[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2 Reported in House (RH)]





                                                  Union Calendar No. 51

105th CONGRESS

  1st Session

                                H. R. 2

                          [Report No. 105-76]

_______________________________________________________________________

                                 A BILL

To repeal the United States Housing Act of 1937, deregulate the public 
 housing program and the program for rental housing assistance for low-
income families, and increase community control over such programs, and 
                          for other purposes.

_______________________________________________________________________

                             April 25, 1997

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed





                                                  Union Calendar No. 51
105th CONGRESS
  1st Session
                                 H. R. 2

                          [Report No. 105-76]

To repeal the United States Housing Act of 1937, deregulate the public 
 housing program and the program for rental housing assistance for low-
income families, and increase community control over such programs, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 7, 1997

Mr. Lazio of New York introduced the following bill; which was referred 
           to the Committee on Banking and Financial Services

                             April 25, 1997

  Additional sponsors: Mr. Ney, Mr. Castle, Mr. Barr of Georgia, Mr. 
       Hill, Ms. Pryce of Ohio, Mr. Sensenbrenner, and Mr. Oxley

                             April 25, 1997

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on January 
                                7, 1997]

_______________________________________________________________________

                                 A BILL


 
To repeal the United States Housing Act of 1937, deregulate the public 
 housing program and the program for rental housing assistance for low-
income families, and increase community control over such programs, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives 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. 103. Organization of public housing agencies.
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

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.
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.

    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 housing.
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 alcohol 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 
                            activities.
Sec. 706. Use of American products.
Sec. 707. Consultation with affected areas in settlement of litigation.
Sec. 708. Use of assisted housing by aliens.
Sec. 709. 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 families and 
                individuals seeking affordable homes that are safe, 
                clean, and healthy and, in particular, 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 national 
                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 fostering the development of a 
                healthy marketplace and allow families to prosper 
                without government 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 promote and protect the independent and collective 
actions 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 providing decent 
        and affordable housing for all citizens through the efforts and 
        encouragement of Federal, State, and local governments, and by 
        the independent and collective actions of private citizens, 
        organizations, and the private sector.

                      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 housing 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 effective 
        management of public housing agencies;
            (5) creating incentives and economic opportunities for 
        residents of dwelling units assisted by public housing agencies 
        to work, become self-sufficient, and transition out of public 
        housing and federally assisted dwelling units;
            (6) recreating the existing rental assistance voucher 
        program so that the use of vouchers and relationships between 
        landlords and tenants under the program operate in a manner 
        that more closely resembles the private housing market; and
            (7) remedying troubled public housing agencies and 
        replacing or revitalizing severely distressed public housing 
        developments.

SEC. 102. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Acquisition cost.--When used in reference 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 housing 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 disabilities. Such term includes 2 or more 
        persons with disabilities 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.
            (4) Drug-related criminal activity.--The term ``drug-
        related criminal activity'' means the illegal manufacture, 
        sale, distribution, use, or possession with intent to 
        manufacture, sell, distribute, or use, of a controlled 
substance (as such term is defined 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 person or a near-elderly person, respectively. Such 
        terms include 2 or more elderly persons or near-elderly 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 person'' means a 
        person who is at least 62 years of age.
            (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 ``independent living facility'' have the 
        meanings given such terms in section 811(k) of the Cranston-
        Gonzalez 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 accordance 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.
            (12) Local housing management plan.--The term ``local 
        housing management plan'' means, with respect to any fiscal 
        year, the plan under section 106 of a public housing agency for 
        such fiscal year.
            (13) Low-income family.--The term ``low-income family'' 
        means a family whose income does not exceed 80 percent of the 
        median income for the area, as determined by the Secretary with 
        adjustments 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 variations 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.
            (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, operation, services, maintenance, 
        security (including the cost of security personnel), or 
        financing in connection 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 defined in 
                section 102 of the Developmental Disabilities 
                Assistance and Bill of Rights Act.
        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. Notwithstanding 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 
        dependence. The Secretary shall consult with other appropriate 
        Federal agencies to implement the preceding sentence.
            (18) Production.--When used in reference to public housing, 
        the term ``production'' means any or all undertakings necessary 
        for planning, land acquisition, financing, demolition, 
        construction, or equipment, in connection with the 
        construction, acquisition, or rehabilitation of a property for 
        use as a public housing development, including activity in 
        connection with a public housing development that is confined 
        to the reconstruction, remodeling, or repair of existing 
        buildings.
            (19) Production cost.--When used in reference to public 
        housing, the term ``production cost'' means the costs incurred 
        by a public housing agency for production of public housing and 
        the necessary financing for production (including the payment 
        of carrying charges and acquisition costs).
            (20) Public housing.--The term ``public housing'' means 
        housing, and all necessary appurtenances thereto, that--
                    (A) is low-income housing, low-income dwelling 
                units in mixed-finance housing (as provided 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 contributions 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 a corporation that meets the 
        requirements of section 234(b)(2).
            (24) Resident program.--The term ``resident programs and 
        services'' means programs and services for families residing in 
        public housing developments. Such term includes (A) the 
        development and maintenance of resident organizations which 
        participate in the management of public housing developments, 
        (B) the training of residents to manage and operate the public 
        housing development and the utilization of their services in 
management and operation of the development, (C) counseling on 
household 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 community 
when necessary for the provision of such services. To the maximum 
extent available and appropriate, existing public and private agencies 
in the community shall be used for the provision of such services.
            (25) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (26) State.--The term ``State'' means the States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, and any other 
        territory or possession of the United States and Indian 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 median family income for the area, as 
        determined by the Secretary with adjustments for smaller and 
        larger families, except that the Secretary may, for purposes 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--
            (1) is--
                    (A) a public housing agency that was authorized 
                under the United States Housing Act of 1937 to engage 
                in or assist in the development 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, municipality, 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 subsection (b).
The term does not include any entity that is an Indian housing 
authority for purposes of the United States Housing Act of 1937 (as in 
effect before the effectiveness of the Native American Housing 
Assistance and Self-Determination Act of 1996) or a tribally designated 
housing entity, as such term is defined in section 4 of the Native 
American Housing Assistance and Self-Determination Act of 1996.
    (b) Governance.--
            (1) Board of directors.--Each public housing 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 
        assisted family under title III.
            (2) Resident membership.--
                    (A) In general.--Except as provided in subparagraph 
                (B), in localities in which a public housing agency is 
                governed by a board of directors 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 responsibilities include 
                        substantial activities other 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 member's status as a resident member.
            (4) Conflicts of interest.--The Secretary shall establish 
        guidelines to prevent conflicts of interest on the part of 
        members of the board or directors or governing body of a public 
        housing agency.
            (5) Definitions.--For purposes of this subsection, 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 
                directors (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 
                                residence 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
                            (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 ``resident 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, 
                administered, 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, regulations, policies, 
standards, and procedures necessary to implement policies required 
under section 106 to be included 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 publicly available 
for review upon request.

SEC. 104. DETERMINATION OF ADJUSTED INCOME AND MEDIAN INCOME.

    (a) Adjusted Income.--For purposes of this Act, the term ``adjusted 
income'' means, with respect to a family, the difference between the 
income of the members of the family residing in a dwelling unit or the 
persons on a lease and the amount of any income exclusions for the 
family under subsections (b) and (c), as determined by the 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 following amounts:
            (1) Elderly and disabled families.--$400 for any elderly or 
        disabled family.
            (2) Medical expenses.--The amount by which 3 percent of the 
        annual family income is exceeded by the sum of--
                    (A) unreimbursed medical expenses of any elderly 
                family;
                    (B) unreimbursed medical expenses of any nonelderly 
                family, except that this subparagraph 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 extent necessary to enable 
                any member of such family (including such handicapped 
                member) to be employed.
            (3) Child care expenses.--Any reasonable child care 
        expenses necessary to enable a member of the family to be 
        employed or to further his or her education.
            (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 determining adjusted 
income, a public housing agency may, in the discretion of the agency, 
establish exclusions from the annual income of a family. Such 
exclusions may include 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-related travel.
            (2) Earned income.--An amount of any earned income of the 
        family, established at the discretion of the public housing 
        agency, which may be based on--
                    (A) all earned income of the family,
                    (B) the amount earned by particular members 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 establish.
    (d) Median Income.--In determining median incomes (of persons, 
families, or households) for an area or establishing any ceilings or 
limits based on income under this Act, the Secretary shall determine or 
establish area median incomes and income ceilings and limits for 
Westchester 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 metropolitan statistical area that does not include 
Westchester or Rockland Counties, the Secretary shall determine or 
establish area median incomes and income ceilings and limits as if such 
portion included Westchester and Rockland Counties.

SEC. 105. COMMUNITY WORK AND FAMILY SELF-SUFFICIENCY REQUIREMENTS.

    (a) Community Work Requirement.--
            (1) In general.--Except as provided in paragraph (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 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 performed 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 member of the family to comply with 
        the requirement, except 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 applicability of the requirement 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 requirements 
                applicable under other public assistance 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 subsection (d)) establishing a 
        target date by which the family intends to graduate from, 
        terminate tenancy in, or no longer receive public housing or 
        housing assistance under title III.
            (2) Rights of occupancy.--This subsection may not be 
        construed (nor may any provision of subsection (d) or (e)) to 
        create a right on the part of any public housing agency to 
        evict or terminate assistance for a family solely on the basis 
        of any failure of the family to comply with the target date 
        established 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 received, 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 
        resident.
            (4) Exemptions.--A public housing agency shall provide for 
        the exemption, from the applicability of the requirements under 
        paragraph (1), of each individual who is--
            (1) an elderly person;
            (2) a person with disabilities;
            (3) working, attending school or vocational training, or 
        otherwise complying with work requirements applicable under 
        other public assistance programs (as determined by the agencies 
        or organizations responsible for administering such programs); 
        or
            (4) 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 family that (A) receives 
        benefits for welfare or public assistance 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, participation 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 assistance under title III.
            (2) Decreases in income for failure to comply.--
        Notwithstanding the provisions of sections 225 and 322 
        (relating to family rental contributions), if the welfare or 
        public assistance benefits of a covered family are reduced 
        under a Federal, State, or local law regarding such an 
        assistance program because of any failure of any member of the 
family to comply with the conditions under the assistance program 
requiring participation in an economic 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 family rental contributions), 
        if the welfare or public assistance benefits of a covered 
        family are reduced because 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 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).
            (4) Notice.--Paragraphs (2) and (3) shall not apply to any 
        covered family before the public housing agency providing 
        assistance under this Act on behalf of the family obtains 
        written notification from the relevant welfare or public 
        assistance agency specifying that the family's benefits have 
        been reduced 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 determination under this subsection 
        through the administrative grievance procedure established 
        pursuant 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 covered families under welfare or public 
                assistance programs, as may be necessary, to provide 
                for such agencies to transfer information to facilitate 
                administration of subsection (a) and paragraphs (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 provisions designed to 
                target assistance under welfare and public assistance 
                programs to families residing in public housing 
                developments and receiving choice-based assistance 
                under title III, which may include providing for self-
                sufficiency services within such housing, providing for 
                services 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 appropriate.
                    (C) Confidentiality.--This paragraph may not be 
                construed to authorize any release of information that 
                is prohibited by, or in contravention of, any other 
                provision of Federal, State, or local law.
    (d) Community Work and Family Self-Sufficiency 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 subsection shall 
        include the following:
                    (A) Terms designed to encourage and facilitate the 
                economic self-sufficiency of the assisted family 
                entering into the agreement and the graduation of the 
                family from assisted housing to unassisted housing.
                    (B) Notice of the requirements under subsection (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 graduation from, 
                termination of tenancy in, or termination of receipt of 
                public housing or housing assistance under title III.
                    (D) Terms providing for any resources, services, 
                and assistance relating to self-sufficiency that will 
                be made available to the family, including any 
                assistance to be made available pursuant to subsection 
                (c)(7)(B) under a cooperation agreement entered into 
                under subsection (c)(7).
                    (E) Notice of the provisions of paragraphs (2) 
                through (7) of subsection (c) (relating to effect 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 assistance under title III on behalf of a 
family--
            (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 housing 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 applicable) has complied with the conditions for 
receiving such assistance and is unable to obtain employment 
notwithstanding such compliance.
    (g) Definition.--For purposes of this section, the term ``economic 
self-sufficiency program'' means any program 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.

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 enable the agency to serve 
        the needs identified pursuant 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 overview of such improvements, the 
        rationale for such improvements, and an analysis of how such 
        improvements will enable the agency to meet its goals, 
        objectives, 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.
    (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 submission of a plan under this section by a public housing 
agency, the agency may comply with requirements for submission of a 
plan under this subsection by submitting an update of the plan for the 
fiscal year.
    (c) Procedures.--The Secretary shall establish requirements and 
procedures for submission and review of plans, including requirements 
for timing and form of submission, and for the contents of such plans. 
Such procedures shall provide that a public housing agency--
            (1) shall, in conjunction with the relevant State or unit 
        of general local government, establish procedures to ensure 
        that the plan under this section is consistent with the 
        applicable comprehensive housing affordability strategy (or any 
        consolidated plan incorporating such strategy) for the 
        jurisdiction in which the public housing agency is located, in 
        accordance with title I of the Cranston-Gonzalez National 
        Affordable Housing Act; and
            (2) may, at the option of the agency, submit a plan under 
        this section together with, or as part of, the comprehensive 
        housing affordability strategy (or any consolidated plan 
        incorporating such strategy) for the relevant jurisdiction, and 
        for concomitant review of such plans submitted together.
    (d) Contents.--An annual local housing management plan under this 
section for a public housing agency shall contain the following 
information relating to the upcoming 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 
        agency intends, to the maximum extent practicable, to address 
        such needs.
            (2) Financial resources.--A statement of financial 
        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 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 population and 
                demographic data, of the unmet affordable housing needs 
                of families in the community served by the agency 
                having incomes not exceeding 30 percent of the area 
                median income 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, admissions, and occupancy of 
        families with respect to public housing dwelling units and 
        housing assistance under title III, including--
                    (A) the requirements for eligibility for such units 
                and assistance and the method and procedures by which 
                eligibility and income will be determined and verified;
                    (B) the requirements for selection and admissions 
                of eligible families for such units and assistance, 
                including any preferences and procedures established by 
                the agency and any outreach efforts;
                    (C) the procedures for assignment of families 
                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 termination of housing assistance;
                    (E) the procedures for maintaining waiting lists 
                for admissions to public housing developments of the 
                agency, which may include a system 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; and
                    (G) the fair housing policy of the agency.
            (4) Rent determination.--A statement of the policies of the 
        agency governing rents charged for public housing dwelling 
        units and rental contributions 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 statement of the rules, 
        standards, and policies of the public housing agency governing 
        maintenance and management of housing owned and operated by the 
        agency, and management of the public housing agency 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 agency and to 
                administer the operating fund distributions of the 
                agency;
                    (B) policies relating to the rental of dwelling 
                units, including policies designed to reduce vacancies;
                    (C) housing quality standards in effect pursuant to 
                sections 232 and 328 and any certifications required 
                under such sections;
                    (D) emergency and disaster plans for public 
                housing;
                    (E) priorities and improvements for management 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 housing).
            (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 improvements necessary to ensure long-term physical 
        and social viability of the developments.
            (8) Demolition and disposition.--With respect to public 
        housing developments owned or operated by the agency--
                    (A) a description of any such housing to be 
                demolished or disposed of under subtitle E of title II; 
                and
                    (B) a timetable for such demolition or disposition.
            (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 
        portions thereof) that the agency has designated or will 
        designate for occupancy by elderly and disabled families in 
        accordance with section 227 and any information required under 
        section 227(d) for such designated 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 description of any 
        homeownership programs of the agency under subtitle D of title 
        II or section 329 for the agency and the requirements and 
        assistance available under such programs.
            (12) Economic self-sufficiency and coordination with 
        welfare and other appropriate agencies.--A description of--
                    (A) policies relating to services and amenities 
                provided or offered to assisted families, including 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 assistance to 
                families participating in welfare or public assistance 
                programs;
                    (C) how the agency will implement and administer 
                section 105; and
                    (D) any policies, programs, plans, and activities 
                of the agency for the enhancement of the economic and 
                social self-sufficiency of residents assisted by the 
                programs of the agency, including rent structures to 
                encourage self-sufficiency.
            (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 development is located.
                    (C) Content.--The plan shall describe the need for 
                measures to ensure the safety of public housing 
                residents and for crime prevention measures, describe 
                any such activities conducted, or to be conducted, by 
                the agency, and provide for coordination between the 
                public housing agency and the appropriate police 
                precincts for carrying out such measures and 
                activities.
                    (D) Secretarial action.--If the Secretary 
                determines, at any time, that the security needs of a 
                development are not being adequately 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 require 
                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 additional 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 becoming 
                troubled; or
                    (B) under section 533(a) as troubled.
            (16) Asset management.--A statement of how the agency will 
        carry out its asset management functions with respect to the 
        public housing inventory 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 discuss 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 residents, conduct a public hearing, as provided 
        in the notice published under paragraph (1), regarding the 
        public housing plan or the amendment of the agency.
            (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 appropriate 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 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 under subsection (f);
                    (C) submit the plan to the Secretary in accordance 
                with this section; and
                    (D) make the submitted plan or amendment 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 
considered 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 objections, If the local official or officials again 
reject the plan, the resubmitted plan, together with the local 
official's objections, shall be submitted to the Secretary for 
approval.
    (g) Plans for Small PHA's and PHA's Administering 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 information applicable to agencies that only 
administer housing assistance under title III (and do not own or 
operate public housing). Such requirements shall waive any requirements 
under this section that the Secretary determines 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 
discretion 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 does not notify the public housing agency, as 
        required under this subsection and subsection (b), the 
        Secretary shall be considered, for purposes of this Act, to 
        have made a determination that the plan complies with the 
        requirements under section 106 and the agency shall be 
        considered to have been notified of compliance upon the 
        expiration of such 75-day period. The preceding sentence shall 
        not preclude judicial review regarding such compliance pursuant 
        to chapter 7 of title 5, United States Code, or an action 
        regarding such compliance under section 1979 of the Revised 
        Statutes of the United States (42 U.S.C. 1883).
    (b) Notice of Reasons for Determination of Noncompliance.--If the 
Secretary determines that a plan, as submitted, does not comply with 
the requirements under section 106, the Secretary shall specify in the 
notice under subsection (a) the reasons for the noncompliance and any 
modifications necessary for the plan to meet the requirements under 
section 106.
    (c) Standards for Determination of Noncompliance.--The Secretary 
may determine that a plan does not comply with the requirements under 
section 106 only if--
            (1) the plan is incomplete in significant matters required 
        under such section;
            (2) there is evidence available to the Secretary that 
        challenges, in a substantial manner, any information provided 
        in the plan;
            (3) the Secretary determines that the plan does not comply 
        with Federal law or 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) the plan plainly fails to adequately identify the needs 
        of low-income families for housing assistance in the 
        jurisdiction of the agency;
            (5) the plan plainly fails to adequately identify the 
        capital improvement needs for public housing developments in 
        the jurisdiction of the agency;
            (6) the activities identified in the plan are plainly 
        inappropriate to address the needs identified in the plan; or
            (7) the plan is inconsistent with the requirements of this 
        Act.
The Secretary shall determine that a plan does not comply with the 
requirements under section 106 if the plan does not include the 
information required under section 106(d)(2)(D).
    (d) Treatment of Existing Plans.--Notwithstanding 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 before the 
effective date of the repeal under section 601(b) of this Act) or under 
the comprehensive improvement assistance program under such section 14, 
and the Secretary has approved such plan, before January 1, 1997. The 
Secretary shall provide specific procedures and requirements for such 
authorities to amend such plans by submitting only such additional 
information as is necessary to comply with the requirements of section 
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 submission 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 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 submitted under this subsection to 
        determine whether the plan, as amended by the amendment, 
        complies with the requirements of section 106 and notify each 
        public 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 
        requirements under section 106, such notice shall indicate the 
        reasons for the noncompliance and any modifications necessary 
        for the plan to meet the requirements under section 106. If the 
        Secretary does not notify the public housing agency as required 
        under this paragraph, the plan, as amended, shall be 
        considered, for purposes of this section, to comply with the 
        requirements under section 106.
            (3) Standards for determination of noncompliance.--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 accordance 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 performance.--
        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 
        activities assisted with amounts provided under this title 
        fails to comply with the requirements under section 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 performance 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 available 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 review and comment by 
affected tenants prior to its submission 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
            (2) has a continuing capacity to carry out its local 
        housing management plan in a timely manner.
    (c) Records.--Each public housing agency shall collect, 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 defined in section 227 of the 
Housing and Urban-Rural Recovery 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 implement 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 within a reasonable period of time;
            (3) have an opportunity to examine any documents or records 
        or regulations related to the proposed 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.--A public housing agency 
shall exclude from its procedure established under subsection (a) any 
grievance concerning an eviction from or termination of tenancy in 
public housing in any State which requires that, prior to eviction, a 
resident be provided a hearing in court which the Secretary determines 
provides the basic elements of due process.
    (c) Inapplicability to Choice-Based Rental Housing Assistance.--
This section may not be construed 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.--Notwithstanding any other 
provision of law, the Secretary may retain not more than 2 percent of 
the amounts appropriated to carry out title II for any fiscal year for 
use in accordance with this section.
    (b) Use of Amounts.--Any amounts that are retained 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 emergencies, as 
        determined by the Secretary, other than such disasters;
            (3) for housing needs related to a settlement of 
        litigation, including settlement of fair housing litigation; 
        and
            (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 determination under applicable State or local 
        law) by the Secretary, 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 predetermined 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.
The Secretary shall require certification as to compliance with the 
provisions of this section before making any payment under such 
contract.
    (b) Exceptions.--Subsection (a) and the provisions relating to 
wages (pursuant to subsection (a)) in any contract 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, religion, or sex be excluded 
from participation in, be denied the benefits of, or be subjected to 
discrimination under any program or activity funded in whole or in part 
with amounts made available under this Act. Any prohibition against 
discrimination on the basis of age under the Age Discrimination Act of 
1975 or with respect to an otherwise qualified handicapped individual 
as provided in section 504 of the Rehabilitation Act of 1973 shall also 
apply to any such program or activity.
    (b) Civil Rights Compliance.--Each public housing 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 
conformity 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 Americans 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 indemnify contractors or subcontractors of the government or 
agency against costs associated with judgments of infringement 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 contract between the Secretary and 
an Indian housing authority under the United States Housing Act of 1937 
or to housing assisted under the Native American Housing Assistance and 
Self-Determination Act of 1996.

SEC. 116. REGULATIONS.

    (a) In General.--The Secretary may issue any regulations 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 subsection (a) shall not affect the 
effectiveness of any provision 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 section 202(c), for 
        assistance for low-income housing to the public housing agency 
        for each fiscal year covered by the contract; and
            (2) the agency agrees--
                    (A) to provide safe, clean, and healthy housing 
                that is affordable to low-income families and services 
                for families in such housing;
                    (B) to operate, or provide for the operation, of 
                such housing in a financially sound manner;
                    (C) to use the block grant amounts in accordance 
                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 decisions 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 actions 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 requirements 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 
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 improvement 
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 between 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 pursuant to a 
                contract or agreement; or
                    (B) the holders of any outstanding obligations of 
                the public housing agency involved for which annual 
                contributions have been pledged; or
            (2) provide for payment of block grant amounts under this 
        title in an amount exceeding the allocation 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 agency 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 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 
                determination of the Secretary) operating and 
                maintaining its public housing in a safe, clean, and 
                healthy condition, the agency may use amounts from a 
                grant under this title for any eligible activities 
                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 provided 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;
            (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 contribution, 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 Taxation 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 (exclusive of 
                any portions not assisted with amounts provided under 
                this title) are exempt from all real and personal 
                property taxes levied or imposed by the State, city, 
                county, or other political subdivision; and
                    (ii) the public housing agency makes payments in 
                lieu of taxes to such taxing authority equal to 10 
                percent of the sum, for units charged in the 
                developments of the 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 housing 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 housing agency 
                        to perform any obligation under such agreement; 
                        or
                    (B) the agency complies with the requirements 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 public housing units in any mixed-
                income developments (as such term is defined in section 
                221(c)(2)) shall be subject to any otherwise applicable 
                real property taxes imposed by the State, city, county 
                or other political subdivision.
            (2) Effect of failure to exempt from taxation.--
        Notwithstanding paragraph (1), a public housing agency that 
        does not comply with the requirements under such paragraph may 
        receive a block grant under this title, but only if the State, 
        city, county, or other political 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 required by the 
Secretary pursuant to this title.
    (g) Exception.--Notwithstanding subsection (a), the Secretary may 
make a grant under this title for a public housing agency that is not 
an eligible public housing agency but only for the period necessary to 
secure, in accordance with this title, an alternative public housing 
agency for the public housing of the ineligible agency.
    (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 expiration 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 allocated 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 redesign, 
                reconstruction, and reconfiguration of public housing 
                sites and buildings and the production of mixed-income 
                developments;
                    (B) vacancy reduction;
                    (C) addressing deferred maintenance needs and the 
                replacement of dwelling equipment;
                    (D) planned code compliance;
                    (E) management improvements;
                    (F) demolition and replacement under section 261;
                    (G) tenant relocation;
                    (H) capital expenditures to facilitate programs to 
                improve the economic empowerment and self-sufficiency 
                of public housing tenants; and
                    (I) capital expenditures to improve the security 
                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 operation of public 
                housing units;
                    (B) activities to ensure a program of routine 
                preventative maintenance;
                    (C) anti-crime and anti-drug activities, including 
                the costs of providing adequate security for public 
                housing tenants;
                    (D) activities related to the provision of 
                services, including service coordinators for elderly 
                persons or persons with disabilities;
                    (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 developments;
                    (G) the costs of insurance;
                    (H) the energy costs associated with public housing 
                units, with an emphasis on energy conservation;
                    (I) the costs of administering a public housing 
                community work program under section 105, including the 
                costs of any related insurance needs; and
                    (J) activities in connection with a homeownership 
                program for public housing residents under subtitle D, 
                including providing financing or assistance for 
                purchasing housing, or the provision of financial 
                assistance to resident management corporations or 
                resident councils to obtain training, technical 
                assistance, and educational assistance to promote 
                homeownership opportunities.
    (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 assistance under title III, or 
        appropriate site revitalization 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 percent for 
                dwelling units not in funded, on-schedule 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 reduction, or achievement of a 
                broader range of household income; and
                    (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 development 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 general local government in identifying 
        such properties.
            (2) Use of other amounts.--In addition to grant amounts 
        under this title attributable (pursuant to the formulas under 
        section 204) to the building or buildings identified under 
        paragraph (1), the Secretary may use amounts provided in 
        appropriation 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 building or buildings 
        identified under paragraph (1) and 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 conversion 
        requirement.--If the Secretary determines 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 Secretary determines 
                should have been identified under paragraph (1), or
                    (C) one or more of the buildings identified by the 
                public housing agency pursuant to paragraph (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 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.--Notwithstanding 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 program of such agency or to appropriate site 
        revitalization or other capital improvements approved by the 
        Secretary, of--
                    (A) in the case of an agency receiving assistance 
                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));
                    (B) in the case of an agency receiving public 
                housing modernization assistance by formula pursuant to 
                such section 14, any amounts provided to the agency 
                which are attributable pursuant to the formula for 
                allocating such assistance to such building or 
                buildings;
                    (C) in the case of an agency receiving assistance 
                for the major reconstruction of obsolete projects, any 
                amounts obligated by the Secretary 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 assistance 
                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 public 
                housing development subject to the conversion, 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 action 
                        will receive choice-based housing assistance or 
                        occupancy in a unit operated or assisted by the 
                        public housing agency;
                    (B) 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 assistance, 
                the preceding 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 relocation; and
                    (D) provide any reasonable relocation expenses for 
                families displaced by such action.
            (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 Omnibus Consolidated Rescissions and 
        Appropriations Act of 1996 (Public Law 104-134; 110 Stat. 1321-
        279)) may be used to carry out this section. The Secretary 
        shall provide for public housing agencies to conform and 
        continue actions taken under such section 202 in accordance 
        with the requirements under this section.
    (c) Extension of Deadlines.--The Secretary may, for a public 
housing agency, extend any deadline established pursuant to this 
section or a local housing management plan for up to an additional 5 
years if the Secretary makes a determination that the deadline is 
impracticable.
    (d) Compliance With Plan.--The local housing management plan 
submitted by a public housing agency (including any amendments to the 
plan), unless determined under section 107 not to comply with the 
requirements under section 106, shall be binding upon the Secretary and 
the public housing agency and the agency shall use any grant amounts 
provided under this title for eligible 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.

