Funding Issues		Program	Effective
Capital Fund and Operating Fund	Beginning fiscal year 2000, HUD will allocate public housing financial resources to HAs through two "funds," the Capital Fund and the Operating Fund. HUD will calculate the amount to be allocated to each HA using formulas developed by the Department and HAs through negotiated rulemaking. HUD may extend the effective date of the operating formula up to six months "if such additional time is necessary to implement such formula."	Public Housing	10/1/99
	Capital Fund will include funds for activities such as development and modernization of public housing, vacancy reduction, deferred maintenance, code compliance, management improvements, demolition and replacement, resident relocation, capital improvements to assist with security and self-sufficiency programs, and homeownership.
	Operating Fund resources are for the management and operation of public housing units, including preventive maintenance, anti-crime/drug activities, service coordinators, support of resident involvement, insurance costs, energy costs, costs associated with the community service requirement, appropriate costs for mixed-finance projects, and repayment of debt for rehabilitation activities.
	Fungibility: A) Beginning with amounts appropriated for fiscal year 2000, HAs may use up to 20 percent of their capital funds for operating activities. B) Small, non-troubled HAs may combine amounts from either fund for any eligible activity. This option is available only to agencies that own or operate "less than 250 public housing dwelling units."		A)10/1/99 B)Effective now
Capital Fund and Operating Formula: Provisions Relating to HA Income	Savings from energy conservation -- HAs are to receive "the full financial benefit from any reduction in the cost of utilities or waste management" resulting from conservation improvements in public housing projects as a part of the operating fund formula. Increases in rental income -- Additionally, the law directs that the operating formula be designed to encourage HAs to help residents increase their earned income. HAs are to "benefit from increases in such rental income." This income must be used only for low-income housing or to benefit residents. Income from joint ventures or consortia -- Any income generated will not reduce the HA's funding (except as indicated in the operating fund formula and the capital fund formula).	Public Housing	10/1/99
Mixed-Finance Public Housing	HAs may use capital fund assistance for a mixed-finance project. To the extent that income from such a project reduces public housing operating costs, the HA may use these savings to "rent privately developed dwelling units in the neighborhood of the mixed-finance project." These units are to be occupied by low-income families eligible for public housing.
Drug Elimination Grant	HAs may apply for a 1-year grant that will be renewed for up to 4 additional years if appropriations are available and the HA is meeting the requirements of the grant and other performance measures. Depending on the amounts appropriated and "other factors" HUD may increase or decrease the amount of the original grant and the amount allocated in subsequent years. HUD is to give applicants that "will use the grants to continue or expand activities" an eligibility preference while not precluding the selection of agencies with "urgent or serious crime problems." HAs may form consortia to apply for drug elimination grants.	Public Housing	10/1/99
Three-month Delay in Reissuing	The delay in reissuance of certificates and vouchers was not extended this year. This provision was first instituted in the Balanced Budget Downpayment Act of 1996 and was subsequently extended in each year's appropriations. However, it was not extended for fiscal year 1999 and is therefore no longer in effect.	Section 8	Repealed
Section 8 Tenant-Based Renewals	Subject to appropriations, the law requires HUD to renew all expiring tenant-based ACCs using an inflation factor based on local or regional factors. In addition, HUD is to redefine the amount of assistance provided to each HA based on the actual number of families assisted as of October 1, 1997 (with upward adjustments for incremental and additional families authorized after October 1, 1997.) Final regulations are to be developed through negotiated rulemaking "not later than one year after the date of the enactment of this act."	Section 8	HUD required to issue notice by 12/31/98
Administrative Fees	The fee structure implemented in Public Law 104-204 (1997 Appropriations) is made permanent in this law. It reiterates the split fees of 7.65 percent of the base amount for the first 600 tenant-based units and 7 percent for the units above 600. The base amount is the same as in the previous law. As is currently the case, HUD may make annual adjustments to the base amount for subsequent years using wage data or "objectively measurable data."		Effective Now
Options Affecting HA Organization
Home Rule Flexible Grant Demonstration Program	Under the demonstration, local governments may apply to HUD to receive the funding that the Department would otherwise allocate to the local HA for operating federal housing programs. The amount made available to the localities participating in the demonstration "shall be equal to the sum of the amounts of covered assistance that would otherwise be made available under the provisions of this Act to the public housing agency for the jurisdiction." Jurisdictions receiving the funding are required to operate the housing program under the same terms and conditions that applied to the HA. However, the law grants HUD authority to waive any term or condition if it is "appropriate to carry out the purpose of the demonstration..." The demonstration is limited to 100 jurisdictions during the 4-year period 1999 through 2002. Localities with high performing HAs are not eligible to participate in the demonstration. HUD may approve participation for up to 55 jurisdictions that are home to troubled HAs and up to 45 participants may come from communities with standard performing HAs.	Public Housing and Section 8	Effective now, however, HUD must develop the program.
