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107th Congress                                            Rept. 107-640
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================



 
             HOUSING AFFORDABILITY FOR AMERICA ACT OF 2002

                                _______
                                

               September 4, 2002.--Ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3995]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 3995) to amend and extend certain laws relating to 
housing and community opportunity, and for other purposes, 
having considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Vote of the Committee............................................     3
Committee Oversight Findings.....................................     3
Performance Goals and Objectives.................................     3
New Budget Authority and Tax Expenditures........................     4
Congressional Budget Office Cost Estimate........................     4
Constitutional Authority Statement...............................    14
Section-by-Section Analysis and Discussion.......................    15
Changes in Existing Law Made by the Bill, as Reported............    17
Markup Transcript................................................    17

                          Purpose and Summary

    H.R. 3995 improves access to affordable housing for more 
Americans by amending specified housing-related Acts in the 
following areas: (1) home investment partnerships; (2) Federal 
Housing Administration mortgage insurance for single and 
multifamily housing, and health care facilities; (3) supportive 
housing for elderly and disabled families; (4) section 8 rental 
housing assistance; (5) public housing; (6) Hope VI 
revitalization assistance; (7) homeless housing programs; (8) 
Native American housing; (9) housing impact analysis; (10) 
community development block grants; (11) housing counseling 
programs; (12) housing opportunities for persons with AIDS; and 
(13) Government National Mortgage Association guarantee fees.

                Background and Need for the Legislation

    The legislation, introduced on March 19, 2002 by 
Representative Marge Roukema (R-NJ), was referred to the 
Financial Services Committee and to the Judiciary Committee. 
Title VIII of H.R. 3995 is the only title within the 
jurisdiction of the Judiciary Committee.
    Housing is one of the Nation's most heavily regulated 
industries. Currently, Federal agencies are required to conduct 
certain economic analyses when promulgating new rules.\1\ 
However, there is no such requirement that any analysis be 
conducted to determine a rule's impact on housing 
affordability. The rising cost of housing threatens the 
attainment of home ownership for an increasing number of 
Americans. A recent study found that nearly one out of every 
seven American households paid at least half their income for 
housing and/or lived in substandard conditions in 1999.\2\ 
Title VIII is intended to heighten agency and public awareness 
of the significant costs to housing affordability caused by 
Federal regulations, and to lessen the adverse impact such 
regulations may have on achieving home ownership.
---------------------------------------------------------------------------
    \1\ See, e.g., 5 U.S.C. Sec. 604 (2002) (regulatory flexibility 
analysis of proposed rules considering their effect on small entities); 
42 U.S.C. Sec. 1302 (2002) (impact analysis of Medicare and Medicaid 
rules and regulations on small rural hospitals); and 42 U.S.C. 
Sec. 7617 (2002) (economic impact statements of air pollution and 
control rules on small business, consumer costs and energy use).
    \2\ Four Windows: A Metropolitan Perspective on Affordable Housing 
Policy in America, 2001, NHC Senior Executive Roundtable Series (Nat'l 
Housing Conf., Wash., D.C.), April, 2002, at 1, 4.
---------------------------------------------------------------------------
    Title VIII requires agencies, when promulgating any 
proposed or final rule for notice and comment, to issue a 
housing impact analysis when that rule has a significant 
economic impact on housing affordability. ``Significant,'' as 
it applies to impact, is defined as increasing consumers' cost 
of housing by more than $100,000,000 per year.
    As drafted, section 803 directs an agency, when publishing 
general notice of proposed rulemaking for any proposed rule, to 
prepare and make available for public comment an initial 
housing impact analysis. Section 804 provides that such 
analysis describe and, where feasible, estimate the extent to 
which the proposed rule would increase the cost or reduce the 
supply of housing or land for residential development.
    Section 805 directs an agency to prepare a final housing 
impact analysis when promulgating a final rule. Under section 
805, each final housing impact analysis must summarize and 
assess the issues, analyses and alternatives to the proposed 
rule raised during the comment period, and must state any 
changes made in the proposed rule as a result of such comments. 
Final housing impact analyses must also describe and estimate 
the extent of the rule's impact on housing affordability.
    Agencies promulgating proposed or final rules which do not 
have a significant deleterious impact on housing affordability 
are exempt from the reporting requirements of sections 804 and 
805, provided the agency publishes with the rule a 
certification and supporting factual statement to that effect 
in the Federal Register. Section 809 also provides procedures 
for the delay in completion or waiver of initial housing impact 
analyses upon publication in the Federal Register of a 
certification and written finding by the head of the respective 
agency that the final rule is being promulgated in response to 
an emergency. Final housing impact analyses may be delayed, but 
not waived, under Section 809, for a period of not more than 
180 days after the date of publication in the Federal Register 
of a final rule. In such instances, the head of the agency must 
publish in the Federal Register a certification and written 
finding that the final rule is being promulgated in response to 
an emergency.
    The provisions of title VIII will lead to rules which make 
affordable housing less burdensome to acquire and accessible to 
more Americans. Recognizing the need for such legislation, the 
House in the 106th Congress passed overwhelmingly a bill 
containing language nearly identical to title VIII.\3\ Title 
VIII of H.R. 3995 is virtually identical to H.R. 2753, which 
was introduced by Representative Mark Green (R-WI) on August 2, 
2001, and referred to the Judiciary Committee.
---------------------------------------------------------------------------
    \3\ H.R. 1776, the ``American Homeownership and Economic 
Opportunity Act of 2000,'' was approved by the House on April 6, 2000 
by a vote of 417 to 8. The Senate referred the bill to the Committee on 
Banking, Housing, and Urban Affairs on April 7, 2000. After referral of 
H.R. 1776 to the Subcommittee on Housing and Transportation, no further 
action was taken by the Senate.
---------------------------------------------------------------------------

