    [United States Statutes at Large, Volume 124, 111th Congress, 2nd Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    Public Law 111-372
    111th Congress

    An Act

    To amend section 202 of the Housing Act of 1959, to improve the program
    under such section for supportive housing for the elderly, and for other
    purposes. <>

    Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled, <>
    SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) <>  Short Title.--This Act may be cited
    as the ``Section 202 Supportive Housing for the Elderly Act of 2010''.

    (b) Table of Contents.--The table of contents for this Act is as
    follows:

    Sec. 1. Short title and table of contents.

    TITLE I--NEW CONSTRUCTION REFORMS

    Sec. 101. Selection criteria.
    Sec. 102. Development cost limitations.
    Sec. 103. Owner deposits.
    Sec. 104. Definition of private nonprofit organization.
    Sec. 105. Nonmetropolitan allocation.

    TITLE II--REFINANCING

    Sec. 201. Approval of prepayment of debt.
    Sec. 202. Use of unexpended amounts.
    Sec. 203. Use of project residual receipts.
    Sec. 204. Additional provisions.

    TITLE III--ASSISTED LIVING FACILITIES AND SERVICE-ENRICHED HOUSING

    Sec. 301. Amendments to the grants for conversion of elderly housing to
    assisted living facilities.
    Sec. 302. Monthly assistance payment under rental assistance.

    TITLE IV--COMPLIANCE WITH STATUTORY PAY-AS-YOU-GO ACT OF 2010

    Sec. 401. Budgetary effects.

    TITLE I--NEW CONSTRUCTION REFORMS

    SEC. 101. SELECTION CRITERIA.

    Section 202(f)(1) of the Housing Act of 1959 (12 U.S.C. 1701q(f)(1))
    is amended--
    (1) by redesignating subparagraphs (F) and (G) as
    subparagraphs (G) and (H), respectively; and
    (2) by inserting after subparagraph (E) the following new
    subparagraph:
    ``(F) the extent to which the applicant has ensured that a
    service coordinator will be employed or otherwise retained

    [[Page 4078]]

    for the housing, who has the managerial capacity and
    responsibility for carrying out the actions described in
    subparagraphs (A) and (B) of subsection (g)(2);''.
    SEC. 102. DEVELOPMENT COST LIMITATIONS.

    Section 202(h)(1) of the Housing Act of 1959 (12 U.S.C. 1701q(h)(1))
    is amended, in the matter preceding subparagraph (A), by inserting
    ``reasonable'' before ``development cost limitations''.
    SEC. 103. OWNER DEPOSITS.

    Section 202(j)(3)(A) of the Housing Act of 1959 (12 U.S.C.
    1701q(j)(3)(A)) is amended by inserting after the period at the end the
    following: ``Such amount shall be used only to cover operating deficits
    during the first 3 years of operations and shall not be used to cover
    construction shortfalls or inadequate initial project rental assistance
    amounts.''.
    SEC. 104. DEFINITION OF PRIVATE NONPROFIT ORGANIZATION.

    Section 202(k)(4) of the Housing Act of 1959 (12 U.S.C. 1701q(k)(4))
    is amended to read as follows:
    ``(4) The term `private nonprofit organization' means--
    ``(A) any incorporated private institution or
    foundation--
    ``(i) no part of the net earnings of which
    inures to the benefit of any member, founder,
    contributor, or individual;
    ``(ii) which has a governing board--
    ``(I) the membership of which is
    selected in a manner to assure that
    there is significant representation of
    the views of the community in which such
    housing is located; and
    ``(II) which is responsible for the
    operation of the housing assisted under
    this section, except that, in the case
    of a nonprofit organization that is the
    sponsoring organization of multiple
    housing projects assisted under this
    section, the Secretary may determine the
    criteria or conditions under which
    financial, compliance and other
    administrative responsibilities
    exercised by a single-entity private
    nonprofit organization that is the owner
    corporation responsible for the
    operation of an individual housing
    project may be shared or transferred to
    the governing board of such sponsoring
    organization; and
    ``(iii) which is approved by the Secretary as
    to financial responsibility; and
    ``(B) a for-profit limited partnership the sole
    general partner of which is--
    ``(i) an organization meeting the requirements
    under subparagraph (A);
    ``(ii) a for-profit corporation wholly owned
    and controlled by one or more organizations
    meeting the requirements under subparagraph (A);
    or
    ``(iii) a limited liability company wholly
    owned and controlled by one or more organizations
    meeting the requirements under subparagraph
    (A).''.

