[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.