[Congressional Record (Bound Edition), Volume 145 (1999), Part 16]
[House]
[Pages 22829-22855]
[From the U.S. Government Publishing Office, www.gpo.gov]



PRESERVING AFFORDABLE HOUSING FOR SENIOR CITIZENS AND FAMILIES INTO THE 
                            21ST CENTURY ACT

  Mr. BEREUTER. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 202) to restructure the financing for assisted housing for 
senior citizens and otherwise provide for the preservation of such 
housing in the 21st Century, and for other purposes, as amended.
  The Clerk read as follows:

                                H.R. 202

       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.

       (a) Short Title.--This Act may be cited as the ``Preserving 
     Affordable Housing for Senior Citizens and Families into the 
     21st Century Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Regulations.
Sec. 3. Effective date.

   TITLE I--CONVERSION OF FINANCING AND REFINANCING FOR SECTION 202 
                   SUPPORTIVE HOUSING FOR THE ELDERLY

Sec. 101. Conversion of financing
Sec. 102. Prepayment and refinancing.

 TITLE II--AUTHORIZATION OF APPROPRIATIONS FOR SUPPORTIVE HOUSING FOR 
               THE ELDERLY AND PERSONS WITH DISABILITIES

Sec. 201. Supportive housing for elderly persons.
Sec. 202. Supportive housing for persons with disabilities.
Sec. 203. Service coordinators and congregate services for elderly and 
              disabled housing.

TITLE III--EXPANDING HOUSING OPPORTUNITIES FOR THE ELDERLY AND PERSONS 
                           WITH DISABILITIES

                  Subtitle A--Housing for the Elderly

Sec. 301. Matching grant program.
Sec. 302. Eligibility of for-profit limited partnerships.
Sec. 303. Mixed funding sources.
Sec. 304. Authority to acquire structures.
Sec. 305. Mixed-income occupancy.
Sec. 306. Use of project reserves.
Sec. 307. Commercial activities.
Sec. 308. Mixed finance pilot program.
Sec. 309. Grants for conversion of elderly housing to assisted living 
              facilities.
Sec. 310. Grants for conversion of public housing projects to assisted 
              living facilities.
Sec. 311. Use of section 8 assistance for assisted living facilities.
Sec. 312. Annual HUD inventory of assisted housing designated for 
              elderly persons.
Sec. 313. Treatment of applications.

           Subtitle B--Housing for Persons With Disabilities

Sec. 321. Matching grant program.
Sec. 322. Eligibility of for-profit limited partnerships.
Sec. 323. Mixed funding sources.
Sec. 324. Tenant-based assistance.
Sec. 325. Project size.
Sec. 326. Use of project reserves.
Sec. 327. Commercial activities.

                      Subtitle C--Other Provisions

Sec. 341. Service coordinators.
Sec. 342. Commission on Affordable Housing and Health Care Facility 
              Needs in the 21st Century.

     TITLE IV--RENEWAL OF EXPIRING RENTAL ASSISTANCE CONTRACTS AND 
                        PROTECTION OF RESIDENTS

Sec. 401. Findings and purpose.
Sec. 402. Renewal of expiring contracts and enhanced vouchers for 
              project residents.
Sec. 403. Section 236 assistance.
Sec. 404. Matching grant program for affordable housing preservation.
Sec. 405. Rehabilitation of assisted housing.
Sec. 406. Technical assistance.
Sec. 407. Termination of section 8 contract and duration of renewal 
              contract.

[[Page 22830]]

Sec. 408. Enhanced voucher eligibility for residents of flexible 
              subsidy properties.
Sec. 409. Enhanced disposition authority.
Sec. 410. Assistance for nonprofit purchasers preserving affordable 
              housing.

TITLE V--MORTGAGE INSURANCE FOR HEALTH CARE FACILITIES AND HOME EQUITY 
                          CONVERSION MORTGAGES

Sec. 501. Rehabilitation of existing hospitals, nursing homes, and 
              other facilities.
Sec. 502. New health care facilities.
Sec. 503. Hospitals and hospital-based health care facilities.
Sec. 504. Insurance for mortgages to refinance existing home equity 
              conversion mortgages.

     SEC. 2. REGULATIONS.

       The Secretary of Housing and Urban Development shall issue 
     any regulations to carry out this Act and the amendments made 
     by this Act that the Secretary determines may or will affect 
     tenants of federally assisted housing only after notice and 
     opportunity for public comment in accordance with the 
     procedure under section 553 of title 5, United States Code, 
     applicable to substantive rules (notwithstanding subsections 
     (a)(2), (b)(B), and (d)(3) of such section). Notice of such 
     proposed rulemaking shall be provided by publication in the 
     Federal Register. In issuing such regulations, the Secretary 
     shall take such actions as may be necessary to ensure that 
     such tenants are notified of, and provided an opportunity to 
     participate in, the rulemaking, as required by such section 
     553.

     SEC. 3. EFFECTIVE DATE.

       (a) In General.--The provisions of this Act and the 
     amendments made by this Act are effective as of the date of 
     the enactment of this Act, unless such provisions or 
     amendments specifically provide for effectiveness or 
     applicability upon another date certain.
       (b) Effect of Regulatory Authority.--Any authority in this 
     Act or the amendments made by this Act to issue regulations, 
     and any specific requirement to issue regulations by a date 
     certain, may not be construed to affect the effectiveness or 
     applicability of the provisions of this Act or the amendments 
     made by this Act under such provisions and amendments and 
     subsection (a) of this section.

   TITLE I--CONVERSION OF FINANCING AND REFINANCING FOR SECTION 202 
                   SUPPORTIVE HOUSING FOR THE ELDERLY

     SEC. 101. CONVERSION OF FINANCING

       (a) In General.--Subject to the provisions of this section, 
     at the request of the owner of a project assisted under 
     section 202 of the Housing Act of 1959 (as in effect before 
     the enactment of the Cranston-Gonzalez National Affordable 
     Housing Act) and section 8 of the United States Housing Act 
     of 1937 (or any other rental housing assistance programs of 
     the Department of Housing and Urban Development, including 
     the rent supplement program under section 101 of the Housing 
     and Urban Development Act of 1965 (12 U.S.C. 1701s)), the 
     Secretary shall convert the financing of any such housing 
     project to financing under section 202 of the Housing Act of 
     1959, as amended by section 801 of the Cranston-Gonzalez 
     National Affordable Housing Act (12 U.S.C. 1701q). In such a 
     conversion, the Secretary shall, if requested by the owner, 
     convert loans made under such section 202 (as in effect 
     before enactment of the Cranston-Gonzalez National Affordable 
     Housing Act), and shall convert section 8 contracts (or such 
     other contracts for rental housing assistance) provided in 
     connection with such loans, into capital advances and project 
     rental assistance under section 202 (as amended by section 
     801 of the Cranston-Gonzalez National Affordable Housing 
     Act), respectively, in accordance with this section.
       (b) Debt Forgiveness.--
       (1) In general.--Subject to paragraph (2), in converting 
     the financing of any housing project pursuant to this 
     section, the Secretary shall cancel any indebtedness to the 
     Secretary relating to any remaining principal and interest 
     under any loan for the project made under section 202 of the 
     Housing Act of 1959 (as in effect before the enactment of the 
     Cranston-Gonzalez National Affordable Housing Act).
       (2) Budget act compliance.--The authority of the Secretary 
     to cancel indebtedness under paragraph (1) shall be effective 
     only to the extent or in such amounts as are or have been 
     provided in advance in appropriation Acts.
       (c) Cancellation of Rental Assistance Contracts and Use of 
     Project Funds.--
       (1) In general.--For each housing project for which debt is 
     canceled under subsection (b) of this section pursuant to a 
     request for conversion under subsection (a), the Secretary 
     shall cancel any contract for rental assistance for the 
     project under section 8 of the United States Housing Act of 
     1937 (or any other contract for rental housing assistance 
     under a program of the Department of Housing and Urban 
     Development, including the rent supplement program under 
     section 101 of the Housing and Urban Development Act of 1965 
     (12 U.S.C. 1701s)).
       (2) Use of unexpended amounts.--Amounts previously 
     obligated for such contract that remain unexpended shall be 
     used as follows:
       (A) Project rental assistance contract.--Remaining amounts 
     shall be used first, to the extent necessary, to provide 
     rental assistance for the project, under a contract for 
     project rental assistance under section 202(c)(2) of the 
     Housing Act of 1959 (12 U.S.C. 1701q(c)(2)), that--
       (i) has a duration that is not less than the remainder of 
     the section 8 or other rental housing assistance contract 
     canceled; and
       (ii) provides assistance in an annual amount that is equal 
     to the aggregate amount provided during the last 12-month 
     period under the section 8 or other rental housing assistance 
     contract for the project canceled (pursuant to paragraph (1) 
     of this subsection), less the portion of such assistance that 
     is attributable to debt service for the loan on the project 
     canceled under subsection (b) of this section, subject to an 
     annual adjustment of existing rents under the contract by an 
     operating cost adjustment factor established by the Secretary 
     (which shall not result in a negative adjustment).
       (B) Credit against loan cancellation.--Amounts remaining 
     after compliance with subparagraph (A) shall, on a fiscal 
     year basis, be transferred to the account covering the loan 
     for the project canceled pursuant to subsection (b) and shall 
     be credited as offsetting collection to such account, in an 
     amount for each fiscal year that is equal to the amount of 
     indebtedness canceled for such year pursuant such subsection.
       (C) Retrofitting, renovation, and service coordinators.--
     Any amounts remaining after compliance with subparagraphs (A) 
     and (B) may be used, to the extent the Secretary considers 
     appropriate, to retrofit or renovate the project or provide a 
     service coordinator for residents of the project, to the same 
     extent that such activities are authorized to be provided 
     under section 802 of the Cranston-Gonzalez National 
     Affordable Housing Act to housing assisted under such 
     section.

     Any such unexpended amounts in excess of the amount used in 
     accordance with subparagraphs (A) through (C) shall be 
     recaptured by the Secretary.
       (3) Use of project funds.--In converting the financing of 
     any housing project pursuant to this section, the Secretary 
     may authorize the owner of the project to use any residual 
     receipts held for the project that exceed $500 per unit (or 
     such other amount as the Secretary may prescribe based on the 
     needs of the project) in accordance with paragraph (2) to 
     improve the market viability, affordability, or service to 
     low-income elderly residents of the project.
       (d) Third Party Processing.--The Secretary may enter into 
     contracts with public or private entities as the Secretary 
     considers appropriate to facilitate efficient processing of 
     elderly housing project conversions under this section.
       (e) Tenant Protections.--Notwithstanding any provision of 
     section 202 of the Housing Act of 1959, as amended by section 
     801 of the Cranston-Gonzalez National Affordable Housing Act 
     (12 U.S.C. 1701q)--
       (1) any tenant who, at the time of the conversion under 
     this section of the financing for a housing project, is 
     lawfully residing in a dwelling unit in the project, may not 
     be considered to be ineligible for continued residency in the 
     project after such date because such tenant is not a very 
     low-income elderly person; and
       (2) very low-income persons with disabilities (as such term 
     is defined in section 811 of the Cranston-Gonzalez National 
     Affordable Housing Act) shall be eligible for occupancy in 
     such project, and units in the project shall be reserved for 
     occupancy by such persons in not less than the same ratio 
     that units in such project are occupied, upon the date of 
     conversion under this section, by handicapped families (as 
     such term is defined in section 202 of the Housing Act of 
     1959, as in effect before the enactment of the Cranston-
     Gonzalez National Affordable Housing Act).
       (f) Waiver Authority.--The Secretary may waive the 
     applicability of any provision of law or regulation necessary 
     to carry out this section.
       (g) Study of Debt Forgiveness.--
       (1) In general.--The Secretary shall conduct an analysis of 
     the net impact on the Federal budget deficit or surplus of 
     making available, on a one-time basis, to sponsors of 
     projects assisted under section 202 of the Housing Act of 
     1959 (as in effect before the enactment of the Cranston-
     Gonzalez National Affordable Housing Act), forgiveness of any 
     indebtedness to the Secretary relating to any remaining 
     principal and interest under loans made under such section, 
     together with a dollar for dollar reduction in the amount of 
     rental assistance under section 8 of the United States 
     Housing Act of 1937 or other rental assistance provided for 
     such project. Such analysis shall take into consideration the 
     full cost of future appropriations for rental assistance 
     under such section 8 expected to be provided if such debt 
     forgiveness does not take place, notwithstanding current 
     budgetary treatment of such actions pursuant to the 
     Congressional Budget Act of 1974.
       (2) Report.--Not later than the expiration of the 3-month 
     period beginning on the date of the enactment of this Act, 
     the Secretary

[[Page 22831]]

     shall submit a report to the Congress containing the 
     quantitative results of the analysis and an enumeration of 
     any project or administrative benefits of such actions.

     SEC. 102. PREPAYMENT AND REFINANCING.

       (a) Approval of Prepayment of Debt.--Upon request of the 
     project sponsor of a project assisted with a loan under 
     section 202 of the Housing Act of 1959 (as in effect before 
     the enactment of the Cranston-Gonzalez National Affordable 
     Housing Act), the Secretary shall approve the prepayment of 
     any indebtedness to the Secretary relating to any remaining 
     principal and interest under the loan as part of a prepayment 
     plan under which--
       (1) the project sponsor agrees to operate the project until 
     the maturity date of the original loan under terms at least 
     as advantageous to existing and future tenants as the terms 
     required by the original loan agreement or any rental 
     assistance payments contract under section 8 of the United 
     States Housing Act of 1937 (or any other rental housing 
     assistance programs of the Department of Housing and Urban 
     Development, including the rent supplement program under 
     section 101 of the Housing and Urban Development Act of 1965 
     (12 U.S.C. 1701s)) relating to the project; and
       (2) the prepayment may involve refinancing of the loan if 
     such refinancing results in a lower interest rate on the 
     principal of the loan for the project and in reductions in 
     debt service related to such loan.
       (b) Sources of Refinancing.--In the case of prepayment 
     under this section involving refinancing, the project sponsor 
     may refinance the project through any third party source, 
     including financing by State and local housing finance 
     agencies, use of tax-exempt bonds, multi-family mortgage 
     insurance under the National Housing Act, reinsurance, or 
     other credit enhancements, including risk sharing as provided 
     under section 542 of the Housing and Community Development 
     Act of 1992 (12 U.S.C. 1707 note). For purposes of 
     underwriting a loan insured under the National Housing Act, 
     the Secretary may assume that any section 8 rental assistance 
     contract relating to a project will be renewed for the term 
     of such loan.
       (c) Use of Unexpended Amounts.--Upon execution of the 
     refinancing for a project pursuant to this section, the 
     Secretary shall make available at least 50 percent of the 
     annual savings resulting from reduced section 8 or other 
     rental housing assistance contracts in a manner that is 
     advantageous to the tenants, including--
       (1) not more than 15 percent of the cost of increasing the 
     availability or provision of supportive services, which may 
     include the financing of service coordinators and congregate 
     services;
       (2) rehabilitation, modernization, or retrofitting of 
     structures, common areas, or individual dwelling units;
       (3) construction of an addition or other facility in the 
     project, including assisted living facilities (or, upon the 
     approval of the Secretary, facilities located in the 
     community where the project sponsor refinances a project 
     under this section, or pools shared resources from more than 
     one such project); or
       (4) rent reduction of unassisted tenants residing in the 
     project according to a pro rata allocation of shared savings 
     resulting from the refinancing.
       (d) Use of Certain Project Funds.--The Secretary shall 
     allow a project sponsor that is prepaying and refinancing a 
     project under this section--
       (1) to use any residual receipts held for that project in 
     excess of $500 per individual dwelling unit for not more than 
     15 percent of the cost of activities designed to increase the 
     availability or provision of supportive services; and
       (2) to use any reserves for replacement in excess of $1,000 
     per individual dwelling unit for activities described in 
     paragraphs (2) and (3) of subsection (c).
       (e) Budget Act Compliance.--This section shall be effective 
     only to extent or in such amounts that are provided in 
     advance in appropriation Acts.

 TITLE II--AUTHORIZATION OF APPROPRIATIONS FOR SUPPORTIVE HOUSING FOR 
               THE ELDERLY AND PERSONS WITH DISABILITIES

     SEC. 201. SUPPORTIVE HOUSING FOR ELDERLY PERSONS.

       Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) is 
     amended by adding at the end the following new subsection:
       ``(m) Authorization of Appropriations.--There is authorized 
     to be appropriated for providing assistance under this 
     section $700,000,000 for fiscal year 2000 and such sums as 
     may be necessary for each of fiscal years 2001, 2002, 2003, 
     and 2004. Of the amount provided in appropriation Acts for 
     assistance under this section in each such fiscal year, 5 
     percent shall be available only for providing assistance in 
     accordance with the requirements under subsection (c)(4) 
     (relating to matching funds), except that if there 
     insufficient eligible applicants for such assistance, any 
     amount remaining shall be used for assistance under this 
     section.''.

     SEC. 202. SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES.

       Section 811 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013) is amended--
       (1) by redesignating subsection (m) as subsection (n); and
       (2) by inserting after subsection (l) the following new 
     subsection:
       ``(m) Authorization of Appropriations.--There is authorized 
     to be appropriated for providing assistance under this 
     section $225,000,000 for fiscal year 2000 and such sums as 
     may be necessary for each of fiscal years 2001, 2002, 2003, 
     and 2004. Of the amount provided in appropriation Acts for 
     assistance under this section in each such fiscal year, 5 
     percent shall be available only for providing assistance in 
     accordance with the requirements under subsection (d)(5) 
     (relating to matching funds), except that if there 
     insufficient eligible applicants for such assistance, any 
     amount remaining shall be used for assistance under this 
     section.''.

     SEC. 203. SERVICE COORDINATORS AND CONGREGATE SERVICES FOR 
                   ELDERLY AND DISABLED HOUSING.

       (a) Authorization of Appropriations for Federally Assisted 
     Housing.--There is authorized to be appropriated to the 
     Secretary of Housing and Urban Development $50,000,000 for 
     fiscal year 2000, and such sums as may be necessary for each 
     of fiscal years 2001 and 2002, for the following purposes:
       (1) Grants for service coordinators for certain federally 
     assisted multifamily housing.--For grants under section 676 
     of the Housing and Community Development Act of 1992 (42 
     U.S.C. 13632) for providing service coordinators.
       (2) Congregate services for federally assisted housing.--
     For contracts under section 802 of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 8011) to provide 
     congregate services programs for eligible residents of 
     eligible housing projects under subparagraphs (B) through (D) 
     of subsection (k)(6) of such section.
       (b) Public Housing.--There is authorized to be appropriated 
     to the Secretary of Housing and Urban Development for fiscal 
     year 2000 for grants for use only for activities described in 
     paragraph (2) of section 34(b) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437z-6(b)(2))--
       (1) such sums as may be necessary for renewal of all grants 
     made in prior fiscal years for providing service coordinators 
     and congregate services for the elderly and disabled in 
     public housing; and
       (B) $11,000,000 for grants in addition to such renewal 
     grants.

TITLE III--EXPANDING HOUSING OPPORTUNITIES FOR THE ELDERLY AND PERSONS 
                           WITH DISABILITIES

                  Subtitle A--Housing for the Elderly

     SEC. 301. MATCHING GRANT PROGRAM.

       Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) is 
     amended--
       (1) in subsection (b), in the second sentence, by inserting 
     ``or through matching grants under subsection (c)(4)'' after 
     ``subsection (c)(1)''; and
       (2) in subsection (c), by adding at the end the following 
     new paragraph:
       ``(4) Matching grants.--
       ``(A) In general.--Amounts made available for assistance 
     under this paragraph shall be used only for capital advances 
     in accordance with paragraph (1), except that the Secretary 
     shall require that, as a condition of providing assistance 
     under this paragraph for a project, the applicant for 
     assistance shall supplement the assistance with amounts from 
     sources other than this section in an amount that is not less 
     than 25 to 50 percent (as the Secretary may determine) of the 
     amount of assistance provided pursuant to this paragraph for 
     the project.
       ``(B) Requirement for non-federal funds.--Not less than 50 
     percent of supplemental amounts provided for a project 
     pursuant to subparagraph (A) shall be from non-Federal 
     sources. Such supplemental amounts may include the value of 
     any in-kind contributions, including donated land, 
     structures, equipment, and other contributions as the 
     Secretary considers appropriate, but only if the existence of 
     such in-kind contributions results in the construction of 
     more dwelling units than would have been constructed absent 
     such contributions.
       ``(C) Income eligibility.--Notwithstanding any other 
     provision of this section, the Secretary shall provide that, 
     in a project assisted under this paragraph, a number of 
     dwelling units may be made available for occupancy by elderly 
     persons who are not very low-income persons in a number such 
     that the ratio that the number of dwelling units in the 
     project so occupied bears to the total number of units in the 
     project does not exceed the ratio that the amount from non-
     Federal sources provided for the project pursuant to this 
     paragraph bears to the sum of the capital advances provided 
     for the project under this paragraph and all supplemental 
     amounts for the project provided pursuant to this 
     paragraph.''.

     SEC. 302. ELIGIBILITY OF FOR-PROFIT LIMITED PARTNERSHIPS.

       Section 202(k)(4) of the Housing Act of 1959 (12 U.S.C. 
     1701q(k)(4)) is amended by adding after and below 
     subparagraph (C) the following new sentence:

     ``Such term includes a for-profit limited partnership the 
     sole general partner of which is an organization meeting the 
     requirements under subparagraphs (A), (B), and (C) and a

[[Page 22832]]

     corporation wholly owned by an organization meeting the 
     requirements under subparagraphs (A), (B), and (C).''.

     SEC. 303. MIXED FUNDING SOURCES.

       Section 202(h)(6) of the Housing Act of 1959 (12 U.S.C. 
     1701q(h)(6)) is amended by striking ``non-Federal sources'' 
     and inserting ``sources other than this section''.

     SEC. 304. AUTHORITY TO ACQUIRE STRUCTURES.

       Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) is 
     amended--
       (1) in subsection (b), by striking ``from the Resolution 
     Trust Corporation''; and
       (2) in subsection (h)(2)--
       (A) in the heading for subparagraph (A), by striking ``RTC 
     properties'' and inserting ``Acquisition''; and
       (B) by striking ``from the Resolution'' and all that 
     follows through ``Insurance Act''.

     SEC. 305. MIXED-INCOME OCCUPANCY.

       (a) In General.--The first sentence of section 202(i)(1) of 
     the Housing Act of 1959 (12 U.S.C. 1701q(i)(1)) is amended by 
     striking ``and (B)'' and inserting the following: ``(B) 
     notwithstanding clause (A) and in the case only of a 
     supportive housing project for the elderly which has a high 
     vacancy level (as such term is defined by the Secretary, but 
     which shall not include vacancy upon the initial availability 
     of units in a building), consistent with the purpose of 
     improving housing opportunities for very low- and low-income 
     elderly persons; and (C).''.
       (b) Availability of Units.--Section 202(i) of the Housing 
     Act of 1959 (12 U.S.C. 1701q(i)) is amended by adding at the 
     end the following new paragraph:
       ``(3) Availability of units.--In the case of a supportive 
     housing project described in subsection (i)(1)(B) that has a 
     vacant dwelling unit, an owner may not make a dwelling unit 
     available for occupancy by, nor make any commitment to 
     provide occupancy in the unit to, a low-income family that is 
     not a very low-income family unless each eligible very low-
     income family that has applied for occupancy in the project 
     has been offered an opportunity to accept occupancy in a unit 
     in the project.''.
       (b) Conforming Amendments.--Section 202 of the Housing Act 
     of 1959 (12 U.S.C. 1701q) is amended--
       (1) in subsection (c)--
       (A) in paragraph (1), by inserting after ``elderly 
     persons'' the following: ``, and for low-income elderly 
     persons to the extent such occupancy is made available 
     pursuant to subsection (i)(1)(B),'';
       (B) in the first sentence of paragraph (2), by inserting 
     after ``elderly persons'' the following: ``or by low-income 
     elderly persons (to the extent such occupancy is made 
     available pursuant to subsection (i)(1)(B))''; and
       (C) in paragraph (3), by inserting after ``very low-income 
     person'' the following: ``or a low-income person (to the 
     extent such occupancy is made available pursuant to 
     subsection (i)(1)(B))'';
       (2) in subsection (d)(1), by inserting after ``elderly 
     persons'' the following: ``, and low-income elderly persons 
     to the extent such occupancy is made available pursuant to 
     subsection (i)(1)(B),''; and
       (3) in subsection (k)--
       (A) by redesignating paragraphs (3) through (8) as 
     paragraphs (4) through (9), respectively; and
       (B) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) Low-income.--The term `low-income' has the same 
     meaning given the term `low-income families' under section 
     3(b)(2) of the United States Housing Act of 1937 (42 U.S.C. 
     1437a(b)(2)).''.

     SEC. 306. USE OF PROJECT RESERVES.

       Section 202(j) of the Housing Act of 1959 (12 U.S.C. 
     1701q(j)) is amended by adding at the end the following new 
     paragraph:
       ``(8) Use of project reserves.--Amounts for project 
     reserves for a project assisted under this section may be 
     used for costs, subject to reasonable limitations as the 
     Secretary determines appropriate, for reducing the number of 
     dwelling units in the project. Such use shall be subject to 
     the approval of the Secretary to ensure that the use is 
     designed to retrofit units that are currently obsolete or 
     unmarketable.''.

     SEC. 307. COMMERCIAL ACTIVITIES.

       Section 202(h)(1) of the Housing Act of 1959 (12 U.S.C. 
     1701q(h)(1)) is amended by adding at the end the following 
     new sentence: ``Neither this section nor any other provision 
     of law may be construed as prohibiting or preventing the 
     location and operation, in a project assisted under this 
     section, of commercial facilities for the benefit of 
     residents of the project and the community in which the 
     project is located.''.

     SEC. 308. MIXED FINANCE PILOT PROGRAM.

       (a) Authority.--The Secretary of Housing and Urban 
     Development shall carry out a pilot program under this 
     section to determine the effectiveness and feasibility of 
     providing assistance under section 202 of the Housing Act of 
     1959 (12 U.S.C. 1701q) for housing projects that are used 
     both for supportive housing for the elderly and for other 
     types of housing, which may include market rate housing.
       (b) Scope.--Under the pilot program the Secretary shall 
     provide, to the extent that sufficient approvable 
     applications for such assistance are received, assistance in 
     the manner provided under subsection (d) for not more than 5 
     housing projects.
       (c) Mixed Use.--The Secretary shall require, for a project 
     to be assisted under the pilot program--
       (1) that a portion of the dwelling units in the project be 
     reserved for use in accordance with, and subject to, the 
     requirements applicable to units assisted under section 202 
     of the Housing Act of 1959; and
       (2) that the remainder of the dwelling units be used for 
     other purposes.
       (d) Financing.--The Secretary may use amounts provided for 
     assistance under section 202 of the Housing Act of 1959 for 
     assistance under the pilot program for capital advances in 
     accordance with subsection (d)(1) of such section and project 
     rental assistance in accordance with subsection (d)(2) of 
     such section, only for dwelling units described in subsection 
     (c)(1) of this section. Any assistance provided pursuant to 
     subsection (d)(1) of such section 202 shall be provided in 
     the form of a capital advance, subject to repayment as 
     provided in such subsection, and shall not be structured as a 
     loan. The Secretary shall take such action as may be 
     necessary to ensure that the repayment contingency under such 
     subsection is enforceable for projects assisted under the 
     pilot program and to provide for appropriate protections of 
     the interests of the Secretary in relation to other interests 
     in the projects so assisted.
       (e) Waiver Authority.--Notwithstanding subsection (c)(1) of 
     this section, the Secretary may waive the applicability of 
     any provision of section 202 of the Housing Act of 1959 for 
     any project assisted under the pilot program under this 
     section as may be appropriate to carry out the program, 
     except to the extent inconsistent with this section.

