SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Public Housing Improvement Act of 
1994''.

SEC. 2. REPEAL OF 1-FOR-1 REPLACEMENT REQUIREMENT.

    (a) In General.--Section 18 of the United States Housing Act of 
1937 (42 U.S.C. 1437p) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by inserting ``and'' after 
                the semicolon at the end;
                    (B) in paragraph (2), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking paragraph (3); and
            (2) in subsection (c)--
                    (A) by striking the paragraph designation for 
                paragraph (1); and
                    (B) by striking paragraph (2).
    (b) Effective Date.--The amendments under subsection (a) shall be 
made and shall take effect on October 1, 1994.

SEC. 3. USE OF MODERNIZATION FUNDS FOR COST-EFFECTIVE NEW CONSTRUCTION.

    Section 14 of the United States Housing Act of 1937 (42 U.S.C. 
1437l) is amended--
            (1) in subsection (a)(1), by inserting before the semicolon 
        the following: ``or replace existing public housing projects 
        whose physical condition is such that replacement units may be 
        newly constructed at a cost not greater than the cost of 
        improving such units'';
            (2) in subsection (b)(1), by inserting after ``public 
        housing projects'' the following: ``(or replacing such projects 
        through new construction pursuant to subsection (f)(3))'';
            (3) in subsection (d)--
                    (A) in paragraph (1)--
                            (i) by striking ``and'' before ``(B)''; and
                            (ii) by inserting before the semicolon at 
                        the end the following: ``, and (C) for any 
                        project for which replacement through new 
                        construction is proposed under subsection 
                        (f)(3), the estimated cost of the physical 
                        improvements to and replacements for the 
                        project under this paragraph and paragraph (2) 
                        and the estimated cost of the new 
                        construction''; and
                    (B) in paragraph (4)(A)--
                            (i) in clause (i), by striking ``and'' at 
                        the end; and
                            (ii) by adding at the end the following new 
                        clause:
                            ``(iii) to replace any projects through new 
                        construction pursuant to subsection (f)(3); 
                        and'';
            (4) in subsection (e)(1)--
                    (A) in subparagraph (A)--
                            (i) in clause (ii), by striking ``and'' at 
                        the end;
                            (ii) in clause (iii), by inserting ``and'' 
                        after the semicolon at the end; and
                            (iii) by inserting after clause (iii) the 
                        following new clause:
                            ``(iv) for any project for which 
                        replacement through new construction is 
                        proposed under subsection (f)(3), the estimated 
                        cost of the physical improvements to and 
                        replacements for the project under this 
                        subparagraph and the estimated cost of the new 
                        construction''; and
                    (B) in subparagraph (D)--
                            (i) in clause (i), by striking ``and'' at 
                        the end;
                            (ii) by redesignating clause (ii) as clause 
                        (iii); and
                            (iii) by inserting after clause (i) the 
                        following new clause:
                            ``(ii) to replace any projects through new 
                        construction pursuant to subsection (f)(3); 
                        and''; and
            (5) in subsection (f), by adding at the end the following 
        new paragraph:
    ``(3) A public housing agency may use financial assistance received 
under subsection (b) for development costs of new public housing 
projects to replace a project otherwise eligible for assistance under 
this section and for costs of demolition or disposition of such 
projects replaced, but only if--
            ``(A) the sum of such development and demolition or 
        disposition costs does not exceed the sum of the costs of the 
        physical improvements necessary to the project replaced to meet 
        the standards established by the Secretary under subsection (j) 
        and the costs of replacement equipment systems and structural 
        elements that will be required during the ensuing 5-year 
        period; and
            ``(B) the public housing agency enters into an agreement 
        with the Secretary providing that the public housing developed 
        will comply with any requirements pursuant to this Act 
        applicable to public housing developed under a contract under 
        section 5 for contributions for development costs of public 
        housing.''.

SEC. 4. MANDATORY PRIVATE MANAGEMENT OF CHRONICALLY TROUBLED PUBLIC 
              HOUSING AGENCIES.

    Section 6(j) of the United States Housing Act of 1937 (42 U.S.C. 
1437d(j)) is amended--
            (1) by redesignating paragraph (4) as paragraph (5); and
            (2) by inserting after paragraph (3) the following new 
        paragraph:
    ``(4)(A) Notwithstanding any other provision of law or of any 
contract for contributions, the Secretary shall transfer the management 
of public housing projects owned or operated by a troubled public 
housing agency to a private management entity selected by the Secretary 
if, for any year--
            ``(i) the public housing is designated pursuant to 
        paragraph (2) as a troubled public housing agency: and
            ``(ii) for the preceding 5 years, the agency was designated 
        as a troubled public housing agency.
    ``(B) In selecting a private management entity to manage public 
housing pursuant to this paragraph, the Secretary shall consult with 
residents of the public housing (including any resident council for the 
housing).
    ``(C) In transferring management of public housing under this 
paragraph, the Secretary shall enter into a contract with the private 
management entity. The contract shall meet the requirements of section 
25(h)(1), shall provide for the private management entity to 
periodically consult with residents of the housing (including any 
resident council for the housing) regarding management of and living 
conditions in the housing, and may make operating subsidies and funding 
for capital improvements available to the private management entity 
managing the public housing pursuant to this paragraph in the manner 
provided under section 25 for managers of eligible housing (as such 
term is defined in such section).
    ``(D) The provisions of section 25(j) relating to managers of 
eligible housing under such section shall apply with respect to any 
private management entity managing public housing pursuant to this 
paragraph.
    ``(E) The Secretary shall transfer management of public housing 
that was transferred to a private management agency under this 
paragraph back to the public housing agency immediately upon the 
removal of the designation of the agency as a troubled public housing 
agency.''.
Output: Public Housing Improvement Act of 1994 - Amends the United States Housing Act of 1937 to repeal the public housing demolition one-for-one replacement requirement. 
Permits the use of modernization funds for cost-effective new construction. 
Directs the Secretary of Housing and Urban Development to transfer the management of chronically troubled public housing agencies to private management.