[Congressional Record Volume 143, Number 140 (Thursday, October 9, 1997)]
[Senate]
[Pages S10733-S10751]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEPARTMENTS OF VETERANS AFFAIRS, HOUSING AND URBAN DEVELOPMENT, AND
INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1998--CONFERENCE REPORT
Mr. BOND. Mr. President, I submit a report of the committee of
conference on the bill (H.R. 2158) making appropriations for the
Departments of Veterans Affairs and Housing and Urban Development, and
for sundry independent agencies, commissions, corporations, and offices
for the fiscal year ending September 30, 1998, and for other purposes,
and ask for its immediate consideration.
The PRESIDING OFFICER. The report will be stated.
The legislative clerk read as follows:
The committee of conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
2158) 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 Senate proceeded to consider the conference report.
(The conference report is printed in the House proceedings of the
Record of October 6, 1997.)
Mr. BOND. Mr. President, I yield myself such time as I may require.
The PRESIDING OFFICER. The Senator from Missouri.
Mr. BOND. Mr. President, I am pleased to present the Senate with the
conference report accompanying H.R. 2158. The bill provides a total of
$90.7 billion in new budget authority, including $21.5 billion in
mandatory spending, which is $855 million less than the President's
request.
As with most legislative activity in this body, the bill is not
perfect, but I do think it reflects a very balanced approach to a
number of particularly difficult funding and policy decisions. In
achieving that balance, I owe a special debt of gratitude and express
my sincerest thanks to my hard-working ranking member, Senator
Mikulski, whose cooperation, guidance, and wise counsel has helped to
craft a consensus in reaching many of these difficult decisions.
We have done our best to ensure that both the spirit of the budget
agreement and the highest priorities of the President have been met
without jeopardizing key programs, such as veterans' medical care and
the space program which were not protected in the budget agreement.
For the VA, the highest priority in the VA-HUD conference report is
afforded to veterans' programs which total $40.45 billion and veterans'
medical care in particular. The conference report provides
$17,060,000,000 for VA medical care, which is $100 million more than
the President's request and more than $300 million above the amount
assumed for veterans' medical spending in the budget agreement. This
level should ensure continued care to all eligible veterans and
continued improvements to the VA medical system. Increases also are
provided for the State Nursing Home Program construction and research.
For the Department of Housing and Urban Development, the conference
report provides close to $25 billion for fiscal year 1998, including
full funding of $8.2 million for section 8 contract renewals as
provided through the budget resolution.
Other key programs include $310 million for drug elimination grants;
$1.5 million for HOME; $4.7 billion for community development block
grants; $600 million for the Native American Block Grant Program; $823
million for homeless assistance programs; $35 million for Youth Build;
$25 million for Brownfields; and $138 million for the economic
development initiative.
Unfortunately, we were unable to fund the preservation program due to
the high cost of the program, reported
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fraud and abuse, and HUD's lack of capacity to administer the program.
To continue the program would cost some $2 billion over the next
several years. Therefore, we have included instead $10 million to
reimburse costs expended by project owners and nonprofit and tenant
purchasers under the program.
This bill also authorized enhanced--or ``sticky''--vouchers which
will protect tenants from being forced to move if an owner chooses to
prepay a mortgage and higher rents are charged.
Mr. President, I also point out that we have worked with the
Department of Housing and Urban Development and colleagues in the
authorizing committee to craft an ongoing solution to the high-cost
rental program under multifamily projects in a program known as mark-
to-market.
We believe that the Senate's position, which finally has been
accepted by the House, to deal with these programs to provide a
continuation of housing services to those residents in particularly
elderly and other projects funded under a multifamily basis, is the
best approach to dealing with what otherwise would be a budgetary
nightmare and potentially totally disruptive to the residents.
For EPA, the conference report provides $7.4 billion for fiscal year
1998, an increase of over $400 million over fiscal year 1997; and an
additional $650 million for fiscal year 1999 for the Superfund program.
The appropriation includes $3.3 billion for the operating programs, an
increase of $200 million or 6 percent over fiscal year 1997.
State revolving funds would receive a total of $2.075 billion,
including $1.35 billion for clean water and $725 million for drinking
water. The President's proposed reduction of $275 million from the
clean water State revolving fund was fully restored.
For Superfund, the conference report includes $2.1 billion, an
increase of $750 million over the current level. This funding includes
an advance appropriation of $650 million to be made available on
October 1, 1998, so long as a Superfund reform bill is enacted by May
15, 1998. This reflects the budget agreement which assumed this
additional funding only upon a comprehensive reform of the Superfund
program.
In addition, given the priority the administration places on funding
for Boston Harbor, the conference report provides $50 million, which is
$27 million more than proposed by the House.
For NASA, the conference agreement recommends $13.6 billion, the same
amount as proposed by the House and an increase of $148 million over
the Senate level and the administration's budget request. This amount
will help NASA deal with the recent problems with the space station
program without jeopardizing critical programs, such as space science,
earth science, and aeronautics.
For the National Science Foundation, appropriations would total
almost $3.5 billion, a $60 million increase above the budget request.
This funding includes an additional $40 million for plant genome
research. Mr. President, this new comprehensive initiative is critical
to the future of U.S. crop production, the ability of our strong
agriculture sector to provide the food and fiber needed in this country
and the world.
For the Federal Emergency Management Agency, this agreement
recommends $830 million, including $320 million for disaster relief and
$30 million for a new predisaster mitigation grant program intended to
improve the Nation's ability to reduce the costs and impacts of natural
disasters, particularly in communities with significant disaster risks.
For the National and Community Service Program, funding is $425.5
million, an increase of $25 million over the current year. Despite
continued concerns many of us have with this program, we have
acknowledged the priority the President has placed on the program. And,
in addition, the $25 million is targeted directly to the critical issue
of child literacy.
Community development financial institutions are provided $80
million. While this funding is $45 million less than the President's
request of $125 million, the conference report funding represents a
compromise which reflects significant concerns raised in the last
several months over the lack of administrative capacity and
accountability at CDFI, including concerns relating to the contracting
of services. We expect that the Treasury Department will continue to
put in systems, procedures and policies that will ensure that the CDFI
program will be administered appropriately in the future.
As I said before, on the section 8 mark-to-market reforms, title V of
the bill provides, beginning in fiscal year 1999, a comprehensive
reform program that provides a mortgage and rent restructuring program
to reduce the costs of oversubsidized section 8 multifamily housing
properties insured under the FHA. Under this mark-to-market program,
FHA-insured properties with above-market rents are eligible for debt
restructuring to reduce the rent levels to market-rate rents or the
project base rents needed to support operations and maintenance.
In response to concerns about HUD's capacity, the legislation shifts
the management, administration, and restructuring of the portfolio to
capable local entities with a public purpose. In most cases, State and
local housing finance agencies will be responsible for the
restructuring of projects and consultation with project owners, the
tenants and the affected community.
In addition, the legislation requires the continuation of project-
based assistance for projects that serve elderly and disabled families,
thus ensuring the availability and affordability of low-income housing
for the elderly and disabled.
I note that a number of provisions, some of which I do not support,
were added in conference to ensure the passage of the bill in both the
House and the Senate and to promote signing by the President.
In addition, we reached a number of accommodations with the White
House with the cooperation and assistance of Senator Mikulski,
Congressman Stokes, Congressman Obey, and other members of the
conference. We are grateful for their assistance.
I yield to Senator Mikulski for her opening statement.
Ms. MIKULSKI. Thank you very much, Mr. Chairman.
The PRESIDING OFFICER [Mr. Inhofe]. The Senator from Maryland.
Ms. MIKULSKI. Thank you, Mr. President.
I rise today to join my very distinguished colleague, the Senator
from Missouri, to offer for the Senate's consideration the conference
agreement on the VA-HUD bill.
This bill contains $99 billion--$99 billion--in outlay spending, of
which almost $20 billion is in mandatory spending. This isn't just
about numbers though. And it will not be about statistics; this is
about people.
The VA-HUD bill is probably one of the most complex that comes before
the Senate. In terms of dollar amounts, it ranks up there with defense,
and it ranks up there with the Labor, Health and Human Services budget.
What it does in terms of dollar amounts, though, is it really is
focused on two policy objectives. No. 1, how do we respond to the day-
to-day needs of our constituents, those veterans who need health care
or access to a mortgage, or constituents who need housing, whether it
is housing for the elderly, or housing for neighborhoods trying to
rebuild themselves, or in response to the need for emergency
assistance?
At the same time, this subcommittee gets America ready for its
future. It is significant in public investments in science and
technology. That is where we have tried to make wise and prudent
choices, on how we respond to the day-to-day needs of the American
people and at the same time help our country get ready for the future.
I believe that, working on a bipartisan basis, we have been able to do
this.
I thank my colleague, Senator Bond, for the collegial manner in which
he and his staff have worked with my staff and myself to craft a
bipartisan bill that represents the best interests of the American
people.
I am very pleased to say that when it has come to meeting the health
needs of our veterans, whether it has been making sure that the housing
needs are met, and at the same time whether it is our space program or
our investments in information technology, we have not played politics.
Isn't this what the American people want us to do? For the people who
risked their lives at Iwo Jima, Pork Chop Hill, Desert Storm, the
Mekong delta, they want us to get out there and get up every day and
see how we
[[Page S10735]]
can be responsible in meeting their needs and not play politics with
their needs. Well, we looked at people who need public housing or
subsidized housing, how we can ensure that housing is not a way of life
but a way to a better life. Isn't that what the American people want us
to do?
When they look to not only the Stars and Stripes, but they look out
there to the stars of the universe, they want the United States of
America to lead the way. They do not want us to play politics with our
space program. And we have not done that.
At the same time, they know a new century is coming, a new economy is
on its way. We need groups like the National Science Foundation, in its
investments in information technology and other basic scientific
research, to do that basic research which the Federal laboratories and
our universities are best at, so that we can then turn to the private
sector to value add where public investments in publicly funded
research will lead to the private-sector jobs. And they do not want us
to play politics with that. And guess what? We did not.
So, Mr. President, as we come before you with this VA-HUD bill, I
think that is what we have done. We have moved this legislation
forward. I think the numbers speak for themselves.
We have provided $300 million more for VA medical care than the
budget agreement because we said, ``Promises made should be promises
kept to our veterans.''
We wanted to be sure that the VA medical research could continue to
be funded in a way that meets the important practical clinical research
that is important. I am so pleased that we are going to be doing
research on gulf war syndrome. I am particularly pleased that we have
the set-aside for both Parkinson's disease and prostate cancer. With
quality VA medical care and research, we are providing real help for
real people.
When we look at our housing and urban development, we once again make
sure that we adequately fund the very successful program that funds
housing for the elderly in our local communities.
This committee was concerned, though, about two things. First, we
were concerned that the way section 8 was being funded could
inadvertently result in yet one more unfunded liability to taxpayers
and a hollow opportunity for the poor. The Senator from Missouri,
Senator Bond, has been an architect of reform in this area. I have
noted with great pleasure the way he worked with the administration in
terms of fashioning a compromise where we meet our fiscal and social
responsibility simultaneously.
We also fund something called HOPE VI which says that public housing
should not be a way of life but a way to a better life. We have come up
with not only a new physical infrastructure, but a new social
infrastructure that says, if you get a subsidy, you have to get
yourself, your family, and your community ready for the future because
it mandates that you must be in job training and it mandates also that
you must be engaged in community service in your own area.
This way we build the capacity of the individual, we build the
community in which that individual lives, and we get value not only for
the taxpayer, but the lives of residents will be transformed forever.
Again, this committee provided real help for real people. This year,
when we looked at the environment, the President's request had many
items we worked on, from Superfund to Brownfields, clean air to clean
water. What we have been able to do is not only work on these issues,
but also lay the groundwork for the research that needs to be done to
be sure that we have sufficient science for a regulatory framework.
I am very grateful for the response of the Senator from Missouri when
I came to him when Maryland was hit by a terrible tragedy in which we
had a fish kill over on our Eastern Shore. We had thousands of fish
die. Our great medical community was concerned that it was having a
dire effect on the physical and public health of our community.
Before we responded inappropriately, we felt that we needed to have
our Federal laboratories engaged so that they could support not only
Maryland, but other affected States like Virginia and North Carolina,
so we could come up with wise solutions to protect public health and
also maintain the community.
I want to thank Senator Bond for responding to my request for $3
million that will fund EPA to find a solution to a problem called the
pfiesteria, an ``X Files''-like organism that goes from a vegetable to
an animal and then attacks fish in a vicious way. What we are able to
do now is to provide the best science to come up with the best
solutions to be able to protect lives, protect the Chesapeake Bay, and
protect our economy. I want to thank the Senator for responding to that
because it was a last-minute, but certainly a much needed request.
In NASA, we also talked about how we maintain our core programs--
safety for the shuttle, we will fly high in the space station, and we
will once again have adequate funding for Mission to Planet Earth.
While we study the great universe, we also need to look back on the one
planet where we do believe there is intelligent life, and that is our
own dear planet Earth. Thanks to this we will be able to study our
planet as if it were a distant planet and come up with new ways of
doing business, where we can predict earthquakes, where we can predict
floods, where we can predict famine, and using the tools of science, we
can help countries all over this planet be able to protect themselves
from either the dire effects of nature or the dire effects that we
bring upon ourselves.
I am also particularly pleased that, once again, the chairman
responded to a request from both the administration and from this side
of the aisle to maintain the National Service Program. This is a
program where we ask young people to volunteer in their communities,
and while they are doing that, receive a voucher to reduce their
student debts, and at the same time give back to their community.
There are many aspects of this bill which we could elaborate on, but
the one that we probably have to respond to most immediately is the
Federal Emergency Management Agency. FEMA is the 9-1-1 agency for the
American people. Unfortunately, just about every Senator's State had a
call on FEMA. We were able to respond to that, and once again, we
worked on a bipartisan basis. What we are also going to do now is to
practice the three R's of emergency management: readiness and
preparedness, response when a disaster hits, and restoration. Only this
time when we restore, we are not going to only restore, we will take
steps to help communities reduce the impact from future natural
disasters like hurricanes and floods.
Mr. President, we could talk about the legislation, but what I am
here to say today is that what we have done in this subcommittee is
that we have responded to the needs of the American people, we have
gotten ourselves ready for the future, we have been fiscally
responsible, and we have done it on a bipartisan basis. At the end of
the day, I don't think we can do better than that. I will be able to go
back to my constituents in Maryland and say, ``We think we have done a
good job for you. We think we have done a good job for America.''
I thank Senator Bond and his staff for the way they worked with us,
particularly John Kamarck, Carrie Apostolou, and a wonderful detailee,
Sarah Horrigan. I also want to thank my staff, Andy Givens, David
Bowers, and also another detailee, a science whiz kid like Sarah, Stacy
Closson, who came to us to learn about how the Senate works, while we
have a better insight into how science works.
Mr. President, I think that concludes my remarks. I yield the floor
and I will look forward to the passage of the bill.
The PRESIDING OFFICER. The Senator from Washington.
Mr. GORTON. Mr. President, my remarks are directed at the two
distinguished managers of the bill, and I hope they will be able to
respond to the concerns I am about to raise.