     SEC. 309. GRANTS FOR CONVERSION OF ELDERLY HOUSING TO 
                   ASSISTED LIVING FACILITIES.

       Title II of the Housing Act of 1959 is amended by inserting 
     after section 202a (12 U.S.C. 1701q-1) the following new 
     section:

     ``SEC. 202B. GRANTS FOR CONVERSION OF ELDERLY HOUSING TO 
                   ASSISTED LIVING FACILITIES.

       ``(a) Grant Authority.--The Secretary of Housing and Urban 
     Development may make grants in accordance with this section 
     to owners of eligible projects described in subsection (b) 
     for one or both of the following activities:
       ``(1) Repairs.--Substantial capital repairs to a project 
     that are needed to rehabilitate, modernize, or retrofit aging 
     structures, common areas, or individual dwelling units.
       ``(2) Conversion.--Activities designed to convert dwelling 
     units in the eligible project to assisted living facilities 
     for elderly persons.
       ``(b) Eligible Projects.--An eligible project described in 
     this subsection is a multifamily housing project that is--
       ``(1) described in subparagraph (B), (C), (D), (E), (F), or 
     (G) of section 683(2) of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 13641(2)), or (B) only to 
     the extent amounts of the Department of Agriculture are made 
     available to the Secretary of Housing and Urban Development 
     for such grants under this section for such projects, subject 
     to a loan made or insured under section 515 of the Housing 
     Act of 1949 (42 U.S.C. 1485);
       ``(2) owned by a private nonprofit organization (as such 
     term is defined in section 202); and
       ``(3) designated primarily for occupancy by elderly 
     persons.

     Notwithstanding any other provision of this subsection or 
     this section, an unused or underutilized commercial property 
     may be considered an eligible project under this subsection, 
     except that the Secretary may not provide grants under this 
     section for more 3 such properties. For any such projects, 
     any reference under this section to dwelling units shall be 
     considered to refer to the premises of such properties.
       ``(c) Applications.--Applications for grants under this 
     section shall be submitted to the Secretary in accordance 
     with such procedures as the Secretary shall establish. Such 
     applications shall contain--
       ``(1) a description of the substantial capital repairs or 
     the proposed conversion activities for which a grant under 
     this section is requested;
       ``(2) the amount of the grant requested to complete the 
     substantial capital repairs or conversion activities;
       ``(3) a description of the resources that are expected to 
     be made available, if any, in conjunction with the grant 
     under this section; and
       ``(4) such other information or certifications that the 
     Secretary determines to be necessary or appropriate.
       ``(d) Funding for Services.--The Secretary may not make a 
     grant under this section for conversion activities unless the 
     application contains sufficient evidence, in the 
     determination of the Secretary, of firm commitments for the 
     funding of services to be provided in the assisted living 
     facility, which may be provided by third parties.
       ``(e) Selection Criteria.--The Secretary shall select 
     applications for grants under this section based upon 
     selection criteria, which shall be established by the 
     Secretary and shall include--
       ``(1) in the case of a grant for substantial capital 
     repairs, the extent to which the

[[Page 22833]]

     project to be repaired is in need of such repair, including 
     such factors as the age of improvements to be repaired, and 
     the impact on the health and safety of residents of failure 
     to make such repairs;
       ``(2) in the case of a grant for conversion activities, the 
     extent to which the conversion is likely to provide assisted 
     living facilities that are needed or are expected to be 
     needed by the categories of elderly persons that the assisted 
     living facility is intended to serve, with a special emphasis 
     on very low-income elderly persons who need assistance with 
     activities of daily living;
       ``(3) the inability of the applicant to fund the repairs or 
     conversion activities from existing financial resources, as 
     evidenced by the applicant's financial records, including 
     assets in the applicant's residual receipts account and 
     reserves for replacement account;
       ``(4) the extent to which the applicant has evidenced 
     community support for the repairs or conversion, by such 
     indicators as letters of support from the local community for 
     the repairs or conversion and financial contributions from 
     public and private sources;
       ``(5) in the case of a grant for conversion activities, the 
     extent to which the applicant demonstrates a strong 
     commitment to promoting the autonomy and independence of the 
     elderly persons that the assisted living facility is intended 
     to serve;
       ``(6) in the case of a grant for conversion activities, the 
     quality, completeness, and managerial capability of providing 
     the services which the assisted living facility intends to 
     provide to elderly residents, especially in such areas as 
     meals, 24-hour staffing, and on-site health care; and
       ``(7) such other criteria as the Secretary determines to be 
     appropriate to ensure that funds made available under this 
     section are used effectively.
       ``(f) Definitions.--For the purposes of this section--
       ``(1) the term `assisted living facility' has the meaning 
     given such term in section 232(b) of the National Housing Act 
     (12 U.S.C. 1715w(b)); and
       ``(2) the definitions in section 202(k) shall apply.
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated for providing grants under this section 
     such sums as may be necessary for each of fiscal years 2000, 
     2001, 2002, 2003, and 2004.''.

     SEC. 310. GRANTS FOR CONVERSION OF PUBLIC HOUSING PROJECTS TO 
                   ASSISTED LIVING FACILITIES.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 36. GRANTS FOR CONVERSION OF PUBLIC HOUSING TO 
                   ASSISTED LIVING FACILITIES.

       ``(a) Grant Authority.--The Secretary may make grants in 
     accordance with this section to public housing agencies for 
     use for activities designed to convert dwelling units in an 
     eligible projects described in subsection (b) to assisted 
     living facilities for elderly persons.
       ``(b) Eligible Projects.--An eligible project described in 
     this subsection is a public housing project (or a portion 
     thereof) that has been designated under section 7 for 
     occupancy only by elderly persons.
       ``(c) Applications.--Applications for grants under this 
     section shall be submitted to the Secretary in accordance 
     with such procedures as the Secretary shall establish. Such 
     applications shall contain--
       ``(1) a description of the proposed conversion activities 
     for which a grant under this section is requested;
       ``(2) the amount of the grant requested;
       ``(3) a description of the resources that are expected to 
     be made available, if any, in conjunction with the grant 
     under this section; and
       ``(4) such other information or certifications that the 
     Secretary determines to be necessary or appropriate.
       ``(d) Funding for Services.--The Secretary may not make a 
     grant under this section unless the application contains 
     sufficient evidence, in the determination of the Secretary, 
     of firm commitments for the funding of services to be 
     provided in the assisted living facility.
       ``(e) Selection Criteria.--The Secretary shall select 
     applications for grants under this section based upon 
     selection criteria, which shall be established by the 
     Secretary and shall include--
       ``(1) the extent to which the conversion is likely to 
     provide assisted living facilities that are needed or are 
     expected to be needed by the categories of elderly persons 
     that the assisted living facility is intended to serve;
       ``(2) the inability of the public housing agency to fund 
     the conversion activities from existing financial resources, 
     as evidenced by the agency's financial records;
       ``(3) the extent to which the agency has evidenced 
     community support for the conversion, by such indicators as 
     letters of support from the local community for the 
     conversion and financial contributions from public and 
     private sources;
       ``(4) extent to which the applicant demonstrates a strong 
     commitment to promoting the autonomy and independence of the 
     elderly persons that the assisted living facility is intended 
     to serve;
       ``(5) the quality, completeness, and managerial capability 
     of providing the services which the assisted living facility 
     intends to provide to elderly residents, especially in such 
     areas as meals, 24-hour staffing, and on-site health care; 
     and
       ``(6) such other criteria as the Secretary determines to be 
     appropriate to ensure that funds made available under this 
     section are used effectively.
       ``(f) Definition.--For the purposes of this section, the 
     term `assisted living facility' has the meaning given such 
     term in section 232(b) of the National Housing Act (12 U.S.C. 
     1715w(b)).
       ``(g) Authorization of Appropriations.--There is authorized 
     to be appropriated for providing grants under this section 
     such sums as may be necessary for each of fiscal years 2000, 
     2001, 2002, 2003, and 2004.''.

     SEC. 311. USE OF SECTION 8 ASSISTANCE FOR ASSISTED LIVING 
                   FACILITIES.

       (a) Voucher Assistance.--Section 8(o) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437f(o)) is amended by adding 
     at the end the following new paragraph:
       ``(18) Rental assistance for assisted living facilities.--
       ``(A) In general.--A public housing agency may make 
     assistance payments on behalf of a family that uses an 
     assisted living facility as a principal place of residence 
     and that uses such supportive services made available in the 
     facility as the agency may require. Such payments may be made 
     only for covering costs of rental of the dwelling unit in the 
     assisted living facility and not for covering any portion of 
     the cost of residing in such facility that is attributable to 
     service relating to assisted living.
       ``(B) Rent calculation.--
       ``(i) Charges included.--For assistance pursuant to this 
     paragraph, the rent of the dwelling unit that is a assisted 
     living facility with respect to which assistance payments are 
     made shall include maintenance and management charges related 
     to the dwelling unit and tenant-paid utilities. Such rent 
     shall not include any charges attributable to services 
     relating to assisted living.
       ``(ii) Payment standard.--In determining the monthly 
     assistance that may be paid under this paragraph on behalf of 
     any family residing in an assisted living facility, the 
     public housing agency shall utilize the payment standard 
     established under paragraph (1), for the market area in which 
     the assisted living facility is located, for the applicable 
     size dwelling unit.
       ``(iii) Monthly assistance payment.--The monthly assistance 
     payment for a family assisted under this paragraph shall be 
     determined in accordance with paragraph (2) (using the rent 
     and payment standard for the dwelling unit as determined in 
     accordance with this subsection).
       ``(C) Definition.--For the purposes of this paragraph, the 
     term `assisted living facility' has the meaning given that 
     term in section 232(b) of the National Housing Act (12 U.S.C. 
     1715w(b)), except that such a facility may be contained 
     within a portion of a larger multifamily housing project.''.
       (b) Project-Based Assistance.--Section 202b of the Housing 
     Act of 1959, as added by section 2 of this Act, is amended--
       (1) by redesignating subsections (f) and (g) as subsections 
     (g) and (h), respectively; and
       (2) by inserting after subsection (e) the following new 
     subsection:
       ``(f) Section 8 Project-Based Assistance.--
       ``(1) Eligibility.--Notwithstanding any other provision of 
     law, a multifamily project which includes one or more 
     dwelling units that have been converted to assisted living 
     facilities using grants made under this section shall be 
     eligible for project-based assistance under section 8 of the 
     United States Housing Act of 1937, in the same manner in 
     which the project would be eligible for such assistance but 
     for the assisted living facilities in the project.
       ``(2) Calculation of rent.--For assistance pursuant to this 
     subsection, the maximum monthly rent of a dwelling unit that 
     is an assisted living facility with respect to which 
     assistance payments are made shall not include charges 
     attributable to services relating to assisted living.''.

     SEC. 312. ANNUAL HUD INVENTORY OF ASSISTED HOUSING DESIGNATED 
                   FOR ELDERLY PERSONS.

       Subtitle D of title VI of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 13611 et seq.) is amended 
     by adding at the end the following new section:

     ``SEC. 662. ANNUAL INVENTORY OF ASSISTED HOUSING DESIGNATED 
                   FOR ELDERLY PERSONS.

       ``(a) In General.--The Secretary shall establish and 
     maintain, and on an annual basis shall update and publish, an 
     inventory of housing that--
       ``(1) is assisted under a program of the Department of 
     Housing and Urban Development, including all federally 
     assisted housing; and
       ``(2) is designated, in whole or in part, for occupancy by 
     elderly families or disabled families, or both.
       ``(b) Contents.--The inventory required under this section 
     shall identify housing described in subsection (a) and the 
     number of dwelling units in such housing that--
       ``(1) are in projects designated for occupancy only by 
     elderly families;
       ``(2) are in projects designated for occupancy only by 
     disabled families;

[[Page 22834]]

       ``(3) contain special features or modifications designed to 
     accommodate persons with disabilities and are in projects 
     designated for occupancy only by disabled families;
       ``(4) are in projects for which a specific percentage or 
     number of the dwelling units are designated for occupancy 
     only by elderly families;
       ``(5) are in projects for which a specific percentage or 
     number of the dwelling units are designated for occupancy 
     only by disabled families; and
       ``(6) are in projects designed for occupancy only by both 
     elderly or disabled families.
       ``(c) Publication.--The Secretary shall annually publish 
     the inventory required under this section in the Federal 
     Register and shall make the inventory available to the public 
     by posting on a World Wide Web site of the Department.''.

     SEC. 313. TREATMENT OF APPLICATIONS.

       (a) In General.--Notwithstanding any other provision of law 
     or any regulation of the Secretary of Housing and Urban 
     Development, in the case of any denial of an application for 
     assistance under section 202 of the Housing Act of 1959 (12 
     U.S.C. 1701q) for failure to timely provide information 
     required by the Secretary, the Secretary shall notify the 
     applicant of the failure and provide the applicant an 
     opportunity to show that the failure was due to the failure 
     of a third party to provide information under the control of 
     the third party. If the applicant demonstrates, within a 
     reasonable period of time after notification of such failure, 
     that the applicant did not have such information but 
     requested the timely provision of such information by the 
     third party, the Secretary may not deny the application on 
     the grounds of failure to timely provide such information.
       (b) Applicability.--This section shall have no force or 
     effect after the expiration of the 12-month period beginning 
     on the date of the enactment of this Act.

           Subtitle B--Housing for Persons With Disabilities

     SEC. 321. MATCHING GRANT PROGRAM.

       Section 811 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013) is amended--
       (1) in subsection (b)(2)(A), by inserting ``or through 
     matching grants under subsection (d)(5)'' after ``subsection 
     (d)(1)''; and
       (2) in subsection (d), by adding at the end the following 
     new paragraph:
       ``(5) Matching grants.--
       ``(A) In general.--Amounts made available for assistance 
     under this paragraph shall be used only for capital advances 
     in accordance with paragraph (1), except that the Secretary 
     shall require that, as a condition of providing assistance 
     under this paragraph for a project, the applicant for 
     assistance shall supplement the assistance with amounts from 
     sources other than this section in an amount that is not less 
     than 25 to 50 percent (as the Secretary may determine) of the 
     amount of assistance provided pursuant to this paragraph for 
     the project.
       ``(B) Requirement for non-federal funds.--Not less than 50 
     percent of supplemental amounts provided for a project 
     pursuant to subparagraph (A) shall be from non-Federal 
     sources. Such supplemental amounts may include the value of 
     any in-kind contributions, including donated land, 
     structures, equipment, and other contributions as the 
     Secretary considers appropriate, but only if the existence of 
     such in-kind contributions results in the construction of 
     more dwelling units than would have been constructed absent 
     such contributions.
       ``(C) Income eligibility.--Notwithstanding any other 
     provision of this section, the Secretary shall provide that, 
     in a project assisted under this paragraph, a number of 
     dwelling units may be made available for occupancy by persons 
     with disabilities who are not very low-income persons in a 
     number such that the ration that the number of dwelling units 
     in the project so occupied bears to the total number of units 
     in the project does not exceed the ratio that the amount from 
     non-Federal sources provided for the project pursuant to this 
     paragraph bears to the sum of the capital advances provided 
     for the project under this paragraph and all supplemental 
     amounts for the project provided pursuant to this 
     paragraph.''.

     SEC. 322. ELIGIBILITY OF FOR-PROFIT LIMITED PARTNERSHIPS.

       Section 811(k)(6) of the Housing Act of 1959 (42 U.S.C. 
     8013(k)(6)) is amended by adding after and below subparagraph 
     (D) the following new sentence:

     ``Such term includes a for-profit limited partnership the 
     sole general partner of which is an organization meeting the 
     requirements under subparagraphs (A), (B), (C), and (D) and a 
     corporation wholly owned by an organization meeting the 
     requirements under subparagraphs (A), (B), (C), and (D).''.

     SEC. 323. MIXED FUNDING SOURCES.

       Section 811(h)(5) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 8013(h)(5)) is amended by 
     striking ``non-Federal sources'' and inserting ``sources 
     other than this section''.

     SEC. 324. TENANT-BASED ASSISTANCE.

       Section 811 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013) is amended--
       (1) in subsection (d), by striking paragraph (4) and 
     inserting the following new paragraph:
       ``(4) Tenant-based rental assistance.--
       ``(A) Administering entities.--Tenant-based rental 
     assistance provided under subsection (b)(1) may be provided 
     only through a public housing agency that has submitted and 
     had approved an plan under section 7(d) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437e(d)) that provides for 
     such assistance, or through a private nonprofit organization. 
     A public housing agency shall be eligible to apply under this 
     section only for the purposes of providing such tenant-based 
     rental assistance.
       ``(B) Program rules.--Tenant-based rental assistance under 
     subsection (b)(1) shall be made available to eligible persons 
     with disabilities and administered under the same rules that 
     govern tenant-based rental assistance made available under 
     section 8 of the United States Housing Act of 1937, except 
     that the Secretary may waive or modify such rules, but only 
     to the extent necessary to provide for administering such 
     assistance under subsection (b)(1) through private nonprofit 
     organizations rather than through public housing agencies.
       ``(C) Allocation of assistance.--In determining the amount 
     of assistance provided under subsection (b)(1) for a private 
     nonprofit organization or public housing agency, the 
     Secretary shall consider the needs and capabilities of the 
     organization or agency, in the case of a public housing 
     agency, as described in the plan for the agency under section 
     7 of the United States Housing Act of 1937.''; and
       (2) in subsection (l)(1)--
       (A) by striking ``subsection (b)'' and inserting 
     ``subsection (b)(2)'';
       (B) by striking the last comma and all that follows through 
     ``subsection (n)''; and
       (C) by inserting after the last period the following new 
     sentence: ``Notwithstanding any other provision of this 
     section, the Secretary may use not more than 25 percent of 
     the total amounts made available for assistance under this 
     section for any fiscal year for tenant-based rental 
     assistance under subsection (b)(1) for persons with 
     disabilities, and no authority of the Secretary to waive 
     provisions of this section may be used to alter the 
     percentage limitation under this sentence.''.

     SEC. 325. PROJECT SIZE.

       (a) Limitation.--Section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 8013) is amended--
       (1) in subsection (k)(4), by inserting ``, subject to the 
     limitation under subsection (h)(6)'' after ``prescribe''; and
       (2) in subsection (l), by adding at the end the following 
     new paragraph:
       ``(4) Size limitation.--Of any amounts made available for 
     any fiscal year and used for capital advances or project 
     rental assistance under paragraphs (1) and (2) of subsection 
     (d), not more than 25 percent may be used for supportive 
     housing which contains more than 24 separate dwelling 
     units.''.
       (b) Study.--Not later than the expiration of the 3-month 
     period beginning on the date of the enactment of this Act, 
     the Secretary of Housing and Urban Development shall conduct 
     a study and submit a report to the Congress regarding--
       (1) the extent to which the authority of the Secretary 
     under section 811(k)(4) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 8013(k)(4)), as in effect 
     immediately before the enactment of this Act, has been used 
     in each year since 1990 to provide for assistance under such 
     section for supportive housing for persons with disabilities 
     having more than 24 separate dwelling units;
       (2) the per-unit costs of, and the benefits and problems 
     associated with, providing such housing in projects having 8 
     or less dwelling units, 8 to 24 units, and more than 24 
     units; and
       (3) the per-unit costs of, and the benefits and problems 
     associated with providing housing under section 202 of the 
     Housing Act of 1959 (12 U.S.C. 1701q) in projects having 30 
     to 50 dwelling units, in projects having more than 50 but not 
     more than 80 dwelling units, in projects having more than 80 
     but not more than 120 dwelling units, and in projects having 
     more than 120 dwelling units, but the study shall also 
     examine the social considerations afforded by smaller and 
     moderate-size developments and shall not be limited to 
     economic factors.

     SEC. 326. USE OF PROJECT RESERVES.

       Section 811(j) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013(j)) is amended by adding at the 
     end the following new paragraph:
       ``(7) Use of project reserves.--Amounts for project 
     reserves for a project assisted under this section may be 
     used for costs, subject to reasonable limitations as the 
     Secretary determines appropriate, for reducing the number of 
     dwelling units in the project. Such use shall be subject to 
     the approval of the Secretary to ensure that the use is 
     designed to retrofit units that are currently obsolete or 
     unmarketable.''.

     SEC. 327. COMMERCIAL ACTIVITIES.

       Section 811(h)(1) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 8013(h)(1)) is amended by 
     adding at the end the following new sentence: ``Neither this 
     section nor any other provision of law may be construed as 
     prohibiting or preventing the location and operation, in a 
     project assisted

[[Page 22835]]

     under this section, of commercial facilities for the benefit 
     of residents of the project and the community in which the 
     project is located.''.

                      Subtitle C--Other Provisions

     SEC. 341. SERVICE COORDINATORS.

       (a) Increased Flexibility for Use of Service Coordinators 
     in Certain Federally Assisted Housing.--Section 676 of the 
     Housing and Community Development Act of 1992 (42 U.S.C. 
     13632) is amended--
       (1) in the section heading, by striking ``MULTIFAMILY 
     HOUSING ASSISTED UNDER THE NATIONAL HOUSING ACT'' and 
     inserting ``CERTAIN FEDERALLY ASSISTED HOUSING'';
       (2) in subsection (a)--
       (A) in the first sentence, by striking ``(E) and (F)'' and 
     inserting ``(B), (C), (D), (E), (F), and (G)''; and
       (B) in the last sentence--
       (i) by striking ``section 661'' and inserting ``section 
     671''; and
       (ii) by adding after the period at the end the following 
     new sentence: ``A service coordinator funded with a grant 
     under this section for a project may provide services to low-
     income elderly or disabled families living in the vicinity of 
     such project.'';
       (3) in subsection (d)--
       (A) by striking ``(E) or (F)'' and inserting ``(B), (C), 
     (D), (E), (F), or (G)''; and
       (B) by striking ``section 661'' and inserting ``section 
     671''; and
       (4) by striking subsection (c) and redesignating subsection 
     (d) (as amended by paragraph (3) of this subsection) as 
     subsection (c).
       (b) Requirement To Provide Service Coordinators.--Section 
     671 of the Housing and Community Development Act of 1992 (42 
     U.S.C. 13631) is amended--
       (1) in the first sentence of subsection (a), by striking 
     ``to carry out this subtitle pursuant to the amendments made 
     by this subtitle'' and inserting the following: ``for 
     providing service coordinators under this section'';
       (2) in subsection (d), by inserting ``)'' after ``section 
     683(2)''; and
       (3) by adding at the end following new subsection:
       ``(e) Services for Low-Income Elderly or Disabled Families 
     Residing in Vicinity of Certain Projects.--To the extent only 
     that this section applies to service coordinators for covered 
     federally assisted housing described in subparagraphs (B), 
     (C), (D), (E), (F), and (G) of section 683(2), any reference 
     in this section to elderly or disabled residents of a project 
     shall be construed to include low-income elderly or disabled 
     families living in the vicinity of such project.''.
       (c) Protection Against Telemarketing Fraud.--
       (1) Supportive housing for the elderly.--The first sentence 
     of section 202(g)(1) of the Housing Act of 1959 (12 U.S.C. 
     1701q(g)(1)) is amended by striking ``and (F)'' and inserting 
     the following: ``(F) providing education and outreach 
     regarding telemarketing fraud, in accordance with the 
     standards issued under section 671(f) of the Housing and 
     Community Development Act of 1992 (42 U.S.C. 13631(f)); and 
     (G)''.
       (2) Other federally assisted housing.--Section 671 of the 
     Housing and Community Development Act of 1992 (42 U.S.C. 
     13631), as amended by subsection (b) of this section, is 
     further amended--
       (A) in the first sentence of subsection (c), by inserting 
     after ``response,'' the following: ``providing education and 
     outreach regarding telemarketing fraud, in accordance with 
     the standards issued under subsection (f),''; and
       (B) by adding at the end the following new subsection:
       ``(f) Protection Against Telemarketing Fraud.--
       ``(1) In general.--The Secretary, in coordination with the 
     Secretary of Health and Human Services, shall establish 
     standards for service coordinators in federally assisted 
     housing who are providing education and outreach to elderly 
     persons residing in such housing regarding telemarketing 
     fraud. The standards shall be designed to ensure that such 
     education and outreach informs such elderly persons of the 
     dangers of telemarketing fraud and facilitates the 
     investigation and prosecution of telemarketers engaging in 
     fraud against such residents.
       ``(2) Contents.--The standards established under this 
     subsection shall require that any such education and outreach 
     be provided in a manner that--
       ``(A) informs such residents of (i) the prevalence of 
     telemarketing fraud targeted against elderly persons; (ii) 
     how telemarketing fraud works; (iii) how to identify 
     telemarketing fraud; (iv) how to protect themselves against 
     telemarketing fraud, including an explanation of the dangers 
     of providing bank account, credit card, or other financial or 
     personal information over the telephone to unsolicited 
     callers; (v) how to report suspected attempts at 
     telemarketing fraud; and (vi) their consumer protection 
     rights under Federal law;
       ``(B) provides such other information as the Secretary 
     considers necessary to protect such residents against 
     fraudulent telemarketing; and
       ``(C) disseminates the information provided by appropriate 
     means, and in determining such appropriate means, the 
     Secretary shall consider on-site presentations at federally 
     assisted housing, public service announcements, a printed 
     manual or pamphlet, an Internet website, and telephone 
     outreach to residents whose names appear on `mooch lists' 
     confiscated from fraudulent telemarketers.''.

     SEC. 342. COMMISSION ON AFFORDABLE HOUSING AND HEALTH CARE 
                   FACILITY NEEDS IN THE 21ST CENTURY.

