ALLOCATION OF HOUSING ASSISTANCE.

SEC. 101. ALLOCATION OF HOUSING ASSISTANCE. (a) Assistance Subject to Formula Allocation.—Section 213(d)(1) of the Housing and Community Development Act of 1974 is amended to read as follows: “(d) (1) (A) Except as provided by subparagraph (B), the Secretary shall allocate assistance referred to in subsection (a)(1) the first time it is available for reservation on the basis of a formula that is contained in a regulation prescribed by the Secretary, and that is 103 STAT. 1989 based on the relative needs of different States, areas, and communities, as reflected in data as to population, poverty, housing over-crowding, housing vacancies, amount of substandard housing, and other objectively measurable conditions specified in the regulation. In allocating assistance under this paragraph for each program of housing assistance under subsection (a)(1), the Secretary shall apply the formula, to the extent practicable, in a manner so that the assistance under the program is allocated according to the particular relative needs under the preceding sentence that are characteristic of and related to the particular type of assistance provided under the program. Assistance under section 202 of the Housing Act of 1959 shall be allocated in a manner that ensures that awards of the assistance under such section are made for projects of sufficient size to accommodate facilities for supportive services appropriate to the needs of frail elderly residents. “(B) The formula allocation requirements of subparagraph (A) shall not apply to— “(i) assistance that is approved in appropriation Acts for use under sections 9 or 14, or the rental rehabilitation grant program under section 17, of the United States Housing Act of 1937, except that the Secretary shall comply with section 102 of the Department of Housing and Urban Development Reform Act of 1989 with respect to such assistance; or “(ii) other assistance referred to in subsection (a) that is approved in appropriation Acts for uses that the Secretary determines are incapable of geographic allocation, including amendments of existing contracts, renewal of assistance contracts, assistance to families that would otherwise lose assistance due to the decision of the project owner to prepay the project mortgage or not to renew the assistance contract, assistance to prevent displacement or to provide replacement housing in connection with the demolition or disposition of public and Indian housing, and assistance in support of the property disposition and loan management functions of the Secretary. “(C) Any allocation of assistance under subparagraph (A) shall, as determined by the Secretary, be made to the smallest practicable area, consistent with the delivery of assistance through a meaningful competitive process designed to serve areas with greater needs. “(D) Any amounts allocated to a State or areas or communities within a State that are not likely to be used within a fiscal year shall not be reallocated for use m another State, unless the Secretary determines that other areas or communities (that are eligible for assistance under the program) within the same State cannot use the amounts within that same fiscal year.“. (b) Allocation to Nonmetropolitan Areas.—The second sentence of section 213(d)(2) of the Housing and Community Development Act of 1974 is amended by striking “such assistance” and inserting “the assistance that is subject to allocation under paragraph (1)(A)”. (c) Competition for Assistance.—Section 213(d) of the Housing and Community Development Act of 1974 is amended by adding at the end the following new paragraph: “(5) (A) The Secretary shall not reserve or obligate assistance subject to allocation under paragraph (1)(A) to specific recipients, unless the assistance is first allocated on the basis of the formula contained in that paragraph and then is reserved and obligated pursuant to a competition. 103 STAT. 1990 “(B) Any competition referred to in subparagraph (A) shall be conducted pursuant to specific criteria for the selection of recipients of assistance. The criteria shall be contained in— “(i) a regulation promulgated by the Secretary after notice and public comment; or “(ii) to the extent authorized by law, a notice published in the Federal Register. “(C) Subject to the times at which appropriations for assistance subject to paragraph (1)(A) may become available for reservation in any fiscal year, the Secretary shall take such steps as the Secretary deems appropriate to ensure that, to the maximum extent practicable, the process referred to in subparagraph (A) is carried out with similar frequency and at similar times for each fiscal year. “(D) This paragraph shall not apply to assistance referred to in paragraph (4).”. (d) Applicability.—In accordance with section 201(b)(2) of the United States Housing Act of 1937, the amendments made by subsections (a), (b), and (c) of this section 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. (e) Conforming Amendment.—Section 213(a)(1) of the Housing and Community Development Act of 1974 is amended by striking “section 235 or 236 of the National Housing Act,”.