,,ii  #aac? ,,congress  #a/ ,session    
,s4 #egf  ,,9 ,,! ,,s5ate ,,( ,,!       
,,unit$ ,,/ates  ,m>* #ad1 #bjac ,mr4   
,johanns 7= himself & ,mr4 ,te/]7       
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,bank+1 ,h\s+1 & ,urban ,affairs  ,a    
,,bill  ,to re=m laws relat+ to small   
public h\s+ ag5cies1 & = o!r purposes4  
#a4 ,%ort title ,?is ,act may be cit$ z 
! ,small ,public ,h\s+ ,ag5cy           
,opportunity ,act ( #bjac4  #b4 ,f9d+s &
 purpose  7a7 ,f9d+s ,congress f9ds !   
foll[+3  7#a7 ,al?\gh small public h\s+ 
ag5cies are num]\s1 !y adm9i/] only a   
small fraction ( ! f9ancial res\rces    
provid$ "u ! ,f$]al h\s+ programs4  7#b7
 ,! ov]sight ( small public h\s+ ag5cies
 by ! ,dep>tm5t ( ,h\s+ & ,urban        
,developm5t is disproportionate to !    
f9ancial risk ! op]ations ( ^! ag5cies  
pose to ! ,f$]al ,gov]nm5t4  7#c7 ,small
 public h\s+ ag5cies p]=m bett] ?an l>g]
 ag5cies1 z public h\s+ ag5cy p]=mance  
is pres5tly measur$ by ! ,f$]al         

,gov]nm5t4  7#d7 ,! ,dep>tm5t ( ,h\s+ & 
,urban ,developm5t %\ld deploy its      
adm9i/rative ov]sight res\rces 9 a mann]
 t reflects relative risk to ! ,f$]al   
,gov]nm5t4  7#e7 ,regulatory &          
adm9i/rative burd5s t may be reasonable 
= l>g] public h\s+ ag5cies may n be s = 
small] public h\s+ ag5cies ) m limit$   
res\rces4  7#f7 ,elim9at+ unnecess>y or 
unreasonable regulatory & adm9i/rative  
burd5s w improve ! effectiv5ess ( small 
public h\s+ ag5cies z provid]s ( h\s+   
assi/ance to l[-income families4  7#g7  
,small public h\s+ ag5cies & _! resid5ts
 w\ld b5efit f1 & small public h\s+     
ag5cies %\ld be af=d$1 maximum          
flexibility 9 ! use ( _! res\rces4  7#h7
 ,congress & ! ,dep>tm5t ( ,h\s+ &      
,urban ,developm5t %\ld r$uce           
adm9i/rative & regulatory burd5s on     
small public h\s+ ag5cies4  7#i7 ,public
 h\s+ revitalization fund+ has be5      
l>gely unavailable to small public h\s+ 
ag5cies4  7#aj7 ,congress %\ld e/abli% a
 program ( assi/ance to enable public   

h\s+ revitalization activities by small 
public h\s+ ag5cies4  7#aa7 ,small      
public h\s+ ag5cies & _! resid5ts w\ld  
b5efit f conv]sion ( _! public h\s+     
projects to projects assi/$ )           
project-bas$ section #h r5tal assi/ance4
  7b7 ,purposes ,! purposes ( ?is ,act  
are--  7#a7 to assure ! long-t]m        
viability & effectiv5ess ( ! small      
public h\s+ ag5cies & ! h\s+ assi/ance  
programs !y op]ate2  7#b7 to ensure t   
small public h\s+ ag5cies are n subject 
to unnecess>y ,f$]al regulatory control 
& adm9i/rative requirem5ts2  7#c7 to    
af=d flexibility to small public h\s+   
ag5cies 9 ! use ( _! res\rces2  7#d7 to 
adju/ ,f$]al ov]sight requirem5ts =     
small public h\s+ ag5cies to bett]      
reflect f9ancial risk to ! ,f$]al       
,gov]nm5t & ! relative res\rces ( su*   
ag5cies2  7#e7 to explore innovative    
approa*es to simplify+ det]m9ation (    
income & t5ant r5ts2 &  7#f7 to ensure t
 small public h\s+ ag5cies h access to !
 res\rces necess>y = ! mod]nization &   

revitalization ( _! public h\s+ /ock4   
#c4 ,small public h\s+ ag5cies  7a7 ,9  
g5]al ,title ,i ( ! ,unit$ ,/ates ,h\s+ 
,act ( #aicg 7#db ,u4,s4,c4 #adcg et    
seq47 is am5d$ by add+ at ! end !       
foll[+3  #cg4 ,small public h\s+ ag5cies
  7a7 ,def9itions ,9 ?is section1 !     
foll[+ def9itions %all apply3  7#a7     
,h\s+ v\*] program ,! t]m h\s+ v\*]     
program means a program = t5ant-bas$    
assi/ance "u section #h4  7#b7 ,small   
public h\s+ ag5cy  7,a7 ,9 g5]al ,! t]m 
small public h\s+ ag5cy means a public  
h\s+ ag5cy = :i* ! sum ( ! numb] (      
public h\s+ dwell+ units adm9i/]$ by !  
ag5cy & ! numb] ( v\*]s "u section #h7o7
 adm9i/]$ by ! ag5cy is #eej or few]4   
7,b7 ,transition ,a public h\s+ ag5cy t 
qualifies z an eligible small public    
h\s+ ag5cy b subsequ5tly fails to meet !
 qualification crit]ion 9 subsection 7a7
 %all rema9 an eligible small public    
h\s+ ag5cy = #c additional ye>s to      
provide = a transition to noneligible   
/atus 9 ord] to avoid disruption 9 !    

