Congressional Record, Volume 141 Issue 61 (Monday, April 3, 1995)

[Congressional Record Volume 141, Number 61 (Monday, April 3, 1995)]
[House]
[Pages H4048-H4072]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

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DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE
ACT OF 1995

Mr. CLINGER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 1345) to eliminate budget deficits and management
inefficiencies in the government of the District of Columbia through
the establishment of the District of Columbia Financial Responsibility
and Management Assistance Authority, and for other purposes, as
amended.
The Clerk read as follows:
H.R. 1345

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``District
of Columbia Financial Responsibility and Management
Assistance Act of 1995''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings; purpose.

TITLE I--ESTABLISHMENT AND ORGANIZATION OF AUTHORITY

Sec. 101. District of Columbia Financial Responsibility and Management
Assistance Authority.
Sec. 102. Executive director and staff of Authority.
Sec. 103. Powers of Authority.
Sec. 104. Exemption from liability for claims.
Sec. 105. Treatment of actions arising from act.
Sec. 106. Funding for operation of Authority.
Sec. 107. Suspension of activities.
Sec. 108. Application of laws of District of Columbia to Authority.

TITLE II--RESPONSIBILITIES OF AUTHORITY

Subtitle A--Establishment and Enforcement of Financial Plan and Budget
for District Government

Sec. 201. Development of financial plan and budget for District of
Columbia.
Sec. 202. Process for submission and approval of financial plan and
annual District budget.
Sec. 203. Review of activities of District government to ensure
compliance with approved financial plan and budget.
Sec. 204. Restrictions on borrowing by District during control year.
``Sec. 601. Transitional provision for short-term advances.
``Sec. 602. Short-term advances for seasonal cash-flow management.
``Sec. 603. Security for advances.
``Sec. 604. Reimbursement to the Treasury.
``Sec. 605. Definitions.
Sec. 205. Deposit of annual Federal payment with Authority.
Sec. 206. Effect of finding of non-compliance with financial plan and
budget.
Sec. 207. Recommendations on financial stability and management
responsibility.
Sec. 208. Special rules for fiscal year 1996.
Sec. 209. Control periods described.

Subtitle B--Issuance of Bonds

Sec. 211. Authority to issue bonds.
Sec. 212. Pledge of security interest in revenues of district
government.
Sec. 213. Establishment of debt service reserve fund.
Sec. 214. Other requirements for issuance of bonds.
Sec. 215. No full faith and credit of the United States.

Subtitle C--Other Duties of Authority

Sec. 221. Duties of Authority during year other than control year.
Sec. 222. General assistance in achieving financial stability and
management efficiency.
Sec. 223. Obtaining reports.
Sec. 224. Reports and comments.

TITLE III--MISCELLANEOUS PROVISIONS

Sec. 301. Other District budget reforms.
Sec. 302. Establishment of Chief Financial Officer of District of
Columbia.
Sec. 303. Revisions to powers and duties of Inspector General of
District of Columbia.
Sec. 304. Council approval of certain contracts.
Sec. 305. Definitions.
SEC. 2. FINDINGS; PURPOSE.

(a) Findings.--Congress finds the following:
(1) A combination of accumulated operating deficits, cash
shortages, management inefficiencies, and deficit spending in
the current fiscal year have created a fiscal emergency in
the District of Columbia.
[[Page H4049]] (2) As a result of its current financial
problems and management inefficiencies, the District of
Columbia government fails to provide its citizens with
effective and efficient services in areas such as education,
health care, crime prevention, trash collection, drug abuse
treatment and prevention, human services delivery, and the
supervision and training of government personnel.
(3) The current financial and management problems of the
District government have already adversely affected the long-
term economic health of the District of Columbia by causing
the migration of residents and business out of the District
of Columbia and the failure of new residents and businesses
to move to the District of Columbia.
(4) The fiscal and management problems in the District of
Columbia government are pervasive across all segments of the
government.
(5) A comprehensive approach to fiscal, management, and
structural problems must be undertaken which exempts no part
of the District government and which preserves home rule for
the citizens of the District of Columbia.
(6) The current deficit of the District of Columbia must be
resolved over a multi-year period, since it cannot be
effectively addressed in a single year.
(7) The ability of the District government to obtain funds
from capital markets in the future will be severely
diminished without Congressional action to restore its
financial stability.
(8) The failure to improve the financial situation of the
District government will adversely affect the long-term
economic health of the entire National Capital region.
(9) The efficient operation of the Federal Government may
be adversely affected by the current problems of the District
of Columbia not only through the services the District
government provides directly to the Federal Government but
through services provided indirectly such as street and
traffic flow maintenance, public safety, and services
affecting tourism.
(b) Purpose.--The purposes of this Act are as follows:
(1) To eliminate budget deficits and cash shortages of the
District of Columbia through visionary financial planning,
sound budgeting, accurate revenue forecasts, and careful
spending.
(2) To ensure the most efficient and effective delivery of
services, including public safety services, by the District
government during a period of fiscal emergency.
(3) To conduct necessary investigations and studies to
determine the fiscal status and operational efficiency of the
District government.
(4) To assist the District government in--
(A) restructuring its organization and workforce to ensure
that the residents of the District of Columbia are served by
a local government that is efficient and effective;
(B) achieving an appropriate relationship with the Federal
Government;
(C) ensuring the appropriate and efficient delivery of
services; and
(D) modernizing its budget, accounting, personnel,
procurement, information technology, and management systems
to ensure the maximum financial and performance
accountability of the District government and its officers
and employees.
(5) To enhance the District government's access to the
capital markets and to ensure the continued orderly payment
of its debt service obligations.
(6) To ensure the long-term financial, fiscal, and economic
vitality and operational efficiency of the District of
Columbia.
(7) To examine the programmatic and structural relationship
between the District government and the Federal Government.
(8) To provide for the review of the financial impact of
activities of the District government before such activities
are implemented or submitted for Congressional review.
(c) Rules of Construction.--Nothing in this Act may be
construed--
(1) to relieve any obligations existing as of the date of
the enactment of this Act of the District government to repay
any individual or entity from whom the District has borrowed
funds, whether through the issuance of bonds or otherwise; or
(2) to limit the authority of Congress to exercise ultimate
legislative authority over the District of Columbia pursuant
to Article I, section 8, clause 17 of the Constitution of the
United States.
TITLE I--ESTABLISHMENT AND ORGANIZATION OF AUTHORITY
SEC. 101. DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND
MANAGEMENT ASSISTANCE AUTHORITY.

(a) Establishment.--Pursuant to Article I, section 8,
clause 17 of the Constitution of the United States, there is
hereby established the District of Columbia Financial
Responsibility and Management Assistance Authority,
consisting of members appointed by the President in
accordance with subsection (b). Subject to the conditions
described in section 108 and except as otherwise provided in
this Act, the Authority is established as an entity within
the government of the District of Columbia, and is not
established as a department, agency, establishment, or
instrumentality of the United States Government.
(b) Membership.--
(1) In general.--The Authority shall consist of 5 members
appointed by the President who meet the qualifications
described in subsection (c), except that the Authority may
take any action under this Act (or any amendments made by
this Act) at any time after the President has appointed 3 of
its members.
(2) Consultation with congress.--The President shall
appoint the members of the Authority after consulting with
the Chair of the Committee on Appropriations and the Chair of
the Committee on Government Reform and Oversight of the House
of Representatives, the Chair of the Committee on
Appropriations and the Chair of the Committee on Governmental
Affairs of the Senate, and the Delegate to the House of
Representatives from the District of Columbia.
(3) Chair.--The President shall designate one of the
members of the Authority as the Chair of the Authority.
(4) Sense of congress regarding deadline for appointment.--
It is the sense of Congress that the President should appoint
the members of the Authority as soon as practicable after the
date of the enactment of this Act, but in no event later than
25 days after the date of the enactment of this Act.
(5) Term of service.--
(A) In general.--Except as provided in subparagraph (B),
each member of the Authority shall be appointed for a term of
3 years.
(B) Appointment for term following initial term.--As
designated by the President at the time of appointment for
the term immediately following the initial term, of the
members appointed for the term immediately following the
initial term--
(i) 1 member shall be appointed for a term of 1 year;
(ii) 2 members shall be appointed for a term of 2 years;
and
(iii) 2 members shall be appointed for a term of 3 years.
(C) Removal.--The President may remove any member of the
Authority only for cause.
(c) Qualifications for Membership.--An individual meets the
qualifications for membership on the Authority if the
individual--
(1) has knowledge and expertise in finance, management, and
the organization or operation of business or government;
(2) does not provide goods or services to the District
government (and is not the spouse, parent, child, or sibling
of an individual who provides goods and services to the
District government);
(3) is not an officer or employee of the District
government; and
(4) during the most recent taxable year prior to
appointment, paid personal income or business taxes to the
District government.
(d) No Compensation for Service.--Members of the Authority
shall serve without pay, but may receive reimbursement for
any reasonable and necessary expenses incurred by reason of
service on the Authority.
(e) Adoption of By-Laws for Conducting Business of
Authority.--
(1) In general.--As soon as practicable after the
appointment of its members, the Authority shall adopt by-
laws, rules, and procedures governing its activities under
this Act, including procedures for hiring experts and
consultants. Such by-laws, rules, and procedures shall be
public documents, and shall be submitted by the Authority
upon adoption to the Mayor, the Council, the President, and
Congress.
(2) Certain activities requiring approval of majority of
members.--Under the by-laws adopted pursuant to paragraph
(1), the Authority may conduct its operations under such
procedures as it considers appropriate, except that an
affirmative vote of a majority of the members the Authority
shall be required in order for the Authority to--
(A) approve or disapprove a financial plan and budget under
subtitle A of title II;
(B) implement recommendations on financial stability and
management responsibility under section 207;
(C) give consent to the appointment of the Chief Financial
Officer of the District of Columbia under section 424 of the
District of Columbia Self-Government and Governmental
Reorganization Act (as added by section 302); and
(D) give consent to the appointment of the Inspector
General of the District of Columbia under section 208(a) of
the District of Columbia Procurement Practices Act of 1985
(as amended by section 303(a)).
(3) Adoption of rules and regulations of district of
columbia.--The Authority may incorporate in its by-laws,
rules, and procedures under this subsection such rules and
regulations of the District government as it considers
appropriate to enable it to carry out its activities under
this Act with the greatest degree of independence
practicable.

SEC. 102. EXECUTIVE DIRECTOR AND STAFF OF AUTHORITY.

(a) Executive Director.--The Authority shall have an
Executive Director who shall be appointed by the Chair with
the consent of the Authority. The Executive Director shall be
paid at a rate determined by the Authority, except that such
rate may not exceed the rate of basic pay payable for level
IV of the Executive Schedule.
(b) Staff.--With the approval of the Chair, the Executive
Director may appoint and fix the pay of additional personnel
as the Executive Director considers appropriate, except that
no individual appointed by the Executive Director may be paid
at a rate greater than the rate of pay for the Executive
Director.
(c) Inapplicability of Certain Civil Service Laws.--The
Executive Director and staff of the Authority may be
appointed without
[[Page H4050]] regard to the provisions of title 5, United
States Code, governing appointments in the competitive
service, and may be paid without regard to the provisions of
chapter 51 and subchapter III of chapter 53 of that title
relating to classification and General Schedule pay rates.
(d) Staff of Federal Agencies.--Upon request of the Chair,
the head of any Federal department or agency may detail, on a
reimbursable or non-reimbursable basis, any of the personnel
of that department or agency to the Authority to assist it in
carrying out its duties under this Act.
(e) Preservation of Retirement and Certain Other Rights of
Federal Employees Who Become Employed by the Authority.--
(1) In general.--A Federal employee who, within 2 months
after separating from the Federal Government, becomes
employed by the Authority--
(A) may elect, for purposes of the retirement system in
which that individual last participated before so separating,
to have such individual's period of service with the
Authority treated in the same way as if performed in the
position within the Federal Government from which separated,
subject to the requisite employee deductions and agency
contributions being currently deposited in the appropriate
fund; and
(B) if, after serving with the Authority, such employee
becomes reemployed by the Federal Government, shall be
entitled to credit, for the full period of such individual's
service with the Authority, for purposes of determining the
applicable leave accrual rate.
(2) Retirement.--
(A) Contributions.--For purposes of subparagraph (A) of
paragraph (1)--
(i) the employee deductions referred to in such paragraph
shall be made from basic pay for service with the Authority,
and shall be computed using the same percentage as would then
apply if the individual were instead serving in the position
within the Federal Government from which separated; and
(ii) the agency contributions referred to in such paragraph
shall be made by the Authority.
(B) Double coverage not permitted.--An individual who makes
an election under paragraph (1)(A) shall be ineligible, while
such election remains in effect, to participate in any
retirement system for employees of the government of the
District of Columbia.
(3) Regulations.--The Office of Personnel Management shall
prescribe such regulations as may be necessary to carry out
this subsection. Regulations to carry out paragraph (1)(A)
shall be prescribed in consultation with the office or agency
of the government of the District of Columbia having
jurisdiction over any retirement system referred to in
paragraph (2)(B).
SEC. 103. POWERS OF AUTHORITY.

(a) Hearings and Sessions.--The Authority may, for the
purpose of carrying out this Act, hold hearings, sit and act
at times and places, take testimony, and receive evidence as
the Authority considers appropriate. The Authority may
administer oaths or affirmations to witnesses appearing
before it.
(b) Powers of Members and Agents.--Any member or agent of
the Authority may, if authorized by the Authority, take any
action which the Authority is authorized to take by this
section.
(c) Obtaining Official Data.--
(1) From federal government.--Notwithstanding sections 552
(commonly known as the Freedom of Information Act) and 552b
(the Government in the Sunshine Act) of title 5, United
States Code, the Authority may secure directly from any
department or agency of the United States information
necessary to enable it to carry out this Act, with the
approval of the head of that department or agency.
(2) From district government.--Notwithstanding any other
provision of law, the Authority shall have the right to
secure copies of such records, documents, information, or
data from any entity of the District government necessary to
enable the Authority to carry out its responsibilities under
this Act. At the request of the Authority, the Authority
shall be granted direct access to such information systems,
records, documents or information or data as will enable the
Authority to carry out its responsibilities under this Act.
The head of the entity of the District government responsible
shall provide the Authority with such information and
assistance (including granting the Authority direct access to
automated or other information systems) as the Authority
requires under this paragraph.
(d) Gifts, Bequests, and Devises.--The Authority may
accept, use, and dispose of gifts, bequests, or devises of
services or property, both real and personal, for the purpose
of aiding or facilitating the work of the Authority. Gifts,
bequests, or devises of money and proceeds from sales of
other property received as gifts, bequests, or devises shall
be deposited in such account as the Authority may establish
and shall be available for disbursement upon order of the
Chair.
(e) Subpoena Power.--
(1) In general.--The Authority may issue subpoenas
requiring the attendance and testimony of witnesses and the
production of any evidence relating to any matter under
investigation by the Authority. The attendance of witnesses
and the production of evidence may be required from any place
within the United States at any designated place of hearing
within the United States.
(2) Failure to obey a subpoena.--If a person refuses to
obey a subpoena issued under paragraph (1), the Authority may
apply to a United States district court for an order
requiring that person to appear before the Authority to give
testimony, produce evidence, or both, relating to the matter
under investigation. The application may be made within the
judicial district where the hearing is conducted or where
that person is found, resides, or transacts business. Any
failure to obey the order of the court may be punished by the
court as civil contempt.
(3) Service of subpoenas.--The subpoenas of the Authority
shall be served in the manner provided for subpoenas issued
by United States district court under the Federal Rules of
Civil Procedure for the United States district courts.
(4) Service of process.--All process of any court to which
application is be made under paragraph (2) may be served in
the judicial district in which the person required to be
served resides or may be found.
(f) Administrative Support Services.--Upon the request of
the Authority, the Administrator of General Services may
provide to the Authority, on a reimbursable basis, the
administrative support services necessary for the Authority
to carry out its responsibilities under this Act.
(g) Authority To Enter Into Contracts.--The Executive
Director may enter into such contracts as the Executive
Director considers appropriate (subject to the approval of
the Chair) to carry out the Authority's responsibilities
under this Act.
(h) Civil Actions to Enforce Powers.--The Authority may
seek judicial enforcement of its authority to carry out its
responsibilities under this Act.
(i) Penalties.--
(1) Acts prohibited.--Any officer or employee of the
District government who--
(A) takes any action in violation of any valid order of the
Authority or fails or refuses to take any action required by
any such order; or
(B) prepares, presents, or certifies any information
(including any projections or estimates) or report for the
Board or any of its agents that is false or misleading, or,
upon learning that any such information is false or
misleading, fails to immediately advise the Board or its
agents thereof in writing,

shall be guilty of a misdemeanor.
(2) Administrative discipline.--In addition to any other
applicable penalty, any officer or employee of the District
government who knowingly and willfully violates paragraph (1)
shall be subject to appropriate administrative discipline,
including (when appropriate) suspension from duty without pay
or removal from office by order of either the Mayor or
Authority.
(3) Report by mayor on disciplinary actions taken.--In the
case of a violation of paragraph (1) by an officer or
employee of the District government, the Mayor shall
immediately report to the Board all pertinent facts together
with a statement of the action taken thereon.
SEC. 104. EXEMPTION FROM LIABILITY FOR CLAIMS.

The Authority and its members may not be liable for any
obligation of or claim against the District of Columbia
resulting from actions taken to carry out this Act.

SEC. 105. TREATMENT OF ACTIONS ARISING FROM ACT.

(a) Jurisdiction Established in District Court for District
of Columbia.--Except as provided in section 103(e)(2)
(relating to the issuance of an order enforcing a subpoena),
any action against the Authority or any action otherwise
arising out of this Act, in whole or in part, shall be
brought in the United States District Court for the District
of Columbia.
(b) Prompt Appeal.--
(1) Court of appeals.--Notwithstanding any other provision
of law, any order of the United States District Court for the
District of Columbia which is issued pursuant to an action
brought under subsection (a) shall be reviewable only
pursuant to a notice of appeal to the United States Court of
Appeals for the District of Columbia Circuit.
(2) Supreme court.--Notwithstanding any other provision of
law, review by the Supreme Court of the United States of a
decision of the Court of Appeals which is issued pursuant to
paragraph (1) may be had only if the petition for such review
is filed within 10 days after the entry of such decision.
(c) Timing of Relief.--No order of any court granting
declaratory or injunctive relief against the Authority,
including relief permitting or requiring the obligation,
borrowing, or expenditure of funds, shall take effect during
the pendency of the action before such court, during the time
appeal may be taken, or (if appeal is taken) during the
period before the court has entered its final order disposing
of such action.
(d) Expedited Consideration.--It shall be the duty of the
United States District Court for the District of Columbia,
the United States Court of Appeals for the District of
Columbia Circuit, and the Supreme Court of the United States
to advance on the docket and to expedite to the greatest
possible extent the disposition of any matter brought under
subsection (a).
SEC. 106. FUNDING FOR OPERATION OF AUTHORITY.

(a) Annual Budgeting Process.--
(1) Submission of budget.--The Authority shall submit a
proposed budget for each fiscal year to the President for
inclusion in the annual budget for the District of Columbia
[[Page H4051]] under part D of title IV of the District of
Columbia Self-Government and Governmental Reorganization Act
not later than the May 1 prior to the first day of the fiscal
year. In the case of the budget for fiscal year 1996, the
Authority shall submit its proposed budget not later than
July 15, 1995.
(2) Contents of budget.--The budget shall describe--
(A) expenditures of the Authority by each object class,
including expenditures for staff of the Authority;
(B) services of personnel and other services provided by or
on behalf of the Authority for which the Authority made no
reimbursement; and
(C) any gifts or bequests made to the authority during the
previous fiscal year.
(3) Appropriations required.--No amount may be obligated or
expended by the Authority for a fiscal year (beginning with
fiscal year 1996) unless such amount has been approved by Act
of Congress, and then only according to such Act.
(4) Conforming amendment.--Section 453(c) of the District
of Columbia Self-Government and Governmental Reorganization
Act (sec. 47-304.1(c), D.C. Code) is amended by striking the
period at the end and inserting the following: ``, or to the
District of Columbia Financial Responsibility and Management
Assistance Authority established under section 101(a) of the
District of Columbia Financial Responsibility and Management
Assistance Act of 1995.''.
(b) Special Rule for Funding of Operations During Fiscal
Year 1995.--As soon as practicable after the appointment of
its members, the Authority shall submit to the Mayor and the
President--
(1) a request for reprogramming of funds under subsection
(c)(1); and
(2) a description of anticipated expenditures of the
Authority for fiscal year 1995 (which shall be transmitted to
Congress).
(c) Sources of Funds.--
(1) Use of previously appropriated funds in district
budget.--The Mayor shall transfer funds previously
appropriated to the District government for a fiscal year for
auditing and consulting services to the Authority (in such
amounts as are provided in the budget request of the
Authority under subsection (a) or, with respect to fiscal
year 1995, the request submitted under subsection (b)(1)) for
the purpose of carrying out the Authority's activities during
the fiscal year.
(2) Other sources of funds.--For provisions describing the
sources of funds available for the operations of the
Authority during a fiscal year (in addition to any interest
earned on accounts of the Authority during the year), see
section 204(b)(1)(A) (relating to the set-aside of amounts
requisitioned from the Treasury by the Mayor) and section
213(b)(3) (relating to the use of interest accrued from
amounts in a debt service reserve fund of the Authority).

SEC. 107. SUSPENSION OF ACTIVITIES.

(a) Suspension Upon Payment of Authority Obligations.--
(1) In general.--Upon the expiration of the 12-month period
which begins on the date that the Authority certifies that
all obligations arising from the issuance by the Authority of
bonds, notes, or other obligations pursuant to subtitle B of
title II have been discharged, and that all borrowings by or
on behalf of the District of Columbia pursuant to title VI of
the District of Columbia Revenue Act of 1939 (sec. 47-3401,
D.C. Code) have been repaid, the Authority shall suspend any
activities carried out under this Act and the terms of the
members of the Authority shall expire.
(2) No suspension during control year.--The Authority may
not suspend its activities pursuant to paragraph (1) at any
time during a control year.
(b) Reactivation Upon Initiation of Control Period.--Upon
receiving notice from the Chairs of the Appropriations
Committees of the House of Representatives and the Senate
that a control period has been initiated (as described in
section 209) at any time after the Authority suspends its
activities under subsection (a), the President shall appoint
members of the Authority, and the Authority shall carry out
activities under this Act, in the same manner as the
President appointed members and the Authority carried out
activities prior to such suspension.

SEC. 108. APPLICATION OF LAWS OF DISTRICT OF COLUMBIA TO
AUTHORITY.

