[Senate Report 104-140]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 185
104th Congress                                                   Report
                                 SENATE

  1st Session                                                   104-140
_______________________________________________________________________


 
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
             INDEPENDENT AGENCIES APPROPRIATIONS BILL, 1996

                                _______


   September 13 (legislative day, September 5), 1995.--Ordered to be 
                                printed

_______________________________________________________________________


Mr. Bond, from the Committee on Appropriations, submitted the following

                              R E P O R T

                        [To accompany H.R. 2099]

    The Committee on Appropriations to which was referred the 
bill (H.R. 2099) 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, 1996, and 
for other purposes, reports the same to the Senate with 
amendments and recommends that the bill as amended do pass.


Amount of new budget (obligational) authority

Amount of bill as recommended in House.................. $79,697,360,000
Amount of change by Committee...........................  +1,286,626,000
                    --------------------------------------------------------
                    ____________________________________________________
Amount of bill as reported to Senate....................  80,983,986,000
Amount of appropriations to date, 1995..................  89,920,161,061
Amount of budget estimates, 1996........................  89,899,762,093
    Under estimates for 1996............................   8,915,776,093
    Under appropriations for 1995.......................   8,936,175,061

                            C O N T E N T S

                              ----------                              
                                                                   Page
Title I--Department of Veterans Affairs..........................    12
Title II--Department of Housing and Urban Development............    36
Title III--Independent agencies:
    American Battle Monuments Commission.........................    78
    Community Development Financial Institutions.................    78
    Consumer Product Safety Commission...........................    79
    Corporation for National and Community Service...............    80
    Office of Inspector General..................................    81
    U.S. Court of Veterans Appeals...............................    81
    Cemeterial expenses, Army....................................    82
    Environmental Protection Agency..............................    82
    Executive Office of the President............................   107
    Council on Environmental Quality and the Office of 
      Environmental Quality......................................   108
    Federal Emergency Management Agency..........................   109
    General Services Administration: Consumer Information Center.   116
    Department of Health and Human Services: Office of Consumer 
      Affairs....................................................   117
    National Aeronautics and Space Administration................   118
    National Credit Union Administration.........................   127
    National Science Foundation..................................   128
    Neighborhood Reinvestment Corporation........................   134
    Selective Service System.....................................   135
    Department of Justice: Fair Housing and Equal Opportunity....   135
    Department of the Treasury: Office of Federal Housing 
      Enterprise Oversight.......................................   136
Title IV--Corporations:
    Federal Deposit Insurance Corporation and Resolution Trust 
      Corporation................................................   138
    Resolution Trust Corporation.................................   139
Title V--General provisions......................................   140
                              INTRODUCTION

    The Departments of Veterans Affairs and Housing and Urban 
Development and Independent Agencies appropriations bill for 
fiscal year 1996 embodies a comprehensive and systematic 
restructuring of Federal programs and activities within its 
jurisdiction.
  --Critical activities are refocused and augmented;
  --Initiatives to begin the difficult process of restoring 
        fiscal reality and improve efficiency are identified 
        and funded;
  --Obsolete and failed activities are terminated;
  --The proliferation of small, burdensome, categorical 
        programs is cleared away and delegated in block grants 
        to States and local governments; and
  --Unsustainable policy mandates are repealed.
    There is no longer any dispute over the critical need to 
reduce excessive Federal spending and to bring the budget back 
into balance. It has been nearly 30 years since the Federal 
Government curbed its appetite for spending to match its 
income. Since that time, Federal outlays have increased from 
$184,000,000,000 to nearly $1,600,000,000,000. The gross 
Federal debt has soared from less than $370,000,000,000 to 
nearly $5,000,000,000,000. Interest on the Federal debt now 
exceeds the $260,000,000,000 annual expenditure for domestic 
discretionary programming by over $100,000,000,000.
    Unless these alarming budgetary trends are reversed, 
resources available for discretionary programs such as those 
fund in this appropriations bill will soon shrink to negligible 
levels. The Committee accepts measured reductions in 
discretionary spending as a necessary component of the 
multiyear budgetary plan to balance the Federal budget by the 
year 2002, if only because the consequences of failing to make 
such prudent reductions will be devastating. In addition, a 
balanced Federal budget will fuel new vitality in our Nation's 
economy which will provide the revenue necessary to sustain 
these governmental programs.
    The artificial stimulus of runaway deficit spending has 
failed. It is collapsing under the weight of a massive Federal 
debt, and is being crowded out by the pressure to meet interest 
payments on the debt. The bitter medicine of the congressional 
budget resolution is the only antidote to this poisoning of our 
Nation's economic health. Moreover, it is our best chance of 
sustaining needed Federal assistance through discretionary 
programming, and that remedy is reflected in this 
appropriations bill.
    Finally, the budget crisis has created a rare opportunity 
to address long festering problems and examine archaic social 
theories underpinning many failing governmental programs. The 
broad debate over welfare reform, in part is being conducted, 
in part, in the restructuring of low-income housing assistance 
programs funded in this appropriations bill. There is 
widespread acceptance that high-rise public housing for 
families has failed as a housing strategy, and that these drug-
infested, crime-breeding blights must be demolished. This bill 
provides a targeted focus on such efforts, but it also examines 
the root causes of such horrendously expensive failures, and 
recommends comprehensive reform proposals to prevent such 
conditions from reoccurring.
    Another aspect of the recommendations of the Committee is 
to assess the value of services provided through the 
appropriations contained in this measure. In some cases, 
existing delivery schemes and organizational structures have 
been found deficient. For example, while most veterans medical 
facilities deliver top quality health care services, many 
instances of systemic inefficiencies and a number of cases of 
substandard care have been painfully documented. The Committee 
is recommending accelerated adoption of industry-wide standards 
of health care delivery for the VA system. In addition, the 
Committee has targeted budgetary reductions in the Washington 
DC, headquarters bureaucracy which impedes rather than 
facilitates innovation and initiative at the local hospital and 
clinic level.
    The Committee has also seized this opportunity to probe 
deeply into the structure and management of the Environmental 
Protection Agency. The critical mission served by EPA requires 
substantial direct funding, and through its regulatory 
authorities, imposes an enormous financial burden on all 
Americans. The Committee has recommended a new focus in the 
Agency on improving the quality of the scientific basis for its 
regulatory decisionmaking. In addition, the Committee reviewed 
the internal resource allocation management structure of EPA 
and is recommending a number of improvements to assure better 
cooperation with other levels of government, and to focus 
Federal expenditures on activities of greater environmental 
benefit.

                           Budgetary Overview

    The appropriations bill for the Departments of Veterans 
Affairs and Housing and Urban Development, and Independent 
Agencies for fiscal year 1996, reflects two principal concerns, 
both budgetary in nature. The first is the reversal in trend of 
annual increases in budgetary outlays for discretionary 
activities.
    Over the past decade, discretionary outlays for programs 
funded in this bill have increased at an average annual rate 
approaching 15 percent per year, primarily driven by the 
cumulative growth in low-income housing assistance programs and 
inflationary costs related to veterans medical care. The 
congressional budget resolution for fiscal year 1996 (H. Con. 
Res. 67), however, abruptly reverses this trend, halting 
further continued expenditure growth in these programs. To 
comply with this dramatic shift in spending policies, the 
recently enacted Rescission Act for fiscal year 1995, Public 
Law 104-19, canceled a total of $8,500,000,000 in previously 
appropriated funds for programs included in this bill.
    The second, and perhaps more significant budgetary concern 
is the future year constraints reflected in the budget 
resolution 7 year projection toward eliminating the Federal 
deficit by the year 2002. While overall nondefense 
discretionary expenditures are required to drop by 2.9 percent 
in fiscal year 1996, the reduction proposed for fiscal year 
1997 totals 4.4 percent, and approximately 2 percent per year 
thereafter.
    The Committee, therefore, is confronting a profound shift 
from year-to-year budgetary increases to a multiyear period of 
substantial declines in aggregate funding support, in addition 
to the erosion in program levels resulting from inflationary 
factors. This reversal in funding trends is especially 
substantial for activities and programs sustained by funding in 
this appropriations bill.
    These constraints have forced the Committee to propose 
substantial changes in program structure and policies which 
traditionally have been the responsibility of the authorizing 
committees. It would have been desirable and more appropriate 
to enact these major policy changes through the authorizing 
process, but delays in the consideration of those measures 
leave the appropriations process little choice but to proceed 
with needed program reforms so as to minimize program 
disruption due to budgetary cuts, and to facilitate changes 
necessary to prepare these programs for future year reductions.

                      housing programs cost growth

    The Department of Housing and Urban Development is one of 
the largest Federal Departments in terms of domestic 
discretionary spending, with an annual outlay total approaching 
$30,000,000,000. It expends more discretionary funds than any 
other entity in the VA, HUD, and Independent Agencies 
appropriations bill. What is particularly striking, and 
surprisingly so, is the fact that HUD is also one of the 
Federal Government's fastest growing Departments in terms of 
discretionary spending (about 9 percent per year).
    In addition, current HUD expenditure levels cannot readily 
be reduced because of the magnitude of previously made long-
term contractual commitments and obligations. At the end of 
fiscal year 1995, HUD amassed a total of $219,000,000,000 in 
unexpended budget authority from appropriations made in prior 
years, an amount exceeding the accumulated balance of the 
Department of Defense ($188,000,000,000), and one which dwarfs 
all other Federal agencies.
    Subsidized low-income housing is the largest component of 
HUD spending activities, along with community development 
activities such as the community development block grant 
[CDBG]. Both activities are noteworthy for remarkable growth 
over the past decade, but also for the unique characteristic of 
being funded with new budget authority which has negligible 
outlay impact in the year in which the appropriation was made. 
Through this budgetary quirk, substantial increases have been 
made in program levels, evading normal budgetary controls which 
have had the tendency to focus on limiting outlays on a year-
by-year basis.
    Discretionary Federal assisted housing outlays grew 
steadily from a modest $165,000,000 in 1962 to $5,500,000,000 
in 1980, and soared to an estimated $23,700,000,000 in 1994. 
This is a rate of growth more than triple that of overall 
domestic discretionary spending since 1980. Fully 10 percent of 
all domestic discretionary outlays are now devoted to housing 
assistance, compared to the 4 percent it consumed in 1980 or 
the less than 1 percent share it occupied in the 1962 budget.
    It is surprising that such substantial budgetary growth 
could have occurred, especially in recent years, given the 
increasing constraints on discretionary spending. Perhaps more 
surprising is that this dramatic growth has received little 
attention during the annual debates over the size of the 
discretionary budget. A number of factors have obscured the 
budgetary impact and implications of current housing policies. 
The magnitude and growth rate of subsidized housing outlays, 
however, can no longer be ignored, especially in light of 
previously enacted budget caps which freeze aggregate 
discretionary outlays and the prospects for still further 
reductions.
    There are a number of characteristics of Federal low-income 
housing assistance which give rise to very unique budgetary 
concerns. Currently, approximately 4,800,000 families benefit 
from federally assisted housing programs. Failure to renew 
these subsidy arrangements mean eviction. To avoid such 
hardships, Congress has been called upon since 1990 to provide 
new appropriations for renewal of such expiring contracts. The 
funding needs for section 8 contract renewals are anticipated 
to soar above $17,000,000,000 annually in the next few years.
    In addition, since many of the FHA multifamily 
developmental assistance contracts entered into in the late 
1960's and early 1970's are also becoming eligible for 
termination, a new program entitled ``low-income housing 
preservation'' was enacted and is rapidly growing in cost. This 
program is designed to provide subsidies as an incentive to 
owners to maintain these developments for rental to low- and 
moderate-income families, again to avoid hardship for tenants 
who would otherwise be displaced.
    This commitment to continue assistance for rental units and 
families occupying these units has resulted in a housing 
subsidy program which is all but permanent in duration. Each 
annual increment of additional housing units brought under 
subsidy increases the overall size of the inventory since 
almost no units ever are eliminated. This means that the annual 
outlay subsidy cost increases at a cumulative rate as the 
inventory expands. HUD now estimates that it has about 
4,800,000 units under subsidy, an increase over the 1980 total 
of about 55 percent.
    In addition to inventory driven cost growth, annual subsidy 
outlay increases exceeded changes in the unit count because of 
inflationary pressures on maintenance costs, utilities, 
insurance, depreciation and replacement calculations, and real 
estate appreciation. Finally, many public housing developments 
are incurring substantial additional costs of providing 
security improvements and services to prevent further crime and 
deterioration in their developments. These cost factors have 
forced the average annual per unit HUD subsidy (for all 
different forms of housing assistance) from $1,716 in 1980 to 
nearly $4,600 in 1994. The average per-unit cost in subsidizing 
a new section 8 certificate or voucher contract for fiscal year 
1995 is $6,857 per year. Absent major changes in Federal 
housing policies, there is no reason to expect this annual 
escalation in subsidy rates to abate.
    The per-unit cost growth in housing subsidies, when 
combined with the growth in the number of units in the 
inventory, have yielded an average compounded annual growth 
rate of 8.6 percent over the past 5 years for HUD assisted 
housing outlays.
    Long-term contracts and delays in expending funds for 
housing construction and other community development activities 
cause an outlay pattern for HUD which is unique. Less than 10 
percent of the estimated $30,000,000,000 of HUD outlays, 
Departmentwide, in fiscal year 1996 will result from budget 
authority appropriated in that year. The other 90 percent will 
flow from contracts and budget authority in previous years. 
Moveover, these outlays from prior year authority are estimated 
to rise by $3,000,000,000 over that in fiscal year 1995. In 
other words, the increase in prior year outlays will match the 
entire outlays all new budget authority provided for fiscal 
year 1996, so even if the entire Department was provided only 
close-out funding, outlays would still increase over the 
current year level.
    Sustaining the existing rate of outlay growth for housing 
and community development will be impossible under the overall 
reductions imposed on discretionary outlays. Making the 
necessary programmatic changes even to moderate the rate of 
increase in outlays for HUD will necessarily be dramatic given 
the limited impact of new budgetary authority cuts on current 
outlays. In addition, the thicket of long-term contractual 
obligations, as well as FHA development guarantees, complicate 
any attempt to shift significantly existing housing policies.
    Failure to confront directly this budgetary and 
programmatic problem with a defined strategy and approach will 
only permit greater losses in affordable housing stock since 
generally applied annual funding reductions will first 
devastate public housing, then lead to losses in the section 8 
tenant-based and project-based inventory.

                 growth in veterans medical care costs

    In a similar long-term budgetary cost growth trend, 
discretionary expenditures for the veterans health care system 
have grown by 85 percent over the past decade. This pattern of 
annual cost growth cannot be continued in the face of the 
budgetary assumptions of the congressional budget resolution 
(H. Con. Res. 67) which restrains annual growth to between 1 
and 3 percent.
    The VA medical care appropriation represents approximately 
50 percent of the new outlays in the VA, HUD, and Independent 
Agencies appropriations bill. In this restrained budgetary 
environment, to provide increases of the magnitude of the past 
would require massive additional reductions to housing, space, 
and the environment.
    As previously discussed, the budgetary growth patterns of 
programs funded in this appropriations bill are totally at odds 
with recently adopted congressional budget policies which 
require substantial nominal reductions in discretionary 
spending over the next several fiscal years. This shift in 
budgetary priorities demands a comprehensive reappraisal of 
funding allocations, program structure and design, and 
governmental strategies to meet national goals.
Department of Housing and Urban Development
    As previously noted, the imbedded cost structure of 
federally assisted housing programs simply cannot be continued 
during this period of declining discretionary spending. The 
Committee is proposing landmark changes in the structure and 
nature of housing policies to enable local housing agencies, 
community organizations, and the private housing industry to 
adjust to declining Federal subsidy levels which have sustained 
and expanded this enterprise over the past 30 years. These 
program and policy changes cannot be implemented without 
significant hardship and dislocations. However, unless this 
process is immediately undertaken with focused deliberation and 
determination, the potential for devastating loss of affordable 
housing stock and homelessness will greatly increase.
    In addition to these policy changes, the Committee is 
recommending major restructuring of the Department's programs 
to eliminate an unwieldy number of proliferating categorical 
activities, in favor of broad, multipurpose, financial-
assistance grants to States and local units of government. This 
effort is designed to reduce the crushing weight of Federal 
administrative and regulatory burdens on local program 
managers, and to reduce sharply an agency which widely has been 
cited as among the most dysfunctional in the Government.
    The Committee concurs with much of the criticism voiced of 
this Department, and agrees that this organization must be 
completely transformed if it is to survive under the budgetary 
pressures and popular demands for greater program 
accountability. It is clear, however, that irrespective of 
whether this Department continues to exist, there remains a 
substantial and growing need for housing and urban development 
in the Nation. Previous commitments by Congress to meet these 
housing needs make it incumbent on the Federal Government to 
continue a major role in this area. Moreover, the magnitude of 
previous appropriated budgetary commitments and financial 
obligations of the Department demand a substantial and 
effective entity to administer. Fiscal prudence alone demands 
aggressive efforts to protect these financial interests.
Department of Veterans Affairs
    As noted previously, the cost growth in medical services 
provided to veterans cannot be continued during this period of 
declining discretionary budgetary resources. It is imperative 
that the Department of Veterans Affairs aggressively pursue 
reforms in service delivery to utilize available funds more 
efficiently, to prevent reductions in assistance levels to 
eligible veterans.
    The veteran population is declining, and its needs are 
changing as it ages. While the Veterans Health Administration 
historically has been a hospital-based medical system primarily 
serving acute care needs, its population is demanding 
community-based, outpatient and preventive health care 
services. Far less is being demanded in the way of inpatient 
services.
    It is clear that VA can do more with less--and can become a 
more efficient, customer-oriented, high-quality health-care 
delivery system. Numerous inefficiencies have been identified 
in the VA medical system, including an overreliance on 
hospitalization rather than ambulatory care, excessive payments 
related to its affiliations with medical schools, poor 
management of its pharmaceutical procurement and delivery 
systems, its bureaucratic administration of ascertaining 
veterans eligibility for care, and its insistence on 
maintaining services in underutilized areas.
    VA must become a more agile, efficient, and modern health 
care delivery system, transitioning away from the hospital-
based medical system of the past. While less than the amount 
requested, the Committee recommendation for VA medical care 
represents the largest dollar increase over current funding 
levels in the VA, HUD, and Independent Agencies appropriations 
bill, and will enable the Department to begin to implement 
major, systemic changes to its health care delivery system to 
enable it to become a leaner, more efficient system.
    In view of the pending reorganization of the Veterans 
Health Administration, and potential changes which may result, 
the Committee has put a moratorium on new major construction 
spending. However, the Department is to ensure that all 
critical code deficiencies and accreditation requirements are 
met through minor construction spending.
National Aeronautics and Space Administration
    NASA has been engaged in a comprehensive redirection of 
basic operating principles to promote greater efficiency and 
flexibility in pursuing major scientific and engineering 
development programs. The Committee recommendation leaves 
intact the Nation's commitment to deploy the international 
space station, while making significant reductions in lower 
priority activities of the agency.
    Also included in the bill are funds to continue critical 
investments in aeronautical technologies which underpin the 
future competitiveness of our Nation's commercial aircraft 
manufacturing industry. These high value, high technology 
products are crucial to maintaining one of our most significant 
sources of export sales and domestic manufacturing employment.
    The Committee also maintains adequate funding to pursue an 
effective global-climate-change research program, and to follow 
through on other ongoing scientific mission developments.
Environmental Protection Agency
    The commitment of the Nation to securing improvements in 
the environment and to protect vital natural resources is 
reflected in the Committee's recommendation to continue 
substantial funding for this Agency despite the overall 
constraints of discretionary budgetary limitations. The future 
year reductions in these funding levels however, will erode our 
ability to maintain current levels of environmental protection 
unless reforms are undertaken now to focus these resources on 
the most significant threats to our air, water, and land 
resources.
    The Committee held a hearing earlier this year on the need 
to reform the Environmental Protection Agency [EPA], with a 
particular focus on a report compiled by the National Academy 
of Public Administration [NAPA] at this Committee's request. 
NAPA recommended major systemic changes to EPA, and identified 
numerous areas in which EPA is unnecessarily duplicating or 
micromanaging State and private sector environmental protection 
activities. NAPA recommended management and structural changes 
which could bring about significant efficiencies and 
improvements in the way EPA operates. In addition, NAPA agreed 
that EPA is not adequately prioritizing activities and 
resources based on risk to human health and the environment.
    The Committee believes the NAPA recommendations should 
provide the basis for change at EPA. The Committee's 
recommendation for EPA is intended to begin to implement the 
NAPA's suggestions, streamline EPA activities, and focus its 
resources on high-risk areas.
National Science Foundation
    The Committee's recommendation continues current funding 
levels for the NSF which is responsible for most of the basic 
research grant funding provided by the Federal Government. 
Basic research, which seeks to improve our understanding of 
fundamental scientific principles and processes, provides the 
knowledge base which enriches our society and from which spring 
the development of applied technologies which drive our 
economy. Moreover, the Foundation is responsible for model 
educational and human resource developmental activities which 
seek to stimulate improvements in science and mathematics 
education. These goals of the Agency remain a critical national 
priority which hopefully will be sustained despite the 
impending reductions in discretionary budgets.
Federal Emergency Management Agency
    The Committee's recommendation for the Federal Emergency 
Management Agency ensures an adequate level of resources for 
retaining a strong and capable national disaster management 
system. While no funds are provided for the disaster-relief 
fund, approximately $8,000,000,000 currently is available for 
disaster relief owing to the recent supplemental appropriation 
in Public Law 104-19.

              reprogramming and initiation of new programs

    The Committee continues to have a particular interest in 
being informed of reprogrammings which, although they may not 
change either the total amount available in an account or any 
of the purposes for which the appropriation is legally 
available, represent a significant departure from budget plans 
presented to the Committee in an agency's budget 
justifications.
    Consequently, the Committee directs the Departments of 
Veterans Affairs and Housing and Urban Development, and the 
agencies funded through this bill, to notify the chairman of 
the Committee prior to each reprogramming of funds in excess of 
$250,000 between programs, activities, or elements unless an 
alternate amount for the agency or department in question is 
specified elsewhere in this report. The Committee desires to be 
notified of reprogramming actions which involve less than the 
above-mentioned amounts if such actions would have the effect 
of changing an agency's funding requirements in future years or 
if programs or projects specifically cited in the Committee's 
reports are affected. Finally, the Committee wishes to be 
notified regarding reorganizations of offices, programs, or 
activities prior to the planned implementation of such 
reorganizations.
    The Committee also expects that the Departments of Veterans 
Affairs and Housing and Urban Development, as well as the 
Corporation for National and Community Service, the 
Environmental Protection Agency, the Federal Emergency 
Management Agency, the Federal Deposit Insurance Corporation, 
the National Aeronautics and Space Administration, and the 
National Science Foundation, will submit operating plans, 
signed by the respective Secretary, administrator, or agency 
head, for the Committee's approval within 30 days of the bill's 
enactment. Other agencies within the bill should continue to 
submit them consistent with prior year policy.
                TITLE I--DEPARTMENT OF VETERANS AFFAIRS

Appropriations, 1995

                                                     \1\ $37,684,180,061

Budget estimate, 1996

                                                          38,606,762,093

House allowance

                                                          37,723,399,000

Committee recommendation

                                                          37,338,705,000

\1\ Reflects rescission of $50,000,000 in Public Law 104-19.
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                          GENERAL DESCRIPTION

    The Veterans Administration was established as an 
independent agency by Executive Order 5398 of July 21, 1930, in 
accordance with the Act of July 3, 1930 (46 Stat. 1016). This 
act authorized the President to consolidate and coordinate 
Federal agencies especially created for or concerned with the 
administration of laws providing benefits to veterans, 
including the Veterans' Bureau, the Bureau of Pensions, and the 
National Home for Disabled Volunteer Soldiers. On March 15, 
1989, VA was elevated to Cabinet-level status as the Department 
of Veterans Affairs.
    The VA's mission is to serve America's veterans and their 
families as their principal advocate in ensuring that they 
receive the care, support, and recognition they have earned in 
service to the Nation. The VA's operating units include the 
Veterans Health Administration, Veterans Benefits 
Administration, National Cemetery System, and staff offices.
    The Veterans Health Administration develops, maintains, and 
operates a national health care delivery system for eligible 
veterans; carries out a program of education and training of 
health care personnel; carries out a program of medical 
research and development; and furnishes health services to 
members of the Armed Forces during periods of war or national 
emergency. A system of 173 medical centers, 376 outpatient 
clinics, 136 nursing homes, and 39 domiciliaries is maintained 
to meet the VA's medical mission.
    The Veterans Benefits Administration provides an integrated 
program of nonmedical veteran benefits. This Administration 
administers a broad range of benefits to veterans and other 
eligible beneficiaries through 58 regional offices and the 
records processing center in St. Louis, MO. The benefits 
provided include: compensation for service-connected 
disabilities; pensions for wartime, needy, and totally disabled 
veterans; vocational rehabilitation assistance; educational and 
training assistance; home buying assistance; estate protection 
services for veterans under legal disability; information and 
assistance through personalized contacts; and six life 
insurance programs.
    The National Cemetery System provides for the interment in 
any national cemetery with available grave space the remains of 
eligible deceased servicepersons and discharged veterans; 
permanently maintains these graves; marks graves of eligible 
persons in national and private cemeteries; and administers the 
grant program for aid to States in establishing, expanding, or 
improving State veterans' cemeteries. The National Cemetery 
System includes 148 cemeterial installations and activities.
    Other VA offices, including the general counsel, inspector 
general, Boards of Contract Appeals and Veterans Appeals, and 
the general administration, support the Secretary, Deputy 
Secretary, Under Secretary for Health, Under Secretary for 
Benefits, and the Director of the National Cemetery System.

                        COMMITTEE RECOMMENDATION

    The Committee has provided $37,338,705,000 for the 
Department of Veterans Affairs, including $19,361,762,000 in 
mandatory spending and $17,976,943,000 in discretionary 
spending. The amount provided for discretionary activities 
represents a decrease of $217,926,061 below the current 
estimate, $1,268,057,093 below the budget request, and 
$384,694,000 below the House amount.
    The recommendation includes $16,450,000,000 for veterans 
medical care, an increase of $235,000,000 above the current 
level. While a decrease below the amount requested, the 
Committee believes that the amount provided will enable the 
Department to provide high quality medical care to its current 
patient population. However, the Committee recommendation is 
intended to send a strong message to the VA that change is 
necessary to accommodate future budgetary shortfalls, to meet 
the changing needs of a declining veteran population, and to 
begin to incorporate more modern modes of health care delivery.
    With an annual discretionary appropriation of approximately 
$18,000,000,000, VA simply cannot be exempted from streamlining 
and implementing reforms, as is being required of the rest of 
the Federal Government. According to numerous testimonies and 
reports issued by VA's inspector general and the General 
Accounting Office, mismanagement is leading to a great deal of 
wasted spending. It is the Committee's intent that budgetary 
savings be brought about through management efficiencies and 
the elimination of wasteful spending--not reductions to patient 
care. While numerous means of achieving budgetary savings are 
noted, the Department is provided with maximum flexibility in 
order to encourage innovation.
    No funding is provided for major medical construction 
projects owing to the pending reorganization of the Veterans 
Health Administration, which may bring about significant 
changes in facilities needs. In addition, most of the projects 
requested by the administration are not authorized.
    Finally, the Committee has provided close to full funding 
for general operating expenses, to ensure the timely and 
efficient processing of veterans benefits claims. Again, 
however, the Committee believes major systemic changes are 
needed within the Veterans Benefits Administration. A raft of 
problems have been identified within VBA--including a 
bureaucratic approach to claims processing, excessive 
regulations, inadequate automation, and a lack of strategic 
planning. The Committee is commissioning the National Academy 
of Public Administration to address these issues and to devise 
a strategic plan to restructure VBA.
    To help offset the increases provided for VA, two 
administrative provisions are included, as in the House bill. 
The first provision impacts less than 1 percent of the veteran 
population, and is intended to prevent a large estate accruing 
to a veteran which will be inherited by remote heirs.
    Currently there is no Federal restriction on who may 
inherit funds in estates maintained by fiduciaries of 
incompetent veterans. According to a September 1980 letter to 
the Comptroller General from the former chairman of the House 
Veterans Affairs Committee, ``Congress intended that distant 
relatives should not be enriched through benefits intended for 
veterans or their immediate families. However, large estates 
consisting of VA benefits are evidently still enriching distant 
relatives who may have had very little to do with the veteran 
and were not affected by his service to the United States.''
    This provision results in $170,000,000 in budget authority 
and $157,000,000 in outlays as an offset to the increase 
provided for VA medical care.
    A second provision authorizes the Department to utilize 
excess premiums collected through VA's insurance programs to 
fund the administrative expenses of these programs. This 
results in savings of $32,000,000 to the general operating 
expenses account.

                    Veterans Benefits Administration

                       compensation and pensions

                     (including transfer of funds)

Appropriations, 1995.................................... $17,626,892,000
Budget estimate, 1996...................................  17,649,972,000
House allowance.........................................  17,649,972,000

Committee recommendation

                                                          17,649,972,000

                          program description

    Compensation is payable to living veterans who have 
suffered impairment of earning power from service-connected 
disabilities. The amount of compensation is based upon the 
impact of disabilities on earning capacity. Death compensation 
or dependency and indemnity compensation is payable to the 
surviving spouses and dependents of veterans whose deaths occur 
while on active duty or result from service-connected 
disabilities. A clothing allowance may also be provided for 
service-connected veterans who use a prosthetic or orthopedic 
device.
    Pensions are an income security benefit payable to needy 
wartime veterans who are precluded from gainful employment due 
to non-service-connected disabilities which render them 
permanently and totally disabled. Under the Omnibus Budget 
Reconciliation Act of 1990, veterans 65 years of age or older 
are no longer considered permanently and totally disabled by 
law and are thus subject to a medical evaluation. Death 
pensions are payable to needy surviving spouses and children of 
deceased wartime veterans. The rate payable for both disability 
and death pensions is determined on the basis of the annual 
income of the veteran or his survivors.

                        committee recommendation

    The Committee has provided $17,649,972,000 for compensation 
and pensions, as requested by the administration and provided 
by the House. This is an increase of $23,080,000 over the 
current budget.
    The estimated caseload and cost by program follows:

----------------------------------------------------------------------------------------------------------------
                                                                1995               1996            Difference   
----------------------------------------------------------------------------------------------------------------
Caseload:                                                                                                       
    Compensation:                                                                                               
        Veterans.......................................         2,226,900          2,246,900            +20,000 
        Survivors......................................           305,259            302,778             -2,481 
        Clothing allowance (nonadd)....................           (68,100)           (68,700)             (+600)
    Pensions:                                                                                                   
        Veterans.......................................           427,900            408,900            -19,000 
        Survivors......................................           359,800            334,600            -25,200 
        Vocational training (nonadd)...................              (150)              (100)              (-50)
    Burial allowances..................................           102,800            102,100               -700 
Funds:                                                                                                          
    Compensation:                                                                                               
        Veterans.......................................   $11,457,695,000    $11,562,863,000      +$105,168,000 
        Survivors......................................     3,036,153,000      3,017,599,000        -18,554,000 
        Clothing allowance.............................        33,452,000         33,738,000           +286,000 
        Payment to GOE (Public Laws 101-508 and 102-                                                            
         568)..........................................         2,528,000          3,681,000         +1,153,000 
    Pensions:                                                                                                   
        Veterans.......................................     2,228,200,000      2,219,000,000         -9,200,000 
        Survivors......................................       838,100,000        811,600,000        -26,500,000 
    Vocational training................................           748,000            514,000           -234,000 
    Payment to GOE (Public Laws 101-508, 102-568, and                                                           
     103-446)..........................................        12,905,000         12,305,000           -600,000 
    Payment to medical care (Public Laws 101-508 and                                                            
     102-568)..........................................        10,717,000         11,445,000           +728,000 
    Payment to medical facilities......................         6,000,000          3,000,000         -3,000,000 
    Burial benefits....................................       108,739,000        109,925,000         +1,186,000 
    Other assistance...................................         1,961,000          1,975,000            +14,000 
    Unobligated balance and transfers..................      -110,306,000       -137,673,000        -27,367,000 
                                                        --------------------------------------------------------
      Total appropriation..............................    17,626,892,000     17,649,972,000        +23,080,000 
----------------------------------------------------------------------------------------------------------------

    The appropriation includes $27,431,000 in payments to the 
``General operating expenses'' and ``Medical care'' accounts 
for expenses related to implementing provisions of the Omnibus 
Budget Reconciliation Act of 1990, the Veterans' Benefits Act 
of 1992, and the Veterans' Benefits Improvements Act of 1994. 
The amount represents an increase of $2,251,000 above that 
proposed in the budget owing to the Committee's inclusion of a 
provision limiting payments to incompetent veterans. The 
Department estimates $2,251,000 is needed to administer that 
provision.
    Also, the bill includes language permitting this 
appropriation to reimburse such sums as may be necessary to the 
medical facilities revolving fund to help defray the operating 
expenses of individual medical facilities for nursing home care 
provided to pensioners as authorized by the Veterans' Benefits 
Act of 1992.

                         readjustment benefits

Appropriations, 1995....................................  $1,286,600,000
Budget estimate, 1996...................................   1,345,300,000
House allowance.........................................   1,345,300,000

Committee recommendation

                                                           1,345,300,000

                          program description

    The readjustment benefits appropriation finances the 
education and training of veterans and servicepersons whose 
initial entry on active duty took place on or after July 1, 
1985. These benefits are included in the All-Volunteer Force 
Educational Assistance Program (Montgomery GI bill) authorized 
under 38 U.S.C. 30. Eligibility to receive this assistance 
began in 1987. Basic benefits are funded through appropriations 
made to the readjustment benefits appropriation. Supplemental 
benefits are also provided to certain veterans and this funding 
is available from transfers from the Department of Defense. 
This account also finances vocational rehabilitation, specially 
adapted housing grants, automobile grants with the associated 
approved adaptive equipment for certain disabled veterans, and 
finances educational assistance allowances for eligible 
dependents of those veterans who died from service-connected 
causes or have a total permanent service-connected disability 
as well as dependents of servicepersons who were captured or 
missing in action.

                        committee recommendation

    The Committee has provided $1,345,300,000 for readjustment 
benefits, as requested by the administration and provided by 
the House. This is an increase of $58,700,000 above the current 
budget. The recommended appropriation will provide education 
and training benefits for 559,059 veterans, servicepersons, 
reservists, or dependents.
    The estimated caseload and cost for this account follows:

----------------------------------------------------------------------------------------------------------------
                                                                     1995             1996          Difference  
----------------------------------------------------------------------------------------------------------------
Number of trainees:                                                                                             
    Education and training: Dependents.......................           39,700           39,160             -540
    All-Volunteer Force educational assistance:                                                                 
        Veterans and servicepersons..........................          339,200          355,600          +16,400
        Reservists...........................................          109,341          115,799           +6,458
    Vocational rehabilitation................................           48,000           48,500             +500
                                                              --------------------------------------------------
      Total..................................................          536,241          559,059          +22,818
                                                              ==================================================
Funds:                                                                                                          
    Education and training: Dependents.......................     $100,874,000      $99,401,000      -$1,473,000
    All-Volunteer Force educational assistance:                                                                 
        Veterans and servicepersons..........................      911,853,000      985,512,000      +73,659,000
        Reservists...........................................      133,720,000      147,453,000      +13,733,000
    Vocational rehabilitation................................      296,590,000      309,150,000      +12,560,000
    Housing grants...........................................       14,839,000       14,839,000  ...............
    Automobiles and other conveyances........................        4,901,000        4,901,000  ...............
    Adaptive equipment.......................................       21,500,000       23,020,000       +1,520,000
    Work-study...............................................       29,407,000       33,758,000       +4,351,000
    Payment to States........................................       13,000,000       13,000,000  ...............
    Jobs training (Public Law 102-484).......................        8,416,000  ...............       -8,416,000
    Unobligated balances and other adjustments...............     -248,500,000     -285,734,000      -37,234,000
                                                              --------------------------------------------------
        Total appropriation..................................    1,286,600,000    1,345,300,000      +58,700,000
----------------------------------------------------------------------------------------------------------------

                   veterans insurance and indemnities

Appropriations, 1995....................................     $24,760,000
Budget estimate, 1996...................................      24,890,000
House allowance.........................................      24,890,000

Committee recommendation

                                                              24,890,000

                          program description

    The veterans insurance and indemnities appropriation is 
made up of the former appropriations for military and naval 
insurance, applicable to World War I veterans; National Service 
Life Insurance, applicable to certain World War II veterans; 
Servicemen's indemnities, applicable to Korean conflict 
veterans; and veterans mortgage life insurance to individuals 
who have received a grant for specially adapted housing.

                        committee recommendation

    The Committee has provided $24,890,000 for veterans 
insurance and indemnities, as requested by the administration 
and provided by the House. This is an increase of $130,000 
above the current budget. The Department estimates there will 
be 5,398,882 policies in force in fiscal year 1996.

                  guaranty and indemnity program fund

                     (including transfer of funds)

------------------------------------------------------------------------
                                              Program     Administrative
                                              account        expenses   
------------------------------------------------------------------------
Appropriations, 1995....................    $507,095,000     $65,226,000
Budget estimate, 1996...................     504,122,000      78,085,000
House allowance.........................     504,122,000      65,226,000
Committee recommendation................     504,122,000      65,226,000
------------------------------------------------------------------------

                          program description

    This appropriation provides for the cost of direct and 
guaranteed loans, as well as the administrative expenses to 
carry out the direct and guaranteed loan programs, which may be 
transferred to and merged with the general operating expenses 
appropriation.
    The purpose of the VA Home Loan Guaranty Program is to 
facilitate the extension of mortgage credit on favorable terms 
by private lenders to eligible veterans.

                        committee recommendation

    The Committee has provided such sums as may be necessary, 
estimated to be $504,122,000 for funding subsidy payments of 
the guaranty and indemnity program fund and $65,226,000 for 
administrative expenses. The administrative expenses may be 
transferred to the ``General operating expenses'' account.

                         loan guaranty program

                     (including transfer of funds)

------------------------------------------------------------------------
                                              Program     Administrative
                                              account        expenses   
------------------------------------------------------------------------
Appropriations, 1995....................     $43,939,000     $59,371,000
Budget estimate, 1996...................      22,950,000      52,138,000
House allowance.........................      22,950,000      52,138,000
Committee recommendation................      22,950,000      52,138,000
------------------------------------------------------------------------

                          program description

    The ``Loan guaranty program'' account provides for the cost 
of direct and guaranteed loans, pay subsidies, and covers the 
administrative expenses to carry out the direct and guaranteed 
loan programs.

                        committee recommendation

    The Committee has provided such sums as may be necessary, 
estimated to be $22,950,000 for funding subsidy payments, and 
$52,138,000 to pay administrative expenses. The administrative 
expenses may be transferred to the ``General operating 
expenses'' account.

                          direct loan program

                     (including transfer of funds)

------------------------------------------------------------------------
                                              Program     Administrative
                                              account        expenses   
------------------------------------------------------------------------
Appropriations, 1995....................         $25,000      $1,020,000
Budget estimate, 1996...................          28,000         459,000
House allowance.........................          28,000         459,000
Committee recommendation................          28,000         459,000
------------------------------------------------------------------------

                          program description

    The ``Direct loan program'' account provides funds for 
subsidies to severely disabled veterans for specially adapted 
housing and for administrative expenses to carry out the direct 
loan program.

                        committee recommendation

    The bill includes the requested $300,000 limitation on 
specially adjusted housing loans; such sums as may be necessary 
for subsidy payments, estimated to be $28,000; and $459,000 for 
administrative expenses. The administrative expenses may be 
transferred to the ``General operating expenses'' account.

                      education loan fund program

                     (including transfer of funds)

------------------------------------------------------------------------
                                              Program     Administrative
                                              account        expenses   
------------------------------------------------------------------------
Appropriations, 1995....................          $1,061        $195,000
Budget estimate, 1996...................           1,093         203,000
House allowance.........................           1,000         195,000
Committee recommendation................           1,000         195,000
------------------------------------------------------------------------

                          program description

    This appropriation covers the cost of direct loans for 
eligible dependents and, in addition, it includes 
administrative expenses necessary to carry out the direct loan 
program. The administrative funds may be transferred to and 
merged with the appropriation for the general operating 
expenses to cover the common overhead expenses.

                        committee recommendation

    The bill includes $1,000 for program costs and $195,000 for 
administrative expenses. The administrative expenses may be 
transferred to and merged with the ``General operating 
expenses'' account. Bill language is included limiting program 
direct loans to $4,000.

                 vocational rehabilitation loan program

                     (including transfer of funds)

------------------------------------------------------------------------
                                              Program     Administrative
                                              account        expenses   
------------------------------------------------------------------------
Appropriations, 1995....................         $54,000        $767,000
Budget estimate, 1996...................          56,000         377,000
House allowance.........................          54,000         377,000
Committee recommendation................          54,000         377,000
------------------------------------------------------------------------

                          program description

    This appropriation covers the cost of direct loans for 
vocational rehabilitation of eligible veterans and, in 
addition, it includes administrative expenses necessary to 
carry out the direct loan program. Loans of up to $774 (based 
on indexed chapter 31 subsistence allowance rate) are available 
to service-connected disabled veterans enrolled in vocational 
rehabilitation programs as provided under 38 U.S.C. chapter 31 
when the veteran is temporarily in need of additional 
assistance. Repayment is made in 10 monthly installments, 
without interest, through deductions from future payments of 
compensation, pension, subsistence allowance, educational 
assistance allowance, or retirement pay.

                        committee recommendation

    The bill includes the requested $54,000 for program costs 
and $377,000 for administrative expenses. The administrative 
expenses may be transferred to and merged with the ``General 
operating expenses'' account. Bill language is included 
limiting program direct loans to $1,964,000. It is estimated 
that VA will make 4,567 loans in fiscal year 1996, with an 
average amount of $430.

              native american veteran housing loan program

                     (including transfer of funds)

                                                          Administrative
                                                                expenses

Appropriations, 1995 \1\................................        $218,000
Budget estimate, 1996 \1\...............................         455,000
House allowance.........................................         205,000
Committee recommendation................................         205,000

\1\ Subsidy amounts necessary to support this program were appropriated 
in fiscal year 1993.
---------------------------------------------------------------------------

                          program description

    This program will test the feasibility of enabling VA to 
make direct home loans to native American veterans who live on 
U.S. trust lands. This program is a 5-year pilot program which 
began in 1993.

                        committee recommendation

    The bill includes $205,000 for administrative expenses 
associated with this program in fiscal year 1996, as in the 
House bill. These funds may be transferred to the ``General 
operating expenses'' account.

                     Veterans Health Administration

                              MEDICAL CARE

Appropriations, 1995 \1\................................ $16,164,684,000
Budget estimate, 1996...................................  16,961,487,000
House allowance.........................................  16,777,474,000
Committee recommendation................................  16,450,000,000

\1\ Includes rescission of $50,000,000 in Public Law 104-19.
---------------------------------------------------------------------------

                          PROGRAM DESCRIPTION

    The Department of Veterans Affairs [VA] operates the 
largest Federal medical care delivery system in the country, 
with 173 hospitals, 39 domiciliaries, 136 nursing homes, and 
376 outpatient clinics which includes independent, satellite, 
community-based, and rural outreach clinics.
    This appropriation provides for medical care and treatment 
of eligible beneficiaries in VA hospitals, nursing homes, 
domiciliaries, and outpatient clinic facilities; contract 
hospitals; State home facilities on a grant basis; contract 
community nursing homes; and through the hometown outpatient 
program, on a fee basis. Hospital and outpatient care also are 
provided for certain dependents and survivors of veterans under 
the Civilian Health and Medical Program of the VA [CHAMPVA]. 
The medical care appropriation also provides for training of 
medical residents and interns and other professional 
paramedical and administrative personnel in health science 
fields to support the Department's and the Nation's health 
manpower demands.

