IIA
105TH CONGRESS
1ST SESSION
H. R. 2
IN THE SENATE OF THE UNITED STATES
MAY 15, 1997
Received; read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
AN ACT
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.
HR 2 RFS
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
‘‘Housing Opportunity and Responsibility Act of 1997’’.
(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. 104. Determination of adjusted income and median income.
Sec. 105. Community work and family self-sufficiency requirements.
Sec. 106. Local housing management plans.
Sec. 107. Review of plans.
Sec. 108. Reporting requirements.
Sec. 109. Pet ownership.
Sec. 110. Administrative grievance procedure.
Sec. 111. Headquarters reserve fund.
Sec. 112. Labor standards.
Sec. 113. Nondiscrimination.
Sec. 114. Prohibition on use of funds.
Sec. 115. Inapplicability to Indian housing.
Sec. 116. Regulations.
TITLE II—PUBLIC HOUSING
Subtitle A—Block Grants
Sec. 201. Block grant contracts.
Sec. 202. Grant authority, amount, and eligibility.
Sec. 203. Eligible and required activities.
Sec. 204. Determination of 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 eligibility.
Sec. 223. Preferences for occupancy.
Sec. 224. Admission procedures.
Sec. 225. Family choice of rental payment.
Sec. 226. Lease requirements.
Sec. 227. Designated housing for elderly and disabled families.
Subtitle C—Management
HR 2 RFS
Sec. 231. Management procedures.
Sec. 232. Housing quality requirements.
Sec. 233. Employment of residents.
Sec. 234. Resident councils and resident management corporations.
Sec. 235. Management by resident management corporation.
Sec. 236. Transfer of management of certain housing to independent manager
at request of residents.
Sec. 237. Resident opportunity program.
Subtitle D—Homeownership
Sec. 251. Resident homeownership programs.
Subtitle E—Disposition, Demolition, and Revitalization of Developments
Sec. 261. Requirements for demolition and disposition of developments.
Sec. 262. Demolition, site revitalization, replacement housing, and choice-based
assistance grants for developments.
Sec. 263. Voluntary voucher system for public housing.
Subtitle F—Mixed-Finance Public Housing
Sec. 271. Authority.
Sec. 272. Mixed-finance housing developments.
Sec. 273. Mixed-finance housing plan.
Sec. 274. Rent levels for housing financed with low-income housing tax credit.
Sec. 275. Carry-over of assistance for replaced housing.
Subtitle G—General Provisions
Sec. 281. Payment of non-Federal share.
Sec. 282. Authorization of appropriations for block grants.
Sec. 283. Funding for operation safe home.
Sec. 284. Funding for relocation of victims of domestic violence.
TITLE III—CHOICE-BASED RENTAL HOUSING AND
HOMEOWNERSHIP ASSISTANCE FOR LOW-INCOME FAMILIES
Subtitle A—Allocation
Sec. 301. Authority to provide housing assistance amounts.
Sec. 302. Contracts with PHA’s.
Sec. 303. Eligibility of PHA’s for assistance amounts.
Sec. 304. Allocation of amounts.
Sec. 305. Administrative fees.
Sec. 306. Authorizations of appropriations.
Sec. 307. Conversion of section 8 assistance.
Sec. 308. Recapture and reuse of annual contract project reserves under choice-
based housing assistance and section 8 tenant-based assistance
programs.
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.
HR 2 RFS
Sec. 326. Eligible owners.
Sec. 327. Selection of dwelling units.
Sec. 328. Eligible dwelling units.
Sec. 329. Homeownership option.
Sec. 330. Assistance for rental of manufactured homes.
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.
Subtitle D—General and Miscellaneous Provisions
Sec. 371. Definitions.
Sec. 372. Rental assistance fraud recoveries.
Sec. 373. Study regarding geographic concentration of assisted families.
Sec. 374. Study regarding rental assistance.
TITLE IV—HOME RULE FLEXIBLE GRANT OPTION
Sec. 401. Purpose.
Sec. 402. Flexible grant program.
Sec. 403. Covered housing assistance.
Sec. 404. Program requirements.
Sec. 405. Applicability of certain provisions.
Sec. 406. Application.
Sec. 407. Training.
Sec. 408. Accountability.
Sec. 409. Definitions.
TITLE V—ACCOUNTABILITY AND OVERSIGHT OF PUBLIC
HOUSING AGENCIES
Subtitle A—Study of Alternative Methods for Evaluating Public Housing
Agencies
Sec. 501. In general.
Sec. 502. Purposes.
Sec. 503. Evaluation of various performance evaluation systems.
Sec. 504. Consultation.
Sec. 505. Contract to conduct study.
Sec. 506. Report.
Sec. 507. Funding.
Sec. 508. Effective date.
Subtitle B—Housing Evaluation and Accreditation Board
Sec. 521. Establishment.
Sec. 522. Membership.
Sec. 523. Functions.
Sec. 524. Powers.
Sec. 525. Fees.
Sec. 526. GAO audit.
HR 2 RFS
Subtitle C—Interim Applicability of Public Housing Management Assessment
Program
Sec. 531. Interim applicability.
Sec. 532. Management assessment indicators.
Sec. 533. Designation of PHA’s.
Sec. 534. On-site inspection of troubled PHA’s.
Sec. 535. Administration.
Subtitle D—Accountability and Oversight Standards and Procedures
Sec. 541. Audits.
Sec. 542. Performance agreements for authorities at risk of becoming troubled.
Sec. 543. Performance agreements and CDBG sanctions for troubled PHA’s.
Sec. 544. Option to demand conveyance of title to or possession of public hous-
ing.
Sec. 545. Removal of ineffective PHA’s.
Sec. 546. Mandatory takeover of chronically troubled PHA’s.
Sec. 547. Treatment of troubled PHA’s.
Sec. 548. Maintenance of records.
Sec. 549. Annual reports regarding troubled PHA’s.
Sec. 550. Applicability to resident management corporations.
Sec. 551. Advisory council for Housing Authority of New Orleans.
TITLE VI—REPEALS AND RELATED AMENDMENTS
Subtitle A—Repeals, Effective Date, and Savings Provisions
Sec. 601. Effective date and repeal of United States Housing Act of 1937.
Sec. 602. Other repeals.
Subtitle B—Other Provisions Relating to Public Housing and Rental
Assistance Programs
Sec. 621. Allocation of elderly housing amounts.
Sec. 622. Pet ownership.
Sec. 623. Review of drug elimination program contracts.
Sec. 624. Amendments to Public and Assisted Housing Drug Elimination Act
of 1990.
Subtitle C—Limitations Relating to Occupancy in Federally Assisted Housing
Sec. 641. Screening of applicants.
Sec. 642. Termination of tenancy and assistance for illegal drug users and alco-
hol abusers.
Sec. 643. Lease requirements.
Sec. 644. Availability of criminal records for tenant screening and eviction.
Sec. 645. Definitions.
TITLE VII—AFFORDABLE HOUSING AND MISCELLANEOUS
PROVISIONS
Sec. 701. Rural housing assistance.
Sec. 702. Treatment of occupancy standards.
Sec. 703. Implementation of plan.
Sec. 704. Income eligibility for HOME and CDBG programs.
Sec. 705. Prohibition of use of CDBG grants for employment relocation activi-
ties.
HR 2 RFS
Sec. 706. Regional cooperation under CDBG economic development initiative.
Sec. 707. Use of American products.
Sec. 708. Consultation with affected areas in settlement of litigation.
Sec. 709. Treatment of PHA repayment agreement.
Sec. 710. Use of assisted housing by aliens.
Sec. 711. Protection of senior homeowners under reverse mortgage program.
Sec. 712. Conversion of section 8 tenant-based assistance to project-based as-
sistance in the Borough of Tamaqua.
Sec. 713. Housing counseling.
Sec. 714. Transfer of surplus real property for providing housing for low- and
moderate-income families.
Sec. 715. Effective date.
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
HR 2 RFS
and allow families to prosper without govern-
ment involvement in their day-to-day activities;
(2) the Federal Government cannot through its
direct action alone provide for the housing of every
American citizen, or even a majority of its citizens,
but it is the responsibility of the Government to pro-
mote and protect the independent and collective ac-
tions of private citizens to develop housing and
strengthen their own neighborhoods;
(3) the Federal Government should act where
there is a serious need that private citizens or
groups cannot or are not addressing responsibly;
(4) housing is a fundamental and necessary
component of bringing true opportunity to people
and communities in need, but providing physical
structures to house low-income families will not by
itself pull generations up from poverty;
(5) it is a goal of our Nation that all citizens
have decent and affordable housing; and
(6) our Nation should promote the goal of pro-
viding decent and affordable housing for all citizens
through the efforts and encouragement of Federal,
State, and local governments, and by the independ-
ent and collective actions of private citizens, organi-
zations, and the private sector.
HR 2 RFS
TITLE I—GENERAL PROVISIONS
SEC. 101. STATEMENT OF PURPOSE.
The purpose of this Act is to promote safe, clean, and
healthy housing that is affordable to low-income families,
and thereby contribute to the supply of affordable housing,
by—
(1) deregulating and decontrolling public hous-
ing agencies, thereby enabling them to perform as
property and asset managers;
(2) providing for more flexible use of Federal
assistance to public housing agencies, 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 public housing agencies;
(5) creating incentives and economic opportuni-
ties for residents of dwelling units assisted by public
housing agencies to work, become self-sufficient, and
transition out of public housing and federally as-
sisted dwelling units;
(6) recreating the existing rental assistance
voucher program so that the use of vouchers and re-
lationships between landlords and tenants under the
HR 2 RFS
program operate in a manner that more closely re-
sembles the private housing market; and
(7) remedying troubled public housing agencies
and replacing or revitalizing severely distressed pub-
lic housing developments.
SEC. 102. DEFINITIONS.
For purposes of this Act, the following definitions
shall apply:
(1) ACQUISITION
COST.—When used in ref-
erence to public housing, the term ‘‘acquisition cost’’
means the amount prudently expended by a public
housing agency in acquiring property for a public
housing development.
(2) DEVELOPMENT.—The terms ‘‘public hous-
ing development’’ and ‘‘development’’ (when used in
reference to public housing) mean—
(A) public housing; and
(B) the improvement of any such housing.
(3) 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
HR 2 RFS
the regulations of the Secretary to be essential to
their care or well-being.
(4) 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).
(5) EFFECTIVE
DATE.—The term ‘‘effective
date’’, when used in reference to this Act, means the
effective date determined under section 601(a).
(6) 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.
(7) ELDERLY PERSON.—The term ‘‘elderly per-
son’’ means a person who is at least 62 years of age.
HR 2 RFS
(8) ELIGIBLE PUBLIC HOUSING AGENCY.—The
term ‘‘eligible public housing agency’’ means, with
respect to a fiscal year, a public housing agency that
is eligible under section 202(d) for a grant under
this title.
(9) 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.
(10) 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.
(11) 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 public
housing agency and the Secretary, 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.
HR 2 RFS
(12) LOCAL
HOUSING
MANAGEMENT
PLAN.—
The term ‘‘local housing management plan’’ means,
with respect to any fiscal year, the plan under sec-
tion 106 of a public housing agency for such fiscal
year.
(13) LOW-INCOME FAMILY.—The term ‘‘low-in-
come family’’ means a family whose income does not
exceed 80 percent of the median income for the
area, as determined by the Secretary with adjust-
ments for smaller and larger families, except that
the Secretary may, for purposes of this paragraph,
establish income ceilings higher or lower than 80
percent of the median for the area on the basis of
the public housing agency’s findings that such vari-
ations are necessary because of unusually high or
low family incomes.
(14) LOW-INCOME HOUSING.—The term ‘‘low-
income housing’’ means dwellings that comply with
the requirements—
(A) under title II for assistance under such
title for the dwellings; or
(B) under title III for rental assistance
payments under such title for the dwellings.
HR 2 RFS
(15) 
NEAR-ELDERLY
PERSON.—The 
term
‘‘near-elderly person’’ means a person who is at least
55 years of age.
(16) OPERATION.—When used in reference to
public housing, the term ‘‘operation’’ means any or
all undertakings appropriate for management, oper-
ation, services, maintenance, security (including the
cost of security personnel), or financing in connec-
tion with a public housing development, including
the financing of resident programs and services.
(17) PERSON WITH DISABILITIES.—The term
‘‘person with disabilities’’ means a person who—
(A) has a disability as defined in section
223 of the Social Security Act,
(B) is determined, pursuant to regulations
issued by the Secretary, to have a physical,
mental, or emotional impairment which (i) is
expected to be of long-continued and indefinite
duration, (ii) substantially impedes his or her
ability to live independently, and (iii) is of such
a nature that such ability could be improved by
more suitable housing conditions, or
(C) has a developmental disability as de-
fined in section 102 of the Developmental Dis-
abilities Assistance and Bill of Rights Act.
HR 2 RFS
Such term shall not exclude persons who have the
disease of acquired immunodeficiency syndrome or
any conditions arising from the etiologic agent for
acquired immunodeficiency syndrome. Notwithstand-
ing any other provision of law, no individual shall be
considered a person with disabilities, for purposes of
eligibility for public housing under title II of this
Act, solely on the basis of any drug or alcohol de-
pendence. The Secretary shall consult with other ap-
propriate Federal agencies to implement the preced-
ing sentence.
(18) PRODUCTION.—When used in reference to
public housing, the term ‘‘production’’ means any or
all undertakings necessary for planning, land acqui-
sition, financing, demolition, construction, or equip-
ment, in connection with the construction, acquisi-
tion, or rehabilitation of a property for use as a pub-
lic housing development, including activity in connec-
tion with a public housing development that is con-
fined to the reconstruction, remodeling, or repair of
existing buildings.
(19) PRODUCTION COST.—When used in ref-
erence to public housing, the term ‘‘production cost’’
means the costs incurred by a public housing agency
for production of public housing and the necessary
HR 2 RFS
financing for production (including the payment of
carrying charges and acquisition costs).
(20) PUBLIC
HOUSING.—The term ‘‘public
housing’’ means housing, and all necessary appur-
tenances thereto, that—
(A) is low-income housing, low-income
dwelling units in mixed-finance housing (as pro-
vided in subtitle F), or low-income dwelling
units in mixed income housing (as provided in
section 221(c)(2)); and
(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).
(21) PUBLIC
HOUSING
AGENCY.—The term
‘‘public housing agency’’ is defined in section 103.
(22) RESIDENT COUNCIL.—The term ‘‘resident
council’’ means an organization or association that
meets the requirements of section 234(a).
(23) RESIDENT MANAGEMENT CORPORATION.—
The term ‘‘resident management corporation’’ means
HR 2 RFS
a corporation that meets the requirements of section
234(b)(2).
(24) RESIDENT PROGRAM.—The term ‘‘resident
programs and services’’ means programs and serv-
ices for families residing in public housing develop-
ments. Such term may include (A) the development
and maintenance of resident organizations which
participate in the management of public housing de-
velopments, (B) the training of residents to manage
and operate the public housing development and the
utilization 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
community shall be used for the provision of such
services.
HR 2 RFS
(25) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Housing and Urban Develop-
ment.
(26) 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, and any other
territory or possession of the United States and In-
dian tribes.
(27) 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, as determined by
the Secretary with adjustments for smaller and larg-
er families, except that the Secretary 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 public housing agency’s
findings that such variations are necessary because
of unusually high or low family incomes.
SEC. 103. ORGANIZATION OF PUBLIC HOUSING AGENCIES.
(a) REQUIREMENTS.—For purposes of this Act, the
terms ‘‘public housing agency’’ and ‘‘agency’’ mean any
entity that—
HR 2 RFS
(1) is—
(A) a public housing agency that was au-
thorized under the United States Housing Act
of 1937 to engage in or assist in the develop-
ment or operation 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;
(C) an entity authorized by State law to
administer 
choice-based 
housing 
assistance
under title III; or
(D) an entity selected by the Secretary,
pursuant to subtitle D of title V, to manage
housing; and
(2) complies with the requirements under sub-
section (b).
The term does not include any entity that is an Indian
housing authority for purposes of the United States Hous-
ing Act of 1937 (as in effect before the effectiveness of
the Native American Housing Assistance and Self-Deter-
mination Act of 1996) or a tribally designated housing en-
tity, as such term is defined in section 4 of the Native
HR 2 RFS
American Housing Assistance and Self-Determination Act
of 1996.
(b) GOVERNANCE.—
(1) BOARD OF DIRECTORS.—Each public hous-
ing agency shall have a board of directors 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 person’s residency in
a public housing development or status as an as-
sisted family under title III.
(2) RESIDENT MEMBERSHIP.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), in localities in which a pub-
lic housing agency is governed by a board of di-
rectors or other similar body, the board or body
shall include not less than 1 member who is an
elected public housing resident member (as such
term is defined in paragraph (5)).
(B) EXCEPTIONS.—The requirement in
subparagraph (A) with respect to elected public
housing resident members shall not apply to—
(i) any State or local governing body
that serves as a public housing agency for
purposes of this Act and whose responsibil-
ities include substantial activities other
HR 2 RFS
than acting as the public housing agency,
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 public
housing agency for purposes of this Act;
(ii) any public housing agency that
owns or operates less than 250 public
housing dwelling units (including any
agency that does not own or operate public
housing); or
(iii) any public housing agency in a
State that requires the members of the
board of directors or other similar body of
a public housing agency to be salaried and
to serve on a full-time basis.
(3) FULL PARTICIPATION.—No public housing
agency 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 because of the mem-
ber’s status as a resident member.
(4) CONFLICTS OF INTEREST.—The Secretary
shall establish guidelines to prevent conflicts of in-
HR 2 RFS
terest on the part of members of the board or direc-
tors or governing body of a public housing agency.
(5) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
(A) ELECTED PUBLIC HOUSING RESIDENT
MEMBER.—The term ‘‘elected public housing
resident member’’ means, with respect to the
public housing agency involved, an individual
who is a resident member of the board of direc-
tors (or other similar governing body of the
agency) by reason of election to such position
pursuant to an election—
(i) in which eligibility for candidacy in
such election is limited to individuals
who—
(I) maintain their principal resi-
dence in a dwelling unit of public
housing administered or assisted by
the agency; and
(II) have not been convicted of a
felony;
(ii) in which only residents of dwelling
units of public housing administered by the
agency may vote; and
HR 2 RFS
(iii) that is conducted in accordance
with standards and procedures for such
election, which shall be established by the
Secretary.
(B) RESIDENT MEMBER.—The term ‘‘resi-
dent member’’ means a member of the board of
directors or other similar governing body of a
public housing agency who is a resident of a
public housing dwelling unit owned, adminis-
tered, or assisted by the agency or is a member
of an assisted family (as such term is defined
in section 371) assisted by the agency.
