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[House Report 110-845]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-845
======================================================================
 
        FRANK MELVILLE SUPPORTIVE HOUSING INVESTMENT ACT OF 2008

                                _______
                                

 September 15, 2008.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Frank of Massachusetts, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 5772]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 5772) to amend section 811 of the Cranston-Gonzalez 
National Affordable Housing Act to improve the program under 
such section for supportive housing for persons with 
disabilities, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     9
Background and Need for Legislation..............................     9
Hearings.........................................................    10
Committee Consideration..........................................    11
Committee Votes..................................................    11
Committee Oversight Findings.....................................    11
Performance Goals and Objectives.................................    11
New Budget Authority, Entitlement Authority, and Tax Expenditures    11
Committee Cost Estimate..........................................    12
Congressional Budget Office Estimate.............................    12
Federal Mandates Statement.......................................    14
Advisory Committee Statement.....................................    14
Constitutional Authority Statement...............................    14
Applicability to Legislative Branch..............................    15
Earmark Identification...........................................    15
Section-by-Section Analysis of the Legislation...................    15
Changes in Existing Law Made by the Bill, as Reported............    19

                               Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; REFERENCES.

  (a) Short Title.--This Act may be cited as the ``Frank Melville 
Supportive Housing Investment Act of 2008''.
  (b) References.--Except as otherwise expressly provided, wherever in 
this Act an amendment or repeal is expressed in terms of an amendment 
to, or repeal of, section 811 or any other provision of section 811, 
the reference shall be considered to be made to section 811 of the 
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013).

SEC. 2. TENANT-BASED RENTAL ASSISTANCE THROUGH CERTIFICATE FUND.

  (a) Termination of Mainstream Tenant-Based Rental Assistance 
Program.--Section 811 is amended--
          (1) in subsection (b)--
                  (A) by striking the first subsection designation and 
                all that follows through the end of subparagraph (B) of 
                paragraph (2) and inserting the following:
  ``(b) Authority To Provide Assistance.--The Secretary is authorized 
to provide assistance to private nonprofit organizations to expand the 
supply of supportive housing for persons with disabilities, which shall 
be provided as--
          ``(1) capital advances in accordance with subsection (d)(1), 
        and
          ``(2) contracts for project rental assistance in accordance 
        with subsection (d)(2).''; and
                  (B) by striking ``assistance under this paragraph'' 
                and inserting ``Assistance under this subsection'';
          (2) in subsection (d), by striking paragraph (4); and
          (3) in subsection (l), by striking paragraph (1).
  (b) Renewal Through Section 8.--Section 811 is amended by adding at 
the end the following new subsection:
  ``(p) Authorization of Appropriations for Section 8 Assistance.--
          ``(1) In general.--There is authorized to be appropriated for 
        tenant-based rental assistance under section 8(o) of the United 
        States Housing Act of 1937 (42 U.S.C. 1437f(o)) for persons 
        with disabilities in fiscal year 2009 the amount necessary to 
        provide a number of incremental vouchers under such section 
        that is equal to the number of vouchers provided in fiscal year 
        2008 under the tenant-based rental assistance program under 
        subsection (d)(4) of this section (as in effect before the date 
        of the enactment of the Frank Melville Supportive Housing 
        Investment Act of 2008).
          ``(2) Requirements upon turnover.--The Secretary shall 
        develop and issue, to public housing agencies that receive 
        voucher assistance made available under this subsection and to 
        public housing agencies that received voucher assistance under 
        section 8(o) of the United States Housing Act of 1937 (42 
        U.S.C. 1437f(o)) for non-elderly disabled families pursuant to 
        appropriation Acts for fiscal years 1997 through 2002 or any 
        other subsequent appropriations for incremental vouchers for 
        non-elderly disabled families, guidance to ensure that, to the 
        maximum extent possible, such vouchers continue to be provided 
        upon turnover to qualified persons with disabilities or to 
        qualified non-elderly disabled families, respectively.''.

SEC. 3. MODERNIZED CAPITAL ADVANCE PROGRAM.

  (a) Project Rental Assistance Contracts.--Section 811 is amended--
          (1) in subsection (d)(2)--
                  (A) by inserting ``(A) Initial project rental 
                assistance contract.--'' after ``Project rental 
                assistance.--''
                  (B) in the first sentence, by inserting after 
                ``shall'' the following: ``comply with subsection 
                (e)(2) and shall'';
                  (C) by striking ``annual contract amount'' each place 
                such term appears and inserting ``amount provided under 
                the contract for each year covered by the contract''; 
                and
                  (D) by adding at the end the following new 
                subparagraph:
          ``(B) Renewal of and increases in contract amounts.--
                  ``(i) Expiration of contract term.--Upon the 
                expiration of each contract term, subject to the 
                availability of amounts made available in appropriation 
                Acts, the Secretary shall adjust the annual contract 
                amount to provide for reasonable project costs, and any 
                increases, including adequate reserves and service 
                coordinators, except that any contract amounts not used 
                by a project during a contract term shall not be 
                available for such adjustments upon renewal.
                  ``(ii) Emergency situations.--In the event of 
                emergency situations that are outside the control of 
                the owner, the Secretary shall increase the annual 
                contract amount, subject to reasonable review and 
                limitations as the Secretary shall provide.''.
          (2) in subsection (e)(2)--
                  (A) in the first sentence, by inserting before the 
                period at the end the following: ``, except that, in 
                the case of the sponsor of a project assisted with any 
                low-income housing tax credit pursuant to section 42 of 
                the Internal Revenue Code of 1986 or with any tax-
                exempt housing bonds, the contract shall have an 
                initial term of not be less than 360 months and shall 
                provide funding for a term of 60 months''; and
                  (B) by striking ``extend any expiring contract'' and 
                insert ``upon expiration of a contract (or any renewed 
                contract), renew such contract''.
  (b) Program Requirements.--Section 811 is amended--
          (1) in subsection (e)--
                  (A) by striking the subsection heading and inserting 
                the following: ``Program Requirements'';
                  (B) by striking paragraph (1) and inserting the 
                following new paragraph:
          ``(1) Use restrictions.--
                  ``(A) Term.--Any project for which a capital advance 
                is provided under subsection (d)(1) shall be operated 
                for not less than 40 years as supportive housing for 
                persons with disabilities, in accordance with the 
                application for the project approved by the Secretary 
                and shall, during such period, be made available for 
                occupancy only by very low-income persons with 
                disabilities.
                  ``(B) Conversion.--If the owner of a project requests 
                the use of the project for the direct benefit of very 
                low-income persons with disabilities and, pursuant to 
                such request the Secretary determines that a project is 
                no longer needed for use as supportive housing for 
                persons with disabilities, the Secretary may approve 
                the request and authorize the owner to convert the 
                project to such use.''; and
                  (C) by adding at the end the following new 
                paragraphs:
          ``(3) Limitation on use of funds.--No assistance received 
        under this section (or any State or local government funds used 
        to supplement such assistance) may be used to replace other 
        State or local funds previously used, or designated for use, to 
        assist persons with disabilities.
          ``(4) Multifamily projects.--
                  ``(A) Limitation.--Except as provided in subparagraph 
                (B), of the total number of dwelling units in any 
                multifamily housing project (including any condominium 
                or cooperative housing project) containing any unit for 
                which assistance is provided from a capital grant under 
                subsection (d)(1) made after the date of the enactment 
                of the Frank Melville Supportive Housing Investment Act 
                of 2008, the aggregate number that are used for persons 
                with disabilities, including supportive housing for 
                persons with disabilities, or to which any occupancy 
                preference for persons with disabilities applies, may 
                not exceed 25 percent of such total.
                  ``(B) Exception.--Subparagraph (A) shall not apply in 
                the case of any project that is a group home or 
                independent living facility.''; and
          (2) in subsection (l), by striking paragraph (4).
  (c) Delegated Processing.--Subsection (g) of section 811 (42 U.S.C. 
8013(g)) is amended--
          (1) by striking ``Selection Criteria.--'' and inserting 
        ``Selection Criteria and Processing.--(1) Selection criteria.--
        '';
          (2) by redesignating paragraphs (1), (2), (3), (4), (5), (6), 
        and (7) as subparagraphs (A), (B), (C), (D), (E), (G), and (H), 
        respectively;
          (3) by adding at the end the following new paragraph:
  ``(2) Delegated Processing.--
          ``(A) In issuing a capital advance under subsection (d)(1) 
        for any multifamily project (but not including any project that 
        is a group home or independent living facility) for which 
        financing for the purposes described in the last sentence of 
        subsection (b) is provided by a combination of the capital 
        advance and sources other than this section, within 30 days of 
        award of the capital advance, the Secretary shall delegate 
        review and processing of such projects to a State or local 
        housing agency that--
                  ``(i) is in geographic proximity to the property;
                  ``(ii) has demonstrated experience in and capacity 
                for underwriting multifamily housing loans that provide 
                housing and supportive services;
                  ``(iii) may or may not be providing low-income 
                housing tax credits in combination with the capital 
                advance under this section; and
                  ``(iv) agrees to issue a firm commitment within 12 
                months of delegation.
          ``(B) The Secretary shall retain the authority to process 
        capital advances in cases in which no State or local housing 
        agency has applied to provide delegated processing pursuant to 
        this paragraph or no such agency has entered into an agreement 
        with the Secretary to serve as a delegated processing agency.
          ``(C) An agency to which review and processing is delegated 
        pursuant to subparagraph (A) may assess a reasonable fee which 
        shall be included in the capital advance amounts and may 
        recommend project rental assistance amounts in excess of those 
        initially awarded by the Secretary. The Secretary shall develop 
        a schedule for reasonable fees under this subparagraph to be 
        paid to delegated processing agencies, which shall take into 
        consideration any other fees to be paid to the agency for other 
        funding provided to the project by the agency, including bonds, 
        tax credits, and other gap funding.
          ``(D) Under such delegated system, the Secretary shall retain 
        the authority to approve rents and development costs and to 
        execute a capital advance within 60 days of receipt of the 
        commitment from the State or local agency. The Secretary shall 
        provide to such agency and the project sponsor, in writing, the 
        reasons for any reduction in capital advance amounts or project 
        rental assistance and such reductions shall be subject to 
        appeal.''.
  (d) Leveraging Other Resources.--Paragraph (1) of section 811(g) (as 
so designated by subsection (c)(1) of this section) is amended by 
inserting after subparagraph (E) (as so redesignated by subsection 
(c)(2) of this section) the following new subparagraph:
                  ``(F) the extent to which the per-unit cost of units 
                to be assisted under this section will be supplemented 
                with resources from other public and private 
                sources;''.
  (e) Tenant Protections and Eligibility for Occupancy.--Section 811 is 
amended by striking subsection (i) and inserting the following new 
subsection:
  ``(i) Admission and Occupancy.--
          ``(1) Tenant selection.--
                  ``(A) Procedures.--An owner shall adopt written 
                tenant selection procedures that are satisfactory to 
                the Secretary as (i) consistent with the purpose of 
                improving housing opportunities for very low-income 
                persons with disabilities; and (ii) reasonably related 
                to program eligibility and an applicant's ability to 
                perform the obligations of the lease. Owners shall 
                promptly notify in writing any rejected applicant of 
                the grounds for any rejection.
                  ``(B) Requirement for occupancy.--Occupancy in 
                dwelling units provided assistance under this section 
                shall be available only to persons with disabilities 
                and households that include at least one person with a 
                disability.
                  ``(C) Availability.--Except only as provided in 
                subparagraph (D), occupancy in dwelling units in 
                housing provided with assistance under this section 
                shall be available to all persons with disabilities 
                eligible for such occupancy without regard to the 
                particular disability involved.
                  ``(D) Limitation on occupancy.--Notwithstanding any 
                other provision of law, the owner of housing developed 
                under this section may, with the approval of the 
                Secretary, limit occupancy within the housing to 
                persons with disabilities who can benefit from the 
                supportive services offered in connection with the 
                housing.
          ``(2) Tenant protections.--
                  ``(A) Lease.--The lease between a tenant and an owner 
                of housing assisted under this section shall be for not 
                less than one year, and shall contain such terms and 
                conditions as the Secretary shall determine to be 
                appropriate.
                  ``(B) Termination of tenancy.--An owner may not 
                terminate the tenancy or refuse to renew the lease of a 
                tenant of a rental dwelling unit assisted under this 
                section except--
                          ``(i) for serious or repeated violation of 
                        the terms and conditions of the lease, for 
                        violation of applicable Federal, State, or 
                        local law, or for other good cause; and
                          ``(ii) by providing the tenant, not less than 
                        30 days before such termination or refusal to 
                        renew, with written notice specifying the 
                        grounds for such action.
                  ``(C) Voluntary participation in services.--A 
                supportive service plan for housing assisted under this 
                section shall permit each resident to take 
                responsibility for choosing and acquiring their own 
                services, to receive any supportive services made 
                available directly or indirectly by the owner of such 
                housing, or to not receive any supportive services.''.
  (f) Development Cost Limitations.--Subsection (h) of section 811 is 
amended--
          (1) in paragraph (1)--
                  (A) by striking the paragraph heading and inserting 
                ``Group homes'';
                  (B) in the first sentence, by striking ``various 
                types and sizes'' and inserting ``group homes'';
                  (C) by striking subparagraph (E); and
                  (D) by redesignating subparagraphs (F) and (G) as 
                subparagraphs (E) and (F), respectively;
          (2) in paragraph (3), by inserting ``established pursuant to 
        paragraph (1)'' after ``cost limitation''; and
          (3) by adding at the end the following new paragraph:
          ``(6) Applicability of home program cost limitations.--
                  ``(A) In general.--The provisions of section 212(e) 
                of the Cranston-Gonzalez National Affordable Housing 
                Act (42 U.S.C. 12742(e)) and the cost limits 
                established by the Secretary pursuant to such section 
                with respect to the amount of funds under subtitle A of 
                title II of such Act that may be invested on a per unit 
                basis, shall apply to supportive housing assisted with 
                a capital advance under subsection (d)(1) and the 
                amount of funds under such subsection that may be 
                invested on a per unit basis.
                  ``(B) Waivers.--The Secretary shall provide for 
                waiver of the cost limits applicable pursuant to 
                subparagraph (A)--
                          ``(i) in the cases in which the cost limits 
                        established pursuant to section 212(e) of the 
                        Cranston-Gonzalez National Affordable Housing 
                        Act may be waived; and
                          ``(ii) to provide for--
                                  ``(I) the cost of special design 
                                features to make the housing accessible 
                                to persons with disabilities;
                                  ``(II) the cost of special design 
                                features necessary to make individual 
                                dwelling units meet the special needs 
                                of persons with disabilities; and
                                  ``(III) the cost of providing the 
                                housing in a location that is 
                                accessible to public transportation and 
                                community organizations that provide 
                                supportive services to persons with 
                                disabilities.''.
  (g) Repeal of Authority To Waive Size Limitations.--Paragraph (1) of 
section 811(k) is amended--
          (1) in paragraph (1), by striking the second sentence; and
          (2) in paragraph (4), by striking ``(or such higher number of 
        persons'' and all that follows through ``subsection (h)(6))''.
  (h) Minimum Allocation for Multifamily Projects.--Subsection (l) of 
section 811, as amended by the preceding provisions of this Act, is 
further amended by inserting before paragraph (2) the following new 
paragraph:
          ``(1) Minimum allocation for multifamily projects.--The 
        Secretary shall establish a minimum percentage of the amount 
        made available for each fiscal year for capital advances under 
        subsection (d)(1) that shall be used for multifamily projects 
        subject to subsection (e)(4).''.

