[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3965 Reported in House (RH)]






                                                 Union Calendar No. 357
110th CONGRESS
  2d Session
                                H. R. 3965

                          [Report No. 110-579]

 To extend the Mark-to-Market program of the Department of Housing and 
               Urban Development, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 25, 2007

 Ms. Waters (for herself, Mr. Frank of Massachusetts, and Ms. Pryce of 
    Ohio) introduced the following bill; which was referred to the 
                    Committee on Financial Services

                             April 10, 2008

              Additional sponsors: Mr. Baca and Ms. Clarke

                             April 10, 2008

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
  [For text of the introduced bill, see copy of bill as introduced on 
                           October 25, 2007]

_______________________________________________________________________

                                 A BILL


 
 To extend the Mark-to-Market program of the Department of Housing and 
               Urban Development, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Mark-to-Market 
Extension and Enhancement Act of 2007''.
    (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. Funding for tenant and other participation and capacity 
                            building.
Sec. 6. Exception rents.
Sec. 7. Otherwise eligible projects.
Sec. 8. Disaster-damaged eligible projects.
Sec. 9. Period of eligibility for nonprofit debt relief.
Sec. 10. Acquisition of restructured projects by nonprofit 
                            organizations.
Sec. 11. Mark-to-market for moderate rehabilitation projects.
Sec. 12. Enhanced voucher assistance upon contract termination.
Sec. 13. Correcting harm caused by late subsidy payments.
Sec. 14. Effective date.

SEC. 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.

SEC. 3. DEFINITIONS.

    Section 512 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1437f 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.''.

SEC. 4. EXTENSION OF MARK-TO-MARKET PROGRAM.

    Section 579 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by striking 
``October 1, 2011'' each place such term appears and inserting 
``October 1, 2012''.

SEC. 5. FUNDING FOR TENANT AND OTHER PARTICIPATION AND CAPACITY 
              BUILDING.

    Paragraph (3) of section 514(f) of the Multifamily Assisted Housing 
Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is 
amended--
            (1) in subparagraph (A)--
                    (A) in the first sentence--
                            (i) by striking ``not more than'' and 
                        inserting ``not less than'';
                            (ii) by striking ``of low-income housing 
                        for which project-based rental assistance is 
                        provided at below market rent levels and may 
                        not be renewed'' and inserting the following: 
                        ``and improvement of low-income housing for 
                        which project-based rental assistance, 
                        subsidized loans, or enhanced vouchers under 
                        section 8(t) are provided''; and
                            (iii) in the second parenthetical clause, 
                        by inserting before the closing parenthesis the 
                        following: ``, and predevelopment assistance to 
                        enable such transfers''; and
                    (B) by inserting after the period at the end the 
                following: ``For outreach and training of tenants and 
                technical assistance, the Secretary shall implement a 
                grant program utilizing performance-based outcome 
                measures for eligible costs incurred. Recipients 
                providing capacity building or technical assistance 
                services to tenant groups shall be qualified nonprofit 
                Statewide, countywide, areawide or citywide 
                organizations with demonstrated experience including at 
                least a two-year recent track record of organizing and 
                providing assistance to tenants, and independence from 
                the owner, a prospective purchaser, or their managing 
                agents. The Secretary may provide assistance and 
                training to grantees in administrative and fiscal 
                management to ensure compliance with applicable Federal 
                requirements. The Secretary shall expedite the 
                provision of funding for fiscal year 2008 by entering 
                into new multi-year contracts with any prior grantee 
                without adverse audit findings or whose adverse audit 
                findings have been cleared, and by entering into an 
                interagency agreement for not less than $1,000,000 with 
                the Corporation for National and Community Service or 
                any other agency of the Federal Government, that is 
                selected by the Secretary and the Secretary determines 
                is qualified to conduct such program, to conduct a 
                tenant outreach and training program under the same or 
                similar terms and conditions as was most recently 
                conducted by the Corporation. The Secretary shall also 
                make available flexible grants to qualified nonprofit 
                organizations that do not own eligible multifamily 
                properties, for tenant outreach in underserved areas, 
                and to experienced national or regional nonprofit 
                organizations to provide specialized training or 
                support to grantees assisted under this section. 
                Notwithstanding any other provision of law, funds 
                authorized under this section for any fiscal year shall 
                be available for obligation in subsequent fiscal years. 
                The Secretary shall require each recipient of amounts 
                made available pursuant to this subparagraph to submit 
                to the Secretary reports, on a quarterly basis, 
                detailing the use of such funds and including such 
                information as the Secretary shall require.''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(D) Prohibitions.--None of the funds made 
                available under subparagraph (A) may be used for any 
                political activities, political advocacy, or lobbying 
                (as such terms are defined by Circular A-122 of the 
                Office of Management and Budget, entitled `Cost 
                Principles for Non-Profit Organizations'), or for 
                expenses for travel to engage in political activities 
                or preparation of or provision of advice on tax 
                returns.
                    ``(E) Program compliance systems.--Each recipient 
                of amounts made available under subparagraph (A) shall 
                develop systems to ensure compliance with the program 
                and the requirements of this paragraph.
                    ``(F) Penalties.--The Secretary may impose 
                penalties on any recipient of amounts made available 
                under subparagraph (A) that fails to comply with any 
                requirement under this paragraph or of the program 
                established pursuant to this paragraph, which penalties 
                may include--
                            ``(i) ineligibility for further assistance 
                        from amounts made available under subparagraph 
                        (A); and
                            ``(ii) requiring the recipient to reimburse 
                        the Secretary for any amounts that were so 
                        misused.''.