plans & projects und]tak5 by ! ag5cy4   
7#c7 ,tr\bl$ small public h\s+ ag5cy ,! 
t]m tr\bl$ small public h\s+ ag5cy means
 a small public h\s+ ag5cy designat$ by 
! ,secret>y z a tr\bl$ small public h\s+
 ag5cy "u subsection 7c77#d74  7b7      
,applicability ,except z o!rwise provid$
 9 ?is section1 a small public h\s+     
ag5cy %all be subject to ! same         
requirem5ts z a public h\s+ ag5cy4  7c7 
,program inspections & evaluations  7#a7
 ,public h\s+ projects  7,a7 ,physical  
inspections  7i7 ,frequ5cy  7,i7        
,inspection by ! ,secret>y ,! ,secret>y 
%all c>ry out an inspection ( ! physical
 condition ( a small public h\s+ ag5cy's
 public h\s+ projects n m frequ5tly ?an 
once e #c ye>s1 unless ! ag5cy has be5  
designat$ by ! ,secret>y z tr\bl$ small 
public h\s+ ag5cy bas$ on defici5cies 9 
! physical condition ( its public h\s+  
projects4  7,,ii7 ,inspection by ag5cies
 ,a small public h\s+ ag5cy %all n be   
subject to section #f7;f77#c71 & !      
,secret>y may n o!rwise require ! small 

public h\s+ ag5cy to inspect its public 
h\s+ units4  7ii7 ,/&>ds ,! ,secret>y   
%all apply to small public h\s+ ag5cies 
! same /&>ds = ! acceptable condition ( 
public h\s+ projects t apply to projects
 assi/$ "u section #h4  7,b7 ,f9ancial  
condition ,! ,secret>y %all det]m9e !   
f9ancial condition ( a small public h\s+
 ag5cy's public h\s+ program solely on !
 basis ( ! ratio ( curr5t assets to     
curr5t liabilities4 ,a ratio ( at lea/  
#a %all result 9 a det]m9ation t !      
f9ancial condition ( a small public h\s+
 ag5cy is acceptable4  7,c7 ,managem5t  
condition  7i7 ,det]m9ation  7,i7 ,9    
g5]al ,except z provid$ 9 clause 7ii71 !
 ,secret>y %all det]m9e ! managem5t     
condition ( a small public h\s+ ag5cy's 
public h\s+ program solely on ! basis ( 
! ratio ( vacant unit mon?s to eligible 
unit mon?s4  7,,ii7 ,ratio ,except z    
provid$ 9 subclause 7,,iii71 a ratio ( n
 m ?an #aj p]c5t %all result 9 a        
det]m9ation t ! managem5t condition ( a 
small public h\s+ ag5cy is acceptable4  

7,,iii7 ,exception ,9 det]m9+ !         
managem5t condition ( a program or      
project ( a small public h\s+ ag5cy ) an
 extremely l[ numb] ( public h\s+ units1
 ! ,secret>y may apply a ratio or /&>d t
 is diff]5t ?an ! /&>d "u ?is           
subp>agraph4  7ii7 ,*ang+ m>ket         
conditions ,9 det]m9+ ! managem5t       
condition ( a small public h\s+ ag5cy's 
public h\s+ program1 ! ,secret>y %all   
take into consid]ation a demon/ration by
 ! small public h\s+ ag5cy t its        
inability to lease an adequate numb] (  
units is a result ( *anges 9 m>ket      
conditions4  7#b7 ,h\s+ v\*] program    
7,a7 ,physical inspection ( assi/$ units
 ,a small public h\s+ ag5cy adm9i/]+    
assi/ance "u section #h7o7 %all make    
p]iodic physical inspections ( ea*      
assi/$ dwell+ unit n less frequ5tly ?an 
once e #c ye>s1 to det]m9e :e!r ! unit  
is ma9ta9$ 9 accordance ) ! requirem5ts 
"u section #h7o77#h77;,a74  7,b7        
,managem5t assessm5t ,! ,secret>y %all  
evaluate ! managem5t ( a v\*] program ( 

