HOME RULE FLEXIBLE GRANT DEMONSTRATION PROGRAM.

SEC. 561. HOME RULE FLEXIBLE GRANT DEMONSTRATION PROGRAM. The United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended by adding at the end the following new title: “TITLE IV— HOME RULE FLEXIBLE GRANT DEMONSTRATION “SEC. 401. PURPOSE. The purpose of this title is to demonstrate the effectiveness of authorizing local governments and municipalities, in coordination with the public housing agencies for such jurisdictions— “(1) to receive and combine program allocations of covered housing assistance; and “(2) to design creative approaches for providing and administering Federal housing assistance based on the particular needs of the jurisdictions that— “(A) provide incentives to low-income families with children whose head of the household is employed, seeking 112 STAT. 2617employment, or preparing for employment by participating in a job training or educational program, or any program that otherwise assists individuals in obtaining employment and attaining economic self-sufficiency; “(B) reduce costs of Federal housing assistance and achieve greater cost-effectiveness in Federal housing assistance expenditures; “(C) increase the stock of affordable housing and housing choices for low-income families; “(D) increase homeownership among low-income families; “(E) reduce geographic concentration of assisted families; “(F) reduce homelessness through providing permanent housing solutions; “(G) improve program management; and “(H) achieve such other purposes with respect to low-income families, as determined by the participating local governments and municipalities in coordination with the public housing agencies; “SEC. 402. FLEXIBLE GRANT PROGRAM. “(a) Authority and Use.— The Secretary shall carry out a demonstration program in accordance with the purposes under section 401 and the provisions of this title. A jurisdiction approved by the Secretary for participation in the program may receive and combine and enter into performance-based contracts for the use of amounts of covered housing assistance, in the manner determined appropriate by the participating jurisdiction, during the period of the jurisdiction’s participation— “(1) to provide housing assistance and services for low-income families in a manner that facilitates the transition of such families to work; “(2) to reduce homelessness through providing permanent housing solutions; “(3) to increase homeownership among low-income families; or “(4) for other housing purposes for low-income families determined by the participating jurisdiction. “(b) Period of Participation.— A jurisdiction may participate in the demonstration program under this title for a period consisting of not less than 1 nor more than 5 fiscal years. “(c) Participating Jurisdictions.— “(1) In general.— Subject to paragraph (2), during the 4-year period consisting of fiscal years 1999 through 2002, the Secretary may approve for participation in the program under this title not more than an aggregate of 100 jurisdictions over the entire term of the demonstration program. A jurisdiction that was approved for participation in the demonstration program under this title in a fiscal year and that is continuing such participation in any subsequent fiscal year shall count as a single jurisdiction for purposes of the numerical limitation under this paragraph. “(2) Exclusion of high performing agencies.— Notwithstanding any other provision of this title other than paragraph 112 STAT. 2618(4) of this subsection, the Secretary may approve for participation in the demonstration program under this title only jurisdictions served by public housing agencies that.— “(A) are not designated as high-performing agencies, pursuant to their most recent scores under the public housing management assessment program under section 6(j)(2)(or any successor assessment program for public housing agencies), as of the time of approval; and “(B) have a most recent score under the public housing management assessment program under section 6(j)(2) (or any successor assessment program for public housing agencies), as of the time of approval, that is among the lowest 40 percent of the scores of all agencies. “(3) Limitation on troubled and non-troubled phas.— Of the jurisdictions approved by the Secretary for participation in the demonstration program under this title— “(A) not more than 55 may be jurisdictions served by a public housing agency that, at the time of approval, is designated as a troubled agency under the public housing management assessment program under section 6(j)(2) (or any successor assessment program for public housing agencies); and “(B) not more than 45 may be jurisdictions served by a public housing agency that, at the time of approval, is not designated as a troubled agency under the public housing management assessment program under section 6(j)(2) (or any successor assessment program for public housing agencies). “(4) Exception.— If the City of Indianapolis, Indiana submits an application for participation in the program under this title and, upon review of the application under section 406(b), the Secretary determines that such application is approvable under this title, the Secretary shall approve such application, notwithstanding the second sentence of section 406(b)(2). Such City shall count for purposes of the numerical limitations on jurisdictions under paragraphs (1) and (3) of section 402(c), but the provisions of section 402(c)(2) (relating to exclusion of high-performing agencies) shall not apply to such City. “SEC. 403. PROGRAM ALLOCATION AND COVERED HOUSING ASSISTANCE. “(a) Program Allocation.