[House Report 105-175]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-175
_______________________________________________________________________


 
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
             INDEPENDENT AGENCIES APPROPRIATIONS BILL, 1998

                                _______
                                

 July 11, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


    Mr. Lewis of California, from the Committee on Appropriations, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 2158]

    The Committee on Appropriations submits the following 
report in explanation of the accompanying bill 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, 1998, and for other 
purposes.

                        INDEX TO BILL AND REPORT

_______________________________________________________________________


                                                            Page number

                                                            Bill Report
Title I--Department of Veterans Affairs....................     2
                                                                      5
Title II--Department of Housing and Urban Development......    16
                                                                     25
Title III--Independent Agencies............................    41
                                                                     46
        American Battle Monuments Commission...............    41
                                                                     46
        Community Development Financial Institutions.......    42
                                                                     47
        Consumer Product Safety Commission.................    43
                                                                     48
        Corporation for National and Community Service.....    43
                                                                     48
        Court of Veterans Appeals..........................    46
                                                                     50
        Cemeterial Expenses, Army..........................    46
                                                                     50
        Environmental Protection Agency....................    47
                                                                     51
        Office of Science and Technology Policy............    53
                                                                     76
        Council on Environmental Quality and Office of 
            Environmental Quality..........................    54
                                                                     76
        Federal Deposit Insurance Corporation..............    54
                                                                     77
        Federal Emergency Management Agency................    54
                                                                     77
        Consumer Information Center........................    59
                                                                     85
        Office of Consumer Affairs.........................
                                                                     86
        National Aeronautics and Space Administration......    60
                                                                     87
        National Credit Union Administration...............    64
                                                                     93
        National Science Foundation........................    64
                                                                     94
        Neighborhood Reinvestment Corporation..............    66
                                                                    101
        Selective Service System...........................    67
                                                                    102
Title IV--General Provisions...............................    67
                                                                    103

                          Summary of the Bill

    The Committee recommends $91,692,867,000 in new budget 
(obligational) authority for the Departments of Veterans 
Affairs and Housing and Urban Development, and 17 independent 
agencies and offices. This is $9,629,463,558 above the 1997 
appropriations level.
    The following table summarizes the amounts recommended in 
the bill in comparison with the appropriations for fiscal year 
1997 and budget estimates for fiscal year 1998.

                                             SUMMARY OF BUDGET ESTIMATES AND AMOUNTS RECOMMENDED IN THE BILL                                            
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Fiscal year--                                                                    
                                                          --------------------------------------       House          House compared     House compared 
                                                              1997 enacted      1998 estimates                         with enacted      with estimates 
--------------------------------------------------------------------------------------------------------------------------------------------------------
American Battle Monuments Commission.....................        $22,265,000        $23,897,000        $26,897,000        +$4,632,000        +$3,000,000
Cemeterial Expenses, Army................................         11,600,000         11,815,000         11,815,000           +215,000                  0
Community Development Financial Institutions.............         50,000,000        125,000,000        125,000,000        +75,000,000                  0
Consumer Information Center..............................          2,260,000          2,119,000          2,419,000           +159,000           +300,000
Consumer Product Safety Commission.......................         42,500,000         45,000,000         44,000,000         +1,500,000         -1,000,000
Corporation for National and Community Service...........        402,500,000        549,000,000        402,500,000                  0       -146,500,000
Council on Environmental Quality.........................          2,436,000          3,020,000          2,506,000            +70,000           -514,000
Court of Veterans Appeals................................          9,229,000          9,380,000          9,319,000            +90,000            -61,000
Department of Housing and Urban Development..............     16,303,809,442     24,573,255,000     25,123,255,000     +8,819,445,558       +550,000,000
Department of Veterans Affairs...........................     40,086,493,000     40,216,150,000     40,359,576,000       +273,083,000       +143,426,000
Environmental Protection Agency..........................      6,799,393,000      7,645,493,000      7,232,077,000       +432,684,000       -413,416,000
Federal Deposit Insurance Corporation....................                  0       (34,365,000)       (34,365,000)      (+34,365,000)                  0
Federal Emergency Management Agency......................      5,103,556,000        838,558,000      1,088,058,000     -4,015,498,000       +249,500,000
National Aeronautics and Space Administration............     13,709,200,000     13,500,000,000     13,648,000,000        -61,200,000       +148,000,000
National Credit Union Administration.....................          1,000,000                  0                  0         -1,000,000                  0
    (Limitation on direct loans).........................      (600,000,000)      (600,000,000)      (600,000,000)                  0                  0
National Science Foundation..............................      3,270,000,000      3,367,000,000      3,487,000,000       +217,000,000       +120,000,000
Neighborhood Reinvestment Corporation....................         49,900,000         50,000,000         70,000,000        +20,100,000        +20,000,000
Office of Consumer Affairs...............................          1,500,000          1,800,000                  0         -1,500,000         -1,800,000
Office of Science and Technology Policy..................          4,932,000          4,932,000          4,932,000                  0                  0
Selective Service System.................................         22,930,000         23,919,000         23,413,000           +483,000           -506,000
Budget scorekeeping adjustments..........................     -3,832,100,000         32,100,000         32,100,000     +3,864,200,000                  0
                                                          ----------------------------------------------------------------------------------------------
      Total..............................................     82,063,403,442     91,022,438,000     91,692,867,000     +9,629,463,558       +670,429,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

                       Fiscal Year 1998 Rationale

    The fiscal year 1998 recommendations for the VA, HUD, and 
Independent Agencies Appropriations Bill continue down the path 
begun with the fiscal year 1996 enacted Bill and reflect a 
fundamental recognition that significant changes are required 
if the goal of a balanced budget is to be realized.
    Last year the Subcommittee conducted a zero-base review of 
each department, agency, and office under its jurisdiction. The 
goal of that review was to determine exactly what was being 
done by the government, why was it being done, how was it being 
done, and if it was a necessary activity, could it be done 
cheaper. The following report and accompanying Bill reflects an 
ongoing commitment to the basic premise of the work which was 
started in fiscal year 1996. The job was not completed in 
fiscal year 1996, nor will it be completed in fiscal year 1998, 
but a substantial amount of progress has been made toward 
controlling the growth in programs while maintaining essential 
government activity.
    The Subcommittee recognizes that many difficult decisions 
are still before us and that short-term measures such as 
``outlay enhancers'' will do little to address the long-term 
goal of a balanced budget. Therefore, to the extent possible, 
the Subcommittee has avoided the use of ``outlay enhancers'' 
and other mechanisms which merely postpone difficult decisions. 
The reductions contained in the Bill which accompanies this 
report are real reductions which present real challenges for 
various government offices if fundamental change is to be 
realized.

                 Government Performance and Results Act

    The Committee considers the full and effective 
implementation of the Government Performance and Results Act, 
P.L. 103-62, to be a priority for all agencies of government.
    Starting with fiscal year 1999, the Results Act requires 
each agency to ``prepare an annual performance plan covering 
each program activity set forth in the budget of such agency''. 
Specifically, for each program activity the agency is required 
to ``establish performance goals to define the level of 
performance to be achieved by a program activity'' and 
``performance indicators to be used in assessing the relevant 
outputs, service levels, and outcomes of each program 
activity''.
    The Committee takes this requirement of the Results Act 
very seriously and plans to carefully examine agency 
performance goals and measures during the appropriations 
process. As a result, starting with the fiscal year 1999 
appropriations cycle, the Committee will consider agencies 
progress in articulating clear, definitive, and results-
oriented (outcome) goals and measures as it reviews requests 
for appropriations.
    The Committee suggests agencies examine their program 
activities in light of their strategic goals to determine 
whether any changes or realignments would facilitate a more 
accurate and informed presentation of budgetary information. 
Agencies are encouraged to consult with the Committee as they 
consider such revisions prior to finalizing any requests 
pursuant to 31 U.S.C. 1104. The Committee will consider any 
requests with a view toward ensuring that fiscal year 1999 and 
subsequent budget submissions display amounts requested against 
program activity structures for which annual performance goals 
and measures have been established.

                                TITLE I

                     DEPARTMENT OF VETERANS AFFAIRS

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................   $40,359,576,000
Fiscal year 1997 appropriation........................    40,086,493,000
Fiscal year 1998 budget request.......................    40,216,150,000
Comparison with fiscal year 1997 appropriation........      +273,083,000
Comparison with fiscal year 1998 budget request.......      +143,426,000
                                                                        

    The Department of Veterans Affairs is the third largest 
Federal agency in terms of employment with an average 
employment of approximately 210,000. It administers benefits 
for 26,000,000 veterans, and 44,000,000 family members of 
living veterans and survivors of deceased veterans. Thus, 
70,000,000 people, comprising about 27 percent of the total 
population of the United States, are potential recipients of 
veterans benefits provided by the Federal Government.
    A total of $40,355,476,000 in new budget authority is 
recommended by the Committee for the Department of Veterans 
Affairs programs in fiscal year 1998. The funds recommended 
provide for compensation payments to 2,585,800 veterans and 
survivors of deceased veterans with service-connected 
disabilities; pension payments for 711,100 non-service-
connected disabled veterans, widows and children in need of 
financial assistance; educational training and vocational 
assistance to 426,630 veterans, servicepersons, and reservists, 
and 47,500 eligible dependents of deceased veterans or 
seriously disabled veterans; housing credit assistance in the 
form of 280,000 guaranteed loans provided to veterans and 
servicepersons; administration or supervision of life insurance 
programs with 4,946,144 policies for veterans and active duty 
servicepersons providing coverage of $511,597,000,000; 
inpatient care and treatment of beneficiaries in 173 hospitals; 
40 domiciliaries, 135 nursing homes and 448 outpatient clinics 
which includes independent, satellite, community-based, and 
rural outreach clinics involving 33,213,000 visits; and the 
administration of the National Cemetery System for burial of 
eligible veterans, servicepersons and their survivors.

                    Veterans Benefits Administration

                       compensation and pensions

                     (including transfer of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................   $19,932,997,000
Fiscal year 1997 appropriation........................    19,599,259,000
Fiscal year 1998 budget request.......................    19,932,997,000
Comparison with fiscal year 1997 appropriation........      +333,738,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    This appropriation provides funds for service-connected 
compensation payments to an estimated 2,585,800 beneficiaries 
and pension payments to another 711,100 beneficiaries with non-
service-connected disabilities. The average cost per 
compensation case in 1998 is estimated at $6,417, and pension 
payments are projected at a unit cost of $4,474. The estimated 
caseload and cost by program for 1997 and 1998 are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                1997               1998            Difference   
----------------------------------------------------------------------------------------------------------------
Caseload:                                                                                                       
    Compensation:                                                                                               
        Veterans.......................................          2,256,672          2,278,900            +22,228
        Survivors......................................            305,188            304,900               -288
        Children.......................................                  0              2,000             +2,000
        Clothing allowance (non-add)...................           (74,540)           (74,300)             (-240)
    Pensions:                                                                                                   
        Veterans.......................................            409,309            407,600             -1,709
        Survivors......................................            319,234            303,500            -15,734
        Minimum income for widows (non-add)............              (800)              (793)               (-7)
        Vocational training (non-add)..................              (110)               (85)              (-25)
    Burial allowances..................................             97,800             97,700               -100
                                                        ========================================================
Funds:                                                                                                          
    Compensation:                                                                                               
        Veterans.......................................    $13,016,590,000    $13,259,558,000      +$242,968,000
        Survivors......................................      3,240,100,000      3,273,892,000        +33,792,000
        Children.......................................                  0         21,100,000        +21,100,000
        Clothing allowance.............................         38,760,000         38,471,000           -289,000
        Payment to GOE (Public Laws 101-508 and 102-                                                            
         568)..........................................          2,198,000          2,083,000           -115,000
        Medical exams pilot program....................          7,574,000         15,905,000         +8,331,000
    Pensions:                                                                                                   
        Veterans.......................................      2,354,276,000      2,401,380,000        +47,104,000
        Survivors......................................        788,380,000        774,453,000        -13,927,000
        Minimum income for widows......................          1,389,000          5,657,000         +4,268,000
    Vocational training................................            300,000            236,000            -64,000
    Payment to GOE (Public Laws 101-508, 102-568, and                                                           
     103-446)..........................................         10,078,000          9,201,000           -877,000
    Payment to medical care (Public Laws 101-508 and                                                            
     102-568)..........................................         14,241,000         15,096,000           +855,000
    Payment to medical facilities......................          2,254,000          2,322,000            +68,000
    Burial benefits....................................        115,436,000        117,534,000         +2,098,000
    Other assistance...................................          1,764,000          1,766,000             +2,000
    Contingency........................................         15,228,000                  0        -15,228,000
    Unobligated balance and transfers..................         -9,309,000         -5,657,000         +3,652,000
                                                        --------------------------------------------------------
      Total appropriation..............................     19,599,259,000     19,932,997,000       +333,738,000
----------------------------------------------------------------------------------------------------------------

    The Administration has again proposed dividing the 
compensation and pensions appropriation into three separate 
accounts: compensation, pensions, and burial benefits and 
miscellaneous assistance. The Committee has again disapproved 
this proposal and recommends a single compensation and pensions 
appropriation in fiscal year 1998.
    The 1998 pension budget request includes funds for a 
proposed cost-of-living increase of 2.7 percent. Legislation 
will be proposed to provide a 2.7 percent increase for all 
compensation beneficiaries. The estimated cost of this 
compensation adjustment is $330,700,000.
    For fiscal year 1998, the Committee is recommending the 
budget estimate of $19,932,997,000 for compensation and 
pensions. The bill also includes requested language reimbursing 
$11,284,000 to the general operating expenses account and 
$15,096,000 to the medical care account for administrative 
expenses of implementing cost saving provisions required by the 
Omnibus Budget Reconciliation Act of 1990, Public Law 101-508, 
the Veterans' Benefits Act of 1992, Public Law 102-568, and the 
Veterans' Benefits Improvements Act of 1994, Public Law 103-
446. These cost savings provisions include verifying pension 
income against Internal Revenue Service and Social Security 
Administration (SSA) data; establishing a match with the SSA to 
obtain verification of Social Security numbers; and the $90 
monthly VA pension cap for Medicaid-eligible single veterans 
and surviving spouses alone in Medicaid-covered nursing homes. 
Also, the bill includes requested language permitting this 
appropriation to reimburse such sums as may be necessary to the 
medical facilities revolving fund ($2,322,000 estimated in 
fiscal year 1998) 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.
    The Administration has proposed language that would provide 
indefinite 1998 supplemental appropriations for compensation 
and pension payments. The Committee believes the current 
funding procedures are adequate and has not included the 
requested language in the bill. The Committee recognizes that 
additional funding may be necessary when the final disposition 
of proposed legislation is known.

                         READJUSTMENT BENEFITS

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $1,366,000,000
Fiscal year 1997 appropriation........................     1,377,000,000
Fiscal year 1998 budget request.......................     1,366,000,000
Comparison with fiscal year 1997 appropriation........       -11,000,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    This 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. Eligibility to receive this assistance began in 1987. 
Basic benefits are funded through appropriations made to the 
readjustment benefits appropriation and transfers from the 
Department of Defense. Supplemental benefits are also provided 
to certain veterans through transfers from the Department of 
Defense. This law also provides education assistance to certain 
members of the Selected Reserve and is funded through transfers 
from the Departments of Defense and Transportation. In 
addition, certain disabled veterans are provided with 
vocational rehabilitation, specially adapted housing grants, 
and automobile grants with approved adaptive equipment. This 
account also finances educational assistance allowances for 
eligible dependents of those veterans who died from service-
connected causes or have a total and permanent service-
connected disability as well as dependents of servicepersons 
who were captured or missing-in-action.
    The Committee recommends the budget estimate of 
$1,366,000,000 for readjustment benefits in fiscal year 1998. 
The estimated number of trainees and costs by program for 1997 
and 1998 are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                1997               1998            Difference   
----------------------------------------------------------------------------------------------------------------
Number of trainees:                                                                                             
    Education and training: dependents.................             43,952             47,500             +3,548
    All-Volunteer Force educational assistance:                                                                 
        Veterans and servicepersons....................            299,560            291,190             -8,370
        Reservists.....................................             77,350             80,300             +2,950
    Vocational rehabilitation..........................             56,265             55,140             -1,125
                                                        --------------------------------------------------------
      Total............................................            477,127            474,130             -2,997
                                                        ========================================================
Funds:                                                                                                          
    Education and training: dependents.................       $108,900,000       $117,539,000        +$8,639,000
    All-Volunteer Force educational assistance:                                                                 
        Veterans and servicepersons....................        742,806,000        769,093,000        +26,287,000
        Reservists.....................................         97,800,000         99,119,000         +1,319,000
    Vocational rehabilitation..........................        416,400,000        419,175,000         +2,775,000
    Housing grants.....................................         16,100,000         16,100,000                  0
    Automobiles and other conveyances..................          4,700,000          4,700,000                  0
    Adaptive equipment.................................         22,900,000         23,100,000           +200,000
    Work-study.........................................         29,900,000         31,493,000         +1,593,000
    Payment to States..................................         13,000,000         13,000,000                  0
    Unobligated balance and other adjustments..........        -75,506,000       -127,319,000        -51,813,000
                                                        --------------------------------------------------------
      Total appropriation..............................      1,377,000,000      1,366,000,000        -11,000,000
----------------------------------------------------------------------------------------------------------------

                   VETERANS INSURANCE AND INDEMNITIES

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $51,360,000
Fiscal year 1997 appropriation........................        38,970,000
Fiscal year 1998 budget request.......................        51,360,000
Comparison with fiscal year 1997 appropriation........       +12,390,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    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 (NSLI), applicable to certain World War II 
veterans; servicemen's indemnities, applicable to Korean 
conflict veterans; and veterans mortgage life insurance, 
applicable to individuals who have received a grant for 
specially adapted housing.
    The budget estimate of $51,360,000 for veterans insurance 
and indemnities in fiscal year 1998 is included in the bill. 
The amount provided will enable VA to transfer more than 
$42,670,000 to the service-disabled veterans insurance fund, 
transfer $8,530,000 in payments for the 3,590 policies under 
the veterans mortgage life insurance program, as well as 
provide payments for the 1,260 policies under a small NSLI 
program called ``H.'' These policies are identified under the 
veterans insurance and indemnity appropriation since they 
provide insurance to service-disabled veterans unable to 
qualify under basic NSLI.

         veterans housing benefit program fund Program Account

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                                                   Limitation on  Administrative
                                                                 Program account   direct loans      expenses   
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation................................     $192,447,000        $300,000    $160,437,000
Fiscal year 1997 appropriation \1\.............................      364,640,000         300,000     139,116,000
Fiscal year 1998 budget request................................      192,447,000         300,000     160,437,000
Comparison with fiscal year 1997 appropriation.................     -172,193,000               0     +21,321,000
Comparison with fiscal year 1998 budget request................                0               0               0
----------------------------------------------------------------------------------------------------------------
\1\ Provided in three separate accounts in 1997--guaranty and indemnity program account, loan guaranty program  
  account, and direct loan program account.                                                                     

    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. This appropriation 
provides for all costs, with the exception of the native 
American veteran housing loan program, of VA's direct and 
guaranteed loan programs. This account represents a new fund 
established this year to consolidate the guaranty and indemnity 
fund, the loan guaranty fund, and the direct loan fund. This 
consolidation sums eleven accounts into four accounts under the 
new veterans housing benefit program fund to achieve 
administrative efficiencies. All appropriations and income 
formerly received from the old accounts will be deposited in 
this new fund. No program or scoring changes result from this 
action. The Federal Credit Reform Act of 1990 requires 
budgetary resources to be available prior to incurring a direct 
loan obligation or a loan guarantee commitment. In addition, 
the Act requires all administrative expenses of a direct or 
guaranteed loan program to be funded through a program account.
    The Committee recommends the budget requests of such sums 
as may be necessary (estimated to be $192,447,000) for funding 
subsidy payments, $300,000 for the limitation on direct loans, 
and $160,437,000 to pay administrative expenses. The 
appropriation for administrative expenses may be transferred to 
and merged with the general operating expenses account.

                  education loan fund program account

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                                      Program      Limitation on  Administrative
                                                                      account      direct loans      expenses   
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation.................................          $1,000          $3,000        $200,000
Fiscal year 1997 appropriation..................................           1,000           3,000         195,000
Fiscal year 1998 budget request.................................           1,000           3,000         200,000
Comparison with fiscal year 1997 appropriation..................               0               0          +5,000
Comparison with fiscal year 1998 budget request.................               0               0               0
----------------------------------------------------------------------------------------------------------------

    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 Federal Credit Reform Act of 1990 requires 
budgetary resources to be available prior to incurring a direct 
loan obligation. In addition, the Act requires all 
administrative expenses of a direct loan program to be funded 
through a program account.
    The bill includes the budget requests of $1,000 for program 
costs, $3,000 as the limitation on direct loans, and $200,000 
for administrative expenses. The appropriation for 
administrative expenses may be transferred to and merged with 
the general operating expenses account.

            VOCATIONAL REHABILITATION LOANS PROGRAM ACCOUNT

                     (INCLUDING TRANSFER OF FUNDS)

----------------------------------------------------------------------------------------------------------------
                                                                      Program      Limitation on  Administrative
                                                                      account      direct loans      expenses   
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation.................................         $44,000      $2,278,000        $388,000
Fiscal year 1997 appropriation..................................          49,000       2,822,000         377,000
Fiscal year 1998 budget request.................................          44,000       2,278,000         388,000
Comparison with fiscal year 1997 appropriation..................          -5,000        -544,000         +11,000
Comparison with fiscal year 1998 budget request.................               0               0               0
----------------------------------------------------------------------------------------------------------------

    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 $815 (based 
on indexed chapter 31 subsistence allowance rate) are available 
to service-connected disabled veterans enrolled in vocational 
rehabilitation programs 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. The 
Federal Credit Reform Act of 1990 requires budgetary resources 
to be available prior to incurring a direct loan obligation. In 
addition, the Act requires all administrative expenses of a 
direct loan program to be funded through a program account.
    The bill includes the budget requests of $44,000 for 
program costs and $388,000 for administrative expenses. The 
administrative expenses may be transferred to and merged with 
the general operating expenses account. In addition, the bill 
includes requested language limiting program direct loans to 
$2,278,000. It is estimated that VA will make 4,952 loans in 
fiscal year 1998, with an average amount of $460.

          NATIVE AMERICAN VETERAN HOUSING LOAN PROGRAM ACCOUNT

                     (INCLUDING TRANSFER OF FUNDS)

                                                                        
                                                                        
                                                                        
Administrative expenses:                                                
    Fiscal year 1998 recommendation...................          $515,000
    Fiscal year 1997 appropriation....................           205,000
    Fiscal year 1998 budget request...................           515,000
    Comparison with fiscal year 1997 appropriation....          +310,000
    Comparison with fiscal year 1998 budget request...                 0
                                                                        

    This program is testing the feasibility of authorizing VA 
to make direct home loans to native American veterans who live 
on U.S. trust land. This program is a five-year pilot program 
which began in 1993. The bill includes the budget request of 
$515,000 for administrative expenses, which may be transferred 
to and merged with the general operating expenses account.

                     Veterans Health Administration

                              MEDICAL CARE

                     (INCLUDING TRANSFER OF FUNDS)

----------------------------------------------------------------------------------------------------------------
                                                                               Collections                      
                                                           Appropriation       transferred      Total available 
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation........................    $16,958,846,000       $604,000,000    $17,562,846,000
Fiscal year 1997 appropriation.........................     17,013,447,000                  0     17,013,447,000
Fiscal year 1998 budget request........................     16,958,846,000        604,000,000     17,562,846,000
Comparison with fiscal year 1997 appropriation.........        -54,601,000       +604,000,000       +549,399,000
Comparison with fiscal year 1998 budget request........                  0                  0                  0
----------------------------------------------------------------------------------------------------------------

    This appropriation provides for medical care and treatment 
of eligible beneficiaries in VA hospitals, nursing homes, 
domiciliaries and outpatient facilities; contract hospitals; 
State domiciliaries, nursing homes and hospitals; contract 
community nursing homes; and outpatient programs on a fee 
basis. Hospital and outpatient care are also provided by the 
private sector for certain dependents and survivors of veterans 
under the civilian health and medical programs for the 
Department of Veterans Affairs. Funds are also used to train 
medical residents, interns, and other professional, paramedical 
and administrative personnel in health-science fields to 
support VA's medical programs.
    The VA is requesting an appropriation of $16,958,846,000 
for medical care in fiscal year 1998, a decrease of $54,601,000 
below the current year appropriation. However, this comparison 
of the budget request and the fiscal year 1997 appropriation of 
$17,013,447,000 does not reflect two adjustments with the 
general operating expenses (GOE) account. In calculating the 
1998 medical care request, the 1997 level was (1) increased by 
$13,399,000 (with a corresponding reduction to GOE) to reflect 
medical care charges that will be paid directly to the 
Franchise Fund for services provided by the Austin Finance 
Center, and (2) decreased by $68,000,000 (with a corresponding 
increase to GOE) to fund compensation and pension exams 
directly from Veterans Benefits Administration resources. Thus, 
the budget request is really the same amount as the 
appropriation provided in fiscal year 1997.
    In addition, the budget includes a legislative proposal to 
permit the VA to retain the medical care cost recovery program 
third party and user fee collections as reimbursements to 
medical care starting on October 1, 1997. Under existing law, 
these collections, except for administrative costs of 
collecting the receipts, are deposited in the Treasury. The 
original estimate of collections in 1998 totaled $590,918,000, 
of which $123,321,000 would be used to cover the cost of 
collections and $467,597,000 would be available for veterans' 
healthcare services. In the recent Bipartisan Budget Agreement 
and the 1998 Budget Resolution, the estimate of those 
collections became $604,000,000. A budget amendment (House 
Document 105-95) requests that language be carried in the 
medical care appropriation, contingent on the enactment of 
authorizing legislation establishing a medical collections fund 
into which such fees would be deposited, requiring all amounts 
recovered or collected to be made available for administrative 
costs of debt collection and to cover the full range of VA 
medical care services.
    The bill includes the total request of $17,562,846,000 for 
medical care in fiscal year 1998--an appropriation of 
$16,958,846,000 and collections of $604,000,000. This amount is 
an increase of $549,399,000 above the 1997 appropriation. The 
Committee notes that this increase in funds is slightly greater 
than the increase provided in fiscal year 1997. The bill also 
includes the requested language that, once the authorization is 
enacted, will allow the transfer of medical collections to the 
medical care account. In addition, $15,096,000 is to be 
transferred from the compensation and pensions account for 
administrative expenses of implementing cost saving provisions 
required by the Omnibus Budget Reconciliation Act of 1990, and 
the Veterans' Benefits Act of 1992.
    Language has been included in the bill delaying the 
availability of $565,000,000 of funds in the equipment and land 
and structures object classifications until August 1, 1998, 
instead of requested language delaying 8.3 percent of the 
appropriation until September 30, 1998. The recommended 
language is similar to that carried in previous appropriations 
acts.
    The Committee recognizes that veterans in East Central 
Florida are, in many instances, required to travel considerable 
distances to receive VA hospital care. The VA has developed 
plans to contract with local hospitals to meet veterans' needs 
for emergency inpatient care. However, the Committee believes 
it is important that veterans who are in need of nonemergent 
inpatient care also be able to receive that care in their own 
communities. To address this matter, the bill includes language 
earmarking not to exceed $5,000,000 for a study by the VA on 
the cost-effectiveness of contracting with local hospitals in 
East Central Florida to meet veterans' non-emergent inpatient 
health care needs. In designing this one-year pilot program, 
the funds for which are to be derived from resources made 
available to the local network, the VA shall ensure that there 
is a reasonable balance in the allocation of funds throughout 
the network. The VA shall report back to the Congress on plans 
to carry out this requirement and on the results of this study.
    Concerns have been expressed that the estimated amount of 
collections from third party insurers and various copayments 
will not materialize. The VA estimates that collections will 
total more than $3,700,000,000 in fiscal years 1998-2002, with 
approximately $600,000,000 assumed for 1998. Last year, 
collections totaled $557,000,000. However, the accuracy of each 
year's estimated collection is unknown. Under current law, VA 
medical centers have lacked a real incentive to increase 
collections as the funds, other than those necessary for the 
administrative cost of collecting the receipts, are returned to 
the Treasury. The proposed legislation will permit medical 
centers to retain all collections and should provide incentives 
to increase collections. Additional funding for health care 
services is possible if medical centers reduce the 
administrative costs of collections which currently consumes 
approximately 20 percent of the total. The Committee expects 
the VA to develop allocation policies that will increase 
incentives and intends to review the entire subject of 
collections and incentives on a yearly basis.
    Legislation has been proposed to permit Medicare 
reimbursements to VA hospitals for care provided to certain 
Medicare-eligible veterans over the age of 65. This concept, 
often referred to as Medicare subvention, would provide an 
estimated $1,093,000,000 in fiscal years 1999-2002. The 
ultimate disposition of this legislative proposal is unknown, 
but it does not impact fiscal year 1998 and reimbursements in 
fiscal year 1999 are estimated to be only $5,000,000.
    The budget estimates that 3,071,914 patients will receive 
health care treatment in 1998, an increase of 134,914 above the 
number treated in 1996 and estimated for 1997. However, 
employment is estimated to decrease by 6,153 in 1997 and 1,683 
in 1998. Treating a larger number of patients while employment 
decreases is only possible through various reengineering and 
reorganization efforts to increase efficiency and 
effectiveness. The VA should continue its transition from an 
acute-care, hospital-based system to one that focuses on 
primary care in an outpatient setting. Consolidating and 
closing underutilized services will permit a more effective and 
efficient use of resources. These efforts will improve care for 
veterans and should help in achieving the goals of a 30 percent 
reduction in per patient cost and a 20 percent increase in the 
number of veterans treated over the next five years. The 
Committee continues to support these efforts to fundamentally 
change the system.
    Quality service to veterans is a commitment that requires 
continual attention. Requiring veterans to wait several hours 
for scheduled appointments is not providing quality service. 
Previous reports have indicated that complaints were heard 
where veteran patients and their families were treated in an 
insensitive manner by VA staff. The subjects of these 
complaints, which are still being heard, cannot be tolerated. 
Veterans and their families should receive the best, most 
courteous, and timely medical treatment possible. Top 
management needs to ensure that local management continues to 
promptly address all such problems.
    The Committee is concerned with continuing sexual 
harassment problems in the VA. There have been disturbing 
accounts of alleged sexual harassment and retribution by top 
management in the field. It appeared that these complaints were 
addressed when similar concerns were raised four years ago. 
Clearly, the current system is not working, especially as it 
applies to the top levels of management at medical centers. The 
VA needs to reexamine its procedures with a goal of more 
diligence. The complaint process needs to be removed from local 
control, at least as it applies to management.
    Currently, medical care employment is approximately 
185,000, more than 2,000 below the estimated 1998 level of 
187,317. As such, buyout authority to reduce employment so as 
to avoid a reduction-in-force for newer employees is not 
required. The Committee expects that any use of buyout 
authority in the fall of 1997 will be targeted to those 
individuals in positions that will be eliminated in future 
organizations.
    A community based outpatient clinic is currently being 
established in conjunction with a Vet Center in Williamsport, 
Pennsylvania. It is expected to be operational by the end of 
July 1997. The VA is to utilize $400,000 to expand activities 
at this community based outpatient clinic from the planned 
part-time service to a five-day-a-week primary medical care 
professional services operation.
    The ambulatory care/environmental improvements construction 
project at the Wilkes-Barre VA Medical Center was funded in 
fiscal year 1997. The Committee does not expect that the 
hospital will absorb activation costs of this project from 
within medical center funds. A similar situation exists 
regarding activation costs for the ambulatory care addition 
project at the Carl T. Hayden VA Medical Center. The Committee 
does not expect that the hospital will absorb activation costs 
of this project from within medical center funds.
    The Committee notes that 40 percent of the nation's 
veterans suffer from mental disorders and 60 percent of the 
nation's leading causes of morbidity and mortality are 
behavioral in origin. Therefore, the Committee applauds the 
Veterans Health Administration decision in recent years to 
expand the psychology internship program to address the 
behavioral and mental health needs of veterans and urges the 
VHA to continue to strengthen the psychology training 
(predoctoral and postdoctoral) programs. This will also have 
the benefit of reducing the need for hospital-based services.
    The Committee is aware of the collaborative work that has 
been taking place with the Office of the Chief Financial 
Officer of the Veterans Health Administration (VHA), university 
health management educators and leading private sector 
executives to improve the management of VHA facilities. The use 
of outside experts in health administration is a critically 
important component in the promotion of systemic improvements. 
These efforts hold great promise for bringing a new era of 
cost-effectiveness and efficiency to the VHA. Because of the 
Committee's strong interest in efficient management and quality 
service for veterans, the VA is urged to support the 
continuation and expansion of this relationship.
    The Committee supports the Department of Veterans Affairs' 
efforts to realize efficiencies within the Veteran Health 
Administration's Veterans Integrated Service Networks (VISN) 
plan. However, the Committee is concerned that the Veterans 
Equitable Resource Allocation (VERA) system developed to 
distribute veterans medical care funds to individual VISNs 
failed to adequately account for two important factors: (1) the 
disproportionate number of special needs veterans in 
northeastern states, and (2) the unknown impact of eligibility 
reform on the veteran population being served in each VISN. The 
Committee is also concerned with the quality and accessibility 
of care that veterans are receiving in these regions. To 
address these concerns, the General Accounting Office is 
requested to study and report on the effects of the VISN and 
VERA process and its implementation. The report should address 
the quality of care being received by veterans, with attention 
given to VISN 3 (Bronx) and VISN 4 (Pittsburgh). The Committee 
expects that the GAO report will be completed within four 
months. Therefore, until the Committee receives the requested 
GAO report on VERA and the impact of eligibility reform on 
individual VISNs is known, the Secretary is directed to fund 
all VISNs at least at the fiscal year 1996 level. The Committee 
understands this directive will impact VISNs 1, 2, 3, 12, and 
14.
    Alcoholism is one of the most costly and devastating 
problems for veterans. The Committee understands that there has 
been extensive dialogue between the National Institute for 
Alcohol Abuse and Alcoholism (NIAAA) and the VA, and supports 
continued discussions and collaboration between these agencies. 
This effort will build on the strengths of both NIAAA and the 
VA, and will extend the outstanding services of the VA's 
distinguished clinical trials program. The Committee encourages 
joint clinical trials with alcohol research centers 
encompassing NIAAA, the VA, and academic medical centers. These 
projects will capitalize on new research findings that may 
yield important new treatments for alcoholism and related-
diseases.
    The VA has established dozens of community based outpatient 
clinics in the past two years, a number in rural areas. The VA 
is encouraged to establish an outpatient clinic in Gainesville, 
Georgia.
    The Committee is concerned about the prevalence of 
hepatitis C among veterans, and the potential impact of liver 
disease and liver transplants on VA services and facilities. 
The Department is encouraged to study the feasibility of 
determining the rate of hepatitis C infection among veterans 
receiving health services and establish a protocol for 
screening new entrants to the VA health care system and other 
groups at high risk for hepatitis C. The Committee further 
encourages the Department to pay special attention to rates of 
hepatitis C among veterans of Vietnam and more recent 
engagements, and to coordinate with the Department of Defense 
on any approaches for screening and providing treatment for 
hepatitis C infection among active-duty military.
    The Committee is concerned with the plans for the 
integration of the VA medical centers at Tuskegee and 
Montgomery, Alabama. Critical information necessary to clearly 
understand the details of the integration is not available. 
Also, allegations of mismanagement require a complete 
investigation. The VA has halted further integration of these 
two facilities until all concerns have been adequately 
addressed. The VA should not proceed with further integration 
activities until a detailed plan of the integration has been 
submitted to the Congress, the General Accounting Office has 
had 60 days to issue a report reviewing the plan, and 45 days 
has lapsed after the GAO report is issued. The Committee 
believes that because of the unusual circumstances surrounding 
this matter the aforementioned process is necessary to best 
serve the interest of veterans and taxpayers.
    The Committee remains supportive of VA's effort to 
reorganize its health care delivery system with the goal of 
improved management, better quality service, and cost 
effectiveness and efficiency in a truly integrated health care 
delivery system. A sophisticated medical information 
infrastructure is at the heart of an effective reorganization. 
Current VHA information systems may not be sufficient to 
address the challenges ahead. To assist in this regard, the VA 
is encouraged to look into establishing a partnership with a 
private, not-for-profit, highly integrated health care system. 
Such a partnership would be with an organization that has 
established itself as a leader in combining operational data 
into information. The Committee understands an innovative 
proposal is underway in Detroit, Michigan which could provide a 
model through the development of a population and resource 
management information network. Such a multi-dimensional 
database could serve as a testbed for health care specific 
technologies for VHA's newly formed integrated services 
networks.
    GAO recently found that DOD and VA did not have a 
systematic approach to monitoring the health of Gulf War 
veterans after their initial examination and consequently could 
not provide information on the effectiveness of the treatment 
they had received or whether they were better or worse than 
when first examined. Consistent with the GAO's findings and 
recommendations, the Secretaries of DOD and VA should develop 
and implement a plan to provide: (1) data on the effectiveness 
of the treatments received by these veterans; and (2) 
longitudinal information on the health of veterans who reported 
illnesses after the war in order that efforts may be focused on 
resolving those conditions that have proven intractable or 
resistant to current therapies. The application of validated 
severity indices may be appropriate, but the Departments may 
suggest other methods. The Departments' plans may make 
appropriate use of statistical sampling and limit initial focus 
to individuals who experienced illness during the first years 
of registry operation or to certain types of therapies. To the 
extent that current diagnoses do not fully represent the full 
range of ailments veterans have experienced, the Departments 
should incorporate data on the persistence of Gulf War 
veterans' principal health complaints in addition to the status 
of their diagnosed illnesses. The Departments should consider 
whether it is beneficial to employ an outside contractor to 
collect valid and reliable data on these matters and make 
efforts to maximize the sensitivity of these measures to 
problems in delivery of care.

