II 

112TH CONGRESS 

2D SESSION S. 2162 

To provide for the redevelopment of abandoned and foreclosed-upon properties 

and for the stabilization of affected neighborhoods, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 6, 2012 

Mr. REED (for himself, Mr. DURBIN, Mr. SCHUMER, Mr. LEAHY, Mr. BROWN

of Ohio, Mr. WHITEHOUSE, Mr. MERKLEY, Mr. BEGICH, Mr. FRANKEN, 

Mr. BLUMENTHAL, and Mr. AKAKA) introduced the following bill; which 

was read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

A BILL 

To provide for the redevelopment of abandoned and foreclosed-upon properties and for the stabilization of affected neighborhoods, 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 ‘‘Project Rebuild Act’’. 

5 SEC. 2. PROJECT REBUILD. 

6 (a) DIRECT APPROPRIATIONS.—There is appro7 priated, out of any money in the Treasury not otherwise 

8 appropriated, $15,000,000,000, to remain available until 


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1 September 30, 2016, for assistance to eligible entities in2 cluding States and units of general local government (as 

3 such terms are defined in section 102 of the Housing and 

4 Community Development Act of 1974 (42 U.S.C. 5302)), 

5 and qualified nonprofit organizations, businesses or con6 sortia of eligible entities for the redevelopment of aban7 doned and foreclosed-upon properties and for the stabiliza8 tion of affected neighborhoods. 

9 (b) ALLOCATION OF APPROPRIATED AMOUNTS.— 

10 (1) IN GENERAL.—Of the amounts appro11 priated, two-thirds shall be allocated to States and 

12 units of general local government based on a funding 

13 formula established by the Secretary of Housing and 

14 Urban Development (in this section referred to as 

15 the ‘‘Secretary’’). Of the amounts appropriated, one16 third shall be distributed competitively to eligible en17 tities. 

18 (2) FORMULA TO BE DEVISED SWIFTLY.—The 

19 funding formula required under paragraph (1) shall 

20 be established and the Secretary shall announce for21 mula funding allocations, not later than 30 days 

22 after the date of the enactment of this Act. 

23 (3) FORMULA CRITERIA.—The Secretary may 

24 establish a minimum grant size, and the funding for25 mula required under paragraph (1) shall ensure that 


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1 any amounts appropriated or otherwise made avail2 able under this section are allocated to States and 

3 units of general local government with the greatest 

4 need, as such need is determined in the discretion of 

5 the Secretary based on— 

6 (A) the number and percentage of home 

7 foreclosures in each State or unit of general 

8 local government; 

9 (B) the number and percentage of homes 

10 in default or delinquency in each State or unit 

11 of general local government; and 

12 (C) other factors such as established pro13 gram designs, grantee capacity and perform14 ance, number and percentage of commercial 

15 foreclosures, overall economic conditions, and 

16 other market needs data, as determined by the 

17 Secretary. 

18 (4) COMPETITION CRITERIA.— 

19 (A) ELIGIBLE ENTITIES.—For the funds 

20 distributed competitively, eligible entities shall 

21 be States, units of general local government, 

22 nonprofit entities, for-profit entities, and con23 sortia of eligible entities that demonstrate ca24 pacity to use funding within the period of this 

25 program. 


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1 (B) AWARD CRITERIA.—In selecting grant2 ees, the Secretary shall ensure that grantees 

3 are in areas with the greatest number and per4 centage of residential and commercial fore5 closures and other market needs data, as deter6 mined by the Secretary. Additional award cri7 teria shall include demonstrated grantee capac8 ity to execute projects involving acquisition and 

9 rehabilitation or redevelopment of foreclosed 

10 residential and commercial property and neigh11 borhood stabilization, leverage, knowledge of 

12 market conditions and of effective stabilization 

13 activities to address identified conditions, and 

14 any additional factors determined by the Sec15 retary. 

16 (C) GRANT SIZE.—The Secretary may es17 tablish a minimum grant size. 

18 (D) PUBLICATION OF CRITERIA; APPLICA19 TION DUE DATE.—The Secretary shall publish 

20 competition criteria for any grants awarded 

21 under this section not later than 60 days after 

22 the appropriation of funds, and applications 

23 shall be due to the Secretary within 120 days. 

24 (c) USE OF FUNDS.— 


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1 (1) OBLIGATION AND EXPENDITURE.—The Sec2 retary shall obligate all formula funding within 120 

3 days of the date of the enactment of this Act and 

4 all competitive grant funding within 180 days of 

5 such enactment date. Any eligible entity that re6 ceives amounts pursuant to this section shall expend 

7 all funds allocated to it within three years of the 

8 date the funds become available to the grantee for 

9 obligation. Furthermore, the Secretary shall by No10 tice establish intermediate expenditure benchmarks 

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

12 funds become available to the grantee for obligation. 

