II

Calendar No. 115

107TH CONGRESS

1ST SESSION S. 1254

To reauthorize the Multifamily Assisted Housing Reform and Affordability

Act of 1997, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 26, 2001

Mr. SARBANES (for himself, Mr. REED, and Mr. ALLARD) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

AUGUST 1, 2001

Reported by Mr. SARBANES, with an amendment

[Insert the part printed in italic]

A BILL

To reauthorize the Multifamily Assisted Housing Reform and

Affordability Act of 1997, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Mark-to-Market Ex5 tension Act of 2001’’.
2

•S 1254 RS

1 SEC. 2. PURPOSES.

2 The purposes of this Act are—

3 (1) to continue the progress of the Multifamily

4 Assisted Housing Reform and Affordability Act of

5 1997 (referred to in this section as ‘‘that Act’’);

6 (2) to ensure that properties that undergo

7 mortgage restructurings pursuant to that Act are re8 habilitated to a standard that allows the properties

9 to meet their long-term affordability requirements;

10 (3) to ensure that, for properties that undergo

11 mortgage restructurings pursuant to that Act, re12 serves are set at adequate levels to allow the prop13 erties to meet their long-term affordability require14 ments;

15 (4) to ensure that properties that undergo

16 mortgage restructurings pursuant to that Act are

17 operated efficiently, and that operating expenses are

18 sufficient to ensure the long-term financial and

19 physical integrity of the properties;

20 (5) to ensure that properties that undergo rent

21 restructurings have adequate resources to maintain

22 the properties in good condition;

23 (6) to ensure that the Office of Multifamily

24 Housing Assistance Restructuring continues to focus

25 on the portfolio of properties eligible for restruc26 turing under that Act;
3

•S 1254 RS

1 (7) to ensure that the Department of Housing

2 and Urban Development carefully tracks the condi3 tion of those properties on an ongoing basis;

4 (8) to ensure that tenant groups, non-profit or5 ganizations, and public entities continue to have the

6 resources for building the capacity of tenant organi7 zations in furtherance of the purposes of subtitle A

8 of that Act; and

9 (9) to encourage the Office of Multifamily

10 Housing Assistance Restructuring to continue to

11 provide participating administrative entities, includ12 ing public participating administrative entities, with

13 the flexibility to respond to specific problems that in14 dividual cases may present, while ensuring consistent

15 outcomes around the country.

16 SEC. 3. DEFINITIONS.

17 Section 512 of the Multifamily Assisted Housing Re18 form and Affordability Act of 1997 (42 U.S.C. 1437f

19 note) is amended by adding at the end the following:

20 ‘‘(19) DEPARTMENT.—The term ‘Department’

21 means the Department of Housing and Urban De22 velopment.

23 ‘‘(20) OFFICE.—The term ‘Office’ means the

24 Office of Multifamily Housing Assistance Restruc25 turing established under section 571.’’.
4

•S 1254 RS

1 SEC. 4. FHA-INSURED MULTIFAMILY HOUSING MORTGAGE

2 AND HOUSING ASSISTANCE RESTRUCTURING.

3 The Multifamily Assisted Housing Reform and Af4 fordability Act of 1997 (42 U.S.C. 1437f note) is

5 amended—

6 (1) in section 514(f)(3)(A)—

7 (A) by striking ‘‘Secretary may provide’’

8 and inserting ‘‘Secretary shall provide’’; and

9 (B) by striking ‘‘entities) and for tenant

10 services,’’ and inserting ‘‘entities), for tenant

11 services, and for tenant groups, nonprofit orga12 nizations, and public entities described in sec13 tion 517(a)(5),’’;

14 (2) in section 514(g)(2)(A), by striking ‘‘mort15 gages in any fiscal year’’ and inserting ‘‘rents and

16 mortgages under this subtitle’’;

17 (3) in section 515(c)(4), by inserting before the

18 period the following: ‘‘, which assistance shall be ac19 cepted by the owner of that project as payment for

20 rent if the property use continues as rental hous21 ing’’;

22 (4) in section 516(d), by striking ‘‘Subject to’’

23 and inserting the following:

24 ‘‘(1) NOTICE TO CERTAIN RESIDENTS.—The

25 Office shall notify any tenant that is residing in a

26 project or receiving assistance under section 8 of the
5

•S 1254 RS

1 United States Housing Act of 1937 (42 U.S.C.

2 1437f) at the time of rejection under this section, of

3 that rejection.

