II 109th CONGRESS 2d Session S. 3511 IN THE SENATE OF THE UNITED STATES June 14, 2006 Mr. Allard (for himself and Mr. Reed) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To extend for 5 years the Mark-to-Market program of the Department of Housing and Urban Development.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Mark-to-Market Extension Act of 2006. (b)

Table of contents

The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Purposes. Sec. 3. Definitions. Sec. 4. Extension of Mark-to-Market program. Sec. 5. Exception rents. Sec. 6. Otherwise eligible projects with at-or-below-market rents. Sec. 7. Disaster-damaged eligible projects. Sec. 8. Period of eligibility for nonprofit debt relief. Sec. 9. Effective date.

2.

Purposes

The purpose of this Act is to— (1)continue the progress of the Multifamily Assisted Housing Reform and Affordability Act of 1997, as amended by the Mark-To-Market Extension Act of 2001; (2)expand eligibility for Mark-to-Market restructuring so as to further the preservation of affordable housing in a cost-effective manner; and (3)provide for the preservation and rehabilitation of projects damaged by Hurricanes Katrina, Rita, and Wilma, or by other natural disasters.

3.

Definitions

Section 512 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by adding at the end the following: (20)

Disaster-damaged eligible project

(A)

In general

The term disaster-damaged eligible project means an otherwise eligible multifamily housing project— (i)that is located in a county that was designated a major disaster area on or after January 1, 2005, by the President pursuant to title IV of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.); (ii)whose owner carried casualty and liability insurance covering such project in an amount required by the Secretary; (iii)that suffered damages not covered by such insurance that the Secretary determines is likely to exceed $5,000 per unit in connection with the natural disaster that was the subject of the designation described in subparagraph (A); and (iv)whose owner requests restructuring of the project not later than 2 years after the date that such damage occurred. (B)

Rule of construction

A disaster-damaged eligible project shall be eligible for amounts under this Act without regard to the relationship between rent levels for the assisted units in such project and comparable rents for the relevant market area. .

4.

Extension of Mark-to-Market program

Section 579 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by striking October 1, 2006 each place that term appears and inserting October 1, 2011.

5.

Exception rents

Section 514(g)(2) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is amended— (1)by inserting disaster-damaged eligible projects and after waive this limit; and (2)by striking five percent and inserting 9 percent.

6.

Otherwise eligible projects with at-or-below-market rents

Section 512(2)(A) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is amended— (1)by inserting (i) after (A); (2)by striking the semicolon and inserting ; or; and (3)by adding at the end the following: (ii)with rents below the level specified in clause (i) if the Secretary determines that— (I)such property is worthy of preservation; and (II)treating such project as an eligible multifamily housing project will be cost-effective to the Secretary in relation to alternative preservation options. .

7.

Disaster-damaged eligible projects

(a)

Market rent determinations

Section 514(g)(1)(B) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by striking determined, are equal and inserting the following: “determined— (i)with respect to a disaster-damaged eligible property, are equal to 100 percent of the fair market rents for the relevant market area (as such rents were in effect at the time of such disaster; and (ii)with respect to other eligible multifamily housing projects, are equal . (b)

Owner investment

Section 517(c) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by adding at the end the following: (3)

Properties damaged by natural disasters

With respect to a disaster-damaged eligible property, the owner contribution toward rehabilitation needs shall be determined in accordance with paragraph (2)(C). .

8.

Period of eligibility for nonprofit debt relief

Section 517(a)(5) of the Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by adding at the end the following: “If such purchaser acquires such project subsequent to the date of recordation of the affordability agreement described in section 514(e)(6)— (1)such purchaser shall acquire such project on or before the later of— (A)5 years after the date of recordation of the affordability agreement; or (B)2 years after the date of enactment of the Mark-to-Market Extension Act of 2006; and (2)the Secretary shall have received, and determined acceptable, such purchaser's application for modification, assignment, or forgiveness prior to the acquisition of the project by such purchaser. .

9.

Effective date

This Act, and the amendments made by this Act, shall take effect on the earlier of— (1)the date of enactment of this Act; or (2)September 30, 2006.