On July 22, while this bill was being debated on the floor of the
Senate, I shared with the Members of the Senate a series of scandals
across Indian country with respect to a housing program for low-income
Indian reservation residents. The scandal occurred in my own State in
Washington in the construction of a 5,000 square foot, $400,000 home
under this low-income program for the chairman of the housing council
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of the particular tribe, and similar activities in other reservations
across the country in which money had been misused not for the benefit
of low-income Indians on reservations but for the benefit of the people
who were managing the money themselves, most of whom were above average
in income.
As a result of that set of facts, themselves a result of a long
investigation on the part of the Seattle Times, the Senate unanimously
passed an amendment that says ``The Secretary of Housing and Urban
Development shall bar any person from participating in any activity
under the native American housing block grants program under title I of
the Native American Housing Self-Determination Act of 1996 or any
activity under the jurisdiction of the Department of Housing and Urban
Development where such person has substantially, significantly, or
materially violated the requirements of any such activity. The
Secretary shall pursue reimbursement for any losses or costs associated
with these violations.''
Now, Mr. President, the two managers were delighted to accept that
amendment. The Senator from Missouri told me a week or so ago that the
House was greatly resistant to these provisions and that he greatly
feared he would have to drop them. In fact, he has done so, Mr.
President. I simply would like to get his explanation as to why Members
of the House of Representatives seem to feel that someone can
``substantially, significantly, and materially violate the requirements
of the law'' and suffer no consequences for doing so?
This seems to me to be a ratification of this widespread fraud. At
least two people working for the Department of Housing and Urban
Development were transferred, another has been forced into early
retirement as a result. But why is it that a simple prohibition against
what amounts to total fraud--effectively stealing not just the money of
the people of the United States, but of poor members of these tribes,
now is suddenly dropped from the bill?
What sanction contained in this amendment was regarded as so
obnoxious by Members of the House of Representatives, I ask my
distinguished friend and chairman, that they refused to include it in
the final bill?
Mr. BOND. Mr. President, to respond to my good friend, I first
commend him for calling attention to some of the abuses that occurred.
When we accepted on the floor his proposal, it was in light of the
abuses and the problems that were uncovered. As I have advised my
colleague from Washington, the House had grave concerns about the
breadth of this issue, fearing that it might bar not only people
actively engaged in fraud but people with other problems in their
background or in other time periods or in other areas. I cannot do a
good job of explaining their objection because it was not my objection.
We were unable to include it because we did not have adequate support
from our side to overcome the resistance of their side.
I point out to my colleague from Washington that HUD currently has
authority under this program to address fraud and abuse in this program
and they have assured us that they will.
Having said that, Mr. President, I assure my friend from Washington,
I am from Missouri, and assurances--frothy substances do not satisfy
me; I am from Missouri, and you must show me.
I expect that the new Native American Housing Block Grant Program
which is under consideration in the Banking Committee will include
program administrative and oversight requirements. At this point we
must defer to the Banking Committee which is currently looking at
native American housing block grant reforms as part of a HUD extender
bill which would extend the authorization of a number of the programs
such as FAA and multifamily risk programs. We expect this bill will be
considered by the House and the Senate before the end of the session.
I hope there would be an opportunity once again, for the Senator from
Washington to address the very real concerns he noted.
Mr. GORTON. Mr. President, I appreciate those expressions on the part
of my friend from Missouri and I emphasize that I know he supported
this provision and that he did his best to keep it included in the
bill.
I hope that at some future time in authorizing legislation or
otherwise we will be able to do something similar to this. I, too, have
heard the assurances of the Department of Housing and Urban Development
that this will not happen again, but we have gotten those assurances in
the past without them having been carried out.
I summarize by saying how anyone could say that a person who ``has
substantially, significantly, or materially violated the requirements''
of this law should somehow or another not even receive so much as a tap
on the wrist and should be allowed to go on doing in the future what
that person has done in the past, is beyond my understanding. I am
sorry this is not in the bill. I don't think the excuses of its
opponents and the House conferees are adequate in the slightest, but I
do know that the chairman and the ranking minority member sympathize
with me on this and will support us as we continue on a crusade for
honesty and straightforward dealing and using this money for the
purposes for which it was intended. I know they will support that in
the future.
Mr. BOND. Mr. President, I thank the Senator from Washington for his
comments.
MULTIFAMILY ASSISTED HOUSING REFORM
Mr. D'AMATO. Mr. President, I wish to express my strong support for
the inclusion of the Senate's ``Mark to Market'' reform legislation in
the Fiscal Year 1998 VA-HUD Appropriations Conference Report. The
conference report effectively incorporates The Multifamily Assisted
Housing Reform and Affordability Act of 1997 (S. 513), as passed by the
Banking Committee and full Senate with minor modification.
This legislation averts a serious affordable housing crisis by
restructuring the Department of Housing and Urban Development's [HUD]
Federal Housing Administration [FHA] insured section 8 project-based
assisted portfolio. This legislation will save taxpayer money by
reducing above-market rents on section 8 properties, will protect
residents, and will help maintain a stock of affordable housing which
will remain available for the future. The financial viability of
assisted projects will be protected by refinancing and restructuring
mortgages which are insured by the FHA.
I salute my friend and colleague Senator Connie Mack, Chairman of the
Subcommittee on Housing Opportunity and Community Development, for his
outstanding efforts in crafting this legislation and ensuring its swift
enactment. Through his extraordinary leadership this legislation has
been developed in a bipartisan, measured and thoughtful manner. I thank
my friend Senator Kit Bond for the critical role he played in the
development of this bill as a member of the Banking Committee in the
last Congress and for his leadership as chairman of the VA-HUD
Appropriations Subcommittee in bringing this measure to final passage.
Mr. President, this legislation is supported by a broad range of
interest groups including resident organizations, owners, nonprofit
housing associations, the National Governors Association, the National
Affordable Housing Management Association, the National Housing
Conference, the National Association of Home Builders, and the National
Council of State Housing Finance Agencies. The New York Housing
Conference and the New York State Tenants and Neighbors Coalition have
been instrumental in the development of this bill and I thank them for
their valuable input and support.
This legislation addresses the escalating costs of the HUD section 8
program and achieves fiscal year 1998 savings of $562 million.
Importantly, this legislation will save the American taxpayer $4.6
billion over the next 10 years by reducing exorbitant rents in the
section 8 program. At the same time, the legislation will protect the
FHA multifamily insurance fund from losses due to defaults. The
mortgage restructuring provisions contained in this bill will allow
projects to continue to operate effectively with reduced rent levels.
Mr. President, millions of needy Americans depend on section 8
housing to provide them with affordable shelter. The average income of
these families, elderly and disabled persons is similar to those in
Federal public housing--approximately 17 percent of the
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local area median income. In addition, over 35 percent of these persons
are elderly. Many more are disabled or families with children. It is
essential that we protect these residents.
Mr. President, the legislation protects residents from displacement
and provides them with a meaningful voice in the restructuring process.
Resident involvement is essential to prevent physical deterioration of
buildings, identify criminal activity and threats to health and safety,
and contribute to the long-term viability of the affected buildings and
communities. The legislation provides for a strong role on the part of
residents to participate in activities such as the determination of
eligibility for restructuring, decisions to renew project-based
contracts, the formation of the rental assistance assessment plan,
capital needs and management assessments, and physical inspections.
In addition, resident involvement in the decisions which affect their
communities and lives will be further ensured by the selection of
resident-friendly participating administrative entities [PAE]. The
legislation mandates that any organization selected as a PAE must have
a demonstrated track record of working directly with residents of low-
income housing projects and with community-based organizations. It is
imperative that these PAE's provide for resident input that is
meaningful. This will be achieved by the PAE providing residents
timely, adequate and effective written notice of proposed decisions,
timely access to relevant information and an adequate time period for
analysis and provision of comments to the PAE and HUD. The PAE and HUD
will take into account resident comments in a thoughtful and
constructive manner.
Mr. President, the bill seeks to preserve affordable housing
throughout our nation for the benefit of current and future residents.
Criteria have been developed to assess whether a project should
maintain project-based assistance or be converted, in whole or in part,
to tenant-based assistance. Projects in disrepair will be
rehabilitated, where feasible, and their proper maintenance will be
ensured. The legislation contains important new enforcement tools for
HUD to employ to crack down on fraud, waste and abuse by unscrupulous
landlords. Landlords who break the rules will be banned from the
program. New protections against equity skimming, as well as expanded
civil money penalties will greatly assist efforts to eliminate owners
who have cheated the Federal Government. In addition, the legislation
refocuses HUD's efforts on oversight and enforcement. By devolving the
primary responsibility for conducting mortgage restructurings to the
State and local level, HUD staff will be able to concentrate on rooting
out abuses within the system.
Rents on restructured properties will be set at local market rates
based on comparable properties, or where comparables are unavailable,
at 90 percent of HUD's Fair Market Rent [FMR]. The legislation provides
that up to 20 percent of a given PAE's inventory may receive budget-
based rents, capped at 120 percent of FMR, in order to maintain the
financial viability of the projects.
The HUD Secretary may waive the 20 percent limitation upon a
demonstration of special need. Report language accompanying The
Balanced Budget Act of 1997 (S. 947), which passed the Senate on June
25, 1997, states:
The Committee expects that the Secretary shall utilize this
important discretionary tool to address the unique
circumstances of various communities and regions throughout
the nation. The Secretary should consider relevant local or
regional conditions to determine whether good cause exists in
granting such a waiver. Such factors should include, but
should not be limited to: (1) whether the jurisdiction is
classified as a ``high cost area'' under other federal
statutes or programs; (2) prevailing costs of constructing or
developing housing; (3) local regulatory barriers which may
have contributed to increased development costs; (4) State or
local rent control or rent stabilization laws; (5) the costs
of providing necessary security or services; high energy
costs; the relative age of housing in a jurisdiction; or (6)
other factors which may have contributed to high development
or operational costs of affordable housing in a given
jurisdiction.''
By providing a priority to State and local housing finance agencies
[HFA] to serve as PAE's, we recognize and build upon the increasing
financial and housing management expertise of these public entities.
HFA's are accountable to State and local governments and the public and
are dedicated to increasing the availability of affordable housing. In
addition, they have extensive experience with the section 8 portfolio
itself and will be able to leverage additional resources for its
benefit.
Mr. President, this legislation protects the interests of the Federal
taxpayer, the security of our residents and the future of affordable
housing. It is with great pride that I commend my colleagues in the
Senate for working together to avoid the social and fiscal crisis which
would have occurred had HUD's multifamily inventory not been reformed.
This legislation was carefully crafted with the spirit of
bipartisanship for over 2 years. I salute all who contributed to this
important and essential effort and support immediate passage.
MARK TO MARKET REFORMS
Mr. D'AMATO. Mr. President, I would like to engage in a colloquy with
the distinguished chairman of the VA-HUD Appropriations Subcommittee,
Senator Kit Bond, for the purposes of clarifying the intent of the VA-
HUD Conferees in regard to several aspects of the section 8 reforms
included in the conference report.
First, I would like to clarify the intent of the conferees regarding
determination of market rent levels. In my home State of New York,
there are some 1.2 million apartments which are covered by State rent
control and rent stabilization laws. It is particularly important that
the participating administrative entities [PAE] which conduct mortgage
restructurings in New York have the flexibility to consider the rents
of these apartments, particularly those subject to rent stabilization
or rent control regulation, in making determinations of market rents.
Mr. President, I note with regret that the Fair Market Rent [FMR]
System currently used by HUD has numerous flaws, especially when
applied to a metropolitan area as large and diverse as New York City
and its surrounding suburbs. For instance, HUD utilizes a single Fair
Market Rent estimate for the entire municipality which fails to take
into account the various differences in true market rents between such
disparate markets as Queens, Brooklyn, Manhattan, and Rockland County.
These markets are vastly different, but HUD's FMR system does not
reflect these variations.
This legislation, which originated in the Banking Committee, takes
into account the shortcomings and limitations of the FMR System.
Instead of relying on this flawed system, the bill adopts an approach
which would allow participating administrative entities to estimate
true market rents based on comparable properties. While it is true that
rent levels which are subject to State and local rent regulation may
not fully reflect true market rents, nevertheless they can often form
the basis for estimating such true market rents. Indeed, many rent
stabilized apartments in New York City are far closer to true market
rent levels than HUD's FMR estimates.
Mr. President, I thank the conferees for including legislative
amendments to the original Senate bill, S. 513, in the final
legislation which will allow participating administrative entities to
consider rent stabilized units for the purposes of estimating local
market rents. I would ask my friend, Senator Bond, if my statements are
consistent with the intent of the conferees?
Mr. BOND. Mr. President, my friend Senator D'Amato, the chairman of
the Committee on Banking, Housing and Urban Affairs, is entirely
correct. His statements are consistent with the intent of the conferees
to devolve decisionmaking responsibility to the State and local level.
Clearly, the conferees recognize that participating administrative
entities in some jurisdictions may find it necessary to take into
account rents on units which are subject to local rent stabilization
regulations in order to determine comparable market rent levels.
The conferees are mindful of the unique circumstances of New York
rental markets. For that reason, the legislation was crafted to allow
the consideration of rent stabilized apartments within the definition
of comparable properties for the purposes of determining market rent
levels.
[[Page S10738]]
Mr. D'AMATO. Mr. President, I thank the distinguished Senator for his
clarifying remarks. I would ask for one additional point of
clarification.
Mr. President, the section 8 reform provisions include a mandatory
renewal of project-based assistance for restructured properties which
have a significant number of elderly or disabled persons, or which are
located in tight rental markets, such as New York City. In addition,
there is a local option to replace project-based assistance contracts
with section 8 vouchers, after completion of a rental assistance
assessment plan by the PAE with meaningful consultation with the owner
of the affected project.
This plan, as with all aspects of the overall mortgage restructuring
and rental assistance sufficiency plan, shall also be developed with an
opportunity for meaningful input by the affected residents as well. It
is imperative that residents be kept informed of the process for
mortgage restructuring and the possibility of receiving tenant-based
assistance, and be offered ample opportunity to voice their preferences
as to the type of assistance provided. It would not be outside the
authority of the PAE to conduct a survey, on a project-by-project
basis, as to resident preferences in this regard.
Mr. President, I would like to emphasize the role of State and local
decisionmaking in making this determination. It is not the intent of
the drafters of the legislation that HUD attempt to micromanage or
second-guess the determination of the PAE. Neither is it their intent
that the HUD implementing regulations include one-sided interpretations
of the statutory language which will force a preference for tenant-
based assistance upon the local decisionmakers. The criteria are
intentionally objective and neutral and the final decision for applying
them rests at the local level.
In addition, in interpreting these criteria, the participating
administrative entities should, to the fullest extent possible,
consider the local experience of the various forms of housing
assistance. For instance, the PAE should consider the actual
effectiveness of tenant-based assistance. In many cases, voucher-
holders are unable to utilize their vouchers. In many areas too,
voucher-holders often find their choices constrained to certain areas,
neighborhoods and projects. The lease-up rates and need to utilize
section 8 reserves in order to improve these rates by the local public
housing authorities would be relevant in determining the local
effectiveness of the voucher program.