(c) ESTABLISHMENT OF POLICIES.—Any rules, regu-
lations, policies, standards, and procedures necessary to
implement policies required under section 106 to be in-
cluded in the local housing management plan for a public
housing agency shall be approved by the board of directors
or similar governing body of the agency and shall be pub-
licly available for review upon request.
SEC. 104. DETERMINATION OF ADJUSTED INCOME AND ME-
DIAN INCOME.
(a) ADJUSTED INCOME.—For purposes of this Act,
the term ‘‘adjusted income’’ means, with respect to a fam-
ily, the difference between the income of the members of
the family residing in a dwelling unit or the persons on
HR 2 RFS
a lease and the amount of any income exclusions for the
family under subsections (b) and (c), as determined by the
public housing agency.
(b) MANDATORY EXCLUSIONS FROM INCOME.—In
determining adjusted income, a public housing agency
shall exclude from the annual income of a family the fol-
lowing 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-
ceeded by the sum of—
(A) unreimbursed medical expenses of any
elderly family;
(B) unreimbursed medical expenses of any
nonelderly family, except that this subpara-
graph shall apply only to the extent approved in
appropriation Acts; and
(C) 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.
HR 2 RFS
(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.
(4) MINORS, STUDENTS, AND PERSONS WITH
DISABILITIES.—$480 for each member of the family
residing in the household (other than the head of the
household or his or her spouse) who is less than 18
years of age or is attending school or vocational
training on a full-time basis, or who is 18 years of
age or older and is a person with disabilities.
(5) CHILD SUPPORT PAYMENTS.—Any payment
made by a member of the family for the support and
maintenance of any child who does not reside in the
household, except that the amount excluded under
this paragraph may not exceed $480 for each child
for whom such payment is made.
(6) EARNED INCOME OF MINORS.—The amount
of any earned income of a member of the family who
is not—
(A) 18 years of age or older; and
(B) the head of the household (or the
spouse of the head of the household).
(c) PERMISSIVE EXCLUSIONS FROM INCOME.—In de-
termining adjusted income, a public housing agency may,
HR 2 RFS
in the discretion of the agency, establish exclusions from
the annual income of a family. Such exclusions may in-
clude the following amounts:
(1) EXCESSIVE TRAVEL EXPENSES.—Excessive
travel expenses in an amount not to exceed $25 per
family per week, for employment- or education-relat-
ed travel.
(2) EARNED
INCOME.—An amount of any
earned income of the family, established at the dis-
cretion of the public housing agency, 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.
(3) OTHERS.—Such other amounts for other
purposes, as the public housing agency may estab-
lish.
(d) MEDIAN INCOME.—In determining median in-
comes (of persons, families, or households) for an area or
establishing any ceilings or limits based on income under
HR 2 RFS
this Act, the Secretary shall determine or establish area
median incomes and income ceilings and limits for West-
chester and Rockland Counties, in the State of New York,
as if each such county were an area not contained within
the metropolitan statistical area in which it is located. In
determining such area median incomes or establishing
such income ceilings or limits for the portion of such met-
ropolitan statistical area that does not include Westchester
or Rockland Counties, the Secretary shall determine or es-
tablish area median incomes and income ceilings and lim-
its as if such portion included Westchester and Rockland
Counties.
(e) AVAILABILITY OF INCOME MATCHING INFORMA-
TION.—
(1) DISCLOSURE
TO
PHA.—A public housing
agency shall require any family described in para-
graph (2) who receives information regarding in-
come, earnings, wages, or unemployment compensa-
tion from the Department of Housing and Urban
Development pursuant to income verification proce-
dures of the Department to disclose such informa-
tion, upon receipt of the information, to the public
housing agency that owns or operates the public
housing dwelling unit in which such family resides or
HR 2 RFS
that provides the housing assistance on behalf of
such family, as applicable.
(2) APPLICABILITY
TO
FAMILIES
RECEIVING
PUBLIC HOUSING OR CHOICE-BASED HOUSING AS-
SISTANCE.—A family described in this paragraph is
a family that resides in a dwelling unit—
(A) that is a public housing dwelling unit;
or
(B) for which housing assistance is pro-
vided under title III (or under the program for
tenant-based assistance under section 8 of the
United States Housing Act of 1937 (as in effect
before the effective date of the repeal under sec-
tion 601(b) of this Act)).
(3) PROTECTION OF APPLICANTS AND PARTICI-
PANTS.—Section 904 of the Stewart B. McKinney
Homeless Assistance Amendments Act of 1988 (42
U.S.C. 3544) is amended—
(A) in subsection (b)—
(i) in paragraph (2), by striking
‘‘and’’ at the end;
(iii) in paragraph (3), by striking the
period at the end and inserting ‘‘; and’’;
and
HR 2 RFS
(ii) in paragraph (3)—
(I) in subparagraph (A), by in-
serting ‘‘, section 104(e)(1) of the
Housing Opportunity and Responsibil-
ity Act of 1997,’’ after ‘‘Social Secu-
rity Act’’; and
(II) in subparagraph (A), by in-
serting ‘‘or agreement, as applicable,’’
after ‘‘consent’’;
(III) in subparagraph (B), by in-
serting ‘‘section 104(e)(1) of the
Housing Opportunity and Responsibil-
ity Act of 1997,’’ after ‘‘Social Secu-
rity Act,’’; and
(IV) in subparagraph (B), by insert-
ing ‘‘ such section 104(e)(1),’’ after ‘‘such
section 303(i),’’ each place it appears.
SEC. 105. COMMUNITY WORK AND FAMILY SELF-SUFFI-
CIENCY REQUIREMENTS.
(a) COMMUNITY WORK REQUIREMENT.—
(1) IN GENERAL.—Except as provided in para-
graph (3), each public housing agency shall require,
as a condition of occupancy of a public housing
dwelling unit by a family and of providing housing
assistance under title III on behalf of a family, that
HR 2 RFS
each adult member of the family shall contribute not
less than 8 hours of work per month (not including
political activities) within the community in which
the family resides, which may include work per-
formed on locations not owned by the public housing
agency.
(2) EMPLOYMENT
STATUS
AND
LIABILITY.—
The requirement under paragraph (1) may not be
construed to establish any employment relationship
between the public housing agency and the member
of the family subject to the work requirement under
such paragraph or to create any responsibility, duty,
or liability on the part of the public housing agency
for actions arising out of the work done by the mem-
ber of the family to comply with the requirement, ex-
cept to the extent that the member of the family is
fulfilling the requirement by working directly for
such public housing agency.
(3) EXEMPTIONS.—A public housing agency
shall provide for the exemption, from the applicabil-
ity of the requirement under paragraph (1), of each
individual who is—
(A) an elderly person;
(B) a person with disabilities;
HR 2 RFS
(C) working, attending school or vocational
training, or otherwise complying with work re-
quirements applicable under other public assist-
ance programs (as determined by the agencies
or organizations responsible for administering
such programs); or
(D) otherwise physically impaired to the
extent that they are unable to comply with the
requirement, as certified by a doctor.
(b) REQUIREMENT REGARDING TARGET DATE FOR
TRANSITION OUT OF ASSISTED HOUSING.—
(1) IN GENERAL.—Each public housing agency
shall require, as a condition of occupancy of a public
housing dwelling unit by a family and of providing
housing assistance under title III on behalf of a
family, that the family and the agency enter into an
agreement 
(included, 
pursuant 
to 
subsection
(d)(2)(C), as a term of an agreement under sub-
section (d)) establishing a target date by which the
family intends to graduate from, terminate tenancy
in, or no longer receive public housing or housing as-
sistance under title III.
(2) RIGHTS OF OCCUPANCY.—This subsection
may not be construed (nor may any provision of sub-
section (d) or (e)) to create a right on the part of
HR 2 RFS
any public housing agency to evict or terminate as-
sistance for a family solely on the basis of any fail-
ure of the family to comply with the target date es-
tablished pursuant to paragraph (1).
(3) FACTORS.—In establishing a target date
pursuant to paragraph (1) for a family that receives
benefits for welfare or public assistance from a State
or other public agency under a program that limits
the duration during which such benefits may be re-
ceived, the public housing agency and the family
may take into consideration such time limit. This
section may not be construed to require any public
housing agency to adopt any such time limit on the
duration of welfare or public assistance benefits as
the target date pursuant to paragraph (1) for a resi-
dent.
(4) EXEMPTIONS.—A public housing agency
shall provide for the exemption, from the applicabil-
ity of the requirements under paragraph (1), of each
individual who is—
(A) an elderly person;
(B) a person with disabilities;
(C) working, attending school or vocational
training, or otherwise complying with work re-
quirements applicable under other public assist-
HR 2 RFS
ance programs (as determined by the agencies
or organizations responsible for administering
such programs); or
(D) otherwise physically impaired to the
extent that they are unable to comply with the
requirement, as certified by a doctor.
(c) TREATMENT OF INCOME CHANGES RESULTING
FROM WELFARE PROGRAM REQUIREMENTS.—
(1) COVERED FAMILY.—For purposes of this
subsection, the term ‘‘covered family’’ means a fam-
ily that (A) receives benefits for welfare or public as-
sistance from a State or other public agency under
a program for which the Federal, State, or local law
relating to the program requires, as a condition of
eligibility for assistance under the program, partici-
pation of a member of the family in an economic
self-sufficiency program, and (B) resides in a public
housing dwelling unit or is provided housing assist-
ance under title III.
(2) DECREASES IN INCOME FOR FAILURE TO
COMPLY.—Notwithstanding the provisions of sec-
tions 225 and 322 (relating to family rental con-
tributions), if the welfare or public assistance bene-
fits of a covered family are reduced under a Federal,
State, or local law regarding such an assistance pro-
HR 2 RFS
gram because of any failure of any member of the
family to comply with the conditions under the as-
sistance program requiring participation in an eco-
nomic self-sufficiency program, the amount required
to be paid by the family as a monthly contribution
toward rent may not be decreased, during the period
of the reduction, as a result of any decrease in the
income of the family (to the extent that the decrease
in income is a result of the benefits reduction).
(3) EFFECT OF FRAUD.—Notwithstanding the
provisions of sections 225 and 322 (relating to fam-
ily rental contributions), if the welfare or public as-
sistance benefits of a covered family are reduced be-
cause of an act of fraud by a member of the family
under the law or program, the amount required to
be paid by the covered family as a monthly contribu-
tion toward rent may not be decreased, during the
period of the reduction, as a result of any decrease
in the income of the family (to the extent that the
decrease in income is a result of the benefits reduc-
tion).
(4) NOTICE.—Paragraphs (2) and (3) shall not
apply to any covered family before the public hous-
ing agency providing assistance under this Act on
behalf of the family obtains written notification from
HR 2 RFS
the relevant welfare or public assistance agency
specifying that the family’s benefits have been re-
duced because of noncompliance with economic self-
sufficiency program requirements or fraud and the
level of such reduction.
(5) OCCUPANCY RIGHTS.—This subsection may
not be construed to authorize any public housing
agency to establish any time limit on tenancy in a
public housing dwelling unit or on receipt of housing
assistance under title III.
(6) REVIEW.—Any covered family residing in
public housing that is affected by the operation of
this subsection shall have the right to review the de-
termination under this subsection through the ad-
ministrative grievance procedure established pursu-
ant to section 110 for the public housing agency.
(7) COOPERATION AGREEMENTS FOR ECONOMIC
SELF-SUFFICIENCY ACTIVITIES.—
(A) REQUIREMENT.—A public housing
agency providing public housing dwelling units
or housing assistance under title III for covered
families shall make its best efforts to enter into
such cooperation agreements, with State, local,
and other agencies providing assistance to cov-
ered families under welfare or public assistance
HR 2 RFS
programs, as may be necessary, to provide for
such agencies to transfer information to facili-
tate administration of subsection (a) and para-
graphs (2), (3), and (4) of this subsection, and
other information regarding rents, income, and
assistance that may assist a public housing
agency or welfare or public assistance agency in
carrying out its functions.
(B) CONTENTS.—A public housing agency
shall seek to include in a cooperation agreement
under this paragraph requirements and provi-
sions designed to target assistance under wel-
fare and public assistance programs to families
residing in public housing developments and re-
ceiving choice-based assistance under title III,
which may include providing for self-sufficiency
services within such housing, providing for serv-
ices designed to meet the unique employment-
related needs of residents of such housing and
recipients of such assistance, providing for
placement of workfare positions on-site in such
housing, and such other elements as may be ap-
propriate.
(C) CONFIDENTIALITY.—This paragraph
may not be construed to authorize any release
HR 2 RFS
of information that is prohibited by, or in con-
travention of, any other provision of Federal,
State, or local law.
(d) COMMUNITY WORK AND FAMILY SELF-SUFFI-
CIENCY AGREEMENTS.—
(1) IN
GENERAL.—A public housing agency
shall enter into a community work and family self-
sufficiency agreement under this subsection with
each adult member and head of household of each
family who is to reside in a dwelling unit in public
housing of the agency and each family on behalf of
whom the agency will provide housing assistance
under title III. Under the agreement the family shall
agree that, as a condition of occupancy of the public
housing dwelling unit or of receiving such housing
assistance, the family will comply with the terms of
the agreement.
(2) TERMS.—An agreement under this sub-
section shall include the following:
(A) Terms designed to encourage and fa-
cilitate the economic self-sufficiency of the as-
sisted family entering into the agreement and
the graduation of the family from assisted
housing to unassisted housing.
HR 2 RFS
(B) Notice of the requirements under sub-
section (a) (relating to community work) and
the conditions imposed by, and exemptions
from, such requirement.
(C) The target date agreed upon by the
family pursuant to subsection (b) for gradua-
tion from, termination of tenancy in, or termi-
nation of receipt of public housing or housing
assistance under title III.
(D) Terms providing for any resources,
services, and assistance relating to self-suffi-
ciency that will be made available to the family,
including any assistance to be made available
pursuant to subsection (c)(7)(B) under a co-
operation agreement entered into under sub-
section (c)(7).
(E) Notice of the provisions of paragraphs
(2) through (7) of subsection (c) (relating to ef-
fect of changes in income on rent and assisted
families rights under such circumstances).
(e) LEASE PROVISIONS.—A public housing agency
shall incorporate into leases under sections 226, and into
any agreements for the provision of choice-based assist-
ance under title III on behalf of a family—
HR 2 RFS
(1) a provision requiring compliance with the
requirement under subsection (a); and
(2) provisions incorporating the conditions
under subsection (c).
(f) TREATMENT OF INCOME.—Notwithstanding any
other provision of this section, in determining the income
or tenancy of a family who resides in public housing or
receives housing assistance under title III, a public hous-
ing agency shall consider any decrease in the income of
a family that results from the reduction of any welfare
or public assistance benefits received by the family under
any Federal, State, or local law regarding a program for
such assistance if the family (or a member thereof, as ap-
plicable) has complied with the conditions for receiving
such assistance and is unable to obtain employment not-
withstanding such compliance.
(g) DEFINITION.—For purposes of this section, the
term ‘‘economic self-sufficiency program’’ means any pro-
gram designed to encourage, assist, train, or facilitate the
economic independence of participants and their families
or to provide work for participants, including programs
for job training, employment counseling, work placement,
basic skills training, education, workfare, financial or
household management, apprenticeship, or other activities
as the Secretary may provide.
HR 2 RFS
SEC. 106. LOCAL HOUSING MANAGEMENT PLANS.
(a) 5-YEAR PLAN.—The Secretary shall provide for
each public housing agency to submit to the Secretary,
once every 5 years, a plan under this subsection for the
agency covering a period consisting of 5 fiscal years. Each
such plan shall contain, with respect to the 5-year period
covered by the plan, the following information:
(1) STATEMENT OF MISSION.—A statement of
the mission of the agency for serving the needs of
low-income families in the jurisdiction of the agency
during such period.
(2) GOALS AND OBJECTIVES.—A statement of
the goals and objectives of the agency that will en-
able the agency to serve the needs identified pursu-
ant to paragraph (1) during such period.
(3) CAPITAL IMPROVEMENT OVERVIEW.—If the
agency will provide capital improvements for public
housing developments during such period, an over-
view of such improvements, the rationale for such
improvements, and an analysis of how such improve-
ments will enable the agency to meet its goals, objec-
tives, and mission.
The first 5-year plan under this subsection for a public
housing agency shall be submitted for the 5-year period
beginning with the first fiscal year for which the agency
receives assistance under this Act.
HR 2 RFS
(b) ANNUAL PLAN.—The Secretary shall provide for
each public housing agency to submit to the Secretary a
local housing management plan under this section for each
fiscal year that contains the information required under
subsection (d). For each fiscal year after the initial sub-
mission of a plan under this section by a public housing
agency, the agency may comply with requirements for sub-
mission of a plan under this subsection by submitting an
update of the plan for the fiscal year.
(c) PROCEDURES.—The Secretary shall establish re-
quirements and procedures for submission and review of
plans, including requirements for timing and form of sub-
mission, and for the contents of such plans. Such proce-
dures shall provide that a public housing agency—
(1) shall, in conjunction with the relevant State
or unit of general local government, establish proce-
dures to ensure that the plan under this section is
consistent with the applicable comprehensive housing
affordability strategy (or any consolidated plan in-
corporating such strategy) for the jurisdiction in
which the public housing agency is located, in ac-
cordance with title I of the Cranston-Gonzalez Na-
tional Affordable Housing Act; and
(2) may, at the option of the agency, submit a
plan under this section together with, or as part of,
HR 2 RFS
the comprehensive housing affordability strategy (or
any consolidated plan incorporating such strategy)
for the relevant jurisdiction, and for concomitant re-
view of such plans submitted together.
(d) CONTENTS.—An annual local housing manage-
ment plan under this section for a public housing agency
shall contain the following information relating to the up-
coming fiscal year for which the assistance under this Act
is to be made available:
(1) NEEDS.—A statement of the housing needs
of low-income and very low-income families residing
in the community served by the agency, and of other
low-income families on the waiting list of the agency
(including the housing needs of elderly families and
disabled families), and the means by which the agen-
cy intends, to the maximum extent practicable, to
address such needs.
(2) FINANCIAL RESOURCES.—A statement of fi-
nancial resources available for the agency the
planned uses of such resources that includes—
(A) a description of the financial resources
available to the agency;
(B) the uses to which such resources will
be committed, including all proposed eligible
and required activities under section 203 and
HR 2 RFS
housing assistance to be provided under title
III;
(C) an estimate of the costs of operation
and the market rental value of each public
housing development; and
(D) a specific description, based on popu-
lation and demographic data, of the unmet af-
fordable housing needs of families in the com-
munity served by the agency having incomes
not exceeding 30 percent of the area median in-
come and a statement of how the agency will
expend grant amounts received under this Act
to meet the housing needs of such families.
