INCOME TARGETING.

SEC. 513. INCOME TARGETING. (a) In General.— Section 16 of the United States Housing Act of 1937 (42 U.S.C. 1437n) is amended by striking the section designation and all that follows through the end of subsection (d) and inserting the following: “SEC. 16. (a) Income Eligibility for Public Housing.— “(1) Income mix within projects.— A public housing agency may establish and utilize income-mix criteria for the selection of residents for dwelling units in public housing projects, subject to the requirements of this section. “(2) PHA income mix.— “(A) Targeting.— Except as provided in paragraph (4), of the public housing dwelling units of a public housing agency made available for occupancy in any fiscal year 112 STAT. 2544by eligible families, not less than 40 percent shall be occupied by families whose incomes at the time of commencement of occupancy do not exceed 30 percent of the area median income, as determined by the Secretary with adjustments for smaller and larger families. “(3) Prohibition of concentration of low-income families.— “(A) Prohibition.— A public housing agency may not, in complying with the requirements under paragraph (2), concentrate very low-income families (or other families with relatively low incomes) in public housing dwelling units in certain public housing projects or certain buildings within projects. The Secretary shall review the income and occupancy characteristics of the public housing projects and the buildings of such projects of such agencies to ensure compliance with the provisions of this paragraph and paragraph (2). “(B) Deconcentration.— “(i) In general.— A public housing agency shall submit with its annual public housing agency plan under section 5A an admissions policy designed to provide for deconcentration of poverty and income-mixing by bringing higher income tenants into lower income projects and lower income tenants into higher income projects. This clause may not be construed to impose or require any specific income or racial quotas for any project or projects. “(ii) Incentives.— In implementing the policy under clause (i), a public housing agency may offer incentives for eligible families having higher incomes to occupy dwelling unit in projects predominantly occupied by eligible families having lower incomes, and provide for occupancy of eligible families having lower incomes in projects predominantly occupied by eligible families having higher incomes. “(iii) Family choice.— Incentives referred to in clause (ii) may be made available by a public housing agency only in a manner that allows for the eligible family to have the sole discretion in determining whether to accept the incentive and an agency may not take any adverse action toward any eligible family for choosing not to accept an incentive and occupancy of a project described in clause (i)(II), Provided, That the skipping of a family on a waiting list to reach another family to implement the policy under clause (i) shall not be considered an adverse action. An agency implementing an admissions policy under this subparagraph shall implement the policy in a manner that does not prevent or interfere with the use of sitebased waiting lists authorized under section 6(s). “(4) Fungibility with tenant-based assistance.— “(A) Authority.— Except as provided under subparagraph (D), the number of public housing dwelling units that a public housing agency shall otherwise make available in accordance with paragraph (2)(A) to comply with the percentage requirement under such paragraph for a 112 STAT. 2545fiscal year shall be reduced by the credit number for the agency under subparagraph (B). “(B) Credit for exceeding tenant-based assistance targeting requirement— Subject to subparagraph (C), the credit number under this subparagraph for a public housing agency for a fiscal year shall be the number by which— “(i) the aggregate number of qualified families who, in such fiscal year, are initially provided tenant-based assistance under section 8 by the agency; exceeds “(ii) the number of qualified families that is required for the agency to comply with the percentage requirement under subsection (b)(1) for such fiscal year. “(C) Limitations on credit number.— The credit number under subparagraph (B) for a public housing agency for a fiscal year may not in any case exceed the lesser of— “(i) the number of dwelling units that is equivalent to 10 percent of the aggregate number of families initially provided tenant-based assistance under section 8 by the agency in such fiscal year; or “(ii) the number of public housing dwelling units of the agency that— “(I) are in projects that are located in census tracts having a poverty rate of 30 percent or more; and “(II) are made available for occupancy during such fiscal year and are actually filled only by families whose incomes at the time of commencement of such occupancy exceed 30 percent of the area median income, as determined by the Secretary with adjustments for smaller and larger families. “(D) Fungibility floor.