                    medical and prosthetic research

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $267,000,000
Fiscal year 1997 appropriation........................       262,000,000
Fiscal year 1998 budget request.......................       234,374,000
Comparison with fiscal year 1997 appropriation........       +5,000,0000
Comparison with fiscal year 1998 budget request.......       +32,626,000
                                                                        

    This account includes medical, rehabilitative and health 
services research. Medical research is an important aspect of 
VA programs, providing complete medical and hospital service 
for veterans. The prosthetic research program is also essential 
in the development and testing of prosthetic, orthopedic and 
sensory aids for the purpose of improving the care and 
rehabilitation of eligible disabled veterans, including 
amputees, paraplegics and the blind. The health service 
research program provides unique opportunities to improve the 
effectiveness and efficiency of the health care delivery 
system. In addition, budgetary resources from a number of areas 
including appropriations from the medical care account; 
reimbursements from the Department of Defense; and grants from 
the National Institutes of Health, private proprietary sources, 
and voluntary agencies provide support for VA's researchers.
    The Committee recommends $267,000,000 for medical and 
prosthetic research in fiscal year 1998, an increase of 
$32,626,000 above the budget request. This amount, together 
with an estimated $662,416,000 from other sources will provide 
for a total research program of $929,416,000.
    The bill includes language earmarking $20,000,000 of the 
funds made available for medical research relating to Gulf War 
illnesses afflicting Persian Gulf veterans. This funding, 
together with funding provided by the Department of Defense and 
Health and Human Services, will provide for a more adequate 
Federal research effort on Persian Gulf War illnesses.
    Last year's report strongly suggested that funding for 
research into Parkinson's disease be increased. A recent joint 
meeting between representatives of the VA and the Research 
Advisory Group on Parkinson's Disease and Related Disorders, a 
distinguished panel of experts from across the country, 
revealed additional areas of interest for joint research 
efforts. The Committee believes that the VA can expand its 
research on this debilitating disease and directs that 
$10,000,000 of medical and prosthetic research funds be 
utilized in this effort.
    The Research Realignment Advisory Committee recommended the 
revitalization of the career development program. The VA 
indicates that those revitalization plans would be delayed at 
the funding level proposed in the 1998 budget request. The VA 
is urged to utilize part of the funds provided above the budget 
request for career development efforts as recommended by the 
Research Realignment Advisory Committee.
    In last year's House report, the Committee recommended that 
the VA establish a partnership with a private, independent, 
not-for-profit, research and treatment center that could serve 
as a Center for Excellence Network in the diagnosis, detection, 
and treatment of cancer utilizing radioimmunodetection and 
radioimmunotherapy technology. The Committee urges the VA to 
continue its effort and finalize this collaborative research 
effort no later than January 1, 1998.
    The Committee is encouraged by VA's decision to increase 
funding available for prostate cancer research. The Department 
estimated that it spent $9,200,000 in fiscal year 1996, and 
that it will spend $12,800,000 in fiscal years 1997 and 1998 on 
this major health problem for aging males. Because prostate 
cancer is one of the leading causes of death among veterans, 
the VA is encouraged to increase funding from within available 
funds for prostate cancer research.
    The Committee is aware of the successful use of proton 
therapy in treating prostate cancer and other life-threatening 
diseases. Because of the heightened incidence of this cancer in 
the veterans' population, the Department is urged to explore 
research approaches using proton therapy as a treatment option.
    The VA is planning a major clinical research trial, 
Specialized Medication and Revascularization Therapy (SMART), 
comparing long-term outcomes in coronary heart disease 
patients. First year VA funding of this tripartite effort--VA, 
Canada, and other U.S. industrial sources--is estimated to be 
$3,700,000. The Committee supports the SMART Trial.
    In 1996, VA medical centers admitted 55,311 veterans for 
inpatient hospital care because of renal and associated 
disorders. Fifty-nine percent of these patients were between 
the ages of 65 and 84. The Committee supports additional 
biomedical research into the causes of and cures for renal 
failure as a way to reduce the cost of this health care.
    Previous Committee reports have indicated support for 
health service research. The Committee supports at least the 
current funding level for this important research effort.
    Previous reports have indicated support for the 
establishment and development of a Department of Veterans 
Affairs medical research service minority recruitment 
initiative in collaboration with minority health professions 
institutions. The Committee strongly supports the continued 
development of this program.
    Concern has been expressed that at the requested 1998 
medical research level, the VA would not continue funding for 
all of the Environmental Hazards Research Centers. The VA 
indicates that it would continue funding the Environmental 
Hazards Research Center at the Louisville VA Medical Center at 
the recommended medical and prosthetic research funding level. 
The Committee supports continued funding for this important 
research effort.
    The Committee is concerned that VA plans to reduce the 
number of middle managers is having an inadvertent, detrimental 
impact on its research program. Physicians have been exempted 
from this reduction effort. The VA is urged to consider 
exempting Ph.D. research scientists from potential reductions 
in the number of GS 14/15 positions.
    The Committee is aware of the Research Realignment Advisory 
Committee report which recommends the creation of designated 
research areas (DRAs) as an organizing principle for VA 
research. While the Committee finds that VA research is 
meritorious, peer reviewed, and critical to the VA patient 
population, it is difficult to understand research priorities 
due to the lack of a structured presentation of the program. 
The 1999 medical and prosthetic research budget justifications 
should include tables showing the distribution of funds among 
the various DRAs.

      medical administration and miscellaneous operating expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $60,160,000
Fiscal year 1997 appropriation........................        61,207,000
Fiscal year 1998 budget request.......................        60,160,000
Comparison with fiscal year 1997 appropriation........        -1,047,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    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.
    The Committee recommends the budget request of $60,160,000 
for medical administration and miscellaneous operating expenses 
in fiscal year 1998.

                   general post fund, national homes

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                                      Program      Limitation on  Administrative
                                                                      account      direct loans      expenses   
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation.................................          $7,000         $70,000         $54,000
Fiscal year 1997 appropriation..................................           7,000          70,000          54,000
Fiscal year 1998 budget request.................................           7,000          70,000          54,000
Comparison with fiscal year 1997 appropriation..................               0               0               0
Comparison with fiscal year 1998 budget request.................               0               0               0
----------------------------------------------------------------------------------------------------------------

    This program provides loans to nonprofit organizations to 
assist them in leasing housing units exclusively for use as a 
transitional group residence for veterans who are in (or have 
recently been in) a program for the treatment of substance 
abuse. The amount of the loan cannot exceed $4,500 for any 
single residential unit and each loan must be repaid within two 
years through monthly installments. The amount of loans 
outstanding at any time may not exceed $100,000.
    The bill includes the budget requests of $7,000 for the 
estimated cost of providing loans for this program, $54,000 for 
associated administrative expenses, and a $70,000 limitation on 
direct loans. The administrative expenses may be transferred to 
and merged with the general post fund.

                      Departmental Administration

                       general operating expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $853,385,000
Fiscal year 1997 appropriation........................       827,584,000
Fiscal year 1998 budget request.......................       846,385,000
Comparison with fiscal year 1997 appropriation........       +25,801,000
Comparison with fiscal year 1998 budget request.......        +7,000,000
                                                                        

    The general operating expenses appropriation provides for 
the administration of non-medical veterans benefits through the 
Veterans Benefits Administration and top management direction 
and support. The Federal Credit Reform Act of 1990 changed the 
accounting of Federal credit programs and required that all 
administrative costs associated with such programs be included 
within the respective credit accounts. Beginning in fiscal year 
1992, costs incurred by housing, education, and vocational 
rehabilitation programs for administration of these credit 
programs are reimbursed by those accounts. The bill includes 
$161,540,000 in other accounts for these credit programs. In 
addition, $11,284,000 is transferred from the compensation and 
pensions account for administrative costs of implementing cost 
saving provisions required by the Omnibus Budget Reconciliation 
Act of 1990 and the Veterans' Benefits Act of 1992. Section 107 
of the administrative provisions provides requested language 
which permits excess revenues in three insurance funds to be 
used for administrative expenses. The VA estimates that 
$36,000,000 will be utilized for such purposes in fiscal year 
1998. Prior to fiscal year 1996, such costs were included in 
the general operating expenses appropriation.
    The Committee recommends $853,385,000 for general operating 
expenses in fiscal year 1998. This amount represents an 
increase of $7,000,000 above the budget request. The additional 
funds are available, subject to approval in the operating plan, 
for activities such as retaining Veterans Benefits 
Administration (VBA) staff to improve the timeliness of 
processing veterans claims and for higher than anticipated 
contracting costs of the Year 2000 computer problem. The VA 
should consider this a one-time adjustment to address on-going 
concerns. Future budget requests for the general operating 
expenses account are to include adequate funds for 
administrative costs.
    The VA lacks the authority to pay administrative costs of 
the Service Members Occupational Conversion and Training Act. 
The VA estimates that approximately $50,000 may be needed for 
these expenses. The bill includes requested language to 
continue allowing such costs to be funded in the general 
operating expenses account.
    The Committee has been concerned for several years with the 
backlog of claims at the Veterans Benefits Administration and 
shortcomings in its computer modernization effort. External 
reviewing agencies and the Congress have criticized VBA for its 
lack of adequate control over management of the compensation 
and pension program, including related information technology 
demands. Recent VBA actions taken and planned may not be 
sufficient to assure continuing improvement in service to 
veterans with C&P claims. The Veterans Benefits Administration 
needs to make further improvements in productivity and services 
if it is to be turned into a first-class, well-performing 
institution that provides superb service to the nation's 
veterans.
    The Committee generally supports the improvements in VBA 
management and information technology as recommended in recent 
reports, including those of the Veterans' Claims Adjudication 
Commission and the National Academy of Public Administration 
(still in draft form). As stated in the NAPA report, unless 
significant and fundamental changes are made in the way 
services are delivered in the field, the situation threatens to 
become worse. Vacancies in VA's top leadership positions 
provide an excellent opportunity for effecting change to fix 
the overall C&P process. Developing and implementing a 
comprehensive reform plan will not be easy--and it will take 
time. The Committee stands ready to assist the VA and the 
Administration in developing and implementing leadership and 
management reforms to accomplish long-term improvement in VBA's 
performance.
    The Veterans Services Network (VETSNET), VBA's future 
modernized application system, has been under design and 
development for several years. The VA's recent focus on 
correcting the Year 2000 computer problem has resulted in the 
stoppage of most work on VETSNET. The Committee expects the VA 
to defer further efforts on the existing VETSNET program, 
pending further development of the program and the successful 
completion of the Year 2000 computer problem.
    The Committee is concerned with VBA's use of buyout 
authority. Buyouts are to be offered to reduce employment 
levels so as to avoid reductions-in-force for newer employees. 
Buyouts are not to be offered to critical employees or 
employees whose positions will be required in the future. It 
appears that last year VBA offered buyouts to employees who 
were necessary for current activities. If VBA plans to offer 
buyouts this fall, it should first submit a plan to the 
Committees on Appropriations indicting which positions will be 
targeted and what the organizational structure will be in the 
future.
    The Committee appreciates the efforts of the VA to 
consolidate functions. However, there are concerns with VBA's 
decision to consolidate loan service and claims and loan 
processing functions from the St. Petersburg Regional Office to 
Atlanta. In reviewing the VA's analysis, the Committee believes 
that the weights applied to some of the factors used in 
determining where consolidated activities would be located were 
inappropriate and do not accurately reflect cost and 
performance. As such, the bill includes language prohibiting 
the VA from proceeding with the relocation of loan guaranty 
divisions of the Regional Office in St. Petersburg, Florida to 
Atlanta, Georgia.

                        national cemetery system

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $84,183,000
Fiscal year 1997 appropriation........................        76,864,000
Fiscal year 1998 budget request.......................        84,183,000
Comparison with fiscal year 1997 appropriation........        +7,319,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    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 
with available grave space 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. This appropriation provides for 
the operation and maintenance of 148 cemeterial installations 
in 39 States, the District of Columbia, and Puerto Rico.
    The Committee recommends the budget request of $84,183,000 
for the national cemetery system in fiscal year 1998. These 
funds will support an average employment in fiscal year 1998 of 
1,375, an increase of 52 above the fiscal year 1997 level.

                      office of inspector general

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $31,013,000
Fiscal year 1997 appropriation........................        30,900,000
Fiscal year 1998 budget request.......................        31,013,000
Comparison with fiscal year 1997 appropriation........          +113,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Office of Inspector General was established by the 
Inspector General Act of 1978 and is responsible for the audit, 
investigation and inspection of all Department of Veterans 
Affairs programs and operations. The overall operational 
objective is to focus available resources on areas which would 
help improve services to veterans and their beneficiaries, 
assist managers of VA programs to operate economically in 
accomplishing program goals, and prevent and deter recurring 
and potential fraud, waste and inefficiencies.
    The Committee has recommended the budget request of 
$31,013,000 for the Office of Inspector General in fiscal year 
1998.

                      CONSTRUCTION, MAJOR PROJECTS

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................  \1\ $155,600,000
Fiscal year 1997 appropriation........................       250,858,000
Fiscal year 1998 budget request.......................    \1\ 79,500,000
Comparison with fiscal year 1997 appropriation........       -95,258,000
Comparison with fiscal year 1998 budget request.......       +76,100,000
                                                                        
\1\ Excludes fiscal year 1997 appropriation of $32,100,000 for the      
  Travis Air Force Base replacement hospital, which cannot be released  
  for obligation prior to January 1, 1998, unless action is taken by the
  Congress specifically making the funds available. For scorekeeping    
  purposes, these funds are considered as an advance 1998 appropriation.

    The construction, major projects appropriation provides for 
constructing, altering, extending, and improving any of the 
facilities under the jurisdiction or for the use of the VA, 
including planning, architectural and engineering services, and 
site acquisition where the estimated cost of a project is 
$4,000,000 or more. Emphasis is placed on correction of life/
safety code deficiencies in existing VA medical facilities.
    A construction program of $79,500,000 is requested for 
construction, major projects, in fiscal year 1998. The bill 
includes $155,600,000 for the construction of major projects, 
an increase of $76,100,000 above the budget request.
    The changes from the budget request are as follows:
    +$26,300,000 for construction of an ambulatory care 
addition at the Asheville, North Carolina VA Medical Center.
    +$21,100,000 for construction of an ambulatory care 
addition at the Lyons, New Jersey VA Medical Center.
    +$7,700,000 for the ward renovations for patient privacy 
project at the Omaha, Nebraska VA Medical Center.
    +$26,000,000 for the environmental improvements project at 
the Waco, Texas VA Medical Center.
    -$3,500,000 of the $4,933,000 requested for the advance 
planning fund.
    -$1,500,000 of the $3,500,000 requested for the design 
fund.
    The budget proposes changing the major construction cost 
limitation from $3,000,000 or more to $5,000,000 or more. This 
would increase the limit of the minor construction 
appropriation accordingly. The bill includes language changing 
the current threshold for major construction projects to 
$4,000,000 or more. The minor construction threshold is 
modified accordingly.
    The specific amounts recommended by the Committee are as 
follows:

                                            DETAIL OF BUDGET REQUEST                                            
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                     Available                         House    
                    Location and description                       through 1997    1998 request   recommendation
----------------------------------------------------------------------------------------------------------------
Medical Program:                                                                                                
    Replacement and modernization: Memphis, TN, Seismic                                                         
     correction.................................................         $73,000         $34,600         $34,600
    Outpatient improvements:                                                                                    
        Asheville, NC--ambulatory care addition.................  ..............               0          26,300
        Lyons, NJ, ambulatory care addition.....................  ..............               0          21,100
                                                                 -----------------------------------------------
          Subtotal, outpatient improvements.....................  ..............               0          47,400
                                                                 ===============================================
    Patient environment:                                                                                        
        Omaha, NE, ward renovations for patient privacy.........  ..............               0           7,700
        Waco, TX, environmental improvements....................  ..............               0          26,000
                                                                 -----------------------------------------------
          Subtotal, patient environment.........................  ..............               0          33,700
                                                                 ===============================================
    Advance planning fund: Various stations.....................  ..............           4,933           1,433
    Design fund: Various stations...............................  ..............           3,500           2,000
    Asbestos abatement: Various stations........................  ..............           4,000           4,000
    Seismic vulnerability studies: Various stations.............  ..............           1,000           1,000
    Claims Analyses: Various stations...........................  ..............             500             500
                                                                 -----------------------------------------------
          Total, major VHA......................................          73,000          48,533         124,633
                                                                 ===============================================
    National Cemetery Program:                                                                                  
        Cleveland, OH, new cemetery, Phase I development........           1,958          12,642          12,642
        Fort Sam Houston, TX, burial area expansion.............  ..............           9,400           9,400
        National Memorial Cemetery of Arizona, gravesite                                                        
         development............................................  ..............           9,100           9,100
        Advance planning fund: Various stations.................  ..............             750             750
        Less: Design fund.......................................  ..............            -925            -925
                                                                 -----------------------------------------------
          Subtotal, NCS.........................................           1,958          30,967          30,967
                                                                 ===============================================
          Total construction, major projects....................          74,958          79,500         155,600
----------------------------------------------------------------------------------------------------------------

                      construction, minor projects

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $175,000,000
Fiscal year 1997 appropriation........................       175,000,000
Fiscal year 1998 budget request.......................       166,300,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......        +8,700,000
                                                                        

    The construction, minor projects appropriation provides for 
constructing, altering, extending, and improving any of the 
facilities under the jurisdiction or for the use of the VA, 
including planning, architectural and engineering services, and 
site acquisition, where the estimated cost of a project is less 
than $4,000,000. Emphasis is placed on correction of code and 
environmental deficiencies in this appropriation request.
    The Committee recommends $175,000,000 for the construction, 
minor projects appropriation in fiscal year 1998. The amount 
recommended is $8,700,000 above the budget request and is for 
converting inpatient space to outpatient activity use.
    The budget proposes increasing the minor construction cost 
limitation from projects costing less than $3,000,000 to 
projects costing less than $5,000,000. The bill includes 
language increasing the minor construction threshold to 
$4,000,000. The budget also proposes bill language to allow the 
use of minor construction funding for capital contribution 
payments under the enhanced-use leasing program. The bill does 
not include language for this proposal.
    The Committee is concerned that the minor construction 
account not be used for major construction projects. The cost 
threshold between major and minor VA construction projects is 
$3,000,000. Those projects costing $3,000,000 or more are 
decided on an individual basis in the major construction 
account. Those projects estimated to cost less than $3,000,000 
are funded in the minor construction account. The VA is given 
discretion as to the type and location of minor projects. The 
VA planned two minor construction projects at the same 
location. Each project would have been under $3,000,000, but 
together they would exceed $3,000,000. This proposal would 
effectively circumvent the minor construction cost limitation. 
It was never intended that the minor construction account be 
used to fund a project which exceeded the cost limitation. In 
recommending that the threshold for minor projects be raised in 
fiscal year 1998 to $4,000,000, the Committee does not expect 
that multiple minor projects at the same location will exceed 
the new limitation.
    Within the amount recommended, the VA is urged to utilize 
$300,000 for an additional columbarium of 5,000 niches at the 
National Memorial Cemetery of the Pacific. The additional 
niches would allow the cemetery to accommodate the cremated 
remains of veterans for an additional eight years.

                         parking revolving fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................                 0
Fiscal year 1997 appropriation........................       $12,300,000
Fiscal year 1998 budget request.......................                 0
Comparison with fiscal year 1997 appropriation........       -12,300,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    This appropriation provides funds for the construction, 
alteration, and acquisition (by purchase or lease) of parking 
garages at VA medical facilities. 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 
can be used to fund future parking garage initiatives.
    No new budget authority is requested for the parking 
revolving fund in fiscal year 1998. Leases will be funded from 
parking fees collected. The bill includes the requested 
language permitting operation and maintenance costs of parking 
facilities to be funded from the medical care appropriation.

       grants for construction of state extended care facilities

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $60,000,000
Fiscal year 1997 appropriation........................        47,397,000
Fiscal year 1998 budget request.......................        41,000,000
Comparison with fiscal year 1997 appropriation........       +12,603,000
Comparison with fiscal year 1998 budget request.......       +19,000,000
                                                                        

    This program provides grants to assist States to construct 
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. A grant may not exceed 65 
percent of the total cost of the project. Grants for State 
nursing facilities may not provide for more than four beds per 
thousand veterans in any State.
    The Committee recommends $60,000,000 for grants for 
construction of State extended care facilities in fiscal year 
1998. This amount represents an increase of $19,000,000 above 
the budget request and is to address the high demand from 
States for this important program.
    Nevada has submitted an application for a 181-bed skilled 
nursing home in the southern part of the State. Nevada is one 
of the few States that does not host a skilled nursing 
facility, and intends to use this federal grant to meet the 
nursing care needs of the burgeoning veteran population. The 
Committee urges VA to give priority to Nevada's application, in 
accordance with established criteria, so that this project can 
move forward expeditiously in fiscal year 1998.

        grants for the construction of state veteran cemeteries

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $10,000,000
Fiscal year 1997 appropriation........................         1,000,000
Fiscal year 1998 budget request.......................        10,000,000
Comparison with fiscal year 1997 appropriation........        +9,000,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    Public Law 95-476 established authority to provide aid to 
States for establishment, expansion, and improvement of State 
veterans' cemeteries. States receive financial assistance to 
provide burial space for veterans which serves to supplement 
the burial services provided by the national cemetery system. 
The cemeteries 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. The remaining amount 
must be contributed by the State.
    The budget proposes legislation to increase the maximum 
federal share of the costs of construction from 50 percent to 
100 percent. The legislation would also permit federal funding 
of up to 100 percent of the cost of initial equipment for 
cemetery operations. The State would remain responsible for 
paying all costs related to the cemetery operations, including 
the costs for subsequent equipment purchases. Whether or not 
this revised State grant program will replace the national 
cemetery construction program, as is proposed by the VA, is a 
matter to be determined.
    The Committee recommends the budget request of $10,000,000 
for grants for the construction State veterans cemeteries in 
fiscal year 1998.

                       administrative provisions

                   (including the transfer of funds)

    The bill contains the seven administrative provisions 
requested by the Administration. These provisions were also 
carried in the 1997 Appropriations Act.

                                TITLE II

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................   $25,823,255,000
Fiscal year 1997 appropriation........................    19,453,809,422
Fiscal year 1998 budget request.......................    24,573,255,000
Comparison with fiscal year 1997 appropriation........    +6,369,455,558
Comparison with fiscal year 1998 budget request.......      +550,000,000
                                                                        

    The Department of Housing and Urban Development (HUD) was 
established by the Department of Housing and Urban Development 
Act of 1965. In that Act, the Congress recognized the 
importance of housing and urban development to the Nation and 
tasked HUD to administer four major categories of programs: FHA 
mortgage insurance, subsidized housing, community and 
neighborhood development, and regulatory functions.
    Since 1995, HUD has been scrutinized carefully by the 
Congress, and in particular, the Committees on VA/HUD 
Appropriations and Banking and Financial Services. During that 
time, HUD has made attempts to better focus its mission, to 
improve management practices and to redefine programs. As in 
most large bureaucratic organizations, changing past practices 
is a slow, challenging process. Yet, HUD must change its 
administrative and programmatic structures if the Department is 
to retain its relevance in the future.
    HUD's new Secretary, Andrew Cuomo, plans to improve 
management functions at HUD, to improve HUD's ability to 
monitor programs, to measure performance and to enforce rules 
and regulations. The Committee agrees that HUD must take these 
steps as it moves towards downsizing its staff and making major 
programmatic changes.
    In addition to the need for major programmatic reforms, the 
Department must improve its ability to account for the 
expenditure of funds by providing accurate assessments of how 
its programs affect the recipients--for example, how many 
families benefit from the receipt of housing assistance, what 
is the cost of developing new homes, how many neighborhoods 
have been revitalized and at what cost, and how many families 
have received jobs as a result of neighborhood revitalization 
efforts.
    To the degree a program can show positive results, HUD 
should study whether its parameters can be applied effectively 
to other programs. For example, the HOME, CDBG and the Low-
Income Housing Tax Credit programs work well throughout the 
country. They encourage public-private partnerships, local 
leadership, and proper incentive structures. They leverage 
federal funding with other resources. Together these principles 
provide poor neighborhoods with access to both financial and 
social capital.
    Unfortunately, the positive results of these programs and 
others are overshadowed by problems which continue to plague 
the Department. For example, the discovery of billions of 
dollars of unspent section 8 reserves leaves the Committee 
incredulous and begs the question of why it has taken HUD so 
long to account for these funds.
    In February 1996, HUD began an extensive examination of the 
section 8 tenant-based reserve accounts at all housing agencies 
to identify unspent budget authority--called contract reserves. 
This unexpended budget authority accumulated over the years 
since the program began in 1974. In the past, HUD entered into 
multiyear contracts--many for as long as 15 years--with housing 
agencies to provide rental assistance to low-income families. 
However, over time, housing agencies did not expend all the 
funding set aside for these contracts, thus creating contract 
reserves. HUD's policy has been to view these reserves as a 
buffer that housing agencies could use against inflation, 
unanticipated changes in housing markets, and declines in 
tenant income, thus ensuring that assistance to low-income 
families would not lapse in the face of economic hardship.
    By the end of fiscal year 1996, HUD's reconciliation of its 
accounts with housing agencies had identified approximately 
$1,600,000,000 in contract reserves, which HUD used to extend 
the funding for expiring section 8 tenant-based contracts. This 
action, which occurred too late in the budget process to be 
reflected in the fiscal year 1997 budget, appeared for the 
first time in the fiscal year 1998 budget, when HUD reduced its 
request by $1,600,000,000.
    Because HUD's need for new budget authority to renew 
section 8 contracts doubled from fiscal year 1997 to 1998, and 
because requests in succeeding years are projected to continue 
to rise rapidly, the Committee requested that the General 
Accounting Office (GAO) review HUD's fiscal year 1998 budget 
request for section 8 contract renewal funding. GAO briefed the 
Committee in February 1997 and provided a statement for the 
record for the Committee's hearing on March 18, 1997. Part of 
the briefing, as well as GAO's statement, disclosed that HUD 
was aware of significant unspent project reserves in its 
tenant-based section 8 program and that once HUD completed its 
reconciliation of all housing agency accounts, the likely total 
amount of reserves would far exceed the $1,600,000,000 that HUD 
had already disclosed in its fiscal year 1998 budget request. 
However, when HUD initially submitted its budget request to 
Congress and at the time of the Committee's hearing in March, 
the total amount of unspent reserves was still unknown. 
Therefore, based on GAO's testimony and other pertinent 
information, the Committee directed HUD to identify and to 
report on the amount of section 8 reserves in all housing 
agencies.
    In response to that recommendation, the Secretary informed 
Chairman Lewis in April 1997 that the Department had identified 
an amount of additional reserves--estimated at $5,800,000,000, 
net of certain deductions--that could be used to offset the 
$5,600,000,000 increase in the cost of section 8 contract 
renewals for fiscal year 1998. However, in reporting the net 
amount of prior years' budget authority available for extending 
contracts, the Secretary did not disclose the gross amount of 
contract reserves identified through the reconciliation 
process, which the Department estimates to be $10,300,000,000.
    To arrive at the $5,800,000,000 figure, HUD deducted 
several amounts for various purposes from the total amount of 
$10,300,000,000 in unexpended appropriations. Some of the 
amounts are based on internal policy assumptions still under 
consideration by the Secretary. The deductions totaled over 
$4,500,000,000 and include (1) $133,000,000 to fully fund 
expected budget authority shortfalls in existing multiyear 
contracts; (2) $1,300,000,000 to cover contingencies for 
unforeseen increases in subsidy needs, an amount that is equal 
to 2 months of annual budget authority; (3) $2,200,000,000 for 
unexpired restricted reserves--the amount of reserves currently 
set-aside to fund renewals previously extended in fiscal years 
1995-97 with no new funding; and (4) $900,000,000 to cover the 
cost of converting HUD's section 8 payment process from one 
that operates on a fiscal year basis to one that operates on a 
calendar year basis. Without further explanation from HUD, the 
Committee cannot be certain whether these deductions are within 
HUD's prerogative to exercise or whether statutory authority is 
needed.
    To provide assurance that the amount of excess reserves 
identified by HUD's process of reconciling housing agency 
accounts was accurate, HUD hired the accounting firm of Price 
Waterhouse to audit the reserve numbers. However, because of 
difficulties encountered in verifying the amounts that HUD used 
to compute the $5,800,000,000 estimate of available reserves, 
Price Waterhouse was unable to provide any level of assurance 
on the excess reserves. As an alternative, Price Waterhouse and 
HUD developed specific accounting procedures to identify excess 
reserves. On the basis of these procedures, Price Waterhouse's 
preliminary estimate of the net excess budget authority minus 
HUD's proposed uses is $7,200,000,000--$1,400,000,000 more than 
HUD previously estimated. HUD expects Price Waterhouse to issue 
its final report on the agreed-upon procedures in late June 
1997.
    The Committee concurs with HUD that some level of reserves 
is necessary to ensure that the flow of assistance to program 
participants continues when unforeseen circumstances arise, 
such as increases in subsidy amounts or delays in program 
funding. However, reduced contract terms from 15 years to one 
year have decreased the need to maintain large reserve accounts 
at each housing agency. Furthermore, the Committee is concerned 
with the difficulties HUD encountered in identifying, 
verifying, and managing contract reserves.
    Last year, the Committee stated that HUD must be in a 
position to account for every dollar provided to it by 
Congress. Program reserves are no exception. Not only must HUD 
be able to specify the total amount of program reserves, it 
must also be able to clearly document and support its policy 
positions on using reserves. If the program were not so 
important to millions of families and elderly and disabled 
persons that depend upon it, the Committee would have 
recommended an appropriation of $0, pending a full report from 
HUD and the GAO and an accurate accounting of excess reserve 
funds.
    Therefore, to ensure that the Committee is adequately 
informed of events and decisions that affect large amounts of 
unexpended budget authority, the Committee directs HUD to 
establish more substantial and frequent lines of communication 
with the Committee and to keep the Committee apprised of its 
analysis of section 8 budget needs. Until this analysis is 
complete, the Committee recommends a rescission of $565,000,000 
from excess section 8 reserves. This rescission may be adjusted 
as the House and Senate conference the appropriation bill and 
as HUD completes its analysis of section 8 budget needs.

                       Public and Indian Housing

                        Housing Certificate Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................   $10,393,000,000
Fiscal year 1997 appropriation........................     3,600,000,000
Fiscal year 1998 budget request.......................    10,676,000,000
Comparison with fiscal year 1997 appropriation........    +5,703,000,000
Comparison with fiscal year 1998 budget request.......      -283,000,000
                                                                        

    The Housing Certificate Fund consolidates the existing 
section 8 voucher and certificate rental assistance programs. 
In addition, it provides funding for activities funded through 
the Prevention of Resident Displacement account in the 1997 VA/
HUD Appropriations measure, including renewal of expiring 
section 8 contracts, section 8 amendments, the witness 
relocation program, displaced family relocation, the conversion 
of section 23 projects to section 8 projects, and the family 
unification program.
    The Committee recommends $10,393,000,000 for the Housing 
Certificate Fund, which includes $9,200,000,000 for section 8 
contract renewals as agreed in the Budget Resolution, 
$850,000,000 for section 8 contract amendments and $343,000,000 
for section 8 relocation assistance. The relocation assistance 
amount includes funds for the family self-sufficiency program, 
witness relocation, section 23 conversions and tenant 
protection set-asides. The bill includes funding to continue a 
$50,000,000 set-aside for rental assistance to disabled 
families who are displaced as a result of public housing 
complexes being designated for elderly only residents. The 
account does not include funding for new incremental assistance 
or regional opportunity counseling as requested by the 
President.
    Amounts for Public and Indian Housing's portion (primarily 
tenant-based assisted housing) of the contract renewal estimate 
are based on two values: one is the number of expiring housing 
units in the certificate, voucher, and moderate rehabilitation 
programs; and the other is the average annual unit cost of 
$6,386. GAO's March 18, 1997, report to this Committee 
disclosed that the unit cost included several allowances for 
contingencies. In addition, on May 13, 1997, the Secretary 
testified before the Senate Appropriations Subcommittee that 
HUD was continuing to review issues that GAO raised with 
respect to the annual unit cost of section 8 contracts.
    As a result of HUD's continued review and analysis, HUD's 
Office of Public and Indian Housing reported that the unit cost 
included in the budget request could be overstated by several 
hundred dollars per year for over one million housing units 
because of duplicate allowances for (1) the section 8 
administration fee and (2) a 2-week reserve to allow for 
unknown contingencies.
    Therefore, because HUD has not yet finalized a new estimate 
for the average unit cost, the Committee recommends that before 
the appropriations legislation goes to a House-Senate 
conference, HUD provide the Appropriations Committees an 
accurate figure for average unit cost of tenant-based section 8 
housing and inform the Committees of the resulting impact on 
the budget request.
    Funding for the Preservation program is not included in the 
Committee's recommendation based upon the findings of the GAO 
draft report on the program. Last year, this Committee 
requested GAO to review the costs of this program and its 
administration. In its draft report, which is not yet final, 
GAO concludes that the program requires substantial reform to 
reduce costs to reasonable levels and to ensure that program 
rules are followed in a consistent manner. These reforms, which 
are substantial, ought to be considered by the authorizing 
committee. The Committee remains concerned about preservation 
of affordable housing, but not at an unacceptable cost to the 
American taxpayer.
    The Committee believes that section 8 tenant-based rental 
assistance is one of the most effective tools for helping 
individuals with mental and physical disabilities live 
integrated lives in their home communities. It is also the 
program that can most quickly provide alternative resources to 
individuals with disabilities, who would otherwise have been 
eligible for Federally assisted housing units now designated as 
``elderly-only.'' Many individuals with disabilities are 
currently on waiting lists for housing in the community. The 
Committee intends for these funds set aside within the housing 
certificate fund for rental assistance for disabled persons to 
be used to help these individuals and to offset any loss of 
public and assisted housing that has been designated as 
``elderly-only.''
    Language has been included in pending housing authorization 
legislation that clarifies that these funds are applicable 
wherever there has been a loss of assisted or public housing 
and believes that this clarification will help HUD simplify 
administration of the program. The Committee strongly 
encourages housing authorities to work with individuals with 
disabilities and their advocates to ensure that this critically 
needed rental assistance get to the people who need it.
    The Committee recommends delaying for three months the 
reissue of section 8 rental assistance, limiting the annual 
adjustment factor for high cost units and reducing the annual 
adjustment factor by 1% on those units that do not experience 
turnover due to attrition.