                                Hearings

    The were no hearings held on H.R. 3995.

                        Committee Consideration

    On July 16, 2002, the Subcommittee on Commercial and 
Administrative Law met in open session and ordered favorably 
reported H.R. 3995, without amendment, by voice vote, a quorum 
being present. On July 23, 2002, the Judiciary Committee met in 
open session and ordered favorably reported H.R. 3995 without 
amendment, by voice vote, a quorum being present.

                         Vote of the Committee

    There were no recorded votes on H.R. 3995.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                    Performance Goals and Objectives

    Title VIII of H.R. 3995, the portion of the legislation 
within the jurisdiction of the Judiciary Committee, does not 
authorize funding. Therefore, clause 3(c) of rule XIII of the 
Rules of the House in inapplicable.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of House rule XIII is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to bill, H.R. 3995, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 21, 2002.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3995, the Housing 
Affordability for America Act of 2002.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Chad Chirico, 
who can be reached at 226-2820.
            Sincerely,
                                  Dan L. Crippen, Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
H.R. 3995--Housing Affordability for America Act of 2002.

                                SUMMARY

    H.R. 3995 would amend and extend certain laws relating to 
housing opportunity and community development. The bill would 
seek to increase the availability of affordable housing and 
expand homeownership opportunities across the country. H.R. 
3995 would authorize appropriations to fund both new 
initiatives and existing housing programs.
    CBO estimates that implementing this legislation would cost 
about $12.6 billion over the next 5 years, assuming 
appropriation of the necessary amounts. CBO estimates that 
enacting the bill also would increase direct spending by $34 
million over the 2003-2008 period. Therefore, pay-as-you-go 
procedures would apply. The increase in direct spending would 
stem from the bill's authority to use certain unobligated funds 
for new grants related to elderly housing.
    H.R. 3995 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on State, local, or tribal 
governments.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 3995 is summarized 
in Table 1. The costs of this legislation would fall within 
budget functions 370 (mortgage and housing credit), 450 
(community and regional development), and 600 (income 
security).
    The 2002 level is the amount appropriated for that year for 
the Certificate Fund, HOME Investment Partnership Program, 
Housing for Special Populations, HOPE VI, Homeless Assistance 
Grants, Housing Opportunities for Persons with AIDS, Assistance 
for Self-Help Housing Providers, and includes offsetting 
collections generated by the Federal Housing Administration's 
single-family program and the Government National Mortgage 
Association's single-family Mortgage-Backed Security program. 
The 2003-2007 levels are the 2002 amounts adjusted for 
inflation except for programs with expiring authorizations.


                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that H.R. 3995 will be 
enacted near the beginning of fiscal year 2003 and that the 
amounts necessary to implement the bill will be appropriated 
for each fiscal year. The costs by provision are shown in Table 
2, which is followed by a description of the estimated costs.


