H. R. 3666—29
ance, or other credit enhancement alternatives, includ-
ing retaining the existing FHA mortgage insurance
on a restructured first mortgage at market value or
using the multifamily risk-sharing mortgage programs,
as provided under section 542 of the Housing and
Community Development Act of 1992. Any limitations
on the number of units available for mortgage insur-
ance under section 542 shall not apply to insurance
issued for purposes of the demonstration program.
(ii) MAXIMUM
PERCENTAGE.—During fiscal year
1997, not more than 25 percent of the units in multi-
family housing projects with expiring contracts in the
demonstration, in the aggregate, may be restructured
without FHA insurance, unless otherwise agreed to
by the owner of a project.
(iii) CREDIT SUBSIDY.—Any credit subsidy costs of
providing mortgage insurance shall be paid from
amounts made available under subsection (l).
(G) MORTGAGE RESTRUCTURING.—
(i) IN GENERAL.—The Secretary or designee may
restructure mortgages to provide a restructured first
mortgage to cover debt service and operating expenses
(including a reasonable rate of return to the owner)
at the market rent, and a second mortgage equal to
the difference between the restructured first mortgage
and the mortgage balance of the eligible multifamily
housing project at the time of restructuring.
(ii) CREDIT SUBSIDY.—Any credit subsidy costs of
providing a second mortgage shall be paid from
amounts made available under subsection (l).
(H) DEBT FORGIVENESS.—The Secretary or designee,
for good cause and at the request of the owner of a multi-
family housing project, may forgive at the time of the
restructuring of a mortgage any portion of a debt on the
project that exceeds the market value of the project.
(I) BUDGET-BASED RENTS.—The Secretary or designee
may renew an expiring contract, including a contract for
a project in which operating costs exceed comparable mar-
ket rents, for a period of not more than one year, at
a budget-based rent that covers debt service, reasonable
operating expenses (including all reasonable and appro-
priate services), and a reasonable rate of return to the
owner, as determined solely by the Secretary, provided
that the contract does not exceed the rent levels under
the expiring contract. The Secretary may establish a pref-
erence under the demonstration program for budget-based
rents for unique housing projects, such as projects des-
ignated for occupancy by elderly families and projects in
rural areas.
(J) SECTION
TENANT-BASED
ASSISTANCE.—For not
more than 10 percent of units in multifamily housing
projects that have had their mortgages restructured in
any fiscal year under the demonstration, the Secretary
or designee may provide, with the agreement of an owner
and in consultation with the tenants of the housing, section
8 tenant-based assistance for some or all of the assisted
units in a multifamily housing project in lieu of section
H. R. 3666—30
8 project-based assistance. Section 8 tenant-based assist-
ance may only be provided where the Secretary determines
and certifies that there is adequate available and affordable
housing within the local area and that tenants will be
able to use the section 8 tenant-based assistance success-
fully.
(2) OFFER AND ACCEPTANCE.—Notwithstanding any other
provision of law, an owner of a project in the demonstration
must accept any reasonable offer made by the Secretary or
a designee under this subsection. An owner may appeal the
reasonableness of any offer to the Secretary and the Secretary
shall respond within 30 days of the date of appeal with a
final offer. If the final offer is not acceptable, the owner may
opt out of the program.
(i) COMMUNITY AND TENANT INPUT.—In carrying out this sec-
tion, the Secretary shall develop procedures to provide appropriate
and timely notice, including an opportunity for comment and timely
access to all relevant information, to officials of the unit of general
local government affected, the community in which the project
is situated, and the tenants of the project.
(j) TRANSFER
OF PROPERTY.—The Secretary shall establish
procedures to facilitate the voluntary sale or transfer of multifamily
housing projects under the demonstration to tenant organizations
and tenant-endorsed community-based nonprofit and public agency
purchasers meeting such reasonable qualifications as may be estab-
lished by the Secretary.
(k) LIMITATION ON DEMONSTRATION AUTHORITY.—The Secretary
shall carry out the demonstration program with respect to mort-
gages not to exceed 50,000 units.
(l) FUNDING.—In addition to the $30,000,000 made available
under section 210 of the Departments of Veterans Affairs and
Housing and Urban Development and Independent Agencies Appro-
priations Act, 1996 (110 Stat. 1321), for the costs (including any
credit subsidy costs associated with providing direct loans or mort-
gage insurance) of modifying and restructuring loans held or
guaranteed by the Federal Housing Administration, as authorized
under this section, $10,000,000 is hereby appropriated, to remain
available until September 30, 1998.
(m) REPORT TO CONGRESS.—
(1) IN GENERAL.—
(A) QUARTERLY
REPORTS.—Not less than every 3
months, the Secretary shall submit to the Congress a report
describing and assessing the status of the projects in the
demonstration program.
(B) FINAL REPORT.—Not later than 6 months after the
end of the demonstration program, the Secretary shall
submit to the Congress a final report on the demonstration
program.
(2) CONTENTS.—Each report submitted under paragraph
(1)(A) shall include a description of—
(A) each restructuring proposal submitted by an owner
of a multifamily housing project, including a description
of the physical, financial, tenancy, and market characteris-
tics of the project;
(B) the Secretary’s evaluation and reasons for each
multifamily housing project selected or rejected for partici-
pation in the demonstration program;
H. R. 3666—31
(C) the costs to the FHA General Insurance and Special
Risk Insurance funds;
(D) the subsidy costs provided before and after
restructuring;
(E) the actions undertaken in the demonstration pro-
gram, including the third-party arrangements made; and
(F) the demonstration program’s impact on the owners
of the projects, including any tax consequences.
