,,ii  #aahth ,,congress  #ast ,session  
,s4 #eed  ,,in ,,the ,,senate ,,of ,,the
 ,,united ,,states  ,february #bh1      
#bjbc,mr4 ,rubio 7for himself and ,mr4  
,scott of ,florida7 introduced the      
following bill2 which was read twice and
 referred to the ,committee on ,banking1
 ,housing1 and ,urban ,affairs  ,a      
,,bill  ,to reform the inspection       
process of housing assisted by the      
,department of ,housing and ,urban      
,development1 and for other purposes4   
#a4 ,short title ,this ,act may be cited
 as the ,,hud ,inspection ,reform and   
,capital ,improvement ,act of #bjbc4    
#b4 ,definition ,in this ,act1 the term 
,secretary means the ,secretary of      
,housing and ,urban ,development4  #c4  
,reduction in grade or pay or removal   
for misconduct or performance of        
employees of the ,department of ,housing
 and ,urban ,development  7a7 ,in       
general ,section #g7;c7 of the          
,department of ,housing and ,urban      
,development ,act 7#db ,u4,s4,c4        

#cece7;c77 is amended-- 7#a7 by striking
 ,the ,secretary is authorized and      
inserting the following3 8,employment1  
compensation1 authority1 and duties of  
personnel4--  7#a7 ,in general ,the     
,secretary is authorized  2 and  7#b7 by
 adding at the end the following3  7#b7 
,reduction in grade or pay or removal   
for misconduct or performance of        
employees  7,a7 ,definitions ,for       
purposes of this paragraph-- 7i7 the    
term covered employee-- 7,i7 means an   
individual holding a position in the    
civil service in the ,department2 and   
7,,ii7 does not include any individual--
 7aa7 holding in a position described   
under sections #ecab through #ecaf of   
title #e1 ,united ,states ,code         
7relating to the ,executive ,schedule72 
7bb7 holding a position as a limited    
term appointee1 limited emergency       
appointee1 or noncareer appointee in the
 ,senior ,executive ,service1 as defined
 under paragraphs 7#e71 7#f71 and 7#g71 
respectively1 of section #cacb7;a7 of   

title #e1 ,united ,states ,code2 or     
7cc7 holding a position of a            
confidential or policy-determining      
character under schedule ,c of subpart  
,c of part #bac of title #e1 ,code of   
,federal ,regulations2  7ii7 the term   
grade means a level of classification   
under a position classification system2 
7iii7 the term misconduct includes      
neglect of duty1 malfeasance1 or failure
 to accept a directed reassignment or to
 accompany a position in a transfer of  
function2 and  7iv7 the term pay means  
the rate of basic pay fixed by law or   
administrative action for the position  
held by a covered employee4  7,b7       
,actions covered ,this paragraph-- 7i7  
applies to a reduction in grade or pay  
or removal2 and  7ii7 does not apply    
to-- 7,i7 a reduction in grade or pay or
 removal under section #geab of title   
#e1 ,united ,states ,code2  7,,ii7 a    
reduction in grade or pay or removal    
under section #geba of title #e1 ,united
 ,states ,code2  7,,iii7 a removal under

 section #gecb of title #e1 ,united     
,states ,code2 or  7,,iv7 a removal     
under section #ceib1 #ceie1 or #gedc of 
title #e1 ,united ,states ,code4  7,c7  
,cause and procedure  7i7 ,in general   
,notwithstanding any other provision of 
law1 under regulations prescribed by the
 ,office of ,personnel ,management1 the 
,secretary may1 if the ,secretary       
determines that the misconduct or       
performance of a covered employee       
warrants such action-- 7,i7 remove the  
covered employee from the civil service2
  7,,ii7 reduce the grade of the covered
 employee2 or  7,,iii7 reduce the pay of
 the covered employee4  7ii7 ,reduction 
in grade ,a covered employee subject to 
a reduction in grade under clause       
7i77,,ii7 shall1 beginning on the date  
on which the reduction takes effect1    
receive the annual rate of pay          
applicable to the reduced grade4  7iii7 
,appeal procedures  7,i7 ,in general    
,subject to subclause 7,,ii7 and clause 
7iv71 any reduction in grade or pay or  

