[House Report 105-610]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-610
_______________________________________________________________________


 
DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
             INDEPENDENT AGENCIES APPROPRIATIONS BILL, 1999

                                _______
                                

  July 8, 1998.--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. 4194]

    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, 1999, and for other 
purposes.

                        INDEX TO BILL AND REPORT

_______________________________________________________________________


                                                            Page number

                                                            Bill Report
Title I--Department of Veterans Affairs....................     2
                                                                      4
Title II--Department of Housing and Urban Development......    17
                                                                     22
Title III--Independent Agencies............................    52
                                                                     44
        American Battle Monuments Commission...............    52
                                                                     44
        Chemical Safety and Hazard Investigation Board.....    53
                                                                     45
        Community Development Financial Institutions.......    53
                                                                     45
        Consumer Product Safety Commission.................    54
                                                                     46
        Corporation for National and Community Service.....    55
                                                                     47
        Court of Veterans Appeals..........................    56
                                                                     48
        Cemeterial Expenses, Army..........................    56
                                                                     49
        Environmental Protection Agency....................    56
                                                                     49
        Office of Science and Technology Policy............    65
                                                                     80
        Council on Environmental Quality and Office of 
            Environmental Quality..........................    66
                                                                     80
        Federal Deposit Insurance Corporation..............    66
                                                                     81
        Federal Emergency Management Agency................    67
                                                                     81
        Consumer Information Center........................    71
                                                                     89
        National Aeronautics and Space Administration......    72
                                                                     90
        National Credit Union Administration...............    76
                                                                     99
        National Science Foundation........................    76
                                                                     99
        Neighborhood Reinvestment Corporation..............    79
                                                                    106
        Selective Service System...........................    79
                                                                    107
Title IV--General Provisions...............................    80
                                                                    107

                          Summary of the Bill

    The Committee recommends $93,300,545,030 in new budget 
(obligational) authority for the Departments of Veterans 
Affairs and Housing and Urban Development, and 18 independent 
agencies and offices. This amount is $3,276,282,030 above the 
1998 appropriations level.
    The following table summarizes the amounts recommended in 
the bill in comparison with the appropriations for fiscal year 
1998 and budget estimates for fiscal year 1999.

                                             SUMMARY OF BUDGET ESTIMATES AND AMOUNTS RECOMMENDED IN THE BILL                                            
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      Bill compared                     
                                                                              Budget estimates,    Recommended in          with          Bill compared  
                                                           Appropriated 1998         1999               bill          appropriated,       with budget   
                                                                                                                           1998         estimates, 1999 
--------------------------------------------------------------------------------------------------------------------------------------------------------
American Battle Monuments Commission.....................        $26,897,000        $23,931,000        $26,431,000          -$466,000        +$2,500,000
Cemeterial Expenses, Army................................         11,815,000         11,666,000         11,666,000           -149,000  .................
Chemical Safety and Hazard Investigations Board..........          4,000,000          7,000,000          6,500,000         +2,500,000           -500,000
Community Development Financial Institutions.............         80,000,000        125,000,000         80,000,000  .................        -45,000,000
Consumer Information Center Fund.........................          2,419,000          2,419,000          2,619,000           +200,000           +200,000
Consumer Product Safety Commission.......................         45,000,000         46,500,000         46,000,000         +1,000,000           -500,000
Corporation for National and Community Service...........        428,500,000        502,316,000  .................       -428,500,000       -502,316,000
Council on Environmental Quality.........................          2,500,000          3,020,000          2,675,000           +175,000           -345,000
Court of Veterans Appeals................................          9,319,000         10,195,000         10,195,000           +876,000  .................
Department of Housing and Urban Development\1\...........     21,444,565,000     24,815,263,705     26,554,178,030     +5,108,613,030     +1,737,914,325
Department of Veterans Affairs\1\........................     40,976,799,000     42,149,737,000     42,318,158,000     +1,341,359,000       +168,421,000
Environmental Protection Agency..........................      7,363,046,000      7,790,275,400      7,422,739,000        +59,693,000       -367,536,400
Federal Deposit Insurance Corporation (transfer).........       (34,365,000)       (34,666,000)       (34,666,000)         (+301,000)  .................
Federal Emergency Management Agency......................        829,958,000        843,582,000        817,282,000        -12,676,000        -26,300,000
    Emergency funding....................................      1,600,000,000        626,296,000  .................     -1,600,000,000       -626,296,000
National Aeronautics and Space Administration............     13,648,000,000     13,465,000,000     13,328,200,000       -319,800,000       -136,800,000
National Credit Union Administration.....................          1,000,000  .................          2,000,000         +1,000,000         +2,000,000
    (Limitation on direct loans).........................      (600,000,000)      (600,000,000)      (600,000,000)  .................  .................
National Science Foundation\1\...........................      3,429,000,000      3,773,000,000      3,626,700,000       +197,700,000       -146,300,000
Neighborhood Reinvestment Corporation....................         60,000,000         90,000,000         90,000,000        +30,000,000  .................
Office of Science and Technology Policy..................          4,932,000          5,026,000          5,026,000            +94,000  .................
Selective Service System.................................         23,413,000         24,940,000         24,176,000           +763,000           -764,000
Budget scorekeeping adjustments..........................         33,100,000     -8,934,450,000     -1,070,000,000     -1,103,100,000     +7,864,450,000
                                                          ----------------------------------------------------------------------------------------------
      Grand total for FY 1999............................     88,424,263,000     92,618,871,105     93,303,545,030     +4,876,282,030       +681,673,925
        Emergency funding................................      1,600,000,000        626,296,000  .................     -1,600,000,000        626,296,000
                                                          ----------------------------------------------------------------------------------------------
          Total, FY 1999.................................     90,024,263,000     93,245,167,105     93,300,554,030     +3,276,282,030        +55,377,925
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Does not reflect amounts included in title IV, General Provisions. (-$80,000,000 for Department of Housing and Urban Development, +$10,000,000 for  
  Department of Veterans Affairs, and +$70,000,000 for the National Science Foundation.)                                                                

                                TITLE I

                     DEPARTMENT OF VETERANS AFFAIRS

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................   $42,318,158,000
Fiscal year 1998 appropriation........................    40,976,799,000
Fiscal year 1999 budget request.......................    42,149,737,000
Comparison with fiscal year 1998 appropriation........    +1,341,359,000
Comparison with fiscal year 1999 budget request.......      +168,421,000
                                                                        

    The Department of Veterans Affairs is the third largest 
Federal agency in terms of employment with an average 
employment of approximately 204,000. It administers benefits 
for more than 25,000,000 veterans, and 44,000,000 family 
members of living veterans and survivors of deceased veterans. 
Thus, close to 70,000,000 people, comprising about 26 percent 
of the total population of the United States, are potential 
recipients of veterans benefits provided by the Federal 
Government.
    A total of $42,318,158,000 in new budget authority is 
recommended by the Committee for the Department of Veterans 
Affairs programs in fiscal year 1999. The funds recommended 
provide for compensation payments to 2,669,300 veterans and 
survivors of deceased veterans with service-connected 
disabilities; pension payments for 673,047 non-service-
connected disabled veterans, widows and children in need of 
financial assistance; educational training and vocational 
assistance to 438,490 veterans, servicepersons, and reservists, 
and 43,043 eligible dependents of deceased veterans or 
seriously disabled veterans; housing credit assistance in the 
form of 222,000 guaranteed loans provided to veterans and 
servicepersons; administration or supervision of life insurance 
programs with 4,740,794 policies for veterans and active duty 
servicepersons providing coverage of $487,822,000,000; 
inpatient care and treatment of beneficiaries in 172 hospitals; 
40 domiciliaries, 134 nursing homes and 673 outpatient clinics 
which includes independent, satellite, community-based, and 
rural outreach clinics involving 37,027,000 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 1999 recommendation.......................   $21,857,058,000
Fiscal year 1998 appropriation........................    20,482,997,000
Fiscal year 1999 budget request.......................    21,857,058,000
Comparison with fiscal year 1998 appropriation........    +1,374,061,000
Comparison with fiscal year 1999 budget request.......                 0
                                                                        

    This appropriation provides funds for service-connected 
compensation payments to an estimated 2,669,300 beneficiaries 
and pension payments to another 673,047 beneficiaries with non-
service-connected disabilities. The average cost per 
compensation case in 1999 is estimated at $6,866, and pension 
payments are projected at a unit cost of $4,536. The estimated 
caseload and cost by program for 1998 and 1999 are as follows:

----------------------------------------------------------------------------------------------------------------
                                                             1998                1999             Difference    
----------------------------------------------------------------------------------------------------------------
Caseload:                                                                                                       
    Compensation:                                                                                               
        Veterans....................................          2,283,761           2,361,862             +78,101 
        Survivors...................................            304,683             305,438                +755 
        Children....................................              2,000               2,000                   0 
        Clothing allowance (non-add)................            (74,384)            (75,252)              (-868)
    Pensions:                                                                                                   
        Veterans....................................            398,802             390,063              -8,739 
        Survivors...................................            300,029             282,984             -17,045 
        Minimum income for widows (non-add).........               (397)               (782)              (+385)
        Vocational training (non-add)...............                (85)                 (0)               (-85)
        Burial allowances...........................             97,300              92,400              -4,900 
                                                     ===========================================================
Funds:                                                                                                          
    Compensation:                                                                                               
        Veterans....................................    $14,052,014,000     $15,270,428,000     +$1,218,414,000 
        Survivors...................................      3,298,467,000       3,313,334,000         +14,867,000 
        Children....................................         21,488,000          21,700,000            +212,000 
        Clothing allowance..........................         39,308,000          39,767,000            +459,000 
        Payment to GOE (Public Laws 101-508 and 102-                                                            
         568).......................................          1,460,000           1,472,000             +12,000 
        Medical exams pilot program.................          7,953,000          16,700,000          +8,747,000 
    Pensions:                                                                                                   
        Veterans....................................      2,306,876,000       2,326,838,000         +19,962,000 
        Survivors...................................        743,426,000         720,712,000         -22,714,000 
        Minimum income for widows...................          2,812,000           5,668,000          +2,856,000 
    Vocational training.............................            234,000                   0            -234,000 
    Payment to GOE (Public Laws 101-508, 102-568,                                                               
     and 103-446)...................................          9,824,000           9,905,000             +81,000 
    Payment to medical care (Public Laws 101-508 and                                                            
     102-568).......................................         15,088,000          13,157,000          -1,931,000 
    Payment to medical facilities...................                  0                   0                   0 
    Burial benefits.................................        131,310,000         121,045,000         -10,265,000 
    Other assistance................................          1,994,000           2,000,000              +6,000 
    Unobligated balance and transfers...............       -149,257,000          -5,668,000        +143,589,000 
                                                     -----------------------------------------------------------
      Total appropriation...........................     20,482,997,000      21,857,058,000      +1,374,061,000 
----------------------------------------------------------------------------------------------------------------

    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 1999.
    For fiscal year 1999, the Committee is recommending the 
budget estimate of $21,857,058,000 for compensation and 
pensions. The bill also includes requested language reimbursing 
$24,534,000 to the general operating expenses account 
($11,377,000) and the medical care account($13,157,000) 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 to help 
defray the operating expenses of individual medical facilities 
for nursing home care provided to pensioners, should 
authorizing legislation be enacted.
    The Administration has proposed language that would provide 
indefinite 1999 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 1999 recommendation.......................    $1,175,000,000
Fiscal year 1998 appropriation........................     1,366,000,000
Fiscal year 1999 budget request.......................     1,175,000,000
Comparison with fiscal year 1998 appropriation........      -191,000,000
Comparison with fiscal year 1999 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 
$1,175,000,000 for readjustment benefits in fiscal year 1999. 
The estimated number of trainees and costs by program for 1998 
and 1999 are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                     1998             1999          Difference  
----------------------------------------------------------------------------------------------------------------
Number of trainees:                                                                                             
    Education and training: dependents.......................           42,253           43,043             +790
    All-Volunteer Force educational assistance:                                                                 
        Veterans and servicepersons..........................          308,000          309,900           +1,900
        Reservists...........................................           76,800           76,400             -400
    Vocational rehabilitation................................           53,269           52,190           -1,079
                                                              --------------------------------------------------
      Total..................................................          480,322          481,533           -1,211
                                                              ==================================================
Funds:                                                                                                          
    Education and training: dependents.......................     $106,617,000     $108,530,000      +$1,913,000
    All-Volunteer Force educational assistance:                                                                 
        Veterans and servicepersons..........................      807,533,000      816,798,000       +9,265,000
        Reservists...........................................       91,226,000      100,737,000       +9,511,000
    Vocational rehabilitation................................      402,767,000      402,907,000         +140,000
    Housing grants...........................................       14,723,000       14,723,000                0
    Automobiles and other conveyances........................        4,660,000        4,660,000                0
    Adaptive equipment.......................................       22,100,000       21,500,000         -600,000
    Work-study...............................................       31,974,000       31,078,000         -896,000
    Payment to States........................................       13,000,000       13,000,000                0
    Unobligated balance and other adjustments................     -128,600,000     -338,933,000     -210,333,000
                                                              --------------------------------------------------
      Total appropriation....................................    1,366,000,000    1,175,000,000     -191,000,000
----------------------------------------------------------------------------------------------------------------

                   VETERANS INSURANCE AND INDEMNITIES

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $46,450,000
Fiscal year 1998 appropriation........................        51,360,000
Fiscal year 1999 budget request.......................        46,450,000
Comparison with fiscal year 1998 appropriation........        -4,910,000
Comparison with fiscal year 1999 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 the veterans mortgage life insurance, 
applicable to individuals who have received a grant for 
specially adapted housing.
    The budget estimate of $46,450,000 for veterans insurance 
and indemnities in fiscal year 1999 is included in the bill. 
The amount provided will enable VA to transfer more than 
$37,600,000 to the service-disabled veterans insurance fund, 
transfer $8,560,000 in payments for the 3,468 policies under 
the veterans mortgage life insurance program, as well as 
provide payments for the 1,098 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 1999 recommendation..............................     $263,587,000         $300,000     $159,121,000
Fiscal year 1998 appropriation...............................      166,370,000          300,000      160,437,000
Fiscal year 1999 budget request..............................      263,587,000          300,000      159,121,000
Comparison with fiscal year 1998 appropriation...............      +97,217,000                0       -1,316,000
Comparison with fiscal year 1999 budget request..............                0                0                0
----------------------------------------------------------------------------------------------------------------

    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 loans programs. This account is a new fund 
established last 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. 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 $263,587,000) for funding 
subsidy payments, $300,000 for the limitation on direct loans, 
and $159,121,000 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)

----------------------------------------------------------------------------------------------------------------
                                                                                 Limitation on    Administrative
                                                               Program account    direct loans       expenses   
----------------------------------------------------------------------------------------------------------------
Fiscal year 1999 recommendation..............................           $1,000           $3,000         $206,000
Fiscal year 1998 appropriation...............................            1,000            3,000          200,000
Fiscal year 1999 budget request..............................            1,000            3,000          206,000
Comparison with fiscal year 1998 appropriation...............                0                0           +6,000
Comparison with fiscal year 1999 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 $206,000 
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)

----------------------------------------------------------------------------------------------------------------
                                                                                 Limitation on    Administrative
                                                               Program account    direct loans       expenses   
----------------------------------------------------------------------------------------------------------------
Fiscal year 1999 recommendation..............................          $55,000       $2,401,000         $400,000
Fiscal year 1998 appropriation...............................           44,000        2,278,000          388,000
Fiscal year 1999 budget request..............................           55,000        2,401,000          400,000
Comparison with fiscal year 1998 appropriation...............          +11,000         +123,000          +12,000
Comparison with fiscal year 1999 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 $831 (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 $55,000 for 
program costs and $400,000 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 
$2,401,000. It is estimated that VA will make 4,900 loans in 
fiscal year 1999, with an average amount of $490.

          native american veteran housing loan program account

                     (including transfer of funds)

                                                                        
                                                                        
                                                                        
Administrative expenses:                                                
    Fiscal year 1999 recommendation...................          $515,000
    Fiscal year 1998 appropriation....................           515,000
    Fiscal year 1999 budget request...................           515,000
    Comparison with fiscal year 1998 appropriation....                 0
    Comparison with fiscal year 1999 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 is a pilot program which began in 1993 
and expires on December 31, 2001. 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)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................   $17,057,396,000
Fiscal year 1998 appropriation........................    17,057,396,000
Fiscal year 1999 budget request.......................    17,027,975,000
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 budget request.......       +29,421,000
                                                                        

    The Department of Veterans Affairs operates the largest 
Federal medical care delivery system in the country, with 172 
hospitals, 40 domiciliaries, 134 nursing homes, and 673 
outpatient clinics which includes independent, satellite, 
community-based, and rural outreach clinics.
    This appropriation provides for medical care and treatment 
of eligible beneficiaries in VA hospitals, nursing homes, 
domiciliaries and outpatient 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 $17,027,975,000 
for medical care in fiscal year 1999, a decrease of $29,421,000 
below the enacted level. In addition, the Administration's 
budget assumes $667,000,000 will be available from the Medical 
Care Collections Fund (MCCF). The Committee notes that the 
Congressional Budget Office estimates $558,000,000 from the 
MCCF in fiscal year 1999. The VA believes that increased 
collections will occur in fiscal year 1999 through efforts such 
as implementing billing rates based on reasonable charges and 
the incentative of allowing medical centers to retain the funds 
collected. The Committee expects the VA to take all actions 
possible to increase the amount of funds collected and thus 
available for the medical treatment of veterans. The VA should 
reduce the amount of funds necessary for the administrative 
costs of collecting these funds, which in 1997 consumed 
approximately 20 percent of the total collected.
    The bill includes $17,057,396,000 for medical care in 
fiscal year 1999. This amount is an increase of $29,421,000 
above the budget request and maintains the fiscal year 1998 
appropriation level.
    The bill includes language delaying the availability of 
$846,000,000 of funds requested for the equipment and land and 
structures object classifications until August 1, 1999. The 
budget requested the delayed availability of $635,000,000 of 
such funds. The bill also includes requested language in the 
compensation and pensions appropriation transferring 
$13,157,000 to the medical care 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.
    The Committee has long supported the highest level of 
funding possible for medical research. In addition to the 
$310,000,000 recommended in the bill in the medical and 
prosthetic research appropriation, the VA estimates that 
$366,180,000 of the 1999 medical care request will be used to 
support medical research.
    The Committee supports the development of advanced 
technology to address medical problems experienced by veterans. 
In this regard, $6,000,000 of the increase recommended for 
medical care is earmarked for the Musculoskeletal Disease 
Center at the Jerry L. Pettis Memorial VA Medical Center.
    The budget proposes bill language permitting two-year 
spending availability for up to 8.3 percent of the medical care 
appropriation. The bill does not include the requested 
language. The Committee expects medical care funding to be 
obligated in the year for which it is appropriated, and not to 
be used to set up reserves. The Committee notes that more 
limited flexibility is provided with the extended availability 
of equipment and land and structures funds, and that medical 
care collection funds are available until expended.
    The bill includes language transferring $22,633,000 to the 
general operating expenses appropriation for the Office of 
Resolution Management ($21,083,000) and the Office of 
Employment Discrimination Compliant Adjudication ($1,550,000). 
Additional information on the transfer is included under the 
VA's administrative provisions section of this report.
    The Committee is concerned that all of the Veterans Health 
Administration's information technology and related systems are 
not currently Year 2000 (Y2K) compliant. The VA indicates that 
it plans to spend approximately $85,000,000 of fiscal year 1999 
medical care funds to address Y2K problems. The Committee 
expects that the VA will utilize whatever funds are necessary 
to assure that the delivery of health care to veterans will in 
no way be adversely impacted by this problem.
    A General Accounting Office study revealed that the Network 
3 Director returned $20,000,000 of the fiscal year 1997 budget 
to Washington, at the same time the VA's Office of the Medical 
Inspector found more than 156 separate health and safety 
violations. Further, none of the $20,000,000 was credited 
toward the Network's total funding reduction required by the 
Veterans Equitable Resource Allocation system. The Committee is 
greatly concerned that funds were transferred from Network 3, 
especially when so many health and safety violations were 
noted. The Committee notes that Network 3 was the only Network 
in the nation to return funds to Washington. Therefore, the 
Committee urges the Secretary to provide Network 3 with a one-
time credit of $20,000,000 toward funding reductions required 
by VERA.
    Recent reports have raised questions about the VA's efforts 
regarding a national quality assurance program. The Committee 
understands that some improvements have been made, and 
encourages additional efforts in this area. Quality of care and 
improving effectiveness in delivering services for veterans is 
the highest priority. It is important that VA have a rigorous 
and thorough national quality assurance program that will 
continuously gather, process and disclose information on the 
effectiveness of service delivery to veterans. Such a system 
should not be subject to changes which would generate different 
data, and, therefore, make such data difficult or impossible to 
analyze and compare.
    The Committee notes that the General Accounting Office 
study and report on the effects of Veterans Integrated Service 
Networks and Veterans Equitable Resource Allocation processes 
and their implementation requested in the conference agreement 
on the 1998 Appropriations Act will not be ready until 
September 1, 1998. However, this report should be in time to be 
considered in conference on this bill.
    The 1998 Appropriations Act provided that not to exceed 
$5,000,000 of medical care funding was for a demonstration 
program to study the cost-effectiveness of contracting with 
local hospitals to meet the inpatient health care needs of 
veterans in East Central Florida. Since that demonstration 
program did not begin until June 1, 1998, the Committee expects 
that $5,000,000 from within Florida's allocation of funds will 
be used to continue this demonstration in fiscal year 1999.
    Serious questions have been raised about the impact of the 
VA's new National Formulary. The Committee has learned that the 
formulary prevents physicians from meeting the unique health 
care needs of individual veterans and is overly restrictive. To 
address these concerns, the Committee directs the VA to 
contract with the Institute of Medicine to conduct an 
independent analysis of the effects of the National Formulary 
on the quality of care.
    Specifically, the study should be completed within six 
months and should provide the Committee with an estimate of 
potential costs to VA health care associated with the National 
Formulary for drugs, biologic products, devices, prosthetics 
and pharmaceutical treatment guidelines. The study should also 
include a comparison of the new VA National Formulary to 
private insurance formularies for drugs and devices and other 
government formularies, such as Medicaid.
    The Committee has been informed by the VA that each 
Veterans Integrated Service Network (VISN) will create and 
operate its own waiver program. The Committee directs the 
Secretary to report back to the Committee the number of VISNs 
that are currently operating a waiver procedure, the ease in 
which physicians can use those procedures, the number of 
instances in which waivers have been used to prescribe non-
formulary drugs and devices to veterans, and the average time 
frame in which waivers are granted.
    The Committee understands that efforts are being taken at 
the Jerry L. Pettis Memorial VA Medical Center to convert to 
electronic medical records. It is further understood that it 
will take one year to effect this conversion. The Committee 
supports this VA initiative, and looks forward to the time when 
no veteran will have to carry his or her medical records from 
one place to another in the hospital.
    Legislation to establish a pilot program permitting 
Medicare reimbursements to VA hospitals for care provided to 
certain Medicare-eligible veterans over the age of 65 is under 
consideration. This concept, often referred to as Medicare 
subvention, would increase alternative revenue sources. The VA 
has underutilized capacity that will allow the treatment of 
additional veterans who are Medicare-eligible at marginal cost. 
The Committee urges the committees of jurisdiction to act 
expeditiously to provide this authority.
    The budget estimates that 3,413,394 unique patients will 
receive health care treatment in 1999, an increase of 271,329 
above the number treated in 1997 and 134,448 above the number 
estimated for 1998. However, employment is estimated to 
decrease by 3,135 in 1998 and 2,589 in 1999 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 with the goals 
of a 30 percent reduction in costs 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.
    Community based outpatient clinics have been established 
across the country. These clinics bring primary and mental 
health care providers closer to where veterans live. The 
Committee encourages the VA to provide the networks with the 
necessary support to further expand the number of community 
based outpatient clinics.
    The Committee understands that the VA is currently 
considering establishing a community based outpatient clinic in 
Morristown, New Jersey. The Committee urges the VA to finalize 
plans for a community based outpatient clinic in Morristown. 
The Committee also urges the VA to establish a community based 
outpatient clinic in Enid, Oklahoma.
    The VA has done an admirable job under the Health Care for 
Homeless Veterans program, especially in the provision of 
psychiatric services. The Committee encourages the VA to 
continue this program and to strive to serve even more veterans 
in need of these services.
    The Committee is encouraged by the Department's efforts to 
expand access to health care for veterans unable to visit VA 
facilities by establishing telemedicine centers. In rural 
areas, such as Montana, veterans have severe difficulty 
accessing VA care, and these areas are particularly well-suited 
for telemedicine technology.
    The lack of an adequate number of safe, clean transitional 
housing units that have a supportive atmosphere that is devoid 
of drugs and alcohol is a problem for homeless veterans 
receiving care from the VA on an outpatient or partial 
hospitalization basis. The Committee urges the VA to increase 
its efforts for homeless veterans in the grant and per diem 
program.
    The Committee notes the growing problem of hepatitis C and 
related liver diseases among veterans, and the importance of 
screening in order to detect and treat such diseases early 
enough to prevent serious and costly illness. The VA is urged 
to adopt the appropriate hepatitis C testing protocol, 
including a hepatitis C antibody test, for any patient having 
blood drawn who has no history of a hepatitis C antibody or 
antigen test in his or her medical report.
    New regulations require reducing toxic emissions from 
medical waste incinerators. The VA expects that many of its 
hospitals will opt to replace existing incinerators with 
alternative technologies. The Committee supports the use of 
alternative technologies and/or contracting with qualified 
contractors when they are environmentally sound and are cost-
effective as a means of meeting these stringent new 
requirements. The Committee expects to be kept informed of the 
VA's plans on a regular basis.
    The Committee is encouraged that the VA fully recognizes 
the important role of preventive medicine residents in 
developing prevention strategies of priority to the VA, such as 
smoking cessation, alcohol reduction, and cancer screening. The 
VA is urged to continue its commitment to increase preventive 
medicine residencies as a part of its realignment of medical 
resident positions. The VA is to prepare a report for the 
Committees on Appropriations by March 31, 1999, on its plans 
for continued growth in preventive medicine residencies in the 
second and third year of the residency realignment process.
    The quality of medical care delivered to veterans is 
directly affected by the quality of the management of the 
facilities, systems and networks of the Veterans Health 
Administration. The Committee believes that the VHA should take 
every possible opportunity to improve the effectiveness and 
efficiency of its operations. For this reason, the Committee 
urges VHA to continue to work closely with a nonprofit 
association representing university-based health management 
educators in a system-wide program to bring together leading 
faculty from academic centers and outstanding private sector 
executives to assist in improving the management of VA 
facilities, systems and networks. Such training should take 
advantage of advances in web-based learning techniques.

                    medical and prosthetic research

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $310,000,000
Fiscal year 1998 appropriation........................       272,000,000
Fiscal year 1999 budget request.......................       300,000,000
Comparison with fiscal year 1998 appropriation........       +38,000,000
Comparison with fiscal year 1999 budget request.......       +10,000,000
                                                                        

    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 $310,000,000 for medical and 
prosthetic research in fiscal year 1999, an increase of 
$10,000,000 above the budget request. An additional 
appropriation of $10,000,000 for medical and prosthetic 
research is included in Title IV--General Provisions of this 
bill. These amounts, together with an estimated $802,943,000 
from other sources will provide for a total research program of 
$1,122,943,000.
    The Committee recommends $310,000,000 for medical and 
prosthetic research in fiscal year 1999. This is an increase of 
$38,000,000 above the current level and $10,000,000 above the 
budget request. This amount, together with an estimated 
$802,943,000 from other sources will provide for a total 
research program of $1,112,943,000.
    Previous Committee reports have strongly suggested that 
funding for research into Parkinson's Disease be increased. 
Last year's conference agreement included $10,000,000 for such 
research. The VA is directed to utilize the recommended 
increase of $10,000,000 to continue and expand research into 
Parkinson's Disease above the level provided for this activity 
in the 1998 conference agreement.
    Prostate cancer is one of the leading causes of death among 
veterans. The Committee notes the President's recent commitment 
to direct as much funding as possible to stop this disease. The 
Department is again urged to increase research funding in 
fiscal year 1999 on this major health problem for aging males, 
with emphasis on clinical trials within the VA.
    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.
    The Committee urges the Department of Veterans Affairs to 
work with the Department of Defense on a new broad cooperative 
research program on alcoholism. The VA is also urged to develop 
its nascent collaboration with the National Institute on 
Alcohol Abuse and Alcoholism and establish joint research 
programs on the epidemiology, causes, prevention, and treatment 
of alcoholism. This recommendation balances the increased 
morbidity, mortality, lost productivity, accidents, and 
violence caused by the high rate of alcoholism in the veterans 
population with the abundance of research opportunities which 
will prevent and abet these consequences of alcoholism.
    The Committee supports the recommendation of the VA's 
Research and Realignment Advisory Committee that the VA should 
invest in technology transfer to receive its fair share of 
royalties from patents and joint ventures with non-governmental 
agencies and private companies. The Committee urges the 
Department to make funds available to the NASA Midwest Regional 
Technology Transfer Center to support transferring VA research 
results and capabilities to small and minority companies in the 
Great Lakes region. This action will also address another of 
the Advisory Committee's recommendations that active efforts 
need to be taken to create a better understanding by the 
general public of the contributions of VA research.
    Concern has been expressed that the crew of the U.S.S. 
Brush were exposed to atomic debris in 1947 when it refueled in 
Kwajalein Lagoon in the Marshall Islands. The VA, in 
cooperation with the Department of Defense, should further 
study the possibility that these crew members may have been 
exposed to hazardous materials.

      medical administration and miscellaneous operating expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $60,000,000
Fiscal year 1998 appropriation........................        59,860,000
Fiscal year 1999 budget request.......................        60,000,000
Comparison with fiscal year 1998 appropriation........          +140,000
Comparison with fiscal year 1999 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 $60,000,000 
for medical administration and miscellaneous operating expenses 
in fiscal year 1999.

                   General post fund, national homes

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                                                 Limitation on    Administrative
                                                               Program account    direct loans       expenses   
----------------------------------------------------------------------------------------------------------------
Fiscal year 1999 recommendation..............................           $7,000          $70,000          $54,000
Fiscal year 1998 appropriation...............................            7,000           70,000           54,000
Fiscal year 1999 budget request..............................            7,000           70,000           54,000
Comparison with fiscal year 1998 appropriation...............                0                0                0
Comparison with fiscal year 1999 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 1999 recommendation.......................      $855,661,000
Fiscal year 1998 appropriation........................       786,135,000
Fiscal year 1999 budget request.......................       849,661,000
Comparison with fiscal year 1998 appropriation........       +69,526,000
Comparison with fiscal year 1999 budget request.......        +6,000,000
                                                                        

    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 
the budget requests totalling $160,242,000 in other accounts 
for these credit programs. In addition, $11,377,000 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 $38,960,000 will 
be utilized for such purposes in fiscal year 1999. Prior to 
fiscal year 1996, such costs were included in the general 
operating expenses appropriation. Thus, in total, 
$1,060,240,000 is requested in fiscal year 1999 for 
administrative costs of non-medical benefits.
    The Committee recommends $855,661,000 for general operating 
expenses in fiscal year 1999. This amount represents an 
increase of $69,526,000 above the current level and $6,000,000 
above the budget request. The increase is for restructuring 
activities of the Veterans Benefits Administration, subject to 
submission of a detailed operating plan.
    The Committee is concerned that all of the Veterans 
Benefits Administration's information technology systems are 
not presently Year 2000 (Y2K) compliant. The VA indicates that 
it plans to spend approximately $10,000,000 of fiscal year 1999 
general operating expenses funds to address Y2K problems. The 
Committee expects that the VA will utilize whatever funds are 
necessary to ensure that veterans benefits checks continue to 
be delivered after December 31, 1999.
    In the fiscal year 1999 budget presentation, the Veterans 
Benefits Administration reflected all funding for new 
initiatives under contract funds. Many initiatives have travel 
requirements associated with development oversight as well as 
the need for orientation and training for new VBA employees. 
Therefore, VBA's travel limitation associated with appropriated 
funds for 1999 should be $8,560,000 rather than the $5,544,000 
reflected in the budget documents. This increase in the travel 
limitation has no net effect on total funding availability.
    The Committee understands that the Department is preparing 
for a demonstration of advanced technology to assist 
adjudicators in determining disability ratings. The Committee 
considers this technology an important advancement towards the 
goals of accurate and timely adjudication of claims and urges 
the Veterans Benefits Administration to pursue this technology.
    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.

