I 

112TH CONGRESS 

1ST SESSION H. R. 3502 

To create jobs and reinvest in communities through the rehabilitation of 

abandoned and foreclosed residential and commercial properties, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 18, 2011 

Ms. WATERS (for herself, Mr. FRANK of Massachusetts, Mr. GUTIERREZ, Mr. 

ACKERMAN, Mr. CLAY, Mr. MILLER of North Carolina, Mr. AL GREEN

of Texas, Mr. CLEAVER, Mr. CARSON of Indiana, Mr. PETERS, Ms. NORTON, Ms. RICHARDSON, Mr. CONYERS, Mr. BRADY of Pennsylvania, Mr. 

CICILLINE, Ms. JACKSON LEE of Texas, Mr. KILDEE, and Mr. CARNAHAN) introduced the following bill; which was referred to the Committee 

on Financial Services 

A BILL 

To create jobs and reinvest in communities through the 

rehabilitation of abandoned and foreclosed residential 

and commercial properties, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Project Rebuild Act of 2011’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 


smartinez on DSK6TPTVN1PROD with BILLS
2 

•HR 3502 IH

Sec. 1. Short title and table of contents. 

Sec. 2. Direct appropriations. 

Sec. 3. Allocation of appropriated amounts. 

Sec. 4. Use of funds. 

Sec. 5. Limitations. 

Sec. 6. Rules of construction. 

Sec. 7. Authority to specify alternative requirements. 

Sec. 8. Nationwide distribution of resources. 

Sec. 9. Limitation on use of funds with respect to eminent domain. 

Sec. 10. Limitation on distribution of funds. 

Sec. 11. Rental housing preferences. 

Sec. 12. Job creation. 

Sec. 13. Program support and capacity building. 

Sec. 14. Enforcement and prevention of fraud and abuse. 

Sec. 15. Conformance of policies and procedures. 

Sec. 16. Severability. 

Sec. 17. Buy American—use of American iron, steel, and manufactured goods. 

Sec. 18. Wage rate and employment protection requirements. 

1 SEC. 2. DIRECT APPROPRIATIONS. 

2 There is appropriated, out of any money in the Treas3 ury not otherwise appropriated, $15,000,000,000, to re4 main available until September 30, 2014, for assistance 

5 to eligible entities, including States and units of general 

6 local government (as such terms are defined in section 102 

7 of the Housing and Community Development Act of 1974 

8 (42 U.S.C. 5302)), and qualified nonprofit organizations, 

9 businesses or consortia of eligible entities, for the redevel10 opment of abandoned and foreclosed-upon properties and 

11 for the stabilization of affected neighborhoods. 

12 SEC. 3. ALLOCATION OF APPROPRIATED AMOUNTS. 

13 (a) IN GENERAL.—Of the amounts appropriated, 

14 two-thirds shall be allocated to States and units of general 

15 local government based on a funding formula established 

16 by the Secretary of Housing and Urban Development (in 

17 this Act referred to as the ‘‘Secretary’’). Of the amounts 


smartinez on DSK6TPTVN1PROD with BILLS
3 

•HR 3502 IH

1 appropriated, one-third shall be distributed competitively 

2 to eligible entities. 

3 (b) FORMULA TO BE DEVISED SWIFTLY.—The fund4 ing formula required under subsection (a) shall be estab5 lished and the Secretary shall announce formula funding 

6 allocations, not later than 30 days after the date of enact7 ment of this Act. 

8 (c) FORMULA CRITERIA.—The Secretary may estab9 lish a minimum grant size, and the funding formula re10 quired under subsection (a) shall ensure that any amounts 

11 appropriated or otherwise made available under this Act 

12 are allocated to States and units of general local govern13 ment with the greatest need, as such need is determined 

14 in the discretion of the Secretary based on— 

15 (1) the number and percentage of home fore16 closures in each State or unit of general local gov17 ernment; 

18 (2) the number and percentage of homes in de19 fault or delinquency in each State or unit of general 

20 local government; and 

21 (3) other factors such as established program 

22 designs, grantee capacity and performance, number 

23 and percentage of commercial foreclosures, overall 

24 economic conditions, and other market needs data, 

25 as determined by the Secretary. 


smartinez on DSK6TPTVN1PROD with BILLS
4 

•HR 3502 IH

1 (d) COMPETITION CRITERIA.— 

2 (1) ELIGIBLE ENTITIES.—For the funds dis3 tributed competitively, eligible entities shall be 

4 States, units of general local government, nonprofit 

5 entities, for-profit entities, and consortia of eligible 

6 entities that demonstrate capacity to use funding 

7 within the period of this program. 

