new authority granted under section 202 of the Housing and Urban Development Act of 1970 or under any law subsequently enacted shall be entered into with respect to units in congregate housing. As used in this paragraph the term 'congregate housing' means low-income housing (A) in which some or all of the dwelling units do not have kitchen facilities, and (B) connected with which there is a central dining facility to provide wholesome and economical meals for elderly and displaced families under terms and conditions prescribed by the public housing agency to permit a generally self-supporting operation. Expenditures incurred by a public agency in the operation of a central dining facility in connection with congregate housing (other than the cost of providing food and service) shall be considered one of the costs of operation of the project.

"LOW-INCOME HOUSING IN PRIVATE ACCOMMODATIONS

"SEC. 8. (a) (1) For the purpose of providing a supplementary form of lowincome housing which will aid in assuring a decent place to live for every citizen and promote efficiency and economy in the program under this Act by taking full advantage of vacancies in the private housing market, each public housing agency shall, to the maximum extent consistent with the achievement of the objectives of this Act, provide low-income housing under this Act in the form of low-income housing in private accommodations in accordance with this section where such housing in private accommodations can be provided at a cost not greater than housing in projects assisted under other provisions of this Act.

"(2) The provisions of this section shall not apply to any locality unless the governing body of the locality has by resolution approved the application of such provisions to such locality.

"(3) As used in this section, the term "low-income housing in private accom modations' means dwelling units, leased from a private owner, which provide decent, safe, and sanitary dwelling accommodations and related facilities effectively supplementing the accommodations and facilities in low-income housing assisted under the other provisions of this Act in a manner calculated to meet the total housing needs of the community in which they are located; and the term 'owner' means any person or entity having the legal right to lease or sublease property containing one or more dwelling units as described in this section.

"(b) Each public housing agency, by notification to the owners of housing suitable for use as low-income housing in private accommodations, or by publication or advertisement, or otherwise, shall from time to time make known to the public in the community or communities under its jurisdiction the anticipated need for dwelling units in such community or communities to be used as lowincome housing in private accommodations under this section, inviting the owners of such dwelling units to make available for purposes of this section one or more of such units (not exceeding 10 per centum of the units in any single structure except to the extent that the agency, because of the limited number of units in the structure or for any other reason, determines that such limit should not be applied). The public housing agency shall conduct appropriate inspections of the units offered to be made available in any residential structure by the owner thereof in response to such invitation, and if—

"(1) it finds that such units are, or may be made, suitable for use as lowincome housing in private accommodations within the meaning of subsection (a) (3), and

"(2) the rentals to be charged for such units, as negotiated and agreed to by agency and the owner of the structure in a manner consistent with subsection (c) (2), are within the financial range of families of low income, such agency may approve such units for use as low-income housing in private accommodations in accordance with (and subject to the applicable limitations contained in) this section. Each public housing agency shall maintain and keep current a list of units approved by it under this subsection, including such information with respect to each such unit as it may consider necessary or appropriate.

"(c) To the extent of contracts for annual contributions entered into by the Secretary with a public housing agency under this Act, such agency may enter into contracts with the owners of structures containing dwelling units approved under subsection (b) for the use of such units in accordance with this section (and no limitation not specifically provided for in this section shall be imposed by regulations of the Secretary on the types of categories of structures or dwelling units, qualifying under subsection (a)(3) and approved under subsection (b),

which may be so used in any community). Each such contract with an owner shall provide (with respect to any unit) that—

"(1) the selection of tenants for such unit shall be the function of the owner, subject to the provisions of the contract between the Secretary and the agency;

"(2) the rental and other charges to be received by the owner shall be negotiated and agreed to by the agency and the owner, and the rental and other charges to be paid by the tenant shall be determined in accordance with the standards applicable to units in low-income housing projects assisted under the other provisions of this Act;

"(3) the agency shall have the sole right to give notice to vacate, with the owner having the right to make representations to the agency for termination of a tenancy;

"(4) maintenance and replacement (including redecoration) shall be in accordance with the standard practice for the building concerned as established by the owner and agreed to by the agency; and

"(5) the agency and the owner shall carry out such other appropriate terms and conditions as may be mutually agreed to by them.

