I 113th CONGRESS 1st Session H. R. 1397 IN THE HOUSE OF REPRESENTATIVES March 21, 2013 Ms. Waters (for herself, Mr. Ellison , Mr. Cicilline , Mrs. Beatty , Ms. Bass , Mrs. Christensen , Ms. Eddie Bernice Johnson of Texas , Ms. Wilson of Florida , Mr. Payne , Ms. Sewell of Alabama , Mr. David Scott of Georgia , Mr. Johnson of Georgia , Mr. Cleaver , Mr. Hastings of Florida , Mr. Veasey , Mr. Richmond , Mr. Clyburn , Mr. Watt , Mr. Thompson of Mississippi , and Ms. Edwards ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To create jobs and reinvest in communities through the rehabilitation of abandoned and foreclosed residential and commercial properties, and for other purposes.

1. Short title and table of contents (a) Short title This Act may be cited as the Project Rebuild Act of 2013 . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title and table of contents. Sec. 2. Direct appropriations. Sec. 3. Allocation of appropriated amounts. Sec. 4. Use of funds. Sec. 5. Limitations. Sec. 6. Rules of construction. Sec. 7. Authority to specify alternative requirements. Sec. 8. Nationwide distribution of resources. Sec. 9. Limitation on use of funds with respect to eminent domain. Sec. 10. Limitation on distribution of funds. Sec. 11. Rental housing preferences. Sec. 12. Job creation. Sec. 13. Program support and capacity building. Sec. 14. Enforcement and prevention of fraud and abuse. Sec. 15. Conformance of policies and procedures. Sec. 16. Severability. Sec. 17. Buy American—use of American iron, steel, and manufactured goods. Sec. 18. Wage rate and employment protection requirements. 2. Direct appropriations There is appropriated, out of any money in the Treasury not otherwise appropriated, $15,000,000,000, to remain available until September 30, 2016, for assistance to eligible entities, including States and units of general local government (as such terms are defined in section 102 of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5302 )), and qualified nonprofit organizations, businesses or consortia of eligible entities, for the redevelopment of abandoned and foreclosed-upon properties and for the stabilization of affected neighborhoods. 3. Allocation of appropriated amounts (a) In general Of the amounts appropriated, two-thirds shall be allocated to States and units of general local government based on a funding formula established by the Secretary of Housing and Urban Development (in this Act referred to as the Secretary ). Of the amounts appropriated, one-third shall be distributed competitively to eligible entities. (b) Formula To be devised swiftly The funding formula required under subsection (a) shall be established and the Secretary shall announce formula funding allocations, not later than 30 days after the date of enactment of this Act. (c) Formula criteria The Secretary may establish a minimum grant size, and the funding formula required under subsection (a) shall ensure that any amounts appropriated or otherwise made available under this Act are allocated to States and units of general local government with the greatest need, as such need is determined in the discretion of the Secretary based on— (1) the number and percentage of home foreclosures in each State or unit of general local government; (2) the number and percentage of homes in default or delinquency in each State or unit of general local government; and (3) other factors such as established program designs, grantee capacity and performance, number and percentage of commercial foreclosures, overall economic conditions, and other market needs data, as determined by the Secretary. (d) Competition criteria (1) Eligible entities For the funds distributed competitively, eligible entities shall be States, units of general local government, nonprofit entities, for-profit entities, and consortia of eligible entities that demonstrate capacity to use funding within the period of this program. (2) Selection criteria In selecting grantees, the Secretary shall ensure that grantees are in areas with the greatest number and percentage of residential and commercial foreclosures and other market needs data, as determined by the Secretary. Additional award criteria shall include demonstrated grantee capacity to execute projects involving acquisition and rehabilitation or redevelopment of foreclosed residential and commercial property and neighborhood stabilization, leverage, knowledge of market conditions and of effective stabilization activities to address identified conditions, and any additional factors determined by the Secretary. (3) Minimum grant size The Secretary may establish a minimum grant size. (4) Publication of criteria The Secretary shall publish competition criteria for any grants awarded under this Act not later than 60 days after appropriation of funds, and applications shall be due to the Secretary within 120 days. 4. Use of funds (a) Obligation and expenditure The Secretary shall obligate all funding within 150 days of enactment of this Act. Any eligible entity that receives amounts pursuant to this Act shall expend all funds allocated to it within three years of the date the funds become available to the grantee for obligation. Furthermore, the Secretary shall by notice establish intermediate expenditure benchmarks at the one and two year dates from the date the funds become available to the grantee for obligation. (b) Priorities (1) Job creation Each grantee or eligible entity shall describe how its proposed use of funds will prioritize job creation, and secondly, will address goals to stabilize neighborhoods, reverse vacancy, or increase or stabilize residential and commercial property values. (2) Targeting Any State or unit of general local government that receives formula amounts pursuant to this Act shall, in distributing and targeting such amounts give priority emphasis and consideration to those metropolitan areas, metropolitan cities, urban areas, rural areas, low- and