                      PUBLIC HOUSING CAPITAL FUND

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $2,500,000,000
Fiscal year 1997 appropriation........................     2,700,000,000
Fiscal year 1998 budget request.......................     2,500,000,000
Comparison with fiscal year 1997 appropriation........      -200,000,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Public Housing Capital Fund consolidates all current 
public housing capital programs into one account, including 
public housing development, modernization and amendments.
    The Committee recommends funding the Public housing capital 
fund account at $2,500,000,000, which is the level requested by 
the President. Though this level of funding is less than the 
level appropriated in fiscal year 1997, the Indian housing 
development program, which was funded at $200,000,000 in fiscal 
year 1997, is now included in the Native American housing block 
grant account.
    Set-asides include $30,000,000 for technical assistance 
activities under section 6(j) and $5,000,000 is for the Tenant 
Opportunity Program.

                     PUBLIC HOUSING OPERATING FUND

                     (Including Transfers of Funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $2,900,000,000
Fiscal year 1997 appropriation........................     2,900,000,000
Fiscal year 1998 budget request.......................     2,900,000,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    Operating subsidies are provided to public housing 
authorities to supplement tenant rental contributions and other 
income to assist in financing the operation of public housing 
projects. Operating subsidies are required to maintain 
operating and maintenance services and to provide for minimum 
project reserves. The performance funding system (PFS) formula 
is the primary system for determining operating subsidy 
amounts.
    The Committee recommends funding operating subsidies at the 
level requested by the President of $2,900,000,000. In 
deference to the Banking Committee, the Committee has not 
included reform measures, pending enactment of H.R. 2, the 
Housing Opportunity and Responsibility Act of 1997. The 
Committee urges the House and the Senate to resolve their 
issues quickly as they move through the legislative process in 
order to make permanent the reforms necessary to enable housing 
authorities to operate more effectively.
    Debate continues about the potential impact of welfare 
reform on HUD's low-income housing. Despite grave predictions, 
little substantive, quantifiable data has been presented to the 
Committee about these impacts. Therefore, the Committee directs 
HUD's office of Policy Development and Research, along with the 
General Accounting Office, to study this issue, particularly 
the effects that welfare reform will have upon PHA's operating 
costs and the income levels of public housing residents and to 
report to the Committee on their findings by February 1, 1998.

             Drug Elimination Grants For Low-Income Housing

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $290,000,000
Fiscal year 1997 appropriation........................       290,000,000
Fiscal year 1998 budget request.......................       290,000,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    Drug elimination grants are provided to public housing 
agencies and Indian housing authorities to eliminate drug-
related crime in housing developments. PHAs may use funds to 
employ security personnel and investigators, provide physical 
project improvements to enhance security, support tenant 
patrols in cooperation with local law enforcement agencies, 
develop innovative programs to reduce drugs, and provide 
resident groups with funds to develop security and drug abuse 
prevention programs.
    The Committee recommends funding this program at 
$290,000,000, the level requested by the President. The 
Committee provides a $10,000,000 set-aside for efforts to 
combat violent crime in public and assisted housing under 
Operation Safe Home administered by the HUD Inspector General 
and $10,000,000 for the Inspector General for other Operation 
Safe Home activities. The Committee directs HUD to develop a 
system for maintaining statistics on the impact of the Drug 
elimination program in subsidized housing, including the 
incidence of crime and the decrease or increase of criminal 
activities after receipt of drug elimination grant funds.
    The Committee is pleased with the Eisenhower Foundation's 
youth development and crime prevention program in public 
housing. This program is based on safe havens, police mini-
stations, civilian and police mentoring of youth, stay-in-
school counseling and welfare to work initiatives. Crime has 
been reduced by 20 to 35% in scientific evaluations of 
community policing mini-stations which share the same space 
with youth safe havens. The Committee hopes that HUD, which 
currently administers funding for this program, will continue 
to support and expand this most worthwhile initiative.

    revitalization of severely distressed public housing (hope vii)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $524,000,000
Fiscal year 1997 appropriation........................       550,000,000
Fiscal year 1998 budget request.......................       524,000,000
Comparison with fiscal year 1997 appropriation........       -26,000,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Revitalization of Severely Distressed Public Housing 
program awards competitive grants to public housing authorities 
to enable them to demolish obsolete projects, or to redevelop 
and revitalize the sites on which the projects are located. In 
addition, the grants may provide replacement housing for those 
families displaced by demolition to avoid or lessen 
concentrations of very low-income families.
    The Committee recommends funding this program at the 
requested level of $524,000,000, with a set-aside of $5,000,000 
for technical assistance. The Committee requests the GAO to 
continue their analysis of the HOPE VI program. The Committee 
is particularly interested in the length of time between award 
and ground-breaking, obstacles that impede the program, the use 
of public-private partnerships, the level of leveraging 
activity, the impact of the project on the surrounding 
neighborhood, an analysis of whether a matching requirement 
should be considered and other recommendations to the program. 
GAO should report to the Committee by February 1, 1998.
    The Committee is aware of the Campus Affiliates Program, a 
unique partnership between HUD, the Housing Authority of New 
Orleans, higher education and the private sector. This program 
has begun to meet the needs of public housing residents in New 
Orleans by providing assistance and activities that foster 
self-sufficiency. The Committee believes HUD should continue to 
participate in this initiative.

                  native american housing block grants

                     (including transfer of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $650,000,000
Fiscal year 1997 appropriation........................                 0
Fiscal year 1998 budget request.......................       485,000,000
Comparison with fiscal year 1997 appropriation........      +650,000,000
Comparison with fiscal year 1998 budget request.......      +165,000,000
                                                                        

    The Native American Housing Assistance and Self-
Determination Act of 1996 authorized the Native American 
Housing Block Grants program. This program provides funds to 
Indian tribes and their tribally designated housing entities to 
help them address housing needs within their communities. Until 
this year, Native American programs have been funded with 
portions of other public housing funds.
    The Committee recommends increasing the funds available for 
this program above the President's request of $485,000,000 to 
$650,000,000. HUD's Native American housing program faces 
serious challenges. These challenges are the result of a number 
of factors, including the remoteness of Indian reservations, 
limited resources, land-use restrictions, statutory hiring 
preferences and scarce maintenance funds.
    HUD has not paid adequate attention to Indian housing 
programs, either in its funding requests or in building tribal 
capacity and technical expertise to carry out effective 
affordable housing programs. Other organizations, like the 
Neighborhood Reinvestment Corporation, Habitat for Humanity and 
the FNMA are working closely with tribes to extend conventional 
mortgage financing to tribal trust lands. HUD should be far 
more proactive in exploring ways to generate capital on Indian 
reservations and is directed to prepare a report on this issue 
with recommendations to the Congress by February 1, 1998.

           indian housing loan guarantee fund program account

----------------------------------------------------------------------------------------------------------------
                                                                                           Limitation on direct 
                                                                    Program account               loans         
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation...............................               $3,000,000              $36,900,000
Fiscal year 1997 appropriation................................                3,000,000               36,900,000
Fiscal year 1998 budget request...............................                3,000,000               36,900,000
Comparison with fiscal year 1997 appropriation................                        0                        0
Comparison with fiscal year 1998 budget request...............                        0                        0
----------------------------------------------------------------------------------------------------------------

    Section 184 of the Housing and Community Development Act of 
1992 establishes a loan guarantee program for Native Americans 
to build or purchase homes on trust land. This program provides 
access to sources of private financing for Indian families and 
Indian housing authorities who otherwise could not acquire 
financing because of the unique legal status of Indian trust 
land. This program provides the financial vehicle for 
approximately 20,000 families to construct new homes or 
purchase existing properties on reservations. The budget 
requests $3,000,000 to support loan guarantees totaling 
$36,900,000. The bill includes the requested program subsidy 
and loan guarantee limitation.

                   Community Planning and Development

              housing opportunities for persons with aids

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $204,000,000
Fiscal year 1997 appropriation........................       171,000,000
Fiscal year 1998 budget request.......................       204,000,000
Comparison with fiscal year 1997 appropriation........       +33,000,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Housing Opportunities for Persons with AIDS (HOPWA) 
program is authorized by the Housing Opportunities for Persons 
with AIDS Act, as amended. The purpose of the program is to 
provide states and localities with resources and incentives to 
devise long-term comprehensive strategies for meeting the 
housing needs of persons with HIV/AIDS and their families. 
Government recipients must have a HUD-approved Comprehensive 
Plan/Comprehensive Housing Affordability Strategy (CHAS), with 
funds allocated among eligible grantees based on section 854(c) 
of the National Affordable Housing Act.
    The Committee recommends funding this program at the level 
requested by the President and has included authority to HUD to 
make small, noncompetitive grants to nonprofit organizations 
that provide meals to homebound persons with AIDs. In the 
report accompanying the 1997 VA/HUD Appropriations measure, the 
Committee requested GAO to review several aspects of the HOPWA 
program. Based on recommendations in this report, the Committee 
directs HUD: (1) to examine changes to the Ryan White funding 
formulas, determine whether the HOPWA formula should be more 
reflective of current AIDS cases, and make appropriate 
recommendations to the Congress and to specify that grantees 
must include in planning the use of HOPWA funds, similar to the 
Ryan White Program; (2) to examine the feasibility of requiring 
a recipient of HOPWA funds to have some level of matching funds 
or services to stretch the impact of limited HOPWA funding; (3) 
to implement a tracking system to ensure that all reports are 
received and processed by HUD in a timely manner; and (4) to 
issue clear guidance to grantees for updating the information 
and to establish a means of ensuring that grantees update 
information as required.

                   community development block grants

                     (including transfer of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $4,600,000,000
Fiscal year 1997 appropriation........................     4,600,000,000
Fiscal year 1998 budget request.......................     4,600,000,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    Title I of the Housing and Community Development Act of 
1974, as amended, authorizes the Secretary to make grants to 
units of general local government and states for local 
community development programs. The primary objective of the 
block grant program is to develop viable urban communities and 
to expand economic opportunities, principally for persons of 
low- and moderate-income.
    The Committee recommends appropriating $4,600,000,000 for 
community development grants in fiscal year 1998. Set-asides 
within the CDBG account include: $67,000,000 for Native 
Americans; $60,000,000 for the Lead-Based Paint Hazard 
Reduction program; $50,000,000 for the Economic Development and 
Social Services program; $2,100,000 for the Housing Assistance 
Council; $1,500,000 for the National American Indian Housing 
Council; $16,700,000 for the Housing Opportunity Program 
Extension Act of 1996 (Pub. L. 104-120); and $30,000,000 for 
Youthbuild. The Committee does not recommend making Youthbuild 
into a separate program account as requested by the President.
    The Committee wishes to reiterate and emphasize the 
concerns it stated in its report on the fiscal year 1997 VA/HUD 
appropriations bill regarding the importance of service 
coordinators in public housing serving elderly and disabled 
persons. As the executive director of the Milwaukee Housing 
Authority testified during the fiscal year 1998 hearings, such 
coordinators ``have been a godsend,'' have made sustainable the 
co-existence of elderly and non-elderly disabled persons in 
that authority's seven high-rise mixed population buildings, 
and have reversed the decline in applications by needy elderly 
persons.
    As requested by the President, the Committee is providing 
funding for service coordinators as part of the $50,000,000 
set-aside for Economic Development and Supportive Services, and 
expects the Department to utilize an adequate portion of the 
set-aside for this purpose. The Committee is also concerned 
about other conditions that may have been placed by the 
Department on EDSS funding for service coordinators, such as 
providing grants only to housing authorities that had not 
received grants in the past, requiring authorities to enter 
into partnership agreements with other agencies and 
organizations before applying, and emphasizing funding only for 
new or significantly expanded services. These requirements may 
make sense for other aspects of the EDSS program, but seem 
counterproductive when the objective is to assist housing 
authorities in continuing to make available the tested and 
proven benefits that service coordinators for the elderly and 
disabled provide. Because of the importance the Committee 
places on service coordinators, the Department is directed to 
report to the Committee not later than February 1, 1998, 
concerning its recommendations as to the best means of 
providing funding for service coordinators, including whether 
there is a need for a specific set-aside for this purpose.
    As requested by the President, the Committee has provided 
$50,000,000 for the Economic Development Initiative (EDI), 
authorized under section 108(q) of the Housing and Community 
Development Act of 1974. The Committee decided to provide funds 
for this program based on HUD's plan to target them on creating 
employment opportunities for former welfare recipients that 
live in distressed and blighted neighborhoods. The Committee is 
especially interested in ensuring that neighborhoods with a 
high concentration of public and assisted housing and 
foreclosed single family homes receive the benefit of the EDI 
program.
    The Committee believes that EDI and other housing programs 
ought to be administered more consistently with local 
redevelopment initiatives and social service programs rather 
than in the bureaucratic, ``top-down'' manner that permeates 
existing HUD programs. In this way, housing programs can be 
linked directly to the creation of jobs and neighborhood 
revitalization. Furthermore, the Committee is convinced that 
community-based partnerships of public, corporate and nonprofit 
organizations add strength to any neighborhood revitalization 
and economic development plan, because they are able to 
leverage federal funds with other resources, to utilize the 
input of all stakeholders, and to create the right mix of 
incentive structures.
    The Committee encourages HUD, when awarding EDI grants, to 
consider several factors: (1) local strategies that utilize 
local community-based partnerships; (2) neighborhood 
revitalization efforts that integrate sustainable community and 
building design processes; (3) input by residents and other 
stakeholders; (4) creation of homeownership opportunities; and 
(5) links between housing programs and welfare reform 
initiatives in the neighborhood.
    The President requested $50,000,000 for activities that 
promote homeownership in targeted geographic areas. The 
Committee recommends against funding this request. In addition, 
the Committee recommends against additional funds for Bridges 
to Work, a demonstration program that was fully funded in 
previous appropriations measures. Finally, the $10,000,000 
requested transfer of funds for the National Community 
Development Initiative is not included because $30,200,000 was 
provided to this account as part of the Emergency Supplemental 
appropriations measure.
    Section 107 grants have provided funds for various purposes 
including providing assistance for community development for 
insular areas; historically black colleges and universities; 
work study; funding for states and units of general local 
government to correct any miscalculation of their share of 
funds under section 106; joint community development; 
regulatory barrier removal; community outreach; and technical 
assistance in planning, developing and administering programs 
under Title I.
    Bill language earmarks $25,100,000 for section 107 grants, 
including: $7,000,000 for insular areas; $6,500,000 for 
Historically Black Colleges and Universities; $6,500,000 for 
Community Development Work Study, with a $3,000,000 set-aside 
for Hispanic-serving institutions; $500,000 set-aside for 
continuing a seven site effort to develop revitalization 
strategies through the National Center for the Revitalization 
of Central Cities; and $4,600,000 for technical assistance.
    The Community Outreach Partnership program is funded at 
$11,500,000, with $2,500,000 for the Miami-Dade Action Plan 
Agency for revitalizing the Overtown section of Miami-Dade 
County, Florida, $1,123,000 for programs promoting 
entrepreneurial opportunities in economically deprived areas in 
Louisville, Kentucky, and $350,000 to renovate the Plymouth 
Renewal Center in Louisville, Kentucky.
    The President requested $100,000,000 for Empowerment Zones 
and Enterprise Communities. The Committee recommends against 
funding this request because there is no authorizing 
legislation in place for a second round of EZ/EC designations.
    The Committee has not provided the $25,000,000 requested 
for grants for redevelopment of ``brownfields.'' Although the 
President seeks this funding under the general authorization 
for economic development grants, the Committee is concerned 
that there is no specific legislative authorization for a 
brownfields program that would provide guidance regarding how 
funds would be allocated and for what purposes they could be 
spent. The Committee also recognizes that brownfields pose a 
serious problem for economic development in many areas. 
Accordingly, the Committee urges the Department to propose 
specific authorizing legislation setting forth how a HUD 
program directed at the brownfields problem would operate and 
how it would work with existing or proposed brownfields 
programs at the Environmental Protection Agency.
    Authority is provided allowing HUD to exempt a grant 
received by Oglesby, Illinois, from the public comment waiting 
period established for environmental assessment.
    The Committee is troubled by the misleading way in which 
HUD announced its initiative regarding the Erie Canal corridor 
last year. The Village of Baldwinsville, in Onondaga County, 
New York acting on HUD's assurances, incurred significant costs 
before they were informed by HUD that the Village was 
ineligible for these community development funds. The Committee 
expects HUD to work with the Village of Baldwinsville to ensure 
Baldwinsville's participation in HUD's Canal Corridor 
Initiative.
    The bill also includes language limiting guaranteed loans 
under section 108 to $1,500,000,000, with credit subsidy needs 
at $31,750,000.

                  HOME INVESTMENT PARTNERSHIPS PROGRAM

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $1,500,000,000
Fiscal year 1997 appropriation........................     1,400,000,000
Fiscal year 1998 budget request.......................     1,309,000,000
Comparison with fiscal year 1997 appropriation........      +100,000,000
Comparison with fiscal year 1998 budget request.......      +191,000,000
                                                                        

    The HOME investment partnerships program provides 
assistance to states, units of local government, Indian tribes, 
and insular areas, through formula allocation, for the purpose 
of expanding the supply and affordability of housing. Eligible 
activities include acquisition, rehabilitation, tenant-based 
rental assistance, and new construction. Jurisdictions 
participating in the program are required to develop a 
comprehensive housing affordability strategy.
    The Committee recommends funding this program at 
$1,500,000,000 and has included a $15,000,000 set-aside for 
Housing counseling assistance. This funding level is 
$100,000,000 above the fiscal year 1997 appropriation and 
$191,000,000 above the President's request. A provision to 
hold-harmless those participating jurisdictions who would be 
adversely impacted by this increase is included in the 
legislation.
    The HOME program represents the best example of how a 
federal program can be used to effectuate positive change in 
communities. The program is only five years old and in that 
time it has assisted over 75,000 homebuyers, produced over 
150,000 new homes and garnered 250,000 new commitments to build 
future homes. Ninety-eight percent of families renting HOME-
assisted units are below 60% of area median income. Each HOME 
dollar leverages $1.80 of other money and the average HOME 
investment per unit is $16,244. This program is an example of 
what works--local leadership, proper incentive structures, 
public/private partnerships, federal funding leveraged with 
other resources and different sectors working together toward a 
common goal. The program is a model for other HUD programs.
    The Committee has provided $10,000,000 to implement a low-
income loan secondary market feasibility demonstration that 
would (1) enhance the opportunities for homeownership by low-
income borrowers through the purchase of non-conforming loans 
from conventional lenders and subsequent reinvestment in low-
income loans by the lenders, and (2) document the performance 
of these pools of mortgages to encourage the secondary markets 
and other institutional investors to expand the purchase of 
loans made to low-income home buyers. The Secretary would 
choose up to three participants based on their ability to show 
previous experience working with lenders in purchasing non-
conforming loans to low-income borrowers, experience in 
expanding the secondary market for such seasoned loans, 
demonstrate success in carrying out these activities with non-
federal funds, and demonstrate the ability to adequately 
collect and share with the Department loan-level data on the 
underwriting and performance of the loans purchased. In an 
effort to make the demonstration as large as possible, it is 
desirable for the Secretary to choose participants who would be 
able to match funds with state or local funds.

                       SUPPORTIVE HOUSING PROGRAM

    The Committee recommends rescinding $6,000,000 from 
recaptured funds during 1998, as requested by the President.

                           SHELTER PLUS CARE

    The Committee recommends rescinding $4,000,000 from 
recaptured funds during 1998, as requested by the President.

                       HOMELESS ASSISTANCE GRANTS

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $823,000,000
Fiscal year 1997 appropriation........................       823,000,000
Fiscal year 1998 budget request.......................       823,000,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The homeless assistance grants account provides funding for 
four homeless programs under title IV of the McKinney Act: (1) 
The emergency shelter grants program; (2) the supportive 
housing program; (3) the section 8 moderate rehabilitation 
(single room occupancy) program; and (4) the shelter plus care 
program. This account also supports activities eligible under 
the innovative homeless initiatives demonstration program.
    The Committee recommends funding homeless programs at the 
1997 level and at the President's request. The Committee 
recommends, however, that HUD begin to develop a solution for 
ensuring that Homeless Assistance Grants are properly leveraged 
with local assistance programs and social services so that 
homeless individuals and families are served effectively.

                            Housing Programs

                    HOUSING FOR SPECIAL POPULATIONS

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $839,000,000
Fiscal year 1997 appropriation........................       839,000,000
Fiscal year 1998 budget request (revised).............       474,000,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......      +365,000,000
                                                                        

    The Housing for Special Populations program provides 
eligible private non-profit organizations with capital grants 
used to finance the acquisition, rehabilitation, or 
construction of housing intended for elderly people or people 
with disabilities. Twenty-five percent of the funding for 
supportive housing for the disabled is available for tenant-
based assistance under section 8 to increase program 
flexibility.
    Despite the President's continued attempt to reduce funding 
for these programs, the Committee recommends funding the 
section 202 housing for the elderly program at $645,000,000 and 
section 811 housing for the disabled program at $194,000,000, 
which are the FY 1997 levels.
    The Committee believes that it is imperative that HUD and 
the Congress have reliable data on which to base policy 
decisions related to the housing needs for individuals with 
disabilities. Consideration must be given to the impact of 
Federal elderly-only designation policies on individuals with 
disabilities and their families and on the large number of 
individuals with mental and physical disabilities who currently 
reside in large, inappropriate institutions, at home with aging 
parents, in seriously substandard housing, or on the streets. 
The Committee is aware that current approaches used by HUD to 
measure worst case housing needs do not adequately capture the 
necessary information on individuals with disabilities. The 
Committee directs the GAO to undertake a comprehensive study of 
the housing needs of low income people with disabilities, 
including people not currently in the generic rental market. In 
addition, the Committee directs HUD to report back on the 
number of persons assisted under the section 8 set-aside 
program.
    HUD is directed to study whether additional staff is 
necessary in the Office of Manufactured Housing to ensure that 
the office can effectively respond to questions concerning the 
uniformity and consistency of code revision, interpretation, 
and enforcement of federal preemptive construction standards.

                    OTHER ASSISTED HOUSING PROGRAMS

                       RENTAL HOUSING ASSISTANCE

                              (rescission)

    The Housing and Urban Development Act of 1968, as amended, 
authorizes the section 236 rental housing assistance program 
which subsidizes the monthly mortgage payment that an owner of 
a rental or cooperative project is required to make. This 
interest subsidy reduces rents for lower income tenants. No new 
commitment activity has occurred in this program since 1973.
    The Committee recommends reducing no more than $7,350,000 
in uncommitted balances of contract authority in fiscal year 
1998; however, up to $125,000,000 of recaptured budget 
authority shall be canceled.

                         FLEXIBLE SUBSIDY FUND

                          (transfer of funds)

    The Housing and Urban Development Act of 1968 authorized 
HUD to establish a revolving fund into which rental collections 
in excess of the established basic rents for units in section 
236 subsidized projects are deposited. Subject to approval in 
appropriations acts, the Secretary is authorized under the 
Housing and Community Development Amendment of 1978 to transfer 
excess rent collections received after 1978 to the Troubled 
Projects Operating Subsidy program, renamed the Flexible 
Subsidy Fund.
    The Committee recommends that the account continue to serve 
as a repository of excess rental charges appropriated from the 
Rental Housing Assistance Fund. Although these resources will 
not be used for new reservations, they will continue to offset 
Flexible Subsidy outlays and other discretionary expenditures.

                     federal housing administration

             FHA--Mutual Mortgage Insurance Program Account

                     (including transfers of funds)

----------------------------------------------------------------------------------------------------------------
                                         Limitation of direct        Limitation of                              
                                                loans               guaranteed loans     Administrative expenses
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation......             $200,000,000         $110,000,000,000             $333,421,000
Fiscal year 1997 appropriation.......              200,000,000          110,000,000,000              350,595,000
Fiscal year 1998 budget request......              200,000,000          110,000,000,000              333,421,000
Comparison with 1997 Appropriation...                        0                        0              -17,174,000
Comparison with fiscal year 1998                                                                                
 budget request......................                        0                        0                        0
----------------------------------------------------------------------------------------------------------------

    Beginning in 1992, the Federal Housing Administration (FHA) 
was split into two separate accounts. One account is the FHA-
mutual mortgage insurance program account and includes the 
mutual mortgage insurance (MMI) and cooperative management 
housing insurance (CMHI) funds. The other account is the FHA-
general and special risk program account and includes the 
general insurance (GI) and special risk insurance (SRI) funds.
    The mutual mortgage insurance program account covers the 
unsubsidized programs. The MMI fund consists of the basic 
single-family home mortgage program, the largest of all the FHA 
programs. The CMHI fund contains the cooperative housing 
insurance program which provides mortgages for cooperative 
housing projects of more than five units which are occupied by 
members of a cooperative housing corporation.
    The Committee recommends limiting the commitments in the 
FHA-MMI program account to $110,000,000,000 in fiscal year 1998 
and provides an appropriation of $333,421,000 for 
administrative expenses. The bill also includes the requested 
direct loan limitation of $200,000,000.

             FHA--General and Special Risk Program Account

                     (Including transfers of funds)

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Limitation of direct      Limitation of        Administrative                         
                                                                          loans           guaranteed loans          expenses            Program costs   
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation.................................          $120,000,000       $17,400,000,000          $222,305,000           $81,000,000
Fiscal year 1997 appropriation..................................           120,000,000        17,400,000,000           207,470,000            85,000,000
Fiscal year 1998 budget request.................................           120,000,000        17,400,000,000           222,305,000            81,000,000
Comparison with 1997 Appropriation..............................                     0                     0           +14,835,000            -4,000,000
Comparison with 1998 budget request.............................                     0                     0                     0                     0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The general and special risk insurance funds contain the 
largest number of programs administered by the FHA. The GI 
funds cover a wide variety of special purpose single and 
multifamily programs, including loans for property 
improvements, manufactured housing, multifamily rental housing, 
condominiums, housing for the elderly, hospitals, group 
practice facilities, and nursing homes. The SRI fund includes 
insurance programs for mortgages in older, declining urban 
areas which would not be otherwise eligible for insurance, 
mortgages with interest reduction payments, those for 
experimental housing, and for high-risk mortgagors who would 
not normally be eligible for mortgage insurance without housing 
counseling.
    The bill includes the budget request to limit loan 
guarantee commitments for the FHA-general and special risk 
insurance program account to $17,400,000,000 in fiscal year 
1998. The Committee recommends the budget requests of 
$81,000,000 for credit subsidy and $222,305,000 for 
administrative expenses and $120,000,000 limitation on direct 
loans.

                Government National Mortgage Association

                guarantees of mortgage-backed securities

                     loan guarantee program account

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                                     Limitation of                              
                                                                    guaranteed loans     Administrative expenses
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation...............................         $130,000,000,000               $9,383,000
Fiscal year 1997 appropriation................................          110,000,000,000                9,383,000
Fiscal year 1998 budget request...............................          130,000,000,000                9,383,000
Comparison with 1997 appropriation............................              +20,000,000                        0
Comparison with 1998 budget request...........................                        0                        0
----------------------------------------------------------------------------------------------------------------

    The guarantees of mortgage-backed securities program 
facilitates the financing of residential mortgage loans insured 
or guaranteed by the Federal Housing Administration (FHA), the 
Department of Veterans Affairs (VA) and the Farmers Home 
Administration (FmHA). Funds are provided through investments 
in and securities guaranteed by the Government National 
Mortgage Association (GNMA) which are backed by pools of such 
mortgages. The investment proceeds are used in turn to finance 
additional mortgage loans. Institutions which provide and 
service mortgages (such as mortgage companies, commercial 
banks, savings banks, and savings and loan associations) 
assemble pools of mortgages and issue securities backed by the 
pools. The program has attracted nontraditional sources of 
credit into the housing market. Approximately 70 percent of the 
funds used to purchase GNMA securities come from nontraditional 
mortgage investors, including pension and retirement funds, 
life insurance companies and individuals.
    As the President requested, the bill proposes language to 
limit loan guarantee commitments for mortgage-backed securities 
of the Government National Mortgage Association to 
$130,000,000,000 in 1998. In addition, an appropriation of 
$9,383,000 is provided to fund administrative expenses.

                    Policy Development and Research

                        research and technology

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $39,000,000
Fiscal year 1997 appropriation........................       $34,000,000
Fiscal year 1998 budget request.......................       $39,000,000
Comparison with fiscal year 1997 appropriation........       +$5,000,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Housing and Urban Development Act of 1970 directs the 
Secretary to undertake programs of research, studies, testing, 
and demonstrations related to the HUD mission. These functions 
are carried out internally; through contracts with industry, 
nonprofit research organizations, and educational institutions; 
and through agreements with state and local governments and 
other federal agencies.
    The bill includes $39,000,000 for research and technology 
in fiscal year 1998. The Committee notes that the enactment and 
the implementation of welfare reform has created major changes 
in the environment within which HUD housing assistance, 
including public housing, is delivered to low income families. 
Likewise, Congress is considering public and assisted housing 
reform legislation that will fundamentally alter the rules 
governing admissions and rent policies for housing assistance. 
Together, welfare reform and public and assisted housing policy 
reforms will have profound impacts for HUD, housing assistance 
recipients and public housing authorities. The Committee urges 
HUD to undertake research that includes the collection of hard 
data so that the Congress, the Department and the public will 
have a better understanding of both the fiscal and social 
implications of these welfare and housing policy reforms.
    The Committee believes that there are many available but 
currently underutilized technologies that can reduce 
development costs as well as operating costs and that can 
contribute to more affordable, energy efficient and sustainable 
homes. HUD, the Department of Energy, EPA, as well as private 
industry have compiled a considerable amount of research on 
these efforts.
    Moreover, HUD funds a considerable amount of construction 
activity under the HOPE VI program, the Native American Housing 
Block Grant program and the section 202 and section 811 
programs for the elderly and disabled. The Committee would like 
to see HUD program participants take full advantage of the 
considerable research that is available in these areas. To that 
end, the Committee recommends that HUD undertake greater 
efforts to disseminate existing information on ``best 
practices'' in these areas to accelerate their widespread 
adoption and contribute to more affordable and improved 
housing. In addition, the Committee recommends that HUD study 
how these technologies and ``best practices'' are being used by 
programs under its jurisdiction and report their findings to 
the Committee, along with any recommendations to increase use 
of these practices, by February 1, 1998.
    The Committee applauds HUD's participation in the 
President's Construction Goals process coordinated by the 
Department of Commerce and for its leadership in the 
interagency Homeownership Partnership. The Committee notes that 
each interagency body has called for an enhanced focus on the 
development of new housing technology in order to promote 
durability and affordability. With the Construction Goals 
process having issued its final report on strategies for 
enhanced housing technology and dissemination of technology 
information to a diverse and dispersed residential building 
industry, the Committee urges the Department to assert its 
rightful leadership role in coordinating and directing 
government wide efforts to spur housing technology research and 
development to improve the durability and affordability of our 
nation's existing and future housing stock.

                   Fair Housing and Equal Opportunity

                        fair housing activities

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $30,000,000
Fiscal year 1997 appropriation........................        30,000,000
Fiscal year 1998 budget request.......................        39,000,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......        -9,000,000
                                                                        

    The Fair Housing Act, title VIII of the Civil Rights Act of 
1968, as amended by the Fair Housing Amendments Act of 1988, 
prohibits discrimination in the sale, rental and financing of 
housing and authorizes assistance to state and local agencies 
in administering the provisions of the fair housing law.
    The Committee recommends providing $30,000,000, of which 
$15,000,000 is intended for FHAP and $15,000,000 is intended 
for FHIP. The FHAP assists state and local fair housing 
enforcement agencies that are certified by HUD as 
``substantially equivalent'' to HUD with respect to enforcement 
policies and procedures. The FHAP is intended to assure prompt 
and effective processing of complaints filed under title VIII 
that are within the jurisdiction of state and local fair 
housing agencies.
    It is the understanding of the Committee that 30 states 
currently have laws which are equivalent to the Fair Housing 
Act. Two states have laws which are equivalent on their face 
but are not participating in FHAP. Five states have proposals 
pending legal review or legislative action and 13 states do not 
have ``substantially equivalent'' fair housing laws.
    The Committee considers FHAP to be an effective program 
consistent with Congress' intent that regulatory 
responsibilities rest with state and local governments wherever 
appropriate. State and local agencies are best positioned to 
assess the circumstances surrounding, and to take remedial 
action to address fair housing complaints within their 
jurisdiction.
    The Committee has provided the full $15,000,000 for FHAP 
sought by HUD based on HUD's expectation of the number of 
``substantially equivalent'' state and local fair housing 
agencies. The Committee desires that adequate funding be 
available to provide assistance to all jurisdictions that may 
become ``substantially equivalent'' during fiscal year 1998, 
and expects the Department to reallocate funds within the 
appropriation, if necessary, in order to meet this goal. The 
Committee requests the Department to make notice of any funds 
that would be reallocated from the FHIP to FHAP.
    The Fair Housing Initiatives Program (FHIP) is authorized 
by section 561 of the Housing and Community Development Act of 
1987, as amended by section 905 of the Housing and Community 
Development act of 1992. The FHIP is intended to alleviate 
housing discrimination by providing support to private 
nonprofit organizations, state and local government agencies 
and other nonfederal entities for the purpose of eliminating or 
preventing discrimination in housing, and to enhance fair 
housing opportunities.
    The Committee is encouraged by HUD's recent testimony and 
correspondence stating that the Office of Fair Housing and 
Equal Opportunity does not intend to use FHIP funds to solicit 
or fund applications that would address enforcement of the Fair 
Housing Act against property insurers. As the Committee has 
previously emphasized, given the limited resources available 
for enforcement of title VIII, it is appropriate that funds 
should serve the particular purposes expressly identified by 
Congress in the statute. The Committee appreciates HUD's 
acknowledgment of these budgetary priorities and looks forward 
to the agency's continued cooperation in adhering to them.