                   SPENDING SUBJECT TO APPROPRIATION

    Title I: Home Investment Partnerships Program. CBO 
estimates that implementing title I would cost $4.3 billion 
over the 2003-2007 period, assuming appropriation of the 
necessary amounts.
    Affordable Housing Production and Preservation. Section 101 
would establish a housing production and preservation program 
for rental housing affordable to very low-income families. 
Funding for this program would be derived from any unobligated 
Certificate Fund balances appropriated for fiscal year 2004 or 
any subsequent fiscal year (the Certificate Fund provides 
funding for Section 8 rental assistance contracts). The bill 
would provide grants to participating State and local 
jurisdictions through the HOME Investment Partnership program. 
Families occupying units produced through this program would be 
required to pay not more than 40 percent of their adjusted 
monthly income toward rent.
    Assuming the availability of future appropriations and the 
enactment of section 403 of this bill, CBO estimates that 
approximately $1.1 billion would be available for recapture 
from the Certificate Fund between 2005 and 2007 (as a result of 
tenant-based voucher utilization rates below 100 percent). Data 
provided by the Department of Housing and Urban Development 
(HUD) indicate that units currently produced through the HOME 
program cost an average of $90,000. Assuming that participating 
jurisdictions would provide the required 25 percent match of 
program funding, CBO estimates that implementing this provision 
would provide enough funding over the 2005-2007 period to 
produce approximately 15,400 units of affordable housing, which 
would increase outlays by $236 million over that period.
    Eligibility of Room Additions for Use for Grandparents and 
Grandchildren. Section 106 would allow participating local 
jurisdictions to provide HOME Investment Partnership funds to 
low-income families to build an additional room or add a 
cottage to an existing dwelling for an elderly relative if it 
is necessary to avoid the relative's placement in an 
institutionalized setting. Based on data published by the 
Centers for Disease Control and Prevention and the Agency for 
Healthcare Research and Quality, CBO assumes that nearly a 
million elderly individuals from families eligible to receive 
assistance under this provision are admitted into nursing home 
facilities each year. About one in six of these individuals 
require help with fewer than three activities of daily living 
(ADLs), which would make them suitable candidates for home 
care.
    Results from a 1991 survey conducted by the American 
Association of Retired Persons indicate that 44 percent of 
families would prefer to care for frail or disabled family 
members at home. Assuming appropriation of the necessary 
amounts, CBO estimates that this provision would allow about 
72,000 of these elderly individuals to avoid placement in an 
institutionalized setting each year at a cost of approximately 
$10,000 per grant. CBO notes that this reduction in nursing 
home placement could result in Medicaid savings if the beds not 
used by this population are not filled by previously unmet 
demand. (Any such change in Medicaid spending can not be 
attributed to H.R. 3995, however, because the grants that might 
lead to the savings are contingent upon appropriation action.)
    In addition, based on data published by the National 
Alliance for Caregiving, CBO assumes that by 2007 roughly 10 
percent of the 1.4 million low-income households that are 
involved in caregiving for frail elderly relatives requiring 
some help (individuals with one or two ADLs) also would receive 
funding through this provision. This estimate is highly 
uncertain because the legislative language would provide little 
guidance to HUD on how to limit eligibility. If HUD were to 
target funding to families with frail relatives most likely to 
be admitted to nursing homes, participation would be lower than 
the CBO estimate. However, given the lack of predictability of 
nursing home admissions, the regulations might become less 
restrictive than CBO assumes. In total, CBO estimates that 
section 106 would authorize the appropriation of about $7 
billion over the 2003-2007 period, with estimated outlays of 
about $4 billion over that period.
    Title II: FHA Mortgage Insurance. CBO estimates that 
implementing title II would cost $3 million in 2003 but save 
$24 million over the 2003-2007 period.
    Simplification of Down Payment. Section 221 would 
permanently change the process the Federal Housing 
Administration (FHA) uses to determine the amount of a down 
payment that is necessary for mortgages on the single-family 
