[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1329 Introduced in Senate (IS)]

  1st Session
                                S. 1329

   To amend title 38, United States Code, to provide for educational 
            assistance to veterans, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             October 17 (legislative day, October 10), 1995

   Mr. Dole introduced the following bill; which was read twice and 
              referred to the Committee on Armed Services

_______________________________________________________________________

                                 A BILL


 
   To amend title 38, United States Code, to provide for educational 
            assistance to veterans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Servicepersons Readjustment Act of 
1995''.

                    TITLE I--READJUSTMENT ASSISTANCE

SEC. 101. EDUCATIONAL ASSISTANCE.

    (a) In General.--Title 38, United States Code, is amended by 
inserting after chapter 32 the following new chapter:

      ``CHAPTER 33--SERVICEPERSONS EDUCATIONAL ASSISTANCE PROGRAM

                        ``SUBCHAPTER I--PURPOSES

``Sec.
``3301. Purposes.
             ``SUBCHAPTER II--BASIC EDUCATIONAL ASSISTANCE

``3311. Basic educational assistance entitlement: service on active 
                            duty.
``3312. Basic educational assistance entitlement: service as a Reserve.
``3313. Duration of basic educational assistance.
``3314. Payment of basic educational assistance.
``3315. Amount of basic educational assistance.
     ``SUBCHAPTER III--TIME LIMITATION FOR USE OF ELIGIBILITY AND 
           ENTITLEMENT; GENERAL AND ADMINISTRATIVE PROVISIONS

``3321. Time limitation for use of eligibility and entitlement.
``3322. Bar to duplication of educational assistance benefits.
``3323. Program administration.

                        ``SUBCHAPTER I--PURPOSES

``Sec. 3301. Purposes
    ``The purposes of this chapter are--
            ``(1) to provide a new educational assistance program to 
        assist in the readjustment of members of the Armed Forces to 
        civilian life after their separation from military service; and
            ``(2) to provide supplemental assistance to such members to 
        facilitate that assistance.

             ``SUBCHAPTER II--BASIC EDUCATIONAL ASSISTANCE

``Sec. 3311. Basic educational assistance entitlement: service on 
              active duty
    ``(a) Except as provided in subsection (c), each individual--
            ``(1) who first becomes a member of the Armed Forces or 
        first enters on active duty as a member of the Armed Forces 
        after April 1, 1996, and--
                    ``(A) who serves as the individual's initial 
                obligated period of active duty at least 2 years of 
                continuous active duty in the Armed Forces; or
                    ``(B) who serves in the Armed Forces and is 
                discharged or released from active duty--
                            ``(i) for a service-connected disability, 
                        for a medical condition which preexisted such 
                        service on active duty and which the Secretary 
                        determines is not service-connected, for 
                        hardship, or for a physical or mental condition 
                        that was not characterized as a disability and 
                        did not result from the individual's own 
                        willful misconduct but did interfere with the 
                        individual's performance of duty (as determined 
                        by the Secretary of the military department 
                        concerned in accordance with regulations 
                        prescribed under section 3011(a)(1)(A)(ii)(I) 
                        of this title);
                            ``(ii) for the convenience of the 
                        Government in the case of an individual who 
                        completed not less than 20 months of continuous 
                        active duty, if the initial obligated period of 
                        active duty of the individual was less than 2 
                        years, or in the case of an individual who 
                        completed not less than 30 months of continuous 
                        active duty if the initial obligated period of 
                        active duty of the individual was at least 2 
                        years; or
                            ``(iii) involuntarily for the convenience 
                        of the Government as a result of a reduction in 
                        force (as determined by the Secretary of the 
                        military department concerned in accordance 
                        with regulations prescribed under section 
                        3011(a)(1)(A)(ii)(III) of this title);
            ``(2) who has completed the requirements of a secondary 
        school diploma (or equivalency certificate) not later than the 
        original ending date of the individual's initial obligated 
        period of active duty, regardless of whether the individual is 
        discharged or released from active duty on such date;
            ``(3) who is not a graduate of a military academy or the 
        recipient of financial assistance from the Government for 
        participation in a Reserve Officers' Training Corps program; 
        and
            ``(4) who, after the completion of the service described in 
        paragraph (1)--
                    ``(A) continues on active duty;
                    ``(B) is discharged from active duty with an 
                honorable discharge;
                    ``(C) is released from service on active duty 
                characterized by the Secretary concerned as honorable 
                service and is placed on the retired list, is 
                transferred to the Fleet Reserve or Fleet Marine Corps 
                Reserve, or is placed on the temporary disability 
                retired list; or
                    ``(D) is released from active duty for further 
                service in a reserve component of the Armed Forces 
                after service on active duty characterized by the 
                Secretary concerned as honorable service;
is entitled to basic educational assistance under this chapter.
    ``(b)(1) The basic pay of any individual described in subsection 
(a) who does not make an election under subsection (c) shall be reduced 
by $100 for each month of a period (as designated by the individual) of 
months in which the individual is entitled to such pay. The period 
shall begin upon the commencement of the person's initial period of 
obligated active duty as described in subsection (a)(1). The period 
shall be a multiple of 12 months and shall be not less than 12 months 
or more than 48 months.
    ``(2) Any amount by which the basic pay of an individual is reduced 
under this section shall revert to the Treasury and shall not, for 
purposes of any Federal law, be considered to have been received by or 
to be within the control of the individual.
    ``(c) An individual described in subsection (a) may make an 
election not to receive educational assistance under this chapter. Any 
such election shall be made at the time the individual initially enters 
on active duty as a member of the Armed Forces. Any individual who 
makes such an election is not entitled to educational assistance and 
supplemental assistance under this chapter.
``Sec. 3312. Basic educational assistance entitlement: service as a 
              Reserve
    ``(a) Except as provided in subsection (b), each individual--
            ``(1)(A) who--
                    ``(i) first becomes a member of a reserve component 
                after April 1, 1996; or
                    ``(ii) first enters on active duty as a member of 
                the Armed Forces after that date;
            ``(B) beginning within 1 year after first becoming such a 
        member or first entering on such duty, enters into an agreement 
        to serve at least 6 years of continuous duty in a reserve 
        component; and
            ``(C) serves at least 6 years of such duty during which the 
        individual participates satisfactorily in training as 
        determined by the Secretary concerned;
            ``(2) who, before completion of the duty described in 
        paragraph (1) pursuant to the agreement in that paragraph, has 
        completed the requirements of a secondary school diploma (or an 
        equivalency certificate);
            ``(3) who is not a graduate of a military academy or the 
        recipient of financial assistance from the Government for 
        participation in a Reserve Officers' Training Corps program; 
        and
            ``(4) who, after completion of the duty in a reserve 
        component described in paragraph (1) pursuant to the agreement 
        in that paragraph is discharged from service with an honorable 
        discharge, is placed on the retired list, or continues on 
        active duty or in a reserve component;
is entitled to basic educational assistance under this chapter.
    ``(b)(1) The requirement of 6 years of service under paragraph (1) 
of subsection (a) pursuant to an agreement referred to in such 
paragraph is not applicable to an individual--
            ``(A) who, during the active duty service described in such 
        paragraph, was discharged or released from active duty in the 
        Armed Forces for a service-connected disability, for a medical 
        condition which preexisted such service on active duty and 
        which the Secretary determines is not service connected, or for 
        a physical or mental condition not characterized as a 
        disability, as described in section 3011(a)(1)(A)(ii)(I) of 
        this title, if the individual was obligated, at the beginning 
        of such active duty service, to serve such 6 years of service;
            ``(B) who, during the 6 years of service, is discharged or 
        released from service in a reserve component (i) for a service-
        connected disability, (ii) for a medical condition which 
        preexisted the individual's becoming a member of the reserve 
        component and which the Secretary determines is not service 
        connected, (iii) for hardship, (iv) in the case of an 
        individual discharged or released after 30 months of such 
        service for the convenience of the Government, (v) 
        involuntarily for the convenience of the Government as a result 
        of a reduction in force (as determined by the Secretary of the 
        military department concerned in accordance with regulations 
        prescribed under section 3012(b)(1)(B)(ii)(V) of this title), 
        or (VI) for a physical or mental condition not characterized as 
        a disability, as described in section 3011(a)(1)(A)(ii)(I) of 
        this title; or
            ``(C) who, before completing the 6 years of service 
        described in such paragraph, ceases to be a member of any 
        reserve component during the period beginning on October 1, 
        1991, and ending on September 30, 1999, by reason of the 
        inactivation of the person's unit of assignment.
    ``(2) In the case of an individual described in paragraph (1) of 
subsection (a) who begins service in the Selected Reserve within one 
year after completion of the service described in such paragraph 
pursuant to an agreement referred to in such paragraph, the continuity 
of service of such individual as a member of the Selected Reserve shall 
not be considered to be broken--
            ``(A) by any period of time (not to exceed a maximum period 
        prescribed by the Secretary concerned by regulation) during 
        which the member is not able to locate a unit of the Selected 
        Reserve of the member's Armed Force that the member is eligible 
        to join or that has a vacancy; or
            ``(B) by any other period of time (not to exceed a maximum 
        period prescribed by the Secretary concerned by regulation) 
        during which the member is not attached to a unit of the 
        Selected Reserve that the Secretary concerned, pursuant to 
        regulations, considers to be inappropriate to consider for such 
        purpose.
    ``(c)(1) The basic pay of any individual described in subsection 
(a) who does not make an election under subsection (d) shall be reduced 
by $50 for each month of a period (as designated by the individual) of 
the months in which the individual is entitled to such pay. The period 
shall begin upon the commencement of the person's initial period of 
obligated duty in a reserve component as described in subsection 
(a)(1). The period shall be a multiple of 12 months and shall be not 
less than 12 months or more than 48 months.
    ``(2) Any amount by which the basic pay of an individual is reduced 
under this section shall revert to the Treasury and shall not, for 
purposes of any Federal law, be considered to have been received by or 
to be within the control of the individual.
    ``(d) An individual described in subsection (a) may make an 
election not to receive educational assistance under this chapter. Any 
such election shall be made at the time the individual initially enters 
on active duty as a member of the Armed Forces. Any individual who 
makes such an election is not entitled to educational assistance and 
supplemental assistance under this chapter.
``Sec. 3313. Duration of basic educational assistance
    ``(a) Subject to section 3695 of this title, each individual 
entitled to basic educational assistance under section 3311 of this 
title is entitled to 1 month of educational assistance benefits under 
this chapter for each month of continuous active duty served by the 
individual for which the basic pay of the individual is reduced by 
operation of subsection (b) of such section 3311.
    ``(b) Subject to section 3695 of this title, each individual 
entitled to basic educational assistance under section 3312 of this 
title is entitled to 1 month of educational assistance benefits under 
this chapter for each month of duty in a reserve component served by 
the individual for which the basic pay of the individual is reduced by 
operation of subsection (b) of such section 3312.
    ``(c) No individual may receive basic educational assistance 
benefits under this chapter for a period in excess of 48 months.
``Sec. 3314. Payment of basic educational assistance
    ``(a) The Secretary shall pay to each individual entitled to basic 
educational assistance under this chapter a basic educational 
assistance allowance to be used by the individual for the purposes 
described in subsection (b).
    ``(b) Subject to subsection (c), an individual shall use a basic 
educational assistance allowance under this chapter for the following 
purposes:
            ``(1) To pay the outstanding interest and principal on 
        educational loans of the individual.
            ``(2) To meet the costs (including subsistence, tuition, 
        fees, supplies, books, equipment, and other educational costs 
        approved by the Secretary) of a program of institutional 
        training, including a program of institutional training at an 
        institution of higher learning and a program of institutional 
        training that does not lead to a standard college degree.
            ``(3) To meet the costs of an approved on-the-job training 
        program or apprentice training program.
            ``(4) To meet the costs of a program of correspondence 
        courses.
            ``(5) To meet the costs of a cooperative training program.
            ``(6) To meet the costs of tutorial assistance.
            ``(7) To meet the costs of other educational programs, 
        training programs, or other programs that the Secretary 
        determines appropriate to achieve the purposes for which 
        educational assistance is provided under this chapter.
    ``(c) An individual may not use a basic educational assistance 
allowance under this section unless such use is approved by the 
Secretary in accordance with such regulations as the Secretary shall 
prescribe. To the maximum extent practicable, the regulations shall 
conform to the provisions on approval of courses and programs of 
education set forth in chapter 36 of this title, and the regulations 
prescribed thereunder.
``Sec. 3315. Amount of basic educational assistance
    ``(a)(1) Subject to subsection (b), a basic assistance allowance 
under this chapter shall be paid as follows:
            ``(A) In the case of an individual entitled to the 
        allowance under section 3311 of this title--
                    ``(i) at the monthly rate of $800 for a program 
                (including tutorial assistance) referred to in section 
                3315(b) of this title pursued on a full-time basis;
                    ``(ii) at the monthly rate of $600 for such a 
                program pursued on a three-quarters time basis; or
                    ``(iii) at the monthly rate of $400 for such a 
                program pursued on less than a three-quarters time 
                basis.
            ``(B) In the case of an individual entitled to the 
        allowance under section 3312 of this title--
                    ``(i) at the monthly rate of $400 for a program 
                (including tutorial assistance) referred to in section 
                3315(b) of this title pursued on a full-time basis;
                    ``(ii) at the monthly rate of $300 for such a 
                program pursued on a three-quarters time basis; or
                    ``(iii) at the monthly rate of $200 for such a 
                program pursued on less than a three-quarters time 
                basis.
    ``(2) An individual receiving educational assistance benefits under 
this chapter for purposes of paying outstanding interest and principal 
on educational loans shall be considered to be an individual pursuing a 
program on a full-time basis.
    ``(b) With respect to any fiscal year beginning after fiscal year 
1997, the Secretary shall continue to pay, in lieu of the rates payable 
under paragraph (1) or (2) of subsection (a), the monthly rates payable 
under this subsection for the previous fiscal year and shall provide, 
for any such fiscal year, a percentage increase in such rates equal to 
the percentage by which--
            ``(1) the Consumer Price Index (all items, United States 
        city average) for the 12-month period ending on the June 30 
        preceding the beginning of the fiscal year for which the 
        increase is made, exceeds
            ``(2) such Consumer Price Index for the 12-month period 
        preceding the 12-month period described in paragraph (1).