                     Management and Administration

                         salaries and expenses

                     (including transfers of funds)

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         By transfer                                    
                                                                    ------------------------------------------------------------------------------------
                                                                      Appropriation      FHA funds        GNMA funds          CPD             Total     
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 1998 recommendation.............................................     $451,000,000     $544,443,000       $9,383,000       $1,000,000   $1,005,826,000
FY 1997 appropriation..............................................      420,000,000      546,782,000        9,383,000          675,000      976,840,000
FY 1998 budget request.............................................      451,000,000      544,443,000        9,383,000        1,000,000    1,005,826,000
Comparison with 1997 appropriation.................................      +31,000,000       -2,339,000                0         +325,000      +28,986,000
Comparison with 1998 budget request................................                0                0                0                0                0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Administration requests a single appropriation to 
finance all salaries and related costs associated with 
administering the programs of the Department of Housing and 
Urban Development, except the Office of Inspector General and 
the Office of Federal Housing Enterprise Oversight. These 
activities include housing, mortgage credit, and secondary 
market programs; community planning and development programs; 
departmental management; legal services; and field direction 
and administration. The Committee recommends funding salaries 
and expenses at the requested level.
    HUD is directed to brief the Committee on the newest 
management plan for the Department and its impact on the Santa 
Ana field office. The HUD Santa Ana field office is extremely 
important to its clients in Southern California. The office 
processes a substantial volume of single-family insured loans 
and handles significant walk-in business. The Committee 
supports HUD's efforts to downsize its structure. This 
reorganization, however, should not be accomplished merely for 
the sake of staff reduction, but should be done after careful 
study and review of the importance and level of business done 
at each field office.

                      office of inspector general

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                                                    Drug elim.                  
                                                   Appropriation     FHA funds        grants           Total    
----------------------------------------------------------------------------------------------------------------
FY 1998 recommendation..........................     $45,567,000     $11,283,000     $10,000,000     $66,850,000
FY 1997 appropriation...........................      36,567,000      11,283,000       5,000,000      52,850,000
FY 1998 budget request..........................      36,567,000      11,283,000      10,000,000      57,850,000
Comparison with 1997 appropriation..............      +9,000,000               0      +5,000,000     +14,000,000
Comparison with 1998 budget request.............      +9,000,000               0               0      +9,000,000
----------------------------------------------------------------------------------------------------------------

    This appropriation provides agency-wide 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. The audit function provides internal audit, 
contract audit, and inspection services. Contract audits 
provide professional advice to agency contracting officials on 
accounting and financial matters relative to negotiation, 
award, administration, repricing, and settlement of contracts. 
Internal audits review and evaluate all facets of agency 
operations. Inspection services provide detailed technical 
evaluations of agency operations. The investigative function 
provides for the detection and investigation of improper and 
illegal activities involving programs, personnel, and 
operations.
    The bill includes $45,567,000 for the Office of Inspector 
General, as well as $11,283,000 transferred from the various 
funds of the FHA and $10,000,000 transferred from Drug 
Elimination Grants. These funds increase the Office of the 
Inspector General by $9,000,000.
    The Committee believes the functions carried out by the 
Inspector General's office are extremely important and commends 
the Inspector General for focusing greater attention on public 
housing problems, including waste and abuse; creating and 
successfully implementing the Operation Safe Home program; and 
for pursuing equity skimming litigation aggressively. The 
Committee recommends that the OIG conduct a comprehensive and 
in-depth review of selected cities to identify and prosecute 
fraud affecting HUD programs and funds and has increased the 
OIG's account to enable it to undertake this initiative.

             Office of Federal Housing Enterprise Oversight

                         salaries and expenses

                     (including transfer of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $16,312,000
Fiscal year 1997 appropriation........................        15,500,000
Fiscal year 1998 budget request.......................        16,312,000
Comparison with fiscal year 1997 appropriation........          +812,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Office of Federal Housing Enterprise Oversight (OFHEO) 
was established in 1992 to regulate the financial safety and 
soundness of the two housing government-sponsored enterprises 
(GSEs)--the Federal National Mortgage Association (Fannie Mae) 
and the Federal Home Loan Mortgage Corporation (Freddie Mac). 
The office was authorized in the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992, and gave the 
regulator enhanced authority to enforce these standards. In 
addition to financial regulation, the OFHEO monitors the GSEs 
compliance with affordable housing goals that were contained in 
the Act.
    The bill funds OFHEO at the President's request of 
$16,312,000. These funds will be collected from Fannie Mae and 
Freddie Mac. The Committee included requested authority to 
OFHEO allowing it greater flexibility in budgeting and 
operating its appropriation. This technical change was approved 
by the Chairman of the Subcommittee on Capital Markets, 
Securities and Government-Sponsored Enterprises.

                       administrative provisions

    The bill contains a number of administrative provisions 
designed to reduce costs at HUD including: 1) a three month 
delay in reissuance of section 8 voucher; 2) a limitation on 
high costs units and a reduction in annual adjustment factors 
(AAFs) for residents who stay in assisted housing; and 3) an 
extension of the freeze on AAF's in high-cost project units to 
all project-based units. Another administrative provision 
exempts the City of Oglesby, Illinois, from complying with the 
30-day public comment period required for environmental 
assessments in the community development grants program.
    Finally, the Committee has included provisions to impose a 
minimum rent in public and assisted housing and a hold-harmless 
provision for HOME program participating jurisdictions that 
would be adversely impacted by the increase in appropriations 
funding.

                               TITLE III

                          INDEPENDENT AGENCIES

                  American Battle Monuments Commission

                         Salaries and Expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $26,897,000
Fiscal year 1997 appropriation........................        22,265,000
Fiscal year 1998 budget request.......................        23,897,000
Comparison with fiscal year 1997 appropriation........        +4,632,000
Comparison with fiscal year 1997 budget request.......        +3,000,000
                                                                        

    The Commission is responsible for the administration, 
operation and maintenance of cemetery and war memorials to 
commemorate the achievements and sacrifices of the American 
Armed Forces where they have served since April 6, 1917. In 
performing these functions, the American Battle Monuments 
Commission maintains twenty-four permanent American military 
cemetery memorials and thirty-one monuments, memorials, markers 
and offices in fifteen foreign countries, the Commonwealth of 
the Northern Mariana Islands, and the British dependency of 
Gibraltar. In addition, five memorials are located in the 
United States: the East Coast Memorial in New York; the West 
Coast Memorial, The Presidio, in San Francisco; the Honolulu 
Memorial in the National Memorial Cemetery of the Pacific in 
Honolulu, Hawaii; and the American Expeditionary Forces 
Memorial and the Korean War Veterans Memorial in Washington, 
DC.
    The Committee recommends $26,897,000 for fiscal year 1998 
to administer, operate and maintain the Commission's monuments, 
cemeteries, and memorials throughout the world. This amount 
represents an increase of $3,000,000 above the budget request 
and is for the highest priority projects in the equipment and 
maintenance backlog. The Commission estimates that with the 
requested funding level, the backlog of such projects will 
total $8,400,000 at the end of fiscal year 1998. The Committee 
intends over the next few years that the backlog be further 
reduced. These actions will ensure that the cemeteries and 
memorials under ABMC's jurisdiction are maintained at a high 
standard to reflect the nation's continuing commitment to its 
Honored War Dead and their families. These funds will support a 
staffing level of 363, a decrease of one below the 1997 level.
    The Committee is aware of design and construction problems 
with the Korean War Veterans Memorial. While supporting the 
restoration efforts by ABMC, the National Park Service, and the 
Corps of Engineers, the Committee expects that reimbursement 
from those responsible for the problems will be pursued. 
Clearly, such problems should not occur in a project that was 
dedicated only last year. The Committee also expects that ABMC 
will take action to ensure that similar problems do not occur 
in the design and construction of the World War II Memorial.

                       Department of The Treasury

              Community Development Financial Institutions

   community development financial institutions fund Program Account

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $125,000,000
Fiscal year 1997 appropriation........................        50,000,000
Fiscal year 1998 budget request.......................       125,000,000
Comparison with fiscal year 1997 appropriation........       +75,000,000
Comparison with fiscal year 1998 request..............                 0
                                                                        

    The CDFI fund provides 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 micro-loan 
funds. Recipients must use the funds to support mortgage, small 
business, and economic development lending in currently 
underserved, distressed neighborhoods. The CDFI fund also 
operates as an information clearinghouse for community 
development lenders.
    The Committee recommends an appropriation of $125,000,000 
for the program in fiscal year 1998. The recommendation is an 
increase of $75,000,000 compared to the fiscal year 1997 
program and is the same as the fiscal year 1998 President's 
budget request.
    The Committee's recommended funding level includes 
$5,500,000 for Management and Administration, $40,000,000 for 
Incentives for Depository Institutions, $20,000,000 for Direct 
Loan Subsidies, and $59,500,000 for assistance to CDFI's.
    The Committee is aware of allegations of improper 
activities surrounding the first round of awards for this 
program and expects the Department of Treasury Inspector 
General to expeditiously and aggressively investigate the 
allegations. The Committee has recommended funding this program 
despite the allegations for the obvious reason that guilt must 
first be proven before punishment is administered. In addition, 
the Committee wholeheartedly endorses the goals of the program 
and believes that any process abuses can be corrected without 
destroying the program.
    The Committee is particularly interested in the Fund's 
potential to increase the capacity of institutions, including 
activities that support microenterprise development, building 
the skills, assets, and earnings of low-income and 
disadvantaged individuals in the United States. Over the past 
decade, microenterprise development has demonstrated 
considerable promise as a means to alleviate poverty, create 
jobs and financial assets, and revitalize distressed urban, 
rural, and reservation-based communities. Hundreds of CDFIs and 
other organization across the country now provide micro-loans 
and financial services to tens of thousands of entrepreneurs 
that are unable to access traditional sources of credit, 
management expertise, and business services.
    Specifically, the Committee urges the Fund to seek to 
strengthen, through training and technical assistance, CDFIs 
that provide services to low-income microentrepreneurs and 
self-employed individuals. The Committee also urges the 
promotion of community partnerships that link CDFIs to 
microenterprise development organizations that provided 
development services but do not provide financing directly. The 
Committee directs the Program Office to report annually on its 
activities in support of CDFIs and micro-lending organizations 
that provide services to low-income entrepreneurs.

                   Consumer Product Safety Commission

                         salaries and expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $44,000,000
Fiscal year 1997 appropriation........................        42,500,000
Fiscal year 1998 budget request.......................        45,000,000
Comparison with fiscal year 1997 appropriation........        +1,500,000
Comparison with fiscal year 1998 request..............        -1,000,000
                                                                        

    The Consumer Product Safety Act established the Consumer 
Product Safety Commission, an independent Federal regulatory 
agency, to reduce unreasonable risk of injury associated with 
consumer products. Its primary responsibilities and overall 
goals are: to protect the public against unreasonable risk of 
injury associated with consumer products; to develop uniform 
safety standards for consumer products, minimizing conflicting 
State and local regulations; and to promote research into 
prevention of product-related deaths, illnesses, and injuries.
    The Committee recommends an appropriation of $44,000,000 
for fiscal year 1998, a decrease of $1,000,000 from the 
President's budget request and an increase of $1,500,000 to the 
fiscal year 1997 level.
    The Committee recommendation includes a non-prejudicial 
reduction of $1,000,000. The agency is directed to apply this 
reduction in an equitable manner rather than applying all of 
the reduction to only one or two programs.

             Corporation for National and Community Service

       national and community service programs operating expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $400,500,000
Fiscal year 1997 appropriation........................       400,500,000
Fiscal year 1998 budget request.......................       546,500,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......      -146,000,000
                                                                        

    The Corporation for National and Community Service was 
established by the National and Community Service Trust Act of 
1993 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. Funds for the Volunteers in Service to America 
and the National Senior Service Corps are provided in the 
Labor-Health and Human Services-Education Appropriations bill.
    The budget requests $546,500,000 for the national and 
community service programs operating expenses account in fiscal 
year 1998, an increase of $146,000,000 above the fiscal year 
1997 appropriation. Bill language is being proposed which would 
earmark $162,000,000 for a new America Reads initiative. The 
America Reads proposal is a national effort to build a citizen 
army of one million volunteer tutors to make sure every child 
can read well and independently by the end of the third grade. 
In addition to the $162,000,000 being requested in this bill, 
$38,000,000 is being requested in the Labor-Health and Human 
Services-Education bill. This $200,000,000, together with 
$260,000,000 requested for the Department of Education, brings 
the total America Reads request to $460,000,000. Over five 
years, the total amount for America Reads is approximately 
$2,500,000,000.
    The bill includes $400,500,000 for the AmeriCorps program 
in fiscal year 1998, the same level as provided in the current 
year. The Committee has not included the legislative earmarking 
for America Reads, nor has it prohibited the use of funds for 
that type of activity. The Corporation may utilize its funds 
for any authorized activity, including literacy training and 
mentoring. The Committee notes that AmeriCorps participants 
currently engage in such activities.
    The bill continues most of the program limitations carried 
in the 1997 Act, adjusted to reflect current cost estimates, 
instead of the proposed language. The bill also continues 
language prohibiting grants to Federal agencies; and, to the 
extent practicable, encourages an increase in matching funds 
and in-kind contributions, expands educational awards, and 
reduces the cost per participant.
    Last year, the Corporation committed to reducing the cost 
per member in the AmeriCorps program to $17,000 in 1997, 
$16,000 in 1998, and $15,000 in 1999. The Committee endorses 
the Corporation's efforts to reduce the cost per participant.
    The budget requests up to $10,000,000 for national services 
scholarships in fiscal year 1998 for high school students 
performing community service. The scholarships are for 
outstanding volunteer unpaid service that students will have 
done while in high school. This program was created to provide 
recipients with at least $1,000 for college costs, of which 
$500 will come from Corporation funds and at least $500 will 
come from local scholarship sponsors. The Committee supports 
this program and notes that approximately $3,000,000 will be 
spent for these scholarships in fiscal year 1997.
    The Corporation has experienced difficulties with its 
accounting and financial management systems. The Corporation 
plans to utilize $3,000,000 make improvements in its financial 
management system. The Committee approves of these efforts to 
make needed investments.


                      office of inspector general

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................        $2,000,000
Fiscal year 1997 appropriation........................         2,000,000
Fiscal year 1998 budget request.......................         2,500,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......          -500,000
                                                                        

    The Office of Inspector General is authorized by the 
Inspector General Act of 1978, as amended. This Office provides 
an independent assessment of all Corporation operations and 
programs, including those of the Volunteers in Service to 
America and the National Senior Service Corps, through audits, 
investigations, and other proactive projects.
    The bill includes $2,000,000 for the Office of Inspector 
General in fiscal year 1998. This is the amount provided in the 
current year and $500,000 below the budget request.

                       Court of Veterans Appeals

                         salaries and expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................        $9,319,000
Fiscal year 1997 appropriation........................         9,229,000
Fiscal year 1998 budget request.......................         9,380,000
Comparison with fiscal year 1997 appropriation........           +90,000
Comparison with fiscal year 1998 budget request.......           -61,000
                                                                        

    The Veterans Benefits Administration Adjudication Procedure 
and Judiciary Review Act established the Court of Veterans 
Appeals. The Court reviews appeals from Department of Veterans 
Affairs claimants seeking review of a benefit denial. The Court 
has the authority to overturn findings of fact, regulations and 
interpretations of law.
    The bill includes $9,319,000 for the Court of Veterans 
Appeals in fiscal year 1998, a decrease of $61,000 below the 
budget request. The recommendation includes the budget request 
of $8,529,000 for the operations of the Court and $790,000 for 
the pro bono representation program. The decrease in the pro 
bono representation program from the $851,000 requested to 
$790,000 is pursuant to a revised request for the Veterans 
Consortium Advisory Committee. The bill also includes language 
earmarking $790,000 for the pro bono representation program.

                      Department of Defense--Civil

                       Cemeterial Expenses, Army

                         salaries and expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $11,815,000
Fiscal year 1997 appropriation........................        11,600,000
Fiscal year 1998 budget request.......................        11,815,000
Comparison with fiscal year 1997 appropriation........          +215,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Secretary of the Army is responsible for the 
administration, operation and maintenance of Arlington National 
Cemetery and the Soldiers' and Airmen's Home National Cemetery. 
At the close of fiscal year 1996, the remains of 260,826 
persons were interred/inured in these cemeteries. Of this 
total, 226,677 persons were interred and 19,838 remains inured 
in the Columbarium in Arlington National Cemetery, and 14,311 
remains were interred in the Soldiers' and Airmen's Home 
National Cemetery. There were 3,325 interments and 1,733 
inurnments in fiscal year 1996. It is projected that there will 
be 3,500 interments and 1,900 inurnments in fiscal year 1997; 
and 3,500 interments and 1,900 inurnments in fiscal year 1998. 
In addition to its principal function as a national cemetery, 
Arlington is the site of approximately 2,700 nonfuneral 
ceremonies each year and has approximately 4,000,000 visitors 
annually.
    The Committee recommends the budget request of $11,815,000 
and 117 full-time equivalents to administer, operate, maintain 
and provide ongoing development at the Arlington National and 
Soldiers' and Airmen's Home National Cemeteries in fiscal year 
1998.

                    Environmental Protection Agency

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $7,232,077,000
Fiscal year 1997 appropriation........................     6,799,393,000
Fiscal year 1998 budget request.......................     7,645,493,000
Comparison with fiscal year 1997 appropriation........      +432,684,000
Comparison with fiscal year 1998 budget request.......      -413,416,000
                                                                        

    The Environmental Protection Agency was created by 
Reorganization Plan No. 3 of 1970, which consolidated nine 
programs from five different agencies and departments. Major 
EPA programs include air and water quality, drinking water, 
hazardous waste, pesticides, radiation, toxic substances, 
enforcement and compliance assurance, pollution prevention, oil 
spills, Superfund and the Leaking Underground Storage Tank 
(LUST) program. In addition, EPA provides Federal assistance 
for wastewater treatment, drinking water facilities, and other 
water infrastructure projects. The agency is responsible for 
conducting research and development, establishing environmental 
standards through the use of risk assessment and cost-benefit 
analysis, monitoring pollution conditions, seeking compliance 
through a variety of means, managing audits and investigations, 
and providing technical assistance and grant support to states 
and tribes, which are delegated authority for actual program 
implementation. Finally, the Agency participates in some 
international environmental activities.
    Among the statutes for which the Environmental Protection 
Agency has sole or significant oversight responsibilities are:
    National Environmental Policy Act of 1969, as amended.
    Federal Insecticide, Fungicide, and Rodenticide Act, as 
amended.
    Toxic Substances Control Act, as amended.
    Federal Water Pollution Control Act, as amended.
    Marine Protection, Research, and Sanctuaries Act of 1972, 
as amended.
    Oil Pollution Act of 1990.
    Public Health Service Act (Title XIV), as amended.
    Solid Waste Disposal Act, as amended.
    Clean Air Act, as amended.
    Safe Drinking Water Act, as amended.
    Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980, as amended.
    Emergency Planning and Community Right-to-Know Act of 1986.
    Pollution Prevention Act of 1990.
    Resource Conservation and Recovery Act, as amended.
    For fiscal year 1998, the Committee has recommended a total 
program and support level of $7,232,077,000, an increase of 
$432,684,000 from the fiscal year 1997 level and a decrease of 
$413,416,000 from the budget request.
    The Committee notes that the so-called ``Budget Agreement'' 
reached between the Congress and the Administration in May, 
1997, requires that the ``operating'' programs of the 
Environmental Protection Agency be funded at the aggregate 
level requested by the President in his February 1997 budget 
submission. It is well understood that the ``operating'' 
programs of EPA include the appropriations accounts titled 
Science and Technology, Environmental Programs and Management, 
Office of Inspector General, Buildings and Facilities, Oil 
Spill Response, and that portion of the State and Tribal 
Assistance Grants which constitute specific environmental 
categorical grants to state, local and tribal governments. For 
fiscal year 1998, the President's aggregate request for 
programs in these areas totaled $3,402,037,300. The Committee's 
recommendation for these same programs contained herein totals 
$3,402,703,000, an increase of $665,700 above the budget 
request. The Committee believes, therefore, that it has met 
both the letter and the spirit of this Executive-Legislative 
agreement.
    Of the amounts approved in the following appropriations 
accounts, the Agency must limit transfers of funds between 
programs and activities to not more than $500,000, except as 
specifically noted, without prior approval of the Committee. No 
changes may be made to any account or program element, except 
as approved by the Committee, if it is construed to be policy 
or a change in policy. Any activity or program cited in the 
report shall be construed as the position of the Committee and 
should not be subject to reductions or reprogramming without 
prior approval of the Committee. It is the intent of the 
Committee that all carryover funds in the various 
appropriations accounts are subject to the normal reprogramming 
requirements outlined above. The Agency is expected to comply 
with all normal rules and regulations in carrying out these 
directives. Finally, the Committee wishes to continue to be 
notified regarding reorganizations of offices, programs, or 
activities prior to the planned implementation of such 
reorganizations.

                         SCIENCE AND TECHNOLOGY

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation \1\...................      $656,223,000
Fiscal year 1997 appropriation........................       552,000,000
Fiscal year 1998 budget request.......................       614,269,400
Comparison with fiscal year 1997 appropriation........      +104,223,000
Comparison with fiscal year 1998 budget request.......       +41,953,600
                                                                        
                                                                        
\1\ Total does not include transfer of $35,000,000 from the Hazardous   
  Substance Superfund.                                                  

    The Science and Technology account funds all extramural 
Environmental Protection Agency research (including Hazardous 
Substances Superfund research activities) carried out through 
grants, contracts, and cooperative agreements with other 
Federal agencies, states, universities, and private business, 
as well as on an in-house basis. This account also funds 
supplies and operating expenses for all Agency research. 
Research addresses a wide range of environmental and health 
concerns across all environmental media and encompasses both 
long-term basic and near-term applied research to provide the 
scientific knowledge and technologies necessary for preventing, 
regulating, and abating pollution, and to anticipate merging 
environmental issues.
    The Committee has recommended an appropriation of 
$656,223,000 for Science and Technology for fiscal year 1998, 
an increase of $104,223,000 above the fiscal year 1997 level, 
and an increase of $41,953,600 above the 1998 budget request.
    The Committee's recommended appropriation includes the 
following increases to the budget request:
    $1,500,000 for continuation and Calif. Regional PM 10 & 2.5 
air quality study.
    $2,500,000 for EPSCoR.
    $700,000 for continuation of study of livestock and 
agricultural pollution abatement at Tarleton State University.
    $3,500,000 for Water Environment Research Foundation.
    $2,000,000 for continued research on urban waste management 
at the Univ. of New Orleans.
    $1,300,000 for continued oil spill remediation research at 
the La. Env. Research Center at McNeese State Univ.
    $2,000,000 for the Mickey Leland Natl. Urban Air Toxics 
Research Center.
    $5,000,000 for the American Water Works Assn. Research 
Foundation, including $1,000,000 for continued research on 
arsenic.
    $4,000,000 for the Natl. Decentralized Water Resource 
Capacity Development Project, in coordination with EPA, for 
continued training and R&D program.
    $1,500,000 for the Integrated Petroleum Environmental 
Consortium project, to be cost-shared.
    $750,000 for continued research at the Environmental Lung 
Center of the Natl. Jewish Medical and Research Center in 
Denver.
    $35,000,000 for comprehensive particulate matter research 
program, transferred to and conducted by NIEHS.
    $5,000,000 for additional ozone related research.
    $6,000,000 for continued research of the Salton Sea, 
including $1,000,000 to the University of Redlands and 
$5,000,000 for the Salton Sea Authority.
    $2,000,000 for research on treatment technologies relating 
to perchlorate within the Crafton-Redlands Plume, to be 
conducted through the East Valley Water Dist. California.
    Other Science and Technology program levels include:
          1. Climate change is funded at $16,900,000, a 3% 
        increase over the 1997 level;
          2. Global change is funded at $14,836,000, a 3% 
        increase over the 1997 level;
          3. The new Advanced Measurement program is funded at 
        $2,000,000; and
          4. The new Right to Know program for S & T as 
        announced at Kalamazoo is funded at $7,500,000.
    For Science and Technology, a general reduction of 
$10,000,000 is taken.
    The Committee's recommendation includes an additional 
$35,000,000 to Science and Technology for transfer to the 
National Institute of Environmental Health Sciences (NIEHS) to 
establish, in close coordination and cooperation with EPA and 
the Department of Energy, a short- and long-term air pollution 
program, focusing on particulate matter and ozone, that may 
include, but not be limited to the following:
          The size and composition of fine particulate matter 
        and the effects of such particulate matter on human 
        health, including any effects on tissue damage and lung 
        dysfunction;
          Studies of exposure to ambient and indoor levels of 
        fine particulate matter for the purpose of identifying 
        more accurate estimates of individual exposure to such 
        particulate matter;
          Controlled inhalation exposure studies to examine 
        dose-response relationships and mechanistic issues;
          Prospective epidemiological studies and longitudinal 
        health effects evaluations, based on measurements of 
        individual exposure to fine particulate matter, with 
        special emphasis on at-risk groups such as children, 
        the elderly, and people with chronic respiratory 
        problems;
          Interactive effects of air pollutants and allergens 
        including their association with the condition of 
        asthma and;
          Development of appropriate intervention strategies.
    In the development of this research program NIEHS, EPA and 
DOE are strongly encouraged to work with the Health Effects 
Institute and others in the public and private sectors.
    These research activities will be conducted primarily 
through peer-reviewed, competing grants, cooperative 
agreements, or contracts to institutions of higher education 
and national laboratories, as well as intramural studies and 
contracts. In addition to individual research project grants, 
NIEHS should give strong consideration to funding up to five 
multidisciplinary, multi-project programs at institutions of 
higher education. The governing criteria for such awards should 
include their ability to bring together biomedical and public 
health scientists, engineers, environmental scientists, 
geoscientists, economists, and policy analysts as part of a 
coordinated and comprehensive research effort. NIEHS should 
work with EPA and DOE to implement steps in the research 
proposal solicitation and award selection process that will 
ensure that the research activities are relevant to high 
priority topics and that the research results are reported to 
the appropriate agencies in a timely manner through accepted 
reporting practices.
    In addition, $4,400,000 of the funds transferred to NIEHS 
will be allocated to the DOE Office of Fossil Energy to support 
peer-reviewed, competitive research awards, primarily by 
qualified university-based and national laboratory individuals 
and/or consortia, for studies on source categories contributing 
to concentrations of fine particles so that cost-effective 
mitigation strategies can be developed, and to support the 
development of better and more accurate monitoring 
capabilities.
    The Committee expects that all research data will become 
available to the public, with proper safeguards for the 
researcher's first right of publication, for scientific 
integrity, for individuals participating in studies, and for 
proprietary commercial issues, and to prevent scientific fraud 
and misconduct.
    Finally, NIEHS, EPA and DOE are directed to report to the 
Committee on their specific plans for this research program as 
well as with periodic updates as the program develops.
    In addition to this new research program, the Committee has 
provided an increase of $5,000,000 for ozone related research 
to be conducted through ORD. This additional research should 
focus specifically on the nexus between biological response of 
humans from exposure to ozone and the onset of health effects 
from that exposure.
    In addition to the funds provided through appropriations 
directly to this account, the Committee has recommended that 
$35,000,000 be transferred to Science and Technology from the 
Hazardous Substance Superfund account for ongoing research 
activities consistent with the intent of the Comprehensive 
Environmental Response, Compensation, and Liability Act of 
1980, as amended. Further, the Committee fully supports the 
continuation of the Superfund Innovative Technology Evaluation 
(SITE) program at the budget request level. The program is 
expected to focus on the validation and verification of the 
performance of innovative technologies developed by the private 
sector that will serve to reduce remediation times and costs.
    Within the funds provided for Science and Technology, the 
Committee directs the continuation of a $2,000,000 initiative 
to transfer technology developed in federal laboratories to 
meet the environmental needs of small companies in the Great 
Lakes region. This initiative should be accomplished through a 
NASA sponsored Midwest regional technology transfer center 
working in collaboration with an HBCU from the region.
    The Committee's recommendation fully funds the 
Environmental Research Centers, and the Agency is directed to 
provide $3,000,000 from within appropriated resources for the 
university portion of the Southern Oxidants Study.
    Within available funds, the Committee urges the Agency to 
spend up to $1,000,000 to study, 1) the water quality and 
environmental impact of new cane sugar refining on both the 
Florida Everglades ecosystem and the Everglades Restoration 
Project, and 2) determine the source of water pollution in 
Water Conservation Areas One, Two, and Three of the Everglades 
Protection Area. The Committee requests the Agency to report 
back on the findings on the study, which should be completed by 
April 1, 1998.
    The Committee notes with interest the innovative approach 
to clean air research being developed by the City of Houston in 
its ``Houston Air eXcellence and Leadership'' (HAXL) program. 
By proposing a broad-based program to develop region-specific 
technical research and health impact data, the HAXL programs 
seeks to identify ways in which air pollution control policy 
can be targeted toward the precise pollutants that cause the 
most serious health impacts in a particular city or region--in 
this case, Houston. This unique, multi-pollutant strategy aims 
to maximize health benefits and cost efficiency by focusing on 
the specific needs of each particular area. The Committee notes 
further that the Houston area suffers some of the most severe 
and complex air quality problems found anywhere in the United 
States.
    The City anticipates that much of the funding for the HAXL 
program will be provided through shared state/local cooperative 
efforts, competitive grants, and private foundations. The HAXL 
program should receive strong consideration for federal funding 
as well, particularly for certain local health effects studies 
for which state and local sources are not traditionally 
available. The Committee believes that the HAXL program 
represents a practical, commonsense approach to clean air 
research that could have a significant impact on pollution 
control strategies for Houston and across the country.
    The Committee is aware of EPA's draft National Sediment 
Quality Survey issued in July 1996 in which the Agency 
concluded, among other things, that the preferred means of 
controlling sedimentation contamination risks to human health 
and the environment is through natural recovery. Despite this 
conclusion, however, dredging often is advocated even though 
the impact of such an invasive approach is often unknown. In 
light of this situation, the Committee directs that in 
assessing risks posed by the contamination by polychlorinated 
biphenyls of the upper Hudson River, New York, the Agency shall 
include an assessment and comparison of the risks to human 
health and the environment presented by alternative remedial 
measures, including natural recovery, source control, and 
dredging, capping, and disposal of contaminated sediments. 
Further, the Agency is directed to enter into an arrangement 
with the National Academy of Sciences to conduct a review which 
evaluates the availability, effectiveness, costs, and effects 
of technologies for the remediation of sediments contaminated 
with polychlorinated biphenyls, including dredging and 
disposal. Such a review should be completed by April 1, 1999.
    In a similar vein, the Committee remains concerned that 
alternatives be found to the ocean disposal of dredged 
materials. The Committee supports the ongoing research effort 
of the Agency to find cost-effective and environmentally safe 
alternatives to ocean disposal and urges that at the 
appropriate opportunity, a large-scale pilot project utilizing 
the expertise of other research organizations, such as 
Brookhaven National Laboratory and the New Jersey Institute of 
Technology, be developed and instituted.
    Again this year, the Committee notes that the Experimental 
Program to Stimulate Competitive Research (EPSCoR) is designed 
to improve the scientific and technological capacity of states 
with less developed research infrastructure. Developed with 
NASA and the National Science Foundation as partners, the 
Committee has provided EPA with $2,500,000 for its continued 
participation in this program. In addition, the Committee 
directs ORD to maintain its on-going commitment to the Middle 
Atlantic Region in terms of funding and FTEs to complete the 
demonstration and evaluation of the EMAP approach in a specific 
geographic area.
    The Committee again wishes to express its continued support 
for the new direction the Agency has chosen to take its 
research program. In this regard, the budget request's 
$7,000,000 increase for Fellowships is fully provided. With 
peer reviewed, meaningful, and quality research, the Agency 
will be better prepared to scientifically support its 
rulemaking activity, which has been criticized in recent years 
as often being deficient of a sound science base. Moreover, 
this new direction will foster a better foundation for the 
development of longer-term environmentally and scientifically 
sound policies and statutes for the consideration of the 
Congress. The Committee expects the program offices of the 
Agency to make extensive use of the Office of Research and 
Development (ORD) so that its programs and actions on an 
Agency-wide basis are justified with sound and credible 
science.
    As part of the peer review process, the Committee continues 
to expect the ORD to continue to place more reliance on 
oversight and review of its ongoing research by the Science 
Advisory Board, as well as by outside sources such as the 
National Academy of Sciences. The Board was created to offer 
scientific guidance in the development of research and policies 
of the Agency, and better use of the Board and the Academy 
throughout the Agency would likely enhance the credibility of 
much of what is suggested by the program offices.