Each contract between a public housing agency and an owner entered into under this subsection shall be for a term of not less than twelve months nor more than one hundred and twenty months, and shall be renewable by such agency and owner at the expiration of such term: Provided, That no renewal of such a contract shall result in a total term exceeding two hundred and forty months (or one hundred and eighty months in the case of an existing structure).

"(d) The period over which payments will be made to a public housing agency for a project of low-income housing in private accommodations under this section, and the aggregate amount of such payments, under a contract for annual contributions, shall be determined on the basis of the number of units in the community or communities under the jurisdiction of such agency which are in use (or can reasonably be expected to be placed in use) as low-income housing in private accommodations under this section, taking into account the terms of the leases under which such units are (or will be) so used. In addition, contracts for financial assistance entered into by the Secretary with a public housing agency pursuant to this section shall provide for reimbursement of reasonable and necessary expenses incurred by such agency in conducting inspections described in subsection (b).

"(e) The provisions of sections 5(e) and 6(d) of this Act shall not apply to (1) low-income housing in private accommodations provided under this section, or (2) housing purchased (or in the process of purchase) by the public agency for resale to tenants as provided in subsection (f).

"(f) To the extent authorized in contracts entered into by the Secretary with a public housing agency, such agency may purchase any structure containing one or more dwelling units leased to provide low-income housing in private accommodations under this section for the purpose of reselling the structure to the tenant or tenants of the structure or to a group of such tenants occupying units aggregating in value at least 80 per centum of the structure's total value. Any such resale may be made on the terms and conditions set forth in section 10 of this Act.

"ANNUAL CONTRIBUTIONS FOR OPERATION OF LOW-INCOME HOUSING PROJECTS

"SEC. 9. (a) In addition to the contributions authorized under section 5 of this Act, the Secretary may make annual consributions to public housing agencies for the operation of low-income housing projects. The contribution payable annually under this section shall not exceed the amounts which the Secretary determines are required (1) to assure the low-income character of the projects involved and (2) to achieve adequate operating services. The Secretary may embody the provisions for such annual contributions in a contract guaranteeing their payment and including such terms and conditions as he determines are necessary to carry out the purposes of this Act.

"(b) Subject to the requirements of section 3(1) of this Act, the rental required to be paid by a family residing in a low-income housing project owned or leased by a public housing agency receiving annual contributions under this section shall not be less than one-fifth of the family's income but shall in no event exceed a fair market rental charge determined on the basis of operating the project with payments of principal and interest which the public housing agency is obligated to pay on the capital cost of the project. In the case of low-income housing in private

accommodations provided under section 8 of this Act, the fair market rental charge shall be the rental which the owner receives for the dwelling unit plus the cost of utilities and necessary services not included in such rental.

"(c) In determining the income of any family for the purposes of this section and section 10 of this Act, there shall be deducted an amount equal to $300 for each minor member of the family residing in the household, and the earnings of any such minor person shall not be included in the income of his family.

"(d) From the amounts authorized in section 5(c) of this Act, the Secretary is authorized to enter into contracts for annual contributions under this section aggregating not more than $200,000,000 per annum.

"HOMEOWNERSHIP FOR LOW-INCOME FAMILIES

"SEC. 10. (a) For the purpose of assisting families of low income in acquiring homeownership or in acquiring membership in a cooperative or other association operating a housing project, a public housing agency is authorized to develop, acquire, or lease low-income housing for subsequent resale to low-income housing tenants and families eligible for low-income housing under the terms and conditions contained in this section. The provisions of this section also apply to the sale of rental housing owned by the public housing agency.