    [[Page 4079]]

    SEC. 105. NONMETROPOLITAN ALLOCATION.

    Paragraph (3) of section 202(l) of the Housing Act of 1959 (12
    U.S.C. 1701q(l)(3)) is amended by inserting after the period at the end
    the following: ``In complying with this paragraph, the Secretary shall
    either operate a national competition for the nonmetropolitan funds or
    make allocations to regional offices of the Department of Housing and
    Urban Development.''.

    TITLE II--REFINANCING

    SEC. 201. APPROVAL OF PREPAYMENT OF DEBT.

    Subsection (a) of section 811 of the American Homeownership and
    Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended--
    (1) in the matter preceding paragraph (1), by inserting ``,
    for which the Secretary's consent to prepayment is required,''
    after ``Affordable Housing Act)'';
    (2) in paragraph (1)--
    (A) by inserting ``at least 20 years following''
    before ``the maturity date'';
    (B) by inserting ``project-based'' before ``rental
    assistance payments contract'';
    (C) by inserting ``project-based'' before ``rental
    housing assistance programs''; and
    (D) by inserting ``, or any successor project-based
    rental assistance program,'' after ``1701s))'';
    (3) by amending paragraph (2) to read as follows:
    ``(2) the prepayment may involve refinancing of the loan if
    such refinancing results in--
    ``(A) a lower interest rate on the principal of the
    loan for the project and in reductions in debt service
    related to such loan; or
    ``(B) a transaction in which the project owner will
    address the physical needs of the project, but only if,
    as a result of the refinancing--
    ``(i) the rent charges for unassisted families
    residing in the project do not increase or such
    families are provided rental assistance under a
    senior preservation rental assistance contract for
    the project pursuant to subsection (e); and
    ``(ii) the overall cost for providing rental
    assistance under section 8 for the project (if
    any) is not increased, except, upon approval by
    the Secretary to--
    ``(I) mark-up-to-market contracts
    pursuant to section 524(a)(3) of the
    Multifamily Assisted Housing Reform and
    Affordability Act (42 U.S.C. 1437f
    note), as such section is carried out by
    the Secretary for properties owned by
    nonprofit organizations; or
    ``(II) mark-up-to-budget contracts
    pursuant to section 524(a)(4) of the
    Multifamily Assisted Housing Reform and
    Affordability Act (42 U.S.C. 1437f
    note), as such section is carried out by
    the Secretary for properties owned by
    eligible owners (as such term is defined
    in section 202(k) of the

    [[Page 4080]]

    Housing Act of 1959 (12 U.S.C.
    1701q(k)); and''; and
    (4) by adding at the end the following:
    ``(3) notwithstanding paragraph (2)(A), the prepayment and
    refinancing authorized pursuant to paragraph (2)(B) involves an
    increase in debt service only in the case of a refinancing of a
    project assisted with a loan under such section 202 carrying an
    interest rate of 6 percent or lower.''.
    SEC. 202. USE OF UNEXPENDED AMOUNTS.

