42 U.S.C. § 1437g — Public housing Capital and Operating

Page 4652 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437f–1 1 So in original. Probably should be ‘‘Fund’’. gram or project, in accordance with regulations issued by the Secretary. Where the Secretary is the principal party initiating or sustaining an action to recover amounts from families or owners, the provi- sions of this section shall not apply. ‘‘(3) RECOVERY.—Amounts may be recovered under this paragraph— ‘‘(A) by an agency through a lawsuit (including settlement of the lawsuit) brought by the agency or through court-ordered restitution pursuant to a criminal proceeding resulting from an agency’s in- vestigation where the agency seeks prosecution of a family or where an agency seeks prosecution of an owner; or ‘‘(B) through administrative repayment agree- ments with a family or owner entered into as a re- sult of an administrative grievance procedure con- ducted by an impartial decisionmaker in accord- ance with section 6(k) of the United States Housing Act of 1937 [42 U.S.C. 1437d(k)].’’ [Pub. L. 102–550, title I, § 129(b), Oct. 28, 1992, 106 Stat. 3712, provided that: ‘‘Subsection (a) [amending section 326(d) of Pub. L. 97–35, set out above] shall apply with respect to actions by public housing agencies initiated on or after the date of the enactment of this Act [Oct. 28, 1992].’’] STUDY BY SECRETARY CONCERNING FEASIBILITY OF MINIMUM RENT PAYMENT REQUIREMENTS Pub. L. 96–153, title II, § 212, Dec. 21, 1979, 93 Stat. 1110, directed the Secretary of Housing and Urban Develop- ment to conduct a study of the feasibility and financial desirability of requiring minimum rent payments from tenants in low-income housing assisted under this chapter, and to submit a report to the Congress con- taining the findings and conclusions of such study not later than ten days after the Budget for fiscal year 1981 is transmitted pursuant to section 11 of former Title 31, Money and Finance, and directed the Secretary of Housing and Urban Development to conduct a study to provide detailed comparisons between the rents paid by tenants occupying low-income housing assisted under this chapter and the rents paid by tenants at the same income level who are not in assisted housing and to transmit a report on such study to the Congress not later than Mar. 1, 1980. STUDY OF ALTERNATIVE MEANS OF ENCOURAGING THE DEVELOPMENT OF HOUSING Pub. L. 95–557, title II, § 208, Oct. 31, 1978, 92 Stat. 2095, directed that Secretary of Housing and Urban Develop- ment conduct a study for purpose of examining alter- native means of encouraging development of housing to be assisted under this section for occupancy by large families which reside in areas with a low-vacancy rate in rental housing and report to Congress no later than one year after Oct. 31, 1978, for purpose of providing leg- islative recommendations with respect to this study. TAXATION OF INTEREST PAID ON OBLIGATIONS SECURED BY INSURED MORTGAGE AND ISSUED BY PUBLIC AGENCY Pub. L. 93–383, title III, § 319(b), Aug. 22, 1974, 88 Stat. 686, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘With respect to any obliga- tion secured by a mortgage which is insured under sec- tion 221(d)(3) of the National Housing Act [section 1715l(d)(3) of Title 12, Banks and Banking] and issued by a public agency as mortgagor in connection with the fi- nancing of a project assisted under section 8 of the United States Housing Act of 1937 [this section], the in- terest paid on such obligation shall be included in gross income for purposes of chapter 1 of the Internal Rev- enue Code of 1986 [formerly I.R.C. 1954] [chapter 1 of Title 26, Internal Revenue Code].’’ RENTAL OR INCOME CONTRIBUTIONS; USE OF SPECIAL SCHEDULES OF REQUIRED PAYMENTS FOR PARTICI- PANTS IN MUTUAL HELP PROJECTS CONTRIBUTING LABOR, ETC. Pub. L. 93–383, title II, § 203, Aug. 22, 1974, 88 Stat. 668, provided that: ‘‘The rental or income contribution pro- visions of the United States Housing Act of 1937 [sec- tions 1437 to 1437j of this title], as amended by section 201 of this Act, shall not preclude the use of special schedules of required payments as approved by the Sec- retary for participants in mutual help housing projects who contribute labor, land, or materials to the develop- ment of such projects.’’ § 1437f–1. Repealed. Pub. L. 116–6, div. G, title II, § 236, Feb. 15, 2019, 133 Stat. 467 Section, Pub. L. 113–235, div. K, title II, § 221, Dec. 16, 2014, 128 Stat. 2754, related to report on section 8 project-based housing. Provisions similar to those in this section were con- tained in the following prior act: Pub. L. 113–76, div. L, title II, § 225, Jan. 17, 2014, 128 Stat. 632. § 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 es- tablished under subsection (d). (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). (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 agen- cies 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)— (A) for assistance from the Capital Fund, the amount determined for the agency under the formula under subsection (d)(2); and (B) for assistance from the Operating Fund, the amount determined for the agency under the formula under subsection (e)(2). (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 Cap- ital 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 Op- erating 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. Page 4653 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g (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 mod- ernization of public housing projects, includ- ing the redesign, reconstruction, and recon- figuration of public housing sites and build- ings (including accessibility improvements) and the development of mixed-finance projects; (B) vacancy reduction; (C) addressing deferred