SECTION 1.  The department of housing and community development shall implement a 5 year demonstration program to provide grants for the development of underutilized and surplus land owned by local housing authorities; provided further, that housing authorities with state-aided housing developments pursuant to chapter 200 of the acts of 1948, chapter 667 of the acts of 1954 or chapter 705 of the acts of 1966 shall be eligible to participate in demonstration program; provided further, that the department shall establish a 5 member advisory committee, to consist of the director of the department or his designee, 1 member selected by the Massachusetts Chapter of the National Association of Housing and Redevelopment Officials, 1 member selected by the Massachusetts Union of Public Housing Tenants and 3 additional members chosen by the department to provide advice and recommendations to the department regarding regulations to implement the demonstration program; provided further, that grants shall be awarded on a competitive basis; provided further, that the department may provide to recipients of demonstration grants such additional regulatory relief as is required to further the objectives of the demonstration program; provided further, that funds shall be made available for technical assistance provided by the Massachusetts Housing Partnership Fund established pursuant to section 35 of chapter 405 of the acts of 1985 to recipients of demonstration grants and for evaluation of the demonstration; provided further, that the department shall promulgate regulations for the implementation, administration and enforcement of this item within 90 days after the effective date of this act; provided, however, that the regulations shall: (i) survey housing authorities for the availability of surplus and underutilized land; (ii) solicit proposals that propose new affordable housing units on surplus or underutilized public housing sites or other land owned by the housing authority; and (iii) provide for incentives for the development of surplus and underutilized land and provided further, that the department shall report to the house and senate committees on ways and means and the joint committee on housing on the progress of the demonstration program within 90 days after promulgation of the regulations and annually thereafter.

SECTION  2.  Section 2 of chapter 119 of the acts of 2008 is hereby amended by striking out Item 7004-0033 and inserting in place thereof the following section:-

7004-0033.  For the purpose of state financial assistance in the form of grants for projects undertaken pursuant to clause (j) of section 26 of chapter 121B of the General Laws; provided, that contracts entered into by the department of housing and community development for those projects may include, but shall not be limited to, projects providing for renovation, remodeling, reconstruction, redevelopment and hazardous material abatement, including asbestos and lead paint, and for compliance with state codes and laws and for adaptations necessary for compliance with the Americans with Disabilities Act, the provision of day care facilities, learning centers and teen service centers and the adaptation of units for families and persons with disabilities; provided further, that priority shall be given to projects undertaken for the purpose of compliance with state codes and laws or for other purposes related to the health and safety of residents; provided further, that funds may be expended from this item to make such modifications to congregate housing units as may be necessary to increase the occupancy rate of those units; provided further, that the department, in consultation with housing authorities, may establish a program to provide predictable funds to be used flexibly by housing authorities for capital improvements to extend the useful life of state-assisted public housing; provided further that not less than $50,000,000 shall be expended for a 5 year demonstration program to provide grants for the development of underutilized and surplus land owned by local housing authorities provided further, that not less than 25 per cent shall be used to fund projects which preserve or produce housing for families and individuals with incomes of not more than 30 per cent of the area median income, as defined by the United States Department of Housing and Urban Development; and provided further, that a capital reserve account shall be administered by the department........................................... $500,000,000.