Mixed- Finance Public Housing	HAs may provide capital fund or operating fund assistance to mixed-finance projects in the form of loans, grants, guarantees or other investments. Units assisted from these funds must be operated and maintained as public housing.	Public Housing	Upon Issuance of Regulations
Consortia and Joint Ventures	A)Two or more HAs may form a consortium to administer any or all housing programs. B)An HA may form and operate wholly-owned or controlled subsidiaries (including nonprofits) which may be controlled by the same persons who are board members, managers, or staff of the HA. HUD is to specify the minimum requirements for the formation and operation of consortia and joint ventures.	Applies to HA, not programs	10/1/99
HA Mortgages	With HUD approval, HAs may grant others a security interest "in any public housing project or other property of the public housing agency."	Public Housing
General Program Operating Provisions
Non-Citizen Requirement Opt-Out	A technical change to statutory language eliminates the option that HAs had to "opt-out" of applying restrictions to assisting noncitizen housing applicants and participants. Effective with the passage of the act, HAs must begin to apply the provisions of Section 214 of the Housing and Community Development Act of 1980. In July of 1995, HUD issued a guidebook on the requirements. The guidebook is entitled "Restrictions on Assistance to Noncitizens" 7465.7.	Public Housing & Section 8	Effective now
Federal Preferences	Repealed. HAs may set up a system of preferences for occupancy based on local housing needs and priorities.	Public Housing & Section 8	Repealed
Income Targeting	Every fiscal year, each HA must reserve a minimum of 40 percent of its public housing new admissions for families "whose incomes do not exceed 30 percent of the area median income."	Public Housing	Effective now
	Every fiscal year, each HA must reserve a minimum of 75 percent of its Section 8 new admissions for families "whose incomes do not exceed 30 percent of the area median income." HAs that exceed the Section 8 target may, in some circumstances, apply a portion of the excess to the public housing targeting goal.	Section 8
Income Mixing	In reaching the new admissions targets, HAs are required to avoid concentrating very low-income families in certain public housing projects or in certain buildings. Additionally, HAs must work to deconcentrate poverty in public housing. To achieve this goal, the law requires HAs to bring "higher income tenants into lower income projects and lower income tenants into higher income projects." HAs are permitted to offer incentives to families to achieve deconcentration and income mixing.	Public Housing
Site-Based Waiting Lists	HAs may maintain waiting lists for public housing by establishing a system under which applicants may apply directly to a particular project or may designate a particular project in which they wish to reside. Procedures must comply with all civil rights and fair housing laws.	Public Housing	10/1/99
Tenant Screening and Eviction	HA's right to request criminal background information is expanded to include applicants for tenant- and project-based Section 8 programs. HAs are authorized to process criminal history requests from owners of privately-owned, assisted properties in the HA's jurisdiction and may charge the owner a reasonable fee for the service. Although tenant-based property owners retain the responsibility for screening renters, HUD may establish applicant screening criteria for HAs.	Section 8	10/1/99
	The law requires HAs to prohibit admission to federal housing programs for any household that includes an individual "subject to a lifetime registration requirement under a State sex offender registration program." HAs are directed to conduct criminal background checks on applicants that include a check to determine whether the applicant is subject to the lifetime registration.	Public Housing and Section 8	10/1/99
	HAs also gain the right to obtain information from drug treatment facilities regarding applicants to public housing. The information must be "solely related to whether the applicant is currently engaging in the illegal use of a controlled substance." The law specifies that this provisions "shall take effect upon enactment and without the necessity of guidance from, or any regulation issued by, the Secretary."	Public Housing	Effective now
Income Provisions	A)Over-income families. HAs with fewer than 250 public housing units may lease a dwelling to an over-income family if there are no eligible applicants. The rent cannot be less than the cost to operate the unit.