                        comittee recommendation

    The Committee has provided $16,450,000,000 for medical 
care. This represents an increase of $285,316,000 over the 
current budget, and decreases of $511,487,000 below the budget 
request and $327,474,000 below the House amount.
    In order to provide the Department with flexibility in 
determining where to reduce spending levels below what is 
proposed in the budget, the Committee has not taken any 
specific reductions. However, the Committee is aware of 
numerous initiatives which the Veterans Health Administration 
could implement to achieve significant cost savings. Many of 
these initiatives have been suggested by the inspector general 
or the General Accounting Office.
    Following is a list of some options and estimated cost 
savings (where available) which have been identified: shift 
inpatient treatment to an outpatient basis where clinically 
appropriate (up to $2,000,000,000); reduce or eliminate 
beneficiary travel ($100,000,000); improve the management of 
VHA's drug formularies ($50,000,000); adopt Medicare rates for 
outpatient fee-basis care ($25,000,000); streamline means-
testing procedures ($9,000,000); improve support services 
($20,000,000); consolidate underutilized services in nearby VA 
medical centers; implement multimonth dispensing of 
prescription drugs; suspend locality-based pay adjustments 
which may be substantially higher than justified; restructure 
ambulatory care services to ensure a more even workload; 
increase sharing arrangements with the Department of Defense 
and discontinue the practice of inappropriately designating 
certain patients in acute care categories.
    This list demonstrates that the amount provided for VA 
medical care is sufficient to provide high quality care to 
those veterans currently being cared for in the VA. However, 
the Committee is not suggesting that changes are not needed. It 
is strongly agreed that VA must begin to undertake major 
reforms in order to provide higher quality and more cost-
effective medical care to veterans in view of the declining 
discretionary budget over the next 7 years coupled with a 
decreasing veteran population.
    Transitioning to ambulatory care.--The Committee believes 
current eligibility requirements for VA medical care badly are 
in need of simplification and reform. The preference for 
inpatient care inherent in current law inhibits VA from 
providing the most clinically appropriate and cost-effective 
care in all instances. To ensure appropriate and cost-effective 
clinical care to veterans in the absence of comprehensive 
legislative changes, the Committee has included a provision 
enabling VA to treat veterans eligible for hospital care or 
medical services in the most efficient manner. Private sector 
medical care systems are employing managed care to use scarce 
medical resources more efficiently while maintaining quality of 
patient care. Similarly, the Committee believes VA should use 
resources to treat eligible veterans in the most appropriate 
and cost-effective medical care settings. Studies have 
demonstrated that VA could use some of these same techniques to 
provide more cost-effective care to its patients. One study of 
VA medical or surgical inpatients' lengths of stay indicated 
that VA could substitute less expensive outpatient or long-term 
care for 40 percent of its nonacute inpatient admissions. The 
Committee supports the Department's efforts to shift as much of 
its inpatient workload to ambulatory care settings as possible, 
to make better use of its resources.
    Veterans integrated service networks.--VHA recently 
announced plans to reorganize into veterans integrated service 
networks [VISN's], enabling the Department to better manage its 
resources and services, which the Committee supports. It is 
expected that the reorganization will bring about important 
changes to VHA and will encourage innovative, modern approaches 
to health care delivery. The Committee strongly supports this 
initiative.
    Currently VHA's allocation of resources amongst its 172 
medical centers is very inequitable, with certain medical 
centers receiving double the resources of other medical centers 
with the same patient load. The reorganization should help to 
correct such inequities, and ensure that the best performing 
medical centers are rewarded. The reorganization should ensure 
that nationwide, veterans have more equitable access to VA 
care, and should encourage innovative, high quality cost-
effective medical care to veterans.
    The Committee notes that certain VA hospitals or wards of 
hospitals have very low occupancy rates, some lower than 50 
percent, particularly for surgical services. As part of the 
reorganization, VHA should strongly consider eliminating 
surgical and other services in such medical centers, and 
consolidate high-cost services. This would enable the 
Department to use its resources more effectively, and ensure 
that quality of care remains high throughout the system.
    Finally, in implementing the new decentralized 
organizational structure, VHA should ensure that specialized 
services for veterans, such as spinal cord injury 
rehabilitation, blind rehabilitation, and post-traumatic-stress 
disorder treatment, receive adequate resources. The Committee 
is concerned that reorganization efforts could endanger the 
national mission of VA's specialized programs and services by 
ceding management authority, service sizing decisions, and 
budget determinations for those national programs to local 
managers. The VHA reorganization calls for VHA national 
headquarters to adopt an oversight role over health care 
facilities in the field to ensure adequate compliance with 
standards based on guidelines and parameters of care. The 
Committee is concerned that VA is proceeding with 
reorganization without first adopting these guidelines and 
standards or the oversight plans and mechanisms to enforce 
them. Under these circumstances, specialized programs, which 
form the core of the VA's mission to disabled veterans, are in 
jeopardy. To avoid erosion of specialized programs, VHA is 
directed to identify total current funding for specialized 
programs listed in the reorganization plan, and is to ensure 
that no less than the amounts budgeted and expended for 
specialized programs in fiscal year 1995 be allocated for the 
maintenance of those programs in fiscal year 1996.
    Access points.--The Committee is aware that the Department 
has plans to expand access to outpatient care. So-called access 
points are being considered in more than 180 locations. While 
the Committee fully supports ensuring that eligible veterans 
have convenient access to VA facilities, and supports the 
concept of community based outpatient care, the Committee is 
concerned about associated policy, legal, and budgetary issues 
which VA ought to address before proceeding with them.
    First, the Committee believes that access points represent 
a significant change in the way VA provides health care. A 
reliance on community-based managed care through contractual 
capitation-based arrangements with private providers 
constitutes an important change in VA policy. This change in 
policy has never been formally articulated by the Department. 
Further, while VHA has directed medical centers to improve 
access to care, no criteria have been established for doing so, 
leaving it up to the individual medical centers to set their 
own policies and standards.
    In addition, the Committee is aware of legal questions 
surrounding VA's contracting authority which would be required 
for certain access points being considered. To provide routine 
care for non-service-connected veterans through contracts with 
private providers, as is contemplated in some instances, may 
require legislation.
    The Committee is also concerned about VA's plans to expand 
care to veterans currently not being cared for in the VA 
system, specifically those who may have access to other means 
of health care. At a time of declining resources, the Committee 
questions the wisdom and fairness of increasing the population 
served by the VA system.
    In addition, the Department has not demonstrated how it 
will sustain the increased costs associated with access points 
and which particular activities may be reduced to offset the 
costs of establishing and maintaining access points.
    Finally, the Committee is concerned that some access points 
are being planned in areas which are within close proximity to 
existing VA facilities. The Committee does not intend to 
prohibit VA from going forward with access points. Indeed, 
access points may represent the future direction for the VA and 
may be an integral component of the VISN's. In addition, access 
points will help meet the needs of underserved rural veterans. 
However, these issues should be addressed before the Department 
proceeds with its plans.
    Decision support system.--The Committee continues to be 
concerned with VA's inability to accurately track costs and 
outcomes related to patient care at VA facilities. Such 
information is critical in order to compare the performance of 
one facility to another, and to appropriately allocate 
resources. VA is in the process of implementing the decision 
support system, an executive information system that will 
provide data on patterns of care and patient outcomes linked to 
resource consumption and costs associated with health care 
services. The Committee urges VA to move forward expeditiously 
with DSS, and wishes to be kept apprised of VA's progress in 
this area.
    HOST.--The Committee is concerned that the Hybrid Open 
Systems Technology [HOST] Program lacks any strategic plan, 
including goals and objectives, appropriate selection criteria, 
and a migration strategy. HOST is intended to test commercial 
off-the-shelf applications in conjunction with VA's 
Decentralized Hospital Computer Program. GAO has made 
recommendations regarding opportunities to improve HOST, 
including the suspension of funding of new HOST projects until 
management deficiencies are corrected. The Committee supports 
GAO's recommendations, and notes that VA's budget request 
includes $15,000,000 for HOST. The Committee wishes to be kept 
apprised of VA's plans and progress in implementing GAO's 
recommendations.
    Given the escalating costs of providing automated data 
processing support to the Veterans Health Administration 
activities, VA should consider alternatives to the current 
processes for the design, development, and maintenance of 
application software. Serious consideration should be given to 
commercial procurements, outsourcing of certain functions, 
reengineering processes, and other cost-effective measures. The 
current policies relating to in-house development and the 
limited use of the HOST program are not likely to provide the 
cost effectiveness required when the demand for ADP support is 
increasing. VA is directed to provide a report to the Committee 
on its ADP cost-containment strategy, with particular reference 
to the issues raised above, by March 1, 1996.
    The Committee is aware of the need for a veterans community 
primary care clinic in Liberal, KS. Veterans in southwest 
Kansas currently face a 3- to 4-hour drive to the nearest VA 
medical center, which is unacceptable. VA should expediously 
establish a clinic to meet the needs of southwest Kansas' 
veteran population, as has been proposed by the Amarillo, TX, 
VA hospital. Resources to establish this clinic are to be 
provided from the allocation to the Amarillo facility.
    The Committee is aware there is a need for outpatient care 
services for veterans in many areas, including Grafton, ND, and 
Wood and Tucker Counties, WV. VA is urged to make every effort 
to meet those needs within available resources.
    The Committee fully supports the administration's budget 
request for lease costs for the relocation and expansion of the 
satellite outpatient clinic near Fort Myers, FL.
    The Committee is aware that the Center for Minority 
Veterans and the Center for Women Veterans may be understaffed. 
Given the importance of evaluating the appropriateness of VA 
services and benefits for women and minorities, the Department 
should consider providing additional staff to these centers.
    The Committee is aware of the difficulty in staffing 
several VA facilities in the southwest, particularly in El 
Paso, TX. This situation is compounded by budgetary constraints 
the VA faces in allocating FTEE's among its facilities. The 
Committee urges that the VA, through the veterans integrated 
service networks engage in intra-VISN FTEE transfers during the 
fiscal year for purposes of staffing as warranted by changing 
circumstances in VA medical facilities. The Committee urges the 
VA to review the staffing situation in El Paso and to move 
personnel as necessary to meet the new service demands that 
will exist if veterans are not required to travel to other VA 
facilities for treatment.
    The Committee urges the Department to continue the 
demonstration involving the Clarksburg VAMC and Ruby Memorial 
Hospital at current levels.
    The Committee strongly urges VA to develop a center to 
coordinate academic training programs for physical therapists 
at the Brooklyn VA hospital. The Committee is aware there is a 
shortage of physical therapists nationwide. A training center 
would provide the opportunity for students to complete research 
projects in physical therapy and rehabilitation. In view of the 
critical shortage of clinical training sites in the New York 
City area, the Brooklyn VA would provide an excellent location 
for such a training program.
    The Committee commends the Department for its participation 
in an advanced coal technology project at the Lebanon, PA, 
Medical Center in which a fluidized bed boiler will cofire coal 
and medical wastes to provide steam for the hospital. Given the 
potential cost savings for energy and hospital waste disposal, 
the Committee directs the Department to study the potential for 
using this technology at other VA facilities.
    Bill language is included, as in the House, delaying the 
obligation of $789,000,000 for equipment and land and 
structures object classifications until August 1, 1996. Similar 
language has been included in previous appropriation bills.

                        committee recommendation

                    medical and prosthetic research

Appropriations, 1995....................................    $251,743,000
Budget estimate, 1996...................................     257,000,000
House allowance.........................................     251,743,000

Committee recommendation

                                                             257,000,000

                          program description

    The ``Medical and prosthetic research'' account provides 
funds for medical, rehabilitative, and health services 
research. Medical research supports basic and clinical studies 
that advance knowledge leading to improvements in the 
prevention, diagnosis, and treatment of diseases and 
disabilities. Rehabilitation research focuses on rehabilitation 
engineering problems in the fields of prosthetics, orthotics, 
adaptive equipment for vehicles, sensory aids and related 
areas. Health services research focuses on improving the 
effectiveness and economy of delivery of health services.

                        committee recommendation

    The Committee has provided $257,000,000 for medical and 
prosthetic research, as requested by the administration. This 
is an increase of $5,257,000 over the current budget and the 
House amount. The Committee has provided an increase for this 
program because it is a critical component of the VA health 
care system. The VA research program attracts outstanding 
physicians to the VA system, and helps to ensure high quality 
cost-effective care to veterans. No funds are earmarked in view 
of the importance of merit-review.
    The Committee recommends that health services research 
funding be used by VHA to develop clinical practice guidelines 
and outcome measures to assess the quality and quantity of 
spinal cord injury medicine. To assure the quality of these 
guidelines and measures, VHA should coordinate its development 
process with other Federal agencies with guidelines development 
expertise including the Agency for Health Care Policy Research. 
To ensure the independence and acceptance of these guidelines 
within the practitioner community, VA should coordinate all 
development activity with consortia of provider and consumer 
groups acquainted with the field of SCI medicine.
    The Committee commends VA for establishing a 5-year public-
private partnership to support research on diabetes, a major 
health concern facing our Nation's veterans, and supports its 
continuation.

                health professional scholarship program

Appropriations, 1995....................................     $10,386,000
Budget estimate, 1996...................................      10,386,000
House allowance.........................................      10,386,000

Committee recommendation

                                             ...........................

                          program description

    The Health Professional Scholarship Program provides for 
tuition, stipend and other educational expenses to eligible 
full-time students leading to degrees in nursing and other 
allied health disciplines. Scholarship recipients incur a 
service obligation to VA for a period of 1 year for each year 
of scholarship support. A minimum 2-year obligation is incurred 
by all recipients. The scholarship program, originally 
established by Public Law 96-330, was implemented in 1982.

                        committee recommendation

    The Committee has not funded this program owing to 
budgetary constraints. This program was created to enhance the 
Department's ability to attract and retain nurses at a time 
when there were significant shortages. The program is no longer 
essential because VA does not have shortages of nurses or other 
health professionals. Individuals currently enrolled in the 
scholarship program will not be impacted by the elimination of 
funding; full funding for current participants was provided in 
earlier appropriations.

      medical administration and miscellaneous operating expenses

Appropriations, 1995....................................     $69,789,000
Budget estimate, 1996...................................      72,262,000
House allowance.........................................      63,602,000
Committee recommendation................................      63,602,000

                          program description

    This appropriation provides funds for central office 
executive direction (Under Secretary for Health and staff), 
administration and supervision of all VA medical and 
construction programs, including development and implementation 
of policies, plans, and program objectives.

                        committee recommendation

    The Committee has provided $63,602,000 for medical 
administration and miscellaneous operating expenses, a decrease 
of $8,660,000 below the budget request, $6,187,000 below the 
current budget, and the same as the House amount. This 
reduction is being taken in view of the Veterans Health 
Administration's reorganization, which is to be implemented in 
fiscal year 1996. The reorganization will decentralize 
decisionmaking to the 22 service areas, and will decrease the 
need for central office oversight. Therefore, the Committee 
does not believe the current FTE level of approximately 800 
Washington-based staff is necessary to oversee the VA medical 
system.
    The Committee has made the following changes to the budget 
request:
  -$5,000,000 from construction management. Consistent with the 
        Committee's decision to eliminate all construction 
        funding in fiscal year 1996, central office 
        construction management is being reduced. Construction 
        management workload at headquarters will be limited to 
        overseeing ongoing projects.
  -$2,000,000 from the transition office. The Committee notes 
        that the transition office replaced the Health Care 
        Reform Office which was responsible for coordinating 
        VA's efforts toward implementing health care reform as 
        envisioned by the President's proposed legislation. 
        This function is not needed at this time given that 
        comprehensive health care reform legislation is 
        unlikely to be enacted this year.
  -$1,000,000 from administration.
  -$660,000 from academic affairs.
    These reductions will result in a staffing level comparable 
to the fiscal year 1986 level, excluding the construction 
management staff who were moved to the field in fiscal year 
1992.

               grants to the republic of the philippines

Appropriations, 1995....................................        $500,000
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                             ...........................

                          program description

    Public Law 102-389, authorized an annual $500,000 grant for 
treatment of U.S. veterans at the Veterans Memorial Medical 
Center [VMMC]. The grant is for the replacement and upgrading 
of equipment and the rehabilitation of the VMMC's physical 
plant and facilities.

                        committee recommendation

    The Committee has not provided any funding for grants to 
the Republic of the Philippines, consistent with the 
President's request and the House mark.

                   transitional housing loan program

                     (including transfer of funds)

------------------------------------------------------------------------
                                              Program     Administrative
                                              account        expenses   
------------------------------------------------------------------------
Appropriations, 1995....................          $7,000         $54,000
Budget estimate, 1996...................           7,000          56,000
House allowance.........................           7,000          54,000
Committee recommendation................           7,000          54,000
------------------------------------------------------------------------

                          program description

    This account provides for the cost of direct loans and the 
associated administrative expenses, for the transitional 
housing loan program to nonprofit organizations.
    VA is authorized under Public Law 102-54 to make 
transitional housing loans to nonprofit organizations 
exclusively for use as transitional group residences for 
veterans who are in a program for the treatment of substance 
abuse. The amount of a loan cannot exceed $4,500 for any single 
residential unit and each loan must be repaid within 2 years 
through monthly installments.

                        committee recommendation

    The Committee has provided $7,000 for the estimated cost of 
providing loans for this new program which shall be transferred 
from the general post fund, associated administrative expenses 
of $54,000 which shall be transferred from the general post 
fund, and a limitation on direct loans of $70,000.

                      Departmental Administration

                       general operating expenses

Appropriations, 1995....................................    $890,193,000
Budget estimate, 1996...................................     915,643,000
House allowance.........................................     821,487,000
Committee recommendation................................     880,000,000

                          program description

    This appropriation provides for the administration of 
nonmedical veterans benefits through the Veterans Benefits 
Administration [VBA], the executive direction of the 
Department, several top level supporting offices, of the Board 
of Contract Appeals, and the Board of Veterans Appeals.

                        committee recommendation

    The Committee has provided $880,000,000 for general 
operating expenses, an increase of $58,513,000 over the House 
amount, and a decrease of $10,193,000 below the current budget 
and $35,643,000 below the budget request.
    The Committee has made the following changes to the budget 
request:
  -$32,000,000 from the administrative costs of the insurance 
        programs. As in the House, the Committee has included 
        an administrative provision enabling the Department to 
        utilize surplus earnings in the insurance programs for 
        administrative expenses associated with those programs, 
        estimated to be $32,000,000.
  -$1,000,000 from general administration travel costs. The 
        Committee is concerned about reports of excessive 
        travel by several high ranking VA officials. The amount 
        provided represents an increase of $500,000 over the 
        fiscal year 1994 level.
  +$1,000,000 for a National Academy of Public Administration 
        study of the Veterans Benefits Administration and the 
        claims processing system, described below.
  -$3,643,000 as a general reduction, subject to normal 
        reprogramming guidelines.
    The Committee continues to be concerned about the backlog 
of claims in the Veterans Benefits Administration. It is simply 
unacceptable that veterans wait, on average more than 5 months 
for decisions about original compensation claims. Despite some 
improvements in reducing the backlog through the use of 
overtime, the backlog is expected to include some 400,000 
compensation and pension claims awaiting action at the end of 
this fiscal year. Additional staff and overtime will not solve 
the backlog problem, but will provide only short-term 
improvements. Systemic problems must be addressed, including a 
bureaucratic, staff-intensive method of processing claims, 
completely inadequate automation of the process, and a plethora 
of cumbersome regulations.
    While the Committee has provided an increase of $58,513,000 
over the House amount for general operating expenses, this is 
not intended to demonstrate support for the status quo. Rather, 
it is intended to ensure timely processing of claims pending 
major VBA reforms, so veterans do not suffer due to the 
Department's problems.
    The Committee continues to be troubled by reports of 
significant shortcomings associated with VBA's modernization 
effort. The modernization effort is intended to improve 
efficiency and timeliness of claims processing, but according 
to the General Accounting Office, reinforced by concerns 
expressed by the General Services Administration and CNA 
Corporation, there are serious problems. According to GAO 
testimony, there has been a complete lack of strategic analysis 
of how the new system will improve service, no examination of 
the costs and benefits, no integration of the various 
initiatives, and no one point of central authority for the 
project. Modernization of VBA is a critical component to 
improving claims processing. This issue must be a top priority 
and must involve more than simply the acquisition of expensive 
hardware. Bill language has been included preventing VBA from 
going forward with stage III of the modernization effort in 
fiscal year 1996. In addition, bill language has been included, 
as in the House, permitting the $25,500,000 earmarked in the 
fiscal year 1995 appropriations act for the VBA modernization 
program to be available for any expense authorized under 
general operating expenses.
    The Committee has provided $1,000,000 to the National 
Academy of Public Administration for a comprehensive assessment 
of the Veterans Benefits Administration with particular 
emphasis on specific steps necessary to make claims processing 
more efficient and less time consuming. NAPA will evaluate the 
modernization initiative and its link to strategic goals and 
priorities, efforts to reengineer the claims processing 
methodology, efforts to simplify rules and regulations, 
performance measures for critical program areas and systems 
modernization efforts, the regional office structure, and the 
roles of the Board of Veterans Appeals and the Court of 
Veterans Appeals. The NAPA review is intended to build on, not 
duplicate, existing efforts to review and make recommendations 
on these issues.
    Bill language has been included, as in the House, providing 
VA with the authority to pay administrative costs of the 
Service Members Occupational Conversion and Training Act.

                        national cemetery system

Appropriations, 1995....................................     $72,604,000
Budget estimate, 1996...................................      75,308,000
House allowance.........................................      72,604,000

Committee recommendation

                                                              72,604,000

                          program description

    The National Cemetery System was established in accordance 
with the National Cemeteries Act of 1973. It has a fourfold 
mission: to provide for the interment in any national cemetery 
the remains of eligible deceased servicepersons and discharged 
veterans, together with their spouses and certain dependents, 
and to permanently maintain their graves; to mark graves of 
eligible persons in national and private cemeteries; to 
administer the grant program for aid to States in establishing, 
expanding, or improving State veterans' cemeteries; and to 
administer the Presidential Memorial Certificate Program.
    There are a total of 147 cemeterial installations in 39 
States, the District of Columbia, and Puerto Rico.

                        committee recommendation

    The Committee has provided $72,604,000 for the National 
Cemetery System, as provided by the House.

                    office of the inspector general

Appropriations, 1995....................................     $31,815,000
Budget estimate, 1996...................................      33,500,000
House allowance.........................................      30,900,000

Committee recommendation

                                                              30,900,000

                          program description

    The Office of Inspector General was established by the 
Inspector General Act of 1978 and is responsible for the audit 
and investigation and inspections of all Department of Veterans 
Affairs programs and operations.

                        committee recommendation

    The Committee has provided $30,900,000 for the inspector 
general as in the House. This is a decrease of $2,600,000 below 
the request and a decrease of $915,000 below the current 
budget.

                      construction, major projects

                     (including transfer of funds)

Appropriations, 1995....................................    $354,294,000
Budget estimate, 1996...................................     513,755,000
House allowance.........................................     183,455,000

Committee recommendation

                                                              35,785,000

                          program description

    The construction, major projects appropriation provides for 
constructing, altering, extending, and improving any of the 
facilities under the jurisdiction or for the use of VA, 
including planning, architectural and engineering services, and 
site acquisition where the estimated cost of a project is 
$3,000,000 or more.

                        committee recommendation

    The Committee has provided $35,785,000 for the ``Major 
construction'' account. This amount provides for no new major 
medical construction projects. The amount funds the 
administration's request for asbestos abatement for ongoing 
projects ($17,625,000); hazardous substance abatement for 
ongoing projects ($500,000); national cemetery system projects 
($6,860,000); the judgment fund ($10,300,000); and claims 
analyses ($500,000).
    The Committee has not funded any new construction projects 
for several reasons. First, the Committee is concerned about 
the outyear budget implications associated with building new 
facilities, and the Department has not demonstrated how it will 
accommodate activation costs for new facilities with a 
declining budget. In addition, legislation has not been 
reported out of the Senate Veterans Affairs Committee 
authorizing construction projects for fiscal year 1996 which 
are not currently authorized; no funds may be expended by the 
Department for unauthorized projects. Finally, until the 
reorganization of VHA is implemented, the Committee believes it 
is premature to begin new construction projects.
    The Committee notes that its recommendation is consistent 
with the opinion of the Senate Veterans Affairs Committee, 
which stated in its report on the fiscal year 1996 budget 
(Senate Report 104-82): ``* * * VA's emphasis on its inpatient 
care and acute care infrastructure--expressed both by its plans 
to build new medical centers and to rehabilitate old ones--is 
cause for concern. The Committee is greatly concerned that this 
may reflect a misallocation of scarce Federal resources to 
health care delivery methods which are relatively inefficient, 
and which have been deemphasized by private sector providers' 
emphasis on ambulatory care facilities.'' The Veterans Affairs 
Committee goes on to ``urge VA to reorient its thinking to the 
enhanced provision of ambulatory care and nonacute care 
services.'' Finally, the Veterans Affairs Committee stated 
that: ``it does not anticipate, absent some extraordinary 
circumstances, authorizing the construction of any new 
inpatient facilities.''
    According to GAO, average daily inpatient workload in VA 
hospitals declined 56 percent between 1969-94 with further 
declines likely. The Committee urges the Department to 
carefully consider how the Department's reorganization efforts, 
and possible realignments which occur as part of 
reorganization, will impact its future facility construction 
and renovation needs. It is expected that the fiscal year 1997 
budget request will be predicated on a careful analysis of, and 
strategic plan to meet, future systemwide needs, recognizing a 
declining and aging veteran population and a shift toward 
outpatient care.
    The Committee notes the compelling needs of veterans in 
east central Florida for medical care, and regrets that current 
and future budget constraints have prevented the funding of the 
proposed Brevard County Medical Center. The Department is to 
make every effort to ensure that the medical needs of all 
eligible veterans in east central Florida who seek VA medical 
care are provided for. In the event that significant additional 
appropriations are not provided for the phased construction of 
the Brevard County hospital in the 1996 appropriations process, 
the fiscal year 1995 appropriation of $17,200,000 shall be used 
for the design and construction of a comprehensive medical 
outpatient clinic, as in the House.
    The Committee notes that the renovation projects requested 
in the budget would address signficant space, functional, and 
technical deficiencies; privacy standards; and handicapped 
accessibility requirements. In particular, the Committee notes 
that the proposed renovation of the Reno VAMC would address 
inadequate fire protection, oxygen systems, air-conditioning, 
handicapped accessibility, and various space deficiencies. 
Similarly, the Perry Point renovation project would address 
Joint Commission on Accreditation of Healthcare Organizations 
[JCAHO] criteria and code requirements, and improve safety and 
ward management. However, as stated earlier, until authorized, 
the VA cannot proceed with these projects; five of the seven 
requested projects are not autorized. Moreover, the VA must 
ensure that each of these facilities will be needed in the 
future to address the needs of a changing veteran population. 
To address critical deficiencies of an immediate nature, 
particularly items required for JCAHO accreditation, the 
appropriation for minor construction has been increased above 
the current funding level.
    The Committee is concerned that VA has not expended funds 
previously appropriated for the Reno project to move the 
project along in a timely manner, and strongly encourages VA to 
utilize currently available funds in an appropriate and 
expeditious manner.
    Several important projects have come to the Committee's 
attention. The Committee notes the high priority associated 
with constructing an ambulatory care addition and patient 
environmental improvements at the Wilkes-Barre, PA, VA Medical 
Center. The Committee also continues to support the central 
air-conditioning project at the Fargo, ND, VA Medical Center. 
And finally, the Committee notes the importance of the 
Providence, RI, regional office relocation. These projects are 
to receive priority consideration for inclusion in the 
President's fiscal year 1997 budget.
    Bill language has been included, as in the House, 
transferring $7,000,000 from this account to the parking 
revolving fund for the San Juan VA Medical Center parking 
facility. This is a technical correction to the fiscal year 
1995 appropriation for that project.

                      CONSTRUCTION, MINOR PROJECTS

Appropriations, 1995....................................    $152,934,000
Budget estimate, 1996...................................     229,145,000
House allowance.........................................     152,934,000
Committee recommendation................................     190,000,000

                          PROGRAM DESCRIPTION

    The construction, minor projects appropriation provides for 
constructing, altering, extending, and improving any of the 
facilities under the jurisdiction or for the use of VA, 
including planning, architectural and engineering services, and 
site acquisition, where the estimated cost of a project is less 
than $3,000,000.

                        COMMITTEE RECOMMENDATION

    The Committee recommends $190,000,000, an increase of 
$37,066,000 over the current budget and the House amount, and a 
decrease of $39,145,000 below the amount requested. The 
increase is provided owing to the importance of meeting basic 
infrastructure improvements such as correction of code 
deficiencies and correcting environmental deficiencies that 
affect patient care areas such as air-conditioning and 
ventilation, handicap accessibility, life safety code, and 
compliance with accreditation standards. The amount provided 
will also ensure that revised technical facility requirements 
to control the potential spread of infectious diseases are met.
    This appropriation account should be used to meet any 
critical requirements, such as safety and fire code 
deficiencies, at facilities which were denied major 
construction funding by the Committee in fiscal year 1996. The 
Committee wishes to ensure such deficiencies are addressed in a 
timely fashion.

                         parking revolving fund

Appropriations, 1995....................................     $16,300,000
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                             ...........................

                          program description

    The revolving fund provides funds for the construction, 
alteration, and acquisition (by purchase or lease) of parking 
garages at VA medical facilities authorized by 38 U.S.C. 8109.
    The Secretary is required under certain circumstances to 
establish and collect fees for the use of such garages and 
parking facilities. Receipts from the parking fees are to be 
deposited in the revolving fund and would be used to fund 
future parking garage initiatives.

                        committee recommendation

    No new budget authority is requested by the administration 
or provided for fiscal year 1996.

       grants for construction of state extended care facilities

Appropriations, 1995....................................     $47,397,000
Budget estimate, 1996...................................      43,740,000
House allowance.........................................      47,397,000

Committee recommendation

                                                              47,397,000

                          program description

    This account is used to provide grants to assist States in 
acquiring or constructing State home facilities for furnishing 
domiciliary or nursing home care to veterans, and to expand, 
remodel or alter existing buildings for furnishing domiciliary, 
nursing home, or hospital care to veterans in State homes. The 
grant may not exceed 65 percent of the total cost of the 
project, and grants to any one State may not exceed one-third 
of the amount appropriated in any fiscal year.

                        committee recommendation

    The Committee has provided $47,397,000 for grants for the 
construction of State extended care facilities. The amount 
provided is the same as the House amount and the current 
budget, and represents an increase of $3,657,000 above the 
budget request. This amount should enable the Department to 
come close to fully funding priority I project requests. The 
Committee recognizes that this program is a cost-effective 
means of meeting the long-term health care needs of veterans.

       grants for the construction of state veterans' cemeteries

Appropriations, 1995....................................      $5,378,000
Budget estimate, 1996...................................       1,000,000
House allowance.........................................       1,000,000

Committee recommendation

                                                               1,000,000

                          program description

    Public Law 95-476, as codified in title 38 U.S.C. 2408, 
established authority to provide aid to States for 
establishment, expansion, and improvement of State veterans' 
cemeteries which are operated and permanently maintained by the 
States. A grant may not exceed 50 percent of the total value of 
the land and the cost of improvements.

                        committee recommendation

    The Committee recommends $1,000,000 for grants for 
construction of State veterans' cemeteries in fiscal year 1996, 
as requested by the administration and provided by the House.

                       administrative provisions

    The Committee has included six administrative provisions 
carried in earlier bills. In addition, a provision is included 
limiting compensation payments to certain mentally incompetent 
veterans with no dependent family members. This provision 
results in $170,000,000 in budget authority and $157,000,000 in 
outlays, which is used to offset the increase provided for 
medical care.
    Another provision is included enabling VA to use surplus 
earnings from the life insurance programs for administrative 
expenses associated with those programs, totaling approximately 
$32,000,000. This provision offsets the reduction to general 
operating expenses.
    The Committee has included an administrative provision 
authorizing VA to convey property to the Federal Highway 
Administration which is necessary for the modernization of U.S. 
Highway 54 in Wichita, KS. The project requires the acquisition 
of approximately 6.3 acres of land, across the south edge of 
the Department of Veterans Affairs Medical and Regional Office 
Center [VAM&ROC], Wichita, KS. The city of Wichita will be 
responsible for providing the appropriate space necessary to 
house the services and equipment currently occupying buildings 
8 and 30, documenting the historical aspects of building 8, and 
relocating the medal of honor memorial. All costs and 
responsibilities, and compliance with all existing statutes and 
regulations associated with transferred land and improvements 
thereon, shall be the sole responsibility of the Secretary of 
Transportation.
    Finally, the Committee has included bill language 
authorizing VA to use supply fund resources for an acquisition 
computer network, as requested by the Department. This will 
enable VA to streamline the procurement process and optimize 
the use of scarce medical resources.
         TITLE II--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Appropriations, 1995.................................... $25,453,518,000
Budget estimate, 1996...................................  24,340,032,000
House allowance.........................................  19,391,383,000
Committee recommendation................................  20,329,167,000

                          general description

    The Department of Housing and Urban Development [HUD] was 
established by the Housing and Urban Development Act (Public 
Law 89-174), effective November 9, 1965. This Department is the 
principal Federal agency responsible for programs concerned 
with the Nation's housing needs, fair housing opportunities, 
and improving and developing the Nation's communities.
    In carrying out the mission of serving the needs and 
interests of the Nation's communities and of the people who 
live and work in them, HUD administers mortgage and loan 
insurance programs that help families become homeowners and 
facilitate the construction of rental housing; rental and 
homeownership subsidy programs for low-income families who 
otherwise could not afford decent housing; programs to combat 
discrimination in housing and affirmatively further fair 
housing opportunity; programs aimed at insuring an adequate 
supply of mortgage credit; and programs that aid neighborhood 
rehabilitation and the preservation of our urban centers from 
blight and decay.
    HUD administers programs to protect the homebuyer in the 
marketplace and fosters programs and research that stimulate 
and guide the housing industry to provide not only housing, but 
a suitable living environment.

                        committee recommendation

    The Committee recommends an appropriation of 
$20,329,167,000 for the Department of Housing and Urban 
Development. This is a reduction of $5,064,351,000 from the 
1995 enacted level, $4,010,865,000 below the budget estimate, 
and $937,874,000 above the House allowance.

                              Introduction

    In January of this year the Committee held a series of 
special hearings on the Department of Housing and Urban 
Development management and budgetary crisis. During the course 
of those hearings the Committee reviewed testimony from a 
variety of witnesses and examined a number of recent reports 
addressing these serious shortcomings of the Department. Among 
the studies analyzed were:
    1. The National Academy of Public Administration [NAPA] 
July 1994 study, ``Renewing HUD: A Long-Term Agenda for 
Effective Performance.'' This study, ordered by this Committee 
in September 1992 found that over the past 15 years the number 
of HUD programs have grown, its program flexibility has been 
sharply curtailed, and its financial exposure has increased. It 
urged expeditious, comprehensive consolidation and 
reauthorization of HUD programs and called for broad waiver and 
demonstration authority to foster innovation and respond to 
community initiatives.
    Finally the academy report stated that ``[i]f, after 5 
years, HUD is not operating under a clear legislative mandate 
and in an effective, accountable manner, the President and 
Congress should seriously consider dismantling the Department 
and moving its core programs elsewhere.''
    2. The HUD reinvention blueprint which declared that 
``[c]onsolidation and devolution will change the way HUD 
interacts with families and communities, and, consequently, 
decrease the number of staff and dramatically change the types 
of skills required to maintain productive relationships.'' The 
HUD document proposed to reduce administrative and processing 
requirements for both localities and the Department and improve 
service through less onerous requirements, greater local 
responsibility and flexibility, and less direct HUD 
involvement.
    3. The HUD inspector general's December 1994 report on 
``Opportunities for Terminating, Consolidating, and 
Restructuring HUD Programs'' which identified and evaluated 240 
separate HUD programs. The report proposed eliminating small 
categorical programs with limited impact and high 
administrative burdens; social service activities beyond HUD's 
capacity to administer; heavily regulated, inflexible programs; 
and multiple overlapping programs.
    In her testimony before the Committee, the HUD inspector 
general noted the absence of strong leadership and consistent 
followthrough as a factor in delays in correcting HUD 
management problems, and cautioned that reform efforts would be 
an immensely difficult task.
    4. The General Accounting Office also presented testimony 
which delineated the HUD deficiencies of weak internal 
controls, an ineffective organizational structure, an 
insufficient mix of staff with the proper skills, and 
inadequate information and financial management systems. The 
GAO statement then observed that:

        [s]olving the problems that exist at HUD will not be 
        easy and will require a full reexamination of housing 
        policy and HUD's mission. Budget needs for HUD's 
        programs are growing and, given current housing policy, 
        will remain at high levels for the foreseeable future, 
        in part because of HUD's long-term financial 
        commitments. Also correcting management deficiencies at 
        HUD will take years and will require an infrastructure 
        that provides information on which to base policy 
        decisions. Reforms--be they mild or drastic--could have 
        serious budget and social implications * * *.

    This series of hearings and accompanying reports reinforced 
the developing consensus that the Department of Housing and 
Urban Development indeed is confronting a budgetary and 
management crisis of unprecedented proportions. Moreover, there 
was wide agreement on the desperate need to undertake 
fundamental reversal of Federal housing and community 
development policy which yielded the past several decades' 
record of proliferating programs and administrative burdens. 
Finally, there was a clear call for a structural, disciplined, 
and long-term effort to improve HUD management and 
informational capabilities.
    Every witness emphasized the need for fundamental change, 
requiring a concerted effort by the administration and the 
Congress. It is, therefore, very disconcerting to note that in 
the 9 months which have elapsed since that series of hearings, 
no comprehensive HUD reform measure has been introduced nor has 
any authorizing committee conducted followup hearings in 
delineating the specific legislative steps necessary to address 
these critical issues.
    This Committee pointedly expressed the urgency for 
comprehensive legislation to address the widespread management 
and budgetary problems confronting the Department during the 
consideration of the recently enacted rescission bill for 
fiscal year 1995 (Public Law 104-19). In the Senate report 
accompanying that measure, the Committee stated that:

        [This] recommendation is to provide limited program 
        reform of excessive administrative and bureaucratic 
        burdens on efficient housing management and operations. 
        Although the Committee cannot recommend the 
        comprehensive reform legislation needed by the 
        Department in the context of this emergency 
        supplemental appropriations bill, the need for reform 
        is as desperately urgent in this administrative and 
        budgetary disaster, as in any natural disaster. 
        Hopefully, these initial efforts will set the stage for 
        enactment of a larger and more comprehensive 
        restructuring of departmental activities and 
        responsibilities prior to the consideration of the 
        fiscal year 1996 appropriations bill later in this 
        session of the Congress.--Senate Report 104-17, at page 
        107, March 24, 1995.

    Despite this plea for prompt action, the Committee must now 
confront the responsibility of recommending specific funding 
levels for the Department, and its estimated $1,000,000,000,000 
in programmatic commitments, without the benefit of 
comprehensive legislative formulations by the authorizing 
committees of jurisdiction. The appropriation of another 
$20,000,000,000 for this Department without such comprehensive 
reforms cannot be tolerated. Therefore, the Committee has no 
alternative but to propose an extensive legislative package of 
administrative and management changes which redirect the 
programs and authorities, and which provide a more reasonable 
and justifiable basis for the expenditure of these massive 
sums.
    In addition, within the context of individual program 
funding recommendations, the Committee proposes the 
simplification and consolidation of many individual categorical 
programs as suggested by recent studies of the Department. The 
Committee notes that this is a transitionary period in which 
only a first round of such consolidations are proposed. In 
future years, the Committee anticipates continued progress in 
eliminating many of these remaining separate categories of 
funding as States, localities, and other housing and community 
development organizations adjust and transition their 
activities to this restructuring of the Department and the 
Federal responsibilities.

               HUD Management and Organizational Reforms

Public and Indian housing

    The Committee considered, but has deferred recommending 
statutory provisions to require the implementation of a 
reorganization of the Office of Public and Indian Housing to 
redirect staff resources toward addressing the critical needs 
of troubled public housing authorities, and the need to 
accelerate the demolition of obsolete developments and 
facilitate the development of mixed-use, mixed-income 
replacement housing.
    It is the Committee's view that such reorganization can be 
effectively implemented only through concerted efforts by the 
Department if it shares the concern over the inadequacy of 
meeting these pressing needs. Unfortunately, to date, the 
Committee has seen little evidence of a meaningful commitment 
by the Department to refocus its staffing and management 
resources toward these serious priorities.
    For example, recently the Department assumed control of the 
long-troubled Chicago Public Housing Authority. It is not clear 
whether HUD made a deliberate decision to displace local 
management, but upon the resignation of the authority's 
governing board, the Department decided to replace local 
officials with personnel from HUD headquarters, other HUD 
offices, and with volunteers from other public housing 
authorities. This step, while clearly needed to break a 
downward spiral of housing conditions in the Chicago authority, 
have strained the Department's ability to carry out its ongoing 
responsibilities to assist other distressed public housing 
authorities.
    Such dramatic steps as a Federal takeover simply do not 
represent a sustainable solution to similar problems afflicting 
other troubled authorities across the country in cities such as 
New Orleans, Philadelphia, and Detroit. Rather than engaging in 
such extraordinary crisis management efforts to salvage such 
dysfunctional authorities, the Department must develop a 
strategy to anticipate and prevent such desperate conditions.
    The Committee is convinced that the Department must abandon 
its attempt to administratively control the operations of all 
public housing authorities. Those localities that have 
demonstrated the management ability and desire to independently 
redirect their low-income housing assistance programs should be 
allowed to chart their own course without HUD bureaucratic 
interference. The Department must instead focus its attentions 
toward those housing authorities that are experiencing 
management shortcomings, or are in need of greater assistance 
from HUD in developing more effective programs.
    In addition, the Committee is proposing a concentration of 
resources focused on the urgent task of demolishing failed 
public housing developments. The affected housing authorities 
must replace these obsolete, unworkable, inefficient, and 
excessively costly to maintain projects with mixed income 
developments that have lower concentrations of poverty. An 
alternative to replacement housing includes greater reliance on 
vouchers where such forms of housing assistance will better 
utilize local market resources at lower subsidy cost. Related 
to the demolition of these failed housing projects, HUD also 
needs to dramatically expand its capacity to assist cities and 
local housing authorities in expanding relationships with 
private housing developers and others in utilizing more 
innovative means of developing affordable housing for low-
income families which include tax credits, State debt 
financing, and other capital sources.
    It is clear that these new methods require a very different 
skill mix than is currently represented in the HUD field office 
structure which has been preoccupied with regulatory and 
administrative compliance rather than on economic feasibility 
and analyzing complex financial proposals. Similarly, cities 
and local housing authorities have long forgotten the lessons 
and limitations of creative dealmaking associated with programs 
such as the urban development action grants [UDAG], which 
encouraged leveraging public resources with private capital to 
make possible development projects. Assuring the financial 
viability of such projects and maximizing the return on the 
contribution of public participation requires specialized 
training and skills which are not well represented in the 
current administrative ranks of the Department or the cities.

FHA and multifamily housing management

    In many respects, the deficiencies and mismanagement that 
plague HUD's public housing programs are even worse with 
respect to the Department's portfolio of FHA-insured and 
federally subsidized multifamily project-based assistance 
programs. During hearings earlier this year the HUD inspector 
general cited the alarming condition of portions of HUD's 
multifamily housing program and said that a disturbing number 
of projects are neglected by their owners. Tenants, with their 
rent subsidies tied to these projects, are essentially trapped 
in deplorable conditions and HUD's risk for significant loss is 
enormous.
    Perhaps most alarming was the HUD inspector general's 
assessment of the Department's management and data systems. She 
said that HUD lacks the resources needed, in terms of both 
numbers and expertise, to adequately service loans and section 
8 contracts. She went on to report that HUD's management 
controls in the insured/assisted multifamily housing area are 
also weak. Field office physical property inspections, 
financial statement reviews, and onsite management reviews have 
not been performed in a way that consistently identifies and 
resolves problems.
    Testimony presented by the GAO reaffirmed the findings of 
the HUD inspector general, and stated that HUD's automated data 
systems cannot be relied on to provide relevant, timely, 
accurate, or complete information and do not adequately support 
the early detection of problem loans. Also not having enough 
loan servicers with the proper skills has hampered the 
performance of fundamental FHA activities, such as monitoring 
the insured loan portfolio and servicing loans on properties 
whose owners have defaulted on their mortgages.
    Both were commenting on an insured loan portfolio exceeding 
$30,000,000,000 in contingent taxpayer liability, and on which 
FHA has already established a $10,300,000,000 loan loss 
reserve. Moreover, these subsidized apartment buildings 
currently cost about $8,000,000,000 in annual rental subsidies, 
often at rates which substantially exceed prevailing market 
rents.
    As discussed later in this report, the Department has 
proposed a mark-to-market initiative to address the cost of 
these housing assistance programs. Unfortunately, HUD is 
constrained by its own administrative and data management 
limitations in assessing the impact of its own proposals, and 
has been forced to undertake a special survey to provide more 
accurate information on its multifamily housing inventory.
    In addition, the Department was constrained in proposing 
strategies for reducing the cost of maintaining and subsidizing 
this portfolio of apartment projects by it own acknowledged 
shortcomings in handling the administrative burden of 
undertaking a project-by-project renegotiation of subsidies and 
property management. Instead of recommending individualized 
project assessments and workout arrangements, the Department 
decided to turn over these holdings to a modified liquidation 
process in which private contractual parties would conduct 
property valuations and implement disposition measures based on 
simple financial real estate assessments and FHA loss avoidance 
concerns.
    Naturally, this is of great concern to property owners who 
view such a process as an abrogation of the original low-income 
housing development commitment under which these properties 
were initially developed, very upsetting to affected residents 
of these apartment buildings who face potential displacement, 
and potentially catastrophic to the neighborhoods in which 
these developments sometimes represent the only hope for 
retaining secure and decent affordable housing, and which 
otherwise face continued decline.
    While it is critical that the Department proceed in a 
manner which limits further losses to the FHA fund in handling 
this inventory, its strategies must be sensitive to housing 
policy and community development concerns. These investments 
are more than just financial liabilities on the Federal balance 
sheet, they are sometimes the only affordable housing 
opportunities available to millions of families and represent 
the last hope for holding back the decay and decline afflicting 
many inner-city areas.
    The Committee has proposed alternatives to permit HUD to 
utilize flexible solutions to reduce the heavy subsidy levels 
necessary to maintain some of these developments. 
Implementation of these tools, however, will require the 
expansion of HUD's management capabilities and staffing, 
augmented by resources available from State housing finance 
agencies and community development organizations. HUD must 
abandon its current mindset of liquidating this portfolio in 
the manner utilized by the Resolution Trust Corporation in 
disposing of failed savings and loan assets. The Department has 
the additional responsibilities of preserving affordable 
housing opportunities and preventing low-income resident 
dislocation which require a broader approach to reducing its 
costs.
    As noted later in this report, the Committee is 
recommending increases in FHA administrative limitations to 
permit expansion of the Department's ability to undertake this 
task. The Committee expects the Department to act promptly in 
utilizing these new authorities and resources in correcting its 
serious deficiencies in this significant area of management 
responsibility.