removal under this paragraph may be     
appealed to the ,merit ,systems         
,protection ,board under section #ggja  
of title #e1 ,united ,states ,code4     
7,,ii7 ,time for appeal ,an appeal under
 subclause 7,i7 may only be made if such
 appeal is made not later than #g days  
after the date of such reduction in     
grade or pay or removal4  7iv7 ,review  
on appeal  7,i7 ,in general ,upon       
receipt of an appeal under clause 7iii71
 the ,merit ,systems ,protection ,board 
shall refer the appeal to an            
administrative law judge pursuant to    
section #ggja7;b77#a7 of title #e1      
,united ,states ,code4 ,the             
administrative law judge shall expedite 
any such appeal under such section and1 
in any such case1 shall issue a decision
 not later than #de days after the date 
on which the ,board receives the appeal4
  7,,ii7 ,information and assistance ,to
 the maximum extent practicable1 the    
,secretary shall provide to the ,merit  
,systems ,protection ,board1 and to any 

administrative law judge to whom an     
appeal under this paragraph is referred1
 such information and assistance as may 
be necessary to ensure an appeal under  
this paragraph is expedited4  7,,iii7   
,finality ,notwithstanding any other    
provision of law1 including section     
#ggjc of title #e1 ,united ,states      
,code1 the decision of an administrative
 law judge under subclause 7,i7 shall be
 final and shall not be subject to any  
further appeal4  7,,iv7 ,delayed        
decision  7aa7 ,in general ,in any case 
in which the administrative law judge   
cannot issue a decision in accordance   
with the #de-;day requirement under     
subclause 7,i71 the reduction in grade  
or pay or removal shall be final4  7bb7 
,explanation ,in a case described in    
item 7aa71 the ,merit ,systems          
,protection ,board shall1 not later than
 #ad days after the date on which the   
reduction in grade or pay or removal    
becomes final1 submit to ,congress a    
report that explains the reasons why a  

decision was not issued in accordance   
with that requirement4  7,v7 ,no stays  
,the ,merit ,systems ,protection ,board 
or administrative law judge may not stay
 any reduction in grade or pay or       
removal action under this paragraph4    
7,,vi7 ,effect of appeal of removal     
,during the period beginning on the date
 on which a covered employee appeals a  
removal from the civil service under    
this paragraph and ending on the date on
 which the administrative law judge     
issues a final decision on such appeal1 
the covered employee may not receive any
 pay1 awards1 bonuses1 incentives1      
allowances1 differentials1 student loan 
repayments1 special payments1 or        
benefits4  7v7 ,whistleblower protection
 ,in the case of a covered employee     
seeking corrective action 7or on behalf 
of whom corrective action is sought7    
from the ,office of ,special ,counsel   
based on an alleged prohibited personnel
 practice described in section #bcjb7;b7
 of title #e1 ,united ,states ,code1 the

 ,secretary may not reduce the grade or 
pay or remove the covered employee under
 this paragraph without the approval of 
the ,special ,counsel under section     
#abad7;f7 of title #e1 ,united ,states  
,code4  4  7b7 ,application ,the        
authority under paragraph 7#b7 of       
section #g7;c7 of the ,department of    
,housing and ,urban ,development ,act1  
as added by subsection 7a71 shall apply 
to any covered employee 7as defined in  
such paragraph7 appointed before1 on1 or
 after the date of enactment of this    
,act4  7c7 ,conforming amendments ,title
 #e1 ,united ,states ,code1 is amended--
 7#a7 in section #dcjc7;f7-- 7,a7 in    
paragraph 7#c71 by striking or at the   
end2  7,b7 in paragraph 7#d71 by        
striking the period at the end and      
inserting 1 or2 and  7,c7 by adding at  
the end the following3  7#e7 the        
reduction in grade or removal of an     
employee under section #g7;c77#b7 of the
 ,department of ,housing and ,urban     
,development ,act 7#db ,u4,s4,c4        