(a) In General.--The following laws of the District of
Columbia (as in effect on the date of the enactment of this
Act) shall apply to the members and activities of the
Authority:
(1) Section 742 of the District of Columbia Self-Government
and Governmental Reorganization Act (sec. 1-1504, D.C. Code).
(2) Sections 201 through 206 of the District of Columbia
Freedom of Information Act (secs. 1-1521 through 1-1526, D.C.
Code).
(3) Section 601 of the District of Columbia Campaign
Finance Reform and Conflict of Interest Act (sec. 1-1461,
D.C. Code).
(b) No Control, Supervision, Oversight, or Review by Mayor
or Council.--
(1) In general.--Neither the Mayor nor the Council may
exercise any control, supervision, oversight, or review over
the Authority or its activities.
(2) Prohibition against legislation affecting authority.--
Section 602(a) of the District of Columbia Self-Government
and Governmental Reorganization Act (sec. 1-233(a), D.C.
Code) is amended--
(A) by striking ``or'' at the end of paragraph (8);
(B) by striking the period at the end of paragraph (9) and
inserting ``; or''; and
(C) by adding at the end the following new paragraph:
``(10) enact any act, resolution, or rule with respect to
the District of Columbia Financial Responsibility and
Management Assistance Authority established under section
101(a) of the District of Columbia Financial Responsibility
and Management Assistance Act of 1995.''.
(c) Authority Not Subject to Representation by Corporation
Counsel.--In any action brought by or on behalf of the
Authority, and in any action brought against the Authority,
the Authority shall be represented by such counsel as it may
select, but in no instance may the Authority be represented
by the Corporation Counsel of the District of Columbia.
TITLE II--RESPONSIBILITIES OF AUTHORITY
Subtitle A--Establishment and Enforcement of Financial Plan and Budget
for District Government
SEC. 201. DEVELOPMENT OF FINANCIAL PLAN AND BUDGET FOR
DISTRICT OF COLUMBIA.

(a) Development of Financial Plan and Budget.--For each
fiscal year for which the District government is in a control
period, the Mayor shall develop and submit to the Authority a
financial plan and budget for the District of Columbia in
accordance with this section.
(b) Contents of Financial Plan and Budget.--A financial
plan and budget for the District of Columbia for a fiscal
year shall specify the budgets for the District government
under part D of title IV of the District of Columbia Self-
Government and Governmental Reorganization Act for the
applicable fiscal year and the next 3 fiscal years (including
the projected revenues and expenditures of each fund of the
District government for such years), in accordance with the
following requirements:
(1) The financial plan and budget shall meet the standards
described in subsection (c) to promote the financial
stability of the District government.
(2) The financial plan and budget shall provide for
estimates of revenues and expenditures on a modified accrual
basis.
(3) The financial plan and budget shall--
(A) describe lump sum expenditures by department by object
class;
(B) describe capital expenditures (together with a schedule
of projected capital commitments of the District government
and proposed sources of funding);
(C) contain estimates of short-term and long-term debt
(both outstanding and anticipated to be issued); and
(D) contain cash flow forecasts for each fund of the
District government at such intervals as the Authority may
require.
(4) The financial plan and budget shall include a statement
describing methods of estimations and significant
assumptions.
(5) The financial plan and budget shall include any other
provisions and shall meet such other criteria as the
Authority considers appropriate to meet the purposes of this
Act, including provisions for changes in personnel policies
and levels for each department or agency of the District
government, changes in the structure and organization of the
District government, and management initiatives to promote
productivity, improvement in the delivery of services, or
cost savings.
(c) Standards To Promote Financial Stability Described.--
(1) In general.--The standards to promote the financial
stability of the District government applicable to the
financial plan and budget for a fiscal year are as follows:
(A) In the case of the financial plan and budget for fiscal
year 1996, the expenditures of the District government for
each fiscal year (beginning with fiscal year 1999) may not
exceed the revenues of the District government for each such
fiscal year.
(B) During fiscal years 1996, 1997, and 1998, the District
government shall make continuous, substantial progress
towards equalizing the expenditures and revenues of the
District government for such fiscal years (in equal annual
installments to the greatest extent possible).
(C) The District government shall provide for the orderly
liquidation of the cumulative fund balance deficit of the
District government, as evidenced by financial statements
prepared in accordance with generally accepted accounting
principles.
(D) If funds in accounts of the District government which
are dedicated for specific purposes have been withdrawn from
such accounts for other purposes, the District government
shall fully restore the funds to such accounts.
(E) The financial plan and budget shall assure the
continuing long-term financial stability of the District
government, as indicated by factors including access to
short-term and long-term capital markets, the efficient
management of the District government's workforce, and the
effective provision of services by the District government.
(2) Application of sound budgetary practices.--In meeting
the standards described in paragraph (1) with respect to a
financial plan and budget for a fiscal year, the District
government shall apply sound budgetary practices, including
reducing costs and other expenditures, improving
productivity, increasing revenues, or combinations of such
practices.
[[Page H4052]] (3) Assumptions based on current law.--In
meeting the standards described in paragraph (1) with respect
to a financial plan and budget for a fiscal year, the
District government shall base estimates of revenues and
expenditures on Federal law as in effect at the time of the
preparation of the financial plan and budget.
(d) Repeal of Offsets Against Federal Payment and Other
District Revenues.--Section 138 of the District of Columbia
Appropriations Act, 1995, is amended--
(1) by striking subsection (c); and
(2) by redesignating subsections (d) and (e) as subsections
(c) and (d).
SEC. 202. PROCESS FOR SUBMISSION AND APPROVAL OF FINANCIAL
PLAN AND ANNUAL DISTRICT BUDGET.

(a) Submission of Preliminary Financial Plan and Budget by
Mayor.--Not later than the February 1 preceding a fiscal year
for which the District government is in a control period, the
Mayor shall submit to the Authority and the Council a
financial plan and budget for the fiscal year which meets the
requirements of section 201.
(b) Review by Authority.--Upon receipt of the financial
plan and budget for a fiscal year from the Mayor under
subsection (a), the Authority shall promptly review the
financial plan and budget. In conducting the review, the
Authority may request any additional information it considers
necessary and appropriate to carry out its duties under this
subtitle.
(c) Action Upon Approval of Mayor's Preliminary Financial
Plan and Budget.--
(1) Certification to mayor.--
(A) In general.--If the Authority determines that the
financial plan and budget for the fiscal year submitted by
the Mayor under subsection (a) meets the requirements
applicable under section 201--
(i) the Authority shall approve the financial plan and
budget and shall provide the Mayor, the Council, the
President, and Congress with a notice certifying its
approval; and
(ii) the Mayor shall promptly submit the financial plan and
budget to the Council pursuant to section 442 of the District
of Columbia Self-Government and Governmental Reorganization
Act.
(B) Deemed approval after 30 days.--
(i) In general.--If the Authority has not provided the
Mayor, the Council, and Congress with a notice certifying
approval under subparagraph (A)(i) or a statement of
disapproval under subsection (d)(1) upon the expiration of
the 30-day period which begins on the date the Authority
receives the financial plan and budget from the Mayor under
subsection (a), the Authority shall be deemed to have
approved the financial plan and budget and to have provided
the Mayor, the Council, the President, and Congress with the
notice certifying approval described in subparagraph (A)(i).
(ii) Explanation of failure to respond.--If clause (i)
applies with respect to a financial plan and budget, the
Authority shall provide the Mayor, the Council, the President
and Congress with an explanation for its failure to provide
the notice certifying approval or the statement of
disapproval during the 30-day period described in such
clause.
(2) Adoption of financial plan and budget by council after
receipt of approved financial plan and budget.--
Notwithstanding the first sentence of section 446 of the
District of Columbia Self-Government and Governmental
Reorganization Act, not later than 30 days after receiving
the financial plan and budget for the fiscal year from the
Mayor under paragraph (1)(A)(ii), the Council shall by Act
adopt a financial plan and budget for the fiscal year which
shall serve as the adoption of the budgets of the District
government for the fiscal year under such section, and shall
submit such financial plan and budget to the Mayor and the
Authority.
(3) Review of council financial plan and budget by
authority.--Upon receipt of the financial plan and budget for
a fiscal year from the Council under paragraph (2) (taking
into account any items or provisions disapproved by the Mayor
or disapproved by the Mayor and reenacted by the Council
under section 404(f) of the District of Columbia Self-
Government and Governmental Reorganization Act, as amended by
subsection (f)(2)), the Authority shall promptly review the
financial plan and budget. In conducting the review, the
Authority may request any additional information it considers
necessary and appropriate to carry out its duties under this
subtitle.
(4) Results of authority review of council's initial
financial plan and budget.--
(A) Approval of council's initial financial plan and
budget.--If the Authority determines that the financial plan
and budget for the fiscal year submitted by the Council under
paragraph (2) meets the requirements applicable under section
201--
(i) the Authority shall approve the financial plan and
budget and shall provide the Mayor, the Council, the
President, and Congress with a notice certifying its
approval; and
(ii) the Council shall promptly submit the financial plan
and budget to the Mayor for transmission to the President and
Congress under section 446 of the District of Columbia Self-
Government and Governmental Reorganization Act.
(B) Disapproval of council's initial budget.--If the
Authority determines that the financial plan and budget for
the fiscal year submitted by the Council under paragraph (2)
does not meet the requirements applicable under section 201,
the Authority shall disapprove the financial plan and budget,
and shall provide the Mayor, the Council, the President, and
Congress with a statement containing--
(i) the reasons for such disapproval;
(ii) the amount of any shortfall in the budget or financial
plan; and
(iii) any recommendations for revisions to the budget the
Authority considers appropriate to ensure that the budget is
consistent with the financial plan and budget.
(C) Deemed approval after 15 days.--
(i) In general.--If the Authority has not provided the
Mayor, the Council, the President, and Congress with a notice
certifying approval under subparagraph (A)(i) or a statement
of disapproval under subparagraph (B) upon the expiration of
the 15-day period which begins on the date the Authority
receives the financial plan and budget from the Council under
paragraph (2), the Authority shall be deemed to have approved
the financial plan and budget and to have provided the Mayor,
the Council, the President, and Congress with the notice
certifying approval described in subparagraph (A)(i).
(ii) Explanation of failure to respond.--If clause (i)
applies with respect to a financial plan and budget, the
Authority shall provide the Mayor, the Council, the President
and Congress with an explanation for its failure to provide
the notice certifying approval or the statement of
disapproval during the 15-day period described in such
clause.
(5) Authority review of council's revised financial plan
and budget.--
(A) Submission of council's revised financial plan and
budget.--Not later than 15 days after receiving the statement
from the Authority under paragraph (4)(B), the Council shall
promptly by Act adopt a revised financial plan and budget for
the fiscal year which addresses the reasons for the
Authority's disapproval cited in the statement, and shall
submit such financial plan and budget to the Mayor and the
Authority.
(B) Approval of council's revised financial plan and
budget.--If, after reviewing the revised financial plan and
budget for a fiscal year submitted by the Council under
subparagraph (A) in accordance with the procedures described
in this subsection, the Authority determines that the revised
financial plan and budget meets the requirements applicable
under section 201--
(i) the Authority shall approve the financial plan and
budget and shall provide the Mayor, the Council, the
President, and Congress with a notice certifying its
approval; and
(ii) the Council shall promptly submit the financial plan
and budget to the Mayor for transmission to the President and
Congress under section 446 of the District of Columbia Self-
Government and Governmental Reorganization Act.
(C) Disapproval of council's revised financial plan and
budget.--
(i) In general.--If, after reviewing the revised financial
plan and budget for a fiscal year submitted by the Council
under subparagraph (A) in accordance with the procedures
described in this subsection, the Authority determines that
the revised financial plan and budget does not meet the
applicable requirements under section 201, the Authority
shall--

(I) disapprove the financial plan and budget;
(II) provide the Mayor, the Council, the President, and
Congress with a statement containing the reasons for such
disapproval and describing the amount of any shortfall in the
financial plan and budget; and
(III) approve and recommend a financial plan and budget for
the District government which meets the applicable
requirements under section 201, and submit such financial
plan and budget to the Mayor, the Council, the President, and
Congress.

(ii) Transmission of rejected financial plan and budget.--
The Council shall promptly submit the revised financial plan
and budget disapproved by the Authority under this
subparagraph to the Mayor for transmission to the President
and Congress under section 446 of the District of Columbia
Self-Government and Governmental Reorganization Act.
(D) Deemed approval after 15 days.--
(i) In general.--If the Authority has not provided the
Mayor, the Council, the President, and Congress with a notice
certifying approval under subparagraph (B)(i) or a statement
of disapproval under subparagraph (C) upon the expiration of
the 15-day period which begins on the date the Authority
receives the revised financial plan and budget submitted by
the Council under subparagraph (A), the Authority shall be
deemed to have approved the revised financial plan and budget
and to have provided the Mayor, the Council, the President,
and Congress with the notice certifying approval described in
subparagraph (B)(i).
(ii) Explanation of failure to respond.--If clause (i)
applies with respect to a financial plan and budget, the
Authority shall provide the Mayor, the Council, the President
and Congress with an explanation for its failure to provide
the notice certifying approval or the statement of
disapproval during the 15-day period described in such
clause.
(6) Deadline for transmission of financial plan and budget
by authority.--Notwithstanding any other provision of this
section, not later than the June 15 preceding each fiscal
year which is a control year, the Authority shall--
[[Page H4053]] (A) provide Congress with a notice
certifying its approval of the Council's initial financial
plan and budget for the fiscal year under paragraph (4)(A);
(B) provide Congress with a notice certifying its approval
of the Council's revised financial plan and budget for the
fiscal year under paragraph (5)(B); or
(C) submit to Congress an approved and recommended
financial plan and budget of the Authority for the District
government for the fiscal year under paragraph (5)(C).
(d) Action Upon Disapproval of Mayor's Preliminary
Financial Plan and Budget.--
(1) Statement of disapproval.--If the Authority determines
that the financial plan and budget for the fiscal year
submitted by the Mayor under subsection (a) does not meet the
requirements applicable under section 201, the Authority
shall disapprove the financial plan and budget, and shall
provide the Mayor and the Council with a statement
containing--
(A) the reasons for such disapproval;
(B) the amount of any shortfall in the financial plan and
budget; and
(C) any recommendations for revisions to the financial plan
and budget the Authority considers appropriate to ensure that
the financial plan and budget meets the requirements
applicable under section 201.
(2) Authority review of mayor's revised financial plan and
budget.--
(A) Submission of mayor's revised financial plan and
budget.--Not later than 15 days after receiving the statement
from the Authority under paragraph (1), the Mayor shall
promptly submit to the Authority and the Council a revised
financial plan and budget for the fiscal year which addresses
the reasons for the Authority's disapproval cited in the
statement.
(B) Approval of mayor's revised financial plan and
budget.--If the Authority determines that the revised
financial plan and budget for the fiscal year submitted by
the Mayor under subparagraph (A) meets the requirements
applicable under section 201--
(i) the Authority shall approve the financial plan and
budget and shall provide the Mayor, the Council, the
President, and Congress with a notice certifying its
approval; and
(ii) the Mayor shall promptly submit the financial plan and
budget to the Council pursuant to section 442 of the District
of Columbia Self-Government and Governmental Reorganization
Act.
(C) Disapproval of mayor's revised financial plan and
budget.--
(i) In general.--If the Authority determines that the
revised financial plan and budget for the fiscal year
submitted by the Mayor under subparagraph (A) does not meet
the requirements applicable under section 201, the Authority
shall--

(I) disapprove the financial plan and budget;
(II) shall provide the Mayor, the Council, the President,
and Congress with a statement containing the reasons for such
disapproval; and
(III) recommend a financial plan and budget for the
District government which meets the requirements applicable
under section 201 and submit such financial plan and budget
to the Mayor and the Council.

(ii) Submission of rejected financial plan and budget.--The
Mayor shall promptly submit the revised financial plan and
budget disapproved by the Authority under this subparagraph
to the Council pursuant to section 442 of the District of
Columbia Self-Government and Governmental Reorganization Act.
(D) Deemed approval after 15 days.--
(i) In general.--If the Authority has not provided the
Mayor, the Council, the President, and Congress with a notice
certifying approval under subparagraph (B)(i) or a statement
of disapproval under subparagraph (C) upon the expiration of
the 15-day period which begins on the date the Authority
receives the revised financial plan and budget submitted by
the Mayor under subparagraph (A), the Authority shall be
deemed to have approved the revised financial plan and budget
and to have provided the Mayor, the Council, the President,
and Congress with the notice certifying approval described in
subparagraph (B)(i).
(ii) Explanation of failure to respond.--If clause (i)
applies with respect to a financial plan and budget, the
Authority shall provide the Mayor, the Council, the President
and Congress with an explanation for its failure to provide
the notice certifying approval or the statement of
disapproval during the 15-day period described in such
clause.
(3) Action by council.--
(A) Adoption of financial plan and budget.--Notwithstanding
the first sentence of section 446 of the District of Columbia
Self-Government and Governmental Reorganization Act, not
later than 30 days after receiving the Mayor's approved
revised financial plan and budget for the fiscal year under
paragraph (2)(B) or (in the case of a financial plan and
budget disapproved by the Authority) the financial plan and
budget recommended by the Authority under paragraph
(2)(C)(i)(III), the Council shall by Act adopt a financial
plan and budget for the fiscal year which shall serve as the
adoption of the budgets of the District government for the
fiscal year under such section, and shall submit the
financial plan and budget to the Mayor and the Authority.
(B) Review by authority.--The financial plan and budget
submitted by the Council under subparagraph (A) shall be
subject to review by the Authority and revision by the
Council in the same manner as the financial plan and budget
submitted by the Council after an approved preliminary
financial plan and budget of the Mayor under paragraphs (3),
(4), (5), and (6) of subsection (c).
(e) Revisions to Financial Plan and Budget.--
(1) Permitting mayor to submit revisions.--The Mayor may
submit proposed revisions to the financial plan and budget
for a control year to the Authority at any time during the
year.
(2) Process for review, approval, disapproval, and council
action.--Except as provided in paragraph (3), the procedures
described in subsections (b), (c), and (d) shall apply with
respect to a proposed revision to a financial plan and budget
in the same manner as such procedures apply with respect to
the original financial plan and budget, except that
subparagraph (B) of subsection (c)(1) (relating to deemed
approval by the Authority of a preliminary financial plan and
budget of the Mayor) shall be applied as if the reference to
the term ``30-day period'' were a reference to ``20-day
period''.
(3) Exception for revisions not affecting appropriations.--
To the extent that a proposed revision to a financial plan
and budget adopted by the Council pursuant to this subsection
does not increase the amount of spending with respect to any
account of the District government, the revision shall become
effective upon the Authority's approval of such revision
(subject to review by Congress under section 602(c) of the
District of Columbia Self-Government and Governmental
Reorganization Act).
(f) Conforming Amendment to Budget Process Requirements
Under Home Rule Act.--
(1) Submission of unbalanced budgets.--Section 603 of the
District of Columbia Self-Government and Governmental
Reorganization Act (sec. 47-313, D.C. Code) is amended--
(A) in subsection (c), by striking ``The Council'' the
first place it appears and inserting ``Except as provided in
subsection (f), the Council'';
(B) in subsection (d), by striking ``The Mayor'' and
inserting ``Except as provided in subsection (f), the
Mayor''; and
(C) by adding at the end the following new subsection:
``(f) In the case of a fiscal year which is a control year
(as defined in section 305(4) of the District of Columbia
Financial Responsibility and Management Assistance Act of
1995)--
``(1) subsection (c) (other than the fourth sentence) and
subsection (d) shall not apply; and
``(2) the Council may not approve, and the Mayor may not
forward to the President, any budget which is not consistent
with the financial plan and budget established for the fiscal
year under subtitle A of title II of such Act.''.
(2) Expedited procedures for disapproval of items and
provisions of council budget by mayor.--Section 404(f) of the
District of Columbia Self-Government and Governmental
Reorganization Act (sec. 1-227(f), D.C. Code) is amended by
adding at the end the following new sentence: ``In the case
of any budget act for a fiscal year which is a control year
(as defined in section 305(4) of the District of Columbia
Financial Responsibility and Management Assistance Act of
1995), this subsection shall apply as if the reference in the
second sentence to `ten-day period' were a reference to
`five-day period' and the reference in the third sentence to
`thirty calendar days' were a reference to `5 calendar
days'.''.
(g) Permitting Mayor and Council to Specify Expenditures
Under School Board Budget During Control Year.--
(1) Mayor's estimate included in annual financial plan and
budget.--Section 2(h) of the Act entitled ``An Act to fix and
regulate the salaries of teachers, school officers, and other
employees of the board of education of the District of
Columbia'', approved June 20, 1906 (sec. 31-103, D.C. Code)
is amended by striking the period at the end and inserting
the following: ``, except that in the case of a year which is
a control year (as defined in section 305(4) of the District
of Columbia Financial Responsibility and Management
Assistance Act of 1995), the Mayor shall transmit the same
together with the Mayor's own request for the amount of money
required for the public schools for the year.''.
(2) Specification of expenditures.--Section 452 of the
District of Columbia Self-Government and Governmental
Reorganization Act (sec. 31-104, D.C. Code) is amended by
adding at the end the following new sentence: ``This section
shall not apply with respect to the annual budget for any
fiscal year which is a control year (as defined in section
305(4) of the District of Columbia Financial Responsibility
and Management Assistance Act of 1995).''.
(h) Permitting Separation of Employees in Accordance With
Financial Plan and Budget.--The fourth sentence of section
422(3) of the District of Columbia Self-Government and
Governmental Reorganization Act (sec. 1-242(3), D.C. Code) is
amended by striking ``pursuant to procedures'' and all that
follows through ``Act of 1991'' and inserting the following:
``in the implementation of a financial plan and budget for
the District government approved under subtitle A of title II
of the District of Columbia Financial Responsibility and
Management Assistance Act of 1995''.

[[Page H4054]]

SEC. 203. REVIEW OF ACTIVITIES OF DISTRICT GOVERNMENT TO
ENSURE COMPLIANCE WITH APPROVED FINANCIAL PLAN
AND BUDGET.