SEC. 6. EXCEPTION RENTS.

    In the matter preceding clause (i) of section 514(g)(2)(A) of the 
Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 
U.S.C. 1437f note) is amended--
            (1) by inserting ``disaster-damaged eligible projects and'' 
        after ``waive this limit for''; and
            (2) by striking ``five percent'' and inserting ``9 
        percent''.

SEC. 7. OTHERWISE ELIGIBLE PROJECTS.

    Section 514 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by adding 
at the end the following:
    ``(i) Other Eligible Projects.--
            ``(1) In general.--Notwithstanding any other provision of 
        this subtitle, a project that meets the requirements of 
        subparagraphs (B) and (C) of section 512(2) but does not meet 
        the requirements of subparagraph (A) of section 512(2), may be 
        treated as an eligible multifamily housing project on an 
        exception basis if the Secretary determines, subject to 
        paragraph (2), that such treatment is necessary to preserve the 
        project in the most cost-effective manner in relation to other 
        alternative preservation options.
            ``(2) Owner request.--
                    ``(A) Request required.--The Secretary shall not 
                treat an otherwise eligible project described under 
                paragraph (1) as an eligible multifamily housing 
                project unless the owner of the project requests such 
                treatment.
                    ``(B) No adverse treatment if no request made.--If 
                the owner of a project does not make a request under 
                subparagraph (A), the Secretary shall not withhold from 
                such project any other available preservation option.
            ``(3) Cancellation.--
                    ``(A) Timing.--At any time prior to the completion 
                of a mortgage restructuring under this subtitle, the 
                owner of a project may--
                            ``(i) withdraw any request made under 
                        paragraph (2)(A); and
                            ``(ii) pursue any other option with respect 
                        to the renewal of such owner's section 8 
                        contract pursuant to any applicable statute or 
                        regulation.
                    ``(B) Documentation.--If an owner of a project 
                withdraws such owner's request and pursues other 
                renewal options under this paragraph, such owner shall 
                be entitled to submit documentation or other 
                information to replace the documentation or other 
                information used during processing for mortgage 
                restructuring under this subtitle.
            ``(4) Limitation.--The Secretary may exercise the authority 
        to treat projects as eligible multifamily housing projects 
        pursuant to this subsection only to the extent that the number 
        of units in such projects do not exceed 10 percent of all units 
        for which mortgage restructuring pursuant to section 517 is 
        completed.''.

SEC. 8. 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. 1437f 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. 1437f 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).''.

SEC. 9. 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. 1437f 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)--
                    ``(A) such purchaser shall acquire such project on 
                or before the later of--
                            ``(i) 5 years after the date of recordation 
                        of the affordability agreement; or
                            ``(ii) 2 years after the date of enactment 
                        of the Mark-to-Market Extension and Enhancement 
                        Act of 2007; and
                    ``(B) 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.''.

SEC. 10. ACQUISITION OF RESTRUCTURED PROJECTS BY NONPROFIT 
              ORGANIZATIONS.

    Paragraph (5) of section 517(a) of the Multifamily Assisted Housing 
Reform and Affordability Act of 1997 (42 U.S.C. 1437 note) is amended 
by inserting ``, or the sole general partner of the limited partnership 
owning the project,'' after ``if the project''.

SEC. 11. MARK-TO-MARKET FOR MODERATE REHABILITATION PROJECTS.