SEC. 4. PROJECT RENTAL ASSISTANCE COMPETITIVE DEMONSTRATION PROGRAM.

  Section 811, as amended by the preceding provisions of this Act, is 
further amended--
          (1) by redesignating subsections (k) through (n) as 
        subsections (l) through (o), respectively; and
          (2) by inserting after subsection (j) the following new 
        subsection:
  ``(k) Project Rental Assistance-Only Competitive Demonstration 
Program.--
          ``(1) Authority.--The Secretary shall carry out a 
        demonstration program under this subsection to expand the 
        supply of supportive housing for non-elderly adults with 
        disabilities, under which the Secretary shall make funds 
        available for project rental assistance pursuant to paragraph 
        (2) for eligible projects under paragraph (3). The Secretary 
        shall provide for State housing finance agencies and other 
        appropriate entities to apply to the Secretary for such project 
        rental assistance funds, which shall be made available by such 
        agencies and entities for dwelling units in eligible projects 
        based upon criteria established by the Secretary for the 
        demonstration program under this subsection. The Secretary may 
        not require any State housing finance agency or other entity 
        applying for project rental assistance funds under the 
        demonstration program to identify in such application the 
        eligible projects for which such funds will be used, and shall 
        allow such agencies and applicants to subsequently identify 
        such eligible projects pursuant to the making of commitments 
        described in paragraph (3)(B).
          ``(2) Project rental assistance.--
                  ``(A) Contract terms.--Project rental assistance 
                under the demonstration program under this subsection 
                shall be provided--
                          ``(i) in accordance with subsection (d)(2);
                          ``(ii) under a contract having an initial 
                        term of not less than 180 months that provides 
                        funding for a term 60 months, which funding 
                        shall be renewed upon expiration, subject to 
                        the availability of sufficient amounts in 
                        appropriation Acts.
                  ``(B) Limitation on units assisted.--Of the total 
                number of dwelling units in any multifamily housing 
                project containing any unit for which project rental 
                assistance under the demonstration program under this 
                subsection is provided, the aggregate number that are 
                provided such project rental assistance, that are used 
                for supportive housing for persons with disabilities, 
                or to which any occupancy preference for persons with 
                disabilities applies, may not exceed 25 percent of such 
                total.
                  ``(C) Prohibition of capital advances.--The Secretary 
                may not provide a capital advance under subsection 
                (d)(1) for any project for which assistance is provided 
                under the demonstration program.
                  ``(D) Eligible population.--Project rental assistance 
                under the demonstration program under this subsection 
                may be provided only for dwelling units for extremely 
                low-income persons with disabilities and extremely low-
                income households that include at least one person with 
                a disability.
          ``(3) Eligible projects.--An eligible project under this 
        paragraph is a new or existing multifamily housing project for 
        which--
                  ``(A) the development costs are paid with resources 
                from other public or private sources; and
                  ``(B) a commitment has been made--
                          ``(i) by the applicable State agency 
                        responsible for allocation of low-income 
                        housing tax credits under section 42 of the 
                        Internal Revenue Code of 1986, for an 
                        allocation of such credits;
                          ``(ii) by the applicable participating 
                        jurisdiction that receives assistance under the 
                        HOME Investment Partnership Act, for assistance 
                        from such jurisdiction; or
                          ``(iii) by any Federal agency or any State or 
                        local government, for funding for the project 
                        from funds from any other sources.
          ``(4) State agency involvement.--Assistance under the 
        demonstration may be provided only for projects for which the 
        applicable State agency responsible for health and human 
        services programs, and the applicable State agency designated 
        to administer or supervise the administration of the State plan 
        for medical assistance under title XIX of the Social Security 
        Act, have entered into such agreements as the Secretary 
        considers appropriate--
                  ``(A) to identify the target populations to be served 
                by the project;
                  ``(B) to set forth methods for outreach and referral; 
                and
                  ``(C) to make available appropriate services for 
                tenants of the project.
          ``(5) Use requirements.--In the case of any project for which 
        project rental assistance is provided under the demonstration 
        program under this subsection, the dwelling units assisted 
        pursuant to paragraph (2) shall be operated for not less than 
        30 years as supportive housing for persons with disabilities, 
        in accordance with the application for the project approved by 
        the Secretary, and such dwelling units shall, during such 
        period, be made available for occupancy only by persons and 
        households described in paragraph (2)(D).
          ``(6) Report.--Upon the expiration of the 5-year period 
        beginning on the date of the enactment of the Frank Melville 
        Supportive Housing Investment Act of 2008, the Secretary shall 
        submit to the Congress a report describing the demonstration 
        program under this subsection, analyzing the effectiveness of 
        the program, including the effectiveness of the program 
        compared to the program for capital advances in accordance with 
        subsection (d)(1) (as in effect pursuant to the amendments made 
        by such Act), and making recommendations regarding future 
        models for assistance under this section based upon the 
        experiences under the program.''.

SEC. 5. TECHNICAL CORRECTIONS.

