[Congressional Record Volume 142, Number 134 (Wednesday, September 25, 1996)]
[Senate]
[Pages S11218-S11225]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND
INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1997--CONFERENCE REPORT
The PRESIDING OFFICER. Under the previous order, the conference
report accompanying H.R. 3666 will be stated.
The legislative clerk read as follows:
The committee on conference on the disagreeing votes of the
two Houses on the amendments of the Senate to the bill (H.R.
3666) making appropriations for the Departments of Veterans
Affairs and Housing and Urban Development, and for sundry
independent agencies, boards, commissions, corporations, and
offices for the fiscal year ending September 30, 1997, and
for other purposes, having met, after full and free
conference, have agreed to recommend and do recommend to
their respective Houses this report, signed by a majority of
the conferees.
(The conference report is printed in the House proceedings of the
Record of September 20, 1996.)
Mr. BOND. Mr. President, I wish to express my appreciation to the
leadership and the Members on both sides for allowing the VA-HUD,
independent agencies bill, H.R. 3666, to be passed.
Mr. DOMENICI. Mr. President, I rise in strong support of the
conference agreement on H.R. 3666, the VA-HUD appropriations bill for
1997.
This bill provides new budget authority of $84.3 billion and new
outlays of $49.7 billion to finance operations of the Department of
Veterans Affairs and Housing and Urban Development, the Environmental
Protection Agency, NASA, and other independent agencies.
I congratulate the chairman and ranking member for producing a bill
that is within the subcommittee's 602(b) allocation. When outlays from
prior-year budget authority and other adjustments are taken into
account, the bill totals $84.3 billion in budget authority and $98.7
billion in outlays. The total bill is under the Senate subcommittee's
602(b) nondefense allocation by $43 million for budget authority and by
$8 million for outlays. The subcommittee is also under its defense
allocation by $3 million for budget authority and by $4 million for
outlays.
Mr. President, I ask unanimous consent to have printed in the Record
a table displaying the Budget Committee scoring of the conference
agreement on H.R. 3666.
There being no objection, the table was ordered to be printed in the
Record, as follows:
VA-HUD SUBCOMMITTEE--SPENDING TOTALS--CONFERENCE REPORT
[Fiscal year 1997, in millions of dollars]
------------------------------------------------------------------------
Budget
authority Outlays
------------------------------------------------------------------------
Defense discretionary:
Outlays from prior-year BA and other actions
completed...................................... ......... 61
H.R. 3666, conference report.................... 126 64
Scorekeeping adjustment......................... ......... .......
-------------------
Subtotal defense discretionary.............. 126 125
===================
Nondefense discretionary:
Outlays from prior-year BA and other actions
completed...................................... 365 47,431
H.R. 3666, conference report.................... 63,917 31,589
Scorekeeping adjustment......................... ......... .......
-------------------
Subtotal nondefense discretionary........... 64,282 79,020
===================
Mandatory:
Outlays from prior-year BA and other actions
completed...................................... ......... 1,153
H.R. 3666, conference report.................... 20,260 18,013
Adjustment to conform mandatory programs with
Budget Resolution assumptions.................. -406 381
-------------------
Subtotal mandatory.......................... 19,854 19,547
===================
Adjusted bill total......................... 84,262 98,692
===================
Senate Subcommittee 602(b) allocation:
Defense discretionary........................... 129 129
Nondefense discretionary........................ 64,325 79,048
Violent crime reduction trust fund.............. ......... .......
Mandatory....................................... 19,854 19,547
-------------------
Total allocation............................ 84,308 98,724
===================
Adjusted bill total compared to Senate Subcommittee
602(b) allocation:
Defense discretionary........................... -3 -4
Nondefense discretionary........................ -43 -28
Violent crime reduction trust fund.............. ......... .......
Mandatory....................................... ......... .......
-------------------
Total allocation............................ -46 -32
------------------------------------------------------------------------
Note: Details may not add to totals due to rounding. Totals adjusting
for consistency with current scorekeeping conventions. Prepared by SBC
Majority Staff, Sept. 24, 1996.
Section 8 Multifamily Housing Portfolio Demonstration
Mr. BOND. Mr. President, a number of my colleagues have questions
concerning the implementation of the section 8 multifamily housing
portfolio demonstration--Section 8 mark-to-market--which was adopted as
part of the conference report to H.R. 3666, the VA/HUD fiscal year 1997
Appropriations Act. The purpose of this statement is to clarify these
questions for my colleagues, as well as for HUD. The conference report
adopts a bipartisan strategy to build on the section 8 multifamily
housing portfolio restructuring demonstration which was adopted as part
of the HUD fiscal year 1996 appropriations bill, H.R. 3019, a further
downpayment toward a balanced budget.
The conference report establishes a revised demonstration program to
emphasize that portfolio restructuring needs to be undertaken to reform
and improve the FHA multifamily housing programs from a financial and
operating perspective, but not to abandon the long-term commitment to
resident protection and ongoing low-income affordability. The revised
demonstration, therefore, continues to give HUD a
[[Page S11219]]
number of flexible tools for restructuring section 8 assisted, FHA-
insured projects, while emphasizing the preservation of the existing
stock as low-income housing by generally restructuring these FHA-
insured mortgages and reducing the cost of renewing the section 8
contracts. I emphasize that this demonstration, including the concept
of reasonable offer, is intended to preserve affordable low-income
housing, prevent the dislocation of current residents, preserve the
rights of current owners who have complied with program requirements,
and to not create any significant exposure of tax liability to owners.
The section 8 mark-to-market inventory covers some 8,500 projects
with almost one million units that are both FHA-insured and whose debt
service is almost totally dependent on rental assistance payments made
under section 8 project-based contracts. Most of these projects serve
very low-income families, with approximately 37 percent of the stock
serving elderly families. Many of these projects are oversubsidized
and, without the renewal of expiring section 8 contracts, are at risk
of mortgage default. This raises concerns of owner disinvestment,
resident displacement, and government ownership, management and
disposition of this housing inventory. While continuing the existing
subsidy arrangements would be very popular to both owners and tenants,
the combination of the Federal Government overpaying for the value of
this low-income housing resource as well as the growing tide of
discretionary budget cuts require new policies and reforms to these
programs.
