof the following: ‘Purposes.’; and

      (C) by adding after

      ‘Sec. 5130. Authorization of appropriations.’

      the following:

      ‘Sec. 5131. Technical assistance.’.

      (2) The heading for chapter 2 of subtitle C of title V of the Anti-Drug Abuse Act of 1988 is amended to read as follows:

‘CHAPTER 2--COMMUNITY PARTNERSHIPS AGAINST CRIME’.

    (b) SHORT TITLE, PURPOSES, AND AUTHORITY TO MAKE GRANTS- Sections 5121, 5122, and 5123 of the Public and Assisted Housing Drug Elimination Act of 1990 are amended to read as follows:

‘SEC. 5121. SHORT TITLE.

    ‘This chapter may be cited as the ‘Community Partnerships Against Crime Act of 1993’.

‘SEC. 5122. PURPOSES.

    ‘The purposes of this chapter are to--

      ‘(1) substantially expand and enhance the Federal Government’s commitment to eliminating crime in public housing;

      ‘(2) broaden the scope of the Public and Assisted Housing Drug Elimination Act of 1990 to apply to all types of crime, and not simply crime that is drug-related;

      ‘(3) target opportunities for long-term commitments of funding primarily to public housing agencies with serious crime problems;

      ‘(4) encourage the involvement of a broad range of community-based groups, and residents of neighboring housing that is owned or assisted by the Secretary, in the development and implementation of anti-crime plans;

      ‘(5) reduce crime and disorder in and around public housing through the expansion of community-oriented policing activities and problem solving;

      ‘(6) provide training, information services, and other technical assistance to program participants; and

      ‘(7) establish a standardized assessment system to evaluate need among public housing agencies, and to measure progress in reaching crime reduction goals.

‘SEC. 5123. AUTHORITY TO MAKE GRANTS.

    ‘The Secretary of Housing and urban Development, in accordance with the provisions of this chapter, may make grants, for use in eliminating crime in and around public and other federally assisted low-income housing projects (1) to public housing agencies (including Indian housing authorities) and (2) using amounts appropriated for fiscal year 1994 only, to private, for-profit and nonprofit owners of federally assisted low-income housing. In designing the program, the Secretary shall consult with the Attorney General.’.

    (c) ELIGIBLE ACTIVITIES- Section 5124 of such Act is amended--

      (1) by striking ‘(a) PUBLIC AND ASSISTED HOUSING- ’;

      (2) by inserting in the introductory material, immediately after ‘used in’, the following: ‘and around’;

      (3) in paragraph (3), by inserting immediately before the semicolon the following: ‘, such as fencing, lighting, locking, and surveillance systems’;

      (4) by striking paragraph (4)(A) and inserting in lieu thereof the following new subparagraph:

        ‘(A) to investigate crime; and’;

      (5) in paragraph (6)--

        (A) by striking ‘in and around public or other federally assisted low-income housing projects’; and

        (B) by striking ‘and’ after the semicolon;

      (6) in paragraph (7)--

        (A) by striking ‘where a public housing agency receives a grant,’;

        (B) by striking ‘drug abuse’ and inserting in lieu thereof ‘crime’; and

        (C) by striking the period at the end and inserting in lieu thereof a colon;

      (7) by adding the following new paragraphs after paragraph (7):

      ‘(8) the employment or utilization of one or more individuals, including law enforcement officers, made available by contract or other cooperative arrangement with State or local law enforcement agencies, to engage in community- and problem-oriented policing involving interaction with members of the community on proactive crime control and prevention;’

      ‘(9) youth initiatives, such as activities involving training, education, after school programs, cultural programs, recreation and sports, career planning, and entrepreneurship and employment; and

      ‘(10) resident service programs, such as job training, education programs, and other appropriate social services which address the contributing factors of crime.’; and

      (8) by striking subsection (b).

