To establish a National Housing Trust Fund in the Treasury of the United States to provide for the development of decent, safe, and affordable housing for low-income families, and for other purposes.

July 25, 2001

Mr. KERRY (for himself, Mr. CHAFEE, Mr. REED, Mr. JEFFORDS, Mr. SARBANES, Mr. LEAHY, Mr. WELLSTONE, Mr. DAYTON, Mrs. FEINSTEIN, Mr. LEVIN, Mr. SCHUMER, Mr. DURBIN, Ms. STABENOW, Mrs. BOXER, Mr. KENNEDY, Mr. CORZINE, and Mr. DODD) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To establish a National Housing Trust Fund in the Treasury of the United States to provide for the development of decent, safe, and affordable housing for low-income families, 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.

This Act may be cited as the `National Affordable Housing Trust Fund Act of 2001'.

SEC. 2. PURPOSES.

The purposes of this Act are--

(1) to fill the growing gap in the national ability to build affordable housing by using profits generated by Federal housing programs to fund additional housing activities, and not supplant existing housing appropriations;

(2) to enable rental housing to be built for those families with the greatest need in areas with the greatest opportunities in mixed-income settings and to promote homeownership for low-income families; and

(3) to provide for approximately 1,500,000 additional affordable, low-income housing units over the next 10 years.

SEC. 3. DEFINITIONS.

(a) DEFINITIONS- In this Act:

(1) ADJUSTED INCOME- The term `adjusted income' has the same meaning as in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).

(2) AFFORDABLE HOUSING- The term `affordable housing' means housing for rental that bears rents not greater than the lesser of--

(A) the existing fair market rent for comparable units in the area, as established by the Secretary under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f); or

(B) a rent that does not exceed 30 percent of the adjusted income of a family whose income equals 65 percent of the median income for the area, as determined by the Secretary, with an adjustment for the number of bedrooms in the unit, except that the Secretary may establish income ceilings higher or lower than 65 percent of the median for the area on the basis of the findings of the Secretary that such variations are necessary because of the prevailing levels of construction costs or fair market rents, or unusually high or low family incomes.

(3) CONTINUED ASSISTANCE RENTAL SUBSIDY PROGRAM- The term `continued assistance rental subsidy program' means a program under which--

(A) project-based assistance is provided for not more than 3 years to a family in an affordable housing unit that was developed with assistance made available under subsection (b) or (c) of section 5 in a project that partners with a public housing agency, which agency agrees to provide the assisted family with a priority for the receipt of a voucher under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)) if the family chooses to move after an initial year of occupancy and the public housing agency agrees to refer eligible voucher holders to the property when vacancies occur; and

(B) after 3 years, subject to appropriations, continued assistance is provided under section 8(o) of the United States Housing Act of 1937 (42 U.S.C.

1437f(o)), notwithstanding any provision to the contrary in that section, if administered to provide families with the option of continued assistance with tenant-based vouchers, if such a family chooses to move after an initial year of occupancy and the public housing agency agrees to refer eligible voucher holders to the property when vacancies occur.

(4) ELIGIBLE ACTIVITIES- The term `eligible activities' means activities relating to the development of affordable housing, including--

(A) the construction of new housing;

(B) the acquisition of real property;

(C) site preparation and improvement, including demolition;

(D) substantial rehabilitation of existing housing; and

(E) rental subsidy, in the same manner as voucher assistance under section 8(o)(13) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)).

(5) ELIGIBLE ENTITY- The term `eligible entity' includes any public or private nonprofit or for-profit entity, unit of local government, regional planning entity, and any other entity engaged in the development of affordable housing, as determined by the Secretary.

(6) ELIGIBLE INTERMEDIARY- The term `eligible intermediary' means--

(A) a nonprofit community development corporation;

(B) a community development financial institution (as defined in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702));

(C) a State or local trust fund;

(D) any entity eligible for assistance under section 4 of the HUD Demonstration Act of 1993 (42 U.S.C. 9816 note);

(E) a national, regional, or statewide nonprofit organization; and

(F) any other appropriate nonprofit entity, as determined by the Secretary.