— In each fiscal year, the amount made available to each participating jurisdiction under the demonstration program under this title shall be equal to the sum of the amounts of covered housing assistance that would otherwise be made available under the provisions of this Act to the public housing agency for the jurisdiction. “(b) Covered Housing Assistance.— For purposes of this title, the term ‘covered housing assistance’ means— “(1) operating assistance under section 9 (as in effect before the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998); “(2) modernization assistance under section 14 (as in effect before the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998); 112 STAT. 2619 “(3) assistance for the certificate and voucher programs under section 8 (as in effect before the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998); “(4) assistance from the Operating Fund under section 9(e); “(5) assistance from the Capital Fund under section 9(d); and “(6) tenant-based assistance under section 8 (as amended by the Quality Housing and Work Responsibility Act of 1998). “SEC. 404. APPLICABILITY OF REQUIREMENTS UNDER PROGRAMS FOR COVERED HOUSING ASSISTANCE. “(a) In General.— In each fiscal year of the demonstration program under this title, amounts made available to a participating jurisdiction under the demonstration program shall be subject to the same terms and conditions as such amounts would be subject to if made available under the provisions of this Act pursuant to which covered housing assistance is otherwise made available under this Act to the public housing agency for the jurisdiction, except that— “(1) the Secretary may waive any such term or condition identified by the jurisdiction to the extent that the Secretary determines such action to be appropriate to carry out the purposes of the demonstration program under this title; and “(2) the participating jurisdiction may combine the amounts made available and use the amounts for any activity eligible under the programs under sections 8 and 9. “(b) Number of Families Assisted.— In carrying out the demonstration program under this title, each participating jurisdiction shall assist substantially the same total number of eligible low-income families as would have otherwise been served by the public housing agency for the jurisdiction had the jurisdiction not participated in the demonstration program under this title. “(c) Protection of Recipients.— This title may not be construed to authorize the termination of assistance to any recipient receiving assistance under this Act before the date of the enactment of this title as a result of the implementation of the demonstration program under this title. “(d) Effect on Ability To Compete for Other Programs.— This title may not be construed to affect the ability of any applying or participating jurisdiction (or a public housing agency for any such jurisdiction) to compete or otherwise apply for or receive assistance under any other housing assistance program administered by the Secretary. “SEC. 405. PROGRAM REQUIREMENTS. “(a) Applicability of Certain Provisions.— Notwithstanding section 404(a)(1), the Secretary may not waive, with respect to any participating jurisdiction, any of the following provisions: “(1) The first sentence of paragraph (1) of section 3(a)(relating to eligibility of low-income families). “(2) Section 16 (relating to income eligibility and targeting of assistance). “(3) Paragraph (2) of section 3(a) (relating to rental payments for public housing families). 112 STAT. 2620 “(4) Paragraphs (2) and (3) of section 8(o) (to the extent such paragraphs limit the amount of rent paid by families assisted with tenant-based assistance). “(5) Section 18 (relating to demolition or disposition of public housing). “(b) Compliance With Assistance Plan.— A participating jurisdiction shall provide assistance using amounts received pursuant to this title in the manner set forth in the plan of the jurisdiction approved by the Secretary under section 406(a)(2). “SEC. 406. APPLICATION. “(a) In General.— The Secretary shall provide for jurisdictions to submit applications for approval to participate in the demonstration program under this title. An application— “(1) shall be submitted only after the jurisdiction provides for citizen participation through a public hearing and, if appropriate, other means; “(2) shall include a plan for the provision of housing assistance with amounts received pursuant to this title that— “(A) is developed by the jurisdiction; “(B) takes into consideration comments from the public hearing, any other public comments on the proposed program, and comments from current and prospective residents who would be affected; and “(C) identifies each term or condition for which the jurisdiction is requesting waiver under section 404 (a)(1); “(3) shall describe how the plan for use of amounts will assist in meeting the purposes of, and be used in accordance with, sections 401 and 402(a), respectively; “(4) shall propose standards for measuring performance in using assistance provided pursuant to this title based on the performance standards under subsection (b)(4); “(5) shall propose the length of the period for participation of the jurisdiction is in the demonstration program under this title; “(6) shall— “(A) in the case of the application of any jurisdiction within whose boundaries are areas subject to any other unit of general local government, include the signed consent of the appropriate executive official of such unit to the application; and “(B) in the case of the application of a consortia of units of general local government (as provided under section 409(1)(B)), include the signed consent