    (d) APPLICATIONS- Section 5125 of such Act is amended--

      (1) in subsection (a)--

        (A) by adding the paragraph designation ‘(1)’ immediately after ‘IN GENERAL- ’;

        (B) in the first sentence, by striking ‘, a public housing resident management corporation,’;

        (C) in the second sentence, by striking ‘drug-related crime on the premises of’ and inserting in lieu thereof the following: ‘crime in and around’; and

        (D) by adding the following new paragraphs at the end:

      ‘(2) The Secretary shall, by regulation issued after notice and opportunity for public comment, set forth criteria for establishing a class of public housing agencies that have especially severe crime problems. Any public housing agency within this class may submit an application for a one-year grant under this chapter that, subject to the availability of appropriated amounts, shall be renewed for a period not exceeding the four subsequent years: Provided, That the Secretary finds, after an annual or more frequent performance review, that the public housing agency is performing under the terms of the grant and applicable laws in a satisfactory manner and meets such other requirements as the Secretary may prescribe.

      ‘(3) Any eligible applicant may submit an application for a grant for a period of up to two years. The Secretary may accord a preference to applications seeking a subsequent grant under this paragraph if the grant is to be used to continue or expand activities assisted under a previous grant under this paragraph and the Secretary finds that the applicant’s program under the prior grant is being managed soundly and demonstrates success. Any preferences under the preceding sentence shall not unreasonably prejudice the opportunities of other public housing agencies to be awarded grants under this paragraph.’;

      (2) in subsection (b)--

        (A) in the introductory material, by striking ‘subsections (c) and (d)’ and inserting in lieu thereof ‘subsections (a) and (c)’;

        (B) in paragraph (1), by striking ‘drug-related crime problem in’ and inserting in lieu thereof the following: ‘crime problem in and around’;

        (C) in paragraph (2), by inserting immediately after ‘crime problem in’ the following: ‘and around’; and

        (D) in paragraph (4), by inserting after ‘local government’ the following: ‘, local community-based non-profit organizations, local resident organizations that represent the residents of neighboring projects that are owned or assisted by the Secretary,’;

      (3) in subsection (c)(2) by striking ‘drug-related’ the two places it appears; and

      (4) by striking subsection (d).

    (e) DEFINITIONS- Section 5126 of such Act is amended by striking paragraphs (1) and (2), and renumbering paragraphs (3) and (4) as paragraphs (1) and (2), respectively.

    (f) IMPLEMENTATION- Section 5127 of such Act is amended by striking ‘Cranston-Gonzalez National Affordable Housing Act’ and inserting in lieu thereof ‘Housing and Community Development Act of 1993’.

    (g) REPORTS- Section 5128 of such Act is amended by striking ‘drug-related crime in’ and inserting in lieu thereof the following: ‘crime in and around’.

    (h) AUTHORIZATION OF APPROPRIATIONS- Section 5130 of such Act is amended--

      (1) in the first sentence of subsection (a), by striking ‘$175,000,000 for fiscal year 1993’ and all that follows and inserting in lieu thereof: $265,000,000 for fiscal year 1994 and $325,000,000 for fiscal year 1995.’;

      (2) in subsection (b)--

        (A) by striking ‘SET-ASIDES’ and inserting in lieu thereof ‘SET-ASIDE’;

        (B) by striking the first sentence;

        (C) by striking ‘drug elimination’;

        (D) by striking ‘fiscal years 1993 and 1994’ and inserting in lieu thereof ‘fiscal year 1994’; and

        (E) by striking ‘and 5.0 percent’ and all that follows through the end of the sentence and inserting in lieu thereof a period; and

      (3) by striking subsection (c) and section 520(k) of the Cranston-Gonzalez National Affordable Housing Act.

    (i) TECHNICAL ASSISTANCE- Such Act is further amended by adding at the end thereof the following new section:

‘SEC. 5131. TECHNICAL ASSISTANCE.

    ‘Of the amounts appropriated annually for each of fiscal years 1994 and 1995 to carry out this chapter, the Secretary is authorized to use up to $10,000,000, directly or indirectly, under grants, contracts, cooperative agreements, or otherwise, to provide training, information services, and other technical assistance to public housing agencies and other entities with respect to their participation in the program authorized by this chapter. Such technical assistance may include the establishment and operation of the clearinghouse on drug abuse in public housing and the regional training program on drug abuse in public housing under sections 5143 and 5144 of this Act. The Secretary is also authorized to use the foregoing amounts for obtaining assistance in establishing and managing assessment and evaluation criteria and specifications, and obtaining the opinions of experts in relevant fields.’.

