[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''.
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