[House Report 107-196]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 107-196
======================================================================
OFFICE OF MULTIFAMILY HOUSING ASSISTANCE RESTRUCTURING EXTENSION ACT OF
2001
_______
September 5, 2001.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Oxley, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 2589]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 2589) to amend the Multifamily Assisted Housing
Reform and Affordability Act of 1997 to reauthorize the Office
of Multifamily Housing Assistance Restructuring, and for other
purposes, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Hearings......................................................... 4
Committee Consideration.......................................... 4
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 4
Performance Goals and Objectives................................. 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 5
Committee Cost Estimate.......................................... 5
Congressional Budget Office Estimate............................. 5
Federal Mandates Statement....................................... 10
Advisory Committee Statement..................................... 10
Constitutional Authority Statement............................... 10
Applicability to Legislative Branch.............................. 11
Section-by-Section Analysis of the Legislation................... 11
Changes in Existing Law Made by the Bill, as Reported............ 11
Purpose and Summary
H.R. 2589, the Office of Multifamily Housing Assistance
Restructuring Extension Act of 2001, extends the Office of
Multifamily Housing Assistance (OMHAR) for three years. The
bill also requires the Program Director to report directly to
the Federal Housing Commissioner and eliminates the need for
Senate confirmation of the Director.
Background and Need for Legislation
The Office of Multifamily Housing Assistance Restructuring
(OMHAR) was established within the Department of Housing and
Urban Development (HUD) by the Multifamily Assisted Housing
Reform and Affordability Act of 1997 (Public Law 105-65) to
administer the ``mark-to-market'' program for restructuring
Federal Housing Administration (FHA)-insured mortgages for
section 8 project based contracts. The mark-to-market program
is aimed at preserving the affordability of low-income rental
housing, while reducing the cost of rental assistance subsidies
provided to low-income households.
The mark-to-market program and OMHAR are both scheduled to
terminate on September 30, 2001. At that time, without
reauthorization, HUD would still be required to renew section 8
contract rents at market levels. However, the tools established
by the Act for restructuring mortgage loan debts would no
longer be available. OMHAR's authority would be transferred to
HUD's Secretary, disrupting program momentum and leaving HUD
without the capacity and expertise it needs to administer the
program effectively.
H.R. 2589 simplifies issues of jurisdiction and
coordination. Under current law, the Office of Housing and
OMHAR have overlapping jurisdictions with both directors
reporting to the HUD Secretary. H.R. 2589 would require the
OMHAR Director to report to the Federal Housing Commissioner.
This new arrangement will make it easier to coordinate OMHAR
with the 18 Multifamily Hubs in the Office of Housing located
around the country. Additionally, H.R. 2589 eliminates the need
for Senate confirmation of the Director.
Mark-to-Market Restructuring Program. Over 800,000 units in
approximately 8,500 multifamily projects have been financed
with mortgages insured by FHA and supported by project-based
section 8 housing assistance payments contracts. The residents
of housing units that receive project-based assistance are
required to pay a portion of their income for rent (generally
30 percent), while HUD pays the balance. Many of these
properties' rents are higher than the market rents of
comparable unassisted properties. A main cause of the higher
rents is that the Government originally supported the
development of these properties by establishing rents above
market levels. The Government would then raise the rents
regularly through the application of set formulas that,
according to HUD, tended to be generous to encourage the
production of new affordable housing.
After a careful review of the insured multifamily portfolio
of FHA, Congress realized that if substantial changes to the
section 8 project-based program were not made, the renewals of
expiring contracts for section 8 assistance would consume an
increasingly larger portion of the discretionary budget of HUD
in future years. In fact, HUD estimated that if no action were
taken by 2007, the annual cost of renewing project-based
section 8 contracts would rise to approximately $7 billion, or
about one-third of HUD's total budget.
In an effort to address this growing problem, Congress
enacted the mark-to-market proposal in 1997. Specifically, the
program provides the framework for HUD to restructure insured
section 8 multifamily housing projects by lowering their rents
to market levels when their current section 8 contracts expire
and reducing mortgage debt if necessary for the properties to
continue to have a positive cash flow. The rents are marked
back down to market price, hence the phrase ``mark-to-market.''
