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[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1365 Introduced in Senate (IS)]

107th CONGRESS
  1st Session
                                S. 1365

   To authorize the Secretary of the Department of Housing and Urban 
  Development to make grants to States for affordable housing for low-
                income persons, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             August 3, 2001

 Mr. Jeffords (for himself, Mr. Kerry, Mr. Grassley, Mr. Dayton, Mrs. 
  Feinstein, Mr. Schumer, and Mr. Sarbanes) introduced the following 
 bill; which was read twice and referred to the Committee on Banking, 
                       Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
   To authorize the Secretary of the Department of Housing and Urban 
  Development to make grants to States for affordable housing for low-
                income persons, and for other purposes.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    This Act may be cited as the ``Affordable Housing Preservation Act 
of 2001''.

SEC. 2. MATCHING GRANT PROGRAM FOR AFFORDABLE HOUSING PRESERVATION.

    (a) Findings and Purposes.--
            (1) Findings.--Congress finds that--
                    (A) the availability of low-income housing rental 
                units has declined nationwide in the last several 
                years;
                    (B) as rents for low-income housing increase and 
                the development of new units of affordable housing 
                decreases, there are fewer privately owned, federally 
                assisted affordable housing units available to low-
                income individuals in need;
                    (C) the demand for affordable housing far exceeds 
                the supply of affordable housing, as evidenced by 
                recent studies; and
                    (D) the efforts of nonprofit organizations have 
                significantly preserved and expanded access to low-
                income housing.
            (2) Purposes.--The purposes of this section are--
                    (A) to continue the partnerships among the Federal 
                Government, State and local governments, nonprofit 
                organizations, and the private sector in operating and 
                assisting housing that is affordable to low-income 
                persons and families;
                    (B) to promote the preservation of affordable 
                housing units by providing matching grants to States 
                and localities that have developed and funded programs 
                for the preservation of privately owned housing that is 
                affordable to low-income families and persons; and
                    (C) to minimize the involuntary displacement of 
                tenants who are currently residing in such housing, 
                many of whom are elderly or disabled persons and 
                families with children.
    (b) Definitions.--In this section:
            (1) Capital expenditures.--The term ``capital 
        expenditures'' includes expenditures for acquisition and 
        rehabilitation.
            (2) Low-income affordability restriction.--The term ``low-
        income affordability restriction'' means, with respect to a 
        housing project, any limitation imposed by law, regulation, or 
        regulatory agreement on rents for tenants of the project, rent 
        contributions for tenants of the project, or income-eligibility 
        for occupancy in the project.
            (3) Project-based assistance.--The term ``project-based 
        assistance'' has the same meaning as in section 16(c) of the 
        United States Housing Act of 1937 (42 U.S.C. 1437n(c)), except 
        that the term includes assistance under any successor programs 
        to the programs referred to in that section.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Department of Housing and Urban Development.
            (5) State.--The term ``State'' means each of the several 
        States of the United States and the District of Columbia.
    (c) Authority To Make Grants.--The Secretary shall, to the extent 
that amounts are made available in advance under subsection (k), award 
grants under this section to States and localities for low-income 
housing preservation and promotion.
    (d) Applications.--
            (1) In general.--Any State or locality that seeks a grant 
        under this section shall submit an application (through 
        appropriate State and local agencies) to the Secretary.
            (2) Contents.--Each application submitted pursuant to 
        paragraph (1) shall contain any information and certifications 
        necessary for the Secretary to determine who is eligible to 
        receive a grant under this section.
    (e) Use of Grants.--
            (1) Eligible uses.--
                    (A) In general.--Grants awarded under this section 
                may be used by States and localities only for the 
                purpose of providing assistance for acquisition, 
                rehabilitation, operating costs, and capital 
                expenditures for a housing project that meets the 
                requirements of paragraph (2), (3), (4), or (5).
                    (B) Factors for consideration.--In selecting a 
                housing project described in subparagraph (A) for 
                assistance under this section--
                            (i) the State or locality shall take into 
                        consideration--
                                    (I) whether the assistance will be 
                                used to transfer the project to a 
                                resident-endorsed nonprofit 
                                organization;
                                    (II) whether the owner of the 
                                project has extended the low-income 
                                affordability restrictions on the 
                                project for a period of more than 15 
                                years;
