To better assist lower income families in obtaining 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. ALLARD introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To better assist lower income families in obtaining 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.

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

SEC. 2. FINDINGS AND PURPOSES.

(a) FINDINGS- Congress finds that--

(1) the section 8 tenant-based assistance program now provides rental and homeownership assistance to more than 1,800,000 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 of Housing and Urban Development, 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 authorized by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (42 U.S.C. 601 et. seq.) 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 of 1998 (P.L. 105-220; 112 Stat. 936), 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. DEFINITIONS.

In this Act:

(1) FAMILIES; ELDERLY FAMILIES; DISABLED FAMILIES- The terms `families', `elderly families', and `disabled families' have the meanings given those terms in section 3(b)(3) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)(3)).

(2) ANNUAL GROSS INCOME; GROSS MONTHLY INCOME- The terms `annual gross income' and `gross monthly income' mean income, during the appropriate period of time, from all sources of each member of a household, as determined in accordance with criteria prescribed by the State in which the household is located.

(3) SECRETARY- The term `Secretary' means the Secretary of Housing and Urban Development.

(4) STATE- The term `State' means 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.

(5) TENANT-BASED RENTAL AND HOMEOWNERSHIP HOUSING ASSISTANCE- The term `tenant-based rental and homeownership housing assistance' means assistance provided to an eligible family

under this Act to select suitable housing, and to re-locate to other suitable housing.

SEC. 4. AUTHORITY.

(a) IN GENERAL- The Secretary may--

(1) make grants to States to provide tenant-based rental and homeownership housing assistance; and

(2) carry out activities related to the provision of those grants in accordance with this Act.

(b) ASSISTANCE- Subject to the availability of appropriations, each State receiving a grant under this Act shall, for each of the fiscal years 2005 through 2009, provide tenant-based rental and homeownership housing assistance to not 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 during that 120-day period.

(c) DESIGNATION OF AGENCIES- The chief executive officer of any State may, in any fiscal year during which a grant under this Act is received by the State, designate any agency or instrumentality of the State to act on behalf of the State with regard to this Act.

SEC. 5. ELIGIBLE ACTIVITIES.

Grants awarded pursuant to section 4 may be used for--

(1) tenant-based rental housing assistance;

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

(3) defraying the 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) any other activities specified by the Secretary in support of tenant-based rental housing and homeownership assistance.

SEC. 6. PLANNING AND PERFORMANCE.

(a) STATE PLAN- In any fiscal year, prior to the receipt of a grant under this Act, a 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 (42 U.S.C. 12705), set forth quantifiable objectives related to performance standards established by the Secretary under subsection (b).

(b) PERFORMANCE STANDARDS- The Secretary shall establish uniform performance standards for States receiving grants under this Act that shall address the--

(1) utilization of all grant funds received under this Act;

(2) overall effective financial management of grant funds received under this Act;

(3) number of families served by grant funds received under this Act;

(4) quality of affordable housing subsidized by grant funds received under this Act;

(5) overall reduction of homelessness, including homelessness among veterans, within the State;

(6) improvement of living conditions for elderly and disabled families;

(7) the effectiveness of voucher assistance in helping families move toward homeownership and self-sufficiency; and

(8) the extent to which State or local governments remove barriers to affordable housing.

(c) PERFORMANCE REPORT-

(1) IN GENERAL- Each State shall submit to the Secretary, at a time and in a form determined by the Secretary, a report detailing--

(A) the progress the State has made in carrying out its strategy or plan under subsection (a); and

(B) the success of the State in meeting the quantifiable objectives established by the State under subsection (a).

(2) ADDITIONAL INFORMATION- The report required under paragraph (1) shall also set forth--

(A) the number of families and individuals receiving tenant-based rental and homeownership housing assistance under the State program;

(B) of those families reported under subparagraph (A), the--

(i) number of families with children;

(ii) number of elderly families;

(iii) number of disabled families;

(iv) annual gross income of each family;

(v) sources of income of each family; and

(vi) changes in income and employment status of each family;

(C) the total amount of housing assistance received under this Act by all families reported under subparagraph (A);

(D) the amount of grant funds distributed under this Act that are spent on administrative fees;

(E) the poverty rates of neighborhoods in which families receiving tenant-based homeownership and housing assistance reside; and

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

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

(4) PUBLIC DISCLOSURE- The Secretary shall make available to the public any report submitted to the Secretary under this subsection.