  Section 811 is amended--
          (1) in subsection (a)--
                  (A) in paragraph (1), by striking ``and'' at the end;
                  (B) in paragraph (2)--
                          (i) by striking ``provides'' and inserting 
                        ``makes available''; and
                          (ii) by striking the period at the end and 
                        inserting ``; and'' ; and
                  (C) by adding at the end the following new paragraph:
          ``(3) promotes and facilitates community integration for 
        people with significant and long-term disabilities.'';
          (2) in subsection (c)--
                  (A) in paragraph (1), by striking ``special'' and 
                inserting ``housing and community-based services''; and
                  (B) in paragraph (2)--
                          (i) by striking subparagraph (A) and 
                        inserting the following:
                  ``(A) make available voluntary supportive services 
                that address the individual needs of persons with 
                disabilities occupying such housing;''; and
                          (ii) in subparagraph (B), by striking the 
                        comma and inserting a semicolon;
          (3) in subsection (d)(1), by striking ``provided under'' and 
        all that follows through ``shall bear'' and inserting 
        ``provided pursuant to subsection (b)(1) shall bear'';
          (4) in subsection (f)--
                  (A) in paragraph (3)--
                          (i) in subparagraph (B), by striking 
                        ``receive'' and inserting ``be offered'';
                          (ii) by striking subparagraph (C) and 
                        inserting the following:
                  ``(C) evidence of the applicant's experience in--
                          ``(i) providing such supportive services; or
                          ``(ii) creating and managing structured 
                        partnerships with service providers for the 
                        delivery of appropriate community-based 
                        services;'';
                          (iii) in subparagraph (D), by striking ``such 
                        persons'' and all that follows through 
                        ``provision of such services'' and inserting 
                        ``tenants''; and
                          (iv) in subparagraph (E), by inserting 
                        ``other Federal, and'' before ``State''; and
                  (B) in paragraph (4), by striking ``special'' and 
                inserting ``housing and community-based services'';
          (5) in subsection (g), in paragraph (1) (as so redesignated 
        by section 3(c)(1) of this Act)--
                  (A) in subparagraph (D) (as so redesignated by 
                section 3(c)(2) of this Act), by striking ``the 
                necessary supportive services will be provided'' and 
                inserting ``appropriate supportive services will be 
                made available''; and
                  (B) by striking subparagraph (E) (as so redesignated 
                by section 3(c)(2) of this Act) and inserting the 
                following:
          ``(E) the extent to which the location and design of the 
        proposed project will facilitate the provision of community-
        based supportive services and address other basic needs of 
        persons with disabilities, including access to appropriate and 
        accessible transportation, access to community services 
        agencies, public facilities, and shopping;'';
          (6) in subsection (j)--
                  (A) by striking paragraph (4); and
                  (B) by redesignating paragraphs (5), (6), and (7) as 
                paragraphs (4), (5), and (6), respectively;
          (7) in subsection (l) (as so redesignated by section 4(1) of 
        this Act)--
                  (A) in paragraph (1), by inserting before the period 
                at the end of the first sentence the following: ``, 
                which provides a separate bedroom for each tenant of 
                the residence'';
                  (B) by striking paragraph (2) and inserting the 
                following:
          ``(2)(A) The term `person with disabilities' means a person 
        who is 18 years of age or older and less than 62 years of age, 
        who--
                  ``(i) has a disability as defined in section 223 of 
                the Social Security Act,
                  ``(ii) 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
                  ``(iii) has a developmental disability as defined in 
                section 102 of the Developmental Disabilities 
                Assistance and Bill of Rights Act of 2000.
          ``(B) 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 low-income housing under this 
        title, solely on the basis of any drug or alcohol dependence. 
        The Secretary shall consult with other appropriate Federal 
        agencies to implement the preceding sentence.
          ``(C) The Secretary shall prescribe such regulations as may 
        be necessary to prevent abuses in determining, under the 
        definitions contained in this paragraph, the eligibility of 
        families and persons for admission to and occupancy of housing 
        assisted under this section. Notwithstanding the preceding 
        provisions of this paragraph, the term `person with 
        disabilities' includes two or more persons with disabilities 
        living together, one or more such persons living with another 
        person who is determined (under regulations prescribed by the 
        Secretary) to be important to their care or well-being, and the 
        surviving member or members of any household described in 
        subparagraph (A) who were living, in a unit assisted under this 
        section, with the deceased member of the household at the time 
        of his or her death.'';
                  (C) by striking paragraph (3) and inserting the 
                following new paragraph:
          ``(3) The term `supportive housing for persons with 
        disabilities' means dwelling units that--
                  ``(A) are designed to meet the permanent housing 
                needs of very low-income persons with disabilities; and
                  ``(B) are located in housing that make available 
                supportive services that address the individual health, 
                mental health, or other needs of such persons.'';
                  (D) in paragraph (5), by striking ``a project for''; 
                and
                  (E) in paragraph (6)--
                          (i) by inserting after and below subparagraph 
                        (D) the matter to be inserted by the amendment 
                        made by section 841 of the American 
                        Homeownership and Economic Opportunity Act of 
                        2000 (Public Law 106-569; 114 Stat. 3022); and
                          (ii) in the matter inserted by the amendment 
                        made by subparagraph (A) of this paragraph, by 
                        striking ``wholly owned and''; and
          (8) in subsection (m) (as so redesignated by section 4(1) of 
        this Act)--
                  (A) in paragraph (2), by striking ``subsection 
                (c)(1)'' and inserting ``subsection (d)(1)''; and
                  (B) in paragraph (3), by striking ``subsection 
                (c)(2)'' and inserting ``subsection (d)(2)''.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

  Subsection (n) of section 811 (as so redesignated by section 4(1) of 
this Act) is amended to read as follows:
  ``(n) Authorization of Appropriations.--There is authorized to be 
appropriated for each of fiscal years 2008 through 2012 the following 
amounts:
          ``(1) Capital advance/prac program.--For providing assistance 
        pursuant to subsection (b), such sums as may be necessary.
          ``(2) Demonstration program.--For carrying out the 
        demonstration program under subsection (k), such sums as may be 
        necessary to provide 2,500 incremental dwelling units under 
        such program in each of fiscal years 2008 and 2009 and 5,000 
        incremental dwelling units under such program in each of fiscal 
        years 2010, 2011, and 2012.''.

SEC. 7. NEW REGULATIONS AND PROGRAM GUIDANCE.

  Not later than the expiration of the 180-day period beginning on the 
date of the enactment of this Act, the Secretary of Housing and Urban 
Development shall issue new regulations and guidance for the program 
under section 811 of the Cranston-Gonzalez National Affordable Housing 
Act for supportive housing for persons with disabilities to carry out 
such program in accordance with the amendments made by this Act.

SEC. 8. GAO STUDY.

   The Comptroller General of the United States shall conduct a study 
of the supportive housing for persons with disabilities program under 
section 811 of the Cranston-Gonzalez National Affordable Housing Act 
(42 U.S.C. 8013) to determine the adequacy and effectiveness of such 
program in assisting households of persons with disabilities. Such 
study shall determine--
          (1) the total number of households assisted under such 
        program;
          (2) the extent to which households assisted under other 
        programs of the Department of Housing and Urban Development 
        that provide rental assistance or rental housing would be 
        eligible to receive assistance under such section 811 program; 
        and
          (3) the extent to which households described in paragraph (2) 
        who are eligible for, but not receiving, assistance under such 
        section 811 program are receiving supportive services from, or 
        assisted by, the Department of Housing and Urban Development 
        other than through the section 811 program (including under the 
        Resident Opportunity and Self-Sufficiency program) or from 
        other sources.
Upon the completion of the study required under this section, the 
Comptroller General shall submit a report to the Congress setting forth 
the findings and conclusions of the study.

                          Purpose and Summary

    H.R. 5772, the ``Frank Melville Supportive Housing 
Investment Act of 2008'' amends section 811 of the Cranston-
Gonzalez National Affordable Housing Act (P.L. 101-625), which 
established the Housing for Persons with Disabilities program. 
The Section 811 program is the only Department of Housing and 
Urban Development (HUD) permanent supportive housing program 
exclusively serving persons with disabilities. The main goals 
of the bill are to facilitate the use of mixed financing for 
the more timely production of new developments and foster the 
integration of housing for persons with disabilities, while 
allowing residents to live independently. H.R. 5772 is designed 
to accomplish these goals by amending the tenant-based rental 
assistance component of the program, modernizing the capital 
advance program and authorizing a rental assistance-only 
demonstration program.

                  Background and Need for Legislation

    The Section 811 Supportive Housing for Persons with 
Disabilities program structure consists of three components: 
(1) capital advances, (2) project rental assistance, and (3) 
tenant-based rental assistance. HUD provides no-interest 
capital advance grants to non-profit sponsors, to develop 
rental housing, such as independent living facilities, 
condominium units and groups homes which have available 
supportive services for persons with disabilities. The capital 
advance need not be repaid if the project serves very-low-
income persons with disabilities for not less than 40 years. In 
connection with a capital advance, HUD provides project-based 
assistance through the Project-Based Rental Assistance Contract 
(PRAC), which covers the difference between the operating cost 
and the amount residents pay in rent.
    The program also provides for tenant-based vouchers, which 
are available to families who are income eligible and include a 
person with disabilities, to lease private rental housing. 
Although the tenant-based voucher program was authorized under 
the Housing and Community Development Act of 1992 (P.L. 102-
550), it was not funded until Fiscal Year 1997, at which time 
it was established as a 25 percent set aside within the Section 
811 appropriation. Vouchers are administered by Public Housing 
Agencies and non-profit organizations. HUD did not establish a 
tracking system to follow voucher recipients or ensure that 
upon turnover the vouchers were reissued to families including 
persons with disabilities until 2005. Because there is the 
possibility that vouchers that were reissued by the public 
housing agencies before the tracking system was implemented 
were given to families who may not have included a person with 
disabilities, H.R. 5772 transfers these vouchers to the Section 
8 Housing Choice Voucher program, and requires HUD to develop 
guidance to ensure that any existing and future appropriated 
vouchers continue to serve eligible persons with disabilities.
    As funding for the Section 811 and other supportive housing 
programs has declined, grant applicants have been forced to 
find additional or ``gap'' financing to cover the difference 
between the grant and PRAC amounts and the full project cost of 
developing new housing. At the Subcommittee on Housing and 
Community Opportunity hearing on the bill on June 20, 2008, the 
Subcommittee heard testimony from several witnesses on the 
programmatic delays in processing new developments, including 
those that raise ``gap'' financing. One witness stated that 
grant processing can take over 2 years, in some cases causing 
increased project costs of up to 25 percent. By transferring 
grant processing through state housing finance agencies, H.R. 
5772 encourages program sponsors to take full advantage other 
financing options by removing costly delays at HUD and allowing 
project to moreefficiently bring new projects online. In 
addition, the modernized program removes disincentives for mixed 
financing by providing preference in the grant selection criteria to 
projects that will leverage the per-unit cost of units assisted with 
other resources. H.R. 5772 also permits project sponsors seeking to 
combine Section 811 program funds with other sources of financing to 
apply certain conforming program requirements such as development costs 
and use restrictions.
    H.R. 5772 authorizes a project-based rental assistance-only 
demonstration program (as opposed to the current program, which 
provides project-based rental assistance in connection with a 
capital advance grant). In the demonstration program, HUD 
awards funds to state housing finance agencies, to enter into 
contracts with project owners to provide project-based rental 
assistance for units for persons with disabilities. Eligible 
projects are new or existing projects which have received 
capital funds from another private or public funding source and 
have entered into agreement with the state or local agency 
responsible for health and human services to assist in outreach 
and make available appropriate services for tenants. Such 
projects will be subject to a 25 percent limitation on the 
percentage of units which may assist persons with disabilities, 
whether assisted by the demonstration program, or a different 
funding source.
    In addition to amending the Section 811 program structure, 
H.R. 5772 revises outdated program definitions and guidelines 
to reflect the permanent housing and services needs of and 
choices for persons with disabilities. The Committee believes 
it is essential for HUD to issue new regulations and program 
guidance to implement the amendments made by the bill to the 
Section 811 program.