The cost of renewing the section 8 project-based contracts on this
multifamily housing inventory emphasizes the many difficult budget and
policy issues which need to be addressed as Congress reevaluates
Federal housing policy. In particular, according to HUD estimates, the
cost of all section 8 contract renewals, both tenant-based and project-
based, will require appropriations of about $3.8 billion in fiscal year
1997, $10 billion in fiscal year 1998, and over $16 billion in fiscal
year 2000. In addition, the cost of renewing the section 8 project-
based contracts will grow from $1.2 billion in fiscal year 1997 to
almost $4 billion in fiscal year 2000, and to some $8 billion in 10
years. Moreover, the unpaid principal balance [UPB] on the mortgages
associated with this FHA-insured housing inventory represents a
contingent liability of some $17 billion to HUD and the Federal
Government.
The section 8 multifamily housing portfolio restructuring
demonstration is designed as an interim strategy and as a stepping
stone for more comprehensive legislation by the authorizing committees
as well as consideration of associated tax issues by the tax
committees. This demonstration will require HUD to renew for up to 1
year all section 8 contracts with rents at or below 120 percent of the
fair market rent for an area. In addition, project owners with expiring
contracts above 120 percent of fair market rent may opt to have their
section 8 contracts renewed at 120 percent of the fair market rent.
This safe harbor will cover many of the 240,000 units which are
supported by expiring section 8 contracts in fiscal year 1997, and will
provide HUD with the administrative ability to focus on those FHA-
insured multifamily housing projects with significantly oversubsidized
rents. The projects with units which do not qualify for the contract
renewal safe harbor will be eligible to participate in the section 8
multifamily mortgage restructuring portfolio demonstration and, at a
minimum, will be renewed at budget-based rents.
The demonstration would encourage HUD to enter into contracts with
qualified State housing finance agencies, local housing agencies, and
nonprofits either as a partner or as designee to administer the program
for HUD. The conference report reflects the belief that balancing the
fiscal goals of reducing costs with the public policy goals of
preserving and maintaining affordable low-income housing requires an
intermediary which is accountable to the public interest. Because of
the Department's capacity and management problems as documented by the
Inspector General and the General Accounting Office, the demonstration
reflects the understanding that capable public entities and certain
qualified nonprofits should be accorded an opportunity to restructure
mortgages on behalf of the Federal Government. I believe that many
State housing finance agencies [HFA's], local HFA's, and other State
and local housing and community development entities have the requisite
capacity and expertise to implement the mortgage restructuring
demonstration program and that developing this capacity and expertise
will be important in the future for further establishing and building
on both new and existing public and private partnerships for the
development of affordable housing. I emphasize that nonprofits must be
financially sound and have a demonstrated record in the area of
affordable housing issues. I warn HUD to be very careful that sham
nonprofits are not to be included, especially where a nonprofit is
determined to be acting as a tool for the interests of some other
entity.
It also is expected that HUD and these public purpose designees will
contract and subcontract with other entities, including private
entities such as financial institutions and mortgage bankers and
servicers, to enhance the expertise and capacity necessary to ensure
that mortgaging restructurings are handled to the best advantage of the
Federal Government, the project, the community, and the residents. It
is hoped that these partnerships can be used to crossfertilize public
and private approaches to low-income housing to create new strategies
and leverage new funds for the preservation and creation of low-income
affordable housing resources.
The multifamily housing portfolio restructuring demonstration will
provide HUD and the public agencies, and nonprofits, with a number of
tools to restructure the FHA-insured mortgages and reduce the cost of
section 8 project-based housing assistance. These tools include broad
authority to restructure mortgages, including the forgiveness of
mortgage indebtedness. For example, HUD could restructure a project
mortgage so that a first mortgage would reflect the market value of a
project while HUD holds a soft second on the remainder of the project
debt. This would preserve the low-income character of the housing while
reducing both the cost of the section 8 assistance and the risk of
foreclosure. In exchange for mortgage restructuring, project owners
would have to agree to preserve the housing as affordable for low-
income families in accordance with requirements established by the
Department or a designee. These requirements shall be balanced to
ensure the long-term economic viability of the housing.
The demonstration also allows HUD to implement budget-based rents to
squeeze out any inflated profits while covering the debt service,
operating costs and a reasonable return to the owners of these
federally assisted projects. The use of budget-based rents are intended
to be flexible enough to ensure the preservation of unique and
critically needed low-income housing projects, such as elderly projects
in rural areas, projects designed to house large families, projects in
localities with low vacancy rates, and projects with operating costs
which exceed any comparable market rents. I emphasize that the
Department should exercise a special sensitivity to certain projects,
such as elderly projects in rural areas, that house a special
population, especially where the availability of other affordable
housing is questionable.
The conference report has elected to focus the restructuring
demonstration on projects with contract rents above 120 percent of the
fair market rents. According to recent HUD estimates, section 8
contracts affecting approximately 35,000 project-based assisted units
will expire in fiscal year 1997. Of this amount, about 12,000 are
assisted by HUD's section 8 new construction and substantial
rehabilitation [NC/SR] programs. The program expects HUD to focus most
of its mortgage restructuring efforts on the NC/SR assisted, or newer
assisted portfolio since the costs of section 8 rental assistance
attached to these properties are much greater than those assisted by
HUD's section 8 loan management set aside [LMSA] program and the
budgetary costs to maintain this inventory is greater. Therefore, the
conference believes that greater budgetary savings will be realized on
restructuring the newer assisted stock.
[[Page S11220]]
Further, unlike rents on the newer assisted stock, section 8 contract
rents on the older assisted stock are regulated on a budget-based
process. As such, the rents are supposed to be set already at the
minimum level necessary to meet operating and debt service expenses.
Contract rents on the newer assisted stock also are higher than
prevailing market rates due to the initial construction costs and
automatic rent increases that have been provided during the term of the
assistance contract regardless of operating needs. Finally,
restructuring the debt on the older assisted portfolio would likely
achieve only minimal section 8 subsidy savings since the UPB on the
remaining mortgage is smaller than the UPB on the newer stock. For
example, older assisted properties have an average UPB of $14,000 per
unit compared to an average UPB of $35,000 per unit for newer assisted
properties. Therefore, focusing on the older assisted properties for
debt restructuring likely would not necessarily be cost-beneficial
especially when considering the time and transaction costs of such a
process.
The conference bill also requires at least 75 percent of mortgages be
restructured with FHA insurance. It is my belief that FHA mortgage
insurance and other forms of credit enhancement are necessary for debt
financing considering the short terms of section 8 contract renewals
that are being provided in recent appropriation acts. Without long-term
section 8 contracts, debt financing likely is to be difficult for
restructured projects. If no insurance is provided when mortgages are
restructured, debt restructuring costs also will be likely be higher,
or mortgage debt discount deeper, than if the mortgages were
restructured with insurance because private lenders would set the terms
of the loans to reflect the risk of default. These projects could not
have been built or financed without the original FHA mortgage insurance
due to the inherent risks in developing low-income housing and the
areas that these projects were built in.