     ``SUBCHAPTER III--TIME LIMITATION FOR USE OF ELIGIBILITY AND 
           ENTITLEMENT; GENERAL AND ADMINISTRATIVE PROVISIONS

``Sec. 3321. Time limitation for use of eligibility and entitlement
    ``(a) The period during which an individual entitled to educational 
assistance under this chapter may use such individual's entitlement 
expires at the end of the 10-year period beginning on the date of such 
individual's initial discharge or release from active duty or service 
in a reserve component, as the case may be.
    ``(b) In the case of an individual eligible for educational 
assistance under this chapter--
            ``(1) who was prevented from pursuing the individual's 
        chosen program of education before the expiration of the 10-
        year period for use of entitlement under this chapter otherwise 
        applicable under this section because of a physical or mental 
        disability which was not the result of the individual's own 
        willful misconduct, and
            ``(2) who applies for an extension of such 10-year period 
        within 1 year after (A) the last day of such period, or (B) the 
        last day on which the individual was so prevented from pursuing 
        the program, whichever is later,
the 10-year period shall not run with respect to the individual during 
the period of time that the individual was so prevented from pursuing 
the program and the 10-year period will again begin running on the 
first day following the individual's recovery from the disability on 
which it is reasonably feasible, as determined under regulations 
prescribed by the Secretary, for the individual to initiate or resume 
pursuit of a program of education or training with educational 
assistance under this chapter.
    ``(c)(1) If an individual eligible for educational assistance under 
this chapter is enrolled under this chapter in an educational 
institution regularly operated on the quarter or semester system and 
the period of such individual's entitlement under this chapter would, 
under section 3313, expire during a quarter or semester, such period 
shall be extended to the end of such quarter or semester.
    ``(2) If an individual eligible for educational assistance under 
this chapter is enrolled under this chapter in an educational 
institution not regularly operated on the quarter or semester system 
and the period of such individual's entitlement under this chapter 
would, under section 3313, expire after a major portion of the course 
is completed, such period shall be extended to the end of the course or 
for 12 weeks, whichever is the lesser period of extension.
``Sec. 3322. Bar to duplication of educational assistance benefits
    ``An individual entitled to educational assistance under this 
chapter who is eligible for educational assistance under a program 
under chapter 31, 32, or 35 of this title, under chapter 106 or 107 of 
title 10, or under the Hostage Relief Act of 1980 (Public Law 96-449; 5 
U.S.C. 5561 note) may not receive assistance under two or more of such 
programs concurrently but shall elect (in such form and manner as the 
Secretary may prescribe) under which program to receive educational 
assistance.
``Sec. 3323. Program administration
    ``(a) The Secretary shall prescribe regulations governing the 
provision of educational assistance and supplemental assistance under 
this chapter and otherwise governing the administration of this 
chapter. To the maximum extent practicable, and except as provided in 
subsection (b), such regulations shall be consistent with relevant 
provisions on the administration of educational assistance benefits 
under chapters 30, 34, and 36 of this title.
    ``(b) Notwithstanding any limitation on the period of operation of 
an educational institution under section 3689 of this title, or under 
regulations prescribed thereunder, the Secretary may approve the 
enrollment of an eligible individual under this chapter in a course 
offered by a proprietary profit educational institution at a subsidiary 
branch or extension of such institution in operation for less than two 
years if--
            ``(1) the main branch of such institution has been in 
        operation for more than two years at the time the course is 
        offered; and
            ``(2) another subsidiary branch or extension of such 
        institution has been in operation for more than two years at 
        such time''.
    (b) Clerical Amendments.--The table of chapters at the beginning of 
title 38, United States Code, and at the beginning of part III of such 
title, are each amended by inserting after the item relating to chapter 
31 the following new item:

``33. SERVICEPERSONS EDUCATIONAL ASSISTANCE PROGRAM.........    3301''.
    (c) Conforming Amendment.--Paragraph (4) of section 3695(a) of such 
title is amended to read as follows:
            ``(4) Chapters 30, 32, 33, 34, 35, and 36 of this title, 
        and the former chapter 33 of this title that was repealed 
        before the date of the enactment of the Servicepersons 
        Readjustment Act of 1995.''.

SEC. 102. TAX TREATMENT OF EDUCATIONAL ASSISTANCE.

    (a) Tax Credit for Unused Educational Assistance.--
            (1) In general.--Subpart C of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 (relating to 
        refundable credits) is amended by redesignating section 35 as 
        section 36 and by inserting after section 34 the following new 
        section:

``SEC. 35. UNUSED PORTION OF VETERANS EDUCATIONAL ASSISTANCE.

    ``(a) Allowance of Credit.--In the case of an individual--
            ``(1) who is entitled to educational assistance under 
        chapter 33 of title 38, United States Code, and
            ``(2) whose eligibility for such assistance expires under 
        section 3331 of such title during the taxable year,
there shall be allowed as a credit against the tax imposed by this 
subtitle for the taxable year an amount equal to the unused portion of 
such educational assistance.
    ``(b) Unused Portion.--For purposes of subsection (a), the term 
`unused portion' means, with respect to any individual, an amount equal 
to the lesser of--
            ``(1) the total amount of reductions in the individual's 
        basic pay under chapter 33 of title 38, United States Code, by 
        reason of the individual having elected to receive educational 
        assistance under such chapter, or
            ``(2) the excess (if any) of--
                    ``(A) the total amount of basic educational 
                assistance which the individual is entitled to under 
                subchapter II of chapter 33 of title 38, United States 
                Code, over
                    ``(B) the sum of--
                            ``(i) the total amounts received by such 
                        individual under subchapter II of chapter 33 of 
                        title 38, United States Code, and
                            ``(ii) the total amounts received by such 
                        individual under any program described in 
                        section 3332 of such title which the individual 
                        elects to receive in lieu of amounts described 
                        in clause (i).''
            (2) Conforming amendment.--The table of sections for 
        subpart C of part IV of subchapter A of chapter 1 of such Code 
        is amended by striking the item relating to section 35 and 
        inserting the following new items:

``Sec. 35. Unused portion of veterans educational assistance.
``Sec. 36. Overpayments of tax.''
    (b) Exclusion of Certain Amounts.--Section 134 of the Internal 
Revenue Code of 1986 (relating to certain military benefits) is amended 
by adding at the end the following new subsection:
    ``(c) Certain Educational Benefits.--
            ``(1) In general.--For purposes of this section, any 
        educational assistance provided under chapter 33 of title 38, 
        United States Code, shall be treated as a qualified military 
        benefit.
            ``(2) No constructive receipt.--No amount shall be included 
        in the gross income of any individual solely because the 
        individual's basic pay is reduced under chapter 33 of title 38, 
        United States Code, by reason of the individual having elected 
        to receive educational assistance under such chapter.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of enactment of this Act.

