I
104TH CONGRESS
1ST SESSION
H. R. 2406
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
SEPTEMBER 27, 1995
Mr. LAZIO of New York (for himself, Mr. LEACH, Mr. MCCOLLUM, Mr.
BAKER of Louisiana, Mr. CASTLE, Mr. WELLER, Mr. BONO, Mr. EHR-
LICH, Mr. CREMEANS, Mr. FOX of Pennsylvania, Mr. HEINEMAN, and
Mrs. KELLY) 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
‘‘United States Housing Act of 1995’’.
(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 local housing and management authorities.
Sec. 104. Determination of adjusted income.
Sec. 105. Limitation on admission of drug or alcohol abusers to assisted hous-
ing.
Sec. 106. Community work and family self-sufficiency requirement.
Sec. 107. Community improvement plans.
Sec. 108. Review of plans.
Sec. 109. Headquarters reserve fund.
Sec. 110. Labor standards.
Sec. 111. Nondiscrimination.
Sec. 112. Effective date and regulations.
TITLE II—PUBLIC HOUSING
Subtitle A—Block Grants
Sec. 201. Block grant contracts.
Sec. 202. Block grant authority and amount.
Sec. 203. Eligible and required activities.
Sec. 204. Determination of block 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 income eligibility.
Sec. 223. Preferences for occupancy.
Sec. 224. Admission procedures.
Sec. 225. Family rental payment.
Sec. 226. Lease requirements.
Sec. 227. Designated housing for elderly and disabled families.
Subtitle C—Management
Sec. 231. Management procedures.
Sec. 232. Administrative grievance procedure.
Sec. 233. Housing quality requirements.
Sec. 234. Employment of residents.
Sec. 235. Resident councils and resident management corporations.
Sec. 236. Management by resident management corporation.
Sec. 237. Transfer of management of certain housing to independent manager
at request of residents.
Subtitle D—Homeownership
Sec. 251. Resident homeownership programs.
Subtitle E—Disposition and Demolition of Developments
Sec. 261. Requirements for demolition and disposition of developments.
Subtitle F—General Provisions
Sec. 271. Conversion to block grant assistance.
Sec. 272. Payment of non-Federal share.
Sec. 273. Definitions.
Sec. 274. Authorization of appropriations.
TITLE III—CHOICE-BASED RENTAL HOUSING AND
HOMEOWNERSHIP ASSISTANCE FOR LOW-INCOME FAMILIES
Subtitle A—Grants and Allocation
Sec. 301. Authority to provide housing assistance grants.
Sec. 302. Grant agreements.
Sec. 303. Allocation of amounts.
Sec. 304. Administrative fees.
Sec. 305. Authorizations of appropriations.
Sec. 306. 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. Administrative grievance procedure.
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.
Sec. 356. Prohibition of portability.
Subtitle D—General and Miscellaneous Provisions
Sec. 371. Definitions.
Sec. 372. Rental assistance fraud recoveries.
Subtitle E—Provisions Relating to Discontinued HUD-Administered Programs
for Project-Based Assistance
Sec. 381. Prohibition of discrimination in subsidized projects.
TITLE IV—ACCREDITATION AND OVERSIGHT OF LOCAL HOUSING
AND MANAGEMENT AUTHORITIES
Subtitle A—Housing Foundation and Accreditation Board
Sec. 401. Establishment.
Sec. 402. Membership.
Sec. 403. Functions.
Sec. 404. Initial establishment of standards and procedures for LHMA compli-
ance.
Sec. 405. Powers.
Sec. 406. Fees.
Sec. 407. Reports.
Subtitle B—Accreditation and Oversight Standards and Procedures
Sec. 431. Establishment of performance benchmarks and accreditation proce-
dures.
Sec. 432. Annual financial and performance audit.
Sec. 433. Annual classification by performance category.
Sec. 434. Accreditation.
Sec. 435. Performance agreements for troubled authorities.
Sec. 436. Option to demand conveyance of title to or possession of public hous-
ing.
Sec. 437. Removal of ineffective LHMA’s.
Sec. 438. Mandatory takeover of chronically troubled PHA’s.
Sec. 439. Treatment of troubled PHA’s.
Sec. 438. Maintenance of and access to records.
Sec. 440. Annual reports regarding troubled LHMA’s.
Sec. 442. Applicability to resident management corporations.
Sec. 443. Inapplicability to Indian housing.
TITLE V—REPEALS AND CONFORMING AMENDMENTS
Sec. 501. Repeals.
Sec. 502. Conforming provisions.
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 or involvement provide for the housing
of every American citizen, or even a majority of its
citizens, but it is the responsibility of the Govern-
ment to promote and protect the independent and
collective actions of private citizens to develop hous-
ing and strengthen their own neighborhoods;
(3) the Federal Government should act only
where there is a serious need that private citizens or
groups cannot or are not addressing responsibly; and
(4) merely providing physical structures to
house low-income families will not pull generations
up from poverty, but housing is a fundamental com-
ponent of bringing true opportunity to people and
communities in need.
TITLE I—GENERAL PROVISIONS
SEC. 101. STATEMENT OF PURPOSE.
The purpose of this Act is to promote housing oppor-
tunities that are affordable to low-income families by—
(1) deregulating and decontrolling public hous-
ing agencies, which in this Act are referred to as
‘‘local housing and management authorities’’, and
thereby enable them to perform as property and
asset managers;
(2) providing for more flexible use of Federal
assistance to local housing and management authori-
ties, allowing the authorities to leverage and combine
assistance amounts with amounts obtained from
other sources;
(3) facilitating mixed income communities;
(4) increasing accountability and rewarding ef-
fective management of local housing and manage-
ment authorities;
(5) creating incentives for residents of dwelling
units assisted by local housing and management au-
thorities to work; and
(6) recreating the existing rental assistance
voucher program so that the use of vouchers and re-
lationships between landlords and tenants under the
program operate in a manner that more closely re-
sembles the private housing market.
SEC. 102. DEFINITIONS.
For purposes of this Act, the following definitions
shall apply:
(1) COMMUNITY
IMPROVEMENT
PLAN.—The
term ‘‘community improvement plan’’ means, with
respect to any fiscal year, the plan under section
107 of a local housing and management authority
for such fiscal year.
(2) DISABLED
FAMILY.—The term ‘‘disabled
family’’ means a family whose head (or his or her
spouse), or whose sole member, is a person with dis-
abilities. Such term includes 2 or more persons with
disabilities living together, and 1 or more such per-
sons living with 1 or more persons determined under
the regulations of the Secretary to be essential to
their care or well-being.
(3) DRUG-RELATED CRIMINAL ACTIVITY.—The
term ‘‘drug-related criminal activity’’ means the ille-
gal manufacture, sale, distribution, use, or posses-
sion with intent to manufacture, sell, distribute, or
use, of a controlled substance (as such term is de-
fined in section 102 of the Controlled Substances
Act).
(4) ELDERLY
FAMILIES
AND
NEAR
ELDERLY
FAMILIES.—The terms ‘‘elderly family’’ and ‘‘near-
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.
(5) ELDERLY PERSON.—The term ‘‘elderly per-
son’’ means a person who is at least 62 years of age.
(6) 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.
(7) LOCAL
HOUSING
AND
MANAGEMENT
AU-
THORITY.—The term ‘‘local housing and manage-
ment authority’’ is defined in section 103.
(8) 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 local
housing and management authority and the Sec-
retary, 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.
(9) INDIAN.—The term ‘‘Indian’’ means any
person recognized as being an Indian, Alaska Na-
tive, or Native Hawaiian by an Indian tribe, the
Federal Government, or any State.
(10) INDIAN AREA.—The term ‘‘Indian area’’
means the area within which an Indian housing au-
thority is authorized to provide low-income housing
assistance under this Act.
(11) INDIAN HOUSING AUTHORITY.—The term
‘‘Indian housing authority’’ means any entity that—
(A) is authorized to engage in or assist in
the production or operation of low-income hous-
ing for Indians that is assisted under this Act;
and
(B) is established—
(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).
(18) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Housing and Urban Develop-
ment.
(19) 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, any other ter-
ritory or possession of the United States, and Indian
tribes.
(20) 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, except that a local
housing and management authority 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 authority’s findings that
such variations are necessary because of unusually
high or low family incomes.
SEC. 103. ORGANIZATION OF LOCAL HOUSING AND MAN-
AGEMENT AUTHORITIES.
(a) REQUIREMENTS.—For purposes of this Act, the
terms ‘‘local housing and management authority’’ and
‘‘authority’’ mean any entity that—
(1) is—
(A) a public housing agency or Indian
housing authority that was authorized under
the United States Housing Act of 1937 to en-
gage in or assist in the development or oper-
ation 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; or
(C) an entity selected by the Secretary,
pursuant to subtitle B of title IV, to manage
housing; and
(2) complies with the requirements under sub-
section (b).
