Instructions: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Input: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Affordable Housing Preservation Act
of 2008''.

SEC. 2. AFFORDABLE HOUSING PRESERVATION PILOT PROGRAM.

(a) Establishment.--The Secretary of Housing and Urban Development
shall establish a pilot program under which funds in the residual
receipts account of an eligible multifamily housing property are
transferred, at the time of a qualified sale or exchange, to a
preservation entity.
(b) Purpose.--The purpose of the pilot program established under
this section is to facilitate the transfer of multifamily housing
projects with expiring section 8 housing assistance payments contracts
to preservation entities that are committed to maintaining the
affordability and preservation of such projects by allowing expanded
access to existing residual receipts to assist with the acquisition and
rehabilitation of the project.
(c) Use of Funds.--A preservation entity that acquires an eligible
multifamily housing property through a qualified sale or exchange shall
use the funds in the residual receipts account transferred to it--
(1) to pay for rehabilitation costs approved by the housing
agency;
(2) to deposit funds into the replacement reserve account
of the property;
(3) to pay for social and other services that directly
benefit the tenants of such property, but in any 1 year such
payments may not exceed 10 percent of the balance of the
residual receipts account of the property at the end of the
prior fiscal year;
(4) to pay for costs associated with the acquisition of the
property, but such payments may not exceed 50 percent of the
amount in the residual receipts account of the property at the
time of acquisition; and
(5) to pay for any other costs that have been approved by
the housing agency and will directly benefit the tenants of the
property.
(d) Responsibilities of the Secretary.--The Secretary of Housing
and Urban Development, or his or her designee, shall--
(1) determine whether the plan for rehabilitation and
operation of a preservation entity--
(A) maintains and restores the decent, safe, and
sanitary condition of the eligible multifamily housing
property; and
(B) is viable for not less than 30 years; and
(2) monitor the affordability and use restrictions for the
eligible multifamily housing property.
(e) Penalty for Noncompliance.--If the Secretary of Housing and
Urban Development determines that all or a portion of an eligible
multifamily housing property acquired by a preservation entity under
this section is not in compliance with the requirements of this
section, the preservation entity shall reimburse the Secretary an
amount equal to the amount originally transferred from the residual
receipts account at the time of acquisition, less the product of 3.33
percent of such amount, multiplied by the number of years after the
qualified sale or exchange that the property was in compliance with the
requirements of this section.
(f) Designation.--The Secretary shall, not later than 6 months
after the date of enactment of this Act, designate not less than 3
States in which the program established under this section shall be
carried out. In selecting the States in which to carry out the program,
the Secretary shall--
(1) consider States with the greatest number of units
receiving project-based housing assistance payments under
section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f) where such units are located in active multifamily
housing projects whose section 8 housing assistance payments
contracts are set to expire between fiscal years 2009 and
fiscal years 2011;
(2) consider States with eligible multifamily housing
properties that have residual receipt account balances that can
provide a meaningful preservation resource;
(3) aim for a regionally diverse sample of States; and
(4) consider the extent to which market forces may drive
the conversion of eligible low-income housing to market-based
rents.
(g) Report to Congress.--
(1) Timing of report.--Not later than 3 years after the
initiation of the pilot program established under this section,
the Secretary of Housing and Urban Development shall submit a
report to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives.
(2) Content of report.--The report required under paragraph
(1) shall include an analysis of--
(A) the effectiveness of expanding the use of
amounts in the residual receipts accounts of eligible
multifamily housing properties to include preservation
activities; and
(B) which States or regions of the United States
could most benefit from the expansion of such eligible
uses.
(h) Effective Date.--This section shall apply to qualified sales or
exchanges made during the period beginning December 31, 2007 and ending
December 31, 2013.
(i) Definitions.--In this section, the following definitions shall
apply:
(1) Affordability and use restrictions.--The term
''affordability and use restrictions'' means the affordability
and use restrictions in connection with project-based housing
assistance payments made under section 8 of the United States
Housing Act of 1937 (42 U.S.C. 1437f).
(2) Extended use period.--The term ''extended use period''
means the period beginning on the date of sale and ending on
the earlier of--
(A) 30 years after the close of the sale; or
(B) the date that the property is acquired by
foreclosure (or instrument in lieu of foreclosure).
(3) Eligible multifamily housing property.--The term
''eligible multifamily housing property'' means a project
that--
(A) is receiving project-based housing assistance
payments under section 8 of the United States Housing
Act of 1937 (42 U.S.C. 1437f); and
(B) was financed pursuant to part 883 of title 24,
Code of Federal Regulations, on or after February 29,
1980.
(4) Housing agency.--The term ''housing agency'' means,
with respect to any eligible multifamily housing property, the
housing agency which administers housing assistance with
respect to such property.
(5) Preservation entity.--The term ''preservation entity''
means a housing agency, organization, or entity (for profit or
nonprofit) approved by the Secretary of Housing and Urban
Development, or his or her designee, that has the capacity and
commitment to successfully acquire and preserve an eligible
multifamily housing property.
(6) Qualified sale or exchange.--
(A) In general.--The term ''qualified sale or
exchange'' means the sale of an eligible multifamily
housing property to, or an exchange of such property
with, a preservation entity which agrees to maintain
affordability and use restrictions regarding the
property that are--
(i) for a term of not less than the
extended use period; and
(ii) legally enforceable.
(B) Future applicability of restrictions.--The
restrictions under subparagraph (A) shall be--
(i) binding on all successors of the
preservation entity; and
(ii) recorded as a restrictive covenant on
the property pursuant to State law.
(C) Certification by program administrator.--The
term ''qualified sale or exchange'' shall not include
any sale or exchange of property unless the housing
agency certifies that--
(i) the transferee with respect to such
property is a preservation entity;
(ii) affordability and use restrictions
will be maintained with respect to such
property during the extended use period; and
(iii) new capital will be expended that--
(I) maintains or restores the
decent, safe, and sanitary condition of
the property; and
(II) funds adequate reserves.
(7) Residual receipts.--The term ''residual receipts''
means funds generated by a property in excess of the amount
needed for operating expenses, operating reserve requirements,
and allowable distributions to project owners.
(j) Residual Receipts Not Treated as Federal Funds.--For the
purposes of section 42 of the Internal Revenue Code of 1986, residual
receipts used pursuant to the pilot program established under this
section shall not be considered Federal funds.
Output:
Affordable Housing Preservation Act of 2008 - Directs the Secretary of Housing and Urban Development (HUD) to establish a pilot program under which funds in the residual receipts account of an eligible multifamily housing property are transferred, at the time of a qualified sale or exchange, to preservation entities to facilitate the transfer of multifamily housing projects with expiring section 8 housing assistance payments contracts under the United States Housing Act of 1937.

Defines "preservation entity" as a HUD-approved housing agency, organization, or entity (for profit or nonprofit) that has the capacity and commitment to successfully acquire and preserve an eligible multifamily housing property.

Requires the Secretary to: (1) determine whether the preservation entity's plan for rehabilitation and operation maintains and restores the decent, safe, and sanitary condition of the eligible multifamily housing property, and is viable for at least 30 years; and (2) monitor the affordability and use restrictions for the property.

Imposes penalties on preservation entities for noncompliance with this Act.

Requires the Secretary to designate at least three states to participate in the pilot program.

States that grants shall be used to: (1) pay for rehabilitation costs approved by the housing agency; (2) deposit funds into the property's replacement reserve account; and (3) pay for social and other services that directly benefit the tenants of such property, its associated acquisition costs, and any other costs that have been approved by the housing agency and will directly benefit such tenants.