8 (2) SELECTION CRITERIA.—In selecting grant9 ees, the Secretary shall ensure that grantees are in 

10 areas with the greatest number and percentage of 

11 residential and commercial foreclosures and other 

12 market needs data, as determined by the Secretary. 

13 Additional award criteria shall include demonstrated 

14 grantee capacity to execute projects involving acqui15 sition and rehabilitation or redevelopment of fore16 closed residential and commercial property and 

17 neighborhood stabilization, leverage, knowledge of 

18 market conditions and of effective stabilization ac19 tivities to address identified conditions, and any ad20 ditional factors determined by the Secretary. 

21 (3) MINIMUM GRANT SIZE.—The Secretary may 

22 establish a minimum grant size. 

23 (4) PUBLICATION OF CRITERIA.—The Secretary 

24 shall publish competition criteria for any grants 

25 awarded under this Act not later than 60 days after 


smartinez on DSK6TPTVN1PROD with BILLS
5 

•HR 3502 IH

1 appropriation of funds, and applications shall be due 

2 to the Secretary within 120 days. 

3 SEC. 4. USE OF FUNDS. 

4 (a) OBLIGATION AND EXPENDITURE.—The Sec5 retary shall obligate all funding within 150 days of enact6 ment of this Act. Any eligible entity that receives amounts 

7 pursuant to this Act shall expend all funds allocated to 

8 it within three years of the date the funds become avail9 able to the grantee for obligation. Furthermore, the Sec10 retary shall by notice establish intermediate expenditure 

11 benchmarks at the one and two year dates from the date 

12 the funds become available to the grantee for obligation. 

13 (b) PRIORITIES.— 

14 (1) JOB CREATION.—Each grantee or eligible 

15 entity shall describe how its proposed use of funds 

16 will prioritize job creation, and secondly, will address 

17 goals to stabilize neighborhoods, reverse vacancy, or 

18 increase or stabilize residential and commercial 

19 property values. 

20 (2) TARGETING.—Any State or unit of general 

21 local government that receives formula amounts pur22 suant to this Act shall, in distributing and targeting 

23 such amounts give priority emphasis and consider24 ation to those metropolitan areas, metropolitan cit25 ies, urban areas, rural areas, low- and moderate-inVerDate Mar 15 2010 04:19 Nov 22, 2011 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3502.IH H3502

smartinez on DSK6TPTVN1PROD with BILLS
6 

•HR 3502 IH

1 come areas, and other areas with the greatest need, 

2 including those— 

3 (A) with the greatest percentage of home 

4 foreclosures; 

5 (B) identified as likely to face a significant 

6 rise in the rate of residential or commercial 

7 foreclosures; and 

8 (C) with higher than national average un9 employment rate. 

10 (3) LEVERAGE.—Each grantee or eligible entity 

11 shall describe how its proposed use of funds will le12 verage private funds. 

13 (c) ELIGIBLE USES.—Amounts made available under 

14 this Act may be used to— 

15 (1) establish financing mechanisms for the pur16 chase and redevelopment of abandoned and fore17 closed-upon properties, including such mechanisms 

18 as soft-seconds, loan loss reserves, and shared-equity 

19 loans for low- and moderate-income homebuyers; 

20 (2) purchase and rehabilitate properties that 

21 have been abandoned or foreclosed-upon, in order to 

22 sell, rent, or redevelop such properties; 

23 (3) establish and operate land banks for prop24 erties that have been abandoned or foreclosed-upon; 

25 (4) demolish blighted structures; 


smartinez on DSK6TPTVN1PROD with BILLS
7 

•HR 3502 IH

1 (5) redevelop abandoned, foreclosed, demol2 ished, or vacant properties; and 

3 (6) engage in other activities, as determined by 

4 the Secretary through notice, that are consistent 

5 with the goals of creating jobs, stabilizing neighbor6 hoods, reversing vacancy reduction, and increasing 

7 or stabilizing residential and commercial property 

8 values. 

9 SEC. 5. LIMITATIONS. 

10 (a) ON PURCHASES.—Any purchase of a property 

11 under this Act shall be at a price not to exceed its current 

12 market value, taking into account its current condition. 

13 (b) REHABILITATION.—Any rehabilitation of an eligi14 ble property under this Act shall be to the extent necessary 

15 to comply with applicable laws, and other requirements re16 lating to safety, quality, marketability, and habitability, in 

17 order to sell, rent, or redevelop such properties or provide 

18 a renewable energy source or sources for such properties. 