                                Hearings

    The Subcommittee on Housing and Community Opportunity held 
a hearing entitled ``H.R. 5772, the Frank Melville Supportive 
Housing Investment Act of 2008'' on June 20, 2008. The 
following witnesses testified:
     Ms. Diane Randall, Executive Director, Partnership 
for Strong Communities
     Ms. Ann O'Hara, The Technical Assistance 
Collaborative
     Mr. Ronald S. Cohen, Ph.D., Chief Executive 
Officer, United Cerebral Palsy of Los Angeles, Ventura & Santa 
Barbara Counties
     Mr. Mark Shelburne, North Carolina Housing Finance 
Agency
     Mr. Tony Paulauski, Executive Director, The Arc of 
Illinois

                        Committee Consideration

    The Committee on Financial Services met in open session on 
July 30, 2008, and ordered H.R. 5772, the ``Frank Melville 
Supportive Housing Investment Act of 2008'', as amended, 
favorably reported by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken with in conjunction with the 
consideration of this legislation. A motion by Mr. Frank to 
report the bill, as amended, to the House with a favorable 
recommendation was agreed to by a voice vote.
    During the consideration of the bill, the following 
amendment was considered:
    An amendment by Mr. Murphy (CT), No. 1, regarding 
identification of projects for demonstration program and 
requiring a GAO study, was agreed to by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held a hearing and 
made findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    H.R. 5772 amends section 811 of the Cranston-Gonzalez 
National Affordable Housing Act (P.L. 101-625), which 
established the Housing for Persons with Disabilities program. 
The Section 811 program is the only HUD permanent supportive 
housing program exclusively serving persons with disabilities. 
The main goals of the bill are to facilitate the use of mixed 
financing for the more timely production of new developments 
and foster the integration of housing for persons with 
disabilities, while allowing residents to live independently. 
H.R. 5772 is designed to accomplish these goals by amending the 
tenant-based rental assistance component of the program, 
modernizing the capital advance program and authorizing a 
rental assistance-only demonstration program.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:
                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 11, 2008.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5772, the Frank 
Melville Supportive Housing Investment Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jessica 
Sherry.
            Sincerely,
                                         Robert A. Sunshine
                                   (For Peter R. Orszag, Director).
    Enclosure.

H.R. 5772--Frank Melville Supportive Housing Investment Act of 2008

    Summary: H.R. 5772 would amend the Cranston-Gonzalez 
National Affordable Housing Act to make changes to a housing 
program that provides supportive housing for low-income persons 
with disabilities.
    CBO estimates that implementing H.R. 5772 would cost $652 
million over the 2009-2013 period, assuming appropriation of 
the necessary amounts. Enacting the bill would not affect 
direct spending or revenues.
    H.R. 5772 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA); 
any costs to state, local, or tribal governments would be 
incurred voluntarily.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5772 is shown in the following table. 
The costs of this legislation fall within budget function 600 
(income security).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year in millions of dollars--
                                                              --------------------------------------------------
                                                                2009    2010    2011    2012    2013   2009-2013
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Modernized Capital Advance Program:
    Estimated Authorization Level............................     167     170     173     176       0       686
    Estimated Outlays........................................       7      40      71     114     134       366
Renewal of Mainstream Tenant-Based Vouchers under Section 8
 Program:
    Estimated Authorization Level............................     106       0       0       0       0       106
    Estimated Outlays........................................      92      14       0       0       0       106
Project Rental Assistance Competitive Demonstration Program:
    Estimated Authorization Level............................      11      33      55      79       0       178
    Estimated Outlays........................................       6      23      45      68      36       178
Delegated Processing Fees:
    Estimated Authorization Level............................       0     \1\       1       1       0         2
    Estimated Outlays........................................       0     \1\       1       1     \1\         2
Total Changes:
    Estimated Authorization Level............................     284     203     229     256       0       972
    Estimated Outlays........................................     105      77     117     183     170      652
----------------------------------------------------------------------------------------------------------------
Note.-- \1\  = between zero and $500,000.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
5772 will be enacted near the start of fiscal year 2009, that 
the necessary amounts will be appropriated each year, and that 
outlays will follow historical spending patterns for existing 
programs. (H.R. 5772 also would authorize appropriations in 
2008 for supportive housing for the disabled; however, those 
amounts are not included in this cost estimate because CBO 
assumes that no further appropriations will be provided in 2008 
for such programs.)
    The Supportive Housing for Persons with Disabilities 
program was established by the Cranston-Gonzalez National 
Affordable Housing Act of 1990. The program currently makes 
capital grants and project rental assistance available to 
nonprofit entities to develop affordable housing for low-income 
households headed by people with disabilities. In addition, the 
program currently funds tenant-based vouchers for such 
households. Prior to 1990, housing units for persons with 
disabilities were made available under the Housing for the 
Elderly program.

Modernized Capital Advance Program

    Section 3 would authorize the appropriation of such sums as 
necessary for each of fiscal years 2008 through 2012 for the 
Capital Advance/Project Rental Assistance Contract program. In 
2008, $162 million was made available for that program. Based 
on data from the Department of Housing and Urban Development 
(HUD) for current operations, and adjusting for inflation, CBO 
estimates that implementing this section would cost $366 
million over the 2009-2013 period, assuming appropriation of 
the necessary amounts.

Renewal of mainstream tenant-based vouchers under Section 8 Program

    Section 2 would transfer all current vouchers under the 
supportive housing program and all future incremental vouchers 
for people with disabilities to the Section 8 housing choice 
voucher program. The bill would authorize the appropriation of 
such sums as necessary in 2009 to provide funding for the 
number of vouchers provided in fiscal year 2008 under the 
current mainstream voucher program. In 2007, HUD provided about 
15,000 vouchers at an average cost of $540 a month; the numbers 
for 2008 are not yet available. Adjusting for inflation, CBO 
estimates that providing the same number of vouchers in 2009 
would cost $106 million over the 2007-2010 period, assuming 
appropriation of the necessary amounts.

Project Rental Assistance Competitive Demonstration Program

    Section 4 would authorize a new demonstration program for 
project-based assistance to subsidize housing units developed 
with funds not provided under the supportive housing program, 
including units developed through the Low-Income Housing Tax 
Credit and the HOME Investment Partnerships Program. 
Specifically, the bill would authorize the appropriation of 
such sums as may be necessary to provide 2,500 incremental 
dwelling units in each of fiscal years 2008 and 2009 and 5,000 
incremental dwelling units in each of fiscal years 2010, 2011, 
and 2012. Based on information from HUD, CBO estimates that 
beginning in 2009, 2,500 units would receive such rental 
assistance at an average cost of about $4,200 per unit, 
reaching a cumulative total of 17,500 units in 2012. Assuming 
appropriation of the necessary amounts, CBO estimates that 
providing such assistance to the tenants of those properties 
would cost $178 million over the 2009-2013 period.

Delegated processing fees

    Section 3 also would require HUD to delegate the processing 
of certain capital grants to interested state or local housing 
agencies. The provision would direct HUD to develop a schedule 
of reasonable fees to be paid to the delegated processing 
agencies and would allow the fees to be included as part of the 
total capital grant amount. Based on information provided by 
HUD, industry groups, and state agencies, CBO estimates that 
paying those fees would cost $2 million over the 2009-2013 
period, assuming availability of the necessary amounts.
    Intergovernmental and private-sector impact: H.R. 5772 
contains no intergovernmental or private-sector mandates as 
defmed in UMRA. The bill would benefit state, local, and tribal 
governments that participate in affordable housing projects and 
programs. Any costs those governments incur to comply with 
program requirements would be incurred voluntarily.
    Estimate prepared by: Federal Spending: Jessica Sherry; 
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum; Impact on the Private Sector: Patrick Bernhardt.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 5772 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    This section establishes the short title of the bill, the 
``Frank Melville Supportive Housing Investment Act of 2008.''

Section 2. Tenant-based rental assistance through certificate fund

    This section transfers all existing tenant-based Mainstream 
vouchers and any future incremental vouchers for persons with 
disabilities to the Section 8 Housing Choice Voucher program. 
Additionally, the section provides protections to ensure that 
upon the turnover of these vouchers, they continue to serve 
persons with disabilities.
    Mainstream Tenant-Based Assistance. Authorizes 
appropriations for tenant-based assistance under the Section 8 
rental assistance program for low-income persons with 
disabilities in the amount necessary to provide incremental 
vouchers for all persons previously assisted under the 
Mainstream Tenant-Based Rental Assistance in 2008, as well as 
the renewal of incremental vouchers for non-elderly disabled 
households, pursuant to appropriations acts for FY 1997-2002. 
Requires the Secretary to develop and issue guidance to public 
housing agencies to ensure that such vouchers continue to be 
provided to qualified persons with disabilities.

