200
(c) DETERMINATION AND REPORT.—Pursuant to a re-
view or evaluation under this section, the Board shall deter-
mine whether the authority meets the requirements for ac-
creditation under section 431(a)(3), shall accredit the au-
thority if it meets such requirements, and shall submit a
report on the results of the review or evaluation and such
determination to the Secretary and the authority.
(d) ACCREDITATION.—An accreditation under this sec-
tion shall expire at the end the term established by the
Board in granting the accreditation, which may not exceed
5 years. The Board may qualify an accreditation placing
conditions on the accreditation based on the future perform-
ance of the authority.
SEC. 434. CLASSIFICATION BY PERFORMANCE CATEGORY.
Upon completing the accreditation process under sec-
tion 433 with respect to a local housing and management
authority, the Housing Finance and Accreditation Board
shall designate the authority according to the performance
categories under section 431(a)(2). In determining the clas-
sification of an authority, the Board shall consider the most
recent financial and performance audit under section 432
of the authority and accreditation reports under section
433(c) for the authority.
201
SEC. 435. PERFORMANCE AGREEMENTS FOR AUTHORITIES
AT RISK OF BECOMING TROUBLED.
(a) IN GENERAL.—Upon designation of a local hous-
ing and management authority as at risk of becoming trou-
bled under section 431(a)(2)(C), the Secretary shall seek to
enter into an agreement with the authority providing for
improvement of the elements of the authority that have been
identified. An agreement under this section shall contain
such terms and conditions as the Secretary determines are
appropriate for addressing the elements identified, which
may include an on-site, independent assessment of the man-
agement of the authority.
(b) POWERS OF SECRETARY.—If the Secretary deter-
mines that such action is necessary to prevent the local
housing and management authority from becoming a trou-
bled authority, the Secretary may—
(1) solicit competitive proposals from other local
housing and management authorities and private
housing management agents (which may be selected
by existing tenants through administrative procedures
established by the Secretary), to prepare for any case
in which such agents may be needed for managing
all, or part, of the housing administered by the au-
thority; or
(2) solicit competitive proposals from other local
housing and management authorities and private en-
202
tities with experience in construction management, to
prepare for any case in which such authorities or
firms may be needed to oversee implementation of as-
sistance made available for capital improvement for
public housing of the authority.
SEC. 436. PERFORMANCE AGREEMENTS AND CDBG SANC-
TIONS FOR TROUBLED LHMA’S.
(a) IN GENERAL.—Upon designation of a local hous-
ing and management authority as a troubled authority
under section 431(a)(2)(D), the Secretary shall seek to enter
into an agreement with the authority providing for improv-
ing the management performance of the authority.
(b) CONTENTS.—An agreement under this section be-
tween the Secretary and a local housing and management
authority shall set forth—
(1) targets for improving performance, as meas-
ured by the guidelines and standards established
under section 431(a)(1) and other requirements with-
in a specified period of time, which shall include tar-
gets to be met upon the expiration of the 12-month pe-
riod beginning upon entering into the agreement;
(2) strategies for meeting such targets;
(3) sanctions for failure to implement such strat-
egies; and
203
(4) to the extent the Secretary deems appro-
priate, a plan for enhancing resident involvement in
the management of the local housing and management
authority.
(c) LOCAL ASSISTANCE
IN IMPLEMENTATION.—The
Secretary and the local housing and management authority
shall, to the maximum extent practicable, seek the assistance
of local public and private entities in carrying out an
agreement under this section.
(d) DEFAULT UNDER PERFORMANCE AGREEMENT.—
Upon the expiration of the 12-month period beginning upon
entering into an agreement under this section with a local
housing and management authority, the Secretary shall re-
view the performance of the authority in relation to the per-
formance targets and strategies under the agreement. If the
Secretary determines that the authority has failed to com-
ply with the performance targets established for the expira-
tion of such period, the Secretary shall take the action au-
thorized under section 437(b)(2).