(b) GOVERNANCE.—
(1) BOARD OF DIRECTORS.—Each local housing
and management authority shall have a board of di-
rectors 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 per-
son’s residency in a public housing project.
(2) RESIDENT MEMBERSHIP.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), in localities in which a local
housing and management authority is governed
by a board of directors or other similar body,
the board or body shall include not less than 1
member who—
(i) is (I) a resident of a public hous-
ing dwelling unit owned or operated by the
authority, or (II) a member of an assisted
family under title III; and
(ii) is elected by residents of such
public housing dwelling units and assisted
families.
(B) EXCEPTIONS.—The requirement in
subparagraph (A) with respect to a resident
member shall not apply to—
(i) any State or local governing body
that serves as a local housing and manage-
ment authority for purposes of this Act
and whose responsibilities include substan-
tial activities other than acting as the local
housing and management authority, 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 local hous-
ing and management authority for pur-
poses of this Act;
(ii) any local housing and manage-
ment authority that owns or operates less
than 250 public housing dwelling units (in-
cluding any authority that does not own or
operate public housing); or
(iii) any local housing and manage-
ment authority that manages public hous-
ing consisting primarily of scattered site
public housing.
(3) FULL
PARTICIPATION.—No local housing
and management authority 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 be-
cause of the member’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 local housing and man-
agement authority.
(5) DEFINITION.—For purposes of this sub-
section, the term ‘‘resident member’’ means a mem-
ber of the board of directors or other similar govern-
ing body of a local housing and management author-
ity who is a resident of a public housing dwelling
unit administered or assisted by the authority or is
an assisted family (as such term is defined in section
371).
(c) ESTABLISHMENT OF POLICIES.—Any rules, regu-
lations, policies, standards, and procedures necessary to
implement policies required under section 107 to be in-
cluded in the community improvement plan for a local
housing and management authority shall be approved by
the board of directors or similar governing body of the
authority and shall be publicly available for review upon
request.
SEC. 104. DETERMINATION OF ADJUSTED INCOME.
(a) IN GENERAL.—For purposes of this Act, the term
‘‘adjusted income’’ means, with respect to a family, the
difference between the income of the members of the fam-
ily 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 local
housing and management authority.
(b) MANDATORY EXCLUSIONS FROM INCOME.—In
determining adjusted income, a local housing and manage-
ment authority shall exclude from the annual income of
a family the following 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-
ceed by the sum of—
(A) unreimbursed medical expenses of the
family; and
(B) 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.
(c) PERMISSIVE EXCLUSIONS FROM INCOME.—In de-
termining adjusted income, a local housing and manage-
ment authority may, in the discretion of the authority, es-
tablish exclusions from the annual income of a family.
Such exclusions may include the following amounts:
(1) MINORS.—$480 for each member of the
family residing in the household (other than the
head of the household or his spouse) who is under
18 years or age, or who is 18 years of age or older
and is disabled, handicapped, or a full-time student.
(2) EXCESSIVE TRAVEL EXPENSES.—Excessive
travel expenses in an amount not to exceed $25 per
family per week, for employment- or education-relat-
ed travel.
(3) EARNED
INCOME.—An amount of any
earned income of the family, established at the dis-
cretion of the local housing and management author-
ity, 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.
(4) OTHERS.—Such other amounts for other
purposes, as the local housing and management au-
thority may establish.
SEC. 105. LIMITATION ON ADMISSION OF DRUG OR ALCO-
HOL ABUSERS TO ASSISTED HOUSING.
Notwithstanding any other provision of law, a local
housing and management authority may establish stand-
ards for occupancy in public housing dwelling units and
assistance under title III, that prohibit admission to such
units and assistance under title III by any person whose
current illegal use or history of illegal use of a controlled
substance or whose use of alcohol provides reasonable
cause for the authority to believe that the occupancy by
such person may interfere with the health, safety, or right
to peaceful enjoyment of the premises by other residents.
SEC. 106. COMMUNITY WORK AND FAMILY SELF-SUFFI-
CIENCY REQUIREMENT.
(a) REQUIREMENT.—Each local housing and man-
agement authority shall require, as a condition of occu-
pancy of a public housing dwelling unit by a family and
of providing housing assistance under title III on behalf
of a family, that each adult member of the family shall—
(1) contribute not less than 8 hours of work per
month within the community in which the family re-
sides; or
(2) participate on an ongoing basis in a pro-
gram designed to promote economic self-sufficiency.
(b) EXEMPTIONS.—A local housing and management
authority may provide for the exemption, from the applica-
bility of the requirement under subsection (a), of each in-
dividual who is—
(1) an elderly person;
(2) a person with disabilities and unable, as de-
termined in accordance with guidelines established
by the Secretary, to comply with the requirement; or
(3) working, attending school or vocational
training, or otherwise complying with work require-
ments applicable under other public assistance pro-
grams.
SEC. 107. COMMUNITY IMPROVEMENT PLANS.
(a) IN GENERAL.—In accordance with this section,
the Secretary shall provide for each local housing and
management authority to submit to the Secretary a com-
munity improvement plan under this section for each fiscal
year that describes the mission of the local housing and
management authority and the goals, objectives, and poli-
cies of the authority to meet the housing needs of low-
income families in the jurisdiction of the authority.
(b) PROCEDURES.—The Secretary shall establish re-
quirements and procedures for submission and review of
plans and for the contents of such plans. Such procedures
shall provide for local housing and management authori-
ties to, at the option of the authority, submit plans under
this section together with, or as part of, the comprehensive
housing affordability strategy under section 105 of the
Cranston-Gonzalez National Affordable Housing Act for
the relevant jurisdiction and for concomitant review of
such plans.
(c) CONTENTS.—A community improvement plan
under this section for a local housing and management
authority shall contain the following information relating
to the upcoming fiscal year for which the assistance under
this Act is to be made available:
(1) FINANCIAL
RESOURCES.—An operating
budget for the authority that includes—
(A) a description of the financial resources
available to the authority;
(B) the uses to which such resources will
be committed, including eligible and required
activities under section 203 to be assisted,
housing assistance to be provided under title
III, and administrative, management, mainte-
nance, capital improvement activities to be car-
ried out; and
(C) an estimate of the market value of
each public housing development of the author-
ity.
(2) POPULATION SERVED.—A statement of the
policies of the authority 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 by which
eligibility will be determined and verified;
(B) the requirements for selection and ad-
missions of eligible families for such units and
assistance, including any preferences estab-
lished under section 223 or 321(c) and the cri-
teria for selection under section 222(b);
(C) the procedures for assignment of fami-
lies admitted to dwelling units owned, operated,
or assisted by the authority;
(D) any standards and requirements for
occupancy of public housing dwelling units and
units assisted under title III, including condi-
tions for continued occupancy, termination of
tenancy, and eviction;
(E) the criteria under subsections (d) and
(f) of section 321 for providing and denying
housing assistance under title III to families
moving into the jurisdiction of the authority;
and
(F) the fair housing policy of the author-
ity.
(3) RENT
DETERMINATION.—A statement of
the policies of the authority governing rents charged
for public housing dwelling units and rental con-
tributions of assisted families under title III, includ-
ing—
(A) the methods by which such rents are
determined under section 225 and such con-
tributions are determined under section 322;
(B) an analysis of how such methods af-
fect—
(i) the ability of the authority to pro-
vide housing assistance for families having
a broad range of incomes;
(ii) the affordability of housing for
families having incomes that do not exceed
30 percent of the median family income for
the area; and
(iii) the availability of other financial
resources to the authority.
(4) QUALITY
STANDARDS
FOR
MAINTENANCE
AND MANAGEMENT.—A statement of the standards
and policies of the authority governing maintenance
and management of housing owned, operated, or as-
sisted by the authority, and management of the local
housing and management authority, including—
(A) housing quality standards in effect
pursuant to sections 233 and 328 and any cer-
tifications required under such sections;
(B) routine and preventative maintenance
policies;
(C) emergency and disaster plans;
(D) rent collection and security policies for
public housing;
(E) priorities and improvements for man-
agement of public housing; and
(F) priorities and improvements for man-
agement of the authority, including improve-
ment of electronic information systems to facili-
tate managerial capacity and efficiency.
(5) GRIEVANCE PROCEDURE.—A statement of
the grievance procedures of the authority under sec-
tions 232 and 330.
(6) CAPITAL IMPROVEMENTS.—With respect to
public housing developments owned or operated by
the authority, a plan describing—
(A) the capital improvements necessary to
ensure long-term physical and social viability of
the developments; and
(B) the priorities of the authority for cap-
ital improvements based on analysis of available
financial resources, consultation with residents,
and health and safety considerations.
(7) DEMOLITION AND DISPOSITION.—With re-
spect to public housing developments owned or oper-
ated by the authority—
(A) a description of any such housing to be
demolished or disposed of under subtitle E of
title II;
(B) a timetable for such demolition or dis-
position; and
(C) any information required under section
261(h) with respect to such demolition or dis-
position.