Also, in determining the relative affordability of vouchers, the PAE
should consider whether a resident's rental contribution could rise
above 30 percent of his or her income. Recent data from HUD indicate
that a large percentage of voucher-holders pay more than 30 percent of
their incomes for rent, and many pay more than half of their incomes in
rent. This data is extremely disturbing. The rent burden of voucher-
holders is especially relevant in making these determinations. The PAE
could consider the impact of reductions in the FMR to the 40th
percentile of available units on tenant-choice and rent burden as well.
Whenever possible, the PAE should use local experience in making this
determination rather than relying on national averages, which often are
rendered meaningless when applied locally. PAE's should asses the need
for a stock of affordable housing which will be available on a long-
term basis, when judged in light of the housing needs identified in the
local consolidated plan. PAE's should consider the amount of
multifamily housing currently being developed in that area which is
affordable to low-income families.
Mr. President, it is imperative that PAE's consider the
characteristics of specific projects. For instance, a particular
project could contain a number of apartments with three or more
bedrooms in a geographic area where there is a dearth of such
affordable housing available to large families. In all cases, PAE's
should consider the long-term consequences of their decisions. I would
ask my friend, Senator Kit Bond, whether my statements are fully
consistent with the intent of the conferees?
Mr. BOND. Mr. President, the statements of the chairman of the
Committee of Banking, Housing and Urban Affairs are indeed consistent
with the intent of the conferees. Indeed, devolving responsibility and
decisionmaking to the State and local level is one of the primary goals
of this mark to market legislation. Not surprisingly, that is also the
reason for the priority in selecting State and local housing finance
agencies to be PAE's.
The decisions made by these entities will have long-term
consequences. The PAE's therefore should be granted great deference in
assessing the impact of these decisions on local housing markets. Also,
I would reiterate the Senator's statement on the importance of resident
and owner involvement in the decisionmaking process. We believe the
local PAE's will be in a better position to make these determinations
than Federal officials at HUD or the Office of Management and Budget.
Mr. D'AMATO. Mr. President, I once again thank my colleague for his
clarifying remarks and I offer my congratulations to him on the passage
of legislation which is fair, balanced and very effectively serves the
needs of the American people.
DISQUALIFIED PROPERTIES UNDER ``MARK-TO-MARKET''
Mr. SARBANES. Mr. President, I am pleased that the mark-to-market
legislation that is incorporated in the VA-HUD conference report
contains some measures that deal with properties that are disqualified
from the restructuring program. I believe that it is critical that
flexibility is provided to the participating administrative entity
[PAE] and HUD in dealing with disqualified properties. I am, however,
concerned about those properties that are not part of the mark-to-
market program but are disqualified from the renewal process.
Mr. MACK. I agree with Senator Sarbanes that this flexibility is
extremely important in dealing with disqualified properties and that
with input from local governments, communities, and residents,
hopefully some creativity can be used. I strongly believe that it is
important that the Federal Government terminate its relationship with
those owners who have abused the program and those properties where it
is simply infeasible to continue to subsidize. However, we should not
take a ``one-size-fits-all'' approach and ensure that the interests of
residents, communities, and local governments are carefully considered.
I am also concerned about those properties, not eligible for mark-to-
market, whose contracts are not renewed due to noncompliance actions by
owners or the poor physical condition of the property. I have some
reservations about HUD's policy to simply voucher out those properties
instead of exploring other creative options such as transfers or sales
to resident-supported nonprofit entities.
Mr. BOND. In addressing the Senators' concerns, it is my expectation
that the Secretary of HUD will use the same procedures outlined in the
mark-to-market legislation for those properties affected by the
nonrenewal policy. The Secretary should not only explore the use sales
or transfers to nonprofit organizations, but also allow these
properties to retain project-based assistance if the ownership or
physical condition problems are adequately addressed. I agree with
Senator Mack that under no circumstances should we continue to
subsidize bad landlords or bad properties, but that we need to be
careful about how we handle these situations.
CONFLICTS OF INTEREST UNDER ``MARK-TO-MARKET''
Mr. MACK. Mr. President, under the ``mark-to-market'' title that is
contained in the VA-HUD appropriations conference report, a strong
priority to public entities is provided to act as participating
administrative entities [PAE]. It is expected that qualified public
entities will handle most of the work under this program. However, in
instances where a qualified public entity is not available, the
Secretary of Housing and Urban Development [HUD] is provided
flexibility in selecting other qualified entities such as nonprofit and
for-profit entities.
To ensure that these entities do not use their positions as PAE's for
unfair financial benefit, the bill contains an important provision that
would prevent conflicts of interests by PAE's. It is my understanding
that this provision was included to permit the Secretary to establish
guidelines that
[[Page S10739]]
would prevent conflicts of interest by a PAE that provides financing or
credit enhancement as part of the restructuring process. Further, the
provision allows the Secretary to establish guidelines to deal with
other conflicts of interest issues that would prevent PAE's, especially
nonprofit and for-profit private entities, from using their roles as
PAE's in the restructuring program that go beyond the public purposes
outlined in the legislation.
I would like to ask Senator Bond if this is also his understanding of
the bill.
Mr. BOND. The Senator is correct. To handle the workload and
complexity of transactions under mark-to-market, a significant amount
of flexibility is provided to the PAE's. However, it is expected that
the Secretary establish strict and coherent guidelines to ensure that
PAE's do not go beyond their restructuring duties as intended under the
bill. To further prevent any abuses, the bill forbids private entities
that act as PAE's to share, participate in, or benefit from any equity
in the restructuring program. Last, it is expected that those most
affected by restructuring, namely residents, communities, and owners,
are involved in the process to protect the public interests.
SECTION 8 RENEWAL POLICY
Mr. MACK. Mr. President, I understand that the VA-HUD appropriations
conference report contains important renewal policy provisions related
to expiring section 8 contracts. I would like to ask Senator Bond if my
understanding is correct.
Mr. BOND. The Senator is correct. The bill provides renewal policies
for projects which undergo restructuring under the mark-to-market
program and those which do not.
Briefly, for fiscal year 1998, the conferees have approved a 1-year
extension of the basic rent renewal policies in section 211(b) of the
fiscal year 1997 VA-HUD Appropriations Act and the mark-to-market
demonstration program to cover contracts expiring in fiscal year 1998.
This means that projects which undergo restructuring under the
demonstration program--those with rents in excess of 120 percent of the
fair market rent [FMR]--will receive rents determined under the
restructuring plan. For projects that do not enter the demonstration
program, contracts will be renewed at rents in effect upon expiration,
but not to exceed 120 percent of FMR. The 120 percent of FMR limit,
however, does not apply to rents for certain exception projects
enumerated in the bill. These projects, which include section 202
elderly projects and publicly financed projects, for example, will be
renewed at existing rent levels.
The legislation also establishes permanent renewal policy for fiscal
year 1999 and beyond when the permanent mark-to-market program is
implemented. Projects which are subject to the program--those with
rents in excess of comparable market rents--will receive rents in
accordance with the restructuring plan. For projects that do not
undergo restructuring, the Secretary may provide section 8 assistance
for all units assisted by an expiring contract at rents up to
comparable market rent.
I also note to the Senator that to ensure consistency with the
permanent mark-to-market program, we expect that the Secretary will use
the definition of comparable market rents in section 514(g)(1) of title
V of the bill when establishing guidelines for the permanent renewal
policy.
Under the permanent renewal authority, there again will be certain
exceptions. Generally, these contracts would be renewed at the lower of
existing rents--subject to an operating cost adjustment factor--or
budget-based rents--subject to a budget-based rent adjustment.
The approach agreed to by the conferees provides policy continuity
for the expected 1 year period during which the new mark-to-market
program is being developed, provides an incentive for projects to
participate in the mark-to-market program, and makes clear a cost
effective permanent renewal policy which will take effect in fiscal
year 1999.
TENANT PARTICIPATION
Mr. KERRY. Mr. President, I want to again express my gratitude to my
colleagues Senator Mack and Senator Bond for their unrelenting efforts
to include the mark-to-market legislation in this bill, and
congratulate them on their success.
As originally passed by the Banking Committee and the Senate, the
mark-to-market legislation had more detailed language imposing specific
requirements on PAE's with regards to tenant participation in the
decisions regarding the restructuring and ongoing treatment of eligible
properties. At the request of HUD, the conference report provides for a
more streamlined approach. We accommodated the administration on this
issue because we do not want to unnecessarily bog down the
restructuring and rehabilitation process.
However, I want to make clear that the Congress fully expects that
PAE's will establish procedures that ensure meaningful and effective
participation for residents of the restructured projects and other
affected parties, and that a streamlined process should not be
construed to in any way allow the process of participation to be
circumvented.
Is that your understanding?
Mr. MACK. Thank you, Senator Kerry. Let me say that I strongly
support tenant and community participation in this process. As you
know, I have consistently advocated for such a role for tenants and
other community residents in both the mark-to-market legislation and
the public housing legislation, which passed the Senate unanimously. So
I would concur that we expect PAE's to take this provision seriously,
while balancing this with the need to complete the restructuring
process in a timely fashion.
Mr. BOND. I agree with my colleagues. In accommodating HUD's desire
to streamline the tenant participation process, the Congress in no way
intends to minimize the importance of meaningful and effective
participation of project residents and others with a stake in the
restructuring process, including local governments. I agree with my
colleagues that this must be done in a way that also ensures that the
mark-to-market process is completed in the 3-year window created by
this legislation.
SECTION 517(c)
Mr. FAIRCLOTH. Mr. President, I want to clarify section 517(c) of the
pending conference report. Let me be clear that the intent of this
provision is solely to encourage the Government-sponsored housing
enterprises, Fannie Mae and Freddie Mac, to provide technical
assistance and other support for maintaining the availability of
affordable housing.
Mr. MACK. The Senator from North Carolina is correct. This provision
was contained in the legislation as it was initially reported out of
the Banking Committee as part of the committee's reconciliation bill.
At that time, the Banking Committee's report made it clear that nothing
in the section was intended to be interpreted to impose any new
regulatory mandate on Fannie Mae and Freddie Mac to continue existing
section 8 contracts in their current subsidized form.
HUD ECONOMIC DEVELOPMENT GRANT, LEHIGH COUNTY, PA
Mr. SPECTER. Mr. President, I have sought recognition to thank my
colleague, Chairman Bond, for including in the conference report
$700,000 for a targeted grant for economic development for Lehigh
County, PA. I am advised that these funds will be used to establish an
aquatic and wellness center on the grounds of Cedar Crest College.
The center has much local support because it is designed to stimulate
economic development in the Lehigh Valley. For example, the center is
expected to host athletic events and bring as much as $3 million
annually in economic benefits to the region. The center is also
envisioned as a means of reducing juvenile crime in the Lehigh Valley.
According to the center's planners, underprivileged inner-city youths
will be provided free access to the center in the hope that it will
provide a drug-free, healthy environment to juveniles and thus help
break the temptations of street life and crime. We need to do much more
to reduce juvenile crime, and offering civic diversions is an important
means of accomplishing this goal. There will also be improved civic
health for all social groups, particularly the elderly and the
disabled.
[[Page S10740]]
Private sources have raised $2 million of the $9 million cost of
constructing the facility, and the Commonwealth of Pennsylvania has
included this project in its capital budget. Accordingly, I am pleased
that the Congress has chosen to make available economic development
funds for the center.
Mr. BOND. I thank my colleague for his comments and want to confirm
his understanding that the $700,000 in the conference report is
intended to be made available for this center at Cedar Crest College,
which should contribute to economic development in the Lehigh Valley
region.
Mr. COCHRAN. Mr. President, I would like a clarification of an item
included in the fiscal year 1998 Veterans Affairs, Housing and Urban
Development, and independent agencies appropriations bill.
The item on which I would like clarification was included under the
Economic Development Initiative Program section of the bill and
provides a grant of $1,000,000 to the city of Jackson, MS. The
conference report states that the grant should be used for training
facilities and equipment for a downtown multimodal transit center,
phase II. The conference report incorrectly identifies what the grant
is to be used for. In fact, the grant is for the acquisition and
rehabilitation of facilities and related improvements for a downtown
multimodal transit center, phase II, in the city of Jackson, MS.
These funds are specifically to be used for the aquisition and
rehabilitation of a trolley barn, downtown employee shuttle park and
ride lots, and a long-term intermodal passenger parking lot. This
funding will help revitalize an area of the city of Jackson that has
been federally designated as an enterprise community.
It is my understanding that the conference report incorrectly
identified the purpose of the economic development initiative grant and
that congressional intent for the $1,000,000 grant to the city of
Jackson, MS, is for the purposes as I have described them. Would the
chairman clarify this understanding?
Mr. BOND. Yes. The conference report does mistakenly identify the
purpose of Jackson, MS, grant. The economic development initiative
grant for the city of Jackson should be used for the purposes as
Senator Cochran describes them.
Mr. COCHRAN. I thank the chairman.
Elderly Housing
Mr. HARKIN. Mr President, I want to express my appreciation to the
chairman of the VA-HUD Subcommittee and to Chairman of the Subcommittee
on Housing for working with me to address the special difficulties
concerning the treatment of rural elderly housing projects under the
new Multifamily Housing Restructuring Program contained in the
conference report. As the statement of managers states
A large portion of the properties in the upper Midwest are
elderly facilities in rural areas, which are particularly
disadvantaged under the Department's fair market rent system
because these properties were built to a different standard
compared to general rental properties, and the nature of the
rental housing depresses the FMR's.
The statement of Managers clearly recognizes the situation
confronting a large number of projects in my state of Iowa and in other
states in the Midwest. There are a variety of factors causing an
especially difficult problem for many rural elderly projects. First,
they were logically built with common rooms, elevators and other
amenities to serve their elderly occupants which added to construction
costs and are rarely found in the rental housing surveyed by HUD for
FMR-setting purposes. Second, the nature of rural rental housing in
much of the rural upper Midwest creates very low FMR's. Third, a very
large share of the projects built in the late 1970's which are now
coming up for renewal were rural elderly projects in many States. That
means that those States will see a large number of projects needing
exceptions from the rent limitations requiring actions by the
Secretary. The measure provides for some waiver authority with limits
set by geographic areas.
I want to clarify that the waiver authority and other requirements
placed in the legislation during conference are intended to provide
maximum flexibility for restructuring projects to ensure that elderly
projects, and especially rural elderly projects, are preserved as
project-based, low-income housing. This valuable resource is needed to
ensure the availability of affordable, low-income housing for the
elderly and disabled.
Mr. BOND. Mr. President, I appreciate the concerns and efforts of the
Senator from Iowa in this area. I share his concern about preserving
elderly rural housing and that any adverse effect on elderly residents
be minimized. Clearly, we expect that there will be instances in which
participating administrative entity may need to look at rents outside
the jurisdiction to best determine comparable rents. This concept is
borne out in the definition of ``comparable properties'' in section
512(1) where such properties are defined as meaning ``properties in the
same market areas, where practicable, that (A) are similar'' in various
indicated ways to the project at issue, including ``type of location,''
``unit amenities,'' and ``other relevant characteristics.'' The
addition of the words ``type of'' was added to meet the concerns you
and others expressed that the lack of comparable housing for the
elderly in relatively low population markets calls for appraisers to,
within the normal practices, to use comparables in similar types of
locations in other markets when there are not two comparable properties
in the market.
