What This Bill Does
This bill changes how the Department of Housing and Urban Development (HUD) inspects and enforces housing standards for apartment buildings that receive government rental assistance payments. It also creates new rules for disciplining HUD employees and requires HUD to issue public reports on property conditions.
##
Who It Affects
* Owners and managers of apartment buildings receiving HUD rental assistance
* Tenants living in HUD-assisted housing
* HUD employees
* Local governments overseeing HUD programs
* Property lenders and mortgagees
##
Key Provisions
* The Secretary of HUD must maintain decent, safe and sanitary conditions at all apartment buildings receiving housing assistance payments and must comply with state and local building codes (Sec. 4)
* If an apartment building scores 45 or lower on a Uniform Physical Condition Standards inspection, or fails to certify that health and safety problems are fixed within 3 days, HUD must notify the owner and can impose penalties including replacing management, imposing fines, reducing payments, transferring the property, or seeking a court receiver (Sec. 4)
* HUD must issue quarterly public reports listing all properties scoring below 60 on inspections, showing which ones have ongoing problems, what enforcement actions are happening, and recommendations to improve conditions (Sec. 4)
* The Secretary can approve rent increases for apartment buildings that underwent a mortgage restructuring if the owner proves the building needs money for repairs and submits a plan to fix it for at least 25 years (Sec. 6)
* HUD must conduct physical inspections of apartment buildings on schedules based on inspection scores: buildings scoring 90 or higher every 3 years, buildings scoring 80-89 every 2 years, and buildings scoring below 80 every year (Sec. 7)
* HUD employees can be removed, demoted or have their pay reduced for misconduct or poor performance, with appeals decided within 45 days (Sec. 3)
##
What Changes
If this bill becomes law, HUD apartment building owners will face stricter enforcement of housing quality standards with specific timelines and consequences. HUD will publicly track which properties are failing inspections and what actions are being taken. Property owners must fix health and safety problems faster and can face management replacement, fines, or loss of government payments. HUD employees will face faster disciplinary actions with limited appeal rights. Tenants in failing properties may receive help switching to other housing if their building poses health and safety risks.
##
Important Definitions
* **Covered employee**: A HUD worker in the civil service, excluding senior executives and political appointees (Sec. 3)
* **Grade**: A job classification level (Sec. 3)
* **Misconduct**: Neglecting duty, wrongdoing, or refusing a job transfer or reassignment (Sec. 3)
* **Pay**: The base salary set by law or administrative action (Sec. 3)
* **UPCS inspection**: Uniform Physical Condition Standards inspection that scores apartment building conditions (Sec. 4)
* **Eligible property**: An apartment building receiving HUD rental assistance that had a mortgage restructuring and either changed owners due to poor conditions, received a failing inspection score previously, or needs major system replacements (Sec. 6)
* **Substantial rehabilitation**: Physical repairs costing more than 25 percent of the building's replacement value to ensure long-term viability (Sec. 7)
* **Standard 1 performing property**: Building scoring 90 points or higher (Sec. 7)
* **Standard 2 performing property**: Building scoring 80-89 points (Sec. 7)
* **Standard 3 performing property**: Building scoring below 80 points (Sec. 7)
##
Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 554
To reform the inspection process of housing assisted by the Department
of Housing and Urban Development, and for other purposes.
IN THE SENATE OF THE UNITED STATES
FEBRUARY 28, 2023
Mr. RUBIO (for himself and Mr. SCOTT of Florida) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
A BILL
To reform the inspection process of housing assisted by the
Department of Housing and Urban Development, and
for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘HUD Inspection Re-
4
form and Capital Improvement Act of 2023’’.
5
SEC. 2. DEFINITION.
6
In this Act, the term ‘‘Secretary’’ means the Sec-
7
retary of Housing and Urban Development.
8
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•S 554 IS
SEC. 3. REDUCTION IN GRADE OR PAY OR REMOVAL FOR
1
MISCONDUCT OR PERFORMANCE OF EM-
2
PLOYEES OF THE DEPARTMENT OF HOUSING
3
AND URBAN DEVELOPMENT.
4
(a) IN GENERAL.—Section 7(c) of the Department
5
of Housing and Urban Development Act (42 U.S.C.