#cece7;c77#b774  2  7#b7 in section     
#geab-- 7,a7 in subparagraph 7,e71 by   
striking 1 or and inserting a comma2    
7,b7 in subparagraph 7,f71 by striking  
the period at the end and inserting 1   
or2 and  7,c7 by adding at the end the  
following3  7,g7 a reduction in grade or
 pay or removal under section #g7;c77#b7
 of the ,department of ,housing and     
,urban ,development ,act 7#db ,u4,s4,c4 
#cece7;c77#b774  2  7#c7 in section     
#geba7;b71 in the matter following      
paragraph 7#e7-- 7,a7 in subparagraph   
7,b71 by striking or at the end2  7,b7  
in subparagraph 7,c71 by striking the   
period at the end and inserting 2 or2   
and  7,c7 by adding at the end the      
following3  7,d7 a reduction in grade or
 pay or removal under section #g7;c77#b7
 of the ,department of ,housing and     
,urban ,development ,act 7#db ,u4,s4,c4 
#cece7;c77#b774  2 and  7#d7 in section 
#gedb1 by striking or to a removal under
 section #ceib or #ceie of this title   
and inserting to a removal under section

 #ceib or #ceie of this title1 to an    
action under section #gac of title #ch1 
or to a reduction in grade or pay or    
removal under section #g7;c77#b7 of the 
,department of ,housing and ,urban      
,development ,act 7#db ,u4,s4,c4        
#cece7;c77#b774  #d4 ,enforcement of    
physical condition standards and tenant 
protection ,section #h7o7 of the ,united
 ,states ,housing ,act of #aicg 7#db    
,u4,s4,c4 #adcg;f7o771 as amended by    
section #aja7;b77#b77;,b7 of division ,q
 of the ,consolidated ,appropriations   
,act1 #bjba 7,public ,law #aaf-bfj2 #acd
 ,stat4 #bafc71 is amended by adding at 
the end the following3  7#bb7           
,maintenance of property ,any entity    
receiving housing assistance payments   
with respect to dwelling units covered  
by a housing assistance payments        
contract shall-- 7,a7 maintain decent1  
safe1 and sanitary conditions at those  
dwelling units1 as determined by the    
,secretary2 and  7,b7 comply with any   
standards under applicable ,state or    

local laws1 rules1 ordinances1 or       
regulations relating to the physical    
condition of those dwelling units4      
7#bc7 ,enforcement of physical condition
 standards  7,a7 ,in general ,the       
,secretary shall take action under      
subparagraph 7,c7 against an entity with
 a housing assistance payments contract 
for project-based assistance with       
respect to a multifamily housing project
 if-- 7i7 the project receives a        
,uniform ,physical ,condition ,standards
 7in this paragraph referred to as      
,,upcs7 inspection score of not more    
than #de2  7ii7 the entity fails to     
certify in writing to the ,secretary    
within #c days of receiving the score   
under clause 7i7 that all exigent health
 and safety deficiencies identified by  
the inspector at the project have been  
corrected2 or  7iii7 the project        
receives a ,,upcs inspection score of   
more than #de and less than #ei and has 
received consecutive scores of less than
 #fj on ,,upcs inspections4  7,b7       

,applicability ,subparagraph 7,a7       
shall-- 7i7 apply with respect to       
insured and noninsured projects with    
dwelling units receiving assistance     
under this section other than under     
paragraph 7#ac72 and  7ii7 not apply to 
dwelling units receiving assistance with
 capital or operating funds under       
section #i4  7,c7 ,notification and     
enforcement  7i7 ,in general ,if an     
entity violates clause 7i71 7ii71 or    
7iii7 of subparagraph 7,a71 the         
,secretary shall notify the entity and  
provide an opportunity for response not 
later than #ae days after the date on   
which the results of the ,,upcs         
inspection are issued4  7ii7 ,plan and  
notice of default ,if violations remain 
at a project after the #ae-;day period  
described in clause 7i71 the ,secretary 
shall-- 7,i7 develop a plan to bring the
 project into compliance not later than 
#cj days after the date on which the    
results of the ,,upcs inspection are    
issued2 and  7,,ii7 provide the owner1  