13 (2) PRIORITIES.— 

14 (A) JOB CREATION.—Each grantee or eli15 gible entity shall describe how its proposed use 

16 of funds will prioritize job creation, and sec17 ondly, will address goals to stabilize neighbor18 hoods, reduce vacancy, or increase or stabilize 

19 residential and commercial property values. 

20 (B) TARGETING.—Any State or unit of 

21 general local government that receives formula 

22 amounts pursuant to this section shall, in dis23 tributing and targeting such amounts, give pri24 ority emphasis and consideration to those met25 ropolitan areas, metropolitan cities, urban 


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1 areas, rural areas, low- and moderate-income 

2 areas, and other areas with the greatest need, 

3 including those— 

4 (i) with the greatest percentage of 

5 home foreclosures; 

6 (ii) identified as likely to face a sig7 nificant rise in the rate of residential or 

8 commercial foreclosures; and 

9 (iii) with a higher than national aver10 age unemployment rate. 

11 In addition, such priority emphasis and consid12 eration may be given to such areas that have 

13 lost occupiable housing stock within the 3-year 

14 period ending with the date of the enactment of 

15 this Act due to the effects of presidentially de16 clared disasters. 

17 (C) LEVERAGE.—Each grantee or eligible 

18 entity shall describe how its proposed use of 

19 funds will leverage private funds. 

20 (3) ELIGIBLE USES.—Amounts made available 

21 under this section may be used to— 

22 (A) establish financing mechanisms for the 

23 purchase and redevelopment of abandoned and 

24 foreclosed-upon properties, including such 

25 mechanisms as soft-seconds, loan loss reserves, 


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1 and shared-equity loans for low- and moderate2 income homebuyers; 

3 (B) purchase and rehabilitate properties 

4 that have been abandoned or foreclosed upon, 

5 in order to sell, rent, or redevelop such prop6 erties; 

7 (C) establish and operate land banks for 

8 properties that have been abandoned, demol9 ished, severely damaged by presidentially de10 clared disasters, or foreclosed upon; 

11 (D) demolish blighted structures; 

12 (E) redevelop abandoned, foreclosed, de13 molished, or vacant properties; and 

14 (F) engage in other activities, as deter15 mined by the Secretary through notice, that are 

16 consistent with the goals of creating jobs, stabi17 lizing neighborhoods, reducing vacancy, increas18 ing or stabilizing residential and commercial 

19 property values, and providing assistance to 

20 homeowners and landlords recovering after 

21 presidentially declared disasters. 

22 (d) LIMITATIONS.— 

23 (1) ON PURCHASES.—Any purchase of a prop24 erty under this section shall be at a price not to exVerDate Mar 15 2010 04:15 Mar 07, 2012 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2162.IS S2162

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1 ceed its current market value, taking into account 

2 its current condition. 

3 (2) REHABILITATION.—Any rehabilitation of an 

4 eligible property under this section shall be to the 

5 extent necessary to comply with applicable laws, and 

6 other requirements relating to safety, quality, mar7 ketability, and habitability, in order to sell, rent, or 

8 redevelop such properties or provide a renewable en9 ergy source or sources for such properties. 

10 (3) SALE OF HOMES.—If an abandoned or fore11 closed-upon home is purchased, redeveloped, or oth12 erwise sold to an individual as a primary residence, 

13 then such sale shall be in an amount equal to or less 

14 than the cost to acquire and redevelop or rehabilitate 

15 such home or property up to a decent, safe, market16 able, and habitable condition. 

17 (4) ON DEMOLITION OF PUBLIC HOUSING.— 

18 Public housing, as defined in section 3(b)(1) of the 

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

20 1437a(b)(1)), may not be demolished with funds 

21 under this section. 

22 (5) ON DEMOLITION ACTIVITIES.—No more 

23 than 10 percent of any grant made under this sec24 tion may be used for demolition activities unless the 

25 Secretary determines that such use represents an 


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1 appropriate response to local market conditions or is 

2 necessary as a result of a presidentially declared dis3 aster. 

4 (6) ON USE OF FUNDS FOR NON-RESIDENTIAL

5 PROPERTY.—No more than 30 percent of any grant 

6 made under this section may be used for eligible ac7 tivities under subparagraphs (A), (B), and (E) of 

8 subsection (c)(3) that will not result in residential 

9 use of the property involved unless the Secretary de10 termines that such use represents an appropriate re11 sponse to local market conditions. 