Public housing and tenant-based section 8

    Currently the Federal Government supports the operation of 
about 1.4 million units of public housing administered though 
3,400 local housing authorities. In addition, approximately 1.5 
million units of tenant-based section 8 vouchers and 
certificates are provided directly to low-income families to 
subsidize the rent of privately owned housing.
    The cost of these assisted housing programs have annually 
increased with the addition, each year, of new incremental 
units to the subsidized inventory, and also because housing 
costs are driven by inflationary factors outside the control of 
the administering agency. Utility costs, market demand, local 
development constraints, and building codes, labor wage rates, 
and insurance premiums all contribute to the increased cost of 
housing. In addition, new tenant selection rules which have the 
effect of targeting assistance only to the poorest of the poor, 
have meant declining resident payments toward their housing 
costs, and forced increases in Federal subsidies, while 
creating concentrations of very deep poverty in assisted 
housing developments.
    It is abundantly clear to the Committee that the 
congressionally adopted goal of balancing the Federal budget by 
the year 2002 will make impossible the funding necessary to 
meet the increasing cost of maintaining these housing 
assistance programs. In this context, only one course holds any 
hope to prevent massive dislocation of low-income families, the 
elderly, and the disabled that currently depend on this 
assistance: a dramatic redirection and restructuring of costly 
housing policies and sweeping elimination of administrative 
burdens on local housing providers. Anything short of such a 
major overhaul only will prolong the deterioration and ultimate 
demise of these programs due to declining budgetary support.
    The Committee recommendation, therefore, includes 
legislation to dramatically reduce the rules and federally 
imposed administrative burdens of providing these forms of 
housing assistance. These changes include a repeal of Federal 
preference rules governing the local selection of new 
participants in these programs; modifications of the Brooke 
amendment which set an inflexible standard of a 30 percent of 
income contribution by recipient families toward the rental 
cost of their housing; and the take one-take all and the 
endless lease rules which make private landlords very leery of 
accepting any subsidized residents.
    In addition, the Committee is recommending the creation of 
a new demonstration block grant. Public housing operation 
subsidies, formula-based modernization assistance, and section 
8 tenant-based assistance would be merged into a single unified 
account, with limited performance standards to govern the 
parameters of how local governments craft solutions to their 
own local low-income housing assistance needs.
    The allocation formula for these performance grants would 
be based on current law. The grant would be conditioned on each 
PHA meeting a minimum performance standard: number of occupied 
units maintained for families below 80 percent of median 
income, and a minimum percentage of such units occupied by 
families below 30 percent of median income. Failure to meet the 
low-income family threshold would also reduce assistance.
    The Federal Government provides funding to meet a simple, 
clearly defined need: help lower-income families afford decent 
housing. No detailed requirements on who is served (other than 
minimums on income), no Federal preferences on who is admitted 
into the program, no Federal rules on what has to be charged 
for rent (allowing residents to decide if they are willing, or 
able to pay it), again with the minimum very low-income 
performance standard acting as a market discipline to prevent 
any PHA from attempting to drive out poor families with 
unrealistically high rents.
    Within the context of this broad appropriations construct, 
individual PHA's would be responsible for implementing rent and 
tenant management policies which would be responsive to local 
social service and welfare policies, and to local rental market 
and economic conditions. For example, a jurisdiction which 
implemented a 5-year cap on welfare payments could restructure 
its public or assisted housing contracts to reinforce the 
phaseout of assistance for a family refusing to work. Or if a 
family member took a job, at whatever pay scale, such 
employment would not automatically trigger higher rents as is 
the case with the current Brooke amendment which requires a 30 
percent of income rental payment. This simplified Federal 
housing model would provide much greater flexibility on the 
part of PHA's to tailor housing assistance to complement local 
welfare initiatives.
    An important additional aspect of such program reform would 
be to redefine the role of Federal housing activities to that 
of an asset providing supplementary assistance on a temporary 
basis, and one within reach of all low-income families facing 
the financial pressures of dealing with the high cost of decent 
housing. Currently, only about 30 percent of eligible low-
income families receive housing assistance. The other 70 
percent pay too much, languish on long, barely moving waiting 
lists, and usually receive no help at all. Federally funded 
public and assisted housing should be viewed as a communitywide 
resource, to be allocated in a more equitable manner and 
available for all families seeking to break the bonds of 
poverty and dependence. Not only should it be extended for only 
a limited period, but by limiting tenancy, it would also mean 
that a larger fraction of the eligible population would have a 
greater opportunity to utilize this resource.
    By combining tenant-based section 8 subsidies and public 
housing operating support, local jurisdictions will have the 
flexibility to make decisions regarding their capital assets in 
the context of rental market conditions. Individual public 
housing developments which are costly to operate with low 
market appeal could be disposed of in favor of vouchers. In 
tight markets, more resources could be applied to assure 
continued viability of such valuable assets. Eligibility for 
Federal grants would be based on families assisted, not on the 
size of the inventory of a housing authority.
    This demonstration rental housing assistance grant, with 
very minimal performance criteria, constitutes an entirely new 
housing program wholly separate from the United States Housing 
Act of 1937. Those authorities not participating in the 
demonstration would remain under the legislative and 
administrative constraints of that act.
    Other than the impact of reduced funding, it may take some 
time before any changes are made under the new public housing 
demonstration grant given the ponderous nature of real estate 
tenancy and management. Moreover, previously appropriated 
funding in the pipeline and under contract will continue to be 
administered under existing law. This inherent transition 
period will provide ample opportunity for consideration of 
authorizing legislation to flesh out and address issues 
associated with the dramatic shift in funding orientation. An 
important matter for consideration in the authorizing 
legislation would be the remedial enforcement of PHA 
performance standards along with alterations to the performance 
criteria in anticipation of further funding declines in the 
future.
    In the recently enacted rescission bill (Public Law 104-
19), the Committee provided for the repeal of $6,300,000,000 in 
previously appropriated funding to increase the number of 
subsidized housing units in the Nation. The Committee was 
motivated by a desire to prevent the looming budgetary 
shortfall in continuing funding necessary to sustain these 
assisted housing units, and to avoid the massive dislocation of 
low-income families that would result. In this appropriations 
bill, the Committee is taking the next several steps toward 
empowering local jurisdictions and their residents with the 
authority of redesigning their assisted housing programs to 
survive to difficult years ahead.
    This may be the last opportunity for the Congress to 
affirmatively propose reforms which hold the promise of 
avoiding large-scale resident dislocations and loss of 
affordable housing stock. If this narrow window is missed, 
Congress may have little option but to address the consequences 
of its inaction through increased homeless assistance.

HUD multifamily issues (mark-to-market and preservation)

    HUD provides project-based rental subsidies on about 1.6 
million apartment units in 21,000 private developments. By 
contrast, there are about 1,4 million units in the public 
housing inventory and about 1.5 million tenant-based section 8 
certificates and vouchers. Another 500,000 rental units are 
insured by FHA, but do not receive project-based rental 
subsidies. Unfortunately, some portions of the multifamily 
inventory suffer the same deterioration afflicting some public 
housing, and most are jeopardized by the same looming budgetary 
shortfall which threatens continuing rental subsidies.
    In very rough outlay terms, public housing costs about 
$6,000,000,000 to support, including about $3,000,000,000 for 
capital improvements. Tenant-based certificates and vouchers 
outlays total approximately $9,000,000,000 each year in rental 
subsidies. The multifamily inventory, by contrast, costs HUD 
about $8,000,000,000 annually for rental and interest subsidies 
and loan losses, however, it is far more diverse in terms of 
forms of assistance, and the depth of subsidy.
    The parallel between the public housing inventory and the 
subsidized multifamily housing portfolio can be extended to 
include strategies to address perceived deficiencies. First, 
the need to cull out and demolish failed developments which 
cannot be efficiently operated. Second, changes in resident 
selection and income mix to reduce concentrations of poverty 
and dependence on deep subsidies. Third, capital improvements 
to catch up with deferred maintenance and make these properties 
more competitive. Finally, with respect to the private 
multifamily portfolio, debt restructuring to reflect market 
values.
    Mark-to-market.--Of the 1.6 million HUD multifamily 
inventory, mark-to-market would apply to 900,000 units in 
developments which are both insured by FHA and receive at least 
some section 8 project-based assistance. The core concern, 
however, focuses on about 600,000 of these units which 
currently receive section 8 contract subsidies based on rents 
well over prevailing market rates. These are primarily the 
newer-assisted section 8 new construction/substantial 
rehabilitation portfolio with average contract rents about 30 
percent over fair market rent. Budget constraints will not 
permit renewal of these subsidy arrangements at these rates, 
and if rental income is reduced, much of this inventory will be 
driven into default.
    The majority of this inventory also carries FHA guaranteed 
mortgage balances exceeding market values. FHA, therefore, is 
at risk of suffering significant net losses should these 
projects default. In addition, while FHA has shown some recent 
improvement in handling projects in default, it still is a 
cumbersome, prolonged, and costly process, to be avoided if at 
all possible.
    The HUD mark-to-market proposal is predicated on reductions 
in discretionary appropriation by replacing expiring project-
based assistance only with market rate tenant-based vouchers. 
To avoid defaults and foreclosures, HUD is seeking authority to 
engage third-party intermediaries, joint ventures, or other 
preassignment arrangements to facilitate writedown of the 
mortgage balances to a level sustainable at the reduced rental 
income level.
    Theoretically, this will bring to bear market pricing and 
private sector efficiencies to limit FHA claims and carrying 
costs. This is the heart of the mark-to-market proposal. It is 
also the focus of most of the debate and controversy since the 
details of the process in which subsidies are cut, debt 
restructured, and the steps taken in the disposition of 
properties can have broad implications for potential tax 
recognition problems, excessive losses by FHA, displacement of 
residents, loss of affordable housing stock, injury to existing 
project owners and managers, and further deterioration in 
marginal urban neighborhoods.
    Even the current debate over the formulation of a mark-to-
market property work-out program has consequences. Credit 
markets have been placed on notice that these federally 
subsidized and guaranteed mortgages are a less stable, long-
term capital investment and are increasing discount margins. 
Owners who are confronting an expiration in the subsidy 
contracts in the next few years, and anticipating likely 
mortgage default, may cut their potential losses by immediately 
disinvesting in these properties. This could range from simply 
decreasing management attention and effort, to an aggressive 
effort to remove any funds from the project, leaving only 
enough for a final bankruptcy litigation payment. In either 
case, FHA losses will mount.
    It is important to note that the HUD proposal does not 
apply to 75 percent of the State HFA inventory which are not 
FHA insured (about 300,000 units) as well as a few older 
section 236 and section 221(d)(3) developments which don't have 
any rental subsidies, along with perhaps 300,000 units in 
elderly and disabled housing developments financed under 
section 202 and section 811.
    Irrespective of the process selected, marking down the 
outstanding mortgage amounts on these properties entails 
recognition of substantial losses to the FHA fund. Over the 
first 7 years of mark-to-market, HUD estimates about 
$10,300,000,000 in FHA claims and costs, close to one-half of 
which will be recovered in note and property sales (in addition 
to the $10,000,000,000 loss reserve already set aside for 
losses under current law). These FHA losses are about five 
times the current baseline. Because of the magnitude of these 
losses, only after the seventh year will the proposal begin to 
show net savings, even with the reduction in section 8 subsidy 
payments. The Congressional Budget Office [CBO], which uses 
more pessimistic assumptions on program costs and potential 
recoveries, scores the proposal as a net budget cost increase, 
not a savings, from current law.
    Mark-to-market, however, does represent a profound housing 
policy issue, despite its marginal impact in gross budgetary 
terms. Existing section 8 project-based contracts cannot be 
renewed at these excessive rates of subsidy, and absent some 
legislative remedy, defaults and displacement will occur. 
Revision of the budgetary baseline, reflecting a higher default 
rate, will substantially increase anticipated FHA losses. At 
that point, legislation such as mark-to-market, which is 
designed to avoid or reduce such losses, will be more feasible 
under the Budget Act rules. To the extent that such legislation 
is carefully drawn, it may also achieve reductions in resident 
displacement, prevent loss of affordable housing stock, and 
restore long-term economic viability.
    Failure to affirmatively move legislation will likely 
result in efforts to simply liquidate the defaulting mortgages 
and properties as quickly as possible. Should this be done 
without any form of continuing project-based assistance, or 
without FHA guarantees, net losses of the FHA fund will mount. 
Moreover, only a fraction of these rental units will survive as 
low-income housing, and displaced resident voucher costs will 
be a very heavy new burden on discretionary appropriations, to 
the extent that such assistance is continued.
    Preservation (LIHPRHA reform).--There are parts of this 
inventory that can be maintained at lower net cost than 
incurred under the mark-to-market approach. For example, the 
segment of the FHA-insured portfolio eligible for prepayment 
have HUD regulated rents which average 15 percent below market 
rates. These older assisted section 236 and section 221(d)(3) 
projects were developed with options that allowed owners, after 
20 years, to prepay their FHA-insured mortgages which would 
have removed low-income use restrictions and dividend and rent 
limits, along with interest subsidies.
    If the mortgage is prepaid, residents are confronted by 
likely displacement from rent increases or because the property 
is being converted to another use such as condominiums or 
upscale rental housing. Currently, low-income families (up to 
80 percent of median income) so displaced are eligible for 
vouchers which represents a significant additional and 
continuing expense.
    In 1987 and again in 1990, legislation was enacted to limit 
the ability of owners to exercise their contractual options, 
with financial incentives as compensation. Unfortunately, the 
current preservation program [LIHPRHA] has proven to be very 
costly, and dependent on heavy use of continuing section 8 
rental subsidies, frequently at above market rates. For these 
segments of the inventory, alternatives such as a capital loan/
capital grant has been proposed in order to maximize the 
residual public policy goals served by Federal housing 
programs, while achieving long-term cost savings.
    Effective reform here can be achieved by targeting program 
benefits to projects which can be maintained at reasonable cost 
and avoiding financial windfalls for both owners and residents.

                       Committee Recommendations

    Demonstration for mark-to-market.--The Committee 
recommendation includes an administrative provision which will 
permit the Department to proceed with a demonstration of a 
variety of mark-to-market approaches during fiscal year 1996. 
There are two principal concerns, however, which will limit the 
scope of this demonstration: First, the section 8 contracts 
which are coming up for renewal in this fiscal year are 
primarily below FMR older assisted projects (sections 236 and 
221(d)(3) projects with loan management set-aside subsidies), 
which in large number are also eligible for preservation 
[LIHPRHA] coverage. As such, these are not ideal candidates to 
address the over FMR subsidy concerns which is more prevalent 
in the case of the later expiring section 8 new construction/
substantial rehabilitation portfolio. A different approach has 
been provided for these properties to address the separate sets 
of characteristics and needs.
    The second concern is the inherent mistrust of the 
Department by owners, residents, and others in the industry. 
The Department is being given wide latitude to proceed with a 
demonstration, albeit limited in duration and with some 
safeguards to prevent wholesale disposition of properties, 
without regard to potential adverse impacts on owners, 
residents, or neighborhoods. Within the context of this 
appropriations bill, and given the uncertainties of the precise 
characteristics of the properties involved, it is not possible 
to delineate more specific parameters for the demonstration. 
Indeed, the debate over these issues is the reason for a 
demonstration in the first place. This broad discretion vested 
in the Department, however, does highlight the requirement for 
very close monitoring and oversight.
    Finally, the Department has taken a strong position against 
continuing project-based subsidies and FHA mortgage guarantees 
in its mark-to-market proposal. As with public housing, many 
owners of project-based assisted developments worry that 
vouchering out their residents may lead to vacancies and 
destabilize even well run apartment buildings since they 
weren't originally designed to compete against commercial 
developments.
    The Committee recommendation broadens the Department's 
proposal to authorize a more diverse number of approaches in 
the multifamily workout demonstration. Beyond permitting an 
evaluation of several alternatives, it holds the promise of 
encouraging voluntary participation of property owners, in 
advance of immediately impending contract expirations. The 
current HUD proposal is viewed as basically hostile to the 
interests of owners because it involves a reduction in 
subsidies and may subject them to substantial tax penalties. 
Without more benign alternatives, voluntary participation in 
proactive workouts probably will not occur, and inclusion of 
the later expiring, more heavily subsidized section 8 projects 
will be missed.
    Preservation reform (capital loan/capital grant).--The 
House bill earmarks $200,000,000 from unobligated carryover 
balances in the ``Annual contributions'' account for a new 
preservation program to address the potential prepayment of 
sections 236 and 221(d)(3) projects. Unfortunately, HUD 
anticipates no such funds becoming available, and consideration 
of such program reform has only begun in the authorization 
committees.
    There are approximately 75,000 to 100,000 units in the 
LIHPRHA pipeline which are viable candidates for preservation 
funding. These projects have been in processing for some time, 
often years, and represent a mix between equity take-out deals 
for owners seeking financial incentives to maintain this form 
of low-income housing, and financing of purchases by tenant 
groups and nonprofits. Replacing the existing LIHPRHA program, 
which essentially converts these developments into project-
based section 8, with a capital loan (or a capital grant in the 
case of purchasers) avoids dependence on continuing rental 
subsidies and is cheaper in the long run. The Committee 
recommendation includes legislation that has been prepared to 
accomplish this reform.
    This legislative proposal is designed to provide financial 
incentives to compensate property owners for not exercising 
their contractual right to prepay these use restricted 
mortgages. As such, if a revised program is not enacted, the 
Government is obligated to restoring the right of these owners 
to leave the program, notwithstanding the loss of affordable 
housing stock and the added cost of providing vouchers to 
current eligible residents.
    The Committee recommendation which will convert the current 
section 8 dependent program into a capital loan/capital grant 
program. Also included in the bill under the ``Annual 
contributions'' account is $550,000,000 for this new program 
along with $74,000,000 to pay for vouchers for families in 
developments in which the owner elects to prepay.
    Section 8 renewal policy changes.--The administration 
requested bill language which would limit rents in units 
covered by expiring project-based section 8 contracts. This 
legislation is intended to cause an upward revision in the 
current projections of FHA losses by triggering budgetary 
recognition of a change from the current policy assumption of 
renewal of all expiring rental contracts, at existing subsidy 
levels.
    Pending enactment of such legislation, and their proposed 
mark-to-market proposal, the Department indicated to the 
Congress their intent to replace all expiring project-based 
assistance with vouchers and to proceed with debt 
restructuring, under existing authority. Vouchers will be 
limited to fair market rent [FMR], with some exception for 
higher street rents at up to 120 percent of FMR for residents 
who do not want to move, especially the elderly and disabled. 
This new departmental position threatens owners and residents 
of these projects who have urged temporary extensions, pending 
enactment of further reforms.
    The budget baseline used by both CBO and OMB assumes low 
rates of FHA defaults because of the expected continuation of 
high subsidy payments. This is an impediment to the 
consideration of any proposal to restructure portfolio costs 
because of the resulting increase in writeoffs of outstanding 
principal balances, and losses to the FHA fund. Unless the 
current budgetary baseline is changed to reflect a more 
pessimistic scenario of such losses, new legislation will be 
scored as a net added cost, not a savings.
    In addition, HUD and OMB would like to replace current 
project-based rental assistance with tenant-based vouchers. 
This causes owners and resident groups much concern, as does 
the notion of mandating a reduction in subsidy levels. 
Legislation is included in the Committee recommendation which 
permits 1 year extensions of expiring project-based section 8 
assistance contracts which are less than 110 percent of fair 
market rent.
    Continuing FHA multifamily guarantee program.--The 
Committee recommendation increases the House-passed allowance 
for FHA multifamily credit subsidies from $70,000,000 to 
$100,000,000. HUD had requested $188,000,000 for this purpose. 
The recommended level should be adequate to maintain a 
reasonable FHA multifamily mortgage guarantee program, 
especially if FHA underwriting standards are tightened up. In 
addition to the gross appropriation for FHA credit subsidies, 
language is recommended to extend the multifamily risk-sharing 
demonstration with State housing finance agencies, as well as 
Fannie Mae and Freddy Mac. This latter provision was included 
in the House-passed bill.
    Participation by States and nonprofits.--Both State housing 
finance agencies and community development corporations (like 
LISC and Enterprise) are concerned over the potential impact of 
the Department's single-minded focus on FHA budgetary exposure 
in pursuing multifamily inventory workout arrangements. The 
HFA's are concerned that HUD will squeeze them financially, and 
the CDC's are concerned that HUD policies will ignore potential 
neighborhood impacts and losses in affordable housing stock. In 
addition, both would like to participate in the management of 
property work outs. HUD is developing a pilot arrangement which 
will transfer notes or property to several State HFA's to 
evaluate the capacity of these organizations to facilitate this 
process. In addition, the Committee recommendation includes 
language to provide CDC's and other nonprofits a greater chance 
to participate in the mark-to-market demonstration discussed 
above.
    FHA property disposition reform.--HUD has requested 
language which will exempt FHA from a number of cumbersome, and 
expensive, legal requirements associated with the sale of 
assigned notes or properties in the FHA inventory. This can be 
contrasted to mark-to-market which seeks to deal with this 
inventory before it comes into Government possession. The 
Committee recommendation includes these provisions, with 
limitations, however, on the application of these waivers to 
address concerns from tenant organizations and owners that HUD 
would simply opt for an expedited default, assignment, and sale 
process as an alternative to mark-to-market.
    Section 8 reform.--The Committee recommendation includes a 
number of legislative provisions designed to lower the cost of 
section 8 subsidies, and to make this program behave in a 
manner reflecting prevailing standards of the private rental 
market. These provisions repeal statutory Federal preferences 
for new tenant selection; the take-one/take-all requirement 
which forces HUD assisted project owners to accept an unlimited 
number of section 8 tenants if one is accepted; and the endless 
lease provision which requires a property owner to get a court 
order to terminate tenancy, even after expiration of the 
initial lease term.

HOME and CDBG

    The Department proposed the creation of six major block 
grants to replace the 240 existing categorical programs. Two of 
these proposed grant programs subsume the Community Development 
Block Grant [CDBG] Program and the HOME Investment Partnerships 
Program. The Committee recommendation proposes continuation of 
both of these broadly based and popular block grant programs, 
with adjustments to permit the incorporation for activities 
formerly funded separately in the bill. These specific 
modifications to these programs are discussed in greater detail 
later in the report.

                            Housing Programs

    The administration proposed inclusion of the HOME program 
in a new affordable housing fund block grant which also 
included sections 202 and 811 housing programs for the elderly 
and disabled, HOPWA, lead-based paint abatement activities, 
homeownership programs, and homeless housing programs. As 
discussed later in this report, the Committee concurs with the 
House-passed recommendation that several of these programs 
retain their independent identity, including continuing a 
separate appropriation for the HOME program. HOME has received 
widespread support among cities and local housing providers as 
a flexible and innovative tool with which housing opportunities 
for low-income families can be provided in partnership with 
non-Federal entities, and utilizing resources other than that 
provided by HUD.
    This departure from the highly structured, administratively 
burdensome, and fully Federal funded approach to housing 
assistance is clearly one which parallels the Committee's 
recommendations for existing public housing activities and 
section 8 assistance. Constraints on discretionary spending 
require more innovative and efficient mechanisms in providing 
housing assistance which are not predicated on singular 
dependence on direct Federal appropriated funds on a continuing 
basis.

               ANNUAL CONTRIBUTIONS FOR ASSISTED HOUSING

                    (INCLUDING RESCISSION OF FUNDS)

Appropriations, 1995.................................... $11,083,000,000
Budget estimate, 1996...................................................
House allowance.........................................  10,182,359,000
Committee recommendation................................   5,594,358,000

\1\ Reflects a rescission of $---------- in Public Law 103-211.
---------------------------------------------------------------------------

                          PROGRAM DESCRIPTION

    Currently, the Department's assisted housing efforts 
principally consist of public and Indian housing development, 
the section 202/811 programs for the elderly and persons with 
disabilities, and the section 8 lower income rental housing 
assistance program.
    Public housing development was designed to meet the needs 
of low-income families, particularly for large families and in 
areas where the supply of existing units is inadequate or as 
replacement housing for units lost to demolition or 
disposition. Indian housing development funds are used to 
provide new housing for Indian families. In addition to 
development needs, funding is provided to amend contracts for 
pipeline projects which require additional funds to: (1) reach 
construction start, (2) correct design and/or construction 
deficiencies, or (3) provide for subsequent adjustments in 
funding requirements. Lease adjustments also are funded in 
order to provide annual adjustments to contracts approved under 
the old section 23 leased housing program. These payments 
represent additional subsidies to offset increases in the cost 
of project operations and to provide interim transition 
assistance for projects that are being converted to the section 
8 housing assistance payments program.
    Public and Indian housing modernization is performed 
pursuant to section 14 of the United States Housing Act of 
1937, as amended. Public and Indian housing modernization funds 
enable public housing authorities [PHA's] and Indian housing 
authorities [IHA's] to correct the physical condition and 
upgrade the management and operation of public and Indian 
housing developments, to assure that such developments continue 
to be available to serve lower income families. This may 
involve alterations, additions, or rehabilitation of existing 
structures; replacement of equipment; and improving the 
management and operation of such projects. In addition, 
modernization funds are used to provide technical assistance to 
resident management corporations [RMC's] and to resident 
councils, and for lead-based paint abatement activities. The 
1995 budget request for modernization contains a legislative 
proposal to make modernization funds available for replacement 
housing.
    In 1995, public and Indian housing authorities with 250 or 
more dwelling units will receive funding under the 
Comprehensive Grant Program authorized in the Housing and 
Community Development Act of 1987. PHA's and IHA's with fewer 
than 250 units will receive funding under the Comprehensive 
Improvement Assistance Program.
    The Cranston-Gonzalez National Affordable Housing Act 
authorized a capital grants program to replace the section 202 
direct loan program. In addition, a rental housing assistance 
component was authorized to be used in conjunction with the 
capital grants program to replace the section 8 rental 
assistance associated with the direct loan program. Since new 
projects are financed with a grant, the rental assistance need 
only cover operating expenses. Tenants will pay the higher of 
30 percent of adjusted income, 10 percent of gross income, or 
welfare rent.
    The section 8 program includes a variety of tenant- and 
project-based rental subsidies. This rental assistance may be 
used for existing housing and rehabilitated units. Under the 
section 8 programs, the Department pays the difference between 
what an eligible lower income household can afford (30 percent 
for most programs) and the fair market rent [FMR] for an 
adequate housing unit. However, under the section 8 housing 
voucher programs, the Department provides a fixed amount for 
eligible lower income households based on a payment standard--
regardless of the actual rent.
    Among the other set-asides proposed under the ``Annual 
contributions'' account are funds for: relocation; housing 
opportunities for persons with AIDS; aid to tenants affected by 
public housing demolition and disposition; loan management; 
conversion of section 23 units to section 8 assistance; lead-
based paint hazard reduction; choice in residency; and property 
disposition and preservation activities aimed at maintaining 
the supply of affordable housing for low-income tenants.
    The property disposition set-aside is being proposed as a 
separate mandatory account for 1995. This program provides for 
the use of housing assistance in connection with the sale of 
HUD-owned properties and sale of HUD-held mortgages at 
foreclosure in order to increase and maintain the amount of 
housing affordable by lower income families, to minimize 
displacement of tenants, to preserve and revitalize residential 
neighborhoods, and to dispose of projects in a manner 
consistent with HUD's disposition objectives. The preservation 
program will be funded from carryover balances in 1995. This 
program provides assistance to State or local units of 
government, tenant, and nonprofit organizations to purchase 
projects where owners have indicated an intent to prepay 
mortgages.
    The fiscal year 1996 request for amendments to section 8 
subsidy contracts includes funding to amend existing housing 
(certificates) contracts, moderate rehabilitation contracts, 
project reserves, and property disposition contracts.
    Certificate and moderate rehabilitation contracts are 
amended to support increases in section 8 payments due to rent 
increases and/or decreases in tenant income, and to extend 
contract authority amendments provided in prior years with 
limited budget authority.
    Section 8 project reserve amendments are provided for 
contract and budget authority increases to projects under 
management which have new construction, substantial 
rehabilitation, or loan management section 8 contracts, or have 
property disposition section 8. Housing Finance Development 
Agency and Farmers Home Administration section 8 contracts are 
included.
    The project reserve amendments are made available as 
needed: to fund depleted project reserves where increases in 
section 8 rents have outpaced increases in tenant incomes or 
where tenant incomes are decreasing; to extend contract 
authority amendments provided in prior years with limited 
budget authority (budget authority only amendments); to support 
increases in current contract amounts where eligible owners 
have been granted rent increases to prevent voluntary 
terminations (opt-outs); and, to support debt service on 
section 241(f) loans made in order to prevent prepayment of 
eligible subsidized mortgages.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $5,594,358,000 
for the ``Annual contributions for assisted housing'' account. 
This amount is $5,488,642,000 the appropriations for fiscal 
year 1995, and $4,588,001,000 below the House allowance.
    The Committee's recommendations for fiscal year 1996 for 
the ``Annual contributions'' account are outlined in the 
following table:

                 ANNUAL CONTRIBUTIONS FOR ASSISTED HOUSING FISCAL YEAR 1996--GROSS RESERVATIONS                 
----------------------------------------------------------------------------------------------------------------
                                                                 Units       Cost       Term    Budget authority
----------------------------------------------------------------------------------------------------------------
New authority................................................  .........          $  .........                $ 
                                                              ==================================================
Public housing:                                                                                                 
    Indian housing...........................................      2,004     99,791         NA      200,000,000 
    Modernization............................................         NA         NA         NA    2,510,000,000 
                                                              --------------------------------------------------
      Subtotal, public housing...............................      2,004  .........  .........    2,710,000,000 
                                                              ==================================================
Section 8 and other:                                                                                            
    Elderly:                                                                                                    
        Capital grants/rental assistance.....................      9,654         NA         NA      780,190,000 
    Disabled: Capital grants/rental assistance...............      2,915         NA         NA      233,168,000 
                                                              --------------------------------------------------
      Total, elderly/disabled................................     12,569  .........  .........    1,013,358,000 
                                                              ==================================================
Incremental rental assistance................................     21,239      5,650          2      240,000,000 
Preservation.................................................         NA         NA         NA      624,000,000 
Property disposition.........................................         NA         NA         NA      261,000,000 
Housing opportunities for persons with AIDS..................      6,400         NA         NA      171,000,000 
Lead-based paint.............................................         NA         NA         NA       75,000,000 
Amendments...................................................         NA         NA         NA      500,000,000 
                                                              --------------------------------------------------
      Subtotal, section 8 and other..........................     40,208  .........  .........    2,884,358,000 
                                                              --------------------------------------------------
      Total, annual contributions............................     42,212  .........  .........    5,594,358,000 
----------------------------------------------------------------------------------------------------------------
NA: Not applicable.                                                                                             

    In 1994, nine empowerment zones and 95 enterprise 
communities were awarded grants, tax incentives, and other 
benefits to address economic and infrastructure decay in their 
communities. One year later, those communities still do not 
have a comprehensive list of the benefits to which they are 
entitled under the enterprise zone provisions of the Omnibus 
Budget Reconciliation Act of 1993.
    The Committee directs the Secretary, in cooperation with 
other Federal agencies and departments, to compile a report 
that lists all competitive grants, tax incentives, and other 
Federal benefits with specific advantages or privileges for 
empowerment zones and enterprise communities. The report should 
include details on those benefits and the applicable deadlines 
empowerment zones and enterprise communities must meet to 
qualify for them. This report should be submitted to the 
Committee no later than January 1, 1996.

       assistance for the renewal of expiring section 8 contracts

                     (including transfer of funds)

Appropriations, 1995....................................  $2,536,000,000
Budget estimate, 1996...................................................
House allowance........................................\1\ 4,641,589,000
Committee recommendation................................   4,350,862,000

\1\ Funded in the ``Annual contributions for assisted housing'' account.
---------------------------------------------------------------------------

                          program description

    This program provides continued funding for units affected 
by contract expirations. These contracts are loan management 
contracts, moderate rehabilitation contracts, certificates, and 
vouchers. To ensure that there will be no interruption in 
subsidy payments, the budget proposes language which will allow 
transfer of funds from the annual contributions appropriation 
to this appropriation. The proposed language does not contain a 
mandatory length of time for which contracts must be renewed. 
Consequently, if necessary, contract terms can be adjusted to 
ensure sufficient funds are available to cover all expiring 
contracts. Beginning in fiscal year 1995, the Department 
expects to renew contracts for 2-year terms.

                        committee recommendation

    The Committee recommends an appropriation of $4,350,862,000 
for section 8 contract renewals in fiscal year 1996. This 
amount is $1,814,862,000 above the 1995 enacted level and 
$290,727,000 below the House allowance which provided funding 
for this purpose in the annual contributions account. The 
administration proposed shifting responsibility and funding for 
this purpose to the States and cities under the housing 
certificates fund.

                   rental housing assistance program

                              (rescission)

Appropriations, 1995....................................    -$38,000,000
Budget estimate, 1996...................................     -35,119,000
House allowance.........................................     -35,119,000

Committee recommendation

                                                             -35,119,000

                          program description

    Under the Rental Housing Assistance Program authorized by 
section 236 of the National Housing Act, subsidies provided by 
HUD on behalf of project owners, reduce mortgage interest to as 
low as 1 percent. Some very low-income section 236 project 
tenants receive additional rental subsidies under the Rental 
Assistance Payments Program [RAP].

                        committee recommendation

    The Committee concurs with the House in recommending the 
requested bill language to rescind $35,119,000 for the Rental 
Housing Assistance Program in fiscal year 1996. Of this amount, 
not more than $2,000,000 in contract authority and $35,119,000 
in budget authority results from normal project terminations. 
The balance of $163,000,000 will result from section 236 
mortgage prepayments.

         payments for operation of low-income housing projects

Appropriations, 1995....................................  $2,900,000,000
Budget estimate, 1996...................................................
House allowance.........................................   2,500,000,000

Committee recommendation

                                                           2,800,000,000

                          program description

    Operating subsidies are provided to public housing agencies 
[PHA's] and Indian housing authorities [IHA's] to assist in 
financing the operation of PHA/IHA-owned dwellings in 
accordance with section 9 of the United States Housing Act of 
1937, as amended. Operating subsidies are required to help 
maintain operating and maintenance services and provide for 
minimum operating reserves. The performance funding system 
[PFS] formula is used to calculate the level of operating 
subsidy to be provided to each PHA/IHA to operate its owned 
units.
    The calculated subsidy amount under PFS is the difference 
between the estimate of operating costs minus an estimate of 
income from rents and other sources.

                        committee recommendation

    The Committee recommends $2,800,000,000 for public housing 
operating subsidies in fiscal year 1996. This amount is 
$100,000,000 less than the fiscal year 1995 level and 
$300,000,000 above the the House allowance.

public housing demolition, site revitalization, and replacement housing 
                                 grants

Appropriations, 1995....................................    $500,000,000
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                                             500,000,000

                          program description

    Planning grants may be used for technical and 
organizational support for resident involvement in 
revitalization, neighborhood workshops and impact studies, 
planning for economic development, as well as preliminary 
architectural and engineering work. Funds also may be used for 
job training, self-sufficiency activities, design of 
replacement housing, and management improvements.
    Implementation grants may be used for a wide variety of 
activities, including but not limited to, architectural and 
engineering work, redesign, reconstruction or redevelopment of 
the project, administrative costs, temporary relocation, legal 
fees, economic development activities, management improvements, 
transitional security activities, and support services.

                        committee recommendation

    The Committee recommends an appropriation of $500,000,000 
for grants for the demolition, site revitalization of severely 
distressed public housing and replacement units. This amount is 
the same as the 1995 level. No funding for this purpose was 
requested by the administration and none was included in the 
bill as passed by the House.
    The Committee directs that consideration be given for 
funding to complete already approved HOPE VI distressed public 
housing replacement efforts which involve the redevelopment of 
larger mixed income, public-private leveraged communities, that 
total at least 800 units, and where extraordinary costs such as 
infrastructure improvements are required.

             drug elimination grants for low-income housing

Appropriations, 1995....................................    $290,000,000
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                                             290,000,000

                          program description

    Drug elimination grants provide grants to public housing 
agencies and Indian housing authorities to eliminate drug-
related crime in public and Indian housing by employing 
security personnel and investigators, providing physical 
project improvements to enhance security, supporting tenant 
patrols in cooperation with local law enforcement agencies, 
developing innovative programs to reduce drug, and providing 
resident groups with funds to develop security and drug abuse 
prevention programs.

                        committee recommendation

    The Committee recommends $290,000,000 for drug elimination 
grants. This amount is the same level as the 1995 
appropriation.

                  home investment partnerships program

Appropriations, 1995....................................  $1,400,000,000
Budget estimate, 1996...................................................
House allowance.........................................   1,400,000,000
Committee recommendation................................   1,400,000,000

                          program description

    Title II of the National Affordable Housing Act, as 
amended, authorizes the HOME Investment Partnerships Program. 
This program provides assistance to States, units of local 
government, and Indian tribes for the purpose of expanding the 
supply and affordability of housing. Eligible activities 
include tenant-based rental assistance, acquisition, and 
rehabilitation of affordable rental and ownership housing and, 
also, construction of housing. To participate in the HOME 
Program, State and local governments must develop a 
comprehensive housing affordability strategy [CHAS]. There is a 
matching requirement for participating jurisdictions which can 
be reduced or eliminated if they are experiencing fiscal 
distress.

                        committee recommendation

    The Committee recommends an appropriation of $1,400,000,000 
for the HOME Investment Partnership Program. This amount is the 
same level as the 1995 appropriation and the House allowance.

             indian housing loan guarantee program account

                      (limitation on direct loans)

------------------------------------------------------------------------
                                               Program     Limitation on
                                               account     direct loans 
------------------------------------------------------------------------
Appropriations, 1995.......................   $3,000,000   ($22,388,000)
Budget estimate, 1996......................    3,000,000    (36,900,000)
House allowance............................    3,000,000    (36,900,000)
Committee recommendation...................    3,000,000    (36,900,000)
------------------------------------------------------------------------

                          program description

    Section 184 of the Housing and Community Development Act of 
1992 authorizes the creation of an Indian Housing Loan 
Guarantee Program. The program would provide a 10-to-1 ratio of 
leverage and seed money to finance new construction of homes on 
Indian reservations. The program would allow Indian families 
who can afford housing to remain on their native land and act 
as positive role models for other families aspiring to 
homeownership.

                        Committee Recommendation

    The Committee has included the budget request of $3,000,000 
in program subsidies to support a loan guarantee level of 
$36,900,000. This is the same as the House allowance.

                     federal housing administration

             fha--mutual mortgage insurance program account

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                           Limitation on      Limitation on      Administrative 
                                                            direct loans     guaranteed loans       expenses    
----------------------------------------------------------------------------------------------------------------
Appropriations, 1995...................................       $180,000,000   $100,000,000,000       $308,846,000
Budget estimate, 1996..................................        200,000,000    110,000,000,000        341,595,000
House allowance........................................        200,000,000    110,000,000,000        308,846,000
Committee recommendation...............................        200,000,000    110,000,000,000        341,595,000
----------------------------------------------------------------------------------------------------------------

             fha--general and special risk program account

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                Limitation on     Limitation on   Administrative                
                                                direct loans    guaranteed loans     expenses      Program costs
----------------------------------------------------------------------------------------------------------------
Appropriations, 1995........................      $220,000,000   $20,885,072,000    $197,470,000    $188,395,000
Budget estimate, 1996.......................       120,000,000    17,400,000,000     197,470,000     188,395,000
House allowance.............................       120,000,000    15,000,000,000     197,470,000      69,620,000
Committee recommendation....................       120,000,000    17,400,000,000     202,470,000     100,000,000
----------------------------------------------------------------------------------------------------------------

                          program description

    The Federal Housing Administration [FHA] fund covers the 
mortgage and loan insurance activity of about 40 HUD mortgage/
loan insurance programs which are grouped into the mutual 
mortgage insurance [MMI] fund, cooperative management housing 
insurance [CMHI] fund, general insurance fund [GI] fund, and 
the special risk insurance [SRI] fund. For presentation and 
accounting control purposes, these are divided into two sets of 
accounts based on shared characteristics. The unsubsidized 
insurance programs of the mutual mortgage insurance fund and 
the cooperative management housing insurance fund constitute 
one set; and the general risk insurance and special risk 
insurance funds, which are partially composed of subsidized 
programs, make up the other.
    Pursuant to the requirements for direct and guaranteed loan 
programs established in the Omnibus Budget Reconciliation Act 
of 1990 [OBRA], the administration is requesting a direct 
appropriation for administrative expenses in the ``MMI/CMHI 
program'' account of $341,595,000. Amounts to fund this direct 
appropriation are to be derived from offsetting receipts 
transferred to a ``CMHI receipt'' account. For the ``GI/SRI 
program'' account a direct appropriation of $197,470,000 is 
requested for administrative expenses, and $188,395,000 is 
requested for a credit subsidy to cover the value of expected 
long-run costs associated with fiscal year 1995 insurance 
commitments.
    The amounts for administrative expenses are to be 
transferred from the FHA program accounts to the HUD ``Salaries 
and expenses'' accounts.
    Language is proposed to provide a commitment limitation 
amounting to $110,000,000,000 in the ``MMI/CMHI'' account and 
$17,400,000,000 in the ``GI/SRI'' account.
    In addition, HUD proposes direct loan programs in 1995 for 
multifamily bridge loans and single family purchase money 
mortgages to finance the sale of certain properties owned by 
the Department. Temporary financing would be provided for the 
acquisition and rehabilitation of multifamily projects by 
purchasers who have obtained commitments for permanent 
financing from another lender. Purchase money mortgages would 
enable governmental and nonprofit intermediaries to acquire 
properties for resale to owner-occupants in areas undergoing 
revitalization. For the MMI Program, a loan limitation of 
$200,000,000 is requested. For the GI/SRI Program, $120,000,000 
is requested as a loan limitation.

                        committee recommendation

    The Committee has included the requested amounts for the 
``Mutual Mortgage Insurance Program'' account: a limitation on 
guaranteed loans of $110,000,000,000, a limitation on direct 
loans of $200,000,000, and an appropriation of $341,595,000 for 
administrative expenses. The administrative expenses 
appropriation will be transferred and merged with the sums in 
the Department's ``Salaries and expenses'' account.
    Single-family risk-sharing.--The Department has had under 
consideration a single-family risk-sharing program which would 
be undertaken in conjunction with Government-sponsored 
enterprises, housing finance agencies, and private mortgage 
insurers. This would be a significant alteration of FHA loan 
guarantee current policies, with potentially major 
repercussions on the fund. Although the Department has 
indicated it may have existing statutory authority for such a 
step, the Committee questions such a finding. Moreover, in view 
of the policy implications of such an expansion of activity, 
the Committee directs the Department to withhold a rulemaking 
action pending further congressional review.

                Government National Mortgage Association

                guarantees of mortgage-backed securities

                     (including transfer of funds)

Appropriations, 1995:

    Limitation on guaranteed loans

                                                        $142,000,000,000

    Administrative expenses

                                                               8,824,000

Budget estimate, 1996:

    Limitation on guaranteed loans

                                                         110,000,000,000

    Administrative expenses

                                                               9,101,000

House allowance:

    Limitation on guaranteed loans

                                                         110,000,000,000

    Administrative expenses

                                                               8,824,000

Committee recommendation:

    Limitation on guaranteed loans

                                                         110,000,000,000

    Administrative expenses

                                                               9,101,000

                          program description

    The Government National Mortgage Association [GNMA], 
through the mortgage-backed securities program, guarantees 
privately issued securities backed by pools of mortgages. GNMA 
is a wholly owned corporate instrumentality of the United 
States within the Department. Its powers are prescribed 
generally by title III of the National Housing Act, as amended. 
GNMA is authorized by section 306(g) of the act to guarantee 
the timely payment of principal and interest on securities that 
are based on and backed by a trust or pool composed of 
mortgages that are guaranteed and insured by the Federal 
Housing Administration, the Farmers Home Administration, or the 
Department of Veterans Affairs. GNMA's guarantee of mortgage-
backed securities is backed by the full faith and credit of the 
United States.
    In accord with the Omnibus Budget Reconciliation Act of 
1990 [OBRA] requirements for direct and guaranteed loan 
programs, the administration is requesting $9,101,000 for 
administrative expenses in the mortgage-backed securities 
program. Amounts to fund this direct appropriation to the ``MBS 
program'' account are to be derived from offsetting receipts 
transferred from the ``Mortgage-backed securities financing'' 
account to a Treasury receipt account.

                        committee recommendation

    The Committee recommends a limitation on new commitments of 
mortgage-backed securities of $110,000,000,000. This amount is 
the same level as proposed by the budget request and 
recommended by the House. The Committee has also included 
$9,101,000 for administrative expenses, the same as the budget 
request and $277,000 more than the level proposed by the House.

                          homeless assistance

                       HOMELESS ASSISTANCE GRANTS

Appropriations, 1995....................................  $1,120,000,000
Budget estimate, 1996..................................\1\ 1,120,000,000
House allowance.........................................     676,000,000
Committee recommendation................................     760,000,000

\1\ Requested under new authorization.
---------------------------------------------------------------------------

                          PROGRAM DESCRIPTION

    The proposed Homeless Assistance Grants Program is a 
restructuring of existing McKinney Act programs and would be 
authorized under an amendment to title IV of the McKinney Act. 
The existing programs and requirements would be replaced by a 
comprehensive continuum of care approach to homeless 
assistance. Under the new program, support would be provided to 
States, local governments, nonprofit organizations, and Indian 
tribes. A wide range of activities would be funded which are 
components of an innovative approach to assist homeless persons 
and to prevent future homelessness. The budget proposes 
$1,120,000,000 for the restructured program activities in 1996 
in a new authorization proposal.

                        COMMITTEE RECOMMENDATION

    The Committee concurs with the House in recommending 
funding for homeless assistance grants in the existing account. 
The amount recommended, $760,000,000, represents a reduction of 
$360,000,000 from the 1995 level for all HUD homeless programs 
and the budget estimate.
    The rescission bill (Public Law 104-19) deferred 
$297,000,000 from fiscal year 1995 to fiscal year 1996. The 
Committee recommendation, therefore, will permit an increase in 
homeless activities in the new fiscal year. The Committee also 
recommends language to permit the allocation of these funds by 
the existing emergency shelter grant formula which will reduce 
administrative burdens and facilitate the utilization of these 
funds to assist needy families.
    To the extent the Department intends to establish a block 
grant program with funds under the ``Homeless assistance 
grants'' heading, the Committee intends the Department to use 
the existing formula under the Emergency Shelter Grants Program 
as the method of allocating funds. Nevertheless, the Committee 
is worried that the block grant approach with funds less than 
$1,000,000,000 may disadvantage some areas with significant 
homeless problems and some homeless providers. Therefore, HUD 
is expected to promulgate rules through negotiated rulemaking, 
and include recommendations made by States and localities, as 
well as homeless assistance providers.
    HUD is also directed to provide the Committee on 
recommendations for the possible merger of McKinney homeless 
assistance programs into the Home Program for purposes of more 
consolidated and effective decisionmaking.

                   Community Planning and Development

                      community development grants

Appropriations, 1995....................................  $4,600,000,000
Budget estimate, 1996..................................\1\ 4,850,000,000
House allowance.........................................   4,600,000,000

Committee recommendation

                                                           4,600,000,000

\1\ Requested under new community opportunity block grant.
---------------------------------------------------------------------------

                          program description

    Under title I of the Housing and Community Development Act 
of 1974, as amended, the Department is authorized to award 
block grants to units of general local government and States 
for the funding of local community development programs. A wide 
range of physical, economic, and social development activities 
are eligible with spending priorities determined at the local 
level, but the law enumerates general objectives which the 
block grants are designed to fulfill, including adequate 
housing, a suitable living environment, and expanded economic 
opportunities, principally for persons of low and moderate 
income. Grant recipients are required to use at least 70 
percent of their block grant funds for activities that benefit 
low- and moderate-income persons.
    Funds are distributed to eligible recipients for community 
development purposes utilizing the higher of two objective 
formulas, one of which gives somewhat greater weight to the age 
of housing stock. Seventy percent of appropriated funds are 
distributed to entitlement communities and 30 percent are 
distributed to nonentitlement communities after deducting 
designated amounts for special purpose grants and Indian 
tribes. Pursuant to the Cranston-Gonzalez National Affordable 
Housing Act, Indian tribes are eligible to receive 1 percent of 
the total CDBG appropriation, on a competitive basis.
    The budget also proposed funding, within the community 
development grants appropriation, to continue the Early 
Childhood Development Program in 1995 but does not include a 
set-aside for the Neighborhood Development Program. Instead, 
the latter program would be eligible for funding under the 
proposed community viability fund for which an appropriation is 
requested within the ``Annual contributions'' account. The 
community development grants request also includes $900,000 to 
fund management and administrative costs to be transferred to 
salaries and expenses.

                        committee recommendation

    The Committee recommends an appropriation of $4,600,000,000 
for the Community Development Block Grant Program in fiscal 
year 1996. This amount is the same as the 1995 enacted level 
for the regular CDBG Program and the House allowance.
    The amounts for various activities within the CDBG 
appropriation in fiscal year 1996 are outlined in the following 
table:

                                                               Committee
        Category                                          recommendation

Entitlement cities and counties.........................  $3,022,250,000
Nonentitlement (States and small cities)................   1,295,250,000
Indian tribes...........................................      60,000,000
Special purpose grants (sec. 107).......................      22,500,000
Public housing supportive services......................      80,000,000
Youthbuild Program......................................      40,000,000
Economic development initiative.........................      80,000,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................   4,600,000,000

\1\ Requested within proposed community viability fund in annual 
contributions for assisted housing.

    The Committee recommends continuation of two specific 
grants for the Housing Assistance Council and for the Nation 
American Indian Housing Counsel which are development 
organizations which provide assistance to local housing 
entities on a nationwide basis. The Committee also recommends 
that the set-aside for Indian tribes be increased to 
$60,000,000 to reflect the serious and compelling needs of 
these areas. In addition, the Committee recommends an increase 
in the House allowance for grants authorized under section 107 
of the act to permit the continuation of the Community Outreach 
Partnership program.
    The Committee recommendation includes a set-aside of 
$80,000,000 for a new supportive services grant program to 
provide residents of public and assisted housing with necessary 
services to expand opportunities to become gainfully employed 
and self-sufficient, and to assist elderly and disabled 
residents to achieve maximum flexibility in obtaining living 
arrangements which provide independence and minimal 
institutional care.
    This new grant program provides wide latitude in 
structuring effective and innovative approaches by recipient 
agencies, which are to be selected on the basis of merit 
competition. The Committee anticipates that applicants for 
services formerly provided through the congregate housing 
services and housing counseling assistance programs will 
participate in this consolidated supportive services grant 
program. These programs, formerly separately funded and 
administered are discussed below.
    In addition the Committee notes the remarkable success of 
several individually sponsored activities within the categories 
of the tenant opportunity program, the service coordinators 
program, and the self-sufficiency program in meeting residents' 
needs and providing valuable opportunities for advancement and 
independence from Government assistance. These activities are 
similarly eligible for competitive award under the supportive 
services grant program.
    The congregate housing services demonstration was 
authorized by the Housing and Community Development Amendments 
of 1978 to provide 3- to 5-year contracts to fund services for 
eligible residents of public housing and section 202 housing 
for the elderly or handicapped projects. The intent was to 
avoid costly and premature or unnecessary institutionalization 
of individuals and to reduce Government outlays for 
institutional care.
    Section 106 of the Housing and Urban Development Act of 
1968, as amended, authorizes the Department to contract with 
public and private agencies to provide counseling and advice to 
tenants and homeowners with respect to property maintenance, 
financial management, and such other matters as may be 
appropriate to assist them in improving their housing 
conditions and in meeting the responsibilities of tenancy or 
homeownership.
    The Youthbuild Program is authorized by title IV of the 
Cranston-Gonzalez National Affordable Housing Act, as amended 
by the Housing and Community Development Act of 1992. This 
program provides resources to educate, train, and provide 
stipends for economically disadvantaged young adults to 
construct and rehabilitate housing for low-income and homeless 
persons. An earmark of $40,000,000 is provided to continue this 
activity.
    The Committee also recommends the set-aside of $80,000,000 
for the economic development initiatives [EDI] program which 
provides grant assistance to communities also eligible for 
section 108 loan guarantees. The combination of limited grant 
assistance along with the loan assistance provides maximum 
leverage capital assistance to communities with pressing 
economic development needs. There has been some questions over 
the process in which EDI grant awards have been made in the 
past, the Committee recommendation, therefore, includes a 
requirement that these funds be provided on a competitive basis 
only to assure that these funds are applied in the most 
effective manner possible.

                    Policy Development and Research

                        research and technology

Appropriations, 1995....................................     $42,000,000
Budget estimate, 1996...................................      42,000,000
House allowance.........................................      34,000,000

Committee recommendation

                                                              34,000,000

                          program description

    Title V of the Housing and Urban Development Act of 1970, 
as amended, directs the Secretary of the Department of Housing 
and Urban Development to undertake programs of research, 
studies, testing, and demonstrations relating to the 
Department's mission and programs. These functions are carried 
out internally and through grants and contracts with industry, 
nonprofit research organizations, educational institutions, and 
through agreements with State and local governments and other 
Federal agencies. The research programs focus on ways to 
improve the efficiency, effectiveness, and equity of HUD 
programs and to identify methods to achieve cost reductions. 
Additionally, this appropriation is used to support HUD 
evaluation and monitoring activities and to conduct housing 
surveys.

                        committee recommendation

    The Committee recommends $34,000,000 for research and 
technology activities in fiscal year 1996. This amount is 
$8,000,000 less than the 1995 level and the budget request and 
the same as the House allowance.

                   Fair Housing and Equal Opportunity

                        fair housing activities

Appropriations, 1995....................................     $33,375,000
Budget estimate, 1996...................................      45,000,000
House allowance.........................................      30,000,000

Committee recommendation

                                             ...........................

                          program description

    The fair housing activities appropriation includes funding 
for both the Fair Housing Assistance Program [FHAP] and the 
Fair Housing Initiatives Program [FHIP].
    The Fair Housing Assistance Program helps State and local 
agencies to implement title VIII of the Civil Rights Act of 
1968, as amended, which prohibits discrimination in the sale, 
rental, and financing of housing and in the provision of 
brokerage services. The major objective of the program is to 
assure prompt and effective processing of title VIII complaints 
with appropriate remedies for complaints by State and local 
fair housing agencies.
    The Fair Housing Initiatives Program is authorized by 
section 561 of the Housing and Community Development Act of 
1987, as amended, and by section 905 of the Housing and 
Community Development Act of 1992. This initiative is designed 
to alleviate housing discrimination by increasing support to 
public and private organizations for the purpose of eliminating 
or preventing discrimination in housing, and to enhance fair 
housing opportunities.

                        committee recommendation

    The Committee recommends transfer of this item to the 
Department of Justice which is discussed later in this report.

                     Management and Administration

                         salaries and expenses

                     (including transfers of funds)

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        FHA funds by    GNMA funds by    CGDB funds by                  
                                                                      Appropriation       transfer         transfer         transfer          Total     
--------------------------------------------------------------------------------------------------------------------------------------------------------
Appropriations, 1995...............................................     $451,219,000     $495,355,000       $8,824,000  ...............     $955,398,000
Budget estimate, 1996..............................................      479,479,000      527,782,000        9,101,000         $900,000    1,017,262,000
House allowance....................................................      437,194,000      505,745,000        8,824,000          225,000      951,988,000
Committee recommendation...........................................      438,219,000      532,782,000        9,101,000          675,000      980,777,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

                          program description

    The budget proposes a single ``Salaries and expenses'' 
account in 1996 to finance all salaries and related expenses 
associated with administering the programs of the Department of 
Housing and Urban Development. These include the following 
activities:
    Housing and mortgage credit programs.--This activity 
includes staff salaries and related expenses associated with 
administering housing programs, the implementation of consumer 
protection activities in the areas of interstate land sales, 
mobile home construction and safety, and real estate settlement 
procedures.
    Community planning and development programs.--Funds in this 
activity are for staff salaries and expenses necessary to 
administer community planning and development programs.
    Equal opportunity and research programs.--This activity 
includes salaries and related expenses associated with 
implementing equal opportunity programs in housing and 
employment as required by law and executive orders and the 
administration of research programs and demonstrations.
    Departmental management, legal, and audit services.--This 
activity includes a variety of general functions required for 
the Department's overall administration and management. These 
include the Office of the Secretary, Office of General Counsel, 
Office of Chief Financial Officer, as well as administrative 
support in such areas as accounting, personnel management, 
contracting and procurement, and office services.
    Field direction and administration.--This activity includes 
salaries and expenses for the regional administrators, area 
office managers, and their staff who are responsible for the 
direction, supervision, and performance of the Department's 
field offices, as well as administration support in areas such 
as accounting, personnel management, contracting and 
procurement, and office services.

                        committee recommendation

    The Committee recommends an appropriation of $438,219,000 
for salaries and expenses. This amount is $13,000,000 below the 
1995 level, $41,260,000 less than the budget request, and 
$1,025,000 more than the House allowance. The appropriation 
includes the requested amount of $532,782,000 transferred from 
various funds from the Federal Housing Administration, 
$9,101,000 transferred from the Government National Mortgage 
Association, and $675,000 from the ``Community development'' 
appropriation.
    The Committee recommends the following changes to the 
budget request:

                      Office of Inspector General

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                                                  FHA funds by                  
                                                                Appropriation       transfer          Total     
----------------------------------------------------------------------------------------------------------------
Appropriations, 1995.........................................      $36,427,000      $10,961,000      $47,388,000
Budget estimate, 1996........................................       36,968,000       11,283,000       48,251,000
House allowance..............................................       36,427,000       10,961,000       47,388,000
Committee recommendation.....................................       36,968,000       11,283,000       48,251,000
----------------------------------------------------------------------------------------------------------------

                          program description

    This appropriation would finance all salaries and related 
expenses associated with the operation of the Office of the 
Inspector General.

                       committee recommendations

    The Committee recommends a funding level of $48,251,000 for 
the Office of Inspector General. This amount is $863,000 above 
the 1995 level, the same as the budget request, and $863,000 
more than the House allowance. This funding level includes 
$11,283,000 by transfer from various FHA funds, the same level 
as proposed in the budget request.

             Office of Federal Housing Enterprise Oversight

                         salaries and expenses

                     (including transfer of funds)

Appropriations, 1995....................................     $15,451,000
Budget estimate, 1996...................................      14,895,000
House allowance.........................................      14,895,000

Committee recommendation

                                             ...........................

                          program description

    This appropriation funds the Office of Federal Housing 
Enterprise Oversight [OFHEO], which was established in 1992 to 
regulate the financial safety and soundness of the two housing 
Government sponsored enterprises [GSE's], the Federal National 
Mortgage Association and the Federal Home Loan Mortgage 
Corporation. The Office was authorized in the Federal Housing 
Enterprise Safety and Soundness Act of 1992, which also 
instituted a three-part capital standard for the GSE's, and 
gave the regulator enhanced authority to enforce those 
standards.

                        committee recommendation

    The Committee recommends transfer of this function to the 
Department of the Treasury as discussed later in this report.

                           General Provisions

              EXTENDING PROVISIONS OF THE RESCISSIONS ACT

    Section 201(a)(1) would permit a public housing authority 
[PHA] to use modernization assistance provided under section 14 
for any eligible activity related to public housing which is 
currently authorized by the Housing Act of 1937 or applicable 
appropriations acts, including demolition, replacement, 
modernization, or development activities related to the public 
housing portion of housing developments held in partnership, or 
cooperation with nonpublic entities, and temporary relocation 
assistance, provided that the assistance provided under section 
14 is principally used for the physical improvement or 
replacement of public housing and for associated management 
improvements, except as otherwise approved by the Secretary and 
provided the PHA consults with the appropriate local government 
officials (or Indian tribal officials) and with tenants of the 
public housing developments.
    This authorization does not extend to use of funds for 
operating assistance. These are the same spending rules for 
modernization as were contained in the rescissions act with 
minor clarifications.
    Section 201(a)(1) also would authorize PHA's to provide 
assistance in the form of a grant, loan, or other form of 
investment to a mixed income development, defined as a 
development that includes units for other than low-income 
families. Such assistance could be provided to the PHA or an 
affiliate controlled by it; a partnership, limited liability 
company or other legal entity in which the public housing 
agency or its affiliate is a general partner, managing member, 
or otherwise significantly directs the activities of such 
entity; or any entity which grants to the public housing agency 
the option to purchase the development within 20 years after 
initial occupancy in accordance with section 42(l)(7) of the 
Internal Revenue Code of 1986.
    Such assistance could be provided only if units will be 
made available in the development for periods of not less than 
20 years, by master contract or by individual lease, for 
occupancy by low-income families referred from time to time by 
the public housing agency. Public housing subsidy would 
continue for the usual time period (40 years) however, if the 
units are administered in compliance with the public housing 
program throughout that time period. The number of such units 
would be required to be either in the same proportion to the 
total number of units in the development that the financial 
assistance provided by the public housing agency bears to the 
total equity investment in the development or not be less than 
the number of units that could have been developed under the 
conventional public housing program with the assistance 
involved, or as may otherwise be approved by the Secretary.
    Section 201(a)(1) would also authorize a mixed income 
development to elect to have all units subject only to the 
applicable local real estate taxes, notwithstanding that the 
low-income units assisted by public housing funds would 
otherwise be subject to section 6(d) of the Housing Act of 
1937, which provides that public housing developments must be 
exempt from local and State taxes and PHA's must provide for 
payments in lieu of such taxes.
    Section 201(a)(3) would make all the provisions of section 
201(a) applicable to Indian housing authorities [IHA's].
    Section 201(b) would amend section 1002(d) of the 
rescissions act so that its provisions regarding repeal of the 
1-for-1 replacement requirement for public housing demolition 
and disposition and other related provisions would be 
applicable to applications for the demolition, disposition, or 
conversion to homeownership of public housing approved by the 
Secretary and other consolidation and relocation activities of 
public housing agencies undertaken on, before, or after 
September 30, 1995 and before September 30, 1996.
    Section 201(b)(2) would provide that no one may rely on the 
provision in the rescissions act amending section 18(f) of the 
Housing Act of 1937 as the basis for reconsidering a final 
order of a court. The provision permits replacement of public 
housing units on the original site or in the same neighborhood 
if the number of such replacement units is significantly fewer 
than the number of units demolished.
    Section 201(b)(3) would make the amendments made by this 
section and by the replacement provisions of the Rescissions 
Act applicable to Indian housing.

               PUBLIC HOUSING RENTS AND INCOME TARGETING

    Section 202(a) would require the Secretary to permit a PHA 
to charge a minimum rent of up to $25.
    Section 202(b) would permit PHA's to adopt ceiling rents 
that reflect the reasonable market value of the housing, but 
that are not less than the monthly costs to operate the housing 
of the agency, and to make a deposit to a replacement reserve 
(in the sole discretion of the PHA). This section would allow 
families to pay ceiling rents only when the ceiling rent 
established would exceed the amount payable as rent under the 
definition of rental payments in section 3(a)(1) of the United 
States Housing Act of 1937.
    Section 202(c) would permit PHA's to utilize any other 
adjustments to earned income not otherwise authorized in the 
determination of the adjusted income of public housing 
families. If a PHA adopts other adjustments to income, the 
Secretary shall not take such adjustments into account when 
calculating operating subsidy.
    Section 202(d) would repeal the Federal preference criteria 
for selection of tenants in public and Indian housing, section 
8 existing and moderate rehabilitation, section 8 vouchers, 
section 8 new construction and substantial rehabilitation, the 
202 program and the rent supplement program. For public 
housing, section 8 existing and moderate rehabilitation, and 
the section 8 voucher program, the PHA would be required to 
establish any system of preferences after public notice and an 
opportunity for public comment. The criteria would not be 
permitted to be inconsistent with the comprehensive housing 
affordability strategy under title I of the Cranston-Gonzalez 
National Affordable Housing Act.

            CONVERSION OF CERTAIN PUBLIC HOUSING TO VOUCHERS

    Section 203(a) would require the public housing authorities 
to identify developments of more than 600 units, or, in the 
case of high-rise family buildings or substantially vacant 
buildings, 300 units. For purposes of this identification, the 
developments would have at least a 10-percent vacancy rate 
among the units not in funded on-schedule modernization 
programs, would be identified as distressed housing that the 
PHA cannot assure the long-term viability as public housing 
through density reduction, achievement of a broader range of 
household income, or other measures, and for which the 
estimated cost of continued operation and modernization of the 
developments as public housing exceeds the cost of providing 
tenant-based assistance for all families in occupancy.
    Section 203(b) would require the public housing agency to 
consult with public housing tenants and the unit of general 
local government.
    Section 203(c) would require that developments identified 
under 203(a) be removed from the public housing inventory and 
the annual contributions contract within 5 years, except that 
the Secretary would be permitted to extend the deadline up to 5 
more years if the initial deadline is impracticable. The plan 
must be approved by the relevant local official as consistent 
with the comprehensive housing affordability strategy, 
including a description of any disposition and demolition plan 
for the public housing units. To the extent approved in 
appropriations, the Secretary may establish requirements and 
provide funding under the Urban Revitalization Demonstration 
Program for demolition and disposition of public housing under 
this section.
    Section 203(d) would require the Secretary to make 
authority available to a public housing agency to provide 
tenant-based assistance to families residing in any development 
that is removed from the inventory of the public housing agency 
and the annual contributions contract. Each conversion plan 
would require the agency to notify families residing in the 
development, consistent with any guidelines issued by the 
Secretary governing such notifications, that the development 
would be removed from the inventory of the public housing 
agency and the families would receive tenant-based or project-
based assistance, and the agency would provide any necessary 
counseling for families. Each conversion plan would ensure that 
all tenants affected by the removal of a development from the 
inventory of the public housing agency would be offered tenant-
based or project-based assistance and would be relocated to 
other decent, safe, sanitary, and affordable housing which 
would be, to the maximum extent practicable, housing of their 
choice.
    Section 203(e) would require a public housing agency to 
provide such information as the Secretary considers necessary 
for the administration of this section, would define 
development to refer to a project or projects, or to portions 
of a project or projects, as appropriate, and would not apply 
section 18 of the United States Housing Act of 1937 to the 
demolition of developments removed from the inventory of the 
public housing agency under this section.
    Provisions are included to clarify HUD's role generally and 
in the event that a housing authority does not complete the 
required evaluation of its large, distressed, costly 
developments. These provisions allow HUD to establish standards 
to permit implementation of this initiative in fiscal 1996, and 
provide that where HUD determines that a PHA has failed to 
complete the required identification in a timely manner, failed 
to identify development for conversion which should have been 
identified, identified developments which should not have been 
identified or is not expeditiously implementing the conversion 
plan, HUD can take any necessary action to designate the 
developments to be converted to certificates or assure the 
expeditious implementation of the conversion plan.

             STREAMLINING SECTION 8 TENANT-BASED ASSISTANCE

    Section 204(a) would repeal section 8(t) of the Housing Act 
of 1937, the so-called take-one, take-all provision, which 
prohibits an owner who has leased to one section 8 tenant from 
refusing to lease to additional tenants because of their status 
as certificate or voucher holders.
    Section 204(b) would prohibit an owner who has received 
Federal housing assistance within the past 2 years (except for 
mortgage insurance), from refusing to lease a reasonable number 
of units to families participating in a program of section 8 
tenant-based assistance unless the refusal is based on 
reasonable tenant selection criteria. Twenty percent would 
constitute a safe harbor in establishing a reasonable number.
    Section 204(c) would revise section 8(c)(8) and (9) to 
eliminate the requirement that owners participating in the 
certificate or voucher programs provide 90 days notification of 
any rent increase or contract termination.
    Section 204(d) would modify section 8(d)(1)(B) of the 
Housing Act of 1937, the so-called endless lease provision, to 
remove any limitations on termination of tenancy, other than 
during the term of the lease.

                          FAIR MARKET RENTALS

    Section 205(a) would require the Secretary to establish 
fair market rentals for the section 8 certificate program at 
the 40th percentile rent of the rental distribution of standard 
quality rental housing units, considering only the rents for 
recent movers and excluding public housing units and newly 
constructed units.
    Section 205(b) would limit annual rental adjustments in 
fiscal year 1995 in the section 8 new construction, substantial 
rehabilitation and moderate rehabilitation programs where the 
maximum monthly rent would exceed the rent for an existing 
dwelling unit in the market area. In such cases the rent would 
be limited to the amount demonstrated by the owner to be the 
rent of a comparable unassisted unit. The subsection would also 
limit the adjustment of rents for units occupied by the same 
family at the time of the last annual rental adjustment.
    Section 205(c) would set the administrative fees for the 
certificate, voucher, and moderate rehabilitation programs not 
to exceed 7 percent of the fair market rental established for a 
2-bedroom existing rental dwelling unit in the market area of 
the public housing agency.
    Section 205(d) would delay reissuance of vouchers and 
certificates until October 1, 1996, and for 6 months, the use 
of any amounts of such assistance made available for the 
termination during fiscal year 1996 of such assistance on 
behalf of any family for any reason, but not later than October 
1, 1996, with the exception of any certificates assigned or 
committed to project-based assistance as permitted otherwise by 
the act, accomplished prior to the effective date of this act.

         PUBLIC HOUSING/SECTION 8 MOVING TO WORK DEMONSTRATION

    Section 206 would establish a demonstration to give PHA's 
and the Secretary the flexibility to design and test various 
approaches for providing and administering housing assistance 
that give incentives to families with children whose heads are 
working and to families seeking work or preparing for work by 
participating in job training, educational programs, or 
programs that help people obtain employment. Up to 30 PHA's 
could be selected for participation, with training and 
technical assistance during the demonstration. The agencies 
would be permitted to combine operating subsidy, modernization 
funds, and assistance provided under section 8 on such terms 
and conditions as the agency may propose and the Secretary may 
approve.
    Participating agencies would be required to hold a public 
hearing, prepare an agency plan, serve an income mix at least 
75 percent very-low income and 50 percent under 30 percent of 
median, set reasonable rents designed to encourage employment 
and self-sufficiency, continue to assist the same total number 
of families and a comparable mix by size, and assure that the 
housing meets housing quality standards. The amount of 
assistance received by the agencies under sections 8, 9, and 14 
would not be affected by their participation in the 
demonstration.
    Section 207 is intended to clarify the effect of hortatory 
language contained in a recent housing act regarding the 
implementation of income-disregard provisions of existing law. 
This provisions simply reaffirms current legislative intent 
that such income-disregard provision should remain permissible 
subject to the prior enactment of specifically directed 
appropriations to permit implementation.
    Section 208 extends authority to continue the highly 
successful multifamily housing demonstration through fiscal 
year 1996.
    Section 209 provides the authority necessary to allow 
demonstrations utilizing a variety of types of participants 
involving insurance or reinsurance and the economic interests 
thereto.
    Section 210 provides that, when HUD sells or transfers HUD 
held mortgages to State housing finance agencies during fiscal 
year 1996, the agencies can provide insurance on that portfolio 
under the risk-sharing program without counting against the 
unit limitations of the multifamily mortgage credit 
demonstrations for which authorization is extended in section 
202.

Section 211. Transfer of section 8 authority

    This provision adds a new subsection (bb) to section 8 of 
the 1937 act authorizing HUD to transfer budget authority from 
expired or terminated section 8 project-based assistance 
contracts to another housing assistance contract. This would 
enable the transferred authority to be used to provide 
continued assistance to eligible families, including eligible 
families who were receiving the benefit of the project-base 
assistance at the time the contract ended. The budget authority 
could be used for tenant-based or project-based assistance.
    The Department currently has the authority to terminate HAP 
contracts for section 8 units that are: not decent, safe, and 
sanitary, for the admission of ineligible families, and for 
other contract violations. However, when HUD terminates the HAP 
contract, the budget authority is recaptured and must be 
treated in accordance with appropriation acts.
    The objective of this proposal is to make it possible for 
HUD to terminate units for uncorrected violations, or to allow 
contracts to expire without renewal, without causing a net loss 
in assisted housing by permitting the Department to reuse the 
authority to assist tenants affected by contract terminations 
and expirations.

Section 212. Documentation of multifamily refinancing

    This section would make permanent the 1995 amendment to 
section 223(a)(7) of the National Housing Act, which provides 
that refinancing under section 223(a)(7) will be documented 
through an amendment to the original mortgage and not 
structured as a new insurance contract.

Section 213. Demonstration authority

    This section authorizes the Secretary, beginning in fiscal 
year 1996, to carry out one or more demonstration programs 
designed to test the feasibility of the mark to market 
proposal. Projects with mortgages insured under the National 
Housing Act and which are assisted under section 8 of the 1937 
act would be eligible for the demonstration programs, which 
would evaluate the success of converting those properties to 
uninsured, unsubsidized status while providing continuing 
assistance in the form of tenant-based subsidies to the 
families currently benefiting from project-based assistance. In 
carrying out this authority, the Secretary may delegate, 
contract, or otherwise arrange to transfer some or all of the 
functions, obligations, and benefits of the Secretary to third 
parties.

Section 214. Contract renewals

    Subsection (a) establishes the contract renewal term of 1 
year.
    The second subsection authorizes the Secretary to use 
amounts appropriated for section 8 renewals to provide tenant-
based section 8 assistance to eligible families who are 
residing in affected properties when a project-based section 8 
contract is terminated or expires. As project-based section 8 
contracts expire or are terminated, the contracts will not be 
renewed. This proviso includes authority for the Secretary to 
allow section 8 loan management set-aside contracts to expire 
without being renewed, notwithstanding the current statutory 
requirement for renewal. The proviso limits the amount of 
tenant-based assistance to be provided at contract expiration 
to the number of eligible families currently assisted under the 
project-based contract.
    The second proviso allows the Secretary discretion to renew 
section 8 loan management set-aside contracts where 
appropriate, but permits such renewals for one time only and 
limits the term of the contract to 1 year. In addition, the 
rents under such contracts can not exceed 120 percent of the 
fair-market rent for section 8 existing housing. Upon 
termination of the 1-year contract, eligible families would 
receive tenant-based assistance.
    Under the third proviso, assistance reserved under the 
section 8 renewal account, as provided in the first proviso, 
would be available for use in connection with any Federal law 
subsequently enacted to authorize use of rental assistance 
amounts in connection with terminated or expired contracts.
    The fourth proviso authorizes the Secretary during fiscal 
year 1996 to manage and dispose of HUD-owned multifamily 
properties and HUD-held multifamily mortgages without regard to 
other provisions of law.
    The fifth proviso sets forth the Committee's intent to 
provide tenant-based assistance in order to protect the 
existing assisted families in a manner that is consistent with 
the objectives and priorities of various programs and 
authorities of the Department. These include the National 
Housing Act, the Housing Act of 1949, section 203 of the 
Housing and Community Development Amendments of 1978, the 
Multifamily Mortgage Foreclosure Act, and the United States 
Housing Act of 1937. Section 211 permits delegation, by the 
Secretary, of mortgage foreclosure activities to a third party.

Preservation reform

    The Committee recommends a new section 215 which amendments 
the existing LIHPRHA (preservation) statute by (i) permitting 
prepayment of the insured mortgage and (ii) establishing new 
capital grant/loan incentives. The basic structure of LIHPRHA 
is changed as little as possible so that LIHPRHA processing now 
in place can be easily converted for the capital grant/loan.
    All section references herein are to those in the existing 
LIHPRHA statute.
    The basic elements of the legislation are as follows:
    Restoration of the right of the owner to prepay. (sec. 211)
    Addition of two new incentives, a capital loan for owners 
who wish to extend low-income restrictions, and a capital grant 
to enable owners to sell their property to a qualified 
purchaser. As under LIHPRHA, the capital loan would be for a 
maximum of 70 percent of preservation equity, and the capital 
grant for 100 percent of preservation equity. Both the loan and 
the grant would also cover necessary rehabilitation expenses 
for the project. The loan would be repaid after the first 
mortgage has been paid off. An owner receiving incentives to 
retain ownership would also receive a return equal to 8 percent 
of the remaining 30 percent of equity in the property, or in 
the case of a purchaser, 8 percent on the actual cash 
investment made to acquire the project. (secs. 219(b)(8) and 
220(d)(2)
    Except where a Federal cost limit was approved under 
LIHPRHA processing, the loan or grant would be limited to 60 
times the applicable monthly fair market rent for the project. 
(sec. 215)
    Tenant-based assistance will be provided to very low-income 
tenants when an owner prepays the mortgage. Also, HUD will pay 
relocation assistance up to $1,500 for certain low-income 
tenants who do not receive tenant-based assistance. (sec. 223)
    The definition of eligible housing is changed to include 
only those properties which were time-eligible on December 31, 
1994, and filed a notice of intent prior to February 28, 1995, 
and properties not time-eligible on December 31, 1994, but file 
a notice of intent no later than March 1, 1996. A minimum 
preservation equity threshold is established at the lesser of 
$5,000 per unit or $500,000 per property or eight times fair 
market rents. (sec. 229)
    To ensure an expeditious start of the new program, HUD is 
directed to process capital grants and loans without issuing 
regulations and without reprocessing approvals or LIHPRHA 
milestones such as form 9607, Federal cost limits, et cetera. 
The capital grant would be paid in full in the case of an 
acquisition. However, to ease the financial burden on the 
Federal Government the capital loan would be paid in five equal 
installments. The owner shall receive interest at the 
applicable Federal rate at plan approval on the unpaid 
installments. (sec. 236) However, if the Government fails to 
meet its installment obligations, the owner may prepay and 
retain past installment payments.

                      section-by-section analysis

    New section 202. The new provisions will be applicable to 
those projects which have not received funding for a plan of 
action under LIHPRHA before October 1, 1995.
    Section 211. These amendments permit an owner to prepay at 
any time or in the alternative, file a plan of action for a 
capital loan or grant.
    Section 212. This section is amended to remove the 
reference to section 218, setting forth criteria for 
prepayment, which will be deleted in its entirety.
    Section 214. This section dealing with the annual 
authorized return is deleted in its entirety, as this concept 
would not be relevant to capital grants.
    Section 215. A new Federal cost limit is inserted providing 
that a permissible capital loan or grant should not exceed 60 
times the applicable fair market rent for the unit involved. 
The Secretary is granted the discretion to approve capital 
grants or loans in excess of the new cost limit.
    Section 216. This section deletes information from the 
Secretary that would not be applicable under the capital grant 
procedures, as well as references to section 221, the mandatory 
sales section.
    Section 217. This section is amended to delete references 
to criteria for voluntary termination in section 218 as the 
reference is no longer applicable.
    Section 218. This section dealing with prepayment or 
voluntary termination is deleted in its entirety as it is no 
longer applicable.
    Section 219. Obsolete language is deleted and a new 
incentive, the direct loan (70 percent of preservation equity) 
is inserted in lieu thereof. Repayment of the loan shall 
commence when the first mortgage loan on the project is paid in 
full; the owner shall then utilize the same amount of the first 
mortgage payments to make payments on the equity loan. This 
section also provides for an annual return to an owner equal to 
8 percent of the remaining 30 percent of equity in the 
property. Also, 236 excess income is no longer required to be 
remitted to HUD.
    Section 220. This section is amended to omit reference to 
the present Federal cost limits provision and authorizes a 
capital grant of 100 percent of preservation equity. The 
section also establishes various classes of priority 
purchasers. The section also provides that the purchaser may 
choose to receive a loan rather than a grant because of tax 
considerations. The incentives provision for priority 
purchasers is deleted as it does not conform to the new grant 
program. Qualified purchasers are entitled to an 8 percent 
return on actual cash invested. This section is also amended to 
make clear that the residual receipts account is released to 
the owner but the replacement reserves stay with the project in 
a sale and a priority purchaser will receive section 236 excess 
income.
    Section 221. This section dealing with mandatory sales is 
deleted in its entirety.
    Section 222. This section is changed to remove references 
to the phase-in of section 8 rent contributions and the 
requirement that new tenants be at the same proportion of very 
low, low, and moderate incomes as existing tenants, although to 
the extent subsidies are available, the current income mix 
between very low, low, and moderate income will be maintained. 
These provisions would not be applicable or practical in the 
absence of section 8.
    In addition, the LIHPRHA methodology of rent adjustment, 
the operating cost adjustment factor, would be deleted and 
replaced by the current rent adjustment mechanism generally in 
effect for section 221(d)(3) and 236 projects. HUD is required 
to process rent adjustments during LIHPRHA processing. 
References are also deleted to annual authorized return. 
Further, the sanction enabling the Secretary to declare a rehab 
loan in default is deleted as there is no rehab loan per se.
    Section 223. This section is amended to provide that HUD 
will provide tenant-based assistance to all very low-income 
tenants when the owner prepays. Further, HUD will provide 
relocation assistance not to exceed $1,500 for rent-burdened 
low income tenants.
    Section 224. This section setting forth permissible 
prepayment events is deleted as it is no longer needed in view 
of the unfettered prepayment right.
    Section 225. This section is amended to require HUD to pay 
an owner 8 percent interest on preservation equity if it fails 
to meet its processing timetables, a penalty similar to that in 
current law.
    Also there is a technical change removing the word, 
``district'' so as to give an aggrieved party the right to sue 
in the court of Federal claims.
    Section 229. This section changes the requirements for 
eligibility to limit participation to any project which was 
time-eligible as of December 31, 1994, and filed a notice of 
intent prior to February 28, 1995, or was not time-eligible on 
December 31, 1994, but files a notice no later than March 1, 
1996. Also, a minimum preservation equity threshold is set at 
the lesser of $5,000 per unit or $500,000 per project or eight 
times fair market rents. Conforming changes are made in the 
definition of preservation equity to conform to the new capital 
grant language. Also, new definitions are added for the terms 
``community-based nonprofit organization'' and ``mutual housing 
association.''
    Section 231. This section is amended to expand the class of 
priority purchasers to include a resident council, community-
based nonprofit, mutual housing association or affiliates that 
act as a general partner in a limited partnership.
    Section 232. This section dealing with Federal preemption 
is amended to remove the language on annual authorized return 
and to state that local laws cannot preempt any benefit 
provided under the new act.
    New section 236. This section is added to provide that the 
capital grant and loan provisions are self-executing without 
need for regulations, or reprocessing LIHPRHA approvals or 
including but not limited to form 9607, calculation of Federal 
cost limits, bona fide offers and the like. The capital grant 
to a qualified purchaser shall be funded in full. In addition, 
HUD may pay the capital loan over five installments, with 
interest at the applicable Federal rate. If HUD defaults on any 
of the installments, the owner may keep the installment and 
prepay. An owner processing under the Emergency Low Income 
Housing Preservation Act of 1987 [ELIHPA] may choose to apply 
for a capital grant/loan or prepay under the new provisions.
    Section 216 provides for a 1-year extension of the home 
equity conversion mortgage program which is growing in 
popularity as a mean for older Americans to use reverse 
mortgages to secure funds from accumulated equity in their 
homes.
    Section 217 changes the timing in which assessments are 
collected by the Office of Federal Housing Enterprise 
Oversight.
    Section 218 of the bill prohibits the use of any funds by 
HUD for any activity pertaining to property insurance. Such 
activities are unwarranted and unnecessary. Every State and the 
District of Columbia have laws and regulations addressing 
unfair discrimination in property insurance and are actively 
investigating and addressing discrimination where it is found 
to occur. HUD's insurance-related activities do no more than 
add an unnecessary layer of Federal bureaucracy.
    Moreover, the Fair Housing Act makes no mention of 
discrimination in property insurance. The act expressly governs 
home sales and rentals and the services that home sellers, 
landlords, mortgage lenders, and real estate brokers provide. 
Neither it nor its legislative history suggests that Congress 
intended it also to apply to the provision of property 
insurance. Indeed, Congress' intention, as expressly stated in 
the McCarran-Ferguson Act of 1945 and repeatedly reaffirmed 
thereafter, is that, unless a Federal law specifically relates 
to the business of insurance, the law shall not apply where it 
would interfere with State insurance regulation. HUD's 
assertion of authority regarding property insurance contradicts 
this statutory mandate.
    The language recommended by the Committee will permit the 
Department to complete ongoing studies and analyses regarding 
the availability of property insurance and its relationship to 
housing opportunities.
    Section 219 caps the number of noncareer Senior Executive 
Service employees in the Department. This is similar to a 
restriction contained in this bill 3 years ago.
    Section 220 modifies the designation of an earmark 
contained in the appropriations bill for fiscal year 1992. This 
modification is necessary to permit the utilization of 
previously obligated funds.

            PERMISSIBLE ADJUSTMENT TO MODERNIZATION FORMULA

    Section 221 would allow the Secretary to provide additional 
weighting to backlog needs in the public housing modernization 
formula subject to applicable rulemaking procedures.
    The Committee recommends a new section 222 which clarifies 
the provision governing the use of lead-based paint abatement 
funding. Recently, the Federal task force on lead-based paint 
abatement recommended model strategies and protocols to 
maximize the effectiveness of abatement activities. The 
Committee believes that these consensus recommendations should 
be broadly tested and considered in addressing this serious 
human health concern in a manner which targets limited 
available resources toward the most efficient mechanisms in 
reducing hazardous lead exposure.

                        COST SAVINGS WITH PHA's

    Section 223 would make the current cost-sharing provision 
between HUD and PHA's where the PHA's initiative has saved 
money, permanent rather than limited to 6 years.
    Section 224 extends current law which permits the 
Department to dispose of performing mortgages which bear below-
market interest rates without receiving these notes into FHA 
inventory. This provision is effective only for fiscal year 
1996.
                    TITLE III--INDEPENDENT AGENCIES

                  American Battle Monuments Commission

                         salaries and expenses

Appropriations, 1995....................................     $20,265,000
Budget estimate, 1996...................................      20,265,000
House allowance.........................................      20,265,000

Committee recommendation

                                                              20,265,000

                          program description

    The American Battle Monuments Commission [ABMC] is 
responsible for the maintenance and construction of U.S. 
monuments and memorials commemorating the achievements in 
battle of our Armed Forces since April 1917; for controlling 
the erection of monuments and markers by U.S. citizens and 
organizations in foreign countries; and for the design, 
construction, and maintenance of permanent military cemetery 
memorials in foreign countries. The Commission maintains 24 
military cemetery memorials on foreign soil; 17 monuments and 
memorials not a part of the cemeteries; and 4 bronze tablets. 
In addition, the Commission administers four large memorials on 
U.S. soil. It is presently charged with erecting a Korean and a 
World War II war veterans memorial in the Washington, DC, area.

                        committee recommendation

    The Committee recommends an appropriation of $20,265,000 
for the American Battle Monuments Commission, as requested by 
the administration and provided by the House.

              Community Development Financial Institutions

   Community Development Financial Institutions Fund Program Account

Appropriations, 1995....................................    $125,000,000
Budget estimate, 1996...................................     123,650,000
House allowance.........................................................

Committee recommendation

                                             ...........................

                          Program Description

    The community development financial institutions [CDFI] 
fund would provide grants, loans, and technical assistance to 
new and existing community development financial institutions 
such as community development banks, community development 
credit unions, revolving loan funds, and microloan funds. 
Recipient institutions would be required to support mortgage, 
small business, and economic development lending in currently 
underserved, distressed neighborhoods.

                        Committee Recommendation

    The Committee recommends no funding for the community 
development financial institutions fund program account. No 
funds were included in the House-passed bill for this purpose. 
The administration requested $123,650,000 for this agency, in 
addition to $20,000,000 for loan subsidies and $350,000 to 
establish an inspector general.
    Public Law 104-19, the Rescission Act for Fiscal Year 1995, 
reduced previously appropriated funding for this purpose to 
$50,000,000, and directed that this amount be administered by 
the Department of the Treasury rather than in a new independent 
agency. The Committee supports the laudatory goal of assisting 
neighborhood development banks with additional capital, as was 
envisioned under the Bank Enterprise Act portion of this 
account. The utilization of these funds during fiscal year 1996 
will be monitored by the Committee, and consideration will be 
given to a budget request for fiscal year 1997, for 
continuation of this activity in that Department.

                   Consumer Product Safety Commission

                         salaries and expenses

Appropriations, 1995....................................     $42,509,000
Budget estimate, 1996...................................      44,000,000
House allowance.........................................      40,000,000

Committee recommendation

                                                              40,000,000

                          program description

    The Commission is an independent regulatory agency that was 
established on May 14, 1973, and is responsible for protecting 
the public against unreasonable risks of injury from consumer 
products; assisting consumers to evaluate the comparative 
safety of consumer products; developing uniform safety 
standards for consumer products and minimizing conflicting 
State and local regulations; and promoting research and 
investigation into the causes and prevention of product-related 
deaths, illnesses, and injuries.
    In carrying out its mandate, the Commission establishes 
mandatory product safety standards, where appropriate, to 
reduce the unreasonable risk of injury to consumers from 
consumer products; helps industry develop voluntary safety 
standards; bans unsafe products if it finds that a safety 
standard is not feasible; monitors recalls of defective 
products; informs and educates consumers about product hazards; 
conducts research and develops test methods; collects and 
publishes injury and hazard data, and promotes uniform product 
regulations by governmental units.

                        committee recommendation

    The Committee concurs with the House in providing 
$40,000,000 for the Consumer Product Safety Commission, a 
reduction of $4,000,000 below the budget estimate and 
$2,509,000 below the current level. The reduction is to be 
taken at the discretion of the Commission, subject to normal 
reprogramming procedures.
    The fiscal year 1995 budget provided $1,200,000 for the 
Fire Safe Cigarette Act upon authorization. The legislation was 
not enacted, therefore, these funds were not used in fiscal 
year 1995 and will be returned to the Treasury. Consequently, 
the fiscal year 1995 budget was in effect $41,309,000 and the 
amount provided represents a real decrease of only $1,309,000 
below fiscal year 1995.
    It is noted that agency management currently comprises 19 
percent of the budget and could absorb budget reductions 
without impacting agency programs. Such a reduction would be in 
keeping with the CPSC Chairman's organizational restructuring 
which was recently initiated. According to the agency, the 
restructuring will reduce management layers and reduce 
administrative costs associated with personnel, procurement, 
space, and other support services. If accelerated, the 
Committee believes the restructuring could effectuate budgetary 
savings in fiscal year 1996. The Committee wishes to be kept 
apprised of all restructuring activities on a regular basis.
    The Committee notes that the Commission's budget request 
includes a 60-percent increase in travel costs. The Commission 
is directed to maintain travel costs at or below the fiscal 
year 1995 level.

             Corporation for National and Community Service

                national and community service programs

                           operating expenses

                     (including transfer of funds)

Appropriations, 1995....................................    $575,000,000
Budget estimate, 1996...................................     817,476,000
House allowance.........................................................

Committee recommendation

                                             ...........................

                          program description

    The Corporation for National and Community Service, a 
Corporation owned by the Federal Government, was established by 
the National and Community Service Trust Act of 1993 (Public 
Law 103-82) to enhance opportunities for national and community 
service and provide national service educational awards. The 
Corporation makes grants to States, institutions of higher 
education, public and private nonprofit organizations, and 
others to create service opportunities for a wide variety of 
individuals such as students, out-of-school youth, and adults 
through innovative, full-time national and community service 
programs. National service participants may receive educational 
awards which may be used for full-time or part-time higher 
education, vocational education, job training, or school-to-
work programs.
    The Corporation is governed by a board of directors and 
headed by the Chief Executive Officer of the Corporation. Board 
members and the Chief Executive Officer of the Corporation are 
appointed by the President of the United States and confirmed 
by the Senate.