(a) Review of Council Acts.--
(1) Submission of acts to authority.--The Council shall
submit to the Authority each Act passed by the Council and
signed by the Mayor during a control year or vetoed by the
Mayor and repassed by two-thirds of the Council present and
voting during a control year, and each Act passed by the
Council and allowed to become effective without the Mayor's
signature during a control year, together with the estimate
of costs accompanying such Act required under section
602(c)(3) of the District of Columbia Self-Government and
Governmental Reorganization Act (as added by section 301(d)).
(2) Prompt review by authority.--Upon receipt of an Act
from the Council under paragraph (1), the Authority shall
promptly review the Act to determine whether it is consistent
with the applicable financial plan and budget approved under
this subtitle and with the estimate of costs accompanying the
Act (described in paragraph (1)).
(3) Actions by authority.--
(A) Approval.--Except as provided in subparagraph (C), if
the Authority determines that an Act is consistent with the
applicable financial plan and budget, the Authority shall
notify the Council that it approves the Act, and the Council
shall submit the Act to Congress for review in accordance
with section 602(c) of the District of Columbia Self-
Government and Governmental Reorganization Act.
(B) Finding of inconsistency.--Except as provided in
subparagraph (C), if the Authority determines that an Act is
significantly inconsistent with the applicable financial plan
and budget, the Authority shall--
(i) notify the Council that of its finding;
(ii) provide the Council with an explanation of the reasons
for its finding; and
(iii) to the extent the Authority considers appropriate,
provide the Council with recommendations for modifications to
the Act.
(C) Exception for emergency acts.--Subparagraphs (A) and
(B) shall not apply with respect to any act which the Council
determines according to section 412(a) of the District of
Columbia Self-Government and Governmental Reorganization Act
should take effect immediately because of emergency
circumstances.
(4) Effect of finding.--If the Authority makes a finding
with respect to an Act under paragraph (3)(B), the Council
may not submit the Act to Congress for review in accordance
with section 602(c) of the District of Columbia Self-
Government and Governmental Reorganization Act.
(5) Deemed approval.--If the Authority does not notify the
Council that it approves or disapproves an Act submitted
under this subsection during the 7-day period which begins on
the date the Council submits the Act to the Authority, the
Authority shall be deemed to have approved the Act in
accordance with paragraph (3)(A). At the option of the
Authority, the previous sentence shall be applied as if the
reference to ``7-day period'' were a reference to ``14-day
period'' if during such 7-day period the Authority so
notifies the Council and the Mayor.
(6) Preliminary review of proposed acts.--At the request of
the Council, the Authority may conduct a preliminary review
of proposed legislation before the Council to determine
whether the legislation as proposed would be consistent with
the applicable financial plan and budget approved under this
subtitle, except that any such preliminary review shall not
be binding on the Authority in reviewing any Act subsequently
submitted under this subsection.
(b) Effect of Approved Financial Plan and Budget on
Contracts and Leases.--
(1) Mandatory prior approval for certain contracts and
leases.--
(A) In general.--In the case of a contract or lease
described in subparagraph (B) which is proposed to be entered
into by the District government during a control year, the
Mayor (or the appropriate officer or agent of the District
government) shall submit the proposed contract or lease to
the Authority. The Authority shall review each contract or
lease submitted under this subparagraph, and the Mayor (or
the appropriate officer or agent of the District government)
may not enter into the contract or lease unless the Authority
determines that the proposed contract or lease is consistent
with the financial plan and budget for the fiscal year.
(B) Contracts and leases described.--A contract or lease
described in this subparagraph is--
(i) a labor contract entered into through collective
bargaining; or
(ii) such other type of contract or lease as the Authority
may specify for purposes of this subparagraph.
(2) Authority to review other contracts and leases after
execution.--
(A) In general.--In addition to the prior approval of
certain contracts and leases under paragraph (1), the
Authority may require the Mayor (or the appropriate officer
or agent of the District government) to submit to the
Authority any other contract (including a contract to carry
out a grant) or lease entered into by the District government
during a control year which is executed after the Authority
has approved the financial plan and budget for the year under
section 202(c) or 202(d), or any proposal of the District
government to renew, extend, or modify a contract or lease
during a control year which is made after the Authority has
approved such financial plan and budget.
(B) Review by authority.--The Authority shall review each
contract or lease submitted under subparagraph (A) to
determine if the contract or lease is consistent with the
financial plan and budget for the fiscal year. If the
Authority determines that the contract or lease is not
consistent with the financial plan and budget, the Mayor
shall take such actions as are within the Mayor's powers to
revise the contract or lease, or shall submit a proposed
revision to the financial plan and budget in accordance with
section 202(e), so that the contract or lease will be
consistent with the financial plan and budget.
(3) Special rule for fiscal year 1995.--The Authority may
require the Mayor to submit to the Authority any proposal to
renew, extend, or modify a contract or lease in effect during
fiscal year 1995 to determine if the renewal, extension, or
modification is consistent with the budget for the District
of Columbia under the District of Columbia Appropriations
Act, 1995.
(4) Special rule for contracts subject to council
approval.--In the case of a contract or lease which is
required to be submitted to the Authority under this
subsection and which is subject to approval by the Council
under the laws of the District of Columbia, the Mayor shall
submit such contract or lease to the Authority only after the
Council has approved the contract or lease.
(c) Restrictions on Reprogramming of Amounts in Budget
During Control Years.--
(1) Submissions of requests to authority.--If the Mayor
submits a request to the Council for the reprogramming of any
amounts provided in a budget for a fiscal year which is a
control year after the budget is adopted by the Council, the
Mayor shall submit such request to the Authority, which shall
analyze the affect of the proposed reprogramming on the
financial plan and budget for the fiscal year and submit its
analysis to the Council not later than 15 days after
receiving the request.
(2) No action permitted until analysis received.--The
Council may not adopt a reprogramming during a fiscal year
which is a control year, and no officer or employee of the
District government may carry out any reprogramming during
such a year, until the Authority has provided the Council
with an analysis of a request for the reprogramming in
accordance with paragraph (1).
SEC. 204. RESTRICTIONS ON BORROWING BY DISTRICT DURING
CONTROL YEAR.

(a) Prior Approval Required.--
(1) In general.--The District government may not borrow
money during a control year unless the Authority provides
prior certification that both the receipt of funds through
such borrowing and the repayment of obligations incurred
through such borrowing are consistent with the financial plan
and budget for the year.
(2) Revisions to financial plan and budget permitted.--If
the Authority determines that the borrowing proposed to be
undertaken by the District government is not consistent with
the financial plan and budget, the Mayor may submit to the
Authority a proposed revision to the financial plan and
budget in accordance with section 202(e) so that the
borrowing will be consistent with the financial plan and
budget as so revised.
(3) Borrowing described.--This subsection shall apply with
respect to any borrowing undertaken by the District
government, including borrowing through the issuance of bonds
under part E of title IV of the District of Columbia Self-
Government and Governmental Reorganization Act, the exercise
of authority to obtain funds from the United States Treasury
under title VI of the District of Columbia Revenue Act of
1939 (sec. 47-3401, D.C. Code), or any other means.
(4) Special rules for treasury borrowing during fiscal year
1995.--
(A) No prior approval required during initial period
following appointment.--The District government may
requisition advances from the United States Treasury under
title VI of the District of Columbia Revenue Act of 1939
(sec. 47-3401, D.C. Code) without the prior approval of the
Authority during the 45-day period which begins on the date
of the appointment of the members of the Authority (subject
to the restrictions described in such title, as amended by
subsection (c)).
(B) Criteria for approval during remainder of fiscal
year.--The District government may requisition advances
described in subparagraph (A) during the portion of fiscal
year 1995 occurring after the expiration of the 45-day period
described in such subparagraph if the Authority finds that--
(i) such borrowing is appropriate to meet the needs of the
District government to reduce deficits and discharge payment
obligations; and
(ii) the District government is making appropriate progress
toward meeting its responsibilities under this Act (and the
amendments made by this Act).
(b) Deposit of Funds Obtained Through Treasury With
Authority.--
(1) Automatic deposit during control year.--If the Mayor
requisitions funds from the Secretary of the Treasury
pursuant to title VI of the District of Columbia Revenue Act
of 1939 (sec. 47-3401, D.C. Code) during a control year
(beginning with fiscal year 1996), such funds shall be
deposited by the Secretary into an escrow account held by the
Authority, to be used as follows:
[[Page H4055]] (A) The Authority shall expend a portion of
the funds for its operations during the fiscal year in which
the funds are requisitioned, in such amount and under such
conditions as are established under the budget of the
Authority for the fiscal year under section 106(a).
(B) The Authority shall allocate the remainder of such
funds to the Mayor at such intervals and in accordance with
such terms and conditions as it considers appropriate,
consistent with the financial plan and budget for the year
and with any other withholding of funds by the Authority
pursuant to this Act.
(2) Optional deposit during fiscal year 1995.--
(A) During initial period following appointment.--If the
Mayor requisitions funds described in paragraph (1) during
the 45-day period which begins on the date of the appointment
of the members of the Authority, the Secretary of the
Treasury shall notify the Authority, and at the request of
the Authority shall deposit such funds into an escrow account
held by the Authority in accordance with paragraph (1).
(B) During remainder of fiscal year.--If the Mayor
requisitions funds described in paragraph (1) during the
portion of fiscal year 1995 occurring after the expiration of
the 45-day period described in subparagraph (A), the
Secretary of the Treasury shall deposit such funds into an
escrow account held by the Authority in accordance with
paragraph (1) at the request of the Authority.
(c) Conditions on Requisitions From Treasury.--Title VI of
the District of Columbia Revenue Act of 1939 (sec. 47-3401,
D.C. Code) is amended by striking all after the heading and
inserting the following:

``SEC. 601. TRANSITIONAL PROVISION FOR SHORT-TERM ADVANCES.

``(a) Transitional Short-Term Advances Made Before October
1, 1995.--
``(1) In general.--If the conditions in paragraph (2) are
satisfied, the Secretary shall make an advance of funds from
time to time, out of any money in the Treasury not otherwise
appropriated, for the purpose of assisting the District
government in meeting its general expenditures, as authorized
by Congress.
``(2) Conditions to making any transitional short-term
advance before october 1, 1995.--The Secretary shall make an
advance under this subsection if the following conditions are
satisfied:
``(A) the Mayor delivers to the Secretary a requisition for
an advance under this section;
``(B) as of the date on which the requisitioned advance is
to be made, the Authority has not approved a financial plan
and budget for the District government as meeting the
requirements of the District of Columbia Financial
Responsibility and Management Assistance Act of 1995;
``(C) the date on which the requisitioned advance is to be
made is not later than September 30, 1995;
``(D) the District government has delivered to the
Secretary--
``(i) a schedule setting forth the anticipated timing and
amounts of requisitions for advances under this subsection;
and
``(ii) evidence demonstrating to the satisfaction of the
Secretary that the District government is effectively unable
to obtain credit in the public credit markets or elsewhere in
sufficient amounts and on sufficiently reasonable terms to
meet the District government's financing needs;
``(E) the Secretary determines that there is reasonable
assurance of reimbursement for the advance from the amount
authorized to be appropriated as the annual Federal payment
to the District of Columbia under title V of the District of
Columbia Self-Government and Governmental Reorganization Act
for the fiscal year ending September 30, 1996; and
``(F) except during the 45-day period beginning on the date
of the appointment of the members of the Authority, the
Authority makes the findings described in section
204(a)(4)(B) of the District of Columbia Financial
Responsibility and Management Assistance Act of 1995.
``(3) Amount of any transitional short-term advance made
before october 1, 1995.--
``(A) In general.--Except as provided in subparagraph (C),
if the conditions described in subparagraph (B) are
satisfied, each advance made under this subsection shall be
in the amount designated by the Mayor in the Mayor's
requisition for such advance, except that--
``(i) the total amount requisitioned under this subsection
during the 30-day period which begins on the date of the
first requisition made under this subsection may not exceed
33\1/3\ percent of the fiscal year 1995 limit;
``(ii) the total amount requisitioned under this subsection
during the 60-day period which begins on the date of the
first requisition made under this subsection may not exceed
66\2/3\ percent of the fiscal year 1995 limit; and
``(iii) the total amount requisitioned under this
subsection after the expiration of the 60-day period which
begins on the date of the first requisition made under this
subsection may not exceed 100 percent of the fiscal year 1995
limit.
``(B) Conditions applicable to designated amount.--
Subparagraph (A) applies if the Mayor determines that the
amount designated in the Mayor's requisition for such advance
is needed to accomplish the purpose described in paragraph
(1), and (except during the 45-day period beginning on the
date of the appointment of the members of the Authority) the
Authority approves such amount.
``(C) Aggregate maximum amount outstanding.--The sum of the
anticipated principal and interest requirements of all
advances made under this subsection may not be greater than
the fiscal year 1995 limit.
``(D) Fiscal year 1995 limit described.--In this paragraph,
the `fiscal year 1995 limit' means the amount authorized to
be appropriated to the District of Columbia as the annual
Federal payment to the District of Columbia under title V of
the District of Columbia Self-Government and Governmental
Reorganization Act for the fiscal year ending September 30,
1995.
``(4) Maturity of any transitional short-term advance made
before october 1, 1995.--
``(A) In general.--Except as provided in subparagraph (B),
each advance made under this subsection shall mature on the
date designated by the Mayor in the Mayor's requisition for
such advance.
``(B) Latest permissible maturity date.--Notwithstanding
subparagraph (A), the maturity date for any advance made
under this subsection shall not be later than October 1,
1995.
``(5) Interest rate.--Each advance made under this
subsection shall bear interest at an annual rate equal to the
rate determined by the Secretary at the time that the
Secretary makes such advance taking into consideration the
prevailing yield on outstanding marketable obligations of the
United States with remaining periods to maturity comparable
to the maturity of such advance, plus \1/8\ of 1 percent.
``(6) Deposit of advances.--
``(A) In general.--Except as provided in subparagraph (B),
each advance made under this subsection for the account of
the District government shall be deposited by the Secretary
into such account as is designated by the Mayor in the
Mayor's requisition for such advance.
``(B) Exception.--Notwithstanding subparagraph (A), if (in
accordance with section 204(b)(2) of the District of Columbia
Financial Responsibility and Management Assistance Act of
1995) the Authority delivers a letter requesting the
Secretary to deposit all advances made under this subsection
for the account of the District government in an escrow
account held by the Authority, each advance made under this
subsection for the account of the District government after
the date of such letter shall be deposited by the Secretary
into the escrow account specified by the Authority in such
letter.
``(b) Transitional Short-Term Advances Made on or After
October 1, 1995 and before February 1, 1996.--
``(1) In general.--If the conditions in paragraph (2) are
satisfied, the Secretary shall make an advance of funds from
time to time, out of any money in the Treasury not otherwise
appropriated, for the same purpose as advances are made under
subsection (a).
``(2) Terms and conditions.--
``(A) In general.--Except as provided in subparagraph (B),
paragraphs (2), (4), and (5) of subsection (a) (other than
subparagraph (F) of paragraph (2)) shall apply to any advance
made under this subsection.
``(B) Exceptions.--
``(i) New conditions precedent to making advances.--The
conditions described in subsection (a)(2) shall apply with
respect to making advances on or after October 1, 1995, in
the same manner as such conditions apply with respect to
making advances before October 1, 1995, except that--

``(I) subparagraph (C) (relating to the last day on which
advances may be made) shall be applied as if the reference to
`September 30, 1995' were a reference to `January 31, 1996';
``(II) subparagraph (E) (relating to the Secretary's
determination of reasonable assurance of reimbursement from
the annual Federal payment appropriated to the District of
Columbia) shall be applied as if the reference to `September
30, 1996' were a reference to `September 30, 1997';
``(III) the Secretary may not make an advance under this
subsection unless all advances made under subsection (a) are
fully reimbursed by withholding from the annual Federal
payment appropriated to the District of Columbia for the
fiscal year ending September 30, 1996, under title V of the
District of Columbia Self-Government and Governmental
Reorganization Act, and applying toward reimbursement for
such advances an amount equal to the amount needed to fully
reimburse the Treasury for such advances; and
``(IV) the Secretary may not make an advance under this
subsection unless the Authority has provided the Secretary
with the prior certification described in section 204(a)(1)
of the District of Columbia Financial Responsibility and
Management Assistance Act of 1995.

``(ii) New latest permissible maturity date.--The
provisions of subsection (a)(4) shall apply with respect to
the maturity of advances made after October 1, 1995, in the
same manner as such provisions apply with respect to the
maturity of advances made before October 1, 1995, except that
subparagraph (B) of such subsection (relating to the latest
permissible maturity date) shall apply as if the reference to
`October 1, 1995' were a reference to `October 1, 1996'.
``(C) New maximum amount outstanding.--
``(i) In general.--Except as provided in clause (iii), if
the conditions described in
[[Page H4056]] clause (ii) are satisfied, each advance made
under this subsection shall be in the amount designated by
the Mayor in the Mayor's requisition for such advance.
``(ii) Conditions applicable to designated amount.-- Clause
(i) applies if the Mayor determines that the amount
designated in the Mayor's requisition for such advance is
needed to accomplish the purpose described in paragraph (1),
and the Authority approves such amount.
``(iii) Aggregate maximum amount outstanding.--The sum of
the anticipated principal and interest requirements of all
advances made under this paragraph may not be greater than 60
percent of the fiscal year 1996 limit.
``(D) Deposit of advances.--As provided in section 204(b)
of the District of Columbia Financial Responsibility and
Management Assistance Act of 1995, each advance made under
this subsection for the account of the District shall be
deposited by the Secretary into an escrow account held by the
Authority.
``(E) Fiscal year 1996 limit described.--In this paragraph,
the `fiscal year 1996 limit' means the amount authorized to
be appropriated to the District of Columbia as the annual
Federal payment to the District of Columbia under title V of
the District of Columbia Self-Government and Governmental
Reorganization Act for the fiscal year ending September 30,
1996.
``(c) Transitional Short-Term Advances Made on or After
February 1, 1996 and before October 1, 1996.--
``(1) In general.--If the conditions in paragraph (2) are
satisfied, the Secretary shall make an advance of funds from
time to time, out of any money in the Treasury not otherwise
appropriated, for the same purpose as advances are made under
subsection (a).
``(2) Terms and conditions.--
``(A) In general.--Except as provided in subparagraph (B),
subsection (b)(2) shall apply to any advance made under this
subsection.
``(B) Exceptions.--The conditions applicable under
subsection (b)(2) (other than paragraph (2)(B) of subsection
(a)) shall apply with respect to making advances on or after
February 1, 1996, and before October 1, 1996, in the same
manner as such conditions apply to making advances under such
subsection, except that--
``(i) in applying subparagraph (C) of subsection (a)(2) (as
described in subsection (b)(2)(B)(i)(I)), the reference to
`October 1, 1995' shall be deemed to be a reference to
`September 30, 1996';
``(ii) subparagraph (C)(iii) of subsection (b)(2) shall
apply as if the reference to `60 percent' were a reference to
`40 percent'; and
``(iii) no advance may be made unless the Secretary has
been provided the certifications and information described in
paragraphs (3) through (6) of section 602(b).
``(d) Transitional Short-Term Advances Made on or After
October 1, 1996 and before October 1, 1997.--
``(1) In general.--If the conditions in paragraph (2) are
satisfied, the Secretary shall make an advance of funds from
time to time, out of any money in the Treasury not otherwise
appropriated, for the same purpose as advances are made under
subsection (a).
``(2) Terms and conditions.--
``(A) In general.--Except as provided in subparagraph (B),
paragraphs (2), (4), and (5) of subsection (a) (other than
subparagraphs (B) and (F) of paragraph (2)) shall apply to
any advance made under this subsection.
``(B) Exceptions.--
``(i) New conditions precedent to making advances.--The
conditions described in subsection (a)(2) shall apply with
respect to making advances on or after October 1, 1996, and
before October 1, 1997, in the same manner as such conditions
apply with respect to making advances before October 1, 1995,
except that--

``(I) subparagraph (C) (relating to the last day on which
advances may be made) shall be applied as if the reference to
`September 30, 1995' were a reference to `September 30,
1997';
``(II) subparagraph (E) (relating to the Secretary's
determination of reasonable assurance of reimbursement from
the annual Federal payment appropriated to the District of
Columbia) shall be applied as if the reference to `September
30, 1996' were a reference to `September 30, 1997';
``(III) the Secretary may not make an advance under this
subsection unless all advances made under subsections (b) and
(c) are fully reimbursed by withholding from the annual
Federal payment appropriated to the District of Columbia for
the fiscal year ending September 30, 1997, under title V of
the District of Columbia Self-Government and Governmental
Reorganization Act, and applying toward reimbursement for
such advances an amount equal to the amount needed to fully
reimburse the Treasury for such advances; and
``(IV) the Secretary may not make an advance under this
subsection unless the Secretary has been provided the
certifications and information described in paragraphs (3)
through (6) of section 602(b).

``(ii) New latest permissible maturity date.--The
provisions of subsection (a)(4) shall apply with respect to
the maturity of advances made under this subsection, in the
same manner as such provisions apply with respect to the
maturity of advances made before October 1, 1995, except that
subparagraph (B) of such subsection (relating to the latest
permissible maturity date) shall apply as if the reference to
`September 30, 1995' were a reference to `September 30,
1997'.
``(C) New maximum amount outstanding.--
``(i) In general.--Except as provided in clause (iii), if
the conditions described in clause (ii) are satisfied, each
advance made under this subsection shall be in the amount
designated by the Mayor in the Mayor's requisition for such
advance.
``(ii) Conditions applicable to designated amount.-- Clause
(i) applies if the Mayor determines that the amount
designated in the Mayor's requisition for such advance is
needed to accomplish the purpose described in paragraph (1),
and the Authority approves such amount.
``(iii) Aggregate maximum amount outstanding.--The sum of
the anticipated principal and interest requirements of all
advances made under this paragraph may not be greater than
100 percent of the fiscal year 1997 limit.
``(iv) Fiscal year 1997 limit described.--In this
subparagraph, the `fiscal year 1997 limit' means the amount
authorized to be appropriated to the District of Columbia as
the annual Federal payment to the District of Columbia under
title V of the District of Columbia Self-Government and
Governmental Reorganization Act for the fiscal year ending
September 30, 1997.
``(D) Deposit of advances.--As provided in section 204(b)
of the District of Columbia Financial Responsibility and
Management Assistance Act of 1995, each advance made under
this subsection for the account of the District shall be
deposited by the Secretary into an escrow account held by the
Authority.

``SEC. 602. SHORT-TERM ADVANCES FOR SEASONAL CASH-FLOW
MANAGEMENT.