                           TITLE II--FUNDING

SEC. 201. VETERANS PROGRAMS.

    (a) Extension of Authority To Require Copayments in Exchange for 
Receiving Health-Care Benefits.--
            (1) Hospital and medical care.--Section 8013(e) of the 
        Omnibus Budget Reconciliation Act of 1990 (38 U.S.C. 1710 note) 
        is amended by striking out ``September 30, 1998'' and inserting 
        in lieu thereof ``September 30, 2000''.
            (2) Outpatient medications.--Section 1722A(c) of title 38, 
        United States Code, is amended by striking out ``September 30, 
        1998'' and inserting in lieu thereof ``September 30, 2000''.
    (b) Extension of Authority for Medical Care Cost Recovery.--Section 
1729(a)(2)(E) of such title is amended in the matter preceding clause 
(i) by striking out ``October 1, 1998,'' and inserting in lieu thereof 
``October 1, 2000,''.
    (c) Repeal of Prohibition on Offsets for Liabilities on Loan 
Guarantees.--(1) Section 3726 of such title is repealed.
    (2) The table of sections at the beginning of chapter 37 of such 
title is amended by striking out the item relating to section 3726.
    (d) Extension of Authority To Collect Increased Loan Fees.--
            (1) Home loan fees.--Section 3729(a)(4) of such title is 
        amended by striking out ``October 1, 1998,'' and inserting in 
        lieu thereof ``October 1, 2000,''.
            (2) Fee for multiple use of housing assistance.--Section 
        3729(a)(5)(C) of such title is amended by striking out 
        ``October 1, 1998'' and inserting in lieu thereof ``October 1, 
        2000''.
    (e) Authority To Collect Increased Loan Fees for Manufactured 
Housing.--
            (1) Authority.--Section 3729(a)(4) of such title, as 
        amended by subsection (c)(1), is further amended by striking 
        out ``, (D)(ii),''.
            (2) Expiration.--The amendment made by paragraph (1) 
        expires on September 30, 2000.
    (f) Extension of Procedures Applicable to Liquidation Sales on 
Defaulted Home Loans.--Section 3732(c)(11) of such title is amended by 
striking out ``October 1, 1998'' and inserting in lieu thereof 
``October 1, 2000''.
    (g) Extension of Income Verification Authority.--Section 5317(g) of 
such title is amended by striking out ``September 30, 1998'' and 
inserting in lieu thereof ``September 30, 2000''.
    (h) Extension of Limitation on Pension for Certain Recipients of 
Medicaid-Covered Nursing Home Care.--Section 5503(f)(7) of such title 
is amended by striking out ``September 30, 1998'' and inserting in lieu 
thereof ``September 30, 2000''.
    (i) Closure of VA Supply Depots.--Notwithstanding the provisions of 
sections 510(b) and 8121 of title 38, United States Code, the Secretary 
of Veterans Affairs shall phase out and close the Department of 
Veterans Affairs Supply Depots located at Somerville, New Jersey, 
Hines, Illinois, and Bell, California, over 2 fiscal years, beginning 
in fiscal year 1995 and ending in fiscal year 1996, and shall transfer 
from the Department of Veterans Affairs Revolving Supply Fund to the 
General Fund of the Treasury, $45,000,000 by September 30, 1995, and 
$44,000,000 by September 30, 1996.
    (j) Provision of Data Bank Information to Department of Veterans 
Affairs.--
            (1) Additional purpose of data bank.--
                    (A) The heading to section 1144 of the Social 
                Security Act (42 U.S.C. 1320b-14) is amended by 
                striking ``medicare and medicaid'' and inserting 
                ``health care''.
                    (B) Subsection (a) of that section is amended--
                            (i) in the matter preceding paragraph (1), 
                        by striking ``Medicare and Medicaid'' and 
                        inserting ``Health Care'';
                            (ii) by striking ``and'' at the end of 
                        paragraph (1);
                            (iii) by substituting ``, and'' for the 
                        period at the end of paragraph (2); and
                            (iv) by adding at the end the following:
            ``(3) assist in the identification of, and the collection 
        from, third parties responsible for payment for health care 
        items and services furnished to veterans under chapter 17 of 
        title 38, United States Code.''.
            (2) Disclosure of data bank information to secretary of 
        veterans affairs.--Subsection (b)(2)(B) of that section is 
        amended by inserting ``to the Secretary of Veterans Affairs 
        and'' after ``Data Bank''.

SEC. 202. ANNUAL PAY ADJUSTMENTS FOR MEMBERS OF CONGRESS.

    Effective as of December 31, 1995, paragraph (2) of section 601(a) 
of the Legislative Reorganization Act of 1946 is amended--
            (1) by striking ``(2) Effective'' and inserting ``(2)(A) 
        Subject to subparagraph (B), effective''; and
            (2) by adding at the end the following:
    ``(B) In no event shall the percentage adjustment taking effect 
under subparagraph (A) in any calendar year exceed the percentage 
adjustment taking effect in such calendar year under section 5303 of 
title 5, United States Code, in the rates of pay under the General 
Schedule.''.

SEC. 203. DETERRENCE OF FRAUD AND ABUSE IN FECA PROGRAM.

    (a) Section 8102 of title 5, United States Code, is amended to 
redesignate subsection (b) as subsection (c), and to add the following 
new subsection (b):
    ``(b) An individual convicted of a violation of 18 U.S.C. 1920, as 
amended, or of any other fraud related to the application for or 
receipt of benefits under subchapter I or III of chapter 81 of title 5, 
shall forfeit, as of the date of the conviction, all entitlement to any 
prospective benefits provided by subchapter I or III for any injury 
occurring on or before the date of the conviction. Such a forfeiture of 
benefits shall be in addition to any action the Secretary may take 
under section 8106 or 8129 of title 5, United States Code.''.
    (b) Section 8116 of title 5, United States Code, is amended by 
adding the following new subsection (e):
    ``(e) Notwithstanding any other provision of this title, no 
benefits under section 8105 or 8106 of this subchapter shall be paid or 
provided to any individual during any period during which such 
individual is confined in a jail, prison, or other penal institution or 
correctional facility, pursuant to that individual's conviction of an 
offense that constituted a felony under applicable law, except where 
such individual has one or more dependents within the meaning of 
section 8110 of this subchapter, in which case the Secretary may, 
during the period of incarceration, pay to such dependents a percentage 
of the benefits that would have been payable to such individual 
computed according to the percentages set forth in section 8133(a)(1)-
(5) of this subchapter.''.
    (c) Section 8116 of title 5, United States Code, is further amended 
by adding the following new subsection (f):
    ``(f) Notwithstanding the provisions of section 552a of this title, 
or any other provision of Federal or State law, any agency of the 
United States Government or of any State (or political subdivision 
thereof) shall make available to the Secretary, upon written request, 
the names and Social Security account numbers of individuals who are 
confined in a jail, prison or other penal institution or correctional 
facility under the jurisdiction of such agency, pursuant to such 
individuals' conviction of an offense that constituted a felony under 
applicable law, which the Secretary may require to carry out the 
provisions of this subsection.''.
    (d) Section 1920 of title 18, United States Code, is amended to 
read as follows: ``Whoever knowingly and willfully falsifies, conceals, 
or covers up a material fact, or makes a false, fictitious, or 
fraudulent statement or representation, or makes or uses a false 
statement or report knowing the same to contain any false, fictitious 
or fraudulent statement or entry in connection with the application for 
or receipt of compensation or other benefit or payment under subchapter 
I or III of chapter 81 of title 5, United States Code, shall be 
punished by a fine of not more than $250,000, or by imprisonment for 
not more than five years, or both.''.
    (e) Except as otherwise provided in this section, the amendments 
made by this section shall be effective on the date of enactment and 
shall apply to actions taken on or after the date of enactment both 
with respect to claims filed before the day of enactment and with 
respect to claims filed after such date.
    (f) The amendments made by subsections (a), (b), and (c) of this 
section shall be effective on the date of enactment and shall apply to 
any person convicted or imprisoned on or after the date of enactment.
    (g) The amendment made by subsection (d) of this section shall be 
effective on the date of enactment and shall apply to any claim, 
statement, representation, report, or other written document made or 
submitted in connection with a claim filed under subchapter I or III of 
chapter 81 of title 5, United States Code.

SEC. 204. ENHANCEMENT OF REEMPLOYMENT PROGRAMS FOR FEDERAL EMPLOYEES 
              DISABLED IN THE PERFORMANCE OF DUTY.

    (a) In General.--Section 8104 of title 5, United States Code, is 
amended--
            (1) by striking the comma after ``employment'' and by 
        striking ``other than employment undertaken pursuant to such 
        rehabilitation'' from subsection (b); and
            (2) by adding the following new subsection (c):
    ``(c) The Secretary of Labor, as part of the vocational 
rehabilitation effort, may assist permanently disabled individuals in 
seeking and/or obtaining employment. The Secretary may reimburse an 
employer (including a Federal employer), who was not the employer at 
the time of injury and who agrees to employ a disabled beneficiary, for 
portions of the salary paid by such employer to the reemployed, 
disabled beneficiary. Any such sums shall be paid from the Employees' 
Compensation Fund.''.
    (b) Expansion of Federal Employees' Compensation Act Periodic Roll 
Management Project.--The Secretary of Labor may expand the Federal 
Employees' Compensation Act Periodic Roll Management Project to all 
offices of the Office of Workers' Compensation Program of the 
Department of Labor.

SEC. 205. SALE OF ALASKA POWER ADMINISTRATION.