Nevertheless, I emphasize that the use of FHA mortgage insurance and
other forms of credit enhancement should be explored carefully to
minimize the default risk to the Federal Government. In some cases,
mortgage insurance may not be necessary when owners can obtain
reasonable financing without insurance. As a result, the demonstration
program allows some discretion in exploring and creating new forms of
credit enhancement that would reduce the default risk and credit
subsidy costs to the Federal Government. The demonstration also
includes the use of mortgage insurance under risk-sharing arrangements
currently practiced under the mortgage risk-sharing programs enacted
under the Housing and Community Development Act of 1992. Mortgage
insurance under these risk-sharing arrangements would be encouraged by
not applying the current statutory limitations on the number of units
that can be made available for mortgage insurance under this program.
There is also concern about the Department's plans to sell its
benefits and burdens, including rights and obligations, under the FHA
mortgage insurance program to public agencies as well as private
entities. The demonstration permits HUD to sell to private entities the
benefits and burdens of FHA multifamily mortgage insurance on up to
5,000 units. While it is important to test various restructuring
strategies under the demonstration, the Department needs to ensure that
the housing be preserved as low income, with residents and owners not
displaced because of any risks associated with this mortgage
refinancing strategy.
The demonstration also allows HUD to test the use of vouchers on up
to 10 percent of the units in the demonstration so long as the owner
agrees and the residents are consulted. As a further protection for
residents, this strategy may only be implemented where it is determined
that residents will be able to use successfully vouchers to obtain
decent, safe, and sanitary housing.
Finally, this demonstration is an interim step to a more
comprehensive long-term solution to the preservation of section 8
assisted housing. It is expected that the authorizing committee,
consistent with hearings held by both the House and Senate authorizing
committess, will consider reform of the section 8 mark-to-market
inventory a priority for legislation during the next Congress.
mark-to-market demonstration
Mr. MACK. Mr. President, I would like to commend Senator Bond for
addressing the expiration of thousands of section 8 housing assistance
contracts by including a FHA multifamily demonstration program in the
VA-HUD appropriations bill. This demonstration program incorporates
many of the major principles of S. 2042, the Multifamily Assisted
Housing Reform and Affordability Act of 1996, which I introduced last
month along with Senators Bond, D'Amato, and Bennett. However, the
success of the demonstration program depends on HUD's implementation. I
would like to ask Senator Bond a few questions to clarify the intent of
the legislation.
First, the demonstration program would allow the Secretary to use
nonprofit entities as ``designees'' to carry out the functions and
responsibilities of portfolio restructuring. Athough I believe that
there are legitimate and qualified nonprofits who could be used as
restructuring entities, I am concerned about the use of nonprofits that
do not have the support of the local community or residents. How does
the demonstration program address ``sham'' nonprofits?
Mr. BOND. I share the Senator's concern and believe that the
demonstration authority does address ``sham'' nonprofits. Specifically,
the demonstration requires the Secretary to select only these entities
that have a long-term record of service in providing low-income housing
and meet standards of fiscal responsibility. I expect HUD to issue
detailed guidelines on what would constitute a qualified ``designee''
whether it is a nonprofit or public entity.
Mr. MACK. My second concern is about the Department's capacity to
restructure up to 50,000 units in the demonstration program. Numerous
studies by the HUD IG and GAO and statements by HUD officials
themselves have indicated that there are serious capacity problems in
the multifamily housing area at HUD. HUD's response to these problems
is to liquidate the inventory through sales of HUD-held and guaranteed
mortgages to Wall Street investors. S. 2042, however, would protect the
Federal Government's affordable housing investment by transferring the
portfolio management responsibilities to publicly accountable entities
such as State and local housing finance agencies. How does the
demonstration program address these issues?
Mr. BOND. The demonstration program is significantly based on S.
2042. Like S. 2042, the demonstration program addresses the
Department's capacity constraints by requiring HUD to form arrangements
with qualified third party public entities. The demonstration program
assumes that the participation of public entities such as State and
local housing finance agencies will be encouraged and utilized to the
fullest extent possible by HUD. In response to the Senator's concern
about HUD's liquidation policy, the demonstration does allow HUD to
transfer or sell up to 5,000 units of HUD mortgages to private sector
parties. This provision is not intended to be used as means of
liquidating the housing stock. Instead, the intent is to test the
efficiency and effectiveness of using private sector entities to
preserve the affordable housing stock at the lowest possible cost to
the American taxpayer while recognizing the impact on communities and
owners.
Mr. MACK. Thank you again for your work and dedication to this issue
and for considering the views of the authorizing committee in the
demonstration program.
Mr. BOND. I appreciate the Senator's support and work on this issue,
and I look forward to our continued cooperative effort to develop a
comprehensive portfolio restructuring program early next year.
Section 8 Contract Renewals
Mr. GREGG. I have a question for the chairman Senator Bond. I
congratulate him for tackling the difficult problem of renewal of
section 8 contracts in a comprehensive manner, providing for renewal of
all contracts with rents less than 120 percent of fair market rent at
the existing contract rent and permitting FHA-insured projects with
rents
[[Page S11221]]
over 120 percent of fair market rents either to accept rents at 120
percent of fair market rents, or to enter the demonstration. The
Senator also permits projects financed or insured by State or local
agencies, or under section 202, 811, and 515, to be renewed at current
rents. However, there is an omission, with regard to conventionally
financed contracts with rents over 120 percent of fair market rent,
which are not explicitly covered by the legislation.
Many of these projects, including some in New Hampshire, were
developed in the early years of section 8, and I assume that the
conferees did not intend to exclude them.
Mr. BOND. The Senator is correct. Under present law, namely section
405(a) of the Balanced Budget Down Payments Act I, HUD has the
authority to renew conventionally-financed section 8 contracts at up to
120 percent of fair market rents. Indeed, in August HUD sent out a
memorandum stating that it would renew such contracts at rents not in
excess of 120 percent of Fair Market Rent. Nothing in this year's
appropriations bill withdraws HUD's authority under section 405(a) to
renew such contracts. I ask unanimous consent to have printed in the
Record the legal opinion by Judge Diaz, the General Counsel for HUD,
which confirms this analysis.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Department of Housing and
Urban Development,
Washington, DC, September 24, 1996.
Memorandum to: Nicolas P. Retsinas, Assistant Secretary for
Housing--FEA Commissioner.
