[Congressional Record Volume 148, Number 93 (Thursday, July 11, 2002)]
[Senate]
[Pages S6650-S6657]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. DOMENICI:
S. 2719. A bill to authorize the Secretary of the Army to carry out
critical restoration projects along the Middle Rio Grande; to the
Committee on Environment and Public Works.
Mr. DOMENICI. Madam President, great endeavors begin with a vision.
Last fall, I joined the Middle Rio Grande Conservancy District and the
Army Corps of Engineers in unveiling a vision that would rehabilitate
and restore the Rio Grande Bosque in Albuquerque, NM.
Today, I rise to introduce a bill that will make that vision a
reality. Since last fall, the Army Corps of Engineers has undertaken
the task of conducting a feasibility study so that we might gain a
better understanding of how best to rehabilitate and restore this
beautiful Albuquerque green belt.
I remain grateful to each of the parties who have been involved with
this idea since its inception. Each one contributes a very critical
component. The Middle Rio Grande Conservancy District owns this vital
part of the Bosque which runs from the National Hispanic Cultural
Center north to the Paseo Del Norte bridge. The MRGCD has proven to be
a valuable local partner in identifying areas for non-native species
and other environmental restoration work. Additionally, MRGCD continues
to work on the development and implementation of an educational
campaign for local public schools on the importance of the Bosque.
Finally, MRGCD has continually worked with all parties to provide
options on how the Bosque can be preserved, protected and enjoyed by
everyone.
[[Page S6651]]
Last year I committed to requesting the Army Corps of Engineers to
develop a preliminary restoration plan for the Bosque along the
Albuquerque corridor. I have done that and the plan is well underway.
This bill that I introduce today is the next step in following through
on this project.
Specifically, this bill authorizes $75 million dollars to complete
projects, activities, substantial ecosystem restoration, preservation,
protection and recreation along the Middle Rio Grande.
Having grown up in Albuquerque, the Bosque is something I treasure. I
have been very involved in Bosque restoration since 1991 and I commend
the Bosque Coalition for the work they have done, and will continue to
do, all along the river.
This new vision, specific to the Albuquerque Corridor, builds on that
idea and is a logical complement to these previous efforts as well as
towards Bosque revitalization, restoration and recovery along the
entire Rio Grande river.
This area was designated as a State park many years ago. As many of
you know, this area has been overrun by non-native vegetation, peppered
with graffiti, cluttered with trash and as we saw this past year, has
become more susceptible to fire.
I want to ensure that the Albuquerque corridor, which is a unique and
irreplaceable part of the desert Southwest's ecosystem, is preserved
for generations to come. A healthy ecosystem is key to such things as
the protection of threatened species and overall river flow.
We know that the river in this area is vital habitat for many
species, including the endangered Rio Grande Silvery minnow. Efforts
reducing non-native species, while protecting all from the possibility
of devastating wildfire, will also improve the flow of the river and
habitat for its many species.
At the same time, the Bosque is a natural green belt through
Albuquerque. This area should be made beautiful and more accessible to
the public for enjoyment.
I am grateful that all parties have come together and that I can be a
part of making this vision a reality. 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. 2719
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. FINDINGS.
Congress finds that--
(1) the Middle Rio Grande bosque is--
(A) a unique riparian forest located in Albuquerque, New
Mexico;
(B) the largest continuous cottonwood forest in the
Southwest;
(C) 1 of the oldest continuously inhabited areas in the
United States;
(D) home to portions of 6 pueblos; and
(E) a critical flyway and wintering ground for migratory
birds;
(2) the portion of the Middle Rio Grande adjacent to the
Middle Rio Grande bosque provides water to many people in the
State of New Mexico;
(3) the Middle Rio Grande bosque should be maintained in a
manner that protects endangered species and the flow of the
Middle Rio Grande while making the Middle Rio Grande bosque
more accessible to the public;
(4) environmental restoration is an important part of the
mission of the Corps of Engineers; and
(5) the Corps of Engineers should reestablish, where
feasible, the hydrologic connection between the Middle Rio
Grande and the Middle Rio Grande bosque to ensure the
permanent healthy growth of vegetation native to the Middle
Rio Grande bosque.
SEC. 2. DEFINITIONS.
In this Act:
(1) Critical restoration project.--The term ``critical
restoration project'' means a project carried out under this
Act that will produce, consistent with Federal programs,
projects, and activities, immediate and substantial ecosystem
restoration, preservation, recreation, and protection
benefits.
(2) Middle rio grande.--The term ``Middle Rio Grande''
means the portion of the Rio Grande from Cochiti Dam to the
headwaters of Elephant Butte Dam, in the State of New Mexico.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Army.
SEC. 3. MIDDLE RIO GRANDE RESTORATION.
(a) Critical Restoration Projects.--The Secretary shall
carry out critical restoration projects along the Middle Rio
Grande.
(b) Project Selection.--
(1) In general.--The Secretary may select critical
restoration projects in the Middle Rio Grande based on
feasibility studies.
(2) Use of existing studies and plans.--In carrying out
subsection (a), the Secretary shall use, to the maximum
extent practicable, studies and plans in existence on the
date of enactment of this Act to identify the needs and
priorities for critical restoration projects.
(c) Local Participation.--In carrying out this Act, the
Secretary shall consult with, and consider the priorities of,
public and private entities that are active in ecosystem
restoration in the Rio Grande watershed, including entities
that carry out activities under--
(1) the Middle Rio Grande Endangered Species Act
Collaborative Program; and
(2) the Bosque Improvement Group of the Middle Rio Grande
Bosque Initiative.
(d) Cost Sharing.--
(1) Cost-sharing agreement.--Before carrying out any
critical restoration project under this Act, the Secretary
shall enter into an agreement with the non-Federal interests
that shall require the non-Federal interests--
(A) to pay 25 percent of the total costs of the critical
restoration project;
(B) to provide land, easements, rights-of-way, relocations,
and dredged material disposal areas necessary to carry out
the critical restoration project;
(C) to pay 100 percent of the operation, maintenance,
repair, replacement, and rehabilitation costs associated with
the critical restoration project that are incurred after the
date of enactment of this Act; and
(D) to hold the United States harmless from any claim or
damage that may arise from carrying out the critical
restoration project (other than any claim or damage that may
arise from the negligence of the Federal Government or a
contractor of the Federal Government).
(2) Recreational features.--
(A) In general.--Any recreational features included as part
of a critical restoration project shall comprise not more
that 30 percent of the total project cost.
(B) Non-federal funding.--The full cost of any recreational
features included as part of a critical restoration project
in excess of the amount described in subparagraph (A) shall
be paid by the non-Federal interests.
(3) Credit.--The non-Federal interests shall receive credit
toward the non-Federal share for any design or construction
activities carried out by the non-Federal interests before
the date of execution of a cost-sharing agreement for a
critical restoration project if the Secretary determines in
the feasibility study for the critical restoration project
that the activities are part of the critical restoration
project.
SEC. 4. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this
Act--
(1) $10,000,000 for fiscal year 2003; and
(2) such sums as are necessary for each of fiscal years
2004 through 2012.
______
By Mr. SARBANES (for himself, Mr. Reed, Mr. Schumer, Mr. Carper,
Ms. Stabenow, Mr. Corzine, and Mr. Akaka):
S. 2721. A bill to improve the voucher rental assistance program
under the United States Housing Act of 1937, and for other purposes; to
the Committee on Banking, Housing, and Urban Affairs.
Mr. SARBANES. Madam President, I come to the floor today to introduce
the Housing Voucher Improvement Act of 2002. I am pleased that this
legislation is being co-sponsored by a number of my colleagues on the
Committee on Banking, Housing, and Urban Affairs: Senators Reed,
Schumer, Carper, Stabenow, Corzine, and Akaka. This legislation will
make important changes to the housing voucher program, a program that
serves over 1.5 million low-income American families. These 1.5 million
families are part of a growing number of people in this country who are
unable to afford rising housing costs. As we learned in hearings before
the Committee earlier this year, for too many people, the paycheck they
bring home is too small to cover housing and other expenses. Low-income
families are forced to live in crowded, unsafe conditions or forgo
other necessities to make ends meet.
In order to ensure that families have decent, safe and affordable
housing, the government provides assistance in a variety of ways
including public housing, section 8 vouchers, FHA mortgage insurance,
and homeless assistance programs. While we have provided funding for
these programs over the years, more must be done. It is estimated that
over 14 million working families in this country pay more than they can
afford for housing. In addition, 1.7 million families live in
substandard housing--housing that is unsafe or overcrowded.
Homelessness continues to be a major problem, with approximately 2
million people experiencing homelessness at some point this year. These
statistics show that millions of Americans are unable to afford the
most basic of needs, housing.
The solution to the affordable housing crisis is not found in any one
program or in any one policy. We must
[[Page S6652]]
work on a variety of fronts to combat this crisis. We must preserve the
affordable housing that already exists; we must build new affordable
housing; and, we must ensure that the housing programs we have in place
work effectively to house families in need. The Housing Voucher
Improvement Act is not intended to address all of these needs, but it
is an important step forward in making sure that the voucher program
works to provide the greatest range of housing opportunities to the
lowest income Americans.
The bill I am introducing today is intended to work towards three
objectives: ensuring that the voucher program works effectively and
that all families receiving vouchers are able to find adequate housing;
providing families with vouchers the widest range of possibilities as
to where to live; and assisting families receiving housing assistance
in attaining self-sufficiency.
The voucher program has provided millions of Americans with the
opportunity to live in safe and decent homes. However, as housing
markets tighten, families are finding it more difficult to use housing
vouchers. This difficulty may result from a lack of rental housing,
available housing being too expensive, or too few landlords who accept
tenants with housing vouchers. The Housing Voucher Improvement Act will
give local public housing authorities a number of tools to assist
voucher holders in finding housing and to make the voucher program
attractive to private market landlords.
To help people find decent and safe housing, this bill will give
public housing agencies the flexibility to use a limited amount of
their funds to provide search assistance to voucher holders. For many
people who receive vouchers, additional assistance, such as housing
counseling, transportation services, or security deposit funds may make
the difference in finding a place to live. This bill will also increase
housing opportunities for voucher holders by allowing public housing
agencies to increase the amount that the voucher is worth where a
significant number of families given vouchers are unable to find
adequate housing. Provisions are also included in the bill to make it
easier to use vouchers in housing developed with HOME funds or Low
Income Housing Tax Credits. Ensuring that vouchers can be used in these
developments will greatly expand housing opportunities for extremely
low-income families.
In order to operate a successful program, enough apartments must be
available for people with vouchers. Therefore, vouchers must be an
attractive option for landlords. Towards that end, the Housing Voucher
Improvement Act allows public housing agencies to use their funds to
reach out to local property owners to increase landlord participation
in the vouchers program. It also scales penalties for inspection
violations to the magnitude of the violation and helps guarantee timely
payments to apartment owners by creating an incentive for housing
authorities to use automatic payment systems for interested owners.
This bill will also allow public housing authorities to streamline
inspections while still ensuring that housing is decent, safe and
sanitary. All of these provisions will make vouchers easier to use for
private-market apartment owners.
This bill also creates a new use for vouchers, allowing housing
authorities to couple a limited number of vouchers with housing being
constructed with HOME dollars, tax credits, or other funds. These
``thrifty vouchers'' will cost less than regular vouchers, allowing
more families to be served.
While most of this bill will help to expand housing opportunities for
people searching for housing, one critical component of housing policy
is self-sufficiency. Housing assistance is key in moving people from
welfare to work. A stable home is needed for job stability. While this
seems intuitive, I do not rely on intuition alone in making this
assertion. Recent studies, including one done by the Manpower Research
Demonstration Corporation, show that people receiving housing
assistance are more successful in moving from welfare to work. They had
higher wages and retained employment for longer periods of time. This
bill strengthens the role that housing plays in self-sufficiency by
providing greater opportunities for voucher holders to become involved
in educational and employment programs. We also authorize welfare to
work vouchers, which will strengthen relations between housing and
welfare agencies. Given the role that housing assistance can play in
promoting self-sufficiency, greater confidence between housing and
welfare agencies makes good common sense.
I introduce this bill today with the hope that it will strengthen one
of the most important federal housing programs. People given vouchers
should be able to find adequate housing, and should have greater
choices in where to live. And those families already receiving housing
assistance should be able to access programs that will assist them in
meeting their educational and employment goals. There is widespread
consensus that the changes made in this bill will assist in these
efforts. This bill is supported by a wide range of organizations
including public housing agencies, industry groups, and advocacy
organizations. The bill is strongly supported by the National
Association of Housing and Redevelopment Officials, the Center on
Budget and Policy Priorities, the Local Initiatives Support
Corporation, the Enterprise Foundation, the National Low Income Housing
Coalition, the National Apartment Association, the National Affordable
Housing Management Association and others.
I want to take a moment to thank my staff for their hard work on this
bill, and I want to specifically thank Mary Grace Folwell, a fellow
from the American Planning Association, who has been crucial in working
on this legislation.
I urge my colleagues to support this critical legislation and to
recognize the important role that housing assistance plays in the lives
of millions of Americans.
Madam President, I ask unanimous that letters of support and a
section-by-section analysis be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
July 11, 2002.
Senator Paul S. Sarbanes,
Chairman, Senate Banking Housing and Urban Affairs,
Washington, DC.
Dear Senator Sarbanes: We, the organizations signed below,
are writing in support of the Housing Voucher Improvement Act
of 2002. The Section 8 housing voucher program provides many
low-income families with the means to find affordable
housing. However, in many cities, suburbs, and rural housing
markets around the country, vouchers are very difficult to
use. In some markets, there is just not a lot of rental
housing available, the available housing is too expensive, or
there are too few landlords who accept tenants with Section 8
vouchers. This legislation is narrowly tailored to make
vouchers more effective by giving PHAs various tools to
assist voucher holders in finding housing and by making
vouchers easier for private properly owners to use.
To make vouchers easier to use for private-market apartment
owners, the Housing Voucher Improvement Act changes the unit
inspection requirement to make it more time-efficient; scales
penalties for inspection violations to the magnitude of the
violation; and, to guarantee timely payments by the PHA,
creates an incentive for PHAs to use automatic payment
systems for interested owners.
To help PHAs deal with high-cost rental markets, the bill
increases local flexibility in setting maximum rents. The
legislation grants PHAs limited authority to increase their
Fair Market Rents to a maximum of 120% of the area's fair
market rent. Current law allows PHAs to use this maximum only
after the waiver is granted by HUD. The bill also adds
provisions to facilitate the use of vouchers in units in
lower-poverty neighborhoods that are developed with HOME
funds or Low Income Housing Tax Credits.
To help voucher-holders find housing, the bill authorizes
PHAs to use existing funding to provide landlord outreach and
education and apartment-search assistance to voucher-holders
as well as assistance with security deposits, application
fees and credit checks.
The bill gives local public housing authorities the option
of turning a limited portion of its available vouchers into
lower cost ``thrifty vouchers,'' which can be attached to a
new housing development or to a development this
rehabilitated or preserved. Because the vouchers cost less
than regular vouchers, a larger number of families can be
served by the same level of funding. The bill also makes it
easier to administer the project-based component on the
vouchers program and to attach vouchers to buildings in a
range of neighborhoods.
Appropriately in this year of welfare reauthorization, the
bill contains several provisions to promote employment among
tenants of HUD's major rental assistance programs, including
a 5-year authorization of Welfare-to-Work vouchers.
We thank you for your leadership on this issue and for your
continued support of affordable housing programs.
[[Page S6653]]
Consortium for Citizens with Disabilities Housing Task
Force, Center on Budget and Policy Priorities, Local
Initiatives Support Corporation (LISC), National Apartment
Association, National Association of Housing and
Redevelopment Officials (NAHRO), National Coalition for the
Homeless, National Housing Conference, National Housing Law
Project, National Low Income Housing Coalition, National
Multi Housing Council, The Enterprise Foundation, and
Volunteers of America.
____
National Affordable Housing
Management Association,
Alexandria, VA, July 11, 2002.
Hon. Paul S. Sarbanes,
Chairman, Senate Committee on Banking, Housing, and Urban
Affairs, Washington, DC.
Dear Chairman Sarbanes, The National Affordable Housing
Management Association (NAHMA) is pleased to support
provisions in the Housing Voucher Improvement Act which make
the Section 8 voucher program more user-friendly for both
tenants and landlords, improve administration, and address
many problems which inhibit voucher utilization.
In recent years, the difficulty of satisfying the Section 8
regulatory burdens has created a strong disincentive for
private landlords to accept the vouchers. The Housing Voucher
Improvement Act makes several constructive reforms to the
voucher program which address this reality. First, it makes
the unit inspection requirement more time efficient.
Likewise, it makes penalties for inspection violations
commensurate with the severity of the violation. Furthermore,
it will improve the timeliness of payments to landlords by
creating an incentive for public housing authorities (PHAs)
to use automatic payment systems.
This bill also addresses voucher utilization problems in
high-cost areas by offering PHAs flexibility to establish
maximum rents in high cost areas. By allowing PHAs to set the
voucher payment standard at 120 percent of fair market rent
(FMR), housing authorities will be able to automatically
increase their payment standard to address market changes.
In short, NAHMA is pleased that you have offered
legislation to improve Section 8 voucher utilization and
increase housing opportunities for extremely low income
families.
Sincerely,
George Caruso,
Executive Director.
____
Council of Large Public Housing Authorities,
1250 Eye Street NW, Suite 901 A,
Washington, DC, June 27, 2002.
Hon. Paul Sarbanes,
Chair, Committee on Banking, Housing and Urban Affairs,
Washington, DC.
Dear Chairman Sarbanes: We write in support of your efforts
to make Section 8 vouchers easier to use through the
``Housing Voucher Improvement Act of 2002.'' In light of the
great need for more affordable housing opportunities and the
difficulty many low-income families have encountered in
utilizing the program due largely to rising costs in many
markets, we agree that legislative changes are needed so that
the program can be more effective in providing housing
subsidy to low-income families. We very much appreciate the
attention this legislation will bring to this important
issue.
As a November 2001, HUD study shows, tight market
conditions brought about by extremely low vacancy rates in
many communities is biggest impediment to voucher holders
succeeding in utilizing their subsidy. We support several
provisions in the bill that would help address this problem,
particularly the proposal to enable PHAs to increase payments
to 120% of the payment standard without prior HUD approval,
In addition, the sections which authorize a $50 million
Voucher Improvement Fund and provide some flexibility for
PHAs to use voucher resources to pay for housing counseling,
search assistance, and incentives to landlords will help
voucher holders become more competitive in the market place.
The proposed revisions to the current project-based Section 8
program will also assist PHAs that can better serve low-
income families by increasing the supply of assisted units,
instead of relying on exclusively on private market.
While we understand that this bill is designed to make only
modest changes to the Section 8 program, it highlights the
need for a more dramatic reform. Legislative changes over the
years have addressed particular issues to help Section 8 keep
pace with changing market conditions, however, some of these
piecemeal modifications have added significantly to the
program's complexity. Ultimately, we believe that local
authorities need even more flexibility to make the most
efficient use of Federal funding for housing in an ever-
changing market place. Your bill is a step in that direction.
Again, we very much appreciate your staunch support of
affordable housing programs and your efforts to increase
Federal investment in this area. We look forward to our
continued work with you and your dedicated staff to continue
to make the Section 8 program work better for needy families.
Sincerely,
Sunia Zaterman,
Executive Director.
____
Summary of the Housing Voucher Improvement Act of 2002
Section 1. Short Title.
Section 2. Purposes--(1) to ensure that the Section 8
program works effectively and all families receiving vouchers
are able to find adequate housing; (2) to provide families
with vouchers the widest range of possibilities as to where
to live; and (3) to assist families receiving housing
assistance in attaining self sufficiency through encouraging
partnerships between housing authorities and welfare
agencies.
Section 3. Authorize ``Thrifty Vouchers'' designed to make
additional housing affordable to extremely low-income
families.
Thrifty Vouchers (TVs) are intended to encourage the
production or preservation of housing affordable to extremely
low-income families. PHAs would be authorized to issue TVs
out of their existing allocation of vouchers. In addition,
Congress could appropriate additional incremental assistance
for use as TVs.
TVs would cost less than regular vouchers because there
would be no debt service included in the rent calculation for
a TV unit. Rents would be based on the operating costs of a
development and would be capped at 75% of the FMR (unlike
regular vouchers which are set between 90 and 110% of the
FMR). Data indicate that 75% of FMR should be adequate in
most places to cover the costs of operation of multifamily
housing. The bill provides an exception to the 75% cap for
PHAs that can demonstrate both that this cap could not
support a reasonable operating cost of rental housing and a
need for the production or preservation of affordable housing
in the PHA's service area. Since these vouchers cost less
than regular vouchers, PHAs could serve more families with
the same amount of funding.
At the beginning of the development of a project,
developers receiving tax credits, HOME funds, or other
capital subsidies could link TVs to not more than 25% of the
units in a development. The 25% cap is intended to prevent
concentration of poverty. While tax credits and HOME are
producing new rental housing, such housing is not affordable
to extremely low income families without additional operating
subsidies. A recent study done by HUD found that extremely
low-income families living in HOME units who do not also
receive vouchers, pay 69% of their income for rent. In some
cases, residents use tenant-based vouchers to afford such
units. However, linking TVs to a project would ensure that
some of the units in a given project would be affordable to
those most in need of housing.
This section makes TVs a subparagraph of the project-based
voucher statute. This is in response to a concern expressed
by HUD that they do not want to administer two separate
programs. Thus, TVs would be counted against a PHA's 20% cap
on project-based vouchers; however, new incremental
assistance appropriated by Congress for use as TVs would not
be counted against the 20% cap.
Several changes were made to the project-based voucher
statute to make it easier for PHAs and private owners to
administer these vouchers. The most significant include the
expansion of the purpose of project-based vouchers to include
the revitalization of low-income communities and the
prevention of the displacement of extremely low-income
families, and changes to the waiting list provisions to
allow for separate project-based lists and to permit PHAs
to allow owners to maintain their own waiting lists,
subject to certain requirements.
Section 4. Providing assistance to voucher holders in their
search for decent, safe and affordable housing.
1. Allow PHAs with unutilized Section 8 funds to use those
funds on activities designed to assist families in finding
housing. PHAs that have low utilization rates (they do not
use all of their Section 8 funds to house families) will have
unused Section 8 funds that could be made available to assist
families in finding housing. This legislative change would
allow PHAs to use 2% of the funds they receive under the
voucher program to provide additional services to families
searching for housing if they have a low voucher success rate
and/or problems with concentration of voucher holders in
high-poverty neighborhoods. PHAs could use funds for
counseling, security deposits, application and credit check
fees, and search assistance such as transportation services.
2. Allow PHAs that use all of their Section 8 funds to use
up to one week of reserves on activities designed to assist
families in finding housing. For PHAs that use all of their
funds and whose families still face difficulties in funding
adequate housing (a success rate less than 80%), the bill
allows PHAs to use up to one week of reserves to provide
additional service to families searching for houring.
3. Create a Voucher Success Fund of $50 million for PHAs
that do not have unused funds, but still need additional
resources to assist families in finding housing. These PHAs
use almost all of their Section 8 funds, but families that
receive vouchers still face difficulties in finding adequate
housing. PHAs that use almost all of their Section 8 funds
but have a success rate lower than 80% would apply to HUD for
funds to help families find housing through counseling,
security deposits, application and credit check fees, and
search assistance such as transportation services.
Section 5. Expanding housing opportunities for voucher
holders
1. All PHAs to set their voucher payment standard at 120%
of FMR if they have had their payment standard set at 110% or
above
[[Page S6654]]
for the previous 6 months AND continue to have problems with
utilization, success rates, or concentration of Section 8
units. Currently, PHAs may set their payment standard (which
determines the amount the voucher is worth) between 90% and
110% of the Fair Market Rent. HUD can approve higher payment
standards on a case by case basis. This change will allow
housing authorities to automatically increase their payment
standard to address market changes. Raising the payment
standard will help ensure that more vouchers could be used in
high cost Areas.
2. Allow PHAs to pay 120% of FMR as the payment standard in
individual cases for people with disabilities. People with
disabilities may be limited in their housing opportunities,
and their choices may be restricted based on special needs.
This provision will allow housing authorities to pay up to
120% of the FMR as a reasonable accommodation for voucher
holders with disabilities without prior HUD approval, and
would authorize HUD approval for payment standards above
120%.
3. Allow PHAs to set higher payment standard for voucher
used in Low Income Housing Tax Credit (LIHTC) developments.
The LIHTC program provides substantial funding for low-income
housing development. Though tax credit housing serves low-
income people, these properties are not usually affordable to
extremely low-income households (with incomes below 30% of
the Area Median Income). One way to serve the poorest
families in tax credit developments is to house families with
vouchers. The recent increase in tax credits presents an
opportunity to expand housing choice for even the lowest
income families. In some areas, the tax credit units will
have higher rents than are normally covered by a voucher. In
2000, Congress changed the project-based statute to allow
project-based assistance to cover these higher rents so long
as the LIHTC building was not in a high poverty census tract.
This provision would make a similar change for vouchers.
4. Allow PHAs to pay up to their full payment standard for
units in HOME developments. Currently, HOME units may only be
rented up to the Fair Market Rent to voucher holders. This
provision will allow a PHA to pay a rent at their regular
payment standard, where above the FMR, in order to provide an
incentive to HOME developments to seek out voucher holders as
renters, only where the units are located outside of high-
poverty areas.
5. Addressing Housing in the Consolidated Plan. Cities,
counties and states that receive Community Development Block
Grant (CDBG) funds (known as ``participating jurisdictions'')
are required to complete Consolidated Plans detailing the
housing and community development needs in their
jurisdictions. This provision of the bill makes the following
changes to the Consolidated Plan requirements:
a. Include a requirement that the jurisdiction identify
barriers to voucher utilization and potential solutions. This
would ensure that entities other than the PHA (such as cities
and counties) are aware of issues with voucher recipients and
their ability to find housing. While no direct action would
be required from the city or participating jurisdiction, they
would be acknowledging the difficulties in using vouchers,
and identifying the causes. This would hopefully lead to the
jurisdiction deciding to take actions to alleviate the
barriers where possible.
b. Include a requirement that the jurisdiction consider
employment opportunities in determining the location of
housing development. Housing opportunities close to
employment opportunities and/or transportation are important
to ensuring the success of low-income people in finding and
retaining employment. This provision would ensure that
jurisdictions are looking at location in determining where
housing resources should be allocated.
c. Include a requirement that a participating jurisdiction
must consult with social service agencies in certain aspects
of planning for housing opportunities. When determining how
to address affordable housing problems, housing planners and
welfare administrators should be working together to help
plan for people moving from welfare to work, and to help link
people receiving housing assistance with welfare agencies and
resources (and vice versa).
Section 6. Access to HOME and LIHTC developments
Require that HUD ensure that PHAs have a list of LIHTC and
HOME developments to give to voucher holders. While LIHTC
developments could provide housing opportunities to very poor
families, and while LIHTC developments may not discriminate
against voucher holders, there is almost no communication or
coordination between PHAs and state HFAs, which operate the
LIHTC program. This provision will require HUD to compile
information on where tax credit and HOME developments are
located and ensure that this information is readily available
to PHAs. PHAs will be responsible to access such information
and provide it to families searching for housing assistance
with vouchers.
Section 7. Reallocation of vouchers. Currently, HUD allows
PHAs to return unused vouchers to HUD. HUD published a notice
(which has not yet been fully implemented) which requires
that unused budget authority be recaptured from PHAs with low
utilization rates (under 95% utilization). While HUD's notice
describes how they will reallocate these vouchers, the
reallocation is not structured in a way that ensures that
communities do not lose needed vouchers. This provision will
require that vouchers to be reallocated be distributed to one
or more administrators in the region. HUD would, through a
competition, designate such an administrator with Section 8
experience, which could be a PHA, a state or local agency, a
non-profit, or a private entity. The administrator would
receive all vouchers available for reallocation in its region
and would be able to operate the vouchers on a regional
basis, allowing and encouraging families to live anywhere in
the metropolitan area while still serving people on the
original PHA's waiting list. The new administrator would have
to reach certain levels of performance--in both success rates
and utilization in order to retain the vouchers.
Section 8. Promoting Self-Sufficiency
1. Allow people who live in a project-based Section 8
housing to be eligible for Family Self Sufficiency
activities. The Family Self Sufficiency (FSS) program
provides services to assist families in public housing or
those who receive vouchers in attaining educational and
employment goals. This provision would also make residents of
project-based Section 8 housing eligible for the FSS program.
Under this provision, owners of project-based section 8
housing would be able to choose to operate their own FSS
program, and if they opted not to provide such services, the
PHA, at its discretion, could choose to serve such families
in its FSS program. While this change will have some cost, it
will be small, given that only a small percentage of families
currently participate in FSS programs.
2. Allow Resident Opportunities and Self-Sufficiency (ROSS)
funds to be used to serve Section 8 families. ROSS grants are
given to PHAs and resident organizations to fund self-
sufficiency activities. Currently, PHAs can only serve public
housing residents with these funds, though the predecessor to
ROSS allowed PHAs to serve Section 8 residents as well. This
provision would permit PHAs to serve Section 8 tenants with
ROSS funds, though it would leave the decision to each PHA to
determine where funds are best used.
3. Incentives to Families to Increase Earnings. State and
local welfare agencies have an enormous amount of flexibility
in using their funds to help low-income families. In some
cases, welfare agencies and housing authorities have worked
together to use some of these funds to assist people
receiving federal housing assistance. This section would
ensure that payments made by welfare agencies (or other
agencies) to help families with rental payments that have
increased because of increased earnings, are deducted from
the family's income when the PHA determines that family's
share of rent. These provisions will create incentives for
families to increase earnings and retain employment by
allowing them to retain more of their income.
4. Authorize Welfare to Work Vouchers. In FY 1999, Congress
authorized 50,000 Welfare to Work vouchers in an
appropriations bill. The program has never been authorized
and new vouchers have not been allocated beyond the initial
50,000. However, given that welfare will be reauthorized this
year, the timing seems perfect to authorize this program,
giving housing authorities additional incentives to
collaborate with welfare agencies. In authorizing this
program, we strengthen the requirements that PHAs work with
welfare agencies in administering these vouchers. Recent
studies show that housing assistance is critical in allowing
people to retain employment, and these vouchers will help in
this effort.
Section 9. Inspection of Units under Section 8. Currently,
when a voucher holder wants to rent a unit, prior to the
voucher holder moving in, and payments being made to an
owner, the PHA must inspect that individual unit and any
deficiencies must be repaired. Owners and PHAs agree that
this is disincentive to owners participating in the program
because of the amount of time it takes to lease-up the unit
and receive payment. This provision will allow a PHA to begin
payments to an owner prior to inspection of that particular
unit so long as: (1) a building inspection has been conducted
by the PHA in the last 6 months; (2) a unit inspection is
completed within 30 days; and (3) the PHA and the owner have
an agreement that any repairs on the unit must be made within
30 days of the unit inspection. This section will also allow
PHAs to annually inspect units within 3 months of the
anniversary date of that unit entering the Section 8 program
if they are conducting inspections on a geographical basis.
Current regulation allows PHAs to withhold their entire
portion of a rent payment for an inspection violation,
regardless of the magnitude of the violation. This provision
would scale penalties for inspection violations to the
severity of the violation--if a garbage disposal needs to be
fixed the PHA payment will only be withheld to the extend
that the garage disposal would merit.
These changes will help to bring owners into the program
while still ensuring that units meet HUD standards for being
safe and decent.
Section 10. Automatic Payment Systems. Currently, some, but
not all, PHAs use electronic fund transfers to pay Section 8
dwelling unit owners. This section would allow PHAs to use
technical assistance funds and other means to establish
electronic fund transfer systems for rental payments.
Landlord participation is optional. Automatic
[[Page S6655]]
payment systems would assist PHAs in making timely rent
payments and thereby encourage owner participation in the
Section 8 program.
Section 11. Enhanced Workers. To protect tenants from
displacement, in 1999 Congress passed legislation creating
``enhanced vouchers'' for all tenants facing conversion of a
project from project-based Section 8 to market-rate housing.
In several respects, the law as passed and interpreted by HUD
fails to clearly protect tenants as Congress intended. Some
PHAs require existing tenants to go through an application
process for enhanced vouchers, which occasionally results in
a tenant being denied voucher benefits. To protect tenants,
this section amends the existing statute to clarify that
tenants cannot be required to go through the application
process again to receive an enhanced voucher.
``Empty nesters,'' elderly tenants whose household members
have either moved or died, sometimes reside in units that are
too large for their current family size under normal program
and occupancy requirements. Likewise, growing families may
reside in units that are too small under normal program and
occupancy requirements. In both situations, these tenants
could be displaced due to family/unit size mismatches. This
section clarifies the current enhanced voucher statute to
allow tenants with family size/unit mismatches to remain in
the unit until an appropriately sized unit becomes available
in the property.
______
By Mr. ROCKEFELLER:
S. 2722. A bill to amend the Internal Revenue Code of 1986 to ensure
the proper tax treatment of executives compensation, and or other
purposes; to the Committee on Finance.
Mr. ROCKEFELLER. Madam President, the corporate accounting scandals
that have unfolded over the previous few months have caused
incalculable damage to the American economy. Millions of people have
been harmed, among them some of our most vulnerable citizens, including
retirees on fixed incomes and families who have saved for years to
educate their children or finally buy a home. Loss of confidence
threatens our economy and diminishes hope for the millions who have
lost their jobs in the last 18 months. And the cost of equity is
rising, making it more difficult for the vast majority of honest and
energetic entrepreneurs to turn their ideas into economic growth.
This is not a bubble bursting; it is, in great measure, the result of
a considerable diminution of regulation at the behest of powerful
lobbies, over the objections of many people.
Today, the Senate is debating the most effective way to restore
balance between entrepreneurship and oversight, to ensure that
corporate excesses do not again steal the savings of millions of
people. The underlying Senate bill is based on accounting reforms and
tougher enforcement. The Finance Committee is about to mark up its own
bill dealing with diversification requirements, executive compensation,
and notification and disclosure regarding 401(k) plans.
I fully support Senator Sarbanes' bill and will support the Finance
Committee proposal as well. And today I propose legislation that will
complement my colleagues' efforts and help us move toward our goal of
restoring confidence in American business and American businesspeople.
Where legislation already under consideration focuses largely on
oversight and punishment--two critical sides of the triangle--my bill
attacks the incentives to cut corners or commit crimes in the arena of
executive compensation.
This legislation will protect workers and shareholders as Congress
carefully sorts through the appropriate measures.
Currently, Federal regulations permit a number of frankly sleazy
accounting practices which allow corporations and their executives to
take millions of dollars away from shareholders, creditors, and the
Treasury, without any penalty at all. Some of the most obvious abuses
aren't even crimes. My proposal will help to stop white collar crime
before it is committed, by taking the common sense step of putting the
lid on the cookie jar.
This bill will do four things: 1. Right now, corporations may
transfer funds to an executive's deferred compensation account, giving
that executive certain access to the money but potentially also
removing it from the reach of shareholders and creditors. But since it
is termed ``deferred,'' the executive pays no taxes. Currently, Section
132 of the Revenue Code prevents regulators from cracking down on this
practice. My legislation gives Treasury the authority to examine the
constructive receipt doctrine and close loopholes that allow
inappropriate deferral of taxation. It also gives Treasury the
authority to act on situations where executive assets are supposedly
subject to the claims of an employer's creditors, but in reality, are
protected from legitimate claims. Either the individual must pay income
tax, or the funds must be corporate assets subject to claims. They
can't have it both ways.
2. Currently, corporations can give their senior executives massive
loans, with no real expectation of repayment. These loans are
effectively theft from the employees and shareholders, since they
represent revenue given in compensation which will never be repaid,
reinvested, or distributed as dividends. And they are theft from the
Treasury as well; since they are accounted as loans, the recipient
doesn't pay taxes on them. It's a tax-free performance bonus, often
given--as we saw in the Adelphi and WorldCom cases--when the executive
deserves more to be fired than to be paid. My legislation will make
sure a loan is a loan: if a loan doesn't require security or have any
enforceable repayment schedule, it's income and it will be taxed, just
like the salaries of rank-and-file workers are taxed.
3. Right now, company employees may be unable to sell their stock
while executives are dumping theirs and creating--as analysts take note
and supply overwhelms demand--the kind of stock-price death spiral that
took the life savings of thousands of Enron employees.
Back in the early 1980's, Congress responded to the trend of
corporations providing their executives with ``gold parachutes'' with a
20 percent excise tax on those payments. I believe that the excise tax
on golden parachutes should also be applied to the sales of corporate
stock by corporate executives during periods when regular employees of
the company are not able to freely sell their stock in their company
retirement plans. This would be a temporary, six-month provision, to
deter corporate executives from taking advantage of the existing
uncertainty as Congress considers other possible reforms to encourage
more equitable treatment of rank-and-file employees and corporate
executives. And it will be a bridge from the current structure to one
in which employees have the same ability to sell their stock as
insiders have.
4. Additionally, my bill will prevent corporate executives from
getting a free ride when their corporation moves offshore for tax
avoidance purposes. Under current law, if an American corporation
dissolves and is then reincorporated in a foreign country, shareholders
of the corporation are required to pay capital gains on the
``exchange'' of their stock in the ``old corporation'' for stock in the
``new corporation,'' even though they never actually sell their stock.
Meanwhile, corporate executives, who have engineered the move offshore,
are under no such obligation regarding stock options they receive as
compensation. My bill would require executives to pay capital gains
taxes on the ``exchange'' of their stock options when they move
offshore to avoid taxation. I believe this provision will provide a
much-needed disincentive to corporate executives seeking to avoid the
reach of the IRS through corporate expatriation.
I agree with all those who would increase oversight and penalties,
but I say, let's also look at first causes--the executive compensation
funds. That's where some of the greatest opportunities for
inappropriate, unfair, and unethical practices are--practices that
disadvantage average workers and investors and are undermining
confidence in America's capital markets. And it's time for that to
change.
Finally, I am appalled at the problem of executives benefitting from
what can only be considered excessive compensation arrangements in the
waning days before bankruptcy of a failing corporation. I am looking
for a way to prevent those arrangements in the final months before a
corporation closes, and I hope to have a proposal ready for
introduction soon.
______
By Mr. LEAHY:
[[Page S6656]]
S. 2723. A bill to provide transitional housing assistance for
victims of domestic violence; to the Committee on Banking, Housing, and
Urban Affairs.
Mr. LEAHY. Madam President, I am pleased to introduce the
Transitional Housing Assistance for Victims of Domestic Violence Act of
2002 to provide grants for transitional housing and related services to
people fleeing domestic violence situations.
I witnessed the devastating effects of domestic violence early in my
career as the Vermont State's Attorney for Chittenden County. Today, a
growing number of homeless individuals are women and children fleeing
domestic violence. More than half the cities surveyed by the U.S.
Conference of Mayors in 2000 cited domestic violence as a primary cause
of homelessness. Shelters offer short-term assistance, but are
overcrowded and unable to provide the support needed. Transitional
housing allows women to bridge the gap between leaving a domestic
violence situation and becoming fully self-sufficient.
A transitional housing grant program was last authorized for only one
year as part of the reauthorization of the Violence Against Women Act
in 2000. This program would have been administered through the
Department of Health and Human Services and provided $25 million in
FY2001. Unfortunately, funds were never appropriated for the program,
and the authorization has now expired.
The grant program established in the bill I am introducing today
would be administered through the Department of Justice, in
consultation with the Departments of Health and Human Services and
Housing and Urban Development. This program would have the benefit of a
wide range of expertise in the three departments, and has enormous
potential to improve people's lives.
This new grant program will make a big impact, in many areas of the
country, availability of affordable housing is at an all-time low.
There are many dedicated people working to provide victims of domestic
violence with resources, such as Rose Pulliam of the Vermont Network
Against Domestic Violence and Sexual Assault, but they can not work
alone. We should all be concerned with providing victims of domestic
violence a safe place to gain the skills and stability needed to make
the transition to independence. This is an important component of
reducing and preventing crimes that take place in domestic situations,
ranging from assault and child abuse to homicide, and helping the
victims of these crimes. I urge the Senate to take prompt action on
this legislation.
______
By Mrs. FEINSTEIN (for herself, Mr. Fitzgerald, Mr. Harkin, Mr.
Lugar, Ms. Cantwell, Mr. Wyden, Mr. Corzine, Mr. Leahy, Mrs.
Boxer, Mr. Durbin, and Mr. Nelson of Nebraska):
S. 2724. A bill to provide regulatory oversight over energy trading
markets and metals trading markets, and for other purposes; to the
Committee on Agriculture, Nutrition, and Forestry.
Mrs. FEINSTEIN. Madam President, I am very pleased to introduce this
bill today along the Senator Harkin and Senator Lugar, chairman and
ranking member of the Senate Agriculture Committee. Our bill is already
co-sponsored by Senators Fitzgerald, Cantwell, Wyden, Corzine, Leahy,
Durbin, and Boxer.
The Senate Agriculture Committee held a hearing on this bill
yesterday and I understand it is the intentions of the chairman and
ranking member to try and have a bill that can be marked up before the
recess.
The bill closes the loophole that was created when Congress passed
the Commodity Futures Modernization Act in 2000 which exempted on-line
energy and metals trading from regulatory oversight.
The bill is supported by: The New York Mercantile Exchange, The
Pacific Exchange, Aquila Energy Corporation, Cambridge Energy Research
Associates, Mid-America Energy Holding Company, Pacific Gas and
Electric, Southern California Edison, Calpine, The Apache Corporation,
The American Public Gas Association, The American Public Power
Association, The Texas Independent Producers and Royalty Association,
The California Municipal Utilities Association, The Consumers Union,
The Consumer Federation of America, The Derivatives Study Center, The
National Rural Electric Cooperative Association U.S. PIRG, The
Transmission Access Policy Study Group, The Sierra Club, and all four
FERC Commissioners.
This bill could not be more timely in light of what we have learned
about the energy sector in the past couple of months and the operations
of these energy companies: 1. CMS Energy admitted that 80 percent of
its trades were round trip or wash trades and were made simply to
increase volume; 2. Reliant admitted to $6.4 billion in wash trades
from 1999-2001 which the company characterized as energy swaps; 3. Duke
confessed to $2 billion in wash trades and stated that $650 million of
these trades were executed on the Inter-Continental Exchange, ICE, and
electronic trading facility exempt from CFTC oversight because of the
Commodity Futures Modernization Act.
But electronic exchanges like ICE have no responsibility for trades
or wash trades executed on its exchange and does not even have any
responsibility for checking that a transaction has been executed. Thus,
a company that wanted to manipulate prices or game the market would not
have to even execute a single trade.
In the past year, 12 of the largest energy companies in the U.S. have
lost about $188 billion of capital, accounting for 71 percent of the
market value. The credit ratings of several of those energy companies
have been severely downgraded; some are at junk bond or near-junk bond
status.
In May, 2000, a severe energy crisis began in California. Electricity
that had typically sold for about $30 a Megawatt hour all of a sudden
started selling for 10 times that. This led to the bankruptcy of
California's largest utility and the near-bankruptcy of California's
second largest utility. It also resulted in overcharges of billions of
dollars to California ratepayers and taxpayers.
In November, California encountered a natural gas crisis. Natural gas
is the main cost component of electricity. At one point gas was selling
for $12 per decatherm in San Juan New Mexico and $59 in Southern
California when the cost to transport it was less than one dollar.
Just about the time Congress passed the Commodity Futures
Modernization Act exempting electronic energy trading exchanges from
oversight, the crisis began spreading to the other western states. For
more than six months Oregon, Washington, and the other Western States
experienced the same price spikes as California.
The entire crisis lasted for more than a year while energy companies
like Reliant, Enron, Duke, Williams, and AES enjoyed record revenues
and profits. Obviously we are all a bit wiser today about energy
markets and about wash trades in particular.
Wash trades or round trip trades involve two or more companies
plotting together to execute offsetting trades. These trades would be
illegal if they were done on NYMEX, the Chicago Merc, or the Pacific
Exchange and those exchanges would have the responsibility to report
it.
However, there is no such reporting or enforcement requirement on
electronic exchanges because as I said before, the CFMA created a big
loophole. This legislation would ensure that wash trades are subject to
full CFTC oversight no matter where they are done.
And of course there is Enron which controlled a large share of the
energy market while they engaged in activities that were downright
illegal. Many of these activities could have been prevented or at least
stopped if regulators simply had the proper authority and the will.
Let me recap what happened with the Commodity Futures Modernization
Act. In November, 1999, the SEC, the Federal Reserve, the CFTC and the
Department of Treasury produced a study titled Over the Counter
Derivative Markets and the Commodity Exchange Act, A Report of the
President's Working Group on Financial Markets.
It was signed by Federal Reserve Chairman Alan Greenspan, Secretary
of Treasury Larry Summers, SEC Chairman Arthur Levitt and CFTC Chairman
Bill Rainer.
The report said that the case had not been made that energy or other
tangible commodities should be exempted
[[Page S6657]]
form CFTC oversight. The report found that because of the immaturity of
the energy market, the lack of liquidity in the market and finite
supplies, in energy markets, energy markets were more susceptible to
manipulation than the deep and liquid financial markets.
Recent history has certainly borne that to be correct; these
commodities are more subject to manipulation!
On June 21, 2000 shortly after the President's Working Group issued
its report, the Banking Committee and Agriculture Committee held a
hearing on the Report and the Commodity Futures Modernization Act.
Let me read from that committee report:
The Commission has reservations about the bill's exclusions
of Over the Counter (OTC) derivatives from the Commodities
Exchange Act. On this point he bill diverges from the
recommendations of the President's Working Group, which
limited the proposed exclusions to financial derivatives. The
Commission believes the distinction drawn by the Working
Group between financial (non-tangible) and non-financial
transactions was a sound one and respectfully urges the
Committees to give weight to that distinction.
And the Senate Agriculture Committee marked up the Commodity Futures
Modernization Act consistent with what was in the President's Working
Group Report.
That version of the bill however, was not reflected in the final
provision that passed Congress as part of a much bigger bill at the end
of the 106th Congress.
I urge my colleagues in Congress to pass this legislation and fix
this problem as soon as possible.
____________________