maintenance needs and the replacement of obsolete utility sys- tems and dwelling equipment; (D) planned code compliance; (E) management improvements, including the establishment and initial operation of computer centers in and around public hous- ing through a Neighborhood Networks ini- tiative, for the purpose of enhancing the self-sufficiency, employability, and eco- nomic self-reliance of public housing resi- dents by providing them with onsite com- puter access and training resources; (F) demolition and replacement; (G) resident relocation; (H) capital expenditures to facilitate pro- grams to improve the empowerment and eco- nomic self-sufficiency of public housing resi- dents and to improve resident participation; (I) capital expenditures to improve the se- curity and safety of residents; (J) homeownership activities, including programs under section 1437z–4 of this title; (K) improvement of energy and water-use efficiency by installing fixtures and fittings that conform to the American Society of Mechanical Engineers/American National Standards Institute standards A112.19.2–1998 and A112.18.1–2000, or any revision thereto, applicable at the time of installation, and by increasing energy efficiency and water con- servation by such other means as the Sec- retary determines are appropriate; and (L) integrated utility management and capital planning to maximize energy con- servation and efficiency measures. (2) Formula The Secretary shall develop a formula for determining the amount of assistance pro- vided to public housing agencies from the Cap- ital Fund for a fiscal year, which shall include a mechanism to reward performance. The for- mula 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 char- acteristics of the families served and to be served (including the incomes of the fami- lies); (B) the need of the public housing agency to carry out rehabilitation and moderniza- tion activities, replacement housing, and re- construction, 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 rehabili- tating 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 agen- cy of exemplary performance in the oper- ation of public housing, as indicated by the system of performance indicators estab- lished 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 chap- ter, 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 Responsi- bility Act of 1998, shall be operated under the terms and conditions applicable to pub- lic housing during the 40-year period that be- gins on the date on which the project (or stage of the project) becomes available for occupancy. (B) Modernization Except as otherwise provided in this chap- ter, 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 pub- lic housing during the 20-year period that be- gins on the latest date on which moderniza- tion 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 hous- ing or under the terms and conditions appli- cable 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 op- eration 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 Page 4654 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g 2 See References in Text note below. this title by a public housing agency or resi- dent management corporation to substan- tiate the performance of that agency or cor- poration); (B) activities to ensure a program of rou- tine preventative maintenance; (C) anticrime and antidrug activities, in- cluding the costs of providing adequate secu- rity 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; (J) the costs associated with the operation and management of mixed finance projects, to the extent appropriate; and (K) the costs of operating computer cen- ters in public housing through a Neighbor- hood Networks initiative described in sub- section (d)(1)(E), and of activities related to that initiative. (2) Formula (A) In general The Secretary shall establish a formula for determining the amount of assistance pro- vided to public housing agencies from the Operating Fund for a fiscal year. The for- mula may take into account— (i) standards for the costs of operating and reasonable projections of income, tak- ing 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 ac- cordance with criteria or a formula rep- resenting the operations of a prototype well-managed public housing project; (ii) the number of public housing dwell- ing units owned, assisted, or operated by the public housing agency; (iii) the number of public housing dwell- ing units owned, assisted, or operated by the public housing agency that are chron- ically vacant and the amount of assistance appropriate for those units; (iv) to the extent quantifiable, the ex- tent 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 ac- tivities, including providing adequate se- curity for public housing residents; (vi) the amount of public housing rental income foregone by the public housing agency as a result of escrow savings ac- counts under section 1437u(d)(2) 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 in- come The formula shall provide an incentive to encourage public housing agencies to facili- tate increases in earned income by families in occupancy. Any such incentive shall pro- vide that the agency shall benefit from in- creases in such rental income and that such amounts accruing to the agency pursuant to such benefit may be used only for low-in- come housing or to benefit the residents of the public housing agency. (C) Treatment of savings (i) In general The treatment of utility and waste man- agement costs under the formula shall pro- vide that a public housing agency shall re- ceive 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. (ii) Third party contracts Contracts described in clause (i) may in- clude contracts for equipment conversions to less costly utility sources, projects with