Without this restructuring, rents for many of the 8,500
properties in HUD's insured section 8 multifamily housing
portfolio would continue to substantially exceed market levels.
This would result in higher Federal subsidies under the section
8 program.
Office of Multifamily Assisted Housing Restructuring
(OMHAR). Congress provided OMHAR the following restructuring
tools: (1) reducing property debt levels by approving partial
or full payments ofFHA insurance claims without an owner
default; (2) approving exception rents in excess of local market rents
in order to preserve affordable housing in specific markets; (3)
exempting FHA mortgage insurance credit subsidy limitations and
limitations on risk sharing commitments; and (4) using public and
nonpublic participating administrative entities (PAEs) to complete
restructuring actions. PAEs can be housing financing agencies (HFA), or
non-profit or for-profit organizations.
OMHAR was slow in getting started. It took almost two years
to establish the program's infrastructure and for OMHAR to
begin assigning a large volume of properties to the entities
that would carry out restructuring actions. Some program
participants criticized OMHAR's administration of the program
asserting that cost cutting would often take precedent over
long-term preservation goals. Moreover, critics argued that
OMHAR's complex rules and rigid procedures discouraged
participation and innovation by Housing Finance Agencies.
Others describe poor communication and coordination between
OMHAR and HUD. This has led some advocates to support
transferring responsibility for administration of the program
from OMHAR to other parts of HUD.
GAO Recommendations and Review. The 1997 legislation
directed the General Accounting Office (GAO) to review OMHAR's
implementation of the mark-to-market program within 18 months
of the effective date of final regulations, which were issued
on May 22, 2000. In a July 2001 report (``Multifamily Housing:
Issues Related to Mark-to-Market Program Reauthorization,''
Report to Congressional Committees, GAO-01-800, July 2001), GAO
pointed out that OMHAR has taken action to address many of the
criticisms raised by eliminating some elements of its review,
streamlining the requirements in the operating procedure guide,
and developing incentives to encourage owner participation in
the program. In addition, GAO maintains that OMHAR's pace in
implementing the program has been reasonable given the
program's complexity and the number of tasks that needed to be
accomplished.
GAO also concluded that the mark-to-market program should
be extended. HUD estimated that over 1,300 section 8 properties
with rents above market have section 8 contracts that will
expire after the program is scheduled to sunset. If rents for
these properties must be marked down to market levels without
provisions for mortgage restructuring, it is likely that many
of the properties would default on their mortgages, resulting
in large claims against FHA's insurance fund.
Finally, GAO concludes that OMHAR's authority to administer
the program should also be extended. The report maintains that
transferring responsibility for administering the program from
OMHAR to other parts of HUD, without dedicated mark-to-market
staff, could disrupt program momentum and leave HUD without the
capacity and expertise it needs to administer the program
effectively. GAO saw no problem, however, with placing the
office under HUD's Office of Housing ``so long as such action
does not disrupt program momentum, diminish HUD's capacity for
administering the program, or weaken program oversight.''
GAO makes several other recommendations that could assist
the program's performance and may warrant this Committee's
consideration in the future. In that regard, a letter was sent
by the Chairwoman of the Subcommittee on Housing and Community
Opportunity to OMHAR Director Ira Peppercorn asking several
questions relating to program administration. The Committee
will carefully review the recommendations of HUD, OMHAR, and
the GAO for purposes of evaluating additional changes that
could be made in future legislation. Given the impending
September 30th reauthorization deadline, however, H.R. 2589
includes only changes specific to reauthorization and office
structure.
Hearings
No hearings were held on this legislation.
