I
105TH CONGRESS
1ST SESSION
H. R. 2
To repeal the United States Housing Act of 1937, deregulate the public
housing program and the program for rental housing assistance for
low-income families, and increase community control over such programs,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 7, 1997
Mr. LAZIO of New York introduced the following bill; which was referred to
the Committee on Banking and Financial Services
A BILL
To repeal the United States Housing Act of 1937, deregulate
the public housing program and the program for rental
housing assistance for low-income families, and increase
community control over such programs, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Housing Opportunity and Responsibility Act of 1997’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Declaration of policy to renew American neighborhoods.
TITLE I—GENERAL PROVISIONS
Sec. 101. Statement of purpose.
Sec. 102. Definitions.
Sec. 103. Organization of public housing agencies.
Sec. 104. Determination of adjusted income and median income.
Sec. 105. Community work and family self-sufficiency agreements.
Sec. 106. Local housing management plans.
Sec. 107. Review of plans.
Sec. 108. Reporting requirements.
Sec. 109. Pet ownership.
Sec. 110. Administrative grievance procedure.
Sec. 111. Headquarters reserve fund.
Sec. 112. Labor standards.
Sec. 113. Nondiscrimination.
Sec. 114. Prohibition on use of funds.
Sec. 115. Inapplicability to Indian housing.
Sec. 116. Regulations.
TITLE II—PUBLIC HOUSING
Subtitle A—Block Grants
Sec. 201. Block grant contracts.
Sec. 202. Grant authority, amount, and eligibility.
Sec. 203. Eligible and required activities.
Sec. 204. Determination of grant allocation.
Sec. 205. Sanctions for improper use of amounts.
Subtitle B—Admissions and Occupancy Requirements
Sec. 221. Low-income housing requirement.
Sec. 222. Family eligibility.
Sec. 223. Preferences for occupancy.
Sec. 224. Admission procedures.
Sec. 225. Family choice of rental payment.
Sec. 226. Lease requirements.
Sec. 227. Designated housing for elderly and disabled families.
Subtitle C—Management
Sec. 231. Management procedures.
Sec. 232. Housing quality requirements.
Sec. 233. Employment of residents.
Sec. 234. Resident councils and resident management corporations.
Sec. 235. Management by resident management corporation.
Sec. 236. Transfer of management of certain housing to independent manager
at request of residents.
Sec. 237. Resident opportunity program.
Subtitle D—Homeownership
Sec. 251. Resident homeownership programs.
Subtitle E—Disposition, Demolition, and Revitalization of Developments
Sec. 261. Requirements for demolition and disposition of developments.
Sec. 262. Demolition, site revitalization, replacement housing, and choice-based
assistance grants for developments.
Sec. 263. Voluntary voucher system for public housing.
Subtitle F—General Provisions
Sec. 271. Payment of non-Federal share.
Sec. 272. Authorization of appropriations for block grants.
Sec. 273. Funding for operation safe home.
Sec. 274. Funding for relocation of victims of domestic violence.
TITLE III—CHOICE-BASED RENTAL HOUSING AND
HOMEOWNERSHIP ASSISTANCE FOR LOW-INCOME FAMILIES
Subtitle A—Allocation
Sec. 301. Authority to provide housing assistance amounts.
Sec. 302. Contracts with PHA’s.
Sec. 303. Eligibility of PHA’s for assistance amounts.
Sec. 304. Allocation of amounts.
Sec. 305. Administrative fees.
Sec. 306. Authorizations of appropriations.
Sec. 307. Conversion of section 8 assistance.
Subtitle B—Choice-Based Housing Assistance for Eligible Families
Sec. 321. Eligible families and preferences for assistance.
Sec. 322. Resident contribution.
Sec. 323. Rental indicators.
Sec. 324. Lease terms.
Sec. 325. Termination of tenancy.
Sec. 326. Eligible owners.
Sec. 327. Selection of dwelling units.
Sec. 328. Eligible dwelling units.
Sec. 329. Homeownership option.
Sec. 330. Assistance for rental of manufactured homes.
Subtitle C—Payment of Housing Assistance on Behalf of Assisted Families
Sec. 351. Housing assistance payments contracts.
Sec. 352. Amount of monthly assistance payment.
Sec. 353. Payment standards.
Sec. 354. Reasonable rents.
Sec. 355. Prohibition of assistance for vacant rental units.
Subtitle D—General and Miscellaneous Provisions
Sec. 371. Definitions.
Sec. 372. Rental assistance fraud recoveries.
Sec. 373. Study regarding geographic concentration of assisted families.
TITLE IV—HOME RULE FLEXIBLE GRANT OPTION
Sec. 401. Purpose.
Sec. 402. Flexible grant program.
Sec. 403. Covered housing assistance.
Sec. 404. Program requirements.
Sec. 405. Applicability of certain provisions.
Sec. 406. Application.
Sec. 407. Training.
Sec. 408. Accountability.
Sec. 409. Definitions.
TITLE V—ACCOUNTABILITY AND OVERSIGHT OF PUBLIC
HOUSING AGENCIES
Subtitle A—Study of Alternative Methods for Evaluating Public Housing
Agencies
Sec. 501. In general.
Sec. 502. Purposes.
Sec. 503. Evaluation of various performance evaluation systems.
Sec. 504. Consultation.
Sec. 505. Contract to conduct study.
Sec. 506. Report.
Sec. 507. Funding.
Sec. 508. Effective date.
Subtitle B—Housing Evaluation and Accreditation Board
Sec. 521. Establishment.
Sec. 522. Membership.
Sec. 523. Functions.
Sec. 524. Powers.
Sec. 525. Fees.
Sec. 526. GAO audit.
Subtitle C—Interim Applicability of Public Housing Management Assessment
Program
Sec. 531. Interim applicability.
Sec. 532. Management assessment indicators.
Sec. 533. Designation of PHA’s.
Sec. 534. On-site inspection of troubled PHA’s.
Sec. 535. Administration.
Subtitle D—Accountability and Oversight Standards and Procedures
Sec. 541. Audits.
Sec. 542. Performance agreements for authorities at risk of becoming troubled.
Sec. 543. Performance agreements and CDBG sanctions for troubled PHA’s.
Sec. 544. Option to demand conveyance of title to or possession of public
housing.
Sec. 545. Removal of ineffective PHA’s.
Sec. 546. Mandatory takeover of chronically troubled PHA’s.
Sec. 547. Treatment of troubled PHA’s.
Sec. 548. Maintenance of records.
Sec. 549. Annual reports regarding troubled PHA’s.
Sec. 550. Applicability to resident management corporations.
TITLE VI—REPEALS AND RELATED AMENDMENTS
Subtitle A—Repeals, Effective Date, and Savings Provisions
Sec. 601. Effective date and repeal of United States Housing Act of 1937.
Sec. 602. Other repeals.
Subtitle B—Other Provisions Relating to Public Housing and Rental
Assistance Programs
Sec. 621. Allocation of elderly housing amounts.
Sec. 622. Pet ownership.
Sec. 623. Review of drug elimination program contracts.
Sec. 624. Amendments to Public and Assisted Housing Drug Elimination Act
of 1990.
Subtitle C—Limitations Relating to Occupancy in Federally Assisted Housing
Sec. 641. Screening of applicants.
Sec. 642. Termination of tenancy and assistance for illegal drug users and alco-
hol abusers.
Sec. 643. Lease requirements.
Sec. 644. Availability of criminal records for tenant screening and eviction.
Sec. 645. Definitions.
TITLE VII—AFFORDABLE HOUSING AND MISCELLANEOUS
PROVISIONS
Sec. 701. Rural housing assistance.
Sec. 702. Treatment of occupancy standards.
Sec. 703. Implementation of plan.
Sec. 704. Income eligibility for HOME and CDBG programs.
Sec. 705. Prohibition of use of CDBG grants for employment relocation activi-
ties.
Sec. 706. Use of American products.
Sec. 707. Consultation with affected areas in settlement of litigation.
Sec. 708. Use of assisted housing by aliens.
Sec. 709. Use of Federal excess and surplus property for self-help housing pro-
grams.
Sec. 710. Effective date.
SEC. 2. DECLARATION OF POLICY TO RENEW AMERICAN
NEIGHBORHOODS.
The Congress hereby declares that—
(1) the Federal Government has a responsibility
to promote the general welfare of the Nation—
(A) by using Federal resources to aid fami-
lies and individuals seeking affordable homes
that are safe, clean, and healthy and, in par-
ticular, assisting responsible, deserving citizens
who cannot provide fully for themselves because
of temporary circumstances or factors beyond
their control;
(B) by working to ensure a thriving na-
tional economy and a strong private housing
market; and
(C) by developing effective partnerships
among the Federal Government, State and local
governments, and private entities that allow
government to accept responsibility for foster-
ing the development of a healthy marketplace
and allow families to prosper without govern-
ment involvement in their day-to-day activities;
(2) the Federal Government cannot through its
direct action alone provide for the housing of every
American citizen, or even a majority of its citizens,
but it is the responsibility of the Government to pro-
mote and protect the independent and collective ac-
tions of private citizens to develop housing and
strengthen their own neighborhoods;
(3) the Federal Government should act where
there is a serious need that private citizens or
groups cannot or are not addressing responsibly;
(4) housing is a fundamental and necessary
component of bringing true opportunity to people
and communities in need, but providing physical
structures to house low-income families will not by
itself pull generations up from poverty;
(5) it is a goal of our Nation that all citizens
have decent and affordable housing; and
(6) our Nation should promote the goal of pro-
viding decent and affordable housing for all citizens
through the efforts and encouragement of Federal,
State, and local governments, and by the independ-
ent and collective actions of private citizens, organi-
zations, and the private sector.
TITLE I—GENERAL PROVISIONS
SEC. 101. STATEMENT OF PURPOSE.
The purpose of this Act is to promote safe, clean, and
healthy housing that is affordable to low-income families,
and thereby contribute to the supply of affordable housing,
by—
(1) deregulating and decontrolling public hous-
ing agencies, thereby enabling them to perform as
property and asset managers;
(2) providing for more flexible use of Federal
assistance to public housing agencies, allowing the
authorities to leverage and combine assistance
amounts with amounts obtained from other sources;
(3) facilitating mixed income communities;
elderly family’’ mean a family whose head (or his or
her spouse), or whose sole member, is an elderly per-
son or a near-elderly person, respectively. Such
terms include 2 or more elderly persons or near-el-
derly persons living together, and 1 or more such
persons living with 1 or more persons determined
under the regulations of the Secretary to be essential
to their care or well-being.
(7) ELDERLY PERSON.—The term ‘‘elderly per-
son’’ means a person who is at least 62 years of age.
(8) ELIGIBLE PUBLIC HOUSING AGENCY.—The
term ‘‘eligible public housing agency’’ means, with
respect to a fiscal year, a public housing agency that
is eligible under section 202(d) for a grant under
this title.
(9) FAMILY.—The term ‘‘family’’ includes a
family with or without children, an elderly family, a
near-elderly family, a disabled family, and a single
person.
(10) GROUP HOME AND INDEPENDENT LIVING
FACILITY.—The terms ‘‘group home’’ and ‘‘inde-
pendent living facility’’ have the meanings given
such terms in section 811(k) of the Cranston-Gon-
zalez National Affordable Housing Act.
(11) INCOME.—The term ‘‘income’’ means, with
respect to a family, income from all sources of each
member of the household, as determined in accord-
ance with criteria prescribed by the applicable public
housing agency and the Secretary, except that the
following amounts shall be excluded:
(A) Any amounts not actually received by
the family.
(B) Any amounts that would be eligible for
exclusion under section 1613(a)(7) of the Social
Security Act.
(12) LOCAL
HOUSING
MANAGEMENT
PLAN.—
The term ‘‘local housing management plan’’ means,
with respect to any fiscal year, the plan under sec-
tion 106 of a public housing agency for such fiscal
year.
(13) LOW-INCOME FAMILY.—The term ‘‘low-in-
come family’’ means a family whose income does not
exceed 80 percent of the median income for the
area, as determined by the Secretary with adjust-
ments for smaller and larger families, except that
the Secretary may, for purposes of this paragraph,
establish income ceilings higher or lower than 80
percent of the median for the area on the basis of
the public housing agency’s findings that such vari-
ations are necessary because of unusually high or
low family incomes.
(14) LOW-INCOME HOUSING.—The term ‘‘low-
income housing’’ means dwellings that comply with
the requirements—
(A) under title II for assistance under such
title for the dwellings; or
(B) under title III for rental assistance
payments under such title for the dwellings.
(15) 
NEAR-ELDERLY
PERSON.—The 
term
‘‘near-elderly person’’ means a person who is at least
55 years of age.
(16) OPERATION.—When used in reference to
public housing, the term ‘‘operation’’ means any or
all undertakings appropriate for management, oper-
ation, services, maintenance, security (including the
cost of security personnel), or financing in connec-
tion with a public housing development, including
the financing of resident programs and services.
(17) PERSON WITH DISABILITIES.—The term
‘‘person with disabilities’’ means a person who—
(A) has a disability as defined in section
223 of the Social Security Act; or
(B) has a developmental disability as de-
fined in section 102 of the Developmental Dis-
abilities Assistance and Bill of Rights Act.
Such term shall not exclude persons who have the
disease of acquired immunodeficiency syndrome or
any conditions arising from the etiologic agent for
acquired immunodeficiency syndrome. Notwithstand-
ing any other provision of law, no individual shall be
considered a person with disabilities, for purposes of
eligibility for public housing under title II of this
Act, solely on the basis of any drug or alcohol de-
pendence. The Secretary shall consult with other ap-
propriate Federal agencies to implement the preced-
ing sentence.
(18) PRODUCTION.—When used in reference to
public housing, the term ‘‘production’’ means any or
all undertakings necessary for planning, land acqui-
sition, financing, demolition, construction, or equip-
ment, in connection with the construction, acquisi-
tion, or rehabilitation of a property for use as a pub-
lic housing development, including activity in connec-
tion with a public housing development that is con-
fined to the reconstruction, remodeling, or repair of
existing buildings.
(19) PRODUCTION COST.—When used in ref-
erence to public housing, the term ‘‘production cost’’
means the costs incurred by a public housing agency
for production of public housing and the necessary
financing for production (including the payment of
carrying charges and acquisition costs).
(20) PUBLIC
HOUSING.—The term ‘‘public
housing’’ means housing, and all necessary appur-
tenances thereto, that—
(A) is low-income housing or low-income
dwelling units in mixed income housing (as pro-
vided in section 221(c)(2)); and
(B)(i) is subject to an annual block grant
contract under title II; or
(ii) was subject to an annual block grant
contract under title II (or an annual contribu-
tions contract under the United States Housing
Act of 1937) which is not in effect, but for
which occupancy is limited in accordance with
the requirements under section 222(a).
(21) PUBLIC
HOUSING
AGENCY.—The term
‘‘public housing agency’’ is defined in section 103.
(22) RESIDENT COUNCIL.—The term ‘‘resident
council’’ means an organization or association that
meets the requirements of section 234(a).
(23) RESIDENT MANAGEMENT CORPORATION.—
The term ‘‘resident management corporation’’ means
a corporation that meets the requirements of section
234(b)(2).
(24) RESIDENT PROGRAM.—The term ‘‘resident
programs and services’’ means programs and serv-
ices for families residing in public housing develop-
ments. Such term includes (A) the development and
maintenance of resident organizations which partici-
pate in the management of public housing develop-
ments, (B) the training of residents to manage and
operate the public housing development and the uti-
lization of their services in management and oper-
ation of the development, (C) counseling on house-
hold management, housekeeping, budgeting, money
management, homeownership issues, child care, and
similar matters, (D) advice regarding resources for
job training and placement, education, welfare,
health, and other community services, (E) services
that are directly related to meeting resident needs
and providing a wholesome living environment; and
(F) referral to appropriate agencies in the commu-
nity when necessary for the provision of such serv-
ices. To the maximum extent available and appro-
priate, existing public and private agencies in the
community shall be used for the provision of such
services.
(25) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Housing and Urban Develop-
ment.
(26) STATE.—The term ‘‘State’’ means the
States of the United States, the District of Colum-
bia, the Commonwealth of Puerto Rico, the Com-
monwealth of the Northern Mariana Islands, Guam,
the Virgin Islands, American Samoa, and any other
territory or possession of the United States and In-
dian tribes.
(27) VERY
LOW-INCOME
FAMILY.—The term
‘‘very low-income family’’ means a low-income family
whose income does not exceed 50 percent of the me-
dian family income for the area, as determined by
the Secretary with adjustments for smaller and larg-
er families, except that the Secretary may, for pur-
poses of this paragraph, establish income ceilings
higher or lower than 50 percent of the median for
the area on the basis of the public housing agency’s
findings that such variations are necessary because
of unusually high or low family incomes.
SEC. 103. ORGANIZATION OF PUBLIC HOUSING AGENCIES.
(a) REQUIREMENTS.—For purposes of this Act, the
terms ‘‘public housing agency’’ and ‘‘agency’’ mean any
entity that—
(1) is—
(A) a public housing agency that was au-
thorized under the United States Housing Act
of 1937 to engage in or assist in the develop-
ment or operation of low-income housing;
(B) authorized under this Act to engage in
or assist in the development or operation of
low-income housing by any State, county, mu-
nicipality, or other governmental body or public
entity;
(C) an entity authorized by State law to
administer 
choice-based 
housing 
assistance
under title III; or
(D) an entity selected by the Secretary,
pursuant to subtitle D of title V, to manage
housing; and
(2) complies with the requirements under sub-
section (b).
The term does not include any entity that is an Indian
housing authority for purposes of the United States Hous-
ing Act of 1937 (as in effect before the effectiveness of
the Native American Housing Assistance and Self-Deter-
mination Act of 1996) or a tribally designated housing en-
tity, as such term is defined in section 4 of the Native
American Housing Assistance and Self-Determination Act
of 1996.
(b) GOVERNANCE.—
(1) BOARD OF DIRECTORS.—Each public hous-
ing agency shall have a board of directors or other
form of governance as prescribed in State or local
law. No person may be barred from serving on such
board or body because of such person’s residency in
a public housing development or status as an as-
sisted family under title III.
(2) RESIDENT MEMBERSHIP.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), in localities in which a pub-
lic housing agency is governed by a board of di-
rectors or other similar body, the board or body
shall include not less than 1 member who is an
elected public housing resident member (as such
term is defined in paragraph (5)).
(B) EXCEPTIONS.—The requirement in
subparagraph (A) with respect to elected public
housing resident members shall not apply to—
(i) any State or local governing body
that serves as a public housing agency for
purposes of this Act and whose responsibil-
ities include substantial activities other
than acting as the public housing agency,
except that such requirement shall apply to
any advisory committee or organization
that is established by such governing body
and whose responsibilities relate only to
the governing body’s functions as a public
housing agency for purposes of this Act;
(ii) any public housing agency that
owns or operates less than 250 public
housing dwelling units (including any
agency that does not own or operate public
housing); or
(iii) any public housing agency in a
State that requires the members of the
board of directors or other similar body of
a public housing agency to be salaried and
to serve on a full-time basis.
(3) FULL PARTICIPATION.—No public housing
agency may limit or restrict the capacity or offices
in which a member of such board or body may serve
on such board or body solely because of the mem-
ber’s status as a resident member.
(4) CONFLICTS OF INTEREST.—The Secretary
shall establish guidelines to prevent conflicts of in-
terest on the part of members of the board or direc-
tors or governing body of a public housing agency.
(5) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
(A) ELECTED PUBLIC HOUSING RESIDENT
MEMBER.—The term ‘‘elected public housing
resident member’’ means, with respect to the
public housing agency involved, an individual
who is a resident member of the board of direc-
tors (or other similar governing body of the
agency) by reason of election to such position
pursuant to an election—
(i) in which eligibility for candidacy in
such election is limited to individuals
who—
(I) maintain their principal resi-
dence in a dwelling unit of public
housing administered or assisted by
the agency; and
(II) have not been convicted of a
felony;
(ii) in which only residents of dwelling
units of public housing administered by the
agency may vote; and
(iii) that is conducted in accordance
with standards and procedures for such
election, which shall be established by the
Secretary.
(B) RESIDENT MEMBER.—The term ‘‘resi-
dent member’’ means a member of the board of
directors or other similar governing body of a
public housing agency who is a resident of a
public housing dwelling unit owned, adminis-
tered, or assisted by the agency or is a member
of an assisted family (as such term is defined
in section 371) assisted by the agency.
(c) ESTABLISHMENT OF POLICIES.—Any rules, regu-
lations, policies, standards, and procedures necessary to
implement policies required under section 106 to be in-
cluded in the local housing management plan for a public
housing agency shall be approved by the board of directors
or similar governing body of the agency and shall be pub-
licly available for review upon request.
SEC. 104. DETERMINATION OF ADJUSTED INCOME AND ME-
DIAN INCOME.
(a) ADJUSTED INCOME.—For purposes of this Act,
the term ‘‘adjusted income’’ means, with respect to a fam-
ily, the difference between the income of the members of
the family residing in a dwelling unit or the persons on
a lease and the amount of any income exclusions for the
family under subsections (b) and (c), as determined by the
public housing agency.
(b) MANDATORY EXCLUSIONS FROM INCOME.—In
determining adjusted income, a public housing agency
shall exclude from the annual income of a family the fol-
lowing amounts:
(1) ELDERLY AND DISABLED FAMILIES.—$400
for any elderly or disabled family.
(2) MEDICAL
EXPENSES.—The amount by
which 3 percent of the annual family income is ex-
ceeded by the sum of—
(A) unreimbursed medical expenses of any
elderly family;
(B) unreimbursed medical expenses of any
nonelderly family, except that this subpara-
graph shall apply only to the extent approved in
appropriation Acts; and
(C) unreimbursed reasonable attendant
care and auxiliary apparatus expenses for each
handicapped member of the family, to the ex-
tent necessary to enable any member of such
family (including such handicapped member) to
be employed.
(3) CHILD CARE EXPENSES.—Any reasonable
child care expenses necessary to enable a member of
the family to be employed or to further his or her
education.
(4) MINORS, STUDENTS, AND PERSONS WITH
DISABILITIES.—$480 for each member of the family
residing in the household (other than the head of the
household or his or her spouse) who is less than 18
years of age or is attending school or vocational
training on a full-time basis, or who is 18 years of
age or older and is a person with disabilities.
(5) CHILD SUPPORT PAYMENTS.—Any payment
made by a member of the family for the support and
maintenance of any child who does not reside in the
household, except that the amount excluded under
this paragraph may not exceed $480 for each child
for whom such payment is made.
(6) EARNED INCOME OF MINORS.—The amount
of any earned income of a member of the family who
is not—
(A) 18 years of age or older; and
(B) the head of the household (or the
spouse of the head of the household).
(c) PERMISSIVE EXCLUSIONS FROM INCOME.—In de-
termining adjusted income, a public housing agency may,
in the discretion of the agency, establish exclusions from
the annual income of a family. Such exclusions may in-
clude the following amounts:
(1) EXCESSIVE TRAVEL EXPENSES.—Excessive
travel expenses in an amount not to exceed $25 per
family per week, for employment- or education-relat-
ed travel.
(2) EARNED
INCOME.—An amount of any
earned income of the family, established at the dis-
cretion of the public housing agency, which may be
based on—
(A) all earned income of the family,
(B) the amount earned by particular mem-
bers of the family;
(C) the amount earned by families having
certain characteristics; or
(D) the amount earned by families or
members during certain periods or from certain
sources.
(3) OTHERS.—Such other amounts for other
purposes, as the public housing agency may estab-
lish.
(d) MEDIAN INCOME.—In determining median in-
comes (of persons, families, or households) for an area or
establishing any ceilings or limits based on income under
this Act, the Secretary shall determine or establish area
median incomes and income ceilings and limits for West-
chester and Rockland Counties, in the State of New York,
as if each such county were an area not contained within
the metropolitan statistical area in which it is located. In
determining such area median incomes or establishing
such income ceilings or limits for the portion of such met-
ropolitan statistical area that does not include Westchester
or Rockland Counties, the Secretary shall determine or es-
tablish area median incomes and income ceilings and lim-
its as if such portion included Westchester and Rockland
Counties.
SEC. 105. COMMUNITY WORK AND FAMILY SELF-SUFFI-
CIENCY AGREEMENTS.
(a) IN GENERAL.—Except as provided in subsection
(d), a public housing agency shall enter into an agreement
with each adult member and head of household of each
family residing in a dwelling unit in public housing of the
agency and each family on behalf of whom the agency pro-
vides housing assistance under title III. Under the agree-
ment the family shall agree that, as a condition of occu-
pancy of the public housing dwelling unit or of receiving
such housing assistance, the family will comply with the
terms of the agreement.
(b) TERMS.—Agreements entered into pursuant to
this section shall—
(1) be designed to encourage and facilitate the
economic self-sufficiency of the assisted family enter-
ing into the agreement and graduating the family
from assisted housing to unassisted housing;
(2) provide that each adult member of the fam-
ily shall contribute not less than 8 hours of work per
month (not including political activities) within the
community in which the family resides;
(3) provide a target date by which the family
intends to graduate from or terminate tenancy in
the assisted housing; and
(4) provide for any resources, services, and as-
sistance relating to self-sufficiency that will be made
available to the family.
(c) INCORPORATION INTO LEASE.—A self-sufficiency
contract under this subsection shall be incorporated by
reference into a lease under section 226 or 324, as applica-
ble.
(d) EXEMPTIONS.—A public housing agency shall
provide for the exemption, from the applicability of the
requirements under subsections (a), (b), and (c) of each
individual who is—
(1) an elderly person and unable, as determined
in accordance with guidelines established by the Sec-
retary, to comply with the requirement;
(2) a person with disabilities and unable (as so
determined) to comply with the requirement;
(3) working, attending school or vocational
training, or otherwise complying with work require-
ments applicable under other public assistance pro-
grams, and unable (as so determined) to comply
with the requirement; or
(4) otherwise physically impaired, as certified
by a doctor, and is therefore unable to comply with
the requirement.
SEC. 106. LOCAL HOUSING MANAGEMENT PLANS.
(a) 5-YEAR PLAN.—The Secretary shall provide for
each public housing agency to submit to the Secretary,
once every 5 years, a plan under this subsection for the
agency covering a period consisting of 5 fiscal years. Each
such plan shall contain, with respect to the 5-year period
covered by the plan, the following information:
(1) STATEMENT OF MISSION.—A statement of
the mission of the agency for serving the needs of
low-income families in the jurisdiction of the agency
during such period.
(2) GOALS AND OBJECTIVES.—A statement of
the goals and objectives of the agency that will en-
able the agency to serve the needs identified pursu-
ant to paragraph (1) during such period.
(3) CAPITAL IMPROVEMENT OVERVIEW.—If the
agency will provide capital improvements for public
housing developments during such period, an over-
view of such improvements, the rationale for such
improvements, and an analysis of how such improve-
ments will enable the agency to meet its goals, objec-
tives, and mission.
The first 5-year plan under this subsection for a public
housing agency shall be submitted for the 5-year period
beginning with the first fiscal year for which the agency
receives assistance under this Act.
(b) ANNUAL PLAN.—The Secretary shall provide for
each public housing agency to submit to the Secretary a
local housing management plan under this section for each
fiscal year that contains the information required under
subsection (d). For each fiscal year after the initial sub-
mission of a plan under this section by a public housing
agency, the agency may comply with requirements for sub-
mission of a plan under this subsection by submitting an
update of the plan for the fiscal year.
(c) PROCEDURES.—The Secretary shall establish re-
quirements and procedures for submission and review of
plans, including requirements for timing and form of sub-
mission, and for the contents of such plans. Such proce-
dures shall provide that a public housing agency—
(1) shall, in conjunction with the relevant State
or unit of general local government, establish proce-
dures to ensure that the plan under this section is
consistent with the applicable comprehensive housing
affordability strategy (or any consolidated plan in-
corporating such strategy) for the jurisdiction in
which the public housing agency is located, in ac-
cordance with title I of the Cranston-Gonzalez Na-
tional Affordable Housing Act; and
(2) may, at the option of the agency, submit a
plan under this section together with, or as part of,
the comprehensive housing affordability strategy (or
any consolidated plan incorporating such strategy)
for the relevant jurisdiction, and for concomitant re-
view of such plans submitted together.
(C) an estimate of the costs of operation
and the market rental value of each public
housing development.
(3) POPULATION SERVED.—A statement of the
policies of the agency governing eligibility, admis-
sions, and occupancy of families with respect to pub-
lic housing dwelling units and housing assistance
under title III, including—
(A) the requirements for eligibility for such
units and assistance and the method and proce-
dures by which eligibility and income will be de-
termined and verified;
(B) the requirements for selection and ad-
missions of eligible families for such units and
assistance, including any preferences and proce-
dures established by the agency and any out-
reach efforts;
(C) the procedures for assignment of fami-
lies admitted to dwelling units owned, leased,
managed, operated, or assisted by the agency;
(D) any standards and requirements for
occupancy of public housing dwelling units and
units assisted under title III, including resident
screening policies, standard lease provisions,
conditions for continued occupancy, termination
of tenancy, eviction, and conditions for termi-
nation of housing assistance;
(E) the procedures for maintaining waiting
lists for admissions to public housing develop-
ments of the agency, which may include a sys-
tem of site-based waiting lists under section
224(c);
(F) the criteria for providing and denying
housing assistance under title III to families
moving into the jurisdiction of the agency; and
(G) the fair housing policy of the agency.
(4) RENT
DETERMINATION.—A statement of
the policies of the agency governing rents charged
for public housing dwelling units and rental con-
tributions of assisted families under title III and the
system used by the agency to ensure that such rents
comply with the requirements of this Act.
(5) OPERATION AND MANAGEMENT.—A state-
ment of the rules, standards, and policies of the pub-
lic housing agency governing maintenance and man-
agement of housing owned and operated by the
agency, and management of the public housing agen-
cy and programs of the agency, including—
(A) a description of the manner in which
the agency is organized (including any consortia
or joint ventures) and staffed to perform the
duties and functions of the public housing agen-
cy and to administer the operating fund dis-
tributions of the agency;
(B) policies relating to the rental of dwell-
ing units, including policies designed to reduce
vacancies;
(C) housing quality standards in effect
pursuant to sections 232 and 328 and any cer-
tifications required under such sections;
(D) emergency and disaster plans for pub-
lic housing;
(E) priorities and improvements for man-
agement of public housing, including initiatives
to control costs; and
(F) policies of the agency requiring the
loss or termination of housing assistance and
tenancy under sections 641 and 642 (relating to
occupancy standards for federally assisted hous-
ing).
(6) GRIEVANCE PROCEDURE.—A statement of
the grievance procedures of the agency under section
110.
(7) CAPITAL IMPROVEMENTS.—With respect to
public housing developments owned or operated by
the agency, a plan describing the capital improve-
ments necessary to ensure long-term physical and
social viability of the developments.
(8) DEMOLITION AND DISPOSITION.—With re-
spect to public housing developments owned or oper-
ated by the agency—
(A) a description of any such housing to be
demolished or disposed of under subtitle E of
title II; and
(B) a timetable for such demolition or dis-
position.
(9) DESIGNATION OF HOUSING FOR ELDERLY
AND DISABLED FAMILIES.—With respect to public
housing developments owned or operated by the
agency, a description of any developments (or por-
tions thereof) that the agency has designated or will
designate for occupancy by elderly and disabled fam-
ilies in accordance with section 227 and any infor-
mation required under section 227(d) for such des-
ignated developments.
(10) CONVERSION OF PUBLIC HOUSING.—With
respect to public housing owned or operated by the
agency, a description of any building or buildings
that the agency is required, under section 203(b), to
convert to housing assistance under title III or that
the agency voluntarily converts, an analysis of such
buildings required under such section for conversion,
and a statement of the amount of grant amounts
under title II to be used for rental assistance or
other housing assistance.
(11) HOMEOWNERSHIP ACTIVITIES.—A descrip-
tion of any homeownership programs of the agency
under subtitle D of title II or section 329 for the
agency and the requirements and assistance avail-
able under such programs.
(12) ECONOMIC
SELF-SUFFICIENCY
AND
CO-
ORDINATION
WITH
WELFARE
AND
OTHER
APPRO-
PRIATE AGENCIES.—A description of—
(A) policies relating to services and amen-
ities provided or offered to assisted families, in-
cluding the provision of service coordinators
and services designed for certain populations
(such as the elderly and disabled);
(B) how the agency will coordinate with
State, local, and other agencies providing assist-
ance to families participating in welfare or pub-
lic assistance programs;
(C) how the agency will implement and ad-
minister section 105; and
(D) any policies, programs, plans, and ac-
tivities of the agency for the enhancement of
the economic and social self-sufficiency of resi-
dents assisted by the programs of the agency,
including rent structures to encourage self-suf-
ficiency.
(13) SAFETY AND CRIME PREVENTION.—A de-
scription of the policies established by the agency
that increase or maintain the safety of public hous-
ing residents and allow for creative methods to in-
crease public housing resident safety by coordinating
crime prevention efforts between the agency and
Federal, State, and local law enforcement officials.
(14) ANNUAL AUDIT.—The results of the most
recent fiscal year audit of the agency required under
section 541(b).
(15) TROUBLED AGENCIES.—Such other addi-
tional information as the Secretary may determine
to be appropriate for each public housing agency
that is designated—
(A) under section 533(c) as at risk of be-
coming troubled; or
(B) under section 533(a) as troubled.
(e) CITIZEN PARTICIPATION.—
(1) PUBLICATION OF NOTICE.—Not later than
45 days before the date of a hearing conducted
under paragraph (2) by the governing body of a
public housing agency, the agency shall—
(A) publish a notice informing the public
that the proposed local housing management
plan or amendment is available for inspection at
the principal office of the public housing agency
during normal business hours and make the
plan or amendment so available for inspection
during such period; and
(B) publish a notice informing the public
that a public hearing will be conducted to dis-
cuss the local housing management plan and to
invite public comment regarding that plan.
(2) PUBLIC
HEARING.—Before submitting a
plan under this section or a significant amendment
under section 107(f) to a plan, a public housing
agency shall, at a location that is convenient to resi-
dents, conduct a public hearing, as provided in the
notice published under paragraph (1), regarding the
public housing plan or the amendment of the agen-
cy.
(3) CONSIDERATION OF COMMENTS.—A public
housing agency shall consider any comments or
may run concurrently with any period under subsection
(e) for public comment).
(g) PLANS FOR SMALL PHA’S AND PHA’S ADMIN-
ISTERING ONLY RENTAL ASSISTANCE.—The Secretary
shall establish requirements for submission of plans under
this section and the information to be included in such
plans applicable to public housing agencies that own or
operate less than 250 public housing dwelling units and
shall establish requirements for such submission and in-
formation applicable to agencies that only administer
housing assistance under title III (and do not own or oper-
ate public housing). Such requirements shall waive any re-
quirements under this section that the Secretary deter-
mines are burdensome or unnecessary for such agencies.
SEC. 107. REVIEW OF PLANS.
(a) REVIEW AND NOTICE.—
(1) REVIEW.—The Secretary shall conduct a
limited review of each local housing management
plan submitted to the Secretary to ensure that the
plan is complete and complies with the requirements
of section 106. The Secretary shall have the discre-
tion to review a plan to the extent that the Secretary
considers review is necessary.
(2) NOTICE.—The Secretary shall notify each
public housing agency submitting a plan whether the
plan complies with such requirements not later than
75 days after receiving the plan. If the Secretary
does not notify the public housing agency, as re-
quired under this subsection and subsection (b), the
plan shall be considered, for purposes of this Act, to
have been determined to comply with the require-
ments under section 106 and the agency shall be
considered to have been notified of compliance upon
the expiration of such 75-day period.
(b) NOTICE OF REASONS FOR DETERMINATION OF
NONCOMPLIANCE.—If the Secretary determines that a
plan, as submitted, does not comply with the requirements
under section 106, the Secretary shall specify in the notice
under subsection (a) the reasons for the noncompliance
and any modifications necessary for the plan to meet the
requirements under section 106.
(c) STANDARDS
FOR DETERMINATION
OF NON-
COMPLIANCE.—The Secretary may determine that a plan
does not comply with the requirements under section 106
only if—
(1) the plan is incomplete in significant matters
required under such section;
(2) there is evidence available to the Secretary
that challenges, in a substantial manner, any infor-
mation provided in the plan;
(3) the Secretary determines that the plan does
not comply with Federal law or violates the purposes
of this Act because it fails to provide housing that
will be viable on a long-term basis at a reasonable
cost;
(4) the plan plainly fails to adequately identify
the needs of low-income families for housing assist-
ance in the jurisdiction of the agency;
(5) the plan plainly fails to adequately identify
the capital improvement needs for public housing de-
velopments in the jurisdiction of the agency;
(6) the activities identified in the plan are
plainly inappropriate to address the needs identified
in the plan; or
(7) the plan is inconsistent with the require-
ments of this Act.
(d) TREATMENT
OF EXISTING PLANS.—Notwith-
standing any other provision of this title, a public housing
agency shall be considered to have submitted a plan under
this section if the agency has submitted to the Secretary
a comprehensive plan under section 14(e) of the United
States Housing Act of 1937 (as in effect immediately be-
fore the effective date of this Act) or under the com-
prehensive improvement assistance program under such
section 14, and the Secretary has approved such plan, be-
fore January 1, 1997. The Secretary shall provide specific
procedures and requirements for such authorities to
amend such plans by submitting only such additional in-
formation as is necessary to comply with the requirements
of section 106.
(e) ACTIONS TO CHANGE PLAN.—A public housing
agency that has submitted a plan under section 106 may
change actions or policies described in the plan before sub-
mission and review of the plan of the agency for the next
fiscal year only if—
(1) in the case of costly or nonroutine changes,
the agency submits to the Secretary an amendment
to the plan under subsection (f) which is reviewed in
accordance with such subsection; or
(2) in the case of inexpensive or routine
changes, the agency describes such changes in such
local housing management plan for the next fiscal
year.
(f) AMENDMENTS TO PLAN.—
(1) IN GENERAL.—During the annual or 5-year
period covered by the plan for a public housing
agency, the agency may submit to the Secretary any
amendments to the plan.
(2) REVIEW.—The Secretary shall conduct a
limited review of each proposed amendment submit-
ted under this subsection to determine whether the
plan, as amended by the amendment, complies with
the requirements of section 106 and notify each pub-
lic housing agency submitting the amendment
whether the plan, as amended, complies with such
requirements not later than 30 days after receiving
the amendment. If the Secretary determines that a
plan, as amended, does not comply with the require-
ments under section 106, such notice shall indicate
the reasons for the noncompliance and any modifica-
tions necessary for the plan to meet the require-
ments under section 106. If the Secretary does not
notify the public housing agency as required under
this paragraph, the plan, as amended, shall be con-
sidered, for purposes of this section, to comply with
the requirements under section 106.
(3) STANDARDS FOR DETERMINATION OF NON-
COMPLIANCE.—The Secretary may determine that a
plan, as amended by a proposed amendment, does
not comply with the requirements under section 106
only if—
SEC. 108. REPORTING REQUIREMENTS.
(a) PERFORMANCE
AND EVALUATION REPORT.—
Each public housing agency shall annually submit to the
Secretary, on a date determined by the Secretary, a per-
formance and evaluation report concerning the use of
funds made available under this Act. The report of the
public housing agency shall include an assessment by the
agency of the relationship of such use of funds made avail-
able under this Act, as well as the use of other funds,
to the needs identified in the local housing management
plan and to the purposes of this Act. The public housing
agency shall certify that the report was available for re-
view and comment by affected tenants prior to its submis-
sion to the Secretary.
(b) REVIEW
OF PHA’S.—The Secretary shall, at
least on an annual basis, make such reviews as may be
necessary or appropriate to determine whether each public
housing agency receiving assistance under this section—
(1) has carried out its activities under this Act
in a timely manner and in accordance with its local
housing management plan; and
(2) has a continuing capacity to carry out its
local housing management plan in a timely manner.
(c) RECORDS.—Each public housing agency shall col-
lect, maintain, and submit to the Secretary such data and
other program records as the Board may require, in such
form and in accordance with such schedule as the Sec-
retary may establish.
SEC. 109. PET OWNERSHIP.
Pet ownership in housing assisted under this Act that
is federally assisted rental housing (as such term is de-
fined in section 227 of the Housing and Urban-Rural Re-
covery Act of 1983) shall be governed by the provisions
of section 227 of such Act.
SEC. 110. ADMINISTRATIVE GRIEVANCE PROCEDURE.
(a) REQUIREMENTS.—Each public housing agency
receiving assistance under this Act shall establish and im-
plement an administrative grievance procedure under
which residents of public housing will—
(1) be advised of the specific grounds of any
proposed adverse public housing agency action;
(2) have an opportunity for a hearing before an
impartial party (including appropriate employees of
the public housing agency) upon timely request with-
in a reasonable period of time;
(3) have an opportunity to examine any docu-
ments or records or regulations related to the pro-
posed action;
(4) be entitled to be represented by another
person of their choice at any hearing;
(5) be entitled to ask questions of witnesses and
have others make statements on their behalf; and
(6) be entitled to receive a written decision by
the public housing agency on the proposed action.
(b) EXCLUSION FROM ADMINISTRATIVE PROCEDURE
OF GRIEVANCES CONCERNING EVICTIONS FROM PUBLIC
HOUSING.—A public housing agency shall exclude from its
procedure established under subsection (a) any grievance
concerning an eviction from or termination of tenancy in
public housing in any State which requires that, prior to
eviction, a resident be provided a hearing in court which
the Secretary determines provides the basic elements of
due process.
(c) INAPPLICABILITY
TO CHOICE-BASED RENTAL
HOUSING ASSISTANCE.—This section may not be con-
strued to require any public housing agency to establish
or implement an administrative grievance procedure with
respect to assisted families under title III.
SEC. 111. HEADQUARTERS RESERVE FUND.
(a) ANNUAL RESERVATION OF AMOUNTS.—Notwith-
standing any other provision of law, the Secretary may
retain not more than 2 percent of the amounts appro-
priated to carry out title II for any fiscal year for use
in accordance with this section.
(b) USE OF AMOUNTS.—Any amounts that are re-
tained under subsection (a) or appropriated for use under
this section shall be available for subsequent allocation to
specific areas and communities, and may only be used for
the Department of Housing and Urban Development
and—
(1) for unforeseen housing needs resulting from
natural and other disasters;
(2) for housing needs resulting from emer-
gencies, as determined by the Secretary, other than
such disasters;
(3) for housing needs related to a settlement of
litigation, including settlement of fair housing litiga-
tion; and
(4) for needs related to the Secretary’s actions
under this Act regarding troubled and at-risk public
housing agencies.
Housing needs under this subsection may be met through
the provision of assistance in accordance with title II or
title III, or both.
SEC. 112. LABOR STANDARDS.
(a) IN GENERAL.—Any contract for grants, sale, or
lease pursuant to this Act relating to public housing shall
contain the following provisions:
(1) OPERATION.—A provision requiring that
not less than the wages prevailing in the locality, as
determined or adopted (subsequent to a determina-
tion under applicable State or local law) by the Sec-
retary, shall be paid to all contractors and persons
employed in the operation of the low-income housing
development involved.
(2) PRODUCTION.—A provision that not less
than the wages prevailing in the locality, as pre-
determined by the Secretary of Labor pursuant to
the Davis-Bacon Act (40 U.S.C. 276a–276a–5),
shall be paid to all laborers and mechanics employed
in the production of the development involved.
The Secretary shall require certification as to compliance
with the provisions of this section before making any pay-
ment under such contract.
(b) EXCEPTIONS.—Subsection (a) and the provisions
relating to wages (pursuant to subsection (a)) in any con-
tract for grants, sale, or lease pursuant to this Act relating
to public housing, shall not apply to any of the following
individuals:
(1) VOLUNTEERS.—Any individual who—
(A) performs services for which the indi-
vidual volunteered;
(B)(i) does not receive compensation for
such services; or
(ii) is paid expenses, reasonable benefits,
or a nominal fee for such services; and
(C) is not otherwise employed at any time
in the construction work.
(2) RESIDENTS EMPLOYED BY PHA.—Any resi-
dent of a public housing development who (A) is an
employee of the public housing agency for the devel-
opment, (B) performs services in connection with the
operation of a low-income housing project owned or
managed by such agency, and (C) is not a member
of a bargaining unit represented by a union that has
a collective bargaining agreement with the public
housing agency.
(3) RESIDENTS IN TRAINING PROGRAMS.—Any
individuals participating in a job training program
or other program designed to promote economic self-
sufficiency.
SEC. 113. NONDISCRIMINATION.
(a) IN GENERAL.—No person in the United States
shall on the grounds of race, color, national origin, reli-
gion, or sex be excluded from participation in, be denied
the benefits of, or be subjected to discrimination under
any program or activity funded in whole or in part with
amounts made available under this Act. Any prohibition
against discrimination on the basis of age under the Age
Discrimination Act of 1975 or with respect to an otherwise
qualified handicapped individual as provided in section
504 of the Rehabilitation Act of 1973 shall also apply to
any such program or activity.
(b) CIVIL RIGHTS COMPLIANCE.—Each public hous-
ing agency that receives grant amounts under this Act
shall use such amounts and carry out its local housing
management plan approved under section 107 in conform-
ity with title VI of the Civil Rights Act of 1964, the Fair
Housing Act, section 504 of the Rehabilitation Act of
1973, the Age Discrimination Act of 1975, and the Ameri-
cans With Disabilities Act of 1990, and shall affirmatively
further fair housing.
SEC. 114. PROHIBITION ON USE OF FUNDS.
None of the funds made available to the Department
of Housing and Urban Development to carry out this Act,
which are obligated to State or local governments, public
housing agencies, housing finance agencies, or other public
or quasi-public housing agencies, shall be used to indem-
nify contractors or subcontractors of the government or
agency against costs associated with judgments of in-
fringement of intellectual property rights.
SEC. 115. INAPPLICABILITY TO INDIAN HOUSING.
Except as specifically provided by law, the provisions
of this title, and titles II, III, IV, and V shall not apply
to public housing developed or operated pursuant to a con-
tract between the Secretary and an Indian housing author-
ity under the United States Housing Act of 1937 or to
housing assisted under the Native American Housing As-
sistance and Self-Determination Act of 1996.
SEC. 116. REGULATIONS.
(a) IN GENERAL.—The Secretary may issue any reg-
ulations necessary to carry out this Act. This subsection
shall take effect on the date of the enactment of this Act.
(b) RULE OF CONSTRUCTION.—Any failure by the
Secretary to issue any regulations authorized under sub-
section (a) shall not affect the effectiveness of any provi-
sion of this Act or any amendment made by this Act.
TITLE II—PUBLIC HOUSING
Subtitle A—Block Grants
SEC. 201. BLOCK GRANT CONTRACTS.
(a) IN GENERAL.—The Secretary shall enter into
contracts with public housing agencies under which—
(1) the Secretary agrees to make a block grant
under this title, in the amount provided under sec-
tion 202(c), for assistance for low-income housing to
the public housing agency for each fiscal year cov-
ered by the contract; and
(2) the agency agrees—
(A) to provide safe, clean, and healthy
housing that is affordable to low-income fami-
lies and services for families in such housing;
(B) to operate, or provide for the oper-
ation, of such housing in a financially sound
manner;
(C) to use the block grant amounts in ac-
cordance with this title and the local housing
management plan for the agency that complies
with the requirements of section 106;
(D) to involve residents of housing assisted
with block grant amounts in functions and deci-
sions relating to management and the quality of
life in such housing;
(E) that the management of the public
housing of the agency shall be subject to ac-
tions authorized under subtitle D of title V;
(F) that the Secretary may take actions
under section 205 with respect to improper use
of grant amounts provided under the contract;
and
(G) to otherwise comply with the require-
ments under this title.
(b) MODIFICATION.—Contracts and agreements be-
tween the Secretary and a public housing agency may not
be amended in a manner which would—
(1) impair the rights of—
(A) leaseholders for units assisted pursu-
ant to a contract or agreement; or
(B) the holders of any outstanding obliga-
tions of the public housing agency involved for
which annual contributions have been pledged;
or
(2) provide for payment of block grant amounts
under this title in an amount exceeding the alloca-
tion for the agency determined under section 204.
Any rule of law contrary to this subsection shall be deemed
inapplicable.
SEC. 202. GRANT AUTHORITY, AMOUNT, AND ELIGIBILITY.
(a) AUTHORITY.—The Secretary shall make block
grants under this title to eligible public housing agencies
in accordance with block grant contracts under section
201.
(b) PERFORMANCE FUNDS.—
(1) IN GENERAL.—The Secretary shall establish
2 funds for the provision of grants to eligible public
housing agencies under this title, as follows:
(A) CAPITAL
FUND.—A capital fund to
provide capital and management improvements
to public housing developments.
(B) OPERATING
FUND.—An operating
fund for public housing operations.
(2) FLEXIBILITY OF FUNDING.—A public hous-
ing agency may use up to 10 percent of the amounts
from a grant under this title that are allocated and
provided from the capital fund for activities that are
eligible under section 203(a)(2) to be funded with
amounts from the operating fund.
(c) AMOUNT OF GRANTS.—The amount of the grant
under this title for a public housing agency for a fiscal
year shall be the amount of the allocation for the agency
determined under section 204, except as otherwise pro-
vided in this title and title V.
(d) ELIGIBILITY.—A public housing agency shall be
an eligible public housing agency with respect to a fiscal
year for purposes of this title only if—
(1) the Secretary has entered into a block grant
contract with the agency;
(2) the agency has submitted a local housing
management plan to the Secretary for such fiscal
year;
(3) the plan has been determined to comply
with the requirements under section 106 and the
Secretary has not notified the agency that the plan
fails to comply with such requirements;
(4) the agency is exempt from local taxes, as
provided under subsection (e), or receives a contribu-
tion, as provided under such subsection;
(5) no member of the board of directors or
other governing body of the agency, or the executive
director, has been convicted of a felony;
(6) the agency has entered into an agreement
providing for local cooperation in accordance with
subsection (f); and
(7) the agency has not been disqualified for a
grant pursuant to section 205(a) or title V.
(e) PAYMENTS IN LIEU OF STATE AND LOCAL TAX-
ATION OF PUBLIC HOUSING DEVELOPMENTS.—
(1) EXEMPTION
FROM
TAXATION.—A public
housing agency may receive a block grant under this
title only if—
(A)(i) the developments of the agency (ex-
clusive of any portions not assisted with
amounts provided under this title) are exempt
from all real and personal property taxes levied
or imposed by the State, city, county, or other
political subdivision; and
(ii) the public housing agency makes pay-
ments in lieu of taxes to such taxing authority
equal to 10 percent of the sum, for units
charged in the developments of the agency, of
the difference between the gross rent and the
utility cost, or such lesser amount as is—
(I) prescribed by State law;
(II) agreed to by the local governing
body in its agreement under subsection (f)
for local cooperation with the public hous-
ing agency or under a waiver by the local
governing body; or
(III) due to failure of a local public
body or bodies other than the public hous-
ing agency to perform any obligation under
such agreement; or
(B) the agency complies with the require-
ments under subparagraph (A) with respect to
public housing developments (including public
housing units in mixed-income developments),
but the agency agrees that the units other than
public housing units in any mixed-income devel-
opments (as such term is defined in section
221(c)(2)) shall be subject to any otherwise ap-
plicable real property taxes imposed by the
State, city, county or other political subdivision.
(2) EFFECT
OF
FAILURE
TO
EXEMPT
FROM
TAXATION.—Notwithstanding paragraph (1), a pub-
lic housing agency that does not comply with the re-
quirements under such paragraph may receive a
block grant under this title, but only if the State,
city, county, or other political subdivision in which
the development is situated contributes, in the form
of cash or tax remission, the amount by which the
taxes paid with respect to the development exceed 10
percent of the gross rent and utility cost charged in
the development.
(f) LOCAL COOPERATION.—In recognition that there
should be local determination of the need for low-income
housing to meet needs not being adequately met by private
enterprise, the Secretary may not make any grant under
this title to a public housing agency unless the governing
body of the locality involved has entered into an agreement
with the agency providing for the local cooperation re-
quired by the Secretary pursuant to this title.
(g) EXCEPTION.—Notwithstanding subsection (a),
the Secretary may make a grant under this title for a pub-
lic housing agency that is not an eligible public housing
agency but only for the period necessary to secure, in ac-
cordance with this title, an alternative public housing
agency for the public housing of the ineligible agency.
SEC. 203. ELIGIBLE AND REQUIRED ACTIVITIES.
(a) ELIGIBLE ACTIVITIES.—Except as provided in
subsection (b) and in section 202(b)(2), grant amounts al-
located and provided from the capital fund and grant
amounts allocated and provided from the operating fund
may be used only for the following activities:
(1) 
CAPITAL
FUND
ACTIVITIES.—Grant
amounts from the capital fund may be used for—
(A) the production and modernization of
public housing developments, including the re-
design, reconstruction, and reconfiguration of
public housing sites and buildings and the pro-
duction of mixed-income developments;
(B) vacancy reduction;
(C) addressing deferred maintenance needs
and the replacement of dwelling equipment;
(D) planned code compliance;
(E) management improvements;
(F) demolition and replacement under sec-
tion 261;
(G) tenant relocation;
(H) capital expenditures to facilitate pro-
grams to improve the economic empowerment
and self-sufficiency of public housing tenants;
and
(I) capital expenditures to improve the se-
curity and safety of residents.
(2) 
OPERATING
FUND
ACTIVITIES.—Grant
amounts from the operating fund may be used for—
(A) procedures and systems to maintain
and ensure the efficient management and oper-
ation of public housing units;
(B) activities to ensure a program of rou-
tine preventative maintenance;
(C) anti-crime and anti-drug activities, in-
cluding the costs of providing adequate security
for public housing tenants;
(D) activities related to the provision of
services, including service coordinators for el-
derly persons or persons with disabilities;
(E) activities to provide for management
and participation in the management of public
housing by public housing tenants;
(F) the costs associated with the operation
and management of mixed-income develop-
ments;
(G) the costs of insurance;
(H) the energy costs associated with public
housing units, with an emphasis on energy con-
servation;
(I) the costs of administering a public
housing community work program under section
105, including the costs of any related insur-
ance needs; and
(J) activities in connection with a home-
ownership program for public housing residents
under subtitle D, including providing financing
or assistance for purchasing housing, or the
provision of financial assistance to resident
management corporations or resident councils
to obtain training, technical assistance, and
educational assistance to promote homeowner-
ship opportunities.
