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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 agen-
cy. A resident council shall be an organization or associa-
tion that—
(1) is nonprofit in character;
(2) is representative of the residents of the eligi-
ble housing;
(3) adopts written procedures providing for the
election of officers on a regular basis; and
(4) has a democratically elected governing board,
which is elected by the residents of the eligible housing
on a regular basis.
(b) RESIDENT MANAGEMENT CORPORATIONS.—
(1) ESTABLISHMENT.—The residents of a public
housing development may establish a resident man-
agement corporation for the purpose of assuming the
responsibility for the management of the development
under section 235 or purchasing a development.
(2) REQUIREMENTS.—A resident management
corporation shall be a corporation that—
(A) is nonprofit in character;
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(B) is organized under the laws of the State
in which the development is located;
(C) has as its sole voting members the resi-
dents 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.
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 man-
agement rights and responsibilities of the corporation and
the public housing agency. The contract shall be consistent
with the requirements of this Act applicable to public hous-
ing development and may include specific terms governing
management personnel and compensation, access to public
housing records, submission of and adherence to budgets,
rent collection procedures, resident income verification,
resident eligibility determinations, resident eviction, the ac-
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quisition 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 develop-
ment, the resident management corporation shall provide
fidelity bonding and insurance, or equivalent protection.
Such bonding and insurance, or its equivalent, shall be ade-
quate to protect the Secretary and the public housing agen-
cy against loss, theft, embezzlement, or fraudulent acts on
the part of the resident management corporation or its em-
ployees.
(d) BLOCK GRANT ASSISTANCE AND INCOME.—A con-
tract 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 activi-
ties with respect to the development as may be pro-
vided under the contract;
(2) the amount of income expected to be derived
from the development itself (from sources such as
rents and charges);
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(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 manage-
ment corporation of a public housing development
that exceeds the income estimated under the contract
shall be used for eligible activities under section
203(a).
(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 corporation
may not be reduced during the 3-year period begin-
ning on the date on which the resident management
corporation is first established for the development.
(2) REDUCTIONS AND INCREASES IN SUPPORT.—
If the total income of a public housing agency is re-
duced or increased, the income provided by the public
housing agency to a public housing development man-
aged by a resident management corporation 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
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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 cor-
poration.
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 pub-
lic housing agency that is designated as a troubled
agency under section 533(a); and
(2) the Secretary determines that—
(A) such housing has deferred maintenance,
physical deterioration, or obsolescence of major
systems and other deficiencies in the physical
plant of the project;
(B) such housing is occupied predominantly
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
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on public assistance and minimal educational
achievement;
(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 remedied
by an entity that has a demonstrated capacity to
manage, with reasonable expenses for moderniza-
tion.
Such a transfer may be made only as provided in this sec-
tion, pursuant to the approval by the Secretary of a request
for the transfer made by a majority vote of the residents
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 reasonable amounts
for operating costs for the housing. The amount made avail-
able under this subsection to a manager shall be determined
by the Secretary based on the share for the specified housing