       (a) Establishment.--There is hereby established a 
     commission to be known as the Commission on Affordable 
     Housing and Health Care Facility Needs in the 21st Century 
     (in this section referred to as the ``Commission''.
       (b) Study.--The duty of the Commission shall be to conduct 
     a study that--
       (1) compiles and interprets information regarding the 
     expected increase in the population of persons 62 years of 
     age or older, particularly information regarding distribution 
     of income levels, homeownership and home equity rates, and 
     degree or extent of health and independence of living;
       (2) provides an estimate of the future needs of seniors for 
     affordable housing and assisted living and health care 
     facilities;
       (3) provides a comparison of estimate of such future needs 
     with an estimate of the housing and facilities expected to be 
     provided under existing public programs, and identifies 
     possible actions or initiatives that may assist in providing 
     affordable housing and assisted living and health care 
     facilities to meet such expected needs;
       (4) identifies and analyzes methods of encouraging 
     increased private sector participation, investment, and 
     capital formation in affordable housing and assisted living 
     and health care facilities for seniors through partnerships 
     between public and private entities and other creative 
     strategies;
       (5) analyzes the costs and benefits of comprehensive aging-
     in-place strategies, taking into consideration physical and 
     mental well-being and the importance of coordination between 
     shelter and supportive services;
       (6) identifies and analyzes methods of promoting a more 
     comprehensive approach to dealing with housing and supportive 
     service issues involved in aging and the multiple 
     governmental agencies involved in such issues, including the 
     Department of Housing and Urban Development and the 
     Department of Health and Human Services; and
       (7) examines how to establish intergenerational learning 
     and care centers and living arrangements, in particular to 
     facilitate appropriate environments for families consisting 
     only of children and a grandparent or grandparents who are 
     the head of the household.
       (c) Membership.--
       (1) Number and Appointment.--The Commission shall be 
     composed of 14 members, appointed not later than January 1, 
     2000, as follows:
       (A) 2 co-chairpersons, of whom--
       (i) 1 co-chairperson shall be appointed by a committee 
     consisting of the chairman of the Subcommittee on Housing and 
     Community Opportunities of the House of Representatives and 
     the chairman of the Subcommittee on Housing and 
     Transportation of the Senate, and the chairmen of the 
     Subcommittees on the Departments of Veterans Affairs and 
     Housing and Urban Development, and Independent Agencies of 
     the Committees on Appropriations of the House of 
     Representatives and the Senate; and
       (ii) 1 co-chairperson shall be appointed by a committee 
     consisting of the ranking minority member of the Subcommittee 
     on Housing and Community Opportunities of the House of 
     Representatives and the ranking minority member of the 
     Subcommittee on Housing and Transportation of the Senate, and 
     the ranking minority members of the Subcommittees on the 
     Departments of Veterans Affairs and Housing and Urban 
     Development, and Independent Agencies of the Committees on 
     Appropriations of the House of Representatives and the 
     Senate.
       (B) 6 members appointed by the Chairman and Ranking 
     Minority Member of the Committee on Banking and Financial 
     Services of the House of Representatives and the Chairman and 
     Ranking Minority Member of the Committee on Appropriations of 
     the House of Representatives.
       (C) 6 members appointed by the Chairman and Ranking 
     Minority Member of the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Chairman and Ranking 
     Minority Member of the Committee on Appropriations of the 
     Senate.
       (2) Qualifications.--Appointees should have proven 
     expertise in directing, assembling, or applying capital 
     resources from a variety of sources to the successful 
     development of affordable housing, assisted living 
     facilities, or health care facilities.
       (3) Vacancies.--Any vacancy on the Commission shall not 
     affect its powers and shall be filled in the manner in which 
     the original appointment was made.
       (4) Chairpersons.--The members appointed pursuant to 
     paragraph (1)(A) shall serve as co-chairpersons of the 
     Commission.
       (5) Prohibition of pay.--Members of the Commission shall 
     serve without pay.
       (6) Travel expenses.--Each member of the Commission shall 
     receive travel expenses, including per diem in lieu of 
     subsistence, in accordance with sections 5702 and 5703 of 
     title 5, United States Code.

[[Page 22836]]

       (7) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum but a lesser number may hold 
     hearings.
       (8) Meetings.--The Commission shall meet at the call of the 
     Chairpersons.
       (d) Director and Staff.--
       (1) Director.--The Commission shall have a Director who 
     shall be appointed by the Chairperson. The Director shall be 
     paid at a rate not to exceed the rate of basic pay payable 
     for level V of the Executive Schedule.
       (2) Staff.--The Commission may appoint personnel as 
     appropriate. The staff of the Commission shall be appointed 
     subject to the provisions of title 5, United States Code, 
     governing appointments in the competitive service, and shall 
     be paid in accordance with the provisions of chapter 51 and 
     subchapter III of chapter 53 of that title relating to 
     classification and General Schedule pay rates.
       (3) Experts and consultants.--The Commission may procure 
     temporary and intermittent services under section 3109(b) of 
     title 5, United States Code, but at rates for individuals not 
     to exceed the daily equivalent of the maximum annual rate of 
     basic pay payable for the General Schedule.
       (4) Staff of federal agencies.--Upon request of the 
     Commission, the head of any Federal department or agency may 
     detail, on a reimbursable basis, any of the personnel of that 
     department or agency to the Commission to assist it in 
     carrying out its duties under this Act.
       (e) Powers.--
       (1) Hearings and sessions.--The Commission may, for the 
     purpose of carrying out this section, hold hearings, sit and 
     act at times and places, take testimony, and receive evidence 
     as the Commission considers appropriate.
       (2) Powers of members and agents.--Any member or agent of 
     the Commission may, if authorized by the Commission, take any 
     action which the Commission is authorized to take by this 
     section.
       (3) Obtaining official data.--The Commission may secure 
     directly from any department or agency of the United States 
     information necessary to enable it to carry out this Act. 
     Upon request of the Chairpersons of the Commission, the head 
     of that department or agency shall furnish that information 
     to the Commission.
       (4) Gifts, bequests, and devises.--The Commission may 
     accept, use, and dispose of gifts, bequests, or devises of 
     services or property, both real and personal, for the purpose 
     of aiding or facilitating the work of the Commission. Gifts, 
     bequests, or devises of money and proceeds from sales of 
     other property received as gifts, bequests, or devises shall 
     be deposited in the Treasury and shall be available for 
     disbursement upon order of the Commission.
       (5) Mails.--The Commission may use the United States mails 
     in the same manner and under the same conditions as other 
     departments and agencies of the United States.
       (6) Administrative support services.--Upon the request of 
     the Commission, the Administrator of General Services shall 
     provide to the Commission, on a reimbursable basis, the 
     administrative support services necessary for the Commission 
     to carry out its responsibilities under this section.
       (7) Contract Authority.--The Commission may contract with 
     and compensate government and private agencies or persons for 
     services, without regard to section 3709 of the Revised 
     Statutes (41 U.S.C. 5).
       (f) Report.--The Commission shall submit to the Committees 
     on Banking and Financial Services and Appropriations of the 
     House of Representatives and the Committees on Banking, 
     Housing, and Urban Affairs and Appropriations of the Senate, 
     a final report not later than December 31, 2001. The report 
     shall contain a detailed statement of the findings and 
     conclusions of the Commission with respect to the study 
     conducted under subsection (b), together with its 
     recommendations for legislation, administrative actions, and 
     any other actions the Commission considers appropriate.
       (g) Funding.--Of any amounts appropriated for fiscal year 
     2000 to carry out title V of the Housing and Urban 
     Development Act of 1970 (12 U.S.C. 1701z-1 et seq.) $500,000 
     shall be available to the Commission for carrying out this 
     section.
       (h) Termination.--The Commission shall terminate on June 
     30, 2002. Section 14(a)(2)(B) of the Federal Advisory 
     Committee Act (5 U.S.C. App.; relating to the termination of 
     advisory committees) shall not apply to the Commission.

     TITLE IV--RENEWAL OF EXPIRING RENTAL ASSISTANCE CONTRACTS AND 
                        PROTECTION OF RESIDENTS

     SEC. 401. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that--
       (1) there exists throughout the United States a need for 
     decent, safe and affordable housing;
       (2) affordable housing is critical to the well-being of 
     seniors, persons with disabilities, and vulnerable families;
       (3) an unprecedented number of contracts for Federal rental 
     assistance are expiring now and will expire in the near 
     future;
       (4) a significant number of private owners of affordable 
     housing developments are choosing to not renew their subsidy 
     contracts with the Federal government;
       (5) in cases where assistance contracts are not renewed, 
     rent levels in the affected developments may rise 
     dramatically;
       (6) a significant number of residents in these developments 
     are seniors or persons with disabilities or are otherwise 
     vulnerable because of scarcity of available affordable 
     housing in the neighborhood, and have little or no means of 
     paying additional rent from personal income, putting at risk 
     what have been their homes for almost a quarter of a century; 
     and
       (7) the Federal Government should continue to work to 
     ensure that those least able to provide for themselves enjoy 
     the protection and welfare of the people of the United 
     States.
       (b) Purpose.--The purpose of this title is to protect 
     seniors, persons with disabilities, and other vulnerable 
     residents of affordable housing and to help provide those 
     residents with peace of mind and security for living--
       (1) by providing greater rental assistance flexibility to 
     ensure that vulnerable populations are not forced to move 
     from their homes when rent levels rise; and
       (2) where appropriate, by encouraging private owners of 
     affordable housing developments to continue serving low-
     income families by providing appropriate levels of Federal 
     resources, by allowing greater flexibility for refinancing, 
     and by ensuring more effective administration by the Federal 
     Government of rental assistance contract renegotiations.

     SEC. 402. RENEWAL OF EXPIRING CONTRACTS AND ENHANCED VOUCHERS 
                   FOR PROJECT RESIDENTS.

       (a) In General.--Section 524 of the Multifamily Assisted 
     Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f 
     note) is amended to read as follows:

     ``SEC. 524. RENEWAL OF EXPIRING PROJECT-BASED SECTION 8 
                   CONTRACTS.

       ``(a) In General.--
       ``(1) Renewal.--Subject to paragraph (2), upon termination 
     or expiration of a contract for project-based assistance 
     under section 8 for a multifamily housing project (and 
     notwithstanding section 8(v) of the United States Housing Act 
     of 1937 for loan management assistance), the Secretary shall, 
     at the request of the owner of the project and to the extent 
     sufficient amounts are made available in appropriation Acts, 
     use amounts available for the renewal of assistance under 
     section 8 of such Act to provide such assistance for the 
     project. The assistance shall be provided under a contract 
     having such terms and conditions as the Secretary considers 
     appropriate, subject to the requirements of this section. 
     This section shall not require contract renewal for a project 
     that is eligible under this subtitle for a mortgage 
     restructuring and rental assistance sufficiency plan, if 
     there is no approved plan for the project and the Secretary 
     determines that such an approved plan is necessary.
       ``(2) Prohibition on renewal.--Notwithstanding part 24 of 
     title 24 of the Code of Federal Regulations, the Secretary 
     may elect not to renew assistance for a project otherwise 
     required to be renewed under paragraph (1) or provide 
     comparable benefits under paragraph (1) or (2) of subsection 
     (e) for a project described in either such paragraph, if the 
     Secretary determines that a violation under paragraph (1) 
     through (4) of section 516(a) has occurred with respect to 
     the project. For purposes of such a determination, the 
     provisions of section 516 shall apply to a project under this 
     section in the same manner and to the same extent that the 
     provisions of such section apply to eligible multifamily 
     housing projects, except that the Secretary shall make the 
     determination under section 516(a)(4).
       ``(3) Contract term for mark-up-to-market contracts.--In 
     the case of an expiring or terminating contract that has rent 
     levels less than comparable market rents for the market area, 
     if the rent levels under the renewal contract under this 
     section are equal to comparable market rents for the market 
     area, the contract shall have a term of not less than 5 
     years, subject to the availability of sufficient amounts in 
     appropriation Acts.
       ``(4) Renewal rents.--Except as provided in subsection (b), 
     the contract for assistance shall provide assistance at the 
     following rent levels:
       ``(A) Market rents.--At the request of the owner of the 
     project, at rent levels equal to the lesser of comparable 
     market rents for the market area or 150 percent of the fair 
     market rents, in the case only of a project that--
       ``(i) has rent levels under the expiring or terminating 
     contract that do not exceed such comparable market rents;
       ``(ii) does not have a low- and moderate-income use 
     restriction that can not be eliminated by unilateral action 
     by the owner;
       ``(iii) is decent, safe, and sanitary housing, as 
     determined by the Secretary;
       ``(iv) is not--

       ``(I) owned by a nonprofit entity;
       ``(II) subject to a contract for moderate rehabilitation 
     assistance under section 8(e)(2) of the United States Housing 
     Act of 1937, as in effect before October 1, 1991; or
       ``(III) a project for which the public housing agency 
     provided voucher assistance to one or more of the tenants 
     after the owner has provided notice of termination of the 
     contract covering the tenant's unit; and

[[Page 22837]]

       ``(v) has units assisted under the contract for which the 
     comparable market rent exceeds 110 percent of the fair market 
     rent.

     The Secretary may adjust the percentages of fair market rent 
     (as specified in the matter preceding clause (i) and in 
     clause (v)), but only upon a determination and written 
     notification to the Congress within 10 days of making such 
     determination, that such adjustment is necessary to ensure 
     that this subparagraph covers projects with a high risk of 
     nonrenewal of expiring contracts for project-based 
     assistance.
       ``(B) Reduction to market rents.--In the case of a project 
     that has rent levels under the expiring or terminating 
     contract that exceed comparable market rents for the market 
     area, at rent levels equal to such comparable market rents.
       ``(C) Rents not exceeding market rents.--In the case of a 
     project that is not subject to subparagraph (A) or (B), at 
     rent levels that--
       ``(i) are not less than the existing rents under the 
     terminated or expiring contract, as adjusted by an operating 
     cost adjustment factor established by the Secretary (which 
     shall not result in a negative adjustment), if such adjusted 
     rents do not exceed comparable market rents for the market 
     area; and
       ``(ii) do not exceed comparable market rents for the market 
     area.

     In determining the rent level for a contract under this 
     subparagraph, the Secretary shall approve rents sufficient to 
     cover budget-based cost increases and shall give greater 
     consideration to providing rent at a level up to comparable 
     market rents for the market area based on the number of the 
     criteria under clauses (i) through (iv) of subparagraph (D) 
     that the project meets.
       ``(D) Waiver of 150 percent limitation.--Notwithstanding 
     subparagraph (A), at rent levels up to comparable market 
     rents for the market area, in the case of a project that 
     meets the requirements under clauses (i) through (v) of 
     subparagraph (A) and--
       ``(i) has residents who are a particularly vulnerable 
     population, as demonstrated by a high percentage of units 
     being rented to elderly families, disabled families, or large 
     families;
       ``(ii) is located in an area in which tenant-based 
     assistance would be difficult to use, as demonstrated by a 
     low vacancy rate for affordable housing, a high turnback rate 
     for vouchers, or a lack of comparable rental housing;
       ``(iii) is a high priority for the local community, as 
     demonstrated by a contribution of State or local funds to the 
     property; or
       ``(iv) is primarily occupied by elderly or disabled 
     families.

     In determining the rent level for a contract under this 
     subparagraph, the Secretary shall approve rents sufficient to 
     cover budget-based cost increases and shall give greater 
     consideration to providing rent at a level up to comparable 
     market rents for the market area based on the number of the 
     criteria under clauses (i) through (iv) that the project 
     meets.
       ``(5) Comparable market rents and comparison with fair 
     market rents.--The Secretary shall prescribe the method for 
     determining comparable market rent by comparison with rents 
     charged for comparable properties (as such term is defined in 
     section 512), which may include appropriate adjustments for 
     utility allowances and adjustments to reflect the value of 
     any subsidy (other than section 8 assistance) provided by the 
     Department of Housing and Urban Development.
       ``(b) Exception Rents.--
       ``(1) Renewal.--In the case of a multifamily housing 
     project described in paragraph (2), pursuant to the request 
     of the owner of the project, the contract for assistance for 
     the project pursuant to subsection (a) shall provide 
     assistance at the lesser of following rent levels:
       ``(A) Adjusted existing rents.--The existing rents under 
     the expiring contract, as adjusted by an operating cost 
     adjustment factor established by the Secretary (which shall 
     not result in a negative adjustment).
       ``(B) Budget-based rents.--Subject to a determination by 
     the Secretary that a rent level under this subparagraph is 
     appropriate for a project, a rent level that provides income 
     sufficient to support a budget-based rent (including a 
     budget-based rent adjustment if justified by reasonable and 
     expected operating expenses).
       ``(2) Projects covered.--A multifamily housing project 
     described in this paragraph is an multifamily housing project 
     that--
       ``(A) is not an eligible multifamily housing project under 
     section 512(2); or
       ``(B) is exempt from mortgage restructuring under this 
     subtitle pursuant to section 514(h).
       ``(c) Rent Adjustments After Renewal of Contract.--
       ``(1) Required.--After the initial renewal of a contract 
     for assistance under section 8 of the United States Housing 
     Act of 1937 pursuant to subsection (a), (b), or (e)(2), the 
     Secretary shall annually adjust the rents using an operating 
     cost adjustment factor established by the Secretary (which 
     shall not result in a negative adjustment) or, upon the 
     request of the owner and subject to approval of the 
     Secretary, on a budget basis. In the case of projects with 
     contracts renewed pursuant to subsection (a) or pursuant to 
     subsection (e)(2) at rent levels equal to comparable market 
     rents for the market area, at the expiration of each 5-year 
     period, the Secretary shall compare existing rents with 
     comparable market rents for the market area and may make any 
     adjustments in the rent necessary to maintain the contract 
     rents at a level not greater than comparable market rents or 
     to increase rents to comparable market rents.
       ``(2) Discretionary.--In addition to review and adjustment 
     required under paragraph (1), in the case of projects with 
     contracts renewed pursuant to subsection (a) or pursuant to 
     subsection (e)(2) at rent levels equal to comparable market 
     rents for the market area, the Secretary may, at the 
     discretion of the Secretary but only once within each 5-year 
     period referred to in paragraph (1), conduct a comparison of 
     rents for a project and adjust the rents accordingly to 
     maintain the contract rents at a level not greater than 
     comparable market rents or to increase rents to comparable 
     market rents.
       ``(d) Enhanced Vouchers Upon Contract Expiration.--
       ``(1) In general.--In the case of a contract for project-
     based assistance under section 8 for a covered project that 
     is not renewed under subsection (a) or (b) of this section 
     (or any other authority), to the extent that amounts for 
     assistance under this subsection are provided in advance in 
     appropriation Acts, upon the date of the expiration of such 
     contract the Secretary shall make enhanced voucher assistance 
     under this subsection available on behalf of each low-income 
     family who, upon the date of such expiration, is residing in 
     an assisted dwelling unit in the covered project.
       ``(2) Enhanced assistance.--Enhanced voucher assistance 
     under this subsection for a family shall be voucher 
     assistance under section 8(o) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437f(o)), except that under such 
     enhanced voucher assistance--
       ``(A) during any period that the assisted family continues 
     residing in the covered project in which the family was 
     residing on the date of the expiration of such contract and 
     the rent for the dwelling unit of the family in such project 
     exceeds the applicable payment standard established pursuant 
     to section 8(o) for the unit, the amount of rental assistance 
     provided on behalf of the family shall be determined using a 
     payment standard that is equal to the rent for the dwelling 
     unit (as such rent may be increased from time to time), 
     subject to paragraph (10)(A) of such section 8(o); and
       ``(B) subparagraph (A) of this paragraph shall not apply 
     and the payment standard for the dwelling unit occupied by 
     the family shall be determined in accordance with section 
     8(o) if--
       ``(i) the assisted family moves, at any time, from such 
     covered project; or
       ``(ii) the voucher is made available for use by any family 
     other than the original family on behalf of whom the voucher 
     was provided pursuant to paragraph (1).
       ``(3) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Assisted dwelling unit.--The term `assisted dwelling 
     unit' means a dwelling unit that--
       ``(i) is in a covered project; and
       ``(ii) is covered by rental assistance provided under the 
     contract for project-based assistance for the covered 
     project.
       ``(B) Covered project.--The term `covered project' means 
     any housing that--
       ``(i) consists of more than 4 dwelling units;
       ``(ii) is covered in whole or in part by a contract for 
     project-based assistance under--

       ``(I) the new construction or substantial rehabilitation 
     program under section 8(b)(2) of the United States Housing 
     Act of 1937 (as in effect before October 1, 1983),
       ``(II) the property disposition program under section 8(b) 
     of the United States Housing Act of 1937,
       ``(III) the moderate rehabilitation program under section 
     8(e)(2) of the United States Housing Act of 1937 (as in 
     effect before October 1, 1991);
       ``(IV) the loan management assistance program under section 
     8 of the United States Housing Act of 1937,
       ``(V) section 23 of the United States Housing Act of 1937 
     (as in effect before January 1, 1975),
       ``(VI) the rent supplement program under section 101 of the 
     Housing and Urban Development Act of 1965, or
       ``(VII) section 8 of the United States Housing Act of 1937, 
     following conversion from assistance under section 101 of the 
     Housing and Urban Development Act of 1965,

     which contract will (under its own terms) expire during the 
     period consisting of fiscal years 2000 through 2004; and
       ``(iii) is not housing for which residents are eligible for 
     enhanced voucher assistance as provided, pursuant to the 
     `Preserving Existing Housing Investment' account in the 
     Departments of Veterans Affairs and Housing and Urban 
     Development, and Independent Agencies Appropriations Act, 
     1997 (Public Law 104-204; 110 Stat. 2884) or any other 
     subsequently enacted provision of law, in lieu of any 
     benefits under section 223 of the Low-Income Housing 
     Preservation and Resident Homeownership Act of 1990 (12 
     U.S.C. 4113).
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated for

[[Page 22838]]

     each of fiscal years 2000, 2001, 2002, 2003, and 2004 such 
     sums as may be necessary for enhanced voucher assistance 
     under this subsection.
       ``(e) Contractual Commitments Under Preservation Laws.--
     Except as provided in subsection (a)(2) and notwithstanding 
     any other provision of this subtitle, the following shall 
     apply:
       ``(1) Preservation projects.--Upon expiration of a contract 
     for assistance under section 8 for a project that is subject 
     to an approved plan of action under the Emergency Low Income 
     Housing Preservation Act of 1987 (12 U.S.C. 1715l note) or 
     the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990 (12 U.S.C. 4101 et seq.), to the 
     extent sufficient amounts are made available in appropriation 
     Acts, the Secretary shall provide to the owner benefits 
     comparable to those provided under such plan of action, 
     including distributions, rent increase procedures, and 
     duration of low-income affordability restrictions. This 
     paragraph shall apply to projects with contracts expiring 
     before, on, or after the date of the enactment of this 
     section.
       ``(2) Demonstration projects.--
       ``(A) In general.--Upon expiration of a contract for 
     assistance under section 8 for a project entered into 
     pursuant to any authority specified in subparagraph (B) for 
     which the Secretary determines that debt restructuring is 
     inappropriate, the Secretary shall, at the request of the 
     owner of the project and to the extent sufficient amounts are 
     made available in appropriation Acts, provide benefits to the 
     owner comparable to those provided under such contract, 
     including annual distributions, rent increase procedures, and 
     duration of low-income affordability restrictions. This 
     paragraph shall apply to projects with contracts expiring 
     before, on, or after the date of the enactment of this 
     section.
       ``(B) Demonstration programs.--The authority specified in 
     this subparagraph is the authority under--
       ``(i) section 210 of the Departments of Veterans Affairs 
     and Housing and Urban Development, and Independent Agencies 
     Appropriations Act, 1996 (Public Law 104-134; 110 Stat. 1321-
     285; 42 U.S.C. 1437f note);
       ``(ii) section 212 of the Departments of Veterans Affairs 
     and Housing and Urban Development, and Independent Agencies 
     Appropriations Act, 1997 (Public Law 104-204; 110 Stat. 2897; 
     42 U.S.C. 1437f note); and
       ``(iii) either of such sections, pursuant to any provision 
     of this title.
       ``(f) Preemption of Conflicting State Laws Limiting 
     Distributions.--No State or political subdivision of a State 
     may establish, continue in effect, or enforce any law or 
     regulation that limits or restricts, to an amount that is 
     less than the amount provided for under the regulations of 
     the Secretary establishing allowable project distributions to 
     provide a return on investment, the amount of surplus funds 
     accruing after the date of the enactment of this section that 
     may be distributed from any project assisted under a contract 
     for rental assistance renewed under any provision of this 
     section to the owner of the project. This subsection may not 
     be construed to provide for, allow, or result in the release 
     or termination, for any project, of any low- or moderate-
     income use restrictions that can not be eliminated by 
     unilateral action of the owner of the project.
       ``(g) Rule of Construction.--Expiring contracts for 
     moderate rehabilitation assistance under section 8(e)(2) of 
     the United States Housing Act of 1937, as in effect before 
     October 1, 1991, shall be subject to renewal under the 
     provisions of this section and such renewal contract may not 
     be considered, construed, or administered as providing 
     moderate rehabilitation assistance under such section 
     8(e)(2), except that the Secretary may provide such 
     assistance in a manner, and subject to such rules and 
     procedures, as the Secretary may designate. If the owner of a 
     project with such an expiring contract requests renewal of 
     the contract, the Secretary shall renew the expiring 
     contract, subject to the provisions of this section, within 6 
     months of the date of such expiration, notwithstanding 
     whether any tenant-based rental assistance has been provided 
     to tenants of the project. This subsection shall apply to 
     projects with contracts expiring before, on, or after the 
     date of the enactment of this section.
       ``(h) Applicability.--Except to the extent otherwise 
     specifically provided in this section, this section shall 
     apply with respect to any multifamily housing project having 
     a contract for project-based assistance under section 8 that 
     terminates or expires during fiscal year 2000 or 
     thereafter.''.
       (b) Definition of Eligible Multifamily Housing Project.--
     Section 512(2) of the Multifamily Assisted Housing Reform and 
     Affordability Act of 1997 (42 U.S.C. 1437f note) is amended 
     by inserting after and below subparagraph (C) the following:
     ``Such term does not include any project with an expiring 
     contract described in paragraph (1) or (2) of section 
     524(e).''.
       (c) Projects Exempted From Restructuring Agreements.--
     Section 514(h) of the Multifamily Assisted Housing Reform and 
     Affordability Act of 1997 (42 U.S.C. 1437f note) is amended 
     by inserting before the semicolon at the end the following: 
     ``and the financing involves mortgage insurance under the 
     National Housing Act, such that the implementation of a 
     mortgage restructuring and rental assistance sufficiency plan 
     under this subtitle is in conflict with applicable law or 
     agreements governing such financing''.
       (d) Conforming Amendments.--Section 8 of the United States 
     Housing Act of 1937 (42 U.S.C. 1437f) is amended--
       (1) by designating as subsection (v) the sentence added by 
     section 405(c) of The Balanced Budget Downpayment Act, I 
     (Public Law 104-99; 110 Stat. 44); and
       (2) by striking subsection (w).

     SEC. 403. SECTION 236 ASSISTANCE.