    (a) Snettisham.--
            (1) Authority to sell.--The Secretary of Energy may sell 
        the Snettisham Hydroelectric Project (referred to in this 
        section as ``Snettisham'') to the State of Alaska (referred to 
        in this section as the ``Authority''), in accordance with the 
        terms of this section and the February 10, 1989, Snettisham 
        Purchase Agreement between the Alaska Power Administration of 
        the United States Department of Energy and the Alaska Power 
        Authority.
            (2) Authority to sell to municipality of anchorage.--The 
        Secretary of Energy may sell the Eklutna Hydroelectric Project 
        (referred to in this section as ``Eklutna'') to the 
        municipality of Anchorage doing business as Municipal Light and 
        Power, the Chugach Electric Association, Inc., and the 
        Matanuska Electric Association, Inc. (referred to in this 
        section as ``Eklutna Purchasers'') in accordance with the 
        August 2, 1989, Eklutna Purchase Agreement between the United 
        States Department of Energy and the Eklutna Purchasers.
            (3) Assistance.--The heads of other affected Federal 
        departments and agencies, including the Secretary of the 
        Interior, shall assist the Secretary of Energy in implementing 
        the sales authorized by this subsection.
            (4) Disposition of proceeds.--The Secretary of Energy shall 
        deposit sale proceeds in the Treasury of the United States to 
        the credit of miscellaneous receipts.
            (5) Authority to make expenditures.--There are authorized 
        to be expended such sums as are necessary to prepare or acquire 
        Eklutna and Snettisham assets for sale and conveyance, such 
        preparations to provide sufficient section to ensure the 
        beneficial use, enjoyment, and occupancy to the purchasers of 
        the assets to be sold.
    (b) Exemption From Federal Power Act Requirements.--
            (1) Exemptions.--After the sales authorized by this section 
        take place, Eklutna and Snettisham, including future 
        modifications, shall continue to be exempt from the 
        requirements of the Federal Power Act (16 U.S.C. 791a), 
        including its requirements with respect to applications, 
        permits, licenses, and fees, unless a future modification of 
        Eklutna or Snettisham affects Federal lands not used for the 
        two projects when this section takes effect. The foregoing 
        exemptions are subject to the Memorandum of Agreement entered 
        into between the State of Alaska, the Eklutna Purchasers, the 
        Authority, and Federal fish and wildlife agencies regarding the 
        protection, mitigation of, damages to, and enhancement of fish 
        and wildlife, dated August 7, 1991, remaining in full force and 
        effect. Nothing in this section or the Federal Power Act 
        preempts the State of Alaska from carrying out the 
        responsibilities and authorities of the Memorandum of 
        Agreement.
            (2) Jurisdiction.--The District Court of the United States 
        for the District of Alaska has jurisdiction to review decisions 
        made under the Memorandum of Agreement and enforce the 
        provisions of the Memorandum of Agreement, including the remedy 
        of specific performance. An action seeking review of a fish and 
        wildlife program of the Governor of Alaska under the Memorandum 
        of Agreement or challenging actions of any of the parties to 
        the Memorandum of Agreement prior to the adoption of the 
        program shall be brought within 90 days of the time the program 
        is adopted by the Governor of Alaska, or be barred. An action 
        seeking review of implementation of the program shall be 
        brought within 90 days of the challenged act implementing the 
        program, or be barred.
            (3) Rights-of-way.--With respect to Eklutna lands described 
        in Exhibit A of the Eklutna Purchase Agreement:
                    (A) The Secretary of the Interior shall issue 
                rights-of-way to the Alaska Power Administration for 
                subsequent reassignment to the Eklutna Purchasers--
                            (i) at no cost to the Eklutna Purchasers;
                            (ii) to remain effective for a period equal 
                        to the life of Eklutna as extended by 
                        improvements, repairs, renewals, or 
                        replacements; and
                            (iii) sufficient for operation, 
                        maintenance, repair, and replacement of, and 
                        access to, Eklutna facilities located on 
                        military lands and lands managed by the Bureau 
                        of Land Management, including land selected by 
                        the State of Alaska.
                    (B) If the Eklutna Purchasers subsequently sell or 
                transfer Eklutna to private ownership, the Bureau of 
                Land Management may assess reasonable and customary 
                fees for continued use of the rights-of-way on lands 
                managed by the Bureau of Land Management and military 
                lands in accordance with current law.
                    (C) Fee section to lands at Anchorage Substation 
                shall be transferred to Eklutna Purchasers at no 
                additional cost if the Secretary of the Interior 
                determines that pending claims to and selections of 
                those lands are invalid or relinquished.
                    (D) With respect only to approximately 853 acres of 
                Eklutna lands identified in paragraphs 1.a., b., and c. 
                of Exhibit A of the Eklutna Purchase Agreement, the 
                State of Alaska may select and the Secretary of the 
                Interior shall convey to the State improved lands under 
                the selection entitlements in section 6(a) of the Act 
                of July 7, 1958 (Public Law 85-508) and the North 
                Anchorage Land Agreement of January 31, 1983. This 
                conveyance is subject to the rights-of-way provided to 
                the Eklutna Purchasers under subparagraph (A).
            (4) Authority to select lands.--With respect to the 
        approximately 2,671 acres of Snettisham lands identified in 
        paragraphs 1.a., and b. of Exhibit A of the Snettisham Purchase 
        Agreement, the State of Alaska may select and the Secretary of 
        the Interior shall convey to the State improved lands under the 
        selection entitlements in section 6(a) of the Act of July 7, 
        1958 (Public Law 85-508).
            (5) Prohibitions.--Federal lands conveyed to the State of 
        Alaska as part of, or in support of, the Snettisham transfer 
        are specifically prohibited from being included in the Alaska 
        Mental Health Enabling Act (70 Stat. 709) or any reconstitution 
        thereof, under the Alaska Mental Health Trust Lands Settlement 
        Act (Secs. 54-58, Ch. 66, Alaska Session Laws 1991), or any 
        other law.
            (6) Internal revenue code of 1986.--For purposes of section 
        147(d) of the Internal Revenue Code of 1986, ``1st use'' of 
        Snettisham shall be considered to occur pursuant to acquisition 
        of the property by or on behalf of the State of Alaska.
            (7) Closing of alaska power administration.--No later than 
        1 year after both of the sales authorized in subsection (a) 
        have occurred, as measured by the transaction dates, stipulated 
        in the purchase agreements, the Secretary of Energy shall--
                    (A) complete the business of, and close out, the 
                Alaska Power Administration;
                    (B) prepare and submit to Congress a report 
                documenting the sales; and
                    (C) return unused balances of funds appropriated 
                for the Alaska Power Administration to the Treasury of 
                the United States.
            (8) Repeal of act of july 31, 1950.--The Act of July 31, 
        1950 (64 Stat. 382) is repealed effective on the date, as 
        determined by the Secretary of Energy, when all Eklutna assets 
        have been conveyed to the Eklutna Purchasers.
            (9) Repeal of section 204 of the flood control act of 
        1962.--Section 204 of the Flood Control Act of 1962 (76 Stat. 
        1193) is repealed effective on the date, as determined by the 
        Secretary of Energy, when all Snettisham assets have been 
        conveyed to the Authority.
            (10) Effective date of amendments.--As of the later of the 
        two dates determined in paragraphs (8) and (9), section 302(a) 
        of the Department of Energy Organization Act (42 U.S.C. 
        7152(a)) is amended--
                    (A) in paragraph (1), by striking subparagraph (C) 
                and redesignating subparagraphs (D), (E), and (F) as 
                subparagraphs (C), (D), and (E), respectively; and
                    (B) in paragraph (2), by striking ``and the Alaska 
                Power Administration'' and inserting ``and'' after 
                ``Southwestern Power Administration,''.
            (11) Repeal of act of august 9, 1955.--The Act of August 9, 
        1955, concerning water resources investigations in Alaska (69 
        Stat. 618), is repealed.
            (12) Disclaimer.--The sales of Eklutna and Snettisham under 
        this section are not considered disposal of Federal surplus 
        property under the Federal Property and Administrative Services 
        Act of 1949 (40 U.S.C. 484) or the Act of October 3, 1944, 
        popularly referred to as the ``Surplus Property Act of 1944'' 
        (50 U.S.C. App. 1622).

SEC. 206. TERMINATION OF TRADE ADJUSTMENT ASSISTANCE.

    (a) In General.--Section 285 of the Trade Act of 1974 (19 U.S.C. 
2271 preceding note) is amended by striking subsection (c) and 
inserting the following:
    ``(c) This chapter, other than sections 282 and 283, shall 
terminate on September 30, 1995.
    ``(d)(1) Except as provided in paragraph (2), chapters 2 and 3 
shall terminate on September 30, 1995.
    ``(2) If, on or before September 30, 1995, a worker--
            ``(A) is eligible to apply for assistance under subchapter 
        D of chapter 2; and
            ``(B) is otherwise eligible to receive assistance in 
        accordance with section 250,
such worker shall continue to be eligible to receive such assistance 
for any week after such date for which the worker meets the eligibility 
requirements of such section.''.
    (b) Conforming Amendments.--
            (1) Section 236(a)(2)(A) of the Trade Act of 1974 (19 
        U.S.C. 2296(a)(2)(A)) is amended by striking ``, except that 
        for fiscal year 1997, the total amount of payments made under 
        paragraph (1) shall not exceed $70,000,000''.
            (2) Section 245 of such Act (19 U.S.C. 2317) is amended--
                    (A) in subsection (a), by striking ``1995, 1996, 
                1997, and 1998'' and inserting ``and 1995''; and
                    (B) in subsection (b), by striking ``1996, 1997, 
                and 1998'' and inserting ``1996, and 1997''.

SEC. 207. CONSOLIDATION OF SOCIAL SERVICE PROGRAMS.