a small public h\s+ ag5cy solely on !   
basis ( ! lease-up rate or ! budget     
utilization rate ( ! small public h\s+  
ag5cy4 ,a lease-up rate or budget       
utilization rate ( at lea/ #ij p]c5t    
%all result 9 a det]m9ation t !         
managem5t ( ! v\*] program is           
acceptable4  7#c7 ,high-p]=m+ ag5cies ,!
 ,secret>y %all designate a small public
 h\s+ ag5cy z a high-p]=m+ ag5cy if !   
,secret>y det]m9es t ! small public h\s+
 ag5cy exce$s ! crit]ia = acceptability 
e/abli%$ "u p>agraphs 7#a7 & 7#b7 by an 
ext5t e/abli%$ by ! ,secret>y1 by rule4 
7#d7 ,tr\bl$ small public h\s+ ag5cies  
7,a7 ,public h\s+ program ,not)/&+ any  
o!r provision ( law1 ! ,secret>y may    
designate a small public h\s+ ag5cy z a 
tr\bl$ small public h\s+ ag5cy ) respect
 to ! public h\s+ program ( ! small     
public h\s+ ag5cy only if ! ,secret>y   
det]m9es t ! ag5cy--  7i7 has fail$--   
7,i7 to ma9ta9 its public h\s+ units 9 a
 satisfactory physical condition1 bas$  
^u an inspection conduct$ by !          

,secret>y2 &  7,,ii7 to correct         
defici5cies be=e ! date t is #ij days   
aft] ! date on :i* ! ,secret>y v]ifies !
 inspection results2  7ii7 does n h at !
 end ( its fiscal ye> an acceptable     
ratio ( curr5t assets to curr5t         
liabilities1 z det]m9$ "u p>agraph      
7#a77;,b72  7iii7 has fail$ to ma9ta9 an
 acceptable av]age ratio ( vacant unit  
mon?s to eligible unit mon?s dur+ any   
cal5d> ye>1 z det]m9$ "u p>agraph       
7#a77;,c71 & t ! failure is n ! result (
 *anges 9 m>ket conditions2 or  7iv7 has
 fail$ to acc\nt = its rev5ues &        
exp5ses1 misappropriat$ ,f$]al funds1 or
 o!rwise fail$ to comply ) applicable   
,f$]al law4  7,b7 ,h\s+ v\*] program    
,not)/&+ any o!r provision ( law1 !     
,secret>y may designate a small public  
h\s+ ag5cy z a tr\bl$ small public h\s+ 
ag5cy ) respect to ! h\s+ v\*] program (
 ! small public h\s+ ag5cy only if !    
,secret>y det]m9es t ! ag5cy--  7i7 has 
fail$ to comply ) ! inspection          
requirem5ts "u p>agraph 7#b77;,a72  7ii7

 dur+ ! cal5d> ye> has fail$ to ma9ta9  
an acceptable lease-up rate or budget   
utilization rate1 z det]m9$ "u p>agraph 
7#b77;,b72 or  7iii7 has fail$ to acc\nt
 = its rev5ues & exp5ses1 misappropriat$
 ,f$]al funds1 or o!rwise fail$ to      
comply ) applicable ,f$]al law4  7,c7   
,appeals  7i7 ,e/abli%m5t ,! ,secret>y  
%all e/abli% an appeals process "u :i* a
 small public h\s+ ag5cy may dispute a  
det]m9ation ( defici5cy4  7ii7 ,(ficial 
,! appeals process e/abli%$ "u clause   
7i7 %all provide = a decision by an     
(ficial :o has n be5 involv$1 & is n    
subord9ate to a p]son :o has be5        
involv$1 9 ! orig9al det]m9ation (      
defici5cy4  7,d7 ,corrective action     
agreem5t  7i7 ,agreem5t requir$ ,n lat] 
?an #fj days aft] ! date on :i* a small 
public h\s+ ag5cy is designat$ z a      
tr\bl$ public h\s+ ag5cy1 ! ,secret>y & 
! small public h\s+ ag5cy %all ent] 9 to
 a corrective action agreem5t "u :i* !  
small public h\s+ ag5cy %all und]take   
actions to correct ! defici5cies ^u :i* 

! designation is bas$4  7ii7 ,t]ms (    
agreem5t ,a corrective action agreem5t  
ent]$ into "u clause 7i7 %all--  7,i7 h 
a t]m ( #a ye>1 & %all be r5ewable at ! 
option ( ! ,secret>y2  7,,ii7 provide1  
:]e feasible1 = te*nical assi/ance to   
assi/ ! public h\s+ ag5cy 9 cur+ its    
defici5cies2  7,,iii7 provide =--  7aa7 
reconsid]ation ( ! designation ( ! small
 public h\s+ ag5cy z a tr\bl$ small     
public h\s+ ag5cy n less frequ5tly ?an  
annually2 &  7bb7 t]m9ation ( ! agreem5t
 :5 ! ,secret>y det]m9es t ! small      
public h\s+ ag5cy is no long] a tr\bl$  
small public h\s+ ag5cy2 &  7,,iv7      
provide t 9 ! ev5t ( sub/antial         
noncompliance by ! small public h\s+    
ag5cy "u ! agreem5t1 ! ,secret>y may--  
7aa7 contract ) ano!r public h\s+ ag5cy 
or a private entity to manage ! public  
h\s+ ( ! tr\bl$ small public h\s+ ag5cy2
  7bb7 )hold funds o!rwise di/ributable 
to ! tr\bl$ small public h\s+ ag5cy2    
7cc7 assume possession (1 & direct      
responsibility =1 manag+ ! public h\s+ (

