SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Mark-to-Market 
Extension Act of 2006''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
Sec. 4. Extension of Mark-to-Market program.
Sec. 5. Exception rents.
Sec. 6. Otherwise eligible projects with at-or-below-market rents.
Sec. 7. Disaster-damaged eligible projects.
Sec. 8. Period of eligibility for nonprofit debt relief.
Sec. 9. Effective date.

SEC. 2. PURPOSES.

    The purpose of this Act is to--
            (1) continue the progress of the Multifamily Assisted 
        Housing Reform and Affordability Act of 1997, as amended by the 
        Mark-To-Market Extension Act of 2001;
            (2) expand eligibility for Mark-to-Market restructuring so 
        as to further the preservation of affordable housing in a cost-
        effective manner; and
            (3) provide for the preservation and rehabilitation of 
        projects damaged by Hurricanes Katrina, Rita, and Wilma, or by 
        other natural disasters.

SEC. 3. DEFINITIONS.

    Section 512 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by adding 
at the end the following:
            ``(20) Disaster-damaged eligible project.--
                    ``(A) In general.--The term `disaster-damaged 
                eligible project' means an otherwise eligible 
                multifamily housing project--
                            ``(i) that is located in a county that was 
                        designated a major disaster area on or after 
                        January 1, 2005, by the President pursuant to 
                        title IV of the Robert T. Stafford Disaster 
                        Relief and Emergency Assistance Act (42 U.S.C. 
                        5121 et seq.);
                            ``(ii) whose owner carried casualty and 
                        liability insurance covering such project in an 
                        amount required by the Secretary;
                            ``(iii) that suffered damages not covered 
                        by such insurance that the Secretary determines 
                        is likely to exceed $5,000 per unit in 
                        connection with the natural disaster that was 
                        the subject of the designation described in 
                        subparagraph (A); and
                            ``(iv) whose owner requests restructuring 
                        of the project not later than 2 years after the 
                        date that such damage occurred.
                    ``(B) Rule of construction.--A disaster-damaged 
                eligible project shall be eligible for amounts under 
                this Act without regard to the relationship between 
                rent levels for the assisted units in such project and 
                comparable rents for the relevant market area.''.

SEC. 4. EXTENSION OF MARK-TO-MARKET PROGRAM.

    Section 579 of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by striking 
``October 1, 2006'' each place that term appears and inserting 
``October 1, 2011''.

SEC. 5. EXCEPTION RENTS.

    Section 514(g)(2) of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended--
            (1) by inserting ``disaster-damaged eligible projects and'' 
        after ``waive this limit''; and
            (2) by striking ``five percent'' and inserting ``9 
        percent''.

SEC. 6. OTHERWISE ELIGIBLE PROJECTS WITH AT-OR-BELOW-MARKET RENTS.

    Section 512(2)(A) of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended--
            (1) by inserting ``(i)'' after ``(A)'';
            (2) by striking the semicolon and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(ii) with rents below the level specified in 
                clause (i) if the Secretary determines that--
                            ``(I) such property is worthy of 
                        preservation; and
                            ``(II) treating such project as an eligible 
                        multifamily housing project will be cost-
                        effective to the Secretary in relation to 
                        alternative preservation options.''.

SEC. 7. DISASTER-DAMAGED ELIGIBLE PROJECTS.

    (a) Market Rent Determinations.--Section 514(g)(1)(B) of the 
Multifamily Assisted Housing Reform and Affordability Act of 1997 (42 
U.S.C. 1473f note) is amended by striking ``determined, are equal'' and 
inserting the following: ``determined--
                            ``(i) with respect to a disaster-damaged 
                        eligible property, are equal to 100 percent of 
                        the fair market rents for the relevant market 
                        area (as such rents were in effect at the time 
                        of such disaster; and
                            ``(ii) with respect to other eligible 
                        multifamily housing projects, are equal''.
    (b) Owner Investment.--Section 517(c) of the Multifamily Assisted 
Housing Reform and Affordability Act of 1997 (42 U.S.C. 1473f note) is 
amended by adding at the end the following:
            ``(3) Properties damaged by natural disasters.--With 
        respect to a disaster-damaged eligible property, the owner 
        contribution toward rehabilitation needs shall be determined in 
        accordance with paragraph (2)(C).''.

SEC. 8. PERIOD OF ELIGIBILITY FOR NONPROFIT DEBT RELIEF.

    Section 517(a)(5) of the Multifamily Assisted Housing Reform and 
Affordability Act of 1997 (42 U.S.C. 1473f note) is amended by adding 
at the end the following: ``If such purchaser acquires such project 
subsequent to the date of recordation of the affordability agreement 
described in section 514(e)(6)--
            ``(1) such purchaser shall acquire such project on or 
        before the later of--
                    ``(A) 5 years after the date of recordation of the 
                affordability agreement; or
                    ``(B) 2 years after the date of enactment of the 
                Mark-to-Market Extension Act of 2006; and
            ``(2) the Secretary shall have received, and determined 
        acceptable, such purchaser's application for modification, 
        assignment, or forgiveness prior to the acquisition of the 
        project by such purchaser.''.

SEC. 9. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect on 
the earlier of--
            (1) the date of enactment of this Act; or
            (2) September 30, 2006.
Mark-to-Market Extension Act of 2006 - Amends the Multifamily Assisted Housing Reform and Affordability Act of 1997 to reauthorize through FY2011: (1) the Federal Housing Administration (FHA)-insured MultifamilyHousing Mortgage and Housing Assistance Restructuring (Mark-to-Market) program; and (2) the Office of Multifamily Housing Assistance Restructuring.

Permits the Secretary of Housing and Urban Development to waive rent level limits for: (1) disaster-damaged eligible projects; and (2) up to 9% (currently 5%) of all units subject to restructured mortgages in any fiscal year, based on certain findings of special need.

Redefines eligible multifamily housing project to include properties worthy of cost-effective preservation even though their rents fall below a level otherwise authorized that, on an average per unit or per room basis, exceeds the rent of comparable properties in the same market area.

Requires each mortgage restructuring and rental assistance sufficiency plan to determine, for units assisted with project-based assistance in eligible multifamily housing projects, adjusted rent levels for disaster-damaged eligible projects equal to 100% of the fair market rents for the relevant market area.

Revises requirements for an approved mortgage restructuring and rental assistance sufficiency plan with respect to modification or forgiveness of all or part of a second mortgage held by the Secretary (debt relief) if the project concerned is acquired by a tenant organization or tenant-endorsed community-based nonprofit or public agency. Sets forth requirements for alternative periods of eligibility for such nonprofit debt relief if the purchaser acquires the project subsequent to the date of recordation of the related affordability agreement.
A bill to extend for 5 years the Mark-to-Market program of the Department of Housing and Urban Development.