§1437g. Annual contributions for operation of low-income housing

(a) Determination of amounts; contract authorization; standards for payments; necessity of contribution contracts; performance funding system; audit

(1)(A) In addition to the contributions authorized to be made for the purposes specified in section 1437c of this title, the Secretary may make annual contributions to public housing agencies for the operation of low-income housing projects. The contributions payable annually under this section shall not exceed the amounts which the Secretary determines are required (i) to assure the lower income character of the projects involved, (ii) to achieve and maintain adequate operating services and reserve funds, and (iii) 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. The Secretary shall embody the provisions for such annual contributions in a contract guaranteeing their payment subject to the availability of funds, and such contract shall provide that no disposition of the 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. 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.

(B)(i) Annual contributions under this section to any public housing agency for any project with a sufficient number of residents who are frail elderly or persons with disabilities may be used, with respect to such project, for (I) the cost of a management staff member to coordinate the provision of any services within the project provided through any agency of the Federal Government or any other public or private department, agency, or organization to residents of the project who are frail elderly or persons with disabilities to enable such residents to live independently and prevent placement in nursing homes or institutions; and (II) expenses for the provision of services for such residents of the project to enable such residents to live independently and prevent placement in nursing homes or institutions, which may include meal services, housekeeping and chore assistance, personal care, laundry assistance, transportation services, and health-related services, except that not more than 15 percent of the cost of the provision of such services may be provided under this section. For purposes of this clause, the term "frail elderly" shall have the meaning given the term under section 1701q(d) of title 12, except that such term does not include any person receiving assistance provided under the Congregate Housing Services Act of 1978 [42 U.S.C. 8001 et seq.] or section 8011 of this title, and the term "persons with disabilities" shall have the meaning given the term under section 8013 of this title.

(ii) Annual contributions under this section to any public housing agency for any project may be used, with respect to such project, for (I) the cost of employing or otherwise retaining the services of one or more service coordinators under section 661 ¹ of the Housing and Community Development Act of 1992 [42 U.S.C. 13631] to coordinate the provision of any supportive services within the project for residents of the project who are elderly families and disabled families, and (II) expenses for the provision of such services for such residents of the project. Not more than 15 percent of the cost of the provision of such services may be provided under this section. Services may not be provided under this clause for any person receiving assistance under the Congregate Housing Services Act of 1978 [42 U.S.C. 8001 et seq.] or section 8011 of this title. The budget authority available under section 1437c(c) of this title for assistance under this section is authorized to be increased by $30,000,000 on or after October 1, 1992, and by $30,000,000 on or after October 1, 1993. Amounts made available under this clause shall be used to provide additional annual contributions to public housing agencies only for the purpose of providing service coordinators and services under this clause for public housing projects.

(2) The Secretary may not make assistance available under this section for any low-income housing project unless such project is one developed pursuant to a contributions contract authorized by section 1437c of this title but not subject to section 1437f of this title, except that after the duration of any such contributions contract with respect to a low-income housing project, the Secretary may provide assistance under this section with respect to such project as long as the lower income nature of such project is maintained.

(3)(A) For purposes of making payments under this section (except for payments under paragraph (1)(B)), the Secretary shall utilize a performance funding system that is substantially based on the system defined in regulations and in effect on February 5, 1988 (as modified by this paragraph), and that establishes standards for costs of operation and reasonable projections of income, taking into account the character and location of the project and the characteristics of the families served, in accordance with a formula representing the operations of a prototype well-managed project. Such performance funding system shall be established in consultation with public housing agencies and their associations, be contained in a regulation promulgated by the Secretary prior to the start of any fiscal year to which it applies, and remain in effect for the duration of such fiscal year without change. Notwithstanding the preceding sentences, the Secretary shall revise the performance funding system by June 15, 1988, to accurately reflect the increase in insurance costs incurred by public housing agencies. Notwithstanding sections 583(a) and 585(a) ² 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 ² 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.