SEC. 204. DETERMINATION OF GRANT ALLOCATION.

    (a) In General.--For each fiscal year, after reserving 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 
accordance with this section, so that the sum of all of the allocations 
for all eligible authorities is equal to such remaining amount.
    (b) Allocation Amount.--The Secretary shall determine the amount of 
the allocation for each eligible public housing agency, which shall 
be--
            (1) for any fiscal year beginning after the enactment 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 expiration of 
        such period, the sum of--
                    (A) the operating allocation determined under 
                subsection (d)(1) for the agency; and
                    (B) the capital improvement allocation determined 
                under subsection (d)(2) for the agency.
    (c) Permanent Allocation Formulas for Capital and Operating 
Funds.--
            (1) Establishment of capital fund formula.--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 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 rehabilitating 
                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 agency.
            (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--
                            (i) standards for the costs of operating 
                        and reasonable projections of income, taking 
                        into account the characteristics and locations 
                        of the public housing developments and 
                        characteristics of the families served and to 
                        be served (including the incomes of the 
                        families), or the costs of providing 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 adequate 
                        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 encourage public housing 
                agencies to increase nonrental income and to increase 
                rental income attributable to their units by 
                encouraging occupancy by families whose incomes have 
                increase while in occupancy and newly admitted 
                families. Any such incentive shall provide 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 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 
                allocation for which the agency is eligible under this 
                section, and (ii) the maximum balance permitted 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 reductions, as determined by the Secretary. In the 
                case of any public housing agency that receives 
                financing from any person or entity other than the 
Secretary or enters into a performance contract to undertake energy 
conservation improvements in a public housing development, under which 
the payment does not exceed the cost of the energy saved as a result of 
the improvements during a reasonable negotiated contract period, the 
formula shall not take into account 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 Secretary. 
Notwithstanding the preceding 2 sentences, after the expiration of the 
10-year period beginning upon the savings initially taking effect, the 
Secretary may reduce the amount allocated 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 paragraphs (1) and (2) should each 
        reward performance and may each consider appropriate factors 
        that reflect the different characteristics and sizes of public 
        housing agencies, the relative needs, revenues, costs, and 
        capital improvements of agencies, and the relative 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 rulemaking procedure.--The 
        formulas under this subsection shall be developed according to 
        procedures for issuance of regulations under the negotiated 
        rulemaking procedure under subchapter III of chapter 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 established 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 allocation under this subsection 
                for a fiscal year, 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 appropriated for fiscal year 
                1997 for operating subsidies 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 modernization 
                under section 14 of such Act.
                    (B) Determination.--The operating allocation under 
                this paragraph for a public housing agency for a fiscal 
                year shall be an amount determined by applying, to the 
                amount to be allocated 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 section 601(b).
                    (C) Treatment of chronically vacant units.--The 
                Secretary shall revise the formula referred to in 
                subparagraph (B) so that the formula 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 income.--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 encouraging occupancy by families whose 
                incomes have increased while in occupancy and newly 
                admitted families. Any such incentive shall provide 
                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 of such an increase in 
                nonrental or rental income, except that such benefit 
                may not be retained 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 balance 
                        is equal to the maximum amount permitted 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 allocation 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 appropriated 
                for fiscal year 1997 for modernization 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 improvement 
                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 
                distribution 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 assistance program.
    (e) Eligibility of Units Acquired From Proceeds of Sales Under 
Demolition or Disposition Plan.--If a public housing agency uses 
proceeds from the sale of units under a homeownership program in 
accordance with section 251 to acquire additional units to be sold to 
low-income families, the additional units shall be counted as public 
housing for purposes of determining the amount of the allocation to the 
agency under this section until sale by the agency, but in any case no 
longer than 5 years.

SEC. 205. SANCTIONS FOR IMPROPER USE OF AMOUNTS.

    (a) In General.--In addition to any other actions authorized under 
this title, if the Secretary finds pursuant to an audit under section 
541 that a public housing agency receiving grant amounts under this 
title has failed to comply substantially with any provision of this 
title, the Secretary may--
            (1) terminate payments under this title to the agency;
            (2) withhold from the agency amounts from the total 
        allocation for the agency pursuant to section 204;
            (3) reduce the amount of future grant payments under this 
        title to the agency by an amount equal to the amount of such 
        payments that were not expended in accordance with this title;
            (4) limit the availability of grant amounts provided to the 
        agency under this title to programs, 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 comply with the provisions of 
        this title.

           Subtitle B--Admissions and Occupancy Requirements

SEC. 221. LOW-INCOME HOUSING REQUIREMENT.

    (a) Production Assistance.--Any public housing produced using 
amounts provided under a grant under this title or under the United 
States Housing Act of 1937 shall be operated as public housing for the 
40-year period beginning upon such production.
    (b) Operating Assistance.--No portion of any public housing 
development operated with amounts from a grant under this title or 
operating assistance provided under the United States Housing Act of 
1937 may be disposed of before the expiration of the 10-year period 
beginning 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;
                    (B) is operated as low-income rental housing 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 maintained 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 available for 
                occupancy by families other than low-income families;
                    (B) contains a number of dwelling units--
                            (i) which units are made available (by 
                        master contract or individual lease) for 
                        occupancy 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 related 
                        amenities, taking into account the amount of 
                        the assistance provided by the agency compared 
                        to the total investment (including costs of 
                        operation) in the development;
                            (iii) which units are subject to the 
                        statutory and regulatory requirements of the 
                        public housing program, except that the 
                        Secretary may grant appropriate waivers to such 
                        statutory and regulatory requirements if 
                        reductions in funding or other changes to the 
                        program make continued application of such 
                        requirements impracticable;
                            (iv) which units are specially designated 
                        as dwelling units under this subparagraph, 
                        except the equivalent units in the development 
                        may be substituted for 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 
                        assistance under this title; and
                    (C) is owned by the public housing agency, an 
                affiliate controlled by it, or another appropriate 
                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 income 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 
        resulting savings to rent privately developed dwelling units in 
        the neighborhood of the mixed income development. Such units 
        shall be made available for occupancy only by low-income 
        families eligible for residency 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.
    (b) Income Mix Within Developments.--A public housing agency may 
establish and utilize income-mix criteria for the selection of 
residents for dwelling units in public housing developments that limit 
admission to a development by selecting applicants having incomes 
appropriate so that the mix of incomes of families occupying the 
development 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 larger families, 
        except that the Secretary, may for purposes 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 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 residing in public housing 
        solely because of the income of the family or because of any 
        noncompliance or overcompliance 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 paragraph (1), concentrate very low-income 
        families (or other families with relatively low incomes) in 
        public housing dwelling units in certain public housing 
        developments 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 provisions of this paragraph.
            (3) Fungibility with choice-based assistance.--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) (relating to 
        income targeting), which exceeds the number of families that is 
        required for the agency to comply with the percentage 
        requirement under such section 321(b) for such fiscal year, 
        notwithstanding paragraph (1) of this subsection, the number of 
        public housing dwelling units that the agency must otherwise 
        make available in accordance with such paragraph to comply with 
        the percentage requirement under such paragraph shall be 
        reduced by such excess 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 enforcement or security personnel (who 
        are not otherwise 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--
                                    (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 section 225(b);
                                    (III) any criteria relating to 
                                income mix within developments 
                                established under subsection (b);
                                    (IV) the income mix requirements 
                                under subsection (c); and
                                    (V) any other occupancy limitations 
                                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 paragraph (1) only if agency 
        determines that such actions will increase security in the 
        public housing developments involved and will not result in a 
        significant reduction of units available for residence by low-
        income families.

SEC. 223. PREFERENCES FOR OCCUPANCY.

    (a) Authority To Establish.--Each public housing agency may 
establish a system for making dwelling units in public housing 
available for occupancy that provides preference for such occupancy to 
families having certain characteristics.
    (b) Content.--Each system of preferences established 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, including any information obtained pursuant to an opportunity 
for public comment as provided under section 106(e) and under the 
requirements applicable to the comprehensive 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 individuals 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 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 applicant 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 system 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 procedures 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.
    (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 Violence 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 
applicable at such time to new applicants for public housing.

SEC. 225. FAMILY CHOICE OF RENTAL PAYMENT.

    (a) Rental Contribution by Resident.--A family 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 
requirement under subsection (c). Each public housing agency shall 
provide for each family residing in a public housing dwelling unit 
owned or administered by the agency to elect annually whether the rent 
paid by such family shall 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 housing 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 agency; and
                    (B) be designed in accordance with subsection (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 considered to 
        comply with the requirements of this paragraph if such amount 
        does not exceed the actual monthly costs to the public housing 
        agency attributable to providing and operating the dwelling 
        unit. The preceding sentence may not be construed to require 
establishment of rental amounts equal to or based on operating costs or 
to prevent public housing 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 rental 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 dollar):
                    (A) 30 percent of the monthly adjusted income 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 require a public 
        housing agency to charge a monthly rent in the maximum amount 
        permitted under this paragraph.
    (c) Minimum Rental Amount.--Notwithstanding the method for rent 
determination elected by a family pursuant 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 subsection (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 financial 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; (ii) the 
                family would be evicted as a result of the imposition 
                of the minimum rent requirement 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 requests a 
                hardship exemption under this paragraph and the public 
                housing agency reasonably determines the hardship to be 
                of a temporary nature, an exemption shall not be 
                granted during the 90-day period beginning upon the 
                making 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 financial 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 methods.--Notwithstanding 
        subsection (a), in the case of 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 
        hardship, including--
                    (A) situations in which the income of the family 
                has decreased because of changed circumstances, 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 circumstances, 
                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 determined by 
                the agency.
    (e) Encouragement of Self-Sufficiency.--The rental policy developed 
by each public housing agency shall encourage and reward employment and 
economic self-sufficiency.
    (f) Income Reviews.--Each public housing agency shall review the 
income of each family occupying a dwelling 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 income 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 previously unemployed for 1 or more years 
        (including a family whose income increases as a result of the 
        participation of a family member in any family self-sufficiency 
        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 beginning on the date on which the employment is 
        commenced.
            (2) Phase-in of rent increases.--After the expiration of 
        the 18-month period referred to in paragraph (1), rent 
        increases due to the continued employment of the family member 
        described in paragraph (1) shall be phased in over a subsequent 
        3-year period.
            (3) Transition.--Notwithstanding the provisions of 
        paragraphs (1) and (2), any resident of public housing 
        participating in the program under the authority contained in 
        the undesignated paragraph 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 paragraph (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 United 
        States Housing Act of 1937 immediately before such 
        applicability, any such resulting increase in rent contribution 
        shall be--
                    (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 applicability; and
                    (B) limited to not more than 10 percent per year if 
                such increase is more than 10 percent but less than 30 
                percent of such contribution before initial 
                applicability.
            (2) Exception.--The minimum rental amount under subsection 
        (c) shall apply to each family described in paragraph (1) of 
        this subsection, notwithstanding such paragraph.

SEC. 226. LEASE REQUIREMENTS.

    In renting dwelling units in a public housing development, each 
public housing agency shall utilize leases that--
            (1) do not contain unreasonable terms and conditions;
            (2) obligate the public housing agency to maintain 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--
                    (A) the period provided under the applicable 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 employees 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 sections 642 and 
        643 (relating to limitations on occupancy 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 examine any relevant documents, records or 
        regulations directly related to the eviction or termination.

SEC. 227. DESIGNATED HOUSING FOR ELDERLY AND DISABLED FAMILIES.

    (a) Authority To Provide Designated Housing.--
            (1) In general.--Subject only to provisions of this section 
        and notwithstanding any other provision of law, a public 
        housing agency for which the information required under 
        subsection (d) is in effect may provide public housing 
        developments (or portions 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 determining priority for 
        admission to public housing developments (or portions of 
        developments) that are designated 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 designated.
            (3) Eligibility of near-elderly families.--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 
        occupancy by only elderly families, the agency may provide that 
        near-elderly families may occupy dwelling units in the 
        development (or portion).
    (b) Standards Regarding Evictions.--Except as provided in subtitle 
C of title VI, any tenant who is lawfully residing in a dwelling unit 
in a public housing development 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 building, 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 designation--
            (1) notice of the designation and an explanation of 
        available relocation benefits, as soon as is practicable for 
        the agency and the person or family;
            (2) access to comparable housing (including appropriate 
        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 expenses.
    (d) Required Inclusions in Local Housing Management Plan.--A public 
housing agency may designate a development (or portion of a 
development) for 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 development is 
        necessary--
                    (A) to achieve the housing goals for the 
                jurisdiction under the comprehensive housing 
                affordability strategy under section 105 of the 
                Cranston-Gonzalez National Affordable Housing 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 development) 
                to be designated;
                    (B) the types of tenants for which the development 
                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
                    (E) any plans to secure additional resources or 
                housing assistance to provide assistance to families 
                that may have been housed if occupancy in the 
                development were not restricted 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 Secretary may approve a local housing 
management plan without approving the portion of the plan covering 
designation of a development pursuant to this section.
    (e) Effectiveness.--
            (1) Initial 5-year effectiveness.--The information 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 
        information 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 period 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 information 
        needed to update the information. The Secretary may not limit 
        the number of times a public housing agency extends the 
        effectiveness of a designation and information under this 
        paragraph.
            (3) Treatment of existing plans.--Notwithstanding any other 
        provision of this section, a public housing agency shall be 
        considered to have submitted the information required under 
        this section 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 before 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 beginning upon such 
        approval.
    (f) Inapplicability of Uniform Relocation Assistance and Real 
Property Acquisitions Policy Act of 1970.--No resident of a public 
housing development shall be considered to be displaced for purposes of 
the Uniform Relocation Assistance and Real Property Acquisitions Policy 
Act of 1970 because of the designation of any existing development or 
building, or portion thereof, for occupancy as provided under 
subsection (a) of this section.
    (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 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 ensure that the public housing developments 
owned or administered by the agency are operated in a sound manner.
    (b) Accounting System for Rental Collections and Costs.--
            (1) Establishment.--Each public housing agency that 
        receives grant amounts under this title shall establish and 
        maintain a system of accounting for rental collections and 
        costs (including administrative, utility, maintenance, repair, 
        and other operating costs) for each project and operating cost 
        center (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) regarding 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 operated 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 jurisdiction 
        which has in effect laws, regulations, standards, or codes 
        regarding habitability of residential dwellings, with such 
        applicable laws, regulations, standards, or codes; or
            (2) in the case of public housing located in a jurisdiction 
        which does not have in effect laws, regulations, 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 between 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 an annual inspection of each public 
housing development to determine whether units in the development are 
maintained in accordance with the requirements under subsection (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 Assistance and Self-
                        Determination Act of 1996''; and
                            (ii) by striking ``development assistance'' 
                        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 the housing 
                        production, operation, or capital 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''; and
            (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 Assistance and Self-
                        Determination Act of 1996''; and
                            (ii) by striking ``development assistance'' 
                        and all that follows through ``section 14 of 
                        that Act'' and inserting ``assistance provided 
                        under title II of the Housing Opportunity and 
                        Responsibility Act of 1997 and used for the 
                        housing production, operation, or capital 
                        needs''; and
                    (B) in subparagraph (B)(ii), by striking ``operated 
                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''.

SEC. 234. RESIDENT COUNCILS AND RESIDENT MANAGEMENT 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 relating to residents, 
representation of resident interests, and coordination and consultation 
with a public housing agency. A resident council shall be an 
organization or association that--
            (1) is nonprofit in character;
            (2) is representative of the residents of the eligible 
        housing;
            (3) adopts written procedures providing for the election of 
        officers on a regular basis; and
            (4) has a democratically elected governing board, which is 
        elected by the residents of the eligible housing on a regular 
        basis.
    (b) Resident Management Corporations.--
            (1) Establishment.--The residents of a public housing 
        development may establish a resident management corporation for 
        the purpose of assuming the responsibility for the management 
        of the development under section 235 or purchasing a 
        development.
            (2) Requirements.--A resident management corporation shall 
        be a corporation that--
                    (A) is nonprofit in character;
                    (B) is organized under the laws of the State in 
                which the development is located;
                    (C) has as its sole voting members the residents of 
                the development; and
                    (D) is established by the resident council for the 
                development or, if there is not a resident council, by 
                a majority of the households of the development.

SEC. 235. MANAGEMENT BY RESIDENT MANAGEMENT CORPORATION.

    (a) Authority.--A public housing agency may enter into a contract 
under this section with a resident management 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 
consistent with the requirements of this Act applicable to public 
housing development and may include specific terms governing management 
personnel and compensation, access to public housing records, 
submission of and adherence to budgets, rent collection procedures, 
resident income verification, resident eligibility determinations, 
resident eviction, the 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 development, the resident 
management corporation shall provide fidelity bonding and insurance, or 
equivalent protection. Such bonding and insurance, or its equivalent, 
shall be adequate to protect the Secretary and the public housing 
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 portion 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 activities with respect to the development as 
        may be provided under the contract;
            (2) the amount of income expected to be derived 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, administrative fees, and rents); and
            (4) any income generated by a resident management 
        corporation of a public housing development that exceeds the 
        income estimated under the contract shall be used for eligible 
        activities under section 203(a).
    (e) Calculation of Total Income.--
            (1) Maintenance of support.--Subject to paragraph (2), the 
        amount of assistance provided by a public housing agency to a 
        public housing development managed by a resident management 
        corporation may not be reduced during the 3-year period 
        beginning on the date on which the resident management 
        corporation is first established for the development.
            (2) Reductions and increases in support.--If the total 
        income of a public housing agency is reduced or increased, the 
        income provided by the public housing agency to a public 
        housing development managed by a resident management 
        corporation shall be reduced or increased in proportion to the 
        reduction or increase in the total income of the agency, except 
        that any reduction in block grant amounts under this title 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 HOUSING TO INDEPENDENT 
              MANAGER AT REQUEST OF RESIDENTS.

    (a) Authority.--The Secretary may transfer the responsibility and 
authority for management of specified housing (as such term is defined 
in subsection (h)) from a public housing agency to an eligible 
management entity, in accordance with the requirements of this section, 
if--
            (1) such housing is owned or operated by a public housing 
        agency that is designated as a troubled agency under section 
        533(a); and
            (2) the Secretary determines that--
                    (A) such housing has deferred maintenance, physical 
                deterioration, or obsolescence of major systems and 
                other deficiencies in the physical plant of the 
                project;
                    (B) such housing is occupied predominantly by 
                families with children who are in a severe state of 
                distress, characterized by such factors as high rates 
                of unemployment, teenage pregnancy, single-parent 
                households, long-term dependency on public assistance 
                and minimal educational achievement;
                    (C) such housing is located in an area such that 
                the housing is subject to recurrent vandalism and 
                criminal activity (including drug-related criminal 
                activity); and
                    (D) the residents can demonstrate that the elements 
                of distress for such housing specified in subparagraphs 
                (A) through (C) can be remedied by an entity that has a 
                demonstrated capacity to manage, with reasonable 
                expenses for modernization.
Such a transfer may be made only as provided in this section, pursuant 
to the approval by the Secretary of a request for the transfer made by 
a majority vote of the residents for the specified housing, after 
consultation with the public housing agency for the specified housing.
    (b) Block Grant Assistance.--Pursuant to a contract under 
subsection (c), the Secretary shall require the public housing agency 
for specified housing to provide to the manager for the housing, from 
any block grant amounts under this title for the agency, fair and 
reasonable amounts for operating costs for the housing. The amount made 
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 
improvement 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 Manager.--
            (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 
        applicable to public housing developments.
    (d) Compliance With Local Housing Management Plan.--A manager of 
specified housing under this section shall comply with the approved 
local housing management 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 management 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.
    (f) Limitation on PHA Liability.--A public housing agency that is 
not a manager for specified housing shall not be liable for any act or 
failure to act by a manager or resident council for the specified 
housing.
    (g) Treatment of Manager.--To the extent not inconsistent with this 
section and to the extent the Secretary 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 
purposes of this title.
    (h) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Eligible management entity.--The term ``eligible 
        management entity'' means, with respect 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 organization 
                        and, as determined by the Secretary, a public 
                        or private nonprofit organization sponsored by 
                        the public housing agency that owns the 
                        development; and
                            (ii) not include the public housing agency 
                        that owns the development.
                    (B) For-profit entity.--A for-profit entity that 
                has demonstrated experience in providing 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, corporation, or other entity, 
        that no part of the net earnings of the entity inures to the 
        benefit of any member, founder, contributor, or individual.
            (4) Private nonprofit organization.--The term ``private 
        nonprofit organization'' means any private organization 
        (including a State or locally chartered organization) that--
                    (A) is incorporated under State or local law;
                    (B) is nonprofit in character;
                    (C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                    (D) has among its purposes significant activities 
                related to the provision of decent housing 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 developments, or a 
portion of a development or developments, for which the transfer of 
management is requested under this section. The term includes one or 
more contiguous buildings and an area of contiguous 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.

SEC. 237. RESIDENT OPPORTUNITY PROGRAM.

    (a) Purpose.--The purpose of this section is to encourage increased 
resident management of public housing developments, as a means of 
improving existing living conditions in public housing developments, by 
providing increased 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 formation and development 
        of resident management entities.
For purposes of this section, the term ``public housing development'' 
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 
requirements of this section.
    (b) Program Requirements.--
            (1) Resident council.--As a condition of entering into a 
        resident opportunity program, the elected resident council of a 
        public housing development shall approve the establishment of a 
        resident management corporation that complies with the 
        requirements of section 234(b)(2). When such approval 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 efficient 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 specialist.--The resident 
        council of a public housing development, in cooperation with 
        the public housing agency, shall select a qualified public 
        housing management specialist to assist in determining the 
        feasibility 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 resident management 
        corporation that qualifies under this section, and that 
        supplies insurance and bonding or equivalent protection 
        sufficient to the Secretary and the public housing agency, 
        shall enter into a contract with the agency establishing the 
        respective management rights and responsibilities of 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 public 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 management corporations may be 
provided with modernization assistance from grant amounts under this 
title for purposes of renovating such developments. If such renovation 
activities (including the planning and architectural design of the 
rehabilitation) are administered by a resident management 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 requirements.--Upon the request of 
        any resident management corporation and public housing agency, 
        and after notice and an opportunity to comment is afforded to 
        the affected residents, the Secretary may waive (for both the 
        resident management corporation and the public housing agency) 
        any requirement established by the Secretary (and not specified 
        in any statute) that the Secretary determines to unnecessarily 
        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 development to volunteer a portion of their labor.
            (3) Exceptions.--The Secretary may not waive under this 
        subsection any requirement with respect to income eligibility 
for purposes of section 222, family rental payments under section 225, 
tenant or applicant protections, employee organizing rights, or rights 
of employees under collective bargaining agreements.
    (e) Operating Assistance and Development Income.--
            (1) Calculation of operating subsidy.--The grant amounts 
        received under this title by a public housing agency used for 
        operating fund activities 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 determined on an individual development 
        basis.
            (2) Contract requirements.--Any contract for management of 
        a public housing development entered 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, 
        administrative fees, and rents).
    (f) Resident Management Technical Assistance and Training.--
            (1) Financial assistance.--To the extent budget authority 
        is available under this title, the Secretary shall provide 
        financial assistance to resident management corporations or 
        resident councils that obtain, by contract or otherwise, 
        technical assistance for the development of resident management 
        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 assistance to resident management 
        corporations or resident councils for activities sponsored by 
        resident organizations for economic uplift, such as job 
        training, economic development, security, and other self-
        sufficiency activities beyond those related to the management 
        of public housing. The Secretary may require resident councils 
        or resident management corporations 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 financial 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 contract or other agreement with any entity to provide such 
        entity with amounts from the grant for providing technical 
        assistance or carrying out other activities eligible for 
        assistance with amounts under this subsection. Any such 
        agreement entered into in violation of this paragraph shall be 
        void and unenforceable.
            (4) Funding.--Of any amounts made available for financial 
        assistance under this title, 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 subsection to any resident management corporation or 
        resident council with respect to which assistance for the 
        development or formation of such entity is provided 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 clearinghouse.--The Secretary 
        may use up to 10 percent of the amount made available pursuant 
        to paragraph (4)--
                    (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 public 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 recommendations the Secretary 
        determines to be appropriate.
    (h) Applicability.--Any management contract between a public 
housing agency and a resident management corporation that is entered 
into after the date of the enactment 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.

                       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 housing developments, and other housing projects 
available for purchase by low-income families. An agency may transfer a 
unit only pursuant to a homeownership program approved 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 preceding 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 acquired for use under such program, by the public housing 
agency.
    (c) Eligible Purchasers.--
            (1) Low-income requirement.--Only low-income families 
        assisted by a public housing agency, other low-income families, 
        and entities formed to facilitate 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 limitations for families to 
        purchase housing under a homeownership program under this 
        section, including requirements or limitations regarding 
        employment or participation in employment counseling or 
        training activities, criminal activity, participation in 
        homeownership counseling programs, evidence of regular income, 
        and other requirements. In the case of purchase 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 organizations and 
reserves for capital replacements.
    (d) Financing and Assistance.--A homeownership program under this 
section may provide financing for acquisition of housing by families 
purchasing under the program 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 corporation).
    (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 resources a downpayment in connection with 
        any loan for acquisition of the housing, in an amount 
        determined by the public housing agency. Except as provided 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 
        purchase,
            (2) Direct family contribution.--In purchasing housing 
        pursuant to this section, each family shall contribute an 
        amount of the downpayment, from resources of the family other 
        than grants, gifts, contributions, or other similar amounts 
        referred to in paragraph (1), that is not less than 1 percent 
        of the purchase price.
    (f) Ownership Interests.--A homeownership program under this 
section may provide for sale to the purchasing 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 appreciation 
interest with a public housing agency providing financing.
    (g) Resale.--
            (1) Authority and limitation.--A homeownership 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 
        appropriate (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 period beginning 
                upon purchase of the dwelling unit by the eligible 
                family, a portion of the amount of any financial 
                assistance provided under the program by the agency to 
                the eligible family; and
                    (B) after the expiration of such 5-year period, 
                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 
        homeownership program and resale, the reason for resale, any 
        improvements to the property made by the eligible family, any 
        appreciation in the value of the property, and any other 
        factors that the agency considers appropriate.
    (h) Sale of Certain Scattered-Site Housing.--A public housing 
agency that the Secretary has determined to be a high-performing agency 
may use the proceeds 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 management plan for the agency 
approved under section 107. Any such replacement dwelling units shall 
be considered public housing for purposes of this Act.
    (i) Inapplicability of Disposition Requirements.--The provisions of 
section 261 shall not apply to disposition of public housing dwelling 
units under a homeownership 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 subsections (e) and (f) of 
section 261.

Subtitle E--Disposition, Demolition, and Revitalization of Developments

SEC. 261. REQUIREMENTS FOR DEMOLITION AND DISPOSITION OF DEVELOPMENTS.