Committee Consideration
On July 25, 2001, the Committee met in open session and
ordered H.R. 2589 reported to the House, without amendment,
with a favorable recommendation by a voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. No
record votes were taken in conjunction with the consideration
of this legislation. A motion by Mr. Oxley to report the bill
to the House with a favorable recommendation was agreed to by a
voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee made findings that are
reflected in this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
The OMHAR will continue to pursue its current programs to
(1) preserve affordability and availability of low-income
housing, (2) reduce the costs of Federal housing assistance,
(3) enhance HUD's administration of Federal housing assistance,
(4) address financially and physically troubled projects, and
(5) correct management and ownership deficiencies.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that this
legislation would result in changes in budget authority,
entitlement authority, or tax expenditures or revenues
consistent with the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 23, 2001.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2589, the Office
of Multifamily Housing Assistance Restructuring Act of 2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Chad
Chirico and Susanne S. Mehlman.
Sincerely,
Dan Crippen.
Enclosure.
H.R. 2589--Office of Multifamily Housing Assistance Restructuring Act
of 2001
Summary: H.R. 2589 would extend the Multifamily Assisted
Housing Restructuring and Affordability Act of 1997 (MAHRA) for
three years beyond its current expiration date of September 30,
2001. That law authorizes the so-called mark-to-market approach
for renewing Section 8 Housing Assistance Payment (HAP)
contracts and for the restructuring of certain mortgages
insured by the Federal Housing Administration (FHA). Under the
mark-to-market approach, HAP contracts are renewed at market
rents for FHA-insured projects that currently receive above-
market rents and, if necessary, the mortgages for those
projects are written down to levels that could be supported by
the lower rents.
CBO estimates that enacting H.R. 2589 would prevent some
projects from defaulting on FHA-insured mortgages and thus
reduce direct spending by $307 million over the 2002-2006
period. Because the bill would affect direct spending, pay-as-
you-go procedures would apply. We also estimate that
implementing H.R. 2589 would reduce discretionary spending by
$114 million over the 2002-2006 period, assuming that future
appropriations are reduced to reflect the lower costs of
Section 8 contracts.
H.R. 2589 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Reauthorization of the mark-to-market program would extend
cooperative agreements between the Department of Housing and
Urban Development (HUD) and participating state and local
agencies, and any costs incurred by those agencies as part of
the agreements would be voluntary.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2589 is shown in the following table.
The costs of this legislation would fall within budget
functions 370 (mortgage and housing credit) and 600 (income
security). For this estimate, CBO assumes that the legislation
will be enacted early in fiscal year 2002 and that the
necessary amounts will be appropriated each fiscal year. Outlay
estimates are based on historical spending patterns associated
with the mark-to-market program.
ESTIMATED BUDGETARY EFFECTS OF H.R. 2589
----------------------------------------------------------------------------------------------------------------
By fiscal year, in million of dollars--
-----------------------------------------------------------
2001 2002 2003 2004 2005 2006
----------------------------------------------------------------------------------------------------------------
DIRECT SPENDING
FHA Multifamily Mortgage Insurance Fund
Spending Under Current Law:
Estimated Budget Authority...................... 645 2,550 1,801 847 163 34
Estimated Outlays............................... 645 2,550 1,801 847 163 34
Proposed Changes:
Estimated Budget Authority...................... 0 -302 0 0 0 0
Estimated Outlays............................... 0 -302 0 0 0 0
Proposed Spending Under H.R. 2589:
Estimated Budget Authority...................... 645 2,248 1,801 847 163 34
Estimated Outlays............................... 645 2,248 1,801 847 163 34
Section 8 Contracts
Spending Under Current Law:
Estimated Budget Authority...................... 0 0 0 0 0 0
Estimated Outlays............................... 4,390 3,933 3,460 3,039 2,817 2,715
Proposed Changes:
Estimated Budget Authority...................... 0 0 0 0 0 0
Estimated Outlays............................... 0 -1 -2 -2 0 0
Proposed Spending Under H.R. 2589:
Estimated Budget Authority...................... 0 0 0 0 0 0
Estimated Outlays............................... 4,390 3,932 3,458 3,037 2,817 2,715
Total Changes in Direct Spending
Estimated Budget Authority.......................... 0 -302 0 0 0 0
Estimated Outlays................................... 0 -303 -2 -2 0 0
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law:
Estimated Authorization Level\1\................ 12,105 16,165 17,110 17,761 18,271 18,753
Estimated Outlays............................... 16,515 17,525 18,265 18,620 19,094 19,603
Proposed Changes:
Administrative Expenses:
Estimated Authorization Level............... 0 24 24 18 0 0
Estimated Outlays............................... 0 23 24 28 1 0
Section 8 Contracts:
Estimated Authorization Level............... 0 -34 -65 -56 -25 -6
Estimated Outlays........................... 0 -33 -63 -54 -24 -6
Proposed Spending Under H.R. 2589:
Estimated Authorization Level................... 12,105 16,155 17,069 17,723 18,246 18,747
Estimated Outlays............................... 16,515 17,515 18,226 18,584 19,071 19,597
----------------------------------------------------------------------------------------------------------------
\1\ The amount shown for 2001 is the amount appropriated for the housing certificate fund and administrative
expenses in that year. The 2002-2006 levels are CBO baseline projections, assuming adjustments for anticipated
inflation and the renewal of all units.
