
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-377 Section 1(a)(1)[214(a)]]
[Document affected by Public Law 107-73]
[CITE: 42USC1437g]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                      CHAPTER 8--LOW-INCOME HOUSING
 
            SUBCHAPTER I--GENERAL PROGRAM OF ASSISTED HOUSING
 
Sec. 1437g. Public housing Capital and Operating Funds


(a) Merger into Capital Fund

    Except as otherwise provided in the Quality Housing and Work 
Responsibility Act of 1998, any assistance made available for public 
housing under section 1437l of this title before October 1, 1999, shall 
be merged into the Capital Fund established under subsection (d) of this 
section.

(b) Merger into Operating Fund

    Except as otherwise provided in the Quality Housing and Work 
Responsibility Act of 1998, any assistance made available for public 
housing under this section before October 1, 1999, shall be merged into 
the Operating Fund established under subsection (e) of this section.

(c) Allocation amount

                           (1) In general

        For fiscal year 2000 and each fiscal year thereafter, the 
    Secretary shall allocate amounts in the Capital Fund and Operating 
    Funds \1\ for assistance for public housing agencies eligible for 
    such assistance. The Secretary shall determine the amount of the 
    allocation for each eligible agency, which shall be, for any fiscal 
    year beginning after the effective date of the formulas described in 
    subsections (d)(2) and (e)(2) of this section--
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    \1\ So in original. Probably should be ``Fund''.
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            (A) for assistance from the Capital Fund, the amount 
        determined for the agency under the formula under subsection 
        (d)(2) of this section; and
            (B) for assistance from the Operating Fund, the amount 
        determined for the agency under the formula under subsection 
        (e)(2) of this section.

                             (2) Funding

        There are authorized to be appropriated for assistance for 
    public housing agencies under this section the following amounts:

        (A) Capital Fund

            For allocations of assistance from the Capital Fund, 
        $3,000,000,000 for fiscal year 1999, and such sums as may be 
        necessary for fiscal years 2000, 2001, 2002, and 2003.

        (B) Operating Fund

            For allocations of assistance from the Operating Fund, 
        $2,900,000,000 for fiscal year 1999, and such sums as may be 
        necessary for each of fiscal years 2000, 2001, 2002, and 2003.

(d) Capital Fund

                           (1) In general

        The Secretary shall establish a Capital Fund for the purpose of 
    making assistance available to public housing agencies to carry out 
    capital and management activities, including--
            (A) the development, financing, and modernization of public 
        housing projects, including the redesign, reconstruction, and 
        reconfiguration of public housing sites and buildings (including 
        accessibility improvements) and the development of mixed-finance 
        projects;
            (B) vacancy reduction;
            (C) addressing deferred maintenance needs and the 
        replacement of obsolete utility systems and dwelling equipment;
            (D) planned code compliance;
            (E) management improvements;
            (F) demolition and replacement;
            (G) resident relocation;
            (H) capital expenditures to facilitate programs to improve 
        the empowerment and economic self-sufficiency of public housing 
        residents and to improve resident participation;
            (I) capital expenditures to improve the security and safety 
        of residents; and
            (J) homeownership activities, including programs under 
        section 1437z-4 of this title.

                             (2) Formula

        The Secretary shall develop a formula for determining the amount 
    of assistance provided to public housing agencies from the Capital 
    Fund for a fiscal year, which shall include a mechanism to reward 
    performance. The formula may take into account such factors as--
            (A) the number of public housing dwelling units owned, 
        assisted, or operated by the public housing agency, the 
        characteristics and locations of the projects, and the 
        characteristics of the families served and to be served 
        (including the incomes of the families);
            (B) the need of the public housing agency to carry out 
        rehabilitation and modernization activities, replacement 
        housing, and reconstruction, construction, and demolition 
        activities related to public housing dwelling units owned, 
        assisted, or operated by the public housing agency, including 
        backlog and projected future needs of the agency;
            (C) the cost of constructing and rehabilitating property in 
        the area;
            (D) the need of the public housing agency to carry out 
        activities that provide a safe and secure environment in public 
        housing units owned, assisted, or operated by the public housing 
        agency;
            (E) any record by the public housing agency of exemplary 
        performance in the operation of public housing, as indicated by 
        the system of performance indicators established pursuant to 
        section 1437d(j) of this title; and
            (F) any other factors that the Secretary determines to be 
        appropriate.

       (3) Conditions on use for development and modernization

        (A) Development

            Except as otherwise provided in this chapter, any public 
        housing developed using amounts provided under this subsection, 
        or under section 1437l of this title as in effect before the 
        effective date under section 503(a) of the Quality Housing and 
        Work Responsibility Act of 1998, shall be operated under the 
        terms and conditions applicable to public housing during the 40-
        year period that begins on the date on which the project (or 
        stage of the project) becomes available for occupancy.

        (B) Modernization

            Except as otherwise provided in this chapter, any public 
        housing or portion thereof that is modernized using amounts 
        provided under this subsection or under section 1437l of this 
        title (as in effect before the effective date under section 
        503(a) of the Quality Housing and Work Responsibility Act of 
        1998) shall be maintained and operated under the terms and 
        conditions applicable to public housing during the 20-year 
        period that begins on the latest date on which modernization is 
        completed.

        (C) Applicability of latest expiration date

            Public housing subject to this paragraph or to any other 
        provision of law mandating the operation of the housing as 
        public housing or under the terms and conditions applicable to 
        public housing for a specified length of time, shall be 
        maintained and operated as required until the latest such 
        expiration date.