``(a) In General.--If the conditions in subsection (b) are
satisfied, the Secretary shall make an advance of funds from
time to time, out of any money in the Treasury not otherwise
appropriated, for the purpose of assisting the District
government in meeting its general expenditures, as authorized
by Congress, at times of seasonal cash-flow deficiencies.
``(b) Conditions to Making any Short-Term Advance.--The
Secretary shall make an advance under this section if--
``(1) the Mayor delivers to the Secretary a requisition for
an advance under this section;
``(2) the date on which the requisitioned advance is to be
made is in a control period;
``(3) the Authority certifies to the Secretary that--
``(A) the District government has prepared and submitted a
financial plan and budget for the District government;
``(B) there is an approved financial plan and budget in
effect under the District of Columbia Financial
Responsibility and Management Assistance Act of 1995 for the
fiscal year for which the requisition is to be made;
``(C) at the time of the Mayor's requisition for an
advance, the District government is in compliance with the
financial plan and budget;
``(D) both the receipt of funds from such advance and the
reimbursement of Treasury for such advance are consistent
with the financial plan and budget for the year; and
``(E) such advance will not adversely affect the financial
stability of the District government;
``(4) the Authority certifies to the Secretary, at the time
of the Mayor's requisition for an advance, that the District
government is effectively unable to obtain credit in the
public credit markets or elsewhere in sufficient amounts and
on sufficiently reasonable terms to meet the District
government's financing needs;
``(5) the Inspector General of the District of Columbia
certifies to the Secretary the information described in
paragraph (3) by providing the Secretary with a certification
conducted by an outside auditor under a contract entered into
pursuant to section 208(a)(4) of the District of Columbia
Procurement Practices Act of 1985;
``(6) the Secretary receives such additional certifications
and opinions relating to the financial position of the
District government as the Secretary determines to be
appropriate from such other Federal agencies and
instrumentalities as the Secretary determines to be
appropriate; and
``(7) the Secretary determines that there is reasonable
assurance of reimbursement for the advance from the amount
authorized to be appropriated as the annual Federal payment
to the District of Columbia under title V of the District of
Columbia Self-Government and Governmental Reorganization Act
for the fiscal year following the fiscal year in which such
advance is made.
``(c) Amount of any Short-Term Advance.--
``(1) In general.--Except as provided in paragraph (3), if
the conditions in paragraph (2) are satisfied, each advance
made under this section shall be in the amount designated by
the Mayor in the Mayor's requisition for such advance.
``(2) Conditions applicable to designated amount.--
Paragraph (1) applies if--
``(A) the Mayor determines that the amount designated in
the Mayor's requisition for such advance is needed to
accomplish the purpose described in subsection (a); and
``(B) the Authority--
``(i) concurs in the Mayor's determination under
subparagraph (A); and
``(ii) determines that the reimbursement obligation of the
District government for an advance made under this section in
the
[[Page H4057]] amount designated in the Mayor's requisition
is consistent with the financial plan for the year.
``(3) Maximum amount outstanding.--
``(A) In general.--Notwithstanding paragraph (1), the
unpaid principal balance of all advances made under this
section in any fiscal year of the District government shall
not at any time be greater than 100 percent of applicable
limit.
``(B) Special rule for fiscal year 1997.--The unpaid
principal balance of all advances made under this section in
fiscal year 1997 of the District government shall not at any
time be greater than the difference between--
``(i) 150 percent of the applicable limit for such fiscal
year; and
``(ii) the unpaid principal balance of any advances made
under section 601(d).
``(C) Applicable limit defined.--In this paragraph, the
`applicable limit' for a fiscal year is the amount authorized
under title V of the District of Columbia Self-Government and
Governmental Reorganization Act for appropriation as the
Federal payment to the District of Columbia for the fiscal
year following the fiscal year in which the advance is made.
``(d) Maturity of any Short-Term Advance.--
``(1) In general.--Except as provided in paragraph (3), if
the condition in paragraph (2) is satisfied, each advance
made under this section shall mature on the date designated
by the Mayor in the Mayor's requisition for such advance.
``(2) Condition applicable to designated maturity.--
Paragraph (1) applies if the Authority determines that the
reimbursement obligation of the District government for an
advance made under this section having the maturity date
designated in the Mayor's requisition is consistent with the
financial plan for the year.
``(3) Latest permissible maturity date.--Notwithstanding
paragraph (1), the maturity date for any advance made under
this section shall not be later than 11 months after the date
on which such advance is made.
``(e) Interest Rate.--Each advance made under this section
shall bear interest at an annual rate equal to a rate
determined by the Secretary at the time that the Secretary
makes such advance taking into consideration the prevailing
yield on outstanding marketable obligations of the United
States with remaining periods to maturity comparable to the
maturity of such advance, plus \1/8\ of 1 percent.
``(f) 10 Business-Day Zero Balance Requirement.--After the
expiration of the 12-month period beginning on the date on
which the first advance is made under this section, the
Secretary shall not make any new advance under this section
unless the District government has--
``(1) reduced to zero at the same time the principal
balance of all advances made under this section at least once
during the previous 12-month period; and
``(2) not requisitioned any advance to be made under this
section in any of the 10 business days following such
reduction.
``(g) Deposit of Advances.--As provided in section 204(b)
of the District of Columbia Financial Responsibility and
Management Assistance Act of 1995, advances made under this
section for the account of the District government shall be
deposited by the Secretary into an escrow account held by the
Authority.

``SEC. 603. SECURITY FOR ADVANCES.

``(a) In General.--The Secretary shall require the District
government to provide such security for any advance made
under this title as the Secretary determines to be
appropriate.
``(b) Authority to Require Specific Security.--As security
for any advance made under this title, the Secretary may
require the District government to--
``(1) pledge to the Secretary specific taxes and revenue of
the District government, if such pledging does not cause the
District government to violate existing laws or contracts;
and
``(2) establish a debt service reserve fund pledged to the
Secretary.

``SEC. 604. REIMBURSEMENT TO THE TREASURY.

``(a) Reimbursement Amount.--
``(1) In general.--Except as provided in paragraph (2), on
any date on which a reimbursement payment is due to the
Treasury under the terms of any advance made under this
title, the District shall pay to the Treasury the amount of
such reimbursement payment out of taxes and revenue collected
for the support of the District government.
``(2) Exceptions for transitional advances.--
``(A) Advances made before october 1, 1995.--
``(i) Financial plan and budget approved.--If the Authority
approves a financial plan for the District government before
October 1, 1995, the District government may use the proceeds
of any advance made under section 602 to discharge its
obligation to reimburse the Treasury for any advance made
under section 601(a).
``(ii) Financial plan and budget not approved.--If the
Authority has not approved a financial plan and budget for
the District government by October 1, 1995, the annual
Federal payment appropriated to the District government for
the fiscal year ending September 30, 1996, shall be withheld
and applied to discharge the District government's obligation
to reimburse the Treasury for any advance made under section
601(a).
``(B) Advances made on or after october 1, 1995.--
``(i) Financial plan and budget approved.--If the Authority
approves a financial plan and budget for the District
government during fiscal year 1996, the District may use the
proceeds of any advance made under section 602 to discharge
its obligation to reimburse the Treasury for any advance made
under section 601(b).
``(ii) Financial plan and budget not approved.--If the
Authority has not approved a financial plan and budget for
the District government by October 1, 1996, the annual
Federal payment appropriated to the District government for
the fiscal year ending September 30, 1997, shall be withheld
and applied to discharge the District government's obligation
to reimburse the Treasury for any advance made under section
601(b).
``(b) Remedies for Failure to Reimburse.--If, on any date
on which a reimbursement payment is due to the Treasury under
the terms of any advance made under this title, the District
government does not make such reimbursement payment, the
Secretary shall take the actions listed in this subsection.
``(1) Withhold annual federal payment.--Notwithstanding any
other law, before turning over to the Authority (on behalf of
the District government under section 205 of the District of
Columbia Financial Responsibility and Management Assistance
Act of 1995) any annual Federal payment appropriated to the
District government for any fiscal year under title V of the
District of Columbia Self-Government and Governmental
Reorganization Act (if any), the Secretary shall withhold
from such annual Federal payment, and apply toward
reimbursement for the payment not made, an amount equal to
the amount needed to fully reimburse the Treasury for the
payment not made.
``(2) Withhold other federal payments.--If, after the
Secretary takes the action described in paragraph (1), the
Treasury is not fully reimbursed, the Secretary shall
withhold from each grant, entitlement, loan, or other payment
to the District government by the Federal Government not
dedicated to making entitlement or benefit payments to
individuals, and apply toward reimbursement for the payment
not made, an amount that, when added to the amount withheld
from each other such grant, entitlement, loan, or other
payment, will be equal to the amount needed to fully
reimburse the Treasury for the payment not made.
``(3) Attach available district revenues.--If, after the
Secretary takes the actions described in paragraphs (1) and
(2), the Treasury is not fully reimbursed, the Secretary
shall attach any and all revenues of the District government
which the Secretary may lawfully attach, and apply toward
reimbursement for the payment not made, an amount equal to
the amount needed to fully reimburse the Treasury for the
payment not made.
``(4) Take other actions.--If, after the Secretary takes
the actions described in paragraphs (1) through (3), the
Treasury is not fully reimbursed, the Secretary shall take
any and all other actions permitted by law to recover from
the District government the amount needed to fully reimburse
the Treasury for the payment not made.

``SEC. 605. DEFINITIONS.

``For purposes of this title--
``(1) the term `Authority' means the District of Columbia
Financial Responsibility and Management Assistance Authority
established under section 101(a) of the District of Columbia
Financial Responsibility and Management Assistance Act of
1995;
``(2) the term `control period' has the meaning given such
term under section 305(4) of such Act;
``(3) the term `District government' has the meaning given
such term under section 305(5) of such Act;
``(4) the term `financial plan and budget' has the meaning
given such term under section 305(6) of such Act; and
``(5) the term `Secretary' means the Secretary of the
Treasury.''.
(d) Expenditure of Funds From Account in Accordance With
Authority Instructions.--Any funds allocated by the Authority
to the Mayor from the escrow account described in subsection
(b)(1) may be expended by the Mayor only in accordance with
the terms and conditions established by the Authority at the
time the funds are allocated.
(e) Prohibition Against Borrowing While Suit Pending.--The
Mayor may not requisition advances from the Treasury pursuant
to title VI of the District of Columbia Revenue Act of 1939
if there is an action filed by the Mayor or the Council which
is pending against the Authority challenging the
establishment of or any action taken by the Authority.

SEC. 205. DEPOSIT OF ANNUAL FEDERAL PAYMENT WITH AUTHORITY.

(a) In General.--
(1) Deposit into escrow account.--In the case of a fiscal
year which is a control year, the Secretary of the Treasury
shall deposit the annual Federal payment to the District of
Columbia for the year authorized under title V of the
District of Columbia Self-Government and Governmental
Reorganization Act into an escrow account held by the
Authority, which shall allocate the funds to the Mayor at
such intervals and in accordance with such terms and
conditions as it considers appropriate to implement the
financial plan for the year. In establishing such terms
[[Page H4058]] and conditions, the Authority shall give
priority to using the Federal payment for cash flow
management and the payment of outstanding bills owed by the
District government.
(2) Exception for amounts withheld for advances.--Paragraph
(1) shall not apply with respect to any portion of the
Federal payment which is withheld by the Secretary of the
Treasury in accordance with section 604 of title VI of the
District of Columbia Revenue Act of 1939 (as added by section
204(c)) to reimburse the Secretary for advances made under
title VI of such Act.
(b) Expenditure of Funds from Account in Accordance With
Authority Instructions.--Any funds allocated by the Authority
to the Mayor from the escrow account described in paragraph
(1) may be expended by the Mayor only in accordance with the
terms and conditions established by the Authority at the time
the funds are allocated.

SEC. 206. EFFECT OF FINDING OF NON-COMPLIANCE WITH FINANCIAL
PLAN AND BUDGET.

(a) Submission of Reports.--Not later than 30 days after
the expiration of each quarter of each fiscal year (beginning
with fiscal year 1996), the Mayor shall submit reports to the
Authority describing the actual revenues obtained and
expenditures made by the District government during the
quarter with its cash flows during the quarter, and comparing
such actual revenues, expenditures, and cash flows with the
most recent projections for these items.
(b) Demand for Additional Information.--If the Authority
determines, based on reports submitted by the Mayor under
subsection (a), independent audits, or such other information
as the Authority may obtain, that the revenues or
expenditures of the District government during a control year
are not consistent with the financial plan and budget for the
year, the Authority shall require the Mayor to provide such
additional information as the Authority determines to be
necessary to explain the inconsistency.
(c) Certification of Variance.--
(1) In general.--After requiring the Mayor to provide
additional information under subsection (b), the Authority
shall certify to the Council, the President, the Secretary of
the Treasury, and Congress that the District government is at
variance with the financial plan and budget unless--
(A)(i) the additional information provides an explanation
for the inconsistency which the Authority finds reasonable
and appropriate, or
(ii) the District government adopts or implements remedial
action (including revising the financial plan and budget
pursuant to section 202(e)) to correct the inconsistency
which the Authority finds reasonable and appropriate, taking
into account the terms of the financial plan and budget; and
(B) the Mayor agrees to submit the reports described in
subsection (a) on a monthly basis for such period as the
Authority may require.
(2) Special rule for inconsistencies attributable to acts
of congress.--
(A) Determination by authority.--If the Authority
determines that the revenues or expenditures of the District
government during a control year are not consistent with the
financial plan and budget for the year as approved by the
Authority under section 202 as a result of the terms and
conditions of the budget of the District government for the
year as enacted by Congress or as a result of any other law
enacted by Congress which affects the District of Columbia,
the Authority shall so notify the Mayor.
(B) Certification.--In the case of an inconsistency
described in subparagraph (A), the Authority shall certify to
the Council, the President, the Secretary of the Treasury,
and Congress that the District government is at variance with
the financial plan and budget unless the District government
adopts or implements remedial action (including revising the
financial plan and budget pursuant to section 202(e)) to
correct the inconsistency which the Authority finds
reasonable and appropriate, taking into account the terms of
the financial plan and budget.
(d) Effect of Certification.--If the Authority certifies to
the Secretary of the Treasury that a variance exists--
(1) the Authority may withhold any funds deposited with the
Authority under section 204(b) or section 205(a) which would
otherwise be expended on behalf of the District government;
and
(2) the Secretary shall withhold funds otherwise payable to
the District of Columbia under such Federal programs as the
Authority may specify (other than funds dedicated to making
entitlement or benefit payments to individuals), in such
amounts and under such other conditions as the Authority may
specify.
SEC. 207. RECOMMENDATIONS ON FINANCIAL STABILITY AND
MANAGEMENT RESPONSIBILITY.

(a) In General.--The Authority may at any time submit
recommendations to the Mayor, the Council, the President, and
Congress on actions the District government or the Federal
Government may take to ensure compliance by the District
government with a financial plan and budget or to otherwise
promote the financial stability, management responsibility,
and service delivery efficiency of the District government,
including recommendations relating to--
(1) the management of the District government's financial
affairs, including cash forecasting, information technology,
placing controls on expenditures for personnel, reducing
benefit costs, reforming procurement practices, and placing
other controls on expenditures;
(2) the relationship between the District government and
the Federal Government;
(3) the structural relationship of departments, agencies,
and independent agencies within the District government;
(4) the modification of existing revenue structures, or the
establishment of additional revenue structures;
(5) the establishment of alternatives for meeting
obligations to pay for the pensions of former District
government employees;
(6) modifications or transfers of the types of services
which are the responsibility of and are delivered by the
District government;
(7) modifications of the types of services which are
delivered by entities other than the District government
under alternative service delivery mechanisms (including
privatization and commercialization);
(8) the effects of District of Columbia laws and court
orders on the operations of the District government;
(9) the establishment of a personnel system for employees
of the District government which is based upon employee
performance standards; and
(10) the improvement of personnel training and proficiency,
the adjustment of staffing levels, and the improvement of
training and performance of management and supervisory
personnel.
(b) Response to Recommendations for Actions Within
Authority of District Government.--
(1) In general.--In the case of any recommendations
submitted under subsection (a) during a control year which
are within the authority of the District government to adopt,
not later than 90 days after receiving the recommendations,
the Mayor or the Council (whichever has the authority to
adopt the recommendation) shall submit a statement to the
Authority, the President, and Congress which provides notice
as to whether the District government will adopt the
recommendations.
(2) Implementation plan required for adopted
recommendations.--If the Mayor or the Council (whichever is
applicable) notifies the Authority and Congress under
paragraph (1) that the District government will adopt any of
the recommendations submitted under subsection (a), the Mayor
or the Council (whichever is applicable) shall include in the
statement a written plan to implement the recommendation
which includes--
(A) specific performance measures to determine the extent
to which the District government has adopted the
recommendation; and
(B) a schedule for auditing the District government's
compliance with the plan.
(3) Explanations required for recommendations not
adopted.--If the Mayor or the Council (whichever is
applicable) notifies the Authority, the President, and
Congress under paragraph (1) that the District government
will not adopt any recommendation submitted under subsection
(a) which the District government has authority to adopt, the
Mayor or the Council shall include in the statement
explanations for the rejection of the recommendations.
(c) Implementation of Rejected Recommendations by
Authority.--
(1) In general.--If the Mayor or the Council (whichever is
applicable) notifies the Authority, the President, and
Congress under subsection (b)(1) that the District government
will not adopt any recommendation submitted under subsection
(a) which the District government has authority to adopt, the
Authority may by a majority vote of its members take such
action concerning the recommendation as it deems appropriate,
after consulting with the Committee on Government Reform and
Oversight of the House of Representatives and the Committee
on Governmental Affairs of the Senate.
(2) Effective date.--This subsection shall apply with
respect to recommendations of the Authority made after the
expiration of the 6-month period which begins on the date of
the enactment of this Act.
SEC. 208. SPECIAL RULES FOR FISCAL YEAR 1996.

(a) Adoption of Transition Budget.--Notwithstanding any
provision of section 202 to the contrary, in the case of
fiscal year 1996, the following rules shall apply:
(1) Not later than 45 days after the appointment of its
members, the Authority shall review the proposed budget for
the District of Columbia for such fiscal year submitted to
Congress under section 446 of the District of Columbia Self-
Government and Governmental Reorganization Act (taking into
account any items or provisions disapproved by the Mayor or
disapproved by the Mayor and reenacted by the Council under
section 404(f) of the District of Columbia Self-Government
and Governmental Reorganization Act, as amended by section
202(f)(2)) and the multiyear plan for the District of
Columbia prepared pursuant to section 443 of the District of
Columbia Self-Government and Governmental Reorganization Act,
and shall submit any recommendations for modifications to
such financial plan and budget to promote the financial
stability of the District government to the Mayor, the
Council, the President, and Congress.
(2) Not later than 15 days after receiving the
recommendations of the Authority submitted under paragraph
(1), the Council (in consultation with the Mayor) shall
promptly adopt a revised budget for the fiscal year (in this
section referred to as the ``transition
[[Page H4059]] budget''), and shall submit the transition
budget to the Authority, the President, and Congress.
(3) Not later than 15 days after receiving the transition
budget from the Council under paragraph (2), the Authority
shall submit a report to the Mayor, the Council, the
President, and Congress analyzing the budget (taking into
account any items or provisions disapproved by the Mayor or
disapproved by the Mayor and reenacted by the Council under
section 404(f) of the District of Columbia Self-Government
and Governmental Reorganization Act, as amended by section
202(f)(2)), and shall include in the report such
recommendations for revisions to the transition budget as the
Authority considers appropriate to promote the financial
stability of the District government during the fiscal year.
(b) Financial Plan and Budget.--
(1) Deadline for submission.--For purposes of section 202,
the Mayor shall submit the financial plan and budget for
fiscal year 1996 as soon as practicable after the date of the
enactment of this Act (in accordance with guidelines
established by the Authority).
(2) Adoption by council.--In accordance with the procedures
applicable under section 202 (including procedures providing
for review by the Authority)--
(A) the Council shall adopt the financial plan and budget
for the fiscal year (including the supplemental budget
incorporated in the financial plan and budget) prior to the
submission by the Mayor of the financial plan and budget for
fiscal year 1997 under section 202(a); and
(B) the financial plan and budget adopted by the Council
(and, in the case of a financial plan and budget disapproved
by the Authority, together with the financial plan and budget
approved and recommended by the Authority) shall be submitted
to Congress (in accordance with the procedures applicable
under such section) as a supplemental budget request for
fiscal year 1996 (in accordance with section 446 of the
District of Columbia Self-Government and Governmental
Reorganization Act).
(3) Transition budget as temporary financial plan and
budget.--Until the approval of the financial plan and budget
for fiscal year 1996 by the Authority under this subsection,
the transition budget established under subsection (a) (as
enacted by Congress) shall serve as the financial plan and
budget adopted under this subtitle for purposes of this Act
(and any provision of law amended by this Act) for fiscal
year 1996.
(c) Restrictions on Advances From Treasury.--
(1) Monthly determination of progress toward financial plan
and budget.--During each month of fiscal year 1996 prior to
the adoption of the financial plan and budget, the Authority
shall determine whether the District government is making
appropriate progress in preparing and adopting a financial
plan and budget for the fiscal year under this subtitle.
(2) Certification.--The Authority shall provide the
President and Congress with a certification if the Authority
finds that the District government is not making appropriate
progress in developing the financial plan and budget for a
month, and shall notify the President and Congress that the
certification is no longer in effect if the Authority finds
that the District government is making such progress after
the certification is provided.
(3) Prohibition against allocation of advances if
certification in effect.--At any time during which a
certification under paragraph (2) is in effect, Authority may
not allocate any funds obtained through advances to the Mayor
under title VI of the District of Columbia Revenue Act of
1939 from the escrow account in which the funds are held.

SEC. 209. CONTROL PERIODS DESCRIBED.

(a) Initiation.--For purposes of this Act, a ``control
period'' is initiated upon the occurrence of any of the
following events (as determined by the Authority based upon
information obtained through the Mayor, the Inspector General
of the District of Columbia, or such other sources as the
Authority considers appropriate):
(1) The requisitioning by the Mayor of advances from the
Treasury of the United States under title VI of the District
of Columbia Revenue Act of 1939 (sec. 47-3401, D.C. Code), or
the existence of any unreimbursed amounts obtained pursuant
to such authority.
(2) The failure of the District government to provide
sufficient revenue to a debt service reserve fund of the
Authority under subtitle B.
(3) The default by the District government with respect to
any loans, bonds, notes, or other form of borrowing.
(4) The failure of the District government to meet its
payroll for any pay period.
(5) The existence of a cash deficit of the District
government at the end of any quarter of the fiscal year in
excess of the difference between the estimated revenues of
the District government and the estimated expenditures of the
District government (including repayments of temporary
borrowings) during the remainder of the fiscal year or the
remainder of the fiscal year together with the first 6 months
of the succeeding fiscal year (as determined by the Authority
in consultation with the Chief Financial Officer of the
District of Columbia).
(6) The failure of the District government to make required
payments relating to pensions and benefits for current and
former employees of the District government.
(7) The failure of the District government to make required
payments to any entity established under an interstate
compact to which the District of Columbia is a signatory.
(b) Termination.--
(1) In general.--A control period terminates upon the
certification by the Authority that--
(A) the District government has adequate access to both
short-term and long-term credit markets at reasonable
interest rates to meet its borrowing needs; and
(B) for 4 consecutive fiscal years (occurring after the
date of the enactment of this Act) the expenditures made by
the District government during each of the years did not
exceed the revenues of the District government during such
years (as determined in accordance with generally accepted
accounting principles, as contained in the comprehensive
annual financial report for the District of Columbia under
section 448(a)(4) of the District of Columbia Self-Government
and Governmental Reorganization Act).
(2) Consultation with inspector general.--In making the
determination under this subsection, the Authority shall
consult with the Inspector General of the District of
Columbia.
(c) Control Period Deemed to Exist Upon Enactment.--For
purposes of this subtitle, a control period is deemed to
exist upon the enactment of this Act.
Subtitle B--Issuance of Bonds
SEC. 211. AUTHORITY TO ISSUE BONDS.

(a) In General.--
(1) Request of mayor.--Subject to the requirements of this
subtitle, the Authority may at the request of the Mayor
pursuant to an Act of the Council issue bonds, notes, or
other obligations to borrow funds to obtain funds for the use
of the District government, in such amounts and in such
manner as the Authority considers appropriate.
(2) Special rule for instrumentalities with independent
borrowing authority.--In the case of an agency or
instrumentality of the District government which under law
has the authority to issue bonds, notes, or obligations to
borrow funds without the enactment of an Act of the Council,
the Authority may issue bonds, notes, or other obligations to
borrow funds for the use or functions of such agency or
instrumentality at the request of the head of the agency or
instrumentality.
(b) Deposit of Funds Obtained Through Borrowing With
Authority.--Any funds obtained by the District government
through borrowing by the Authority pursuant to this subtitle
shall be deposited into an escrow account held by the
Authority, which shall allocate such funds to the District
government in such amounts and at such times as the Authority
considers appropriate, consistent with the specified purposes
of such funds and the applicable financial plan and budget
under subtitle A.
(c) Uses of Funds Obtained Through Bonds.--Any funds
obtained through the issuance of bonds, notes, or other
obligations pursuant to this subtitle may be used for any
purpose (consistent with the applicable financial plan and
budget) under subtitle A for which the District government
may use borrowed funds under the District of Columbia Self-
Government and Governmental Reorganization Act and for any
other purpose which the Authority considers appropriate.