I presume in such a case where it has been determined appropriate to
look at other market areas for comparable properties, that the use of
the phrase ``in the same market area'' with respect to comparable
properties in the definition of ``eligible multifamily housing
projects'' in section 512(2)(A) would be guided by the same standards
as apply in connection with determining comparable properties, i.e.,
the limitation to the same market area would be to the extent it was
practicable and that as indicated in the statement of managers, the
participating administrative entity may look at rents outside the
project's jurisdiction.
And, we expect that the Secretary will grant the waiver authorities
allowed to him regarding the 20 percent limit on properties receiving
an FMR of up to 120 percent and for granting appropriate properties
FMR's in excess of 120 percent up to the limits allowed in the
legislation.
Again, I thank you for your efforts in this area.
particulate matter research
Mr. SHELBY. Mr. President, I would like to take this opportunity to
thank the chairman for including language on particulate matter
research in the VA, HUD, and independent agencies appropriations bill
for fiscal year 1998. This bill allocates approximately $50 million for
research on the possible health effects of airborne particulate matter.
The administration based its most far-reaching and costly air quality
standards on inadequate research and methodology. The language in this
bill ensures that critically needed research is carefully and
objectively mapped-out.
The emotionally charged debate on this issue, the concern expressed
by State, local, and Federal officials over the rules, and the numerous
unanswered questions and uncertainties identified by EPA's science
advisers and other independent scientists only serves to underscore the
pressing need for further research. There is widespread disagreement in
the scientific community over the adequacy of the studies the EPA used
as a basis for the new air quality standards.
I am greatly disturbed that these costly standards were promulgated
without any form of scientific consensus that the regulations will
provide any measurable improvement in human health. Currently, these
standards are subjective in nature not based on available objective
scientific evidence. It is critical to our Nation that a well organized
and thought out scientific review of these matters occurs. Premature
implementation of the standards is far more damaging to our Nation than
taking the time to allow a larger portion of the scientific community
to study and review these standards. I believe my colleague from
Alabama would like to share his thoughts on this matter.
Mr. SESSIONS. Numerous scientists, including several who have
testified on this issue before the Environment and Public Works
Committee, have stated that the size, shape, or chemical composition of
the PM that is causing the
[[Page S10741]]
alleged adverse health effects is unknown. There are various theories--
sulfates, acids, transmetals, ultrafines--regarding the potential bad
actor.
During testimony before the Senate Environment and Public Works
Committee, we learned that the EPA based its setting of the new
particulate matter standard on inconclusive scientific data. In one EPA
study, which attempted to show a relationship between levels of
particulate matter and mortality and morbidity in Birmingham, AL, the
author of the study admitted that if humidity was considered in the
model, the effects of particulate matter on morbidity and mortality was
statistically insignificant.
Billions will need to be spent by individuals, industry, and State
and local governments to meet compliance with the administration's
PM2.5 standard. Unless the problem is clearly identified before control
programs are implemented, there is no assurance that there will be any
health benefits resulting from the new standards. In fact, the new
standards themselves may bring adverse health effects as an unintended
consequence caused by a lower standard of living.
Mr. Chairman, I am pleased that your bill addresses the lack of
scientific evidence to justify the newly promulgated air quality
standards. Science on this matter needs to be completed in order to
obtain a clearer understanding if there is a problem and then what
needs to be done to address the problem. This measure will begin the
process of a strong scientific overview. I support the immediate
direction for scientific research.
Mr. BOND. I believe research, as outlined in this bill, will begin to
improve our understanding of the relationship between particulate
exposure and adverse health effects. The funding and direction provided
in the bill will put into place a needed mechanism to establish a
comprehensive, peer-reviewed research program which will benefit all
parties involved with the decision-making activities regarding
particulate matter in the years to come. The EPA was one of several
organizations that worked with us to develop the research directives in
this bill and I fully expect the EPA to follow the direction and spirit
of the statement of managers.
Mr. SHELBY. When the administration promulgated these rules, they
acknowledged the need for additional scientific studies to attempt to
validate their actions. Considering the current controversy surrounding
the lack of scientific evidence for the air quality rule, I am pleased
that your language opens future research to a diverse section of our
Nation's scientists. Mr. Chairman, how does this language ensure that
the EPA will establish a collaborative relationship with the
participating organizations.
Mr. BOND. The research program is intended to build on the research
that is planned or underway at the EPA, National Institute of
Environmental Health Sciences, National Academy of Sciences [NAS],
Health Effects Institute and several other public and private entities.
Within 30 days of the enactment of this legislation, the EPA is
required to enter into a cooperative agreement with the National
Academy of Sciences [NAS] to develop a comprehensive, prioritized,
near- and long-term particulate matter research program, as well as a
plan to monitor how this research program is being carried out by all
participants. All parties, including Congress, will be apprised of the
research plans and all subsequent steps throughout the process. The EPA
is expected to implement NAS's plan, including appropriate peer
reviews. NAS will monitor the implementation of the research plan and
periodically report to Congress as to the progress of the research
program. We believe the language included in this bill set forth a
realistic and thoughtful plan to address the numerous scientific
questions that need to be investigated prior to the next NAAQ's review
for particulate matter.
Mr. SHELBY. Thank you, Mr. Chairman and Senator Sessions, for
participating in the colloquy.
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
recognition of the Coordinated Tribal Water Quality Program in
Washington State [CTWQP].
The CTWQP is a most important model for demonstrating how tribes can
solve their water quality protection problems by coordinating with
local, State, and Federal Government agencies. 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 and objectives. 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 Congress has increased EPA's General
Assistance Program [GAP] and other funding mechanisms over the years
which includes the base program efforts for the CTWQP in Washington
State.
Mr. BOND. Mr. President, the Senator from Washington is correct. The
GAP and other funding mechanisms in EPA have increased over the years
to meet the needs of tribal governments. These needs include the CTWQP
in Washington State. The 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.
Ms. MOSELEY-BRAUN. Mr. President, while I congratulate Senators Bond
and Mikulski on their efforts to craft this year's VA, HUD, and
independent agencies appropriations bill, I would like to take
exception to language contained in the Senate committee report
regarding the Fair Housing Act and property insurance.
The report contains two paragraphs regarding the Office of Fair
Housing and Equal Opportunity's continued exercise of regulatory
authority over property insurance under the Fair Housing Act. I would
like to remind my colleagues that discrimination in the provision of
property insurance is a clear violation of the Fair Housing Act.
In 1988, Congress gave the Department of Housing and Urban
Development [HUD] the authority to promulgate regulations to enforce
the Fair Housing Act. At that time, HUD under then-President George
Bush and HUD Secretary Jack Kemp--issued a regulation which defined
conduct prohibited under the Fair Housing Act to include: ``refusing to
provide property or hazard insurance for dwellings, or providing such
insurance differently, because of race, color, religion, sex, handicap,
familial status, or national origin.''
The reason for this prohibition is simple. Without property
insurance, no lender will provide a mortgage. Without a mortgage, few
individuals can buy a house.
Recently, Federal courts of appeal in two different circuits have
held that the Act applies to insurance discrimination, and the Supreme
Court has denied petitions to review those holdings. [See NAACP v.
American Family, 978 F.2nd (7th Cir. 1992) cert. denied, 508 US 907
(1993); Nationwide v. Cisneros, 52 F3d 1352 (6th Cir. 1995), cert.
denied, 64 U.S.L.W. 3560, (Feb. 20, 1996)]
Some have maintained that combating insurance discrimination has
nothing to do with civil rights, but rather is a regulatory issue.
Enforcement of antiredlining provisions, however, is not insurance
regulation--rather, it is about prohibiting discrimination, a subject
that, under our Constitution, is clearly the responsibility of the
Federal Government. The law works to ensure that insurance--like all
other goods and services--is available to all citizens, regardless of
race.
The Senate report contains language stating that the ``McCarran-
Ferguson Act of 1945 explicitly states that unless a Federal law
specifically relates to the business of insurance, that law shall not
apply where it would interfere with State insurance regulations.''
Current law does not violate the McCarran-Ferguson Act. Federal courts
have consistently held that the Fair Housing Act only adds remedies for
illegal discrimination--it does not preempt any State regulation.
The Senate language also states that ``HUD's insurance-related
activities duplicate State regulation of insurance.'' While most State
insurance codes do address issues pertaining to unfair discrimination,
referring to treating the same insurance risks differently, these
[[Page S10742]]
State insurance laws generally lack the protections and remedies
provided by the Fair Housing Act.
Congress has consistently rejected the argument that the Federal
Government should leave the enforcement of civil rights to the
exclusive jurisdiction of the States. Even in States whose civil rights
laws address discrimination in property insurance, protection equal to
the Fair Housing Act is all too often lacking. Currently, only 29
States have laws and enforcement mechanisms that have been certified as
substantially equivalent to the Federal Fair Housing Act. Federal
enforcement must continue if we are to eliminate property insurance
discrimination nationwide.
Nothing is more central to the American dream than owning your own
home. Millions of Americans work hard and play by the rules to reach
that goal. But if homeowners, or would-be homeowners, are redlined by
insurance companies, they are denied their chance at the American
dream.
The Fair Housing Act is the basic protection against property-
insurance discrimination. I will continue to do everything in my power
to ensure that homeowners and their families can continue to enjoy the
protections of the Fair Housing Act and realize the American dream free
from discrimination.
Mr. DOMENICI. Mr. President, I rise in strong support of the
conference agreement on H.R. 2158, the VA-HUD appropriations bill for
1998.
This bill provides new budget authority of $90.7 billion and new
outlays of $52.9 billion to finance operations of the Departments of
Veterans Affairs and Housing and Urban Development, the Environmental
Protection Agency, NASA, and other independent agencies.
I congratulate the distinguished subcommittee chairman and ranking
member for producing a bill that is within the Subcommittee's 302(b)
allocation. When outlays from prior-year BA and other adjustments are
taken into account, the bill totals $89.9 billion in BA and $100
billion in outlays. The total bill is exactly at the Senate
subcommittee's 302(b) nondefense allocation for budget authority and
outlays. The bill is under the Senate Subcommittee's defense allocation
by $2 million in BA and by $1 million in outlays.
Further, I am pleased that the conferees have produced a bill that
largely is in accord with the budget agreement reached with the
Administration earlier this year.
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. 2158.
There being no objection, the material was ordered to be printed in
the Record, as follows:
H.R. 2158, VA-HUD APPROPRIATIONS, 1998, SPENDING COMPARISONS--CONFERENCE REPORT
[Fiscal year 1998, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
Defense Nondefense Crime Mandatory Total
----------------------------------------------------------------------------------------------------------------
Conference report:
Budget authority............................................ 128 68,447 ...... 21,332 89,907
Outlays..................................................... 128 79,833 ...... 20,061 100,022
Senate 302(b) allocation:
Budget authority............................................ 130 68,447 ...... 21,332 89,909
Outlays..................................................... 129 79,833 ...... 20,061 100,023
President's request:
Budget authority............................................ 129 76,965 ...... 21,332 98,426
Outlays..................................................... 128 80,313 ...... 20,061 100,502
House-passed bill:
Budget authority............................................ 128 69,823 ...... 21,332 91,283
Outlays..................................................... 128 80,403 ...... 20,061 100,592
Senate-passed bill:
Budget authority............................................ 128 68,729 ...... 21,332 90,189
Outlays..................................................... 128 79,559 ...... 20,061 99,748
CONFERENCE REPORT COMPARED TO:
Senate 302(b) allocation:
Budget authority............................................ -2 .......... ...... ......... -2
Outlays..................................................... -1 .......... ...... ......... -1
President's request:
Budget authority............................................ -1 -8,518 ...... ......... -8,519
Outlays..................................................... ....... -480 ...... ......... -480
House-passed bill:
Budget authority............................................ ....... -1,376 ...... ......... -1,376
Outlays..................................................... ....... -570 ...... ......... -570
Senate-passed bill:
Budget authority............................................ ....... -282 ...... ......... -282
Outlays..................................................... ....... 274 ...... ......... 274
----------------------------------------------------------------------------------------------------------------
Note: Details may not add to totals due to rounding. Totals adjusted for consistency with current scorekeeping
conversions.
Mr. MACK. Mr. President, I want to congratulate the chairman of the
VA-HUD Subcommittee, Senator Bond, for crafting a measure that
carefully balances a wide range of competing and diverse interests. I
believe this conference report deserves the strong support of all
Senators.
I am especially pleased that this bill contains legislation I
introduced, along with Senators D'Amato, Bond, and Bennett, and
cosponsored by Senators Domenici, Chafee, Faircloth and Grams, to
reform the Nation's assisted and insured multifamily housing portfolio.
It is unusual to have extensive authorizing language in an
appropriation. However, title V of this bill, the Multifamily Assisted
Housing Reform and Affordability Act, balances both fiscal and public
policy goals. It will save scarce Federal resources over both the short
and long term while preserving the affordability and availability of
decent and safe rental housing for lower income households.
About 20 years ago, the Federal Government encouraged private
developers to construct affordable rental housing by providing mortgage
insurance through the Federal Housing Administration [FHA] and rental
housing assistance through the Department of Housing and Urban
Development's [HUD] project-based section 8 program. In addition, tax
incentives for the development of low-income housing were provided
through the tax code until 1986.
HUD's section 8 assisted and FHA-insured multifamily housing program
has created thousands of decent, safe and affordable housing
properties. However, the current program allows some owners to receive
more--often far more Federal dollars than necessary to maintain their
properties. Further, a portion of the rental stock suffers from poor
management or has become physically distressed. Thus, in some cases,
taxpayers are paying costly subsidies for inferior housing.
We are on the verge of a funding crisis in the renewal of HUD's
expiring section 8 rental assistance contracts. Indeed, HUD Secretary
Cuomo has called the section 8 contract renewal problem ``the greatest
crisis HUD has ever faced.'' Over the next several years, a majority of
the section 8 contracts on the 8,500 FHA-insured properties will
expire. If contracts continue to be renewed at existing levels, the
cost of renewing these contracts will grow from about $2 billion in
fiscal year 1998 to $5.2 billion in fiscal year 2002 and more than $7.7
billion 10 years from now. The total cost of renewing all section 8
project-based and tenant-based assistance would grow from $9 billion in
fiscal year 1998 to as much as $18 billion in fiscal year 2002 without
policy changes.
Federally assisted and insured housing serves almost 1.6 million
families with an average annual income of $7,000. About half of the
households are elderly or contain persons with disabilities. Many of
these developments are located in rural areas where no other rental
housing exists. Some of these properties serve as anchors of
neighborhoods where the economic stability of the neighborhood is
dependent on the vitality of these properties. If the project-based
contracts are not renewed, residents and communities would be adversely
affected. Further, most of the underlying FHA-insured mortgages--with
an unpaid principal balance of $18 billion--will be forced into
default.