(e) CDBG SANCTION AGAINST LOCAL GOVERNMENT
CONTRIBUTING TO TROUBLED STATUS OF LHMA.—If the
Secretary determines that the actions or inaction of any
unit of general local government within which any portion
of the jurisdiction of a local housing and management au-
thority is located has substantially contributed to the condi-
204
tions resulting in the authority being designated under sec-
tion 431(a)(2)(D) as a troubled authority, the Secretary
may redirect or withhold, from such unit of general local
government any amounts allocated for such unit under sec-
tion 106 of such Act.
SEC. 437. OPTION TO DEMAND CONVEYANCE OF TITLE TO
OR POSSESSION OF PUBLIC HOUSING.
(a) AUTHORITY FOR CONVEYANCE.—A contract under
section 201 for block grants under title II (including con-
tracts which amend or supersede contracts previously made
(including contracts for contributions)) may provide that
upon the occurrence of a substantial default with respect
to the covenants or conditions to which the local housing
and management authority is subject (as such substantial
default shall be defined in such contract) or upon designa-
tion of the authority as dysfunctional pursuant to section
431(a)(2)(E), the local housing and management authority
shall be obligated, at the option of the Secretary, to—
(1) convey title in any case where, in the deter-
mination of the Secretary (which determination shall
be final and conclusive), such conveyance of title is
necessary to achieve the purposes of this Act; or
(2) deliver to the Secretary possession of the de-
velopment, as then constituted, to which such contract
relates.
205
(b) OBLIGATION TO RECONVEY.—Any block grant con-
tract under title II containing the provisions authorized in
subsection (a) shall also provide that the Secretary shall
be obligated to reconvey or redeliver possession of the devel-
opment, as constituted at the time of reconveyance or rede-
livery, to such local housing and management authority or
to its successor (if such local housing and management au-
thority or a successor exists) upon such terms as shall be
prescribed in such contract, and as soon as practicable
after—
(1) the Secretary is satisfied that all defaults
with respect to the development have been cured, and
that the development will, in order to fulfill the pur-
poses of this Act, thereafter be operated in accordance
with the terms of such contract; or
(2) the termination of the obligation to make an-
nual block grants to the authority, unless there are
any obligations or covenants of the authority to the
Secretary which are then in default.
Any prior conveyances and reconveyances or deliveries and
redeliveries of possession shall not exhaust the right to re-
quire a conveyance or delivery of possession of the develop-
ment to the Secretary pursuant to subsection (a) upon the
subsequent occurrence of a substantial default.
206
(c) CONTINUED GRANTS FOR REPAYMENT OF BONDS
AND NOTES UNDER 1937 ACT.—If—
(1) a contract for block grants under title II for
an authority includes provisions that expressly state
that the provisions are included pursuant to this sub-
section, and
(2) the portion of the block grant payable for
debt service requirements pursuant to the contract has
been pledged by the local housing and management
authority as security for the payment of the principal
and interest on any of its obligations, then—
(A) the Secretary shall (notwithstanding
any other provisions of this Act), continue to
make the block grant payments for the authority
so long as any of such obligations remain out-
standing; and
(B) the Secretary may covenant in such a
contract that in any event such block grant
amounts shall in each year be at least equal to
an amount which, together with such income or
other funds as are actually available from the de-
velopment for the purpose at the time such block
grant payments are made, will suffice for the
payment of all installments of principal and in-
terest on the obligations for which the amounts
207
provided for in the contract shall have been
pledged as security that fall due within the next
succeeding 12 months.
In no case shall such block grant amounts be in excess of
the maximum sum specified in the contract involved, nor
for longer than the remainder of the maximum period fixed
by the contract.
SEC. 438. REMOVAL OF INEFFECTIVE LHMA’S.
(a) CONDITIONS OF REMOVAL.—The actions specified
in subsection (b) may be taken only upon—
(1) the occurrence of events or conditions that
constitute a substantial default by a local housing
and management authority with respect to (A) the
covenants or conditions to which the local housing
and management authority is subject, or (B) an
agreement entered into under section 435;
(2) designation of the authority as dysfunctional
pursuant to section 431(a)(2)(E);
(3) in the case only of action under subsection
(b)(1), failure of a local housing and management au-
thority to obtain reaccreditation upon the expiration
of the term of a previous accreditation granted under
this subtitle; or
(4) submission to the Secretary of a petition by
the residents of the public housing owned or operated
208
by a local housing and management authority that is
designated as troubled or dysfunctional pursuant to
section 431(a)(2).