                        committee recommendation

    The Committee recommends no appropriation for the 
Corporation for National and Community Service. The House-
passed bill also provides for termination of this entity.
    In concurring with the House recommendation that no funding 
be provided for the Corporation for National Service, the 
Committee notes that the Government Accounting Office has 
concluded that the cost per participant in the Americorps 
Program exceeds $26,000 per year, a level which cannot be 
sustained in the current budget environment.

                      Office of Inspector General

Appropriations, 1995....................................      $2,000,000
Budget estimate, 1996...................................       2,000,000
House allowance.........................................................

Committee recommendation

                                             ...........................

                          Program Description

    The Office of Inspector within the Corporation for National 
and Community Service is authorized by the Inspector General 
Act of 1978, as amended. The goals of the Office are to 
increase organizational efficiency and effectiveness and to 
prevent fraud, waste, and abuse. The Office of Inspector 
General within the Corporation for National and Community 
Service was transferred to the Corporation from the former 
ACTION agency when ACTION was abolished and merged into the 
Corporation in April 1994.

                        Committee Recommendation

    The Committee recommends termination of the Office of the 
Inspector General, along with discontinuation of the 
Corporation as a whole.

                     U.S. Court of Veterans Appeals

                         salaries and expenses

Appropriations, 1995....................................      $9,429,000
Budget estimate, 1996...................................       9,820,000
House allowance.........................................       9,000,000

Committee recommendation

                                                               9,000,000

                          program description

    The Court of Veterans Appeals was established by the 
Veterans' Judicial Review Act. The court has exclusive 
jurisdiction to review decisions of the Board of Veterans' 
Appeals. It has the authority to decide all relevant questions 
of law, interpret constitutional, statutory, and regulatory 
provisions, and determine the meaning or applicability of the 
terms of an action by the Department of Veterans Affairs. It is 
authorized to compel action by the Department unlawfully 
withheld or unreasonably delayed. It is authorized to hold 
unlawful and set-aside decisions, findings, conclusions, rules 
and regulations issued or adopted by the Department of Veterans 
Affairs or the Board of Veterans' Appeals.

                        committee recommendation

    The Committee concurs with the House in providing 
$9,000,000 for the U.S. Court of Veterans Appeals. This amount 
represents a decrease of $820,000 below the budget request and 
$429,000 below the current levels. As requested by COVA, the 
full $678,000 has been included for the pro bono representation 
program.

                      Department of Defense--Civil

                       Cemeterial Expenses, Army

                         salaries and expenses

Appropriations, 1995....................................     $12,017,000
Budget estimate, 1996...................................      14,124,000
House allowance.........................................      11,296,000

Committee recommendation

                                                              11,946,000

                          program description

    Responsibility for the operation of Arlington National 
Cemetery and Soldiers' and Airmen's Home National Cemetery is 
vested in the Secretary of the Army. As of September 30, 1992, 
Arlington and Soldiers' and Airmen's Home National Cemeteries 
contained the remains of 246,023 persons and comprised a total 
of approximately 628 acres. There were 3,056 interments and 
1,583 inurnments in fiscal year 1993; 3,500 interments and 
1,500 inurnments are estimated for the current fiscal year; and 
3,500 interments and 1,500 inurnments are estimated for fiscal 
year 1995.

                        committee recommendation

    The Committee recommends an appropriation of $11,946,000 
for the Army's cemeterial expenses. This amount is $2,188,000 
less than the budget request and $650,000 more than the House 
allowance and will allow the Army to initiate construction of 
phase III of the Columbarium expected to cost $4,260,000. The 
Army may apply $2,188,000 of the potential savings associated 
with the memorial amphitheater restoration project to offset 
the reductions in the program.

                    Environmental Protection Agency

Appropriations, 1995..................................\1\ $6,641,445,000
Budget estimate, 1996...................................   7,359,409,000
House allowance.........................................   4,892,430,000

Committee recommendation

                                                           5,661,927,000

\1\ Reflects rescission of $599,442,000 in Public Law 104-19.
---------------------------------------------------------------------------

                          general description

    The Environmental Protection Agency [EPA] was created 
through Executive Reorganization Plan No. 3 of 1970 designed to 
consolidate certain Federal Government environmental activities 
into a single agency. The plan was submitted by the President 
to the Congress on July 8, 1970, and the Agency was established 
as an independent agency in the executive branch on December 2, 
1970, by consolidating 15 components from 5 departments and 
independent agencies.
    A description of EPA's pollution control programs by media 
follows:
    Air.--The Clean Air Act Amendments [CAA] of 1990 authorize 
a national program of air pollution research, regulation, 
prevention, and enforcement activities.
    Water quality.--The Clean Water Act [CWA], as amended in 
1977, 1981, and 1987, provides the framework for protection of 
the Nation's surface waters. The law recognizes that it is the 
primary responsibility of the States to prevent, reduce, and 
eliminate water pollution. The States determine the desired 
uses for their waters, set standards, identify current uses 
and, where uses are being impaired or threatened, develop plans 
for the protection or restoration of the designated use. They 
implement the plans through control programs such as permitting 
and enforcement, construction of municipal waste water 
treatment works, and nonpoint source control practices. The CWA 
also regulates discharge of dredge or fill material into waters 
of the United States, including wetlands.
    Drinking water.--The Safe Drinking Water Act [SDWA] of 1974 
charged EPA with the responsibility of implementing a program 
to assure that the Nation's public drinking water supplies are 
free of contamination that may pose a human health risk, and to 
protect and prevent the endangerment of ground water resources 
which serve as drinking water supplies.
    Hazardous waste.--The Resource Conservation and Recovery 
Act of 1976 [RCRA] mandated EPA to develop a regulatory program 
to protect human health and the environment from improper 
hazardous waste disposal practices. The RCRA Program manages 
hazardous wastes from generation through disposal.
    EPA's responsibilities and authorities to manage hazardous 
waste were greatly expanded under the Hazardous and Solid Waste 
Amendments of 1984. Not only did the regulated universe of 
wastes and facilities dealing with hazardous waste increase 
significantly, but past mismanagement practices, in particular 
prior releases at inactive hazardous and solid waste management 
units, were to be identified and corrective action taken. The 
1984 amendments also authorized a regulatory and implementation 
program directed to owners and operators of underground storage 
tanks.
    Pesticides.--The objective of the Pesticide Program is to 
protect the public health and the environment from unreasonable 
risks while permitting the use of necessary pest control 
approaches. This objective is pursued by EPA under the Federal 
Insecticide, Fungicide, and Rodenticide Act [FIFRA] and the 
Federal Food, Drug, and Cosmetic Act [FFDCA] through three 
principal means: (1) review of existing and new pesticide 
products; (2) enforcement of pesticide use rules; and (3) 
research and development to reinforce the ability to evaluate 
the risks and benefits of pesticides.
    Radiation.--The radiation program's major emphasis is to 
minimize the exposure of persons to ionizing radiation, whether 
from naturally occurring sources, from medical or industrial 
applications, nuclear power sources, or weapons development.
    Toxic substances.--The Toxic Substances Control Act [TSCA] 
establishes a program to stimulate the development of adequate 
data on the effects of chemical substances on health and the 
environment, and institute control action for those chemicals 
which present an unreasonable risk of injury to health or the 
environment. The act's coverage affects more than 60,000 
chemicals currently in commerce, and all new chemicals.
    Multimedia.--Multimedia activities are designed to support 
programs where the problems, tools, and results are cross media 
and must be integrated to effect results. This integrated 
program encompasses the Agency's research, enforcement, and 
abatement activities.
    Superfund.--The Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980 [CERCLA] established a 
national program to protect public health and the environment 
from the threats posed by inactive hazardous waste sites and 
uncontrolled spills of hazardous substances. The original 
statute was amended by the Superfund Amendments and 
Reauthorization Act of 1986 [SARA]. Under these authorities, 
EPA manages a hazardous waste site cleanup program including 
emergency response and long-term remediation.
    Leaking underground storage tanks.--The Superfund 
Amendments and Reauthorization Act of 1986 [SARA] established 
the leaking underground storage tank [LUST] trust fund to 
conduct corrective actions for releases from leaking 
underground storage tanks that contain petroleum or other 
hazardous substances. EPA implements the LUST response program 
primarily through cooperative agreements with the States.

                        committee recommendation

    The Committee has provided a total of $5,661,927,000 for 
EPA. This is a decrease of $1,697,482,000 below the budget 
request, an increase of $769,497,000 above the House, and a 
decrease of $979,518,000 below the current budget.
    While the Committee has provided a significant increase 
over the House amount, its action is not intended to suggest 
that the status quo is acceptable. Rather, the Committee's 
recommendation is intended to bring about systemic changes to 
EPA, including streamlining its operations; eliminating 
duplication of other agencies, State and local efforts; 
providing full support and flexibility to States to comply with 
environmental mandates; and adopting a flexible and cooperative 
approach to working with industry to achieve environmental 
standards.
    The Committee's appropriation for EPA closely parallels 
recommendations made by the National Academy of Public 
Administration in a report to this Committee entitled: 
``Setting Priorities, Getting Results: A New Direction for 
EPA,'' released in April of this year. At a May 17, 1995, 
hearing conducted by the Committee on EPA reform issues, a 
variety of witnesses from State and local government and the 
private sector concurred in the NAPA recommendations.
    In particular, NAPA recommended: ``EPA needs to hand more 
responsibility and decisionmaking authority over to the States 
and localities * * * [A] new partnership needs to be formed, 
one based on `accountable devolution' of national programs and 
on a reduction in EPA oversight when it is not needed.'' 
Reductions to EPA operating programs are to be achieved in part 
by reductions to EPA oversight of states.
    In addition, NAPA recommended that flexibility be provided 
to local government and the private sector to meet 
environmental standards. Again, the Committee strongly supports 
this recommendation, and directs the Agency to develop and 
submit legislation to address the need for statutory authority 
to provide such flexibility if required.
    NAPA also recommended important management changes to EPA, 
including the need to establish specific environmental goals 
and develop strategies to attain them; using comparative risk 
analyses to inform the selection of priorities and the 
development of specific program strategies; using the budget 
process to allocate resources to the Agency's priorities; 
establishing accountability by setting and tracking benchmarks; 
and evaluating performance.
    The Committee has identified for budgetary reduction a 
number of initiatives which reflect low priorities based on 
comparative risk analysis, such as the environmental technology 
initiative. The Committee believes risk-based analysis must 
provide the basis for budgetary decisionmaking. Any general 
reductions should be accommodated by the elimination of low-
risk activities, and the Committee expects the fiscal year 1997 
budget submission to be based on a thorough comparative risk 
assessment of EPA activities.
    The Committee is directing EPA's Science Advisory Board to 
update its 1990 comparative risk analysis to help guide future 
agency decisionmaking.
    NAPA also recommended that: ``the Agency should begin work 
on a reorganization plan that would break down the internal 
walls between the Agency's major media program offices for air, 
water, waste, and toxic substances.'' Such a reorganization 
would result in management efficiencies and a more coordinated 
approach to environmental protection. Given budgetary 
reductions anticipated over the next several years as we move 
toward a balanced budget, the time is ripe for reorganizing the 
Agency to make better use of its resources. The Committee 
expects the Agency to prepare a reorganization proposal and 
submit its plans to the Committee by January 1, 1996.
    Major reductions to EPA come primarily from the Superfund 
Program, which is reduced by approximately $300,000,000 below 
current levels, and the elimination of earmarks for sewer 
treatment construction. Superfund activities are limited to 
ongoing projects and meeting immediate human health risks, 
pending enactment of comprehensive reauthorization legislation. 
Superfund is a program in need of major reform; to continue 
funding the current program at the requested level is a waste 
of trust fund and taxpayer dollars.
    Other significant reductions are taken to lower priority 
programs which duplicate private sector activities or are not 
critical to the Agency's core mission. These include the 
climate change action plan program, primarily including the 
green programs; the environmental technology initiative; and 
the Montreal Protocol Facilitation Fund.
    The Committee recommendation includes a restructuring of 
EPA's appropriation accounts. This is intended to accomplish 
several objectives: first, to ensure that State grants are 
protected from budget cuts, a separate account has been created 
entitled: ``Program and infrastructure assistance.'' This 
account includes all categorical grants as well as State 
revolving funds. The account totals $2,034,000,000, and 
represents more than 40 percent of the entire EPA 
appropriation. The amount provided for the States represents an 
increase of approximately $300,000,000 over current funding 
levels.
    Second, to provide flexibility to the Agency in meeting 
budgetary reductions, the former ``Program and research 
operations'' account is merged with the other operating 
accounts which fund primarily contractual support activities. 
Two new accounts are created in lieu of research and 
development and abatement, control and compliance: the 
``Science and technology'' account funds all science 
activities, and the ``Program administration and management'' 
account provides for regulatory, technical assistance, 
education, and enforcement activities.
    The new ``Science and technology'' account includes funding 
for all EPA laboratories, except the regional laboratories 
which conduct routine monitoring and testing activities as well 
as technical assistance and support. The new ``Science and 
technology'' account is intended to ensure a coordinated, 
disciplined, consistent approach to EPA research. Sound science 
must play a critical role in EPA decisionmaking. Therefore, 
high quality, peer-reviewed research in support of Agency 
activities should be among the highest priorities for EPA. 
Currently research activities are not adequately coordinated 
and peer review procedures are inconsistent. The Committee 
supports ongoing reorganization efforts within the Office of 
Research and Development, and anticipates that those efforts 
will correct current shortfalls in the research program.

                        research and development

Appropriations, 1995 \1\................................    $335,365,000
Budget estimate, 1996...................................     426,661,000
House allowance.........................................     384,052,000
Committee recommendation................................

\1\ Includes rescission of $14,635,000 in Public Law 104-19.

    The Committee has not provided funds for the ``Research and 
development'' account. Instead, the Committee has created a new 
account, detailed below.

                         SCIENCE AND TECHNOLOGY

Appropriations, 1995....................................................
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                                            $500,000,000

                          program description

    EPA's ``Science and technology'' account provides funding 
for the scientific knowledge and tools necessary to support 
decisions on preventing, regulating, and abating environmental 
pollution and to advance the base of understanding on 
environmental sciences. These efforts are conducted through 
contracts, grants, and cooperative agreements with 
universities, industries, other private commercial firms, 
nonprofit organizations, State and local government, and 
Federal agencies, as well as through work performed at EPA's 
laboratories and various field stations and field offices.

                        COMMITTEE RECOMMENDATION

    The Committee has provided $500,000,000 for science and 
technology. The Committee has replaced the ``Research and 
development'' account with a new ``Science and technology'' 
account which will fund all EPA science and technology 
activities, including personnel costs, laboratory costs (except 
the Environmental Service Division laboratories), and all 
activities formerly funded in the ``Research and development'' 
account. Therefore, this account provides funding for the 
National Air and Radiation Environmental Laboratory in 
Montgomery, AL; the Office of Radiation and Indoor Air 
Laboratory in Las Vegas, NV; Office of Groundwater and Drinking 
Water Technical Support Division in Cincinnati, OH; the 
National Enforcement Investigations Center in Denver, CO; the 
National Vehicle and Fuel Emissions Laboratory in Ann Arbor, 
MI; the Environmental Chemistry Laboratory in Bay St. Louis, 
MS; and the Analytical Chemistry Laboratory and Microbiology 
Laboratory in Beltsville, MD, in addition to the laboratories 
currently under the Office of Research and Development.
    The ``Science and technology'' account is intended to bring 
together most science-related activities in the agency into one 
appropriation account. Due to questions over the function of 
the Environmental Service Division [ESD] labs, the costs 
associated with those labs were excluded from the new account. 
However, the Committee directs the agency to submit an analysis 
of whether the ESD labs should also be included under this 
account when it submits the fiscal year 1997 budget.
    The new account structure also will provide the Agency with 
more flexibility in determining where and how to make budgetary 
reductions. The Committee's normal reprogramming guidelines, 
however, will continue to apply.
    The Committee believes that sound science should provide 
the basis for all EPA policies, priority setting, and 
decisionmaking. EPA has begun to make progress to improve the 
quality of its research products in several key areas, such as 
implementing an agencywide peer review policy and reorganizing 
its Office of Research and Development. However, many of these 
efforts are in the very early stages and much more needs to be 
done. The Committee will be following closely these 
initiatives.
    EPA recently announced a reorganization of its research and 
development laboratories along risk-based lines in an effort to 
improve the management, coordination, quality, and 
prioritization of EPA research activities. The Committee 
supports that effort, and believes that all EPA science and 
technology activities should be included in this initiative. 
The Committee is concerned that the reorganization excludes the 
program office laboratories and the Environmental Service 
Division labs. These labs operate independently of the Office 
of Research and Development, leading to possible overlap, 
duplication, and quality control problems.
    Furthermore, the Committee is disappointed that the 
agency's reorganization plans do not involve eliminating any of 
the current laboratory facilities, and encourages the agency to 
study whether any of the laboratories, including ESD labs, 
could be combined or eliminated. In view of declining 
resources, along with the deteriorating infrastructure of many 
of the labs, the Committee believes consolidations could result 
in a more prudent use of limited resources.
    Along with reorganization efforts, ORD has been developing 
a long-range strategic plan. The Committee directs the Science 
Advisory Board to assess both of these efforts and to report to 
the Committee its findings within 6 months of enactment of this 
act.
    Last year, the Committee directed the National Research 
Council to undertake a review of EPA's research program and its 
peer review procedures in particular. The Committee is keenly 
interested in receiving the results of this study, expected 
late this year, and anticipates ORD will incorporate the 
findings and recommendations into its strategic planning 
efforts.
    The Committee has made the following changes to the budget 
request for research and development:
  +$150,000,000 for personnel and travel costs, transferred 
        from the former ``Program and research operations'' 
        account. This amount includes personnel for all 
        laboratories specified above, and represents a 
        reduction of approximately $24,000,000 below the budget 
        request. The Committee would be willing to consider a 
        reprogramming request as part of the operating plan 
        should this amount prove to be insufficient.
  +$35,000,000 for the program office laboratories 
        (nonpersonnel costs), transferred from the former 
        ``Abatement, control, and compliance'' account. This 
        represents a reduction of approximately $12,000,000 
        below the request, and is $3,000,000 above the 1995 
        level. The Committee would be willing to consider a 
        reprogramming request as part of the operating plan 
        should this amount prove to be insufficient.
  -$31,645,700 from the working capital fund. This fund has not 
        been approved.
  -$59,200,000 from the environmental technology initiative, in 
        order to fund higher priority activities. Remaining 
        funds should be targeted to technology verification 
        activities and other critical efforts which do not 
        duplicate private sector initiatives.
  +$1,000,000 for the experimental program to stimulate 
        competitive research [EPSCoR]. EPA is urged to make 
        EPSCoR a permanent part of the science to achieve 
        results [STAR] initiative.
  +$1,000,000 for the Water Environment Research Foundation.
  +$1,700,000 for drinking water research through the American 
        Water Works Association Research Foundation.
  +$1,000,000 for research into the health effects of arsenic.
  +$1,000,000 for the Center for Air Toxics Metals.
  -$26,515,300 as a general reduction, subject to normal 
        reprogramming guidelines.
    The Committee directs EPA to submit the disinfectants/
disinfection byproducts proposed rule, plus all substantive 
scientific and technical comments the agency has received on 
the proposed rule, to its Science Advisory Board. SAB is to 
review and comment on the scientific and technical basis for 
the proposed rule, identify important data gaps that 
substantially limit the characterizations of the microbial 
versus chemical byproducts risks, and identify research 
activities that will be needed to fill identified data gaps. 
EPA is to respond in writing to the SAB and this Committee 
regarding its comments and findings at least 90 days prior to 
issuing the final rule.
    In 1990 EPA's Science Advisory Board produced a report 
entitled ``Reducing Risk: Setting Priorities and Strategies for 
Environmental Protection.'' This report provided a relative 
risk analysis of environmental issues, and requires updating. 
Therefore, the Committee directs SAB to provide a revised 
analysis of environmental issues based on relative risk and 
opportunities for risk reduction. SAB should solicit and 
incorporate the views of nonscientific organizations wherever 
appropriate, such as the National Academy of Public 
Administration, in view of the fact that a risk ranking cannot 
be based on scientific data alone. This report should be 
subject to a thorough peer review process, and when complete, 
should provide the basis for EPA activities. Its findings also 
should be incorporated into the Office of Research and 
Development strategic planning efforts.
    The Committee understands it is widely held in the 
scientific community that EPA's draft dioxin risk 
characterization document (chapter 9) which presents the 
agency's major conclusion that dioxins may produce a broad 
spectrum of effects in humans at or near current background 
levels, does not accurately reflect the science on exposures to 
dioxins and their potential health effects.
    Further, the Committee is concerned that EPA selected and 
presented scientific data and interpretations of that data that 
are heavily dependent upon assumptions and hypotheses that 
deserve careful scrutiny by the scientific community. The 
Committee also understands that inaccuracies and omissions in 
the risk characterization chapter, which have been noted and 
criticized by EPA's Science Advisory Board and the general 
scientific community, were the result of the agency's failure 
to consult with and utilize the assistance of the outside 
community in writing chapter 9.
    EPA is directed to ensure that the concerns and 
recommendations of the SAB are properly accounted for in 
rewriting chapters 8 and 9, and involve as appropriate the 
participation of scientists from other relevant agencies and 
those scientists who originally authored the other reassessment 
chapters in rewriting chapter 9 in the aforementioned draft.
    The Committee supports the scientific analysis that is 
accomplished at the Robert S. Kerr Environmental Research 
Laboratory in Ada, OK, and encourages their continued research 
in ground water quality and remediation procedures.
    The Committee directs the Agency to cease any further 
hiring under the contractor conversion program and provide a 
report to the Committee by January 1, 1996, on staffing plans 
including the use of Federal and contract employees.

                   abatement, control, and compliance

Appropriations, 1995 \1\................................  $1,407,193,000
Budget estimate, 1996...................................   1,748,823,000
House allowance.........................................................
Committee recommendation................................................

\1\ Includes rescission of $9,807,000 in Public Law 104-19.

    The Committee has deleted this account. Activities formerly 
funded in this account are funded in the ``Program 
administration and management,'' ``Science and technology,'' 
and ``Program and infrastructure assistance'' accounts.

                    program and research operations

Appropriations, 1995....................................    $922,000,000
Budget estimate, 1996...................................   1,017,298,000
House allowance.........................................................

Committee recommendation

                                             ...........................

    The Committee has deleted this account. Activities formerly 
funded in this account are funded in the ``Program 
administration and management'' and ``Science and technology'' 
accounts.

                 environmental programs and compliance

    The House created a new account, ``Environmental programs 
and compliance,'' consisting of the former ``Program and 
research operations'' and ``Abatement, control, and 
compliance'' accounts. The Committee has not agreed to this 
account structure.

                 program administration and management

Appropriations, 1995....................................................
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                                          $1,670,000,000

                          program description

    The Agency's program administration and management includes 
the development of environmental standards; monitoring and 
surveillance of pollution conditions; direct Federal pollution 
control planning; technical assistance to pollution control 
agencies and organizations; preparation of environmental impact 
statements; compliance assurance; and assistance to Federal 
agencies in complying with environmental standards and insuring 
that their activities have minimal environmental impact.

                        committee recommendation

    The Committee created a new account, which includes 
activities formerly funded in the ``Abatement, control, and 
compliance'' and ``Program and research operations'' accounts, 
with the following exceptions: resources associated with the 
program office laboratories and resources associated with the 
Office of Research and Development personnel are funded in the 
``Science and technology'' account, and all State grants are 
shifted to the ``Program and infrastructure assistance'' 
account.
    The Committee has provided $1,670,000,000 for program 
administration and management, and has made the following 
changes to the budget request for abatement, control, and 
compliance and program and research operations:
  -$81,474,300 for program office laboratory costs (funded in 
        the ``Science and technology'' account).
  -$140,080,200 for ORD personnel costs (funded in the 
        ``Science and technology'' account).
  -$683,466,200 from State and tribal capacity grants (these 
        grants are funded in the ``Program and infrastructure 
        assistance'' account).
  -$40,600,000 from the environmental technology initiative.
  -$90,000,000 from the climate change action plan programs. 
        The amount provided is approximately the same as the 
        fiscal year 1994 level of $40,000,000. Funds for the 
        green programs have been eliminated. The Committee 
        notes that these programs overlap and conflict with 
        statutory authority provided to the Department of 
        Energy in the Energy Policy Act of 1992. For example, 
        the Secretary of Energy was given a mandate to develop 
        labeling and advertising rules for lighting, equipment, 
        and appliances. Therefore, EPA should transfer to DOE 
        those energy efficiency and energy supply programs 
        which DOE, not EPA, is authorized to carry out. Future 
        appropriations for these programs should be requested 
        as part of the DOE budget submission.
  -$24,000,000 from the Montreal Protocol facilitation fund. 
        The Committee notes that a total of $116,000,000 has 
        been provided to date (EPA and State Department 
        appropriations) for the Montreal Protocol.
  +$31,645,700 for the working capital fund, transferred from 
        the ``Research and development'' account. This new fund 
        has not been approved.
  -$1,800,000 from lower priority environmental education 
        activities. This is the same as fiscal year 1995.
  -$3,000,000 from lower priority activities in the Office of 
        International Activities. This is the same level as 
        fiscal year 1995.
  -$405,000 from the Building Air Quality Alliance.
  -$350,000 from activities related to electromagnetic fields. 
        Section 2118 of the Energy Policy Act of 1992 
        established a Federal program to investigate and report 
        on human health effects from electromagnetic fields 
        [EMF]. Congress mandated that this program of research 
        and public communication be managed jointly by the 
        Department of Health and Human Services and the 
        Department of Energy. No programmatic role was assigned 
        to EPA, yet EPA has pursued a number of unintegrated 
        activities on EMF that are of questionable value. 
        Therefore, the Committee believes EPA should not engage 
        in EMF activities.
  -$2,000,000 from the national service initiative.
  -$1,000,000 from the GLOBE Program.
  -$20,000,000 from enforcement activities.
  -$25,000,000 from regional and State oversight. The Committee 
        concurs with the National Academy of Public 
        Administration's recommendation that regional offices 
        should focus on building States' capacity to manage 
        environmental problems, and reduce their oversight of 
        States that demonstrate their ability and willingness 
        to meet Federal standards. Emphasis should be placed on 
        results rather than process. The Committee believes 
        that regional offices may be overstaffed, and that EPA 
        should complete an analysis of the activities of 
        regional office staff to provide a firm basis for 
        determining the proper size and composition of those 
        offices, as NAPA recommended. This reduction is 
        intended to eliminate duplicative efforts and 
        overfiling. The Committee supports all efforts to 
        create a positive partnership with States and the 
        regulated community.
  +$8,500,000 for rural water training and technical assistance 
        activities through the National Rural Water 
        Association, the Rural Community Assistance Program, 
        the Small Flows Clearinghouse, and the National 
        Underground Injection Council.
  +$2,000,000 for the Southwest Center for Environmental 
        Research and Policy.
  +$1,700,000 for waste water operator training grants under 
        section 104(g) of the Clean Water Act.
  +$350,000 for Long Island Sound.
  +$900,000 to remediate the consequences of former and 
        abandoned lead/zinc mining in southern and southeastern 
        Missouri. This will focus remediation efforts on the 
        area where much of the lead/zinc mining historically 
        occurred.
  +$250,000 for an evaluation of ground water quality in 
        Missouri, where evidence is mounting that ground water 
        quality is being threatened by anthropological 
        activities. The evaluation will include the 
        vulnerability of wells to microbiological contaminants, 
        pollution prevention alternatives, and treatment 
        alternatives available to assure safe drinking water 
        supplies.
  +$400,000 for the Small Public Water Systems Technology 
        Assistance Center.
  +$200,000 for a feasibility study for the delivery of water 
        from the Tiber Reservoir to Rocky Boy Reservation.
  +$75,000 for the Rocky Mountain Regional Water Center's model 
        watershed planning effort.
  +$1,000,000 for the National Environmental Training Center 
        for Small Communities.
  +$150,000 for the National Groundwater Foundation to continue 
        the ground water guardian program and develop 
        electronic ground water educational services.
  +$500,000 to continue the methane energy and agricultural 
        development demonstration project.
  +$185,000 for the Columbia River Gorge Commission for 
        monitoring implementation pursuant to Public Law 99-
        663.
  +$1,000,000 for environmental review and basin planning for a 
        sewer separation demonstration project for Tanner 
        Creek.
  +$300,000 to continue the Small Business Pollution Prevention 
        Center managed by the Iowa Waste Reduction Center.
  +$1,500,000 for the final year of the Alternative Fuel 
        Vehicle Training Program.
  +$1,000,000 for the Adirondack Destruction Assessment 
        Program, as authorized by the Clean Air Act Amendments, 
        to assess the effects of acid deposition on ecosystems.
  +$750,000 for the Lake Pontchartrain management conference.
  +$750,000 for the Lake Champlain basin plan. The Committee 
        rejects the House report language regarding Lake 
        Champlain.
  +$750,000 to continue the solar aquatic waste water 
        demonstration program in Vermont.
  +$1,000,000 to continue the onsite waste water treatment 
        demonstration through the small flows clearinghouse.
  +$235,000 for a model program in the Cheney Reservoir to 
        assess water quality improvement practices related to 
        agricultural runoff. The Cheney Reservoir is a major 
        and critical part of the water supply of Wichita, KS. 
        Agricultural runoff, particularly phosphates, and 
        sedimentation from soil erosion threaten the water 
        quality and longevity of the reservoir. Wichita has 
        committed $1,200,000 to begin implementation of soil 
        conservation and other water quality improvement 
        practices at identified pollution sites in the 
        watershed above the reservoir.
  +$500,000 to continue the coordinated model tribal water 
        quality program initiative in Washington State. The 
        Committee directs the agency to work with affected 
        tribes to incorporate these funds into the tribes' base 
        programs and urges adequate support for this activity.
  +$250,000 for the Ala Wai Canal watershed improvement 
        project.
  +$200,000 for the Sokaogon Cheppewa Community to continue to 
        assess the environmental impacts of a proposed 
        underground sulfide mine near the reservation.
  +$2,000,000 for a demonstration program to remediate leaking 
        above ground storage tanks in the State of Alaska.
  -$41,036,000 as a general reduction, subject to normal 
        reprogramming guidelines.
    The Committee supports the full budget request for the 
Chesapeake Bay Program, the Everglades restoration activities, 
the National Estuary Program, and the Great Lakes Program. 
These amounts are not subject to any general reduction. The 
National Estuary Program funding shall include a grant for 
Sarasota County, FL, to support the implementation of its 
conservation and management plan for Sarasota Bay, as 
authorized by section 320(g)(2) of the Federal Water Pollution 
Control Act, as amended.
    The Committee supports the full budget request for small 
business compliance assistance centers.
    The Committee supports EPA's Environmental Finance Center 
network whose goal is to find ways to achieve more efficient 
and effective environmental infrastructure at less cost. The 
EFC's provide technical assistance, expertise, and information 
to public officials and small business about environmental 
financing opportunities. EPA is urged to provide $2,500,000 for 
the environmental finance centers.
    The Committee strongly disagrees with report language 
contained in House Report 104-201 with respect to EPA's 
reformulated gasoline oxygenate standard.
    A recent study conducted by EPA and the four Lake Michigan 
States found that significant portions of ozone-causing air 
pollution are entering the Lake Michigan region from other 
regions, but the study did not address the sources of the 
pollution or the national air transport patterns exacerbating 
the problem. Therefore, the Committee urges EPA to conduct a 
study of the transport of ozone and ozone precursors on a 
national scale, as long as such a study would build upon and 
not duplicate existing studies.
    The Committee strongly supports recommendations made by the 
National Academy of Public Administration in its April 1995 
report to the Committee entitled ``Setting Priorities, Getting 
Results: A New Direction for EPA.'' In particular, NAPA 
recommended that EPA turn more decisionmaking and provide more 
flexibility to State and local governments and the private 
sector; EPA should refine its use of risk and cost-benefit 
analyses in making decisions; and EPA should undertake major 
management reforms including a reorganization to eliminate the 
media-specific fragmentation--all recommendations with which 
the Committee strongly concurs. EPA has convened a task force 
to devise an implementation plan for the recommendations and 
the Committee expects to be kept apprised of the progress in 
this area. In addition to management and organizational 
reforms, the Committee expects EPA to submit a legislative 
proposal to implement needed statutory changes.
    The Committee continues to be concerned with the imbalance 
of costs and benefits to be derived from EPA's proposed cluster 
rule for the pulp and paper industry. As directed in last 
year's Committee report, the Committee is expecting that prior 
to issuance of a final rule, the agency will review all data 
and information provided by industry, reassess the costs and 
benefits which will be obtained, and demonstrate that the 
regulations will produce benefits which will not be exceeded by 
the costs. EPA's assessment should include all industry data on 
bleach and unbleached pulp and paper mills, including the 
advisability of establishing separate air subcategories such as 
the unbleached semi-chemical and sulfite subcategories.
    The Committee encourages EPA to continue to fund the 
Potomac North Branch acid mine drainage remediation project in 
fiscal year 1996 at current levels.
    The Committee concurs with language included in House 
Report 104-201 with respect to the Tellus Institute study of 
costs and benefits of bottle bills. Considering that so many 
States have adopted bottle legislation, additional studies were 
not warranted. This type of study should be declined in the 
future.
    The Committee supports House report language regarding air 
pollution in the United States-Mexico border region, 
particularly in El Paso, TX. Because of its proximity to Ciudad 
Juarez, Mexico, El Paso has little control over its air quality 
and needs full cooperation from EPA to comply with the Clean 
Air Act as applied to border communities by section 179B of the 
Clean Air Act.
    In May of this year, EPA issued a rule to control ozone and 
carbon monoxide related emissions from a broad range of small 
nonroad engines of 25 horsepower or less that power such 
consumer products as lawn mowers, snow blowers, and chain saws, 
beginning in 1997. While the rule was being prepared, EPA 
initiated a regulatory negotiation process for a second rule to 
be promulgated in April 1997, just when the first rule will 
come into force. The May rule expressly found that it reflects 
the greatest degree of emission reduction achievable with 
available technology, considering costs and the degree of 
emission reduction achievable with available technology, 
considering costs and other statutory factors.
    In light of this, the Committee believes EPA should move to 
modify the consent decree, to at a minimum defer the second 
rule, unless the regulatory negotiation achieves a cost-
effective consensus rule that provides adequate lead time, does 
not include automobile-like measures such as in-use testing and 
recall, and preserves the availability of lower cost lawn 
equipment and the associated manufacturing jobs.
    EPA is to report by February 1, 1996, on whether there is 
an air quality need to impose a second rule establishing 
requirements beyond what could be reached by a consensus of the 
interested parties before the costs and benefits of the first 
rule are apparent.
    The Committee has concerns that EPA has pursued activities 
which exceed the Agency's legal authority in the regulation of 
lead by seeking to regulate lead uses that pose no significant 
risks to human health or the environment.
    Specific examples include: (1) proposed rulemaking on the 
regulation of lead and zinc fishing sinkers, notwithstanding a 
May 24, 1994, sense of the Senate resolution on the matter and 
notwithstanding EPA's admission in the proposed rule that an 
accurate number of waterbirds lethally exposed to lead and zinc 
cannot be estimated; (2) an advanced notice of proposed 
rulemaking regarding significant new uses of lead which 
includes racing car fuel and lead shot for ammunition, which is 
exempt from TSCA regulation (15 U.S.C. S. 2602 (2)(B)(v)); (3) 
engaging in activities to promote a council act on lead risk 
reduction through the Organization for Economic Cooperation and 
Development, which encourages regulation beyond the authority 
provided EPA by Congress.
    In keeping with the Committee's direction to maximize 
public health and environmental benefits, EPA should focus on 
true and significant risks of lead, such as lead paint 
abatement, and refrain from misallocating Agency resources on 
issues of secondary importance and/or activities which are not 
authorized under law.
    The Committee believes that sound science should provide 
the basis for all EPA policies and that all regulations should 
be based on accurate and up-to-date information on the 
activities to be regulated. EPA should not implement programs 
or exercise Agency discretion in a manner inconsistent with the 
intent of Congress. In this regard, the Committee is concerned 
with EPA's establishment of standards for maximum achievable 
control technology [MACT] required by the Clean Air Act 
amendments.
    The Committee does not believe EPA is in all instances 
using accurate and current data in setting MACT standards. In 
particular, the Committee is aware that in the MACT standard 
for the refinery industry, key emissions data are based on 1980 
data that do not reflect controls which facilities have adopted 
in the past 15 years. The Committee understands that while EPA 
was aware that this methodology overstates emissions, the 
Agency made no attempt to adjust or modify their estimates.
    Therefore, the standard may convey a misleading impression 
as to the level of health risks associated with refinery 
emissions and the value of the proposed regulations. The 
Committee strongly encourages EPA to reevaluate the refinery 
MACT and other MACT standards which are not based on sound 
science.
    The Committee has serious concerns over the Agency's 
treatment of volatile organic compounds [VOC's] under Clean Air 
Act section 183(e), which addresses the role in ozone 
nonattainment of VOC's emitted from consumer and commercial 
products. The law required EPA to consider reactivity and the 
potential to contribute to ozone nonattainment in assessing 
various VOC's emitted from consumer and commercial products. 
According to a March 15, 1995, study released by EPA, this was 
not done.
    In addition, EPA has stated that small paint manufacturers 
could experience significant adverse economic impacts. The 
Committee urges EPA to follow the requirements of section 
183(e) by conducting a study to determine the potential of 
VOC's from each category of consumer and commercial products to 
contribute to ozone levels which violate the national ambient 
air quality standard for ozone.
    The Committee is concerned that silver, used in a variety 
of services and industries including, but not limited to, 
photographic materials and electrical and electronic 
manufacturing, is still listed as a toxic characteristic 
hazardous waste under RCRA. The Committee believes that the 
economic consequences associated with this listing do not 
justify the benefits. The Agency has deleted the primary 
drinking water standard for silver in 1991 and studies have 
concluded that silver discharge pose no significant threat to 
human health or the environment. Therefore, the Committee urges 
the EPA to remove this outdated, burdensome toxic 
characteristic listing on silver.
    The Committee is dismayed that EPA is not taking final 
action on its proposed lamp management regulation which would 
conditionally exempt spent mercury-containing lamps from the 
existing hazardous waste requirements. EPA's failure to act on 
the lamp management rule will impose additional costs that 
create a disincentive for implementation of energy efficient 
lighting upgrades.
    This has the perverse effect of delaying reductions in 
emissions of mercury and greenhouse gases from electric power 
generation that would far outweigh any potential emissions from 
mismanagement of spent lamps. In the absence of guidance from 
EPA, States are adopting conflicting regulations which is 
leading to significant confusion among generators. The 
Committee urges EPA to finalize this rule by the end of 
calendar year 1995, taking into consideration the costs and 
benefits of mercury waste management and importance of State 
flexibility in setting environmental priorities. This is not 
intended in any way to prohibit EPA from approving the 
authorization of State programs consistent with the Federal 
universal waste rule.
    The Committee is aware that the State of Washington has 
raised concerns regarding EPA's proposed designation of the 
Eastern Columbia Plateau as a sole source aquifer. The State's 
concerns are based on the science being used and the potential 
economic impacts. EPA is urged to work with the State to 
address these concerns.
    The Lower Columbia River, in Oregon and Washington, was 
designated as part of the National Estuary Program in July. The 
Committee understands that since 1990, the two States have had 
in place the Columbia River Bi-State Program to study water 
quality issues in the Lower Columbia. The Bi-State Program is 
made up of a diverse coalition of local officials, river users, 
local business and industry, environmentalists, and port 
officials. The Committee urges the EPA to closely follow the 
makeup of the Bi-State Program in the process of establishing 
the planning committee to develop the implementation plan for 
the Lower Columbia estuary.
    The Committee notes EPA was more than 15 months late in 
meeting a statutory deadline for issuing proposed criteria for 
the Waste Isolation Pilot Plant in Carlsbad, NM, despite the 
fact that the deadline was formulated in consultation with the 
agency. EPA still has not issued final criteria which were due 
almost 1 year ago. No funds should be taken from the $6,800,000 
requested for the Waste Isolation Pilot Plant compliance 
criteria.
    Title V of the Clean Air Act Amendments of 1990 was 
intended to create a permitting system for gathering together 
all of the applicable Federal requirements for air pollution 
sources into one document. In concept, such a system could 
provide more clarity and certainty to an area of regulation 
that is currently complicated and vague. EPA has promulgated a 
rule to implement title V as well as two subsequent proposed 
rules which were intended to clarify the original rule. EPA 
also has issued guidance documents and policy statements 
recently to further explain its implementation scheme. However, 
instead of clarifying requirements and helping States and 
businesses comply with the law, EPA has created confusion and 
chaos. While the Committee supports the goals of EPA's recent 
efforts to streamline this program, the Committee is very 
concerned about the level of confusion and uncertainty 
surrounding it. Therefore, the Committee urges EPA to delay 
enforcement of title V for 1 year. Such a delay would be 
consistent with the original intent of the Clean Air Act 
Amendments of 1990 which provided 2 years before States were 
required to submit permit programs to EPA, and would shield 
States and employers from sanctions for actions pursuant to an 
EPA program which is still evolving.
    Unless stated otherwise, the Committee does not concur with 
language in House Report 104-201 affecting a variety of 
regulatory issues.

                      office of inspector general

                     (including transfer of funds)

Appropriations, 1995....................................     $44,595,000
Budget estimate, 1996...................................      47,838,000
House allowance.........................................      33,968,000

Committee recommendation

                                                              40,000,000

                          program description

    The Office of Inspector General provides EPA audit and 
investigative functions to identify and recommend corrective 
actions of management, program, and administrative deficiencies 
which create conditions for existing or potential instances of 
fraud, waste, and mismanagement.
    Trust fund resources are transferred to this account 
directly from the hazardous substance Superfund and leaking 
underground storage tank trust funds.

                        committee recommendation

    The Committee has provided $40,000,000 for the Office of 
Inspector General, a reduction of $7,838,000 below the budget 
request and an increase of $6,032,000 above the House. The 
reduction is a general reduction, subject to normal 
reprogramming guidelines. The appropriation includes 
$27,700,000 from the general fund in this account, $11,700,000 
from the Superfund trust fund, and $600,000 from the LUST trust 
fund. The trust fund resources will be transferred to the 
inspector general ``General fund'' account with an expenditure 
transfer.

                        buildings and facilities

Appropriations, 1995....................................     $43,870,000
Budget estimate, 1996...................................     112,820,000
House allowance.........................................      28,820,000

Committee recommendation

                                                              60,000,000

                          program description

    The appropriation for buildings and facilities at EPA 
covers the necessary major repairs and improvements to existing 
installations which are used by the Agency. This appropriation 
also covers new construction projects when appropriate.

                        committee recommendation

    The Committee has provided $60,000,000 for buildings and 
facilities. This includes $33,000,000 to complete the Fort 
Meade Science Center (region III laboratory), as requested by 
the administration. The balance is provided for the new 
headquarters project and repairs and improvements, reflecting a 
general reduction of $2,820,000 below the request.

                     hazardous substance superfund

                     (including transfer of funds)

Appropriations, 1995 \1\................................  $1,335,000,000
Budget estimate, 1996...................................   1,507,937,000
House allowance.........................................   1,003,400,000
Committee recommendation................................   1,003,400,000

\1\ Includes rescission of $100,000,000 in Public Law 104-19.
---------------------------------------------------------------------------

                          program description

    On October 17, 1986, Congress amended the Comprehensive 
Environmental Response, Compensation, and Liability Act of 1980 
[CERCLA] through the Superfund Amendments and Reauthorization 
Act of 1986 [SARA]. SARA reauthorized and expanded the 
hazardous substance Superfund to address the problems of 
uncontrolled hazardous waste sites and spills. Specifically, 
the legislation mandates that EPA: (1) provide emergency 
response to hazardous waste spills; (2) take emergency action 
at hazardous waste sites that pose an imminent hazard to public 
health or environmentally sensitive ecosystems; (3) engage in 
long-term planning, remedial design, and construction to clean 
up hazardous waste sites where no financially viable 
responsible party can be found; (4) take enforcement actions to 
require responsible private and Federal parties to clean up 
hazardous waste sites; and (5) take enforcement actions to 
recover costs where the fund has been used for cleanup.