(B) Under the performance funding system established under this paragraph-

(i) in the first year that the reductions occur, any public housing agency shall share equally with the Secretary any cost reductions due to the differences between projected and actual utility rates attributable to actions taken by the agency which lead to such reductions, 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;

(ii) in the case of any public housing agency that receives financing (from a person other than the Secretary) or enters into a performance contract to undertake energy conservation improvements in a public housing project, under which payment does not exceed the cost of the energy saved as a result of the improvements during a negotiated contract period of not more than 12 years that is approved by the Secretary-

(I) the public housing agency shall retain 100 percent of any cost avoidance due to differences between projected and actual utility consumption (adjusted for heating degree days) attributable to the improvements, until the term of the financing agreement is completed, at which time the annual utility expense level 3-year rolling base procedures shall be applied using-

(a) in the first year following the end of the contract period, the energy use during the 2 years prior to installation of the energy conservation improvements and the last contract year;

(b) in the second year following the end of the contract period, the energy use during the 1 year prior to installation of the energy conservation improvements and the 2 years following the end of the contract period; and

(c) in the third year following the end of the contract period, the energy use in the 3 years following the end of the contract period; or

(II) the Secretary shall provide an additional operating subsidy above the current allowable utility expense level equivalent to the cost of the energy saved as a result of the improvements and sufficient to cover payments for the improvements through the term of the contract or agreement;

(iii) there shall be a formal review process for the purpose of providing such revisions (either increases or reductions) to the allowable expense level of a public housing agency as necessary-

(I) to correct inequities and abnormalities that exist in the base year expense level of such public housing agency;

(II) to accurately reflect changes in operating circumstances since the initial determination of such base year expense level; and

(III) to ensure that the allowable expense limit accurately reflects the higher cost of operating the project in an economically distressed unit of local government and the lower cost of operating the project in an economically prosperous unit of local government;

(iv) if a public housing agency redesigns or substantially rehabilitates a public housing project so that 2 or more dwelling units are combined to create a single larger dwelling unit, the payments received under this section shall not be reduced solely because of the resulting reduction in the number of dwelling units if not less than the same number of individuals will reside in the new larger dwelling unit as resided in the dwelling units that were combined to form such larger dwelling unit; and

(v) if a public housing agency renovates, converts, or combines one or more dwelling units in a public housing project to create congregate space to accommodate the provision of supportive services in accordance with section 1437t of this title and section 8011 of this title, the payments received under this section shall not be reduced because of the resulting reduction in the number of dwelling units.

(4) Adjustments to a public housing agency's operating subsidy made by the Secretary under this section shall reflect actual changes in rental income collections resulting from the application of section 3544 of this title.

(b) Limitation on amount of aggregate rentals paid by families residing in dwelling units receiving annual contributions

The aggregate rentals required to be paid in any year by families residing in the dwelling units administered by a public housing agency receiving annual contributions under this section shall not be less than an amount equal to one-fifth of the sum of the incomes of all such families.

(c) Authorization of appropriations

(1) There are authorized to be appropriated for purposes of providing annual contributions under this section $2,282,436,000 for fiscal year 1993 and $2,378,298,312 for fiscal year 1994.

(2) There are also authorized to be appropriated to provide annual contributions under this section, in addition to amounts under paragraph (1), such sums as may be necessary for each of fiscal years 1993 and 1994, to provide each public housing agency with the difference between (A) the amount provided to the agency from amounts appropriated pursuant to paragraph (1), and (B) all funds for which the agency is eligible under the performance funding system without adjustments for estimated or unrealized savings.

(3) In addition to amounts under paragraphs (1) and (2), there are authorized to be appropriated for annual contributions under this section to provide for the costs of the adjustments to income and adjusted income under the amendments made by sections ³ 573(b) and (c) of the Cranston-Gonzalez National Affordable Housing Act such sums as may be necessary for fiscal years 1993 and 1994.

(d) Distribution of remaining appropriated funds to housing projects incurring excessive costs

If, in any fiscal year beginning after September 30, 1979, any funds which have been appropriated for such year remain after applying the provisions of the second and fourth sentences of subsection (a)(1) of this section, the Secretary shall distribute such funds to low-income housing projects which incurred excessive costs which were beyond their control and the full extent of which was not taken into account in the original distribution of funds for such fiscal year.

(e) Time of payment

In the case of any public housing agency that submits its budget for any fiscal year of such agency to the Secretary in a timely manner in accordance with the regulations issued by the Secretary under this section, assistance to be provided to such agency under this section for such fiscal year shall commence not later than the 1st month of such fiscal year, and shall be paid in accordance with such payment schedule as may be agreed upon by the Secretary and such agency.

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

References in Text

The Congregate Housing Services Act of 1978, referred to in subsec. (a)(1)(B), is Pub. L. 95–557, Oct. 31, 1978, 92 Stat. 2104 , as amended, which is classified principally to chapter 89 (§8001 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 8001 of this title and Tables.

Section 8011 of this title, referred to in subsec. (a)(1)(B), (3)(B)(v), was in the original "section 802 of the Cranston-Gonzalez National Affordable Housing Act", meaning section 802 of Pub. L. 101–625, title VIII, Nov. 28, 1990, 104 Stat. 4304 , which enacted section 8011 of this title and amended this section.