                 ENVIRONMENTAL PROGRAMS AND MANAGEMENT

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $1,763,352,000
Fiscal year 1997 appropriation........................     1,752,221,000
Fiscal year 1998 budget request.......................     1,887,590,900
Comparison with fiscal year 1997 appropriation........       +11,131,000
Comparison with fiscal year 1998 budget request.......      -124,238,900
                                                                        

    The Environmental Programs and Management account 
encompasses a broad range of abatement, prevention, and 
compliance, and personnel compensation, benefits, and travel 
expenses for all media and programs of the Agency except 
Hazardous Substance Superfund, Leaking Underground Storage Tank 
Trust Fund, Oil Spill Response, and the Office of Inspector 
General.
    Abatement, prevention, and compliance activities include 
setting environmental standards, issuing permits, monitoring 
emissions and ambient conditions and providing technical and 
legal assistance toward compliance and oversight. In most 
cases, the states are directly responsible for actual operation 
of the various environmental programs. In this regard, the 
Agency's activities include oversight and assistance in the 
facilitation of the environmental statutes.
    In addition to program costs, this account funds 
administrative costs associated with the operating programs of 
the Agency, including support for executive direction, policy 
oversight, resources management, general office and building 
services for program operations, and direct implementation of 
all Agency environmental programs--except those previously 
mentioned--for Headquarters, the ten EPA Regional offices, and 
all non-research field operations.
    For fiscal year 1998, the Committee has recommended 
$1,763,352,000 for Environmental Programs and Management, an 
increase over the 1997 level of $11,131,000, and a decrease 
from the budget request of $124,238,900. This account 
encompasses most of those activities previously conducted 
through the Abatement, Control and Compliance and Program and 
Research Operations accounts. In 1996, these accounts, except 
for certain research operations and the state categorical grant 
program, were merged in order to provide greater spending 
flexibility for the Agency. Bill language is included which 
makes this appropriation available for two fiscal years and, 
for this account only, the Agency may transfer funds of not 
more than $500,000 between programs and activities without 
prior notice to the Committee, and of not more than $1,000,000 
without prior approval of the Committee. But for this 
difference, all other reprogramming procedures as outlined 
earlier shall apply.
    The Committee's recommended appropriation includes the 
following increases to the budget request:
    $3,000,000 for the Michigan Biotechnology Institute for 
continued development of viable cleanup technologies.
    $1,000,000 for the Lake Wallenpaupack, Penn. environmental 
restoration project.
    $372,000 for the Saint Vincent watershed environmental 
restoration project.
    $500,000 for continued activities of the Small Business 
Pollution Prevention Center at the Univ. of Northern Iowa.
    $2,679,000 for Natl. Estuary Program, including $400,000 
for Barnegat Bay National Estuary Program (total NEP 
$20,000,000).
    $3,372,000 for the Great Lakes Program. Funding for the 
program is at the 1996 level, including $14,700,000 for the GLN 
program office.
    $250,000 for design for a non-indigenous species dispersal 
barrier in the Chicago shipping and sanitary canal pursuant to 
Sec. 1202 of the Natl. Invasive Species Act, to be cost shared.
    $800,000 for continued work on the Ohio River watershed 
pollutant reduction program, to be cost shared.
    $2,000,000 for continuation of the Sacramento River Toxic 
Pollution Control Project, to be cost shared.
    $2,500,000 for water reuse demonstration projects in Yucca 
Valley ($800,000) and 29 Palms ($1,700,000), Calif.
    $700,000 for ongoing activities at the Canaan Valley 
Institute.
    $3,000,000 for the Southwest Center for Env. Research & 
Policy (SCERP).
    $6,000,000 for the National Institute for Environmental 
Renewal to establish a regional environmental data center, and 
to develop an integrated, automated water quality monitoring 
and information system for watersheds impacting the Chesapeake 
Bay.
    $500,000 for continuation of the Small Water Systems 
Institute at Montana State Univ.
    $5,150,000 for rural water technical assistance activities 
and groundwater protection bringing total program to 13,150,000 
with distribution as follows: $8,200,000 for the NRWA; 
$2,200,000 for RCAP; $400,000 for GWPC; $1,350,000 for Small 
Flows Clearinghouse; and $1,000,000 for the NETC.
    $2,000,000 for an environmental education center in 
Highland, Calif.
    $4,000,000 for continuation of the New York and New Jersey 
dredge decontamination project.
    $1,000,000 for continued work on the water quality 
management plan for the Skaneatles, Otisco and Owasco Lake 
watersheds.
    $400,000 for continued work on the Cortland, Co. New York 
aquifer protection plan.
    $300,000 for the NAS to conduct a study of the 
effectiveness of EPA's I&M programs.
    $400,000 for a non-profit organization to implement an 
action plan to accelerate the international phase-out of lead 
gasoline.
    $2,000,000 for the creation of five small public water 
system technology assistance centers pursuant to section 
1420(f) of The Safe Drinking Water Act, as amended.
    $500,000 for a waste water reuse study in the Victorville, 
California area.
    Other Environmental Programs and Management funding levels 
include:
          1. Under the Office of the Administrator, 
        Congressional and Legislative Affairs is funded at 
        $5,076,000 and Managerial Support is funded at 
        $3,536,000. Both represent 3% increases from the 1997 
        appropriated level;
          2. The Montreal Protocol Multilateral Fund is 
        provided $12,000,000;
          3. Under the Climate Change programs funded through 
        the Office of Air and Radiation, Green Lights receives 
        $22,308,000; Consumer Labeling receives $15,848,000; 
        Methane programs receives $8,577,000; the HFC/PFC 
        program receives $3,001,000; and the Regional 
        Implementation activity receives $1,088,000. All of 
        these programs would receive a 3% increase over the 
        1997 funding level;
          4. For the Office of Enforcement and Compliance, 
        Civil Enforcement would receive $71, 218,000; 
        Compliance Monitoring would receive $40,916,000; 
        Criminal Enforcement would receive $23,973,000; and 
        Program Leadership and Evaluation would receive 
        $46,579,000. These also represent 3% increases above 
        the 1997 level;
          5. The Global and Regional Environmental Risk 
        Reduction program under the Office of International 
        Affairs would be provided $2,734,000, a 3% increase;
          6. OPPE's Climate Change Action Plan would be funded 
        at $21,169,000, also a 3% increase over 1997;
          7. The Right to Know program, including the Kalamazoo 
        component, would be increased some 35% over 1997 to 
        $34,386,000;
          8. EPM's Specific Reinvention Programs line item 
        would be provided $77,269,000, a $10,000,000 increase 
        over 1997;
          9. The new Urban Livability program would receive 
        $3,023,000, $2,500,000 over the 1997 level; and
          10. The GLOBE program would receive no funds in 1998.
          For Environmental Programs and Management, a general 
        reduction of $65,500,000 is being taken.
    As in fiscal year 1997, the Committee continues to strongly 
support the EPA Finance Centers and directs that they be funded 
at the 1997 level. Similarly, the Committee directs the Agency 
to provide funding for the Environmental Justice Advisory 
Council at $400,000, fund environmental justice small community 
grants at $2,000,000, and provide community/university 
partnership environmental justice grants with $1,000,000.
    The Committee notes that the Great Lakes program office has 
been funded at the 1996 level of $14,700,000 within this 
account, and similarly notes its support for a fully funded 
Estuary Program. The Chesapeake Bay program is likewise fully 
funded at $20,254,000, including $1,300,000 for atmospheric 
deposition research activities.
    The budget request of nearly $11,000,000 for drinking water 
programs is provided in the Committee's recommendation, and the 
Committee expects that the National Environmental Education and 
Training Foundation will be funded at the 1997 level of 
$780,000. Additionally, the Committee urges the Agency to 
provide at least $3,000,000 to carry out the purposes of the 
Clean Air Act Amendments relative to the Great Waters program.
    The Office of Ombudsman at the Environmental Protection 
Agency has proved to be a valuable asset of the Agency, and the 
Committee strongly encourages the Agency to submit a budget for 
this office each year as an effective, permanent position.
    The Committee has provided full funding to continue efforts 
to ensure smooth implementation of notification of lead-based 
paint hazards during real estate transactions. This program is 
a joint effort between EPA, the Departments of Health and Human 
Services and Housing and Urban Development, and the National 
Association of Realtors, and is, in the Committee's judgment, a 
prime example of how cooperative efforts can produce excellent 
results. The Committee again applauds EPA, HHS, HUD and the 
Realtors for their joint efforts and expresses its support for 
continued outreach to ensure that housing consumers get good 
information about lead hazards, which can help prevent many 
poisonings.
    The Committee strongly recommends that the EPA work in 
conjunction with Metropolitan Dade County, Florida and provide 
$2,500,000 in fiscal year 1998 to undertake a national 
demonstration study to identify the most efficient procedures 
needed to solve sanitary system overflows (SSO) and alternate 
approaches to make the most efficient use of dwindling local, 
state, and federal resources. The study should follow the 
program outline as developed by Dade County Water and Sewer 
Department to create a model federal, state, and county 
partnership to address SSO problems.
    In a similar vein, the Committee urges that the 
Administrator of the EPA give priority to the Soil Aquifer 
Treatment research program for indirect potable reuse of highly 
treated domestic waste water being conducted in Arizona and 
California.
    The Committee notes its serious concerns regarding the new 
National Pollutant Discharge Elimination System (NPDES) general 
permit recently proposed by EPA's Region IV. This proposal 
would require individual permits for all oil and gas operations 
in water depths of 200 meters or less. The Committee believes 
this proposal will provide minimal environmental protection, 
while at the same time adding unnecessary costs and delays in 
the permitting process. Region IV thus is strongly encouraged 
to withdraw its proposal and consider using a NPDES general 
permit similar to the one used successfully by EPA's Region VI.
    While EPA's Office of Planning, Policy and Evaluation has 
successfully implemented program and activities incorporating 
the use of renewable energy resources, the Committee is 
concerned that substantive review, planning, and implementation 
of programs in collaboration with U.S. industry to utilize 
cost-effective renewable energy and efficiency technologies for 
pollution mitigation is virtually non-existent in other EPA 
offices, including International Activities, Pollution 
Prevention, Research and Development, and Air and Radiation. 
The Committee expects each of the four offices named herein as 
deficient in this area to report to the Committee by February 
1, 1998 on actions being taken to address these deficiencies.
    The Committee is concerned with the implementation of the 
Federal Agriculture Improvement and Reform Act by the various 
federal agencies, including EPA, which also share enforcement 
responsibilities of section 404 of the Clean Water Act. In the 
above mentioned Reform Act, Congress included language that 
clarified that rangeland was considered agricultural land for 
purposes of delineation of wetlands under section 404 of the 
Clean Water Act. It is the Committee's view that the 
restrictions and authorizations placed on framers under section 
404 are also applied to rangelands, particularly if such 
rangeland is being used for traditional agricultural purposes. 
It is the intent of Congress that normal agricultural 
activities are exempt from section 404 restrictions. Further, 
it is the intent of Congress that rangelands and farmlands be 
able to maintain normal or cyclical agricultural, silviculture, 
and ranching activities, including plowing, which means all 
forms of primary tillage, including moldboard, chisel, discing, 
wide-blade and deep-slip plowing, deep ripping, harrowing and 
other means used on a farm, vineyard, orchard, forest or 
rangeland, for the breaking up, cutting turning over, or 
stirring of soil to prepare it for agricultural activities. 
Such normal or cyclical activities also include seeding, 
cultivating, minor drainage and harvesting operations for the 
production of food fiber and forest products, and upland soil 
and water conservation practices.
    Over the past two years, the Committee has expressed 
interest in and support of the so-called ``cluster rule'' for 
the paper industry where standards for both air and water are 
``clustered'' in the rulemaking process so as to avoid the 
sometimes incompatible and contradictory results that sometimes 
occur when such standards are adopted individually. The 
development of this rulemaking has unfortunately moved much 
slower than anticipated, much to the difficulty of many of the 
concerned parties. The Agency is thus encouraged to do 
everything possible to complete its work on this process and 
bring it to fruition in a manner expected by both industry and 
the Congress when it was first proposed.
    The Committee remains concerned about the EPA's proposed 
rule to regulate plant breeding under the Federal Insecticide, 
Fungicide and Rodenticide Act (FIFRA). FIFRA was enacted to 
cover externally applied chemicals, and the proposed rule would 
require registration under FIFRA for genetic substances 
responsible for pest resistance in plants. The Committee 
directs that the Agency demonstrate an adequate need for the 
rule and establish that the rule would not result in a 
duplication of responsibility for FIFRA with other federal 
agencies that already have applicable authority under the law. 
With regard to this latter direction, the Agency should 
indicate in what manner it has coordinated its efforts so far 
on this matter with all other federal agencies which retain 
responsibilities under FIFRA, and report as to how its 
rulemaking activity will avoid multiplicity, unnecessary costs 
to the agencies, plant breeders and consumers, and how the rule 
will enhance the future development of new plant varieties.
    In floor debate on the 1997 appropriations measure, the 
Committee noted the severe environmental and health situation 
in and around the Hunts Point area of New York City. To assist 
in identifying the extent of this problem, the Agency is 
encouraged to consider conducting a comprehensive, independent 
study of the area. Such a study should include an analysis of 
the cumulative health and environmental impacts of identified 
pollution hazards in the area, and should make it possible for 
the local community to participate in the design and 
implementation of the study. The Committee will welcome a plan 
for such a study to be put forward in the 1998 Operating Plan.
    The Committee has become aware of a long-standing private 
claim against EPA and at least one other federal agency 
resulting from alleged violations of the Uniform Relocation Act 
in Jackson, Mississippi. Because many questions involving this 
matter remain to be answered, the Committee requests the Agency 
to provide it all relevant background information and assist 
the Committee in developing an appropriate solution at the 
earliest practicable time.
    The Committee is aware of the Western Governors 
Association's (WGA) Air Quality Initiative (AQI), which is 
focused on two major policy aspects of air quality management. 
The first focus of the AQI is a review of the State and Tribal 
Implementation Plan (SIP and TIP) development, approval and 
implementation process. The relationship between states and 
tribes and the EPA concerning SIPs and TIPs has been 
characterized by all parties as unwieldy and oftentimes 
unnecessarily contentious. To respond to this, the WGA through 
the AQI has convened key state, tribal, and federal air quality 
policymakers and regulators to review the historical 
relationships among the parties concerning SIPs and TIPs and 
will develop recommendations and a process for implementating 
these recommendations to improving the SIP/TIP process.
    The second major focus of the AQI is the development of 
incentive based or market oriented regulatory programs that 
could replace the more traditional command and control 
regulatory regimes. The emphasis on this aspect of the AQI 
would be to develop a regulatory framework that would enable 
emission sources to determine the most cost effective method 
for meeting air quality standards and goals. A contractor has 
been retained to develop the policy framework for a western 
regional incentive-based regulatory program. Also, additional 
contract assistance is expected to both assist in the 
development of the economic infrastructure for a market program 
and develop the means for including other sources in the market 
such as mobile sources. If successful, the AQI will develop a 
regulatory regulatory regime that would enable emission sources 
to meet air quality standards and goals developed to protect 
public health in a manner that is reflective of their 
individual needs and at less cost. This will hopefully result 
in earlier and more complete compliance without the rancor that 
typically accompanies command and control regulatory practices. 
The Committee encourages the Agency to continue its financial 
support of this endeavor from within available funds.
    The Committee is very concerned with the Agency's perceived 
inflexibility regarding the implementation of enhanced vehicle 
emission and inspection programs in a number of states. 
Specifically, the Committee's concern rests on the Agency's 
interpretation of language included in the National Highway 
System Designation Act of 1995. That measures states that ``the 
Administrator shall not require adoption or implementation by a 
state of a test-only I/M 240 enhanced vehicle inspection and 
maintenance program,'' and further states in the conference 
report accompanying the Act that I/M 240 ``is not practical in 
the decentralized system of emissions testing that has been 
relied on in the past.''
    Despite this language, however, EPA has until very recently 
required that states using equipment other than I/M 240 perform 
mass emssion transient testing (METT) on 0.1% of their affected 
vehicles, yet has only approved I/M 240 equipment to conduct 
the METT. The Committee believes that it was the intent of 
Congress to prohibit the mandating of I/M 240 for any purpose, 
whether for emission testing or evaluation testing. Therefore, 
the Committee urges the Agency to resolve this issue with the 
affected states and develop a non-METT test consistent with 
Congressional intent. The Committee further urges the Agency to 
develop alternatives which, as required by the Clean Air Act, 
are based on data collected during inspection and repair of 
vehicles. The alternatives also should be seamless to the 
customer, not result in increased costs to the customer or 
service station owner, and not result in a direct or indirect 
penalty to the state that is not using METT. In the event that 
the Agency has not made sufficient progress toward development 
of a non-METT evaluation method prior to final action on this 
bill, the Committee would expect to address this issue in 
ligislation.

                      OFFICE OF INSPECTOR GENERAL

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation \1\...................       $28,501,000
Fiscal year 1997 appropriation........................        28,500,000
Fiscal year 1998 budget request.......................        28,500,000
Comparison with fiscal year 1997 appropriation........            +1,000
Comparison with fiscal year 1998 budget request.......            +1,000
                                                                        
                                                                        
\1\ Total does not include transfer of $11,641,000 from the Hazardous   
  Substance Superfund account.                                          

    The Office of Inspector General (OIG) provides EPA audit 
and investigative functions to identify and recommend 
corrective actions of management, program, and administrative 
deficiencies which create conditions for existing and potential 
instances of fraud, waste, or mismanagement. The appropriation 
for the OIG is funded from two separate accounts: Office of 
Inspector General and Hazardous Substance Superfund.
    For fiscal year 1998, the Committee recommends a total 
appropriation of $40,142,000 for the Office of Inspector 
General, an increase of $65,000 from the 1997 level and an 
increase of $700 above the budget request. Of the amount 
provided, $11,641,000 shall be derived by transfer from the 
Hazardous Substance Superfund account. All funds within this 
account are to be considered two-year monies.

                        BUILDINGS AND FACILITIES

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $182,120,000
Fiscal year 1997 appropriation........................        87,220,000
Fiscal year 1998 budget request.......................       141,420,000
Comparison with fiscal year 1997 appropriation........       +94,900,000
Comparison with fiscal year 1998 budget request.......       +40,700,000
                                                                        

    This activity provides for the design and construction of 
EPA-owned facilities as well as for the operations, 
maintenance, repair, extension, alteration, and improvement of 
facilities utilized by the agency. The funds are to be used to 
pay nationwide FTS charges, correct unsafe conditions, protect 
health and safety of employees and Agency visitors, and prevent 
serious deterioration of structures and equipment.
    The Committee is recommending $182,120,000 for Buildings 
and Facilities, an increase of $94,900,000 above the fiscal 
year 1997 level and $40,700,000 above the budget request. This 
recommendation provides the budget request of $19,420,000 for 
necessary maintenance and repair costs at Agency facilities as 
well as ongoing renovation costs associated with EPA's new 
headquarters. The remaining $162,700,000 is for complete 
construction costs associated with EPA's new consolidated 
research facility at Research Triangle Park, North Carolina.
    The Committee notes that several years elapsed from the 
time the RTP facility was first planned until funds were 
secured and construction bids were let. Unfortunately, when 
these bids were finally received during fiscal year 1997, the 
cost associated with building this facility as originally 
planned had increased by some $40,700,000 over the authorized 
funding level of $232,000,000. To construct the facility within 
authorized limits would require that three parts--the ``high 
bay'' research facility, the computer center, and the day care 
center--be eliminated from current construction plans.
    The Committee strongly believes that eliminating portions 
of the original design, particularly the high bay and computer 
facilities, would, in the short term, be detrimental to the 
benefits associated with constructing this facility in the 
first place. Over the long term, the Committee suspects that 
construction of these additional facilities will eventually 
take place, although certainly at much greater cost. The 
Committee has therefore provided sufficient appropriations, and 
the necessary authorization, to construct this facility as 
originally planned by the Agency and approved by the Congress.
    Bill language has also been included again this year which 
specifically authorizes construction of this facility as a 
consolidated research facility.
    The Committee is aware of and interested in a recent 
proposal to construct a solid oxide fuel cell/gas turbine power 
system demonstration plant at EPA's new Fort Meade research 
facility. Such systems show great promise in producing and 
providing efficient, low polluting power resources. The 
Committee would therefore entertain a future budget request by 
the Agency to construct such a facility.

                     HAZARDOUS SUBSTANCE SUPERFUND

                     (INCLUDING TRANSFERS OF FUNDS)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $1,500,699,000
Fiscal year 1997 appropriation........................     1,394,245,000
Fiscal year 1998 budget request.......................     2,094,245,000
Comparison with fiscal year 1997 appropriation........      +106,454,000
Comparison with fiscal year 1998 budget request.......      -593,546,000
                                                                        

    The Hazardous Substance Superfund (Superfund) program was 
established in 1980 by the Comprehensive Environmental 
Response, Compensation, and Liability Act to clean up emergency 
hazardous materials, spills, and dangerous, uncontrolled, and/
or abandoned hazardous waste sites. The Superfund Amendments 
and Reauthorization Act (SARA) expanded the program 
substantially in 1986, authorizing approximately $8,500,000,000 
in revenues over five years. In 1990, the Omnibus Budget 
Reconciliation Act extended the program's authorization through 
1994 for $5,100,000,000 with taxing authority through calendar 
year 1995.
    The Superfund program is operated by EPA subject to annual 
appropriations from a dedicated trust fund and from general 
revenues. Enforcement activities heretofore employed were used 
to identify and induce parties responsible for hazardous waste 
problems to undertake clean-up actions and pay for EPA 
oversight of those actions. In addition, responsible parties 
have been required to cover the cost of fund-financed removal 
and remedial actions undertaken at spills and waste sites by 
Federal and state agencies. The Office of Inspector General 
also receives funding from this account.
    For fiscal year 1998, $1,500,699,000 has been recommended 
by the Committee, an increase of $106,454,000 from the fiscal 
year 1997 level, and a decrease of $593,546,000 from the amount 
included in the budget request. Bill language has been included 
which transfers $11,641,000 from this account to the Office of 
Inspector General and $35,000,000 to the Science and Technology 
account. The Committee expects EPA to prioritize resources to 
the actual cleanup of sites on the National Priority List and, 
to the greatest extent possible, limit resources directed to 
administration, oversight, support, studies, design, 
investigations, monitoring, assessment, and evaluation.
    The Committee's recommendation includes the following 
program levels:
          $870,000,000 for Superfund response/cleanup actions.
          $85,000,000 for Brownfields assessment activities.
          $202,000,000 for enforcement activities.
          $129,203,000 for management and support, including a 
        transfer of $11,641,000 to the Office of Inspector 
        General. Bill language is included which provides for 
        this transfer.
          $35,000,000 for research and development activities, 
        to be transferred to Science and Technology as proposed 
        in the budget request.
          $60,000,000 for transfer to the National Institute of 
        Environmental Health Sciences (NIEHS), including 
        $37,000,000 for research activities and $23,000,000 for 
        worker training.
          $80,000,000 for transfer to the Agency for Toxic 
        Substances and Disease Registry (ATSDR).
          $29,266,000 for transfer to the Department of 
        Justice. The Department's legal action associated with 
        the Superfund program generates over $200,000,000 
        annually which is deposited in the Superfund Trust 
        Fund, as well as annual cleanup responses by parties 
        valued at over $500,000,000.
          $9,833,000 for all other necessary, reimbursable 
        interagency activities, including $650,000 for OSHA, 
        $1,100,000 for FEMA, $2,432,000 for NOAA, $4,801,000 
        for the Coast Guard, and $850,000 for the Department of 
        the Interior.
    In addition to the $870,000,000 made available in this 
appropriation for specific clean-up actions, the Committee 
notes that, according to the General Accounting Office, at 
least an additional $171,000,000 of unspent funds from prior 
year work orders is immediately available to the Agency for 
additional clean-up work. These funds are available without the 
need for a final contract audit to be performed, and the GAO 
believes that an additional amount of $78,000,000 can be 
recovered once final audits are performed. Further, GAO has 
informed the Committee that recovered funds may be used to pay 
final audit costs, thus negating the need for the Committee to 
provide additional funds for audit purposes. Given this 
information provided by GAO, the Committee directs the Agency 
to move expeditiously to capture as much of these unspent funds 
as possible, so as to create a fiscal year 1998 clean-up 
account of nearly $1,100,000,000.
    For the management and support activity, the Committee's 
recommendation includes $1,012,700 for OAR, $25,545,200 for the 
Chief Financial Officer, $992,200 for OPPE, $84,000,300 for 
OARM, $3,159,500 for the General Counsel, $11,641,000 for the 
IG, and $2,852,100 for Administrative/Staff.
    While the Committee has essentially funded the full 
requested increase for the Brownfields program, it has not, for 
a variety of reasons, funded the proposed increase of 
approximately $650,000,000 to accelerate clean-up of NPL sites.
    First, the Committee's 602(b) allocation did not 
accommodate this additional request of the President. In fact, 
the budget agreement between the Executive and Legislative did 
not accommodate this increase, unless, according to the 
document, ``[Superfund] policies can be worked out.'' The 
Committee believes this unambiguous language can only refer to 
Superfund policy as set forth in law. Virtually all parties 
agree that the Superfund program has serious problems, yet it 
has remained unauthorized for nearly two years. Given that the 
Appropriations Committee has no jurisdiction to reauthorize 
this program, any interpretation of ``working out policies'' 
other than reauthorizing this important program defies logic if 
not credibility.
    Second, even if the Committee had been given an adequate 
allocation to accommodate this greatly increased budget 
request, significant questions remain as to both the substance 
and the logistics of the request. The history of this program 
has proved beyond a shadow of a doubt that just throwing money 
into the problem does not guarantee success. While the 
Committee acknowledges that several important administrative 
changes have improved the operation of the program, there 
remains little, if any, evidence that these changes are 
significant so as to warrant a 75 percent increase in one year. 
Moreover, despite numerous requests for complete information 
necessary to justify such an expense, the Agency has to date 
provided only portions of requested materials, some of which in 
fact raise more questions than they answer.
    Besides failing to provide the Committee with adequate 
information regarding specific sites and clean-up costs which 
are necessary to make an informed decision on behalf of the 
budget request, the Agency has also not addressed other 
important matters including the apparent lack of available, 
qualified contractors necessary to speed the process as 
proposed, and the ability of the States to finance their share 
of ``accelerated'' clean-up costs as is required by law.
    If money were no object, the Committee certainly would look 
more favorably on the Agency's request. Given the large, annual 
appropriations the Superfund program has received each of the 
last several years, the Committee stands second to no one in 
both words and action in support of the program. Unfortunately, 
money is an object, and the Committee takes seriously its 
responsibility to be good stewards of the limited resources at 
its disposal. Providing such additional funds in the face of 
inadequate justification by the Agency, at the expense of and 
detriment to other important EPA or other programs contained 
within this Act, would be nothing short of irresponsible.
    As noted above, the Committee has provided $85,000,000 for 
the Brownfields program, an increase of $48,900,000 above the 
1997 funding level and a decrease of $1,353,100 below the 
budget request. While the Committee has consistently shown 
strong support for this important program, it nevertheless is 
greatly concerned that some of the programs included in the 
budget request for Brownfields go well beyond both the spirit 
and the letter of the law. Statutory limits on the use of 
Superfund Trust Fund resources spell out very clearly that 
Trust Fund dollars may be used for remedial actions--that is, 
when there is an environmental ``hot-spot'' that needs 
immediate attention, and for removal actions--or clean-ups--
when a site is listed on the National Priority List of 
Superfund sites. While there may be Brownfields sites which 
qualify under this criteria--in which case they can and should 
receive necessary clean-up funds--the fact is very few fit into 
this category. It is thus clear to the Committee that the law 
simply preempts the expenditure of funds for ``revolving loan 
funds for clean-ups'', as well as for voluntary clean-up 
efforts as proposed in the budget request.
    While the Committee has included bill language which 
specifically limits the use of available Brownfields funds for 
assessments, training, and personnel costs, it would note that 
there are thousands of Brownfields sites throughout the nation 
that await the assessment work offered by the Agency. The 
Committee is therefore very confident this large Brownfields 
appropriation will be put to good use by the Agency.
    During fiscal year 1997, the EPA responded to a situation 
in several states that dealt with the illegal indoor 
application of the insecticide methyl parathion. While the 
Committee certainly understands the emergency nature of this 
situation, there nevertheless are significant legal questions 
surrounding the Agency's suddenly broad interpretation of its 
responsibilities under the law. Moreover, significant budgetary 
resources totaling nearly $70,000,000 have been taken from 
specific sites on the NPL and set aside for use to resolve 
methyl parathion problems.
    At its budget hearings on the Agency's fiscal year 1998 
budget request, the Committee expressed grave doubts about the 
legal authority of EPA to respond to matters such as this. 
Additionally, it questioned the wisdom of responding to the 
situation in the manner undertaken by the Agency. Perhaps most 
important, however, was its questioning as to why significant 
funds were both allocated and spent--in what some believe is in 
a manner totally inconsistent with the EPA Operating Plan--
before any notice was afforded the Committee. While the issue 
of legal responsibilities will doubtless be discussed at length 
in another forum, the Committee wishes to make it very clear to 
the Agency that it will not again tolerate the expenditure of 
funds for ``emergencies'' as was done in this instance. The 
Committee expects to be fully informed prior to the allocation 
or expenditure of any appropriated dollars for these 
``emergency'' situations.
    The Committee is aware of growing interest in the concept 
of fixed-price, at-risk contracting for the clean-up of so 
called ``orphan share'' Superfund sites. One such proposal has 
been made for the remediation of the Carolina Transformer Site 
in North Carolina. The Committee sees this innovative approach 
using nationally-permitted processes conforming to the Agency's 
Record of Decision (ROD) as having great potential to both 
speed the clean-up of sites and reduce the costs associated 
with such cleanups. The Agency is strongly encouraged to 
implement that proposal as quickly as possible and provide the 
Committee appropriate information relative to its benefit as 
another available tool for remediation of sites.
    It has come to the Committee's attention that the Agency 
has recently proposed the reversal of its long-standing policy 
of deferring to the Nuclear Regulatory Commission (NRC) for 
cleanup of NRC licensed sites. In the past, EPA has not placed 
sites which have been successfully remediated under the NRC on 
the National Priority List. The Committee is satisfied that the 
NRC has and will continue to remediate sites to a level that 
fully protects the public health and safety, and believes that 
reversing this policy is unwarranted and not a good use of 
public or private funds. EPA is therefore directed to continue 
its long-standing policy on this matter with the NRC and spend 
no funds to place NRC remediated sites on the NPL.
    The Committee continues to support the national pilot 
worker training program which recruits and trains young persons 
who live near hazardous waste sites or in the communities at 
risk of exposure to contaminated properties for work in the 
environmental field. The Committee directs EPA to continue 
funding this effort in cooperation and collaboration with 
NIEHS. The research activities of NIEHS can compliment the 
training and operational activities of EPA in carrying out this 
program. Moreover, an expanded focus to Brownfield 
communities--identified as the growing number of contaminated 
or potentially contaminated vacant or abandoned industrial 
sites--is critical in order to actively engage and train the 
under-served populations that are the focus of this effort. 
While the number of National Priorities List sites is remaining 
fairly static, there is a growing need for continued assessment 
activities at Brownfield sites across the country.
    The Committee has provided ATSDR an increase of $16,000,000 
over the budget request so that the large backlog of important 
and necessary health studies planned for both federal and non-
federal sites can begin to be addressed. The Committee requests 
ATSDR to provide timely updates of its progress in this regard. 
Again this year, the Committee directs that $4,000,000 of the 
funds provided to the ATSDR be used for minority health 
professions, and up to $2,500,000 be used for continuation of a 
health effects study on the consumption of Great Lakes fish. 
Finally, an additional $2,000,000 has been provided for ATSDR 
to continue its work on the Toms River, New Jersey cancer 
evaluation and research project.
    Of the funds provided for transfer from Hazardous Substance 
Superfund to Science and Technology, the Committee directs that 
$2,500,000 is for the Gulf Coast Hazardous Substance Research 
Center and that the other such research centers be funded at a 
level at least equal to the funding level provided in fiscal 
year 1996.
    It was noted during the Committee's fiscal year 1997 and 
1998 budget hearings for the EPA that the Superfund program has 
adopted a system for prioritizing sites for response/cleanup 
actions. The Committee strongly endorses this approach as a 
means of responding to those sites deserving of quicker 
response as well as from the standpoint of giving some 
assurance to local communities that ``their'' site will receive 
attention within a set time-frame. The Agency is to be 
commended for developing and utilizing this improved system.

                LEAKING UNDERGROUND STORAGE TANK PROGRAM

                     (INCLUDING TRANSFER OF FUNDS)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $60,000,000
Fiscal year 1997 appropriation........................        60,000,000
Fiscal year 1998 budget request.......................        71,210,700
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......       -11,210,700
                                                                        

    Subtitle I of the Solid Waste Disposal Act, as amended by 
the Superfund Amendments and Reauthorization Act, authorized 
the establishment of a response program for clean-up of 
releases from leaking underground storage tanks. Owners and 
operators of facilities with underground tanks must demonstrate 
financial responsibility and bear initial responsibility for 
clean-up. The Federal trust fund was funded through the now-
expired imposition of a motor fuel tax of one-tenth of a cent 
per gallon, which generated approximately $150,000,000 per 
year. Most states also have their own leaking underground 
storage tank programs, including a separate trust fund or other 
funding mechanism, in place.
    The Leaking Underground Storage Tank (LUST) Program 
provides additional clean-up resources and may also be used to 
enforce necessary corrective actions and to recover costs 
expended from the Fund for clean-up activities. The underground 
storage tank response program is designed to operate primarily 
through cooperative agreements with states. However, funds are 
also used for grants to non-state entities including Indian 
tribes under Section 8001 of the Resource Conservation and 
Recovery Act. Per the budget request for fiscal year 1998, the 
Office of Inspector General will receive no funding by transfer 
from the trust fund through this appropriation.
    For fiscal year 1998, the Committee has provided 
$60,000,000, the same as the 1997 appropriated level and a 
decrease of $11,210,700 from the fiscal year 1998 budget 
request. Bill language has been included again this year which 
limits administrative expenses during the fiscal year to 
$9,100,000.
    The Committee is aware of concerns expressed by several 
states that LUST funds not be used in a disproportionate manner 
for federal projects instead of state projects as anticipated 
by the authorizing statutes. The Committee concurs in this 
position of predominate use in the states and notes that its 
recommendation will allow for approximately 85% of the total 
appropriation to be used in the states.

                           OIL SPILL RESPONSE

                     (INCLUDING TRANSFER OF FUNDS)

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $15,000,000
Fiscal year 1997 appropriation........................        15,000,000
Fiscal year 1998 budget request.......................        15,000,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    This appropriation, authorized by the Federal Water 
Pollution Control Act 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 clean-up and removal 
activities posing a threat to public health and the 
environment; conducting site inspections; providing for a means 
to achieve cleanup activities by private parties; reviewing 
containment plans at facilities; reviewing area contingency 
plans; and pursuing cost recovery of fund-financed clean-ups. 
Funds are provided through the Oil Spill Liability Trust Fund 
which is composed of fees and collections made through 
provisions of the Oil Pollution Act of 1990, the Comprehensive 
Oil Pollution Liability and Compensation Act, the Deepwater 
Port Act of 1974, the Outer Continental Shelf Lands Act 
Amendments of 1978, and the Federal Water Pollution Control 
Act. Pursuant to law, the fund is managed by the United States 
Coast Guard.
    The Committee recommends $15,000,000 for fiscal year 1998, 
the same as that provided for fiscal year 1997 and the same as 
the budget request. Bill language is included which limits 
administrative expenses to $9,000,000.