The Banking Committee began its examination of what is commonly
referred to as the ``mark-to-market'' issue more than 2 years ago.
Since that time, we have received extensive input from all of the
potential stakeholders in this issue, including residents, project
managers, low-income advocates and project residents, State and local
interests, the financial community, and HUD.
The version of the bill we are considering today reflects
negotiations with all parties that have occurred since its original
introduction as S. 513 in March. It is a consensus bill that helps to
ensure that residents, communities and the Federal investment in the
housing are protected at a cost we can afford.
At a Housing Subcommittee hearing in June, HUD Secretary Cuomo raised
some administration concerns about S. 513. We have attempted to address
those concerns and provide a reasonable degree of flexibility for HUD
in its overall administration of the mortgage restructuring program and
also to provide reasonable opportunities for the use of tenant-based
assistance after restructuring. I appreciate the cooperation of
Secretary Cuomo in helping to move this important legislation forward.
I want to thank Senator D'Amato, chairman of the Banking Committee,
[[Page S10743]]
for his ongoing, strong support for this legislation. In addition, I
appreciate the support of Senators Sarbanes and Kerry. From the outset,
mark-to-market has been a bipartisan effort, and those Senators have
made invaluable contributions to the final version of the legislation.
I want to touch briefly on some of the bill's major provisions and
the compromises that are reflected in the conference agreement.
First, the bill ``marks'' rents on oversubsidized properties to
comparable market rents or to 90 percent of area fair market rents. The
underlying mortgages would be restructured so they could be supported
by the new rents. In some cases, higher rents could be permitted if
necessary to support proper operations and maintenance costs. These
exceptions are principally intended to assure the continued viability
of projects, generally serving the elderly, located in rural areas.
Second, the bill also recognizes that HUD lacks the staffing capacity
and expertise to oversee effectively its portfolio of multifamily
housing properties or to administer a debt restructuring program.
Accordingly, the bill would transfer the functions and responsibilities
of the restructuring program to capable third parties, preferably State
and local housing finance agencies, who would act as participating
administrative entities [PAE's] in managing this program.
The language concerning third parties has been modified from its
original form partially in order to accommodate concerns raised by the
administration. These changes will increase HUD's flexibility to
partner with a variety of public, nonprofit, and for-profit entities
that have expertise in affordable housing, while also providing an
exclusive time period for applications submitted by publicly
accountable entities.
Under the revised language, public entities--State and local housing
finance agencies [HFA's]--would be given an exclusive time period to
submit proposals to serve as PAE's. Criteria for the selection of PAE's
would be based on the applicant's demonstrated experience and expertise
in multifamily financing and restructuring and the capacity to work
with low-income residents and communities. Further, selection would be
based on the PAE's ability to perform the portfolio restructuring in a
timely, efficient, and cost-effective manner. I would like to emphasize
that the Secretary would be required to select housing finance agencies
as PAE's if they meet the selection criteria.
I strongly believe that, based on the housing finance agencies' track
records and mission that they are by far the most viable entities to
carry out the responsibilities under this program and to balance the
financial and social policy goals of the bill. Accordingly, it is my
expectation that State and local HFA's would be responsible for most of
the properties under mark-to-market, as evident by the significant
participation of public entities under HUD's fiscal 1997 mark-to-market
demonstration program.
Third, owners who clearly violate housing quality standards would no
longer be tolerated. The bill screens out bad owners and managers and
nonviable projects from the inventory and provides tougher and more
effective enforcement tools that will minimize fraud and abuse of FHA
insurance and assisted housing programs.
Fourth, the conference bill revises the original version of S. 513,
which had called for the exclusive use of project-based rental
assistance after restructuring. Under the conference agreement,
project-based assistance would be maintained on properties located in
markets where there is inadequate available affordable housing and for
those that predominantly serve elderly or disabled populations. For the
remaining inventory, PAE's would be provided the discretion of either
maintaining project-based assistance or providing tenant-based
assistance. The PAE's decision on the form of assistance would be based
on factors related to the local market, the stability of the project,
resident choice, and the impact on the community. This decision would
only be made after consultation with affected owners and appropriate
public officials, and significant participation by affected residents.
Fifth, the conference agreement establishes a new Office of
Multifamily Housing Assistance Restructuring, headed by a
Presidentially appointed Director, within HUD to oversee the
restructuring process. The bill makes it clear that the Director will
be answerable and be accountable to the Secretary, but will free of
undue Secretarial interference in the conduct and decisionmaking of the
office.
Last, the bill provides tools to recapitalize the assisted stock that
suffers from deferred maintenance. It provides the opportunity for
tenants, local governments and the community in which the project is
located to participate in the restructuring process in a meaningful
way. Residents would also be empowered through opportunities to
purchase properties.
Mr. President, I would like to emphasize how important it is that we
are addressing this issue this year. Delays will only harm the assisted
housing stock, its residents and communities, and the financial
stability of the FHA insurance funds. I would add that, as we face an
explosion in the cost of section 8 contract renewals, we cannot afford
to pay more than is reasonable to renew expiring contracts.
This legislation will protect the Federal Government's investment in
assisted housing and ensure that participating administrative entities
are held accountable for their activities. It is also our goal that
this process will ensure the long-term viability of these projects with
minimal Federal involvement. It is a sincere effort to reduce the cost
to the Federal Government while recognizing the needs of low-income
families and communities throughout the Nation.
In closing, I want to commend Senator Bond and his counterpart in the
House, Congressman Jerry Lewis, for their cooperation in acting to
avert a potential section 8 contract renewal crisis. This is a
bipartisan proposal that both reduces unnecessary Federal expenditures
and represents good and thoughtful Federal housing policy.
Regulation of Insurance by HUD
Mr. BOND. Mr. President, the Senate committee report on the fiscal
year 1997 VA/HUD appropriations bill regarding HUD's regulation of
insurance stated that:
The Committee intends that funds appropriated to the fair
housing initiatives program for enforcement of title VIII of
the Civil Rights Act of 1968, as amended, which prohibits
discrimination in the sale, rental, and financing of housing
and in the provision of housing and in the provision of
brokerage services, be used only to address such forms of
discrimination as they are explicitly identified and
specifically described in title VIII. Recognizing that there
are limited resources available for FHIP activities, the
Committee believes that FHIP funds should serve the purposes
of Congress as reflected in the express language of title
VIII.
The Committee notes that HUD's Office of Fair Housing and
Equal Opportunity has undertaken a variety of activities
pertaining to property insurance under the authority of the
Fair Housing Act. HUD recently testified that, due to
congressional concern about such activities, it does not
intend to focus its regulatory initiatives on property
insurance. The Committee is encouraged by this statement, but
remains concerned about HUD's use of funds for other fair
housing activities aimed at property insurance practices.
HUD's insurance-related activities duplicate State
regulation of insurance. Every State and the District of
Columbia have laws and regulations addressing unfair
discrimination in property insurance and are actively
investigating and addressing discrimination where it is found
to occur. HUD's activities in this area create an unwarranted
and unnecessary layer of Federal bureaucracy.
The Fair Housing Act makes no mention of discrimination in
property insurance. Moreover, neither it nor its legislative
history suggests that Congress intended it to apply to the
provision of property insurance. Indeed, Congress' intention,
as expressly stated in the McCarran-Ferguson Act of 1945 and
repeatedly reaffirmed thereafter, is that, unless a Federal
law specifically relates to the business of insurance, that
law shall not apply where it would interfere with State
insurance regulation. HUD's assertion of authority regarding
property insurance contradicts this statutory mandate.
Near-identical language was contained in the House Committee report
on the fiscal year 1997 appropriations bill. Both reports make it clear
that Congress does not intend for HUD to use any fiscal year 1997 FHIP
funds for activities targeted toward the regulation and practices of
insurance companies.
Nevertheless, on September 30, 1997, HUD announced 67 awards of
fiscal
[[Page S10744]]
year 1997 grants under the FHIP. Out of the total of $15,000,000 in
funds awarded, HUD announced that almost one third, an amount of
$4,170,002, was awarded for activities including investigations,
testing, and other enforcement-related projects specifically targeting
insurance companies. This is in contradiction of the intent expressed
in both the House and Senate Committee reports on HUD's fiscal year
1997 appropriations. I am very concerned about the improper use of
these limited and precious resources in a manner inconsistent with the
law and urge HUD to revisit these grants to ensure all awards are
consistent with the intent of Congress.
Mr. KERRY. Mr. President, I rise in support of the VA-HUD conference
report. This bill funds many programs that are crucial to the Nation's
economic vitality. For example, the funding for the National Institutes
of Health and the National Science Foundation contained in this bill
both expands our basic knowledge and helps promote small, innovative
businesses that create well-paying jobs throughout the country.
This bill also provides the funds that support important
environmental programs, and, of course, allows us to keep faith with
America's veterans by providing them with the health care they have
earned, in some cases at great personal cost.
This bill also funds the Department of Housing and Urban Development.
These funds will help families struggling to attain the dream of home
ownership or simply to find or maintain affordable rental housing. It
provides funds for homeless programs, programs that provide both
shelter and the supportive services that are so important in the effort
to stabilize the lives of these most unfortunate Americans and create
opportunities for self-sufficiency.
I commend Chairman Bond and the ranking member, Senator Mikulski, for
their efforts to serve so many important needs with so little money. In
fact, Mr. President, while I support this legislation, I must point out
that housing programs continue to suffer in our Nation's budget.
Homeless programs continue to be funded at levels more than 25 percent
below 1995 levels. We ask more from public housing authorities every
day, but provide no more resources to them to do the job. We are facing
an increasing housing crisis in America, but with decreasing resources,
and that is an issue that we must, eventually, confront.
I specifically appreciate the willingness of Senators Bond and
Mikulski to work with me, Senator D'Amato, Senator Mack, and Senator
Sarbanes to include in this conference report important legislation
commonly known as the Mark-to-Market [MTM] legislation. Senator Mack,
in particular, deserves special mention for his efforts to get this
legislation passed.
Passage of the MTM legislation is the first step in solving the
problem that Secretary Cuomo called the biggest crisis facing HUD--the
problem of over-subsidized section 8 projects that are threatened with
default when their rental assistance contracts expire in the next few
years. The problem is truly huge: up to 10,000 projects serving about
1.6 million families, including hundreds of thousands of elderly and
disabled families, were facing possible default. This would have
resulted in billions of dollars of losses to the American taxpayer
through the FHA fund, and would have led to the outright loss or slow
deterioration of increasingly scarce affordable housing.
Mr. President, the mark-to-market legislation--Title V of the
appropriations bill--will allow HUD, primarily through State and local
partners, to start pushing down excess rents to supportable market
levels while providing funds to rehabilitate those properties that need
capital investments. The bill will eliminate bad owners from the
program. In such cases, the legislation encourages HUD or the PAE's to
transfer these properties to new ownership, preferably to community-
based non-profits.
Most importantly, Mr. President, this legislation will help preserve
hundreds of thousands of units of affordable housing for the
foreseeable future. As I noted, we are seeing an overall reduction in
the commitment to affordable housing by the Federal Government. The
legislation we are passing today represents an important exception to
that disturbing trend. The clear and resounding intent of this bill is
to preserve and improve this important stock of affordable housing. I
applaud my colleagues and the Secretary for embracing this goal, and I
wholeheartedly support it.
In implementing this legislation, HUD will most often do the
restructuring through a participating administrative entity, or PAE. We
expect that State or local housing finance agencies, because of their
experience with the financing and management of assisted housing, and
their commitment to the long-term preservation of affordable housing,
will typically be the PAE.
At the same time, we gave the Secretary the discretion to choose the
PAE. There will be thousands of projects and hundreds of thousands of
units that will have to go through the restructuring process. In order
to get this done in a timely and cost-effective way, the Secretary may
have to reach out to more than one entity in a given area, or HUD may
decide to do some of the restructurings itself.
It is important to point out that the legislation requires that
crucial decisions regarding the long-term disposition of the property
such as, for example, whether the assistance is to remain project-based
or, in a few cases, may be turned into tenant-based, shall be made by a
public agency with a public mission whose interest is to preserve
affordable housing.
Similarly, the ongoing oversight of the projects after restructuring
is completed will be in the hands of HUD or State or local HFA's. The
important point here is that public funds continue to be at risk;
therefore, public agencies must take the responsibility for ensuring
their safety.
To further ensure that HFA's are chosen to be the PAE's, I urge HFA's
to strengthen their applications by creating partnerships with other
experienced parties to strengthen their applications. Such partners
would include community-based non-profits, residents groups, financial
and other relevant experts.
Mr. President, I want to emphasize that the overriding, primary goal
of this legislation is to preserve affordable housing for the long
term. As a result, we expect the PAE's to continue to provide project-
based assistance except in certain rare circumstances. The bill
provides for the final decision to be taken only after consultation
with residents and owners of the projects, local government officials,
and other affected parties. Moreover, the PAE must take into
consideration the availability of other affordable housing in the area,
the ability of tenants to use vouchers successfully, the financial
stability of the project, and other factors which, when taken as a
whole, would lead a PAE to conclude that project-based assistance
continues to be the best choice in most cases.
Mr. President, the legislation creates an office within HUD to
oversee the restructuring process called the ``Office of Multifamily
Housing Assistance and Restructuring'' [OMHAR]. The Director of this
office will be appointed by the President and subject to Senate
confirmation. The Director will work under the Secretary, subject to
the Secretary's direction and oversight. Section 573(d)(2) of the bill
gives the Director the authority to report directly to the Congress, in
certain circumstances, when the Director determines, in his discretion,
such a report would be appropriate.
Mr. President, let me reiterate a point also made by my colleagues
regarding tenant participation in the restructuring process. It is our
clear intent that HUD and the PAE's work with tenants in a meaningful
and effective way with regards to all aspects of the restructuring
process. This means timely access to relevant information, adequate
time to analyze such information, the right to meet with the PAE, and
the right to be included in physical inspections of the property,
capital needs assessments, proposals to transfer the property, and
other decisions that have significant impacts on the residents.
Finally, I want to point out that this bill also includes important
provisions regarding the renewal of other section 8 contracts. These
provisions authorize HUD to renew contracts on high-value properties
that do not need to go through the restructuring process at
[[Page S10745]]
comparable market rents. The Congress expects HUD to exercise this
discretion so as to avoid displacement of current tenants and, whenever
possible, consistent with the purposes of this title, to preserve the
housing for the long term.
In conclusion, Mr. President, I strongly support the MTM provisions
in the VA-HUD conference report. They will be essential in restoring
this valuable housing resource to sound financial and physical
condition.
Mr. SARBANES. Mr. President, I rise in support of the VA-HUD
conference report. This bill funds many important programs, programs
that are crucial to America's veterans and to poor and working families
struggling to attain the dream of home ownership or simply to find
affordable rental housing. It will help ensure our Nation's
environmental vitality, our Nation's health and scientific progress.
The bill will maintain our commitment to the exploration of space. I
commend the chairman, Senator Bond, and my good friend and colleague
from Maryland, the ranking member, Senator Mikulski for their hard work
to serve so many important needs with an ever-shrinking pot of money.