resident-paid utilities, and adjustments to frozen base year consumption, including systems repaired to meet applicable build- ing and safety codes and adjustments for occupancy rates increased by rehabilita- tion. (iii) Term of contract The total term of a contract described in clause (i) shall not exceed 20 years to allow longer payback periods for retrofits, in- cluding windows, heating system replace- ments, wall insulation, site-based genera- tion, advanced energy savings tech- nologies, including renewable energy gen- eration, and other such retrofits. (iv) Existing contracts The term of a contract described in clause (i) that, as of December 26, 2007, is in repayment and has a term of not more than 12 years, may be extended to a term of not more than 20 years to permit addi- tional energy conservation improvements without requiring the reprocurement of energy performance contractors. Page 4655 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g (D) Freeze of consumption levels (i) In general A small public housing agency, as de- fined in section 1437z–10(a) of this title, may elect to be paid for its utility and waste management costs under the for- mula for a period, at the discretion of the small public housing agency, of not more than 20 years based on the small public housing agency’s average annual consump- tion during the 3-year period preceding the year in which the election is made (in this subparagraph referred to as the ‘‘consump- tion base level’’). (ii) Initial adjustment in consumption base level The Secretary shall make an initial one- time adjustment in the consumption base level to account for differences in the heating degree day average over the most recent 20-year period compared to the av- erage in the consumption base level. (iii) Adjustments in consumption base level The Secretary shall make adjustments in the consumption base level to account for an increase or reduction in units, a change in fuel source, a change in resident controlled electricity consumption, or for other reasons. (iv) Savings All cost savings resulting from an elec- tion made by a small public housing agen- cy under this subparagraph— (I) shall accrue to the small public housing agency; and (II) may be used for any public housing purpose at the discretion of the small public housing agency. (v) Third parties A small public housing agency making an election under this subparagraph— (I) may use, but shall not be required to use, the services of a third party in its energy conservation program; and (II) shall have the sole discretion to de- termine the source, and terms and condi- tions, of any financing used for its en- ergy conservation program. (3) Condition on use No portion of any public housing project op- erated using amounts provided under this sub- section, or under this section as in effect be- fore the effective date under section 503(a) of the Quality Housing and Work Responsibility Act of 1998, may be disposed of before the expi- ration of the 10-year period beginning upon the conclusion of the fiscal year for which such amounts were provided, except as other- wise provided in this chapter. (f) Negotiated rulemaking procedure The formulas under subsections (d)(2) and (e)(2) 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 in use of funds (A) 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) for as- sistance with amounts from the Operating Fund, but only if the public housing agency plan for the agency provides for such use. (B) Flexibility for Operating Fund amounts Of any amounts appropriated for fiscal year 2016 or any fiscal year thereafter that are allocated for fiscal year 2016 or any fiscal year thereafter from the Operating Fund for any public housing agency, the agency may use not more than 20 percent for activities that are eligible under subsection (d) for as- sistance with amounts from the Capital Fund, but only if the public housing plan under section 1437c–1 of this title 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 op- erates 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 sub- sections (d)(1) and (e)(1), 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 hous- ing 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 de- molished 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 fami- lies in excess of the limitations on new con- struction set forth in subparagraph (A), but the formulas established under subsections (d)(2) and (e)(2) shall not provide additional funding for the specific purpose of allowing construction and operation of housing in ex- cess of those limitations (except to the ex- tent provided in subparagraph (C)). Page 4656 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g (C) Exception regarding formulas Subject to reasonable limitations set by the Secretary, the formulas established under subsections (d)(2) and (e)(2) may pro- vide additional funding for the operation and modernization costs (but not the initial de- velopment 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 ad- vance in appropriations Acts, the Secretary may make grants or enter into contracts or coopera- tive agreements in accordance with this sub- section for purposes of providing, either directly or indirectly— (1) technical assistance to public housing agencies, resident councils, resident organiza- tions, and resident management corporations, including assistance relating to monitoring and inspections; (2) training for public housing agency em- ployees and residents; (3) data collection and analysis; (4) training, technical assistance, and edu- cation 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 designa- tion; (5) contract expertise; (6) training and technical assistance to as- sist in the oversight and management of pub- lic housing or tenant-based