4 ‘‘(2) ASSISTANCE AND MOVING EXPENSES.—

5 Subject to’’;

6 (5) in section 524(e), by adding at the end the

7 following:

8 ‘‘(3) MORTGAGE RESTRUCTURING AND RENTAL

9 ASSISTANCE SUFFICIENCY PLANS.—Notwithstanding

10 paragraph (1), the owner of the project may request,

11 and the Secretary may consider, mortgage restruc12 turing and rental assistance sufficiency plans to fa13 cilitate sales or transfers of properties under this

14 subtitle, subject to an approved plan of action under

15 the Emergency Low Income Housing Preservation

16 Act of 1987 (12 U.S.C. 1715l note) or the Low-In17 come Housing Preservation and Resident Home18 ownership Act of 1990 (12 U.S.C. 4101 et seq.),

19 which plans shall result in a sale or transfer of those

20 properties.’’;

21 (6) in section 512(2), in the second sentence, by

22 inserting ‘‘, but does include a project described in

23 section 524(e)(3)’’ after ‘‘section 524(e)’’;

24 (7) in section 517(b), by adding at the end the

25 following:
6

•S 1254 RS

1 ‘‘(8) ADDITION OF SIGNIFICANT FEATURES.—

2 ‘‘(A) IN GENERAL.—If the participating

3 administrative entity requires the addition of

4 significant features, such as air conditioning, an

5 elevator, or additional community space, in ac6 cordance with guidelines established by the Sec7 retary, the required owner contribution shall

8 not exceed 25 percent of the amount of rehabili9 tation assistance received, as determined by the

10 Secretary.

11 ‘‘(B) APPLICABILITY.—Subparagraph (A)

12 shall apply to all eligible multifamily housing

13 projects, except those for which both the Sec14 retary and the project owner executed a mort15 gage restructuring and rental assistance suffi16 ciency plan on or before the date of enactment

17 of the Mark-to-Market Extension Act of 2001.

18 ‘‘(C) ADDITIONAL COST.—Nothing in this

19 paragraph shall be construed to relieve an

20 owner or purchaser from contributing to reha21 bilitation assistance, as required under para22 graph (7)(B).’’;

23 (8) in section 512(2), by striking subparagraph

24 (A) and inserting the following:
7

•S 1254 RS

1 ‘‘(A) with rents that, on an average per

2 unit or per room basis—

3 ‘‘(i) exceed the rent of comparable

4 properties in the same market area, as de5 termined by the Secretary or a partici6 pating administrative entity or any other

7 independent entity acting on behalf of the

8 Secretary and in accordance with guide9 lines established by the Secretary; or

10 ‘‘(ii) exceeded the rent of comparable

11 properties in the same market area, as de12 termined by the Secretary, prior to, and

13 notwithstanding, any renewal of project14 based assistance under this subtitle;’’;

15 (9) in section 520(b)—

16 (A) by striking ‘‘Banking and’’;

17 (B) by striking ‘‘periods, the’’ and insert18 ing the following: ‘‘periods—

19 ‘‘(1) the’’;

20 (C) by striking the period at the end and

21 inserting a semicolon; and

22 (D) by adding at the end the following:

23 ‘‘(2) the physical and financial condition of

24 properties that are the subject of rent and mortgage

25 restructurings under this subtitle, with special em-
8

•S 1254 RS

1 phasis on properties that have undergone rent

2 restructurings after the Office determined that mort3 gage restructurings were necessary; and

4 ‘‘(3) the status of oversight by the Department,

5 of the financial and physical condition of properties

6 referred to in paragraph (2).’’; and

7 (10) in section 517(a)(1)(B), by striking ‘‘no

8 more than the’’ and inserting the following: ‘‘not

9 more than the greater of—

10 ‘‘(i) the full or partial payment of

11 claim made under this subtitle; or

12 ‘‘(ii) the’’.

13 SEC. 5. ENHANCED VOUCHERS.

14 Section 8(t)(1)(B) of the United States Housing Act

15 of 1937 (42 U.S.C. 1437f(t)(1)(B)) is amended by insert16 ing after ‘‘paragraph (10)(A) of subsection (o)’’ the fol17 lowing: ‘‘, and subject to the comparable rent limitations

18 provided in subparagraphs (A) and (B) of section

19 514(g)(1) of the Multifamily Assisted Housing Reform

20 and Affordability Act of 1997 (42 U.S.C. 1437f note)’’.

21 SEC. 6. MISCELLANEOUS HOUSING INSURANCE.

22 Section 223(a)(7) of the National Housing Act (12

23 U.S.C. 1715n(a)(7)) is amended—

24 (1) by striking ‘‘under this Act: Provided, That

25 the principal’’ and inserting the following: ‘‘under
9

•S 1254 RS

1 this Act, or an existing mortgage held by the Sec2 retary that is subject to a mortgage restructuring

3 and rental assistance sufficiency plan pursuant to

4 the Multifamily Assisted Housing Reform and Af5 fordability Act of 1997 (42 U.S.C. 1437f note), pro6 vided that—

7 ‘‘(A) the principal’’;

8 (2) by striking ‘‘: Provided further, That a

9 mortgage’’ and inserting the following ‘‘; and

10 ‘‘(B) a mortgage’’; and

11 (3) by striking ‘‘or’’ at the end and inserting

12 the following:

13 ‘‘(C) a mortgage that is subject to a mort14 gage restructuring and rental assistance suffi15 ciency plan pursuant to the Multifamily As16 sisted Housing Reform and Affordability Act of

17 1997 (42 U.S.C. 1437f note) and is refinanced

18 under this paragraph may have a term of not

19 more than 30 years; or’’.