I also appreciate their willingness to work with me, Senator D'Amato,
Senator Mack, and Senator Kerry to include in this report important
legislation designed to restructure HUD's portfolio of FHA-insured,
assisted housing. This legislation is commonly known as the mark-to-
market (MTM) legislation. Senator Mack, in particular, deserves credit
for his tireless efforts to have this legislation included in the VA-
HUD appropriations bill and for his willingness to work with the
administration and the House authorizers to craft this final consensus.
Again, I thank Senators Bond and Mikulski for their partnership in this
important achievement.
Mr. President, the mark-to-market legislation--title V of the
appropriations bill--will save the American taxpayers billions of
dollars. It will allow HUD, primarily through State and local partners,
to squeeze excess rents down to supportable market levels. It will
provide for funds to rehabilitate those properties that need capital
investments. It will eliminate bad owners from the program. Most
importantly, Mr. President, this legislation will help preserve
hundreds of thousands of units of affordable housing for the
foreseeable future. At a time when we are cutting back on the Federal
commitment to build new affordable housing while simultaneously facing
growing needs for such housing, the long-term commitment established by
this legislation is truly a landmark achievement.
In implementing this legislation, HUD will most often do the
restructuring through a participating administrative entity, or PAE.
The legislation clearly indicates that we expect that, with some
exceptions, State or local housing finance agencies will act as the
PAE. In fact, HUD has signed 14 management contracts with State housing
finance agencies [HFA's] to implement the fiscal year 1997 MTM
demonstration, which was based on the legislation in the current
appropriations bill. The experience HFA's have in restructuring section
8 as a result of their participation in the demonstration, or in
restructuring equivalent properties, along with their experience in FHA
risk sharing, overseeing low-income housing tax credit deals, mortgage
revenue bond deals, and in underwriting and managing market rate and
assisted low-income multifamily housing, clearly makes the HFA's the
most qualified candidates to be chosen as the PAE in most cases. In
addition to all these financial engineering and management
qualifications, the legislation requires the use of highly qualified
HFA's because these public agencies have a public purpose and share
with the Congress the commitment to preserve these projects as low-
income housing far into the future. This factor was paramount in the
decision to give the HFA's such a prominent role in the MTM process.
At the same time, we gave the Secretary the discretion to make the
final choice of PAE because we did not want the Secretary to be
required to choose an unqualified housing finance agency to be a PAE.
There will be thousands of projects and hundreds of thousands of units
that will have to go through the restructuring process. In order to get
this done in a timely and cost-effective way, the Secretary may have to
reach out to more than one entity in a given area, or HUD may decide to
do the restructurings itself. In all cases, however, the crucial
decisions that have major impacts on the residents, the projects, or
their surrounding communities, such as, for example, whether the
assistance is to remain project-based or, in a few cases, may be turned
into tenant-based, shall be made by a public agency with a public
mission whose interest is to preserve affordable housing.
In addition, the ongoing oversight of the projects, after
restructuring is completed, will have to be in the hands of the public.
This requirement can be satisfied by HUD doing the contract monitoring
and oversight, or by contracting this function out to a State or local
HFA. Again, this is a public trust, and the legislation requires that a
public agency carry it out.
The Congress clearly expects HFA's who seek the role of PAE to
strengthen their applications by reaching out to other experienced
parties, particularly non-profits with experience in real estate
development and/or management and with deep roots in their communities,
to develop partnerships. In addition, PAE's may want to find financial
and other relevant experts to ensure that they present the best
possible application to the Secretary.
Mr. President, tenants, owners, HFA's, HUD, and the Congress all
agree that the majority of the portfolio of affordable housing that
will go through the MTM process should continue to have project-based
section 8 assistance. For example, the legislation requires that
elderly and disabled housing projects and housing in tight rental
markets continue to receive project-based section 8 assistance.
It is the clear intent of the Congress that we preserve the existing
section 8 project-based portfolio of affordable housing to the greatest
extent possible. To do this effectively, we expect the PAE's to
continue to provide project-based assistance except in certain rare
circumstances. The bill provides for the final decision to be taken
only after consultation with owners, residents of the projects, local
government officials, and other affected parties. Moreover, the PAE
must take into consideration the availability of other affordable
housing in the area, the ability of tenants to use vouchers
successfully, the financial stability of the project, and other factors
which, when taken as a whole, would lead a PAE to conclude that
project-based assistance continues to be the best choice in most cases.
Mr. President, in the course of the final negotiations to include the
MTM legislation in the appropriations conference report, it was agreed
to create an office within HUD to oversee the restructuring process.
The office, called the Office of Multifamily Housing Assistance and
Restructuring [OMHAR] will have a director that is appointed by the
President and subject to Senate confirmation. The Congress clearly
intends, as the legislation language states, that the Director will
work under the Secretary, subject to the Secretary's direction and
oversight. Section 573(d)(2) of the bill gives the Director the
authority to report directly to the Congress, in certain circumstances,
when the Director determines, in his discretion, such a report would be
appropriate.
Finally, Mr. President, let me reiterate a point also made by my
colleagues regarding tenant participation in the restructuring process.
It is our clear intent that HUD and the PAE's work with tenants in a
meaningful and effective way with regard to all aspects of the
restructuring process. This means timely access to relevant
information, adequate time to analyze such information, the right to
meet with the PAE, and the right to be included in physical inspections
of the property, capital needs assessments, proposals to transfer the
property, and other decisions that have significant impacts on the
residents.
In conclusion, Mr. President, I strongly support the MTM provisions
in the VA-HUD conference report, thank my colleagues for their hard
work, and look forward to seeing this important Federal resource
restored to sound financial and physical condition.
Mr. BOND. Mr. President, a number of items in the conference report
or statement of the managers require further clarification or
correction due to
[[Page S10746]]
printers' errors. The items are as follows:
Within the housing certificate fund, the legislation requires HUD to
provide enhanced or sticky vouchers to residents to prevent
displacement where an owner of a property chooses to prepay the
outstanding indebtedness under a preservation mortgage (which
prepayment can now be authorized at the option of a property owner).
These enhanced vouchers, including those provided in prior years, are
not just for the first year after prepayment but must renewed for each
subsequent year so long as the assisted family continues to live in the
property.
Within the $32 million for section 107 grants under the CDBG Program,
$4 million for technical assistance, $7.5 million for the Community
Outreach Program, $6.5 million for Historically Black Colleges and
Universities, $6.5 million for Community Development Work Study, with a
$3 million set-aside for Hispanic-serving institutions, $7 million for
insular areas, and $500 thousand for the National Center for the
Revitalization of Central Cities.
Within the Economic Development Initiative grants, there is a grant
to Arab, AL. The statement inadvertently refers to Arab, IL.
Within the Economic Development Initiative grants, the grant to the
city of Jackson, MS, should be used for the acquisition and
rehabilitation of facilities and related improvements for a downtown
multimodal transit center in the city of Jackson. This project was
incorrectly identified in the statement of managers.
In addition, with respect to EDI, the intent of the conferees is for
HUD to use the maximum flexibility in funding the specified EDI grants
in the statement of managers. HUD is not expected to establish special
requirements but should work with the entities specified in each grant
to ensure that activities can be funded and completed in an expeditious
manner.
Within the Superfund research appropriation, there is a $2.5 million
appropriation for the Gulf Coast Hazardous Substance Research Center.
This item was included in both the House and Senate versions of the
bill but not expressly identified in the statement of the managers.
Within NASA Science, Aeronautics and Technology is a $2 million
appropriation for the Bishop Museum in Honolulu, HI. This item was
included in the Senate version of the bill, and the House receded to
the Senate in conference, but it was inadvertently not included in the
statement of the managers.
Mr. JOHNSON. Mr. President, I rise today to express my strong support
for the conference report on the fiscal year 1998 appropriations for
VA, HUD and related agencies. While this bill continues to focus on the
commitments this Nation has made to our veterans, and provides for the
important scientific and environmental protection priorities that the
administration has put forth, I want to take a moment to express my
support for the steps the conferees have taken to address a serious and
pressing issue facing low income housing assistance in this country.
Since its inception, the HUD section 8 housing program has provided
rental assistance for low-income individuals through project-based
contracts as well as vouchers which help to preserve low income housing
availability. This conference report not only includes funding for the
renewal of section 8 contracts, but contains the extremely important
mark-to-market contract restructuring program which, beginning in 1999,
will preserve affordable housing for millions of low-income tenants
while saving the taxpayers billions over time as well. I want to
commend my Banking Committee colleagues, particularly Senator Mack who
authored the initial section 8 restructuring bill, for their tireless
efforts to insure that this restructuring program was accepted.
Nationwide, section 8 contracts covering 1.8 million assisted units
are expected to expire in fiscal year 1998. The mark-to-market program
is a mortgage and rent restructuring program to reduce the costs of
over-subsidized section 8 multifamily housing properties insured
through the FHA. Under this restructuring program, FHA insured
properties with above market rents are eligible for debt restructuring
to bring the rent levels in line with market rate rent levels, or the
project-based rents needed to support operation and maintenance of the
housing facilities. The bill directs the HUD Secretary to work with
State and local housing entities to reduce expiring section 8 contract
costs, address troubled projects, and correct management and ownership
deficiencies.
Because Congress has been unsuccessful in past attempts to move the
type of section 8 overhaul necessary for the preservation of low-income
housing assistance in this climate of budget cuts, HUD has been
renewing all longer term expiring Section 8 contracts with quick-fix,
1-year contracts. The short-term renewals have led to confusion and
fear among recipients of housing assistance in my State and across the
country.
Many assisted housing residents in South Dakota have been worried for
several months as to whether they will continue to have a roof over
their heads in the coming year. As these residents received notice of
expiring short-term and long-term section 8 contracts, families were
concerned they would be forced from their homes. Some of these families
have spent half their lives in these homes. Many of these residents are
senior citizens. Many are widows and widowers. Many are disabled. These
residents were told that unless Congress acted, they may be forced from
their two-, three-, and four-bedroom homes or one- and- two-bedroom
apartments and displaced into smaller sized units or homes.
For many residents in communities such as Northgate Community Homes
and Lakota Homes in western South Dakota, this is not an option.
Housing at every level of affordability is extremely scarce in my rural
State. After raising families in these homes, senior citizen couples
living in two- or three-bedroom homes have been told that they would
have to downsize to one-bedroom homes. However, at the Northgate and
Lakota developments, there are no one bedroom options. Thus these
individuals and families have feared displacement into the surrounding
area, with great uncertainty about their futures. I have been informed
by city officials that the low-income housing stock currently available
is inadequate to absorb the extra burden of these individuals and
families forced from their section 8-subsidized homes and complexes.
Already, many elderly and disabled couples and individuals have left
the developments over uncertainty about their homes. They are leaving
behind years of improvements they made in their homes, as well as the
cherished memories of raising families in these communities. They have
been forced out because of confusion and expiring contracts.
People like Hazel Holmes of Sturgis, SD, who raised her family in a
small two-bedroom home at Northgate Community Homes have been
threatened by uncertainty. Hazel's husband died almost 10 years ago and
she has continued to live independently in her home. With the expiring
section 8 contract, she became very worried--like her neighbors--that
she would be forced to leave her home and the neighbors she cherished.
Couples like Ruth and Carl Kittleman and Ralph and Dorothy Iverson have
already moved from Northgate due to inaction and confusion over this
issue. Others fret on a daily basis about their futures. Seniors like
Chuck Alberts have persevered each day with the pressure and stress of
having his beloved wife Bev in a nursing home. He should not have the
added worry about whether he will be able to stay in his home.
These are just a few examples of the serious section 8 scare that
recipients of low-income housing assistance have faced in my State. I
am extremely thankful that throughout consideration of the section 8
restructuring proposal my colleagues took special notice of the unique
needs of rural housing contract restructuring. Because of continued
pressure from myself and other rural members, the mark-to-market
proposal contains language for a more flexible approach to determining
market rents in rural communities--communities where market is
difficult to determine, where the project in need of contract
restructuring might be the only market for hundreds of miles. The
broadened definition of market included in this bill will help to
insure appropriate restructuring throughout my State.
[[Page S10747]]
In rural South Dakota, the 244 project-based section 8 contracts
provide 6113 housing units, primarily for elderly South Dakotans. With
full funding up to $8.2 billion provided through the fiscal year 1998
VA HUD bill, 1070 housing units up for renewal in South Dakota in the
immediate future will continue to receive section 8 rental assistance.
This volume pales in comparison to the hundreds of thousands of section
8 housing units in jeopardy in states like New York and Illinois, and I
appreciate my colleagues' continued sensitivity for awareness of the
unique needs of rural States.
Additionally, I commend my colleagues for relying on the qualified
existing State housing finance agencies for the administration of
contract restructuring, and on local housing entities for management
and planning decisions, both subject to the approval of the HUD
Secretary. With public input at every level, HUD will be able to reign
in excessive subsidies to appropriate levels so that our Federal
housing assistance funds go further, and maintain assistance for low-
income individuals for the long term. While the majority of current
project-based Section 8 will remain available, local communities will
be involved in determining whether tenant-based assistance is more
practical in certain communities. This freedom at the local level is
important, yet I applaud my colleagues for including distinct
protection for elderly and disabled project-based assistance, which
will eliminate the type of fear and uncertainty that seniors in my
state have been subject to in recent years.
Without the commitment to fund section 8 for the coming year, and the
inclusion of the mark-to-market restructuring program, cuts in other
programs for the elderly and disabled, and for preserving available
low-income housing would be required. By addressing section 8
restructuring and providing adequate funding, this bill reaffirms the
Congress' long term commitment to low-income housing assistance.
HUD and the States have a daunting task ahead, as thousand of
projects under contract throughout the country are pending
restructuring. In all cases, I am confident that the involvement and
participation of local ad State housing interests at every level will
protect the public interest, and all affected parties, including
tenants, will have a voice in the future of low-income housing
assistance.
Again, I commend my colleagues for including the section 8
restructuring program in the fiscal year 1998 VA, HUD appropriations
bill, and I look forward to working toward continued security for low-
income housing in the coming years.
funding for the health care needs of veterans in northern california
Mrs. FEINSTEIN. Mr. President, I rise today to weigh in on the
provisions included in the VA-HUD conference report regarding the
health care needs of Northern California's veterans. The conference
report provides a total of $70.8 million for renovations to the
existing McClellan Air Force Hospital at Mather Air Force Base in
Sacramento, as well as for outpatient clinics in Fairfield, Mare
Island, Martinez, Auburn, Chico, Eureka, and Merced. While I applaud
this much-needed expansion of services in Northern California, I remain
deeply disappointed by Congress' decision not to build a veterans
hospital at Travis Air Force Base.
Since 1991, veterans in Northern California have been waiting for a
new hospital to replace the Martinez hospital, which was closed for
seismic reasons. I made a commitment with Vice President Gore to help
bring a full veterans hospital to Fairfield, and I have been fighting
for 4 years to get this project fully funded. Two previous Congresses
appropriated funding to construct the Travis VA Hospital.
Now, unfortunately, we are turning our back on that commitment. It is
truly a sad day when the men and women who have served our country
without question--and who have the right to expect their government to
fulfill its promises--are simply told ``tough luck.''