(7) EXTREMELY LOW-INCOME FAMILIES- The term `extremely low-income families' means very low-income families (as defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)) whose incomes do not exceed 30 percent of the median family income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may establish income ceilings higher or lower than 30 percent of the median for the area on the basis of the findings of the Secretary that such variations are necessary because of unusually high or low family incomes.

(8) LOW-INCOME FAMILIES- The term `low-income families' has the same meaning as in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).

(9) SECRETARY- The term `Secretary' means the Secretary of Housing and Urban Development.

(10) STATE- The term `State' has the same meaning as in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).

SEC. 4. NATIONAL HOUSING TRUST FUND.

(a) ESTABLISHMENT OF TRUST FUND- There is established in the Treasury of the United States a trust fund to be known as the `National Affordable Housing Trust Fund' (referred to in this Act as the `Trust Fund') for the purpose of promoting the development of affordable housing.

(b) DEPOSITS TO THE TRUST FUND- For fiscal year 2002, and each fiscal year thereafter, there is appropriated to the Trust Fund an amount equal to the sum of--

(1) any revenue generated by the Mutual Mortgage Insurance Fund of the Federal Housing Administration in excess of the amount necessary for the Mutual Mortgage Insurance Fund to maintain a capital ratio of 3 percent for the preceding fiscal year; and

(2) any revenue generated by the Government National Mortgage Association in excess of the amount necessary to pay the administrative costs and expenses necessary to ensure the safety and soundness of the Government National Mortgage Association for the preceding fiscal year, as determined by the Secretary.

(c) EXPENDITURES FROM THE TRUST FUND- For fiscal year 2002, and each fiscal year thereafter, amounts appropriated to the Trust Fund shall be available to the Secretary of Housing and Urban Development for use in accordance with section 5.

SEC. 5. ADMINISTRATION OF NATIONAL AFFORDABLE HOUSING TRUST FUND.

(a) ALLOCATION TO STATES AND ELIGIBLE INTERMEDIARIES- For fiscal year 2002, and each fiscal year thereafter, of the total amount made available to the Secretary from the Trust Fund under section 4(c), the Secretary shall allocate--

(1) 75 percent to award grants to States in accordance with subsection (b) of this section; and

(2) 25 percent to award grants to eligible intermediaries in accordance with subsection (c) of this section.

(b) GRANTS TO STATES-

(1) IN GENERAL- Subject to paragraph (2) of this subsection, from the amount made available for each fiscal year under subsection (a)(1), the Secretary shall award grants to States, in accordance with an allocation formula established by the Secretary, that is based on the pro rata share of each State of the total need among all States for an increased supply of affordable housing, as determined on the basis of--

(A) the number and percentage of families in the State that live in substandard housing;

(B) the number and percentage of families in the State that pay more than 50 percent of their annual income for housing costs;

(C) the number and percentage of persons living at or below the poverty level in the State;

(D) the cost of developing or carrying out substantial rehabilitation of housing in the State;

(E) the age of the multifamily housing stock in the State; and

(F) such other factors as the Secretary determines to be appropriate.

(2) GRANT AMOUNT-

(A) IN GENERAL- The amount of a grant award to a State under this subsection shall be equal to the lesser of--

(i) 4 times the amount of assistance provided by the State from non-Federal sources; and

(ii) the allocation determined in accordance with paragraph (1).

(B) NON-FEDERAL SOURCES- For purposes of this section, non-Federal sources shall include--

(i) 50 percent of the funds allocable to tax credits allocated under section 42 of the Internal Revenue Code of 1986;

(ii) 50 percent of the revenue from mortgage revenue bonds issued under section 143 of the Internal Revenue Code of 1986;

(iii) 50 percent of the proceeds from the sale of tax exempt bonds;

(iv) funds provided under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.); and

(v) such other sources as the Secretary determines to be appropriate.