                        committee recommendation

    The Committee has provided $1,003,400,000 for Superfund, as 
in the House. This represents a decrease of $331,600,000 below 
the current budget and $504,537,000 below the budget request. 
The amount provided includes $250,000,000 from general 
revenues, as authorized, and the balance from the trust fund.
    It is widely agreed that the Superfund Program needs to be 
overhauled substantially. Fiscal year 1996 will be a transition 
year for the Superfund Program, pending enactment and full-
scale implementation of reauthorization legislation. Rather 
than continuing to fund the program at current levels, the 
Committee believes it prudent to limit funding to cleanup 
activities that address immediate risks and risks based on 
current land uses until changes which will be authorized can be 
implemented.
    The Committee has made the following changes to the budget 
request:
  -$309,659,000 from response actions, to be derived from 
        planned new starts for site cleanups which pose health 
        risks under future land use only. The Committee directs 
        that all removal actions, which address immediate risks 
        to human health, be fully funded. EPA anticipates this 
        will require approximately $200,000,000.
  -$40,000,000 from new research contracts.
  -$65,000,000 from enforcement.
  -$50,000,000 from management and support.
  -$2,378,000 from the inspector general.
  -$6,000,000 from the Department of Justice interagency 
        transfer.
  -$18,000,000 from the National Institutes for Environmental 
        Health Sciences research, leaving $16,000,000. This 
        amount is consistent with the amount provided for the 
        EPA Superfund research program.
  -$2,000,000 from NIEHS worker training grants.
  -$14,000,000 from the Agency for Toxic Substances and Disease 
        Registry. ATSDR will have fewer requirements in fiscal 
        year 1996 since the Superfund Program is being slowed 
        significantly. Within the amount provided, ATSDR is 
        urged to fund the minority health professions schools 
        [AMHPS] cooperative agreement at the requested level of 
        $4,000,000.
  +$2,500,000 for the Gulf Coast Hazardous Substance Research 
        Center.
    Administrative expenses should be limited to $290,000,000, 
subject to normal reprogramming guidelines.
    In light of the transitional nature of fiscal year 1996 and 
the decrease in available funds, the Committee directs that the 
Agency prioritize its limited resources on the most serious 
sites. In the past, EPA has completely failed to prioritize 
Superfund remedical action resources to address the worst sites 
first. This lack of risk-based prioritization can no longer be 
tolerated.
    A recent General Accounting Office report examined EPA data 
from 225 records of decision signed between 1991 and mid-1993, 
and found that over one-half of the sites did not pose human 
health risks requiring cleanup today, but might pose risks in 
the future if land use patterns change. EPA is to afford the 
highest priority to protecting against immediate health risks 
and health risks posed at sites under current land uses, as 
described in the GAO report, and target funds accordingly. This 
direction in no way impacts the removal program, or limits EPA 
from conducting preliminary assessments and site 
investigations.
    Finally, EPA is directed to modify its use of risk 
assessment practices to reflect accurately the condition of the 
site factoring in any actions taken under removal authorities 
and any voluntary measures. The decision to move forward to the 
signing of the ROD and the RD/RA phase should be undertaken 
based on all relevant data including EPA's risk assessment of 
the site, ATSDR's determination of whether a completed pathway 
of exposure exists and whether the site is classified as a 
health hazard or urgent hazard site, and any impact of removal 
or other voluntary actions.
    The Committee is aware that EPA in anticipation of funding 
limitations is developing contingent action plans to issue stop 
work orders under existing Superfund cleanup contracts; to 
delay issuance of new work orders; to delay negotiation and 
award of new response action contracts [RAC's]; and to possibly 
terminate existing RAC's for convenience of the Government. The 
Committee is concerned about the potential for disruption and 
urges EPA to do everything it can to minimize restrictions on 
current and future work orders and disruption.
    Recognizing that funding for Superfund activities will be 
constrained by decreasing budget resources, the Committee is 
disappointed that EPA has not taken greater initiative to 
develop and implement internal reforms associated with the 
administration and management of Superfund to assure more 
effective resource application and greater productivity. Among 
these reforms are development of a clear priority-based process 
for allocating funds to site-specific cleanup activities; 
development of results-oriented statements of work and 
performance-based criteria and measures for use in all 
contracts; increased use of fixed-price contracts; and 
indemnification of response action contractors in those 
instance when adequate insurance at fair and reasonable prices 
is not available. The Committee directs EPA to conduct a study 
of these and other internal reform initiatives which may be 
appropriate for the Superfund Program, and report back to the 
Committee by March 1, 1996. In conducting this study, EPA is 
encouraged to consult with the Departments of Defense and 
Energy with regard to environmental restoration and management 
program and contract reform initiatives underway in those 
Departments, as well as with industry.
    The Committee directs EPA to continue supporting the Mine 
Waste Technology Program, an existing research program 
conducted through the Superfund Innovative Technology 
Evaluation Program with $3,000,000 in fiscal year 1996.
    The Committee is aware that the 29th and Mead Superfund 
site in Wichita, KS, is to be deleted from the national 
priorities list [NPL]. The Committee is concerned with the 
amount of time it is taking to delist the site, leading to 
frustration and uncertainty in the community. The delisting is 
to occur by the end of the calendar year.
    The Committee is greatly concerned over the actions of EPA 
at the Tulalip landfill site in Marysville, WA, listed on the 
Superfund NPL. The site was placed on the NPL immediately prior 
to the enactment of the prohibition on further listings 
included in the Fiscal Year 1995 Rescission Act. The Committee 
is concerned that a comprehensive baseline risk assessment was 
not used as the basis for the remedy selection at the site.
    The Committee understands that the remedy selection 
proposed for the site is estimated to cost site potentially 
responsible parties [PRP's] a total of nearly $40,000,000. 
Given the exorbitant cost of the proposed remedy selection, and 
the lack of a comprehensive baseline risk assessment to support 
the remedy selection, the Committee directs the EPA to 
reevaluate all proposed remedial action options.
    The Committee directs the Agency to conduct a comprehensive 
baseline risk assessment and an alternative dispute resolution 
procedure prior to adopting a final remedial action plan. The 
alternative dispute resolution procedure should utilize a 
neutral third-party mediator, agreeable to both the PRP's and 
the Agency.
    The Committee supports the continuation of the Superfund 
innovative technology evaluation [SITE] and the Hazardous 
Substance Research Center programs. The Committee directs EPA 
to determine, after ensuring that priority is afforded to 
funding cleanup activities to meet immediate health risks and 
health risks posed under current land uses, whether additional 
funds can be reprogrammed to SITE and the hazardous substance 
research centers. EPA should propose such a reprogramming, if 
possible, as part of its fiscal year 1996 operating plan.
    Bill language has been included prohibiting EPA from 
spending funds to add sites to the national priorities list or 
propose sites for listing, unless requested by the Governor or 
appropriate tribal leader of the State in which the site is 
located. EPA faces significant obstacles in completing cleanups 
at facilities already listed on the NPL. In view of the 
reduction in funding and ongoing reauthorization effort, EPA 
should concentrate its efforts on existing NPL facilities. The 
Committee notes that neither the delisting of facilities nor 
removal actions are affected by this legislation and should 
continue wherever warranted.
    Language contained in the House bill prohibiting the 
expenditure of funds for the Superfund Program after December 
31, 1995, unless CERCLA is reauthorized, has been deleted.

              leaking underground storage tank trust fund

                     (including transfer of funds)

Appropriations, 1995....................................     $70,000,000
Budget estimate, 1996...................................      77,723,000
House allowance.........................................      45,827,000

Committee recommendation

                                                              45,827,000

                          program description

    The Superfund Amendments and Reauthorizations Act of 1986 
[SARA] established the leaking underground storage tank [LUST] 
trust fund to conduct corrective actions for releases from 
leaking underground storage tanks containing petroleum and 
other hazardous substances. EPA implements the LUST program 
through State cooperative agreement grants which enable States 
to conduct corrective actions to protect human health and the 
environment. The trust fund is also used to enforce responsible 
parties to finance corrective actions and to recover expended 
funds used to clean up abandoned tanks.

                        committee recommendation

    The Committee recommends a budget of $45,827,000 for the 
Leaking Underground Storage Tank Program, as provided by the 
House. This is a decrease of $24,173,000 below the current 
estimate and $31,446,000 below the request. Bill language 
limits administrative expenses to $8,000,000.

                           oilspill response

                     (including transfer of funds)

Appropriations, 1995....................................     $20,000,000
Budget estimate, 1996...................................      23,047,000
House allowance.........................................      20,000,000

Committee recommendation

                                                              15,000,000

                          program description

    This appropriation, authorized by the Federal Water 
Pollution Control Act of 1987 and amended by the Oil Pollution 
Act of 1990, provides funds for preventing and responding to 
releases of oil and other petroleum products in navigable 
waterways. EPA is responsible for: directing all cleanup and 
removal activities posing a threat to public health and the 
environment; conducting inspections, including compelling 
responsible parties to undertake cleanup actions; reviewing 
containment plans at facilities; reviewing area contingency 
plans; pursuing cost recovery of fund-financed cleanups; and 
conducting research of oil cleanup techniques. Funds are 
provided through the oilspill liability trust fund established 
by the Oil Pollution Act and managed by the Coast Guard.

                        committee recommendation

    The Committee has provided $15,000,000 for the oilspill 
response trust fund a reduction of $8,047,000 below the request 
and $5,000,000 below the current level and the House amount. 
The Committee included bill language limiting administrative 
expenses to $8,000,000.

               water infrastructure/state revolving funds

Appropriations, 1995....................................  $2,262,000,000
Budget estimate, 1996...................................   2,365,000,000
House allowance.........................................   1,500,175,000

Committee recommendation

                                             ...........................

    This account has been eliminated. The Committee has 
provided funding for water infrastructure/State revolving funds 
in a new account, ``Program and infrastructure assistance.''

                 program and infrastructure ASSISTANCE

Appropriations, 1995....................................................
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                                          $2,340,000,000

                          PROGRAM DESCRIPTION

    The ``Program and infrastructure'' account funds grants to 
support the State revolving fund programs; State, tribal, 
regional, and local environmental programs; and special 
projects to address critical waste water treatment needs. This 
account couples the former ``Water infrastructure/SRF'' account 
with 16 categorical grant programs previously funded in the 
``Abatement, control, and compliance'' account. In addition, 
the funds provided in this account, exclusive of the funds for 
the SRF and the special waste water treatment projects, may be 
used by the Agency to enter into performance partnerships with 
States and tribes rather than media-specific categorical 
program grants, if requested by the States and tribes.
    This account funds the following infrastructure grant 
programs: State revolving funds; United States-Mexico Border 
Program; colonias projects; and Alaska Native villages.
    It also contains the following environmental grants, State/
tribal program grants, and assistance and capacity building 
grants: (1) Nonpoint source (sec. 319 of the Federal Water 
Pollution Control Act); (2) water quality cooperative 
agreements (sec. 104(b)(3) of FWPCA; (3) public water system 
supervision; (4) air resource assistance to State, local, and 
tribal governments (sec. 105 of the Clean Air Act); (5) radon 
State grants; (6) control agency resource supplementation (sec. 
106 of the FWPCA); (7) wetlands program implementation; (8) 
underground injection control; (9) Pesticides Program 
implementation; (10) lead grants; (11) hazardous waste 
financial assistance; (12) pesticides enforcement grants; (13) 
pollution prevention; (14) toxic substances enforcement grants; 
(15) Indians general assistance grants; and, (16) underground 
storage tanks.

                        COMMITTEE RECOMMENDATION

    The Committee has created a new account for grants to State 
and tribal governments for the implementation of environmental 
programs. Providing appropriations for State and tribal 
capacity grants in one account will enhance the agency's 
ability to provide performance partnerships, or block grants, 
to the States. Current agency plans do not call for the 
inclusion of State revolving funds in the performance 
partnerships; however, the agency, with the advice and 
consultation of the States and the committees of jurisdiction, 
should consider whether State revolving funds should be 
included in block grants in the future.
    The Committee has provided $2,340,000,000 for program and 
infrastructure assistance. Therefore, the amount provided for 
State and tribal assistance represents more than 40 percent of 
the entire EPA appropriation. The appropriation includes 
$1,500,000,000 for State revolving funds; $675,000,000 for 
State grants (an increase of $10,000,000 over fiscal year 1995) 
of which $15,000,000 is for general assistance to tribes; 
$100,000,000 for Mexico border water and waste water treatment 
construction activities; $50,000,000 for grants to the Texas 
colonias; and $15,000,000 for waste water treatment 
construction in native Alaskan villages. The Committee's 
recommendation includes grants for Mexico border/colonias 
projects and the Alaskan native villages owing to the unique 
regional needs in these areas, and to address the significant 
health problems which result from extremely rudimentary 
sanitary systems in these areas.
    Of the amount provided for State revolving funds, 
$500,000,000 shall be held in reserve for drinking water State 
revolving funds until legislation authorizing drinking water 
SRF's is enacted, but no later than December 31, 1995. Should 
authorization not occur by that date, these funds shall 
immediately become available for waste water SRFs, along with 
the $225,000,000 previously appropriated for drinking water 
SRF's.
    The amount provided for State revolving funds represents an 
increase of $500,000,000 over the House amount. The following 
table compares the State allotment for State revolving funds 
under the Committee's recommendation, compared with the fiscal 
year 1995 amount, the budget request, and the House allowance:

----------------------------------------------------------------------------------------------------------------
                                                               President's                                      
                  State                   Fiscal year 1995  fiscal year 1996   House allowance      Committee   
                                              allotment          budget                          recommendation 
----------------------------------------------------------------------------------------------------------------
Alabama.................................       $13,911,900       $17,874,200       $11,262,900       $16,894,400
Alaska..................................        7,446,200,         9,567,000         6,028,300         9,042,500
Arizona.................................         8,403,300        10,796,600         6,803,200        10,204,700
Arkansas................................         8,138,800        10,456,800         6,589,000         9,883,600
California..............................        88,981,600       114,324,600        72,038,200       108,057,300
Colorado................................         9,952,000        12,786,500         8,057,000        12,085,500
Connecticut.............................        15,241,800        19,582,800        12,339,500        18,509,300
Delaware................................         6,107,800         7,847,300         4,944,800         7,417,100
District of Columbia....................         6,107,800         7,847,300         4,944,800         7,417,100
Florida.................................        41,996,600        53,957,800        33,999,900        50,999,800
Georgia.................................        21,035,800        27,027,100        17,030,300        25,545,500
Hawaii..................................         9,635,900        12,380,300         7,801,100        11,701,600
Idaho...................................         6,107,800         7,847,300         4,944,800         7,417,100
Illinois................................        56,269,000        72,295,100        45,554,600        68,331,900
Indiana.................................        29,984,100        38,523,900        24,274,700        36,412,000
Iowa....................................        16,838,500        21,634,300        13,632,200        20,448,300
Kansas..................................        11,230,200        14,428,700         9,091,800        13,637,700
Kentucky................................        15,834,700        20,344,600        12,819,500        19,229,300
Louisiana...............................        13,677,000        17,572,400        11,072,700        16,609,000
Maine...................................         9,631,000        12,374,000         7,797,100        11,695,600
Maryland................................        30,091,100        38,661,400        24,361,300        36,542,000
Massachusetts...........................        42,241,400        54,272,300        34,198,000        51,297,100
Michigan................................        53,496,200        68,732,600        43,309,800        64,964,600
Minnesota...............................        22,867,500        29,380,500        18,513,200        27,769,900
Mississippi.............................        11,209,300        14,401,800         9,074,900        13,612,300
Missouri................................        34,490,200        44,313,400        27,922,700        41,884,100
Montana.................................         6,107,800         7,847,300         4,944,800         7,417,100
Nebraska................................         6,363,600         8,176,100         5,151,900         7,727,900
Nevada..................................         6,107,800         7,847,300         4,944,800         7,417,100
New Hampshire...........................        12,433,300        15,974,400        10,065,800        15,098,700
New Jersey..............................        50,841,500        65,321,800        41,160,600        61,740,800
New Mexico..............................         6,107,800         7,847,300         4,944,800         7,417,100
New York................................       137,325,400       176,438,000       111,176,700       166,765,600
North Carolina..........................        22,454,200        28,849,400        18,178,600        27,267,900
North Dakota............................         6,107,800         7,847,300         4,944,800         7,417,100
Ohio....................................        70,040,700        89,989,200        56,703,900        85,055,900
Oklahoma................................        10,051,700        12,914,500         8,137,700        12,206,500
Oregon..................................        14,054,600        18,057,600        11,378,400        17,067,700
Pennsylvania............................        49,282,900        63,319,300        39,898,700        59,848,100
Rhode Island............................         8,354,100        10,733,400         6,763,300        10,145,000
South Carolina..........................        12,745,700        16,375,900        10,318,800        16,478,200
South Dakota............................         6,107,800         7,847,300         4,944,800         7,417,100
Tennessee...............................        18,073,600        23,221,200        14,632,100        21,948,200
Texas...................................        56,855,600        73,061,700        46,037,600        69,056,400
Utah....................................         6,555,600         8,422,700         5,307,300         7,960,900
Vermont.................................         6,107,800         7,847,300         4,944,800         7,417,100
Virginia................................        25,462,000        32,713,800        20,613,600        30,920,500
Washington..............................        21,636,200        27,798,400        17,515,300        26,274,500
West Virginia...........................        19,394,800        24,918,700        15,701,700        23,552,600
Wisconsin...............................        33,635,200        43,214,900        27,230,600        40,845,800
Wyoming.................................         6,107,800         7,847,300         4,944,800         7,417,100
American Samoa..........................         1,117,000         1,435,100           904,300         1,356,400
Guam....................................           808,200         1,038,400           654,300           981,500
Northern Marianas.......................           519,100           667,000           420,300           630,400
Puerto Rico.............................        16,227,100        20,848,800        13,137,200        19,705,900
Trust Territory of Palau................           451,500           580,100           365,500           548,300
Virgin Islands..........................           648,300           832,900           524,900           787,300
                                         -----------------------------------------------------------------------
      Total.............................     1,229,024,000     1,579,065,000       995,000,000     1,492,500,000
Indian tribes...........................         6,176,000         7,935,000         5,000,000         7,500,000
                                         -----------------------------------------------------------------------
      Total.............................     1,235,200,000     1,587,000,000     1,000,000,000     1,500,000,000
----------------------------------------------------------------------------------------------------------------


    EPA's performance partnership agreement with the States 
calls for curtailing EPA's oversight of well-established, 
effective State environmental programs; the expanded use of 
environmental goals and indicators; greater reliance on self-
assessment by the States; and the development of new 
environmental performance agreements. The Committee strongly 
supports this agreement and all efforts to eliminate 
unnecessary, redundant oversight of the States. The Committee 
has provided $665,000,000 for State grants, the same as the 
current level of funding for EPA's categorical grant programs. 
The Committee has provided bill language enabling EPA to enter 
into performance partnership agreements with States, replacing 
the individual media grants with a single multimedia grant. EPA 
is to provide maximum flexibility to the States through these 
performance partnerships.

                       Administrative Provisions

    A provision has been included which prevents EPA from 
requiring that States adopt a centralized inspection and 
maintenance program as part of their State implementation plan 
under the Clean Air Act, although the States retain the 
flexibility to adopt such a program should they desire. EPA is 
to review each State's SIP and should not automatically assign 
a discount for test-and-repair programs. Similar language has 
been included in earlier legislation.
    A provision has been included, as in the House bill and in 
previous legislation, preventing EPA from requiring States to 
implement trip reduction plans as part of their State 
implementation plan.
    The Committee has included a provision which prevents EPA 
from establishing any new standards under the Safe Drinking 
Water Act for arsenic, sulfate, radon, ground water 
disinfection, and a variety of contaminants referred to as 
phase VI-B, except for the disinfection/disinfection byproducts 
rulemaking which includes cryptosporidium, until the drinking 
water act is reauthorized. This provision shall not preclude 
work on, or finalization of, the information collection rule 
which is necessary to collect information to possibly regulate 
cryptosporidium. The provision does not preclude the Agency 
from carrying out research into the health effects from low-
level exposure to arsenic, and the Committee has provided 
$1,000,000 for that purpose. This action focuses EPA resources 
on the contaminant of most immediate concern to public health, 
cryptosporidium, while recognizing that scarce resources will 
not be well spent by establishing standards for contaminants 
for which there is little scientific data on health risks or 
for which the health risk is considered to be relatively low. 
The Committee's provision is consistent with EPA's own action 
to seek relief from the court-ordered deadlines for 
establishing these standards.
    As in the Fiscal Year 1995 VA, HUD, and Independent 
Agencies Appropriations Act, a provision has been included 
prohibiting EPA from implementing a proposed rulemaking issued 
last April concerning foreign refinery baseline requirements 
for reformulated gasoline.
    A provision has been included prohibiting EPA from 
administering subsection 404(c) of the Clean Water Act, which 
provides EPA veto authority over proposed Corps of Engineers 
wetlands permits. The Committee's intent is to eliminate 
duplicative activities and streamline the wetlands permitting 
process. The Corps has the authority and expertise to 
administer the wetlands program. That the same law be 
administered by two separate Federal agencies cannot be 
justified, particularly in view of budgetary constraints. The 
Committee notes that this provision does not impact EPA's role 
in granting States authority to administer their own wetlands 
program or its enforcement authority under section 404 of the 
Clean Water Act.
    A provision has been included exempting an industrial 
discharger to the Kalamazoo, MI, Water Reclamation Plant from 
categorical pretreatment standards under section 307(b) of the 
Federal Water Pollution Control Act if certain criteria are 
met. The provision ensures that water quality standards are met 
without requiring duplicative and costly wastewater treatment 
plant construction.
    An administrative provision has been included prohibiting 
the use of funds by EPA to regulate fuel additives in certain 
instances. This provision was included in the fiscal year 1994 
VA-HUD appropriation bill. The purpose of this limitation is to 
deal with a possible health problem in Alaska said to be caused 
by the use of methyl tertiary butyl ether [MTBE] in 
nonattainment areas of Alaska. The limitation precludes 
enforcement of section 211(m)(2) of the Clean Air Act to 
require the use of MTBE. The Committee urges EPA to complete 
any ongoing studies on the health effects of MTBE in cold 
climates as expeditiously as possible.

                   Executive Office of the President

                Office of Science and Technology Policy

Appropriations, 1995....................................      $4,981,000
Budget estimate, 1996...................................       4,981,000
House allowance.........................................       4,981,000

Committee recommendation

                                                               4,981,000

                          program description

    The Office of Science and Technology Policy [OSTP] was 
created by the National Science and Technology Policy, 
Organization, and Priorities Act of 1976 (Public Law 94-238) 
and coordinates science and technology policy for the White 
House. OSTP provides authoritative scientific and technological 
information, analysis, and advice for the President, for the 
executive branch, and for Congress; participates in 
formulation, coordination, and implementation of national and 
international policies and programs that involve science and 
technology; maintains and promotes the health and vitality of 
the U.S. science and technology infrastructure; and coordinates 
research and development efforts of the Federal Government to 
maximize the return on the public's investment in science and 
technology and to ensure Federal resources are used efficiently 
and appropriately.
    OSTP provides support for the National Science and 
Technology Council [NSTC].

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $4,981,000 for 
the Office of Science and Technology Policy. This amount is the 
same as the 1995 enacted level, the budget request, and the 
House allowance.
    The Committee is deeply concerned about lack of effective 
interagency management and integration of the U.S. Global 
Change Research Program. The success of this program depends on 
the coherent utilization of the unique scientific and technical 
capabilities that each of the participating agencies brings to 
the program in observations, process research, modeling, 
prediction, information management and assessment. The 
Committee strongly urges OSTP to take the necessary action to 
strengthen the collaboration and cooperation required among the 
Federal agencies especially as budgetary reductions and 
competing priorities force agencies to reduce their 
contributions. This action should reflect the concerns raised 
in the recent program review conducted by the National Academy 
of Sciences. A response by OSTP should accompany the OSTP 
fiscal year 1997 budget request.

  Council on Environmental Quality and Office of Environmental Quality

Appropriations, 1995....................................        $997,000
Budget estimate, 1996...................................       2,188,000
House allowance.........................................       1,000,000

Committee recommendation

                                                               1,000,000

                          PROGRAM DESCRIPTION

    The Council on Environmental Quality/Office of 
Environmental Quality was established by the National 
Environmental Policy Act and the Environmental Quality 
Improvement Act of 1970. The Council serves as a source of 
environmental expertise and policy analysis for the White 
House, Executive Office of the President agencies, and other 
Federal agencies. CEQ promulgates regulations binding on all 
Federal agencies to implement the procedural provisions of the 
National Environmental Policy Act and resolves interagency 
environmental disputes informally and through issuance of 
findings and recommendations.

                        COMMITTEE RECOMMENDATION

    The Committee has provided $1,000,000 for the Council on 
Environmental Quality, a reduction of $1,188,000 below the 
request and an increase of $3,000 above the current level. 
While the amount provided will not enable CEQ to employ the 
number of FTE's requested in the budget, the Committee believes 
the amount provided will permit CEQ to carry out its primary 
statutory functions, without duplicating other agencies 
efforts.
    The Committee has deleted House bill language terminating 
CEQ. The Committee believes that CEQ performs a useful role and 
should continue to exist, but all activities which duplicate or 
more efficiently could be performed by other agencies should be 
eliminated.
    According to the Code of Federal Regulations (section 
1515.2), the Council's responsibilities include: (1) reviewing 
and evaluating the programs and activities of the Federal 
Government to determine how they are contributing to the 
attainment of the national environmental policy; (2) assisting 
Federal agencies and departments in appraising the 
effectiveness of their existing and proposed facilities, 
programs, policies, and activities affecting environmental 
quality; (3) developing and recommending to the President 
policies to improve environmental quality; (4) advising and 
assisting the President in achieving international cooperation 
for dealing with environmental problems; (5) assisting in 
coordinating among Federal agencies and departments those 
programs which affect, protect, and improve environmental 
quality; (6) fostering research relating to environmental 
quality and the impacts of new or changing technologies; and 
(7) analyzing environmental problems and trends and assisting 
in preparing an annual environmental quality report.
    The Committee finds that many of CEQ's activities duplicate 
those of EPA and other agencies, a luxury which can no longer 
be afforded. Moreover, the Committee believes most if not all 
of the activities detailed above could be carried out, if they 
are not already, by EPA or other agencies.
    The administration is urged to consider the value and 
utility of CEQ's annual environmental trends report, and 
determine whether the report should be continued.

                  Federal Emergency Management Agency

Appropriations, 1995 \1\................................    $828,907,000
Budget estimate, 1996...................................     806,119,000
House allowance.........................................     694,937,000
Committee recommendation................................     463,437,000

\1\ Does not include $6,550,000,000 in emergency funding. Includes 
supplemental of $7,000,000 in Public Law 104-19.
---------------------------------------------------------------------------

                          general description

    FEMA is responsible for coordinating Federal efforts to 
reduce the loss of life and property through a comprehensive 
risk-based, all hazards emergency management program of 
mitigation, preparedness, response, and recovery.

                        committee recommendation

    The Committee has provided a total of $463,437,000 for the 
Federal Emergency Management Agency. The amount provided is a 
reduction of $342,682,000 below the budget request.
    The Committee's recommendation for the Federal Emergency 
Management Agency provides funding to continue most programs 
and activities at current levels, to ensure a capable and 
efficient Federal emergency preparedness and response system. 
No funds are provided to the disaster relief fund because 
current balances, including the recent supplemental 
appropriation of $6,550,000,000, are approximately 
$8,000,000,000. This amount far surpasses average annual 
disaster relief fund requirements, and will enable the Agency 
to continue meeting disaster assistance needs arising from 
previous disasters. Owing to budgetary constraints, the 
Committee was forced to reduce funding for the emergency food 
and shelter program.

                            disaster relief

Appropriations, 1995....................................    $320,000,000
Emergency funding, 1995.................................   6,550,000,000
Budget estimate, 1996...................................     320,000,000
House allowance.........................................     235,500,000
Committee recommendation................................................

                          program description

    Federal disaster assistance is a nationwide program 
operated pursuant to the Stafford Act. FEMA is authorized to 
provide Federal assistance to supplement the efforts and 
resources of State and local governments in response to major 
disasters and emergencies. Funds may be made available directly 
to a State or to other Federal agencies as reimbursement of 
expenditures in disaster relief work performed under this 
authority. Funds and other assistance may also be made 
available to individuals, families, and businesses for disaster 
related needs and expenses. In addition, a variety of other 
Federal assistance is coordinated under this program.

                        committee recommendation

    The Committee has not provided any funds for disaster 
relief, nor has the Committee approved the administration's 
request for a disaster relief contingency fund, owing to the 
fact that there is currently a balance of approximately 
$8,000,000,000 in the disaster relief fund. This amount 
includes the recent appropriation of $6,550,000,000 in fiscal 
year 1995 supplemental appropriations and previous year 
appropriations.
    A recent audit conducted by FEMA's inspector general of the 
disaster relief fund revealed some disturbing information. The 
inspector general found that in fiscal year 1995, charges to 
the disaster relief funding totaling approximately $87,000,000 
were not for specific disasters and may not be appropriate 
charges to the fund. The problem stems in part from FEMA's lack 
of explicit guidelines defining activities which are 
appropriately charged to the fund. At a time when budgets are 
constrained throughout the rest of the Agency, there is a 
significant temptation to define more and more activities as 
appropriately funded by the ``Disaster relief'' account.
    The inspector general also found that disaster relief fund 
financial data are often unreliable; grants and loans 
management is inadequate; and FEMA's policies do not always 
appear to encourage the prudent use of disaster dollars. The 
Committee expects the Director to exercise discipline and 
financial controls in the use of disaster relief funds, and 
anticipates that the findings and recommendations of the 
inspector general will be adopted by the Agency. In particular, 
FEMA should act quickly in developing appropriate and explict 
guidelines for the use of disaster relief funds, and such 
guidelines should be reviewed by the inspector general. FEMA is 
to notify the Committee of the actions it is taking to respond 
to concerns raised by the inspector general, and its timeframe 
for implementing the recommendations, within 30 days of 
enactment of this act.
    A similar review is underway by the General Accounting 
Office. When complete, FEMA is to respond to the Committee 
within 30 days of receipt outlining its plans for implementing 
GAO's recommendations.
    The Committee also notes the recent inspector general 
report detailing options for reducing public assistance program 
costs. FEMA is to respond to the Committee within 30 days of 
enactment of this act on its plans and proposals for reducing 
disaster relief costs such as limiting eligibility for public 
assistance for certain categories of recipients or terminating 
certain programs which may not be effectively meeting the needs 
of disaster victims.

            disaster assistance direct loan program account

                      (limitation on direct loans)

                            STATE SHARE LOAN

------------------------------------------------------------------------
                                           Limitation on  Administrative
                                           direct loans      expenses   
------------------------------------------------------------------------
Appropriations, 1995....................    $175,000,000         $95,000
Budget estimate, 1996...................      25,000,000          95,000
House allowance.........................      25,000,000          95,000
Committee recommendation................      25,000,000          95,000
------------------------------------------------------------------------

                          PROGRAM DESCRIPTION

    Under the State Share Loan Program, FEMA may lend or 
advance to an eligible applicant or State the portion of 
assistance for which the applicant is responsible under cost-
sharing provisions of the Stafford Act. To be deemed eligible, 
the Governor must demonstrate, where damage is overwhelming and 
severe, that the State is unable to assume its financial 
responsibility to meet the cost share.

                        COMMITTEE RECOMMENDATION

    For the State Share Loan Program, the Committee has 
provided $25,000,000 in loan authority and $95,000 in 
administrative expenses. For the cost of subsidizing the 
appropriation, the bill includes $2,155,000.
    The Committee notes that the city of Miami requested 
additional disaster loan funds in 1994 due to the widespread 
damage inflicted by Hurricane Andrew and the revenue shortfalls 
which have resulted. FEMA should reconsider its denial of the 
city's request for additional loan funding in view of the 
city's continuing needs.

                         salaries and expenses

Appropriations, 1995 \1\................................    $165,523,000
Budget estimate, 1996 \2\...............................     172,331,000
House allowance.........................................     162,000,000
Committee recommendation................................     166,000,000

\1\ Includes supplemental of $3,523,000 in Public Law 104-19.
\2\ Reflects budget amendment of $2,922,000, proposed July 17, 1995.
---------------------------------------------------------------------------

                          program description

    The salaries and expenses appropriation comprises two 
activities:
    1. Program support.--This activity provides for staff and 
supporting resources to administer the Agency's various 
programs at the headquarters, field, and regional levels. The 
salaries and expenses for flood plain management under 
mitigation programs and flood insurance operations are provided 
by transfer from the national flood insurance fund.
    2. Executive direction.--This activity provides staff and 
supporting resources for the general management and 
administration of the Agency in legal affairs, congressional 
and public affairs, personnel, and financial management.

                        committee recommendation

    The Committee has provided $166,000,000 for FEMA salaries 
and expenses. This represents an increase of $4,000,000 above 
the House, $477,000 above the current budget, and a decrease of 
$6,331,000 below the budget request.
    The Committee notes a budget amendment of $2,922,000 was 
submitted on July 17, 1995, for security personnel and 
activities related to responding to terrorist attacks. The 
Committee supports these activities and urges FEMA to reprogram 
funds for them in its operating plan.
    The Committee believes budgetary savings could be made 
through reductions to the regional offices. The Committee 
understands that as part of the ``National Performance 
Review,'' FEMA is evaluating the purpose, roles, authorities, 
risk areas, customer needs, and mission of field offices and 
regions. FEMA should accelerate this review in view of future 
anticipated budgetary reductions, and closely examine whether 
cost savings and efficiencies could be achieved, without 
compromising effectiveness of disaster response and recovery, 
through the closure or downsizing of regional offices. In a 
February 1993 report to this Committee, the National Academy of 
Public Administration found: ``* * * the four-region 
organization used by the Continental U.S. Army more closely 
approximates the incidence of disasters and may represent a 
better way to restructure FEMA with minimum disruption.''
    The Committee has provided the full amount requested 
($1,000,000) for the financial management system enhancements.
    The Committee has not provided bill language requested by 
the administration providing an advance appropriation for 
fiscal year 1997.

                    office of the inspector general

Appropriations, 1995....................................      $4,400,000
Budget estimate, 1996...................................       4,673,000
House allowance.........................................       4,400,000

Committee recommendation

                                                               4,400,000

                          program description

    The Office of the Inspector General [OIG] conducts, 
supervises, and coordinates all audits, inspections, and 
investigations. The OIG supervises and coordinates other 
activities in the Agency and between the Agency and other 
Federal, State, and local government agencies whose purposes 
are to: (a) promote economy and efficiency; (b) prevent and 
detect fraud and mismanagement; and (c) identify and prosecute 
people involved in fraud or mismanagement.

                        committee recommendation

    The Committee recommends $4,400,000 for the Office of the 
Inspector General, the same amount as provided by the House and 
the same as the current budget.

              emergency management planning and assistance

Appropriations, 1995 \1\................................    $219,437,000
Budget estimate, 1996 \2\...............................     210,122,000
House allowance.........................................     203,044,000
Committee recommendation................................     203,044,000

\1\ Includes supplemental of $3,477,000 in Public Law 104-19.
\2\ Reflects budget amendment of $7,078,000, proposed July 17, 1995.
---------------------------------------------------------------------------

                          program description

    The emergency management planning and assistance 
appropriation provides resources for the following activities 
which were described previously: Response and recovery; 
preparedness, training, and exercises; fire prevention and 
training; operations support; mitigation programs; and 
executive direction. Flood plain management activity and flood 
insurance operations are funded by transfer from the national 
flood insurance fund in fiscal year 1994.

                        committee recommendation

    The Committee concurs with the House in providing 
$203,044,000 for FEMA emergency management planning and 
assistance. This is $7,078,000 below the amount requested.
    The Committee notes the administration submitted on July 
17, 1995, a budget amendment of $7,078,000 for emergency 
management planning and assistance to enable FEMA to develop 
plans and procedures for an efficient Federal response to 
terrorism, and to increase the preparedness capability of State 
and local responders. The Committee supports these activities, 
and suggests that FEMA reprogram funds from within the amount 
provided, subject to normal reprogramming procedures, for 
critical terrorism response-related activities. In general, 
however, terrorism response-related activities should be part 
of the Agency's all-hazards approach to disasters and should 
not require separate funding.
    The Committee notes that as part of the ``National 
Performance Review,'' FEMA has proposed several initiatives 
which, if implemented, would result in $2,400,000 in savings to 
this account in fiscal year 1996 and 5 year savings of 
$13,400,000. These initiatives include consolidating the mobile 
emergency response system [MERS] unit, which would save 
$1,500,000. The Committee supports these cost-savings 
initiatives and suggest they be implemented to help offset the 
general reduction to this account.
    The Committee supports the Agency's plans for performance 
partnerships agreements with the States, which would integrate 
FEMA's categorical grant programs into block grants, and make 
funding available based on the State's risk of hazards and the 
State's performance. The Committee wishes to be kept apprised 
of the Agency's efforts to develop these agreements and the 
specific performance measures.
    The Committee understands FEMA is currently evaluating the 
capabilities of federally sponsored civilian urban search and 
rescue task forces to determine their readiness for response to 
earthquakes and other disasters, and may decide to award new 
task forces.
    The Committee directs FEMA to include in the study an 
analysis of the current status of personnel, equipment, and 
training; to compare and contrast current status with task 
force status when designated for Federal sponsorship; and to 
measure progress of personnel, resource and training toward 
Agency-recommended levels. The study also should include an 
analysis of the geographic distribution of task force locations 
and a history of activation to date. The study shall be 
provided to the Committee by January 1, 1996.
    The Committee urges FEMA to give strong consideration to 
adding USAR task forces in Columbia, MO, and Portland, OR, as 
vacancies occur.
    To support the National Earthquake Hazards Reduction 
Program, FEMA's budget includes $16,180,000. The Committee 
supports the full request for this program.
    FEMA is directed to provide funds from within this program 
to continue at current levels the earthquake hazard mitigation 
program with the city of Portland and the Oregon Department of 
Geology and Mineral Industries, to develop earthquake hazard 
maps and information to assist local emergency planners, land 
use planners, public officials, utilities, and businesses in 
reducing potential loss of life and property in the event of a 
major earthquake.
    The Committee encourages FEMA to work with the Department 
of the Army to further the Federal emergency management 
information system developed by the Army and FEMA for the 
Chemical Stockpile Emergency Preparedness Program [CSEPP/
FEMIS].
    The Committee urges FEMA to support the Pittsford, VT, Fire 
Academy to enable it to expand training to rail and toxic 
material accidents. FEMA should also consider funding a 
regional dispatch for Chittenden County, VT.
    FEMA is urged to reimburse Cameron Parish, LA, for eligible 
costs incurred as a result of their request for a revision of 
flood insurance rate maps.
    The Committee has not provided bill language requested by 
the administration providing an advance appropriation for 
fiscal year 1997.

                       emergency food and shelter

Appropriations, 1995....................................    $130,000,000
Budget estimate, 1996...................................     130,000,000
House allowance.........................................     100,000,000

Committee recommendation

                                                             100,000,000

                          program description

    The Emergency Food and Shelter Program originated as a one-
time emergency appropriation to combat the effects of high 
unemployment in the emergency jobs bill (Public Law 98-8) which 
was enacted in March 1983. It was authorized under title III of 
the Stewart B. McKinney Homeless Assistance Act of 1987, Public 
Law 100-177.
    The program has been administered by a national board and 
the majority of the funding has been spent for providing 
temporary food and shelter for the homeless, participating 
organizations being restricted by legislation from spending 
more than 2 percent of the funding received for administrative 
costs. The administrative ceiling was increased to 5 percent 
under the McKinney Act. However, subsequent appropriation acts 
limited administrative expenses to 3.5 percent.

                        committee recommendation

    The Committee recommends $100,000,000 for the Emergency 
Food and Shelter Program, the same level proposed by the House. 
This is $30,000,000 less than the budget request and the fiscal 
year 1995 level.

                     national flood insurance fund

                          (transfers of funds)

                          program description

    The National Flood Insurance Act of 1968, as amended, 
authorizes the Federal Government to provide flood insurance on 
a national basis. Flood insurance may be sold or continued in 
force only in communities which enact and enforce appropriate 
flood plain management measures. Communities must participate 
in the program within 1 year of the time they are identified as 
flood-prone in order to be eligible for flood insurance and 
some forms of Federal financial assistance for acquisition or 
construction purposes. In 1994, the budget assumes collection 
of all the administrative and program costs associated with 
flood insurance activities from policyholders.
    Under the Emergency Program, structures in identified 
flood-prone areas are eligible for limited amounts of coverage 
at subsidized insurance rates. Under the regular program, 
studies must be made of different flood risks in flood prone 
areas to establish actuarial premium rates. These rates are 
charged for insurance on new construction. Coverage is 
available on virtually all types of buildings and their 
contents.

                        committee recommendation

    The Committee has provided bill language enabling the 
Agency to transfer $20,562,000 for administrative costs from 
the Flood Insurance Program to the salaries and expenses 
appropriation. The Committee has also included bill language 
enabling the transfer of $70,464,000 to the emergency 
management planning and assistance appropriation for flood 
mitigation activities including up to $12,000,000 for expenses 
under section 1366 of the National Flood Insurance Act.
    The Committee has not included House bill language related 
to flood insurance rate maps for the city of Stockton, CA.
    The Committee has not included bill language requested by 
the administration with respect to flood insurance rate 
premiums.
    The Committee believes FEMA should not suspend, revoke, or 
in any way limit the participation of St. Charles County, MO, 
in the National Flood Insurance Program solely due to that 
county, or communities in that county, permitting levee 
improvements to a public-sponsored levee district as permitted 
by the U.S. Army Corps of Engineers.

                       administrative provisions

    The Committee has included an administrative provision, as 
in the past, authorizing FEMA to collect fees in support of the 
Radiological Emergency Preparedness Program, which are treated 
as offsetting collections to the appropriation for this 
activity.
    The Committee has not approved FEMA's proposal to establish 
a working capital fund in fiscal year 1996. FEMA is to pilot 
such a program in fiscal year 1996, and report to the Committee 
on its progress.

                    General Services Administration

                      consumer information center

Appropriations, 1995....................................      $2,004,000
Budget estimate, 1996...................................       2,061,000
House allowance.........................................       2,061,000

Committee recommendation

                                                               2,061,000

                          program description

    The Consumer Information Center [CIC] was established 
within the General Services Administration [GSA] by Executive 
order on October 26, 1970, to help Federal departments and 
agencies promote and distribute consumer information collected 
as a byproduct of the Government's program activities.
    The CIC promotes greater public awareness of existing 
Federal publications through wide dissemination to the general 
public of the Consumer Information Catalog. The catalog lists 
both sales and free publications available from the Government 
Printing Office [GPO] distribution facility in Pueblo, CO. In 
fiscal year 1993, the CIC distributed a total of 11.7 million 
publications. Distribution costs of the free publications are 
financed by reimbursements from the Federal agencies to the 
Consumer Information Center.
    Public Law 98-63, enacted July 30, 1983, established a 
revolving fund for the CIC. Under this fund, CIC activities are 
financed from the following: annual appropriations from the 
general funds of the Treasury, reimbursements from agencies for 
distribution of publications, user fees collected from the 
public, and any other income incident to CIC activities. All 
are available as authorized in appropriation acts without 
regard to fiscal year limitations.

                        committee recommendation

    The Committee has provided $2,061,000 for the Consumer 
Information Center, as requested by the administration and 
provided by the House an administrative expense limitation of 
$2,602,000.
    The Committee notes that it has transferred to the Consumer 
Information Center certain functions currently performed by the 
Office of Consumer Affairs, which is to be terminated. These 
functions include production of the Consumer Resource Handbook 
and organizing the Consumer Resource Exposition. The Committee 
believes CIC will be able to undertake these activities within 
the amount appropriated.
    The Committee has provided CIC with an increase of $100,000 
in its administrative expense limitation over the budget 
request to enable CIC to cover the costs of updating the 
Consumer Resource Handbook.
    More than one-half of the appropriated amount that the 
Committee has provided to CIC is for personnel compensation and 
benefits. Maintenance of a high-quality staff is critical to 
the continued success of the Center. Therefore, CIC is 
encouraged to utilize all sources to recruit and fill positions 
funded by this Committee.

                Department of Health and Human Services

                    u.s. office of consumer affairs

Appropriations, 1995....................................      $2,166,000
Budget estimate, 1996...................................       1,811,000
House allowance.........................................       1,811,000

Committee recommendation

                                             ...........................

                          program description

    In accordance with Executive Order 11583 of February 24, 
1971, the U.S. Office of Consumer Affairs assures that consumer 
needs and viewpoints are presented in the Federal Government; 
fosters consideration of consumer viewpoints by other 
Government agencies, voluntary groups, and business; and seeks 
to inform and educate individual citizens to deal more 
effectively in the marketplace.
    The Office also provides administrative support to the 
Consumer Affairs Council. The functions of the Council are to 
provide leadership and coordination to insure that agency 
consumer programs are implemented effectively, promote 
efficiency and interagency cooperation, and to eliminate 
duplication and inconsistency among agency consumer programs.

                        committee recommendation

    The Committee has eliminated funding for the Office of 
Consumer Affairs, owing to budgetary constraints. The Committee 
has transferred OCA's functions of producing the Consumer 
Resource Handbook and organizing the Constituent Resource 
Exposition to the Consumer Information Center.
    The Committee notes that OCA has not been a priority within 
the administration. Its proposed fiscal year 1996 budget 
represents a reduction of 27 percent in staff, and the 
administration has yet to appoint a new director almost 1 year 
after the former Director's departure.
    As part of the Department of Health and Human Services, OCA 
career staff may be transferred to other positions within HHS. 
The Committee recommends inclusion of bill language to 
facilitate this transfer of personnel and responsibilities 
associated with closure of this Office.

             National Aeronautics and Space Administration

Appropriations, 1995

                                                         $14,376,684,000

Budget estimate, 1996

                                                          14,260,000,000

House allowance

                                                          13,671,800,000

Committee recommendation

                                                          13,798,500,000

                          GENERAL DESCRIPTION

    The National Aeronautics and Space Administration was 
established by the National Aeronautics and Space Act of 1958 
to conduct space and aeronautical research, development, and 
flight activities for peaceful purposes designed to maintain 
U.S. preeminence in aeronautics and space. These activities are 
designed to continue the Nation's premier program of space 
exploration and to invest in the development of new 
technologies to improve the competitive position of the United 
States. The NASA program provides for a vigorous national 
program ensuring leadership in world aviation and as the 
preeminent spacefaring nation.
    The fiscal year 1996 budget for NASA reflects the budget 
accounting restructuring that was adopted in fiscal year 1995. 
The three restructured accounts are: Human space flight; 
science, aeronautics, and technology; and mission support.