SEC. 212. PLEDGE OF SECURITY INTEREST IN REVENUES OF DISTRICT
GOVERNMENT.

(a) In General.--The Authority may pledge or grant a
security interest in revenues to individuals or entities
purchasing bonds, notes, or other obligations issued pursuant
to this subtitle.
(b) Dedication of Revenue Stream From District
Government.--The Authority shall require the Mayor--
(1) to pledge or direct taxes or other revenues otherwise
payable to the District government (which are not otherwise
pledged or committed), including payments from the Federal
Government, to the Authority for purposes of securing
repayment of bonds, notes, or other obligations issued
pursuant to this subtitle; and
(2) to transfer the proceeds of any tax levied for purposes
of securing such bonds, notes, or other obligations to the
Authority immediately upon collection.

SEC. 213. ESTABLISHMENT OF DEBT SERVICE RESERVE FUND.

(a) In General.--As a condition for the issuance of bonds,
notes, or other obligations pursuant to this subtitle, the
Authority shall establish a debt service reserve fund in
accordance with this section.
(b) Requirements for Fund.--
(1) Fund described.--A debt service reserve fund
established by the Authority pursuant to this subsection
shall consist of such funds as the Authority may make
available, and shall be a trust fund held for the benefit and
security of the obligees of the Authority whose bonds, notes,
or other obligations are secured by such fund.
(2) Uses of funds.--Amounts in a debt service reserve fund
may be used solely for the payment of the principal of bonds
secured in whole or in part by such fund, the purchase or
redemption of such bonds, the payment of interest on such
bonds, or the payment of any redemption premium required to
be paid when such bonds and notes are redeemed prior to
maturity.
(3) Restrictions on withdrawals.--
[[Page H4060]] (A) In general.--Amounts in a debt service
reserve fund may not be withdrawn from the fund at any time
in an amount that would reduce the amount of the fund to less
than the minimum reserve fund requirement established for
such fund in the resolution of the Authority creating such
fund, except for withdrawals for the purpose of making
payments when due of principal, interest, redemption premiums
and sinking fund payments, if any, with respect to such bonds
for the payment of which other moneys of the Authority are
not available, and for the purpose of funding the operations
of the Authority for a fiscal year (in such amounts and under
such conditions as are established under the budget of the
Authority for the fiscal year under section 106(a)).
(B) Use of excess funds.--Nothing in subparagraph (A) may
be construed to prohibit the Authority from transferring any
income or interest earned by, or increments to, any debt
service reserve fund due to the investment thereof to other
funds or accounts of the Authority (to the extent such
transfer does not reduce the amount of the debt service
reserve fund below the minimum reserve fund requirement
established for such fund) for such purposes as the Authority
considers appropriate to promote the financial stability and
management efficiency of the District government.

SEC. 214. OTHER REQUIREMENTS FOR ISSUANCE OF BONDS.

(a) Minimum Debt Service Reserve Fund Requirement.--The
Authority may not at any time issue bonds, notes, or other
obligations pursuant to this subtitle which are secured in
whole or in part by a debt service reserve fund under section
213 if issuance of such bonds would cause the amount in the
debt reserve fund to fall below the minimum reserve
requirement for such fund, unless the Authority at the time
of issuance of such bonds shall deposit in the fund an amount
(from the proceeds of the bonds to be issued or from other
sources) which when added to the amount already in such fund
will cause the total amount on deposit in such fund to equal
or exceed the minimum reserve fund requirement established by
the Authority at the time of the establishment of the fund.
(b) Amounts Included in Aggregate Limit on District
Borrowing.--Any amounts provided to the District government
through the issuance of bonds, notes, or other obligations to
borrow funds pursuant to this subtitle shall be taken into
account in determining whether the amount of funds borrowed
by the District of Columbia during a fiscal year exceeds the
limitation on such amount provided under section 603(b) of
the District of Columbia Self-Government and Governmental
Reorganization Act.

SEC. 215. NO FULL FAITH AND CREDIT OF THE UNITED STATES.

The full faith and credit of the United States is not
pledged for the payment of any principal of or interest on
any bond, note, or other obligation issued by the Authority
pursuant to this subtitle. The United States is not
responsible or liable for the payment of any principal of or
interest on any bond, note, or other obligation issued by the
Authority pursuant to this subtitle.
Subtitle C--Other Duties of Authority
SEC. 221. DUTIES OF AUTHORITY DURING YEAR OTHER THAN CONTROL
YEAR.

(a) In General.--During the period beginning upon the
termination of a control period pursuant to section 209(b)
and ending with the suspension of its activities pursuant to
section 107(a), the Authority shall conduct the following
activities:
(1) The Authority shall review the budgets of the District
government adopted by the Council under section 446 of the
District of Columbia Self-Government and Governmental
Reorganization Act for each fiscal year occurring during such
period.
(2) At such time prior to the enactment of such budget by
Congress as the Authority considers appropriate, the
Authority shall prepare a report analyzing the budget and
submit the report to the Mayor, the Council, the President,
and Congress.
(3) The Authority shall monitor the financial status of the
District government and shall submit reports to the Mayor,
the Council, the President, and Congress if the Authority
determines that a risk exists that a control period may be
initiated pursuant to section 209(a).
(4) The Authority shall carry out activities under subtitle
B with respect to bonds, notes, or other obligations of the
Authority outstanding during such period.
(b) Requiring Mayor to Submit Budgets to Authority.--With
respect to the budget for each fiscal year occurring during
the period described in subsection (a), at the time the Mayor
submits the budget of the District government adopted by the
Council to the President under section 446 of the District of
Columbia Self-Government and Governmental Reorganization Act,
the Mayor shall submit such budget to the Authority.

SEC. 222. GENERAL ASSISTANCE IN ACHIEVING FINANCIAL STABILITY
AND MANAGEMENT EFFICIENCY.

In addition to any other actions described in this title,
the Authority may undertake cooperative efforts to assist the
District government in achieving financial stability and
management efficiency, including--
(1) assisting the District government in avoiding defaults,
eliminating and liquidating deficits, maintaining sound
budgetary practices, and avoiding interruptions in the
delivery of services;
(2) assisting the District government in improving the
delivery of municipal services, the training and
effectiveness of personnel of the District government, and
the efficiency of management and supervision; and
(3) making recommendations to the President for
transmission to Congress on changes to this Act or other
Federal laws, or other actions of the Federal Government,
which would assist the District government in complying with
an approved financial plan and budget under subtitle A.

SEC. 223. OBTAINING REPORTS.

The Authority may require the Mayor, the Chair of the
Council, the Chief Financial Officer of the District of
Columbia, and the Inspector General of the District of
Columbia, to prepare and submit such reports as the Authority
considers appropriate to assist it in carrying out its
responsibilities under this Act, including submitting copies
of any reports regarding revenues, expenditures, budgets,
costs, plans, operations, estimates, and other financial or
budgetary matters of the District government.

SEC. 224. REPORTS AND COMMENTS.

(a) Annual Reports to Congress.--Not later than 30 days
after the last day of each fiscal year which is a control
year, the Authority shall submit a report to Congress
describing--
(1) the progress made by the District government in meeting
the objectives of this Act during the fiscal year;
(2) the assistance provided by the Authority to the
District government in meeting the purposes of this Act for
the fiscal year; and
(3) any other activities of the Authority during the fiscal
year.
(b) Review and Analysis of Performance and Financial
Accountability Reports.--
(1) In general.--The Authority shall review each report
prepared and submitted by the Mayor under section 456 of the
District of Columbia Self-Government and Governmental
Reorganization Act (as added by section 3(a) of the Federal
Payment Reauthorization Act of 1994), and shall submit a
report to Congress analyzing the completeness and accuracy of
such reports.
(2) Submission of reports by mayor.--Section 456 of the
District of Columbia Self-Government and Governmental
Reorganization Act, as added by section 3(a) of the Federal
Payment Reauthorization Act of 1994, is amended by adding at
the end the following new subsection:
``(e) Submission of Reports to District of Columbia
Financial Responsibility and Management Assistance
Authority.--In the case of any report submitted by the Mayor
under this section for a fiscal year (or any quarter of a
fiscal year) which is a control year under the District of
Columbia Financial Responsibility and Management Assistance
Act of 1995, the Mayor shall submit the report to the
District of Columbia Financial Responsibility and Management
Assistance Authority established under section 101(a) of such
Act in addition to any other individual to whom the Mayor is
required to submit the report under this section.''.
(c) Comments Regarding Activities of District Government.--
At any time during a control year, the Authority may submit a
report to Congress describing any action taken by the
District government (or any failure to act by the District
government) which the Authority determines will adversely
affect the District government's ability to comply with an
approved financial plan and budget under subtitle A or will
otherwise have a significant adverse impact on the best
interests of the District of Columbia.
(d) Reports on Effect of Federal Laws on District
Government.--At any time during any year, the Authority may
submit a report to the Mayor, the Council, the President, and
Congress on the effect of laws enacted by Congress on the
financial plan and budget for the year and on the financial
stability and management efficiency of the District
government in general.
(e) Making Reports Publicly Available.--The Authority shall
make any report submitted under this section available to the
public, except to the extent that the Authority determines
that the report contains confidential material.
TITLE III--MISCELLANEOUS PROVISIONS
SEC. 301. OTHER DISTRICT BUDGET REFORMS.

(a) Inclusion of All Funds of District in Budget of
District Government.--
(1) In general.--Section 103 of the District of Columbia
Self-Government and Governmental Reorganization Act (sec. 1-
202, D.C. Code) is amended--
(A) by amending paragraph (10) to read as follows:
``(10) The term `District revenues' means all funds derived
from taxes, fees, charges, miscellaneous receipts, the annual
Federal payment to the District authorized under title V,
grants and other forms of financial assistance, or the sale
of bonds, notes, or other obligations, and any funds
administered by the District government under cost sharing
arrangements.'';
(B) by amending paragraph (14) to read as follows:
``(14) The term `resources' means revenues, balances,
enterprise or other revolving funds, and funds realized from
borrowing.''; and
(C) by amending paragraph (15) to read as follows:
[[Page H4061]] ``(15) The term `budget' means the entire
request for appropriations or loan or spending authority for
all activities of all departments or agencies of the District
of Columbia financed from all existing, proposed or
anticipated resources, and shall include both operating and
capital expenditures.''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply with respect to revenues, resources, and budgets
of the District of Columbia for fiscal years beginning with
fiscal year 1996.
(b) Restrictions on Reprogramming of Funds.--
(1) In general.--Section 446 of such Act (sec. 47-304, D.C.
Code) is amended by adding at the end the following: ``After
the adoption of the annual budget for a fiscal year
(beginning with the annual budget for fiscal year 1995), no
reprogramming of amounts in the budget may occur unless the
Mayor submits to the Council a request for such reprogramming
and the Council approves the request, but only if any
additional expenditures provided under such request for an
activity are offset by reductions in expenditures for another
activity.''.
(2) Conforming amendment.--Section 5 of D.C. Law 3-100
(sec. 47-364, D.C. Code) is hereby repealed.
(c) Permitting Council to Request Budget Adjustments From
Mayor.--Section 442 of the District of Columbia Self-
Government and Governmental Reorganization Act (sec. 47-301,
D.C. Code) is amended by adding at the end the following new
subsection:
``(d) The Mayor shall prepare and submit to the Council a
proposed supplemental or deficiency budget recommendation
under subsection (c) if the Council by resolution requests
the Mayor to submit such a recommendation.''.
(d) Requiring Budgetary Impact Statements to Accompany Acts
of Council.--
(1) In general.--Section 602(c) of the District of Columbia
Self-Government and Governmental Reorganization Act (sec. 1-
233(c), D.C. Code) is amended by adding at the end the
following new paragraph:
``(3) The Council shall submit with each Act transmitted
under this subsection an estimate of the costs which will be
incurred by the District of Columbia as a result of the
enactment of the Act in each of the first 4 fiscal years for
which the Act is in effect, together with a statement of the
basis for such estimate.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to Acts of the Council transmitted on or after
October 1, 1995.
(e) Extension of Authorization of Annual Federal Payment.--
Section 503(c) of the District of Columbia Self-Government
and Governmental Reorganization Act (sec. 47-3406.1(c), D.C.
Code), as added by section 2 of the Federal Payment
Reauthorization Act of 1994, is amended by striking ``fiscal
year 1996'' and inserting ``each of the fiscal years 1996,
1997, 1998, and 1999''.

SEC. 302. ESTABLISHMENT OF CHIEF FINANCIAL OFFICER OF
DISTRICT OF COLUMBIA.

(a) In General.--Part B of title IV of the District of
Columbia Self-Government and Governmental Reorganization Act
is amended by adding at the end the following new section:

``chief financial officer of the district of columbia

``Sec. 424. (a) Establishment of Office.--
``(1) In general.--There is hereby established within the
executive branch of the government of the District of
Columbia an Office of the Chief Financial Officer of the
District of Columbia (hereafter referred to as the `Office'),
which shall be headed by the Chief Financial Officer of the
District of Columbia (hereafter referred to as the `Chief
Financial Officer').
``(2) Office of the treasurer.--The Office shall include
the Office of the Treasurer, which shall be headed by the
Treasurer of the District of Columbia, who shall be appointed
by the Chief Financial Officer and subject to the Chief
Financial Officer's direction and control.
``(3) Transfer of other offices.--Effective with the
appointment of the first Chief Financial Officer under
subsection (b), the functions and personnel of the following
offices are transferred to the Office:
``(A) The Controller of the District of Columbia.
``(B) The Office of the Budget.
``(C) The Office of Financial Information Services.
``(D) The Department of Finance and Revenue.
``(4) Service of heads of other offices.--
``(A) Office heads appointed by mayor.--With respect to the
head of the Office of the Budget and the head of the
Department of Finance and Revenue--
``(i) the Mayor shall appoint such individuals with the
advice and consent of the Council, subject to the approval of
the Authority during a control year; and
``(ii) during a control year, the Authority may remove such
individuals from office for cause, after consultation with
the Mayor.
``(B) Office heads appointed by chief financial officer.--
With respect to the Controller of the District of Columbia
and the head of the Office of Financial Information
Services--
``(i) the Chief Financial Officer shall appoint such
individuals subject to the approval of the Mayor; and
``(ii) the Chief Financial Officer may remove such
individuals from office for cause, after consultation with
the Mayor.
``(b) Appointment.--
``(1) In general.--
``(A) Control year.--During a control year, the Chief
Financial Officer shall be appointed by the Mayor as follows:
``(i) Prior to the appointment of the Chief Financial
Officer, the Authority may submit recommendations for the
appointment to the Mayor.
``(ii) In consultation with the Authority and the Council,
the Mayor shall nominate an individual for appointment and
notify the Council of the nomination.
``(iii) After the expiration of the 7-day period which
begins on the date the Mayor notifies the Council of the
nomination under clause (ii), the Mayor shall notify the
Authority of the nomination.
``(iv) The nomination shall be effective subject to
approval by a majority vote of the Authority.
``(B) Other years.--During a year other than a control
year, the Chief Financial Officer shall be appointed by the
Mayor with the advice and consent of the Council. Prior to
appointment, the Authority may submit recommendations for the
appointment.
``(2) Removal.--
``(A) Control year.--During a control year, the Chief
Financial Officer may be removed for cause by the Authority
or by the Mayor with the approval of the Authority.
``(B) Other years.--During a year other than a control
year, the Chief Financial Officer shall serve at the pleasure
of the Mayor, except that the Chief Financial Officer may
only be removed for cause.
``(3) Salary.--The Chief Financial Officer shall be paid at
an annual rate determined by the Mayor, except that such rate
may not exceed the rate of basic pay payable for level IV of
the Executive Schedule.
``(c) Functions During Control Year.--During a control
year, the Chief Financial Officer shall have the following
duties:
``(1) Preparing the financial plan and budget for the use
of the Mayor for purposes of subtitle A of title II of the
District of Columbia Financial Responsibility and Management
Assistance Act of 1995.
``(2) Preparing the budgets of the District of Columbia for
the year for the use of the Mayor for purposes of part D.
``(3) Assuring that all financial information presented by
the Mayor is presented in a manner, and is otherwise
consistent with, the requirements of the District of Columbia
Financial Responsibility and Management Assistance Act of
1995.
``(4) Implementing appropriate procedures and instituting
such programs, systems, and personnel policies within the
Officer's authority, to ensure that budget, accounting and
personnel control systems and structures are synchronized for
budgeting and control purposes on a continuing basis.
``(5) With the approval of the Authority, preparing and
submitting to the Mayor and the Council--
``(A) annual estimates of all revenues of the District of
Columbia (without regard to the source of such revenues),
including proposed revenues, which shall be binding on the
Mayor and the Council for purposes of preparing and
submitting the budget of the District government for the year
under part D, except that the Mayor and the Council may
prepare the budget based on estimates of revenues which are
lower than those prepared by the Chief Financial Officer; and
``(B) quarterly re-estimates of the revenues of the
District of Columbia during the year.
``(6) Supervising and assuming responsibility for financial
transactions to ensure adequate control of revenues and
resources, and to ensure that appropriations are not
exceeded.
``(7) Maintaining systems of accounting and internal
control designed to provide--
``(A) full disclosure of the financial impact of the
activities of the District government;
``(B) adequate financial information needed by the District
government for management purposes;
``(C) effective control over, and accountability for, all
funds, property, and other assets of the District of
Columbia; and
``(D) reliable accounting results to serve as the basis for
preparing and supporting agency budget requests and
controlling the execution of the budget.
``(8) Submitting to the Council a financial statement of
the District government, containing such details and at such
times as the Council may specify.
``(9) Supervising and assuming responsibility for the
assessment of all property subject to assessment and special
assessments within the corporate limits of the District of
Columbia for taxation, preparing tax maps, and providing such
notice of taxes and special assessments (as may be required
by law).
``(10) Supervising and assuming responsibility for the
levying and collection of all taxes, special assessments,
licensing fees, and other revenues of the District of
Columbia (as may be required by law), and receiving all
amounts paid to the District of Columbia from any source
(including the Authority).
``(11) Maintaining custody of all public funds belonging to
or under the control of the District government (or any
department or agency of the District government), and
depositing all amounts paid in such depositories and under
such terms and conditions as may be designated by the Council
or the Authority.
[[Page H4062]] ``(12) Maintaining custody of all investment
and invested funds of the District government or in
possession of the District government in a fiduciary
capacity, and maintaining the safekeeping of all bonds and
notes of the District government and the receipt and delivery
of District government bonds and notes for transfer,
registration, or exchange.
``(13) Apportioning the total of all appropriations and
funds made available during the year for obligation so as to
prevent obligation or expenditure in a manner which would
result in a deficiency or a need for supplemental
appropriations during the year, and (with respect to
appropriations and funds available for an indefinite period
and all authorizations to create obligations by contract in
advance of appropriations) apportioning the total of such
appropriations, funds, or authorizations in the most
effective and economical manner.
``(14) Certifying all contracts (whether directly or
through delegation) prior to execution as to the availability
of funds to meet the obligations expected to be incurred by
the District government under such contracts during the year.
``(15) Prescribing the forms of receipts, vouchers, bills,
and claims to be used by all agencies, offices, and
instrumentalities of the District government.
``(16) Certifying and approving prior to payment all bills,
invoices, payrolls, and other evidences of claims, demands,
or charges against the District government, and determining
the regularity, legality, and correctness of such bills,
invoices, payrolls, claims, demands, or charges.
``(17) In coordination with the Inspector General of the
District of Columbia, performing internal audits of accounts
and operations and records of the District government,
including the examination of any accounts or records of
financial transactions, giving due consideration to the
effectiveness of accounting systems, internal control, and
related administrative practices of the departments and
agencies of the District government.
``(d) Functions During All Years.--At all times, the Chief
Financial Officer shall have the following duties:
``(1) Exercising responsibility for the administration and
supervision of the District of Columbia Treasurer (except
that the Chief Financial Officer may delegate any portion of
such responsibility as the Chief Financial Officer considers
appropriate and consistent with efficiency).
``(2) Administering all borrowing programs of the District
government for the issuance of long-term and short-term
indebtedness.
``(3) Administering the cash management program of the
District government, including the investment of surplus
funds in governmental and non-governmental interest-bearing
securities and accounts.
``(4) Administering the centralized District government
payroll and retirement systems.
``(5) Governing the accounting policies and systems
applicable to the District government.
``(6) Preparing appropriate annual, quarterly, and monthly
financial reports of the accounting and financial operations
of the District government.
``(7) Not later than 120 days after the end of each fiscal
year (beginning with fiscal year 1995), preparing the
complete financial statement and report on the activities of
the District government for such fiscal year, for the use of
the Mayor under section 448(a)(4) of the District of Columbia
Self-Government and Governmental Reorganization Act.
``(e) Functions of Treasurer.--At all times, the Treasurer
shall have the following duties:
``(1) Assisting the Chief Financial Officer in reporting
revenues received by the District government, including
submitting annual and quarterly reports concerning the cash
position of the District government not later than 60 days
after the last day of the quarter (or year) involved. Such
reports shall include:
``(A) Comparative reports of revenue and other receipts by
source, including tax, nontax, and Federal revenues, grants
and reimbursements, capital program loans, and advances. Each
source shall be broken down into specific components.
``(B) Statements of the cash flow of the District
government for the preceding quarter or year, including
receipts, disbursements, net changes in cash inclusive of the
beginning balance, cash and investment, and the ending
balance, inclusive of cash and investment. Such statements
shall reflect the actual, planned, better or worse dollar
amounts and the percentage change with respect to the current
quarter, year-to-date, and fiscal year.
``(C) Quarterly cash flow forecast for the quarter or year
involved, reflecting receipts, disbursements, net change in
cash inclusive of the beginning balance, cash and investment,
and the ending balance, inclusive of cash and investment with
respect to the actual dollar amounts for the quarter or year,
and projected dollar amounts for each of the 3 succeeding
quarters.
``(D) Monthly reports reflecting a detailed summary
analysis of all District of Columbia government investments,
including, but not limited to--
``(i) the total of long-term and short-term investments;
``(ii) a detailed summary analysis of investments by type
and amount, including purchases, sales (maturities), and
interest;
``(iii) an analysis of investment portfolio mix by type and
amount, including liquidity, quality/risk of each security,
and similar information;
``(iv) an analysis of investment strategy, including near-
term strategic plans and projects of investment activity, as
well as forecasts of future investment strategies based on
anticipated market conditions, and similar information;
``(v) an analysis of cash utilization, including--

``(I) comparisons of budgeted percentages of total cash to
be invested with actual percentages of cash invested and the
dollar amounts;
``(II) comparisons of the next return on invested cash
expressed in percentages (yield) with comparable market
indicators and established District of Columbia government
yield objectives; and
``(III) comparisons of estimated dollar return against
actual dollar yield.