From: Nelson A. Diaz, General Counsel.
Subject: Expiring project-based section 8 contracts on
noninsured multifamily housing projects.
This memorandum is in response to your request for an
opinion from the Office of General Counsel (OGC) regarding
the legal authority to renew expiring project-based section 8
contracts on noninsured multifamily projects which have rents
greater than 120% of the fair market rent.
Under Section 408(a) of the Balanced Budget Downpayment Act
I, HUD has the authority to renew conventionally-financed
section 9 contracts at up to 120% of the fair market rents.
This position was set forth in HUD Notice H 96-74, entitled
Project-Based section 8 Contracts Expiring in Fiscal Year
1997, issued on August 28, 1996. As it is currently composed
in the draft before us on September 23, 1996, it is OGC's
opinion that nothing in this year's proposed appropriation
bill withdraws HUD's authority under 405(a) to enter into
project-based maintenance contracts on those non-FHA insured
projects whose expiring contract rents exceed 120% of the
fair market rents for the market area in which the projects
are located.
section 8 rents
Mr. LAUTENBERG. Mr. President, I am concerned that this legislation
does not adequately address the circumstances faced by certain unique
properties. Specifically, I am worried about situations where the
current section 8 rents exceed the fair market rents set by HUD by more
than 120 percent, but are below the comparable market rents. If HUD
cannot renew these contracts at current rents, the low and moderate-
income residents of these properties may quickly find themselves
without a decent place to live, especially in tight housing market such
as we have in northern New Jersey. In this situation, I fear that an
owner may have little choice other than to terminate the leases and
rent the property to people who are willing to pay the real market
rent. I do not believe that we have provided any sort of inducement for
the owner of this type of property to continue to house low and
moderate income people, many of whom may be elderly. Sticky vouchers
would have been a very good solution to this problem. However, I have
been advised by staff that the budget-based rent provisions under the
demonstration address my concerns. I would like to be assured that this
is, in fact, the case.
Mr. BOND. I would like to assure my colleague that the budget-based
rent provisions can be used to address the concerns you raise. Under
the budget-based rent provisions, the owner of unique property located
in a tight housing market which houses elderly families and where the
market rates are greater than the current contract rents and the rents
are in excess of 120 percent of the FMR, could be provided with a
contract renewal at the current contract rent level for 1 year. Also,
Congress should look at the use of sticky vouchers in the future.
Mr. LAUTENBURG. So the budget-based rent provision is not limited to
properties where the operating costs exceed comparable market rents?
Mr. BOND. That is correct. Properties where the operating costs
exceed the comparable market rents are eligible for the budget-based
rent provisions, but eligibility for budget-based rents is not limited
to such properties. I emphasize that the mark-to-market demonstration
is designed to ensure that HUD is particularly sensitive to the need to
preserve existing low-income housing for the elderly and disabled.
Mr. LAUTENBURG. What would induce an owner of the type of property I
described to continue to keep the property as an affordable housing
resource?
Mr. BOND. The owner could be induced to continue to keep the property
as an affordable housing resource by allowing the owner an adequate
return on equity.
Mr. LAUTENBERG. Would the calculation of an adequate return on equity
take into account the true market value of the property in unique
circumstances such as the one I have described?
Mr. BOND. The Secretary would have the discretion to determine an
adequate return on equity in this way if he so chose.
section 8 housing for the elderly
Mr. KERREY. I am very concerned that in Nebraska and its neighboring
States, section 8 projects for the elderly will be disadvantaged under
the language in the conference report, unless a special effort is made
to preserve them. Fair market rents in these areas for zero and 1-
bedroom apartments are low which cause high rents necessary to sustain
section 8 projects with appropriate services for the elderly. These
projects often have elevators, additional facilities for food,
recreation and services, and extra management services such as 24-hour-
in-house staff. They are above the 120 percent of FMR threshold for
renewal at current rents. In order to bring these project rents down to
FMR, all or most of the debt services would have to be eliminated. Debt
reduction of this magnitude would most certainly give rise to
significant tax liabilities. Is it your intent that debt restructuring
occur?
Mr. BOND. The legislation is intended to preserve section 8 housing
for the elderly and special populations. While debt restructuring may
be unnecessary in most cases, it may be advantageous in some.
Therefore, the chairman's intent is for HUD to review carefully each
case and limit the use of debt restructuring to those rare cases where
it is most advantageous. Furthermore, in any calculation HUD uses in
determining the market rent for these projects, HUD must include
compensation to cover services that meet the unique needs of the
elderly and special populations.
Mr. HARKIN. I would ask that the chairman clarify his intentions on
the limitations placed on HUD when considering debt restructuring.
Mr. BOND. HUD is instructed to use a three-pronged approach in
determining whether the debt should be restructured. First, no tenants
should be displaced. Second, the owners should not be forced to sell
the project. Third, owners should not be subject to significant tax
liability.
Mr. KERREY. I thank the chairman and look forward to assisting in the
oversight of the implementation of these legislative provisions.
Mr. HARKIN. I would also like to thank the chairman. It is
increasingly important that we preserve these projects for the elderly,
especially in rural areas.
section 8 contract renewals
Ms. SNOWE. Mr. President, Senator Cohen and I have been working
extensively with the U.S. Department of Housing and Urban Development
and the Maine State Housing Authority to clarify the status and
handling of contracts for 17 housing projects in Maine that were
originally subsidized under section 23 and were later converted to
section 8. We would like to confirm that these housing projects meet
the definition of ``project-based'' as defined under paragraph (5),
section 21 of the housing appropriations bill.
Mr. BOND. Mr. President, that is correct.
Mr. COHEN. Mr. President, of these housing projects, all of which
receive
[[Page S11222]]
project-based assistance from the Department of Housing and Urban
Development, 14 are financed through the Maine State Housing Authority.
None of them are FHA-insured. We would like to further confirm our
understanding that the project-based contracts for these particular
housing projects will be renewed for 1-year at the current rent level
under the terms and conditions of paragraph (2), section 211 of the
housing appropriations bill.
Mr. BOND. Mr. President, the senior Senator from Maine is absolutely
right.
Mr. MACK. Mr. President, I want to commend the chairman of the
subcommittee, Senator Bond, for incorporating report language
clarifying that Congress does not intend for the Fair Housing Act to
apply to property insurance. HUD's assertion of authority over the
conduct of the property insurance market overreaches, and in fact
contradicts, congressional intent as reflected in the plain language
and legislative history of the Fair Housing Act.