       (a) Continued Receipt of Subsidies Upon Refinancing.--
     Section 236(e) of the National Housing Act (12 U.S.C. 1715z-
     1(e)) is amended--
       (1) by inserting ``(1)'' after ``(e)''; and
       (2) by adding at the end the following new paragraph:
       ``(2) A project for which interest reduction payments are 
     made under this section and for which the mortgage on the 
     project has been refinanced shall continue to receive the 
     interest reduction payments under this section under the 
     terms of the contract for such payments, but only if the 
     project owner enters into such binding commitments as the 
     Secretary may require (which shall be applicable to any 
     subsequent owner) to ensure that the owner will continue to 
     operate the project in accordance with all low-income 
     affordability restrictions for the project in connection with 
     the Federal assistance for the project for a period having a 
     duration that is not less than the term for which such 
     interest reduction payments are made.''.
       (b) Retention of Excess Income.--Section 236(g) of the 
     National Housing Act (12 U.S.C. 1715z-1(g)) is amended--
       (1) by inserting ``(1)'' after ``(g)'';
       (2) by striking the last sentence; and
       (3) by adding at the end the following new paragraphs:
       ``(2) Subject to paragraph (3) and notwithstanding any 
     other requirements of this subsection, a project owner may 
     retain some or all of such excess charges for project use if 
     authorized by the Secretary. Such use shall be for project 
     use and upon terms and conditions established by the 
     Secretary.
       ``(3) The authority under paragraph (2) to retain and use 
     excess charges shall apply--
       ``(A) during fiscal year 2000, to all project owners 
     collecting such excess charges; and
       ``(B) during fiscal year 2001 and thereafter--
       ``(i) to any owner of project with a mortgage insured under 
     this section, or a project previously assisted under 
     subsection (b) but without a mortgage insured under this 
     section if the project was insured under section 207 of this 
     Act before July 30, 1998, pursuant to section 223(f) of this 
     Act and assisted under subsection (b); and
       ``(ii) to other project owners not referred to in clause 
     (i) who collect such excess charges, but only to the extent 
     that such retention and use is approved in advance in an 
     appropriation Act.''.
       (c) Previously Owed Excess Income.--Section 236(g) of the 
     National Housing Act (12 U.S.C. 1715z-1(g)), as amended by 
     subsection (b) of this section, is further amended by adding 
     at the end the following new paragraph:
       ``(4) The Secretary shall not withhold approval of the 
     retention by the owner of such excess charges because of the 
     existence of unpaid excess charges if such unpaid amount is 
     being remitted to the Secretary over a period of time in 
     accordance with a workout agreement with the Secretary, 
     unless the Secretary determines that the owner is in 
     violation of the workout agreement.''.
       (d) Flexibility Regarding Basic Rents and Market Rents.--
     Section 236(f) of the National Housing Act (12 U.S.C. 1715z-
     1(f)(1)) is amended by striking the subsection designation 
     and all that follows through the end of paragraph (1) and 
     inserting the following:
       ``(f)(1)(A)(i) For each dwelling unit there shall be 
     established, with the approval of the Secretary, a basic 
     rental charge and fair market rental charge.
       ``(ii) The basic rental charge shall be--
       ``(I) the amount needed to operate the project with 
     payments of principal and interest due under a mortgage 
     bearing interest at the rate of 1 percent per annum; or
       ``(II) an amount greater than that determined under clause 
     (ii)(I), but not greater than the market rent for a 
     comparable unassisted unit, reduced by the value of the 
     interest reduction payments subsidy.
       ``(iii) The fair market rental charge shall be--
       ``(I) the amount needed to operate the project with 
     payments of principal, interest, and mortgage insurance 
     premium which the mortgagor is obligated to pay under the 
     mortgage covering the project; or
       ``(II) an amount greater than that determined under clause 
     (iii)(I), but not greater than the market rent for a 
     comparable unassisted unit.
       ``(iv) The Secretary may approve a basic rental charge and 
     fair market rental charge for a unit that exceeds the minimum 
     amounts permitted by this subparagraph for such charges only 
     if--
       ``(I) the approved basic rental charge and fair market 
     rental charges each exceed the applicable minimum charge by 
     the same amount; and

[[Page 22839]]

       ``(II) the project owner agrees to restrictions on project 
     use or mortgage prepayment that are acceptable to the 
     Secretary.
       ``(v) The Secretary may approve a basic rental charge and 
     fair market rental charge under this paragraph for a unit 
     with assistance under section 8 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437f) that differs from the basic 
     rental charge and fair market rental charge for a unit in the 
     same project that is similar in size and amenities but 
     without such assistance, as needed to ensure equitable 
     treatment of tenants in units without such assistance.
       ``(B)(i) The rental charge for each dwelling unit shall be 
     at the basic rental charge or such greater amount, not 
     exceeding the fair market rental charge determined pursuant 
     to subparagraph (A), as represents 30 percent of the tenant's 
     adjusted income, except as otherwise provided in this 
     subparagraph.
       ``(ii) In the case of a project which contains more than 
     5000 units, is subject to an interest reduction payments 
     contract, and is financed under a State or local project, the 
     Secretary may reduce the rental charge ceiling, but in no 
     case shall the rental charge be below the basic rental charge 
     set forth in subparagraph (A)(ii)(I).
       ``(iii) For plans of action approved for capital grants 
     under the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990 or the Emergency Low Income Housing 
     Preservation Act of 1987, the rental charge for each dwelling 
     unit shall be at the minimum basic rental charge set forth in 
     subparagraph (A)(ii)(I) or such greater amount, not exceeding 
     the lower of (I) the fair market rental charge set forth in 
     subparagraph (A)(iii)(I), or (II) the actual rent paid for a 
     comparable unit in comparable unassisted housing in the 
     market area in which the housing assisted under this section 
     is located, as represents 30 percent of the tenant's adjusted 
     income.
       ``(C) With respect to those projects which the Secretary 
     determines have separate utility metering paid by the tenants 
     for some or all dwelling units, the Secretary may--
       ``(i) permit the basic rental charge and the fair market 
     rental charge to be determined on the basis of operating the 
     project without the payment of the cost of utility services 
     used by such dwelling units; and
       ``(ii) permit the charging of a rental for such dwelling 
     units at such an amount less than 30 percent of a tenant's 
     adjusted income as the Secretary determines represents a 
     proportionate decrease for the utility charges to be paid by 
     such tenant, but in no case shall rental be lower than 25 
     percent of a tenant's adjusted income.''.
       (e) Effective Date of 1998 Provisions.--Section 236(g) of 
     the National Housing Act (12 U.S.C. 1715z-1(g)), as amended 
     by section 227 of the Departments of Veterans Affairs and 
     Housing and Urban Development, and Independent Agencies 
     Appropriations Act, 1999 (Public Law 105-276; 112 Stat. 2490) 
     shall be effective on the date of the enactment of such 
     Public Law 105-276, and any excess rental charges referred to 
     in such section that have been collected since such date of 
     enactment with respect to projects with mortgages insured 
     under section 207 of the National Housing Act (12 U.S.C. 
     1713) may be retained by the project owner unless the 
     Secretary of Housing and Urban Development specifically 
     provides otherwise. The Secretary may return any excess 
     charges remitted to the Secretary since such date of 
     enactment.
       (f) Effective Date.--This section shall take effect, and 
     the amendments made by this section are made and shall apply, 
     on the date of the enactment of this Act.

     SEC. 404. MATCHING GRANT PROGRAM FOR AFFORDABLE HOUSING 
                   PRESERVATION.

       (a) Amendment to Low-Income Housing Preservation and 
     Resident Homeownership Act of 1990.--Title II of the Housing 
     and Community Development Act of 1987 (12 U.S.C. 4101 et 
     seq.) is amended--
       (1) by striking subtitles C and D (as enacted by Public Law 
     100-242; 101 Stat. 1886); and
       (2) by adding at the end the following new subtitle:

                ``Subtitle D--Matching Grants for States

     ``SEC. 261. AUTHORITY.

       ``The Secretary of Housing and Urban Development shall, to 
     the extent amounts are made available pursuant to section 
     269, make grants under this subtitle to States and qualified 
     units of general local government for low-income housing 
     preservation.

     ``SEC. 262. USE OF GRANTS.

       ``(a) In General.--Amounts from grants under this subtitle 
     may be used only for assistance for acquisition, preservation 
     incentives, operating costs, and capital expenditures for a 
     housing project that--
       ``(1) is at risk of loss for use as affordable housing;
       ``(2)(A) is primarily occupied by elderly or disabled 
     families;
       ``(B) contains one or more dwelling units with 3 or more 
     bedrooms that are occupied by large families;
       ``(C) is located in a rural area with an inadequate supply 
     of comparable housing, as determined by the Secretary; or
       ``(D) is located in a neighborhood or area--
       ``(i) that is geographically smaller than a market area; 
     and
       ``(ii) within which, in the determination of the Secretary, 
     rental assistance vouchers would be difficult to use, as 
     demonstrated by a low vacancy rate for affordable housing, a 
     high turnback rate for such vouchers, or a lack of comparable 
     rental housing;
       ``(3) meets the requirements under subsection (b), (c), or 
     (d); and
       ``(4) is subject to such binding commitments as the 
     Secretary shall require (which shall be applicable to any 
     subsequent owner) to ensure that the low-income affordability 
     restrictions for the project in connection with Federal 
     assistance for the project have been extended for the full 
     period applicable under the terms of assistance for the 
     project, but in no case for a period shorter than 5 years.
       ``(b) Projects With Federally Assisted Mortgages.--A 
     project meets the requirements under this subsection only 
     if--
       ``(1) 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 and receiving loan 
     management assistance under section 8 of the United States 
     Housing Act of 1937 due to a conversion from section 101 of 
     the Housing and Urban Development Act of 1965;
       ``(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;
       ``(C) insured, assisted, or held by the Secretary or a 
     State or State agency under section 236 of the National 
     Housing Act;
       ``(D) held by the Secretary and formerly insured under a 
     program referred to in subparagraph (A), (B), or (C); or
       ``(E) insured or held by the Secretary of Agriculture under 
     section 514 or 515 of the Housing Act of 1949; and
       ``(2) the project is subject to an unconditional waiver of, 
     with respect to the remaining term of the mortgage referred 
     to in paragraph (1)--
       ``(A) all rights to any prepayment of the mortgage, and
       ``(B) all rights to any voluntary termination of the 
     mortgage insurance contract for the mortgage or the interest 
     reduction payments contract, as applicable;

     except that such requirement shall not apply in the case of a 
     project that is subject to a binding agreement that ensures 
     that the project will continue to operate, at least until the 
     maturity date of the loan or mortgage, in a manner that will 
     provide rental housing on terms at least as advantageous to 
     existing and future tenants as the terms required by the 
     program under which the loan or mortgage was made or insured 
     prior to the proposed prepayment or termination.
       ``(c) Projects With Section 8 Project-Based Assistance.--A 
     project meets the requirements under this subsection only 
     if--
       ``(1) the project is subject to a contract for project-
     based assistance; and
       ``(2) the owner of the project has entered into binding 
     commitments (applicable to any subsequent owner) to extend 
     such assistance (subject to the availability of amounts for 
     such purpose) for a minimum of 5 years, or longer, as the 
     Secretary may prescribe under this section.
       ``(d) Projects Purchased By Residents.--A project meets the 
     requirements under this subsection only if the project--
       ``(1) is or was eligible low-income housing (as such term 
     is defined in section 229 (42 U.S.C. 4119)); and
       ``(2) has been purchased by a resident council 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 under section 
     226 (12 U.S.C. 4116).
       ``(e) Combination of Assistance.--Notwithstanding 
     subsection (a), any project that is otherwise eligible for 
     assistance with grant amounts provided under this subtitle 
     because the project meets the requirements under subsection 
     (b) or (c) and that also meets the requirements under 
     paragraph (1) of the other of such subsections, shall be 
     eligible for such assistance only if the project complies 
     with all of the requirements under such other subsection.

     ``SEC. 263. GRANT AMOUNT LIMITATION.

       ``The Secretary shall limit the portion of the aggregate 
     amount of grants under this subtitle made available for any 
     fiscal year that may be provided to a single State or 
     qualified unit of general local government based upon the 
     proportion of such State's or unit's need (as determined by 
     the Secretary) for such assistance to the aggregate need 
     among all States and qualified units of general local 
     government approved for such assistance for such fiscal year.

     ``SEC. 264. MATCHING REQUIREMENT.

       ``(a) In General.--The Secretary may not make a grant under 
     this subtitle to any State or qualified unit of general local 
     government for any fiscal year in a total amount that exceeds 
     the sum of the following amounts:
       ``(1) 100 percent of the amount that the State or qualified 
     unit of general local government certifies, as the Secretary 
     shall require, that the State or qualified unit will 
     contribute for such fiscal year, or has contributed since 
     January 1, 1999, for the purposes under section 262(a).

[[Page 22840]]

       ``(2) 50 percent of the amount that the State or qualified 
     unit of general local government certifies will be or have 
     been so contributed from Federal sources.
       ``(b) Treatment of Previous Contributions.--Any portion of 
     amounts contributed after January 1, 1999, that are counted 
     for purposes of meeting the applicable requirement under 
     subsection (a) for a fiscal year may not be counted for such 
     purposes for any subsequent fiscal year.
       ``(c) Treatment of Tax Credits.--Tax credits provided under 
     section 42 of the Internal Revenue Code of 1986 and proceeds 
     from the sale of tax-exempt revenue bonds, by any State, 
     county, or local government entity, which are subject to 
     volume limitation under Federal law, shall not be considered 
     non-Federal sources for purposes of this section.

     ``SEC. 265. TREATMENT OF SUBSIDY LAYERING REQUIREMENTS.

       ``Neither section 264 nor any other provision of this 
     subtitle may be construed to prevent the use of tax credits 
     provided under section 42 of the Internal Revenue Code of 
     1986 in connection with housing assisted with grant amounts 
     provided under this subtitle, 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).

     ``SEC. 266. APPLICATIONS AND PREFERENCE.

       ``(a) Applications.--The Secretary shall provide for States 
     and units of general local government (through appropriate 
     State and local government agencies, including State and 
     local housing finance agencies) to submit applications for 
     grants under this subtitle. The Secretary shall require the 
     applications to contain any information and certifications 
     necessary for the Secretary to determine whether the State or 
     unit of general local government is eligible to receive such 
     a grant.
       ``(b) Preference.--In making grants under this subtitle 
     during fiscal years 2001 and thereafter, the Secretary shall 
     give preference--
       ``(1) among applications otherwise having equal merit for 
     funding under this subtitle, to funding applications for 
     eligible States, and qualified units of general local 
     government located in States, that have not previously 
     received a grant under this subtitle; and
       ``(2) to grants for eligible housing projects that are 
     subject to such binding commitments as the Secretary may 
     require to ensure that the project will be sold or 
     transferred to an owner that is a nonprofit organization.

     ``SEC. 267. DEFINITIONS.

       ``For purposes of this subtitle, the following definitions 
     shall apply:
       ``(1) Low-income affordability restrictions.--The term 
     `low-income affordability restrictions' has the meaning given 
     such term in section 229.
       ``(2) Project-based assistance.--The term `project-based 
     assistance' has the meaning given such term in section 16(c) 
     of the United States Housing Act of 1937 (42 U.S.C. 
     1437n(c)), except that such term includes assistance under 
     any successor programs to the programs referred to in such 
     section.
       ``(3) Qualified unit of general local government.--The term 
     `qualified unit of general local government' means, with 
     respect to a fiscal year, a unit of general local government 
     that is located within a State that--
       ``(A) has not applied, and has indicated (in accordance 
     with such requirements as the Secretary shall establish) that 
     it will not apply, to the Secretary for a grant under this 
     subtitle for the fiscal year; or
       ``(B) has been determined by the Secretary not to be 
     eligible for a grant under this subtitle for the fiscal year.
       ``(4) Secretary.--The term `Secretary' means the Secretary 
     of Housing and Urban Development.
       ``(5) State.--The term `State' means the States of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, Guam, the Virgin Islands, American Samoa, and any 
     other territory or possession of the United States.
       ``(6) Unit of general local government.--The term `unit of 
     general local government' has the meaning given such term in 
     section 102 of the Housing and Community Development Act of 
     1974 (42 U.S.C. 5302).

     ``SEC. 268. REGULATIONS.

       ``The Secretary may issue any regulations necessary to 
     carry out this subtitle.

     ``SEC. 269. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated for grants under 
     this subtitle such sums as may be necessary for each of 
     fiscal years, 2000, 2001, and 2002.''.
       (b) Rule of Construction.--The amendment made by subsection 
     (a)(1) of this section (relating to striking subtitles C and 
     D of title II of the Housing and Community Development Act of 
     1987) may not be construed to repeal or otherwise affect any 
     provision of law that was amended by such subtitles.

     SEC. 405. REHABILITATION OF ASSISTED HOUSING.

       (a) Rehabilitation Loans From Recaptured IRP Amounts.--
     Section 236(s) of the National Housing Act (12 U.S.C. 1715z-
     1) is amended--
       (1) by striking the subsection designation and heading and 
     inserting the following:
       ``(s) Grants and Loans for Rehabilitation of Multifamily 
     Projects.--'';
       (2) in paragraph (1), by inserting ``and loans'' after 
     ``grants'';
       (3) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``capital grant assistance under this subsection'' and 
     inserting ``capital assistance under this subsection under a 
     grant or loan only''; and
       (B) in subparagraph (D)(i), by striking ``capital grant 
     assistance'' and inserting ``capital assistance under this 
     subsection from a grant or loan (as appropriate)'';
       (4) in paragraph (3), by striking all of the matter that 
     precedes subparagraph (A) and inserting the following:
       ``(3) Eligible uses.--Amounts from a grant or loan under 
     this subsection may be used only for projects eligible under 
     paragraph (2) for the purposes of--'';
       (5) in paragraph (4)--
       (A) by striking the paragraph heading and inserting ``Grant 
     and loan agreements''; and
       (B) by inserting ``or loan'' after ``grant'', each place it 
     appears;
       (6) in paragraph (5), by inserting ``or loan'' after 
     ``grant'', each place it appears;
       (7) in paragraph (6), as amended by the preceding 
     provisions of this Act, by adding at the end the following 
     new subparagraph:
       ``(D) Loans.--In making loans under this subsection using 
     the amounts that the Secretary has recaptured from contracts 
     for interest reduction payments pursuant to clause (i) or 
     (ii) of paragraph (7)(A)--
       ``(i) the Secretary may use such recaptured amounts for 
     costs (as such term is defined in section 502 of the 
     Congressional Budget Act of 1974) of such loans;
       ``(ii) the Secretary may make loans in any fiscal year only 
     to the extent or in such amounts that amounts are used under 
     clause (i) to cover costs of such loans; and
       ``(iii) the authority of the Secretary to enter into 
     commitments to make such loans shall be effective for any 
     fiscal year only to the extent that (I) there is enacted in 
     advance, in an appropriations Act, a maximum limitation on 
     the aggregate principal amount of such commitments for such 
     fiscal year, and (II) the aggregate principal amount of such 
     commitments entered into by the Secretary does not exceed 
     such maximum amount.'';
       (8) by redesignating paragraphs (5) and (6) (as amended by 
     the preceding provisions of this subsection) as paragraphs 
     (6) and (7); and
       (9) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Loan terms.--A loan under this subsection--
       ``(A) shall provide amounts for the eligible uses under 
     paragraph (3) in a single loan disbursement of loan 
     principal;
       ``(B) shall be repaid, as to principal and interest, on 
     behalf of the borrower using amounts recaptured from 
     contracts for interest reduction payments pursuant to clause 
     (i) or (ii) of paragraph (7)(A);
       ``(C) shall have a term to maturity of a duration not 
     shorter than the remaining period for which the interest 
     reduction payments for the insured mortgage or mortgages that 
     fund repayment of the loan would have continued after 
     extinguishment or writedown of the mortgage (in accordance 
     with the terms of such mortgage in effect immediately before 
     such extinguishment or writedown);
       ``(D) shall bear interest at a rate, as determined by the 
     Secretary of the Treasury, that is based upon the current 
     market yields on outstanding marketable obligations of the 
     United States having comparable maturities; and
       ``(E) shall involve a principal obligation of an amount not 
     exceeding the amount that can be repaid using amounts 
     described in subparagraph (B) over the term determined in 
     accordance with subparagraph (C), with interest at the rate 
     determined under subparagraph (D).''.
       (b) Eligibility of Noninsured Projects for IRP Capital 
     Grants.--Section 236(s)(2) of the National Housing Act (12 
     U.S.C. 1715z-1(s)(2)(A)) is amended by striking subparagraph 
     (A) and inserting the following new subparagraph:
       ``(A) if the project is federally assisted housing 
     described in subparagraph (B), (C), (D), (E), (F) or (G) of 
     section 683(2) of the Housing and Community Development Act 
     of 1992 (42 U.S.C. 13641(2));''.
       (c) IRP Capital Grants Requirement for Extension of Low-
     Income Affordability Requirements.--Section 236(s) of the 
     National Housing Act (12 U.S.C. 1715z-1(s)) is amended--
       (1) in paragraph (2)--
       (A) by redesignating subparagraphs (C) and (D), as amended 
     by the preceding provisions of this section, as subparagraphs 
     (D) and (E), respectively; and
       (B) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) the project owner enters into such binding 
     commitments as the Secretary may require (which shall be 
     applicable to any subsequent owner) to ensure that the owner 
     will continue to operate the project in accordance with all 
     low-income affordability restrictions for the project in 
     connection with

[[Page 22841]]

     the Federal assistance for the project for a period having a 
     duration that is not less than the period referred to in 
     paragraph (5)(C);''; and
       (2) in paragraph (4)(B), by inserting ``and consistent with 
     paragraph (2)(C)'' before the period at the end.

     SEC. 406. TECHNICAL ASSISTANCE.

       Section 514(f)(3) of the Multifamily Assisted Housing 
     Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) 
     is amended by inserting after ``new owners)'' the following: 
     ``, for technical assistance for preservation of low-income 
     housing for which project-based rental assistance is provided 
     at below market rent levels and may not be renewed (including 
     transfer of developments to tenant groups, nonprofit 
     organizations, and public entities),''.

     SEC. 407. TERMINATION OF SECTION 8 CONTRACT AND DURATION OF 
                   RENEWAL CONTRACT.

       Section 8(c)(8) of the United States Housing Act of 1937 
     (42 U.S.C. 1437f(c)(8)) is amended--
       (1) in subparagraph (A)--
       (A) by striking ``terminating'' and inserting ``termination 
     of''; and
       (B) by striking the third comma of the first sentence and 
     all that follows through the end of the subparagraph and 
     inserting the following: ``. The notice shall also include a 
     statement that, if the Congress makes funds available, the 
     owner and the Secretary may agree to a renewal of the 
     contract, thus avoiding termination, and that in the event of 
     termination the Department of Housing and Urban Development 
     will provide tenant-based rental assistance to all eligible 
     residents, enabling them to choose the place they wish to 
     rent, which is likely to include the dwelling unit in which 
     they currently reside. Any contract covered by this paragraph 
     that is renewed may be renewed for a period of up to one year 
     or any number or years, with payments subject to the 
     availability of appropriations for any year.'';
       (2) by striking subparagraph (B);
       (3) in subparagraph (C)--
       (A) by striking the first sentence;
       (B) by striking ``in the immediately preceding sentence'';
       (C) by striking ``180-day'' each place it appears;
       (D) by striking ``such period'' and inserting ``one year''; 
     and
       (E) by striking ``180 days'' and inserting ``one year''; 
     and
       (4) by redesignating subparagraphs (C), (D), and (E), as 
     amended by the preceding provisions of this subsection, as 
     subparagraphs (B), (C), and (D), respectively.

     SEC. 408. ENHANCED VOUCHER ELIGIBILITY AND BENEFITS.

       (a) Eligibility of Residents of Flexible Subsidy 
     Projects.--Section 201 of the Housing and Community 
     Development Amendments of 1978 (12 U.S.C. 1715z-1a) is 
     amended by adding at the end the following new subsection:
       ``(p) Enhanced Voucher Eligibility.--Notwithstanding any 
     other provision of law, any project that receives or has 
     received assistance under this section and which is the 
     subject of a transaction under which the project is preserved 
     as affordable housing, as determined by the Secretary, shall 
     be considered eligible low-income housing under section 229 
     of the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990 (12 U.S.C. 4119) for purposes of 
     eligibility of residents of such project for enhanced voucher 
     assistance provided in accordance with the `Preserving 
     Existing Housing Investment' account in the Departments of 
     Veterans Affairs and Housing and Urban Development, and 
     Independent Agencies Appropriations Act, 1997 (Public Law 
     104-204; 110 Stat. 2884) and pursuant to such provision or 
     any other subsequently enacted provision of law.''.
       (b) Effect of Rental Increases on Other Enhanced 
     Vouchers.--To the extent that amounts are provided in advance 
     in appropriations Acts for enhanced vouchers (including 
     amendments and renewals) pursuant to the authority under the 
     heading ``Preserving Existing Housing Investment'' in the 
     Departments of Veterans Affairs and Housing and Urban 
     Development, and Independent Agencies Appropriations Act, 
     1997 (Public Law 104-204; 110 Stat. 2884), each family 
     receiving such enhanced voucher assistance after the date of 
     prepayment or voluntary termination which continues to reside 
     in the housing occupied on the date of prepayment or 
     voluntary termination and the rent of which, absent enhanced 
     voucher assistance, would exceed the greater of 30 percent of 
     adjusted income or the rent paid by the family on such date, 
     may continue to receive such enhanced voucher assistance 
     indefinitely, subject to other requirements of that 
     authority, as amended: Provided, That rent resulting from 
     rent increases occurring later than 1 year after the date of 
     prepayment or voluntary termination may be used to increase 
     the applicable payment standard: Provided further, That the 
     rent for the dwelling unit is reasonable in comparison to the 
     rent charged for comparable dwelling units in the private, 
     unassisted local market.

     SEC. 409. ENHANCED DISPOSITION AUTHORITY.

       Section 204 of the Departments of Veterans Affairs and 
     Housing and Urban Development, and Independent Agencies 
     Appropriations Act, 1997 (12 U.S.C. 1715z-11a) is amended--
       (1) by striking ``and 1999'' and inserting ``1999, and 
     2000''; and
       (2) by striking ``or demolition'' and inserting ``, 
     demolition, or construction on the properties (which shall be 
     eligible whether vacant or occupied)''.

     SEC. 410. ASSISTANCE FOR NONPROFIT PURCHASERS PRESERVING 
                   AFFORDABLE HOUSING.

       (a) Congressional Findings.--The Congress finds that--
       (1) 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;
       (2) it is in the interests of the Nation to encourage 
     transfer of control of such properties to competent national, 
     regional, and local nonprofit entities and intermediaries 
     whose missions involve maintaining the affordability of such 
     properties;
       (3) such transfers may be inhibited by a shortage of such 
     entities that are appropriately capitalized; and
       (4) the Nation would be well served by providing assistance 
     to such entities to aid in accomplishing this purpose.
       (b) Grants.--The Secretary of Housing and Urban Development 
     may make grants, to the extent amounts are made available for 
     such grants, to eligible entities under subsection (c) for 
     use only for operational, working capital, and organizational 
     expenses of such entities and activities by such entities 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 (including elderly persons).
       (c) Eligible Entities.--The Secretary shall establish 
     standards for eligible entities under this subsection, which 
     shall include requirements that to be considered an eligible 
     entity for purposes of this section an entity shall--
       (1) be a nonprofit organization (as such term is defined in 
     104 of the Cranston-Gonzalez National Affordable Housing 
     Act);
       (2) 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
       (3) demonstrate need for assistance under this section for 
     the purposes under subsection (b), experience in carrying out 
     activities referred to in such subsection, and capability to 
     carry out such activities.
       (d) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) 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).
       (2) 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.
       (e) 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 2000, 2001, and 
     2002.