 ! tr\ble small public h\s+ ag5cy2  7dd7
 petition = ! appo9tm5t ( a receiv]1 9  
accordance ) section                    
#f7;j77#c77;,a77ii72 &  7ee7 ex]cise any
 o!r rem$y available to ! ,secret>y 9 ! 
ev5t ( default "u ! public h\s+ annual  
contributions contract ent]$ into by !  
small public h\s+ ag5cy "u section #e4  
7,e7 ,em]g5cy actions ,no?+ 9 ?is       
p>agraph may be con/ru$ to prohibit !   
,secret>y f tak+ any em]g5cy action     
necess>y to protect ,f$]al f9ancial     
res\rces or ! heal? or safety ( resid5ts
 ( public h\s+ projects4  7d7 ,r$uction 
( adm9i/rative burd5s  7#a7 ,reports    
7,a7 ,comp>ability ) section #h         
requirem5ts ,not)/&+ any o!r provision (
 law1 & except z o!rwise provid$ 9 ?is  
section1 ! ,secret>y may n require a    
small public h\s+ ag5cy to submit any   
report1 plan1 or o!r in=mation ) respect
 to ! public h\s+ units1 projects1 or   
programs ( ! small public h\s+ ag5cy if 
! report1 plan1 or o!r in=mation is n   
requir$ to be submitt$ by ! own] ( a    

project assi/$ "u section #h t is cov]$ 
by a mortgage insur$ by ! ,secret>y4    
7,b7 ,exception = designat$ h\s+ =      
eld]ly & disabl$ families ,a small      
public h\s+ ag5cy %all submit to !      
,secret>y ! plan requir$ by section #g 9
 ord] to designate occupancy 9 public   
h\s+ units 9 accordance ) section #g4   
7,c7 ,compliance ,= purposes ( det]m9+ !
 b5efits or fund+ available to a small  
public h\s+ ag5cy1 ! small public h\s+  
ag5cy %all be deem$ to be 9 compliance )
 a requirem5t "u ,f$]al law to submit a 
report1 plan1 or o!r in=mation ) respect
 to ! public h\s+ units1 projects1 or   
programs ( ! small public h\s+ ag5cy if 
! small public h\s+ ag5cy submits !     
reports1 plans1 or o!r in=mation requir$
 "u subp>agraphs 7,a7 & 7,b74  7#b7     
,community s]vice  7,a7 ,9 g5]al        
,not)/&+ any o!r provision ( law1 a     
small public h\s+ ag5cy may elect to    
comply ) ! requirem5ts "u section       
#ab7;c77#c7 ?r\gh ! use ( t5ant         
c]tifications4  7,b7 ,monitor+ (        

compliance ,! ,secret>y may n impose any
 adm9i/rative burd5 or requirem5t )     
respect to ! monitor+ ( compliance )    
section #ab7;c7 on a small public h\s+  
ag5cy t has made an election "u         
subp>agraph 7,a71 except a requirem5t to
 obta9 t5ant c]tifications & make !     
t5ant c]tifications available to !      
,secret>y4 ,= purposes ( ?is            
subp>agraph1 ! t]m adm9i/rative burd5 or
 requirem5t includes a requirem5t to    
review or v]ify in=mation conta9$ 9 a   
t5ant c]tification4  7,c7 ,det]m9ation (
 noncompliance ,a small public h\s+     
ag5cy may n make an election "u         
subp>agraph 7,a7 if ! ,secret>y det]m9es
 t !re is sub/antial noncompliance by ! 
t5ants at ! small public h\s+ ag5cy ) ! 
requirem5ts ( section #ab7;c74  7#c7    
,economic opportunity ,section #c ( !   
,h\s+ & ,urban ,developm5t ,act ( #aifh 
7#ab ,u4,s4,c4 #agjau7 %all apply to a  
small public h\s+ ag5cy only to ! ext5t 
t su* section #c applies to ! own] ( a  
project assi/$ "u section #h ( ?is ,act4

  7#d7 ,asset managem5t ,at ! reque/ ( a
 small public h\s+ ag5cy or a public    
h\s+ ag5cy t adm9i/]s n m ?an #djj      
public h\s+ dwell+ units1 ! ,secret>y   
%all exempt ! small public h\s+ ag5cy or
 public h\s+ ag5cy f any asset managem5t
 requirem5t o!rwise impos$ by !         
,secret>y on public h\s+ ag5cies4  7#e7 
,environm5tal reviews  7,a7 ,exemption  
,not)/&+ any o!r provision ( law1 a     
small public h\s+ ag5cy %all be exempt f
 any environm5tal review requirem5ts )  
respect to a developm5t or mod]nization 
project hav+ a total co/ ( n m ?an      
#ajj1jjj4  7,b7 ,/reaml9$ proc$ures ,!  
,secret>y %all1 by rule1 e/abli%        
/reaml9$ proc$ures = environm5tal       
reviews ( small public h\s+ ag5cy       
developm5t & mod]nization projects hav+ 
a total co/ ( m ?an #ajj1jjj4  7e7      
,fungibility  7#a7 ,9 g5]al ,not)/&+ any
 o!r provision ( law & subject to       
p>agraph 7#b71 a small public h\s+ ag5cy
 may--  7,a7 comb9e funds provid$ to !  
small public h\s+ ag5cy = v\*] assi/ance