    (a) Authority and Flexibility.--A public housing agency may 
demolish, dispose of, or demolish and dispose of nonviable or 
nonmarketable public housing developments of the agency in accordance 
with this section.
    (b) Local Housing Management Plan Requirement.--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 disposition complies with the provisions of this section 
and is in accordance with the local housing management plan for the 
agency. Notwithstanding section 107, the Secretary may approve a local 
housing management plan without approving the portion of the plan 
covering demolition 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 severely 
        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 design or 
        construction deficiencies that make cost-effective 
        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 thereof) 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;
            (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 surrounding 
                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 determines 
                are consistent with the best interests of the residents 
                and the agency and not inconsistent with other 
                provisions of this Act;
            (6) in the case only of demolition or disposition of a 
        portion of a development, the demolition or disposition will 
        help to ensure the remaining useful life of the remainder of 
        the development; or
            (7) in the case only of property other than dwelling 
        units--
                    (A) the property is excess to the needs of a 
                development; or
                    (B) the demolition or disposition is incidental 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) estimated 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 portion); and
            (2) appropriate local government officials.
    (e) Counseling.--A public housing agency may demolish 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.
    (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 developments; 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 demolishes or 
disposes of a public housing development (or portion of a development 
thereof) shall ensure that--
            (1) each family that is a resident of the development (or 
        portion) that is demolished or disposed of is relocated to 
        other safe, clean, healthy, and 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 
        preceding requirement shall be fulfilled only upon the 
        relocation 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 paragraph (1); and
            (3) each resident family to be displaced is paid relocation 
        expenses, and the rent to be paid initially by the resident 
        following relocation does not exceed the amount permitted under 
        section 225(a).
    (h) Right of First Refusal for Resident Organizations and Resident 
Management Corporations.--
            (1) In general.--A public housing agency may not dispose of 
        a public housing development (or portion of a development) 
        unless the agency has, before such disposition, offered to sell 
        the property, as provided in this subsection, to each resident 
        organization and resident management corporation operating at 
        the development for continued use as low-income housing, and no 
        such organization or corporation purchases the property 
        pursuant to such offer. A resident organization may act, for 
        purposes of this 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 during 
                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 provides notice of the proposed 
                disposition of the property to such resident 
                organizations and resident management corporations;
                    (B) if an organization or corporation submits 
                notice of interest in accordance with subparagraph (A), 
                before the expiration of the period during which such 
                organization or corporation 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 subparagraph (B), 
                an organization or corporation obtains such financing 
                commitment and makes a bona fide offer to the agency to 
                purchase the 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 reflects the market value of the 
        property, the reason for the sale, the impact of the sale on 
        the surrounding community, and any other factors that the 
        agency considers appropriate.
    (i) Information for Local Housing Management Plan.--A public 
housing agency may demolish or dispose of a public housing development 
(or portion thereof) only if it includes in the applicable local 
housing management 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 disposition complies 
        with the requirements under subsection (c), and includes 
        evidence of the market value of the development (or portion) 
        required under subsection (c);
            (3) how the consultations required under subsection (d) 
        will be made;
            (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 subsection (h).
    (j) Site and Neighborhood Standards Exemption.--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, pursuant to a plan 
under this section, but only if such development provides for 
significantly fewer dwelling units.
    (k) Treatment of Replacement Units.--
            (1) Provision of other housing assistance.--In connection 
        with any demolition or disposition of public housing under this 
        section, a public housing agency may provide for other housing 
        assistance for low-income families that is consistent with the 
        low-income housing needs of the community, including--
                    (A) the provision of choice-based assistance under 
                title III; and
                    (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 required 
                        for public housing, and subject to the other 
                        requirements applicable to public housing 
                        dwelling units.
            (2) Treatment of individuals.--For purposes 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 housing 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.
    (m) Permissible Relocation Without Plan.--If a public housing 
agency determines that because of an emergency situation public housing 
dwelling units are severely uninhabitable, the public housing agency 
may relocate residents of such dwelling units before the submission of 
a local housing management plan providing for demolition or disposition 
of such units.
    (n) Consolidation of Occupancy Within or Among Buildings.--Nothing 
in this section may be construed to prevent a public housing agency 
from consolidating occupancy within or among buildings of a public 
housing 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 Requirements.--
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 
operated 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.

SEC. 262. DEMOLITION, SITE REVITALIZATION, REPLACEMENT HOUSING, AND 
              CHOICE-BASED ASSISTANCE GRANTS FOR DEVELOPMENTS.

    (a) Purposes.--The purpose of this section is to provide assistance 
to public housing agencies for the purposes of--
            (1) reducing the density and improving the living 
        environment for public housing residents of severely distressed 
        public housing developments through the demolition of obsolete 
        public housing developments (or portions thereof);
            (2) revitalizing sites (including remaining public housing 
        dwelling units) on which such public housing developments are 
        located and contributing to the improvement of the surrounding 
        neighborhood; and
            (3) providing housing that will avoid or decrease the 
        concentration of very low-income families; and
            (4) providing choice-based assistance in accordance with 
        title III for the purpose of providing replacement housing and 
        assisting residents to be displaced by the demolition.
    (b) Grant Authority.--The Secretary may make grants available to 
public housing agencies as provided in this section.
    (c) Contribution Requirement.--The Secretary may not make any grant 
under this section to any applicant 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, including 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 section may be used for 
activities to carry out revitalization programs for severely distressed 
public housing, including--
            (1) architectural and engineering work, including the 
        redesign, reconstruction, or redevelopment of a severely 
        distressed public housing development, including 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 applicant, 
        which may not exceed such portion of the assistance provided 
        under this section as the Secretary may prescribe;
            (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 promote the 
        economic self-sufficiency of residents under the revitalization 
        program;
            (7) necessary management improvements;
            (8) leveraging other resources, including additional 
        housing resources, retail supportive services, jobs, and other 
        economic development uses on or near the development that will 
        benefit future residents 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 paragraph.
    (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 accordance 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 neighborhood in which the 
                development is located;
                    (B) the capability and record of the applicant 
                public housing agency, or any alternative management 
                agency for the agency, for managing 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
                    (E) the amount of funds and other resources 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 activities 
        under this section sufficient to provide for effective 
        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 pursuant to a revitalization plan and 
any public housing produced 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 
Secretary determines that such action will help to effectuate the 
purposes of this section.
    (i) Withdrawal of Funding.--If a grantee under this section does 
not proceed expeditiously, in the determination 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 proceeding 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 designated as 
                troubled pursuant to section 533(a) that--
                            (i) is so designated principally for 
                        reasons that will not affect the capacity of 
                        the agency to carry out a revitalization 
                        program;
                            (ii) is making substantial progress toward 
                        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, contributor, or 
                individual;
                    (C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                    (D) has among its purposes significant activities 
                related to the provision of decent housing that is 
                affordable to very low-income families.
            (3) Severely distressed public housing.--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 design 
                (including inappropriately high population density), 
                deferred maintenance, physical deterioration 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 families who 
                are very low-income families with children, are 
                unemployed, and dependent on various forms of public 
                assistance; and
                    (ii) has high rates of vandalism and criminal 
                activity (including drug-related criminal activity) in 
                comparison to other housing in the area;
                    (D) cannot be revitalized through assistance 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 section 601(b) of this Act), because of 
                cost constraints 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 development of which the building 
                is part to make use of the building feasible for 
                purposes of this section.
            (4) Supportive services.--The term ``supportive services'' 
        includes all activities that will promote 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 activities.
    (k) Annual Report.--The Secretary shall submit to the Congress an 
annual report setting forth--
            (1) the number, type, and cost of public housing units 
        revitalized pursuant to this section;
            (2) the status of developments identified as severely 
        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 program 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 fiscal year, the Secretary 
        may use not more than 0.50 percent for technical assistance. 
        Such assistance may be provided directly or indirectly by 
        grants, contracts, or cooperative agreements, and shall include 
        training, and the cost of necessary travel for participants in 
        such training, by or to officials of the Department of Housing 
        and Urban Development, of public housing agencies, and of 
        residents.
    (m) Sunset.--No assistance may be provided under this section after 
September 30, 2000.

SEC. 263. VOLUNTARY VOUCHER SYSTEM FOR PUBLIC HOUSING.

    (a) In General.--A public housing agency may convert 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 accordance 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 subsection, in consultation with the appropriate public officials 
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, including an impact analysis 
        on the affected community;
            (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 requirements) of providing choice-based 
        rental housing assistance under title III for the same families 
        in substantially similar dwellings over the same period of time 
        is less expensive than continuing public housing assistance in 
        the public housing development proposed 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 public 
                housing development subject to the conversion, 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 action 
                        will receive choice-based housing assistance;
                    (B) provide any necessary counseling for families 
                displaced by such action to facilitate relocation; and
                    (C) provide any reasonable relocation expenses 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 assistance, 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 conversion assessment under this 
        section demonstrates that the conversion--
                    (A) will not be more expensive than continuing to 
                operate the public housing development (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 disapprove 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 affect any contract 
or other agreement entered into under 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 provide 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 replace 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 revitalization is provided, in part, from entities other than the 
public housing agency.
    (b) Production.--A mixed-finance housing development shall be 
produced or revitalized, and owned--
            (1) by a public housing agency or by an entity affiliated 
        with a public housing agency;
            (2) by a partnership, a limited liability company, or other 
        entity in which the public housing agency (or an entity 
        affiliated with a public housing agency) is a general partner, 
        is a managing member, or otherwise participates in the 
        activities of the entity;
            (3) by any entity that grants to the public housing agency 
        the option to purchase the public housing project during the 
        20-year period beginning on the date of initial occupancy of 
        the public housing project in accordance with section 42(l)(7) 
        of the Internal Revenue Code of 1986; or
            (4) in accordance with such other terms and conditions as 
        the Secretary may prescribe by regulation.
This subsection may not be construed to require production or 
revitalization, and ownership, by the same entity.

SEC. 273. MIXED-FINANCE HOUSING PLAN.

    The Secretary may approve a plan for production or revitalization 
of mixed-finance housing under this subtitle only if the Secretary 
determines that--
            (1) the public housing agency has the ability, or has 
        provided for an entity under section 272(b) that has the 
        ability, to use the amounts provided for use under the plan for 
        such housing, effectively, either directly or through contract 
        management;
            (2) the plan provides permanent financing commitments from 
        a sufficient number of sources other than the public housing 
        agency, which may include banks and other conventional lenders, 
        States, units of general local government, State housing 
        finance agencies, secondary market entities, and other 
        financial institutions;
            (3) the plan provides for use of amounts provided under 
        section 271 by the public housing agency for financing the 
        mixed-income housing in the form of grants, loans, advances, or 
        other debt or equity investments, including collateral or 
        credit enhancement of bond issued by the agency for production 
        or revitalization of the development; and
            (4) the plan complies with any other criteria that the 
        Secretary may establish.

SEC. 274. RENT LEVELS FOR HOUSING FINANCED WITH LOW-INCOME HOUSING TAX 
              CREDIT.

    With respect to any dwelling unit in a mixed-finance housing 
development that is assisted pursuant to the low-income housing tax 
credit under section 42 of the Internal Revenue Code of 1986, the rents 
charged to the residents of the unit shall be set at levels not to 
exceed the amounts allowable under such section.

SEC. 275. CARRY-OVER OF ASSISTANCE FOR REPLACED HOUSING.

    In the case of a mixed-finance housing development that is 
replacement housing for public housing demolished or disposed of, or is 
the result of the revitalization of existing public housing, the share 
of assistance received from the capital fund and the operating fund by 
the public housing agency that owned or operated the housing 
demolished, disposed of, or revitalized shall not be reduced because of 
such demolition, disposition, or revitalization after the commencement 
of such demolition, disposition, or revitalization, unless--
            (1) upon the expiration of the 18-month period beginning 
        upon the approval of the plan under section 273 for the mixed-
        finance housing development, the agency does not have binding 
        commitments for production or revitalization, or a construction 
        contract, for such development;
            (2) upon the expiration of the 4-year period beginning upon 
        the approval of the plan, the mixed-finance housing development 
        is not substantially ready for occupancy and is placed under 
        the block grant contract for the agency under section 201; or
            (3) the number of dwelling units in the mixed-finance 
        housing development that are made available for occupancy only 
        by low-income families is substantially less than the number of 
        such dwelling units in the public housing demolished, disposed 
        of, or revitalized.
The Secretary may extend the period under paragraph (1) or (2) for a 
public housing agency if the Secretary determines that circumstances 
beyond the control of the agency caused the agency to fail to meet the 
deadline under such paragraph.

                     Subtitle G--General Provisions

SEC. 281. PAYMENT OF NON-FEDERAL SHARE.

    Rental or use-value of buildings or facilities paid for, in whole 
or in part, from production, modernization, or operation costs financed 
under this title may be used as the non-Federal share required in 
connection with activities undertaken under Federal grant-in-aid 
programs which provide social, educational, employment, and other 
services to the residents in a project assisted under this title.

SEC. 282. AUTHORIZATION OF APPROPRIATIONS FOR BLOCK GRANTS.

    There are authorized to be appropriated for grants under this 
title, the following amounts:
            (1) Capital fund.--For the allocations from the capital 
        fund for grants, $2,500,000,000 for each of fiscal years 1998, 
        1999, 2000, 2001, and 2002; and
            (2) Operating fund.--For the allocations from the operating 
        fund for grants, $2,900,000,000 for each of fiscal years 1998, 
        1999, 2000, 2001, and 2002.

SEC. 283. FUNDING FOR OPERATION SAFE HOME.

    Of any amounts made available for fiscal years 1998 and 1999 for 
carrying out the Community Partnerships Against Crime Act of 1997 (as 
so designated pursuant to section 624(a) of this Act), not more than 
$20,000,000 shall be available in each such fiscal year, for use under 
the Operation Safe Home program administered by the Office of the 
Inspector General of the Department of Housing and Urban Development, 
for law enforcement efforts to combat violent crime on or near the 
premises of public and federally assisted housing and to provide 
assistance (including housing assistance under title III) for 
relocating witnesses of crimes pursuant to requests from law 
enforcement or prosecuting agencies.

SEC. 284. FUNDING FOR RELOCATION OF VICTIMS OF DOMESTIC VIOLENCE.

    Of any amounts made available for fiscal years 1998, 1999, 2000, 
2001, and 2002 for choice-based housing assistance under title III of 
this Act, not more than $700,000 shall be available in each such fiscal 
year for relocating residents of public housing (including providing 
assistance for costs of relocation and housing assistance under title 
III of this Act) who are residing in public housing, who have been 
subject to domestic violence, and for whom provision of assistance is 
likely to reduce or eliminate the threat of subsequent violence to the 
members of the family. The Secretary shall establish procedures for 
eligibility and administration of assistance under this section.

TITLE III--CHOICE-BASED RENTAL HOUSING AND HOMEOWNERSHIP ASSISTANCE FOR 
                          LOW-INCOME FAMILIES

                         Subtitle A--Allocation

SEC. 301. AUTHORITY TO PROVIDE HOUSING ASSISTANCE AMOUNTS.

    To the extent that amounts to carry out this title are made 
available, the Secretary may enter into contracts with public housing 
agencies for each fiscal year to provide housing assistance under this 
title.

SEC. 302. CONTRACTS WITH PHA'S.

    (a) Condition of Assistance.--The Secretary may provide amounts 
under this title to a public housing agency for a fiscal year only if 
the Secretary has entered into a contract under this section with the 
public housing agency, under which the Secretary shall provide such 
agency with amounts (in the amount of the allocation for the agency 
determined pursuant to section 304) for housing assistance under this 
title for low-income families.
    (b) Use for Housing Assistance.--A contract under this section 
shall require a public housing agency to use amounts provided under 
this title to provide housing assistance in any manner authorized under 
this title.
    (c) Annual Obligation of Authority.--A contract under this title 
shall provide amounts for housing assistance for 1 fiscal year covered 
by the contract.
    (d) Enforcement of Housing Quality Requirements.--Each contract 
under this section shall require the public housing agency 
administering assistance provided under the contract--
            (1) to ensure compliance, under each housing assistance 
        payments contract entered into pursuant to the contract under 
        this section, with the provisions of the housing assistance 
        payments contract included pursuant to section 351(c)(4); and
            (2) to establish procedures for assisted families to notify 
        the agency of any noncompliance with such provisions.

SEC. 303. ELIGIBILITY OF PHA'S FOR ASSISTANCE AMOUNTS.

    The Secretary may provide amounts available for housing assistance 
under this title pursuant to the formula established under section 
304(a) to a public housing agency only if--
            (1) the agency has submitted a local housing management 
        plan to the Secretary for such fiscal year and applied to the 
        Secretary for such assistance;
            (2) 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;
            (3) no member of the board of directors or other governing 
        body of the agency, or the executive director, has been 
        convicted of a felony; and
            (4) the agency has not been disqualified for assistance 
        pursuant to title V.

SEC. 304. ALLOCATION OF AMOUNTS.

    (a) Formula Allocation.--
            (1) In general.--When amounts for assistance under this 
        title are first made available for reservation, after reserving 
        amounts in accordance with subsections (b)(3) and (c), the 
        Secretary shall allocate such amounts, only among public 
        housing agencies meeting the requirements under this title to 
        receive such assistance, on the basis of a formula that is 
        established in accordance with paragraph (2) and based upon 
        appropriate criteria to reflect the needs of different States, 
        areas, and communities, using the most recent data available 
        from the Bureau of the Census of the Department of Commerce and 
        the comprehensive housing affordability strategy under section 
        105 of the Cranston-Gonzalez National Affordable Housing Act 
        (or any consolidated plan incorporating such strategy) for the 
        applicable jurisdiction. The Secretary may establish a minimum 
        allocation amount, in which case only the public housing 
        agencies that, pursuant to the formula, are provided an amount 
        equal to or greater than the minimum allocation amount, shall 
        receive an allocation.
            (2) Regulations.--The formula under this subsection shall 
        be established by regulation issued by the Secretary. 
        Notwithstanding sections 563(a) and 565(a) of title 5, United 
        States Code, any proposed regulation containing such formula 
        shall be issued pursuant to a negotiated rulemaking procedure 
        under subchapter III of chapter 5 of such title and the 
        Secretary shall establish a negotiated rulemaking committee for 
        development of any such proposed regulations.
    (b) Allocation Considerations.--
            (1) Limitation on reallocation for another state.--Any 
        amounts allocated for a State or areas or communities within a 
        State that are not likely to be used within the fiscal year for 
        which the amounts are provided shall not be reallocated for use 
        in another State, unless the Secretary determines that other 
        areas or communities within the same State (that are eligible 
        for amounts under this title) cannot use the amounts within the 
        same fiscal year.
            (2) Effect of receipt of tenant-based assistance for 
        disabled families.--The Secretary may not consider the receipt 
        by a public housing agency of assistance under section 
        811(b)(1) of the Cranston-Gonzalez National Affordable Housing 
        Act, or the amount received, in approving amounts under this 
        title for the agency or in determining the amount of such 
        assistance to be provided to the agency.
            (3) Exemption from formula allocation.--The formula 
        allocation requirements of subsection (a) shall not apply to 
        any assistance under this title that is approved in 
        appropriation Acts for uses that the Secretary determines are 
        incapable of geographic allocation, including amendments of 
        existing housing assistance payments contracts, renewal of such 
        contracts, assistance to families that would otherwise lose 
        assistance due to the decision of the project owner to prepay 
        the project mortgage or not to renew the housing assistance 
        payments contract, assistance to prevent displacement from 
        public or assisted housing or to provide replacement housing in 
        connection with the demolition or disposition of public 
        housing, assistance for relocation from public housing, 
        assistance in connection with protection of crime witnesses, 
        assistance for conversion from leased housing contracts under 
        section 23 of the United States Housing Act of 1937 (as in 
        effect before the enactment of the Housing and Community 
        Development Act of 1974), and assistance in support of the 
        property disposition and portfolio management functions of the 
        Secretary.
    (c) Recapture of Amounts.--
            (1) Authority.--In each fiscal year, from any budget 
        authority made available for assistance under this title or 
        section 8 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 is obligated to a public housing 
        agency but remains unobligated by the agency upon the 
        expiration of the 8-month period beginning upon the initial 
        availability of such amounts for obligation by the agency, the 
        Secretary may deobligate an amount, as determined by the 
        Secretary, not exceeding 50 percent of such unobligated amount.
            (2) Use.--The Secretary may reallocate and transfer any 
        amounts deobligated under paragraph (1) only to public housing 
        agencies in areas that the Secretary determines have received 
        less funding than other areas, based on the relative needs of 
        all areas.

SEC. 305. ADMINISTRATIVE FEES.

    (a) Fee for Ongoing Costs of Administration.--
            (1) In general.--The Secretary shall establish fees for the 
        costs of administering the choice-based housing assistance 
        program under this title.
            (2) Fiscal year 1998.--
                    (A) Calculation.--For fiscal year 1998, the fee for 
                each month for which a dwelling unit is covered by a 
                contract for assistance under this title shall be--
                            (i) in the case of a public housing agency 
                        that, on an annual basis, is administering a 
                        program for not more than 600 dwelling units, 
                        7.65 percent of the base amount; and
                            (ii) in the case of an agency that, on an 
                        annual basis, is administering a program for 
                        more than 600 dwelling units--
                                    (I) for the first 600 units, 7.65 
                                percent of the base amount; and
                                    (II) for any additional dwelling 
                                units under the program, 7.0 percent of 
                                the base amount.
                    (B) Base amount.--For purposes of this paragraph, 
                the base amount shall be the higher of--
                            (i) the fair market rental established 
                        under section 8(c) 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) for fiscal year 1993 for a 
                        2-bedroom existing rental dwelling unit in the 
                        market area of the agency, and
                            (ii) the amount that is the lesser of (I) 
                        such fair market rental for fiscal year 1994 or 
                        (II) 103.5 percent of the amount determined 
                        under clause (i),
                adjusted based on changes in wage data or other 
                objectively measurable data that reflect the costs of 
                administering the program, as determined by the 
                Secretary. The Secretary may require that the base 
                amount be not less than a minimum amount and not more 
                than a maximum amount.
            (3) Subsequent fiscal years.--For subsequent fiscal years, 
        the Secretary shall publish a notice in the Federal Register, 
        for each geographic area, establishing the amount of the fee 
        that would apply for public housing agencies administering the 
        program, based on changes in wage data or other objectively 
        measurable data that reflect the costs of administering the 
        program, as determined by the Secretary.
            (4) Increase.--The Secretary may increase the fee if 
        necessary to reflect the higher costs of administering small 
        programs and programs operating over large geographic areas.
    (b) Fee for Preliminary Expenses.--The Secretary shall also 
establish reasonable fees (as determined by the Secretary) for--
            (1) the costs of preliminary expenses, in the amount of 
        $500, for a public housing agency, but only in the first year 
        that the agency administers a choice-based housing assistance 
        program under this title, and only if, immediately before the 
        effective date of this Act, the agency was not administering a 
        tenant-based rental assistance program under the United States 
        Housing Act of 1937 (as in effect immediately before such 
        effective date), in connection with its initial increment of 
        assistance received;
            (2) the costs incurred in assisting families who experience 
        difficulty (as determined by the Secretary) in obtaining 
        appropriate housing under the programs; and
            (3) extraordinary costs approved by the Secretary.
    (c) Transfer of Fees in Cases of Concurrent Geographical 
Jurisdiction.--In each fiscal year, if any public housing agency 
provides tenant-based rental assistance under section 8 of the United 
States Housing Act of 1937 or housing assistance under this title on 
behalf of a family who uses such assistance for a dwelling unit that is 
located within the jurisdiction of such agency but is also within the 
jurisdiction of another public housing agency, the Secretary shall take 
such steps as may be necessary to ensure that the public housing agency 
that provides the services for a family receives all or part of the 
administrative fee under this section (as appropriate).

SEC. 306. AUTHORIZATIONS OF APPROPRIATIONS.

    (a) In General.--There is authorized to be appropriated for 
providing public housing agencies with housing assistance under this 
title, $1,861,668,000 for each of fiscal years 1998, 1999, 2000, 2001, 
and 2002.
    (b) Assistance for Disabled Families.--
            (1) Authorization of appropriations.--There is authorized 
        to be appropriated, for choice-based housing assistance under 
        this title to be used in accordance with paragraph (2), 
        $50,000,000 for fiscal year 1998, and such sums as may be 
        necessary for each subsequent fiscal year.
            (2) Use.--The Secretary shall provide amounts made 
        available under paragraph (1) to public housing agencies only 
        for use to provide housing assistance under this title for 
        nonelderly disabled families (including such families 
        relocating pursuant to designation of a public housing 
        development under section 227 and other nonelderly disabled 
        families who have applied to the agency for housing assistance 
        under this title).
            (3) Allocation of amounts.--The Secretary shall allocate 
        and provide amounts made available under paragraph (1) to 
        public housing agencies as the Secretary determines appropriate 
        based on the relative levels of need among the authorities for 
        assistance for families described in paragraph (1).
    (c) Assistance for Witness Relocation.--Of the amounts made 
available for choice-based housing assistance under this title for each 
fiscal year, the Secretary, in consultation with the Inspector General, 
shall make available such sums as may be necessary for such housing 
assistance for the relocation of witnesses in connection with efforts 
to combat crime in public and assisted housing pursuant to requests 
from law enforcement and prosecutive agencies.

SEC. 307. CONVERSION OF SECTION 8 ASSISTANCE.

    (a) In General.--Any amounts made available to a public housing 
agency under a contract for annual contributions for assistance under 
section 8 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 
have not been obligated for such assistance by such agency before such 
effective date shall be used to provide assistance under this title, 
except to the extent the Secretary determines such use is inconsistent 
with existing commitments.
    (b) Exception.--Subsection (a) shall not apply to any amounts made 
available under a contract for housing constructed or substantially 
rehabilitated pursuant to section 8(b)(2) of the United States Housing 
Act of 1937, as in effect before October 1, 1983.

SEC. 308. RECAPTURE AND REUSE OF ANNUAL CONTRACT PROJECT RESERVES UNDER 
              CHOICE-BASED HOUSING ASSISTANCE AND SECTION 8 TENANT-
              BASED ASSISTANCE PROGRAMS.

    To the extent that the Secretary determines that the amount in the 
reserve account for annual contributions contracts (for housing 
assistance under this title or tenant-based assistance under section 8 
of the United States Housing Act of 1937) that is under contract with a 
public housing agency for such assistance is in excess of the amounts 
needed by the agency, the Secretary shall recapture such excess amount. 
The Secretary may hold recaptured amounts in reserve until needed to 
enter into, amend, or renew contracts under this title or to amend or 
renew contracts under section 8 of such Act for tenant-based assistance 
with any agency.

   Subtitle B--Choice-Based Housing Assistance for Eligible Families

SEC. 321. ELIGIBLE FAMILIES AND PREFERENCES FOR ASSISTANCE.

    (a) Low-Income Requirement.--Housing assistance under this title 
may be provided only on behalf of a family that--
            (1) at the time that such assistance is initially provided 
        on behalf of the family, is determined by the public housing 
        agency to be a low-income family; or
            (2) qualifies to receive such assistance under any other 
        provision of Federal law.
    (b) Income Targeting.--Of the families initially assisted under 
this title by a public housing agency in any year, not less than 40 
percent shall be families whose incomes do not exceed 30 percent of the 
area median income, as determined by the Secretary with adjustments for 
smaller and larger families. The Secretary may establish income ceiling 
higher or lower than 30 percent of the area median income on the basis 
of the Secretary's findings that such variations are necessary because 
of unusually high or low family incomes.
    (c) Reviews of Family Incomes.--
            (1) In general.--Reviews of family incomes for purposes of 
        this title shall be subject to the provisions of section 904 of 
        the Stewart B. McKinney Homeless Assistance Amendments Act of 
        1988 and shall be conducted upon the initial provision of 
        housing assistance for the family and thereafter not less than 
        annually.
            (2) Procedures.--Each public housing agency administering 
        housing assistance under this title shall establish procedures 
        that are appropriate and necessary to ensure that income data 
        provided to the agency and owners by families applying for or 
        receiving housing assistance from the agency is complete and 
        accurate.
    (d) Preferences for Assistance.--
            (1) Authority to establish.--Any public housing agency that 
        receives amounts under this title may establish a system for 
        making housing assistance available on behalf of eligible 
        families that provides preference for such assistance to 
        eligible families having certain characteristics.
            (2) Content.--Each system of preferences established 
        pursuant to this subsection shall be based upon local housing 
        needs and priorities, as determined by the public housing 
        agency using generally accepted data sources, including any 
        information obtained pursuant to an opportunity for public 
        comment as provided under section 106(e) and under the 
        requirements applicable to the comprehensive housing 
        affordability strategy for the relevant jurisdiction.
            (3) 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 
        individuals who are victims of domestic violence.
    (e) Portability of Housing Assistance.--
            (1) National portability.--An eligible family that is 
        selected to receive or is receiving assistance under this title 
        may rent any eligible dwelling unit in any area where a program 
        is being administered under this title. Notwithstanding the 
        preceding sentence, a public housing agency may require that 
        any family not living within the jurisdiction of the public 
        housing agency at the time the family applies for assistance 
        from the agency shall, during the 12-month period beginning on 
        the date of initial receipt of housing assistance made 
        available on behalf of the family from such agency, lease and 
        occupy an eligible dwelling unit located within the 
        jurisdiction served by the agency. The agency for the 
        jurisdiction into which the family moves shall have the 
        responsibility for administering assistance for the family.
            (2) Source of funding for a family that moves.--For a 
        family that has moved into the jurisdiction of a public housing 
        agency and that, at the time of the move, has been selected to 
        receive, or is receiving, assistance provided by another 
        agency, the agency for the jurisdiction into which the family 
        has moved may, in its discretion, cover the cost of assisting 
        the family under its contract with the Secretary or through 
        reimbursement from the other agency under that agency's 
        contract.
            (3) Authority to deny assistance to certain families who 
        move.--A family may not receive housing assistance as provided 
        under this subsection if the family has moved from a dwelling 
        unit in violation of the lease for the dwelling unit.
            (4) Funding allocations.--In providing assistance amounts 
        under this title for public housing agencies for any fiscal 
        year, the Secretary may give consideration to any reduction or 
        increase in the number of resident families under the program 
        of an agency in the preceding fiscal year as a result of this 
        subsection.
    (f) 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 
receiving housing assistance who 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 Violence Against Women Act of 1994.

