[Congressional Record (Bound Edition), Volume 154 (2008), Part 6]
[Senate]
[Pages 7680-7685]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. REID (for himself and Mrs. Feinstein):
  S. 2970. A bill to enhance the ability of drinking water utilities in 
the United States to develop and implement climate change adaptation 
programs and policies, and for other purposes; to the Committee on 
Environment and Public Works.
  Mr. REID. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being on objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2970

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Climate Change Drinking 
     Water Adaptation Research Act.''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the consensus among climate scientists is overwhelming 
     that climate change is occurring more rapidly than can be 
     attributed to natural causes, and that significant impacts to 
     the water supply are already occurring;
       (2) among the first and most critical of those impacts will 
     be change to patterns of precipitation around the world, 
     which will affect water availability for the most basic 
     drinking water and domestic water needs of populations in 
     many areas of the United States;
       (3) drinking water utilities throughout the United States, 
     as well as those in Europe, Australia, and Asia, are 
     concerned that extended changes in precipitation will lead to 
     extended droughts;
       (4) supplying water is highly energy-intensive and will 
     become more so as climate change forces more utilities to 
     turn to alternative supplies;
       (5) energy production consumes a significant percentage of 
     the fresh water resources of the United States;
       (6) since 2003, the drinking water industry of the United 
     States has sponsored, through a nonprofit water research 
     foundation, various studies to assess the impacts of climate 
     change on drinking water supplies;
       (7) those studies demonstrate the need for a comprehensive 
     program of research into the full range of impacts on 
     drinking water utilities, including impacts on water 
     supplies, facilities, and customers;
       (8) that nonprofit water research foundation is also 
     coordinating internationally with other drinking water 
     utilities on shared research projects and has hosted 
     international workshops with counterpart European and Asian 
     water research organizations to develop a unified research 
     agenda for applied research on adaptive strategies to address 
     climate change impacts;
       (9) research data in existence as of the date of enactment 
     of this Act--
       (A) summarize the best available scientific evidence on 
     climate change;
       (B) identify the implications of climate change for the 
     water cycle and the availability and quality of water 
     resources; and
       (C) provide general guidance on planning and adaptation 
     strategies for water utilities; and
       (10) given uncertainties about specific climate changes in 
     particular areas, drinking water utilities need to prepare 
     for a wider range of likely possibilities in managing and 
     delivery of water.

[[Page 7681]]



     SEC. 3. RESEARCH ON THE EFFECTS OF CLIMATE CHANGE ON DRINKING 
                   WATER UTILITIES.

       (a) In General.--The Administrator of the Environmental 
     Protection Agency, in cooperation with the Secretary of 
     Commerce, the Secretary of Energy, and the Secretary of the 
     Interior, shall establish and provide funding for a program 
     of directed and applied research, to be conducted through a 
     nonprofit water research foundation and sponsored by drinking 
     water utilities, to assist suppliers of drinking water in 
     adapting to the effects of climate change.
       (b) Research Areas.--The research conducted in accordance 
     with subsection (a) shall include research into--
       (1) water quality impacts and solutions, including 
     research--
       (A) to address probable impacts on raw water quality 
     resulting from--
       (i) erosion and turbidity from extreme precipitation 
     events;
       (ii) watershed vegetation changes; and
       (iii) increasing ranges of pathogens, algae, and nuisance 
     organisms resulting from warmer temperatures; and
       (B) on mitigating increasing damage to watersheds and water 
     quality by evaluating extreme events, such as wildfires and 
     hurricanes, to learn and develop management approaches to 
     mitigate--
       (i) permanent watershed damage;
       (ii) quality and yield impacts on source waters; and
       (iii) increased costs of water treatment;
       (2) impacts on groundwater supplies from carbon 
     sequestration, including research to evaluate potential water 
     quality consequences of carbon sequestration in various 
     regional aquifers, soil conditions, and mineral deposits;
       (3) water quantity impacts and solutions, including 
     research--
       (A) to evaluate climate change impacts on water resources 
     throughout hydrological basins of the United States;
       (B) to improve the accuracy and resolution of climate 
     change models at a regional level;
       (C) to identify and explore options for increasing 
     conjunctive use of aboveground and underground storage of 
     water; and
       (D) to optimize operation of existing and new reservoirs in 
     diminished and erratic periods of precipitation and runoff;
       (4) infrastructure impacts and solutions for water 
     treatment facilities and underground pipelines, including 
     research--
       (A) to evaluate and mitigate the impacts of sea level rise 
     on--
       (i) near-shore facilities;
       (ii) soil drying and subsidence; and
       (iii) reduced flows in water and wastewater pipelines; and
       (B) on ways of increasing the resilience of existing 
     infrastructure and development of new design standards for 
     future infrastructure;
       (5) desalination, water reuse, and alternative supply 
     technologies, including research--
       (A) to improve and optimize existing membrane technologies, 
     and to identify and develop breakthrough technologies, to 
     enable the use of seawater, brackish groundwater, treated 
     wastewater, and other impaired sources;
       (B) into new sources of water through more cost-effective 
     water treatment practices in recycling and desalination; and
       (C) to improve technologies for use in--
       (i) managing and minimizing the volume of desalination and 
     reuse concentrate streams; and
       (ii) minimizing the environmental impacts of seawater 
     intake at desalination facilities;
       (6) energy efficiency and greenhouse gas minimization, 
     including research--
       (A) on optimizing the energy efficiency of water supply and 
     improving water efficiency in energy production; and
       (B) to identify and develop renewable, carbon-neutral 
     energy options for the water supply industry;
       (7) regional and hydrological basin cooperative water 
     management solutions, including research into--
       (A) institutional mechanisms for greater regional 
     cooperation and use of water exchanges, banking, and 
     transfers; and
       (B) the economic benefits of sharing risks of shortage 
     across wider areas;
       (8) utility management, decision support systems, and water 
     management models, including research--
       (A) into improved decision support systems and modeling 
     tools for use by water utility managers to assist with 
     increased water supply uncertainly and adaptation strategies 
     posed by climate change;
       (B) to provide financial tools, including new rate 
     structures, to manage financial resources and investments, 
     because increased conservation practices may diminish revenue 
     and increase investments in infrastructure; and
       (C) to develop improved systems and models for use in 
     evaluating--
       (i) successful alternative methods for conservation and 
     demand management; and
       (ii) climate change impacts on groundwater resources;
       (9) reducing greenhouse gas emissions and energy demand 
     management, including research to improve energy efficiency 
     in water collection, production, transmission, treatment, 
     distribution, and disposal to provide more sustainability and 
     means to assist drinking water utilities in reducing the 
     production of greenhouse gas emissions in the collection, 
     production, transmission, treatment, distribution, and 
     disposal of drinking water;
       (10) water conservation and demand management, including 
     research--
       (A) to develop strategic approaches to water demand 
     management that offer the lowest-cost, noninfrastructural 
     options to serve growing populations or manage declining 
     supplies, primarily through--
       (i) efficiencies in water use and reallocation of the saved 
     water;
       (ii) demand management tools;
       (iii) economic incentives; and
       (iv) water-saving technologies; and
       (B) into efficiencies in water management through 
     integrated water resource management that incorporates--
       (i) supply-side and demand-side processes;
       (ii) continuous adaptive management; and
       (iii) the inclusion of stakeholders in decisionmaking 
     processes; and
       (11) communications, education, and public acceptance, 
     including research--
       (A) into improved strategies and approaches for 
     communicating with customers, decisionmakers, and other 
     stakeholders about the implications of climate change on 
     water supply; and
       (B) to develop effective communication approaches to gain--
       (i) public acceptance of alternative water supplies and new 
     policies and practices, including conservation and demand 
     management; and
       (ii) public recognition and acceptance of increased costs.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $25,000,000 for 
     each of fiscal years 2009 through 2019.
                                 ______
                                 
      By Mr. REID (for Ms. Landrieu (for herself, Mr. Cochran and Mr. 
        Wicker)):
  S. 2975. A bill to provide additional funds for affordable housing 
for low-income seniors, disabled persons, and others who lost their 
homes as a result of Hurricanes Katrina and Rita; to the Committee on 
Banking, Housing, and Urban Affairs.
  Ms. LANDRIEU. Mr. President, I come to the floor today to speak on 
behalf of some of our most in need gulf coast residents impacted by 
Hurricanes Katrina and Rita. As you know the gulf coast was devastated 
in 2005 by two of the most powerful storms to ever hit the U.S. in 
recorded history--Hurricanes Katrina and Rita. We also experienced the 
unprecedented disaster of having a major metropolitan city--the City of 
New Orleans--under up to 20 feet of water for two weeks when there were 
28 separate levee failures which flooded 12,000 acres, or 80 percent of 
New Orleans, following Katrina.
  In particular, I am speaking on behalf of our elderly and disabled 
residents impacted by these disasters. Many of these people are too 
frail or fragile to live on their own, yet they do not belong in a 
hospital. We have many people who been in seen homes or apartments for 
disabled and elderly residents, for adults who are not older but 
instead disabled through an accident or injury. In many cities, this 
type of housing is run by such organizations as Catholic Charities or 
other nonprofits. Right now in the gulf coast region, we desperately 
need more of this type of housing to take care of the most fragile 
people who either are without shelter or are without safe, affordable 
shelter with appropriate supportive services. One can imagine the 
challenges of providing sufficient housing for this group under normal 
circumstances. But here we find ourselves, dealing with the aftermath 
of a catastrophe, trying to provide additional housing for thousands of 
people now returning to the region.
  According to the Congressional Research Service, 88,000 persons aged 
65 or older were displaced by Hurricane Katrina--of that group 45,000 
were 75 years of age or older. Furthermore, almost 15 percent of all 
displaced seniors had incomes below the poverty line. While recovery 
has primarily focused on restoring owner-occupied and rental housing, 
U.S. Department of Housing and Urban Development, HUD, assisted housing 
for our elderly and disabled residents has not received a great deal of 
attention. In particular, 123 properties of Section 202 housing, which 
serves elderly residents, and Section 811 housing, which serves 
disabled residents, were impacted by Hurricanes Katrina and Rita in my 
State alone. This includes 5,261 total units of 202/811

[[Page 7682]]

housing. As of February 2008, 602 of these units were still offline and 
I am aware that, for every unit of 202 housing, there are 10 eligible 
low-income seniors on the waiting list.
  To further highlight the ongoing needs of the gulf coast, let me 
provide a snapshot of one community in my State--New Orleans East. In 
our Vietnamese community in New Orleans East, 6,000 people--or 
approximately 95 percent of the pre-Katrina population--have returned 
to the area. Of this 6,000, it is estimated that 2,400 are seniors. The 
average age of these seniors is 72 years of age and 98 percent are 
considered extremely low-income according to HUD standards. This means 
that they earn below 30 percent of the area median income a year, or 
less than $12,550 a year. Of these seniors 82 percent receive 
supplemental security income as their only source of income--
approximately $637 per month for a single household.
  Prior to Katrina, there were six retirement communities in New 
Orleans East, consisting of about 735 units, serving this community. 
Presently none of them are in operation. This is not just a short-term 
recovery problem as the demand for age-restricted housing will continue 
to increase in the next few years, particularly in New Orleans East.
  Given the ongoing needs in the southern part of my State in regard to 
damaged multifamily and senior/disabled housing, as well as all across 
the Gulf Coast, I am proud to introduce today the Gulf Coast 
Multifamily and Assisted Housing Recovery Act of 2008. I am joined on 
this bill by my colleagues Senator Thad Cochran and Senator Roger 
Wicker. This legislation includes some key provisions which should 
target assistance where it is most needed. The bill will also help to 
cut through some Federal red tape stalling redevelopment efforts in the 
region.
  To address the affordable housing needs in my State, as well as 
across the gulf coast, our bill authorizes $125 million for additional 
Section 202 housing and $75 million for new Section 811 housing. This 
provision would create almost 1,500 new 202/811 units. The bill would 
also authorize $4 million to cover gaps for the redevelopment of former 
Section 202 housing in the City of New Orleans and St. Bernard Parish.
  Another major problem in New Orleans East is that 50 seniors were 
living pre-Katrina at Versailles Arms, a project-based Section 8 
housing development which has not reopened. I understand that a few 
weeks ago the community boarded up the development. While this property 
is sitting vacant--but vacant with a project-based contract still 
attached to it--Mary Queen of Viet Nam Community Development 
Corporation, MQVN, and Providence Community Housing have begun work on 
Phase I of the Mary Queen of Viet Nam Retirement Community. This 
project would provide 84 units of affordable senior housing. Their 
problem, however, is with the downturn in the tax credit market in the 
last 4 months, the equity investment will not be sufficient to cover 
the development costs. For example, the current rent structure, which 
is below the market rates, is not sufficient to support a mortgage to 
cover the development gap, so they are in need of a project-based 
subsidy to complete the project.
  MQVN have been trying to work with our local housing authority, the 
Housing Authority of New Orleans, HANO, to secure project-based 
assistance for this project. However, as many of our developers have 
discovered, HANO has exhausted its 20 percent maximum set aside for 
project-based subsidies. This is troubling for those of us in Congress, 
especially for my colleagues and I who are members of the Senate 
Appropriations Committee. Last year, via the fiscal year 08 
Supplemental Appropriations bill, we provided HANO with additional 
vouchers by allowing HUD to utilize pre-Katrina population figures in 
allocating Section 8 vouchers, rather than post-Katrina population 
figures. While there certainly are increased demands for such 
assistance, the fact that so many developments are in need of this type 
of assistance and that HANO lacks the necessary resources to fully 
address needs on the ground raises many questions. For my part, I do 
not have all the answers but I can provide a commonsense solution to 
address the need for project-based assistance in New Orleans and the 
rest of the gulf coast.
  Each year, in the Transportation, Housing and Urban Development 
Appropriations bill, there has regularly been legislative authority for 
HUD to transfer some or all project-based assistance associated with 
one or more multifamily housing projects to another multifamily housing 
project or projects. In the fiscal year 06 Appropriations bill, Public 
Law 109-115, Section 318 addressed this issue, and in the fiscal year 
08 Omnibus Appropriations bill, Public Law 110-161, which passed the 
Congress in December 2007, this language was contained in Section 215. 
While this language is discretionary, not mandatory, it does provide 
HUD with the legislative authority to transfer project-based assistance 
from a damaged or vacant property to another property, with certain 
restrictions. However, as I mentioned, this annual language is 
discretionary so HUD is not required to review and approve transfer 
requests. This has proven to be the main obstacle for housing 
organizations. Some of these properties have been destroyed and, rather 
than asking for new project-based contracts, the developers simply want 
to transfer the existing ones to new buildings. This would maximize 
existing resources, and in many cases, could help communities build 
housing which could better resist future disasters.
  While HUD currently has this transfer authority, there have been 
numerous instances post-Katrina where HUD has failed to quickly 
implement such transfers. For example, Mississippi Methodist Senior 
Services, MMSS, is a nonprofit which, despite testifying before 
Congress last year, ended up having its Section 318 transfer request 
rejected by HUD. It subsequently lost 65 units of elderly housing. This 
is even more troubling as MMSS was the first non-profit in Mississippi 
to provide affordable housing for seniors. So this is a group with 
extensive experience in senior housing--one with deep roots in the 
community. The nonprofit had seven properties throughout the State, 
serving 1,800 seniors daily. One of its properties in Biloxi had 
significant wind damage and suffered 2 feet of Gulf water on the first 
floor. Upon further inspection, there was additional damage found and 
their insurance company determined it would only cover repairs on the 
first floor. This left MMSS with an uninhabitable building and a $1 
million gap between insurance and the amount that was necessary for 
repairs.
  To redevelop the property and provide badly needed housing, MMSS 
intended to transfer the 65 units of project-based assistance to a new 
site further inland. The new site would be in a better position to 
avoid gulf coast waves and weather patterns. As with most gulf coast 
groups in this situation, MMSS submitted a Section 318 request and 
started working with HUD to prepay the existing mortgage, sell the 
property, and transfer the Section 8 contract. However, in December 
2006, HUD eventually refused the transfer, forcing MMSS to abandon the 
contract and sell the property. This resulted in the loss of housing 
for 65 elderly families. Our observation of these failures has led us 
to believe there is a need for Congress to enact stronger legislation 
on this issue.
  To address this issue, the legislation I am introducing would tackle 
this problem in three important ways. First, this bill would require 
HUD to maintain project-based contracts in declared Katrina and Rita 
areas until the date specified in the contract or not less than 3 
months after the property is made habitable. This provision would 
ensure that there is no loss of current project-based contracts. Next, 
the bill would require HUD to review and approve any feasible transfer 
proposal made by owners of damaged/destroyed multifamily housing. The 
language in this bill tracks Section 215 language from the fiscal year 
08 Omnibus, except that we limit this requirement for Alabama, 
Mississippi, and Louisiana and sunset it on October 1, 2009. These 
restrictions are to ensure that it is

[[Page 7683]]

strictly for recovery purposes. Lastly, to get a full picture of the 
number of units that may have been lost, the bill requires that HUD 
report to Congress on the number and location of project-based 
contracts which have been cancelled since the storms. These key 
provisions would make a real difference not only for MQVN in New 
Orleans East but for countless providers of multifamily housing across 
the gulf coast.
  As chairman of the Homeland Security Subcommittee on Disaster 
Recovery, I have been working with my Senate colleagues to push for 
better Federal Government disaster preparedness. Therefore, in addition 
to addressing current needs on the gulf coast, the bill also looks 
forward to future disasters. This bill requires that, not later than 
June 1, 2008--the start of the 2008 Atlantic Hurricane season--that HUD 
provide Congress with a disaster response plan for HUD-assisted Section 
202/811 properties. A number of recommendations have been made to HUD 
by the affordable housing community on regulatory waivers and funding 
gaps that the agency will face in future disaster situations. There is 
no reason that HUD, or Congress for that matter, should have to expend 
future resources, time, and energy to address some of the similar 
issues which this bill is attempting to address for Katrina and Rita 
areas. Lessons learned from Katrina and Rita have been well documented 
by Congress. It is now time that HUD improves its preparedness and 
response to disasters which could impact assisted properties.
  In closing, let me reiterate that this bill addresses one of the most 
fundamental needs following a disaster: the need to return home. For 
our elderly and disabled residents, a safe and affordable home is even 
more essential. Many gulf coast residents lost homes, family members, 
and pets, among other things. It is our obligation as a city, county/
parish, State, and as a nation to help. So I am here today, for my 
part, to try to put forward legislation which I strongly believe will 
make a real difference for those most in need in the gulf coast region. 
I urge my colleagues to support this bipartisan recovery legislation as 
these disaster victims are counting on the United States Senate for 
action.
  Mr. President, I ask unanimous consent that the text of the bill and 
supplemental material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2975

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Gulf Coast Multifamily and 
     Assisted Housing Recovery Act''.

     SEC. 2. ADDITIONAL SUPPORT FOR HOUSING LOW-INCOME ELDERLY 
                   PERSONS.

       Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) is 
     amended by adding at the end the following:
       ``(n) Additional Support for Low-Income Elderly Persons 
     Displaced by Hurricanes Katrina and Rita.--
       ``(1) In general.--In addition to any amounts authorized 
     under subsection (m), for fiscal year 2009 there is 
     authorized to be appropriated $125,000,000 to the Secretary 
     to provide assistance pursuant to this section to private 
     nonprofit organizations and consumer cooperatives to expand 
     the supply of supportive housing for low-income elderly 
     persons--
       ``(A) who on August 28, 2005, for Hurricane Katrina and 
     September 24, 2005, for Hurricane Rita, were residents in a 
     designated disaster area;
       ``(B) whose primary residence--
       ``(i) was significantly damaged by Hurricane Katrina or 
     Hurricane Rita or by flooding resulting from Hurricane 
     Katrina or Hurricane Rita; or
       ``(ii) is uninhabitable as a result of damage or flooding 
     resulting from Hurricane Katrina or Hurricane Rita, including 
     uninhabitability resulting from lack of electricity, water, 
     or other services due to such damage or flooding; and
       ``(C) who cannot, in the discretion of the Secretary, 
     afford to rebuild such residence.
       ``(2) Allocation of funds.--Of the amounts authorized to be 
     appropriated under paragraph (1), the Secretary shall 
     allocate--
       ``(A) $55,000,000 to the State of Louisiana;
       ``(B) $50,000,000 to the State of Mississippi; and
       ``(C) $20,000,000 to the State of Alabama.
       ``(3) Definition.--As used in this subsection, the term 
     `designated disaster area' means any area in the States of 
     Alabama, Mississippi, and Louisiana that was the subject of a 
     disaster declaration by the President under title IV of the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5121 et seq.) in response to Hurricanes 
     Katrina and Rita of 2005.''.

     SEC. 3. ADDITIONAL SUPPORT FOR LOW-INCOME PERSONS WITH 
                   DISABILITIES.

       Section 811 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 8013) is amended by adding at the end 
     the following:
       ``(o) Additional Support for Low-Income Persons With 
     Disabilities Displaced by Hurricanes Katrina and Rita.--
       ``(1) In general.--In addition to any amounts authorized 
     under subsection (m), for fiscal year 2009 there is 
     authorized to be appropriated $75,000,000 to the Secretary to 
     provide assistance pursuant to this section to private, 
     nonprofit organizations to expand the supply of supportive 
     housing for persons with disabilities--
       ``(A) who on August 28, 2005, for Hurricane Katrina and 
     September 24, 2005, for Hurricane Rita, were residents in a 
     designated disaster area;
       ``(B) whose primary residence--
       ``(i) was significantly damaged by Hurricane Katrina or 
     Hurricane Rita or by flooding resulting from Hurricane 
     Katrina or Hurricane Rita; or
       ``(ii) is uninhabitable as a result of damage or flooding 
     resulting from Hurricane Katrina or Hurricane Rita, including 
     uninhabitability resulting from lack of electricity, water, 
     or other services due to such damage or flooding; and
       ``(C) who cannot, in the discretion of the Secretary, 
     afford to rebuild such residence.
       ``(2) Allocation of funds.--Of the amounts authorized to be 
     appropriated under paragraph (1), the Secretary shall 
     allocate--
       ``(A) $35,000,000 to the State of Louisiana;
       ``(B) $25,000,000 to the State of Mississippi; and
       ``(C) $15,000,000 to the State of Alabama.
       ``(3) Definition.--As used in this subsection, the term 
     `designated disaster area' means any area in the States of 
     Alabama, Mississippi, and Louisiana that was the subject of a 
     disaster declaration by the President under title IV of the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5121 et seq.) in response to Hurricanes 
     Katrina and Rita of 2005.''.

     SEC. 4. TARGETED HOUSING SUPPORT FOR LOW-INCOME ELDERLY 
                   PERSONS IN NEW ORLEANS AND ST. BERNARD PARISH.

       There is authorized to be appropriated for the 
     redevelopment (rebuilding or replacement) of housing 
     authorized under section 202 of the Housing Act of 1959 (12 
     U.S.C. 1701q) which was damaged or destroyed as a result of 
     Hurricane Katrina of 2005--
       (1) $2,500,000 to the City of New Orleans; and
       (2) $1,500,000 to the Parish of St. Bernard.

     SEC. 5. USE OF BUDGET-BASED RENT INCREASES FOR SECTION 202 
                   AND 811 PROJECTS IN A DESIGNATED DISASTER AREA.

       (a) Section 202.--Section 202 of the Housing Act of 1959 
     (12 U.S.C. 1701q), as amended by section 2, is further 
     amended by adding at the end the following:
       ``(o) Approval of Rent Increases.--
       ``(1) In general.--The Secretary shall annually adjust the 
     rent levels on a budget-based basis of eligible projects to 
     support the increased cost of operating or rehabilitating 
     such projects.
       ``(2) Conditions.--Rent adjustments pursuant to this 
     section shall--
       ``(A) be subject to adjustment by the Secretary based on 
     differences between estimated and actual costs of operating 
     or rehabilitating such projects; and
       ``(B) not exceed the rent for comparable unassisted units 
     in the area.
       ``(3) Definitions.--As used in this section--
       ``(A) the term `eligible project' means a project that is--
       ``(i) assisted under subsection (c)(2); and
       ``(ii) located in a designated disaster area; and
       ``(B) the term `designated disaster area' means any area in 
     the States of Alabama, Mississippi, and Louisiana that was 
     the subject of a disaster declaration by the President under 
     title IV of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5121 et seq.) in response 
     to Hurricanes Katrina and Rita of 2005.''.
       (b) Section 811.--Section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 8013), as amended 
     by section 2, is further amended by adding at the end the 
     following:
       ``(p) Approval of Rent Increases.--
       ``(1) In general.--The Secretary shall annually adjust the 
     rent levels on a budget-based basis of eligible projects to 
     support the increased cost of operating or rehabilitating 
     such projects.
       ``(2) Conditions.--Rent adjustments pursuant to this 
     section shall--
       ``(A) be subject to adjustment by the Secretary based on 
     differences between estimated and actual costs of operating 
     or rehabilitating such projects; and
       ``(B) not exceed the rent for comparable unassisted units 
     in the area.
       ``(3) Definitions.--As used in this section--
       ``(A) the term `eligible project' means a project that is--

[[Page 7684]]

       ``(i) assisted under subsection (d)(2); and
       ``(ii) located in a designated disaster area; and
       ``(B) the term `designated disaster area' means any area in 
     the States of Alabama, Mississippi, and Louisiana that was 
     the subject of a disaster declaration by the President under 
     title IV of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5121 et seq.) in response 
     to Hurricanes Katrina and Rita of 2005.''.

     SEC. 6. PRESERVATION AND PROVISION OF PROJECT-BASED HOUSING 
                   FOR AFFORDABLE HOUSING UNITS DAMAGED OR 
                   DESTROYED BY HURRICANES KATRINA OR RITA.

       (a) Report on Terminated Project-Based Contracts in 
     Designated Disaster Area.--Not later than 45 days after the 
     date of enactment of this Act, the Secretary of Housing and 
     Urban Development shall provide a report to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives detailing--
       (1) information on the number of project-based assistance 
     contracts and units which were terminated in the designated 
     disaster area after September 30, 2005;
       (2) information on the specific developer, project name, 
     location, number of units, and project description for each 
     project-based assistance contract which was terminated in the 
     designated disaster area after September 2005; and
       (3) such additional information as the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives shall reasonably require.
       (b) Tolling of Contract Term.--
       (1) In general.--Notwithstanding any other provision of 
     law, a project-based assistance payments contract for a 
     covered assisted multifamily housing project shall not expire 
     or be terminated because of the damage or destruction of 
     dwelling units in the project as a result of Hurricane 
     Katrina or Hurricane Rita.
       (2) Expiration date.--The expiration date of the contract 
     for a covered assisted multifamily housing project described 
     under paragraph (1) shall be deemed to be the later of--
       (A) the date specified in the contract; or
       (B) the date that is not less than 3 months after the 
     dwelling units in such project, or in a replacement project, 
     are first made habitable.
       (c) Owner Proposals for Reuse or Resiting of Affordable 
     Units.--Pursuant to section 215 of title II of division K of 
     Public Law 110-161 (121 Stat. 2433), the Secretary of Housing 
     and Urban Development shall, not later than October 1, 2009, 
     promptly review and approve--
       (1) any feasible proposal made by the owner of a covered 
     assisted multifamily housing project submitted to the 
     Secretary that provides for the rehabilitation of such 
     project and the resumption of use of the project-based 
     assistance under the contract for such project; or
       (2) the transfer, subject to the conditions established 
     under section 215(b) of title II of division K of Public Law 
     110-161, of the contract for such covered assisted 
     multifamily housing project, or in the case of a covered 
     assisted multifamily housing project with an interest 
     reduction payments contract, of the remaining budget 
     authority under the contract, to a receiving project or 
     projects.
       (d) Definitions.--For purposes of this section--
       (1) the term ``covered assisted multifamily housing 
     project'' means housing that--
       (A) meets one of the conditions established in section 
     215(c)(2) of title II of division K of Public Law 110-161;
       (B) was damaged or destroyed by Hurricane Katrina or 
     Hurricane Rita of 2005; and
       (C) is located in an area in the States of Alabama, 
     Mississippi, and Louisiana that was the subject of a disaster 
     declaration by the President under title IV of the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act (42 
     U.S.C. 5121 et seq.) in response to Hurricane Katrina or 
     Hurricane Rita of 2005;
       (2) the term ``designated disaster area'' means any area in 
     the States of Alabama, Mississippi, and Louisiana that was 
     the subject of a disaster declaration by the President under 
     title IV of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5121 et seq.) in response 
     to Hurricanes Katrina and Rita of 2005;
       (3) the term ``project-based assistance'' has the same 
     meaning as in section 215(c)(3) of title II of division K of 
     Public Law 110-161; and
       (4) the term ``receiving project or projects'' has the same 
     meaning as in section 215(c)(4) of title II of division K of 
     Public Law 110-161.

     SEC. 7. HOUSING DISASTER PLAN.

       Not later than June 1, 2008, the Secretary of Housing and 
     Urban Development shall--
       (1) develop a written disaster response plan for federally-
     assisted properties, including for properties that receive 
     assistance pursuant to--
       (A) section 202 of the Housing Act of 1959 (12 U.S.C. 
     1701q); and
       (B) section 811 of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 8013); and
       (2) submit such plan to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives.
                                 ______
                                 

       Two Years After the Storm: Housing Needs in the Gulf Coast

                          (By Mr. Alan Brown)


                              Introduction

       Chairman Dodd, Ranking Member Shelby and members of the 
     Committee, I want to thank you for the opportunity to testify 
     today. I am Alan Brown, the Vice President of Operations and 
     Chief Operating Officer of Mississippi Methodist Senior 
     Services (MMSS). Mississippi Methodist Senior Services has 11 
     campuses across the state of Mississippi and we serve 1,800 
     seniors on a daily basis. Our organization was one of the 
     first in Mississippi to provide HUD housing for seniors and 
     have been for 40 years. Currently, seven of our campuses have 
     HUD subsidized housing communities, serving very low-income 
     seniors.
       Our organization is a member of the American Association of 
     Homes and Services for the Aging (AAHSA), a 5,700 member 
     association representing not-for-profit providers throughout 
     the continuum of senior care: adult day services, home 
     health, community services, senior housing, assisted living 
     residences, continuing care retirement communities, and 
     nursing homes. AAHSA members serve as many as two million 
     people every day through mission-driven, not-for-profit 
     organizations dedicated to providing the services people 
     need, when they need them, in the place they call home.


              Demographics and Need of Seniors in the Gulf

       A Congressional Research Service report from November 2005 
     found that the ``the aged may have been especially affected 
     by Katrina'' and estimated that 88,000 persons age 65 or 
     older were displaced by the storm and of those, 45,000 were 
     75 and older. Almost 15% of all displaced seniors had incomes 
     below the poverty line. Approximately 48% of the displaced 
     seniors reported having at least one disability, and 26% 
     reported two or more types of disabilities, including those 
     that require an array of supportive and health services.
       An estimated 70% of seniors throughout the Gulf owned their 
     own homes and most had lived in their homes for 20 or more 
     years. Among the elderly renters that were living in 
     unsubsidized housing, 55% had lived in their rental 
     properties over 20 years. According to HUD there are 1,054 
     assisted properties, over 47,000 units, in the areas affected 
     by the hurricanes. Of the assisted properties, 228 are 
     Section 202 elderly housing communities with almost 11,000 
     units. Among those, one hundred properties, with 12,559 units 
     suffered severe damage. Seniors need these affordable, 
     supportive housing communities to be restored and functional 
     before they can return to the Gulf.


           Mississippi Methodist Senior Services' Experience

       On August 29, 2005, five of our campuses were damaged by 
     Hurricane Katrina. Our Seashore Retirement Community campus 
     in Biloxi, MS received the most damage. Seashore was located 
     on Beach Blvd. (Hwy 90) and consisted of 124 market rate 
     apartments, 42 assisted living units and a 65 unit HUD 202 
     project with project based Section 8 rental subsidies. All of 
     the buildings had substantial damage but none more so than 
     the HUD building, Gulf Oaks Manor. In addition to significant 
     wind damage, Gulf Oaks had 2 feet of gulf water on the first 
     floor. Fifty-five of our residents refused to leave the 
     campus and rode out the storm with the campus Executive 
     Director who refused to leave them. We were able to evacuate 
     them on August 31, 2005 and provided housing on our other 
     campuses in North Mississippi.
       MMSS had what we considered to be good, comprehensive 
     insurance coverage, including flood overage. We immediately 
     began the process of restoring the campus. We deployed 
     resources from across the state and within three weeks had a 
     complete damage assessment of the property. We were able to 
     restore the market rate buildings and assisted living units 
     by mid October. Little did we know that our challenges with 
     our HUD 202 project were just beginning.
       Inspections of the HUD building revealed that there was 
     water damage on the upper floors in addition to the flood 
     damage on the first floor. The heat and humidity following 
     the hurricane coupled with days of no utilities and air flow 
     had created a major mold problem. After weeks of inspections 
     and professional opinions, our insurance carrier determined 
     that the damage on the upper floors was pre-existing, not 
     related to the hurricane and would not be a covered loss. Our 
     insurance coverage would only cover the repairs to the first 
     floor. MMSS was left with an uninhabitable building and a $1-
     million dollar gap between what the insurance covered and 
     what it would take to repair the building. In our initial 
     conversations with HUD representatives about how we could 
     solve this problem, we were told that:
       HUD would not loan MMSS the money to cover the insurance 
     gap;
       MMSS would not be permitted to borrow money from any other 
     source;
       HUD would not forgive any of the debt in our original 
     Section 202 loan;
       HUD would not allow MMSS to prepay the mortgage.

