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[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1248 Introduced in Senate (IS)]

107th CONGRESS
  1st Session
                                S. 1248

   To establish a National Housing Trust Fund in the Treasury of the 
   United States to provide for the development of decent, safe, and 
  affordable housing for low-income families, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 25, 2001

    Mr. Kerry (for himself, Mr. Chafee, Mr. Reed, Mr. Jeffords, Mr. 
  Sarbanes, Mr. Leahy, Mr. Wellstone, Mr. Dayton, Mrs. Feinstein, Mr. 
Levin, Mr. Schumer, Mr. Durbin, Ms. Stabenow, Mrs. Boxer, Mr. Kennedy, 
  Mr. Corzine, and Mr. Dodd) introduced the following bill; which was 
read twice and referred to the Committee on Banking, Housing, and Urban 
                                Affairs

_______________________________________________________________________

                                 A BILL

 
   To establish a National Housing Trust Fund in the Treasury of the 
   United States to provide for the development of decent, safe, and 
  affordable housing for low-income families, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Affordable Housing Trust 
Fund Act of 2001''.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to fill the growing gap in the national ability to 
        build affordable housing by using profits generated by Federal 
        housing programs to fund additional housing activities, and not 
        supplant existing housing appropriations;
            (2) to enable rental housing to be built for those families 
        with the greatest need in areas with the greatest opportunities 
        in mixed-income settings and to promote homeownership for low-
        income families; and
            (3) to provide for approximately 1,500,000 additional 
        affordable, low-income housing units over the next 10 years.

SEC. 3. DEFINITIONS.

    (a) Definitions.--In this Act:
            (1) Adjusted income.--The term ``adjusted income'' has the 
        same meaning as in section 3(b) of the United States Housing 
        Act of 1937 (42 U.S.C. 1437a(b)).
            (2) Affordable housing.--The term ``affordable housing'' 
        means housing for rental that bears rents not greater than the 
        lesser of--
                    (A) the existing fair market rent for comparable 
                units in the area, as established by the Secretary 
                under section 8 of the United States Housing Act of 
                1937 (42 U.S.C. 1437f); or
                    (B) a rent that does not exceed 30 percent of the 
                adjusted income of a family whose income equals 65 
                percent of the median income for the area, as 
                determined by the Secretary, with an adjustment for the 
                number of bedrooms in the unit, except that the 
                Secretary may establish income ceilings higher or lower 
                than 65 percent of the median for the area on the basis 
                of the findings of the Secretary that such variations 
                are necessary because of the prevailing levels of 
                construction costs or fair market rents, or unusually 
                high or low family incomes.
            (3) Continued assistance rental subsidy program.--The term 
        ``continued assistance rental subsidy program'' means a program 
        under which--
                    (A) project-based assistance is provided for not 
                more than 3 years to a family in an affordable housing 
                unit that was developed with assistance made available 
                under subsection (b) or (c) of section 5 in a project 
                that partners with a public housing agency, which 
                agency agrees to provide the assisted family with a 
                priority for the receipt of a voucher under section 
                8(o) of the United States Housing Act of 1937 (42 
                U.S.C. 1437f(o)) if the family chooses to move after an 
                initial year of occupancy and the public housing agency 
                agrees to refer eligible voucher holders to the 
                property when vacancies occur; and
                    (B) after 3 years, subject to appropriations, 
                continued assistance is provided under section 8(o) of 
                the United States Housing Act of 1937 (42 U.S.C.  
1437f(o)), notwithstanding any provision to the contrary in that 
section, if administered to provide families with the option of 
continued assistance with tenant-based vouchers, if such a family 
chooses to move after an initial year of occupancy and the public 
housing agency agrees to refer eligible voucher holders to the property 
when vacancies occur.
            (4) Eligible activities.--The term ``eligible activities'' 
        means activities relating to the development of affordable 
        housing, including--
                    (A) the construction of new housing;
                    (B) the acquisition of real property;
                    (C) site preparation and improvement, including 
                demolition;
                    (D) substantial rehabilitation of existing housing; 
                and
                    (E) rental subsidy, in the same manner as voucher 
                assistance under section 8(o)(13) of the United States 
                Housing Act of 1937 (42 U.S.C. 1437f(o)(13)).
            (5) Eligible entity.--The term ``eligible entity'' includes 
        any public or private nonprofit or for-profit entity, unit of 
        local government, regional planning entity, and any other 
        entity engaged in the development of affordable housing, as 
        determined by the Secretary.
            (6) Eligible intermediary.--The term ``eligible 
        intermediary'' means--
                    (A) a nonprofit community development corporation;
                    (B) a community development financial institution 
                (as defined in section 103 of the Community Development 
                Banking and Financial Institutions Act of 1994 (12 
                U.S.C. 4702));
                    (C) a State or local trust fund;
                    (D) any entity eligible for assistance under 
                section 4 of the HUD Demonstration Act of 1993 (42 
                U.S.C. 9816 note);
                    (E) a national, regional, or statewide nonprofit 
                organization; and
                    (F) any other appropriate nonprofit entity, as 
                determined by the Secretary.
            (7) Extremely low-income families.--The term ``extremely 
        low-income families'' means very low-income families (as 
        defined in section 3(b) of the United States Housing Act of 
        1937 (42 U.S.C. 1437a(b)) whose incomes do not exceed 30 
        percent of the median family income for the area, as determined 
        by the Secretary with adjustments for smaller and larger 
        families, except that the Secretary may establish income 
        ceilings higher or lower than 30 percent of the median for the 
        area on the basis of the findings of the Secretary that such 
        variations are necessary because of unusually high or low 
        family incomes.
            (8) Low-income families.--The term ``low-income families'' 
        has the same meaning as in section 3(b) of the United States 
        Housing Act of 1937 (42 U.S.C. 1437a(b)).
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (10) State.--The term ``State'' has the same meaning as in 
        section 3(b) of the United States Housing Act of 1937 (42 
        U.S.C. 1437a(b)).

SEC. 4. NATIONAL HOUSING TRUST FUND.

    (a) Establishment of Trust Fund.--There is established in the 
Treasury of the United States a trust fund to be known as the 
``National Affordable Housing Trust Fund'' (referred to in this Act as 
the ``Trust Fund'') for the purpose of promoting the development of 
affordable housing.
    (b) Deposits to the Trust Fund.--For fiscal year 2002, and each 
fiscal year thereafter, there is appropriated to the Trust Fund an 
amount equal to the sum of--
            (1) any revenue generated by the Mutual Mortgage Insurance 
        Fund of the Federal Housing Administration in excess of the 
        amount necessary for the Mutual Mortgage Insurance Fund to 
        maintain a capital ratio of 3 percent for the preceding fiscal 
        year; and
            (2) any revenue generated by the Government National 
        Mortgage Association in excess of the amount necessary to pay 
        the administrative costs and expenses necessary to ensure the 
        safety and soundness of the Government National Mortgage 
        Association for the preceding fiscal year, as determined by the 
        Secretary.
    (c) Expenditures From the Trust Fund.--For fiscal year 2002, and 
each fiscal year thereafter, amounts appropriated to the Trust Fund 
shall be available to the Secretary of Housing and Urban Development 
for use in accordance with section 5.

SEC. 5. ADMINISTRATION OF NATIONAL AFFORDABLE HOUSING TRUST FUND.

    (a) Allocation to States and Eligible Intermediaries.--For fiscal 
year 2002, and each fiscal year thereafter, of the total amount made 
available to the Secretary from the Trust Fund under section 4(c), the 
Secretary shall allocate--
            (1) 75 percent to award grants to States in accordance with 
        subsection (b) of this section; and
            (2) 25 percent to award grants to eligible intermediaries 
        in accordance with subsection (c) of this section.
    (b) Grants to States.--
            (1) In general.--Subject to paragraph (2) of this 
        subsection, from the amount made available for each fiscal year 
        under subsection (a)(1), the Secretary shall award grants to 
        States, in accordance with an allocation formula established by 
        the Secretary, that is based on the pro rata share of each 
        State of the total need among all States for an increased 
        supply of affordable housing, as determined on the basis of--
                    (A) the number and percentage of families in the 
                State that live in substandard housing;
                    (B) the number and percentage of families in the 
                State that pay more than 50 percent of their annual 
                income for housing costs;
                    (C) the number and percentage of persons living at 
                or below the poverty level in the State;
                    (D) the cost of developing or carrying out 
                substantial rehabilitation of housing in the State;
                    (E) the age of the multifamily housing stock in the 
                State; and
                    (F) such other factors as the Secretary determines 
                to be appropriate.
            (2) Grant amount.--
                    (A) In general.--The amount of a grant award to a 
                State under this subsection shall be equal to the 
                lesser of--
                            (i) 4 times the amount of assistance 
                        provided by the State from non-Federal sources; 
                        and
                            (ii) the allocation determined in 
                        accordance with paragraph (1).
                    (B) Non-federal sources.--For purposes of this 
                section, non-Federal sources shall include--
                            (i) 50 percent of the funds allocable to 
                        tax credits allocated under section 42 of the 
                        Internal Revenue Code of 1986;
                            (ii) 50 percent of the revenue from 
                        mortgage revenue bonds issued under section 143 
                        of the Internal Revenue Code of 1986;
                            (iii) 50 percent of the proceeds from the 
                        sale of tax exempt bonds;
                            (iv) funds provided under part A of title 
                        IV of the Social Security Act (42 U.S.C. 601 et 
                        seq.); and
                            (v) such other sources as the Secretary 
                        determines to be appropriate.
            (3) Award of state allocation to certain entities.--
                    (A) In general.--If the amount provided by a State 
                from non-Federal sources is less than 25 percent of the 
                amount that would be awarded to the State under this 
                subsection  based on the allocation formula described 
in paragraph (1), not later than 60 days after the date on which the 
Secretary determines that the State is not eligible for the full 
allocation determined under paragraph (1), the Secretary shall issue a 
notice regarding the availability of the funds for which the State is 
ineligible.
                    (B) Applications.--Not later than 9 months after 
                the date of publication of a notice of funding 
                availability under subparagraph (A), a nonprofit or 
                public entity (or a consortium thereof, which may 
                include units of local government working together on a 
                regional basis) may submit to the Secretary an 
                application for the available assistance or a portion 
                of the available assistance, which application shall 
                include--
                            (i) a certification that the applicant will 
                        provide assistance in an amount equal to 25 
                        percent of the amount of assistance made 
                        available to the applicant under this 
                        paragraph; and
                            (ii) an allocation plan that meets the 
                        requirements of paragraph (4)(B) for use or 
                        distribution in the State of any assistance 
                        made available to the applicant under this 
                        paragraph and the assistance provided by the 
                        applicant for purposes of clause (i).
                    (C) Award of assistance.--The Secretary shall award 
                the amount that is not awarded to a State by operation 
                of paragraph (2) to 1 or more applicants that meet the 
                requirements of subparagraph (B) of this paragraph and 
                that are selected by the Secretary based on selection 
                criteria, which shall be established by the Secretary 
                by regulation.
            (4) Distribution to eligible entities.--
                    (A) In general.--Of the amount that a State 
                receives under a grant award under this subsection and 
                the assistance provided by the State from non-Federal 
                sources for purposes of paragraph (2)(A) to eligible 
                entities for the purpose of assisting those entities in 
                carrying out eligible activities in the State, each 
                State shall distribute--
                            (i) not less than 75 percent to eligible 
                        entities for eligible activities relating to 
                        the development of affordable housing for 
                        rental by extremely low-income families in the 
                        State; and
                            (ii) any amount remaining after a 
                        distribution under clause (i) to eligible 
                        entities for eligible activities in a census 
                        tract described in subsection (c)(3)(B)(ii)(II) 
                        relating to the development of affordable 
                        housing for rental by low-income families in 
                        the State, or for homeownership assistance for 