(3) POPULATION SERVED.—A statement of the
policies of the agency 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 and proce-
dures by which eligibility and income will be de-
termined and verified;
(B) the requirements for selection and ad-
missions of eligible families for such units and
assistance, including any preferences and proce-
HR 2 RFS
dures established by the agency and any out-
reach efforts;
(C) the procedures for assignment of fami-
lies admitted to dwelling units owned, leased,
managed, operated, or assisted by the agency;
(D) any standards and requirements for
occupancy of public housing dwelling units and
units assisted under title III, including resident
screening policies, standard lease provisions,
conditions for continued occupancy, termination
of tenancy, eviction, and conditions for termi-
nation of housing assistance;
(E) the procedures for maintaining waiting
lists for admissions to public housing develop-
ments of the agency, which may include a sys-
tem of site-based waiting lists under section
224(c);
(F) the criteria for providing and denying
housing assistance under title III to families
moving into the jurisdiction of the agency;
(G) the procedures for coordination with
entities providing assistance to homeless fami-
lies in the jurisdiction of the agency; and
(H) the fair housing policy of the agency.
HR 2 RFS
(4) RENT
DETERMINATION.—A statement of
the policies of the agency governing rents charged
for public housing dwelling units and rental con-
tributions of assisted families under title III and the
system used by the agency to ensure that such rents
comply with the requirements of this Act.
(5) OPERATION AND MANAGEMENT.—A state-
ment of the rules, standards, and policies of the pub-
lic housing agency governing maintenance and man-
agement of housing owned and operated by the
agency, and management of the public housing agen-
cy and programs of the agency, including—
(A) a description of the manner in which
the agency is organized (including any consortia
or joint ventures) and staffed to perform the
duties and functions of the public housing agen-
cy and to administer the operating fund dis-
tributions of the agency;
(B) policies relating to the rental of dwell-
ing units, including policies designed to reduce
vacancies;
(C) housing quality standards in effect
pursuant to sections 232 and 328 and any cer-
tifications required under such sections;
HR 2 RFS
(D) emergency and disaster plans for pub-
lic housing;
(E) priorities and improvements for man-
agement of public housing, including initiatives
to control costs; and
(F) policies of the agency requiring the
loss or termination of housing assistance and
tenancy under sections 641 and 642 (relating to
occupancy standards for federally assisted hous-
ing).
(6) GRIEVANCE PROCEDURE.—A statement of
the grievance procedures of the agency under section
110.
(7) CAPITAL IMPROVEMENTS.—With respect to
public housing developments owned or operated by
the agency, a plan describing the capital improve-
ments necessary to ensure long-term physical and
social viability of the developments.
(8) DEMOLITION AND DISPOSITION.—With re-
spect to public housing developments owned or oper-
ated by the agency—
(A) a description of any such housing to be
demolished or disposed of under subtitle E of
title II; and
HR 2 RFS
(B) a timetable for such demolition or dis-
position.
(9) DESIGNATION OF HOUSING FOR ELDERLY
AND DISABLED FAMILIES.—With respect to public
housing developments owned or operated by the
agency, a description of any developments (or por-
tions thereof) that the agency has designated or will
designate for occupancy by elderly and disabled fam-
ilies in accordance with section 227 and any infor-
mation required under section 227(d) for such des-
ignated developments.
(10) CONVERSION OF PUBLIC HOUSING.—With
respect to public housing owned or operated by the
agency, a description of any building or buildings
that the agency is required, under section 203(b), to
convert to housing assistance under title III or that
the agency voluntarily converts, an analysis of such
buildings required under such section for conversion,
and a statement of the amount of grant amounts
under title II to be used for rental assistance or
other housing assistance.
(11) HOMEOWNERSHIP ACTIVITIES.—A descrip-
tion of—
HR 2 RFS
(A) any homeownership programs of the
agency under subtitle D of title II or section
329 for the agency;
(B) the requirements and assistance avail-
able under the programs described pursuant to
subparagraph (A); and
(C) the annual goals of the agency for ad-
ditional availability of homeownership units.
(12) ECONOMIC
SELF-SUFFICIENCY
AND
CO-
ORDINATION
WITH
WELFARE
AND
OTHER
APPRO-
PRIATE AGENCIES.—A description of—
(A) policies relating to services and amen-
ities provided or offered to assisted families, in-
cluding the provision of service coordinators
and services designed for certain populations
(such as the elderly and disabled);
(B) how the agency will coordinate with
State, local, and other agencies providing assist-
ance to families participating in welfare or pub-
lic assistance programs;
(C) how the agency will implement and ad-
minister section 105; and
(D) any policies, programs, plans, and ac-
tivities of the agency for the enhancement of
the economic and social self-sufficiency of resi-
HR 2 RFS
dents assisted by the programs of the agency,
including rent structures to encourage self-suf-
ficiency.
(13) SAFETY AND CRIME PREVENTION.—A plan
established by the public housing agency, which shall
be subject to the following requirements:
(A) SAFETY
MEASURES.—The plan shall
provide, on a development-by-development basis,
for measures to ensure the safety of public
housing residents.
(B) ESTABLISHMENT.—The plan shall be
established, with respect to each development,
in consultation with the police officer or officers
in command for the precinct in which the devel-
opment is located.
(C) CONTENT.—The plan shall describe
the need for measures to ensure the safety of
public housing residents and for crime preven-
tion measures, describe any such activities con-
ducted, or to be conducted, by the agency, and
provide for coordination between the public
housing agency and the appropriate police pre-
cincts for carrying out such measures and ac-
tivities.
HR 2 RFS
(D) SECRETARIAL
ACTION.—If the Sec-
retary determines, at any time, that the secu-
rity needs of a development are not being ade-
quately addressed by the plan, or that the local
police precinct is not complying with the plan,
the Secretary may mediate between the public
housing agency and the local precinct to resolve
any issues of conflict. If after such mediation
has occurred and the Secretary determines that
the security needs of the development are not
adequately addressed, the Secretary may re-
quire the public housing agency to submit an
amended plan.
(14) ANNUAL AUDIT.—The results of the most
recent fiscal year audit of the agency required under
section 541(b).
(15) TROUBLED AGENCIES.—Such other addi-
tional information as the Secretary may determine
to be appropriate for each public housing agency
that is designated—
(A) under section 533(c) as at risk of be-
coming troubled; or
(B) under section 533(a) as troubled.
(16) ASSET
MANAGEMENT.—A statement of
how the agency will carry out its asset management
HR 2 RFS
functions with respect to the public housing inven-
tory of the agency, including how the agency will
plan for the long-term operating, capital investment,
rehabilitation, modernization, disposition, and other
needs for such inventory.
(e) CITIZEN PARTICIPATION.—
(1) PUBLICATION OF NOTICE.—Not later than
45 days before the date of a hearing conducted
under paragraph (2) by the governing body of a
public housing agency, the agency shall—
(A) publish a notice informing the public
that the proposed local housing management
plan or amendment is available for inspection at
the principal office of the public housing agency
during normal business hours and make the
plan or amendment so available for inspection
during such period; and
(B) publish a notice informing the public
that a public hearing will be conducted to dis-
cuss the local housing management plan and to
invite public comment regarding that plan.
(2) PUBLIC
HEARING.—Before submitting a
plan under this section or a significant amendment
under section 107(f) to a plan, a public housing
agency shall, at a location that is convenient to resi-
HR 2 RFS
dents, conduct a public hearing, as provided in the
notice published under paragraph (1), regarding the
public housing plan or the amendment of the agen-
cy.
(3) CONSIDERATION OF COMMENTS.—A public
housing agency shall consider any comments or
views made available pursuant to paragraphs (1)
and (2) 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.
(4) ADOPTION OF PLAN.—After conducting the
public hearing under paragraph (2) and considering
public comments in accordance with paragraph (3),
the public housing agency shall make any appro-
priate changes to the local housing management
plan or amendment and shall—
(A) adopt the local housing management
plan;
(B) submit the plan to any local elected of-
ficial or officials responsible for appointing the
members of the board of directors (or other
similar governing body) of the public housing
agency for review and approval under sub-
section (f);
HR 2 RFS
(C) submit the plan to the Secretary in ac-
cordance with this section; and
(D) make the submitted plan or amend-
ment publicly available.
(f) LOCAL REVIEW.—The public housing agency shall
submit a plan under this subsection to any local elected
official or officials responsible for appointing the members
of the board of directors (or other similar governing body)
of the public housing agency for review and approval for
a 45-day period beginning on the date that the plan is
submitted to such local official or officials (which period
may run concurrently with any period under subsection
(e) for public comment). If the local official or officials
responsible under this subsection do not act within 45
days of submission of the plan, the plan shall be consid-
ered approved. If the local official or officials responsible
under this subsection reject the public housing agency’s
plan, they shall return the plan with their recommended
changes to the agency within 5 days of their disapproval.
The agency shall resubmit an updated plan to the local
official or officials within 30 days of receiving the objec-
tions, If the local official or officials again reject the plan,
the resubmitted plan, together with the local official’s ob-
jections, shall be submitted to the Secretary for approval.
HR 2 RFS
(g) PLANS FOR SMALL PHA’S AND PHA’S ADMIN-
ISTERING ONLY RENTAL ASSISTANCE.—The Secretary
shall establish requirements for submission of plans under
this section and the information to be included in such
plans applicable to public housing agencies that own or
operate less than 250 public housing dwelling units and
shall establish requirements for such submission and in-
formation applicable to agencies that only administer
housing assistance under title III (and do not own or oper-
ate public housing). Such requirements shall waive any re-
quirements under this section that the Secretary deter-
mines are burdensome or unnecessary for such agencies.
SEC. 107. REVIEW OF PLANS.
(a) REVIEW AND NOTICE.—
(1) REVIEW.—The Secretary shall conduct a
limited review of each local housing management
plan submitted to the Secretary to ensure that the
plan is complete and complies with the requirements
of section 106. The Secretary shall have the discre-
tion to review a plan to the extent that the Secretary
considers review is necessary.
(2) NOTICE.—The Secretary shall notify each
public housing agency submitting a plan whether the
plan complies with such requirements not later than
75 days after receiving the plan. If the Secretary
HR 2 RFS
(d) TREATMENT
OF EXISTING PLANS.—Notwith-
standing any other provision of this title, a public housing
agency shall be considered to have submitted a plan under
this section if the agency has submitted to the Secretary
a comprehensive plan under section 14(e) of the United
States Housing Act of 1937 (as in effect immediately be-
fore the effective date of the repeal under section 601(b)
of this Act) or under the comprehensive improvement as-
sistance program under such section 14, and the Secretary
has approved such plan, before January 1, 1997. The Sec-
retary 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 106.
(e) ACTIONS TO CHANGE PLAN.—A public housing
agency that has submitted a plan under section 106 may
change actions or policies described in the plan before sub-
mission and review of the plan of the agency for the next
fiscal year only if—
(1) in the case of costly or nonroutine changes,
the agency submits to the Secretary an amendment
to the plan under subsection (f) which is reviewed in
accordance with such subsection; or
(2) in the case of inexpensive or routine
changes, the agency describes such changes in such
HR 2 RFS
local housing management plan for the next fiscal
year.
(f) AMENDMENTS TO PLAN.—
(1) IN GENERAL.—During the annual or 5-year
period covered by the plan for a public housing
agency, the agency may submit 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 106 and notify each pub-
lic housing agency submitting the amendment
whether the plan, as amended, complies with such
requirements not later than 30 days after receiving
the amendment. If the Secretary determines that a
plan, as amended, does not comply with the require-
ments under section 106, such notice shall indicate
the reasons for the noncompliance and any modifica-
tions necessary for the plan to meet the require-
ments under section 106. If the Secretary does not
notify the public housing agency as required under
this paragraph, the plan, as amended, shall be con-
sidered, for purposes of this section, to comply with
the requirements under section 106.
HR 2 RFS
(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 106
only if—
(A) the plan, as amended, would be subject
to a determination of noncompliance in accord-
ance with the provisions of subsection (c);
(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 in the amendment; or
(C) the Secretary determines that the plan,
as amended, violates the purposes of this Act
because it fails to provide housing that will be
viable on a long-term basis at a reasonable cost.
(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 public housing
agency that extends the time for performance of ac-
tivities assisted with amounts provided under this
HR 2 RFS
title fails to comply with the requirements under sec-
tion 106 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. 108. REPORTING REQUIREMENTS.
(a) PERFORMANCE
AND EVALUATION REPORT.—
Each public housing agency shall annually submit to the
Secretary, on a date determined by the Secretary, a per-
formance and evaluation report concerning the use of
funds made available under this Act. The report of the
public housing agency shall include an assessment by the
agency of the relationship of such use of funds made avail-
able under this Act, as well as the use of other funds,
to the needs identified in the local housing management
plan and to the purposes of this Act. The public housing
agency shall certify that the report was available for re-
view and comment by affected tenants prior to its submis-
sion to the Secretary.
(b) REVIEW
OF PHA’S.—The Secretary shall, at
least on an annual basis, make such reviews as may be
necessary or appropriate to determine whether each public
housing agency receiving assistance under this section—
(1) has carried out its activities under this Act
in a timely manner and in accordance with its local
housing management plan; and
HR 2 RFS
(2) has a continuing capacity to carry out its
local housing management plan in a timely manner.
(c) RECORDS.—Each public housing agency shall col-
lect, maintain, and submit to the Secretary such data and
other program records as the Secretary may require, in
such form and in accordance with such schedule as the
Secretary may establish.
SEC. 109. PET OWNERSHIP.
Pet ownership in housing assisted under this Act that
is federally assisted rental housing (as such term is de-
fined in section 227 of the Housing and Urban-Rural Re-
covery Act of 1983) shall be governed by the provisions
of section 227 of such Act.
SEC. 110. ADMINISTRATIVE GRIEVANCE PROCEDURE.
(a) REQUIREMENTS.—Each public housing agency
receiving assistance under this Act shall establish and im-
plement an administrative grievance procedure under
which residents of public housing will—
(1) be advised of the specific grounds of any
proposed adverse public housing agency action;
(2) have an opportunity for a hearing before an
impartial party (including appropriate employees of
the public housing agency) upon timely request with-
in a reasonable period of time;
HR 2 RFS
(3) have an opportunity to examine any docu-
ments or records or regulations related to the pro-
posed action;
(4) be entitled to be represented by another
person of their choice at any hearing;
(5) be entitled to ask questions of witnesses and
have others make statements on their behalf; and
(6) be entitled to receive a written decision by
the public housing agency on the proposed action.
(b) EXCLUSION FROM ADMINISTRATIVE PROCEDURE
OF GRIEVANCES CONCERNING EVICTIONS FROM PUBLIC
HOUSING INVOLVING HEALTH, SAFETY, OR PEACEFUL
ENJOYMENT.—A public housing agency may exclude from
its procedure established under subsection (a) any griev-
ance, in any jurisdiction which requires that prior to evic-
tion, a tenant be given a hearing in court, which the Sec-
retary determines provides the basic elements of due proc-
ess (which the Secretary shall establish by rule under sec-
tion 553 of title 5, United States Code), concerning an
eviction from or termination of tenancy in public housing
that involves any activity that threatens the health, safety,
or right to peaceful enjoyment of the premises of other
tenants or employees of the public housing agency or any
drug-related criminal activity on or off such premises. In
the case of any eviction from or termination of tenancy
HR 2 RFS
in public housing not described in the preceding sentence,
each of the following provisions shall apply:
(1) Such eviction or termination shall be sub-
ject to an administrative grievance procedure if the
tenant so evicted or terminated requests a hearing
under such procedure not later than five days after
service of notice of such eviction or termination.
(2) The public housing agency shall take final
action regarding a grievance under paragraph (1)
not later than thirty days after such notice is served.
(3) If the public housing agency fails to provide
a hearing under the grievance procedure pursuant to
a request under paragraph (1) and take final action
regarding the grievance before the expiration of the
30-day period under paragraph (2), the notice of
eviction or termination shall be considered void and
shall not be given any force or effect.
(4) If a public housing authority takes final ac-
tion on a grievance for any eviction or termination,
the tenant and any member of the tenant’s house-
hold shall not have any right in connection with any
subsequent eviction or termination notice to request
or be afforded any administrative grievance hearing
during the 1-year period beginning upon the date of
the final action.
HR 2 RFS
(c) INAPPLICABILITY
TO CHOICE-BASED RENTAL
HOUSING ASSISTANCE.—This section may not be con-
strued to require any public housing agency to establish
or implement an administrative grievance procedure with
respect to assisted families under title III.
SEC. 111. HEADQUARTERS RESERVE FUND.
(a) ANNUAL RESERVATION OF AMOUNTS.—Notwith-
standing any other provision of law, the Secretary may
retain not more than 2 percent of the amounts appro-
priated to carry out title II for any fiscal year for use
in accordance with this section.
(b) USE OF AMOUNTS.—Any amounts that are re-
tained under subsection (a) or appropriated for use under
this section shall be available for subsequent allocation to
specific areas and communities, and may only be used for
the Department of Housing and Urban Development
and—
(1) for unforeseen housing needs resulting from
natural and other disasters;
(2) for housing needs resulting from emer-
gencies, as determined by the Secretary, other than
such disasters;
(3) for housing needs related to a settlement of
litigation, including settlement of fair housing litiga-
tion; and
HR 2 RFS
(4) for needs related to the Secretary’s actions
under this Act regarding troubled and at-risk public
housing agencies.
Housing needs under this subsection may be met through
the provision of assistance in accordance with title II or
title III, or both.
SEC. 112. LABOR STANDARDS.
(a) IN GENERAL.—Any contract for grants, sale, or
lease pursuant to this Act relating to public housing shall
contain the following provisions:
(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 contractors and persons
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 production of the development involved.
HR 2 RFS
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 relating
to public housing, shall not apply to any individual who—
(1) performs services for which the individual
volunteered;
(2)(A) does not receive compensation for such
services; or
(B) is paid expenses, reasonable benefits, or a
nominal fee for such services; and
(3) is not otherwise employed at any time in the
construction work.
SEC. 113. 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
HR 2 RFS
504 of the Rehabilitation Act of 1973 shall also apply to
any such program or activity.
(b) CIVIL RIGHTS COMPLIANCE.—Each public hous-
ing agency that receives grant amounts under this Act
shall use such amounts and carry out its local housing
management plan approved under section 107 in conform-
ity with title VI of the Civil Rights Act of 1964, the Fair
Housing Act, section 504 of the Rehabilitation Act of
1973, the Age Discrimination Act of 1975, and the Ameri-
cans With Disabilities Act of 1990, and shall affirmatively
further fair housing.