6
3535(c)) is amended—
7
(1) by striking ‘‘The Secretary is authorized’’
8
and inserting the following: ‘‘EMPLOYMENT, COM-
9
PENSATION, AUTHORITY, AND DUTIES
OF PER-
10
SONNEL.—
11
‘‘(1) IN GENERAL.—The Secretary is author-
12
ized’’; and
13
(2) by adding at the end the following:
14
‘‘(2) REDUCTION
IN
GRADE
OR
PAY
OR
RE-
15
MOVAL FOR MISCONDUCT OR PERFORMANCE OF EM-
16
PLOYEES.—
17
‘‘(A) DEFINITIONS.—For purposes of this
18
paragraph—
19
‘‘(i) the term ‘covered employee’—
20
‘‘(I) means an individual holding
21
a position in the civil service in the
22
Department; and
23
‘‘(II) does not include any indi-
24
vidual—
25
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•S 554 IS
‘‘(aa) holding in a position
1
described under sections 5312
2
through 5316 of title 5, United
3
States Code (relating to the Ex-
4
ecutive Schedule);
5
‘‘(bb) holding a position as a
6
limited term appointee, limited
7
emergency appointee, or non-
8
career appointee in the Senior
9
Executive Service, as defined
10
under paragraphs (5), (6), and
11
(7),
respectively,
of
section
12
3132(a) of title 5, United States
13
Code; or
14
‘‘(cc) holding a position of a
15
confidential or policy-determining
16
character under schedule C of
17
subpart C of part 213 of title 5,
18
Code of Federal Regulations;
19
‘‘(ii) the term ‘grade’ means a level of
20
classification under a position classification
21
system;
22
‘‘(iii) the term ‘misconduct’ includes
23
neglect of duty, malfeasance, or failure to
24
accept a directed reassignment or to ac-
25
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•S 554 IS
company a position in a transfer of func-
1
tion; and
2
‘‘(iv) the term ‘pay’ means the rate of
3
basic pay fixed by law or administrative
4
action for the position held by a covered
5
employee.
6
‘‘(B)
ACTIONS
COVERED.—This
para-
7
graph—
8
‘‘(i) applies to a reduction in grade or
9
pay or removal; and
10
‘‘(ii) does not apply to—
11
‘‘(I) a reduction in grade or pay
12
or removal under section 7512 of title
13
5, United States Code;
14
‘‘(II) a reduction in grade or pay
15
or removal under section 7521 of title
16
5, United States Code;
17
‘‘(III) a removal under section
18
7532 of title 5, United States Code;
19
or
20
‘‘(IV) a removal under section
21
3592, 3595, or 7543 of title 5, United
22
States Code.
23
‘‘(C) CAUSE AND PROCEDURE.—
24
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•S 554 IS
‘‘(i) IN
GENERAL.—Notwithstanding
1
any other provision of law, under regula-
2
tions prescribed by the Office of Personnel
3
Management, the Secretary may, if the
4
Secretary determines that the misconduct
5
or performance of a covered employee war-
6
rants such action—
7
‘‘(I) remove the covered employee
8
from the civil service;
9
‘‘(II) reduce the grade of the cov-
10
ered employee; or
11
‘‘(III) reduce the pay of the cov-
12
ered employee.
13
‘‘(ii) REDUCTION IN GRADE.—A cov-
14
ered employee subject to a reduction in
15
grade under clause (i)(II) shall, beginning
16
on the date on which the reduction takes
17
effect, receive the annual rate of pay appli-
18
cable to the reduced grade.
19
‘‘(iii) APPEAL PROCEDURES.—
20
‘‘(I) IN
GENERAL.—Subject to
21
subclause (II) and clause (iv), any re-
22
duction in grade or pay or removal
23
under this paragraph may be appealed
24
to the Merit Systems Protection
25
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•S 554 IS
Board under section 7701 of title 5,
1
United States Code.
2
‘‘(II) TIME
FOR
APPEAL.—An
3
appeal under subclause (I) may only
4
be made if such appeal is made not
5
later than 7 days after the date of
6
such reduction in grade or pay or re-
7
moval.
8
‘‘(iv) REVIEW ON APPEAL.—
9
‘‘(I) IN GENERAL.—Upon receipt
10
of an appeal under clause (iii), the
11
Merit Systems Protection Board shall
12
refer the appeal to an administrative
13
law
judge
pursuant
to
section
14
7701(b)(1) of title 5, United States
15
Code. The administrative law judge
16
shall expedite any such appeal under
17
such section and, in any such case,
18
shall issue a decision not later than
19
45 days after the date on which the
20
Board receives the appeal.