"(b) To purchase low-income housing under this section, a mortgage or other obligations shall—

“(1) be given to the public housing agency by a family of low income eligible for low-income housing, a tenant family in low-income housing, or a qualified entity approved by the Secretary;

"(2) be secured by the property which is to be purchased;

"(3) be in a principal amount of not more than the sale price plus closing costs and prepaid expenses;

"(4) bear interest at the maximum rate then applicable to mortgages insured under section 402 of the Revised National Housing Act, or the rate on the public housing agency's principal debt on the project, whichever is greater; "(5) provide for a maturity satisfactory to the Secretary, but not to exceed forty years;

"(6) provide that the purchaser's income contribution to monthly homeownership expense shall be an amount equal to one-fifth of the purchaser's income, but in no case shall the purchaser's income contribution be less than the amount of 'monthly' homeownership expense' excluding payment for principal and interest;

"(7) provide that the income contribution to monthly homeownership expense for a purchaser which is a qualified entity shall be determined by using an aggregate amount based on the contribution that would be required under paragraph (6) of each family who occupies a dwelling unit in the purchased property;

"(8) provide that the purchaser shall make monthly payments for any services furnished by the public housing agency to the purchaser; and

"(9) include other terms and conditions which the Secretary determines are required to carry out the purposes of this section.

"(c) As used in this section, the term 'monthly homeownership expense' shall include monthly amounts for principal and interest under the amortization provisions of the mortgage or other obligation, amounts for insurance and taxes, and an amount attributable to the cost of utilities as determined by the Secretary on the basis of estimated costs for utilities in the area. The term 'sale price' means (1) in the case of housing newly developed, acquired, or leased for subsequent resale under this section, the portion of the unpaid balance on the public housing agency's principal debt on the project at the time of sale which is allocable to the dwelling unit or units involved, (2) in the case of low-income rental housing, the appraised value of the property at the time of sale, or (3) in cases where participants in mutual-help projects or home buyers in homeownership opportunity projects voluntarily elect to purchase their low-income housing units under the terms of this section, the purchase price provided for under their lease with option to purchase type of contracts with the public housing agencies involved. "(d) Notwithstanding any other provision of this Act, the sale of a project or dwelling unit in a project shall not affect the Secretary's commitment to pay annual contributions with respect to such project, but such contributions shall not exceed the maximum contributions authorized under section 5 (a) of this Act.

“(e) Subject to the approval of the Secretary, any conveyance, contract, or

agreement heretofore executed by a public housing agency for the sale or lease of low-income housing to low-income families or public housing tenants may be amended to include any of the terms and conditions of this section.

"GENERAL PROVISIONS

"SEC. 11. (a) In the performance of, and with respect to, the functions, powers, and duties vested in him by this Act, the Secretary notwithstanding the provisons of any other law, shall

"(1) prepare annually and submit a budget program as provided for wholly owned Government corporations by the Government Corporation Control Act, as amended; and

"(2) maintain an integral set of accounts which shall be audited annually by the General Accounting Office in accordance with the principles and procedures applicable to commercial transactions as provided by the Government Corporation Control Act, as amended, and no other audit shall be required. "(b) All receipts and assets of the Secretary under this Act shall be available for the purposes of this Act until expended.

"(c) The Federal Reserve banks are authorized and directed to act as depositories, custodians, and fiscal agents for the Secretary in the general exercise of his powers under this Act, and the Secretary may reimburse any such bank for its services in such manner as may be agreed upon.

"FINANCING LOW-INCOME HOUSING PROJECTCS

"SEC. 12. (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 annual contributions contract and a loan under an agreement between such public housing agency and the Secretary, and (2) bear, or are accompanied by, a certificate of the Secretary that such obligations are so secured, shall be incontestable 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 obligations.

"(b) Obligations, including interest thereon, issued by public housing agencies in connection with low-income housing projects shall be exempt from all taxation now or hereafter imposed by the United States whether paid by such agencies or by the Secretary. The income derived by such agencies from such projects shall be exempt from all taxation now or hereafter imposed by the United States.