homes that it insures. Under current law, the down payment is 
calculated using a formula established in a 1996 pilot program. 
Under this formula, the maximum mortgage amount that FHA could 
insure would be determined as a fixed percentage of the home 
value. Authority to use this formula is scheduled to terminate 
on December 31, 2002, but section 221would make its use 
permanent.
    Based on information from FHA, CBO estimates that 
continuing the use of the current down-payment formula would 
slightly increase the cost of guaranteeing FHA loans because it 
would lead to a small increase in the loan-to-value (LTV) 
ratios of about 15 percent of the loans guaranteed each year 
after 2002. The LTV ratio indicates how much equity a borrower 
initially has in the home, and serves as a good predictor of 
the likelihood of default. On average, borrowers with less 
equity (that is, higher LTV ratios) have higher default rates 
than borrowers with more equity. We estimate that this 
provision would increase the cost of guaranteeing some loans, 
resulting in a cost of $6 million in 2003 and $40 million over 
the 2003-2007 period. The estimated changes in FHA's loan 
subsidy costs--which are treated as discretionary spending--
would be recorded in each year as new loans are disbursed.
    Reduced Down-Payment Requirements. Section 222 would reduce 
the down-payment requirements for federally insured mortgages 
for teachers and public safety officers. Enacting this 
provision could enable certain teachers and public safety 
officers to purchase homes within their work regions with an 
FHA guarantee, by permitting a down payment as low as 1 percent 
of the mortgage amount instead of the 3 percent minimum down 
payment that is currently required. In addition, for each year 
that the loan is held and the borrower continues to work in the 
designated school district or public safety jurisdiction, FHA 
would defer 20 percent of the up-front cost of obtaining the 
loan. Normally, FHA charges a fee of 1.5 percent of the loan 
amount as the up-front cost of obtaining an FHA loan guarantee.
    The budgetary impact of this new loan program would depend 
on how many households would use this provision to help them 
become homeowners and how long these homeowners would remain in 
their homes. Based on information from associations, private 
investment firms, banks, FHA, and industry experts, CBO expects 
that about 10,000 loans (with a face value of about $1 billion) 
would be guaranteed after the program is fully implemented in 
2004. CBO expects that demand for this program would grow to 
almost 20,000 loans by 2007. CBO expects that this new program 
would be profitable (and thus generate negative subsidies), 
though not as profitable as the current single-family program 
where fees are not waived or reduced and default rates are 
slightly lower. We estimate that this new program would have a 
subsidy rate of about negative 0.75 percent, compared to a 
subsidy rate of negative 2.53 percent for FHA's single-family 
program in 2003 and negative 2.4 percent in subsequent years. 
CBO estimates that implementing the program would result in 
additional offsetting collections of $2 million in 2003 and $41 
million over the 2003-2007 period.
    In addition, because the majority of FHA-insured loans are 
eventually included in the Government National Mortgage 
Association (GNMA) Mortgage-Backed Securities (MBS) program, 
CBO estimates that implementing this provision would result in 
additional collections to GNMA of $1 million in 2003 and $23 
million over the 2003-2007 period.
    Title III: Supportive Housing for Elderly and Disabled 
Families. CBO estimates that implementing title III would cost 
$60 million over the 2003-2007 period, assuming the 
appropriation of the necessary amounts.
    Section 302 would add Section 811 Supportive Housing for 
the Disabled to the list of federally assisted housing programs 
that are eligible to receive grants to provide service 
coordinators. Service coordinators assist residents in 
obtaining needed supportive services from community agencies. 
In fiscal year 2002, 6.4 percent of the total allocation for 
the Section 202 elderly housing program was earmarked for 
service coordinators. Assuming a similar ratio, CBO estimates 
that section 302 of H.R. 3995 would authorize $82 million for 
the 2003-2007 period, with outlays of $60 million over that 
period.
    Title IV: Section 8 Rental Housing Assistance Program. CBO 
estimates that implementing title IV would cost $2.7 billion 
over the 2003-2007 period, assuming appropriation of the 
necessary amounts.
    Thrifty Production Vouchers. Section 401 would establish a 
project-based voucher program to be used for the production or 
