HR 1841 IH

To better assist lower income families to obtain decent, safe, and affordable housing through the conversion of the section 8 housing choice voucher program into a State-administered block grant.

April 29, 2003

Mr. NEY (by request) introduced the following bill; which was referred to the Committee on Financial Services

To better assist lower income families to obtain decent, safe, and affordable housing through the conversion of the section 8 housing choice voucher program into a State-administered block grant.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Housing Assistance for Needy Families Act of 2003'.

(b) TABLE OF CONTENTS-

Sec. 1. Short title and table of contents.

Sec. 2. Findings and purposes.

Sec. 3. Authority.

Sec. 4. Definitions.

Sec. 5. Planning and performance.

Sec. 6. Eligible families.

Sec. 7. Eligible activities.

Sec. 8. Amount of assistance.

Sec. 9. Authorization, allocation and distribution of funds.

Sec. 10. Environmental review.

Sec. 11. Inspection of units.

Sec. 12. Portability.

Sec. 13. Compliance.

Sec. 14. Effective date.

SEC. 2. FINDINGS AND PURPOSES.

(a) FINDINGS- The Congress finds that--

(1) the section 8 tenant-based assistance program now provides rental and homeownership assistance to more than 1.8 million families;

(2) despite this success, during the past several years, billions of dollars of funds appropriated for tenant-based assistance have remained unspent, and as a result, several hundred thousand families have not been provided housing assistance made available by Congress;

(3) over 2,600 public housing agencies, half of which administer 250 or fewer vouchers, administer the tenant-based assistance program through direct contracts with the Secretary, and thus the Secretary must administer the program through rules and regulations that apply directly to more than 2,600 entities throughout the Nation;

(4) this administrative structure has contributed to the development of regulatory and statutory measures that have made the tenant-based assistance program overly prescriptive and difficult to administer, with hundreds of pages of regulations and guidance;

(5) the complexity of the tenant-based assistance program, its inability to allow adequate timely adjustments to changing local markets, and its multiplicity of Federal directives, all have contributed to several hundred thousand families not being provided the housing assistance made available by Congress;

(6) the linkage between housing assistance and the government's role in supporting self-sufficiency efforts for low-income families is critical, and this role is now largely carried out by the States under the Temporary Assistance for Needy Families program and other programs; and

(7) since assuming responsibility for the Temporary Assistance for Needy Families program, and with respect to other initiatives, such as the One-Stop Career Center system under the Workforce Investment Act, States have shown that they can bring creative, effective administration to programs for assistance to needy families.

(b) PURPOSES- The purpose of this Act is to provide for housing assistance through a State-administered block grant, and thereby to--

(1) provide for the necessary program flexibility and oversight so that funds are used promptly and effectively to assist needy families;

(2) facilitate greater program responsiveness to local markets and needs;

(3) provide for administrative decision-making closer to the communities and families affected, by their elected officials;

(4) provide for additional program flexibility to address local needs;

(5) give States the authority to reallocate funds or take other actions necessary to ensure that program funds are expended promptly and effectively;

(6) improve government support of self-sufficiency efforts by assisted families, by facilitating greater coordination with the Temporary Assistance for Needy Families program, programs under the Workforce Investment Act, and other Federal and State programs that promote self-sufficiency;

(7) provide greater flexibility for addressing special needs of elderly and disabled families; and

(8) facilitate State and local efforts to reduce homelessness.

SEC. 3. AUTHORITY.

(a) The Secretary is authorized to make grants to States to provide tenant-based rental and homeownership housing assistance and to carry out activities related thereto in accordance with the provisions of this Act.

(b) Subject to the availability of appropriations, each State receiving a grant under this Act shall, for fiscal years 2005 through 2009, provide tenant-based rental and homeownership housing assistance to no fewer than the average number of families served in such State during the 120 day period ending on September 30, 2004 by the Housing Choice Voucher program authorized under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), including those families receiving enhanced voucher assistance authorized under such section 8.

(c) The chief executive officer of any State may, in any fiscal year, after receiving a grant under this Act for such fiscal year, designate any agency or instrumentality of the State to act on behalf of the State with regard to the provisions of this Act.

SEC. 4. DEFINITIONS.

(a) The term `State' shall include the several States, the District of Columbia, the Commonwealth of Puerto Rico, the territories and possessions of the United States, and the Commonwealth of the Northern Mariana Islands.

(b) The term `gross monthly income' shall include income from all sources of each member of the household, as determined in accordance with criteria prescribed by the State.

(c) The terms `elderly families', `disabled families', and `Secretary' used in this Act shall have the definitions accorded such terms by the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.).