moderate-income areas, and other areas with the greatest need, including those— (A) with the greatest percentage of home foreclosures; (B) identified as likely to face a significant rise in the rate of residential or commercial foreclosures; and (C) with higher than national average unemployment rate. (3) Leverage Each grantee or eligible entity shall describe how its proposed use of funds will leverage private funds. (c) Eligible uses Amounts made available under this Act may be used to— (1) establish financing mechanisms for the purchase and redevelopment of abandoned and foreclosed-upon properties, including such mechanisms as soft-seconds, loan loss reserves, and shared-equity loans for low- and moderate-income homebuyers; (2) purchase and rehabilitate properties that have been abandoned or foreclosed-upon, in order to sell, rent, or redevelop such properties; (3) establish and operate land banks for properties that have been abandoned or foreclosed-upon; (4) demolish blighted structures; (5) redevelop abandoned, foreclosed, demolished, or vacant properties; and (6) engage in other activities, as determined by the Secretary through notice, that are consistent with the goals of creating jobs, stabilizing neighborhoods, reversing vacancy reduction, and increasing or stabilizing residential and commercial property values. 5. Limitations (a) On purchases Any purchase of a property under this Act shall be at a price not to exceed its current market value, taking into account its current condition. (b) Rehabilitation Any rehabilitation of an eligible property under this Act shall be to the extent necessary to comply with applicable laws, and other requirements relating to safety, quality, marketability, and habitability, in order to sell, rent, or redevelop such properties or provide a renewable energy source or sources for such properties. (c) Sale of homes If an abandoned or foreclosed-upon home is purchased, redeveloped, or otherwise sold to an individual as a primary residence, then such sale shall be in an amount equal to or less than the cost to acquire and redevelop or rehabilitate such home or property up to a decent, safe, marketable, and habitable condition. (d) On demolition of public housing Public housing, as defined in section 3(b)(6) of the United States Housing Act of 1937, may not be demolished with funds under this Act. (e) On demolition activities No more than 10 percent of any grant made under this Act may be used for demolition activities unless the Secretary determines that such use represents an appropriate response to local market conditions. (f) On use of funds for non-Residential property No more than 30 percent of any grant made under this Act may be used for eligible activities under paragraphs (1), (2), and (5) of section 4(c) that will not result in residential use of the property involved unless the Secretary determines that such use represents an appropriate response to local market conditions. 6. Rules of construction (a) In general Except as otherwise provided by this Act, amounts appropriated, revenues generated, or amounts otherwise made available to eligible entities under this Act shall be treated as though such funds were community development block grant funds under title I of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5301 et seq. ). (b) No match No matching funds shall be required in order for an eligible entity to receive any amounts under this Act. (c) Tenant protections An eligible entity receiving a grant under this Act shall comply with the 14th, 17th, 18th, 19th, 20th, 21st, 22nd, and 23rd provisos of the heading Community Planning and Development—Community Development Fun in title XII of Division A of the American Recovery and Reinvestment Act of 2009 ( Public Law 111–5 , 123 Stat. 218–19), as amended by section 1497(b)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Public Law 111–203 , 124 Stat. 2211). (d) Vicinity hiring An eligible entity receiving a grant under this Act shall comply with section 1497(a)(8) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Public Law 111–203 , 129 Stat. 2210). 7. Authority to specify alternative requirements (a) In general In administering the program under this Act, the Secretary may specify alternative requirements to any provision under title I of the Housing and Community Development Act of 1974 or under title I of the Cranston-Gonzalez National Affordable Housing Act of 1990 (except for those provisions in these laws related to fair housing, nondiscrimination, labor standards, and the environment) for the purpose of expediting and facilitating the use of funds under this Act. (b) Notice The Secretary shall provide written notice of intent to the public via internet to exercise the authority to specify alternative requirements under subsection (a). (c) Low- and moderate-Income requirement (1) In general Notwithstanding the authority of the Secretary under subsection (a)— (A) all of the formula and competitive grantee funds appropriated or otherwise made available under this Act shall be used with respect to individuals and families whose income does not exceed 120 percent of area median income; and (B) not less than 25 percent of the formula and competitive grantee funds appropriated or otherwise made available under this Act shall be used for the purchase and redevelopment of eligible properties that will be used to house individuals or families whose incomes do not exceed 50 percent of area median income. (2) Recurrent requirement The Secretary shall, by rule or order, ensure, to the maximum extent practicable and for the longest feasible term, that the sale, rental, or redevelopment of abandoned and foreclosed-upon homes and residential properties under this Act remain affordable to individuals or families described in paragraph (1). 8. Nationwide distribution of resources Notwithstanding any other provision of this Act, each State shall receive not less than $20,000,000 of formula funds. 9. Limitation on use of funds with respect to eminent domain No State or unit of general local government may use any amounts received pursuant to this Act to fund any project that seeks to use the power of eminent domain, unless eminent domain is employed only for a public use, which shall not be construed to include economic development that primarily benefits private entities. 10. Limitation on distribution of funds (a) In general None of the funds made available under this Act shall be distributed to— (1) an organization which has been indicted for a violation under Federal law relating to an election for Federal office; or (2) an organization which employs applicable individuals. (b) Applicable individuals defined In this section, the term applicable individual means an individual who— (1) is— (A) employed by the organization in a permanent or temporary capacity; (B) contracted or retained by the organization; or (C) acting on behalf of, or with the express or apparent authority of, the organization; and (2) has been indicted for a violation under Federal law relating to an election for Federal office. 11. Rental housing preferences Each State and local government receiving formula amounts shall establish procedures to create preferences for the development of affordable rental housing. 12. Job creation If a grantee chooses to use funds to create jobs by establishing and operating a program to maintain eligible neighborhood properties, not more than 10 percent of any grant may be used for that purpose. 13. Program support and capacity building The Secretary may use up to 0.75 percent of the funds appropriated for capacity building of and support for eligible entities and grantees undertaking neighborhood stabilization programs, staffing, training, technical assistance, technology, monitoring, travel, enforcement, research, and evaluation activities, subject to the following requirements: (1) Funds set aside for the purposes of this section shall remain available until September 30, 2018. (2) Any funds made available under this section and used by the Secretary for personnel expenses related to administering funding under this subparagraph shall be transferred to Personnel Compensation and Benefits, Community Planning and Development . (3) Any funds made available under this section and used by the Secretary for training or other administrative expenses shall be transferred to Administration, Operations, and Management, Community Planning and Development for non-personnel expenses. (4) Any funds made available under this section and used by the Secretary for technology shall be transferred to Working Capital Fund . 14. Enforcement and prevention of fraud, waste, and abuse The Secretary shall establish and implement procedures to prevent fraud and abuse of funds under this Act, and shall impose a requirement that grantees have an internal auditor to continuously monitor grantee performance to prevent fraud, waste, and abuse. Grantees shall provide the Secretary and citizens with quarterly progress reports. The Secretary shall recapture funds from formula and competitive grantees that do not expend 100 percent of allocated funds within 3 years of the date that funds become available, and from underperforming or mismanaged grantees, and shall re-allocate those funds by formula to target areas with the greatest need, as determined by the Secretary through notice. The Secretary may take an alternative sanctions action only upon determining that such action is necessary to achieve program goals in a timely manner. 15. Conformance of policies and procedures The Secretary of Housing and Urban Development shall to the extent feasible conform policies and procedures for grants made under this Act to the policies and practices already in place for the grants made under section 2301 of the Housing and Economic Recovery Act of 2008; division A, title XII of the American Recovery and Reinvestment Act of 2009; or section 1497 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. 16. Severability If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act and the application of such provision to other persons or circumstances shall not be affected thereby. 17. Buy American—use of American iron, steel, and manufactured goods (a) Buy American None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States. (b) Exceptions Subsection (a) shall not apply in any case or category of cases in which the head of the Federal department or agency involved finds that— (1) applying subsection (a) would be inconsistent with the public interest; (2) iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or (3) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent. (c) Publication If the head of a Federal department or agency determines that it is necessary to waive the application of subsection (a) based on a finding under subsection (b), the head of the department or agency shall publish in the Federal Register a detailed written justification as to why the provision is being waived. (d) Consistency with international agreements This section shall be applied in a manner consistent with United States obligations under international agreements. 18. Wage rate and employment protection requirements (a) Wage rates Notwithstanding any other provision of law and in a manner consistent with other provisions in this Act, all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to this Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. (b) Labor standards With respect to the labor standards specified in this section, the Secretary of Labor shall have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States Code. (c) Projects Projects as defined under title 49, United States Code, funded directly by or assisted in whole or in part by and through the Federal Government pursuant to this Act shall be subject to the requirements of section 5333(b) of title 49, United States Code.