(b) REMOVAL ACTIONS.—Notwithstanding any other
provision of law or of any block grant contract under title
II or any grant agreement under title III, in accordance
with subsection (a), the Secretary may—
(1) solicit competitive proposals from other local
housing and management authorities and private
housing management agents (which, in the discretion
of the Secretary, may be selected by existing public
housing residents through administrative procedures
established by the Secretary) and, if appropriate, pro-
vide for such agents to manage all, or part, of the
housing administered by the local housing and man-
agement authority or all or part of the other functions
of the authority;
(2) take possession of the local housing and man-
agement authority, including any developments or
functions of the authority under any section of this
Act;
(3) solicit competitive proposals from other local
housing and management authorities and private en-
tities with experience in construction management
and, if appropriate, provide for such authorities or
209
firms to oversee implementation of assistance made
available for capital improvements for public housing;
(4) require the authority to make other arrange-
ments acceptable to the Secretary and in the best in-
terests of the public housing residents and assisted
families under title III for managing all, or part of,
the public housing administered by the authority or
the functions of the authority; or
(5) if the Secretary determines that reasonable
opportunities for remedy using the actions under
paragraphs (1) through (4) have failed or are not
available, petition for the appointment of a receiver
for the local housing and management authority to
any district court of the United States or to any court
of the State in which any portion of the jurisdiction
of the local housing and management authority is lo-
cated, that is authorized to appoint a receiver for the
purposes and having the powers prescribed in this
section.
(c) EMERGENCY ASSISTANCE.—The Secretary may
make available to receivers and other entities selected or ap-
pointed pursuant to this section such assistance as is fair
and reasonable to remedy the substantial deterioration of
living conditions in individual public housing developments
or other related emergencies that endanger the health, safety
210
and welfare of public housing residents or assisted families
under title III.
(d) POWERS OF SECRETARY.—If the Secretary takes
possession of an authority, or any developments or func-
tions of an authority, pursuant to subsection (b)(2), the Sec-
retary—
(1) may abrogate contracts that substantially
impede correction of the substantial default or im-
provement of the classification;
(2) may demolish and dispose of assets of the au-
thority in accordance with subtitle E;
(3) where determined appropriate by the Sec-
retary, may require the establishment of one or more
new local housing and management authorities;
(4) may consolidate the authority into other
well-managed local housing and management authori-
ties with the consent of such well-managed authori-
ties;
(5) shall not be subject to any State or local laws
that, in the determination of the receiver, substan-
tially impede correction of the substantial default or
improvement of the classification; and
(6) shall have such additional authority as a dis-
trict court of the United States has the authority to
211
confer under like circumstances upon a receiver to
achieve the purposes of the receivership.
The Secretary may appoint, on a competitive or non-
competitive basis, an individual or entity as an adminis-
trative receiver to assume the Secretary’s responsibility
under this paragraph for the administration of a local
housing and management authority. The Secretary may
delegate to the administrative receiver any or all of the pow-
ers of the Secretary under this subsection. Regardless of any
delegation under this subsection, an administrative receiver
may not require the establishment of one or more new local
housing and management authorities pursuant to para-
graph (3) unless the Secretary first approves such establish-
ment. For purposes of this subsection, the term ‘‘local hous-
ing and management authority’’ includes any developments
or functions of a local housing and management authority
under any section of this title.
(e) RECEIVERSHIP.—
(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 local housing and management authority in a
manner consistent with this Act and in accordance
212
with such further terms and conditions as the court
may provide. The receiver appointed may be another
local housing and management authority, a private
management corporation, the Secretary, or any other
appropriate entity. The court shall have power to
grant appropriate temporary or preliminary relief
pending final disposition of the petition by the Sec-
retary.
(2) POWERS OF RECEIVER.—If a receiver is ap-
pointed for a local housing and management author-
ity pursuant to subsection (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;
(B) may demolish and dispose of assets of
the authority in accordance with subtitle E;
(C) where determined appropriate by the
Secretary, may require the establishment of one
or more new local housing and management au-
thorities, to the extent permitted by State and
local law; and
(D except as provided in subparagraph (C),
shall not be subject to any State or local laws
213
that, in the determination of the receiver, sub-
stantially impede correction of the substantial
default or improvement of the classification.