(d) The term `tenant-based rental housing assistance' means assistance that provides for the eligible family to select suitable housing and to move to other suitable housing.

SEC. 5. PLANNING AND PERFORMANCE.

(a) STATE PLAN- Prior to the receipt in any fiscal year of a grant under this Act, the State shall, as part of its comprehensive housing affordability strategy (or any consolidated plan incorporating such strategy) under section 105 of the Cranston-Gonzalez National Affordable Housing Act, set forth quantifiable objectives related to performance measures established by the Secretary under subsection (b).

(b) PERFORMANCE STANDARDS- The Secretary shall establish performance standards for States receiving grants under this section as the Secretary determines to be appropriate, including budget utilization, financial management, number of families served, quality of housing, reduction of homelessness (including homelessness among veterans), improved living conditions for elderly and disabled families, the effectiveness of voucher assistance in helping families move toward homeownership and self-sufficiency, and the extent to which State or local governments remove barriers to affordable housing.

(c) PERFORMANCE REPORT-

(1) The Secretary shall require each State to submit to the Secretary, at a time and in a form determined by the Secretary, a performance evaluation and report to be made available to the public concerning the progress it has made in carrying out its plan under subsection (a) and in meeting annual numerical performance targets consistent with the performance standards established under subsection (b). Included in the report shall be:

(A) the number of families and individuals receiving tenant-based rental and homeownership housing assistance under the State program including the number of families with children, elderly families, and disabled families. For each family, information on income, sources of income, and changes in income and employment status;

(B) the total dollar value of housing assistance received by all families;

(C) amounts spent on administrative fees;

(D) information about the neighborhood poverty rates in which families reside; and

(E) other information on the use of Federal assistance as the Secretary may prescribe.

(2) SUFFICIENCY OF REPORT- If a State fails to submit a report satisfactory to the Secretary in a timely manner, the Secretary may take any necessary compliance actions authorized under section 13(b) of this Act.

(d) ALTERNATIVE ADMINISTRATION-

(1) In fiscal year 2005 and any fiscal years thereafter, if any State has not demonstrated to the satisfaction of the Secretary that it has the capacity to adequately administer grant amounts under this Act, the Secretary shall determine how to carry out such program in any such State, which may include administration of such program by one or more public housing agencies or other entities.

(2) If, pursuant to paragraph (1), grant amounts under this Act are administered by one or more public housing agencies or other entities, all provisions under this Act which would otherwise be applicable to States administering funds under this Act shall be applicable instead to such public housing agencies or other entities.

SEC. 6. ELIGIBLE FAMILIES.

(a) INITIAL ELIGIBILITY-

(1) To be eligible to receive tenant-based rental and homeownership housing assistance under this Act, a family that is not assisted under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) shall have an income that does not exceed 80 percent of the median income for the area, as determined by the Secretary with adjustments for smaller or larger families, except that the Secretary may establish income ceilings higher than 80 percent of the median for the area for elderly and disabled families.

(2) NEW ADMISSIONS- Of the families eligible to receive assistance pursuant to subsection (a) and initially receiving such assistance under this Act, not less than 75 percent of such new admissions in each State in any fiscal year shall have incomes that do not exceed 30 percent of the area median income, as determined by the Secretary with adjustments for smaller or larger families. If States are prevented from achieving this requirement and proof is provided that this target cannot be met, then States may submit waiver requests to the Secretary for additional income targeting flexibility for new admissions, however, the Secretary may grant such waivers only to the extent that not less than 55 percent of new admissions in each State in any fiscal year shall have incomes that do not exceed 30 percent of the area median income.

(b) CONTINUED ELIGIBILITY- Subject to subsection (d), continued eligibility for housing assistance pursuant to this Act shall be determined in accordance with standards established by or for the State in which the family resides.

(c) PREFERENCES- Each State receiving a grant pursuant to this Act may establish a system for making housing assistance pursuant to this Act available on behalf of eligible families that provides preference for such assistance to eligible families having certain characteristics, including working families; families already receiving assistance under the Temporary Assistance for Needy Families program; individuals at risk of chronic homelessness; families affected by the conversion, sale, or demolition of public

housing projects; families leaving structures receiving project-based assistance under section 8(o)(13) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)); and to veterans of the Armed Forces of the United States, especially to homeless veterans.

(d) GRANDFATHERING PROVISION-

(1) Any family that is receiving tenant-based assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) shall, for fiscal years 2005 through 2009, continue to receive such assistance subject to the terms and conditions of such Act, from amounts made available pursuant to section 9(c) of this Act. Any family that is receiving homeownership, project-based certificate, or project-based voucher assistance under such section 8 shall continue to receive such assistance subject to the terms and conditions of such Act, from amounts made available pursuant to section 9(c) of this Act.

