    [Senate Report 105-380]
    [From the U.S. Government Publishing Office]

                                                           Calendar No. 713
    105th Congress                                                   Report
                                     SENATE

     2d Session                                                     105-380
    _______________________________________________________________________

           TO PROVIDE FEDERAL HOUSING ASSISTANCE TO NATIVE HAWAIIANS

                                    _______

      October 8 (legislative day, October 2), 1998.--Ordered to be printed

    _______________________________________________________________________

       Mr. Campbell, from the Committee on Indian Affairs, submitted the
                                   following

                                  R E P O R T

                             [To accompany S. 109]

        The Committee on Indian Affairs, to which was referred the
    bill (S. 109) to provide Federal housing assistance to Native
    Hawaiians having considered the same, reports favorably thereon
    with an amendment in the nature of a substitute and recommends
    that the bill (as amended) do pass.

                                    Purpose

        The purpose of S. 109 is to implement the recommendations
    of the National Commission on American Indian, Alaska Native,
    and Native Hawaiian Housing by amending the Native American
    Housing Assistance and Self-Determination Act to address the
    housing needs of Native Hawaiians who are eligible to reside on
    lands set aside under the Hawaiian Homes Commission Act of
    1920.
        The primary objective of S. 109 is to enable Native
    Hawaiians who are eligible to reside on the Hawaiian Home Lands
    to have access to federal housing assistance that is currently
    provided to other eligible low-income American families based
    upon documented need.

                              Background and Need

        In 1920, with the enactment of Hawaiian Homes Commission
    Act, the United States set aside approximately 200,000 acres of
    public land that had been ceded to the United States in what
    was then the Territory of Hawaii to establish a permanent
    homeland for the native people of Hawaii, based upon findings
    of the Congress that Native Hawaiians were a landless people
    and a ``dying'' people. The Secretary of the Interior, Franklin
    Lane, likened the relationship between the United States and
    Native Hawaiians to the guardian-ward relationship that then
    existed between the United States and American Indians.
        As a condition of its admission into the Union of States in
    1959, the United States transferred title to the 200,000 acres
    of land to the State of Hawaii with the requirement that the
    lands be held ``in public trust'' for ``the betterment of the
    conditions of Native Hawaiians, as defined in the Hawaiian
    Homes Commission Act of 1920''. The Hawaii Admissions Act also
    required that the Hawaii State Constitution provide for the
    assumption by the new State of a trust responsibility for the
    lands. The lands are now adminstered by a State agency, the
    Department of Hawaiian Home Lands.
        However, similar to the responsibility with which the
    Secretary of the Interior is charged in the administration of
    Indian lands, the United States retained and continues to
    retain the exclusive authority to enforce the trust and to
    institute legal action against the State of Hawaii for any
    breach of the trust, as well as the executive right to consent
    to any actions affecting the lands which comprise the corpus of
    the trust and any amendments to the Hawaiian Homes Commission
    Act enacted by the legislature of the State of Hawaii affecting
    the rights of the beneficiaries under the Act.
        Within the last several years, three recent studies have
    documented the housing conditions that confront Native
    Hawaiians who either reside on the Hawaiian home lands or who
    are eligible to reside on the home lands.
        In 1992, the National Commission on American Indian, Alaska
    Native, and Native Hawaiian Housing issued its final report to
    the Congress, ``Building the Future: A Blueprint for Change''.
    The Commission's study compared housing data for Native
    Hawaiians with housing information for other citizens in the
    State of Hawaii. The Commission found that Native Hawaiians,
    like American Indians and Alaska Natives, lacked access to
    conventional financing because of the trust status of the
    Hawaiian home lands, and that Native Hawaiians had the worst
    housing conditions in the State of Hawaii and the highest
    percentage of homelessness, representing over 30 percent of the
    State's homeless population.
        The Commission concluded that the unique circumstances of
    Native Hawaiians require the enactment of new legislation to
    alleviate and address the severe housing needs of Native
    Hawaiians, and recommended that the Congress extend to Native
    Hawaiians the same federal housing assistance programs that are
    provided to American Indians and Alaska Natives under the Low-
    Income Rental, Mutual Help, Loan Guarantee Program and
    Community Development Block Grant programs. Subsequently, the
    Community Development Block Grant program authority was amended
    to address the housing needs of Native Hawaiians.
        In 1995, the U.S. Department of Housing and Urban
    Development (HUD) issued a report entitled, ``Housing Problems
    and Needs of Native Hawaiians''. The HUD report was
    particularly helpful because it compared the data on Native
    Hawaiian housing conditions with housing conditions nationally
    and with the housing conditions of American Indians and Alaska
    Natives.
        The most alarming finding of the HUD report was that Native
    Hawaiians experience the highest percentage of housing problems
    in the nation--49 percent--higher than even that of American
    Indians and Alaska Natives residing on reservations (44
    percent) and substantially higher than that of all U.S.
    households (27 percent). Additionally, the HUD study found that
    the percentage of overcrowding in the Native Hawaiian
    population is 36 percent as compared to 3 percent for all other
    households in the United States.
        Applying the HUD guidelines, 70.8 percent of Native
    Hawaiians who either reside or who are eligible to reside on
    the Hawaiian home lands have incomes which fall below the
    median family income in the United States, and 50 percent of
    those Native Hawaiians have incomes below 30 percent of the
    median family income in the United States.
        Also in 1995, the Hawaii State Department of Hawaiian Home
    Lands published a Beneficiary Needs Study as a result of
    research conducted by an independent research group. This study
    found that among the Native Hawaiian population, the needs of
    Native Hawaiians eligible to reside on the Hawaiian home lands
    are the most severe--with 95 percent of home lands applicants
    (16,000) in need of housing, and with one-half of those
    applicant households facing overcrowding and one-third paying
    more than 30 percent of their income for shelter.
        Eligibility for an assignment of Hawaiian home lands for
    purposes of housing, agricultural development or pasture lands
    is a function of federal law--the Hawaiian Homes Commission Act
    of 1920--which has defined eligibility in terms of blood
    quantum. There are approximately 60,000 Native Hawaiians who
    would be eligible to reside on the home lands, but applying for
    an assignment of a parcel of home lands is voluntary. Because
    of the lack of resources to develop infrastructure (roads,
    access to water and sewer and electricity) on the home lands as
    required by State and county laws before housing can be
    constructed, hundreds of Native Hawaiians on the waiting list
    have died before receiving an assignment of home lands.
        Once an eligible Native Hawaiian reaches the top of the
    waiting list, he or she must be able to qualify for a private
    home loan mortgage, because the limited Federal and State funds
    available to the Department of Hawaiian Home Lands have been
    used to develop infrastructure rather than the construction of
    housing. An assignment of home lands property is in the form of
    a 99-year lease. Unless the heirs of the eligible Native
    Hawaiian qualify in their own right for an assignment of home
    lands under the provisions of the Hawaiian Homes Commission
    Act, upon the death of the eligible Native Hawaiian, the heirs
    must move off the land.
        Currently, Native Hawaiians who are eligible to reside on
    the home lands but who do not qualify for private mortgage
    loans do not have access to federal housing assistance programs
    that provide assistance to low-income families. This is due to
    the fact that for many years, the federal government took the
    legal position that because the government that represented the
    Native Hawaiian people had been overthrown in 1893 and thus
    there was no government-to-government relationship with the
    United States, extending federal housing program assistance to
    lands set aside exclusively for Native Hawaiians would be
    discriminating on the basis of race or ethnicity.
        The Hawaiian Homes Commission Act not only provides
    authority for the assignment of home lands property to Native
    Hawaiians. The Act also authorizes general leases to non-
    Hawaiians. At the time the Act was passed by the Congress, it
    was anticipated that revenues derived from general leases would
    be sufficient to develop the necessary infrastructure and
    housing on the home lands. However, general lease revenue has
    not proven sufficient to address infrastructure and housing
    needs.
        In recent years, as a result of litigation involving third-
    party leases of Hawaiian home lands, the United States
    revisited its legal position and found that the authority
    contained in the Hawaiian Homes Commission Act for general
    leases to non-Hawaiians meant that the land was not set aside
    exclusively for Native Hawaiians. The non-exclusive nature of
    the land set aside was thus found not to violate Constitutional
    prohibitions on racial discrimination.
        The change in the United States' legal position may be
    further informed by the ruling of the Ninth Circuit Court of
    Appeals in Rice v. Cayetano, No. 97-16095, 146 F.3d 1075 (9th
    Cir. 1998) in which the Appeals Court compared the special
    treatment of Native Hawaiians to the special treatment of
    Indians that the Supreme Court approved in Morton v. Mancari,
    417 U.S. 535 (1974) and cited its reference to Mancari in
    Alaska Chapter, Associated Gen. Contractors v. Pierce, 694 F.2d
    1162 (9th Cir. 1981), in which the Circuit Court expressed its
    finding that preferential treatment that is grounded in the
    government's unique obligation toward Indians is a political
    rather than a racial classification, even though racial
    criteria may be used in defining eligibility.
        However, the result of the United States' earlier legal
    position was that Native Hawaiians who were eligible to reside
    on the Hawaiian Home Lands and would have otherwise been
    eligible by virtue of their low-income status to apply for
    Federal housing assistance were foreclosed from participating
    in Federal housing assistance programs that were available to
    all other eligible families in the United States.