— Notwithstanding any authority under subparagraph (A), of the public housing dwelling units of a public housing agency made available for occupancy in any fiscal year by eligible families, not less than 30 percent shall be occupied by families whose incomes at the time of commencement of occupancy do not exceed 30 percent of the area median income, as determined by the Secretary with adjustments for smaller and larger families. “(E) Qualified Family.— For purposes of this paragraph, the term ‘qualified family’ means a family having an income described in subsection (b)(1). “(b) Income Eligibility for Tenant-Based Section 8 Assistance.— “(1) In general.— Of the families initially provided tenant-based assistance under section 8 by a public housing agency in any fiscal year, not less than 75 percent shall be families whose incomes do not exceed 30 percent of the area median income, as determined by the Secretary with adjustments for smaller and larger families; except that the Secretary may establish income ceilings higher or lower than 30 percent of the area median income on the basis of the Secretary’s findings 112 STAT. 2546that such variations are necessary because of unusually high or low family incomes. “(2) Jurisdictions served by multiple pha’s.— In the case of any 2 or more public housing agencies that administer tenant-based assistance under section 8 with respect solely to identical geographical areas, such agencies shall be treated as a single public housing agency for purposes of paragraph (1). “(c) Income Eligibility for Project-Based Section 8 Assistance.— “(1) Pre-1981 act projects.— Not more than 25 percent of the dwelling units that were available for occupancy under section 8 housing assistance payments contracts under this Act before the effective date of the Housing and Community Development Amendments of 1981, and which will be leased on or after such effective date shall be available for leasing by low-income families other than very low-income families. “(2) Post-1981 act projects.— Not more than 15 percent of the dwelling units which become available for occupancy under section 8 housing assistance payments contracts under this Act on or after the effective date of the Housing and Community Development Amendments of 1981 shall be available for leasing by low-income families other than very low- income families. “(3) Targeting.— For each project assisted under a contract for project-based assistance, of the dwelling units that become available for occupancy in any fiscal year that are assisted under the contract, not less than 40 percent “(4) Prohibition of skipping.— In developing admission procedures implementing paragraphs (1), (2), and (3), the Secretary shall prohibit project owners from selecting families for residence in an order different from the order on the waiting list for the purpose of selecting relatively higher income families for residence. Nothing in this paragraph or this subsection may be construed to prevent an owner of housing assisted under a contract for project-based assistance from establishing a preference for occupancy in such housing for families containing a member who is employed. “(5) Exception.— The limitations established in paragraphs (1), (2), and (3) shall not apply to dwelling units made available under project-based contracts under section 8 for the purpose of preventing displacement, or ameliorating the effects of displacement. “(6) Definition.— For purposes of this subsection, the term ‘project-based assistance’ means assistance under any of the following programs: “(A) The new construction or substantial rehabilitation program under section 8(b)(2) (as in effect before October 1, 1983). “(B) The property disposition program under section 8(b) (as in effect before the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998). “(C) The loan management set-aside program under subsections (b) and (v) of section 8. “(D) The project-based certificate program under section 8(d)(2). 112 STAT. 2547 “(E) The moderate rehabilitation program under section 8(e)(2) (as in effect before October 1, 1991). “(F) The low-income housing preservation program under Low-Income Housing Preservation and Resident Homeownership Act of 1990 or the provisions of the Emergency Low Income Housing Preservation Act of 1987 (as in effect before November 28, 1990). “(G) Section 8 (as in effect before the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998), following conversion from assistance under section 101 of the Housing and Urban Development Act of 1965 or section 236(f)(2) of the National Housing Act. “(d) Establishment of Different Standards.— Notwithstanding subsection (a)(2) or (b)(1), if approved by the Secretary, a public housing agency may for good cause establish and implement, in accordance with the public housing agency plan, an admission standard other than the standard under such subsection.”. (b) Effective Date.— This section shall take effect on, and the amendments under this section are made on, and shall apply beginning upon, the date of the enactment of this Act.