	B) HAs are required to disregard, for twelve months, the earned income of family members who were unemployed for a year or more and are now employed; family members whose employment income increases as a result of participation in any family self-sufficiency or job training program; or family members who were receiving TANF benefits in the last six months and whose earned income increases. During the following twelve months the family's rent may be increased by 50 percent of the amount that would have been in effect without the disregard. Instead of the disregard, qualifying families may ask the HA to set up an escrow account.	Public Housing (Section 8 If funds are made available)	10/1/99
	C)Income changes resulting from welfare program requirements. 1) If a family's welfare benefits are lowered due to the family's failure to comply with program requirements, the HA must not reduce the family's rent. 2) HAs are not to consider a loss of benefits due to the expiration of lifetime time limit as a failure to comply and the HA must lower the tenant's rent. 3) If the family's benefits are reduced because of fraud, the HA must not lower the rent.	Public Housing & Section 8	1)10/1/99 2)Effective now 3)Effective now
Minimum Rent	HAs are to set a minimum monthly rent at "not more than $50 per month." The law specifies that the minimum rent includes the utility allowance. Hardship exemptions apply.		Effective now
Flat Rents	The law requires each HA to establish a flat rent for each public housing unit. The flat rent must be based on the value of the unit and designed so that it does not discourage families working towards economic self-sufficiency.	Public Housing	10/1/99
Family Choice of Rent Amount	Each year, each public housing family may choose to have their rent based on the formula method or a flat amount set by the HA. For families electing the flat rent, the HA is required to reexamine the family's income at least once every three years. (Rules regarding the minimum rent apply.) HAs that already have ceiling rents or flat rents in place may continue to charge these rents but must give residents the opportunity to choose.
Transitional Ceiling Rents	For the period from enactment to the time when the capital and operating formulas are implemented, HAs may continue existing ceiling rents "that reflect the reasonable market value of the housing but not less than the monthly cost to operate the housing."Additionally, under new language in the law, an HA may establish ceiling rents for family housing (housing not predominately elderly or disabled) at a reasonable rate but "not less than 75 percent of the "the monthly cost to operate the housing." Units designated for elderly or disabled may have rents set at 100 percent of the monthly cost to operate the units. A deposit to a replacement reserve may be a part of the monthly cost calculation. At the HA's discretion, a deposit to a replacement reserve may be a part of the monthly costs under either method.	Public Housing	Effective now
Family Self-Sufficiency	HAs are not required to expand their FSS programs when receiving new assistance in public housing or Section 8. However, for those agencies that were required to have an FSS program, the statute continues the requirement. The required size of the program is decreased for each family that "fulfills its obligations under the contract of participation." HAs may choose to continue a local FSS program.	Public Housing & Section 8
Community Service Requirement	Each adult resident of public housing must contribute 8 hours of community service per month to the community in which the family resides. Exempted are those who are employed, elderly, disabled, participating in an economic self sufficiency program, excluded from the state's work requirements, or enrolled in a qualifying state program. The HA must monitor family's compliance annually and if the family fails to comply, the HA must not renew the lease unless the family and the HA enter into an agreement to bring the resident current with owed hours.	Public Housing	10/1/99
Residents Serving on HA's Boards	Each governing board of each HA shall contain "not less than one member who is directly assisted by the HA" and who may be elected by the residents. Exceptions: States that require board members to be salaried and serve on a full-time basis. HAs with less than 300 PH units may be exempted if the HA notified resident advisory board of the opportunity and within reasonable time the resident advisory board has not notified the HA of any resident's interest in serving.	Public Housing & Section 8
Definitions	Person with Disabilities: no individual shall be considered a person with disabilities, for purposes of eligibility for low-income housing under this title, solely on the basis of any drug or alcohol dependence.		Effective now
Pets in Public Housing	A resident may own or have present one or more common household pets in a public housing dwelling unit. The HA may establish reasonable requirements including a nominal fee and a pet deposit. In addition, the HA may require an escrow account for other costs not covered. HAs have the right to set limits on the number of animals in a unit and may prohibit types of animals that are classified as dangerous. Individual animals, based on certain factors, including the size and weight of the animal may be rejected by the HA. HAs may develop other restrictions based on the size and type of building or project or other relevant conditions. This section takes effect upon the date of the final regulations are issued after notice and opportunity for public comment.	Public Housing	Upon publication of final regulations
Housing Quality Standards	HQS are standards for safe and habitable housing established 1) by HUD or 2) by local housing codes or by codes adopted by the HA that meet or exceed HQS. HQS standards must not severely restrict housing choice. The Department may waive the standard requirement to significantly increase access to affordable housing, except where such waiver could adversely affect assisted families.	Section 8	10/1/99
	Each public housing contract with HUD must state that the HA will maintain public housing units in compliance with standards that meet or exceed housing quality standards (HQS). HUD may decide whether state or local codes meet or exceed HQS.	Public Housing
Public Housing Management Assessment Program	The law directs HUD to include new indicators in PHMAP. New criteria to be evaluated include the HA's performance in promoting the economic self-sufficiency of residents, how effectively the HA involves residents in the administration of public housing, whether the HA has and administers an effective screening and eviction strategy and involves local government officials and residents in implementing the strategies, and the extent to which the HA is providing "acceptable basic housing conditions."