              An Amendment in the Nature of a Substitute to S. 109

        The purpose of the amendment in the nature of a substitute
    to S. 109 is to address these well-documented housing needs of
    Native Hawaiians by extending the same federal housing
    assistance available to American Indians and Alaska Natives to
    those Native Hawaiians most in need of housing--those who have
    consistently been denied access to federally-assisted housing
    programs--Native Hawaiians who reside or are eligible to reside
    on the Hawaiian Home Lands. The substitute amendment
    incorporates the recommendations of the U.S. Department of
    Justice and the U.S. Department of Housing and Urban
    Development.\1\
    ---------------------------------------------------------------------------
        \1\ Following the U.S. Supreme Court's 1995 ruling in Adarand
    Constructors, Inc., v. Pena, the U.S. Department of Justice was charged
    with the responsibility of conducting a legal review of all federal
    programs which may provide benefits to groups defined by race or
    ethnicity. Over the course of the last year, Committee staff has
    engaged in extensive discussions with Department of Justice officials
    with regard to S. 109 to assure that the bill's provisions meet the
    standards established in Adarand.
    ---------------------------------------------------------------------------
        The earlier version of S. 109, as reported by the Committee
    on October 23, 1997, approached the amendment of the Native
    American Housing Assistance and Self-Determination Act
    (NAHASDA) by substituting the term ``Native Hawaiian'' for the
    term ``Indian'' each place the latter term appeared, and
    incorporating Titles I through IV of NAHASDA by reference. The
    amendment in the nature of a substitute to S. 109 removes any
    reference to the term ``Indian'' and instead of incorporating
    provisions of NAHASDA by reference, replicates those relevant
    provisions of NAHASDA, adapted for application to the Hawaiian
    home lands.
        Appropriations for programs authorized by the Native
    American Housing Assistance and Self-Determination Act
    (NAHASDA) to address the housing needs in Indian country are
    determined by formula. If enacted, S. 109 authorizes
    appropriations for programs to address the housing needs of
    Native Hawaiians which would be allocated to the Department of
    Hawaiian Home Lands through a block grant. An appropriation for
    federal housing assistance for Native Hawaiians would be
    separate from an appropriation for federal housing assistance
    to address the housing needs in Indian country under NAHASDA,
    and unless a separate allocation of funding for Native Hawaiian
    housing assistance is secured, there would be no funding for
    Native Hawaiian housing assistance under the NAHASDA authority.
    It is the intent of the sponsor that in no instance, will
    funding for Indian programs under NAHASDA be reduced as a
    function of the authority provided in S. 109.
        At its June, 1998 mid-year meeting, the National Congress
    of American Indians adopted a resolution in support of passage
    of the amendment in the nature of a substitute to S. 109. The
    National American Indian Housing Council also approved a
    resolution in support of passage of the amendment in the nature
    of a substitute to S. 109 at the Council's June, 1998 meeting.

                              Legislative History

        S. 109 was introduced on January 21, 1997, by Senator
    Inouye, for himself and Senator Akaka, and was referred to the
    Committee on Indian Affairs. A hearing on S. 109 was held on
    April 3, 1997, in Honolulu, Hawaii. The Committee reported S.
    109 to the full Senate on October 23, 1997, with the agreement
    that concerns raised by the Chairman's staff would be addressed
    prior to seeking action on the measure by the Senate. In an
    effort to accommodate those concerns, S. 109 was redrafted, and
    an amendment in the nature of a substitute to S. 109 was
    adopted and ordered reported to the full Senate on July 15,
    1998.

                Committee Recommendation and Tabulation of Vote

        The Committee on Indian Affairs, in an open business
    session on July 15, 1998, adopted an amendment in the nature of
    a substitute to S. 109 by voice vote and ordered the bill, as
    amended, reported favorably to the Senate.