                        low-income families in the State.
                    (B) Allocation plan.--Each State shall have, after 
                giving notice to the public, an opportunity for public 
                comment and consideration of public comments received, 
                and shall establish an allocation plan for the 
                distribution of assistance under this paragraph, which 
                shall be submitted to the Secretary and shall be made 
                available to the public by the State, and which shall 
                include--
                            (i) application requirements for eligible 
                        entities seeking to receive assistance under 
                        this paragraph, including a requirement that 
                        each application include--
                                    (I) a certification by the 
                                applicant that any housing developed 
                                with assistance under this paragraph 
                                will remain affordable for extremely 
                                low-income families or low-income 
                                families, as applicable, for not less 
                                than 40 years;
                                    (II) a certification by the 
                                applicant that the tenant contribution 
                                towards rent for a family residing in a 
                                unit developed with assistance under 
                                this paragraph will not exceed 30 
                                percent of the adjusted income of that 
                                family; and
                                    (III) a certification by the 
                                applicant that the owner of a project 
                                in which any housing developed with 
                                assistance under this paragraph is 
                                located will make a percentage of units 
                                in the project available to families 
                                assisted under the voucher program 
                                under section 8(o) of the United States 
                                Housing Act of 1937 (42 U.S.C. 
                                1437f(o)), either by means of a 
                                contract with a public housing agency 
                                under paragraph (13) of that section or 
                                on the same basis as other families 
                                eligible for the housing (except that 
                                only the expected share of rent of the 
                                voucher holder shall be considered, and 
                                the screening criteria of the owner 
                                shall not have a disparate impact on 
                                the voucher holder), which percentage 
                                shall not be less than the percentage 
                                of the total cost of developing or 
                                rehabilitating the project that is 
                                funded with assistance under this 
                                paragraph, or 25 percent of the total 
                                units in the project, whichever is 
                                lower; and
                            (ii) factors for consideration in selecting 
                        among applicants that meet the application 
                        requirements, which shall give preference to 
                        applicants based on--
                                    (I) the amount of assistance for 
                                the eligible activities leveraged by 
                                the applicant from private and other 
                                non-Federal sources, including 
                                assistance made available under section 
                                8 of the United States Housing Act of 
                                1937 (42 U.S.C. 1437f) that is devoted 
                                to the project in which the housing to 
                                be developed with assistance under this 
                                paragraph is located;
                                    (II) the extent of local assistance 
                                that will be provided in carrying out 
                                the eligible activities, including--
                                            (aa) financial assistance; 
                                        and
                                            (bb) the extent to which 
                                        the applicant has worked with 
                                        the unit of local government in 
                                        which the housing will be 
                                        located to address issues of 
                                        siting and exclusionary zoning 
                                        or other policies that are 
                                        barriers to affordable housing;
                                    (III) the degree to which the 
                                development in which the housing will 
                                be located is mixed-income;
                                    (IV) whether the housing will be 
                                located in a census tract in which the 
                                poverty rate is less than 20 percent;
                                    (V) whether the housing will be 
                                located in a community undergoing 
                                revitalization;
                                    (VI) the accessibility of jobs, 
                                including lower skilled jobs, to the 
                                project;
                                    (VII) the extent to which the 
                                applicant demonstrates the ability to 
                                maintain units as affordable for 
                                extremely low-income or low-income 
                                families, as applicable, through the 
                                use of assistance made available under 
                                this paragraph, assistance leveraged 
                                from non-Federal sources, assistance 
                                made available under section 8 of the 
                                United States Housing Act of 1937 (42 