 "u section #h7o71 f ! ,capital ,fund1 &
 f ! ,op]at+ ,fund2 &  7,b7 use ! funds 
comb9$ "u subp>agraph 7,a7 = any        
activity au?oriz$ "u section #h7o7 or   
subsection 7d7 or 7e7 ( section #i4     
7#b7 ,limitation ,9 us+ funds comb9$ "u 
p>agraph 7,a71 a small public h\s+ ag5cy
 %all assi/ sub/antially ! same numb] ( 
l[-income families1 ) a comp>able mix ( 
families by family size1 z x did 9 ! ye>
 prec$+ its qualification z a small     
public h\s+ ag5cy1 ) appropriate        
adju/m5ts made by ! ,secret>y on ! basis
 ( any increase or decrease 9 ! numb] ( 
v\*]s or units assi/$4  7f7             
,project-,bas$ v\*]s ,) respect to a    
program c>ri$ out by a small public h\s+
 ag5cy "u section #h7o7--  7#a7 section 
#h7o77#ac77;,b7 %all be appli$ by       
sub/itut+ #ej p]c5t = #bj p]c5t2 &  7#b7
 section #h7o77#ac77;,c7 %all n apply4  
7g7 ,conv]sion to section #h  7#a7 ,9   
g5]al ,a small public h\s+ ag5cy may1   
subject to ! availability (             
appropriations & approval by !          

,secret>y1 conv]t all or a portion ( !  
public h\s+ units ( ! small public h\s+ 
ag5cy to project-bas$ v\*] assi/ance "u 
section #h7o77#ac7 or to project-bas$   
assi/ance "u section #h4  7#b7          
,project-,bas$ v\*] assi/ance  7,a7     
,inapplicable provisions ,subp>agraphs  
7,b71 7,c71 & 7,d7 ( section #h7o77#ac7 
%all n apply to public h\s+ units       
conv]t$ to project-bas$ v\*] assi/ance  
"u p>agraph 7#a74  7,b7 ,r5t calculation
 = tax-cr$it projects ,r5ts = public    
h\s+ units conv]t$ to project-bas$ v\*] 
assi/ance "u p>agraph 7#a7 %all be      
e/abli%$ 9 accordance ) section         
#h7o77#ac77;,h71 )\t reg>d to :e!r or n 
a project is locat$ 9 a qualifi$ c5sus  
tract4  7#c7 ,project-bas$ assi/ance    
7,a7 ,initial r5ts  7i7 ,e/abli%m5t     
,initial r5ts = public h\s+ units       
conv]t$ to section #h project-bas$      
assi/ance "u p>agraph 7#a7 %all be      
e/abli%$1 at ! option ( ! small ag5cy-- 
7,i7 at ! comp>able r5t = unassi/$ units
 9 ! area2 or  7,,ii7 on a budget basis4

  7ii7 ,budget-bas$ r5ts ,9 approv+ a   
budget-bas$ r5t "u clause 7i77,,ii71 !  
,secret>y %all take into acc\nt ! ne$ to
 provide = suffici5t replacem5t res]ves 
to (fset a r$uction or elim9ation (     
capital subsidy funds = a project & =   
debt s]vice on loans to fund capital    
improvem5ts4  7,b7 ,r5t adju/m5ts ,!    
,secret>y %all annually adju/ ! r5ts    
e/abli%$ "u subp>agraph 7,a7 us+ an     
op]at+ co/ adju/m5t factor e/abli%$ by !
 ,secret>y 7:i* %all n result 9 a       
negative adju/m5t7 or1 at ! reque/ ( !  
own]1 on a budget basis4  7,c7 ,t]m ,!  
t]m ( any contract = assi/ance paym5ts  
pursuant to ?is p>agraph %all be ! long]
 ( #bj ye>s or ! rema9+ p]iod dur+ :i* !
 project w\ld h be5 requir$ to be op]at$
 z public h\s+ 7z calculat$ imm$iately  
prior to ! conv]sion74  7,d7 ,o!r       
provisions ,except z o!rwise provid$ 9  
?is subsection1 a project conv]t$ "u    
p>agraph 7#a7 %all be subject to !      
provisions ( section #ebd ( !           
,multifamily ,assi/$ ,h\s+ ,re=m &      