                          Section-by-Section Analysis

        Section 1.--Section 1 sets forth the short title of the
    Act, indicating that the Act may be cited as the ``Native
    American Housing Assistance and Self-Determination Amendments
    of 1998''.
        Section 2.--Section 2 sets forth the findings of the
    Congress.
        Paragraph 1 of section 2 sets forth the finding of the
    Congress that the United States has undertaken a responsibility
    to promote the general welfare of the United States by
    employing Federal resources to remedy the unsafe and unsanitary
    housing conditions and the acute shortage of decent, safe, and
    sanitary dwellings for families of lower income, including
    Native Hawaiian families of lower income, and by developing
    effective partnerships with governmental and private entities
    to accomplish these objectives.
        Paragraph 2 of section 2 sets forth the finding of the
    Congress that pursuant to the provisions of the Hawaiian Homes
    Commission Act, 1920, (42 Stat. 108 et seq.), the United States
    set aside 200,000 acres of land in the Federal territory that
    later became the State of Hawaii in 1959, in order to establish
    a homeland for the native people of Hawaii, also known as
    Native Hawaiians. The lands which were set aside under the Act
    were referred to in section 201(a)(5) of the Act as Hawaiian
    Home Lands.
        Paragraph 3 of section 2 sets forth the finding of the
    Congress that despite the intent of the Congress in 1920 to
    address the housing needs of Native Hawaiians through the
    enactment of the Hawaiian Homes Commission Act, 1920, in the
    years which have followed, there have been agencies of the
    United States which have taken the legal position that
    subsequently-enacted Federal housing laws designed to address
    the housing needs of all eligible families in the United States
    could not be extended to address the needs for housing and
    infrastructure development on the Hawaiian Home Lands on the
    grounds that the lands were set aside exclusively for a group
    of people who could be identified by their race and/or
    ethnicity.
        The legal theory was that the extension of Federal housing
    assistance programs to such lands would constitute
    discrimination on the basis of race in violation of the
    Fourteenth Amendment to the U.S. Constitution. The United
    States has subsequently revised its legal position based upon
    its finding that the lands set aside under the Hawaiian Homes
    Commission Act were not exclusively set aside for Native
    Hawaiians because the 1920 Act also set aside lands for general
    leasing to non-Hawaiians. In addition, the change in the United
    States' legal position may be further informed by the ruling of
    the Ninth Circuit Court of Appeals in Rice v. Cayetano, No. 97-
    16095, 146 F.3d 1075 (9th Cir. 1998) in which the Appeals Court
    compared the special treatment of Native Hawaiians to the
    special treatment of Indians that the Supreme Court approved in
    Morton v. Mancari, 417 U.S. 535 (1974) and cited its reference
    to Mancari in Alaska Chapter, Associated Gen. Contractors v.
    Pierce, 694 F.2d 1162 (9th Cir. 1981), in which the Circuit
    Court expressed its finding that preferential treatment that is
    grounded in the government's unique obligation toward Indians
    is a political rather than a racial classification, even though
    racial criteria may be used in defining eligibility.
        However, the result of the United States' earlier legal
    position was that Native Hawaiians who were eligible to reside
    on the Hawaiian Home Lands and would have otherwise been
    eligible by virtue of their low-income status to apply for
    Federal housing assistance were foreclosed from participating
    in Federal housing assistance programs that were available to
    all other eligible families in the United States.
        Paragraph 4 of section 2 sets forth the finding of the
    Congress that although Federal housing assistance programs have
    been administered on a racially-neutral basis in the State of
    Hawaii, Native Hawaiians continue to have the greatest unmet
    need for housing and the highest rates of overcrowding, not
    only in the State of Hawaii, but the greatest unmet need for
    housing and the highest rates of overcrowding in the United
    States. Three studies conducted in the last several years have
    documented the findings of the Congress set forth in paragraphs
    5, 6, 7 and 8 of section 2.
        Paragraph 5 of section 2 sets forth the finding of the
    Congress that among the population of native people in the
    United States, Native Hawaiians experience the highest
    percentage of housing problems in the United States--
    specifically, forty-nine percent of the Native Hawaiian
    population experience housing problems as compared to forty-
    four percent of the American Indian and Alaska Native
    population, and as compared to twenty-seven percent for all
    other households in the United States. Paragraph 5 of section 2
    also sets forth the finding of the Congress that overcrowding
    in Native Hawaiian households is thirty-six percent as compared
    to three percent for all other households in the United States.
        Pagraph 6 of section 2 sets forth the findings of the
    Congress that the needs of the population of Native Hawaiians
    who are eligible to reside on the Hawaiian Home Lands are the
    most severe, as evidenced by the finding that the percentage of
    overcrowding in Native Hawaiian households on the Hawaiian Home
    Lands is thirty-six percent and that ninety-five percent of
    Native Hawaiians who are eligible to reside on the Hawaiian
    Home Lands, or approximately thirteen thousand Native
    Hawaiians, are in need of housing.
        Paragraph 7 of section 2 sets forth the finding of the
    Congress that under the guidelines of the Department of Housing
    and Urban Development, 70.8 percent of Native Hawaiians who
    either reside on the Hawaiian Home Lands or who are eligible to
    do so have incomes that fall below the median family income,
    and fifty percent of Native Hawaiians who either reside on the
    Hawaiian Home Lands or who are eligible to do so have incomes
    below thirty percent of the median family income.
        Paragraph 8 of section 2 sets forth the finding of the
    Congress that one-third of those Native Hawaiians who are
    eligible to reside on the Hawaiian Home Lands pay more than
    thirty percent of their income for shelter, and one-half of
    those Native Hawaiians who are eligible to reside on the
    Hawaiian Home Lands face overcrowding in their households.
        Paragraph 9 of section 2 sets forth the finding of the
    Congress that the extraordinarily severe housing needs of
    Native Hawaiians demonstrate that Native Hawaiians who either
    reside on the Hawaiian Home Lands or who are eligible to reside
    on the Hawaiian Home Lands have been denied equal access to
    Federal low-income housing assistance programs available to
    other eligible American families, and that a more effective
    means of addressing the housing needs of Native Hawaiians must
    be authorized.
        Paragraph 10 of section 2 sets forth the finding of the
    Congress that in order to address the continuing prevalence of
    extraordinarily severe housing needs among Native Hawaiians who
    either reside on the Hawaiian Home Lands or who are eligible to
    reside on the Hawaiian Home Lands, it is necessary to extend
    the Federal low-income housing assistance available to American
    Indians and Alaska Natives under the Native American Housing
    Assistance and Self-Determination Act of 1996 to those Native
    Hawaiians, consistent with the recommendations of the National
    Commission on American Indian, Alaska Native, and Native
    Hawaiian Housing.
        Paragraph 11 of section 2 sets forth the finding of the
    Congress that under the treaty-making power of the United
    States, the Congress had the authority to confirm a treaty
    between the United States and the government that represented
    the Hawaiian people, and pursuant to Article 1, section 8,
    clause 3 of the United States Constitution, the authority which
    is vested in the Congress to address matters affecting the
    indigenous peoples of the United States, includes the authority
    to address matters affecting Native Hawaiians.
        Paragraph 12 of section 2 sets forth the finding of the
    Congress that through treaties, Federal statutes, and Federal
    court rulings, the United States has recognized and reaffirmed
    that the political status of Native Hawaiians is comparable to
    that of American Indians and Alaska Natives; and that the
    aboriginal, indigenous people of the United States have a
    continuing right to autonomy in their internal affairs and an
    ongoing right of self-determination and self-governance that
    has never been extinguished
        Paragraph 13 of section 2 sets forth the finding of the
    Congress that the political relationship between the United
    States and the Native Hawaiian people has been recognized and
    reaffirmed by the United States through the enactment of
    Federal laws which include Native Hawaiians in the Native
    American Programs Act of 1974, the American Indian Religious
    Freedom Act, the National Museum of the American Indian Act,
    the Native American Graves Protection and Repatriation Act, the
    National Historic Preservation Act, the Native American
    Languages Act of 1992, the American Indian, Alaska Native and
    Native Hawaiian Culture and Arts Development Act, the Job
    Training Partnership Act, and the Older Americans Act of 1965.
        Paragraph 14 of section 2 sets forth the finding of the
    Congress that in the area of housing, the United States has
    recognized and reaffirmed its political relationship with the
    Native Hawaiian people through: (1) the enactment of the
    Hawaiian Homes Commission Act, 1920, which set aside
    approximately 200,000 acres of public lands in the Territory of
    Hawaii that had been ceded to the United States for
    homesteading by Native Hawaiians inorder to rehabilitate a
    landless and dying people; (2) the enactment of the Act entitled ``An
    Act to provide for the admission of the State of Hawaii into the
    Union'', approved March 18, 1958 (73 Stat. 4) by ceding title to the
    public lands formerly held by the United States to the State of Hawaii
    and mandating that those lands be held in public trust, for the
    betterment of the conditions of Native Hawaiians, and by transferring
    to the State of Hawaii what the United States deemed to be a trust
    responsibility for the administration of the Hawaiian Home Lands but
    retaining the exclusive authority to enforce the trust, and the
    exclusive right of the United States to consent to any actions
    affecting the land which comprise the corpus of the trust as well as
    the exclusive right to consent to any amendment to the Hawaiian Homes
    Commission Act, 1920, affecting the rights of beneficiaries under the
    Act, enacted by the legislature of the State of Hawaii; (3) the
    authorization of mortgage loans insured by the Federal Housing
    Administration for the purchase, construction, or refinancing of homes
    on Hawaiian Home Lands under the National Housing Act; (4) authorizing
    Native Hawaiian representation on the National Commission on American
    Indian, Alaska Native, and Native Hawaiian Housing under Public Law
    101-235; (5) the inclusion of Native Hawaiians in the definition under
    section 3672 of title 38, United States Code, applicable to subchapter
    V of chapter 37 of title 38, United States Code, relating to a housing
    loan program for Native American veterans; and (5) the enactment of the
    Hawaiian Home Lands Recovery Act which establishes a process for the
    conveyance of Federal lands to the Department of Hawaiian Home Lands
    that are equivalent in value to lands acquired by the United States
    from the Hawaiian Home Lands inventory.
        Section 3.--Section 3 amends the Native American Housing
    Assistance and Self-Determination Act of 1996 by adding a new
    Title VIII at the end of that Act, to provide authority for the
    provision of housing assistance to low-income Native Hawaiian
    families.