Section 3. Modernized capital advance program

    This section makes a number of changes to the program to 
encourage integration and mixed-use developments, as well as 
facilitating the use of other sources of financing, such as Low 
Income Housing Tax Credits and HOME program funds.
    Project Rental Assistance Contracts. Requires the 
Secretary, upon renewal of a project-based rental assistance 
contract, to adjust the annual contract amount to provide for 
reasonable cost increases, including adequate reserves and 
service coordinators, as well as for emergency situations 
beyond the control of the owner. Lengthens the initial rental 
assistance contract term for projects assisted with any low-
income housing tax credits or bonds from 20 to 30 years, 
allowing such projects to more closely conform to the Low 
Income Housing Tax Credit (LIHTC) program.
    Use Restrictions. Retains the current 40-year term during 
which the project must continue to be operated as supportive 
housing for persons with disabilities. Permits owners of 
supportive housing projects, with the approval of the 
Secretary, to convert projects for the direct benefit of very 
low-income persons, if the Secretary determines that the 
project is no longer needed for supportive housing. Prohibits 
the use of funds to replace State or local funds previously 
used to assist persons with disabilities.
    Multifamily Projects. Establishes a limitation on the 
overall percentage of units in a multifamily project funded by 
a capital advance, which are not group homes or independent 
living facilities, which may be provided for persons with 
disabilities.
    Delegated Processing. Requires delegated processing for 
multifamily 811 projects which combine capital advance funds 
with othersources of financing and that have already been 
approved by HUD, for the purpose of issuing a capital advance, to a 
state or local agency which (a) is in geographic proximity to the 
property, (b) has demonstrated experience in underwriting multifamily 
housing loans that provide housing and supportive services, (c) may or 
may not be providing LIHTC in combination with the 811 capital advance 
and (d) agrees to issue a firm commitment within 12 months of 
delegation. Retains the Secretary's authority to process capital 
advances where no State or local housing finance agency has applied. 
Waives the delegated underwriting requirement where no State or local 
agency has applied to provide delegated underwriting. Permits the State 
or local agency to charge a reasonable fee for processing, which will 
be included in the capital advance amount. Requires the Secretary to 
develop a schedule for reasonable fees to be paid for delegated 
underwriting. Confirms HUD Secretary's authority to approve rents and 
development costs and requires that the Secretary execute a capital 
advance within 60 days of receipt of commitment.
    Leveraging Other Resources. Amends the selection criteria 
to give preference to projects that will leverage the per-unit 
cost of units assisted with other public or private resources.
    Tenant Protections and Eligibility for Occupancy. Tenant 
Selection: Requires owners to develop written tenant selection 
procedures which, in the determination of the Secretary, are 
consistent with the purpose of improving housing opportunities 
for very low-income persons with disabilities and reasonably 
related to program eligibility and the applicant's ability to 
perform the obligations of the lease. Limits occupancy to 
persons with disabilities and households that include at least 
one person with a disability. Makes units available to eligible 
persons with disabilities without regard to particular 
disability involved. Permits an owner to limit occupancy within 
a project to persons with disabilities who can benefit from the 
supportive services offered in connection with the housing.
    Tenant Protections. Establishes a 1-year lease. Prohibits 
the owner from terminating a lease, except in cases in which a 
tenant has seriously or repeatedly violated the terms and 
conditions of the lease, violated applicable Federal, State or 
local law, or for other good cause, and the owner has provided 
the tenant with written notice specifying the grounds of 
termination, 30 days prior to termination. Permits residents to 
choose and acquire available services for independent living 
facilities and multifamily housing.
    Development Cost Limitations. Limits current program 
development cost limitations to group homes, only. Adopts the 
HOME program development cost limitations on funds invested on 
a per-unit basis. Provides waivers of cost limitations in cases 
in which the cost limits may be waived to provide for the cost 
of special design features to make housing accessible, the cost 
of special design features necessary to make individual 
dwelling units meet the special needs of persons with 
disabilities and the cost of providing the housing in a 
location that is accessible to public transportation and 
community organizations that provide supportive services.
    Repeal of Authority To Waive Size Limitations. Repeals the 
authority of the Secretary to waive the size limitations on 
group homes and independent living facilities.
    Minimum Allocation for Multifamily Projects. Requires the 
Secretary to establish a minimum percentage of capital advance 
funds to be used for multifamily projects.

Section 4. Project Rental Assistance Competitive Demonstration Program

    This section authorizes a demonstration program in which 
projects will be awarded project-based rental assistance 
contracts only and not new construction capital advance grants. 
These project-based units will be within larger multifamily 
housing projects and are intended to facilitate the creation of 
mixed-use housing.
    Authority. Requires the Secretary to make available project 
rental assistance funds to State and local financing agencies 
and other appropriate agencies to carry out a demonstration 
program to provide dwelling units in eligible projects.
    Project-Rental Assistance. Requires the Secretary to make 
monthly rental assistance payments to projects for an initial 
contract term of 15 years, with 5-year renewals. Limits the 
number of reserved for persons with disabilities in projects to 
no more than 25 percent of the total number of units in such 
project, in projects assisted under this demonstration program. 
Prohibits the provision of capital advance grant funds for any 
project which receives assistance under the demonstration 
program. Limits the eligible occupants of units assisted under 
the demonstration to extremely low-income persons with 
disabilities.
    Eligible Projects. Establishes the eligibility of projects 
as a new or existing multifamily housing project for which the 
development costs are paid with resources from other public or 
private sources and a commitment had been made (a) by the State 
HFA for the allocation of tax credits, (b) by the applicable 
participating jurisdiction for HOMEassistance, or (c) any other 
Federal, State or local funding for the project from other sources.
    State Agency Involvement. Limits project eligibility to 
projects for which the State agency responsible for health and 
human services program, and the State agency designated to 
administer Medicaid assistance have entered into such 
agreements (a) to identify and target populations to be served 
by project, (b) to set forth methods for outreach and referral, 
and (c) to make available appropriate services for tenants of 
the project.
    Use Requirements. Requires all dwelling units assisted 
under this demonstration program will be operated as supportive 
housing for persons with disabilities for 30 years, for 
extremely low-income persons with disabilities.
    Report. Requires the Secretary to submit to Congress 5 
years after the enactment of this act, describing the 
demonstration program, its effectiveness and any 
recommendations regarding future models for assist under this 
act.

Section 5. Technical corrections

    This section makes technical corrections to the statute to 
clarify and amend certain program guidelines and definitions.
    Amends the purpose of the program to include the promotion 
and facilitation of community integration for persons with 
significant and long-term disabilities; the application 
requirements for supportive service plans; and the project 
selection criteria to encourage the use of locations that will 
facilitate the provision of services and other basic needs. 
Eliminates the owner deposit requirement.
    Revises the definition of Group Home to require a separate 
bedroom for each tenant. Revises the definition of persons with 
disabilities to apply to persons between 18 and 62 years of 
age, who has a disability as defined in section 223 of the 
Social Security Act and is determined, pursuant to regulations 
issued by the Secretary, to have a physical, mental or 
emotional impairment, which (a) is expected to be of a long-
continued and indefinite duration, (b) substantially impedes 
his or her ability to live independently, and (c) is of such a 
nature that such ability could be improved by more suitable 
housing conditions, or has a developmental disability as 
defined in section 102 of the Development Disabilities 
Assistance and Bill of Rights Act of 2000. Confirms that 
persons with AIDS are not excluded by this definition. 
Clarifies that individuals shall not be considered persons with 
disabilities under this definition, based solely on drug or 
alcohol dependence. Requires the Secretary to prescribe 
regulations to implement this definition and to prevent abuses 
in determining eligibility of households. Revises the 
definition of ``supportive housing for persons with 
disabilities'' to dwelling units that are designed to meet the 
permanent housing needs of very low-income persons with 
disabilities and make available supportive services that 
address the individual health, mental health, or other needs of 
such persons.

Section 6. Authorization of appropriations

    Authorizes an appropriation of such sums as may be 
necessary for the capital advance/project rental assistance 
contract. Authorizes such sums as may be necessary for the 
demonstration program to provide for 2,500 incremental dwelling 
units under such program for 2008 and 2009 and 5,000 
incremental dwelling units under the demonstration program for 
fiscal years 2010, 2011 and 2012.

Section 7. New regulations and program guidance

    Requires the Secretary to issue implementing regulations 
within 180 days of enactment.

Section 8. GAO study

    Directs GAO to assess the number of households assisted by 
the Section 811 Supportive Housing for Persons with 
Disabilities program, the number of Section 811-eligible 
households currently living in other HUD-assisted housing, and 
the extent to which those households have access to supportive 
services.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUSING ACT

           *       *       *       *       *       *       *

TITLE VIII--HOUSING FOR PERSONS WITH SPECIAL NEEDS

           *       *       *       *       *       *       *

      Subtitle B--Supportive Housing for Persons With Disabilities

SEC. 811. SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES.

