[House Report 104-812]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-812
_______________________________________________________________________


 
   MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF VETERANS AFFAIRS AND 
  HOUSING AND URBAN DEVELOPMENT, AND FOR SUNDRY INDEPENDENT AGENCIES, 
  BOARDS, COMMISSIONS, CORPORATIONS, AND OFFICES FOR THE FISCAL YEAR 
           ENDING SEPTEMBER 30, 1997, AND FOR OTHER PURPOSES

                                _______
                                

               September 20, 1996. Ordered to be printed

_______________________________________________________________________


 Mr. Lewis of California, from the committee of conference, submitted 
                             the following

                           CONFERENCE REPORT

                        [To accompany H.R. 3666]

                  Conference Report (H. Rept. 104-812)

      The Committee of Conference on the disagreeing votes of 
the two Houses on the amendments of the Senate to the bill 
(H.R. 3666) ``making appropriations for the Departments of 
Veterans Affairs and Housing and Urban Development, and for 
sundry independent agencies, boards, commissions, corporations, 
and offices for the fiscal year ending September 30, 1997, and 
for other purposes,'' having met, after full and free 
conference, have agreed to recommend and do recommend to their 
respective Houses as follows:
      That the Senate recede from its amendments numbered 11, 
60, 107, and 112.
      That the House recede from its disagreement to the 
amendments of the Senate numbered 1, 2, 3, 5, 8, 12, 13, 15, 
17, 19, 21, 22, 23, 24, 25, 26, 27, 28, 30, 31, 32, 36, 37, 38, 
39, 42, 44, 45, 46, 48, 49, 50, 51, 52, 53, 54, 55, 56, 61, 62, 
63, 64, 65, 66, 69, 71, 73, 74, 75, 76, 77, 78, 79, 82, 85, 86, 
87, 88, 90, 92, 93, 94, 96, 97, 98, 99, 100, 101, 103, 104, 
106, 108, 109, 110, 114, 115, 116, and agree to the same.
      Amendment numbered 4:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 4, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$700,000,000; and the Senate agree to the same.
      Amendment numbered 6:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 6, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$61,207,000; and the Senate agree to the same.
      Amendment numbered 7:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 7, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$827,584,000; and the Senate agree to the same.
      Amendment numbered 9:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 9, and agree to the same with 
an amendment, as follows:
      In lieu of the matter stricken and inserted by said 
amendment, insert: $250,858,000, of which $32,100,000 shall be 
for the replacement hospital at Travis Air Force Base, 
Fairfield, California, and shall not be released for obligation 
prior to January 1, 1998, unless action is taken by Congress 
specifically making such funds available, and all funds 
appropriated under the above hearing are; and the Senate agree 
to the same.
      Amendment numbered 10:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 10, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$175,000,000; and the Senate agree to the same.
      Amendment numbered 14:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 14, and agree to the same with 
an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following:


            development of additional new subsidized housing


      For assistance for the purchase, construction, 
acquisition, or development of additional public and subsidized 
housing units for low income families under the United States 
Housing Act of 1937, as amended (``the Act'' herein) (42 U.S.C. 
1437), not otherwise provided for, $1,039,000,000, to remain 
available until expended: Provided, That of the total amount 
provided under this head, $645,000,000 shall be for capital 
advances, including amendments to capital advance contracts, 
for housing for the elderly, as authorized by section 202 of 
the Housing Act of 1959, as amended, and for project rental 
assistance, and amendments to contracts for project rental 
assistance, for supportive housing for the elderly under 
section 202(c)(2) of the Housing Act of 1959; and $194,000,000 
shall be for capital advances, including amendments to capital 
advance contracts, for supportive housing for persons with 
disabilities, as authorized by section 811 of the Cranston-
Gonzalez National Affordable Housing Act, and for project 
rental assistance, and amendments to contracts for project 
rental assistance, for supportive housing for persons with 
disabilities as authorized by section 811 of the Cranston-
Gonzalez National Affordable Housing Act: Provided further, 
That the Secretary may designate up to 25 percent of the 
amounts earmarked under this paragraph for section 811 of the 
Cranston-Gonzalez National Affordable Housing Act for tenant-
based assistance, as authorized under that section, including 
such authority as may be waived under the next proviso, which 
assistance is five years in duration: Provided further, That 
the Secretary may waive any provision of section 202 of the 
Housing Act of 1959 and section 811 of the National Affordable 
Housing Act (including the provisions governing the terms and 
conditions of project rental assistance and tenant-based 
assistance) that the Secretary determines is not necessary to 
achieve the objectives of these programs, or that otherwise 
impedes the ability to develop, operate or administer projects 
assisted under these programs, and may make provision for 
alternative conditions or terms where appropriate: Provided 
further, That of the total amount provided under this head 
$200,000,000 shall be for the development or acquisition cost 
of public housing for Indian families, including amounts for 
housing under the mutual help homeownership opportunity program 
under section 202 of the Act (42 U.S.C. 1437bb).


                  prevention of resident displacement


      For activities and assistance to prevent the involuntary 
displacement of low-income families, the elderly and the 
disabled because of the loss of affordable housing stock, 
expiration of subsidy contracts (other than contracts for which 
amounts are provided under the head ``Preserving Existing 
Housing Investment'') or expiration of use restrictions, or 
other changes in housing assistance arrangements, and for other 
purposes, $4,640,000,000, to remain available until expended: 
Provided, That of the total amount provided under this head, 
$3,600,000,000 shall be for assistance under the United States 
Housing Act of 1937 (42 U.S.C. 1437) for use in connection with 
expiring or terminating section 8 subsidy contracts: Provided 
further, That the Secretary may determine not to apply section 
8 (o)(6)(B) of the Act to housing vouchers during fiscal year 
1997: Provided further, That of the total amount provided under 
this head, $850,000,000 shall be for amendments to section 8 
contracts other than contracts for projects developed under 
section 202 of the Housing Act of 1959, as amended: Provided 
further, That of the total amount provided under this head, 
$190,000,000 shall be for assistance under the United States 
Housing Act of 1937 (42 U.S.C. 1437) to relocate residents of 
properties (i) that are owned by the Secretary and being 
disposed of; (ii) that are discontinuing section 8 project-
based assistance; or (iii) subject to special workout 
assistance team intervention compliance actions; for the 
conversion of section 23 projects to assistance under section 
8; for funds to carry out the family unification program; and 
for the relocation of witnesses in connection with efforts to 
combat crime in public and assisted housing pursuant to a 
request from a law enforcement or prosecution agency: Provided 
further, That of the total amount made available under this 
head, $50,000,000 shall be made available to nonelderly 
disabled families affected by the designation of a public 
housing development under Section 7 of such Act or the 
establishment of preferences in accordance with section 651 of 
the Housing and Community Development Act of 1992 (42 U.S.C. 
13611).


                 preserving existing housing investment


      For operating, maintaining, revitalizing, rehabilitating, 
preserving, and protecting existing housing developments for 
low income families, the elderly, and the disabled, 
$5,750,000,000, to remain available until expended: Provided, 
That of the total amount made available under this head, 
$2,900,000,000 shall be available for payments to public 
housing agencies and Indian housing authorities for operating 
subsidies for low-income housing projects as authorized by 
section 9 of the United States Housing Act of 1937, as amended 
(42 U.S.C. 1437g): Provided further, That of the total amount 
made available under this head, $2,500,000,000 shall be 
available for modernization of existing public housing projects 
as authorized under section 14 of the United States Housing Act 
of 1937, as amended (42 U.S.C. 14371), of which $10,000,000 
shall be for carrying out activities under section 6(j) of the 
United States Housing Act of 1937 and technical assistance for 
the inspection of public housing units, contract expertise, and 
training and technical assistance directly or indirectly, under 
grants, contracts, or cooperative agreements, to assist in the 
oversight and management of public and Indian housing (whether 
or not the housing is being modernized with assistance under 
this proviso) or tenant-based assistance, including, but not 
limited to, an annual resident survey, data collection and 
analysis, training and technical assistance by or to officials 
and employees of the department and of public housing agencies 
and to residents in connection with the public and Indian 
housing program: Provided further, That of the total amount 
provided under this head, $350,000,000 shall be available for 
use in conjunction with properties that are eligible for 
assistance under the Low Income Housing Preservation and 
Resident Homeownership Act of 1990 (LIHPRHA) or the Emergency 
Low-Income Housing Preservation Act of 1987 (ELIHPA), of which 
$75,000,000 shall be available for obligation until March 1, 
1997 for projects (1) that are subject to a repayment or 
settlement agreement that was executed between the owner and 
the Secretary prior to September 1, 1995; (2) whose submissions 
were delayed as a result of their locations in areas that were 
designated as a Federal disaster area in a Presidential 
Disaster Declaration; or (3) whose processing was, in fact or 
in practical effect, suspended, deferred, or interrupted for a 
period of twelve months or more because of differing 
interpretations, by the Secretary and an owner or by the 
Secretary and a State or local rent regulatory agency, 
concerning the timing of filing eligibility or the effect of a 
presumptively applicable State or local rent control law or 
regulation on the determination of preservation value under 
section 213 of LIHPRHA, as amended, if the owner of such 
project filed notice of intent to extend the low-income 
affordability restrictions of the housing, or transfer to a 
qualified purchaser who would extend such restrictions, on or 
before November 1, 1993; and of which, up to $100,000,000 may 
be used for rental assistance to prevent displacement of 
families residing in projects whose owners prepay their 
mortgages; and the balance of which shall be available from the 
effective date of this Act for sales to preferred priority 
purchasers: Provided further, That with the exception of 
projects described in clauses (1), (2), or (3) of the preceding 
proviso, the Secretary shall, notwithstanding any other 
provision of law, suspend further processing of preservation 
applications which have not heretofore received approval of a 
plan of action: Provided further, That $150,000,000 of amounts 
recaptured from interest reduction payment contracts for 
section 236 projects whose owners prepay their mortgages during 
fiscal year 1997 shall be rescinded: Provided further, That an 
owner of eligible low-income housing may prepay the mortgage or 
request voluntary termination of a mortgage insurance contract, 
so long as said owner agrees not to raise rents for sixty days 
after such prepayment: Provided further, That such developments 
have been determined to have preservation equity at least equal 
to the lesser of $5,000 per unit or $500,000 per project or the 
equivalent of eight times the most recently published monthly 
fair market rent for the area in which the project is located 
as the appropriate unit size for all of the units in the 
eligible project: Provided further, That the Secretary may 
modify the regulatory agreement to permit owners and priority 
purchasers to retain rental income in excess of the basic 
rental charge in projects assisted under section 236 of the 
National Housing Act, for the purpose of preserving the low and 
moderate income character of the housing: Provided further, 
That eligible low-income housing shall include properties 
meeting the requirements of this paragraph with mortgages that 
are held by the State agency as a result of a sale by the 
Secretary without insurance which immediately before the sale 
would have been eligible low-income housing under LIHPRHA: 
Provided further, That notwithstanding any other provision of 
law, subject to the availability of appropriated funds, each 
low-income family, and moderate-income family who is elderly or 
disabled or is residing in a low-vacancy area, residing in the 
housing on the date of prepayment or voluntary termination, and 
whose rent, as a result of a rent increase occurring no later 
than one year after the date of the prepayment, exceeds 30 
percent of adjusted income, shall be offered tenant-based 
assistance in accordance with section 8 or any successor 
program, under which the family shall pay no less for rent than 
it paid on such date: Provided further, That any family 
receiving tenant-based assistance under the preceding proviso 
may elect (1) to remain in the unit of the housing and if the 
rent exceeds the fair market rent or payment standard, as 
applicable, the rent shall be deemed to be the applicable 
standard, so long as the administering public housing agency 
finds that the rent is reasonable in comparison with rents 
charged for comparable unassisted housing units in the market 
or (2) to move from the housing and the rent will be subject to 
the fair market rent of the payment standard, as applicable, 
under existing program rules and procedures: Provided further, 
That the tenant-based assistance made available under the 
preceding two provisos are in lieu of benefits provided in 
subsections 223(b), (c), and (d) of the low Income Housing 
Preservation and Resident Homeownership Act of 1990: Provided 
further, That any sales shall be funded using the capital grant 
available under section 220(d)(3)(A) of LIHPRHA: Provided 
further, That any extensions shall be funded using a non-
interest-bearing capital (direct) loan by the Secretary not in 
excess of the amount of the cost of rehabilitation approved in 
the plan of action plus 65 percent of the property's 
preservation equity and under such other terms and conditions 
as the Secretary may prescribe: Provided further, That any 
capital grant shall be limited to seven times, and any capital 
loan limited to six times, the annual fair market rent for the 
project, as determined using the fair market rent for fiscal 
year 1997 for the areas in which the project is located using 
the appropriate apartment sizes and mix in the eligible 
project, except where, upon the request of a priority 
purchaser, the Secretary determines that a greater amount is 
necessary and appropriate to preserve low-income housing: 
Provided further, That section 241(f) of the National Housing 
Act is repealed and insurance under such section shall not be 
offered as an incentive under LIHPRHA and ELIHPA: Provided 
further, That up to $10,000,000 of the amount of $350,000,000 
made available by a preceding proviso in this paragraph may be 
used at the discretion of the Secretary to reimburse owners of 
eligible properties for which plans of action were submitted 
prior to the effective date of this Act, but were not executed 
for lack of available funds, with such reimbursement available 
only for documented costs directly applicable to the 
preparation of the plan of action as determined by the 
Secretary, and shall be made available on terms and conditions 
to be established by the Secretary: Provided further, That, 
notwithstanding any other provision of law, a priority 
purchaser may utilize assistance under the HOME Investment 
Partnerships Act or the Low Income Housing Tax Credit; Provided 
further, That projects with approved plans of action which 
exceed the limitations on eligibility for funding imposed by 
this Act may submit revised plans of action which conform to 
these limitations by March 1, 1997 and retain the priority for 
funding otherwise applicable from the original date of approval 
of their plan of action, subject to securing any additional 
necessary funding commitments by August 1, 1997.


          revitalization of severely distressed public housing


      For grants to public housing agencies for assisting in 
the demolition of obsolete public housing projects or portions 
thereof, the revitalization (where appropriate) of sites 
(including remaining public housing units) on which such 
projects are located, replacement housing which will avoid or 
lessen concentrations of very low-income families, and tenant-
based assistance in accordance with section 8 of the United 
States Housing Act of 1937; and for providing replacement 
housing and assisting tenants to be displaced by the 
demolition, $550,000,000, to remain available until expended, 
of which the Secretary may use up to $2,500,000 for technical 
assistance, to be provided directly or indirectly by grants, 
contracts or cooperative agreements, including training and 
cost of necessary travel for participants in such training, by 
or to officials and employees of the Department and of public 
housing agencies and to residents: Provided, That no funds 
appropriated in this title shall be used for any purpose that 
is not provided for herein, in the Housing Act of 1937, in the 
Appropriations Acts for Veterans Affairs, Housing and Urban 
Development, and Independent Agencies, for the fiscal years 
1993, 1994, and 1995, and the Omnibus Consolidated Rescissions 
and Appropriations Act of 1996: Provided further, That none of 
such funds shall be used directly or indirectly by granting 
competitive advantage in awards to settle litigation or pay 
judgments, unless expressly permitted herein: Provided further, 
That, notwithstanding any other provision of law, the funds 
made available to the Housing Authority of New Orleans under 
HOPE VI for purposes of Desire Homes, shall not be obligated or 
expended for on-site construction until an independent third 
party has determined whether the site is appropriate.


 drug elimination grants for low-income housing (including transfer of 
                                 funds)


      For grants to public and Indian housing agencies for use 
in eliminating crime in public housing projects authorized by 
42 U.S.C. 11901-11908, for grants for federally assisted low-
income housing authorized by 42 U.S.C. 11909, and for drug 
information clearinghouse services authorized by 42 U.S.C. 
11921-11925, $290,000,000, to remain available until expended, 
$10,000,000 of which shall be for grants, technical assistance, 
contracts and other assistance training, program assessment, 
and execution for or on behalf of public housing agencies and 
resident organizations (including the cost of necessary travel 
for participants in such training), $5,000,000 of which shall 
be used in connection with efforts to combat violent crime in 
public and assisted housing under the Operation Safe Home 
program administered by the Inspector General of the Department 
of Housing and Urban Development, and $5,000,000 of which shall 
be provided to the Office of Inspector General for Operation 
Safe Home: Provided further, That the term ``drug-related 
crime'', as defined in 42 U.S.C. 11905(2), shall also include 
other types of crime as determined by the Secretary: Provided 
further, That notwithstanding section 5130(c) of the Anti-Drug 
Abuse Act of 1988 (42 U.S.C. 11909(c)), the Secretary may 
determine not to use any such funds to provide public housing 
youth sports grants.
      And the Senate agree to the same.
      Amendment numbered 16:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 16, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$67,000,000; and the Senate agree to the same.
      Amendment numbered 18:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 18, and agree to the same with 
an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following:
      Of the amount provided under this heading, the Secretary 
of Housing and Urban Development may use up to $60,000,000 for 
grants to public housing agencies (including Indian housing 
authorities), nonprofit corporations, and other appropriate 
entities for a supportive services program to assist residents 
of public and assisted housing, former residents of such 
housing receiving tenant-based assistance under section 8 of 
such Act (42 U.S.C. 1437f), and other low-income families and 
individuals to become self-sufficient: Provided, That the 
program shall provide supportive services, principally for the 
benefit of public housing residents, to the elderly and the 
disabled, and to families with children where the head of 
household would benefit for the receipt of supportive services 
and in working, seeking work, or is preparing for work by 
participating in job training or educational programs: Provided 
further, That the supportive services may include congregate 
services for the elderly and disabled, service coordinators, 
and coordinated educational, training, and other supportive 
services, including academic skills training, job search 
assistance, assistance related to retaining employment, 
vocational and entrepreneurship development and support 
programs, transportation, and child care: Provided further, 
That the Secretary shall require applications to demonstrate 
firm commitments of funding or services from other sources: 
Provided further, That the Secretary shall select public and 
Indian housing agencies to receive assistance under this head 
on a competitive basis, taking into account the quality of the 
proposed program (including any innovative approaches, the 
extent of the proposed coordination of supportive services, the 
extent of commitments of funding or services from other 
sources, the extent to which the proposed program includes 
reasonably achievable, quantifiable goals for measuring 
performance under the program over a three-year period, the 
extent of success an agency has had in carrying out other 
comparable initiatives, and other appropriate criteria 
established by the Secretary): Provided further, That from the 
foregoing $60,000,000, up to $5,000,000 shall be available for 
the Tenant Opportunity Program, and up to $5,000,000 shall be 
available for the Moving to Work Demonstration for public 
housing families.
      And the Senate agree to the same.
      Amendment numbered 20:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 20, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$30,000,000; and the Senate agree to the same.
      Amendment numbered 29:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 29, and agree to the same with 
an amendment, as follows:
      In lieu of the matter stricken and inserted by said 
amendment, insert the following: $976,840,000, of which 
$15,000,000 may be used for additional retraining, relocation, 
permanent change of station, and other activities related to 
downsizing only upon submission of a detailed and specific, 
multi-year downsizing plan to the Committees on Appropriations 
of the House of Representatives and the Senate, and; and the 
Senate agree to the same.
      Amendment numbered 33:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 33, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$15,500,000; and the Senate agree to the same.
      Amendment numbered 34:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 34, and agree to the same with 
an amendment, as follows:
      In lieu of the matter stricken and inserted by said 
amendment, insert the following:
      Sec. 201. Extenders.--(a) Public Housing Funding 
Flexibility.--Section 201(a)(2) of the Departments of Veterans 
Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations Act, 1996 is amended by striking 
``1996'' and inserting ``1997''.
      (b) One-for-One Replacement of Public and Indian 
Housing.--Section 1002(d) of Public Law 104-19 is amended by 
striking ``before September 30, 1996'' and inserting ``on or 
before September 30, 1997''.
      (c) Public and Assisted Housing Rents, Income 
Adjustments, and Preferences.--(1)(A) Section 402(a) of The 
Balanced Budget Downpayment Act, I is amended--
            (i) by striking ``effective for fiscal year 1996 
        and no later than October 30, 1995'' and inserting 
        ``and subsection (f) of this section, effective for 
        fiscal year 1997'';
            (ii) in paragraphs (1), (2), and (4), by striking 
        ``not less than $25, and may require a minimum monthly 
        rent of''; and
            (iii) in paragraph (3), by striking ``not less than 
        $25 for the unit, and may require a minimum monthly 
        rent of''.
      (B) Section 230 of Public Law 104-134 is hereby repealed.
      (2) Section 402(f) of The Balanced Budget Downpayment 
Act, I is amended by striking ``fiscal year 1996'' and 
inserting ``fiscal years 1996 and 1997''.
      (d) Applicability to IHAS.--In accordance with section 
201(b)(2) of the United States Housing Act of 1937, the 
amendments made by subsections (a), (b), and (c) shall apply to 
public housing developed or operated pursuant to a contract 
between the Secretary of Housing and Urban Development and an 
Indian housing authority.
      (e) Streamlining Section 8 Tenant-Based Assistance.--
Section 203(d) of the Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agencies 
Appropriations Act, 1996 is amended by striking ``fiscal year 
1996'' and inserting ``fiscal years 1996 and 1997''.
      (f) Section 8 Fair Market Rentals and Delay in 
Reissuance.--(1) The first sentence of section 403(a) of the 
Balanced Budget Downpayment Act, I, is amended by striking 
``1996'' and inserting ``1997''.
      (2) Section 403(c) of such Act is amended--
            (A) by striking ``fiscal year 1996'' and inserting 
        ``fiscal years 1996 and 1997''; and
            (B) by inserting before the semicolon the 
        following: ``for assistance made available during 
        fiscal year 1996 and October 1, 1997 for assistance 
        made available during fiscal year 1997''.
      (g) Section 8 Rent Adjustments.--Section 8(c)(2)(A) of 
the United States Housing Act of 1937 is amended--
            (1) in the third sentence by inserting ``, fiscal 
        year 1996 prior to April 26, 1996, and fiscal year 
        1997'' after ``1995'';
            (2) in the fourth sentence, by striking ``For'' and 
        inserting ``Except for assistance under the certificate 
        program, for'';
            (3) after the fourth sentence, by inserting the 
        following new sentence: ``In the case of assistance 
        under the certificate program, 0.01 shall be subtracted 
        from the amount of the annual adjustment factor (except 
        that the factor shall not be reduced to less than 1.0), 
        and the adjusted rent shall not exceed the rent for a 
        comparable unassisted unit of similar quality, type, 
        and age in the market area.''; and
            (4) in the last sentence, by--
                    (A) striking ``sentence'' and inserting 
                ``two sentences''; and
                    (B) inserting ``, fiscal year 1996 prior to 
                April 26, 1996, and fiscal year 1997'' after 
                ``1995''.
      And the Senate agree to the same.
      Amendment numbered 35:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 35, and agree to the same with 
an amendment, as follows:
      At the end of the matter proposed by said amendment, 
insert the following: Any grant or assistance made under this 
section shall be made in accordance with section 102 of the 
Department of Housing and Urban Development Reform Act of 1989 
on a competitive basis.
      And the Senate agree to the same.
      Amendment numbered 40:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 40, and agree to the same with 
an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following:
      Sec. 210. (a) Financing Adjustment Factors.--Fifty per 
centum of the amounts of budget authority, or in lieu thereof 
50 per centum of the cash amounts associated with such budget 
authority, that are recaptured from projects described in 
section 1012(a) of the Stewart B. McKinney Homeless Assistance 
Amendments Act of 1988 (Public Law 100-628, 102 Stat. 3224, 
3268) shall be rescinded, or in the case of cash, shall be 
remitted to the Treasury, and such amounts of budget authority 
or cash recaptured and not rescinded or remitted to the 
Treasury shall be used by State housing finance agencies or 
local governments or local housing agencies with projects 
approved by the Secretary of Housing and Urban Development for 
which settlement occurred after January 1, 1992, in accordance 
with such section.
      (b) In addition to amounts otherwise provided by this 
Act, $464,442 is appropriated to the Department of Housing and 
Urban Development for payment to the Utah Housing Finance 
Agency, in lieu of amounts lost to such agency in bond 
refinancings during 1994, for its use in accordance with 
subsection (a).
      And the Senate agree to the same.
      Amendment numbered 41:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 41, and agree to the same with 
an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following:

SEC. 211. SECTION 8 CONTRACT RENEWAL AUTHORITY.

      (a) Definitions.--For purposes of this section--
            (1) the term ``expiring contract'' means a contract 
        for project-based assistance under section 8 of the 
        United States Housing Act of 1937 that expires during 
        fiscal year 1997;
            (2) the term ``family'' has the same meaning as in 
        section 3(b) of the United States Housing Act of 1937;
            (3) the term ``multifamily housing project'' means 
        a property consisting of more than 4 dwelling units 
        that is covered in whole or in part by a contract for 
        project-based assistance under section 8 of the United 
        States Housing Act of 1937;
            (4) the term ``owner'' has the same meaning as in 
        section 8(f) of the United States Housing Act of 1937;
            (5) the term ``project-based assistance'' means 
        rental assistance under section 8 of the United States 
        Housing Act of 1937 that is attached to a multifamily 
        housing project;
            (6) the term ``public agency'' means a State 
        housing finance agency, a local housing agency, or 
        other agency with a public purpose and status;
            (7) the term ``Secretary'' means the Secretary of 
        Housing and Urban Development; and
            (8) the term ``tenant-based assistance'' has the 
        same meaning as in section 8(f) of the United States 
        Housing Act of 1937.
      (b) Section 8 Contract Renewal Authority.--
            (1) In general.--Notwithstanding section 405(a) of 
        the Balanced Budget Downpayment Act, I, upon the 
        request of the owner of a multifamily housing project 
        that is covered by an expiring contract, the Secretary 
        shall use amounts made available for the renewal of 
        assistance under section 8 of the United States Housing 
        Act of 1937 to renew the expiring contract as project-
        based assistance for a period of not more than 1 year, 
        at rent levels that are equal to those under the 
        expiring contract as of the date of which the contract 
        expires, provided that those rent levels do not exceed 
        120 percent of the fair market rent for the market area 
        in which the project is located. For a FHA-insured 
        multifamily housing project with an expiring contract 
        at rent levels that exceed 120 percent of the fair 
        market rent for the market area, the Secretary shall 
        provide, at the request of the owner, section 8 
        project-based assistance, for a period of not more than 
        1 year, at rent levels that do not exceed 120 percent 
        of the fair market rent.
            (2) Exemption for state and local housing agency 
        projects.--Notwithstanding paragraph (1), upon the 
        expiration of a contract with rent levels that exceed 
        the percentage described in that paragraph, if the 
        Secretary determines that the primary financing or 
        mortgage insurance for the multifamily housing project 
        that is covered by that expiring contract was provided 
        by a public agency, the Secretary shall, at the request 
        of the owner and the public agency, renew the expiring 
        contract--
                    (A) for a period of not more than 1 year; 
                and
                    (B) at rent levels that are equal to those 
                under the expiring contract as of the date on 
                which the contract expires.
            (3) Section 202, Section 811, and Section 515 
        Projects. Notwithstanding paragraph (1), for section 
        202 projects, section 811 projects and section 515 
        projects, upon the expiration of a section 8 contract, 
        the Secretary shall, at the request of the owner, renew 
        the expiring contract--
                    (A) for a period of not more than 1 year; 
                and
                    (B) at rent levels that are equal to those 
                under the expiring contract as of the date on 
                which the contract expires.
            (4) Other contracts.--
                    (A) Participation in demonstration.--For a 
                contract covering an FHA-insured multifamily 
                housing project that expires during fiscal year 
                1997 with rent levels that exceed the 
                percentage described in paragraph (1) and after 
                notice to the tenants, the Secretary shall, at 
                the request of the owner of the project and 
                after notice to the tenants, include that 
                multifamily housing project in the 
                demonstration program under section 212 of this 
                Act. The Secretary shall ensure that a 
                multifamily housing project with an expiring 
                contract in fiscal year 1997 shall be allowed 
                to be included in the demonstration.
                    (B) Effect of material adverse actions or 
                omissions.--Notwithstanding paragraph (1) or 
                any other provision of law, the Secretary shall 
                not renew an expiring contract if the Secretary 
                determines that the owner of the multifamily 
                housing project has engaged in material adverse 
                financial or managerial actions or omissions 
                with regard to the project (or with regard to 
                other similar projects if the Secretary 
                determines that such actions or omissions 
                constitute a pattern of mismanagement that 
                would warrant suspension or debarment by the 
                Secretary).
                    (C) Transfer of property.--For properties 
                disqualified from the demonstration program 
                because of actions by an owner or purchaser in 
                accordance with subparagraph (B), the Secretary 
                shall establish procedures to facilitate the 
                voluntary sale or transfer of the property, 
                with a preference for tenant organizations and 
                tenant-endorsed community-based nonprofit and 
                public agency purchasers meeting such 
                reasonable qualifications as may be established 
                by the Secretary. The Secretary may include the 
                transfer of section 8 project-based assistance.
            (5) Tenant protections.--Any family residing in an 
        assisted unit in a multifamily housing project that is 
        covered by an expiring contract that is not renewed, 
        shall be offered tenant-based assistance before the 
        date on which the contract expires or is not renewed.