              Title VIII--Housing Assistance for Native Hawaiians

        Section 801.--Section 801 sets forth the definitions for
    purposes of Title VIII.
        Section 801(1).--Paragraph 1 of section 801 sets forth the
    definition of the term ``Department of Hawaiian Home Lands''.
    The term ``Department of Hawaiian Home Lands'' or
    ``Department'', as used in Title VIII, means the agency or
    department of the government of the State of Hawaii that is
    responsible for the administration of the Hawaiian Homes
    Commission Act, 1920.
        Section 801(2).--Paragraph 2 of section 801 sets forth the
    definition of the term ``Director''. The term ``Director'', as
    used in Title VIII, means the Director of the Department of
    Hawaiian Home Lands.
        Section 801(3).--Paragraph 3 of section 801 sets forth the
    definition of the term ``elderly family'' and ``near-elderly
    family''. Subparagraph (A) of paragraph 3 provides that the
    term ``elderly family'' or ``near-elderly family'', as used in
    Title VIII, means a family whose head, or his or her spouse, or
    whose sole member is for an elderly family, an elderly person
    or for a near-elderly family, a near-elderly person.
    Subparagraph (B) of paragraph 3 provides that the term
    ``elderly family'' or ``near-elderly family'' includes two or
    more elderly persons or near-elderly persons, as the case may
    be, living together; and one or more persons elderly or near-
    elderly persons living with one or more persons determined
    under the housing plan to be essential to their care or well-
    being.
        Section 801(4).--Paragraph 4 of section 801 sets forth the
    definition of ``Hawaiian Home Lands''. The term ``Hawaiian Home
    Lands'', as used in Title VIII, means lands that have the
    status as Hawaiian Home Lands under section 204 of the Hawaiian
    Homes Commission Act or lands acquired pursuant to the Hawaiian
    Homes Commission Act.
        Section 801(5).--Paragraph 5 of section 801 sets forth the
    definition of the term ``Housing Area''. The term ``housing
    area'', as used in Title VIII, means an area of the Hawaiian
    Home Lands with respect to which the Department of Hawaiian
    Home Lands is authorized to provide assistance for affordable
    housing under this Act.
        Section 801(6).--Paragraph 6 of section 801 sets forth the
    definition of the term ``Housing Entity''. The term ``housing
    entity'', as used in Title VIII, means the Department of
    Hawaiian Home Lands.
        Section 801(7).--Paragraph 7 of section 801 sets forth the
    definition of the term ``Housing Plan''. The term ``housing
    plan'', as used in Title VIII, means a plan developed by the
    Department of Hawaiian Home Lands.
        Section 801(8).--Paragraph 8 of section 801 sets forth the
    definition of the term ``Median Income''. The term ``median
    income'', as used in Title VIII, means, with respect to an area
    that is a Hawaiian housing area, the greater of the median
    income for the Hawaiian housing area, which is to be determined
    by the Secretary of Housing and Urban Development, or the
    median income for the State of Hawaii.
        Section 801(9).--Paragraph 9 of section 801 sets forth the
    definition of the term ``Native Hawaiian''. The term ``Native
    Hawaiian'', as used in Title VIII, has the meaning given the
    term ``Native Hawaiian'' in section 201 of the Hawaiian Homes
    Commission Act, 1920.
        Section 802.--Section 802 provides authority for the
    provision of block grants for affordable housing activities.
        Section 802(a).--Section 802(a) provides that for each
    fiscal year, the Secretary of Housing and Urban Development
    shall, to the extent amounts are made available to carry out
    Title VIII, make a grant under Title VIII to the Department of
    Hawaiian Home Lands to carry out affordable housing activities
    for Native Hawaiian families residing on or near the Hawaiian
    Home Lands.
        Section 802(b).--Section 802(b) provides that the Secretary
    of Housing and Urban Development may make a grant under Title
    VIII to the Department of Hawaiian Home Lands for a fiscal year
    but only if the Director has submitted a housing plan for the
    fiscal year to the Secretary and the Secretary has made a
    determination under section 804 that the housing plan complies
    with the requirements of section 803. The Secretary may waive
    the applicability of these requirements, in part, if the
    Secretary finds that the Department of Hawaiian Home Lands has
    not complied or cannot comply with the requirements due to
    circumstances beyond the control of the Department of Hawaiian
    Home Lands.
        Section 802(c).--Section 802(c) provides that except as
    provided in section 802(e), the amounts provided under a grant
    under section 802 may be used only for affordable housing
    activities under Title VIII that are consistent with a housing
    plan approved under section 804.
        Section 802(d).--Section 802(d) provides that the Secretary
    of Housing and Urban Development shall by regulation authorize
    the Department of Hawaiian Home Lands to use a percentage of
    any grant amounts received under Title VIII for any reasonable
    administrative and planning expenses of the Department relating
    to carrying out Title VIII and activities assisted with those
    amounts. The administrative and planning expenses include costs
    for the salaries of individuals engaged in administering and
    managing affordable housing activities assisted with grant
    amounts provided under Title VIII, and expenses incurred in
    preparing a housing plan under section 803.
        Section 802(e).--Section 802(e) provides that the Director
    shall make all reasonable efforts, consistent with the purposes
    of Title VIII, to maximize participation by the private sector,
    including nonprofit organizations and for-profit entities, in
    implementing a housing plan that has been approved by the
    Secretary of Housing and Urban Development under section 803.
        Section 802(f).--Section 802(f) provides that the Secretary
    of Housing and Urban Development shall be guided by the
    relevant program requirements of titles I, II and IV of the
    Native American Housing Assistance and Self-Determination Act
    in the implementation of housing assistance programs for Native
    Hawaiians under Title VIII. The Secretary may make exceptions
    to, or modifications of, program requirements for Native
    American housing assistance set forth in titles I, II and IV as
    necessary and appropriate to meet the unique situation and
    housing needs of Native Hawaiians.
        Section 803.--Section 803 sets forth the requirements
    associated with housing plans.
        Section 803(a).--Section 803(a) provides that the Secretary
    shall require the Director to submit a housing plan under
    section 803 for each fiscal year and provide for the review of
    each plan submitted under section 803.
        Section 803(b).--Section 803(b) provides that each housing
    plan under section 803 shall be in a form prescribed by the
    Secretary and contain, with respect to the five-year period
    beginning with the fiscal year for which the plan is submitted:
    (1) a general statement of the mission of the Department of
    Hawaiian Home Lands to serve the needs of the low-income
    families to be served by the Department; (2) a statement of the
    goals and objectives of the Department of Hawaiian Home Lands
    to enable the Department to serve the needs identified during
    the period; and (3) an overview of the activities planned
    during the period including an analysis of the manner in which
    the activities will enable the Department to meet its mission,
    goals, and objectives.
        Section 803(c).--Section 803(c) provides that a housing
    plan under section 803 shall be in a form prescribed by the
    Secretary of Housing and Urban Development and contain
    information relating to the fiscal year for which the
    assistance under Title VIII is to be made available,
    including--
              A statement of the goals and objectives to be
            accomplished during the period covered by the plan;
              A statement of the housing needs of the low-income
            families served by the Department and the means by
            which those needs will be addressed during the period
            covered by the plan, including a description of the
            estimated housing needs and the need for assistance for
            the low-income families to be served by the Department,
            including a description of the manner in which the
            geographical distribution of assistance is consistent
            with the geographical needs of those families and needs
            for various categories of housing assistance, and a
            description of the estimated housing needs for all
            families to be served by the Department;
              An operating budget for the Department in a form
            prescribed by the Secretary that includes an
            identification and a description of the financial