19 (c) SALE OF HOMES.—If an abandoned or foreclosed20 upon home is purchased, redeveloped, or otherwise sold 

21 to an individual as a primary residence, then such sale 

22 shall be in an amount equal to or less than the cost to 

23 acquire and redevelop or rehabilitate such home or prop24 erty up to a decent, safe, marketable, and habitable condi25 tion. 


smartinez on DSK6TPTVN1PROD with BILLS
8 

•HR 3502 IH

1 (d) ON DEMOLITION OF PUBLIC HOUSING.—Public 

2 housing, as defined in section 3(b)(6) of the United States 

3 Housing Act of 1937, may not be demolished with funds 

4 under this Act. 

5 (e) ON DEMOLITION ACTIVITIES.—No more than 10 

6 percent of any grant made under this Act may be used 

7 for demolition activities unless the Secretary determines 

8 that such use represents an appropriate response to local 

9 market conditions. 

10 (f) ON USE OF FUNDS FOR NON-RESIDENTIAL

11 PROPERTY.—No more than 30 percent of any grant made 

12 under this Act may be used for eligible activities under 

13 paragraphs (1), (2), and (5) of section 4(c) that will not 

14 result in residential use of the property involved unless 

15 the Secretary determines that such use represents an ap16 propriate response to local market conditions. 

17 SEC. 6. RULES OF CONSTRUCTION. 

18 (a) IN GENERAL.—Except as otherwise provided by 

19 this Act, amounts appropriated, revenues generated, or 

20 amounts otherwise made available to eligible entities under 

21 this Act shall be treated as though such funds were com22 munity development block grant funds under title I of the 

23 Housing and Community Development Act of 1974 (42 

24 U.S.C. 5301 et seq.). 


smartinez on DSK6TPTVN1PROD with BILLS
9 

•HR 3502 IH

1 (b) NO MATCH.—No matching funds shall be re2 quired in order for an eligible entity to receive any 

3 amounts under this Act. 

4 (c) TENANT PROTECTIONS.—An eligible entity re5 ceiving a grant under this Act shall comply with the 14th, 

6 17th, 18th, 19th, 20th, 21st, 22nd, and 23rd provisos of 

7 the heading ‘‘Community Planning and Development— 

8 Community Development Fun’’ in title XII of Division A 

9 of American Recovery and Reinvestment Act of 2009 

10 (Public Law 111–5, 123 Stat. 218–19), as amended by 

11 section 1497(b)(2) of the Dodd-Frank Wall Street Reform 

12 and Consumer Protection Act (Public Law 111–203, 124 

13 Stat. 2211). 

14 (d) VICINITY HIRING.—An eligible entity receiving a 

15 grant under this Act shall comply with section 1497(a)(8) 

16 of the Dodd-Frank Wall Street Reform and Consumer 

17 Protection Act (Public Law 111–203, 129 Stat. 2210). 

18 SEC. 7. AUTHORITY TO SPECIFY ALTERNATIVE REQUIRE19 MENTS. 

20 (a) IN GENERAL.—In administering the program 

21 under this Act, the Secretary may specify alternative re22 quirements to any provision under title I of the Housing 

23 and Community Development Act of 1974 or under title 

24 I of the Cranston-Gonzalez National Affordable Housing 

25 Act of 1990 (except for those provisions in these laws reVerDate Mar 15 2010 04:19 Nov 22, 2011 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3502.IH H3502

smartinez on DSK6TPTVN1PROD with BILLS
10 

•HR 3502 IH

1 lated to fair housing, nondiscrimination, labor standards, 

2 and the environment) for the purpose of expediting and 

3 facilitating the use of funds under this Act. 

4 (b) NOTICE.—The Secretary shall provide written no5 tice of intent to the public via internet to exercise the au6 thority to specify alternative requirements under sub7 section (a). 