For purposes of this paragraph, the term ‘‘local hous-
ing and management authority’’ includes any devel-
opments or functions of a local housing and manage-
ment authority 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 local
housing and management authority will be able to
make the same amount of progress in correcting the
management of the housing as the receiver.
(f) LIABILITY.—If the Secretary takes possession of an
authority pursuant to subsection (b)(2) or a receiver is ap-
pointed pursuant to subsection (b)(5) for a local housing
and management authority, the Secretary or the receiver
shall be deemed to be acting in the capacity of the local
housing and management authority (and not in the official
capacity as Secretary or other official) and any liability
incurred shall be a liability of the local housing and man-
agement authority.
214
SEC. 439. 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 date of the enact-
ment of this Act, the Secretary shall take one of the follow-
ing 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 437(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 437(b)(2) of such Act.
(b) DEFINITION.—For purposes of this section, the
term ‘‘chronically troubled public housing agency’’ means
a public housing agency that, as of the date of the enactment
of this Act, is designated under section 6(j)(2) of the United
States Housing Act of 1937 (as in effect immediately before
the enactment of this Act) as a troubled public housing
agency and has been so designated continuously for the 3-
year period ending upon such date of enactment; except that
such term does not include any agency that owns or oper-
ates less than 1250 public housing dwelling units and that
the Secretary determines can, with a reasonable amount of
215
effort, make such improvements or remedies as may be nec-
essary to remove its designation as troubled within 12
months.
SEC. 440. 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 first
year beginning after the date of the enactment of this Act
for the State or unit of general local government in which
any troubled public housing agency is located shall not be
considered to comply with the requirements under section
105 of the Cranston-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 date of the enactment of this Act,
is designated under section 6(j)(2) of the United
States Housing Act of 1937 (as in effect immediately
before the enactment of this Act) as a troubled public
housing agency; and
216
(2) is not a chronically troubled public housing
agency, as such term is defined in section 438(b) of
this Act.
SEC. 441. MAINTENANCE OF AND ACCESS TO RECORDS.
(a) KEEPING OF RECORDS.—Each local housing and
management authority shall keep such records as may be
reasonably necessary to disclose the amount and the disposi-
tion by the authority of the proceeds of assistance received
pursuant to this Act and to ensure compliance with the re-
quirements of this Act.
(b) ACCESS TO DOCUMENTS.—The Secretary, the In-
spector General for the Department of Housing and Urban
Development, and the Comptroller General of the United
States shall each have access for the purpose of audit and
examination to any books, documents, papers, and records
of a local housing and management authority that are per-
tinent to this Act and assistance received pursuant to this
Act.
SEC. 
442. 
ANNUAL 
REPORTS 
REGARDING 
TROUBLED
LHMA’S.
The Secretary shall submit a report to the Congress
annually, as a part of the report of the Secretary under
section 8 of the Department of Housing and Urban Develop-
ment Act, that—
217
(1) identifies the local housing and management
authorities that are designated as troubled or dysfunc-
tional under section 431(a)(2) and the reasons for
such designation;
(2) identifies the local housing and management
authorities that have lost accreditation pursuant to
section 432; and
(3) describes any actions that have been taken in
accordance with sections 433, 434, 435, and 436.
SEC. 443. APPLICABILITY TO RESIDENT MANAGEMENT COR-
PORATIONS.
The Secretary shall apply the provisions of this sub-
title to resident management corporations in the same man-
ner as applied to local housing and management authori-
ties.
SEC. 444. INAPPLICABILITY TO INDIAN HOUSING.
The provisions of sections 431, 432, 433, 434, 435, 436,
438, and 442 shall not apply to public housing developed
or operated pursuant to a contract between the Secretary
and an Indian housing authority.
TITLE V—REPEALS AND
CONFORMING AMENDMENTS
SEC. 501. REPEALS.