Occupancy Standards	The law directs HUD to publish occupancy standards that provide guidance for familial status discrimination complaints under the Fair Housing Act "which involve an occupancy standard established by a housing provider." The Department is to publish the notice in the Federal Register within sixty days after enactment and it to is to contain "the specific and unmodified standards" from HUD's General Counsel's Memorandum from March 1991. This memorandum states that "an occupancy standard no more restrictive than 'one person per bedroom plus one' is reasonable and should be presumed lawful, absent special circumstances."	Public Housing and Section 8	HUD is required to publish a notice by 12/20/98
	The law prohibits HUD from "directly or indirectly" establishing national occupancy standards.
HA Plan Requirements: 5-Year Plan and Annual Plan
Resident Advisory Board	HAs must establish a resident advisory board to make recommendations for the HA's annual plan. The HA must consider the board's recommendations and submit them to HUD along with plan. An HA may be exempted from establishing a resident board if the HA demonstrates that an existing resident organization represents the interests of residents and the group can perform the review and recommendation functions.	Public Housing & Section 8	10/1/99
HA 5-year Plan	HAs are to develop a 5-year plan that states the HA's mission and the agency's goals and objectives.
HA Annual Plan: Content	The HA's annual plan must address: 1) Needs, how the HA will meet the needs of low-income and very low-income families; 2) Financial resources, how the HA will use its resources; 3) Eligibility, selection and admissions policies for public housing and Section 8 assistance including: A) waiting lists, (including site-based waiting lists) and B) the policy for deconcentration of lower-income families; 4) Rent determinations; 5) Operation and management, maintenance and management procedures including the prevention or eradication of pest infestation, including cockroaches; 6) Grievance procedures; 7) Capital improvements necessary to ensure long-term viability of the HA's projects; 8) Demolition and disposition, a description and timetable for housing that the HA will demolish or dispose of 9) Designated housing plans for elderly and disabled families; 10) Conversion of public housing including A) a description of the units the HA is required to or is voluntarily converting to tenant-based assistance, B) an analysis of units required to be converted, and C) a statement regarding assistance to be used with such conversions; 11) Homeownership, a description of any programs; 12) Community service and self-sufficiency, a description of A) programs relating to services and amenities, B) policies or programs for the enhancement of the economic and social self-sufficiency of assisted families, C) how the HA will comply with the community service requirement; 13) Safety and crime prevention, the HA's measures to ensure the safety of public housing residents and coordination with appropriate law enforcement organizations to carry out plans; 14) Pets, policies relating to pet ownership in public housing; 15) Civil rights certification, a certification that the HA will comply with title VI of the Civil Rights Act of 1964, the Fair Housing Act, section 504 of the Rehabilitation Act of 1973, and title II of the Americans with Disabilities Act, and will affirmatively further fair housing. 16) Annual audit, the results of the most recent fiscal year audit of the public housing agency; 17) Asset management, how the HA will manage its assets including the plan for the long-term operating, capital investment, rehabilitation, modernization, and disposition; 18) Other, any other information required by law. The law directs HUD to issue an interim rule "not later than 120 days after enactment" of the act.	Public Housing & Section 8	HUD is to publish interim rule 120 days afer passage of the act, final rule by 10/1/99
	HUD may develop streamlined annual plan requirements for 1) small HAs (fewer than 250 units) that are not designated by HUD as troubled, 2) high performing HAs, and 3) HAs that administer Section 8 only.