SEC. 114. PROHIBITION ON USE OF FUNDS.
None of the funds made available to the Department
of Housing and Urban Development to carry out this Act,
which are obligated to State or local governments, public
housing agencies, housing finance agencies, or other public
or quasi-public housing agencies, shall be used to indem-
nify contractors or subcontractors of the government or
agency against costs associated with judgments of in-
fringement of intellectual property rights.
SEC. 115. INAPPLICABILITY TO INDIAN HOUSING.
Except as specifically provided by law, the provisions
of this title, and titles II, III, IV, and V shall not apply
to public housing developed or operated pursuant to a con-
tract between the Secretary and an Indian housing author-
HR 2 RFS
ity under the United States Housing Act of 1937 or to
housing assisted under the Native American Housing As-
sistance and Self-Determination Act of 1996.
SEC. 116. REGULATIONS.
(a) IN GENERAL.—The Secretary may issue any reg-
ulations necessary to carry out this Act. This subsection
shall take effect on the date of the enactment of this Act.
(b) RULE OF CONSTRUCTION.—Any failure by the
Secretary to issue any regulations authorized under sub-
section (a) shall not affect the effectiveness of any provi-
sion of this 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 public housing agencies 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 public housing agency for each fiscal year cov-
ered by the contract; and
(2) the agency agrees—
(A) to provide safe, clean, and healthy
housing that is affordable to low-income fami-
lies and services for families in such housing;
HR 2 RFS
(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 local housing
management plan for the agency that complies
with the requirements of section 106;
(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 agency shall be subject to ac-
tions authorized under subtitle D of title V;
(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) SMALL PUBLIC HOUSING AGENCY CAPITAL
GRANT OPTION.—For any fiscal year, upon the request
of the Governor of the State, the Secretary shall make
available directly to the State, from the amounts otherwise
included in the block grants for all public housing agencies
HR 2 RFS
in such State which own or operate less than 100 dwelling
units, 1⁄2 of that portion of such amounts that is derived
from the capital improvement allocations for such agencies
pursuant to section 203(c)(1) or 203(d)(2), as applicable.
The Governor of the State will have the responsibility to
distribute all of such funds, in amounts determined by the
Governor, only to meet the exceptional capital improve-
ment requirements for the various public housing agencies
in the State which operate less than 100 dwelling units:
Provided, however, that for States where Federal funds
provided to the State are subject to appropriation action
by the State legislature, the capital funds made available
to the Governor under this subsection shall be subject to
such appropriation by the State legislature.
(c) MODIFICATION.—Contracts and agreements be-
tween the Secretary and a public housing agency 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 public housing agency involved for
which annual contributions have been pledged;
or
HR 2 RFS
(2) provide for payment of block grant amounts
under this title in an amount exceeding the alloca-
tion for the agency determined under section 204.
Any rule of law contrary to this subsection shall be deemed
inapplicable.
SEC. 202. GRANT AUTHORITY, AMOUNT, AND ELIGIBILITY.
(a) AUTHORITY.—The Secretary shall make block
grants under this title to eligible public housing agencies
in accordance with block grant contracts under section
201.
(b) PERFORMANCE FUNDS.—
(1) IN GENERAL.—The Secretary shall establish
2 funds for the provision of grants to eligible public
housing agencies under this title, as follows:
(A) CAPITAL
FUND.—A capital fund to
provide capital and management improvements
to public housing developments.
(B) OPERATING
FUND.—An operating
fund for public housing operations.
(2) FLEXIBILITY OF FUNDING.—
(A) IN GENERAL.—A public housing agen-
cy may use up to 20 percent of the amounts
from a grant under this title that are allocated
and provided from the capital fund for activities
HR 2 RFS
that are eligible under section 203(a)(2) to be
funded with amounts from the operating fund.
(B) 
FULL
FLEXIBILITY
FOR
SMALL
PHA’S.—In the case of a public housing agency
that owns or operates less than 250 public
housing dwelling units and is (in the determina-
tion of the Secretary) operating and maintain-
ing its public housing in a safe, clean, and
healthy condition, the agency may use amounts
from a grant under this title for any eligible ac-
tivities under section 203(a), regardless of the
fund from which the amounts were allocated
and provided.
(c) AMOUNT OF GRANTS.—The amount of the grant
under this title for a public housing agency for a fiscal
year shall be the amount of the allocation for the agency
determined under section 204, except as otherwise pro-
vided in this title and title V.
(d) ELIGIBILITY.—A public housing agency shall be
an eligible public housing agency with respect to a fiscal
year for purposes of this title only if—
(1) the Secretary has entered into a block grant
contract with the agency;
HR 2 RFS
(2) the agency has submitted a local housing
management plan to the Secretary for such fiscal
year;
(3) the plan has been determined to comply
with the requirements under section 106 and the
Secretary has not notified the agency that the plan
fails to comply with such requirements;
(4) the agency is exempt from local taxes, as
provided under subsection (e), or receives a contribu-
tion, as provided under such subsection;
(5) no member of the board of directors or
other governing body of the agency, or the executive
director, has been convicted of a felony;
(6) the agency has entered into an agreement
providing for local cooperation in accordance with
subsection (f); and
(7) the agency has not been disqualified for a
grant pursuant to section 205(a) or title V.
(e) PAYMENTS IN LIEU OF STATE AND LOCAL TAX-
ATION OF PUBLIC HOUSING DEVELOPMENTS.—
(1) EXEMPTION
FROM
TAXATION.—A public
housing agency may receive a block grant under this
title only if—
(A)(i) the developments of the agency (ex-
clusive of any portions not assisted with
HR 2 RFS
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 public housing agency makes pay-
ments in lieu of taxes to such taxing authority
equal to 10 percent of the sum, for units
charged in the developments of the agency, of
the 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 (f)
for local cooperation with the public hous-
ing agency or under a waiver by the local
governing body; or
(III) due to failure of a local public
body or bodies other than the public hous-
ing agency to perform any obligation under
such agreement; or
(B) the agency complies with the require-
ments under subparagraph (A) with respect to
public housing developments (including public
housing units in mixed-income developments),
but the agency agrees that the units other than
HR 2 RFS
public housing units in any mixed-income devel-
opments (as such term is defined in section
221(c)(2)) shall be subject to any otherwise ap-
plicable real property taxes imposed by the
State, city, county or other political subdivision.
(2) EFFECT
OF
FAILURE
TO
EXEMPT
FROM
TAXATION.—Notwithstanding paragraph (1), a pub-
lic housing agency that does not comply with the re-
quirements under such paragraph may receive a
block grant under this title, but only if the State,
city, county, or other political subdivision in which
the development is situated contributes, in the form
of cash or tax remission, the amount by which the
taxes paid with respect to the development exceed 10
percent of the gross rent and utility cost charged in
the development.
(f) LOCAL COOPERATION.—In recognition that there
should be local determination of the need for low-income
housing to meet needs not being adequately met by private
enterprise, the Secretary may not make any grant under
this title to a public housing agency unless the governing
body of the locality involved has entered into an agreement
with the agency providing for the local cooperation re-
quired by the Secretary pursuant to this title. The Sec-
retary shall require that each such agreement for local co-
HR 2 RFS
operation shall provide that, notwithstanding any order,
judgment, or decree of any court (including any settlement
order), before making any amounts provided under a
grant under this title available for use for the production
of any housing or other property not previously used as
public housing, the public housing agency shall—
(1) notify the chief executive officer (or other
appropriate official) of the unit of general local gov-
ernment in which the public housing for which such
amounts are to be so used is located (or to be lo-
cated) of such use; and
(2) pursuant to the request of such unit of gen-
eral local government, provide such information as
may reasonably be requested by such unit of general
local government regarding the public housing to be
so assisted (except to the extent otherwise prohibited
by law) and consult with representatives of such
local government regarding the public housing.
(g) EXCEPTION.—Notwithstanding subsection (a),
the Secretary may make a grant under this title for a pub-
lic housing agency that is not an eligible public housing
agency but only for the period necessary to secure, in ac-
cordance with this title, an alternative public housing
agency for the public housing of the ineligible agency.
HR 2 RFS
(h) 
RECAPTURE
OF
CAPITAL
ASSISTANCE
AMOUNTS.—The Secretary may recapture, from any grant
amounts made available to a public housing agency from
the capital fund, any portion of such amounts that are
not used or obligated by the public housing agency for use
for eligible activities under section 203(a)(1) (or dedicated
for use pursuant to section 202(b)(2)(A)) before the expi-
ration of the 24-month period beginning upon the award
of such grant to the agency.
SEC. 203. ELIGIBLE AND REQUIRED ACTIVITIES.
(a) ELIGIBLE ACTIVITIES.—Except as provided in
subsection (b) and in section 202(b)(2), grant amounts al-
located and provided from the capital fund and grant
amounts allocated and provided from the operating fund
may be used for the following activities:
(1) 
CAPITAL
FUND
ACTIVITIES.—Grant
amounts from the capital fund may be used for—
(A) the production and modernization of
public housing developments, including the re-
design, reconstruction, and reconfiguration of
public housing sites and buildings and the pro-
duction of mixed-income developments;
(B) vacancy reduction;
(C) addressing deferred maintenance needs
and the replacement of dwelling equipment;
HR 2 RFS
(D) planned code compliance;
(E) management improvements;
(F) demolition and replacement under sec-
tion 261;
(G) tenant relocation;
(H) capital expenditures to facilitate pro-
grams to improve the economic empowerment
and self-sufficiency of public housing tenants;
and
(I) capital expenditures to improve the se-
curity and safety of residents.
(2) 
OPERATING
FUND
ACTIVITIES.—Grant
amounts from the operating fund may be used for—
(A) procedures and systems to maintain
and ensure the efficient management and oper-
ation of public housing units;
(B) activities to ensure a program of rou-
tine preventative maintenance;
(C) anti-crime and anti-drug activities, in-
cluding the costs of providing adequate security
for public housing tenants;
(D) activities related to the provision of
services, including service coordinators for el-
derly persons or persons with disabilities and
HR 2 RFS
including child care services for public housing
residents;
(E) activities to provide for management
and participation in the management of public
housing by public housing tenants;
(F) the costs associated with the operation
and management of mixed-income develop-
ments;
(G) the costs of insurance;
(H) the energy costs associated with public
housing units, with an emphasis on energy con-
servation;
(I) the costs of administering a public
housing community work program under section
105, including the costs of any related insur-
ance needs; and
(J) activities in connection with a home-
ownership 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 councils
to obtain training, technical assistance, and
educational assistance to promote homeowner-
ship opportunities.
HR 2 RFS
(b) REQUIRED CONVERSION
OF ASSISTANCE
FOR
PUBLIC HOUSING TO RENTAL HOUSING ASSISTANCE.—
(1) REQUIREMENT.—A public housing agency
that receives grant amounts under this title shall
provide assistance in the form of rental housing as-
sistance under title III, or appropriate site revital-
ization or other appropriate capital improvements
approved by the Secretary, in lieu of assisting the
operation and modernization of any building or
buildings of public housing, if the agency provides
sufficient evidence to the Secretary that the building
or buildings—
(A) are on the same or contiguous sites;
(B) consist of more than 300 dwelling
units;
(C) have a vacancy rate of at least 10 per-
cent for dwelling units not in funded, on-sched-
ule modernization programs;
(D) are identified as distressed housing for
which the public housing agency cannot assure
the long-term viability as public housing
through reasonable revitalization, density reduc-
tion, or achievement of a broader range of
household income; and
HR 2 RFS
(E) have an estimated cost of continued
operation and modernization as public housing
that exceeds the cost of providing choice-based
rental assistance under title III for all families
in occupancy, based on appropriate indicators
of cost (such as the percentage of the total de-
velopment cost required for modernization).
Public housing agencies shall identify properties that
meet the definition of subparagraphs (A) through
(E) and shall consult with the appropriate public
housing residents and the appropriate unit of gen-
eral local government in identifying such properties.
(2) USE OF OTHER AMOUNTS.—In addition to
grant amounts under this title attributable (pursu-
ant to the formulas under section 204) to the build-
ing or buildings identified under paragraph (1), the
Secretary may use amounts provided in appropria-
tion Acts for choice-based housing assistance under
title III for families residing in such building or
buildings or for appropriate site revitalization or
other appropriate capital improvements approved by
the Secretary.
(3) ENFORCEMENT.—The Secretary shall take
appropriate action to ensure conversion of any build-
ing or buildings identified under paragraph (1) and
HR 2 RFS
any other appropriate action under this subsection,
if the public housing agency fails to take appropriate
action under this subsection.
(4) FAILURE OF PHA’S TO COMPLY WITH CON-
VERSION
REQUIREMENT.—If the Secretary deter-
mines that—
(A) a public housing agency has failed
under paragraph (1) to identify a building or
buildings in a timely manner,
(B) a public housing agency has failed to
identify one or more buildings which the Sec-
retary determines should have been identified
under paragraph (1), or
(C) one or more of the buildings identified
by the public housing agency pursuant to para-
graph (1) should not, in the determination of
the Secretary, have been identified under that
paragraph,
the Secretary may identify a building or buildings
for conversion and take other appropriate action
pursuant to this subsection.
(5) CESSATION OF UNNECESSARY SPENDING.—
Notwithstanding any other provision of law, if, in
the determination of the Secretary, a building or
buildings meets or is likely to meet the criteria set
HR 2 RFS
forth in paragraph (1), the Secretary may direct the
public housing agency to cease additional spending
in connection with such building or buildings, except
to the extent that additional spending is necessary
to ensure safe, clean, and healthy housing until the
Secretary determines or approves an appropriate
course of action with respect to such building or
buildings under this subsection.
(6) USE
OF
BUDGET
AUTHORITY.—Notwith-
standing any other provision of law, if a building or
buildings are identified pursuant to paragraph (1),
the Secretary may authorize or direct the transfer,
to the choice-based or tenant-based assistance pro-
gram of such agency or to appropriate site revital-
ization or other capital improvements approved by
the Secretary, of—
(A) in the case of an agency receiving as-
sistance under the comprehensive improvement
assistance program, any amounts obligated by
the Secretary for the modernization of such
building or buildings pursuant to section 14 of
the United States Housing Act of 1937 (as in
effect immediately before the effective date of
the repeal under section 601(b));
HR 2 RFS
(B) in the case of an agency receiving pub-
lic housing modernization assistance by formula
pursuant to such section 14, any amounts pro-
vided to the agency which are attributable pur-
suant to the formula for allocating such assist-
ance to such building or buildings;
(C) in the case of an agency receiving as-
sistance for the major reconstruction of obsolete
projects, any amounts obligated by the Sec-
retary for the major reconstruction of such
building or buildings pursuant to section 5(j)(2)
of the United States Housing Act of 1937, as
in effect immediately before the effective date of
the repeal under section 601(b); and
(D) in the case of an agency receiving as-
sistance pursuant to the formulas under section
204, any amounts provided to the agency which
are attributable pursuant to the formulas for
allocating such assistance to such building or
buildings.
(7) RELOCATION REQUIREMENTS.—Any public
housing agency carrying out conversion of public
housing under this subsection shall—
(A) notify the families residing in the pub-
lic housing development subject to the conver-
HR 2 RFS
sion, in accordance with any guidelines issued
by the Secretary governing such notifications,
that—
(i) the development will be removed
from the inventory of the public housing
agency; and
(ii) the families displaced by such ac-
tion will receive choice-based housing as-
sistance or occupancy in a unit operated or
assisted by the public housing agency;
(B) ensure that each family that is a resi-
dent of the development is relocated to other
safe, clean, and healthy affordable housing,
which is, to the maximum extent practicable,
housing of the family’s choice, including choice-
based assistance under title III (provided that
with respect to choice-based assistance, the pre-
ceding requirement shall be fulfilled only upon
the relocation of such family into such housing);
(C) provide any necessary counseling for
families displaced by such action to facilitate re-
location; and
(D) provide any reasonable relocation ex-
penses for families displaced by such action.
HR 2 RFS
(8) TRANSITION.—Any amounts made available
to a public housing agency to carry out section 202
of the Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies
Appropriations Act, 1996 (enacted as section 101(e)
of the Omnibus Consolidated Rescissions and Appro-
priations Act of 1996 (Public Law 104–134; 110
Stat. 1321–279)) may be used, to the extent or in
such amounts as are or have been provided in ad-
vance in appropriation Acts, to carry out this sec-
tion. The Secretary shall provide for public housing
agencies to conform and continue actions taken
under such section 202 in accordance with the re-
quirements under this section.
(c) EXTENSION
OF
DEADLINES.—The Secretary
may, for a public housing agency, extend any deadline es-
tablished pursuant to this section or a local housing man-
agement plan for up to an additional 5 years if the Sec-
retary makes a determination that the deadline is imprac-
ticable.
(d) COMPLIANCE WITH PLAN.—The local housing
management plan submitted by a public housing agency
(including any amendments to the plan), unless deter-
mined under section 107 not to comply with the require-
ments under section 106, shall be binding upon the Sec-
HR 2 RFS
retary and the public housing agency and the agency shall
use any grant amounts provided under this title for eligi-
ble activities under subsection (a) in accordance with the
plan. This subsection may not be construed to preclude
changes or amendments to the plan, as authorized under
section 107 or any actions authorized by this Act to be
taken without regard to a local housing management plan.
(e) ELIGIBLE
ACTIVITIES
FOR
INCREASED
IN-
COME.—Any public housing agency that derives increased
nonrental or rental income, as referred to in subsection
(c)(2)(B) or (d)(1)(D) of section 204 or pursuant to provi-
sion 
of 
mixed-income 
developments 
under 
section
221(c)(2), may use such amounts for any eligible activity
under paragraph (1) or (2) of subsection (a) of this section
or for providing choice-based housing assistance under
title III.
SEC. 204. DETERMINATION OF GRANT ALLOCATION.
(a) IN GENERAL.—For each fiscal year, after reserv-
ing amounts under section 111 from the aggregate
amount made available for the fiscal year for carrying out
this title, the Secretary shall allocate any remaining
amounts among eligible public housing agencies in accord-
ance with this section, so that the sum of all of the alloca-
tions for all eligible authorities is equal to such remaining
amount.
HR 2 RFS
(b) ALLOCATION AMOUNT.—The Secretary shall de-
termine the amount of the allocation for each eligible pub-
lic housing agency, which shall be—
(1) for any fiscal year beginning after the en-
actment of a law containing the formulas described
in paragraphs (1) and (2) of subsection (c), the sum
of the amounts determined for the agency under
each 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 agency; and
(B) the capital improvement allocation de-
termined under subsection (d)(2) for the agen-
cy.