assistance; (7) clearinghouse services in furtherance of the goals and activities of this subsection; and (8) assistance in connection with the estab- lishment and operation of computer centers in public housing through a Neighborhood Net- works initiative described in subsection (d)(1)(E). As used in this subsection, the terms ‘‘training’’ and ‘‘technical assistance’’ shall include train- ing or technical assistance and the cost of nec- essary travel for participants in such training or technical assistance, by or to officials and em- ployees 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 pro- gram 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 de- termining the amount of the allocation to the agency under this section until sale by the agen- cy, 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 sub- ject 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 accumu- lates adequate funds to undertake mod- ernization, 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 as- sistance in a timely manner is attributable to— (i) litigation; (ii) obtaining approvals of the Federal Government or a State or local govern- ment; (iii) complying with environmental as- sessment 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 Fed- eral Register; (B) shall disregard the requirements of paragraph (1) with respect to any unobli- gated 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 re- sult 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 unobli- gated in violation of paragraph (1) or (2). Page 4657 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g 3 So in original. (B) Withholding of assistance During any fiscal year described in sub- paragraph (A), the Secretary shall withhold all assistance that would otherwise be pro- vided 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 pro- vided public housing agencies by operation of this paragraph shall be allocated for agen- cies 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 Sec- retary 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 agen- cy for fiscal year 1997 or prior fiscal years shall be fully obligated by the public hous- ing 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 ex- tension approved by the Secretary under paragraph (2)) after the date on which funds become available to the agency for obliga- tion. (B) Enforcement The Secretary shall enforce the require- ment 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. (7) Treatment of replacement reserve The requirements of this subsection shall not apply to funds held in replacement re- serves established pursuant to subsection (n). (k) 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 hous- ing agency. (l) Provision of only capital or operating assist- ance (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 ex- cept as otherwise provided in this subsection. (2) Exemptions In the case of any public housing unit as- sisted pursuant to the authority under para- graph (1), the Secretary may, by regulation, reduce the period under subsection (d)(3) or (e)(3), as applicable, during which such units must be operated under requirements applica- ble to public housing. In cases in which there is commitment of operating assistance but no commitment of capital assistance, the Sec- retary may make section 8 [42 U.S.C. 1437f] re- quirements applicable, as appropriate, by reg- ulation. (m) Treatment of public housing (1) Repealed. Pub. L. 108–7, div. K, title II, § 212(a), Feb. 20, 2003, 117 Stat. 503 (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 pro- vided 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 3 $500,000 per year for the purpose of initiating, expand- ing or continuing a program for the reduction of the incidence of asthma among residents. The Secretary shall consult with the Adminis- trator of the Environmental Protection Agen- cy 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. (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 pro- vided 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 com- prehensive plan to address the need for serv- ices for elderly residents. Such plan may be developed by a partnership created by such Housing Authority and may include the cre- ation of a model project for assisted living at one or more developments. The model project may provide for contracting with private par- ties for the delivery of services. (4) Effective date This subsection shall apply to fiscal year 1999 and each fiscal year thereafter. Page 4658 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g (n) Establishment of replacement reserves (1) In general Public housing agencies shall be permitted to establish a replacement reserve to fund any of the capital activities listed in subsection (d)(1). (2) Source and amount of funds for replace- ment reserve At any time, a public housing agency may deposit funds from such agency’s Capital Fund into a replacement reserve, subject to the fol- lowing: (A) At the discretion of the Secretary, pub- lic housing agencies may transfer and hold in a replacement reserve funds originating from additional sources. (B) No minimum transfer of funds to a re- placement reserve shall be required. (C) At any time, a public housing agency may not hold in a replacement reserve more than the amount the public housing author- ity has determined necessary to satisfy the anticipated capital needs of properties in its portfolio assisted under this section, as out- lined in its Capital Fund 5-Year Action Plan, or a comparable plan, as determined by the Secretary. (D) The Secretary may establish, by regu- lation, a maximum replacement reserve level or levels that are below amounts deter- mined under subparagraph (C), which may be based upon the size of the portfolio assisted under this section or other