12 (7) GENERAL USE OF FUNDS.—Each formula 

13 and competitive grantee is required to ensure that 

14 all use of formula or competitive funds by the grant15 ee are properly underwritten and reviewed in order 

16 to prevent fraud, waste, and abuse. 

17 (e) RULES OF CONSTRUCTION.— 

18 (1) IN GENERAL.—Except as otherwise pro19 vided by this section, amounts appropriated, reve20 nues generated, or amounts otherwise made avail21 able to eligible entities under this section shall be 

22 treated as though such funds were community devel23 opment block grant funds under title I of the Hous24 ing and Community Development Act of 1974 (42 

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


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1 (2) NO MATCH.—No matching funds shall be 

2 required in order for an eligible entity to receive any 

3 amounts under this section. 

4 (3) TENANT PROTECTIONS.—An eligible entity 

5 receiving a grant under this section shall comply 

6 with the 14th, 17th, 18th, 19th, 20th, 21st, 22nd 

7 and 23rd provisos in the second undesignated para8 graph under the heading ‘‘Community Planning and 

9 Development—Community Development Fund’’ in 

10 title XII of division A of the American Recovery and 

11 Reinvestment Act of 2009 (Public Law 111–5, 123 

12 Stat. 218–19), as amended by section 1497(b)(2) of 

13 the Dodd-Frank Wall Street Reform and Consumer 

14 Protection Act (Public Law 111–203, 124 Stat. 

15 2211). 

16 (4) VICINITY HIRING.—An eligible entity receiv17 ing a grant under this section shall comply with sec18 tion 1497(a)(8) of the Dodd-Frank Wall Street Re19 form and Consumer Protection Act (Public Law 

20 111–203, 124 Stat. 2210). 

21 (5) BUY AMERICAN.—Section 1605 of title XVI 

22 of division A of the American Recovery and Rein23 vestment Act of 2009 (Public Law 111–5, 123 Stat. 

24 303) shall apply to amounts appropriated, revenues 


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1 generated, and amounts otherwise made available to 

2 eligible entities under this section. 

3 (f) AUTHORITY TO SPECIFY ALTERNATIVE RE4 QUIREMENTS.— 

5 (1) IN GENERAL.—In administering the pro6 gram under this section, the Secretary may specify 

7 alternative requirements to any provision under title 

8 I of the Housing and Community Development Act 

9 of 1974 (42 U.S.C. 5301 et seq.) or under title I of 

10 the Cranston-Gonzalez National Affordable Housing 

11 Act (42 U.S.C. 12701 et seq.) (except for those pro12 visions in these laws related to fair housing, non13 discrimination, labor standards, and the environ14 ment) for the purpose of expediting and facilitating 

15 the use of funds under this section. 

16 (2) NOTICE.—The Secretary shall provide writ17 ten notice of intent to the public via Internet to ex18 ercise the authority to specify alternative require19 ments under paragraph (1). 

20 (3) LOW AND MODERATE INCOME REQUIRE21 MENT.— 

22 (A) IN GENERAL.—Notwithstanding the 

23 authority of the Secretary under paragraph 

24 (1)— 


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1 (i) all of the formula and competitive 

2 grantee funds appropriated or otherwise 

3 made available under this section shall be 

4 used with respect to individuals and fami5 lies whose income does not exceed 120 per6 cent of area median income; and 

7 (ii) not less than 25 percent of the 

8 formula and competitive grantee funds ap9 propriated or otherwise made available 

10 under this section shall be used for the 

11 purchase and redevelopment of eligible 

12 properties that will be used to house indi13 viduals or families whose incomes do not 

14 exceed 50 percent of area median income. 

15 (B) RECURRENT REQUIREMENT.—The 

16 Secretary shall, by rule or order, ensure, to the 

17 maximum extent practicable and for the longest 

18 feasible term, that the sale, rental, or redevelop19 ment of abandoned and foreclosed-upon homes 

20 and residential properties under this section re21 main affordable to individuals or families de22 scribed in subparagraph (A). 

23 (g) NATIONWIDE DISTRIBUTION OF RESOURCES.— 

24 Notwithstanding any other provision of this section, each 


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

2 funds. 

3 (h) LIMITATION ON USE OF FUNDS WITH RESPECT

4 TO EMINENT DOMAIN.—No State or unit of general local 

5 government may use any amounts received pursuant to 

6 this section to fund any project that seeks to use the power 

7 of eminent domain, unless eminent domain is employed 

8 only for a public use, which shall not be construed to in9 clude economic development that primarily benefits pri10 vate entities. 