    (a) At-Risk Child Care Program Merged Into Program of Block Grants 
to States for Social Services.--
            (1) Consolidation of services.--Section 2002(a)(2)(A) of 
        the Social Security Act (42 U.S.C. 1397a(a)(2)(A)) is amended 
        by inserting ``(including services that could have been 
        provided under section 402(i), as in effect immediately before 
        the date of enactment of the Servicepersons Readjustment Act of 
        1995'' after ``child care services''.
            (2) Consolidation of funding.--Section 2003(c) of such Act 
        (42 U.S.C. 1397b(c)) is amended--
                    (A) in paragraph (4), by striking ``and'';
                    (B) in paragraph (5), by striking ``each fiscal 
                year after fiscal year 1989.'' and inserting ``the 
                fiscal years 1990, 1991, 1992, 1993, and 1994; and''; 
                and
                    (C) by adding at the end the following:
            ``(6) $2,976,000,000 for each of the fiscal years 1995, 
        1996, 1997, 1998, and 1999.''.
    (b) Certain Discretionary Social Services Programs Merged Into 
Program of Block Grants to States for Social Services but Left 
Discretionary.--
            (1) Consolidation of services.--Section 2002 of such Act 
        (42 U.S.C. 1397a) is amended--
                    (A) in subsection (a), by adding at the end the 
                following:
    ``(3) In addition to payments pursuant to paragraph (1), the 
Secretary may make payments to a State under this title for a fiscal 
year in an amount equal to its additional allotment for such fiscal 
year, to be used by such State for services directed at the goals set 
forth in section 2001, subject to the requirements of this title.
    ``(4) For purposes of paragraph (3)--
            ``(A) services which are directed at the goals set forth in 
        section 2001 include services that could have been provided 
        under--
                    ``(i) the Community Services Block Grant Act;
                    ``(ii) the Child Care and Development Block Grant 
                Act of 1990;
                    ``(iii) title III or VII of the Older Americans Act 
                of 1965; or
                    ``(iv) the State Dependent Care Development Grants 
                Act,
        as in effect immediately before the date of enactment of the 
        Servicepersons Readjustment Act of 1995; and
            ``(B) expenditures for such services may include 
        expenditures described in paragraph (2)(B).''; and
                    (B) in each of subsections (b), (c), and (d), by 
                inserting ``or additional allotment'' after 
                ``allotment'' each place such term appears.
            (2) Consolidation of funding.--Section 2003 of such Act (42 
        U.S.C. 1397b) is amended by adding at the end the following:
    ``(d) The additional allotment for any fiscal year to each State 
shall be determined in the same manner in which the allotment for the 
fiscal year is determined for the State under the preceding subsections 
of this section, except that, in making such determination the 
following amounts shall be used in lieu of the amount specified in 
subsection (c):
            ``(1) $2,298,000,000 for the fiscal year 1995.
            ``(2) $2,360,000,000 for the fiscal year 1996.
            ``(3) $2,424,000,000 for the fiscal year 1997.
            ``(4) $2,490,000,000 for the fiscal year 1998.
            ``(5) $2,557,000,000 for the fiscal year 1999.''.
    (c) Conforming Amendments and Repeals.--
            (1) Community services block grant act.--The Community 
        Services Block Grant Act (42 U.S.C. 9901 et seq.) is hereby 
        repealed.
            (2) Child care and development block grant act of 1990.--
        The Child Care and Development Block Grant Act of 1990 (42 
        U.S.C. 9858 et seq.) is hereby repealed.
            (3) Older americans act of 1965.--The Older Americans Act 
        of 1965 (42 U.S.C. 3001 et seq.) is amended by striking titles 
        III and VII.
            (4) State dependent care development grants act.--The State 
        Dependent Care Development Grants Act (42 U.S.C. 9871 et seq.) 
        is hereby repealed.
            (5) At-risk child care program.--
                    (A) Program authority.--Section 402 of the Social 
                Security Act (42 U.S.C. 602) is amended--
                            (i) in subsection (g)(7), by striking ``and 
                        subsection (i)''; and
                            (ii) by striking subsection (i).
                    (B) Funding provisions.--Section 403 of the Social 
                Security Act (42 U.S.C. 603) is amended by striking 
                subsection (n).
    (d) Effective Date.--The amendments and repeals made by this 
section shall take effect on October 1, 1995.

SEC. 208. FEDERAL CLEARINGHOUSE ON DEATH INFORMATION.

    (a) Clearinghouse Designation.--The heading for section 205(r) of 
the Social Security Act is amended to read as follows: ``Clearinghouse 
on Death Information''.
    (b) Acquisition of Disclosable Death Information From States.--
            (1) Section 205(r)(1)(A) of the Social Security Act is 
        amended by striking ``to furnish the Secretary periodically 
        with'' and inserting ``to furnish periodically to the 
        Secretary, for use in carrying out subparagraph (B) and 
        paragraphs (3) and (4),''.
            (2)(A) Notwithstanding clause (ii) of section 6103(d)(4)(B) 
        of the Internal Revenue Code of 1986 (as added by section 
        13444(a) of the Omnibus Budget Reconciliation Act of 1993 
        (Public Law 103-66)), in order for a contract requiring a State 
        to furnish the Secretary of Health and Human Services 
        information concerning individuals with respect to whom death 
        certificates (or equivalent documents maintained by the State 
        or any subdivision thereof) have been officially filed with it 
        to meet the requirements of such section 6103(d)(4)(B), such 
        contract shall authorize the Secretary to use such information 
        and to redisclose such information to any Federal agency or any 
        agency of a State or political subdivision in accordance with 
        section 205(r) of the Social Security Act.
            (B) The provisions of subparagraph (A) of this paragraph 
        and, notwithstanding subparagraph (C) of section 6103(d)(4) of 
        the Internal Revenue Code of 1986 (as added by section 13444(a) 
        of the Omnibus Budget Reconciliation Act of 1993 (Public Law 
        103-66)), the provisions of subparagraphs (A) and (B) of such 
        section 6103(d)(4) shall apply to all States, regardless of 
        whether they were, on July 1, 1993, pursuant to a contract, 
        furnishing the Secretary of Health and Human Services 
        information concerning individuals with respect to whom death 
        certificates (or equivalent documents maintained by the State 
        or any subdivision thereof) have been officially filed with it.
            (C) Subparagraphs (A) and (B) of this paragraph shall take 
        effect at the same time as the amendment made by section 
        13444(a) of the Omnibus Budget Reconciliation Act of 1993 takes 
        effect.
            (D) For the purpose of applying the special rule contained 
        in section 13444(b)(2) of the Omnibus Budget Reconciliation Act 
        of 1993, the reference in such section to section 6103(d)(4)(B) 
        of the Internal Revenue Code of 1986 shall be deemed to include 
        a reference to subparagraph (A) of this paragraph.
    (c) Payment to States for Death Information.--Section 205(r)(2) of 
the Social Security Act is amended--
            (1) by striking ``the reasonable costs'' and inserting ``a 
        reasonable amount''; and
            (2) by striking ``transcribing and transmitting'' and 
        inserting ``furnishing''.
    (d) Fee for Clearinghouse Information.--
            (1) Section 205(r)(3) of the Social Security Act is amended 
        by striking out ``if'' and all that follows, and inserting ``, 
provided that such agency agrees to pay the fees set by the Secretary 
pursuant to paragraph (8).''.
            (2) Section 205(r)(4) of the Social Security Act is 
        amended--
                    (A) by inserting ``and political subdivisions'' 
                after ``States'' the first place such term appears;
                    (B) by striking ``the States'' and inserting ``any 
                State, political subdivision, or combination thereof''; 
                and
                    (C) by striking ``if'' and all that follows and 
                inserting ``provided such States and political 
                subdivisions agree to pay the fees set by the Secretary 
                pursuant to paragraph (8).''.
            (3) Section 205(r) of the Social Security Act is amended by 
        adding at the end a new paragraph as follows: ``(8) The 
        Secretary shall establish fees for the disclosure of 
        information pursuant to this subsection. Such fees shall be in 
        amounts sufficient to cover all costs (including indirect 
        costs) associated with the Secretary's responsibilities under 
        this subsection. Fees collected pursuant to this paragraph 
        shall remain available, without fiscal year limitation, to the 
        Secretary to cover the administrative costs of carrying out 
        this subsection.''.
    (e) Technical Assistance.--Section 205(r) of the Social Security 
Act is amended by adding at the end (after the paragraph added by 
subsection (d)(3)) the following new paragraph:
    ``(9) The Secretary may provide to any Federal or State agency that 
provides Federally funded benefits, upon the request of such agency, 
technical assistance on the effective collection, dissemination, and 
use of death information available under this subsection for the 
purpose of ensuring that such benefits are not erroneously paid to 
deceased individuals.''.
    (f) Technical Amendment.--Section 205(r) of the Social Security Act 
is amended by adding at the end (after the paragraph added by 
subsection (e)) the following new paragraph:
    ``(10) For purposes of this subsection, the term `Federally funded 
benefit' means any payment funded in whole or in part by the Federal 
Government.''.
    (g) Effective Date.--Except as otherwise provided, the amendments 
made by this section shall take effect upon their enactment.

SEC. 209. SECTION 235 MORTGAGE REFINANCING.

    Section 235(r) of the National Housing Act is amended--
            (1) in paragraph (2)(C), by inserting after ``refinanced'' 
        the following: ``, plus the costs incurred in connection with 
        the refinancing as described in paragraph (4)(B) to the extent 
        that the amount for those costs is not otherwise included in 
        the interest rate as permitted by subparagraph (E) or paid by 
        the Secretary as authorized by paragraph (4)(B)'';
            (2) in paragraph (4)--
                    (A) in the matter preceding subparagraph (A), by 
                inserting after ``otherwise)'' the following: ``and the 
                mortgagee (with respect to the amount described in 
                subparagraph (A))''; and
                    (B) in subparagraph (A), by inserting after 
                ``mortgagor'' the following: ``and the mortgagee''; and
            (3) by amending paragraph (5) to read as follows:
    ``(5) The Secretary shall use amounts of budget authority 
recaptured from assistance payments contracts relating to mortgages 
that are being refinanced for assistance payments contracts with 
respect to mortgages insured under this subsection. The Secretary may 
also make such recaptured amounts available for incentives under 
paragraph (4)(A) and the costs incurred in connection with the 
refinancing under paragraph (4)(B). For purposes of subsection 
(c)(3)(A), the amount of recaptured budget authority that the Secretary 
commits for assistance payments contracts relating to mortgages insured 
under this subsection and for amounts paid under paragraph (4) shall 
not be construed as unused.''.

SEC. 210. HUD MULTIFAMILY HOUSING DISPOSITION PROCESS.

    (a) Findings.--The Congress finds that--
            (1) the portfolio of multifamily housing project mortgages 
        insured by the FHA is severely troubled and at risk of default, 
        requiring the Secretary to increase loss reserves from 
        $5,500,000,000 in 1991 to $11,900,000,000 in 1992 to cover 
        estimated future losses;
            (2) the inventory of multifamily housing projects owned by 
        the Secretary of Housing and Urban Development has more than 
        tripled since 1989, and, by the end of 1993, may exceed 75,000 
        units;
            (3) the cost to the Federal Government of owning and 
        maintaining multifamily housing projects escalated to 
        approximately $250,000,000 in fiscal year 1992;
            (4) the inventory of multifamily housing projects subject 
        to mortgages held by the Secretary has increased dramatically, 
        to more than 2,400 mortgages, and approximately half of these 
        mortgages, with over 230,000 units, are delinquent;
            (5) the inventory of insured and formerly insured 
        multifamily housing projects is rapidly deteriorating, 
        endangering tenants and neighborhoods;
            (6) over 5 million families today have a critical need for 
        housing that is affordable and habitable; and
            (7) the current statutory framework governing the 
        disposition of multifamily housing projects effectively impedes 
        the Government's ability to dispose of properties, protect 
        tenants, and ensure that projects are maintained over time.
    (b) Management and Disposition of Multifamily Housing Projects.--
Section 203 of the Housing and Community Development Amendments of 1978 
(12 U.S.C. 1701z-11) is amended to read as follows:

``SEC. 203. MANAGEMENT AND DISPOSITION OF MULTIFAMILY HOUSING PROJECTS.

