the agency may use amounts from a grant under
this title for any eligible activities under section
203(a), regardless of the fund from which the
amounts were allocated and provided.
(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 deter-
mined under section 204, except as otherwise provided 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 com-
ply with such requirements;
(4) the agency is exempt from local taxes, as pro-
vided under subsection (e), or receives a contribution,
as provided under such subsection;
(5) no member of the board of directors or other
governing body of the agency, or the executive direc-
tor, 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 (exclu-
sive of any portions not assisted with amounts
provided under this title) are exempt from all
real and personal property taxes levied or im-
posed by the State, city, county, or other politi-
cal 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 dif-
ference 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 housing
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 TAX-
ATION.—Notwithstanding paragraph (1), a public
housing agency that does not comply with the require-
ments 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 de-
velopment 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 develop-
ment.
(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 required
by the Secretary pursuant to this title.
(g) EXCEPTION.—Notwithstanding subsection (a), the
Secretary may make a grant under this title for a public
housing agency that is not an eligible public housing agency
but only for the period necessary to secure, in accordance
with this title, an alternative public housing agency for the
public housing of the ineligible agency.
(h) RECAPTURE OF CAPITAL ASSISTANCE AMOUNTS.—
The Secretary may recapture, from any grant amounts
made available to a public housing agency from the capital
fund, any portion of such amounts that are not used or
obligated by the public housing agency for use for eligible
activities under section 203(a)(1) (or dedicated for use pur-
suant to section 202(b)(2)(A)) before the expiration of the
24-month period beginning upon the award of such grant
to the agency.
SEC. 203. ELIGIBLE AND REQUIRED ACTIVITIES.
(a) ELIGIBLE ACTIVITIES.—Except as provided in
subsection (b) and in section 202(b)(2), grant amounts allo-
cated and provided from the capital fund and grant
amounts allocated and provided from the operating fund
may be used 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 rede-
sign, reconstruction, and reconfiguration of pub-
lic housing sites and buildings and the produc-
tion 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 elder-
ly 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 developments;
(G) the costs of insurance;