HUD Inspection Process and Enforcement Reform Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4023 To reform the inspection process of housing assisted by the Department of Housing and Urban Development, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 25, 2019 Mr. FERGUSON introduced the following bill; which was referred to the Committee on Financial Services 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 Proc- 4 ess and Enforcement Reform Act of 2019’’. 5 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 2 •HR 4023 IH SEC. 2. 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 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 3 •HR 4023 IH ‘‘(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 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 4 •HR 4023 IH 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 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 5 •HR 4023 IH ‘‘(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 that the reduction takes effect, 17 receive the annual rate of pay applicable to 18 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 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 6 •HR 4023 IH 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 that the Board 20 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 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 7 •HR 4023 IH 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.—In 14 any case in which the administrative 15 law judge cannot issue a decision in 16 accordance with the 45-day require- 17 ment under subclause (I), the reduc- 18 tion in grade or pay or removal is 19 final. In such a case, the Merit Sys- 20 tems Protection Board shall, within 21 14 days after the date that such re- 22 duction in grade or pay or removal is 23 final, submit to Congress a report 24 that explains the reasons why a deci- 25 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 8 •HR 4023 IH sion was not issued in accordance 1 with such requirement. 2 ‘‘(V) NO STAYS.—The Merit Sys- 3 tems Protection Board or administra- 4 tive law judge may not stay any re- 5 duction in grade or pay or removal ac- 6 tion under this paragraph. 7 ‘‘(VI) EFFECT OF APPEAL OF 8 REMOVAL.—During the period begin- 9 ning on the date on which a covered 10 employee appeals a removal from the 11 civil service under this paragraph and 12 ending on the date that the adminis- 13 trative law judge issues a final deci- 14 sion on such appeal, the covered em- 15 ployee may not receive any pay, 16 awards, bonuses, incentives, allow- 17 ances, differentials, student loan re- 18 payments, special payments, or bene- 19 fits. 20 ‘‘(v) WHISTLEBLOWER PROTEC- 21 TION.—In the case of a covered employee 22 seeking corrective action (or on behalf of 23 whom corrective action is sought) from the 24 Office of Special Counsel based on an al- 25 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 9 •HR 4023 IH leged prohibited personnel practice de- 1 scribed in section 2302(b) of title 5, 2 United States Code, the Secretary may not 3 reduce the grade or pay or remove the cov- 4 ered employee under this paragraph with- 5 out the approval of the Special Counsel 6 under section 1214(f) of title 5, United 7 States Code.’’. 8 (b) APPLICATION.—The authority under paragraph 9 (2) of section 7(c) of the Department of Housing and 10 Urban Development Act, as added by subsection (a), shall 11 apply to any covered employee (as defined in such para- 12 graph) appointed before, on, or after the date of enact- 13 ment of this Act. 14 (c) CONFORMING AMENDMENTS.—Title 5, United 15 States Code, is amended— 16 (1) in section 4303(f)— 17 (A) in paragraph (3), by striking ‘‘or’’ at 18 the end; 19 (B) in paragraph (4), by striking the pe- 20 riod at the end and inserting ‘‘, or’’; and 21 (C) by adding at the end the following: 22 ‘‘(5) the reduction in grade or removal of an 23 employee under section 7(c)(2) of the Department of 24 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 10 •HR 4023 IH Housing and Urban Development Act (42 U.S.C. 1 3535(c)(2)).’’; 2 (2) in section 7512— 3 (A) in subparagraph (E), by striking ‘‘; 4 or’’ and inserting a comma; 5 (B) in subparagraph (F), by striking the 6 period at the end and inserting ‘‘, or’’; and 7 (C) by adding at the end the following: 8 ‘‘(G) 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 (3) in section 7521(b), in the matter following 13 paragraph (5)— 14 (A) in subparagraph (B), by striking ‘‘or’’ 15 at the end; 16 (B) in subparagraph (C), by striking the 17 period