  (a) Purpose.--The purpose of this section is to enable 
persons with disabilities to live with dignity and independence 
within their communities by expanding the supply of supportive 
housing that--
          (1) is designed to accommodate the special needs of 
        such persons; [and]
          (2) [provides] makes available supportive services 
        that address the individual health, mental health, and 
        other needs of such persons[.]; and
          (3) promotes and facilitates community integration 
        for people with significant and long-term disabilities.
  [(b) Authority to provide assistance.--The Secretary is 
authorized--
  [(1) to provide tenant-based rental assistance to eligible 
persons with disabilities, in accordance with subsection 
(d)(4); and
  [(2) to provide assistance to private, nonprofit 
organizations to expand the supply of supportive housing for 
persons with disabilities, which shall be provided as--
          [(A) capital advances in accordance with subsection 
        (d)(1), and
          [(B) contracts for project rental assistance in 
        accordance with subsection (d)(2);]
  (b) Authority To Provide Assistance.--The Secretary is 
authorized to provide assistance to private nonprofit 
organizations to expand the supply of supportive housing for 
persons with disabilities, which shall be provided as--
          (1) capital advances in accordance with subsection 
        (d)(1), and
          (2) contracts for project rental assistance in 
        accordance with subsection (d)(2).
[assistance under this paragraph] Assistance under this 
subsection may be used to finance the acquisition, acquisition 
and moderate rehabilitation, construction, reconstruction, or 
moderate or substantial rehabilitation of housing, including 
the acquisition from the Resolution Trust Corporation, to be 
used as supportive housing for persons with disabilities and 
may include real property acquisition, site improvement, 
conversion, demolition, relocation, and other expenses that the 
Secretary determines are necessary to expand the supply of 
supportive housing for persons with disabilities.
  (c) General Requirements.--The Secretary shall take such 
actions as may be necessary to ensure that--
          (1) assistance made available under this section will 
        be used to meet the [special] housing and community-
        based services needs of persons with disabilities by 
        providing a variety of housing options, ranging from 
        group homes and independent living facilities to 
        dwelling units in multifamily housing developments, 
        condominium housing, and cooperative housing; and
          (2) supportive housing for persons with disabilities 
        assisted under this section shall--
                  [(A) provide persons with disabilities 
                occupying such housing with supportive services 
                that address their individual needs;]
                  (A) make available voluntary supportive 
                services that address the individual needs of 
                persons with disabilities occupying such 
                housing;
                  (B) provide such persons with opportunities 
                for optimal independent living and 
                participation in normal daily activities[,]; 
                and

           *       *       *       *       *       *       *

  (d) Forms of Assistance.--
          (1) Capital advances.--A capital advance [provided 
        under this section shall bear] provided pursuant to 
        subsection (b)(1) shall bear no interest and its 
        repayment shall not be required so long as the housing 
        remains available for very-low-income persons with 
        disabilities in accordance with this section. Such 
        advance shall be in an amount calculated in accordance 
        with the development cost limitation established in 
        subsection (h).
          (2) Project rental assistance.--(A) Initial project 
        rental assistance contract.--Contracts for project 
        rental assistance shall comply with subsection (e)(2) 
        and shall obligate the Secretary to make monthly 
        payments to cover any part of the costs attributed to 
        units occupied (or, as approved by the Secretary, held 
        for occupancy) by very low-income persons with 
        disabilities that is not met from project income. The 
        [annual contract amount] amount provided under the 
        contract for each year covered by the contract for any 
        project shall not exceed the sum of the initial annual 
        project rentals for all units and any initial utility 
        allowances for such units, as approved by the 
        Secretary. Any contract amounts not used by a project 
        in any year shall remain available to the project until 
        the expiration of the contract. The Secretary may 
        adjust the [annual contract amount] amount provided 
        under the contract for each year covered by the 
        contract if the sum of the project income and the 
        amount of assistance payments available under this 
        paragraph are inadequate to provide for reasonable 
        project costs. In the case of an intermediate care 
        facility which is the residence of persons assisted 
        under title XIX of the Social Security Act, project 
        income under this paragraph shall include the same 
        amount as if such person were being assisted under 
        title XVI of the Social Security Act.
          (B) Renewal of and increases in contract amounts.--
                  (i) Expiration of contract term.--Upon the 
                expiration of each contract term, subject to 
                the availability of amounts made available in 
                appropriation Acts, the Secretary shall adjust 
                the annual contract amount to provide for 
                reasonable project costs, and any increases, 
                including adequate reserves and service 
                coordinators, except that any contract amounts 
                not used by a project during a contract term 
                shall not be available for such adjustments 
                upon renewal.
                  (ii) Emergency situations.--In the event of 
                emergency situations that are outside the 
                control of the owner, the Secretary shall 
                increase the annual contract amount, subject to 
                reasonable review and limitations as the 
                Secretary shall provide.

           *       *       *       *       *       *       *

          [(4) Tenant-based rental assistance.--
                  [(A) Administering entities.--Tenant-based 
                rental assistance provided under subsection 
                (b)(1) may be provided only through a public 
                housing agency that has submitted and had 
                approved a plan under section 7(d) of the 
                United States Housing Act of 1937 (42 U.S.C. 
                1437e(d)) that provides for such assistance, or 
                through a private nonprofit organization. A 
                public housing agency shall be eligible to 
                apply under this section only for the purposes 
                of providing such tenant-based rental 
                assistance.
                  [(B) Program rules.--Tenant-based rental 
                assistance under subsection (b)(1) shall be 
                made available to eligible persons with 
                disabilities and administered under the same 
                rules that govern tenant-based rental 
                assistance made available under section 8 of 
                the United States Housing Act of 1937, except 
                that the Secretary may waive or modify such 
                rules, but only to the extent necessary to 
                provide for administering such assistance under 
                subsection (b)(1) through private nonprofit 
                organizations rather than through public 
                housing agencies.
                  [(C) Allocation of assistance.--In 
                determining the amount of assistance provided 
                under subsection (b)(1) for a private nonprofit 
                organization or public housing agency, the 
                Secretary shall consider the needs and 
                capabilities of the organization or agency, in 
                the case of a public housing agency, as 
                described in the plan for the agency under 
                section 7 of the United States Housing Act of 
                1937.]
  (e) [Term of Commitment] Program Requirements.--
          [(1) Use limitations.--All units in housing assisted 
        under subsection (b)(2) shall be made available for 
        occupancy by very low-income persons with disabilities 
        for not less than 40 years.]
          (1) Use restrictions.--
                  (A) Term.--Any project for which a capital 
                advance is provided under subsection (d)(1) 
                shall be operated for not less than 40 years as 
                supportive housing for persons with 
                disabilities, in accordance with the 
                application for the project approved by the 
                Secretary and shall, during such period, be 
                made available for occupancy only by very low-
                income persons with disabilities.
                  (B) Conversion.--If the owner of a project 
                requests the use of the project for the direct 
                benefit of very low-income persons with 
                disabilities and, pursuant to such request the 
                Secretary determines that a project is no 
                longer needed for use as supportive housing for 
                persons with disabilities, the Secretary may 
                approve the request and authorize the owner to 
                convert the project to such use.
          (2) Contract terms.--The initial term of a contract 
        entered into under subsection (d)(2) shall be 240 
        months, except that, in the case of the sponsor of a 
        project assisted with any low-income housing tax credit 
        pursuant to section 42 of the Internal Revenue Code of 
        1986 or with any tax-exempt housing bonds, the contract 
        shall have an initial term of not be less than 360 
        months and shall provide funding for a term of 60 
        months. The Secretary shall, to the extent approved in 
        appropriation Acts, [extend any expiring contract] upon 
        expiration of a contract (or any renewed contract), 
        renew such contract for a term of not less than 60 
        months. In order to facilitate the orderly extension of 
        expiring contracts, the Secretary is authorized to make 
        commitments to extend expiring contracts during the 
        year prior to the date of expiration.
          (3) Limitation on use of funds.--No assistance 
        received under this section (or any State or local 
        government funds used to supplement such assistance) 
        may be used to replace other State or local funds 
        previously used, or designated for use, to assist 
        persons with disabilities.
          (4) Multifamily projects.--
                  (A) Limitation.--Except as provided in 
                subparagraph (B), of the total number of 
                dwelling units in any multifamily housing 
                project (including any condominium or 
                cooperative housing project) containing any 
                unit for which assistance is provided from a 
                capital grant under subsection (d)(1) made 
                after the date of the enactment of the Frank 
                Melville Supportive Housing Investment Act of 
                2008, the aggregate number that are used for 
                persons with disabilities, including supportive 
                housing for persons with disabilities, or to 
                which any occupancy preference for persons with 
                disabilities applies, may not exceed 25 percent 
                of such total.
                  (B) Exception.--Subparagraph (A) shall not 
                apply in the case of any project that is a 
                group home or independent living facility.
  (f) Applications.--Funds made available under subsection 
(b)(2) shall be allocated by the Secretary among approvable 
applications submitted by private nonprofit organizations. 
Applications for assistance under subsection (b)(2) shall be 
submitted in such form and in accordance with such procedures 
as the Secretary shall establish. Such applications shall 
contain--
          (1) * * *

           *       *       *       *       *       *       *

          (3) a supportive service plan that contains--
                  (A) * * *
                  (B) assurances that persons with disabilities 
                occupying such housing will [receive] be 
                offered supportive services based on their 
                individual needs;
                  [(C) evidence of the applicant's (or a 
                designated service provider's) experience in 
                providing such supportive services;]
                  (C) evidence of the applicant's experience 
                in--
                          (i) providing such supportive 
                        services; or
                          (ii) creating and managing structured 
                        partnerships with service providers for 
                        the delivery of appropriate community-
                        based services;
                  (D) a description of the manner in which such 
                services will be provided to [such persons, 
                including evidence of such residential 
                supervision as the Secretary determines is 
                necessary to facilitate the adequate provision 
                of such services] tenants; and
                  (E) identification of the extent of other 
                Federal, and State and local funds available to 
                assist in the provision of such services;
          (4) a certification from the appropriate State or 
        local agency (as determined by the Secretary) that the 
        provision of the services identified in paragraph (3) 
        are well designed to serve the [special] housing and 
        community-based services needs of persons with 
        disabilities;