(2) If the grant received by the State pursuant to this Act is insufficient to fund all currently assisted families pursuant to paragraph (1) in the amounts specified under current program requirements, the State shall make every effort to continue to provide assistance to the greatest extent possible to the same number of assisted families in the State.

(e) ANNUAL REVIEW OF FAMILY INCOME- Each State administering a housing assistance grant pursuant to this Act shall, not less frequently than annually, conduct a review of the family income of each family receiving such assistance, except that the State shall review the income of elderly families not less frequently than every three years.

SEC. 7. ELIGIBLE ACTIVITIES.

Activities assisted under this Act may include only--

(1) tenant-based rental housing assistance;

(2) homeownership assistance for first-time homebuyers, including monthly homeownership assistance and downpayment assistance as defined in section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f);

(3) costs of administering grant amounts under this Act, except that such costs shall not exceed 10 percent of grant amounts provided to the State; and

(4) other activities, as specified by the Secretary, in support of tenant-based rental housing and homeownership assistance activities authorized under this section.

SEC. 8. AMOUNT OF ASSISTANCE.

(a) IN GENERAL- Subject to subsections (b), (c), and (d), any monthly assistance payment for a family receiving housing assistance pursuant to this Act shall be determined by the State administering such assistance. Except as provided in subsection (b), no family residing in a dwelling unit that is assisted with grant amounts under this Act will be required at the time of initial leasing to pay more than 30 percent of such family's gross monthly income as rent for such dwelling unit (including the amount allowed for tenant-paid utilities), or as homeownership expenses, where applicable. Families may choose to pay more to secure better quality housing.

(b) MINIMUM RENTAL AMOUNT- Notwithstanding subsection (a) of this section, States shall establish a minimum monthly rental amount of $50 per month. Notwithstanding the preceding sentence, a hardship exemption may be granted on a case-by-case basis as determined by the State.

(c) RENT REASONABLENESS- The rent for dwelling units assisted under this Act shall be reasonable and appropriate in comparison with rents charged for non-luxury dwelling units in the private, unassisted local market.

(d) MAXIMUM SUBSIDY- States shall establish maximum subsidy levels for housing assistance under this Act that are reasonable and appropriate for the market area.

SEC. 9. AUTHORIZATION, ALLOCATION AND DISTRIBUTION OF FUNDS.

(a) The Secretary shall allocate amounts made available in an appropriations Act as follows:

(1) ALLOCATIONS FOR FISCAL YEARS 2004 AND 2005-

(A) For fiscal year 2004, to public housing agencies under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), except that the Secretary may reallocate to a State, from public housing agencies in the same State, any amounts made available under such section 8 that are not being utilized by the end of the fiscal year.

(B) In fiscal year 2005, the Secretary shall allocate to each State an amount that bears the same ratio to the total amount available for assistance under this Act for such fiscal year that the amount allocated in fiscal year 2004 to public housing agencies within the State bears to the total amount made available under this Act for fiscal year 2004.

(2) BASE ALLOCATIONS FOR FISCAL YEAR 2006 AND SUBSEQUENT FISCAL YEARS-

(A) The Secretary shall, by regulation issued not later than 12 months after the date

of enactment of this Act, establish a formula to provide for allocating amounts available for fiscal year 2006 and subsequent fiscal years for block grants to States under this Act.

(B) In establishing the formula, the Secretary shall consider factors reflecting the need of low-income families in each State, including the following factors:

(i) The number of families receiving housing assistance under this Act in each State;

(ii) the extent of poverty within the State;

(iii) the cost of housing in the State or areas of the State;

(iv) the performance of the State in administering grant amounts under this Act;

(v) the extent to which the State has available any funds previously appropriated under this Act; and

(vi) other objectively measurable conditions as the Secretary may specify.

(C) Subject to subparagraph (D), for fiscal years 2006 through 2009, the formula shall provide that--

(i) for a fiscal year in which the amount appropriated for block grants under this Act is equal to or greater than the amount appropriated in fiscal year 2005, the Secretary shall provide each State with an allocation that is no less than the allocation that the State received in fiscal year 2005 adjusted for changes in housing costs in the preceding year and for the State's performance in using funds and executing the program; or

(ii) for a fiscal year in which the total amount made available to States for assistance under this Act is less than the total amount made available to States for fiscal year 2005, the amount provided to each State for such fiscal year shall not be less than the amount that bears the same ratio to the total amount available for assistance under this Act for such fiscal year that the amount provided to the State for fiscal year 2005 bears to the total amount made available to States for fiscal year 2005 adjusted for changes in housing costs in the preceding year and for the State's performance in using funds and executing the program.