                   STATE AND TRIBAL ASSISTANCE GRANTS

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $3,026,182,000
Fiscal year 1997 appropriation........................     2,910,207,000
Fiscal year 1998 budget request.......................     2,793,257,000
Comparison with fiscal year 1997 appropriation........      +115,975,000
Comparison with fiscal year 1998 budget request.......      +232,925,000
                                                                        

    The State and Tribal Assistance Grant account was created 
in fiscal year 1996 in an effort to consolidate programs, and 
provide grant funds for those programs, which are operated 
primarily by the states. This budget structure includes the 
Water Infrastructure/SRF account, which was intended to help 
eliminate municipal discharge of untreated or inadequately 
treated pollutants and thereby maintain or help restore this 
country's water to a swimmable and/or fishable quality, and 
miscellaneous state grant programs formerly included within the 
Abatement, Control and Compliance account.
    The largest portion of the STAG account, at $2.0 billion, 
is State Revolving Funds (SRF) water infrastructure grants 
which for more than a decade have been made to municipal, 
intermunicipal, state, interstate agencies, and tribal 
governments to assist in financing the planning, design, and 
construction of wastewater facilities. This account funds state 
revolving funds for wastewater as well as various grant 
programs to improve water quality, including the non-point 
source program under Section 319 of the Federal Water Pollution 
Control Act, as amended, as well as Public Water System 
Supervision grants.
    For fiscal year 1998, the Committee recommends a total of 
$3,026,182,000, an increase of $115,975,000 above the fiscal 
year 1997 level, and $232,925,000 above the level proposed in 
the budget request.
    The Committee's recommendation includes the following 
program levels:
    $1,250,000,000 for Clean Water State Revolving Funds.
    $750,000,000 for Safe Drinking Water State Revolving Funds.
    $750,257,000 for state and tribal program/categorical 
grants.
    $50,000,000 for high priority U.S./Mexico border projects.
    $50,000,000, the budget request, for Texas Colonias, to be 
cost shared.
    $15,000,000, the budget request, for Alaska rural and 
Native Villages, to be cost shared.
    $160,925,000 for special needs water and wastewater grants, 
including:
          $23,000,000 for Boston Harbor wastewater needs.
          $3,000,000 for continued wastewater needs in Bristol 
        County, Mass.
          $8,000,000 for New Orleans wastewater needs.
          $2,000,000 to implement drinking water facility 
        improvements under Title IV in Richmond and Lynchburg, 
        Va.
          $14,000,000 for continuation of the Rouge River 
        National Wet Weather Demonstration project.
          $5,000,000 for wastewater and water system needs of 
        the Omnalinda Water Association ($500,000); the Jenner 
        Township Sewer Authority ($2,600,000), and the North 
        Fayette County Municipal Authority ($1,900,000), Penn.
          $14,000,000 for the Millcreek Tube Sewer upgrade/
        combined sewer overflow project.
          $3,000,000 for phase one of Sacramento's wastewater 
        treatment facility upgrade.
          $3,400,000 for restoration of Weequahic Lake 
        ($3,000,000) and water quality initiatives at Lake 
        Hopatcong ($400,000), New Jersey.
          $10,000,000 for planning and implementation of a 
        storm water abatement system in the Doan Brook 
        Watershed Area, Ohio.
          $7,000,000 for wastewater infrastructure needs for 
        Kenner ($5,000,000) and Baton Rouge ($2,000,000), La.
          $3,250,000 for Ogden, Utah's sanitary storm sewer and 
        drinking water distribution systems.
          $3,000,000 to assist the Bad Axe, Michigan water 
        crisis.
          $10,000,000 to complete the wastewater improvement 
        program at the Clear Lake Sanitary District, Iowa.
          $7,000,000 for combined sewer overflow requirements 
        in Lycoming County ($4,000,000) and for wastewater 
        needs of the Pocono/Jackson Township Joint Authority 
        ($1,500,000) and Smithfield Township in Monroe County 
        ($1,500,000), Penn.
          $1,700,000 for phase two of the Geysers Effluent 
        Project in No. California.
          $14,000,000 for continued clean water improvements of 
        Onondaga Lake.
          $5,000,000 for wastewater and drinking system needs 
        in Clearfield, Mifflin, Snyder and Fulton Counties, 
        including Wallaceton-Boggs ($1,250,000); Decatur 
        Township ($150,000); Lawrenceville Township ($300,000); 
        Lyleville ($300,000); Lewistown ($1,000,000); McVeytown 
        ($500,000); Adams Township and Port Trevorton 
        ($500,000); Middleburg ($500,000); and McConnellsburg 
        ($500,000), Pennsylvania.
          $10,000,000 for water supply and wastewater needs for 
        the City of Burnside ($2,000,000); the City of 
        Williamsburg ($3,000,000); the City of Wayland 
        ($1,500,000); the City of Hyden ($1,500,000); and the 
        Morgan County Water District ($2,000,000), Kentucky.
          $1,275,000 for wastewater needs of East Mesa 
        ($700,000), West Mesa ($500,000), and Lordsburg 
        ($75,000), New Mexico.
          $50,000 for water and sewer improvements for the City 
        of Kinloch, Mo.
          $2,000,000 for an alternative water supply system in 
        Jackson County, Miss.
          $2,000,000 for wastewater facilities and improvements 
        in Essex County, Mass.
          $2,000,000 for the Milwaukee Metropolitan Sewerage 
        District urban watershed restoration project (Lincoln 
        Creek).
    $7,250,000 for export pipeline replacement to protect Lake 
Tahoe.
    For fiscal year 1998, the Committee again expects the 
Agency to work closely with the governments or entities 
receiving such special needs grants and develop and agree upon 
an appropriate non-federal cost share for each of the projects.
    The Committee has provided the full budget request for 
state and tribal program assistance/categorical grants and 
associated program support for all activities except air--where 
an increase of $25,000,000 is provided for monitoring and data 
collection--and section 319 grants--where an additional 
$10,000,000 is provided for all eligible programs including 
programs formerly funded through the Clean Lakes program. This 
recommendation includes the following programs with the 
appropriated amount for each: (1) air and radiation--state, 
local and tribal assistance, $200,516,800, including 
$53,466,300 for particulate matter monitoring and data 
collection activities; (2) enforcement and compliance 
assurance, $24,375,800; (3) field programs and external 
activities, $11,672,100; (4) environmental partnerships, 
$1,442,500; (5) lead grants, $13,712,200; (6) pollution 
prevention leadership, $5,999,500; (7) RCRA partnerships, 
$98,598,200; (8) underground storage tank partnerships, 
$10,544,700; (9) PWSS program grants, $93,780,500; (10) 
underground injection control grants, $10,500,000; (11) 
wetlands program grants, $15,000,000; (12) section 319 non-
point source pollution grants, including programs formerly 
eligible under the Clean lakes program, $110,000,000; (13) 
section 106 control agency resource supplemental grants, 
$95,529,300; (14) water quality cooperative agreements, 
$20,000,000 and; (15) Indian general assistance program grants, 
$38,585,400.
    As was the case in fiscal years 1996 and 1997, no 
reprogramming requests associated with States and Tribes 
applying for Partnership grants need to be submitted to the 
Committee for approval should such grants exceed the normal 
reprogramming limitations.
    The U.S./Mexico Foundation for Science was founded in 1992 
as a means to support joint research projects benefiting both 
nations. The Foundation has been supported by grants of both 
the United States and Mexican governments which is then 
leveraged with the use of donations from private sources. To 
date, the Foundation has focused its research on health, 
environmental and agricultural problems. The Committee believes 
that this type of cooperative effort is an important and 
effective way to enhance necessary research, and directs the 
Agency to allocate $1,000,000 of the Committee's recommended 
level for high priority border projects for this purpose.
    The Committee has provided $110,000,000 for section 319 
non-point pollution grants, an increase of $10,000,000 above 
the budget request. Again this year, the Committee expects that 
funds made available under this grant program can be used by 
the states to carry out purposes of the Clean Lakes Program, 
which for the third straight year has received no specific 
budget request.
    The Committee further notes that its proposal includes full 
funding of $95,529,300 for water quality grants and full 
funding of $5,999,500 for pollution prevention grants. Also, 
the Committee has increased funds for the Clean Water SRF 
program by $175,000,000 to a total of $1,250,000,000, and has 
increased the Drinking Water SRF by $25,000,000 to a program 
level of $750,000,000. Finally, the Committee's proposal 
includes an additional $25,000,000 for distribution to the 
State, Tribal and local governments specifically for additional 
particulate matter and ozone monitoring and data collection. 
The Committee believes these funds are a necessary component to 
a successful PM and ozone research program for which additional 
funds were also provided. The Committee notes that bill 
language has been specifically included to permit these 
monitoring and data collection grants to be issued pursuant to 
section 103 of the Clean Air Act, rather than under section 
105. It is Committee's intent that the Agency not require 
state, tribal or local cost share for these particular grants. 
The total appropriation for air and radiation assistance grants 
thus rises to $192,359,000.
    The Committee has included bill language which makes it 
possible for EPA to use funds under this account for specific 
programs and purposes in state and tribal areas when such state 
or tribe does not have an acceptable program already in place. 
As the funds for this activity are generally allocated by 
formula, states and tribes without acceptable programs would 
receive no money without this language. Similar language was 
carried in Public Law 105-18, and this language would only make 
the provision permanent law.
    The Committee is aware of a continuing problem with the 
administration of the Clean Water Act's construction grant 
audit process, and therefore directs the Agency to uphold all 
project cost eligibility determinations for EPA grants that are 
supported by a decision document of the EPA or a designated 
state agency. Such decision documents include, but are not 
limited to, approvals of plans and specifications, engineering 
and construction contracts, grant payments, change orders, 
subagreement eligibility decisions, or similar documents 
approving project cost eligibility. Such project cost 
eligibility determinations may be reversed only upon a showing 
by the Agency that the original decision was arbitrary, 
capricious, or an abuse of the law at the time of the decision. 
The Committee notes that the intent of this language shall 
apply to current and future appeals.
    The Committee is also aware of the currently projected 
timetable for selection and construction of a secondary 
treatment component for the International Wastewater Treatment 
Plant (IWTP) located in San Diego's South Bay along the United 
States-Mexico border, and continues to be concerned about the 
timely completion of the facility. The Committee is further 
concerned by indications that EPA may intend to seek a waiver 
of secondary treatment for the IWTP, in the absence of 
scientific justification for such a waiver. The Agency is 
directed to provide the Committee with regular briefings on the 
status of this process, so that the Committee may prepare 
accordingly to assist EPA's completion of the IWTP in the 
fiscal year 1999 budget cycle. The Committee believes full 
completion of this facility is an essential part of EPA's 
obligations to adequately protect the public health of the 
citizens of the United States and Mexico who live in this 
border area.
    With regard to funding for border projects, the Committee 
notes that $200,000,000 has been appropriated prior to this 
fiscal year, yet just $30,000,000 has been spent. The Committee 
is concerned that application of arbitrary economic or other 
criteria has hampered the timely expenditure of grants to 
otherwise qualified projects, such as a project in El Paso, 
Texas in conjunction with the New Mexico-Texas Water 
Commission, which would provide large numbers of residents of 
both sides of the border with higher levels of public health 
and environmental protection. The Agency is asked to provide 
the Committee a breakdown of the funds it has expended to date 
for border infrastructure projects, along with the criteria it 
has selected for qualified application for such grants. The 
Agency is also expected to provide an explanation of the role 
that BECC and NADBank will play in the determination of how 
these grant funds will be distributed.
    The Committee is aware of the Agency's narrow 
interpretation of the Safe Drinking Water Act Amendments of 
1996 regarding bond pooling arrangements, including cross-
collateralization of funds, and strongly encourages that the 
Agency review this matter once again. While the Act does not 
specifically address the issue of cross-collateralization, the 
statement of the managers on the conference report accompanying 
the Act very clearly states that the Act ``does not preclude 
bond pooling arrangements, including cross-collateralization, 
provided that revenues from the bonds are allocated to the 
purposes of the Safe Drinking Water Act in the same portion as 
the funds are used as security for the bonds,'' EPA's narrow 
interpretation of the law in this case appears to be 
unnecessary and, in fact, counter-productive relative to the 
intent of the statute.
    Finally, the Committee is aware of the financial 
difficulties many municipalities and regional water authorities 
face as they undertake projects to modernize their sewer and 
water systems in order to comply with the Federal Water 
Pollution Control Act. In fact, the Committee, in recognition 
of the severe financial strains water and sewer projects 
mandated by the Act can pose for municipal governments, as well 
as commercial and residential ratepayers, has, in this and in 
past years, provided direct financial assistance to specific 
water infrastructure projects where the financial strains of 
compliance with the Act are particularly acute. The Committee 
understands that the best means of alleviating these problems 
on a long-term basis would be through amendments to the Act 
that reform its financing provisions so as to make it easier 
for municipal and regional water authorities--especially those 
for which compliance is a significant economic hardship--to 
afford these projects.
    Such long-term changes would ultimately make it less 
necessary for the Committee to provide the kind of direct 
assistance that is included in this year's legislation and has 
been provided in past years. However, the Committee also 
believes that, absent the enactment of long-term legislative 
reforms in this area, it is appropriate to seek other, non-
legislative forms of relief for communities struggling to meet 
the financial requirements of compliance with the Act, and 
that, in fact, such non-legislative relief could also reduce 
the need to continue providing direct assistance to these 
communities.
    The Committee notes in this connection that, while Section 
603(d)(1) of the Act (33 U.S.C. 1383) expressly limits to 20 
years the term of direct loans provided from state revolving 
funds (SRF), there is no corresponding term limit in Section 
603(d)(4), which allows SRF monies to be used as a source of 
revenue or security for bonds issued by states to finance 
compliance projects. Therefore, the Committee strongly urges 
the Environmental Protection Agency to interpret section 
603(d)(4) as allowing the issuance of bonds with a term of 
greater than 20 years--ideally at least 40 years, if the life 
of the project is that long--provided the projects are located 
in states that leverage their SRF monies for creation of debt 
service reserve funds to collateralize bond issues for the 
purpose of financing such projects. This interpretation, by 
allowing reimbursements to SRFs to be stretched out over a 
longer period of time, will result in lower annual debt 
service, thereby making it easier for municipal water 
authorities (and their ratepayers) to afford the costs of 
projects mandated by the Act.

                          working capital fund

    Bill language has been included again this year to continue 
a Working Capital Fund. Because of the inappropriate use of 
such Funds in past years by many federal departments and 
agencies, the Committee was, prior to fiscal year 1997, 
reluctant to permit the creation of such a Fund at the 
Environmental Protection Agency. However, the Committee was 
assured that processes for monitoring and controlling the flow 
of funds had been vastly improved and that the use of such a 
Fund could generate significant savings. To date, the Committee 
is satisfied that the newly created Fund has performed as 
projected by the Agency and therefore has agreed to continue 
the Working Capital Fund through fiscal year 1998. The 
Committee requests that the Agency continue to provide 
quarterly reports outlining the use and disposition of the 
Fund.

                   Executive Office of the President

                office of science and technology policy

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................        $4,932,000
Fiscal year 1997 appropriation........................         4,932,000
Fiscal year 1998 budget request.......................         4,932,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 request..............                 0
                                                                        

    The Office of Science and Technology Policy (OSTP) was 
created by the National Science and Technology Policy, 
Organization, and Priorities Act of 1976. OSTP advises the 
President and other agencies within the Executive Office on 
science and technology policies and coordinates research and 
development programs for the Federal Government.
    The Committee recommends an appropriation of $4,932,000 for 
fiscal year 1998, the same as provided in fiscal year 1997 and 
the same amount as the President's budget request.

  council on environmental quality and office of environmental quality

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................        $2,506,000
Fiscal year 1997 appropriation........................         2,436,000
Fiscal year 1998 budget request.......................         3,020,000
Comparison with fiscal year 1997 appropriation........           +70,000
Comparison with fiscal year 1998 budget request.......          -514,000
                                                                        

    The Council on Environmental Quality (CEQ) was established 
by Congress under the National Environmental Policy Act of 1969 
(NEPA). The Office of Environmental Quality (OEQ), which 
provides professional and administrative staff for the Council, 
was established in the Environmental Quality Improvement Act of 
1970. The Council on Environmental Policy has statutory 
responsibility under NEPA for environmental oversight of all 
Federal agencies and is to lead interagency decision-making of 
all environmental matters.
    For fiscal year 1998, the Committee has recommended 
$2,506,000 for the CEQ and OEQ, an increase of $70,000 from the 
fiscal year 1997 level and a decrease of $514,000 from the 
budget request.
    The Committee is aware of the development of a new American 
Heritage Rivers initiative, and has several concerns about the 
development and future implementation of this initiative.
    First, while the Administration has publicly stated that 
this effort will not require new funding or staff, the 
Committee is concerned that staff from the various federal 
agencies, including the Department of the Interior and the 
Department of Agriculture, have been used extensively on this 
project since the beginning of the year.
    Second, the Committee is concerned that discussions have 
occurred within the agencies about possibly using funds from 
existing federal programs, which the Congress has not 
earmarked, specifically for those river segments that will be 
formally designated by the President. This action would 
directly contradict and be in violation of Congressional 
intent.
    Finally, concerns have been raised to both the legislative 
committees of jurisdiction and the Appropriations Committee by 
both private property rights groups and private citizens about 
the process by which rivers and/or parts of rivers will be 
designated. The Committee strongly believes designations should 
only be made in cases where there is broad community support 
for the designation. Where opposition arises from either 
private citizens or local, state or federal officials, no 
designation should proceed unless and until concerns of 
opponents can be fully addressed.

                 Federal Deposit Insurance Corporation

                      office of inspector general

    Pursuant to 31 U.S.C. 1105(a)(25), which requires ``a 
separate appropriation account for appropriations for each 
Office of Inspector General of an establishment defined under 
section 11(2) of the Inspector General Act of 1978,'' fiscal 
year 1998 is the first year the Committee has received a 
funding request for the Office of Inspector General (OIG) at 
the Federal Deposit Insurance Corporation (FDIC). Prior to 
1998, the FDIC Inspector General's budgets have been approved 
by the FDIC's Board of Directors from deposit insurance funds 
as part of FDIC's annual operating budget that is proposed by 
the FDIC Chairman.
    During confirmation hearings on the current, and first 
Inspector General of FDIC, questions arose as to whether the 
existing budget process adequately ensured the independence of 
the OIG. Subsequent discussions at various levels of the 
Executive resulted in this fiscal year 1998 request of the 
Committee for $34,365,000. These funds, which are derived from 
the Bank Insurance Fund, the Savings Association Insurance 
Fund, and the FSLIC Resolution Fund, will provide for 236 full-
time equivalent staff positions. The Committee notes that this 
level is a reduction of some 25 percent from the comparable 
1997 level, and is possible due to general reductions within 
the OIG, completion of much of the carryover work from the 
former Resolution Trust Corporation, and the prospects for 
improved financial health of the banking industry.

                  Federal Emergency Management Agency

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation......................     $1,088,058,000
Fiscal year 1997 appropriation.......................      5,103,556,000
Fiscal year 1998 budget request......................        838,558,000
Comparison with fiscal year 1997 appropriation.......     -4,015,498,000
Comparison with fiscal year 1998 budget request......       +249,500,000
                                                                        

    The Federal Emergency Management Agency (FEMA) was created 
by reorganization plan number 3 of 1978. The Agency carries out 
a wide range of program responsibilities for emergency planning 
and preparedness, disaster response and recovery, and hazard 
mitigation under the following authorities:
    Under the Defense Production Act of 1950, as amended, 
responsibility for maintaining the nation's emergency training 
and exercises, and preparedness, response and recovery, and 
information technology services.
    Under the Earthquake Hazards Reduction Act of 1977, as 
amended, programs designed to identify and reduce earthquake 
vulnerability and consequences.
    Under Executive Order 12148, responsibility for oversight 
of the national dam safety program.
    Under the Atomic Energy Act of 1954, as amended, and in 
accordance with provisions set forth in the 1980 Act making 
appropriations for the Nuclear Regulatory Commission and other 
statutes, Executive Order 12657, and by Presidential Directive, 
responsibility for offsite emergency preparedness for fixed 
nuclear facilities.
    Under the National Security Act of 1947, as amended, 
programs to provide for continuity of government as well as 
emergency resources assessment, management, and recovery.
    Under the Federal Fire Prevention and Control Act of 1974, 
as amended, programs to reduce national fire loss, including 
training and prevention.
    Under the National Flood Insurance Act of 1968, as amended, 
and the Flood Disaster Protection Act of 1973, administration 
of a national program to provide flood insurance and to 
encourage better flood plain management.
    Under the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, as amended, programs to provide assistance to 
individuals and State and local governments in Presidentially-
declared major disaster or emergency areas.
    Under the Inspector General Act of 1978, as amended, 
agency-wide audit and investigative functions to identify and 
correct management and deficiencies which create conditions for 
existing or potential instances of fraud, waste, and 
mismanagement.
    Under the Agency Chief Financial Officers Act of 1990, 
systems of accounting, financial management, and internal 
controls to assure the issuance of reliable financial 
information and to deter fraud, waste, and abuse of government 
resources.
    Under the Comprehensive Environmental Response, 
Compensation, and Liability Act, as amended, and Executive 
Order 12580, responsibility for specific emergency response 
activities.
    Under the Hazardous Materials Transportation Act, as 
amended, programs designed to provide training to prepare for 
and respond to hazardous materials incidents.
    Under Title III of the Stewart B. McKinney Homeless 
Assistance Act of 1987, as amended, a program to provide food 
and shelter to the homeless through a National Board chaired by 
FEMA and composed of representatives of various charities.
    Under Executive Orders 12472, 12656, 12699 and 
Reorganization Plan No. 3 of 1978, miscellaneous responsibility 
for response and recovery, preparedness, training and 
exercises, information technology services, executive 
direction, operations support, and mitigation.
    For fiscal year 1998, the Committee recommends 
$1,088,058,000, which represents a decrease of $4,015,498,000 
from the fiscal year 1997 appropriation and an increase of 
$249,500,000 above the 1998 budget request.
    Of the amounts approved in the following appropriations 
accounts, the Agency must limit transfers of funds between 
programs and activities to not more than $500,000 without prior 
approval of the Committee. Further, no changes may be made to 
any account or program element if it is construed to be a 
change in policy. Any program or activity mentioned in this 
report shall be construed as the position of the Committee and 
should not be subject to any reductions or reprogrammings 
without prior approval of the Committee. Finally, the Committee 
expects that the Agency will fully consult with the Committee 
prior to the implementation of any reorganization, moving of 
regional office locations, and adoption of any new programs or 
activities.

                            DISASTER RELIEF

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $500,000,000
Fiscal year 1997 appropriation........................     4,620,000,000
Fiscal year 1998 budget request.......................       370,000,000
Comparison with fiscal year 1997 appropriation........    -4,120,000,000
Comparison with fiscal year 1998 budget request.......      +130,000,000
                                                                        

    The Federal Emergency Management Agency has responsibility 
for administering disaster assistance programs and coordinating 
the Federal response in Presidentially declared disasters. 
Major activities under the disaster assistance program are 
human services, which provides aid to families and individuals; 
infrastructure which supports the efforts of State and local 
governments to take emergency protective measures, clear debris 
and repair infrastructure damage; hazard mitigation, which 
sponsors projects to diminish effects of future disasters; and 
disaster management, such as disaster field office staff and 
automated data processing support.
    For fiscal year 1998, the Committee has provided 
$500,000,000 for disaster relief, a decrease of $4,120,000,000 
below the fiscal year 1997 level and an increase of 
$130,000,000 above the budget request.
    As the Committee has noted several times, the 
responsibilities of the many fine employees of the Federal 
Emergency Management Agency are among the most important in 
government. When disaster strikes, oftentimes the first wave if 
comfort and relief for disaster victims is provided through the 
disaster relief personnel of FEMA and their state counterparts. 
The Committee remains a strong supporter of the Agency and 
commends its Director and its employees for their excellent 
work under what are quite often very difficult circumstances.
    In this light, the Committee is aware of the recent natural 
disaster that has occurred in the Milwaukee, Waukesha and 
Ozaukee County areas of Wisconsin, and expects that FEMA will 
take all actions at its disposal to provide the necessary and 
appropriate relief to the victims of this disaster event.
    There remain, however, certain concerns with the operation 
of specific FEMA programs. For example, the Committee reaffirms 
its concern over the amount of time the Agency is taking to 
resolve claims under section 406 of the Stafford Act for 
certain public and private non-profit facilities damaged in the 
Northridge Earthquake in January, 1994. In some cases, recovery 
efforts appear to be delayed as a result of continuing disputes 
over the proper building codes and standards to be applied. The 
Committee wishes to restate that, in the case of public 
institutions which are subject to building codes and standard 
that require changes in the pre-disaster construction of a 
damaged facility, FEMA should recognize such codes and 
standards for purposes of determining reimbursement under 
section 406 when such institution has provided sufficient 
credible evidence that all requirements for recognition of such 
codes, under the applicable regulations, have been satisfied.
    In a similar vein the Committee remains concerned over 
situations where, after a community disaster assessment is made 
by FEMA, subsequent policy changes or other internal factors 
result in reduced reimbursement compared to that which was 
promised to a community. While larger communities may be able 
to absorb the loss of such promised funds, such a situation can 
place the operating budgets of small communities at great risk. 
This situation is, of course, aggravated further when such 
reimbursements linger while resolution of the matter bounces 
between a community, the nearest FEMA office, and headquarters 
in Washington, D.C. The Committee is aware of several examples 
of this situation, dating back at least as long as the 1993 
coastal fires in Southern California, and directs the Agency to 
take every step possible to favorably resolve these matters as 
quickly as possible.
    The Committee is aware of the matter involving Santa Marta 
Hospital's somewhat belated interest in reimbursement and 
mitigation resulting from the Northridge earthquake. Because 
Santa Marta Hospital is a vital element to the severely 
disadvantaged community of East Los Angeles, providing 
resources to low-income and minority populations that otherwise 
would have little or no access to primary or acute care, the 
Committee expects the Agency to give strong consideration to 
the hospital's request to participate in the Seismic Hazard 
Mitigation Program for Hospitals.
    The Committee is concerned with FEMA's apparent decision to 
not reimburse the State of California for the costs associated 
with pumping flood waters collecting behind levees in the same 
manner as was reimbursed in both 1983 and 1986. Because of the 
emergency nature and immediate health and safety threats to 
surrounding communities, the Committee believes that FEMA 
should recognize agricultural lands as ``improved'' property 
and consider them eligible for mitigation assistance.
    Finally, the Agency is requested to continue to provide by 
the last day of each month a report to the Committee which 
updates the disposition of all ongoing mitigation activities, 
the amounts necessary to carry out such mitigation, and the 
remaining unobligated balance of disaster relief funds.

            disaster assistance direct loan program account

                            state share loan

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................        $1,495,000
Fiscal year 1997 appropriation........................         1,385,000
Fiscal year 1998 budget request.......................         1,495,000
Comparison with fiscal year 1997 appropriation........          +110,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        


----------------------------------------------------------------------------------------------------------------
                                                                  Limitation on direct                          
                                                                         loans           Administrative expenses
----------------------------------------------------------------------------------------------------------------
Fiscal year 1998 recommendation...............................            ($25,000,000)                 $341,000
Fiscal year 1997 appropriation................................             (25,000,000)                  548,000
Fiscal year 1998 budget request...............................             (25,000,000)                  341,000
Comparison with fiscal year 1997 appropriation................                      (0)                 -207,000
Comparison with fiscal year 1998 request......................                      (0)                        0
----------------------------------------------------------------------------------------------------------------

    Beginning in 1992, loans made to States under the cost 
sharing provisions of the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act were funded in accordance with the 
Federal Credit Reform Act of 1990. The Disaster Assistance 
Direct Loan Program Account, which was established as a result 
of the Federal Credit Reform Act, records the subsidy costs 
associated with the direct loans obligated beginning in 1992 to 
the present, as well as administrative expenses of this 
program.
    For fiscal year 1998, the Committee has provided $1,495,000 
for the cost of State Share Loans, the same as the President's 
request and an increase of $110,000 above the fiscal year 1997 
level. In addition, the Committee has provided $25,000,000 for 
the limitation on direct loans pursuant to Section 319 of the 
Stafford Act, as well as $341,000 for administrative expenses 
of the program.

                         SALARIES AND EXPENSES

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $171,773,000
Fiscal year 1997 appropriation........................       170,500,000
Fiscal year 1998 budget request.......................       171,773,000
Comparison with fiscal year 1997 appropriation........        +1,273,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    This activity encompasses the salaries and expenses 
required to provide executive direction and administrative 
staff support for all agency programs in both the headquarters 
and field offices. The account funds both program support and 
executive direction activities.
    The bill includes $171,773,000 for salaries and expenses, 
an increase of $1,273,000 above the fiscal year 1997 level and 
the same as the budget request.

                      OFFICE OF INSPECTOR GENERAL

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................        $4,803,000
Fiscal year 1997 appropriation........................         4,673,000
Fiscal year 1998 budget request.......................         4,803,000
Comparison with fiscal year 1997 appropriation........          +130,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Office of Inspector General (OIG) was established 
administratively within FEMA at the time of the Agency's 
creation in 1979. Through a program of audits, investigations 
and inspections, the OIG seeks to prevent and detect fraud and 
abuse and promote economy, efficiency and effectiveness in the 
Agency's programs and operations. Although not originally 
established by law, FEMA's OIG was formed and designed to 
operate in accordance with the intent and purpose of the 
Inspector General Act of 1978. The Inspector General Act 
Amendments of 1988 created a statutory Inspector General within 
FEMA.
    For fiscal year 1998, the Committee has recommended 
$4,803,000 for the Office of Inspector General, an increase of 
$130,000 above the fiscal year 1997 appropriation and the same 
as the 1998 budget request.

              EMERGENCY MANAGEMENT PLANNING AND ASSISTANCE

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $321,646,000
Fiscal year 1997 appropriation........................       218,701,000
Fiscal year 1998 budget request.......................       202,146,000
Comparison with fiscal year 1997 appropriation........      +102,945,000
Comparison with fiscal year 1998 budget request.......      +119,500,000
                                                                        

    This appropriation provides program resources for the 
majority of FEMA's ``core'' activities, including response and 
recovery; preparedness, training and exercises; mitigation 
programs, fire prevention and training; information technology 
services; operations support; and executive direction. Costs 
for the floodplain management component are borne by 
policyholders and reimbursed from the National Flood Insurance 
Fund.
    A fiscal year appropriation of $321,646,000 has been 
recommended, an increase of $102,945,000 over the 1997 level 
and $119,500,000 over the fiscal year 1998 budget request. From 
within this appropriated level, $500,000 is for the completion 
of a comprehensive analysis and plan of all evacuation 
alternatives for the New Orleans metropolitan area, and 
$5,000,000 is provided for FEMA to continue its replacement and 
upgrade of equipment and vehicles used during emergency 
response actions, particularly the Mobile Emergency Response 
Support (MERS) and Mobile Air Transportable Telecommunications 
Support (MATTS) equipment. While FEMA has done an exemplary job 
maintaining and upgrading this equipment when possible, the 
Committee also realizes it is very heavily used in the most 
extreme of circumstances, and is oftentimes quickly outmoded 
due to the advance of technology. An additional $4,000,000 has 
also been provided for the state and local assistance grant 
program.
    The Committee notes again this year that it shares the 
views expressed in testimony by FEMA's Director that pre-
disaster mitigation is perhaps the most effective method of 
reducing disaster damages, saving disaster relief expenditures 
and, most important, preventing loss of life. In this light, 
the Committee has provided $110,000,000 for pre-disaster 
mitigation activities, including $50,000,000 as requested in 
the budget proposal under the Disaster Relief account, and an 
additional $60,000,000 for phase one planning and construction 
of a full-scale wind simulation center. The Committee expects 
that the $50,000,000 requested in the budget proposal will be 
used to provide pre-disaster mitigation pilot grants in 
communities throughout the nation. The additional funds 
proposed for beginning work on a full-scale wind simulation 
center will provide a necessary component of an effective pre-
disaster mitigation program by permitting the full-scale 
testing of structures under conditions representative of true 
disaster circumstances. The Committee intends that this program 
be carried out in conjunction with the Partnership for Natural 
Disaster Reduction, which brings together industry, academia, 
and governments to share in the investment, leadership, and 
coordination of developing proven and cost-effective hazard 
mitigation measures. It is the Committee's further intent that 
FEMA work closely with all parties involved in this effort and 
assure that appropriate financial and in-kind resources from 
all parties be pledged and, to the greatest extent practicable, 
integrated throughout the planning, construction and 
operational phases of the project. The Committee notes that 
funds provided for planning purposes may include both 
construction planning and planning associated with the expected 
research program to be conducted at the simulation center.
    The Committee notes that the budget request for the 
Emergency Management Planning and Assistance account has been 
fully funded. This activity encompasses all of the mitigation, 
technology and training programs operated under FEMA's 
jurisdiction, including the Fire Prevention and Training 
programs--such as the National Fire Academy--which received the 
full budget request again this year.
    The Committee is concerned with the current and projected 
demand for training in the fields of counter-terrorism, 
firefighting, and other emergency response activities, and 
therefore directs FEMA to conduct a comprehensive assessment of 
the need for Federal disaster training facilities. This 
assessment includes, but is not limited to, a review of 
existing disaster training programs offered by FEMA and other 
agencies, an estimate of the number and types of emergency 
response personnel needed for future response requirements, an 
estimate of the number and types of emergency response 
personnel that have sought training but have been unable to 
receive training because of oversubscription of current 
training facilities, and a recommendation of the need to 
provide additional training facilities. The Committee requests 
the Agency to complete this assessment and provide a summary 
report to the Committee by February 1, 1998.
    Since their inception in 1990, FEMA's Urban Search and 
Rescue (USAR) teams have been effectively deployed to 14 
disasters and to the Atlanta Olympics, and are perhaps best 
remembered for their around-the-clock, heroic efforts following 
the bombing of the Murrah Federal Building in Oklahoma City. 
Despite what has been an exemplary record, there nevertheless 
have remained critical problems with the operation of the teams 
which the Committee believes are necessary to resolve before 
the teams will be fully operational. To assist the Committee in 
determining the extent of these problems, a professional 
investigation, which included significant input from the 
Agency, was conducted earlier this year. The focus of the 
investigation included the adequacy of equipment and funding 
and the working agreements among local, state, and federal 
agencies regarding USAR liability, worker's compensation, and 
equipment ownership.
    Among the important findings of this investigation are:
          1. There has never been a needs assessment nor an 
        objective study of the number of teams necessary for an 
        effective and efficient USAR program.
          2. Even though the USAR program is based on a tri-
        party agreement among local, state, and federal 
        entities, FEMA has never defined the costs to maintain 
        the network. Although the teams are available for state 
        disasters, state authorities typically provide little 
        or no funding to the program.
          3. FEMA has equipped teams through the use of the 
        Disaster Relief Funds rather than through the normal 
        appropriations process.
          4. FEMA does not have clear statutory authority for 
        the USAR program and has not promulgated regulations to 
        manage the teams. Instead, 21 of the 27 teams are 
        operated through Memorandum of Agreements. FEMA has 
        acknowledged several deficiencies with these 
        agreements, including questions of liability coverage, 
        worker's compensation, and ownership of equipment 
        purchased with federal funds.
    With regard of these findings, the Committee understands 
FEMA is currently reviewing the matter and is preparing a 
thorough response, including suggestions which address specific 
problems. The Committee would reiterate that it has been and 
remains a strong supporter of the USAR program and has every 
intention to work with FEMA to resolve these and any other 
similar matters that may arise.

                   EMERGENCY FOOD AND SHELTER PROGRAM

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $100,000,000
Fiscal year 1997 appropriation........................       100,000,000
Fiscal year 1998 budget request.......................       100,000,000
Comparison with fiscal year 1997 appropriation........                 0
Comparison with fiscal year 1998 budget request.......                 0
                                                                        

    The Emergency Food and Shelter Program within the Federal 
Emergency Management Agency originated in the 1983 Emergency 
Jobs legislation. Minor modifications were incorporated in the 
Stewart B. McKinney Homeless Assistance Act. The program is 
designed to help address the problems of the hungry and 
homeless. Appropriated funds are awarded to a National Board to 
carry out programs for sheltering and feeding the needy. This 
program is nationwide in scope and provides such assistance 
through local private voluntary organizations and units of 
government selected by local boards in areas designated by the 
National Board as being in highest need.
    The Committee has recommended $100,000,000 for the 
Emergency Food and Shelter Program, the same as the budget 
request and the fiscal year 1997 funding level. The Committee 
continues to believe this is a well run and very worthwhile 
program and acknowledges and appreciates the support and 
commitment to the program by many religious and charity 
organizations.
    Once again this year, bill language is included which 
limits administrative costs to 3.5% for fiscal year 1998.

                     NATIONAL FLOOD INSURANCE FUND

                          (TRANSFERS OF FUNDS)

    The Flood Disaster Protection Act of 1973 requires the 
purchase of insurance in communities where it is available as a 
condition for receiving various forms of Federal financial 
assistance for acquisition and construction of buildings or 
projects within special flood hazard areas identified by the 
Federal Emergency Management Agency. All existing buildings and 
their contents in communities where flood insurance is 
available, through either the emergency or regular program, are 
eligible for a first layer of coverage of subsidized premium 
rates.
    Full risk actuarial rates are charged for new construction 
or substantial improvements commenced in identified special 
flood hazard areas after December 31, 1974, or after the 
effective date of the flood insurance rate map issued to the 
community, whichever is later. For communities in the regular 
program, a second layer of flood insurance coverage is 
available at actuarial rates on all properties, and actuarial 
rates for both layers apply to all new construction or 
substantial improvements located in special flood hazard areas. 
The program operations are financed with premium income 
augmented by Treasury borrowings.
    The Committee has included bill language proposed in the 
budget request for salaries and expenses to administer the 
fund, not to exceed $21,610,000, and for mitigation activities, 
not to exceed $78,464,000, including a limitation of 
$35,000,000 for the repayment of interest as required under 
Section 1366 of the National Flood Insurance Act of 1968, as 
amended.
    The Committee has also included bill language which will 
maintain borrowing authority during fiscal year 1998 for the 
flood insurance program at $1,500,000,000. Similar language for 
fiscal year 1997 was included in Public Law 104-208.

                        ADMINISTRATIVE PROVISION

    The Committee has once again this year included bill 
language proposed in the budget request which provides for the 
assessment and collection of fees in an amount that 
approximates the amount anticipated by the Federal Emergency 
Management Agency to be obligated for its radiological 
emergency program during the fiscal year. This amount is 
estimated to be $12,000,000 in fiscal year 1998.

                    General Services Administration

                      Consumer Information Center

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................        $2,419,000
Fiscal year 1997 appropriation........................         2,260,000
Fiscal year 1998 budget request.......................         2,119,000
Comparison with fiscal year 1997 appropriation........          +159,000
Comparison with fiscal year 1998 request..............          +300,000
                                                                        

    The Consumer Information Center (CIC) helps Federal 
departments and agencies promote and distribute consumer 
information and promotes public awareness of existing 
government publications through dissemination of a consumer 
information catalog and other media programs.
    The Consumer Information Center Fund, a revolving fund 
established by Public Law 98-63, provides for the efficient 
operation of the Consumer Information Center. The revolving 
fund finances CIC activities through annual appropriations, 
reimbursement from agencies for distribution costs, fees 
collected from the public, and incidental income.
    The Committee recommends an appropriation of $2,419,000 for 
fiscal year 1998. This is an increase of $159,000 from the 
fiscal year 1997 level and an increase of $300,000 to the 
fiscal year 1998 President's budget request. The Bill also 
includes a limitation of $7,500,000 on the availability of the 
revolving fund. Any revenues accruing to this fund during 
fiscal year 1998 in excess of this amount shall remain in the 
fund and are not available for expenditure except as authorized 
in appropriations Acts.
    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 Consumers Resource Handbook 
and organizing the Consumer Resource Exposition. The Committee 
recommendation includes funding to perform these functions and 
a provision in the Bill which will allow the CIC to solicit, 
accept, and deposit gifts to defray the costs of printing, 
publishing, and distributing consumer information.