           *       *       *       *       *       *       *

  (g) [Selection Criteria.--] Selection Criteria and 
Processing.--(1) Selection Criteria.--The Secretary shall 
establish selection criteria for assistance under this section, 
which shall include--
          [(1)] (A) the ability of the applicant to develop and 
        operate the proposed housing;
          [(2)] (B) the need for housing for persons with 
        disabilities in the area to be served;
          [(3)] (C) the extent to which the proposed design of 
        the housing will meet the special needs of persons with 
        disabilities;
          [(4)] (D) the extent to which the applicant has 
        demonstrated that [the necessary supportive services 
        will be provided] appropriate supportive services will 
        be made available on a consistent, long-term basis;
          [(5) the extent to which the proposed design of the 
        housing will accommodate the provision of such 
        services;]
          (E) the extent to which the location and design of 
        the proposed project will facilitate the provision of 
        community-based supportive services and address other 
        basic needs of persons with disabilities, including 
        access to appropriate and accessible transportation, 
        access to community services agencies, public 
        facilities, and shopping;
          (F) the extent to which the per-unit cost of units to 
        be assisted under this section will be supplemented 
        with resources from other public and private sources;
          [(6)] (G) the extent to which the applicant has 
        control of the site of the proposed housing; and
          [(7)] (H) such other factors as the Secretary 
        determines to be appropriate to ensure that funds made 
        available under this section are used effectively.
  (2) Delegated processing.--
          (A) In issuing a capital advance under subsection 
        (d)(1) for any multifamily project (but not including 
        any project that is a group home or independent living 
        facility) for which financing for the purposes 
        described in the last sentence of subsection (b) is 
        provided by a combination of the capital advance and 
        sources other than this section, within 30 days of 
        award of the capital advance, the Secretary shall 
        delegate review and processing of such projects to a 
        State or local housing agency that--
                  (i) is in geographic proximity to the 
                property;
                  (ii) has demonstrated experience in and 
                capacity for underwriting multifamily housing 
                loans that provide housing and supportive 
                services;
                  (iii) may or may not be providing low-income 
                housing tax credits in combination with the 
                capital advance under this section; and
                  (iv) agrees to issue a firm commitment within 
                12 months of delegation.
          (B) The Secretary shall retain the authority to 
        process capital advances in cases in which no State or 
        local housing agency has applied to provide delegated 
        processing pursuant to this paragraph or no such agency 
        has entered into an agreement with the Secretary to 
        serve as a delegated processing agency.
          (C) An agency to which review and processing is 
        delegated pursuant to subparagraph (A) may assess a 
        reasonable fee which shall be included in the capital 
        advance amounts and may recommend project rental 
        assistance amounts in excess of those initially awarded 
        by the Secretary. The Secretary shall develop a 
        schedule for reasonable fees under this subparagraph to 
        be paid to delegated processing agencies, which shall 
        take into consideration any other fees to be paid to 
        the agency for other funding provided to the project by 
        the agency, including bonds, tax credits, and other gap 
        funding.
          (D) Under such delegated system, the Secretary shall 
        retain the authority to approve rents and development 
        costs and to execute a capital advance within 60 days 
        of receipt of the commitment from the State or local 
        agency. The Secretary shall provide to such agency and 
        the project sponsor, in writing, the reasons for any 
        reduction in capital advance amounts or project rental 
        assistance and such reductions shall be subject to 
        appeal.
  (h) Development Cost Limitations.--
          (1) [In general] Group homes.--The Secretary shall 
        periodically establish development cost limitations by 
        market area for [various types and sizes] group homes 
        of supportive housing for persons with disabilities by 
        publishing a notice of the cost limitations in the 
        Federal Register. The cost limitations shall reflect--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(E) the cost of congregate space necessary 
                to accommodate the provision of supportive 
                services to persons with disabilities;]
                  [(F)] (E) if the housing is newly 
                constructed, the cost of meeting the energy 
                efficiency standards promulgated by the 
                Secretary in accordance with section 109 of the 
                Cranston-Gonzalez National Affordable Housing 
                Act; and
                  [(G)] (F) the cost of land, including 
                necessary site improvement.

           *       *       *       *       *       *       *

          (3) Annual adjustments.--The Secretary shall adjust 
        the cost limitation established pursuant to paragraph 
        (1) not less than once annually to reflect changes in 
        the general level of acquisition, construction, 
        reconstruction, or rehabilitation costs.

           *       *       *       *       *       *       *

          (6) Applicability of home program cost limitations.--
                  (A) In general.--The provisions of section 
                212(e) of the Cranston-Gonzalez National 
                Affordable Housing Act (42 U.S.C. 12742(e)) and 
                the cost limits established by the Secretary 
                pursuant to such section with respect to the 
                amount of funds under subtitle A of title II of 
                such Act that may be invested on a per unit 
                basis, shall apply to supportive housing 
                assisted with a capital advance under 
                subsection (d)(1) and the amount of funds under 
                such subsection that may be invested on a per 
                unit basis.
                  (B) Waivers.--The Secretary shall provide for 
                waiver of the cost limits applicable pursuant 
                to subparagraph (A)--
                          (i) in the cases in which the cost 
                        limits established pursuant to section 
                        212(e) of the Cranston-Gonzalez 
                        National Affordable Housing Act may be 
                        waived; and
                          (ii) to provide for--
                                  (I) the cost of special 
                                design features to make the 
                                housing accessible to persons 
                                with disabilities;
                                  (II) the cost of special 
                                design features necessary to 
                                make individual dwelling units 
                                meet the special needs of 
                                persons with disabilities; and
                                  (III) the cost of providing 
                                the housing in a location that 
                                is accessible to public 
                                transportation and community 
                                organizations that provide 
                                supportive services to persons 
                                with disabilities.
  [(i) Tenant Selection.--(1) An owner shall adopt written 
tenant selection procedures that are satisfactory to the 
Secretary as (A) consistent with the purpose of improving 
housing opportunities for very low-income persons with 
disabilities; and (B) reasonably related to program eligibility 
and an applicant's ability to perform the obligations of the 
lease. Owners shall promptly notify in writing any rejected 
applicant of the grounds for any rejection.
  [(2) Notwithstanding any other provision of law, an owner 
may, with the approval of the Secretary, limit occupancy within 
housing developed under this section to persons with 
disabilities who have similar disabilities and require a 
similar set of supportive services in a supportive housing 
environment.]
  (i) Admission and Occupancy.--
          (1) Tenant selection.--
                  (A) Procedures.--An owner shall adopt written 
                tenant selection procedures that are 
                satisfactory to the Secretary as (i) consistent 
                with the purpose of improving housing 
                opportunities for very low-income persons with 
                disabilities; and (ii) reasonably related to 
                program eligibility and an applicant's ability 
                to perform the obligations of the lease. Owners 
                shall promptly notify in writing any rejected 
                applicant of the grounds for any rejection.
                  (B) Requirement for occupancy.--Occupancy in 
                dwelling units provided assistance under this 
                section shall be available only to persons with 
                disabilities and households that include at 
                least one person with a disability.
                  (C) Availability.--Except only as provided in 
                subparagraph (D), occupancy in dwelling units 
                in housing provided with assistance under this 
                section shall be available to all persons with 
                disabilities eligible for such occupancy 
                without regard to the particular disability 
                involved.
                  (D) Limitation on occupancy.--Notwithstanding 
                any other provision of law, the owner of 
                housing developed under this section may, with 
                the approval of the Secretary, limit occupancy 
                within the housing to persons with disabilities 
                who can benefit from the supportive services 
                offered in connection with the housing.
          (2) Tenant protections.--
                  (A) Lease.--The lease between a tenant and an 
                owner of housing assisted under this section 
                shall be for not less than one year, and shall 
                contain such terms and conditions as the 
                Secretary shall determine to be appropriate.
                  (B) Termination of tenancy.--An owner may not 
                terminate the tenancy or refuse to renew the 
                lease of a tenant of a rental dwelling unit 
                assisted under this section except--
                          (i) for serious or repeated violation 
                        of the terms and conditions of the 
                        lease, for violation of applicable 
                        Federal, State, or local law, or for 
                        other good cause; and
                          (ii) by providing the tenant, not 
                        less than 30 days before such 
                        termination or refusal to renew, with 
                        written notice specifying the grounds 
                        for such action.
                  (C) Voluntary participation in services.--A 
                supportive service plan for housing assisted 
                under this section shall permit each resident 
                to take responsibility for choosing and 
                acquiring their own services, to receive any 
                supportive services made available directly or 
                indirectly by the owner of such housing, or to 
                not receive any supportive services.
  (j) Miscellaneous Provisions.--
          (1) * * *

           *       *       *       *       *       *       *

          [(4) Owner deposit.--The Secretary may require an 
        owner to deposit an amount not to exceed $10,000 in a 
        special escrow account to assure the owner's commitment 
        to the housing.]
          [(5)] (4) Notice of appeal.--The Secretary shall 
        notify an owner not less than 30 days prior to 
        canceling any reservation of assistance provided under 
        this section. During the 30-day period following the 
        receipt of a notice under the preceding sentence, an 
        owner may appeal the proposed cancellation. Such 
        appeal, including review by the Secretary, shall be 
        completed not later than 45 days after the appeal is 
        filed.
          [(6)] (5) Labor standards.--
                  (A) * * *