(e) Operating Fund

                           (1) In general

        The Secretary shall establish an Operating Fund for the purpose 
    of making assistance available to public housing agencies for the 
    operation and management of public housing, including--
            (A) procedures and systems to maintain and ensure the 
        efficient management and operation of public housing units 
        (including amounts sufficient to pay for the reasonable costs of 
        review by an independent auditor of the documentation or other 
        information maintained pursuant to section 1437d(j)(6) of this 
        title by a public housing agency or resident management 
        corporation to substantiate the performance of that agency or 
        corporation);
            (B) activities to ensure a program of routine preventative 
        maintenance;
            (C) anticrime and antidrug activities, including the costs 
        of providing adequate security for public housing residents, 
        including above-baseline police service agreements;
            (D) activities related to the provision of services, 
        including service coordinators for elderly persons or persons 
        with disabilities;
            (E) activities to provide for management and participation 
        in the management and policymaking of public housing by public 
        housing residents;
            (F) the costs of insurance;
            (G) the energy costs associated with public housing units, 
        with an emphasis on energy conservation;
            (H) the costs of administering a public housing work program 
        under section 1437j of this title, including the costs of any 
        related insurance needs;
            (I) the costs of repaying, together with rent contributions, 
        debt incurred to finance the rehabilitation and development of 
        public housing units, which shall be subject to such reasonable 
        requirements as the Secretary may establish; and
            (J) the costs associated with the operation and management 
        of mixed finance projects, to the extent appropriate.

                             (2) Formula

        (A) In general

            The Secretary shall establish a formula for determining the 
        amount of assistance provided to public housing agencies from 
        the Operating Fund for a fiscal year. The formula may take into 
        account--
                (i) standards for the costs of operating and reasonable 
            projections of income, taking into account the 
            characteristics and locations of the public housing projects 
            and characteristics of the families served and to be served 
            (including the incomes of the families), or the costs of 
            providing comparable services as determined in accordance 
            with criteria or a formula representing the operations of a 
            prototype well-managed public housing project;
                (ii) the number of public housing dwelling units owned, 
            assisted, or operated by the public housing agency;
                (iii) the number of public housing dwelling units owned, 
            assisted, or operated by the public housing agency that are 
            chronically vacant and the amount of assistance appropriate 
            for those units;
                (iv) to the extent quantifiable, the extent to which the 
            public housing agency provides programs and activities 
            designed to promote the economic self-sufficiency and 
            management skills of public housing residents;
                (v) the need of the public housing agency to carry out 
            anti-crime and anti-drug activities, including providing 
            adequate security for public housing residents;
                (vi) the amount of public housing rental income foregone 
            by the public housing agency as a result of escrow savings 
            accounts under section 1437u(d)(2) of this title for 
            families participating in a family self-sufficiency program 
            of the agency under such section 1437u of this title; and
                (vii) any other factors that the Secretary determines to 
            be appropriate.

        (B) Incentive to increase certain rental income

            The formula shall provide an incentive to encourage public 
        housing agencies to facilitate increases in earned income by 
        families in occupancy. Any such incentive shall provide that the 
        agency shall benefit from increases in such rental income and 
        that such amounts accruing to the agency pursuant to such 
        benefit may be used only for low-income housing or to benefit 
        the residents of the public housing agency.

        (C) Treatment of savings

            The treatment of utility and waste management costs under 
        the formula shall provide that a public housing agency shall 
        receive the full financial benefit from any reduction in the 
        cost of utilities or waste management resulting from any 
        contract with a third party to undertake energy conservation 
        improvements in one or more of its public housing projects.

                        (3) Condition on use

        No portion of any public housing project operated using amounts 
    provided under this subsection, or under this section as in effect 
    before the effective date under section 503(a) of the Quality 
    Housing and Work Responsibility Act of 1998, may be disposed of 
    before the expiration of the 10-year period beginning upon the 
    conclusion of the fiscal year for which such amounts were provided, 
    except as otherwise provided in this chapter.

(f) Negotiated rulemaking procedure

    The formulas under subsections (d)(2) and (e)(2) of this section 
shall be developed according to procedures for issuance of regulations 
under the negotiated rulemaking procedure under subchapter III of 
chapter 5 of title 5.

(g) Limitations on use of funds

              (1) Flexibility for Capital Fund amounts

        Of any amounts appropriated for fiscal year 2000 or any fiscal 
    year thereafter that are allocated for fiscal year 2000 or any 
    fiscal year thereafter from the Capital Fund for any public housing 
    agency, the agency may use not more than 20 percent for activities 
    that are eligible under subsection (e) of this section for 
    assistance with amounts from the Operating Fund, but only if the 
    public housing agency plan for the agency provides for such use.

                 (2) Full flexibility for small PHAs

        Of any amounts allocated for any fiscal year for any public 
    housing agency that owns or operates less than 250 public housing 
    dwelling units, is not designated pursuant to section 1437d(j)(2) of 
    this title as a troubled public housing agency, and (in the 
    determination of the Secretary) is operating and maintaining its 
    public housing in a safe, clean, and healthy condition, the agency 
    may use any such amounts for any eligible activities under 
    subsections (d)(1) and (e)(1) of this section, regardless of the 
    fund from which the amounts were allocated and provided. This 
    subsection shall take effect on October 21, 1998.