                        national cemetery system

                     (including transfer of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $92,006,000
Fiscal year 1998 appropriation........................        84,183,000
Fiscal year 1999 budget request.......................        92,006,000
Comparison with fiscal year 1998 appropriation........        +7,823,000
Comparison with fiscal year 1999 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 149 cemeterial installations 
in 39 States, the District of Columbia, and Puerto Rico.
    The fiscal year 1998 appropriation increased 9.5 percent 
above the fiscal year 1997 amount. The fiscal year 1999 request 
is 9.3 percent higher than fiscal year 1998 appropriation. 
These relatively large increases are necessary to provide for 
the operations of new cemeteries, and to cover increased 
workloads at existing cemeteries.
    The Committee recommends the budget request of $92,006,000 
for the national cemetery system in fiscal year 1999. To ensure 
that the maximum amount of funds are available to operate the 
cemeteries, the VA is to limit the amount of funds for central 
office activities to the budget request of $8,684,000.
    The bill includes language transferring up to $86,000 to 
the general operating expenses appropriation for the Office of 
Resolution Management ($80,000) and the Office of Employment 
Discrimination Compliant Adjudication ($6,000). Additional 
information on the transfer is included under the VA's 
administrative provisions section of this report.
    The VA currently contracts for the maintenance of veterans 
graves at the historic Congressional Cemetery in Washington, 
D.C. The 1999 Legislative Branch Appropriations Bill includes a 
provision that authorizes the Architect of the Capitol to make 
a grant to the National Trust for Historic Preservation for the 
care and maintenance of Congressional Cemetery. The Committee 
expects the VA to continue to provide the existing level of 
maintenance effort at Congressional Cemetery.

                      office of inspector general

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $32,702,000
Fiscal year 1998 appropriation........................        31,013,000
Fiscal year 1999 budget request.......................        32,702,000
Comparison with fiscal year 1998 appropriation........        +1,689,000
Comparison with fiscal year 1999 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 provided the budget request of 
$32,702,000 for the Office of Inspector General in fiscal year 
1999. This amount is an increase of $1,689,000 or 5.4 percent 
above the current year appropriation.

                      construction, major projects

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $143,000,000
Fiscal year 1998 appropriation........................       177,900,000
Fiscal year 1999 budget request.......................        97,000,000
Comparison with fiscal year 1998 appropriation........       -34,900,000
Comparison with fiscal year 1999 budget request.......       +46,000,000
                                                                        

    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 program of $97,000,000 is requested for construction, 
major projects, in fiscal year 1999. The bill includes 
$143,000,000 for the construction of major projects, an 
increase of $46,000,000 above the budget request.
    The increases to the budget request are as follows:
    +$20,800,000 for ambulatory care improvements at the 
Cleveland (Wade Park) VA Medical Center.
    +$25,200,000 for construction of an ambulatory care 
addition at the Tucson VA Medical Center.
    The specific amounts recommended by the Committee are as 
follows:

                                            DETAIL OF BUDGET REQUEST                                            
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                     Available                         House    
                    Location and description                       through 1998    1999 request   recommendation
----------------------------------------------------------------------------------------------------------------
Medical Programs:                                                                                               
    Seismic:                                                                                                    
        Long Beach, CA, clinical consolidations/seismic.........               0         $23,200         $23,200
        San Juan, PR, seismic corrections.......................               0          50,000          50,000
                                                                 -----------------------------------------------
          Subtotal, seismic.....................................               0          73,200          73,200
                                                                 ===============================================
    Outpatient improvements:                                                                                    
        Cleveland, OH, ambulatory care improvements.............           7,500               0          20,800
        Tucson, AZ, ambulatory care addition....................               0               0          25,200
                                                                 -----------------------------------------------
          Subtotal, outpatient improvements.....................           7,500               0          46,000
                                                                 ===============================================
    Advance planning fund: Various stations.....................               0           6,600           6,600
    Asbestos abatement: Various stations........................               0           5,460           5,460
    Less: Design fund...........................................               0          -1,160          -1,160
                                                                 -----------------------------------------------
      Subtotal, medical programs................................           7,500          84,100         130,100
                                                                 ===============================================
    National Cemetery System:                                                                                   
        Florida National Cemetery columbarium development.......               0           6,000           6,000
        Ft. Rosecrans National Cemetery columbarium development.               0           6,000           6,000
        Advance planning fund: Various stations.................               0           1,000           1,000
        Less: Design fund.......................................               0            -600            -600
                                                                 -----------------------------------------------
          Subtotal, NCS.........................................               0          12,400          12,400
                                                                 ===============================================
    Claims Analyses: Various stations...........................               0             500             500
                                                                 ===============================================
          Total construction, major projects....................           7,500          97,000         143,000
----------------------------------------------------------------------------------------------------------------

    Concern has been expressed about the lack of adequate 
burial facilities for veterans residing in the eastern 
mountains of Kentucky. The Committee urges the Secretary to 
establish a new national cemetery in Eastern Kentucky. The VA 
is to utilize such sums as may be necessary to initiate the 
planning phase. Planning should include site selection, 
acquisition, and design. A report on the progress of the 
initial phase of this project should be submitted to the 
Committees on Appropriations by March 31, 1999.

                      CONSTRUCTION, MINOR PROJECTS

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $175,000,000
Fiscal year 1998 appropriation........................       175,000,000
Fiscal year 1999 budget request.......................       141,000,000
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 budget request.......       +34,000,000
                                                                        

    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. Program focus is placed on outpatient care 
projects.
    The Committee recommends $175,000,000 for the construction, 
minor projects appropriation in fiscal year 1999. The amount 
recommended is $34,000,000 above the budget request. The 
increase is for converting inpatient space to outpatient 
activity use.
    The Fort Harrison VA Medical Center currently uses an 
antiquated lagoon sewage treatment system which will soon 
exceed peak capacity. The Committee notes the need for 
connecting the medical center to the Helena public sewer 
system, and expects the VA to work closely with the Department 
of Defense, the Montana Army National Guard, the State of 
Montana, and the city of Helena to resolve the matter 
expeditiously and in a mutually acceptable manner.
    The new irrigation well at the Fort Bliss National Cemetery 
is now unusable. The Committee urges the VA to expeditiously 
resolve this problem. In the interim, the VA should purchase an 
adequate amount of water from the Army to maintain the 
appearance of the cemetery in a satisfactory condition.

                         PARKING REVOLVING FUND

    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 1999. 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. 
The Committee has no objection to the proposal to utilize 
$11,900,000 from unobligated balances and parking receipts in 
the parking revolving fund for construction of the parking 
structure at the Denver VA Medical Center. This amount, 
together with $1,100,000 for technical services to be funded 
from the design fund in the construction, major projects 
appropriation will provide a total of $13,000,000 for this 
project.

       GRANTS FOR CONSTRUCTION OF STATE EXTENDED CARE FACILITIES

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $80,000,000
Fiscal year 1998 appropriation........................        80,000,000
Fiscal year 1999 budget request.......................        37,000,000
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 budget request.......       +43,000,000
                                                                        

    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 $80,000,000 for grants for 
construction of State extended care facilities in fiscal year 
1999. This amount represents an increase of $43,000,000 above 
the budget request and is provided to address the high demand 
from States for this important program.
    The proposed site for the skilled nursing facility in Clark 
County, Nevada may not be geologically sound. The Committee 
urges VA to work with the State of Nevada while an alternative 
site is found to ensure that funds appropriated in fiscal year 
1998 will be available for the skilled nursing facility when a 
new site is identified.
    Concern has been expressed that the methodology for 
awarding State home construction grant funds is outdated. The 
Committee urges the VA, after consultation with the States and 
interested organizations, to modify the existing methodology 
for awarding funds.

        GRANTS FOR THE CONSTRUCTION OF STATE VETERANS CEMETERIES

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $10,000,000
Fiscal year 1998 appropriation........................        10,000,000
Fiscal year 1999 budget request.......................        10,000,000
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 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 again 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 
be enacted 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 1999.

                       Administrative Provisions

                     (INCLUDING TRANSFER OF FUNDS)

    The bill continues the current eight administrative 
provisions as proposed in the budget. The budget proposes bill 
language to fund the new Office of Resolution Management (ORM) 
and Office of Employment Discrimination Compliant Adjudication 
(OEDCA) on a reimbursable basis from other VA appropriations in 
fiscal year 1999. The Committee agrees with need for these 
offices, but does not agree with this method of financing as it 
permits unlimited funding of these administrative functions. To 
provide definite levels of funding for these offices, as is the 
case with other administrative functions, language transferring 
the amounts assumed in the medical care ($22,633,000--
$21,083,000 for ORM and $1,550,000 for OEDCA) and national 
cemetery system ($86,000--$80,000 for ORM and $6,000 for OEDCA) 
accounts for these activities to the general operating expenses 
account has been included in the bill. In addition, $387,000 
($360,000 for ORM and $27,000 for OEDCA) is assumed in the 
general operating expenses account for these activities. All 
funds for these two offices should be requested in the general 
operating expenses appropriation in fiscal year 2000. The bill 
also includes a new section renaming the ``Salisbury Department 
of Veterans Affairs Medical Center'' in Salisbury, North 
Caolina, as the ``W.G. (Bill) Hefner Salisbury Department of 
Veterans Affairs Medical Center''.

                                TITLE II

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................   $26,553,178,030
Fiscal year 1998 appropriation........................    21,444,565,000
Fiscal year 1999 budget request.......................    24,815,263,705
Comparison with fiscal year 1998 appropriation........    +5,108,613,030
Comparison with fiscal year 1999 budget request.......    +1,737,914,325
                                                                        

    The Department of Housing and Urban Development (HUD) was 
established by the Department of Housing and Urban Development 
Act of 1965 (Public Law 89-174). HUD is the principal Federal 
agency responsible for administering and regulating programs 
and industries concerned with the Nation's housing needs, 
economic and community development, and fair housing 
opportunities.
    In carrying out the mission of serving the needs and 
interests of the Nation's communities and of the people who 
live and work in them, HUD administers mortgage and loan 
insurance programs, rental and homeownership subsidy programs 
for low-income families, neighborhood rehabilitation programs 
and community development programs.
    The Committee recommends an appropriation of 
$26,553,178,030 for the Department of Housing and Urban 
Development, an increase of $1,737,914,325 above the request 
and an increase of $5,108,613,030 above the fiscal year 1998 
appropriation. The request, however, was offset by 
$3,700,000,000 in recaptured section 8 funds, $2,347,190,000 of 
which was used to offset the fiscal year 1998 emergency 
supplemental appropriation. Therefore, the fiscal year 1999 
appropriation is a decrease of $607,275,675 below the requested 
level.

                           HUD Reorganization

    HUD is undergoing a major reorganization. As part of this 
reorganization, called ``HUD 2020,'' HUD plans to consolidate 
major functions of the Department, including its enforcement 
activities, financial management and assessment functions. 
Operations are being streamlined, programs are being 
reevaluated and computer systems are being integrated 
throughout the department.
    In addition to major operational changes, HUD expects to 
reduce staff levels to approximately 7,500 employees. Already, 
HUD has conducted a buyout that decreased staff from 10,300 
employees to 9,200 employees. Further reductions are expected.
    During this period of transition, HUD has the opportunity 
to become a stronger, more effective advocate for its mission 
to serve the nation's housing and community needs. For example, 
HUD should pay greater attention to the establishment of 
results-oriented performance measurements rather than 
maintaining process-oriented performance measurements. Several 
programs at HUD are moving in this direction, others need to be 
more aggressive.
    In various accounts, the Committee is recommending an 
increase in funds that can show quantifiable results and that 
institute systems that will enable them to measure performance. 
For other programs, the Committee has provided performance 
measures for HUD to consider and to implement.
    An area of concern to this Committee is the section 8 
accounting system. The issue of how to deal with and account 
for long-term amendment needs must be more comprehensively 
addressed by both HUD and the Congress.
    Another area of concern is the level of unexpended balances 
in many HUD programs. To better measure the performance of all 
HUD programs and to enable policy-making committees to create 
more effective programs, HUD is directed to undertake a 
comprehensive review of all unexpended balances. The findings 
from this report should be provided to the House and Senate 
Committees on Appropriations by January 15, 1999.

                       Public and Indian Housing

                        Housing Certificate Fund

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................   $10,240,542,030
Fiscal year 1998 appropriation........................     9,373,000,000
Fiscal year 1999 budget request.......................     8,981,187,705
Comparison with fiscal year 1998 appropriation........      +867,542,030
Comparison with fiscal year 1999 budget request.......    +1,259,354,325
                                                                        

    The Housing Certificate Fund consolidates the existing 
section 8 voucher and certificate rental assistance programs. 
In addition, it provides funding to prevent resident 
displacement, including renewal of expiring section 8 
contracts, section 8 amendments, the witness relocation 
program, displaced family relocation in both Housing and Public 
Housing programs, conversion of section 23 projects to section 
8 projects and the family unification program.
    The Committee recommends $10,240,542,030 for the Housing 
Certificate Fund, an increase of $1,259,354,325 above the 
request and an increase of $867,542,030 above the fiscal year 
1998 appropriation. Of the amount provided, $9,600,000,000 is 
for section 8 contract renewals, $97,000,000 is for section 8 
contract amendments, $433,542,030 is for section 8 relocation 
assistance and $10,000,000 is for regional opportunity 
counseling. The funding level for renewals is sufficient to 
extend for one year all contract expirations. Section 8 
relocation assistance is expanded to include families that must 
be relocated due to a HOPE VI revitalization project.
    The Committee recommends a set-aside of $40,000,000 to fund 
section 8 tenant-based rental assistance for people with 
disabilities displaced when a public housing complex is 
designated for elderly-only residents. The Committee notes that 
HUD has been slow in releasing these funds in the past and 
urges the Department to expedite the Notice of Funding 
Availability (NOFA).
    Finally, the Committee recommends providing $100,000,000 
for incremental vouchers and certificates targeted to families 
making the transition from welfare to work. In addition to 
HUD's proposed requirements, the Committee encourages HUD to 
revise its Performance Plan to incorporate performance measures 
designed to gauge whether, and to what extent, the housing 
vouchers funded under this section further the objectives of 
welfare reform. In particular, the Committee urges HUD to 
measure the extent to which these vouchers result in: (a) 
increased earnings; (b) increased employment (e.g. an increase 
in number of weeks employed or number of hours worked per 
week); (c) improved coordination among housing and welfare 
agencies; and (d) improvements in housing quality and 
affordability.
    The Committee encourages HUD to track the different ways 
localities use the vouchers to further the goals of welfare 
reform and the relative success of different approaches in 
achieving the program's objectives. HUD is directed to 
implement an evaluation of these approaches and is authorized 
to use up to one percent of the funds provided under this set-
aside for those purposes.
    To respond to reports that the numbers of affordable homes 
available with section 8 assistance were decreasing, the 
Committee asked HUD to provide information on the number of 
units funded with section 8 funds since fiscal year 1996. 
Contrary to reports, 212,133 units have been added to the 
section 8 portfolio since fiscal year 1996. Furthermore, 
because the section 8 program has been the subject of great 
scrutiny, HUD has implemented better accounting systems that 
enable the Department to make more accurate projections about 
present and future costs.

                      PUBLIC HOUSING CAPITAL FUND

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $3,000,000,000
Fiscal year 1998 appropriation........................     2,500,000,000
Fiscal year 1999 budget request.......................     2,550,000,000
Comparison with fiscal year 1998 appropriation........      +500,000,000
Comparison with fiscal year 1999 budget request.......      +450,000,000
                                                                        

    The Public Housing Capital Fund provides funding for all 
public housing capital programs, such as public housing 
development, modernization and amendments. Capital improvements 
can be various levels of modernization, including 
rehabilitation, building additions, replacement of apartments 
and appliances and non-routine maintenance (that has become 
substantial in scope). The funds enable public housing 
authorities (PHAs) to continue to operate apartment complexes 
as low-income housing for a period of not less than 20 years. 
Examples of capital modernization projects include replacing 
roofs and windows, physical improvements to common spaces, 
improving electrical and plumbing systems, and renovating the 
interior of an apartment.
    The Committee recommends funding this account at 
$3,000,000,000, an increase of $450,000,000 above the budget 
request and $500,000,000 above the fiscal year 1998 
appropriation. Of the amount provided, $100,000,000 is for 
technical assistance, contract expertise, training, 
intervention with respect to troubled authorities, independent 
physical inspections, and management improvements in support of 
Management 2020. Additionally, as requested, $5,000,000 is set 
aside for the Tenant Opportunity Program (TOP); however, the 
Committee recommends funding the TOP in this account rather 
than in the CDBG account.
    Increasing the capital fund is important for several 
reasons. First, HUD estimates that the 3,400 PHAs have backlog 
modernization needs of $20,000,000,000. This backlog exists, by 
and large, because the inventory is very old. Currently, of the 
approximately 1,232,000 apartments operated by PHAs, 792,000 
were constructed more than 30 years ago. Many require major 
renovation work if they are to continue to serve as decent 
homes for the families that depend on them.
    Second, modernization funds can be successfully leveraged 
with other sources of capital, especially in mixed-income 
developments, thereby maximizing the federal investment. Jobs 
are created, neighborhoods are improved and low-income families 
are given the opportunity to live in safe, affordable homes.
    Finally, HUD is developing a reporting system that will 
enable it to prioritize the modernization needs of each PHA. 
During the next year, HUD plans to assess the physical 
condition of hundreds of public housing developments. This 
assessment will enable HUD to better project the level of 
backlogged modernization needs, to make informed judgments 
about costs and to prioritize capital projects strategically.-

                     public housing operating fund

                     (including transfers of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $2,818,000,000
Fiscal year 1998 appropriation........................     2,900,000,000
Fiscal year 1999 budget request.......................     2,818,000,000
Comparison with fiscal year 1998 appropriation........       -82,000,000
Comparison with fiscal year 1999 budget request.......                 0
                                                                        

    Operating subsidies are provided to public housing 
authorities to supplement tenant rental contributions and other 
income used to pay for the ordinary costs of operating a public 
housing authority (PHA). The performance funding system formula 
determines operating subsidy amounts.
    The Committee recommends funding operating subsidies at the 
budget request of $2,818,000,000, a decrease of $82,000,000 
from the level appropriated in fiscal year 1998. An 
administrative provision is included directing HUD to begin 
negotiated rule-making for necessary changes of PFS.

             drug elimination grants for low-income housing

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $290,000,000
Fiscal year 1998 appropriation........................       310,000,000
Fiscal year 1999 budget request.......................       310,000,000
Comparison with fiscal year 1998 appropriation........       -20,000,000
Comparison with fiscal year 1999 budget request.......       -20,000,000
                                                                        

    Drug elimination grant funds are provided to public housing 
agencies and Indian housing authorities to eliminate drug-
related crime in housing developments. Funds may be used to pay 
for law enforcement personnel and investigators, to provide 
physical improvements that enhance security, to support tenant 
patrols and initiatives and to develop drug abuse prevention 
programs.
    The Committee recommends funding this program at 
$290,000,000, a decrease of $20,000,000 below the request and 
below the level appropriated in fiscal year 1998. Of the level 
provided, $10,000,000 is set aside for Operation Safe Home 
administered by the HUD Inspector General, $10,000,000 is for 
the Inspector General for other Operation Safe Home activities 
and $10,000,000 is for technical assistance.
    The Committee is pleased with the Milton S. Eisenhower 
Foundation's Youth Development and Crime Prevention program in 
public housing. This program is based on community equity 
policing, where youth safe havens, police mini-stations, 
civilian and police mentoring of youth, after school tutorial, 
stay-in-school counseling, welfare-to-work job training and 
placement initiatives share the same space in public housing 
facilities. Where its programs are implemented, crime has been 
reduced by 20 to 35% in scientific evaluations of initial 
replications of these concepts. The Committee encourages HUD to 
review this program to see if it can be effectively replicated 
in public housing developments.

    revitalization of severely distressed public housing (hope VII)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $600,000,000
Fiscal year 1998 appropriation........................       550,000,000
Fiscal year 1999 budget request.......................       550,000,000
Comparison with fiscal year 1998 appropriation........       +50,000,000
Comparison with fiscal year 1999 budget request.......       +50,000,000
                                                                        

    The Revitalization of Severely Distressed Public Housing 
program, HOPE VI, awards competitive grants to public housing 
authorities enabling them to revitalize entire neighborhoods 
that are adversely impacted by the presence of badly 
deteriorated public housing projects. In addition to new 
construction and development, PHAs have the authority to 
demolish obsolete projects and to provide replacement 
apartments for families displaced by the demolition.
    The Committee recommends funding HOPE VI at $600,000,000, 
an increase of $50,000,000 above the request and above the 
fiscal year 1998 appropriation. HUD is authorized to provide, 
upon the request of a PHA, for environmental reviews by local 
governments rather than by HUD staff. This authority already is 
available for all other public housing programs and has the 
potential to result in more efficient and expeditious grant 
processing. Additional language is included clarifying that 
HOPE VI funds can be used for appropriate downpayment 
assistance to tenants displaced by demolition.
    For many years, public housing facilities contributed 
substantially to the disintegration of entire neighborhoods. 
That trend is being reversed, in large measure, because of the 
successes of the HOPE VI program. By using HOPE VI funds as 
seed money, PHAs attract private sector capital and publicly-
funded low-income housing tax credits that could result in a 
leverage impact as great as $3 of private funds to $1 of public 
funds. Through partnerships like these, HOPE VI rebuilds not 
only decent and affordable homes but entire neighborhoods.
    Currently, HUD provides section 8 certificates and vouchers 
from this account to families displaced when a HOPE VI project 
is underway. In the past, about $90,000,000 of HOPE VI funds 
were spent on relocation rather than revitalization. The 
Committee directs HUD to provide relocation assistance from 
amounts provided for such assistance in the Housing Certificate 
Fund, which has significant unobligated carryover balances.
    The Committee continues to support 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 expects 
HUD to continue to participate in this activity.

                  native american housing block grants

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $620,000,000
Fiscal year 1998 appropriation........................       600,000,000
Fiscal year 1999 budget request.......................       600,000,000
Comparison with fiscal year 1998 appropriation........       +20,000,000
Comparison with fiscal year 1999 budget request.......       +20,000,000
                                                                        

    The Native American Housing Block Grants program provides 
funds to Indian tribes and their tribally designated housing 
entities to help them address housing needs within their 
communities. The block grant is designed to fund a tribally-
designated housing entity's operating requirements and capital 
needs.
    The Committee recommends funding this program at 
$620,000,000, an increase of $20,000,000 above the request and 
the fiscal year 1998 appropriation. Of the amount provided 
$6,000,000 is set-aside for the section 601 Loan Guarantee 
Program and $6,000,000 is set-aside for inspections, training, 
travel costs and technical assistance.
    As a result of major changes incorporated in the Native 
American Housing Assistance and Self-Determination Act 
(NAHASDA) of 1997, Indian tribes and tribal housing 
organizations have requested additional training and technical 
assistance. Few organizations, however, have both housing 
development expertise and an understanding of the history and 
culture of Native Americans. With the provisions contained in 
NAHASDA, Native American housing providers have a unique 
opportunity to increase their capacity, and that of other 
tribes, to provide training and technical assistance. 
Therefore, to the greatest extent possible, HUD should utilize 
tribally based organizations to provide training and technical 
assistance.
    Title VI of NAHASDA was designed to increase a tribe's 
ability to bring private capital to reservations for economic 
development and housing. The program was modeled after the 
section 108 loan guarantee program. Though almost identical to 
one another, a credit subsidy rate of 11 percent has been 
assigned to the section 601 program which is far higher than 
the 2.3 percent credit subsidy rate assigned to the section 108 
program. Furthermore, only 80 percent of a loan originated 
under section 601 may be guaranteed in contrast to 100 percent 
in the section 108 program. As a result of the assumed subsidy 
cost, fewer tribes are able to take advantage of the section 
601 program. The Committee is interested in the rationale used 
to establish these subsidy rates and directs the Office of 
Management and Budget (OMB) to provide an explanation to the 
House and Senate Subcommittees on VA, HUD and Independent 
agencies by October 30, 1998.

           indian housing loan guarantee fund program account

------------------------------------------------------------------------
                                                          Limitation on 
                                        Program account    direct loans 
------------------------------------------------------------------------
Fiscal year 1999 recommendation.......       $6,000,000      $36,900,000
Fiscal year 1998 appropriation........        5,000,000       36,900,000
Fiscal year 1999 budget request.......        6,000,000       36,900,000
Comparison with fiscal year 1998                                        
 appropriation........................       +1,000,000                0
Comparison with fiscal year 1999                                        
 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 that otherwise cannot 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 Committee recommends funding this program at the 
request of $6,000,000, an increase of $1,000,000 above the 
level appropriated in fiscal year 1998.

                   Community Planning and Development

              Housing Opportunities For Persons With Aids

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $225,000,000
Fiscal year 1998 appropriation........................       204,000,000
Fiscal year 1999 budget request.......................       225,000,000
Comparison with fiscal year 1998 appropriation........       +21,000,000
Comparison with fiscal year 1999 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 program provides 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). Funds are allocated 
among eligible grantees pursuant to section 854(c) of the 
National Affordable Housing Act.
    For fiscal year 1999, the Committee recommends the request 
of $225,000,000, an increase of $21,000,000 over the level 
appropriated in fiscal year 1998.
    Once again, the Committee encourages HUD to review the 
HOPWA formula and to make appropriate recommendations for 
change. Under its current authorization, funds may not be 
distributed equitably to reflect current need. Furthermore, 
problems with the formula frequently result in anomalies that 
require Congressional intervention to correct.

                   COMMUNITY DEVELOPMENT BLOCK GRANTS

                     (including transfer of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $4,725,000,000
Fiscal year 1998 appropriation........................     4,805,000,000
Fiscal year 1999 budget request.......................     4,725,000,000
Comparison with fiscal year 1998 appropriation........       -80,000,000
Comparison with fiscal year 1999 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 the President's request of 
$4,725,000,000 for community development grants in fiscal year 
1999, which is $80,000,000 below the level appropriated in 
fiscal year 1998. Set-asides within the CDBG account include 
$67,000,000 for Native Americans, $50,000,000 for the Economic 
Development and Social Services program, of which at least 
$20,000,000 is for service coordinators and congregate services 
for the elderly and the disabled, $3,000,000 for the Housing 
Assistance Council, $1,800,000 for the National American Indian 
Housing Council, and $35,000,000 for Youthbuild. Further set-
asides include $25,000,000 for the Neighborhood Initiatives 
program, authorized in the fiscal year 1998 VA, HUD and 
Independent Agencies appropriations measure and $50,000,000 for 
section 107 grants. Of the amount provided for section 107 
grants, $3,000,000 is for community development work study, 
$6,500,000 is for historically black colleges and universities, 
$6,500,000 is for Hispanic-serving institutions, $7,500,000 is 
for Community Outreach Partnerships, $7,000,000 is for Insular 
areas, $7,500,000 is for technical assistance and $12,000,000 
is for management information systems. Prior to making the 
Integrated Disbursement and Information System mandatory, HUD 
is directed to work with states to resolve problems surrounding 
the implementation of the system. Additionally, $50,000,000 is 
provided for the Economic Development Initiative, $20,000,000 
for the SHOP program, subject to authorization that eliminates 
specific set-asides and that makes the program competitive, 
$20,000,000 for Brownfields, and $30,000,000 for the National 
Community Development Initiative, to be equally divided by the 
Local Initiatives Support Corporation, the Enterprise 
Foundation, Youthbuild and Habitat for Humanity International.
    Though requested by the President, neither the Regional 
Connections program nor the Homeownership Zone program is 
funded. Both programs require authorizing from the House 
Banking Committee and, without further discussion about the 
proposals, including its mission, goals and other rules for 
governing the programs, this Committee is reluctant to pass 
judgment upon them.
    The Committee is concerned about HUD's application of the 
Community 2020 Geographical Information System (GIS). The 
Committee believes that HUD should not be in the business of 
leveraging software sales for a particular vendor and that HUD 
should develop a product that disseminates HUD data using the 
open development environment as the basis for a HUD GIS 
application. Such a process would allow federal and nonfederal 
agencies to use the HUD data with their current GIS systems or 
other systems they are evaluating through the use of inter-
application communications.
    Finally, as requested, the commitment level of 
$1,261,000,000 for the section 108 Loan Guarantee program is 
authorized, with a credit subsidy of $29,000,000.
    The Committee notes that the 1999 Special Olympics World 
Summer Games, which represents the pinnacle of athletic 
competition for athletes with mental retardation, will be held 
in the Triangle Area of North Carolina. HUD is encouraged to 
help support the 1999 Games to the greatest degree possible.

                  HOME INVESTMENT PARTNERSHIPS PROGRAM

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $1,600,000,000
Fiscal year 1998 appropriation........................     1,500,000,000
Fiscal year 1999 budget request.......................     1,883,000,000
Comparison with fiscal year 1998 appropriation........      +100,000,000
Comparison with fiscal year 1999 budget request.......      -283,000,000
                                                                        

    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 that 
participate in the program are required to develop a 
comprehensive housing affordability strategy.
    The Committee recommends an appropriation of 
$1,600,000,000, a decrease of $283,000,000 below the request 
and $100,000,000 above the fiscal year 1998 appropriation.- The 
Committee, however, recommends against HUD's proposal to 
consolidate the sections 202 and 811 accounts in the HOME 
program and continues to fund them separately. Once amounts for 
these programs are subtracted, the Committee's funding 
recommendation is an increase of $50,000,000 above the request.
    Like last year, the Committee increases funds for the HOME 
program because it can document its results. For example, using 
a combination of public-private partnerships and the non-
profit/for-profit sectors, this program assisted over 91,000 
first time homebuyers and produced over 280,000 new homes. 
Ninety-seven percent of families renting HOME-assisted 
apartments are below 50% of area median income and 69% of the 
families who buy homes are below 50% of area median income. 
Each HOME dollar leverages almost two dollars of public and 
private funds. The average HOME investment per unit is $16,300. 
Most importantly, the program tracks the performance of its 
grantees and measures their performance to determine whether 
the federal investment is worthwhile.
    The Committee recommends against the request of 
$100,000,000 for the HOME Loan Guarantee Program for the 
following reasons. First, the program is unauthorized. Second, 
HUD has not provided evidence that the proposal would 
complement the existing HOME program. As described, this 
program would operate in a fashion similar to CDBG's section 
108 loan guarantee program. The 108 loan program is not highly 
subscribed, however, without other forms of security like the 
economic development initiative (EDI) funds, primarily because 
communities are reluctant to borrow money against future CDBG 
allocations. There is no indication that a HOME loan guarantee 
program would not suffer a similar experience and require 
additional appropriations.
    Finally, the Committee recommends $10,000,000 for Housing 
Counseling, which is $5,000,000 below the 1998 fiscal year 
appropriation and $15,000,000 below the President's request. 
Unfortunately, this program is not producing measurable results 
that warrant an increase in funding.
    Despite the decrease, the Committee recognizes the 
importance of providing information and counseling to 
prospective homebuyers, especially low- and moderate-income 
first-time homebuyers. For example, effective counseling prior 
to purchase can lower default rates and increase awareness of 
what potential homebuyers should expect from the real estate 
agent, lender and credit checks. Therefore, the Committee 
recommends that HUD develop a process for measuring performance 
of housing counseling agencies and the national intermediaries 
that provide these services. Such measures should take into 
consideration the continuum of services that housing counseling 
providers deliver to program participants. In addition, HUD is 
directed to develop industry standards for performance, based 
on best practices of providers, that can be used to set the 
criteria for success. In developing performance measures and 
standards, the Committee directs HUD to consult with national 
intermediaries and other national housing counseling groups to 
assure that such provisions are realistic and can be accurately 
applied.
    With the available funds, HUD is directed to provide funds 
to organizations without preference for any one organization or 
agency. Furthermore, the grant award is to be based on 
experience and expertise. Finally, HUD is directed to lift any 
caps placed on grants to intermediaries

                       HOMELESS ASSISTANCE GRANTS

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $975,000,000
Fiscal year 1998 appropriation........................       823,000,000
Fiscal year 1999 budget request.......................     1,150,000,000
Comparison with fiscal year 1998 appropriation........      +152,000,000
Comparison with fiscal year 1999 budget request.......      -175,000,000
                                                                        

    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 
$975,000,000, a decrease of $175,000,000 below the request, 
(which includes $192,000,000 for certificates and vouchers), 
and $152,000,000 higher than the fiscal year 1998 
appropriation. Additionally, the Committee recommends allowing 
HUD to use up to one percent of the funds appropriated for 
technical assistance and systems support.
    HUD is directed to review the obligated but unexpended 
balances of these accounts and, where appropriate, begin the 
process of de-obligating funds in contracts that are unlikely 
to perform. The Committee is especially concerned about the 
level of unexpended balances in programs funded prior to 1993. 
Furthermore, HUD is directed to consider the ramifications of 
requiring applicants for construction grants to demonstrate 
better administrative control over the site and financing prior 
to receiving an award. Finally, HUD is directed to review the 
feasibility of requiring grantees to expend funds within three 
years and to report its conclusions to the House and Senate 
Committees on Appropriations by February 1, 1999.
    The Committee notes that the percentage of total McKinney 
funding devoted to permanent housing has plummeted from over 
70% in fiscal year 1993 to less than 18% is the current fiscal 
year. According to some figures, approximately 650,000 people 
are homeless on any given night, and between 1.3 and 2 million 
Americans experience homelessness during this year. In the 
context of this overwhelming need, it is crucial that scarce 
McKinney funds be spent prudently and leveraged with the 
greatest amount of matching local, state and private investment 
funds possible.
    In order to make these programs more outcome oriented and, 
over time, to eliminate homelessness among the most vulnerable 
and visible group of homeless people, HUD is directed to target 
any permanent housing, certificates or vouchers to individuals 
and families with chronic disabilities like substance or 
alcohol abuse and mental illness. If vouchers are used, HUD is 
directed to ensure that they are used in conjunction with 
supportive services.
    Research now shows that chronically homeless individuals 
and families often receive housing through regular, long-term 
use of the emergency shelter system. This practice interferes 
with their treatment regimens and results in costly hospital 
and even jail stays. Permanent users clog the emergency system 
reducing its ability to address the more temporary problems of 
families and individuals who are homeless because of an 
economic crisis.
    Federal homeless funding should be adjusted to focus an 
appropriate portion of resources, long term, on providing 
permanent supportive housing for chronically homeless people, 
who cannot expect to be housed by any other system. Redirecting 
funds in this manner will improve outcomes for this most needy 
sub-population and will free the emergency system to 
successfully help people who are experiencing an economic 
crisis.
    The Committee supports the efforts of the House authorizing 
committee for recognizing this drawback and for addressing it 
in H.R. 217, the Homeless Housing Programs Consolidation and 
Flexibility Act. Among the recommendations contained in H.R. 
217 is the requirement that 30% of the homeless funds 
appropriated be directed to permanent, supportive housing.
    To better measure the results of homeless programs and 
providers, HUD is directed to require recipients of HUD 
Homeless Assistance Grant funds to provide information on the 
unduplicated number of clients served and the immediate 
disposition of clients exiting their programs. Furthermore, HUD 
is directed to annually aggregate this and other available 
information on the use of homeless funds. Finally, HUD is 
directed to work with a representative sample of jurisdictions 
to collect, at a minimum, the following data: the unduplicated 
count of clients served; client characteristics such as age, 
race, sex disability status; units (days) and type of housing 
received (shelter, transitional, permanent); and services 
rendered. Outcome information such as housing stability, income 
and health status should be collected as well. Armed with 
information like this, HUD's ability to assess the success of 
homeless programs and grantees will be vastly improved. If 
funds are necessary to implement this directive with new 
tracking systems, HUD may use the funds requested for technical 
assistance.
    Because the treatment and community service needs of people 
with severe mental illness are so varied, no single federal 
department is in a position to provide resources and guidance 
to states and communities in dealing with this issue. 
Therefore, the Committee urges the Interagency Council on the 
Homeless to convene an interagency summit on severe mental 
illness and the inappropriate use of jails, prisons and 
homeless shelters as permanent housing for the severely and 
chronically mentally ill. The Committee anticipates the summit 
will produce a product that will highlight the best practices 
and strategies to cope with the challenges faced by communities 
in dealing with homelessness and mental illness. The following 
agencies should be involved in the summit: HUD (the divisions 
of Public and Indian Housing, Community Planning and 
Development, Housing); the Department of Justice (the Bureau of 
Justice Assistance, the Office of Juvenile Justice and 
Delinquency Prevention, and the Federal Bureau of Prisons); the 
Department of Health and Human Services (the National Institute 
of Mental Health and the Substance Abuse and the Mental Health 
Services Administration); and the Department of Veteran's 
Affairs (the Veterans Health Administration). The Interagency 
Council should make every effort to engage other stakeholders, 
such as State and local officials and organizations 
representing people with severe mental illnesses and their 
families, to participate in any such summit.