``(E) Monthly reports reflecting a detailed summary
analysis of long-term and short-term borrowings inclusive of
debt as authorized by section 603, in the current fiscal year
and the amount of debt for each succeeding fiscal year not to
exceed 5 years. All such reports shall reflect--
``(i) the amount of debt outstanding by type of instrument;
``(ii) the amount of authorized and unissued debt,
including availability of short-term lines of credit, United
States Treasury borrowings, and similar information;
``(iii) a maturity schedule of the debt;
``(iv) the rate of interest payable upon the debt; and
``(v) the amount of debt service requirements and related
debt service reserves.
``(2) Such other functions assigned to the Chief Financial
Officer under subsection (c) or subsection (d) as the Chief
Financial Officer may delegate.
``(f) Definitions.--In this section--
``(1) the term `Authority' means the District of Columbia
Financial Responsibility and Management Assistance Authority
established under section 101(a) of the District of Columbia
Financial Responsibility and Management Assistance Act of
1995;
``(2) the term `control year' has the meaning given such
term under section 305(4) of such Act; and
``(3) the term `District government' has the meaning given
such term under section 305(5) of such Act.''.
(b) Prohibiting Delegation of Chief Financial Officer's
Authority.--Section 422(6) of the District of Columbia Self-
Government and Governmental Reorganization Act (sec. 1-
242(6), D.C. Code) is amended by adding at the end the
following: ``Nothing in the previous sentence may be
construed to permit the Mayor to delegate any functions
assigned to the Chief Financial Officer of the District of
Columbia under section 424, without regard to whether such
functions are assigned to the Chief Financial Officer under
such section during a control year (as defined in section
305(4) of the District of Columbia Financial Responsibility
and Management Assistance Act of 1995) or during any other
year.''.
(c) Conforming Amendment.--Effective upon the appointment
of the Chief Financial Officer of the District of Columbia
under section 424(b) of the District of Columbia Self-
Government and Governmental Reorganization Act (as added by
subsection (a)), D.C. Law 3-138 (sec. 47-314 et seq., D.C.
Code) is repealed.
(d) Clerical Amendment.--The table of contents of part B of
title IV of the District of Columbia Self-Government and
Governmental Reorganization Act is amended by adding at the
end the following new item:

``Sec. 424. Chief Financial Officer of the District of Columbia.''.
SEC. 303. REVISIONS TO POWERS AND DUTIES OF INSPECTOR GENERAL
OF DISTRICT OF COLUMBIA.

(a) Appointment and Term of Service; Independence of
Budget.--Section 208(a) of the District of Columbia
Procurement Practices Act of 1985 (sec. 1-1182.8(a), D.C.
Code) is amended by striking paragraphs (1) and (2) and
inserting the following:
``(1)(A) There is created within the executive branch of
the government of the District of Columbia the Office of the
Inspector General. The Office shall be headed by an Inspector
General appointed pursuant to subparagraph (B), who shall
serve for a term of 6 years and shall be subject to removal
only for cause by the Mayor (with the approval of the
District of Columbia Financial Responsibility and Management
Assistance Authority in a control year) or (in the case of a
control year) by the Authority. The Inspector General may be
reappointed for additional terms.
``(B) During a control year, the Inspector General shall be
appointed by the Mayor as follows:
``(i) Prior to the appointment of the Inspector General,
the Authority may submit recommendations for the appointment
to the Mayor.
``(ii) In consultation with the Authority and the Council,
the Mayor shall nominate an individual for appointment and
notify the Council of the nomination.
``(iii) After the expiration of the 7-day period which
begins on the date the Mayor notifies the Council of the
nomination under clause (ii), the Mayor shall notify the
Authority of the nomination.
[[Page H4063]] ``(iv) The nomination shall be effective
subject to approval by a majority vote of the Authority.
``(C) During a year which is not a control year, the
Inspector General shall be appointed by the Mayor with the
advice and consent of the Council. Prior to appointment, the
Authority may submit recommendations for the appointment.
``(D) The Inspector General shall be appointed without
regard to party affiliation and solely on the basis of
integrity and demonstrated ability in accounting, auditing,
financial management analysis, public administration, or
investigations.
``(E) The Inspector General shall be paid at an annual rate
determined by the Mayor, except that such rate may not exceed
the rate of basic pay payable for level IV of the Executive
Schedule.
``(2) The annual budget for the Office shall be adopted as
follows:
``(A) The Inspector General shall prepare and submit to the
Mayor, for inclusion in the annual budget of the District of
Columbia under part D of title IV of the District of Columbia
Self-Government and Governmental Reorganization Act for the
year, annual estimates of the expenditures and appropriations
necessary for the operation of the Office for the year. All
such estimates shall be forwarded by the Mayor to the Council
of the District of Columbia for its action pursuant to
sections 446 and 603(c) of such Act, without revision but
subject to recommendations. Notwithstanding any other
provision of such Act, the Council may comment or make
recommendations concerning such estimates, but shall have no
authority to revise such estimates.
``(B) Upon receipt of the annual Federal payment for the
District of Columbia authorized under title V of the District
of Columbia Self-Government and Governmental Reorganization
Act, the Mayor shall deposit a portion of the payment (equal
to the estimate of necessary appropriations described in
subparagraph (A)) into a dedicated fund within the government
of the District of Columbia.
``(C) Amounts deposited in the dedicated fund described in
subparagraph (B) shall be available solely for the operation
of the Office, and shall be paid to the Inspector General by
the Mayor (acting through the Chief Financial Officer of the
District of Columbia) in such installments and at such times
as the Inspector General requires.''.
(b) Additional Powers and Duties.--
(1) In general.--Section 208(a)(3) of the District of
Columbia Procurement Practices Act of 1985 (sec. 1-
1182.8(a)(3), D.C. Code) is amended--
(A) by striking ``and'' at the end of subparagraph (E);
(B) by striking the period at the end of subparagraph (F)
and inserting a semicolon; and
(C) by adding at the end the following new subparagraphs:
``(G) Pursuant to a contract described in paragraph (4),
provide certifications under section 602(b)(5) of title VI of
the District of Columbia Revenue Act of 1939;
``(H) Pursuant to a contract described in paragraph (4),
audit the complete financial statement and report on the
activities of the District government for such fiscal year,
for the use of the Mayor under section 448(a)(4) of the
District of Columbia Self-Government and Governmental
Reorganization Act; and
``(I) Not later than 30 days before the beginning of each
fiscal year (beginning with fiscal year 1996) and in
consultation with the Mayor, the Council, and the Authority,
establish an annual plan for audits to be conducted under
this paragraph during the fiscal year under which the
Inspector General shall report only those variances which are
in an amount equal to or greater than $1,000,000 or 1 percent
of the applicable annual budget for the program in which the
variance is found (whichever is lesser).''.
(2) Limitation on contract with outside auditor.--Section
208(a) of such Act (sec. 1-1182.8(a), D.C. Code) is amended
by adding at the end the following new paragraph:
``(4) The Inspector General shall enter into a contract
with an auditor who is not an officer or employee of the
Office to--
``(A) audit the financial statement and report described in
paragraph (3)(H) for a fiscal year, except that the financial
statement and report may not be audited by the same auditor
(or an auditor employed by or affiliated with the same
auditor) for more than 3 consecutive fiscal years; and
``(B) audit the certification described in paragraph
(3)(G).''.
(3) Subpoena power.--Section 208(c) of such Act (sec. 1-
1182.8(c), D.C. Code) is amended--
(A) by striking ``(c)'' and inserting ``(c)(1)''; and
(B) by adding at the end the following new paragraph:
``(2)(A) The Inspector General may issue subpoenas
requiring the attendance and testimony of witnesses and the
production of any evidence relating to any matter under
investigation by the Inspector General.
``(B) If a person refuses to obey a subpoena issued under
subparagraph (A), the Inspector General may apply to the
Superior Court of the District of Columbia for an order
requiring that person to appear before the Inspector General
to give testimony, produce evidence, or both, relating to the
matter under investigation. Any failure to obey the order of
the court may be punished by the Superior Court as civil
contempt.''.
(4) Referral of findings of criminal activity to attorney
general.--Section 208 of such Act (sec. 1-1182.8, D.C. Code)
is amended by adding at the end the following new subsection:
``(f) In carrying out the duties and responsibilities
established under this section, the Inspector General shall
report expeditiously to the Attorney General whenever the
Inspector General has reasonable grounds to believe there has
been a violation of Federal or District criminal law.''.
(c) Revision of Current Powers and Duties.--
(1) Liaison representative for all external audits of
district government.--Section 208(a)(3)(B) of such Act (sec.
1-1182.8(a)(3)(B), D.C. Code) is amended by striking
``executive branch''.
(2) Application of generally accepted accounting
principles.--Section 208(b) of such Act (sec. 1-1182.8(b),
D.C. Code) is amended by inserting ``accounting and'' after
``accepted''.
(3) Access to all necessary records.--Section 208(c)(1) of
such Act (sec. 1-1182.8(c), D.C. Code), as amended by
subsection (b)(3), is amended by striking ``relating to
contracts and procurement''.
(4) Submission of reports to authority during control
year.--Section 208(d) of such Act (sec. 1-1182.8(d), D.C.
Code) is amended--
(A) in paragraph (1), by striking ``the Mayor and the
Council'' and inserting ``the Authority (or, with respect to
a fiscal year which is not a control year, the Mayor and the
Council)''; and
(B) in paragraph (2), by striking ``the Mayor'' and
inserting ``the Authority, the Mayor,''.
(5) Making reports publicly available.--Section 208(d) of
such Act (sec. 1-1182.8(d), D.C. Code) is amended by adding
at the end the following new paragraph:
``(4) The Inspector General shall make each report
submitted under this subsection available to the public,
except to the extent that the report contains information
determined by the Inspector General to be privileged.''.
(6) Responding to requests of authority.--Section 208(e) of
such Act (sec. 1-1182.8(e), D.C. Code) is amended by striking
``the Director'' and inserting ``the Authority''.
(d) Definitions.--Section 208 of such Act (sec. 1-1182.8,
D.C. Code), as amended by subsection (b)(4), is amended by
adding at the end the following new subsection:
``(g) In this section--
``(1) the term `Authority' means the District of Columbia
Financial Responsibility and Management Assistance Authority
established under section 101(a) of the District of Columbia
Financial Responsibility and Management Assistance Act of
1995;
``(2) the term `control year' has the meaning given such
term under section 305(4) of such Act; and
``(3) the term `District government' has the meaning given
such term under section 305(5) of such Act.''.
(e) Deadline for Appointment.--
(1) In general.--Not later than 30 days after its members
are appointed, the Authority shall appoint the Inspector
General of the District of Columbia pursuant to section
208(a)(1) of the District of Columbia Procurement Practices
Act of 1985 (as amended by subsection (a)).
(2) Transition rule.--The term of service of the individual
serving as the Inspector General under section 208(a) of the
District of Columbia Procurement Practices Act of 1985 prior
to the appointment of the Inspector General by the Authority
under section 208(a)(1) of such Act (as amended by subsection
(a)) shall expire upon the appointment of the Inspector
General by the Authority.

SEC. 304. COUNCIL APPROVAL OF CERTAIN CONTRACTS.

(a) In General.--Section 451 of the District of Columbia
Self-Government and Governmental Reorganization Act (sec. 1-
1130, D.C. Code) is amended--
(1) by amending the heading to read as follows: ``special
rules regarding certain contracts'';
(2) by striking ``No contract'' and inserting ``(a)
Contracts Extending Beyond One Year.--No contract''; and
(3) by adding at the end the following new subsection:
``(b) Contracts Exceeding Certain Amount.--
``(1) In general.--No contract involving expenditures in
excess of $1,000,000 during a 12-month period may be made
unless the Mayor submits the contract to the Council for its
approval and the Council approves the contract (in accordance
with criteria established by act of the Council).
``(2) Deemed approval.--For purposes of paragraph (1), the
Council shall be deemed to approve a contract if--
``(A) during the 10-day period beginning on the date the
Mayor submits the contract to the Council, no member of the
Council introduces a resolution approving or disapproving the
contract; or
``(B) during the 45-calendar day period beginning on the
date the Mayor submits the contract to the Council, the
Council does not disapprove the contract.''.
(b) Clerical Amendment.--The table of contents of the
District of Columbia Self-Government and Governmental
Reorganization Act is amended by amending the item relating
to section 451 to read as follows:

``Sec. 451. Special rules regarding certain contracts.''.

[[Page H4064]]

(c) Effective Date.--The amendments made by this section
shall apply to contracts made on or after the date of the
enactment of this Act.

SEC. 305. DEFINITIONS.

In this Act, the following definitions apply:
(1) The term ``Authority'' means the District of Columbia
Financial Responsibility and Management Assistance Authority
established under section 101(a).
(2) The term ``Council'' means the Council of the District
of Columbia.
(3) The term ``control period'' has the meaning given such
term in section 209.
(4) The term ``control year'' means any fiscal year for
which a financial plan and budget approved by the Authority
under section 202(b) is in effect, and includes fiscal year
1996.
(5) The term ``District government'' means the government
of the District of Columbia, including any department, agency
or instrumentality of the government of the District of
Columbia; any independent agency of the District of Columbia
established under part F of title IV of the District of
Columbia Self-Government and Governmental Reorganization Act
or any other agency, board, or commission established by the
Mayor or the Council; the courts of the District of Columbia;
the Council of the District of Columbia; and any other
agency, public authority, or public benefit corporation which
has the authority to receive monies directly or indirectly
from the District of Columbia (other than monies received
from the sale of goods, the provision of services, or the
loaning of funds to the District of Columbia), except that
such term does not include the Authority.
(6) The term ``financial plan and budget'' means a
financial plan and budget described in subtitle A of title
II, and includes the budgets of the District government for
the fiscal years which are subject to the financial plan and
budget (as described in section 201(b)).
(7) The term ``Mayor'' means the Mayor of the District of
Columbia.

The SPEAKER pro tempore (Mr. Barrett of Nebraska). Pursuant to the
rule, the gentleman from Pennsylvania [Mr. Clinger] will be recognized
for 20 minutes, and the gentlewoman from Illinois [Mrs. Collins] will
be recognized for 20 minutes.
The Chair recognizes the gentleman from Pennsylvania [Mr. Clinger].
Mr. CLINGER. Mr. Speaker, I yield myself such time as I may consume.
(Mr. CLINGER asked and was given permission to revise and extend his
remarks.)
Mr. CLINGER. Mr. Speaker, as I stated the day the Government Reform
and Oversight Committee favorably reported this bill, I believe the
district of Columbia will today move one step closer to self-
sufficiency, to financial independence, perhaps even to true home rule.
The District government is bankrupt. In about 1 month, the city
government will not have the money to pay the bills that await. The
legislation we are about to pass is designed to reverse that crisis and
put the residents of the District and their government back on sound
financial track.
While I want the D.C. Subcommittee Chairman, Tom Davis, to summarize
this legislation, I want to remind my colleagues that while other
solutions to the District's problems were available, none of them
provide the appropriate answers at this time.
Some have called for a cash bailout--a solution that is simply
unacceptable to this Member of Congress and I suspect a majority of my
colleagues. It is quite obvious that without meaningful government
reform and strong fiscal discipline, there is absolutely no evidence
that a large infusion of cash would permanently relieve the underlying
causes of the District's current budget crisis.
At the other end of the spectrum, some have called for the District
to be placed into receivership--in effect, the total elimination of
home rule. While that step is not an option today, nobody should doubt
the resolve of this body to take any steps necessary if District
government officials do not cooperate with the financial control board
established by this legislation. We anticipate that this cooperation
will be forthcoming and that home rule will prevail.
Make no mistake, however, pain and suffering is inevitable for the
District to bring back its financial health. The day of reckoning has
arrived.
Some have questioned the need for a control board in the first place
and the appropriateness of Congress, which seems incapable of balancing
our own budget, forcing the District to balance its budget in the
second. To that I say I agree that we in Congress need an outside
discipline to force us to act responsibly just as much or more than the
District does.
Just as I believe a balanced budget amendment would have made it
easier for Congress to say no to otherwise meritorious proposals, I
also believe the existence of the control board and its threat of a
hammer will make it easier for the mayor and the council to make the
kind of tough decisions that are going to be necessary. It is my
fervent hope that those decisions will in fact be made by the major and
council and that it will not be necessary for the control board to be
relevant.
Last, I want to express my personal appreciation to the Members and
staff responsible for bringing this bill to the floor. Tom Davis and
Eleanor Holmes Norton have worked as an effective team to help solve
the District's problems and bring economic vigor and vitality to the
entire Washington region. I also thank those staff who worked
tirelessly in drafting this bill and the committee report.
I encourage each Member of the House to support this fine
legislation.
Mr. Speaker, I reserve the balance of my time.
Mrs. COLLINS of Illinois. Mr. Speaker, I yield myself such time as I
may consume.
(Mrs. COLLINS of Illinois asked and was given permission to revise
and extend her remarks.)
Mrs. COLLINS of Illinois. Mr. Speaker, I wish to congratulate and
commend the D.C. Subcommittee's ranking member, Eleanor Holmes Norton,
and the Subcommittee's Chair, Tom Davis, for the fine work that they
did on this legislation which is so sorely needed. They put in many
long arduous hours to produce this legislation. It took some tough
negotiations, but they delivered the bill in time to meet the critical
need for congressional action before the April recess. I would be
remiss if I did not commend Chairman Clinger for insisting that the
committee reach a bipartisan solution to the needs of the District.
That effort is evidenced by the 45-to-0 vote to report it to the House.
As we can all see, H.R. 1345 is a complex bill which attempts to
carefully balance the interests of the District and Federal
governments. The bill provides the District with desperately needed
relief from the extreme financial crisis confronting it and yet it does
so in a way that keeps the Congress out of the day-to-day internal
affairs of the District government, while assuring the continued
delivery of essential services to local residents, Federal agencies,
and the many millions of visitors who come to the Nation's Capital each
year.
I am pleased that this bill won the unanimous support of the Members
serving on our committee, and that it enjoys the broad bipartisan
support of so many others. This should ensure that it receives the
favorable consideration it deserves. However, I find little delight in
what we do here today, because the District's long-standing pursuit of
complete self-governance has been set back.
While I recognize that the current fiscal crisis makes the action we
take today inevitable, I am determined to ensure that this setback for
the District is a temporary one, and I plan to work closely with
Chairmen Clinger and Davis, and Delegate Norton, to take the steps
necessary to restore the District's financial health and quickly bring
an end to this new authority.
Back in November 1993, this body considered the New Columbia
Admission Act, a bill which I cosponsored and strongly supported. That
bill provided for D.C. statehood. I strongly believe that its enactment
still represents the best action Congress could take to help the
District of Columbia. Statehood would give District residents full
democratic rights, and give the District government the freedom to
manage its own financial affairs, without the restraints imposed by
Congress.
In my view, the financial problems of the District of Columbia are
grounded in more than declining revenues and management difficulties.
They are attributable, to a significant extent, to the extraordinary
burdens the Congress placed on the District when it was granted limited
Home Rule over 20 years ago, by giving the District the responsibility
for numerous functions normally performed by States such as: operating
a State court system and prison system; providing mental health, foster
care, and adoption services; and bearing the cost of Medicaid and AFDC
benefits; to name just a few. At the same time, the Home Rule Charter
did not confer State authority. The district's ability to pay for these
State
[[Page H4065]] functions was limited by a congressionally imposed ban
on taxing nonresident income earned within its borders as other states
and many other cities do.
The District leads the Nation in the percentage of income earned in
the city by nonresidents. Two of every three dollars earned here are
earned by a nonresident. If nonresidents were subject to a flat rate of
only 2 percent, the District could raise about $370 million per year.
In fact, more than 22,000 of the District government's own employees
enjoy life in the suburbs on an income drawn from the city treasury.
The District government estimates it could raise $50 million annually
by taxing their income. These Catch-22 circumstances are patently
unfair and have substantially contributed to the economic distress.
They have got to change, and I hope they will soon.
There is also the burden of the unfunded pension liability which must
be addressed. In 1979, Congress transferred $2 billion of liability for
a pension system it established for police, firefighters, and teachers
at a time when District employees were considered Federal employees.
Now, largely due to interest, the liability has grown to almost $5
billion. The District contributes about $300 million a year toward this
pension system's cost, while the Federal Government contributes only
$52 million. The Federal Government is not paying its fair share, while
each year the spiraling costs consume more and more of the District's
limited revenues.
I am pleased that Members on both sides of the aisle acknowledge that
the unfunded pension liability is a problem for which the Federal
Government bears some responsibility, and that the D.C. Subcommittee's
chair is committed to taking action on this matter during the 104th
Congress.
The District's financial stability is also encumbered by the fact
that only 43 percent of its real property can be taxed. The rest, 57
percent, is owned by the Federal Government, foreign governments, the
District government, or tax exempt entities. With respect to this
latter group, I note that the D.C. Council and even some Members are
now questioning the propriety of continuing such tax breaks, given the
current crisis.
Finally, it is absolutely essential that everyone recognize that the
financial crisis confronting the District of Columbia is not a unique
one. The hearings which the D.C. Subcommittee held on this matter
demonstrated that several other major American cities have reached the
brink of insolvency before. In most of those cases, financial control
or oversight boards were established by the State legislatures and the
boards worked cooperatively with city officials to successfully
stabilize each situation. I have no doubt that this will happen here.
The District of Columbia lies in the heart of a metropolitan area
that ranks first among the 15 largest metropolitan areas on several
desirable income, educational, and employment indices. It ranks at the
top in: per capita income; individuals completing more than 16 years of
school; and employment in professional, managerial, and technical jobs.
It has the lowest rate of unemployment. So clearly, the District is a
city rich with talent. The District is a city with resources. The
District is a city with a future. It will be back on its feet soon.
Mr. Speaker, I yield the remainder of my time to the gentlewoman from
the District of Columbia [Ms. Norton], who has worked so hard in this
instance, and I ask unanimous consent that she be allowed to yield that
time in such way as she sees fit.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Illinois?
There was no objection.
Mr. CLINGER. Mr. Speaker, I yield such time as he may consume to the
gentleman from Virginia [Mr. Bliley], the chairman of the Committee on
Commerce and a very active member who has been involved in the
District's affairs for many, many years.
(Mr. BLILEY asked and was given permission to revise and extend his
remarks.)
Mr. BLILEY. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, I rise today in strong support of the District of
Columbia Financial Responsibility and Management Assistance Act of
1995.
The District of Columbia has testified under oath that it expects to
run out of money by early May.
Under present law the District is entitled to draw on the U.S.
Treasury to pay its bill. This bill places necessary fiscal conditions
on any borrowing in accordance with the findings and purposes as stated
in the act.
The authority in this bill is the strongest ever created for any U.S.
city. It will finally place necessary controls on District spending.
The authority will require an accurate, annual balanced budget and a 4-
year financial plan. It will have enforcement power.
In the past I worked closely with Delegate Norton to ensure the
financial stability of the District of Columbia. We worked to increase
the Federal payment, and we worked to ensure the District would be able
to manage itself. Sadly, this has not occurred.
This legislation does not abolish home rule, rather during the
control period certain fiscal functions of the District will be
supplanted by the Board. By stabilizing the District's finances, the
city will emerge in a stronger position that it is today.
Without this bill city workers, residents, businesses, and visitors
will continue to live under a cloud of fiscal uncertainty which is
present and growing.
The dollar-for-dollar reductions for overspending in last year's
budget resolution must be lifted now so that the Treasury will be able
to lend through the Authority. The annual Federal payment will serve as
the collateral.
The Financial Control Authority created in this bill will control
District finance until the city balances four budgets in a row and has
repaid any money borrowed with the Authority's cooperation.
The Authority will have five members, appointed by the President
after congressional consultation. These members will serve without
salaries for 3 years, and they must be District residents.
As soon as this bill is enacted, they must submit a 5-year financial
recovery plan to the Authority as soon as practicable.
The Authority will have to review this plan, adopt it or submit
modifications to the city council. If the city council proposes
modifications which meet with the disapproval of the Authority, it may
then submit its own proposal to Congress for consideration.
This plan ensures that all affected parties, the people, the council,
the Mayor, the Authority, and the Congress will have their voices heard
to ensure our Nation's Capital gets on sounder financial footing.
I commend Representative Davis and Delegate Norton for reaching
consensus on this very important initiative, and urge its adoption by
the House.
Mr. CLINGER. Mr. Speaker, I yield the balance of my time to the
gentleman from Virginia [Mr. Davis], the prime author of this
legislation, and I ask unanimous consent that he may be permitted to
control the balance of the time remaining on the majority side.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Pennsylvania?
There was no objection.
Mr. DAVIS. Mr. Speaker, I yield myself such time as I may require.
(Mr. DAVIS asked and was given permission to revise and extend his
remarks.)
Mr. DAVIS. Mr. Speaker, this emergency legislation is the cornerstone
of our Nation's response to the tragic and completely unacceptable
financial condition of our Nation's Capital. Life in Washington, DC, is
coming apart at the seams. This legislation will halt the decay of the
city government's ability to provide basic municipal services to the
residents of the District and begin the difficult but necessary process
of making the common life of the city whole once again. It is critical
not only for this region and for those who live here, but for those who
visit here as well.
As chairman of the Subcommittee on the District of Columbia of the
Government Reform and Oversight Committee, I rise as the principal
sponsor of the District of Columbia Financial Responsibility and
Management Assistance Act of 1995. It would not have been possible for
this piece of emergency legislation to be here before the House so
early in the session without the active cooperation and hard work of
many Members and their staffs.
Mr. Speaker, I want to thank on the staff side the GAO staff. I would
like to thank John Simmons of Congressman
[[Page H4066]] Walsh's staff, Migo McConey from the Appropriations
staff, Cheryl Smith, also of the Appropriations staff, and Brian
Seward, as well as Donna Brazile and Cedric Hendricks from the District
of Columbia Subcommittee staff, Ron Hamm, our director, Ellen Brown,
Howie Dennis, Roland Gunn, who put in numerous hours on this effort, Al
Felzenberg, and Ann Mack, Tim Leeth and Kevin Sabo from the Senate
staff, and Jim Clarke from the full committee staff.
I also want to express my deep gratitude to the House leadership and
to Chairman Clinger, as well as the gentlewoman from Illinois, Mrs.
Cardiss Collins, for their willingness to provide the necessary advice
and assistance to move this bill forward.
I also want to thank our colleague from the District of Columbia, the
gentlewoman from the District of Columbia [Ms. Norton], who is a true
leader and without whose efforts and advice this bill would not be here
today. She has shown her leadership once again on this bill, and I look
forward to working with her in the future on many other issues
concerning the District. And I would say to Congressman Walsh and
the gentleman from California, Mr. Dixon, of the District of Columbia
Appropriations Subcommittee that their efforts in this regard and their
ability to work together as a team have brought this legislation here
today, and I thank them for their efforts.