                 (3) Limitation on new construction

        (A) In general

            Except as provided in subparagraphs (B) and (C), a public 
        housing agency may not use any of the amounts allocated for the 
        agency from the Capital Fund or Operating Fund for the purpose 
        of constructing any public housing unit, if such construction 
        would result in a net increase from the number of public housing 
        units owned, assisted, or operated by the public housing agency 
        on October 1, 1999, including any public housing units 
        demolished as part of any revitalization effort.

        (B) Exception regarding use of assistance

            A public housing agency may use amounts allocated for the 
        agency from the Capital Fund or Operating Fund for the 
        construction and operation of housing units that are available 
        and affordable to low-income families in excess of the 
        limitations on new construction set forth in subparagraph (A), 
        but the formulas established under subsections (d)(2) and (e)(2) 
        of this section shall not provide additional funding for the 
        specific purpose of allowing construction and operation of 
        housing in excess of those limitations (except to the extent 
        provided in subparagraph (C)).

        (C) Exception regarding formulas

            Subject to reasonable limitations set by the Secretary, the 
        formulas established under subsections (d)(2) and (e)(2) of this 
        section may provide additional funding for the operation and 
        modernization costs (but not the initial development costs) of 
        housing in excess of amounts otherwise permitted under this 
        paragraph, and such amounts may be so used, if--
                (i) such units are part of a mixed-finance project or 
            otherwise leverage significant additional private or public 
            investment; and
                (ii) the estimated cost of the useful life of the 
            project is less than the estimated cost of providing tenant-
            based assistance under section 1437f(o) of this title for 
            the same period of time.

(h) Technical assistance

    To the extent amounts are provided in advance in appropriations 
Acts, the Secretary may make grants or enter into contracts or 
cooperative agreements in accordance with this subsection for purposes 
of providing, either directly or indirectly--
        (1) technical assistance to public housing agencies, resident 
    councils, resident organizations, and resident management 
    corporations, including assistance relating to monitoring and 
    inspections;
        (2) training for public housing agency employees and residents;
        (3) data collection and analysis;
        (4) training, technical assistance, and education to public 
    housing agencies that are--
            (A) at risk of being designated as troubled under section 
        1437d(j) of this title, to assist such agencies from being so 
        designated; and
            (B) designated as troubled under section 1437d(j) of this 
        title, to assist such agencies in achieving the removal of that 
        designation;

        (5) contract expertise;
        (6) training and technical assistance to assist in the oversight 
    and management of public housing or tenant-based assistance; and
        (7) clearinghouse services in furtherance of the goals and 
    activities of this subsection.

As used in this subsection, the terms ``training'' and ``technical 
assistance'' shall include training or technical assistance and the cost 
of necessary travel for participants in such training or technical 
assistance, by or to officials and employees of the Department and of 
public housing agencies, and to residents and to other eligible 
grantees.

(i) Eligibility of units acquired from proceeds of sales under 
        demolition or disposition plan

    If a public housing agency uses proceeds from the sale of units 
under a homeownership program in accordance with section 1437z-4 of this 
title to acquire additional units to be sold to low-income families, the 
additional units shall be counted as public housing for purposes of 
determining the amount of the allocation to the agency under this 
section until sale by the agency, but in no case longer than 5 years.

(j) Penalty for slow expenditure of capital funds

                      (1) Obligation of amounts

        Except as provided in paragraph (4) and subject to paragraph 
    (2), a public housing agency shall obligate any assistance received 
    under this section not later than 24 months after, as applicable--
            (A) the date on which the funds become available to the 
        agency for obligation in the case of modernization; or
            (B) the date on which the agency accumulates adequate funds 
        to undertake modernization, substantial rehabilitation, or new 
        construction of units.

             (2) Extension of time period for obligation

        The Secretary--
            (A) may, extend the time period under paragraph (1) for a 
        public housing agency, for such period as the Secretary 
        determines to be necessary, if the Secretary determines that the 
        failure of the agency to obligate assistance in a timely manner 
        is attributable to--
                (i) litigation;
                (ii) obtaining approvals of the Federal Government or a 
            State or local government;
                (iii) complying with environmental assessment and 
            abatement requirements;
                (iv) relocating residents;
                (v) an event beyond the control of the public housing 
            agency; or
                (vi) any other reason established by the Secretary by 
            notice published in the Federal Register;

            (B) shall disregard the requirements of paragraph (1) with 
        respect to any unobligated amounts made available to a public 
        housing agency, to the extent that the total of such amounts 
        does not exceed 10 percent of the original amount made available 
        to the public housing agency; and
            (C) may, with the prior approval of the Secretary, extend 
        the time period under paragraph (1), for an additional period 
        not to exceed 12 months, based on--
                (i) the size of the public housing agency;
                (ii) the complexity of capital program of the public 
            housing agency;
                (iii) any limitation on the ability of the public 
            housing agency to obligate the amounts allocated for the 
            agency from the Capital Fund in a timely manner as a result 
            of State or local law; or
                (iv) such other factors as the Secretary determines to 
            be relevant.

                   (3) Effect of failure to comply

        (A) Prohibition of new assistance

            A public housing agency shall not be awarded assistance 
        under this section for any month during any fiscal year in which 
        the public housing agency has funds unobligated in violation of 
        paragraph (1) or (2).

        (B) Withholding of assistance

            During any fiscal year described in subparagraph (A), the 
        Secretary shall withhold all assistance that would otherwise be 
        provided to the public housing agency. If the public housing 
        agency cures its failure to comply during the year, it shall be 
        provided with the share attributable to the months remaining in 
        the year.