                            Housing Programs

                    housing for special populations

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $839,000,000
Fiscal year 1998 appropriation........................       839,000,000
Fiscal year 1999 budget request.......................                 0
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 budget request.......      +839,000,000
                                                                        

    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 flexibility.
    The Committee recommends funding the section 202 housing 
for the elderly program at the fiscal year 1998 appropriation 
of $645,000,000 and section 811 housing for the disabled 
program at the fiscal year 1998 appropriation of $194,000,000, 
which are increases of $486,000,000 and $20,000,000, 
respectively.
    The Committee is troubled by HUD's proposal to collapse the 
section 811 and 202 programs into the HOME Block Grant. The 
Committee believes that both programs have been good examples 
of public-private partnerships that work. Folding the programs 
into HOME, without major changes in the requirements for 
monitoring and enforcing the consolidated planning process, 
could place the funds in jeopardy.
    Finally, the Committee is concerned by proposals to expand 
the percentage of section 811 funding directed to tenant-based 
rental assistance. While tenant-based assistance is critically 
important to people with disabilities and their families, it is 
not the only answer. In too many communities, disabled persons 
lack access to sufficient, affordable homes. Homes constructed 
using section 811 funds ensure that sufficient options exist 
for these families. Therefore, while the Committee agrees with 
HUD's proposal to direct 25 percent of section 811 
appropriations to tenant-based rental assistance, the Committee 
directs the HUD to use the waiver authority contained in this 
bill to allow non-profit disability organizations to apply 
directly to HUD for these funds.

                         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        Limitation of        Administrative  
                                                       direct loans       guaranteed loans         expenses     
----------------------------------------------------------------------------------------------------------------
Fiscal year 1999 recommendation..................          $50,000,000     $110,000,000,000         $328,888,000
Fiscal year 1998 appropriation...................          200,000,000      110,000,000,000          338,421,000
Fiscal year 1999 budget request..................           50,000,000      110,000,000,000          328,000,000
Comparison with fiscal year 1998 Appropriation...         -150,000,000                    0           -9,533,000
Comparison with fiscal year 1999 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 
unsubsidized programs, and consists of primarily the 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 that are occupied by 
members of a cooperative housing corporation.
    The Committee recommends the request of limiting the 
commitments in the FHA-MMI program account to $110,000,000,000 
in fiscal year 1999. The commitment level is not a change from 
the 1998 level. The Committee recommends the request of 
$328,888,000 for administrative expenses, a decrease of 
$9,533,000 below the appropriation in fiscal year 1998. 
Furthermore, the Committee recommends the request to limit 
direct loans to $50,000,000, a decrease of $150,000,000 below 
the fiscal year 1998 appropriation. Direct loans are used to 
facilitate the acquisition and disposition of FHA single-family 
and multi-family acquired properties by non-profit 
intermediaries. Because of inactivity in this program, HUD did 
not request a higher limitation.
    At the same time, there is widespread concern--shared by 
the Committee--about the current process for managing and 
selling single-family homes where defaults have occurred on 
FHA-insured mortgages. The current system has not only proved 
costly to the government, but has all too often contributed to 
a cycle of decline in neighborhoods, as HUD-owned homes sit 
vacant and deteriorate, or a cycle through a series of defaults 
or pass from owner occupants to investors.
    HUD is undertaking a major overhaul of the FHA property 
disposition process and the Committee applauds this long-
overdue effort. However, the Committee believes it essential 
that any reforms include features to ensure that FHA property 
disposition procedures contribute to stable and revitalized 
neighborhoods and homeownership.
    Accordingly, the Committee strongly recommends that HUD 
include the following features in any single-family property 
disposition reforms. First, special treatment should be given 
to properties located in ``revitalization areas'' designated on 
the basis of factors such as high mortgage default rates, high 
concentrations of FHA-insured lending, or declining property 
values. Second, every effort should be made to promote the 
ultimate sale of HUD-owned homes in revitalization areas to 
owner-occupants, with provision made for necessary 
rehabilitation, homeownership counseling and other features 
needed to make ownership of the home viable in the long run. 
Third, in dealing with defaulted mortgages in revitalization 
areas, HUD should work to the maximum extent feasible with 
state and local government agencies and qualified non-profit 
organizations with expertise in promoting neighborhood 
revitalization and homeownership for low- and moderate-income 
people. Fourth, in structuring bulk or ``pipeline'' sales of 
defaulted properties or mortgage notes, HUD should strongly 
consider building in appropriate incentives for achievement of 
homeownership and property rehabilitation objectives, and 
development of partnerships with state and local government 
agencies and qualified non-profit organizations, as well as 
giving due consideration to the financial return to the Federal 
Government.
    In addition, the Committee believes it critical to ensure 
that the number of FHA-insured loans going into default is as 
low as possible. This goal is important both to reduce costs to 
the government and reduce adverse effects on homeowners and 
neighborhoods. The Committee therefore urges HUD to take steps 
to ensure that lenders and mortgage servicers undertake 
effective loss mitigation strategies aimed at keeping borrowers 
in their homes wherever it is possible to work out a viable 
alternative to foreclosure.
    The Committee notes that the Administration has proposed an 
administrative provision for this bill dealing with the FHA 
property disposition process and an option for assignment of 
mortgage notes prior to default. The Committee has not adopted 
the proposal at this time, without prejudice to future 
consideration. While the proposal has attractive aspects, the 
Committee believes that further consideration should be given 
to the factors discussed above before action is taken.

              FHA-General and Special Risk Program Account

                     (including transfers of funds)

----------------------------------------------------------------------------------------------------------------
                                     Limitation of       Limitation of      Administrative                      
                                     direct loans      guaranteed loans        expenses          Program costs  
----------------------------------------------------------------------------------------------------------------
Fiscal year 1999 recommendation.         $50,000,000     $18,100,000,000        $211,455,000         $81,000,000
Fiscal year 1998 appropriation..         120,000,000      17,400,000,000         222,305,000          81,000,000
Fiscal year 1999 budget request.         150,000,000      18,100,000,000         211,455,000          81,000,000
Comparison with fiscal year 1998                                                                                
 Appropriation..................         -70,000,000        +700,000,000         -10,805,000                   0
Comparison with fiscal year 1999                                                                                
 budget request.................                   0                   0                   0                   0
----------------------------------------------------------------------------------------------------------------

    The general and special risk insurance funds contain the 
largest number of program administered by the FHA. The GI funds 
cover a wide variety of special purpose single and multi-family 
programs, including loans for property improvements, 
manufactured housing, multi-family 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 Committee recommends the request to limit loan 
guarantee commitments for the FHA-general and special risk 
insurance program account to $18,100,000,000, an increase of 
$700,000,000 above levels appropriated in fiscal year 1998. The 
Committee recommends the budget requests of $81,000,000 for 
credit subsidy, which is the same level appropriated in fiscal 
year 1998 and of $211,000,000 for administrative expenses, a 
decrease of $10,805,000 below the fiscal year 1998 
appropriation. Finally, the Committee recommends the limitation 
on direct loans of $50,000,000, a decrease of $70,000,000 below 
the fiscal year 1998 request. Like the MMI account, activity in 
this area has decreased, making the higher limitation 
unnecessary.

                Government National Mortgage Association

                guarantees of mortgage-backed securities

                     loan guarantee program account

                     (including transfer of funds)

------------------------------------------------------------------------
                                     Limitation of      Administrative  
                                   guaranteed loans        expenses     
------------------------------------------------------------------------
Fiscal year 1999 recommendation.    $150,000,000,000          $9,383,000
Fiscal year 1998 appropriation..     130,000,000,000           9,383,000
Fiscal year 1999 budget request.     150,000,000,000           9,383,000
Comparison with fiscal year 1998                                        
 appropriation..................     +20,000,000,000                   0
Comparison with fiscal year 1999                                        
 budget request.................                   0                   0
------------------------------------------------------------------------

    The guarantee 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). The Government National Mortgage 
Association (GNMA) guarantees the timely payment of principal 
and interest on securities issued by private service 
institutions such as mortgage companies, commercial banks, 
savings banks, and savings and loan associations which assemble 
pools of mortgages, and issues securities backed by the pools. 
In turn, investment proceeds are used to finance additional 
mortgage loans. Investors include non-traditional sources of 
credit in the housing market such as pension and retirement 
funds, life insurance companies and individuals.
    As the budget requests, the bill recommends language to 
limit loan guarantee commitments for mortgage-backed securities 
of the Government National Mortgage Association to 
$150,000,000,000 in 1999. In addition, an appropriation of 
$9,383,000 is provided to fund administrative expenses.

                    Policy Development and Research

                        research and technology

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $47,500,000
Fiscal year 1998 appropriation........................        36,500,000
Fiscal year 1999 budget request.......................        50,000,000
Comparison with fiscal year 1998 appropriation........       +11,000,000
Comparison with fiscal year 1999 budget request.......        -2,500,000
                                                                        

    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, 
non-profit research organizations, and educational institutions 
and through agreements with state and local governments and 
other federal agencies.
    The bill includes $47,500,000 for research and technology 
in fiscal year 1999, a decrease of $2,500,000 below the budget 
request and an increase of $11,000,000 above fiscal year 1998. 
Of this amount, the Committee recommends $37,500,000 for 
research, technology, and policy analysis and $10,000,000 for 
the Partnership for Advancing Technology in Housing (PATH) 
initiative, as requested.
    The Committee encourages HUD to engage in PATH activities 
that will provide research, development, testing and 
engineering protocols for building materials and methods. For 
example, HUD should consider the relevance of undertaking 
testing of existing technologies for projects that construct 
affordable, energy efficient and natural disaster resistant 
housing. As described in the April 1998 report, ``Best 
Practices,'' PATH should examine emerging technologies for 
creating sustainable homes and disseminate the information to 
the housing industry. The Committee encourages the PATH program 
to also address the issue of building codes by advocating codes 
that include rules for high technology, traditional and 
primitive or non-traditional building materials.
    The Committee directs the Office of Policy Development and 
Research to undertake an assessment of the loss of assisted 
housing for non-elderly people with disabilities that has 
occurred since 1993 and report its findings to the Committee by 
February 1, 1999. The Committee also recommends that PD&R work 
closely with the disability community on this assessment which 
should measure the loss of privately-owned assisted housing 
that has occurred as a result of tenant-selection policies 
changes. The Committee is concerned that, because HUD does not 
require that private owners of assisted housing inform the 
agency when changing tenant selection policies, there is no 
record of loss of housing that has occurred since this policy 
was enacted in 1992.

                   Fair Housing and Equal Opportunity

                        fair housing activities

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $40,000,000
Fiscal year 1998 appropriation........................        30,000,000
Fiscal year 1999 budget request.......................        52,000,000
Comparison with fiscal year 1998 appropriation........       +10,000,000
Comparison with fiscal year 1999 budget request.......       -12,000,000
                                                                        

    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 provision of the fair housing law.
    The Fair Housing Assistance Program (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.
    The Fair Housing Initiatives Program (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 recommends providing $40,000,000; $16,500,000 
for FHAP, including an increase of $1,500,000 for complaint 
processing, capacity building and related costs, and 
$23,500,000 for FHIP, of which $7,500,000 is for the 
Administration's proposal for a nationwide audit to determine 
the extent of discrimination in rental housing and housing 
sales, and $1,000,000 for increased education and outreach 
activities.
    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 take remedial action 
to address fair housing complaints within their jurisdiction.
    The Committee is encouraged by HUD's recent testimony 
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 acknowledgement 
of these budgetary priorities and looks forward to the agency's 
continued cooperation in adhering to them.
    The Committee provides $7,500,000 for HUD to undertake a 
nation-wide audit of discrimination and enforcement in housing 
rental and sales in 20 communities, both metropolitan and non-
metropolitan areas. The Committee believes an audit, designed 
by HUD's Office of Policy, Development and Research, on sound 
survey methods will provide a baseline by which to evaluate the 
problem of discrimination in the nation's housing market. Prior 
to awarding contracts or grants to undertake the audit, HUD is 
directed to report to the House and Senate Committees on 
Appropriations regarding the criteria for selecting the 20 
communities involved and the methodologies and standards to be 
used. HUD is also directed to report to the Committees 
regarding the results and findings of the audit.

                     Office of Lead Hazard Control

       Lead hazard reduction program and health homes initiative

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $80,000,000
Fiscal year 1998 appropriation........................                 0
Fiscal year 1999 budget request.......................        85,000,000
Comparison with fiscal year 1998 appropriation........       +80,000,000
Comparison with fiscal year 1999 budget request.......        -5,000,000
                                                                        

    The Lead Hazard Reduction Program, authorized under the 
Housing and Community Development Act of 1992 (P.L. 102-550) 
provides grants to state and local governments to perform lead 
hazard reduction activities in housing occupied by low-income 
families. The program also provides technical assistance, 
undertakes research and evaluations of testing and cleanup 
methodologies, and develops technical guidance and regulations 
in cooperation with EPA.
    The Committee recommends an appropriation of $80,000,000 
for this program, a decrease of $5,000,000 below the request 
and an increase of $20,000,000 above the fiscal year 1998 
level. Within the amount appropriated, the Committee intends 
that $60,000,000 be used for the on-going program of lead 
hazard reduction grants, research, technical assistance, and 
related work, and that the remaining $20,000,000 be used for 
the new ``Healthy Homes Initiative'' proposed by the 
Administration.
    The Committee's goal in providing funds for lead hazard 
control is to help communities make lead safety integral to 
housing maintenance, repair, and rehabilitation. To achieve 
this goal, the Committee directs HUD to: 1) emphasize cost-
effective interventions, 2) require local grantees to partner 
with community-based organizations and fund some broad-based 
strategies, such as free training in safe repainting, 
encouraging essential maintenance practices, and supporting 
widespread and routine dust lead testing, and 3) provide 
grantees flexibility to pursue high payoff opportunities to 
control other environmental hazards related to housing quality.
    Within the funds provided for lead hazard reduction, the 
Committee directs that $650,000 be used to continue the on-
going project to advance consensus lead safety recommendations 
with emphasis on strategies to protect children at highest 
risk. Additionally, the Committee directs that at least 
$350,000 be used to continue the work of the National Center 
for Lead-Safe Housing in evaluating and disseminating 
information on lower-cost maintenance and hazard control 
measures and to revise technical guidelines for evaluating and 
controlling lead-based paint hazards.
    The Committee is encouraged by the risk reduction and 
education efforts achieved so far by the CLEARCorps program in 
its efforts to reduce childhood lead poisoning across the 
country. Within the funds provided for lead hazard reduction 
grants, the Committee has included $2,500,000 for CLEARCorps to 
expand its program in cities where it is already operating, as 
well as to expand into additional urban and rural areas with 
children at risk from lead poisoning. Because of the importance 
of systematic evaluation of innovative programs such as this 
one, the Committee directs that up to 5 percent of the funds 
allocated to CLEARCorps be reserved by HUD and used for an 
evaluation of the program, its relative cost, and its 
effectiveness in reducing lead-based hazards.
    A central goal of the Healthy Homes Initiative is to 
develop and implement a program of research and demonstration 
projects that would address multiple housing-related problems 
affecting the health of children. Examples of childhood 
illnesses and injuries that are often related to housing 
conditions include asthma (the prevalence of which has 
increased dramatically in recent years, with especially high 
rates among low-income and minority families) and the outbreaks 
of ``bleeding lung'' in infants that have been traced to toxic 
molds.
    Because multiple hazards often have common causes (for 
example, moisture can cause paint failure and lead hazards, as 
well as mold and mildew, associated with asthma and other 
diseases), the Healthy Homes approach appears superior to 
addressing these problems one by one. At the same time, 
designing and implementing cost-effective interventions to 
multiple housing quality problems is difficult. The Committee 
requests HUD to submit a plan by January 1, 1999 that 
inventories the problems to be addressed, describes their 
intersections, identifies key technical questions, and provides 
a spending plan allocating funds among technical and policy 
studies, pilot projects, and emergency remediation. In 
developing this plan, HUD should seek input and advice from 
experts and researchers, other federal agencies, and 
experienced local practitioners.
    Within the Healthy Homes Initiative, the Committee directs 
that a minimum of $4,000,000 be devoted to preventive measures 
to correct moisture and mold problems in inner-city housing 
occupied by families with infants in communities where toxic 
mold exposure has been linked to acute pulmonary hemorrhage and 
infant death. In addition, as part of the initiative, the 
Committee also expects HUD to undertake research on moisture 
and mold prevention through proper ventilation and other means, 
and to develop and disseminate model standards appropriate to 
residential housing.

                     Management and Administration

                         salaries and expenses

                     (including transfers of funds)

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         By transfer                                    
                                                                    ------------------------------------------------------------------------------------
                                                                      Appropriation      FHA funds        GNMA funds          CPD             Total     
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal year 1999 recommendation....................................                $                $                $                $     $985,826,000
Fiscal year 1998 appropriation.....................................                0                0                0                0    1,000,826,000
Fiscal year 1999 budget request....................................                0                0                0                0    1,000,826,000
Comparison with fiscal year 1998 appropriation.....................                0                0                0                0      -15,000,000
Comparison with fiscal year 1999 budget request....................                0                0                0                0      -15,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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, field direction and 
administration.
    The Committee recommends $985,826,000, a decrease of 
$15,000,000 below the request and $15,000,000 below the fiscal 
year 1998 appropriation. HUD is directed to make these 
decreases from the contracting components of the ``Other 
Services'' account and from the travel account.
    The Committee is aware of concerns that, perhaps due to 
stringent personnel reduction goals, HUD may be contracting out 
various functions without adequate consideration as to whether 
the work could be performed less expensively or more 
effectively by HUD personnel. In light of these concerns, the 
Committee requests HUD to review its procedures for determining 
whether particular functions and assignments will be contracted 
out. The Committee further requests HUD to report to the House 
and Senate committees on Appropriations no later than September 
1, 1998, regarding the specific procedures HUD has in place (or 
intends to implement) for determining whether particular work 
will be contracted out or performed in-house, including 
procedures for considering the relative costs and benefits of 
the two approaches. The report should also discus the extent to 
which HUD has used procedures under OMB Circular A-76, and the 
factors HUD considers in deciding whether to use these 
procedures.

                      office of inspector general

                     (including transfer of funds)

----------------------------------------------------------------------------------------------------------------
                                                                                   Drug elim.                   
                                               Appropriation      FHA funds          grants           Total     
----------------------------------------------------------------------------------------------------------------
Fiscal year 1999 recommendation.............                $                $                $      $81,910,000
Fiscal year 1998 appropriation..............                0                0                0       66,850,000
Fiscal year 1999 budget request.............                0                0                0       66,850,000
Comparison with fiscal year 1998                                                                                
 appropriation..............................                0                0                0      +15,060,000
Comparison with fiscal year 1999 budget                                                                         
 request....................................                0                0                0      +15,060,000
----------------------------------------------------------------------------------------------------------------

    The Office of Inspector General provides agency-wide audit 
and investigative functions to identify and correct management 
and administrative deficiencies that 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, re-pricing 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 Committee recommends $81,910,000 for the Office of 
Inspector General, which incorporates $22,343,000 transferred 
from various funds of the FHA and $10,000,000 transferred from 
Drug Elimination Grants. The appropriation is an increase of 
$15,060,000 above the request and $15,060,000 above the fiscal 
year 1998 appropriation.
    The increase in funding is for an initiative to investigate 
possible fraud in all of HUD's programs. The initiative is 
being conducted in conjunction with the Federal Bureau of 
Investigation (FBI) and the Department of Justice. Activities 
are targeted at fraudulent and other criminal activities. By 
increasing enforcement actions such as these, the families that 
are the intended beneficiaries of HUD's various programs are 
actually assured of receiving the assistance. Furthermore, 
program credibility is increased as HUD's programs are better 
protected.

             Office of Federal Housing Enterprise Oversight

                         salaries and expenses

                     (including transfer of funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $16,551,000
Fiscal year 1998 appropriation........................        16,000,000
Fiscal year 1999 budget request.......................        16,551,000
Comparison with fiscal year 1998 appropriation........          +551,000
Comparison with fiscal year 1999 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 Committee recommends the request of $16,551,000, an 
increase of $551,000 above the fiscal year 1998 appropriation. 
The Committee is pleased to note that OFHEO has committed to 
deliver the risk-based capital proposal to the Office of 
Management and Budget (OMB) by September 30, 1998. The 
Committee is pleased with the progress, though long overdue, 
that has been made in this direction.

                       administrative provisions

    The bill contains a number of administrative provisions.
    Section 201 imposes minimum rents in public and assisted 
housing, eliminates federal preferences and allows the public 
housing capital fund to be used more flexibly.
    Section 202 delays for three months the reissuance of 
section 8 vouchers and certificates.
    Section 203 corrects an anomaly in the HOPWA formula that 
results in the loss of funds for a state when the incidence of 
AIDS in a large city increases.
    Section 204 allows PHAs to draw down capital grant funds on 
construction-related schedules, and deposit the funds in escrow 
accounts to collateralize bonds for construction or 
rehabilitation. As a result, tax-exempt bonds can be issued at 
reduced rates, thereby allowing low-cost access to low income 
housing tax credits.
    Section 205 provides a lower rent subsidy for a new one-
person voucher or certificate holder or a mover based on the 
cost of an efficiency apartment instead of a one-bedroom.
    Section 206 eliminates the shopping incentive for families 
who choose to rent an apartment with a lower rent than the HUD 
standard.
    Section 207 allows HUD to renegotiate the current formula 
for distributing operating subsidies through the negotiated 
rulemaking process. The current system has not been 
substantially changed in many years. A revised formula should 
be simpler, more equitable and provide better incentives for 
sound, cost-effective public housing management.
    Section 208 provides regulatory relief for a project in 
Oxnard, California.
    Section 209 extends a provision allowing the City and 
Country of Los Angeles to use up to 25 percent of their CDBG 
grant allocations for public services.

                               TITLE III

                          INDEPENDENT AGENCIES

                  American Battle Monuments Commission

                         Salaries and Expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $26,431,000
Fiscal year 1998 appropriation........................        26,897,000
Fiscal year 1999 budget request.......................        23,931,000
Comparison with fiscal year 1998 appropriation........          -466,000
Comparison with fiscal year 1999 budget request.......        +2,500,000
                                                                        

    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 $26,431,000 for fiscal year 1999 
to administer, operate and maintain the Commission's monuments, 
cemeteries, and memorials throughout the world.
    This amount represents an increase of $2,500,000 above the 
budget request and is the second increment provided the 
Commission to reduce the maintenance backlog identified prior 
to passage of the fiscal 1998 appropriation. The Committee 
notes and commends the work performed in this regard so far by 
the Commission, and 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 362, a 
decrease of one below the 1998 level.
    The Committee noted in last year's Report the structural 
and maintenance problems with the Korean War Veterans Memorial. 
Clearly, such problems should not have occurred in a project 
that was dedicated just a year before. The Committee restates 
its expectation that ABMC will take action to ensure that 
similar problems do not occur in the design and construction of 
the World War II Memorial.

             Chemical Safety and Hazard Investigation Board

                         SALARIES AND EXPENSES

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................        $6,500,000
Fiscal year 1998 appropriation........................         4,000,000
Fiscal year 1999 budget request.......................         7,000,000
Comparison with fiscal year 1998 appropriation........        +2,500,000
Comparison with fiscal year 1999 request..............          -500,000
                                                                        

    The Chemical Safety and Hazard Investigation Board was 
authorized by the Clean Air Act Amendments of 1990 to 
investigate accidental releases of certain chemical substances 
resulting in serious injury, death, or substantial property 
damage. The Board became operational in fiscal year 1998.
    For fiscal year 1999, the Committee is recommending 
$6,500,000, an increase of $2,500,000 above last year's funding 
level, and a decrease of $500,000 below the budget request.
    Although the Board has been in operation for a very short 
period of time, the Committee is generally pleased with its 
early accomplishments. Nevertheless, the Board will likely 
undergo continued growing pains over the next several months, 
and the Committee cautions the Board to remain diligent with 
respect to monitoring costs and making careful, deliberate 
management decisions. As noted in the conference report and 
joint explanatory statement accompanying last year's spending 
measure, fiscal limitations forecast for the foreseeable future 
mean that the Board cannot expect substantial growth in terms 
of staffing or operational expenses over the next few years.
    Bill language has been included which limits the number of 
career senior executive service positions to three.

                       Department of the Treasury

              Community Development Financial Institutions

   community development financial institutions fund Program Account

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $80,000,000
Fiscal year 1998 appropriation........................        80,000,000
Fiscal year 1999 budget request.......................       125,000,000
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 request..............       -45,000,000
                                                                        

    The Community Development Financial Institutions 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 $80,000,000 
for the program in fiscal year 1999. The recommendation is a 
decrease of $45,000,000 below the budget request but is the 
same appropriation as fiscal year 1998.
    Last year, serious problems were raised about the past 
management of the CDFI fund. Since the resignations of the 
Director and Deputy Director, the fund has undergone 
significant managerial changes. The Committee applauds the 
efforts of the new management and staff to develop and 
implement strong systems for objective review of grant 
applications, performance monitoring, and financial control.
    The Committee remains concerned, however, that until all 
management changes and improvements are implemented, a funding 
increase of this magnitude is not prudent. Furthermore, the 
Committee encourages the CDFI, during this building period, to 
improve data collection systems to better track and to measure 
the performance of grantees that receive grants from the fund.

                   Consumer Product Safety Commission

                         salaries and expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $46,000,000
Fiscal year 1998 appropriation........................        45,000,000
Fiscal year 1999 budget request.......................        46,500,000
Comparison with fiscal year 1998 appropriation........        +1,000,000
Comparison with fiscal year 1999 request..............          -500,000
                                                                        

    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 $46,000,000 
for fiscal year 1999, a decrease of $500,000 from the 
President's budget request and an increase of $1,000,000 to the 
fiscal year 1998 level.
    The Committee recommendation includes a non-prejudicial 
reduction of $500,000. 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.
    The Committee congratulates the Commission on its role in 
developing mandatory and voluntary crib safety standards. 
However, deaths from cribs still exceed all other nursery 
products combined. Over 9,000 children are injured in cribs 
every year seriously enough to require hospital treatment. In 
the past 10 years, over 550 children died from crib injuries. 
One problem is that safety standards that apply to 
manufacturers are not enforced for cribs sold in secondary 
markets such as thrift stores and resale furniture stores. The 
Committee encourages the Commission to develop an annual public 
awareness program to educate both retailers and consumers on 
the consequences of selling and purchasing unsafe cribs.
    The Committee is concerned that the Commission may take 
action with regard to the chemical treatment of upholstered 
furniture to resist small flames without adequate study of the 
effects of such treatment. The Commission has made mistakes in 
the past because of inadequate knowledge, in particular the 
requirement that all baby sleepwear be coated with a flame 
retardant chemical. At the time the requirement was adopted, 
there was only one chemical which satisfied the Commission's 
requirements, that was TRIS. Later it was discovered that TRIS 
was a toxic danger to children and all baby sleepwear coated 
with TRIS had to be recalled from homes, retailers, and 
distributors. In the interest of avoiding a similar problem, 
the Committee has included bill language which will direct the 
Commission to take steps to increase knowledge of chemicals 
under consideration before regulations are promulgated. First, 
the Committee directs the Commission to work with the National 
Institute on Environmental Health Sciences to conduct a 
thorough study of all the flame retardant chemicals that are 
currently under consideration by the Commission. The Institute 
is to study the following chemicals: boric acid, 
decabromodiphenyl oxide, hexabromocyclododecane, antimony 
trioxide, tris phosphate, urea, phenol isopropylated phosphate, 
ammonium bromide, phosphorothioic acid, phosphonic acid, 
ammonium polyphosphate, ammonium sufamate, triphenyl phosphate, 
and melamine. Second, the Committee has included bill language 
which directs the Commission to convene a Chronic Hazard 
Advisory Panel, which is to use the findings of the NIEHS study 
on flame retardant chemicals as the basis for its 
recommendation regarding regulations for flame resistant 
upholstered furniture.
    In addition to the forgoing, the Committee has included 
direction in the FEMA section of the report and bill for a 
pilot project to determine if proper use of smoke detectors 
could reduce death and injury by fire more effectively than new 
regulations.