                                    (III) the extent to which the 
                                project is consistent with the 
                                comprehensive housing affordability 
                                strategy approved in accordance with 
                                section 105 of the Cranston-Gonzalez 
                                National Affordable Housing Act 
(42 U.S.C. 12705) for the jurisdiction in which the project is located;
                                    (IV) the extent to which the 
                                project location provides access to 
                                transportation, jobs, shopping, and 
                                other similar conveniences;
                                    (V) the extent to which the project 
                                meets fair housing goals under 
                                applicable State and Federal laws;
                                    (VI) the extent to which the 
                                project serves specific needs that are 
                                not otherwise met by the local market, 
                                such as housing for the elderly or 
                                disabled, or families with children;
                                    (VII) the extent of local 
                                government resources provided to the 
                                project; and
                                    (VIII) such other factors as the 
                                Secretary or the State or locality may 
                                establish; and
                            (ii) States receiving funds shall ensure 
                        that, to the maximum extent practicable, 
                        projects in both urban and rural areas in the 
                        State receive assistance.
            (2) Projects with hud-insured mortgages.--A project meets 
        the requirements of this paragraph only if--
                    (A) the project is financed by a loan or mortgage 
                that is--
                            (i) insured or held by the Secretary under 
                        section 221(d)(3) of the National Housing Act 
                        (12 U.S.C. 1715l(d)(3)) and receiving loan 
                        management assistance under section 8 of the 
                        United States Housing Act of 1937 (42 U.S.C. 
                        1437f) due to a conversion from section 101 of 
                        the Housing and Urban Development Act of 1965 
                        (12 U.S.C. 1701s);
                            (ii) insured or held by the Secretary and 
                        bears interest at a rate determined under the 
                        proviso of section 221(d)(5) of the National 
                        Housing Act (12 U.S.C. 1715l(d)(5)); or
                            (iii) insured, assisted, or held by the 
                        Secretary or a State or State agency under 
                        section 236 of the National Housing Act (12 
                        U.S.C. 1715z-1);
                    (B) with respect to the mortgage referred to in 
                subparagraph (A), the project is subject to an 
                unconditional waiver of--
                            (i) all rights to any prepayment of the 
                        mortgage; and
                            (ii) all rights to any voluntary 
                        termination of the mortgage insurance contract 
                        for the mortgage; and
                    (C) the owner of the project has entered into 
                binding commitments (applicable to any subsequent 
                owner) to extend any low-income affordability 
                restrictions on the project that are for less than 15 
                years, including any such restrictions imposed because 
                of any contract for project-based assistance for the 
                project, for a period of not less than 15 years 
                (beginning on the date on which assistance is made 
                available for the project by the State or locality 
                under this section).
            (3) Projects with section 8 project-based assistance.--A 
        project meets the requirements of this paragraph only if--
                    (A) the project is subject to a contract for 
                project-based assistance; and
                    (B) the owner of the project has entered into 
                binding commitments (applicable to any subsequent 
                owner)--
                            (i) to continue to renew the contract for 
                        project-based assistance (if offered on the 
                        same terms and conditions) until the later of--
                                    (I) the last day of the remaining 
                                term of the mortgage; or
                                    (II) the date that is 15 years 
                                after the date on which assistance is 
                                made available for the project by the 
                                State or locality under this 
                                subsection; and
                            (ii) to extend any low-income affordability 
                        restrictions applicable to the project in 
                        connection with the project-based assistance.
            (4) Projects purchased by residents.--A project meets the 
        requirements of this paragraph only if the project--
                    (A) is or was eligible low-income housing (as 
                defined in section 229 of the Low-Income Housing 
                Preservation and Resident Homeownership Act of 1990 (12 
                U.S.C. 4119)) or is or was a project assisted under 
                section 613(b) of the Cranston-Gonzalez National 
                Affordable Housing Act (12 U.S.C. 4125);
                    (B) has been purchased by a resident council or 
                resident-approved nonprofit organization for the 
                housing, or is approved by the Secretary for such 