SEC. 322. RESIDENT CONTRIBUTION.

    (a) Amount.--
            (1) Monthly rent contribution.--An assisted family shall 
        contribute on a monthly basis for the rental of an assisted 
        dwelling unit an amount that the public housing agency 
        determines is appropriate with respect to the family and the 
        unit, but which--
                    (A) shall not be less than the minimum monthly 
                rental contribution determined under subsection (b); 
                and
                    (B) shall not exceed the greatest of--
                            (i) 30 percent of the monthly adjusted 
                        income of the family;
                            (ii) 10 percent of the monthly income of 
                        the family; and
                            (iii) 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.
            (2) Excess rental amount.--In any case in which the monthly 
        rent charged for a dwelling unit pursuant to the housing 
        assistance payments contract exceeds the applicable payment 
        standard (established under section 353) for the dwelling unit, 
        the assisted family residing in the unit shall contribute (in 
        addition to the amount of the monthly rent contribution 
        otherwise determined under paragraph (1) for such family) such 
        entire excess rental amount.
    (b) Minimum Monthly Rental Contribution.--
            (1) In general.--The public housing agency shall determine 
        the amount of the minimum monthly rental contribution of an 
        assisted family (which rent shall include any amount allowed 
        for utilities), which--
                    (A) shall be based upon factors including the 
                adjusted income of the family and any other factors 
                that the agency considers appropriate;
                    (B) shall be not less than $25, nor more than $50; 
                and
                    (C) may be increased annually by the agency, except 
                that no such annual increase may exceed 10 percent of 
                the amount of the minimum monthly contribution in 
                effect for the preceding year.
            (2) Hardship provisions.--
                    (A) In general.--Notwithstanding paragraph (1), a 
                public housing agency shall grant an exemption in whole 
                or in part from payment of the minimum monthly rental 
                contribution established under this paragraph to any 
                assisted family unable to pay such amount because of 
                financial 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; (ii) the family 
                would be evicted as a result of imposition of the 
                minimum rent; (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 an assisted family requests 
                a hardship exemption under this paragraph and the 
                public housing agency reasonably determines the 
                hardship to be of a temporary nature, an exemption 
                shall not be granted during the 90-day period beginning 
                upon the making of a request for the exemption. An 
                assisted family may not be evicted during such 90-day 
                period for nonpayment of rent. In such a case, if the 
                assisted family thereafter demonstrates that the 
                financial hardship is of a long-term basis, the agency 
                shall retroactively exempt the family from the 
                applicability of the minimum rent requirement for such 
                90-day period.
    (c) Treatment of Changes in Rental Contribution.--
            (1) Notification of changes.--A public housing agency shall 
        promptly notify the owner of an assisted dwelling unit of any 
        change in the resident contribution by the assisted family 
        residing in the unit that takes effect immediately or at a 
        later date.
            (2) Collection of retroactive changes.--In the case of any 
        change in the rental contribution of an assisted family that 
        affects rental payments previously made, the public housing 
        agency shall collect any additional amounts required to be paid 
        by the family under such change directly from the family and 
        shall refund any excess rental contribution paid by the family 
        directly to the family.
    (d) Phase-In of Rent Contribution Increases.--
            (1) In general.--Except as provided in paragraph (2), for 
        any family that is receiving tenant-based rental assistance 
        under section 8 of the United States Housing Act of 1937 upon 
        the initial applicability of the provisions of this title to 
        such family, if the monthly contribution for rental of an 
        assisted dwelling unit to be paid by the family upon such 
        initial applicability is greater than the amount paid by the 
        family under the provisions of the United States Housing Act of 
        1937 immediately before such applicability, any such resulting 
        increase in rent contribution shall be--
                    (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 applicability; and
                    (B) limited to not more than 10 percent per year if 
                such increase is more than 10 percent but less than 30 
                percent of such contribution before initial 
                applicability.
            (2) Exception.--The minimum rent contribution requirement 
        under subsection (b)(1) shall apply to each family described in 
        paragraph (1) of this subsection, notwithstanding such 
        paragraph.

SEC. 323. RENTAL INDICATORS.

    (a) In General.--The Secretary shall establish and issue rental 
indicators under this section periodically, but not less than annually, 
for existing rental dwelling units that are eligible dwelling units. 
The Secretary shall establish and issue the rental indicators by 
housing market area (as the Secretary shall establish) for various 
sizes and types of dwelling units.
    (b) Amount.--For a market area, the rental indicator established 
under subsection (a) for a dwelling unit of a particular size and type 
in the market area shall be a dollar amount that reflects the rental 
amount for a standard quality rental unit of such size and type in the 
market area that is an eligible dwelling unit.
    (c) Effective Date.--The Secretary shall cause the proposed rental 
indicators established under subsection (a) for each market area to be 
published in the Federal Register with reasonable time for public 
comment, and such rental indicators shall become effective upon the 
date of publication in final form in the Federal Register.
    (d) Annual Adjustment.--Each rental indicator in effect under this 
section shall be adjusted to be effective on October 1 of each year to 
reflect changes, based on the most recent available data trended so 
that the indicators will be current for the year to which they apply, 
in rents for existing rental dwelling units of various sizes and types 
in the market area suitable for occupancy by families assisted under 
this title.

SEC. 324. LEASE TERMS.

    Rental assistance may be provided for an eligible dwelling unit 
only if the assisted family and the owner of the dwelling unit enter 
into a lease for the unit that--
            (1) provides for a single lease term of 12 months and 
        continued tenancy after such term under a periodic tenancy on a 
        month-to-month basis;
            (2) contains terms and conditions specifying that 
        termination of tenancy during the term of a lease shall be 
        subject to the provisions set forth in sections 642 and 643; 
        and
            (3) is set forth in the standard form, which is used in the 
        local housing market area by the owner and applies generally to 
        any other tenants in the property who are not assisted 
        families, together with any addendum necessary to include the 
        many terms required under this section.
A lease may include any addenda appropriate to set forth the provisions 
under this title.

SEC. 325. TERMINATION OF TENANCY.

    Each housing assistance payments contract shall provide that the 
owner shall conduct the termination of tenancy of any tenant of an 
assisted dwelling unit under the contract in accordance with applicable 
State or local laws, including providing any notice of termination 
required under such laws.

SEC. 326. ELIGIBLE OWNERS.

    (a) Ownership Entity.--Rental assistance under this title may be 
provided for any eligible dwelling unit for which the owner is any 
public agency, private person or entity (including a cooperative), 
nonprofit organization, agency of the Federal Government, or public 
housing agency.
    (b) Ineligible Owners.--
            (1) In general.--Notwithstanding subsection (a), a public 
        housing agency--
                    (A) may not enter into a housing assistance 
                payments contract (or renew an existing contract) 
                covering a dwelling unit that is owned by an owner who 
                is debarred, suspended, or subject to limited denial of 
                participation under part 24 of title 24, Code of 
                Federal Regulations;
                    (B) may prohibit, or authorize the termination or 
                suspension of, payment of housing assistance under a 
                housing assistance payments contract in effect at the 
                time such debarment, suspension, or limited denial of 
                participation takes effect.
        If the public housing agency takes action under subparagraph 
        (B), the agency shall take such actions as may be necessary to 
        protect assisted families who are affected by the action, which 
        may include the provision of additional assistance under this 
        title to such families.
            (2) Prohibition of sale or rental to related parties.--The 
        Secretary shall establish guidelines to prevent housing 
        assistance payments for a dwelling unit that is owned by any 
        spouse, child, or other party who allows an owner described in 
        paragraph (1) to maintain control of the unit.

SEC. 327. SELECTION OF DWELLING UNITS.

    (a) Family Choice.--The determination of the dwelling unit in which 
an assisted family resides and for which housing assistance is provided 
under this title shall be made solely by the assisted family, subject 
to the provisions of this title and any applicable law.
    (b) Deed Restrictions.--Housing assistance may not be used in any 
manner that abrogates any local deed restriction that applies to any 
housing consisting of 1 to 4 dwelling units. Nothing in this section 
may be construed to affect the provisions or applicability of the Fair 
Housing Act.

SEC. 328. ELIGIBLE DWELLING UNITS.

    (a) In General.--A dwelling unit shall be an eligible dwelling unit 
for purposes of this title only if the public housing agency to provide 
housing assistance for the dwelling unit determines that the dwelling 
unit--
            (1) is an existing dwelling unit that is not located within 
        a nursing home or the grounds of any penal, reformatory, 
        medical, mental, or similar public or private institution; and
            (2) complies--
                    (A) in the case of a dwelling unit located in a 
                jurisdiction which has in effect laws, regulations, 
                standards, or codes regarding habitability of 
                residential dwellings, with such applicable laws, 
                regulations, standards, or codes; or
                    (B) in the case of a dwelling unit located in a 
                jurisdiction which does not have in effect laws, 
                regulations, standards, or codes described in 
                subparagraph (A), with the housing quality standards 
                established under subsection (c).
Each public housing agency providing housing assistance shall identify, 
in the local housing management plan for the agency, whether the agency 
is utilizing the standard under subparagraph (A) or (B) of paragraph 
(2).
    (b) Determinations.--
            (1) In general.--A public housing agency shall make the 
        determinations required under subsection (a) pursuant to an 
        inspection of the dwelling unit conducted before any assistance 
        payment is made for the unit.
            (2) Expeditious inspection.--Inspections of dwelling units 
        under this subsection shall be made before the expiration of 
        the 15-day period beginning upon a request by the resident or 
        landlord to the public housing agency. The performance of the 
        agency in meeting the 15-day inspection deadline shall be taken 
        into account in assessing the performance of the agency.
    (c) Federal Housing Quality Standards.--The Secretary shall 
establish housing quality standards under this subsection that ensure 
that assisted 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 
232(b). The Secretary shall differentiate between major and minor 
violations of such standards.
    (d) Annual Inspections.--Each public housing agency providing 
housing assistance shall make an annual inspection of each assisted 
dwelling unit during the term of the housing assistance payments 
contracts for the unit to determine whether the unit is maintained in 
accordance with the requirements under subsection (a)(2). The agency 
shall retain the records of the inspection for a reasonable time and 
shall make the records available upon request to the Secretary, the 
Inspector General for the Department of Housing and Urban Development, 
and any auditor conducting an audit under section 541.
    (e) Inspection Guidelines.--The Secretary shall establish 
procedural guidelines and performance standards to facilitate 
inspections of dwelling units and conform such inspections with 
practices utilized in the private housing market. Such guidelines and 
standards shall take into consideration variations in local laws and 
practices of public housing agencies and shall provide flexibility to 
authorities appropriate to facilitate efficient provision of assistance 
under this title.
    (f) Rule of Construction.--This section may not be construed to 
prevent the provision of housing assistance in connection with 
supportive services for elderly or disabled families.

SEC. 329. HOMEOWNERSHIP OPTION.

    (a) In General.--A public housing agency providing housing 
assistance under this title may provide homeownership assistance to 
assist eligible families to purchase a dwelling unit (including 
purchase under lease-purchase homeownership plans).
    (b) Requirements.--A public housing agency providing homeownership 
assistance under this section shall, as a condition of an eligible 
family receiving such assistance, require the family to--
            (1) demonstrate that the family has sufficient income from 
        employment or other sources (other than public assistance), as 
        determined in accordance with requirements established by the 
        agency; and
            (2) meet any other initial or continuing requirements 
        established by the public housing agency.
    (c) Downpayment Requirement.--
            (1) In general.--A public housing agency may establish 
        minimum downpayment requirements, if appropriate, in connection 
with loans made for the purchase of dwelling units for which 
homeownership assistance is provided under this section. If the agency 
establishes a minimum downpayment requirement, 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 purchase, subject to the requirements of paragraph (2).
            (2) Direct family contribution.--In purchasing housing 
        pursuant to this section subject to a downpayment requirement, 
        each family shall contribute an amount of the downpayment, from 
        resources of the family other than grants, gifts, 
        contributions, or other similar amounts referred to in 
        paragraph (1), that is not less than 1 percent of the purchase 
        price.
    (d) Ineligibility Under Other Programs.--A family may not receive 
homeownership assistance pursuant to this section during any period 
when assistance is being provided for the family under other Federal 
homeownership assistance programs, as determined by the Secretary, 
including assistance under the HOME Investment Partnerships Act, the 
Homeownership and Opportunity Through HOPE Act, title II of the Housing 
and Community Development Act of 1987, and section 502 of the Housing 
Act of 1949.

SEC. 330. ASSISTANCE FOR RENTAL OF MANUFACTURED HOMES.

    (a) Authority.--Nothing in this title may be construed to prevent a 
public housing agency from providing housing assistance under this 
title on behalf of a low-income family for the rental of--
            (1) a manufactured home that is the principal residence of 
        the family and the real property on which the home is located; 
        or
            (2) the real property on which is located a manufactured 
        home, which is owned by the family and is the principal 
        residence of the family.
    (b) Assistance for Certain Families Owning Manufactured Homes.--
            (1) Authority.--Notwithstanding section 351 or any other 
        provision of this title, a public housing agency that receives 
        amounts under a contract under section 302 may enter into a 
        housing assistance payment contract to make assistance payments 
        under this title to a family that owns a manufactured home, but 
        only as provided in paragraph (2).
            (2) Limitations.--In the case only of a low-income family 
        that owns a manufactured home, rents the real property on which 
        it is located, and to whom housing assistance under this title 
        has been made available for the rental of such property, the 
        public housing agency making such assistance available shall 
        enter into a contract to make housing assistance payments under 
        this title directly to the family (rather than to the owner of 
        such real property) if--
                    (A) the owner of the real property refuses to enter 
                into a contract to receive housing assistance payments 
                pursuant to section 351(a);
                    (B) the family was residing in such manufactured 
                home on such real property at the time such housing 
                assistance was initially made available on behalf of 
                the family;
                    (C) the family provides such assurances to the 
                agency, as the Secretary may require, to ensure that 
                amounts from the housing assistance payments are used 
                for rental of the real property; and
                    (D) the rental of the real property otherwise 
                complies with the requirements for assistance under 
                this title.
        A contract pursuant to this subsection shall be subject to the 
        provisions of section 351 and any other provisions applicable 
        to housing assistance payments contracts under this title, 
        except that the Secretary may provide such exceptions as the 
        Secretary considers appropriate to facilitate the provision of 
        assistance under this subsection.

    Subtitle C--Payment of Housing Assistance on Behalf of Assisted 
                                Families

SEC. 351. HOUSING ASSISTANCE PAYMENTS CONTRACTS.

    (a) In General.--Each public housing agency that receives amounts 
under a contract under section 302 may enter into housing assistance 
payments contracts with owners of existing dwelling units to make 
housing assistance payments to such owners in accordance with this 
title.
    (b) PHA Acting As Owner.--A public housing agency may enter into a 
housing assistance payments contract to make housing assistance 
payments under this title to itself (or any agency or instrumentality 
thereof) as the owner of dwelling units (other than public housing), 
and the agency shall be subject to the same requirements that are 
applicable to other owners, except that the determinations under 
section 328(a) and 354(b) shall be made by a competent party not 
affiliated with the agency, and the agency shall be responsible for any 
expenses of such determinations.
    (c) Provisions.--Each housing assistance payments contract shall--
            (1) have a term of not more than 12 months;
            (2) require that the assisted dwelling unit may be rented 
        only pursuant to a lease that complies with the requirements of 
        section 324;
            (3) comply with the requirements of sections 325, 642, and 
        643 (relating to termination of tenancy);
            (4) require the owner to maintain the dwelling unit in 
        accordance with the applicable standards under section 
        328(a)(2); and
            (5) provide that the screening and selection of eligible 
        families for assisted dwelling units shall be the function of 
        the owner.

SEC. 352. AMOUNT OF MONTHLY ASSISTANCE PAYMENT.

    (a) Units Having Gross Rent Exceeding Payment Standard.--In the 
case of a dwelling unit bearing a gross rent that exceeds the payment 
standard established under section 353 for a dwelling unit of the 
applicable size and located in the market area in which such assisted 
dwelling unit is located, the amount of the monthly assistance payment 
shall be the amount by which such payment standard exceeds the amount 
of the resident contribution determined in accordance with section 
322(a)(1).
    (b) Shopping Incentive for Units Having Gross Rent Not Exceeding 
Payment Standard.--In the case of an assisted family renting an 
eligible dwelling unit bearing a gross rent that does not exceed the 
payment standard established under section 353 for a dwelling unit of 
the applicable size and located in the market area in which such 
assisted dwelling unit is located, the following requirements shall 
apply:
            (1) Amount of monthly assistance payment.--The amount of 
        the monthly assistance payment for housing assistance under 
        this title on behalf of the assisted family shall be the amount 
        by which the gross rent for the dwelling unit exceeds the 
        amount of the resident contribution.
            (2) Escrow of shopping incentive savings.--An amount equal 
        to 50 percent of the difference between payment standard and 
        the gross rent for the dwelling unit shall be placed in an 
        interest bearing escrow account on behalf of such family on a 
        monthly basis by the public housing agency. Amounts in the 
        escrow account shall be made available to the assisted family 
        on an annual basis.
            (3) Deficit reduction.--The public housing agency making 
        housing assistance payments on behalf of such assisted family 
        in a fiscal year shall reserve from amounts made available to 
        the agency for assistance payments for such fiscal year an 
        amount equal to the amount described in paragraph (2). At the 
        end of each fiscal year, the Secretary shall recapture any such 
        amounts reserved by public housing agencies and such amounts 
        shall be covered into the General Fund of the Treasury of the 
        United States.
For purposes of this section, in the case of a family receiving 
homeownership assistance under section 329, the term ``gross rent'' 
shall mean the homeownership costs to the family as determined in 
accordance with guidelines of the Secretary.

SEC. 353. PAYMENT STANDARDS.

    (a) Establishment.--Each public housing agency providing housing 
assistance under this title shall establish payment standards under 
this section for various areas, and sizes and types of dwelling units, 
for use in determining the amount of monthly housing assistance payment 
to be provided on behalf of assisted families.
    (b) Use of Rental Indicators.--The payment standard for each size 
and type of housing for each market area shall be an amount that is not 
less than 80 percent, and not greater than 120 percent, of the rental 
indicator established under section 323 for such size and type for such 
area.
    (c) Review.--If the Secretary determines, at any time, that a 
significant percentage of the assisted families who are assisted by a 
public housing agency and are occupying dwelling units of a particular 
size are paying more than 30 percent of their adjusted incomes for 
rent, the Secretary shall review the payment standard established by 
the agency for such size dwellings. If, pursuant to the review, the 
Secretary determines that such payment standard is not appropriate to 
serve the needs of the low-income population of the jurisdiction served 
by the agency (taking into consideration rental costs in the area), as 
identified in the approved community improvement plan of the agency, 
the Secretary may require the public housing agency to modify the 
payment standard.

SEC. 354. REASONABLE RENTS.

    (a) Establishment.--The rent charged for a dwelling unit for which 
rental assistance is provided under this title shall be established 
pursuant to negotiation and agreement between the assisted family and 
the owner of the dwelling unit.
    (b) Reasonableness.--
            (1) Determination.--A public housing agency providing 
        rental assistance under this title for a dwelling unit shall, 
        before commencing assistance payments for a unit (with respect 
        to initial contract rents and any rent revisions), determine 
        whether the rent charged for the unit exceeds the rents charged 
        for comparable units in the applicable private unassisted 
market.
            (2) Unreasonable rents.--If the agency determines that the 
        rent charged for a dwelling unit exceeds such comparable rents, 
        the agency shall--
                    (A) inform the assisted family renting the unit 
                that such rent exceeds the rents for comparable 
                unassisted units in the market; and
                    (B) refuse to provide housing assistance payments 
                for such unit.

SEC. 355. PROHIBITION OF ASSISTANCE FOR VACANT RENTAL UNITS.

    If an assisted family vacates a dwelling unit for which rental 
assistance is provided under a housing assistance payments contract 
before the expiration of the term of the lease for the unit, rental 
assistance pursuant to such contract may not be provided for the unit 
after the month during which the unit was vacated.

            Subtitle D--General and Miscellaneous Provisions

SEC. 371. DEFINITIONS.

    For purposes of this title:
            (1) Assisted dwelling unit.--The term ``assisted dwelling 
        unit'' means a dwelling unit in which an assisted family 
        resides and for which housing assistance payments are made 
        under this title.
            (2) Assisted family.--The term ``assisted family'' means an 
        eligible family on whose behalf housing assistance payments are 
        made under this title or who has been selected and approved for 
        housing assistance.
            (3) Choice-based.--The term ``choice-based'' means, with 
        respect to housing assistance, that the assistance is not 
        attached to a dwelling unit but can be used for any eligible 
        dwelling unit selected by the eligible family.
            (4) Eligible dwelling unit.--The term ``eligible dwelling 
        unit'' means a dwelling unit that complies with the 
        requirements under section 328 for consideration as an eligible 
        dwelling unit.
            (5) Eligible family.--The term ``eligible family'' means a 
        family that meets the requirements under section 321(a) for 
        assistance under this title.
            (6) Homeownership assistance.--The term ``homeownership 
        assistance'' means housing assistance provided under section 
        329 for the ownership of a dwelling unit.
            (7) Housing assistance.--The term ``housing assistance'' 
        means choice-based assistance provided under this title on 
        behalf of low-income families for the rental or ownership of an 
        eligible dwelling unit.
            (8) Housing assistance payments contract.--The term 
        ``housing assistance payments contract'' means a contract under 
        section 351 between a public housing agency (or the Secretary) 
        and an owner to make housing assistance payments under this 
        title to the owner on behalf of an assisted family.
            (9) Public housing agency.--The terms ``public housing 
        agency'' and ``agency'' have the meaning given such terms in 
        section 103, except that the terms include--
                    (A) a consortia of public housing agencies that the 
                Secretary determines has the capacity and capability to 
                administer a program for housing assistance under this 
                title in an efficient manner;
                    (B) any other entity that, upon the effective date 
                of this Act, was administering any program for tenant-
                based rental assistance under section 8 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), pursuant to a contract with the Secretary or 
                a public housing agency; and
                    (C) with respect to any area in which no public 
                housing agency has been organized or where the 
                Secretary determines that a public housing agency is 
                unwilling or unable to implement this title, or is not 
                performing effectively--
                            (i) the Secretary or another entity that by 
                        contract agrees to receive assistance amounts 
                        under this title and enter into housing 
                        assistance payments contracts with owners and 
                        perform the other functions of public housing 
                        agency under this title; or
                            (ii) notwithstanding any provision of State 
                        or local law, a public housing agency for 
                        another area that contracts with the Secretary 
                        to administer a program for housing assistance 
                        under this title, without regard to any 
                        otherwise applicable limitations on its area of 
                        operation.
            (10) Owner.--The term ``owner'' means the person or entity 
        having the legal right to lease or sublease dwelling units. 
        Such term includes any principals, general partners, primary 
        shareholders, and other similar participants in any entity 
        owning a multifamily housing project, as well as the entity 
        itself.
            (11) Rent.--The terms ``rent'' and ``rental'' include, with 
        respect to members of a cooperative, the charges under the 
        occupancy agreements between such members and the cooperative.
            (12) Rental assistance.--The term ``rental assistance'' 
        means housing assistance provided under this title for the 
        rental of a dwelling unit.

SEC. 372. RENTAL ASSISTANCE FRAUD RECOVERIES.

    (a) Authority To Retain Recovered Amounts.--The Secretary shall 
permit public housing agencies administering housing assistance under 
this title to retain, out of amounts obtained by the authorities from 
tenants that are due as a result of fraud and abuse, an amount 
(determined in accordance with regulations issued by the Secretary) 
equal to the greater of--
            (1) 50 percent of the amount actually collected; or
            (2) the actual, reasonable, and necessary expenses related 
        to the collection, including costs of investigation, legal 
        fees, and collection agency fees.
    (b) Use.--Amounts retained by an agency shall be made available for 
use in support of the affected program or project, in accordance with 
regulations issued by the Secretary. If the Secretary is the principal 
party initiating or sustaining an action to recover amounts from 
families or owners, the provisions of this section shall not apply.
    (c) Recovery.--Amounts may be recovered under this section--
            (1) by an agency through a lawsuit (including settlement of 
        the lawsuit) brought by the agency or through court-ordered 
        restitution pursuant to a criminal proceeding resulting from an 
        agency's investigation where the agency seeks prosecution of a 
        family or where an agency seeks prosecution of an owner;
            (2) through administrative repayment agreements with a 
        family or owner entered into as a result of an administrative 
        grievance procedure conducted by an impartial decisionmaker in 
        accordance with section 110; or
            (3) through an agreement between the parties.

SEC. 373. STUDY REGARDING GEOGRAPHIC CONCENTRATION OF ASSISTED 
              FAMILIES.

    (a) In General.--The Secretary shall conduct a study of the 
geographic areas in the State of Illinois served by the Housing 
Authority of Cook County and the Chicago Housing Authority and submit 
to the Congress a report and a specific proposal, which addresses and 
resolves the issues of--
            (1) the adverse impact on local communities due to 
        geographic concentration of assisted households under the 
        tenant-based housing programs under section 8 of the United 
        States Housing Act of 1937 (as in effect upon the enactment of 
        this Act) and under this title; and
            (2) facilitating the deconcentration of such assisted 
        households by providing broader housing choices to such 
        households.
The study shall be completed, and the report shall be submitted, not 
later than 90 days after the date of the enactment of this Act.
    (b) Concentration.--For purposes of this section, the term 
``concentration'' means, with respect to any area within a census 
tract, that--
            (1) 15 percent or more of the households residing within 
        such area have incomes which do not exceed the poverty level; 
        or
            (2) 15 percent or more of the total affordable housing 
        stock located within such area is assisted housing.
    (c) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 374. STUDY REGARDING RENTAL ASSISTANCE.

    The Secretary shall conduct a nationwide study of the choice-based 
housing assistance program under this title and the tenant-based rental 
assistance program under section 8 of the United States Housing Act of 
1937 (as in effect pursuant to section 601(c) and 602(b)). The study 
shall, for various localities--
            (1) determine who are the providers of the housing in which 
        families assisted under such programs reside;
            (2) describe and analyze the physical and demographic 
        characteristics of the housing in which such assistance is 
        used, including, for housing in which at least one such 
        assisted family resides, the total number of units in the 
        housing and the number of units in the housing for which such 
        assistance is provided;
            (3) determine the total number of units for which such 
        assistance is provided;
            (4) describe the durations that families remain on waiting 
        lists before being provided such housing assistance; and
            (5) assess the extent and quality of participation of 
        housing owners in such assistance programs in relation to the 
        local housing market, including comparing--
                    (A) the quality of the housing assisted to the 
                housing generally available in the same market; and
                    (B) the extent to which housing is available to be 
                occupied using such assistance to the extent to which 
                housing is generally available in the same market.
The Secretary shall submit a report describing the results of the study 
to the Congress not later than the expiration of the 2-year period 
beginning on the date of the enactment of this Act.

