; or (ii) is repeatedly referred to the Secretary for remediation by a Performance Based Contract Administrator through the process established under paragraph (3). (B) Amount A penalty imposed under subparagraph (A) shall be in an amount equal to not less than 1 percent of the annual budget authority the owner is allocated under a housing assistance payment contract. (C) Use of amounts Any amounts collected under this paragraph shall be used solely for the purpose of supporting safe and sanitary conditions at applicable structures or for tenant relocation, as designated by the Secretary, with priority given to the tenants of the structure that led to the penalty. (5) Applicability This subsection shall not apply to any property assisted under subsection (o). . 3. Issuance of report Not later than 1 year after the date of enactment of this Act, the Secretary of Housing and Urban Development shall submit to Congress a report that— (1) examines the adequacy of capital reserves for each structure covered under a housing assistance payment contract under section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f ); (2) examines the use of funds derived from a housing assistance payment contract for purposes unrelated to the maintenance and capitalization of the structure covered under the contract; and (3) includes any administrative or legislative recommendations to further improve the living conditions at those structures.