[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

[[Page S10734]]

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

[[Page S10736]]

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

[[Page S10737]]

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.'')

                          ____________________