(8) DESIGNATION OF HOUSING FOR ELDERLY
AND DISABLED FAMILIES.—With respect to public
housing developments owned or operated by the au-
thority, a description of any developments (or por-
tions thereof) that the authority has designated or
will designate for occupancy by elderly and disabled
families in accordance with section 227 and any in-
formation required under section 227(d) for such
designated developments.
(9) CONVERSION OF PUBLIC HOUSING.—With
respect to public housing owned or operated by the
authority, a description of any building or buildings
that the authority is required under section 203(b)
to convert to housing assistance under title III, an
analysis of such buildings showing that the buildings
meet the requirements under such section for such
conversion, and a statement of the amount of grant
amounts under title II to be used for rental assist-
ance under title III.
(10) HOMEOWNERSHIP ACTIVITIES.—A descrip-
tion of any homeownership programs of the author-
ity under subtitle D or section 329 for the authority
and the requirements and assistance available under
such programs.
(d) 10-YEAR PLAN.—Each community improvement
plan under this section for a local housing and manage-
ment authority shall contain, with respect to the 10-year
period beginning with the fiscal year for which the plan
is submitted, the following information:
(1) STATEMENT OF MISSION.—A statement of
the mission of the authority for serving the needs of
low-income families in the jurisdiction of authority
during such period.
(2) GOALS AND OBJECTIVES.—A statement of
the goals and objectives of the authority that will en-
able the authority to serve the needs identified pur-
suant to paragraph (1) during such period.
(3) CAPITAL IMPROVEMENT OVERVIEW.—If the
authority will provide capital improvements for pub-
lic housing developments during such period, an
overview of such improvements, the rationale for
such improvements, and an analysis of how such im-
provements will enable the authority to meet its
goals, objectives, and mission.
(e) CITIZEN PARTICIPATION.—
(1) IN
GENERAL.—Before submitting a plan
under this section or an amendment under section
108(f) to a plan, a local housing and management
authority shall make the plan or amendment publicly
available in a manner that affords affected public
housing residents and assisted families under title
III, citizens, public agencies, and other interested
parties an opportunity, for a period not shorter than
60 days and ending at a time that reasonably pro-
vides for compliance with the requirements of para-
graph (2), to examine its content and to submit
comments to the authority.
(2) CONSIDERATION
OF
COMMENTS.—A local
housing and management authority shall consider
any comments or views provided pursuant to para-
graph (1) in preparing a final plan or amendment
for submission to the Secretary. A summary of such
comments or views shall be attached to the plan,
amendment, or report submitted. The submitted
plan, amendment, or report shall be made publicly
available upon submission.
(f) PLANS
FOR SMALL LMHA’S.—The Secretary
shall establish requirements applicable to housing and
management authorities that own or operate less than 250
public housing dwelling units for submission of plans
under this section and the information to be included in
such plans that waive any requirements under this section
that the Secretary determines are burdensome or unneces-
sary for such agencies.
(g) REGULATIONS.—Notwithstanding sections 563(a)
and 565(a) of title 5, United States Code, any proposed
regulation relating to the required contents of plans under
this section shall be issued pursuant to a negotiated rule-
making procedure under subchapter of chapter 5 of such
title and the Secretary shall establish a negotiated rule-
making committee for development of any such proposed
regulations.
SEC. 108. REVIEW OF PLANS.
(a) REVIEW.—The Secretary shall conduct a limited
review of each community improvement plan submitted to
the Secretary to ensure that the plan is complete and com-
plies with the requirements of section 107. The Secretary
shall notify each local housing and management authority
submitting a plan whether the plan complies with such re-
quirements not later than 60 days after receiving the plan.
If the Secretary does not notify the local housing and
management authority, as required under this subsection
and subsection (b), the plan shall be considered, for pur-
poses of this section, to comply with the requirements
under section 107.
(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 107, 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 107.
(c) STANDARDS
FOR DETERMINATION
OF NON-
COMPLIANCE.—The Secretary may determine that a plan
does not comply with the requirements under section 107
only if—
(1) the plan is incomplete in significant matters
required under such section; or
(2) there is evidence available to the Secretary
that challenges, in a substantial manner, any infor-
mation provided in the plan.
(d) TREATMENT
OF EXISTING PLANS.—Notwith-
standing any other provision of this title, a local housing
and management authority shall be considered have sub-
mitted a plan under this section if the authority has sub-
mitted to the Secretary a comprehensive plan under sec-
tion 14(e) of the United States Housing Act of 1937 (as
in effect immediately before the enactment of this Act)
or under the comprehensive improvement assistance pro-
gram under such section 14, and the Secretary has ap-
proved such plan, before January 1, 1994. The Secretary
shall provide specific procedures and requirements for
such authorities to amend such plans by submitting only
such additional information as is necessary to comply with
the requirements of section 107.
(e) ACTIONS TO CHANGE PLAN.—A local housing
and management authority that has submitted a plan
under section 107 may change actions or policies described
in the plan before submission and review of the plan of
the authority for the next fiscal year only if—
(1) in the case of costly or nonroutine changes,
the authority submits to the Secretary an amend-
ment to the plan under subsection (f) which is re-
viewed in accordance with such subsection; or
(2) in the case of inexpensive or routine
changes, the authority describes such changes in
such community improvement plan for the next fis-
cal year.
(f) AMENDMENTS TO PLAN.—
(1) IN GENERAL.—During the annual or 10-
year period covered by the plan for a local housing
and management authority, the authority may sub-
mit 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 107 and notify each local
housing and management authority submitting the
amendment whether the plan, as amended, complies
with such requirements not later than 30 days after
receiving the amendment. If the Secretary deter-
mines that a plan, as amended, does not comply
with the requirements under section 107, such notice
shall indicate the reasons for the noncompliance and
any modifications necessary for the plan to meet the
requirements under section 107. If the Secretary
does not notify the local housing and management
authority as required under this paragraph, the
plan, as amended, shall be considered, for purposes
of this section, to comply with the requirements
under section 107.
(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 107
only if—
(A) the plan, as amended, would be subject
to a determination of noncompliance in accord-
ance with the provisions of subsection (c); or
(B) the Secretary determines that—
(i) the proposed amendment is plainly
inconsistent with the activities specified in
the plan; or
(ii) there is evidence that challenges,
in a substantial manner, any information
contained amendment.
(4) AMENDMENTS TO EXTEND TIME OF PER-
FORMANCE.—Notwithstanding any other provision of
this subsection, the Secretary may not determine
that any amendment to the plan of a local housing
and management authority that extends the time for
performance of activities assisted with amounts pro-
vided under this title fails to comply with the re-
quirements under section 107 if the Secretary has
not provided the amount of assistance set forth in
the plan or has not provided the assistance in a
timely manner.
SEC. 109. HEADQUARTERS RESERVE FUND.
(a) ANNUAL RESERVATION OF AMOUNTS.—Notwith-
standing any other provision of law, the Secretary may
retain not more than 3 percent of the amounts appro-
priated to carry out this Act for any fiscal year.
(b) USE OF AMOUNTS.—Any amounts that are re-
tained under subsection (a) shall be available for subse-
quent allocation to specific areas and communities, and
may only be used for—
(1) unforeseen housing needs resulting from
natural and other disasters;
(2) housing needs resulting from emergencies,
as certified by the Secretary, other than such disas-
ters;
(3) housing needs related to a court order or
settlement of litigation; and
(4) providing technical assistance, training, and
electronic information systems for local housing and
management authorities to improve management of
such authorities.
SEC. 110. LABOR STANDARDS.
(a) IN GENERAL.—Any contract for grants, sale, or
lease pursuant to this Act shall contain the following pro-
visions:
(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 architects, technical engi-
neers, draftsmen, and technicians employed in the
development, and all maintenance laborers and me-
chanics 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 development of the project 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, 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
LHMA.—Any
resident of a public housing development who is an
employee of the local housing and management au-
thority for the development and performs services in
connection with the operation or production of a
low-income housing project owned or managed by
such authority.
SEC. 111. 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 local housing
and management authority that receives grant amounts
under this Act shall use such amounts and carry out its
community improvement plan approved under section 108
in conformity with title VI of the Civil Rights Act of 1964,
the Fair Housing Act, section 504 of the Rehabilitation
Act of 1973, and the Age Discrimination Act of 1975, and
shall affirmatively further fair housing.
SEC. 112. EFFECTIVE DATE AND REGULATIONS.
(a) EFFECTIVE DATE.—The provisions of this Act
and the amendments made by this Act shall take effect
and shall apply on the date of the enactment of this Act,
unless such provisions or amendments specifically provide
for effectiveness or applicability on another date certain.
(b) REGULATIONS.—The Secretary may issue any
regulations necessary to carry out this Act.