            resources reasonably available to the Department to
            carry out the purposes of Title VIII, including an
            explanation of the manner in which amounts made
            available will be used to leverage additional resources
            and the uses to which the resources will be committed,
            including eligible and required affordable housing
            activities and administrative expenses;
              A statement of the affordable housing resources
            currently available at the time of the submittal of the
            plan and to be made available during the period covered
            by the plan, including--
                      A description of the significant
                    characteristics of the housing market in the
                    State of Hawaii, including the availability of
                    housing from other public sources, private
                    market housing and the manner in which the
                    characteristics influence the decision of the
                    Department to use grant amounts to be provided
                    under Title VIII for rental assistance, the
                    production of new units, the acquisition of
                    existing units, or the rehabilitation of units;
                      A description of the structure, coordination,
                    and means of cooperation between the Department
                    and any other governmental entities in the
                    development, submission, or implementation of
                    housing plans, including a description of the
                    involvement of private, public, and nonprofit
                    organizations and institutions, the use of loan
                    guarantees under section 184A of the Housing
                    and Community Development Act of 1992, and
                    other housing assistance provided by the United
                    States, including loans, grants, and mortgage
                    assistance,
                      A description of the manner in which the plan
                    will address the needs identified;
                      A description of any existing or anticipated
                    home ownership programs and rental programs to
                    be carried out during the period covered by the
                    plan and the requirements and assistance
                    available under those programs;
                      A description of any existing or anticipated
                    housing rehabilitation programs necessary to
                    ensure the long-term viability of the housing
                    to be carried out during the period covered by
                    the plan, and the requirements and assistance
                    available under those programs;
                      A description of all other existing or
                    anticipated housing assistance provided by the
                    Department during the period covered by the
                    plan including transitional housing, homeless
                    housing, college housing, and supportive
                    services housing, and the requirements and
                    assistance available under such programs;
                      A description of any housing to be demolished
                    or disposed of, a timetable for that demolition
                    or disposition, and any other information
                    required by the Secretary with respect to that
                    demolition or disposition;
                      A description of the manner in which the
                    Department will coordinate with welfare
                    agencies in the State of Hawaii to ensure that
                    residents of affordable housing will be
                    provided with access to resources to assist in
                    obtaining employment and achieving self-
                    sufficiency;
                      A description of the requirements established
                    by the Department to promote the safety of
                    residents of affordable housing, facilitate the
                    undertaking of crime prevention measures, allow
                    resident input and involvement, including the
                    establishment of resident organizations, and
                    allow for the coordination of crime prevention
                    activities between the Department and local law
                    enforcement officials; and
                      A description of the entities that will carry
                    out the activities under the plan, including
                    the organizational capacity and key personnel
                    of the entities;
                      Evidence of compliance that shall include, as
                    appropriate--
                              A certification that the Department
                            will comply with title VI of the Civil
                            Rights Act of 1964 or with title VIII
                            of the Civil Rights Act of 1968 in
                            carrying out Title VIII, to the extent
                            that such title is applicable, and
                            other applicable Federal statutes;
                              A certification that the Department
                            will require adequate insurance
                            coverage for housing units that are
                            owned and operated or assisted with
                            grant amounts provided under this
                            title, in compliance with such
                            requirements as may be established by
                            the Secretary;
                              A certificate that policies are in
                            effect and are available for review by
                            the Secretary and the public governing
                            the eligibility, admission, and
                            occupancy of families for housing
                            assisted with grant amounts provided
                            under Title VIII;
                              A certificate that policies are in
                            effect and are available for review by
                            the Secretary and the public governing
                            rents charged, including the methods by
                            which such rents or home buyer payments
                            are determined, for housing assisted
                            with grant amounts provided under Title
                            VIII; and
                              A certificate that policies are in
                            effect and are available for review by
                            the Secretary and the public governing
                            the management and maintenance of
                            housing assisted with grant amounts
                            provided under Title VIII.
        Section 803(d).--Section 803(d) addresses the applicability
    of civil rights statutes.
        Section 803(d)(1).--Section 803(d)(1) provides that to the
    extent that the requirements of title VI of the Civil Rights
    Act of 1964 or of title VIII of the Civil Rights Act of 1968
    apply to assistance provided under title VIII of this Act,
    nothing in the requirements concerning discrimination on the
    basis of race shall be construed to prevent the provision of
    assistance under title VIII of this Act to the Department of
    Hawaiian Home Lands on the basis that the Department served
    Native Hawaiians; or to an eligible family on the basis that
    the family is a Native Hawaiian family.
        Section 803(d)(2).--Section 803(d)(2) provides that program
    eligibility under title VIII of this Act may be restricted to
    Native Hawaiians. Subject to the proviso, no person may be
    discriminated against on the basis of race, color, national
    origin, religion, sex, familial status, or disability.
        Section 803(e).--Section 803(e) provides that as condition
    of receiving grant amounts under title VIII of this Act, the
    Department of Hawaiian Home Lands shall, to the extend
    practicable, work with or subcontract with private nonprofit
    organizations experienced in the planning and development of
    affordable housing for Native Hawaiians to carry out affordable
    housing activities with those grants.
        Section 804.--Section 804 addresses the Secretary's review
    of the housing plans to be submitted under section 803.
        Section 804(a)(1).--Section 804(a)(1) provides that the
    Secretary is to conduct a review of a housing plan submitted to
    him pursuant to section 803 to ensure that the plan complies
    with the requirements of section 803, and the Secretary shall
    have the discretion to review the plan only to the extent that
    the Secretary considers the review necessary.
        Section 804(2).--Section 804(a)(2) provides that no later
    than sixty days after receiving a plan which is required to be
    submitted pursuant to section 803, the Secretary is to notify