(d) ALTERNATIVE ADMINISTRATION-

(1) IN GENERAL- If, at any time after September 30, 2004, the Secretary determines that a State cannot administer grant amounts in conformity with this Act, the Secretary shall--

(A) oversee all future disbursements of grant funds within the State;

(B) require such modifications to the administration of grant amounts within the State as the Secretary deems necessary to bring the State into conformity with this Act; or

(C) authorize the administration of grant funds by 1 or more public housing agencies or other entities.

(2) APPLICABILITY OF LAW- Any public housing agency or other entity authorized to oversee the administration of grant funds pursuant to paragraph (1)(C) shall be treated as a State for purposes of this Act.

SEC. 7. ELIGIBLE FAMILIES.

(a) INITIAL ELIGIBILITY-

(1) IN GENERAL- A family shall be eligible to receive tenant-based rental and homeownership housing assistance if that family--

(A) is not receiving assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f); and

(B) does not have a gross income exceeding 80 percent of the median income for the area, as determined by the Secretary with adjustments based upon the size of the family, 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-

(A) IN GENERAL- In any fiscal year, not less than 75 percent of families receiving their first payment of tenant-based rental and homeownership housing assistance within a State shall have incomes that do exceed 30 percent of the area median income, as determined by the Secretary, with adjustments based upon the size of each family.

(B) WAIVER-

(i) IN GENERAL- Any State desiring a waiver of the income requirements in subparagraph (A) shall submit to the Secretary such evidence sufficient to allow for a finding that the requirements cannot reasonably be met during a particular fiscal year.

(ii) MODIFICATION- In any fiscal year in which a waiver of the income requirements is granted, the Secretary shall modify the requirements of subparagraph (A) to a level that the State can reasonably attain.

(iii) LIMITATION- The Secretary may grant a waiver of the income requirements only to the extent that not less than 55 percent of new admissions in the State in any fiscal year have incomes that do not exceed 30 percent of the area median income.

(b) CONTINUED ELIGIBILITY- Subject to subsection (d), continued eligibility for tenant-based housing and homeownership assistance shall be determined in accordance with standards established--

(1) by the State in which the family resides; or

(2) in those instances in which the State does not administer grant funds, by either the Secretary or the entity responsible for the administration of such grant funds.

(c) PREFERENCES- In distributing grant funds, each State may establish a uniform system that provides preference to families having certain characteristics, including--

(1) working families;

(2) families currently receiving assistance under the Temporary Assistance for Needy Families program authorized by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (42 U.S.C. 601 et seq.);

(3) individuals at risk of chronic homelessness;

(4) families affected by the conversion, sale, or demolition of public housing projects;

(5) families relocating from 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

(6) veterans of the Armed Forces of the United States.

(d) GRANDFATHERING PROVISION-

(1) SECTION 8 TENANT-BASED ASSISTANCE; VOUCHER ASSISTANCE- Any family or entity receiving homeownership, project-based certificate, project-based voucher assistance, or tenant-based assistance under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) as of the date of enactment of this Act shall--

(A) for each of the fiscal years 2005 through 2009, continue to receive such assistance subject to the terms and conditions of that Act, from amounts made available pursuant to section 14 of this Act; and

(B) for each of the fiscal years after 2009, receive such assistance subject to the terms and conditions of this Act.

(2) INSUFFICIENT FUNDS- If grant funds received by the State pursuant to this Act are insufficient to fund all currently assisted families pursuant to paragraph (1)(A), the State shall make every effort to continue to provide assistance to the same number of families currently receiving assistance in the State.

(3) CONFORMING AMENDMENT- Section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) is amended by adding at the end the following:

`(20) PHASE-OUT- Any family or entity receiving homeownership, project-based certificate, project-based voucher, or tenant-based assistance (provided under this subsection) shall, for fiscal year 2010 and each fiscal year thereafter, receive such assistance only according to the terms and conditions of the Housing Assistance for Needy Families Act of 2003.'.

(e) ANNUAL REVIEW OF FAMILY INCOME- Each State administering a grant under this Act shall conduct an annual review of the family income of each family receiving assistance under this Act, except that the State shall be required to review the income of elderly families every 3 years.

SEC. 8. AMOUNT OF ASSISTANCE.

(a) IN GENERAL-

(1) ADMINISTRATION- Subject to subsections (b), (c), and (d), the amount of any monthly assistance payment to a family pursuant to this Act shall be determined by the State, or such other entity responsible for administering such assistance.

(2) MINIMUM PAYMENTS-

(A) IN GENERAL- Except as provided in subsection (b), no family residing in a dwelling unit that is assisted with grant funds under this Act shall be required at the time of entering the lease to pay more than 30 percent of such family's gross monthly income as rent (including the amount allowed for tenant-paid utilities), or as homeownership expenses.

(B) EXCEPTION- A family may choose to pay a greater amount of its gross monthly income to secure higher quality housing.

(b) MINIMUM RENTAL AMOUNT-

(1) IN GENERAL- Each State shall establish a minimum monthly rental amount of $50 per month for any dwelling unit assisted with grant funds under this Act.

(2) HARDSHIP EXEMPTION- A State may grant a hardship exemption on a case-by-case basis.

(c) REASONABLE RENT- 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) Allocations for Fiscal Years 2004 and 2005- The Secretary shall allocate amounts made available in an appropriations Act for homeownership, project-based certificate, project-based voucher, or tenant-based assistance under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f) as follows:

(1) FISCAL YEAR 2004- For fiscal year 2004, allocate 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 that fiscal year.

(2) FISCAL YEAR 2005- 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.

(b) Base Allocations for Fiscal Year 2006 and Subsequent Fiscal Years-

(1) ESTABLISHMENT OF FORMULA- Not later than 12 months after the date of enactment of this Act, the Secretary shall, by regulation, establish a formula allocating amounts available for fiscal year 2006 and subsequent fiscal years for block grants to States under this Act.

(2) FACTORS- In establishing the formula under paragraph (1), the Secretary shall consider factors reflecting the need of low-income families in each State, including--

(A) the number of families receiving tenant-based housing and homeownership assistance under this Act in each State;

(B) the extent of poverty within the State;

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

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

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

(F) other objectively measurable criteria as the Secretary may specify.

(3) SPECIAL PROVISIONS- Subject to paragraph (4), for each of the fiscal years 2006 through 2009, the formula established under paragraph (1) shall provide that--

(A) 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 not 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 its plan or strategy under section 6(a); or

(B) 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 its plan or strategy under section 6(a).

(4) RETENTION OF FUNDS; EFFECT ON ALLOCATION-

(A) IN GENERAL- Beginning on September 30, 2005, any amounts made available during 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.

(B) ADJUSTMENT OF ALLOCATION- In calculating the amount of assistance to allocate to a State in any fiscal year following the 2005 fiscal year, the Secretary shall reduce the amount that would otherwise be allocated to that State pursuant to this paragraph by the amounts identified in subparagraph (A).

(C) PERFORMANCE ADJUSTMENT- In any fiscal year following the 2005 fiscal year, subject to the availability of appropriated amounts, and in addition to amounts provided under the formula established under paragraph (1), 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 6(b).

(c) TENANT-PROTECTION ASSISTANCE- 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.

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 that any State administering grant funds under this Act inspect a dwelling unit prior to the disbursement of those funds to determine whether the dwelling unit meets the housing quality standards described in subsection (b).

(b) HOUSING QUALITY STANDARDS- All dwelling units in a State receiving assistance under this Act shall meet--

(1) all applicable State and local housing quality standards and code requirements; or

(2) if there are no such standards or code requirements, housing quality standards established by the Secretary.

(c) INSPECTIONS- Each State administering housing assistance provided under this Act shall ensure that

all dwelling units receiving such assistance are maintained in accordance with the standards described in subsection (b). Every dwelling unit in the State receiving assistance under this Act shall be inspected not less than once every 3 years.

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

SEC. 12. PORTABILITY.

(a) IN GENERAL- Any family receiving housing assistance pursuant to this Act shall be eligible to receive assistance in any State in which a program is being administered under this Act.

(b) ADMINISTRATION OF ASSISTANCE- Assistance for any family relocating 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 conduct such reviews and audits as may be necessary to determine whether a State has--

(1) carried out the housing assistance activities and objectives set forth in its plan under section 6(a) in a timely or effective manner;

(2) carried out those activities and objectives, including certifications, in accordance with the requirements of this Act and other applicable laws;

(3) the capacity to continue to undertake those activities in a timely and effective manner; and

(4) met the performance standards established by the Secretary pursuant to section 6(b).

(b) COMPLIANCE ACTIONS- In addition to any other actions authorized under this or any other Act, if the Secretary finds, after 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 AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as may be necessary to carry out this Act for each of fiscal years 2004 through 2009.

END