TITLE III--TECHNICAL AND OTHER AMENDMENTS

Subtitle A--Public and Assisted Housing

CORRECT THE DEFINITION OF FAMILY IN THE 1937 ACT TO CLARIFY THAT FAMILIES ARE NOT REQUIRED TO INCLUDE CHILDREN

    SEC. 301. The first sentence of section 3(b)(3)(B) of the United States Housing Act of 1937 is amended by--

      (1) striking out ‘means’ and inserting ‘includes’; and

      (2) inserting ‘and’ immediately after ‘children,’.

ELIMINATE REQUIREMENT FOR IDENTIFICATION OF CIAP REPLACEMENT NEEDS

    SEC. 302. (a) Section 14(d) of the United States Housing Act of 1937 is amended--

      (1) by striking paragraph (2); and

      (2) in paragraph (4)--

        (A) by deleting ‘and replacements,’; and

        (B) by striking ‘, (2),’.

    (b) Section 14(f)(1) of such Act is amended--

      (1) by striking subparagraph (B); and

      (2) in subparagraph (D), by striking ‘, (2),’.

APPLICABILITY OF PUBLIC HOUSING AMENDMENTS TO INDIAN HOUSING

    SEC. 303. (a) Section 201(b) of the United States Housing Act of 1937 is amended to read as follows--

    ‘(b) APPLICABILITY OF TITLE I- Except as otherwise provided by law, the provisions of title I shall apply to low-income housing developed or operated pursuant to a contract between the Secretary and an Indian housing authority.’.

    (b) The amendment made by subsection (a) shall not affect provisions of the United States Housing Act of 1937 that were made applicable to public housing developed or operated pursuant to a contract between the Secretary of Housing and Urban Development and an Indian housing authority in accordance with section 201(b)(2) of such Act, as it existed before the effective date of this section.

    (c) The provisions of sections 103(a)(1), 112, 114, 116, 118, 903, and 927 of the Housing and Community Development Act of 1992 shall also apply to public housing developed or operated pursuant to a contract between the Secretary of Housing and Urban Development and an Indian housing authority.

INCREASE THE UNIT THRESHOLD ABOVE WHICH PHAS ARE REQUIRED TO ADOPT PROJECT-BASED ACCOUNTING

    SEC. 304. Section 6(c)(4)(E) of the United States Housing Act of 1937 is amended by striking ‘250’ and inserting in lieu thereof ‘500’.

Subtitle B--Multifamily Housing

CORRECT ERRORS IN MULTIFAMILY MORTGAGE LIMITS

    SEC. 310. Sections 207(c)(3), 213(b)(2), 220(d)(3)(B)(iii), and 234(e)(3) of the National Housing Act are each amended by striking ‘$59,160’ and inserting ‘$56,160’.

FHA MULTIFAMILY RISK-SHARING; HFA PILOT PROGRAM AMENDMENTS

    SEC. 311. (a) Section 542(c) of the Housing and Community Development Act of 1992 is amended--

      (1) in paragraph (2)(C), by striking the last sentence and inserting in lieu thereof the following new sentence: ‘Such agreements shall specify that the qualified housing finance agency and the Secretary shall share any loss in accordance with the risk-sharing agreement.’;

      (2) in paragraph (2)(E)--

        (A) by inserting the clause designation ‘(i)’ before the first sentence;

        (B) in the first sentence, by inserting after ‘subsection’ the following:’, except as provided in this section,’; and

        (C) by adding the following new paragraph (2)(E)(ii):

        ‘(ii) The mortgage shall--

          ‘(I) provide for complete amortization by periodic payments within such terms as the Secretary shall prescribe;

          ‘(II) not exceed 40 years from the beginning of amortization; and

          ‘(III) not exceed a loan-to-value or loan-to-replacement cost of 90 percent for profit-motivated owners and 100 percent for nonprofit owners.’;