    Subsection (c) of section 811 of the American Homeownership and
    Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended--
    (1) by striking ``Use of Unexpended Amounts.--'' and
    inserting ``Use of Proceeds.--'';
    (2) by amending the matter preceding paragraph (1) to read
    as follows: ``Upon execution of the refinancing for a project
    pursuant to this section, the Secretary shall ensure that
    proceeds are used in a manner advantageous to tenants of the
    project, or are used in the provision of affordable rental
    housing and related social services for elderly persons that are
    tenants of the project or are tenants of other HUD-assisted
    senior housing by the private nonprofit organization project
    owner, private nonprofit organization project sponsor, or
    private nonprofit organization project developer, including--'';
    (3) by amending paragraph (1) to read as follows:
    ``(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, except that upon the request of the non-profit owner,
    sponsor, or organization and determination of the Secretary,
    such 15 percent limitation may be waived to ensure that the use
    of unexpended amounts better enables seniors to age in place;'';
    (4) in paragraph (2), by inserting before the semicolon the
    following; ``, including reducing the number of units by
    reconfiguring units that are functionally obsolete,
    unmarketable, or not economically viable'';
    (5) in paragraph (3), by striking ``or'' at the end;
    (6) in paragraph (4), by striking ``according to a pro rata
    allocation of shared savings resulting from the refinancing.''
    and inserting a semicolon; and
    (7) by adding at the end the following new paragraphs:
    ``(5) rehabilitation of the project to ensure long-term
    viability; and
    ``(6) the payment to the project owner, sponsor, or third
    party developer of a developer's fee in an amount not to exceed
    or duplicate--
    ``(A) in the case of a project refinanced through a
    State low income housing tax credit program, the fee
    permitted by the low income housing tax credit program
    as calculated by the State program as a percentage of
    acceptable development cost as defined by that State
    program; or
    ``(B) in the case of a project refinanced through
    any other source of refinancing, 15 percent of the
    acceptable development cost.

    [[Page 4081]]

    For purposes of paragraph (6)(B), the term `acceptable development cost'
    shall include, as applicable, the cost of acquisition, rehabilitation,
    loan prepayment, initial reserve deposits, and transaction costs.''.
    SEC. 203. USE OF PROJECT RESIDUAL RECEIPTS.

    Paragraph (1) of section 811(d) of the American Homeownership and
    Economic Opportunity Act of 2000 (12 U.S.C. 1701q note) is amended--
    (1) by striking ``not more than 15 percent of''; and
    (2) by inserting before the period at the end the following:
    ``or other purposes approved by the Secretary''.
    SEC. 204. ADDITIONAL PROVISIONS.

    Section 811 of the American Homeownership and Economic Opportunity
    Act of 2000 (12 U.S.C. 1701q note) is amended by adding at the end the
    following new subsections:
    ``(e) Senior Preservation Rental Assistance Contracts.--
    Notwithstanding any other provision of law, in connection with a
    prepayment plan for a project approved under subsection (a) by the
    Secretary or as otherwise approved by the Secretary to prevent
    displacement of elderly residents of the project in the case of
    refinancing or recapitalization and to further preservation and
    affordability of such project, the Secretary shall provide project-based
    rental assistance for the project under a senior preservation rental
    assistance contract, as follows:
    ``(1) Assistance under the contract shall be made available
    to the private nonprofit organization owner--
    ``(A) for a term of at least 20 years, subject to
    annual appropriations; and
    ``(B) under the same rules governing project-based
    rental assistance made available under section 8 of the
    Housing Act of 1937 or under the rules of such
    assistance as may be made available for the project.
    ``(2) Any projects for which a senior preservation rental
    assistance contract is provided shall be subject to a use
    agreement to ensure continued project affordability having a
    term of the longer of (A) the term of the senior preservation
    rental assistance contract, or (B) such term as is required by
    the new financing.

    ``(f) Subordination or Assumption of Existing Debt.--In lieu of
    prepayment under this section of the indebtedness with respect to a
    project, the Secretary may approve--
    ``(1) in connection with new financing for the project, the
    subordination of the loan for the project under section 202 of
    the Housing Act of 1959 (as in effect before the enactment of
    the Cranston-Gonzalez National Affordable Housing Act) and the
    continued subordination of any other existing subordinate debt
    previously approved by the Secretary to facilitate preservation
    of the project as affordable housing; or
    ``(2) the assumption (which may include the subordination
    described in paragraph (1)) of the loan for the project under
    such section 202 in connection with the transfer of the project
    with such a loan to a private nonprofit organization.