(c) PERMANENT ALLOCATION FORMULAS FOR CAP-
ITAL AND OPERATING FUNDS.—
(1) ESTABLISHMENT OF CAPITAL FUND FOR-
MULA.—The formula under this paragraph shall
provide for allocating assistance under the capital
fund for a fiscal year. The formula may take into
account such factors as—
(A) the number of public housing dwelling
units owned or operated by the public housing
agency, the characteristics and locations of the
HR 2 RFS
developments, and the characteristics of the
families served and to be served (including the
incomes of the families);
(B) the need of the public housing agency
to carry out rehabilitation and modernization
activities, and reconstruction, production, and
demolition activities related to public housing
dwelling units owned or operated by the public
housing agency, including backlog and projected
future needs of the agency;
(C) the cost of constructing and rehabili-
tating property in the area; and
(D) the need of the public housing agency
to carry out activities that provide a safe and
secure environment in public housing units
owned or operated by the public housing agen-
cy.
(2) ESTABLISHMENT
OF
OPERATING
FUND
FORMULA.—
(A) IN GENERAL.—The formula under this
paragraph shall provide for allocating assistance
under the operating fund for a fiscal year. The
formula may take into account such factors
as—
HR 2 RFS
(i) standards for the costs of operat-
ing and reasonable projections of income,
taking into account the characteristics and
locations of the public housing develop-
ments and characteristics of the families
served and to be served (including the in-
comes of the families), or the costs of pro-
viding comparable services as determined
in accordance with criteria or a formula
representing the operations of a prototype
well-managed public housing development;
(ii) the number of public housing
dwelling units owned or operated by the
public housing agency;
(iii) the need of the public housing
agency to carry out anti-crime and anti-
drug activities, including providing ade-
quate security for public housing residents;
and
(iv) any record by the public housing
agency of exemplary performance in the
operation of public housing.
(B) INCENTIVE TO INCREASE INCOME.—
The formula shall provide an incentive to en-
courage public housing agencies to increase
HR 2 RFS
nonrental income and to increase rental income
attributable to their units by encouraging occu-
pancy by families whose incomes have increase
while in occupancy and newly admitted families.
Any such incentive shall provide that the agen-
cy shall derive the full benefit of any increase
in nonrental or rental income, and such in-
crease shall not result in a decrease in amounts
provided to the agency under this title. In addi-
tion, an agency shall be permitted to retain,
from each fiscal year, the full benefit of such an
increase in nonrental or rental income, except
to the extent that such benefit exceeds (i) 100
percent of the total amount of the operating al-
location for which the agency is eligible under
this section, and (ii) the maximum balance per-
mitted for the agency’s operating reserve under
this section and any regulations issued under
this section.
(C) TREATMENT OF UTILITY RATES.—The
formula shall not take into account the amount
of any cost reductions for a public housing
agency due to the difference between projected
and actual utility rates attributable to actions
that are taken by the agency which lead to such
HR 2 RFS
reductions, as determined by the Secretary. In
the case of any public housing agency that re-
ceives financing from any person or entity other
than the Secretary or enters into a performance
contract to undertake energy conservation im-
provements in a public housing development,
under which the payment does not exceed the
cost of the energy saved as a result of the im-
provements during a reasonable negotiated con-
tract period, the formula shall not take into ac-
count the amount of any cost reductions for the
agency due to the differences between projected
and actual utility consumption attributable to
actions that are taken by the agency which lead
to such reductions, as determined by the Sec-
retary. Notwithstanding the preceding 2 sen-
tences, after the expiration of the 10-year pe-
riod beginning upon the savings initially taking
effect, the Secretary may reduce the amount al-
located to the agency under the formula by up
to 50 percent of such differences.
(3) CONSIDERATION OF PERFORMANCE, COSTS,
AND OTHER FACTORS.—The formulas under para-
graphs (1) and (2) should each reward performance
and may each consider appropriate factors that re-
HR 2 RFS
flect the different characteristics and sizes of public
housing agencies, the relative needs, revenues, costs,
and capital improvements of agencies, and the rel-
ative costs to agencies of operating a well-managed
agency that meets the performance targets for the
agency established in the local housing management
plan for the agency.
(4) DEVELOPMENT UNDER NEGOTIATED RULE-
MAKING PROCEDURE.—The formulas 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
formulas shall not be contained in a regulation.
(5) REPORT.—Not later than the expiration of
the 12-month period beginning upon the enactment
of this Act, the Secretary shall submit a report to
the Congress containing the proposed formulas es-
tablished pursuant to paragraph (4) that meets the
requirements of this subsection.
(d) INTERIM ALLOCATION REQUIREMENTS.—
(1) OPERATING ALLOCATION.—
(A) APPLICABILITY
TO
APPROPRIATED
AMOUNTS.—Of any amounts available for allo-
cation under this subsection for a fiscal year,
HR 2 RFS
an amount shall be used only to provide
amounts for operating allocations under this
paragraph for eligible public housing agencies
that bears the same ratio to such total amount
available for allocation that the amount appro-
priated for fiscal year 1997 for operating sub-
sidies under section 9 of the United States
Housing Act of 1937 bears to the sum of such
operating subsidy amounts plus the amounts
appropriated for such fiscal year for moderniza-
tion under section 14 of such Act.
(B) DETERMINATION.—The operating allo-
cation under this paragraph for a public hous-
ing agency for a fiscal year shall be an amount
determined by applying, to the amount to be al-
located under this paragraph, the formula used
for determining the distribution of operating
subsidies for fiscal year 1997 to public housing
agencies (as modified under subparagraphs (C)
and (D)) under section 9 of the United States
Housing Act of 1937, as in effect immediately
before the effective date of the repeal under sec-
tion 601(b).
(C) TREATMENT OF CHRONICALLY VACANT
UNITS.—The Secretary shall revise the formula
HR 2 RFS
referred to in subparagraph (B) so that the for-
mula does not provide any amounts, other than
utility costs and other necessary costs (such as
costs necessary for the protection of persons
and property), attributable to any dwelling unit
of a public housing agency 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.
(D) TREATMENT
OF
INCREASES
IN
IN-
COME.—The Secretary shall revise the formula
referred to in subparagraph (B) to provide an
incentive to encourage public housing agencies
to increase nonrental income and to increase
rental income attributable to their units by en-
couraging occupancy by families whose incomes
have increased while in occupancy and newly
admitted families. Any such incentive shall pro-
vide that the agency shall derive the full benefit
of any increase in nonrental or rental income,
and such increase shall not result in a decrease
in amounts provided to the agency under this
title. In addition, an agency shall be permitted
to retain, from each fiscal year, the full benefit
HR 2 RFS
of such an increase in nonrental or rental in-
come, except that such benefit may not be re-
tained if—
(i) the agency’s operating allocation
equals 100 percent of the amount for
which it is eligible under section 9 of the
United States Housing Act of 1937, as in
effect immediately before the effective date
of the repeal under section 601(b) of this
Act; and
(ii) the agency’s operating reserve bal-
ance is equal to the maximum amount per-
mitted under section 9 of the United
States Housing Act of 1937, as in effect
immediately before the effective date of the
repeal under section 601(b) of this Act.
(2) CAPITAL IMPROVEMENT ALLOCATION.—
(A) APPLICABILITY
TO
APPROPRIATED
AMOUNTS.—Of any amounts available for allo-
cation under this subsection for a fiscal year,
an amount shall be used only to provide
amounts for capital improvement allocations
under this paragraph for eligible public housing
agencies that bears the same ratio to such total
amount available for allocation that the amount
HR 2 RFS
appropriated for fiscal year 1997 for mod-
ernization under section 14 of the United
States Housing Act of 1937 bears to the sum
of such modernization amounts plus the
amounts appropriated for such fiscal year for
operating subsidies under section 9 of such Act.
(B) DETERMINATION.—The capital im-
provement allocation under this paragraph for
an eligible public housing agency for a fiscal
year shall be determined by applying, to the
amount to be allocated under this paragraph,
the formula used for determining the distribu-
tion of modernization assistance for fiscal year
1997 to public housing agencies under section
14 of the United States Housing Act of 1937,
as in effect immediately before the effective
date of the repeal under section 601(b), except
that the Secretary shall establish a method for
taking into consideration allocation of amounts
under the comprehensive improvement assist-
ance program.
(e) ELIGIBILITY OF UNITS ACQUIRED FROM PRO-
CEEDS OF SALES UNDER DEMOLITION OR DISPOSITION
PLAN.—If a public housing agency uses proceeds from the
sale of units under a homeownership program in accord-
HR 2 RFS
projects, or activities not affected by such failure to
comply;
(5) withhold from the agency amounts allocated
for the agency under title III; or
(6) order other corrective action with respect to
the agency.
(b) TERMINATION OF COMPLIANCE ACTION.—If the
Secretary takes action under subsection (a) with respect
to a public housing agency, the Secretary shall—
(1) in the case of action under subsection
(a)(1), resume payments of grant amounts under
this title to the agency in the full amount of the
total allocation under section 204 for the agency at
the time that the Secretary first determines that the
agency 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 agency complies with the provisions
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 agency will com-
ply with the provisions of this title.
100
HR 2 RFS
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, except as provided
in this Act.
(c) 
CAPITAL
IMPROVEMENTS
ASSISTANCE.—
Amounts may be used for eligible activities under section
203(a)(1) 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 public housing agencies;
101
HR 2 RFS
(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)(1) 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 eligible activities under section
203(a)(1) 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—
102
HR 2 RFS
(i) which units are made available (by
master contract or individual lease) for oc-
cupancy only by low- and very low-income
families identified by the public housing
agency;
(ii) which number is not less than a
reasonable number of units, including re-
lated amenities, taking into account the
amount of the assistance provided by the
agency compared to the total investment
(including costs of operation) in the devel-
opment;
(iii) which units are subject to the
statutory and regulatory requirements of
the public housing program, except that
the Secretary may grant appropriate waiv-
ers to such statutory and regulatory re-
quirements if reductions in funding or
other changes to the program make contin-
ued application of such requirements im-
practicable;
(iv) which units are specially des-
ignated as dwelling units under this sub-
paragraph, except the equivalent units in
the development may be substituted for
103
HR 2 RFS
designated units during the period the
units are subject to the requirements of
the public housing program; and
(v) which units shall be eligible for as-
sistance under this title; and
(C) is owned by the public housing agency,
an affiliate controlled by it, or another appro-
priate entity.
Notwithstanding any other provision of this title, to
facilitate the establishment of socioeconomically
mixed communities, a public housing agency that
uses grant amounts under this title for a mixed in-
come development under this paragraph may, to the
extent that income from such a development reduces
the amount of grant amounts used for operating or
other costs relating to public housing, use such re-
sulting savings to rent privately developed dwelling
units in the neighborhood of the mixed income devel-
opment. Such units shall be made available for occu-
pancy only by low-income families eligible for resi-
dency in public housing.
SEC. 222. FAMILY 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.
104
HR 2 RFS
(b) INCOME MIX WITHIN DEVELOPMENTS.—A public
housing agency may establish and utilize income-mix cri-
teria for the selection of residents for dwelling units in
public housing developments that limit admission to a de-
velopment by selecting applicants having incomes appro-
priate so that the mix of incomes of families occupying
the development at any time is proportional to the income
mix in the eligible population of the jurisdiction of the
agency at such time, as adjusted to take into consideration
the severity of housing need. Any criteria established
under this subsection shall be subject to the provisions of
subsection (c).
(c) INCOME MIX.—
(1) PHA INCOME MIX.—Of the public housing
dwelling units of a public housing agency made
available for occupancy by eligible families, not less
than 35 percent shall be occupied by families whose
incomes at the time of occupancy do not exceed 30
percent of the area median income, as determined by
the Secretary with adjustments for smaller and larg-
er families, except that the Secretary, may for pur-
poses of this subsection, establish income ceilings
higher or lower than 30 percent of the median for
the area on the basis of the Secretary’s findings that
such variations are necessary because of unusually
105
HR 2 RFS
high or low family incomes. This paragraph may not
be construed to create any authority on the part of
any public housing agency to evict any family resid-
ing in public housing solely because of the income of
the family or because of any noncompliance or over-
compliance with the requirement of this paragraph.
(2) PROHIBITION OF CONCENTRATION OF LOW-
INCOME FAMILIES.—A public housing agency may
not, in complying with the requirements under para-
graph (1), concentrate very low-income families (or
other families with relatively low incomes) in public
housing dwelling units in certain public housing de-
velopments or certain buildings within developments.
The Secretary may review the income and occupancy
characteristics of the public housing developments,
and the buildings of such developments, of public
housing agencies to ensure compliance with the pro-
visions of this paragraph.
(3) FUNGIBILITY WITH CHOICE-BASED ASSIST-
ANCE.—If, during a fiscal year, a public housing
agency provides choice-based housing assistance
under title III for a number of low-income families,
who are initially assisted by the agency in such year
and have incomes described in section 321(b) (relat-
ing to income targeting), which exceeds the number
106
HR 2 RFS
of families that is required for the agency to comply
with the percentage requirement under such section
321(b) for such fiscal year, notwithstanding para-
graph (1) of this subsection, the number of public
housing dwelling units that the agency must other-
wise make available in accordance with such para-
graph to comply with the percentage requirement
under such paragraph shall be reduced by such ex-
cess number of families for such fiscal year.
(d) WAIVER OF ELIGIBILITY REQUIREMENTS FOR
OCCUPANCY BY POLICE OFFICERS.—
(1) AUTHORITY AND WAIVER.—To the extent
necessary to provide occupancy in public housing
dwelling units to police officers and other law en-
forcement or security personnel (who are not other-
wise eligible for residence in public housing) and to
increase security for other public housing residents
in developments where crime has been a problem, a
public housing agency may, with respect to such
units and subject to paragraph (2)—
(A) waive—
(i) the provisions of subsection (a) of
this section and section 225(a); and
(ii) the applicability of—
107
HR 2 RFS
(I) any preferences for occupancy
established under section 223;
(II) the minimum rental amount
established pursuant to section 225(c)
and any maximum monthly rental
amount established pursuant to sec-
tion 225(b);
(III) any criteria relating to in-
come mix within developments estab-
lished under subsection (b);
(IV) the income mix require-
ments under subsection (c); and
(V) any other occupancy limita-
tions or requirements; and
(B) establish special rent requirements and
other terms and conditions of occupancy.
(2) CONDITIONS OF WAIVER.—A public housing
agency may take the actions authorized in para-
graph (1) only if agency determines that such ac-
tions will increase security in the public housing de-
velopments involved and will not result in a signifi-
cant reduction of units available for residence by
low-income families.
108
HR 2 RFS
SEC. 223. PREFERENCES FOR OCCUPANCY.
(a) AUTHORITY TO ESTABLISH.—Each public hous-
ing agency may establish a system for making dwelling
units in public housing available for occupancy that pro-
vides preference for such occupancy to families having cer-
tain 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 public
housing agency using generally accepted data sources, in-
cluding any information obtained pursuant to an oppor-
tunity for public comment as provided under section
106(e) and under the requirements applicable to the com-
prehensive housing affordability strategy for the relevant
jurisdiction.
(c) SENSE OF THE CONGRESS.—It is the sense of the
Congress that, to the greatest extent practicable, public
housing agencies involved in the selection of tenants under
the provisions of this title should adopt preferences for in-
dividuals who are victims of domestic violence.
SEC. 224. ADMISSION PROCEDURES.
(a) ADMISSION REQUIREMENTS.—A public housing
agency shall ensure that each family residing in a public
housing development owned or administered by the agency
is admitted in accordance with the procedures established
109
HR 2 RFS
under this title by the agency and the income limits under
section 222.
(b) NOTIFICATION OF APPLICATION DECISIONS.—A
public housing agency shall establish procedures designed
to provide for notification to an applicant for admission
to public housing of the determination with respect to such
application, the basis for the determination, and, if the
applicant is determined to be eligible for admission, the
projected date of occupancy (to the extent such date can
reasonably be determined). If an agency denies an appli-
cant admission to public housing, the agency shall notify
the applicant that the applicant may request an informal
hearing on the denial within a reasonable time of such
notification.
(c) SITE-BASED WAITING LISTS.—A public housing
agency may establish procedures for maintaining waiting
lists for admissions to public housing developments of the
agency, which may include (notwithstanding any other
law, regulation, handbook, or notice to the contrary) a sys-
tem of site-based waiting lists whereby applicants may
apply directly at or otherwise designate the development
or developments in which they seek to reside. All such pro-
cedures shall comply with all provisions of title VI of the
Civil Rights Act of 1964, the Fair Housing Act, and other
applicable civil rights laws.
110
HR 2 RFS
(d) CONFIDENTIALITY FOR VICTIMS OF DOMESTIC
VIOLENCE.—A public housing agency shall be subject to
the restrictions regarding release of information relating
to the identity and new residence of any family in public
housing that was a victim of domestic violence that are
applicable to shelters pursuant to the Family Violence
Prevention and Services Act. The agency shall work with
the United States Postal Service to establish procedures
consistent with the confidentiality provisions in the Vio-
lence Against Women Act of 1994.
(e) TRANSFERS.—A public housing agency may
apply, to each public housing resident seeking to transfer
from one development to another development owned or
operated by the agency, the screening procedures applica-
ble at such time to new applicants for public housing.
SEC. 225. FAMILY CHOICE OF RENTAL PAYMENT.
(a) RENTAL CONTRIBUTION BY RESIDENT.—A fam-
ily residing in a public housing dwelling shall pay as
monthly rent for the unit the amount determined under
paragraph (1) or (2) of subsection (b), subject to the re-
quirement under subsection (c). Each public housing agen-
cy shall provide for each family residing in a public hous-
ing dwelling unit owned or administered by the agency to
elect annually whether the rent paid by such family shall
111
HR 2 RFS
be determined under paragraph (1) or (2) of subsection
(b).
(b) ALLOWABLE RENT STRUCTURES.—
(1) FLAT RENTS.—Each public housing agency
shall establish, for each dwelling unit in public hous-
ing owned or administered by the agency, a flat
rental amount for the dwelling unit, which shall—
(A) be based on the rental value of the
unit, as determined by the public housing agen-
cy; and
(B) be designed in accordance with sub-
section (e) so that the rent structures do not
create a disincentive for continued residency in
public housing by families who are attempting
to become economically self-sufficient through
employment or who have attained a level of self-
sufficiency through their own efforts.
The rental amount for a dwelling unit shall be con-
sidered to comply with the requirements of this
paragraph if such amount does not exceed the actual
monthly costs to the public housing agency attrib-
utable to providing and operating the dwelling unit.
The preceding sentence may not be construed to re-
quire establishment of rental amounts equal to or
based on operating costs or to prevent public hous-
112
HR 2 RFS
ing agencies from developing flat rents required
under this paragraph in any other manner that may
comply with this paragraph.