           *       *       *       *       *       *       *

          [(7)] (6) Use of project reserves.--Amounts for 
        project reserves for a project assisted under this 
        section may be used for costs, subject to reasonable 
        limitations as the Secretary determines appropriate, 
        for reducing the number of dwelling units in the 
        project. Such use shall be subject to the approval of 
        the Secretary to ensure that the use is designed to 
        retrofit units that are currently obsolete or 
        unmarketable.
  (k) Project Rental Assistance-Only Competitive Demonstration 
Program.--
          (1) Authority.--The Secretary shall carry out a 
        demonstration program under this subsection to expand 
        the supply of supportive housing for non-elderly adults 
        with disabilities, under which the Secretary shall make 
        funds available for project rental assistance pursuant 
        to paragraph (2) for eligible projects under paragraph 
        (3). The Secretary shall provide for State housing 
        finance agencies and other appropriate entities to 
        apply to the Secretary for such project rental 
        assistance funds, which shall be made available by such 
        agencies and entities for dwelling units in eligible 
        projects based upon criteria established by the 
        Secretary for the demonstration program under this 
        subsection. The Secretary may not require any State 
        housing finance agency or other entity applying for 
        project rental assistance funds under the demonstration 
        program to identify in such application the eligible 
        projects for which such funds will be used, and shall 
        allow such agencies and applicants to subsequently 
        identify such eligible projects pursuant to the making 
        of commitments described in paragraph (3)(B).
          (2) Project rental assistance.--
                  (A) Contract terms.--Project rental 
                assistance under the demonstration program 
                under this subsection shall be provided--
                          (i) in accordance with subsection 
                        (d)(2);
                          (ii) under a contract having an 
                        initial term of not less than 180 
                        months that provides funding for a term 
                        60 months, which funding shall be 
                        renewed upon expiration, subject to the 
                        availability of sufficient amounts in 
                        appropriation Acts.
                  (B) Limitation on units assisted.--Of the 
                total number of dwelling units in any 
                multifamily housing project containing any unit 
                for which project rental assistance under the 
                demonstration program under this subsection is 
                provided, the aggregate number that are 
                provided such project rental assistance, that 
                are used for supportive housing for persons 
                with disabilities, or to which any occupancy 
                preference for persons with disabilities 
                applies, may not exceed 25 percent of such 
                total.
                  (C) Prohibition of capital advances.--The 
                Secretary may not provide a capital advance 
                under subsection (d)(1) for any project for 
                which assistance is provided under the 
                demonstration program.
                  (D) Eligible population.--Project rental 
                assistance under the demonstration program 
                under this subsection may be provided only for 
                dwelling units for extremely low-income persons 
                with disabilities and extremely low-income 
                households that include at least one person 
                with a disability.
          (3) Eligible projects.--An eligible project under 
        this paragraph is a new or existing multifamily housing 
        project for which--
                  (A) the development costs are paid with 
                resources from other public or private sources; 
                and
                  (B) a commitment has been made--
                          (i) by the applicable State agency 
                        responsible for allocation of low-
                        income housing tax credits under 
                        section 42 of the Internal Revenue Code 
                        of 1986, for an allocation of such 
                        credits;
                          (ii) by the applicable participating 
                        jurisdiction that receives assistance 
                        under the HOME Investment Partnership 
                        Act, for assistance from such 
                        jurisdiction; or
                          (iii) by any Federal agency or any 
                        State or local government, for funding 
                        for the project from funds from any 
                        other sources.
          (4) State agency involvement.--Assistance under the 
        demonstration may be provided only for projects for 
        which the applicable State agency responsible for 
        health and human services programs, and the applicable 
        State agency designated to administer or supervise the 
        administration of the State plan for medical assistance 
        under title XIX of the Social Security Act, have 
        entered into such agreements as the Secretary considers 
        appropriate--
                  (A) to identify the target populations to be 
                served by the project;
                  (B) to set forth methods for outreach and 
                referral; and
                  (C) to make available appropriate services 
                for tenants of the project.
          (5) Use requirements.--In the case of any project for 
        which project rental assistance is provided under the 
        demonstration program under this subsection, the 
        dwelling units assisted pursuant to paragraph (2) shall 
        be operated for not less than 30 years as supportive 
        housing for persons with disabilities, in accordance 
        with the application for the project approved by the 
        Secretary, and such dwelling units shall, during such 
        period, be made available for occupancy only by persons 
        and households described in paragraph (2)(D).
          (6) Report.--Upon the expiration of the 5-year period 
        beginning on the date of the enactment of the Frank 
        Melville Supportive Housing Investment Act of 2008, the 
        Secretary shall submit to the Congress a report 
        describing the demonstration program under this 
        subsection, analyzing the effectiveness of the program, 
        including the effectiveness of the program compared to 
        the program for capital advances in accordance with 
        subsection (d)(1) (as in effect pursuant to the 
        amendments made by such Act), and making 
        recommendations regarding future models for assistance 
        under this section based upon the experiences under the 
        program.
  [(k)] (l) Definitions.--As used in this section--
          (1) The term ``group home'' means a single family 
        residential structure designed or adapted for occupancy 
        by not more than 8 persons with disabilities, which 
        provides a separate bedroom for each tenant of the 
        residence. [The Secretary may waive the project size 
        limitation contained in the previous sentence if the 
        applicant demonstrates that local market conditions 
        dictate the development of a larger project.] Not more 
        than 1 home may be located on any one site and no such 
        home may be located on a site contiguous to another 
        site containing such a home.
          [(2) The term ``person with disabilities'' means a 
        household composed of one or more persons at least one 
        of whom is an adult who has a disability. A person 
        shall be considered to have a disability if such person 
        is determined, pursuant to regulations issued by the 
        Secretary to have a physical, mental, or emotional 
        impairment which (A) is expected to be of long-
        continued and indefinite duration, (B) substantially 
        impedes his or her ability to live independently, and 
        (C) is of such a nature that such ability could be 
        improved by more suitable housing conditions. A person 
        shall also be considered to have a disability if such 
        person has a developmental disability as defined in 
        section 102 of the Developmental Disabilities 
        Assistance and Bill of Rights Act of 2000. The 
        Secretary shall prescribe such regulations as may be 
        necessary to prevent abuses in determining, under the 
        definitions contained in this paragraph, the 
        eligibility of families and persons for admission to 
        and occupancy of housing assisted under this section. 
        Notwithstanding the preceding provisions of this 
        paragraph, the term ``person with disabilities'' 
        includes two or more persons with disabilities living 
        together, one or more such persons living with another 
        person who is determined (under regulations prescribed 
        by the Secretary) to be important to their care or 
        well-being, and the surviving member or members of any 
        household described in the first sentence of this 
        paragraph who were living, in a unit assisted under 
        this section, with the deceased member of the household 
        at the time of his or her death.
          [(3) The term ``supportive housing for persons with 
        disabilities'' means housing that--
                  [(A) is designed to meet the special needs of 
                persons with disabilities, and
                  [(B) provides supportive services that 
                address the individual health, mental health or 
                other special needs of such persons.]
          (2)(A) The term ``person with disabilities'' means a 
        person who is 18 years of age or older and less than 62 
        years of age, who--
                  (i) has a disability as defined in section 
                223 of the Social Security Act,
                  (ii) 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
                  (iii) has a developmental disability as 
                defined in section 102 of the Developmental 
                Disabilities Assistance and Bill of Rights Act 
                of 2000.
  (B) 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 low-income housing under this 
title, solely on the basis of any drug or alcohol dependence. 
The Secretary shall consult with other appropriate Federal 
agencies to implement the preceding sentence.
  (C) The Secretary shall prescribe such regulations as may be 
necessary to prevent abuses in determining, under the 
definitions contained in this paragraph, the eligibility of 
families and persons for admission to and occupancy of housing 
assisted under this section. Notwithstanding the preceding 
provisions of this paragraph, the term ``person with 
disabilities'' includes two or more persons with disabilities 
living together, one or more such persons living with another 
person who is determined (under regulations prescribed by the 
Secretary) to be important to their care or well-being, and the 
surviving member or members of any household described in 
subparagraph (A) who were living, in a unit assisted under this 
section, with the deceased member of the household at the time 
of his or her death.
          (3) The term ``supportive housing for persons with 
        disabilities'' means dwelling units that--
                  (A) are designed to meet the permanent 
                housing needs of very low-income persons with 
                disabilities; and
                  (B) are located in housing that make 
                available supportive services that address the 
                individual health, mental health, or other 
                needs of such persons.
          (4) The term ``independent living facility'' means a 
        project designed for occupancy by not more than 24 
        persons with disabilities [(or such higher number of 
        persons as permitted under criteria that the Secretary 
        shall prescribe, subject to the limitation under 
        subsection (h)(6))] in separate dwelling units where 
        each dwelling unit includes a kitchen and a bath.
          (5) The term ``owner'' means a private nonprofit 
        organization that receives assistance under this 
        section to develop and operate [a project for] 
        supportive housing for persons with disabilities.
          (6) The term ``private nonprofit organization'' means 
        any institution or foundation--
                  (A)  * * *

           *       *       *       *       *       *       *

Such term includes a for-profit limited partnership the sole 
general partner of which is an organization meeting the 
requirements under subparagraphs (A), (B), (C), and (D) or a 
corporation controlled by an organization meeting the 
requirements under subparagraphs (A), (B), (C), and (D).

           *       *       *       *       *       *       *

  [(l)] (m) Allocation of Funds.--[(1) Allocation.--Of any 
amount made available for assistance under this section in any 
fiscal year, an amount shall be used for assistance under 
subsection (b)(2) that is not less than the amount made 
available in appropriation Acts for such assistance in the 
preceding year.]
          (1) Minimum allocation for multifamily projects.--The 
        Secretary shall establish a minimum percentage of the 
        amount made available for each fiscal year for capital 
        advances under subsection (d)(1) that shall be used for 
        multifamily projects subject to subsection (e)(4).
          (2) Capital advances.--Of any amounts made available 
        for assistance under subsection (b), such sums as may 
        be necessary shall be available for funding capital 
        advances in accordance with [subsection (c)(1)] 
        subsection (d)(1). Such amounts, the repayments from 
        such advances, and the proceeds from notes or 
        obligations issued under this section prior to the 
        enactment of this Act shall constitute a revolving fund 
        to be used by the Secretary in carrying out this 
        section.
          (3) Project rental assistance.--Of any amounts made 
        available for assistance under subsection (b), such 
        sums as may be necessary shall be available for funding 
        project rental assistance in accordance with 
        [subsection (c)(2)] subsection (d)(2). 
          [(4) Size limitation.--Of any amounts made available 
        for any fiscal year and used for capital advances or 
        project rental assistance under paragraphs (1) and (2) 
        of subsection (d), not more than 25 percent may be used 
        for supportive housing which contains more than 24 
        separate dwelling units.]
  [(m) Authorization of Appropriations.--There are authorized 
to be appropriated for providing assistance under this section 
such sums as may be necessary for each of fiscal years 2001, 
2002, and 2003.]
  (n) Authorization of Appropriations.--There is authorized to 
be appropriated for each of fiscal years 2008 through 2012 the 
following amounts:
          (1) Capital advance/prac program.--For providing 
        assistance pursuant to subsection (b), such sums as may 
        be necessary.
          (2) Demonstration program.--For carrying out the 
        demonstration program under subsection (k), such sums 
        as may be necessary to provide 2,500 incremental 
        dwelling units under such program in each of fiscal 
        years 2008 and 2009 and 5,000 incremental dwelling 
        units under such program in each of fiscal years 2010, 
        2011, and 2012.
  [(n)] (o) Effective Date and Applicability.--
          (1)  * * *

           *       *       *       *       *       *       *

  (p) Authorization of Appropriations for Section 8 
Assistance.--
          (1) In general.--There is authorized to be 
        appropriated for tenant-based rental assistance under 
        section 8(o) of the United States Housing Act of 1937 
        (42 U.S.C. 1437f(o)) for persons with disabilities in 
        fiscal year 2009 the amount necessary to provide a 
        number of incremental vouchers under such section that 
        is equal to the number of vouchers provided in fiscal 
        year 2008 under the tenant-based rental assistance 
        program under subsection (d)(4) of this section (as in 
        effect before the date of the enactment of the Frank 
        Melville Supportive Housing Investment Act of 2008).
          (2) Requirements upon turnover.--The Secretary shall 
        develop and issue, to public housing agencies that 
        receive voucher assistance made available under this 
        subsection and to public housing agencies that received 
        voucher assistance under section 8(o) of the United 
        States Housing Act of 1937 (42 U.S.C. 1437f(o)) for 
        non-elderly disabled families pursuant to appropriation 
        Acts for fiscal years 1997 through 2002 or any other 
        subsequent appropriations for incremental vouchers for 
        non-elderly disabled families, guidance to ensure that, 
        to the maximum extent possible, such vouchers continue 
        to be provided upon turnover to qualified persons with 
        disabilities or to qualified non-elderly disabled 
        families, respectively.

           *       *       *       *       *       *       *

                                  
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