21
‘‘(II) INFORMATION AND ASSIST-
22
ANCE.—To the maximum extent prac-
23
ticable, the Secretary shall provide to
24
the Merit Systems Protection Board,
25
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•S 554 IS
and to any administrative law judge
1
to whom an appeal under this para-
2
graph is referred, such information
3
and assistance as may be necessary to
4
ensure an appeal under this para-
5
graph is expedited.
6
‘‘(III) FINALITY.—Notwithstand-
7
ing any other provision of law, includ-
8
ing section 7703 of title 5, United
9
States Code, the decision of an admin-
10
istrative law judge under subclause (I)
11
shall be final and shall not be subject
12
to any further appeal.
13
‘‘(IV) DELAYED DECISION.—
14
‘‘(aa) IN GENERAL.—In any
15
case in which the administrative
16
law judge cannot issue a decision
17
in accordance with the 45-day re-
18
quirement under subclause (I),
19
the reduction in grade or pay or
20
removal shall be final.
21
‘‘(bb) EXPLANATION.—In a
22
case described in item (aa), the
23
Merit Systems Protection Board
24
shall, not later than 14 days
25
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•S 554 IS
after the date on which the re-
1
duction in grade or pay or re-
2
moval becomes final, submit to
3
Congress a report that explains
4
the reasons why a decision was
5
not issued in accordance with
6
that requirement.
7
‘‘(V) NO STAYS.—The Merit Sys-
8
tems Protection Board or administra-
9
tive law judge may not stay any re-
10
duction in grade or pay or removal ac-
11
tion under this paragraph.
12
‘‘(VI) EFFECT
OF
APPEAL
OF
13
REMOVAL.—During the period begin-
14
ning on the date on which a covered
15
employee appeals a removal from the
16
civil service under this paragraph and
17
ending on the date on which the ad-
18
ministrative law judge issues a final
19
decision on such appeal, the covered
20
employee may not receive any pay,
21
awards, bonuses, incentives, allow-
22
ances, differentials, student loan re-
23
payments, special payments, or bene-
24
fits.
25
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•S 554 IS
‘‘(v)
WHISTLEBLOWER
PROTEC-
1
TION.—In the case of a covered employee
2
seeking corrective action (or on behalf of
3
whom corrective action is sought) from the
4
Office of Special Counsel based on an al-
5
leged prohibited personnel practice de-
6
scribed in section 2302(b) of title 5,
7
United States Code, the Secretary may not
8
reduce the grade or pay or remove the cov-
9
ered employee under this paragraph with-
10
out the approval of the Special Counsel
11
under section 1214(f) of title 5, United
12
States Code.’’.
13
(b) APPLICATION.—The authority under paragraph
14
(2) of section 7(c) of the Department of Housing and
15
Urban Development Act, as added by subsection (a), shall
16
apply to any covered employee (as defined in such para-
17
graph) appointed before, on, or after the date of enact-
18
ment of this Act.
19
(c) CONFORMING AMENDMENTS.—Title 5, United
20
States Code, is amended—
21
(1) in section 4303(f)—
22
(A) in paragraph (3), by striking ‘‘or’’ at
23
the end;
24
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•S 554 IS
(B) in paragraph (4), by striking the pe-
1
riod at the end and inserting ‘‘, or’’; and
2
(C) by adding at the end the following:
3
‘‘(5) the reduction in grade or removal of an
4
employee under section 7(c)(2) of the Department of
5
Housing and Urban Development Act (42 U.S.C.
6
3535(c)(2)).’’;
7
(2) in section 7512—
8
(A) in subparagraph (E), by striking ‘‘,
9
or’’ and inserting a comma;
10
(B) in subparagraph (F), by striking the
11
period at the end and inserting ‘‘, or’’; and
12
(C) by adding at the end the following:
13
‘‘(G) a reduction in grade or pay or removal
14
under section 7(c)(2) of the Department of Housing
15
and
Urban
Development
Act
(42
U.S.C.
16
3535(c)(2)).’’;
17
(3) in section 7521(b), in the matter following
18
paragraph (5)—
19
(A) in subparagraph (B), by striking ‘‘or’’
20
at the end;
21
(B) in subparagraph (C), by striking the
22
period at the end and inserting ‘‘; or’’; and
23
(C) by adding at the end the following:
24
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•S 554 IS
‘‘(D) a reduction in grade or pay or removal
1
under section 7(c)(2) of the Department of Housing
2
and
Urban
Development
Act
(42
U.S.C.