(3) AWARD OF STATE ALLOCATION TO CERTAIN ENTITIES-

(A) IN GENERAL- If the amount provided by a State from non-Federal sources is less than 25 percent of the amount that would be awarded to the State under this subsection

based on the allocation formula described in paragraph (1), not later than 60 days after the date on which the Secretary determines that the State is not eligible for the full allocation determined under paragraph (1), the Secretary shall issue a notice regarding the availability of the funds for which the State is ineligible.

(B) APPLICATIONS- Not later than 9 months after the date of publication of a notice of funding availability under subparagraph (A), a nonprofit or public entity (or a consortium thereof, which may include units of local government working together on a regional basis) may submit to the Secretary an application for the available assistance or a portion of the available assistance, which application shall include--

(i) a certification that the applicant will provide assistance in an amount equal to 25 percent of the amount of assistance made available to the applicant under this paragraph; and

(ii) an allocation plan that meets the requirements of paragraph (4)(B) for use or distribution in the State of any assistance made available to the applicant under this paragraph and the assistance provided by the applicant for purposes of clause (i).

(C) AWARD OF ASSISTANCE- The Secretary shall award the amount that is not awarded to a State by operation of paragraph (2) to 1 or more applicants that meet the requirements of subparagraph (B) of this paragraph and that are selected by the Secretary based on selection criteria, which shall be established by the Secretary by regulation.

(4) DISTRIBUTION TO ELIGIBLE ENTITIES-

(A) IN GENERAL- Of the amount that a State receives under a grant award under this subsection and the assistance provided by the State from non-Federal sources for purposes of paragraph (2)(A) to eligible entities for the purpose of assisting those entities in carrying out eligible activities in the State, each State shall distribute--

(i) not less than 75 percent to eligible entities for eligible activities relating to the development of affordable housing for rental by extremely low-income families in the State; and

(ii) any amount remaining after a distribution under clause (i) to eligible entities for eligible activities in a census tract described in subsection (c)(3)(B)(ii)(II) relating to the development of affordable housing for rental by low-income families in the State, or for homeownership assistance for low-income families in the State.

(B) ALLOCATION PLAN- Each State shall have, after giving notice to the public, an opportunity for public comment and consideration of public comments received, and shall establish an allocation plan for the distribution of assistance under this paragraph, which shall be submitted to the Secretary and shall be made available to the public by the State, and which shall include--

(i) application requirements for eligible entities seeking to receive assistance under this paragraph, including a requirement that each application include--

(I) a certification by the applicant that any housing developed with assistance under this paragraph will remain affordable for extremely low-income families or low-income families, as applicable, for not less than 40 years;

(II) a certification by the applicant that the tenant contribution towards rent for a family residing in a unit developed with assistance under this paragraph will not exceed 30 percent of the adjusted income of that family; and

(III) a certification by the applicant that the owner of a project in which any housing developed with assistance under this paragraph is located will make a percentage of units in the project available to families assisted under the voucher program under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)), either by means of a contract with a public housing agency under paragraph (13) of that section or on the same basis as other families eligible for the housing (except that only the expected share of rent of the voucher holder shall be considered, and the screening criteria of the owner shall not have a disparate impact on the voucher holder), which percentage shall not be less than the percentage of the total cost of developing or rehabilitating the project that is funded with assistance under this paragraph, or 25 percent of the total units in the project, whichever is lower; and

(ii) factors for consideration in selecting among applicants that meet the application requirements, which shall give preference to applicants based on--

(I) the amount of assistance for the eligible activities leveraged by the applicant from private and other non-Federal sources, including assistance made available under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) that is devoted to the project in which the housing to be developed with assistance under this paragraph is located;

(II) the extent of local assistance that will be provided in carrying out the eligible activities, including--