,af=dability ,act ( #aiig 7#db ,u4,s4,c4
 #adcg;f note74  7#d7 ,release (        
encumbrances ,at ! "t ( conv]sion ( a   
project "u p>agraph 7#a71 ! ,secret>y   
%all release ! project f any applicable 
annual contributions contract & release 
& cancel ( record all de$s ( tru/ & o!r 
in/rum5ts encumb]+ ! project 9 favor ( !
 ,f$]al ,gov]nm5t4 ,^u conv]sion1 a     
project %all no long] be subject to     
,f$]al laws & requirem5ts applicable    
solely to public h\s+ projects4         
,adm9i/rative ov]sight ( public h\s+    
units conv]t$ to section #h project-bas$
 assi/ance "u p>agraph 7#a7 %all be     
transf]r$ to ! ,(fice ( ,h\s+ )9 !      
,dep>tm5t ( ,h\s+ & ,urban ,developm5t4 
7#e7 ,transf] ( funds ,^u conv]sion ( a 
project "u p>agraph 7#a71 ! ,secret>y   
%all reprogram to ! appropriate section 
#h acc\nt--  7,a7 an am\nt ( public h\s+
 ,op]at+ ,fund budget au?ority equal to 
t :i* w\ld o!rwise be allocat$ to !     
conv]t$ project2 &  7,b7 an am\nt (     
public h\s+ ,capital ,fund budget       

au?ority o!rwise allocable to ! small   
public h\s+ ag5cy ) respect to ! conv]t$
 project4  7h7 ,replacem5t h\s+ factor  
funds ,dur+ ! fir/ ye> ( ea* #e-ye>     
p]iod = :i* a small public h\s+ ag5cy   
qualifies = ! addition ( a replacem5t   
h\s+ factor "u section #ije4aj7;i7 (    
title #bd1 ,code ( ,f$]al ,regulations1 
! ,secret>y %all pay to ! small public  
h\s+ ag5cy ! portion ( ! total am\nt t !
 ,secret>y plans to make available to ! 
small public h\s+ ag5cy f ! ,capital    
,fund e/abli%$ "u section #i7;d7 dur+ t 
#e-ye> p]iod t is attributable to !     
addition ( ! replacem5t h\s+ factor4  4 
7b7 ,te*nical & con=m+ am5dm5ts ,section
 #e;,a ( ! ,unit$ ,/ates ,h\s+ ,act (   
#aicg 7#db ,u4,s4,c4 #adcg;c-#a7 is     
am5d$--  7#a7 9 subsection 7b71 by /rik+
 p>agraph 7#c72  7#b7 9 subsection 7e71 
by /rik+ p>agraph 7#d72 &  7#c7 9       
subsection 7f71 by /rik+ p>agraph 7#e74 
#d4 ,r5t re=m demon/ration project =    
small public h\s+ ag5cies  7a7          
,def9itions ,9 ?is section1 ! foll[+    

def9itions %all apply3  7#a7 ,extremely 
l[-income family ,! t]m extremely       
l[-income family means a family ^:      
income does n exce$ #cj p]c5t ( ! m$ian 
income = ! area1 z det]m9$ by !         
,secret>y ) adju/m5ts = small] & l>g]   
families1 except ! ,secret>y may e/abli%
 income ceil+s high] or l[] ?an #cj     
p]c5t ( ! m$ian income = ! area on !    
basis ( ! ,secret>y's f9d+s t su*       
v>iations are necess>y because (        
unusually high or l[ family incomes 9 ! 
area4  7#b7 ,income ,! t]m income %all h
 ! mean+ giv5 t t]m by section          
#c7;b77#d7 ( ! ,unit$ ,/ates ,h\s+ ,act 
( #aicg 7#db ,u4,s4,c4 #adcg;a7b77#d774 
7#c7 ,l[-income family ,! t]m l[-income 
family means a family ^: income does n  
exce$ #hj p]c5t ( ! m$ian income = !    
area1 z det]m9$ by ! ,secret>y )        
adju/m5ts = small] & l>g] families1     
except ! ,secret>y may e/abli% income   
ceil+s high] or l[] ?an #hj p]c5t ( !   
m$ian incomes = ! area on ! basis ( !   
,secret>y's f9d+s t su* v>iations are   

necess>y because ( unusually high or l[ 
family incomes 9 ! area4  7#d7 ,m$ian   
income = ! area ,! t]m m$ian income = ! 
area means ! m$ian income ( all families
 9 a geographic area1 z det]m9$ by !    
,secret>y4  7#e7 ,secret>y ,! t]m       
,secret>y means ! ,secret>y ( ,h\s+ &   
,urban ,developm5t4  7#f7 ,small public 
h\s+ ag5cy ,! t]m small public h\s+     
ag5cy has ! same mean+ z 9 section      
#cg7;a7 ( ! ,unit$ ,/ates ,h\s+ ,act (  
#aicg1 z add$ by ?is ,act4  7#g7 ,v     
l[-income family ,! t]m v l[-income     
family means a family ^: income does n  
exce$ #ej p]c5t ( ! m$ian income = !    
area1 z det]m9$ by ! ,secret>y )        
adju/m5ts = small] & l>g] families1     
except ! ,secret>y may e/abli% income   
ceil+s high] or l[] ?an #ej p]c5t ( !   
m$ian income = ! area on ! basis ( !    
,secret>y's f9d+s t su* v>iations are   
necess>y because ( unusually high or l[ 
family incomes 9 ! area4  7b7 ,9 g5]al  
,! ,secret>y %all c>ry out a            
demon/ration project to exam9e h[ v>i\s 