                purchase, for conversion to homeownership housing under 
                a resident homeownership program meeting the 
                requirements of section 226 of the Low-Income Housing 
                Preservation and Resident Homeownership Act of 1990 (12 
                U.S.C. 4116); and
                    (C) the owner of the project has entered into 
                binding commitments (applicable to any subsequent 
                owner) to extend project-based assistance for not less 
                than 15 years (beginning on the date on which 
                assistance is made available for the project by the 
                State or locality under this section) and to extend any 
                low-income affordability restrictions applicable to the 
                project in connection with that assistance.
            (5) Rural rental assistance projects.--A project meets the 
        requirements of this paragraph only if--
                    (A) the project is a rural rental housing project 
                financed under section 515 of the Housing Act of 1949 
                (42 U.S.C. 1485); and
                    (B) the restriction on the use of the project (as 
                required under section 502 of the Housing Act of 1949 
                (42 U.S.C. 1472)) will expire not later than 12 months 
                after the date on which assistance is made available 
                for the project by the State or locality under this 
                subsection.
    (f) Amount of State and Local Grants.--
            (1) In general.--Subject to subsection (g), in each fiscal 
        year, the Secretary shall award to each State and locality 
        approved for a grant under this section a grant in an amount 
        based upon the proportion of the need for assistance of that 
        State or locality under this section (as determined by the 
        Secretary in accordance with paragraph (2)) to the aggregate 
        need among all States and localities approved for assistance 
        under this section for that fiscal year.
            (2) Determination of need.--In determining the proportion 
        of the need of a State or locality under paragraph (1), the 
        Secretary shall consider--
                    (A) the number of units in projects in the State or 
                locality that are eligible for assistance under section 
                524(e)(1) of the Multifamily Assisted Housing Reform 
                and Affordability Act of 1997 (42 U.S.C. 1437f note), 
                as amended by this Act, that, due to market conditions 
                or other factors, are at risk for prepayment, opt-out, 
                or otherwise at risk of being lost to the inventory of 
                affordable housing; and
                    (B) the difficulty that residents of projects in 
                the State or locality that are eligible for assistance 
                under subsection (e) would face in finding adequate, 
                available, decent, comparable, and affordable housing 
                in neighborhoods of comparable quality in the local 
                market, if those projects were not assisted by the 
                State or locality under subsection (e).
    (g) Matching Requirement.--
            (1) In general.--A grant under this section to a State or 
        locality for any fiscal year may not exceed an amount that is 
        twice the amount that the State or locality certifies, as the 
        Secretary shall require, that the State or locality will 
        contribute for such fiscal year, or has contributed since 
        January 1, 2001, from non-Federal sources for the purposes 
        described in subsection (e)(1).
            (2) Treatment of previous contributions.--Any portion of 
        amounts contributed after January 1, 2001, that are counted for 
        the purpose of meeting the requirement under paragraph (1) for 
        a fiscal year may not be counted for that purpose for any 
        subsequent fiscal year.
            (3) Treatment of tax incentives.--Fifty percent of the 
        funds used for the project that are allocable to tax credits 
        allocated under section 42 of the Internal Revenue Code of 
        1986, revenue from mortgage revenue bonds issued under section 
        143 of that Code, or proceeds from the sale of tax-exempt bonds 
        by any State or local government entity shall be considered 
        non-Federal sources for purposes of this subsection.
    (h) Treatment of Subsidy Layering Requirements.--Neither subsection 
(g) nor any other provision of this section may be construed to prevent 
the use of tax credits allocated under section 42 of the Internal 
Revenue Code of 1986, in connection with housing assisted with amounts 
from a grant awarded under this section, to the extent that such use is 
in accordance with section 102(d) of the Department of Housing and 
Urban Development Reform Act of 1989 (42 U.S.C. 3545(d)) and section 
911 of the Housing and Community Development Act of 1992 (42 U.S.C. 
3545 note).
    (i) Reports.--
            (1) Reports to secretary.--Not later than 90 days after the 
        last day of each fiscal year, each State and locality that 
        receives a grant under this section during that fiscal year 
        shall submit to the Secretary a report on the housing projects 
        assisted with amounts made available under the grant.
            (2) Reports to congress.--Based on the reports submitted 
        under paragraph (1), the Secretary shall annually submit to 
        Congress a report on the grants awarded under this section 
        during the preceding fiscal year and the housing projects 
        assisted with amounts made available under those grants.
    (j) Regulations.--Not later than 12 months after the date of 
enactment of this Act, the Secretary shall issue regulations to carry 
out this section.
    (k) Authorization of Appropriations.--There are authorized to be 
appropriated for grants under this section such sums as may be 
necessary for each of fiscal years 2002 through 2005.