(aa) financial assistance; and

(bb) the extent to which the applicant has worked with the unit of local government in which the housing will be located to address issues of siting and exclusionary zoning or other policies that are barriers to affordable housing;

(III) the degree to which the development in which the housing will be located is mixed-income;

(IV) whether the housing will be located in a census tract in which the poverty rate is less than 20 percent;

(V) whether the housing will be located in a community undergoing revitalization;

(VI) the accessibility of jobs, including lower skilled jobs, to the project;

(VII) the extent to which the applicant demonstrates the ability to maintain units as affordable for extremely low-income or low-income families, as applicable, through the use of assistance made available under this paragraph, assistance leveraged from non-Federal sources, assistance made available under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f), State or local assistance, programs to increase tenant income, cross-subsidization, and any other resources; and

(VIII) whether the development will house families that need not fewer than 3 bedrooms or provide accessible units for the disabled, unless the allocation plan indicates that the State does not have a significant need for those types of units.

(C) FORMS OF ASSISTANCE-

(i) IN GENERAL- Assistance distributed under this paragraph may be in the form of capital grants, non-interest bearing or low-interest loans or advances, deferred payment loans, guarantees, and any other form of assistance approved by the Secretary.

(ii) REPAYMENTS- If a State awards assistance under this paragraph in the form of a loan or other mechanism by which funds are later repaid to the State, any repayments received by the State shall be distributed by the State in accordance with the allocation plan described in subparagraph (B) in the following fiscal year.

(D) COORDINATION WITH OTHER ASSISTANCE- In distributing assistance under this paragraph, each State shall, to the maximum extent practicable, coordinate the distribution with the provision of other affordable housing assistance by the State, including--

(i) housing credit dollar amounts allocated by the State under section 42(h) of the Internal Revenue Code of 1986;

(ii) assistance made available under the HOME Investment Partnerships Act or the community development block grant program; and

(iii) private activity bonds.

(c) NATIONAL COMPETITION-

(1) IN GENERAL- From the amount made available for each fiscal year under subsection (a)(2), the Secretary shall award grants on a competitive basis to eligible intermediaries, which shall be used in accordance with paragraph (3) of this subsection.

(2) APPLICATION REQUIREMENTS AND SELECTION CRITERIA- The Secretary, by regulation, shall establish application requirements and selection criteria for the award of competitive grants to eligible intermediaries under this subsection, which criteria shall include--

(A) the ability of the eligible intermediary to meet the housing needs of low-income families on a national or regional scope;

(B) the capacity of the eligible intermediary to use the grant award in accordance with paragraph (3), based on the past performance and management of the applicant; and

(C) the extent to which the eligible intermediary has leveraged funding from private and other non-Federal sources for the eligible activities.

(3) USE OF GRANT AWARD-

(A) IN GENERAL- Except as provided in subparagraph (B), each eligible intermediary that receives a grant award under this subsection shall ensure that, of the amount made available under the grant--

(i) 75 percent shall be used for eligible activities relating to the development of affordable housing for rental by extremely low-income families; and

(ii) 25 percent shall be used for eligible activities relating to the development of affordable housing for rental by low-income families, or for homeownership assistance for low-income families.

(B) EXCEPTION-

(i) IN GENERAL- If the amount made available under this subsection is used for a project described in clause (ii), subject to the requirements of subparagraph (A)(i), an eligible intermediary may use the grant amount for eligible activities relating to the development of housing for rental by families whose incomes are less than 60 percent of the area median income, and for homeownership activities for families whose incomes are less than 80 percent of the area median income.

(ii) PROJECT CONTRIBUTING TO A CONCERTED COMMUNITY REVITALIZATION PLAN- A project is described in this clause if--

(I) it is located in a community undergoing concerted revitalization and is contributing to a community revitalization plan; and

(II) it is located in a census tract in which--

(aa) the median household income is less than 60 percent of the area median income; or

(bb) the rate of poverty is greater than 20 percent.