               TITLE IV--HOME RULE FLEXIBLE GRANT OPTION

SEC. 401. PURPOSE.

    The purpose of this title is to give local governments and 
municipalities the flexibility to design creative approaches for 
providing and administering Federal housing assistance based on the 
particular needs of the communities that--
            (1) give incentives to low-income families with children 
        where the head of household is working, seeking work, or 
        preparing for work by participating in job training, 
        educational programs, or programs that assist people to obtain 
        employment and become economically self-sufficient;
            (2) reduce cost and achieve greater cost-effectiveness in 
        Federal housing assistance expenditures;
            (3) increase housing choices for low-income families; and
            (4) reduce excessive geographic concentration of assisted 
        families.

SEC. 402. FLEXIBLE GRANT PROGRAM.

    (a) Authority and Use.--The Secretary shall carry out a program 
under which a jurisdiction may, upon the application of the 
jurisdiction and the review and approval of the Secretary, receive, 
combine, and enter into performance-based contracts for the use of 
amounts of covered housing assistance in a period consisting of not 
less than 1 nor more than 5 fiscal years in the manner determined 
appropriate by the participating jurisdiction--
            (1) to provide housing assistance and services for low-
        income families in a manner that facilitates the transition of 
        such families to work;
            (2) to reduce homelessness;
            (3) to increase homeownership among low-income families; 
        and
            (4) for other housing purposes for low-income families 
        determined by the participating jurisdiction.
    (b) Inapplicability of Categorical Program Requirements.--
            (1) In general.--Except as provided in paragraph (2) and 
        section 405, the provisions of this Act regarding use of 
        amounts made available under each of the programs included as 
        covered housing assistance and the program requirements 
        applicable to each such program shall not apply to amounts 
        received by a jurisdiction pursuant to this title.
            (2) Applicability of certain laws.--This title may not be 
        construed to exempt assistance under this Act from, or make 
        inapplicable any provision of this Act or of any other law that 
        requires that assistance under this Act be provided in 
        compliance with--
                    (A) title VI of the Civil Rights Act of 1964 (42 
                U.S.C. 2000d et seq.);
                    (B) the Fair Housing Act (42 U.S.C. 3601 et seq.);
                    (C) section 504 of the Rehabilitation Act of 1973 
                (29 U.S.C. 701 et seq.);
                    (D) title IX of the Education Amendments of 1972 
                (86 Stat. 373 et seq.);
                    (E) the Age Discrimination Act of 1975 (42 U.S.C. 
                6101 et seq.);
                    (F) the Americans with Disabilities Act of 1990; or
                    (G) the National Environmental Policy Act of 1969 
                and other provisions of law that further protection of 
                the environment (as specified in regulations that shall 
                be issued by the Secretary).
    (c) Effect on Program Allocations for Covered Housing Assistance.--
The amount of assistance received pursuant to this title by a 
participating jurisdiction shall not be decreased, because of 
participation in the program under this title, from the sum of the 
amounts that otherwise would be made available for or within the 
participating jurisdiction under the programs included as covered 
housing assistance.

SEC. 403. COVERED HOUSING ASSISTANCE.

    For purposes of this title, the term ``covered housing assistance'' 
means--
            (1) operating assistance provided under section 9 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);
            (2) modernization assistance provided under section 14 of 
        such Act;
            (3) assistance provided under section 8 of such Act for the 
        certificate and voucher programs;
            (4) assistance for public housing provided under title II 
        of this Act; and
            (5) choice-based rental assistance provided under title III 
        of this Act.
Such term does not include any amounts obligated for assistance under 
existing contracts for project-based assistance under section 8 of the 
United States Housing Act of 1937 or section 601(f) of this Act.

SEC. 404. PROGRAM REQUIREMENTS.

    (a) Eligible Families.--Each family on behalf of whom assistance is 
provided for rental or homeownership of a dwelling unit using amounts 
made available pursuant to this title shall be a low-income family. 
Each dwelling unit assisted using amounts made available pursuant to 
this title shall be available for occupancy only by families that are 
low-income families at the time of their initial occupancy of the unit.
    (b) Compliance With Assistance Plan.--A participating jurisdiction 
shall provide assistance using amounts received pursuant to this title 
in the manner set forth in the plan of the jurisdiction approved by the 
Secretary under section 406(a)(2).
    (c) Rent Policy.--A participating jurisdiction shall ensure that 
the rental contributions charged to families assisted with amounts 
received pursuant to this title are reasonable and designed to 
encourage employment and self-sufficiency by participating families.
    (d) Housing Quality Standards.--
            (1) Compliance.--A participating jurisdiction shall ensure 
        that housing assisted with amounts received pursuant to this 
        title is maintained in a condition that complies--
                    (A) in the case of housing located in a 
                jurisdiction which has in effect laws, regulations, 
                standards, or codes regarding habitability of 
                residential dwellings, with such applicable laws, 
                regulations, standards, or codes; or
                    (B) in the case of housing located in a 
                jurisdiction which does not have in effect laws, 
                regulations, standards, or codes described in paragraph 
                (1), with the housing quality standards established 
                under paragraph (2).
            (2) Federal housing quality standards.--The Secretary shall 
        establish housing quality standards under this paragraph that 
        ensure that dwelling units assisted under this title 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 sections 232(b) and 
        328(c). The Secretary shall differentiate between major and 
        minor violations of such standards.
    (e) Number of Families Assisted.--A participating jurisdiction 
shall ensure that, in providing assistance with amounts received 
pursuant to this title in each fiscal year, not less than substantially 
the same total number of eligible low-income families are assisted as 
would have been assisted had the amounts of covered housing assistance 
not been combined for use under this title.
    (f) Consistency With Welfare Program.--A participating jurisdiction 
shall ensure that assistance provided with amounts received pursuant to 
this title is provided in a manner that is consistent with the welfare, 
public assistance, or other economic self-sufficiency programs 
operating in the jurisdiction by facilitating the transition of 
assisted families to work, which may include requiring compliance with 
the requirements under such welfare, public assistance, or self-
sufficiency programs as a condition of receiving housing assistance 
with amounts provided under this title.
    (g) Treatment of Currently Assisted Families.--
            (1) Continuation of assistance.--A participating 
        jurisdiction shall ensure that each family that was receiving 
        housing assistance or residing in an assisted dwelling unit 
        pursuant to any of the programs included as covered housing 
        assistance immediately before the jurisdiction initially 
        provides assistance pursuant to this title shall be offered 
        assistance or an assisted dwelling unit under the program of 
        the jurisdiction under this title.
            (2) Phase-in of rent contribution increases.--For any 
        family that was receiving housing assistance pursuant to any of 
        the programs included as covered housing assistance immediately 
        before the jurisdiction initially provides assistance pursuant 
        to this title, if the monthly contribution for rental of a 
        dwelling unit assisted under this title to be paid by the 
        family upon initial applicability of this title is greater than 
        the amount paid by the family immediately before such 
        applicability, any such resulting increase in rent contribution 
        shall be--
                    (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 applicability; and
                    (B) limited to not more than 10 percent per year if 
                such increase is more than 10 percent but less than 30 
                percent of such contribution before initial 
                applicability.
    (h) Amount of Assistance.--In providing housing assistance using 
amounts received pursuant to this title, the amount of assistance 
provided by a participating jurisdiction on behalf of each assisted 
low-income family shall be sufficient so that if the family used such 
assistance to rent a dwelling unit having a rent equal to the 40th 
percentile of rents for standard quality rental units of the same size 
and type in the same market area, the contribution toward rental paid 
by the family would be affordable (as such term is defined by the 
jurisdiction) to the family.
    (i) Portability.--A participating jurisdiction shall ensure that 
financial assistance for housing provided with amounts received 
pursuant to this title may be used by a family moving from an assisted 
dwelling unit located within the jurisdiction to obtain a dwelling unit 
located outside of the jurisdiction.
    (j) Preferences.--In providing housing assistance using amounts 
received pursuant to this section, a participating jurisdiction may 
establish a system for making housing assistance available that 
provides preference for assistance to families having certain 
characteristics. A system of preferences established pursuant to this 
subsection shall be based on local housing needs and priorities, as 
determined by the jurisdiction using generally accepted data sources.

SEC. 405. APPLICABILITY OF CERTAIN PROVISIONS.

    (a) Public Housing Demolition and Disposition Requirements.--
Section 261 shall continue to apply to public housing notwithstanding 
any use of the housing under this title.
    (b) Labor Standards.--Section 112 shall apply to housing assisted 
with amounts provided pursuant to this title, other than housing 
assisted solely due to occupancy by families receiving tenant-based 
assistance.

SEC. 406. APPLICATION.

    (a) In General.--The Secretary shall provide for jurisdictions to 
submit applications to receive and use covered housing assistance 
amounts as authorized in this title for periods of not less than 1 and 
not more than 5 fiscal years. An application--
            (1) shall be submitted only after the jurisdiction provides 
        for citizen participation through a public hearing and, if 
        appropriate, other means;
            (2) shall include a plan developed by the jurisdiction for 
        the provision of housing assistance with amounts received 
        pursuant to this title that takes into consideration comments 
        from the public hearing and any other public comments on the 
        proposed program, and comments from current and prospective 
        residents who would be affected, and that includes criteria for 
        meeting each of the requirements under section 404 and this 
        title;
            (3) shall describe how the plan for use of amounts will 
        assist in meeting the goals set forth in section 401;
            (4) shall propose standards for measuring performance in 
        using assistance provided pursuant to this title based on the 
        performance standards under subsection (b)(2);
            (5) shall propose the length of the period for which the 
        jurisdiction is applying for assistance under this title;
            (6) may include a request assistance for training and 
        technical assistance to assist with design of the program and 
        to participate in a detailed evaluation;
            (7) shall--
                    (A) in the case of the application of any 
                jurisdiction within whose boundaries are areas subject 
                to any other unit of general local government, include 
                the signed consent of the appropriate executive 
                official of such unit to the application; and
                    (B) in the case of the application of a consortia 
                of units of general local government (as provided under 
                section 409(1)(B)), include the signed consent of the 
                appropriate executive officials of each unit included 
                in the consortia;
            (8) shall include information sufficient, in the 
        determination of the Secretary--
                    (A) to demonstrate that the jurisdiction has or 
                will have management and administrative capacity 
                sufficient to carry out the plan under paragraph (2);
                    (B) to demonstrate that carrying out the plan will 
                not result in excessive duplication of administrative 
                efforts and costs, particularly with respect to 
                activities performed by public housing agencies 
                operating within the boundaries of the jurisdiction;
                    (C) to describe the function and activities to be 
                carried out by such public housing agencies affected by 
                the plan; and
                    (D) to demonstrate that the amounts received by the 
                jurisdiction will be maintained separate from other 
                funds available to the jurisdiction and will be used 
                only to carry out the plan; and
            (9) shall include information describing how the 
        jurisdiction will make decisions regarding asset management of 
        housing for low-income families under programs for covered 
housing assistance or assisted with grant amounts under this title.
A plan required under paragraph (2) to be included in the application 
may be contained in a memorandum of agreement or other document 
executed by a jurisdiction and public housing agency, if such document 
is submitted together with the application.
    (b) Review, Approval, and Performance Standards.--
            (1) Review.--The Secretary shall review applications for 
        assistance pursuant to this title and shall approve or 
        disapprove such applications within 60 days after their 
        submission. The Secretary shall provide affected public housing 
        agencies an opportunity to review an application submitted 
        under this subsection and to provide written comments on the 
        application, which shall be a period of not less than 30 days 
        ending before the Secretary approves or disapproves the 
        application. If the Secretary determines that the application 
        complies with the requirements of this title, the Secretary 
        shall offer to enter into an agreement with jurisdiction 
        providing for assistance pursuant to this title and 
        incorporating a requirement that the jurisdiction achieve a 
        particular level of performance in each of the areas for which 
        performance standards are established under paragraph (2). If 
        the Secretary determines that an application does not comply 
        with the requirements of this title, the Secretary shall notify 
        the jurisdiction submitting the application of the reasons for 
        such disapproval and actions that may be taken to make the 
        application approvable.
            (2) Performance standards.--The Secretary shall establish 
        standards for measuring performance of jurisdictions in the 
        following areas:
                    (A) Success in moving dependent low-income families 
                to economic self-sufficiency.
                    (B) Success in reducing the numbers of long-term 
                homeless families.
                    (C) Decrease in the per-family cost of providing 
                assistance.
                    (D) Reduction of excessive geographic concentration 
                of assisted families.
                    (E) Any other performance goals that the Secretary 
                may prescribe.
            (3) Approval.--If the Secretary and a jurisdiction that the 
        Secretary determines has submitted an application meeting the 
        requirements of this title enter into an agreement referred to 
        in paragraph (1), the Secretary shall approve the application 
        and provide covered housing assistance for the jurisdiction in 
        the manner authorized under this title. The Secretary may not 
        approve any application for assistance pursuant to this title 
        unless the Secretary and jurisdiction enter into an agreement 
        referred to in paragraph (1). The Secretary shall establish 
        requirements for the approval of applications under this 
        section submitted by public housing agencies designated under 
        section 533(a) as troubled, which may include additional or 
        different criteria determined by the Secretary to be more 
        appropriate for such agencies.
    (c) Status of PHA's.--Nothing in this section or title may be 
construed to require any change in the legal status of any public 
housing agency or in any legal relationship between a jurisdiction and 
a public housing agency as a condition of participation in the program 
under this title.

SEC. 407. TRAINING.

    The Secretary, in consultation with representatives of public and 
assisted housing interests, shall provide training and technical 
assistance relating to providing assistance under this title and 
conduct detailed evaluations of up to 30 jurisdictions for the purpose 
of identifying replicable program models that are successful at 
carrying out the purposes of this title.

SEC. 408. ACCOUNTABILITY.

    (a) Performance Goals.--The Secretary shall monitor the performance 
of participating jurisdictions in providing assistance pursuant to this 
title based on the performance standards contained in the agreements 
entered into pursuant to section 406(b)(1).
    (b) Keeping Records.--Each participating jurisdiction shall keep 
such records as the Secretary may prescribe as reasonably necessary to 
disclose the amounts and the disposition of amounts provided pursuant 
to this title, to ensure compliance with the requirements of this title 
and to measure performance against the performance goals under 
subsection (a).
    (c) Reports.--Each participating jurisdiction agency shall submit 
to the Secretary a report, or series of reports, in a form and at a 
time specified by the Secretary. The reports shall--
            (1) document the use of funds made available under this 
        title;
            (2) provide such information as the Secretary may request 
        to assist the Secretary in assessing the program under this 
        title; and
            (3) describe and analyze the effect of assisted activities 
        in addressing the purposes of this title.
    (d) Access to Documents by Secretary.--The Secretary shall have 
access for the purpose of audit and examination to any books, 
documents, papers, and records that are pertinent to assistance in 
connection with, and the requirements of, this title.
    (e) Access to Documents by Comptroller General.--The Comptroller 
General of the United States, or any of the duly authorized 
representatives of the Comptroller General, shall have access for the 
purpose of audit and examination to any books, documents, papers, and 
records that are pertinent to assistance in connection with, and the 
requirements of, this title.

SEC. 409. DEFINITIONS.

    For purposes of this title, the following definitions shall apply:
            (1) Jurisdiction.--The term ``jurisdiction'' means--
                    (A) a unit of general local government (as such 
                term is defined in section 104 of the Cranston-Gonzalez 
                National Affordable Housing Act) that has boundaries, 
                for purposes of carrying out this title, that--
                            (i) wholly contain the area within which a 
                        public housing agency is authorized to operate; 
                        and
                            (ii) do not contain any areas contained 
                        within the boundaries of any other 
                        participating jurisdiction; and
                    (B) a consortia of such units of general local 
                government, organized for purposes of this title.
            (2) Participating jurisdiction.--The term ``participating 
        jurisdiction'' means, with respect to a period for which such 
        approval is made, a jurisdiction that has been approved under 
        section 406(b)(3) to receive assistance pursuant to this title 
        for such fiscal year.

    TITLE V--ACCOUNTABILITY AND OVERSIGHT OF PUBLIC HOUSING AGENCIES

Subtitle A--Study of Alternative Methods for Evaluating Public Housing 
                                Agencies

SEC. 501. IN GENERAL.

    The Secretary of Housing and Urban Development shall provide under 
section 505 for a study to be conducted to determine the effectiveness 
of various alternative methods of evaluating the performance of public 
housing agencies and other providers of federally assisted housing.

SEC. 502. PURPOSES.

    The purposes of the study under this subtitle shall be--
            (1) to identify and examine various methods of evaluating 
        and improving the performance of public housing agencies in 
        administering public housing and tenant-based rental assistance 
        programs and of other providers of federally assisted housing, 
        which are alternatives to oversight by the Department of 
        Housing and Urban Development; and
            (2) to identify specific monitoring and oversight 
        activities currently conducted by the Department of Housing and 
        Urban Development that are insufficient or ineffective in 
        accurately and efficiently assessing the performance of public 
        housing agencies and other providers of federally assisted 
        housing, and to evaluate whether such activities should be 
        eliminated, modified, or transferred to other entities 
        (including government and private entities) to increase 
        accuracy and effectiveness and improve monitoring.

SEC. 503. EVALUATION OF VARIOUS PERFORMANCE EVALUATION SYSTEMS.

    To carry out the purpose under section 502(1), the study under this 
subtitle shall identify, and analyze and assess the costs and benefits 
of, the following methods of regulating and evaluating the performance 
of public housing agencies and other providers of federally assisted 
housing:
            (1) Current system.--The system pursuant to the United 
        States Housing Act of 1937 (as in effect upon the enactment of 
        this Act), including the methods and requirements under such 
        system for reporting, auditing, reviewing, sanctioning, and 
        monitoring of such agencies and housing providers and the 
        public housing management assessment program pursuant to 
        subtitle C of this title (and section 6(j) of the United States 
        Housing Act of 1937 (as in effect upon the enactment of this 
        Act)).
            (2) Accreditation models.--Various models that are based 
        upon accreditation of such agencies and housing providers, 
        subject to the following requirements:
                    (A) The study shall identify and analyze various 
                models used in other industries and professions for 
                accreditation and determine the extent of their 
                applicability to the programs for public housing and 
                federally assisted housing.
                    (B) If any accreditation models are determined to 
                be applicable to the public and federally assisted 
                housing programs, the study shall identify appropriate 
                goals, objectives, and procedures for an accreditation 
                program for such agencies housing providers.
                    (C) The study shall evaluate the effectiveness of 
                establishing an independent accreditation and 
                evaluation entity to assist, supplement, or replace the 
                role of the Department of Housing and Urban Development 
                in assessing and monitoring the performance of such 
                agencies and housing providers.
                    (D) The study shall identify the necessary and 
                appropriate roles and responsibilities of various 
                entities that would be involved in an accreditation 
                program, including the Department of Housing and Urban 
                Development, the Inspector General of the Department, 
                an accreditation entity, independent auditors and 
                examiners, local entities, and public housing agencies.
                    (E) The study shall determine the costs involved in 
                developing and maintaining such an independent 
                accreditation program.
                    (F) The study shall analyze the need for technical 
                assistance to assist public housing agencies in 
                improving performance and identify the most effective 
                methods to provide such assistance.
            (3) Performance based models.--Various performance-based 
        models, including systems that establish performance goals or 
        targets, assess the compliance with such goals or targets, and 
        provide for incentives or sanctions based on performance 
        relative to such goals or targets.
            (4) Local review and monitoring models.--Various models 
        providing for local, resident, and community review and 
        monitoring of such agencies and housing providers, including 
        systems for review and monitoring by local and State 
        governmental bodies and agencies.
            (5) Private models.--Various models using private 
        contractors for review and monitoring of such agencies and 
        housing providers.
            (6) Other models.--Various models of any other systems that 
        may be more effective and efficient in regulating and 
        evaluating such agencies and housing providers.

SEC. 504. CONSULTATION.

    The entity that, pursuant to section 505, carries out the study 
under this subtitle shall, in carrying out the study, consult with 
individuals and organization experienced in managing public housing, 
private real estate managers, representatives from State and local 
governments, residents of public housing, families and individuals 
receiving choice- or tenant-based assistance, the Secretary of Housing 
and Urban Development, the Inspector General of the Department of 
Housing and Urban Development, and the Comptroller General of the 
United States.

SEC. 505. CONTRACT TO CONDUCT STUDY.

    (a) In General.--Subject to subsection (b), the Secretary shall 
enter into a contract with a public or nonprofit private entity to 
conduct the study under this subtitle, using amounts made available 
pursuant to section 507.
    (b) National Academy of Public Administration.--The Secretary shall 
request the National Academy of Public Administration to enter into the 
contract under paragraph (1) to conduct the study under this subtitle. 
If such Academy declines to conduct the study, the Secretary shall 
carry out such paragraph through other public or nonprofit private 
entities.

SEC. 506. REPORT.

    (a) Interim Report.--The Secretary shall ensure that not later than 
the expiration of the 6-month period beginning on the date of the 
enactment of this Act, the entity conducting the study under this 
subtitle submits to the Congress an interim report describing the 
actions taken to carry out the study, the actions to be taken to 
complete the study, and any findings and recommendations available at 
the time.
    (b) Final Report.--The Secretary shall ensure that--
            (1) not later than the expiration of the 12-month period 
        beginning on the date of the enactment of this Act, the study 
        required under this subtitle is completed and a report 
        describing the findings and recommendations as a result of the 
        study is submitted to the Congress; and
            (2) before submitting the report under this subsection to 
        the Congress, the report is submitted to the Secretary and 
        national organizations for public housing agencies at such time 
        to provide the Secretary and such agencies an opportunity to 
        review the report and provide written comments on the report, 
        which shall be included together with the report upon 
        submission to the Congress under paragraph (1).

SEC. 507. FUNDING.

    Of any amounts made available under title V of the Housing and 
Urban Development Act of 1970 for policy development and research for 
fiscal year 1998, $500,000 shall be available to carry out this 
subtitle.

SEC. 508. EFFECTIVE DATE.

    This subtitle shall take effect on the date of the enactment of 
this Act.

         Subtitle B--Housing Evaluation and Accreditation Board

SEC. 521. ESTABLISHMENT.

    (a) In General.--There is established an independent agency in the 
executive branch of the Government to be known as the Housing 
Foundation and Accreditation Board (in this title referred to as the 
``Board'').
    (b) Requirement for Congressional Review of Study.--Notwithstanding 
any other provision of this Act, sections 523, 524, and 525 shall not 
take effect and the Board shall not have any authority to take any 
action under such sections (or otherwise) unless there is enacted a law 
specifically providing for the repeal of this subsection. This 
subsection may not be construed to prevent the appointment of the Board 
under section 522.
    (c) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 522. MEMBERSHIP.

    (a) In General.--The Board shall be composed of 12 members 
appointed by the President not later than 180 days after the date of 
the final report regarding the study required under subtitle A is 
submitted to the Congress pursuant to section 506(b), as follows:
            (1) 4 members shall be appointed from among 10 individuals 
        recommended by the Secretary of Housing and Urban Development.
            (2) 4 members shall be appointed from among 10 individuals 
        recommended by the Chairman and Ranking Minority Member of the 
        Committee on Banking, Housing, and Urban Affairs of the Senate.
            (3) 4 members appointed from among 10 individuals 
        recommended by the Chairman and Ranking Minority Member of the 
        Committee on Banking and Financial Services of the House of 
        Representatives.
    (b) Qualifications.--
            (1) Required representation.--The Board shall at all times 
        have the following members:
                    (A) 2 members who are residents of public housing 
                or dwelling units assisted under title III of this Act 
                or the provisions of section 8 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).
                    (B) At least 2, but not more than 4 members who are 
                executive directors of public housing agencies.
                    (C) 1 member who is a member of the Institute of 
                Real Estate Managers.
                    (D) 1 member who is the owner of a multifamily 
                housing project assisted under a program administered 
                by the Secretary of Housing and Urban Development.
            (2) Required experience.--The Board shall at all times have 
        as members individuals with the following experience:
                    (A) At least 1 individual who has extensive 
                experience in the residential real estate finance 
                business.
                    (B) At least 1 individual who has extensive 
                experience in operating a nonprofit organization that 
                provides affordable housing.
                    (C) At least 1 individual who has extensive 
                experience in construction of multifamily housing.
                    (D) At least 1 individual who has extensive 
                experience in the management of a community development 
                corporation.
                    (E) At least 1 individual who has extensive 
                experience in auditing participants in government 
                programs.
        A single member of the board with the appropriate experience 
        may satisfy the requirements of more than 1 subparagraph of 
        this paragraph. A single member of the board with the 
        appropriate qualifications and experience may satisfy the 
        requirements of a subparagraph of paragraph (1) and a 
        subparagraph of this paragraph.
    (c) Political Affiliation.--Not more than 6 members of the Board 
may be of the same political party.
    (d) Terms.--
            (1) In general.--Each member of the Board shall be 
        appointed for a term of 4 years, except as provided in 
        paragraphs (2) and (3).
            (2) Terms of initial appointees.--As designated by the 
        President at the time of appointment, of the members first 
        appointed--
                    (A) 3 shall be appointed for terms of 1 year;
                    (B) 3 shall be appointed for terms of 2 years;
                    (C) 3 shall be appointed for terms of 3 years; and
                    (D) 3 shall be appointed for terms of 4 years.
            (3) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of that term. A member may serve after the 
        expiration of that member's term until a successor has taken 
office. A vacancy in the Board shall be filled in the manner in which 
the original appointment was made.
    (e) Chairperson.--The Board shall elect a chairperson from among 
members of the Board.
    (f) Quorum.--A majority of the members of the Board shall 
constitute a quorum for the transaction of business.
    (g) Voting.--Each member of the Board shall be entitled to 1 vote, 
which shall be equal to the vote of every other member of the Board.
    (h) Prohibition on Additional Pay.--Members of the Board shall 
serve without compensation, but shall be reimbursed for travel, 
subsistence, and other necessary expenses incurred in the performance 
of their duties as members of the Board.

SEC. 523. FUNCTIONS.

    The purpose of this subtitle is to establish the Board as a 
nonpolitical entity to carry out, not later than the expiration of the 
12-month period beginning upon the appointment under section 522 of all 
of the initial members of the Board (or such other date as may be 
provided by law), the following functions:
            (1) Establishment of performance benchmarks.--The Board 
        shall establish standards and guidelines for use by the Board 
        in measuring the performance and efficiency of public housing 
        agencies and other owners and providers of federally assisted 
        housing in carrying out operational and financial functions. 
        The standards and guidelines shall be designed to replace the 
        public housing management assessment program under section 6(j) 
        of the United States Housing Act of 1937 (as in effect before 
        the enactment of this Act) and improve the evaluation of the 
        performance of housing providers relative to such program. In 
        establishing such standards and guidelines, the Board shall 
        consult with the Secretary, the Inspector General of the 
        Department of Housing and Urban Development, and such other 
        persons and entities as the Board considers appropriate.
            (2) Establishment of accreditation procedure and 
        accreditation.--The Board shall--
                    (A) establish a procedure for the Board to accredit 
                public housing agencies to receive block grants under 
                title II for the operation, maintenance, and production 
                of public housing and amounts for housing assistance 
                under title III, based on the performance of agencies, 
                as measured by the performance benchmarks established 
                under paragraph (1) and any audits and reviews of 
                agencies; and
                    (B) commence the review and accreditation of public 
                housing agencies under the procedures established under 
                subparagraph (A).
In carrying out the functions under this section, the Board shall take 
into consideration the findings and recommendations contained in the 
report issued under section 506(b).

SEC. 524. POWERS.