(2) INCOME-BASED RENTS.—The monthly rent-
al amount determined under this paragraph for a
family shall be an amount, determined by the public
housing agency, that does not exceed the greatest of
the following amounts (rounded to the nearest dol-
lar):
(A) 30 percent of the monthly adjusted in-
come of the family.
(B) 10 percent of the monthly income of
the family.
(C) If the family is receiving payments for
welfare assistance from a public agency and a
part of such payments, adjusted in accordance
with the actual housing costs of the family, is
specifically designated by such agency to meet
the housing costs of the family, the portion of
such payments that is so designated.
Nothing in this paragraph may be construed to re-
quire a public housing agency to charge a monthly
rent in the maximum amount permitted under this
paragraph.
113
HR 2 RFS
(c) MINIMUM RENTAL AMOUNT.—Notwithstanding
the method for rent determination elected by a family pur-
suant to subsection (a), each public housing agency shall
require that the monthly rent for each dwelling unit in
public housing owned or administered by the agency shall
not be less than a minimum amount (which amount shall
include any amount allowed for utilities), which shall be
an amount determined by the agency that is not less than
$25 nor more than $50.
(d) HARDSHIP PROVISIONS.—
(1) MINIMUM RENTAL.—
(A) IN
GENERAL.—Notwithstanding sub-
section (c), a public housing agency shall grant
an exemption from application of the minimum
monthly rental under such subsection to any
family unable to pay such amount because of fi-
nancial hardship, which shall include situations
in which (i) the family has lost eligibility for or
is awaiting an eligibility determination for a
Federal, State, or local assistance program, in-
cluding a family that includes a member who is
an alien lawfully admitted for permanent resi-
dence under the Immigration and Nationality
Act who would be entitled to public benefits but
for title IV of the Personal Responsibility and
114
HR 2 RFS
Work Opportunity Reconciliation Act of 1996;
(ii) the family would be evicted as a result of
the imposition of the minimum rent require-
ment under subsection (c); (iii) the income of
the family has decreased because of changed
circumstance, including loss of employment; and
(iv) a death in the family has occurred; and
other situations as may be determined by the
agency.
(B) WAITING PERIOD.—If a resident re-
quests a hardship exemption under this para-
graph and the public housing agency reasonably
determines the hardship to be of a temporary
nature, an exemption shall not be granted dur-
ing the 90-day period beginning upon the mak-
ing of a request for the exemption. A resident
may not be evicted during such 90-day period
for nonpayment of rent. In such a case, if the
resident thereafter demonstrates that the finan-
cial hardship is of a long-term basis, the agency
shall retroactively exempt the resident from the
applicability of the minimum rent requirement
for such 90-day period.
(2) SWITCHING RENT DETERMINATION METH-
ODS.—Notwithstanding subsection (a), in the case of
115
HR 2 RFS
a family that has elected to pay rent in the amount
determined under subsection (b)(1), a public housing
agency shall provide for the family to pay rent in the
amount determined under subsection (b)(2) during
the period for which such election was made if the
family is unable to pay the amount determined
under subsection (b)(1) because of financial hard-
ship, including—
(A) situations in which the income of the
family has decreased because of changed cir-
cumstances, loss of reduction of employment,
death in the family, and reduction in or loss of
income or other assistance;
(B) an increase, because of changed cir-
cumstances, in the family’s expenses for—
(i) medical costs;
(ii) child care;
(iii) transportation;
(iv) education; or
(v) similar items; and
(C) such other situations as may be deter-
mined by the agency.
(e) ENCOURAGEMENT OF SELF-SUFFICIENCY.—The
rental policy developed by each public housing agency shall
116
HR 2 RFS
encourage and reward employment and economic self-suf-
ficiency.
(f) INCOME REVIEWS.—Each public housing agency
shall review the income of each family occupying a dwell-
ing unit in public housing owned or administered by the
agency not less than annually, except that, in the case of
families that are paying rent in the amount determined
under subsection (b)(1), the agency shall review the in-
come of such family not less than once every 3 years.
(g) DISALLOWANCE
OF EARNED INCOME FROM
RENT DETERMINATIONS.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, the rent payable under this section
by a family whose income increases as a result of
employment of a member of the family who was pre-
viously unemployed for 1 or more years (including a
family whose income increases as a result of the par-
ticipation of a family member in any family self-suf-
ficiency or other job training program) may not be
increased as a result of the increased income due to
such employment during the 18-month period begin-
ning on the date on which the employment is com-
menced.
(2) PHASE-IN OF RENT INCREASES.—After the
expiration of the 18-month period referred to in
117
HR 2 RFS
paragraph (1), rent increases due to the continued
employment of the family member described in para-
graph (1) shall be phased in over a subsequent 3-
year period.
(3) TRANSITION.—Notwithstanding the provi-
sions of paragraphs (1) and (2), any resident of
public housing participating in the program under
the authority contained in the undesignated para-
graph at the end of section 3(c)(3) of the United
States Housing Act of 1937 (as in effect before the
effective date of the repeal under section 601(b) of
this Act) shall be governed by such authority after
such date.
(h) PHASE-IN OF RENT CONTRIBUTION INCREASES
AFTER EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), for any family residing in a dwelling unit
in public housing upon the effective date of this Act,
if the monthly contribution for rental of an assisted
dwelling unit to be paid by the family upon initial
applicability of this title is greater than the amount
paid by the family under the provisions of the Unit-
ed States Housing Act of 1937 immediately before
such applicability, any such resulting increase in
rent contribution shall be—
118
HR 2 RFS
(A) phased in equally over a period of not
less than 3 years, if such increase is 30 percent
or more of such contribution before initial ap-
plicability; and
(B) limited to not more than 10 percent
per year if such increase is more than 10 per-
cent but less than 30 percent of such contribu-
tion before initial applicability.
(2) EXCEPTION.—The minimum rental amount
under subsection (c) shall apply to each family de-
scribed in paragraph (1) of this subsection, notwith-
standing such paragraph.
SEC. 226. LEASE REQUIREMENTS.
In renting dwelling units in a public housing develop-
ment, each public housing agency shall utilize leases
that—
(1) do not contain unreasonable terms and con-
ditions;
(2) obligate the public housing agency to main-
tain the development in compliance with the housing
quality requirements under section 232;
(3) require the public housing agency to give
adequate written notice of termination of the lease,
which shall not be less than—
119
HR 2 RFS
(A) the period provided under the applica-
ble law of the jurisdiction or 14 days, whichever
is less, in the case of nonpayment of rent;
(B) a reasonable period of time, but not to
exceed 14 days, when the health or safety of
other residents or public housing agency em-
ployees is threatened; and
(C) the period of time provided under the
applicable law of the jurisdiction, in any other
case;
(4) contain the provisions required under sec-
tions 642 and 643 (relating to limitations on occu-
pancy in federally assisted housing); and
(5) 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 section and notwithstanding any other provision
120
HR 2 RFS
of law, a public housing agency for which the infor-
mation required under subsection (d) is in effect
may 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 public housing agency may make units in such
developments (or portions) available only to the
types of families for whom the development is des-
ignated.
(3) ELIGIBILITY
OF
NEAR-ELDERLY
FAMI-
LIES.—If a public housing agency determines that
there are insufficient numbers of elderly families to
fill all the units in a development (or portion of a
development) designated under paragraph (1) for oc-
cupancy by only elderly families, the agency may
provide that near-elderly families may occupy dwell-
ing units in the development (or portion).
(b) STANDARDS REGARDING EVICTIONS.—Except as
provided in subtitle C of title VI, any tenant who is law-
fully residing in a dwelling unit in a public housing devel-
121
HR 2 RFS
opment may not be evicted or otherwise required to vacate
such unit because of the designation of the development
(or portion of a development) pursuant to this section or
because of any action taken by the Secretary or any public
housing agency pursuant to this section.
(c) RELOCATION ASSISTANCE.—A public housing
agency that designates any existing development or build-
ing, or portion thereof, for occupancy as provided under
subsection (a)(1) shall provide, to each person and family
who agrees to be relocated in connection with such des-
ignation—
(1) notice of the designation and an explanation
of available relocation benefits, as soon as is prac-
ticable for the agency and the person or family;
(2) access to comparable housing (including ap-
propriate services and design features), which may
include choice-based rental housing assistance under
title III, at a rental rate paid by the tenant 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 LOCAL HOUSING
MANAGEMENT PLAN.—A public housing agency may des-
ignate a development (or portion of a development) for
122
HR 2 RFS
occupancy under subsection (a)(1) only if the agency, as
part of the agency’s local housing management plan—
(1) establishes that the designation of the devel-
opment is necessary—
(A) to achieve the housing goals for the ju-
risdiction under the comprehensive housing af-
fordability strategy under section 105 of the
Cranston-Gonzalez National Affordable Hous-
ing Act; or
(B) to meet the housing needs of the low-
income population of the jurisdiction; and
(2) includes a description of—
(A) the development (or portion of a devel-
opment) to be designated;
(B) the types of tenants for which the de-
velopment is to be designated;
(C) any supportive services to be provided
to tenants of the designated development (or
portion);
(D) how the design and related facilities
(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 occupants; and
123
HR 2 RFS
(E) any plans to secure additional re-
sources or housing assistance to provide assist-
ance to families that may have been housed if
occupancy in the development were not re-
stricted pursuant to this section.
For purposes of this subsection, the term ‘‘supportive
services’’ means services designed to meet the special
needs of residents. Notwithstanding section 107, the Sec-
retary may approve a local housing management plan
without approving the portion of the plan covering des-
ignation of a development pursuant to this section.
(e) EFFECTIVENESS.—
(1) INITIAL 5-YEAR EFFECTIVENESS.—The in-
formation required under subsection (d) shall be in
effect for purposes of this section during the 5-year
period that begins upon notification under section
107(a) of the public housing agency that the infor-
mation complies with the requirements under section
106 and this section.
(2) RENEWAL.—Upon the expiration of the 5-
year period under paragraph (1) or any 2-year pe-
riod under this paragraph, an agency may extend
the effectiveness of the designation and information
for an additional 2-year period (that begins upon
such expiration) by submitting to the Secretary any
124
HR 2 RFS
information needed to update the information. The
Secretary may not limit the number of times a pub-
lic housing agency extends the effectiveness of a des-
ignation and information under this paragraph.
(3) TREATMENT
OF
EXISTING
PLANS.—Not-
withstanding any other provision of this section, a
public housing agency shall be considered to have
submitted the information required under this sec-
tion if the agency has submitted to the Secretary an
application and allocation plan under section 7 of
the United States Housing Act of 1937 (as in effect
before the effective date of the repeal under section
601(b) of this Act) that has not been approved or
disapproved before such effective date.
(4) TRANSITION
PROVISION.—Any application
and allocation plan approved under section 7 of the
United States Housing Act of 1937 (as in effect be-
fore the effective date of the repeal under section
601(b) of this Act) before such effective date shall
be considered to be the information required to be
submitted under this section and that is in effect for
purposes of this section for the 5-year period begin-
ning upon such approval.
(f) INAPPLICABILITY OF UNIFORM RELOCATION AS-
SISTANCE AND REAL PROPERTY ACQUISITIONS POLICY
125
HR 2 RFS
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 sec-
tion.
(g) USE OF AMOUNTS.—Any amounts appropriated
pursuant to section 10(b) of the Housing Opportunity
Program Extension Act of 1996 (Public Law 104–120)
may also be used, to the extent or in such amounts as
are or have been provided in advance in appropriation
Acts, for choice-based rental housing assistance under title
III for public housing agencies to implement this section.
Subtitle C—Management
SEC. 231. MANAGEMENT PROCEDURES.
(a) SOUND MANAGEMENT.—A public housing agency
that receives grant amounts under this title shall establish
and comply with procedures and practices sufficient to en-
sure that the public housing developments owned or ad-
ministered by the agency are operated in a sound manner.
(b) ACCOUNTING SYSTEM
FOR RENTAL COLLEC-
TIONS AND COSTS.—
(1) ESTABLISHMENT.—Each public housing
agency that receives grant amounts under this title
126
HR 2 RFS
shall establish and maintain a system of accounting
for rental collections and costs (including adminis-
trative, utility, maintenance, repair, and other oper-
ating costs) for each project and operating cost cen-
ter (as determined by the Secretary).
(2) ACCESS TO RECORDS.—Each public housing
agency shall make available to the general public the
information required pursuant to paragraph (1) re-
garding collections and costs.
(3) EXEMPTION.—The Secretary may permit
authorities owning or operating fewer than 500
dwelling units to comply with the requirements of
this subsection by accounting on an agency-wide
basis.
(c) MANAGEMENT BY OTHER ENTITIES.—Except as
otherwise provided under this Act, a public housing agency
may contract with any other entity to perform any of the
management functions for public housing owned or oper-
ated by the public housing agency.
SEC. 232. HOUSING QUALITY REQUIREMENTS.
(a) IN GENERAL.—Each public housing agency that
receives grant amounts under this Act shall maintain its
public housing in a condition that complies—
(1) in the case of public housing located in a ju-
risdiction which has in effect laws, regulations,
127
HR 2 RFS
standards, or codes regarding habitability of residen-
tial dwellings, with such applicable 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 paragraph
(1), 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(c). The Secretary shall differentiate be-
tween major and minor violations of such standards.
(c) DETERMINATIONS.—Each public housing agency
providing housing assistance shall identify, in the local
housing management plan of the agency, whether the
agency is utilizing the standard under paragraph (1) or
(2) of subsection (a).
(d) ANNUAL INSPECTIONS.—Each public housing
agency that owns or operates public housing shall make
128
HR 2 RFS
an annual inspection of each public housing development
to determine whether units in the development are main-
tained in accordance with the requirements under sub-
section (a). The agency shall retain the results of such
inspections and, upon the request of the Secretary, the
Inspector General for the Department of Housing and
Urban Development, or any auditor conducting an audit
under section 541, shall make such results available.
SEC. 233. EMPLOYMENT OF RESIDENTS.
Section 3 of the Housing and Urban Development
Act of 1968 (12 U.S.C. 1701u) is amended—
(1) in subsection (c)(1)—
(A) in subparagraph (A)—
(i) by striking ‘‘public and Indian
housing agencies’’ and inserting ‘‘public
housing agencies and recipients of grants
under the Native American Housing As-
sistance and Self-Determination Act of
1996’’; and
(ii) by striking ‘‘development assist-
ance’’ and all that follows through the end
and inserting ‘‘assistance provided under
title II of the Housing Opportunity and
Responsibility Act of 1997 and used for
129
HR 2 RFS
the housing production, operation, or cap-
ital needs.’’; and
(B) in subparagraph (B)(ii), by striking
‘‘managed by the public or Indian housing
agency’’ and inserting ‘‘assisted by the public
housing agency or the recipient of a grant
under the Native American Housing Assistance
and Self-Determination Act of 1996’’;
(2) in subsection (d)(1)—
(A) in subparagraph (A)—
(i) by striking ‘‘public and Indian
housing agencies’’ and inserting ‘‘public
housing agencies and recipients of grants
under the Native American Housing As-
sistance and Self-Determination Act of
1996’’; and
(ii) by striking ‘‘development assist-
ance’’ and all that follows through ‘‘section
14 of that Act’’ and inserting ‘‘assistance
provided under title II of the Housing Op-
portunity and Responsibility Act of 1997
and used for the housing production, oper-
ation, or capital needs’’; and
(B) in subparagraph (B)(ii), by striking
‘‘operated by the public or Indian housing agen-
130
HR 2 RFS
cy’’ and inserting ‘‘assisted by the public hous-
ing agency or the recipient of a grant under the
Native American Housing Assistance and Self-
Determination Act of 1996’’;
(3) in subsections (c)(1)(A) and (d)(1)(A), by
striking ‘‘make their best efforts,’’ each place it ap-
pears and inserting ‘‘to the maximum extent that is
possible and’’;
(4) in subsection (c)(1)(A), by striking ‘‘to
give’’ and inserting ‘‘give’’; and
(5) in subsection (d)(1)(A), by striking ‘‘to
award’’ and inserting ‘‘award’’.
SEC. 234. RESIDENT COUNCILS AND RESIDENT MANAGE-
MENT CORPORATIONS.
(a) RESIDENT COUNCILS.—The residents of a public
housing development may establish a resident council for
the development for purposes of consideration of issues re-
lating to residents, representation of resident interests,
and coordination and consultation with a public housing
agency. A resident council shall be an organization or as-
sociation that—
(1) is nonprofit in character;
(2) is representative of the residents of the eli-
gible housing;
131
HR 2 RFS
(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 on a regular basis.
(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 235 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.
132
HR 2 RFS
SEC. 235. MANAGEMENT BY RESIDENT MANAGEMENT COR-
PORATION.
(a) AUTHORITY.—A public housing agency may enter
into a contract under this section with a resident manage-
ment corporation to provide for the management of public
housing developments by the corporation.
(b) CONTRACT.—A contract under this section for
management of public housing developments by a resident
management corporation shall establish the respective
management rights and responsibilities of the corporation
and the public housing agency. The contract shall be con-
sistent with the requirements of this Act applicable to pub-
lic housing development and may include specific terms
governing management personnel and compensation, ac-
cess to public housing records, submission of and adher-
ence to budgets, rent collection procedures, resident in-
come verification, resident eligibility determinations, resi-
dent eviction, the acquisition of supplies and materials and
such other matters as may be appropriate. The contract
shall be treated as a contracting out of services.
(c) BONDING
AND INSURANCE.—Before assuming
any management responsibility for a public housing 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 public hous-
133
HR 2 RFS
ing agency against loss, theft, embezzlement, or fraudulent
acts on the part of the resident management corporation
or its employees.
(d) BLOCK GRANT ASSISTANCE AND INCOME.—A
contract under this section shall provide for—
(1) the public housing agency to provide a por-
tion of the block grant assistance under this title to
the resident management corporation for purposes of
operating the public housing development covered by
the contract and performing such other eligible ac-
tivities with respect to the development 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
public housing agency (such as interest income, ad-
ministrative 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.—
134
HR 2 RFS
(1) MAINTENANCE
OF
SUPPORT.—Subject to
paragraph (2), the amount of assistance provided by
a public housing agency to a public housing develop-
ment managed by a resident management corpora-
tion may not be reduced during the 3-year period be-
ginning on the date on which the resident manage-
ment corporation is first established for the develop-
ment.
(2) REDUCTIONS
AND
INCREASES
IN
SUP-
PORT.—If the total income of a public housing agen-
cy is reduced or increased, the income provided by
the public housing agency to a public housing devel-
opment managed by a resident management corpora-
tion shall be reduced or increased in proportion to
the reduction or increase in the total income of the
agency, except that any reduction in block grant
amounts under this title to the agency that occurs
as a result of fraud, waste, or mismanagement by
the agency shall not affect the amount provided to
the resident management corporation.
