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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2692 Introduced in Senate (IS)]

108th CONGRESS
  2d Session
                                S. 2692

   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

                             July 20, 2004

Mr. Jeffords (for himself, Mr. Sarbanes, and Mrs. Feinstein) 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 2004''.

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;
                    (D) the efforts of nonprofit organizations have 
                significantly preserved and expanded access to low-
                income housing;
                    (E) 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;
                    (F) 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;
                    (G) such transfers may be inhibited by a shortage 
                of such entities that are appropriately capitalized; 
                and
                    (H) the Nation would be well served by providing 
                assistance to such entities to aid in accomplishing 
                this purpose.
            (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) Consortium.--The term ``consortium'' means a group of 
        geographically contiguous localities that jointly submit an 
        application under subsection (d).
            (3) 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).
            (4) Eligible entities.--The term ``eligible entities'' 
        means any entity that meets the requirements of subsection 
        (e)(6) and the rules issued under that subsection.
            (5) Locality.--The term ``locality'' means a city, town, 
        township, county, parish, village, or other general purpose 
        political subdivision of a State, or a consortium thereof.
            (6) 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.
            (7) 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)).
            (8) 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.
            (9) Qualified limited liability company.--The term 
        ``qualified limited liability company'' means a limited 
        liability company with respect to which a credit is allowed 
        under section 42 of the Internal Revenue Code of 1986 with 
        respect to the company's qualified basis (as defined in section 
        42 (c)(1) of such Code), in a qualified low-income building (as 
        defined in section 42(c)(2) of such Code) for which grant funds 
        received under this section shall be used.
            (10) Qualified partnership.--The term ``qualified 
        partnership'' means a limited partnership with respect to which 
        a credit is allowed under section 42 of the Internal Revenue 
        Code of 1986 with respect to the partnership's qualified basis 
        (as defined in section 42(c)(1) of such Code) in a qualified 
        low-income building (as defined in section 42(c)(2) of such 
        Code) for which grant funds received under this section shall 
        be used.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of the Department of Housing and Urban Development.
            (12) 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 
                purposes of providing assistance--
                            (i) for acquisition, rehabilitation, 
                        capital expenditures, and related development 
                        costs for a housing project that meets the 
                        requirements of paragraph (2), (3), (4), or 
                        (5); or
                            (ii) to eligible entities under paragraph 
                        (6) for--
                                    (I) operational, working capital, 
                                and organizational expenses; and
                                    (II) predevelopment activities 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.
                    (B) Use agreement.--A project receiving assistance 
                under this paragraph shall be subject to an agreement 
                (binding on any subsequent owner of such project) that 
                ensures that the project will continue to operate, for 
                a period of not less than 50 years after the date on 
                which any assistance is made available under this 
                paragraph, in a manner that will provide rental housing 
                on terms at least as advantageous to existing and 
                future tenants as the terms required by any program 
                under which the project, if offered, was eligible for 
                assistance, subject to available appropriations.
                    (C) Service of under-served and rural areas.--
                States receiving funds under this section shall ensure 
                that, to the maximum extent practicable, that projects 
                in under-served and rural areas in that State receive 
                assistance.
            (2) Projects with hud-insured mortgages.--A project meets 
        the requirements of this paragraph if the project is financed 
        by a loan or mortgage that is--
                    (A) 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);
                    (B) 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
                    (C) 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).
            (3) Projects with section 8 project-based assistance.--A 
        project meets the requirements of this paragraph if the project 
        is subject to a contract for project-based assistance.
            (4) Projects purchased by residents.--A project meets the 
        requirements of this paragraph if--
                    (A) the project 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) the project 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--
                            (i) 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
                            (ii) 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 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), or a farm labor housing development 
                financed under section 514 of the United States Housing 
                Act of 1949 (42 U.S.C. 1484); 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.
            (6) Eligible entities.--
                    (A) In general.--The Secretary shall establish, by 
                regulation, standards for eligible entities under this 
                subsection.
                    (B) Requirements.--An eligible entity shall--
                            (i) be a nonprofit organization (as defined 
                        in section 104 of the Cranston-Gonzalez 
                        National Affordable Housing Act (42 U.S.C. 
                        12704)), or a qualified limited liability 
                        company or a qualified partnership whose 
                        managing member or general partner, 
                        respectively, is--
                                    (I) a nonprofit organization; or
                                    (II) a for-profit entity that is 
                                wholly owned by an eligible non-profit 
                                organization;
                            (ii) 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
                            (iii) demonstrate to the Secretary--
                                    (I) the need for the types of 
                                assistance described under paragraph 
                                (1)(A)(ii);
                                    (II) experience in providing 
                                assistance described under that 
                                paragraph; and
                                    (III) its ability to provide the 
                                assistance described under that 
                                paragraph.
            (7) Funding requirements.--
                    (A) Operating support.--Each State and locality 
                awarded a grant under this section shall transfer at 
                least 5 percent, but no more than 10 percent, of such 
                grant to eligible entities for the purposes described 
                under paragraph (1)(A)(ii)(I).
                    (B) Nonprofit purchases.--Each State and locality 
                awarded a grant under this section shall transfer at 
                least 15 percent of such grant to eligible entities for 
                the purposes described under paragraph (1)(A)(ii)(II).
            (8) Return of unused funds.--If any amount of a grant 
        awarded to a State or locality under this section has not been 
        obligated 3 years after the grant is awarded, such amount shall 
        be returned to the Secretary to be redistributed in accordance 
        with this section the following fiscal year.
            (9) Administrative costs.--A State or locality that is 
        awarded a grant under this section may use no more than 10 
        percent of such grant for costs associated with the 
        administration of the grant.
    (f) Amount of State and Local Grants.--
            (1) In general.--Subject to paragraph (3) and 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 
                subsection (e)(1)(A)(i) that are, due to market 
                conditions or other factors, 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)(1)(A)(i) 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)(1)(A)(i).
            (3) Limitations.--
                    (A) Mandatory allocation.--In any fiscal year, of 
                the total amount appropriated under subsection (k)--
                            (i) 40 percent shall be allocated for 
                        grants to States; and
                            (ii) 60 percent shall be allocated for 
                        grants to localities.
                    (B) Minimum grant amount.--Notwithstanding 
                subsection (g), a State receiving a grant under this 
                section shall receive no less than .4 percent of the 
                total amount appropriated under subsection (k) in any 
                fiscal year.
    (g) Matching Requirement.--
            (1) In general.--Except as provided under paragraph (2), 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, 2003, from non-
        Federal sources for the purposes described in subsection 
        (e)(1).
            (2) Limitations.--Paragraph (1) shall not apply to any 
        amounts to be used by a State or locality for--
                    (A) administrative costs under subsection (e)(9); 
                and
                    (B) operating support and working capital of 
                nonprofit organizations under subsection (e)(7)(A).
            (3) Treatment of previous contributions.--Any portion of 
        amounts contributed after January 1, 2003, 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.
            (4) Tax credits and private activity bonds.--Fifty percent 
        of the annual amount of tax credits allocated to the project 
        under section 42 of the Internal Revenue Code of 1986, or 
        proceeds from private activity bonds issued for qualified 
        residential rental projects under section 142 of that Code, 
        shall be considered funds from non-Federal sources for purposes 
        of paragraph (1).
    (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 
        and eligible entities 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 and eligible entities with amounts made available 
        under those grants.
    (j) Regulations.--Not later than 6 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 2005, 2006, 2007, 2008, and 2009.

SEC. 3. 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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