    the Director of the Department of Hawaiian Home Lands as to
    whether the plan complies with the requirements of section 803,
    and if the Secretary does not notify the Director as required
    under section 804(a)(2) and section 804(b) upon the expiration
    of the sixty day period, the plan shall be considered to have
    been determined to comply with the requirements under section
    803 and the Director shall be considered to have been notified
    of compliance.
        Section 804(b).--Section 804(b) provides that if the
    Secretary determines that a plan submitted under section 803
    does not comply with the requirements of section 803, the
    Secretary shall specify in the notice under section 804(a) the
    reasons for noncompliance and any modifications that are
    necessary for the plan to meet the requirements of section 803.
        Section 804(c).--Section 804(c) provides that after the
    Director of the Department of Hawaiian Home Lands submits a
    housing plan under section 803, or any amendment or
    modification to the plan, to the Secretary, to the extent that
    the Secretary considers such an action to be necessary to make
    a determination under section 804(c), the Secretary shall
    review the plan, including any amendments or modifications
    thereto, to determine whether the contents of the plan set
    forth the information required by section 803 to be contained
    in the housing plan, whether the contents of the plan are
    consistent with information and data available to the
    Secretary, and whether the contents of the plan are not
    prohibited by or inconsistent with any provision of this Act or
    any other applicable law. If the Secretary makes a
    determination under section 804(c) that any of the appropriate
    certifications under section 803(c)(2)(E) are not included in
    the plan, the plan shall be considered to be incomplete.
        Section 804(d).--Section 804(d) provides that after a
    section 803 plan has been submitted for a fiscal year, the
    Director of the Department of Hawaiian Home Lands may comply
    with the provisions of section 803 for any succeeding fiscal
    year (with respect to information included for the five-year
    period under section 803(b) or for the one-year period under
    section 803(c)) by submitting only such information regarding
    such changes as may be necessary to update the plan previously
    submitted. However, the Director must submit a complete plan
    under section 803 not later than four years after submitting an
    initial plan under section 803, and not less frequently than
    every four years.
        Section 804(e).--Section 804(e) provides that section 804
    and section 803 are to take effect on the date provided by the
    Secretary pursuant to section 807(a) to provide for timely
    submission and review of the housing plan as necessary for the
    provision of assistance under title VIII of this Act for fiscal
    year 2000.
        Section 805.--Section 805 addresses the treatment of
    program income and labor standards.
        Section 805(a).--Section 805(a) provides that the
    Department of Hawaiian Home Lands may retain any program income
    that is realized from any grant amounts received by the
    Department under title VIII of this Act if that income was
    realized after the initial disbursement of grant amounts
    received by the Department and the Director agrees to use the
    program income for affordable housing activities in accordance
    with the provisions of title VIII of this Act. Section 805(a)
    further provides that the Secretary may not reduce the grant
    amount for the Department of Hawaiian Home Lands based solely
    on whether the Department retains program income under this
    section or the amount of any such program income retained.
    Section 805(a) provides that the Secretary may be regulation,
    exclude from consideration as program income any amounts
    determined to be so small that compliance with the requirements
    of section 805(a) would create an unreasonable administrative
    burden on the Department.
        Section 805(b)(1).--Section 805(b)(1) provides that any
    contract or agreement for assistance, sale, or lease pursuant
    to title VIII of this Act shall contain a provision requiring
    that an amount not less than the wages prevailing in the
    locality, as determined or adopted (subsequent to a
    determination under applicable state or local law) by the
    Secretary, shall be paid to all architects, technical
    engineers, draftsmen, technicians employed in the development
    and all maintenance, and laborers and mechanics employed in the
    operation of the affordable housing project involved, and a
    provision that an amount not less than wages prevailing in the
    locality, as predetermined by the Secretary of Labor pursuant
    to the Act commonly known as the Davis-Bacon Act shall be paid
    to all laborers and mechanics employed in the development of
    the affordable housing involved.
        Section 805(b)(2).--Section 805(b)(2) provides that the
    requirements of section 805(b)(1) and the provisions relating
    to wages required under section 805(b)(1) in any contract or
    agreement for assistance, sale, or lease under title VIII of
    this Act, shall not apply to any individual who performs the
    services for which the individual volunteered and who is not
    otherwise employed at any time in the construction work and
    received no compensation or is paid expenses, reasonable
    benefits, or a nominal fee for those services.
        Section 806.--Section 806 addresses environmental review,
    decision making and action under the National Environmental
    Policy Act.
        Section 806(a)(1)(A).--Section 806(a)(1)(A) provides that
    the Secretary may carry out the alternative environmental
    protection procedures described in section 806(a)(1)(B) in
    order to ensure that the policies of the National Environmental
    Policy Act of 1969 and other provisions of law that further the
    purposes of the Act, as specified in regulations issued by the
    Secretary, are most effectively implemented in connection with
    the expenditure of grant amounts provided under title VIII of
    this Act and to ensure to the public undiminished protection of
    the environment.
        Section 806(a)(1)(B).--Section 806(a)(1)(B) provides that
    in lieu of applying environmental protection procedures
    otherwise applicable, the Secretary may by regulation provide
    for the release of funds for specific projects to the
    Department of Hawaiian Home Lands if the Director of the
    Department assumes all of the responsibilities for
    environmental review, decision-making, and action under the
    National Environmental Policy Act of 1969, and such other
    provisions of law as the regulations of the Secretary specify,
    that would apply to the Secretary were the Secretary to
    undertake those projects as Federal projects.
        Section 806(a)(2).--Section 806(a)(2) provides that the
    Secretary is to issue regulations to carry out section
    806(a)(2) only after consultation with the Council on
    Environmental Quality. Section 806(a)(2) further provides that
    the regulations issued under this paragraph are to provide for
    the monitoring of the environmental reviews performed under
    section 806(a)(2), facilitate training for the performance of
    such reviews if the Secretary in his discretion determines that
    such training is necessary or desirable, and provide for the
    suspension or termination of the assumption of responsibilities
    under section 806(a)(2).
        Section 806(a)(3).--Section 803(a)(3) provides that the
    duty of the Secretary under section 806(a)(2)(B) is not to be
    construed to limit or reduce any responsibility assumed by the
    Department of Hawaiian Home Lands for grant amounts will
    respect to any specific release of funds.
        Section 806(b).--Section 806(b) provides that the Secretary
    is to authorize the release of funds subject to the procedures
    under section 806 only if, not less than fifteen days before
    the Secretary's approval and before any commitment of funds to
    such projects, the Director of the Department of Hawaiian Home
    Lands submits to the Secretary a request for such a release
    accompanied by a certification that meets the requirements of
    section 806(c). Section 806(b) further provides that the
    Secretary's approval of a certification is to be deemed to
    satisfy the Secretary's responsibilities under the National
    Environmental Policy Act of 1969 and such other provisions of
    law as the Secretary's regulations specify to the extent that
    those responsibilities relate to the release of funds for
    projects that are covered by the Secretary's certification.
        Section 806(c).--Section 806(c) provides that a
    certification under the procedures authorized in section 806
    are to be in a form acceptable to the Secretary, be executed by
    the Director of the Department of Hawaiian Home Lands, specify
    that the Department of Hawaiian Home Lands has fully carried
    out it responsibilities as set forth in section 806(a), and