3
3535(c)(2)).’’; and
4
(4) in section 7542, by striking ‘‘or to a re-
5
moval under section 3592 or 3595 of this title’’ and
6
inserting ‘‘to a removal under section 3592 or 3595
7
of this title, to an action under section 713 of title
8
38, or to a reduction in grade or pay or removal
9
under section 7(c)(2) of the Department of Housing
10
and
Urban
Development
Act
(42
U.S.C.
11
3535(c)(2))’’.
12
SEC. 4. ENFORCEMENT OF PHYSICAL CONDITION STAND-
13
ARDS AND TENANT PROTECTION.
14
Section 8(o) of the United States Housing Act of
15
1937 (42 U.S.C. 1437f(o)), as amended by section
16
101(b)(2)(B) of division Q of the Consolidated Appropria-
17
tions Act, 2021 (Public Law 116–260; 134 Stat. 2163),
18
is amended by adding at the end the following:
19
‘‘(22) MAINTENANCE OF PROPERTY.—Any enti-
20
ty receiving housing assistance payments with re-
21
spect to dwelling units covered by a housing assist-
22
ance payments contract shall—
23
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•S 554 IS
‘‘(A) maintain decent, safe, and sanitary
1
conditions at those dwelling units, as deter-
2
mined by the Secretary; and
3
‘‘(B) comply with any standards under ap-
4
plicable State or local laws, rules, ordinances, or
5
regulations relating to the physical condition of
6
those dwelling units.
7
‘‘(23) ENFORCEMENT OF PHYSICAL CONDITION
8
STANDARDS.—
9
‘‘(A) IN
GENERAL.—The Secretary shall
10
take action under subparagraph (C) against an
11
entity with a housing assistance payments con-
12
tract for project-based assistance with respect
13
to a multifamily housing project if—
14
‘‘(i) the project receives a Uniform
15
Physical Condition Standards (in this
16
paragraph referred to as ‘UPCS’) inspec-
17
tion score of not more than 45;
18
‘‘(ii) the entity fails to certify in writ-
19
ing to the Secretary within 3 days of re-
20
ceiving the score under clause (i) that all
21
exigent health and safety deficiencies iden-
22
tified by the inspector at the project have
23
been corrected; or
24
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•S 554 IS
‘‘(iii) the project receives a UPCS in-
1
spection score of more than 45 and less
2
than 59 and has received consecutive
3
scores of less than 60 on UPCS inspec-
4
tions.
5
‘‘(B) APPLICABILITY.—Subparagraph (A)
6
shall—
7
‘‘(i) apply with respect to insured and
8
noninsured projects with dwelling units re-
9
ceiving assistance under this section other
10
than under paragraph (13); and
11
‘‘(ii) not apply to dwelling units re-
12
ceiving assistance with capital or operating
13
funds under section 9.
14
‘‘(C)
NOTIFICATION
AND
ENFORCE-
15
MENT.—
16
‘‘(i) IN GENERAL.—If an entity vio-
17
lates clause (i), (ii), or (iii) of subpara-
18
graph (A), the Secretary shall notify the
19
entity and provide an opportunity for re-
20
sponse not later than 15 days after the
21
date on which the results of the UPCS in-
22
spection are issued.
23
‘‘(ii) PLAN
AND
NOTICE
OF
DE-
24
FAULT.—If violations remain at a project
25
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•S 554 IS
after the 15-day period described in clause
1
(i), the Secretary shall—
2
‘‘(I) develop a plan to bring the
3
project into compliance not later than
4
30 days after the date on which the
5
results of the UPCS inspection are
6
issued; and
7
‘‘(II) provide the owner, the ten-
8
ants of the property, the local govern-
9
ment, any mortgagees, and any con-
10
tract administrator of the project with
11
a Notice of Default with a specified
12
timetable, determined by the Sec-
13
retary, for correcting all deficiencies.
14
‘‘(iii) WITHDRAWAL
OF
NOTICE
OF
15
DEFAULT.—If an appeal submitted by the
16
entity results in a UPCS inspection score
17
of not less than 60, the Secretary may
18
withdraw a Notice of Default issued under
19
clau
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