(c) RULE OF CONSTRUCTION.—Any failure by the
Secretary to issue any regulations authorized under sub-
section (b) shall not affect the effectiveness of any provi-
sion of 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 local housing and management authorities
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 local housing and management authority for
each fiscal year covered by the contract; and
(2) the authority 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 community im-
provement plan for the authority that complies
with the requirements of section 107;
(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 authority shall be subject to ac-
tions authorized under subtitle B of title IV;
(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 local housing and management
authority 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 local housing and management au-
thority 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 authority determined under section 204.
Any rule of law contrary to this subsection shall be deemed
inapplicable.
(c) CONDITIONS ON RENEWAL.—Each block grant
contract under this section shall provide, as a condition
of renewal of the contract with the local housing and man-
agement authority, that the authority’s accreditation be
renewed by the Housing Foundation and Accreditation
Board pursuant to review under section 434 by such
Board.
SEC. 202. BLOCK GRANT AUTHORITY AND AMOUNT.
(a) AUTHORITY.—The Secretary shall make block
grants under this title to eligible local housing and man-
agement authorities in accordance with block grant con-
tracts under section 201.
(b) ELIGIBILITY.—A local housing and management
authority shall be an eligible local housing and manage-
ment authority 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 authority;
(2) the authority has submitted a community
improvement plan to the Secretary for such fiscal
year;
(3) the Secretary has reviewed the community
improvement plan under section 108 and has not no-
tified the authority that the plan fails to comply
with the requirements under section 107;
(4) the authority is accredited under section
434 by the Housing Foundation and Accreditation
Board;
(5) the authority is exempt from local taxes, as
provided under subsection (d), or receives a con-
tribution, as provided under such subsection;
(6) no member of the board of directors or
other governing body of the authority, or the execu-
tive director, has been convicted of a felony;
(7) the authority has entered into an agreement
providing for local cooperation in accordance with
section (e); and
(8) the authority has not been disqualified for
a grant pursuant to section 205(a) or subtitle B of
title IV.
(c) AMOUNT OF GRANTS.—The amount of the grant
under this title for a local housing and management au-
thority for a fiscal year shall be the amount of the alloca-
tion for the authority determined under section 204, ex-
cept as otherwise provided in this title and subtitle B of
title IV.
(d) PAYMENTS IN LIEU OF STATE AND LOCAL TAX-
ATION OF PUBLIC HOUSING DEVELOPMENTS.—
(1) EXEMPTION
FROM
TAXATION.—A local
housing and management authority may receive a
block grant under this title only if—
(A)(i) the developments of the authority
(exclusive 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 local housing and management au-
thority makes payments in lieu of taxes to such
taxing authority equal to 10 percent of the
sum, for units charged in the developments of
the authority, 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 (e)
for local cooperation with the local housing
and management authority or under a
waiver by the local governing body; or
(III) due to failure of a local public
body or bodies other than the local housing
and management authority to perform any
obligation under such agreement; or
(B) the authority complies with the re-
quirements under subparagraph (A) with re-
spect to public housing developments, but the
authority agrees that the low-income units in
any mixed-income developments (as such term
is defined in section 221(c)(2)) shall be subject
to any otherwise applicable real property taxes
imposed by the State, city, county or other po-
litical subdivision.
(2) EFFECT
OF
FAILURE
TO
EXEMPT
FROM
TAXATION.—Notwithstanding paragraph (1), a local
housing and management authority that does not
comply with the requirements under such paragraph
may receive a block grant under this title, but only
if the State, city, county, or other political subdivi-
sion in which the development is situated contrib-
utes, 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.
(e) 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 local housing and management authority un-
less the governing body of the locality involved has entered
into an agreement with the authority providing for the
local cooperation required by the Secretary pursuant to
this title.
(f) EXCEPTION.—Notwithstanding subsection (a),
the Secretary may make a grant under this title for a local
housing and management authority that is not an eligible
local housing and management authority but only for the
period necessary to secure, in accordance with this title,
an alternative local housing and management authority for
the public housing of the ineligible authority.
SEC. 203. ELIGIBLE AND REQUIRED ACTIVITIES.
(a) ELIGIBLE ACTIVITIES.—Except as provided in
subsection (b), amounts from a grant made under this title
may be used only for the following activities and costs:
(1) PRODUCTION.—Production of public hous-
ing developments and any production costs.
(2) OPERATION.—Operation of public housing
developments in a manner appropriate to ensure the
viability of the developments as low-income housing,
which shall include providing adequate operating
services and reserve funds.
(3) MODERNIZATION.—Improvement of the
physical condition of existing public housing develop-
ments (including routine and timely improvements,
rehabilitation, and replacement of systems, and
major rehabilitation, redesign, reconstruction, and
redevelopment) and upgrading the management and
operation of such developments, to ensure that such
developments continue to be available for use as low-
income housing.
(4) RESIDENT PROGRAMS.—Provision of social,
educational, employment, self-sufficiency, and other
services to the residents of public housing develop-
ments, including providing the non-Federal share re-
quired in connection with activities undertaken
under Federal grant-in-aid programs.
(5) HOMEOWNERSHIP
ACTIVITIES.—Activities
in connection with a homeownership 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 coun-
cils to obtain training, technical assistance, and edu-
cational assistance to promote homeownership op-
portunities.
(6) RESIDENT MANAGEMENT ACTIVITIES.—Ac-
tivities in connection with establishing, organizing,
training, and assisting resident councils and resident
management corporations for public housing devel-
opments.
(7) DEMOLITION
AND
DISPOSITION
ACTIVI-
TIES.—Activities in connection with the disposition
or demolition of public housing under section 261.
(8) PAYMENTS IN LIEU OF TAXES.—Payments
in accordance with the requirement under section
202(d)(1).
(9) EMERGENCY CORRECTIONS.—Correction of
conditions that constitute an immediate threat to the
health or safety of residents of public housing devel-
opments, without regard to whether the need for
such correction is indicated in the community im-
provement plan of the authority.
(10) PREPARATION OF COMMUNITY IMPROVE-
MENT PLANS.—Preparation of community improve-
ment plans (including reasonable costs that may be
necessary to assist residents in participating in the
planning process in a meaningful way) and conduct-
ing annual financial and performance audits under
section 432.
(11) LHMA LIABILITY INSURANCE.—Purchase
of insurance covering the potential personal injury li-
ability exposure of local housing and management
authorities (and their contractors), except that—
(A) any such insurance so purchased shall
be competitively selected;
(B) any coverage provided under such poli-
cies, as certified by the authority, shall provide
reasonable coverage for the risk of liability ex-
posure, taking into consideration the potential
liability concerns inherent in the testing and
abatement of lead-based paint, and the manage-
rial and quality assurance responsibilities asso-
ciated with the conduct of such activities; and
(C) notwithstanding any other provision of
State or Federal law, regulation or other re-
quirement, any line of insurance from a non-
profit insurance entity, owned and controlled by
local housing and management authorities and
approved by the Secretary, may be purchased
without regard to competitive procurement.
(12) PAYMENT
OF
OUTSTANDING
DEVELOP-
MENT
BONDS
AND
NOTES
ISSUED
UNDER
1937
ACT.—Payment of principal and interest payable on
obligations issued pursuant to the section 5 of the
United States Housing Act of 1937 (as in effect be-
fore the date of the enactment of this Act) by a local
housing and management authority to finance the
production of public housing.
(13) MUTUAL HELP HOMEOWNERSHIP OPPOR-
TUNITY PROGRAMS FOR INDIAN HOUSING AUTHORI-
TIES.—In the case of an Indian housing authority,
production, operation, and modernization of develop-
ments under a mutual help homeownership program
subject to the requirements under section 202 of the
United States Housing Act of 1937 (as in effect im-
mediately before the enactment of this Act), except
that any reference in such section to assistance
under such section or such Act shall be construed to
refer to assistance under this title and subsection (b)
of such section shall not apply.
(b) REQUIRED CONVERSION
OF ASSISTANCE
FOR
PUBLIC HOUSING TO RENTAL HOUSING ASSISTANCE.—
(1) REQUIREMENT.—A local housing and man-
agement authority that receives grant amounts
under this title shall use such amounts, to the extent
necessary and described in the community improve-
ment plan for the authority, to provide rental hous-
ing assistance under title III in lieu of assisting the
operation and modernization of any building or
buildings of public housing that meet the require-
ments under paragraph (2).
(2) PUBLIC
HOUSING
SUBJECT
TO
CONVER-
SION.—Assistance for a building of public housing
shall be converted pursuant to paragraph (1) only
if—
(A) the building is distressed or substan-
tially vacant;
(B) the estimated cost of continued oper-
ation and modernization of the building exceeds
the cost of providing choice-based rental assist-
ance under title III; and
(C) there is a sufficient supply of available
and affordable housing to make the use of such
section (a) in accordance with the plan. This subsection
may not be construed to preclude changes or amendments
to the plan, as authorized under section 108(e) or any ac-
tions authorized by this Act to be taken without regard
to a community improvement plan.
SEC. 204. DETERMINATION OF BLOCK GRANT ALLOCATION.
(a) IN GENERAL.—For each fiscal year, after reserv-
ing amounts under section 109 from the aggregate
amount made available for the fiscal year for carrying out
this title, the Secretary shall allocate any remaining
amounts among eligible local housing and management
authorities in accordance with this section, so that the
sum of all of the allocations 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 local
housing and management authority, which shall be—
(1) for any fiscal year beginning after the en-
actment of a law containing a formula described in
subsection (c), the amount determined under 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 authority; and
(B) the capital improvement allocation de-
termined under subsection (d)(2) for the au-
thority.
(c) PERMANENT ALLOCATION FORMULA.—
(1) FORMULA.—A formula under this sub-
section shall provide for allocating amounts available
for a fiscal year for block grants under this title for
each local housing and management authority. The
formula shall consider factors that reflect the dif-
ferent characteristics and sizes of local housing and
management authorities, the relative needs, costs,
and capital improvements of authorities, and the rel-
ative costs to authorities of operating a well-man-
aged authority that meets the performance targets
for the authority established in the community im-
provement plan for the authority.
(2) DEVELOPMENT UNDER NEGOTIATED RULE-
MAKING PROCEDURE.—The formula 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
formula shall not be contained in a regulation.
(3) REPORT.—Not later than the expiration of
the 18-month period beginning upon the enactment
of this Act, the Secretary shall submit a report to
the Congress containing the proposed formula estab-
lished pursuant to paragraph (2) that meets the re-
quirements 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 local housing and
management authorities.
(B) DETERMINATION.—The operating allo-
cation under this subsection for a local housing
and management authority for a fiscal year
shall be an amount determined by applying, to
the amount to be allocated under this para-
graph, the formula used for determining the
distribution of operating subsidies for fiscal
year 1995 to public housing agencies (as modi-
fied under subparagraph (C)) under section 9
of this Act, as in effect before the enactment of
this Act.
(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 attributable
to any dwelling unit of a local housing and
management authority 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.
(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 local
housing and management authorities.
(B) DETERMINATION.—The capital im-
provement allocation under this subsection for
an eligible local housing and management au-
thority for a fiscal year shall be determined by
applying, to the amount to be allocated under
this paragraph, the formula used for determin-
ing the distribution of modernization assistance
for fiscal year 1995 to public housing agencies
under section 14 of this Act, as in effect before
the enactment of this Act, except that Secretary
shall establish a method for taking into consid-
eration allocation of amounts under the com-
prehensive improvement assistance program.
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 annual financial and performance audit under sec-
tion 432 that a local housing and management authority
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
authority;
(2) withhold from the authority amounts from
the total allocation for the authority pursuant to sec-
tion 204;
(3) reduce the amount of future grant pay-
ments under this title to the authority 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 authority under this title to programs,
projects, or activities not affected by such failure to
comply;
(5) withhold from the authority amounts allo-
cated for the authority under title III; or
(6) order other corrective action with respect to
the authority.
(b) TERMINATION OF COMPLIANCE ACTION.—If the
Secretary takes action under subsection (a) with respect
to a local housing and management authority, the Sec-
retary shall—
(1) in the case of action under subsection
(a)(1), resume payments of grant amounts under
this title to the authority in the full amount of the
total allocation under section 204 for the authority
at time that the Secretary first determines that the
authority 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 authority complies with the provi-
sions 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 authority will
comply 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.
(c) 
CAPITAL
IMPROVEMENTS
ASSISTANCE.—
Amounts may be used for eligible activities under section
203(a)(3) 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 local housing and manage-
ment authorities;
(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)(3) 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 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
that are made available (by master contract or
individual lease) for occupancy, for a period of
not less than 15 years, only by very low-income
families identified by the local housing and
management authority, which number is not
less than—
(i) the number that bears the same
ratio to the total number of units in the
development as the value of the financial
assistance provided to the development
with grant amounts under this title bears
to the value of the total equity investment
in the development, as determined by the
local housing and management authority;
or
(ii) the number of public housing
dwelling units that could have been devel-
oped by the authority with the amount of
such assistance provided; and
(C) is owned by—
(i) the local housing and management
authority or an affiliate controlled by it;
(ii) a partnership, limited liability
company, or other legal entity in which the
local housing and management authority
(or an entity controlled by such authority)
is a general or limited partner or a general
or limited managing member, or otherwise
has a significant participation in directing
the activities of such entity; or
(iii) an entity that grants to the local
housing and management authority an op-
tion to purchase the housing development,
for a price specified in section 42 of the
Internal Revenue Code of 1986, which may
be exercised during the 15-year period be-
ginning upon initial occupancy.
SEC. 222. FAMILY INCOME 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 local
housing and management authority may establish and uti-
lize income-mix criteria for the selection of residents for
dwelling units in public housing developments that limit
admission to a development by selecting applicants having
incomes appropriate so that the mix of incomes of families
occupying the development is proportional to the income
mix in the eligible population of the jurisdiction of the au-
thority, as adjusted to take into consideration the severity
of housing need.
(c) WAIVER OF ELIGIBILITY REQUIREMENTS FOR
OCCUPANCY
BY POLICE OFFICERS.—To provide occu-
pancy in public housing dwelling units to police officers
and other law enforcement or security personnel (who are
not otherwise eligible for residence in public housing) to
increase security for other public housing residents in de-
velopments where crime has been a problem, a local hous-
ing and management authority may, with respect to such
units—
(1) waive—
(A) the provisions of subsection (a) of this
section and section 225(a);
(B) the applicability of—
(i) any preferences for occupancy es-
tablished under section 223;
(ii) the maximum and minimum rent-
al amounts established pursuant to section
225(b);
(iii) any criteria relating to project in-
come mix established under subsection (b);
and
(iv) any other occupancy limitations
or requirements; and
(2) establish special rent requirements and
other terms and conditions of occupancy.
SEC. 223. PREFERENCES FOR OCCUPANCY.
(a) AUTHORITY TO ESTABLISH.—Any local housing
and management authority may establish a system for
making dwelling units in public housing available for occu-
pancy that provides preference for such occupancy to fam-
ilies having certain 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 local
housing and management authority.
SEC. 224. ADMISSION PROCEDURES.
(a) ADMISSION REQUIREMENTS.—A local housing
and management authority shall ensure that each family
residing in a public housing development owned or admin-
istered by the authority is admitted in accordance with
the procedures established under this title by the authority
and the income limits under section 222.
(b) AVAILABILITY
OF CRIMINAL RECORDS.—Not-
withstanding any other provision of Federal, State, or
local law, upon the request of any local housing and man-
agement authority, the National Crime Information Cen-
ter, police departments, and any other law enforcement
entities shall provide information to the authority regard-
ing the criminal convictions of applicants for, or residents
of, public housing for the purpose of applicant screening,
lease enforcement, and eviction. A local housing and man-
agement authority may pay a reasonable fee for such in-
formation.
(c) NOTIFICATION OF APPLICATION DECISIONS.—A
local housing and management authority shall establish
procedures designed to provide for notification to an appli-
cant for admission to public housing of the determination
with respect to such application, the basis for the deter-
mination, and, if the applicant is determined to be eligible
for admission, the projected date of occupancy (to the ex-
tent such date can reasonably be determined).
SEC. 225. FAMILY RENTAL PAYMENT.
(a) RENTAL CONTRIBUTION BY RESIDENT.—A fam-
ily shall pay as monthly rent for a dwelling unit in public
housing the amount that the local housing and manage-
ment authority determines is appropriate with respect to
the family and the unit, which shall be—
(1) based upon factors determined by the au-
thority, which may include the adjusted income of
the resident, type and size of dwelling unit, operat-
ing and other expenses of the authority, or any other
factors that the authority considers appropriate; and
(2) an amount that is not less than the mini-
mum monthly rental amount nor more than the
maximum monthly rental amount established for the
dwelling unit pursuant to subsection (b).
In determining the amount of the rent charged for a dwell-
ing unit, a local housing and management authority shall
take into consideration the characteristics of the popu-
lation served by the authority, the goals of the community
improvement plan for the authority, and the goals under
the comprehensive housing affordability strategy under
section 105 of the Cranston-Gonzalez National Affordable
Housing Act for the applicable jurisdiction.
(b) ALLOWABLE RENTS.—Each local housing and
management authority shall establish, for each dwelling
unit in public housing owned or administered by the au-
thority, a maximum and minimum monthly rental amount,
as follows:
(1) MAXIMUM RENTAL.—The maximum month-
ly rental amount for a unit shall be an amount de-
termined by the authority which is based on, but
does not exceed—
(A) the average, for dwelling units of simi-
lar size in public housing developments owned
and operated by such authority, of operating
expenses attributable to and reasonable reserves
for such units;
(B) the reasonable rental value of the unit;
or
(C) the local market rent for comparable
units of similar size.
(2) MINIMUM RENTAL.—The minimum monthly
rental amount for a unit may not be less than $50.
(c) INCOME REVIEWS.—If a local housing and man-
agement authority establishes the amount of rent paid by
a family for a public housing dwelling unit based on the
adjusted income of the family, the authority shall review
the incomes of such family occupying dwelling units in
public housing owned or administered by the authority not
less than—
(1) once every 3 years, in the cases of elderly
families and disabled families; and
(2) annually, in the case of nonelderly families.
SEC. 226. LEASE REQUIREMENTS.
In renting dwelling units in a public housing develop-
ment, each local housing and management authority shall
utilize leases that—
(1) do not contain unreasonable terms and con-
ditions;
(2) obligate the local housing and management
authority to maintain the development in compliance
with the housing quality requirements under section
233;
(3) require the local housing and management
authority to give adequate written notice of termi-
nation 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, when the health or safety of other resi-
dents or local housing and management author-
ity employees is threatened or in the case of
nonpayment of rent; and
(B) the period of time provided under the
applicable law of the jurisdiction, in any other
case;
(4) require that the local housing and manage-
ment authority may not terminate the tenancy ex-
cept for violation of the terms or conditions of the
lease, violation of applicable Federal, State, or local
law, or for other good cause;
(5) provide that any activity, engaged in by a
public housing resident, any member of the resi-
dent’s household, or any guest or other person under
the resident’s control, that—
(A) threatens the health or safety of, or
right to peaceful enjoyment of the premises by,
other residents or employees of the local hous-
ing and management authority or other man-
ager of the housing,
(B) threatens the health or safety of, or
right to peaceful enjoyment of their premises
by, persons residing in the immediate vicinity of
the premises, or
(C) is criminal activity (including drug-re-
lated criminal activity),
shall, regardless of whether the resident had actual
knowledge of such activity, be cause for termination
of tenancy; and
(6) 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 subsection, a local housing and management au-
thority 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 local housing and management authority may
make units in such developments (or portions) avail-
able only to the types of families for whom the devel-
opment is designated.
(3) ELIGIBILITY
OF
NEAR-ELDERLY
FAMI-
LIES.—If a local housing and management authority
determines that there are insufficient numbers of el-
derly families to fill all the units in a development
(or portion of a development) designated under
paragraph (1) for occupancy by only elderly families,
the authority may provide that near-elderly families
may occupy dwelling units in the development (or
portion).
(b) PROHIBITION OF EVICTIONS.—Any resident who
is lawfully residing in a dwelling unit in the development
may not be evicted or otherwise required to vacate such
unit because of the designation of the development (or por-
tion of a development) or because of any action taken by
the Secretary or any local housing and management au-
thority to carry out this section.
(c) RELOCATION ASSISTANCE.—A local housing and
management authority that designates any existing devel-
opment or building, or portion thereof, for occupancy as
provided under subsection (a) shall provide, to each person
and family relocated in connection with such designa-
tion—
(1) notice of the designation and relocation, as
soon as is practicable for the authority and the per-
son or family;
(2) comparable housing (including appropriate
services and design features), which may include
rental assistance under title III, at a rental rate 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
COMMUNITY
IM-
PROVEMENT PLAN.—
(1) IN GENERAL.—A local housing and manage-
ment authority may designate a development (or
portion of a development) for occupancy under sub-
section (a)(1) only if the authority, as part of the
authority’s community improvement plan—
(A) establishes that the designation of the
development is necessary—
(i) to achieve the housing goals for
the jurisdiction under the comprehensive
housing affordability strategy under sec-
tion 105 of the Cranston-Gonzalez Na-
tional Affordable Housing Act; and
(ii) to meet the housing needs of the
low-income population jurisdiction; and
(B) submits a description of—
(i) the development (or portion of a
development) to be designated;
(ii) the types of residents for which
the development is to be designated;
(iii) any supportive services to be pro-
vided to residents of the designated devel-
opment (or portion);
(iv) how the authority will secure any
additional resources or housing assistance
that is necessary to provide assistance to
nonelderly disabled families that would
have been housed if occupancy in develop-
ment were not restricted pursuant to this
section; and
(v) how the design and related facili-
ties (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 occu-
pants.
(2) EFFECTIVENESS.—The information re-
quired under paragraph (1) shall be effective for
purposes of designation of a public housing develop-
ment (or portion thereof) under this section only for
the 2-year period that begins upon submission of the
information to the Secretary. A local housing and
management authority may extend the effectiveness
of the designation and information for an additional
2-year period beginning upon the expiration of such
period (or the expiration of any previous extension
period under this sentence) by updating such infor-
mation in the community improvement plan for the
authority.
(3) SUPPORTIVE SERVICES.—For purposes of
this subsection, the term ‘‘supportive services’’
means services designed to meet the special needs of
residents.
(e) 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
section.
(f) INAPPLICABILITY
TO INDIAN HOUSING.—The
provisions of this section shall not apply with respect to
low-income housing developed or operated pursuant to a
contract between the Secretary and an Indian housing au-
thority.
Subtitle C—Management
SEC. 231. MANAGEMENT PROCEDURES.
(a) SOUND MANAGEMENT.—A local housing and
management authority that receives grant amounts under
this title shall establish and comply with procedures and
practices sufficient to ensure that the public housing de-
velopments owned or administered by the authority are op-
erated in a sound manner.
(b) MANAGEMENT BY OTHER ENTITIES.—Except as
otherwise provided under this Act, a local housing and
management authority may contract with any other entity
to perform any of the management functions for public
housing owned or operated by the local housing and man-
agement authority.
SEC. 232. ADMINISTRATIVE GRIEVANCE PROCEDURE.
(a) IN GENERAL.—Each local housing and manage-
ment authority receiving assistance under this title shall
establish and implement an administrative grievance pro-
cedure under which public housing residents will have an
opportunity for disposition of resident grievances concern-
ing adverse actions of the local housing and management
authority.
(b) EXCLUSION OF GRIEVANCES CONCERNING EVIC-
TIONS
FROM
ADMINISTRATIVE
PROCEDURE.—A local
housing and management authority shall exclude from its
procedure established under subsection (a) any grievance
concerning an eviction or termination of tenancy in any
State which requires that, prior to eviction, a resident be
provided a hearing in court which the Secretary deter-
mines provides the basic elements of due process.
SEC. 233. HOUSING QUALITY REQUIREMENTS.
(a) IN GENERAL.—Each local housing and manage-
ment authority that receives grant amounts under this Act
shall maintain its public housing in a condition that com-
plies—
(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 that provide protection to residents of
the dwellings that is equal to or greater than the
protection provided under the housing quality stand-
ards established under subsection (b), with such ap-
plicable 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 subparagraph
(A), 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(b). The Secretary shall differentiate be-
tween major and minor violations of such standards.
(c) DETERMINATIONS.—Each local housing and man-
agement authority providing housing assistance shall iden-
tify, in the community improvement plan of the authority,
whether the authority is utilizing the standard under para-
graph (1) or (2) and, if the authority utilizes the standard
under paragraph (1), shall certify in such plan that the
applicable State or local laws, regulations, standards, or
codes comply with the requirements under such para-
graph.
(d) ANNUAL INSPECTIONS.—Each local housing and
management authority that owns or operates public hous-
ing shall make an annual inspection of each public housing
development to determine whether units in the develop-
ment are maintained in accordance with the requirements
under subsection (a)(2). The authority shall submit the
results of such inspections to the Secretary and the In-
spector General for the Department of Housing and
Urban Development and such results shall be available to
the Housing Foundation and Accreditation Board estab-
lished under title IV and any auditor conducting an audit
under section 432.
SEC. 234. EMPLOYMENT OF RESIDENTS.
A local housing and management authority may em-
ploy public housing residents in any activities engaged in
by the authority.
SEC. 235. 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 local housing
and management authority. A resident council shall be an
organization or association 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
(4) has a democratically elected governing
board, which is elected by the residents of the eligi-
ble housing.
(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 236 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.
SEC. 236. MANAGEMENT BY RESIDENT MANAGEMENT COR-
PORATION.
(a) AUTHORITY.—A local housing and management
authority may enter into a contract under this section with
a resident management corporation to provide for the
management of public housing developments by the cor-
poration.
(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 local housing and management authority. The
contract shall be consistent with the requirements of this
Act applicable to public housing development and may in-
clude specific terms governing management personnel and
compensation, access to public housing records, submis-
sion of and adherence to budgets, rent collection proce-
dures, resident income verification, resident eligibility de-
terminations, resident eviction, the acquisition of supplies
and materials and such other matters as may be appro-
priate. 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
be adequate to protect the Secretary and the local housing
and management authority against loss, theft, embezzle-
ment, or fraudulent acts on the part of the resident man-
agement corporation or its employees.