substantial rehabilitation of affordable housing. The provision 
would allow public housing agencies (PHAs) to use tenant-based 
vouchers for these purposes and would cap the payment standard 
for assisted units at 75 percent of the public housing agency's 
payment standard for a unit of the same size. The provision 
also would require HUD to increase the number of vouchers 
allocated to PHAs by the number of additional families that can 
be assisted by the agencies as a result of the cap on the 
payment standard for those units. Assuming that these vouchers 
would be used in conjunction with the housing production and 
preservation program in section 101, CBO estimates that 2,500 
additional vouchers would be allocated to PHAs over the 2003-
2007 period. These additional vouchers would result in 
increased administrative fees paid to public housing agencies, 
costing approximately $2 million over the same period.
    Flexibility to Assist Hard-to-House Families. Section 403 
would allow public housing authorities to use up to 5 percent 
of amounts allocated to the agency each year for purposes that 
directly support the agency's housing choice voucher program 
(the program that provides tenant-based vouchers to low income-
families). These funds could be used for housing counseling 
programs, down-payment assistance, rental security deposits, 
and other activities that assist eligible families in obtaining 
suitable dwelling units. Currently, many PHAs are not able to 
utilize their full allotments each year because some tenant-
based vouchers cannot be placed. Assuming the availability of 
appropriations, CBO estimates that this authority would 
increase outlays by $2.6 billion over the 2003-2007 period.
    PHA Administrative Fees. Section 405 would authorize the 
Secretary of HUD to pay incentive fees to public housing 
agencies that succeed in achieving high or substantially 
improved performances on specified program requirements. Based 
on information provided by HUD, CBO assumes that one-third of 
all units are administered by public housing authorities that 
have been rated as ``high performers'' under the Section 8 
Management Assessment Program and, therefore, would be likely 
recipients of the incentive fees. Assuming an administrative 
fee bonus of 3 percent, CBO estimates that this provision would 
require the appropriation of $63 million over the 2003-2007 
period, with outlays of $60 million over that period.
    Extension of Project-Based Section 8 Contract Renewals. 
Section 408 would amend the Multifamily Assisted Housing Reform 
and Affordability Act of 1997 to allow rents for properties 
subsidized through the moderate rehabilitation program to be 
renewed at market rates. Under current law, rents are renewed 
at the lesser of adjusted existing rents, fair market rents, or 
market rents.
    Based on data provided by HUD, State housing agencies, and 
public housing agencies, CBO estimates that almost half of the 
52,000 moderate rehabilitation units subsidized by HUD 
currently have contract rents that are below market for 
comparable units. Average monthly rents for such units are 
estimated to be approximately $50 below the market rate. CBO 
estimates that allowing contract rents on these units to be 
marked up to market upon contract expiration would require the 
appropriation of $61 million over the 2003-2007 period, with 
outlays of $54 million over that period.
    Title V: Public Housing. CBO estimates that implementing 
title V would cost $532 million over the 2003-2007 period, 
assuming appropriation of the necessary amounts.
    Third-Party Public Housing Assessment System. Section 503 
would give HUD the authority to develop a prototype of an 
alternative evaluation system for assessing the overall 
performance of housing authorities. The bill would require HUD 
to enter into a contract with an outside entity to develop the 
prototype assessment system. CBO estimates that this provision 
would cost approximately $1 million in fiscal year 2003.
    HOPE VI Authorization of Appropriations. Section 522 would 
authorize the appropriation of such sums as necessary for the 
HOPE VI program through 2004. In 2002, $574 million was 
appropriated for this program. Assuming inflation-adjusted 
appropriations, CBO estimates that the bill would authorize 
$1.2 billion for the 2003-2004 period, with outlays totaling 
$531 million through 2007.
    Title VI: Homeless Housing Programs. CBO estimates that 
implementing title VI would cost about $1.7 billion over the 
2003-2007 period, assuming inflation-adjusted appropriations.
    Title VI would extend the authorizations for the following 
programs through 2004 for such sums as may be necessary:

         LInteragency Council on the Homeless 
        (estimated outlays of $2 million over the 2003-2007 
        period);

         LFederal Emergency Management Agency food and 
        shelter program (estimated outlays of $283 million over 
        the 2003-2007 period);

         LEmergency shelter grants program (estimated 
        outlays of $188 million over the 2003-2007 period);

         LSupportive housing program (estimated outlays 
        of $950 million over the 2003-2007 period);

         LSection 8 assistance for single room 
        occupancy dwellings (estimated outlays of $19 million 
        over the 2003-2007 period); and

         LShelter plus care (estimated outlays of $299 
        million over the 2003-2007 period).

    Title VII: Reauthorization of Native American Housing and 
Self-Determination Act of 1996. Section 701 would authorize the 
appropriation of such sums as necessary through 2007 for Native 
American Housing Block Grants, title VI loan guarantees, and 
training and technical assistance. For 2002, $649 million was 
appropriated for these purposes. Assuming continued funding at 
that level and adjusting for inflation, CBO estimates that 
implementing this provision would cost $2.3 billion over the 
2003-2007 period.
    Title IX: Other Housing Programs. CBO estimates that 
implementing title IX would cost $1.1 billion over the 2003-
2007 period, assuming appropriation of the necessary amounts.
    GNMA Guarantee Fee. GNMA is responsible for guaranteeing 
securities backed by pools of mortgages insured by the Federal 
Government. (These securities are known as mortgage-backed 
securities or MBS). For a fee charged to lenders or issuers of 
the securities, GNMA guarantees the timely payments of 
scheduled principal and interest due on the pooled mortgages 
that back their securities. Under current law, GNMA charges 
lenders or issuers an annual fee of 6 cents for every $100 (6 
basis points) of guaranteed mortgage-backed securities backed 
by single-family loans. Furthermore, a fee increase to 9 basis 
points is scheduled to take effect on October 1, 2004. Section 
901 would repeal that fee increase. CBO estimates that 
eliminating the fee increase would increase the subsidy rate 
associated with the single-family MBS program and increase the 
demand for the program.
    Based on information from GNMA, CBO estimates that the 
collection of lower fees would reduce the subsidy for the 
single-family MBS program from negative 0.56 percent to 
negative 0.37 percent. (As with the FHA single-family program, 
GNMA guarantee fees for the mortgage-backed securities more 
than offset the costs of expected defaults, resulting in net 
collections from the MBS program.) CBO expects that by 
extending the lower fee of 6 basis points, however, GNMA would 
remain more competitive with other MBS programs and continue to 
guarantee more than $100 billion worth of mortgage-backed 
securities, as it does under the current fee structure. Thus, 
while repealing the fee increase would result in a less 
profitable program, this loss would be partially offset by 
additional receipts stemming from an expected increase in 
demand for GNMA services of about 25 percent. On balance, CBO 
estimates that implementing this provision would cost $56 
million in 2005 and $173 million over the 2005-2007 period.
    Assistance for Self-Help Housing Providers. Section 903 
would authorize the appropriation of such sums as necessary for 
the Assistance for Self-Help Housing Providers program through 
2007. For 2002, $22 million was appropriated for this program. 
Assuming continued funding at that level and adjusting for 
anticipated inflation, CBO estimates that implementing this 
provision would cost $69 million over the 2003-2007 period.
    Housing Opportunities for Persons with AIDS. Section 904 
would authorize the appropriation of such sums as necessary 
through 2007 for the Housing Opportunities for Persons with 
Aids program. For 2002, $277 million was appropriated for this 
program. Assuming inflation-adjusted appropriations, CBO 
estimates that the bill would authorize $1.5 billion for the 
2003-2007 period, with outlays of $820 million over that 
period.
Direct Spending
    Section 301 would authorize the use of any amounts that 
remain unobligated as of September 30, 2002, for grants under 
section 202b of the Housing Act of 1959 to carry out a program 
to demonstrate the effectiveness of providing funds to be used 
for the repair, rehabilitation and modernization needs of 
section 236 elderly housing. Based on information provided by 
HUD, CBO estimates that the use of unobligated funds will 
increase outlays by $34 million over the 2003-2008 period.