8 (c) LOW- AND MODERATE-INCOME REQUIREMENT.— 

9 (1) IN GENERAL.—Notwithstanding the author10 ity of the Secretary under subsection (a)— 

11 (A) all of the formula and competitive 

12 grantee funds appropriated or otherwise made 

13 available under this Act shall be used with re14 spect to individuals and families whose income 

15 does not exceed 120 percent of area median in16 come; and 

17 (B) not less than 25 percent of the for18 mula and competitive grantee funds appro19 priated or otherwise made available under this 

20 Act shall be used for the purchase and redevel21 opment of eligible properties that will be used 

22 to house individuals or families whose incomes 

23 do not exceed 50 percent of area median in24 come. 


smartinez on DSK6TPTVN1PROD with BILLS
11 

•HR 3502 IH

1 (2) RECURRENT REQUIREMENT.—The Sec2 retary shall, by rule or order, ensure, to the max3 imum extent practicable and for the longest feasible 

4 term, that the sale, rental, or redevelopment of 

5 abandoned and foreclosed-upon homes and residen6 tial properties under this Act remain affordable to 

7 individuals or families described in paragraph (1). 

8 SEC. 8. NATIONWIDE DISTRIBUTION OF RESOURCES. 

9 Notwithstanding any other provision of this Act, each 

10 State shall receive not less than $20,000,000 of formula 

11 funds. 

12 SEC. 9. LIMITATION ON USE OF FUNDS WITH RESPECT TO 

13 EMINENT DOMAIN. 

14 No State or unit of general local government may use 

15 any amounts received pursuant to this Act to fund any 

16 project that seeks to use the power of eminent domain, 

17 unless eminent domain is employed only for a public use, 

18 which shall not be construed to include economic develop19 ment that primarily benefits private entities. 

20 SEC. 10. LIMITATION ON DISTRIBUTION OF FUNDS. 

21 (a) IN GENERAL.—None of the funds made available 

22 under this Act shall be distributed to— 

23 (1) an organization which has been indicted for 

24 a violation under Federal law relating to an election 

25 for Federal office; or 


smartinez on DSK6TPTVN1PROD with BILLS
12 

•HR 3502 IH

1 (2) an organization which employs applicable 

2 individuals. 

3 (b) APPLICABLE INDIVIDUALS DEFINED.—In this 

4 section, the term ‘‘applicable individual’’ means an indi5 vidual who— 

6 (1) is— 

7 (A) employed by the organization in a per8 manent or temporary capacity; 

9 (B) contracted or retained by the organiza10 tion; or 

11 (C) acting on behalf of, or with the express 

12 or apparent authority of, the organization; and 

13 (2) has been indicted for a violation under Fed14 eral law relating to an election for Federal office. 

15 SEC. 11. RENTAL HOUSING PREFERENCES. 

16 Each State and local government receiving formula 

17 amounts shall establish procedures to create preferences 

18 for the development of affordable rental housing. 

19 SEC. 12. JOB CREATION. 

20 If a grantee chooses to use funds to create jobs by 

21 establishing and operating a program to maintain eligible 

22 neighborhood properties, not more than 10 percent of any 

23 grant may be used for that purpose. 


smartinez on DSK6TPTVN1PROD with BILLS
13 

•HR 3502 IH

1 SEC. 13. PROGRAM SUPPORT AND CAPACITY BUILDING. 

2 The Secretary may use up to 0.75 percent of the 

3 funds appropriated for capacity building of and support 

4 for eligible entities and grantees undertaking neighbor5 hood stabilization programs, staffing, training, technical 

6 assistance, technology, monitoring, travel, enforcement, 

7 research, and evaluation activities, subject to the following 

8 requirements: 

9 (1) Funds set aside for the purposes of this sec10 tion shall remain available until September 30, 

11 2016. 

12 (2) Any funds made available under this section 

13 and used by the Secretary for personnel expenses re14 lated to administering funding under this subpara15 graph shall be transferred to ‘‘Personnel Compensa16 tion and Benefits, Community Planning and Devel17 opment’’. 

18 (3) Any funds made available under this section 

19 and used by the Secretary for training or other ad20 ministrative expenses shall be transferred to ‘‘Ad21 ministration, Operations, and Management, Commu22 nity Planning and Development’’ for non-personnel 

23 expenses. 

24 (4) Any funds made available under this section 

25 and used by the Secretary for technology shall be 

26 transferred to ‘‘Working Capital Fund’’. 


smartinez on DSK6TPTVN1PROD with BILLS
14 

•HR 3502 IH

1 SEC. 14. ENFORCEMENT AND PREVENTION OF FRAUD AND 

2 ABUSE. 

3 The Secretary shall establish and implement proce4 dures to prevent fraud and abuse of funds under this Act, 

5 and shall impose a requirement that grantees have an in6 ternal auditor to continuously monitor grantee perform7 ance to prevent fraud, waste, and abuse. Grantees shall 

8 provide the Secretary and citizens with quarterly progress 

9 reports. The Secretary shall recapture funds from formula 

10 and competitive grantees that do not expend 100 percent 

11 of allocated funds within 3 years of the date that funds 

12 become available, and from underperforming or mis13 managed grantees, and shall re-allocate those funds by 

14 formula to target areas with the greatest need, as deter15 mined by the Secretary through notice. The Secretary may 

16 take an alternative sanctions action only upon determining 

17 that such action is necessary to achieve program goals in 

18 a timely manner. 