The fact is that a clear majority in Congress oppose the hospital's
construction. This opposition has only grown stronger after two
independent reports--one by the General Accounting Office and one by
Price Waterhouse--concluded that the Travis VA hospital was not
justified. Key Committee chairmen in both the House and Senate have
made it clear that Congress will provide no Federal funds for a
replacement hospital at Travis.
The VA-HUD conference report does appropriate $70.8 million for
veterans' health care needs in Northern California, including:
A sharing agreement between VA and the Department of Defense for 100
VA beds at David Grant Medical Center at Travis. These beds will be
serviced by VA doctors.
A new $13.5 million VA clinic, to be built adjacent to David Grant
Medical Center. This clinic will include emergency room facilities,
ambulatory surgery, mental health, some specialty services, and offices
for doctors.
Conversion of McClellan Hospital at Mather Air Force Base to a VA
Hospital. This will provide 55 new VA beds.
Upgrades to the VA outpatient clinics at Mare Island and Martinez.
New outpatient clinics in Auburn, Chico, Eureka and Merced.
Contracts with community hospitals in Martinez and Redding.
While this plan does not fulfill the promise that the VA made to
Solano County veterans and does not establish the hospital that
veterans groups like Operation VA fought so hard for so long to obtain,
when examined in light of the position of current congressional
leaders, it does provide health care for many veterans who presently
cannot access the VA system. The new outpatient clinics and additional
hospital beds will make it far easier for veterans in Northern
California to benefit from the VA health system. For the first time,
vets living along the North Coast and in the Sierra will have real and
meaningful access to the VA. They will not have to drive for 4 hours or
more for basic care. Their visits to the five new VA outpatient clinics
will undoubtedly result in higher utilization of the VA inpatient
facilities at Travis and Mather Air Force Bases.
I know that the people of Solano County have a lot of unanswered
questions about the VA proposal, and I pledge that I will work with
them to make sure that VA offers the high quality and accessibility of
care that our veterans deserve. I am sure that groups like Operation VA
will continue to fight for improved veterans health care in Northern
California, and I am proud to join in that fight.
Mr. KERRY. Mr. President, as the ranking Democratic member of the
Housing subcommittee, I spoke earlier today about very significant
housing provisions in the VA-HUD conference agreement. I would like now
to address some other components of this legislation which I believe to
be very important to the Commonwealth of Massachusetts and the nation.
Mr. President, I appreciate the hard work of the Chairman of the VA-
HUD appropriations subcommittee, Senator Bond, and the ranking member,
Senator Mikulski, in crafting a bill which gives such serious
consideration to the needs of the people of Massachusetts.
Mr. President, the subcommittee has allocated $50 million for the
clean-up of Boston Harbor, a modest sum given the magnitude of the
challenge and the scope and cost of the clean-up project. While the
residents of Boston continue to face rising water and sewer rates,
these rates are not nearly as high as they would be without the
assistance of the federal government. The Boston Harbor clean-up
project construction will be completed in the next two years. Federal
assistance in these two remaining years will be crucial to ratepayers
in the 43 greater Boston area communities who must shoulder most of the
burden of the $3.5 billion project, which also includes the $2 billion
required for combined sewer overflows (CSOs) and other water
infrastructure upgrades.
The President s fiscal year 1998 budget provided $200 million over
the next two years for the Boston Harbor cleanup--which we anticipate
will be the last increment of funding assistance needed from the
federal government for this important infrastructure project. Even if
this amount is forthcoming, the federal share of the Boston Harbor
clean-up project still will be well below the federal share provided
for many other clean water projects across the country, and is
certainly well below the full federal funding called for by
[[Page S10748]]
Congress when it passed the Unfunded Mandates Act in 1995.
The Massachusetts Water Resources Authority (MWRA), which is in
charge of the Harbor cleanup, has continually worked to reduce project
costs. Last year, Mr. President, the EPA approved a revised CSO plan
developed by the MWRA, with assistance from the state Department of
Environmental Protection and local communities, which is estimated to
save ratepayers nearly one billion dollars.
During the early 1990s, under the past two Administrations--one
Republican and one Democratic--the federal government provided $100
million per year to assist the citizens of the greater Boston area with
this project. In FY 1996, although the President requested $100 million
and I supported his request, Congress appropriated only $50 million for
the cleanup of Boston Harbor. For FY 1997, while the President again
requested $100 million, the Congress appropriated $75 million as the
federal share. All federal assistance is needed and appreciated, so in
that respect, I and the people of the Boston area are grateful for the
$50 million contained in this year's VA/HUD bill. Nonetheless, we are
disappointed the Congress, again, did not provide the amount contained
in the President's budget.
I am extremely pleased that the conference report includes $3 million
for water projects for Bristol County, Massachusetts. This amount is
the same as the President's fiscal year 1998 budget request and will
continue the support which the Committee provided in the past two
years. Both Fall River and New Bedford, two major cities in Bristol
County, are implementing court-ordered construction under the Clean
Water Act that will cost hundreds of millions of dollars. These urban
industrial communities continue to be burdened by high unemployment and
an ongoing recession.
In addition, Mr. President, I am delighted the conference report
includes a $1.7 million appropriation for water projects in the South
Essex Sewage District and surrounding communities such as Lynn,
Gloucester and elsewhere. These communities are struggling with the
prospect of incurring obligations from $12,000 to $22,000 per household
to come into compliance with current clean water regulations. Despite
successful efforts to control costs, the projected costs are still huge
and growing in the South Essex Sewage District: In 1993 the projected
costs were $12.6 million and now, for 1998, the projected costs are
estimated at $29 million. Federal assistance is critical to ease the
burden of compliance on these communities and to further the national
goal of protecting our environment.
Mr. President, the conference report also includes funding of $2
million for the Tapley Street project in Springfield, Massachusetts,
which involves renovation of a former U.S. Postal Service distribution
facility that was purchased by Springfield, in 1986 and is now vacant.
This building will make an ideal site for consolidated public works
operations that are currently scattered among several inadequate
facilities, including a condemned yard and a makeshift garage in a
different town. These deficiencies take a serious toll on city-owned
public works equipment, employee morale and efficiencies of city
services. The renovation will create 300 construction jobs in an area
that has been hard-hit by an economic downturn and defense cut-backs.
Mr. President, among the important national program in this
conference report, several are of particular interest to me.
YouthBuild, which is funded at $35 million in this conference agreement
for fiscal year 1998, is an extremely worthwhile program and a
demonstrated success. YouthBuild programs around the country have been
providing disadvantaged young people with the opportunity to finish
their education while also providing leadership training and job skills
through work on projects producing affordable housing. I am pleased
that the conference report recognizes the need to continue and fund
this program. I hope that next year, the amount of funding provided for
it will be much closer to the $70 million 48 other Senators joined me
in requesting for fiscal year 1998 in order to enable establishment of
YouthBuild programs in communities around the country where there
currently is no program.
Another important national program in the conference report is the
Housing Opportunities for People With AIDS program, which is the heart
of the federal housing response for people living with HIV/AIDS. I am
pleased that HOPWA is funded at $204 million for fiscal year 1998. Mr.
President, ninety percent of the HOPWA funds are distributed by formula
grants to states and localities hit hardest by the AIDS epidemic; these
states and localities control the use of these funds. Communities may
use HOPWA funds to meet whatever housing needs they may have, from
providing short-term supportive housing or rental assistance for low-
income persons with HIV/AIDS to building community residences or
providing coordinated home care services.
Finally, Mr. President, the Community Development Block Grant (CDBG)
program and the HOME investment partnership program are arguably the
most important federal programs for addressing the economic development
and affordable housing needs of our nation's communities. I strongly
urged the conferees to provide funding for both programs at levels at
least equal to the FY 1996 appropriation of $4.6 billion for CDBG and
$1.5 billion for HOME in addition to any Congressional set-asides. Both
programs share the important feature of providing local flexibility
within broad federal goals and purposes. The success of both programs
merits continued strong federal support for CDBG and HOME even as other
federal programs are being cut back. The conference agreement does, in
fact, include those amounts for the two programs, but I am concerned
because Congressional set-asides will be deducted from those levels. I
will continue to support additional funding for both CDBG and HOME in
future appropriations bills.
Mr. President, in total, this conference report is a laudable effort
by the subcommittee and especially its Chairman and ranking member,
especially as they continue to struggle with the imperative to achieve
significant spending reductions resulting from the balanced budget the
Congress approved earlier this year. I appreciate their consideration
for the interests of the people of Massachusetts, and am pleased to
support this agreement.
Mr. REED. Mr. President, I rise to express my support for the VA-HUD
Conference Report and to commend the conferees for their work in
resolving a number of contentious issues with the House.
First, I would like to commend the conferees for providing adequate
funding to renew all expiring section 8 contracts. In my State of Rhode
Island, it is expected that section 8 contracts on 4000 units will
expire in fiscal year 1998, and I am pleased that this bill will ensure
that all of these contracts are renewed.
I would also like to commend the conferees on their successful effort
to include the section 8 mark-to-market reforms in the conference
report. The Senate Banking Committee passed a mark-to-market bill in
June that was initially attached to the balanced budget legislation,
but was subsequently dropped in conference.
The significance of inclusion of the mark-to-market reforms in the
conference report cannot be overstated because these reforms address an
increasingly serious problem, which, if left uncorrected, will threaten
the future viability of the section 8 program. The problem I am
referring to is the projected increase in section 8 costs as the number
of expiring section 8 contracts increases in coming years. In fiscal
year 1997, approximately $3.6 was provided to renew expiring contracts.
However, absent mark-to-market reforms, the costs of renewing expiring
section 8 contracts is expected to increase to $9 billion in fiscal
year 1998, and to $18 billion in fiscal year 2002.
The reforms included in this bill address this issue by enabling
landlords of section 8 properties to restructure their mortgage
contracts, which will reduce the escalating costs of the section 8
program. The reforms will also reduce the subsidy levels that HUD pays
to landlords for section 8 assistance. Because of the high costs to
build many of these section 8 properties, HUD has been forced in many
cases to pay subsidies that are in excess of 120 percent of fair market
rent. In fact, a recent study found that 75 percent of
[[Page S10749]]
HUD's newer assisted housing projects had rents above fair market rent,
and that 50 percent of this housing had rents greater that 120 percent
of fair market rent. I am pleased that this bill will address this
problem by reducing rents to below fair market rents, or fair market
rents for most section 8 housing. These changes will produce $500
million in savings for taxpayers.
Also, the mark-to-market provisions will improve the quality of
section 8 housing by requiring landlords to evaluate the rehabilitation
needs of their property and undertake necessary repairs. For too long,
many of our section 8 properties have been in an embarrassing state of
disrepair. In a recent study, it was found that 24 percent of the
section 8 properties were distressed. Sadly, some of these section 8
properties have become havens for crime and drug activities. I am
pleased that the mark-to-market reforms will begin to attack this
problem by requiring landlords to make repairs to their properties and
become more responsible owners.
The bill also includes provisions that will enable HUD to screen out
rogue owners and managers, as well as provide more effective
enforcement tools that will minimize fraud and abuse of HUD insurance
and assisted housing programs.
Most importantly, the reforms in this bill will require landlords who
are restructuring their mortgages to maintain their property as section
8 housing throughout the life of the mortgage. This provision is
particularly important in ensuring the preservation of the existing
stock of section 8 housing.
The mark-to-market reforms included in this bill could affect five
Rhode Island housing developments in the near term, and could affect
countless other developments in the future, as these provisions are
fully implemented by HUD. Overall, I believe these reforms will improve
the quality of life for tenants of section 8 housing, half of whom are
seniors, and most of whom are very low income.
However, it should be noted that these reforms are not a panacea, and
we should be mindful that there is much more to be done. For example,
we must take steps to address the ever-worsening affordable housing
crisis facing this Nation. Unfortunately, this bill follows HUD
appropriations bills in recent years and fails to provide funds for new
section 8 vouchers. Indeed, such funds have not been appropriated since
1993.
Also, there is the issue of the term of section 8 contracts. In years
past, section 8 contracts have had terms that ranged from 5 to 40
years, with budget authority being allocated in accordance with the
terms of the contract. However, because of the adverse budgetary
implications of providing long-term contracts, expiring contracts are
now being renewed for 1-year terms which require annual appropriations.
These 1-year renewals have created a great degree of uncertainty among
tenants of section 8 housing who are being notified annually by HUD
that they may not have housing if Congress fails to provide section 8
funding. In a meeting with constituents, I was informed that some
seniors who are residents of section 8 housing have suffered strokes
and other ailments after being notified that their housing was in
jeopardy if Congress failed to appropriate funding for section 8
renewals. Mr. President, this is a very serious issue which must be
addressed.
While HUD is required to notify tenants about contract renewals,
something must be done to ensure that this notification does not
unnecessarily alarm seniors and other residents of section 8 housing. I
understand that HUD is currently working with a number of tenant groups
to craft a notification letter that is less alarming than letters in
years past. I intend to work with HUD to see that future notices
provide adequate information, without unnecessarily alarming section 8
residents.
Mr. President, I am pleased that this bill increases funding relative
to fiscal year 1997 for a number of important programs to Rhode Island.
For example, funding for the Community Development Block Grant Program,
which provides flexible funding to States and localities for community
development initiatives, is increased by $75 million. In fiscal year
1997, Rhode Island cities used over $20 million in CDBG money to fund
initiatives ranging from job training to neighborhood revitalization.
In addition, funding for the HOME Program, which is aimed at
expanding the supply of affordable housing, is increased by $100
million over fiscal year 1997. Last year, Rhode Island received $3
million in HOME funding which was used to provide 283 units of
affordable housing.
Finally, the VA-HUD appropriations bill maintains level funding for a
number of important programs such as the section 202 and section 811
programs that provide housing for the Nation's elderly and disabled. A
number of Rhode Island groups have successfully used section 202 and
section 811 grants to build housing for the elderly and disabled,
ameliorating the shortage of affordable housing for these groups in
Rhode Island.
In conclusion, I would again like to commend the work of the
conferees. Their efforts will help preserve and maintain the section 8
program, in addition to a number of other important housing and
community development programs.
Mr. McCAIN. Mr. President, the Senate will act shortly to approve the
conference agreement on the Fiscal Year 1998 VA-HUD Appropriations Act,
and I intend to vote for the bill. The bill contains many very
worthwhile programs that are vital to our Nation's veterans, to the
economic development and viability of our cities, to rural communities,
to environmental preservation and remediation, and for other important
Government functions. The conferees have done an excellent job of
crafting a bill that is balanced and fair, while staying within the
budgetary allocations for these programs.
However, once again, I must highlight the myriad of programs that are
included in this conference agreement that were not considered in the
normal budgetary review process. These programs may very well have a
great deal of merit, but unless one is a member of the Appropriations
Committee, it is nearly impossible to determine what, if any, criteria
were applied to determine the relative worthiness of each of the
earmarks and set-asides in the agreement.
For example:
$5 million dollars is earmarked for a study on the cost-
effectiveness of contracting with local hospitals in east
central Florida for the provision of nonemergent inpatient
health care needs of veterans. This earmark was contained in
the House bill, but I find it difficult to determine from the
conference agreement or the House report why such a study is
so urgently needed in east Florida, rather than other areas
of the country that may be considering this type of
contracting.