      (3) by adding the following new subparagraphs at the end of paragraph (2):

        ‘(F) The Secretary, upon request of a qualified housing finance agency, may insure and make commitments to insure under this section any mortgage, advance, or loan otherwise eligible under this section, pursuant to a risk-sharing agreement providing that the housing finance agency will carry out (under a delegation or otherwise, and with or without compensation, but subject to audit, exception, or review requirements) such credit approval, appraisal, inspection, issuance of commitments, cost certification, servicing, property disposition, or other functions as the Secretary, pursuant to regulations, shall approve as consistent with the purpose of this section. All appraisals of property for mortgage insurance under this section shall be completed by a Certified General Appraiser in accordance with the Uniform Standards of Professional Appraisal Practice.

        ‘(G) Qualified housing finance agencies shall make available to the Secretary or the Secretary’s designee, at the Secretary’s request, such financial and other records as the Secretary deems necessary for program review and monitoring purposes.

        ‘(H) Notwithstanding any other provision of this section, no new, existing, or rehabilitated multifamily housing with respect to which a mortgage is insured under this section shall be operated for transient or hotel purposes. For purposes of this paragraph, the term ‘rental for transient or hotel purposes’ shall have such meaning as prescribed by the Secretary, but rental for any period less than 30 days shall in any event constitute rental for such purposes.

        ‘(I) No mortgage with respect to multifamily housing may be insured under this section unless--

          ‘(i) the mortgagor certifies under oath that while such insurance remains outstanding, he or she will not rent, or permit the rental of, such housing or any part thereof for transient or hotel purposes; and

          ‘(ii) the housing finance agency has entered into such contract with the mortgagor as the Secretary deems necessary to enable the housing finance agency to prevent or terminate any use of such property or project for transient or hotel purposes while the mortgage insurance remains outstanding.’; and

      (4) by adding at the end thereof the following new paragraphs:

      ‘(9) ENVIRONMENTAL AND OTHER REVIEWS-

        ‘(A) NEPA-

          ‘(i) IN GENERAL- (I) In order to assure that the policies of the National Environmental Policy Act of 1969 and other provisions of law which further the purposes of such Act (as specified in regulations issued by the Secretary) are most effectively implemented in connection with commitments to insure mortgages under subsection (c)(2), and to assure to the public undiminished protection of the environment, the Secretary, in lieu of the environmental protection procedures otherwise applicable, may under regulations provide for commitments to insure mortgages under subsection (c)(2) upon the request of qualified housing finance agencies under this subsection if the States or units of general local governments, as designated by the Secretary in accordance with regulations, assume all of the responsibilities for environmental review, decisionmaking, and action pursuant to such Act, and such other provisions of law as the regulations of the Secretary specify, that would otherwise apply to the Secretary with respect to the commitment or endorsement of mortgage insurance on particular properties.

          ‘(II) The Secretary shall issue regulations to carry out this subparagraph only after consultation with the Council on Environmental Quality. Such regulations shall, among other matters, provide for monitoring of the performance of environmental reviews under this subparagraph and, in the discretion of the Secretary, for the provision or facilitation of training for such performance and suspension or termination of the assumption under clause (I). The Secretary’s duty under the foregoing sentence shall not be construed as being in derogation of any responsibility assumed by a State or unit of general local government with respect to any particular property under clause (I).

          ‘(ii) PROCEDURE- The Secretary shall approve the commitment to insure subject to the procedures authorized by this paragraph only if, at least 15 days prior to such approval and prior to any commitment or endorsement of mortgage insurance on the property the qualified housing finance agency has submitted to the Secretary a request for such commitment to insure accompanied by a certification of the State or unit of general local government which meets the requirements of clause (iii). The Secretary’s approval of any such certification shall be deemed to satisfy the Secretary’s responsibilities under the National Environmental Policy Act of 1969 and such other provisions of law as the regulations of the Secretary specify insofar as those responsibilities relate to the commitment or endorsement of mortgage insurance on the property which is covered by such certification.