19 SEC. 15. CONFORMANCE OF POLICIES AND PROCEDURES. 

20 The Secretary of Housing and Urban Development 

21 shall to the extent feasible conform policies and procedures 

22 for grants made under this Act to the policies and prac23 tices already in place for the grants made under section 

24 2301 of the Housing and Economic Recovery Act of 2008; 

25 division A, title XII of the American Recovery and ReinVerDate Mar 15 2010 04:19 Nov 22, 2011 Jkt 019200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H3502.IH H3502

smartinez on DSK6TPTVN1PROD with BILLS
15 

•HR 3502 IH

1 vestment Act of 2009; or section 1497 of the Dodd-Frank 

2 Wall Street Reform and Consumer Protection Act. 

3 SEC. 16. SEVERABILITY. 

4 If any provision of this Act, or the application thereof 

5 to any person or circumstance, is held invalid, the remain6 der of the Act and the application of such provision to 

7 other persons or circumstances shall not be affected there8 by. 

9 SEC. 17. BUY AMERICAN—USE OF AMERICAN IRON, STEEL, 

10 AND MANUFACTURED GOODS. 

11 (a) BUY AMERICAN.—None of the funds appro12 priated or otherwise made available by this Act may be 

13 used for a project for the construction, alteration, mainte14 nance, or repair of a public building or public work unless 

15 all of the iron, steel, and manufactured goods used in the 

16 project are produced in the United States. 

17 (b) EXCEPTIONS.—Subsection (a) shall not apply in 

18 any case or category of cases in which the head of the 

19 Federal department or agency involved finds that— 

20 (1) applying subsection (a) would be incon21 sistent with the public interest; 

22 (2) iron, steel, and the relevant manufactured 

23 goods are not produced in the United States in suffi24 cient and reasonably available quantities and of a 

25 satisfactory quality; or 


smartinez on DSK6TPTVN1PROD with BILLS
16 

•HR 3502 IH

1 (3) inclusion of iron, steel, and manufactured 

2 goods produced in the United States will increase 

3 the cost of the overall project by more than 25 per4 cent. 

5 (c) PUBLICATION.—If the head of a Federal depart6 ment or agency determines that it is necessary to waive 

7 the application of subsection (a) based on a finding under 

8 subsection (b), the head of the department or agency shall 

9 publish in the Federal Register a detailed written justifica10 tion as to why the provision is being waived. 

11 (d) CONSISTENCY WITH INTERNATIONAL AGREE12 MENTS.—This section shall be applied in a manner con13 sistent with United States obligations under international 

14 agreements. 

15 SEC. 18. WAGE RATE AND EMPLOYMENT PROTECTION RE16 QUIREMENTS. 

17 (a) WAGE RATES.—Notwithstanding any other provi18 sion of law and in a manner consistent with other provi19 sions in this Act, all laborers and mechanics employed by 

20 contractors and subcontractors on projects funded directly 

21 by or assisted in whole or in part by and through the Fed22 eral Government pursuant to this Act shall be paid wages 

23 at rates not less than those prevailing on projects of a 

24 character similar in the locality as determined by the SecVerDate Mar 15 2010 04:19 Nov 22, 2011 Jkt 019200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H3502.IH H3502

smartinez on DSK6TPTVN1PROD with BILLS
17 

•HR 3502 IH

1 retary of Labor in accordance with subchapter IV of chap2 ter 31 of title 40, United States Code. 

3 (b) LABOR STANDARDS.—With respect to the labor 

4 standards specified in this section, the Secretary of Labor 

5 shall have the authority and functions set forth in Reorga6 nization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 

7 U.S.C. App.) and section 3145 of title 40, United States 

8 Code. 

9 (c) PROJECTS.—Projects as defined under title 49, 

10 United States Code, funded directly by or assisted in 

11 whole or in part by and through the Federal Government 

12 pursuant to this Act shall be subject to the requirements 

13 of section 5333(b) of title 49, United States Code. 

Æ 


smartinez on DSK6TPTVN1PROD with BILLS