SEC. 212. FHA MULTIFAMILY DEMONSTRATION AUTHORITY.

      (a) In General.--
            (1) Repeal.--
                    (A) In general.--Section 210 of the 
                Departments of Veterans Affairs and Housing and 
                Urban Development and Independent Agencies 
                Appropriations Act, 1996 (110 Stat. 1321) is 
                repealed.
                    (B) Exception.--Notwithstanding the repeal 
                under subparagraph (A), amounts made available 
                under section 210(f) the Departments of 
                Veterans Affairs and Housing and Urban 
                Development and Independent Agencies 
                Appropriations Act, 1996 shall remain available 
                for the demonstration program under this 
                section through the end of fiscal year 1997.
            (2) Savings provisions.--Nothing in this section 
        shall be construed to affect any commitment entered 
        into before the date of enactment of this Act under the 
        demonstration program under section 210 of the 
        Departments of Veterans Affairs and Housing and Urban 
        Development and Independent Agencies Appropriations 
        Act, 1996.
            (3) Definitions.--For purposes of this section--
                    (A) the term ``demonstration program'' 
                means the program established under subsection 
                (b);
                    (B) the term ``expiring contract'' means a 
                contract for project-based assistance under 
                section 8 of the United States Housing Act of 
                1937 that expires during fiscal year 1997;
                    (C) the term ``family'' has the same 
                meaning as in section 3(b) of the United States 
                Housing Act of 1937;
                    (D) the term ``multifamily housing 
                project'' means a property consisting of more 
                than 4 dwelling units that is covered in whole 
                or in part by a contract for project-based 
                assistance;
                    (E) the term ``owner'' has the same meaning 
                as in section 8(f) of the United States Housing 
                Act of 1937;
                    (F) the term ``project-based assistance'' 
                means rental assistance under section 8 of the 
                United States Housing Act of 1937 that is 
                attached to a multifamily housing project;
                    (G) the term ``Secretary'' means the 
                Secretary of Housing and Urban Development; and
                    (H) the term ``tenant-based assistance'' 
                has the same meaning as in section 8(f) of the 
                United States Housing Act of 1937.
      (b) Demonstration Authority.--
            (1) In general.--Subject to the funding limitation 
        in subsection (l), the Secretary shall administer a 
        demonstration program with respect to multifamily 
        projects--
                    (A) whose owners agree to participate;
                    (B) with rents on units assisted under 
                section 8 of the United States Housing Act of 
                1937 that are, in the aggregate, in excess of 
                120 percent of the fair market rent of the 
                market area in which the project is located; 
                and
                    (C) the mortgages of which are insured 
                under the National Housing Act.
            (2) Purpose.--The demonstration program shall be 
        designed to obtain as much information as is feasible 
        on the economic viability and rehabilitation needs of 
        the multifamily housing projects in the demonstration, 
        to test various approaches for restructuring mortgages 
        to reduce the financial risk to the FHA Insurance Fund 
        while reducing the cost of section 8 subsidies, and to 
        test the feasibility and desirability of--
                    (A) ensuring, to the maximum extent 
                practicable, that the debt service and 
                operating expenses, including adequate 
                reserves, attributable to such multifamily 
                projects can be supported at the comparable 
                market rent with or without mortgage insurance 
                under the National Housing Act and with or 
                without additional section 8 rental subsidies;
                    (B) utilizing section 8 rental assistance, 
                while taking into account the capital needs of 
                the projects and the need for adequate rental 
                assistance to support the low- and very low-
                income families residing in such projects; and
                    (C) preserving low-income rental housing 
                affordability and availability while reducing 
                the long-term cost of section 8 rental 
                assistance.
      (c) Goals.--
            (1) In general.--The Secretary shall carry out the 
        demonstration program in a manner that will protect the 
        financial interests of the Federal Government through 
        debt restructuring and subsidy reduction and, in the 
        least costly fashion, address the goals of--
                    (A) maintaining existing affordable housing 
                stock in a decent, safe, and sanitary 
                condition;
                    (B) minimizing the involuntary displacement 
                of tenants;
                    (C) taking into account housing market 
                conditions;
                    (D) encouraging responsible ownership and 
                management of property;
                    (E) minimizing any adverse income tax 
                impact on property owners; and
                    (F) minimizing any adverse impacts on 
                residential neighborhoods and local 
                communities.
            (2) Balance of competing goals.--In determining the 
        manner in which a mortgage is to be restructured or a 
        subsidy reduced under this subsection, the Secretary 
        may balance competing goals relating to individual 
        projects in a manner that will further the purposes of 
        this section.
      (d) Participation Arrangements.--
            (1) In general.--In carrying out the demonstration 
        program, the Secretary may enter into participation 
        arrangements with designees, under which the Secretary 
        may provide for the assumption by designees (by 
        delegation, by contract, or otherwise) of some or all 
        of the functions, obligations, responsibilities and 
        benefits of the Secretary.
            (2) Designees.--In entering into any arrangement 
        under this subsection, the Secretary shall select state 
        housing finance agencies, housing agencies or 
        nonprofits (separately or in conjunction with each 
        other) to act as designees to the extent such agencies 
        are determined to be qualified by the Secretary. In 
        locations where there is no qualified state housing 
        finance agency, housing agency or nonprofit to act as a 
        designee, the Secretary may act as a designee. Each 
        participation arrangement entered into under this 
        subsection shall include a designee as the primary 
        partner. Any organization selected by the Secretary 
        under this section shall have a long-term record of 
        service in providing low-income housing and meet 
        standards of fiscal responsibility, as determined by 
        the Secretary.
            (3) Designee partnerships.--For purposes of any 
        participation arrangement under this subsection, 
        designees are encouraged to develop partnerships with 
        each other, and to contract or subcontract with other 
        entities, including--
                    (A) public housing agencies;
                    (B) financial institutions;
                    (C) mortgage servicers;
                    (D) nonprofit and for-profit housing 
                organizations;
                    (E) the Federal National Mortgage 
                Association;
                    (F) the Federal Home Loan Mortgage 
                Corporation;
                    (G) Federal Home Loan Banks; and
                    (H) other State or local mortgage insurance 
                companies or bank lending consortia.
      (e) Long-Term Affordability.--
            (1) In general.--After the renewal of a section 8 
        contract pursuant to a restructuring under this 
        section, the owner shall accept each offer to renew the 
        section 8 contract, for a period of 20 years from the 
        date of the renewal under the demonstration, if the 
        offer to renew is on terms and conditions, as agreed to 
        by Secretary or designee and the owner under a 
        restructuring.
            (2) Affordability requirements.--Except as 
        otherwise provided by the Secretary, in exchange for 
        any mortgage restructuring under this section, a 
        project shall remain affordable for a period of not 
        less than 20 years. Affordability requirements shall be 
        determined in accordance with guidelines established by 
        the Secretary or designee. The Secretary or designee 
        may waive these requirements for good cause.
      (f) Procedures.--
            (1) Notice of participation in demonstration.--Not 
        later than 45 days before the date of expiration of an 
        expiring contract (or such later date, as determined by 
        the Secretary, for good cause), the owner of the 
        multifamily housing project covered by that expiring 
        contract shall notify the Secretary or designee and the 
        residents of the owner's intent to participate in the 
        demonstration program.
            (2) Demonstration contract.--Upon receipt of a 
        notice under paragraph (1), the owner and the Secretary 
        or designee shall enter into a demonstration contract, 
        which shall provide for initial section 8 project-based 
        rents at the same rent levels as those under the 
        expiring contract or, if practical, the budget-based 
        rent to cover debt service, reasonable operating 
        expenses (including reasonable and appropriate 
        services), and a reasonable return to the owner, as 
        determined solely by the Secretary. The demonstration 
        contract shall be for the minimum term necessary for 
        the rents and mortgages of the multifamily housing 
        project to be restructured under the demonstration 
        program, but shall not be for a period of time to 
        exceed 180 days, unless extended for good cause by the 
        Secretary.
      (g) Project-Based Section 8.--The Secretary shall renew 
all expiring contracts under the demonstration as section 8 
project-based contracts, for a period of time not to exceed 1 
year, unless otherwise provided under subsection (h).
      (h) Demonstration Actions.--
            (1) Demonstration actions.--For purposes of 
        carrying out the demonstration program, and in order to 
        ensure that contract rights are not abrogated, subject 
        to such third party consents as are necessary (if any), 
        including consent by the Government National Mortgage 
        Association if it owns a mortgage insured by the 
        Secretary, consent by an issuer under the mortgage-
        backed securities program of the Association, subject 
        to the responsibilities of the issuer to its security 
        holders an the Association under such program, and 
        consent by parties to any contractual agreement which 
        the Secretary proposes to modify or discontinue, the 
        Secretary or, except with respect to subparagraph (B), 
        designee, subject to the funding limitation in 
        subsection (l), shall take not less than 1 of the 
        actions specified in subparagraphs (G), (H), and (I) 
        and may take any of the following actions:
                    (A) Removal of restrictions.--
                            (i) In general.--Consistent with 
                        the purposes of this section, subject 
                        to the agreement of the owner of the 
                        project and after consultation with the 
                        tenants of the project, the Secretary 
                        or designee may remove, relinquish, 
                        extinguish, modify, or agree to the 
                        removal of any mortgage, regulatory 
                        agreement, project-based assistance 
                        contract, use agreement, or restriction 
                        that had been imposed or required by 
                        the Secretary, including restrictions 
                        on distributions of income which the 
                        Secretary or designee determines would 
                        interfere with the ability of the 
                        project to operate without above-market 
                        rents.
                            (ii) Accumulated residual 
                        receipts.--The Secretary or designee 
                        may require an owner of a property 
                        assisted under the section 8 new 
                        construction/substantial rehabilitation 
                        program under the United States Housing 
                        Act of 1937 to apply any accumulated 
                        residual receipts toward effecting the 
                        purposes of this section.
                    (B) Reinsurance.--With respect to not more 
                than 5,000 units within the demonstration 
                during fiscal year 1997, the Secretary may 
                enter into contracts to purchase reinsurance, 
                or enter into participations or otherwise 
                transfer economic interest in contracts of 
                insurance or in the premiums paid, or due to be 
                paid, on such insurance, on such terms and 
                conditions as the Secretary may determine. Any 
                contract entered into under this paragraph 
                shall require that any associated units be 
                maintained as low-income units for the life of 
                the mortgages, unless waived by the Secretary 
                for good cause.
                    (C) Participation by third parties.--The 
                Secretary or designee may enter into such 
                agreements, provide such concessions, incur 
                such costs, make such grants (including grants 
                to cover all or a portion of the rehabilitation 
                costs for a project) and other payments, and 
                provide other valuable consideration as may 
                reasonably be necessary for owners, lenders, 
                servicers, third parties, and other entities to 
                participate in the demonstration program. The 
                Secretary may establish performance incentives 
                for designees.
                    (D) Section 8 administrative fees.--
                Notwithstanding any other provision of law, the 
                Secretary may make fees available from the 
                section 8 contract renewal appropriation to a 
                designee for contract administration under 
                section 8 of the United States Housing Act of 
                1937 for purposes of any contract restructured 
                or renewed under the demonstration program.
                    (E) Full or partial payment of claim.--
                Notwithstanding any other provision of law, the 
                Secretary may make a full payment of claim or 
                partial payment of claim prior to default.
                    (F) Credit enhancement.--
                            (i) In general.--The Secretary or 
                        designee may provide FHA multifamily 
                        mortgage insurance, reinsurance, or 
                        other credit enhancement alternatives, 
                        including retaining the existing FHA 
                        mortgage insurance on a restructured 
                        first mortgage at market value or using 
                        the multifamily risk-sharing mortgage 
                        programs, as provided under section 542 
                        of the Housing and Community 
                        Development Act of 1992. Any 
                        limitations on the number of units 
                        available for mortgage insurance under 
                        section 542 shall not apply to 
                        insurance issued for purposes of the 
                        demonstration program.
                            (ii) Maximum percentage.--During 
                        fiscal year 1997, not more than 25 
                        percent of the units in multifamily 
                        housing projects with expiring 
                        contracts in the demonstration, in the 
                        aggregate, may be restructured without 
                        FHA insurance, unless otherwise agreed 
                        to by the owner of a project.
                            (iii) Credit subsidy.--Any credit 
                        subsidy costs of providing mortgage 
                        insurance shall be paid from amounts 
                        made available under subsection (l).
                    (G) Mortgage restructuring.--
                            (i) In general.--The Secretary or 
                        designee may restructure mortgages to 
                        provide a restructured first mortgage 
                        to cover debt service and operating 
                        expenses (including a reasonable rate 
                        of return to the owner) at the market 
                        rent, and a second mortgage equal to 
                        the difference between the restructured 
                        first mortgage and the mortgage balance 
                        of the eligible multifamily housing 
                        project at the time of restructuring.
                            (ii) Credit subsidy.--Any credit 
                        subsidy costs of providing a second 
                        mortgage shall be paid from amounts 
                        made available under subsection (l).
                    (H) Debt forgiveness.--The Secretary or 
                designee, for good cause and at the request of 
                the owner of a multifamily housing project, may 
                forgive at the time of the restructuring of a 
                mortgage any portion of a debt on the project 
                that exceeds the market value of the project.
                    (I) Budget-based rents.--The Secretary or 
                designee may renew an expiring contract, 
                including a contract for a project in which 
                operating costs exceed comparable market rents, 
                for a period of not more than 1 year, at a 
                budget-based rent that covers debt service, 
                reasonable operating expenses (including all 
                reasonable and appropriate services), and a 
                reasonable rate of return to the owner, as 
                determined solely by the Secretary, provided 
                that the contract does not exceed the rent 
                levels under the expiring contract. The 
                Secretary may establish a preference under the 
                demonstration program for budget-based rents 
                for unique housing projects, such as projects 
                designated for occupancy by elderly families 
                and projects in rural areas.
                    (J) Section 8 tenant-based assistance.--For 
                not more than 10 percent of units in 
                multifamily housing projects that have had 
                their mortgages restructured in any fiscal year 
                under the demonstration, the Secretary or 
                designee may provide, with the agreement of an 
                owner and in consultation with the tenants of 
                the housing, section 8 tenant-based assistance 
                for some or all of the assisted units in a 
                multifamily housing project in lieu of section 
                8 project-based assistance. Section 8 tenant-
                based assistance may only be provided where the 
                Secretary determines and certifies that there 
                is adequate available and affordable housing 
                within the local area and that tenants will be 
                able to use the section 8 tenant-based 
                assistance successfully.
            (2) Offer and acceptance.--Notwithstanding any 
        other provision of law, an owner of a project in the 
        demonstration must accept any reasonable offer made by 
        the Secretary or a designee under this subsection. An 
        owner may appeal the reasonableness of any offer to the 
        Secretary and the Secretary shall respond within 30 
        days of the date of appeal with a final offer. If the 
        final offer is not acceptable, the owner may opt out of 
        the program.
      (i) Community and Tenant Input.--In carrying out this 
section, the Secretary shall develop procedures to provide 
appropriate and timely notice, including an opportunity for 
comment and timely access to all relevant information, to 
officials of the unit of general local government affected, the 
community in which the project is situated, and the tenants of 
the project.
      (j) Transfer of Property.--The Secretary shall establish 
procedures to facilitate the voluntary sale or transfer of 
multifamily housing projects under the demonstration to tenant 
organizations and tenant-endorsed community-based nonprofit and 
public agency purchasers meeting such reasonable qualifications 
as may be established by the Secretary.
      (k) Limitation on Demonstration Authority.--The Secretary 
shall carry out the demonstration program with respect to 
mortgages not to exceed 50,000 units.
      (l) Funding.--In addition to the $30,000,000 made 
available under section 210 of the Departments of Veterans 
Affairs and Housing and Urban Development and Independent 
Agencies Appropriations Act, 1996 (110 Stat. 1321), for the 
costs (including any credit subsidy costs associated with 
providing direct loans or mortgage insurance) of modifying and 
restructuring loans held or guaranteed by the Federal Housing 
Administration, as authorized under this section, $10,000,000 
is hereby appropriated, to remain available until September 30, 
1998.
      (m) Report to Congress.--
            (1) In general.--
                    (A) Quarterly reports.--Not less than every 
                3 months, the Secretary shall submit to the 
                Congress a report describing and assessing the 
                status of the projects in the demonstration 
                program.
                    (B) Final report.--Not later than 6 months 
                after the end of the demonstration program, the 
                Secretary shall submit to the Congress a final 
                report on the demonstration program.
            (2) Contents.--Each report submitted under 
        paragraph (1)(A) shall include a description of--
                    (A) each restructuring proposal submitted 
                by an owner of a multifamily housing project, 
                including a description of the physical, 
                financial, tenancy, and market characteristics 
                of the project;
                    (B) the Secretary's evaluation and reasons 
                for each multifamily housing project selected 
                or rejected for participation in the 
                demonstration program;
                    (C) the costs to the FHA General Insurance 
                and Special Risk Insurance funds;
                    (D) the subsidy costs provided before and 
                after restructuring;
                    (E) the actions undertaken in the 
                demonstration program, including the third 
                party arrangements made; and
                    (F) the demonstration program's impact on 
                the owners of the projects, including any tax 
                consequences.
            (3) Contents of final report.--The report submitted 
        under paragraph (1)(B) shall include--
                    (A) the required contents under paragraph 
                (2); and
                    (B) any findings and recommendations for 
                legislative action.
      And the Senate agree to the same.
      Amendment numbered 43:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 43, and agree to the same with 
an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following:

SEC. 214. USES OF CERTAIN ASSISTED HOUSING AMOUNTS.

      (a) Transfer Authority.--The Secretary may transfer 
recaptured section 8 amounts from the Annual Contributions for 
Assisted Housing account under Public Law 104-134 (approved 
April 26, 1996; 110 Stat. 1321, 1321-265) and prior laws to the 
accounts and for the purposes set forth in subsection (b). The 
amounts transferred under this section shall be made available 
for use as prescribed under this section notwithstanding 
section 8(bb) of the United States Housing Act of 1937.
      (b) Receiving Accounts.--
            (1) Prevention of resident displacement.--The 
        Secretary may transfer to the Prevention of Resident 
        Displacement account an amount up to $50,000,000, in 
        addition to amounts in such account, that may be used 
        to renew, under existing terms and conditions, existing 
        project-based section 8 contracts in effect before a 
        Plan of Action was approved, so that these contracts 
        expire 5 years from the date on which funds were 
        obligated for the Plan of Action approved under the Low 
        Income Housing Preservation and Resident Homeownership 
        Act of 1990 or the Emergency Low-Income Housing 
        Preservation Act of 1987. The Secretary shall transfer 
        all amounts that the Secretary determines to be 
        necessary for fiscal year 1997 for the purposes of this 
        paragraph before transferring any amounts under any 
        other paragraph in this subsection.
            (2) HOPWA.--The Secretary may transfer to the 
        Housing Opportunities For Persons With AIDS account up 
        to $25,000,000, for use in addition to amounts 
        appropriated in such account.
      And the Senate agree to the same.
      Amendment numbered 47:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 47, and agree to the same with 
an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following:

SEC. 218. ACCOUNT TRANSITION.

      The amounts of obligated balances in appropriations 
accounts, as set forth in title II of the Departments of 
Veterans Affairs and Housing and Urban Development, and 
Independent Agencies Appropriations Act, 1996 and prior Acts 
that are recaptured hereafter, to the extent not governed by 
the specific language in an account or provision in this Act, 
shall be held in reserve subject to reprogramming, 
notwithstanding any other provision of law.

SEC. 219. TREATMENT OF CERTAIN PROPERTIES.

      Notwithstanding any other provision of law, 
rehabilitation activities undertaken in projects using the Low-
Income Housing Tax Credit allocated to developments in the City 
of New Brunswick, New Jersey, in 1991, are deemed to have met 
the requirements for rehabilitation in accordance with clause 
(ii) of the third sentence of section 8(d)(2)(A) of the United 
States Housing Act of 1937, as in effect before the date of the 
enactment of this Act.

SEC. 220. AMENDMENT RELATING TO COMMUNITY DEVELOPMENT ASSISTANCE.

      Section 105(a) of the Housing and Community Development 
Act of 1974 (42 U.S.C. 5305(a)(8)) is amended by striking 
``through 1997'' and inserting ``through 1998''.

SEC. 221. SECTION 236 PROGRAM AMENDMENTS.

      (a) Section 236(f)(1) of the National Housing Act (12 
U.S.C. 1715z-1), as amended by section 405(d)(1) of The 
Balanced Budget Downpayment Act, I, and by section 228(a) of 
The Balanced Budget Downpayment Act, II, is amended--
            (1) in the second sentence, by striking ``the lower 
        of (i)'';
            (2) in the second sentence, by striking ``or (ii) 
        the fair market rental established under section 8(c) 
        of the United States Housing Act of 1937 for the market 
        area in which the housing is located, or (iii) the 
        actual rent (as determined by the Secretary) paid for a 
        comparable unit in comparable unassisted housing in the 
        market area in which the housing assisted under this 
        section is located, ''; and
            (3) by inserting after the second sentence the 
        following:
                    ``However, in the case of a project which 
                contains more than 5,000 units, is subject to 
                an interest reduction payments contract, and is 
                financed under a State or local program, the 
                Secretary may reduce the rental charge ceiling, 
                but in no case shall the rent be below basic 
                rent. For plans of action approved for Capital 
                Grants under the Low-Income Housing 
                Preservation and Resident Homeownership Act of 
                1990 (LIHPRHA) or the Emergency Low Income 
                Housing Preservation Act of 1987 (ELIHPA), the 
                rental charge for each dwelling unit shall be 
                at the basic rental charge or such greater 
                amount, not exceeding the lower of (i) the fair 
                market rental charge determined pursuant to 
                this paragraph, or (ii) the actual rent paid 
                for a comparable unit in comparable unassisted 
                housing in the market area in which the housing 
                assisted under this section is located, as 
                represents 30 percent of the tenant's adjusted 
                income, but in no case shall the rent be below 
                basic rent.''.
      (b) Section 236(b) of the National Housing Act is amended 
by adding the following new paragraph at the end:
            ``(7) The Secretary shall determine whether and 
        under what conditions the provisions of this subsection 
        shall apply to mortgages sold by the Secretary on a 
        negotiated basis.''.
      (c) Section 236(g) of the National Housing Act is amended 
to read as follows:
            ``(g) The project owner shall, as required by the 
        Secretary, accumulate, safeguard, and periodically pay 
        the Secretary or such other entity as determined by the 
        Secretary and upon such terms and conditions as the 
        Secretary deems appropriate, all rental charges 
        collected on a unit-by-unit basis in excess of the 
        basic rental charges. Unless otherwise directed by the 
        Secretary, such excess charges shall be credited to a 
        reserve fund to be used by the Secretary to make 
        additional assistance payments as provided in paragraph 
        (3) of subsection (f). However, a project owner with a 
        mortgage insured under this section may retain some or 
        all of such excess charges for project use if 
        authorized by the Secretary and upon such terms and 
        conditions as established by the Secretary.''.
      And, the matter under the heading ``Fair housing and 
equal opportunity, fair housing activities'', on page 35, line 
22, through page 36, line 5 of the House engrossed bill is 
amended to read as follows: For contracts, grants, and other 
assistance, not otherwise provided for, as authorized by title 
VIII of the Civil Rights Act of 1968, as amended by the Fair 
Housing Amendments Act of 1988, and section 561 of the Housing 
and Community Development Act of 1987, as amended, $30,000,000, 
to remain available until September 30, 1998, of which 
$15,000,000 shall be to carry out activities pursuant to 
section 561. No funds made available under this heading shall 
be used to lobby the executive or legislative branches of the 
Federal Government in connection with a specific contract, 
grant or loan.
      And the Senate agree to the same.
      Amendment numbered 57:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 57, and agree to the same with 
an amendment, as follows:
      In lieu of the matter stricken and inserted by said 
amendment, insert: $542,000,000; and the Senate agree to the 
same.
      Amendment numbered 58:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 58, and agree to the same with 
an amendment, as follows:
      In lieu of the matter stricken and inserted by said 
amendment, insert: $1,710,000,000; and the Senate agree to the 
same.
      Amendment numbered 59:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 59, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$87,220,000; and the Senate agree to the same.
      Amendment numbered 67:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 67, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$2,875,207,000; and the Senate agree to the same.
      Amendment numbered 68:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 68, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$1,900,000,000; and the Senate agree to the same.
      Amendment numbered 70:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 70, and agree to the same with 
an amendment, as follows:
      Restore the matter stricken by said amendment, amended to 
read as follows: $136,000,000 for making grants for the 
construction of wastewater and water treatment facilities and 
the development of groundwater in accordance with the terms and 
conditions specified for such grants in the conference report 
and joint explanatory statement of the committee of conference 
accompanying this Act (H.R. 3666); ; and the Senate agree to 
the same.
      Amendment numbered 72:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 72, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$1,900,000,000; and the Senate agree to the same.
      Amendment numbered 80:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 80, and agree to the same with 
an amendment, as follows:
      In lieu of the matter proposed by said amendment, 
insert: 
: Provided, That notwithstanding any other provision of this 
paragraph, amounts appropriated herein shall be available for 
obligation on October 1, 1996: Provided further, That the 
Director of the Federal Emergency Management Agency (FEMA) 
shall submit to the appropriate committees of Congress within 
120 days of enactment of this Act a comprehensive report on 
FEMA's plans to reduce disaster relief expenditures and improve 
management controls on the Disaster Relief Fund; and the Senate 
agree to the same.
      Amendment numbered 81:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 81, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$167,500,000; and the Senate agree to the same.
      Amendment numbered 83:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 83, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$206,701,000; and the Senate agree to the same.
      Amendment numbered 84:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 84, and agree to the same with 
an amendment, as follows:
      In lieu of the matter proposed by said amendment, insert: 
The first sentence of section 1376(c) of the National Flood 
Insurance Act of 1968, as amended (42 U.S.C. 4127(c)), is 
amended by striking all after ``this subsection'' and inserting 
``such sums as may be necessary through September 30, 1997 for 
studies under this title.''.
      And the Senate agree to the same.
      Amendment numbered 89:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 89, and agree to the same with 
an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following: Upon the determination by the Administrator that 
such action is necessary, the Administrator may, with the 
approval of the Office of Management and Budget, transfer not 
to exceed $177,000,000 of funds made available in this Act to 
the National Aeronautics and Space Administration for the 
International Space Station between ``Science, aeronautics and 
technology'' and ``Human space flight'', to be merged with and 
to be available for the same purposes, and for the same time 
period, as the appropriation to which transferred: Provided, 
That such authority to transfer may not be used unless for 
higher priority items than those for which originally 
appropriated: Provided further, That the Administrator of the 
National Aeronautics and Space Administration shall notify the 
Congress promptly of all transfers made pursuant to this 
authority.
      And the Senate agree to the same.
      Amendment numbered 91:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 91, and agree to the same with 
an amendment, as follows:
      In lieu of the sum proposed by said amendment, insert: 
$619,000,000; and the Senate agree to the same.
      Amendment numbered 95:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 95, and agree to the same with 
an amendment, as follows:
      In lieu of the matter proposed by said amendment, insert:
      Sec. 421. (a) The purpose of this section is to provide 
for the special needs of certain children of Vietnam veterans 
who were born with the birth defect spina bifida, possibly as 
the result of the exposure of one or both parents to herbicides 
during active service in the Republic of Vietnam during the 
Vietnam era, through the provision of health care and monetary 
benefits.
      (b)(1) Part II of title 38, United States Code, is 
amended by inserting after chapter 17 the following new 
chapter:

 ``CHAPTER 18--BENEFITS FOR CHILDREN OF VIETNAM VETERANS WHO ARE BORN 
                           WITH SPINA BIFIDA

``Sec.
``1801. Definitions.
``1802. Spina bifida conditions covered.
``1803. Health care.
``1804. Vocational training and rehabilitation.
``1805. Monetary allowance.
``1806. Effective date of awards.

``Sec. 1801. Definitions

      ``For the purposes of this chapter--
            ``(1) The term `child', with respect to a Vietnam 
        veteran, means a natural child of the Vietnam veteran, 
        regardless of age or marital status, who was conceived 
        after the date on which the veteran first entered the 
        Republic of Vietnam during the Vietnam era.
            ``(2) The term `Vietnam veteran' means a veteran 
        who performed active military, naval, or air service in 
        the Republic of Vietnam during the Vietnam era.

``Sec. 1802. Spina bifida conditions covered

      ``This chapter applies with respect to all forms and 
manifestations of spina bifida except spina bifida occulta.

``Sec. 1803. Health care

      ``(a) In accordance with regulations which the Secretary 
shall prescribe, the Secretary shall provide a child of a 
Vietnam veteran who is suffering from spina bifida with such 
health care as the Secretary determines is needed by the child 
for the spina bifida or any disability that is associated with 
such condition.
      ``(b) The Secretary may provide health care under this 
section directly or by contract or other arrangement with any 
health care provider.
      ``(c) For the purposes of this section--
            ``(1) The term `health care'--
                  ``(A) means home care, hospital care, nursing 
                home care, outpatient care, preventive care, 
                habilitative and rehabilitative care, case 
                management, and respite care; and
                  ``(B) includes--
                            ``(i) the training of appropriate 
                        members of a child's family or 
                        household in the care of the child; and
                            ``(ii) the provisions of such 
                        pharmaceuticals, supplies, equipment, 
                        devices, appliances, assistive 
                        technology, direct transportation costs 
                        to and from approved sources of health 
                        care, and other materials as the 
                        Secretary determines necessary.
            ``(2) The term `health care provider' includes 
        specialized spina bifida clinics, health care plans, 
        insurers, organizations, institutions, and any other 
        entity or individual who furnishes health care that the 
        Secretary determines authorized under this section.
            ``(3) The term `home care' means outpatient care, 
        habilitative and rehabilitative care, preventive health 
        services, and health-related services furnished to an 
        individual in the individual's home or other place of 
        residence.
            ``(4) The term `hospital care' means care and 
        treatment for a disability furnished to an individual 
        who has been admitted to a hospital as a patient.
            ``(5) The term `nursing home care' means care and 
        treatment for a disability furnished to an individual 
        who has been admitted to a nursing home as a resident.
            ``(6) The term `outpatient care' means care and 
        treatment of a disability, and preventive health 
        services, furnished to an individual other than 
        hospital care or nursing home care.
            ``(7) The term `preventive care' means care and 
        treatment furnished to prevent disability or illness, 
        including periodic examinations, immunizations, patient 
        health education, and such other services as the 
        Secretary determines necessary to provide effective and 
        economical preventive health care.
            ``(8) The term `habilitative and rehabilitative 
        care' means such professional, counseling, and guidance 
        services and treatment programs (other than vocational 
        training under section 1804 of this title) as are 
        necessary to develop, maintain, or restore, to the 
        maximum extent practicable, the functioning of a 
        disabled person.
            ``(9) The term `respite care' means care furnished 
        on an intermittent basis for a limited period to an 
        individual who resides primarily in a private residence 
        when such care will help the individual to continue 
        residing in such private residence.

``Sec. 1804. Vocational training and rehabilitation

      ``(a) Pursuant to such regulations as the Secretary may 
prescribe, the Secretary may provide vocational training under 
this section to a child of a Vietnam veteran who is suffering 
from spina bifida if the Secretary determines that the 
achievement of a vocational goal by such child is reasonably 
feasible.
      ``(b) Any program of vocational training for a child 
under this section shall be designed in consultation with the 
child in order to meet the child's individual needs and shall 
be set forth in an individualized written plan of vocational 
rehabilitation.
      ``(c)(1) A vocational training program for a child under 
this section--
            ``(A) shall consist of such vocationally oriented 
        services and assistance, including such placement and 
        post-placement services and personal and work 
        adjustment training, as the Secretary determines are 
        necessary to enable the child to prepare for and 
        participate in vocational training or employment; and
            ``(B) may include a program of education at an 
        institution of higher education if the Secretary 
        determines that the program of education is 
        predominantly vocational in content.
      ``(2) A vocational training program under this subsection 
may not include the provision of any loan or subsistence 
allowance or any automobile adaptive equipment.
      ``(d)(1) Except as provided in paragraph (2) and subject 
to subsection (e)(2), a vocational training program under this 
section may not exceed 24 months.
      ``(2) The Secretary may grant an extension of a 
vocational training program for a child under this section for 
up to 24 additional months if the Secretary determines that the 
extension is necessary in order for the child to achieve a 
vocational goal identified (before the end of the first 24 
months of such program) in the written plan of vocational 
rehabilitation formulated for the child pursuant to subsection 
(b).
      ``(e)(1) A child who is pursuing a program of vocational 
training under this section and is also eligible for assistance 
under a program under chapter 35 of this title may not receive 
assistance under both such programs concurrently. The child 
shall elect (in such form and manner as the Secretary may 
prescribe) the program under which the child is to receive 
assistance.
      ``(2) The aggregate period for which a child may receive 
assistance under this section and chapter 35 of this title may 
not exceed 48 months (or the part-time equivalent thereof).

``Sec. 1805. Monetary allowance

      ``(a) The Secretary shall pay a monthly allowance under 
this chapter to any child of a Vietnam veteran for any 
disability resulting from spina bifida suffered by such child.
      ``(b)(1) The amount of the allowance paid to a child 
under this section shall be based on the degree of disability 
suffered by the child, as determined in accordance with such 
schedule for rating disabilities resulting from spina bifida as 
the Secretary may prescribe.
      ``(2) The Secretary shall, in prescribing the rating 
schedule for the purposes of this section, establish three 
levels of disability upon which the amount of the allowance 
provided by this section shall be based.
      ``(3) The amounts of the allowance shall be $200 per 
month for the lowest level of disability prescribed, $700 per 
month for the intermediate level of disability prescribed, and 
$1,200 per month for the highest level of disability 
prescribed. Such amounts are subject to adjustment under 
section 5312 of this title.
      ``(c) Notwithstanding any other provision of law, receipt 
by a child of an allowance under this section shall not impair, 
infringe, or otherwise affect the right of the child to receive 
any other benefit to which the child may otherwise be entitled 
under any law administered by the Secretary, nor shall receipt 
of such an allowance impair, infringe, or otherwise affect the 
right of any individual to receive any benefit to which the 
individual is entitled under any law administered by the 
Secretary that is based on the child's relationship to the 
individual.
      ``(d) Notwithstanding any other provision of law, the 
allowance paid to a child under this section shall not be 
considered income or resources in determining eligibility for 
or the amount of benefits under any Federal or federally 
assisted program.

``Sec. 1806. Effective date of awards

      ``The effective date for an award of benefits under this 
chapter shall be fixed in accordance with the facts found, but 
shall not be earlier than the date of receipt of application 
for the benefits.''.
      (2) The tables of chapters before part I and at the 
beginning of part II of such title are each amended by 
inserting after the item referring to chapter 17 the following 
new item:

``18. Benefits for Children of Vietnam Veterans Who Are Born 
    With Spina Bifida.........................................   1801''.

      (c) Section 5312 of title 38, United States Code, is 
amended--
            (1) in subsection (a)--
                    (A) by striking out ``and the rate of 
                increased pension'' and inserting in lieu 
                thereof ``, the rate of increased pension''; 
                and
                    (B) by inserting after ``on account of 
                children,'' the following: ``and each rate of 
                monthly allowance paid under section 1805 of 
                this title,''; and
            (2) in subsection (c)(1), by striking out ``and 
        1542'' and inserting in lieu thereof ``1542, and 
        1805''.
      (d) This section and the amendments made by this section 
shall take effect on January 1, 1997.
      Sec. 422. (a) Section 1151 of title 38, United States 
Code, is amended--
            (1) by striking out the first sentence and 
        inserting in lieu thereof the following:
      ``(a) Compensation under this chapter and dependency and 
indemnity compensation under chapter 13 of this title shall be 
awarded for a qualifying additional disability or a qualifying 
death of a veteran in the same manner as if such additional 
disability or death were service-connected. For purposes of 
this section, a disability or death is a qualifying additional 
disability or qualifying death if the disability or death was 
not the result of the veteran's willful misconduct and--
            ``(1) the disability or death was caused by 
        hospital care, medical or surgical treatment, or 
        examination furnished the veteran under any law 
        administered by the Secretary, either by a Department 
        employee or in a Department facility as defined in 
        section 1701(3)(A) of this title, and the proximate 
        cause of the disability or death was--
                    ``(A) carelessness, negligence, lack of 
                proper skill, error in judgment, or similar 
                instance of fault on the part of the Department 
                in furnishing the hospital care, medical or 
                surgical treatment, or examination; or
                    ``(B) an event not reasonably foreseeable; 
                or
        ``(2) the disability or death was proximately caused by 
        the provision of training and rehabilitation services 
        by the Secretary (including by a service-provider used 
        by the Secretary for such purpose under section 3115 of 
        this title) as part of an approved rehabilitation 
        program under chapter 31 of this title.''; and
            (2) in the second sentence--
                    (A) by redesignating that sentence as 
                subsection (b);
                    (B) by striking out ``, aggravation,'' both 
                places it appears; and
                    (C) by striking out ``sentence'' and 
                substituting in lieu thereof ``subsection''.
      (b)(1) The amendments made by subsection (a) shall take 
effect on October 1, 1996.
      (2) Section 1151 of title 38, United States Code (as 
amended by subsection (a)), shall govern all administrative and 
judicial determinations of eligibility for benefits under such 
section that are made with respect to claims filed on or after 
the effective date set forth in paragraph (1), including those 
based on original applications and applications seeking to 
reopen, revise, reconsider, or otherwise readjudicate on any 
basis claims for benefits under such section 1151 or any 
provision of law that is a predecessor of such section.
      (c) Notwithstanding subsection (b)(1), section 421(d), or 
any other provision of this Act, section 421 and this section 
shall not take effect until October 1, 1997, unless legislation 
other than this Act is enacted to provide for a earlier 
effective date.
      And the Senate agree to the same.
      Amendment numbered 102:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 102, and agree to the same 
with an amendment, as follows:
      Restore the matter stricken by said amendment, amended to 
read as follows:
      Sec. 427. The amount provided in title I for ``Veterans 
Health Administration--Medical Care'' is hereby increased by 
$5,000,000.
      And the Senate agree to the same.
      Amendment numbered 105:
      That the House recede from its disagreement to the 
amendment of the Senate number 105, and agree to the same with 
an amendment, as follows:
      In lieu of the matter stricken and inserted by said 
amendment, insert the following:
      Sec. 432. Calculation of Downpayment.--Section 203(b) of 
the National Housing Act (12 U.S.C. 1709(b)) is amended by 
adding at the end thereof the following new paragraph:
      ``(10) Alaska and Hawaii.--
            ``(A) In general.--Notwithstanding any other 
        provision of this subsection, with respect to a 
        mortgage originated in the State of Alaska or the State 
        of Hawaii and endorsed for insurance in fiscal year 
        1997, involve a principal obligation not in excess of 
        the sum of--
                    ``(i) the amount of the mortgage insurance 
                premium paid at the time the mortgage is 
                insured; and
                    ``(ii)(I) in the case of a mortgage for a 
                property with an appraised value equal to or 
                less than $50,000, 98.75 percent of the 
                appraised value of the property;
                    ``(II) in the case of a mortgage for a 
                property with an appraised value in excess of 
                $50,000 but not in excess of $125,000, 97.65 
                percent of the appraised value of the property.
                    ``(III) in the case of a mortgage for a 
                property with an appraised value in excess of 
                $125,000, 97.15 percent of the appraised value 
                of the property; or
                    ``(IV) notwithstanding subclauses (II) and 
                (III), in the case of a mortgage for a property 
                with an appraised value in excess of $50,000 
                that is located in an area of the State for 
                which the average closing cost exceeds 2.10 
                percent of the average, for the State, of the 
                sale price of properties located in the State 
                for which mortgages have been executed, 97.75 
                percent of the appraised value of the property.
            ``(B) Average closing cost.--For purposes of this 
        paragraph, the term `average closing cost' means, with 
        respect to a State, the average, for mortgages executed 
        for properties that are located within the State, of 
        the total amounts (as determined by the Secretary) of 
        initial service charges, appraisal, inspection, and 
        other fees (as the Secretary shall approve) that are 
        paid in connection with such mortgages.''.
      Sec. 433. Delegation of Single Family Mortgage Insuring 
Authority to Direct Endorsement Mortgagees.--Title II of the 
National Housing Act (12 U.S.C. 1707 et seq.) is amended by 
adding at the end the following new section:


  ``delegation of insuring authority to direct endorsement mortgagees


      ``Sec. 256.(a) Authority.--The Secretary may delegate, to 
one or more mortgagees approved by the Secretary under the 
direct endorsement program, the authority of the Secretary 
under this Act to insure mortgages involving property upon 
which there is located a dwelling designed principally for 
occupancy by 1 to 4 families.
      ``(b) Considerations.--In determining whether to delegate 
authority to a mortgagee under this section, the Secretary 
shall consider the experience and performance of the mortgagee 
compared to the default rate of all insured mortgages in 
comparable markets, and such other factors as the Secretary 
determines appropriate to minimize risk of loss to the 
insurance funds under this Act.
      ``(c) Enforcement of Insurance Requirements.--
            ``(1) In general.--If the Secretary determines that 
        a mortgage insured by a mortgagee pursuant to 
        delegation of authority under this section was not 
        originated in accordance with the requirements 
        established by the Secretary, and the Secretary pays an 
        insurance claim with respect to the mortgage within a 
        reasonable period specified by the Secretary, the 
        Secretary may require the mortgagees approved under 
        this section to indemnify the Secretary for the loss.
            ``(2) Fraud or misrepresentation.--If fraud or 
        misrepresentation was involved in connection with the 
        origination, the Secretary may require the mortgagees 
        approved under this section to indemnify the Secretary 
        for the loss regardless of when an insurance claim is 
        paid.
      ``(d) Termination of Mortgagee's Authority.--If a 
mortgagee to which the Secretary has made a delegation under 
this section violates the requirements and procedures 
established by the Secretary or the Secretary determines that 
other good cause exists, the Secretary may cancel a delegation 
of authority under this section to the mortgagee by giving 
notice to the mortgagee. Such a cancellation shall be effective 
upon receipt of the notice by the mortgagee or at a later date 
specified by the Secretary. A decision by the Secretary to 
cancel a delegation shall be final and conclusive and shall not 
be subject to judicial review.
      ``(e) Requirements and Procedures.--Before approving a 
delegation under this section, the Secretary shall issue 
regulations establishing appropriate requirements and 
procedures, including requirements and procedures governing the 
indemnification of the Secretary by the Mortgagee.''.
      And the Senate agree to the same.
      Amendment numbered 111:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 111, and agree to the same 
with an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following:
      Sec. 438. None of the funds appropriated or otherwise 
made available to the National Aeronautics and Space 
Administration by this Act, or any other Act enacted before the 
date of enactment of this Act, may be used by the Administrator 
of the National Aeronautics and Space Administration to 
relocate aircraft of the National Aeronautics and Space 
Administration based east of the Mississippi River to the 
Dryden Flight Research Center in California for the purpose of 
the consolidation of such aircraft.
      And the Senate agree to the same.
      Amendment numbered 113:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 113, and agree to the same 
with an amendment, as follows:
      In lieu of the matter inserted by said amendment, insert 
the following:
      Sec. 439. To promote and support management 
reorganization of the National Aeronautics and Space 
Administration.


                       subsection a. short title


      This section may be cited as the ``National Aeronautics 
and Space Administration Federal Employment Reduction 
Assistance Act of 1996.''


                       subsection b. definitions


      (1) For the purposes of this section--
            (a) the term ``Administrator'' means the 
        Administrator of the National Aeronautics and Space 
        Administration; and
            (b) the term ``employee'' means an employee of the 
        National Aeronautics and Space Administration serving 
        under an appointment without time limitation, who has 
        been currently employed with NASA for a continuous 
        period of at least 12 months, except that such term 
        does not include--
                    (1) a reemployed annuitant under subchapter 
                III of chapter 83 or chapter 84 of title 5, 
                United States Code, or another retirement 
                system for employees of the Government;
            (2) an employee who is in receipt of a specific 
        notice of involuntary separation for misconduct or 
        unacceptable performance;
      (3) an employee who, upon completing an additional period 
of service as referred to in section 3(b)(2)(B)(ii) of the 
Federal Workforce Restructuring Act of 1994 (Public Law 103-
226; 108 Stat. 111), would qualify for a voluntary separation 
incentive payment under section 3 of such Act; or
      (4) an employee who has previously received any voluntary 
separation incentive payment by the Federal Government under 
this Act or any other authority and has not repaid such 
payment.


                subsection c. incentive payment program


      In order to avoid or minimize the need for involuntary 
separations due to a reduction in force, installation closure, 
reorganization, transfer of function, or other similar action 
affecting the National Aeronautics and Space Administration, 
the Administrator shall establish a program under which 
separation pay, subject to the availability of appropriated 
funds, may be offered to encourage eligible employees to 
separate from service voluntarily (whether by retirement or 
resignation).


                    subsection d. incentive payments


      In order to receive a voluntary separation incentive 
payment, an employee must separate voluntarily (whether by 
retirement or resignation) during the period of time for which 
the payment of incentives has been authorized for the employee 
under the agency plan. Such separation payments--
      (1) shall be paid in a lump sum after the employee's 
separation, and
      (2) shall be equal to the lesser of--
            (A) an amount equal to the amount the employee 
        would be entitled to receive under section 5595(c) of 
        title 5, United States Code, if the employee were 
        entitled to payment under such section; or
            (B) an amount that shall not exceed $25,000
      (3) shall not be a basis for payment, and shall not be 
included in the computation, of any other type of Government 
benefit;
      (4) shall not be taken into account for purposes of 
determining the amount of any severance pay to which an 
individual may be entitled under section 5595 of title 5, 
United States Code, based on any other separation;
      (5) shall be considered payment for a voluntary 
separation; and
      (6) shall be paid from the appropriations or funds 
available for payment of the basic pay of the employee.


   subsection e. effect of subsequent employment with the government


      (1) An individual who has received a voluntary separation 
incentive payment under this section and accepts any employment 
with the Government of the United States within five years 
after the date of the separation on which the payment is based 
shall be required to repay, prior to the individual's first day 
of employment, the entire amount of the incentive payment to 
NASA.
      (2) If the employment under paragraph (1) above is with 
an Executive agency (as defined by section 105 of title 5, 
United States Code), the United States Postal Service, or the 
Postal Rate Commission, the Director of the Office of Personnel 
Management may, at the request of the head of the agency, waive 
the repayment if the individual involved possesses unique 
abilities and is the only qualified applicant available for the 
position.
      (3) If the employment under paragraph (1) above is with 
an entity in the legislative branch, the head of the entity or 
the appointing official may waive the repayment if the 
individual involved possesses unique abilities and is the only 
qualified applicant available for the position.
      (4) If the employment under paragraph (1) above is with 
the judicial branch, the Director of the Administrative Office 
of the United States Courts may waive the repayment if the 
individual involved possesses unique abilities and is the only 
qualified applicant available for the position.
      (5) For the purpose of this section, the term 
``employment''--
            (a) includes employment of any length or under any 
        type of appointment, but does not include employment 
        that is without compensation; and
            (b) includes employment under a personal services 
        contract.


        subsection f. effect of subsequent disability retirement


      An employee who has received an incentive payment is 
ineligible to receive an annuity for reasons of disability 
under applicable regulations, unless the incentive payment is 
repaid.


  subsection g. additional agency contributions to the retirement fund


      (1) In addition to any other payments which it is 
required to make under subchapter III of chapter 83 or chapter 
84 of title 5, United States Code, NASA shall remit to the 
Office of Personnel Management for deposit in the Treasury of 
the United States to the credit of the Civil Service Retirement 
and Disability Fund an amount equal to 15 percent of the final 
basic pay of each employee who is covered under subchapter III 
of chapter 83 or chapter 84 of title 5 to whom a voluntary 
separation incentive has been paid under this Act.
      (2) For the purpose of this section, the term ``final 
basic pay'', with respect to an employee, means the total 
amount of basic pay which would be payable for a year of 
service by such employee, computed using the employee's final 
rate of basic pay, and, if last serving on other than a full 
time basis, with appropriate adjustment therefor.


          subsection h. reduction of agency employment levels


      (1) Total full time equivalent employment in NASA shall 
be reduced by one for each separation of an employee who 
receives a voluntary separation incentive payment under this 
Act. The reduction will be calculated by comparing the agency's 
full time equivalent employment for the fiscal year in which 
the voluntary separation payments are made with the authorized 
full time equivalent employment for the prior fiscal year.
      (2) The Office of Management and Budget shall monitor and 
take appropriate action necessary to ensure that the 
requirements of this section are met.
      (3) The President shall take appropriate action to ensure 
that functions involving more than 10 full time equivalent 
employees are not converted to contracts by reason of the 
enactment of this section, except in cases in which a cost 
comparison demonstrates such contracts would be to the 
advantage of the Government.
      (4) The provisions of subsections (1) and (3) of this 
section may be waived upon a determination by the President 
that--
            (1) the existence of a state of war or other 
        national emergency so requires; or
            (2) the existence of an extraordinary emergency 
        which threatens life, health, safety, property, or the 
        environment so requires.


                         subsection i. reports


      No later than March 31 of each fiscal year, NASA shall 
submit to the Office of Personnel Management, who will 
subsequently report to the Committee on Governmental Affairs of 
the Senate and the Committee on Government Reform and Oversight 
of the House of Representatives a report which, with respect to 
the preceding fiscal year, shall include--
            (1) the number of employees who received voluntary 
        separation incentives;
            (2) the average amount of such incentives; and,
            (3) the average grade or pay level of the employees 
        who received incentives.


                      subsection j. effective date


      (1) The provisions of this section shall take effect on 
the date of enactment of this section.
      (2) No voluntary separation incentive under this section 
may be paid based on the separation of an employee after 
September 30, 2000.
      Sec. 440. (a) Subject to the concurrence of the 
Administrator of the General Services Administration (GSA) and 
notwithstanding section 707 of Public Law 103-433, the 
Administrator of the National Aeronautics and Space 
Administration may convey to the city of Downey, California, 
all right, title, and interest of the United States in and to a 
parcel of real property, including improvements thereon, 
consisting of approximately 60 acres and known as Parcels III, 
IV, V, and VI of the NASA Industrial Plant, Downey, California.
      (b)(1) Delay in payment of consideration.--After the end 
of the 20-year period beginning on the date on which the 
conveyance under subsection (a) is completed, the City of 
Downey shall pay to the United States an amount equal to fair 
market value of the conveyed property as of the date of the 
Federal conveyance.
      (2) Effect of reconveyance by the city.--If the City of 
Downey reconveys all or any part of the conveyed property 
during such 20-year period, the City shall pay to the United 
States an amount equal to the fair market value of the 
reconveyed property as of the time of the reconveyance, 
excluding the value of any improvements made to the property by 
the City.
      (3) Determination of fair market value.--The 
Administrator of GSA shall determine fair market value in 
accordance with Federal appraisal standards and procedures.
      (4) Treatment of leases.--The Administrator of GSA may 
treat a lease of the property within such 20-year period as a 
reconveyance if the Administrator determines that the lease is 
being used to avoid application of paragraph (b)(2).
      (5) Deposit of proceeds.--The Administrator of GSA shall 
deposit any proceeds received under this subsection in the 
special account established pursuant to section 204(h)(2) of 
the Federal Property and Administrative Services Act of 1949 
(40 U.S.C. 485(h)(2)).
      (c) The exact acreage and legal description of the real 
property to be conveyed under subsection (a) shall be 
determined by a survey satisfactory to the Administrator of 
GSA. The cost of the survey shall be borne by the City of 
Downey, California.
      (d) The Administrator of GSA may require such additional 
terms and conditions in connection with the conveyance under 
subsection (a) as the Administrator of GSA considers 
appropriate to protect the interests of the United States.
      (e) If the City at any time after the conveyance of the 
property under subsection (a) notifies the Administrator of GSA 
that the City no longer wishes to retain the property, it may 
convey the property under the terms of subsection (b), or, it 
may revert all right, title, and interest in and to the 
property (including any facilities, equipment, or fixtures 
conveyed, but excluding the value of any improvements made to 
the property by the City) to the United States, and the United 
States shall have the right of immediate entry onto the 
property.
      And the Senate agree to the same.
      Amendment numbered 117:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 117, and agree to the same 
with an amendment, as follows:
      In lieu of the matter proposed by said amendment, insert:

     TITLE VI--NEWBORNS' AND MOTHERS' HEALTH PROTECTION ACT OF 1996

SEC. 601. SHORT TITLE.

      This title may be cited as the ``Newborns' and Mothers' 
Health Protection Act of 1996''.

SEC. 602. FINDING.

      Congress finds that--
            (1) the length of post-delivery hospital stay 
        should be based on the unique characteristics of each 
        mother and her newborn child, taking into consideration 
        the health of the mother, the health and stability of 
        the newborn, the ability and confidence of the mother 
        and the father to care for their newborn, the adequacy 
        of support systems at home, and the access of the 
        mother and her newborn to appropriate follow-up health 
        care; and
            (2) the timing of the discharge of a mother and her 
        newborn child from the hospital should be made by the 
        attending provider in consultation with the mother.

SEC. 603. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                    1974.

      (a) In General.--Part 7 of subtitle B of title I of the 
Employee Retirement Income Security Act of 1974 (added by 
section 101(a) of the Health Insurance Portability and 
Accountability Act of 1996) is amended--
            (1) by amending the heading of the part to read as 
        follows:

              ``Part 7--Group Health Plan Requirements'';

            (2) by inserting after the part heading the 
        following:

    ``Subpart A--Requirements Relating to Portability, Access, and 
                            Renewability'';

            (3) by redesignating sections 704 through 707 as 
        sections 731 through 734, respectively;
            (4) by inserting before section 731 (as so 
        redesignated) the following new heading:

                   ``Subpart C--General Provisions'';

        and
            (5) by inserting after section 703 the following 
        new subpart:

                    ``Subpart B--Other Requirements

``SEC. 711. STANDARDS RELATING TO BENEFITS FOR MOTHERS AND NEWBORNS.

      ``(a) Requirements for Minimum Hospital Stay Following 
Birth.--
            ``(1) In general.--A group health plan, and a 
        health insurance issuer offering group health insurance 
        coverage, may not--
                    ``(A) except as provided in paragraph (2)--
                            ``(i) restrict benefits for any 
                        hospital length of stay in connection 
                        with childbirth for the mother or 
                        newborn child, following a normal 
                        vaginal delivery, to less than 48 
                        hours, or
                            ``(ii) restrict benefits for any 
                        hospital length of stay in connection 
                        with childbirth for the mother or 
                        newborn child, following a cesarean 
                        section, to less than 96 hours; or
                    ``(B) require that a provider obtain 
                authorization from the plan or the issuer for 
                prescribing any length of stay required under 
                subparagraph (A) (without regard to paragraph 
                (2)).
            ``(2) Exception.--Paragraph (1)(A) shall not apply 
        in connection with any group health plan or health 
        insurance issuer in any case in which the decision to 
        discharge the mother or her newborn child prior to the 
        expiration of the minimum length of stay otherwise 
        required under paragraph (1)(A) is made by an attending 
        provider in consultation with the mother.
      ``(b) Prohibitions.--A group health plan, and a health 
insurance issuer offering group health insurance coverage in 
connection with a group health plan, may not--
            ``(1) deny to the mother or her newborn child 
        eligibility, or continued eligibility, to enroll or to 
        renew coverage under the terms of the plan, solely for 
        the purpose of avoiding the requirements of this 
        section;
            ``(2) provide monetary payments or rebates to 
        mothers to encourage such mothers to accept less than 
        the minimum protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending provider because such 
        provider provided care to an individual participant or 
        beneficiary in accordance with this section;
            ``(4) provide incentives (monetary or otherwise) to 
        an attending provider to induce such provider to 
        provide care to an individual participant or 
        beneficiary in a manner inconsistent with this section; 
        or
            ``(5) subject to subsection (c)(3), restrict 
        benefits for any portion of a period within a hospital 
        length of stay required under subsection (a) in a 
        manner which is less favorable than the benefits 
        provided for any preceding portion of such stay.
      ``(c) Rules of Construction.--
            ``(1) Nothing in this section shall be construed to 
        require a mother who is a participant or beneficiary--
                    ``(A) to give birth in a hospital; or
                    ``(B) to stay in the hospital for a fixed 
                period of time following the birth of her 
                child.
            ``(2) This section shall not apply with respect to 
        any group health plan, or any group health insurance 
        coverage offered by a health insurance issuer, which 
        does not provide benefits for hospital lengths of stay 
        in connection with childbirth for a mother or her 
        newborn child.
            ``(3) Nothing in this section shall be construed as 
        preventing a group health plan or issuer from imposing 
        deductibles, coinsurance, or other cost-sharing in 
        relation to benefits for hospital lengths of stay in 
        connection with childbirth for a mother or newborn 
        child under the plan (or under health insurance 
        coverage offered in connection with a group health 
        plan), except that such coinsurance or other cost-
        sharing for any portion of a period within a hospital 
        length of stay required under subsection (a) may not be 
        greater than such coinsurance or cost-sharing for any 
        preceding portion of such stay.
      ``(d) Notice Under Group Health Plan.--The imposition of 
the requirements of this section shall be treated as a material 
modification in the terms of the plan described in section 
102(a)(1), for purposes of assuring notice of such requirements 
under the plan; except that the summary description required to 
be provided under the last sentence of section 104(b)(1) with 
respect to such modification shall be provided by not later 
than 60 days after the first day of the first plan year in 
which such requirements apply.
      ``(e) Level and Type of Reimbursements.--Nothing in this 
section shall be construed to prevent a group health plan or a 
health insurance issuer offering group health insurance 
coverage from negotiating the level and type of reimbursement 
with a provider for care provided in accordance with this 
section.
      ``(f) Preemption; Exception for Health Insurance Coverage 
in Certain States.--
            ``(1) In general.--The requirements of this section 
        shall not apply with respect to health insurance 
        coverage if there is a State law (as defined in section 
        731(d)(1)) for a State that regulates such coverage 
        that is described in any of the following 
        subparagraphs:
                    ``(A) Such State law requires such coverage 
                to provide for at least a 48-hour hospital 
                length of stay following a normal vaginal 
                delivery and at least a 96-hour hospital length 
                of stay following a cesarean section.
                    ``(B) Such State law requires such coverage 
                to provide for maternity and pediatric care in 
                accordance with guidelines established by the 
                American College of Obstetricians and 
                Gynecologists, the American Academy of 
                Pediatrics, or other established professional 
                medical associations.
                    ``(C) Such State law requires, in 
                connection with such coverage for maternity 
                care, that the hospital length of stay for such 
                care is left to the decision of (or required to 
                be made by) the attending provider in 
                consultation with the mother.
            ``(2) Construction.--Section 731(a)(1) shall not be 
        construed as superseding a State law described in 
        paragraph (1).''.
      (b) Conforming Amendments.--
            (1) Section 731(c) of such Act (as added by section 
        101 of the Health Insurance Portability and 
        Accountability Act of 1996 and redesignated by the 
        preceding provisions of this section) is amended by 
        striking ``Nothing'' and inserting ``Except as provided 
        in section 711, nothing''.
            (2) Section 732(a) of such Act (as added by section 
        101 of the Health Insurance Portability and 
        Accountability Act of 1996 and redesignated by the 
        preceding provisions of this section) is amended by 
        inserting ``(other than section 711)'' after ``part''.
            (3) Title I of such Act (as amended by section 101 
        of the Health Insurance Portability and Accountability 
        Act of 1996 and the preceding provisions of this 
        section) is further amended--
                    (A) in the last sentence of section 4(b), 
                by striking ``section 706(b)(2)'', ``section 
                706(b)(1)'', and ``section 706(a)(1)'' and 
                inserting ``section 733(b)(2)'', ``section 
                733(b)(1)'', and ``section 733(a)(1)'', 
                respectively;
                    (B) in section 101(g), by striking 
                ``section 706(a)(2)'' and inserting ``section 
                733(a)(2)'';
                    (C) in section 102(b), by striking 
                ``section 706(a)(1)'' each place it appears and 
                inserting ``section 733(a)(1), and by striking 
                ``section 706(b)(2)'' and inserting ``section 
                733(b)(2)'';
                    (D) in section 104(b)(1), by striking 
                ``section 706(a)(1)'' each place it appears and 
                inserting ``section 733(a)(1);
                    (E) in section 502(b)(3), by striking 
                ``section 706(a)(1)'' and inserting ``section 
                733(a)(1)'';
                    (F) in section 506(c), by striking 
                ``section 706(a)(2)'' and inserting ``section 
                733(a)(2)'';
                    (G) in section 514(b)(9), by striking 
                ``section 704'' and inserting ``section 731'';
                    (H) in the last sentence of section 
                701(c)(1), by striking ``section 706(c)'' and 
                inserting ``section 733(c)'';
                    (I) in section 732(b), by striking 
                ``section 706(c)(1)'' and inserting ``section 
                733(c)(1)'';
                    (J) in section 732(c)(1), by striking 
                ``section 706(c)(2)'' and inserting ``section 
                733(c)(2)'';
                    (K) in section 732(c)(2), by striking 
                ``section 706(c)(3)'' and inserting ``section 
                733(c)(3)''; and
                    (L) in section 732(c)(3), by striking 
                ``section 706(c)(4)'' and inserting ``section 
                733(c)(4)''.
            (4) The table of contents in section 1 of such Act 
        is amended by striking the items relating to part 7 and 
        inserting the following:

                ``Part 7--Group Health Plan Requirements

     ``Subpart A--Requirements Relating to Portability, Access, and 
                              Renewability

``Sec. 701. Increased portability through limitation on preexisting 
          condition exclusions.
``Sec. 702. Prohibiting discrimination against individual participants 
          and beneficiaries based on health status.
``Sec. 703. Guaranteed renewability in multiemployer plans and multiple 
          employer welfare arrangements.

                     ``Subpart B--Other Requirements

``Sec. 711. Standards relating to benefits for mothers and newborns.

                     ``Subpart C--General Provisions

``Sec. 731. Preemption; State flexibility; construction.
``Sec.732. Special rules relating to group health plans.
``Sec. 733. Definitions.
``Sec. 734. Regulations.''.

      (c) Effective Date.--The amendments made by this section 
shall apply with respect to group health plans for plan years 
beginning on or after January 1, 1998.

SEC. 604. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE 
                    GROUP MARKET.

      (a) In General.--Title XXVII of the Public Health Service 
Act (as added by section 102 of the Health Insurance 
Portability and Accountability Act of 1996) is amended--
            (1) by amending the title heading to read as 
        follows:

  ``TITLE XXVII--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE'';

            (2) by redesignating subparts 2 and 3 of part A as 
        subparts 3 and 4 of such part;
            (3) by inserting after subpart 1 of part A the 
        following new subpart:

                    ``Subpart 2--Other Requirements

``SEC. 2704. STANDARDS RELATING TO BENEFITS FOR MOTHERS AND NEWBORNS.

      ``(a) Requirements for Minimum Hospital Stay Following 
Birth.--
            ``(1) In general.--A group health plan, and a 
        health insurance issuer offering group health insurance 
        coverage, may not--
                    ``(A) except as provided in paragraph (2)--
                            ``(i) restrict benefits for any 
                        hospital length of stay in connection 
                        with childbirth for the mother or 
                        newborn child, following a normal 
                        vaginal delivery, to less than 48 
                        hours, or
                            ``(ii) restrict benefits for any 
                        hospital length of stay in connection 
                        with childbirth for the mother or 
                        newborn child, following a cesarean 
                        section, to less than 96 hours, or
                    ``(B) require that a provider obtain 
                authorization from the plan or the issuer for 
                prescribing any length of stay required under 
                subparagraph (A) (without regard to paragraph 
                (2)).
            ``(2) Exception.--Paragraph (1)(A) shall not apply 
        in connection with any group health plan or health 
        insurance issuer in any case in which the decision to 
        discharge the mother or her newborn child prior to the 
        expiration of the minimum length of stay otherwise 
        required under paragraph (1)(A) is made by an attending 
        provider in consultation with the mother.
      ``(b) Prohibitions.--A group health plan, and a health 
insurance issuer offering group health insurance coverage in 
connection with a group health plan, may not--
            ``(1) deny to the mother or her newborn child 
        eligibility, or continued eligibility, to enroll or to 
        renew coverage under the terms of the plan, solely for 
        the purpose of avoiding the requirements of this 
        section;
            ``(2) provide monetary payments or rebates to 
        mothers to encourage such mothers to accept less than 
        the minimum protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending provider because such 
        provider provided care to an individual participant or 
        beneficiary in accordance with this section;
            ``(4) provide incentives (monetary or otherwise) to 
        an attending provider to induce such provider to 
        provide care to an individual participant or 
        beneficiary in a manner inconsistent with this section; 
        or
            ``(5) subject to subsection (c)(3), restrict 
        benefits for any portion of a period within a hospital 
        length of stay required under subsection (a) in a 
        manner which is less favorable than the benefits 
        provided for any preceding portion of such stay.
      ``(c) Rules of Construction.--
            ``(1) Nothing in this section shall be construed to 
        require a mother who is a participant or beneficiary--
                    ``(A) to give birth in a hospital; or
                    ``(B) to stay in the hospital for a fixed 
                period of time following the birth of her 
                child.
            ``(2) This section shall not apply with respect to 
        any group health plan, or any group health insurance 
        coverage offered by a health insurance issuer, which 
        does not provide benefits for hospital lengths of stay 
        in connection with childbirth for a mother or her 
        newborn child.
            ``(3) Nothing in this section shall be construed as 
        preventing a group health plan or issuer from imposing 
        deductibles, coinsurance, or other cost-sharing in 
        relation to benefits for hospital lengths of stay in 
        connection with childbirth for a mother or newborn 
        child under the plan (or under health insurance 
        coverage offered in connection with a group health 
        plan), except that such coinsurance or other cost-
        sharing for any portion of a period within a hospital 
        length of stay required under subsection (a) may not be 
        greater than such coinsurance or cost-sharing for any 
        preceding portion of such stay.
      ``(d) Notice.--A group health plan under this part shall 
comply with the notice requirement under section 711(d) of the 
Employee Retirement Income Security Act of 1974 with respect to 
the requirements of this section as if such section applied to 
such plan.
      ``(e) Level and Type of Reimbursements.--Nothing in this 
section shall be construed to prevent a group health plan or a 
health insurance issuer offering group health insurance 
coverage from negotiating the level and type of reimbursement 
with a provider for care provided in accordance with this 
section.
      ``(f) Preemption; Exception for Health Insurance Coverage 
in Certain States.--
            ``(1) In general.--The requirements of this section 
        shall not apply with respect to health insurance 
        coverage if there is a State law (as defined in section 
        2723(d)(1)) for a State that regulates such coverage 
        that is described in any of the following 
        subparagraphs:
                    ``(A) Such State law requires such coverage 
                to provide for at least a 48-hour hospital 
                length of stay following a normal vaginal 
                delivery and at least a 96-hour hospital length 
                of stay following a cesarean section.
                    ``(B) Such State law requires such coverage 
                to provide for maternity and pediatric care in 
                accordance with guidelines established by the 
                American College of Obstetricians and 
                Gynecologists, the American Academy of 
                Pediatrics, or other established professional 
                medical associations.
                    ``(C) Such State law requires, in 
                connection with such coverage for maternity 
                care, that the hospital length of stay for such 
                care is left to the decision of (or required to 
                be made by) the attending provider in 
                consultation with the mother.
            ``(2) Construction.--Section 2723(a)(1) shall not 
        be construed as superseding a State law described in 
        paragraph (1).''.
      (b) Conforming Amendments.--
            (1) Section 2721 of such Act (as added by section 
        102 of the Health Insurance Portability and 
        Accountability Act of 1996) is amended--
                    (A) in subsection (a), by striking 
                ``subparts 1 and 2'' and inserting ``subparts 1 
                and 3'', and
                    (B) in subsections (b) through (d), by 
                striking ``subparts 1 and 2'' each place it 
                appears and inserting ``subparts 1 through 3''.
            (2) Section 2723(c) of such Act (as added by 
        section 102 of the Health Insurance Portability and 
        Accountability Act of 1996) is amended by inserting 
        ``(other than section 2704)'' after ``part''.
      (c) Effective Date.--The amendments made by this section 
shall apply with respect to group health plans for plan years 
beginning on or after January 1, 1998.

SEC. 605. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE 
                    INDIVIDUAL MARKET.

      (a) In General.--Part B of title XXVII of the Public 
Health Service Act (as added by section 111 of the Health 
Insurance Portability and Accountability Act of 1996) is 
amended--
            (1) by inserting after the part heading the 
        following:

   ``Subpart 1--Portability, Access, and Renewability Requirements'';

            (2) by redesignating sections 2745, 2746, and 2747 
        as sections 2761, 2762, and 2763, respectively;
            (3) by inserting before section 2761 (as so 
        redesignated) the following:

                 ``Subpart 3--General Provisions''; and

            (4) by inserting after section 2744 the following:

                    ``Subpart 3--Other Requirements

``SEC. 2751. STANDARDS RELATING TO BENEFITS FOR MOTHERS AND NEWBORNS.

      ``(a) In General.--The provisions of section 2704 (other 
than subsections (d) and (f)) shall apply to health insurance 
coverage offered by a health insurance issuer in the individual 
market in the same manner as it applies to health insurance 
coverage offered by a health insurance issuer in connection 
with a group health plan in the small or large group market.
      ``(b) Notice Requirement.--A health insurance issuer 
under this part shall comply with the notice requirement under 
section 711(d) of the Employee Retirement Income Security Act 
of 1974 with respect to the requirements referred to in 
subsection (a) as if such section applied to such issuer and 
such issuer were a group health plan.
      ``(c) Preemption; Exception for Health Insurance Coverage 
in Certain States.--
            ``(1) In general.--The requirements of this section 
        shall not apply with respect to health insurance 
        coverage if there is a State law (as defined in section 
        2723(d)(1)) for a State that regulates such coverage 
        that is described in any of the following 
        subparagraphs:
                    ``(A) Such State law requires such coverage 
                to provide for at least a 48-hour hospital 
                length of stay following a normal vaginal 
                delivery and at least a 96-hour hospital length 
                of stay following a cesarean section.
                    ``(B) Such State law requires such coverage 
                to provide for maternity and pediatric care in 
                accordance with guidelines established by the 
                American College of Obstetricians and 
                Gynecologists, the American Academy of 
                Pediatrics, or other established professional 
                medical associations.
                    ``(C) Such State law requires, in 
                connection with such coverage for maternity 
                care, that the hospital length of stay for such 
                care is left to the decision of (or required to 
                be made by) the attending provider in 
                consultation with the mother.
            ``(2) Construction.--Section 2762(a) shall not be 
        construed as superseding a State law described in 
        paragraph (1).''.
      (b) Conforming Amendments.--Such part (as so added) is 
further amended as follows:
            (1) In section 2744(a)(1), strike ``2746(b)'' and 
        insert ``2762(b)''.
            (2) In section 2745(a)(1) (before redesignation 
        under subsection (a)(1)), strike ``2746'' and insert 
        ``2762''.
            (3) In section 2746(b) (before redesignation under 
        subsection (a)(1))--
                    (A) by inserting ``(1)'' after the dash, 
                and
                    (B) by adding at the end the following:
            ``(2) Nothing in this part (other than section 
        2751) shall be construed as requiring health insurance 
        coverage offered in the individual market to provide 
        specific benefits under the terms of such coverage.''.
      (c) Effective Date.--The amendments made by this section 
shall apply with respect to health insurance coverage offered, 
sold, issued, renewed, in effect, or operated in the individual 
market on or after January 1, 1998.

SEC. 606. REPORTS TO CONGRESS CONCERNING CHILDBIRTH.

      (a) Findings.--Congress finds that--
            (1) childbirth is one part of a continuum of 
        experience that includes prepregnancy, pregnancy and 
        prenatal care, labor and delivery, the immediate 
        postpartum period, and a longer period of adjustment 
        for the newborn, the mother, and the family;
            (2) health care practices across this continuum are 
        changing in response to health care financing and 
        delivery system changes, science and clinical research, 
        and patient preferences; and
            (3) there is a need--
                    (A) to examine the issues and consequences 
                associated with the length of hospital stays 
                following childbirth;
                    (B) to examine the follow-up practices for 
                mothers and newborns used in conjunction with 
                shorter hospital stays;
                    (C) to identify appropriate health care 
                practices and procedures with regard to the 
                hospital discharge of newborns and mothers;
                    (D) to examine the extent to which such 
                care is affected by family and environmental 
                factors; and
                    (E) to examine the content of care during 
                hospital stays following childbirth.
      (b) Advisory Panel.--
            (1) In general.--Not later than 90 days after the 
        date of enactment of this Act, the Secretary of Health 
        and Human Services (in this section referred to as the 
        ``Secretary'') shall establish an advisory panel 
        (referred to in this section as the ``advisory 
        panel'')--
                    (A) to guide and review methods, 
                procedures, and data collection necessary to 
                conduct the study described in subsection (c) 
                in a manner that is intended to enhance the 
                quality, safety, and effectiveness of health 
                care services provided to mothers and newborns;
                    (B) to develop a consensus among the 
                members of the advisory panel regarding the 
                appropriateness of the specific requirements of 
                this title; and
                    (C) to prepare and submit to the Secretary, 
                as part of the report of the Secretary 
                submitted under subsection (d), a report 
                summarizing the consensus (if any) developed 
                under subparagraph (B) or the reasons for not 
                reaching such a consensus.
            (2) Participation.--
                    (A) Department representatives.--The 
                Secretary shall ensure that representatives 
                from within the Department of Health and Human 
                Services that have expertise in the area of 
                maternal and child health or in outcomes 
                research are appointed to the advisory panel.
                    (B) Representatives of public and private 
                sector entities.--
                            (i) In general.--The Secretary 
                        shall ensure that members of the 
                        advisory panel include representatives 
                        of public and private sector entities 
                        having knowledge or experience in one 
                        or more of the following areas:
                                    (I) Patient care.
                                    (II) Patient education.
                                    (III) Quality assurance.
                                    (IV) Outcomes research.
                                    (V) Consumer issues.
                            (ii) Requirement.--The panel shall 
                        include representatives of each of the 
                        following categories:
                                    (I) Health care 
                                practitioners.
                                    (II) Health plans.
                                    (III) Hospitals.
                                    (IV) Employers.
                                    (V) States.
                                    (VI) Consumers.
      (c) Studies.--
            (1) In general.--The Secretary shall conduct a 
        study of--
                    (A) the factors affecting the continuum of 
                care with respect to maternal and child health 
                care, including outcomes following childbirth;
                    (B) the factors determining the length of 
                hospital stay following childbirth;
                    (C) the diversity of negative or positive 
                outcomes affecting mothers, infants, and 
                families;
                    (D) the manner in which post natal care has 
                changed over time and the manner in which that 
                care has adapted or related to changes in the 
                length of hospital stay, taking into account--
                            (i) the types of post natal care 
                        available and the extent to which such 
                        care is accessed; and
                            (ii) the challenges associated with 
                        providing post natal care to all 
                        populations, including vulnerable 
                        populations, and solutions for 
                        overcoming these challenges; and
                    (E) the financial incentives that may--
                            (i) impact the health of newborns 
                        and mothers; and
                            (ii) influence the clinical 
                        decisionmaking of health care 
                        providers.
            (2) Resources.--The Secretary shall provide to the 
        advisory panel the resources necessary to carry out the 
        duties of the advisory panel.
      (d) Reports.--
            (1) In general.--The Secretary shall prepare and 
        submit to the Committee on Labor and Human Resources of 
        the Senate and the Committee on Commerce of the House 
        of Representatives a report that contains--
                    (A) a summary of the study conducted under 
                subsection (c);
                    (B) a summary of the best practices used in 
                the public and private sectors for the care of 
                newborns and mothers;
                    (C) recommendations for improvements in 
                prenatal care, post natal care, delivery and 
                follow-up care, and whether the implementation 
                of such improvements should be accomplished by 
                the private health care sector, Federal or 
                State governments, or any combination thereof; 
                and
                    (D) limitations on the databases in 
                existence on the date of the enactment of this 
                Act.
            (2) Deadlines.--The Secretary shall prepare and 
        submit to the Committees referred to in paragraph (1)--
                    (A) an initial report concerning the study 
                conducted under subsection (c) and elements 
                described in paragraph (1), not later than 18 
                months after the date of the enactment of this 
                Act;
                    (B) an interim report concerning such study 
                and elements not later than 3 years after the 
                date of the enactment of this Act; and
                    (C) a final report concerning such study 
                and elements not later than 5 years after the 
                date of the enactment of this Act.
      (e) Termination of Panel.--The advisory panel shall 
terminate on the date that occurs 60 days after the date on 
which the last report is submitted under subsection (d).
      And the Senate agree to the same.
      Amendment numbered 118:
      That the House recede from its disagreement to the 
amendment of the Senate numbered 118, and agree to the same 
with an amendment, as follows:
      In lieu of the matter proposed by said amendment, insert:

TITLE VII--PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH 
                                BENEFITS

SEC. 701. SHORT TITLE.

      This title may be cited as the ``Mental Health Parity Act 
of 1996''.

SEC. 702. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                    1974.

      (a) In General.--Subpart B of part 7 of subtitle B of 
title I of the Employee Retirement Income Security Act of 1974 
(as added by section 603(a)) is amended by adding at the end 
the following new section:

``SEC. 712. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL 
                    HEALTH BENEFITS.

      ``(a) In General.--
            ``(1) Aggregate lifetime limits.--In the case of a 
        group health plan (or health insurance coverage offered 
        in connection with such a plan) that provides both 
        medical and surgical benefits and mental health 
        benefits--
                    ``(A) No lifetime limit.--If the plan or 
                coverage does not include an aggregate lifetime 
                limit on substantially all medical and surgical 
                benefits, the plan or coverage may not impose 
                any aggregate lifetime limit on mental health 
                benefits.
                    ``(B) Lifetime limit.--If the plan or 
                coverage includes an aggregate lifetime limit 
                on substantially all medical and surgical 
                benefits (in this paragraph referred to as the 
                `applicable lifetime limit'), the plan or 
                coverage shall either--
                            ``(i) apply the applicable lifetime 
                        limit both to the medical and surgical 
                        benefits to which it otherwise would 
                        apply and to mental health benefits and 
                        not distinguish in the application of 
                        such limit between such medical and 
                        surgical benefits and mental health 
                        benefits; or
                            ``(ii) not include any aggregate 
                        lifetime limit on mental health 
                        benefits that is less than the 
                        applicable lifetime limit.
                    ``(C) Rule in case of different limits.--In 
                the case of a plan or coverage that is not 
                described in subparagraph (A) or (B) and that 
                includes no or different aggregate lifetime 
                limits on different categories of medical and 
                surgical benefits, the Secretary shall 
                establish rules under which subparagraph (B) is 
                applied to such plan or coverage with respect 
                to mental health benefits by substituting for 
                the applicable lifetime limit an average 
                aggregate lifetime limit that is computed 
                taking into account the weighted average of the 
                aggregate lifetime limits applicable to such 
                categories.
            ``(2) Annual limits.--In the case of a group health 
        plan (or health insurance coverage offered in 
        connection with such a plan) that provides both medical 
        and surgical benefits and mental health benefits--
                    ``(A) No annual limit.--If the plan or 
                coverage does not include an annual limit on 
                substantially all medical and surgical 
                benefits, the plan or coverage may not impose 
                any annual limit on mental health benefits.
                    ``(B) Annual limit.--If the plan or 
                coverage includes an annual limit on 
                substantially all medical and surgical benefits 
                (in this paragraph referred to as the 
                `applicable annual limit'), the plan or 
                coverage shall either--
                            ``(i) apply the applicable annual 
                        limit both to medical and surgical 
                        benefits to which it otherwise would 
                        apply and to mental health benefits and 
                        not distinguish in the application of 
                        such limit between such medical and 
                        surgical benefits and mental health 
                        benefits; or
                            ``(ii) not include any annual limit 
                        on mental health benefits that is less 
                        than the applicable annual limit.
                    ``(C) Rule in case of different limits.--In 
                the case of a plan or coverage that is not 
                described in subparagraph (A) or (B) and that 
                includes no or different annual limits on 
                different categories of medical and surgical 
                benefits, the Secretary shall establish rules 
                under which subparagraph (B) is applied to such 
                plan or coverage with respect to mental health 
                benefits by substituting for the applicable 
                annual limit an average annual limit that is 
                computed taking into account the weighted 
                average of the annual limits applicable to such 
                categories.
      ``(b) Construction.--Nothing in this section shall be 
construed--
            ``(1) as requiring a group health plan (or health 
        insurance coverage offered in connection with such a 
        plan) to provide any mental health benefits; or
            ``(2) in the case of a group health plan (or health 
        insurance coverage offered in connection with such a 
        plan) that provides mental health benefits, as 
        affecting the terms and conditions (including cost 
        sharing, limits on numbers of visits or days of 
        coverage, and requirements relating to medical 
        necessity) relating to the amount, duration, or scope 
        of mental health benefits under the plan or coverage, 
        except as specifically provided in subsection (a) (in 
        regard to parity in the imposition of aggregate 
        lifetime limits and annual limits for mental health 
        benefits).
      ``(c) Exemptions.--
            ``(1) Small employer exemption.--
                    ``(A) In general.--This section shall not 
                apply to any group health plan (and group 
                health insurance coverage offered in connection 
                with a group health plan) for any plan year of 
                a small employer.
                    ``(B) Small employer.--For purposes of 
                subparagraph (A), the term `small employer' 
                means, in connection with a group health plan 
                with respect to a calendar year and a plan 
                year, an employer who employed an average of at 
                least 2 but not more than 50 employees on 
                business days during the preceding calendar 
                year and who employs at least 2 employees on 
                the first day of the plan year.
                    ``(C) Application of certain rules in 
                determination of employer size.--For purposes 
                of this paragraph--
                            ``(i) Application of aggregation 
                        rule for employers.--Rules similar to 
                        the rules under subsections (b), (c), 
                        (m), and (o) of section 414 of the 
                        Internal Revenue Code of 1986 shall 
                        apply for purposes of treating persons 
                        as a single employer.
                            ``(ii) Employers not in existence 
                        in preceding year.--In the case of an 
                        employer which was not in existence 
                        throughout the preceding calendar year, 
                        the determination of whether such 
                        employer is a small employer shall be 
                        based on the average number of 
                        employees that it is reasonably 
                        expected such employer will employ on 
                        business days in the current calendar 
                        year.
                            ``(iii) Predecessors.--Any 
                        reference in this paragraph to an 
                        employer shall include a reference to 
                        any predecessor of such employer.
            ``(2) Increased cost exemption.--This section shall 
        not apply with respect to a group health plan (or 
        health insurance coverage offered in connection with a 
        group health plan) if the application of this section 
        to such plan (or to such coverage) results in an 
        increase in the cost under the plan (or for such 
        coverage) of at least 1 percent.
      ``(d) Separate Application to Each Option Offered.--In 
the case of a group health plan that offers a participant or 
beneficiary two or more benefit package options under the plan, 
the requirements of this section shall be applied separately 
with respect to each such option.
      ``(e) Definitions.--For purposes of this section:
            ``(1) Aggregate lifetime limit.--The term 
        `aggregate lifetime limit' means, with respect to 
        benefits under a group health plan or health insurance 
        coverage, a dollar limitation on the total amount that 
        may be paid with respect to such benefits under the 
        plan or health insurance coverage with respect to an 
        individual or other coverage unit.
            ``(2) Annual limit.--The term `annual limit' means, 
        with respect to benefits under a group health plan or 
        health insurance coverage, a dollar limitation on the 
        total amount of benefits that may be paid with respect 
        to such benefits in a 12-month period under the plan or 
        health insurance coverage with respect to an individual 
        or other coverage unit.
            ``(3) Medical or surgical benefits.--The term 
        `medical or surgical benefits' means benefits with 
        respect to medical or surgical services, as defined 
        under the terms of the plan or coverage (as the case 
        may be), but does not include mental health benefits.
            ``(4) mental health benefits.--The term `mental 
        health benefits' means benefits with respect to mental 
        health services, as defined under the terms of the plan 
        or coverage (as the case may be), but does not include 
        benefits with respect to treatment of substance abuse 
        or chemical dependency.
      ``(f) Sunset.--This section shall not apply to benefits 
for services furnished on or after September 30, 2001.''.
      (b) Clerical Amendment.--The table of contents in section 
1 of such Act, as amended by section 602 of this Act, is 
amended by inserting after the item relating to section 711 the 
following new item:

``Sec. 712. Parity in the application of certain limits to mental health 
          benefits.''.

      (c) Effective Date.--The amendments made by this section 
shall apply with respect to group health plans for plan years 
beginning on or after January 1, 1998.

SEC. 703. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT RELATING TO THE 
                    GROUP MARKET.

      (a) In General.--Subpart 2 of part A of title XXVII of 
the Public Health Service Act (as added by section 604(a)) is 
amended by adding at the end the following new section:

``SEC. 2705. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL 
                    HEALTH BENEFITS.

      ``(a) In General.--
            ``(1) Aggregate lifetime limits.--In the case of a 
        group health plan (or health insurance coverage offered 
        in connection with such a plan) that provides both 
        medical and surgical benefits and mental health 
        benefits--
                    ``(A) No lifetime limit.--If the plan or 
                coverage does not include an aggregate lifetime 
                limit on substantially all medical and surgical 
                benefits, the plan or coverage may not impose 
                any aggregate lifetime limit on mental health 
                benefits.
                    ``(B) Lifetime limit.--If the plan or 
                coverage includes an aggregate lifetime limit 
                on substantially all medical and surgical 
                benefits (in this paragraph referred to as the 
                `applicable lifetime limit'), the plan or 
                coverage shall either--
                            ``(i) apply the applicable lifetime 
                        limit both to the medical and surgical 
                        benefits to which it otherwise would 
                        apply and to mental health benefits and 
                        not distinguish in the application of 
                        such limit between such medical and 
                        surgical benefits and mental health 
                        benefits; or
                            ``(ii) not include any aggregate 
                        lifetime limit on mental health 
                        benefits that is less than the 
                        applicable lifetime limit.
                    ``(C) Rule in case of different limits.--In 
                the case of a plan or coverage that is not 
                described in subparagraph (A) or (B) and that 
                includes no or different aggregate lifetime 
                limits on different categories of medical and 
                surgical benefits, the Secretary shall 
                establish rules under which subparagraph (B) is 
                applied to such plan or coverage with respect 
                to mental health benefits by substituting for 
                the applicable lifetime limit an average 
                aggregate lifetime limit that is computed 
                taking into account the weighted average of the 
                aggregate lifetime limits applicable to such 
                categories.
            ``(2) Annual limits.--In the case of a group health 
        plan (or health insurance coverage offered in 
        connection with such a plan) that provides both medical 
        and surgical benefits and mental health benefits--
                    ``(A) No annual limit.--If the plan or 
                coverage does not include an annual limit on 
                substantially all medical and surgical 
                benefits, the plan or coverage may not impose 
                any annual limit on mental health benefits.
                    ``(B) Annual limit.--If the plan or 
                coverage includes an annual limit on 
                substantially all medical and surgical benefits 
                (in this paragraph referred to as the 
                `applicable annual limit'), the plan or 
                coverage shall either--
                            ``(i) apply the applicable annual 
                        limit both to medical and surgical 
                        benefits to which it otherwise would 
                        apply and to mental health benefits and 
                        not distinguish in the application of 
                        such limit between such medical and 
                        surgical benefits and mental health 
                        benefits; or
                            ``(ii) not include any annual limit 
                        on mental health benefits that is less 
                        than the applicable annual limit.
                    ``(C) Rule in case of different limits.--In 
                the case of a plan or coverage that is not 
                described in subparagraph (A) or (B) and that 
                includes no or different annual limits on 
                different categories of medical and surgical 
                benefits, the Secretary shall establish rules 
                under which subparagraph (B) is applied to such 
                plan on coverage with respect to mental health 
                benefits by substituting for the applicable 
                annual limit an average annual limit that is 
                computed taking into account the weighted 
                average of the annual limits applicable to such 
                categories.
      ``(b) Construction.--Nothing in this section shall be 
construed--
            ``(1) as requiring a group health plan (or health 
        insurance coverage offered in connection with such a 
        plan) to provide any mental health benefits; or
            ``(2) in the case of a group health plan (or health 
        insurance coverage offered in connection with such a 
        plan) that provides mental health benefits, as 
        affecting the terms and conditions (including cost 
        sharing, limits on numbers of visits or days of 
        coverage, and requirements relating to medical 
        necessity) relating to the amount, duration, or scope 
        of mental health benefits under the plan or coverage, 
        except as specifically provided in subsection (a) (in 
        regard to parity in the imposition of aggregate 
        lifetime limits and annual limits for mental health 
        benefits).
      ``(c) Exemptions.--
            ``(1) Small employer exemption.--This section shall 
        not apply to any group health plan (and group health 
        insurance coverage offered in connection with a group 
        health plan) for any plan year of a small employer.
            ``(2) Increased cost exemption.--This section shall 
        not apply with respect to a group health plan (or 
        health insurance coverage offered in connection with a 
        group health plan) if the application of this section 
        to such plan (or to such coverage) results in an 
        increase in the cost under the plan (or for such 
        coverage) of at least 1 percent.
      ``(d) Separate Application to Each Option Offered.--In 
the case of a group health plan that offers a participant or 
beneficiary two or more benefit package options under the plan, 
the requirements of this section shall be applied separately 
with respect to each such option.
      ``(e) Definitions.--For purposes of this section;
            ``(1) Aggregate lifetime limit.--The term 
        `aggregate lifetime limit' means, with respect to 
        benefits under a group health plan or health insurance 
        coverage, a dollar limitation on the total amount that 
        may be paid with respect to such benefits under the 
        plan or health insurance coverage with respect to an 
        individual or other coverage unit.
            ``(2) Annual limit.--The term `annual limit' means, 
        with respect to benefits under a group health plan or 
        health insurance coverage, a dollar limitation on the 
        total amount of benefits that may be paid with respect 
        to such benefits in a 12-month period under the plan or 
        health insurance coverage with respect to an individual 
        or other coverage unit.
            ``(3) Medical or surgical benefits.--The term 
        `medical or surgical benefits' means benefits with 
        respect to medical or surgical services, as defined 
        under the terms of the plan or coverage (as the case 
        may be), but does not include mental health benefits.
            ``(4) Mental health benefits.--The term `mental 
        health benefits' means benefits with respect to mental 
        health services, as defined under the terms of the plan 
        or coverage (as the case may be), but does not include 
        benefits with respect to treatment of substance abuse 
        or chemical dependency.
            ``(f) Sunset.--This section shall not apply to 
        benefits for services furnished on or after September 
        30, 2001.''.
      (b) Effective Date.--The amendments made by this section 
shall apply with respect to group health plans for plan years 
beginning on or after January 1, 1998.
      And the Senate agree to the same.

                                   Jerry Lewis,
                                   Barbara F. Vucanovich,
                                   James T. Walsh,
                                   David L. Hobson,
                                   Joe Knollenberg,
                                   Rodney P. Frelinghuysen,
                                   Bob Livingston,
                                   Louis Stokes,
                                   Alan B. Mollohan,
                                   Jim Chapman,
                                   Marcy Kaptur,
                                   David R. Obey,
                                 Managers on the Part of the House.

                                   Christopher S. Bond,
                                   Conrad Burns,
                                   Ted Stevens,
                                   Richard C. Shelby,
                                   Robert F. Bennett,
                                   Ben Nighthorse Campbell,
                                   Mark O. Hatfield,
                                   Barbara A. Mikulski,
                                   Patrick J. Leahy,
                                   J. Bennett Johnston,
                                   Frank R. Lautenberg,
                                   J. Robert Kerrey,
                                   Robert C. Byrd,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendments of the Senate to the bill (H.R. 3666) making 
appropriations for the Departments of Veterans Affairs and 
Housing and Urban Development, and for sundry independent 
agencies, boards, commissions, corporations, and offices for 
the fiscal year ending September 30, 1997, and for other 
purposes, submit the following joint statement to the House and 
the Senate in explanation of the effect of the action agreed 
upon by the managers and recommended in the accompanying 
report.
      The language and allocations set forth in House Report 
104-628 and Senate Report 104-318 should be complied with 
unless specifically addressed to the contrary in the conference 
report and statement of the managers. Report language included 
by the House which is not changed by the report of the Senate 
or the conference, and Senate report language which is not 
changed by the conference is approved by the committee of 
conference. The statement of the managers, while repeating some 
report language for emphasis, does not intend to negate the 
language referred to above unless expressly provided herein. In 
cases in which the House or Senate have directed the submission 
of a report, such report is to be submitted to both House and 
Senate Committees on Appropriations.

                TITLE I--DEPARTMENT OF VETERANS AFFAIRS

                    Veterans Benefits Administration

      Amendment No. 1: Appropriates $18,671,259,000 for 
compensation and pensions as proposed by the Senate, instead of 
$18,497,854,000 as proposed by the House.
      Amendment No. 2: Appropriates $1,377,000,000 for 
readjustment benefits as proposed by the Senate, instead of 
$1,227,000,000 as proposed by the House.
      Amendment No. 3: Limits the principal amount of direct 
loans in the vocational rehabilitation loans program account to 
not to exceed $2,822,000 as proposed by the Senate, instead of 
not to exceed $1,964,000 as proposed by the House.

                     Veterans Health Administration

      Amendment No. 4: Delays the availability of $700,000,000 
of the medical care appropriation in the equipment and land and 
structures object classifications until August 1, 1997, instead 
of delaying the availability of $570,000,000 as proposed by the 
House and $596,000,000 as proposed by the Senate.
      The conference agreement includes medical care funding of 
$210,000 to expand services at the existing community-based 
outpatient clinic in Texarkana, Texas; and $400,000 for the 
homeless veterans domiciliary program in Alaska, including the 
purchase of transitional housing units ($300,000) and the 
expansion of the domiciliary's video-conferencing capabilities 
($100,000).
      Amendment No. 5: Appropriates $262,000,000 for medical 
and prosthetic research as proposed by the Senate, instead of 
$257,000,000 proposed by the House. The House, in section 427 
of the general provisions, increased this appropriation by 
$20,000,000--to a total of $277,000,000. The conference 
agreement deletes that general provision.
      The committee of conference supports additional research 
activity on osteoporosis and related bone diseases, disorders 
which affect both women and men. In 1993, VA medical centers 
cared for hip fractures in 2,650 veterans over 65 years of age. 
The average length of acute hospital stay was approximately 25 
days which resulted in a total of 65,720 hospital days of care. 
The conferees urge the VA to prepare a long-term strategy for 
research in this area, including the coordination of such 
efforts with the Department of Defense and the National 
Institutes of Health.
      Amendment No. 6: Appropriates $61,207,000 for medical 
administration and miscellaneous operating expenses, instead of 
$59,207,000 as proposed by the House and $62,207,000 as 
proposed by the Senate.

                       Department Administration

      Amendment No. 7: Appropriates $827,584,000 for general 
operating expenses, instead of $823,584,000 as proposed by the 
House and $813,730,000 as proposed by the Senate. The House, in 
section 426 of the general provisions, increased this 
appropriation by $17,000,000--to a total of $840,584,000. The 
conference agreement deletes that general provision.
      The conferees agree that the decrease of $16,146,000 
below the budget estimate be applied against funds requested 
for the Veterans Benefits Administration. The reduction to VBA 
reflects the conferees' continuing frustration with the 
lethargic approach to improving service to veterans, and is not 
intended to worsen the backlog of pending claims. The staffing 
requested for compensation and pension claims processing is 
fully funded. While the Secretary has discretion in applying 
the reduction, suggested areas include deferred relocation 
expenses, travel, restructuring plans which will not be 
implemented, and cash awards and bonuses.
      The conferees also agree not to earmark any specific 
level of funding to improve access for contact by telephone, 
but support this Veterans Benefits Administration's 
restructuring initiative to improve service to veterans.
      Amendment No. 8: Makes technical language change as 
proposed by the Senate.
      Amendment No. 9: Appropriates $250,858,000 for 
construction, major projects, instead of $245,358,000 as 
proposed by the House and $178,250,000 as proposed by the 
Senate.
      The conference agreement includes the following changes 
from the budget estimate:
      -$42,600,000 for the new medical center and nursing home 
project in Brevard County, Florida.
      -$15,100,000 for the renovation of psychiatric wards at 
the Perry Point, Maryland VA Medical Center.
      +$5,000,000 for an ambulatory care addition project at 
the Leavenworth, Kansas VA Medical Center.
      -$15,500,000 for the renovation of facilities and 
relocation of medical school functions project at the Mountain 
Home, Tennessee VA Medical Center.
      +$20,000,000 for the first phase of the spinal cord 
injury unit and energy center project at the Tampa, Florida VA 
Medical Center.
      -$12,400,000 for the $17,400,000 requested for the 
environmental improvements project at the Pittsburgh (UD), 
Pennsylvania VA Medical Center.
      -$18,200,000 for the environmental enhancements project 
at the Salisbury, North Carolina VA Medical Center.
      +$16,000,000 for the research addition project at the 
Portland, Oregon VA Medical Center.
      +$1,000,000 for the planning of an ambulatory care 
addition at the Lyons, New Jersey VA Medical Center.
      +$2,300,000 for the planning and design of a renovation/
reconstruction of psychiatric care facilities project and the 
Murfreesboro, Tennessee VA Medical Center.
      -$5,000,000 of the $8,845,000 requested for the advance 
planning fund.
      -$5,000,000 of the $15,000,000 requested for asbestos 
abatement.
      +$13,000,000 for the phase I development of a new 
national cemetery in the Albany, New York area.
      +$1,258,000 to complete the design of a new national 
cemetery in Guilford Township, Ohio.
      -$5,000,000 requested for the judgment fund.
      The conference agreement includes the budget request of 
$32,100,000 for the next funding increment of the replacement 
hospital at Travis Air Force Base, with bill language delaying 
the release of said funds until January 1, 1998, unless action 
is taken by the Congress specifically making the funds 
available sooner. The House provided $32,100,000 for the Travis 
project and the Senate deleted such funds.
      The conference committee recognizes that currently there 
exist several scenarios for providing medical care to veterans 
in this area, including an outpatient clinic; a replacement 
hospital, which includes an outpatient clinic; dedication of 
additional beds for VA use at the Travis hospital; and 
utilization of the Mather Air Force hospital for veterans. The 
conference committee also recognizes a recent General 
Accounting Office report which concludes that the Travis 
construction project is not justified and that lower-cost 
alternatives should be more fully explored. However, the VA 
Secretary does not concur with the GAO report and its 
recommendation, and continues to fully support the project. 
Further, the VA is currently developing plans for restructuring 
the way health care services are provided in its Sierra Pacific 
network.
      The Congress has provided for two approaches to this 
matter in the past few years. There is an authorization and a 
$25,000,000 appropriation for an outpatient clinic at Travis. 
Also, since 1991, a total of $22,600,000 has been appropriated 
for a hospital to replace the one at Martinez. Because the 
hospital project began before the current authorization process 
was enacted, it is ``grandfathered'' and no authorization for 
it is required.
      The language included in the bill delaying the release of 
the funds prior to January 1, 1998, unless specific action is 
taken, will permit the Congress and the VA time to reassess the 
available options and fully consider the GAO recommendations. 
To assist in this effort, the VA is to make a report to the 
Congress with recommendations as how to best provide medical 
services to veterans in the area. The authorizing committees 
should review this situation and take whatever action regarding 
the construction authorization they deem appropriate.
      Amendment No. 10: Appropriates $175,000,000 for 
construction, minor projects, instead of $160,000,000 as 
proposed by the House and $190,000,000 as proposed by the 
Senate. The conferees urge the VA to give priority to projects 
which will convert excess inpatient hospital space to 
outpatient care space needed to accommodate the increases in 
those activities.
      Amendment No. 11: Appropriates $12,300,000 for the 
parking revolving fund as proposed by the House, instead of 
zero as proposed by the Senate. The conferees agree that these 
funds are for the parking structure component of the ambulatory 
care addition project at the Cleveland VA Medical Center.

                        administrative provision

      Amendment No. 12: Inserts language proposed by the Senate 
providing for the conveyance of a portion of the grounds at the 
Tuscaloosa VA Medical Center to the City of Tuscaloosa, 
Alabama.

         TITLE II--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                            HOUSING PROGRAMS

      Amendment No. 13: Deletes HUD's account structure as 
proposed by the House and stricken by Senate. Amendment number 
14 replaces it with a new structure that is more descriptive of 
the activities actually carried out under the particular 
accounts. Many of the activities carried out in the following 
accounts have been either merged into three more flexible 
categorical accounts and two specialized accounts or moved to 
the administrative provisions of this Title: annual 
contributions for assisted housing; housing for special 
populations: elderly and disabled housing; the flexible subsidy 
fund; rental housing assistance; the public and Indian housing 
certificate fund; public housing operating fund; public housing 
capital fund; revitalization of severely distressed public 
housing (HOPE VII); and drug elimination grants for low income 
housing.
      Amendment No. 14: Inserts language providing a new 
account structure as proposed by the Senate with modifications 
as described below.
      Appropriates $1,039,000,000 for a new ``Development of 
additional new subsidized housing'' account instead of 
$969,464,442 as proposed by the Senate. Incorporated into this 
account are the new construction housing programs, including 
housing for the elderly under section 202, housing for the 
disabled under section 811, and public housing for Indian 
families. Within the account, $645,000,000 is provided for 
developing or acquiring housing under the section 202 program, 
$194,000,000 for developing or acquiring housing under the 
section 811 program, and $200,000,000 for developing or 
acquiring public housing for Indian families.
      Appropriates $4,640,000,000 for the second new account, 
called ``Prevention of resident displacement,'' to assure 
against the disruptive and painful effects of displacement that 
families may confront from losing their subsidized housing. The 
largest component of this account--$3,600,000,000--is 
appropriated to extend expiring rent subsidy contracts for one 
year. Appropriations for the remaining components are: 
$850,000,000 for section 8 contract amendments, of which 
$50,000,000 is for rental assistance contracts under the Low-
Income Housing, Preservation and Resident Homeownership Act of 
1990 (LIHPRHA) and the Emergency Low-Income Housing 
Preservation Act of 1987 (ELIHPA); and $190,000,000 for section 
8 tenant-based certificates and vouchers necessary to avoid 
resident displacement, for witness relocation and family 
unification activities, and for other purposes.
      HUD requested $290,000,000 for certificate and voucher 
rental assistance. Of this amount, almost $100,000,000 was for 
purposes other than providing rental assistance, including such 
items as settlement of litigation, counseling services and a 
new, previously unauthorized ``Welfare-to-Work'' initiative. 
There is a trend at HUD to initiate programs without 
Congressional approval and fund them with money appropriated 
for authorized programs. The conferees plan to carefully 
monitor HUD's propensity to act without Congressional mandate. 
In the meantime, the Department is directed to present a budget 
request on a timely basis that outlines and justifies their 
priorities and, if funds are available and the program is 
authorized, the Appropriations Committees may provide funding 
after due consideration.
      Appropriates $5,750,000,000 for the third new account, 
``Preserving existing housing investment,'' which incorporates 
public and Indian housing operating subsidies, modernization, 
and housing preservation activities under the LIHPRHA. A total 
of $2,900,000,000 is earmarked for public and Indian housing 
operating subsidies, as proposed by the Senate; $2,500,000,000 
is earmarked for modernization, as proposed by the Senate; and 
$350,000,000 is earmarked for LIHPRHA, instead of $500,000,000 
as proposed by the Senate.
      The conferees agree with the House report language 
directing HUD to create performance targets for the use of 
funds made available for technical assistance in the 
modernization earmark and to report on whether these targets 
are achieved.
      The preservation program has been redesigned to reduce 
excessive program costs in the form of equity take-outs, 
renovations and transactions costs. To protect residents from 
possible displacement in the event an owner prepays the unpaid 
principal balance remaining on the mortgage, $100,000,000 is 
earmarked for tenant-based assistance. In addition, $75,000,000 
is provided to fund projects not being sold to priority 
purchasers that have approved plans of action. Finally, 
$10,000,000 is provided to reimburse owners of eligible 
properties where plans of action were submitted prior to the 
effective date of this Act, but were not executed because of 
insufficient funds.
      To assist the Congress in making a determination of 
whether this program is the most cost-effective way to provide 
affordable housing opportunities to low-income families, the 
conferees request the General Accounting Office (GAO) to 
evaluate and review the program. As part of this evaluation, 
GAO should review the level of compensation to the owner 
relative to the actual value of the property, the level of 
rehabilitation grants relative to the rehabilitation needs of 
the property and the problems of administering the program. 
Finally, because some of the issues are similar, GAO should 
evaluate whether there are lessons to be learned from the 
experience with the preservation program that can be applied to 
portfolio reengineering.
      Two accounts have been retained separately because of 
their unique characteristics: the revitalization of severely 
distressed public housing account and the drug elimination 
grants for low income housing account, as proposed by the 
House. In these accounts, $550,000,000 is appropriated to the 
severely distressed program, and $290,000,000 is appropriated 
to the drug elimination grants program to assist public housing 
authorities to fight drug problems in their communities.
      Language is inserted to ensure that HOPE VI funds are 
used for the purpose of revitalizing severely distressed public 
housing facilities. HUD attempted to provide funds to 
predetermined housing authorities to settle litigation 
unconnected with the HOPE VI program. Furthermore, preferential 
scoring was given to housing projects that included proposals 
for an unauthorized program. HUD is directed to end such 
practices immediately. Finally, in assessing public housing 
demolition/disposition applications, the conferees urge HUD to 
review closely the local housing needs of a community, 
including shortages of affordable housing for low-income 
families, the size of the waiting list for the public housing, 
as well as the size of the local homeless population.

                   COMMUNITY PLANNING AND DEVELOPMENT

                community development block grants fund

      Amendment No. 15: Deletes the language proposed by the 
House and stricken by the Senate to delay the availability of 
$300,000,000 of this appropriation until the last day of the 
fiscal year.
      Consistent with Congressional efforts to devolve greater 
authority to lower levels of government and to empower citizens 
to develop self-help solutions within their respective 
communities and neighborhoods, the conferees recommend that HUD 
encourage States and entitlement communities to support 
neighborhood revitalization activities sponsored or 
administered by small nonprofit community-based entities. The 
John Heinz Neighborhood Development Program is a model that 
states could follow.
      Amendment No. 16: Earmarks $67,000,000 for grants to 
Indian tribes instead of $61,400,000 as proposed by the House, 
and $68,500,000 as proposed by the Senate.
      Amendment No. 17: Earmarks $1,500,000 for a grant to the 
National American Indian Housing Council (NAIHC) as proposed by 
the Senate, instead of $1,000,000 as proposed by the House.
      Amendment No. 18: Earmarks $60,000,000 for grants 
promoting self-sufficiency for residents of public housing, 
which is $10,000,000 above the level proposed by the Senate. 
Earmarks up to $5,000,000 for the Tenant Opportunity Program 
and up to $5,000,000 for the Moving-to-Work demonstration 
created in the fiscal year 1996 appropriations measure.
      Funds for the Tenant Opportunity Program shall not be 
available for any purpose until the Secretary certifies that 
the program is working effectively. The conferees are concerned 
about reports of wasteful spending practices and allegedly 
fraudulent activities within the program, practices which put 
the program at risk of elimination altogether.
      Amendment No. 19: Earmarks $20,000,000 for public housing 
authorities and other federally-assisted low income housing 
programs to reimburse law enforcement entities and to augment 
security services, as proposed by the Senate.
      Amendment No. 20: Earmarks $30,000,000 for the Youthbuild 
program, instead of $20,000,000 as proposed by the House and 
$40,000,000 as proposed by the Senate.
      Amendment No. 21: Inserts a technical correction to the 
language as proposed by the Senate.

                     FEDERAL HOUSING ADMINISTRATION

             fha-mutual mortgage insurance program account

      Amendment No. 22: Transfers $350,595,000 from FHA-mutual 
mortgage insurance guaranteed loan receipts for administrative 
expenses as proposed by the Senate, instead of $341,595,000 as 
proposed by the House.
      Amendment No. 23: Limits use of transferred funds to 
$343,483,000 for departmental salaries and expenses as proposed 
by the Senate, instead of $334,483,000 as proposed by the 
House.

              fha-general and special risk program account

      Amendment No. 24: Transfers $207,470,000 from the FHA-
General and Special Risk Program account for administrative 
expenses to carry out the guaranteed and direct loan program as 
proposed by the Senate, instead of $202,470,000, as proposed by 
the House. Of this transfer, $203,299,000 is for departmental 
salaries and expenses as proposed by the Senate instead of 
$198,299,000, as proposed by the House.
      Amendment No. 25: Inserts a technical correction to the 
language as proposed by the Senate.

                GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

             guarantees of mortgage-backed securities loan

                       guarantee program account

      Amendment No. 26: Transfers $9,383,000 from receipts 
generated by the GNMA-guarantees of mortgage-backed securities 
for administrative expenses necessary to carry out the 
guaranteed mortgage-backed securities program as proposed by 
the Senate, instead of $9,101,000 as proposed by the House.
      Amendment No. 27: Limits use of transfer of $9,383,000 
for salaries and expenses, as proposed by the Senate, instead 
of $9,101,000 as proposed by the House.
      Amendment No. 28: Inserts a technical correction to the 
language as proposed by the Senate.

                     MANAGEMENT AND ADMINISTRATION

                         salaries and expenses

      Amendment No. 29: Appropriates $976,840,000 for 
departmental salaries and expenses, as proposed by the Senate, 
instead of $919,147,000 as proposed by the House. The agreement 
also provides that $15,000,000 is contingent on HUD providing 
to the House and Senate Appropriations Committees a strategic 
plan that results in reducing the full-time equivalent (FTE) 
employment level to 7,500 in fiscal year 2000. Once the plan is 
reviewed, the additional funds will be made available to 
provide retraining programs for employees, to pay for related 
costs of personnel making permanent changes in station, and 
other costs related to downsizing the Department. During this 
process, it will be extremely important for senior management 
staff to engage in open discussions with the unions and career 
HUD employees.
      Amendment No. 30: Transfers $546,782,000 from various 
funds of the Federal Housing Administration for salaries and 
expenses as proposed by the Senate, instead of $532,782,000 as 
proposed by the House.
      Amendment No. 31: Transfers $9,383,000 from funds of GNMA 
for salaries and expenses as proposed by the Senate, instead of 
$9,101,000 as proposed by the House.

                      office of inspector general

      Amendment No. 32: Inserts a technical correction to the 
language as proposed by the Senate.

             office of federal housing enterprise oversight

      Amendment No. 33: Appropriates $15,500,000 for the Office 
of Federal Housing Enterprise Oversight (OFHEO) instead of 
$14,895,000 as proposed by the House, and $15,751,000 as 
proposed by the Senate.
      The conferees are concerned that this office is a growing 
bureaucracy which has not met its responsibilities to develop 
and implement financial safety and soundness requirements for 
the two housing government sponsored enterprises (GSEs): the 
Federal Home Loan Mortgage Corporation (FHLMC) and the Federal 
National Mortgage Association (FNMA).
      Additonally, the conference agreement requires the 
General Accounting Office (GAO) to audit the operations of 
OFHEO relating to staff organization, expertise, capacity and 
contracting to ensure that resources are adequate and are being 
used appropriately for developing and implementing financial 
safety and soundness requirements for FNMA and FHLMC, as 
required under the Housing and Community Development Act of 
1992.
      The matter is addressed in Amendment No. 110.

                       administrative provisions

      Amendment No. 34: Deletes language proposed by the House 
and stricken by the Senate regarding minimum rents, and inserts 
language proposed by the Senate to extend administrative 
provisions from the fiscal year 1996 VA/HUD Appropriations Act, 
amended to include modified House language regarding minimum 
rents. The conference agreement inserts language to allow 
minimum rents of up to $50 for public housing and section 8 
housing. The remaining extensions of authority, as proposed by 
the Senate, are included in the provision including: suspension 
of the one-for-one replacement requirement, reforms to the 
public housing modernization program, rent reforms, the repeal 
of federal preferences, suspension of section 8(t) of the 
United States Housing Act of 1937, the ``take one, take all'' 
requirement, suspension of certain notice requirements for 
owners who participate in the certificate and voucher programs, 
suspension of section 8(d)(1)(B), the ``endless lease'' 
requirement and retaining fair market rents at the 40th 
percentile of modest cost existing housing instead of the 45th 
percentile calculation.
      Additionally, the conference agreement modifies the 
manner in which administrative fees for tenant-based assistance 
are calculated, delays the reissuance of section 8 vouchers and 
certificates by three months, reduces annual adjustment factors 
by 1% for units where tenants do not move and limits high cost 
units. Finally, the conference agreement extends for one year 
those reforms made to the single family mortgage assignment 
program and reforms made to the disposition process of 
multifamily properties and mortgages owned or held by the 
Secretary.
      Amendment No. 35: Amends language proposed by the Senate 
to provide up to $20,000,000 of unobligated balances from the 
Nehemiah Housing Opportunity Grant program for activities to 
promote and implement homeownership opportunities.
      Amendment No. 36: Inserts language proposed by the Senate 
to cancel the indebtedness of the Greene County Rural Health 
Center.
      Amendment No. 37: Inserts language proposed by the Senate 
to transfer all uncommitted balances of excess rental charges 
to the flexible subsidy fund.
      Amendment No. 38: Inserts language proposed by the Senate 
which reduces by $2,000,000 all uncommitted balances of 
authorizations under section 236 of the National Housing Act.
      Amendment No. 39: Inserts language proposed by the Senate 
which allows funds withheld by HUD from the District of 
Columbia's Department of Public and Assisted Housing (DPAH) to 
be used by DPAH's successor agency, the District of Columbia 
Housing Authority (DCHA), unless that agency is deemed troubled 
at the end of fiscal year 1998.
      Amendment No. 40: Inserts language proposed by the Senate 
regarding financial adjustment factors, amended to appropriate 
$464,442 for the Utah Housing Finance Agency to pay for amounts 
lost to the agency in bond refinancings.
      Amendment No. 41: Amends language proposed by the Senate 
regarding section 8 contract renewal authority repealing the 
section 8 Multifamily Housing Portfolio Restructuring 
Demonstration created in the fiscal year 1996 VA/HUD 
Appropriations Act, Public Law 104-134. The revised 
demonstration does not nullify any agreements or proposals that 
have been considered under the 1996 demonstration. Furthermore, 
to the extent those participants have requested tenant-based 
contracts, those units should not be counted under the cap 
included in this revised demonstration.
      The revised demonstration is structured so that several 
distinct processes can be set up and their results evaluated. 
Stringent reporting requirements have been added so Congress 
will know how the demonstration is proceeding.
      Given the uncertainty about how portfolio reengineering 
will work, the conferees believe it is critical to be able to 
evaluate the framework immediately. Furthermore, the 
information gathered through the demonstration will be valuable 
to the authorizing committees as they craft legislation to: (1) 
decrease the escalating costs of section 8 rental assistance; 
(2) prevent mortgage defaults; (3) protect against resident 
dislocation; and (4) resolve associated tax issues.
      Under the legislation, HUD is required to renew for up to 
one year all FHA-insured mortgages with section 8 contracts 
with rents at or below 120 percent of the fair market rent for 
an area. This safe-harbor provides HUD with the administrative 
ability to focus on those FHA-insured multifamily housing 
projects with significantly oversubsidized rents. Projects with 
contract rents above 120 percent of fair market rent may have 
their section 8 contracts renewed at 120 percent of the fair 
market rent, enter into a mortgage workout, or participate in 
the demonstration.
      HUD is provided with flexible tools, including 
reinsurance authority, the use of project-based and tenant-
based assistance, authority to forgive debt, budget-based 
rents, the use of bifurcated mortgages, partial and full 
payment of claim authority, credit enhancements, the ability to 
enter into risk-sharing arrangements and the sale of benefits 
and burdens of FHA multifamily mortgage insurance.
      HUD is authorized to enter into contracts with qualified 
state housing finance agencies, local housing agencies, and 
nonprofits as a partner or as a designee to administer the 
program for HUD. HUD may contract and subcontract with private-
sector entities who have the expertise and capacity necessary 
to ensure that mortgage restructurings are handled to the best 
advantage of the Federal government, the development, the 
community and the residents.
      The importance of carrying out this demonstration 
effectively cannot be overstated in light of the families the 
projects serve. Many of the properties are home to elderly and 
disabled families, and may be located in high-cost rental 
markets with little available, affordable housing or are in 
rural areas with scarce housing resources. In most cases, the 
projects are oversubsidized and are in danger of defaulting on 
their mortgage if the section 8 payments are reduced to market 
levels, raising concerns of owner disinvestment, resident 
displacement, and government ownership, management and 
disposition of the housing inventory. To achieve deficit 
reduction and a balance budget, continuing the existing subsidy 
arrangements is simply not an option.
      Amendment No. 42: Inserts language proposed by the Senate 
to waive section 282 of the Cranston-Gonzalez National 
Affordable Housing Act as it applies to Hawaiian Home Lands.
      Amendment No. 43: Deletes language proposed by the Senate 
allowing HUD to establish a buyout plan to downsize the 
Department and inserts language authorizing the Secretary to 
transfer from section 8 recaptures, up to $50,000,000 to be 
used to fund amendments for LIHPRHA contracts, and up to 
$25,000,000 for housing opportunities for persons with AIDs 
(HOPWA). The conferees intend that the recaptured funds shall 
be used first for LIHPRHA and remaining funds for HOPWA.
      Amendment No. 44: Inserts language proposed by the Senate 
to require HUD to maintain public notice and comment 
rulemaking.
      Amendment No. 45: Inserts language proposed by the Senate 
to change the definition of ``urban county'' to include those 
counties that have a population of at least 210,000 persons, 
that have experienced a population decrease and have had a 100-
year old federal naval installation closed by the Base Closure 
and Realignment Commission.
      Amendment No. 46: Inserts language proposed by the Senate 
to promote fair housing and free speech.
      Amendment No. 47: Deletes language proposed by the Senate 
to limit HUD from insuring any section 220 projects under the 
National Housing Act for more than $250,000,000 without sending 
a justification to the Congress and inserts technical 
provisions to: 1) transition to the new account structure; 2) 
coordinate tax credits and section 8 assistance allocated to 
projects in New Brunswick, New Jersey; 3) extend the authority 
of the City of Los Angeles to use up to 25% of its CDBG 
allocation for public services; 4) determine rent level in the 
section 236 program; and 5) revise the Fair Housing Initiatives 
Program (FHIP) to clarify that funds shall not be used to lobby 
the Congress or executive branches of government.

TITLE III--INDEPENDENT AGENCIES--CORPORATION FOR NATIONAL AND COMMUNITY 
                                SERVICE

       National and Community Service Programs Operating Expenses

      Amendment No. 48: Appropriates $400,500,000 for national 
and community service programs operating expenses as proposed 
by the Senate, instead of $365,000,000 as proposed by the 
House. The House, in section 427 of the general provisions, 
reduced this appropriation and the appropriation for the Office 
of Inspector General to zero. The conference agreement deletes 
the part of that provision which eliminates funding for the 
national service programs.
      Amendment No. 49: Limits funds for educational awards to 
not more than $59,000,000 as proposed by the Senate, instead of 
to not more than $40,000,000 as proposed by the House.
      Amendment No. 50: Limits funds for grants under the 
National Service Trust, including the AmeriCorps program, to 
not more than $215,000,000 as proposed by the Senate, instead 
of $201,000,000 as proposed by the House.
      Amendment No. 51: Inserts language proposed by the Senate 
limiting funds for national direct programs to not more than 
$40,000,000.
      Amendment No. 52: Limits funds for the Points of Light 
Foundation to not more than $5,500,000 as proposed by the 
Senate, instead of $5,000,000 as proposed by the House.
      Amendment No. 53: Limits funds for the Civilian Community 
Corps to not more than $18,000,000 as proposed by the Senate, 
instead of $17,500,000 as proposed by the House.
      Amendment No. 54: Limits funds for the school-based and 
community-based service-learning programs to not more than 
$43,000,000 as proposed by the Senate, instead of $41,500,000 
as proposed by the House.

                       Court of Veterans Appeals

      Amendment No. 55: Deletes language proposed by the House 
and stricken by the Senate increasing the salaries and expenses 
appropriation by $1,411,000.
      Amendment No. 56: Earmarks $700,000 of the salaries and 
expenses appropraiton for the pro bono representation program 
as proposed by the Senate, instead of $634,000 as proposed by 
the House.

                    Environmental Protection Agency

                         science and technology

      Amendment No. 57: Appropriates $542,000,000 for science 
and technology activities instead of $538,500,000 as proposed 
by the House and $545,000,000 as proposed by the Senate.
      The conferees are in agreement with the following changes 
to the budget request:
      +$2,150,000 for the Mickey Leland National Urban Air 
Toxics Research Center.
      +$2,500,000 for the American Water Works Association 
Research Foundation.
      +$700,000 for continued study of livestock and 
agricultural pollution abatement.
      +$750,000 for oil spill remediation research at the 
Louisiana Environmental Research Center at McNeese State 
University.
      +$1,100,000 to continue the PM-10 study in the San 
Joaquin Valley, California.
      +$750,000 for continuation of the Resource and 
Agriculture Policy Systems Program at Iowa State University.
      +$1,500,000 for EPSCoR.
      +$1,000,000 for a study of the salinity of the Salton Sea 
by the University of Redlands.
      +$1,200,000 for the lower Mississippi River interagency 
cancer study (LMRICS).
      +$750,000 for research on environmental lung disease 
through the National Jewish Center for Immunology and 
Respiratory Medicine.
      +$1,000,000 for the Center for Air Toxics Metals.
      +$300,000 for the clean air status and trends network 
(CASTNet) monitoring stations in New England.
      +$1,500,000 for the Water Environmental Research 
Foundation.
      +$1,000,000 for research on the health effects of 
arsenic.
      +$5,000,000 for the Mine Waste Technology Program.
      +$250,000 for research and development needs in onsite 
and alternative water and wastewater systems through the 
National Decentralized Water Resources Capacity Development 
Project.
      -$17,600,000 from the Environmental Technology 
Initiative, leaving $10,000,000 for technology verification 
activities.
      -$10,000,000 from the increase proposed for the climate 
change action plan.
      -$2,200,000 from the EMAP program.
      -$7,000,000 from academic graduate fellowships.
      -$20,398,000 as a general reduction. In determining the 
level of general reduction under this account, the conferees 
note that directed reductions were not taken for enforcement 
and for hiring additional employees. Rather, the conferees 
agree that this general reduction be taken on an equitable 
basis from all intramural (salaries and expenses) and 
extramural (contracts and grants) activities at the Agency, 
including management and support, research, enforcement, 
regulatory activities and technical assistance.
      The conferees encourage EPA to work with institutions of 
higher learning to establish and operate small public water 
system technology assistance centers, the need for which was 
recognized in the recently enacted Safe Drinking Water Act 
Amendments.
      The conferees support the continuation of the Superfund 
Innovative Technology Evaluation (SITE) program, which has been 
moved to the science and technology account, at the budget 
request level. The program is expected to focus on the 
validation and verification of the performance of innovative 
technologies developed by the private sector that will serve to 
reduce remediation times and costs.
      Within 90 days of enactment of this Act, the conferees 
direct EPA to enter into an agreement with the National Academy 
of Sciences (NAS) to conduct a comprehensive two-year study of 
the human health effects of synthetic and naturally occurring 
substances that may have an effect in humans that is similar to 
an effect produced by the hormone estrogen, and such other 
hormone related effects as EPA may designate. The conferees 
expect this study will examine the occurrence, toxicological 
data, mechanisms of action, and relative risk of synthetic and 
naturally occurring hormone related toxicants in the causation 
of human health problems. Because of the recent enactment of 
provisions mandating the development of screening programs for 
these substances, the study should also address issues central 
to the development of a cost-effective screening program, 
including how to select and prioritize chemicals for testing, 
which test or tests to include in a screening program, and the 
most appropriate way to use the resulting information in 
developing risk estimates. If the EPA has already entered into 
an agreement or agreements with the NAS with regard to hormone 
related toxicants, the EPA is expected to merge all such 
studies into one report. The conferees expect such study to be 
completed within two years and ask the NAS to transmit the 
subsequent report to the Committees on Appropriations as well 
as to the EPA. Prior to release of the study and before 
proposing any regulations or testing programs that address 
estrogen or hormone related characteristics, the Agency is 
directed to thoroughly consult with the NAS and to consider the 
findings and recommendations of this study. The conferees 
expect that any written comments submitted by the NAS on a 
proposed regulation, as well as any EPA response to such 
comments, will be published as part of any final EPA rulemaking 
on this matter.
      Finally, the conferees agree that of the $35,000,000 
transferred to science and technology from hazardous substance 
superfund, $2,500,000 is for the Gulf Coast Hazardous Substance 
Research Center.

                 ENVIRONMENTAL PROGRAMS AND MANAGEMENT

      Amendment No. 58: Appropriates $1,710,000,000 for 
environmental programs and management instead of $1,704,500,000 
as proposed by the House and $1,713,000,000 as proposed by the 
Senate.
      The conferees are in agreement with the following changes 
to the budget request:
      +$2,500,000 for environmental justice activities.
      +$4,550,000 for rural water technical assistance 
activities in addition to the levels provided in the budget 
request, including $2,100,000 for activities of the National 
Rural Water Association; $900,000 for RCAPs; $150,000 for the 
GWPC; $350,000 for the Small Flows Clearinghouse; $1,000,000 
for the National Environmental Training Center; and $50,000 to 
establish a regional waste water training center at Vermont 
Technical College.
      +$1,000,000 to continue the onsite wastewater treatment 
demonstration program through the Small Flows Clearinghouse.
      +$2,500,000 for the Southwest Center for Environmental 
Research and Policy.
      +$700,000 to enable the Long Island Sound Office to 
continue the implementation of the Sound's long-term 
conservation and management plan.
      +$250,000 for a study of EPA's Mobile Source Emissions 
Factor Model to be conducted by the National Academy of 
Sciences.
      +$500,000 for ongoing programs of the Canaan Valley 
Institute.
      +$900,000 for continuing work on the water quality 
management plan for Skaneateles, Owasco, and Otisco Lake 
watersheds.
      +$300,000 for continuing work on the Cortland County, New 
York aquifer protection plan.
      +$1,500,000 for the National Institute for Environmental 
Renewal for development of an integrated environmental 
monitoring and data management system.
      +$3,000,000 for a sludge-to-oil-reactor (STORS) and 
nitrogen removal system demonstration project in the San 
Bernardino Valley Municipal Water District.
      +$1,250,000 for the South Shore Tahoe Transportation 
demonstration.
      +$3,500,000 for the Lake Hollingsworth lake dredging 
technology demonstration, Lakeland, Florida.
      +$5,000,000 for the West Palm Beach, Florida potable 
water reuse demonstration project.
      +$290,000 for an analysis of the perennial yield of good 
quality groundwater in the Wadsworth Sub-basin for the town of 
Fernley, Nevada.
      +$2,000,000 for continuing work on the New York/New 
Jersey Dredge Decontamination pilot study authorized by section 
405 of the Water Resources Development Act of 1992.
      +$900,000 for continuation of the Sacramento River Toxic 
Pollutant Control program, to be cost shared.
      +$500,000 for the small water system cooperative 
initiative at Montana State University.
      +$320,000 for the regional environmental finance centers.
      +$300,000 for recycling and reuse technology development 
at the Iowa Waste Reduction Center.
      +$1,000,000 for the non-profit For the Sake of the Salmon 
to fund watershed coordinators for salmon protection in the 
Pacific Northwest.
      +$2,000,000 to continue the leaking above ground storage 
tank demonstration in the State of Alaska.
      +$250,000 for the final year of EPA's demonstration 
program on the Potomac River's north branch of an acid mine 
drainage remediation project.
      +$300,000 to continue the evaluation of ground water 
quality in Missouri.
      +$1,000,000 for a Missouri watershed initiative 
cooperative demonstration project with the Food and 
Agricultural Policy Research Institute to link economic and 
environmental data with ambient water quality.
      +$750,000 for the Lake Champlain management plan.
      +$2,000,000 to demonstrate the latest technology in 
utilizing reclaimed water from a wastewater treatment facility 
in Silverton, Oregon.
      +$500,000 to continue the model coordinated tribal water 
quality program in Washington State.
      +$400,000 to continue the Maui algal bloom project.
      +$400,000 to continue support of the Ala Wai Canal water 
improvement demonstration project.
      +$700,000 for the solar aquatic waste water treatment 
demonstration project in Vermont.
      +$850,000 for the Nebraska municipal governments mandates 
initiative.
      +$525,000 for an early childhood initiative in 
environmental education.
      +$1,000,000 for a Federal contribution to the New York 
City watershed protection program.
      +$250,000 for the Nature Conservancy of Alaska for 
protection of the Kenai River watershed.
      +$1,500,000 for wastewater training grants under section 
104(g) of the Clean Water Act.
      +$200,000 to continue the cleanup of Five Island Lake.
      +$500,000 for the Alabama Department of Environmental 
Management to conduct a study on innovations in sewer system 
development and operation.
      +$100,000 for a demonstration project on the use of 
oysters to improve water quality in Chesapeake Bay tributaries.
      +$1,000,000 for a small business compliance demonstration 
project pursuant to section 215 of the Small Business 
Regulatory Enforcement Fairness Act of 1996.
      +$1,000,000 for a grant program to assist established 
conservancies to develop or complete stream restoration or 
watershed management plans as approved by CALFED consistent 
with the Bay-Delta Category III Program. The conferees expect 
that the Agency's fiscal year 1998 budget estimates will 
identify in detail the funds and programs dedicated to 
implementation of the Bay-Delta Accord, and, in addition, 
expect that the Agency's 1997 Operating Plan will identify the 
funding amounts provided all programs and projects which will 
serve to advance or are consistent with the implementation of 
the Accord.
      +$1,000,000 for the Michigan Biotechnology Institute's 
pilot program for commercializing environmental technologies of 
national strategic benefit.
      +$200,000 for the Alabama Water and Wastewater Institute 
to train and upgrade waste treatment works operators and 
maintenance personnel as required by the Clean Water Act.
      -$5,000,000 from the new sustainable development 
challenge grant program.
      -$43,500,000 from the ETI program. The conferees agree 
that the design for the environment (DfE) initiative should not 
be treated as part of the ETI program and is thus not included 
in this reduction.
      -$48,000,000 from climate change action plan programs. 
The conferees note that these programs will remain funded at 
nearly $68,000,000, which is similar to that provided in fiscal 
year 1996.
      -$500,000 from the Gulf of Mexico program.
      -$2,000,000 from EPA's air programs.
      -$1,000,000 from low priority programs specifically 
related to NAFTA.
      -$2,500,000 from non-specific regulatory programs as 
outlined in the budget request.
      -$2,000,000 from the National Service Initiative.
      -$7,000,000 from the Montreal Protocol facilitation fund, 
thus level-funding this program at the 1996 level.
      -$1,000,000 from the GLOBE program.
      -$121,014,000 as a general reduction. In determining the 
level of general reduction under this account, the conferees 
note that directed reductions were not taken for enforcement, 
management and support, or for new hires. Rather, the conferees 
agree that this general reduction be taken on an equitable 
basis from all intramural (salaries and expenses) and 
extramural (contracts and grants) activities of the Agency, 
including management and support, enforcement, regulatory 
activities and technical assistance.
      Of the amounts contained herein, the conferees have 
provided up to $500,000 to continue efforts to ensure smooth 
implementation of notification of lead-based paint hazards 
during real estate transactions, direct that no less than 
$300,000 be allocated to the Northeast States for Coordinated 
Air Use Management to provide technical assistance and policy 
guidance to its member States, and expect that the National 
Environmental Education and Training Foundation will be funded 
at the same ratio as it was during fiscal year 1996. Within the 
amount provided for the Office of Small and Disadvantaged 
Business Utilization, the Agency is encouraged to make training 
grants to small, minority and women-owned businesses for 
hazardous waste cleanup; for lead-based paint abatement; for 
radon activities; and for underground storage tank cleanup.
      The conferees note that the implementation of new 
legislation on drinking water and food safety likely will 
require some redirection of EPA resources. Given that these 
bills were only recently enacted, the Committees on 
Appropriations were unable to consider associated funding 
requirements. The conferees therefore expect EPA to address any 
funding requirements for implementation of these important 
statutes, such as drinking water health effects research, in 
the Agency's operating plan.
      The conferees recognize that leaking aboveground tanks 
storing petroleum or petroleum products pose complex challenges 
for communities, and can threaten groundwater, the most 
critical source of drinking water. The conferees are concerned 
that EPA has yet to take substantive action on many 
recommendations made by the General Accounting Office in two 
reports. The conferees strongly urge EPA to address gaps in the 
program identified in the GAO reports, including secondary 
containment, overfill prevention, testing, inspection, 
compatibility, installation, corrosion protection, and 
structural integrity of petroleum tanks in excess of 42,000 
gallons. EPA is further urged to consider ways of streamlining 
the administration of the aboveground storage tank program.
      The conferees direct the Agency to report to the 
Committees on Appropriations on the number of chemical waste 
landfills that have received waivers of the siting requirements 
under the Toxic Substances Control Act (TSCA), pursuant to 40 
CFR 761.75(c)(4), and describe in detail the process by which 
requests for such waivers are considered and approved. Further, 
the conferees encourage the Agency to respond thoroughly to all 
comments filed by local governments and knowledgeable parties 
on the TSCA permit application for PCB-waste disposal in Wayne 
County, Michigan, prior to any final action on that 
application.
      The conferees express their support for EPA's continued 
funding to allow the Sokaogon Chippewa Community to assess the 
environmental impacts of a proposed sulfide mine project. The 
conferees expect the EPA to work within existing funds to 
assist the Sokaogon Chippewa Community in their efforts to 
contribute adequate and up-to-date information to federal 
agencies reviewing the mine proposal.
      The conferees are aware that the EPA is under court order 
to make a decision on whether to change the current National 
Ambient Air Quality Standard for Particulates. The court has 
ordered the EPA to issue a proposed decision by November 29, 
1996, and a final decision by June 28, 1997. The conferees note 
that at present, there appears to be insufficient data 
available for the Agency to decide what changes, if any, should 
be made to the current standard. In particular, some scientists 
have concluded that current data do not adequately demonstrate 
causality or provide sufficient information to establish a 
specific new control strategy. Moreover, the EPA's Clean Air 
Scientific Advisory Committee is meeting soon to begin to 
design its recommended particulate research program for the 
Agency. The conferees further note that, at EPA's request, 
$18,800,000 has been included in the conference agreement for 
research on particulate matter. Given that monitoring and 
research into causality have only just begun, the conferees 
believe it may be premature for the Agency to promulgate new 
particulate standards at this time. The conferees encourage EPA 
to consider a ``no change'' option as part of its proposed 
decision due by November 29, 1996, and for its final decision 
due in June, 1997. The conferees expect to continue to support 
the EPA's research and monitoring programs to develop the 
necessary data as quickly as possible.
      The conferees are concerned regarding the practical 
utility of requiring the submittal of more information from the 
regulated community associated with EPA's planned expansion of 
the Toxics Release Inventory (TRI). The conferees understand 
that the paperwork burden on businesses and state and local 
government associated with EPA requirements has increased over 
the past year, despite an initiative to reduce paperwork. 
Further, EPA has neither an integrated program to manage 
information nor an inventory of current reporting requirements 
on the regulated community. Despite new information-gathering 
initiatives, EPA has proposed no improvement in the collection, 
analysis, and communication of information to the public on its 
own priorities, performance, or the effectiveness of such 
initiatives in improving the public's ``right-to-know.'' 
Moreover, EPA has not sufficiently considered options to 
maximize the use of information already reported by facilities 
and available to citizens locally under the federal Emergency 
Planning and Community Right-to-Know Act (EPCRA) in its efforts 
to expand TRI to include more data on chemical uses.
      The conferees thus direct a study by the General 
Accounting Office to:
      (1) Identify options for improving the right-to-know 
program to more effectively address community concerns 
regarding risks associated with chemicals and to communicate 
risks to the public;
      (2) Evaluate EPA information management practices, their 
utility in implementing the Government Performance and Results 
Act (GPRA), and their overall effectiveness in reducing 
paperwork requirements.
      (3) Recommend ways to increase accountability among 
federal agencies in complying with existing TRI reporting 
requirements.
      (4) Address the effectiveness of current mechanisms 
required under EPCRA at the local level in providing existing 
information on chemicals to the public; and
      (5) Assess whether existing and new information 
requirements are designed to support the Agency's planning, 
budgeting, and accountability system that will implement GPRA.

                        buildings and facilities

      Amendment No. 59: Appropriates $87,220,000 for buildings 
and facilities instead of $107,220,000 as proposed by the House 
and $27,220,000 as proposed by the Senate.
      Amendment No. 60: Inserts language proposed by the House 
and stricken by the Senate which authorizes construction of a 
consolidated research facility at Research Triangle Park, North 
Carolina. Such authorization provides for construction of this 
new facility through incrementally funded multi-year contracts 
at a total maximum cost of $232,000,000, permits obligation of 
funds provided in this Act, and prohibits EPA from obligating 
monies in excess of those amounts made available in 
Appropriations Acts.
      The conferees note that of the $87,220,000, $27,220,000 
is available for necessary repair and maintenance costs at all 
EPA facilities, as well as renovation and construction costs 
for EPA's new headquarters facilities. The remaining 
$60,000,000, added to the $50,000,000 appropriated in fiscal 
year 1996, provides nearly one-half of the total construction 
costs of this important and necessary new research facility.

                     hazardous substance superfund

      Amendment No. 61: Appropriates $1,394,245,000 for 
hazardous substance superfund as proposed by the Senate instead 
of $2,201,200,000 as proposed by the House, and inserts 
language proposed by the Senate which provides that 
$100,000,000 of the appropriated amount shall not become 
available until September 1, 1997.
      Included in the appropriated level are the following 
amounts:
      $906,238,000 for response action/cleanup activities, 
including $36,754,000, the budget request, for brownfields 
activities.
      $171,194,000, the budget request, for enforcement 
activities.
      $124,874,000 for management and support, including 
$11,000,000 to be transferred to the Office of Inspector 
General.
      $64,000,000 for the Agency for Toxic Substances and 
Disease Registry (ATSDR). Within this amount, the conferees 
direct that up to $4,000,000 be used for minority health 
professions, no less than the fiscal year 1996 level be made 
available for continuation of the health effects study on the 
consumption of Great Lakes fish, and $900,000 be made available 
for continuation of the cancer cluster study in the Toms River 
area of New Jersey. The conferees note in this regard that some 
$300,000 has previously been expended by ATSDR for this study, 
thus the $900,000 made available in this action will bring to 
$1,200,000 the amount so far available for this important 
activity.
      $53,527,000 for the National Institute for Environmental 
Health Sciences (NIEHS), including $32,527,000 for research 
activities and $21,000,000 for worker training.
      $30,000,000, the fiscal year 1996 level, for transfer to 
the Department of Justice.
      $9,412,000, the budget request, for reimbursable 
activities of other Federal agencies, including the U.S. Coast 
Guard, NOAA, FEMA, OSHA and the Department of the Interior.
      $35,000,000 to be transferred to the science and 
technology account for necessary and appropriate research 
activities. Of this amount, the conferees note that $2,500,000 
is available for the Gulf Coast Hazardous Substance Research 
Center and direct that other such research centers be funded at 
an appropriate level at least equal to the funding level 
provided in fiscal year 1996.
      The conferees expect the Agency to quickly act on the 
direction contained in the House report regarding an ATSDR 
study in Caldwell County, North Carolina. The conferees also 
direct that all fiscal year 1996 carryover funds be applied to 
response action/cleanup activities.
      The conferees note that on June 4, 1996, EPA announced an 
administrative reform to allow interest to accrue on site-
specific special accounts in which Superfund settlement funds 
dedicated to specific site cleanups are held. Under this new 
policy, accrued interest would directly benefit the Superfund 
site and the community where the site is located, and prevent 
the funds which parties pay in settlement from losing value 
over time. The conferees applaud the Agency's decision to move 
forward with this administrative reform which can control 
remedy costs, promote cost-effectiveness, decrease litigation, 
increase fairness in the enforcement process, and reduce 
transaction costs in the Superfund program. The conferees urge 
the EPA, as well as the Department of Justice, Office of 
Management and Budget, and the Department of the Treasury, to 
move forward to implement this administrative improvement as 
soon as possible.
      Finally, the conferees are concerned about the lack of 
progress at Pepe Field Superfund Site, Boonton, New Jersey. EPA 
is directed to finalize the remedial design immediately and to 
proceed with the construction remedy.
      Amendment No. 62: Provides $1,144,245,000 of the 
appropriated amount from the superfund trust fund as proposed 
by the Senate instead of $1,951,200,000 as proposed by the 
House.
      Amendment No. 63: Provides $64,000,000 of the 
appropriated amount for the Agency for Toxic Substances and 
Disease Registry (ATSDR) as proposed by the Senate instead of 
$59,000,000 for ATSDR as proposed by the House.
      Amendment No. 64: Deletes language proposed by the House 
and stricken by the Senate which provided that $861,000,000 of 
the appropriated level be available for obligation only upon 
enactment of future appropriations legislation that 
specifically makes these funds available for obligation.
      Amendment No. 65: Deletes language proposed by the House 
and stricken by the Senate which provided that $1,200,000 of 
the appropriated amount be made available for the ATSDR to 
conduct a cancer cluster study in the Toms River area of the 
State of New Jersey. The conferees have provided an additional 
$900,000 for this study included in the appropriated amount for 
the ATSDR.
      Amendment No. 66: Appropriates $60,000,000 for the 
leaking underground storage tank trust fund as proposed by the 
Senate instead of $66,500,000 as proposed by the House.

                   state and tribal assistance grants

      Amendment No. 67: Appropriates $2,875,207,000 for state 
and tribal assistance grants instead of $2,768,207,000 as 
proposed by the House and $2,815,207,000 as proposed by the 
Senate.
      From within the appropriated level, the conferees agree 
to the following amounts:
      $625,000,000 for clean water State revolving fund 
capitalization grants.
      $1,275,000,000 for drinking water State revolving fund 
capitalization grants.
      $100,000,000 for architectural, engineering, planning, 
design, construction and related activities in connection with 
the construction of high priority water and wastewater 
facilities in the area of the United States-Mexico border.
      $50,000,000 for cost-shared grants to the State of Texas 
to improve wastewater treatment for colonias.
      $15,000,000 for cost-shared grants to the State of Alaska 
to address water supply and wastewater infrastructure needs of 
rural and Alaska Native Villages.
      $136,000,000 for special needs wastewater treatment and 
groundwater protection infrastructure grants.
      $674,207,000 for state and tribal program/categorical 
grants. Of this amount, the conferees note that $28,000,000 is 
for multi-media tribal general assistance grants or performance 
partnership grants, at a Tribe's request. The conferees 
recognize that this level, which is the budget request, exceeds 
the authorized ceiling of $15,000,000 included in the Indian 
Environmental General Assistance Programs Act. The conferees 
also agree that, within the amount provided for wetlands 
implementation grants, EPA may make funds available to states 
to assist them with the routine expenses of conducting section 
404 regulatory programs that have been assumed by the States.
      Amendment No. 68: Provides $1,900,000,000 of the 
appropriated amount for capitalization grants for State 
revolving funds to support water infrastructure financing 
instead of $1,800,000,000 as proposed by the House and 
$1,976,000,000 as proposed by the Senate.
      Amendment No. 69: Inserts language proposed by the Senate 
which permits a specific cost-shared grant to the State of 
Alaska to be used for water supply infrastructure needs of 
rural and Alaska Native Villages.
      Amendment No. 70: Provides $136,000,000 of the 
appropriated amount for making specific wastewater, water and 
groundwater protection infrastructure grants instead of 
$129,000,000 as proposed by the House and no funding as 
proposed by the Senate, and inserts language proposed by the 
House and stricken by the Senate which makes such funds 
available in accordance with the terms and conditions set forth 
in the Conference Report and statement of managers accompanying 
this Act.
      The conferees direct that such grants be used for the 
following projects in the following amounts:
      $2,550,000 for continued wastewater needs in Bristol 
County, Mass.;
      $40,000,000 for continued wastewater needs in Boston, 
Mass.;
      $8,500,000 for continued wastewater needs in New Orleans, 
La.;
      $11,000,000 for continued water development needs of the 
Mojave Water Agency, Calif.;
      $8,500,000 for continued development of the Des Plaines 
River system TARP activity in Chicago, Ill.;
      $16,000,000 for continuation of the Rouge River National 
Wet Weather Project;
      $13,600,000 for continuing clean water improvements at 
Onondaga Lake;
      $5,400,000 for wastewater improvements in the East Cooper 
Area of Berkeley County, S.C.;
      $2,000,000 for sewer infrastructure improvements in 
Kodiak, Ak.;
      $8,000,000 for water quality improvements to Tanner Creek 
in Portland, Ore.;
      $2,850,000 for water treatment facility replacement and 
improvements for the Agua Sana Water Users Association, N.M.;
      $5,000,000 for wastewater treatment improvements in 
Middlebury, Vt.;
      $1,750,000 for wastewater treatment improvements in 
O'Neil, Neb.;
      $5,000,000 for the Taney County, Mo. Common Sewer 
District for its wastewater improvements project;
      $2,000,000 for the Northeast Ohio Regional Sewer District 
wet weather pollution abatement program;
      $1,700,000 for nine wastewater improvement projects in 
Essex County, Mass., including $1,000,000 for the South Essex 
Sewage District;
      $1,000,000 for water delivery system improvements in the 
Virgin Valley Water District, Nev.; and
      $1,150,000 for waste water improvement needs in Franklin, 
Huntington, and Clearfield Counties, Pennsylvania.
      The conferees are in agreement that the Agency should 
work with the grant recipients on appropriate cost-share 
agreements and to that end the conferees direct the Agency to 
develop a standard cost-share consistent with fiscal year 1995.
      Amendment No. 71: Inserts language as proposed by the 
Senate which permits the Administrator of EPA to make grants to 
States, from funds available for obligation in the State under 
title II of the Federal Water Pollution Control Act, as 
amended, for administering the completion and closeout of a 
State's construction grants program. The conferees agree that 
this provision is needed in many States due to the 
appropriation of over $1,800,000,000 since 1991 for wastewater 
grant projects and in view of the expiration of the section 
205(g) reserve for such management activities.
      Amendment No. 72: Provides $1,900,000,000 of the 
appropriated amount for capitalization grants for State 
revolving funds to support water infrastructure financing 
instead of $1,800,000,000 as proposed by the House and 
$1,976,000,000 as proposed by the Senate.
      Amendment No. 73: Provides $1,275,000,000 for drinking 
water State revolving funds as proposed by the Senate instead 
of $450,000,000 as proposed by the House. Public Law 104-134 
stipulated that drinking after SRF funds totaling 
$725,000,000--$225,000,000 of which was appropriated in fiscal 
year 1995 and $500,000,000 of which was appropriated in fiscal 
year 1996--would revert to the clean water SRF on August 1, 
1996 unless authorization for the drinking water SRF was 
enacted prior to that date. This authorization was 
unfortunately not completed until shortly after that date, but 
too late to prevent the movement of funds to the clean water 
SRF. Noting that the clean water SRF thus received an infusion 
of $725,000,000 just prior to the beginning of fiscal year 
1997, the conferees have agreed to reduce the 1997 clean water 
SRF appropriation by this amount and use the funds to increase 
the drinking water SRF over the $550,000,000 they have 
otherwise agreed upon as the appropriate fiscal year 1997 
level.
      The conferees note further, however, that because the 
authorization for the drinking water State revolving fund did 
not actually occur until just prior to the Senate completing 
action on the 1997 appropriation legislation, neither 
Appropriations Committee was able to review fully and make 
accommodation for all new provisions of this legislation. While 
the conferees expect that the funds provided for clean water 
State revolving fund capitalization grants will be distributed 
by the Agency in a manner similar to such distribution in prior 
years, the funds provided for drinking water State revolving 
fund capitalization grants should be distributed to all 
eligible governmental agencies and should be used solely for 
such capitalization grants and grants for public water system 
expenditures.
      Amendment No. 74: Deletes language proposed by the House 
and stricken by the Senate which stipulated that if legislation 
authorizing a drinking water State revolving fund is not 
enacted prior to June 1, 1997, the funds appropriated for a 
drinking water State revolving fund shall immediately become 
available for making capitalization grants under title VI of 
the Federal Water Pollution Control Act, as amended. This 
provision became moot when such legislation was enacted on 
August 6, 1996.
      Amendment No. 75: Inserts language proposed by the Senate 
which provides that the funds made available in Public Law 103-
327 for a grant to the City of Bangor, Maine shall be available 
to that city as a grant for meeting combined sewer overflow 
requirements.
      Amendment No. 76: Inserts language proposed by the Senate 
which provides that States which have not received funds 
allotted from the $725,000,000 (that, pursuant to law, became 
available on August 1, 1996) during fiscal year 1996, may still 
be eligible for reallotment of 1996 funds as long as they 
receive their allotment of the August 1, 1996 funds during 
fiscal year 1997.

                        administrative provision

      Amendment No. 77: Deletes language proposed by the House 
and stricken by the Senate which would have permitted the 
transfer of funds made available to any Environmental 
Protection Agency account to be transferred to the Science and 
Technology account for necessary research activities, subject 
to applicable reprogramming requirements.
      The conferees note that this provision was intended to 
give the Agency flexibility in providing for new research found 
necessary and appropriate for a particular EPA program which 
was not known or specifically provided for when the budget was 
developed and the appropriations process completed. Because of 
the time lapse between the beginning and end of each fiscal 
year's overall process, specific research which was not planned 
for or given a low priority at the beginning of the budget 
process may become necessary or of much greater importance near 
the end of the fiscal year. This provision would have permitted 
limited transfers among EPA accounts to accommodate the 
changing research needs of the Agency in this circumstance.
      In lieu of adopting this provision at this time, the 
conferees direct that the Agency review their potential need 
for such a provision and advise the Committees on 
Appropriations on the results of this review prior to 
Congressional hearings on the fiscal year 1998 budget request.

                   Executive Office of the President

  council on environmental quality and office of environmental quality

      Amendment No. 78: Appropriates $2,436,000 for the Council 
on Environmental Quality and Office of Environmental Quality as 
proposed by the Senate instead of $2,250,000 as proposed by the 
House.

                  Federal Emergency Management Agency

      Amendment No. 79: Appropriates $1,320,000,000 for 
disaster relief as proposed by the Senate instead of 
$1,120,000,000 as proposed by the House.
      Amendment No. 80: Deletes language proposed by the Senate 
and inserts in lieu thereof language which requires the 
Director of the Federal Emergency Management Agency to submit a 
comprehensive report regarding disaster relief expenditures and 
management controls within 120 days of enactment of this Act. 
Language is also inserted which makes all disaster relief funds 
appropriated in this Act available for immediate obligation.
      The conferees have provided $1,320,000,000 in disaster 
relief funds for fiscal year 1997, and have included language 
making all such funds immediately available for obligation. 
When the 1997 appropriation is added to the $3,700,000,000 
appropriated in prior years and still available for obligation, 
FEMA will have in excess of $5,000,000,000 to respond to both 
past and anticipated 1996 disaster situations, including the 
recent Hurricane Fran. The conferees have been assured that 
this level of available disaster relief funds makes a disaster 
supplemental appropriation unnecessary at this time.
      The conferees have agreed to a statutory provision 
requiring FEMA to submit a comprehensive report within 120 days 
of enactment of this Act on its plans to reduce disaster relief 
expenditures and improve management controls on the disaster 
relief fund. The Senate amendment prohibiting the expenditure 
of disaster relief funds for the repair of yacht harbors or 
golf courses, tree or shrub replacement except in public parks, 
and recreational facilities, has been deleted without 
prejudice, in order to give the Agency an opportunity to 
address the issue of controlling disaster relief expenditures 
in a comprehensive manner. The conferees are troubled by the 
findings of a recent Inspector General report, upon which the 
Senate amendment was based, which found substantial sums have 
been awarded from the disaster relief fund to restore golf 
courses, equestrian trails, and the like. While the Stafford 
Act may not disallow such expenditures, the conferees believe 
such disbursements may not be appropriate and can no longer be 
accommodated. There are many other examples of opportunities 
for reducing disaster relief expenditures and improving 
management controls on the fund, some of which can be 
implemented administratively, and some of which require 
statutory changes.
      The conferees note that the FEMA Director testified 
before the Senate committee earlier this year that he would 
submit by October 1, 1996, a proposal for controlling disaster 
relief expenditures. Because it appears likely that this 
commitment will not be met, the conferees have included a 
statutory provision requiring such a submission within 120 days 
of enactment of this Act.
      Last year, FEMA established a disaster resources board to 
oversee the process of developing and reviewing disaster relief 
funding requests for activities not associated with a specific 
disaster. The conferees are concerned that the board has a 
significant amount of autonomy in deciding whether or not to 
charge a particular non-disaster specific activity to the fund, 
and wish to be kept apprised of all activities of the board 
through reports detailing any decisions made to charge 
additional non-disaster specific activities to the fund. The 
first such report should be submitted along with the fiscal 
year 1998 budget request.
      The conferees are aware of efforts in the State of 
California to develop a disaster response system to integrate 
local, regional, state, and federal emergency management 
organizations through the sharing of interrelated data 
applications which will aid and accelerate efficient planning, 
coordination, and response to disasters. FEMA is directed to 
work with the State in the development of this system and 
determine the type of assistance, both technical and financial, 
which would be of greatest help to the State in this effort.
      Finally, the conferees note that urban search and rescue 
(USAR) is a critical element of effective response to 
earthquakes and other disasters, and are very supportive of 
this program. However, the conferees are concerned that not all 
of the FEMA USAR teams are considered fully operational at this 
time, and note that the geographical distribution of the teams 
appears to be inadequate, particularly in the Midwest. In 
addition, the conferees are aware of concerns that current 
funding for each of the teams may be insufficient. The 
conferees therefore direct FEMA to report within 60 days of 
enactment of this Act on, (1) the appropriate number and 
geographical distribution of USAR teams, (2) the process for 
discontinuing support to teams which are not fully operational, 
and the Agency's plans to discontinue such teams, and (3) 
funding requirements for a viable program. As a replacement for 
inadequately funded or not fully operational USAR teams, FEMA 
is further directed to establish at least one new USAR team, 
taking into account adequate financial support, operational 
abilities, and geographical distribution, as quickly as 
possible but no later than 180 days of enactment of this Act.
      Amendment No. 81: Appropriates $167,500,000 for salaries 
and expenses instead of $168,000,000 as proposed by the House 
and $166,733,000 as proposed by the Senate.
      Amendment No. 82: Appropriates $4,673,000 for the Office 
of Inspector General as proposed by the Senate instead of 
$4,533,000 as proposed by the House.
      Amendment No. 83: Appropriates $206,701,000 for emergency 
management planning and assistance instead of $209,101,000 as 
proposed by the House and $199,101,000 as proposed by the 
Senate.
      The conferees are in agreement with the following changes 
to the budget request:
      +$500,000 for a comprehensive analysis and plan of all 
evacuation alternatives for the New Orleans metropolitan area.
      +$3,400,000 for costs associated with the replacement and 
upgrade of emergency response vehicles and equipment. The 
conferees agree that much of FEMA's equipment is obsolete and 
in need of repair or replacement, and understand that there 
will be a significant long-term cost associated with the 
upgrade of such equipment. This additional $3,400,000 
appropriation, for example, will only provide adequate 
resources to replace UHF/VHF radios and ancillary equipment. In 
light of the great needs to upgrade equipment and thus provide 
better response support to disaster events, the Agency is 
directed to provide a comprehensive list on a priority basis of 
all needs in this regard, including the purchase of necessary 
vehicles and equipment of MERS and MATTS, as well as new 
systems such as the MIDAS system. The first such list should be 
submitted along with the fiscal year 1998 budget request and 
should then be updated throughout each year on an as-needed 
basis.
      +$1,700,000 to complete the Earthquake Hazard Mitigation 
Program with the City of Portland, Oregon and the Oregon 
Department of Geology and Mineral Industries (DOGAMI).
      The conferees agree to up to $2,000,000 for FEMA's 
participation in appropriate pre-disaster mitigation efforts. 
The conferees agree with FEMA's Director that mitigation 
activities can ultimately save significant sums from post-
disaster clean-up and response actions and that the Agency 
should be taking an increasingly active role in developing and 
participating in pre-disaster mitigation programs. Such 
programs range in scope from the development and/or funding of 
mitigation plans for communities to participation with 
industries, insurers, building code officials, government 
agencies, engineers, researchers and others in developing 
systems and facilities to test structures in disaster-like 
circumstances. The conferees understand that these activities 
will require an infusion of considerable up-front financial 
support as well as the possible movement over time of disaster 
relief funds to pre-disaster programs, and the Agency is 
expected to use up to the $2,000,000 provided herein in an 
appropriate manner to begin the process of movement toward a 
meaningful pre-disaster mitigation program. Expenditure of 
these funds may not, however, be made until submission to the 
Committees on Appropriations of an appropriate pre-disaster 
mitigation spending plan.
      The conferees note the Administration's September 12, 
1996 submission of a budget amendment for counter-terrorism 
activities for several agencies, including FEMA, totaling 
$1,097,000,000. The conferees strongly support counter-
terrorism activities, such as grants to state and local 
emergency responders for specialized training and equipment, 
consequence management planning and coordination, and field 
training and exercises. The conferees direct FEMA to propose 
appropriate funding levels for necessary counter-terrorism 
activities in its operating plan.
      Amendment No. 84: Inserts language proposed by the 
Senate, with a technical change, which permits FEMA to spend 
such sums as are necessary during fiscal year 1997 to conduct 
natural disaster studies consistent with law. The technical 
change refers to the citation of law, 42 U.S.C. 4127(c), in 
lieu of the citation referred to in the Senate amendment.
      Amendment No. 85: Inserts language proposed by the Senate 
which extends the authorization for the National Flood 
Insurance Fund program for one year until September 30, 1997.

                    General Services Administration

                    consumer information center fund

      Amendments Nos. 86 and 87: Deletes House language 
providing for a limitation of $2,602,000 on administrative 
expenses and inserts Senate language modifying the House 
provision establishing a gift fund for the purpose of defraying 
costs of operations of the Consumer Information Center.
      The conferees agree that the Consumer Information Center 
is to take over responsibility for production and distribution 
of the Consumer Resource Handbook in addition to other duties 
it currently performs. The conferees further agree to include 
bill language which authorizes the Consumer Information Center 
to accept private sector donations to defray the costs of 
printing, publishing, and distributing consumer information and 
educational material, and undertaking consumer information 
activities.

             National Aeronautics and Space Administration

                           human space flight

      The conferees fully support deployment of the space 
station but recognize the funds appropriated by this Act for 
the development of the space station may not be adequate to 
cover all potential contractual commitments should the program 
be terminated for the convenience of the Government. 
Accordingly, if the space station is terminated for the 
convenience of the Government, additional appropriated funds 
may be necessary to cover such contractual commitments. In the 
event of such termination, it would be the intent of the 
conferees to provide such additional appropriations as may be 
necessary to provide fully for termination payments in a manner 
which avoids impacting the conduct of other ongoing NASA 
programs.

                  science, aeronautics and technology

      Amendment No. 88: Appropriates $5,762,100,000 for 
Science, Aeronautics and Technology, as proposed by the Senate, 
instead of $5,662,100,000 as proposed by the House.
      The conference agreement reflects the following changes 
from the budget request:
            a general reduction of $95,000,000;
            GLOBE is reduced by $5,000,000;
            an increase of $4,000,000 for cardiac imaging;
            an increase of $4,000,000 for the space radiation 
        program;
            an increase of $2,000,000 for high speed civil 
        transport research;
            an increase of $5,000,000 for the WindSat program;
            an increase of $12,000,000 for radar satellite;
            an increase of $10,000,000 for museum programs;
            an increase of $12,000,000 for advanced space 
        transportation;
            an increase of $10,000,000 for the TIMED program; 
        and
            an increase of $10,000,000 for education programs.
      The conferees have agreed to provide $12,000,000 for a 
new start for the Light SAR program. The conferees understand 
that this amount of funding is in conformance with NASA's 
expected execution of this program for fiscal year 1997 and 
that additional funding will be included in the fiscal year 
1998 budget submission.
      With the exception of the $5,000,000 reduction of GLOBE, 
the conferees are directing no specific reduction to Mission to 
Planet Earth programs.
      The conferees agree to provide an additional $10,000,000 
for education programs. Included in the increase is $300,000 
for upgrades to the Mobile Aeronautics Education Laboratory, 
$250,000 is provided for a feasibility study to create a 
national residential high school at Lewis Research Center, 
$250,000 is provided to begin replication of the Science, 
Engineering, Mathematics, and Aeronautics Academy program, and 
$300,000 is for the Classroom of the Future's Astronomy Village 
Program to increase the learning effectiveness of the Classroom 
by assessing and improving student scientific inquiry 
abilities.
      The conferees have designated $10,000,000 for museum 
programs. It is the intent of the conferees that $8,000,000 is 
to be used for the purposes outlined on page 82 of House Report 
104-628. An additional $2,000,000 is provided for initial 
development of a national prototype space education curriculum. 
This curriculum shall be designed to heighten student interest 
and involvement in science, technology and space programs by 
utilizing the education and technology base of NASA and the 
nation's science museum and planetarium network. The conferees 
expect NASA to provide approximately $1,000,000 of these funds 
to the Bishop Museum, Honolulu, Hawaii for development of the 
curriculum, with the remainder to be spent on replication and 
distribution of the curriculum to educational institutions 
nationwide.

                            MISSION SUPPORT

      The conferees direct the NASA Administrator to submit a 
multi-year workforce restructuring plan on how NASA will 
achieve its stated fiscal year 2000 full-time equivalent (FTE) 
goal with the agency's fiscal year 1998 budget and updated 
annually with budget submissions through fiscal year 2000. This 
plan shall: 1) outline a timetable for restructuring the 
workforce at NASA Headquarters and field Centers; 2) 
incorporate annual FTE targets by broad occupational categories 
and address how these targets reflect the respective missions 
of Headquarters and the field Centers; 3) describe personnel 
initiatives, such as relocation assistance, early retirement 
incentives, and career transition assistance which NASA will 
use to achieve personnel reductions. The plan shall minimize 
social and economic impacts, using ``reductions in force'' to 
the minimum extent practicable. Consistent with applicable law 
and regulation, NASA shall provide advance notice of 
separations to employees and local entities and appropriate 
assistance to affected employees.
      The conferees are concerned about NASA's plans to delay 
the Consolidated Space Operations Contract. In particular, the 
conferees note the potential increased costs associated with 
this delay. Given these potential costs, the conferees ask NASA 
to provide, within 90 days, the rationale behind the decision 
to delay and to outline its plans for the Consolidated Space 
Operations Contract.
      The conferees direct NASA to implement a Wallops 2000 
plan for NASA activities at Wallops Island which maintains 
sufficient agency investment to ensure stabilization, as well 
as full utilization, of the Wallops workforce.

                       ADMINISTRATIVE PROVISIONS

      Amendment No. 89: Replaces Senate administrative 
provision providing for payments of up to $25,000 to employees 
who volunteer for separation from NASA with a new provision 
which gives the NASA Administrator authority to transfer up to 
$177,000,000 among accounts.
      The conferees have deleted the administrative provision 
which will allow for payments of up to $25,000 to employees who 
volunteer for separation from NASA. Instead the conferees have 
included a general provision (Section 439) which will allow for 
payments of up to $25,000 to employees who volunteer for 
separation, provides for repayment to the government of the 
separation incentive if the employee accepts reemployment with 
the Government or receives an annuity for disability, requires 
an additional agency contribution to the Civil Service 
Retirement and Disability Fund, reduces full-time equivalent 
employment levels, and requires NASA to report to the Office of 
Personnel Management by March 31 of each fiscal year on the 
execution of this provision.
      In place of the separation incentive administrative 
provision, the conferees have also included an administrative 
provision providing transfer authority to NASA. It is the 
intent of the conferees that this authority will be used to 
transfer funds between the Science, Aeronautics and Technology 
account and the Human Space Flight account to the extent 
required for development/construction to maintain the schedule 
of the space station program. To ensure that there is no 
adverse effect on any NASA program, the conferees provide 
general transfer authority of up to $177,000,000 to be used at 
the discretion of the Administrator and subject to the case-by-
case approval by the House and Senate Appropriations 
Committees. The conferees note that this authority is required 
because the current split between development/construction 
funding and science funding is not properly phased.

                      National Science Foundation

                    research and related activities

      Amendment No. 90: Appropriates $2,432,000,000 for 
Research and Related Activities, as proposed by the Senate 
instead of $2,431,110,000 as proposed by the House.
      The conferees agree that the reduction from the budget 
request, $40,000,000, is to be allocated by the National 
Science Foundation in accordance with its internal procedures 
for resource allocation, subject to approval by the House and 
Senate Committees on Appropriations.
      Of the increase provided for Research and Related 
Activities above the fiscal year 1996 level, the conferees 
direct the National Science Foundation to make available up to 
$1,400,000 to pay any tariff duties assessed on the Gemini 
project, consistent with Senate language under the Major 
Research Equipment account. In providing these funds, the 
conferees direct the Foundation to place them in reserve prior 
to all directorate allocations made in conjunction with their 
fiscal year 1997 operating plan.
      The conferees note that government policy in the area of 
duties and/or tariffs on scientific instruments is under review 
with regard to this program and encourage the U.S. Customs 
Service to act in a responsible manner by recognizing that any 
assessed duties on this program will be paid by an arm of the 
U.S. government, in this case the National Science Foundation, 
and will do nothing to increase the net financial position of 
the United States Government.
      The conferees are in receipt of a report by the National 
Science Foundation, requested by the House and Senate 
Committees on Appropriations, which addresses the possible 
addition of a new Navy-owned, university-operated Class 1 
Oceanographic Research Vessel to the academic fleet. The report 
concludes that there is no current need to replace any of the 
four large general purpose oceanographic ships currently in the 
academic fleet because all of these ships have 10 to 30 years 
of service life remaining. While the conferees on the 
Department of Defense Appropriations Bill for fiscal year 1997 
have agreed to provide funding for construction of a new large 
vessel, such a vessel is not needed at this time and the cost 
of operating the ship will most likely exacerbate an already 
constrained budget. Therefore, the conferees direct the Office 
of Naval Research to work with the University-National 
Oceanographic Laboratory System through its normal review 
process to ensure that the vessel will fit the needs of the 
oceanographic community and takes into consideration the 
overall balance between research funding and ship operations 
funding.

                        major research equipment

      The conferees do not agree with the Senate direction to 
use $1,400,000 of funding in the Major Research Equipment 
account to pay U.S. Customs duties assessed on the Gemini 
Telescope project. The conferees have addressed this issue 
elsewhere in the report.

                     education and human resources

      Amendment No. 91: Appropriates $619,000,000 for Education 
and Human Resources, instead of $612,000,000 as proposed by the 
House and $624,000,000 as proposed by the Senate.
      The conference agreement includes the following 
reductions:
            (1) $2,000,000 from grants for graduate 
        fellowships;
            (2) $5,000,000 from grants for undergraduate 
        curriculum development;
            (3) $2,500,000 from K-12 curriculum and assessment 
        development; and
            (4) $3,000,000 from research, evaluation and 
        communication.

The conferees agree that these reductions are provided as 
guidance to the National Science Foundation; these funding 
levels are subject to established reprogramming procedures, 
subject to the approval of both the House and Senate 
Appropriations Committees.
      Funding for Informal Science is increased by $10,000,000 
which will result in a total of $36,000,000 for this vitally 
important program. The conferees expect that these additional 
funds will be used to support and strengthen systemic reform 
efforts funded elsewhere in this account. In addition, the 
conferees request that the National Science Foundation report 
back to the Committees on Appropriations of the House and 
Senate on its plans for implementing this direction. Funding 
for EPSCoR is increased by $2,500,000 for a total of 
$38,410,000. The increase for EPSCoR is to be used for advanced 
computing, networking and joint projects.

                         salaries and expenses

      Amendment No. 92: Appropriates $134,310,000 for salaries 
and expenses as proposed by the Senate instead of $125,200,000 
as proposed by the House.

                 Neighborhood Reinvestment Corporation

          payment to the neighborhood reinvestment corporation

      Amendment No. 93: Appropriates $49,900,000 for payment to 
the neighborhood reinvestment corporation as proposed by the 
Senate instead of $50,000,000 as proposed by the House.

                      TITLE IV--GENERAL PROVISIONS

      Amendment No. 94: Inserts language proposed by the Senate 
modifying the travel expense limitation in section 401 to 
accommodate the change to budget estimates, including object 
classifications, which have been rounded to the nearest million 
dollars.
      Amendment No. 95: Inserts language proposed by the Senate 
authorizing benefits for offspring of Vietnam veterans with 
spina bifida, and to offset the cost of such benefits by 
requiring that there be an element of fault as a precondition 
for entitlement to compensation for a disability or death 
resulting from health care or certain other services furnished 
by VA, amended to delay the effective date until October 1, 
1997, unless legislation is enacted to provide for an earlier 
effective date. This delay will provide the committees of 
jurisdiction an opportunity to address this matter.
      Amendment No. 96: Deletes language proposed by the House 
and stricken by the Senate prohibiting the payment of salaries 
of personnel who approve acquisition of supercomputing 
equipment when the Department of Commerce has determined that 
the equipment is being offered at other than fair value.
      The National Center for Atmospheric Research (NCAR), 
which is operated largely with support from the National 
Science Foundation, has been conducting a competition for the 
acquisition of a new supercomputer. NCAR, in its bid process, 
selected a computer offered by a Japanese company. On August 
20, 1996, the Department of Commerce announced that it was 
initiating an investigation to determine whether Japanese 
vector supercomputers were being dumped in the United States. 
Included in this investigation was a bid submitted in the NCAR 
procurement. On that same date, the National Science Foundation 
requested that the NCAR procurement be held in abeyance.
      On September 11, 1996, the U.S. International Trade 
Commission determined in a preliminary investigation that there 
is a reasonable indication that a U.S. industry is threatened 
with material injury by reason of imports of vector 
supercomputers that are allegedly sold at less than fair value. 
As a result of this determination, the Department of Commerce 
will continue to conduct its antidumping investigation on 
imports of such equipment, with a preliminary determination 
expected by January 6, 1997, and a final determination by March 
1997.
      Amendment No. 97: Deletes language proposed by the House 
and stricken by the Senate prohibiting NASA from providing 
funds for the National Center for Science Literacy, Education 
and Technology at the American Museum of Natural History.
      Amendment Nos. 98-100: Deletes language proposed by the 
House and stricken by the Senate prohibiting the use of funds 
made available by this Act for any institution of higher 
education which excludes Reserve Officer Training Corps or 
military recruiting from its campus or any entity that fails to 
comply with reporting requirements of law concerning the 
employment of certain veterans.
      Amendment No. 101: Deletes language proposed by the House 
and stricken by the Senate increasing VA's medical care 
appropriation by $40,000,000 and general operating expenses 
appropriation by $17,000,000, offset by an across-the-board 
reduction of 0.4 percent. The conferees note that scorekeeping 
credit was not given for the offset.
      Amendment No. 102: Deletes language proposed by the House 
and stricken by the Senate increasing VA's medical care 
appropriation by $20,000,000 and medical and prosthetic 
research appropriation by $20,000,000, offset by eliminating 
all funds for the Corporation for National and Community 
Service; and inserts language increasing the medical care 
appropriation carried in title I by $5,000,000. This amount, 
together with the funds carried in title I under the medical 
care heading, will provide $17,013,447,000 for medical care, an 
increase of $5,000,000 above the Administration's budget 
request.
      Amendment No. 103: Deletes language proposed by the House 
and stricken by the Senate prohibiting the Environmental 
Protection Agency from using its funds to allow the importation 
of PCB waste to be incinerated in the United States.
      Amendment No. 104: Deletes language proposed by the House 
and stricken by the Senate prohibiting the Environmental 
Protection Agency from using hazardous substance superfund 
funding to implement any retroactive liability discount 
reimbursement.
      Amendment No. 105: Deletes language proposed by the House 
and stricken by the Senate simplifying downpayment methods on 
FHA-insured loans, and inserts language proposed by the Senate 
regarding the calculation of a downpayment on an FHA mortgage 
originated in Alaska or Hawaii and delegating single family 
mortgage insuring authority to direct endorsement mortgagees, 
amended to limit the applicability of the downpayment 
provisions to fiscal year 1997.
      Amendment No. 106: Deletes language proposed by the House 
and stricken by the Senate prohibiting the National Aeronautics 
and Space Administration from continued participation in a 
joint Russia-France-United States cooperative life sciences 
experiment program known as Bion 11 and Bion 12.
      Amendment No. 107: Deletes language proposed by Senate 
regarding compliance by the Environmental Protection Agency 
with international obligations under the World Trade 
Organization. The House bill contained no similar provision.
      The conferees have deleted, without prejudice, language 
expressing the sense of the Senate that EPA should provide a 
full and open administrative process in the formulation of any 
final rule regarding the importation of reformulated and 
conventional gasoline. The conferees note that, in response to 
a dispute settlement finding against the United States by the 
World Trade Organization, the United States informed the WTO on 
June 19, 1996 that the U.S. intends to meet its international 
obligations with respect to the EPA requirements on imported 
reformulated and conventional gasoline. The conferees recognize 
that EPA has initiated an open process to examine any and all 
options for compliance with international obligations of the 
United States in which a key criterion will be fully protecting 
public health and the environment, and fully support such an 
open process and the involvement of interested environmental 
and industrial organizations.
      However, the conferees expect that this process will not 
result in the reinstatement of the rule title ``Regulations of 
Fuels and Fuel Additives: Individual Foreign Refinery Baseline 
Requirements for Reformulated Gasoline'' proposed on May 3, 
1994 (59 Fed. Reg. 84), or one similar to it. Further, the 
conferees direct the Administrator of the Environmental 
Protection Agency, in evaluating any option for compliance with 
international obligations, to: (1) take fully into account the 
protection of public health and the environment and the 
international obligations of the United States as a member of 
the World Trade Organization; (2) ensure that the compliance 
review process does not result in the degradation of gasoline 
quality required by the Clean Air Act with respect to 
conventional and reformulated gasoline; (3) not recognize 
individual foreign refiner baselines unless the Administrator 
determines that the issues of auditing, inspection of foreign 
facilities, and enforcement have been adequately addressed; and 
(4) provide a full and open administrative process in the 
formulation of any final rule.
      Amendment No. 108: Inserts language proposed by the 
Senate permitting fiscal year 1997 and prior year funds 
provided under section 320(g) of the Federal Water Pollution 
Control Act, as amended, to be used for implementation (rather 
than just development) of conservation and management plans 
made pursuant to this section.
      Amendment No. 109: Inserts language proposed by the 
Senate requiring a plan for the allocation of VA health care 
resources so veterans have similar access to such care 
regardless of where they live.
      The conferees recognize that precipitous changes in 
allocations amongst VA's facilities could be very difficult for 
individual facilities to manage. While the conferees support 
VA's efforts to amend its resource allocation methodology based 
on a capitation model--which is intended to bring about a more 
equitable distribution of resources--they expect the Department 
to ensure that fiscal year 1997 serve as a ``bridge'' in moving 
to the new system so as to provide an adjustment period for 
facilities to adapt to the new model. The conferees further 
expect that no veteran currently receiving care by the VA will 
be denied VA health care services as a result of the new 
allocation methodology. The VA is to prepare a report by 
January 31, 1997, on its progress in adjusting to and impacts 
of the new methodology, and be prepared to discuss this matter 
during the fiscal year 1998 budget hearings.
      Amendment No. 110: Inserts language proposed by the 
Senate requiring a General Accounting Office audit on staffing 
and contracting of the Office of Federal Housing Enterprise 
Oversight.
      Amendment No. 111: Amends language proposed by the Senate 
prohibiting the consolidation of NASA aircraft based east of 
the Mississippi River to the Dryden Flight Research Center.
      Amendment No. 112: Deletes language proposed by the 
Senate revising the name of the Japan-United States Friendship 
Commission.
      Amendment No. 113: Inserts new language on separation 
incentive payments for NASA personnel which had been included 
in the Senate bill as an administrative provision and modifies 
the language to restrict its applicability. Modifies language 
proposed by the Senate authorizing the conveyance of certain 
real property under the jurisdiction of NASA to the City of 
Downey, California, amended to assign certain responsibilities 
to the Administrator of the General Services Administration.
      The conferees intend that the concurrence of the 
Administrator of the General Services Administration in the 
conveyance by NASA of Parcels III through VI of the NASA 
Industrial Plant, Downey, California to the City of Downey 
shall be based upon completion of a disposal screening for 
possible utilization of the subject parcels by other Federal 
agencies initiated by GSA on September 10, 1996. Furthermore, 
it is the intent of the conferees that nothing in this 
amendment shall prevent the City of Downey from entering into 
ground leases for periods in excess of 20 years in order to 
secure construction financing without triggering the 
reconveyance provision.

                         TITLE V--SUPPLEMENTALS

      Amendment No. 114: Inserts new heading as proposed by the 
Senate.

                     Department of Veterans Affairs

                    veterans benefits administration

      Amendment No. 115: Inserts language appropriating a 
supplemental amount of $100,000,000 for compensation and 
pensions as proposed by the Senate.

              Department of Housing and Urban Development

                government national mortgage association

      Amendment No. 116: Inserts language providing additional 
1996 commitment authority of $20,000,000,000 in the guarantees 
of mortgage-backed securities loan guarantee program account as 
proposed by the Senate.

     TITLE VI--NEWBORNS' AND MOTHERS' HEALTH PROTECTION ACT OF 1996

      Amendment No. 117: The conference agreement includes the 
Senate amendment with modifications, including the deletion of 
offsets. It incorporates the requirements of the provision and 
the authority to enforce the requirements into the new part 7 
of subtitle B of ERISA and the new title XXVII of the Public 
Health Service Act as established by P.L. 104-191. It does not 
include the exception to the requirement for the 48-hour or 96-
hour minimum stay in the case that the plan provides for post-
delivery follow-up care. It adds a prohibition that a health 
plan cannot restrict benefits for any portion of the required 
minimum 48-hour or 96-hour stay in a manner which is less 
favorable than the benefits providing for any preceding portion 
of such stay. In addition, the conference agreement provides 
that nothing in this provision is intended to be construed as 
preventing a group health plan or issuer from imposing 
coinsurance, deductibles, or other cost-sharing in relation to 
benefits for hospital lengths of stay in connection with 
childbirth for a mother or newborn child under the plan (or 
under health insurance coverage offered in connection with a 
group health plan), except that such coinsurance or other cost-
sharing for any portion of a period within a hospital length of 
stay required under subsection (a) may not be greater than such 
coinsurance or cost-sharing for any preceding portion of such 
stay. It is the intent of the conferees that cost-sharing not 
be used in a manner that circumvents the objectives of this 
title. It provides for a modification to the notice 
requirements by conforming them to the summary of material 
modifications under ERISA. In general, it conforms the 
provision relating to preemption to State laws to the Health 
Insurance Portability and Accountability Act of 1996. 
Notwithstanding section 731(a)(1) of ERISA and sections 
2723(a)(1) and 2762 of the Public Health Service Act, the new 
provisions shall not preempt a State law that requires health 
insurance coverage to include coverage for maternity and 
pediatric care in accordance with guidelines established by the 
American College of Obstetricians and Gynecologists, the 
American Academy of Pediatrics, or other established 
professional medical associations. In addition, those sections 
shall not be construed as superseding a State law that leaves 
decisions regarding the appropriate hospital length of stay in 
connection with childbirth entirely to the attending provider 
in consultation with the mother. In addition, it is the intent 
of the conferees that, consistent with section 704 
(redesignated as section 731) of ERISA and section 2723 of the 
Public Health Service Act, the application of the preemption 
provision should permit the operation of any State law or 
provision which requires more favorable treatment of maternity 
coverage under health insurance coverage than that required 
under this title.
      It is the intent of the conferees that health plans have 
sufficient flexibility to encourage or specify that attending 
providers follow nationally recognized guidelines for maternal 
and perinatal care in determining when early discharge is 
medically appropriate.
      Throughout the title, the conferees have used the term 
``hospital length of stay'' to indicate that the requirement 
for coverage of a 48-hour stay following vaginal delivery and a 
96-hour length of stay following a cesarean section delivery is 
triggered by any delivery in connection with hospital care, 
regardless of whether the delivery is in a hospital inpatient 
or outpatient setting.
      It is the intent of the conferees that a detailed series 
of conforming changes shall be made as soon as possible to the 
Internal Revenue Code, specifically subtitle K of the Internal 
Revenue Code of 1986 (as added by section 401(a) of the Health 
Insurance Portability and Accountability Act of 1996), in order 
to fully implement these provisions as part of chapter 100 of 
the Code.

   TITLE VII--PARITY IN THE APPLICATION OF CERTAIN LIMITS TO HEALTH 
                                BENEFITS

      Amendment No. 118. The conference agreement includes the 
Senate amendment with modifications. It incorporates the 
requirement into the new part 7 of subtitle B of title I of 
ERISA and the new title XXVII of the Public Health Service Act 
as established by Public Law 104-191. The construction clause 
has been modified to state that nothing in this section shall 
be construed as--
            (1) requiring a group health plan (or health 
        insurance coverage offered in connection with such a 
        plan) to provide any mental health benefits; or
            (2) in the case of such a plan or coverage that 
        provides such mental health benefits, as affecting the 
        terms and conditions (including cost sharing, the 
        limits on numbers of visits or days of coverage, and 
        requirements relating to medical necessity) relating to 
        the amount, duration, or scope of mental health 
        benefits under the plan or coverage, except as 
        specifically provided in regard to parity in the 
        imposition of aggregate lifetime limits and annual 
        limits for mental health benefits.

      This language affirms the intent of conferees that group 
health plans and issuers retain the flexibility, consistent 
with the requirements of the Act, to define the scope of 
benefits, establish cost-sharing requirements, and to impose 
limits on hospital days and out-patient visits. Parity of 
mental health services with medical and surgical services 
defined under a group health plan is limited solely to any 
aggregate dollar life-time limit and any annual dollar limit 
under such a plan. The conference agreement clarifies that the 
requirements apply to each group health plan, and, in the case 
of a group health plan that offers two or more benefit 
packages, the parity requirements shall be applied separately 
with respect to each such option. In addition, the conference 
agreement applies an exemption to small employers as defined in 
the Health Insurance Portability and Accountability Act; adds 
certain definitions; and applies the requirements of the 
provision to group health plan years beginning on or after 
January 1, 1998. The agreement does not include the Senate 
language relating to effective dates for the Federal Employee 
Health Benefit Plan.
      It is the intent of the conferees that a detailed series 
of conforming changes shall be made as soon as possible to the 
Internal Revenue Code, specifically subtitle K of the Internal 
Revenue Code of 1986 (as added by section 401(a) of the Health 
Insurance Portability and Accountability Act of 1996), in order 
to fully implement these provisions as part of chapter 100 of 
the Code.
      The conferees intend that a limit be considered to apply 
to ``substantially all medical and surgical benefits'' if it 
applies to at least two-thirds of all the medical and surgical 
benefits covered under the group health plan's benefit package.
      It is the intent of the conferees that, consistent with 
section 704 (redesignated as section 731) of ERISA and section 
2723 of the Public Health Service Act, the application of the 
preemption provision should permit the operation of any State 
law or provision which requires more favorable treatment of 
mental health benefits under health insurance coverage than 
that required under this section.

                   Conference Total--With Comparisons

      The total new budget (obligational) authority for the 
fiscal year 1997 recommended by the Committee of Conference, 
with comparisons to the fiscal year 1996 amount, the 1997 
budget estimates, and the House and Senate bills for 1997 
follow:

New budget (obligational) authority, fiscal year 1996... $82,442,966,000
Budget estimates of new (obligational) authority, fiscal 
    year 1997...........................................  87,820,371,000
House bill, fiscal year 1997............................  83,995,260,000
Senate bill, fiscal year 1997...........................  84,810,153,000
Conference agreement, fiscal year 1997..................  84,800,283,000
Conference agreement compared with:
    New budget (obligational) authority, fiscal year 
      1996..............................................  +2,357,317,000
    Budget estimates of new (obligational) authority, 
      fiscal year 1997..................................  -3,020,088,000
    House bill, fiscal year 1997........................    +805,023,000
    Senate bill, fiscal year 1997.......................      -9,870,000

                                   Jerry Lewis,
                                   Barbara F. Vucanovich,
                                   James T. Walsh,
                                   David L. Hobson,
                                   Joe Knollenberg,
                                   Rodney P. Frelinghuysen,
                                   Bob Livingston,
                                   Louis Stokes,
                                   Alan B. Mollohan,
                                   Jim Chapman,
                                   Marcy Kaptur,
                                   David R. Obey,
                                 Managers on the Part of the House.

                                   Christopher S. Bond,
                                   Conrad Burns,
                                   Ted Stevens,
                                   Richard C. Shelby,
                                   Robert F. Bennett,
                                   Ben Nighthorse Campbell,
                                   Mark O. Hatfield,
                                   Barbara A. Mikulski,
                                   Patrick J. Leahy,
                                   J. Bennett Johnston,
                                   Frank R. Lautenberg,
                                   J. Robert Kerrey,
                                   Robert C. Byrd,
                                Managers on the Part of the Senate.