the tenants of the property1 the local  
government1 any mortgagees1 and any     
contract administrator of the project   
with a ,notice of ,default with a       
specified timetable1 determined by the  
,secretary1 for correcting all          
deficiencies4  7iii7 ,withdrawal of     
notice of default ,if an appeal         
submitted by the entity results in a    
,,upcs inspection score of not less than
 #fj1 the ,secretary may withdraw a     
,notice of ,default issued under clause 
7ii77,,ii74  7iv7 ,penalties ,if1 at the
 end of the timetable described in      
clause 7ii77,,ii71 the entity fails to  
fully correct all deficiencies in the   
project1 the ,secretary may-- 7,i7      
require immediate replacement of project
 management with a management agent     
approved by the ,secretary2  7,,ii7     
impose civil money penalties1 which--   
7aa7 shall be used solely for the       
purpose of supporting safe and sanitary 
conditions at the property1 as          
designated by the ,secretary1 with      

priority given to the tenants of the    
property affected by the penalty2 and   
7bb7 shall not be payable out of project
 income2  7,,iii7 abate the housing     
assistance payments contract under this 
section1 including partial abatement1 as
 determined by the ,secretary1 until all
 deficiencies have been corrected2      
7,,iv7 pursue transfer of the project to
 an owner1 approved by the ,secretary   
under established procedures1 which will
 be obligated to promptly make all      
required repairs and to accept renewal  
of the housing assistance payments      
contract as long as such renewal is     
offered2  7,v7 transfer the existing    
housing assistance payments contract    
under this section to another project or
 projects and owner or owners2  7,,vi7  
pursue exclusionary sanctions1 including
 suspensions or debarments from ,federal
 programs2  7,,vii7 seek judicial       
appointment of a receiver to manage the 
property and cure all project           
deficiencies or seek a judicial order of

 specific performance requiring the     
owner to cure all project deficiencies2 
7,,viii7 work with the owner1 lender1 or
 other related party to stabilize the   
property in an attempt to preserve the  
property through compliance1 transfer of
 ownership1 or an infusion of capital   
provided by a third party that requires 
time to effectuate2 or  7,,ix7 take any 
other regulatory or contractual remedies
 available as deemed necessary and      
appropriate by the ,secretary4  7,d7    
,contracts  7i7 ,in general ,the        
,secretary shall take appropriate steps 
to ensure that project-based contracts  
remain in effect1 subject to the        
exercise of contractual abatement       
remedies to assist relocation of tenants
 for major threats to health and safety 
after written notice to and informed    
consent of the affected tenants and use 
of other remedies under this paragraph4 
7ii7 ,other assistance ,to the extent   
the ,secretary determines1 in           
consultation with the tenants and the   

local government1 that a property is not
 feasible for continued rental          
assistance payments under this section  
or other housing programs1 based on     
consideration of the costs of           
rehabilitating and operating the        
property and all available ,federal1    
,state1 and local resources1 including  
rent adjustments under section #ebd of  
the ,multifamily ,assisted ,housing     
,reform and ,affordability ,act of #aiig
 7#db ,u4,s4,c4 #adcg;f note2 title ,v  
of ,public ,law #aje-fe7 and            
environmental conditions that cannot be 
remedied in a cost-effective fashion1   
the ,secretary may1 in consultation with
 the tenants of the property1 contract  
for project-based rental assistance     
payments with an owner or owners of     
other existing housing properties1 or   
provide other rental assistance4  7,e7  
,report  7i7 ,in general ,the ,secretary
 shall1 on a quarterly basis1 issue a   
publicly available report on all        
properties covered by this paragraph    

that-- 7,i7 are assessed through ,,upcs 
inspections2 and  7,,ii7 7aa7 have a    
,,upcs inspection score of less than    
#fj2 or  7bb7 received an unsatisfactory
 management and occupancy review during 
the #cf-month period preceding the      
report4  7ii7 ,contents ,each report    
issued under clause 7i7 shall-- 7,i7    
include1 for each property covered by   
the report-- 7aa7 the ,,upcs inspection 
score and date of inspection2 and  7bb7 
the ownership interest and management of
 the property2  7,,ii7 identify-- 7aa7  
the enforcement actions being taken to  
address the physical conditions of the  
properties covered by the report1       
including imposition of civil monetary  
penalties and termination of subsidies2 
and  7bb7 properties that have been     
identified multiple times as having the 
physical conditions described in item   
7aa72  7,,iii7 identify actions that the
 ,secretary is taking to-- 7aa7         
remediate all health and safety         
concerns2 and  7bb7 protect tenants of  