    ``(a) Goals.--The Secretary of Housing and Urban Development (in 
this section referred to as the `Secretary') shall manage or dispose of 
multifamily housing projects that are owned by the Secretary or that 
are subject to a mortgage held by the Secretary in a manner that--
            ``(1) is consistent with the National Housing Act and this 
        section;
            ``(2) will protect the financial interests of the Federal 
        Government; and
            ``(3) will, in the least costly fashion among reasonable 
        available alternatives, further the goals of--
                    ``(A) preserving housing so that it can remain 
                available to and affordable by low-income persons;
                    ``(B) preserving and revitalizing residential 
                neighborhoods;
                    ``(C) maintaining existing housing stock in a 
                decent, safe, and sanitary condition;
                    ``(D) minimizing the involuntary displacement of 
                tenants;
                    ``(E) maintaining housing for the purpose of 
                providing rental housing, cooperative housing, and 
                homeownership opportunities for low-income persons; and
                    ``(F) minimizing the need to demolish multifamily 
                housing projects.
The Secretary, in determining the manner in which a project is to be 
managed or disposed of, may balance competing goals relating to 
individual projects in a manner that will further the purposes of this 
section.
    ``(b) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Multifamily housing project.--The term `multifamily 
        housing project' means any multifamily rental housing project 
        which is, or prior to acquisition by the Secretary was, 
        assisted or insured under the National Housing Act, or was 
        subject to a loan under section 202 of the Housing Act of 1959.
            ``(2) Subsidized project.--The term `subsidized project' 
        means a multifamily housing project receiving any of the 
        following types of assistance immediately prior to the 
        assignment of the mortgage on such project to, or the 
        acquisition of such mortgage by, the Secretary:
                    ``(A) Below market interest rate mortgage insurance 
                under the proviso of section 221(d)(5) of the National 
                Housing Act.
                    ``(B) Interest reduction payments made in 
                connection with mortgages insured under section 236 of 
                the National Housing Act.
                    ``(C) Direct loans made under section 202 of the 
                Housing Act of 1959.
                    ``(D) Assistance in the form of--
                            ``(i) rent supplement payments under 
                        section 101 of the Housing and Urban 
                        Development Act of 1965;
                            ``(ii) housing assistance payments made 
                        under section 23 of the United States Housing 
                        Act of 1937 (as in effect before January 1, 
                        1975); or
                            ``(iii) housing assistance payments made 
                        under section 8 of the United States Housing 
                        Act of 1937 (excluding payments made for 
                        tenant-based assistance under section 8),
                if (except for purposes of section 183(c) of the 
                Housing and Community Development Act of 1987) such 
                assistance payments are made to more than 50 percent of 
                the units in the project.
            ``(3) Formerly subsidized project.--The term `formerly 
        subsidized project' means a multifamily housing project owned 
        by the Secretary that was a subsidized project immediately 
        prior to its acquisition by the Secretary.
            ``(4) Unsubsidized project.--The term `unsubsidized 
        project' means a multifamily housing project owned by the 
        Secretary that is not a subsidized project or a formerly 
        subsidized project.
    ``(c) Management or Disposition of Property.--
            ``(1) Disposition to purchasers.--The Secretary is 
        authorized, in carrying out this section, to dispose of a 
        multifamily housing project owned by the Secretary on a 
        negotiated, competitive bid, or other basis, on such terms as 
        the Secretary deems appropriate considering the low-income 
        character of the project and the requirements of subsection 
        (a), to a purchaser determined by the Secretary to be capable 
        of--
                    ``(A) satisfying the conditions of the disposition;
                    ``(B) implementing a sound financial and physical 
                management program that is designed to enable the 
                project to meet anticipated operating and repair 
                expenses to ensure that the project will remain in 
                decent, safe, and sanitary condition;
                    ``(C) responding to the needs of the tenants and 
                working cooperatively with tenant organizations;
                    ``(D) providing adequate organizational staff and 
                financial resources to the project; and
                    ``(E) meeting such other requirements as the 
                Secretary may determine.
            ``(2) Contracting for management services.--The Secretary 
        is authorized, in carrying out this section--
                    ``(A) to contract for management services for a 
                multifamily housing project that is owned by the 
                Secretary (or for which the Secretary is mortgagee in 
                possession), on a negotiated, competitive bid, or other 
                basis at a price determined by the Secretary to be 
                reasonable, with a manager the Secretary has determined 
                is capable of--
                            ``(i) implementing a sound financial and 
                        physical management program that is designed to 
                        enable the project to meet anticipated 
                        operating and maintenance expenses to ensure 
                        that the project will remain in decent, safe, 
                        and sanitary condition;
                            ``(ii) responding to the needs of the 
                        tenants and working cooperatively with tenant 
                        organizations;
                            ``(iii) providing adequate organizational, 
                        staff, and other resources to implement a 
                        management program determined by the Secretary; 
                        and
                            ``(iv) meeting such other requirements as 
                        the Secretary may determine; and
                    ``(B) to require the owner of a multifamily housing 
                project that is subject to a mortgage held by the 
                Secretary to contract for management services for the 
                project in the manner described in subparagraph (A).
    ``(d) Maintenance of Housing Projects.--
            ``(1) Housing projects owned by the secretary.--In the case 
        of multifamily housing projects that are owned by the Secretary 
        (or for which the Secretary is mortgagee in possession), the 
        Secretary shall--
                    ``(A) to the greatest extent possible, maintain all 
                such occupied projects in a decent, safe, and sanitary 
                condition;
                    ``(B) to the greatest extent possible, maintain 
                full occupancy in all such projects; and
                    ``(C) maintain all such projects for purposes of 
                providing rental or cooperative housing.
            ``(2) Housing projects subject to a mortgage held by the 
        secretary.--In the case of any multifamily housing project that 
        is subject to a mortgage held by the Secretary, the Secretary 
        shall require the owner of the project to carry out the 
        requirements of paragraph (1).
    ``(e) Required Assistance.--In carrying out the goal specified in 
subsection (a)(3)(A), the Secretary shall take not less than one of the 
following actions:
            ``(1) Contract with owner.--Enter into contracts under 
        section 8 of the United States Housing Act of 1937, to the 
        extent budget authority is available, with owners of 
        multifamily housing projects that are acquired by a purchaser 
        other than the Secretary at foreclosure or after sale by the 
        Secretary.
                    ``(A) Subsidized or formerly subsidized projects 
                receiving certain assistance.--In the case of a 
                subsidized or formerly subsidized project referred to 
                in subparagraphs (A) through (C) of subsection (b)(2)--
                            ``(i) the contract shall be sufficient to 
                        assist at least all units covered by an 
                        assistance contract under any of the 
                        authorities referred to in subsection (b)(2)(D) 
                        before acquisition, unless the Secretary acts 
                        pursuant to the provisions of subparagraph (C);
                            ``(ii) in the case of units requiring 
                        project-based rental assistance pursuant to 
                        this paragraph that are occupied by families 
                        who are not eligible for assistance under 
                        section 8, a contract under this subparagraph 
                        shall also provide that when a vacancy occurs, 
                        the owner shall lease the available unit to a 
                        family eligible for assistance under section 8; 
                        and
                            ``(iii) the Secretary shall take actions to 
                        ensure the availability and affordability, as 
                        defined in paragraph (3)(B), for the remaining 
                        useful life of the project, as defined by the 
                        Secretary, of any unit located in any project 
                        referred to in subparagraphs (A) through (C) of 
                        subsection (b)(2) that does not otherwise 
                        receive project-based assistance under this 
                        subparagraph. To carry out this clause, the 
                        Secretary may require purchasers to establish 
                        use or rent restrictions maintaining 
                        affordability, as defined in paragraph (3)(B).
                    ``(B) Subsidized or formerly subsidized projects 
                receiving other assistance.--In the case of a 
                subsidized or formerly subsidized project referred to 
                in subsection (b)(2)(D)--
                            ``(i) the contract shall be sufficient to 
                        assist at least all units in the project that 
                        are covered, or were covered immediately before 
                        foreclosure on or acquisition of the project by 
                        the Secretary, by an assistance contract under 
                        any of the authorities referred to in such 
                        subsection, unless the Secretary acts pursuant 
                        to provisions of subparagraph (C); and
                            ``(ii) in the case of units requiring 
                        project-based rental assistance pursuant to 
                        this paragraph that are occupied by families 
                        who are not eligible for assistance under 
                        section 8, a contract under this paragraph 
                        shall also provide that when a vacancy occurs, 
                        the owner shall lease the available unit to a 
                        family eligible for assistance under section 8.
                    ``(C) Exceptions to subparagraphs (a) and (b).--In 
                lieu of providing project-based assistance under 
                subparagraph (A) or (B), the Secretary may require 
                certain units in unsubsidized projects to contain use 
                restrictions providing that such units will be 
                available to and affordable by very low-income families 
                for the remaining useful life of the project, as 
                defined by the Secretary, if--
                            ``(i) the Secretary matches any reduction 
                        in units otherwise required to be assisted with 
                        project-based assistance under subparagraph (A) 
                        or (B) with at least an equivalent increase in 
                        units made affordable to very low-income 
                        persons within unsubsidized projects;
                            ``(ii) low-income tenants residing in units 
                        otherwise requiring project-based assistance 
                        under subparagraph (A) or (B) upon disposition 
                        receive section 8 tenant-based assistance; and
                            ``(iii) the units described in clause (i) 
                        are located within the same market area.
                    ``(D) Contract requirements for unsubsidized 
                projects.--Notwithstanding actions taken pursuant to 
                subparagraph (C), in unsubsidized projects, the 
                contract shall at least be sufficient to provide--
                            ``(i) project-based rental assistance for 
                        all units that are covered or were covered 
                        immediately before foreclosure or acquisition 
                        by an assistance contract under--
                                    ``(I) section 8(b)(2) of the United 
                                States Housing Act of 1937 (as such 
                                section existed before October 1, 1983) 
                                (new construction and substantial 
                                rehabilitation); section 8(b) of such 
                                Act (property disposition); section 
                                8(d)(2) of such Act (project-based 
                                certificates); section 8(e)(2) of such 
                                Act (moderate rehabilitation); section 
                                23 of such Act (as in effect before 
                                January 1, 1975); or section 101 of the 
                                Housing and Urban Development Act of 
                                1965 (rent supplements); or
                                    ``(II) section 8 of the United 
                                States Housing Act of 1937, following 
                                conversion from section 101 of the 
                                Housing and Urban Development Act of 
