To authorize the Secretary of Housing and Urban Development to make grants to States to supplement State assistance for the preservation of affordable housing for low-income families.

May 25, 2005

Mr. NADLER (for himself, Mr. SANDERS, Mr. OBERSTAR, Mr. GEORGE MILLER of California, Mr. MCDERMOTT, Ms. SCHAKOWSKY, Ms. VELAZQUEZ, Mr. CUMMINGS, Mr. CLEAVER, Mr. RANGEL, Ms. EDDIE BERNICE JOHNSON of Texas, Ms. SLAUGHTER, Ms. ESHOO, and Mr. STARK) introduced the following bill; which was referred to the Committee on Financial Services

To authorize the Secretary of Housing and Urban Development to make grants to States to supplement State assistance for the preservation of affordable housing for low-income families.

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 `Housing Preservation Matching Grant Act of 2005'.

SEC. 2. PURPOSE.

It is the purpose of this Act--

(1) to promote the preservation of affordable housing units by providing matching grants to States that have developed and funded programs for the preservation of privately owned housing that is affordable to low-income families and persons and was produced for such purpose with Federal assistance;

(2) to minimize the involuntary displacement of tenants who are currently residing in such housing, many of whom are elderly or disabled persons; and

(3) to continue the partnerships among the Federal Government, State and local governments, and the private sector in operating and assisting housing that is affordable to low-income Americans.

SEC. 3. AUTHORITY.

The Secretary of Housing and Urban Development shall, to the extent amounts are made available pursuant to section 11, make grants under this Act to States for low-income housing preservation.

SEC. 4. USE OF GRANTS.

(a) In General- Amounts from grants under this Act may be used only for assistance for acquisition, preservation incentives, operating costs, and capital expenditures for a housing project that meets the requirements under subsection (b), (c), or (d).

(b) Projects With HUD-Insured Mortgages- A project meets the requirements under this subsection only if--

(1) the project is financed by a loan or mortgage that is--

(A) insured or held by the Secretary under section 221(d)(3) of the National Housing Act and receiving loan management assistance under section 8 of the United States Housing Act of 1937 due to a conversion from section 101 of the Housing and Urban Development Act of 1965;

(B) insured or held by the Secretary and bears interest at a rate determined under the proviso of section 221(d)(5) of the National Housing Act;

(C) insured, assisted, or held by the Secretary or a State or State agency under section 236 of the National Housing Act; or

(D) held by the Secretary and formerly insured under a program referred to in subparagraph (A), (B), or (C);

(2) the project is subject to an unconditional waiver of, with respect to the mortgage referred to in paragraph (1)--

(A) all rights to any prepayment of the mortgage; and

(B) all rights to any voluntary termination of the mortgage insurance contract for the mortgage; and

(3) the owner of the project has entered into binding commitments (applicable to any subsequent owner) to extend all low-income affordability restrictions for the project, including any such restrictions imposed because of any contract for project-based assistance for the project.

(c) Projects With Section 8 Project-Based Assistance- A project meets the requirements under this subsection only if--

(1) the project is subject to a contract for project-based assistance; and

(2) the owner of the project has entered into binding commitments (applicable to any subsequent owner) to extend such assistance for the maximum period allowable under law (subject to the availability of amounts for such purpose) and to extend any low-income affordability restrictions applicable to the project in connection with such assistance.

(d) Projects Purchased by Residents- A project meets the requirements under this subsection only if the project--

(1) is or was eligible low-income housing (as such term is defined in section 229 of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (42 U.S.C. 4119); and

(2) has been purchased by a resident council for the housing or is approved by the Secretary for such purchase, for conversion to homeownership housing under a resident homeownership program meeting the requirements under section 226 of such Act (12 U.S.C. 4116).

(e) Combination of Assistance- Notwithstanding subsection (a), any project that is otherwise eligible for assistance with grant amounts provided under this Act because the project meets the requirements under subsection (b) or (c) and that also meets the requirements under paragraph (1) of the other of such subsections, shall be eligible for such assistance only if the project complies with all of the requirements under such other subsection.

SEC. 5. GRANT AMOUNT LIMITATION.

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

SEC. 6. MATCHING REQUIREMENT.

(a) In General- The Secretary may not make a grant under this Act to any State for any fiscal year in an amount that exceeds twice the amount that the State certifies, as the Secretary shall require, that the State will contribute for such fiscal year, or has contributed since January 1, 2005, from non-Federal sources for the purposes under section 4(a).

(b) Treatment of Previous Contributions- Any portion of amounts contributed after January 1, 2005, that are counted for purposes of meeting the requirement under subsection (a) for a fiscal year may not be counted for such purposes for any subsequent fiscal year.

(c) Treatment of Tax Credits- Tax credits provided under section 42 of the Internal Revenue Code of 1986 and proceeds from the sale of tax-exempt bonds by any State or local government entity shall not be considered non-Federal sources for purposes of this section

SEC. 7. TREATMENT OF SUBSIDY LAYERING REQUIREMENTS.

Neither section 6 nor any other provision of this Act may be construed to prevent the use of tax credits provided under section 42 of the Internal Revenue Code of 1986 in connection with housing assisted with grant amounts provided under this Act, to the extent that such use is in accordance with section 102(d) of the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3545(d)) and section 911 of the Housing and Community Development Act of 1992 (42 U.S.C. 3545 note).

SEC. 8. APPLICATIONS.

The Secretary shall provide for States (through appropriate State agencies) to submit applications for grants under this Act. The Secretary shall require the applications to contain any information and certifications necessary for the Secretary to determine whether the State is eligible to receive such a grant.

SEC. 9. DEFINITIONS.

For purposes of this Act, the following definitions shall apply:

(1) LOW-INCOME AFFORDABILITY RESTRICTIONS- The term `low-income affordability restrictions' means, with respect to a housing project, any limitations imposed by regulation or regulatory agreement on rents for tenants of the project, rent contributions for tenants of the project, or income-eligibility for occupancy in the project.

(2) PROJECT-BASED ASSISTANCE- The term `project-based assistance' has the meaning given such term in section 16(c) of the United States Housing Act of 1937 (42 U.S.C. 1437n(c)), except that such term includes assistance under any successor programs to the programs referred to in such section.

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

(4) STATE- The term `State' means the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, and any other territory or possession of the United States.

SEC. 10. REGULATIONS.

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

SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated for grants under this title such sums as may be necessary for each of fiscal years 2006, 2007, 2008, 2009, and 2010.

END