             Corporation for National and Community Service

       National and Community Service Programs Operating Expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................                 0
Fiscal year 1998 appropriation........................      $425,500,000
Fiscal year 1999 budget request.......................       499,316,000
Comparison with fiscal year 1998 appropriation........      -425,500,000
Comparison with fiscal year 1999 budget request.......      -499,316,000
                                                                        

    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 fiscal year 1999 budget request for program and 
administrative activities of the Corporation for National and 
Community Service is $502,316,000. Funding for this activity is 
not possible within the allocation. The Committee recommends 
that the national service program be terminated in fiscal year 
1999.
    The national service program is structured so that the 
majority of funds are obligated at the end of the fiscal year 
and spent during the next fiscal year. As such, funds will be 
needed in fiscal year 1999 to administer the 1998 program 
grants and for necessary termination costs. The bill includes 
language that will permit the Corporation to use fiscal year 
1998 funds for necessary administrative expenses and 
termination costs. The funds are also made available to cover 
necessary administrative and termination costs of the Office of 
Inspector General.

                      office of inspector general

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................                 0
Fiscal year 1998 appropriation........................        $3,000,000
Fiscal year 1999 budget request.......................         3,000,000
Comparison with fiscal year 1998 appropriation........        -3,000,000
Comparison with fiscal year 1999 budget request.......        -3,000,000
                                                                        

    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 Committee recommends that this activity be terminated. 
All necessary fiscal year 1999 administrative and termination 
costs for the Office of Inspector General will be provided from 
fiscal year 1998 programs funds of the Corporation.

                       Court of Veterans Appeals

                         salaries and expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $10,195,000
Fiscal year 1998 appropriation........................         9,319,000
Fiscal year 1999 budget request.......................        10,195,000
Comparison with fiscal year 1998 appropriation........          +876,000
Comparison with fiscal year 1999 budget request.......                 0
                                                                        

    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 the budget request of $10,195,000 for the 
Court of Veterans Appeals in fiscal year 1999, an increase of 
$876,000 above the current year appropriation. The bill also 
includes requested language earmarking $865,000 for the pro 
bono representation program.

                      Department of Defense--Civil

                       Cemeterial Expenses, Army

                         salaries and expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $11,666,000
Fiscal year 1998 appropriation........................        11,815,000
Fiscal year 1999 budget request.......................        11,666,000
Comparison with fiscal year 1998 appropriation........          -149,000
Comparison with fiscal year 1999 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 1997, the remains of 266,351 
persons were interred/inurned in these cemeteries. Of this 
total, 230,193 persons were interred and 21,838 remains inurned 
in the Columbarium in Arlington National Cemetery, and 14,320 
remains were interred in the Soldiers' and Airmen's Home 
National Cemetery. There were 3,525 interments and 2,000 
inurnments in fiscal year 1997. It is projected that there will 
be 3,500 interments and 2,000 inurnments in fiscal year 1998; 
and 3,600 interments and 2,100 inurnments in fiscal year 1999. 
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 $11,666,000 
and 112 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 
1999.

                    Environmental Protection Agency

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $7,422,739,000
Fiscal year 1998 appropriation........................     7,363,046,000
Fiscal year 1999 budget request.......................     7,790,275,400
Comparison with fiscal year 1998 appropriation........       +59,693,000
Comparison with fiscal year 1999 budget request.......      -367,536,400
                                                                        

    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 1999, the Committee has recommended a total 
program and support level of $7,422,739,000, an increase of 
$59,693,000 above the last year's appropriated level and a 
decrease of $367,536,400 from the budget request.
    Of the amounts approved in the following appropriations 
accounts, the Agency must limit transfers of funds between 
objectives 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 objective, 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 1999 recommendation \1\...................      $656,505,000
Fiscal year 1998 appropriation........................       631,000,000
Fiscal year 1999 budget request.......................       632,090,000
Comparison with fiscal year 1998 appropriation........       +25,505,000
Comparison with fiscal year 1999 budget request.......       +24,415,000
                                                                        
                                                                        
\1\ Totals do not include transfers of funds 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 
$656,505,000 for Science and Technology for fiscal year 1999, 
an increase of $25,505,000 above last year's spending level, 
and an increase of $24,415,000 above the budget request.
    The Committee's recommended appropriation includes the 
following increases to the budget request:
    1. +$1,250,000 for continuation and Calif. Regional PM 10 & 
2.5 air quality study.
    2. +$2,500,000 for EPSCoR.
    3. +$700,000 for continuation of study of livestock and 
agricultural pollution abatement at Tarleton State University.
    4. +$3,000,000 for Water Environmental Research Foundation.
    5. +$3,000,000 for continued research on urban waste 
management at the Univ. of New Orleans.
    6. +$2,650,000 for continued perchlorate research through 
the East Valley Water District.
    7. +$2,500,000 for the Mickey Leland Natl. Urban Air Toxics 
Research Center.
    8. +$4,000,000 for the American Water Works Assn. Research 
Foundation, including $1,000,000 for continued research on 
arsenic.
    9. +$2,000,000 for the Natl. Decentralized Water Resource 
Capacity Development Project, in coordination with EPA, for 
continued training and R&D program.
    10. +$1,500,000 for the Integrated Public/Private Energy 
and Environmental Consortium project.
    11. +$1,000,000 to establish an environmental molecular 
toxicology program at the University of Montana.
    12. +$1,000,000 for the National Center for Atlantic and 
Caribbean Reef Research at the Rosenstiel School of Marine and 
Atmospheric Science.
    13. +$5,000,000 to CE-CERT at the Univ. of Calif./Riverside 
for the development of a next generation environmental chamber 
to enable advanced research into atmospheric processes under 
low NOX conditions ($3,000,000) and for the 
development of test track research facilities($2,000,000).
    14. +$2,000,000 for continued Salton Sea research at the 
University of Redlands.
    15. +$1,000,000 to the Univ. of New Hampshire to develop, 
test, and evaluate innovative technologies for enhanced 
bioremediation of organically contaminated bedrock aquifers.
    16. +$1,500,000 for the Lovelace National Environmental 
Respiratory Center.
    17. +$2,500,000 for the Gulf Coast Hazardous Substance 
Research Center.
    18. +$1,000,000 for the development, design, and 
implementation of a research effort on tributyltin based ship 
bottom paints at Old Dominion Univ.
    19. +$25,000,000 to be merged with the budget request to 
implement the National Research Council/EPA research plan for 
particulate matter.
    Other Science and Technology program levels include:
    1. Climate change research is funded at $26,951,000, an 
increase of $10,000,000 over the 1998 level.
    2. Global change is funded at $14,143,000, the same as the 
1998 level.
    3. The new Advanced Measurement program is not funded.
    4. Project EMPACT is funded at the 1998 level of 
$6,630,000.
    For Science and Technology, no general reduction is 
proposed.
    In addition to the funds provided through appropriations 
directly to this account, the Committee has recommended that 
$40,000,000 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.
    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 $1,000,000 from within appropriated resources for the 
university portion of the Southern Oxidants Study. Similarly, 
the Committee expects the Agency to provide funding for the 
Hazardous Substance Research Centers at no less than the fiscal 
year 1998 level.
    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 is currently being considered as 
a remediation tool even though the impact of such an invasive 
approach is often unknown. Last year, the Committee directed 
the Agency 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. 
This study was requested to be completed by April 1, 1999. In 
light of this, the Committee directs the Agency to take no 
action which will utilize dredging as a remediation tool until 
this study has been completed and distributed and analyzed by 
all interested parties, including Congress.
    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.
    Last year, the Congress established a framework for the 
National Academy of Sciences (NAS) to develop a comprehensive 
prioritized, near and long-term particulate matter research 
program, as well as a plan to monitor how this research program 
is carried out by all participants in the research effort. NAS 
assembled an extraordinary group of science and medical 
professionals who produced a very high quality report--titled 
``Research Priorities for Airborne Particulate Matter: 
Immediate Priorities and a Long-Range Research Portfolio''--
well within the exceedingly short time-frame requested by the 
Congress. The NAS panel of experts, as well as the excellent 
staff who devoted hundreds of hours to this effort, are to be 
commended for their hard work and for the exemplary report they 
produced. This document will clearly serve as a guidepost to 
achieve the purposes intended by the Congress in developing 
this effort, which first was to identify the research gaps 
regarding the potential health effects of particulate matter, 
and then to provide the resources to conduct the necessary 
research effort.
    While the NAS has thus had a large role in the development 
of a new, near-term PM research plan--and will have yet a 
further role in the development of a long-term research plan as 
well as the monitoring of the implementation of both--the 
Environmental Protection Agency has by far the largest role in 
this process created by Congress. It is the EPA that must 
quickly and efficiently integrate the NAS plan with the 
research plan outlined in the original fiscal year 1998 budget 
request as well as with the fiscal year 1999 request. It is the 
EPA that must quickly and efficiently review research 
applications and issue grant awards so as to get this necessary 
research underway. It is the EPA who must later take the 
completed research and integrate it into any regulatory scheme 
that the research suggests is appropriate. The Committee 
acknowledges the complexity and immense nature of this task, 
but strongly believes that the Agency is not only capable of 
but, indeed, committed to meeting this challenge. That the 
Agency moved so quickly in developing and executing the initial 
contract with NAS as requested by the Congress is evidence of 
this commitment, and the Committee commends the Agency for its 
efforts in this regard.
    For fiscal year 1999, the Committee has provided 
$53,700,000 for continued PM research, an increase of 
$25,000,000 above the budget request. The Committee notes that 
the actual obligation of 1998 funds has, for many reasons, not 
proceeded at the pace originally expected. Because the Agency 
has established 2002 as the date of the next NAAQS review, it 
is imperative that research be well underway and, where 
possible, providing important data into the review and decision 
making processes. It is thus the Committee's intention that 
these funds, along with any remaining 1998 appropriations, be 
obligated as quickly as possible. With regard to this activity, 
the Agency is instructed not to await approval of the annual 
operating plan prior to obligation of these funds.
    The language provided in the conference report and joint 
explanatory statement of the committee of conference which 
accompanied last year's statutory expenditure for PM research, 
called for the Agency ``to implement the [NAS] plan, including 
the conduct of appropriate peer review and the distribution of 
intramural and extramural funds, in a manner which assures that 
research as determined in the plan will proceed in an orderly 
and timely fashion, and according to the priority basis 
outlined by NAS.'' The language goes on to permit EPA to 
essentially appeal the inclusion of any topic or priority 
listing included in the NAS research plan if there is 
disagreement on the part of the Agency, and such disagreement 
must be submitted to the Congress with a detailed analysis and 
a description of the Agency's proposed alternative. The 
Committee once again embraces this approach and expects the NAS 
plan to be fully implemented unless this ``appeals'' procedure 
is followed on a timely basis. As stated at the outset, the 
Committee desires all interested participants in this research 
effort to be fully engaged and striving for the common sense 
goal of enhancing our knowledge prior to the development or 
implementation of any regulatory proposal.
    Finally, the Committee notes that in its March 31, 1998 
report on PM research priorities, NAS stated that EPA's plans 
for its monitoring program ``should be thoroughly and 
independently peer-reviewed at an early date . . .'' The 
concern raised by the NAS was that, ``If particular 
biologically important constituents or characteristics of 
particulate matter exist and are not adequately identified, 
then fixed-site or personal monitors could fail to indicate the 
most serious particulate-matter risks to public health.'' The 
large investment in monitors that the Agency is undertaking--
and that the Committee has supported through section 105/103 
grants in the State and Tribal Assistance Grants account of 
this measure--must be spent intelligently.
    Therefore, the Committee requests that NAS assist EPA's 
Clean Air Science Advisory Committee (CASAC) by providing 
recommendations regarding the number and location of monitors 
and specific objectives and operating conditions for the 
various types of monitors in EPA's plan. Also, NAS shall 
evaluate the adequacy of the monitoring plan to characterize 
those constituents of PM that are biologically active. NAS 
should augment, as needed, its current panel to carry out this 
important review; and to the extent that it is necessary to 
amend the contract with NAS to accommodate this additional 
activity, EPA is directed to do so within 45 days of enactment 
of this legislation. The NAS is expected to facilitate a 
thorough peer review of EPA's monitoring plan by CASAC.
    The Gulf Coast region of the United States faces some of 
the most challenging air quality problems in the nation. Its 
meteorology and climatology is dominated by the western Gulf 
with extremes in humidity, precipitation, and coastal air mass 
movements. Moreover, the area witnesses an unusual mix of large 
industrial emission sources, extensive transportation emission 
sources, significant biogenic emissions, and a complex coastal 
meteorology. These sources and the meteorology interact to 
produce ozone, hazardous air pollutants, and fine particulate 
matter.
    Because the foundation of this air problem is primarily of 
a local and regional nature, local resources, such as the Gulf 
Coast Hazardous Substance Research Center, can often provide 
the experience and commitment necessary to meet the needs of 
air research goals. The Committee thus strongly encourages the 
Agency to utilize, whenever appropriate, the GCHSRC and other 
such valuable resources in the conduct of the research program 
for particulate matter and other pollutants.
    The Committee supports EPA research on environmental lung 
disease at the Environmental Lung Center of National Jewish 
Medical and Research Center, in Denver, and expects EPA to 
continue this research, which is important because of the need 
to base environmental regulation on sound science and to 
develop effective strategies for prevention, detection, and 
treatment of environmental lung disease.

                 ENVIRONMENTAL PROGRAMS AND MANAGEMENT

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $1,856,000,000
Fiscal year 1998 appropriation........................     1,801,000,000
Fiscal year 1999 budget request.......................     1,990,150,000
Comparison with fiscal year 1998 appropriation........       +55,000,000
Comparison with fiscal year 1999 budget request.......      -134,150,000
                                                                        

    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 1999, the Committee has recommended 
$1,856,000,000 for Environmental Programs and Management, an 
increase of $55,000,000 over the last year's level and a 
decrease from the budget request of $134,150,000. 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 objectives 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:
    1. +$3,000,000 for the Michigan Biotechnology Institute for 
continued development of viable cleanup technologies.
    2. +$1,500,000 for the Lake Wallenpaupack, Penn. 
environmental restoration project.
    3. +$130,000 for the Saint Vincent watershed environmental 
restoration project.
    4. +$500,000 for continued activities of the Small Business 
Pollution Prevention Center at the Univ. of Northern Iowa.
    5. +$1,101,000 for Natl. Estuary Program.
    6. +$1,300,000 for the Great Lakes National Program Office.
    7. +$750,000 for the painting and coating compliance 
project at the University of Northern Iowa.
    8. +$500,000 for continuation of the Idaho Water 
Initiative.
    9. +$2,000,000 for continuation of the Sacramento River 
Toxic Pollution Control Project, to be cost shared.
    10. +$1,300,000 for continuation of water reuse 
demonstration projects in Yucca Valley ($500,000) and Twenty 
Nine Palms ($800,000), Calif.
    11. +$700,000 for ongoing activities at the Canaan Valley 
Institute.
    12. +$3,000,000 for the Southwest Center for Env. Research 
& Policy (SCERP).
    13. +$3,000,000 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.
    14. +$500,000 for continuation of the Small Water Systems 
Institute at Montana State Univ.
    15. +$13,550,000 for rural water technical assistance 
activities and groundwater protection with distribution as 
follows: $8,500,000 for the NWRA; $2,100,000 for RCAP; $400,000 
for GWPC; $1,550,000 for Small Flows Clearinghouse; and 
$1,000,000 for the NETC.
    16. +$1,000,000 for implementation of the National 
Biosolids Partnership Program.
    17. +$1,000,000 for continued work on the Soil Aquifer 
Treatment Demonstration Project.
    18. +$3,000,000 for continuation of the New York and New 
Jersey dredge decontamination project.
    19. +$1,000,000 for continued work on the water quality 
management plans for the Onandaga and Cayuga County, New York 
watersheds.
    20. +$400,000 for continued work on the Cortland, Co. New 
York aquifer protection plan, $150,000 of which is for planning 
and implementation of the Upper Susquehanna watershed.
    21. +$500,000 for operation of the Long Island Sound 
Office.
    22. +$1,000,000 for the Southern Appalachian Mountain 
Initiative.
    23. +$1,000,000 for continued operations of the California 
Urban Environmental Research and Education Center.
    24. +$1,500,000 for a one-year demonstration of Project 
SEARCH (Special Environmental Assistance for Regulations of 
Communities and Habitat) in Idaho.
    25. +$2,500,000 for the National Center for Excellence for 
Environmental Management at the University of Findlay.
    26. +$500,000 to analyze the environmental and public 
health impacts of waste transfer stations in Hunts Point, South 
Bronx, New York. The Committee expects the Agency to include 
the community in the design and implementation of the study.
    27. +$100,000 to the Miami-Dade County Department of 
Environmental Resources Management to expand the existing 
education program.
    28. +$200,000 for the Northwest Citizen's Advisory 
Commission to coordinate research and education efforts of 
environmental issues covering the entire Northwest Straits 
area.
    29. +$2,500,000 for the Federal Energy Technology Center 
and EPA Region III to conduct a comprehensive acid mine 
drainage clean-up program.
    30. +$500,000 to initiate a surface water improvement 
demonstration project in Mecklenberg, NC.
    31. +$125,000 to the University of Louisville for the 
establishment of a regional environmental finance center at the 
Kentucky Institute for the Environment and Sustainable 
Development.
    32. +$200,000 for development of the Callegues Creek, Ca. 
watershed management plan.
    33. +$3,000,000 to Lycoming County, Pa. to assist in the 
development of a comprehensive CSO plan.
    34. +$2,500,000 to the Lake Pontchartrain Basin Foundation 
circuit rider water quality initiative in Fluker Chapel and 
Mandeville, La.
    35. +$3,500,000 for the Environmental Technology 
Commercialization Center (ETC2) in Cleveland, Ohio.
    36. +$2,000,000 to support efforts to address causes, 
mechanisms, and health and environmental effects of Pfiesteria.
    37. +$500,000 for treatment of uranium contamination of 
well heads within the Morongo Valley Community Service 
District, Ca.
    38. +$4,000,000 for the New River, Ca. environmental 
restoration project by the Imperial Irrigation District.
    39. +$10,000,000 to the Salton Sea Authority for extensive 
planning, development, and permitting requirements.
    40. +$750,000 for watershed management initiatives at Santa 
Ana River, Riverside County, Ca.
    41. +$750,000 for water restoration activities at the City 
of Stockton, California waterfront.
    42. +$10,000,000 for a National Community Decentralized 
Wastewater Demonstration Project, to be cost shared.
    43. +$320,000 for the St. Mary's River, Maryland watershed 
management and monitoring program.
    Other Environmental Programs and Management funding levels 
include:
    1. The Montreal Protocol Multilateral Fund is provided 
$12,000,000, the same as in FY1998.
    2. The Climate Change Technology Initiative will receive 
$72,500,000, nearly identical to 1998 funding.
    3. The enforcement programs will receive the 1998 level of 
$232,000,000.
    4. Project EMPACT is provided the 1998 level of $8,492,000.
    5. No funds have been provided for the GLOBE (-$1,000,000), 
Urban Liveability (-$1,598,000), and the OSWER Chemical Action 
Prevention (-$1,000,000) programs. OSWER is expected to assist 
the Chemical Safety and Hazard Investigation Board within 
available funds.
    For Environmental Programs and Management, a general 
reduction of $100,350,000 is being proposed.
    As in fiscal year 1998, the Committee continues to strongly 
support the EPA Finance Centers and directs that they be funded 
at no less than the 1998 level.
    The Committee notes that the Great Lakes program office has 
received an increase of $1,300,000 over the budget request of 
$20,157,000. The National Estuary Program has been funded with 
an increase of $1,101,000 above the budget request of 
$16,899,000, and the Committee directs that no more than 
$4,300,000 is available for EPA's intramural costs of the 
program . The Chesapeake Bay program is likewise fully funded 
at $18,880,000. Finally, the Committee notes that the budget 
request for the ``Clean Water Action Plan,'' which includes 
funds provided through both the ``Environmental Programs and 
Management'' and ``State and Tribal Assistance Grants'' has 
been provided in full by the Committee. Within the amounts 
provided for the Clean Water Action Plan, no less than 
$7,500,000 is intended to be used to expand local government 
activity in groundwater and source water protection through the 
groundwater/wellhead protection program. The expansion of this 
program in this manner will provide over 100 additional 
technicians for in-the-field work and will virtually guarantee 
that 2,000 or more communities will adopt new goundwater/source 
water ordinances targeted to the highest risk watershed areas 
in each state.
    The Committee expects that the National Environmental 
Education and Training Foundation will be funded at a level no 
less than $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 Committee has again 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 continues 
to applaud 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.
    Last year, the Committee noted the value of and encouraged 
the Agency to submit a budget request for the Office of Small 
Business Ombudsman. The Committee continues to support this 
Office and the important bridge it represents to the small 
business community, and has therefore included within available 
funds in this account up to $500,000 for the staffing and 
operations of this office.
    Bill language has been included which limits expenditures 
for certain activities relative to the Kyoto Protocol to the 
United Nations Framework Convention on Climate Change. This 
language was included in part because of sincere concerns that, 
lacking support for Senate ratification, the Administration is 
attempting to force binding greenhouse gas emission reductions 
through ``back door'' regulatory action and through greatly 
expanding existing programs. The bill language is intended to 
prohibit the expenditure of funds for implementation of the 
Kyoto Protocol in any manner until it has been ratified by the 
Senate.
    Beyond this language, the Committee remains concerned with 
the apparent inequity of the Protocol, which places binding 
greenhouse gas emission reductions on the United States and 31 
other nations while at the same time exempting 132 developing 
nations, including China, India, Brazil, and Mexico. These four 
nations alone are expected to emit more than 50 percent of the 
world's greenhouse gases by the year 2050. Last year, the 
United States Senate passed by a vote of 95-0 a resolution 
expressing the sense of the Senate that the United States 
should not be a signatory to any protocol regarding climate 
change in Kyoto that would place the United States at a 
competitive disadvantage. It would seem this resolution was 
summarily ignored by the United States negotiators in Kyoto.
    Finally, the Committee is concerned that the Agency, the 
CEQ, among others, may be engaging in activity that is 
tantamount to lobbying in an effort to build public support for 
implementation of the Protocol. While the Committee recognizes 
the importance of educating the public on environmental issues, 
there can be a very fine line between education and advocacy of 
an issue. The Agency and the CEQ are thus directed to refrain 
from conducting educational outreach or informational seminars 
on policies underlying the Kyoto Protocol until or unless the 
Protocol is ratified by the Senate.
    As was noted during the Agency hearings on the fiscal year 
1999 budget submission, the Committee is concerned that EPA is 
moving forward with a nationally applicable rule on regional 
haze without adequately completing its obligations under the 
Clean Air Act (CAA), such as the obligation to update the 
report to Congress on visibility improvements achieved through 
implementation of other sections of the CAA. In addition, most 
states have not benefited from participation in a visibility 
transport commission (VTC) to research and monitor visibility 
impairment, and assess its sources and the cost-effectiveness 
of any additional measures needed to achieve reasonable 
progress. To re-establish the regional haze program on a firm 
statutory footing the Committee strongly recommends that 
funding of up to $500,000 for each of up to eight VTCs be 
provided by the Agency from within available funds whenever a 
group of states comes forward as a VTC, or to implement 
recommendations of a VTC.
    Each such VTC should use these funds to prepare and begin 
the implementation of appropriate, comprehensive work plans, 
with a goal of completion by March 1, 1999. Each such plan 
should be provided to the Congress for review, and should 
include a schedule for completing the plan, a schedule for each 
state serving on a VTC to use the results of the plan in its 
visibility implementation plan, and a year-by-year projection 
of the Federal funding required to ensure that the regional 
haze program will not result in an unfunded Federal mandate on 
the States. The Agency is directed to report to the Committee 
monthly on the progress made towards accomplishing this 
directive. Further, the Committee recommends that the Agency 
allocate funds to assure that visibility monitors are located 
in Class I areas.
    Despite efforts over nearly 30 years, ozone at ground level 
continues to be a problem in the United States. EPA estimated 
that in 1996 approximately 39 million people lived in areas 
where the concentration of ozone at ground-level was greater 
than the concentrations allowed under then-existing National 
Ambient Air Quality Standards. Under the new 1997 standards for 
ozone, many more American citizens are expected to be in that 
same situation. Nevertheless, many uncertainties remain 
regarding what scientific and technical information is most 
needed in the ozone abatement efforts of EPA and state agencies 
and how such information is actually being used by them.
    The Agency is therefore directed to work with the NAS to 
conduct a study that independently evaluates such scientific 
and technical information most needed by EPA's air regulatory 
office, and EPA's actual use of such information in developing, 
implementing, and verifying regulatory strategies for ground-
level ozone. The study should evaluate EPA's approaches for 
improving its ozone precursor emissions inventories, 
atmospheric monitoring, air quality modeling, and other 
scientific and technical aspects of the state implementation 
planning process, as well as other scientific approaches for 
achieving more effective reductions of precursor emissions from 
local and distant sources that substantially contribute to 
ozone concentrations in specific urban and rural locations. The 
NAS report should be provided to Congress within 18 months of 
the execution of arrangements for the study.
    The Committee is concerned that EPA is not implementing the 
Food Quality Protection Act (FQPA) in a manner which expedites 
the registration of new pesticides, ensures the use of reliable 
data in calculating exposure to pesticide residues, and clearly 
explains the legal and scientific basis for its policies. In 
response to similar concerns expressed by many stakeholders, 
the Vice President on April 8, 1998 directed EPA and the 
Department of Agriculture to work together to implement the law 
according to basic principles of sound science, transparency, 
adequate transition, and consultation with the public and other 
agencies. The Committee endorses and concurs with these 
principles.
    The Committee endorses EPA's current FQPA advisory 
committee as a means of obtaining more stakeholder input into 
implementation, but notes that such an advisory committee is no 
substitute for using public notice and comment to develop many 
of its policies. The Committee expects EPA to initiate notice 
and comment procedures to develop major risk assessment 
policies, methodologies, and data requirements to ensure 
transparency and opportunity for stakeholder input. The use of 
notice and comment need not slow the pace of EPA tolerance 
reassessment decision-making as the Agency can make interim 
decisions based on current reliable information. In addition, 
the Committee directs the EPA to devote sufficient resources to 
increase the pace of registration actions and emergency 
exemptions, and to issue regulations governing emergency 
exemption tolerances which were statutorily required by August 
3, 1997. Further, the Agency is expected to review and issue 
emergency exemption tolerances in a manner which minimizes 
resource demands.
    For the purpose of reducing risk of adverse effects caused 
by misuse of pesticides in homes and public structures, the 
Committee has included funding as requested in the budget 
submission for the Safe Workplaces, Communities, Homes and 
Ecosystems program in the Office of Pesticide Programs.
    The EPA has issued a draft pesticide regulation notice to 
clarify current EPA policy regarding treated articles 
exemption. The Agency decided to issue the guidance in part due 
to unsubstantiated claims made by product manufacturers that 
their products provided health and environmental benefits 
resulting from the presence of anti-microbial agents. Due to 
the number of comments received and the interest generated by 
the proposed guidance, the EPA has extended the comment period 
until the end of June, 1998.
    According to some observers, the proposed guidance could 
result in many thousands of products having to be registered 
with EPA as pesticides. Such products, containing a small 
amount of certain anti-microbial or anti-bacterial chemicals, 
could include dishcloths, writing pens, cutting boards, towels, 
socks, and underwear. The EPA has neither the personnel nor the 
financial resources to cope with such a workload increase. The 
Committee does not believe that the intent of the proposed 
guidance was to require so many additional products to be 
registered. Accordingly, the Committee strongly urges the 
Agency to consider very carefully the myriad comments received 
on the proposed guidance. It is the Committee's hope that the 
final guidance will strike a better balance of protecting 
public health without disrupting commercial activity. In this 
regard, special attention should be paid to small business as 
the Agency crafts the final version of the guidance.
    EPA recently issued two reports to Congress addressing 
mercury emissions, including the ``Mercury Study Report to 
Congress'', issued in December, 1997, and the ``Utility 
Hazardous Air Pollutant (HAP) Report to Congress'', partially 
issued in February and March, 1998. In April, 1998, EPA entered 
into a consent decree whereby the Agency intends to make a 
regulatory determination by November 15, 1998 regarding the 
potential need for supplemental controls on utility mercury 
emissions. Given the current gaps in the scientific 
understanding of mercury, the Committee believes additional 
time is needed prior to EPA finalizing any regulatory 
determinations. Research needs in this regard include 
unresolved issues about mercury speciation, and the transport, 
fate, and effects of elemental mercury. Moreover, currently 
there are no available technologies to significantly control 
mercury emissions from utilities.
    In order to help fill these gaps in the available science, 
EPA is directed to use available funds provided for fiscal year 
1999 to do the following: (1) complete the joint Federal-State 
Lake Superior study on mercury transport; (2) participate with 
the FDA and other government agencies to complete the National 
Health and Nutrition Examination Survey on fish consumption and 
mercury ingestion; and (3) contract with the National Academy 
of Sciences to perform a comprehensive mercury study and 
prepare recommendations on the appropriate level for a mercury 
exposure reference dose. It is the Committee's intent that EPA 
not issue any regulatory determination for mercury emissions 
from utilities until these activities are completed.
    EPA is to be commended for reaching a milestone agreement 
to regulate ``cleaner, cheaper, and smarter'' under the Common 
Sense Initiative (CSI) with the metal finishing industry, state 
environmental agencies, local wastewater treatment authorities, 
and the environmental and labor communities. According to the 
agreement's framework, individual metal finishing companies, 
which are primarily small businesses, are now committing 
voluntarily to achieve continuous environmental improvements 
and operate at ``beyond compliance'' levels in exchange for a 
range of benefits, including regulatory flexibility in certain 
program areas and reduced compliance costs. In order to ensure 
that necessary progress is reached, the Committee urges that 
adequate funds be provided to OPPE for continued industry 
outreach and implementation of key pilot projects under this 
program.
    The Agency has undertaken an effort to reengineer its 
national data systems and integrate numerous reporting reform 
pilot projects under its Reinventing Environmental Information 
(REI) Action Plan. The long-term goal of REI is to make 
significant changes in the way environmental information is 
reported and managed by EPA and state environmental agencies. 
The Agency is encouraged to continue to work aggressively to 
bring coherency to what presently is a complex system of 
overlapping and duplicative information and reporting 
requirements across media programs that imposes significant 
burdens on the U.S. economy, particularly for small business.
    The current REI initiative encompasses several major 
objectives, such as universal electronic reporting and the 
adoption of formal data standards. The Action Plan as currently 
drafted, however, falls short in addressing the needs of small 
business. As EPA seeks to transform the environmental reporting 
system, the Agency should explicitly incorporate specific plans 
to ensure that reductions in reporting burdens are achieved 
where possible through consolidation of reporting as well as 
elimination of duplication and overlap. EPA has analyzed 
reporting burdens through applying Business Process 
Reengineering techniques in projects such as the Regulatory 
Information Inventory Team Evaluation (RIITE). In RIITE, the 
Agency concluded that reporting burdens could be significantly 
minimized while fully preserving current protections to 
environmental and human health. The Agency is requested to 
prepare and submit a report to Congress by March 1, 1999, on 
opportunities within REI to achieve burden reduction for small 
business through consolidation of reporting and elimination of 
duplication and overlap.
    Included in the changes to the budget request proposed by 
the Committee is $3,500,000 for the Environmental Technology 
Commercialization Center (ETC2) in Cleveland, Ohio. These funds 
will permit the Center to enhance the transfer of Federally 
developed environmental technologies to small and minority 
companies in the Great Lakes Region. The Center is expected to 
work in collaboration with at least one Historically Black 
College and University from the region.
    During its public hearings on the fiscal year 1999 budget 
submission, the Committee heard testimony regarding the 
outbreak of acute pulmonary hemorrhage (APH) in infants, a 
serious life-threatening disease. A cluster of cases has been 
identified in Cleveland, Ohio, and has been associated with 
exposure to a toxic mold called stachybotrys, which is widely 
distributed in the United States. In addition, other risk 
factors may be important in outbreaks of APH. The Committee 
recognizes that reducing the number and severity of cases of 
APH requires, among other things, that the environmental 
conditions associated with stachybotrys growth are eliminated 
and that a healthy indoor environment is maintained. EPA can 
play an important role in identifying, measuring, and offering 
advice to eliminate these conditions and thus promote healthy 
indoor environments.
    Within the amounts provided in this account, the Committee 
encourages the Agency to use up to $3,000,000 to further its 
efforts to reduce and/or eliminate the environmental conditions 
that are associated with APH and promote healthy residences. 
The EPA is expected to assist in the investigation and 
prevention of this disease by using newly available molecular 
biological tools that will aid in the detection and 
quantification of airborne toxic molds. These funds should also 
be used for educational efforts; to develop guidelines to clean 
up toxic mold in residences (and develop adequate safety 
precautions for such clean up activities); to eliminate other 
environmental conditions associated with APH disease; and to 
promote research regarding the deleterious health effects of 
mold growth in residences.
    The total maximum daily load (TMDL) protocol set forth in 
section 303 of the Clean Water Act is an attempt to target and 
control all sources of pollution to a watershed. Experts agree 
that the TMDL program offers the best approach to integrate 
information on all sources of pollution into a receiving system 
and determine the most efficient approach to pollution 
reduction. However, states have confronted difficulties in the 
implementation of the program. In order to accelerate the 
progress of this implementation, the Committee directs the 
Agency to work with a Great Lakes State, non-governmental 
organizations, and other relevant stakeholders to demonstrate 
how the total maximum daily load process can be implemented, 
including options for measuring and monitoring non-point 
sources of pollution.
    The Committee is aware that the lower Brazos River provides 
drinking water for some of the fastest growing areas of Texas. 
Through a project at Tarleton State University, the Brazos 
River Authority will continue to monitor the nutrient levels in 
the watershed and calibrate environmental standards to the 
poultry industry in the lower part of the Brazos. The Committee 
encourages EPA to support the efforts of the Brazos River 
Authority and Tarleton State University.
    In order to help ``jump start'' the process of technology 
transfer of various decentralized wastewater treatment options, 
the Committee has included $10,000,000 to conduct a National 
Decentralized Wastewater Demonstration Project at three 
specific sites. The Committee has long supported the 
development of non-centralized technologies to meet the 
statutory health standards for waste treatment, as these 
technologies are often more appropriate and affordable for 
rural and suburban areas of the country. The Committee's 
recommendation includes $1,500,000 for Warren, Vermont; 
$3,000,000 for Block Island/Green Hill Pond, Rhode Island; and 
$5,500,000 for LaPine, Deschutes County, Oregon. The 
communities were determined by outside, independent analysis 
with the goal of providing the greatest technological diversity 
within the available financial resources. Each of these 
communities has already expended considerable resources in the 
development of these projects, and it is the Committee's 
intention that this previous effort be counted towards meeting 
a local cost share for these projects of 25 percent.
    The Committee is encouraged by the apparent progress that 
has been made by the Agency in dealing with the matter of 
potential security risks associated with making risk management 
plan (RMP) data widely available to the public via the 
Internet. The Committee understands that EPA has been working 
closely with the Federal Bureau of Investigation and other 
security experts to develop a system to limit inappropriate 
access to such information, and is informed that such a system 
is expected to be available by the end of calendar year 1998. 
The Committee expects to be kept informed on a monthly basis of 
the progress made in the development and implementation of this 
security protocol, and directs the Agency to include a formal 
protocol proposal as part of the fiscal year 1999 operating 
plan.
    The Committee is extremely concerned about the extinction 
crisis facing endemic species in the State of Hawaii, and 
strongly urges the Agency to work closely with the Office of 
Wildlife Services at the Department of Agriculture and with the 
State of Hawaii on the registration for aerial broadcast of 
rodenticide for conservation purposes. The EPA should look for 
opportunities and work diligently to shorten the time-line for 
such registration.
    The Committee is concerned that Big Bend National Park is 
experiencing a significant decline in air quality and 
visibility which is believed to be caused in part by cross 
border power generation facilities. The Committee is aware that 
EPA and the National Park Service are working with Mexico to 
develop a tracer study to determine the origin of the primary 
pollutants causing these problems, and directs the Agency to 
allocate up to $4,000,000 from within available funds to 
conduct the appropriate studies. The National Park Service is 
expected to contribute at least $1,000,000 to this effort.
    The Committee notes that there is considerable controversy 
regarding the Agency's proposed policy regarding ``plant-
pesticides.'' Specifically, EPA has proposed that the 
``substances that plants produce to protect themselves against 
pests and disease are pesticides under the definition of FIFRA 
section 2 (i.e., if they are ``. . . intended for preventing, 
destroying, repelling, or mitigating any pest . . .'') 
regardless of whether the pesticidal capabilities evolved in 
the plants or were introduced by breeding or through the 
techniques of modern biotechnology.'' (59 Fed. Reg. 60496)
    EPA has proposed to exempt from FIFRA registration 
requirements all plant-pesticides except those developed 
through biotechnology. The scientific community strongly 
objects to the Agency's proposed regulation based only on the 
process by which a resistance substance is produced rather than 
demonstrated risks and toxicity of the substance. The 
scientific and the agriculture communities are also concerned 
that the rule would severely limit the development of new 
disease and pest resistant plant varieties, inhibit 
international acceptance of biotechnology products, and result 
in the continued use of and perhaps an even greater dependence 
on chemical pesticides. EPA officials have attempted to allay 
these concerns by expressing an intention to liberally grant 
exemptions from registration requirements.
    To assure broad, appropriate, and informed comment 
regarding this highly important rulemaking, the Agency is 
directed to publish for public comment a proposal specifying 
its current intentions with respect to this rulemaking. To 
facilitate public comment, the Agency is encouraged to convene 
at least one forum during the public comment period at a 
location convenient to stakeholders, such as farmers and 
academic personnel concerned with production and development of 
specialty crops likely to benefit greatly from biotechnology. 
The Committee expects any rule promulgated with respect to the 
use of biotechnology in the development of enhanced pest or 
disease resistance in plants to be fully consistent with the 
stated policy of the Office of Science and Technology Policy 
entitled ``Planned Introductions of Biotechnology Products into 
the Environment.''
    Congress enacted the ``Edible Oil Regulatory Reform Act,'' 
Public Law 104-55, in 1995, to clarify its intent that federal 
agencies, including EPA, differentiate between animal fats and 
vegetable oils and other toxic oils, including petroleum oil, 
when issuing or enforcing any regulation relating to the 
transportation, discharge, release, emission, or disposal of 
oil under any federal law. Essentially, this law requires the 
EPA Administrator to promulgate a regulation consistent with 
that Act to specifically address facilities that handle animal 
fats and vegetable oils by amending 40 C.F.R. Part 112, which 
relates to response plans for onshore facilities. To be 
consistent, a rule for animal fats and for vegetable oils 
should include, at a minimum, separate definitions, a separate 
category from other oils, and provide requirements that are 
specific to and appropriate for animal fats and vegetable oils. 
Such a change would not avoid regulation but merely adopt a 
much-needed common sense and balanced approach to the EPA's 
regulation of animal fats and vegetable oils.
    The Committee is frustrated that despite the passage of the 
``Edible Oil Regulatory Reform Act of 1995'' and the submittal 
by the animal fat and vegetable oil industry of a detailed 
proposal for regulatory change, the EPA has still not issued 
final rules that implement that Act. Therefore, the Committee 
requests the EPA to expedite finalizing a regulation that is 
consistent with the intent of Congress under the Act for 
facilities that handle animal fats and vegetable oils.
    The Committee recognizes the Agency's efforts in issuing a 
rule regarding the safe handling of halons. This rule, if 
properly enforced, should assure continued significant 
environmental benefits while placing only minimal burdens on 
industry. The Committee is concerned that the rule as written 
does not provide adequate guidance to the fire protection 
industry and others who handle halons as to what operating 
policies should be followed to comply with the rule.
    The Committee strongly encourages the EPA to achieve 
compliance with this rule by requiring that no persons or 
entities may import or dispose of halon-containing equipment 
except by sending it for halon recovery to a manufacturer, fire 
equipment dealer, or recycler operating in accordance with 
ASTM, NFPA, and/or ISO industry standards (as referenced in the 
preamble of the rule, 63 Fed. Reg. 11084, March 5, 1998) and 
that no persons or entities shall dispose of halon a except by 
sending it for halon recycling to a recycler operating in 
accordance with the ASTM, NFPA, and/or ISO industry standards.
    The Committee is concerned that the approaching phaseout of 
methyl bromide will have a significant negative impact on 
American agriculture. The current 2001 phaseout date for the 
United States will place American farmers at a distinct 
competitive disadvantage with foreign growers who will continue 
to have access to the substance as late as 2015. Compounding 
this problem is the fact that there is no viable alternative 
for methyl bromide available to growers. The Committee strongly 
urges the Environmental Protection Agency to seek the input of 
affected U.S. agriculture and trade industries in order to 
prevent any inequity between American and foreign growers 
resulting from the impending phaseout, and to ensure that U.S. 
growers and industries are not left without a viable 
alternative.
    The Environmental Protection Agency's ``Interim Guidance 
For Investigating Title VI Complaints Challenging Permits,'' as 
released on February 5, 1998, was an effort by EPA to move 
beyond a case-by-case approach to addressing state permit 
program compliance with Title VI of the Civil Rights Act 
through the administrative petition process. The Environmental 
Council of the States (ECOS), the National Association of 
Counties (NACO), the National Association of Black County 
Officials (NABCO), 14 attorneys general, the U.S. Conference of 
Mayors, as well as numerous local governments have requested 
that EPA either suspend or withdraw the interim guidance 
because of their concerns that the interim guidance conflicts 
with current state and local land use policies, ``Brownfields'' 
redevelopment and urban revitalization efforts, and initiatives 
to promote sustainable economic development.
    It is the Committee's intent to provide an opportunity 
which allows the Agency to address concerns raised in comments 
submitted by stakeholders about the interim guidance, while 
simultaneously encouraging states to proceed with the 
development and implementation of procedures of address 
environmental equity issues. Therefore, the Committee has 
included bill language that allows the EPA to continue its 
efforts to address the concerns of those organizations 
mentioned above as well as issue its final guidelines. It is 
also the intent of the Committee to have EPA continue to 
process the 15 pending complaints under the interim guidance. 
EPA, on the other hand, is prohibited from implementing or 
administering the interim guidance for complaints filed after 
enactment. The Committee feels this is a balanced approach that 
addresses both the concerns of EPA while providing ample 
opportunity for stakeholders' concerns to be addressed.
    The Committee encourages processes which enhance community 
participation in the permitting process, an acceptable 
definition of what constitutes a ``dispute impact'', and 
methodologies to evaluate cumulative exposures which must be 
developed. Such processes, definitions, standards and 
methodologies should be precise, based on sound, peer-reviewed 
science and provide a high degree of certainty in decision-
making outcomes. States that have adopted and are appropriately 
implementing environmental equity programs, practices or 
policies that are reasonably consistent with those promulgated 
by the Agency should ensure their compliance with title VI and 
protect their environmental permitting decisions from 
administrative petitions.
    The Committee supports EPA's ongoing efforts to reduce 
vehicular emissions and improve air quality. The Committee 
expects funding to be continued for the National Center for 
Vehicle Emissions Control and Safety's On-Board Diagnostic 
Research Center.