                      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 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 through 2006 are counted.


              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    HR. 3995 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would impose no costs on State, 
local, or tribal governments. Any significant costs to State, 
local, or tribal governments would result from complying with 
conditions of Federal aid.

                         ESTIMATE PREPARED BY:

Federal Costs:
  Housing Assistance Programs: Chad Chirico (226-2820)
  FHA and GNMA Subsidies: Susanne S. Mehlman (226-2860)
  Self-Help Housing Providers: Lanette Walker (226-2860)
Impact on State, Local, and Tribal Governments: Greg Waring 
    (225-3220)
Impact on the Private Sector: Cecil McPherson (226-2949)

                         ESTIMATE APPROVED BY:

Peter H. Fontaine
Deputy Assistant Director for Budget Analysis

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8, clause 3 of the 
Constitution.

               Section-by-Section Analysis and Discussion

    Section 801. Applicability. Except for certain agencies 
delineated by section 802, the requirements of this title shall 
apply to any proposed rule unless the agency promulgating the 
rule certifies that the proposed rule will not, if given force 
or effect as a final rule, have a significant deleterious 
impact on housing affordability. This certification must be 
published in the Federal Register at the time of publication of 
the general notice of proposed rulemaking for the rule. Section 
801 also applies to any final rule, unless the agency 
promulgating the rule has certified that the rule will not have 
a significant deleterious impact on housing affordability. This 
certification must be published in the Federal Register at the 
time of publication of the final rule.
    Section 802. Exception for Certain Banking Rules. This 
title does not apply to any proposed or final rule relating to 
the safety and soundness of a federally insured depository 
institution; credit union, Federal home loan bank; government 
sponsored enterprise; a Farm Credit institution or foreign bank 
or their branches; agencies or their representative offices 
operating in the United States.
    Section 803. Statement of Proposed Rulemaking. Unless the 
agency has made a certification, the agency shall publish a 
general notice of proposed rulemaking for any proposed rule. 
The notice must state the text of the proposed rule and request 
any interested persons to submit to the agency any written 
analyses, views and any specific alternatives to the proposed 
rule. The agency must also provide an opportunity for 
interested persons to comment prior to promulgation of the 
final rule. In addition, the agency is required to prepare and 
make available an initial housing impact analysis in accordance 
with section 804.
    Section 804. Initial Housing Impact Analysis. For each 
proposed rule, the initial housing impact analysis shall 
consist of a description of the reasons an agency is taking 
that particular action, the objectives and legal basis for such 
rule, and a description of and, where feasible, of the estimate 
of the extent to which the proposed rule would increase the 
cost or reduce the supply of housing or land for residential 
development. The initial analysis must also include a 
description of the relevant Federal rules, which may be 
duplicative or conflict with the proposed rule.
    Section 805. Final Housing Impact Analysis. Whenever an 
agency promulgates a final rule after publication of a general 
notice of proposed rulemaking, the agency shall prepare a final 
housing impact analysis. Each final housing impact analysis 
shall contain a statement of the need for and objectives of the 
rule; a summary of the significant issues, analyses and 
alternatives to the proposed rule raised during the public 
comment period in response to the proposed rule and initial 
housing impact analysis; a summary of the agency assessment of 
the issues, analyses and alternatives, and a statement of any 
changes made in the proposed rule as a result of such comments; 
and a description of and an estimate of the extent to which the 
rule will impact housing affordability or an explanation of why 
no such estimate is available. The agency is required to make 
copies of the final housing impact analysis available to 
members of the public and shall publish in the Federal Register 
such analysis.
    Section 806. Avoidance of Duplicative or Unnecessary 
Analyses. An agency may perform the analyses required by 
sections 804 and 805 in conjunction with any other agenda or 
analyses required by any other law, executive order, or 
directive. In order to avoid unnecessary duplication, an agency 
may consider a series of closely related rules as one rule for 
purposes of sections 804 and 805 requirements.
    Section 807. Preparation of Analyses. In complying with 
sections 804 and 805, an agency may use either a quantifiable 
or numerical description of the effects of a proposed rule or 
alternatives to the proposed rule, or more general descriptive 
statement if quantification is not practicable or reliable.
    Section 808. Effect on Other Law. The requirements of 
sections 804 and 805 do not alter in any way otherwise 
applicable by law to agency action.
    Section 809. Procedure for Waiver or Delay of Completion. 
Section 804 compliance may be waived or delayed by publication 
in the Federal Register of a written finding that the final 
rule cannot be delayed and is being promulgated in response to 
an emergency. Section 805 compliance may be delayed, but not 
waived, for no more than 180 days after publication in the 
Federal Register of the final rule. Section 805 compliance may 
be delayed by publication in the Federal Register of a written 
finding that the final rule cannot be delayed and is being 
promulgated in response to an emergency. If the agency has not 
prepared a final housing impact analysis within 180 days from 
the date of publication of the final rule, such rule shall 
lapse and have no force or effect.
    Section 810. Definitions. (1) the term ``agency'' does not 
include Congress; the courts of the United States; the 
governments of the territories or possessions of the United 
States; the government of the District of Columbia; agencies 
composed of representatives of the parties or of 
representatives of organizations of the parties to the disputes 
determined by them; courts-martial and military commissions; or 
military authority exercised in the field in time of war.
    (2) the term ``families'' has the meaning given such term 
as in section 3 of the United States Housing Act of 1937.
    (3) the term ``housing affordability'' means the quantity 
of housing that is affordable to families having incomes that 
do not exceed 150 percent of the median income of families in 
the area in which the housing is located, adjusting for the 
size of the family.
    (4) the term ``rule'' means any rule for which the agency 
published a general notice of proposed rulemaking pursuant to 
section 553(b) of title 5, United States Code, or any other law 
for which an agency to state and local governments provides an 
opportunity for notice and public comment, with certain 
exceptions.
    (5) the term ``significant'' impact is defined as 
increasing consumer's costs of housing by more than 
$100,000,000 a year.
    Section 811. Development. No later than 1 year after 
enactment, the Secretary of Housing and Urban Development shall 
develop model initial and final housing impact analyses under 
this title which shall be published in the Federal Register. 
The model analyses shall define the primary elements of a 
housing impact analyses to instruct other agencies on how to 
carry out and develop the analyses required under sections 804 
and 805.
    Section 812. Judicial Review. Any determination by an 
agency concerning the applicability of any provisions of this 
title shall not be subject to judicial review. Housing impact 
analyses prepared in accordance with this title are not subject 
to judicial review. Title VIII does not bar judicial review of 
any other impact statement required by any other law.

         Changes in Existing Law Made by the Bill, as Reported

    The bill was referred to this Committee for consideration 
of such provisions of the bill as fall within the jurisdiction 
of this Committee pursuant to clause 1(k) of rule X of the 
Rules of the House of Representatives. Such provisions under 
the consideration of this Committee, as reported by the 
Committee, does not make any changes in existing law.

                           Markup Transcript



                            BUSINESS MEETING

                         TUESDAY, JULY 23, 2002

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:00 a.m., in 
Room 2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner, Jr. [Chairman of the Committee] presiding.