    (a) Hearings.--The Board may, for the purpose of carrying out this 
subtitle, hold such hearings and sit and act at such times and places 
as the Board determines appropriate.
    (b) Rules and Regulations.--The Board may adopt such rules and 
regulations as may be necessary to establish its procedures and to 
govern the manner of its operations, organization, and personnel.
    (c) Assistance From Federal Agencies.--
            (1) Information.--The Board may secure directly from any 
        department or agency of the Federal Government such information 
        as the Board may require for carrying out its functions, 
        including public housing agency plans submitted to the 
        Secretary by public housing agencies under title I. Upon 
        request of the Board, any such department or agency shall 
        furnish such information.
            (2) General services administration.--The Administrator of 
        General Services shall provide to the Board, on a reimbursable 
        basis, such administrative support services as the Board may 
        request.
            (3) Department of housing and urban development.--Upon the 
        request of the chairperson of the Board, the Secretary of 
        Housing and Urban Development shall, to the extent possible and 
        subject to the discretion of the Secretary, detail any of the 
        personnel of the Department of Housing and Urban Development, 
        on a nonreimbursable basis, to assist the Board in carrying out 
        its functions under this subtitle.
            (4) HUD inspector general.--The Inspector General of the 
        Department of Housing and Urban Development shall serve the 
        Board as a principal adviser with respect to all aspects of 
        audits of public housing agencies. The Inspector General may 
        advise the Board with respect to other activities and functions 
        of the Board.
    (d) Mails.--The Board may use the United States mails in the same 
manner and under the same conditions as other Federal agencies.
    (e) Contracting.--The Board may, to such extent and in such amounts 
as are provided in appropriation Acts, enter into contracts with 
private firms, institutions, and individuals for the purpose of 
conducting evaluations of public housing agencies, audits of public 
housing agencies, and research and surveys necessary to enable the 
Board to discharge its functions under this subtitle.
    (f) Staff.--
            (1) Executive director.--The Board shall appoint an 
        executive director of the Board, who shall be compensated at a 
        rate fixed by the Board, but which shall not exceed the rate 
        established for level V of the Executive Schedule under title 
        5, United States Code.
            (2) Other personnel.--In addition to the executive 
        director, the Board may appoint and fix the compensation of 
        such personnel as the Board considers necessary, in accordance 
        with the provisions of title 5, United States Code, governing 
        appointments to the competitive service, and the provisions of 
        chapter 51 and subchapter III of chapter 53 of such title, 
        relating to classification and General Schedule pay rates.
    (g) Access to Documents.--The Board shall have access for the 
purposes of carrying out its functions under this subtitle to any 
books, documents, papers, and records of a public housing agency to 
which the Secretary has access under this Act.

SEC. 525. FEES.

    (a) Accreditation Fees.--The Board may establish and charge 
reasonable fees for the accreditation of public housing agencies as the 
Board considers necessary to cover the costs of the operations of the 
Board relating to its functions under section 523.
    (b) Fund.--Any fees collected under this section shall be deposited 
in an operations fund for the Board, which is hereby established in the 
Treasury of the United States. Amounts in such fund shall be available, 
to the extent provided in appropriation Acts, for the expenses of the 
Board in carrying out its functions under this subtitle.

SEC. 526. GAO AUDIT.

    The activities and transactions of the Board shall be subject to 
audit by the Comptroller General of the United States under such rules 
and regulations as may be prescribed by the Comptroller General. The 
representatives of the General Accounting Office shall have access for 
the purpose of audit and examination to any books, documents, papers, 
and records of the Board that are necessary to facilitate an audit.

    Subtitle C--Interim Applicability of Public Housing Management 
                           Assessment Program

SEC. 531. INTERIM APPLICABILITY.

    This subtitle shall be effective only during the period that begins 
on the effective date of this Act and ends upon the date of the 
effectiveness of the standards and procedures required under section 
523.

SEC. 532. MANAGEMENT ASSESSMENT INDICATORS.

    (a) Establishment.--The Secretary shall develop and publish in the 
Federal Register indicators to assess the management performance of 
public housing agencies and other entities managing public housing 
(including resident management corporations, independent managers 
pursuant to section 236, and management entities pursuant to subtitle 
D). The indicators shall be established by rule under section 553 of 
title 5, United States Code. Such indicators shall enable the Secretary 
to evaluate the performance of public housing agencies and such other 
managers of public housing in all major areas of management operations.
    (b) Content.--The management assessment indicators shall include 
the following indicators:
            (1) The number and percentage of vacancies within an 
        agency's or manager's inventory, including the progress that an 
        agency or manager has made within the previous 3 years to 
        reduce such vacancies.
            (2) The amount and percentage of funds obligated to the 
        public housing agency or manager from the capital fund or under 
        section 14 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), which remain unexpended after 3 years.
            (3) The percentage of rents uncollected.
            (4) The energy consumption (with appropriate adjustments to 
        reflect different regions and unit sizes).
            (5) The average period of time that an agency or manager 
        requires to repair and turn-around vacant dwelling units.
            (6) The proportion of maintenance work orders outstanding, 
        including any progress that an agency or manager has made 
        during the preceding 3 years to reduce the period of time 
        required to complete maintenance work orders.
            (7) The percentage of dwelling units that an agency or 
        manager fails to inspect to ascertain maintenance or 
        modernization needs within such period of time as the Secretary 
        deems appropriate (with appropriate adjustments, if any, for 
        large and small agencies or managers).
            (8) The extent to which the rent policies of any public 
        housing agency establishing rental amounts in accordance with 
        section 225(b) comply with the requirement under section 
        225(c).
            (9) Whether the agency is providing acceptable basic 
        housing conditions, as determined by the Secretary.
            (10) Any other factors as the Secretary deems appropriate.
    (c) Considerations in Evaluation.--The Secretary shall--
            (1) administer the system of evaluating public housing 
        agencies and managers flexibly to ensure that agencies and 
        managers are not penalized as result of circumstances beyond 
        their control;
            (2) reflect in the weights assigned to the various 
        management assessment indicators the differences in the 
        difficulty of managing individual developments that result from 
        their physical condition and their neighborhood environment; 
        and
            (3) determine a public housing agency's or manager's status 
        as ``troubled with respect to modernization'' under section 
        533(b) based upon factors solely related to its ability to 
        carry out modernization activities.

SEC. 533. DESIGNATION OF PHA'S.

    (a) Troubled PHA's.--The Secretary shall, under the rulemaking 
procedures under section 553 of title 5, United States Code, establish 
procedures for designating troubled public housing agencies and 
managers, which procedures shall include identification of serious and 
substantial failure to perform as measured by (1) the performance 
indicators specified under section 532 and such other factors as the 
Secretary may deem to be appropriate; or (2) such other evaluation 
system as is determined by the Secretary to assess the condition of the 
public housing agency or other entity managing public housing, which 
system may be in addition to or in lieu of the performance indicators 
established under section 532. Such procedures shall provide that an 
agency that does not provide acceptable basic housing conditions shall 
be designated a troubled public housing agency.
    (b) Agencies Troubled With Respect to Capital Activities.--The 
Secretary shall designate, by rule under section 553 of title 5, United 
States Code, agencies and managers that are troubled with respect to 
capital activities.
    (c) Agencies at Risk of Becoming Troubled.--The Secretary shall 
designate, by rule under section 553 of title 5, United States Code, 
agencies and managers that are at risk of becoming troubled.
    (d) Exemplary Agencies.--The Secretary may also, in consultation 
with national organizations representing public housing agencies and 
managers and public officials (as the Secretary determines 
appropriate), identify and commend public housing agencies and managers 
that meet the performance standards established under section 532 in an 
exemplary manner.
    (e) Appeal of Designation.--The Secretary shall establish 
procedures for public housing agencies and managers to appeal 
designation as a troubled agency or manager (including designation as a 
troubled agency or manager for purposes of capital activities), to 
petition for removal of such designation, and to appeal any refusal to 
remove such designation.

SEC. 534. ON-SITE INSPECTION OF TROUBLED PHA'S.

    (a) In General.--Upon designating a public housing agency or 
manager as troubled pursuant to section 533 and determining that an 
assessment under this section will not duplicate any other review 
previously conducted or required to be conducted of the agency or 
manager, the Secretary shall provide for an on-site, independent 
assessment of the management of the agency or manager.
    (b) Content.--To the extent the Secretary deems appropriate (taking 
into consideration an agency's or manager's performance under the 
indicators specified under section 532, the assessment team shall also 
consider issues relating to the agency's or manager's resident 
population and physical inventory, including the extent to which--
            (1) the public housing agency plan for the agency or 
        manager adequately and appropriately addresses the 
        rehabilitation needs of the public housing inventory;
            (2) residents of the agency or manager are involved in and 
        informed of significant management decisions; and
            (3) any developments in the agency's or manager's inventory 
        are severely distressed (as such term is defined under section 
        262.
    (c) Independent Assessment Team.--An independent assessment under 
this section shall be carried out by a team of knowledgeable 
individuals selected by the Secretary (referred to in this title as the 
``assessment team'') with expertise in public housing and real estate 
management. In conducting an assessment, the assessment team shall 
consult with the residents and with public and private entities in the 
jurisdiction in which the public housing is located. The assessment 
team shall provide to the Secretary and the public housing agency or 
manager a written report, which shall contain, at a minimum, 
recommendations for such management improvements as are necessary to 
eliminate or substantially remedy existing deficiencies.

SEC. 535. ADMINISTRATION.

    (a) PHA's.--The Secretary shall carry out this subtitle with 
respect to public housing agencies substantially in the same manner as 
the public housing management assessment system under section 6(j) 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) was 
required to be carried out with respect to public housing agencies. The 
Secretary may comply with the requirements under this subtitle by using 
any regulations issued to carry out such system and issuing any 
additional regulations necessary to make such system comply with the 
requirements under this subtitle.
    (b) Other Managers.--The Secretary shall establish specific 
standards and procedures for carrying out this subtitle with respect to 
managers of public housing that are not public housing agencies. Such 
standards and procedures shall take in consideration special 
circumstances relating to entities hired, directed, or appointed to 
manage public housing.

   Subtitle D--Accountability and Oversight Standards and Procedures

SEC. 541. AUDITS.

    (a) By Secretary and Comptroller General.--Each block grant 
contract under section 201 and each contract for housing assistance 
amounts under section 302 shall provide that the Secretary, the 
Inspector General of the Department of Housing and Urban Development, 
and the Comptroller General of the United States, or any of their duly 
authorized representatives, shall, for the purpose of audit and 
examination, have access to any books, documents, papers, and records 
of the public housing agency (or other entity) entering into such 
contract that are pertinent to this Act and to its operations with 
respect to financial assistance under the this Act.
    (b) By PHA.--
            (1) Requirement.--Each public housing agency that owns or 
        operates 250 or more public housing dwelling units and receives 
        assistance under this Act shall have an audit made in 
        accordance with chapter 75 of title 31, United States Code. The 
        Secretary, the Inspector General of the Department of Housing 
        and Urban Development, and the Comptroller General of the 
United States shall have access to all books, documents, papers, or 
other records that are pertinent to the activities carried out under 
this Act in order to make audit examinations, excerpts, and 
transcripts.
            (2) Withholding of amounts.--The Secretary may, in the sole 
        discretion of the Secretary, arrange for, and pay the costs of, 
        an audit required under paragraph (1). In such circumstances, 
        the Secretary may withhold, from assistance otherwise payable 
        to the agency under this Act, amounts sufficient to pay for the 
        reasonable costs of conducting an acceptable audit, including, 
        when appropriate, the reasonable costs of accounting services 
        necessary to place the agency's books and records in auditable 
        condition.

SEC. 542. PERFORMANCE AGREEMENTS FOR AUTHORITIES AT RISK OF BECOMING 
              TROUBLED.

    (a) In General.--Upon designation of a public housing agency as at 
risk of becoming troubled under section 533(c), the Secretary shall 
seek to enter into an agreement with the agency providing for 
improvement of the elements of the agency that have been identified. An 
agreement under this section shall contain such terms and conditions as 
the Secretary determines are appropriate for addressing the elements 
identified, which may include an on-site, independent assessment of the 
management of the agency.
    (b) Powers of Secretary.--If the Secretary determines that such 
action is necessary to prevent the public housing agency from becoming 
a troubled agency, the Secretary may--
            (1) solicit competitive proposals from other public housing 
        agencies and private housing management agents (which may be 
        selected by existing tenants through administrative procedures 
        established by the Secretary), for any case in which such 
        agents may be needed for managing all, or part, of the housing 
        or functions administered by the agency; or
            (2) solicit competitive proposals from other public housing 
        agencies and private entities with experience in construction 
        management, for any case in which such authorities or firms may 
        be needed to oversee implementation of assistance made 
        available for capital improvement for public housing of the 
        agency.

SEC. 543. PERFORMANCE AGREEMENTS AND CDBG SANCTIONS FOR TROUBLED PHA'S.

    (a) In General.--Upon designation of a public housing agency as a 
troubled agency under section 533(a) and after reviewing the report 
submitted pursuant to section 534(c) and consulting with the assessment 
team for the agency under section 534, the Secretary shall seek to 
enter into an agreement with the agency providing for improving the 
management performance of the agency.
    (b) Contents.--An agreement under this section between the 
Secretary and a public housing agency shall set forth--
            (1) targets for improving performance, as measured by the 
        guidelines and standards established under section 532 and 
        other requirements within a specified period of time, which 
        shall include targets to be met upon the expiration of the 12-
        month period beginning upon entering into the agreement;
            (2) strategies for meeting such targets;
            (3) sanctions for failure to implement such strategies; and
            (4) to the extent the Secretary deems appropriate, a plan 
        for enhancing resident involvement in the management of the 
        public housing agency.
    (c) Local Assistance in Implementation.--The Secretary and the 
public housing agency shall, to the maximum extent practicable, seek 
the assistance of local public and private entities in carrying out an 
agreement under this section.
    (d) Default Under Performance Agreement.--Upon the expiration of 
the 12-month period beginning upon entering into an agreement under 
this section with a public housing agency, the Secretary shall review 
the performance of the agency in relation to the performance targets 
and strategies under the agreement. If the Secretary determines that 
the agency has failed to comply with the performance targets 
established for such period, the Secretary shall take the action 
authorized under subsection (b)(2) or (b)(5) of section 545.
    (e) CDBG Sanction Against Local Government Contributing to Troubled 
Status of PHA.--If the Secretary determines that the actions or 
inaction of any unit of general local government within which any 
portion of the jurisdiction of a public housing agency is located has 
substantially contributed to the conditions resulting in the agency 
being designated under section 533(a) as a troubled agency, the 
Secretary may redirect or withhold, from such unit of general local 
government any amounts allocated for such unit under section 106 of the 
Housing and Community Development Act of 1974.

SEC. 544. OPTION TO DEMAND CONVEYANCE OF TITLE TO OR POSSESSION OF 
              PUBLIC HOUSING.

    (a) Authority for Conveyance.--A contract under section 201 for 
block grants under title II (including contracts which amend or 
supersede contracts previously made (including contracts for 
contributions)) may provide that upon the occurrence of a substantial 
default with respect to the covenants or conditions to which the public 
housing agency is subject (as such substantial default shall be defined 
in such contract), the public housing agency shall be obligated, at the 
option of the Secretary, to--
            (1) convey title in any case where, in the determination of 
        the Secretary (which determination shall be final and 
        conclusive), such conveyance of title is necessary to achieve 
        the purposes of this Act; or
            (2) deliver to the Secretary possession of the development, 
        as then constituted, to which such contract relates.
    (b) Obligation to Reconvey.--Any block grant contract under title 
II containing the provisions authorized in subsection (a) shall also 
provide that the Secretary shall be obligated to reconvey or redeliver 
possession of the development, as constituted at the time of 
reconveyance or redelivery, to such public housing agency or to its 
successor (if such public housing agency or a successor exists) upon 
such terms as shall be prescribed in such contract, and as soon as 
practicable after--
            (1) the Secretary is satisfied that all defaults with 
        respect to the development have been cured, and that the 
development will, in order to fulfill the purposes of this Act, 
thereafter be operated in accordance with the terms of such contract; 
or
            (2) the termination of the obligation to make annual block 
        grants to the agency, unless there are any obligations or 
        covenants of the agency to the Secretary which are then in 
        default.
Any prior conveyances and reconveyances or deliveries and redeliveries 
of possession shall not exhaust the right to require a conveyance or 
delivery of possession of the development to the Secretary pursuant to 
subsection (a) upon the subsequent occurrence of a substantial default.
    (c) Continued Grants for Repayment of Bonds and Notes Under 1937 
Act.--If--
            (1) a contract for block grants under title II for an 
        agency includes provisions that expressly state that the 
        provisions are included pursuant to this subsection, and
            (2) the portion of the block grant payable for debt service 
        requirements pursuant to the contract has been pledged by the 
        public housing agency as security for the payment of the 
        principal and interest on any of its obligations, then--
                    (A) the Secretary shall (notwithstanding any other 
                provisions of this Act), continue to make the block 
                grant payments for the agency so long as any of such 
                obligations remain outstanding; and
                    (B) the Secretary may covenant in such a contract 
                that in any event such block grant amounts shall in 
                each year be at least equal to an amount which, 
                together with such income or other funds as are 
                actually available from the development for the purpose 
                at the time such block grant payments are made, will 
                suffice for the payment of all installments of 
                principal and interest on the obligations for which the 
                amounts provided for in the contract shall have been 
                pledged as security that fall due within the next 
                succeeding 12 months.
In no case shall such block grant amounts be in excess of the maximum 
sum specified in the contract involved, nor for longer than the 
remainder of the maximum period fixed by the contract.

SEC. 545. REMOVAL OF INEFFECTIVE PHA'S.

    (a) Conditions of Removal.--The actions specified in subsection (b) 
may be taken only upon--
            (1) the occurrence of events or conditions that constitute 
        a substantial default by a public housing agency with respect 
        to (A) the covenants or conditions to which the public housing 
        agency is subject, or (B) an agreement entered into under 
        section 543; or
            (2) submission to the Secretary of a petition by the 
        residents of the public housing owned or operated by a public 
        housing agency that is designated as troubled pursuant to 
        section 533(a).
    (b) Removal Actions.--Notwithstanding any other provision of law or 
of any block grant contract under title II or any grant agreement under 
title III, in accordance with subsection (a), the Secretary may--
            (1) solicit competitive proposals from other public housing 
        agencies and private housing management agents (which, in the 
        discretion of the Secretary, may be selected by existing public 
        housing residents through administrative procedures established 
        by the Secretary) and, if appropriate, provide for such agents 
        to manage all, or part, of the housing administered by the 
        public housing agency or all or part of the other functions of 
        the agency;
            (2) take possession of the public housing agency, including 
        any developments or functions of the agency under any section 
        of this Act;
            (3) solicit competitive proposals from other public housing 
        agencies and private entities with experience in construction 
        management and, if appropriate, provide for such authorities or 
        firms to oversee implementation of assistance made available 
        for capital improvements for public housing;
            (4) require the agency to make other arrangements 
        acceptable to the Secretary and in the best interests of the 
        public housing residents and assisted families under title III 
        for managing all, or part of, the public housing administered 
        by the agency or the functions of the agency; or
            (5) petition for the appointment of a receiver for the 
        public housing agency to any district court of the United 
        States or to any court of the State in which any portion of the 
        jurisdiction of the public housing agency is located, that is 
        authorized to appoint a receiver for the purposes and having 
        the powers prescribed in this section.
    (c) Emergency Assistance.--The Secretary may make available to 
receivers and other entities selected or appointed pursuant to this 
section such assistance as is fair and reasonable to remedy the 
substantial deterioration of living conditions in individual public 
housing developments or other related emergencies that endanger the 
health, safety and welfare of public housing residents or assisted 
families under title III.
    (d) Powers of Secretary.--If the Secretary takes possession of an 
agency, or any developments or functions of an agency, pursuant to 
subsection (b)(2), the Secretary--
            (1) may abrogate contracts that substantially impede 
        correction of the substantial default or improvement of the 
        classification, but only after efforts to renegotiate such 
        contracts have failed and the Secretary has made a written 
        determination regarding such abrogation, which shall be 
        available to the public upon request, identify such contracts, 
        and explain the determination that such contracts may be 
        abrogated;
            (2) may demolish and dispose of assets of the agency in 
        accordance with section 261;
            (3) where determined appropriate by the Secretary, may 
        require the establishment of one or more new public housing 
        agencies;
            (4) may consolidate the agency into other well-managed 
        public housing agencies with the consent of such well-managed 
        authorities;
            (5) shall not be subject to any State or local laws 
        relating to civil service requirements, employee rights, 
        procurement, or financial or administrative controls that, in 
        the determination of the Secretary, substantially impede 
        correction of the substantial default or improvement of the 
        classification, but only if the Secretary has made a written 
        determination regarding such inapplicability, which shall be 
        available to the public upon request, identify such 
        inapplicable laws, and explain the determination that such laws 
        impede such correction; and
            (6) shall have such additional authority as a district 
        court of the United States has the authority to confer under 
        like circumstances upon a receiver to achieve the purposes of 
        the receivership.
The Secretary may appoint, on a competitive or noncompetitive basis, an 
individual or entity as an administrative receiver to assume the 
Secretary's responsibility under this paragraph for the administration 
of a public housing agency. The Secretary may delegate to the 
administrative receiver any or all of the powers of the Secretary under 
this subsection. Regardless of any delegation under this subsection, an 
administrative receiver may not require the establishment of one or 
more new public housing agencies pursuant to paragraph (3) unless the 
Secretary first approves such establishment. For purposes of this 
subsection, the term ``public housing agency'' includes any 
developments or functions of a public housing agency under any section 
of this title.
    (e) Receivership.--
            (1) Required appointment.--In any proceeding under 
        subsection (b)(5), upon a determination that a substantial 
        default has occurred, and without regard to the availability of 
        alternative remedies, the court shall appoint a receiver to 
        conduct the affairs of the public housing agency in a manner 
        consistent with this Act and in accordance with such further 
        terms and conditions as the court may provide. The receiver 
        appointed may be another public housing agency, a private 
        management corporation, the Secretary, or any other appropriate 
        entity. The court shall have power to grant appropriate 
        temporary or preliminary relief pending final disposition of 
        the petition by the Secretary.
            (2) Powers of receiver.--If a receiver is appointed for a 
        public housing agency pursuant to subsection (b)(5), in 
        addition to the powers accorded by the court appointing the 
        receiver, the receiver--
                    (A) may abrogate contracts that substantially 
                impede correction of the substantial default or 
                improvement of the classification, but only after bona 
                fide efforts to renegotiate such contracts have failed 
                and the receiver has made a written determination 
                regarding such abrogation, which shall be available to 
                the public upon request, identify such contracts, and 
                explain the determination that such contracts may be 
                abrogated;
                    (B) may demolish and dispose of assets of the 
                agency in accordance with section 261;
                    (C) where determined appropriate by the Secretary, 
                may require the establishment of one or more new public 
                housing agencies, to the extent permitted by State and 
                local law; and
                    (D) except as provided in subparagraph (C), shall 
                not be subject to any State or local laws relating to 
                civil service requirements, employee rights, 
                procurement, or financial or administrative controls 
                that, in the determination of the receiver, 
                substantially impede correction of the substantial 
                default or improvement of the classification, but only 
                if the receiver has made a written determination 
                regarding such inapplicability, which shall be 
                available to the public upon request, identify such 
                inapplicable laws, and explain the determination that 
                such laws impede such correction.
        For purposes of this paragraph, the term ``public housing 
        agency'' includes any developments or functions of a public 
        housing agency under any section of this title.
            (3) Termination.--The appointment of a receiver pursuant to 
        this subsection may be terminated, upon the petition of any 
        party, when the court determines that all defaults have been 
        cured or the public housing agency will be able to make the 
        same amount of progress in correcting the management of the 
        housing as the receiver.
    (f) Liability.--If the Secretary takes possession of an agency 
pursuant to subsection (b)(2) or a receiver is appointed pursuant to 
subsection (b)(5) for a public housing agency, the Secretary or the 
receiver shall be deemed to be acting in the capacity of the public 
housing agency (and not in the official capacity as Secretary or other 
official) and any liability incurred shall be a liability of the public 
housing agency.
    (g) Effectiveness.--The provisions of this section shall apply with 
respect to actions taken before, on, or after the effective date of 
this Act and shall apply to any receivers appointed for a public 
housing agency before the effective date of this Act.

SEC. 546. MANDATORY TAKEOVER OF CHRONICALLY TROUBLED PHA'S.

    (a) Removal of Agency.--Notwithstanding any other provision of this 
Act, not later than the expiration of the 180-day period beginning on 
the effective date of this Act, the Secretary shall take one of the 
following actions with respect to each chronically troubled public 
housing agency:
            (1) Contracting for management.--Solicit competitive 
        proposals for the management of the agency pursuant to section 
        545(b)(1) and replace the management of the agency pursuant to 
        selection of such a proposal.
            (2) Takeover.--Take possession of the agency pursuant to 
        section 545(b)(2) of such Act.
            (3) Petition for receiver.--Petition for the appointment of 
        a receiver for the agency pursuant to section 545(b)(5).
    (b) Definition.--For purposes of this section, the term 
``chronically troubled public housing agency'' means a public housing 
agency that, as of the effective date of this Act, is designated under 
section 6(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) of this Act) as a troubled public housing agency and has been so 
designated continuously for the 3-year period ending upon the effective 
date of this Act; except that such term does not include any agency 
that owns or operates less than 1250 public housing dwelling units and 
that the Secretary determines can, with a reasonable amount of effort, 
make such improvements or remedies as may be necessary to remove its 
designation as troubled within 12 months.

SEC. 547. TREATMENT OF TROUBLED PHA'S.

    (a) Effect of Troubled Status on CHAS.--The comprehensive housing 
affordability strategy (or any consolidated plan incorporating such 
strategy) for the State or unit of general local government in which 
any troubled public housing agency is located shall not be considered 
to comply with the requirements under section 105 of the Cranston-
Gonzalez National Affordable Housing Act unless such plan includes a 
description of the manner in which the State or unit will assist such 
troubled agency in improving its operations to remove such designation.
    (b) Definition.--For purposes of this section, the term ``troubled 
public housing agency'' means a public housing agency that--
            (1) upon the effective date of this Act, is designated 
        under section 6(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) of this Act) as a troubled public 
        housing agency; and
            (2) is not a chronically troubled public housing agency, as 
        such term is defined in section 546(b) of this Act.

SEC. 548. MAINTENANCE OF RECORDS.

    Each public housing agency shall keep such records as may be 
reasonably necessary to disclose the amount and the disposition by the 
agency of the proceeds of assistance received pursuant to this Act and 
to ensure compliance with the requirements of this Act.

SEC. 549. ANNUAL REPORTS REGARDING TROUBLED PHA'S.

    The Secretary shall submit a report to the Congress annually, as a 
part of the report of the Secretary under section 8 of the Department 
of Housing and Urban Development Act, that--
            (1) identifies the public housing agencies that are 
        designated under section 533 as troubled or at-risk of becoming 
        troubled and the reasons for such designation; and
            (2) describes any actions that have been taken in 
        accordance with sections 542, 543, 544, and 545.

SEC. 550. APPLICABILITY TO RESIDENT MANAGEMENT CORPORATIONS.

    The Secretary shall apply the provisions of this subtitle to 
resident management corporations in the same manner as applied to 
public housing agencies.

SEC. 551. ADVISORY COUNCIL FOR HOUSING AUTHORITY OF NEW ORLEANS.