Without their constant personal attention throughout a seemingly
endless series of negotiations, we would not be nearly so far along in
our response to the problems of the District. I also want to thank the
members of the subcommittee, especially my vice-chair, Mr. Gutknecht,
for their willingness to hold hearings on short notice and to move this
legislation on an exceptionally fast tract. But, above all, I am
grateful for the willingness of all of the Members involved in this
process to reach across party and ideological lines for the good of the
entire Nation. This effort has been extraordinary and inspirational.
Finally, none of this would have been possible without the long, hard
hours of work by the personal and committee staff who have devoted
themselves to working out the details of this complex bill. They are
all deeply aware of the urgency of the crisis facing the District of
Columbia.
The current crisis stems from the unwillingness of the political
leadership of the city and of past Congresses to make the hard but
necessary decisions to keep the District's spending in line with its
income. The result of this policy is not surprising: the District of
Columbia is insolvent. If the city were to begin to write the checks
necessary to pay all its current bills, it would run out of cash long
before it came to the bottom of its stack of bills. The dire condition
of the city's finances spills over to and harms the entire region.
Currently, the city is not able to make its payments to regional
authorities like Metro and Council of Governments. Without the city
paying its full share, these vital regional organizations will not be
able to carry out their important missions. One of the things this bill
seeks to accomplish is the orderly payment of these obligations. Piled
up, unpaid bills force many small businesses all across the region to
lay off workers, or in some cases, to fail. Thus the whole region
suffers as long as the city is broke. The time to act is now.
The city's insolvency is not the result of an unanticipated natural
disaster. It is not the result of an inadequate revenue stream. In
fact, for a city its size, it has more than adequate revenue to fund
the full range of services needed by its citizens. But, beginning with
the collapse of real estate values in 1989 and continuing even as I
speak, the city simply spends
more money than it collects. The District of Columbia's government
continues to try to fund everything it wants while neglecting to
adequately fund what it truly needs as a municipal government. Much of
the money it spends, it does not spend wisely. According to a recent
study by Thomas Edmonds and Raymond Keating, during the 1991-92 school
year the District spent more per pupil on primary and secondary
education than any State in our Nation. Yet, we read in the local press
that there are over 8,000 fire code violations in the schools in need
of repair. This is but one of many instances of local political
decisions that have unintended but completely unacceptable consequences
for the city's least powerful and most vulnerable residents.

It would be all too easy for me to place all the blame for the
unraveling of the city on poor decisions made by Washington's local
political leaders. But, this would be neither an accurate nor a
responsible course for me to take. Our Constitution clearly gives
Congress the responsibility ``to exercise exclusive Legislation in all
Cases whatsover,'' in the seat of the national government. Congress has
not always used this power wisely. There has been an understandable
reluctance to interfere with local political decisions. This
reluctance, has perhaps, at times slipped over into failure to provide
proper oversight. There has been a spirit of generosity that gave the
District government access to $1.277 billion more cash during the Kelly
administration than previously scheduled payments dictated. This
generosity became indulgence. The result of inadequate congressional
oversight is not acceptable. We see before us today a broken city. We
cannot continue these policies. We must carry out our oversight
responsibilities in a more responsible and effective way. The bill
before us this afternoon provides us with the appropriate vehicle to
meet our responsibility.
H.R. 1345 is designed to provide the strong medicine necessary to
heal our beloved but battered Capital City. It establishes the
strongest financial oversight authority in our Nation's history. We
have looked with great care at what other cities facing similar crises
have done to solve their problems. We have studied what has worked well
and what has failed. We think we have applied these lessons to the
unique and special facts of Washington, DC. We have carefully crafted
our nation's response to this crisis. The most important thing we have
learned is that no city has been able to solve its problems alone. In
the case of other cities, State governments have stepped in to provide
assistance. In this respect, Washington, DC, is unique. It has no State
to turn to for assistance. The entire American people, acting as a
collective body through their elected Representatives in Congress,
constitute Washington, DC's state.
I am not going to present a complete outline of this 145-page
legislation. I want to focus on its essential features. The central
feature of this legislation is the establishment of the District of
Columbia Financial Responsibility and Management Assistance Authority
to assist our Nation's Capital on its way back to financial soundness.
The purpose of the Authority is to help the city knit itself back
together. It is designed to work with Congress and the local government
without being a component part of either government. I expect it will
make many recommendations both to Congress and the city about necessary
changes in the management of the city and the role of the Federal
Government in the city's life. The Authority is composed of five
Presidential appointees who are stake-holders in the city. The
President will make these selections after consultation with the
relevant committee chairs and the Delegate from the District. The
Authority will be assisted by a small professional staff.
The Authority has all the power to accomplish its mission of
financial responsibility and management assistance. In dealing with the
local government, the initiative generally belongs to local elected
leaders. For example, the Mayor still submits his budget the city
council. But, it is submitted to the Authority as well. The Authority,
as well as the city council, examine the budget critically. If the
Authority decides the proposed budget is neither balanced or in not
accordance with the city's long-term plan, the Authority cannot approve
the budget. It is returned with the Authority's recommendations to the
council. After this process works itself out, Congress receives either
an Authority-approved budget or the final council-approved budget along
with the Authority's comments. Congress retains its responsibility to
give final approval to the city's budget.
In addition to the creation of the Authority, this legislation
creates a permanent, statutory
chief financial officer for the District of Columbia. The
[[Page H4067]] CFO is appointed by the Mayor, in consultation with the
city council, and the approval of the Authority. The CFO is responsible
for assembling accurate financial information to serve as the
foundation of the city's budgetary and spending decisions. The CFO also
must certify all bills and contracts, assess and collect all taxes, and
provide accurate accounting. This office reports to the Mayor, the
council, and the Authority.
The creation of the Authority and of a CFO provides only part of the
administrative framework necessary to assist the city back to financial
health. The final structural change is the enhancement of the Office of
the Inspector General. The IG, like the CFO, is appointed by the Mayor
in consultation with the city council and the approval of the
Authority. We have taken special care to make sure the IG has the
political independence and financial resources to act as a strong
watchdog over the city government. In addition to a fixed 6-year term,
the budget of the IG can only be changed by Congress. In order to
assure the timely dissemination of information, the IG's reports become
public documents in a timely manner. The IG reports not only to the
Mayor, but also to the council and the Authority. The IG is also
responsible for letting the contract for an annual, independent audit
of the city's finances.
The Authority, the CFO, and the enhanced IG form the nucleus of a
more efficient, responsible, and responsive city government. It
provides the city with an ideal opportunity to examine critically the
range and level of services it seeks to provide. The locally elected
leaders of the city need to decide what they can realistically afford
to fund. I hope the enactment of this legislation provides the occasion
for a dramatic restructuring of the local government. After the
District has begun to make the hard choices necessary to bring their
spending in line with their revenue, the question of the proper
relationship between the city and the Federal Government will be
addressed.
This legislation is not punitive. It is the strong medicine needed to
bring the city back to financial health. One of the effects of this
legislation will be the restoration of the city's access to the credit
markets. This is important for the enhancement of home rule. I hope
that the Authority and the city working together with the Congress
will, sooner rather than later, be holding groundbreaking ceremonies
for the new arena and convention center. These projects will enhance
the quality of life not only in the District but throughout the entire
region.
We stand at a critical moment in the life of our Nation's Capital. We
can no longer afford the price of congressional inaction. The District
will soon run out of cash. Under present law, the Mayor can requisition
cash from the Federal Treasury. If we fail to act, Mayor Barry will be
forced to take the District's bills to the Treasury Department without
conditions or restrictions. We must not allow this to happen. If we
enact this legislation, when the city runs out of cash, Congress will
have put the proper structure in place to regulate and facilitate its
access to the Treasury window. There are no viable alternatives. We are
in effect pulling the District's credit card to the U.S. Treasury and
setting conditions for borrowing that can lead to economic recovery.
The present crisis is a direct consequence of destructive fiscal
policies. This bill represents fundamental change. I urge you to vote
in favor of H.R. 1345.
Mr. Speaker, I reserve the balance of my time.
{time} 1515

Ms. NORTON. Mr. Speaker, I yield myself such time as I may consume.
(Ms. NORTON asked and was given permission to revise and extend her
remarks.)
Ms. NORTON. Mr. Speaker, thanks to Chairman Bill Clinger, ranking
Member Cardiss Collins, and subcommittee Chairman Tom Davis, we are
seeing a rare moment in any Congress, and certainly in this one. A very
difficult bill has been crafted and then unanimously embraced in
subcommittee and committee because of their leadership. Yet, H.R. 1345
has no precedent in this House. It has substantial precedent in this
country, of course. New York City, Philadelphia, and Cleveland, among
other jurisdictions, became insolvent and have had similar authorities
or boards established to guide them back to fiscal health. To those
inclined to harshly judge the District, the self-same ordeals of these
great American cities should give some pause. And, unlike those cities,
the District has had to fund not only municipal but also State and
county functions as well, among them today's daunting costs of Medicaid
and prisons. Before long, the Congress will have to face the reality
that no American city today can fund these State and county missions
alone and that the District will need more funds from the Congress.
Such huge cost, as well as the congressionally imposed unfunded pension
liability, in today's atmosphere of urban distress, have simply
overwhelmed the city.
Chairman Clinger and ranking Member Collins were executive producers
of this effort, setting the tone, steering the course, insisting upon
flexibility, yet drawing the bright lines to achieve an effective bill.
Subcommittee Chairman Tom Davis was the producer. He worked closely
with D.C. Appropriations Subcommittee Chairman Jim Walsh, whose strong
and skillful leadership is also reflected throughout the bill.
Chairman Davis has given the world ``freshman'' new respect for the
extraordinary reach of his vision for the bill and the determined skill
with which he carried his vision to fruition. Setting for himself the
expansive goal of a consensus bill, Chairman Davis first wrote H.R.
1345 simultaneously with majority Members in the House and the Senate.
Onto this bicameralism, he superimposed bipartisanship, inviting
ranking Members to suggest and negotiate changes. Representative Julian
Dixon, the ranking member of the D.C. Appropriations Subcommittee, was
an indispensable party to this bill, bringing unmatched depth,
intelligence, and objectivity. Some of our changes were rejected and
others compromised, but many were accepted.
The process that Chairman Davis developed is what has enabled me to
cosponsor H.R. 1345 and to urge my colleagues to vote today for
passage. Like all bills that come to the floor, it is the majority's
bill, but it has accommodated many changes and compromises not only
from me but from the Mayor and the chairman and members of the city
council of my city. Thus, this bill is quite literally a collaboration
among all directly concerned: The chairs and ranking members of the
authorizing and appropriations committees and subcommittees of the
House and Senate and the elected representatives of the District of
Columbia.
Section upon section of the bill vindicate both the process and the
substance of H.R. 1345. Many of the changes are modifications and
nuances that only locally elected officials and others who live with
the District's problems could recognize. By accepting changes that
reflect the experience of governing and living in the District,
Chairman Davis and his colleagues have gone a long way toward assuring
that H.R. 1345 is able to do its job.
Two urgent reasons make this bill not only mandatory but also the
only viable option available: First, without the authority established
in this bill, the District, already technically insolvent, will run out
of cash sufficient to pay its employees and keep services in operation
within the next few weeks; second, without the authority established in
this bill, the District will bear a destructive penalty for being in
violation of existing law that requires a balanced budget, a mandate
that cannot possibly be met without spreading the city's huge
structural deficit over several years.
However, I am able to cosponsor H.R. 1345, not only because of its
urgent necessity. I am a cosponsor of this bill because it does not
violate the other essential and overriding principle--the right of
District residents to maintain every bit of what limited home rule
powers we have managed to achieve. Our democratic right to self-
government is more precious to us than to other Americans quite simply
because they, all of them, including the four territories, have it, and
we don't. For this reason, I have measured self-government by the
strictest standard I could locate: whether the provisions of H.R. 1345
are any more
intrusive than those of the other similarly situated
[[Page H4068]] jurisdictions. This is the best standard because no one
has suggested that with the establishment of similar authorities, New
York, Philadelphia, or Cleveland lost their dignity or independence.
Anyone who takes the time and trouble to compare H.R. 1345 with prior
State statutes, especially New York's law, as I did throughout the
negotiations, will find the self-government standard fully met.
The Mayor and the city council retain their respective powers. The
initiative in all matters committed to them under the home rule charter
remains theirs alone. This is important not only to preserve democracy.
It is important because the point of this effort is to encourage
elected leaders to take responsibility so that when the authority
recedes, their necessary discipline is fully built into the way they
conduct the city's business. Thus, the authority is a monitor whose
purpose is to check and enforce new rules of fiscal and operational
discipline that the Mayor and the council place upon themselves in
multiyear plans and annual budgets that these elected officials
themselves will write.
I have no doubt that the District will take the initiative to solve
its own problems, just as our elected officials have helped make H.R.
1345 a better bill. This morning before this matter had even come to
the floor, at the invitation of the Mayor, I went to his cabinet
meeting to discuss H.R. 1345 and what it means for District officials.
Further, today the Mayor has announced a nationwide search for a chief
financial officer, who will be a central figure in the District's
financial recovery.
I take special pride in these early initiatives by the Mayor to make
H.R. 1345 work and in the recent rough and tough actions of the city
council, who even without the monitoring authority, have made
courageous cuts and taken their lumps for their trouble.
I take particular comfort from Members of the House, who have
uniformly expressed respect and admiration for what authorities like
that established in H.R. 1345 have done, working with local officials,
in their own cities. Expect no less from the District.
Notwithstanding this crisis, the District remains one of the most
promising large cities in the United States. Among the 25 largest
cities, we proudly rank first per capita in residents in the Nation's
top job categories, third per capita in residents with college and
post-college degrees, and fifth per capita in income. In the midst of
this crisis, our business community is using its own private resources
to build an arena and a convention center which will bring many
millions in revenue to the District. This is the raw material for a
dazzling comeback.
Just beyond the horizon, the Capital of the United States is a city
with a future. But, it is more than that. It is such livable city that
more Members of the House and Senate have chosen to live here than in
any part of the region. It is city of world class beauty. The
District's problems must not be allowed to obscure its potential. With
help from the Congress, but under its own initiative and by its own
hand, this shall soon be a city on the rise like the sun on a clear
morning.

{time} 1530

Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS. Mr. Speaker, may I inquire of the Chair how much time
remains on both sides?
The SPEAKER pro tempore (Mr. Hastings of Washington). The gentleman
from Virginia [Mr. Davis] has 3 minutes remaining, and the gentlewoman
from the District of Columbia [Ms. Norton] has 7 minutes remaining.
Mr. DAVIS. Mr. Speaker, I ask unanimous consent that both sides be
given an additional 5 minutes.
Ms. NORTON. Mr. Speaker, I join in the request of the gentleman.
The SPEAKER pro tempore. Without objection, each side will have an
additional 5 minutes.
There was no objection.
Mr. DAVIS. Mr. Speaker, I yield 4 minutes and 30 seconds to the
gentleman from New York [Mr. Walsh], the chairman of the Appropriations
Subcommittee, who has done so much to help bring this bill to its final
stages. We appreciate his efforts.
(Mr. WALSH asked and was given permission to revise and extend his
remarks.)
Mr. WALSH. Mr. Speaker, I thank the gentleman for yielding time to me
and I thank him for his hard work on a very vigorous project, one
sorely in need.
Mr. Speaker, I rise in strong support of H.R. 1345. I think this is a
good bill. It is the culmination of many hours and long days of
discussions and negotiations. It is a nonpartisan issue. Every one on
both sides of the aisle in this body as well as the other body and the
White House has worked diligently with one objective in mind, to do
what is best for our Nation's Capital.
This bill will establish a financial responsibility and management
assistance authority, a control board, consisting of five members to be
appointed by the President in consultation with the Congress within 25
days of its enactment.
Results of our hearings indicate that the District's financial
management and information systems are inadequate to provide the data
that is essential for the efficient operation of the District
government. H.R. 1345 establishes a chief financial officer of the
District of Columbia who will be appointed by the Mayor and subject to
the approval by a majority of the vote of the authority and removed
only with authority approval.
The CFO will be responsible for all financial activities of the
District government, from revenue estimates and cash receipts to
expenditures and cash disbursements. So this is going to be a very
important position, in my judgment, the most important position.
Because the position is so important, this person must have as much
independence to carry out the mission of getting local government back
on track financially.
Another position that is key to the success of the authority is an
inspector general who also must be truly independent to pursue
investigations that will lead to the prevention and detection of fraud
and abuse.
We in the Congress must continue our vigilance to ensure the
independence of both of these offices.
Mr. Speaker, I want to touch on what I consider to be the crucial
issue of the authority. In the event that there is a stalemate, an
impasse between the authority and city government, the bill allows the
authority to implement its own recommendations, whether they be
executive or legislative in nature. This power is absolute and it is
absolutely necessary if the authority is to be effective and have the
desired impact on the efficient operation of District government.
This authority needs to have control. It is our intention that it
have control. In my opinion, the bill before you is drafted so that the
authority will have control, the control it needs to get the District
government back on a sound financial footing.
We felt very strongly this had to be a tough bill, tough love for our
Nation's Capital. This bill meets that standard.
Lastly, Mr. Speaker, the gentleman from Virginia [Mr. Davis] talked
about the ability of the District to go to the Treasury to borrow. That
authority continues under this new regime. And that is important
because the individual, the organizations that have loaned money to the
District, their interests need to be protected, along with the
interests of the District. That will continue under this law and, in
fact, ensure that if the District does go back to Treasury and borrow,
that the money will go directly to the control board and will be
disbursed under their authority.
Finally, I believe, Mr. Speaker, that sufficient safeguards are in
place to protect the Federal taxpayer, all Americans who send their tax
dollars to support the city.
This is not a partisan bill. The people who really put this together,
the gentleman from Virginia [Mr. Davis], the gentlewoman from the
District of Columbia [Ms. Norton], did a marvelous job, a truly
marvelous job negotiating this. The gentleman from California [Mr.
Dixon], former chairman in the seat that I now sit in, lent his
toughness and his wisdom to this product. I thank him and I also thank
from my staff John Simmons and Migo Miconi who worked so hard to
support my activities.
Ms. NORTON. Mr. Speaker, I yield 4 minutes to the gentleman from
California [Mr. Dixon], the ranking minority
[[Page H4069]] member of the Subcommittee on the District of Columbia
of the Committee on Appropriations and an unusually wise and
knowledgeable and essential partner in the negotiations that led to
H.R. 1345.
(Mr. DIXON asked and was given permission to revise and extend his
remarks.)
Mr. DIXON. Mr. Speaker, I thank the gentlewoman for her kind remarks
and for yielding time to me.
Mr. Speaker, as the ranking minority member of the Committee on
Appropriations Subcommittee on the District of Columbia, I rise in
support of H.R. 1345, the District of Columbia Financial Responsibility
and Management Assistance Act of 1995. We consider this bill at a
critical moment in the short history of self-government for the
District of Columbia.
The District of Columbia is in a financial crisis that it cannot
solve on its own. Like other major cities across the country, the
District of Columbia is not alone in feeling the multiple pressures of
a dwindling tax base and increasing social service costs. The District,
however, carries the additional burden of being the only governmental
entity with responsibilities traditionally implemented by State and
county, as well as city, governments.
Over the past few months, we have received convincing and mounting
evidence that the District of Columbia is nearing a financial collapse.
The Mayor has reported to us that the District has a fiscal year 1995
budget gap of $631 million and a precarious cash position. Although the
Mayor has proposed to reduce this budget gap by $224 million through
reduced agency spending and other initiatives, these actions alone are
not sufficient to close a gap which amounts to nearly 20 percent of the
District's annual appropriated budget. The General Accounting Office
has reported to us that the District will run out of cash this summer
and that the city currently does not have enough cash to pay its bills.
In recent years, other cities, including Philadelphia, New York City,
and Yonkers, have confronted financial insolvency requiring emergency
assistance from their States. But, the District is unable to turn to a
State government to provide such extraordinary assistance; the District
can turn only to the Federal Treasury and to the Congress for help.
Mr. Speaker, in the process of considering the District's financial
crisis, we have tried hard to separate the rhetoric from reality. With
the excellent assistance of the General Accounting Office, we have
tried to separate fact from fiction. And, while we may disagree with
the Mayor about whether the District has too little revenue, too much
spending, or simply inefficient management of its resources, I believe
that there is no disagreement that the problem is real. The hard
reality is that a remedy must be provided before the District becomes
insolvent, and the bill before us provides the necessary cure.
H.R. 1345 is not a perfect bill, nor do I agree with all of its
provisions. But, I do agree with the bill's fundamental purposes:
First, to assist the District in getting immediate control over its
deficit spending and, second, to provide for the long-term fiscal
stability of the District by providing a comprehensive approach to the
fiscal, management, and structural problems in the District Government.
This bill provides a
speedy recovery to D.C. financial health while preserving home rule
for its citizens.