Basis of estimate: CBO estimates that enacting H.R. 2589
would reduce direct spending by a total of $307 million over
the 2002-2006 period. Such savings would result principally
from avoiding defaults on FHA-insured mortgages that are
anticipated under current law. Those estimated FHA savings
would be reflected in the budget on a present value basis as
``loan modifications'' under the provisions of the Federal
Credit Reform Act, which establishes present value accounting
for federal loan programs.
Subject to the availability of appropriations, CBO
estimates that implementing H.R. 2589 would cost a total of $66
million over the 2002-2006 period to support the continuation
of the Office of Multifamily Housing Assistance Restructuring's
(OMHAR's) mark-to-market activities under the three-year
extension of MAHRA. CBO also estimates that implementing H.R.
2589 would result in savings of $180 million over the next five
years from the reduction of HAP contract rents to market
levels, assuming that appropriations are reduced accordingly.
Thus, CBO estimates that implementing this bill would reduce
discretionary spending by $114 million over the 2002-2006
period.
Background
In 1997, MAHRA was enacted to address financial problems in
the Section 8 program for affordable housing assistance. At
that time, over 4,000 multifamily projects with FHA-insured
mortgages were receiving project-based rent subsidies under
Section 8 of the United States Housing Act of 1937. The
majority of these projects had units with rents that exceeded
those for comparable unassisted units. The original HAP
contracts attached to these projects were written for periods
typically ranging from 15 to 40 years--mostly expiring over the
1998-2004 period. However, HUD no longer had the authority to
review these contracts at more than 120 percent of the fair
market rent except under certain circumstances. Consequently,
few of these projects would have remained financially viable
when their rental income was reduced to market rates. With
reduced rents, such projects would have been expected to
default on their mortgages, generating large losses to the FHA
insurance fund and possibly displacing many tenants in these
projects.
The mark-to-market process usually involves reducing a
project's rents to market levels and then either modifying or
refinancing the existing mortgage at an amount that could be
supported by the new market rents (this process is often
referred to as ``full'' restructuring). Specifically, FHA
prepays all or a portion of the owner's existing mortgage debt
through a partial payment of claims (PPC) and then takes back a
second mortgage, and in some cases a third mortgage, to recover
some of the PPC. In some instances, though, only a property's
rent is reduced to market levels; this type of restructuring
(referred to as a ``lite'' restructuring) usually occurs when
the project is physically and financially sound enough to
operate at market-level rents with its existing mortgage. When
MAHRA expires, HUD will still be required to renew HAP
contracts at market levels, but the authority to restructure
mortgage debt will no longer be available for projects that
have yet to enter the mark-to-market program. Without that
authority, many mortgages would enter into deficit after rents
are reduced to market levels.