the properties covered by the report2   
and  7,,iv7 include any administrative  
or legislative recommendations to       
further improve the living conditions at
 each property covered under a housing  
assistance payments contract4  7#bd7    
,tenant protection  7,a7 ,in general    
,the ,secretary may provide tenant-based
 assistance for dwelling units covered  
under a project-based assistance subsidy
 contract if-- 7i7 the owner of the     
dwelling units has received a ,notice of
 ,default2 and  7ii7 the dwelling units 
pose an imminent health and safety risk 
to the tenants of the dwelling units4   
7,b7 ,reimbursements ,to the extent that
 the ,secretary determines that dwelling
 units described in subparagraph 7,a7   
are not feasible for continued rental   
assistance payments or transfer of the  
project-based assistance subsidy        
contract associated with those dwelling 
units to another project or projects and
 owner or owners1 any remaining amounts 
associated with those dwelling units    

shall be recaptured and used to         
reimburse amounts used for tenant-based 
assistance under subparagraph 7,a74  4  
#e4 ,reports on ,real ,estate           
,assessment ,center inspections  7a7    
,annual ,,hud report ,not later than #ij
 days after the date of enactment of    
this ,act1 and annually thereafter1 the 
,secretary shall issue a publicly       
available report on the website of the  
,department of ,housing and ,urban      
,development 7in this section referred  
to as the ,department7 regarding ,real  
,estate ,assessment ,center 7in this    
section referred to as ,,reac7          
inspections of all properties assisted1 
insured1 or both1 under a program of the
 ,department1 which shall include-- 7#a7
 the percentage of all inspected        
properties that received a              
,,reac-inspected score of less than #fe 
during the #dh-month period preceding   
the report2  7#b7 the number of         
properties in which the most recent     
,,reac-inspected score represented a    

decline relative to the previous        
,,reac-inspected score2  7#c7 a list of 
the #aj metropolitan statistical areas  
with the lowest average ,,reac-inspected
 scores for all inspected properties2   
and  7#d7 a list of the #aj ,states with
 the lowest average ,,reac-inspected    
scores for all inspected properties4    
7b7 ,,gao report ,the ,comptroller      
,general of the ,united ,states shall   
issue a publicly available report on the
 website of the ,government             
,accountability ,office with            
recommendations for how ,,reac          
inspections of all properties assisted1 
insured1 or both1 under a program of the
 ,department should be reformed and     
improved4  #f4 ,budget-based rental     
adjustments for certain properties      
receiving project-based rental          
assistance that underwent               
,mark-to-,market  7a7 ,definition ,in   
this section1 the term eligible property
 means a property that-- 7#a7 receives  
project-based rental assistance under   

section #h of the ,united ,states       
,housing ,act of #aicg 7#db ,u4,s4,c4   
#adcg;f72  7#b7 underwent a mortgage    
restructuring under subtitle ,a of the  
,multifamily ,assisted ,housing ,reform 
and ,affordability ,act of #aiig 7#db   
,u4,s4,c4 #adcg;f note2 title ,v of     
,public ,law #aje-fe72 and  7#c7 7,a7   
has been transferred to a different     
owner due to the failure of a prior     
owner to meet ,uniform ,physical        
,condition ,standards2  7,b7 received a 
failing ,uniform ,physical ,condition   
,standard score under a prior owner2 or 
7,c7 requires substantial               
rehabilitation1 including the           
replacement of major systems1 in order  
to ensure the long term sustainability  
of the property1 as determined by a     
capital needs assessment and as approved
 by the ,secretary4  7b7 ,authority ,the
 ,secretary may1 at the request of the  
owner of the property1 approve the      
adjustment of rent on a budget basis    
7within the meaning of section          