    (a) Renewal of Expiring Project-Based Section 8 Moderate 
Rehabilitation Contracts.--Section 524 of the Multifamily Assisted 
Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is 
amended--
            (1) in subsection (a)(4)(A)(iv)--
                    (A) in subclause (I), by inserting ``or'' after the 
                semicolon;
                    (B) by striking subclause (II); and
                    (C) by redesignating subclause (III) as subclause 
                (II); and
            (2) in subsection (b), by striking paragraph (3).
    (b) Rent Adjustments for Covered Projects.--
            (1) Rent determination at initial renewal after 
        enactment.--Upon the first request by an owner of a covered 
        housing project for renewal of project-based assistance 
        pursuant to section 524 of the Multifamily Assisted Housing 
        Reform and Affordability Act of 1997 made after the date of the 
        enactment of this Act--
                    (A) the rent levels at which assistance will be 
                provided pursuant to such renewal shall be determined 
                as if such renewal were the initial renewal of a 
                contract for assistance under section 524, as amended 
                by subsection (a) of this section; and
                    (B) solely for purposes of determining the rent 
                levels at which assistance will be provided pursuant to 
                such first renewal after the date of the enactment of 
                this Act, in the case of a project for which contract 
                rents were reduced upon a prior renewal of an expiring 
                contract pursuant to subsection (b)(3) of section 524, 
                as in effect on the day before the date of the 
                enactment of this Act, the contract rent levels in 
                effect immediately prior to such first renewal after 
                the date of the enactment of this Act shall be the 
                considered to be the deemed rent levels described in 
                paragraph (3)(C).
            (2) Rent adjustments after initial renewal after 
        enactment.--After the first renewal of a contract for 
        assistance of a covered housing project after the date of the 
        enactment of this Act in accordance with paragraph (1) of this 
        subsection, the Secretary of Housing and Urban Development 
        shall adjust rents in accordance with subsection (c) of section 
        524.
            (3) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    (A) The term ``section 524'' means section 524 of 
                the Multifamily Assisted Housing Reform and 
                Affordability Act of 1997 (42 U.S.C. 1437f note).
                    (B) The term ``covered housing project'' means a 
                project that receives project-based assistance under 
                section 8 of the United States Housing Act of 1937 (42 
                U.S.C. 1437f) which was renewed prior to the date of 
                the enactment of this Act pursuant to subsection (b)(3) 
                of section 524, as in effect on the day before the date 
                of the enactment of this Act.
                    (C) The term ``deemed rent levels'' means the 
                contract rent levels in effect immediately prior to the 
                first renewal of assistance pursuant to subsection 
                (b)(3) of section 524, as in effect on the day before 
                the date of the enactment of this Act, upon which 
                contract rent levels were reduced, as adjusted by the 
                applicable operating cost adjustment factor established 
                by the Secretary at the date of such renewal and at the 
                date of any subsequent renewal pursuant to such 
                subsection (b)(3).
                    (D) The term ``Secretary'' means the Secretary of 
                Housing and Urban Development or any public housing 
                agency approved by the Secretary to serve as the 
                contracting party in lieu of the Secretary.

SEC. 12. ENHANCED VOUCHER ASSISTANCE UPON CONTRACT TERMINATION.

    Subsection (d) of section 524 of the Multifamily Assisted Housing 
Reform and Affordability Act of 1997 (42 U.S.C. 1437 note) is amended--
            (1) in the subsection heading, by inserting ``or 
        Termination'' after ``Contract Expiration''; and
            (2) in paragraph (1)--
                    (A) by inserting ``or termination'' after ``the 
                date of the expiration'';
                    (B) by striking ``shall make'' and inserting 
                ``shall provide'';
                    (C) by striking ``available on behalf of'' and 
                inserting ``for''; and
                    (D) by inserting ``or termination'' after ``the 
                date of such expiration''.

SEC. 13. CORRECTING HARM CAUSED BY LATE SUBSIDY PAYMENTS.

    Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f) is amended by adding at the end the following new subsection:
    ``(ff) Late Payments.--
            ``(1) General.--The Secretary shall make payments of 
        project-based rental assistance provided under this section for 
        each month on or before the due date under paragraph (2) for 
        the payment.
            ``(2) Due date.--The due date under this paragraph for a 
        monthly payment is the first business day of the month.
            ``(3) Notification of late payment.--The Secretary shall 
        notify a project owner at least 10 days before the due date for 
        a housing assistance payment if such payment will be late and 
        shall inform the project owner of the approximate date the 
        payment will be made.
            ``(4) Use of reserves.--If a housing assistance payment for 
        a project has not been received before the expiration of the 
        10-day period beginning upon the due date for such payment, the 
        project owner shall, after the expiration of such period, be 
        entitled to obtain funds from a project replacement reserve, 
        residual receipts reserve, or other project reserve in order to 
        pay operating and debt service costs for the project. Upon 
        receipt of the monthly housing assistance payment from the 
        Secretary, the project owner shall promptly replace or 
        replenish any such funds advanced pursuant to the preceding 
        sentence.
            ``(5) Interest payment.--If a monthly housing assistance 
        payment is not made before the expiration of the 30-day period 
        beginning upon the due date for such payment, the Secretary 
        shall pay to the owner simple interest on the amount of such 
        monthly payment, from the due date until the date of payment, 
        at a rate determined by the Secretary of Treasury in accordance 
        with section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 
        611). Interest payments under this paragraph shall be made from 
        amounts made available for management and administration of the 
        Department of Housing and Urban Development.''.

SEC. 14. 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, 2008.
                                                 Union Calendar No. 357

110th CONGRESS

  2d Session

                               H. R. 3965

                          [Report No. 110-579]

_______________________________________________________________________

                                 A BILL

 To extend the Mark-to-Market program of the Department of Housing and 
               Urban Development, and for other purposes.

_______________________________________________________________________

                             April 10, 2008

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed