Congressional Record, Volume 146 Issue 100 (Thursday, July 27, 2000)

[Congressional Record Volume 146, Number 100 (Thursday, July 27, 2000)]
[Senate]
[Pages S7908-S7921]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

DRUG COMPETITION ACT

Mr. LEAHY. Mr. President, I have heard a lot of outrageous examples
of greed in my life but one of the worst is where pharmaceutical giants
pay generic drug companies to keep low-cost drugs from senior citizens
and from families.
If Dante were still alive today I am certain he would find a special
resting place for those who engage in these conspiracies.
The Federal Trade Commission and the New York Times deserve credit
for exposing this problem. Simply stated: some manufacturers of
patented drugs--often brand-name drugs--are paying millions each month
to generic drug companies to keep lower-cost products off the market.
This hurts senior citizens, it hurts families, it cheats healthcare
providers and it is a disgrace.
These pharmaceutical giants and their generic partners then share the
profits gained from cheating American families.
The companies have been able to get away with this by signing secret
deals with each other not to compete. My bill, which I am introducing
today, will expose these deals and subject them to immediate
investigation and action by the Federal Trade Commission, or the
Justice Department. This solves the most difficult problem faced by
federal investigators--finding out about the improper deals. This bill
does not change the so-called Hatch-Waxman Act, it does not amend FDA
law, and it does not slow down the drug approval process. It allows
existing antitrust laws to be enforced because the enforcement agencies
have information about deals not to compete.
Fortunately, the FTC was able to get copies of a couple of these
secret contracts and instantly lowered the boom on the companies
Mr. President, I ask unanimous consent that an editorial in the July
26, New York Times, called ``Driving Up Drug Prices'' be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Driving Up Drug Prices

Two recent antitrust actions by the Federal Trade
Commission and a related federal court decision have exposed
the way some pharmaceutical companies conspire to keep low-
priced drugs out of reach of consumers. Manufacturers of
patented drugs are paying tens of millions of dollars to
manufacturers of generic drugs if they agree to keep products
off the market. The drug companies split the profits from
maintaining a monopoly at the consumer's expense. The
commission is taking aggressive action to curb the practice.
It needs help from Congress to close loopholes in federal
law.
Dissatisfied with the supply of generic drugs, Congress
passed the Hatch-Waxman act in 1984 to encourage
manufacturers to challenge weak or invalid patents on brand-
name drugs. The act grants temporary protection from
competition to the first manufacturer that receives
permission from federal authorities to sell a generic drug
before the patent on a brand-name drug expires. For 180 days,
the federal government promises to approve no other generic
drug.
But as reported Sunday by Sheryl Gay Stolberg and Jeff
Gerth of The Times, drug companies are undermining Congress's
intent. Hoechst Marion Roussel, the maker of drugs to treat
hypertension and angina, agreed in 1997 to pay Andrx
Pharmaceuticals to delay bringing its generic alternative to
market. The commission brought charges against the companies
last March and a federal judge declared last month in a
private lawsuit that the agreement violated antitrust laws.
In a second case, Abbott Laboratories paid Geneva
pharmaceuticals to delay selling a generic alternative to an
Abbott drug that treats hypertension and enlarged prostates.
Geneva's drug could have cost Abbott over 30 million a month
in sales. In both cases, the manufacturer of the generic drug
used its claim to the 180-day grace period to block other
generic drugs from entering the market.
The drug companies deny that their agreements violate the
antitrust laws, presenting them as private preliminary
settlements between companies engaged in patent disputes.
That is untenable. The agreements are overly broad,
temporarily stopping all sales of generic drugs. Typically in
settlement of a patent dispute, the company infringing on the
patent would pay the patent holder. In these cases it is
reversed, stunting competition. The agreements are also
private, going into effect before a court reviews the public
interest.
Not all private settlements are anti-consumer. That is why
the commission has taken a careful case-by-case approach. It
could use a little help from congress. The 180-day grace
period was designed to encourage generics to enter the
market. Since it is being manipulated to impede competition,
the grace period needs to be fixed so that the production of
generic drugs cannot be blocked by a single company that
decides not to compete.

Mr. LEAHY. This editorial neatly summarizes the problem and concludes
that the FTC ``is taking aggressive action to curb the practice. It
needs help from Congress to close loopholes in federal law.''
My bill slams the door shut on would-be violators by exposing the
deals to our competition enforcement agencies.
Under current law, manufacturers of generic drugs are encouraged to
challenge weak or invalid patents on brand-name drugs so that consumers
can enjoy lower generic drug prices.
Current law grants these generic companies a temporary protection
from competition to the first manufacturer that gets permission to sell
a generic drug before the patent on the brand-name drug expires.
This approach then gives the generic company a 180-day headstart on
other generic companies.
That was a good idea--the unfortunate loophole exploited by a few is
that secret deals can be made that allow the manufacturer of the
generic drug to claim the 180-day grace period--to block other generic
drugs from entering the market--while, at the same time, getting paid
by the brand-name manufacturer to not sell the generic drug.
The bill I am introducing today will shut this loophole down for
companies who want to cheat the public, but keeps the system the same
for companies engaged in true competition with each other. This bill
would give the FTC or the Justice Department the information it needs
to take quick and decisive action against companies driven more by
greed than by good sense.
I think it is important for Congress not to overreact in this case
and throw out the good with the bad. Most generic companies want to
take advantage of this 180-day provision and deliver quality generic
drugs at much lower costs for consumers. We should not eliminate the
incentive for them.
Instead, we should let the FTC and Justice look at every single deal
that could lead to abuse so that only the deals that are consistent
with the intent of that law will be allowed to stand.
This bill was quickly drafted because I wanted my colleagues to be
able to look at it over the recess so that we can be ready to act when
we get back in session.
I look forward to suggestions from other Members on this matter and
from brand-name and generic companies who will work with me to make
sure this loophole is closed. I am not interested in comments from
companies who want to continue to cheat consumers.
I ask unanimous consent to print the bill in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 2993

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

SECTION. 1. SHORT TITLE

This Act may be cited as the ``Drug Competition Act of
2000.''

SEC. 2. FINDINGS.

Congress finds that--
(1) prescription drug costs are increasing at an alarming
rate and are a major worry of senior citizens and American
families;
(2) there is a potential for drug companies owning patents
on brand-name drugs to enter to private financial deals with
generic drug companies in a manner that could tend to
restrain trade and greatly reduce competition and increase
prescription drug costs for American citizens; and
(3) enhancing competition between generic drug
manufacturers and brand name manufacturers can significantly
reduce prescription drug costs to American families.

SEC. 3. PURPOSE.

The purposes of this Act are--
(1) to provide timely notice to the Department of Justice
and the Federal Trade Commission regarding agreements between
companies owning patents on branded drugs and companies who
could manufacture generic or bioequivalent versions of such
branded drugs; and
(2) by providing timely notice, to--

[[Page S7909]]

(A) enhance the effectiveness and efficiency of the
enforcement of the antitrust laws of the United States; and
(B) deter pharmaceutical companies from engaging in
anticompetitive actions or actions that tend to unfairly
restrain trade.

SEC. 4. DEFINITIONS.

In this Act:
(1) Agreement.--The term ``agreement'' means an agreement
under section 1 of the Sherman Act (15 U.S.C. 1) or section 5
of the Federal Trade Commission Act (15 U.S.C. 45).
(2) Antitrust laws.-- The term ``antitrust laws'' has the
same meaning as in section 1 of the Clayton Act (15 U.S.C.
12), except that such term includes section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent that such
section applies to unfair methods of competition.
(3) ANDA.--The term ``ANDA'' means an Abbreviated New Drug
Application, as defined under section 505(j) of the Federal
Food, Drug and Cosmetic Act.
(4) Brand name drug company.--The term ``brand name drug
company'' means a person engaged in the manufacture or
marketing of a drug approved under section 505(b) of the
Federal Food, Drug and Cosmetic Act.
(5) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(6) FDA.--The term ``FDA'' means the United States Food and
Drug Administration.
(7) Generic drug.--The term ``generic drug'' is a product
that the Food and Drug Administration has approved under
section 505(j) of the Federal Food, Drug and Cosmetic Act.
(8) Generic drug applicant.--The term ``generic drug
applicant'' means a person who has filed or received approval
for an ANDA under section 505(j) of the Federal Food, Drug
and Cosmetic Act.
(9) NDA.--The term ``NDA'' means a New Drug Application, as
defined under 505(b) of the Federal, Food, Drug, and Cosmetic
Act et seq. (21 U.S.C. 355(b) et seq.)

SEC. 5. NOTIFICATION OF AGREEMENTS AFFECTING THE SALE OR
MARKETING OF GENERIC DRUGS.

A brand name drug manufacturer and a generic drug
manufacturer that enter into an agreement regarding the sale
or manufacture of a generic drug equivalent of a brand name
drug that is manufactured by that brand name manufacturer and
which agreement could have the effect of limiting--
(1) the research, development, manufacture, marketing or
selling of a generic drug product that could be approved for
sale by the FDA pursuant to the ANDA; or
(2) the research, development, manufacture, marketing or
selling of a generic drug product that could be approved by
the FDA;
both shall file with the Commission and the Attorney General
the text of the agreement, an explanation of the purpose and
scope of the agreement and an explanation of whether the
agreement could delay, restrain, limit, or in any way
interfere with the production, manufacture or sale of the
generic version of the drug in question.

SEC. 6. FILING DEADLINES.

Any notice, agreement, or other material required to be
filed under section 5 shall be filed with the Attorney
General and the FTC not later than 10 business days after the
date the agreements are executed.

SEC. 7. ENFORCEMENT.

(a) Civil Fine.--Any person, or any officer, director, or
partner thereof, who fails to comply with any provision of
this Act shall be liable for a civil penalty of not more than
$20,000 for each day during which such person is in violation
of this Act. Such penalty may be recovered in a civil action
brought by the United States, or brought by the Commission in
accordance with the procedures established in section
16(a)(1) of the Federal Trade Commission Act (15 U.S.C.
56(a)).
(b) Compliance and Equitable Relief.--If any person, or any
officer, director, partner, agent, or employee thereof, fails
to comply with the notification requirement under section 5
of this Act, the United States district court may order
compliance, and may grant such other equitable relief as the
court in its discretion determines necessary or appropriate,
upon application of the Commission or the Assistant Attorney
General.

SEC. 8. RULEMAKING.

The Commission, with the concurrence of the Assistant
Attorney General and by rule in accordance with section 553
of title 5, consistent with the purposes of this Act--
(1) may require that the notice described in section 5 of
this Act be in such form and contain such documentary
material and information relevant to the agreement as is
necessary and appropriate to enable the Commission and the
Assistant Attorney General to determine whether such
agreement may violate the antitrust laws;
(2) may define the terms used in this Act;
(3) may exempt classes of persons or agreements from the
requirements of this Act; and
(4) may prescribe such other rules as may be necessary and
appropriate to carry out the purposes of this Act.

SEC. 9. EFFECTIVE DATES.

This Act shall take effect 90 days after the date of
enactment of this Act.
______

By Mr. ROBB:
S. 2994. A bill to amend the Internal Revenue Code of 1986 to provide
tax incentives to encourage small business health plans, and for other
purposes; to the Committee on Finance.

the health insurance equity act

Mr. ROBB. Mr. President, I rise to introduce a new legislative
proposal to help level the playing field for small businesses that try
to provide health insurance for their employees and make health
insurance more affordable for all Americans.
While our economy is the strongest it's ever been, the number of
uninsured Americans has gone from 32 million in 1987 to more than 44
million today. And that number is rising. While our nation continues to
forge ahead in improving the world's greatest health care system, we
face the increasing problem of having a significant percentage of our
population that has no way to access it.
One of the largest sectors of the uninsured is employees who work for
small businesses. While small businesses are the lifeblood of our
economy, they also face some of the greatest challenges--particularly
when it comes to providing health benefits for their employees. While
the number of uninsured among employees who work for companies with
more than 500 people is 1 in 8, that number soars among companies with
fewer than 25 employees--to 1 in 3. This is because large employers can
spread the costs of providing health insurance among their multitude of
employees, while smaller companies have a much more difficult task. We
need to help small business owners--and the employees who work for
them--better afford quality health insurance.
Today, I propose that we lend a hand to the hardworking small
businessmen and women of America, and their employees, to help them
erase the gap in coverage between large and small businesses. The
legislation I am introducing--the Health Insurance Equity Act--will
give small businesses with less than 50 employees a 20% tax credit
toward the cost of buying health insurance for their employees. To
encourage small businesses to pool together and take advantage of the
same benefits that their larger counterparts have, the credit will
increase to 25% if the businesses join new ``qualified health benefit
purchasing coalitions'' that can help them easily administer their new
health plans and negotiate better rates with insurers.
In addition, this legislation makes a change in the tax code to
ensure that these new coalitions can enjoy the full benefit of
charitable contributions from private foundations. While some private
foundations have indicated that they are willing to help fund some of
the start-up costs of health purchasing coalitions, current law does
not specify that these sorts of contributions would qualify as a
charitable donation. For this reason, private foundations have been
reluctant to make grants or loans to these coalitions. The bill I am
introducing today will clarify that aid to qualified health benefit
purchasing coalitions are entirely tax-deductible, which can help
encourage private foundations and other interested parties to help the
coalitions with their important duties.
By helping people get better access to basic health insurance--before
they get very sick--we can save money for both hospital and patient,
while helping millions of Americans live more healthy lifestyles.
With that Mr. President, I send my legislation to the desk, and ask
that it be appropriately referred. I also ask unanimous consent that it
be printed in the Record. I yield the floor.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 2994

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Health Insurance Equity Act
of 2000''.

SEC. 2. CERTAIN GRANTS BY PRIVATE FOUNDATIONS TO QUALIFIED
HEALTH BENEFIT PURCHASING COALITIONS.

(a) In General.--Section 4942 of the Internal Revenue Code
of 1986 (relating to taxes on failure to distribute income)
is amended by adding at the end the following:
``(k) Certain Qualified Health Benefit Purchasing Coalition
Distributions.--
``(1) In general.--For purposes of subsection (g) and
section 4945(d)(5), a qualified health benefit purchasing
coalition distribution by a private foundation shall be
considered to be a distribution for a charitable purpose.
``(2) Qualified health benefit purchasing coalition
distribution.--For purposes of paragraph (1)--

[[Page S7910]]

``(A) In general.--The term `qualified health benefit
purchasing coalition distribution' means any amount paid by a
private foundation to or on behalf of a qualified health
benefit purchasing coalition (as defined in section 9841) for
purposes of payment or reimbursement of start-up costs paid
or incurred in connection with the establishment and
maintenance of such coalition.
``(B) Exclusions.--Such term shall not include any amount
used by a qualified health benefit purchasing coalition (as
so defined)--
``(i) for the purchase of real property,
``(ii) as payment to, or for the benefit of, members (or
employees or affiliates of such members) of such coalition,
or
``(iii) for start-up costs paid or incurred more than 24
months after the date of establishment of such coalition.
``(3) Termination.--This subsection shall not apply--
``(A) to qualified health benefit purchasing coalition
distributions paid or incurred after December 31, 2008, and
``(B) with respect to start-up costs of a coalition which
are paid or incurred after December 31, 2010.''.
(b) Effective Date.--The amendment made by this subsection
shall apply to qualified health benefit purchasing coalition
distributions, as defined in section 4942(k)(2) of the
Internal Revenue Code of 1986, as added by subsection (a),
paid in taxable years beginning after December 31, 2000.

SEC. 3. SMALL BUSINESS HEALTH PLAN TAX CREDIT.

(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business-related credits) is amended by adding at the end the
following:

``SEC. 45D. EMPLOYEE HEALTH INSURANCE EXPENSES.

``(a) General Rule.--For purposes of section 38, in the
case of a small employer (as defined in section 4980D(d)(2)),
the employee health insurance expenses credit determined
under this section for the taxable year is an amount equal to
the applicable percentage of the amount paid by the taxpayer
during the taxable year for qualified employee health
insurance expenses.
``(b) Applicable Percentage.--For purposes of subsection
(a), the applicable percentage is--
``(1) in the case of insurance purchased as a member of a
qualified health benefit purchasing coalition (as defined in
section 9841), 25 percent, and
``(2) in the case of insurance not described in paragraph
(1), 20 percent.
``(c) Per Employee Dollar Limitation.--
``(1) In general.--The amount of qualified employee health
insurance expenses taken into account under subsection (a)
with respect to any qualified employee for any taxable year
shall not exceed the sum of the monthly limitations for
coverage months of such employee during such taxable year.
``(2) Monthly limitation.--The monthly limitation for each
coverage month during the taxable year is equal to \1/12\
of--
``(A) $2,000 in the case of self-only coverage, and
``(B) $5,000 in the case of family coverage.
``(3) Coverage month.--For purposes of this subsection, the
term `coverage month' means, with respect to an individual,
any month if--
``(A) as of the first day of such month such individual is
covered by the taxpayer's new health plan, and
``(B) the premium for coverage under such plan for such
month is paid by the taxpayer.
``(d) Definitions.--For purposes of this section--
``(1) Qualified employee.--
``(A) In general.--The term `qualified employee' means,
with respect to any period, an employee of an employer if--
``(i) the total amount of wages paid or incurred by such
employer with respect to such employee for the taxable year
is not in excess of $10,000, and
``(ii) the employee is not a highly compensated employee.
``(B) Treatment of certain employees.--For purposes of
subparagraph (A), the term `employee' shall include--
``(i) an employee within the meaning of section 401(c)(1),
and
``(ii) a leased employee within the meaning of section
414(n).
``(C) Exclusion of certain employees.--
``(i) In general.--If a plan--

``(I) prescribes minimum age and service requirements as a
condition of coverage, and
``(II) excludes all employees not meeting such requirements
from coverage,

then such employees shall be excluded from consideration for
purposes of this paragraph.
``(ii) Collective bargaining agreement.--For purposes of
this paragraph, there shall be excluded from consideration
employees who are included in a unit of employees covered by
an agreement between employee representatives and one or more
employers, if there is evidence that health insurance
benefits were the subject of good faith bargaining between
such employee representatives and such employer.
``(iii) Limits on minimum requirements.--Rules similar to
the rules of section 410(a) shall apply with respect to
minimum age and service requirements under clause (i).
``(D) Wages.--The term `wages'--
``(i) has the meaning given such term by section 3121(a)
(determined without regard to any dollar limitation contained
in such section), and
``(ii) in the case of an employee described in subparagraph
(B)(i), includes the net earnings from self-employment (as
defined in section 1402(a) and as so determined).
``(2) Qualified employee health insurance expenses.--
``(A) In general.--The term `qualified employee health
insurance expenses' means any amount paid or incurred by an
employer during the applicable period for health insurance
coverage provided under a new health plan to the extent such
amount is attributable to coverage provided to any employee
who is not a highly compensated employee.
``(B) Exception for amounts paid under salary reduction
arrangements.--No amount paid or incurred for health
insurance coverage pursuant to a salary reduction arrangement
shall be taken into account under subparagraph (A).
``(C) Health insurance coverage.--The term `health
insurance coverage' has the meaning given such term by
section 9832(b)(1).
``(D) New health plan.--For purposes of this paragraph, the
term `new health plan' means any arrangement of the employer
which provides health insurance coverage to employees if--
``(i) such employer (or predecessor employer) did not
establish or maintain such arrangement (or any similar
arrangement) at any time during the 2 taxable years ending
prior to the taxable year in which the credit under this
section is first allowed, and
``(ii) such arrangement covers at least 70 percent of the
qualified employees of such employer who are not otherwise
covered by health insurance.
``(E) Applicable period.--For purposes of subparagraph (A),
the applicable period with respect to an employer shall be
the 4-year period beginning on the date such employer
establishes a new health plan.
``(3) Highly compensated employee.--The term `highly
compensated employee' means an employee who for the preceding
year had compensation from the employer in excess of $75,000.
``(e) Certain rules made applicable.--For purposes of this
section, rules similar to the rules of section 52 shall
apply.
``(f) Disallowance of Deduction.--No deduction shall be
allowed for that portion of the qualified employee health
insurance expenses for the taxable year which is equal to the
amount of the credit determined under subsection (a).
``(g) Termination.--This section shall not apply to
expenses paid or incurred by an employer with respect to any
arrangement established on or after January 1, 2009.''.
(b) Credit To Be Part of General Business Credit.--Section
38(b) of the Internal Revenue Code of 1986 (relating to
current year business credit) is amended by striking ``plus''
at the end of paragraph (11), by striking the period at the
end of paragraph (12) and inserting ``, plus'', and by adding
at the end the following:
``(13) the employee health insurance expenses credit
determined under section 45D.''
(c) No Carrybacks.--Subsection (d) of section 39 of the
Internal Revenue Code of 1986 (relating to carryback and
carryforward of unused credits) is amended by adding at the
end the following:
``(9) No carryback of section 45D credit before effective
date.--No portion of the unused business credit for any
taxable year which is attributable to the employee health
insurance expenses credit determined under section 45D may be
carried back to a taxable year ending before the date of the
enactment of section 45D.''
(d) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following:

``Sec. 45D. Employee health insurance expenses.''

(e) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2000, for arrangements
established after the date of the enactment of this Act.

SEC. 4. QUALIFIED HEALTH BENEFIT PURCHASING COALITION.

(a) In General.--Chapter 100 of the Internal Revenue Code
of 1986 (relating to group health plan requirements) is
amended by adding at the end the following new subchapter:

``Subchapter D--Qualified Health Benefit Purchasing Coalition

``Sec. 9841. Qualified health benefit purchasing coalition.

``SEC. 9841. QUALIFIED HEALTH BENEFIT PURCHASING COALITION.

``(a) In General.--A qualified health benefit purchasing
coalition is a private not-for-profit corporation which--
``(1) is licensed to provide health insurance in the State
in which the employers to which such coalition is providing
insurance is located, and
``(2) establishes to the Secretary, under State
certification procedures or other procedures as the Secretary
may provide by regulation, that such coalition meets the
requirements of this section.
``(b) Board of Directors.--
``(1) In general.--Each purchasing coalition under this
section shall be governed by a Board of Directors.
``(2) Election.--The Secretary shall establish procedures
governing election of such Board.

[[Page S7911]]

``(3) Membership.--The Board of Directors shall--
``(A) be composed of small employers and employee
representatives of such employers, but
``(B) not include other interested parties, such as service
providers, health insurers, or insurance agents or brokers
which may have a conflict of interest with the purposes of
the coalition.
``(c) Membership of Coalition.--
``(1) In general.--A purchasing coalition--
``(A) shall accept all small employers residing within the
area served by the coalition as members if such employers
request such membership, and
``(B) may accept any other employers residing with such
area.
``(2) Voting.--Members of a purchasing coalition shall have
voting rights consistent with the rules established by the
State.
``(d) Duties of Purchasing Coalitions.--Each purchasing
coalition shall--
``(1) enter into agreements with employers to provide
health insurance benefits to employees of such employers,
``(2) enter into agreements with 3 or more unaffiliated,
qualified licensed health plans, to offer benefits to
members,
``(3) offer to members at least 1 open enrollment period
per calendar year,
``(4) serve a significant geographical area, and
``(5) carry out other functions provided for under this
section.
``(e) Limitation on Activities.--A purchasing coalition
shall not--
``(1) perform any activity (including certification or
enforcement) relating to compliance or licensing of health
plans,
``(2) assume insurance or financial risk in relation to any
health plan, or
``(3) perform other activities identified by the State as
being inconsistent with the performance of its duties under
this section.
``(f) Additional Requirements For Purchasing Coalitions.--
As provided by the Secretary in regulations, a purchasing
coalition shall be subject to requirements similar to the
requirements of a group health plan under this chapter.
``(g) Definition of Small Employer.--The term `small
employer' has the meaning given such term by section
4980D(d)(2).''.
(b) Conforming Amendment.--The table of subchapters for
chapter 100 of the Internal Revenue Code of 1986 is amended
by adding at the end the following item:
``Subchapter D. Qualified health benefit purchasing coalition.''.
______

By Mr. L. CHAFEE (for himself, Mr. Bennett, Mr. Cleland, Mr.
Jeffords, Mr. Levin, Mr. Lieberman, Mr. Leahy, and Mr. Baucus):
S. 2995. A bill to assist States with land use planning in order to
promote improved quality of life, regionalism, sustainable economic
development, and environmental stewardship, and for other purposes; to
the Committee on Energy and Natural Resources.

the community character act of 2000

Mr. L. CHAFEE. Mr. President, I rise today to speak of an issue which
effects every American, and future generations of Americans.
As the saying goes, ``burn me once, shame on you, burn me twice,
shame on me.''
After the second World War, waves of returning GIs--looking for a
better life for themselves and their families--helped create a
unprecedented building boom in the United States. The potato fields of
Long Island were turned into massive tracts of uniform new houses known
as Levittown. This same post-World War II growth at one point so
overwhelmed my own home town of Warwick, Rhode Island that the state
newspaper described the city as ``a suburban nightmare''. Before long,
strip retail development catering to the automobile became the
trademark of the American landscape.
Our landscape has since been pockmarked by incremental, haphazard
development, which too often offends the eye, and saps our economic
strength by requiring very expensive investment for extending
infrastructure farther and father into the country side. Driving down
the street in Anytown USA you see an apartment house next to a fast
food franchise, next to a fire station, next to an office building,
next to a strip mall. That isn't planned development.
Over forty years after Levittown, we find ourselves in a strong
economy sustained as never before. At the same time, every state in the
country face significant problems relating to unplanned growth, from
protecting open space in the east to protecting precious drinking water
supplies in the west. We ought to seize the moment and learn from our
previous mistakes--we should not be burned twice.
The last thing anyone needs, citizens and developers alike, is to
have angry and divisive planning board, zoning board or city or town
council meetings. The best thing we can do to ensure wise growth is to
encourage decision makers to work together with the citizens,
developers, interest groups and others to develop a consensus for
planning for growth in an orderly manner.
That is what the Community Character Act does.
Mr. President, I rise today with my colleagues, Senators Bennett,
Cleland, Jeffords, Levin, Lieberman and Leahy to introduce a bill that
I believe will help states plan wise growth. This bill, Community
Character Act of 2000, seeks to authorize $25 million over four years
for a grant program to help states develop or update their land use
statutes and Comprehensive Plans.
No state in the nation is immune from the effects of rapid unplanned
development. Suburbanization is expensive, costing state and local
taxpayers dearly for extending roads and infrastructure, and building
new schools. Even states considered more rural are now facing rapid
alterations in land use and quality of life.
Federal grants under this act would help states promote citizen
participation in the developing of state plans, encourage sustainable
economic development, coordinate transportation and other
infrastructure development, conserve historic scenic resources and the
environment, and sustainably manage natural resources.
I am pleased that this bill has such bipartisan support and hope that
the full Senate will give it favorable action.
I thank the chair and ask unanimous consent that my full statement
and the text of the bill appear in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 2995

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Community Character Act of
2000''.

SEC. 2. FINDINGS.

Congress finds that--
(1) inadequate planning at the State level contributes to
increased public and private capital costs for infrastructure
development, loss of community character, and environmental
degradation;
(2) land use planning is rightfully within the jurisdiction
of State and local governments;
(3) comprehensive planning and community development should
be supported by the Federal Government and State governments;
(4) States should provide a proper climate and context for
planning through legislation in order for appropriate
comprehensive land use planning and community development to
occur;
(5) many States have outdated land use planning
legislation, and many States are undertaking efforts to
update and reform the legislation; and
(6) efforts to coordinate State resources with local plans
require additional planning at the State level.

SEC. 3. DEFINITIONS.

In this Act:
(1) Federal land management agency.--The term ``Federal
land management agency'' means the Bureau of Land Management,
the Forest Service, and any other Federal land management
agency that conducts land use planning for Federal land.
(2) Land use planning legislation.--The term ``land use
planning legislation'' means a statute, regulation, executive
order or other action taken by a State to guide, regulate,
and assist in the planning, regulation, and management of
land, natural resources, development practices, and other
activities related to the pattern and scope of future land
use.
(3) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(4) State.--The term ``State'' means a State, the District
of Columbia, the Commonwealth of Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands.
(5) State planning director.--The term ``State planning
director'' means the State official designated by statute or
by the Governor whose principal responsibility is the
drafting and updating of State guide plans or guidance
documents that regulate land use and infrastructure
development on a statewide basis.

SEC. 4. GRANTS TO STATES FOR UPDATING LAND USE PLANNING
LEGISLATION AND INTEGRATING FEDERAL LAND
MANAGEMENT AND STATE PLANNING.

(a) In General.--The Secretary shall establish a program to
provide grants to States for the purpose of assisting in--
(1) as a first priority, development or revision of land
use planning legislation in States that currently have
inadequate or outmoded land use planning legislation; and
(2) creation or revision of State comprehensive land use
plans or plan elements in

[[Page S7912]]

States that have updated land use planning legislation.
(b) Eligibility.--To be eligible to receive a grant under
subsection (a), a State shall submit to the Secretary, in
such form as the Secretary may require, an application
demonstrating that the State's basic goals for land use
planning legislation reform are consistent with all of the
following guidelines:
(1) Citizen representation.--Citizens are notified and
citizen representation is required in the developing,
adopting, and updating of land use plans.
(2) Multijurisdictional cooperation.--In order to
effectively manage the impacts of land development and to
provide for resource sustainability, land use plans are
created based on multi-jurisdictional governmental
cooperation, when practicable, particularly in the case of
land use plans based on watershed boundaries.
(3) Implementation elements.--Land use plans contain an
implementation element that--
(A) includes a timetable for action and a definition of the
respective roles and responsibilities of agencies, local
governments, and other stakeholders;
(B) is consistent with State capital budget objectives; and
(C) provides the framework for decisions relating to the
siting of future infrastructure development, including
development of utilities and utility distribution systems.
(4) Comprehensive planning.--There is comprehensive
planning to encourage land use plans that--
(A) promote sustainable economic development and social
equity;
(B) enhance community character;
(C) coordinate transportation, housing, education, and
other infrastructure development;
(D) conserve historic resources, scenic resources, and the
environment; and
(E) sustainably manage natural resources.
(5) Updating.--Land use plans are routinely updated.
(6) Standards.--Land use plans reflect an approach that is
consistent with established professional planning standards.
(c) Use of Grant Funds.--Grant funds received by a State
under subsection (a) shall be used to obtain technical
assistance in--
(1) drafting land use planning legislation;
(2) research and development for land use planning programs
and requirements relating to the development of State guide
plans;
(3) conducting workshops, educating and consulting policy
makers, and involving citizens in the planning process; and
(4) integrating State and regional concerns and land use
plans with Federal land use plans.
(d) Amount of Grant.--The amount of a grant to a State
under subsection (a) shall not exceed $500,000.
(e) Cost-Sharing.--The Federal share of a project funded
with a grant under subsection (a) shall not exceed 90
percent.
(f) Audits.--
(1) In general.--The Inspector General of the Department of
Housing and Urban Development shall conduct an audit of a
portion of the grants provided under this section to ensure
that all funds provided under the grants are used for the
purposes specified in this section.
(2) Use of audit results.--The results of audits conducted
under paragraph (1) and any recommendations made in
connection with the audits shall be taken into consideration
in awarding any future grant under this section to a State.
(g) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $25,000,000 for
the period of fiscal years 2001 through 2005.

SEC. 5. FEDERAL LAND MANAGEMENT AGENCIES.

(a) Land Use Planning Coordinator.--The head of each
Federal land management agency shall designate an officer to
act as coordinator working with State planning directors on
projects funded under section 4.
(b) Provision of Information.--A Federal land management
agency shall provide to a State planning director such
background information, plans, and relevant budget
information as the State planning director considers to be
needed in connection with a project funded under section 4.
(c) Assistance and Participation in Community Organized
Events.--Each Federal land management agency shall
participate in any community organized events requested by
the State planning director.

Mr. LEAHY. Mr. President, I am pleased to join with Senators DeWine,
Hatch and Voinovich in introducing bipartisan legislation to provide
common-sense tax incentives to help address asbestos liability issues.
I agree with Supreme Court Justice Ruth Bader Ginsburg in the Amchem
Products decision that Congress can provide a secure, fair and
efficient means of compensating victims of asbestos exposure. The
appropriate role for Congress is to provide incentives for private
parties to reach settlements, not to take away the legal rights of
asbestos victims and their families. Our bipartisan bill provides these
tax incentives for private parties involved in asbestos-related
litigation to reach global settlements and for asbestos victims and
their families receive the full benefit of the incentives.
Mr. President, encouraging fair settlements while still preserving
the legal rights of all parties involved is a win-win situation for
business and asbestos victims. For example, Rutland Fire Clay Company,
a family-run, 117-year-old small business in my home state of Vermont,
recently reached a settlement with its insurers and the trial bar
concerning the firm's asbestos problems. Unlike some big businesses
that are trying to avoid any accountability for their asbestos
responsibilities through national ``tort reform'' legislation, the
Rutland Fire Clay Company and its President, Tom Martin, are doing the
right thing within the legal system. Mr. Martin plans to lead the
family-run business from bankruptcy this year as a stronger firm with a
solid financial foundation for its employees in the 21st Century. The
tax incentives in our bipartisan bill will support the Rutland Fire
Clay Company and its employees while providing financial security for
its settlement with asbestos victims.
I believe it is in the national interest to encourage fair and
expeditious settlements between companies and asbestos victims. The
legislation we are introducing today will protect payments to victims
while ensuring defendant firms remain solvent. I urge my colleagues to
support our bipartisan legislation.
______

By Mr. WELLSTONE:
S. 2996. A bill to extend the milk price support program through 2002
at an increased price support rate; to the Committee on Agriculture,
Nutrition, and Forestry.

dairy price support legislation

Mr. WELLSTONE. Mr. President, I rise today to introduce legislation
that is intended to begin a long overdue discussion regarding the
future of an industry, and a way of life that is basic not only to our
agricultural economy but to the soul of America. I am talking about
family dairy farming. To maintain this country's family dairy industry,
we in the Senate need to act quickly before the end of this session, to
effect a change in Federal dairy policy that will make a difference, a
difference to dairy farmers who are struggling because they receive a
price that is less than what it cost them to produce the product.
It is clear dairy farmers in this country are facing devastating
times. The current dairy policies have brought chaos to family dairy
farmers. Last year, the Class III milk price decreased from $16.26 cwt.
in September to $9.63 cwt in December, and prices have still not
recovered. Over the last ten months we have seen a drop of over forty
percent in milk prices. How can our dairy farmers survive with such
volatility in the market place? Dairy farmers need to have a stable and
equitable market price, and that simply does not exist under our
current dairy policy.
That is why I am pleased to introduce this legislation to set the
milk support price at $12.50 per hundredweight. As my colleagues know,
the dairy support price sets a floor on the price received by all
producers, regardless of region, that should be set at a level
sufficient to curb market volatility. However, the current support
level of $9.90 cwt. is too low to act as a stabilizer for the market.
The five year average for milk is $12.78 cwt, therefore this
legislation to set the support price at $12.50 would protect against
the huge drops producers have experienced in the past few years.
I want to make clear that this legislation is not intended to be the
complete solution to the problems with our national dairy policy, or
lack thereof. I firmly believe that we need to develop a supply
management mechanism to complement an increase in the price support,
however, for too long this Congress has ignored the economic crisis our
nation's dairy farmers are facing.
Mr. President, what we do here in Washington has to be rooted in the
lives of the people we represent. It has to be based upon the reality
of lives of people in our communities, including people in rural
communities. I think it is vitally important to understand that there
is a crisis in capital letters with dairy farmers that is evident when
you go out and talk with people, talk to farmers, hardworking dairy
farmers, good managers, sitting down in their kitchens adding up the
figures trying to cash flow. There is simply no way

[[Page S7913]]

they can do it. Talk to dairy farmers who try to convince their sons
and daughters that there is no more honorable profession to go into
than to be a farmer, to be a dairy farmer, to produce nutritious milk
for people at affordable prices, and yet people do not get a decent
price for their work.
In my State, fifty in the country in milk production, we have 8,000
dairy farmers with an average herd size of 59 cows. It is a family
dairy industry. It is not a factory farm industry, and we want to keep
it a family industry. The milk production from Minnesota farms
generates more than $1.2 billion for our states' farmers each year, and
a recent University of Minnesota study determined that dairy production
in Minnesota creates an additional $1.2 billion in economic activity
for related industry. Our dairy industry is efficient and it is
innovative, and it produces a plentiful supply of pure wholesome milk
at extremely reasonable prices, but it is also an industry in crisis.
It is a crisis not only for dairy farmers themselves, but for rural
communities throughout the country because the health and vitality of
our rural communities is not going to be based upon the size of the
herds but the number of dairy farmers who live in those communities,
who buy in those communities, who go to churches in those communities,
who support the school systems and businesses in those communities.

I am afraid, as I speak here on the floor of the Senate, that
agriculture in our country is about to go through a transition where
all of agriculture will be dominated by giant conglomerates. The result
will be the total lack of a competitive sector, family farm sector, of
agriculture. That will be a transition that we'll deeply regret and
that is why we have to act now.
Mr. President, I hope we can respond appropriately to the pleas that
are coming from any State and other agricultural States all around the
country. Due to a drastic reduction in the prices paid to farmers for
their milk during the past year, thousands of farmers are going out of
business. Since 1990 the number of dairy farmers in Minnesota has been
nearly cut in half. This year alone we have already lost almost 300
dairy farms. We will lose more if we do not change the course of
policy. Federal dairy policy has allowed milk production and prices to
fluctuate widely. This fluctuation has caused a tremendous amount of
instability for producers and consumers but it has been especially bad
for farmers. While retail prices for dairy farmers have gone down and
while the price for farmers has been dramatically cut by 40 percent, we
have seen no such decrease at the grocery store.
The solution is a Federal policy that provides a decent living to
hardworking family farmers producing needed milk. The average cost of
production for milk in the United States is around $13 per
hundredweight and yet farmers in my State are receiving less than $10
for the same hundredweight. We need a system that will match output to
need, and pay farmers a fair price.
There is widespread support around the country for an increase in the
price support. In fact the National Farmers Union and the National
Farmers Organization, earlier this year, testified in support of an
increase of the current price support of $9.90. Such a system will
allow farmers to earn a price that covers the cost of production, and
reduce the wild price fluctuations we have witnessed over the past few
years.
I want to make it very clear that I believe the vitality of the dairy
industry is important not only to my State's economic health, and to
the economic health of agricultural States all across the country, but
to the maintenance of viable rural communities throughout our nation. I
think it is important if we are to protect the environment. I think it
is important if we are to have diversity. I think it is important if we
are to avoid more concentration in the agricultural sector of our
country. I think it is important if we are to continue to have family
farmers who can produce wholesome milk at a decent price for consumers.
I think it is important because it represents the very best of what we
have been about as a nation. I hope we can make substantive dairy
policy reforms this year, and I believe an increase in the price
support is an important component, as is a targeted supply management
mechanism. It is clear we must act soon. And I hope we can do it before
the close of Congress.
Mr. PRESIDENT, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 2996

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

SECTION 1. MILK PRICE SUPPORT PROGRAM.

(a) Extension of Program.--Section 141(h) of the
Agricultural Market Transition Act (7 U.S.C. 7251(h)) is
amended by striking ``2000'' each place it appears and
inserting ``2002''.
(b) Price Support Rate.--Section 141(b) of the Agricultural
Market Transition Act (7 U.S.C. 7251(b)) is amended by adding
at the end the following:
``(5) During each of calendar years 2001 and 2002,
$12.50.''.
(c) Conforming Amendments; Recourse Loan Program for
Processors.--Section 142 of the Agricultural Market
Transition Act (7 U.S.C. 7252) is amended--
(1) in the first sentence of subsection (b), by striking
``$9.90'' and inserting ``$12.50''; and
(2) in subsection (e), by striking ``2001'' and inserting
``2003''.
______

By Mr. KERRY (for himself, Mr. Jeffords, Mr. Sarbanes, Mr. Leahy,
Mr. Bryan, Mr. Reed, Mr. L. Chafee, and Mr. Wellstone):
S. 2997. A bill to establish a National Housing Trust Fund in the
Treasury of the United States to provide for the development of decent,
safe, and affordable housing for low-income families; to the Committee
on Banking, Housing, and Urban Affairs.

the national affordable housing trust fund act

Mr. KERRY. Mr. President, I come to the floor today to offer the
National Affordable Housing Trust Fund Act which would establish a
Trust Fund to fill the growing gap in our ability to provide affordable
housing in this country.
We are living through a time of great economic expansion. Many
Americans are benefitting from the growing economy. On the flip side
however, is that the economy is fueling rising housing costs. While
these costs skyrocket at record pace, there are many families in this
country who are unable to keep up.
HUD estimates that 5.4 million low-income households have ``worst
case'' housing needs. These families are paying over half their income
towards housing costs or living in severely substandard housing. Since
1990, the number of families who have ``worst case'' housing needs has
increased by 12 percent--that's 600,000 more American families who
cannot afford a decent and safe place to live.
For these families living paycheck to paycheck, one unforseen
circumstance, a sick child, a needed car repair, or a large utility
bill can send them into homelessness. Just this week, on the front page
of the Washington Post, an article detailed these problems right here
in our own backyard. The article details the plight of low-income
families living in apartments which are no longer affordable because
the owners have decided to no longer accept federal assistance. For
these families, the loss of their affordable housing unit means they
may go without a home.
We mistakenly view the housing crisis in this country as confined to
specific demographics. This is untrue. There is not one metropolitan
area in the country where a minimum wage earner can afford to pay the
rent for a two-bedroom apartment. A person needs to earn over $11 an
hour to afford the median rent for a two bedroom apartment in this
country. This figure rises dramatically in many metropolitan areas--an
hourly wage of $22 is needed in San Francisco; $21 on Long Island; $17
in Boston; $16 in the D.C. area; $14 in Seattle and Chicago; and, $13
in Atlanta.
Working families in this country are increasingly finding themselves
unable to afford housing. Using the numbers I just cited, a person in
Boston would have to make over $35,000 just to afford a 2 bedroom
apartment. This means teachers, janitors, social workers, police
officers--these full time workers can have trouble affording even a
modest 2-bedroom apartment.
A story from my home state of Massachusetts highlights the problems
faced by working families. On Cape

[[Page S7914]]

Cod, Susan O'Donnell a mother of three, earns $21,000 a year working
full-time. Nonetheless, she is forced to live in a campground because
she cannot find affordable housing. The campground she is living at has
time limits, so the only way she is able to stay for a prolonged period
of time is through cleaning the campground's toilets. When her time
runs out at the campground, she will again be forced to move with her
three children, though it is not clear where she will be able to afford
to move. Skyrocketing housing costs have pushed her, and other full
time workers on the Cape out of their housing and into homelessness.
And, as I mentioned earlier, the problem is not only that we have
failed to create additional affordable units. We have actually
witnessed a tremendous loss in affordable housing. Between 1993 and
1995, a loss of 900,000 rental units affordable to very low-income
families occurred. From 1996 to 1998, there was a 19% reduction in the
number of affordable housing units. This amounted to a dramatic
reduction of 1.3 million affordable housing units available to low-
income Americans.
The Washington Post article I mentioned previously, helps to show the
real impact of these losses. Because of the ability of higher wage
earners to pay higher housing costs, building owners are now choosing
not to rent to households assisted with Section 8 vouchers.

Right over the D.C. line, in Prince Georges County, Maryland, 300
tenants in a apartment complex were recently told that they would have
to move because the owner will no longer accept Section 8. This means
300 families will lose their housing. And, it is not clear that there
will be anywhere for them to go. The same article introduces us to a
woman who experienced the same traumatizing eviction in Alexandria,
Virginia. Ms. Evans is now living in a cockroach infested building with
her children, because there are no decent units affordable to her.
This, in part, stems from the fact that of 31 properties in Alexandria
which accepted voucher holders in the past, 12 will not longer accept
tenants with federal assistance.
The loss of this affordable housing has exacerbated the housing
crisis in this country, and the federal government must take action.
However, the government has clearly not been doing enough. In fact,
despite the fact that more families are unable to afford housing, we
have decreased federal spending on critical housing programs over time.
From fiscal year 1995 to fiscal year 1999, we engaged in what I call
the ``Great HUDway Robbery,'' diverting or rescinding over 20 billion
dollars from federal housing programs for other uses. With a few
exceptions, the funding increases of this past year have gone primarily
to cover the rising costs of serving existing assisted families.
We need to bring our levels of housing spending back up to where they
belong. Between 1978 and 1995, the number of households receiving
housing assistance was increased by almost 3 million. From 1978 through
1984, we provided an additional 230,000 families with housing
assistance each year. This number dropped significantly to 126,000
additional households each year from 1985 through 1995.
And, in 1996, this nation's housing policy went all the way back to
square one--not only was there no increase in families receiving
housing assistance, but the number of assisted units actually
decreased. From 1996 to 1998, the number of HUD assisted households
dropped by 51,000. In this time of rising rents and housing costs, and
the loss of affordable housing units, it is incomprehensible that we
are not doing more to bring the levels of housing assistance back from
the dead.
It is high time that we focused on housing policies in Congress and
around the country because housing is an anchor for families.
It is no secret that housing, neighborhood and living environment
play enormous roles in shaping young lives. Maintaining a stable home,
made possible through housing assistance, has positive outcomes for
low-income children. A child will be unable to learn if she is forced
to change schools every few months because her family is forced to move
from relative to relative to friend to friend because her parents can't
afford the rent.
What I am doing today, is standing up before the Nation and saying,
``no more.'' We have the resources we need to ensure that all Americans
have the opportunity to live in decent and safe housing, yet we are not
devoting these resources to fix the problem.
Today, I am proposing to address the severe shortage of affordable
housing by establishing a National Affordable Housing Trust Fund which
uses excess income generated by 2 federal housing programs--the Federal
Housing Administration (FHA) and the Government National Mortgage
Association (GNMA). These federal housing programs generate billions of
dollars in excess income which currently go to the general Treasury for
use on other federal priorities. It is time to stop taking housing
money out of housing programs. These excess funds should be used to
help alleviate the current housing crisis.
My proposal would create an affordable housing production, ensuring
that new rental units are built for those who most need assistance--
extremely low-income families, including working families. In addition,
Trust Fund assistance will be used to promote homeownership for low-
income families, those families whose incomes are below 80% of the area
median income.
The Trust Fund aims to create long-term affordable, mixed-income
developments in areas with the greatest opportunities for low-income
families.
A majority of assistance from the Trust Fund will be given out as
matching grants to the States which will distribute funds on a
competitive basis like the low-income housing tax credit. Localities,
non-profits, developers and other entities will be eligible to apply
for funds. The remaining assistance will be distributed through a
national competition to intermediaries, such as non-profits which will
be required to leverage private funds for investment in affordable
housing.
This proposal will bring federal, State and private resources
together to create needed affordable housing opportunities for American
families.
We can no longer ignore the lack of affordable housing, and the
impact it is having on families and children around the country. It is
not clear to me why this lack of housing has not caused more uproar.
How many families need to be pushed out of their homes and into the
streets, before action is taken. Earlier in this Congress, I proposed a
program which would assist in maintaining the affordable housing stock
that already exists. I hope that this preservation program is taken up
this Congress and passed so that we can avoid losing anymore affordable
units. However, we must also focus on producing additional housing,
which is exactly what this Housing Trust Fund will do.
Mr. President, I asked of the housing policy experts and
practitioners in Massachusetts to work with me to come up with a viable
program which would put the government back in the business of
producing affordable housing. This legislation is a result of
collaboration among numerous organizations and experts. I want to thank
in particular, Aaron Gornstein of the citizens Housing and Planning
Association in Massachusetts for helping to bring all of the relevant
actors to the table to formulate this proposal. I appreciate the help
of many people and organizations, but want to mention some people in
Massachusetts who were critical in shaping the ideas behind this
legislation: Vince O'Donnell of the Community Economic Development
Assistance Corp; Peter Gagliardi with the Hampden Hampshire Housing
Partnership; Conrad Egan of the National Housing Conference; Joe
Flately with the Massachusetts Housing Investment Corporation; Howard
Cohen with Beacon Residential; and, Patrick Dober of Lendlease.
I urge you to support this legislation which restores our commitment
to providing affordable housing for all families. We can no longer turn
our backs on those families who struggle each month just to put a roof
over their heads.
I ask unanimous consent to have the text of the legislation, along
with a section-by-section summary, and letters of support from a number
of organizations including the National Association of Homebuilders,
the National Council of State Housing Agencies, the National Low-Income
Housing Coalition, the National Coalition for the

[[Page S7915]]

Homeless, the National Housing Conference, and others put in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

S. 2997

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``National Affordable Housing
Trust Fund Act of 2000''.

SEC. 2. PURPOSES.

The purposes of this Act are to--
(1) fill the growing gap in the national ability to build
affordable housing by using profits generated by Federal
housing programs to fund additional housing activities, and
not supplant existing housing appropriations; and
(2) enable rental housing to be built for those families
with the greatest need in areas with the greatest
opportunities in mixed-income settings and to promote
homeownership for low-income families.

SEC. 3. NATIONAL HOUSING TRUST FUND.

(a) Establishment of Trust Fund.--There is established in
the Treasury of the United States a trust fund to be known as
the ``National Affordable Housing Trust Fund'' (referred to
in this Act as the ``Trust Fund'') for the purposes of
promoting the development of affordable housing.
(b) Deposits to the Trust Fund.--For fiscal year 2001 and
each fiscal year thereafter, there is appropriated to the
Trust Fund an amount equal to the sum of--
(1) any revenue generated by the Mutual Mortgage Insurance
Fund of the Federal Housing Administration in excess of the
amount necessary for the Mutual Mortgage Insurance Fund to
maintain a capital ratio of 3 percent for the preceding
fiscal year; and
(2) any revenue generated by the Government National
Mortgage Association in excess of the amount necessary to pay
the administrative costs and expenses necessary to ensure the
safety and soundness of the Government National Mortgage
Association for the preceding fiscal year, as determined by
the Secretary.
(c) Expenditures From the Trust Fund.--For fiscal year 2001
and each fiscal year thereafter, amounts appropriated to the
Trust Fund shall be available to the Secretary of Housing and
Urban Development for use in accordance with section 4.

SEC. 4. ADMINISTRATION OF NATIONAL AFFORDABLE HOUSING TRUST
FUND.

(a) Definitions.--In this section:
(1) Affordable housing.--The term ``affordable housing''
means housing for rental that bears rents not greater than
the lesser of--
(A) the existing fair market rent for comparable units in
the area, as established by the Secretary under section 8 of
the United States Housing Act of 1937 (42 U.S.C. 1437f); or
(B) a rent that does not exceed 30 percent of the adjusted
income of a family whose income equals 65 percent of the
median income for the area, as determined by the Secretary,
with adjustment for number of bedrooms in the unit, except
that the Secretary may establish income ceilings higher or
lower than 65 percent of the median for the area on the basis
of the findings of the Secretary that such variations are
necessary because of prevailing levels of construction costs
or fair market rents, or unusually high or low family
incomes.
(2) Continued assistance rental subsidy program.--The term
``continued assistance rental subsidy program'' means a
program under which--
(A) project-based assistance is provided for not more than
3 years to a family in an affordable housing unit developed
with assistance made available under subsection (c) or (d) in
a project that partners with a public housing agency, which
agency agrees to provide the assisted family with a priority
for the receipt of a voucher under section 8(o) of the United
States Housing Act of 1937 (42 U.S.C. 1437f(o)) if the family
chooses to move after an initial year of occupancy and the
public housing agency agrees to refer eligible voucher
holders to the property when vacancies occur; and
(B) after 3 years, subject to appropriations, continued
assistance is provided under section 8(o) of the United
States Housing Act of 1937 (42 U.S.C. 1437f(o)),
notwithstanding any provision to the contrary in that
section, if administered to provide families with the option
of continued assistance with tenant-based vouchers, if such a
family chooses to move after an initial year of occupancy and
the public housing agency agrees to refer eligible voucher
holders to the property when vacancies occur.
(3) Eligible activities.--The term ``eligible activities''
means activities relating to the development of affordable
housing, including--
(A) the construction of new housing;
(B) the acquisition of real property;
(C) site preparation and improvement, including demolition;
(D) substantial rehabilitation of existing housing; and
(E) rental subsidy for not more than 3 years under a
continued assistance rental subsidy program.
(4) Eligible entity.--The term ``eligible entity'' includes
any public or private nonprofit or for-profit entity, unit of
local government, regional planning entity, and any other
entity engaged in the development of affordable housing, as
determined by the Secretary.
(5) Eligible intermediary.--The term ``eligible
intermediary'' means--
(A) a nonprofit community development corporation;
(B) a community development financial institution (as
defined in section 103 of the Community Development Banking
and Financial Institutions Act of 1994 (12 U.S.C. 4702));
(C) a State or local trust fund;
(D) any entity eligible for assistance under section 4 of
the HUD Demonstration Act of 1993 (42 U.S.C. 9816 note);
(E) a national, regional, or statewide nonprofit
organization; and
(F) any other appropriate nonprofit entity, as determined
by the Secretary.
(6) Extremely low-income families.--The term ``extremely
low-income families'' means very low-income families (as
defined in section 3(b) of the United States Housing Act of
1937 (42 U.S.C. 1437a(b)) whose incomes do not exceed 30
percent of the median family income for the area, as
determined by the Secretary with adjustments for smaller and
larger families, except that the Secretary may establish
income ceilings higher or lower than 30 percent of the median
for the area on the basis of the Secretary's findings that
such variations are necessary because of unusually high or
low family incomes.
(7) Low-income families.--The term ``low-income families''
has the meaning given the term in section 3(b) of the United
States Housing Act of 1937 (42 U.S.C. 1437a(b)).
(8) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(9) State.--The term ``State'' has the meaning given the
term in section 3(b) of the United States Housing Act of 1937
(42 U.S.C. 1437a(b)).
(b) Allocation to States and Eligible Intermediaries.--For
fiscal year 2001 and each fiscal year thereafter, the total
amount made available to the Secretary from the Trust Fund
under section 3(c) shall be allocated by the Secretary as
follows:
(1) 75 percent shall be used to award grants to States in
accordance with subsection (c).
(2) 25 percent shall be used to award grants to eligible
intermediaries in accordance with subsection (d).
(c) Grants to States.--
(1) In general.--Subject to paragraph (2), from the amount
made available for each fiscal year under subsection (b)(1),
the Secretary shall award grants to States, in accordance
with an allocation formula established by the Secretary,
based on the pro rata share of each State of the total need
among all States for an increased supply of affordable
housing, as determined on the basis of--
(A) the number and percentage of families in the State that
live in substandard housing;
(B) the number and percentage of families in the State that
pay more than 50 percent of their annual income for housing
costs;
(C) the number and percentage of persons living at or below
the poverty level in the State;
(D) the cost of developing or carrying out substantial
rehabilitation of housing in the State;
(E) the age of the multifamily housing stock in the State;
and
(F) such other factors as the Secretary determines to be
appropriate.
(2) Grant amount.--
(A) In general.--The amount of a grant award to a State
under this subsection shall be equal to the lesser of--
(i) 4 times the amount of assistance provided by the State
from non-Federal sources; and
(ii) the allocation determined in accordance with paragraph
(1).
(B) Non-federal sources.--The following shall be considered
non-Federal sources for purposes of this section:
(i) 50 percent of funds allocable to tax credits allocated
under section 42 of the Internal Revenue Code of 1986.
(ii) 50 percent of revenue from mortgage revenue bonds
issued under section 143 of such Code.
(iii) 50 percent of proceeds from the sale of tax exempt
bonds.
(3) Award of state allocation to certain entities.--
(A) In general.--If the amount provided by a State from
non-Federal sources is less than 25 percent of the amount
that would be awarded to the State under this subsection
based on the allocation formula described in paragraph (1),
not later than 60 days after the date on which the Secretary
determines that the State is not eligible for the full
allocation determined under paragraph (1), the Secretary
shall issue a notice regarding the availability of the funds
for which the State is ineligible.
(B) Applications.--Not later than 9 months after
publication of a notice of funding availability under
subparagraph (A), a nonprofit or public entity (or a
consortium thereof, which may include units of local
government working together on a regional basis) may submit
to the Secretary an application for the available assistance
or a portion thereof, which application shall include--
(i) a certification that the applicant will provide
assistance in an amount equal to 25 percent of the amount of
assistance made available to the applicant under this
paragraph; and

[[Page S7916]]

(ii) an allocation plan that meets the requirements of
paragraph (4)(B) for use or distribution in the State of any
assistance made available to the applicant under this
paragraph and the assistance provided by the applicant for
purposes of clause (i).
(C) Award of assistance.--The Secretary shall award the
amount that is not awarded to a State by operation of
paragraph (2) to 1 or more applicants that meet the
requirements of subparagraph (B) of this paragraph that are
selected by the Secretary based on selection criteria, which
shall be established by the Secretary by regulation.
(4) Distribution to eligible entities.--
(A) In general.--Each State that receives a grant award
under this subsection shall distribute the amount made
available under the grant and the assistance provided by the
State from non-Federal sources for purposes of paragraph
(2)(A) to eligible entities for the purpose of assisting
those entities in carrying out eligible activities in the
State as follows:
(i) 75 percent shall be distributed to eligible entities
for eligible activities relating to the development of
affordable housing for rental by extremely low-income
families in the State.
(ii) 25 percent shall be distributed to eligible entities
for eligible activities relating to the development of
affordable housing for rental by low-income families in the
State, or for homeownership assistance for low-income
families in the State.
(B) Allocation plan.--Each State shall, after notice to the
public, an opportunity for public comment, and consideration
of public comments received, establish an allocation plan for
the distribution of assistance under this paragraph, which
shall be submitted to the Secretary and shall be made
available to the public by the State, and which shall
include--
(i) application requirements for eligible entities seeking
to receive such assistance, including a requirement that each
application include--

(I) a certification by the applicant that any housing
developed with assistance under this paragraph will remain
affordable for extremely low-income families or low-income
families, as applicable, for not less than 40 years;
(II) a certification by the applicant that the tenant
contribution towards rent for a family residing in a unit
developed with assistance under this paragraph will not
exceed 30 percent of the adjusted income of that family; and
(III) a certification by the applicant that the owner of a
project in which any housing developed with assistance under
this paragraph is located will make a percentage of units in
the project available to families assisted under the voucher
program under section 8(o) of the United States Housing Act
of 1937 (42 U.S.C. 1437f(o)) on the same basis as other
families eligible for the housing (except that only the
voucher holder's expected share of rent shall be considered),
which percentage shall not be less than the percentage of the
total cost of developing or rehabilitating the project that
is funded with assistance under this paragraph; and

(ii) factors for consideration in selecting among
applicants that meet such application requirements, which
shall give preference to applicants based on--

(I) the amount of assistance for the eligible activities
leveraged by the applicant from private and other non-Federal
sources, including assistance made available under section 8
of the United States Housing Act of 1937 (42 U.S.C. 1437f)
that is devoted to the project in which the housing to be
developed with assistance under this paragraph is located;
(II) the extent of local assistance that will be provided
in carrying out the eligible activities, including--

(aa) financial assistance; and
(bb) the extent to which the applicant has worked with the
unit of local government in which the housing will be located
to address issues of siting and exclusionary zoning or other
policies that are barriers to affordable housing;

(III) the degree to which the development in which the
housing will be located is mixed-income;
(IV) whether the housing will be located in a census tract
in which the poverty rate is less than 20 percent or in a
community undergoing revitalization;
(V) the extent of employment and other opportunities for
low-income families in the area in which the housing will be
located; and
(VI) the extent to which the applicant demonstrates the
ability to maintain units as affordable for extremely low-
income or low-income families, as applicable, through the use
of assistance made available under this paragraph, assistance
leveraged from non-Federal sources, assistance made available
under section 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f), State or local assistance, programs to
increase tenant income, cross-subsidization, and any other
resources.

(C) Forms of assistance.--
(i) In general.--Assistance distributed under this
paragraph may be in the form of capital grants, non-interest
bearing or low-interest loans or advances, deferred payment
loans, guarantees, and any other forms of assistance approved
by the Secretary.
(ii) Repayments.--If a State awards assistance under this
paragraph in the form of a loan or other mechanism by which
funds are later repaid to the State, any repayments received
by the State shall be distributed by the State in accordance
with the allocation plan described in subparagraph (B) the
following fiscal year.
(D) Coordination with other assistance.--In distributing
assistance under this paragraph, each State shall, to the
maximum extent practicable, coordinate such distribution with
the provision of other affordable housing assistance by the
State, including--
(i) housing credit dollar amounts allocated by the State
under section 42(h) of the Internal Revenue Code of 1986;
(ii) assistance made available under the HOME Investment
Partnerships Act or the community development block grant
program; and
(iii) private activity bonds.
(d) National Competition.--
(1) In general.--From the amount made available for each
fiscal year under subsection (b)(2), the Secretary shall
award grants on a competitive basis to eligible
intermediaries, which shall be used in accordance with
paragraph (3) of this subsection.
(2) Application requirements and selection criteria.--The
Secretary by regulation shall establish application
requirements and selection criteria for the award of
competitive grants to eligible intermediaries under this
subsection, which criteria shall include--
(A) the ability of the eligible intermediary to meet
housing needs of low-income families on a national or
regional scope;
(B) the capacity of the eligible intermediary to use the
grant award in accordance with paragraph (3), based on the
past performance and management of the applicant; and
(C) the extent to which the eligible intermediary has
leveraged funding from private and other non-Federal sources
for the eligible activities.
(3) Use of grant award.--
(A) In general.--Except as provided in subparagraph (B),
each eligible intermediary that receives a grant award under
this subsection shall ensure that the amount made available
under the grant is used as follows:
(i) 75 percent shall be used for eligible activities
relating to the development of affordable housing for rental
by extremely low-income families.
(ii) 25 percent shall be used for eligible activities
relating to the development of affordable housing for rental
by low-income families, or for homeownership assistance for
low-income families.
(B) Exception.--
(i) In general.--If the amount made available under a grant
award under this subsection is used for a project described
in clause (ii), an eligible intermediary may use the amount
made available under the grant for eligible activities
relating to the development of housing for rental by families
whose incomes are less than 60 percent of the area median
income, and for homeownership activities for families whose
incomes are less than 80 percent of area median income.
(ii) Project contributing to a concerted community
revitalization plan.--A project is described in this clause
if--

(I) it is located in a community undergoing concerted
revitalization and is contributing to a community
revitalization plan; and
(II) it is located in a census tract in which--

(aa) the median household income is less than 60 percent of
the area median income; or
(bb) the rate of poverty is greater than 20 percent.
(C) Plan of use.--Each eligible intermediary that receives
a grant award under this subsection shall establish a plan
for the use or distribution of the amount made available
under the grant, which shall be submitted to the Secretary,
and which shall include information relating to the manner in
which the eligible intermediary will either use or distribute
that amount, including--
(i) a certification that assistance made available under
this subsection will be used to supplement assistance
leveraged from private and other non-Federal sources,
including assistance made available under section 8 of the
United States Housing Act of 1937 (42 U.S.C. 1437f) that is
devoted to the project in which the housing to be developed
is located;
(ii) a certification that local assistance will be provided
in the carrying out the eligible activities, which may
include--

(I) financial assistance; and
(II) a good faith effort to work with the unit of local
government in which the housing will be located to address
issues of siting and exclusionary zoning or other policies
that are barriers to affordable housing;

(iii) a certification that any housing developed with
assistance under this subsection will remain affordable for
extremely low-income families or low-income families, as
applicable, for not less than 40 years;
(iv) a certification that any housing developed by the
applicant with assistance under this subsection will be
located--

(I) in a mixed-income development in a census tract having
a poverty rate of not more than 20 percent, and near
employment and other opportunities for low-income families;
or
(II) in a community undergoing revitalization;

(v) a certification that the tenant contribution towards
rent for a family residing in a unit developed with
assistance under

[[Page S7917]]

this paragraph will not exceed 30 percent of the adjusted
income of that family; and
(vi) a certification by the applicant that the owner of a
project in which any housing developed with assistance under
this subsection is located will make a percentage of units in
the project available to families assisted under the voucher
program under section 8(o) of the United States Housing Act
of 1937 (42 U.S.C. 1437f(o)) on the same basis as other
families eligible for the housing (except that only the
voucher holder's expected share of rent shall be considered),
which percentage shall not be less than the percentage of the
total cost of developing or rehabilitating the project that
is funded with assistance under this subsection.
(D) Forms of assistance.--
(i) In general.--An eligible intermediary may distribute
the amount made available under a grant under this subsection
in the form of capital grants, non-interest bearing or low-
interest loans or advances, deferred payment loans,
guarantees, and other forms of assistance.
(ii) Repayments.--If an eligible intermediary awards
assistance under this subsection in the form of a loan or
other mechanism by which funds are later repaid to the
eligible intermediary, any repayments received by the
eligible intermediary shall be distributed by the eligible
intermediary in accordance with the plan of use described in
subparagraph (C) the following fiscal year.

SEC. 5. REGULATIONS.

Not later than 6 months after the date of enactment of this
Act, the Secretary of Housing and Urban Development shall
promulgate regulations to carry out this Act.
____

Section by Section of National Affordable Housing Trust Fund
Legislation

section 1: short title

National Affordable Housing Trust Fund Act of 2000.

section 2: purposes

The purpose of this Act is to use profits generated by
federal housing programs to help alleviate the current
housing crisis by funding new construction of affordable
rental housing in mixed-income developments and homeownership
activities.

section 3: national housing trust fund

This Section establishes a National Affordable Housing
Trust Fund (``Trust Fund'') in the Treasury of the U.S.
Excess revenue generated by the Federal Housing
Administration (``FHA'') and the Government National Mortgage
Association (``GNMA'') will be transferred to the Trust Fund
in fiscal year 2001 and each year thereafter for eligible
uses.
FHA revenue, in excess of an amount necessary for the FHA
to retain 3% capital, will be transferred to the Trust Fund.
FHA is currently required to maintain 2% capital. GNMA
revenues will also be captured, above what the Secretary
determines is necessary for safe and sound operations.

section 4: administration of national affordable housing trust fund

This Section describes how Trust Fund assistance will be
allocated and for what uses. 75% of Trust Fund assistance
will be given as matching grants to States and 25% will be
awarded by HUD through a national competition, as follows:
Matching Grants to States. 75% of the Trust Fund will be
given as matching grants to States on a formula based on
factors related to need for housing in the State. States will
be required to match 25% of the federal grant with non-
federal funds. If a State does not come up with the requisite
match, public and non-profit entities can apply for the
State's portion of funds.
States will distribute assistance according to need and
criteria, including: whether the development will be mixed
income; whether the development is located in a low-poverty
census tract or a community experiencing revitalization; and
the amount of additional funding devoted to the project.
75% of Trust Fund assistance distributed by each State must
be used for the construction of rental housing for extremely
low-income households (income under 30% of area median
income) in mixed income developments which must remain
affordable for 40 years. The bill establishes a ``Continued
Assistance Rental Subsidy Program'' under which a developer
may use funds for up to three years of operating subsidy, so
long as it partners with a local housing agency to ensure a
stream of eligible tenants to the units, and the housing
agency agrees to provide any tenant in those units with a
voucher to move if the tenant so chooses.
The other 25% of assistance may be used for low-income
families (incomes under 80% of area median income) for
construction of rental housing or for homeownership
activities.

National Competition

25% of the Trust Fund will be awarded by HUD through
competitive grants to non-profit intermediaries, who will use
and distribute the funds based on the same criteria as
required by the States. While there is no specific matching
requirement, HUD must give priority to those intermediaries
which leverage the greatest amount of private and non-federal
funds.
Like the State grants, 75% of assistance must be used for
rental housing for extremely low-income households in mixed
income developments, and the units must remain affordable for
40 years, and the other 25% of assistance must be used for
low-income families for rental housing or homeownership
activities. However, if a project contributes to a community
revitalization plan, these targeting requirements are waived,
so long as the households assisted in the project have
incomes under 60% of the area median income.

section 5: regulations

HUD is required to promulgate regulations within 6 months
of the date of enactment of this bill.
____

Citizens' Housing and

Planning Association, Inc.,

Boston, MA, July 26, 2000.
Senator John F. Kerry,
Russell Senate Office Building,
Washington, DC.
Dear Senator Kerry: On behalf of Citizens' Housing and
Planning Association (CHAPA), I wanted to express our strong
support for the national housing trust fund legislation that
you will be filing this week. CHAPA is the largest and most
diverse housing advocacy organization in New England,
representing more than 1,500 housing providers, advocates,
government officials, lenders, and others.
In Massachusetts, we are in the midst of the most acute
housing crisis on record. The number of Massachusetts
households with severe housing needs has reached an all-time
high. Nearly 245,000 households pay more than half of their
incomes for rent, a 21 percent jump since 1990. Since 1997,
10,000 Massachusetts families have been homeless each year,
double the number since 1990.
The clear solution to this problem is to build and preserve
more affordable housing for low income families. The trust
fund legislation, which you are sponsoring, will lead to the
creation of thousands of affordable rental units across the
country. We are pleased that the focus of this program will
be to create new housing for low income families who are
facing the biggest housing squeeze.
We also are extremely pleased that the trust fund provides
flexible funds to the states and non-profit developers so
that these entities can tailor solutions to meet local needs.
The proposed program encourages the leveraging of private
funds and the creation of mixed income housing.
Thank you once again for playing an outstanding leadership
role on affordable housing. We hope that Congress will act
expeditiously on this critical legislation.
Sincerely,
Aaron Gornstein,
Executive Director.
____

National Housing Conference,

Washington, DC, July 27, 2000.
Hon. John F. Kerry,
Senate Russell Office Building,
Washington, DC.
Dear Senator Kerry: We, the National Housing Conference,
would like to extend our thanks to you for introducing the
National Housing Trust Fund Act of 2000. The NHC is a broad-
based nonpartisan advocate for national policies that promote
suitable housing in a safe, decent environment across the
nation. The NHC consists of members from across the entire
spectrum of the housing industry. Since 1931, the NHC has
demonstrated itself to be known as the united voice for
housing.
We are writing to pledge our support for your act because
we know you understand that:
(1) There is a compelling need for federal legislation to
construct affordable housing. Last month, our research
affiliate, the Center for Housing Policy, released a report
titled ``Housing America's Working Families.'' The report
demonstrated that despite the unprecedented economic
prosperity that this nation has been experiencing, one out of
every seven families has a critical housing need--They are
either spending over half their total income on rent or they
are living in severely inadequate units. These families--many
of them moderate-income working families--are teetering on an
all-too precarious ledge. Housing is a fundamental human need
and we believe that it is a shame that so many of America's
families are faced with such pressing housing problems,
particularly in an era of such economic abundance.
(2) The National Housing Trust Fund Act of 2000 would help
alleviate that need. The Act would allocate much needed funds
toward the construction and preservation of a range of
quality housing choices for low and moderate income people.
An increase in affordable housing options would provide many
needy families with better equalities of life. The National
Housing Trust Fund would supplement and complement existing
supply-oriented programs such as public housing, HOME, and
the Low Income Housing Tax Credit. Furthermore, Ann Schnare,
President of the Center for Housing Policy said in a
testimony on June 20th before Senator Allard, ``Many states
and local jurisdictions have established Housing Trust Funds
to capture revenue from many sources for affordable housing.
An analogous trust fund should be established at the federal
level. . . It could further encourage and strengthen
affordable housing efforts at the state and local levels by
providing incentives and developing partnerships with various
entities.''
It is important to note that the National Housing Trust
Fund would be in addition to existing appropriated funds and
would not supplant those appropriations. It would be financed
solely by excess income generated by the FHA and by Ginnie
Mae. If we establish this National Housing Trust Fund we will

[[Page S7918]]

ensure for countless future generations of Americans that
there will always be dependable affordable housing options.
Clearly, the National Housing Trust Fund Act is a good step
in the right direction. Too many people in our country are
lacking a fundamental human necessity--adequate housing. This
act would create provisions to mitigate some of this critical
housing need. Trust funds have been developed in the past for
other national priorities such as Social Security, highways,
and airports. We're glad that you agree that it is about time
for us to make housing a national priority as well.
Sincerely,
Robert J. Reid,
Executive Director.
____

National Association of Realtors,

Washington, DC, July 26, 2000.
Hon. John F. Kerry,
Subcommittee on Housing and Transportation, Committee on
Banking, Housing and Urban Affairs, U.S. Senate,
Washington, DC.
Dear Senator Kerry: On behalf of the more than 760,000
members of the National Association of Realtors, I am pleased
to indicate our support for your legislation. The National
Affordable Housing Trust Fund Act of 2000. We believe this
important legislation reduces the barriers to affordable
housing production and closes the gap in needed housing
opportunities for American families, and we welcome the
opportunity to work with you to gain its passage.
As you know, millions of working American families are
facing a housing affordability crisis despite an
unprecedented run of economic growth and prosperity. This
phenomenon is exacerbated by the continuing decline of our
nation's affordable housing stock. The increase in demand
coupled with the diminishing supply of affordable units are
straining housing capacity in many communities nationwide,
leading to a rise in homelessness for many worthy American
working families.
The National Association of Realtors believes the time is
appropriate to address our nation's affordable housing crisis
as a national priority and forge a coherent and focused set
of policies for immediate adoption. Your legislation
establishing a trust fund utilizing revenues created through
the popular and successful FHA homeownership program for
usage in other critical housing areas is an insightful and
innovative response to the shortage of affordable housing
units. We strongly support this objective and we stand ready
to work with you and the Subcommittee during deliberation of
your bill.
Sincerely,
Dennis R. Cronk,
President.
____

National Association of Home Builders, Federal Government
Affairs Division,
Washington, DC, July 27, 2000.
Hon. John Kerry,
Ranking Member, Senate Subcommittee on Housing and
Transportation, Russell Senate Office Building,
Washington, DC.
Dear Senator Kerry: On behalf of the 200,000 members of the
National Association of Home Builders (NAHB), I want to
extend to you our appreciation and support for your efforts
to introduce legislation to establish a ``National Affordable
Housing Trust Fund''.
NAHB supports your proposal to establish a National
Affordable Housing Trust Fund for the production of
affordable housing. Indeed, your goal to divert funds from
both the ``surplus'' existing within the Mutual Mortgage
Insurance Fund (MMI Fund) and excess revenue generated by the
Government National Mortgage Association into affordable
housing development, is laudable. The growing need for decent
affordable housing is well documented. We appreciate your
work and interest in this issue and want to assist you in any
way to facilitate movement of this legislation.
Again, thank you for your efforts to address the shortage
of affordable housing in America.
Sincerely,
Gerald M. Howard,
Senior Staff Vice President.
____

National Council of

State Housing Agencies,

Washington, DC, July 26, 2000.
Hon. John F. Kerry,
Russell Senate Office Building,
Washington, DC.
Dear Senator Kerry: On behalf of the housing finance
agencies (HFAs) of the 50 states, the National Council of
State Housing Agencies (NCSHA) commends you for introducing
the ``National Affordable Housing Trust Fund Act'' (Trust).
Given the tremendous and ever-growing need for decent and
affordable housing, it is imperative that any surplus the FHA
fund generates be rededicated to housing America's low income
families.
In this era of unprecedented economic prosperity, the
number of families experiencing worst case housing needs has
increased dramatically. According to a recent study published
by The Center for Housing Policy, 13.7 million families had
critical housing needs in 1997, including six million working
and nearly four million elderly households. In the face of
these alarming statistics, the affordable housing stock has
lost over one million units between 1993 and 1998.
Housing need, though great everywhere, varies dramatically
among and within the states. In some states, newly produced
rental housing for very low income families is the greatest
need. In others, preserving the irreplaceable low-cost rental
inventory is the highest priority.
Your bill responds effectively to these diverse housing
needs by allocating Trust funds directly to the states.
States understand their housing needs and are in the best
position to leverage these funds with other housing
resources. The sound and efficient administration of the
Housing Credit and the HOME programs are clear evidence of
states' capacity to administer the Trust fund.
We look forward to working with you as you move this bill
forward to design a delivery system that relies on the states
and their private and public sector partners to direct these
precious resources to their most pressing housing needs.
Thank you for all you are doing to expand affordable housing
opportunity.
Sincerely,
Barbara J. Thompson,
Director of Policy and Government Affairs.
____

National Low Income

Housing Coalition/LIHIS,

Washington, DC, July 26, 2000.
Hon. John F. Kerry,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator Kerry: On behalf of the National Low Income
Housing Coalition. I am pleased to offer our support for the
National Affordable Housing Trust Fund Act of 2000, which you
will introduce shortly. HLIHC is a membership organization
dedicated solely to ending the affordable housing crisis in
America. The National Affordable Housing Trust Fund that you
propose offers concrete and sustainable resources towards
achieving that goal.
The dimensions of the affordable housing crisis are well
documented. As you know, nowhere in the United States can a
full time minimum wage worker afford a one-bedroom unit at
the fair market rent. The housing wage, that is, the hourly
wage one must earn to afford the fair market rent, ranges
from $8.02 in West Virginia to $17.01 in Hawaii. The supply
of housing that is affordable to low wage workers and elderly
and disabled people on fixed incomes is dwindling while the
rents of the remaining units are escalating. Even those
families that are fortunate enough to receive a federal
housing voucher often are not able to find housing they can
afford with the voucher. The need for new affordable housing
production resources is serious and urgent.
The Housing Trust Fund provides a dedicated source of
funding for the production or rehabilitation of rental
housing. The use of excess revenue from FHA and Ginnie Mae
for this purpose is sensible housing policy. We are very
pleased that a majority of the funds will be targeted to
housing that is to be affordable to extremely low income
households for at least 40 years. This is the population with
the most severe housing problems and for whom the fewest
resources are available to increase the supply of affordable
housing. We also commend the decision to make operating
support an eligible activity for three years and the
preference for projects that can demonstrate an ongoing
source of operating subsidy.
We look forward to working with you towards passage of this
important new federal housing legislation. Thank you for your
continued leadership on housing issues in the Congress.
Sincerely,
Sheila Crowley,
President.
____

National Coalition for the

Homeless,

Washington, DC, July 26, 2000.
Senator John Kerry,
Russell Building, Washington, DC.
Dear Senator Kerry: ``They've got jobs, they just can't
find housing they can afford,'' is the comment we hear from
local providers across the country as they talk about the
unmet housing needs of an increasing number of families and
individuals who have consequently become homeless in their
communities. It is, therefore, with great enthusiasm that the
National Coalition for the Homeless supports the National
Affordable Housing Trust Fund, and strongly encourages its
expedited enactment and implementation.
As you know, for the past two decades, we have been
consistently rescinding our commitment to ``decent housing
for all Americans''. As a result, the need for affordable
housing is profound throughout the nation, in communities of
diverse sizes and socio-economic circumstances, and most
especially among extremely low-income households. For this
reason, we are seeing an unprecedented number of employed men
and women who have been forced into homelessness. I was
recently visiting a 250-bed single men's shelter in a urban
setting, where 70% of the residents were employed, most full
time, and what they got for their efforts, was a thin mat on
a concrete floor to call their `home'. We are also finding
very significant rates of homelessness among families who are
doing what they have been asked to do--moving from welfare to
work--but because of their low-wages are not able to afford
stable housing in healthy neighborhoods, which compromises
both their long-term employability and the health and well-
being of their children. We all want welfare reform to work;
the missing link has always been affordable housing.
Knowing that the availability of affordable housing is
fundamental to insuring that

[[Page S7919]]

working families can expect to meet their basic needs, we are
very grateful for your leadership in taking us as a nation
down the path of truly valuing individual and family
stability enough to ensure housing opportunities for those
without the resources to do it alone. The National Affordable
Housing Trust Fund represents America at her best--
opportunities and basic resources being made available to all
among us. Thank you for helping to bring America home again.
Sincerely,
Mary Ann Gleason,
Housing Policy Analyst.
____

The Enterprise Foundation,

Washington, DC, July 26, 2000.
Hon. John F. Kerry,
Ranking Member, Subcommittee on Housing and Transportation,
Committee on Banking, Housing and Urban Affairs, Senate
Hart Office Building, Washington, DC.
Dear Senator Kerry: On behalf of The Enterprise Foundation,
the more than 1,500 community development organizations that
we represent and the millions of low-income Americans living
in poverty, we applaud your efforts to increase the number of
permanently affordable homes available for those families
most in need by establishing The National Affordable Housing
Trust Fund. The proposed legislation, ``The National
Affordable Housing Trust Fund of 2000,'' provides additional
funding to the states and nonprofit organizations for the
development of decent, safe and affordable housing for low-
income families.
The Enterprise Foundation is a national nonprofit housing
and community development organization dedicated to
rebuilding distressed neighborhoods. Central to our mission
is to see that all low-income people in the United States
have the opportunity for fit and affordable housing and to
move up and out of poverty into the mainstream of American
life. Therefore, we see firsthand the critical need for this
legislation as a way to combat the growing affordable housing
crisis faced by our nation.
At a time of unprecedented national prosperity, it is
unconscionable that an ever larger number of Americans have
trouble securing decent, affordable housing. In fact, it is a
side effect of our booming economy that rents are rising
faster than wages for poor working Americans. This historic
legislation recognizes that now is the time to deal with our
national need to produce more safe and sanitary housing for
low-income Americans.
Your bill strikes a thoughtful balance between devolution
to the states and federal innovation. It allows states to
decide how to spend the majority of the grant funds according
to their housing needs but also allows for federal funding of
innovative private/public partnership models as a way to
leverage limited public resources.
We look forward to working with you on this bill throughout
the legislative process and admire your leadership and
continued efforts to address the critical housing needs of
our nation's lower-income families. With your support we look
forward to continuing our mission to rebuild distressed
communities by providing people the tools they need to move
out of poverty.
Sincerely,
Kristin Siglin,
Vice President.