H.R. 1345 has many important provisions. It will enable the city to
borrow from the U.S. Treasury to meet its short-term, emergency cash
needs, but only with stringent controls that will impose a rigorous
fiscal discipline on the city that has not existed before.
The bill creates the strongest Financial Oversight Board ever created
for any U.S. city. A five-member authority, appointed by the President
with congressional consultation, will have extensive latitude in
monitoring and overseeing the District's financial affairs until such
time that it has balanced its budget for 4 consecutive years and repaid
any funds borrowed on its behalf. Most important, the authority will be
comprised of individuals who pay either personal income or business
taxes to the District and, thus, have a real stake in the District's
future.
During any control period, the authority will make recommendations to
the District to promote financial stability and improve the delivery of
city services, including reviewing the structural relationship between
the District government and the Federal Government. The authority must
approve a multi-year financial plan developed by the District aimed at
achieving a truly balanced budget by 1999. The authority may reject the
city's annual budget, disapprove contracts, and disapprove District
borrowing if not consistent with the financial plan and annual budget.
The bill enhances the powers of the District's chief financial
officer and inspector general to ensure the integrity and accuracy of
financial information presented by the District, and to improve the
quality of the city's financial management systems. Because of the
significant powers that will reside with these individuals, a difficult
issue to resolve in our negotiations was how these individuals should
be appointed. The consensus that emerged from our discussions was that
both officers would be nominated by the Mayor with the advice and
consent of the city council, but subject to confirmation by the
authority. Further, only the authority would be permitted to dismiss
these key officials.
Mr. Speaker, by granting the authority such broad powers, some may
argue that this bill strips away home rule. But, I would argue that the
bill carefully protects the prerogative of self-government and that
preservation of home rule rests squarely on the shoulder's of the
District's elected officials. Only if District officials do not make
responsible and fiscally sound decisions, will it be necessary for the
authority to step in to implement its own recommendations.
This bill is the product of intense negotiations conducted over the
past few weeks. Although these discussions have been difficult, all
parties involved have acted in good faith with a common goal of
restoring the District of Columbia to sound financial health.
I want to applaud the efforts of the manager of the bill, the
distinguished chairman of the Government Reform and Oversight
Subcommittee on the District of Columbia, the gentleman from Virginia,
Tom Davis, who worked tirelessly to bring together a consensus bill in
time for the House and Senate to act prior to the April recess.
I also want to pay tribute to the delegate from the District of
Columbia, Eleanor Holmes Norton, for her tenacious efforts to preserve
the principle of home rule for D.C. residents. She has fought
courageously to preserve the rights of locally elected officials to
determine the city's financial future, while she led the fight for an
agreement that recognizes the seriousness of the District's financial
crisis.
My good friend, the gentleman from New York, [Mr. Walsh], the
distinguished chairman of the Committee on Appropriations Subcommittee
on District of Columbia, also played a critical role in shaping this
legislation. I look forward to our continued mutual cooperation as we
move later in the year to consider the District's fiscal year 1996
budget. And to the staff, thank you for your excellent work.
With the enactment of this bill, we have a wonderful opportunity for
a unique partnership between the District and Federal Government to
reinvent and improve the delivery of services to the thousands of
District residents who pay hard earned tax dollars and to those local
residents who are not getting the quality education, housing, and
social services they need and deserve. The road to financial recovery
for the District will not be smooth. There may be setbacks and relapses
along the way. But, the surgery which the city must undergo--the hard
choices, tough decisions, and real actions that have to be taken--will
restore the well being of the District and its residents and,
ultimately, provide the foundation for a real and lasting recovery for
years to come.
Mr. Speaker, I urge adoption of the bill.
{time} 1545

Mr. DAVIS. Mr. Speaker, I yield 1 minute and 15 seconds to my
colleague, the gentleman from New York [Mr. Gilman].
(Mr. GILMAN asked and was given permission to revise and extend his
remarks.)
Mr. GILMAN. Mr. Speaker, I rise today in support of H.R. 1345, the
District of Columbia Financial Responsibility and Management Act of
1995. I commend the distinguished gentleman from Virginia [Mr. Davis],
District of Columbia Subcommittee chairman, and the ranking minority
member of the District of Columbia Subcommittee, Ms. Norton, for the
work which they and their staffs have accomplished under severe time
constraints. I also wish to commend the gentleman from Pennsylvania
[Mr. Clinger], who serves as the distinguished chairman of our
Committee on Government Reform and Oversight, for his efforts in
bringing this important measure to the floor
[[Page H4070]] at a time when the District of Columbia has been
teetering on the brink of bankruptcy. I am supporting this timely
measure because I believe that it will provide workable solutions to
the severe financial problems that have beset our Nation's Capital
City. The financial recovery and management responsibility authority
will provide fiscal oversight while preserving the essence of home
rule.
At this urgent time, Mr. Speaker, I wish to commend what has been an
exemplary bipartisan effort to attack an extremely pressing problem. I
encourage support of this bill which will help bring financial
stability and budgetary control to the District of Columbia.
Ms. NORTON. Mr. Speaker, I yield 2 minutes to the gentleman from
Maryland [Mr. Wynn], a Member from this region who has been helpful to
the District.
(Mr. WYNN asked and was given permission to revise and extend his
remarks.)
Mr. WYNN. Mr. Speaker, I thank the gentlewoman for yielding to me,
and for her kind remarks.
Mr. Speaker, I do rise as a Member of our region representing Prince
Georges and Montgomery Counties, the neighbors to the north and east of
the District of Columbia. Let me begin by extending commendations to
the chairman, the gentleman from Pennsylvania [Mr. Clinger], and to the
ranking member, the gentlewoman from Michigan [Miss Collins], and also
to the subcommittee chairman, the gentleman from Virginia [Mr. Davis],
a freshman who has done exemplary work on this project. I am certainly
appreciative, and all of my constituents are appreciative.
Finally, let me note the outstanding work of the gentlewoman from the
District of Columbia [Ms. Norton], who has done yeoman's work on this
bill in both being an advocate for the District of Columbia and a
strong negotiator here in Congress, in helping to bring this measure to
fruition.
Mr. Speaker, we in the suburbs do recognize the importance of the
District of Columbia to the Nation's vitality. That is why I am here to
support the District of Columbia Financial Responsibility and
Management Assistance Act. I hope my colleagues in this body also
recognize the importance of the District of Columbia as the seat of our
Nation's Capital and would also support this measure.
Looking at our current situation, Mr. Speaker, it is in fact a
crisis. There have been some mistakes on the part of the District of
Columbia, but the Congress also bears a significant part of the
responsibility for this situation. We have helped create this
structural deficit that includes congressionally imposed unfunded
pension liabilities, so it is good that both parties have come
together.
Again, the gentleman from Virginia [Mr. Davis] has been inclusive in
allowing the District of Columbia officials to participate and
accepting their suggestions as to how to make this proposal work. Mr.
Speaker, it retains the strong role of the District officials, the
Mayor, and the council. It also maintains limited home rule.
I believe the bill is a significant movement in the right direction
toward correcting the problems of the District of Columbia, and urge
its adoption.
Ms. NORTON. Mr. Speaker, I yield 3 minutes to the gentleman from
Maryland [Mr. Hoyer], my good and helpful friend, a member of the
Committee on Appropriations, and a leader of this region.
Mr. HOYER. Mr. Speaker, I thank the gentlewoman for yielding time to
me.
Mr. Speaker, I want to first of all say that I have served here for
some time, and without reference to anybody else in comparison, I do
not think anybody else in this body represents their area better than
she does. It is obviously a difficult area to represent in that
everybody is watching it, every day. As she says, so many people live
here. She does an extraordinary job in bringing the message of the
District of Columbia, its hopes and aspirations, to this body. I
commend her for her leadership on this bill.
Mr. Speaker, those of us in the Washington metropolitan area are also
proud of the fact that we act together in a bipartisan fashion. We are
very proud of the fact that Tom Davis has done such an extraordinary
job in his leadership in bringing all of the various points of view
together. As always, it is a pleasure to deal and work with my
chairman, the gentleman from California [Mr. Dixon], and the chairman,
the gentleman from New York [Mr. Walsh], on this matter.
Mr. Speaker, this legislation before us is a useful, important, and
necessary vehicle to move the District of Columbia in the direction of
getting its fiscal house in order. It contains tough provisions which
require the District to be responsible and accountable by requiring
accurate annual budgets and a 4-year financial plan. More, it cuts off
the District's direct entitlement to drawing funds from the Treasury
should it run out of money.
Consequently, without this control board the District will live under
a growing dark cloud of financial uncertainty. If the District lives
under such a dark cloud, the Maryland and Virginia suburbs, as well as
the rest of the country, will be adversely affected. A healthy Capital
City makes for a healthier Nation and is, as well, critical to a
healthy Washington metropolitan area.
In closing, as we do our part in protecting the viability and
stability of the Nation's Capital, it is my expectation, as the
gentlewoman from the District of Columbia has said, that we will
receive and are receiving full cooperation from the District of
Columbia.
Mr. Speaker, I urge my colleagues to support this act.
If I might, Mr. Speaker, just make one additional statement, I have
had discussions with the gentleman from Virginia [Mr. Davis], the
chairman of the subcommittee, with reference to an item regarding the
financing and the obligations of the District of Columbia with
reference to the Washington Metropolitan Area Transit Authority. I was
hoping we could deal with that on this legislation.
It is my understanding, however, that the gentleman from Virginia
will have another piece of legislation dealing with the convention
center. I have talked to the gentlewoman from the District of Columbia
about this. I do not believe this is controversial in any way, and I
hope we can deal with it on that legislation.
Mr. DAVIS. Mr. Speaker, if the gentleman will yield, the gentleman is
correct. I think it will be addressed in that vehicle hopefully in the
May timeframe.
Mr. HOYER. I thank the gentleman, and again I congratulate my
colleague from Washington, DC.
Ms. NORTON. Mr. Speaker, may I inquire how much time I have
remaining?
The SPEAKER. The gentlewoman from the District of Columbia [Ms.
Norton] has 3 minutes remaining, and the gentleman from Virginia [Mr.
Davis] has 2\1/4\ minutes remaining.
Ms. NORTON. Mr. Speaker, I yield 2 minutes to my good friend and
always ally, the gentleman from Virginia [Mr. Moran], also a Member
from this region.
Mr. MORAN. Mr. Speaker, I thank my friend from the District of
Columbia for yielding to me, but most importantly, for the role she has
played within the Washington metropolitan region. When her leadership
was called for, she came through in flying colors. As has been said
previously, I do not think any constituency represented by any Member
of this body is served better than by the gentlewoman from the District
of Columbia [Ms. Norton].
In fact, this was a perfect time to demagog to achieve short-term
political benefits at the long-term expense of the health of the
District of Columbia. She chose instead to work in a constructive
fashion.
Likewise, I think we ought to give some credit, as I said in the full
committee, to the gentleman from Georgia, Mr. Gingrich, the Speaker, in
having the foresight to make the gentleman from Virginia, Tom Davis,
the chairman of this subcommittee. The fact is that he could not have
chosen better.
The gentleman from Virginia has proven himself fully worthy of the
task. He deserves a great deal of credit, not just from us in the
Washington region, but from this entire body.
Mr. Speaker, this is a terribly important first step, but it is only
a first step. This board will distribute the limited resources that are
available to the
[[Page H4071]] District of Columbia, and I know that it is going to do
a responsible job in that, but it is only a first step in that those
resources are too limited. We need to take many more steps.
One such step may be giving the responsibility for Lorton, for
example, over to the Federal Bureau of Prisons, because that is a State
function, and the city has only normal city resources available to it.
We ought to examine other steps like that.
We also ought to look at possibilities of setting aside large tax-
free zones. The board might want to take the initiative to seek out
consortia, bankers, developers, city planners, and find areas in the
city that are currently not yielding any Federal revenue, so it would
not cost us anything in terms of Federal income taxes, but perhaps take
the initiative to give the city an opportunity to rebuild its tax base.
That ultimately is what is needed.
The fact is this entire body ought to be proud of this piece of
legislation. It is the right thing to do, done by the right people in
the right way.
Ms. NORTON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I hope the House will regard this as a historic day for
a new beginning, not a sad day, but a day that marked the period when
the District shot out of its doldrums, the kind of doldrums many large
cities find themselves in today.
I am appreciative for the work of the subcommittee, particularly the
gentleman from Virginia [Mr. Davis]. As a native Washingtonian in a
region without borders, he has made that understood by the way he has
transformed the committee process for these purposes.
Mr. DAVIS. Mr. Speaker, I yield myself 2\1/4\ minutes.
Mr. Speaker, debt service is one of the basic functions of a
municipal government. One of the stated purposes of this act is to
assist the District of Columbia in attaining and then maintaining
access to the credit and bond markets.
The subcommittee has tried to make abundantly clear that existing
debt and its debt service payments are of concern. Lack of timely debt
service payment would be counter to one of the major purposes of this
legislation. Debt service is a foundational part of the District of
Columbia budgets. The subcommittee expects that already dedicated funds
be used to pay debt service.
If those funds are not sufficient, then other available funds can and
should be used by either the District government or the Authority to
ensure timely payment of debt service.
Mr. Speaker, I would also like to put into the Record additional
cosponsors: the gentleman from Texas [Mr. Armey], the gentleman from
Missouri [Mr. Gephardt], the gentleman from Louisiana [Mr. Livingston],
the gentleman from Indiana [Mr. Burton], the gentleman from Texas [Mr.
DeLay], the gentleman from Michigan [Mr. Bonior], the gentleman from
New York [Mr. Gilman], the gentleman from Indiana [Mr. McIntosh], the
gentleman from New Jersey [Mr. Frelinghuysen], the gentleman from
Georgia [Mr. Kingston], the gentleman from Texas [Mr. Bonilla], the
gentleman from Illinois [Mr. Durbin], the gentleman from Pennsylvania
[Mr. Fox], the gentleman from New Jersey [Mr. Payne], the gentleman
from New York [Mr. Owens], the gentleman from Georgia [Mr. Lewis], the
gentlewoman from Florida [Mrs. Meek], the gentleman from New York [Mr.
Towns], the gentleman from Maryland [Mr. Mfume], the gentleman from New
Mexico [Mr. Richardson], the gentleman from Maryland [Mr. Ehrlich], the
gentleman from New Mexico [Mr. Schiff], the gentleman from New
Hampshire [Mr. Zeliff], the gentleman from Washington [Mr. Tate], the
gentleman from Michigan [Mr. Chrysler], the gentleman from Florida [Mr.
Scarborough], the gentlewoman from Georgia [Ms. McKinney], the
gentlewoman from Ohio [Ms. Kaptur], and the gentleman from Virginia
[Mr. Payne].
Finally, Mr. Speaker, I want to thank several individuals I did not
thank in my opening colloquy. Mr. Noah Wofsy, the legislative counsel,
did an outstanding job, working many late hours around the clock to
satisfy the many demands placed upon him, in a timely manner. We are
very, very grateful for his efforts, Noah. I want to thank him.
Also I want to thank Mr. Ed Desev and Alice Rivlin from the
President's Office and OMB, who worked with us in drafting this
legislation. Finally, from my staff, I want to thank Mr. John Hishta,
Chip Nottingham, and Cathy Walsh, who were very helpful in coordinating
this.
With that, Mr. Speaker, I would urge adoption of H.R. 1345.
Mr. BONILLA. Mr. Speaker, I rise in support of H.R. 1345, the
District of Columbia Financial Responsibility and Management Assistance
Act. Unfortunately, the continued deterioration of the District's
financial status and the inaction of local officials has left us no
other choice but to pursue this legislation. The oversight board
created by this bill will stabilize the District's financial health.
For far too many years local officials have been unwilling to accept
responsibility and make the tough decisions that must be made.
Presently, the demands of municipal unions are given priority over the
needs of schoolchildren. This govenrment-union conglomerate threatens
the safety of this community. Citizens do not know from one day to the
next if they will have police, fire, and medical protection, or if they
will have basic services like waste disposal or street repair.
Mr. Speaker, I am concerned for the long-term future of the District
of Columbia. The Oversight Board will help bring financial stability to
the District government, but what happens after the Board dissolves?
The Congress must help the District maintain long-term stability,
stability that will exist long after the Financial Oversight Board
dissolves. To attain this security, I propose the adoption of a city
manager form of government. This form of government would bring long-
term fiscal accountability to the city. I support maintaining home rule
for the citizens of Washington, DC, and believe that a city manager
would be instrumental in preventing the need for future Federal
intervention.
Currently, the city bureaucracy is bloated and out of control. There
is no accountability and a clear lack of professionalism. A financial
control board can help bring the current crisis under control, but this
Board should not be a permanent fixture for the District government. If
an oversight board is in place for only 5 years, as currently
suggested, then long-term solvency can only be solved by restructuring
the D.C. government.
A city manager would increase bureaucratic efficiency. A full-time,
professional city manager would be responsible for the bureaucratic
structure presently controlled by the Mayor. The manager would be hired
by, and accountable to, the city council, with appointments and
terminations to be approved by the House and Senate oversight
subcommittees. Appointing a professional to run the city would increase
the likelihood that congressionally mandated cuts and reforms would be
appropriately instituted. The District government needs a leader who
can insure tax dollars are not wasted and services are delivered.
The council-manager form of government is compatible with the
implementation of a financial oversight board. The District faces many
problems that can only be solved by making tough decisions that will
undoubtedly be unpopular with some constituents. A city manager will
make home rule finally work. HUD Secretary Henry Cisneros and
California Governor Pete Wilson both served as mayors under a council-
manager form of government in San Antonio and San Diego respectively.
These are 2 of the 10 largest cities in the country. As a matter of
fact, many of the Nation's most successfully run cities have council-
manager systems in place. Some examples are: Dallas, TX; Phoenix, AZ;
Austin, TX; San Jose, CA; Cincinnati, OH; Norfolk, VA; Little Rock, AR;
and St. Louis, MO.
Sadly, elected representatives in the District of Columbia have
addressed political problems without concern for the consequences. The
division of responsibilities between the District and Congress has led,
and perhaps encouraged, local officials to finger point rather than
solve problems.
Mr. Speaker, I believe the District of Columbia is one of the
greatest cities in the world. All America has a vested interest in
seeing this city succeed. We cannot succeed without consideration of a
long-term solution. I trust the Congress will give this proposal
serious consideration.
Mr. FRELINGHUYSEN. Mr. Speaker, I rise today to express my full
support for moving forward with taking emergency steps to restore the
District of Columbia to a sound financial status. I also want to
congratulate Chairmen Thomas Davis of Virginia and James Walsh of New
York, and Washington, DC Delegate Eleanor Holmes Norton for all their
hard work.
As a member of the Subcommittee on the District of Columbia, I am
disturbed by the reports of fiscal mismanagement throughout the
[[Page H4072]] District, and I share my colleagues' concern about this
current financial crisis.
Having spent time in this city as a child, and now as a U.S.
Representative, residents of the District and visitors to our Nation's
Capital deserve better. They deserve to know how their money is being
spent and they deserve more accountability. And, frankly, so do all the
American people. It is our Nation's Capital, and it should reflect
America at its best.
That is why I joined as a cosponsor of H.R. 1345, the D.C. Financial
Responsibility and Management Assistance Act of 1995. I believe that
the proposed Financial Control Board will help put the District of
Columbia back on the right track.
I have spent the first 3 months of my term in committee hearings on
this matter, and from what I have learned, the Financial Board is the
only true option we have to making the city solvent again. This Control
Board will have the authority to review city budgets, all District
master plans, labor contracts before they are approved, all city
borrowing, including loans from the U.S. Treasury and borrowing for the
D.C. government. The Board will continue to operate at full authority
until the District balances its budget for at least 4 straight years
and it remain in a reduced oversight capacity until the city pays off
all loans taken out under its authority. A five-member board will be
individuals with proven financial or management expertise.
Mr. Speaker, I urge the Board to be formed as soon as possible so
that the city will be returned to a fiscally sound status, such that
all citizens, especially its children, are given a better quality of
life by the District's government.
Miss COLLINS of Michigan. Mr. Speaker, I want to add my voice today
to those who have offered their support for H.R. 1345, the District of
Columbia Financial Responsibility and Management Assistance Act.
In a Congress where recent debates have given new meaning to the word
``partisan,'' this bill is indeed a rarity. It is a rapid bipartisan
response to a crisis which, by its very nature, has invited
partisanship at every turn.
Also, unlike many other critical bills in this Congress, H.R. 1345
has had appropriate deliberations. In addition to meeting with D.C.
government officials, the Subcommittee on the District of Columbia
heard testimony from State and municipal officials who have worked
extensively with municipal financial control boards. Because control
boards are rarely used, the knowledge derived from the testimony of
these experts was priceless.
Finally, subcommittee members and staff worked around the clock to
incorporate what they had learned into the legislation before us today.
This is a model bill, and I hope that other committees will take heed
of our example.
I yield back the balance of my time.
The SPEAKER pro tempore. All time has expired.
The question is on the motion offered by the gentleman from
Pennsylvania [Mr. Clinger], that the House suspend the rules and pass
the bill, H.R. 1345, as amended.
The question was taken, and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.

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