at the end and inserting ‘‘; or’’; and 18 (C) by adding at the end the following: 19 ‘‘(D) a reduction in grade or pay or removal 20 under section 7(c)(2) of the Department of Housing 21 and Urban Development Act (42 U.S.C. 22 3535(c)(2)).’’; and 23 (4) in section 7542, by striking ‘‘or to a re- 24 moval under section 3592 or 3595 of this title’’ and 25 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 11 •HR 4023 IH inserting ‘‘to a removal under section 3592 or 3595 1 of this title, to an action under section 713 of title 2 38, or to a reduction in grade or pay or removal 3 under section 7(c)(2) of the Department of Housing 4 and Urban Development Act (42 U.S.C. 5 3535(c)(2))’’. 6 SEC. 3. ENFORCEMENT OF PHYSICAL CONDITION STAND- 7 ARDS AND TENANT PROTECTION. 8 Section 8(o) of the United States Housing Act of 9 1937 (42 U.S.C. 1437f(o)) is amended by adding at the 10 end the following: 11 ‘‘(21) MAINTENANCE OF PROPERTY.—Any enti- 12 ty receiving housing assistance payments with re- 13 spect to dwelling units covered by a housing assist- 14 ance payments contract shall— 15 ‘‘(A) maintain decent, safe, and sanitary 16 conditions at those dwelling units, as deter- 17 mined by the Secretary; and 18 ‘‘(B) comply with any standards under ap- 19 plicable State or local laws, rules, ordinances, or 20 regulations relating to the physical condition of 21 those dwelling units. 22 ‘‘(22) ENFORCEMENT OF PHYSICAL CONDITION 23 STANDARDS.— 24 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 12 •HR 4023 IH ‘‘(A) IN GENERAL.—The Secretary shall 1 take action under subparagraph (C) against an 2 entity with a housing assistance payments con- 3 tract for project-based assistance with respect 4 to a multifamily housing project if— 5 ‘‘(i) the project receives a Uniform 6 Physical Condition Standards (in this 7 paragraph referred to as ‘UPCS’) inspec- 8 tion score of not more than 30; 9 ‘‘(ii) the entity fails to certify in writ- 10 ing to the Secretary within 3 days of re- 11 ceiving the score under clause (i) that all 12 exigent health and safety deficiencies iden- 13 tified by the inspector at the project have 14 been corrected; or 15 ‘‘(iii) the project receives a UPCS in- 16 spection score of more than 30 and less 17 than 59 and has received consecutive 18 scores of less than 60 on UPCS inspec- 19 tions. 20 ‘‘(B) APPLICABILITY.—Subparagraph (A) 21 shall— 22 ‘‘(i) apply with respect to insured and 23 noninsured projects with dwelling units re- 24 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 13 •HR 4023 IH ceiving assistance under this section other 1 than under paragraph (13); and 2 ‘‘(ii) not apply to dwelling units re- 3 ceiving assistance with capital or operating 4 funds under section 9. 5 ‘‘(C) NOTIFICATION AND ENFORCE- 6 MENT.— 7 ‘‘(i) IN GENERAL.—If an entity vio- 8 lates clause (i), (ii), or (iii) of subpara- 9 graph (A), the Secretary shall notify the 10 entity and provide an opportunity for re- 11 sponse not later than 15 days after the 12 date on which the results of the UPCS in- 13 spection are issued. 14 ‘‘(ii) PLAN AND NOTICE OF DE- 15 FAULT.—If violations remain at a project 16 after the 15-day period described in clause 17 (i), the Secretary shall— 18 ‘‘(I) develop a plan to bring the 19 project into compliance not later than 20 30 days after the date on which the 21 results of the UPCS inspection are 22 issued; and 23 ‘‘(II) provide the owner, the ten- 24 ants of the property, the local govern- 25 VerDate Sep 11 2014 03:58 Aug 14, 2019 Jkt 089200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H4023.IH H4023 kjohnson on DSK79L0C42 with BILLS 14 •HR 4023 IH ment, any mortgagees, and any con- 1 tract administrator of the project with 2 a Notice of Default with a specified 3 timetable, determined by the Sec- 4 retary, for correcting all deficiencies. 5 ‘‘(iii) WITHDRAWAL OF NOTICE OF 6 DEFAULT.—If an appeal submitted by the 7 entity results in a UPCS inspection score 8 of not less than 60, the Secretary may 9 withdraw a Notice of Default issued under 10 clause (ii)(II). 11 ‘‘(iv) PENALTIES.—If, at the end of 12 the timetable described in clause (ii)(II), 13 the entity fails to fully correct all defi- 14 ciencies in the project, the Secretary 15 may— 16 ‘‘(I) require immediate replace- 17 ment of project management with a 18 management agent approved by the 19 Secretary; 20 ‘‘(II) impose civil money pen- 21 alties, which shall be used solely for 22 the purpose of supporting safe and 23 [Text truncated for display. 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