11 (i) LIMITATION ON DISTRIBUTION OF FUNDS.— 

12 (1) IN GENERAL.—None of the funds made 

13 available under this section shall be distributed to— 

14 (A) an organization which has been in15 dicted for a violation under Federal law relating 

16 to an election for Federal office; or 

17 (B) an organization which employs applica18 ble individuals. 

19 (2) APPLICABLE INDIVIDUALS DEFINED.—In 

20 this section, the term ‘‘applicable individual’’ means 

21 an individual who— 

22 (A) is— 

23 (i) employed by the organization in a 

24 permanent or temporary capacity; 


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1 (ii) contracted or retained by the or2 ganization; or 

3 (iii) acting on behalf of, or with the 

4 express or apparent authority of, the orga5 nization; and 

6 (B) has been indicted for a violation under 

7 Federal law relating to an election for Federal 

8 office. 

9 (j) RENTAL HOUSING PREFERENCES.—Each State 

10 and local government receiving formula amounts shall es11 tablish procedures to create preferences for the develop12 ment of affordable rental housing. 

13 (k) JOB CREATION.—If a grantee chooses to use 

14 funds to create jobs by establishing and operating a pro15 gram to maintain eligible neighborhood properties, not 

16 more than 10 percent of any grant may be used for that 

17 purpose. 

18 (l) PROGRAM SUPPORT AND CAPACITY BUILDING.— 

19 The Secretary may use an overall amount up to 0.75 per20 cent of the funds appropriated for capacity building of and 

21 support for eligible entities and grantees undertaking 

22 neighborhood stabilization programs, staffing, training, 

23 technical assistance, technology, monitoring, travel, en24 forcement, research and evaluation activities. In addi25 tion— 


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1 (1) funds set aside for the purposes of this sub2 section shall remain available until September 30, 

3 2016; 

4 (2) any funds made available under this sub5 section and used by the Secretary for personnel, 

6 training, or other administrative expenses related to 

7 administering funding under this subsection shall be 

8 transferred to ‘‘Program Office Salaries and Ex9 penses, Community Planning and Development’’; 

10 (3) any funds made available under this sub11 section and used by the Secretary for technology 

12 shall be transferred to ‘‘Working Capital Fund’’; 

13 and 

14 (4) an amount up to 0.10 percent of the funds 

15 appropriated shall be transferred to the Office of In16 spector General, Department of Housing and Urban 

17 Development and such overall amount described in 

18 this subsection shall be reduced by the amount spec19 ified in this paragraph. 

20 (m) ENFORCEMENT AND PREVENTION OF FRAUD

21 AND ABUSE.—The Secretary shall establish and imple22 ment procedures to prevent fraud and abuse of funds 

23 under this section, and shall impose a requirement that 

24 grantees have an internal auditor to continuously monitor 

25 grantee performance to prevent fraud, waste, and abuse. 


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1 Grantees shall provide the Secretary and citizens with 

2 quarterly progress reports. The Secretary shall recapture 

3 funds from formula and competitive grantees that do not 

4 expend 100 percent of allocated funds within 3 years of 

5 the date that funds become available, and from underper6 forming or mismanaged grantees, and shall re-allocate 

7 those funds by formula to target areas with the greatest 

8 need, as determined by the Secretary through notice. The 

9 Secretary may take an alternative sanctions action only 

10 upon determining that such action is necessary to achieve 

11 program goals in a timely manner. 

12 (n) POLICIES AND PROCEDURES FOR GRANTS.—The 

13 Secretary of Housing and Urban Development shall to the 

14 extent feasible conform policies and procedures for grants 

15 made under this section to the policies and procedures al16 ready in place for the grants made under section 2301 

17 of the Housing and Economic Recovery Act of 2008 (Pub18 lic Law 110–289, 122 Stat. 2850); title XII of division 

19 A of the American Recovery and Reinvestment Act of 

20 2009 (Public Law 111–5, 123 Stat. 217); or section 1497 

21 of the Dodd-Frank Wall Street Reform and Consumer 

22 Protection Act (Public Law 111–203, 124 Stat. 2209). 


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1 SEC. 3. WAGE RATE AND EMPLOYMENT PROTECTION RE2 QUIREMENTS. 

3 Amounts appropriated, revenues generated, and 

4 amounts otherwise made available under this Act shall be 

5 subject to the requirements of section 110 of the Housing 

6 and Community Development Act of 1974 (42 U.S.C. 

7 5310) or to a waiver thereof under section 107(e)(2) of 

8 such Act (42 U.S.C. 5307(e)(2)). 

Æ 


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