        (C) Redistribution

            The total amount of any funds not provided public housing 
        agencies by operation of this paragraph shall be allocated for 
        agencies determined under section 1437d(j) of this title to be 
        high-performing.

              (4) Exception to obligation requirements

        (A) In general

            Subject to subparagraph (B), if the Secretary has consented, 
        before the effective date under section 503(a) of the Quality 
        Housing and Work Responsibility Act of 1998, to an obligation 
        period for any agency longer than provided under paragraph (1), 
        a public housing agency that obligates its funds before the 
        expiration of that period shall not be considered to be in 
        violation of paragraph (1).

        (B) Prior fiscal years

            Notwithstanding subparagraph (A), any funds appropriated to 
        a public housing agency for fiscal year 1997 or prior fiscal 
        years shall be fully obligated by the public housing agency not 
        later than September 30, 1999.

                     (5) Expenditure of amounts

        (A) In general

            A public housing agency shall spend any assistance received 
        under this section not later than 4 years (plus the period of 
        any extension approved by the Secretary under paragraph (2)) 
        after the date on which funds become available to the agency for 
        obligation.

        (B) Enforcement

            The Secretary shall enforce the requirement of subparagraph 
        (A) through default remedies up to and including withdrawal of 
        the funding.

                       (6) Right of recapture

        Any obligation entered into by a public housing agency shall be 
    subject to the right of the Secretary to recapture the obligated 
    amounts for violation by the public housing agency of the 
    requirements of this subsection.

(k) Emergency reserve and use of amounts

                           (1) Set-asides

        In each fiscal year after fiscal year 1999, the Secretary shall 
    set aside, for use in accordance with this subsection, not more than 
    2 percent of the total amount made available to carry out this 
    section for such fiscal year. In addition to amounts set aside under 
    the preceding sentence, in each fiscal year the Secretary may set 
    from the total amount made available to carry out this section for 
    such fiscal year not more than $20,000,000 for the Operation Safe 
    Home program administered by the Office of the Inspector General of 
    the Department of Housing and Urban Development, for law enforcement 
    efforts to combat violent crime on or near the premises of public 
    and federally assisted housing.

                          (2) Use of funds

        Amounts set aside under paragraph (1) shall be available to the 
    Secretary for use for assistance, as provided in paragraph (3), in 
    connection with--
            (A) emergencies and other disasters; and
            (C) \2\ housing needs resulting from any settlement of 
        litigation; and
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    \2\ So in original. No subpar. (B) has been enacted.
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                          (3) Eligible uses

        In carrying out this subsection, the Secretary may use amounts 
    set aside under this subsection to provide--
            (A) assistance for any eligible use under the Operating Fund 
        or the Capital Fund established by this section; or
            (B) tenant-based assistance in accordance with section 1437f 
        of this title.

                           (4) Limitation

        With respect to any fiscal year, the Secretary may carry over 
    not more than a total of $25,000,000 in unobligated amounts set 
    aside under this subsection for use in connection with the 
    activities described in paragraph (2) during the succeeding fiscal 
    year.

                           (5) Publication

        The Secretary shall publish the use of any amounts allocated 
    under this subsection relating to emergencies (other than disasters 
    and housing needs resulting from any settlement of litigation) in 
    the Federal Register.

(l) Treatment of nonrental income

    A public housing agency that receives income from nonrental sources 
(as determined by the Secretary) may retain and use such amounts without 
any decrease in the amounts received under this section from the Capital 
or Operating Fund. Any such nonrental amounts retained shall be used 
only for low-income housing or to benefit the residents assisted by the 
public housing agency.

(m) Provision of only capital or operating assistance

                            (1) Authority

        In appropriate circumstances, as determined by the Secretary, a 
    public housing agency may commit capital assistance only, or 
    operating assistance only, for public housing units, which 
    assistance shall be subject to all of the requirements applicable to 
    public housing except as otherwise provided in this subsection.

                           (2) Exemptions

        In the case of any public housing unit assisted pursuant to the 
    authority under paragraph (1), the Secretary may, by regulation, 
    reduce the period under subsection (d)(3) or (e)(3) of this section, 
    as applicable, during which such units must be operated under 
    requirements applicable to public housing. In cases in which there 
    is commitment of operating assistance but no commitment of capital 
    assistance, the Secretary may make section 8 [42 U.S.C. 1437f] 
    requirements applicable, as appropriate, by regulation.

(n) Treatment of public housing

              (1) Certain State and city funded housing

        (A) In general

            Notwithstanding any other provision of this section--
                (i) for purposes of determining the allocations from the 
            Operating and Capital Funds pursuant to the formulas under 
            subsections (d)(2) and (e)(2) of this section and 
            determining assistance pursuant to section 519(e) of the 
            Quality Housing and Work Responsibility Act of 1998 and 
            under section 1437g or 1437l of this title (as in effect 
            before October 21, 1998), for any period before the 
            implementation of such formulas, the Secretary shall deem 
            any covered locally developed public housing units as public 
            housing units developed under this subchapter and such units 
            shall be eligible for such assistance; and
                (ii) assistance provided under this section, under such 
            section 518(d)(3),\3\ or under such section 1437g or 1437l 
            of this title to any public housing agency may be used with 
            respect to any covered locally developed public housing 
            units.
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    \3\ So in original. Probably should be section ``519(d)(3),''.
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        (B) Covered units

            For purposes of this paragraph, the term ``covered locally 
        developed public housing units'' means--
                (i) not more than 7,000 public housing units developed 
            pursuant to laws of the State of New York and that received 
            debt service and operating subsidies pursuant to such laws; 
            and
                (ii) not more than 5,000 dwelling units developed 
            pursuant to section 34 of chapter 121B of the General Laws 
            of the State of Massachusetts.