HUD's attempt to regulate the business of insurance, notwithstanding
the lack of any reference to property insurance in the Fair Housing Act
or its legislative history, also contradicts the statutory mandate of
the McCarran-Ferguson Act of 1945, which requires that, unless a
Federal law ``specifically relates to the business of insurance,'' that
law shall not apply where it would ``invalidate, impair or supersede''
State law. HUD's assumption of authority to regulate property insurance
has the practical effect of invalidating, impairing and superseding the
State laws which prohibit unfair discrimination by insurers, and it is
the type of duplicative regulation which Congress sought to avoid
through McCarran-Ferguson.
We should not tolerate illegal discriminatory practices by anyone
involved in the real estate market. However, every State provides
recourse for addressing complaints of unfair discrimination by
insurers. There is no need for HUD, which currently has difficulty
meeting its statutory mandates, to step into the shoes of State
regulators to create a Federal regulatory regime without clear
justification or authority.
PROPERTY INSURANCE REGULATION
Mr. BOND. Mr. President, I want to make it clear that I am
fundamentally and adamantly opposed to discrimination in any form,
including discrimination in the provision of property insurance.
Nevertheless, I believe that HUD has no authority under the Fair
Housing Act to regulate the practices of the insurance industry,
including practices related to the provision of property insurance.
Moreover, HUD does not have the capacity or ability to address
discrimination issues in the practices of the insurance industry, and
any attempts to establish and enforce standards are likely to result in
confusion and questionable actions.
The purpose of both the Senate and House committee reports to the VA/
HUD fiscal year 1997 appropriations bill is to ask HUD to focus its
fair housing resources of $30 million toward activities designed to
fight discrimination in the sale, rental, and financing of housing.
These are limited resources and the committee report language in both
House and Senate reports is designed to ensure that this funding is
used in a comprehensive and focused manner to fight housing
discrimination.
Furthermore, while the courts have not always been consistent in the
application of the Fair Housing Act, I believe Congress has made it
clear that the regulation of property insurance is outside the scope of
the Fair Housing Act and is contrary to the intent of the MacCarran-
Ferguson Act which states that the responsibility for insurance
matters, including property insurance, is the responsibility of the
States. The Fair Housing Act says nothing about Federal action with
regard to discrimination in the provision of property insurance.
In fact, the legislative history of the Fair Housing Act indicates
that the Fair Housing Act does not apply to insurance. Notably, in the
Senate floor debate on the 1980 amendments to the Fair Housing Act,
Senator Heflin stated that it was * * *
* * *the decision of the Subcommittee on the Constitution,
acquiesced in by the full Senate Judiciary Committee, to
leave the regulation and oversight of the property insurance
business to the States and to reject extension of [the Fair
Housing Act] to that business.
HUD's property insurance activities are wholly unwarranted. Every
State and the District of Columbia have laws and regulations addressing
unfair discrimination in property insurance. We need to avoid
duplication of effort and also avoid the risk of creating new and
different standards that will be confusing and administratively
burdensome. The House and Senate reports to the VA/HUD fiscal year 1997
Appropriations Act are identical on the issue of fair housing and
property insurance, and are designed to state the understanding of the
House and Senate that HUD should not intrude upon the responsibilities
of the States with regard to the regulation of insurance, including
property insurance.
Mr. SHELBY. Mr. President, on September 5, 1996, several senators
expressed concern about language regarding property insurance
activities by HUD's Office of Fair Housing and Equal Opportunity
contained in the committee report accompanying the VA, HUD, and
independent agencies appropriation bill.
For some time now, HUD has claimed it has jurisdiction under the Fair
Housing Act to investigate complaints about alleged insurance redlining
practices. Statements have been made that the committee report language
is an effort to somehow exempt the insurance industry from civil rights
enforcement. Nothing could be further from the truth. This is not about
civil rights. It is about regulation.
Congress never intended to apply the Fair Housing Act to property
insurance for the simple reason that the insurance industry is subject
to State regulation under the McCarran-Ferguson Act. It is for this
reason that the Congress chose specifically not to include the sale or
underwriting of insurance under the Fair Housing Act.
HUD's enforcement and regulatory activities regarding property
insurance is clearly a waste of resources because it duplicates State
laws and regulations. Virtually every State and the District of
Columbia have laws or regulations governing unfair discriminatory
practices by insurance companies. States are actively investigating and
addressing discrimination where it is found to occur. HUD is just
adding another wasteful and unnecessary layer of bureaucracy.
Congress faces many hard choices in working to fulfill its commitment
to eliminate unnecessary Federal spending and red tape. With respect to
HUD, Congress must determine how to preserve essential programs while
creating a more efficient Federal Government and reduce the budget
deficit. If there is one area of Federal spending where Congress need
not struggle to determine whether cutbacks are appropriate, it is HUD's
activities regarding property insurance.
Mr. FAIRCLOTH. Mr. President, I rise today to speak about HUD's
attempts over the past few years to regulate property insurance under
the Fair Housing Act. Let me state for the record that I am committed
to strict enforcement of the Fair Housing Act and its prohibitions
against discrimination in housing.
The Fair Housing Act is one of the basic tenets of our country's
civil rights laws. Where outright discrimination in housing is found,
enforcement must be swift and strong.
However, my concerns stem from two issues. First, HUD lacks the
authority to regulate property insurance. Second, regulation of
property insurance is already being done by the States.
The Fair Housing Act makes it unlawful ``to discriminate against any
person in the terms, conditions, or privileges of sale or rental of a
home . . . Because of race.'' The language goes on to refer to the
services provided by mortgage bankers and real estate brokers. Nowhere
in the language does the act refer to property insurance. The Fair
Housing Act does not specifically relate to the business of insurance.
Courts have held that Congress never intended the Fair Housing Act to
apply to insurance. HUD is clearly overstepping its authority by
pursuing any regulation in this area. In fact, it spent hundreds of
thousands of dollars on outside legal help to write this regulation
because the legal basis for doing so was so tenuous.
[[Page S11223]]
By pursuing this issue, HUD is assuming that States have not been
doing anything in this area. That assumption is wrong. All 50 States
and the District of Columbia have enacted statutes or regulations, or
both, that address unfair discrimination in insurance practices,
violations of civil rights or which permit insurance departments to
investigate unfair trade practices. I will submit for the record a
compilation of some of these State statutes or regulations governing
unfair discrimination in insurance. States are active in investigating
discrimination. There is strong protection against illegal
discrimination. HUD's actions only add another unnecessary layer of
Federal bureaucracy.