factors. (3) Transfer of operating funds In first establishing a replacement reserve, the Secretary may allow public housing agen- cies to transfer more than 20 percent of its op- erating funds into its replacement reserve. (4) Expenditure Funds in a replacement reserve may be used for purposes authorized by subsection (d)(1) and contained in its Capital Fund 5-Year Ac- tion Plan. (5) Management and report The Secretary shall establish appropriate accounting and reporting requirements to en- sure that public housing agencies are spending funds on eligible projects and that funds in the replacement reserve are connected to capital needs. (o) Public housing heating guidelines The Secretary shall publish model guidelines for minimum heating requirements for public housing dwelling units operated by public hous- ing agencies receiving assistance under this sec- tion. (Sept. 1, 1937, ch. 896, title I, § 9, as added Pub. L. 93–383, title II, § 201(a), Aug. 22, 1974, 88 Stat. 666; amended Pub. L. 94–375, § 2(c), Aug. 3, 1976, 90 Stat. 1068; Pub. L. 95–24, title I, § 101(b), Apr. 30, 1977, 91 Stat. 55; Pub. L. 95–128, title II, § 201(f), Oct. 12, 1977, 91 Stat. 1129; Pub. L. 95–557, title II, § 206(g), Oct. 31, 1978, 92 Stat. 2093; Pub. L. 96–153, title II, §§ 201(c), 207, 211(a), Dec. 21, 1979, 93 Stat. 1106, 1109, 1110; Pub. L. 96–399, title II, § 201(b), (d), Oct. 8, 1980, 94 Stat. 1625; Pub. L. 97–35, title III, §§ 321(d), 322(c), Aug. 13, 1981, 95 Stat. 399, 402; Pub. L. 98–181, title I [title II, § 212], Nov. 30, 1983, 97 Stat. 1184; Pub. L. 99–272, title III, § 3003, Apr. 7, 1986, 100 Stat. 102; Pub. L. 100–242, title I, §§ 112(b)(4), 118, Feb. 5, 1988, 101 Stat. 1824, 1828; renumbered title I, Pub. L. 100–358, § 5, June 29, 1988, 102 Stat. 681; Pub. L. 101–625, title V, §§ 507, 572(2), title VIII, § 802(p), Nov. 28, 1990, 104 Stat. 4186, 4236, 4317; Pub. L. 102–550, title I, § 114, title VI, § 673, Oct. 28, 1992, 106 Stat. 3691, 3827; Pub. L. 103–233, title III, § 304, Apr. 11, 1994, 108 Stat. 370; Pub. L. 104–134, title I, § 101(e) [title II, § 218], Apr. 26, 1996, 110 Stat. 1321–257, 1321–290; renum- bered title I, Pub. L. 104–140, § 1(a), May 2, 1996, 110 Stat. 1327; Pub. L. 104–330, title V, § 501(b)(5), Oct. 26, 1996, 110 Stat. 4042; Pub. L. 105–276, title II, § 210, title V, § 519(a), Oct. 21, 1998, 112 Stat. 2485, 2551; Pub. L. 106–377, § 1(a)(1) [title II, § 214(a)], Oct. 27, 2000, 114 Stat. 1441, 1441A–27; Pub. L. 108–7, div. K, title II, § 212(a), Feb. 20, 2003, 117 Stat. 503; Pub. L. 109–58, title I, § 151, Aug. 8, 2005, 119 Stat. 648; Pub. L. 110–161, div. K, title II, § 229, Dec. 26, 2007, 121 Stat. 2438; Pub. L. 110–289, div. B, title VIII, § 2804, July 30, 2008, 122 Stat. 2866; Pub. L. 114–201, title I, §§ 109, 111, July 29, 2016, 130 Stat. 801, 803; Pub. L. 115–174, title II, § 209(b), May 24, 2018, 132 Stat. 1315.) Editorial Notes 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 Amend- ment note under section 1437 of this title. Section 519(e) of the Act is set out as a note below. For complete clas- sification 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) and (d)(3)(A), (B), was repealed by Pub. L. 105–276, title V, § 522(a), Oct. 21, 1998, 112 Stat. 2564. Section 1437u(d)(2) of this title, referred to in subsec. (e)(2)(A)(vi), was redesignated section 1437u(e)(2) of this title and substantially rewritten by Pub. L. 115–174, title III, § 306(a)(4), (7)(B), May 24, 2018, 132 Stat. 1340, 1341. 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 sec- tion 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 2018—Subsec. (e)(2)(D). Pub. L. 115–174 added subpar. (D). 2016—Subsec. (g)(1). Pub. L. 114–201, § 109(b), sub- stituted ‘‘Flexibility in use of funds’’ for ‘‘Flexibility for Capital Fund amounts’’ in heading, designated ex- isting provisions as subpar. (A), inserted subpar. head- ing, and added subpar. (B). Subsec. (j)(7). Pub. L. 114–201, § 109(a)(1), added par. (7). Subsec. (n). Pub. L. 114–201, § 109(a)(2), added subsec. (n). Subsec. (o). Pub. L. 114–201, § 111, added subsec. (o). 2008—Subsecs. (k) to (n). Pub. L. 110–289 redesignated subsecs. (l) to (n) as (k) to (m), respectively, and struck out former subsec. (k), which related to emergency re- serve and use of amounts. 2007—Subsec. (e)(2)(C)(iv). Pub. L. 110–161 added cl. (iv). 2005—Subsec. (d)(1)(K), (L). Pub. L. 109–58, § 151(1), added subpars. (K) and (L). Page 4659 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g Subsec. (e)(2)(C). Pub. L. 109–58, § 151(2), designated ex- isting provisions as cl. (i), inserted heading, and added cls. (ii) and (iii). 2003—Subsec. (n)(1). Pub. L. 108–7 struck out par. (1) which related to treatment of certain covered locally developed public housing units as eligible public hous- ing units. 2000—Subsec. (d)(1)(E). Pub. L. 106–377, § 1(a)(1) [title II, § 214(a)(1)], inserted before semicolon ‘‘, including the establishment and initial operation of computer centers in and around public housing through a Neigh- borhood Networks initiative, for the purpose of enhanc- ing the self-sufficiency, employability, and economic self-reliance of public housing residents by providing them with onsite computer access and training re- sources’’. Subsec. (e)(1)(K). Pub. L. 106–377, § 1(a)(1) [title II, § 214(a)(2)], added subpar. (K). Subsec. (h)(8). Pub. L. 106–377, § 1(a)(1) [title II, § 214(a)(3)], added par. (8). 