(d) BLOCK GRANT ASSISTANCE AND INCOME.—A
contract under this section shall provide for—
(1) the local housing and management author-
ity to provide a portion of the block grant assistance
under this title to the resident management corpora-
tion for purposes of operating the public housing de-
velopment covered by the contract and performing
such other eligible activities with respect to the de-
velopment 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
local housing and management authority (such as
interest income, administrative 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).
(e) CALCULATION OF TOTAL INCOME.—
(1) MAINTENANCE
OF
SUPPORT.—Subject to
paragraph (2), the amount of assistance provided by
a local housing and management authority to a pub-
lic housing development managed by a resident man-
agement corporation may not be reduced during the
3-year period beginning on the date on which the
resident management corporation is first established
for the development.
(2) REDUCTIONS
AND
INCREASES
IN
SUP-
PORT.—If the total income of a local housing and
management authority is reduced or increased, the
income provided by the local housing and manage-
ment authority to a public housing development
managed by a resident management corporation
shall be reduced or increased in proportion to the re-
duction or increase in the total income of the au-
thority, except that any reduction in block grant
amounts under this title to the authority that occurs
as a result of fraud, waste, or mismanagement by
the authority shall not affect the amount provided to
the resident management corporation.
SEC. 237. 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 local housing and management authority to an eligible
management entity, in accordance with the requirements
of this section, if—
(1) such housing is owned or operated by a
local housing and management authority that is—
(A) not accredited under section 434 by
the Housing Foundation and Accreditation
Board; or
(B) is designated as a troubled authority
under section 431(a)(2);
(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;
(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 elements of distress for such hous-
ing specified in subparagraphs (A) through (C)
can be remedied through improved management
and 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-
dent council for the specified housing, after consultation
with the local housing and management authority for the
specified housing.
(b) BLOCK GRANT ASSISTANCE.—Pursuant to a con-
tract under subsection (c), the Secretary shall require the
local housing and management authority for specified
housing to provide to the manager for the housing, from
any block grant amounts under this title for the authority,
fair and reasonable 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 local housing and management au-
thority transferring the housing, taking into consideration
the operating and capital improvement needs of the speci-
fied housing, the operating and capital improvement needs
of the remaining public housing units managed by the
local housing and management authority, and the commu-
nity improvement plan of such authority.
(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 identified in the request to transfer the re-
sponsibilities and authority for management of the
housing to such 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 COMMUNITY IMPROVEMENT
PLAN.—A manager of specified housing under this section
shall comply with the approved community improvement
plan applicable to the housing and shall submit such infor-
mation to the local housing and management authority
from which management was transferred as may be nec-
essary for such authority to prepare and update its com-
munity improvement 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 community improvement plan for the authority
transferring management of the housing.
(f) LIMITATION ON LHMA LIABILITY.—A local hous-
ing and management authority that is not a manager for
specified housing shall not be liable for any act or failure
to act by a manager 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 local housing and management
authority for purposes 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 that has been accredited in accord-
ance with section 434:
(A) NONPROFIT ORGANIZATION.—A public
or private nonprofit organization, which shall—
(i) include a resident management
corporation and, as determined by the Sec-
retary, a public or private nonprofit orga-
nization sponsored by the local housing
and management authority that owns the
development; and
(ii) not include the local housing and
management authority that owns the devel-
opment.
(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) LOCAL
HOUSING
AND
MANAGEMENT
AUTHORITY.—A local housing and management
authority (other than the local housing and
management authority that owns the develop-
ment).
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
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) LOCAL
HOUSING
AND
MANAGEMENT
AU-
THORITY.—The term ‘‘local housing and manage-
ment authority’’ has the meaning given such term in
section 103(a), except that it does not include In-
dian housing authorities.
(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
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.
Subtitle D—Homeownership
SEC. 251. RESIDENT HOMEOWNERSHIP PROGRAMS.
(a) IN GENERAL.—A local housing and management
authority may carry out a homeownership program in ac-
cordance with this section and the community improve-
ment plan of the authority to make public housing dwell-
ing units, public housing developments, and other housing
projects available for purchase by low-income families.
(b) PARTICIPATING UNITS.—A program under this
section may cover any existing public housing dwelling
units or projects, and may include other dwelling units and
housing owned, operated, or assisted, or otherwise ac-
quired for use under such program, by the local housing
and management authority.
(c) ELIGIBLE PURCHASERS.—
(1) LOW-INCOME REQUIREMENT.—Only low-in-
come families assisted by a local housing and man-
agement authority and other low-income families
shall be eligible to purchase housing under a home-
ownership program under this section.
(2) OTHER REQUIREMENTS.—A local housing
and management authority may establish other re-
quirements or limitations for families to purchase
housing under a homeownership program under this
section, including requirements or limitations re-
garding employment or participation in employment
counseling or training activities, criminal activity,
participation in homeownership counseling pro-
grams, evidence of regular income, and other re-
quirements.
(d) FINANCING AND ASSISTANCE.—A homeownership
program under this section may provide financing for ac-
quisition of housing by families purchasing under the pro-
gram or by the local housing and management authority
for sale under this program in any manner considered ap-
propriate by the authority (including sale to a resident
management corporation).
(e) DOWNPAYMENT REQUIREMENT.—Each family
purchasing housing under a homeownership program
under this section shall be required to provide from its
own resources a downpayment in connection with any loan
for acquisition of the housing, in an amount determined
by the local housing and management authority.
(f) OWNERSHIP INTERESTS.—A homeownership pro-
gram under this section may provide for sale to the pur-
chasing family of any ownership interest that the local
housing and management authority considers appropriate
under the program, including ownership in fee simple, a
condominium interest, an interest in a limited dividend co-
dispose of a public housing development (or portion of a
development) only if—
(1) the development (or portion thereof) is se-
verely distressed or obsolete;
(2) the development (or portion thereof) is in a
location making it unsuitable for housing purposes;
(3) the development (or portion thereof) has de-
sign or construction deficiencies that make cost-ef-
fective rehabilitation infeasible;
(4) assuming that reasonable rehabilitation and
management intervention for the development has
been completed and paid for, the anticipated revenue
that would be derived from charging market-based
rents for units in the development (or portion there-
of) would not cover the anticipated operating costs
and replacement reserves of the development (or
portion) at full occupancy and the development (or
portion) would constitute a substantial burden on
the resources of the local housing and management
authority;
(5) retention of the development (or portion
thereof) is not in the best interests of the residents
of the local housing and management authority be-
cause—
(A) developmental changes in the area sur-
rounding the development adversely affect the
health or safety of the residents or the feasible
operation of the development by the local hous-
ing and management authority;
(B) demolition or disposition will allow the
acquisition, development, or rehabilitation of
other properties which will be more efficiently
or effectively operated as low-income housing;
or
(C) other factors exist that the authority
determines are consistent with the best inter-
ests of the residents and the authority and not
inconsistent with other provisions of this Act
(which may include use of public housing dwell-
ing units in a homeownership program under
subtitle D);
(6) in the case only of demolition or disposition
of a portion of a development, the demolition or dis-
position will help to ensure the remaining useful life
of the remainder of the development; or
(7) in the case only of property other than
dwelling units—
(A) the property is excess to the needs of
a development; or
(B) the demolition or disposition is inci-
dental to, or does not interfere with, continued
operation of a development.
(d) CONSULTATION.—A local housing and manage-
ment authority may demolish or dispose of a public hous-
ing development (or portion of a development) only if the
authority notifies and confers regarding the demolition or
disposition with—
(1) the residents of the development (or por-
tion); and
(2) appropriate local government officials.
(e) USE OF PROCEEDS.—Any net proceeds from the
disposition of a public housing development (or portion of
a development) shall be used for—
(1) housing assistance for low-income families
that is consistent with the low-income housing needs
of the community, through acquisition, development,
or rehabilitation of, or homeownership programs for,
other low-income housing or the provision of choice-
based assistance under title III for such families;
(2) supportive services relating to job training
or child care for residents of a development or devel-
opments; or
(3) leveraging amounts for securing commercial
enterprises, on-site in public housing developments
of the local housing and management authority, ap-
propriate to serve the needs of the residents.
(f) RELOCATION.—A local housing and management
authority that demolishes or disposes of a public housing
development (or portion of a development thereof) shall
ensure that—
(1) each family that is a resident of the devel-
opment (or portion) that is demolished or disposed
of is relocated to other safe, clean, healthy, and af-
fordable housing, which is, to the maximum extent
practicable, housing of the family’s choice or is pro-
vided with choice-based assistance under title III;
(2) the local housing and management author-
ity does not take any action to dispose of any unit
until any resident to be displaced is relocated in ac-
cordance with paragraph (1); and
(3) each resident family to be displaced is paid
relocation expenses, and the rent to be paid initially
by the resident following relocation does not exceed
the amount permitted under section 225(a).