This is just another example of HUD trying to assert more Federal
power and more Federal control in an area traditionally under the
domain of the States. HUD has shown, over the more than 30 years that
the department has been in existence, that it cannot perform well those
programs that are under its administration. What case can be made for
HUD to take on yet another program. HUD is a failure. Regulation of
property insurance is not within HUD's authority, and every effort
should be made to keep HUD out of this area.
I ask unanimous consent that a representative sample of State
statutes or regulations be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
STATE LAWS GOVERNING UNFAIR DISCRIMINATION IN INSURANCE
[Below is a compilation of laws and regulations in the 50 states and the District of Columbia which address
unfair discrimination in insurance practices, violations of civil rights, or which permit insurance departments
to investigate unfair trade practices. All 50 states and the District of Columbia have enacted statutes or
regulations, or both, to address these issues. Except where otherwise indicated, all citations are to insurance
codes or regulations]
----------------------------------------------------------------------------------------------------------------
State: Citation and chapter/section heading Relevant text
----------------------------------------------------------------------------------------------------------------
Alabama:
Trade Practices Law: Sec. 27-12-2; Sec. 27-12-21........... No person shall engage in this state in any
trade practice which is . . . determined [by
the Commissioner] to be an unfair method of
competition or an unfair or deceptive act or
practice in the business of insurance.
Rates and Rate Organizations: Sec. 27-13-1; Sec. 27-13-65.. Every rating organization and every insurer
which makes its own rates shall make rates
that are not unreasonably high or inadequate
for the safety and soundness of the insurer
and which do not unfairly discriminate
between risks in this state . . .
Arkansas:
Trade Practices: Sec. 23-66-205; Sec. 23-66-206(7)......... Prohibited unfair competition or unfair or
deceptive acts or practices include the
following:
(C) Making or permitting any unfair
discrimination between individuals or risks
of the same class and of essentially the
same hazards by refusing to issue, refusing
to renew, canceling, or limiting the amount
of insurance coverage on a property or
casualty risk because of the geographic
location of the risk, unless:
(i) The refusal, cancellation, or
limitation is for a business purpose
which is not a mere pretext for unfair
discrimination; or
(ii) The refusal, cancellation, or
limitation is required by law or
regulatory mandate.
(D) Making or permitting any unfair
discrimination between individuals or risks
of the same class and of essentially the
same hazards by refusing to issue, refusing
to renew, canceling, or limiting the amount
of insurance coverage on a residential
property risk or on the personal property
contained therein because of the age of the
residential property, unless:
(i) The refusal, cancellation, or
limitation is for a business purpose
which is not a mere pretext for unfair
discrimination; or
(ii) The refusal, cancellation, or
limitation is required by law or
regulatory mandate.
Rates and Rating Organizations: Sec. 23-67-201; Sec. 23-67- (a) [Insurance] rates shall not be excessive,
208. inadequate, or unfairly discriminatory.
California:
Prohibition of Discriminatory Practices by Certain Admitted No admitted insurer shall fail or refuse to
Insurers: Sec. 679.71. accept an application for, or to issue a
policy to an applicant, or cancel insurance,
under conditions less favorable to the
insured than in other comparable cases,
except for reasons applicable alike to
persons of every marital status, sex, race,
color, religion, national origin, or
ancestry; nor shall sex, race, color,
religion, national origin, or ancestry
itself constitute a condition or risk for
which a higher rate, premium, or charge may
be required of the insured for such
insurance.
CA Code of Regulations (CCR): Sec. 2646.6................... Requires insurers to collect and submit
comprehensive insurance premium/exposure,
marketing and customer demographic data by
geographical area on an annual basis to the
Department of Insurance.
District of Columbia:
Fire, Casualty, and Marine Insurance: Sec. 35-1533.......... Discrimination between individual risks of
the same class or hazard in the amount of
premiums or rates charged for any policy, or
in the benefits or amount of insurance
payable thereon, or in any of the terms or
conditions of such policy, or in any other
manner whatsoever, is prohibited, and the
Superintendent is empowered after
investigation to order removed at such time
and in such manner as he shall specify any
such discrimination which his investigation
may reveal.
Regulation of Casualty and Other Insurance Rates: Sec. 35- (a) Rates for insurance within the scope of
1703. this chapter shall not be excessive,
inadequate, or unfairly discriminatory.
Georgia:
Unfair Trade Practices: Sec. 33-6-3; Sec. 33-6-4(b)(A)(iii) Prohibited unfair methods of competition and
unfair and deceptive acts or practices in
the business of insurance include the
following:
(A)(iii) Making or permitting any unfair
discrimination in the issuance, renewal, or
cancellation of any policy or contract of
insurance against direct loss to residual
property and the contents thereof, in the
amount of premium, policy fees, or rates
charged for the policies or contracts when
the discrimination is solely based upon the
age or geographical location of the property
within a rated fire without regard to
objective loss experience relating thereto.
Regulation of Rates, Underwriting Rules, and Related (1) [Insurance] rates shall not be excessive
Organizations: Sec. 33-9-1; Sec. 33-9-4. or inadequate, as defined in this Code
section, nor shall they be unfairly
discriminatory.
GA Regulations: 120-2-65; 120-2-66........................... Prohibitive underwriting guidelines for
automobile insurance. Prohibitive
underwriting guidelines for property
insurance.
Illinois:
Unfair Methods of Competition and Unfair and Deceptive Acts Prohibited unfair methods of competition or
and Practices: 215 ILCS 5/423; 215 ILCS 5/424; 215 ILCS 5/ unfair and deceptive acts or practices
155.22. include the following:
(3) Making or permitting, in the case of
insurance of the types enumerated in classes
2 and 3 of section 4, any unfair
discrimination between individuals or risks
of the same class or of essentially the same
hazard and expense element because of the
race, color, religion or national origin of
such insurance risks or applicant.
No company authorized to transact in this
State the kinds of business described in
Classes 2 and 3 of Section 4,\1\ and no
officer, director, agent, clerk, employee or
broker of such company shall upon proper
application refuse to provide insurance
solely on the basis of the specific
geographic location of the risk sought to be
insured unless such refusal is for a
business purpose which is not a mere pretext
for unfair discrimination.