           *       *       *       *       *       *       *

    The next item on the agenda is the adoption of H.R. 3995, 
the ``Housing Affordability for America Act of 2002.''
    The Chair recognizes the gentleman from Georgia, Mr. Barr, 
Chairman of the Subcommittee on Commercial and Administrative 
Law.
    Mr. Barr. Mr. Chairman, the Subcommittee on Commercial and 
Administrative Law reports favorably on H.R. 3995. On March 19 
of this year, Congresswoman Marge Roukema introduced H.R. 3995.
    Chairman Sensenbrenner. Without objection, H.R. 3995 will 
be considered as read and open for amendment at any point.
    [The bill, H.R. 3995, follows:]
      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


    Chairman Sensenbrenner. The Chair recognizes the gentleman 
from Georgia, Mr. Barr, to strike the last word.
    Mr. Barr. Thank you, Mr. Chairman.
    Mr. Chairman, the Subcommittee on Commercial and 
Administrative Law reports favorably on H.R. 3995. On March 19 
of this year, Congresswoman Marge Roukema introduced H.R. 3995, 
the ``Housing Affordability for America Act of 2002,'' and 
since its introduction, 73 Members have co-sponsored the bill.
    This bill concerns a topic that affects everyone: 
affordable housing for Americans.
    Homeownership is an investment in our neighborhoods and our 
society. It stabilizes and strengthens communities. Yet, while 
levels of homeownership are at an all-time high, the dream of 
affordable housing still remains out of reach for many 
Americans. This bill recognizes this problem and seeks to make 
the dream a reality for more Americans.
    The Financial Services Committee exercised its jurisdiction 
over all but one portion of this bill. Its Subcommittee on 
Housing and Community Opportunity held hearings and markup on 
H.R. 3995, and on July 10, the Committee approved the bill.
    The Judiciary Committee retains jurisdiction over title 
VIII of H.R. 3995. And on July 16th, the Subcommittee on 
Commercial and Administrative Law reported the bill to the full 
Committee by voice vote without amendment.
    That title is virtually identical to H.R. 2753, which was 
introduced on August 2 of last year by my distinguished 
colleague from Wisconsin, Mr. Green.
    Title VIII simply requires Federal agencies to prepare and 
publish a housing impact analysis when noticing proposed rules 
for public comment when those rules have an impact on housing 
affordability in excess of $100 million. Under title VIII, 
agencies publishing notice of proposed rulemaking for a 
proposed rule will be required to prepare an initial housing 
impact analysis.
    This analysis would include: one, reasons why the agency 
action is being considered; two, the objectives of and legal 
basis for the proposed rule; and, three, a description and an 
estimate of the extent to which the proposed rule would 
increase the cost or reduce the supply of housing or land for 
residential development.
    To accompany the promulgation of a final rule, title VIII 
would require a final housing impact analysis statement to 
summarize and assess the issues and alternatives raised during 
the public comment period. The final impact analysis would 
include a statement of any changes made in the proposed rule as 
a result of such comments and describe and estimate the extent 
to which the rule will impact housing affordability.
    Title VIII will not unduly burden agencies. Agencies which 
propose rules that will not have an economic impact on housing 
in excess of $100 million need not prepare impact analysis 
statements. In such cases, the head of the agency must simply 
provide a certification to that effect and a supporting factual 
statement for publication in the Federal Register.
    Title VIII also provides procedures for the delay of 
completion of an impact analysis and, in the case of proposed 
rules, for the waiver of the impact analyses when rules are 
being promulgated in response to an emergency.
    Our recognition of the need for housing impact analyses 
when promulgating agency rules is not new. In the 106th 
Congress, the House approved H.R. 1776, the ``American 
Homeownership and Economic Opportunity Act of 2000,'' a bill 
containing a more exacting version of the impact analysis 
requirements contained in title VIII. That bill was approved by 
a vote of 417 to 8 but did not come up for vote in the Senate.
    Title VIII of H.R. 3995 will hopefully lead to rules which 
make affordable housing less burdensome to acquire and more 
accessible to more Americans. It should be supported, and I 
urge its adoption.
    I yield back.
    Chairman Sensenbrenner. The gentleman from North Carolina, 
Mr. Watt, the Ranking Member.
    Mr. Watt. Thank you, Mr. Chairman.
    The part of this bill over which our Subcommittee and over 
which this full Committee has jurisdiction is very limited and 
noncontroversial. It will probably add some more paperwork at 
the Federal level, but with a valuable purpose.
    And I encourage my colleagues to support the bill and yield 
back.
    [The prepared statement of Ms. Jackson Lee follows:]
    
    
    Chairman Sensenbrenner. Are there amendments to title VIII 
of the bill?
    If there are not, the Chair notes the presence of a 
reporting quorum. The question occurs on the motion to report 
the bill H.R. 3995 favorably.
    Those in favor will say aye.
    Opposed, no.
    The ayes appear to have it. The ayes have it, and the 
motion to report favorably is agreed to.
    Without objection, the Chairman is authorized to move to go 
to conference pursuant to House rules. Without objection, the 
staff is directed to make any technical and conforming changes. 
And all Members will be given 2 days, as provided by the rules, 
in which to submit additional, dissenting, supplemental, or 
minority views.