"LABOR STANDARDS

"SEC. 13. Any contract for loans, annual contributions, sale, or lease pursuant to this Act 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, shall be paid to all architects, technical engineers, draftsmen, and technicians employed in the development and to all maintenance laborers and mechanics employed in the operation of the lowincome housing project involved; and shall also contain a provision that not less than the wages prevailing in the locality, as predetermined by the Secretary of Labor pursuant to the Davis-Bacon Act (49 Stat. 1011), shall be paid to all laborers and mechanics employed in the development of the project involved (including a project for the use of privately built housing in any case, other than under the authority of section 8 of this Act, where the public housing agency and the builder or sponsor enter into an agreement for such use before construction or rehabilitation is commenced), and the Secretary shall require certification as to compliance with the provisions of this section prior to making any payment under such contract."

APPLICABILITY OF RENTAL REQUIREMENTS

SEC. 202. If a contract for annual contributions entered into pursuant to section 9 of the United States Housing Act of 1937 would require the establishment of an increased rental charge for a family which occupies a low-income housing dwelling

unit as of the effective date of such contract, the required adjustment in the family's rent will be accomplished as follows: (1) when the public agency makes the first review of the family's income pursuant to section 6(c) (2) of the Act which occurs at least one year after rhe effective date of entering into such contract, the family's monthly rent will be increased by an amount equal to one-half the additional amount of rent which would then be required pursuant to section 9; and (2) the family's monthly rental charge will be increased to the full amount of the rental charge required under section 9 when the public housing agency makes its next review of the family's income. Increases in rentals for such families will be effective the first day of the month immediately following the month in which the public housing agency makes the review of family income.

EXEMPTION OF CERTAIN PROJECTS FROM RENTAL FORMULA

SEC. 203. The rental or income contribution provisions of the United States Housing Act of 1937, as amended by section 201 of this Act, shall not preclude (1) the use of special schedules of required payments as approved by the Secretary for participants in mutual help housing projects who contribute labor, land, or materials to the development of such projects, or (2) the continued use of special schedules of required payments as approved by the Secretary for home buyers occupancy in homeownership opportunity projects under lease-purchase type contracts on the effective date of title II of the Housing Consolidation and Simplification Act of 1971.

REPEAL OF SPECIFICATION REQUIREMENTS IN CONSTRUCTION CONTRACTS

SEC. 204. Section 815 of the Housing Act of 1954 is repealed.

RETROACTIVE EFFECT OF REPEAL OF SECTION 10(j)

SEC. 205. Section 206 (c) of the Housing Act of 1961 (Public Law 87-70, approved June 30, 1961; 75 Stat. 165) is amended by adding at the end thereof the following sentence: "The Secretary of Housing and Urban Development is authorized to agree with a public housing agency to the amendment of any annual contributions contract containing the provision prescribed in section 10(j), so as to delete such provision and waive any rights of the United States accrued or that may accrue under such provision.'

AMENDMENT TO NATIONAL BANK ACT

SEC. 206. The sixth sentence of paragraph "Seventh" of section 5136 of the Revised Statutes, as amended (12 U.S.C. 24), is amended—

(1) by striking out wherever it appears therein "1421a(b) of title 42" and inserting in lieu thereof "6(f) of the United States Housing Act of 1937"; (2) by deleting before clause (1) the word "either";

(3) by deleting in clause (1) the parenthetical phrase "(which obligations shall have a maturity of not more than eighteen months)";

(4) by deleting before clause (2) the word "or"; and

(5) by inserting before the colon before the first proviso the following: or (3) by a pledge of both annual contributions under an annual contributions contract containing the covenant by the Secretary which is authorized by section 6(f) of the United States Housing Act of 1937, and a loan under an agreement between the local public housing agency and the Secretary in which the public housing agency agrees to borrow from the Secretary, and the Secretary agrees to lend to the public housing agency, prior to the maturity of such obligations moneys in an amount which (together with any other moneys irrevocably committed under the annual contributions contract to the payment of principal and interest on such obligations) will suffice to provide for the payment when due of all installments of principal and interest on such obligations, which moneys under the terms of said agreement are required to be used for the purpose of paying the principal and interest on such obligations at their maturity".

AMENDMENT TO LANHAM ACT

SEC. 207. Section 606 of the Act of October 14, 1940, as amended (42 U.S.C. 1586), is amended by deleting in subsection (b) that part of the first sentence which follows the parenthetical phrase and all of the second sentence.