SEC. 3. ASSISTANCE FOR NONPROFIT PURCHASERS PRESERVING AFFORDABLE 
              HOUSING.

    (a) Congressional Findings.--Congress finds that--
            (1) a substantial number of existing federally assisted or 
        federally insured multifamily properties are at risk of being 
        lost from the affordable housing inventory of the Nation 
        through market rate conversion, deterioration, or demolition;
            (2) it is in the interest of the Nation to encourage 
        transfer of control of such properties to competent national, 
        regional, and local nonprofit entities and intermediaries, the 
        missions of which involve maintaining the affordability of such 
        properties;
            (3) such transfers may be inhibited by a shortage of such 
        entities that are appropriately capitalized; and
            (4) the Nation would be well served by providing assistance 
        to such entities to aid in accomplishing this purpose.
    (b) Definitions.--In this section:
            (1) Eligible affordable housing.--The term ``eligible 
        affordable housing'' means housing that--
                    (A) consists of more than 4 dwelling units;
                    (B) is insured or assisted under a program of the 
                Department of Housing and Urban Development or the 
                Department of Agriculture under which the property is 
                subject to limitations on tenant rents, rent 
                contributions, or incomes; and
                    (C) is at risk, as determined by the Secretary, of 
                termination of any of the limitations referred to in 
                subparagraph (B).
            (2) Eligible entities.--The term ``eligible entities'' 
        means any entity that meets the requirements of subsection (d) 
        and the rules issued under that subsection.
            (3) Low-income families; very low-income families.--The 
        terms ``low-income families'' and ``very low-income families'' 
        have the meanings given such terms in section 3(b) of the 
        United States Housing Act of 1937 (42 U.S.C. 1437a(b)).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Department of Housing and Urban Development.
    (c) Grants.--The Secretary may make grants, to the extent that 
amounts are made available for such grants, to eligible entities for 
use only for--
            (1) operational, working capital, and organizational 
        expenses of eligible entities; and
            (2) activities by eligible entities to acquire eligible 
        affordable housing for the purpose of ensuring that the housing 
        will remain affordable, as the Secretary considers appropriate, 
        for low-income or very low-income families (including elderly 
        persons).
    (d) Eligible Entities.--
            (1) In general.--The Secretary shall establish by 
        regulation, standards for eligible entities under this 
        subsection.
            (2) Requirements.--An eligible entity shall--
                    (A) be a nonprofit organization (as defined in 
                section 104 of the Cranston-Gonzalez National 
                Affordable Housing Act (42 U.S.C. 12704));
                    (B) have among its purposes, maintaining the 
                affordability to low-income or very low-income families 
                of multifamily properties that are at risk of loss from 
                the inventory of housing that is affordable to low-
                income or very low-income families; and
                    (C) demonstrate to the Secretary--
                            (i) the need for the types of assistance 
                        described in subsection (c);
                            (ii) experience in providing assistance 
                        described in that subsection; and
                            (iii) its ability to provide the assistance 
                        described in that subsection.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated for grants under this section, such sums as may be 
necessary for each of fiscal years 2002 through 2005.

SEC. 4. PRESERVATION PROJECTS.

    Section 524(e)(1) of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by striking 
``amounts are specifically'' and inserting ``sufficient amounts are''.
                                 <all>
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