    specify that the Director consents to assume the status of a
    responsible Federal official under the National environmental
    Policy Act of 1969 and each provision of law specified in
    regulations issued by the Secretary to the extent that those
    laws apply be reason of section 806(a). Section 806(c) further
    provides that a certification under this procedures of section
    806(c) shall specify that the Director is authorized and
    consents on behalf of the Department of Hawaiian Home Lands and
    that the Director accepts the jurisdiction of the Federal
    courts for the purpose of enforcement of the responsibilities
    of the Director of the Department of Hawaiian Home lands as
    such an official.
        Section 807.--Section 807 provides that the Secretary shall
    issue final regulations necessary to carry out the provisions
    of title VIII of this Act no later than June 1, 1999.
        Section 808.--Section 808 provides that except as otherwise
    expressly provided in title VII of this Act, title VIII of this
    Act shall take effect on June 1, 1999.
        Section 809.--Section 809 addresses affordable housing
    activities.
        Section 809(a)(1).--Section 809(a)(1) provides that the
    national objectives of title VIII of this Act are to assist and
    promote affordable housing activities to develop, maintain, and
    operate affordable housing in safe and healthy environments for
    occupancy by low-income Native Hawaiian families; to ensure
    better access to private mortgage markets and to promote the
    self-sufficiency of low-income Native Hawaiian families; to
    coordinate activities to promote the self-sufficiency of low-
    income Native Hawaiian families; to coordinate activities to
    provide housing for low-income Native Hawaiian families with
    Federal, state and local activities to further economic and
    community development; to plan for and integrate infrastructure
    resources on the Hawaiian Home Lands with housing development;
    and to promote the development of private capital markets, and
    allow the markets to operate and grow, thereby benefitting
    Native Hawaiian communities.
        Section 809(a)(2).--Section 809(a)(2) provides that
    assistance for eligible housing activities under title VII of
    this Act shall be limited to low-income Native Hawaiian
    families except that the Director may provide assistance for
    home ownership activities under section 810(b), model
    activities under section 810(f), or loan guarantee activities
    under section 184A of the Housing and Community Development Act
    of 1992 to Native Hawaiian families who are not low-income
    families, to the extent that the Secretary approves the
    activities under section 184A to address a need for housing for
    those families that cannot be reasonably met without such
    assistance. The Secretary is to establish limitations on the
    amount of assistance that may be provided under the title VIII
    of this Act for activities for families that are not low-income
    families. However, section 809(a)(2) further provides that the
    Director may provide housing or housing assistance provided
    through affordable housing activities assisted with grant
    amounts under this title to a family that is not composed of
    Native Hawaiians if the Department determines that the presence
    of the family in the housing involved is essential to the well-
    being of Native Hawaiian families and the need for housing for
    the family cannot be reasonably met without such assistance.
        Section 809(a)(2) provides that a housing plan submitted
    under section 803 may authorize a preference, to the extent
    practicable, for housing or housing assistance provided through
    affordable housing activities assisted with grant amounts
    provided under title VIII of this Act to be provided to
    families that are eligible to reside on the Hawaiian Home
    Lands. In any instance in which a housing plan provides for
    such a preference, the Director is to ensure that housing
    activities which are assisted with grant amounts under title
    VIII of this Act are subject to that preference. Section
    809(a)(2) further provides that as a condition of receiving
    grant amounts under title VIII of this Act, and to the extent
    practicable, the Department of Hawaiian Home Lands is to work
    with or subcontract with private nonprofit organizations
    experienced in the planning and development of affordable
    housing for Native Hawaiians to carry out affordable housing
    activities with those grant amounts.
        Section 810(a).--Section 810(a) provides that affordable
    housing activities under section 810 are activities conducted
    in accordance with the requirement of section 811 to develop or
    to support affordable housing for rental or home ownership or
    provide housing services with respect to affordable housing,
    through the activities described in section 810(b).
        Section 810(b)(1).--Section 810(b)(1) provides that the
    activities described in section 810(b) are the acquisition, new
    construction, reconstruction, or moderate or substantial
    rehabilitation of affordable housing, which may include real
    property acquisition, site improvement, the development of
    utilities and utility services, conversion, demolition,
    financing, administration and planning, and other related
    activities.
        Section 810(b)(2).--Section 810(b)(2) describes the housing
    services which are authorized under title VII of this Act, and
    establishes that the provision of housing-related services for
    affordable housing includes counseling in connection with
    rental or home ownership assistance, the establishment and
    support of resident organizations and resident management
    corporations, energy auditing, activities related to the
    provision of self-sufficiency and other services, and other
    services related to assisting owners, tenants, contractors, and
    other entities participating or seeking to participate in other
    housing activities assisted pursuant to section 810.
        Section 810(b)(3).--Section 810(b)(3) describes the housing
    management services that are authorized under title VIII of
    this Act, and establishes that the provision of management
    services for affordable housing includes the preparation of
    work specifications, loan processing, inspections, tenant
    selection, management of tenant-based rental assistance, and
    management of affordable housing projects.
        Section 810(b)(4).--Section 810(b)(4) establishes that the
    activities authorized under title VIII of this Act include the
    provision of safety, security, and law enforcement measures and
    activities appropriate to protect residents of affordable
    housing from crime.
        Section 810(b)(5).--Section 810(b)(5) establishes that the
    activities authorized under title VIII of this Act include
    housing activities under model programs that are designed to
    carry out the purposes of title VIII and specifically approved
    by the Secretary as appropriate for the purposes of title VIII.
        Section 811(a).--Section 811(a) provides that as a
    condition of receiving grant amounts under title VIII, the
    Director is to develop written policies governing rents and
    home buyer payments charged for dwelling units assisted under
    title VIII, including methods by which such rents and home
    buyer payments are determined. However, in the case of any low-
    income family residing in a dwelling unit assisted with grant
    amounts under title VIII, the monthly rent or home buyer
    payment, as applicable, for that dwelling unit may not exceed
    thirty percent of the monthly adjusted income of that family.
        Section 811(b).--Section 811(b) provides that using amounts
    of any grants received under title VIII, the Director is to
    reserve and use for operating under section 810 such amounts as
    may be necessary to provide for the continued maintenance and
    efficient operation of such housing. Section 811(b) further
    provides that section 811(b) may not be construed to prevent
    the Director, or any entity funded by the Department, from
    demolishing or disposing of housing, pursuant to regulations
    established by the Secretary.
        Section 811(c).--Section 811(c) provides that as a
    condition of receiving grant amounts under title VIII, the
    Director is to require adequate insurance coverage for housing
    units that are owned or operated or assisted with grant amounts
    provided under title VIII.
        Section 811(d).--Section 811(d) provides that as a
    condition of receiving grant amounts under title VIII, the
    Director is to develop written policies governing the
    eligibility, admission, and occupancy of families for housing
    assisted with grant amounts provided under title VIII.
        Section 811(e).--Section 811(e) provides that as a
    condition to receiving grant amounts under title VIII, the
    Director is to develop policies governing the management and
    maintenance of housing assisted with grant amounts under title
    VIII.
        Section 812(a).--Section 812(a) provides that subject to
