II 110th CONGRESS 2d Session S. 3363 IN THE SENATE OF THE UNITED STATES July 30, 2008 Mr. Tester introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To expedite the transfer of ownership of rural multifamily housing projects with loans made or insured under section 515 of the Housing Act of 1949 so that such projects are rehabilitated and preserved for use for affordable housing.

1.

Short title

This Act may be cited as the Section 515 Rural Housing Property Transfer Improvement Act of 2008.

2.

Congressional findings

Congress finds that— (1)providing rural housing for poor families in the United States has been an important goal, and the primary reason for enactment, of the Housing Act of 1949; (2)rural multifamily housing financed under the section 515 of the Housing Act of 1949 has been an essential resource for providing affordable housing for some of the Nation’s poorest families; (3)the majority of the approximately 16,000 projects financed under section 515 that currently have loans outstanding were constructed more than 25 years ago and need new financing in order to continue to provide decent, affordable housing for families eligible to reside in such housing; (4)many owners of such projects are working to transfer the properties, which often involves leveraging Federal resources with private and commercial resources; and (5)the Secretary of Agriculture should protect the portfolio of section 515 projects by making administrative and procedural changes to process ownership transfers in a commercially reasonable time and manner when such transfers will further the preservation of such projects for use as affordable housing for families eligible to reside in such housing.

3.

Transfers of section 515 rural multifamily housing projects

Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) is amended— (1)by inserting (1) Condition.— after (h); and (2)by adding at the end the following: (2)

Transfers for preservation and rehabilitation of projects

(A)

In general

The Secretary shall make such administrative and procedural changes as may be necessary to expedite the approval of applications to transfer ownership of projects for which a loan is made or insured under this section for the preservation, continued use restriction, and rehabilitation of such projects. Such changes may include changing approval procedures, increasing staff and resources, improving outreach to project sponsors regarding information that is required to be submitted for such approvals, changing approval authority between national offices and the State and local offices, simplifying approval requirements, establishing uniformity of transfer requirements among State offices, and any other actions which would expedite approvals. (B)

Consultation

The Secretary of Agriculture shall consult with the Commissioner of the Internal Revenue Service and the Secretary of Housing and Urban Development, and take such actions as are appropriate in conjunction with such consultation, to simplify the coordination of rules, regulations, forms (including applications for transfers of project ownership), and approval requirements for housing projects for which assistance is provided by the Secretary of Agriculture and under any low-income housing tax credits under section 42 of the Internal Revenue Code of 1986 or tax-exempt housing bonds. The Secretary of Agriculture shall involve the State Rural Development offices of Department of Agriculture and the Administrator of the Rural Housing Service in the consultations under this subparagraph as the Secretary considers appropriate. (C)

Preservation and rehabilitation

The Secretary shall actively facilitate transfers of the ownership of projects that will result in the preservation, continued use restriction, and rehabilitation of such projects. (D)

Final authority over transfers

The Office of Rental Housing Preservation of the Rural Housing Service, established under section 537, shall have final regulatory authority over all transfers of properties for which a loan is made or insured under this section, and such Office may, with respect to such transfers, work with and seek recommendations from the State Rural Development offices of the Department of Agriculture. (E)

Deadlines for processing of transfer applications

(i)

Procedure

If a complete application, as determined by the Secretary, for a transfer of ownership of a project or projects is not processed, and approved or denied, by the State Rural Development office to which it is submitted before the applicable deadline under clause (ii)— (I)such State or local office shall not have any further authority to approve or deny the application; (II)such State or local office shall transfer the application in accordance with subclause (III); and (III)such application shall be processed, and approved or denied, in accordance with clause (iii) and only by the Office of Rental Housing Preservation, which may make the final determination with the assistance of other Rural Development employees. (ii)

Deadline for State and local offices

The applicable deadline under this clause for processing, and approval or denial, of a complete application for transfer of ownership of a project, or projects, shall be the period that begins upon receipt of the complete application by the State Rural Development office to which it is submitted and consists of— (I)in the case of an application for transfer of ownership of a single project, 45 days; (II)in the case of an application for transfer of ownership of multiple projects, but not exceeding 10 projects, 90 days; and (III)in the case of an application for transfer of ownership of 11 or more projects, 120 days. (iii)

Deadline for Office of Rental Housing Preservation

In the case of any complete application for a transfer of ownership of a project, or projects, that is transferred pursuant to clause (i), shall be processed, and approved or denied, before the expiration of the period that begins upon receipt of the complete application and consists of— (I)in the case of an application for transfer of ownership of a single project, 30 days; (II)in the case of an application for transfer of ownership of multiple projects, but not exceeding 10 projects, 60 days; and (III)in the case of an application for transfer of ownership of 11 or more projects, 120 days. (iv)

Appeals

Only decisions regarding complete applications shall be appealable to the National Appeals Division of the Department of Agriculture. .

4.

Report

Not later than July 1, 2008, the Secretary of Agriculture 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 that— (1)identifies the actions that the Secretary has taken to coordinate with other Federal agencies, including the Department of Housing and Urban Development and the Internal Revenue Service, and, in particular, with the program for rental assistance under section 8 of the United States Housing Act of 1937, the multifamily mortgage insurance programs under title II of the National Housing Act, the program under section 42 of the Internal Revenue Code of 1986 for low-income housing tax credits, and the program for tax-exempt bonds under section 142 of such Code; (2)identifies and describes any resulting improvements within Rural Housing Service of the Department of Agriculture in expediting the transfer of ownership of projects with loans made or insured under section 515 of the Housing Act of 1949; and (3)makes recommendations for any legislative changes that are needed for the prompt processing of applications for such ownership transfers and for the transfer of such projects.