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(1) REQUIRED APPOINTMENT.—In any proceed-
ing under subsection (b)(5), upon a determination
that a substantial default has occurred, and without
regard to the availability of alternative remedies, the
court shall appoint a receiver to conduct the affairs
of the public housing agency in a manner consistent
with this Act and in accordance with such further
terms and conditions as the court may provide. The
receiver appointed may be another public housing
agency, a private management corporation, the Sec-
retary, or any other appropriate entity. The court
shall have power to grant appropriate temporary or
preliminary relief pending final disposition of the pe-
tition by the Secretary.
(2) POWERS OF RECEIVER.—If a receiver is ap-
pointed for a public housing agency pursuant to sub-
section (b)(5), in addition to the powers accorded by
the court appointing the receiver, the receiver—
(A) may abrogate contracts that substan-
tially impede correction of the substantial default
or improvement of the classification, but only
after bona fide efforts to renegotiate such con-
tracts have failed and the receiver has made a
written determination regarding such abroga-
tion, which shall be available to the public upon
274
request, identify such contracts, and explain the
determination that such contracts may be abro-
gated;
(B) may demolish and dispose of assets of
the agency in accordance with section 261;
(C) where determined appropriate by the
Secretary, may require the establishment of one
or more new public housing agencies, to the ex-
tent permitted by State and local law; and
(D) except as provided in subparagraph
(C), shall not be subject to any State or local
laws relating to civil service requirements, em-
ployee rights, procurement, or financial or ad-
ministrative controls that, in the determination
of the receiver, substantially impede correction of
the substantial default or improvement of the
classification, but only if the receiver has made
a written determination regarding such inappli-
cability, which shall be available to the public
upon request, identify such inapplicable laws,
and explain the determination that such laws
impede such correction.
For purposes of this paragraph, the term ‘‘public
housing agency’’ includes any developments or func-
275
tions of a public housing agency under any section of
this title.
(3) TERMINATION.—The appointment of a re-
ceiver pursuant to this subsection may be terminated,
upon the petition of any party, when the court deter-
mines that all defaults have been cured or the public
housing agency will be able to make the same amount
of progress in correcting the management of the hous-
ing as the receiver.
(f) LIABILITY.—If the Secretary takes possession of an
agency pursuant to subsection (b)(2) or a receiver is ap-
pointed pursuant to subsection (b)(5) for a public housing
agency, the Secretary or the receiver shall be deemed to be
acting in the capacity of the public housing agency (and
not in the official capacity as Secretary or other official)
and any liability incurred shall be a liability of the public
housing agency.
(g) EFFECTIVENESS.—The provisions of this section
shall apply with respect to actions taken before, on, or after
the effective date of this Act and shall apply to any receivers
appointed for a public housing agency before the effective
date of this Act.
276
SEC. 546. MANDATORY TAKEOVER OF CHRONICALLY TROU-
BLED PHA’S.
(a) REMOVAL
OF
AGENCY.—Notwithstanding any
other provision of this Act, not later than the expiration
of the 180-day period beginning on the effective date of this
Act, the Secretary shall take one of the following actions
with respect to each chronically troubled public housing
agency:
(1) CONTRACTING
FOR
MANAGEMENT.—Solicit
competitive proposals for the management of the
agency pursuant to section 545(b)(1) and replace the
management of the agency pursuant to selection of
such a proposal.
(2) TAKEOVER.—Take possession of the agency
pursuant to section 545(b)(2) of such Act.
(3) PETITION FOR RECEIVER.—Petition for the
appointment of a receiver for the agency pursuant to
section 545(b)(5).
(b) DEFINITION.—For purposes of this section, the
term ‘‘chronically troubled public housing agency’’ means
a public housing agency that, as of the effective date of this
Act, is designated under section 6(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) of this Act)
as a troubled public housing agency and has been so des-
ignated continuously for the 3-year period ending upon the
277
effective date of this Act; except that such term does not
include any agency that owns or operates less than 1250
public housing dwelling units and that the Secretary deter-
mines can, with a reasonable amount of effort, make such
improvements or remedies as may be necessary to remove
its designation as troubled within 12 months.
SEC. 547. TREATMENT OF TROUBLED PHA’S.
(a) EFFECT OF TROUBLED STATUS ON CHAS.—The
comprehensive housing affordability strategy (or any con-
solidated plan incorporating such strategy) for the State or
unit of general local government in which any troubled pub-
lic housing agency is located shall not be considered to com-
ply with the requirements under section 105 of the Cran-
ston-Gonzalez National Affordable Housing Act unless such
plan includes a description of the manner in which the
State or unit will assist such troubled agency in improving
its operations to remove such designation.
(b) DEFINITION.—For purposes of this section, the
term ‘‘troubled public housing agency’’ means a public
housing agency that—
(1) upon the effective date of this Act, is des-
ignated under section 6(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) of
this Act) as a troubled public housing agency; and
308
a plan for addressing the problem of crime in and
around the housing for which the application is sub-
mitted, describing in detail activities to be conducted
during the fiscal year for which the grant is re-
quested.
‘‘(2) GRANTS FOR PHA’S WITH FEWER THAN 250
UNITS.—In each fiscal year the Secretary may, to the
extent 
amounts 
are 
available 
under 
section
5131(b)(2), make grants under this chapter to public
housing agencies that own or operate fewer than 250
public housing dwelling units and have submitted ap-
plications under paragraph (1) that the Secretary has
approved pursuant to the criteria under paragraph
(4).
‘‘(3) GRANTS FOR FEDERALLY ASSISTED LOW-IN-
COME HOUSING.—In each fiscal year the Secretary
may, to the extent amounts are available under sec-
tion 5131(b)(3), make grants under this chapter to
owners of federally assisted low-income housing that
have submitted applications under paragraph (1)
that the Secretary has approved pursuant to the cri-
teria under paragraphs (4) and (5).
‘‘(4) CRITERIA
FOR
APPROVAL
OF
APPLICA-
TIONS.—The Secretary shall determine whether to ap-
309
prove each application under this subsection on the
basis of—
‘‘(A) the extent of the crime problem in and
around the housing for which the application is
made;
‘‘(B) the quality of the plan to address the
crime problem in the housing for which the ap-
plication is made;
‘‘(C) the capability of the applicant to carry
out the plan; and
‘‘(D) the extent to which the tenants of the
housing, the local government, local community-
based nonprofit organizations, local tenant orga-
nizations representing residents of neighboring
projects that are owned or assisted by the Sec-
retary, and the local community support and
participate in the design and implementation of
the activities proposed to be funded under the
application.
In each fiscal year, the Secretary may give preference
to applications under this subsection for housing
made by applicants who received a grant for such
housing for the preceding fiscal year under this sub-
section or under the provisions of this chapter as in
effect immediately before the date of the enactment of