Direct spending
CBO estimates that enacting H.R. 2589 will result in
savings principally by avoiding defaults on FHA-insured
multifamily mortgages that otherwise would occur under current
law. We expect that a small amount of savings also would occur
because rents will be reduced prior to HAP contract expiration
for a small number of projects.
Avoiding FHA Multifamily Defaults through Mark-to-Market.
Based on information from OMHAR, CBO estimates that by the end
of fiscal year 2001, about 1,730 projects will have undergone
or will be in the process of undergoing some form of mark-to-
market restructuring. By extending the mark-to-market authority
through 2004, CBO estimates that an additional 680 properties
with FHA-insured mortgages would have their mortgage debt
restructured. Because there is relatively little incentive for
owners to begin the mark-to-market process prior to the
expiration of their HAP contracts, we estimate that only about
25 of the 680 projects will have their mortgage debt
restructured prior to their HAP contract expiration date.
Restructuring those projects will not only result in savings to
FHA (by avoiding defaults), but also result in savings to
existing HAP contracts (these savings are explained in the next
section).
Based on a review of financial information on over 4,000
projects, including projects that have defaulted on FHA-insured
mortgages as well as projects for which mortgage restructurings
have been completed, CBO estimates that the cost of
restructuring mortgage debt is less expensive than the cost of
default by about $1 million per project, on average. Our
analysis indicates that over several years defaulted projects
cost the FHA insurance fund an average of $2 million per
project, while restructured projects have cost the FHA
insurance fund an average of $1 million each since the program
began operations in 1999. Included in the costs of defaults are
the payments covering the remaining balance on the mortgage
(about $1.3 million per project), and the expenses of
maintaining and preparing the property for sale (about $600,000
per project). These estimates reflect the fact that two out of
three projects that have defaulted since 1985 were eventually
sold for $10 or less.
The cost of restructuring mortgage debt includes the
payment covering the remaining balance on the mortgage (an
estimated 80 percent of the loan's unpaid balance or about $1
million per project), the fees paid to the public or private
organization that assists OMHAR with mark-to-market activities
(about $50,000 per project), and the FHA subsidy cost
associated with guaranteeing the new first mortgage ($30,000
per project), less the present value of expected receipts from
repayments on the second mortgage ($200,000 per project).
Because properties that are projected to be restructured in the
2002-2004 period have unpaid mortgage balances that are
significantly higher than the historical average, CBO has
adjusted the historical averages proportionately to estimate
future savings.
The additional restructuring that could occur under H.R.
2589 would reduce the cost to the FHA insurance fund over the
remaining life of the affected loan guarantees. If the mark-to-
market program ends--as under current law--CBO assumes, based
on discussions with HUD and OMHAR, that about 60 percent of the
680 projects whose mortgages have not yet been restructured
would default. The remaining 40 percent are assumed to either
be sustainable at market rents or would not have rents reduced
to market in the near future. For these projects that are not
expected to default, enacting this bill would result in
restructuring costs only.
Because enacting H.R. 2589 would change the expected cash
flows associated with the FHA multifamily loan guarantee
program, this legislation is considered to be a modification
ofexisting federal loan guarantees. Under credit reform procedures, the
costs of a loan modification are estimated on a net present value basis
in the year in which the legislation is enacted. Assuming that the bill
is enacted early in fiscal year 2002, CBO estimates savings of $302
million in that year.
Reduction in Rents for Units Subject to Mortgage
Restructuring. CBO expects that under the bill, some projects
would have their mortgages restructured prior to the expiration
of their HAP contracts. This would result in savings from funds
that have already been appropriated for housing assistance
payments. Under the existing mark-to-market authority, only a
small number of project owners had their mortgages restructured
prior to the expiration of their HAP contracts. Because CBO
anticipates similar behavior over the next three years, we
estimate that about 25 of the 680 projects will have their
rents reduced and mortgage debt restructured prior to their HAP
contract expiration. CBO estimates that the average savings
would amount to roughly $200,000 per project, resulting in a
total estimated savings of $5 million over the next three
years.