(C) PLAN OF USE- Each eligible intermediary that receives a grant award under this subsection shall establish a plan for the use or distribution of the amount made available under the grant, which shall be submitted to the Secretary, and which shall include information relating to the manner in which the eligible intermediary will either use or distribute that amount, including--

(i) a certification that assistance made available under this subsection will be used to supplement assistance leveraged from private and other non-Federal sources, including assistance made available under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) that is devoted to the project in which the housing to be developed is located;

(ii) a certification that local assistance will be provided in carrying out the eligible activities, which may include--

(I) financial assistance; and

(II) a good faith effort to work with the unit of local government in which the housing will be located to address issues of siting and exclusionary zoning or other policies that are barriers to affordable housing;

(iii) a certification that any housing developed with assistance under this subsection will remain affordable for extremely low-income families or low-income families, as applicable, for not less than 40 years;

(iv) a certification that any housing developed by the applicant with assistance under this subsection will be located--

(I) in a mixed-income development in a census tract having a poverty rate of not more than 20 percent, and near employment and other opportunities for low-income families; or

(II) in a community undergoing revitalization;

(v) a certification that the tenant contribution towards rent for a family residing in a unit developed with assistance under this paragraph will not exceed 30 percent of the adjusted income of that family; and

(vi) a certification by the applicant that the owner of a project in which any housing developed with assistance under this subsection is located will make a percentage of units in the project available to families assisted under the voucher program under section 8(o) of the United States Housing Act of 1937 (42 U.S.C.

1437f(o)), either by means of a contract with a public housing agency under paragraph (13) of that section or on the same basis as other families eligible for the housing (except that only the expected share of rent of the voucher holder shall be considered, and the screening criteria of the owner shall not have a disparate impact on the voucher holder), which percentage shall not be less than the percentage of the total cost of developing or rehabilitating the project that is funded with assistance under this subsection, or 25 percent of the total units in the project, whichever is lower.

(D) FORMS OF ASSISTANCE-

(i) IN GENERAL- An eligible intermediary may distribute the amount made available under a grant under this subsection in the form of capital grants, non-interest bearing or low-interest loans or advances, deferred payment loans, guarantees, and other forms of assistance.

(ii) REPAYMENTS- If an eligible intermediary awards assistance under this subsection in the form of a loan or other mechanism by which funds are later repaid to the eligible intermediary, any repayments received by the eligible intermediary shall be distributed by the eligible intermediary in accordance with the plan of use described in subparagraph (C) in the following fiscal year.

(d) TREATMENT UNDER THE INTERNAL REVENUE CODE-

(1) IN GENERAL- Assistance provided under this Act with respect to any building shall not be taken into account under section 42(i)(2)(D) of the Internal Revenue Code of 1986, if 40 percent or more of the residential units in the building are occupied by individuals whose income is 50 percent or less of the area median gross income. Section 42(d)(5)(C) of that Code shall not apply to any building to which the preceding sentence applies.

(2) SPECIAL RULE FOR CERTAIN HIGH-COST HOUSING AREAS- In the case of a building located in a city described in section 142(d)(6) of the Internal Revenue Code of 1986, paragraph (1) shall be applied by substituting `25 percent' for `40 percent'.

SEC. 6. REGULATIONS.

Not later than 6 months after the date of enactment of this Act, the Secretary of Housing and Urban Development shall promulgate regulations to carry out this Act, including requirements relating to the reporting and collection of information necessary to enforce the provisions of this Act.

SEC. 7. FEDERAL FINANCIAL ASSISTANCE.

For the purpose of applying the prohibitions against discrimination on the basis of age under the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), on the basis of disability under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), on the basis of sex under title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), or on the basis of race, color, or national origin under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), programs and activities funded or otherwise financially assisted in whole or in part under this Act are considered to be programs and activities receiving Federal financial assistance, and education programs and activities receiving Federal financial assistance.

END