(D) Beginning in fiscal year 2005, any amounts made available by a time determined by the Secretary for housing assistance to any State that exceed the amounts being utilized for housing assistance by the end of the fiscal year shall be identified and shall be retained by the State. In calculating the amount of assistance to allocate to such State in the following fiscal year, the Secretary shall reduce the amount that would otherwise be allocated to such State pursuant to this paragraph by the identified amounts. In such following fiscal year, subject to the availability of appropriated amounts, in addition to amounts provided under the formula, the Secretary shall allocate an amount at least equal to the total amount of the reductions in assistance made in such fiscal year pursuant to this subparagraph to those States that have exceeded, as determined by the Secretary, the performance standards established by the Secretary under section 5(b).

(b) Subject to the availability of appropriations, the Secretary shall allocate additional amounts to each State for tenant-protection assistance as authorized by section 8(t) of the United States Housing Act of 1937 (42 U.S.C. 1437f(t)) in fiscal year 2005 and each fiscal year thereafter based on the number of eligible tenants previously receiving such assistance in that State.

(c) There are authorized to be appropriated such sums as may be necessary for each of fiscal years 2004 through 2009.

SEC. 10. ENVIRONMENTAL REVIEW.

For purposes of environmental review, a grant under this Act shall be treated as assistance for a special project that is subject to section 305(c) of the Multifamily Housing Property Disposition Reform Act of 1994 (42 U.S.C. 3547), and shall be subject to the regulations issued by the Secretary to implement such section.

SEC. 11. INSPECTION OF UNITS.

(a) IN GENERAL- The Secretary shall require with respect to any dwelling unit assisted pursuant to this Act that the State administering housing assistance pursuant to this Act inspect the unit before any assistance payment may be made to determine whether the dwelling unit

meets the housing quality standards under subsection (b). Such dwelling unit must meet such standards before any assistance payment is made.

(b) HOUSING QUALITY STANDARDS- All dwelling units in a State assisted under this Act shall meet all applicable State and local housing quality standards and code requirements, and if there are no such standards or code requirements, the housing shall meet the housing quality standards established by the Secretary.

(c) INSPECTIONS- Each State administering housing assistance under this Act shall ensure that all occupied dwelling units in such State assisted pursuant to this Act are maintained in accordance with the standards described under subsection (b). Every dwelling unit in the State assisted pursuant to this Act shall be inspected not less than once every three years.

(d) CORRECTIVE ACTIONS- No assistance payment may be made pursuant to this Act for a dwelling unit, which fails to meet the standards under subsection (b).

SEC. 12. PORTABILITY.

(a) Any family receiving housing assistance pursuant to this Act shall receive such assistance to rent an eligible dwelling unit within any State in which a program is being administered under this Act.

(b) Assistance for any family moving pursuant to subsection (a) shall be administered in accordance with the provisions established pursuant to this Act in the State to which the family moves.

SEC. 13. COMPLIANCE.

(a) COMPLIANCE MONITORING- The Secretary may make such reviews and audits as may be necessary or appropriate to determine whether the State has carried out the housing assistance activities and objectives set forth in its plan under section 5(a) in a timely or effective manner, whether it has carried out those activities and objectives, including certifications, in accordance with the requirements of this Act and other applicable laws, whether it has the capacity to continue to undertake these activities in a timely and effective manner, and whether it has met the performance standards established by the Secretary pursuant to section 5(b).

(b) COMPLIANCE ACTIONS- In addition to any other actions authorized under this or any other Act, if the Secretary finds after reasonable notice and opportunity for a hearing that a State receiving a grant under this Act has failed to comply substantially with any provision of this Act, including any performance standard established by the Secretary pursuant to this Act, and until the Secretary is satisfied that there is no longer any such failure to comply, the Secretary may--

(1) terminate grant payments under this Act to the State and provide for alternative administration of such grant amounts;

(2) withhold from the State amounts from the total allocation that would otherwise be available to the State under this Act;

(3) reduce the amount of future grants to the State by an amount equal to the amount of such grants that were not expended in accordance with this Act;

(4) limit the availability of grant amounts provided to the State to programs and activities under this Act not affected by such failure to comply;

(5) withhold from the State other amounts allocated for the State under other programs administered by the Secretary;

(6) refer the matter to the Attorney General of the United States with a recommendation that an appropriate civil action be instituted; or

(7) order other corrective action with respect to the State.

SEC. 14. EFFECTIVE DATE.

The provisions of this Act shall take effect on the date of the enactment of this Act.

END