Merger of the Section 8 Certificate and Voucher Programs
Payment Standard	In the new tenant-based program, HAs must establish a payment standard between 90 and 110 percent of the fair market rent (FMR). If the HA's payment standard is less than 90 percent or more than 110 percent of the FMR HUD may require that the HA seek Departmental approval for the standard. HUD is required to monitor rent burdens and if any payment standard results in a significant percentage of families paying more than 30 percent of adjusted income, HUD may require the HA to adjust the standard.		10/1/99
ACC Provisions	The law states that HUD may "provide assistance to public housing agencies for tenant-based assistance using the payment standard..." and establish a set-aside "adjustment pool" of up to 5 percent to adjust payments to HAs to ensure affordability.
Tenant Rent	Subject to the minimum rent requirements, HA are directed to calculate the family's rent based on whether the gross rent for the unit (including an allowance for utilities) is less than or greater than the payment standard. For families whose gross rent does not exceed payment standard, the family pays the higher of 30 percent of their adjusted gross income, 10 percent of unadjusted income, or the welfare rent. For families whose gross rent exceeds payment standard, the monthly housing assistance payment (HAP) is the amount that the payment standard exceeds the greater of 30 percent of the family's adjusted gross income, 10 percent of unadjusted income, or the welfare rent.
Elimination of the Shopping Incentive	For voucher families leasing in the same unit or complex whose gross rent does not exceed the payment standard, HAs are to determine the rent based on the greater of 30 percent of adjusted income, 10 percent of unadjusted income or the applicable welfare rent.		12/20/98
Initial Tenant Rent	The first time a family receives tenant-based assistance under these provisions, the family is prohibited from paying more than 40 percent of their monthly adjusted income for rent.		10/1/99
Denying Participation to Owners	HAs may refuse to enter into a HAP contract with an owner who refuses to or has a history of refusing to terminate the tenancy of a family who threatens health or safety of other residents, managers, HA employees, or the owner; disturbs the peaceful enjoyment of others residing in the immediate vicinity; or engages in drug-related or violent criminal activity.
Lease Term	The lease is to be for a term not less than one year, except that the HA can decide to approve a shorter term if it would improve housing opportunities and is a "prevailing local market practice."
Required Lease Language	The lease must incorporate language permitting termination for violent criminal activity, drug-related criminal activity or actions that threaten the health, safety, or right to peaceful enjoyment of the premises by other tenants, HA employees or others residing in the immediate vicinity of the premises.
Inspection Timelines	Inspections are to be made within fifteen days after receiving a request from the resident or landlord. However, HAs with 1250 or more families are only required to inspect the unit in "a reasonable period" after receiving such a request. How the HA meets these goals is to be considered in HUD's evaluation of the HA's performance.
HA Late Fees	The HAP contract may include a late fee provision assessing penalties against the HA if payments to the owner are not timely. The penalties should reflect general community practice and must be paid from administrative fees. However, no penalty shall be imposed if the late payment is due to factors that the Secretary determines are beyond the control of the HA.
HA-Owned Units	If a family leases a dwelling unit owned by an HA, HUD shall require the unit of general local government or another entity approved by HUD to make required unit inspections and rent determinations. The HA shall pay for any expenses of such inspections and rent determinations.
Manufactured Housing	An HA may make assistance payments on behalf of a family that utilizes a manufactured home as a principal place of residence. Such payments may be made only for the rental of the real property. The HA shall establish a payment standard (that does not exceed amount set by HUD) for determining the monthly assistance.
Relocation of Witnesses and Victims of Crime	HUD is directed to provide tenant-based assistance for the relocation of witnesses in connection with efforts to combat crime in public and assisted housing. The relocation must be at the request of a law enforcement or prosecution agency. In addition, the Department is to provide relocation assistance for public housing families who are victims of a crime of violence that has been reported to an appropriate law enforcement agency.
Portability	HUD is to establish procedures for the compensation of public housing agencies that issue vouchers to families that move into or out of the HA's jurisdiction. Additionally, the Department may reserve amounts to compensate HAs for the relocating families.
Miscellaneous
Study of Methods for Evaluating HAs	The study is to analyze the advantages and disadvantages of various methods of regulating and evaluating HA performance. The contractor is to look at the system currently in place, accreditation models, performance-based models providing for local, resident, and community monitoring of HAs, and models using private contractors for monitoring HAs. HUD is to request the National Academy of Public Administration (NAPA) to conduce the analysis. If NAPA declines, the Secretary is to select a contractor through a competitive process.	Applies to All HAs	HUD to execute contract within 90 days

PHADA Advocate (vol. 13, number 20, 11/23/98) ADVOCATE