Sections 583(a) and 585(a) and subchapter IV of chapter 5 of title 5 (as added by section 3(a) of the Negotiated Rulemaking Act of 1990), referred to in subsec. (a)(3)(A), are sections 583 and 585 and subchapter IV of chapter 5 of Title 5, Government Organization and Employees, as added by Pub. L. 101–648, §3(a), Nov. 29, 1990, 104 Stat. 4969 . Subchapter IV of chapter 5 of Title 5 was redesignated subchapter III by Pub. L. 102–354, §3(a)(1), Aug. 26, 1992, 106 Stat. 944 , and sections 583 and 585 of Title 5 were renumbered sections 563 and 565, respectively, by Pub. L. 102–354, §3(a)(2).

Section 3544 of this title, referred to in subsec. (a)(4), was in the original, "section 904 of the Stewart B. McKinney Homeless Assistance Amendments Act of 1988", meaning section 904 of Pub. L. 100–628, which enacted section 3544 of this title and amended sections 503 and 504 of this title.

Section 573(b) and (c) of the Cranston-Gonzalez National Affordable Housing Act, referred to in subsec. (c)(3), is section 573(b), (c) of Pub. L. 101–625, which amended section 1437a of this title.

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

1994-Subsec. (a)(4). Pub. L. 103–233 added par. (4).

1992-Subsec. (a)(1)(B). Pub. L. 102–550, §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, §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, §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, §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, §572(2), substituted "low-income housing" for "lower income housing" wherever appearing.

Pub. L. 101–625, §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, §572(2), substituted "low-income housing" for "lower income housing" wherever appearing.

Subsec. (a)(3)(A). Pub. L. 101–625, §507(b)(2), inserted after first comma "(except for payments under paragraph (1)(B))".

Subsec. (a)(3)(B)(v). Pub. L. 101–625, §802(p), added cl. (v).

Subsec. (c). Pub. L. 101–625, §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, §572(2), substituted "low-income housing" for "lower income housing".

1988-Subsec. (a)(1). Pub. L. 100–242, §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, §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, §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, §118(a)(2), added par. (3).

Subsec. (c). Pub. L. 100–242, §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, §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, §322(c), substituted reference to lower income for reference to low-income wherever appearing.

Subsec. (c). Pub. L. 97–35, §321(d), inserted provisions respecting authorization on or after Oct. 1, 1981.

Subsec. (d). Pub. L. 97–35, §322(c), substituted reference to lower income for reference to low-income.

1980-Subsec. (a)(1)(C). Pub. L. 96–399, §201(d), added cl. (C).

Subsec. (c). Pub. L. 96–399, §201(b), authorized appropriation of not to exceed $826,000,000 on or after Oct. 1, 1980.

1979-Subsec. (a). Pub. L. 96–153, §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, §201(c), authorized appropriation for annual contributions of $741,500,000 on or after Oct. 1, 1979.

Subsec. (d). Pub. L. 96–153, §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 1992 Amendment

Amendment by subtitles B through F of title VI [§§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 provided that:

"(a) Establishment.-The Secretary of Housing and Urban Development shall carry out a demonstration program to encourage the use of private energy service companies in accordance with section 118(a) of the Housing and Community Development Act of 1987 [Pub. L. 100–242, amending this section]. The Secretary shall provide technical assistance to 5 public housing agencies to demonstrate the opportunities for energy cost reduction in 5 public housing projects through energy services contracts. Not later than 90 days after the date of the enactment of this Act [Nov. 28, 1990], the Secretary shall establish such selection criteria for this demonstration as the Secretary deems appropriate after consultation with representatives of public housing agencies and energy efficiency organizations.

"(b) Report.-As soon as practicable after the expiration of the 1-year period beginning on the date of the enactment of this Act [Nov. 28, 1990], the Secretary of Housing and Urban Development shall submit to the Congress a report setting forth the findings and recommendations of the Secretary as a result of the demonstration under this section. The Secretary shall disseminate such report, to the extent practicable, to other public housing agencies."

Section Referred to in Other Sections

This section is referred to in sections 1437d, 1437l, 1437r, 1437u, 1437v, 1437w, 1437bb, 1437cc, 1437aaa–2, 1437aaa–4, 1439, 12742 of this title; title 12 section 1701u.

¹ So in original. Probably should be section "671".

² See References in Text note below.

³ So in original. Probably should be "section".