(a) IN GENERAL.—The following provisions of law are
hereby repealed:
218
(1) UNITED STATES HOUSING ACT OF 1937.—The
United States Housing Act of 1937 (42 U.S.C. 1437
et seq.).
(2) ASSISTED
HOUSING
ALLOCATION.—Section
213 of the Housing and Community Development Act
of 1974 (42 U.S.C. 1439).
(3) PUBLIC HOUSING RENT WAIVERS FOR PO-
LICE.—Section 519 of the Cranston-Gonzalez Na-
tional Affordable Housing Act (42 U.S.C. 1437a–1).
(4) OCCUPANCY PREFERENCES AND INCOME MIX
FOR NEW CONSTRUCTION AND SUBSTANTIAL REHA-
BILITATION PROJECTS.—Subsection (c) of section 545,
and section 555, of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 1437f note).
(5) TREATMENT OF CERTIFICATE AND VOUCHER
HOLDERS.—Subsection (c) of section 183 of the Hous-
ing and Community Development Act of 1987 (42
U.S.C. 1437f note).
(6) RETROACTIVE
PAYMENT
FOR
ANNUAL
AD-
JUSTMENT FACTORS.—Section 801 of the Department
of Housing and Urban Development Reform Act of
1989 (42 U.S.C. 1437f note).
(7) EXCESSIVE RENT BURDEN DATA.—Subsection
(b) of section 550 of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 1437f note).
219
(8) SECTION 8 DISASTER RELIEF.—Sections 931
and 932 of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 1437c note).
(9) MOVING TO OPPORTUNITY FOR FAIR HOUS-
ING.—Section 152 of the Housing and Community
Development Act of 1992 (42 U.S.C. 1437f note).
(10) REPORT REGARDING FAIR HOUSING OBJEC-
TIVES.—Section 153 of the Housing and Community
Development Act of 1992 (42 U.S.C. 1437f note).
(11) SECTION 8 COMMUNITY INVESTMENT DEM-
ONSTRATION.—Section 6 of the HUD Demonstration
Act of 1993 (42 U.S.C. 1437f note).
(12) SPECIAL
PROJECTS
FOR
ELDERLY
OR
HANDICAPPED FAMILIES.—Section 209 of the Housing
and Community Development Act of 1974 (42 U.S.C.
1438).
(13) ACCESS TO PHA BOOKS.—Section 816 of the
Housing Act of 1954 (42 U.S.C. 1435).
(14) MISCELLANEOUS PROVISIONS.—Subsections
(b)(1), (c), and (d) of section 326 of the Housing and
Community Development Amendments of 1981 (Pub-
lic Law 97–35, 95 Stat. 406; 42 U.S.C. 1437f note).
(15) PAYMENT FOR DEVELOPMENT MANAGERS.—
Section 329A of the Housing and Community Devel-
opment Amendments of 1981 (42 U.S.C. 1437j–1).
220
(16) PURCHASE OF PHA OBLIGATIONS.—Section
329E of the Housing and Community Development
Amendments of 1981 (12 U.S.C. 2294a).
(17) PROCUREMENT OF INSURANCE BY PHA’S.—
(A) In the item relating to ‘‘ADMINISTRA-
TIVE PROVISIONS’’ under the heading ‘‘MANAGE-
MENT AND ADMINISTRATION’’ in title II of the
Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agen-
cies Appropriations Act, 1991, the penultimate
undesignated paragraph of such item (Public
Law 101–507; 104 Stat. 1369).
(B) In the item relating to ‘‘ADMINISTRA-
TIVE PROVISIONS’’ under the heading ‘‘MANAGE-
MENT AND ADMINISTRATION’’ in title II of the
Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agen-
cies Appropriations Act, 1992, the 19th through
23d undesignated paragraphs of such item (Pub-
lic Law 102–139; 105 Stat. 758).
(18) PUBLIC
HOUSING
CHILDHOOD
DEVELOP-
MENT.—Section 222 of the Housing and Urban-Rural
Recovery Act of 1983 (12 U.S.C. 1701z–6 note).
(19) INDIAN
HOUSING
CHILDHOOD
DEVELOP-
MENT.—Section 518 of the Cranston-Gonzalez Na-