    ``(g) Flexible Subsidy Debt. <> --The
    Secretary shall waive the requirement that debt for a project pursuant
    to the flexible subsidy program under section 201 of the Housing and
    Community Development Amendments of 1978 (12 U.S.C. 1715z-1a) be prepaid
    in

    [[Page 4082]]

    connection with a prepayment, refinancing, or transfer under this
    section of a project if the financial transaction or refinancing cannot
    be completed without the waiver.

    ``(h) Tenant Involvement in Prepayment and Refinancing.--The
    Secretary shall not accept an offer to prepay the loan for any project
    under section 202 of the Housing Act of 1959 unless the Secretary--
    ``(1) has determined that the owner of the project has
    notified the tenants of the owner's request for approval of a
    prepayment; and
    ``(2) has determined that the owner of the project has
    provided the tenants with an opportunity to comment on the
    owner's request for approval of a prepayment, including on the
    description of any anticipated rehabilitation or other use of
    the proceeds from the transaction, and its impacts on project
    rents, tenant contributions, or the affordability restrictions
    for the project, and that the owner has responded to such
    comments in writing.

    ``(i) Definition of Private Nonprofit Organization.--For purposes of
    this section, the term `private nonprofit organization' has the meaning
    given such term in section 202(k) of the Housing Act of 1959 (12 U.S.C.
    1701q(k)).''.

    TITLE III--ASSISTED LIVING FACILITIES AND SERVICE-ENRICHED HOUSING

    SEC. 301. AMENDMENTS TO THE GRANTS FOR CONVERSION OF ELDERLY
    HOUSING TO ASSISTED LIVING FACILITIES.

    (a) Technical Amendment.--The section heading for section 202b of
    the Housing Act of 1959 (12 U.S.C. 1701q-2) is amended by inserting
    ``and other purposes'' after ``assisted living facilities''.
    (b) Extension of Grant Authority.--Section 202b(a)(2) of the Housing
    Act of 1959 (12 U.S.C. 1701q-2(a)(2)) is amended--
    (1) by striking ``(2) Conversion.--Activities'' and
    inserting the following:
    ``(2) Conversion.--
    ``(A) Assisted living facilities.--Activities''; and
    (2) by adding at the end the following:
    ``(B) Service-enriched housing.--Activities designed
    to convert dwelling units in the eligible project to
    service-enriched housing for elderly persons.''.

    (c) Amendment to Application Process.--Section 202b(c)(1) of the
    Housing Act of 1959 (12 U.S.C. 1701q-2(c)(1)) is amended by inserting
    ``for either an assisted living facility or service-enriched housing''
    after ``activities''.
    (d) Requirements for Services.--Section 202b(d) of the Housing Act
    of 1959 (12 U.S.C. 1701q-2(d)) is amended to read as follows:
    ``(d) Requirements for Services.--
    ``(1) Sufficient evidence of firm funding commitments.--The
    Secretary may not make a grant under this section for conversion
    activities unless an application for a grant submitted pursuant
    to subsection (c) contains sufficient evidence, in the
    determination of the Secretary, of firm commitments for the
    funding of services to be provided in the assisted

    [[Page 4083]]

    living facility or service-enriched housing, which may be
    provided by third parties.
    ``(2) Required evidence.--The Secretary shall require
    evidence that each recipient of a grant for service-enriched
    housing under this section provides relevant and timely
    disclosure of information to residents or potential residents of
    such housing relating to--
    ``(A) the services that will be available at the
    property to each resident, including--
    ``(i) the right to accept, decline, or choose
    such services and to have the choice of provider;
    ``(ii) the services made available by or
    contracted through the grantee;
    ``(iii) the identity of, and relevant
    information for, all agencies or organizations
    providing any services to residents, which
    agencies or organizations shall provide
    information regarding all procedures and
    requirements to obtain services, any charges or
    rates for the services, and the rights and
    responsibilities of the residents related to those
    services;
    ``(B) the availability, identity, contact
    information, and role of the service coordinator; and
    ``(C) such other information as the Secretary
    determines to be appropriate to ensure that residents
    are adequately informed of the services options
    available to promote resident independence and quality
    of life.''.