                        COMMITTEE RECOMMENDATION

    The Committee recommends $13,798,500,000 for the National 
Aeronautics and Space Administration for fiscal year 1996. This 
amount is $461,500,000 below the budget request and 
$126,700,000 above the House allowance. When adjusting the 1995 
enacted level for the $92,000,000 rescission and the 
$365,000,000 deferral contained in Public Laws 104-19 and 104-
6, respectively, the recommended budget for NASA for fiscal 
year 1996 is $121,184,000 or 1 percent below the adjusted 1995 
level.

                            NASA DOWNSIZING

    NASA has recently completed a comprehensive zero-base 
review which aims to achieve $4,000,000,000 in savings over 4 
years in order to comply with the administration's fiscal year 
1997-2000 out-year budget plans. NASA has focused the 
downsizing on operations and infrastructure while seeking to 
maintain its essential ground research and flight programs. The 
Committee is pleased that NASA is taking these steps to 
downsize and increase the efficiency of its operations. The 
Committee emphasizes, however, that the very survival of NASA's 
major programs may depend upon the successful implementation of 
this effort.
    The recommended fiscal year 1996 budget builds on the 
recommendations of the zero-base review, namely, it identifies 
savings in operational and institutional activities while 
avoiding reductions to major programs. The recommended agency 
budget fully funds the request for aeronautics, space science, 
space station development, and the Mission to Planet Earth 
Flight Program. Over 70 percent of the recommended savings are 
from operational and institutional activities with the 
remainder taken from lower priority activities.
    The Committee shares the House concern that the difficult 
budget outlook for fiscal year 1997 and beyond could require 
that NASA examine major changes to NASA programs and the 
further restructuring of its field center activities. However, 
recognizing the 30 percent reduction in its multiyear plan NASA 
has already absorbed over the past 3 years, the Committee 
believes that NASA's successful achievement of the 
$4,000,000,000 in savings identified through the zero-base 
review requires a period of stability for institutional self 
assessment and program revision. Consequently, the Committee 
does not concur with the House direction that NASA undertake 
yet another study of additional restructuring or closing of 
field centers at this time and recommends deletion of the bill 
language proposed by the House. The Committee instead directs 
NASA to submit to the House and Senate Committees on 
Appropriations by May 15, 1996, a report on the agency's 
progress in implementing the recommendations of the zero-base 
review for use by the Committee in consideration of the fiscal 
year 1997 budget request.

                           HUMAN SPACE FLIGHT

Appropriations, 1995....................................  $5,514,897,000
Budget estimate, 1996...................................   5,509,600,000
House allowance.........................................   5,449,600,000

Committee recommendation

                                                           5,337,600,000

                          PROGRAM DESCRIPTION

    The objective of the human space flight appropriation is to 
provide the on-orbit infrastructure and transportation 
capability to enable people to live and work in the space 
environment. The appropriations request would provide funding 
for the continued development of the space station and 
activities which support utilization of the space station, the 
flight activities in support of the joint missions involving 
the space shuttle and the Russian Mir space station, all the 
activities required for the continuing safe operation of the 
space shuttle, and funding for the support of payloads flying 
on the shuttle and spacelab as well as advanced technology 
projects and engineering technical base support for the field 
centers supporting human space flight activities.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $5,337,600,000 
for human space flight activities. This amount is $172,000,000 
below the budget request, and $112,000,000 below the House 
allowance.
    The Committee recommends the following changes to the 
budget request:
  -$53,000,000 from the closure of the Yellow Creek facility at 
        Iuka, MS. The Committee concurs with bill language 
        included by the House that allows for the transfer of 
        the Yellow Creek facility to the State of Mississippi.
  -$97,000,000 from space shuttle activities to be taken as a 
        general reduction subject to normal reprogramming 
        guidelines. The Committee urges implementation of 
        program reforms that maximize budget savings while 
        continuing to place safety first. These reforms as 
        recommended by the independent review led by 
        Christopher Kraft include freezing the shuttle 
        configuration, reducing personnel support, scrubbing 
        requirements, streamlining payload integration, and 
        instituting a prime contractor management structure. 
        The zero-base review projects up to $1,300,000,000 in 
        savings from these reforms over 4 years. The Committee 
        urges the expeditious implementation of a comprehensive 
        space shuttle contract approach which maintains system 
        safety, achieves program requirements at lower cost, 
        and supports a robust and competitive supplier base. 
        NASA should consider modifications in flight activity 
        scheduling if the budgetary reductions recommended by 
        the Committee cannot be achieved through greater 
        efficiencies alone.
  -$17,000,000 from the engineering and technical base, to be 
        taken as a general reduction subject to normal 
        reprogramming guidelines.
  -$5,000,000 from advanced projects.

                             SPACE STATION

    The Committee has provided the full amount requested, 
$1,833,600,000, in the ``Human space flight'' account for space 
station development, operations, and utilization support. The 
Committee strongly endorses a robust and vigorous human space 
flight program with space station as the most critical element. 
The space station promises to be a world-class orbital 
laboratory that will enable exciting new research that can only 
be conducted in space. Benefits in medical research, materials 
and life sciences, technology, engineering, and robotics will 
improve life here on Earth. With the first launch in only 26 
months, the space station will ensure a new era of peaceful 
international cooperation and U.S. preeminence in space.
    The Committee has transferred bill language that delays 
$390,000,000 from obligation from space station until August 1, 
1996. Delay of obligations has been enacted in previous acts as 
an effective means for exerting budgetary discipline and 
oversight. With assurances that the delay will have no adverse 
program consequences, the Committee recommends this language be 
included for fiscal year 1996 as a new administrative 
provision. The Committee expects the program to remain on 
schedule for initiation of on-orbit assembly in November 1997, 
and to remain within the program budget cap of $17,400,000,000 
for assembly complete by June 2002.
    The Committee fully supports deployment of the space 
station but recognizes that 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 
Committee 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

Appropriations, 1995....................................  $5,891,200,000
Budget estimate, 1996...................................   6,006,900,000
House allowance.........................................   5,588,000,000
Committee recommendation................................   5,960,700,000

                          PROGRAM DESCRIPTION

    The objectives of the NASA program of research and 
development are to extend knowledge of the Earth, its space 
environment, and the universe; to expand the practical 
applications of space technology; to provide technology for 
improving the performance of aeronautical vehicles while 
minimizing their environmental effects and energy consumption; 
and to assure continued development of the aeronautics and 
space technology and education of future generations necessary 
to accomplish national goals.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $5,960,700,000 
for science, aeronautics, and technology activities. This 
amount is $46,200,000 below the budget request, and 
$372,700,000 above the House allowance.

                             SPACE SCIENCE

    The Committee recommends $2,054,400,000 for fiscal year 
1996, an increase of $95,500,000 to the budget request. The 
Committee recommends the following changes to the budget 
request:
  -$5,000,000 from the space infrared telescope facility 
        [SIRTF]. The remaining $10,000,000 in funding should be 
        sufficient for NASA to conduct phase A/B definition 
        studies. The Committee is concerned about the large 
        total program cost given anticipated future budget 
        constraints. A decision by the Committee whether to 
        approve phase C/D development will be considered based 
        on future NASA requests and funding availability.
  +$51,500,000 for gravity probe-B [GP-B]. In October 1994, 
        NASA requested that the National Academy of Sciences 
        validate the technical feasibility and scientific merit 
        of GP-B relative to other science priorities within the 
        NASA budget. NASA has spent $220,000,000 on the program 
        thus far with another $340,000,000 needed for 
        completion. The academy found, the GP-B project well 
        worth its remaining cost to completion. Consequently, 
        the Committee recommends the program proceed as 
        planned.
  +$46,000,000 for initiation of the Solar-Terrestrial Probes 
        [STP] Program. Consistent with the NASA Office of Space 
        Science strategic plan and Senate Report 103-311, the 
        Committee again directs that NASA proceed with the STP 
        Program of which TIMED is the first mission. The 
        Committee recommends $41,000,000 to initiate this 
        mission which is capped at $100,000,000 (in fiscal year 
        1994 dollars) for spacecraft development. The Committee 
        also recommends $5,000,000 for design studies toward 
        full development of the inner magnetospheric imager, 
        the second in the STP series of missions recommended by 
        the science community.
  +$3,000,000 for university explorer [UNEX], a university-led 
        program to develop small inexpensive spacecraft for 
        astronomy and space physics missions.

                       NEW MILLENNIUM INITIATIVE

    The Committee commends NASA for the new millennium 
initiative that could revolutionize the way the agency designs, 
builds, launches, and operates small spacecraft. The initiative 
includes 495,000,000 dollars' worth of programs such as 
discovery, Mars surveyor, explorer, small spacecraft technology 
initiative, new millennium spacecraft, et cetera, and is 
managed by various NASA offices. The Committee is concerned, 
however, that the various programs be properly coordinated and 
that the management method reflect a focus of reducing life-
cycle costs. As a result, NASA is directed to undertake 
development of a comprehensive program plan that at a minimum 
describes how programs are selected, managed, and coordinated 
within NASA and with industry and other Government agencies; 
what are the priorities, procurement processes, and budget 
plans; and what performance measures will be used to insure 
that the programs are succeeding and the technologies are being 
effectively transferred into commercial and other Government 
programs.
    The plan should also identify technical and programmatic 
strategies that promise the highest payoff in reducing life-
cycle costs including development, launch, operations, and data 
analysis. The Committee urges NASA to utilize the Critical 
Technologies Institute to conduct a comparative analysis of 
programs at NASA, the Department of Defense, other Government 
agencies, and the commercial sector that are pursuing methods 
that reduce life-cycle costs.

                     LIFE AND MICROGRAVITY SCIENCES

    The Committee recommends $467,000,000 for fiscal year 1996, 
a decrease of $37,000,000 to the budget request. The Committee 
recommends the reduction be made to space station payload 
facilities. NASA should seek to replace development of one or 
two of these facilities through in-kind contributions from the 
space station international partners. NASA should continue the 
development of the space station furnace facility given its 
level of development maturity.
    The Committee directs NASA to conduct an investigation in 
cooperation with the National Center for Sleep Disorders 
Research of the National Institutes of Health [NIH] into the 
effect of sleep disorders, circadian rhythm disruptions, and 
physiological fatigue on human health and performance in the 
operation of vehicles. NASA and NIH should also review studies 
ongoing and completed by the Federal Highway Administration on 
driver fatigue to assess the study methodology and conclusions, 
and compare these results with the other NASA and NIH research. 
NASA and NIH should jointly report back to the Committee by 
September 30, 1996.

                        MISSION TO PLANET EARTH

    The Committee recommends $1,280,100,000 for fiscal year 
1996, a decrease of $61,000,000 to the budget request. The 
National Academy of Sciences recently reviewed the Earth 
observing system [EOS] Program and reaffirmed the program goal 
and overall approach of providing scientific understanding of 
Earth as an integrated system. The National Academy, however, 
suggested significant potential reforms to the EOS data 
information system [EOSDIS].
    As a result, the Committee recommends a $60,000,000 
reduction to EOSDIS which would freeze it at the fiscal year 
1995 budget level. It is the Committee's understanding that 
this reduction will not have a significant adverse effect on 
the objectives of the EOS Program. As NASA reexamines the 
EOSDIS, the Committee expects that the distributed active 
archive centers at Goddard Space Flight Center and the Earth 
Resources Observation System Data Center will remain core 
elements of a revamped EOSDIS. NASA should submit a report to 
the Committee with its fiscal year 1997 budget request, on its 
plans to implement the National Academy recommendations.
    The Committee also strongly urges that NASA seek greater 
commercial, international, and Government participation in the 
program with the goal of reducing program costs. Examples 
include closer cooperation with the Department of Defense and 
the National Oceanic and Atmospheric Administration, data buys 
from the commercial sector, and in-kind contributions from 
space station international partners for flight of opportunity 
missions. The Committee encourages NASA to seek additional out-
year budget savings through the introduction of smaller 
spacecraft and advanced ground and space technologies. 
Accordingly, the Committee views the planned Earth System 
Science Pathfinder Program as an important component of such a 
strategy and urges NASA to demonstrate missions that could 
dramatically lower costs. To initiate the program in fiscal 
year 1996, the Committee recommends $5,000,000 toward full 
development of a windsat mission.
    The Committee concurs with the House recommendation 
deleting the $6,000,000 request from the consortium for 
international Earth science information network. The Committee 
urges NASA to integrate CIESIN activities within its EOS plan 
for fiscal year 1996.

                  AERONAUTICAL RESEARCH AND TECHNOLOGY

    The Committee recommends the budget request of $917,300,000 
for fiscal year 1996. Aeronautics is a vital factor in the 
economic well being of the United States and in assuring a 
strong national defense. This sector is associated with more 
than 8.5 million American jobs and provides $25,000,000,000 in 
exports annually, exceeding that of any other manufacturing 
sector. The current position that the United States enjoys as a 
world leader is a direct consequence of past investments made 
by NASA, the Department of Defense, and the U.S. commercial 
aeronautics industry. Continued Federal investments will be 
required to sustain U.S. leadership given increasing 
competition in the international marketplace. The Committee 
strongly believes that aeronautics research is one of NASA's 
highest priority activities. Hence, the Committee fully funds 
the budget request including the critical programs in high 
speed research and advanced subsonic technology and two 
important initiatives in affordable design and manufacturing 
and advanced air traffic technology.

                      SPACE ACCESS AND TECHNOLOGY

    The Committee recommends $678,400,000 for fiscal year 1996, 
a decrease of $27,200,000 to the budget request. The Committee 
recommends the following changes to the budget request:
  -$7,000,000 from partnership for next generation vehicle.
  -$7,200,000 from advanced space transportation to be taken as 
        a general reduction subject to normal reprogramming 
        guidelines. None of the reduction should be taken from 
        the Reusable Launch Vehicle Program.
  -$20,000,000 from flight programs to be taken as a general 
        reduction subject to normal reprogramming guidelines. 
        None of the reduction should be taken from the 
        Commercial Mid-deck Augmentation Module Program and IN-
        STEP projects in phase C/D development.
  -$13,000,000 from commercial technology programs to be taken 
        as a general reduction subject to normal reprogramming 
        guidelines. The recommended budget will maintain the 
        program at the fiscal year 1994 funding level. The 
        Committee notes the successful progress being achieved 
        by the National Technology Transfer Center and Adanet. 
        The Committee recommends a review be undertaken by the 
        National Academy of Public Administration to determine 
        the overall effectiveness of NASA's technology transfer 
        program and recommendations to improve it. The review 
        should also examine the effectiveness of NASA's Small 
        Business Innovative Research Program. A final report 
        should be submitted to the Committee in April 1996.
    The Committee strongly supports the Medlite procurement by 
NASA which reflects a commercial approach to the procurement of 
launch services which hold significant promise in reducing 
Government cost and stimulating private investment in 
economically viable space-based enterprises.

                        REUSABLE LAUNCH VEHICLE

    The Committee strongly supports the goal of the Reusable 
Launch Vehicle [RLV] Program to develop new technologies in 
partnership with industry that are targeted to dramatically 
reduce development and operational launch costs. The Committee 
recommends an additional $20,000,000 for the X-33 Program. The 
additional funding proposed will help ensure meeting the 
schedule for the first flight by providing for requirements 
such as long lead items.

                           ACADEMIC PROGRAMS

    The Committee recommends $102,200,000 for fiscal year 1996, 
a decrease of $16,500,000 to the budget request and no change 
from the fiscal year 1995 appropriation level. The education 
programs in the aggregate should be at a minimum at the fiscal 
year 1995 level. The Committee urges NASA to consider funding 
the Discovery Center project in Sioux Falls, SD, pending 
authorization. This proposed center is aimed at significantly 
enhancing science, educational, and outreach services for an 
undeserved region of the country. From within the available 
funds, $1,000,000 shall be made available to support a Rural 
Teacher Resource Center and an additional $1,000,000 to support 
the Experimental Program to Stimulate Competitive Research 
[EPSCoR]. Given projected fiscal constraints, the Committee 
believes that future annual funding for agencywide education 
programs should not exceed its proportion of the overall NASA 
appropriated budget for fiscal year 1996.

                    NATIONAL AERONAUTICAL FACILITIES

Appropriations, 1995....................................    $400,000,000
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                             ...........................

                          PROGRAM DESCRIPTION

    The objective of the national aeronautical facilities 
appropriation is to support a decision whether to construct a 
national wind tunnel complex [NWTC] that consists of two new 
wind tunnels for testing future commercial jet transports and 
military aircraft. These tunnels, one subsonic and one 
transonic, would provide a combination of flight condition 
simulation and testing efficiency unmatched in the world. These 
tunnels should be available by the turn of the century to 
provide the United States with the competitive edge needed for 
future generations of wide-body commercial transport 
competition.

                        COMMITTEE RECOMMENDATION

    The Committee has provided no additional funds for the NWTC 
in anticipation of a proposal from the administration for its 
construction, and a request for fiscal year 1997.
    The Committee continues to support strongly the NWTC as a 
strategic investment and a critical element of an integrated 
national aeronautics research and test plan. Although NASA and 
the industry team have made substantial progress, it is 
apparent that active Department of Defense financial 
participation is required if the NWTC is to be developed. 
Toward that end, the Committee urges NASA, the industry 
partners, and the administration to enlist DOD financial 
support in the development and utilization of the NWTC and to 
submit a proposal with this included for consideration by the 
Congress as part of the fiscal year 1997 budget request.
    The Committee is well aware of the fiscal constraints that 
face both NASA and DOD. However, the Committee believes that a 
phased NASA/DOD/industry financing plan could address some of 
these concerns. The Committee also believes that development of 
the NWTC would permit greater economy and efficiency in 
aeronautical research and test activities which should produce 
budget savings in the out-years.
    The Committee urges the expeditious completion of the 
administration program plan and financing proposal for a NWTC, 
to permit timely release of available fiscal year 1995 NASA 
NWTC funds and the initiation of siting activities.

                            MISSION SUPPORT

Appropriations, 1995....................................  $2,554,587,000
Budget estimate, 1996...................................   2,726,200,000
House allowance.........................................   2,618,200,000

Committee recommendation

                                                           2,484,200,000

                          PROGRAM DESCRIPTION

    This appropriation provides for mission support including 
safety, reliability, and mission assurance activities 
supporting agency programs; space communication services for 
NASA programs; salaries and related expenses in support of 
research in NASA field installations; design, repair, 
rehabilitation and modification of institutional facilities, 
and construction of new institutional facilities; and other 
operations activities supporting conduct of agency programs.

                        COMMITTEE RECOMMENDATION

    The Committee recommends $2,484,200,000 for mission 
support. This amount is $242,000,000 below the budget request, 
and $134,000,000 below the House allowance. The Committee 
recommends the following changes to the budget request:
  -$108,000,000 in salaries and related expenses resulting from 
        the voluntary retirements during the current year which 
        had not been anticipated when the fiscal year 1996 
        budget was submitted.
  -$47,000,000 from research and operations support, subject to 
        reprogramming guidelines.
  -$56,000,000 from space communications, to be applied at the 
        agency's discretion subject to reprogramming 
        guidelines. The NASA zero-base review estimates savings 
        up to $600,000,000 over 4 years from services similar 
        to the tracking and data relay satellite [TDRS] system. 
        The Committee requests a review be undertaken by NASA 
        that compares the technical, schedule, and budget of 
        the current plan for a firm buy of three TDRS 
        replenishment spacecraft against an alternative 
        strategy. The alternative would include a firm buy of 
        only one replenishment spacecraft to meet near-term 
        needs and defer a decision on long-term needs whether 
        to buy additional replenishment spacecrafts or utilize 
        advanced technologies and planned commercial systems. 
        The study should be submitted to the Committee by 
        December 1, 1995.
  -$31,000,000 from construction of facilities, to be taken as 
        a general reduction subject to normal reprogramming 
        guidelines. The recommended funding level is the same 
        as the fiscal year 1995 appropriation level.

                      OFFICE OF INSPECTOR GENERAL

Appropriations, 1995....................................     $16,000,000
Budget estimate, 1996...................................      17,300,000
House allowance.........................................      16,000,000

Committee recommendation

                                                              16,000,000

                          PROGRAM DESCRIPTION

    The Office of Inspector General was established by the 
Inspector General Act of 1978. The Office is responsible for 
providing agencywide audit and investigative functions to 
identify and correct management and administrative deficiencies 
which create conditions for existing or potential instances of 
fraud, waste, and mismanagement.

                        COMMITTEE RECOMMENDATION

    The Committee recommends $16,000,000 for fiscal year 1996, 
a decrease of $1,300,000 to the budget request and no change 
from the fiscal year 1995 appropriation level.

                       ADMINISTRATIVE PROVISIONS

                     (including transfer of funds)

    The Committee recommendation includes a series of 
provisions, proposed by the administration and included by the 
House, which are largely technical in nature, concerning the 
availability of funds, and the restructured appropriation 
account structure proposed for NASA in fiscal year 1995. These 
provisions have been carried in prior-year appropriation acts.
    As noted earlier in this report, the Committee recommends 
bill language, included in the House-passed bill, to ensure 
clear conveyance of title to the property known as the Yellow 
Creek facility to the State of Mississippi.
    The Committee recommends deletion of House bill language 
regarding use of appropriated funds for the lease or 
construction of a new contractor-funded facility. Nonetheless, 
the Committee expects NASA will continue to adhere to the 
policy intent of avoiding excessive future-year funding 
commitments.
    The Committee recommends a new administrative provision 
delaying the availability of $390,000,000 for development of 
the international space station. This provision is discussed 
earlier in this report.

                  National Credit Union Administration

                       central liquidity facility

------------------------------------------------------------------------
                                       Direct loan       Administrative 
                                        limitation          expenses    
------------------------------------------------------------------------
Appropriations, 1995..............     ($600,000,000)         ($901,000)
Budget estimate, 1996.............      (600,000,000)          (560,000)
House allowance...................      (600,000,000)          (560,000)
Committee recommendation..........      (600,000,000)          (560,000)
------------------------------------------------------------------------

                          program description

    The National Credit Union Administration [NCUA] Central 
Liquidity Facility [CLF] was created by the National Credit 
Union Central Liquidity Facility Act (Public Law 95-630) as a 
mixed-ownership Government corporation within the National 
Credit Union Administration. It is managed by the National 
Credit Union Administration Board and is owned by its member 
credit unions.
    The purpose of the facility is to improve the general 
financial stability of credit unions by meeting their seasonal 
and emergency liquidity needs and thereby encourage savings, 
support consumer and mortgage lending, and provide basic 
financial resources to all segments of the economy. To become 
eligible for facility services, credit unions invest in the 
capital stock of the facility, and the facility uses the 
proceeds of such investments and the proceeds of borrowed funds 
to meet the liquidity needs of credit unions. The primary 
sources of funds for the facility are the stock subscriptions 
from credit unions and borrowings.
    The facility may borrow funds from any source, with the 
amount of borrowing limited by Public Law 95-630 to 12 times 
the amount of subscribed capital stock and surplus.
    Loans are available to meet short-term requirements for 
funds attributable to emergency outflows from managerial 
difficulties or local economic downturns. Seasonal credit is 
also provided to accommodate fluctuations caused by cyclical 
changes in such areas as agriculture, education, and retail 
business. Loans can also be made to offset protracted credit 
problems caused by factors such as regional economic decline.

                        committee recommendation

    The Committee concurs with the House in recommending the 
administration's proposed limitation of $600,000,000 in loans 
from the central liquidity facility for fiscal year 1996. In 
addition, the Committee recommends the budget request of 
limiting administrative expenses for the CLF to $560,000 in 
fiscal year 1996, the same as proposed in the House.

                      National Science Foundation

Appropriations, 1995..................................\1\ $3,228,653,000
Budget estimate, 1996...................................   3,360,000,000
House allowance.........................................   3,160,000,000
Committee recommendation................................   3,200,000,000

\1\ Reflects rescission of $131,867,000 in Public Law 104-19.
---------------------------------------------------------------------------

                          GENERAL DESCRIPTION

    The National Science Foundation was established as an 
independent agency by the National Science Foundation Act of 
1950 (Public Law 81-507) and is authorized to support basic and 
applied research, science and technology policy research, and 
science and engineering education programs to promote the 
progress of science and engineering in the United States.
    The Foundation supports fundamental and applied research in 
all major scientific and engineering disciplines, through 
grants, contracts, and other forms of assistance, such as 
cooperative agreements, awarded to more than 2,000 colleges and 
universities, and to nonprofit organizations and other research 
organizations in all parts of the United States. The Foundation 
also supports major national and international programs and 
research facilities.

                        COMMITTEE RECOMMENDATION

    The Committee recommends $3,200,000,000 for the National 
Science Foundation for fiscal year 1996. This amount is 
$28,653,000 below the 1995 level, $160,000,000 below the budget 
request, and $40,000,000 above the House allowance.

                    RESEARCH AND RELATED ACTIVITIES

Appropriations, 1995....................................  $2,245,000,000
Budget estimate, 1996...................................   2,454,000,000
House allowance.........................................   2,254,000,000

Committee recommendation

                                                           2,294,000,000

                          PROGRAM DESCRIPTION

    The research and related activities appropriation addresses 
Foundation goals to enable the United States to uphold world 
leadership in all aspects of science and engineering, and to 
promote the discovery, integration, dissemination, and 
employment of new knowledge in service to society. Research 
activities will contribute to the achievement of these goals 
through expansion of the knowledge base; integration of 
research and education; stimulation of knowledge transfer among 
academia and the public and private sectors; and bringing the 
perspectives of many disciplines to bear on complex problems 
important to the Nation.
    The Foundation's discipline-oriented research programs are: 
biological sciences; computer and information science and 
engineering; engineering; geosciences; mathematical and 
physical sciences; and social, behavioral and economic 
sciences. Also included are U.S. polar research programs, U.S. 
antarctic logistical support activities, and the Critical 
Technologies Institute.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $2,294,000,000 
for research and related activities. This amount is $49,000,000 
above the fiscal year 1995 level, $160,000,000 below the budget 
request, and $40,000,000 above the House allowance. The 
reduction recommended by the Committee is a general reduction 
to be applied at the Foundation's discretion, subject to normal 
reprogramming guidelines. The Committee urges NSF to consider 
actions it might take to enhance the linkages between research 
and education at both the graduate and undergraduate level.
    NSF-supported centers.--NSF currently manages a multitude 
of centers including the science and technology centers, 
engineering research centers, materials research centers, and 
so on. The Committee recommends an independent review to 
determine NSF's effectiveness in managing these various center 
programs. The review should build on the review completed by 
the National Academy of Public Administration and examine 
methods used for evaluating performance, discontinuing weak 
centers, and encouraging centers to seek financial independence 
where appropriate. The review should also recommend ways to 
strengthen coordination between programs and opportunities for 
restructuring or consolidating programs.
    Optical and infrared astronomy.--The report from National 
Academy of Sciences on ground-based optical and infrared 
astronomy recommends that a modest level of Federal funds for 
facilities instrumentation be allocated only to independent 
observatories that agree to provide national access to their 
facilities in proportion to the funds provided. Although 
current budget restraints make funding this activity difficult, 
the Committee believes that the Foundation should explore other 
sources to initiate this innovative concept. One possibility is 
the ``Academic research infrastructure'' account. In that 
connection, the Committee strongly urges that the NSF modify 
current programmatic guidelines as necessary to enable 
astronomy facility proposals to compete for an increased share 
of the academic research infrastructure funds.
    Opportunity fund.--Last year the Committee provided the 
Foundation with encouragement to create an opportunity fund to 
assist the Foundation in responding quickly to emerging or 
unique opportunities in science and engineering. The Committee 
also supported the Foundation's proposal to create an office of 
multidisciplinary activities within the mathematical and 
physical sciences activity. This office was created, in part, 
as a way to more strategically leverage the directorate's 
resources. The Committee reiterates its support for the use of 
these management tools and expects the Foundation to provide an 
update as part of its current plan submission, and include a 
description of the use of these authorities in the 
justification accompanying the NSF budget request.
    Arctic research vessel.--The Committee understands that the 
National Academy of Sciences is currently preparing a report on 
arctic research issues due out shortly. The General Accounting 
Office recently released a report questioning the need for an 
additional arctic research vessel. The Committee requests that 
the Foundation provide a response to the Academy and the GAO 
reports and determine the need for an arctic research vessel 
given scientific and budgetary considerations. Preprocurement 
activities may proceed as necessary to support the Foundation's 
response and could include examination of purchase options. The 
response should be submitted along with the Foundation's 
response to the results of the Antarctic review discussed 
below.

                         U.S. ANTARCTIC PROGRAM

    Presidential Memorandum 6646 issued in 1982 calls on NSF to 
be the lead agency for the U.S. Antarctic Program. That policy 
directive calls for this Nation to maintain a year-round active 
presence on the continent and to maintain three stations: 
McMurdo, Palmer, and South Pole. The cost to maintain a U.S. 
presence in Antarctic is expensive due to the remote location 
and severe weather conditions. The NSF required $166,770,000 in 
logistics and operations support in fiscal year 1995 to support 
$29,060,000 in scientific research activities.
    The Committee is very concerned about the ability for NSF 
to continue to fund a U.S. permanent presence on the continent 
given severe budget constraints. This situation is exacerbated 
by the need for NSF to upgrade or replace its aging facilities 
such as $200,000,000 estimated to replace the deteriorating 
South Pole station. The Committee questions whether the 1982 
policy to maintain a presence in the Antarctic is still valid.
    As a result, the Committee directs the National Science and 
Technology Council to undertake a Governmentwide policy review 
of the U.S. presence in the Antarctic. The review should 
examine the validity of the policy contained in Memorandum 
6646, namely, the need for a year-round presence, the need for 
three stations, and the roles of the NSF, Department of 
Defense, and other Government agencies. The review should 
examine the policy in the context of the value of the science 
performed in Antarctica and other U.S. interests. Finally, the 
review should address the affordability of continued U.S. 
presence in Antarctica in light of the severe budget 
environment and examine options for reducing annual logistical 
and operational budget needs. At a minimum, budget saving 
options should include greater international cooperation, less 
than a year-round human presence, and closing of one or more of 
the stations. The results of the review should be submitted to 
the Committee by March 31, 1996.

                        MAJOR RESEARCH EQUIPMENT

Appropriations, 1995....................................    $126,000,000
Budget estimate, 1996...................................      70,000,000
House allowance.........................................      70,000,000

Committee recommendation

                                                              70,000,000

                          PROGRAM DESCRIPTION

    The major research equipment activity will support the 
construction and procurement of unique national research 
platforms and major research equipment. Projects supported by 
this appropriation will push the boundaries of technological 
design and will offer significant expansion of opportunities, 
often in new directions, for the science and engineering 
community.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $70,000,000 
for major research equipment. This amount is $56,000,000 below 
the fiscal year 1995 level, the same as the House allowance, 
and will provide for the total amount requested in the 
President's budget for construction of the Laser Interferometer 
Gravitational Wave Observatory [LIGO].

                    ACADEMIC RESEARCH INFRASTRUCTURE

Appropriations, 1995....................................\1\ $118,133,000
Budget estimate, 1996...................................     100,000,000
House allowance.........................................     100,000,000
Committee recommendation................................     100,000,000

\1\ Reflects rescission of $131,867,000 in Public Law 104-19.
---------------------------------------------------------------------------

                          PROGRAM DESCRIPTION

    The goal of the Academic Research Infrastructure Program is 
to improve the research infrastructure by funding, on a cost-
sharing basis, the development and acquisition of major 
instruments, and the repair and renovation of academic research 
facilities. The program will support the acquisition of the 
major modern scientific instruments for our Nation's 
laboratories and advance the Nation's research and research 
training efforts. This also provides competitively awarded 
grants for the repair, renovation, or, in exceptional cases, 
replacement of facilities used for research and research 
training at academic and other nonprofit institutions.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $100,000,000 
for academic research infrastructure. This amount is 
$18,133,000 below the fiscal year 1995 level, and the same as 
the House allowance and the President's budget request. The 
Committee expects these funds to continue to apply to both 
facilities and instrumentation modernization.

                     EDUCATION AND HUMAN RESOURCES

Appropriations, 1995....................................    $605,974,000
Budget estimate, 1996...................................     599,000,000
House allowance.........................................     599,000,000

Committee recommendation

                                                             599,000,000

                          PROGRAM DESCRIPTION

    Education and human resources activities provide a 
comprehensive set of programs across all levels of education in 
science, mathematics, and technology. At the precollege level, 
the appropriation provides for new instructional material and 
techniques, and enrichment activities for teachers and 
students. Undergraduate initiatives support curriculum 
improvement, facility enhancement, and advanced technological 
education. Graduate level support is directed primarily to 
research fellowships and traineeships. Emphasis is given to 
systemic reform through components that address urban, rural, 
and statewide efforts in precollege education, and programs 
which seek to broaden the participation of States and regions 
in science and engineering.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $599,000,000 
for education and human resources. This amount is $6,974,000 
below the fiscal year 1995 level, and equal to the House 
allowance and President's budget request.
    The Committee has provided the budget request for the 
Experimental Program to Stimulate Competitive Research 
[EPSCoR]. This competitive-based program allows for smaller 
universities to conduct research and provide better educational 
opportunities for students. The EPSCoR is vital in providing 
research dollars to a broad array of capable institutions in a 
more equitable geographical distribution. In order to ensure 
that NSF continue to support nationally competitive academic 
research, maintaining funding for EPSCoR is critical.
    The Committee strongly urges the National Science 
Foundation to continue the competitive, merit-based program to 
support the efforts of States to develop electronic libraries. 
These libraries shall provide delivery of and access to a 
variety of data bases, computer programs, and interactive 
multimedia presentations, including educational materials, 
research information, statistics, and reports developed by 
Federal, State and local governments, and other information and 
information services which can be carried over computer 
networks.

                         SALARIES AND EXPENSES

Appropriations, 1995....................................    $123,966,000
Budget estimate, 1996...................................     127,310,000
House allowance.........................................     127,310,000

Committee recommendation

                                                             127,310,000

                          PROGRAM DESCRIPTION

    The salaries and expenses appropriation provides for the 
operation, management, and direction of all Foundation programs 
and activities and includes necessary funds to develop and 
coordinate NSF programs.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $127,310,000 
for salaries and expenses. This amount is $3,344,000 above the 
fiscal year 1995 level, and is the same as the House allowance 
and the total amount requested in the President's budget.

                      OFFICE OF INSPECTOR GENERAL

Appropriations, 1995....................................      $4,380,000
Budget estimate, 1996...................................       4,490,000
House allowance.........................................       4,490,000

Committee recommendation

                                                               4,490,000

                          PROGRAM DESCRIPTION

    The Office of Inspector General appropriation provides 
audit and investigation functions to identify and correct 
deficiencies which could create potential instances of fraud, 
waste, or mismanagement.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $4,490,000 for 
the Office of Inspector General in fiscal year 1996. This 
amount is $110,000 above the fiscal year 1995 level, and is the 
same as the House allowance and the amount requested in the 
President's budget.

          NATIONAL SCIENCE FOUNDATION HEADQUARTERS RELOCATION

Appropriations, 1995....................................      $5,200,000
Budget estimate, 1996...................................       5,200,000
House allowance.........................................       5,200,000

Committee recommendation

                                                               5,200,000

                          PROGRAM DESCRIPTION

    The NSF headquarters relocation appropriation provides 
reimbursement to the General Services Administration for 
expenses incurred by GSA pursuant to the relocation of NSF.

                        COMMITTEE RECOMMENDATION

    The Committee recommends an appropriation of $5,200,000 for 
NSF headquarters relocation. This amount is the same as the 
fiscal year 1995 level, House allowance, and the amount in the 
President's budget request.

                 Neighborhood Reinvestment Corporation

Appropriations, 1995....................................     $38,667,000
Budget estimate, 1996...................................      55,000,000
House allowance.........................................      38,667,000

Committee recommendation

                                                              38,667,000

                          PROGRAM DESCRIPTION

    The Neighborhood Reinvestment Corporation was created by 
the Neighborhood Reinvestment Corporation Act (title VI of the 
Housing and Community Development Amendments of 1978, Public 
Law 95-557, October 31, 1978). Neighborhood reinvestment helps 
local communities establish working partnerships between 
residents and representatives of the public and private 
sectors. The partnership-based organizations are independent, 
tax-exempt, nonprofit entities: Neighborhood housing services 
[NHS], mutual housing associations, and apartment improvement 
programs. Collectively, these organizations are known as the 
NeighborWorks network.
    Nationally, the 177 NeighborWorks organizations 
form a solid network in approximately 150 cities effectively 
revitalizing over 348 neighborhoods. Of the neighborhoods, 71 
percent of the people served are in the very low and low-income 
brackets.
    The NeighborWorks network improves the quality of 
life in distressed neighborhoods for current residents, 
increases homeownership through targeted lending efforts, 
exerts a long-term, stabilizing influence on the neighborhood 
business environment, and reverses neighborhood decline. 
NeighborWorks organizations have been positively 
impacting urban communities for over two decades, and more 
recent experience is demonstrating the success of this approach 
in rural communities when adequate resources are available.
    Neighborhood reinvestment will continue to provide grants 
to Neighborhood Housing Services of America [NHSA], the 
NeighborWorks network's national secondary market. 
The mission of NHSA is to utilize private sector support to 
replenish local NeighborWorks organizations' 
revolving loan funds. These loans are used to back securities 
which are placed with private sector social investors.

                        COMMITTEE RECOMMENDATION

    The Committee proposes $38,667,000 for the Neighborhood 
Reinvestment Corporation. This amount is the same as the 1995 
enacted level and the House allowance. The recommended level is 
$16,333,000 less than the budget request. Funds should be 
allocated consistent with the plans submitted as part of the 
budget request.
    The Committee remains highly supportive of this agency's 
programs and activities. Budgetary constraints prevent granting 
the requested increase, and this action is taken without 
prejudice.

                        Selective Service System

                         SALARIES AND EXPENSES

Appropriations, 1995....................................     $22,930,000
Budget estimate, 1996...................................      23,304,000
House allowance.........................................      22,930,000

Committee recommendation

                                                              22,930,000

                          Program Description

    The Selective Service System [SSS] was reestablished by the 
Selective Service Act of 1948. The basic mission of the System 
is to be prepared to supply manpower to the Armed Forces 
adequate to ensure the security of the United States during a 
time of national emergency. Since 1973, the Armed Forces have 
relied on volunteers to fill military manpower requirements. 
However, the Selective Service System remains the primary 
vehicle by which men will be brought into the military if 
Congress and the President should authorize a return to the 
draft.
    In December 1987, Selective Service was tasked by law 
(Public Law 100-180, sec. 715) to develop plans for a 
postmobilization health care personnel delivery system capable 
of providing the necessary critically skilled health care 
personnel to the Armed Forces in time of emergency. An 
automated system capable of handling mass registration and 
inductions is now complete, together with necessary draft 
legislation, a draft Presidential proclamation, prototype forms 
and letters, et cetera. These products will be available should 
the need arise. The development of supplemental standby 
products, such as a compliance system for health care 
personnel, continues using very limited existing resources.

                        committee recommendation

    The Committee recommends an appropriation of $22,930,000 
for the Selective Service System. This amount is the same as 
the House allowance and the fiscal year 1995 appropriation.

                         DEPARTMENT OF JUSTICE

                   Fair Housing and Equal Opportunity

                        fair housing activities

Appropriations, 1995....................................     $33,375,000
Budget estimate, 1996...................................      45,000,000
House allowance.........................................      30,000,000

Committee recommendation

                                                              30,000,000

                          program description

    The fair housing activities appropriation includes funding 
for both the Fair Housing Assistance Program [FHAP] and the 
Fair Housing Initiatives Program [FHIP].
    The Fair Housing Assistance Program helps State and local 
agencies to implement title VIII of the Civil Rights Act of 
1968, as amended, which prohibits discrimination in the sale, 
rental, and financing of housing and in the provision of 
brokerage services. The major objective of the program is to 
assure prompt and effective processing of title VIII complaints 
with appropriate remedies for complaints by State and local 
fair housing agencies.
    The Fair Housing Initiatives Program is authorized by 
section 561 of the Housing and Community Development Act of 
1987, as amended, and by section 905 of the Housing and 
Community Development Act of 1992. This initiative is designed 
to alleviate housing discrimination by increasing support to 
public and private organizations for the purpose of eliminating 
or preventing discrimination in housing, and to enhance fair 
housing opportunities.

                        committee recommendation

    The Committee recommends an appropriation of $30,000,000 
for fair housing activities. This amount is $3,375,000 below 
the 1995 level and the same as the House allowance. The 
Committee recommendation is $15,000,000 less than the budget 
request.
    The Committee recommendation relocates all responsibilities 
for fair housing issues currently housed in the Department of 
Housing and Urban Development, including the Fair Housing 
Assistance Program and the Fair Housing Initiatives Program, to 
the Department of Justice. There has been substantial testimony 
relating to the Department's inability to effectively 
administer many of its core programs, and the Committee 
emphasizes that the Department needs to focus on ensuring the 
effective administration of its many programs.
    Moreover, the intent of this provision is not to minimize 
the importance of addressing housing discrimination in this 
Nation; instead, the Department of Justice with its own 
significant responsibilities to address all forms of 
discrimination represents a good place to consolidate and to 
provide consistency for the Federal Government to combat 
discrimination, including discrimination relating to fair 
housing. This type of consolidation is critical to effective 
government. It is expected that HUD will provide the necessary 
assistance to ensure the orderly transfer of authority. Nothing 
in this provision is intended to provide Justice with authority 
to promulgate property insurance regulations.

                       DEPARTMENT OF THE TREASURY

             Office of Federal Housing Enterprise Oversight

                         salaries and expenses

                     (including transfer of funds)

Appropriations, 1995....................................     $15,451,000
Budget estimate, 1996...................................      14,895,000
House allowance.........................................      14,895,000

Committee recommendation

                                                              14,895,000

                          program description

    This appropriation funds the Office of Federal Housing 
Enterprise Oversight [OFHEO], which was established in 1992 to 
regulate the financial safety and soundness of the two housing 
Government sponsored enterprises [GSE's], the Federal National 
Mortgage Association and the Federal Home Loan Mortgage 
Corporation. The Office was authorized in the Federal Housing 
Enterprise Safety and Soundness Act of 1992, which also 
instituted a three-part capital standard for the GSE's, and 
gave the regulator enhanced authority to enforce those 
standards.

                        committee recommendation

    The Committee recommends an appropriation of $14,895,000 
for the Office of Federal Housing Enterprise Oversight. This 
amount is $556,000 below the 1995 enacted level and the same as 
the budget request and the House allowance. These costs will be 
offset through assessments of the relevant Government-sponsored 
enterprises.
    The Committee recommendation appropriates funds to the 
Department of the Treasury for the Office of Federal Housing 
Enterprise Oversight [OFHEO] which was authorized in the 
Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 to provide meaningful financial regulation to 
substantially reduce for the public any potential risk of 
exposure to the over $1,000,000,000,000 of GSE liabilities. 
Heretofore, OFHEO was close aligned with the Department of 
Housing and Urban Development.
    The Federal Government is in the process of reassessing its 
responsibilities and consolidating many of its functions and 
responsibilities. As part of this process, it is appropriate 
that OFHEO as a financial regulator be made an office in the 
Department of the Treasury and that all powers, rights, and 
authority of the Director of OFHEO be transferred to the 
Secretary of the Treasury. It is the belief of the Committee 
that the expertise and experience of the Treasury will assist 
OFHEO in carrying out its responsibilities and increase the 
ability of OFHEO to establish in a timely manner a risk-based 
capital test, as required under the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992, to ensure the 
financial well-being of the GSE's.
                                TITLE IV

                              CORPORATION

                 Federal Deposit Insurance Corporation

                         fslic resolution fund

Appropriations, 1995....................................    $827,000,000
Budget estimate, 1996...................................................
House allowance.........................................................

Committee recommendation

                                             ...........................

                          program description

    Section 215 of the Financial Institutions Reform, Recovery 
and Enforcement Act [FIRREA] of 1989 (Public Law 101-73) 
establishes the FSLIC resolution fund as a separate fund under 
the management of the Federal Deposit Insurance Corporation 
[FDIC]. It assumes all assets and liabilities of the Federal 
Savings and Loan Insurance Corporation [FSLIC] except those 
expressly assumed by the Resolution Trust Corporation [RTC] 
under FIRREA.
    To meet its obligations arising from past transactions of 
the FSLIC and other administrative expenses, the FSLIC 
resolution fund may use funds available to it from: income 
earned on its assets, or from the proceeds of their sale and 
subsequent returns from receiverships. To the extent such funds 
are insufficient to meet the obligations of the FSLIC 
resolution fund, FIRREA authorizes to be appropriated to the 
Secretary of the Treasury such funds as may be necessary to 
cover the shortfall.

                        committee recommendation

    No additional capitalization is necessary at this time for 
activities of the fund. Amounts made available in prior years 
remain available to cover all anticipated financial 
requirements.

                    fdic affordable housing program

Appropriations, 1995....................................     $15,000,000
Budget estimate, 1996...................................      15,000,000
House allowance.........................................................

Committee recommendation

                                             ...........................

                          program description

    Section 241 of the FDIC Improvement Act of 1991 authorized 
an FDIC affordable housing program. The proposed program is 
designed to provide homeownership and rental housing 
opportunities for very low-income, low-income, and moderate-
income families by allowing the FDIC to acquire a title to, and 
dispose of, single-family and multifamily housing properties. 
Program funding would be provided through two Federal 
appropriations for administrative and loss funds.

                        committee recommendation

    The Committee has deleted funds for the FDIC affordable 
housing program. The Committee commends the proponents of this 
program for their commitment to the expansion of affordable 
housing opportunities for low- and moderate-income families. 
Given the plethora of housing programs already in existance 
through HUD and other Federal agencies, however, the Committee 
questions the value of yet another program, no matter the merit 
of its intent.