                                1965; and
                            ``(ii) tenant-based assistance under 
                        section 8 of the United States Housing Act of 
                        1937 for tenants currently residing in units 
                        that were covered by an assistance contract 
                        under the Loan Management Set-Aside program 
                        under section 8(b) of the United States Housing 
                        Act of 1937 immediately before foreclosure or 
                        acquisition of the project by the Secretary.
            ``(2) Annual contribution contracts.--In the case of 
        multifamily housing projects that are acquired by a purchaser 
        other than the Secretary at foreclosure or after sale by the 
        Secretary, enter into annual contribution contracts with public 
        housing agencies to provide tenant-based assistance under 
        section 8 of the United States Housing Act of 1937 to all low-
        income families who are eligible for such assistance on the 
        date that the project is acquired by the purchaser. The 
        Secretary shall take action under this paragraph only after 
        making a determination that there is available in the area an 
        adequate supply of habitable affordable housing for low-income 
        families. Actions taken pursuant to this paragraph may be taken 
        in connection with not more than 10 percent of the aggregate 
        number of units in subsidized or formerly subsidized projects 
        disposed of by the Secretary annually.
            ``(3) Other assistance.--
                    ``(A) In general.--In accordance with the authority 
                provided under the National Housing Act, reduce the 
                selling price, apply use or rent restrictions on 
                certain units, or provide other financial assistance to 
                the owners of multifamily housing projects that are 
                acquired by a purchaser other than the Secretary at 
                foreclosure, or after sale by the Secretary, on terms 
                which will ensure that--
                            ``(i) at least those units otherwise 
                        required to receive project-based section 8 
                        assistance pursuant to subparagraph (A), (B), 
                        or (D) of paragraph (1) are available to and 
                        affordable by low-income persons; and
                            ``(ii) for the remaining useful life of the 
                        project, as defined by the Secretary, there 
                        shall be in force such use or rent restrictions 
                        as the Secretary may prescribe.
                    ``(B) Definition.--A unit shall be considered 
                affordable under this paragraph if--
                            ``(i) for very low-income tenants, the rent 
                        for such unit does not exceed 30 percent of 50 
                        percent of the area median income, as 
                        determined by the Secretary, with adjustments 
                        for family size; and
                            ``(ii) for low-income tenants other than 
                        very low-income tenants, the rent for such unit 
                        does not exceed 30 percent of 80 percent of the 
                        area median income, as determined by the 
                        Secretary, with adjustments for family size.
                    ``(C) Very low-income tenants.--The Secretary shall 
                provide assistance under section 8 of the United States 
                Housing Act of 1937 to any very low-income tenant 
                currently residing in a unit otherwise required to 
                receive project-based assistance under section 8, 
                pursuant to subparagraph (A), (B), or (D) of paragraph 
                (1), if the rents charged such tenants as a result of 
                actions taken pursuant to this paragraph exceed the 
                amount payable as rent under section 3(a) of the United 
                States Housing Act of 1937.
            ``(4) Transfer for use under other programs of the 
        secretary.--
                    ``(A) In general.--Enter into an agreement 
                providing for the transfer of a multifamily housing 
                project--
                            ``(i) to a public housing agency for use of 
                        the project as public housing; or
                            ``(ii) to an owner or another appropriate 
                        entity for use of the project under section 202 
                        of the Housing Act of 1959 or under section 811 
                        of the Cranston-Gonzalez National Affordable 
                        Housing Act.
                    ``(B) Requirements for agreement.--The agreement 
                described in subparagraph (A) shall--
                            ``(i) contain such terms, conditions, and 
                        limitations as the Secretary determines 
                        appropriate, including requirements to assure 
                        use of the project under the public housing, 
                        section 202, and section 811 programs; and
                            ``(ii) ensure that no current tenant will 
                        be displaced as a result of actions taken under 
                        this paragraph.
    ``(f) Other Assistance.--In addition to the actions authorized by 
subsection (e), the Secretary may take any of the following actions:
            ``(1) Short-term loans.--Provide short-term loans to 
        facilitate the sale of multifamily housing projects to 
        nonprofit organizations or to public agencies if--
                    ``(A) authority for such loans is provided in 
                advance in an appropriations Act;
                    ``(B) such loans are for a term of not more than 5 
                years;
                    ``(C) the Secretary is presented with satisfactory 
                documentation, evidencing a commitment of permanent 
                financing to replace such short-term loan, from a 
                lender who meets standards set forth by the Secretary; 
                and
                    ``(D) the terms of such loans are consistent with 
                prevailing practices in the marketplace or the 
                provision of such loans results in no cost to the 
                Government, as defined in section 502 of the 
                Congressional Budget Act.
            ``(2) Tenant-based assistance.--In connection with projects 
        referred to in subsection (e), make available tenant-based 
        assistance under section 8 of the United States Housing Act of 
        1937 to very low-income families (as defined in section 3(b)(2) 
        of the United States Housing Act of 1937) that do not otherwise 
        qualify for project-based assistance.
            ``(3) Alternative uses.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, and subject to notice to and comment 
                from existing tenants, allow not more than--
                            ``(i) 5 percent of the total number of 
                        units in multifamily housing projects that are 
                        disposed of by the Secretary during any 1-year 
                        period to be made available for uses other than 
                        rental or cooperative uses, including low-
                        income homeownership opportunities, or in any 
                        particular project, community space, office 
                        space for tenant or housing-related service 
                        providers or security programs, or small 
                        business uses, if such uses benefit the tenants 
                        of the project; and
                            ``(ii) 5 percent of the total number of 
                        units in multifamily housing projects that are 
                        disposed of by the Secretary during any 1-year 
                        period to be used in any manner, if the 
                        Secretary and the unit of general local 
                        government or area-wide governing body 
                        determine that such use will further fair 
                        housing, community development, or neighborhood 
                        revitalization goals.
                    ``(B) Displacement protection.--The Secretary shall 
                make available tenant-based rental assistance under 
                section 8 of the United States Housing Act of 1937 to 
                any tenant displaced as a result of actions taken by 
                the Secretary pursuant to subparagraph (A), and the 
                Secretary shall take such actions as the Secretary 
                determines necessary to ensure the successful use of 
                any tenant-based assistance.
    ``(g) Authorization of Use or Rent Restrictions in Unsubsidized 
Projects.--In carrying out the goals specified in subsection (a), the 
Secretary may require certain units in unsubsidized projects to contain 
use or rent restrictions providing that such units will be available to 
and affordable by very low-income persons for the remaining useful life 
of the property, as defined by the Secretary.
    ``(h) Contract Requirements.--
            ``(1) Contract term.--
                    ``(A) In general.--Contracts for project-based 
                rental assistance under section 8 of the United States 
                Housing Act of 1937 provided pursuant to this section 
shall be for a term of not more than 15 years; and
                    ``(B) Contract term of less than 15 years.--
                Notwithstanding subparagraph (A), to the extent that 
                units receive project-based assistance for a contract 
                term of less than 15 years, the Secretary shall require 
                that rents charged to tenants for such units not exceed 
                the amount payable for rent under section 3(a) of the 
                United States Housing Act of 1937 for a period of at 
                least 15 years.
            ``(2) Contract rent.--
                    ``(A) In general.--The Secretary shall set contract 
                rents for section 8 project-based rental contracts 
                issued under this section at levels that, in 
                conjunction with other resources available to the 
                purchaser, provide for the necessary costs of 
                rehabilitation of such project and do not exceed the 
                percentage of the existing housing fair market rents 
                for the area (as determined by the Secretary under 
                section 8(c) of the United States Housing Act of 1937) 
                as the Secretary may prescribe.
                    ``(B) Up-front grants and loans.--If such an 
                approach is determined to be more cost-effective, the 
                Secretary may utilize the budget authority provided for 
                project-based section 8 contracts issued under this 
                section to--
                            ``(i) provide project-based section 8 
                        rental assistance; and
                            ``(ii)(I) provide up-front grants for the 
                        necessary cost of rehabilitation; or
                            ``(II) pay for any cost to the Government, 
                        as defined in section 502 of the Congressional 
                        Budget Act, for loans made pursuant to 
                        subsection (f)(1).
    ``(i) Disposition Plan.--
            ``(1) In general.--Prior to the sale of a multifamily 
        housing project that is owned by the Secretary, the Secretary 
        shall develop a disposition plan for the project that specifies 
        the minimum terms and conditions of the Secretary for 
        disposition of the project, the initial sales price that is 
        acceptable to the Secretary, and the assistance that the 
        Secretary plans to make available to a prospective purchaser in 
        accordance with this section. The initial sales price shall 
        reflect the intended use of the property after sale.
            ``(2) Community and tenant input into disposition plans and 
        sales.--
                    ``(A) In general.--In carrying out this section, 
                the Secretary shall develop procedures to obtain 
                appropriate and timely input into disposition plans 
                from officials of the unit of general local government 
                affected, the community in which the project is 
                situated, and the tenants of the project.
                    ``(B) Tenant organizations.--The Secretary shall 
                develop procedures to facilitate, where feasible and 
                appropriate, the sale of multifamily housing projects 
                to existing tenant organizations with demonstrated 
                capacity or to public or nonprofit entities which 
                represent or are affiliated with existing tenant 
                organizations.
                    ``(C) Technical assistance.--
                            ``(i) Use of funds.--To carry out the 
                        procedures developed under subparagraphs (A) 
                        and (B), the Secretary is authorized to provide 
                        technical assistance, directly or indirectly, 
                        and to use amounts appropriated for technical 
                        assistance under the Emergency Low Income 
                        Housing Preservation Act of 1987, the Low-
                        Income Housing Preservation and Resident 
                        Homeownership Act of 1990, subtitle B of title 
                        IV of the Cranston-Gonzalez National Affordable 
                        Housing Act, or under this section for the 
                        provision of technical assistance under this 
                        section.
                            ``(ii) Source of funds.--Recipients of 
                        technical assistance funding under the 
                        Emergency Low Income Housing Preservation Act 
                        of 1987, the Low-Income Housing Preservation 
                        and Resident Homeownership Act of 1990, 
                        subtitle B of title IV of the Cranston-Gonzalez 
                        National Affordable Housing Act, or under this 
                        section shall be permitted to provide technical 
                        assistance to the extent of such funding under 
                        any of such programs or under this section, 
                        notwithstanding the source of funding.
    ``(j) Right of First Refusal.--
            ``(1) Procedure.--
                    ``(A) Notification by secretary of the acquisition 