Mr. SARBANES. Mr. President, I come to the floor today to voice my
support for the National Affordable Housing Trust Fund Act introduced
by Senator Kerry. Establishing a National Affordable Housing Trust Fund
is a necessary and timely legislative initiative.
The number of families in our country who live in substandard
housing, or pay more than 50 percent of their income for housing
costs--the factors considered in determining worst case housing need--
is staggering. Recent studies show that 5.4 million American families
have worst case housing needs. This is 100,000 more families than were
classified as worst case housing needs just last year.
In addition, no family making minimum wage can afford the fair market
rent for a two bedroom apartment in any metro area in the country. On
average, a person needs to earn over $11 to afford an apartment in any
American metro area, but this number is even higher in many parts of
the country. For instance, in Baltimore a person must earn over $12 an
hour, or $24,000 a year to afford the rent on a two bedroom apartment.
Traditionally, the government has helped families who do not earn
enough to afford a place to live with section 8 vouchers. However, in
today's booming real estate market, a section 8 voucher is no guarantee
of finding a place to live.
Currently, families in Maryland wait upwards of 31 months to get a
section 8 housing voucher. Once they receive the voucher, they face a
new challenge: finding an apartment that is affordable for them.
Recent articles in the Washington Post have highlighted the trials of
poor working families attempting to find affordable housing both with
and without federal assistance. One Fairfax, Virginia woman working
full time and living in a shelter called over 30 landlords, none of
which had vacancies that she could afford. Another social worker
commented that the voucher holders she counseled had to call close to
100 different developments to find a unit. The reality is that there
are simply not enough affordable housing units in our country to meet
the needs of low income Americans.
This situation is simply unacceptable. The working poor of our
country deserve decent places to live. Adequate housing is an essential
need for all Americans. It is the anchor that allows families to
thrive.
Children can't learn if they are forced to attend 3 or 4 schools in a
single year as their parents move from friend to friend because they
cannot afford the rent. Workers can't find jobs or get training if they
spend their days fighting to put a roof over their kids' heads. A sick
person will not get well if she spends her days huddled on a grate,
waiting for a bed in an emergency shelter.
Senator Kerry's bill would address our country's severe affordable
housing crisis by establishing an Affordable Housing Trust Fund that
will support the construction of additional affordable housing.
The Trust Fund is designed to create long-term affordable, mixed
income housing developments in areas where low-income families will
have access to transportation, social services, and job opportunities.
It is also designed to help in areas where local governments are
committed to revitalization. These priorities are explicitly laid out
in the legislation.
The bottom line is that we need to provide more resources to states,
local governments and non-profits who are working to build more
affordable housing. Unless we build more affordable units we will not
be able to solve the housing crisis we have today.
This bill is an opportunity for us to take advantage of our booming
economy to do this. I encourage my colleagues to join me in supporting
National Affordable Housing Trust Fund Act.
Mr. WELLSTONE. Mr. President, I am proud to join my colleagues here
today as co-sponsor of this bill which represents an important step
forward in solving the shortage of affordable housing. The need for
affordable housing has reached epic proportions and touches all of our
communities. The time for action is now.
The National Affordable Housing Trust Fund will be used to produce
housing that is affordable to very low income families. It will provide
states matching grant funds to produce affordable housing and engage in
homeownership activities. It will allow non-profit intermediaries to
compete for funds to produce housing. Most importantly, however, is it
will use the proceeds from our investment in promoting homeownership to
build homes for low income families.
Mr. President, in 1997, 5.4 million households with 12.3 million
people paid more than one half of their income in rent or lived in
seriously substandard housing. Who are these 12.3 million people? 1.5
million are elderly persons, 4.3 million are children and between 1.1
and 1.4 million are adults with disabilities. We can afford to do
better. This is a prosperous nation that can afford to solve this
problem.
In may own states of Minnesota, a worker must earn $11.54 an hour, 40
hours a week, 522 weeks out of the year to afford a fair market rent
for a two bedroom apartment. $11.54. That's more than double the
minimum wage. In fact, to afford a two bedroom apartment at minimum
wage, families must work 88 hours a week. 88 hours. That's barely
possible for a two parent family, and it is completely impossible for
single parent families.
The poorest families are particularly hard hit. In Minneapolis-St.
Paul, a study conducted by the Family Housing Fund found 68,900 renters
with incomes below $10,000 in Minneapolis-St. Paul and only 31,200
housing units with rents affordable to those families. That is more
than two families for each unit affordable to a family at that income
level and there is every indication it is getting worse.
Given this information, it isn't hard to understand why the number of
families entering emergency shelters and

[[Page S7920]]

using emergency food pantries is on the rise. In fact, more and more of
the homeless are working full time and are still unable to find
housing.
Mr. President, we must do more. The shortage of affordable housing is
so drastic that in Minneapolis-St. Paul, like many other cities, even
those families fortunate enough to receive housing vouchers cannot find
a rental unit. Landlords are becoming increasingly selective given the
demand for housing and are requiring three months security deposit,
hefty application fees and credit checks that price the poor and young
new renters out of the market.
Let me share a story that truly struck me. In February, the
Minneapolis Public Housing Authority distributed applications for
families in the region interested in public housing. This was the first
time since 1996 applications were accepted for public housing and it
will likely to be last time for several years. Six thousand families
sought applications for public housing in six days. An average of 1,000
families each day requested applications to reside in public housing in
one metropolitan area.
Those families were not applying for free housing. Residents would be
required to pay one third of their income in rent. This is not luxury
housing. Many families seem to look upon public housing with disdain,
though I know those communities are rich with the talents and
contributions of their tenants. This is not even immediate housing.
Many of those families will wait years to get into public housing.
Clearly this is a sign that the demand for housing far exceeds the
supply. There is an immediate need to produce more affordable housing.
Fortunately, we can afford to do this. Fortunately, we have a plan to
do this.
Mr. President, I know it is hard to think about poverty when we are
surrounded by so much prosperity. But economic prosperity has not
touched every family. Instead the gap between income groups continues
to widen and the gap between what low income families earn and what
they must pay for housing also appears to be widening.
The Bureau of Labor Statistics report that between 1995 and 1997
rents increased faster than income for the 20 percent of American
households with the lowest incomes. The Consumer Price Index for
Resident Rent rose 6.2 percent, higher than the 3.9 percent rate of
inflation for the same period.
The skyrocketing rents are fueled by the shortage of housing. The
demand for housing exceeds the supply, so in the private market the
rents spiral upwards and far beyond the reach of the poor and often
well-beyond the reach of the middle class who find themselves priced
out of the very communities they grew up in.
This affects families with children, elderly persons and persons with
disabilities. It affects the well-being of businesses. The cost of
housing has skyrocketed in some communities to a level that businesses
cannot retain workers because their workers cannot afford to live in
those communities. The shortage of housing is making it difficult for
communities to retain some of our most essential workers. Police,
firemen, teachers are all being priced out of the very communities they
seek to serve!

Mr. President, I am proud to be part of this effort that will
generate more affordable housing for low income families. It is time to
heed the call we are all hearing from our constituents. There is not
one town, county or metropolitan area in this nation where a family can
afford a two bedroom fair market rental working full time, year round
at minimum wage. Not one state where a family who receives TANF can
afford a two bedroom fair market rental unit.
Families respond to the shortage of housing by crowding into smaller
units. A one bedroom. An efficiency. Perhaps they rent seriously
substandard housing, exposing their children to lead poisoning, living
in neighborhoods where they don't feel safe allowing their children to
play outdoors. Housing with leaky roofs, bad plumbing, rodents,
roaches. Perhaps they pay more than the recommended 30 percent of their
income in rent, maybe 40 percent, 50 percent or more.
Families may do without what we might consider necessities. Not
luxuries, but necessities such as gas, heat, and electricity. Families
so financially stressed that one small crisis can send them tumbling.
Perhaps families double up, two families in a home. Multiple
generations crowded under one roof. When the stress of multiple
families becomes unbearable, they are left with homeless shelters.
Mr. President, in a recent study of homelessness in Minneapolis-St.
Paul, The Family Housing Fund reported that more and more children
experience homelessness. In one night in 1987, 244 children in the Twin
Cities were in a shelter or other temporary housing. In 1999, 1,770
children were housed in shelter or temporary housing. Let me repeat
that, 1,770 children in the Minneapolis-St. Paul area on one night
alone sent the night in a homeless shelter or temporary housing. Seven
times the number in 1987. And families are spending longer periods of
time homeless. If they have a family crisis, if they lost their housing
due to an eviction, if they have poor credit histories, if they can't
save up enough for a two or three month security deposit, they will
have longer stretches, longer periods of time in emergency shelters
before they transition into homes.
Mr. President, we are experiencing unprecedented prosperity. It is
time to make a commitment to ensuring families have access to decent
affordable housing. We can afford to do this. In fact, we cannot afford
not to do this.
______

By Mr. ROBB:
S. 3000. A bill to authorize the exchange of land between the
Secretary of the Interior and the Director of the Central Intelligence
Agency at the George Washington Memorial Parkway in McLean, Virginia,
and for other purposes; to the Committee on Energy and Natural
Resources.

Bill to Authorize a Land Exchange Between the Secretary of the Interior
and the Director of the Central Intelligence Agency at the George
Washington Memorial Parkway in McLean Virginia.

Mr. ROBB. Mr. President, the bill I am introducing today simply
allows for a land exchange between the National Park Service and the
Central Intelligence Agency. This exchange will enable the CIA to
address security issues at the entrance to their complex, while
preserving access to the Federal highway Administration's Turner-
Fairbanks Highway Research Center.
The exchange is currently the subject of an Interagency Agreement
between the National Park Service, George Washington Memorial Parkway,
and the Central Intelligence Agency. This is a simple exchange that I
am sure can be acted on in short order.
I ask unanimous consent that the bill in its entirety be printed in
the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 3000

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

SECTION 1. AUTHORIZATION OF LAND EXCHANGE.

(a) In General.--Subject to section 2, the Secretary of the
Interior (referred to in this Act as the ``Secretary'') and
the Director of Central Intelligence (referred to in this Act
as the ``Director'') may exchange--
(1) approximately 1.74 acres of land under the jurisdiction
of the Department of the Interior within the boundary of the
George Washington Memorial Parkway, as depicted on National
Park Service Drawing No. 850/81992 dated August 6, 1998; for
(2) approximately 2.92 acres of land under the jurisdiction
of the Central Intelligence Agency adjacent to the boundary
of the George Washington Memorial Parkway, as depicted on
National Park Service Drawing No. 850/81991, Sheet 1, dated
August 6, 1998.
(b) Public Inspection.--The drawings referred to in
subsection (a) shall be available for public inspection in
appropriate offices of the National Park Service.

SEC. 2. CONDITIONS OF LAND EXCHANGE.

(a) No Reimbursment or Consideration.--The exchange
described in section 1 shall occur without reimbursement or
consideration;
(b) Public Access for Motor Vehicle Turn-Around.--The
Director shall allow public access to a road on the land
described in subsection (a)(1) for a motor vehicle turn-
around on the George Washington Memorial Parkway.
(c) Turner Fairbank Highway Research Center.--The Director
shall allow access to the land described in subsection (a)(1)
by--
(1) employees of the Turner Fairbank Highway Research
Center of the Federal Highway Administration; and
(2) other Federal employees and visitors whose admission to
the Center is authorized by the Center.
(d) Closure To Protect Central Intelligence Agency.--

[[Page S7921]]

(1) In general.--Subject to paragraphs (2) and (3) and
notwithstanding any other provision of this section the
Director may close access to the land described in subsection
(a)(1) to all persons (other than the United States Park
Police, other necessary employees of the National Park
Service, and employees of the Turner-Fairbank Highway
Research Center of the Federal Highway Administration) if the
Director determines that the physical security conditions
require the closure to protect employees or property of the
Central Intelligence Agency.
(2) Time limitation.--The Director may not close access to
the land under paragraph (1) for more than 12 hours during
any 24-hour period unless the Director consults with the
National Park Service, the Turner-Fairbank Highway Research
Center of the Federal Highway Administration, and the United
States Park Police.
(3) Turner fairbank highway research center.--No action
shall be taken under this subsection to diminish access to
the land described in subsection (a)(1) by employees of the
Turner-Fairbank Highway Research Center of the Federal
Highway Administration except when the access to the land is
closed for security reasons.
(e) The Director shall ensure compliance by the Central
Intelligence Agency with the deed restrictions for the
transferred land as depicted on National Park Service Drawing
No. 850/81992, dated August 6, 1998.
(f) The National Park Service and the Central Intelligence
Agency shall comply with the terms and conditions of the
Interagency Agreement between the National Park Service and
the Central Intelligence Agency signed in 1998 regarding the
exchange and management of the lands discussed in that
agreement.
(g) The Secretary and the Director shall complete the
transfers authorized by this section not later than 120 days
after the date of enactment of this Act.

SEC. 3. MANAGEMENT OF EXCHANGED LANDS.

(a) The land conveyed to the Secretary under section 1
shall be included within the boundary of the George
Washington Memorial Parkway and shall be administered by the
National Park Service as part of the parkway subject to the
laws and regulations applicable thereto.
(b) The land conveyed to the Central Intelligence Agency
under section 1 shall be administered as part of the
Headquarters Building Compound of the Central Intelligence
Agency.

____________________