of the appropriate executive officials of each unit included in the consortia; “(7) shall include information sufficient, in the determination of the Secretary— “(A) to demonstrate that the jurisdiction has or will have management and administrative capacity sufficient to carry out the plan under paragraph (2), including a demonstration that the applicant has a history of effectively administering amounts provided under other programs of the Department of Housing and Urban Development, such as the community development block grant program, the 112 STAT. 2621HOME investment partnerships program, and the programs for assistance for the homeless under the Stewart B. McKinney Homeless Assistance Act; “(B) to demonstrate that carrying out the plan will not result in excessive duplication of administrative efforts and costs, particularly with respect to activities performed by public housing agencies operating within the boundaries of the jurisdiction; “(C) to describe the function and activities to be carried out by such public housing agencies affected by the plan; and “(D) to demonstrate that the amounts received by the jurisdiction will be maintained separate from other funds available to the jurisdiction and will be used only to carryout the plan; “(8) shall include information describing how the jurisdiction will make decisions regarding asset management of housing for low-income families under programs for covered housing assistance or assisted with grant amounts under this title; “(9) shall— “(A) clearly identify any State or local laws that will affect implementation of the plan under paragraph (2) and any contractual rights and property interests that may be affected by the plan; “(B) describe how the plan will be carried out with respect to such laws, rights, and interests; and “(C) contain a legal memorandum sufficient to describe how the plan will comply with such laws and how the plan will be carried out without violating or impairing such rights and interests; and “(10) shall identify procedures for how the jurisdiction shall return to providing covered assistance for the jurisdiction under the provisions of title I, in the case of determination under subsection (b)(4)(B). A plan required under paragraph (2) to be included in the application may be contained in a memorandum of agreement or other document executed by a jurisdiction and public housing agency, if such document is submitted together with the application. “(b) Review, Approval, and Performance Standards.— “(1) Review.— The Secretary shall review each application for participation in the demonstration program under this title and shall determine and notify the jurisdiction submitting the application, not later than 90 days after its submission, of whether the application is approvable under this title. If the Secretary determines that the application of a jurisdiction is approvable under this title, the Secretary shall provide affected public housing agencies an opportunity to review and to provide written comments on the application for a period of not less than 30 days after notification under the preceding sentence. If the Secretary determines that an application is not approvable under this title, the Secretary shall notify the jurisdiction submitting the application of the reasons for such determination. Upon making a determination of whether an application is approvable or nonapprovable under this title, the Secretary shall make such determination publicly available in writing together with a written statement of the reasons for such determination. 112 STAT. 2622 “(2) Approval.— The Secretary may approve jurisdictions for participation in the demonstration program under this title, but only from among applications that the Secretary has determined under paragraph are approvable under this title and only in accordance with section 402(c). The Secretary shall base the selection of jurisdictions to approve on the potential success, as evidenced by the application, in— “(A) achieving the goals set forth in the performance standards under paragraph (4)(A); and “(B) increasing housing choices for low-income families. “(3) Agreement.— The Secretary shall offer to enter into an agreement with each jurisdiction approved for participation in the program under this title providing for assistance pursuant to this title for a period in accordance with section 402(b) and incorporating a requirement that the jurisdiction achieve a particular level of performance in each of the areas for which performance standards are established under paragraph (4)(A) of this subsection. If the Secretary and the jurisdiction enter into an agreement, the Secretary shall provide any covered housing assistance for the jurisdiction in the manner authorized under this title. The Secretary may not provide covered housing assistance for a jurisdiction in the manner authorized under this title unless the Secretary and jurisdiction enter into an agreement under this paragraph. “(4) Performance standards.— “(A) Establishment.— The Secretary and each participating jurisdiction may collectively establish standards for evaluating the performance of the participating jurisdiction in meeting the purposes under section 401 of this title, which may include standards for— “(i) moving dependent low-income families to economic self-sufficiency; “(ii) reducing the per-family cost of providing housing assistance; “(iii) expanding the stock of affordable housing and housing choices for low-income families; “(iv) improving program management; “(v) increasing the number of homeownership opportunities for low-income families; “(vi) reducing homelessness through providing permanent housing resources; “(vii) reducing geographic concentration of assisted families; and “(viii) any other performance goals that the Secretary and the participating jurisdiction may establish. “(B) Failure to comply.