20 SEC. 7. TECHNICAL CORRECTION.

21 (a) IN GENERAL.—Section 531(c) of Public Law

22 106–74 (113 Stat. 1116) is amended by striking ‘‘514(h)’’

23 and inserting ‘‘514(h)(1)’’.

24 (b) RETROACTIVE EFFECT.—The amendment made

25 by subsection (a) shall be deemed to have the same effec-
10

•S 1254 RS

1 tive date as section 531 of Public Law 106–74 (113 Stat.

2 1109).

3 SEC. 8. OFFICE OF MULTIFAMILY HOUSING ASSISTANCE

4 RESTRUCTURING.

5 (a) IN GENERAL.—The Multifamily Assisted Hous6 ing Reform and Affordability Act of 1997 (42 U.S.C.

7 1437f note) is amended—

8 (1) in section 571—

9 (A) by inserting ‘‘Federal Housing Admin10 istration of the’’ after ‘‘within the’’; and

11 (B) by inserting before the period at the

12 end the following: ‘‘(in this subtitle, referred to

13 as the ‘Office’)’’;

14 (2) in section 572(a)—

15 (A) by striking ‘‘by and with the advice

16 and consent of the Senate’’; and

17 (B) by striking the second sentence;

18 (3) in section 573(b), in the first sentence, by

19 inserting ‘‘the Federal Housing Commissioner and’’

20 before ‘‘the Secretary’’; and

21 (4) in section 579—

22 (A) by striking subsection (a) and insert23 ing the following:

24 ‘‘(a) REPEAL.—Subtitle A (except for section 524)

25 and subtitle D (except for section 576 and this section)
11

•S 1254 RS

1 are repealed effective October 1, 2006, and section 576

2 is repealed effective October 1, 2007.’’;

3 (B) in subsection (b), by striking ‘‘2001’’

4 and inserting ‘‘2006’’; and

5 (C) in subsection (c), by striking ‘‘2001’’

6 and inserting ‘‘2006’’.

7 (b) LIMITATION ON SUBSEQUENT EMPLOYMENT.—

8 Section 576 of the Multifamily Assisted Housing Reform

9 and Affordability Act of 1997 (42 U.S.C. 1437f note) is

10 amended by striking ‘‘2-year period’’ and inserting ‘‘1-

11 year period’’.

12 (c) REPEAL.—Section 578 of the Multifamily As13 sisted Housing Reform and Affordability Act of 1997 (42

14 U.S.C. 1437f note) is repealed.

15 SEC. 9. GAO REPORTS.

16 (a) INITIAL REPORT.—

17 (1) IN GENERAL.—Not later than October 1,

18 2002, and annually thereafter through 2005, the

19 Comptroller General of the United States shall submit

20 to the Congress a report on the activities carried out

21 under the Multifamily Assisted Housing Reform and

22 Affordability Act of 1997 (42 U.S.C. 1437f note).

23 (2) CONTENTS.—The report required under

24 paragraph (1) shall describe—
12

•S 1254 RS

1 (A) progress in completing restructurings

2 under subtitle A of the Multifamily Assisted

3 Housing Reform and Affordability Act of 1997

4 (42 U.S.C. 1437f note) in a timely manner,

5 while ensuring the physical, financial, and man6 agerial soundness of the multifamily housing

7 stock; and

8 (B) the status of shortcomings or concerns of

9 the eligible multifamily housing projects re10 viewed in the 2001 report submitted by the

11 Comptroller General in accordance with section

12 521 of that Act.

13 (b) FINAL REPORT.—

14 (1) IN GENERAL.—Not less than 4 months prior

15 to the date of termination of the restructuring pro16 gram established under subtitle A of the Multifamily

17 Assisted Housing Reform and Affordability Act of

18 1997 (42 U.S.C. 1437f note), the Comptroller General

19 of the United States shall submit to the Congress a

20 final report on the activities carried out under that

21 Act.

22 (2) CONTENTS.—The report required under

23 paragraph (1) shall describe—

24 (A) matters pertaining to the termination

25 of the Office of Multifamily Housing Assistance
13

•S 1254 RS

1 Restructuring, established under section 571 of

2 the Multifamily Assisted Housing Reform and

3 Affordability Act of 1997 (42 U.S.C. 1437f note),

4 and the restructuring program; and

5 (B) the transition of any remaining respon6 sibilities under that Act after the date of termi7 nation to the Office of Housing within the De8 partment of Housing and Urban Development.
Calendar No. 115

107TH CONGRESS

1ST SESSION S. 1254

A BILL

To reauthorize the Multifamily Assisted Housing

Reform and Affordability Act of 1997, and forother purposes.

AUGUST 1, 2001

Reported with an amendment