1998—Pub. L. 105–276, § 519(a), amended section gen- erally, substituting present provisions for provisions which had: in subsec. (a), authorized annual contribu- tions for operation of low-income housing, and provided for determination of the amounts and use of those con- tributions, contract authorization, standards for pay- ments, necessity of contribution contracts, perform- ance 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 hous- ing agency. Subsec. (a)(3)(A). Pub. L. 105–276, § 210, inserted after third sentence ‘‘Notwithstanding the preceding sen- tences, the Secretary may revise the performance fund- ing system in a manner that takes into account equity among public housing agencies and that includes appro- priate 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 sen- tence, 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 op- erating costs contributions approved by the Secretary under this section) as determined by the Secretary to be required to cover the administrative costs to an In- dian 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, § 673, des- ignated existing provisions as cl. (i), redesignated former cls. (i) and (ii) as subcls. (I) and (II), respec- tively, substituted ‘‘this clause’’ for ‘‘this subpara- graph’’, 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 Rule- making 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 Sec- retary shall establish a negotiated rulemaking com- mittee for development of any such proposed regula- tions.’’ 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), sub- stituted ‘‘low-income housing’’ for ‘‘lower income hous- ing’’ wherever appearing. Pub. L. 101–625, § 507(b)(1), designated existing provi- sions 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 para- graph (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 projec- tions of income, for purposes of making payments under this section. Pub. L. 100–242, § 118(d), inserted at end ‘‘If the Sec- retary determines that a public housing agency has failed to take the actions required to submit an accept- able 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 Sec- retary may withhold, from assistance otherwise pay- able to the agency under this section, amounts suffi- cient to pay for the reasonable costs of conducting an acceptable audit, including, when appropriate, the rea- sonable 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 ap- propriations 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 ap- propriations 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 ref- erence to lower income for reference to low-income. Page 4660 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g 1980—Subsec. (a)(1)(C). Pub. L. 96–399, § 201(d), added cl. (C). Subsec. (c). Pub. L. 96–399, § 201(b), authorized appro- priation 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 pe- riod 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 appro- priation 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 appropria- tion 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 ex- ceed $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 in- creased by $60,000,000 on July 1, 1975. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115–174, title II, § 209(d), May 24, 2018, 132 Stat. 1316, provided that: ‘‘The amendments made by sub- sections (a) and (b) [enacting section 1437z–10 of this title and amending this section] shall take effect on the date that is 60 days after the date of enactment of this Act [May 24, 2018].’’ EFFECTIVE DATE OF 2003 AMENDMENT Pub. L. 108–7, div. K, title II, § 212(c), Feb. 20, 2003, 117 Stat. 504, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall be deemed to have taken effect on October 1, 1998.’’ EFFECTIVE DATE OF 1998 AMENDMENT Amendment by title V of Pub. L. 105–276 effective and applicable beginning upon Oct. 1, 1999, except as other- wise provided, with provision that Secretary may im- plement amendment before such date, except to extent that such amendment provides otherwise, and with sav- ings 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, § 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 sub- section (a) of this section), the Secretary shall pro- vide 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 Ta- bles 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 rent- al amount that is based on a ceiling rent estab- lished 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 result- ing from the use of that rental amount in calcu- lating 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 rent- al amount that is based on an adjustment to in- come 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 rent- al amount in calculating the contributions for the public housing agency for the operation of the pub- lic 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 rent- al amount other than as provided under subpara- graph (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 Hous- ing Act of 1937 [42 U.S.C. 1437a(a)(1)(A), (B), (C)], the Secretary shall not take into account any reduc- tion 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.—Not- withstanding the effective date under section 503(a) [42 U.S.C. 1437 note], the Secretary may extend the effec- tive 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 imple- ment 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 [§§ 621–685] of Pub. L. 102–550 applicable upon expiration of 6-month period beginning Oct. 28, 1992, except as oth- erwise 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. Page 4661 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437g EFFECTIVE DATE Section effective on such date or dates as the Sec- retary of Housing and Urban Development shall pre- scribe, 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. REGULATIONS Pub. L. 108–199, div. G, title II, § 222, Jan. 23, 2004, 118 Stat. 398, provided that: ‘‘The Secretary of Housing and Urban Development shall conduct negotiated rule- making with representatives from interested parties for purposes of any changes to the formula governing the Public Housing Operating Fund. A final rule shall be issued no later than July 1, 2004.’’ Pub. L. 108–7, div. K, title II, Feb. 20, 2003, 117 Stat. 487, provided in part: ‘‘That the Secretary shall issue final regulations to carry out section 9(j) of the United States Housing Act of 1937 (42 U.S.C. 1437g(j)), not later than August 1, 2003’’. CAPITAL FUNDS FOR CENTRAL OFFICE COSTS Pub. L. 118–42, div. F, title II, § 214, Mar. 9, 2024, 138 Stat. 377, provided that: ‘‘With respect to the use of amounts provided in this Act [meaning title II of div. F of Pub. L. 118–42, 138 Stat. 344, see Tables for classi- fication] and in future Acts for the operation, capital improvement, and management of public housing as authorized by sections 9(d) and 9(e) of the United States Housing Act of 1937 (42 U.S.C. 1437g(d), (e)), the Sec- retary [of Housing and Urban Development] shall not impose any requirement or guideline relating to asset management that restricts or limits in any way the use of capital funds for central office costs pursuant to paragraph (1) or (2) of section 9(g) of the United States Housing Act of 1937 (42 U.S.C. 1437g(g)(1), (2)): Provided, That a public housing agency may not use capital funds authorized under section 9(d) for activities that are eli- gible under section 9(e) for assistance with amounts from the operating fund in excess of the amounts per- mitted under paragraph (1) or (2) of section 9(g).’’ Similar provisions were contained in the following appropriation acts: Pub. L. 117–328, div. L, title II, § 214, Dec. 29, 2022, 136 Stat. 5174. Pub. L. 117–103, div. L, title II, § 214, Mar. 15, 2022, 136 Stat. 758. Pub. L. 116–260, div. L, title II, § 214, Dec. 27, 2020, 134 Stat. 1896. Pub. L. 116–94, div. H, title II, § 214, Dec. 20, 2019, 133 Stat. 3004. Pub. L. 116–6, div. G, title II, § 216, Feb. 15, 2019, 133 Stat. 460. Pub. L. 115–141, div. L, title II, § 217, Mar. 23, 2018, 132 Stat. 1033. Pub. L. 115–31, div. K, title II, § 218, May 5, 2017, 131 Stat. 784. Pub. L. 114–113, div. L, title II, § 219, Dec. 18, 2015, 129 Stat. 2893. Pub. L. 113–235, div. K, title II, § 219, Dec. 16, 2014, 128 Stat. 2753. Pub. L. 113–76, div. L, title II, § 223, Jan. 17, 2014, 128 Stat. 631. Pub. L. 112–55, div. C, title II, § 224, Nov. 18, 2011, 125 Stat. 700. Pub. L. 111–117, div. A, title II, § 224, Dec. 16, 2009, 123 Stat. 3102. Pub. L. 111–8, div. I, title II, § 226, Mar. 11, 2009, 123 Stat. 977. Pub. L. 110–161, div. K, title II, § 226, Dec. 26, 2007, 121 Stat. 2437. PAYMENTS FOR COSTS OF OPERATION AND MANAGEMENT OF PUBLIC HOUSING PROHIBITED Pub. L. 108–447, div. I, title II, Dec. 8, 2004, 118 Stat. 3298, provided in part: ‘‘That for fiscal year 2006 and all fiscal years thereafter, the Secretary shall provide as- sistance under this heading [PUBLIC HOUSING OPER- ATING FUND] to public housing agencies on a calendar year basis: Provided further, That, in fiscal year 2005 and all fiscal years hereafter, no amounts under this head- ing in any appropriations Act may be used for pay- ments to public housing agencies for the costs of oper- ation and management of public housing for any year prior to the current year of such Act’’. Similar provisions were contained in the following appropriation acts: Pub. L. 111–117, div. A, title II, Dec. 16, 2009, 123 Stat. 3080. Pub. L. 111–8, div. I, title II, Mar. 11, 2009, 123 Stat. 956. Pub. L. 110–161, div. K, title II, Dec. 26, 2007, 121 Stat. 2417. Pub. L. 109–115, div. A, title III, Nov. 30, 2005, 119 Stat. 2444. Pub. L. 108–199, div. G, title II, Jan. 23, 2004, 118 Stat. 375. Pub. L. 108–7, div. K, title II, Feb. 20, 2003, 117 Stat. 488. FUNDING OF COVERED LOCALLY DEVELOPED PUBLIC HOUSING UNITS PROHIBITED Pub. L. 108–7, div. K, title II, § 207, Feb. 20, 2003, 117 Stat. 502, provided that: ‘‘Notwithstanding any other provision of law, no funds in this Act or in any other Act in any fiscal year, including all future and prior fiscal years, may be used hereafter by the Secretary of Housing and Urban Development to provide any assist- ance or other funds for housing units defined in section 9(n) [now 9(m)] of the United States Housing Act of 1937 [42 U.S.C. 1437g(m)] (as in effect immediately before the enactment of this Act [Feb. 20, 2003]) as ‘covered locally developed public housing units’. The States of New York and Massachusetts shall reimburse any funds al- ready made available under any appropriations Act for these units to the Secretary of Housing and Urban De- velopment for reallocation to public housing agencies: Provided, That, if either State fails to make such reim- bursement within 12 months, the Secretary shall recap- ture such funds through reductions from the amounts allocated to each State under section 106 of the Hous- ing and Community Development Act of 1974 [42 U.S.C. 5306].’’ APPLICABILITY OF PENALTIES FOR SLOW EXPENDITURE OF CAPITAL FUNDS Pub. L. 107–73, title II, Nov. 26, 2001, 115 Stat. 660, pro- vided in part: ‘‘That, hereafter, notwithstanding any other provision of law or any failure of the Secretary of Housing and Urban Development to issue regulations to carry out section 9(j) of the United States Housing Act of 1937 (42 U.S.C. 1437g(j)), such section is deemed to have taken effect on October 1, 1998, and, except as otherwise provided in this heading [‘‘PUBLIC HOUSING CAPITAL FUND (INCLUDING TRANSFER OF FUNDS)’’], shall apply to all assistance made available under this same heading on or after such date’’. COOLING DEGREE DAY ADJUSTMENT UNDER PERFORMANCE FUNDING SYSTEM Pub. L. 101–625, title V, § 508, Nov. 28, 1990, 104 Stat. 4187, 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 Pub. L. 101–625, title V, § 523, Nov. 28, 1990, 104 Stat. 4215, which directed Secretary of Housing and Urban Development to carry out demonstration program to encourage use of private energy service companies and Page 4662 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1437h