                      Resolution Trust Corporation

                      office of inspector general

Appropriations, 1995....................................     $32,000,000
Budget estimate, 1996...................................      11,400,000
House allowance.........................................      11,400,000

Committee recommendation

                                                              11,400,000

                          program description

    The Office of Inspector General provides independent 
oversight of the savings and loan cleanup efforts of the 
Resolution Trust Corporation. The Office primarily conducts 
audits and investigations of RTC operations and contractors in 
order to detect and prevent fraud, waste, and mismanagement in 
the disposition of insolvent savings and loan institutions and 
their assets by the RTC. The Office of Inspector General was 
established in April 1990 in accordance with the Inspector 
General Act of 1978, as amended, and the Financial Institutions 
Reform, Recovery, and Enforcement Act.

                        committee recommendation

    The Committee recommends an appropriation of $11,400,000 
for the Office of Inspector General. This amount is the same as 
the administration's request and the House allowance and a 
decrease of $20,600,000 below the fiscal year 1995 
appropriation.
    The Office of Inspector General of the RTC will be merged 
with the FDIC OIG when the RTC terminates operations at the end 
of this calendar year.
                      TITLE V--GENERAL PROVISIONS

    The Committee has included 18 of the 19 general provisions 
proposed by the House. They are standard limitations which have 
been carried for many years in the VA, HUD, and Independent 
Agencies appropriations bill.
    The Committee has deleted a general provision included by 
the House regarding EPA contractor conversion. This issue has 
been addressed by the Committee in the report under the EPA 
``Science and technology'' account.
    The Committee has added a general provision providing for 
the termination of the Office of Consumer Affairs. Any 
termination costs are to be absorbed within the Department of 
Health and Human Services fiscal year 1996 appropriation.

  COMPLIANCE WITH PARAGRAPH 7, RULE XVI, OF THE STANDING RULES OF THE 
                                 SENATE

    Paragraph 7 of Rule XVI requires that Committee reports on 
general appropriations bills identify each Committee amendment 
to the House bill ``which proposes an item of appropriation 
which is not made to carry out the provisions of an existing 
law, a treaty stipulation, or an act or resolution previously 
passed by the Senate during that session.''

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Annual contributions for assisted housing: $5,594,358,000.
    HOME Investment Partnerships Program: $1,400,000,000.
    Section 8 contract renewals: $4,350,862,000.
    Public housing operating subsidies: $2,800,000,000.
    Severely distressed public housing: $500,000,000.
    Drug elimination grants: $290,000,000.
    Indian housing loan guarantee fund: $3,000,000.
    Government National Mortgage Association (credit 
limitation): $110,000,000,000.
    Homeless assistance grants: $760,000,000.
    Community development block grants: $4,600,000,000.
    Research and technology: $34,000,000.

                    ENVIRONMENTAL PROTECTION AGENCY

    Program administration and management: $1,670,000,000.
    Science and technology: $500,000,000.
    Buildings and facilities: $60,000,000.
    Program and infrastructure assistance: $2,340,000,000.

                  FEDERAL EMERGENCY MANAGEMENT AGENCY

    Salaries and expenses: $166,000,000.
    Emergency management planning and assistance: $203,044,000.

             NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

    Human space flight: $5,337,000,000.
    Science, aeronautics, and technology: $5,960,700,000.
    Mission support: $2,484,200,000.

                      NATIONAL SCIENCE FOUNDATION

    Research and related activities: $2,294,000,000.
    Major research equipment: $70,000,000.
    Academic research infrastructure: $100,000,000.
    Salaries and expenses: $127,300,000.
    Education and human resources: $599,000,000.

                         DEPARTMENT OF JUSTICE

    Fair housing activities: $30,000,000.

                       DEPARTMENT OF THE TREASURY

    Office of Federal Housing Enterprise Oversight: 
$14,895,000.

COMPLIANCE WITH PARAGRAPH 7(C), RULE XXVI OF THE STANDING RULES OF THE 
                                 SENATE

    Pursuant to paragraph 7(c) of rule XXVI, the accompanying 
bill was ordered reported from the Committee, subject to 
amendment and subject to the subcommittee allocation, by 
recorded vote of 17-11.
        Yeas                          Nays
Chairman Hatfield                   Mr. Byrd
Mr. Stevens                         Mr. Inouye
Mr. Cochran                         Mr. Hollings
Mr. Specter                         Mr. Leahy
Mr. Domenici                        Mr. Bumpers
Mr. Gramm                           Mr. Lautenberg
Mr. Bond                            Mr. Harkin
Mr. Gorton                          Ms. Mikulski
Mr. McConnell                       Mr. Reid
Mr. Mack                            Mr. Kohl
Mr. Burns                           Mrs. Murray
Mr. Shelby
Mr. Jeffords
Mr. Gregg
Mr. Bennett
Mr. Johnston
Mr. Kerrey

 COMPLIANCE WITH PARAGRAPH 12, RULE XXVI OF THE STANDING RULES OF THE 
                                 SENATE

    Paragraph 12 of rule XXVI requires that Committee reports 
on a bill or joint resolution repealing or amending any statute 
or part of any statute include ``(a) the text of the statute or 
part thereof which is proposed to be repealed; and (b) a 
comparative print of that part of the bill or joint resolution 
making the amendment and of the statute or part thereof 
proposed to be amended, showing by stricken-through type and 
italics, parallel columns, or other appropriate typographical 
devices the omissions and insertions which would be made by the 
bill or joint resolution if enacted in the form recommended by 
the committee.''
    As discussed earlier in this report, the dramatic and 
unprecedented constraints on domestic discretionary spending 
has made necessary inclusion of a considerable volume of 
legislative reforms and other changes in existing statutes in 
the Committee recommendation. This is particularly in evidence 
in title II, the Department of Housing and Urban Development 
portion of this bill, in which cost-saving and cost-avoidance 
measures for discretionary housing and community development 
activities require modification of programs governed a large 
body of detailed and complex statutory provisions.
    The Committee has included extensive explanatory material 
in this report which attempts to fully detail both the intent 
and practical effect of these statutory provisions. In view of 
extensive nature of these changes, however, preparation of a 
comparative print detailing each of these statutory amendments 
would delay prompt availability of this report. In the opinion 
of the Committee, it is necessary to dispense with the 
requirements of paragraph 12 of rule XXVI to expedite the 
business of the Senate.

                                            BUDGETARY IMPACT OF BILL                                            
  PREPARED IN CONSULTATION WITH THE CONGRESSIONAL BUDGET OFFICE PURSUANT TO SEC. 308(a), PUBLIC LAW 93-344, AS  
                                                     AMENDED                                                    
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                  Budget authority               Outlays        
                                                             ---------------------------------------------------
                                                               Committee    Amount of    Committee    Amount of 
                                                               allocation      bill      allocation      bill   
----------------------------------------------------------------------------------------------------------------
Comparison of amounts in the bill with Committee allocations                                                    
 to its subcommittees of amounts in the First Concurrent                                                        
 Resolution for 1996: Subcommittee on VA, HUD, and                                                              
 Independent Agencies:                                                                                          
    Discretionary...........................................          190          153          189      \1\ 169
    Nondefense discretionary................................       61,500       61,464       74,642   \1\ 74,625
    Violent crime reduction fund............................  ...........  ...........  ...........  ...........
    Mandatory...............................................       19,138       19,362       17,688   \1\ 17,347
Projection of outlays associated with the recommendation:                                                       
    1996....................................................  ...........  ...........  ...........   \2\ 46,268
    1997....................................................  ...........  ...........  ...........       19,552
    1998....................................................  ...........  ...........  ...........        7,226
    1999....................................................  ...........  ...........  ...........        2,880
    2000 and future years...................................  ...........  ...........  ...........        3,852
Financial assistance to State and local governments for 1996                                                    
 in bill....................................................           NA       18,583           NA        2,799
----------------------------------------------------------------------------------------------------------------
\1\ Includes outlays from prior-year budget authority.                                                          
\2\ Excludes outlays from prior-year budget authority.                                                          
                                                                                                                
NA: Not applicable.                                                                                             


                              - 

                 COMPARATIVE STATEMENT OF NEW BUDGET (OBLIGATIONAL) AUTHORITY FOR FISCAL YEAR 1995 AND BUDGET ESTIMATES AND AMOUNTS RECOMMENDED IN THE BILL FOR FISCAL YEAR 1996                
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                         Senate Committee recommendation compared with (+ or -) 
                           Item                                   1995         Budget estimate    House allowance       Committee     ----------------------------------------------------------
                                                             appropriation                                            recommendation   1995 appropriation    Budget estimate    House allowance 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                
                         TITLE I                                                                                                                                                                
                                                                                                                                                                                                
              DEPARTMENT OF VETERANS AFFAIRS                                                                                                                                                    
                                                                                                                                                                                                
             Veterans Benefits Administration                                                                                                                                                   
                                                                                                                                                                                                
Compensation and pensions................................   $17,626,892,000    $17,649,972,000    $17,649,972,000    $17,649,972,000        +$23,080,000   ..................  .................
Readjustment benefits....................................     1,286,600,000      1,345,300,000      1,345,300,000      1,345,300,000         +58,700,000   ..................  .................
Veterans insurance and indemnities.......................        24,760,000         24,890,000         24,890,000         24,890,000            +130,000   ..................  .................
Guaranty and indemnity program account (indefinite)......       507,095,000        504,122,000        504,122,000        504,122,000          -2,973,000   ..................  .................
    Negative subsidy for guaranteed loans................  .................      -185,500,000       -185,500,000       -185,500,000        -185,500,000   ..................  .................
    Administrative expenses..............................        65,226,000         78,085,000         65,226,000         65,226,000   ..................       -$12,859,000   .................
Loan guaranty program account (indefinite)...............        43,939,000         22,950,000         22,950,000         22,950,000         -20,989,000   ..................  .................
    Administrative expenses..............................        59,371,000         52,138,000         52,138,000         52,138,000          -7,233,000   ..................  .................
Direct loan program account (indefinite).................            25,000             28,000             28,000             28,000              +3,000   ..................  .................
    (Limitation on direct loans).........................        (1,000,000)          (300,000)          (300,000)          (300,000)          (-700,000)  ..................  .................
    Administrative expenses..............................         1,020,000            459,000            459,000            459,000            -561,000   ..................  .................
    (Loan level).........................................           (97,000)           (99,000)           (99,000)           (99,000)            (+2,000)  ..................  .................
Education loan fund program account......................             1,061              1,093              1,000              1,000                 -61                 -93   .................
    (Limitation on direct loans).........................            (4,034)            (4,120)            (4,000)            (4,000)               (-34)              (-120)  .................
    Administrative expenses..............................           195,000            203,000            195,000            195,000   ..................             -8,000   .................
Vocational rehabilitation loans program account..........            54,000             56,000             54,000             54,000   ..................             -2,000   .................
    (Limitation on direct loans).........................        (1,964,000)        (2,022,000)        (1,964,000)        (1,964,000)  ..................           (-58,000)  .................
    Administrative expenses..............................           767,000            377,000            377,000            377,000            -390,000   ..................  .................
Native American Veteran Housing Loan Program Account.....           218,000            455,000            205,000            205,000             -13,000            -250,000   .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Veterans Benefits Administration............    19,616,163,061     19,493,536,093     19,480,417,000     19,480,417,000        -135,746,061         -13,119,093   .................
                                                                                                                                                                                                
              Veterans Health Administration                                                                                                                                                    
                                                                                                                                                                                                
Medical care.............................................    16,214,684,000     16,961,487,000     16,777,474,000     16,450,000,000        +235,316,000        -511,487,000      -$327,474,000 
    Legislative offsets..................................  .................  .................      -170,000,000       -170,000,000        -170,000,000        -170,000,000   .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total..............................................    16,214,684,000     16,961,487,000     16,607,474,000     16,280,000,000         +65,316,000        -681,487,000       -327,474,000 
Medical and prosthetic research..........................       251,743,000        257,000,000        251,743,000        257,000,000          +5,257,000   ..................        +5,257,000 
Health professional scholarship program..................        10,386,000         10,386,000         10,386,000   .................        -10,386,000         -10,386,000        -10,386,000 
Medical administration and miscellaneous operating                                                                                                                                              
 expenses................................................        69,789,000         72,262,000         63,602,000         63,602,000          -6,187,000          -8,660,000   .................
Grants to the Republic of the Philippines................           500,000   .................  .................  .................           -500,000   ..................  .................
Transitional housing loan program:                                                                                                                                                              
    Loan program account (by transfer)...................            (7,000)            (7,000)            (7,000)            (7,000)  ..................  ..................  .................
    Administrative expenses (by transfer)................           (54,000)           (56,000)           (54,000)           (54,000)  ..................            (-2,000)  .................
    (Limitation on direct loans).........................           (70,000)           (70,000)           (70,000)           (70,000)  ..................  ..................  .................
General post fund (transfer out).........................          (-61,000)          (-63,000)          (-61,000)          (-61,000)  ..................            (+2,000)  .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Veterans Health Administration..............    16,547,102,000     17,301,135,000     16,933,205,000     16,600,602,000         +53,500,000        -700,533,000       -332,603,000 
                                                                                                                                                                                                
               Departmental Administration                                                                                                                                                      
                                                                                                                                                                                                
General operating expenses...............................       890,193,000        915,643,000        821,487,000        880,000,000         -10,193,000         -35,643,000        +58,513,000 
    Offsetting receipts..................................  .................  .................       (32,000,000)       (32,000,000)       (+32,000,000)       (+32,000,000)  .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Program Level...............................      (890,193,000)      (915,643,000)      (853,487,000)      (912,000,000)       (+21,807,000)        (-3,643,000)      (+58,513,000)
National Cemetery System.................................        72,604,000         75,308,000         72,604,000         72,604,000   ..................         -2,704,000   .................
Office of Inspector General..............................        31,815,000         33,500,000         30,900,000         30,900,000            -915,000          -2,600,000   .................
Construction, major projects.............................       354,294,000        513,755,000        183,455,000         35,785,000        -318,509,000        -477,970,000       -147,670,000 
    (Transfer out).......................................  .................  .................       (-7,000,000)       (-7,000,000)        (-7,000,000)        (-7,000,000)  .................
Construction, minor projects.............................       152,934,000        229,145,000        152,934,000        190,000,000         +37,066,000         -39,145,000        +37,066,000 
Parking revolving fund...................................        16,300,000   .................  .................  .................        -16,300,000   ..................  .................
    (By transfer)........................................  .................  .................        (7,000,000)        (7,000,000)        (+7,000,000)        (+7,000,000)  .................
Grants for construction of state extended care facilities        47,397,000         43,740,000         47,397,000         47,397,000   ..................         +3,657,000   .................
Grants for the construction of state veterans cemeteries.         5,378,000          1,000,000          1,000,000          1,000,000          -4,378,000   ..................  .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Departmental Administration.................     1,570,915,000      1,812,091,000      1,309,777,000      1,257,686,000        -313,229,000        -554,405,000        -52,091,000 
                                                          ======================================================================================================================================
      Total, title I, Department of Veterans Affairs.....    37,734,180,061     38,606,762,093     37,723,399,000     37,338,705,000        -395,475,061      -1,268,057,093       -384,694,000 
          (By transfer)..................................           (61,000)           (63,000)        (7,061,000)        (7,061,000)        (+7,000,000)        (+6,998,000)  .................
          (Limitation on direct loans)...................        (3,135,034)        (2,495,120)        (2,437,000)        (2,437,000)          (-698,034)           (-58,120)  .................
                                                          ======================================================================================================================================
          Consisting of:                                                                                                                                                                        
              Mandatory..................................   (19,489,311,000)   (19,361,762,000)   (19,361,762,000)   (19,361,762,000)      (-127,549,000)  ..................  .................
              Discretionary..............................   (18,244,869,061)   (19,245,000,093)   (18,361,637,000)   (17,976,943,000)      (-267,926,061)    (-1,268,057,093)     (-384,694,000)
                                                                                                                                                                                                
                         TITLE II                                                                                                                                                               
                                                                                                                                                                                                
       DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT                                                                                                                                              
                                                                                                                                                                                                
                Selected Housing Programs                                                                                                                                                       
                                                                                                                                                                                                
Housing certificates for families and individuals                                                                                                                                               
 performance funds.......................................  .................     6,509,955,000   .................  .................  ..................     -6,509,955,000   .................
Public and Indian housing capital performance funds......  .................     4,884,000,000   .................  .................  ..................     -4,884,000,000   .................
Annual contributions for assisted housing................    11,083,000,000   .................    10,182,359,000      5,594,358,000      -5,488,642,000      +5,594,358,000     -4,588,001,000 
    Transfer from UDAG...................................      (100,000,000)  .................  .................  .................      (-100,000,000)  ..................  .................
Severely distressed public housing.......................       500,000,000   .................  .................       500,000,000   ..................       +500,000,000       +500,000,000 
Assistance for the renewal of expiring section 8 subsidy                                                                                                                                        
 contracts...............................................     2,536,000,000   .................  .................     4,350,862,000      +1,814,862,000      +4,350,862,000     +4,350,862,000 
Flexible subsidy fund....................................        50,000,000   .................  .................  .................        -50,000,000   ..................  .................
Housing opportunities for persons with AIDS..............  .................       186,000,000   .................  .................  ..................       -186,000,000   .................
Congregate services......................................        25,000,000   .................  .................  .................        -25,000,000   ..................  .................
Rental housing assistance:                                                                                                                                                                      
    Rescission of budget authority, indefinite...........       -38,000,000        -35,119,000        -35,119,000        -35,119,000          +2,881,000   ..................  .................
    (Limitation on annual contract authority, indefinite)       (-2,000,000)       (-2,000,000)       (-2,000,000)       (-2,000,000)  ..................  ..................  .................
    Rescission of prepayment recaptures..................       -66,000,000       -163,000,000       -163,000,000       -163,000,000         -97,000,000   ..................  .................
Homeownership assistance.................................         6,875,000   .................  .................  .................         -6,875,000   ..................  .................
    Rescission of budget authority, indefinite...........      -184,000,000   .................  .................  .................       +184,000,000   ..................  .................
Public and Indian housing operation performance funds....  .................     3,220,000,000   .................  .................  ..................     -3,220,000,000   .................
Payments for operation of low-income housing projects....     2,900,000,000   .................     2,500,000,000      2,800,000,000        -100,000,000      +2,800,000,000       +300,000,000 
Drug elimination grants for low-income housing...........       290,000,000   .................  .................       290,000,000   ..................       +290,000,000       +290,000,000 
Affordable housing performance funds.....................  .................     3,339,000,000   .................  .................  ..................     -3,339,000,000   .................
HOME investment partnerships program.....................     1,400,000,000   .................     1,400,000,000      1,400,000,000   ..................     +1,400,000,000   .................
Homeownership and opportunity for people everywhere                                                                                                                                             
 grants (HOPE grants)....................................        50,000,000   .................  .................  .................        -50,000,000   ..................  .................
National homeownership trust demonstration program.......        50,000,000   .................  .................  .................        -50,000,000   ..................  .................
Youthbuild program.......................................        50,000,000   .................  .................  .................        -50,000,000   ..................  .................
Housing counseling assistance............................        50,000,000   .................        12,000,000   .................        -50,000,000   ..................       -12,000,000 
Indian housing loan guarantee fund program account.......         3,000,000          3,000,000          3,000,000          3,000,000   ..................  ..................  .................
    (Limitation on guarantee loans)......................       (22,388,000)       (36,900,000)       (36,900,000)       (36,900,000)       (+14,512,000)  ..................  .................
Violent crime reduction program..........................  .................         3,000,000   .................  .................  ..................         -3,000,000   .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Selected housing programs (net).............    18,705,875,000     17,946,836,000     13,899,240,000     14,740,101,000      -3,965,774,000      -3,206,735,000       +840,861,000 
                                                                                                                                                                                                
                   Homeless Assistance                                                                                                                                                          
                                                                                                                                                                                                
Homeless assistance fund.................................  .................     1,120,000,000   .................  .................  ..................     -1,120,000,000   .................
Homeless assistance grants...............................     1,120,000,000   .................       676,000,000        760,000,000        -360,000,000        +760,000,000        +84,000,000 
                                                                                                                                                                                                
            Community Planning and Development                                                                                                                                                  
                                                                                                                                                                                                
Community opportunity fund...............................  .................     4,850,000,000   .................  .................  ..................     -4,850,000,000   .................
Community opportunity performance program account........  .................        21,000,000   .................  .................  ..................        -21,000,000   .................
    Administrative expenses..............................  .................           900,000   .................  .................  ..................           -900,000   .................
Community development grants.............................     4,600,000,000   .................     4,600,000,000      4,600,000,000   ..................     +4,600,000,000   .................
Section 108 loan guarantees:                                                                                                                                                                    
    (Limitation on guaranteed loans).....................    (2,054,000,000)  .................    (1,000,000,000)    (1,500,000,000)      (-554,000,000)    (+1,500,000,000)     (+500,000,000)
    Credit subsidy.......................................  .................  .................        10,500,000         15,750,000         +15,750,000         +15,750,000         +5,250,000 
    Administrative expenses..............................  .................  .................           225,000            675,000            +675,000            +675,000           +450,000 
                                                                                                                                                                                                
             Policy Development and Research                                                                                                                                                    
                                                                                                                                                                                                
Research and technology..................................        42,000,000         42,000,000         34,000,000         34,000,000          -8,000,000          -8,000,000   .................
                                                                                                                                                                                                
            Fair Housing and Equal Opportunity                                                                                                                                                  
                                                                                                                                                                                                
Fair housing activities..................................        33,375,000         45,000,000         30,000,000   .................        -33,375,000         -45,000,000        -30,000,000 
                                                                                                                                                                                                
              Management and Administration                                                                                                                                                     
                                                                                                                                                                                                
Salaries and expenses....................................       451,219,000        479,479,000        437,194,000        438,219,000         -13,000,000         -41,260,000         +1,025,000 
    (By transfer, limitation on FHA corporate funds).....      (495,355,000)      (527,782,000)      (505,745,000)      (532,782,000)       (+37,427,000)        (+5,000,000)      (+27,037,000)
    (By transfer, GNMA)..................................        (8,824,000)        (9,101,000)        (8,824,000)        (9,101,000)          (+277,000)  ..................         (+277,000)
    (By transfer, Community Planning and Development)....  .................          (900,000)          (225,000)          (675,000)          (+675,000)          (-225,000)         (+450,000)
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Salaries and expenses.......................      (955,398,000)    (1,017,262,000)      (951,988,000)      (980,777,000)       (+25,379,000)       (-36,485,000)      (+28,789,000)
Office of Inspector General..............................        36,427,000         36,968,000         36,427,000         36,968,000            +541,000   ..................          +541,000 
    (By transfer, limitation on FHA corporate funds).....       (10,961,000)       (11,283,000)       (10,961,000)       (11,283,000)          (+322,000)  ..................         (+322,000)
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Office of Inspector General.................       (47,388,000)       (48,251,000)       (47,388,000)       (48,251,000)          (+863,000)  ..................         (+863,000)
Office of federal housing enterprise oversight...........        15,451,000         14,895,000         14,895,000   .................        -15,451,000         -14,895,000        -14,895,000 
    Offsetting receipts..................................       -15,451,000        -14,895,000        -14,895,000   .................        +15,451,000         +14,895,000        +14,895,000 
                                                                                                                                                                                                
              Federal Housing Administration                                                                                                                                                    
                                                                                                                                                                                                
FHA--Mutual mortgage insurance program account:                                                                                                                                                 
    (Limitation on guaranteed loans).....................  (100,000,000,000)  (110,000,000,000)  (110,000,000,000)  (110,000,000,000)   (+10,000,000,000)  ..................  .................
    (Limitation on direct loans).........................      (180,000,000)      (200,000,000)      (200,000,000)      (200,000,000)       (+20,000,000)  ..................  .................
    Administrative expenses..............................       308,846,000        341,595,000        308,846,000        341,595,000         +32,749,000   ..................       +32,749,000 
    Offsetting receipts..................................      -308,846,000       -341,595,000       -308,846,000       -341,595,000         -32,749,000   ..................       -32,749,000 
FHA--General and special risk program account:                                                                                                                                                  
    (Limitation on guaranteed loans).....................   (20,885,072,000)   (17,400,000,000)   (15,000,000,000)   (17,400,000,000)    (-3,485,072,000)  ..................   (+2,400,000,000)
    (Limitation on direct loans).........................      (220,000,000)      (120,000,000)      (120,000,000)      (120,000,000)      (-100,000,000)  ..................  .................
    Administrative expenses..............................       197,470,000        197,470,000        197,470,000        202,470,000          +5,000,000          +5,000,000         +5,000,000 
    Program costs........................................       188,395,000        188,395,000         69,620,000        100,000,000         -88,395,000         -88,395,000        +30,380,000 
    Subsidy:                                                                                                                                                                                    
        Multifamily......................................      -134,096,000        -37,996,000        -37,996,000        -37,996,000         +96,100,000   ..................  .................
        Single family....................................       -81,673,000        -27,044,000        -27,044,000        -27,044,000         +54,629,000   ..................  .................
        Title I..........................................       -24,460,000        -23,777,000        -23,777,000        -23,777,000            +683,000   ..................  .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
          Total, Federal Housing Administration..........       145,636,000        297,048,000        178,273,000        213,653,000         +68,017,000         -83,395,000        +35,380,000 
                                                                                                                                                                                                
         Government National Mortgage Association                                                                                                                                               
                                                                                                                                                                                                
Guarantees of mortgage-backed securities loan guarantee                                                                                                                                         
 program account:                                                                                                                                                                               
    (Limitation on guaranteed loans).....................  (142,000,000,000)  (110,000,000,000)  (110,000,000,000)  (110,000,000,000)   (-32,000,000,000)  ..................  .................
    Administrative expenses..............................         8,824,000          9,101,000          8,824,000          9,101,000            +277,000   ..................          +277,000 
    Offsetting receipts..................................      -262,700,000       -508,300,000       -508,300,000       -508,300,000        -245,600,000   ..................  .................
                                                                                                                                                                                                
                Administrative Provisions                                                                                                                                                       
                                                                                                                                                                                                
Procurement savings......................................        -3,538,000   .................  .................  .................         +3,538,000   ..................  .................
FHA mortgage insurance limits............................        -3,000,000   .................  .................  .................         +3,000,000   ..................  .................
GNMA REMICs..............................................      -180,000,000   .................  .................  .................       +180,000,000   ..................  .................
GNMA REMICs II...........................................       -30,600,000   .................  .................  .................        +30,600,000   ..................  .................
1-year extension of HECM's demonstration.................  .................  .................       -11,000,000        -11,000,000         -11,000,000         -11,000,000   .................
Non-judicial foreclosure.................................       -10,000,000   .................  .................  .................        +10,000,000   ..................  .................
                                                          ======================================================================================================================================
      Total, title II, Department of Housing and Urban                                                                                                                                          
       Development (net).................................    24,653,518,000     24,340,032,000     19,391,383,000     20,329,167,000      -4,324,351,000      -4,010,865,000       +937,784,000 
              Appropriations.............................   (24,941,518,000)   (24,538,151,000)   (19,589,502,000)   (20,527,286,000)    (-4,414,232,000)    (-4,010,865,000)     (+937,784,000)
              Rescissions................................     (-288,000,000)     (-198,119,000)     (-198,119,000)     (-198,119,000)       (+89,881,000)  ..................  .................
          (Limitation on annual contract authority,                                                                                                                                             
           indefinite)...................................       (-2,000,000)       (-2,000,000)       (-2,000,000)       (-2,000,000)  ..................  ..................  .................
          (Limitation on guaranteed loans)...............  (264,939,072,000)  (237,400,000,000)  (236,000,000,000)  (238,900,000,000)   (-26,039,072,000)    (+1,500,000,000)   (+2,900,000,000)
          (Limitation on corporate funds)................      (515,140,000)      (549,066,000)      (525,755,000)      (553,841,000)       (+38,701,000)        (+4,775,000)      (+28,086,000)
          Consisting of:                                                                                                                                                                        
              Advance appropriation available............       800,000,000   .................  .................  .................       -800,000,000   ..................  .................
              Appropriations available from this bill....    24,653,518,000     24,340,032,000     19,391,383,000     20,329,167,000      -4,324,351,000      -4,010,865,000       +937,784,000 
                                                          --------------------------------------------------------------------------------------------------------------------------------------
                Total, title II..........................    25,453,518,000     24,340,032,000     19,391,383,000     20,329,167,000      -5,124,351,000      -4,010,865,000       +937,784,000 
                                                                                                                                                                                                
                        TITLE III                                                                                                                                                               
                                                                                                                                                                                                
                   INDEPENDENT AGENCIES                                                                                                                                                         
                                                                                                                                                                                                
           American Battle Monuments Commission                                                                                                                                                 
                                                                                                                                                                                                
Salaries and expenses....................................        20,265,000         20,265,000         20,265,000         20,265,000   ..................  ..................  .................
                                                                                                                                                                                                
      Chemical Safety and Hazard Investigation Board                                                                                                                                            
                                                                                                                                                                                                
Salaries and expenses....................................           500,000   .................  .................  .................           -500,000   ..................  .................
                                                                                                                                                                                                
       Community Development Financial Institutions                                                                                                                                             
                                                                                                                                                                                                
Community development financial institutions fund program                                                                                                                                       
 account.................................................       125,000,000        123,650,000   .................  .................       -125,000,000        -123,650,000   .................
    Loan subsidy.........................................  .................        20,000,000   .................  .................  ..................        -20,000,000   .................
Office of Inspector General..............................  .................           350,000   .................  .................  ..................           -350,000   .................
                                                                                                                                                                                                
            Consumer Product Safety Commission                                                                                                                                                  
                                                                                                                                                                                                
Salaries and expenses....................................        42,509,000         44,000,000         40,000,000         40,000,000          -2,509,000          -4,000,000   .................
                                                                                                                                                                                                
      Corporation for National and Community Service                                                                                                                                            
                                                                                                                                                                                                
National and community service programs operating                                                                                                                                               
 expenses................................................       575,000,000        817,476,000   .................  .................       -575,000,000        -817,476,000   .................
    Delay of obligation..................................  .................  .................  .................  .................  ..................  ..................  .................
Office of Inspector General..............................         2,000,000          2,000,000   .................  .................         -2,000,000          -2,000,000   .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total..............................................       577,000,000        819,476,000   .................  .................       -577,000,000        -819,476,000   .................
                                                                                                                                                                                                
                Court of Veterans Appeals                                                                                                                                                       
                                                                                                                                                                                                
Salaries and expenses....................................         9,429,000          9,820,000          9,000,000          9,000,000            -429,000            -820,000   .................
                                                                                                                                                                                                
               Department of Defense--Civil                                                                                                                                                     
                                                                                                                                                                                                
                Cemeterial Expenses, Army                                                                                                                                                       
                                                                                                                                                                                                
Salaries and expenses....................................        12,017,000         14,134,000         11,296,000         11,946,000             -71,000          -2,188,000           +650,000 
                                                                                                                                                                                                
             Environmental Protection Agency                                                                                                                                                    
                                                                                                                                                                                                
Research and development.................................       350,000,000        426,661,000        384,052,000   .................       -350,000,000        -426,661,000       -384,052,000 
Science and Technology...................................  .................  .................  .................       500,000,000        +500,000,000        +500,000,000       +500,000,000 
Environmental programs and compliance....................  .................  .................     1,881,614,000   .................  ..................  ..................    -1,881,614,000 
Abatement, control, and compliance.......................     1,417,000,000      1,748,823,000   .................  .................     -1,417,000,000      -1,748,823,000   .................
    (Limitation on administrative expenses)..............      (296,722,500)  .................  .................  .................      (-296,722,500)  ..................  .................
Program and research operations..........................       922,000,000      1,017,298,000   .................  .................       -922,000,000      -1,017,298,000   .................
Program Administration and Management....................  .................  .................  .................     1,670,000,000      +1,670,000,000      +1,670,000,000     +1,670,000,000 
Office of Inspector General..............................        28,542,000         33,050,000         28,542,000         27,700,000            -842,000          -5,350,000           -842,000 
    Transfer from Hazardous Substance Superfund..........        15,384,000         14,078,000          5,000,000         11,700,000          -3,684,000          -2,378,000         +6,700,000 
    Transfer from Leaking Underground Storage Tanks......           669,000            710,000            426,000            600,000             -69,000            -110,000           +174,000 
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, OIG......................................        44,595,000         47,838,000         33,968,000         40,000,000          -4,595,000          -7,838,000         +6,032,000 
Buildings and facilities.................................        43,870,000        112,820,000         28,820,000         60,000,000         +16,130,000         -52,820,000        +31,180,000 
Hazardous substance superfund............................     1,435,000,000      1,507,937,000      1,003,400,000      1,003,400,000        -431,600,000        -504,537,000   .................
    Legislative proposals--reforms.......................  .................        55,000,000   .................  .................  ..................        -55,000,000   .................
    Transfer to OIG......................................       -15,384,000        -14,078,000         -5,000,000        -11,700,000          +3,684,000          +2,378,000         -6,700,000 
    (Limitation on administrative expenses)..............      (308,000,000)  .................  .................  .................      (-308,000,000)  ..................  .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, Hazardous substance superfund............     1,419,616,000      1,548,859,000        998,400,000        991,700,000        -427,916,000        -557,159,000         -6,700,000 
Leaking underground storage tank trust fund..............        70,000,000         77,273,000         45,827,000         45,827,000         -24,173,000         -31,446,000   .................
    Transfer to OIG......................................          -669,000           -710,000           -426,000           -600,000             +69,000            +110,000           -174,000 
    (Limitation on administrative expenses)..............        (8,150,000)  .................        (5,285,000)        (8,000,000)          (-150,000)        (+8,000,000)       (+2,715,000)
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Subtotal, LUST.....................................        69,331,000         76,563,000         45,401,000         45,227,000         -24,104,000         -31,336,000           -174,000 
Oil spill response.......................................        20,000,000         23,047,000         20,000,000         15,000,000          -5,000,000          -8,047,000         -5,000,000 
    (Limitation on administrative expenses)..............        (8,420,000)  .................        (8,420,000)        (8,000,000)          (-420,000)        (+8,000,000)         (-420,000)
Water infrastructure/State revolving fund................     2,262,000,000      1,865,000,000      1,500,175,000   .................     -2,262,000,000      -1,865,000,000     -1,500,175,000 
Safe drinking water State revolving fund.................       700,000,000        500,000,000   .................  .................       -700,000,000        -500,000,000   .................
Program and infrastructure assistance....................  .................  .................  .................     2,340,000,000      +2,340,000,000      +2,340,000,000     +2,340,000,000 
Environmental services--user fees........................  .................        -7,500,000   .................  .................  ..................         +7,500,000   .................
Procurement savings......................................        -7,525,000   .................  .................  .................         +7,525,000   ..................  .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, EPA.........................................     7,240,887,000      7,359,409,000      4,892,430,000      5,661,927,000      -1,578,960,000      -1,697,482,000       +769,497,000 
                                                                                                                                                                                                
            Executive Office of the President                                                                                                                                                   
                                                                                                                                                                                                
Office of Science and Technology Policy..................         4,981,000          4,981,000          4,981,000          4,981,000   ..................  ..................  .................
Council on Environmental Quality and Office of                                                                                                                                                  
 Environmental Quality...................................           997,000          2,188,000          1,000,000          1,000,000              +3,000          -1,188,000   .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total..............................................         5,978,000          7,169,000          5,981,000          5,981,000              +3,000          -1,188,000   .................
                                                                                                                                                                                                
           Federal Emergency Management Agency                                                                                                                                                  
                                                                                                                                                                                                
Disaster relief..........................................       320,000,000        320,000,000        235,500,000   .................       -320,000,000        -320,000,000       -235,500,000 
Disaster assistance direct loan program account:                                                                                                                                                
    State share loan.....................................         2,418,000          2,155,000          2,155,000          2,155,000            -263,000   ..................  .................
    (Limitation on direct loans).........................      (175,000,000)       (25,000,000)       (25,000,000)       (25,000,000)      (-150,000,000)  ..................  .................
    Administrative expenses..............................            95,000             95,000             95,000             95,000   ..................  ..................  .................
Salaries and expenses....................................       162,000,000        172,331,000        162,000,000        166,000,000          +4,000,000          -6,331,000         +4,000,000 
Office of Inspector General..............................         4,400,000          4,673,000          4,400,000          4,400,000   ..................           -273,000   .................
Emergency management planning and assistance.............       215,960,000        210,122,000        203,044,000        203,044,000         -12,916,000          -7,078,000   .................
Emergency food and shelter program.......................       130,000,000        130,000,000        100,000,000        100,000,000         -30,000,000         -30,000,000   .................
Administrative provision REP savings.....................       -11,525,000        -12,257,000        -12,257,000        -12,257,000            -732,000   ..................  .................
Procurement savings......................................        -1,441,000   .................  .................  .................         +1,441,000   ..................  .................
National Flood Insurance:                                                                                                                                                                       
    Salaries and expenses................................  .................       (20,562,000)       (20,562,000)       (20,562,000)       (+20,562,000)  ..................  .................
    Flood mitigation.....................................  .................       (70,464,000)       (70,464,000)       (70,464,000)       (+70,464,000)  ..................  .................
    Premium increase.....................................  .................       -21,000,000   .................  .................  ..................        +21,000,000   .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Federal Emergency Management Agency.........       821,907,000        806,119,000        694,937,000        463,437,000        -358,470,000        -342,682,000       -231,500,000 
                                                                                                                                                                                                
             General Services Administration                                                                                                                                                    
                                                                                                                                                                                                
Consumer Information Center..............................         2,004,000          2,061,000          2,061,000          2,061,000             +57,000   ..................  .................
    (Limitation on administrative expenses)..............        (2,454,000)        (2,502,000)        (2,502,000)        (2,606,000)          (+152,000)          (+104,000)         (+104,000)
                                                                                                                                                                                                
         Department of Health and Human Services                                                                                                                                                
                                                                                                                                                                                                
Office of Consumer Affairs...............................         2,166,000          1,811,000          1,811,000   .................         -2,166,000          -1,811,000         -1,811,000 
                                                                                                                                                                                                
      National Aeronautics and Space Administration                                                                                                                                             
                                                                                                                                                                                                
Human space flight.......................................     5,514,897,000      5,509,600,000      5,449,600,000      5,337,600,000        -177,297,000        -172,000,000       -112,000,000 
Science, aeronautics and technology......................     5,901,200,000      6,006,900,000      5,588,000,000      5,960,700,000         +59,500,000         -46,200,000       +372,700,000 
    Rescission...........................................       -10,000,000   .................  .................  .................        +10,000,000   ..................  .................
National aeronautical facilities.........................       400,000,000   .................  .................  .................       -400,000,000   ..................  .................
Mission support..........................................     2,554,587,000      2,726,200,000      2,618,200,000      2,484,200,000         -70,387,000        -242,000,000       -134,000,000 
Office of Inspector General..............................        16,000,000         17,300,000         16,000,000         16,000,000   ..................         -1,300,000   .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, NASA (net)..................................    14,376,684,000     14,260,000,000     13,671,800,000     13,798,500,000        -578,184,000        -461,500,000       +126,700,000 
                                                                                                                                                                                                
           National Credit Union Administration                                                                                                                                                 
                                                                                                                                                                                                
Central liquidity facility:                                                                                                                                                                     
    (Limitation on direct loans).........................      (600,000,000)      (600,000,000)      (600,000,000)      (600,000,000)  ..................  ..................  .................
    (Limitation on administrative expenses, corporate                                                                                                                                           
     funds)..............................................          (901,000)          (560,000)          (560,000)          (560,000)          (-341,000)  ..................  .................
                                                                                                                                                                                                
               National Science Foundation                                                                                                                                                      
                                                                                                                                                                                                
Research and related activities..........................     2,280,000,000      2,454,000,000      2,254,000,000      2,294,000,000         +14,000,000        -160,000,000        +40,000,000 
    Rescission...........................................       -35,000,000   .................  .................  .................        +35,000,000   ..................  .................
Major research equipment.................................       126,000,000         70,000,000         70,000,000         70,000,000         -56,000,000   ..................  .................
Academic research infrastructure.........................       250,000,000        100,000,000        100,000,000        100,000,000        -150,000,000   ..................  .................
Education and human resources............................       605,974,000        599,000,000        599,000,000        599,000,000          -6,974,000   ..................  .................
Salaries and expenses....................................       123,966,000        127,310,000        127,310,000        127,310,000          +3,344,000   ..................  .................
Office of Inspector General..............................         4,380,000          4,490,000          4,490,000          4,490,000            +110,000   ..................  .................
National Science Foundation headquarters relocation......         5,200,000          5,200,000          5,200,000          5,200,000   ..................  ..................  .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, NSF (net)...................................     3,360,520,000      3,360,000,000      3,160,000,000      3,200,000,000        -160,520,000        -160,000,000        +40,000,000 
                                                                                                                                                                                                
          Neighborhood Reinvestment Corporation                                                                                                                                                 
                                                                                                                                                                                                
Payment to the Neighborhood Reinvestment Corporation.....        38,667,000         55,000,000         38,667,000         38,667,000   ..................        -16,333,000   .................
                                                                                                                                                                                                
                 Selective Service System                                                                                                                                                       
                                                                                                                                                                                                
Salaries and expenses....................................        22,930,000         23,304,000         22,930,000         22,930,000   ..................           -374,000   .................
                                                                                                                                                                                                
                  DEPARTMENT OF JUSTICE                                                                                                                                                         
                                                                                                                                                                                                
            Fair Housing and Equal Opportunity                                                                                                                                                  
                                                                                                                                                                                                
Fair Housing activities..................................  .................  .................  .................        30,000,000         +30,000,000         +30,000,000        +30,000,000 
                                                                                                                                                                                                
                Department of the Treasury                                                                                                                                                      
                                                                                                                                                                                                
Office of Federal Housing Enterprise oversight...........  .................  .................  .................        14,895,000         +14,895,000         +14,895,000        +14,895,000 
    Offsetting receipts..................................  .................  .................  .................       -14,895,000         -14,895,000         -14,895,000        -14,895,000 
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, Department of the Treasury..................  .................  .................  .................  .................  ..................  ..................  .................
                                                          ======================================================================================================================================
      Total, title III, Independent agencies (net).......    26,658,463,000     26,926,568,000     22,571,178,000     23,304,714,000      -3,353,749,000      -3,621,854,000       +733,536,000 
              Appropriations.............................   (26,710,988,000)   (26,926,568,000)   (22,571,178,000)   (23,304,714,000)    (-3,406,274,000)    (-3,621,854,000)     (+733,536,000)
              Rescissions................................      (-45,000,000)  .................  .................  .................       (+45,000,000)  ..................  .................
          (Limitation on administrative expenses)........      (623,746,500)        (2,502,000)       (16,207,000)       (18,606,000)      (-605,140,500)       (+16,104,000)       (+2,399,000)
          (Limitation on direct loans)...................      (775,000,000)      (716,026,000)      (716,026,000)      (716,026,000)       (-58,974,000)  ..................  .................
          (Limitation on corporate funds)................          (901,000)          (560,000)          (560,000)          (560,000)          (-341,000)  ..................  .................
                                                          ======================================================================================================================================
                         TITLE IV                                                                                                                                                               
                                                                                                                                                                                                
                       CORPORATIONS                                                                                                                                                             
                                                                                                                                                                                                
Federal Deposit Insurance Corporation:                                                                                                                                                          
    FSLIC Resolution Fund................................       827,000,000   .................  .................  .................       -827,000,000   ..................  .................
    FDIC affordable housing program......................        15,000,000         15,000,000   .................  .................        -15,000,000         -15,000,000   .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total..............................................       842,000,000         15,000,000   .................  .................       -842,000,000         -15,000,000   .................
Resolution Trust Corporation: Office of Inspector General        32,000,000         11,400,000         11,400,000         11,400,000         -20,600,000   ..................  .................
                                                          --------------------------------------------------------------------------------------------------------------------------------------
      Total, title IV, Corporations......................       874,000,000         26,400,000         11,400,000         11,400,000        -862,600,000         -15,000,000   .................
                                                          ======================================================================================================================================
      Grand total (net)..................................    89,920,161,061     89,899,762,093     79,697,360,000     80,983,986,000      -8,936,175,061      -8,915,776,093     +1,286,626,000 
              Appropriations.............................   (90,260,686,061)   (90,097,881,093)   (79,895,479,000)   (81,182,105,000)    (-9,078,581,061)    (-8,915,776,093)   (+1,286,626,000)
              Rescissions................................     (-333,000,000)     (-198,119,000)     (-198,119,000)     (-198,119,000)      (+134,881,000)  ..................  .................
          (By transfer)..................................      (100,061,000)           (63,000)        (7,061,000)        (7,061,000)       (-93,000,000)        (+6,998,000)  .................
          (Limitation on administrative expenses)........      (623,746,500)        (2,502,000)       (16,207,000)       (18,606,000)      (-605,140,500)       (+16,104,000)       (+2,399,000)
          (Limitation on annual contract authority,                                                                                                                                             
           indefinite)...................................       (-2,000,000)       (-2,000,000)       (-2,000,000)       (-2,000,000)  ..................  ..................  .................
          (Limitation on direct loans)...................    (1,200,523,034)    (1,075,421,120)    (1,075,363,000)    (1,075,363,000)      (-125,160,034)           (-58,120)  .................
          (Limitation on guaranteed loans)...............  (264,939,072,000)  (237,400,000,000)  (236,000,000,000)  (238,900,000,000)   (-26,039,072,000)    (+1,500,000,000)   (+2,900,000,000)
          (Limitation on corporate funds)................      (516,041,000)      (549,626,000)      (526,315,000)      (554,401,000)       (+38,360,000)        (+4,775,000)      (+28,086,000)
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