(3) CONTENTS
OF
FINAL
REPORT.—The report submitted
under paragraph (1)(B) shall include—
(A) the required contents under paragraph (2); and
(B) any findings and recommendations for legislative
action.
SEC. 213. HAWAIIAN
HOME
LANDS.—Section 282 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
12832) is amended by adding at the end the following new sentence:
‘‘The Secretary may waive this section in connection with the use
of funds made available under this title on lands set aside under
the Hawaiian Homes Commission Act, 1920 (42 Stat. 108).’’.
SEC. 214. USES OF CERTAIN ASSISTED HOUSING AMOUNTS.—
(a) TRANSFER AUTHORITY.—The Secretary may transfer recaptured
section 8 amounts from the Annual Contributions for Assisted Hous-
ing account under Public Law 104–134 (approved April 26, 1996;
110 Stat. 1321, 1321–265) and prior laws to the accounts and
for the purposes set forth in subsection (b). The amounts transferred
under this section shall be made available for use as prescribed
under this section notwithstanding section 8(bb) of the United
States Housing Act of 1937.
(b) RECEIVING ACCOUNTS.—
(1) PREVENTION
OF
RESIDENT
DISPLACEMENT.—The Sec-
retary may transfer to the Prevention of Resident Displacement
account an amount up to $50,000,000, in addition to amounts
in such account, that may be used to extend, under existing
terms and conditions, existing project-based section 8 contracts
in effect before a Plan of Action was approved, so that these
contracts expire 5 years from the date on which funds were
obligated for the Plan of Action approved under the Low-Income
Housing Preservation and Resident Homeownership Act of 1990
or the Emergency Low Income Housing Preservation Act of
1987. The Secretary shall transfer all amounts that the Sec-
retary determines to be necessary for fiscal year 1997 for the
purposes of this paragraph before transferring any amounts
under any other paragraph in this subsection.
(2) HOPWA.—The Secretary may transfer to the Housing
Opportunities for Persons with AIDS account up to $25,000,000,
for use in addition to amounts appropriated in such account.
SEC. 215. REQUIREMENT FOR HUD TO MAINTAIN PUBLIC NOTICE
AND COMMENT RULEMAKING.—The Secretary of Housing and Urban
Development shall maintain all current requirements under part
10 of the Department of Housing and Urban Development’s
regulations (24 CFR part 10) with respect to the Department’s
policies and procedures for the promulgation and issuance of rules,
including the use of public participation in the rulemaking process.
SEC. 216. COMMUNITY DEVELOPMENT BLOCK GRANTS.—Section
102(a)(6)(D) of the Housing and Community Development Act of
1974 (42 U.S.C. 5302(a)(6)(D)) is amended—
(1) in clause (iv), by striking ‘‘or’’ at the end;
H. R. 3666—32
(2) in clause (v), by striking the period at the end and
inserting ‘‘; or’’; and
(3) by adding at the end the following new clause:
‘‘(vi) has entered into a local cooperation agreement
with a metropolitan city that received assistance under
section 106 because of such classification, and has elected
under paragraph (4) to have its population included with
the population of the county for the purposes of qualifying
as an urban county, except that to qualify as an urban
county under this clause, the county must—
‘‘(I) have a combined population of not less than
210,000, excluding any metropolitan city located in
the county that is not relinquishing its metropolitan
city classification, according to the 1990 decennial
census of the Bureau of the Census of the Department
of Commerce;
‘‘(II) including any metropolitan cities located in
the county, have had a decrease in population of 10,061
from 1992 to 1994, according to the estimates of the
Bureau of the Census of the Department of Commerce;
and
‘‘(III) have had a Federal naval installation that
was more than 100 years old closed by action of the
Base Closure and Realignment Commission appointed
for 1993 under the Base Closure and Realignment
Act of 1990, directly resulting in a loss of employment
by more than 7,000 Federal Government civilian
employees and more than 15,000 active duty military
personnel, which naval installation was located within
one mile of an enterprise community designated by
the Secretary pursuant to section 1391 of the Internal
Revenue Code of 1986, which enterprise community
has a population of not less than 20,000, according
to the 1990 decennial census of the Bureau of the
Census of the Department of Commerce.’’.
SEC. 217. FAIR HOUSING
AND FREE SPEECH.—None of the
amounts made available under this Act may be used during fiscal
year 1997 to investigate or prosecute under the Fair Housing Act
any otherwise lawful activity engaged in by one or more persons,
including the filing or maintaining of a nonfrivolous legal action,
that is engaged in solely for the purpose of achieving or preventing
action by a government official or entity, or a court of competent
jurisdiction.
SEC. 218. ACCOUNT TRANSITION.—The amounts of obligated
balances in appropriations accounts, as set forth in title II of the
Departments of Veterans Affairs and Housing and Urban Develop-
ment, and Independent Agencies Appropriations Act, 1996 and prior
Acts that are recaptured hereafter, to the extent not governed
by the specific language in an account or provision in this Act,
shall be held in reserve subject to reprogramming, notwithstanding
any other provision of law.
SEC. 219. TREATMENT OF CERTAIN PROPERTIES.—Notwithstand-
ing any other provision of law, rehabilitation activities undertaken
in projects using the Low-Income Housing Tax Credit allocated
to developments in the city of New Brunswick, New Jersey, in
1991, are deemed to have met the requirements for rehabilitation
in accordance with clause (ii) of the third sentence of section