demonstrate opportunities for energy cost reduction through energy services contracts, and to report find- ings and recommendations to Congress as soon as prac- ticable after expiration of 1-year period beginning on Nov. 28, 1990, was repealed by Pub. L. 105–276, title V, § 582(a)(11), Oct. 21, 1998, 112 Stat. 2644. § 1437h. Implementation of provisions by Sec- retary (a) Preparation and submission of annual budget program; maintenance of accounts; audit by Government Accountability Office In the performance of, and with respect to, the functions, powers, and duties vested in him by this chapter, the Secretary, notwithstanding the provisions of any other law, shall— (1) prepare annually and submit a budget program as provided for wholly owned Govern- ment corporations by chapter 91 of title 31; and (2) maintain an integral set of accounts which may be audited by the Government Ac- countability Office as provided by chapter 91 of title 31. (b) Availability of receipts and assets All receipts and assets of the Secretary under this chapter shall be available for the purposes of this chapter until expended. (c) Federal Reserve banks to act as depositories, custodians and fiscal agents; reimbursement for services The Federal Reserve banks are authorized and directed to act as depositories, custodians, and fiscal agents for the Secretary in the general ex- ercise of his powers under this chapter, and the Secretary may reimburse any such bank for its services in such manner as may be agreed upon. (Sept. 1, 1937, ch. 896, title I, § 10, as added Pub. L. 93–383, title II, § 201(a), Aug. 22, 1974, 88 Stat. 666; amended Pub. L. 98–479, title II, § 203(b)(2), Oct. 17, 1984, 98 Stat. 2229; renumbered title I, Pub. L. 100–358, § 5, June 29, 1988, 102 Stat. 681; Pub. L. 104–316, title I, § 122(k), Oct. 19, 1996, 110 Stat. 3837; Pub. L. 108–271, § 8(b), July 7, 2004, 118 Stat. 814.) Editorial Notes PRIOR PROVISIONS A prior section 10 of act Sept. 1, 1937, ch. 896, 50 Stat. 891, as amended, authorized annual contributions in as- sistance of low rentals for housing projects and was classified to section 1410 of this title, prior to the gen- eral revision of this chapter by Pub. L. 93–383. Similar provisions are contained in section 1437c of this title. AMENDMENTS 2004—Subsec. (a)(2). Pub. L. 108–271 substituted ‘‘Gov- ernment Accountability Office’’ for ‘‘General Account- ing Office’’. 1996—Subsec. (a)(2). Pub. L. 104–316 substituted ‘‘maintain an integral set of accounts which may be au- dited by the General Accounting Office as provided by chapter 91 of title 31.’’ for ‘‘maintain an integral set of accounts which shall be audited annually by the Gen- eral Accounting Office in accordance with the prin- ciples and procedures applicable to commercial trans- actions as provided by chapter 91 of title 31, and no other audit shall be required.’’ 1984—Subsec. (a)(1), (2). Pub. L. 98–479 substituted ‘‘chapter 91 of title 31’’ for ‘‘the Government Corpora- tions Control Act, as amended’’. § 1437i. Obligations of public housing agencies; contestability; full faith and credit of United States pledged as security; tax exemption (a) Obligations issued by a public housing agency in connection with low-income housing projects which (1) are secured (A) by a pledge of a loan under any agreement between such public housing agency and the Secretary, or (B) by a pledge of annual contributions under an annual contributions contract between such public housing agency and the Secretary, or (C) by a pledge of both annual contributions under an an- nual contributions contract and a loan under an agreement between such public housing agency and the Secretary, and (2) bear, or are accom- panied by, a certificate of the Secretary that such obligations are so secured, shall be incon- testable in the hands of a bearer and the full faith and credit of the United States is pledged to the payment of all amounts agreed to be paid by the Secretary as security for such obliga- tions. (b) Except as provided in section 1437c(g) of this title, obligations, including interest there- on, issued by public housing agencies in connec- tion with low-income housing projects shall be exempt from all taxation now or hereafter im- posed by the United States whether paid by such agencies or by the Secretary. The income de- rived by such agencies from such projects shall be exempt from all taxation now or hereafter imposed by the United States. (Sept. 1, 1937, ch. 896, title I, § 11, as added Pub. L. 93–383, title II, § 201(a), Aug. 22, 1974, 88 Stat. 667; amended Pub. L. 97–35, title III, § 322(c), Aug. 13, 1981, 95 Stat. 402; renumbered title I, Pub. L. 100–358, § 5, June 29, 1988, 102 Stat. 681; Pub. L. 101–625, title V, § 572(2), Nov. 28, 1990, 104 Stat. 4236.) Editorial Notes PRIOR PROVISIONS A prior section 11 of act Sept. 1, 1937, ch. 896, 50 Stat. 893, as amended, authorized capital grants to public housing agencies in assistance of low rentals and was classified to section 1411 of this title, prior to the gen- eral revision of this chapter by Pub. L. 93–383. AMENDMENTS 1990—Pub. L. 101–625 substituted ‘‘low-income hous- ing’’ for ‘‘lower income housing’’ wherever appearing. 1981—Pub. L. 97–35 substituted reference to lower in- come for reference to low-income wherever appearing. Statutory Notes and Related Subsidiaries 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. § 1437j. Labor standards and community service requirement (a) Payment of wages prevailing in locality Any contract for loans, contributions, sale, or lease pursuant to this chapter shall contain a provision requiring that not less than the wages prevailing in the locality, as determined or adopted (subsequent to a determination under applicable State or local law) by the Secretary,