    (e) Amendments to Selection Criteria.--Section 202b(e) of the
    Housing Act of 1959 (12 U.S.C. 1701q-2(e)) is amended--
    (1) in paragraph (2)--
    (A) by inserting ``or service-enriched housing''
    after ``facilities''; and
    (B) by inserting ``service-enriched housing'' after
    ``facility'';
    (2) in paragraph (5), by inserting ``or service-enriched
    housing'' after ``facility''; and
    (3) in paragraph (6), by inserting ``or service-enriched
    housing'' after ``facility''.

    (f) Amendments to Section 8 Project-based Assistance.--Section
    202b(f) of the Housing Act of 1959 (12 U.S.C. 1701q-2(f)) is amended--
    (1) in paragraph (1), by inserting ``or service-enriched
    housing'' after ``facilities'' each time that term appears; and
    (2) in paragraph (2), by inserting ``or service-enriched
    housing'' after ``facility''.

    (g) Amendments to Definitions.--Section 202b(g) of the Housing Act
    of 1959 (12 U.S.C. 1701q-2(g)) is amended to read as follows:
    ``(g) Definitions.--For 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
    (1715w(b));
    ``(2) the term `service-enriched housing' means housing
    that--
    ``(A) makes available through licensed or certified
    third party service providers supportive services to
    assist the residents in carrying out activities of daily
    living, such as bathing, dressing, eating, getting in
    and out of bed

    [[Page 4084]]

    or chairs, walking, going outdoors, using the toilet,
    laundry, home management, preparing meals, shopping for
    personal items, obtaining and taking medication,
    managing money, using the telephone, or performing light
    or heavy housework, and which may make available to
    residents home health care services, such as nursing and
    therapy;
    ``(B) includes the position of service coordinator,
    which may be funded as an operating expense of the
    property;
    ``(C) provides separate dwelling units for
    residents, each of which contains a full kitchen and
    bathroom and which includes common rooms and other
    facilities appropriate for the provision of supportive
    services to the residents of the housing; and
    ``(D) provides residents with control over health
    care and supportive services decisions, including the
    right to accept, decline, or choose such services, and
    to have the choice of provider; and
    ``(3) <>  the definitions in section
    1701(q)(k) of this title shall apply.''.
    SEC. 302. MONTHLY ASSISTANCE PAYMENT UNDER RENTAL ASSISTANCE.

    Clause (iii) of section 8(o)(18)(B) of the United States Housing Act
    of 1937 (42 U.S.C. 1437f(o)(18)(B)(iii)) is amended by inserting before
    the period at the end the following: ``, except that a family may be
    required at the time the family initially receives such assistance to
    pay rent in an amount exceeding 40 percent of the monthly adjusted
    income of the family by such an amount or percentage that is reasonable
    given the services and amenities provided and as the Secretary deems
    appropriate.''.

    TITLE IV--COMPLIANCE WITH STATUTORY PAY-AS-YOU-GO ACT OF 2010

    SEC. 401. BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying with
    the Statutory Pay-As-You-Go-Act of 2010, shall be determined by
    reference to the latest statement titled ``Budgetary Effects of PAYGO
    Legislation'' for this Act, submitted for printing in the

    [[Page 4085]]

    Congressional Record by the Chairman of the Senate Budget Committee,
    provided that such statement has been submitted prior to the vote on
    passage.

    Approved January 4, 2011.

    LEGISLATIVE HISTORY--S. 118:
    ---------------------------------------------------------------------------

    CONGRESSIONAL RECORD, Vol. 156 (2010):
    Dec. 18, considered and passed Senate.
    Dec. 21, considered and passed House.