SEC. 236. TRANSFER OF MANAGEMENT OF CERTAIN HOUS-
ING TO INDEPENDENT MANAGER AT RE-
QUEST OF RESIDENTS.
(a) AUTHORITY.—The Secretary may transfer the re-
sponsibility and authority for management of specified
135
HR 2 RFS
housing (as such term is defined in subsection (h)) from
a public housing agency to an eligible management entity,
in accordance with the requirements of this section, if—
(1) such housing is owned or operated by a
public housing agency that is designated as a trou-
bled agency under section 533(a); and
(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 residents can demonstrate that the
elements of distress for such housing specified
in subparagraphs (A) through (C) can be rem-
136
HR 2 RFS
edied by an entity that has a demonstrated ca-
pacity to manage, with 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-
dents for the specified housing, after consultation with the
public housing agency for the specified housing.
(b) BLOCK GRANT ASSISTANCE.—Pursuant to a con-
tract under subsection (c), the Secretary shall require the
public housing agency for specified housing to provide to
the manager for the housing, from any block grant
amounts under this title for the agency, fair and reason-
able 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 public housing agency transferring the housing,
taking into consideration the operating and capital im-
provement needs of the specified housing, the operating
and capital improvement needs of the remaining public
housing units managed by the public housing agency, and
the local housing management plan of such agency.
(c) CONTRACT BETWEEN SECRETARY
AND MAN-
AGER.—
137
HR 2 RFS
(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.
(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 LOCAL HOUSING MANAGE-
MENT PLAN.—A manager of specified housing under this
section shall comply with the approved local housing man-
agement plan applicable to the housing and shall submit
such information to the public housing agency from which
management was transferred as may be necessary for such
agency to prepare and update its local housing manage-
ment 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 local housing management plan for the agency
transferring management of the housing.
138
HR 2 RFS
(f) LIMITATION ON PHA LIABILITY.—A public hous-
ing agency that is not a manager for specified housing
shall not be liable for any act or failure to act by a man-
ager 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 public housing agency for pur-
poses 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:
(A) NONPROFIT ORGANIZATION.—A public
or private nonprofit organization, which shall—
(i) include a resident management
corporation or resident management orga-
nization and, as determined by the Sec-
retary, a public or private nonprofit orga-
nization sponsored by the public housing
agency that owns the development; and
139
HR 2 RFS
(ii) not include the public housing
agency that owns the development.
(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) PUBLIC HOUSING AGENCY.—A public
housing agency (other than the public housing
agency that owns the development).
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—
140
HR 2 RFS
(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) PUBLIC
HOUSING
AGENCY.—The term
‘‘public housing agency’’ has the meaning given such
term in section 103(a).
(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.
141
HR 2 RFS
SEC. 237. RESIDENT OPPORTUNITY PROGRAM.
(a) PURPOSE.—The purpose of this section is to en-
courage increased resident management of public housing
developments, as a means of improving existing living con-
ditions in public housing developments, by providing in-
creased flexibility for public housing developments that are
managed by residents by—
(1) permitting the retention, and use for certain
purposes, of any revenues exceeding operating and
project costs; and
(2) providing funding, from amounts otherwise
available, for technical assistance to promote forma-
tion and development of resident management enti-
ties.
For purposes of this section, the term ‘‘public housing de-
velopment’’ includes one or more contiguous buildings or
an area of contiguous row houses the elected resident
councils of which approve the establishment of a resident
management corporation and otherwise meet the require-
ments of this section.
(b) PROGRAM REQUIREMENTS.—
(1) RESIDENT COUNCIL.—As a condition of en-
tering into a resident opportunity program, the
elected resident council of a public housing develop-
ment shall approve the establishment of a resident
management corporation that complies with the re-
142
HR 2 RFS
quirements of section 234(b)(2). When such ap-
proval is made by the elected resident council of a
building or row house area, the resident opportunity
program shall not interfere with the rights of other
families residing in the development or harm the ef-
ficient operation of the development. The resident
management corporation and the resident council
may be the same organization, if the organization
complies with the requirements applicable to both
the corporation and council.
(2) PUBLIC HOUSING MANAGEMENT SPECIAL-
IST.—The resident council of a public housing devel-
opment, in cooperation with the public housing agen-
cy, shall select a qualified public housing manage-
ment specialist to assist in determining the feasibil-
ity of, and to help establish, a resident management
corporation and to provide training and other duties
agreed to in the daily operations of the development.
(3) MANAGEMENT RESPONSIBILITIES.—A resi-
dent management corporation that qualifies under
this section, and that supplies insurance and bond-
ing or equivalent protection sufficient to the Sec-
retary and the public housing agency, shall enter
into a contract with the agency establishing the re-
spective management rights and responsibilities of
143
HR 2 RFS
the corporation and the agency. The contract shall
be treated as a contracting out of services and shall
be subject to the requirements under section 235 for
such contracts.
(4) ANNUAL AUDIT.—The books and records of
a resident management corporation operating a pub-
lic housing development shall be audited annually by
a certified public accountant. A written report of
each such audit shall be forwarded to the public
housing agency and the Secretary.
(c) COMPREHENSIVE IMPROVEMENT ASSISTANCE.—
Public housing developments managed by resident man-
agement corporations may be provided with modernization
assistance from grant amounts under this title for pur-
poses of renovating such developments. If such renovation
activities (including the planning and architectural design
of the rehabilitation) are administered by a resident man-
agement corporation, the public housing agency involved
may not retain, for any administrative or other reason,
any portion of the assistance provided pursuant to this
subsection unless otherwise provided by contract.
(d) WAIVER OF FEDERAL REQUIREMENTS.—
(1) 
WAIVER
OF
REGULATORY
REQUIRE-
MENTS.—Upon the request of any resident manage-
ment corporation and public housing agency, and
144
HR 2 RFS
after notice and an opportunity to comment is af-
forded to the affected residents, the Secretary may
waive (for both the resident management corporation
and the public housing agency) any requirement es-
tablished by the Secretary (and not specified in any
statute) that the Secretary determines to unneces-
sarily increase the costs or restrict the income of a
public housing development.
(2) WAIVER TO PERMIT EMPLOYMENT.—Upon
the request of any resident management corporation,
the Secretary may, subject to applicable collective
bargaining agreements, permit residents of such de-
velopment to volunteer a portion of their labor.
(3) EXCEPTIONS.—The Secretary may not
waive under this subsection any requirement with re-
spect to income eligibility for purposes of section
222, family rental payments under section 225, ten-
ant or applicant protections, employee organizing
rights, or rights of employees under collective bar-
gaining agreements.
(e) OPERATING ASSISTANCE AND DEVELOPMENT IN-
COME.—
(1) CALCULATION OF OPERATING SUBSIDY.—
The grant amounts received under this title by a
public housing agency used for operating fund activi-
145
HR 2 RFS
ties under section 203(a)(2) that are allocated to a
public housing development managed by a resident
management corporation shall not be less than per
unit monthly amount of such assistance used by the
public housing agency in the previous year, as deter-
mined on an individual development basis.
(2) CONTRACT REQUIREMENTS.—Any contract
for management of a public housing development en-
tered into by a public housing agency and a resident
management corporation shall specify the amount of
income expected to be derived from the development
itself (from sources such as rents and charges) and
the amount of income funds to be provided to the
development from the other sources of income of the
agency (such as assistance for operating activities
under section 203(a)(2), interest income, adminis-
trative fees, and rents).
(f) RESIDENT MANAGEMENT TECHNICAL ASSIST-
ANCE AND TRAINING.—
(1) FINANCIAL
ASSISTANCE.—To the extent
budget authority is available under this title, the
Secretary shall provide financial assistance to resi-
dent management corporations or resident councils
that obtain, by contract or otherwise, technical as-
sistance for the development of resident management
146
HR 2 RFS
entities, including the formation of such entities, the
development of the management capability of newly
formed or existing entities, the identification of the
social support needs of residents of public housing
developments, and the securing of such support. In
addition, the Secretary may provide financial assist-
ance to resident management corporations or resi-
dent councils for activities sponsored by resident or-
ganizations for economic uplift, such as job training,
economic development, security, and other self-suffi-
ciency activities beyond those related to the manage-
ment of public housing. The Secretary may require
resident councils or resident management corpora-
tions to utilize public housing agencies or other
qualified organizations as contract administrators
with respect to financial assistance provided under
this paragraph.
(2) LIMITATION ON ASSISTANCE.—The finan-
cial assistance provided under this subsection with
respect to any public housing development may not
exceed $100,000.
(3) PROHIBITION.—A resident management
corporation or resident council may not, before the
award to the corporation or council of a grant
amount under this subsection, enter into any con-
147
HR 2 RFS
tract or other agreement with any entity to provide
such entity with amounts from the grant for provid-
ing technical assistance or carrying out other activi-
ties eligible for assistance with amounts under this
subsection. Any such agreement entered into in vio-
lation of this paragraph shall be void and unenforce-
able.
(4) FUNDING.—Of any amounts made available
under section 282(1) for use under the capital fund,
the Secretary may use to carry out this subsection
$15,000,000 for fiscal year 1998.
(5) 
LIMITATION
REGARDING
ASSISTANCE
UNDER HOPE GRANT PROGRAM.—The Secretary may
not provide financial assistance under this sub-
section to any resident management corporation or
resident council with respect to which assistance for
the development or formation of such entity is pro-
vided under title III of the United States Housing
Act of 1937 (as in effect before the effective date of
the repeal under section 601(b) of this Act).
(6) TECHNICAL
ASSISTANCE
AND
CLEARING-
HOUSE.—The Secretary may use up to 10 percent of
the amount made available pursuant to paragraph
(4)—
148
HR 2 RFS
(A) to provide technical assistance, directly
or by grant or contract, and
(B) to receive, collect, process, assemble,
and disseminate information,
in connection with activities under this subsection.
(g) ASSESSMENT AND REPORT BY SECRETARY.—Not
later than 3 years after the date of the enactment of this
Act, the Secretary shall—
(1) conduct an evaluation and assessment of
resident management, and particularly of the effect
of resident management on living conditions in pub-
lic housing; and
(2) submit to the Congress a report setting
forth the findings of the Secretary as a result of the
evaluation and assessment and including any rec-
ommendations the Secretary determines to be appro-
priate.
(h) APPLICABILITY.—Any management contract be-
tween a public housing agency and a resident management
corporation that is entered into after the date of the enact-
ment of the Stewart B. McKinney Homeless Assistance
Amendments Act of 1988 shall be subject to this section
and any regulations issued to carry out this section.
149
HR 2 RFS
Subtitle D—Homeownership
SEC. 251. RESIDENT HOMEOWNERSHIP PROGRAMS.
(a) IN GENERAL.—A public housing agency may
carry out a homeownership program in accordance with
this section and the local housing management plan of the
agency to make public housing dwelling units, public hous-
ing developments, and other housing projects available for
purchase by low-income families. An agency may transfer
a unit only pursuant to a homeownership program ap-
proved by the Secretary. Notwithstanding section 107, the
Secretary may approve a local housing management plan
without approving the portion of the plan regarding a
homeownership program pursuant to this section. In the
case of the portion of a plan regarding the homeownership
program that is submitted separately pursuant to the pre-
ceding sentence, the Secretary shall approve or disapprove
such portion not later than 60 days after the submission
of such portion.
(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 public housing
agency.
(c) ELIGIBLE PURCHASERS.—
150
HR 2 RFS
(1) LOW-INCOME REQUIREMENT.—Only low-in-
come families assisted by a public housing agency,
other low-income families, and entities formed to fa-
cilitate such sales by purchasing units for resale to
low-income families shall be eligible to purchase
housing under a homeownership program under this
section.
(2) OTHER REQUIREMENTS.—A public housing
agency may establish other requirements or limita-
tions for families to purchase housing under a home-
ownership program under this section, including re-
quirements or limitations regarding employment or
participation in employment counseling or training
activities, criminal activity, participation in home-
ownership counseling programs, evidence of regular
income, and other requirements. In the case of pur-
chase by an entity for resale to low-income families,
the entity shall sell the units to low-income families
within 5 years from the date of its acquisition of the
units. The entity shall use any net proceeds from the
resale and from managing the units, as determined
in accordance with guidelines of the Secretary, for
housing purposes, such as funding resident organiza-
tions and reserves for capital replacements.
151
HR 2 RFS
(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 public housing agency for sale under this
program in any manner considered appropriate by the
agency (including sale to a resident management corpora-
tion).
(e) DOWNPAYMENT REQUIREMENT.—
(1) IN
GENERAL.—Each family purchasing
housing under a homeownership program under this
section shall be required to provide from its own re-
sources a downpayment in connection with any loan
for acquisition of the housing, in an amount deter-
mined by the public housing agency. Except as pro-
vided in paragraph (2), the agency shall permit the
family to use grant amounts, gifts from relatives,
contributions from private sources, and similar
amounts as downpayment amounts in such pur-
chase,
(2) DIRECT FAMILY CONTRIBUTION.—In pur-
chasing housing pursuant to this section, each fam-
ily shall contribute an amount of the downpayment,
from resources of the family other than grants, gifts,
contributions, or other similar amounts referred to
152
HR 2 RFS
in paragraph (1), that is not less than 1 percent of
the purchase price.
(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 public
housing agency considers appropriate under the program,
including ownership in fee simple, a condominium interest,
an interest in a limited dividend cooperative, a shared ap-
preciation interest with a public housing agency providing
financing.
(g) RESALE.—
(1) AUTHORITY
AND
LIMITATION.—A home-
ownership program under this section shall permit
the resale of a dwelling unit purchased under the
program by an eligible family, but shall provide such
limitations on resale as the agency considers appro-
priate (whether the family purchases directly from
the agency or from another entity) for the agency to
recapture—
(A) from any economic gain derived from
any such resale occurring during the 5-year pe-
riod beginning upon purchase of the dwelling
unit by the eligible family, a portion of the
amount of any financial assistance provided
153
HR 2 RFS
under the program by the agency to the eligible
family; and
(B) after the expiration of such 5-year pe-
riod, only such amounts as are equivalent to the
assistance provided under this section by the
agency to the purchaser.
(2) CONSIDERATIONS.—The limitations referred
to in paragraph (1) may provide for consideration of
the aggregate amount of assistance provided under
the program to the family, the contribution to equity
provided by the purchasing eligible family, the period
of time elapsed between purchase under the home-
ownership program and resale, the reason for resale,
any improvements to the property made by the eligi-
ble family, any appreciation in the value of the prop-
erty, and any other factors that the agency considers
appropriate.
(h) SALE OF CERTAIN SCATTERED-SITE HOUSING.—
A public housing agency that the Secretary has deter-
mined to be a high-performing agency may use the pro-
ceeds from the disposition of scattered-site public housing
under a homeownership program under this section to
purchase replacement scattered-site dwelling units, to the
extent such use is provided for in the local housing man-
agement plan for the agency approved under section 107.
154
HR 2 RFS
Any such replacement dwelling units shall be considered
public housing for purposes of this Act.
(i) INAPPLICABILITY
OF
DISPOSITION
REQUIRE-
MENTS.—The provisions of section 261 shall not apply to
disposition of public housing dwelling units under a home-
ownership program under this section, except that any
dwelling units sold under such a program shall be treated
as public housing dwelling units for purposes of sub-
sections (e) and (f) of section 261.
Subtitle 
E—Disposition, 
Demoli-
tion, and Revitalization of De-
velopments
SEC. 261. REQUIREMENTS FOR DEMOLITION AND DISPOSI-
TION OF DEVELOPMENTS.
(a) AUTHORITY AND FLEXIBILITY.—A public hous-
ing agency may demolish, dispose of, or demolish and dis-
pose of nonviable or nonmarketable public housing devel-
opments of the agency in accordance with this section.
(b) LOCAL HOUSING MANAGEMENT PLAN REQUIRE-
MENT.—A public housing agency may take any action to
demolish or dispose of a public housing development (or
a portion of a development) only if such demolition or dis-
position complies with the provisions of this section and
is in accordance with the local housing management plan
for the agency. Notwithstanding section 107, the Sec-
155
HR 2 RFS
retary may approve a local housing management plan
without approving the portion of the plan covering demoli-
tion or disposition pursuant to this section.
(c) PURPOSE OF DEMOLITION OR DISPOSITION.—A
public housing agency may demolish or dispose of a public
housing development (or portion of a development) only
if the agency provides sufficient evidence to the Secretary
that—
(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 public housing agency;
156
HR 2 RFS
(5) retention of the development (or portion
thereof) is not in the best interests of the residents
of the public housing agency because—
(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 public
housing agency;
(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 agency de-
termines are consistent with the best interests
of the residents and the agency and not incon-
sistent with other provisions of this Act;
(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
157
HR 2 RFS
(B) the demolition or disposition is inci-
dental to, or does not interfere with, continued
operation of a development.
The evidence required under this subsection shall include,
as a condition of demolishing or disposing of a public
housing development (or portion of a development) esti-
mated to have a value of $100,000 or more, a statement
of the market value of the development (or portion), which
has been determined by a party not having any interest
in the housing or the public housing agency and pursuant
to not less than 2 professional, independent appraisals of
the development (or portion).
(d) CONSULTATION.—A public housing agency may
demolish or dispose of a public housing development (or
portion of a development) only if the agency 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) COUNSELING.—A public housing agency may de-
molish or dispose of a public housing development (or a
portion of a development) only if the agency provides any
necessary counseling for families displaced by such action
to facilitate relocation.
158
HR 2 RFS
(f) 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 public housing agency, appropriate to serve
the needs of the residents.
(g) RELOCATION.—A public housing agency that de-
molishes 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, including
choice-based assistance under title III (provided that
159
HR 2 RFS
with respect to choice-based assistance, the preced-
ing requirement shall be fulfilled only upon the relo-
cation of the such family into such housing);
(2) the public housing agency does not take any
action to dispose of any unit until any resident to
be displaced is relocated in accordance with para-
graph (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).
(h) RIGHT OF FIRST REFUSAL FOR RESIDENT ORGA-
NIZATIONS
AND
RESIDENT
MANAGEMENT
CORPORA-
TIONS.—
(1) IN
GENERAL.—A public housing agency
may not dispose of a public housing development (or
portion of a development) unless the agency has, be-
fore such disposition, offered to sell the property, as
provided in this subsection, to each resident organi-
zation and resident management corporation operat-
ing at the development for continued use as low-in-
come housing, and no such organization or corpora-
tion purchases the property pursuant to such offer.