me?ods ( det]m9+ r5t 9 public h\s+      
affect--  7#a7 ! adm9i/rative burd5 on  
small public h\s+ ag5cies2 &  7#b7 !    
resid5ts ( public h\s+4  7c7 ,scope (   
demon/ration project  7#a7 ,reque/ to   
p>ticipate ,! ,secret>y %all select     
small public h\s+ ag5cies to p>ticipate 
9 ! demon/ration project f among small  
public h\s+ ag5cies t reque/ to         
p>ticipate 9 ! project4  7#b7 ,numb] ,! 
,secret>y %all select n m ?an #bj p]c5t 
( ! total numb] ( small public h\s+     
ag5cies to p>ticipate 9 ! demon/ration  
project4  7#c7 ,repres5tation ,!        
,secret>y %all select small public h\s+ 
ag5cies repres5t+ a broad range (       
geographic areas & urban & rural        
locations4  7d7 ,r5t-,sett+ me*anisms ,a
 small public h\s+ ag5cy p>ticipat+ 9 ! 
demon/ration project %all select #a or m
 ( ! foll[+ me?ods = e/abli%+ a family's
 r5t contribution = a dwell+ unit 9     
public h\s+3  7#a7 ,ti]$ sy/em  7,a7    
,initial r5ts ,a ti]$ sy/em "u :i* !    
am\nt ( initial r5t is z foll[s3  7i7 ,=

 an extremely l[-income family1 an am\nt
 equal to #cj p]c5t ( #aj p]c5t ( !     
m$ian income = ! area4  7ii7 ,= a v     
l[-income family1 an am\nt equal to #cj 
p]c5t ( #cj p]c5t ( ! m$ian income = !  
area4  7iii7 ,= a l[-income family1 an  
am\nt equal to #cj p]c5t ( #ej p]c5t ( !
 m$ian income = ! area4  7,b7 ,subsequ5t
 r5ts ,! r5t det]m9$ 9 accordance )     
subp>agraph 7,a7 %all be adju/$ annually
 by ! small public h\s+ ag5cy on ! basis
 ( *anges 9 area m$ian incomes & %all   
apply to ! cont9u$ occupancy ( an assi/$
 family4  7,c7 ,ov]-income families ,a  
family assi/$ "u a ti]$ sy/em e/abli%$  
"u subp>agraph 7,a7 ^: income exce$s #hj
 p]c5t ( ! m$ian income = ! area %all   
pay a r5t equal to ! high] ( #cj p]c5t (
 #hj p]c5t ( ! m$ian income = ! area or 
! m>ket r5t = ! unit z det]m9$ by !     
small public h\s+ ag5cy4  7#b7 ,gross   
income  7,a7 ,initial r5ts ,a me?od "u  
:i* r5t is e/abli%$ 9 an am\nt t v>ies  
betwe5 #bf to #bh p]c5t ( a family's    
income1 bas$ on family *>act]i/ics z    

det]m9$ by ! small public h\s+ ag5cy4   
7,b7 ,subsequ5t r5ts ,! r5t det]m9$ 9   
accordance ) subp>agraph 7,a7 %all be   
adju/$ annually betwe5 income           
rec]tifications on ! basis ( factors    
select$ by a small public h\s+ ag5cy t  
are mo/ relevant to ! /atus ( a resid5t4
  7,c7 ,m9imum r5t ,9 e/abli%+ r5ts 9   
accordance ) subp>agraph 7,a71 a small  
public h\s+ ag5cy may impose a m9imum   
r5t4  7#c7 ,exi/+ r5t me*anisms ,a small
 public h\s+ ag5cy may use #a or m ( !  
above me?ods = det]m9+ r5ts 9 comb9ation
 ) ! me?od = e/abli%+ r5ts pursuant to  
section #c ( ! ,unit$ ,/ates ,h\s+ ,act 
( #aicg 7#db ,u4,s4,c4 #adcg;a74  7e7   
,income rec]tifications ,reviews (      
family income "u p>agraphs 7#a71 7#b71 &
 7#c7 ( subsection 7d7 %all be made at  
lea/ once e #e ye>s1 except a family may
 reque/ a rec]tification & adju/m5t 9   
r5t at any "t if ! family income has    
*ang$ by an am\nt e/abli%$ by ! small   
public h\s+ ag5cy4 ,9 det]m9+ family    
income1 ! small public h\s+ ag5cy may   