TITLE V--MORTGAGE INSURANCE FOR HEALTH CARE FACILITIES AND HOME EQUITY 
                          CONVERSION MORTGAGES

     SEC. 501. REHABILITATION OF EXISTING HOSPITALS, NURSING 
                   HOMES, AND OTHER FACILITIES.

       Section 223(f) of the National Housing Act (12 U.S.C. 
     1715n(f)) is amended--
       (1) in paragraph (1), by inserting ``existing health care 
     facility,'' after ``existing board and care home,''; and
       (2) in paragraph (4)--
       (A) by inserting ``existing health care facility,'' after 
     ``board and care home,'' each place it appears;
       (B) in subparagraph (A), by inserting before the semicolon 
     at the end the following: ``, which refinancing, in the case 
     of a loan on a hospital, home, or facility that is within 5 
     years of maturity, shall include a mortgage made to prepay 
     such loan;'';
       (C) in subparagraph (B), by inserting after 
     ``indebtedness'' the following: ``, pay the costs of any 
     repairs, maintenance, improvements, or additional equipment 
     which may be approved by the Secretary,''; and
       (D) in subparagraph (D)--
       (i) by inserting ``existing'' before ``intermediate care 
     facility''; and
       (ii) by inserting ``existing'' before ``board and care 
     home''.

     SEC. 502. NEW HEALTH CARE FACILITIES.

       Section 232 of the National Housing Act (12 U.S.C. 1715w) 
     is amended--
       (1) in subsection (a), by adding at the end the following 
     new paragraph:
       ``(4) The development of health care facilities for the 
     care and treatment of the elderly and other persons in need 
     of health care and related services, but who are not acutely 
     ill and do not require hospital care, and the

[[Page 22842]]

     support of health care facilities which provide such health 
     care and related services (including those which support 
     hospitals, as defined in section 242(b)).'';
       (2) in subsection (b)--
       (A) in paragraph (4), by inserting after the first period 
     the following new sentence:

     ``Such term includes a parity first mortgage or parity first 
     deed of trust, subject to such terms and conditions as the 
     Secretary may provide.'';
       (B) in paragraph (6)--
       (i) by striking subparagraph (A) and inserting the 
     following new subparagraph:
       ``(A) meets all licensing and regulatory requirements of 
     the State, or if there is no State law providing for such 
     licensing and regulation by the State, meets all licensing 
     and regulatory requirements of the municipality or other 
     political subdivision in which the facility is located, or, 
     in the absence of any such requirements, meets any 
     requirements of the Secretary for such purposes;''; and
       (ii) in subparagraph (C), by striking ``and'' at the end;
       (C) in paragraph (7), by striking the period at the end and 
     inserting ``; and''; and
       (D) by adding at the end the following new paragraph:
       ``(8) the term `health care facility' means a facility--
       ``(A) providing integrated health care delivery services 
     designed and operated to provide medical, convalescent, 
     skilled and intermediate nursing, board and care services, 
     assisted living, rehabilitation, custodial, personal care 
     services, or any combination thereof;
       ``(B) designed, in whole or in part, to provide a continuum 
     of care, as determined by the Secretary;
       ``(C) providing clinical services, out patient services, 
     including community health services and medical practice 
     facilities and group practice facilities to persons not in 
     need of the services rendered in other facilities insurable 
     under this title; or
       ``(D)(i) designed, in whole or in part--
       ``(I) to provide health care services which are not acute 
     care in nature to persons (including the elderly and infirm); 
     or
       ``(II) to provide supportive or ancillary services to 
     hospitals (as defined in section 242(b)), which services may 
     include services provided by special use health care 
     facilities, professional office buildings, laboratories, 
     administrative offices, and other facilities supportive or 
     ancillary to health care delivery; and
       ``(ii) that meet standards acceptable to the Secretary, 
     which may include standards governing licensure or State or 
     local approval and regulation of a mortgagor; or
       ``(E) that provides any combination of the services under 
     subparagraphs (a) through (D).'';
       (3) in subsection (d)--
       (A) in the matter preceding paragraph (1)--
       (i) by inserting ``board and care home,'' after 
     ``rehabilitated nursing home,'';
       (ii) by inserting ``health care facility,'' after 
     ``assisted living facility,'' the first 2 places it appears;
       (iii) by inserting ``board and care home,'' after 
     ``existing nursing home,''; and
       (iv) by striking ``or a board and care home'' and inserting 
     ``, board and care home or health care facility'';
       (B) in paragraph (2), in the matter preceding subparagraph 
     (A), by inserting after ``including'' the following: ``or a 
     public body, public agency, or public corporation eligible 
     under this section'';
       (C) in paragraph (4)(A)--
       (i) in the first sentence--

       (I) by inserting ``, and health care facilities which 
     include such nursing home and intermediate care facilities,'' 
     before ``, the Secretary'';
       (II) by inserting ``or the portion of a health care 
     facility providing such services'' before ``covered by the 
     mortgage,''; and
       (III) by inserting ``or for such nursing or intermediate 
     care services within a health care facility'' before ``, and 
     (ii)'';

       (ii) in the second sentence, by inserting ``(which may be 
     within a health care facility)'' after ``home and facility''; 
     and
       (iii) in the third sentence--

       (I) by striking ``mortgage under this section'' and all 
     that follows through ``feasibility'' and inserting the 
     following: ``such mortgage under this section unless (i) the 
     proposed mortgagor or applicant for the mortgage insurance 
     for the home or facility or combined home or facility, or the 
     health care facility containing such services, has 
     commissioned and paid for the preparation of an independent 
     study of market need for the project'';
       (II) in clause (i)(II), by striking ``and its relationship 
     to, other health care facilities and'' and inserting ``or 
     such facilities within a health care facility, and its 
     relationship to, other facilities providing health care'';
       (III) in clause (i)(IV), by striking ``in the event the 
     State does not prepare the study,''; and
       (IV) in clause (i)(IV), by striking ``the State or'';

       (iv) by striking the penultimate sentence and inserting the 
     following new sentences: ``A study commissioned or undertaken 
     by the State in which the facility will be located shall be 
     considered to satisfy such market study requirement. The 
     proposed mortgagor or applicant may reimburse the State for 
     the cost of an independent study referred to in the preceding 
     sentence.''; and
       (v) in the last sentence--

       (I) by inserting ``the proposed mortgagor or applicant for 
     mortgage insurance may obtain from'' after ``10 
     individuals,'';
       (II) by striking ``may'' and inserting ``and''; and
       (III) by inserting a comma before ``written support''; and

       (D) in paragraph (4)(C)(iii), by striking ``the appropriate 
     State'' and inserting ``any appropriate''; and
       (4) in subsection (i)(1) by inserting ``health care 
     facilities,'' after ``assisted living facilities,''.

     SEC. 503. HOSPITALS AND HOSPITAL-BASED HEALTH CARE 
                   FACILITIES.

       Section 242 of the National Housing Act (12 U.S.C. 1715z-7) 
     is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by inserting ``and'' after the 
     semicolon at the end;
       (ii) by striking subparagraph (B);
       (iii) in subparagraph (C), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by redesignating subparagraph (C) as subparagraph (B);
       (B) in paragraph (2), by striking ``respectfully'' and all 
     that follows and inserting ``given such terms in section 
     207(a), except that the term `mortgage' shall include a 
     parity first mortgage or parity first deed of trust, subject 
     to such terms and conditions as the Secretary may provide.'; 
     and
       (C) by adding at the end the following new paragraph:
       ``(3) the term `health care facility' has the meaning given 
     such term in section 232(b).'';
       (2) in subsection (d)--
       (A) in the matter preceding paragraph (1), by inserting 
     after ``operation,'' the following: ``or which covers a 
     health care facility owned or to be owned by an applicant or 
     proposed mortgagor which also owns a hospital, including 
     equipment to be used in its operation,'';
       (B) in paragraph (1)--
       (i) in the first sentence, by inserting before the period 
     at the end the following: ``and who, in the case of a 
     mortgage covering a health care facility, is also the owner 
     of a hospital facility''; and
       (ii) by adding at the end the following new sentence: ``A 
     mortgage covering a health care facility may only cover the 
     property on which the eligible facility will be located.'';
       (C) in paragraph (2)(A) by inserting ``or health care 
     facility'' before the comma; and
       (D) in paragraph (4)--
       (i) in the first sentence, by inserting ``for a hospital'' 
     after ``any mortgage'';
       (ii) by striking the third sentence and inserting the 
     following: ``If no such State agency exists, or if the State 
     agency exists but is not empowered to provide a certification 
     that there is a need for the hospital as set forth in clause 
     (A) of the first sentence, the Secretary shall not insure any 
     such mortgage under this section unless (A) the proposed 
     mortgagor or applicant for the hospital has commissioned and 
     paid for the preparation of an independent study of market 
     need for the proposed project that (i) is prepared in 
     accordance with the principles established by the Secretary, 
     in consultation with the Secretary of Health and Human 
     Services (to the extent the Secretary of Housing and Urban 
     Development considers appropriate); (ii) assesses, on a 
     marketwide basis, the impact of the proposed hospital on, and 
     its relationship to, other facilities providing health care 
     services, the percentage of excess beds, demographic 
     projections, alternative health care delivery systems, and 
     the reimbursement structure of the hospital; (iii) is 
     addressed to and is acceptable to the Secretary in form and 
     substance; and (iv) is prepared by a financial consultant 
     selected by the proposed mortgagor or applicant and approved 
     by the Secretary; and (B) the State complies with the other 
     provisions of this paragraph that would otherwise be required 
     to be met by a State agency designated in accordance with 
     section 604(a)(1) or section 1521 of the Public Health 
     Service Act. A study commissioned or undertaken by the State 
     in which the hospital will be located shall be considered to 
     satisfy such market study requirement.''; and
       (iii) in the last sentence, by striking ``feasibility''; 
     and
       (3) in subsection (f), by inserting ``and public health 
     care facilities'' after ``public hospitals''.

     SEC. 504. HOME EQUITY CONVERSION MORTGAGES.

       (a) Insurance for Mortgages to Refinance Existing HECMs.--
       (1) In general.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (A) by redesignating subsection (k) as subsection (l); and
       (B) by inserting after subsection (j) the following new 
     subsection:
       ``(k) Insurance Authority for Refinancings.--
       ``(1) In general.--The Secretary may, upon application by a 
     mortgagee, insure under this subsection any mortgage given to 
     refinance an existing home equity conversion mortgage insured 
     under this section.

[[Page 22843]]

       ``(2) Anti-churning disclosure.--The Secretary shall, by 
     regulation, require that the mortgagee of a mortgage insured 
     under this subsection, provide to the mortgagor, within an 
     appropriate time period and in a manner established in such 
     regulations, a good faith estimate of (A) the total cost of 
     the refinancing, and (B) the increase in the mortgagor's 
     principal limit as measured by the estimated initial 
     principal limit on the mortgage to be insured under this 
     subsection less the current principal limit on the home 
     equity conversion mortgage that is being refinanced and 
     insured under this subsection.
       ``(3) Waiver of counseling requirement.--The mortgagor 
     under a mortgage insured under this subsection may waive the 
     applicability, with respect to such mortgage, of the 
     requirements under subsection (d)(2)(B) (relating to third 
     party counseling), but only if--
       ``(A) the mortgagor has received the disclosure required 
     under paragraph (2);
       ``(B) the increase in the principal limit described in 
     paragraph (2) exceeds the amount of the total cost of 
     refinancing (as described in such paragraph) by an amount to 
     be determined by the Secretary; and
       ``(C) the time between the closing of the original home 
     equity conversion mortgage that is refinanced through the 
     mortgage insured under this subsection and the application 
     for a refinancing mortgage insured under this subsection does 
     not exceed 5 years.
       ``(4) Credit for premiums paid.--Notwithstanding section 
     203(c)(2)(A), the Secretary may reduce the amount of the 
     single premium payment otherwise collected under such section 
     at the time of the insurance of a mortgage refinanced and 
     insured under this subsection. The amount of the single 
     premium for mortgages refinanced under this subsection shall 
     be determined by the Secretary based on the actuarial study 
     required under paragraph (5).
       ``(5) Actuarial study.--Not later than 180 days after the 
     date of the enactment of this subsection, the Secretary shall 
     conduct an actuarial analysis to determine the adequacy of 
     the insurance premiums collected under the program under this 
     subsection with respect to--
       ``(A) a reduction in the single premium payment collected 
     at the time of the insurance of a mortgage refinanced and 
     insured under this subsection;
       ``(B) the establishment of a single national limit on the 
     benefits of insurance under subsection (g) (relating to 
     limitation on insurance authority); and
       ``(C) the combined effect of reduced insurance premiums and 
     a single national limitation on insurance authority.
       ``(6) Fees.--The Secretary may establish a limit on the 
     origination fee that may be charged to a mortgagor under a 
     mortgage insured under this subsection, except that such 
     limitation shall provide that the origination fee may be 
     fully financed with the mortgage and shall include any fees 
     paid to correspondent mortgagees approved by the Secretary. 
     The Secretary shall prohibit the charging of any broker fees 
     in connection with mortgages insured under this 
     subsection.''.
       (2) Regulations.--Notwithstanding sections 2 and 3 of the 
     Preserving Affordable Housing for Senior Citizens and 
     Families into the 21st Century Act, the Secretary shall issue 
     any final regulations necessary to implement the amendments 
     made by paragraph (1) of this subsection, which shall take 
     effect not later than the expiration of the 180-day period 
     beginning on the date of the enactment of this Act. The 
     regulations shall be issued after notice and opportunity for 
     public comment in accordance with the procedure under section 
     553 of title 5, United States Code, applicable to substantive 
     rules (notwithstanding subsections (a)(2), (b)(B), and (d)(3) 
     of such section).
       (b) Study of Single National Mortgage Limit.--The Secretary 
     of Housing and Urban Development shall conduct an actuarially 
     based study of the effects of establishing, for mortgages 
     insured under section 255 of the National Housing Act (12 
     U.S.C. 1715z-20), a single maximum mortgage amount limitation 
     in lieu of applicability of section 203(b)(2) of such Act (12 
     U.S.C. 1709(b)(2)). The study shall--
       (1) examine the effects of establishing such limitation at 
     different dollar amounts; and
       (2) examine the effects of such various limitations on--
       (A) the risks to the General Insurance Fund established 
     under section 519 of such Act; and
       (B) the mortgage insurance premiums that would be required 
     to be charged to mortgagors to ensure actuarial soundness of 
     such Fund; and
       (C) take into consideration the various approaches to 
     providing credit to borrowers who refinance home equity 
     conversion mortgages insured under section 255 of such Act.

     Not later than 180 days after the date of the enactment of 
     this Act, the Secretary shall complete the study under this 
     subsection and submit a report describing the study and the 
     results of the study to the Committee on Banking and 
     Financial Services of the House of Representatives and to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Nebraska (Mr. Bereuter) and the gentleman from Massachusetts (Mr. 
Frank) each will control 20 minutes.
  The Chair recognizes the gentleman from Nebraska (Mr. Bereuter).
  Mr. BEREUTER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the bill before the House today is the result of a truly 
bipartisan effort to address the range of critical housing needs of our 
seniors, individuals with disabilities, and low-income families. The 
proposal not only contains many original provisions from H.R. 202, a 
bill introduced this year by the chairman of the Committee on Banking 
and Financial Services, the gentleman from Iowa (Mr. Leach), and the 
subcommittee chairman, the gentleman from New York (Mr. Lazio), but 
also brings the facets of H.R. 1336, the Emergency Residents Protection 
Act, introduced by the gentleman from Iowa (Mr. Leach), the chairman of 
the Subcommittee on VA, HUD and Independent Agencies of the Committee 
on Appropriations, the gentleman from New York (Mr. Walsh), and the 
gentleman from New York (Mr. Lazio) on March 25.
  Also contained within the bill are ideas from H.R. 1624, the Elderly 
Housing Quality Improvement Act, and provisions of H.R. 425, the 
Housing Preservation Matching Grant Act, introduced by the gentleman 
from Minnesota (Mr. Vento), and also the gentleman from Minnesota (Mr. 
Ramstad).
  The bills have been the subject of three committee hearings during 
the 106th Congress. Majority and minority committee staff have worked 
along with HUD staff for the last several months to develop a 
bipartisan consensus product supported by the committee's Republican 
and Democratic leadership. The Committee on Banking and Financial 
Services reported out the bill last Friday by a unanimous vote. As 
Members can see, Mr. Speaker, this bill encompasses a broad spectrum of 
ideas, and they are all the right ideas to help America's seniors and 
other vulnerable citizens find affordable housing.
  Let me take a moment to explain why I feel this is such an important 
legislative matter. On the horizon, a gray dawn is approaching where 
more and more Americans will live longer and enjoy more active healthy 
lives. More than 33 million people in the United States are now 65 
years of age or older, and by the year 2020 that number will grow to 
almost 53 million Americans. That is one in every six Americans. This 
new-found longevity should be celebrated, but we must also not take our 
future quality of life for granted.
  In this environment of an aging population, we must not overlook the 
fact that millions of senior citizens will suffer a crisis of safe, 
affordable housing if we fail to prepare for it. Even today, the U.S. 
General Accounting Office and the U.S. Department of Housing and Urban 
Development have determined that at least 1.4 million senior citizens 
are already experiencing worst-case housing needs. Seniors are more 
likely than any other adults to be poor, and nearly 40 percent of 
seniors not in nursing homes are limited by chronic conditions, unable 
to perform the simplest activities associated with independent living.
  These senior citizens who helped create the foundations for the 
greatness of our country today deserve to know that they will be taken 
care of. This bill should provide that peace of mind.
  The provisions in this bill are designed to protect our seniors, the 
disabled, and our vulnerable families from displacement of drastic rent 
increases, and offers greater program flexibility to broaden the scope 
of these important programs. Specifically, the bill accomplishes that 
through a number of provisions.
  First, it provides HUD with the authority to convert the subsidy 
financing of section 202 senior housing projects built from section 8 
prior to 1990 to the 5-year project rental assistance contracts, PRAC, 
that have been offered to projects since 1990. This allows nonprofit 
senior housing providers and HUD to streamline the administration of 
the program. Operated outside

[[Page 22844]]

of the section 8 regulatory regime, providers are provided relief from 
often complex and burdensome rules. More importantly, the extraordinary 
level of stress and anxiety senior citizens often feel under section 8 
programs are removed.
  Secondly, it reauthorizes the section 202 program, which is the 
primary method of Federal finance for low-income senior citizens. We 
authorize supportive housing for elderly persons and for persons with 
disabilities and provide grants for service coordinators for elderly 
and disabled projects.
  Third, it expands housing opportunities for seniors and individuals 
with disabilities, and it contains many common sense provisions to 
increase program flexibility.
  Fourth, this bill protects seniors, the disabled, and vulnerable 
families from being displaced from their housing because of section 8 
opt-outs. The Subcommittee on Housing and Community Opportunity of the 
Committee on Banking and Financial Services held hearings earlier this 
year on the problem of expiring section 8 contracts and found that a 
significant number of owners that were indicating they planned to opt 
out of section 8 programs. Five hundred units are at risk over the next 
5 years of being lost as affordable housing if we do not act.
  Finally, it would make amendments to the existing Home Equity 
Conversion Mortgage program, allowing seniors to maximize the equity in 
their homes by streamlining the process of refinancing reverse 
mortgages.
  Mr. Speaker, I thank the chairman of the subcommittee and the 
chairman of the full committee for their leadership on this issue and 
thank many members of the committee, the leadership on the minority 
side, as well as HUD for working with us in such a bipartisan manner to 
solve these problems.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield such time as he may 
consume to the gentleman from New York (Mr. LaFalce), the ranking 
member of the full committee, whose leadership was essential to this 
bill coming forward.
  Mr. LaFALCE. Mr. Speaker, first I rise in strong support of H.R. 202 
and urge its adoption.
  According to HUD, there are over 1 million elderly families in this 
country with worst-case housing needs. As our population ages, the 
housing and related health care needs of senior citizens is certain to 
grow, yet not only has the role of the Federal Government in affordable 
housing new construction been cut back, but the so-called opt-out 
crisis threatens us with the loss of hundreds of thousands of section 8 
housing units.
  H.R. 202 is a well-crafted bill to address the dual challenges of 
preserving affordable housing and improving our existing elderly and 
disabled housing programs. It has been developed in a thoroughly 
bipartisan manner, taking the best provisions offered from both sides 
of the aisle.
  I would like to start by commending the chairman of the Subcommittee 
on Housing and Community Opportunity, the gentleman from New York (Mr. 
Lazio), for his leadership on this bill. He has made affordable housing 
preservation a priority of our housing subcommittee, culminating in the 
inclusion of strong housing preservation and tenant protections in this 
bill. I also appreciate his acceptance of many provisions for my 
elderly housing legislation, H.R. 1624, the Elderly Housing Quality 
Improvement Act.
  I would also like to acknowledge the extremely hard work on this bill 
by the gentleman from Massachusetts (Mr. Frank), the Housing 
Subcommittee ranking member. The gentleman from Massachusetts has been 
a leader in preserving our section 8 project base housing stock through 
the prevention of section 8 opt-outs. He has played an instrumental 
role in both the HUD mark-to-market initiative and in the legislation 
before us.
  I would also like to note this bill includes H.R. 425, a very 
important bill authorized by the gentleman from Minnesota (Mr. Vento) 
that would create a matching grant housing preservation program. The 
Vento bill complements HUD's mark-to-market initiative by encouraging 
States and localities to participate in housing preservation in a 
partnership with the Federal Government under a matching grant program.
  Today, the House is considering H.R. 202, the ``Preserving Affordable 
Housing for Senior Citizens and Families into the 21st Century Act.'' 
H.R. 202 includes a number of provisions from H.R. 1624, the ``Elderly 
Housing Quality Improvement Act,'' which I introduced earlier this 
year, along with Reps. Vento, Kanjorski, and a number of other members. 
Following is a detailed explanation of the provisions from H.R. 1624 
which are being included in H.R. 202.
  Experts agree that we should provide housing options that help 
seniors age in place, that preserve their independence and self-
sufficiency, and that provide alternatives to nursing home care. H.R. 
1624 furthers these goals, by making changes to our elderly affordable 
housing programs to enhance the quality of life and to improve the 
continuum of care for lower income senior citizens.
  A major focus of H.R. 1624 is the physical repair and maintenance of 
our federally assisted elderly housing stock. As units built in the 
1970's and 1980's have aged, project sponsors, many of them non-
profits, too often lack the resources for adequate repair and 
maintenance. There are four provisions in H.R. 1624 that give elderly 
affordable housing sponsors more resources in this area.
  Section 309 of H.R. 202 [Section 2 of H.R. 1624] creates a new 
capital grant program for capital repair of federally assisted elderly 
housing units. Funds are to be awarded on a competitive basis, based on 
the need for repairs, the financial need of the applicant, and the 
negative impact on tenants of any failure to make such repairs.
  Sections 405(a) and (b) of H.R. 202 [Sections 3(b) and 3(c) of H.R. 
1624] amend an existing grant program, created by the 1997 mark-to-
market legislation, which authorizes HUD to make multi-year grants to 
federally insured affordable housing projects from funds recaptured 
when existing Section 236 projects prepay their loans and surrender 
their Interest Reduction Payment (IRP) subsidies. Section 405(a) of 
H.R. 202 accelerates the availability of these multi-year grants to an 
up-front capital grant, so that sponsors may use the funds for much-
needed capital repairs. Newly added Section 405(c) requires that any 
project which receives an accelerated capital grant under this program 
must agree to maintain the project's affordability for at least the 
term of the IRP payments which secure the grant.
  Section 405(b) expands eligibility for such grants to include non-
insured, federally assisted affordable housing projects--eg., to 
include non-profit-sponsored and Section 202 projects. The 
Congressional Budget Office has determined there is no cost to either 
of these provisions.
  Section 403(b) of H.R. 202 [Section 3(d) of H.R. 1624] helps 
undercapitalized non-federally-insured Section 236 projects, many of 
which are non-profit--by letting them keep their ``excess income,'' as 
insured projects are currently allowed to do. Excess income is rent 
that uninsured projects can collect, but must give back to the federal 
government.
  And, Section 102 of H.R. 202 [Section 3(a) of H.R. 1624] facilitates 
the refinancing of high interest rate Section 202 elderly housing 
projects. Specifically, this section guarantees that, in addition to 
keeping all of the funds generated up-front by a refinancing, a Section 
202 sponsor may keep 50% of annual debt service savings, plus all of 
excess reserve funds, as long as such savings are used for the benefit 
of the tenants or for the benefit of the project.
  A second major focus of the bill is to make assisted living 
facilities more available and affordable to low income elderly. 
Assisted living facilities provide meals, health care, and other 
services to frail senior citizens who need assistance with activities 
of daily living. Unfortunately, poorer seniors who can't afford 
assisted living facilities are generally forced to move into nursing 
homes, with a lower quality of life, at a higher cost to the federal 
government
  To address this affordability problem, Section 309 of H.R. 202 also 
authorizes funds under the newly created capital grant program to be 
used for the conversion of existing federally assisted elderly housing 
to assisted living facilities. Section 310 of H.R. 202 authorizes a 
similar grant program for the conversion of public housing projects to 
assisted living facilities.
  Section 311 of H.R. 202 [Section 5 of H.R. 1624] authorizes the use 
of Section 8 vouchers to pay the rental component of any assisted 
living facility. This would make 200,000 senior citizens currently 
receiving vouchers eligible to use such vouchers in assisted living

[[Page 22845]]

facilities. This flexibility, designed to enhance the continuum of 
care, is accomplished at no cost to the federal government.
  A third major focus of H.R. 1624 is the promotion of the use of 
service coordinators, which help elderly and disabled tenants gain 
access to local community services, thereby facilitating their 
independence. Section 203 of H.R. 202 [Sections 4(a) and (b) of H.R. 
1624] doubles funding for grants for service coordinators in federally 
assisted housing--by authorizing $50 million in fiscal year 2000 for 
new and renewal grants. Section 203 also authorizes $11 million in 
funds for new public housing service coordinator grants, and mandates 
renewal of all expiring grants, alleviating concerns raised earlier 
this year by the public housing service coordinator lottery.
  And, Section 341 of H.R. 202 [Section 4(c) of H.R. 1624] changes 
existing law to let service coordinators serve other low-income seniors 
in a local community, in addition to those at the site of the grant 
sponsor. This allows for economies of scale, permitting smaller elderly 
and disabled housing projects to better compete for funds, and 
generally improves flexibility of the program.
  Finally, I would note that H.R. 202 also increases funding for the 
Section 202 elderly housing new construction program, and promotes the 
use of pilot programs to create additional mixed income, mixed 
financing housing. Both increased funding and increased flexibility 
were provisions included in Section 7 of H.R. 1624.
  Cumulative, the provisions cited above improve the quality and 
availability of affordable elderly and disabled housing, promote aging 
in place, and complement the other provisions of H.R. 202. I urge their 
enactment into law.
  Mr. Speaker, this is a very good bill that will do a great deal of 
good for many elderly, disabled, and families throughout our Nation. I 
commend all those who have worked together collegially on it and urge 
its adoption.
  Mr. LAZIO. Mr. Speaker, I yield myself 30 seconds to compliment both 
the gentleman from New York (Mr. LaFalce) and the gentleman from 
Massachusetts (Mr. Frank) for their extraordinary collaboration on this 
bill and their cooperation in moving this through. It is very 
important, and we are trying to get ahead of the appropriations 
process. This was almost an ideal model, Mr. Speaker, of putting a bill 
together and taking the best ideas of both sides.
  I also want to tip my hat to the chairman of the Committee on Banking 
and Financial Services, the gentleman from Iowa (Mr. Leach), for both 
his leadership and his interest in issues affecting both disabled and 
seniors' housing.
  Mr. Speaker, I yield 2 minutes to the gentleman from Nebraska (Mr. 
Bereuter), a great champion of housing, and I also want to thank the 
gentleman for standing in for me and delivering some remarks.
  Mr. BEREUTER. Mr. Speaker, I thank my distinguished subcommittee 
chairman, the gentleman from New York (Mr. Lazio), for yielding me this 
time.
  I want to particularly commend the distinguished gentlewoman from 
Illinois (Ms. Schakowsky) for successfully offering a specific 
amendment that expands an existing study in H.R. 202 regarding the 
number of section 811 projects for disabled housing to also include the 
per-unit cost of section 202 projects for senior citizens. This 
amendment was passed en bloc with the manager's amendment in the 
Subcommittee on Housing and Community Opportunity and then in the full 
committee.
  Due to the efforts of the gentlewoman from Illinois, this Member and 
others, by unanimous consent a second-tree amendment to the manager's 
amendment was accepted by the Committee on Banking and Financial 
Services.

                              {time}  1700

  The second-degree amendment provides for the insertion of an 
additional consideration to the above-mentioned study of section 202 
and section 811 housing. This provision requires that the section 202 
study examine social considerations afforded by smaller and moderate-
sized developments and not be limited to the examination of solely 
economic factors. The intent behind this provision is a recognition of 
the probability that if only per-unit cost factors were examined in 
this H.R. 202 study, then the economies of scale would dictate a 
construction bias toward large, high-rise section 202 or section 811 
complexes as compared to small and moderate-sized developments in both 
urban and nonmetropolitan areas.
  However, this Member believes that bigger is not always better in 
such housing developments. In many cases, it can be shown that housing 
developments which are not very big in size may better meet the living 
environment desires and the social concerns of its residents and also 
provides for a more advantageous integration of the development and the 
residents into the immediate neighborhood.
  Moreover, the second-degree amendment also increases the availability 
of developable sites for section 202 and section 811 projects. Finally, 
among other important considerations, smaller and moderate-sized 
section 202 and section 811 projects which are certainly needed in 
smaller and medium-sized communities are more likely to be approved if 
the cost per unit criterion is not the overwhelming consideration.
  In closing, I want to thank my colleague from Illinois and all of 
those on both sides of the aisle that supported her and this Member and 
encourage my colleagues to support this legislation generally. It is 
excellent legislation.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 10 seconds. 
When I was a kid growing up watching baseball games, I remember Mel 
Allen, the Yankee announcer, saying it was often the case that someone 
made a great play out in the field and then that person would be the 
first one up at bat in the next inning. The gentleman from Nebraska has 
just pointed out the great work done by the gentlewoman from Illinois, 
so it is only appropriate that she be first up now in speaking.
  Mr. Speaker, I yield 3 minutes to the gentlewoman from Illinois (Ms. 
Schakowsky).
  Ms. SCHAKOWSKY. Mr. Speaker, I rise in strong support of H.R. 202. I 
want to thank the gentleman from Nebraska for his support of this 
particular provision. I know that his support has helped to improve 
this bill. I want to thank the chairman and ranking member of the 
Committee on Banking and Financial Services for bringing this matter to 
the attention of the committee and to the full House of Representatives 
and the chairman and ranking member of the Subcommittee on Housing and 
Community Opportunity as well as my colleague from Minnesota who made 
such significant contributions to the improvement of this bill. I am 
happy to add what I could and to cosponsor it.
  The bill would authorize more money for housing for seniors and 
persons with disabilities and make that money available to buy more 
amenities for that housing. In so doing, this bill recognizes that 
there is a crisis in housing for seniors and persons with disabilities 
and seeks to meet their particular housing needs. I am especially 
enthusiastic about this legislation because it includes provisions that 
will encourage more funding for smaller and more livable housing 
developments and thereby allow nonprofits in my district and across the 
country to better meet the housing needs of seniors.
  Traditionally, publicly assisted housing was large scale. And while 
we may have achieved economies of scale, we also did not consider 
necessarily what is best for seniors and persons with disabilities. We 
do not build large developments in the same way that we did anymore. 
Instead, we are building smaller and more livable developments.
  Unfortunately, the grant formula does not account for smaller 
developments and the lost savings. In my district there is housing 
development after housing development whose grant award is insufficient 
to build developments that are already approved. For example, I spent 
part of Sunday at Ebenezer AME church announcing the award of over $2 
million in supplemental HUD grants so that we could finally build a 
project that HUD had originally approved 3 years ago. In fact, this 
year I had to request supplemental grants for nearly 10 underfunded 
projects back home. Clearly,

[[Page 22846]]

the grant formula needs to be adjusted. I hope that the provision that 
I was able to add that was included in this bill will get us the 
necessary information to make the appropriate adjustment.
  For this reason, I urge my colleagues to support H.R. 202 and again 
thank the ranking member of the Subcommittee on Housing and Community 
Opportunity for granting me the time to speak to this.
  Mr. LAZIO. Mr. Speaker, I yield 1\1/2\ minutes to the distinguished 
gentlewoman from Illinois (Mrs.  Biggert).
  Mrs. BIGGERT. Mr. Speaker, I thank the gentleman from New York for 
yielding me this time. I too would like to commend my friend and 
colleague the gentlewoman from Illinois (Ms. Schakowsky) for her work 
on this bill.
  I rise today in strong support of H.R. 202. This bill takes a very 
successful program, section 202, and makes it more cost effective, 
easier to administer and more supportive of a good quality of life for 
older Americans as they age in our senior facilities.
  When I meet with seniors back home in Illinois, many say that the 
issue that concerns them most is housing and the fear that at any time 
it can be taken away, that they will be forced to leave their familiar 
surroundings. This bill attempts to lessen that fear by discouraging 
for-profit owners from opting out of the section 8 program, by 
protecting elderly and other residents, and by providing the resources 
States need to preserve the existing supply of affordable housing.
  The desire to remain in familiar surroundings does not diminish with 
age. H.R. 202 will help ensure that comfort and peace of mind. I urge 
my colleagues to join me in support of H.R. 202.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 4 minutes to the 
gentleman from Minnesota (Mr. Vento) who has for a long time been a 
leader in the most creative use of our housing resources.
  Mr. VENTO. Mr. Speaker, I thank the gentleman from Massachusetts (Mr. 
Frank) for yielding me this time and commend him for his good work and 
that of his staff as well as the gentleman from New York (Mr. Lazio) 
for the work he has done on this bill and his staff and others that 
have worked so hard on the committee. I know that there are many to be 
recognized and everyone wants to be associated with a good product. 
That is an indication of a bill that should pass in this House with 
little opposition.
  Frankly, Mr. Speaker, I think today in housing we have a very severe 
problem, one in which we have to move forward to meet. Our public 
housing is in fact in decline in terms of numbers. I think the quality 
is good. Just this weekend a survey came out in the Minnesota press 
which indicated that 86 percent of the respondents that lived in public 
housing were very, very satisfied with the type and quality of housing 
that they are receiving. Another area of housing, of course, is the 
private sector, the privately owned section 8 housing that we are 
addressing in this particular bill as well as some of the housing for 
the elderly and disabled. Our problems with especially the privately 
owned section 8 is that 3 to 4,000 units a month are being lost because 
privately owned buildings are coming up to the point where they can pay 
off the loan and get out of the contract in terms of serving low-income 
persons, and we had to address that.
  We do it in a couple of ways in this bill. One is to provide for 
greater fair market rents, a project, an initiative that had been 
started some years ago and is enhanced in this bill. And we come up 
with a grant program that I helped put together with my State housing 
finance agency and the leadership of the Minnesota governors that had 
supported it. It would create a partnership so that States and local 
governments can get involved through a grant process that we have in 
this bill to try and preserve those 3 or 4,000 units of housing per 
month that are being lost.
  Our State is especially hard hit by this because we were very 
aggressive in taking advantage of the assisted housing or privately 
owned section 8 housing. We have been able to enlist about 63 sponsors 
on this. I think the bill is obviously slated for passage today. Trying 
to get ahead of the appropriations or the spending bills process has 
been difficult for us this year, but fortunately we have time. I hope 
that we can add now to the policy that we have in paper here the 
dollars that are necessary to carry it out.
  This is a good bill in the sense that it tries to do some innovative 
things for the elderly, some assisted housing programs. Increasingly as 
we are dealing with frail elderly, our populations are aging in the 
public and assisted housing programs, very often served by nonprofits, 
sometimes served by local and State governments, but these individuals 
need increasing numbers of services. I think it is important to remind 
ourselves that the longer people stay in their own residence, 
apartments such as this, the cheaper it is for the taxpayer and for all 
of us, and I think more importantly providing them the dignity and 
quality of life that is necessary.
  Mr. Speaker, we have worked hard in the past to try and respond to 
that, but we have enormous problems ahead of us as the demographics of 
our population shift to more elderly, and, of course, I think that we 
need to continue to respond to the needs of the disabled with the 
special housing needs, integrating them into our communities, making 
them part rather than setting them apart from the communities in which 
they work and in which we live. I think it is a hallmark of our society 
and that we aspire to fulfill an American promise of shelter, of home 
ownership very often, or of adequate residence so that persons can be 
part of our society and can have good housing.
  The issue of course, Mr. Speaker, I think that looms over us as a 
dark shadow is the increasing problems that persist with homelessness 
and other problems. These types of bills and these actions are positive 
efforts to avert that particular phenomenon. But we have got a long way 
to go before we rest, Mr. Speaker. I would hope that this is the first 
step and the downward decline in terms of Federal housing, that we will 
be able to change our priorities and put the dollars that are necessary 
into good housing programs we have, whether they be the public 
assisted, the 202, the disabled or the other programs that are included 
in this positive policy measure before us.
  Mr. Speaker, I rise in support of H.R. 202, legislation that will 
give us several tools to preserve affordable housing for Americans 
across the country and that will work to improve the services and 
living arrangement for seniors and physically-challenged Americans as 
well.
  One of those tools is the creation of a new housing preservation 
matching grant taken from a bill I sponsored, H.R. 425, which has 63 
House cosponsors including all of the Minnesota delegation. I am 
especially pleased at its inclusion as our state, led by the Governor 
and Commissioner of Housing Finance Hadley, has taken a leadership role 
in working to preserve federally-assisted housing. Enactment of this 
legislation would help the federal government partner with Minnesota 
and other states and localities that step up to the plate with 
resources to save this precious resource.
  Just last week, the Department of Housing and Urban Development 
released a new study showing that the number of houses and apartments 
that low-income families can afford is shrinking. Based on data from 
the Census Bureau's latest Housing Survey, the report, entitled The 
Widening Gap: New Findings on Housing Affordability in America, found 
that affordable rental units decreased by 372,000 units from 1991 
through to 1997. No doubt, the pace has only accelerated these past two 
years.
  This report and the ever growing body of data and surveys, such as 
the recent ``Out of Reach'' report released by the National Low Income 
Housing Coalition that showed that the national average hourly wage 
needed to be able to afford housing is well over eleven dollars, 
indicate that we are no longer on the cusp of a crisis, but are 
actually in a severe affordable housing crisis that we must arrest. 
That is why the passage of this policy bill today will be a great step 
towards addressing the tremendous need for affordable housing.
  In Minnesota, the situation is critical. In the St. Paul-Minneapolis 
Metro area, our vacancy rate is hovering at one percent. The market is 
hot. There are few options besides long waiting lists and closed doors 
for people who lose

[[Page 22847]]

their housing. Those fortunate enough to have a new voucher in all 
likelihood won't be able to use it. The MN Metropolitan Council HRA 
tells us that eight out of nine households with section 8 certificates, 
and three out of four with vouchers are unable to find housing and are 
forced to return the assistance!
  In the Twin Cities and across the nation, the combination of low 
entry level wage rates, rents outpacing incomes and a retreat in 
federal support for affordable housing has left us in a dire situation 
in terms of meeting affordable low-cost housing needs. If owners choose 
to opt-out or prepay their mortgages, the result is that many income 
limited residents who cannot afford the increase will lose their homes 
as well as the support network provided by their communities. So-called 
``sticky'', or enhanced vouchers are only a temporary band-aid. Sticky 
vouchers detach if you leave the building or rents rise too much. This 
adhesive becomes unglued with too much weight and dry with time.
  I want to express my appreciation to Chairman Leach and Subcommittee 
Chairman Lazio and his staff, and to Ranking Members LaFalce and Frank 
and their staff for all the cooperative work involved in this bill. I 
also am thankful for the support of the many bipartisan cosponsors of 
this bill and for the tenants and organizations across the country that 
have worked in support of H.R. 425.
  I am hopeful that the revised provisions of H.R. 425, embodied in 
Section 404 of the bill will be enacted into law as there is support in 
the other body as evidenced by the introduction of companion 
legislation, S. 1318. Section 404 in which H.R. 425 is incorporated 
will provide a 1:1 match for non-federally sourced dollars and a 50 
cents match for every federally sourced dollar focussed on preserving 
federally-assisted housing, including Section 236, Section 515, and 
Section 8. It is a simple program that will target the dollars to low-
vacancy areas and to tenants who would otherwise find it very difficult 
to locate alternative affordable housing. It is another important tool 
in the toolbox for HUD, the state and local governments, and the non-
profits and for-profit owners who own and manage this low-income 
housing.
  Mr. Speaker, I am also pleased that we were able to include language 
that will ensure that previously issued enhanced vouchers, just like 
those we are creating in this legislation, are able to sustain 
subsequent, reasonable rent increases.This has been a very critical 
issue for families in Minnesota. HUD has already lost a court case 
contesting the rent increases. We need to move forward on this and I 
hope that we can see such sound housing policy implemented and fully 
funded by our appropriators as soon as possible.
  Mr. Speaker, we must commit ourselves to move forward once the House 
has passed this important measure, to be certain that the provisions 
are supported in the appropriations conference on the VA, HUD and 
Independent Agencies appropriations bill. Providing adequate funds for 
these ideas and programs is essential if the dream is to be a reality. 
Without funding for preserving affordable housing, the promise of H.R. 
202 will not be met. The issue and crisis are immediate; so, too, must 
be the policy and funding. Each month we lose 3,000-4,000 units through 
``opt out'' decisions alone. To postpone the policy and funding a year 
will mean the loss of over 40,000 units!
  Mr. Speaker, I urge my colleagues to support H.R. 202.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 3 minutes to the 
gentleman from Rhode Island (Mr. Weygand), another member whose work is 
reflected in this bill.
  Mr. WEYGAND. Mr. Speaker, I would like to first begin by thanking our 
ranking member on the subcommittee the gentleman from Massachusetts 
(Mr. Frank) as well as the gentleman from New York (Mr. Lazio) for the 
great work that they did in putting this bill together. Truly if we 
could get all bills before us in this manner, I think this session 
would be over rather quickly. I also want to thank the ranking member 
of the full committee the gentleman from New York (Mr. LaFalce) for his 
help on this bill and particularly sections that we got incorporated 
into the bill.
  Mr. Speaker, I would like to talk about two sections: Actually one is 
on telemarketing fraud. The other is on assisted living. Telemarketing 
fraud has besieged many people throughout this country. As a matter of 
fact, latest estimates are about $40 billion a year are lost in this 
country in telemarketing fraud. The largest amount of fraud that goes 
on are for those people over the age of 65. There are 33.1 million 
people in this country over that age and many of them live in much of 
our section 8 housing and other assisted housing that we have 
throughout this country. Yet there is not much done about trying to 
show them, educate them and prevent telemarketing fraud from occurring 
in those developments and those section 8 housing programs.
  There is a section within this bill that will provide and allow for 
HUD to embark upon a new program that will actually help reduce and 
eliminate telemarketing fraud in many of our housing developments, 
particularly those for the senior citizens. It is incredibly important, 
because many of our seniors are very proud and when they are struck by 
telemarketing fraudsters, they indeed do not tell other people. 
Programs that can be initiated to help save billions of dollars will be 
very, very good for our seniors but most importantly it is good that we 
have included it in this program.
  There is another section in this bill that is extremely good, I am 
very happy to see that we are moving forward on, and that is assisted 
living. Many of the section 8 housing units and many of the assisted 
programs that we have in the 202 bills do not provide presently for 
assisted living. It is the area that the low-income and the low-middle 
income really need assistance in. We have now begun to embark upon real 
change and modification to help in the assisted living area. This is 
most needed. I congratulate our ranking member and our chairman for 
including these provisions in there. It is a step in the right 
direction.
  For those of us who have done so much on senior issues, this I think 
will be an added boost to making sure that not only do we have 
independent living but we have the assisted living funding for these 
people that is so desperately necessary.
  Mr. FRANK of Massachusetts. Mr. Speaker, to close on our side, I 
yield myself such time as I may consume.
  I want to begin by acknowledging the staff work on this. This is, 
more than most bills, one where the staff did a great deal of work 
because what we had was a bipartisan consensus on some very important 
but technical issues. So on the Republican side to Mr. Ventrone, Mr. 
Cassidy and Mr. Suarez; on our side to Mr. Olson, Ms. Kuntz and Ms. 
Johnson-Obey, a great deal of thanks is due because they are the reason 
we got this worked out.
  I want to talk for just a couple of minutes about the nature of both 
the bipartisanship and the partisanship because it sometimes can seem 
to people paradoxical that we are on the one hand sometimes very 
partisan and then we talk about the importance of bipartisanship. The 
answer is in our democratic society, they both have a place and this 
bill illustrates it.
  When it comes to the question of how much in the way of Federal 
resources we should put into housing, whether we should be expanding 
these programs, whether the government needs to step in or whether the 
private market can be left entirely on its own, there are legitimate 
partisan differences that ought to be debated, how much needs to be 
done by the public sector and how much can be left to the private 
sector.
  The bipartisanship comes in here once we have a decision made as to 
what resources are going to be available. This bill is a bipartisan 
consensus, because it deals with a fixed amount of resources and, in 
fact, it even deals to a great extent, not entirely, but to a great 
extent with programs in being.

                              {time}  1715

  The chairman of the subcommittee, who did excellent work on this, and 
the other Members, including the senior Members on both sides, the 
chairman and the ranking member and myself, we were confronted with the 
consequences, potentially socially disastrous, of decisions made 30 
years ago or more. Decisions were then made unwisely, but not much we 
can do about them, which put people into certain kinds of housing, 
especially more vulnerable people, all the people and disabled people, 
but not exclusively, and then had the programs set to expire in 20 or 
30 years without apparent

[[Page 22848]]

thought as to what would happen to those people who had moved in at the 
age of 68 or 69 or 70 into a program where the building was 15 years 
into that expiration, and then in their eighties faced the possibility, 
when this program expired, of being kicked out.
  So what we have here, and it is important for people to understand 
this, to the extent that the Federal Government has constitutional 
power to preserve existing subsidized tenancies for individuals who are 
now living in them, this bill does it. We cannot in some cases compel 
owners who want to move out of the program and were given the rights to 
do it.
  We hope, and the bill is generously enough drafted, and this is 
something, again, I acknowledge the bipartisan support which was 
important. The bill is well enough drafted so that owners ought not to 
drop out. No one can say I am driven economically to drop out. This 
bill would treat anyone fairly. No one is going to be asked to lose 
money by staying in the program. We cannot take away their legal right 
to get out; we can diminish their financial incentive to get out. We do 
that. We, to the extent that we can, preserve various forms of 
assisted-housing tenancies, and that is very important.
  We also, Mr. Speaker, again in a bipartisan way, say in this bill to 
the extent that we get some new resources for the future there will be 
more flexibility in how you use them, and that is also very important.
  That is what is bipartisan about this bill, and that is why I think 
it is something that ought to be passed by a large amount.
  On the other hand, I want to note the area where partisanship remains 
legitimately. That is, we may still have later in this session 
differences over how much we should be devoting to these kind of 
programs. I would simply say this, and I do not mean to delay us to get 
into that debate now because I hope we can resolve that debate because 
I hope this bill will become part of an appropriation bill that will 
become law, and let me say I have been told that some people at the 
Office of Management and Budget do not like some provisions of this 
because going forward it bothers them.
  Let me say that it bothers me that it bothers them, and speaking on 
behalf of the Democrats on our side, it is our intention completely and 
utterly to ignore them, and I hope my friends on the other side will 
join us in paying no attention to what I hear OMB may say. As long as 
we are within the overall limits, the specifics of this are not matters 
on which I wish to hear from them; and if they speak out, let them do 
that, but let them be the tree that fell in the forest where nobody was 
around, Mr. Speaker.
  But I would say this: we responded here, and I thank the gentleman 
from New York for this, the gentleman from Iowa, and the senior 
gentleman from New York on our side. We responded to a desperate set of 
pleas. We heard this in hearings: people now living in these federally 
assisted programs said to us: please save our homes. These are in many 
cases federally assisted, subsidized, taxpayer-supported housing units; 
and they are so successful as programs that the residents literally 
begged us not to allow them to be kicked out.
  Now obviously we have, as I said, legitimate debates about resources, 
but I would note the fervor with which they asked us to save their 
housing as an example of how government programs can be valuable and 
valued. We responded to people that said, It's a good thing that you 
put these public resources in here. Please don't leave us out.
  Now, with that, Mr. Speaker, you can finally get the gavel you 
reached for three times already because I am through. I just want to 
say in summary this is bipartisan appropriately in working within the 
limited resources we have, but I believe it also ought not to be 
forgotten when we get into the more partisan argument and the more 
philosophical argument about whether programs like this ought to be 
expanded into the future. The depths of the desire to preserve these 
programs to which we have responded is also an argument, I believe, for 
an expansion in the future.
  Mr. LAZIO. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to return the compliment from the gentleman 
from Massachusetts (Mr. Frank) and thank him for his commitment to 
housing, for his intellectual grasp of the issues, and for his 
engagement on this. As the gentleman from Massachusetts had mentioned, 
we are, if not nearly, then precisely, in a crisis situation. Twenty 
and 25 years ago, the Federal Government extended contracts to 
apartment owners in the hopes that it would encourage them to build 
these apartment units to help house seniors that could not find any 
other place to live. They came to these assisted housing, these section 
8 locations, because they could not afford an apartment in some other 
part of the community, and now 20 years later the contracts which the 
Federal Government had with these owners have expired or are expiring, 
and they threaten 500,000 seniors, 500,000 people who are seniors, who 
are disabled, many who are folks that have lived there for very long, 
because the owners now have the opportunity to opt out, and what we 
have done with this bill is to create the right incentive for owners to 
ensure the continuity of allowing the seniors, the disabled, the folks 
that have been in there, to continue to live in there.
  I cannot think of what else our challenge, our charge, ought to be if 
we cannot at the outset ensure that we have housing for the elderly, 
for the disabled, for the folks that no matter what the encouragement 
of the incentive cannot go out, cannot work harder, cannot go out into 
the market and afford their own unit. That is the very reason why we 
have a public sector response for housing for folks who are elderly and 
disabled and who suffer with other income problems.
  But in particular I want to say that we are creating some new tools 
here with this legislation that would not just affect seniors who are 
living in section 8 housing, but also seniors who have come to live in 
what we call section 202 housing, which really is the premier senior 
housing program that our Nation has.
  If colleagues have a section 202 project in their community, they 
probably do not know that it is a section 202 project. We only know 
here in Washington, some bureaucrat may know, but my colleagues 
probably know it as a place where a lot of seniors enjoy themselves 
very much, where they have a common room, where they love where they 
live, where they have a sense of neighborhood, and the last thing that 
we want to do is create anxiety to erode the peace of mind that seniors 
have that the place that they live will be there for them next month 
and next year and the year after that.
  Unlike other parts of the population, there is not the same drive, 
for example, for vouchers for seniors. Seniors who come to the 
committee who see us in our districts say that they like where they 
live for the most part. They want to know that they will be able to 
stay there, to age in place. They like their friends and family in the 
area, they enjoy the services that they have come to rely on through 
section 202 program, and by making some relatively modest, but very 
important, adjustments in this program we give those seniors the peace 
of mind to know that they can live their life out there, if that is 
what they want.
  This bill will provide greater flexibility and resources to our 
existing seniors in disabled housing programs. It allows project-
financed modernization, the creation of mixed income environments and 
conversion to assisted living facilities for aging in place without 
undermining the current population that relies on section 202. We also 
protect seniors, individuals with disabilities and vulnerable families 
from displacement in the opt-out situations that I was just talking 
about by providing rental vouchers that have enough value to allow them 
to remain in their homes.
  Mr. Speaker, this bill does exactly what the public calls upon 
Republicans and Democrats to do, to put their differences aside, to try 
and work within the confines, as the gentleman from

[[Page 22849]]

Massachusetts (Mr. Frank) had mentioned of a budget and to make sure 
that we get value for our dollars, to look with a sense of creativity 
but commitment to the future, to trust that people will use the 
flexibility that they have in this bill to extend these resources to 
even more seniors, to even more folks who struggle with disabilities 
and to ensure that they have the security and peace of mind to know 
that that housing will be there for them in the years ahead because, 
Mr. Speaker, I will say it is very important that one has health care.
  It is essential; it is very important that one has a meal. It is very 
important that one has counseling to ensure that they pay your bills. 
But if one does not have a roof over their head, if they do not have a 
place to go back at night, if one does not have a pillow to put their 
head on, they cannot begin to even get their life together, and that is 
the role that the Federal Government plays.
  Mr. Speaker, I am proud of the collaborative effort that we have 
here, a bipartisan effort. I want to thank again the gentleman from 
Massachusetts (Mr. Frank) and the gentleman from New York (Mr. LaFalce) 
and again compliment the chairman of the full committee, the gentleman 
from Iowa (Mr. Leach), for his great work. There were two people that 
were left out of the common staff people that the gentleman from 
Massachusetts (Mr. Frank) left out which I now want to mention, if I 
can. One is Clinton Jones who sits right here on my left who helped 
greatly and also Sarah Chapman within the committee who also assisted 
with the drafting of this bill.
  I urge adoption of the legislation before us.

 Marking Up to Market: Renewing Section 8 Contracts and the Problem of 
                           Owner ``Opt Outs''

       Prepared By: Majority Staff.
       Date: June 23, 1999.


                        Statement of the problem

       Owners of affordable multifamily housing projects 
     subsidized through the federal ``Section 8'' program are, in 
     increasing numbers, discontinuing their participation in the 
     program and choosing to ``opt out'' upon expiration of their 
     current Section 8 contracts. These increasing opt-outs could 
     place thousands of residents, many of whom are elderly or 
     persons with disabilities, at risk of losing their housing.
       Section 8 opt-outs further erode the stock of affordable 
     housing. Already Section 8 mortgage prepayments of federally-
     insured mortgages (the method by which a Section 8 project 
     owner may terminate any affordability or use restrictions 
     imposed on the property), have removed a substantial portion 
     of units from the affordable housing inventory. In 1998, more 
     than 345 properties with approximately 38,000 affordable 
     housing units were removed from the Section 8 program as a 
     result of both voluntary opt-outs by owners and HUD 
     terminations. Through 2004, Section 8 contracts covering more 
     than one million subsidized units will expire. Of these more 
     than 500,000 units of affordable housing may be at-risk of 
     being lost due to opt-outs.\1\
---------------------------------------------------------------------------
     Footnotes at the end of article.
---------------------------------------------------------------------------


                         The section 8 program

       The Section 8 program (which gets its name from the 
     provision of law in the United States Housing Act of 1937 
     which sets forth the requirements of the program) is the 
     primary form of direct federal housing assistance to low 
     income Americans, serving more than 3 million families. By 
     contrast, the public housing program serves approximately 1.4 
     million families.
       The program provides subsidies in two forms: tenant-based 
     assistance (Section 8 vouchers) and assistance to owners to 
     develop and maintain Section 8 projects (project-based 
     assistance). Tenant-based vouchers allow recipients the 
     choice of where to use their subsidy, thus giving them the 
     freedom to look for better housing in the private market. 
     Vouchers empower residents with the ability to leave their 
     current apartments and take their voucher with them. Because 
     tenant-based assistance contains this facet of free-market 
     competition, landlords must be more responsive to their 
     tenants. By contrast, project-based Section 8 subsidy is tied 
     to the actual housing development and units: individual 
     tenants may leave, but the subsidy stays with those units for 
     use by the next eligible low-income residents.
       In its initial phases, the Section 8 project-based program 
     provided 20-year contracts to owners and developers who would 
     agree to house low-income families under HUD guidelines for 
     the length of the contract. In many cases, private lenders 
     provided the mortgage financing, also insured by the federal 
     government through the Federal Housing Administration (FHA), 
     for terms ranging from 40 to 50 years. As a consequence, the 
     federal rent subsidies received by these Section 8 owners is 
     a component of the total rental income used to pay the 
     federally-insured mortgage.
       For both the tenant-based and project-based programs, HUD 
     establishes for each locality a rent level on which the 
     federal government is willing to base its subsidy, known as 
     the Fair Market Rent, or ``FMR.'' Unfortunately, while FMRs 
     are supposed to serve as the guidelines for setting subsidy 
     levels, they are oftentimes a very poor reflection of the 
     actual market rents for comparable units for the area. In 
     some communities, FMRs are extremely low in relation to 
     comparable ``real'' market rents.\2\ For all practical 
     purposes, project owners argue, the term is a misnomer in 
     such cases in that FMRs are neither ``fair'' nor are they 
     ``market'' in these areas. Instead, these artificial rent 
     levels essentially serve as a form of federal rent control 
     over the assisted housing inventory--necessary as an upper 
     limit on the federal government's financial exposure, but not 
     necessarily an accurate portrayal of each market. Arguably 
     then, for many areas of the country FMRs can be more 
     accurately described as ``fake market rents'' rather than as 
     true measures of local market realities.


                        Problems with Section 8

       The combination of project-based Section 8 subsidies with 
     long-term government-insured financing has led to a host of 
     problems for the Section 8 program as local real estate 
     markets and economic conditions change. Until recently the 
     focus of concern from Congress and the Administration had 
     been the Section 8 project-based properties with federal 
     mortgage insurance which were receiving unit rents much 
     higher than the FMRs for their localities. In some cases, 
     their rents were higher than comparable rents.\3\ For these 
     ``above market'' Section 8 properties, the federal government 
     was paying more to house persons in the federal program than 
     it would otherwise have cost in the private rental market.
       The problem became critical at the time of contract 
     expiration, when HUD had to choose either to renew such 
     contracts or allow them to expire, thereby causing tenant 
     displacement. Simply renewing these Section 8 contracts at 
     their above-market rent levels would have been not only 
     unwise policy, but unsustainable from a long-term budgetary 
     perspective. The costs of pursuing such a policy would have 
     been prohibitively expensive and would have eventually 
     consumed all of HUD's budget authority. Unilaterally reducing 
     the rents on these properties upon renewal and marking them 
     down to market, however, would have triggered massive 
     defaults on the federally-insured mortgages since many owners 
     of these properties would have been unable to pay the debt 
     service on these mortgages. Again, the federal government 
     faced huge financial exposure through potential losses to 
     HUD's FHA Multifamily Mortgage Insurance fund.
       The 105th Congress attempted to address this dilemma when 
     it passed the Multifamily Assisted Housing Reform and 
     Affordability Act of 1997 (``MAHRA'').\4\ The legislation 
     established a program to enable HUD to restructure and reduce 
     the debt on many properties, enabling contract rents to be 
     brought down to comparable market levels (``marked to 
     market'').


                          the opt-out problem

       In contrast to the above-market portfolio, the Section 8 
     opt-out problem now confronting Congress involves below-
     market Section 8 projects. In many cases, the rents offered 
     by HUD to the owners for renewal of their contracts is much 
     lower than comparable rents for similar multifamily units in 
     the locality. Upon expiration of a current contract, a 
     private owner always has the right not to enter into a new 
     contract with the federal government. By choosing not to 
     renew and opting out of the program, such project owners can 
     achieve higher rents for their units on the private market.
       The temptation exists to characterize this as a problem of 
     uncaring, greedy owners chasing higher profits without regard 
     to the welfare of the tenants. In many ways, however, this 
     portrayal is an oversimplification of the practical choices 
     available to many of these owners. For example many 
     ``owners'' of Section 8 projects are business entities (such 
     as limited partnerships), where legal and fiduciary 
     obligations are imposed upon the party with management 
     responsibility to maximize the return to the investors.\5\ 
     Federal tax law also plays a major role in determining the 
     rational business choices available to any owner. Because of 
     the way the tax code treats depreciation and what is 
     considered taxable income from these properties, many owners 
     face what is known as a ``phantom income'' problem (the IRS 
     counts certain amounts as taxable income to the owner even 
     though the owner does not actually receive such income in 
     that year). As a result of the phantom income problem, some 
     owners face severe cash flow problems and must increase 
     revenues whenever possible. Because of such objective 
     financial considerations, ascribing motivations such as 
     ``greed'' to these owners is largely beside the point. After 
     all, even an owner who is not motivated by greed is 
     constrained if the choices are limited to opting-out, 
     exposure to investor lawsuits, or bankruptcy.

[[Page 22850]]

       In order to encourage (or enable) the owners of such 
     projects to remain in the program, and prevent more opt-outs, 
     many owners and housing advocates have called for HUD to 
     renew expiring below-market Section 8 contracts at comparable 
     market rents--a process known as ``marking up to market.'' In 
     fact, HUD has had the legal authority, and arguably the 
     resources, to develop a comprehensive approach designed to 
     mark up contracts upon their renewal. When Congress passed 
     MAHRA it did more than just establish a program for dealing 
     with above-market Section 8 properties. Section 524(a)(1) of 
     MAHRA specifically affords HUD broad authority to renew 
     expiring Section 8 contracts at rents that would not exceed 
     comparable market rents for a locality. Until recently, 
     however, despite having the legislative authority and the 
     current resources to address the issue, HUD had failed to 
     offer or develop anything resembling a comprehensive approach 
     to solving the opt-out problem.
       Clearly, while the reasons for individual owner opt-out 
     decisions may vary, the primary factor driving the increase 
     in owners choosing to opt-out has been HUD's refusal to 
     exercise the authority Congress provided in MAHRA to mark 
     rents up to market. In fact, HUD Field staff has been 
     extremely stringent in accepting and interpreting the results 
     of rent comparability studies, provided by owners wishing to 
     renew their contracts, that show market rents at higher 
     levels than their current contract rents. This has been a 
     particular problem in rural areas, where comparable rents may 
     not be readily available. In some of these areas, for 
     example, HUD has insisted on using as comparable rents the 
     rent levels in properties funded through other federal 
     programs (such as rural housing programs administered by the 
     Department of Agriculture). Such rents are obviously not 
     market--they are lower than market precisely because they are 
     subsidized. In addition, many elderly developments were built 
     in rural and depressed areas precisely because there was a 
     severe need, and these projects are often the best housing 
     available in such areas and more costly to maintain than the 
     surrounding stock.
       As noted earlier, depending on the underlying economic 
     fundamentals of a particular Section 8 project and any legal 
     or fiduciary obligations toward investors that may exist, an 
     owner of these below-market Section 8 projects may have no 
     choice but to leave the program. By refusing to mark 
     contracts up to comparable market levels, many in the 
     advocacy community and some legislators expressed belief that 
     encouraging nonrenewals was an intentional policy choice.\7\


                           the voucher option

       When owners opt-out, the result is often undue hardship for 
     many vulnerable tenants. While displaced residents are 
     guaranteed housing assistance in the form of Section 8 
     vouchers, for a number of reasons this is not appealing for 
     many Section 8 residents. A great number of those likely to 
     be affected by opt-outs are elderly or disabled individuals, 
     and have lived in these projects for long periods, oftentimes 
     for the full 20 years of the original Section 8 contract. For 
     the most part, being forced to move is extremely traumatic 
     for these individuals, and preventing that necessity is their 
     primary concern. Vouchers are perceived by other residents 
     living in high-cost real estate markets to be ineffective in 
     helping them finding adequate housing for their families. 
     These elderly and disabled persons and families either do not 
     want to move, or feel that if forced to move they will be 
     unable to find adequate comparable housing. As a consequence, 
     the appeal of vouchers that otherwise exists because of their 
     free-market qualities and increased power of choice 
     associated with them, eludes these particular individuals and 
     families.
       Moreover, HUD regulations governing the Section 8 program 
     impose a requirement that vouchers be used only in properties 
     with rents that are reasonable for the area for units of the 
     same size and similar characteristics (so called ``rent 
     reasonableness requirements''). Because of this restriction, 
     residents of a Section 8 project who receive vouchers as a 
     consequence of an owner's decision to opt out of the program 
     may be precluded from using those vouchers in that project. 
     For example, if an owner opts out and increases unit rents to 
     $500, but the HUD rent reasonableness guidelines are set at 
     $495, then those receiving vouchers would not be allowed to 
     remain in that project, even if they were willing to make up 
     the shortfall.
       Authority exists in current law for the provision of 
     ``enhanced vouchers'' in certain circumstances. Enhanced 
     vouchers (also known as ``sticky'' vouchers) provide a 
     greater level of subsidy than ordinary vouchers, and are 
     designed primarily to allow the resident to remain in the 
     unit, despite the resulting rent levels exceeding allowable 
     rents under the voucher program. These vouchers are only 
     available for use in connection with mortgage prepayments, 
     not in opt-out situations (unless the opt-out is also in 
     connection with a mortgage prepayment).
       While the vast majority of these elderly and disabled 
     residents would rather remain in their homes, the 
     overwhelming number cannot afford the likely rent increases. 
     The following table shows the actual rent increases faced by 
     residents in several projects located in rural Iowa where the 
     owners opted-out of the program.\8\ All of these projects 
     served elderly residents:

----------------------------------------------------------------------------------------------------------------
                                                                                                        Rent/
                                                                 Number   Average    Rent     Rent    Percentage
                                                                   of      tenant   before   after       rent
                       Property location                        assisted  monthly  opt-out  opt-out    increase
                                                                  units    income    (per     (per   (per month,
                                                                                    month)   month)  in percent)
----------------------------------------------------------------------------------------------------------------
Boone.........................................................        56     $650     $195     $299    $104 (53)
Knoxville.....................................................        50      741      223      311      88 (39)
Marshalltown..................................................        56      623      187      284      97 (52)
Newton........................................................        56      700      210      351     141 (67)
Pella.........................................................        58      700      210      265      55 (26)
----------------------------------------------------------------------------------------------------------------

       Opt-outs threaten some of the best affordable housing. HUD 
     data shows that 90 percent of the subsidized units in 
     properties whose owners say they are likely to opt out are 
     located in low-poverty neighborhoods, where residents have 
     access to greater employment opportunities, better schools 
     for their children. In a rural area with little rental 
     housing, these seniors may be forced to move long distances 
     to find decent affordable housing.
       Budget constraints have required annual contract renewals. 
     While earlier long term- contracts meant that fewer opt-outs 
     occurred each year, conversion to annual contracts mean that 
     an owner has an opportunity to opt out each year. Residents, 
     therefore, are constantly uncertain about the stability and 
     status of their housing.


                            Policy responses

       Because of the growing problem, several members of Congress 
     who are key to housing legislation introduced bills designed 
     to address the problem. On March 25, 1999, Banking Committee 
     Chairman Jim Leach, Housing Subcommittee Chairman Rick Lazio, 
     and VA/HUD Appropriations Subcommittee Chairman Jim Walsh 
     introduced H.R. 1336, ``The Emergency Residents Protection 
     Act of 1999'' to protect residents from displacement 
     resulting from Section 8 opt-outs. Congressman Bruce Vento 
     and Jim Ramstad introduced H.R. 425, ``The Housing 
     Preservation Matching Grant of 1999'' on January 19, 1999, as 
     a mechanism to foster the preservation of the affordable 
     housing stock.
       In light of these Congressional actions, HUD subsequently 
     decided to reevaluate its existing renewal practices and 
     issue new guidelines regarding Section 8 opt-outs. HUD Notice 
     99-15, the ``Emergency Initiative to Preserve Below-Market 
     Project-Based Section 8 Multifamily Housing Stock,'' was 
     issued on June 15, 1999.
       HUD officials have given rough estimates regarding the 
     financial resources needed by the Department under various 
     approaches to the opt-out problem. According to HUD, renewing 
     all below market Section 8 projects could eventually cost 
     $600 million to $800 million dollars annually. HUD has also 
     stated that using enhanced vouchers, it can prevent tenant 
     displacement due to opt-outs this year at a cost of $30 
     million in existing FY 99 resources, and would require $77 
     million for FY 2000.

       H.R. 1336--The Emergency Residents Protection Act of 1999

       The legislation expands existing authority for HUD to offer 
     enhanced vouchers, providing assistance for rent levels up to 
     the market level. Upon the death or change in residence of 
     the tenant, the enhanced voucher either expires or converts 
     to a standard voucher. The proposal expands the use of 
     enhanced vouchers in more situations than allowed under 
     current law, and targets the enhanced vouchers to seniors and 
     persons with disabilities only. The legislation would allow 
     enhanced vouchers for other low-income families at the 
     discretion of HUD only in low vacancy/tight market areas. The 
     bill provides for enhanced vouchers subject to such sums as 
     may be appropriated for FY2000-2004.
       H.R. 1336 mandates that HUD renew below-market expiring 
     Section 8 contracts at no more than 90% of comparable market 
     rents. The rationale for this provision was to circumscribe 
     HUD's discretion so it actually renews contracts rather than 
     allowing inaction to lead to more owner optouts. The 90% rent 
     level was an initial figure provided by housing advocates and 
     is likely to be modified as the legislation progresses.

       H.R. 425--The Housing Preservation Matching Grant of 1999

       The approach in H.R. 425 emphasizes preservation of the 
     housing units as affordable housing. The bill would authorize 
     HUD to match state assistance for preservation of federally 
     assisted affordable housing for low-income families. Many 
     housing advocates argue that in addition to protecting the 
     residents (by awarding enhanced vouchers, for example) any 
     comprehensive approach to the opt-out problem must attempt to 
     preserve the actual project itself in the affordable housing 
     inventory. Otherwise, according to supporters of preservation 
     efforts, offering additional enhanced voucher authority only 
     may encourage owners not to renew their subsidy contracts.
       H.R. 425 would match each dollar committed by a State for 
     preservation efforts with two federal dollars. Grants can be 
     used only for assistance for acquisition, preservation 
     incentives, operating cost, and capital expenditures for 
     housing projects that meet

[[Page 22851]]

     certain requirements set forth in the legislation. These 
     requirements include mortgage financing through federally-
     insured programs, a binding commitment on the part of the 
     owner (or subsequent owner) of the project to extend all low-
     income affordability restrictions, and a waiver of mortgage 
     prepayment rights. The bill authorizes appropriations at such 
     sums as necessary for these purposes.

HUD Notice 99-15 Emergency Initiative to Preserve Below-Market Project-
               Based Section 8 Multifamily Housing Stock.

       HUD Notice 99-15 (the ``Emergency Initiative'') provides 
     instructions to HUD field staff, project owners and managers, 
     on marking expiring Section 8 contracts up to market. An 
     essential feature of the HUD approach is targeting of 
     resources to those properties where opt outs are likely to 
     occur, and where such opt-outs would result in undue harm to 
     residents. HUD will target the properties most likely to opt 
     out and will set a cap on the new rents that will be paid to 
     project owners.
       Market-level rents are to be determined by third-party 
     market studies. HUD will mark rents up to market while 
     limiting these increases in rents to a maximum of comparable 
     market rents or 150% of the published FMRs. HUD's approach is 
     not intended to prevent all opt outs, and the notice makes 
     clear that only a portion of the stock will be preserved 
     because of cost constraints and other factors. For those 
     areas where opt-outs are not prevented, HUD has stated that 
     additional enhanced voucher authority, like that provided by 
     HR 1336, will be needed.
       Properties are ineligible for rent increases under HUD's 
     Emergency Initiative if:
       --the mortgagor is a non-profit entity;
       --the properties have a low- or moderate-income use 
     restriction that will not be eliminated by the property 
     prepaying or opting out of Section 8 program (a project, for 
     example, that is also a low income housing tax credit 
     property);
       --the property has a HUD Real Estate Assessment Center 
     inspection score of less than 60;
       --the owner is subject to administrative sanctions;
       --the project is a Section 8 Moderate Rehabilitation 
     project with a contract expiring in fiscal year 1999 (other 
     than those assisted under Section 441 of the Stuart McKinney 
     Homeless Assistance Act);
       --the owner previously provided notice of an opt-out and 
     the local housing authority has issued vouchers to one or 
     more of the tenants; or,
       --the project does not have a contract that is expiring.
       In addition, criteria for participation in the program 
     includes a requirement that the owner must have a 
     ``comparable gross rent potential'' (defined in the Notice) 
     at or above 110% of the fair market rent potential to 
     participate in the program for certain properties. HUD's 
     Assistant Secretary for Housing will have authority to issue 
     waivers of certain eligibility requirements under certain 
     circumstances (i.e. where vouchers would be difficult to use 
     in the local area, the residents are particularly vulnerable 
     or the property is a high priority for the local community).
       Contract renewals will be for five years, subject only to 
     annual appropriations. Tenants will receive an initial notice 
     describing the five-year contract. In addition, tenant 
     notification requirements regarding expiration of the 
     contract will be reduced from an annual requirement to a 
     single notification six months before the end of the five-
     year period.


                               conclusion

       A comprehensive approach is needed to protect residents 
     threatened by displacement due to Section 8 opt-outs, and to 
     preserve affordable housing where possible. H.R. 1336, H.R. 
     425, and HUD's recently issued Emergency Initiative offer 
     somewhat different approaches to solving the opt-out problem. 
     These various strategies are not necessarily mutually 
     exclusive, however, and the most likely outcome is that 
     aspects of each approach will be incorporated into bipartisan 
     legislation that offers a variety of tools for addressing the 
     issue.


                               footnotes

     \1\ Testimony by the National Housing Trust before the 
     Subcommittee on Housing and Community Opportunity, May 4, 
     1999, based on HUD Data compiled by the National Housing 
     Trust.
     \2\ Appropriations acts have limited FMRs to 40% of the 
     median rent for the locality.
     \3\ Primarily because certain cost adjustment factors built 
     into the Section 8 contracts (Annual Automatic Adjustment 
     Factors) ensured that contract rent levels would continue to 
     increase, even though local real estate markets may have been 
     experiencing a decline in private sector rent levels.
     \4\ Title V of HR 2158, the VA, HUD and Independent Agencies 
     Appropriations Act of 1998.
     \5\ In a limited partnership, for example, the general 
     partner would have a fiduciary responsibility to operate the 
     property and make financial decisions for the benefit of the 
     limited partners.
     \6\ Section 524(a)(1) of MAHRA reads in pertinent part that 
     ``. . . the Secretary may use amounts available for the 
     renewal of assistance under section 8 of the United States 
     Housing Act of 1937, upon termination or expiration of a 
     contract for assistance under section 8 (other than a 
     contract for tenant-based assistance . . .), to provide 
     assistance under section 8 of such Act at rent levels that do 
     not exceed comparable market rents for the market area. The 
     assistance shall be provided in accordance with terms and 
     conditions prescribed by the Secretary.
     \7\ In a letter to HUD Secretary Andrew Cuomo dated June 4, 
     1999, Senator Mikulski and Senator Bond wrote that the 
     ``failure of the Department to respond to the opt-out crisis 
     has raised concerns that HUD is intentionally pushing owners 
     to opt out with resulting loss of low-income housing and the 
     displacement of tenants. This is most evident through the 
     failure of the Department to use accurate appraisals to 
     ensure that section 8 contracts can be renewed at a rent that 
     reflects market conditions.''
     \8\ Information provided by the Iowa Coalition for Housing 
     and the Homeless.
                                  ____


H.R. 202--``PRESERVING AFFORDABLE HOUSING FOR SENIOR CITIZENS INTO THE 
                   21ST CENTURY''--SECTION-BY-SECTION

     Section 1. Short title and table of contents
       Title cited as ``Preserving Affordable Housing for Senior 
     Citizens into the 21st Century Act''.
     Section 2. Regulations
       Provides that the HUD Secretary shall issue regulations 
     necessary to carry out the provisions of the Act only after 
     notice and opportunity for public comment.
     Section 3. Effective date
       Provisions of the Act are effective as of the date of 
     enactment unless such provisions specifically provide for 
     effectiveness or applicability upon another date. The 
     authority to issue regulations to implement this Act shall 
     not be construed to affect the effectiveness or applicability 
     of the bill as of the effective date.

    Title I--Conversion of Financing of Refinancing for Section 202 
                   Supportive Housing for the Elderly

     Section 101. Conversion of financing
       Requires the HUD Secretary to convert the financing of pre-
     1990 supportive housing program for the elderly from direct 
     loans and project-based Section 8 rental assistance to the 
     post-1990 method provided to new developments, which is 
     through non-repayable capital advances and project rental 
     assistance contracts (PRACs). In converting the financing of 
     projects pursuant to this section, the Secretary shall cancel 
     any indebtedness to the Secretary on the project, but such 
     authority shall be effective only to the extent provided in 
     advance in appropriation Acts. Requires the Secretary to 
     conduct a study of the net impact on the Federal budget 
     deficit or surplus of making available, on a one-time basis, 
     debt forgiveness relating to remaining principal and interest 
     from Section 202 loans with a dollar-for-dollar reduction of 
     rental assistance amounts under the Section 8 rental 
     assistance program.
     Section 102. Prepayment and refinancing
       Requires the Secretary to approve prepayment of any 
     indebtedness to the Secretary relating to any remaining 
     principal and interest on a project as part of a loan 
     prepayment plan, provided the project sponsor continues to 
     operate the project under terms as advantageous to existing 
     and future tenants as required by the original loan 
     agreement, until the maturity date of the original loan 
     agreement. Requires that upon refinancing, the Secretary make 
     available at least 50% of annual savings resulting from 
     reduced Section 8 or other rental housing assistance in a 
     manner that is advantageous to tenants, which may include 
     increasing supportive services, rehabilitation, 
     modernization, and retrofitting of structures, and other 
     specified purposes.

 Title II--Authorization of Appropriations for Supportive Housing for 
               the Elderly and Persons With Disabilities

     Section 201. Supportive housing for elderly persons
       Provides annual authorization of appropriation of $700 
     million for existing program of supportive housing for the 
     elderly (section 202) for FY 2001, FY 2002, FY 2003 and FY 
     2004.
     Section 202. Supportive housing for persons with disabilities
       Provides annual authorization of appropriation of $225 
     million for existing program of supportive housing for the 
     disabled (section 811) for FY 2001, FY 2002, FY 2003 and FY 
     2004.
     Section 203. Service coordinators and congregate services for 
         elderly and disabled housing
       Provides annual authorization of appropriation of $50 
     million for grants for service coordinators for certain 
     federally assisted multifamily housing projects, for FY 2000, 
     and authorizes such sums as may be necessary for FY 2001 and 
     FY 2002.

Title III--Expanding Housing Opportunities for the Elderly and Persons 
                           With Disabilities


                  Subtitle A--Housing for the Elderly

     Section 301. Matching grant program
       Adds provision to Section 202 of the Housing Act of 1959, 
     Supportive Housing for the Elderly, for the provision of 
     capital grants requiring the project sponsor to supplement 
     funds with a matching amount. Applicants for assistance are 
     required to provide supplemental matching funds, which shall 
     be not less than 25%-50% (as the Secretary of HUD may 
     determine) of the amount provided. Not less than 50% of the 
     supplemental funds in the matching amount shall be from non-
     Federal sources of funds.

[[Page 22852]]


     Section 302. Eligibility of for-profit limited partnerships
       Provides that for-profit limited partnerships are eligible 
     to participate in the program established under this Act.
     Section 303. Mixed funding sources
       Allows private non-profit housing providers to use all 
     sources of financing, including Federal funds, for amenities, 
     relevant design features and construction of affordable 
     housing for seniors.
     Section 304. Authority to acquire structures
       Removes limitation allowing private non-profit housing 
     providers to acquire RTC-held properties only for the 
     purposes of providing affordable housing for seniors.
     Section 305. Mixed-income occupancy
       Expands income eligibility for occupancy from 50% and below 
     area media income (AMI) to 80% and below of AMI for existing 
     affordable housing developments for seniors, provided that 
     such development is designated as high vacancy.
     Section 306. Use of project reserves
       Provides that amounts for project reserves for a project 
     assisted under this section may be used to reduce the number 
     of dwelling units in the project for specified purposes.
     Section 307. Commercial activities
       For Section 202 projects, provides that no provision of law 
     may be construed as prohibiting or preventing the location 
     and operation of commercial facilities in a project for the 
     benefit of residents of that project and the community in 
     which the project is located.
     Section 808. Mixed finance pilot program
       Requires the Secretary to carry out a pilot program, for 
     not more than five projects, to determine the effectiveness 
     and feasibility for providing assistance under Section 202 
     for housing projects that are both for supportive housing for 
     the elderly and for other types of housing, which may include 
     market rate housing.
     Section 309. Grants for conversion of elderly housing to 
         assisted living facilities
       Provides discretionary authority to designate public or 
     private entities to carry out finance conversion for elderly 
     developments. Provides waiver authority to carry out finance 
     conversion for elderly housing developments. Authorizes such 
     sums as may be necessary for each of fiscal years 2000 
     through 2004.
     Section 310. Grants for conversion of public housing projects 
         to assisted living facilities
       Provides the Secretary with discretion to make grants to 
     public housing agencies to convert dwelling units in projects 
     already designated for occupancy by elderly persons, to 
     assisted living facilities for elderly persons. Authorizes 
     such sums as may be necessary for each of fiscal years 2000 
     through 2004.
     Section 311. Use of section 8 assistance for assisted living 
         facilities
       Provides that a recipient of Section 8 housing assistance 
     may use such assistance in an assisted living facility.
     Section 312. Annual HUD inventory have assisted housing 
         designated for elderly persons
       Requires that the HUD Secretary establish and maintain, to 
     be updated annually, an inventory of HUD and federally-
     assisted housing that is designated for occupancy, in whole 
     or in part, for occupancy by elderly or disabled families or 
     both.
     Section 313. Treatment of applications
       Provides that in case of denial of an application for 
     assistance under Section 202 for failure to timely provide 
     information, the Secretary shall notify the applicant and 
     provide an opportunity to show the failure was due to a 
     third-party failure to provide information.