A resident organization may act, for purposes of this
160
HR 2 RFS
subsection, through an entity formed to facilitate
homeownership under subtitle D.
(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 agency of interest in purchasing
the property, which shall be the 30-day period
beginning on the date that the agency first pro-
vides 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 agency 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 agency to purchase the
161
HR 2 RFS
property for a price equal to or exceeding the
applicable offer price under paragraph (3).
The agency shall sell the property pursuant to any
purchase offer described in subparagraph (C).
(3) TERMS OF OFFER.—An offer by a public
housing agency to sell a property in accordance with
this subsection shall involve a purchase price that re-
flects the market value of the property, the reason
for the sale, the impact of the sale on the surround-
ing community, and any other factors that the agen-
cy considers appropriate.
(i) INFORMATION FOR LOCAL HOUSING MANAGE-
MENT PLAN.—A public housing agency may demolish or
dispose of a public housing development (or portion there-
of) only if it includes in the applicable local housing man-
agement plan information sufficient to describe—
(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), and includes evidence of the market
value of the development (or portion) required under
subsection (c);
(3) how the consultations required under sub-
section (d) will be made;
162
HR 2 RFS
(4) how the net proceeds of the disposition will
be used in accordance with subsection (f);
(5) how the agency will relocate residents, if
necessary, as required under subsection (g); and
(6) that the agency has offered the property for
acquisition by resident organizations and resident
management corporations in accordance with sub-
section (h).
(j) SITE AND NEIGHBORHOOD STANDARDS EXEMP-
TION.—Notwithstanding any other provision of law, a
public housing agency may provide for development of
public housing dwelling units on the same site or in the
same neighborhood as any dwelling units demolished, pur-
suant to a plan under this section, but only if such devel-
opment provides for significantly fewer dwelling units.
(k) TREATMENT OF REPLACEMENT UNITS.—
(1) PROVISION
OF
OTHER
HOUSING
ASSIST-
ANCE.—In connection with any demolition or dis-
position of public housing under this section, a pub-
lic housing agency may provide for other housing as-
sistance for low-income families that is consistent
with the low-income housing needs of the commu-
nity, including—
(A) the provision of choice-based assistance
under title III; and
163
HR 2 RFS
(B) the development, acquisition, or lease
by the agency of dwelling units, which dwelling
units shall—
(i) be eligible to receive assistance
with grant amounts provided under this
title; and
(ii) be made available for occupancy,
operated, and managed in the manner re-
quired for public housing, and subject to
the other requirements applicable to public
housing dwelling units.
(2) TREATMENT
OF
INDIVIDUALS.—For pur-
poses of this subsection, an individual between the
ages of 18 and 21, inclusive, shall, at the discretion
of the individual, be considered a family.
(l) USE OF NEW DWELLING UNITS.—A public hous-
ing agency demolishing or disposing of a public housing
development (or portion thereof) under this section shall
seek, where practical, to ensure that, if housing units are
provided on any property that was previously used for the
public housing demolished or disposed of, not less than
25 percent of such dwelling units shall be dwelling units
reserved for occupancy during the remaining useful life of
the housing by low-income families.
164
HR 2 RFS
(m) PERMISSIBLE RELOCATION WITHOUT PLAN.—
If a public housing agency determines that because of an
emergency situation public housing dwelling units are se-
verely uninhabitable, the public housing agency may relo-
cate residents of such dwelling units before the submission
of a local housing management plan providing for demoli-
tion or disposition of such units.
(n) CONSOLIDATION
OF OCCUPANCY WITHIN
OR
AMONG BUILDINGS.—Nothing in this section may be con-
strued to prevent a public housing agency from consolidat-
ing occupancy within or among buildings of a public hous-
ing development, or among developments, or with other
housing for the purpose of improving living conditions of,
or providing more efficient services to, residents.
(o) DE MINIMIS EXCEPTION TO DEMOLITION RE-
QUIREMENTS.—Notwithstanding any other provision of
this section, in any 5-year period a public housing agency
may demolish not more than the lesser of 5 dwelling units
or 5 percent of the total dwelling units owned and oper-
ated by the public housing agency, without providing for
such demolition in a local housing management 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.
165
HR 2 RFS
SEC. 262. DEMOLITION, SITE REVITALIZATION, REPLACE-
MENT HOUSING, AND CHOICE-BASED ASSIST-
ANCE GRANTS FOR DEVELOPMENTS.
(a) PURPOSES.—The purpose of this section is to
provide assistance to public housing agencies for the pur-
poses of—
(1) reducing the density and improving the liv-
ing environment for public housing residents of se-
verely 
distressed 
public 
housing 
developments
through the demolition of obsolete public housing de-
velopments (or portions thereof);
(2) revitalizing sites (including remaining public
housing dwelling units) on which such public hous-
ing developments are located and contributing to the
improvement of the surrounding neighborhood;
(3) providing housing that will avoid or de-
crease the concentration of very low-income families;
and
(4) providing choice-based assistance in accord-
ance with title III for the purpose of providing re-
placement housing and assisting residents to be dis-
placed by the demolition.
(b) GRANT AUTHORITY.—The Secretary may make
grants available to public housing agencies as provided in
this section.
166
HR 2 RFS
(c) CONTRIBUTION REQUIREMENT.—The Secretary
may not make any grant under this section to any appli-
cant unless the applicant certifies to the Secretary that
the applicant will supplement the amount of assistance
provided under this section with an amount of funds from
sources other than this section equal to not less than 5
percent of the amount provided under this section, includ-
ing amounts from other Federal sources, any State or
local government sources, any private contributions, and
the value of any in-kind services or administrative costs
provided.
(d) ELIGIBLE ACTIVITIES.—Grants under this sec-
tion may be used for activities to carry out revitalization
programs for severely distressed public housing, includ-
ing—
(1) architectural and engineering work, includ-
ing the redesign, reconstruction, or redevelopment of
a severely distressed public housing development, in-
cluding the site on which the development is located;
(2) the demolition, sale, or lease of the site, in
whole or in part;
(3) covering the administrative costs of the ap-
plicant, which may not exceed such portion of the
assistance provided under this section as the Sec-
retary may prescribe;
167
HR 2 RFS
(4) payment of reasonable legal fees;
(5) providing reasonable moving expenses for
residents displaced as a result of the revitalization of
the development;
(6) economic development activities that pro-
mote the economic self-sufficiency of residents under
the revitalization program;
(7) necessary management improvements;
(8) leveraging other resources, including addi-
tional housing resources, retail supportive services,
jobs, and other economic development uses on or
near the development that will benefit future resi-
dents of the site;
(9) replacement housing and housing assistance
under title III;
(10) transitional security activities; and
(11) necessary supportive services, except that
not more than 10 percent of the amount of any
grant may be used for activities under this para-
graph.
(e) APPLICATION AND SELECTION.—
(1) APPLICATION.—An application for a grant
under this section shall contain such information
and shall be submitted at such time and in accord-
168
HR 2 RFS
ance with such procedures, as the Secretary shall
prescribe.
(2) SELECTION CRITERIA.—The Secretary shall
establish selection criteria for the award of grants
under this section, which shall include—
(A) the relationship of the grant to the
local housing management plan for the public
housing agency and how the grant will result in
a revitalized site that will enhance the neighbor-
hood in which the development is located;
(B) the capability and record of the appli-
cant public housing agency, or any alternative
management agency for the agency, for manag-
ing large-scale redevelopment or modernization
projects, meeting construction timetables, and
obligating amounts in a timely manner;
(C) the extent to which the public housing
agency could undertake such activities without
a grant under this section;
(D) the extent of involvement of residents,
State and local governments, private service
providers, financing entities, and developers, in
the development of a revitalization program for
the development; and
169
HR 2 RFS
(E) the amount of funds and other re-
sources to be leveraged by the grant.
The Secretary shall give preference in selection to
any public housing agency that has been awarded a
planning grant under section 24(c) of the United
States Housing Act of 1937 (as in effect before the
effective date of the repeal under section 601(b) of
this Act).
(f) COST LIMITS.—Subject to the provisions of this
section, the Secretary—
(1) shall establish cost limits on eligible activi-
ties under this section sufficient to provide for effec-
tive revitalization programs; and
(2) may establish other cost limits on eligible
activities under this section.
(g) DEMOLITION AND REPLACEMENT.—Any severely
distressed public housing demolished or disposed of pursu-
ant to a revitalization plan and any public housing pro-
duced in lieu of such severely distressed housing, shall be
subject to the provisions of section 261.
(h) ADMINISTRATION
BY OTHER ENTITIES.—The
Secretary may require a grantee under this section to
make arrangements satisfactory to the Secretary for use
of an entity other than the public housing agency to carry
out activities assisted under the revitalization plan, if the
170
HR 2 RFS
Secretary determines that such action will help to effec-
tuate the purposes of this section.
(i) WITHDRAWAL OF FUNDING.—If a grantee under
this section does not proceed expeditiously, in the deter-
mination of the Secretary, the Secretary shall withdraw
any grant amounts under this section that have not been
obligated by the public housing agency. The Secretary
shall redistribute any withdrawn amounts to one or more
public housing agencies eligible for assistance under this
section or to one or more other entities capable of proceed-
ing expeditiously in the same locality in carrying out the
revitalization plan of the original grantee.
(j) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) 
APPLICANT.—The 
term 
‘‘applicant’’
means—
(A) any public housing agency that is not
designated as troubled pursuant to section
533(a);
(B) any public housing agency or private
housing management agent selected, or receiver
appointed pursuant, to section 545; and
(C) any public housing agency that is des-
ignated as troubled pursuant to section 533(a)
that—
171
HR 2 RFS
(i) is so designated principally for rea-
sons that will not affect the capacity of the
agency to carry out a revitalization pro-
gram;
(ii) is making substantial progress to-
ward eliminating the deficiencies of the
agency; or
(iii) is otherwise determined by the
Secretary to be capable of carrying out a
revitalization program.
(2) PRIVATE NONPROFIT CORPORATION.—The
term ‘‘private nonprofit organization’’ means any
private nonprofit organization (including a State or
locally chartered nonprofit organization) that—
(A) is incorporated under State or local
law;
(B) has no part of its net earnings inuring
to the benefit of any member, founder, contrib-
utor, or individual;
(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 very low-income fami-
lies.
172
HR 2 RFS
(3) SEVERELY
DISTRESSED
PUBLIC
HOUS-
ING.—The term ‘‘severely distressed public housing’’
means a public housing development (or building in
a development) that—
(A) requires major redesign, reconstruction
or redevelopment, or partial or total demolition,
to correct serious deficiencies in the original de-
sign (including inappropriately high population
density), deferred maintenance, physical dete-
rioration or obsolescence of major systems and
other deficiencies in the physical plant of the
development;
(B) is a significant contributing factor to
the physical decline of and disinvestment by
public and private entities in the surrounding
neighborhood;
(C)(i) is occupied predominantly by fami-
lies who are very low-income families with chil-
dren, are unemployed, and dependent on var-
ious forms of public assistance; and
(ii) has high rates of vandalism and crimi-
nal activity (including drug-related criminal ac-
tivity) in comparison to other housing in the
area;
173
HR 2 RFS
(D) cannot be revitalized through assist-
ance under other programs, such as the public
housing block grant program under this title, or
the programs under sections 9 and 14 of the
United States Housing Act of 1937 (as in effect
before the effective date of the repeal under sec-
tion 601(b) of this Act), because of cost con-
straints and inadequacy of available amounts;
and
(E) in the case of individual buildings, is,
in the Secretary’s determination, sufficiently
separable from the remainder of the develop-
ment of which the building is part to make use
of the building feasible for purposes of this sec-
tion.
(4) SUPPORTIVE
SERVICES.—The term ‘‘sup-
portive services’’ includes all activities that will pro-
mote upward mobility, self-sufficiency, and improved
quality of life for the residents of the public housing
development involved, including literacy training, job
training, day care, and economic development activi-
ties.
(k) ANNUAL REPORT.—The Secretary shall submit
to the Congress an annual report setting forth—
174
HR 2 RFS
(1) the number, type, and cost of public hous-
ing units revitalized pursuant to this section;
(2) the status of developments identified as se-
verely distressed public housing;
(3) the amount and type of financial assistance
provided under and in conjunction with this section;
and
(4) the recommendations of the Secretary for
statutory and regulatory improvements to the pro-
gram established by this section.
(l) FUNDING.—
(1) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated for grants
under this section $500,000,000 for each of fiscal
years 1998, 1999, and 2000.
(2) TECHNICAL ASSISTANCE.—Of the amount
appropriated pursuant to paragraph (1) for any fis-
cal year, the Secretary may use not more than 0.50
percent for technical assistance. Such assistance
may be provided directly or indirectly by grants, con-
tracts, or cooperative agreements, and shall include
training, and the cost of necessary travel for partici-
pants in such training, by or to officials of the De-
partment of Housing and Urban Development, of
public housing agencies, and of residents.
175
HR 2 RFS
(m) SUNSET.—No assistance may be provided under
this section after September 30, 2000.
(n) TREATMENT
OF PREVIOUS SELECTIONS.—A
public housing agency that has been selected to receive
amounts under the notice of funding availability for fiscal
year 1996 amounts for the HOPE VI program (provided
under the heading ’’PUBLIC HOUSING DEMOLITION, SITE
REVITALIZATION, AND REPLACEMENT HOUSING GRANTS’’
in title II of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agen-
cies Appropriations Act, 1996 (42 U.S.C. 1437l note) (en-
acted as section 101(e) of Omnibus Consolidated Rescis-
sions and Appropriations Act of 1996 (Public Law 104–
134; 110 Stat. 1321–269)) may apply to the Secretary
of Housing and Urban Development for a waiver of the
total development cost rehabilitation requirement other-
wise applicable under such program, and the Secretary
may waive such requirement, but only (1) to the extent
that a designated site for use of such amounts does not
have dwelling units that are considered to be obsolete
under Department of Housing and Urban Development
regulations in effect upon the date of the enactment of
this Act, and (2) if the Secretary determines that the pub-
lic housing agency will continue to comply with the pur-
poses of the program notwithstanding such waiver.
176
HR 2 RFS
SEC. 263. VOLUNTARY VOUCHER SYSTEM FOR PUBLIC
HOUSING.
(a) IN GENERAL.—A public housing agency may con-
vert any public housing development (or portion thereof)
owned and operated by the agency to a system of choice-
based rental housing assistance under title III, in accord-
ance with this section.
(b) ASSESSMENT
AND PLAN REQUIREMENT.—In
converting under this section to a choice-based rental
housing assistance system, the public housing agency shall
develop a conversion assessment and plan under this sub-
section, in consultation with the appropriate public offi-
cials and with significant participation by the residents of
the development (or portion thereof), which assessment
and plan shall—
(1) be consistent with and part of the local
housing management plan for the agency;
(2) describe the conversion and future use or
disposition of the public housing development, in-
cluding an impact analysis on the affected commu-
nity;
(3) include a cost analysis that demonstrates
whether or not the cost (both on a net present value
basis and in terms of new budget authority require-
ments) of providing choice-based rental housing as-
sistance under title III for the same families in sub-
177
HR 2 RFS
stantially similar dwellings over the same period of
time is less expensive than continuing public housing
assistance in the public housing development pro-
posed for conversion for the remaining useful life of
the development;
(4) identify the actions, if any, that the public
housing agency will take with regard to converting
any public housing development or developments (or
portions thereof) of the agency to a system of
choice-based rental housing assistance under title
III;
(5) require the public housing agency to—
(A) notify the families residing in the pub-
lic housing development subject to the conver-
sion, in accordance with any guidelines issued
by the Secretary governing such notifications,
that—
(i) the development will be removed
from the inventory of the public housing
agency; and
(ii) the families displaced by such ac-
tion will receive choice-based housing as-
sistance;
178
HR 2 RFS
(B) provide any necessary counseling for
families displaced by such action to facilitate re-
location; and
(C) provide any reasonable relocation ex-
penses for families displaced by such action;
and
(6) ensure that each family that is a resident
of the development is relocated to other safe, clean,
and healthy affordable housing, which is, to the
maximum extent practicable, housing of the family’s
choice, including choice-based assistance under title
III (provided that with respect to choice-based as-
sistance, the preceding requirement shall be fulfilled
only upon the relocation of such family into such
housing).
(c) STREAMLINED ASSESSMENT AND PLAN.—At the
discretion of the Secretary or at the request of a public
housing agency, the Secretary may waive any or all of the
requirements of subsection (b) or otherwise require a
streamlined assessment with respect to any public housing
development or class of public housing developments.
(d) IMPLEMENTATION OF CONVERSION PLAN.—
(1) IN
GENERAL.—A public housing agency
may implement a conversion plan only if the conver-
179
HR 2 RFS
sion assessment under this section demonstrates
that the conversion—
(A) will not be more expensive than con-
tinuing to operate the public housing develop-
ment (or portion thereof) as public housing;
and
(B) will principally benefit the residents of
the public housing development (or portion
thereof) to be converted, the public housing
agency, and the community.
(2) DISAPPROVAL.—The Secretary shall dis-
approve a conversion plan only if the plan is plainly
inconsistent with the conversion assessment under
subsection (b) or there is reliable information and
data available to the Secretary that contradicts that
conversion assessment.
(e) OTHER REQUIREMENTS.—To the extent approved
by the Secretary, the funds used by the public housing
agency to provide choice-based rental housing assistance
under title III shall be added to the housing assistance
payment contract administered by the public housing
agency or any entity administering the contract on behalf
of the public housing agency.
(f) SAVINGS PROVISION.—This section does not af-
fect any contract or other agreement entered into under
180
HR 2 RFS
section 22 of the United States Housing Act of 1937 (as
such section existed before the effective date of the repeal
under section 601(b) of this Act).
Subtitle F—Mixed-Finance Public
Housing
SEC. 271. AUTHORITY.
Notwithstanding sections 203 and 262, the Secretary
may, upon such terms and conditions as the Secretary
may prescribe, authorize a public housing agency to pro-
vide for the use of grant amounts allocated and provided
from the capital fund or from a grant under section 262,
to produce mixed- finance housing developments, or re-
place or revitalize existing public housing dwelling units
with mixed-finance housing developments, but only if the
agency submits to the Secretary a plan for such housing
that is approved pursuant to section 273 by the Secretary.
SEC. 272. MIXED-FINANCE HOUSING DEVELOPMENTS.
(a) IN GENERAL.—For purposes of this subtitle, the
term ‘‘mixed-finance housing’’ means low-income housing
or mixed-income housing (as described in section
221(c)(2)) for which the financing for production or revi-
talization is provided, in part, from entities other than the
public housing agency.
(b) PRODUCTION.—A mixed-finance housing develop-
ment shall be produced or revitalized, and owned—