(b) REQUIRED CONVERSION
OF ASSISTANCE
FOR
PUBLIC HOUSING TO RENTAL HOUSING ASSISTANCE.—
(1) REQUIREMENT.—A public housing agency
that receives grant amounts under this title shall
provide assistance in the form of rental housing as-
sistance under title III, or appropriate site revital-
ization or other appropriate capital improvements
approved by the Secretary, in lieu of assisting the
operation and modernization of any building or
buildings of public housing, if the agency provides
sufficient evidence to the Secretary that the building
or buildings—
(A) are on the same or contiguous sites;
(B) consist of more than 300 dwelling
units;
(C) have a vacancy rate of at least 10 per-
cent for dwelling units not in funded, on-sched-
ule modernization programs;
(D) are identified as distressed housing for
which the public housing agency cannot assure
the long-term viability as public housing
through reasonable revitalization, density reduc-
tion, or achievement of a broader range of
household income; and
(E) have an estimated cost of continued
operation and modernization as public housing
that exceeds the cost of providing choice-based
rental assistance under title III for all families
in occupancy, based on appropriate indicators
of cost (such as the percentage of the total de-
velopment cost required for modernization).
Local housing and management agencies shall iden-
tify properties that meet the definition of subpara-
graphs (A) through (E).
(2) USE OF OTHER AMOUNTS.—In addition to
grant amounts under this title attributable (pursu-
ant to the formulas under section 204) to the build-
ing or buildings identified under paragraph (1), the
Secretary may use amounts provided in appropria-
tion Acts for choice-based housing assistance under
title III for families residing in such building or
buildings or for appropriate site revitalization or
other appropriate capital improvements approved by
the Secretary.
(3) ENFORCEMENT.—The Secretary shall take
appropriate action to ensure conversion of any build-
ing or buildings identified under paragraph (1) and
any other appropriate action under this subsection,
if the public housing agency fails to take appropriate
action under this subsection.
(4) FAILURE OF PHA’S TO COMPLY WITH CON-
VERSION
REQUIREMENT.—If the Secretary deter-
mines that—
(A) a public housing agency has failed
under paragraph (1) to identify a building or
buildings in a timely manner,
(B) a public housing agency has failed to
identify one or more buildings which the Sec-
retary determines should have been identified
under paragraph (1), or
(C) one or more of the buildings identified
by the public housing agency pursuant to para-
graph (1) should not, in the determination of
the Secretary, have been identified under that
paragraph,
the Secretary may identify a building or buildings
for conversion and take other appropriate action
pursuant to this subsection.
(5) CESSATION OF UNNECESSARY SPENDING.—
Notwithstanding any other provision of law, if, in
the determination of the Secretary, a building or
buildings meets or is likely to meet the criteria set
forth in paragraph (1), the Secretary may direct the
public housing agency to cease additional spending
in connection with such building or buildings, except
to the extent that additional spending is necessary
to ensure safe, clean, and healthy housing until the
Secretary determines or approves an appropriate
course of action with respect to such building or
buildings under this subsection.
(6) USE
OF
BUDGET
AUTHORITY.—Notwith-
standing any other provision of law, if a building or
buildings are identified pursuant to paragraph (1),
the Secretary may authorize or direct the transfer,
to the choice-based or tenant-based assistance pro-
gram of such agency or to appropriate site revital-
ization or other capital improvements approved by
the Secretary, of—
(A) in the case of an agency receiving as-
sistance under the comprehensive improvement
assistance program, any amounts obligated by
the Secretary for the modernization of such
building or buildings pursuant to section 14 of
the United States Housing Act of 1937 (as in
effect immediately before the effective date of
the repeal under section 601(b));
(B) in the case of an agency receiving pub-
lic housing modernization assistance by formula
pursuant to such section 14, any amounts pro-
vided to the agency which are attributable pur-
suant to the formula for allocating such assist-
ance to such building or buildings;
(C) in the case of an agency receiving as-
sistance for the major reconstruction of obsolete
projects, any amounts obligated by the Sec-
retary for the major reconstruction of such
building or buildings pursuant to section 5(j)(2)
of the United States Housing Act of 1937, as
in effect immediately before the effective date of
the repeal under section 601(b); and
(D) in the case of an agency receiving as-
sistance pursuant to the formulas under section
204, any amounts provided to the agency which
are attributable pursuant to the formulas for
allocating such assistance to such building or
buildings.
(7) TRANSITION.—Any amounts made available
to a public housing agency to carry out section 202
of the Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies
Appropriations Act, 1996 (enacted as section 101(e)
of Omnibus Consolidated Rescissions and Appropria-
tions Act of 1996 (Public Law 104–134; 110 Stat.
1321–279)) may be used to carry out this section.
The Secretary shall provide for public housing agen-
cies to conform and continue actions taken under
such section 202 in accordance with the require-
ments under this section.
(c) EXTENSION
OF
DEADLINES.—The Secretary
may, for a public housing agency, extend any deadline es-
tablished pursuant to this section or a local housing man-
agement plan for up to an additional 5 years if the Sec-
retary makes a determination that the deadline is imprac-
ticable.
(d) COMPLIANCE WITH PLAN.—The local housing
management plan submitted by a public housing agency
(including any amendments to the plan), unless deter-
mined under section 107 not to comply with the require-
ments under section 106, shall be binding upon the Sec-
retary and the public housing agency and the agency shall
use any grant amounts provided under this title for eligi-
ble activities under subsection (a) in accordance with the
plan. This subsection may not be construed to preclude
changes or amendments to the plan, as authorized under
section 107 or any actions authorized by this Act to be
taken without regard to a local housing management plan.
SEC. 204. DETERMINATION OF GRANT ALLOCATION.
(a) IN GENERAL.—For each fiscal year, after reserv-
ing amounts under section 111 from the aggregate
amount made available for the fiscal year for carrying out
this title, the Secretary shall allocate any remaining
amounts among eligible public housing agencies in accord-
ance with this section, so that the sum of all of the alloca-
tions for all eligible authorities is equal to such remaining
amount.
(b) ALLOCATION AMOUNT.—The Secretary shall de-
termine the amount of the allocation for each eligible pub-
lic housing agency, which shall be—
(1) for any fiscal year beginning after the en-
actment of a law containing the formulas described
in paragraphs (1) and (2) of subsection (c), the sum
of the amounts determined for the agency under
each such formula; or
(2) for any fiscal year beginning before the ex-
piration of such period, the sum of—
(A) the operating allocation determined
under subsection (d)(1) for the agency; and
(B) the capital improvement allocation de-
termined under subsection (d)(2) for the agen-
cy.
(c) PERMANENT ALLOCATION FORMULAS FOR CAP-
ITAL AND OPERATING FUNDS.—
(1) ESTABLISHMENT OF CAPITAL FUND FOR-
MULA.—The formula under this paragraph shall
provide for allocating assistance under the capital
fund for a fiscal year. The formula may take into
account such factors as—
(A) the number of public housing dwelling
units owned or operated by the public housing
agency, the characteristics and locations of the
developments, and the characteristics of the
families served and to be served (including the
incomes of the families);
(B) the need of the public housing agency
to carry out rehabilitation and modernization
activities, and reconstruction, production, and
demolition activities related to public housing
dwelling units owned or operated by the public
housing agency, including backlog and projected
future needs of the agency;
(C) the cost of constructing and rehabili-
tating property in the area; and
(D) the need of the public housing agency
to carry out activities that provide a safe and
secure environment in public housing units
owned or operated by the public housing agen-
cy.
(2) ESTABLISHMENT
OF
OPERATING
FUND
FORMULA.—The formula under this paragraph shall
provide for allocating assistance under the operating
fund for a fiscal year. The formula may take into
account such factors as—
(A) standards for the costs of operating
and reasonable projections of income, taking
into account the characteristics and locations of
the public housing developments and character-
istics of the families served and to be served
(including the incomes of the families), or the
costs of providing comparable services as deter-
mined in accordance with criteria or a formula
representing the operations of a prototype well-
managed public housing development;
(B) the number of public housing dwelling
units owned or operated by the public housing
agency;
(C) the need of the public housing agency
to carry out anti-crime and anti-drug activities,
including providing adequate security for public
housing residents;
(D) any record by the public housing agen-
cy of exemplary performance in the operation of
public housing; and
(E) the amount of nonrental income of the
public housing agency, except that in consider-
ing such amount the formula—
(i) shall provide an incentive to en-
courage agencies to increase nonrental in-
come and to increase rental income attrib-
utable to their units by encouraging occu-
pancy by families with a broad range of in-
comes, including families whose incomes
have increased while in occupancy and
newly admitted families; and
(ii) shall provide that the agency shall
derive the full benefit of any increase in
nonrental income, and such increase shall
not directly result in a decrease in
amounts provided to the agency pursuant
to the formula.
The formula shall not take into account the amount
of any cost reductions for a public housing agency
due to the difference between projected and actual
utility rates attributable to actions that are taken by
the agency which lead to such reductions, as deter-
mined by the Secretary. In the case of any public
housing agency that receives financing from any per-
son or entity other than the Secretary or enters into
a performance contract to undertake energy con-
servation improvements in a public housing develop-
ment, under which the payment does not exceed the
cost of the energy saved as a result of the improve-
ments during a reasonable negotiated contract pe-
riod, the formula shall not take into account the
amount of any cost reductions for the agency due to
the differences between projected and actual utility
consumption attributable to actions that are taken
by the agency which lead to such reductions, as de-
termined by the Secretary. Notwithstanding the pre-
ceding 2 sentences, after the expiration of the 10-
year period beginning upon the savings initially tak-
ing effect, the Secretary may reduce the amount al-
located to the agency under the formula by up to 50
percent of such differences.
(3) DEVELOPMENT UNDER NEGOTIATED RULE-
MAKING PROCEDURE.—The formulas under this sub-
section shall be developed according to procedures
for issuance of regulations under the negotiated
rulemaking procedure under subchapter III of chap-
ter 5 of title 5, United States Code, except that the
formulas shall not be contained in a regulation.
(4) REPORT.—Not later than the expiration of
the 12-month period beginning upon the enactment
of this Act, the Secretary shall submit a report to
the Congress containing the proposed formulas es-
tablished pursuant to paragraph (3) that meets the
requirements of this subsection.
(d) INTERIM ALLOCATION REQUIREMENTS.—
(1) OPERATING ALLOCATION.—
(A) APPLICABILITY TO 50 PERCENT OF AP-
PROPRIATED AMOUNTS.—Of any amounts avail-
able for allocation under this subsection for a
fiscal year, 50 percent shall be used only to pro-
vide amounts for operating allocations under
this paragraph for eligible public housing agen-
cies.
(B) DETERMINATION.—The operating allo-
cation under this paragraph for a public hous-
ing agency for a fiscal year shall be an amount
determined by applying, to the amount to be al-
located under this paragraph, the formula used
for determining the distribution of operating
subsidies for fiscal year 1997 to public housing
agencies (as modified under subparagraph (C))
under section 9 of the United States Housing
Act of 1937, as in effect immediately before the
effective date of the repeal under section
601(b).
(C) TREATMENT OF CHRONICALLY VACANT
UNITS.—The Secretary shall revise the formula
referred to in subparagraph (B) so that the for-
mula does not provide any amounts, other than
utility costs and other necessary costs (such as
costs necessary for the protection of persons
and property), attributable to any dwelling unit
of a public housing agency that has been vacant
continuously for 6 or more months. A unit shall
not be considered vacant for purposes of this
paragraph if the unit is unoccupied because of
rehabilitation or renovation that is on schedule.
(D) INCREASES
IN
INCOME.—The Sec-
retary may revise the formula referred to in
subparagraph (B) to provide an incentive to en-
courage public housing agencies to increase
nonrental income and to increase rental income
attributable to their units by encouraging occu-
pancy by families with a broad range of in-
comes, including families whose incomes have
increased while in occupancy and newly admit-
ted families. Any such incentive shall provide
that the public housing agency shall derive the
full benefit of an increase in nonrental income,
and such increase shall not directly result in a
decrease in amounts provided to the agency
under this title.
(2) CAPITAL IMPROVEMENT ALLOCATION.—
(A) APPLICABILITY TO 50 PERCENT OF AP-
PROPRIATED AMOUNTS.—Of any amounts avail-
able for allocation under this subsection for a
fiscal year, 50 percent shall be used only to pro-
vide amounts for capital improvement alloca-
tions under this paragraph for eligible public
housing agencies.
(B) DETERMINATION.—The capital im-
provement allocation under this paragraph for
an eligible public housing agency for a fiscal
year shall be determined by applying, to the
amount to be allocated under this paragraph,
the formula used for determining the distribu-
tion of modernization assistance for fiscal year
1997 to public housing agencies under section
14 of the United States Housing Act of 1937,
as in effect immediately before the effective
date of the repeal under section 601(b), except
that the Secretary shall establish a method for
taking into consideration allocation of amounts
under the comprehensive improvement assist-
ance program.
(e) ELIGIBILITY OF UNITS ACQUIRED FROM PRO-
CEEDS OF SALES UNDER DEMOLITION OR DISPOSITION
PLAN.—If a public housing agency uses proceeds from the
sale of units under a homeownership program in accord-
ance with section 251 to acquire additional units to be
sold to low-income families, the additional units shall be
counted as public housing for purposes of determining the
amount of the allocation to the agency under this section
until sale by the agency, but in any case no longer than
5 years.
SEC. 205. SANCTIONS FOR IMPROPER USE OF AMOUNTS.
(a) IN GENERAL.—In addition to any other actions
authorized under this title, if the Secretary finds pursuant
to an audit under section 541 that a public housing agency
receiving grant amounts under this title has failed to com-
ply substantially with any provision of this title, the Sec-
retary may—
(1) terminate payments under this title to the
agency;
(2) withhold from the agency amounts from the
total allocation for the agency pursuant to section
204;
(3) reduce the amount of future grant pay-
ments under this title to the agency by an amount
equal to the amount of such payments that were not
expended in accordance with this title;
(4) limit the availability of grant amounts pro-
vided to the agency under this title to programs,
projects, or activities not affected by such failure to
comply;
(5) withhold from the agency amounts allocated
for the agency under title III; or
(6) order other corrective action with respect to
the agency.
(b) TERMINATION OF COMPLIANCE ACTION.—If the
Secretary takes action under subsection (a) with respect
to a public housing agency, the Secretary shall—
(1) in the case of action under subsection
(a)(1), resume payments of grant amounts under
this title to the agency in the full amount of the
total allocation under section 204 for the agency at
the time that the Secretary first determines that the
agency will comply with the provisions of this title;
(2) in the case of action under paragraph (2),
(5), or (6) of subsection (a), make withheld amounts
available as the Secretary considers appropriate to
ensure that the agency complies with the provisions
of this title; or
(3) in the case of action under subsection
(a)(4), release such restrictions at the time that the
Secretary first determines that the agency will com-
ply with the provisions of this title.
Subtitle B—Admissions and
Occupancy Requirements
SEC. 221. LOW-INCOME HOUSING REQUIREMENT.
(a) PRODUCTION ASSISTANCE.—Any public housing
produced using amounts provided under a grant under
this title or under the United States Housing Act of 1937
shall be operated as public housing for the 40-year period
beginning upon such production.
(b) OPERATING ASSISTANCE.—No portion of any
public housing development operated with amounts from
a grant under this title or operating assistance provided
under the United States Housing Act of 1937 may be dis-
posed of before the expiration of the 10-year period begin-
ning upon the conclusion of the fiscal year for which the
grant or such assistance was provided, except as provided
in this Act.
(c) 
CAPITAL
IMPROVEMENTS
ASSISTANCE.—
Amounts may be used for eligible activities under section
203(a)(1) only for the following housing developments:
(1) LOW-INCOME
DEVELOPMENTS.—Amounts
may be used for a low-income housing development
that—
(A) is owned by public housing agencies;
(B) is operated as low-income rental hous-
ing and produced or operated with assistance
provided under a grant under this title; and
(C) is consistent with the purposes of this
title.
Any development, or portion thereof, referred to in
this paragraph for which activities under section
203(a)(1) are conducted using amounts from a
grant under this title shall be maintained and used
as public housing for the 20-year period beginning
upon the receipt of such grant. Any public housing
development, or portion thereof, that received the
benefit of a grant pursuant to section 14 of the
United States Housing Act of 1937 shall be main-
tained and used as public housing for the 20-year
period beginning upon receipt of such amounts.
(2) MIXED INCOME DEVELOPMENTS.—Amounts
may be used for eligible activities under section
203(a)(1) for mixed-income developments, which
shall be a housing development that—
(A) contains dwelling units that are avail-
able for occupancy by families other than low-
income families;
(B) contains a number of dwelling units—
(i) which units are made available (by
master contract or individual lease) for oc-
cupancy only by low- and very low-income
families identified by the public housing
agency;
(ii) which number is not less than a
reasonable number of units, including re-
lated amenities, taking into account the
amount of the assistance provided by the
agency compared to the total investment
(including costs of operation) in the devel-
opment;
(iii) which units are subject to the
statutory and regulatory requirements of
the public housing program, except that
the Secretary may grant appropriate waiv-
ers to such statutory and regulatory re-
quirements if reductions in funding or
other changes to the program make contin-
ued application of such requirements im-
practicable;
(iv) which units are specially des-
ignated as dwelling units under this sub-
paragraph, except the equivalent units in
the development may be substituted for
designated units during the period the
units are subject to the requirements of
the public housing program; and
(v) which units shall be eligible for as-
sistance under this title; and
(C) is owned by the public housing agency,
an affiliate controlled by it, or another appro-
priate entity.
Notwithstanding any other provision of this title, to
facilitate the establishment of socioeconomically
mixed communities, a public housing agency that
uses grant amounts under this title for a mixed in-
come development under this paragraph may, to the
extent that income from such a development reduces
the amount of grant amounts used for operating or
other costs relating to public housing, use such re-
sulting savings to rent privately developed dwelling
units in the neighborhood of the mixed income devel-
opment. Such units shall be made available for occu-
pancy only by low-income families eligible for resi-
dency in public housing.
SEC. 222. FAMILY ELIGIBILITY.
(a) IN GENERAL.—Dwelling units in public housing
may be rented only to families who are low-income families
at the time of their initial occupancy of such units.
(b) INCOME MIX WITHIN DEVELOPMENTS.—A public
housing agency may establish and utilize income-mix cri-
teria for the selection of residents for dwelling units in
public housing developments that limit admission to a de-
velopment by selecting applicants having incomes appro-
priate so that the mix of incomes of families occupying
the development at any time is proportional to the income
mix in the eligible population of the jurisdiction of the
agency at such time, as adjusted to take into consideration
the severity of housing need. Any criteria established
under this subsection shall be subject to the provisions of
subsection (c).
(c) INCOME MIX.—
(1) PHA INCOME MIX.—Except as provided in
paragraph (2), at all times not less than 35 percent
of the public housing dwelling units of a public hous-
ing agency shall be occupied by low-income families
whose incomes at such time do not exceed 30 per-
cent of the area median income, as determined by
the Secretary with adjustments for smaller and larg-
er families, except that the Secretary, may for pur-
poses of this subsection, establish income ceilings
higher or lower than 30 percent of the median for
the area on the basis of the Secretary’s findings that
such variations are necessary because of unusually
high or low family incomes. This paragraph may not
be construed to create any authority on the part of
any public housing agency to evict any family resid-
ing in public housing solely because of the income of
the family or because of any noncompliance or over-
compliance with the requirement of this paragraph.
(2) INCREASES IN TENANT INCOMES.—A public
housing agency may fail to comply with the require-
ment under paragraph (1) if such noncompliance is
temporary in nature because—
(A) the incomes of existing public housing
residents have increased; and
(B) during such temporary noncompliance,
the agency makes any dwelling units that be-
come available for occupancy available only to
families having incomes referred to in para-
graph (1).
(3) PROHIBITION OF CONCENTRATION OF LOW-
INCOME FAMILIES.—A public housing agency may
not, in complying with the requirements under para-
graph (1), concentrate very low-income families (or
other families with relatively low incomes) in public
housing dwelling units in certain public housing de-
velopments or certain buildings within developments.
The Secretary may review the income and occupancy
characteristics of the public housing developments,
and the buildings of such developments, of public
housing agencies to ensure compliance with the pro-
visions of this paragraph.
(d) WAIVER OF ELIGIBILITY REQUIREMENTS FOR
OCCUPANCY BY POLICE OFFICERS.—
(1) AUTHORITY AND WAIVER.—To provide oc-
cupancy in public housing dwelling units to police of-
ficers and other law enforcement or security person-
nel (who are not otherwise eligible for residence in
public housing) and to increase security for other
public housing residents in developments where
crime has been a problem, a public housing agency
may, with respect to such units and subject to para-
graph (2)—
(A) waive—
(i) the provisions of subsection (a) of
this section and section 225(a); and
(ii) the applicability of—
(I) any preferences for occupancy
established under section 223;
(II) the minimum rental amount
established pursuant to section 225(c)
and any maximum monthly rental
amount established pursuant to sec-
tion 225(b);
(III) any criteria relating to in-
come mix within developments estab-
lished under subsection (b);
(IV) the income mix require-
ments under subsection (c); and
(V) any other occupancy limita-
tions or requirements; and
(B) establish special rent requirements and
other terms and conditions of occupancy.
(2) CONDITIONS OF WAIVER.—A public housing
agency may take the actions authorized in para-
graph (1) only if agency determines that such ac-
tions will increase security in the public housing de-
velopments involved and will not result in a signifi-
cant reduction of units available for residence by
low-income families.
SEC. 223. PREFERENCES FOR OCCUPANCY.
(a) AUTHORITY TO ESTABLISH.—Each public hous-
ing agency may establish a system for making dwelling
units in public housing available for occupancy that pro-
vides preference for such occupancy to families having cer-
tain characteristics.
(b) CONTENT.—Each system of preferences estab-
lished pursuant to this section shall be based upon local
housing needs and priorities, as determined by the public
housing agency using generally accepted data sources, in-
cluding any information obtained pursuant to an oppor-
tunity for public comment as provided under section
106(e) or under the requirements applicable to com-
prehensive housing affordability strategy for the relevant
jurisdiction.
SEC. 224. ADMISSION PROCEDURES.
(a) ADMISSION REQUIREMENTS.—A public housing
agency shall ensure that each family residing in a public
housing development owned or administered by the agency
is admitted in accordance with the procedures established
under this title by the agency and the income limits under
section 222.
(b) NOTIFICATION OF APPLICATION DECISIONS.—A
public housing agency shall establish procedures designed
to provide for notification to an applicant for admission
to public housing of the determination with respect to such
application, the basis for the determination, and, if the
applicant is determined to be eligible for admission, the
projected date of occupancy (to the extent such date can
reasonably be determined). If an agency denies an appli-
cant admission to public housing, the agency shall notify
the applicant that the applicant may request an informal
hearing on the denial within a reasonable time of such
notification.
(c) SITE-BASED WAITING LISTS.—A public housing
agency may establish procedures for maintaining waiting
lists for admissions to public housing developments of the
agency, which may include (notwithstanding any other
law, regulation, handbook, or notice to the contrary) a sys-
tem of site-based waiting lists whereby applicants may
apply directly at or otherwise designate the development
or developments in which they seek to reside.
(d) CONFIDENTIALITY FOR VICTIMS OF DOMESTIC
VIOLENCE.—A public housing agency shall be subject to
the restrictions regarding release of information relating
to the identity and new residence of any family in public
housing that was a victim of domestic violence that are
applicable to shelters pursuant to the Family Violence
Prevention and Services Act. The agency shall work with
the United States Postal Service to establish procedures
consistent with the confidentiality provisions in the Vio-
lence Against Women Act of 1994.
(e) TRANSFERS.—A public housing agency may
apply, to each public housing resident seeking to transfer
from one development to another development owned or
operated by the agency, the screening procedures applica-
ble at such time to new applicants for public housing.
SEC. 225. FAMILY CHOICE OF RENTAL PAYMENT.
(a) RENTAL CONTRIBUTION BY RESIDENT.—A fam-
ily residing in a public housing dwelling shall pay as
monthly rent for the unit the amount determined under
paragraph (1) or (2) of subsection (b), subject to the re-
quirement under subsection (c). Each public housing agen-
cy shall provide for each family residing in a public hous-
ing dwelling unit owned or administered by the agency to
elect annually whether the rent paid by such family shall
be determined under paragraph (1) or (2) of subsection
(b).
(b) ALLOWABLE RENT STRUCTURES.—
(1) FLAT RENTS.—Each public housing agency
shall establish, for each dwelling unit in public hous-
ing owned or administered by the agency, a flat
rental amount for the dwelling unit, which shall—
(A) be based on the rental value of the
unit, as determined by the public housing agen-
cy; and
(B) be designed in accordance with sub-
section (e) so that the rent structures do not
create a disincentive for continued residency in
public housing by families who are attempting
to become economically self-sufficient through
employment or who have attained a level of self-
sufficiency through their own efforts.
The rental amount for a dwelling unit shall be con-
sidered to comply with the requirements of this
paragraph if such amount does not exceed the actual
monthly costs to the public housing agency attrib-
utable to providing and operating the dwelling unit.
The preceding sentence may not be construed to re-
quire establishment of rental amounts equal to or
based on operating costs.
(2) INCOME-BASED RENTS.—The monthly rent-
al amount determined under this paragraph for a
family shall be an amount, determined by the public
housing agency, that does not exceed the greatest of
the following amounts (rounded to the nearest dol-
lar):
(A) 30 percent of the monthly adjusted in-
come of the family.
(B) 10 percent of the monthly income of
the family.
(C) If the family is receiving payments for
welfare assistance from a public agency and a
part of such payments, adjusted in accordance
with the actual housing costs of the family, is
specifically designated by such agency to meet
the housing costs of the family, the portion of
such payments that is so designated.
(c) MINIMUM RENTAL AMOUNT.—Notwithstanding
the method for rent determination elected by a family pur-
suant to subsection (a), each public housing agency shall
require that the monthly rent for each dwelling unit in
public housing owned or administered by the agency shall
not be less than a minimum amount, which shall be an
amount determined by the agency that is not less than
$25 nor more than $50.
(d) HARDSHIP PROVISIONS.—
(1) MINIMUM RENTAL.—Notwithstanding sub-
section (c), a public housing agency may, in its sole
discretion, grant an exemption in whole or in part
from application of the minimum monthly rental
under such subsection to any family unable to pay
such amount because of severe financial hardships,
as such term is defined in paragraph (3).
(2) SWITCHING RENT DETERMINATION METH-
ODS.—Notwithstanding subsection (a), in the case of
a family that has elected to pay rent in the amount
determined under subsection (b)(1), a public housing
agency may, in its sole discretion, provide for the
family to pay rent in the amount determined under
subsection (b)(2) during the period for which such
election was made if the family is unable to pay the
amount determined under subsection (b)(1) because
of severe financial hardships, as such term is defined
in paragraph (3).
(3) DEFINITION OF SEVERE FINANCIAL HARD-
SHIPS.—For purposes of this subsection, the term
‘‘severe financial hardships’’ may include situations
in which—
(A) the family is awaiting an eligibility de-
termination for a Federal, State, or local assist-
ance program;
(B) the family would be evicted as a result
of imposition of the minimum rent;
(C) the income of the family has decreased
because of changed circumstances, including
loss of employment, death in the family, and
other situations as may be determined by the
agency; and
(D) such other situations, as may be deter-
mined by the agency.
(e) ENCOURAGEMENT OF SELF-SUFFICIENCY.—The
rental policy developed by each public housing agency shall
encourage and reward employment and economic self-suf-
ficiency.
(f) INCOME REVIEWS.—Each public housing agency
shall review the income of each family occupying a dwell-
ing unit in public housing owned or administered by the
agency not less than annually, except that, in the case of
families that are paying rent in the amount determined
under subsection (b)(1), the agency shall review the in-
come of such family not less than once every 3 years.
(g) DISALLOWANCE
OF EARNED INCOME FROM
RENT DETERMINATIONS.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, the rent payable under this section
by a family whose income increases as a result of
employment of a member of the family who was pre-
viously unemployed for 1 or more years (including a
family whose income increases as a result of the par-
ticipation of a family member in any family self-suf-
ficiency or other job training program) may not be
increased as a result of the increased income due to
such employment during the 18-month period begin-
ning on the date on which the employment is com-
menced.
(2) PHASE-IN OF RENT INCREASES.—After the
expiration of the 18-month period referred to in
paragraph (1), rent increases due to the continued
employment of the family member described in para-
graph (1)(B) shall be phased in over a subsequent
3-year period.
(3) TRANSITION.—Notwithstanding the provi-
sions of paragraphs (1) and (2), any resident of
public housing participating in the program under
the authority contained in the undesignated para-
graph at the end of section 3(c)(3) of the United
States Housing Act of 1937 (as in effect before the
effective date of this Act) shall be governed by such
authority after such date.
(h) PHASE-IN OF RENT CONTRIBUTION INCREASES
AFTER EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), for any family residing in a dwelling unit
in public housing upon the effective date of this Act,
if the monthly contribution for rental of an assisted
dwelling unit to be paid by the family upon initial
applicability of this title is greater than the amount
paid by the family under the provisions of the Unit-
ed States Housing Act of 1937 immediately before
such applicability, any such resulting increase in
rent contribution shall be—
(A) phased in equally over a period of not
less than 3 years, if such increase is 30 percent
or more of such contribution before initial ap-
plicability; and
(B) limited to not more than 10 percent
per year if such increase is more than 10 per-
cent but less than 30 percent of such contribu-
tion before initial applicability.
(2) EXCEPTION.—The minimum rental amount
under subsection (c) shall apply to each family de-
scribed in paragraph (1) of this subsection, notwith-
standing such paragraph.
SEC. 226. LEASE REQUIREMENTS.
In renting dwelling units in a public housing develop-
ment, each public housing agency shall utilize leases
that—
(1) do not contain unreasonable terms and con-
ditions;
(2) obligate the public housing agency to main-
tain the development in compliance with the housing
quality requirements under section 232;
(3) require the public housing agency to give
adequate written notice of termination of the lease,
which shall not be less than—
(A) the period provided under the applica-
ble law of the jurisdiction or 14 days, whichever
is less, in the case of nonpayment of rent;
(B) a reasonable period of time, but not to
exceed 14 days, when the health or safety of
other residents or public housing agency em-
ployees is threatened; and
(C) the period of time provided under the
applicable law of the jurisdiction, in any other
case;
(4) contain the provisions required under sec-
tions 642 and 643 (relating to limitations on occu-
pancy in federally assisted housing); and
(5) specify that, with respect to any notice of
eviction or termination, notwithstanding any State
law, a public housing resident shall be informed of
the opportunity, prior to any hearing or trial, to ex-
amine any relevant documents, records or regula-
tions directly related to the eviction or termination.
SEC. 227. DESIGNATED HOUSING FOR ELDERLY AND DIS-
ABLED FAMILIES.
(a) AUTHORITY TO PROVIDE DESIGNATED HOUS-
ING.—
(1) IN GENERAL.—Subject only to provisions of
this section and notwithstanding any other provision
of law, a public housing agency for which the infor-
mation required under subsection (d) is in effect
may provide public housing developments (or por-
tions of developments) designated for occupancy by
(A) only elderly families, (B) only disabled families,
or (C) elderly and disabled families.
(2) PRIORITY FOR OCCUPANCY.—In determin-
ing priority for admission to public housing develop-
ments (or portions of developments) that are des-
ignated for occupancy as provided in paragraph (1),
the public housing agency may make units in such
developments (or portions) available only to the
types of families for whom the development is des-
ignated.
(3) ELIGIBILITY
OF
NEAR-ELDERLY
FAMI-
LIES.—If a public housing agency determines that
there are insufficient numbers of elderly families to
fill all the units in a development (or portion of a
development) designated under paragraph (1) for oc-
cupancy by only elderly families, the agency may
provide that near-elderly families may occupy dwell-
ing units in the development (or portion).
(b) STANDARDS REGARDING EVICTIONS.—Except as
provided in subtitle C of title VI, any tenant who is law-
fully residing in a dwelling unit in a public housing devel-
opment may not be evicted or otherwise required to vacate
such unit because of the designation of the development
(or portion of a development) pursuant to this section or
because of any action taken by the Secretary or any public
housing agency pursuant to this section.
(c) RELOCATION ASSISTANCE.—A public housing
agency that designates any existing development or build-
ing, or portion thereof, for occupancy as provided under
subsection (a)(1) shall provide, to each person and family
who agrees to be relocated in connection with such des-
ignation—
(1) notice of the designation and an explanation
of available relocation benefits, as soon as is prac-
ticable for the agency and the person or family;
(2) access to comparable housing (including ap-
propriate services and design features), which may
include choice-based rental housing assistance under
title III, at a rental rate paid by the tenant that is
comparable to that applicable to the unit from which
the person or family has vacated; and
(3) payment of actual, reasonable moving ex-
penses.
(d) REQUIRED INCLUSIONS
IN LOCAL HOUSING
MANAGEMENT PLAN.—A public housing agency may des-
ignate a development (or portion of a development) for
occupancy under subsection (a)(1) only if the agency, as
part of the agency’s local housing management plan—
(1) establishes that the designation of the devel-
opment is necessary—
(A) to achieve the housing goals for the ju-
risdiction under the comprehensive housing af-
fordability strategy under section 105 of the
Cranston-Gonzalez National Affordable Hous-
ing Act; or
(B) to meet the housing needs of the low-
income population of the jurisdiction; and
(2) includes a description of—
(A) the development (or portion of a devel-
opment) to be designated;
(B) the types of tenants for which the de-
velopment is to be designated;
(C) any supportive services to be provided
to tenants of the designated development (or
portion);
(D) how the design and related facilities
(as such term is defined in section 202(d)(8) of
the Housing Act of 1959) of the development
accommodate the special environmental needs
of the intended occupants; and
(E) any plans to secure additional re-
sources or housing assistance to provide assist-
ance to families that may have been housed if
occupancy in the development were not re-
stricted pursuant to this section.
For purposes of this subsection, the term ‘‘supportive
services’’ means services designed to meet the special
needs of residents. Notwithstanding section 107, the Sec-
retary may approve a local housing management plan
without approving the portion of the plan covering des-
ignation of a development pursuant to this section.
(e) EFFECTIVENESS.—
(1) INITIAL 5-YEAR EFFECTIVENESS.—The in-
formation required under subsection (d) shall be in
effect for purposes of this section during the 5-year
period that begins upon notification under section
107(a) of the public housing agency that the infor-
mation complies with the requirements under section
106 and this section.
100
(2) RENEWAL.—Upon the expiration of the 5-
year period under paragraph (1) or any 2-year pe-
riod under this paragraph, an agency may extend
the effectiveness of the designation and information
for an additional 2-year period (that begins upon
such expiration) by submitting to the Secretary any
information needed to update the information. The
Secretary may not limit the number of times a pub-
lic housing agency extends the effectiveness of a des-
ignation and information under this paragraph.
(3) TREATMENT
OF
EXISTING
PLANS.—Not-
withstanding any other provision of this section, a
public housing agency shall be considered to have
submitted the information required under this sec-
tion if the agency has submitted to the Secretary an
application and allocation plan under section 7 of
the United States Housing Act of 1937 (as in effect
before the effective date of this Act) that has not
been approved or disapproved before such effective
date.
(4) TRANSITION
PROVISION.—Any application
and allocation plan approved under section 7 of the
United States Housing Act of 1937 (as in effect be-
fore the effective date of this Act) before such effec-
tive date shall be considered to be the information
101
required to be submitted under this section and that
is in effect for purposes of this section for the 5-year
period beginning upon such approval.
(f) INAPPLICABILITY OF UNIFORM RELOCATION AS-
SISTANCE AND REAL PROPERTY ACQUISITIONS POLICY
ACT OF 1970.—No resident of a public housing develop-
ment shall be considered to be displaced for purposes of
the Uniform Relocation Assistance and Real Property Ac-
quisitions Policy Act of 1970 because of the designation
of any existing development or building, or portion thereof,
for occupancy as provided under subsection (a) of this sec-
tion.
(g) USE OF AMOUNTS.—Any amounts appropriated
pursuant to section 10(b) of the Housing Opportunity
Program Extension Act of 1996 (Public Law 104–120)
may also be used for choice-based rental housing assist-
ance under title III for public housing agencies to imple-
ment this section.
Subtitle C—Management
SEC. 231. MANAGEMENT PROCEDURES.
(a) SOUND MANAGEMENT.—A public housing agency
that receives grant amounts under this title shall establish
and comply with procedures and practices sufficient to en-
sure that the public housing developments owned or ad-
ministered by the agency are operated in a sound manner.
102
(b) ACCOUNTING SYSTEM
FOR RENTAL COLLEC-
TIONS AND COSTS.—
(1) ESTABLISHMENT.—Each public housing
agency that receives grant amounts under this title
shall establish and maintain a system of accounting
for rental collections and costs (including adminis-
trative, utility, maintenance, repair, and other oper-
ating costs) for each project and operating cost cen-
ter (as determined by the Secretary).
(2) ACCESS TO RECORDS.—Each public housing
agency shall make available to the general public the
information required pursuant to paragraph (1) re-
garding collections and costs.
(3) EXEMPTION.—The Secretary may permit
authorities owning or operating fewer than 500
dwelling units to comply with the requirements of
this subsection by accounting on an agency-wide
basis.
(c) MANAGEMENT BY OTHER ENTITIES.—Except as
otherwise provided under this Act, a public housing agency
may contract with any other entity to perform any of the
management functions for public housing owned or oper-
ated by the public housing agency.
103
SEC. 232. HOUSING QUALITY REQUIREMENTS.
(a) IN GENERAL.—Each public housing agency that
receives grant amounts under this Act shall maintain its
public housing in a condition that complies—
(1) in the case of public housing located in a ju-
risdiction which has in effect laws, regulations,
standards, or codes regarding habitability of residen-
tial dwellings, with such applicable laws, regulations,
standards, or codes; or
(2) in the case of public housing located in a ju-
risdiction which does not have in effect laws, regula-
tions, standards, or codes described in paragraph
(1), with the housing quality standards established
under subsection (b).
(b) FEDERAL HOUSING QUALITY STANDARDS.—The
Secretary shall establish housing quality standards under
this subsection that ensure that public housing dwelling
units are safe, clean, and healthy. Such standards shall
include requirements relating to habitability, including
maintenance, health and sanitation factors, condition, and
construction of dwellings, and shall, to the greatest extent
practicable, be consistent with the standards established
under section 328(c). The Secretary shall differentiate be-
tween major and minor violations of such standards.
(c) DETERMINATIONS.—Each public housing agency
providing housing assistance shall identify, in the local
104
housing management plan of the agency, whether the
agency is utilizing the standard under paragraph (1) or
(2) of subsection (a).
(d) ANNUAL INSPECTIONS.—Each public housing
agency that owns or operates public housing shall make
an annual inspection of each public housing development
to determine whether units in the development are main-
tained in accordance with the requirements under sub-
section (a). The agency shall submit the results of such
inspections to the Secretary and the Inspector General for
the Department of Housing and Urban Development and
such results shall be available to any auditor conducting
an audit under section 541.
SEC. 233. EMPLOYMENT OF RESIDENTS.
Section 3 of the Housing and Urban Development
Act of 1968 (12 U.S.C. 1701u) is amended—
(1) in subsection (c)(1)—
(A) in subparagraph (A)—
(i) by striking ‘‘public and Indian
housing agencies’’ and inserting ‘‘public
housing agencies and recipients of grants
under the Native American Housing As-
sistance and Self-Determination Act of
1996’’; and
105
(ii) by striking ‘‘development assist-
ance’’ and all that follows through the end
and inserting ‘‘assistance provided under
title II of the Housing Opportunity and
Responsibility Act of 1997 and used for
the housing production, operation, or cap-
ital needs.’’; and
(B) in subparagraph (B)(ii), by striking
‘‘managed by the public or Indian housing
agency’’ and inserting ‘‘assisted by the public
housing agency or the recipient of a grant
under the Native American Housing Assistance
and Self-Determination Act of 1996’’; and
(2) in subsection (d)(1)—
(A) in subparagraph (A)—
(i) by striking ‘‘public and Indian
housing agencies’’ and inserting ‘‘public
housing agencies and recipients of grants
under the Native American Housing As-
sistance and Self-Determination Act of
1996’’; and
(ii) by striking ‘‘development assist-
ance’’ and all that follows through ‘‘section
14 of that Act’’ and inserting ‘‘assistance
106
provided under title II of the Housing Op-
portunity and Responsibility Act of 1997
and used for the housing production, oper-
ation, or capital needs’’; and
(B) in subparagraph (B)(ii), by striking
‘‘operated by the public or Indian housing agen-
cy’’ and inserting ‘‘assisted by the public hous-
ing agency or the recipient of a grant under the
Native American Housing Assistance and Self-
Determination Act of 1996’’.
SEC. 234. RESIDENT COUNCILS AND RESIDENT MANAGE-
MENT CORPORATIONS.
(a) RESIDENT COUNCILS.—The residents of a public
housing development may establish a resident council for
the development for purposes of consideration of issues re-
lating to residents, representation of resident interests,
and coordination and consultation with a public housing
agency. A resident council shall be an organization or as-
sociation that—
(1) is nonprofit in character;
(2) is representative of the residents of the eli-
gible housing;
(3) adopts written procedures providing for the
election of officers on a regular basis; and
107
(4) has a democratically elected governing
board, which is elected by the residents of the eligi-
ble housing on a regular basis.
(b) RESIDENT MANAGEMENT CORPORATIONS.—
(1) ESTABLISHMENT.—The residents of a pub-
lic housing development may establish a resident
management corporation for the purpose of assum-
ing the responsibility for the management of the de-
velopment under section 235 or purchasing a devel-
opment.
(2) REQUIREMENTS.—A resident management
corporation shall be a corporation that—
(A) is nonprofit in character;
(B) is organized under the laws of the
State in which the development is located;
(C) has as its sole voting members the
residents of the development; and
(D) is established by the resident council
for the development or, if there is not a resident
council, by a majority of the households of the
development.
108
SEC. 235. MANAGEMENT BY RESIDENT MANAGEMENT COR-
PORATION.
(a) AUTHORITY.—A public housing agency may enter
into a contract under this section with a resident manage-
ment corporation to provide for the management of public
housing developments by the corporation.
(b) CONTRACT.—A contract under this section for
management of public housing developments by a resident
management corporation shall establish the respective
management rights and responsibilities of the corporation
and the public housing agency. The contract shall be con-
sistent with the requirements of this Act applicable to pub-
lic housing development and may include specific terms
governing management personnel and compensation, ac-
cess to public housing records, submission of and adher-
ence to budgets, rent collection procedures, resident in-
come verification, resident eligibility determinations, resi-
dent eviction, the acquisition of supplies and materials and
such other matters as may be appropriate. The contract
shall be treated as a contracting out of services.
(c) BONDING
AND INSURANCE.—Before assuming
any management responsibility for a public housing devel-
opment, the resident management corporation shall pro-
vide fidelity bonding and insurance, or equivalent protec-
tion. Such bonding and insurance, or its equivalent, shall
109
be adequate to protect the Secretary and the public hous-
ing agency against loss, theft, embezzlement, or fraudulent
acts on the part of the resident management corporation
or its employees.
(d) BLOCK GRANT ASSISTANCE AND INCOME.—A
contract under this section shall provide for—
(1) the public housing agency to provide a por-
tion of the block grant assistance under this title to
the resident management corporation for purposes of
operating the public housing development covered by
the contract and performing such other eligible ac-
tivities with respect to the development as may be
provided under the contract;
(2) the amount of income expected to be de-
rived from the development itself (from sources such
as rents and charges);
(3) the amount of income to be provided to the
development from the other sources of income of the
public housing agency (such as interest income, ad-
ministrative fees, and rents); and
(4) any income generated by a resident man-
agement corporation of a public housing develop-
ment that exceeds the income estimated under the
contract shall be used for eligible activities under
section 203(a).
110
(e) CALCULATION OF TOTAL INCOME.—
(1) MAINTENANCE
OF
SUPPORT.—Subject to
paragraph (2), the amount of assistance provided by
a public housing agency to a public housing develop-
ment managed by a resident management corpora-
tion may not be reduced during the 3-year period be-
ginning on the date on which the resident manage-
ment corporation is first established for the develop-
ment.
(2) REDUCTIONS
AND
INCREASES
IN
SUP-
PORT.—If the total income of a public housing agen-
cy is reduced or increased, the income provided by
the public housing agency to a public housing devel-
opment managed by a resident management corpora-
tion shall be reduced or increased in proportion to
the reduction or increase in the total income of the
agency, except that any reduction in block grant
amounts under this title to the agency that occurs
as a result of fraud, waste, or mismanagement by
the agency shall not affect the amount provided to
the resident management corporation.
111
SEC. 236. TRANSFER OF MANAGEMENT OF CERTAIN HOUS-
ING TO INDEPENDENT MANAGER AT RE-
QUEST OF RESIDENTS.
(a) AUTHORITY.—The Secretary may transfer the re-
sponsibility and authority for management of specified
housing (as such term is defined in subsection (h)) from
a public housing agency to an eligible management entity,
in accordance with the requirements of this section, if—
(1) such housing is owned or operated by a
public housing agency that is designated as a trou-
bled agency under section 533(a); and
(2) the Secretary determines that—
(A) such housing has deferred mainte-
nance, physical deterioration, or obsolescence of
major systems and other deficiencies in the
physical plant of the project;
(B) such housing is occupied predomi-
nantly by families with children who are in a
severe state of distress, characterized by such
factors as high rates of unemployment, teenage
pregnancy, single-parent households, long-term
dependency on public assistance and minimal
educational achievement;
112
(C) such housing is located in an area such
that the housing is subject to recurrent vandal-
ism and criminal activity (including drug-relat-
ed criminal activity); and
(D) the residents can demonstrate that the
elements of distress for such housing specified
in subparagraphs (A) through (C) can be rem-
edied by an entity that has a demonstrated ca-
pacity to manage, with reasonable expenses for
modernization.
Such a transfer may be made only as provided in this sec-
tion, pursuant to the approval by the Secretary of a re-
quest for the transfer made by a majority vote of the resi-
dents for the specified housing, after consultation with the
public housing agency for the specified housing.
(b) BLOCK GRANT ASSISTANCE.—Pursuant to a con-
tract under subsection (c), the Secretary shall require the
public housing agency for specified housing to provide to
the manager for the housing, from any block grant
amounts under this title for the agency, fair and reason-
able amounts for operating costs for the housing. The
amount made available under this subsection to a manager
shall be determined by the Secretary based on the share
for the specified housing of the total block grant amounts
for the public housing agency transferring the housing,
113
taking into consideration the operating and capital im-
provement needs of the specified housing, the operating
and capital improvement needs of the remaining public
housing units managed by the public housing agency, and
the local housing management plan of such agency.
(c) CONTRACT BETWEEN SECRETARY
AND MAN-
AGER.—
(1) REQUIREMENTS.—Pursuant to the approval
of a request under this section for transfer of the
management of specified housing, the Secretary shall
enter into a contract with the eligible management
entity.
(2) TERMS.— A contract under this subsection
shall contain provisions establishing the rights and
responsibilities of the manager with respect to the
specified housing and the Secretary and shall be
consistent with the requirements of this Act applica-
ble to public housing developments.
(d) COMPLIANCE WITH LOCAL HOUSING MANAGE-
MENT PLAN.—A manager of specified housing under this
section shall comply with the approved local housing man-
agement plan applicable to the housing and shall submit
such information to the public housing agency from which
management was transferred as may be necessary for such
114
agency to prepare and update its local housing manage-
ment plan.
(e) DEMOLITION AND DISPOSITION BY MANAGER.—
A manager under this section may demolish or dispose of
specified housing only if, and in the manner, provided for
in the local housing management plan for the agency
transferring management of the housing.
(f) LIMITATION ON PHA LIABILITY.—A public hous-
ing agency that is not a manager for specified housing
shall not be liable for any act or failure to act by a man-
ager or resident council for the specified housing.
(g) TREATMENT OF MANAGER.—To the extent not
inconsistent with this section and to the extent the Sec-
retary determines not inconsistent with the purposes of
this Act, a manager of specified housing under this section
shall be considered to be a public housing agency for pur-
poses of this title.
(h) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) ELIGIBLE
MANAGEMENT
ENTITY.—The
term ‘‘eligible management entity’’ means, with re-
spect to any public housing development, any of the
following entities:
(A) NONPROFIT ORGANIZATION.—A public
or private nonprofit organization, which shall—
115
(i) include a resident management
corporation or resident management orga-
nization and, as determined by the Sec-
retary, a public or private nonprofit orga-
nization sponsored by the public housing
agency that owns the development; and
(ii) not include the public housing
agency that owns the development.
(B) FOR-PROFIT ENTITY.—A for-profit en-
tity that has demonstrated experience in provid-
ing low-income housing.
(C) STATE
OR
LOCAL
GOVERNMENT.—A
State or local government, including an agency
or instrumentality thereof.
(D) PUBLIC HOUSING AGENCY.—A public
housing agency (other than the public housing
agency that owns the development).
The term does not include a resident council.
(2) MANAGER.—The term ‘‘manager’’ means
any eligible management entity that has entered into
a contract under this section with the Secretary for
the management of specified housing.
(3) NONPROFIT.—The term ‘‘nonprofit’’ means,
with respect to an organization, association, corpora-
tion, or other entity, that no part of the net earnings
116
of the entity inures to the benefit of any member,
founder, contributor, or individual.
(4) PRIVATE NONPROFIT ORGANIZATION.—The
term ‘‘private nonprofit organization’’ means any
private organization (including a State or locally
chartered organization) that—
(A) is incorporated under State or local
law;
(B) is nonprofit in character;
(C) complies with standards of financial
accountability acceptable to the Secretary; and
(D) has among its purposes significant ac-
tivities related to the provision of decent hous-
ing that is affordable to low-income families.
(5) PUBLIC
HOUSING
AGENCY.—The term
‘‘public housing agency’’ has the meaning given such
term in section 103(a).
(6) PUBLIC
NONPROFIT
ORGANIZATION.—The
term ‘‘public nonprofit organization’’ means any
public entity that is nonprofit in character.
(7) SPECIFIED HOUSING.—The term ‘‘specified
housing’’ means a public housing development or de-
velopments, or a portion of a development or devel-
opments, for which the transfer of management is
requested under this section. The term includes one
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or more contiguous buildings and an area of contig-
uous row houses, but in the case of a single building,
the building shall be sufficiently separable from the
remainder of the development of which it is part to
make transfer of the management of the building
feasible for purposes of this section.
SEC. 237. RESIDENT OPPORTUNITY PROGRAM.
(a) PURPOSE.—The purpose of this section is to en-
courage increased resident management of public housing
developments, as a means of improving existing living con-
ditions in public housing developments, by providing in-
creased flexibility for public housing developments that are
managed by residents by—
(1) permitting the retention, and use for certain
purposes, of any revenues exceeding operating and
project costs; and
(2) providing funding, from amounts otherwise
available, for technical assistance to promote forma-
tion and development of resident management enti-
ties.
For purposes of this section, the term ‘‘public housing de-
velopment’’ includes one or more contiguous buildings or
an area of contiguous row houses the elected resident
councils of which approve the establishment of a resident
118
management corporation and otherwise meet the require-
ments of this section.
(b) PROGRAM REQUIREMENTS.—
(1) RESIDENT COUNCIL.—As a condition of en-
tering into a resident opportunity program, the
elected resident council of a public housing develop-
ment shall approve the establishment of a resident
management corporation that complies with the re-
quirements of section 234(b)(2). When such ap-
proval is made by the elected resident council of a
building or row house area, the resident opportunity
program shall not interfere with the rights of other
families residing in the development or harm the ef-
ficient operation of the development. The resident
management corporation and the resident council
may be the same organization, if the organization
complies with the requirements applicable to both
the corporation and council.
(2) PUBLIC HOUSING MANAGEMENT SPECIAL-
IST.—The resident council of a public housing devel-
opment, in cooperation with the public housing agen-
cy, shall select a qualified public housing manage-
ment specialist to assist in determining the feasibil-
ity of, and to help establish, a resident management
119
corporation and to provide training and other duties
agreed to in the daily operations of the development.
(3) MANAGEMENT RESPONSIBILITIES.—A resi-
dent management corporation that qualifies under
this section, and that supplies insurance and bond-
ing or equivalent protection sufficient to the Sec-
retary and the public housing agency, shall enter
into a contract with the agency establishing the re-
spective management rights and responsibilities of
the corporation and the agency. The contract shall
be treated as a contracting out of services and shall
be subject to the requirements under section 235 for
such contracts.
(4) ANNUAL AUDIT.—The books and records of
a resident management corporation operating a pub-
lic housing development shall be audited annually by
a certified public accountant. A written report of
each such audit shall be forwarded to the public
housing agency and the Secretary.
(c) COMPREHENSIVE IMPROVEMENT ASSISTANCE.—
Public housing developments managed by resident man-
agement corporations may be provided with modernization
assistance from grant amounts under this title for pur-
poses of renovating such developments. If such renovation
activities (including the planning and architectural design
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of the rehabilitation) are administered by a resident man-
agement corporation, the public housing agency involved
may not retain, for any administrative or other reason,
any portion of the assistance provided pursuant to this
subsection unless otherwise provided by contract.
(d) WAIVER OF FEDERAL REQUIREMENTS.—
(1) 
WAIVER
OF
REGULATORY
REQUIRE-
MENTS.—Upon the request of any resident manage-
ment corporation and public housing agency, and
after notice and an opportunity to comment is af-
forded to the affected residents, the Secretary may
waive (for both the resident management corporation
and the public housing agency) any requirement es-
tablished by the Secretary (and not specified in any
statute) that the Secretary determines to unneces-
sarily increase the costs or restrict the income of a
public housing development.
(2) WAIVER TO PERMIT EMPLOYMENT.—Upon
the request of any resident management corporation,
the Secretary may, subject to applicable collective
bargaining agreements, permit residents of such de-
velopment to volunteer a portion of their labor.
(3) EXCEPTIONS.—The Secretary may not
waive under this subsection any requirement with re-
spect to income eligibility for purposes of section