                      OFFICE OF INSPECTOR GENERAL

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation\1\....................       $31,154,000
Fiscal year 1998 appropriation........................        28,501,000
Fiscal year 1999 budget request.......................        31,154,000
Comparison with fiscal year 1998 appropriation........        +2,653,000
Comparison with fiscal year 1999 budget request.......                 0
                                                                        
\1\ Totals do not include transfers of funds 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 1999, the Committee recommends a total 
appropriation of $43,391,000 for the Office of Inspector 
General, an increase of $3,249,000 above last year's funding 
level and the same as the budget request. Of the amount 
provided, $12,237,000 shall be derived by transfer from the 
Hazardous Substance Superfund account. All funds within this 
account are to be considered annual monies.
    Bill language has been included which would make balances 
available through September 30, 2007 for the purpose of 
liquidating obligations made during fiscal years 1999 and 2000. 
This change extends the time available to the Agency to perform 
necessary accounting requirements and properly ``close the 
books'' on prior year obligations.

                        BUILDINGS AND FACILITIES

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $60,948,000
Fiscal year 1998 appropriation........................       109,420,000
Fiscal year 1999 budget request.......................        52,948,000
Comparison with fiscal year 1998 appropriation........       -48,472,000
Comparison with fiscal year 1999 budget request.......        +8,000,000
                                                                        

    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 $60,948,000 for Buildings and 
Facilities, a decrease of $48,472,000 below last year's funding 
level and $8,000,000 above the budget request. This 
recommendation provides $40,000,000 for continued construction 
of the consolidated research center at Research Triangle Park, 
North Carolina, as well as the budget request of $20,948,000 
for necessary maintenance and repair costs at Agency facilities 
and the ongoing renovation of EPA's new headquarters.
    The Committee's proposal to provide $40,000,000 for RTP 
construction--an increase of $8,000,000 above the budget 
request--will leave just $32,700,000 of the authorized maximum 
cost of this necessary facility remaining to be appropriated. 
The Committee has not provided an advance appropriation for 
this account as recommended in the budget submission.
    The Committee notes that cost analyses have indicated that 
significant savings could be realized from moving EPA's 
Supercomputer from Bay City, Michigan to the National Computing 
Center in Research Triangle Park, North Carolina. The Committee 
expects the Agency to finalize a decision regarding this move 
as soon as possible.

                     HAZARDOUS SUBSTANCE SUPERFUND

                     (INCLUDING TRANSFERS OF FUNDS)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $1,500,000,000
Fiscal year 1998 appropriation........................     1,500,000,000
Fiscal year 1999 budget request.......................     2,092,745,000
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 budget request.......      -592,745,000
                                                                        

    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 1999, $1,500,000,000 has been recommended 
by the Committee, the same as last year's funding level, and a 
decrease of $592,745,000 from the amount included in the budget 
request. Bill language has been included which transfers 
$12,237,000 from this account to the Office of Inspector 
General and $40,000,000 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:
    $1,001,200,000 for Superfund response/cleanup actions. This 
level of funding includes $75,000,000 for continued Brownfields 
activities as outlined below.
    $155,000,000, the budget request, for enforcement 
activities.
    $131,000,000 for management and support. This 
recommendation includes a transfer of $12,237,000 to the Office 
of Inspector General. Bill language is included which provides 
for this transfer.
    $40,000,000 for research and development activities, to be 
transferred to Science and Technology as proposed in the budget 
request.
    $60,000,000 for the National Institute of Environmental 
Health Sciences (NIEHS), including $37,000,000 for research 
activities and $23,000,000 for worker training. This is an 
increase of $11,500,000 above the budget request.
    $74,000,000 for the Agency for Toxic Substances and Disease 
Registry (ATSDR), the same as last year's level and an increase 
of $10,000,000 above the budget request.
    $29,000,000 for the Department of Justice. The Department's 
legal action associated with the Superfund program has in past 
years generated 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.
    $9,800,000 for all other necessary, reimbursable 
interagency activities, including $650,000 for OSHA, $1,100,000 
for FEMA, $2,400,000 for NOAA, $4,800,000 for the Coast Guard, 
and $850,000 for the Department of the Interior.
    Through adoption of this appropriation, the Committee 
signals its continued strong support for an active and 
aggressive Superfund site response action/cleanup effort, 
including strong and bi-partisan support for the Brownfields 
program as an integral part of the overall program.
    Further, the Committee supports 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 $10,000,000 
over the budget request in part so that the large backlog of 
important and necessary health studies planned for both federal 
and non-federal sites can continue to be addressed. The 
Committee requests ATSDR to provide timely updates of its 
progress in this regard. Again this year, the Committee directs 
that up to $4,000,000 of the funds provided to the ATSDR be 
used for minority health professions, and up to $2,500,000 is 
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 
the Agency continue to fund the hazardous substance research 
centers at a level no less than the 1998 level.
    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 directed to 
continue to utilize this improved system.
    Again this year, the Committee has not provided an 
additional $650,000,000 for Superfund site cleanup as requested 
in the budget submission. While the Committee's annual funding 
allocation clearly does not provide the financial resources 
necessary to meet this request, a more fundamental problem lies 
with the fact that, once again this year, the need for these 
funds has not been justified satisfactorily. Indeed, rather 
than shedding light on cleanup priorities and how additional 
funds might be used, recent press statements and the release of 
a list of ``171 sites'' by EPA that would receive some cleanup 
action with these additional funds only adds confusion to the 
issue.
    The list in fact contains numerous errors, including the 
listing of a site which has already completed construction, 
several sites that are Federal sites and thus not eligible for 
Superfund financing, as many as 67 sites for which there is 
still no Record of Decision, and thus not ready for 
construction, and even one site which is not even on the 
Superfund list. Perhaps more important, the Congress has been 
asked to appropriate this large additional sum even though 
fundamental information about each specific site--such as 
whether it is a ``Fund lead'' or ``PRP'' site--has yet to be 
provided by the Agency. Given that approximately 70 percent of 
all sites are considered ``PRP'' (potentially responsible 
party) sites and therefore not in need of financing through the 
Superfund appropriation, the Committee finds it difficult to 
provide such resources without such basic information. In this 
context it is also relevant to note that the General Accounting 
Office reported to the Congress last year that the funding 
requirements for the list of sites included in last year's 
additional request were grossly overstated.
    EPA clearly has not made a case for additional funding, and 
the lists and statements issued by the Agency appear intended 
only to build political support for the request. They 
unfortunately do not provide any analytical or programmatic 
information that will be helpful to the Congress for its budget 
deliberations or the public for understanding the Superfund 
issues.
    The Committee has included $75,000,000 within the response 
action/cleanup activity for Brownfields programs. This funding 
level continues the Committee's historically strong support for 
efforts to redevelop abandoned or underutilized industrial or 
commercial properties where actual or potential environmental 
contamination has complicated redevelopment efforts. 
Nevertheless, the Committee is very concerned that many 
activities funded by EPA in the past using the Brownfields 
appropriation have little or nothing to do with cleanup and 
redevelopment of Brownfields sites. Accordingly, the Committee 
has included language in the bill which confines EPA's 
activities to those the Committee believes are most necessary 
and appropriate.
    Both the General Accounting Office and EPA's Inspector 
General have issued recent reports that criticize how EPA has 
used Brownfields money. The GAO, in fact, notes that EPA's own 
General Counsel has cautioned program offices that numerous 
Brownfields grants made to non-governmental organizations for 
such things as case studies, conferences and workshops, and 
reports about the Brownfields problem, rest on dubious legal 
grounds.
    The Committee's concern with these problems, coupled with 
the concern over the potential drain on Superfund resources 
that the non-Superfund Brownfields program may cause, has led 
the Committee to include bill language which specifically 
provides that Brownfields funds may be used only for grants to 
states, tribes, and local governments for site assessments, the 
development of Brownfields and voluntary cleanup programs, and 
related EPA personnel and administrative costs. The Committee 
directs the Agency to report to Congress by January 1, 1999, 
and annually thereafter, regarding the number of Brownfields 
sites that have been assessed, the number of cleanup programs 
that are developed, and the specific and detailed 
administrative and personnel costs associated with this 
program.
    In acknowledgement of the universal nature of the 
Brownfields problem, the Committee has increased that portion 
of the Hazardous Substance Superfund account derived from 
general revenues by the same amount as is allocated for the 
Brownfields program.
    In its report accompanying the fiscal year 1998 funding 
measure, the conferees endorsed language contained earlier in 
the House report regarding the Agency's implementation of a 
fixed-priced, at risk contracting proposal for the cleanup of 
the Carolina Transformer Site in North Carolina. It was and 
remains the Committee's belief that this site provides an 
excellent location for the EPA to implement an innovative and 
highly cost effective process which should result in enhanced 
Superfund management. Despite this repeated language, however, 
it has become apparent through numerous changes of planned 
dates for ``Requests for Proposal'' on this project that the 
Agency is not taking seriously this specific direction of the 
Congress. The Committee thus wants to reiterate in the 
strongest terms possible that the Agency is directed to proceed 
to accomplish this task at the earliest possible date, and is 
further directed to report to the Committee on a monthly basis 
regarding the status of this matter.
    During fiscal year 1998, the Agency was asked to notify the 
Committees on Appropriations within 72 hours of the Agency's 
undertaking an emergency response at non-NPL sites that is 
expected to exceed $5,000,000 in total costs. The Committee 
requests that EPA continue to provide such reports through 
fiscal year 1999.
    The Committee wishes to acknowledge the progress made by 
the Agency in its conduct of close-out audits of Superfund 
contracts. The GAO has recently reported that substantial 
recoveries have already been made during fiscal year 1998, and 
that much more is anticipated. Such recoveries greatly enhance 
available cleanup resources, and the Committee continues to 
encourage EPA to remain aggressive in this regard.
    In June 1996, EPA announced a policy to direct interest to 
accrue on site-specific special accounts. The accrued interest 
and the account itself would be used solely for that site's 
cleanup. The Committee applauded that past action by EPA but 
now notes with concern that, despite Congressional urging to 
the contrary, the apparent movement of this policy has now 
lagged. Thus, these necessary cleanups, which could be done 
expeditiously, still await disbursement of the funds to parties 
who would perform the appropriate work.
    The Committee therefore directs that these special account 
funds dedicated to a site-specific cleanup, including any 
interest earned, be disbursed to the parties undertaking 
response actions at the facility to fund such response efforts 
as they are undertaken. EPA is further directed, upon petition 
of the parties undertaking the response action, to enter into 
an agreement governing the disbursement of these funds 
beginning no later than 90 days after receipt of a petition 
from the parties undertaking the response action. The Committee 
recognizes that the Agency would likely be entitled to a 
reasonable retention from the funds disbursed for response 
costs already incurred by the government and the State and 
would also be permitted to retain up to ten percent of the 
funds disbursed for payment of United States and State future 
response costs.
    It has come to the Committee's attention that, despite 
Congressional direction to the contrary, the Agency continues 
to move toward 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 applied 
cleanup requirements to NRC licensed facilities or placed sites 
which are being remediated under NRC procedures in the NPL. The 
Committee remains 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, contrary to the requirements of Executive Order 
12866, and not a good use of public or private funds. EPA is 
directed to continue its long-standing policy on this matter 
with the NRC and is further directed to spend no funds to 
enforce cleanup requirements at sites being remediated under 
regulatory requirements enforced through the NRC licensing 
procedure.
    The Committee commends the NIEHS for their enhanced efforts 
to make results of their research available to the Superfund 
regional site managers, and further commends the NIEHS and the 
EPA on their improving coordination and collaboration of the 
research activities between the two agencies. The Committee 
also acknowledges the continued worker training activities that 
the NIEHS provides the Superfund program and its active support 
of the Brownfields program.
    The Committee urges the EPA and ATSDR to take the necessary 
and appropriate action to resolve any outstanding issues 
relating to the fire of August 1992 at the Quality Printed 
Circuits Inc. plant in South Phoenix, Arizona. The Committee 
recognizes the efforts to date of the EPA and ATSDR and 
requests that the EPA and ATSDR take any actions they deem 
necessary to protect the health and safety of the residents 
affected by the fire, including ventilation duct cleaning and 
medical diagnostic services.
    Finally, the Committee is aware of discussions regarding 
the Agriculture Street, New Orleans landfill Superfund site, 
specifically concerning the potential use of authorized buyout 
authority. Although the Committee has hesitated in the past to 
insist on specific actions at specific NPL sites, it appears 
there may be few other alternatives for this site than the use 
of buyout authority. The Agency is urged in the strongest terms 
possible to move aggressively to resolve this matter and to 
give every consideration to all possible avenues of resolution, 
including the use of buyout and relocation.

              LEAKING UNDERGROUND STORAGE TANK TRUST FUND

                     (INCLUDING TRANSFER OF FUNDS)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $70,000,000
Fiscal year 1998 appropriation........................        65,000,000
Fiscal year 1999 budget request.......................        71,210,000
Comparison with fiscal year 1998 appropriation........        +5,000,000
Comparison with fiscal year 1999 budget request.......        -1,210,000
                                                                        

    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 Trust Fund 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 again this year, the Office of 
Inspector General will receive no funding by transfer from the 
trust fund through this appropriation.
    For fiscal year 1999, the Committee has provided 
$70,000,000, an increase of $5,000,000 above last year's 
appropriated level and a decrease of $1,210,000 from the budget 
request. Bill language has not been included again this year 
which limits administrative expenses during the fiscal year.
    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.
    Bill language has been included which will hereafter allow 
the Administrator of EPA to enter into LUST assistance 
agreements with Federally recognized tribes.

                           OIL SPILL RESPONSE

                     (INCLUDING TRANSFER OF FUNDS)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $15,000,000
Fiscal year 1998 appropriation........................        15,000,000
Fiscal year 1999 budget request.......................        17,321,400
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 budget request.......        -2,321,400
                                                                        

    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 1999, 
the same as that provided last fiscal year and a decrease of 
$2,321,400 from the budget request. Bill language is not 
included which limits administrative expenses.

                   STATE AND TRIBAL ASSISTANCE GRANTS

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $3,233,132,000
Fiscal year 1998 appropriation........................     3,213,125,000
Fiscal year 1999 budget request.......................     2,902,657,000
Comparison with fiscal year 1998 appropriation........       +20,007,000
Comparison with fiscal year 1999 budget request.......      +330,475,000
                                                                        

    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 is the 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 also funds the Safe Drinking Water SRF 
as well as various grant programs to improve both air and water 
quality, including non-point source grants under Section 319 of 
the Federal Water Pollution Control Act, Public Water System 
Supervision grants, Section 106 water quality grants, and Clean 
Air Act Section 105/103 air and monitoring grants to the 
states.
    For fiscal year 1999, the Committee recommends a total of 
$3,233,132,000, an increase of $20,007,000 above the current 
fiscal year spending level, and $330,475,000 above the level 
proposed in the budget request.
    The Committee's recommendation includes the following 
program level:
    $1,250,000,000 for Clean Water State Revolving Funds.
    $775,000,000 for Safe Drinking Water State Revolving Funds.
    $884,657,000 for state and tribal program/categorical 
grants.
    $55,000,000 for high priority U.S./Mexico border projects.
    $15,000,000, the budget request, for Alaska rural and 
Native Villages.
    $253,475,000 for special needs water and wastewater grants, 
including:
          1. $23,000,000 for Boston Harbor wastewater needs.
          2. $3,000,000 for continued wastewater needs in 
        Bristol County, Mass.
          3. $7,500,000 for New Orleans wastewater needs.
          4. $13,000,000 to implement combined sewer overflow 
        improvements in Richmond ($6,500,000) and Lynchburg 
        ($6,500,000), Va.
          5. $10,000,000 for continuation of the Rouge River 
        National Wet Weather Demonstration project.
          6. $3,500,000 for wastewater, sewer overflow, and 
        water system needs of the Westfall Municipal Sewage 
        Authority ($2,000,000) and Jefferson Township, 
        Lackawanna County ($1,500,000), Penn.
          7. $5,000,000 for the Olivenhein, Ca. water 
        infrastructure project.
          8. $3,000,000 for completion of the export waste 
        pipeline project to protect Lake Tahoe.
          9. $10,00,000 for water system improvements at Lake 
        Hopatcong, New Jersey.
          10. $15,000,000 for continued planning and 
        implementation of a storm water abatement system in the 
        Doan Brook Watershed Area, Ohio.
          11. $8,500,000 for wastewater infrastructure needs 
        for Jefferson Parish ($3,000,000), Baton Rouge 
        ($2,000,000), and Grand Isle ($3,500,000), La.
          12. $10,000,000 for alternative water source 
        development for the Southwest Florida, St. John's 
        River, Northwest Florida, and South Florida Water 
        Management Districts.
          13. $2,500,000 for the Grand Rapids, Michigan 
        combined sewer overflow project.
          14. $1,500,000 for the Miami-Dade County sanitary 
        sewer overflow demonstration project.
          15. $3,250,000 for water system and wastewater 
        infrastructure requirements for the Somerset Township 
        Municipal Authority ($1,250,000) and for the Johnstown-
        Cambria County Airport ($2,000,000), Penn.
          16. $1,500,000 for ongoing work at the Geysers 
        Recharge Project in No. California.
          17. $10,000,000 for continued clean water 
        improvements of Onandaga Lake.
          18. $8,100,000 for wastewater and water system 
        improvement needs for the Centerville/Cumberland Valley 
        Township ($300,000); the Houtzdale Borough Municipal 
        Authority ($200,000); the Northern Blair Regional Sewer 
        Authority ($800,000); the Richfield Borough Joint 
        Municipal Authority ($400,000); Chambersburgh Borough 
        ($2,500,000); the Letterkenny Reuse Authority 
        ($600,000); the Lewistown Municipal Water Authority 
        ($800,000); and the Hollidaysburg Borough ($2,500,000), 
        Pennsylvania.
          19. $10,000,000 for water supply and wastewater needs 
        for the City of Paintsville ($2,100,000); the Pike 
        County, Mountain Water District ($2,500,000); the City 
        of Fleming Neon ($2,000,000); the City of Salyersville 
        ($500,000); Wolfe County ($2,000,000); and the City of 
        Booneville ($900,000), Kentucky.
          20. $3,000,000 for wastewater infrastructure 
        improvements at Artesia, New Mexico.
          21. $3,000,000 for wastewater improvements at Florida 
        City, Fl.
          22. $3,500,000 for the basin stormwater retention and 
        reuse project at Big Haynes Creek, Ga.
          23. $6,500,000 for the tunnel and reservoir project 
        (TARP) of the Metropolitan Water Reclamation District 
        in Chicago, Illinois.
          24. $6,000,000 for sewer and stormwater 
        infrastructure needs at Bozeman, Mt.
          25. $8,000,000 for the Mille Lacs regional wastewater 
        treatment facility, Minn.
          26. $3,000,000 for the Meramac River, Mo. enhancement 
        and wetlands protection project.
          27. $2,800,000 for wastewater, sewer and water 
        infrastructure needs in Lovelock ($1,500,000) and the 
        Moapa Valley Water District ($1,300,000), Nevada.
          28. $5,000,000 for combined sewer overflow 
        requirements of the Passaic Valley Sewerage Commission, 
        NJ.
          29. $15,000,000 for water, wastewater, and system 
        infrastructure development and improvements for the 
        Yucaipa Valley Water District ($5,000,000); the Lower 
        Owens River Project in Inyo County ($3,500,000); the 
        City of Barstow ($3,000,000); and the San Timoteo Creek 
        environmental restoration project in Loma Linda 
        ($2,500,000), Ca.
          30. $2,000,000 for water reuse system improvements 
        for Riverton, Utah.
          31. $2,500,000 for water supply needs for 
        Brownsville, Texas.
          32. $2,000,000 for drinking water infrastructure 
        needs for White Oak, Wolfe Branch Utility District 
        ($750,000), and for Frankfort, Potter Chapel, and the 
        Island Ford area, Sunbright Utility District 
        ($1,250,000), Tenn.
          33. $5,000,000 for sewage treatment facilities to 
        reduce nitrogen flowing into the Susquehanna River and 
        ultimately into the Chesapeake Bay.
          34. $325,000 for the reservoir restoration project in 
        Albemarle City, North Carolina.
          35. $5,000,000 for drinking water infrastructure 
        needs in the New York City watershed.
          36. $1,500,000 for the water runoff and sewer 
        treatment program of the San Diego Coastal Low Flow 
        Storm Diversion Project.
          37. $3,000,000 for wastewater infrastructure 
        improvements for Springettsbury Township/City of York 
        ($2,500,000) and Delta Borough ($500,000), Pa.
          38. $4,000,000 for wastewater infrastructure 
        improvements for the City of San Diego, Ca.
          39. $2,000,000 for wastewater infrastructure 
        improvements for the City of Port Huron, Michigan.
          40. $2,000,000 for wastewater facilities and 
        improvements in Essex County, Mass.
          41. $10,000 for wastewater and sewer infrastructure 
        needs for DeSoto County ($5,000,000) and the City of 
        Jackson ($5,000,000), Miss.
          42. $2,000,000 for the Metropolitan Milwaukee 
        Sewerage District interceptor system.
          43. $1,250,000 for water supply needs of the Lake 
        Marion Regional Water Agency, South Carolina.
          44. $1,000,000 for a groundwater replenishment system 
        for Orange County, California.
          45. $1,500,000 for the Connecticut River, Mass, and 
        Conn. combined sewer overflow project.
          46. $750,000 for the interceptor collection project 
        at Avondale, Arizona.
          47. $1,000,000 for the MERTS wastewater treatment 
        facility at South Tongue Point, Oregon.
          48. $1,500,000 for the Sonoma County Water Agency, 
        Russian River Restoration project.
          49. $1,000,000 for the combined sewer overflow 
        project for Sacramento, California.
    For fiscal year 1999, the Committee again expects the 
Agency to work closely with the governments or entities 
receiving such special needs grants to be flexible in the 
application of the historical cost share requirements of this 
program.
    The Committee has provided the full budget request for 
state and tribal program assistance/categorical grants for all 
activities except air--where an increase of $10,000,000 is 
provided for section 105/103 air grants and monitoring and data 
collection. As noted elsewhere in this Report, the ``Clean 
Water Action Plan'' is provided full funding including 
$200,000,000 for section 319 non-point source pollution grants 
and $115,530,000 for section 106 water quality grants.
    This recommendation includes categorical grants for the 
following programs: (1) air and radiation--state, local and 
tribal assistance, including particulate matter monitoring and 
data collection activities; (2) enforcement and compliance 
assurance; (3) field programs and external activities; (4) 
environmental partnerships; (5) lead grants; (6) pollution 
prevention leadership; (7) RCRA partnerships; (8) underground 
storage tank partnerships; (9) PWSS program grants; (10) 
underground injection control grants; (11) wetlands program 
grants; (12) section 319 non-point source pollution grants, 
including programs formerly eligible under the Clean lakes 
program; (13) section 106 control agency resource supplemental 
grants; (14) water quality cooperative agreements and; (15) 
Indian general assistance program grants.
    As was the case in previous fiscal years, 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.
    Within the amount provided for the U.S./Mexico Border 
Projects, $1,000,000 is for the U.S./Mexico Foundation for 
Science.
    The Committee recognizes the potential benefit of the EPA's 
Border XXI Program, but is concerned over the Agency's apparent 
lack of communication and cooperation with the governors of the 
four states who share a border with Mexico. The Agency is thus 
directed to enhance its accountability to, and cooperation with 
these four states. EPA is strongly urged to seek cooperation 
with and concurrence from each state's governor prior to the 
expenditure of any border funds within that state.
    As in fiscal year 1998, the Committee has included bill 
language which allows the states to cross-collateralize their 
clean water and safe drinking water state revolving funds. This 
language makes explicit that in fiscal year 1999 and 
thereafter, funds appropriated to the SRFs may be used as 
common security in a bond issue for both SRFs, ensuring maximum 
opportunity for leveraging these funds.
    Bill language has also been included which, (1) provides 
that fiscal year 1997 funds for Texas colonias may be matched 
by 20 percent in state funds, and used for water as well as 
wastewater projects, (2) clarifies that funds under this 
heading may be used to support the development and 
implementation of waste management programs in Tribal areas, 
and (3) clarifies the intent of section 23(a) of the Federal 
Insecticide, Fungicide and Rodenticide Act.
    In the Report accompanying the House's fiscal year 1998 
bill, the Agency was directed to uphold all construction grant 
project costs that are appropriately documented. This language 
was included to address the continuing problem of audit 
decisions that reverse earlier grant project eligibilities 
because of re-evaluations of the earlier approvals. These 
actions result in the grantee being required to repay, often 
with interest, the disallowed project costs at great expense to 
the local communities involved with the original grants. The 
directive makes it clear that where documentation does not 
exist demonstrating the approval of the grant funds or where 
the original decision was an abuse of law or otherwise, that 
EPA should uphold the original decision to award funds for the 
project.
    The Committee is informed that while the Agency agrees with 
this directive as a matter of policy, it has essentially not 
been followed because it is interpreted as being non-binding. 
The Committee is not aware that statutory language is necessary 
to implement this directive, nor is it aware that the Agency 
has requested such language. Moreover, the Committee has not 
been informed by the Agency that they object to this directive; 
indeed, the impression has been given that the Committee's 
directive represented the common sense and correct manner to 
resolve the situation. The Committee strongly urges the Agency 
to once again review the language as contained in last year's 
Committee Report and take immediate steps to implement that 
directive. Should the Agency determine not to implement this 
directive, the Committee expects to be so notified no later 
than October 15, 1998.
    The Committee notes that language is included in the 
``Science and Technology'' portion of this report urging the 
EPA to work closely with the National Research Council and the 
states in establishing a particulate matter monitoring program 
that will fully integrate and complement the research needs 
identified in the PM Research Plans created by the NRC/NAS and 
put into effect by the Agency.
    For several years, and with EPA's written approval, some 
states have been collecting a small administrative fee to help 
cover the cost of administering and managing their State Clean 
Water Revolving Loan Funds. These fees were included as 
principal in loans made by these states to eligible borrowers. 
However, EPA recently and abruptly changed its administration 
of a provision in title VI of the Clean Water Act and ordered 
the collection of such fees discontinued. The Committee is 
concerned about the impact, if any, of this sudden and 
unexpected change, and directs the Agency to work with the 
authorizing committees of Congress to address this situation at 
the earliest possible date.
    The Committee recognizes and is concerned about the 
enormous wastewater needs of Southern and Eastern Kentucky, and 
believes every effort should be made to bring the thousands of 
households in this region into compliance with state and 
federal guidelines. Because failing septic systems and straight 
pipes deliver hundreds of thousands of gallons of raw sewage 
into rivers and streams every day, there continues to be 
serious health hazards in this area, putting residents at risk, 
and preventing meaningful commercial or industrial development. 
The Committee therefore urges EPA to work closely with the U.S. 
Army Corps of Engineers in developing and implementing 
innovative wastewater treatment systems which address these 
conditions, and to provide such sums as may be necessary 
towards implementation.