    (a) Establishment.--The Secretary and the Housing Authority of New 
Orleans (in this section referred to as the ``Housing Authority'') 
shall, pursuant to the cooperative endeavor agreement in effect between 
the Secretary and the Housing Authority, establish an advisory council 
for the Housing Authority of New Orleans (in this section referred to 
as the ``advisory council'') that complies with the requirements of 
this section.
    (b) Membership.--
            (1) In general.--The advisory council shall be appointed by 
        the Secretary, not later than 90 days after the date of the 
        enactment of this Act, and shall be composed of the following 
        members:
                    (A) The Inspector General of the Department of 
                Housing and Urban Development (or the Inspector 
                General's designee).
                    (B) Not more than 7 other members, who shall be 
                selected for appointment based on their experience in 
                successfully reforming troubled public housing agencies 
                or in providing affordable housing in coordination with 
                State and local governments, the private sector, 
                affordable housing residents, or local nonprofit 
                organizations.
            (2) Prohibition on additional pay.--Members of the advisory 
        council shall serve without compensation, but shall be 
        reimbursed for travel, subsistence, and other necessary 
        expenses incurred in the performance of their duties as members 
        of the Board using amounts from the Headquarters Reserve fund 
        pursuant to section 111(b)(4).
    (c) Functions.--The advisory council shall--
            (1) establish standards and guidelines for assessing the 
        performance of the Housing Authority in carrying out 
        operational, asset management, and financial functions for 
        purposes of the reports and finding under subsections (d) and 
        (e), respectively;
            (2) provide advice, expertise, and recommendations to the 
        Housing Authority regarding the management, operation, repair, 
        redevelopment, revitalization, demolition, and disposition of 
        public housing developments of the Housing Authority;
            (3) report to the Congress under subsection (d) regarding 
        any progress of the Housing Authority in improving the 
        performance of its functions; and
            (4) make a final finding to the Congress under subsection 
        (e) regarding the future of the Housing Authority.
    (d) Quarterly Reports.--The advisory council shall report to the 
Congress and the Secretary not less than every 3 months regarding the 
performance of the Housing Authority and any progress of the authority 
in improving its performance and carrying out its functions.
    (e) Final Finding.--Upon the expiration of the 18-month period that 
begins upon the appointment under subsection (b)(1) of all members of 
the advisory council, the council shall make and submit to the Congress 
and the Secretary a finding of whether the Housing Authority has 
substantially improved its performance, the performance of its 
functions, and the overall condition of the Authority such that the 
Authority should be allowed to continue to operate as the manager of 
the public housing of the Authority. In making the finding under this 
subsection, the advisory council shall consider whether the Housing 
Authority has made sufficient progress in the demolition and 
revitalization of the Desire Homes development, the revitalization of 
the St. Thomas Homes development, the appropriate allocation of 
operating subsidy amounts, and the appropriate expending of 
modernization amounts.
    (f) Receivership.--If the advisory council finds under subsection 
(e) that the Housing Authority has not substantially improved its 
performance such that the Authority should be allowed to continue to 
operate as the manager of the public housing of the Authority, the 
Secretary shall (notwithstanding section 545(a)) petition under section 
545(b) for the appointment of a receiver for the Housing Authority, 
which receivership shall be subject to the provisions of section 545.
    (g) Exemption.--The provisions of section 546 shall not apply to 
the Housing Authority.

                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.

    (a) Effective Date.--
            (1) In general.--This Act and the amendments made by this 
        Act shall take effect upon the expiration of the 6-month period 
        beginning on the date of the enactment of this Act, except as 
        otherwise provided in this section.
            (2) Exception.--If the Secretary determines that action 
        under this paragraph is necessary for program administration or 
        to avoid hardship, the Secretary may, by notice in accordance 
        with subsection (d), delay the effective date of any provision 
        of this Act until a date not later than October 1, 1998.
            (3) Specific effective dates.--Any provision of this Act 
        that specifically provides for the effective date of such 
        provision shall take effect in accordance with the terms of the 
        provision.
    (b) Repeal of United States Housing Act of 1937.--Effective upon 
the effective date under subsection (a)(1), the United States Housing 
Act of 1937 (42 U.S.C. 1437 et seq.) is repealed, subject to the 
conditions under subsection (c). Subsection (a)(2) shall not apply to 
this subsection.
    (c) Savings Provisions.--
            (1) Obligations under 1937 act.--Any obligation of the 
        Secretary made under authority of the United States Housing Act 
        of 1937 shall continue to be governed by the provisions of such 
        Act, except that--
                    (A) notwithstanding the repeal of such Act, the 
                Secretary may make a new obligation under such Act upon 
                finding that such obligation is required--
                            (i) to protect the financial interests of 
                        the United States or the Department of Housing 
                        and Urban Development; or
                            (ii) for the amendment, extension, or 
                        renewal of existing obligations; and
                    (B) notwithstanding the repeal of such Act, the 
                Secretary may, in accordance with subsection (d), issue 
                regulations and other guidance and directives as if 
                such Act were in effect if the Secretary finds that 
                such action is necessary to facilitate the 
                administration of obligations under such Act.
            (2) Transition of funding.--Amounts appropriated under the 
        United States Housing Act of 1937 shall, upon repeal of such 
        Act, remain available for obligation under such Act in 
        accordance with the terms under which amounts were made 
        available.
            (3) Cross references.--The provisions of the United States 
        Housing Act of 1937 shall remain in effect for purposes of the 
        validity of any reference to a provision of such Act in any 
        statute (other than such Act) until such reference is modified 
        by law or repealed.
    (d) Publication and Effective Date of Notices of Delay.--
            (1) Submission to congress.--The Secretary shall submit to 
        the Committee on Banking and Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate a copy of any proposed notice under 
        subsection (a)(2) or any proposed regulation, guidance, or 
        directive under subsection (c)(1)(B).
            (2) Opportunity to review.--Such a regulation, notice, 
        guidance, or directive may not be published for comment or for 
        final effectiveness before or during the 15-calendar day period 
        beginning on the day after the date on which such regulation, 
        notice, guidance, or directive was submitted to the Congress.
            (3) Effective date.--No regulation, notice, guideline, or 
        directive may become effective until after the expiration of 
        the 30-calendar day period beginning on the day after the day 
        on which such rule or regulation is published as final.
            (4) Waiver.--The provisions of paragraphs (2) and (3) may 
        be waived upon the written request of the Secretary, if agreed 
        to by the Chairmen and Ranking Minority Members of both 
        Committees.
    (e) Modifications.--Notwithstanding any provision of this Act or 
any annual contributions contract or other agreement entered into by 
the Secretary and a public housing agency pursuant to the provisions of 
the United States Housing Act of 1937 (as in effect before the 
effective date of the repeal under section 601(b) of this Act), the 
Secretary and the agency may by mutual consent amend, supersede, or 
modify any such agreement as appropriate to provide for assistance 
under this Act, except that the Secretary and the agency may not 
consent to any such amendment, supersession, or modification that 
substantially alters any outstanding obligations requiring continued 
maintenance of the low-income character of any public housing 
development and any such amendment, supersession, or modification shall 
not be given effect.
    (f) Section 8 Project-Based Assistance.--
            (1) In general.--The provisions of the United States 
        Housing Act of 1937 (42 U.S.C. 1437 et seq.) shall remain in 
        effect after the effectiveness of the repeal under subsection 
        (b) with respect to all section 8 project-based assistance, 
        pursuant to existing and future contracts, except as otherwise 
        provided by this section.
            (2) Tenant selection preferences.--An owner of housing 
        assisted with section 8 project-based assistance shall give 
        preference, in the selection of tenants for units of such 
        projects that become available, according to any system of 
        local preferences established pursuant to section 223 by the 
        public housing agency having jurisdiction for the area in which 
        such projects are located.
            (3) 1-year notification.--Paragraphs (9) and (10) of 
        section 8(c) of the United States Housing Act of 1937 (42 
        U.S.C. 1437f(c)) shall not be applicable to section 8 project-
        based assistance.
            (4) Lease terms.--Leases for dwelling units assisted with 
        section 8 project-based assistance shall comply with the 
        provisions of paragraphs (1) and (3) of section 324 of this Act 
        and shall not be subject to the provisions of 8(d)(1)(B) of the 
        United States Housing Act of 1937.
            (5) Termination of tenancy.--Any termination of tenancy of 
        a resident of a dwelling unit assisted with section 8 project-
        based assistance shall comply with the provisions of section 
        324(2) and section 325 of this Act and shall not be subject to 
        the provisions of section 8(d)(1)(B) of the United States 
        Housing Act of 1937.
            (6) Definition.--For purposes of this subsection, the term 
        ``section 8 project-based assistance'' means assistance under 
        any of the following programs:
                    (A) The new construction or substantial 
                rehabilitation program under section 8(b)(2) of the 
                United States Housing Act of 1937 (as in effect before 
                October 1, 1983).
                    (B) The property disposition program under section 
                8(b) 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).
                    (C) The loan management set-aside program under 
                subsections (b) and (v) of section 8 of such Act.
                    (D) The project-based certificate program under 
                section 8(d)(2) of such Act.
                    (E) The moderate rehabilitation program under 
                section 8(e)(2) of the United States Housing Act of 
                1937 (as in effect before October 1, 1991).
                    (F) The low-income housing preservation program 
                under Low-Income Housing Preservation and Resident 
                Homeownership Act of 1990 or the provisions of the 
                Emergency Low Income Housing Preservation Act of 1987 
                (as in effect before November 28, 1990).
                    (G) Section 8 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), following 
                conversion from assistance under section 101 of the 
                Housing and Urban Development Act of 1965 or section 
                236(f)(2) of the National Housing Act.
    (g) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 602. OTHER REPEALS.

    (a) In General.--The following provisions of law are hereby 
repealed:
            (1) Assisted housing allocation.--Section 213 of the 
        Housing and Community Development Act of 1974 (42 U.S.C. 1439).
            (2) Public housing rent waivers for police.--Section 519 of 
        the Cranston-Gonzalez National Affordable Housing Act (42 
        U.S.C. 1437a-1).
            (3) Treatment of certificate and voucher holders.--
        Subsection (c) of section 183 of the Housing and Community 
        Development Act of 1987 (42 U.S.C. 1437f note).
            (4) Excessive rent burden data.--Subsection (b) of section 
        550 of the Cranston-Gonzalez National Affordable Housing Act 
        (42 U.S.C. 1437f note).
            (5) Moving to opportunity for fair housing.--Section 152 of 
        the Housing and Community Development Act of 1992 (42 U.S.C. 
        1437f note).
            (6) Report regarding fair housing objectives.--Section 153 
        of the Housing and Community Development Act of 1992 (42 U.S.C. 
        1437f note).
            (7) Special projects for elderly or handicapped families.--
        Section 209 of the Housing and Community Development Act of 
        1974 (42 U.S.C. 1438).
            (8) Access to pha books.--Section 816 of the Housing Act of 
        1954 (42 U.S.C. 1435).
            (9) Miscellaneous provisions.--Subsections (b)(1) and (d) 
        of section 326 of the Housing and Community Development 
        Amendments of 1981 (Public Law 97-35, 95 Stat. 406; 42 U.S.C. 
        1437f note).
            (10) Payment for development managers.--Section 329A of the 
        Housing and Community Development Amendments of 1981 (42 U.S.C. 
        1437j-1).
            (11) Procurement of insurance by pha's.--In the item 
        relating to ``administrative provisions'' under the heading 
        ``Management and Administration'' in title II of the 
        Departments of Veterans Affairs and Housing and Urban 
        Development, and Independent Agencies Appropriations Act, 1991, 
        the penultimate undesignated paragraph of such item (Public Law 
        101-507; 104 Stat. 1369).
            (12) Public housing childhood development.--Section 222 of 
        the Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 
        1701z-6 note).
            (13) Indian housing childhood development.--Section 518 of 
        the Cranston-Gonzalez National Affordable Housing Act (12 
        U.S.C. 1701z-6 note).
            (14) Public housing comprehensive transition 
        demonstration.--Section 126 of the Housing and Community 
        Development Act of 1987 (42 U.S.C. 1437f note).
            (15) Public housing one-stop perinatal services 
        demonstration.--Section 521 of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 1437t note).
            (16) Public housing mincs demonstration.--Section 522 of 
        the Cranston-Gonzalez National Affordable Housing Act (42 
        U.S.C. 1437f note).
            (17) Public housing energy efficiency demonstration.--
        Section 523 of the Cranston-Gonzalez National Affordable 
        Housing Act (42 U.S.C. 1437g note).
            (18) Omaha homeownership demonstration.--Section 132 of the 
        Housing and Community Development Act of 1992 (Public Law 102-
        550; 106 Stat. 3712).
            (19) Public and assisted housing youth sports programs.--
        Section 520 of the Cranston-Gonzalez National Affordable 
        Housing Act (42 U.S.C. 11903a).
            (20) Frost-leland provisions.--Section 415 of the 
        Department of Housing and Urban Development--Independent 
        Agencies Appropriations Act, 1988 (Public Law 100-202; 101 
        Stat. 1329-213); except that, notwithstanding any other 
        provision of law, beginning on the date of enactment of this 
        Act, the public housing projects described in section 415 of 
        such appropriations Act (as such section existed immediately 
        before the date of enactment of this Act) shall be eligible for 
        demolition--
                    (A) under section 14 of the United States Housing 
                Act of 1937 (as such section existed upon the enactment 
                of this Act); and
                    (B) under section 9 of the United States Housing 
                Act of 1937.
            (21) Multifamily financing.--The penultimate sentence of 
        section 302(b)(2) of the National Housing Act (12 U.S.C. 
        1717(b)(2)) and the penultimate sentence of section 305(a)(2) 
        of the Emergency Home Finance Act of 1970 (12 U.S.C. 
        1454(a)(2)).
            (22) Conflicts of interest.--Subsection (c) of section 326 
        of the Housing and Community Development Amendments of 1981 (42 
        U.S.C. 1437f note).
            (23) Conversion of public housing.--Section 202 of the 
        Departments of Veterans Affairs and Housing and Urban 
        Development, and Independent Agencies Appropriations Act, 1996 
        (42 U.S.C. 1437l note) (enacted as section 101(e) of Omnibus 
        Consolidated Rescissions and Appropriations Act of 1996 (Public 
        Law 104-134; 110 Stat. 1321-279)).
    (b) Savings Provision.--Except to the extent otherwise provided in 
this Act--
            (1) the repeals made by subsection (a) shall not affect any 
        legally binding obligations entered into before the effective 
        date of this Act; and
            (2) any funds or activities subject to a provision of law 
        repealed by subsection (a) shall continue to be governed by the 
        provision as in effect immediately before such repeal.

  Subtitle B--Other Provisions Relating to Public Housing and Rental 
                          Assistance Programs

SEC. 621. ALLOCATION OF ELDERLY HOUSING AMOUNTS.

    Section 202(l) of the Housing Act of 1959 (12 U.S.C. 1701q(l)) is 
amended by adding at the end the following new paragraph:
            ``(4) Consideration in allocating assistance.--Assistance 
        under this section shall be allocated in a manner that ensures 
        that the awards of the assistance are made for projects of 
        sufficient size to accommodate facilities for supportive 
        services appropriate to the needs of frail elderly 
        residents.''.

SEC. 622. PET OWNERSHIP.

    Section 227 of the Housing and Urban-Rural Recovery Act of 1983 (12 
U.S.C. 1701r-1) is amended to read as follows:

``SEC. 227. PET OWNERSHIP IN FEDERALLY ASSISTED RENTAL HOUSING.

    ``(a) Right of Ownership.--A resident of a dwelling unit in 
federally assisted rental housing may own common household pets or have 
common household pets present in the dwelling unit of such resident, 
subject to the reasonable requirements of the owner of the federally 
assisted rental housing and providing that the resident maintains the 
animals responsibly and in compliance with applicable local and State 
public health, animal control, and anticruelty laws. Such reasonable 
requirements may include requiring payment of a nominal fee and pet 
deposit by residents owning or having pets present, to cover the 
operating costs to the project relating to the presence of pets and to 
establish an escrow account for additional such costs not otherwise 
covered, respectively. Notwithstanding section 225(d) of the Housing 
Opportunity and Responsibility Act of 1997, a public housing agency may 
not grant any exemption under such section from payment, in whole or in 
part, of any fee or deposit required pursuant to the preceding 
sentence.
    ``(b) Prohibition Against Discrimination.--No owner of federally 
assisted rental housing may restrict or discriminate against any person 
in connection with admission to, or continued occupancy of, such 
housing by reason of the ownership of common household pets by, or the 
presence of such pets in the dwelling unit of, such person.
    ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Federally assisted rental housing.--The term 
        `federally assisted rental housing' means any multifamily 
        rental housing project that is--
                    ``(A) public housing (as such term is defined in 
                section 103 of the Housing Opportunity and 
                Responsibility Act of 1997);
                    ``(B) assisted with project-based assistance 
                pursuant to section 601(f) of the Housing Opportunity 
                and Responsibility Act of 1997 or under section 8 of 
                the United States Housing Act of 1937 (as in effect 
                before the effective date of the repeal under section 
                601(b) of the Housing Opportunity and Responsibility 
                Act of 1997);
                    ``(C) assisted under section 202 of the Housing Act 
                of 1959 (as amended by section 801 of the Cranston-
                Gonzalez National Affordable Housing Act);
                    ``(D) assisted under section 202 of the Housing Act 
                of 1959 (as in effect before the enactment of the 
                Cranston-Gonzalez National Affordable Housing Act);
                    ``(E) assisted under title V of the Housing Act of 
                1949; or
                    ``(F) insured, assisted, or held by the Secretary 
                or a State or State agency under section 236 of the 
                National Housing Act.
            ``(2) Owner.--The term `owner' means, with respect to 
        federally assisted rental housing, the entity or private 
        person, including a cooperative or public housing agency, that 
        has the legal right to lease or sublease dwelling units in such 
        housing (including a manager of such housing having such 
        right).
    ``(d) Regulations.--This section shall take effect upon the date of 
the effectiveness of regulations issued by the Secretary to carry out 
this section. Such regulations shall be issued not later than the 
expiration of the 1-year period beginning on the date of the enactment 
of the Housing Opportunity and Responsibility Act of 1997 and after 
notice and opportunity for public comment in accordance with the 
procedure under section 553 of title 5, United States Code, applicable 
to substantive rules (notwithstanding subsections (a)(2), (b)(B), and 
(d)(3) of such section).''.

SEC. 623. REVIEW OF DRUG ELIMINATION PROGRAM CONTRACTS.

    (a) Requirement.--The Secretary of Housing and Urban Development 
shall investigate all security contracts awarded by grantees under the 
Public and Assisted Housing Drug Elimination Act of 1990 (42 U.S.C. 
11901 et seq.) that are public housing agencies that own or operate 
more than 4,500 public housing dwelling units--
            (1) to determine whether the contractors under such 
        contracts have complied with all laws and regulations regarding 
        prohibition of discrimination in hiring practices;
            (2) to determine whether such contracts were awarded in 
        accordance with the applicable laws and regulations regarding 
        the award of such contracts;
            (3) to determine how many such contracts were awarded under 
        emergency contracting procedures;
            (4) to evaluate the effectiveness of the contracts; and
            (5) to provide a full accounting of all expenses under the 
        contracts.
    (b) Report.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary shall complete the investigation 
required under subsection (a) and submit a report to the Congress 
regarding the findings under the investigation. With respect to each 
such contract, the report shall (1) state whether the contract was made 
and is operating, or was not made or is not operating, in full 
compliance with applicable laws and regulations, and (2) for each 
contract that the Secretary determines is in such compliance issue a 
personal certification of such compliance by the Secretary of Housing 
and Urban Development.
    (c) Actions.--For each contract that is described in the report 
under subsection (b) as not made or not operating in full compliance 
with applicable laws and regulations, the Secretary of Housing and 
Urban Development shall promptly take any actions available under law 
or regulation that are necessary--
            (1) to bring such contract into compliance; or
            (2) to terminate the contract.
    (d) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 624. AMENDMENTS TO PUBLIC AND ASSISTED HOUSING DRUG ELIMINATION 
              ACT OF 1990.

    (a) Short Title, Purposes, and Authority to Make Grants.--Chapter 2 
of subtitle C of title V of the Anti-Drug Abuse Act of 1988 (42 U.S.C. 
11901 et seq.) is amended by striking the chapter heading and all that 
follows through section 5123 and inserting the following:

           ``CHAPTER 2--COMMUNITY PARTNERSHIPS AGAINST CRIME

``SEC. 5121. SHORT TITLE.

    ``This chapter may be cited as the `Community Partnerships Against 
Crime Act of 1997'.

``SEC. 5122. PURPOSES.

    ``The purposes of this chapter are to--
            ``(1) improve the quality of life for the vast majority of 
        law-abiding public housing residents by reducing the levels of 
        fear, violence, and crime in their communities;
            ``(2) broaden the scope of the Public and Assisted Housing 
        Drug Elimination Act of 1990 to apply to all types of crime, 
        and not simply crime that is drug-related; and
            ``(3) reduce crime and disorder in and around public 
        housing through the expansion of community-oriented policing 
        activities and problem solving.

``SEC. 5123. AUTHORITY TO MAKE GRANTS.

    ``The Secretary of Housing and Urban Development may make grants in 
accordance with the provisions of this chapter for use in eliminating 
crime in and around public housing and other federally assisted low-
income housing projects to (1) public housing agencies, and (2) 
private, for-profit and nonprofit owners of federally assisted low-
income housing.''.
    (b) Eligible Activities.--
            (1) In general.--Section 5124(a) of the Anti-Drug Abuse Act 
        of 1988 (42 U.S.C. 11903(a)) is amended--
                    (A) in the matter preceding paragraph (1), by 
                inserting ``and around'' after ``used in'';
                    (B) in paragraph (3), by inserting before the 
                semicolon the following: ``, including fencing, 
                lighting, locking, and surveillance systems'';
                    (C) in paragraph (4), by striking subparagraph (A) 
                and inserting the following new subparagraph:
                    ``(A) to investigate crime; and'';
                    (D) in paragraph (6)--
                            (i) by striking ``in and around public or 
                        other federally assisted low-income housing 
                        projects''; and
                            (ii) by striking ``and'' after the 
                        semicolon; and
                    (E) by striking paragraph (7) and inserting the 
                following new paragraphs:
            ``(7) providing funding to nonprofit public housing 
        resident management corporations and resident councils to 
        develop security and crime prevention programs involving site 
        residents;
            ``(8) the employment or utilization of one or more 
        individuals, including law enforcement officers, made available 
        by contract or other cooperative arrangement with State or 
        local law enforcement agencies, to engage in community- and 
        problem-oriented policing involving interaction with members of 
        the community in proactive crime control and prevention 
        activities;
            ``(9) programs and activities for or involving youth, 
        including training, education, recreation and sports, career 
        planning, and entrepreneurship and employment activities and 
        after school and cultural programs; and
            ``(10) service programs for residents that address the 
        contributing factors of crime, including programs for job 
        training, education, drug and alcohol treatment, and other 
        appropriate social services.''.
            (2) Other pha-owned housing.--Section 5124(b) of the Anti-
        Drug Abuse Act of 1988 (42 U.S.C. 11903(b)) is amended--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``drug-related crime in'' 
                        and inserting ``crime in and around''; and
                            (ii) by striking ``paragraphs (1) through 
                        (7)'' and inserting ``paragraphs (1) through 
                        (10)''; and
                    (B) in paragraph (2), by striking ``drug-related'' 
                and inserting ``criminal''.
    (c) Grant Procedures.--Section 5125 of the Anti-Drug Abuse Act of 
1988 (42 U.S.C. 11904) is amended to read as follows:

``SEC. 5125. GRANT PROCEDURES.

    ``(a) PHA's With 250 or More Units.--
            ``(1) Grants.--In each fiscal year, the Secretary shall 
        make a grant under this chapter from any amounts available 
        under section 5131(b)(1) for the fiscal year to each of the 
        following public housing agencies:
                    ``(A) New applicants.--Each public housing agency 
                that owns or operates 250 or more public housing 
                dwelling units and has--
                            ``(i) submitted an application to the 
                        Secretary for a grant for such fiscal year, 
                        which includes a 5-year crime deterrence and 
                        reduction plan under paragraph (2); and
                            ``(ii) had such application and plan 
                        approved by the Secretary.
                    ``(B) Renewals.--Each public housing agency that 
                owns or operates 250 or more public housing dwelling 
                units and for which--
                            ``(i) a grant was made under this chapter 
                        for the preceding Federal fiscal year;
                            ``(ii) the term of the 5-year crime 
                        deterrence and reduction plan applicable to 
                        such grant includes the fiscal year for which 
                        the grant under this subsection is to be made; 
                        and
                            ``(iii) the Secretary has determined, 
                        pursuant to a performance review under 
                        paragraph (4), that during the preceding fiscal 
                        year the agency has substantially fulfilled the 
                        requirements under subparagraphs (A) and (B) of 
                        paragraph (4).
        Notwithstanding subparagraphs (A) and (B), the Secretary may 
        make a grant under this chapter to a public housing agency that 
        owns or operates 250 or more public housing dwelling units only 
        if the agency includes in the application for the grant 
        information that demonstrates, to the satisfaction of the 
        Secretary, that the agency has a need for the grant amounts 
        based on generally recognized crime statistics showing that (I) 
        the crime rate for the public housing developments of the 
        agency (or the immediate neighborhoods in which such 
        developments are located) is higher than the crime rate for the 
        jurisdiction in which the agency operates, (II) the crime rate 
        for the developments (or such neighborhoods) is increasing over 
        a period of sufficient duration to indicate a general trend, or 
        (III) the operation of the program under this chapter 
        substantially contributes to the reduction of crime.
            ``(2) 5-year crime deterrence and reduction plan.--Each 
        application for a grant under this subsection shall contain a 
        5-year crime deterrence and reduction plan. The plan shall be 
        developed with the participation of residents and appropriate 
        law enforcement officials. The plan shall describe, for the 
        public housing agency submitting the plan--
                    ``(A) the nature of the crime problem in public 
                housing owned or operated by the public housing agency;
                    ``(B) the building or buildings of the public 
                housing agency affected by the crime problem;
                    ``(C) the impact of the crime problem on residents 
                of such building or buildings; and
                    ``(D) the actions to be taken during the term of 
                the plan to reduce and deter such crime, which shall 
                include actions involving residents, law enforcement, 
                and service providers.
        The term of a plan shall be the period consisting of 5 
        consecutive fiscal years, which begins with the first fiscal 
        year for which funding under this chapter is provided to carry 
        out the plan.
            ``(3) Amount.--In any fiscal year, the amount of the grant 
        for a public housing agency receiving a grant pursuant to 
        paragraph (1) shall be the amount that bears the same ratio to 
        the total amount made available under section 5131(b)(1) as the 
        total number of public dwelling units owned or operated by such 
        agency bears to the total number of dwelling units owned or 
        operated by all public housing agencies that own or operate 250 
        or more public housing dwelling units that are approved for 
        such fiscal year.
            ``(4) Performance review.--For each fiscal year, the 
        Secretary shall conduct a performance review of the activities 
        carried out by each public housing agency receiving a grant 
        pursuant to this subsection to determine whether the agency--
                    ``(A) has carried out such activities in a timely 
                manner and in accordance with its 5-year crime 
                deterrence and reduction plan; and
                    ``(B) has a continuing capacity to carry out such 
                plan in a timely manner.
            ``(5) Submission of applications.--The Secretary shall 
        establish such deadlines and requirements for submission of 
        applications under this subsection.
            ``(6) Review and determination.--The Secretary shall review 
        each application submitted under this subsection upon 
        submission and shall approve the application unless the 
        application and the 5-year crime deterrence and reduction plan 
        are inconsistent with the purposes of this chapter or any 
        requirements established by the Secretary or the information in 
        the application or plan is not substantially complete. Upon 
        approving or determining not to approve an application and plan 
        submitted under this subsection, the Secretary shall notify the 
        public housing agency submitting the application and plan of 
        such approval or disapproval.
            ``(7) Disapproval of applications.--If the Secretary 
        notifies an agency that the application and plan of the agency 
        is not approved, not later than the expiration of the 15-day 
        period beginning upon such notice of disapproval, the Secretary 
        shall also notify the agency, in writing, of the reasons for 
        the disapproval, the actions that the agency could take to 
        comply with the criteria for approval, and the deadlines for 
        such actions.
            ``(8) Failure to approve or disapprove.--If the Secretary 
        fails to notify an agency of approval or disapproval of an 
        application and plan submitted under this subsection before the 
        expiration of the 60-day period beginning upon the submission 
        of the plan or fails to provide notice under paragraph (7) 
        within the 15-day period under such paragraph to an agency 
        whose application has been disapproved, the application and 
        plan shall be considered to have been approved for purposes of 
        this section.
    ``(b) PHA's With Fewer Than 250 Units and Owners of Federally 
Assisted Low-Income Housing.--
            ``(1) Applications and plans.--To be eligible to receive a 
        grant under this chapter, a public housing agency that owns or 
        operates fewer than 250 public housing dwelling units or an 
        owner of federally assisted low-income housing shall submit an 
        application to the Secretary at such time, in such manner, and 
        accompanied by such additional information as the Secretary may 
        require. The application shall include a plan for addressing 
        the problem of crime in and around the housing for which the 
        application is submitted, describing in detail activities to be 
        conducted during the fiscal year for which the grant is 
        requested.
            ``(2) Grants for pha's with fewer than 250 units.--In each 
        fiscal year the Secretary may, to the extent amounts are 
        available under section 5131(b)(2), make grants under this 
        chapter to public housing agencies that own or operate fewer 
        than 250 public housing dwelling units and have submitted 
        applications under paragraph (1) that the Secretary has 
        approved pursuant to the criteria under paragraph (4).
            ``(3) Grants for federally assisted low-income housing.--In 
        each fiscal year the Secretary may, to the extent amounts are 
        available under section 5131(b)(3), make grants under this 
        chapter to owners of federally assisted low-income housing that 
        have submitted applications under paragraph (1) that the 
        Secretary has approved pursuant to the criteria under 
        paragraphs (4) and (5).
            ``(4) Criteria for approval of applications.--The Secretary 
        shall determine whether to approve each application under this 
        subsection on the basis of--
                    ``(A) the extent of the crime problem in and around 
                the housing for which the application is made;
                    ``(B) the quality of the plan to address the crime 
                problem in the housing for which the application is 
                made;
                    ``(C) the capability of the applicant to carry out 
                the plan; and
                    ``(D) the extent to which the tenants of the 
                housing, the local government, local community-based 
                nonprofit organizations, local tenant organizations 
                representing residents of neighboring projects that are 
                owned or assisted by the Secretary, and the local 
                community support and participate in the design and 
                implementation of the activities proposed to be funded 
                under the application.
        In each fiscal year, the Secretary may give preference to 
        applications under this subsection for housing made by 
        applicants who received a grant for such housing for the 
        preceding fiscal year under this subsection or under the 
        provisions of this chapter as in effect immediately before the 
        date of the enactment of the Housing Opportunity and 
        Responsibility Act of 1997.
            ``(5) Additional criteria for federally assisted low-income 
        housing.--In addition to the selection criteria under paragraph 
        (4), the Secretary may establish other criteria for evaluating 
        applications submitted by owners of federally assisted low-
        income housing, except that such additional criteria shall be 
        designed only to reflect--
                    ``(A) relevant differences between the financial 
                resources and other characteristics of public housing 
                agencies and owners of federally assisted low-income 
                housing; or
                    ``(B) relevant differences between the problem of 
                crime in public housing administered by such 
                authorities and the problem of crime in federally 
                assisted low-income housing.''.
    (d) Definitions.--Section 5126 of the Anti-Drug Abuse Act of 1988 
(42 U.S.C. 11905) is amended--
            (1) by striking paragraphs (1) and (2);
            (2) in paragraph (4)(A), by striking ``section'' before 
        ``221(d)(4)'';
            (3) by redesignating paragraphs (3) and (4) (as so amended) 
        as paragraphs (1) and (2), respectively; and
            (4) by adding at the end the following new paragraph:
            ``(3) Public housing agency.--The term `public housing 
        agency' has the meaning given the term in section 103 of the 
        Housing Opportunity and Responsibility Act of 1997.''.
    (e) Implementation.--Section 5127 of the Anti-Drug Abuse Act of 
1988 (42 U.S.C. 11906) is amended by striking ``Cranston-Gonzalez 
National Affordable Housing Act'' and inserting ``Housing Opportunity 
and Responsibility Act of 1997''.
    (f) Reports.--Section 5128 of the Anti-Drug Abuse Act of 1988 (42 
U.S.C. 11907) is amended--
            (1) by striking ``drug-related crime in'' and inserting 
        ``crime in and around''; and
            (2) by striking ``described in section 5125(a)'' and 
        inserting ``for the grantee submitted under subsection (a) or 
        (b) of section 5125, as applicable''.
    (g) Funding and Program Sunset.--Chapter 2 of subtitle C of title V 
of the Anti-Drug Abuse Act of 1988 is amended by striking section 5130 
(42 U.S.C. 11909) and inserting the following new section:

``SEC. 5130. FUNDING.

    ``(a) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this chapter $290,000,000 for each of fiscal 
years 1998, 1999, 2000, 2001, and 2002.
    ``(b) Allocation.--Of any amounts available, or that the Secretary 
is authorized to use, to carry out this chapter in any fiscal year--
            ``(1) 85 percent shall be available only for assistance 
        pursuant to section 5125(a) to public housing agencies that own 
        or operate 250 or more public housing dwelling units;
            ``(2) 10 percent shall be available only for assistance 
        pursuant to section 5125(b)(2) to public housing agencies that 
        own or operate fewer than 250 public housing dwelling units; 
        and
            ``(3) 5 percent shall be available only for assistance to 
        federally assisted low-income housing pursuant to section 
        5125(b)(3).
    ``(c) Retention of Proceeds of Asset Forfeitures by Inspector 
General.--Notwithstanding section 3302 of title 31, United States Code, 
or any other provision of law affecting the crediting of collections, 
the proceeds of forfeiture proceedings and funds transferred to the 
Office of Inspector General of the Department of Housing and Urban 
Development, as a participating agency, from the Department of Justice 
Assets Forfeiture Fund or the Department of the Treasury Forfeiture 
Fund, as an equitable share from the forfeiture of property in 
investigations in which the Office of Inspector General participates, 
shall be deposited to the credit of the Office of Inspector General for 
Operation Safe Home activities authorized under the Inspector General 
Act of 1978, as amended, to remain available until expended.''.
    (h) Conforming Amendments.--The table of contents in section 5001 
of the Anti-Drug Abuse Act of 1988 (Public Law 100-690; 102 Stat. 4295) 
is amended--
            (1) by striking the item relating to the heading for 
        chapter 2 of subtitle C of title V and inserting the following:

          ``Chapter 2--Community Partnerships Against Crime'';

            (2) by striking the item relating to section 5122 and 
        inserting the following new item:

``Sec. 5122. Purposes.'';
            (3) by striking the item relating to section 5125 and 
        inserting the following new item:

``Sec. 5125. Grant procedures.'';
        and
            (4) by striking the item relating to section 5130 and 
        inserting the following new item:

``Sec. 5130. Funding.''.
    (i) Treatment of NOFA.--The cap limiting assistance under the 
Notice of Funding Availability issued by the Department of Housing and 
Urban Development in the Federal Register of April 8, 1996, shall not 
apply to a public housing agency within an area designated as a high 
intensity drug trafficking area under section 1005(c) of the Anti-Drug 
Abuse Act of 1988 (21 U.S.C. 1504(c)).
    (j) Effective Date.--This section and the amendments made by this 
section shall take effect on the date of the enactment of this Act.

  Subtitle C--Limitations Relating to Occupancy in Federally Assisted 
                                Housing

SEC. 641. SCREENING OF APPLICANTS.

    (a) Ineligibility Because of Eviction.--Any household or member of 
a household evicted from federally assisted housing (as such term is 
defined in section 645) shall not be eligible for federally assisted 
housing--
            (1) in the case of eviction by reason of drug-related 
        criminal activity, for a period of not less than 3 years that 
        begins on the date of such eviction, unless the evicted member 
        of the household successfully completes a rehabilitation 
        program; and
            (2) in the case of an eviction for other serious violations 
        of the terms or conditions of the lease, for a reasonable 
        period of time, as determined by the public housing agency or 
        owner of the federally assisted housing, as applicable.
The requirements of paragraphs (1) and (2) may be waived if the 
circumstances leading to eviction no longer exist.
    (b) Ineligibility of Illegal Drug Users and Alcohol Users.--
            (1) In general.--Notwithstanding any other provision of 
        law, a public housing agency or an owner of federally assisted 
        housing, or both, as determined by the Secretary, shall 
        establish standards that prohibit admission to the program or 
        admission to federally assisted housing for any household with 
        a member--
                    (A) who the public housing agency or owner 
                determines is engaging in the illegal use of a 
                controlled substance; or
                    (B) with respect to whom the public housing agency 
                or owner determines that it has reasonable cause to 
                believe that such household member's illegal use (or 
                pattern of illegal use) of a controlled substance, or 
                abuse (or pattern of abuse) of alcohol, would interfere 
                with the health, safety, or right to peaceful enjoyment 
                of the premises by other residents.
            (2) Consideration of rehabilitation.--In determining 
        whether, pursuant to paragraph (1)(B), to deny admission to the 
        program or to federally assisted housing to any household based 
        on a pattern of illegal use of a controlled substance or a 
        pattern of abuse of alcohol by a household member, a public 
        housing agency or an owner may consider whether such household 
        member--
                    (A) has successfully completed an accredited drug 
                or alcohol rehabilitation program (as applicable) and 
                is no longer engaging in the illegal use of a 
                controlled substance or abuse of alcohol (as 
                applicable);
                    (B) has otherwise been rehabilitated successfully 
                and is no longer engaging in the illegal use of a 
                controlled substance or abuse of alcohol (as 
                applicable); or
                    (C) is participating in an accredited drug or 
                alcohol rehabilitation program (as applicable) and is 
                no longer engaging in the illegal use of a controlled 
                substance or abuse of alcohol (as applicable).
    (c) Authority To Deny Admission to Criminal Offenders.--Except as 
provided in subsections (a) and (b) and in addition to any other 
authority to screen applicants, in selecting among applicants for 
admission to the program or to federally assisted housing, if the 
public housing agency or owner of such housing (as applicable) 
determines that an applicant or any member of the applicant's household 
is or was, during a reasonable time preceding the date when the 
applicant household would otherwise be selected for admission, engaged 
in any criminal activity (including drug-related criminal activity), 
the public housing agency or owner may--
            (1) deny such applicant admission to the program or to 
        federally assisted housing;
            (2) consider the applicant (for purposes of any waiting 
        list) as not having applied for the program or such housing; 
        and
            (3) after the expiration of the reasonable period beginning 
        upon such activity, require the applicant, as a condition of 
        admission to the program or to federally assisted housing, to 
        submit to the public housing agency or owner evidence 
        sufficient (as the Secretary shall by regulation provide) to 
        ensure that the individual or individuals in the applicant's 
        household who engaged in criminal activity for which denial was 
        made under paragraph (1) have not engaged in any criminal 
        activity during such reasonable period.
    (d) Authority To Require Access to Criminal Records.--A public 
housing agency and an owner of federally assisted housing may require, 
as a condition of providing admission to the program or admission to or 
occupancy in federally assisted housing, that each adult member of the 
household provide a signed, written authorization for the public 
housing agency to obtain the records described in section 644(a) 
regarding such member of the household from the National Crime 
Information Center, police departments, other law enforcement agencies, 
and State registration agencies referred to in such section. In the 
case of an owner of federally assisted housing that is not a public 
housing agency, the owner shall request the public housing agency 
having jurisdiction over the area within which the housing is located 
to obtain the records pursuant to section 644.
    (e) Admission Based on Disability.--
            (1) In general.--Notwithstanding any other provision of 
        law, for purposes of determining eligibility for admission to 
        federally assisted housing, a person shall not be considered to 
        have a disability or a handicap solely because of the prior or 
        current illegal use of a controlled substance (as defined in 
        section 102 of the Controlled Substances Act) or solely by 
        reason of the prior or current use of alcohol.
            (2) Continued occupancy.--This subsection may not be 
        construed to prohibit the continued occupancy of any person who 
        is a resident in assisted housing on the effective date of this 
        Act.

SEC. 642. TERMINATION OF TENANCY AND ASSISTANCE FOR ILLEGAL DRUG USERS 
              AND ALCOHOL ABUSERS.

    Notwithstanding any other provision of law, a public housing agency 
or an owner of federally assisted housing (as applicable), shall 
establish standards or lease provisions for continued assistance or 
occupancy in federally assisted housing that allow the agency or owner 
(as applicable) to terminate the tenancy or assistance for any 
household with a member--
            (1) who the public housing agency or owner determines is 
        engaging in the illegal use of a controlled substance; or
            (2) whose illegal use of a controlled substance, or whose 
        abuse of alcohol, is determined by the public housing agency or 
        owner to interfere with the health, safety, or right to 
        peaceful enjoyment of the premises by other residents.

SEC. 643. LEASE REQUIREMENTS.

    In addition to any other applicable lease requirements, each lease 
for a dwelling unit in federally assisted housing shall provide that--
            (1) the owner may not terminate the tenancy except for 
        violation of the terms or conditions of the lease, violation of 
        applicable Federal, State, or local law, or for other good 
        cause; and
            (2) grounds for termination of tenancy shall include any 
        criminal or other activity, engaged in by the tenant, any 
        member of the tenant's household, any guest, or any other 
        person under the control of the household, that--
                    (A) threatens the health or safety of, or right to 
                peaceful enjoyment of the premises by, other tenant or 
                employees of the owner or other manager of the housing;
                    (B) threatens the health or safety of, or right to 
                peaceful enjoyment of their premises by, persons 
                residing in the immediate vicinity of the premises.

SEC. 644. AVAILABILITY OF CRIMINAL RECORDS FOR TENANT SCREENING AND 
              EVICTION.

    (a) In General.--
            (1) Criminal conviction information.--Notwithstanding any 
        other provision of law other than paragraphs (3) and (4), upon 
        the request of a public housing agency, the National Crime 
        Information Center, a police department, and any other law 
        enforcement agency shall provide to the public housing agency 
        information regarding the criminal conviction records of an 
        adult applicant for, or tenants of, federally assisted housing 
        for purposes of applicant screening, lease enforcement, and 
        eviction, but only if the public housing agency requests such 
        information and presents to such Center, department, or agency 
        a written authorization, signed by such applicant, for the 
        release of such information to the public housing agency or 
        other owner of the federally assisted housing.
            (2) Information regarding crimes against children.--
        Notwithstanding any other provision of law other than 
        paragraphs (3) and (4), upon the request of a public housing 
        agency, a State law enforcement agency designated as a 
        registration agency under a State registration program under 
        subtitle A of title XVII of the Violent Crime Control and Law 
        Enforcement Act of 1994 (42 U.S.C. 14071) and any local law 
        enforcement agency authorized by the State agency shall provide 
        to a public housing agency the information collected under such 
        State registration program regarding an adult applicant for, or 
        tenant of, federally assisted housing for purposes of applicant 
        screening, lease enforcement, and eviction, but only if the 
        public housing agency requests such information and presents to 
        such State registration agency or other local law enforcement 
        agency a written authorization, signed by such applicant, for 
        the release of such information to the public housing agency or 
        other owner of the federally assisted housing.
            (3) Delayed effective date for owners other than pha's.--
        The provisions of paragraphs (1) and (2) authorizing obtaining 
        information for owners of federally assisted housing other than 
        public housing agencies shall not take effect before--
                    (A) the expiration of the 1-year period beginning 
                on the date of enactment of this Act; and
                    (B) the Secretary and the Attorney General of the 
                United States have determined that access to such 
                information is feasible for such owners and have 
                provided for the terms of release of such information 
                to owners.
            (4) Exception.--The information provided under paragraphs 
        (1), (2), and (3) shall include information regarding any 
        criminal conviction of a juvenile only to the extent that the 
        release of such information is authorized under the law of the 
        applicable State, tribe, or locality.
    (b) Confidentiality.--A public housing agency or owner receiving 
information under this section may use such information only for the 
purposes provided in this section and such information may not be 
disclosed to any person who is not an officer, employee, or authorized 
representative of the agency or owner and who has a job-related need to 
have access to the information in connection with admission of 
applicants, eviction of tenants, or termination of assistance. For 
judicial eviction proceedings, disclosures may be made to the extent 
necessary. The Secretary shall, by regulation, establish procedures 
necessary to ensure that information provided under this section to a 
public housing agency or owner is used, and confidentiality of such 
information is maintained, as required under this section.
    (c) Opportunity to Dispute.--Before an adverse action is taken with 
regard to assistance under for federally assisted housing on the basis 
of a criminal record, the public housing agency or owner shall provide 
the tenant or applicant with a copy of the criminal record and an 
opportunity to dispute the accuracy and relevance of that record.
    (d) Fee.--A public housing agency may be charged a reasonable fee 
for information provided under subsection (a). A public housing agency 
may require an owner of federally assisted housing (that is not a 
public housing agency) to pay such fee for any information that the 
agency acquires for the owner pursuant to section 641(d) and subsection 
(a) of this section.
    (e) Records Management.--Each public housing agency and owner of 
federally assisted housing that receives criminal record information 
pursuant to this section shall establish and implement a system of 
records management that ensures that any criminal record received by 
the agency or owner is--
            (1) maintained confidentially;
            (2) not misused or improperly disseminated; and
            (3) destroyed in a timely fashion, once the purpose for 
        which the record was requested has been accomplished.
    (f) Penalty.--Any person who knowingly and willfully requests or 
obtains any information concerning an applicant for, or tenant of, 
federally assisted housing pursuant to the authority under this section 
under false pretenses, or any person who knowingly and willfully 
discloses any such information in any manner to any individual not 
entitled under any law to receive it, shall be guilty of a misdemeanor 
and fined not more than $5,000. The term ``person'' as used in this 
subsection shall include an officer, employee, or authorized 
representative of any public housing agency or owner.
    (g) Civil Action.--Any applicant for, or tenant of, federally 
assisted housing affected by (1) a negligent or knowing disclosure of 
information referred to in this section about such person by an 
officer, employee, or authorized representative of any public housing 
agency or owner of federally assisted housing, which disclosure is not 
authorized by this section, or (2) any other negligent or knowing 
action that is inconsistent with this section, may bring a civil action 
for damages and such other relief as may be appropriate against any 
public housing agency or owner responsible for such unauthorized 
action. The district court of the United States in the district in 
which the affected applicant or tenant resides, in which such 
unauthorized action occurred, or in which the officer, employee, or 
representative alleged to be responsible for any such unauthorized 
action resides, shall have jurisdiction in such matters. Appropriate 
relief that may be ordered by such district courts shall include 
reasonable attorney's fees and other litigation costs.
    (h) Definition.--For purposes of this section, the term ``adult'' 
means a person who is 18 years of age or older, or who has been 
convicted of a crime as an adult under any Federal, State, or tribal 
law.

SEC. 645. DEFINITIONS.

    For purposes of this subtitle, the following definitions shall 
apply:
            (1) Federally assisted housing.--The term ``federally 
        assisted housing'' means a dwelling unit--
                    (A) in public housing (as such term is defined in 
                section 102);
                    (B) assisted with choice-based housing assistance 
                under title III;
                    (C) in housing that is provided project-based 
                assistance under section 8 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) or 
                pursuant to section 601(f) of this Act, including new 
                construction and substantial rehabilitation projects;
                    (D) in housing that is assisted under section 202 
                of the Housing Act of 1959 (as amended by section 801 
                of the Cranston-Gonzalez National Affordable Housing 
                Act);
                    (E) in housing that is assisted under section 202 
                of the Housing Act of 1959, as such section existed 
                before the enactment of the Cranston-Gonzalez National 
                Affordable Housing Act;
                    (F) in housing that is assisted under section 811 
                of the Cranston-Gonzalez National Affordable Housing 
                Act;
                    (G) in housing financed by a loan or mortgage 
                insured under section 221(d)(3) of the National Housing 
                Act that bears interest at a rate determined under the 
                proviso of section 221(d)(5) of such Act;
                    (H) in housing insured, assisted, or held by the 
                Secretary or a State or State agency under section 236 
                of the National Housing Act;
                    (I) for purposes only of subsections 641(c), 
                641(d), 643, and 644, in housing assisted under section 
                515 of the Housing Act of 1949.
            (2) Owner.--The term ``owner'' means, with respect to 
        federally assisted housing, the entity or private person 
        (including a cooperative or public housing agency) that has the 
        legal right to lease or sublease dwelling units in such 
        housing.

       TITLE VII--AFFORDABLE HOUSING AND MISCELLANEOUS PROVISIONS

SEC. 701. RURAL HOUSING ASSISTANCE.

    The last sentence of section 520 of the Housing Act of 1949 (42 
U.S.C. 1490) is amended by inserting before the period the following: 
``, and the city of Altus, Oklahoma, shall be considered a rural area 
for purposes of this title until the receipt of data from the decennial 
census in the year 2000''.

SEC. 702. TREATMENT OF OCCUPANCY STANDARDS.

    The Secretary of Housing and Urban Development shall not directly 
or indirectly establish a national occupancy standard.

SEC. 703. IMPLEMENTATION OF PLAN.

    (a) Implementation.--
            (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the Secretary shall implement the 
        Ida Barbour Revitalization Plan of the City of Portsmouth, 
        Virginia, in a manner consistent with existing limitations 
        under law.
            (2) Waivers.--In carrying out paragraph (1), the Secretary 
        shall consider and make any waivers to existing regulations and 
        other requirements consistent with the plan described in 
        paragraph (1) to enable timely implementation of such plan, 
        except that generally applicable regulations and other 
        requirements governing the award of funding under programs for 
        which assistance is applied for in connection with such plan 
        shall apply.
    (b) Report.--
            (1) In general.--Not later than 1 year after the date of 
        the enactment of this Act and annually thereafter through the 
        year 2000, the city described in subsection (a)(1) shall submit 
        a report to the Secretary on progress in implementing the plan 
        described in that subsection.
            (2) Contents.--Each report submitted under this subsection 
        shall include--
                    (A) quantifiable measures revealing the increase in 
                homeowners, employment, tax base, voucher allocation, 
                leverage ratio of funds, impact on and compliance with 
                the consolidated plan of the city;
                    (B) identification of regulatory and statutory 
                obstacles that--
                            (i) have caused or are causing unnecessary 
                        delays in the successful implementation of the 
                        consolidated plan; or
                            (ii) are contributing to unnecessary costs 
                        associated with the revitalization; and
                    (C) any other information that the Secretary 
                considers to be appropriate.

SEC. 704. INCOME ELIGIBILITY FOR HOME AND CDBG PROGRAMS.

    (a) Home Investment Partnerships.--The Cranston-Gonzalez National 
Affordable Housing Act is amended as follows:
            (1) Definitions.--In section 104(10) (42 U.S.C. 
        12704(10))--
                    (A) by striking ``income ceilings higher or lower'' 
                and inserting ``an income ceiling higher'';
                    (B) by striking ``variations are'' and inserting 
                ``variation is''; and
                    (C) by striking ``high or''.
            (2) Income targeting.--In section 214(1)(A) (42 U.S.C. 
        12744(1)(A))--
                    (A) by striking ``income ceilings higher or lower'' 
                and inserting ``an income ceiling higher'';
                    (B) by striking ``variations are'' and inserting 
                ``variation is''; and
                    (C) by striking ``high or''.
            (3) Rent limits.--In section 215(a)(1)(A) (42 U.S.C. 
        12745(a)(1)(A))--
                    (A) by striking ``income ceilings higher or lower'' 
                and inserting ``an income ceiling higher'';
                    (B) by striking ``variations are'' and inserting 
                ``variation is''; and
                    (C) by striking ``high or''.
    (b) CDBG.--Section 102(a)(20) of the Housing and Community 
Development Act of 1974 (42 U.S.C. 5302(a)(20)) is amended by striking 
subparagraph (B) and inserting the following new subparagraph:
            ``(B) The Secretary may--
                    ``(i) with respect to any reference in subparagraph 
                (A) to 50 percent of the median income of the area 
                involved, establish percentages of median income for 
                any area that are higher or lower than 50 percent if 
                the Secretary finds such variations to be necessary 
                because of unusually high or low family incomes in such 
                area; and
                    ``(ii) with respect to any reference in 
                subparagraph (A) to 80 percent of the median income of 
                the area involved, establish a percentage of median 
                income for any area that is higher than 80 percent if 
                the Secretary finds such variation to be necessary 
                because of unusually low family incomes in such 
                area.''.

SEC. 705. PROHIBITION OF USE OF CDBG GRANTS FOR EMPLOYMENT RELOCATION 
              ACTIVITIES.

    Section 105 of the Housing and Community Development Act of 1974 
(42 U.S.C. 5305) is amended by adding at the end the following new 
subsection:
    ``(h) Prohibition of Use of Assistance for Employment Relocation 
Activities.--Notwithstanding any other provision of law, no amount from 
a grant under section 106 made in fiscal year 1997 or any succeeding 
fiscal year may be used for any activity (including any infrastructure 
improvement) that is intended, or is likely, to facilitate the 
relocation or expansion of any industrial or commercial plant, 
facility, or operation, from one area to another area, if the 
relocation or expansion will result in a loss of employment in the area 
from which the relocation or expansion occurs.''.

SEC. 706. USE OF AMERICAN PRODUCTS.

    (a) Purchase of American-Made Equipment and Products.--It is the 
sense of the Congress that, to the greatest extent practicable, all 
equipment and products purchased with funds made available in this Act 
should be American made.
    (b) Notice Requirement.--In providing financial assistance to, or 
entering into any contract with, any entity using funds made available 
in this Act, the head of each Federal agency, to the greatest extent 
practicable, shall provide to such entity a notice describing the 
statement made in subsection (a) by the Congress.

SEC. 707. CONSULTATION WITH AFFECTED AREAS IN SETTLEMENT OF LITIGATION.

    In negotiating any settlement of, or consent decree for, any 
litigation regarding public housing or rental assistance (under title 
III of this Act or 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 involves the Secretary and any public housing agency or any 
unit of general local government, the Secretary shall consult with any 
units of general local government and public housing agencies having 
jurisdictions that are adjacent to the jurisdiction of the public 
housing agency involved.

SEC. 708. USE OF ASSISTED HOUSING BY ALIENS.

    Section 214 of the Housing and Community Development Act of 1980 
(42 U.S.C. 1436a) is amended--
            (1) in subsection (b)(2), by striking ``Secretary of 
        Housing and Urban Development'' and inserting ``applicable 
        Secretary'';
            (2) in subsection (c)(1)(B), by moving clauses (ii) and 
        (iii) 2 ems to the left;
            (3) in subsection (d)--
                    (A) in paragraph (1)(A)--
                            (i) by striking ``Secretary of Housing and 
                        Urban Development'' and inserting ``applicable 
                        Secretary''; and
                            (ii) by striking ``the Secretary'' and 
                        inserting ``the applicable Secretary'';
                    (B) in paragraph (2), in the matter following 
                subparagraph (B)--
                            (i) by inserting ``applicable'' before 
                        ``Secretary''; and
                            (ii) by moving such matter (as so amended 
                        by clause (i)) 2 ems to the right;
                    (C) in paragraph (4)(B)(ii), by inserting 
                ``applicable'' before ``Secretary'';
                    (D) in paragraph (5), by striking ``the Secretary'' 
                and inserting ``the applicable Secretary''; and
                    (E) in paragraph (6), by inserting ``applicable'' 
                before ``Secretary'';
            (4) in subsection (h) (as added by section 576 of the 
        Illegal Immigration Reform and Immigrant Responsibility Act of 
        1996 (division C of Public Law 104-208))--
                    (A) in paragraph (1)--
                            (i) by striking ``Except in the case of an 
                        election under paragraph (2)(A), no'' and 
                        inserting ``No'';
                            (ii) by striking ``this section'' and 
                        inserting ``subsection (d)''; and
                            (iii) by inserting ``applicable'' before 
                        ``Secretary''; and
                    (B) in paragraph (2)--
                            (i) by striking subparagraph (A) and 
                        inserting the following new subparagraph:
                    ``(A) may, notwithstanding paragraph (1) of this 
                subsection, elect not to affirmatively establish and 
                verify eligibility before providing financial 
                assistance''; and
                            (ii) in subparagraph (B), by striking ``in 
                        complying with this section'' and inserting 
                        ``in carrying out subsection (d)''; and
            (5) by redesignating subsection (h) (as amended by 
        paragraph (4)) as subsection (i).

SEC. 709. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
on the date of the enactment of this Act.