Louisiana:
Unfair Trade Practices: Sec. 22.1213; Sec. 22:1214(7)...... Prohibited unfair methods of competition in
the business of insurance include the
following:
(7)(d) Making or permitting any unfair
discrimination between individuals or risks
of the same class and of essentially the
same hazard by refusing to insure, refusing
to renew, cancelling, or limiting the amount
of insurance coverage on a property or
casualty risk solely because of the
geographic location of the risk, unless such
action is a result of the application of
sound underwriting and actuarial principles
related to actual or reasonably anticipated
loss experience;
(e) Making or permitting any unfair
discrimination between individuals or risks
of the same class and of essentially the
same hazards by refusing to insure, refusing
to renew, canceling, or limiting the amount
of insurance coverage on the residential
property risk, or the personal property
contained therein, solely because of the age
of the residential property;
(f) Refusing to insure, refusing to continue
to insure or limiting the amount of coverage
available to an individual solely because of
the sex, marital status, race, religion, or
national origin of the individual. However,
nothing in this Subsection shall prohibit an
insurer from taking marital status into
account for the purpose of defining persons
eligible for dependent benefits. Nothing in
this Section shall prohibit or limit the
operation of fraternal benefit societies.
Sec. 22:652................................................. No insurer shall make or permit any unfair
discrimination in favor of particular
individuals or persons, or between insureds
or subjects of insurance having
substantially like insuring risk and
exposure factors, or expense elements, in
the terms or conditions of any insurance
contract, or in the rate of amount of
premium charged therefor, or in the benefits
payable or in any other rights or privileges
accruing thereunder . . .
Loisiana Insurance Rating Commission and Rate Regulation: (2) [Insurance] rates shall not be excessive,
Sec. 1402; Sec. 1404. inadequate or unfairly discriminatory.
New York:
Unfair Claim Settlement Practices; Other Misconduct; (a) . . . no individual or entity subject to
Discrimination: Sec. 2606. the supervision of the superintendent shall
because of race, color, creed or national
origin: (1) Make any distinction or
discrimination between persons as to the
premiums or rates charged for insurance
policies or in any other manner whatever.
(2) Demand or require a greater premium from
any persons than it requires at that time
from others in similar cases.
(b) . . . no individual or entity subject to
the superintendent's supervision shall
solely because of the applicant's race,
color, creed or national origin: (1) Reject
any application for a policy of insurance
issued and/or sold by it. (2) Refuse to
issue, renew or sell such policy after
appropriate application therefor.
Sec. 2607................................................... No individual or entity shall refuse to issue
any policy of insurance, or cancel or
decline to renew such policy because of the
sex or marital status of the applicant or
policyholder.
Property/Casualty Insurance Rates: Sec. 2301; Sec. 2303.... Rates shall not be excessive, inadequate,
unfairly discriminatory, destructive of
competition or detrimental to the solvency
of insurers.
North Carolina:
Unfair Trade Practices: Sec. 58-63-10; Sec. 58-63-15(7).... Prohibited acts of unfair discrimination
include:
(7)c. Making or permitting any unfair
discrimination between or among individuals
or risks of the same class and of
essentially the same hazards by refusing to
issue, refusing to renew, canceling, or
limiting the amount of insurance coverage on
a property or casualty risk because of the
geographic location of the risk, unless:
1. The refusal or limitation is for the
purpose of preserving the solvency of the
insurer and is not a mere pretext for unfair
discrimination or
2. The refusal, cancellation, or limitation
is required by law.
d. Making or permitting any unfair
discrimination between or among individuals
or risks of the same class and of
essentially the same hazard by refusing to
issue, refusing to renew, canceling, or
limiting the amount of insurance coverage on
a residential property risk, or the personal
property contained therein, because of the
age of the residential property, unless:
1. The refusal or limitation is for the
purpose of preserving the solvency of the
insurer and is not a mere pretext for
unfair discrimination, or
2. The refusal, cancellation, or
limitation is required by law.
[[Page S11224]]
Regulation of Insurance Rates: Sec. 58-40-1; Sec. 58-40-20. (a) In order to serve the public interest,
rates shall not be excessive, inadequate or
unfairly discriminatory.
Texas:
Misrepresentation and Discrimination: Art. 21.21 sec. 3; Art. Prohibited acts of unfair discrimination
21.21 sec. 4. include:
(7)(c) Making or permitting any unfair
discrimination between individuals or risks
of the same class and of essentially the
same hazards by refusing to renew, canceling
or limiting the amount of coverage on a
policy of insurance covered by Subchapter C,
Chapter 4, of this code because of the
geographic location of the risk unless:
(1) the refusal, cancellation or
limitation is for a business purpose that
is not a mere pretext for unfair
discrimination; or
(2) the refusal, cancellation or
limitation is required by law or
regulatory mandate.
Casualty Insurance and Fidelity, Guaranty and Surety Bonds: (3) Rates shall be reasonable, adequate, not
Art. 5.14. unfairly discriminatory.
----------------------------------------------------------------------------------------------------------------
\1\ 215 ILCS 5/4.
fair housing initiative program
Mr. BURNS. Mr. President, during consideration of the VA, HUD, and
independent agencies appropriations bill on September 5, 1996, several
of my colleagues made statements about language contained in the report
accompanying the bill that directs HUD to expend the limited funds
available for the Fair Housing Initiative Program [FHIP] only on such
forms of discrimination as are explicitly identified under title VIII
of the Civil Rights Act.
The Fair Housing Act makes no mention of property insurance. A
reading of the legislative history of the act will disclose that
Congress intentionally left out property insurance because insurance is
a State regulated activity. Since the States regulate property
insurance and have laws and regulations addressing unfair
discrimination in property insurance, it was our conclusion that this
is one area where HUD does not need to expend its resources.
Moreover, the report language was included in response to testimony
from the Department of Housing and Urban Development stating it had
limited resources available for the FHIP Program. It was our thought
that HUD should use its limited resources to address only those areas
specifically mentioned in the law that include the sale, rental, and
financing of housing and in the provision of brokerage services.
Throughout all of its efforts and funding of outside groups to
investigate insurance practices, it is interesting that neither HUD nor
the private groups it funds with public money have been able to produce
one individual who has failed to purchase a home because insurance was
denied to that person. So much for ``no insurance, no loan, no house.''
In a statement released September 11, 1995, Max Boozell, the Illinois
director of insurance, stated,
I am very disturbed by the contention that major homeowner
insurance companies are redlining in Chicago. To the
contrary, our 1994 study of homeowners insurance not only
reflects a healthy, viable urban insurance market in
Illinois, but provides no hard evidence of institutional
redlining by any Illinois insurer.
Nor is this a civil rights debate as many would have us believe.
Activities of the Justice Department under the Fair Housing Act have
not been curtailed, nor does the inclusion of this report language
impact the application to property insurance practices of section 1981
of the U.S. Code, which prohibits racial discrimination in the
provision of insurance and other services under contract.