#dja4dab7;b7 of title #bd1 ,code of     
,federal ,regulations1 or any successor 
regulation7 for an eligible property if 
the owner-- 7#a7 demonstrates that--    
7,a7 the available operating revenue is 
insufficient to operate and maintain the
 property2 and  7,b7 a rent adjustment  
is necessary to support financing for   
rehabilitation2 and  7#b7 submits a     
rehabilitation plan to extend the useful
 life of the property for not less than 
#be years1 including remediation of all 
existing health1 sanitation1 and safety 
concerns4  7c7 ,reporting requirement   
,during the period during which a       
property for which a budget-based rental
 adjustment is approved under subsection
 7b7 is being rehabilitated1 the owner  
of the property shall submit to the     
,secretary a quarterly report that      
includes-- 7#a7 a description of the    
progress made on1 and expenses incurred 
for1 capital improvements and debt      
service2  7#b7 a detailed list of       
outstanding improvements2  7#c7 the     

expected completion date for each       
outstanding improvement described in    
paragraph 7#b72 and  7#d7 any other     
information required by the ,secretary4 
#g4 ,codification of ,uniform ,physical 
,condition ,standards inspection        
timelines for units receiving           
project-based rental assistance  7a7    
,definition ,in this section1 the term  
covered property means a property that  
receives project-based rental assistance
 under section #h of the ,united ,states
 ,housing ,act of #aicg 7#db ,u4,s4,c4  
#adcg;f74  7b7 ,scoring and ranking of  
physical condition ,the ,secretary shall
 score and rank the physical condition  
of covered properties in accordance with
 this section4  7c7 ,methodology for    
ranking  7#a7 ,in general ,the          
,secretary shall score each covered     
property on the basis of a #ajj-point   
scale4  7#b7 ,fractions ,in scoring a   
covered property under paragraph 7#a71  
the ,secretary shall round-- 7,a7 a     
score that includes a fraction below one

 half point to the next lower full      
point2 and  7,b7 a score that includes a
 fraction of one half point or higher to
 the next higher full point4  7d7       
,designations and frequency of          
inspections  7#a7 ,standard #a          
performing property ,the ,secretary     
shall-- 7,a7 designate a covered        
property that receives a score of not   
less than #ij points on its physical    
condition inspection as a standard #a   
performing property2 and  7,b7 conduct a
 physical inspection of a standard #a   
performing property once every #c years4
  7#b7 ,standard #b performing property 
,the ,secretary shall-- 7,a7 designate a
 covered property that receives a score 
of not less than #hj points and less    
than #ij points on its physical         
condition inspection as a standard #b   
performing property2 and  7,b7 conduct a
 physical inspection of a standard #b   
performing property once every #b years4
  7#c7 ,standard #c performing property 
,the ,secretary shall-- 7,a7 designate a

 covered property that receives a score 
of less than #hj points on its physical 
condition inspection as a standard #c   
performing property2 and  7,b7 conduct a
 physical inspection of a standard #c   
performing property every year4  7e7    
,special requirements ,if a covered     
property receives a score in the range  
of a standard #a performing property or 
standard #b performing property on its  
physical condition inspection and has   
been cited by the ,secretary as having  
an exigent health and safety deficiency1
 the property-- 7#a7 shall only shall be
 designated as a standard #a performing 
property or standard #b performing      
property1 respectively1 if the owner    
resolves the deficiency2 and  7#b7 shall
 be designated as a standard #c         
performing property if the owner does   
not resolve the deficiency4  7f7        
,authority ,to delay inspections  7#a7  
,in general ,notwithstanding subsection 
7d71 the ,secretary may delay the       
physical inspection of a covered        

property that is undergoing a           
substantial rehabilitation4  7#b7       
,definition ,for purposes of this       
subsection1 the term substantial        
rehabilitation1 with respect to a       
covered property1 means a physical      
rehabilitation for the long-term        
sustainability of the property where the
 costs of the rehabilitation exceed #be 
percent of the property's replacement   
cost 7calculated based on fair market   
value7 after completion of all required 
repairs1 replacements1 and improvements4