As I noted when the Senate considered the bill, $10 is
earmarked for demolition and replacement of the Heritage
House in Kansas City, Mo. I still do not understand the
urgency of proceeding with this, rather than other similar
projects.
The bill earmarks $99.6 million for 120 specific Economic
Development Initiative grants, as specified in the report
language. While both bills contained these kinds of earmarks,
my colleagues might be interested to know that the amount
earmarked in the conference agreement is more than twice the
amount earmarked in the Senate bill which was $40 million. I
suspect that a scrupulous comparison of the lists of
earmarked projects in the two bills would conclude that every
project earmarked in either bill is included in this
conference agreement, and then some.
The bill contains an earmark of $15 million for the county
of San Bernardino, Ca, for neighborhood initiatives. I have
not been able to find this earmark in either the House or
Senate bill, neither of which contain any explanatory
language on this initiative.
The bill contains a section which was also included in the
Senate bill, transferring a previous $7.1 million earmark for
a Kansas City industrial park at 18th Street and Indiana
Avenue instead to the rehabilitation and infrastructure
development associated with the Negro Leagues Baseball Museum
and jazz museum at 18th and Vine.
The bill authorizes and appropriates $90 million additional
funding for construction of a consolidated EPA research
facility at Research Triangle Park, NC, and raises the total
construction cap on the project, including a child care
center and computer center, to $272.7 million. I recognize
that this provision was included in the House bill, but I
have not been able to find any justification in the bill or
report for earmarking $90 million as part of a nearly $300
million expenditure for this project, versus other worthy
projects.
The bill retains the earmarks in the Senate bill for a $50
million in grants to Texas, requiring State matching of 20
percent, for improving water and wastewater treatment
facilities for the colonias; and a $15 million grant to
Alaska to address drinking water and wastewater
infrastructure needs.
[[Page S10750]]
The bill also includes an earmark of $253.1 million for 39
specific wastewater and water treatment facilities and ground
water protection infrastructure, earmarked as stated in the
report. Again, this type of earmark was included in the
Senate and House bills, but the conference earmarked almost
three times the amount in the Senate bill.
The bill also contains three earmarks which I believe were not
included in either the Senate or House bill:
$4 million dollars is earmarked for each of three areas--a
native American area in Alaska, a rural area in Iowa, and a
rural area in Missouri--for rural economic development
grants, to test comprehensive approaches to developing a job
base through economic development, developing affordable low-
and moderate-income rental and homeownership housing, and
increasing the investment of both private and nonprofit
capital. While I understand the need to provide funding for
rural communities to improve their living standards, housing
availability, and the like, I question whether the three
areas singled out in this language are the most deserving of
4 million dollars each. And I note that the earmarks for
rural areas in Iowa and Missouri were not contained in either
bill, but were added by the conferees.
The bill includes a section, which I have not found in
either the Senate or House bill, directing FEMA to make a
grant of $1.5 million to resolve issues under the Uniform
Relocation Assistance and Real Property Acquisition Act of
1970 involving the city of Jackson, Ms. Again, the
justification provided for this project is sketchy, to say
the least.
The bill contains a section which cancels the indebtedness
of the village of Robbins, IL, for HUD-guaranteed water and
sewer bonds, including principal, interest, and any fees and
other charges. Again, I could find no mention of this
proposal in either the Senate or House bills.
As I have said many times, these types of earmarks added in
conference are an egregious evasion of the normal budget review
process, which this body should not condone.
I will not elaborate on the many earmarks and set-aside in the report
language of the conference agreement.
I ask unanimous consent that the objectionable provisions be printed
in the Record.
There being no objection, the list was ordered to be printed in the
Record, as follows:
Objectionable Provisions in H.R. 2158, Conference Agreement on Fiscal
Year 1998 VA/HUD/Independent Agencies Appropriations
Bill Language
$5 million earmarked for a study on the cost-effectiveness
of contracting with local hospitals in East Central Florida
for the provision of non-emergent inpatient health care needs
of veterans.
Prohibition on relocating the loan guaranty divisions of
the Department of Veterans Affairs Regional Office in St.
Petersburg, Florida to the Department of Veterans Affairs
Regional Office in Atlanta, Georgia, because the conferees do
not believe the VA has adequately justified the proposed
relocation and has not provided a detailed cost-benefit
analysis including comparison of savings for the cost of
space and personnel.
$10 earmarked for demolition and replacement of the
Heritage House in Kansas City, Missouri.
$4 million earmarked for each of three areas--a Native
American area in Alaska, a rural area in Iowa, and a rural
area in Missouri--for rural economic development grants, to
test comprehensive approaches to developing a job base
through economic development, developing affordable low- and
moderate-income rental and homeownership housing, and
increasing the investment of both private and nonprofit
capital.
$99.6 million earmarked for 120 specific Economic
Development Initiative grants as specified in the report
language.
$15 million earmarked for the County of San Bernardino,
California, for neighborhood initiatives.
$3.5 million earmarked for the non-Federal cost-share of
the levee project at Devils Lake, North Dakota.
Sec. 203--Waives the requirement that the City of Oglesby,
Illinois, hold public hearings concerning an environmental
assessment for a warehouse project.
Sec. 206--$7.1 million transferring an earmark for a Kansas
City industrial park at 18th Street and Indiana Avenue
instead to the rehabilitation and infrastructure development
associated with the Negro Leagues Baseball Museum and jazz
museum at 18th and Vine.
Sec. 218--Cancels the indebtedness of the Village of
Robbins, Illinois, for HUD-guaranteed water and sewer bonds,
including principal, interest, and any fees and other
charges.
Authorizes and appropriates $90 million additional funding
for construction of a consolidated EPA research facility at
Research Triangle Park, North Carolina, and raises the total
construction cap on the project, including a child care
center and computer center, to $272.7 million.
Earmarks $50 million for grants to Texas, requiring state
matching of 20 percent, for improving water and wastewater
treatment facilities for the colonias.
$15 million earmarked for grants to Alaska to address
drinking water and wastewater infrastructure needs.
Earmarks $253.1 million for 39 specific wastewater and
water treatment facilities and groundwater protection
infrastructure, earmarked as stated in the report.
Directs FEMA to make a grant of $1.5 million to resolve
issues under the Uniform Relocation Assistance and Real
Property Acquisition Act of 1970 involving the City of
Jackson, Mississippi.
Sec. 415--``Buy America'' protections.
REPORT LANGUAGE
[NOTE: Conferees state that they endorse all language in
the House and Senate reports that is not explicitly
contradicted in the conference agreement. Therefore, all
earmarks and set-aside in the underlying reports remain valid
unless reversed in the conference agreement.]
Earmarks $6 million for the Musculoskeletal Disease
Prevention and Treatment Research Center at the Jerry L.
Pettis Memorial VA Medical Center in Loma Linda, California.
Explicit emphasis on report language regarding expanding an
outpatient clinic in Williamsport, Pennsylvania, activation
costs for construction projects at the medical centers in
Wilkes-Barre, Pennsylvania, and Phoenix, Arizona; and the
demonstration project involving the Clarksburg VA Medical
Center and Ruby Memorial Hospital.
Urges VA to establish a community-based outpatient clinic
in Brookhaven, New York.
Supportive language for the two-year pilot project in New
England and Hawaii, funded through the Department of Defense,
to explore improved and innovative methods of diabetes
detection, prevention, and care.
Encourages VA to examine carefully the work in Detroit
associated with Population and Resources Management
Information Network, and to consider setting aside an
appropriate amount of funds for development and analytical
work associated with that system.
Earmarks $98.4 million for 7 major construction projects of
the VA, including a $4 million add-on for a cemetery in
Arizona.
Earmarks $1.5 million for expansion of the existing
national cemetery in Mobile, Alabama.
Earmarks $1.5 million to increase the number of niches at
the columbarium at the National Memorial Cemetery of the
Pacific.
Earmarks $48.3 million for 23 specific science and
technology projects.
Earmarks $8 million of the funding set aside for research
on EPA particulate matter standards to create ``up to five
university-based research centers focused on PM-related
environment and health effects;'' establishes certain
governing criteria and guidelines for selection of these
centers, although the report states the selection is to be
competitive.
Earmarks $76.5 million from the budget for environmental
programs and management at EPA for 60 specific projects.
Earmarks $2.5 million of the EPA's hazardous substance
Superfund to continue a study on the health effects of
consuming Great Lakes fish, and 2 million for continued work
on the Toms River, New Jersey cancer evaluation and research
project.
Encourages EPA to implement a fixed-price, at-risk
contracting proposal for cleanup of the Carolina Transformer
Site in North Carolina.
Urges immediate construction at the Pepe Field Superfund
site in Boonton, New Jersey.
Recognizes the acute need for additional water treatment
capacity in San Diego County, California, although limited
funds prevented the conferees from earmarking an amount for
this project.
States awareness of San Diego's application for grant
assistance through the U.S.-Mexico border programs for the
South Bay Water Reclamation Facility, and urges that the
matter be reviewed carefully for appropriate support.
Notes support for construction of the Jonathan Rogers plant
in El Paso, Texas, and encourages EPA to provide an
appropriate amount from the border infrastructure fund to
support the project.
Earmarks $500,000 from FEMA's emergency management planning
funds for a comprehensive analysis and plan of evacuation
alternatives for the New Orleans metropolitan area.
States awareness of proposals by the International
Hurricane Center at Florida International University to apply
advanced high-accuracy satellite laser altimeter surveying
techniques to coastal and flood plain modeling and post
natural disaster damage assessments, and urges FEMA to
consider funding such proposals from discretionary funds.
Notes that Point Coupee Parish, Louisiana, faces the
potential threat of multiple disasters, including weather-
related threats, and urges FEMA to provide support for
installation and testing of a prototype communications
system.
Urges NASA to make available underutilized facilities at
the Stennis Space Center for use by industry in launch
vehicle development activities.
Earmarks $19.65 million from NASA's aeronautics and
technology funds for 9 specific projects.
Earmarks $5 million of NASA's mission support funds for
facilities enhancements at Stennis Space Center.
[[Page S10751]]
Prohibition on relocating NASA aircraft based east of the
Mississippi River (at the Wallops Island flight facility) to
the Dryden Flight Research Center in California.
Earmarks $1 million of National Science Foundation funds
for the U.S./Mexico Foundation.
Mr. McCAIN. Mr. President, this is not an exhaustive list of all the
earmarks the conferees endorsed. As with previously submitted
conference agreements, the conferees explicitly state in the report
that they endorse all the provisions of the Senate and House reports on
the bill, unless they are explicitly contradicted or addressed in the
conference report. So there are a lot more earmarks that the conferees
intend that the agencies will adhere to in allocating appropriated
funds.
Again, Mr. President, I hesitate to say that all of these earmarks
and set-asides are wasteful, or unnecessary. I want to stress that
these projects may very well have merit and may very well be worthy of
inclusion in this bill.
But the process the Congress established for itself, which involves
both authorization and appropriation of spending items, is routinely
ignored in the appropriations bills. These unauthorized and locality
specific earmarks and add-ons have bypassed the normal agency review
process and have bypassed the authorization process. They have simply
been included in the appropriations bill because a small segment of the
Senate or House, those who serve on Appropriations Committee, decided
to include them.
Mr. President, the American people deserve to know how their money is
spent, and why. Millions of dollars will be spent for the projects on
the attached list, and I doubt that most Senators know why these
projects were chosen for earmarks or set-asides. The American people
certainly don't have access to that information.
I intend to send a letter to the President asking that he consider
using his line-item veto authority to eliminate these spending items
from this bill. That is why we gave him a line-item veto--to eliminate
wasteful, unnecessary, and low-priority spending. He has already
demonstrated his willingness to use the line-item veto, and I hope he
continues to exercise that authority when clearly necessary.
Mr. President, as I said, I support the majority of the provisions of
this bill, and I intend to vote for it. I am thankful, however, that a
mechanism now exists that could, if utilized, eliminate the earmarks
and set-asides in this bill to which I must object.
particulate matter research
Mrs. BOXER. Mr. President, I would like to mention one issue of
concern in the conference report on appropriations for the
Environmental Protection Agency. It is in regard to report language on
the Particulate Matter Research Program.
I agree that we need more research on the sources and the health
effects of particulate matter and strongly support this bill's
appropriation of funds for new research. However, I would like to make
it clear, for the record, that I do not agree with the conference
report language that says that ``we do not yet have available
sufficient facts necessary to proceed with future regulations for a new
particulate matter standard.''
The EPA standards are based on the best available science regarding
the health effects of exposure to particulate matter. Some argue that
we should not proceed until we have scientific proof of the exact
relationship between exposures to particulate matter, and health
effects.
If we applied that principle in the late 1970's, we would not be
enjoying the benefits of our current standards which have led to, for
example, air pollution from carbon monoxide being reduced by 28
percent, from sulphur dioxide 41 percent, and from lead 98 percent.
The PRESIDING OFFICER. All time has expired.
Under the previous order, the conference report to accompany H.R.
2158 is agreed to.
The conference agreement was agreed to.
Mr. BOND. Mr. President, I thank all of my colleagues and the
leadership for allowing us to proceed in a timely fashion on this
matter.
I have mentioned only briefly my appreciation for the work of my
ranking member, Senator Mikulski. Truly, there is no better person to
have in a very complicated matter like this than to have someone of
Senator Mikulski's ability, perspicacity, and dedication to right and
justice to carry through on this.
I am deeply grateful for her cooperation, the cooperation of the
leadership on her side, and particularly the leadership of both sides
of the aisle on the Banking Committee which authorizes housing programs
without which we would not have been able to accomplish mark-to-market.
Senator Mack and his staff, in particular, Senator D'Amato, Senator
Sarbanes, Senator Kerry have been helpful.
I express my thanks to Andy Givens, Stacy Closson, and David Bowers
on the minority. We could not have done this on our side without the
dedicated work of John Kamarck, Carrie Apostolou, and of Sarah
Horrigan, who assisted us as representatives on loan from the Office of
Management and Budget.
Mr. President, again, I express my appreciation to my ranking member.
Ms. MIKULSKI. Mr. President, now that we have concluded our bill, I
too want to express my appreciation to Senator Bond and his very able
staff--I am sorry Sarah Horrigan is not with us, her able cooperation--
and, to my own staff, Andy Givens, David Bowers, and Stacy Closson.
I wish all bills could move as quickly and as rigorously and
thoroughly as ours did. I yield the floor.
Mr. BOND. 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. LAUTENBERG. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Privilege of the Floor
Mr. LAUTENBERG. Mr. President, I ask unanimous consent that the
privilege of the floor be granted to the following detailee to my
staff: Mr. Peter Neffinger.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LAUTENBERG. Mr. President, 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. BUMPERS. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Arkansas is recognized.
Mr. BUMPERS. I thank the Chair.
(The remarks of Mr. Bumpers pertaining to the introduction of S. 1283
are located in today's Record under ``Statements on Introduced Bills
and Joint Resolutions.'')
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