                  (2) Reduction of asthma incidence

        Notwithstanding any other provision of this section, the New 
    York City Housing Authority may, in its sole discretion, from 
    amounts provided from the Operating and Capital Funds, or from 
    amounts provided for public housing before amounts are made 
    available from such Funds, use not more than exceeding \4\ $500,000 
    per year for the purpose of initiating, expanding or continuing a 
    program for the reduction of the incidence of asthma among 
    residents. The Secretary shall consult with the Administrator of the 
    Environmental Protection Agency and the Secretary of Health and 
    Human Services to identify and consider sources of funding for the 
    reduction of the incidence of asthma among recipients of assistance 
    under this subchapter.
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    \4\ So in original.
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                 (3) Services for elderly residents

        Notwithstanding any other provision of this section, the New 
    York City Housing Authority may, in its sole discretion, from 
    amounts provided from the Operating and Capital Funds, or from 
    amounts provided for public housing before the amounts are made 
    available from such Funds, use not more than $600,000 per year for 
    the purpose of developing a comprehensive plan to address the need 
    for services for elderly residents. Such plan may be developed by a 
    partnership created by such Housing Authority and may include the 
    creation of a model project for assisted living at one or more 
    developments. The model project may provide for contracting with 
    private parties for the delivery of services.

                         (4) Effective date

        This subsection shall apply to fiscal year 1999 and each fiscal 
    year thereafter.

(Sept. 1, 1937, ch. 896, title I, Sec. 9, as added Pub. L. 93-383, title 
II, Sec. 201(a), Aug. 22, 1974, 88 Stat. 666; amended Pub. L. 94-375, 
Sec. 2(c), Aug. 3, 1976, 90 Stat. 1068; Pub. L. 95-24, title I, 
Sec. 101(b), Apr. 30, 1977, 91 Stat. 55; Pub. L. 95-128, title II, 
Sec. 201(f), Oct. 12, 1977, 91 Stat. 1129; Pub. L. 95-557, title II, 
Sec. 206(g), Oct. 31, 1978, 92 Stat. 2093; Pub. L. 96-153, title II, 
Secs. 201(c), 207, 211(a), Dec. 21, 1979, 93 Stat. 1106, 1109, 1110; 
Pub. L. 96-399, title II, Sec. 201(b), (d), Oct. 8, 1980, 94 Stat. 1625; 
Pub. L. 97-35, title III, Secs. 321(d), 322(c), Aug. 13, 1981, 95 Stat. 
399, 402; Pub. L. 98-181, title II, Sec. 212, Nov. 30, 1983, 97 Stat. 
1184; Pub. L. 99-272, title III, Sec. 3003, Apr. 7, 1986, 100 Stat. 102; 
Pub. L. 100-242, title I, Secs. 112(b)(4), 118, Feb. 5, 1988, 101 Stat. 
1824, 1828; renumbered title I, Pub. L. 100-358, Sec. 5, June 29, 1988, 
102 Stat. 681; Pub. L. 101-625, title V, Secs. 507, 572(2), title VIII, 
Sec. 802(p), Nov. 28, 1990, 104 Stat. 4186, 4236, 4317; Pub. L. 102-550, 
title I, Sec. 114, title VI, Sec. 673, Oct. 28, 1992, 106 Stat. 3691, 
3827; Pub. L. 103-233, title III, Sec. 304, Apr. 11, 1994, 108 Stat. 
370; Pub. L. 104-134, title I, Sec. 101(e) [title II, Sec. 218], Apr. 
26, 1996, 110 Stat. 1321-257, 1321-290; renumbered title I, Pub. L. 104-
140, Sec. 1(a), May 2, 1996, 110 Stat. 1327; Pub. L. 104-330, title V, 
Sec. 501(b)(5), Oct. 26, 1996, 110 Stat. 4042; Pub. L. 105-276, title 
II, Sec. 210, title V, Sec. 519(a), Oct. 21, 1998, 112 Stat. 2485, 
2551.)

                       References in Text

    The Quality Housing and Work Responsibility Act of 1998, referred to 
in subsecs. (a) and (b), is title V of Pub. L. 105-276, Oct. 21, 1998, 
112 Stat. 2518. Section 503(a) of the Act is set out as an Effective 
Date of 1998 Amendment note under section 1437 of this title. Section 
519(e) of the Act is set out as a note below. For complete 
classification of this Act to the Code, see Short Title of 1998 
Amendment note set out under section 1437 of this title and Tables.
    Section 1437l of this title, referred to in subsecs. (a), (d)(3)(A), 
(B), and (n)(1)(A)(i), was repealed by Pub. L. 105-276, title V, 
Sec. 522(a), Oct. 21, 1998, 112 Stat. 2564.

                          Codification

    October 21, 1998, referred to in subsec. (n)(1)(A)(i), was in the 
original ``the date of the enactment of this Act'', which has been 
translated as referring to the date of enactment of the Quality Housing 
and Work Responsibility Act of 1998, title V of Pub. L. 105-276, which 
amended this section generally, to reflect the probable intent of 
Congress.