Nowhere in the Fair Housing Act is property insurance mentioned. More
than 50 years ago, Congress wisely decided that, in the area of
insurance regulation, the States should be spared Federal interference.
Under the McCarran-Ferguson Act of 1945, Congress explicitly provided
that, unless a Federal law ``specifically relates to the business of
insurance,'' that law shall not be deemed applicable to insurance
practices. By applying the Fair Housing Act to insurance, HUD simply
disregards the fact that the law does not ``specifically relate to the
business of insurance.''
Mr. President, the courts are divided on this issue. It was
disappointing that the Supreme Court failed to grant certiorari in the
case of Nationwide Mutual versus Cisneros. The Court could have
resolved the conflict that now exists in 2 circuits out of our 13
Federal circuit courts. The two courts that have found that the Fair
Housing Act applies to property insurance practices have relied on
HUD's regulations, which, without any statutory authority, refer to
discrimination in property insurance. In other words, HUD did not have
a law, so the bureaucrats got to work and created one through
regulations.
There is simply no justification for HUD continuing to expend funds
for insurance regulatory activities that duplicate comprehensive State
regulation at the expense of the American taxpayer. HUD would do better
to work within the framework of the law with its limited resources.
OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT
Mr. BOND. Mr. President, the conference report to H.R. 3666, the VA/
HUD Fiscal Year 1997 Appropriations Act, included an amendment by
Senator Bennett, that requires GAO to audit the operations of the
Office of Federal Housing Enterprise Oversight [OFHEO] concerning staff
organization, expertise, capacity, and contracting authority to ensure
that the resources are adequate and that they are being used
appropriately to ensure that Fannie Mae and Freddie Mac are adequately
capitalized and operating safely. As Senator Bennett previously
advised, OFHEO is over 2 years behind in developing risk-based capital
standards which are intended to ensure the financial safety and
soundness of these Government-sponsored entities. Senator Bennett
further advised that OFHEO needs to refocus its activities, away from
such activities as trips abroad, to ensure that these critically needed
risk-based capital standards are developed and operative.
I also am very concerned over OFHEO's lapse in its responsibility for
the timely development of these risk-based capital standards, and I
urge OFHEO to expedite these necessary rulemaking requirements. I also
advise that the Housing and Community Development Act of 1992
established OFHEO as an independent office in HUD and not as a new
Federal agency. Nevertheless, in a time of Government downsizing, OFHEO
continues to request additional staff and funding, while focusing on
activities other than its primary responsibility to promulgate
financial safety and soundness rules.
The 1992 housing bill, which I worked on, intended OFHEO, as a
practical matter, to be a tripwire to alert Congress and the Nation to
any significant financial risks that may be confronting Fannie Mae and
Freddie Mac. This is a critically important function and OFHEO's
primary function--I do not think that anyone intends or expects OFHEO
to become a new agency or act as a political entity. I expect the GAO
audit to lend some perspective to OFHEO's purpose, its ability to
perform its purpose, and recommend ways to streamline and ensure
OFHEO's capacity and expertise will meet its rulemaking and regulatory
functions.
drinking water health effects research
Mr. BOND. Mr. President, since completion of the VA-HUD conference,
some confusion has arisen as to funding of drinking water health
effects research. First, let me state unequivocally that I strongly
support funding for drinking water health effects research to ensure
that rules governing drinking water quality are based on the best
science and result in cost-effective protection of public health. As a
member of the Environment and Public Works Committee, I advocated
amending the Safe Drinking Water Act to change the standard setting
process and improve the scientific basis for regulations.
As chairman of the VA, HUD, and Independent Agencies Appropriations
Subcommittee, I have worked to fund fully the new State revolving fund
program for the construction of drinking water plants. The conference
report before us includes $1.275 billion--$550 million as requested by
the President, and
[[Page S11225]]
an additional $725 million to restore funds previously appropriated for
this program but released last month for clean water SRF's.
Unfortunately, delays in enactment of the Safe Drinking Water Act
amendments precluded in VA-HUD subcommittee's consideration of the many
additional funding requirements associated with implementation of this
legislation.
However, the conference agreement acknowledges that the new
legislation will require resources, and states ``the conferees expect
EPA to address any funding requirements for implementation of [this]
important statute, such as drinking water health effects research, in
the agency's operating plan.''
Funding for drinking water health effects research--outside of the
amounts included in the science and technology account--was not in
either House or Senate version of the VA-HUD bill, and hence was not an
issue in conference. While I object to off-the-top setasides from State
revolving funds, I fully support funding for health effects research
from the science and technology account, which funds all of EPA's
research activities. Should EPA propose to increase the relative
priority for health effects research as part of its operating plan, and
request additional funding for such research within the $542 million
appropriated for science and technology, it is my expectation that this
would be favorably received.
In conclusion, I encourage EPA to consider carefully the funding
requirements associated with this new legislation, and propose a
redirection of funds for these important activities within the $6.7
billion fiscal year 1997 appropriation.
coordinated tribal water quality program
Mrs. MURRAY. Mr. President, I want to thank the subcommittee for its
hard and diligent work on this bill. In particular, I appreciate the
earmark of $500,000 for the Coordinated Tribal Water Quality Program
for fiscal year 1997.
This program began in 1990 when the 26 tribes and tribal
organizations in Washington State came together with a cooperative
intergovernmental strategy to accomplish national clean water goals. As
a result of Federal court decisions, the State of Washington has
recognized the tribes as comanagers of water quality in the State. This
program has been an effective tool for leveraging scarce public funds
to create viable, watershed-based water quality protection plans.
It is my understanding that the $500,000 earmark in the committee
report is not intended to preclude the Coordinated Tribal Water Quality
Program from receiving the needed additional $2 million from the
Environmental Protection Agency's existing funds under section 104(b)3
of the Clean Water Act.
Mr. BOND. Mr. President, the Senator from Washington is correct. The
earmark is intended to be a floor from which the EPA may supplement the
Coordinated Tribal Water Quality Program. The additional funding will
allow the tribes to fulfill their roles as comanagers of water quality
in Washington State.
Mrs. MURRAY. I thank the distinguished Chairman for this
clarification.
The PRESIDING OFFICER. Pursuant to the previous order, the conference
report accompanying H.R. 3666, the VA-HUD appropriations bill, having
been received, the conference report is agreed to, and the motion to
reconsider is tabled.
The conference report was agreed to.
Mr. GORTON. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. KENNEDY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KENNEDY. I ask unanimous consent to proceed for 5 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________