                Department of Health and Human Services

                       OFFICE OF CONSUMER AFFAIRS

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................                 0
Fiscal year 1997 appropriation........................        $1,500,000
Fiscal year 1998 budget request.......................         1,800,000
Comparison with fiscal year 1997 appropriation........        -1,500,000
Comparison with fiscal year 1998 request..............        -1,800,000
                                                                        

    The Office of Consumer Affairs (OCA) strives to assure that 
consumer viewpoints are represented within the Federal 
government and seeks to inform and educate individual citizens 
to deal more effectively in the marketplace.
    The Committee recommends no funding for this activity for 
fiscal year 1998. The Committee has included language in the 
Bill allowing for the orderly closure of the Office and 
transfer of some of its functions to the Consumer Information 
Center. The Committee's recommendation reflects the position 
taken by the Congress and the President when the fiscal year 
1997 appropriations bill passed the House on September 24, 1996 
and the Senate on September 25, 1996 and subsequently signed 
into law by the President on September 26, 1996.
    The Committee recommendation reflects a desire to 
consolidate offices or agencies, when appropriate, with a goal 
of reducing the cost of government. While this program does not 
consume a large amount of money, it is the Committee's 
philosophy that small steps are important and no opportunity to 
save should be passed by. The Committee notes that many 
Departments and Agencies of the Federal government maintain 
offices which provide information or assistance to consumers, 
so elimination of this Office and the transfer of some of its 
functions to the Consumer Information Center is not expected to 
materially affect the service provided to consumers.

             National Aeronautics and Space Administration

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation......................    $13,648,000,000
Fiscal year 1997 appropriation.......................     13,709,200,000
Fiscal year 1998 budget request......................     13,500,000,000
Comparison with fiscal year 1997 appropriation.......        -61,200,000
Comparison with fiscal year 1998 request.............       +148,000,000
                                                                        

    The National Aeronautics and Space Administration was 
created by the National Space Act of 1958. NASA conducts space 
and aeronautics research, development, and flight activity that 
is designed to ensure and maintain U.S. preeminence in space 
and aeronautical endeavors.
    The Committee has recommended a total program level of 
$13,648,000,000 in fiscal year 1998, which is an increase of 
$148,000,000 to the budget request and $61,200,000 below the 
fiscal year 1997 enacted appropriation.

                          property disposition

    The Committee understands that the General Services 
Administration and the City of Downey, California, are nearing 
agreement on final terms of the conveyance of Parcels 3, 4, 5, 
and 6 of the NASA Industrial Plant, Downey, from NASA to the 
City of Downey, California, pursuant to P.L. 104-204. The 
Committee remains interested in NASA's plans regarding the 
disposition of Parcels 1 and 2 at Downey. In recognition of the 
successful working relationship between the City of Downey and 
NASA and the ongoing interest of the City in the remaining real 
property at the NASA Industrial Plant for commercial/industrial 
use, the Committee wishes to be kept informed of the progress 
of disposition planning for Parcels 1 and 2. The Committee 
directs that NASA submit a report concerning the Agency's plans 
in this regard by August 15, 1997.

                           Transfer authority

    The Committee understands that available, near-term 
reserves for the International Space Station have continued to 
diminish--due to unforseen expenditures required by NASA as a 
result of the inclusion of Russia in the International Space 
Station partnership; increased costs as a result of prime 
contractor performance; directed program changes, of which 
those worth over $1,000,000,000 have been definitized and 
approved; an increasing number of identified program 
``threats''; and peak hardware manufacture, test, and assembly. 
The Committee understands that the annual cap on Space Station 
funding has limited the availability of near-term reserves for 
the significant activity required during peak Station 
development. In recognition of the limited availability of 
program reserves for fiscal year 1998 and the importance of 
maintaining schedule to the maximum extent feasible for First 
Element Launch during 1998, the Committee has included a 
provision for transfer authority of up to $150,000,000 from the 
``Science, Aeronautics and Technology'' and ``Mission Support'' 
appropriation accounts to the ``Human Space Flight'' 
appropriation account for the International Space Station. It 
is the intent of the Committee that this authority will be used 
at the discretion of the Administrator, and subject to the 
case-by-case approval by the House and Senate Committees on 
Appropriations, to the extent required for development/
construction to maintain the schedule of the Space Station 
program. Furthermore, it is the intent of the Committee that 
the Administrator, in implementing such transfer authority, 
shall provide details to the Committees as to the manner in 
which transfers from contributing accounts can be accomplished 
with minimal long-term impact to NASA programs and priorities.

                           Claims settlement

    The Committee is concerned that subcontractors performing 
work under NASA prime contract NAS2-12863 have not been paid 
and may not be receiving an impartial hearing of their claims. 
The Committee notes that authority for consideration of claims 
under 31 U.S.C. 3702 was transferred from GAO to the Office of 
Management and Budget, with the authority to delegate the 
functions to such agency or agencies as was deemed appropriate. 
OMB delegated authority in this case to NASA's Office of 
General Counsel. It is the concern of the Committee that the 
Office of General Counsel at NASA is not an impartial party in 
this issue and should not be the entity which makes a decision 
on this claim. It is the position of the Committee that the 
only impartial entity within the NASA organization would be the 
Inspector General. Therefor, the Committee directs the 
Inspector General to review the merits of this issue and report 
back to the Committee in an expeditious manner.

                           HUMAN SPACE FLIGHT

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $5,426,500,000
Fiscal year 1997 appropriation........................     5,362,900,000
Fiscal year 1998 budget request.......................     5,326,500,000
Comparison with fiscal year 1997 appropriation........       +63,600,000
Comparison with fiscal year 1998 request..............      +100,000,000
                                                                        

    This appropriation provides for human space flight 
activities, including development of the space station and 
operation of the space shuttle. This account also includes 
support of planned cooperative activities with Russia, upgrades 
to the performance and safety of the space shuttle, and 
required construction projects in direct support of the space 
station and space shuttle programs.
    The Committee recommends a total of $5,426,500,000 for the 
human space flight account. The recommendation is an increase 
of $100,000,000 to the President's budget request and 
$63,000,000 above the fiscal year 1997 enacted appropriation.

                       Russian Program Assurance

    The Committee supports the continued funding of a ``Russian 
Program Assurance'' budget line in NASA's ``Human Space 
Flight'' appropriation to address specific U.S. program 
requirements resulting from delays on the part of Russia in 
meeting its commitments to the International Space Station 
program and uncertainties about future Russian performance. The 
baseline Space Station program reserve levels were established 
to protect for U.S. development uncertainty and unforeseen 
program design changes, not against Russian non-performance. As 
a result, the Committee agrees that resources for these 
contingency efforts should be provided outside the planned ISS 
program funding, and has already endorsed NASA's reallocation 
of $200,000,000 in fiscal year 1997 for initial contingency 
steps. The Committee expects the ``Russian Program Assurance'' 
funds will be used for the United States to procure necessary 
hardware, software, and services to continue the assembly 
sequence and reduce schedule and program impacts should Russia 
have further problems delivering the Service Module. The 
Committee has included $100,000,000 in fiscal year 1998 for 
``Russian Program Assurance'' to complete Step One of the 
contingency effort and to initiate such additional, incremental 
steps as may be required to allow the United States to move 
forward on the Space Station in the face of potential further 
delays in delivery of Russian elements. The Committee 
recognizes that the funding level for ``Russian Program 
Assurance'' in fiscal year 1998 may require adjustment 
depending upon additional definition of Step One elements, 
Russia's performance against defined milestones over the coming 
months, and findings of the Russian General Designers Review 
scheduled for later this year. The Committee expects to be kept 
fully and currently informed regarding any contingency actions 
which NASA proposes to take beyond those outlined in its letter 
to the Committee dated May 5, 1997.

                  SCIENCE, AERONAUTICS AND TECHNOLOGY

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $5,690,000,000
Fiscal year 1997 appropriation........................     5,767,100,000
Fiscal year 1998 budget request.......................     5,642,000,000
Comparison with fiscal year 1997 appropriation........       -77,100,000
Comparison with fiscal year 1998 request..............       +48,000,000
                                                                        

    This appropriation provides for the research and 
development activities of the National Aeronautics and Space 
Administration. These activities include: space science, life 
and microgravity science, mission to planet earth, aeronautical 
research and technology, advanced concepts and technology, 
launch services, and academic programs. Funds are also included 
for the construction, maintenance, and operation of 
programmatic facilities.
    The Committee recommends $5,690,000,000 for Science, 
Aeronautics and Technology in fiscal year 1998. The amount 
recommended is $48,000,000 above the President's budget request 
and $77,100,000 below the fiscal year 1997 appropriation. The 
adjustments include $1,000,000 for Multiple Sclerosis cooling 
therapy research, $450,000 for application of satellite imagery 
to land use planning, $13,700,000 for commercial technology 
programs, $6,300,000 for National Space Grant Colleges and 
Fellowships, $5,500,000 for space radiation health programs, 
$1,750,000 for space product development, $17,300,000 for 
various education programs, $1,000,000 for the U.S./Mexico 
Foundation for Science, and $1,000,000 for miniaturization of 
eye tracking systems technology.

                      Near earth asteroid tracking

    The Near Earth Asteroid Tracking program is one of several 
programs which NASA funds to catalog, track, and characterize 
near-earth objects. It is the understanding of the Committee 
that comparable funding from fiscal year 1997 is expected for 
fiscal year 1998. At this rate it is estimated to take between 
20 and 30 years to detect, catalog, and characterize 90 per 
cent of the near-earth objects. The Committee is encouraged by 
these efforts; however, it would like to see NASA accelerate 
the cataloging process, to the extent funds are available.

              Multiple sclerosis cooling therapy research

    The Committee has included $1,000,000 for a research and 
demonstration program which is consistent with the NASA and 
Multiple Sclerosis Association of America memorandum of 
understanding which calls for a joint effort to further 
accelerate the application of cool suit technology for multiple 
sclerosis patients.

                     Space radiation health program

    The Committee recommends $5,500,000 for NASA's space 
radiation health program. The increase includes $2,000,000 to 
enhance development of beam delivery systems at the NASA/Loma 
Linda University space radiation lab; $1,750,000 for 
development of an enhanced accelerator control system; and 
$1,500,000 for neuroscience research.

                             Bion research

    The Committee endorses NASA's decision not to participate 
in the Bion 12 primate experiment scheduled for 1998. The 
minimal amount of funding which was to have been used of this 
purpose has been left in the space science budget for other 
higher priority programs.

                     Biomedical research institute

    The Committee notes that NASA has selected a consortium to 
create a National Space Biomedical Research Institute, which 
will focus on research to support human health in exploration 
and development of space and coordinate research projects with 
outside institutions The Institute will help ensure that the 
country will take full advantage of the research in space to 
improve the health of people on Earth. The Committee endorses 
the action of NASA in this matter and looks forward to working 
with NASA to ensure that the objectives of the Institute are 
achieved in a cost effective manner.

                          Eye tracking systems

    Eye tracking technology has many applications which range 
from public safety to special education. Specific potential 
applications include tracking and warning airline pilots of 
fatigue or inattention at the control; warning over-the-road 
commercial drivers of sleepiness or slow response times; 
alerting air traffic controllers to inattention to specific 
blips on their radar screens; and diagnosing children's reading 
problems and other special education needs. Present eye 
tracking systems use available off-the-shelf components, which 
include a general purpose computer, image digitizing hardware, 
and a conventional video camera. The only drawback to this 
promising system is its size. Therefore, the Committee 
recommends $1,000,000 in fiscal year 1998 to design and develop 
new components, to produce a miniaturized camera/gimbal system, 
packaged with a micro processor and digitizing card to reduce 
the size of the system to enable its use in both mobile and 
stationary conditions.

                   U.S./Mexico Foundation for Science

    The Committee recommends $1,000,000 for the U.S./Mexico 
Foundation for Science which has a goal of improving U.S. and 
Mexican scientific and technological cooperation.

       Application of satellite imagery for local government use

    The Committee recommends an increase of $450,000 to Mission 
to Planet Earth for implementation of a collaborative effort 
between NASA and Cayuga County, New York regarding the use of 
satellite imagery in urban planning and agricultural 
applications. NASA has established similar efforts (Regional 
Validation Centers) in various sections of the country which 
have been used to develop practical benefits in such fields as 
agriculture, wetlands inventory, environmental resource 
management, and public safety. It is expected that the Cayuga 
County government will enter into a relationship with a 
commercial partner and a strong educational institution to 
develop a product which will be beneficial to both the local 
population and NASA.

             Upper-ocean physical and biological structures

    The Committee strongly encourages NASA, through its 
research activities related to Mission to Planet Earth, to 
focus on global climate change issues that will add to our 
understanding of upper-ocean physical and biological 
structures. An institute for oceanic seasonal variability 
studies could undertake this important work and provide 
practical and useful information from oceanographers and 
meteorologists knowledgeable about El Nino Southern Oscillation 
that can lead to substantial savings for government and the 
private sector.

                         Commercial technology

    The Committee recommends an increase of $5,800,000 for 
Commercial Technology Programs. The increase will result in 
total funding in fiscal year 1998 of $25,800,000 which is the 
level at which this program was funded in fiscal year 1997. In 
addition to the above amount, the Committee recommends 
$6,000,000 for telecommunications technology infrastructure for 
K-12 schools, and $1,900,000 for the National Technology 
Transfer Center. Finally, the Committee recommends $1,750,000 
for a pilot initiative between the NASA Midwest Regional 
Technology Transfer Center and NASA Lewis Research Center to 
engage small and minority businesses with selected Commercial 
Space Centers. The objective of this pilot initiative is to 
broaden the benefits of the Commercial Space Centers to small 
and minority businesses.

                    commercial and general aviation

    The Committee has provided the budget request for 
aeronautics research and technology and shares NASA's 
commitment to this vital segment of the budget. The Committee 
recognizes the critical role aeronautics research and 
technology plays in NASA's mission and urges NASA to maintain 
its support in regaining the world's marketplace of commercial 
aviation. Likewise, the Committee strongly endorses NASA's 
leadership and support of the general aviation community and 
encourages further development and expansion in this area.

                    space commercial communications

    The Committee is concerned with the further reductions in 
the research portion of space commercial communications. NASA 
has been the catalyst for development of space commercial 
communication and the Committee recommends NASA continue to be 
instrumental in the development of these critical technologies.

             johnson space operations and management office

    The Committee is supportive of NASA's search and rescue 
technology research efforts through its Small Business 
Innovative Research program and further understands NASA is 
considering increasing its commitment to search and rescue 
efforts in its fiscal year 1999 request. The Committee 
encourages NASA to increase its efforts in fiscal year 1998, to 
the extent funds are available.

                           academic programs

    The Committee recommends $120,000,000 for Academic Programs 
in fiscal year 1998, a decrease of $400,000 from the fiscal 
year 1997 appropriation and $23,600,000 more than the 
President's budget request.
    The Committee strongly supports NASA educational programs, 
which expand opportunities and enhance diversity in the NASA 
sponsored research and education community. A portion of the 
increased funding provided by the Committee for academic 
programs in fiscal year 1998 is to be used to achieve a balance 
between the proportion of NASA funding received by minority 
institutions of higher education and other institutions of 
higher education.
    Of the additional funding provided, $3,300,000 is provided 
for replication of the Science, Engineering, Mathematics, and 
Aeronautics Academy program in Washington, D.C. and Chicago as 
well as other locations near NASA aeronautics centers and to 
expand support for programs in Cleveland, Dayton, and Detroit.
    The Committee also recommends $9,000,000 for continuation 
and expansion of the Partnership Awards program which was 
established in fiscal year 1997. Of this amount $4,500,000 is 
to be used for this program at historically black colleges and 
universities and $4,500,000 is for use at other minority 
universities.
    The Committee recommends $5,000,000 for other education 
programs with an emphasis on K-12 education in science. The 
Committee commends NASA for the innovation it has shown in 
creating educational programs utilizing both conventional and 
unconventional methods and encourages NASA to continue working 
with education and science centers to reach a broad spectrum of 
children to stimulate and further their interest in science and 
space.
    The Committee recognizes the value of the National Space 
Grant College and Fellowship program in helping the nation's 
schools, colleges, and universities prepare young people for 
careers in aerospace-related, high technology fields. However, 
the Committee is concerned that funding for this important 
program has been decreasing for many years. The Committee is 
interested in reversing this trend and has provided an 
additional $6,300,000 for the program, resulting in a total 
appropriation in fiscal year 1998 of $19,600,000. The 
additional funds include $3,500,000 to restore funding to the 
fiscal year 1990 level adjusted for inflation and $2,800,000 to 
raise qualified state consortia to the Phase I funding level.

                            mission support

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $2,513,200,000
Fiscal year 1997 appropriation........................     2,562,200,000
Fiscal year 1998 budget request.......................     2,513,200,000
Comparison with fiscal year 1997 appropriation........       -49,000,000
Comparison with fiscal year 1997 request..............                 0
                                                                        

    The appropriation provides for mission support, including: 
safety, reliability, and quality 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 
operational activities supporting the conduct of agency 
programs.
    The Committee recommends a total of $2,513,200,000 for the 
mission support account. The recommended amount is the same as 
the budget request and $49,000,000 below the fiscal year 1997 
appropriation.

                      office of inspector general

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $18,300,000
Fiscal year 1997 appropriation........................        17,000,000
Fiscal year 1998 budget request.......................        18,300,000
Comparison with fiscal year 1997 appropriation........        +1,300,000
Comparison with fiscal year 1998 request..............                 0
                                                                        

    The Office of the Inspector General was established by the 
Inspector General Act of 1978 and is responsible for audit and 
investigation of all agency programs.
    The Committee recommends $18,300,000 for the Office of the 
Inspector General in fiscal year 1998, the same amount as 
requested in the President's budget. The funding provided is 
$1,300,000 above the amount provided in fiscal year 1997.

                  National Credit Union Administration

                       central liquidity facility

------------------------------------------------------------------------
                                      Limitation of      Administrative 
                                       direct loans         expenses    
------------------------------------------------------------------------
Fiscal year 1998 recommendation...       $600,000,000           $203,000
Fiscal year 1997 appropriation....        600,000,000            560,000
Fiscal year 1998 budget request...        600,000,000            203,000
Comparison with 1997 appropriation                  0           -357,000
Comparison with 1998 request......                  0                  0
------------------------------------------------------------------------

    The National Credit Union Central Liquidity Facility Act 
established the National Credit Union Administration Central 
Liquidity Facility (CLF) on October 1, 1979 as a mixed-
ownership Government corporation within the National Credit 
Union Administration. It is managed by the National Credit 
Union Administration and is owned by its member credit unions. 
Loans may not be used to expand a loan portfolio, but are 
authorized to meet short-term requirements such as emergency 
outflows from managerial difficulties, seasonal credit, and 
protracted adjustment credit for long-term needs caused by 
disintermediation or regional economic decline.
    The Committee recommends the requested limitations of 
$600,000,000 on new loans and $203,000 on administrative 
expenses.

                      National Science Foundation

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $3,487,000,000
Fiscal year 1997 appropriation........................     3,270,000,000
Fiscal year 1998 budget request.......................     3,367,000,000
Comparison with fiscal year 1997 appropriation........      +217,000,000
Comparison with fiscal year 1998 request..............      +120,000,000
                                                                        

    The National Science Foundation was established in 1950 and 
received its first appropriation of $225,000 in 1951. The 
primary purpose behind its creation was to develop a national 
policy on science, and support and promote basic research and 
education in the sciences filling the void left after World War 
II.
    The Committee recommends a total of $3,487,000,000 for 
fiscal year 1998. The amount recommended is $217,000,000 above 
the fiscal year 1997 appropriation and $120,000,000 above the 
President's budget request.
    Of the amounts approved in the following appropriations 
accounts, the Foundation must limit transfers of funds between 
programs and activities to not more than $500,000 without prior 
approval of the Committee. Further, no changes may be made to 
any account or program element if it is construed to be policy 
or a change in policy. Any activity or program cited in this 
report shall be construed as the position of the Committee and 
should not be subject to reductions or reprogramming without 
prior approval of the Committee. Finally, it is the intent of 
the Committee that all carryover funds in the various 
appropriations accounts are subject to the normal reprogramming 
requirements outlined above.

                    research and related activities

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................    $2,537,700,000
Fiscal year 1997 appropriation........................     2,432,000,000
Fiscal year 1998 budget request.......................     2,514,700,000
Comparison with fiscal year 1997 appropriation........      +105,700,000
Comparison with fiscal year 1998 request..............       +23,000,000
                                                                        

    The appropriation for Research and Related Activities 
covers all programs in the Foundation except Education and 
Human Resources, Salaries and Expenses, NSF Headquarters 
Relocation, Major Research Equipment, and the Office of 
Inspector General. These are funded in other accounts in the 
bill. The Research and Related Activities appropriation 
includes United States Polar Research Programs and Antarctic 
Logistical Support Activities and the Critical Technologies 
Institute, which were previously funded through separate 
appropriations. Beginning with fiscal year 1997, the 
President's budget provided funding for the instrumentation 
portion of Academic Research Infrastructure in this account.
    The Committee recommends a total of $2,537,700,000 for 
Research and Related Activities in fiscal year 1997, an 
increase of $23,000,000 to the budget request. The increased 
funding is to be used only for the programs identified below.

                 knowledge and distributed intelligence

    Knowledge and distributed intelligence (KDI) is a major 
Foundation-wide research and education initiative that could 
have a profound impact on the research and education enterprise 
in this country by dramatically improving access to and 
organization of scientific, technical, and educational 
information and data. Inherent in this initiative is the 
expectation that high speed data communications and networking 
will continue to move forward so that data and information 
become more readily available to researchers and educators 
regardless of their geographic location. The Committee strongly 
supports the Foundation's role in interagency efforts to 
enhance development of very high speed networking systems as 
well as the KDI initiative.
    The Committee notes that KDI, and the collaborative 
potential it represents, could revolutionize the way we 
communicate and educate ourselves, and create entirely new 
areas of economic growth and individual opportunity. The manner 
in which KDI is expected to promote interaction among 
behavioral, social, physical, and computer scientists and 
engineers is of particular interest to the Committee as it 
encourages the Foundation to continue developing innovations 
which all of society can appreciate.

                        Next Generation Internet

    The Committee has included a total of $23,000,000 for the 
National Science Foundation's effort associated with 
development of the Next Generation Internet. The funding 
provided is an increase of $13,000,000 to the budget request 
for this item. The Committee action is in recognition of recent 
changes in this multi-agency effort and is consistent with how 
the program will be executed during fiscal year 1998.

                         internet registration

    The Committee is aware that the Foundation has a 
cooperative agreement with a company to provide internet domain 
name registration services and to collect fees to recover the 
cost of such registration. The fees collected in this process, 
to the extent they are in excess of costs, are to be placed in 
a fund to support internet research. The Committee expects to 
be fully informed as to the Foundation's plans for the 
disposition of this fund prior to any final actions.

                         supercomputer centers

    In late March of 1997 the National Science Board met to 
evaluate proposals for Partnerships for Advanced Computational 
Infrastructure. At that meeting two partnerships were selected 
and two other partnership proposals, with two existing 
supercomputer centers as lead, were not selected. The Board 
took the further action at that time of providing for phase-out 
of the two centers over a period of up to two years. This 
action was taken in recognition of the substantial investments 
made by the United States in those two centers, and to keep 
those resources available to the user community during a period 
of transition to the new partnership structure. The Committee 
does not disagree with the decision of the Board to begin the 
new partnerships, but the Committee is concerned that 
inadequate funding is allocated for phase-out of the two 
centers which were not selected to lead new partnerships. 
Accordingly, the Committee has provided an additional 
$5,000,000 to be used only for the orderly phase-out of 
operations.

                world congress on information technology

    The committee is supportive of the upcoming World Congress 
on Information Technology. Should the Foundation receive a 
proposal requesting support for this endeavor, the Committee 
urges the Foundation to give it consideration consistent with 
established program guidelines and evaluation procedures.

                   U.S./Mexico Foundation for Science

    The Committee recommends $1,000,000 for the U.S./Mexico 
Foundation for Science which has a goal of improving U.S. and 
Mexican scientific and technological cooperation.

                National High Magnetic Field Laboratory

    The Committee notes the accomplishments of the National 
High Magnetic Field Laboratory and its innovative 
collaborations with private businesses. However, the Committee 
recognizes that other countries are making strides for world 
leadership in the nuclear magnetic resonance field. The 
chemical, biological, and materials advances that could result 
from such an initiative could have major commercial and 
economic benefits. The Committee therefor directs the National 
Science Foundation to review and evaluate recent foreign 
initiatives in nuclear resonance; develop, in cooperation with 
the Office of Science and Technology Policy and other agencies, 
appropriate federal responses to these initiatives, with 
particular attention to instrumentation and interagency 
cooperation; and report its findings to the Committee by 
February 1, 1998.
    The Committee is aware that the Foundation recently 
extended their support for the Laboratory for an additional 
five years and increased the level of support substantially. 
However, the Foundation was unable to fund the research areas 
related to structural biology and aspects of magnetic 
resonance. The Committee encourages the Foundation to work with 
the Laboratory, its partner, and new collaborators such as the 
University of Miami, to more effectively explore the 
applications of this important technology through an 
interagency, financial, collaborative agreement with the 
National Institutes of Health. The Committee requests that the 
Foundation report on progress made in assisting the Laboratory 
and the National Institutes of Health to work together as 
partners.

                             Ocean sciences

    The Committee notes the worldwide interest in ocean 
sciences to meet the global challenges related to global 
climate change, biodiversity, world ecological balance, as well 
as many other national and international science objectives. 
The Committee is aware that ocean research continues to be an 
underpinning of U.S. economic expansion, national security, and 
world scientific leadership. The Committee believes that ocean 
sciences should be a priority for the Nation and deserves 
appropriate funding to address these challenges within the 
agencies which have fiduciary and oversight responsibilities 
for research.

                 national institute for the environment

    The Committee has been impressed by the proposal for a non-
regulatory National Institute for the Environment with a 
mission to improve the scientific basis for making decisions on 
environmental issues. The Committee is very interested in the 
idea of establishing an institute that provides a major role 
for stakeholders in defining questions needing scientific 
attention and which funds ongoing knowledge assessments, 
extramural research, on-line information dissemination, and 
education and training through a competitive peer reviewed 
process. The National Science Foundation has the authority to 
advance such an Institute. Therefore, the Committee directs the 
Foundation to study how it would establish and operate such an 
institute, including the potential cost of such an institute, 
and report to the Committee by April 1, 1998.

                        Gemini telescope program

    The Committee recommendation includes $4,000,000 for the 
U.S. share of technical enhancements approved for the Gemini 
telescopes currently under construction in Hawaii and Chile. 
The Committee continues to be pleased with the excellent 
performance of the project team. After more than five years, 
the project remains on schedule and virtually within the 
original budget estimate of $176,000,000. Given the requirement 
to work with a variety of national and cultural backgrounds, 
this represents a significant achievement and should serve as a 
model for future international cooperative program.

                            Research support

    The Committee supports the Foundation's efforts in North 
Greenland and urges the cost effective use of research support/
capabilities currently available from existing entities, 
including non-profit wildlife research organizations with 
ongoing projects in the area.

                        MAJOR RESEARCH EQUIPMENT

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $175,000,000
Fiscal year 1997 appropriation........................        80,000,000
Fiscal year 1998 budget request.......................        85,000,000
Comparison with fiscal year 1997 appropriation........       +95,000,000
Comparison with fiscal year 1998 request..............       +90,000,000
                                                                        

    This account provides funding for the construction of major 
research facilities that provide unique capabilities at the 
cutting edge of science and engineering.
    The Committee recommends a total of $175,000,000 for the 
major research equipment account for fiscal year 1998. This 
level reflects $26,000,000 for construction of the Laser 
Interferometer Gravitational Wave Observatory (LIGO), 
$25,000,000 for the Polar Cap Observatory, $9,000,000 for the 
Millimeter Array, and $115,000,000 for maintenance and 
construction of facilities in Antarctica.
    The Committee recommendation for LIGO, Polar Cap 
Observatory, and the Millimeter Array is the same as requested 
in the President's budget request.

                         u.s. antarctic program

    The National Science Foundation established the U.S. 
Antarctic Program External Panel in 1996 and gave the Panel the 
task of examining the Antarctic Program from both a scientific 
as well as a facilities point of view. The Panel completed its 
work in early 1997 and issued its final report in April. The 
conclusions of the Panel include the following:
          1. The geopolitical importance assigned to a 
        permanent U.S. presence in Antarctica, particularly the 
        South Pole, appears fully warranted.
          2. The research being performed in Antarctica is 
        comparable in its high quality and relevance to that 
        being supported elsewhere by the Foundation.
          3. The Antarctic program is well managed.
          4. Impressive cost-reductions have been taken in 
        recent years and further opportunities exist for 
        additional savings.
          5. Further life-extension efforts devoted to the 
        existing South Pole facility are neither cost effective 
        nor conducive to the effective operation of a remote 
        station.
          6. Communications to and from Antarctica, and 
        especially the South Pole, are dated and tenuous and 
        require improvement to meet standards of a modern 
        research facility.
          7. Joint ownership of core facilities does not appear 
        to be in the best interest of the U.S. role in 
        promoting political stability.
          8. The quality of many U.S. facilities in Antarctica, 
        and particularly at the South Pole is not in keeping 
        with the standard reasonably expected and the 
        facilities are becoming increasingly unsafe.
    The Panel's principal conclusion is ``* * * that the South 
Pole Station needs to be replaced soon for economic, safety and 
operational reasons and the modest upgrades are needed at 
Palmer and McMurdo Stations.
    After reviewing the report of the Panel, the Committee 
endorses the conclusions reached by the Panel and agrees with 
its principal recommendations. The Committee appreciates the 
time and effort expended by the members of the Panel and places 
great value on their expertise and recommendations. However, 
the Committee believes that full funding of the South Pole 
Station replacement and other improvements in Antarctica, 
rather than incremental funding as proposed by the Panel, could 
lead to more efficient management of the refurbishment efforts. 
The Committee has therefor recommended providing $115,000,000 
in fiscal year 1998 for construction and refurbishment of 
facilities in Antarctica. When combined with program savings 
from logistics operations over the next five years, this amount 
will result in total funding of $145,000,000 available for the 
``optimized'' South Pole Station and infrastructure 
improvements at McMurdo and Palmer Stations. The Committee 
directs the Foundation to highlight logistics savings when they 
are expected to materialize so that future funding for the 
refurbishment can be traced to those savings.

                     EDUCATION AND HUMAN RESOURCES

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $632,500,000
Fiscal year 1997 appropriation........................       619,000,000
Fiscal year 1998 budget request.......................       625,500,000
Comparison with fiscal year 1997 appropriation........       +13,500,000
Comparison with fiscal year 1998 request..............        +7,000,000
                                                                        

    The Foundation's Education and Human Resources activities 
are designed to encourage the entrance of talented students 
into science and technology careers, to improve the 
undergraduate science and engineering education environment, to 
assist in providing all pre-college students with a level of 
education in mathematics, science, and technology that reflects 
the needs of the nation and is the highest quality attained 
anywhere in the world, and extend greater research 
opportunities to underrepresented segments of the scientific 
and engineering communities.
    For fiscal year 1998, the Committee recommends 
$632,500,000, an increase of $7,000,000 to the President's 
budget request and $13,500,000 above the fiscal year 1997 
appropriation.

                          SYSTEMIC INITIATIVE

    The National Science Foundation has made considerable 
progress with its state, urban, and rural systemic initiatives 
designed to promote reform of K-12 math and science education. 
Early results show significant math and science student 
achievements in NSF funded sites. The Committee believes each 
program should be sustained as appropriate and in particular, 
the Urban Systemic Initiative should be fully funded in fiscal 
year 1998. The funding level for this initiative should take 
into consideration its role in the recently announced excellent 
performance of U.S. students in 4th grade math and science.

      Alliance for Minority Participation and Summer Science Camps

    The Committee notes the national model which the Alliance 
for Minority Participation program has become for producing 
minority scientists and engineers. This very important national 
initiative should be sustained, as well as the K-12 programs 
that serve as feeders to it. One such program, the summer 
science camp program, serves as a stimulant for interest in 
math and science and is the foundation for future interest in 
these subject areas.

                ADVANCED TECHNOLOGICAL EDUCATION PROGRAM

    Although only established within the past few years, the 
Advanced Technological Education (ATE) program is viewed as 
crucial to ensuring a highly competent technical workforce. The 
Committee is pleased that the Foundation has forged effective 
partnerships with the relevant, local scientific and technical 
business sector to further expand the scope and significance of 
the program. The Committee encourages continued growth of this 
important activity. In order to foster this growth, the 
Committee has provided an additional $2,000,000 for the program 
in fiscal year 1998.
    Over the next ten years, it is forecast that the demand for 
technically skilled transportation workers will increase 
significantly. The Committee commends the National Science 
Foundation for its success to date with the ATE program, and it 
believes that NSF, through the ATE program can help the Nation 
develop a more technically competent, highly skilled 
transportation workforce. The Committee recognizes that NSF 
solicits ATE proposals from all areas of science and 
engineering and that the transportation area is one field, 
among many, in which proposals are submitted and awards are 
made. Nonetheless, the Committee directs NSF to work with the 
Department of Transportation to identify opportunities for 
possible ATE and other collaborative activities that can 
enhance technician training and education in the transportation 
field.

                          TEACHER PREPARATION

    Efforts to achieve high quality math and science 
performance in the K-12 sector is highly dependent upon the 
quality of the teacher workforce and, especially in urban and 
rural school systems, there is a growing inadequacy of highly 
qualified math and science teachers. Accordingly, the Committee 
strongly urges the National Science Foundation to strengthen 
and significantly expand its math and science teacher 
preparation programs.

                          TECHNOLOGY EDUCATION

    Increasingly the purposeful applications of technology is 
regarded as an integral and value-added component of high 
quality math, science, engineering and technology education. 
The National Science Foundation is urged to increase its 
investments in research and development that undergird learning 
technologies and their application in math, science, 
engineering, and technology education sites at the K-12, two 
year and community colleges, and undergraduate levels.

               Doctorate science and engineering degrees

    The Committee remains concerned about the low number of 
doctorate science and engineering degree recipients from under-
represented minority populations. To address this critical 
science and engineering human resource issue, the Committee 
directs the Foundation to develop a comprehensive plan for 
graduate education of under-represented minorities. While the 
report of this plan should be provided to the Committee by 
February 1, 1998, $5,000,000 is provided for the initiation of 
an effort designed to improve the production of science and 
engineering doctorates drawn from these under-represented 
groups.

                         SALARIES AND EXPENSES

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................      $136,950,000
Fiscal year 1997 appropriation........................       134,310,000
Fiscal year 1998 budget request.......................       136,950,000
Comparison with fiscal year 1997 appropriation........        +2,640,000
Comparison with fiscal year 1998 request..............                 0
                                                                        

    The Salaries and Expenses activity provides for the 
operation, support and management, and direction of all 
Foundation programs and activities and includes necessary funds 
that develop, manage, and coordinate Foundation programs. Also 
included in this account beginning in fiscal year 1997 is 
funding for NSF headquarters relocation.
    The Committee recommends an appropriation of $136,950,000 
for salaries and expenses and headquarters relocation in fiscal 
year 1998, the same as the President's budget request. The 
amount provided is $2,640,000 above the fiscal year 1997 
appropriation.

                      OFFICE OF INSPECTOR GENERAL

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................        $4,850,000
Fiscal year 1997 appropriation........................         4,690,000
Fiscal year 1998 budget request.......................         4,850,000
Comparison with fiscal year 1997 appropriation........          +160,000
Comparison with fiscal year 1998 request..............                 0
                                                                        

    This account provides National Science Foundation audit and 
investigation functions to identify and correct management and 
administrative deficiencies which could lead to fraud, waste, 
or abuse.
    For fiscal year 1998, the Committee has recommended 
$4,850,000 for the Office of Inspector General. This amount is 
$160,000 above the fiscal year 1997 level and is the same as 
the President's budget request.