— If, at any time during the participation of a jurisdiction in the program under this title, the Secretary determines that the jurisdiction is not sufficiently meeting, or making progress toward meeting, the levels of performance incorporated into the agreement of the jurisdiction pursuant to subparagraph (A), the Secretary shall terminate the participation of the jurisdiction in the program under this title and require the implementation of the procedures included in the application of the jurisdiction pursuant to subsection (a)(10). “(5) Troubled agencies.— The Secretary may establish requirements for the approval of applications under this section 112 STAT. 2623submitted by public housing agencies designated under section 6(j)(2) as troubled, which may include additional or different criteria determined by the Secretary to be more appropriate for such agencies. “(c) Status of PHAs.— This title may not be construed to require any change in the legal status of any public housing agency or in any legal relationship between a jurisdiction and a public housing agency as a condition of participation in the program under this title. “(d) PHA Plans.— In carrying out this title, the Secretary may provide for a streamlined public housing agency plan and planning process under section 5A for participating jurisdictions. “SEC. 407. TRAINING. “The Secretary, in consultation with representatives of public and assisted housing interests, may provide training and technical assistance relating to providing assistance under this title and may conduct detailed evaluations of up to 30 jurisdictions for the purpose of identifying replicable program models that are successful at carrying out the purposes of this title. “SEC. 408. ACCOUNTABILITY. “(a) Maintenance of Records.— Each participating jurisdiction shall maintain such records as the Secretary may require to— “(1) document the amounts received by the jurisdiction under this Act and the disposition of such amounts under the demonstration program under this title; “(2) ensure compliance by the jurisdiction with this title; and “(3) evaluate the performance of the jurisdiction under the demonstration program under this title. “(b) Reports.— Each participating jurisdiction shall annually submit to the Secretary a report in a form and at a time specified by the Secretary, which shall include— “(1) documentation of the use of amounts made available to the jurisdiction under this title; “(2) any information as the Secretary may request to assist the Secretary in evaluating the demonstration program under this title; and “(3) a description and analysis of the effect of assisted activities in addressing the objectives of the demonstration program under this title. “(c) Access To Documents By Secretary and Comptroller General.— The Secretary and the Comptroller General of the United States, or any duly authorized representative of the Secretary or the Comptroller General, shall have access for the purpose of audit and examination to any books, documents, papers, and records maintained by a participating jurisdiction that relate to the demonstration program under this title. “(d) Performance Review and Evaluation.— “(1) performance review.— Based on the performance standards established under section 406(b)(4), the Secretary shall monitor the performance of participating jurisdictions in providing assistance under this title. “(2) Status report.— Not later than 60 days after the conclusion of the second year of the demonstration program under this title, the Secretary shall submit to Congress an 112 STAT. 2624interim report on the status of the demonstration program and the progress each participating jurisdiction in achieving the purposes of the demonstration program under section 401. “SEC. 409. DEFINITIONS. “For purposes of this title, the following definitions shall apply: “(1) Jurisdiction.— The term ‘jurisdiction’ means— “(A) a unit of general local government (as such term is defined in section 104 of the Cranston-Gonzalez National Affordable Housing Act) that has boundaries, for purposes of carrying out this title, that— “(i) wholly contain the area within which a public housing agency is authorized to operate; and “(ii) do not contain any areas contained within the boundaries of any other participating jurisdiction; and “(B) a consortia of such units of general local government, organized for purposes of this title. “(2) Participating jurisdiction.— The term ‘participating jurisdiction’ means, with respect to a period for which such an agreement is made, a jurisdiction that has entered into an agreement under section 406(b)(3) to receive assistance pursuant to this title for such fiscal year. “SEC. 410. TERMINATION AND EVALUATION. “(a) Termination.— The demonstration program under this title shall terminate not less than 2 and not more than 5 years after the date on which the demonstration program is commenced. “(b) Evaluation.— Not later than 6 months after the termination of the demonstration program under this title, the Secretary shall submit to the Congress a final report, which shall include— “(1) an evaluation the effectiveness of the activities carried out under the demonstration program; and “(2) any findings and recommendations of the Secretary for any appropriate legislative action. “SEC. 411. APPLICABILITY. “This title shall take effect on the date of the enactment of the Quality Housing and Work Responsibility Act of 1998.”.