                            Prior Provisions

    A prior section 9 of act Sept. 1, 1937, ch. 896, 50 Stat. 891, as 
amended, authorized loans for low-rent housing and slum clearance 
projects and was classified to section 1409 of this title, prior to the 
general revision of this chapter by Pub. L. 93-383. Similar provisions 
are contained in section 1437b of this title.


                               Amendments

    1998--Pub. L. 105-276, Sec. 519(a), amended section generally, 
substituting present provisions for provisions which had: in subsec. 
(a), authorized annual contributions for operation of low-income 
housing, and provided for determination of the amounts and use of those 
contributions, contract authorization, standards for payments, necessity 
of contribution contracts, performance funding system, and audits; in 
subsec. (b), set forth limitation on amount of aggregate rentals paid by 
families residing in dwelling units receiving annual contributions; in 
subsec. (c), authorized appropriations for fiscal years 1993 and 1994; 
in subsec. (d), required distribution of remaining appropriated funds to 
projects incurring excessive costs; and in subsec. (e), set forth time 
of payment of assistance to public housing agency.
    Subsec. (a)(3)(A). Pub. L. 105-276, Sec. 210, inserted after third 
sentence ``Notwithstanding the preceding sentences, the Secretary may 
revise the performance funding system in a manner that takes into 
account equity among public housing agencies and that includes 
appropriate incentives for sound management.'' and, in last sentence, 
inserted ``, or any substantial change under the preceding sentence,'' 
after ``vacant public housing units''.
    1996--Subsec. (a)(1)(A). Pub. L. 104-330, in second sentence, 
inserted ``and'' after comma at end of cl. (i), struck out ``, and'' 
after ``reserve funds'' in cl. (ii), and struck out cl. (iii) which read 
as follows: ``with respect to housing projects developed under the 
Indian and Alaskan Native housing program assisted under this chapter, 
to provide funds (in addition to any other operating costs contributions 
approved by the Secretary under this section) as determined by the 
Secretary to be required to cover the administrative costs to an Indian 
housing authority during the development period of a project approved 
pursuant to section 1437c of this title and until such time as the 
project is occupied''.
    Subsec. (a)(3)(B)(i). Pub. L. 104-134 struck out ``for a period not 
to exceed 6 years'' after ``with the public housing agency''.
    1994--Subsec. (a)(4). Pub. L. 103-233 added par. (4).
    1992--Subsec. (a)(1)(B). Pub. L. 102-550, Sec. 673, designated 
existing provisions as cl. (i), redesignated former cls. (i) and (ii) as 
subcls. (I) and (II), respectively, substituted ``this clause'' for 
``this subparagraph'', inserted reference to section 8011 of this title 
and a period after ``section 8013 of this title'', and added cl. (ii).
    Subsec. (a)(3)(A). Pub. L. 102-550, Sec. 114(b), inserted at end 
``Notwithstanding sections 583(a) and 585(a) of title 5 (as added by 
section 3(a) of the Negotiated Rulemaking Act of 1990), any proposed 
regulation providing for amendment, alteration, adjustment, or other 
change to the performance funding system relating to vacant public 
housing units shall be issued pursuant to a negotiated rulemaking 
procedure under subchapter IV of chapter 5 of such title (as added by 
section 3(a) of the Negotiated Rulemaking Act of 1990), and the 
Secretary shall establish a negotiated rulemaking committee for 
development of any such proposed regulations.''
    Subsec. (a)(3)(B)(i). Pub. L. 102-550, Sec. 114(c), inserted before 
semicolon at end ``, and in subsequent years, if the energy savings are 
cost-effective, the Secretary may continue the sharing arrangement with 
the public housing agency for a period not to exceed 6 years''.
    Subsec. (c). Pub. L. 102-550, Sec. 114(a), amended subsec. (c) 
generally. Prior to amendment, subsec. (c) read as follows: ``There are 
authorized to be appropriated for purposes of providing annual 
contributions under this section $2,000,000,000 for fiscal year 1991 and 
$2,086,000,000 in fiscal year 1992.''
    1990--Subsec. (a)(1). Pub. L. 101-625, Sec. 572(2), substituted 
``low-income housing'' for ``lower income housing'' wherever appearing.
    Pub. L. 101-625, Sec. 507(b)(1), designated existing provisions as 
subpar. (A), redesignated former cls. (A) to (C) as cls. (i) to (iii), 
respectively, and added subpar. (B).
    Subsec. (a)(2). Pub. L. 101-625, Sec. 572(2), substituted ``low-
income housing'' for ``lower income housing'' wherever appearing.
    Subsec. (a)(3)(A). Pub. L. 101-625, Sec. 507(b)(2), inserted after 