                 Neighborhood Reinvestment Corporation

          PAYMENT TO THE NEIGHBORHOOD REINVESTMENT CORPORATION

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $70,000,000
Fiscal year 1997 appropriation........................        49,900,000
Fiscal year 1998 budget request.......................        50,000,000
Comparison with fiscal year 1997 appropriation........       +20,100,000
Comparison with fiscal year 1998 budget request.......       +20,000,000
                                                                        

    The Neighborhood Reinvestment Corporation, established by 
title VI of Public Law 95-557 in October 1978, is committed to 
promoting reinvestment in older neighborhoods by local 
financial institutions working cooperatively with community 
people and local government. This is primarily accomplished by 
assisting community-based partnerships (NeighborWorks 
organizations) in a range of local revitalization efforts. 
Increases in home ownership among lower-income families is a 
key revitalization tool. Neighborhood Housing Services of 
America (NHSA) supports lending activities of the NeighborWorks 
organizations through a national secondary market that 
leveraged over $420,000,000 last year in private sector 
investment.
    The Committee recommends an appropriation of $70,000,000 
for fiscal year 1998, an increase of $20,100,000 above the 
fiscal year 1997 level, and an increase of $20,000,000 above 
the budget request.

                        Selective Service System

                         salaries and expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1998 recommendation.......................       $23,413,000
Fiscal year 1997 appropriation........................        22,930,000
Fiscal year 1998 budget request.......................        23,919,000
Comparison with fiscal year 1997 appropriation........          +483,000
Comparison with fiscal year 1998 budget request.......          -506,000
                                                                        

    The Selective Service System 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 military if Congress 
and the President should authorize a return to the draft.
    The Committee notes that in November 1994, the Department 
of Defense provided the National Security Council and the 
Director of the Selective Service updated and revalidated 
scenarios, mobilization requirements, and timeframes of 
personnel needs. Reflecting realistic, post-Cold War thinking, 
these new requirements of the Department of Defense would 
require the Selective Service to deliver untrained registrants 
within 199 days of a declared event--up from 13 days--and would 
require the delivery of health care personnel in 222 days, up 
from just 42 days. Under this scenario, such a declared event 
would be a major military event with a major world power.
    For fiscal year 1998, the Committee has provided 
$23,413,000, an increase of $483,000 above the fiscal year 1997 
level and a decrease of $506,000 below the budget request. The 
Committee has provided the increase to accommodate necessary 
payroll requirements and to provide needed equipment and 
supplies. The Committee has not, however, provided any funding 
for the ``Service to America'' initiative requested in the 
budget submission. The Committee is not convinced that this 
expenditure is appropriate at this time. Moreover, there is 
significant concern that the federal agencies benefiting from 
this initiative are apparently not willing to compensate the 
Selective Service for its efforts. Therefore, the Committee 
directs that none of the funds provided herein be used in any 
way for or on behalf of this initiative.

                                TITLE IV

                           GENERAL PROVISIONS

    The Committee recommends that twenty-one general provisions 
carried in the fiscal year 1997 Appropriations Act be continued 
in fiscal year 1998.

              House of Representatives Report Requirements

    The following items are included in accordance with various 
requirements of the Rules of the House of Representatives:

                        Constitutional Authority

    Clause 2(l)(4) of rule XI of the Rules of the House of 
Representatives states that: ``Each report of a committee on a 
bill or joint resolution of a public character, shall include a 
statement citing the specific powers granted to the Congress in 
the Constitution to enact the law proposed by the bill or joint 
resolution.''
    The Committee on Appropriations bases its authority to 
report this legislation from clause 7 of section 9 of article I 
of the Constitution of the United States of America which 
states: ``No money shall be drawn from the Treasury but in 
consequence of Appropriations made by law * * *''
    Appropriations contained in this Act are made pursuant to 
this specific power granted by the Constitution.

                          Rescission of Funds

    Pursuant to clause 1(b), rule X of the rules of the House 
of Representatives, the following statement are made describing 
the rescission of funds provided in the accompanying bill.
    The Committee recommends a rescission of $565,000,000 under 
the annual contributions for assisted housing program in the 
Department of Housing and Urban Development.
    The Committee recommends a rescission of $6,000,000 under 
the supportive housing program in the Department of Housing and 
Urban Development.
    The Committee recommends a rescission of $4,000,000 under 
the shelter plus care program in the Department of Housing and 
Urban Development.
    The Committee recommends a rescission of $125,000,000 under 
the rental housing assistance program in the Department of 
Housing and Urban Development.

                           Transfer of Funds

    Pursuant to clause 1(b), rule X of the Rules of the House 
of Representatives, the following statements are made 
describing the transfers of funds provided in the accompanying 
bill.
    The Committee has included language under the Department of 
Veterans Affairs transferring not to exceed $26,380,000 from 
compensation and pensions to general operating expenses and 
medical care. These funds are for the administrative costs of 
implementing cost-saving proposals required by the Omnibus 
Budget Reconciliation Act of 1990 and the Veterans' Benefits 
Act of 1992. Language is also included permitting necessary 
sums to be transferred to the medical facilities revolving fund 
to augment funding of medical centers for nursing home care 
provided to pensioners as authorized by the Veterans' Benefits 
Act of 1992.
    The Committee recommends transferring the following amounts 
to the VA's general operating expenses appropriation pursuant 
to the Federal Credit Reform Act of 1990: the veterans housing 
benefit program fund program account ($160,437,000), the 
education loan fund program account ($200,000), the vocational 
rehabilitation loans program account ($388,000), and the Native 
American veteran housing loan program account ($515,000). In 
addition, the bill provides for transfers of $7,000 for program 
costs and $54,000 for the administrative expenses of the 
national homes program from the general post fund.
    The Committee has included language under the Department of 
Veterans Affairs which would transfer funds ($604,000,000) from 
the medical collections fund to medical care.
    The Committee recommends providing authority under 
administrative provisions for the Department of Veterans 
Affairs for any funds appropriated in 1998 for compensation and 
pensions, readjustment benefits, and veterans insurance and 
indemnities to be transferred between those three accounts. 
This will provide the Department of Veterans Affairs 
flexibility in administering its entitlement programs. Language 
is also included permitting the funds from three life insurance 
funds to be transferred to general operating expenses for the 
costs of administering such programs.
    The Committee has included language under the Department of 
Housing and Urban Development transferring all balances in the 
preserving existing housing investment account for preservation 
activities to the annual contributions for assisted housing 
account.
    The Committee recommends a provision under the Department 
of Housing and Urban Development which transfers all balances 
as of the end of fiscal year 1997 from various accounts into 
the Public Housing Capital Fund account.
    The Committee has included language under the Department of 
Housing and Urban Development transferring public housing 
operating subsidies to the public housing operating fund.
    The Committee recommends a transfer of $10,000,000 from 
Drug Elimination Grants for Low-Income Housing to the Office of 
Inspector General for Operation Safe Home.
    The Committee recommends language under the Department of 
Housing and Urban Development transferring balances for Indian 
housing programs under annual contributions for assisted 
housing, development of additional new subsidized housing, 
preserving existing housing development, HOME investment 
partnerships program, emergency shelter grants program and 
homeless assistance funds to the native American housing block 
grants account.
    The Committee recommends language under the Department of 
Housing and Urban Development transferring balances for elderly 
and disabled housing programs in annual contributions for 
assisted housing and development of additional new subsidized 
housing to housing for special programs.
    The Committee has included language under the Department of 
Housing and Urban Development transferring all uncommitted 
prior balances of excess rental charges and all collections 
made during fiscal year 1998 to the flexible subsidy fund.
    The Committee has included language transferring $1,000,000 
of funds appropriated for administrative expenses to carry out 
the section 108 loan guarantee program to the departmental 
salaries and expenses account.
    The Committee recommends transferring a total of 
$544,443,000 from the various funds of the Federal Housing 
Administration (not to exceed $326,309,000 from the FHA-mutual 
mortgage insurance program account, $218,134,000 from the FHA-
general and special risk program account), and $1,000,000 from 
community development block grants to salaries and expenses of 
the Department of Housing and Urban Development.
    The Committee has included language transferring a total of 
$11,283,000 from the various funds of the Federal Housing 
Administration (not to exceed $7,112,000 from the FHA-mutual 
mortgage insurance program account, $4,171,000 from the FHA-
general and special risk program account), and $10,000,000 from 
drug elimination grants for low-income housing to the Office of 
Inspector General.
    The Committee has included language transferring $9,383,000 
from the Government National Mortgage Association's guarantees 
of mortgage-backed securities loan guarantee program account to 
HUD's salaries and expenses account.
    The Committee recommends language allowing a transfer of 
$16,312,000 from the federal housing enterprise oversight fund 
to the office of federal housing enterprise oversight account.
    The Committee has included language under the Corporation 
for National and Community Service account which transfers not 
more than $69,000,000 to the National Service Trust account.
    The Committee has included language under the Environmental 
Protection Agency transferring $35,000,000 from science and 
technology to the National Institute of Environmental Health 
Sciences.
    The Committee has included language under the Environmental 
Protection Agency transferring funds from the hazardous 
substance superfund trust fund ($11,641,000) to the Office of 
Inspector General. In addition, $35,000,000 is transferred from 
the hazardous substance superfund trust fund to the science and 
technology account.
    The Committee has included language under the Environmental 
Protection Agency transferring $60,000,000 from the leaking 
underground storage tank trust fund to the leaking underground 
storage program.
    The Committee recommends transferring $15,000,000 from the 
oil spill liability trust fund to the oil spill response 
account.
    The Committee has included language under the Federal 
Deposit Insurance Corporation transferring up to $34,365,000 
from the Bank Insurance Fund, the Savings Association Insurance 
Fund, and the FSLIC Resolution Fund to the Office of Inspector 
General.
    The Committee has included language under the Federal 
Emergency Management Agency transferring up to $20,000,000 from 
the National Flood Insurance Fund to the National Flood 
Mitigation Fund.
    The Committee has included language under the National 
Aeronautics and Space Administration transferring up to 
$150,000,000 from science, aeronautics and technology and 
mission support to human space flight.

                  Compliance With Rule XIII, Clause 3

                               (ramseyer)

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):
    Section 403(c) of The Balanced Budget Downpayment Act, I is 
amended as follows:
    (c) Delay in Reissuance of Vouchers and Certificates.--
Notwithstanding any other provision of law, a public housing 
agency administering certificate or voucher assistance provided 
under subsection (b) or (o) of section 8 of the United States 
Housing Act of 1937, as amended, shall delay for 3 months, the 
use of any amounts of such assistance (or the certificate or 
voucher representing assistance amounts) made available by the 
termination during [fiscal years 1996 and 1997] fiscal years 
1996, 1997, and 1998 of such assistance on behalf of any family 
for any reason, but not later than October 1, 1996 for 
assistance made available during fiscal year 1996 and October 
1, 1997 for assistance made available during fiscal year 1997 
and October 1, 1998 for assistance made available during fiscal 
year 1998; 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.
    Section 8(c)(2)(A) of the United States Housing Act of 1937 
is to be amended as follows:
    (2)(A) The assistance contract shall provide for adjustment 
annually or more frequently in the maximum monthly rents for 
units covered by the contract to reflect changes in the fair 
market rentals established in the housing area for similar 
types and sizes of dwelling units or, if the Secretary 
determines, on the basis of a reasonable formula. However, 
where the maximum monthly rent, for a unit in a new 
construction, substantial rehabilitation, or moderate 
rehabilitation project, to be adjusted using an annual 
adjustment factor exceeds the fair market rental for an 
existing dwelling unit in the market area, the Secretary shall 
adjust the rent only to the extent that the owner demonstrates 
that the adjusted rent would not exceed the rent for an 
unassisted unit of similar quality, type, and age in the same 
market area, as determined by the Secretary. The immediately 
foregoing sentence shall be effective only during fiscal year 
1995, fiscal year 1996 prior to April 26, 1996, and [fiscal 
year 1997] fiscal years 1997 and 1998. Except for assistance 
under the certificate program, for any unit occupied by the 
same family at the time of the last annual rental adjustment, 
where the assistance contract provides for the adjustment of 
the maximum monthly rent by applying an annual adjustment 
factor and where the rent for a unit is otherwise eligible for 
an adjustment based on the full amount of the factor, 0.01 
shall be subtracted from the amount of the factor, except that 
the factor shall not be reduced to less than 1.0. In the case 
of assistance under the certificate program, 0.01 shall be 
subtracted from the amount of the annual adjustment factor 
(except that the factor shall not be reduced to less than 1.0), 
and the adjusted rent shall not exceed the rent for a 
comparable unassisted unit of similar quality, type, and age in 
the market area. The immediately foregoing two sentences shall 
be effective only during fiscal year 1995, fiscal year 1996 
prior to April 26, 1996, and [fiscal year 1997] fiscal years 
1997 and 1998. In establishing annual adjustment factors for 
units in new construction and substantial rehabilitation 
projects, the Secretary shall take into account the fact that 
debt service is a fixed expense. The immediately foregoing 
sentence shall be effective only during fiscal year 1998.
    Section 402(a) of the Balanced Budget Downpayment Act, I is 
to be amended as follows:

 public and assisted housing rents, income adjustments, and preferences

    Sec. 402. (a) Minimum rents.--Notwithstanding sections 3(a) 
and 8(o)(2) of the United States Housing Act of 1937, as 
amended, or section 206(d) of the Housing and Urban-Rural 
Recovery Act of 1983 (including section 206(d)(5) of such Act), 
and subsection (f) of this section, effective for fiscal year 
1997 and fiscal year 1998--
          (1) public housing agencies shall require each family 
        who is assisted under the certificate or moderate 
        rehabilitation program under section 8 of such Act to 
        pay a minimum monthly rent of up to $50;
          (2) public housing agencies shall reduce the monthly 
        assistance payment on behalf of each family who is 
        assisted under the voucher program under section 8 of 
        such Act so that the family pays a minimum monthly rent 
        of up to $50;
          (3) with respect to housing assisted under other 
        programs for rental assistance under section 8 of such 
        Act, the Secretary shall require each family who is 
        assisted under such program to pay a minimum monthly 
        rent of up to $50; and
          (4) public housing agencies shall require each family 
        who is assisted under the public housing program 
        (including public housing for Indian families) of such 
        Act to pay a minimum monthly rent of up to $50.
    Section 217(b)(3) of the Cranston-Gonzalez National 
Affordable Housing Act is to be amended as follows:
          (3) Minimum local allocation.--The Secretary shall 
        allocate funds available for formula allocation to 
        units of general local government that, as of the end 
        of the previous fiscal year, qualified as metropolitan 
        cities, urban counties, and consortia approved by the 
        Secretary in accordance with section 216(2) so that, 
        when all such funds are initially allocated by formula, 
        [only those jurisdictions that are allocated an amount 
        of $500,000 or greater shall receive an allocation] 
        jurisdictions that are allocated an amount of $500,000 
        or more, and participating jurisdictions (other than 
        consortia that fail to renew the membership of all of 
        their member jurisdictions) that are allocated an 
        amount less than $500,000, shall receive an allocation. 
        Prior to announcing initial allocations, the Secretary 
        shall successively recalculate the allocations to 
        jurisdictions under this subsection so that the maximum 
        number of such jurisdictions can receive initial 
        allocations, except as provided in paragraph (4).
    Language included under Environmental Protection Agency, 
Working Capital Fund in Public Law 104-204 is amended as 
follows:
    There is hereby established in the Treasury a [franchise 
fund pilot to be known as the] ``Working capital fund'', [as 
authorized by section 403 of Public Law 103-356,] to be 
available [as provided in such section] without fiscal year 
limitation for expenses and equipment necessary for the 
maintenance and operation of such administrative services as 
the Administrator determines may be performed more 
advantageously as central services: Provided, That any 
inventories, equipment, and other assets pertaining to the 
services to be provided by such fund, either on hand or on 
order, less the related liabilities or unpaid obligations, and 
any appropriations made hereafter for the purpose of providing 
capital, shall be used to capitalize such fund: Provided 
further, That such fund shall be paid in advance from funds 
available to the Agency and other Federal agencies for which 
such centralized services are performed, at rates which will 
return in full all expenses of operation, including accrued 
leave, depreciation of fund plant and equipment, amortization 
of automated data processing (ADP) software and systems (either 
acquired or donated), and an amount necessary to maintain a 
reasonable operating reserve, as determined by the 
Administrator: Provided further, That such fund shall provide 
services on a competitive basis: Provided further, That an 
amount not to exceed four percent of the total annual income to 
such fund may be retained in the fund for fiscal year 1997 and 
each fiscal year thereafter, to remain available until 
expended, to be used for the acquisition of capital equipment 
and for the improvement and implementation of Agency financial 
management, ADP, and other support systems: Provided further, 
That no later than thirty days after the end of each fiscal 
year amounts in excess of this reserve limitation shall be 
transferred to the Treasury [: Provided further, That such 
franchise fund pilot shall terminate pursuant to section 403(f) 
of Public Law 103-356].
    Section 1309(a)(2) of the National Flood Insurance Act, as 
amended by Division A, Title VI, Chapter 6 of Public Law 104-
208, is amended as follows:
    (a) All authority which was vested in the Director by 
virtue of section 2414(e) of this title (pertaining to the 
issue of notes or other obligations to the Secretary of the 
Treasury), as amended by subsections (a) and (b) of section 
1303 of this Act, shall be available to the Director for the 
purpose of carrying out the flood insurance program under this 
chapter; except that the total amount of notes and obligations 
which may be issued by the Director pursuant to such authority: 
(1) without the approval of the President, may not exceed 
$500,000,000, and (2) with the approval of the President, may 
not exceed $1,500,000,000 through September 30, [1997] 1998, 
and $1,000,000,000 thereafter. The Director shall report to the 
Committee on Banking, Finance, and Urban Affairs of the House 
of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate at any time when he requests the 
approval of the President in accordance with the preceding 
sentence.

               Changes in the Application of Existing Law

    The Committee submits the following statements in 
compliance with clause 3, rule XXI of the House of 
Representatives, describing the effects of provisions proposed 
in the accompanying bill which may be considered, under certain 
circumstances, to change the application of existing law, 
either directly or indirectly.
    Language is included in various parts of the bill to 
continue ongoing activities and programs where authorizations 
have not been enacted to date.
    In some cases, the Committee has recommended appropriations 
which are less than the maximum amounts authorized for the 
various programs funded in the bill. Whether these actions 
constitute a change in the application of existing law is 
subject to interpretation, but the Committee felt that this 
should be mentioned.
    The Committee has included limitations for official 
reception and representation expenses for selected agencies in 
the bill.
    Sections 401 through 421 of title IV of the bill, all of 
which are carried in the fiscal year 1997 Appropriations Act, 
are general provisions which place limitations or restrictions 
on the use of funds in the bill and which might, under certain 
circumstances, be construed as changing the application of 
existing law.
    The bill includes, in certain instances, limitations on the 
obligation of funds for particular functions or programs. These 
limitations include restrictions on the obligation of funds for 
administrative expenses, the use of consultants, and 
programmatic areas within the overall jurisdiction of a 
particular agency.
    Language is included under the Department of Veterans 
Affairs, readjustment benefits, allowing the use of funds for 
payments arising from litigation involving the vocational 
training program.
    Language is included under the Department of Veterans 
Affairs, medical care, earmarking and delaying the availability 
of certain equipment and land and structures funds, and 
earmarking funds for a study of the cost effectiveness of 
contracting with local hospitals in East Central Florida for 
non-emergent inpatient health care. Language is also included 
which provides for the availability of funds collected as a 
result of enactment of additional legislation.
    Language is included under the Department of Veterans 
Affairs, medical and prosthetic research, earmarking funds for 
medical research relating to Persian Gulf War illnesses.
    Language is included under the Department of Veterans 
Affairs, general operating expenses, providing for the 
reimbursement to the Department of Defense for the costs of 
overseas employee mail. This language has been carried 
previously and permits free mailing privileges for VA personnel 
stationed in the Philippines. Language is included which 
permits this appropriation to be used for administration of the 
Service Members Occupational Conversion and Training Act in 
1998, and prohibits relocating certain loan guaranty functions 
from the St. Petersburg Regional Office.
    Language is included under the Department of Veterans 
Affairs, construction, major projects, establishing time 
limitations and reporting requirements concerning the 
obligation of major construction funds, limiting the use of 
funds, and allowing the use of funds for program costs.
    Language is included under the Department of Veterans 
Affairs, construction, minor projects, providing that obligated 
balances of previous appropriations may be used for any project 
with an estimated cost of less than $4,000,000, allowing the 
use of funds for program costs, and making funds available for 
damage caused by natural disasters.
    Language is included under the Department of Veterans 
Affairs, parking revolving fund, providing for parking 
operations and maintenance costs out of medical care funds.
    Language is included under the Department of Veterans 
Affairs, administrative provisions, permitting transfers 
between mandatory accounts, limiting and providing for the use 
of certain funds, and funding administrative expenses 
associated with VA life insurance programs from excess program 
revenues. These seven provisions have been carried in previous 
appropriations Acts.
    Language is included under the Department of Housing and 
Urban Development, public and Indian housing certificate fund, 
which provides the Secretary authority to waive law with 
respect to housing vouchers and limits the use of funds for 
specific housing activities.
    Language is included under the Department of Housing and 
Urban Development, annual contributions for assisted housing, 
rescinding funds and transferring remaining balances in the 
preservation account into this account.
    Language is included under the Department of Housing and 
Urban Development, public housing capital fund, which transfers 
prior year balances for use in a new account.
    Language is included under the Department of Housing and 
Urban Development, public housing operating fund, which 
transfers prior year balances for use in a new account.
    Language is included under Department of Housing and Urban 
Development, drug elimination grants for low-income housing, 
which specifies the use of certain funds, gives authority to 
redefine the term ``drug related crime,'' and places a 
restriction on the use of funds for sports grants.
    Language is included under Department of Housing and Urban 
Development, revitalization of severely distressed public 
housing (HOPE VI), which places restrictions on the use of 
funds for settlement of litigation.
    Language is included under Department of Housing and Urban 
Development, Native American housing block grants program, 
which transfers prior balances from other programs for use in a 
new account.
    Language is included under Department of Housing and Urban 
Development, community development block grants fund, which 
earmarks funds for specific housing organizations and programs, 
and limits the expenses for planning and management development 
and administrative activities.
    Language is included under Department of Housing and Urban 
Development, home investment partnerships program, which 
earmarks funds for a counseling program and for a demonstration 
allowing qualified CDFIs to purchase nonconforming loans from 
conventional home mortgage lenders.
    Language is included under Department of Housing and Urban 
Development, housing for special populations: elderly and 
disabled, which earmarks funds for tenant-based rental 
assistance for the disabled, which permits waivers of certain 
program provisions under the disabled and elderly programs, and 
transfers prior year balances for use in a new account.
    Language is included under Department of Housing and Urban 
Development, rental housing assistance, which reduces the 
uncommitted balances of previous provided authority by not more 
than $7,350,000.
    Language is included under Department of Housing and Urban 
Development, flexible subsidy fund, which permits the use of 
excess rental charges.
    Language is included under Department of Housing and Urban 
Development, FHA-general and special risk program account, 
which provides for the use of prior year funds and the 
earmarking of funds for various purposes.
    Language is included under Department of Housing and Urban 
Development, fair housing and equal opportunity, which places 
restrictions on the use of funds for lobbying activities.
    Language is included under Department of Housing and Urban 
Development, office of federal housing enterprise oversight, 
which limits net appropriations for the General Fund of the 
Treasury.
    Language is included under Department of Housing and Urban 
Development, administrative provisions, which delays the 
issuance and re-issuance of vouchers and certificates, 
maintains and reduces annual adjustment factors, waives 
provisions of the Community Development Act, limits rents on 
high cost units, extends the freeze on annual adjustment 
factors in project-based units, imposes a minimum rent on 
public housing and assisted housing residents, and includes a 
provision to hold harmless those participating jurisdictions 
that could lose eligibility in HOME program because of increase 
in the appropriations for the program.
    Language is included under the Corporation for National and 
Community Service which limits funds for various program 
activities.
    Language is included under the Court of Veterans Appeals, 
salaries and expenses, permitting the use of funds for a pro 
bono program.
    Language is included under the Environmental Protection 
Agency, buildings and facilities, which authorizes the 
construction of a new building and limits the maximum cost of 
the new building.
    Language is included under the Environmental Protection 
Agency, hazardous substance superfund, limiting the 
availability of funds for toxicological profiles performed by 
the Agency for Toxic Substances and Disease Registry and 
limiting the funds available for Brownfields assessments.
    Language is included under the Environmental Protection 
Agency, state and tribal assistance grants, which provides 
grants to states and local tribal governments.
    Language is included under the Environmental Protection 
Agency, state and tribal assistance grants, which permits the 
EPA to use categorical assistance grant funds to operate 
certain environmental programs when states or tribes do not 
have acceptable programs in place.
    Language is included under the Environmental Protection 
Agency, working capital fund, which makes the program 
permanent.
    Language is included under the Federal Emergency Management 
Agency, emergency management and planning assistance program, 
which earmarks funds for construction of a facility.
    Language is included under the Federal Emergency Management 
Agency, emergency food and shelter program, limiting 
administrative expenses.
    Language is included under the Federal Emergency Management 
Agency, national flood insurance fund, which limits 
administrative expenses, program costs, and the amount 
available for repayment of debt, and which sets the rate for 
flood insurance for fiscal year 1998 at the level set in the 
National Flood Insurance Reform Act of 1994.
    Language is included under the Federal Emergency Management 
Agency, national flood insurance fund, which maintains the 
borrowing authority for fiscal year 1998 at the 1997 level of 
$1,500,000,000.
    Language is included under the Federal Emergency Management 
Agency, administrative provision, promulgating a schedule of 
fees concerning the radiological emergency preparedness 
program.
    Language is included under the General Services 
Administration, Consumer Information Center, limiting certain 
fund and administrative expenses, and permitting the acceptance 
of gifts for the purpose of defraying the costs of printing, 
publishing and distributing consumer information.
    Language is included under the National Aeronautics and 
Space Administration, administrative provisions, extending the 
availability of construction of facilities funds,permitting 
funds for contracts for various services in the next fiscal year, and 
transferring of prior year appropriations to the appropriate new 
appropriation accounts.
    Language is included under the National Credit Union 
Administration, central liquidity facility, limiting new loans 
and administrative expenses.
    Language is included under the National Science Foundation, 
research and related activities, providing for the use of 
receipts from other research facilities, and requiring under 
certain circumstances proportional reductions in legislative 
earmarkings.
    Language is included under the National Science Foundation, 
education and human resources activities, requiring under 
certain circumstances proportional reductions in legislative 
earmarkings.
    Language is included under the National Science Foundation, 
salaries and expenses, permitting funds for contracts for 
various services in the next fiscal year and permitting 
reimbursement of funds to the General Services Administration 
for relocation activities.
    Language is included under the Selective Service System, 
salaries and expenses, permitting the President to exempt the 
agency from apportionment restrictions of the Budget and 
Accounting Act of 1921 and prohibiting the use of funds for 
activities related to the induction of individuals into the 
Armed Forces of the United States.

                  Appropriations Not Authorized by Law

    Pursuant to clause 3 of rule XXI of the House of 
Representatives, the following lists the appropriations in the 
accompanying bill which are not authorized by law:
    Department of Veterans Affairs:
          Construction, Major projects.
          Medical Care (Collections only)
    Department of Housing and Urban Development: All programs 
except the Native American Housing Grant program.
    Consumer Product Safety Commission.
    Corporation for National and Community Service.
    Environmental Protection Agency:
          Science and Technology (except the Clean Air Act).
          Environmental Programs and Management (except the 
        Clean Air Act).
          Hazardous Substance Superfund.
          State and Tribal Assistance Grants.
    Office of Science and Technology Policy.
    Federal Emergency Management Agency:
          Emergency Food and Shelter Program.
          Emergency Management Planning and Assistance (with 
        respect to the Federal Fire Prevention and Control Act 
        of 1974, Defense Production Act of 1950 and the Urban 
        Property Protection and Reinsurance Act).
    General Services Administration--Consumer Information 
Center.
    National Aeronautics and Space Administration: All 
programs.
    National Science Foundation: All programs.
    Neighborhood Reinvestment Corporation.

           Balanced Budget and Emergency Deficit Control Act

    During fiscal year 1998 for purposes of the Balanced Budget 
and Emergency Deficit Control Act of 1985 (Public Law 99-177), 
the following information provides the definition of the term 
``program, project, and activity'' for departments and agencies 
carried in the accompanying bill. The term ``program, project, 
and activity'' shall include the most specific level of budget 
items identified in the 1998 Departments of Veterans Affairs 
and Housing and Urban Development, and Independent Agencies 
Appropriations Act, the accompanying House and Senate reports, 
the conference report of the joint explanatory statement of the 
managers of the committee of conference.
    In applying any sequestration reductions, departments and 
agencies shall apply the percentage of reduction required for 
fiscal year 1998 pursuant to the provisions of Public Law 99-
177 to each program, project, activity, and subactivity 
contained in the budget justification documents submitted to 
the Committees on Appropriations of the House and Senate in 
support of the fiscal year 1998 budget estimates, as amended, 
for such departments and agencies, as subsequently altered, 
modified, or changed by Congressional action identified by the 
aforementioned Act, resolutions and reports. Further, it is 
intended that in implementing any Presidential sequestration 
order, (1) no program, project, or activity should be 
eliminated, (2) no reordering of funds or priorities occur, and 
(3) no unfunded program, project, or activity be initiated. 
However, for the purposes of program execution, it is not 
intended that normal reprogramming between programs, projects, 
and activities be precluded after reductions required under the 
Balanced and Emergency Deficit Control Act are implemented.

                   Comparison With Budget Resolution

    Section 308(a)(1)(A) of the Congressional Budget and 
Impoundment Control Act of 1974 (Public Law 93-344) requires 
that the report accompanying a bill providing new budget 
authority contain a statement detailing how the authority 
compares with the reports submitted under section 602(b) of the 
Act of the most recently agreed to concurrent resolution on the 
budget for the fiscal year. This information follows:
    The bill provides no new spending authority as described in 
section 401(c)(2) of the Congressional Budget and Impoundment 
Control Act of 1974 (Public Law 93-344), as amended.

                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                         602(b) allocation                   This bill          
                                                 ---------------------------------------------------------------
                                                      Budget                          Budget                    
                                                     authority        Outlays        authority        Outlays   
----------------------------------------------------------------------------------------------------------------
Comparison with budget resolution:                                                                              
    Discretionary...............................          60,951          77,168          70,150          80,502
    Mandatory...................................          21,332          20,061          21,542          19,711
                                                 ---------------------------------------------------------------
      Total.....................................          82,283          97,229          91,692         100,213
----------------------------------------------------------------------------------------------------------------
Note.--The amounts in this bill are technically in excess of the subcommittee section 602(b) subdivision.       
  However, pursuant to section 203 of H. Con. Res. 84, the FY 1998 Congressional Budget Resolution, increases to
  the Committee section 602(a) allocation are authorized for funding in the reported bill for the renewal of    
  expiring contracts for tenant- and project-based housing assistance under section 8 of the United States      
  Housing Act of 1937. After the bill is reported to the House, the Chairman of the Committee on the Budget will
  provide an increased section 602(a) allocation consistent with the funding provided in the bill. That new     
  allocation will eliminate the technical difference prior to floor consideration.                              

                      Five-Year Outlay Projections

    In accordance with section 308(a)(1)(C) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the following information was 
provided to the Committee by the Congressional Budget Office:

                                                                        
                                                            Millions    
                                                                        
Budget authority......................................           $91,692
Outlays:                                                                
    1998..............................................            52,801
    1999..............................................            23,730
    2000..............................................             6,573
    2001..............................................             4,139
    2002 and beyond...................................             3,573
                                                                        

          Financial Assistance to State and Local Governments

    In accordance with section 308(a)(1)(D) of the 
Congressional Budget and Impoundment Control Act of 1974 
(Public Law 93-344), as amended, the Congressional Budget 
Office has provided the following estimates of new budget 
authority and outlays provided by the accompanying bill for 
financial assistance to state and local governments:

                                                                        
                                                            Millions    
                                                                        
Budget authority......................................           $25,040
Fiscal year 1998 outlays resulting therefrom..........             4,849
                                                                        

      
    
    
                 ADDITIONAL VIEWS OF HON. DAVID R. OBEY

    In many ways, the 1998 VA-HUD-Independent Agencies 
Appropriations bill is a reasonably balanced measure. It 
includes increases above the President's budget request for the 
Department of Housing and Urban Development, the Department of 
Veterans Affairs, the National Aeronautics and Space 
Administration, the National Science Foundation, and the 
Federal Emergency Management Agency. In addition, in contrast 
with the situation of two years ago when a score of anti-
environmental riders were included, this year's bill contains 
virtually no extraneous legislative riders.
    The allocation of resources, however, raises some concerns 
about priorities and about the budget process as well. Although 
the Committee has recommended increases above the budget of 
$550 million for the Department of Housing and Urban 
Development, $250 million for the Federal Emergency Management 
Agency, $148 million for the National Aeronautics and Space 
Administration, $120 million for the National Science 
Foundation, and $110 million for administration of the 
Department of Veterans Affairs, it decided not to add funds for 
the veterans medical care account and it has not included the 
President's requested increase to speed the cleanup of 
Superfund sites across the country. Unfortunately, the 
priorities represented by these funding decisions may be driven 
as much by the vagaries of the budget process as by a well 
thought out, full and open discussion weighing opposing points 
of view.
    The simple truth of the matter is that this subcommittee's 
allocation made pursuant to the budget resolution is rich in 
budget authority and poor in outlays. The result is a bill that 
tends to penalize those accounts and agencies that spend money 
quickly and unnecessarily reward those that spend money 
relatively slowly. Looked at in isolation, for any given year, 
an approach like this may make sense. However, when decisions 
are made in this way year after year, it merely compounds the 
problem and limits future discretion--much the way that our 
discretion for 1998 has been severely hampered by similar 
decisions made in previous years. The funding decisions 
reflected in this bill will come back in un-intentioned ways in 
the years ahead. The most serious flaw with the Committee's 
approach on this bill is that the looming bow wave of outlays 
will come due for many of the recommended increases at just the 
time when discretionary spending is declining precipitously to 
conform with the unrealistic outyear projections of the budget 
resolution. The resulting budget crunch will probably mean that 
several programs of higher merit than many of the ones funded 
in this bill will be hurt.
    Perhaps the most curious example of a funding decision in 
this bill which will undoubtedly have undesirable future 
impacts is $60 million recommended for a full-scale windstorm 
simulation center. The rather cryptic reference to this project 
contained in the bill and report neglects to point out that $60 
million is the first installment of a proposed, three-year, 
$180 million construction project to be built on a non-
competitive basis by the contractor operating the government 
owned Department of Energy Idaho National Engineering and 
Environmental Technology Laboratory.
    Although the contractor maintains that $34 million for 
design and engineering expenses is the most that can be used on 
the project in 1998, the Committee has recommended nearly 
double that amount. The project is not authorized, and as noted 
above, has not been competitively awarded. It has not been 
requested by the agency that would receive the funding, the 
Department of Energy; nor by the Federal Emergency Management 
Agency, which would act as a conduit for the funding. It has 
not been addressed in Congressional hearings in anything more 
than a cursory manner. The project has not been peer reviewed. 
Although the project was discussed at some length during a 
recent symposium hosted by the American Association of Wind 
Engineers, the report of this symposium is not yet available. 
Concerns have been expressed in the university community that 
unless adequate provisions are made for sustained operating 
budgets, the high cost of individual experiments may preclude 
many schools from participating. FEMA has indicated that its 
support for the project is contingent upon development of a 
broad based consortium. FEMA has also stated that it ``should 
not be the primary source of funding for the partnership for 
natural disaster reduction or the construction and use of any 
proposed facilities.'' Although the contractor markets the 
proposal as an innovative public-private partnership, to date, 
the insurance and home building industries that potentially 
stand to gain from the facility have not provided any financial 
support.
    No one can disagree with the objectives of the windstorm 
simulation facility--research and engineering to help reduce 
the terrible costs to many elements of our society inflicted by 
tornadoes, hurricanes and other severe winds. The issue for the 
Congress to decide is whether the proposed facility at the 
Department of Energy's Idaho laboratory has been sufficiently 
reviewed and is the best way to proceed at this time. I hope 
that during House consideration of this measure it will be 
possible to address many of the questions raised by the 
Committee's recommendation for the windstorm simulation center.

                                                         Dave Obey.