                   Executive Office of the President

                OFFICE OF SCIENCE AND TECHNOLOGY POLICY

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................        $5,026,000
Fiscal year 1998 appropriation........................         4,932,000
Fiscal year 1999 budget request.......................         5,026,000
Comparison with fiscal year 1998 appropriation........           +94,000
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 $5,026,000 for 
fiscal year 1999, an increase of $94,000 from the fiscal year 
1998 appropriation and the same amount as the President's 
budget request.

  COUNCIL ON ENVIRONMENTAL QUALITY AND OFFICE OF ENVIRONMENTAL QUALITY

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................        $2,675,000
Fiscal year 1998 appropriation........................         2,500,000
Fiscal year 1999 budget request.......................         3,020,000
Comparison with fiscal year 1998 appropriation........          +175,000
Comparison with fiscal year 1999 budget request.......          -345,000
                                                                        

    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 
$2,675,000 for the CEQ and OEQ, an increase of $175,000 above 
last year's spending level and a decrease of $345,000 from the 
budget request. With the increase above the 1998 level, $75,000 
is for cost of living expenses and $100,000 is for work 
specifically on the NEPA Reinvention project. The Committee 
expects the Council to strike a balance when allocating 
resources so as to adequately fund Congressional priorities, 
such as the Reinvention project, as well as the 
Administration's priorities, such as the American Heritage 
Rivers program.

                 Federal Deposit Insurance Corporation

                      office of inspector general

                          (Transfer of Funds)

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $34,666,000
Fiscal year 1998 appropriation........................        34,365,000
Fiscal year 1999 budget request.......................        34,666,000
Comparison with fiscal year 1998 appropriation........          +301,000
Comparison with fiscal year 1999 request..............                 0
                                                                        

    Funding for the Office of Inspector General at the Federal 
Deposit Insurance Corporation is provided pursuant to 31 U.S.C. 
1105(a)(25), which requires a separate appropriation account 
for appropriations for each Officer of Inspector General of an 
establishment defined under section 11(2) of the Inspector 
General Act of 1978.
    The Committee recommendation, the same as the budget 
request, provides for the transfer of $34,666,000 from the Bank 
Insurance Fund, the Savings Association Insurance Fund, and the 
FSLIC resolution Fund to finance the Office of Inspector 
General for fiscal year 1999.

                  Federal Emergency Management Agency

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $817,282,000
Fiscal year 1998 appropriation........................  \1\ 2,429,958,00
                                                                       0
Fiscal year 1999 budget request.......................  \2\ 1,469,878,00
                                                                       0
Comparison with fiscal year 1998 appropriation........    -1,612,676,000
Comparison with fiscal year 1999 budget request.......     -652,596,000 
                                                                        
\1\ Includes $1,600,000,000 Supplemental Appropriations.                
\2\ Includes $626,296,000 in Contingent Emergency Funding.              

    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 1999, the Committee recommends 
$1,068,578,000, which represents a decrease of $1,361,380,000 
from the fiscal year 1998 appropriations and a decrease of 
$401,300,000 from the 1999 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 1999 recommendation.......................      $307,745,000
Fiscal year 1998 appropriation........................  \1\ 1,920,000,00
                                                                       0
Fiscal year 1999 budget request.......................   \2\ 934,041,000
Comparison with fiscal year 1998 appropriation........    -1,612,255,000
Comparison with fiscal year 1999 budget request.......     -626,296,000 
                                                                        
\1\ Includes $1,600,000,000 in Supplemental Appropriations.             
\2\ Includes $626,296,000 in Contingent Emergency Funding.              

    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 1999, the Committee recommends $307,745,000 
for disaster relief, a decrease of $1,612,255,000 below the 
fiscal year 1998 level and a decrease of $626,296,000 from the 
budget request. No contingency funding is provided.
    The Committee directs FEMA to complete within 90 days after 
FEMA's receipt of the Watsonville Community Hospital Project 
Reports, all inspections, audits, and accounting concomitant to 
the close out of the grant, and to release and pay amounts of 
retained grant funds which are deemed appropriate.
    The Committee is aware of a problem dating to the Loma 
Prieta earthquake when Fire Station #1 in the City of Tracy, 
California was damaged and rendered unusable. A subsequent 
application for disaster relief was denied and the City of 
Tracy has recently submitted a Hazard Mitigation Grant proposal 
to restore the building to service as a functioning fire 
station. The Committee urges FEMA to give this proposal serious 
consideration.
    The Committee is encouraged to learn that FEMA continues to 
work with the Whittier Union High School District to address 
differences with regard to pending seismic related repairs and 
hazard mitigation. The Committee directs FEMA to continue this 
dialog and report to the Committee on Appropriations by 
September 1, 1998 on the status of discussions.
    The Committee agrees with the basic premise of pre-disaster 
mitigation but has concerns that FEMA may not be using the 
funds to address areas where the risk of loss and the amount of 
potential loss are greatest. The Committee is concerned that 
FEMA may be spreading resources too thin is its effort to gain 
the widest possible support for the program. There does not 
appear to be any particular risk analysis which supports FEMA's 
effort to fund one pilot project in each of the 50 states. FEMA 
has indicated that their selection process relies heavily on 
the priorities which each state assigns to the proposed 
projects in that state. But nowhere does there appear to be an 
analysis that says the number one priority of one state is of 
greater benefit that the number three priority of another 
state. The Committee believes that FEMA should re-evaluate its 
selection process to ensure that the most beneficial projects 
are funded, regardless of where they are located. To that end, 
the Committee does not believe a pre-disaster mitigation 
project in each of the 50 states should of necessity be one of 
the FEMA's goals.
    The Committee directs FEMA to continue working with 
officials of Lackawanna County, Pennsylvania and the 
Pennsylvania Emergency Management Agency to resolve the issue 
of reconstructing East Mountain Road which was severely damaged 
during the winter flood of January 1996. The Committee has 
learned that FEMA expects the county will revise its Hazard 
Mitigation Grant project application to fit within the 
eligibility criteria of the program. The Committee urges FEMA 
to take steps to resolve this issue expeditiously.
    The Committee strongly supports the application of San 
Bernardino Valley College for a Hazard Mitigation Grant. Due to 
the proximity of the campus to the San Jacinto fault zone and 
aging campus structures, funding for on-campus mitigation 
activities is critical to prevent any potential risk to life.
    The Committee continues to be concerned that Santa Marta 
Hospital has not been admitted to the Seismic Hazard Mitigation 
Program for Hospitals. Santa Marta Hospital remains a vital 
element to the severely disadvantaged community of East Los 
Angeles to which it provides critical health care services to 
this largely low-income and minority population. Because of the 
distinguishing circumstances of Santa Marta Hospital's mission 
and service, the Committee expects FEMA to give favorable 
consideration to the Hospital's appeal for participation in 
this mitigation program.
    The Committee is concerned that FEMA has failed to apply 
the proper code or standard for purposes of determining 
reimbursable amounts under Section 406 of the Stafford Act with 
respect to certain institutions of higher learning damaged as a 
result of the 1994 Northridge earthquake. The Committee wishes 
to restate its view that, in the case of public institutions 
which are subject to building codes that require changes in the 
pre-disaster construction of a damaged facility, FEMA shall 
recognize such codes and standards for purposes of determining 
reimbursement when such institution has provided credible 
evidence that all requirements for recognition of such codes, 
under the applicable regulations, have been satisfied. The 
Committee wishes further to state that, in evaluating a 
particular code or standard for such an institution, the proper 
concern is whether any code-required construction changes are, 
in fact, mandatory and not discretionary. The Committee 
believes that reasonable discretion as to the timing or 
sequencing of required repairs does not convert a mandatory 
code requirement into a discretionary one. Finally, the 
Committee wishes to state that code standards that apply to the 
repair of facilities damaged as a result of a disaster but not 
to undamaged facilities does not create an impermissible ``two-
tiered'' system. Rather, such codes are based on the simple and 
common sense notion that, when major repairs to public 
facilities are required as a result of a major disaster, it is 
often more cost-effective to bring the entirety of a facility 
up to applicable code standards when the damage is above a 
certain threshold.
    In addition, 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 1999 recommendation.......................        $1,355,000
Fiscal year 1998 appropriation........................         1,495,000
Fiscal year 1999 budget request.......................         1,355,000
Comparison with fiscal year 1998 appropriation........          -140,000
Comparison with fiscal year 1998 budget request.......                 0
                                                                        


------------------------------------------------------------------------
                                        Limitation on    Administrative 
                                        direct loans        expenses    
------------------------------------------------------------------------
Fiscal year 1999 recommendation.....     ($25,000,000)          $440,000
Fiscal year 1998 appropriation......      (25,000,000)           341,000
Fiscal year 1999 budget request.....      (25,000,000)           440,000
Comparison with fiscal year 1998                                        
 appropriation......................               (0)           +99,000
Comparison with fiscal year 1999                                        
 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 1999, the Committee recommends $1,355,000 
for the cost of State Share Loans, the same as the President's 
request and a decrease of $140,000 from the fiscal year 1998 
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 $440,000 for administrative expenses of 
the program.

                         salaries and expenses

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $171,138,000
Fiscal year 1998 appropriation........................       171,773,000
Fiscal year 1999 budget request.......................       172,438,000
Comparison with fiscal year 1998 appropriation........          -635,000
Comparison with fiscal year 1999 budget request.......        -1,300,000
                                                                        

    This activity encompasses the salaries and expenses 
required to provided 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 $171,138,000 for salaries and expenses, a 
decrease of $635,000 from the fiscal year 1998 level and a 
decrease of $1,300,000 from the budget request. The Committee 
recommendation does not provide $1,300,000 proposed in a budget 
amendment recently received from the President. The Committee 
will continue its evaluation of the merits of the amendment and 
take action as appropriate.

                      office of inspector general

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................        $4,930,000
Fiscal year 1998 appropriation........................         4,803,000
Fiscal year 1999 budget request.......................         4,930,000
Comparison with fiscal year 1998 appropriation........          +127,000
Comparison with fiscal year 1999 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 1999, the Committee has recommended 
$4,930,000 for the Office of Inspector General, an increase of 
$127,000 above the fiscal year 1998 appropriation and the same 
as the fiscal year 1999 budget request.

              emergency management planning and assistance

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $231,674,000
Fiscal year 1998 appropriation........................       243,546,000
Fiscal year 1999 budget request.......................       206,674,000
Comparison with fiscal year 1998 appropriation........       -11,872,000
Comparison with fiscal year 1999 budget request.......       +25,000,000
                                                                        

    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 1999 appropriation of $231,674,000 is 
recommended, a decrease of $11,872,000 from the 1998 level and 
$25,000,000 over the fiscal year 1999 budget request.
    The Committee recommendation does not provide $11,100,000 
proposed in a budget amendment recently received from the 
administration. The Committee will continue its evaluation of 
the merits of the amendment and take action as appropriate.
    The budget request included a new account for pre-disaster 
mitigation at a value of $50,000,000. The Committee does not 
agree that the new account is required and instead has included 
$30,000,000 within the EMPA account. Within the amount 
provided, FEMA is directed to conduct a pilot project of 
seismic retrofit technologies on at least two existing welded 
steel frame buildings in two distinct geographically dispersed, 
seismically active areas in the United States: the New Madrid 
fault region and a California fault region. The Committee 
directs that a report be provided by FEMA, on or before March 
31, 1999, and again on or before June 30, 1999, to the 
Committee regarding progress made toward completion of these 
retrofits and development of an essential data base. The 
Committee recommends that FEMA establish a steering committee 
to receive input from industry associations and the technical 
community regarding the appropriate use of updated building 
codes and industry standards in performing these retrofits. In 
addition, the Committee directs FEMA to conduct a pilot project 
using laser technology developed by the Applied Research 
Laboratory at Penn State University under a contract with the 
U. S. Naval Research Lab. The pilot project is to demonstrate 
non-disruptive seismic retrofitting of a medical center 
facility in California.
    The Committee has provided an increase of $3,500,000 for 
construction of an Emergency Operations Center in Monroe 
County, Pennsylvania. The center is to serve as a model 
demonstration of how disaster management support activities can 
be effectively and efficiently provided through the use of the 
latest computer and communications technology available. This 
center will provide specialized facilities for emergency 
operations dealing with hazardous materials, terrorist 
incidents, fire and flood disasters.
    The Committee continues to support the Urban Search and 
Rescue program and urges FEMA to ensure existing teams are 
fully financed prior to establishing any new teams. The 
Committee continues to be concerned that FEMA does not have 
clear statutory authority for Urban Search and Rescue teams and 
has not promulgated regulations to manage the teams. The 
Committee urges FEMA to address these deficiencies as well as 
clarifying the responsibilities under the current Memoranda of 
Agreement with participating teams.
    The Committee directs FEMA to allocate an additional 
$3,600,000 from within the amount provided for the replacement 
and upgrade of equipment for Mobile Emergency Response Support.
    The Committee has included $1,000,000 to initiate a pilot 
project for two-foot contour interval mapping by the Louisiana 
Oil Spill Coordinator's Office. This pilot project shall be 
cost shared 75% federal and 25% local/state.
    The Committee has previously requested that FEMA work with 
officials of Point Coupee Parish, Louisiana on development of 
an emergency communications system. To date no constructive 
work has been accomplished. The Committee has included 
$1,600,000 for this project in fiscal year 1999 and directs 
FEMA to undertake this project within 30 days of enactment of 
this Act.
    The Committee is disappointed that FEMA chronically misses 
deadlines for submitting reports and information to the 
Committee on Appropriations. For example, House Report 105-175 
(July 11, 1997) requested that FEMA provide by February 1, 1998 
a comprehensive assessment of Federal disaster training 
facilities. As of this date the Committee has not received the 
report. This is but one example among many. The Committee urges 
FEMA to respond more quickly to report requests so the 
Committee can make its decisions using full information.
    The Committee directs FEMA develop an evacuation plan for a 
Category 3 or greater storm for New Orleans, Louisiana. FEMA is 
directed to work with the Louisiana Office of Emergency 
Prepareness and the New Orleans Regional Planning Commission on 
the development of such a plan.
    According to the National Fire Incident Reporting System, 
of fire fatalities caused by furniture ignition from small open 
flames, 80% occur in households without a working smoke 
detector. Yet smoke detectors have been proven to save lives. 
For instance, the U.S. Fire Administration studied a smoke 
detector and fire safety education program in a targeted area 
in Oklahoma City. They found that the program resulted in an 
80% decrease in the rate of fire-related injuries. At the same 
time, the rest of Oklahoma City experienced an 8% increase in 
the rate of fire-related injuries. In addition, the Centers for 
Disease Control led a smoke detector and fire safety program in 
Benton County, Mississippi, which had one of the highest rates 
of residential fire deaths in the South. The CDC distributed 
over 800 smoke detectors and worked with the county's volunteer 
fire departments to educate families and children about fire 
safety. The total cost of the program was about $7,500 and 
since the program started two years ago, there have been no 
fire-related deaths in Benton County. The Committee believes 
the foregoing information warrants expansion of a smoke 
detector and fire safety pilot project similar to those 
conducted in Oklahoma City and Benton County, to be carried out 
over a period of three years. Therefore, the Committee directs 
FEMA, through the U.S. Fire Administration, to conduct such a 
pilot project in localities of highest risk for residential 
fires. The U.S. Fire Administration shall design and implement 
this project which shall at a minimum include targeted 
distribution of smoke detectors and public education on the 
value and benefits of maintaining working smoke detectors in 
the home. The Administration shall monitor the impact of this 
project on fire incidence in these communities and shall report 
to the Congress on these results.
    The Committee has become increasingly concerned with FEMA's 
practice of adopting new or modified policies which have 
significant cost impacts on state and local governments' claims 
without the opportunity of comment from, or prior notification 
of such policies to, the affected state and localities 
experiencing a diaster. Furthermore, in the case of the 1995 
winter storms in the state of California, new policies adopted 
by the Agency were applied retroactively. The Committee 
recommends that FEMA ensure an opportunity for public comment 
prior to the adoption of any new or modified polices that would 
have potential funding impacts on state and local governments, 
and that the Agency does not apply such policies retroactively.

                   EMERGENCY FOOD AND SHELTER PROGRAM

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $100,000,000
Fiscal year 1998 appropriation........................       100,000,000
Fiscal year 1999 budget request.......................       100,000,000
Comparison with fiscal year 1998 appropriation........                 0
Comparison with fiscal year 1999 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 1998 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 1999.

                     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 $22,685,000, and for mitigation activities, 
not to exceed $78,464,000, including a limitation of 
$20,000,000 for the repayment of interest as required under 
Section 1366 of the National Flood Insurance Act of 1968, as 
amended.
    The Committee is aware that authorization to write new 
policies during fiscal year 1999 does not currently exist. The 
Committee urges the passage of appropriate authorizing 
legislation prior to September 30, 1998 to ensure continuation 
of this program.

                    General Services Administration

                      Consumer Information Center

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................        $2,619,000
Fiscal year 1998 appropriation........................         2,419,000
Fiscal year 199 budget request........................         2,419,000
Comparison with fiscal year 1998 appropriation........          +200,000
Comparison with fiscal year 1999 request..............          +200,000
                                                                        

    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 $2,619,000 for 
fiscal year 1999. This is an increase of $200,000 from the 
fiscal year 1998 level and an increase of $200,000 to the 
fiscal year 1999 President's budget request. The Consumer 
Information Center has experienced difficulty recently with 
hiring new personnel because the nature of the Center's work 
has changed and people with greater computer skills are 
required. Since people with these skills are in high demand, 
the Center has had to modify its grade structure in order to 
hire the required personnel. In recognition of this fact, the 
Committee recommends an increase of $200,000 for personnel 
related expenses. 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 1999 in 
excess of this amount shall remain in the fund and are not 
available for expenditure except as authorized in 
appropriations Acts.

             National Aeronautics and Space Administration

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................   $13,328,200,000
Fiscal year 1998 appropriation........................    13,648,000,000
Fiscal year 1999 budget request.......................  \1\ 13,465,000,0
                                                                      00
Comparison with fiscal year 1998 appropriation........      -319,800,000
Comparison with fiscal year 1999 request..............     -136,800,000 
                                                                        
\1\ In addition, the budget request included advanced appropriations    
  requests totaling $7,729,000,000.                                     

    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 
designed to ensure and maintain U.S. preeminence in space and 
aeronautical endeavors.
    The Committee has recommended a total program level of 
$13,328,200,000 in fiscal year 1999, which is a decrease of 
$136,800,000 from the budget request and $319,800,000 below the 
fiscal year 1998 enacted appropriation.

                           HUMAN SPACE FLIGHT

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $5,309,000,000
Fiscal year 1998 appropriation........................  \1\ 5,506,500,00
                                                                       0
Fiscal year 1999 budget request.......................  \2\ 5,511,000,00
                                                                       0
Comparison with fiscal year 1998 appropriation........      -196,500,000
Comparison with fiscal year 1999 request..............     -202,000,000 
                                                                        
\1\ An additional $53,000,000 was transferred to this account in P.L.   
  105-174.                                                              
\2\ An additional $7,729,000,000 was requested in advanced              
  appropriations for the International Space Station.                   

    This appropriation provides for human space flight 
activities, including development of the international 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 $5,309,000,000 for the 
human space flight account. The recommendation is a decrease of 
$202,000,000 from the President's budget request and 
$196,500,000 below the fiscal year 1998 enacted appropriation.
    The fiscal year 1999 budget request for Human Space Flight 
includes $2,270,000,000 for space station, $3,059,000,000 for 
space shuttle, and $182,000,000 for payload utilization and 
operations.
    The budget request for space shuttle operations is reduced 
by $32,000,000 to reflect program changes recently announced. 
The original budget request includes $2,487,400,000 for shuttle 
operations reflecting eight flights in fiscal year 1999, of 
which six were specified for the assembly of the space station. 
The space station control board revised the assembly schedule 
in May of 1998 to reflect delays in delivery of the Russian 
furnished service module, which results in only four station 
assembly flights in fiscal year 1999. In recognition of this 
program change, the Committee recommends reducing shuttle 
operations funding by the cost of the two station assembly 
shuttle flights that will not occur. This will leave funding 
for four station assembly flights and two non-station flights 
that were included in the budget justification material. The 
Committee recommendation includes the full budget request for 
shuttle safety and performance upgrades of $571,600,000.
    The Committee acknowledges the interest of several U.S. 
companies in the near-term commercialization of surplus 
resources during space shuttle flights and the assembly of the 
space station. Recent testimony before the Senate indicates 
that there are significant revenues to be gained from 
commercialization activities that would not conflict with 
existing research efforts. Additionally, the continuing need to 
find additional resources to pay for station development cost 
increases highlights the need to be innovative and open to 
unconventional ideas. The Committee therefore endorses efforts 
by the House Committee on Science to enable and direct NASA to 
work with its shuttle and station contractors to pursue these 
commercialization opportunities as a way to defray operations 
and development costs.
    The Committee recommends funding of the space station at 
$2,100,000,000. The amount provided is $170,000,000 below the 
budget request. The Committee has concerns that management 
control, at both the contractor and agency levels, is lacking. 
When the Congress was finalizing the fiscal year 1998 
supplemental in April of this year, NASA insisted that total 
funding required for 1998 would be at least $2,551,300,000. 
While the Congress was unable to provide additional resources 
up to this level of funding, approval was granted for a funding 
level of $2,441,300,000. It has now come to the Committees 
attention that even this lower level of funding is not going to 
be required in fiscal year 1998 and in fact up to $400,000,000 
will not be spent. The Committee cannot continue to provide 
funding excess of near-term needs and directs NASA to take 
action to improve the financial management of the program 
immediately. The Committee agrees that the ability to do life 
and microgravity research is the principal reason for building 
the space station, but is concerned that the research program 
for the space station is suffering from a lack of focus because 
the management of the space station program is preoccupied with 
development and assembly. The Committee therefore directs NASA 
to transfer administrative responsibility for the space station 
research program to the Office of Life and Microgravity 
Sciences and Applications.
    The Committee recognizes that process improvement by NASA 
and the single prime contractor for space shuttle have resulted 
in hundreds of millions of dollars in savings. Furthermore, the 
Committee recognizes the importance of keeping this critical 
national resource operational well in the next century. 
Therefore, in addition to any funds already planned for shuttle 
upgrades, the Committee supports the reinvestment of additional 
savings in cost effective upgrades or other Human Space Flight 
programs.

                  SCIENCE, AERONAUTICS AND TECHNOLOGY

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $5,541,600,000
Fiscal year 1998 appropriation........................     5,690,000,000
Fiscal year 1999 budget request.......................     5,457,400,000
Comparison with fiscal year 1998 appropriation........      -148,400,000
Comparison with fiscal year 1999 request..............       +84,200,000
                                                                        

    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, earth sciences, 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 $5,541,600,000 for Science, 
Aeronautics and Technology in fiscal year 1999. The amount 
recommended is $84,200,000 above the budget request. The amount 
provided includes an increase of $43,600,000 for Space Science, 
$43,000,000 for Aeronautics and Space Transportation, 
$21,500,000 for Life and Microgravity Science, $29,400,000 for 
Academic Programs, and $5,000,000 for Mission Communications. 
These increases are partially offset by a general reduction of 
$59,400,000 from earth sciences programs reflecting a reduction 
in uncosted carry-over. Specific program adjustments are 
explained below.
    For space science programs, the Committee recommends the 
following changes to the budget request:
    1. $20,000,000 for the Mars 2001 program.
    2. $20,000,000 for the Space Solar Power program.
    3. $1,600,000 for the Near Earth Asteroid Tracking program.
    4. $2,000,000 for a NASA Science Center at Glendale 
Community College.

                           Mars 2001 Program

    The Committee recommends an increase to the Mars 2001 
program of $20,000,000 in fiscal year 1999. The Committee notes 
that some activities associated with the program were 
originally intended to be financed out of the Human Space 
Flight account, but responsibility was shifted recently to the 
Space Science account without a corresponding shift of funding. 
The Committee is disappointed that cooperation among NASA's 
enterprises is not possible and as a result Congressional 
intervention is required to ensure that the Mars surveyor 
program is properly supported. In the future, the Committee 
expects to be kept fully informed of any potential problems in 
meeting the Mars surveyor program objectives so that 
adjustments can be made as necessary.

                           Space Solar Power

    The Committee notes with interest NASA's completion last 
year of its ``Fresh Look'' study of Space Solar Power, and its 
initiation of a follow-up study this year. The identification 
and experimental demonstration of critical path technologies 
which would enable the cost-effective, commercial collection of 
solar power from space, and its distribution to the Earth, is 
an example of a beneficial technology research and development 
program which should be part of NASA's core programs. The 
Committee therefore has provided an increase of $20,000,000 for 
Space Solar Power research in the Cross-Enterprise Technology 
activity in the Office of Space Science. The Committee directs 
that this effort shall be carried out by a partnership 
including the Marshall and Lewis Research Centers and the Jet 
Propulsion Laboratory, appropriate laboratories in the 
Department of Energy, and private industry.

                      Near earth asteroid tracking

    The Near Earth Asteroid Tracking program objective is to 
catalog, track, and characterize near-earth objects. The 
Committee notes the high public interest in near-earth objects 
as well as the need to accelerate cataloging and tracking of 
near-earth objects. The lesson learned from the EX11 asteroid 
is also an indication that study and detection of these near-
earth objects must be undertaken with great care. The Committee 
is encouraged by testimony presented during hearings and 
subsequent information submitted by NASA regarding its efforts 
to triple the capacity in detecting near-earth objects and 
agrees with the goal of coordinating NASA efforts with other 
agencies and international partners. The importance of these 
efforts is not to be taken lightly. Therefore, the Committee 
recommends an additional $1,600,000 for this program in fiscal 
year 1999 for acquisition of new equipment, upgrading existing 
equipment, and accelerated tracking, cataloging, and 
characterization of near-earth objects.

                          nasa science center

    The Committee recommends $2,000,000 for a NASA Science 
Center to be located in the physical sciences building of 
Glendale Community College. The Center is intended to promote 
closer ties with the Jet Propulsion Lab and serve as a resource 
for science departments in the college's fifteen feeder high 
schools.

                               AIRSEDS-S

    The Committee is aware of a proposed technology 
demonstration program with the goal of developing and 
demonstrating a new tether deployment technology. The proposed 
program, Atmospheric Ionospheric Research using Small 
Expendable Deployed Satellites or AIRSEDS, would expand on the 
research already funded by NASA through its Small Business 
Innovative Research program. The Committee is intrigued by the 
potential of the program and encourages NASA to seriously 
consider any proposals to demonstrate further the benefits of 
tether technology.
     For aeronautics and space transportation programs, the 
Committee recommends the following increases to the budget 
request:
    1. $6,000,000 for hybrid propulsion testing.
    2. $30,000,000 for Future-X.
    3. $2,000,000 for the Midwest Technology Transfer Center.
    4. $5,000,000 for Commercial Technology programs.

                          Space Transportation

    The Committee commends NASA's decision to initiate an 
ongoing series of experimental space transportation technology 
flight demonstrations which will continue the progress made by 
the X-33 and X-34 programs in enabling cheaper access to and 
from space. The budget request included $17,000,000 to begin 
work on this effort, an amount which the Committee feels is 
inadequate. The Committee recommends an increase of $30,000,000 
for this program and directs at least $24,000,000 to be spent 
in cooperation with the Air Force's Military Space Plane 
project.
    The Committee is interested in the plans NASA has for the 
future of the space shuttle program and directs NASA to provide 
a comprehensive report to the Committee by September 1, 1998 
explaining (1) what programs are included in the five-year 
budget for extending the life of the shuttle, (2) what are the 
objectives of each of those programs, and (3) the anticipated 
cost of those programs on an annual basis. Additionally, NASA 
is directed to allocate $10,000,000 to the liquid flyback 
booster program and develop plans for a proof of concept 
demonstration of the program.

                            indemnification

    The Committee understands that the Administration has 
proposed legislation for NASA to eliminate a gap in current law 
governing the sharing of financial risk for space endeavors, 
specifically to ensure unimpeded progress in development and 
testing of the X-33 and X-34 reusable launch vehicle 
technology. The legislation would extend NASA's current 
indemnification authority to provide the ability to indemnify 
developers of experimental aerospace vehicles, such as the X-33 
and X-34 vehicles, against claims by third parties, thereby 
maximizing the resources which can be invested in the actual 
technology demonstrations. In addition, the legislation would 
provide clear statutory authority for NASA to conclude cross-
waivers of liability with U.S. companies, similar to existing 
NASA authority to conclude such waivers with foreign partners 
in aerospace activities. This authority would enable NASA to 
enter into agreements with the developers of the X-33 and X-34 
whereby each party agrees to assume the risk of damage to its 
assets, and agrees not to sue any other involved party. The 
Committee understands that enactment of this legislation is 
time critical, inasmuch as flight testing of the X-33 and X-34 
are scheduled to begin in early 1999. The Committee urges the 
timely passage of this legislation to minimize disruptions in 
the X-33 and X-34 programs.