[[Page 7685]]

       In spite of these restrictions, HUD informed us that they 
     did not want to lose the assisted housing units. The 
     Department recommended that MMSS find a buyer for the damaged 
     property and stated that any new buyer must continue the 
     property as a 202 project.
       In addition, to our discussions with HUD to save the 
     property, MMSS researched additional resources to meet the 
     funding gap to repair the property. Our FEMA request for help 
     was denied because we were classified as a ``non-essential 
     service.'' With that status, we were advised to seek a Small 
     Business Administration loan, an option that was not 
     available to us because of our HUD financing. Essentially, we 
     had no options.
       Eventually, we contacted the American Association of Homes 
     and Services for the Aging (AAHSA) and asked for help. AAHSA 
     immediately contacted senior HUD officials who made us aware 
     of a provision in the FY2006 appropriations legislation, 
     Section 318, which allowed for the relocation of project 
     based Section 8 contracts from non-viable, obsolete HUD 
     projects that had been damaged to new buildings. It seemed to 
     us that the provision was tailor made for our situation and 
     many other hurricane damaged properties. In March 2006, I met 
     with Hank Williams, Deputy Assistant Secretary for 
     Multifamily Housing and he encouraged us to apply for a 
     Section 318 transfer.
       On March 31, 2006, we notified our Mississippi HUD office 
     that we would be requesting a Section 318 transfer of the 
     project-based Section 8 contract and provided our initial 
     responses to the Section 318 requirements. About this time, 
     we received an unsolicited offer from a local developer to 
     purchase the entire campus. We accepted, contingent upon our 
     being able to obtain a relocation or release for the property 
     from HUD. We believed it was in the best interest of our 
     residents to build a new campus further inland that would not 
     be affected by future hurricanes. This offer would also give 
     us the opportunity to rebuild the HUD building in a safer 
     location at no additional cost to HUD. We planned to have a 
     new campus with a new HUD building and we could restore 65 
     subsidized apartments for seniors on the Gulf Coast which had 
     been in existence since 1984.
       On July 5, 2006, we submitted our formal Section 318 
     request to HUD headquarters, outlining our plan and asked HUD 
     for dialogue on how we could make this happen. Weeks passed 
     and we heard nothing from HUD. On August 8, 2006, we once 
     again contacted AAHSA staff and asked for their help. On 
     August 17, 2006 AAHSA had a series of conversations with a 
     senior HUD staff member who assured them they were going to 
     make this happen. On August 29, 2006, after no contact from 
     HUD, we contacted Senator Thad Cochran's office and asked for 
     help. Our business interruption insurance coverage was ending 
     and financially we were fading fast. We needed to complete 
     this process to save the HUD project as well as the entire 
     campus. Senator Cochran's staff responded immediately and HUD 
     assured them that we were a priority. Weeks passed with no 
     response from HUD. At times when MMSS would request an update 
     from HUD, we were told that they were not sure what desk it 
     was on. On one occasion we were told they were waiting 
     because we did not send a hard copy of our paperwork and they 
     only had an electronic copy. We had submitted a hard copy and 
     it was electronically elevated by HUD staff according to 
     their own protocol. Senator Cochran's staff intervened again 
     in mid-September. They were assured our application was in 
     process.
       On October 2, 2007, more than six months after our 
     notification of intent to pursue a Section 318 project based 
     Section 8 transfer and almost three months after our formal 
     request was submitted to HUD headquarters, we received a 
     letter form HUD notifying us that our Section 318 request had 
     been denied. I have attached correspondence outlining things 
     that would have to be done for the request to be 
     reconsidered. The items had not been communicated to us 
     previously and were either economically infeasible or 
     incapable of being completed for many months. At this point 
     our request had been denied, our insurance coverage was 
     exhausted and we were in jeopardy of losing the sale of the 
     entire property.
       Throughout this process the Jackson, Mississippi HUD office 
     was very helpful. Thanks to that office we learned that our 
     contract, a pre-1984 HUD 202 contract, could actually be pre-
     paid with 30 days notice and without HUD approval. After much 
     consideration, we felt this was our only option to continue 
     providing senior housing on the Gulf Coast. However, we 
     wanted to make one last effort to save the 65 Section 8 rent 
     subsidies and transfer them to a new building. We notified 
     HUD of our intent to pay-off the 202 mortgage and they gave 
     us the process to follow, including the notification letter 
     that we needed to send former residents to notify them of the 
     sale. In numerous phone conversations with HUD officials in 
     Washington, D.C., we repeatedly asked for permission to 
     transfer the Section 8 rental subsidies to a new building so 
     we could preserve those subsidies and continue serving low-
     income residents at the new property. HUD informed us that it 
     had never been done before and despite having the legal 
     authority, they would have to get a legal opinion and call us 
     back. The next day they called back and told us the Section 8 
     subsidies could be moved and they would let us know the 
     process. We were ecstatic that this would allow us to restore 
     the low income units on the Gulf Coast and most importantly, 
     offer our previous residents a chance to return to MMSS on 
     the new campus.
       As we got closer to closing on the sale, HUD notified us 
     that the letter used to notify residents of the property sale 
     did not use the correct language. We reminded HUD that we had 
     used the exact letter that they had provided. Just before 
     closing, we inquired again about the process for moving the 
     Section 8 subsidies to a new building as HUD had said we 
     could do. We were told that HUD never agreed to that and that 
     the subsidies had to stay with the damaged building. In the 
     end, despite their insistence that HUD was committed to 
     preserving units and having the authority to transfer the 
     contract to a new, safer building, HUD essentially forced 
     USSM to give up project based Section 8 contract to complete 
     the sale of the campus. More disturbing, HUD had done what 
     the hurricane had not even been able to do, permanently 
     displace those residents that rode out the storm in their 
     homes.

                          ____________________