111 
tered into between the agency and the Secretary 
providing for such participation; 
‘‘(B) as demonstrated in its reports under 
subsection (g)(2) and its annual budget plans 
under subsection (g)(3), has persistently failed 
to meet the goals identified in its application, 
and the reasons or circumstances specified in 
the public housing agency’s reports and plans 
for such failure are not sufficient to justify the 
continued failure; 
‘‘(C) has misused or misappropriated 
funds; 
‘‘(D) has failed to make a good faith effort 
to carry out the purposes of the program speci-
fied in subsection (a); or 
‘‘(E) has failed to cure a material defi-
ciency in performance after notice and an op-
portunity to correct the deficiency. 
‘‘(5) CORRECTIVE ACTION PROGRAM.—The Sec-
retary shall carry out a program— 
‘‘(A) to identify public housing agencies 
participating in the program under this section 
that are at risk of termination of such partici-
pation pursuant to paragraph (6); 
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112 
‘‘(B) to consult with such public housing 
agencies regarding actions that may be taken to 
avoid such termination; 
‘‘(C) to establish goals and timelines for 
such corrective actions; and 
‘‘(D) to provide appropriate technical as-
sistance designed to facilitate such actions and 
avoid such termination. 
‘‘(6) TERMINATION
OF
PARTICIPATION.—Any 
public housing agency whose participation in the 
program under this section is terminated shall be 
subject to the provisions of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437 et seq.) and all 
other provisions of law applicable to public housing 
agencies not participating in the program, except 
that the Secretary shall provide a transition period, 
that begins upon such termination and is not shorter 
than 18 months, for such public housing agencies to 
come into compliance with such laws. 
‘‘(7) REPORTS TO CONGRESS.—Not later than 
the expiration of the 5-year period beginning on the 
date of the enactment of this Act, and not later than 
the expiration of each successive 5-year period there-
after, the Secretary shall submit a report to the 
Congress regarding the program under this section 
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113 
and the results of the reviews conducted under para-
graph (2), which shall— 
‘‘(A) evaluate the programs carried out by 
public housing agencies participating in the pro-
gram, including with respect to each of the pur-
poses specified in subsection (a); and 
‘‘(B) include findings and recommenda-
tions for appropriate legislative changes to the 
program. 
‘‘(8) GAO REVIEWS AND REPORTS.—Not later 
than 180 days after the date of enactment of this 
Act, and not less frequently than every 8 years 
thereafter, the Comptroller General of the United 
States shall— 
‘‘(A) conduct and complete a review of the 
program under this section, which shall include 
examination and analysis of the implementation 
of the program and identification of any short-
comings and any means for improving the pro-
gram; and 
‘‘(B) submit to the Congress a report re-
garding the review, which shall set forth a de-
tailed description of such implementation, any 
shortcomings of the program identified, and 
recommendations for improving the program.’’; 
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114 
(10) in subsection (i)— 
(A) in the matter preceding paragraph (1), 
by striking ‘‘section 14 of the United States 
Housing Act of 1937 for fiscal years 1996, 
1997, and 1998’’ and inserting ‘‘the Capital 
Fund under section 9(d) of the United States 
Housing Act of 1937 in each fiscal year’’; and 
(B) in paragraph (1)(B), by striking ‘‘up 
to 10’’; and 
(11) by striking subsection (j). 
(b) TREATMENT OF PARTICIPATING AGENCIES.— 
(1) CONTINUATION
OF
PARTICIPATION.—This 
section and the amendments made by this section 
shall not affect the status of any public housing 
agency that, as of the date of the enactment of this 
Act, is participating in the Moving to Work Program 
under section 204 of the Departments of Veterans 
Affairs and Housing and Urban Development, and 
Independent Agencies Appropriations Act, 1996 (42 
U.S.C. 1437f note), as such a participating agency. 
(2) ELECTION.—Any public housing agency re-
ferred to in paragraph (1) may elect— 
(A) to continue participation in the Pro-
gram under section 204 of the Departments of 
Veterans Affairs and Housing and Urban De-
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115 
velopment, and Independent Agencies Appro-
priations Act, 1996 (42 U.S.C. 1437f note) 
under the terms of the agreement entered into 
between the agency and the Secretary providing 
for such participation until the date of the expi-
ration of such agreement; or 
(B) at any time before date of the expira-
tion of such agreement, to transition to partici-
pation under the program under such section 
204, as amended by this Act. 
(3) CONVERSION TO REFORMED PROGRAM.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B) of this paragraph, any public 
housing agency that elects pursuant to para-
graph (2)(A) of this subsection to continue par-
ticipation in the Program under section 204 of 
the Departments of Veterans Affairs and Hous-
ing and Urban Development, and Independent 
Agencies Appropriations Act, 1996 (42 U.S.C. 
1437f note) shall, upon the expiration of the 
agreement referred to in such paragraph, be 
considered to have been approved for participa-
tion in the Program under such section 204, as 
amended by this Act, and the Secretary of 
Housing and Urban Development shall provide 
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116 
for the transition of the agency to participation 
under the Program under such section as so 
amended. 
(B) INAPPLICABILITY.—Subparagraph (A) 
shall not apply to any public housing agency 
that is determined by the Secretary to be in 
material default, upon the expiration of the 
agreement referred to in paragraph (2)(A), of 
the conditions and obligations under such 
agreement. 
(4) INAPPLICABILITY
OF
NUMERICAL
LIMITA-
TION.—Any public housing agency transitioned pur-
suant to paragraph (2)(B) or (3)(A) of this sub-
section to participation under the program under 
section 204 of the Departments of Veterans Affairs 
and Housing and Urban Development, and Inde-
pendent Agencies Appropriations Act, 1996 (42 
U.S.C. 1437f note), as amended by this section, 
shall not count toward fulfillment of the numerical 
limitation under section 204(d)(3)(A) of the Depart-
ments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropria-
tions Act, 1996 (42 U.S.C. 1437f note), as added by 
the amendment made by this section. 
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