                      Technology Transfer Programs

    The Committee recommends an increase of $2,000,000 for the 
Midwest Regional Technology Transfer Center to continue and 
expand the Garrett Morgan initiative throughout Ohio and the 
Great Lakes region. In addition, the Committee recommends an 
increase of $5,000,000 in the Commercial Technology program for 
initiatives to link women and minority owned businesses, and 
businesses from distressed communities, to NASA technologies 
and capabilities. Finally, the Committee agrees to provide the 
budget request of $7,200,000 for the National Technology 
Transfer Center.

                        Classroom of the Future

    The fiscal year 1999 budget request includes $2,000,000 for 
the Classroom of the Future under NASA's Educational Technology 
line item. The Committee recognizes that this program continues 
to be a major component of the educational technology program 
within NASA and has therefore provided the budget request.

         NASA Independent Verification and Validation Facility

    The Committee recommends the budget request of $13,940,000 
for activities of the NASA independent Verification and 
Validation Facility in Fairmont, West Virginia. This amount of 
funding will provide facility operations and maintenance 
including the research and development of autonomous spacecraft 
safety analysis, safety testing, and software reuse.

                         Stereoscopic Displays

    The Committee recognizes that NASA's Advanced Subsonic 
Technology program is currently working with the Schepens Eye 
Research Institute to improve stereoscopic displays. The 
Committee endorses NASA's efforts and encourages NASA to do an 
assessment of the technology at an appropriate time to 
determine if expansion to a more robust program is desirable.

                          Aeronautics Funding

    The Committee endorses the High Speed Research program at 
the budget request level of $190,000,000. The Committee also 
strongly supports NASA leadership and support of the general 
aviation community and encourages further development and 
expansion in this area. The Committee is concerned that NASA's 
aeronautics programs do not receive the attention and funding 
they deserve. NASA's aeronautics investments provide research 
infrastructure and explore high-risk, long-term payoff research 
in such areas as advanced subsonics technology, high speed 
research, and access to space. The resulting knowledge spurs 
U.S. industrial innovation and commercial market development. 
This has enabled the private sector to invest in product 
development that results in the delivery of goods and services 
to the public, creates high value jobs, and stimulates 
significant economic development. Given these benefits to the 
nation, the Committee urges NASA to work toward increasing the 
funding for aeronautics research in the future.

                 Center of Excellence in Turbomachinery

    The Committee recommends that NASA designate the Lewis 
Research Center as the lead or coordinating center of 
excellence in turbomachinery. This designation should be 
inclusive of all turbomachinery technology development efforts 
including that required for space applications.

                     Life and Microgravity Sciences

    The Committee recommends an increase of $21,500,000 for 
life and microgravity science programs. This amount includes 
$6,500,000 for space radiation research. The Committee is 
concerned that the life sciences program will have a 
significant gap of seven to nine years between major thematic 
missions. Without one or two dedicated thematic life science 
mission during this gap, universities will have significant 
problems in sustaining the life sciences community, both in 
retaining the best scientists and attracting the best new 
students into the field. Therefor, the Committee has provided 
$15,000,000 to be used to address the projected gap.
    Over the course of the shuttle program, this Committee has 
been very supportive of a robust science program. It is with 
dismay, therefore, that the Committee learned of a draft 
shuttle manifest that dropped Mission 107, a mission scheduled 
for May 2000 designed to perform cutting edge medical research 
and promote commercial access to space. The Committee urges 
NASA to revisit this issue in a final manifest and strive for a 
more equitable balance between science, commercial interest, 
and space station assembly.
    For academic programs, the Committee recommends the 
following increases to the budget request:
    1. $10,000,000 minority university research and education 
programs.
    2. $1,000,000 for a residential aerospace educational 
center.
    3. $3,500,000 for academic and infrastructure needs at the 
University of Redlands.
    4. $5,500,000 for programs at the American Museum of 
Natural History.
    5. $9,400,000 for the Partnership Awards program.
    The Committee recommends a total of $55,900,000 for the 
minority university research and education programs. The 
increase of $10,000,000 will enable the agency to expand 
opportunities for minority institutions to better participate 
in the NASA's centers of excellence and thereby enhance 
diversity in the NASA-sponsored research and education 
community. These funds will also serve to achieve a balance 
between NASA's total funding to institutions of higher 
education and minority institutions. This $10,000,000 increase 
for the science, engineering, mathematics, and aeronautics 
academy (SEMAA) program includes $4,500,000 for new programs in 
St. Louis, Missouri; Jamaica Queens, New York; DeKalb County, 
Georgia; and Greenville, North Carolina. The remaining 
$5,500,000 is for continuation of existing SEMAA locations.
    Consistent with congressional direction, NASA recent 
partnership awards and other programmatic initiatives have done 
much to reach areas of the nation's underserved minority 
institutions and socially and economically disadvantaged 
students. To expand opportunities and enhance diversity in the 
NASA sponsored research and education, and to achieve a balance 
between the proportion of NASA funding received by minority 
institutions of higher education and other institutions of 
higher education, the Committee recommends an increase of 
$9,400,000 for partnership awards.
    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, where there is a growing inadequacy of 
highly qualified math and science teachers. Thus, NASA is 
strongly urged to strengthen and expand its math and science 
teacher preparation programs.
    The Committee is aware of and encourages the ongoing 
dialogue between NASA and the University of Tennessee at 
Chattanooga in support of educational outreach. NASA is 
encouraged to facilitate the plans of the University to reach 
students and visitors in the region by using available resource 
materials to enhance existing programs at the institution. With 
the availability of NASA distance learning technology, schools 
in and around southeastern Tennessee and the Northern Georgia/
Alabama areas will be able to link directly with the Marshall 
Space Flight Center to reach thousands of students in the tri-
state area.
     The Committee recommends an increase of $5,000,000 for 
Mission Communications. The Committee is concerned that the 
reductions in funding proposed in the budget request may be 
more than the program can absorb and that other programs may 
suffer degradation of services as a result. It is expected that 
this additional funding will ensure that vital mission 
communications functions continue to operate smoothly.

       Application of satellite imagery for local government use

    The Committee directs NASA to provide $3,000,000 from the 
earth science program to the Regional Application Center in 
Cayuga County, New York for development of programs which use 
satellite imagery in urban planning and agricultural 
applications. The Center in Cayuga County is the only Regional 
Application Center in the Northeast and as such will be able to 
offer new perspectives on the use of satellite imagery and data 
to address land use problems.
    The Committee recommendation includes a general reduction 
to the budget request for earth sciences programs. The 
Committee remains concerned with the execution of several 
specific programs within earth science and with the large 
amounts of unobligated and uncosted carryover funds associated 
with this portion of the budget. The Committee recommendation 
includes a general reduction of $59,400,000 which is less than 
10% of the uncosted carryover which existed at the end of 
fiscal year 1998.
    The Committee understands that NASA is considering a new 
program to the Earth-Sun LaGrange-1 point (L1) designed to 
provide an HDTV quality, full color image of the full sun-lit 
disk of the Earth on the Internet, updated approximately every 
three minutes. The Committee understands that NASA's objective 
is to complete development of this spacecraft for under 
$50,000,000, with potential commercial offsets, and to launch 
the spacecraft within the next 24 months. The Committee 
understands that it is NASA's intent to issue a competitive 
solicitation in the near future, inviting industry proposals, 
ranging from specific components to the entire spacecraft. 
Because the Committee has questions concerning the mission 
objectives, adequacy of plans for peer review of proposals, and 
availability of funding, the Committee has included bill 
language prohibiting use of fiscal year 1999 funds for this 
mission. The Committee expects to examine the results of NASA's 
Announcement of Opportunity by September 1998. Before the 
Committee will consider removing the prohibition against 
expenditure of fiscal year 1999 appropriations for this 
mission, NASA must demonstrate for the Committee that the 
Agency has a plan for a public-private, peer-reviewed mission, 
which has resulted from a competitive process.

                            MISSION SUPPORT

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $2,458,600,000
Fiscal year 1998 appropriation........................     2,433,200,000
Fiscal year 1999 budget request.......................     2,476,600,000
Comparison with fiscal year 1998 appropriation........       +25,400,000
Comparison with fiscal year 1999 request..............       -18,000,000
                                                                        

    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 $2,458,600,000 for the 
mission support account. The recommended amount is $25,400,000 
more than the fiscal year 1998 appropriation and $18,000,000 
less than the budget request. The Committee recommends a 
general reduction of $20,000,000 to the Mission Support 
account. The Committee directs NASA to report by September 1, 
1998 on which efforts will be affected by this funding 
reduction.

                           Claims settlement

    The Committee recommends an increase of $2,000,000 for the 
settlement of claims submitted for work associated with the 
Integrated Test Facility located at the Dryden Flight Research 
Center. Last year the Committee requested that the NASA 
Inspector General review the merits of the claims and provide 
the Committee with recommendations on the validity of the 
claims and the amount of payment required to reach settlement. 
The Committee took this action in recognition of the changes in 
procedures for resolution of claims under 31 U.S.C. 3702 which 
transferred responsibility from the General Accounting Office 
to the Office of Management and Budget or its designated agent. 
NASA is directed to reach final settlement with the 
subcontractors as quickly as possible using the recommendations 
of the Inspector General as the basis for resolution.

                      OFFICE OF INSPECTOR GENERAL

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $19,000,000
Fiscal year 1998 appropriation........................        18,300,000
Fiscal year 1999 budget request.......................        20,000,000
Comparison with fiscal year 1998 appropriation........          +700,000
Comparison with fiscal year 1999 request..............        -1,000,000
                                                                        

    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 $19,000,000 for the Office of the 
Inspector General in fiscal year 1999, a reduction of 
$1,000,000 from the budget request. The funding provided is 
$700,000 above the amount provided in fiscal year 1998.

                  National Credit Union Administration

                       CENTRAL LIQUIDITY FACILITY

------------------------------------------------------------------------
                                         Limitation of    Administrative
                                          direct loans       Expenses   
------------------------------------------------------------------------
Fiscal year 1999 recommendation.......     $600,000,000         $176,000
Fiscal year 1998 appropriation........      600,000,000          203,000
Fiscal year 1999 budget request.......      600,000,000          176,000
Comparison with fiscal year 1998                                        
 appropriation........................                0          -27,000
Comparison with fiscal year 1999                                        
 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 $176,000 on administrative 
expenses. In addition, the Committee recommends an 
appropriation of $2,000,000 for the Community Development 
Revolving Loan Program for Credit Unions.
    Questions have been raised about whether the $600,000,000 
limitation on liquidity is sufficient given the size of 
corporate credit union assets. Though the CLF is not used 
regularly and only in times of serious economic downturns, it 
is important to note that if the country were to experience the 
type of systemic liquidity problems faced in the early 80's, 
the $600,000,000 would be used very quickly.

                      National Science Foundation

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................    $3,626,700,000
Fiscal year 1998 appropriation........................     3,429,000,000
Fiscal year 1999 budget request.......................     3,773,000,000
Comparison with fiscal year 1998 appropriation........      +197,700,000
Comparison with fiscal year 1999 request..............      -146,300,000
                                                                        

    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 $3,626,700,000 for 
fiscal year 1999. This recommendation is an increase of 
$217,000,000 above last year's appropriation and $146,300,000 
below 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 1999 recommendation.......................    $2,745,000,000
Fiscal year 1998 appropriation........................     2,545,700,000
Fiscal year 1999 budget request.......................     2,846,800,000
Comparison with fiscal year 1998 appropriation........      +199,300,000
Comparison with fiscal year 1999 request..............      -101,800,000
                                                                        

    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 $2,745,000,000 for Research and 
Related Activities in fiscal year 1999, an increase of 
$199,300,000 above last year's funding level and $101,800,000 
below the budget request. An additional appropriation of 
$70,000,000 is included in Title IV--General Provisions of this 
bill. The funding increase over the 1998 level is intended to 
be spread proportionally throughout NSF's Research and Related 
Activities as outlined in the budget request and accompanying 
justification, except as specifically noted below.
    It is the Committee's intention that within the increased 
funding level provided for fiscal year 1999, Atmospheric 
Sciences will receive the budget request of no less than 
$170,000,000, Earth Sciences the budget request of no less than 
$106,000,000, and Ocean Sciences the budget request of no less 
than $230,000,000. No funds have been provided for the GLOBE 
program.
    The Committee has included bill language intended to make 
it clear that NSF will no longer have the governmental 
responsibility to administer the domain name and numbering 
system of the Internet. While NSF may have appeared to be a 
logical choice to have such a mission several years ago, the 
overwhelming growth and maturity of the Internet clearly point 
to other agencies of government, such as the Commerce 
Department, as the better candidates to oversee the system.
    The scientific work performed by and through the NSF in 
Antarctica continues to be of great importance to the 
Committee. At the same time such scientific endeavors proceed, 
however, significant and perhaps difficult changes regarding 
the management and logistics of operations throughout the 
continent are taking place. Such changes remain a concern for 
the Committee from the standpoint of minimizing the disruption 
of ongoing science while at the same time maximizing the use of 
available fiscal resources.
    In this vein, questions were raised by the Committee in the 
context of the fiscal year 1999 budget hearings focusing on 
utilizing industry best management and accounting practices as 
well as reducing disruptions while the move towards 
privatization and facility upgrade moves forward. For example, 
NSF has indicated that the construction schedule at South Pole 
will of necessity reduce the number of flights available to 
shuttle researchers. While this circumstance is obviously 
unavoidable to some degree, the Committee believes every effort 
should be made to maintain the highest level of ongoing science 
possible.
    Similarly, NSF has reported the need to upgrade its air 
traffic management system on the continent. Such a system will 
most likely require significant appropriations, and it is the 
Committee's desire to begin planning for such future needs now 
rather than at the ``last minute.'' Again, lack of adequate 
lead time to facilitate these upgrades will only serve to 
further disrupt ongoing operations. The Committee expects to be 
kept informed on a regular basis of the progress and the 
problems occurring in Antarctica as events move forward, and 
also expects to receive a semi-annual accounting of the 
specific cost savings generated as a result of the 
privatization of operations.
    The Foundation's budget contains $50,000,000 for major 
research instrumentation. These funds are distributed at the 
outset of each year to each of the research directorates. 
Ultimately, the distributed resources are re-allocated based on 
actual funding decisions made on proposals submitted in 
response to the program announcement. This re-allocation leads 
to annual revisions in the operating plan for each of the 
research directorates, usually late in the fiscal year. Even 
though the NSF has made these adjustments in accord with the 
Committee's reprogramming procedures, it does make it difficult 
to track funding trends among and between the various 
activities within the research account.
    Therefore, the Committee requests the Foundation to use the 
fiscal year 1999 operating plan and the 2000 budget request to 
begin displaying major research implementation as an activity 
within the Research and Related Activities appropriation 
account.
    The Committee understands that the Foundation is 
reorganizing its behavioral and social science research 
programs to accelerate the impressive advances that are 
occurring in these areas. The Committee applauds this 
reorganization as a sign of NSF's expanding commitment to these 
areas and reiterates its belief that basic research in the 
behavioral sciences is central in understanding and addressing 
many national concerns. Also noted is the publication of 
``Basic Research in Psychological Science,'' a human capital 
initiative report on the achievements in many areas of 
psychological research such as visual and auditory perception, 
memory and learning, decision making, social and culture-based 
behaviors, and human development. The Foundation is encouraged 
to use this report in establishing behavioral and social 
science research priorities.
    In testimony before the Committee on the 1999 budget 
request, the National Science Board was asked to discuss its 
recent report on government funding for scientific research 
which, among other matters, calls for more comprehensive 
coordination of federally funded research. In response, the 
report was noted to comment that, ``there should be an overall 
strategy for research, with areas of increased and areas of 
decreased emphasis. The budget as a whole should be adequate 
both to serve national priorities and to foster a world-class 
scientific and technical enterprise. To this end, Congress and 
the Administration need to establish a process that examines 
the complete Federal research budget before the budget is 
disaggregated for consideration in Congressional committees.''
    The Board's witness went on to say that, ``The Board has 
concluded that an appropriate next step is to initiate a study 
of guidelines for priority setting across fields of science 
that go beyond those proposed in the COSEPUP report * * * [The] 
purpose of this task would not be to set priorities, but rather 
to undertake a study of how they might best be set. The study 
should involve the opinions of a diverse group including, among 
others, active researchers with breadth of vision.''
    The Committee strongly agrees with the thrust of the NSB 
report and the comments of the NSB witness. The Foundation is 
thus asked to develop the guidelines for such a study and 
provide for the Committee at the earliest possible date a 
proposed plan, including necessary costs, to accomplish this 
task and institute such a study.
    Finally, in a response to questions raised at the 
aforementioned budget hearing, it was determined that the NSF 
Director has since fiscal year 1995 maintained a so-called 
``Opportunity Fund.'' Resources for this Fund are derived from 
proportionate ``contributions'' requested of each of the 
research directorates.
    The Committee is not aware of any reference to the 
existence or the use of this Fund in either the budget 
justification or in the annual operating plans. While the 
Committee will at this time reserve judgment with respect to 
the use of further appropriated funds in this manner, the 
Foundation is directed to provide by November 1, 1998 a report 
detailing specifically the amount, the origin, and the use of 
these funds since NSF instituted the program. Should the Fund 
exist beyond fiscal year 1998, the Committee expects to see a 
spending plan submitted for the Fund as part of the operating 
plan, as well as a detailed reference to the Fund and its 
planned use in the budget justification.
    The National Science Board (NSB) approved the Science and 
Technology Centers Program in August 1987. Ten years later, the 
NSB reviewed the program and approved its continuation based 
upon its documented success. Among the reasons for the success 
of the program has been that Centers have been selected because 
of the strength of the individual research performers that have 
applied. With participation open to all research performers, 
and with independent evaluation every three years, the Centers 
have been selected and continued strictly on the basis of the 
following criteria:
          Research merit and educational excellence;
          Exploitation of opportunities in science, 
        engineering, and technology where the complexity of the 
        research problems or the resources needed to solve 
        these problems require the advantages of scope, scale, 
        change, duration, equipment, facilities, and students 
        that can only be provided by a campus-based Center;
          Investigations at the frontiers of knowledge, at 
        interfaces of disciplines and/or fresh approaches at 
        the core of disciplines;
          The engagement of the Nation's intellectual talents, 
        drawn from its full human diversity (especially women 
        and underrepresented minorities), in the conduct of 
        human research and education activities;
          Organizational connections and linkages within and 
        between campuses, schools and/or the world beyond 
        (state, local, federal agencies, national labs, 
        industry, international);
          Focus on integrative learning and discovery and the 
        preparation of students for a diverse set of career 
        paths; and
          Science and engineering in service to society 
        especially with respect to new research areas, 
        promising new instrumentation, and potential new 
        technologies.
    The Committee has provided continued funding for the 
Centers program, with the understanding that the Foundation 
will continue to apply these criteria for the selection of 
Centers. The Committee is concerned that the effectiveness of 
the program could suffer if its limited resources were diverted 
from a strict evaluation of merit to other allocation 
mechanisms.

                        MAJOR RESEARCH EQUIPMENT

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................       $90,000,000
Fiscal year 1998 appropriation........................        74,000,000
Fiscal year 1999 budget request.......................        94,000,000
Comparison with fiscal year 1998 appropriation........       +16,000,000
Comparison with fiscal year 1999 request..............        -4,000,000
                                                                        

    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 $90,000,000 for the 
major research equipment account for fiscal year 1999. This 
level reflects $9,000,000 for the Millimeter Array, $22,000,000 
for the Large Hadron Collider, $20,000,000 Polar support 
aircraft upgrades, and $39,000,000 for continued maintenance 
and construction of new facilities in Antarctica.
    The Committee recommendation for the Millimeter Array, LHC, 
and Polar support aircraft upgrades is the same as requested in 
the budget submission. The South Pole Station/Antarctica 
construction project has been increased from the budget request 
of $22,000,000 to $39,000,000, reflecting the Committee's 
desire to provide as much ``up-front'' funding as possible so 
as to achieve maximum economies of scale and planning and 
purchasing flexibility at an early stage of the project. With 
this appropriation, the Committee will have provided some 
$109,000,000 of the $127,900,000 projected cost of the project.
    For fiscal year 1999, the Committee has recommended no 
funding for the Polar Cap Observatory. This action is taken 
reluctantly and without prejudice. Indeed, the Committee has 
been a strong proponent of the project and believes the science 
to be achieved would go far towards enhancing our understanding 
of the conditions in the space environment that can influence 
the performance and reliability of space-borne and ground-based 
technological systems. Such systems include satellites, 
communications, navigation, and electric power distribution 
grids.
    Despite the value of the project, however, difficulties in 
resolving concerns voiced by various parties have effectively 
brought the project to a standstill. Moreover, there appears to 
be little likelihood that a resolution of these concerns will 
come about soon. The Committee has therefore determined to 
utilize funds budgeted for this project to enhance the funding 
proposed for construction of South Pole Station. Should these 
concerns be resolved prior to final passage of this measure or 
in future months, the Committee will revisit funding for PCO at 
the earliest possible time.
    The Committee has not advanced funded MRE projects as was 
proposed in the budget submission.
    Although the Committee has provided the budget request of 
$9,000,000 for the Millimeter Array--which is similar to the 
funding provided in fiscal year 1998--there is considerable 
concern that the construction phase of this important project 
may be delayed or abandoned as a consequence of not securing 
funding partnerships with foreign organizations. The Foundation 
is encouraged to continue to actively pursue an appropriate 
sharing arrangement, and the Committee expects to be kept 
informed of the progress in this regard.
    Last year, the Committee noted that the scientific 
opportunities associated with high-field nuclear magnetic 
resonance technologies were being pursued by scientists in 
other nations. This past January, scientists met in Washington, 
D.C. to examine the opportunities these major instruments could 
provide in the exploration of new frontiers. As this technology 
is one of the most exciting and promising for new advances, the 
Committee strongly encourages NSF to carefully review and 
consider this report as it seeks future MRE activities.

                     EDUCATION AND HUMAN RESOURCES

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $642,500,000
Fiscal year 1998 appropriation........................       632,500,000
Fiscal year 1999 budget request.......................       683,000,000
Comparison with fiscal year 1998 appropriation........       +10,000,000
Comparison with fiscal year 1999 request..............       -40,500,000
                                                                        

    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 segment of the scientific and 
engineering communities.
    For fiscal year 1999, the Committee recommends 
$642,500,000, an increase of $10,000,000 above last year's 
appropriated level and a decrease of $40,500,000 below the 
budget request. Within this total funding level, the Committee 
expects that up to $7,500,000 above the budget request be used 
for graduate needs of under-represented minority doctorates in 
science and engineering. Additionally, the Foundation is 
directed to provide $41,000,000, or $5,000,000 over the budget 
request, for the Informal Science Education program.
    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 1999.
    The Committee notes the national model for 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 initiative 
of the program, the summer science camp program, serves as a 
stimulant for interest in math and science and is the 
foundation for future interest in this subject area.
    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. Additionally, the Committee urges the 
Foundation to incorporate advance technology in its math, 
science, engineering, and technology programs including the 
math/science education programs and the K-12 summer science 
camps mentioned previously.
    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.
    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 
investment in research and development that underpin 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.

                         SALARIES AND EXPENSES

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................      $144,000,000
Fiscal year 1998 appropriation........................       136,950,000
Fiscal year 1999 budget request.......................       144,000,000
Comparison with fiscal year 1998 appropriation........        +7,050,000
Comparison with fiscal year 1999 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.
    The Committee recommends an appropriation of $144,000,000 
for salaries and expenses, the same as the President's budget 
request and an increase of $7,050,000 over last year's 
appropriated level.

                      OFFICE OF INSPECTOR GENERAL

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation.......................        $5,200,000
Fiscal year 1998 appropriation........................         4,850,000
Fiscal year 1999 budget request.......................         5,200,000
Comparison with fiscal year 1998 appropriation........          +350,000
Comparison with fiscal year 1999 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 1999, the Committee has recommended 
$5,200,000 for the Office of Inspector General. This amount is 
$350,000 above last year's funding level and is the same as the 
President's budget request.

                 Neighborhood Reinvestment Corporation

          PAYMENT TO THE NEIGHBORHOOD REINVESTMENT CORPORATION

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation......................        $90,000,000
Fiscal year 1998 appropriation.......................         60,000,000
Fiscal year 1999 budget request......................         90,000,000
Comparison with fiscal year 1998 appropriation.......        +30,000,000
Comparison with fiscal year 1999 budget request......                  0
                                                                        

    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. Neighborhood reinvestment is 
primarily accomplished by assisting community-based 
partnerships (NeighborWorks organizations) in a range of local 
revitalization efforts. Increasing homeownership among low-
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 leverages its capital with private sector 
investment.
    The Committee recommends the request of $90,000,000 for 
fiscal year 1999, an increase of $30,000,000 above the fiscal 
year 1998 level. Consistently, the Neighborhood Reinvestment 
Corporation performs beyond its goals and the Committee's 
expectations. The Committee applauds NRC's contributions to the 
affordable housing industry.

                        Selective Service System

                         SALARIES AND EXPENSES

                                                                        
                                                                        
                                                                        
Fiscal year 1999 recommendation......................        $24,176,000
Fiscal year 1998 appropriation.......................         23,413,000
Fiscal year 1999 budget request......................         24,940,000
Comparison with fiscal year 1998 appropriation.......           +763,000
Comparison with fiscal year 1999 budget request......           -764,000
                                                                        

    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 the military if 
Congress and the President should authorize a return to the 
draft.
    For fiscal year 1999, the bill includes $24,176,000 for the 
Selective Service System, an increase of $763,000 above the 
fiscal year 1998 level and a decrease of $764,000 below the 
budget request. This increase of 3.2 percent should be adequate 
to accommodate necessary payroll requirements and to provide 
needed equipment and supplies. The reduction is to be taken 
from activities such as public service information.

                                TITLE IV

                           GENERAL PROVISIONS

    The Committee recommends the twenty-one general provisions 
requested in the fiscal year 1999 budget. These provisions are 
carried in the fiscal year 1998 Appropriations Act (Public Law 
105-65). The Committee also recommends a new general provision, 
Sec. 422, which allows funds appropriated to the Environmental 
Protection Agency, the National Aeronautics and Space 
Administration, and the National Science Foundation for the 
United States/Mexico Foundation for Science to be spent 
specifically for the Foundation. In addition, the Committee has 
included a general provision which reverses the decision by the 
Consumer Product Safety Commission regarding flammability 
standards for children's sleepwear.
    Finally, the Committee has included a provision that 
increases the Federal Housing Administration (FHA) single 
family mortgage insurance limits. The floor is raised from 38 
percent (or $86,000) of the FHLMC and FNMA conforming loan 
limit to 48 percent (or $109,000), and the ceiling is raised 
from 75 percent (or $170,000) of the conforming loan limit to 
87 percent (or $197,000). Additionally, in metropolitan 
statistical areas where there are various loan limits, the 
limit is based on the level of the highest median price of a 
median 1-family house within the area.
    The Committee is concerned about the relatively low 
representation of racial minorities on the staff of the HUD 
Office of the Inspector General and within other Offices of the 
Inspectors General, particularly at senior and managerial 
levels and within the investigations components of the offices. 
This situation has existed for a long period of time even 
though the incumbent Inspector General has taken some steps to 
address these problems, including the creation of a diversity 
liaison group and an outreach program to Historically Black 
Colleges and Universities and Hispanic-Serving Institutions.
    Some progress has been made in increasing diversity on the 
audit side of the OIG. However, on the investigations side of 
the Office--the area where diversity is, in some senses the 
most crucial--progress has been very slow or even negative. 
Representation of minorities among OIG investigators actually 
went down between FY 1994 and FY 1997.
    The Committee recognizes that increasing diversity among 
employees can be a challenging task, and that federal personnel 
rules and practices may sometimes make the task more difficult. 
However, the Committee also believes it vital that more 
progress be made.
    While the workforce of the HUD OIG has been brought to the 
Committee's attention, the Committee believes equally strongly 
in the importance of a diverse workforce at every agency 
covered by this bill. Therefore, the Committee directs each 
Inspector General funded in this measure to convene a working 
group to study these issues, identify the problems and report 
to the Committee. The particular issue to be addressed is how 
to improve racial diversity within offices of the Inspectors 
General.
    Further, the Committee directs Inspectors General funded in 
this measure to report to the House and Senate Committees on 
Appropriations, not less than twice a year regarding workforce 
diversity issues. The report should include statistics on 
hiring, promotions and separations within the OIG, by racial 
and gender categories, broken down by office, occupation, grade 
and level of responsibility (e.g., senior staff, managerial 
employees, and each grade).

              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.

                           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 transferring not to 
exceed $24,534,000 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 ($159,121,000), the 
education loan fund program account ($206,000), the vocational 
rehabilitation loans program account ($400,000), 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 
general post fund, national homes program from the general post 
fund.
    The Committee also recommends the transfer to general 
operating expenses: $86,000 from the national cemetery system 
and $22,633,000 from the medical care account.
    The Committee has included language under the Department of 
Veterans Affairs which would transfer funds ($558,000,000) 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 1999 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 uncommitted 
prior balances of excess rental charges as of fiscal year 1998 
and all collections made during fiscal year 1999 to the 
flexible subsidy fund.
    The Committee recommends a provision under the Public 
Housing Capital Fund which transfers all obligated and 
unobligated balances as of the end of fiscal year 1998 from 
various accounts into the Public Housing Capital Fund Account.
    The Committee recommends a transfer of $10,000,000 from the 
Drug Elimination Grants for Low-Income Housing to the Office of 
Inspector General for Operation Safe Home.
    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 
$518,343,000 from the various funds of the Federal Housing 
Administration (not to exceed $324,866,000 from the FHA-mutual 
mortgage insurance program account and $93,134,000 from the 
FHA-general and special risk program account) for salaries and 
expenses of the Department of Housing and Urban Development.
    The Committee has included language transferring a total of 
$22,343,000 from the various funds of the Federal Housing 
Administration (not to exceed $4,022,000 from the FHA-mutual 
mortgage insurance program account and $18,321,000 from the 
FHA-general and special risk program account) 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 
$16,551,000 from the federal housing enterprise oversight fund 
to the office of federal housing enterprise oversight account.
    The Committee has included language transferring $400,000 
from the Indian housing loan guarantee fund program account to 
HUD's salaries and expenses account.
    The Committee has included language transferring $200,000 
from the Native American housing block grants account to the 
salaries and expenses account.
    The Committee has included language under the Environmental 
Protection Agency transferring funds from the hazardous 
substance superfund trust fund ($12,237,000) to the Office of 
Inspector General. In addition, $40,000,000 is transferred from 
the hazardous substance superfund trust fund to the science and 
technology account.
    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 $34,666,000 
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.

            Compliance With Rule XIII, Cl. 3 (Ramseyer Rule)

  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 italics, existing law in which no change is proposed 
is shown in roman):

THE BALANCED BUDGET DOWNPAYMENT ACT, I

           *       *       *       *       *       *       *


                                TITLE IV

HOUSING AND URBAN DEVELOPMENT

           *       *       *       *       *       *       *


 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 years 
1997 and 1998] fiscal years 1997, 1998, and 1999--
          (1) * * *

           *       *       *       *       *       *       *

  (f) This section shall be effective upon the enactment of 
this Act and only for fiscal years 1996, 1997, and 1998, except 
that subsection (d) and the amendments made by such subsection 
shall also be effective for fiscal year 1999.

   section 8 fair market rentals, administrative fees, and delay in 
                               reissuance

  Sec. 403. (a) * * *

           *       *       *       *       *       *       *

  (c) Delay 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, 1997, and 1998] fiscal 
years 1996, 1997, 1998, and 1999 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, 
October 1, 1997 for assistance made available during fiscal 
year [1997 and October] 1997, October 1, 1998 for assistance 
made available during fiscal year 1998 and October 1, 1999 for 
assistance made available during fiscal year 1999; 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 201 OF THE DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND 
  URBAN DEVELOPMENT, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1996

        extend administrative provisions from the rescission act

  Sec. 201. (a) Public and Indian Housing Modernization.--
          (1) * * *
          [(2) Applicability.--Section 14(q) of the United 
        States Housing Act of 1937, as amended by subsection 
        (a) of this section, shall be effective only with 
        respect to assistance provided from funds made 
        available for fiscal year 1997 or any preceding fiscal 
        year.]
          (2) Applicability.--Section 14(q) of the United 
        States Housing Act of 1937 shall be effective only with 
        respect to assistance provided from funds made 
        available for fiscal year 1999 or any preceding fiscal 
        year, except that the authority in the first sentence 
        of section 14(q)(1) to use up to 10 percent of the 
        allocation of certain funds for any operating subsidy 
        purpose shall not apply to amounts made available for 
        fiscal years 1998 and 1999.