          ‘(iii) CERTIFICATION- A certification under the procedures authorized by this paragraph shall--

            ‘(I) be in a form acceptable to the Secretary,

            ‘(II) be executed by the chief executive officer or other officer of the State or unit of general local government who qualifies under regulations of the Secretary,

            ‘(III) specify that the State or unit of general local government under this section has fully carried out its responsibilities as described under clause (i), and

            ‘(IV) specify that the certifying officer consents to assume the status of a responsible Federal official under the National Environmental Policy Act of 1969 and each provision of law specified in regulations issued by the Secretary insofar as the provisions of such Act or other such provision of law apply pursuant to clause (i), and is authorized and consents on behalf of the State or unit of general local government and himself or herself to accept the jurisdiction of the Federal courts for the purpose of enforcement of the responsibilities as such an official.

        ‘(B) LEAD-BASED PAINT POISONING PREVENTION- In carrying out the requirements of section 302 of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4822), the Secretary may provide by regulation for the assumption of all or part of the Secretary’s duties under such Act by qualified housing finance agencies, for purposes of this section.

        ‘(C) CERTIFICATION OF SUBSIDY LAYERING COMPLIANCE- The requirements of section 102(d) of the Department of Housing and Urban Development Reform Act of 1989 shall be satisfied in connection with a commitment to insure a mortgage under this subsection by a certification by a qualified housing finance agency to the Secretary that the combination of Federal assistance provided in connection with a property for which a mortgage is to be insured shall not be any more than is necessary to provide affordable housing.

      ‘(10) As used in this section--

        ‘(A) the term ‘mortgage’ means a first mortgage on real estate that is--

          ‘(i) owned in fee simple; or

          ‘(ii) on a leasehold--

            ‘(I) under a lease for not less than 99 years which is renewable; or

            ‘(II) under a lease having a period of not less than ten years to run beyond the maturity of the mortgage; and

        ‘(B) the term ‘first mortgage’ means a single first lien given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State in which the real estate is located, together with the credit instrument, if any, secured thereby. Any other financing permitted on property insured under this section must be expressly subordinate to the insured mortgage; and

        ‘(C) the terms ‘unit of general local government’ and ‘State’ mean the same as defined in section 102(a)(1) and (2), respectively, of the Housing and Community Development Act of 1974.’.

    (b) Section 544(1) is amended to read as follows:

      ‘(1) The term ‘multifamily housing’ means housing accommodations on the mortgaged property that are designed principally for residential use, conform to standards satisfactory to the Secretary, and consist of not less than five rental units on one site. These units may be detached, semi-detached, row houses, or multifamily structures.’.

SUBSIDY LAYERING REVIEW

    SEC. 312. Section 911 of the Housing and Community Development Act of 1992 is amended by--

      (1) striking subsection (a) and inserting in lieu thereof the following:

    ‘(a) CERTIFICATION OF SUBSIDY LAYERING COMPLIANCE- The requirements of section 102(d) of the Department of Housing and Urban Development Reform Act of 1989 shall be satisfied in connection with projects receiving assistance within the jurisdiction of the Department of Housing and Urban Development and under section 42 of the Internal Revenue Code of 1986 by a certification by a housing credit agency to the Secretary, submitted in accordance with guidelines established by the Secretary, that the combination of Federal assistance provided in connection with a property for which assistance is to be provided within the jurisdiction of the Department of Housing and Urban Development and under section 42 of the Internal Revenue Code of 1986 shall not be any more than is necessary to provide affordable housing.’; and

      (2) striking subsection (c) and inserting in lieu thereof the following:

    ‘(c) REVOCATION BY SECRETARY- If the Secretary determines that a housing credit agency has failed to comply with the guidelines established under subsection (a), the Secretary may inform the housing credit agency that it may no longer submit certification of subsidy layering compliance under this section. In such circumstances, the responsibilities of section 102(d) of the Housing and Urban Development Reform Act for affected projects allocated a low income housing tax credit pursuant to section 42 of the Internal Revenue Code of 1986 shall be carried out by the Secretary.’.