first comma ``(except for payments under paragraph (1)(B))''.
    Subsec. (a)(3)(B)(v). Pub. L. 101-625, Sec. 802(p), added cl. (v).
    Subsec. (c). Pub. L. 101-625, Sec. 507(a), amended subsec. (c) 
generally. Prior to amendment, subsec. (c) read as follows: ``There are 
authorized to be appropriated for purposes of providing annual 
contributions under this section $1,500,000,000 for fiscal year 1988 and 
$1,530,000,000 for fiscal year 1989.''
    Subsec. (d). Pub. L. 101-625, Sec. 572(2), substituted ``low-income 
housing'' for ``lower income housing''.
    1988--Subsec. (a)(1). Pub. L. 100-242, Sec. 118(a)(1), struck out 
last sentence directing Secretary to establish standards for costs of 
operation and reasonable projections of income, for purposes of making 
payments under this section.
    Pub. L. 100-242, Sec. 118(d), inserted at end ``If the Secretary 
determines that a public housing agency has failed to take the actions 
required to submit an acceptable audit on a timely basis in accordance 
with chapter 75 of title 31, the Secretary may arrange for, and pay the 
costs of, the audit. In such circumstances, the Secretary may withhold, 
from assistance otherwise payable to the agency under this section, 
amounts sufficient to pay for the reasonable costs of conducting an 
acceptable audit, including, when appropriate, the reasonable costs of 
accounting services necessary to place the agency's books and records in 
auditable condition.''
    Subsec. (a)(2). Pub. L. 100-242, Sec. 112(b)(4), substituted ``one 
developed pursuant to a contributions contract authorized by section 
1437c'' for ``being assisted by an annual contributions contract 
authorized by section 1437c(c)'' and ``any such'' for ``any such 
annual''.
    Subsec. (a)(3). Pub. L. 100-242, Sec. 118(a)(2), added par. (3).
    Subsec. (c). Pub. L. 100-242, Sec. 118(b), amended subsec. (c) 
generally, substituting provisions authorizing appropriations under this 
section for fiscal years 1988 and 1989 for provisions authorizing 
appropriations for the period beginning on or after July 1, 1975, 
through the period beginning on or after Oct. 1, 1985.
    Subsec. (e). Pub. L. 100-242, Sec. 118(c), added subsec. (e).
    1986--Subsec. (c). Pub. L. 99-272 struck out ``and by'' after 
``1983,'' and inserted ``, and not to exceed $1,279,000,000 on or after 
October 1, 1985'' after ``1984''.
    1983--Subsec. (c). Pub. L. 98-181 substituted ``October 1, 1980, 
and'' for ``October 1, 1980,'' and authorized appropriations of not to 
exceed $1,500,000,000 on or after Oct. 1, 1983, and of such sums as may 
be necessary on or after Oct. 1, 1984.
    1981--Subsec. (a). Pub. L. 97-35, Sec. 322(c), substituted reference 
to lower income for reference to low-income wherever appearing.
    Subsec. (c). Pub. L. 97-35, Sec. 321(d), inserted provisions 
respecting authorization on or after Oct. 1, 1981.
    Subsec. (d). Pub. L. 97-35, Sec. 322(c), substituted reference to 
lower income for reference to low-income.
    1980--Subsec. (a)(1)(C). Pub. L. 96-399, Sec. 201(d), added cl. (C).
    Subsec. (c). Pub. L. 96-399, Sec. 201(b), authorized appropriation 
of not to exceed $826,000,000 on or after Oct. 1, 1980.
    1979--Subsec. (a). Pub. L. 96-153, Sec. 211(a), designated existing 
provisions as par. (1) and cls. (1) and (2) thereof as (A) and (B), 
inserted provisions that such contract shall provide that no disposition 
of low-income housing project, with respect to which the contract is 
entered into, shall occur during and for ten years after the period when 
contributions were made pursuant to such contract unless approved by the 
Secretary, and added par. (2).
    Subsec. (c). Pub. L. 96-153, Sec. 201(c), authorized appropriation 
for annual contributions of $741,500,000 on or after Oct. 1, 1979.
    Subsec. (d). Pub. L. 96-153, Sec. 207, added subsec. (d).
    1978--Subsec. (c). Pub. L. 95-557 inserted ``and not to exceed 
$729,000,000 on or after October 1, 1978''.
    1977--Subsec. (c). Pub. L. 95-128 authorized appropriation for 
annual contributions of $685,000,000 on or after Oct. 1, 1977.
    Pub. L. 95-24 substituted ``and not to exceed $595,600,000 on or 
after October 1, 1976'' for ``and not to exceed $576,000,000 on or after 
October 1, 1976''.
    1976--Subsec. (c). Pub. L. 94-375 substituted provision authorizing 
appropriations for annual contributions not to exceed $535,000,000 on or 
after July 1, 1975, not to exceed $80,000,000 on or after July 1, 1976, 
and not to exceed $576,000,000 on or after October 1, 1976 for provision 
which authorized annual contributions for contracts entered into on or 
after July 1, 1974 of not more than $500,000,000 per annum, which amount 
was to be increased by $60,000,000 on July 1, 1975.