                of title.--Not later than 30 days after acquiring title 
                to a project, the Secretary shall notify the unit of 
                general local government and the State agency or 
                agencies designated by the Governor of the acquisition 
                of such title.
                    ``(B) Expression of interest.--Not later than 45 
                days after receiving notification from the Secretary 
                under subparagraph (A), the unit of general local 
                government or designated State agency may submit to the 
                Secretary a preliminary expression of interest in the 
                project. The Secretary may take such actions as may be 
                necessary to require the unit of general local 
                government or designated State agency to substantiate 
                such interest.
                    ``(C) Timely expression of interest.--If the unit 
                of general local government or designated State agency 
                has expressed interest in the project before the 
                expiration of the 45-day period referred to in 
                subparagraph (B), and has substantiated such interest 
                if requested, the Secretary, upon approval of a 
                disposition plan for a project, shall notify the unit 
                of general local government and designated State agency 
                of the terms and conditions of the disposition plan and 
                give the unit of general local government or designated 
                State agency not more than 90 days after the date of 
                such notification to make an offer to purchase the 
                project.
                    ``(D) No timely expression of interest.--If the 
                unit of general local government or designated State 
                agency does not express interest before the expiration 
                of the 45-day period referred to in subparagraph (B), 
                or does not substantiate an expressed interest if 
                requested, the Secretary, upon approval of a 
                disposition plan, may offer the project for sale to any 
                interested person or entity.
            ``(2) Acceptance of offers.--Where the Secretary has given 
        the unit of general local government or designated State agency 
        90 days to make an offer to purchase the project, the Secretary 
        shall accept an offer that complies with the terms and 
        conditions of the disposition plan. The Secretary may accept an 
        offer that does not comply with the terms and conditions of the 
        disposition plan if the Secretary determines that the offer 
        will further the goals specified in subsection (a) by actions 
        that include extension of the duration of low-income 
        affordability restrictions or otherwise restructuring the 
        transaction in a manner that enhances the long-term 
        affordability for low-income persons. The Secretary shall, in 
        particular, have discretion to reduce the initial sales price 
        in exchange for the extension of low-income affordability 
        restrictions beyond the period of assistance contemplated by 
        the attachment of assistance pursuant to subsection (e). If the 
        Secretary and the unit of general local government or 
        designated State agency cannot reach agreement within 90 days, 
        the Secretary may offer the project for sale to the general 
        public.
            ``(3) Purchase by unit of general local government or 
        designated state agency.--Notwithstanding any other provision 
        of law, a unit of general local government (including a public 
        housing agency) or designated State agency may purchase a 
        subsidized or formerly subsidized project in accordance with 
        this subsection.
            ``(4) Applicability.--This subsection shall apply to 
        projects that are acquired on or after the effective date of 
        this subsection. With respect to projects acquired before such 
        effective date, the Secretary may apply--
                    ``(A) the requirements of paragraphs (2) and (3) of 
                section 203(e) as such paragraphs existed immediately 
                before the effective date of this subsection; or
                    ``(B) the requirements of paragraphs (1) and (2) of 
                this subsection, if the Secretary gives the unit of 
                general local government or designated State agency--
                            ``(i) 45 days to express interest in the 
                        project; and
                            ``(ii) if the unit of general local 
                        government or designated State agency expresses 
                        interest in the project before the expiration 
                        of the 45-day period, and substantiates such 
                        interest if requested, 90 days from the date of 
                        notification of the terms and conditions of the 
                        disposition plan to make an offer to purchase 
                        the project.
    ``(k) Displacement of Tenants and Relocation Assistance.--
            ``(1) In general.--Whenever tenants will be displaced as a 
        result of the disposition of, or repairs to, a multifamily 
        housing project that is owned by the Secretary (or for which 
        the Secretary is mortgagee in possession), the Secretary shall 
        identify tenants who will be displaced, and shall notify all 
        such tenants of their pending displacement and of any 
        relocation assistance which may be available. In the case of a 
        multifamily housing project that is not owned by the Secretary 
        (and for which the Secretary is not mortgagee in possession), 
        the Secretary shall require the owner of the project to carry 
        out the requirements of this paragraph.
            ``(2) Rights of displaced tenants.--The Secretary shall 
        assure for any such tenant (who continues to meet applicable 
        qualification standards) the right--
                    ``(A) to return, whenever possible, to a repaired 
                unit;
                    ``(B) to occupy a unit in another multifamily 
                housing project owned by the Secretary;
                    ``(C) to obtain housing assistance under the United 
                States Housing Act of 1937; or
                    ``(D) to receive any other available relocation 
                assistance as the Secretary determines to be 
                appropriate.
    ``(l) Mortgage and Project Sales.--
            ``(1) In general.--The Secretary may not approve the sale 
        of any loan or mortgage held by the Secretary (including any 
        loan or mortgage owned by the Government National Mortgage 
        Association) on any subsidized project or formerly subsidized 
        project, unless such sale is made as part of a transaction that 
        will ensure that such project will continue to operate at least 
        until the maturity date of such loan or mortgage, in a manner 
that will provide rental housing on terms at least as advantageous to 
existing and future tenants as the terms required by the program under 
which the loan or mortgage was made or insured prior to the assignment 
of the loan or mortgage on such project to the Secretary.
            ``(2) Sale of certain projects.--The Secretary may not 
        approve the sale of any subsidized project--
                    ``(A) that is subject to a mortgage held by the 
                Secretary; or
                    ``(B) if the sale transaction involves the 
                provision of any additional subsidy funds by the 
                Secretary or a recasting of the mortgage, unless such 
                sale is made as part of a transaction that will ensure 
                that such project will continue to operate at least 
                until the maturity date of the loan or mortgage, in a 
                manner that will provide rental housing on terms at 
                least as advantageous to existing and future tenants as 
                the terms required by the program under which the loan 
                or mortgage was made or insured prior to the proposed 
                sale of the project.
            ``(3) Mortgage sales to state and local governments.--
        Notwithstanding any provision of law that may require 
        competitive sales or bidding, the Secretary may carry out 
        negotiated sales of subsidized or formerly subsidized mortgages 
        held by the Secretary, without the competitive selection of 
        purchasers or intermediaries, to units of general local 
        government or State agencies, or groups of investors that 
        include at least one such unit of general local government or 
        State agency, if the negotiations are conducted with such 
        agencies, except that--
                    ``(A) the terms of any such sale shall include the 
                agreement of the purchasing agency or unit of local 
                government or State agency to act as mortgagee or owner 
                of a beneficial interest in such mortgages, in a manner 
                consistent with maintaining the projects that are 
                subject to such mortgages for occupancy by the general 
                tenant group intended to be served by the applicable 
                mortgage insurance program, including, to the extent 
                the Secretary determines appropriate, authorizing such 
                unit of local government or State agency to enforce the 
                provisions of any regulatory agreement or other program 
                requirements applicable to the related projects; and
                    ``(B) the sales prices for such mortgages shall be, 
                in the determination of the Secretary, the best prices 
                that may be obtained for such mortgages from a unit of 
                general local government or State agency, consistent 
                with the expectation and intention that the projects 
                financed will be retained for use under the applicable 
                mortgage insurance program for the life of the initial 
                mortgage insurance contract.
            ``(4) Sale of mortgages covering unsubsidized projects.--
        Notwithstanding any other provision of law, the Secretary may 
        sell mortgages held on unsubsidized projects on such terms and 
        conditions as the Secretary may prescribe.
    ``(m) Report to Congress.--Not later than June 1 of each year, the 
Secretary shall submit to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives, a report describing the status 
of multifamily housing projects owned by or subject to mortgages held 
by the Secretary, which report shall include--
            ``(1) the name, address, and size of each project;
            ``(2) the nature and date of assignment;
            ``(3) the status of the mortgage;
            ``(4) the physical condition of the project;
            ``(5) an occupancy profile of the project, including the 
        income, family size, and race of current residents as well as 
        the rents paid by such residents;
            ``(6) the proportion of units in a project that are vacant;
            ``(7) the date on which the Secretary became mortgagee in 
        possession;
            ``(8) the date and conditions of any foreclosure sale;
            ``(9) the date of acquisition by the Secretary;
            ``(10) the date and conditions of any property disposition 
        sale;
            ``(11) a description of actions undertaken pursuant to this 
        section, including--
                    ``(A) a comparison of results between actions taken 
                after enactment of the Housing and Community 
                Development Act of 1993 and actions taken in years 
                prior to such enactment;
                    ``(B) a description of any impediments to the 
                disposition or management of multifamily housing 
                projects, together with a recommendation of proposed 
                legislative or regulatory changes designed to 
                ameliorate such impediments;
                    ``(C) a description of actions taken to restructure 
                or commence foreclosure on delinquent multifamily 
                mortgages held by the Department; and
                    ``(D) a description of actions taken to monitor and 
                prevent the default of multifamily housing mortgages 
                held by the Federal Housing Administration;
            ``(12) a description of any of the functions performed in 
        connection with this section that are contracted out to public 
        or private entities or to States, including--
                    ``(A) the costs associated with such delegation;
                    ``(B) the implications of contracting out or 
                delegating such functions for current Department field 
                or regional personnel, including anticipated personnel 
                or work load reductions;
                    ``(C) necessary oversight required by Department 
                personnel, including anticipated personnel hours 
                devoted to such oversight;
                    ``(D) a description of any authority granted to 
                such public or private entities or States in 
                conjunction with the functions that have been delegated 
                or contracted out or that are not otherwise available 
                for use by Department personnel; and
                    ``(E) the extent to which such public or private 
                entities or States include tenants of multifamily 
                housing projects in the disposition planning for such 
                projects;
            ``(13) a description of the activities carried out under 
        subsection (j) during the preceding year; and
            ``(14) a description and assessment of the rules, 
        guidelines, and practices governing the Department's management 
        of multifamily housing projects that are owned by the Secretary 
        (or for which the Secretary is mortgagee in possession) as well 
        as the steps that the Secretary has taken or plans to take to 
        improve the management performance of the Department.''.
    (c) Effective Date.--The Secretary of Housing and Urban Development 
shall, by notice published in the Federal Register, which shall take 
effect upon publication, establish such requirements as may be 
necessary to implement the amendments made by this section. The notice 
shall invite public comments, and the Secretary shall issue final 
regulations based on the initial notice, taking into account any public 
comments received.
                                 <all>
S 1329 IS----2
S 1329 IS----3
S 1329 IS----4
S 1329 IS----5
S 1329 IS----6
S 1329 IS----7