Spending subject to appropriation
Office of Multifamily Housing Assistance Restructuring. CBO
estimates that OMHAR would incur costs of $66 million over the
2002-2006 period, subject to the availability of
appropriations, to continue its mark-to-market activities for
an additional three years. Such funding would cover costs
associated with the salaries and expenses of OMHAR personnel
and contractor support. CBO estimates that OMHAR would require
appropriations of $24 million in each of fiscal years 2002 and
2003. By fiscal year 2004, however, CBO predicts that the
number of mortgage restructurings would begin to decline.
Consequently, we estimate that OMHAR would require
appropriations of only $18 million in fiscal year 2004.
Section 8 Rental Assistance. CBO estimates that by
extending MAHRA through 2004, the transition to market rents
for projects with expiring HAP contracts would occur at a
faster pace than expected under current law. CBO estimates that
implementing the bill would result in discretionary savings of
$33 million in 2002 and $180 million over the 2002-2006 period,
assuming that appropriations are reduced to reflect the lower
cost of the HAP contracts.
Information provided by HUD indicates that those properties
estimated to have above-market rents that were not assigned to
OMHAR for restructuring over the last few years had their rents
increased, on average, by the rate of inflation at their first
HAP contract renewal. In contrast, those projects that were
assigned to OMHAR for restructuring over the same time period
had average rent reductions of 13 percent. CBO estimates that
this trend in rent determination is an indication that OMHAR
would reduce rents to market levels more rapidly than would be
expected under current law.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. The net
changes in outlays that are subject to pay-as-you-go procedures
are shown in the following table. For the purposes of enforcing
pay-as-you-go procedures, only the effects in the current year,
the budget year, and the succeeding four years are counted.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------------------------------
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
Changes in outlays............... 0 -303 -2 -2 0 0 0 0 0 0 0
Changes in receipts.............. Not applicable
----------------------------------------------------------------------------------------------------------------
Intergovernmental and private-sector impact: H.R. 2589
contains no intergovernmental or private-sector mandates as
defined in UMRA. Reauthorization of the mark-to-market program
would extend cooperative agreements between HUD and
participating state and local agencies, and any costs incurred
by those agencies as part of the agreements would be voluntary.
Estimate prepared by: Federal Costs: Chad Chirico and
Susanne S. Mehlman. Impact on State, Local, and Tribal
Governments: Susan Sieg Tompkins. Impact on the Private Sector:
Bruce Vavrichek.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
general welfare of the United States); Article 1, section 8,
clause 3 (relating to the power to regulate interstate
commerce); and Article I, section 8, clause 18 (relating to
making all laws necessary and proper for carrying into
execution powers vested by the Constitution in the government
of the United States).
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section establishes the short title of the bill, the
``Office of Multifamily Housing Assistance Restructuring
Extension Act of 2001.''
Section 2. Reauthorization of Office
Legislation that authorizes The Office of Multifamily
Housing Assistance Restructuring is set to expire on September
30, 2001. This section strikes the date of September 30, 2001
and inserts September 30, 2004.
Section 3. Director
Currently, the Director of OMHAR is appointed by the
President and confirmed by the Senate. This section amends the
law to provide that the Director no longer must be confirmed by
the Senate.
This section also clarifies the duties of the Director.
Current law ``authorizes'' the Director to implement the duties
of OMHAR. This section makes it ``the sole duty and
responsibility of the Director.'' This section also prohibits
HUD from assigning duties to the Director of OMHAR other than
that necessary to administer OMHAR.
Section 4. Oversight by Federal Housing Commissioner
Current law requires the OMHAR Director to report to the
Secretary of HUD. This section amends section 578 of the
Multifamily Assisted Housing Reform and Affordability Act of
1997, entitled ``Oversight by Federal Housing Commissioner.''
This new language amends the law to require the OMHAR Director
to report to the Assistant Secretary of HUD who is the Federal
Housing Commissioner.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
MULTIFAMILY ASSISTED HOUSING REFORM AND AFFORDABILITY ACT OF 1997
TITLE V--HUD MULTIFAMILY HOUSING REFORM
* * * * * * *
SEC. 510. SHORT TITLE.