                                U.S.C. 1437f), State or local 
                                assistance, programs to increase tenant 
                                income, cross-subsidization, and any 
                                other resources; and
                                    (VIII) whether the development will 
                                house families that need not fewer than 
                                3 bedrooms or provide accessible units 
                                for the disabled, unless the allocation 
                                plan indicates that the State does not 
                                have a significant need for those types 
                                of units.
                    (C) Forms of assistance.--
                            (i) In general.--Assistance distributed 
                        under this paragraph may be in the form of 
                        capital grants, non-interest bearing or low-
                        interest loans or advances, deferred payment 
                        loans, guarantees, and any other form of 
                        assistance approved by the Secretary.
                            (ii) Repayments.--If a State awards 
                        assistance under this paragraph in the form of 
                        a loan or other mechanism by which funds are 
                        later repaid to the State, any repayments 
                        received by the State shall be distributed by 
                        the State in accordance with the allocation 
                        plan described in subparagraph (B) in the 
                        following fiscal year.
                    (D) Coordination with other assistance.--In 
                distributing assistance under this paragraph, each 
                State shall, to the maximum extent practicable, 
                coordinate the distribution with the provision of other 
                affordable housing assistance by the State, including--
                            (i) housing credit dollar amounts allocated 
                        by the State under section 42(h) of the 
                        Internal Revenue Code of 1986;
                            (ii) assistance made available under the 
                        HOME Investment Partnerships Act or the 
                        community development block grant program; and
                            (iii) private activity bonds.
    (c) National Competition.--
            (1) In general.--From the amount made available for each 
        fiscal year under subsection (a)(2), the Secretary shall award 
        grants on a competitive basis to eligible intermediaries, which 
        shall be used in accordance with paragraph (3) of this 
        subsection.
            (2) Application requirements and selection criteria.--The 
        Secretary, by regulation, shall establish application 
        requirements and selection criteria for the award of 
        competitive grants to eligible intermediaries under this 
        subsection, which criteria shall include--
                    (A) the ability of the eligible intermediary to 
                meet the housing needs of low-income families on a 
                national or regional scope;
                    (B) the capacity of the eligible intermediary to 
                use the grant award in accordance with paragraph (3), 
                based on the past performance and management of the 
                applicant; and
                    (C) the extent to which the eligible intermediary 
                has leveraged funding from private and other non-
                Federal sources for the eligible activities.
            (3) Use of grant award.--
                    (A) In general.--Except as provided in subparagraph 
                (B), each eligible intermediary that receives a grant 
                award under this subsection shall ensure that, of the 
                amount made available under the grant--
                            (i) 75 percent shall be used for eligible 
                        activities relating to the development of 
                        affordable housing for rental by extremely low-
                        income families; and
                            (ii) 25 percent shall be used for eligible 
                        activities relating to the development of 
                        affordable housing for rental by low-income 
                        families, or for homeownership assistance for 
                        low-income families.
                    (B) Exception.--
                            (i) In general.--If the amount made 
                        available under this subsection is used for a 
                        project described in clause (ii), subject to 
                        the requirements of subparagraph (A)(i), an 
                        eligible intermediary may use the grant amount 
                        for eligible activities relating to the 
                        development of housing for rental by families 
                        whose incomes are less than 60 percent of the 
                        area median income, and for homeownership 
                        activities for families whose incomes are less 
                        than 80 percent of the area median income.
                            (ii) Project contributing to a concerted 
                        community revitalization plan.--A project is 
                        described in this clause if--
                                    (I) it is located in a community 
                                undergoing concerted revitalization and 
                                is contributing to a community 
                                revitalization plan; and
                                    (II) it is located in a census 
                                tract in which--
                                            (aa) the median household 
                                        income is less than 60 percent 
                                        of the area median income; or
                                            (bb) the rate of poverty is 
                                        greater than 20 percent.
                    (C) Plan of use.--Each eligible intermediary that 
                receives a grant award under this subsection shall 
                establish a plan for the use or distribution of the 
                amount made available under the grant, which shall be 
                submitted to the Secretary, and which shall include 
                information relating to the manner in which the 
                eligible intermediary will either use or distribute 
                that amount, including--