use ! income ( ! family z det]m9$ by !  
small public h\s+ ag5cy = ! prec$+ ye>4 
7f7 ,h>d%ip exception ,a small public   
h\s+ ag5cy %all adopt a h>d%ip policy1  
comp>able to ! policy conta9$ 9 section 
#c7;a77#c77;,b7 ( ! ,unit$ ,/ates ,h\s+ 
,act ( #aicg 7#db ,u4,s4,c4             
#adcg;a7a77#c77;,b771 = use 9 connection
 ) a m9imum r5t impos$ "u subsection    
7d77#b77;,c7 & 9 connection ) r5ts      
e/abli%$ "u p>agraphs 7#a71 7#b71 & 7#c7
 ( subsection 7d74  7g7 ,reports  7#a7  
,9 g5]al ,n lat] ?an #e ye>s aft] ! date
 ( enactm5t ( ?is ,act1 ! ,secret>y %all
 submit to ,congress a report on !      
results ( ! demon/ration project c>ri$  
out "u ?is section4  7#b7               
,recomm5dations = action ,! report      
submitt$ "u p>agraph 7#a7 %all conta9   
recomm5dations t ,congress take #a or m 
( ! foll[+ actions3  7,a7 ,cont9ue !    
demon/ration project = a specifi$ p]iod 
( "t4  7,b7 ,exp& ! numb] ( p>ticipants 
9 ! demon/ration project4  7,c7 ,apply !
 t]ms ( ! demon/ration project to all   

small public h\s+ ag5cies4  7,d7 ,*ange 
any ( ! t]ms ( ! demon/ration project4  
7,e7 ,t]m9ate ! demon/ration project4   
7#c7 ,recomm5dations = p]man5t          
legislation ,! ,secret>y %all submit to 
,congress recomm5dations = p]man5t      
legislation t implem5ts r5t re=m = small
 public h\s+ ag5cies--  7,a7 ) ! report 
requir$ "u p>agraph 7#a72 or  7,b7 be=e 
! date on :i* ! ,secret>y submits !     
report requir$ "u p>agraph 7#a74  #e4   
,en]gy cons]vation ,section #i7;e77#b7 (
 ! ,unit$ ,/ates ,h\s+ ,act ( #aicg 7#db
 ,u4,s4,c4 #adcg;g7e77#b77 is am5d$ by  
add+ at ! end ! foll[+3  7,d7 ,freeze ( 
consumption levels  7i7 ,9 g5]al ,a     
small public h\s+ ag5cy1 z def9$ 9      
section #cg7;a71 may elect to be paid = 
its utility & wa/e managem5t co/s "u !  
=mula = a p]iod1 at ! discretion ( !    
small public h\s+ ag5cy1 ( up to #bj    
ye>s bas$ on ! small public h\s+ ag5cy's
 av]age annual consumption dur+ ! #c-ye>
 p]iod prec$+ ! ye> 9 :i* ! election is 
made 7h]eaft] ref]r$ to z consumption   

base level74  7ii7 ,initial adju/m5t 9  
consumption base level ,! ,secret>y %all
 make an initial "o-"t adju/m5t 9 !     
consumption base level to acc\nt =      
diff]5ces 9 ! heat+ degree day av]age   
ov] ! mo/ rec5t #bj-ye> p]iod comp>$ to 
! av]age 9 ! consumption base level4    
7iii7 ,adju/m5ts 9 consumption base     
level ,! ,secret>y %all make adju/m5ts 9
 ! consumption base level to acc\nt = an
 increase or r$uction 9 units1 a *ange 9
 fuel s\rce1 a *ange 9 resid5t controll$
 electricity consumption1 or = o!r      
reasons4  7iv7 ,sav+s ,all co/ sav+s    
result+ f an election made pursuant to  
?is subp>agraph %all accrue to ! small  
ag5cy & may be us$ = any public h\s+    
purpose at ! discretion ( ! small public
 h\s+ ag5cy4  7v7 ,?ird p>ties ,a small 
public h\s+ ag5cy mak+ an election "u   
?is subp>agraph may use1 b %all n be    
requir$ to use1 ! s]vices ( a ?ird p>ty 
9 its en]gy cons]vation program4 ,!     
small public h\s+ ag5cy %all h ! sole   
discretion to det]m9e ! s\rce1 & t]ms & 

conditions1 ( any f9anc+ us$ = its      
program4  4  #f4 ,consortia ,n lat] ?an 
#ahj days aft] ! date ( enactm5t ( ?is  
,act1 ! ,secret>y ( ,h\s+ & ,urban      
,developm5t %all develop & deploy all   
electronic in=mation sy/ems necess>y to 
accommodate full consolidat$ report+ by 
public h\s+ ag5cies elect+ to op]ate 9  
consortia "u section #ac7;a7 ( ! ,unit$ 
,/ates ,h\s+ ,act ( #aicg 7#db ,u4,s4,c4
 #adcgk7a774  #g4 ,effective date ,?is  
,act1 & ! am5dm5ts made by ?is ,act1    
%all take effect #fj days aft] ! date ( 
enactm5t ( ?is ,act4