           Subtitle B--Housing for Persons with Disabilities

     Section 321. Matching grant program
       Adds provision to Section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act, Supportive Housing for 
     Persons with Disabilities, for the provision of capital 
     grants requiring the project sponsor to supplement funds with 
     a matching amount. Applicants for assistance are required to 
     provide supplemental matching funds, which shall be not less 
     than 25%-50% (as the Secretary may determine) of the amount 
     provided. Not less than 50% of the supplemental funds in the 
     matching amount shall be from non-Federal sources of funds.
     Section 322. Eligibility of for-profit limited partnerships
       Provides that for-profit limited partnerships are eligible 
     to participate in the program established under this Act.
     Section 323. Mixed funding sources
       Allows private non-profit housing providers to use all 
     sources of financing, including Federal funds, for amenities, 
     relevant design features and construction of affordable 
     housing for seniors.
     Section 324. Tenant-based assistance for persons with 
         disabilities
       Provides that tenant-based rental assistance may be 
     provided by a public housing agency or through a private 
     nonprofit organization.
     Section 325. Project size
       Provides that of any amounts made available in any fiscal 
     year for capital advances or project rental assistance under 
     this section, not more than 25% may be used for supportive 
     housing which contains more than 24 separate dwelling units. 
     Requires the Secretary to study and submit a report to 
     Congress regarding the extent to which the authority of the 
     Secretary under Section 811(k)(4) of the Cranston Gonzalez 
     National Affordable Housing Act to provide assistance to 
     supportive housing projects for persons with disabilities 
     having more than 24 units; the per-unit costs and benefits 
     involved with different size Section 811 projects; and the 
     per-unit costs and benefits involved with different size 
     Section 202 projects, taking into account social 
     considerations afforded by smaller and moderate-size 
     developments.
     Section 326. Use of project reserves
       Provides that amounts for project reserves for a project 
     assisted under this section may be used to reduce the number 
     of dwelling units in the project for specified purposes.
     Section 327. Commercial activities
       For Section 811 projects, provides that no provision of law 
     may be construed as prohibiting or preventing the location 
     and operation of commercial facilities in a project for the 
     benefit of residents of that project and the community in 
     which the project is located.


                      subtitle c--other provisions

     Section 341. Service coordinators
       Provides that service coordinators funded with grants under 
     this section for a specific project may also provide services 
     to low-income elderly or disabled families in the vicinity of 
     such project. Requires the Secretary of HUD in cooperation 
     with the Secretary of HHS to establish standards regarding 
     education and outreach to combat telemarketing fraud directed 
     against the elderly.
     Section 342. Commission on Affordable Housing and Health Care 
         Facility Needs in the 21st Century
       Establishes a commission to be known as the Commission on 
     Affordable Housing and Health Care Facility Needs in the 21st 
     Century. The Commission shall provide an estimate of the 
     future needs of seniors for affordable housing and assisted 
     living and health care facilities identify methods of 
     encouraging private sector participation and investment in 
     affordable housing, and other matters relating to housing the 
     elderly.

     Title IV--Renewal of Expiring Rental Assistance Contracts and 
                        Protection of Residents

     Section 401. Findings and purposes
       Sets forth Congressional findings, including that 
     affordable housing is critical to the well-being of 
     vulnerable families, especially seniors and persons with 
     disabilities; that Federal rental assistance contracts are 
     expiring in great numbers and a significant number of owners 
     are choosing not to renew contracts with the Federal 
     government; that as a result rent levels for vulnerable 
     families may rise dramatically, possibly forcing these 
     families to move from their homes; and that the Federal 
     government should ensure those least able to provide for 
     themselves receive the assistance of the Federal government.
       The purpose of the Act is to protect vulnerable residents, 
     particularly seniors and persons with disabilities, by 
     ensuring they are not forced to move from their homes and by 
     encouraging private owners to continue serving low-income 
     families.
     Section 402. Renewal of expiring contracts and enhanced 
         vouchers for project residents
       Unless otherwise provided, for expiring Section 8 
     properties that have current rents below comparable market 
     rents for the area, the Secretary of HUD is directed upon 
     renewal of such Section 8 contracts to set rents at 
     comparable market rent levels. For those expiring Section 8 
     contracts that have rent levels above comparable market rents 
     but are not subject to restructuring, the Secretary upon 
     renewal shall set these rents at comparable market rents.
       Directs the Secretary of Housing and Urban Development to 
     provide ``enhanced vouchers'' to residents residing in a 
     property upon the date of the expiration of a federally-
     assisted housing contract that is not renewed. Enhanced 
     vouchers allow increased assistance for residents in cases 
     where rent levels increase as a result of the expiration of 
     the contract, therefore ensuring that the resident may 
     continue to reside in the unit. Authorizes such sums as may 
     be necessary for enhanced voucher assistance for fiscal years 
     2000 through fiscal year 2004.
       Provides that no state may limit allowable project 
     distributions to owners that renew a project under provisions 
     of this Act.
     Section 403. Section 236 assistance
       Adds as an eligible purpose of certain interest reduction 
     payment grants available under Section 236 of the National 
     Housing Act the refinancing of mortgages on these properties, 
     resulting in cost savings to the federal government.
       Allows an owner of a project financed under a State program 
     pursuant to Section 236 of the National Housing Act to retain 
     any excess rental income from the project for use for the 
     benefit of the project.

[[Page 22853]]


     Section 404. Matching grant program for affordable housing 
         preservation
       Provides the Secretary of HUD with authority to make grants 
     to State and qualified units of general local government for 
     low-income housing preservation purposes, to be matched on a 
     one-to-one basis from sources provided by the grant 
     recipients. Amounts may be used for acquisition, preservation 
     incentives, operating costs, and capital expenditures for a 
     housing project that is: at risk of loss; primarily occupied 
     by elderly or disabled families; contains one or more 
     dwelling units occupied by large families; is located in a 
     rural area without an adequate supply of housing; or where 
     rental assistance vouchers would, under certain market 
     conditions, be difficult for residents to use. In making 
     grants under this subtitle during fiscal years 2001 and 
     thereafter, the Secretary shall give priority to eligible 
     States and qualified units of general local government that 
     have not previously received a grant under this subtitle, and 
     to grant for eligible housing projects that ensure transfer 
     of such projects to nonprofit organizations.
     Section 405. Rehabilitation of assisted housing
       Amends Section 236 of the National Housing Act to allow the 
     use of recaptured interest rate reduction payments from a 
     project for rehabilitation of that project.
     Section 406. Technical assistance
       Amends the Multifamily Assisted Housing Reform and 
     Affordability Act of 1997 to allow for technical assistance 
     for preservation of low-income housing.
     Section 407. Termination of section 8 contract and duration 
         of renewal contract
       Provides that section 8 contracts may be renewed for up to 
     one year or for any number of years, subject to 
     appropriations (as opposed to mandatory renewals of one 
     year).
       Amends Section 201 of the Housing and Community Development 
     Amendments of 1978 by allowing the use of enhanced vouchers 
     for projects preserved as affordable housing under section 
     229 of the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990.
     Section 408. Enhanced voucher eligibility for residents of 
         flexible subsidy properties
       Amends Section 201 of the Housing and Community Development 
     Amendments of 1978 by allowing the use of enhanced vouchers 
     for projects preserved as affordable housing under section 
     229 of the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990.
     Section 409. Enhanced disposition authority
       Amends section 204 of the FY 1997 VA/HUD Appropriations Act 
     to extend current grant and loan authority under Section 204 
     through FY 2000, expressly provide that upfront grants or 
     loans may support reconstruction as well as rehabilitation 
     and demolition, and provide that vacant as well as occupied 
     projects shall be eligible for such grants or loans.

         Title V--Mortgage Insurance For Health Care Facilities

     Section 501. Rehabilitation of existing hospitals, nursing 
         homes, and other facilities
       Allows for refinancing of hospitals and expands eligibility 
     under the program to health care facilities. Provides that 
     the cost of modest rehabilitation may be included in 
     refinancing.
     Section 502. New health care facilities
       Adds a more flexible definition of ``healthcare facility'' 
     to description of eligible projects. Eliminates licensing 
     requirements for assisted living facilities in states without 
     licensing procedures. Modifies eligibility test used as an 
     alternative to the Certificate of Need requirement under the 
     statute so that a sponsor applicant may commission an 
     independent study in defined circumstances.
     Section 503. Hospitals and hospital-based health care 
         facilities
       Changes definition of eligible ``hospital'' to eliminate 
     test that denies eligibility where more than 50% of patient 
     days are non-acute in nature. The 50% rule, especially in a 
     ``continuum of care'' environment, creates a financing void 
     for hospitals providing significant non-acute care services. 
     Modifies eligibility test used as an alternative to the 
     Certificate of Need requirement under the statute so that a 
     sponsor applicant may commission an independent study in 
     defined circumstances.
     Sectin 504. Insurance for mortgages to refinance existing 
         home equity conversion mortgages
       Allows seniors to maximize the equity in their homes by 
     streamlining the process of refinancing an existing Federal-
     insured reverse mortgage. Provides protections against 
     ``churning'' (repeated refinancing by lenders for purposes of 
     collecting fees from mortgagors) and other consumer 
     protections.

  Mr. DAVIS of Illinois. Mr. Speaker, I rise in support of H.R. 202 
because of the tremendous need which exists throughout this country for 
decent and affordable housing, especially for senior citizens. There is 
tremendous un-certainty among many seniors who are fearful that their 
housing subsidies will not exist and that they will have no place to 
live. The banking and financial services committee is to be commended 
for having worked out a bi-partisan solution which protects existing 
resident of federally assisted housing from being forced out of their 
homes when landlords choose to oft-out of federal housing subsidy 
contracts. It also modifies federal elderly and disabled housing 
programs to preserve, modernize and increase such housing and to expand 
the availability of services to elderly and disabled residents. This 
bill does in fact help preserve and enhance a program which does a 
tremendous amount of good; therefore, I am pleased to support and urge 
its adoption.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, today I rise in support of 
H.R. 202, Preserving Affordable Housing for Senior Citizens Into the 
21st Century Act. This forward thinking measure is designed to preserve 
the existing housing program for senior citizens by converting the 
financing of pre-1990 senior housing developments to a modern program 
of capital grants (i.e., converting outstanding loan balances into 
capital advances).
  Prior to 1990, senior housing developments were financed through 
direct loans and project-based rental assistance contracts. In the year 
2001, the rental assistance contracts on 215,000 housing units will 
begin to expire. According to the Census Bureau, more than 34 million 
Americans are 65 years and older. By the year 2020, that number will 
grow to almost 53 million, or one in every six Americans. What is 
particularly striking is the Department of Housing and Urban 
Development (HUD) estimate that only one-third of low-income senior 
citizens who need affordable housing actually receives assistance.
  GAO and HUD have determined that at least 1.4 million senior citizens 
are already experiencing ``worst case'' housing needs. What is even 
more alarming is that seniors are more likely than any other adults to 
be poor, and nearly 40 percent seniors not in nursing homes are limited 
by chronic conditions and unable to perform the simplest activities 
associated with independent living. Women are particularly vulnerable 
because they have lower income retirement than men and are more likely 
to live in poverty. According to the AARP, the poverty rate for elderly 
women was higher than that of men. In 1997, the poverty rate of elderly 
women was 13.1 percent, compared to 7.0 percent among men. We are on 
the horns of a dilemma: How do we meet the need for affordable housing 
for senior citizens at a time when the senior population continues to 
grow?
  H.R. 202 is designed to restructure Section 202 contracts in order to 
make them more affordable. The measure attempts to accomplish this by 
relieving non-profit entities from excessive debt service, thus 
providing the opportunity for greater program self-sufficiency. H.R. 
202 is a win-win bill that provides assistance to our most vulnerable--
the elderly poor. It also saves taxpayers money over the long term by 
reducing the need for project-based rental assistance. For these 
reasons and for America's seniors, I urge you to support H.R. 202.
  Mr. SHAYS. Mr. Speaker, I rise in support of H.R. 202, the Preserving 
Affordable Housing for Seniors and Families into the 21st Century Act.
  By making the bipartisan, common-sense reforms necessary to provide 
affordable housing for seniors and the disabled, this legislation is 
helping many individuals retain their independence while living in safe 
housing.
  There is a great need for affordable housing for seniors and the 
disabled. This important bill aims to provide affordable senior and 
disabled housing at a time when the need is high, and ever increasing.
  The General Accounting Office (GAO) and Department of Housing and 
Urban Development (HUD) have determined at least 1.4 million seniors 
are experiencing ``worst case'' housing needs. This need is combined 
with a growing senior population--projected at 53 million people by 
2020, or one in six Americans.
  Additionally, the Consortium for Citizens with Disabilities Housing 
Task Force determined more than 4 million individuals with disabilities 
suffer from an acute need of affordable, accessible housing.
  This bill requires HUD to convert all direct loan contracts for pre-
1990 projects into interest-free capital advances and five-year 
renewable project rental assistance programs. These changes are 
designed to help preserve senior and disability housing by preventing 
residents from being forced from their homes of more than 20 years or 
paying additional rent.
  These provisions are especially important steps to make housing 
affordable, given the more than 500,000 units of Section 8 housing at 
risk of being lost to ``opt outs'' as contracts expire in increasing 
numbers.
  By allowing multi-year Section 8 contract renewals, this legislation 
gives seniors and the

[[Page 22854]]

disabled the peace of mind to know that their contracts will not be at 
risk of being canceled each year. This provision is especially 
important to seniors in Connecticut who have advocated for multiple-
year renewals in order to ensure greater housing stability.
  I also support provisions to promote the use of service coordinators 
used to help elderly and disabled residents gain access to local 
community services and promote independence. This greater flexibility 
of funds--including ``enhanced vouchers'' and assisted living 
programs--will help seniors and the disabled live independently in 
safe, affordable housing and increase quality of life, while saving 
taxpayer dollars.
  In conclusion, I urge support for the Preserving Affordable Housing 
for Seniors and Families into the 21st Century. This is a bill which 
goes a long way in making smart, flexible reforms to provide safe, 
affordable housing for seniors and the disabled.
  Mr. RAMSTAD. Mr. Speaker, I rise in strong support for the bill 
before us today.
  Lack of affordable housing has an adverse effect on the most 
vulnerable in our society, namely senior citizens, children and people 
with disabilities.
  A recent HUD report noted that the number of affordable housing units 
dropped 19 percent between 1996 and 1998. Now, the central cities have 
company as far as waiting lists for subsidized housing. Ninety percent 
of Minneapolis' inner-ring suburbs have added poor children at a faster 
rate in the '90s than Minneapolis. Virtually all of the suburban cities 
I represent have waiting lists--and they are long!
  Mr. Speaker, that's why I have sought to work in a bipartisan, common 
sense way to address this critical problem and provide the necessary 
dollars to help these groups.
  And that's why I am a cosponsor and strong supporter of H.R. 425, the 
Housing Preservation Matching Grant Act. Provisions based on this 
important legislation were included in the bill before us today. This 
bipartisan legislation will provide the necessary federal matching 
funds to assist states and localities seeking to preserve federal 
housing.
  The ``Vento-Ramstad'' proposal rewards Minnesota's innovation and 
encourages other states to follow our lead.
  I urge my colleagues to support H.R. 202 and expand access to housing 
for senior citizens.
  Mr. PAUL. Mr. Speaker, I rise in opposition to H.R. 202. ``Preserving 
Housing for Senior Citizens and Families into the 21st Century.'' While 
my views on respecting our Constitution limitations regarding Federal 
issues are well known and need not be repeated here now, I have other 
concerns regarding this bill specifically.
  That the House of Representatives would consider any bill authorizing 
about a billion dollars of taxpayer funds annually on the suspension 
calendar (an expedited procedure reserved for ``non controversial'' 
bills) show how far we have moved from our posturing that we claim to 
respect the concerns of taxpayers.
  The consideration of this bill succumbs to the misperception that the 
best course of action to any perceived problem is further (Federal) 
governmental response. Clearly, that is not the case. Recently, John 
Stossel hosted an ABC television special, ``Is America Number One!'' In 
that show, he examined the premise of governmental solutions to 
problems always being best and concluded:

       Intuition would suggest that countries with the most 
     government planning, places where you're taken care of, would 
     be the best places to live. But in fact the opposite is true, 
     countries with the most planning are the most poor. Several 
     organizations rank countries by economic freedom. At one end 
     are places with lots of government planning. Invariably, 
     these are the worst places to live. At the other end on the 
     list--Hong Kong, New Zealand, Switzerland, and the United 
     States. The best places to live are places with the fewest 
     rules. Freedom isn't everything. Climate matters. Religion, 
     geography, even luck can make a difference. But nothing 
     matters as much as . . . Liberty.

  In the show, Peter Jennings said that ``Nearly 37 million Americans 
now live below the official poverty line.'' Federal Reverse economist 
Machael Cox explained, ``The government says now 13.3 percent of 
households are in poverty. Let's go see what households in poverty 
have. Ninety-seven percent of households in poverty have color 
televisions. Two thirds have microwave ovens and live in air-
conditioned buildings. Seventy-five percent have one or more cars.''
  Unfortunately, H.R. 202 makes the situation worse by diluting our 
current policy of helping the truly needy in favor of creating a middle 
class entitlement by expanding eligibility for occupancy to as high as 
80% of the area median income for existing housing developments for 
seniors. I commend Mr. Stossel for illustrating clearly that choosing 
liberty is the best path for making a difference. I wish more of my 
colleagues heeded his advise.
  Mr. CAPUANO. Mr. Speaker, I rise in strong support of H.R. 202, the 
Preserving Affordable Housing for Senior Citizens and Families Act. 
This bipartisan legislation will help save thousands of units of 
affordable housing throughout America for seniors and working families.
  H.R. 202 provides several tools to help the Department of Housing and 
Urban Development deal with the loss of affordable housing, including 
authorizing the Department of ``mark-up-to-market'' the rents of those 
Section 8 properties that would otherwise opt-out of the program. 
Preserving these units is essential in maintaining a stock of high-
quality affordable housing for future generations.
  Many times these Section 8 properties are the only housing option for 
low-income individuals. While this bill also provides enhanced vouchers 
for those tenants affected by Section 8 opt-outs, in many cities, 
including Boston, the cost of housing is so high and the vacancy rates 
are so low, vouchers are not a viable solution. Giving HUD the ability 
to keep these properties in the Section 8 program by offering these 
owners reasonable rent increases is essential to maintaining affordable 
housing in high-cost areas.
  In addition to preserving Section 8 properties, this legislation 
authorizes a commission that will study seven specific areas of concern 
related to elderly housing. One such concern is the issue of 
grandparents raising their grandchildren. It is estimated that more 
than 1.5 million children are being raised by their grandparents or 
other relatives. Many of these families live in public or subsidized 
housing in both urban and rural communities, although their unique 
needs may not be best served in these situations.
  A group in my District, Boston Aging Concerns/Young and Old United, 
has developed the first affordable housing in the country designated 
specifically for grandparents raising their grandchildren. This 
innovative development, called the Grandfamilies House, has a 
playground, computer learning center, and after-school programs to 
serve the children, as well as service coordinators, and exercise 
classes for the elderly residents.
  The staff of the Grandfamilies House has had inquiries from groups 
across the country interested in developing similar projects. It is my 
hope that the Commission will focus attention on this critical issue 
and develop recommendations to help us better serve these unique 
families.
  Mr. McCOLLUM. I rise today to voice my support for H.R. 202, the 
Preserving Housing for Seniors and Families into the 21st Century Act. 
The Banking Committee sent a strong message regarding this bill by 
passing it unanimously on a voice vote, and I stand before you today to 
reiterate its merits.
  As a Floridian, I cannot help but be acutely aware of the housing 
needs of senior citizens. Our warm weather attracts retirees to our 
state, and we appreciate them for both the contributions that they make 
to our economy and as well as to the substantial roles they play in our 
community. While medical innovations permit seniors to enjoy a higher 
quality of life, a wave of new retirees coupled with longer life-spans 
have led to a crisis in affordable housing for the elderly. By the year 
2020, the GAO estimates that one in six Americans will be 65 years of 
age or older. In Florida, that ratio has been surpassed--18.5% of the 
population is already over 65 years old and that number is growing. 
More significantly, 11.2% of Florida's senior population live below 
poverty income levels, making affordable housing even more important to 
Floridians.
  H.R. 202 addresses the needs of senior citizens by implementing 
several important measures. It allows for modernization of project 
financing and a steamlined refinancing program to encourage continued 
participation in housing projects--an extremely important goal in light 
of the number of expiring assistance contracts.
  The bill also provides for greater flexibility in programs, such as 
creating mixed-income senior and disabled housing environments, and the 
conversion of senior housing projects to assisted living facilities 
that conform with an ``aging in place'' model. This model takes the 
approach that seniors in community housing may not wish to be able to 
move as they become older. Projects can be developed that follow the 
aging of its residents, instead of forcing them out as their needs 
change.
  Mr. Speaker, again, I would like to draw my colleagues' attention to 
the bipartisan effort that went into H.R. 202, as well as the valuable 
contribution that H.R. 202 would make to the ability of our senior 
citizens across the nation to afford housing. I therefore strongly 
encourage a positive vote on the Preserving Housing for Seniors and 
Families into the 21st Century Act.

[[Page 22855]]


  Mr. MARKEY. Mr. Speaker, I rise in strong support of H.R. 202 and 
urge its adoption.
  Mr. Speaker, over the past year, I have been inundated with calls and 
letters from seniors living in Section 8 housing units where owners 
were prepaying their mortgages or opting out of their contract renewals 
thereby terminating their relationship with the Department of Housing 
and Urban Development (HUD), and leaving their senior tenants without 
any housing security.
  Following a meeting in my district office with the Mayor of Waltham, 
Massachusetts, representatives of the Boston HUD office, and other 
local officials, I wrote the following letter to Secretary Cuomo, and a 
similar letter to the Director of the Office of Management and Budget 
Jack Lew, to explain the serious problems facing seniors in Waltham and 
elsewhere in my district and throughout the nation:

                                                 January 21, 1999.
     Hon. Andrew M. Cuomo,
     Secretary, U.S. Department of Housing and Urban Development, 
         Washington, DC.
       Dear Secretary Cuomo: I am writing to ask that you give 
     full attention and high priority to the issue of Section 8 
     Contract Renewals as you review and consult with the Office 
     of Management and Budget (OMB) regarding the Administration's 
     Fiscal Year 2000 Budget Proposal. While I would like to bring 
     to your attention the specific situation confronting 258 
     seniors in my Congressional district currently housed at the 
     Francis Cabot Lowell Mill (the ``Mill'') apartment complex in 
     Waltham, Massachusetts, where a 20-year lease negotiated with 
     the Department of Housing and Urban Development (HUD) is due 
     to expire at the end of this year, I believe that the 
     problems facing residents at the Mill will confront thousands 
     of seniors across America as more of these long-term 
     contracts expire. My office has already received dozens of 
     letters and phone calls from Mill seniors who are frightened 
     at the prospect of losing their housing.
       I recently met in my district office with Mr. William F. 
     Stanley, Mayor of Waltham, Massachusetts, Ms. Mary Lou Crane, 
     HUD's Secretary's Representative for the Boston Region, Mr. 
     Bob Kargman, representing the Mill owners, their various 
     associates, and telephonically with Mr. Bill Apgar, Assistant 
     Secretary for Policy Development and Research. The focus of 
     the meeting was Public Law 105-65, Section 524(a)(1) which 
     states in part ``. . . the Secretary may use amounts 
     available for the renewal of assistance under section 8 of 
     the United States Housing Act of 1937, upon termination or 
     expiration of a contract for assistance under section 8 . . . 
     to provide assistance under section 8 of such Act at rent 
     levels that do not exceed comparable market rents for the 
     market area. The assistance shall be provided in accordance 
     with terms and conditions prescribed by the Secretary.''
       Mr. Kargman informed the group that negotiations for a new 
     lease contract had hit a snag over the issue of meeting fair 
     market rent levels, and that residents were being informed 
     that the Mill lease may not be renewed. Mayor Stanley 
     expressed his concern that given the current housing stock in 
     Waltham, it would be virtually impossible to keep all of the 
     seniors currently living at the Mill in Waltham, thus doing 
     tremendous damage to the spirit and continuity of the senior 
     population in the city. Mr. Apgar indicated that HUD was 
     empowered by law to more closely approximate comparable 
     market rent levels in Waltham, but the money was not 
     available and that discussions were under way between 
     representatives from HUD and OMB.
       As I understand it, the federal government has reaped the 
     financial benefit of housing reform in renegotiating HUD 
     leases in areas where market rents are below the national 
     average--roughly in eighty percent of markets. But for the 
     remaining twenty percent of markets, primarily markets on the 
     coasts, market rents are higher than the national average. I 
     believe that we have an obligation as policymakers to the 
     seniors living in these higher rent areas, such as those in 
     Waltham, as well as to the owners of the developments, who 
     have kept faith with their tenants and the government, to 
     renew their contract under the terms and conditions of Public 
     Law 105-65.
       I am hopeful that you will carefully examine this matter, 
     and consult with the OMB Director Lew, in an effort to 
     develop a plan to fully fund those contract renewals where 
     comparable market rents exceed the national average.
       I look forward to your response,
           Sincerely,
                                                 Edward J. Markey.

  Mr. Speaker, I want to commend my colleagues in both parties for 
bringing the House's attention to these important issues, and for 
compiling a bill that encompasses many important reforms to give 
seniors housing security. I am pleased that the bill will specifically 
address the problems created by the booming rental economy in the 
greater Boston area--seniors in subsidized housing are getting 
squeezed.
  Mr. Speaker, I am hopeful that the House will pass H.R. 202 today to 
bring much-needed reassurance to the seniors in my district and every 
Congressional District in the United States. Our seniors deserve no 
less.
  Mr. LAZIO. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Upton). The question is on the motion 
offered by the gentleman from Nebraska (Mr. Bereuter) that the House 
suspend the rules and pass the bill, H.R. 202, as amended.
  The question was taken.
  Mr. LAZIO. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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