(g) RIGHT OF FIRST REFUSAL FOR RESIDENT ORGA-
NIZATIONS
AND
RESIDENT
MANAGEMENT
CORPORA-
TIONS.—
(1) IN GENERAL.—A local housing and manage-
ment authority may not dispose of a public housing
development (or portion of a development) unless the
authority has, before such disposition, offered to sell
the property, as provided in this subsection, to each
resident organization and resident management cor-
poration operating at the development for continued
use as low-income housing, and no such organization
or corporation purchases the property pursuant to
such offer.
(2) TIMING.—Disposition of a development (or
portion thereof) under this section may not take
place—
(A) before the expiration of the period dur-
ing which any such organization or corporation
may notify the authority of interest in purchas-
ing the property, which shall be the 30-day pe-
riod beginning on the date that the authority
first provides notice of the proposed disposition
of the property to such resident organizations
and resident management corporations;
(B) if an organization or corporation sub-
mits notice of interest in accordance with sub-
paragraph (A), before the expiration of the pe-
riod during which such organization or corpora-
tion may obtain a commitment for financing to
purchase the property, which shall be the 60-
day period beginning upon the submission to
the authority of the notice of interest; or
(C) if, during the period under subpara-
graph (B), an organization or corporation ob-
tains such financing commitment and makes a
bona fide offer to the authority to purchase the
property for a price equal to or exceeding the
applicable offer price under paragraph (3).
The authority shall sell the property pursuant to any
purchase offer described in subparagraph (C).
(3) TERMS
OF
OFFER.—An offer by a local
housing and management authority to sell a prop-
erty in accordance with this subsection shall involve
a purchase price that reflects the market value of
the property.
(h) INFORMATION FOR COMMUNITY IMPROVEMENT
PLAN.—A local housing and management authority may
demolish or dispose of a public housing development (or
portion thereof) only if it includes in the applicable com-
munity improvement plan information sufficient to de-
scribe—
(1) the housing to be demolished or disposed of;
(2) the purpose of the demolition or disposition
under subsection (c) and why the demolition or dis-
position complies with the requirements under sub-
section (c);
(3) how the consultations required under sub-
section (d) will be made;
(4) how the net proceeds of the disposition will
be used in accordance with subsection (e);
(5) how the authority will relocate residents, if
necessary, as required under subsection (f); and
(6) that the authority has offered the property
for acquisition by resident organizations and resi-
dent management corporations in accordance with
subsection (g).
(i) SITE AND NEIGHBORHOOD STANDARDS EXEMP-
TION.—Notwithstanding any other provision of law, a
local housing and management authority may provide for
development of public housing dwelling units on the same
site or in the same neighborhood as any dwelling units
demolished, pursuant to a plan under this section, but only
if such development provides for significantly fewer dwell-
ing units.
(j) TREATMENT OF REPLACEMENT UNITS.—In con-
nection with any demolition or disposition of public hous-
ing under this section, a local housing and management
authority may provide for other housing assistance for
low-income families that is consistent with the low-income
housing needs of the community, including—
(1) the provision of choice-based assistance
under title III; and
(2) the development, acquisition, or lease by the
authority of dwelling units, which dwelling units
shall—
(A) be eligible to receive assistance with
grant amounts provided under this title; and
(B) be made available for occupancy, oper-
ated, and managed in the manner required for
public housing, and subject to the other require-
ments applicable to public housing dwelling
units.
(k) PERMISSIBLE RELOCATION WITHOUT PLAN.—If
a local housing and management authority determines
that public housing dwelling units are not clean, safe, and
healthy or cannot be maintained cost-effectively in a clean,
safe, and healthy condition, the local housing and manage-
ment authority may relocate residents of such dwelling
units before the submission of a community improvement
plan providing for demolition or disposition of such units.
(l) CONSOLIDATION
OF OCCUPANCY WITHIN
OR
AMONG BUILDINGS.—Nothing in this section may be con-
strued to prevent a local housing and management author-
ity from consolidating occupancy within or among build-
ings of a public housing development, or among develop-
ments, or with other housing for the purpose of improving
living conditions of, or providing more efficient services
to, residents.
(m) DE MINIMIS EXCEPTION TO DEMOLITION RE-
QUIREMENTS.—Notwithstanding any other provision of
this section, in any 5-year period a local housing and man-
agement authority may demolish not more than the lesser
of 5 dwelling units or 5 percent of the total dwelling units
owned and operated by the local housing and management
authority, without providing for such demolition in a com-
munity improvement plan, but only if the space occupied
by the demolished unit is used for meeting the service or
other needs of public housing residents or the demolished
unit was beyond repair.
Subtitle F—General Provisions
SEC. 271. CONVERSION TO BLOCK GRANT ASSISTANCE.
(a) SAVINGS PROVISIONS.—Any amounts made avail-
able to a public housing agency for assistance for public
housing pursuant to the United States Housing Act of
1937 (or any other provision of law relating to assistance
for public housing) under an appropriation for fiscal year
1996 or any previous fiscal year shall be subject to the
provisions of such Act as in effect before the enactment
of this Act, notwithstanding the repeals made by this Act,
except to the extent the Secretary provides otherwise to
provide for the conversion of public housing and public
housing assistance to the system provided under this Act.
(b) MODIFICATIONS.—Notwithstanding any provision
of this Act or any annual contributions contract or other
agreement entered into by the Secretary and a public
housing agency pursuant to the provisions of the United
States Housing Act of 1937 (as in effect before the enact-
ment of this Act), the Secretary and the agency may by
mutual consent amend, supersede, modify any such agree-
ment as appropriate to provide for assistance under this
title, except that the Secretary and the agency may not
consent to any such amendment, supersession, or modi-
fication that substantially alters any outstanding obliga-
tions requiring continued maintenance of the low-income
character of any public housing development and any such
amendment, supersession, or modification shall not be
given effect.
SEC. 272. PAYMENT OF NON-FEDERAL SHARE.
Rental or use-value of buildings or facilities paid for,
in whole or in part, from production, modernization, or
operation costs financed under this title may be used as
the non-Federal share required in connection with activi-
ties undertaken under Federal grant-in-aid programs
100
which provide social, educational, employment, and other
services to the residents in a project assisted under this
title.
SEC. 273. DEFINITIONS.
For purposes of this title, the following definitions
shall apply:
(1) ACQUISITION COST.—The term ‘‘acquisition
cost’’ means the amount prudently expended by a
local housing and management authority in acquir-
ing property for a public housing development.
(2) DEVELOPMENT.—The terms ‘‘public hous-
ing development’’ and ‘‘development’’ mean—
(A) public housing; and
(B) the improvement of any such housing.
(3) ELIGIBLE LOCAL HOUSING AND MANAGE-
MENT AUTHORITY.—The term ‘‘eligible local housing
and management authority’’ means, with respect to
a fiscal year, a local housing and management au-
thority that is eligible under section 202(b) for a
grant under this title.
(4) 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.
101
(5) OPERATION.—The term ‘‘operation’’ means
any or all undertakings appropriate for manage-
ment, operation, services, maintenance, security (in-
cluding the cost of security personnel), or financing
in connection with a public housing development, in-
cluding the financing of resident programs and serv-
ices.
(6) PRODUCTION.—The term ‘‘production’’
means any or all undertakings necessary for plan-
ning, land acquisition, financing, demolition, con-
struction, or equipment, in connection with the con-
struction, acquisition, or rehabilitation of a property
for use as a public housing development, including
activity in connection with a public housing develop-
ment that is confined to the reconstruction, remodel-
ing, or repair of existing buildings.
(7) PRODUCTION COST.—The term ‘‘production
cost’’ means the costs incurred by a local housing
and management authority for production of public
housing and the necessary financing for production
(including the payment of carrying charges and ac-
quisition costs).
(8) RESIDENT COUNCIL.—The term ‘‘resident
council’’ means an organization or association that
meets the requirements of section 235(a).
102
(9) RESIDENT MANAGEMENT CORPORATION.—
The term ‘‘resident management corporation’’ means
a corporation that meets the requirements of section
235(b).
(10) 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
115
(as the Secretary shall establish) for various sizes and
types of dwelling units.
(b) AMOUNT.—For a market area, the rental indica-
tor established under subsection (a) for a dwelling unit
of a particular size and type in the market area shall be
a dollar amount that reflects the rental amount for a
standard quality rental unit of such size and type in the
market area that is an eligible dwelling unit.
(c) EFFECTIVE DATE.—The Secretary shall cause
the proposed rental indicators established under sub-
section (a) for each market area to be published in the
Federal Register with reasonable time for public comment,
and such rental indicators shall become effective upon the
date of publication in final form in the Federal Register.
(d) ANNUAL ADJUSTMENT.—Each rental indicator in
effect under this section shall be adjusted to be effective
on October 1 of each year to reflect changes, based on
the most recent available data trended so that the indica-
tors will be current for the year to which they apply, in
rents for existing rental dwelling units of various sizes and
types in the market area suitable for occupancy by families
assisted under this title.