                            (i) a certification that assistance made 
                        available under this subsection will be used to 
                        supplement assistance leveraged from private 
                        and other non-Federal sources, including 
                        assistance made available under section 8 of 
                        the United States Housing Act of 1937 (42 
                        U.S.C. 1437f) that is devoted to the project in 
                        which the housing to be developed is located;
                            (ii) a certification that local assistance 
                        will be provided in carrying out the eligible 
                        activities, which may include--
                                    (I) financial assistance; and
                                    (II) a good faith effort to work 
                                with the unit of local government in 
                                which the housing will be located to 
                                address issues of siting and 
                                exclusionary zoning or other policies 
                                that are barriers to affordable 
                                housing;
                            (iii) a certification that any housing 
                        developed with assistance under this subsection 
                        will remain affordable for extremely low-income 
                        families or low-income families, as applicable, 
                        for not less than 40 years;
                            (iv) a certification that any housing 
                        developed by the applicant with assistance 
                        under this subsection will be located--
                                    (I) in a mixed-income development 
                                in a census tract having a poverty rate 
                                of not more than 20 percent, and near 
                                employment and other opportunities for 
                                low-income families; or
                                    (II) in a community undergoing 
                                revitalization;
                            (v) a certification that the tenant 
                        contribution towards rent for a family residing 
                        in a unit developed with assistance under this 
                        paragraph will not exceed 30 percent of the 
                        adjusted income of that family; and
                            (vi) a certification by the applicant that 
                        the owner of a project in which any housing 
                        developed with assistance under this subsection 
                        is located will make a percentage of units in 
                        the project available to families assisted 
                        under the voucher program under section 8(o) of 
                        the United States Housing Act of 1937 (42 
                        U.S.C.  1437f(o)), either by means of a 
contract with a public housing agency under paragraph (13) of that 
section or on the same basis as other families eligible for the housing 
(except that only the expected share of rent of the voucher holder 
shall be considered, and the screening criteria of the owner shall not 
have a disparate impact on the voucher holder), which percentage shall 
not be less than the percentage of the total cost of developing or 
rehabilitating the project that is funded with assistance under this 
subsection, or 25 percent of the total units in the project, whichever 
is lower.
                    (D) Forms of assistance.--
                            (i) In general.--An eligible intermediary 
                        may distribute the amount made available under 
                        a grant under this subsection in the form of 
                        capital grants, non-interest bearing or low-
                        interest loans or advances, deferred payment 
                        loans, guarantees, and other forms of 
                        assistance.
                            (ii) Repayments.--If an eligible 
                        intermediary awards assistance under this 
                        subsection in the form of a loan or other 
                        mechanism by which funds are later repaid to 
                        the eligible intermediary, any repayments 
                        received by the eligible intermediary shall be 
                        distributed by the eligible intermediary in 
                        accordance with the plan of use described in 
                        subparagraph (C) in the following fiscal year.
    (d) Treatment Under the Internal Revenue Code.--
            (1) In general.--Assistance provided under this Act with 
        respect to any building shall not be taken into account under 
        section 42(i)(2)(D) of the Internal Revenue Code of 1986, if 40 
        percent or more of the residential units in the building are 
        occupied by individuals whose income is 50 percent or less of 
        the area median gross income. Section 42(d)(5)(C) of that Code 
        shall not apply to any building to which the preceding sentence 
        applies.
            (2) Special rule for certain high-cost housing areas.--In 
        the case of a building located in a city described in section 
        142(d)(6) of the Internal Revenue Code of 1986, paragraph (1) 
        shall be applied by substituting ``25 percent'' for ``40 
        percent''.

SEC. 6. REGULATIONS.

    Not later than 6 months after the date of enactment of this Act, 
the Secretary of Housing and Urban Development shall promulgate 
regulations to carry out this Act, including requirements relating to 
the reporting and collection of information necessary to enforce the 
provisions of this Act.

SEC. 7. FEDERAL FINANCIAL ASSISTANCE.

    For the purpose of applying the prohibitions against discrimination 
on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. 
6101 et seq.), on the basis of disability under section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794), on the basis of sex under 
title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), 
or on the basis of race, color, or national origin under title VI of 
the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), programs and 
activities funded or otherwise financially assisted in whole or in part 
under this Act are considered to be programs and activities receiving 
Federal financial assistance, and education programs and activities 
receiving Federal financial assistance.
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