This title may be cited as the ``Multifamily Assisted Housing
Reform and Affordability Act of 1997''.
* * * * * * *
Subtitle D--Office of Multifamily Housing Assistance Restructuring
* * * * * * *
SEC. 572. DIRECTOR.
[(a) Appointment.--The Office shall be under the management
of a Director, who shall be appointed by the President by and
with the advice and consent of the Senate, from among
individuals who are citizens of the United States and have a
demonstrated understanding of financing and mortgage
restructuring for affordable multifamily housing. Not later
than 60 days after the date of the enactment of this Act, the
President shall submit to the Senate a nomination for initial
appointment to the position of Director.
[(b) Vacancy.--A vacancy in the position of Director shall be
filled in the manner in which the original appointment was made
under subsection (a).]
(a) Appointment.--The Office shall be under the management of
a Director, who shall be appointed by the President from among
individuals who are citizens of the United States and have a
demonstrated understanding of financing and mortgage
restructuring for affordable multifamily housing.
(b) Vacancy.--A vacancy in the position of Director shall be
filled by appointment in the manner provided under subsection
(a). The President shall make such an appointment not later
than 60 days after such position first becomes vacant.
* * * * * * *
SEC. 573. DUTY AND AUTHORITY OF DIRECTOR.
(a) * * *
(b) Authority.--[The Director is authorized] The sole duty
and responsibility of the Director shall be to make such
determinations, take such actions, issue such regulations, and
perform such functions assigned to the Director under [law as
the Director determines necessary to carry out such functions]
this title as the Director determines necessary to carry out
the program under subtitle A, subject to the review and
approval of the Secretary. The Director shall semiannually
submit a report to the [Secretary] Assistant Secretary of the
Department of Housing and Urban Development who is the Federal
Housing Commissioner regarding the activities, determinations,
and actions of the Director. Neither the Secretary, nor the
Assistant Secretary of the Department of Housing and Urban
Development who is the Federal Housing Commissioner, nor any
other officer of such Department may delegate or assign to the
Director any duty or responsibility other than, or in addition
to, the duty and responsibility of the Director established
under this subsection.
* * * * * * *
[SEC. 578. SUSPENSION OF PROGRAM BECAUSE OF FAILURE TO APPOINT
DIRECTOR.
[(a) In General.--If, upon the expiration of the 12-month
period beginning on the date of the enactment of this Act, the
initial appointment to the office of Director has not been
made, the
operation of the program under subtitle A shall immediately be
suspended and such provisions shall not have any force or
effect during the period that ends upon the making of such
appointment.
[(b) Interim applicability of demonstration program.--
Notwithstanding any other provision of law, during the period
referred to in subsection (a), the Secretary shall carry out
sections 211 and 212 of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 1997. For purposes of applying such
sections pursuant to the authority under this section, the term
``expiring contract'' shall have the meaning given in such
sections, except that such term shall also include any contract
for project-based assistance under section 8 of the United
States Housing Act of 1937 that expires during the period that
the program is suspended under subsection (a).]
SEC. 578. OVERSIGHT BY FEDERAL HOUSING COMMISSIONER.
All authority and responsibilities assigned under this
subtitle to the Secretary shall be carried out through the
Assistant Secretary of the Department of Housing and Urban
Development who is the Federal Housing Commissioner.
SEC. 579. TERMINATION.
(a) Repeal.--Subtitle A (except for section 524) and subtitle
D (except for this section) are repealed effective October 1,
[2001] 2004.
(b) Exception.--Notwithstanding the repeal under subsection
(a), the provisions of subtitle A (as in effect immediately
before such repeal) shall apply with respect to projects and
programs for which binding commitments have been entered into
under this Act before October 1, [2001] 2004.
(c) Termination of Director and Office.--The Office of
Multifamily Housing Assistance Restructuring and the position
of Director of such Office shall terminate [upon September 30,
2001] at the end of September 30, 2004.
* * * * * * *