                    Effective Date of 1998 Amendment

    Amendment by title V of Pub. L. 105-276 effective and applicable 
beginning upon Oct. 1, 1999, except as otherwise provided, with 
provision that Secretary may implement amendment before such date, 
except to extent that such amendment provides otherwise, and with 
savings provision, see section 503 of Pub. L. 105-276, set out as a note 
under section 1437 of this title.
    Pub. L. 105-276, title V, Sec. 519(e)-(g), Oct. 21, 1998, 112 Stat. 
2561, 2562, provided that:
    ``(e) Transitional Provision of Assistance.--
        ``(1) In general.--Subject to paragraph (2), before the 
    implementation of formulas pursuant to sections 9(d)(2) and 9(e)(2) 
    of the United States Housing Act of 1937 [42 U.S.C. 1437g(d)(2), 
    (e)(2)] (as amended by subsection (a) of this section), the 
    Secretary shall provide that each public housing agency shall 
    receive funding under sections 9 and 14 of the United States Housing 
    Act of 1937 [42 U.S.C. 1437g, 1437l], as those sections existed 
    immediately before the enactment of this Act [Oct. 21, 1998] (except 
    that such sections shall be subject to any amendments to such 
    sections that may be contained in title II of this Act [see Tables 
    for classification]).
        ``(2) Qualifications.--Before the implementation of formulas 
    pursuant to sections 9(d)(2) and 9(e)(2) of the United States 
    Housing Act of 1937 [42 U.S.C. 1437g(d)(2), (e)(2)] (as amended by 
    subsection (a) of this section)--
            ``(A) if a public housing agency establishes a rental amount 
        that is based on a ceiling rent established pursuant to 
        subsection (d)(1) of this section [42 U.S.C. 1437a note], the 
        Secretary shall take into account any reduction of the per unit 
        dwelling rental income of the public housing agency resulting 
        from the use of that rental amount in calculating the 
        contributions for the public housing agency for the operation of 
        the public housing under section 9 of the United States Housing 
        Act of 1937 [42 U.S.C. 1437g];
            ``(B) if a public housing agency establishes a rental amount 
        that is based on an adjustment to income under section 
        3(b)(5)(G) of the United States Housing Act of 1937 [42 U.S.C. 
        1437a(b)(5)(G)] (as in effect immediately before the enactment 
        of this Act [Oct. 21, 1998]), the Secretary shall not take into 
        account any reduction of or any increase in the per unit 
        dwelling rental income of the public housing agency resulting 
        from the use of that rental amount in calculating the 
        contributions for the public housing agency for the operation of 
        the public housing under section 9 of the United States Housing 
        Act of 1937 [42 U.S.C. 1437g]; and
            ``(C) if a public housing agency establishes a rental amount 
        other than as provided under subparagraph (A) or (B) that is 
        less than the greatest of the amounts determined under 
        subparagraphs (A), (B), and (C) of section 3(a)(1) of the United 
        States Housing Act of 1937 [42 U.S.C. 1437a(a)(1)(A), (B), (C)], 
        the Secretary shall not take into account any reduction of the 
        per unit dwelling rental income of the public housing agency 
        resulting from the use of that rental amount in calculating the 
        contributions for the public housing agency for the operation of 
        the public housing under section 9 of the United States Housing 
        Act of 1937 [42 U.S.C. 1437g].
    ``(f) Effective Date of Operating Formula.--Notwithstanding the 
effective date under section 503(a) [42 U.S.C. 1437 note], the Secretary 
may extend the effective date of the formula under section 9(e)(2) of 
the United States Housing Act of 1937 [42 U.S.C. 1437g(e)(2)] (as 
amended by subsection (a) of this section) for up to 6 months if such 
additional time is necessary to implement such formula.
    ``(g) Effective Date.--Subsections (d) [42 U.S.C. 1437a note], (e), 
and (f) shall take effect upon the date of the enactment of this Act 
[Oct. 21, 1998].''


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-330 effective Oct. 1, 1997, except as 
otherwise expressly provided, see section 107 of Pub. L. 104-330, set 
out as an Effective Date note under section 4101 of Title 25, Indians.


                    Effective Date of 1992 Amendment

    Amendment by subtitles B through F of title VI [Secs. 621-685] of 
Pub. L. 102-550 applicable upon expiration of 6-month period beginning 
Oct. 28, 1992, except as otherwise provided, see section 13642 of this 
title.


                    Effective Date of 1990 Amendment

    Amendment by section 802(p) of Pub. L. 101-625 deemed enacted Nov. 
5, 1990, see title II of Pub. L. 101-507, set out as a note under 
section 1701q of Title 12, Banks and Banking.


                    Effective Date of 1981 Amendment

    Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section 371 
of Pub. L. 97-35, set out as an Effective Date note under section 3701 
of Title 12, Banks and Banking.


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-557 effective Oct. 1, 1978, see section 
206(h) of Pub. L. 95-557, set out as a note under section 1437c of this 
title.


                             Effective Date

    Section effective on such date or dates as the Secretary of Housing 
and Urban Development shall prescribe, but not later than eighteen 
months after Aug. 22, 1974, except that all of the provisions of subsec. 
(c) shall become effective on the same date, see section 201(b) of Pub. 
L. 93-383, set out as a note under section 1437 of this title.


     Cooling Degree Day Adjustment Under Performance Funding System

    Section 508 of Pub. L. 101-625 provided that: ``In determining the 
Performance Funding System utility subsidy for public housing agencies 
pursuant to section 9 of the United States Housing Act of 1937 [42 
U.S.C. 1437g], the Secretary of Housing and Urban Development shall 
include a cooling degree day adjustment factor. The method by which a 
cooling degree day adjustment factor is included shall be identical to 
the method by which the heating degree day adjustment factor is 
included.''


                     Energy Efficiency Demonstration

    Section 523 of Pub. L. 101-625, which directed Secretary of Housing 
and Urban Development to carry out demonstration program to encourage 
use of private energy service companies and demonstrate opportunities 
for energy cost reduction through energy services contracts, and to 
report findings and recommendations to Congress as soon as practicable 
after expiration of 1-year period beginning on Nov. 28, 1990, was 
repealed by Pub. L. 105-276, title V, Sec. 582(a)(11), Oct. 21, 1998, 
112 Stat. 2644.

                  Section Referred to in Other Sections

    This section is referred to in sections 1437a, 1437c, 1437c-1, 
1437d, 1437k, 1437r, 1437s, 1437u, 1437v, 1437w, 1437z-4, 1437z-5, 
1437z-7, 1437aaa-2, 1437aaa-4, 1437bbb-2, 1437bbb-3, 1439, 4822, 12742 
of this title; title 12 section 1701u.