           *       *       *       *       *       *       *

                              ----------                              


UNITED STATES HOUSING ACT OF 1937

           *       *       *       *       *       *       *


TITLE I--GENERAL PROGRAM OF ASSISTED HOUSING

           *       *       *       *       *       *       *


                    lower income housing assistance

  Sec. 8. (a) * * *

           *       *       *       *       *       *       *

  (c)(1) An assistance contract entered into pursuant to this 
section shall establish the maximum monthly rent (including 
utilities and all maintenance and management charges) which the 
owner is entitled to receive for each dwelling unit with 
respect to which such assistance payments are to be made. The 
maximum monthly rent shall not exceed by more than 10 per 
centum the fair market rental established by the Secretary 
periodically but not less than annually for existing or newly 
constructed rental dwelling units of various sizes and types in 
the market area suitable for occupancy by persons assisted 
under this section, except that the maximum monthly rent may 
exceed the fair market rental (A) by more than 10 but not more 
than 20 per centum where the Secretary determines that special 
circumstances warrant such higher maximum rent or that such 
higher rent is necessary to the implementation of a housing 
strategy as defined in section 105 of the Cranston-Gonzalez 
National Affordable Housing Act, or (B) by such higher amount 
as may be requested by a tenant and approved by the public 
housing agency in accordance with paragraph (3)(B). In the case 
of newly constructed and substantially rehabilitated units, the 
exception in the preceding sentence shall not apply to more 
than 20 per centum of the total amount of authority to enter 
into annual contributions contracts for such units which is 
allocated to an area and obligated with respect to any fiscal 
year beginning on or after October 1, 1980. The maximum monthly 
rent for a single person (other than an elderly person or 
person with disabilities, if such elderly person or person with 
disabilities is living with one or more persons determined 
under the regulations of the Secretary to be essential to such 
person's care or well-being) receiving tenant-based rental 
assistance in the certificate program under subsection (b)(1) 
shall not exceed by more than the amount permitted under the 
second sentence of this paragraph the fair market rental for an 
efficiency unit, except that the Secretary, or the public 
housing agency in accordance with guidelines established by the 
Secretary, may determine not to apply the limitation in this 
sentence if there is an insufficient supply of efficiency units 
in the market area or if necessary to meet the needs of persons 
with disabilities. Proposed fair market rentals for an area 
shall be published in the Federal Register with reasonable time 
for public comment, and shall become effective upon the date of 
publication in final form in the Federal Register. Each fair 
market rental in effect under this subsection shall be adjusted 
to be effective on October 1 of each year to reflect changes, 
based on the most recent available data trended so the rentals 
will be current for the year to which they apply, of rents for 
existing or newly constructed rental dwelling units, as the 
case may be, of various sizes and types in the market area 
suitable for occupancy by persons assisted under this section. 
Notwithstanding any other provision of this section, after the 
date of enactment of the Housing and Community Development Act 
of 1977, the Secretary shall prohibit high-rise elevator 
projects for families with children unless there is no 
practical alternative. The Secretary shall establish separate 
fair market rentals under this paragraph for Westchester County 
in the State of New York. The Secretary shall also establish 
separate fair market rentals under this paragraph for Monroe 
County in the Commonwealth of Pennsylvania. In establishing 
fair market rentals for the remaining portion of the market 
area in which Monroe County is located, the Secretary shall 
establish the fair market rentals as if such portion included 
Monroe County. If units assisted under this section are exempt 
from local rent control while they are so assisted or 
otherwise, the maximum monthly rent for such units shall be 
reasonable in comparison with other units in the market area 
that are exempt from local rent control.

           *       *       *       *       *       *       *

  (o) Rental Vouchers.--(1) The Secretary may provide 
assistance using a payment standard in accordance with this 
subsection. The payment standard shall be used to determine the 
monthly assistance which may be paid for any family, as 
provided in paragraph (2) of this subsection, and shall be 
based on the fair market rental established under subsection 
(c). The payment standard for a single person (other than an 
elderly person or person with disabilities, if such elderly 
person or person with disabilities is living with one or more 
persons determined under the regulations of the Secretary to be 
essential to such person's care or well-being) shall be based 
on the fair market rental for an efficiency unit, except that 
the Secretary, or the public housing agency in accordance with 
guidelines established by the Secretary, may determine not to 
apply the limitation in this sentence if there is an 
insufficient supply of efficiency units in the market area or 
if necessary to meet the needs of persons with disabilities.
  (2) The monthly assistance payment for any family shall be 
the amount by which the payment standard for the area exceeds 
30 per centum of the family's monthly adjusted income, except 
that such monthly assistance payment shall not exceed the 
amount by which the rent for the dwelling unit (including the 
amount allowed for utilities in the case of a unit with 
separate utility metering) exceeds 10 per centum of the 
family's monthly income. Notwithstanding the preceding 
sentence, for families being admitted to the voucher program 
who remain in the same unit or complex, where the rent 
(including the amount allowed for utilities) does not exceed 
the payment standard, the monthly assistance payment for any 
family shall be the amount by which such rent exceeds the 
greater of 30 percent of the family's monthly adjusted income 
or 10 percent of the family's monthly income.

           *       *       *       *       *       *       *


  annual contributions for operation of lower income housing projects

  Sec. 9. (a)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) For purposes of making payments under this section 
(except for payments under paragraph (1)(B)), the Secretary 
shall utilize a performance funding system that is 
substantially based on the system defined in regulations and in 
effect on the date of the enactment of the Housing and 
Community Development Act of 1987 (as modified by this 
paragraph), and that establishes standards for costs of 
operation and reasonable projections of income, taking into 
account the character and location of the project and the 
characteristics of the families served, in accordance with a 
formula representing the operations of a prototype well-managed 
project. Such performance funding system shall be established 
in consultation with public housing agencies and their 
associations, be contained in a regulation promulgated by the 
Secretary prior to the start of any fiscal year to which it 
applies, and remain in effect for the duration of such fiscal 
year without change. Notwithstanding the preceding sentences, 
the Secretary shall revise the performance funding system by 
June 15, 1988, to accurately reflect the increase in insurance 
costs incurred by public housing agencies. Notwithstanding the 
preceding sentences, the Secretary may revise the performance 
funding system in a manner that takes into account equity among 
public housing agencies and that includes appropriate 
incentives for sound management. Notwithstanding sections 
583(a) and 585(a) of title 5, United States Code (as added by 
section 3(a) of the Negotiated Rulemaking Act of 1990), any 
proposed regulation providing for amendment, alteration, 
adjustment, or other change to the performance funding system 
relating to vacant public housing units, or any substantial 
change under the preceding sentence, shall be issued pursuant 
to a negotiated rulemaking procedure under subchapter IV of 
chapter 5 of such title (as added by section 3(a) of the 
Negotiated Rulemaking Act of 1990), and the Secretary shall 
establish a negotiated rulemaking committee for development of 
any such proposed regulations.

           *       *       *       *       *       *       *


    SECTION 105 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974

                          eligible activities

    Sec. 105. (a) Activities assisted under this title may 
include only--
          (1) * * *

           *       *       *       *       *       *       *

          (8) provision of public services, including but not 
        limited to those concerned with employment, crime 
        prevention, child care, health, drug abuse, education, 
        energy conservation, welfare or recreation needs, if 
        such services have not been provided by the unit of 
        general local government (through funds raised by such 
        unit, or received by such unit from the State in which 
        it is located) during any part of the twelve-month 
        period immediately preceding the date of submission of 
        the statement with respect to which funds are to be 
        made available under this title, and which are to be 
        used for such services, unless the Secretary finds that 
        the discontinuation of such services was the result of 
        events not within the control of the unit of general 
        local government, except that not more than 15 per 
        centum of the amount of any assistance to a unit of 
        general local government (or in the case of nonentitled 
        communities not more than 15 per centum statewide) 
        under this title including program income may be used 
        for activities under this paragraph unless such unit of 
        general local government used more than 15 percent of 
        the assistance received under this title for fiscal 
        year 1982 or fiscal year 1983 for such activities 
        (excluding any assistance received pursuant to Public 
        Law 98-8), in which case such unit of general local 
        government may use not more than the percentage or 
        amount of such assistance used for such activities for 
        such fiscal year, whichever method of calculation 
        yields the higher amount, except that of any amount of 
        assistance under this title (including program income) 
        in each of fiscal years 1993 through [1998] 1999 to the 
        City of Los Angeles and County of Los Angeles, each 
        such unit of general government may use not more than 
        25 percent in each such fiscal year for activities 
        under this paragraph, and except that of any amount of 
        assistance under this title (including program income) 
        in fiscal year 1994 to the City of Pittsburgh, 
        Pennsylvania, such city may use not more than 20 
        percent in each such fiscal year for activities under 
        this paragraph;

           *       *       *       *       *       *       *


                      public housing modernization

  Sec. 14. (a) * * *

           *       *       *       *       *       *       *

  (q)(1) In addition to the purposes enumerated in subsections 
(a) and (b), a public housing agency may use modernization 
assistance provided under section 14, and development 
assistance provided under section 5(a) that was not allocated, 
as determined by the Secretary, for priority replacement 
housing, for any eligible activity authorized by this section, 
by section 5, or by applicable Appropriations Acts for a public 
housing agency, including the demolition, rehabilitation, 
revitalization, and replacement of existing units and projects 
and, for up to 10 percent of its allocation of such funds in 
any fiscal year, for any operating subsidy purpose authorized 
in section 9. Such assistance may involve the drawdown of funds 
on a schedule commensurate with construction draws for deposit 
into an interest earning escrow account to serve as collateral 
or credit enhancement for bonds issued by a public agency for 
the construction or rehabilitation of the development. Except 
for assistance used for operating subsidy purposes under the 
preceding sentence, assistance provided to a public housing 
agency under this section shall principally be used for the 
physical improvement, replacement of public housing, other 
capital purposes, and for associated management improvements, 
and such other extraordinary purposes as may be approved by the 
Secretary. Low-income and very low-income units assisted under 
this paragraph shall be eligible for operating subsidies, 
unless the Secretary determines that such units or projects do 
not meet other requirements of this Act.

           *       *       *       *       *       *       *


                SECTION 203 OF THE NATIONAL HOUSING ACT

                         insurance of mortgages

    Sec. 203. (a) * * *
    (b) To be eligible for insurance under this section a 
mortgage shall--
          (1) Have been made to, and be held by, a mortgagee 
        approved by the Secretary as responsible and able to 
        service the mortgage properly.
          (2) Involve a principal obligation (including such 
        initial service charges, appraisal, inspection, and 
        other fees as the Secretary shall approve) in an 
        amount--
                  (A) not to exceed the lesser of--
                          (i) in the case of a 1-family 
                        residence, 95 percent of the median 1-
                        family house price in the area, as 
                        determined by the Secretary; in the 
                        case of a 2-family residence, 107 
                        percent of such median price; in the 
                        case of a 3-family residence, 130 
                        percent of such median price; or in the 
                        case of a 4-family residence, 150 
                        percent of such median price; or
                          [(ii) 75 percent of the dollar amount 
                        limitation determined under section 
                        305(a)(2) of the Federal Home Loan 
                        Mortgage Corporation Act for a 
                        residence of the applicable size;
                except that the applicable dollar amount 
                limitation in effect for any area under this 
                subparagraph may not be less than the grater of 
                the dollar amount limitation in effect under 
                this section for the area on the date of 
                enactment of the Housing Choice and Community 
                Investment Act of 1994 or 38 percent of the 
                dollar amount limitation determined under 
                section 305(a)(2) of the Federal Home Loan 
                Mortgage Corporation Act for a residence of the 
                applicable size; and]
                          (ii) 87 percent of the dollar amount 
                        limitation determined under section 
                        305(a)(2) of the Federal Home Loan 
                        Mortgage Corporation Act for a 
                        residence of the applicable size;
                except that the dollar amount limitation in 
                effect for any area under this subparagraph may 
                not be less than 48 percent of the dollar 
                limitation determined under section 305(a)(2) 
                of the Federal Home Loan Mortgage Corporation 
                Act for a residence of the applicable size; and
                  (B) except as otherwise provided in this 
                paragraph (2), not to exceed an amount equal to 
                the sum of--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) 90 percent of such value in 
                        excess of $125,000.
                [For purposes of the preceding sentence, the 
                term ``area'' means a county, or a metropolitan 
                statistical area as established by the Office 
                of Management and Budget, whichever results in 
                the higher dollar amount.] For purposes of the 
                preceding sentence, the term ``area'' means a 
                metropolitan statistical area as established by 
                the Office of Management and Budget; and the 
                median 1-family house price for an area shall 
                be equal to the median 1-family house price of 
                the county within the area that has the highest 
                such median price. If the mortgage to be 
                insured under this section covers property on 
                which there is located a one- to four-family 
                residence, and the appraised value of the 
                property, as of the date the mortgage is 
                accepted for insurance, does not exceed 
                $50,000, the principal obligation may be in an 
                amount not to exceed 97 percent of such 
                appraised value. If the mortgagor is a veteran 
                and the mortgage to be insured under this 
                section covers property upon which there is 
                located a dwelling designed principally for a 
                one-family residence, the principal obligation 
                may be in an amount equal to the sum of (i) 100 
                per centum of $25,000 of the appraised value of 
                the property as of the date the mortgage is 
                accepted for insurance, and (ii) 95 per centum 
                of such value in excess of $25,000. 
                Notwithstanding any other provision of this 
                section, in any case where the dwelling is not 
                approved for mortgage insurance prior to the 
                beginning of construction, such mortgage shall 
                not exceed 90 per centum of the entire 
                appraised value of the property as of the date 
                the mortgage is accepted for insurance, unless 
                (i) the dwelling was completed more than one 
                year prior to the application for mortgage 
                insurance, or (ii) the dwelling was approved 
                for guaranty, insurance, or a direct loan under 
                chapter 37 of title 38, United States Code, 
                prior to the beginning of construction, or 
                (iii) the dwelling is covered by a consumer 
                protection or warranty plan acceptable to the 
                Secretary and satisfies all requirements which 
                would have been applicable if such dwelling had 
                been approved for mortgage insurance prior to 
                the beginning of construction. As used herein, 
                the term ``veteran'' means any person who 
                served on active duty in the armed forces of 
                the United States for a period of not less than 
                90 days (or as certified by the Secretary of 
                Defense as having performed extra-hazardous 
                service), and who was discharged or released 
                therefrom under conditions other than 
                dishonorable, except that persons enlisting in 
                the armed forces after September 7, 1980, or 
                entering active duty after October 16, 1981, 
                shall have their eligibility determined in 
                accordance with section 3103A(d) of title 38, 
                United States Code.

           *       *       *       *       *       *       *


               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 1998 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. Three new general provisions are included in the 
bill. Section 422 is included which allows funds to be used for 
an endowment of the United States/Mexico Foundation. Section 
423 has been included which waives the application of numerous 
statutes with regard to Consumer Product Safety Commission 
rule-making. Finally, section 424 changes FHA loan limits.
    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 and extending the availability of funds.
    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 
1999.
     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 
unobligated 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 eight provisions have been carried in previous 
appropriations Acts. In addition, a new provision has been 
included which renames the VA Medical Center in Salisbury, 
North Carolina.
    Language is included under Department of Housing and Urban 
Development, housing certificate fund, which limits the use of 
funds for specific housing activities, earmarks funds for 
counseling, and earmarks funds for welfare-to-work certificates 
and vouchers.
    Language is included under the Department of Housing and 
Urban Development, public housing capital fund, which transfers 
balances from public housing service coordinators.
    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 a housing authority and which amends environmental 
review provisions.
    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 
define the term ``drug related crime,'' and allows the 
Secretary to place a restriction on the use of funds for sports 
grants.
    Language is included under Department of Housing and Urban 
Development, housing opportunities for persons with AIDS, which 
provides for use of funds for technical assistance.
    Language is included under the Department of Housing and 
Urban Development, community development block grants fund, 
which earmarks funds for specific housing organizations and 
programs, limits the expenses for planning and management 
development and administrative activities, and modifies and 
repeals certain provisions of the CDBG program.
    Language is included under Department of Housing and Urban 
Development, home investment partnerships program, which 
earmarks funds for a counseling program.
    Language is included under Department of Housing and Urban 
Development homeless assistance grants which conditions the use 
of funds and allows funding for technical assistance.
    Language is included under the Department of Housing and 
Urban Development, housing for special populations: elderly and 
disabled, which earmarks funds for tenant-based rental 
assistance for the disabled, and which permits waivers of 
certain program provisions under the disabled and elderly 
programs.
    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 and 
mutual mortgage insurance program account, which earmarks funds 
for various purposes.
    Language is included under Department of Housing and Urban 
Development, policy development and research, research and 
technology, which earmarks funds for a new program.
    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 lead hazard control, lead hazard 
reduction, which sets-aside funds for certain programs.
    Language is included under Department of Housing and Urban 
Development, office of federal housing enterprise oversight, 
which limits net appropriations from 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, limits rents, 
imposes a minimum rent on public housing and assisted housing 
residents, provides public housing flexibility, revises 
allocations for housing opportunities for people with AIDS 
recipients, allows for collateralizations of bonds, eliminates 
the shopping incentive for voucher holders, authorizes 
renegotiation of performance funding system, allows an 
exemption from HOME and community development block grant 
rules, and that changes CDBG public service cap for Los Angeles 
and Los Angeles County.
    Language is included under Chemical Safety and Hazard 
Investigation Board, salaries and expenses, which limits the 
size of the Board.
    Language is included under Department of the Treasury, 
Community Development Financial Institutions, community 
development financial institution program account, which sets-
aside funds for various purposes.
    Language is included under Consumer Product Safety 
Commission, salaries and expenses, which limits funds available 
for proposed rule-making.
    Language is included under Corporation for National 
Service, which terminates the program.
    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 buildings.
    Language is included under the Environmental Protection 
Agency, environmental programs and management, which limits use 
of funds.
    Language is included under the Environmental Protection 
Agency, hazardous substance superfund, limiting 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, leaking underground storage tank trust fund, 
authorizing assistance to Indian tribes.
    Language is included under the Environmental Protection 
Agency, state and tribal assistance grants, which provides 
grants to states, local and 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, state and tribal assistance grants, which modifies use 
of certain grants.
    Language is included under the Environmental Protection 
Agency, state and tribal assistance grants, which modifies 
state matching requirements for colonias.
    Language is included under the Environmental Protection 
Agency, state and tribal assistance grants, permitting the 
combining of assets of state revolving funds as security for 
certain bonding purposes.
    Language is included under Executive Office of the 
President, Council on Environmental Quality and Office of 
Environmental Quality, limiting the size of the Council.
    Language is included under the Federal Emergency Management 
Agency, radiological preparedness fund, promulgating a schedule 
of fees concerning the radiological emergency preparedness 
program.
    Language is included under the Federal Emergency Management 
Agency, emergency food and shelter, 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 1999 at the level set in the 
National Flood Insurance Reform Act of 1994.
    Language is included under the Federal Emergency Management 
Agency, emergency management planning and assistance, requiring 
a pilot project regarding smoke detectors and limiting the use 
of funds for rule making.
    Language is included under the General Services 
Administration, Consumer Information Center, limiting certain 
fund and administrative expenses.
    Language is included under the National Aeronautics and 
Space Administration, administrative provision, extending the 
availability of construction of facility funds, permitting 
funds for contracts for various services in the next fiscal 
year, and requires NASA to revise its appropriations 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, requiring under 
certain circumstances proportional reductions in legislative 
earmarkings, and limits use of funds.
    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 the 
reimbursement of funds to the General Services Administration.
    Language is included under the Neighborhood Reinvestment 
Corporation, payment to the Neighborhood Reinvestment 
Corporation, earmarking funds for a new homeownership 
demonstration.
    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.
    Department of Housing and Urban Development: All programs.
    Community Development Financial Institutions.
    Consumer Product Safety Commission.
    Corporation for National and Community Service.
  Council on Environmental Quality and Office of Environmental 
            Quality (not authorized above $1,000,000).
    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 Credit Union Administration Revolving Loan Fund.
    National Science Foundation: All programs.
    Neighborhood Reinvestment Corporation.

           Balanced Budget and Emergency Deficit Control Act

    During fiscal year 1999 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 1999 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 1999 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 1999 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 302(b) of the 
Act for 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]                                            
----------------------------------------------------------------------------------------------------------------
                                                         302(b) allocation                   This bill          
                                                 ---------------------------------------------------------------
                                                      Budget                          Budget                    
                                                     authority        Outlays        authority        Outlays   
----------------------------------------------------------------------------------------------------------------
Comparison with budget resolution:                                                                              
    Discretionary...............................          71,031          80,528          71,024          80,468
    Mandatory...................................          21,540          21,254          22,276          21,240
    Total.......................................          92,571         101,782          93,300         101,708
----------------------------------------------------------------------------------------------------------------

                      Five-Year Outlay Projections

    In accordance with section 308(a)(1)(B) 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......................................           $93,300
Outlays:                                                                
    1999..............................................            52,562
    2000..............................................            22,485
    2001..............................................             9,553
    2002..............................................             3,911
    2003 and beyond...................................             4,096
                                                                        

          Financial Assistance to State and Local Governments

    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 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......................................           $26,030
Fiscal year 1999 outlays resulting therefrom..........             4,299
                                                                        

                          Full Committee Votes

    Pursuant to the provisions of clause 2(l)(2)(b) of rule XI 
of the House of Representatives, the results of each roll call 
vote on an amendment or on the motion to report, together with 
the names of those voting for and those voting against, are 
printed below:

                             Rollcall No. 1

    Date: June 25, 1998.
    Measure: VA, HUD, and Independent Agencies Appropriations 
Bill, FY 1999.
    Motion by: Mr. Fazio.
    Description of motion: To eliminate some of the 
prohibitions of activities in the bill and report dealing with 
the Kyoto Protocol.
    Results: Rejected 18 yeas to 27 nays.
        Members Voting Yea            Members Voting Nay
Ms. DeLauro                         Mr. Aderholt
Mr. Dicks                           Mr. Bonilla
Mr. Edwards                         Mr. Callahan
Mr. Fazio                           Mr. Cramer
Mr. Hefner                          Mr. Cunningham
Mr. Hoyer                           Mr. Delay
Ms. Kaptur                          Mr. Dickey
Mrs. Lowey                          Mr. Frelinghuysen
Mr. Moran                           Mr. Hobson
Mr. Obey                            Mr. Istook
Mr. Olver                           Mr. Knollenberg
Mr. Pastor                          Mr. Latham
Ms. Pelosi                          Mr. Lewis
Mr. Porter                          Mr. Livingston
Mr. Price                           Mr. Miller
Mr. Sabo                            Mr. Mollohan
Mr. Skaggs                          Mr. Nethercutt
Mr. Stokes                          Mr. Neumann
                                    Mrs. Northup
                                    Mr. Parker
                                    Mr. Regula
                                    Mr. Rogers
                                    Mr. Skeen
                                    Mr. Tiahrt
                                    Mr. Visclosky
                                    Mr. Walsh
                                    Mr. Wolf
                                    
                                    

                 ADDITIONAL VIEWS OF HON. DAVID R. OBEY

    There is one fundamental problem with this bill. It is that 
there are not sufficient resources in the allocations for the 
VA-HUD subcommittee to provide adequately for the needs 
identified by the Administration, the Congress, and the 
American people. In its current form, the bill would probably 
be vetoed by the President, and with good reason. The following 
are some of the provisions and funding levels that I hope will 
be modified as this measure moves through the process:
    Only $1.5 billion is included for the Environmental 
Protection Agency's Superfund program. This amount is $650 
million below the budget request and the level determined in 
last year's balanced budget agreement. Consequently, numerous 
contaminated toxic waste sites throughout the country will 
remain hazardous to people's health. In addition, the popular 
Brownfields program is reduced 18 percent below the request. 
For the second straight year, the Committee has included 
language limiting the Brownfields program to assessments; 
nothing is available for site cleanup. Apparently, the majority 
party has not seen the report issued by the U.S. Conference of 
Mayors in January. The summary of that report concludes: 
``Cities participating in the study identified several major 
obstacles to the redevelopment of brownfields. Cities ranked 
the lack of clean up funds as the number one impediment''. 
Perhaps the majority party is operating under the misconception 
that the Brownfields program only benefits inner-city precincts 
of major metropolitan areas. That is most certainly not the 
case. As the mayors' document summarizes: ``The report also 
finds that the proliferation of brownfields is a problem that 
affects communities of all sizes. Fifty-three cities or 36 
percent of respondents were communities with populations of 
less than 50,000. Eighty-eight cities or 59 percent of 
respondents were communities with less than 100,000 population. 
These responses confirm that brownfields are not an isolated 
problem and can be found in communities of various sizes and 
locations.''
    The Committee funded the Administration's Climate Change 
Technology Initiative at only $99 million, less than one-half 
of the $205 million requested. In addition, very broad and 
vague bill and report language is included limiting the use of 
funds regarding activities related to the Kyoto Protocol on 
climate change. Although proponents of the provisions will 
undoubtedly say the intent of the language is only to prohibit 
implementation of the Kyoto Protocol until ratification of a 
treaty by the United States Senate, the effect of the 
provisions would be much greater. The EPA has ongoing 
activities to develop and issue regulations--under existing 
statutory authorities--that would be affected by the Kyoto 
provisions. Furthermore, the report language is too extreme. 
Its effect is to prohibit the Administration from providing 
information or educating the public on the ``policies 
underlying the Kyoto protocol''. It appears the opponents of 
any response to global warming are using popular concerns with 
the Kyoto Agreement to undermine any public discussion of the 
underlying issues. But whatever the facts, the government in 
general and the Congress in particular should not stifle a full 
discussion of an issue with such potential import. There is no 
understanding of what the ``policies underlying the Koyto 
Protocol'' are. Once again, there are many ongoing 
Administration activities with separate existing legal 
authorities that could be construed by some as ``underlying the 
Kyoto Protocol''. Thus, such language invites both confusion 
and confrontation.
    As reported, the bill contains no funding for the 
Corporation for National and Community Service, or AmeriCorps. 
Language has been included to terminate the program. The House 
Republican leadership knows without a doubt that there will be 
no bill signing without funding for AmeriCorps. The 
Administration has made its support of AmeriCorps abundantly 
clear. Despite this, the Republican leaders once again have 
elected to support a charade of cutting or eliminating 
AmeriCorps funds in the House knowing the conference agreement 
will restore them.
    There are a number of instances in this bill in which the 
Committee accommodated special interests at the expense of the 
public good. Certain of these provisions have been crafted as 
innocuous-sounding items in the Committee report--and 
consequently immune to amendment on the House Floor. Most of 
these items deal with sensitive environmental and consumer 
issues. Sponsors of these provisions may state that their goals 
are to gain additional knowledge and more scientific data 
before final decisions are made. In most cases, however, their 
true objectives are to delay regulatory actions from proceeding 
under normal processes. Examples of these special interest 
provisions include one requiring additional studies and reports 
for flame retardant chemicals, ground-level ozone, mercury 
emissions, and remediation techniques for sediments 
contaminated with polychlorinated biphenyls.
    Unfortunately, this bill continues the shabby treatment of 
veterans repeatedly demonstrated by this Congress. Last year's 
balanced budget agreement called for significant cuts in 
veterans programs with funding levels below the amounts 
proposed by the Administration. This year the assault on 
veterans has been almost nonstop. First the highway bill used 
nearly $15 billion in veterans tobacco related benefits to 
offset increased spending on special demonstration projects. 
Then the belated budget resolution called for an additional $10 
billion in cuts in mandatory veterans programs. And now this 
bill again underfunds veterans medical care. Elsewhere in this 
report there is a statement that the Committee has provided an 
increase for medical care, to maintain the 1998 level. While 
technically true at the account level, this is accomplished 
only by abusing the delayed equipment obligation funding 
gimmick. Discounting this artifice, the amount provided for 
veterans medical care is $276 million less than the 1998 level. 
According to the Independent Budget issued by major veterans 
service organizations, the Committee's recommendation is $525 
million below the 1999 current services level, and nearly $1.8 
billion below their recommended 1999 funding amount.
    In conclusion, I agree with the Administration that this 
measure is highly flawed, and I will work on the House Floor 
and in conference to improve it.
                                   David Obey.
                                ------                                


                  Why Is The Federal Budget Balanced?

    Fiscal Year 1998 will mark the first balanced budget in 29 
years. On May 5, 1998 the Congressional Budget Office revised 
its surplus estimate once again predicting that the 1998 
surplus will be between $43 billion and $63 billion. The OMB's 
Mid-Session Review issued on May 26, 1998 predicts a 1998 
surplus of $39 billion. This is a remarkable turnabout given 
that as recently as FY 1992, the Federal deficit was $290 
billion. This surplus--
          Is the culmination of six years in a row of 
        successively improved fiscal balances, the longest such 
        period of improvement in history;
          Will cause the debt burden to shrink for the fourth 
        year in a row (i.e., debt held by the public as a share 
        of GDP); and
          Will cause the mandatory net interest payments to 
        start shrinking as a share of the budget and as a share 
        of the economy--leaving more room in the budget for 
        productive activities.
    Soon after these new surplus projections were released, the 
Majority Party issued a flurry of press releases making the 
claim that so-called ``Balanced Budget'' legislation and other 
bills enacted by Congress last year are responsible for this 
turnabout. Such claims are simply not credible. Just as it took 
years of fiscal imprudence in the 1980's and early 1990's to 
build up to $290 billion deficit by 1992, it took years of 
adhering to disciplined and responsible fiscal and monetary 
policies since 1992 to dig out of this deficit position.

            what caused the 1998 surplus?--cbo's explanation

    So what are the precise reasons for this dramatic 
turnaround since President Bush left office with a $290 billion 
deficit? The CBO has issued data that answers this question 
objectively and decisively.
    According to the CBO data, the remarkable fiscal turnabout 
has been due to three primary factors:
          An improved economy with six years of sustained 
        growth;
          Legislation passed by the 103rd Democratic Congress 
        in 1993 and 1994;
          A slower rise in the cost of medical care (e.g., 
        Medicare/Medicaid) than projected.
    Conspicuously absent from CBO's analysis of reasons for the 
1998 surplus is the fiscal effect of laws enacted by Republican 
congresses between 1995 and the present date. The reason for 
this is that the COB actually toes up legislation enacted in 
the period that Republicans have been in control of Congress as 
raising the deficit by more than it cut in 1998. The sum total 
of laws passed by the 104th and 105th Republican Congresses 
will cost the Treasury roughly $11,000,000,000 more in FY 1998 
than they saved.
    In January 1993 when President Clinton took office, CBO 
made the alarming prediction that the federal deficit for the 
next five years would go through the roof--to $357 billion by 
fiscal 1998. This was despite the fact that the economy was 
expected to improve over that five-year timeframe. Since then, 
we have been able to wipe out this $357 billion deficit and 
build a surplus of $43 billion--a net change of $400 billion.
    The CBO attributes this astounding turnaround to the 
following major reasons:

Major Reasons for the FY 1998 Surplus

                                                 CBO estimate (billions)
Projected FY 1998 Deficit (Jan. 1993 CBO forecast)................  $357
Major Factors for Fiscal Change Since 1992:
    Improved economy (revenues higher/.entitlement costs lower 
      than 1993 forecast).......................................\1\ -210
    Democratic Congress (budgetary effect of legislation passed in 
      1993 & 1994)................................................  -141
    Health care costs (lower cost increases for Medicare/other 
      health care programs than 1993 forecast.....................  -411
      Total Deficit Reduction.....................................  -411
Republican Congresses (budgetary effect of legislation passed 
    1995-present).................................................   +11
                        -----------------------------------------------------------------
                        ________________________________________________
      Total Fiscal Change.........................................  -400

\1\ Minimum.

    Despite claims to the contrary, CBO data show that the 
combined fiscal effect of the laws enacted by the 104th and 
105th Republican Congresses is to add $11,000,000,000 more to 
the deficit than it cut in Fiscal Year 1998.
    Clearly the COB numbers confirm that the major credit for 
creating the 1998 surplus must go to actions of the 103rd 
Democratic Congress, which not only produced real net savings 
of $141 billion, but created the conditions necessary to adopt 
pro-growth monetary policies that have been very successful. 
The centerpiece of this effort, the deficit reduction bill 
passed in 1993, was described as follows by Federal Reserve 
Chairman Greenspan:

          There's no question that the impact of bringing the 
        deficit down [through the 1993 budget bill] set in 
        place a series of events--a virtuous cycle, if I may 
        put it that way--which has led us to where we are. [In 
        testimony before the House Budget Committee, March 4, 
        1998.]

    The facts show that the 1998 budget is balanced despite 
Republican legislative efforts, not because of them.

                                
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