    section 811 and an applicable housing plan approved under
    section 803, the Director is to have the discretion to use
    grant amounts for affordable housing activities through the use
    of equity investments, interest-bearing loans or advances,
    noninterest-bearing loans or advances, interest subsidies, the
    leveraging of private investments, or any other form of
    assistance that the Secretary determines to be consistent with
    the purposes of title VIII, and the right to establish the
    terms of assistance provided with funds referred to in section
    812(a).
        Section 812(b).--Section 812(b) provides authority for the
    Director of the Department of Hawaiian Home Lands to invest
    grant amounts in investment securities and other obligations,
    as approved by the Secretary, for the purposes of carrying out
    affordable housing activities.
        Section 813.--Section 813 addresses low-income requirements
    and income targeting.
        Section 813(a).--Section 813 provides that housing is to
    qualify for affordable housing for purposes of title VIII of
    this Act if the conditions set forth in section 813(a)(1) and
    813(a)(2) are met.
        Section 813(a)(1).--Section 813(a)(1) provides that each
    dwelling unit in the housing will qualify for affordable
    housing if, in the case of rental housing, the housing is made
    available for occupancy only by a family that is a low-income
    family at the time of the initial occupancy by the family of
    that unit, and in the case of housing for homeownership, the
    housing is made available for purchase only by a family that is
    a low-income family at the time of the purchase.
        Section 813(a)(2).--Section 813(a)(2) provides that each
    dwelling unit in the housing will remain affordable housing, in
    accordance with binding commitments satisfactory to the
    Secretary for the remaining useful life of the property, as
    determined by the Secretary, without regard to the term of the
    mortgage or to transfer of ownership, or such other period as
    the Secretary determines is the longest feasible period of time
    consistent with sound economics and the purposes of title VIII
    of this Act, except upon a foreclosure by a lender, or upon
    other transfer in lieu of foreclosure, if that foreclosure or
    transfer action recognizes any contractual or legal rights of a
    public agency, nonprofit sponsor, or other person or entity to
    take an action that would avoid termination of low-income
    affordability, in the case of foreclosure or transfer ownership
    in lieu of foreclosure, and is not for the purpose of avoiding
    low-income affordability restrictions, as determined by the
    Secretary.
        Section 813(b).--Section 813(b) provides that
    notwithstanding the provisions of section 813(a), housing
    assisted pursuant to section 809(a)(2)(B) is to be considered
    affordable housing for purposes of title VIII of this Act.
        Section 814.--Section 814 sets forth the requirements for
    leases and criteria for tenant and homebuyer selection.
        Section 814(a).--Section 814(a) provides that except to the
    extent otherwise provided by or inconsistent with the laws of
    the State of Hawaii, in renting dwelling units in affordable
    housing assisted with grant amounts provided under title VIII
    of this Act, the Director, owner, or manager shall use--
              Leases that do not contain unreasonable terms and
            conditions; leases that require the Director, owner or
            manager to maintain the housing in compliance with
            applicable housing codes and quality standards;
              Leases that require the Director, owner, or manager
            to give adequate written notice of termination of the
            lease, which shall be the period of time required under
            applicable state or local law;
              Leases which specify that, with respect to any notice
            of eviction or termination, notwithstanding any state
            or local law, a resident shall be informed of the
            opportunity, before any hearing or trial, to examine
            any relevant documents, record, or regulations directly
            related to the eviction or termination;
              Leases that require the Director, owner, or manager
            may not terminate the tenancy, during the term of the
            lease, except for serious or repeated violation of the
            terms and conditions of the lease, violation of
            applicable Federal, state, or local law, or for other
            good cause; and
              Leases that provide that the Director, owner, and
            manager may terminate the tenancy of a resident for any
            activity, engaged in by the resident, any member of the
            household of the resident, or any guest or other person
            under the control of the resident, that threatens the
            health or safety of, or right to peaceful enjoyment of
            the premises by other residents or employees of the
            Department, owner, or manager; threatens the health or
            safety of, or right to peaceful enjoyment of their
            premises by, persons residing in the immediate vicinity
            of the premises; or is criminal activity, including
            drug-related criminal activity, on or off the premises.
        Section 814(b).--Section 814(b) provides that as a
    condition of receiving grant amounts under title VIII of this
    Act, the Director shall adopt and use written tenant and
    homebuyer selection policies and criteria that are consistent
    with the purpose of providing housing for low-income families;
    are reasonably related to program eligibility and the ability
    of the applicant to perform the obligations of the lease; and
    provide for the selection of tenants and homebuyers from a
    written waiting list in accordance with the policies and goals
    set forth in an applicable housing plan approved under section
    803; and the prompt notification in writing to any rejected
    applicant of the grounds for that rejection.
        Section 815.--Section 815 provides that if the Department
    of Hawaiian Home Lands uses grant amounts to provide affordable
    housing under activities authorized by title VIII of this Act,
    and at any time during the useful life of the housing, the
    housing does not comply with the requirement under section
    813(a)(2), the Secretary shall reduce future grant payments on
    behalf of the Department by an amount equal to the grant
    amounts used for that housing, under the authority of section
    818(a)(1)(b), or require repayment to the Secretary of any
    amount equal to those grant amounts.
        Section 816.--Section 816 provides that for each fiscal
    year, the Secretary shall allocate any amounts made available
    for assistance under this title for the fiscal year, in
    accordance with the formula established pursuant to section
    817, to the Department of Hawaiian Home Lands if the Department
    complies with the requirements under title VIII of this Act for
    a grant under title VIII of this Act.
        Section 817.--Section 817 addresses the establishment of an
    allocation formula for the allocation of amounts made available
    for block grants and the factors for the determination of need.
        Section 817(a).--Section 817(a) provides that the Secretary
    shall, by regulation issued not later than the expiration of
    the six-month period beginning on the date of enactment of the
    Native American Housing Assistance and Self-Determination
    Amendments of 1998, in the manner provided under section 807,
    establish a formula to provide for the allocation of amounts
    available for a fiscal year for block grants under title VIII
    of this Act in accordance with the requirements of section 817.
        Section 817(b).--Section 817(b) provides that the formula
    established under the authority of section 817(a) is to be
    based on factors that reflect the needs for assistance for
    affordable housing activities, including the number of low-
    income dwelling units owned or operated at the time pursuant to
    a contract between the Director and the Secretary; the extent
    of poverty and economic distress and the number of Native
    Hawaiian families eligible to reside on the Hawaiian Home
    Lands; and any other objectively measurable conditions that the
    Secretary and the Director may specify.
        Section 817(c).--Section 817(c) provides that in
    establishing the formula under the authority of section 817(a),
    the Secretary is to consider the relative administrative
    capacities of the Department of Hawaiian Home Lands and other
    challenges faced by the Department, including geographic
    distribution within Hawaiian Home Lands, and technical
    capacity.
        Section 817(d).--Section 817(d) provides that section 817
    is to take effect on the date of enactment of the Native
    American Housing Assistance and Self-Determination Amendments
    of 1998.
        Section 818.--Section 818 addresses the remedies available
    to the Secretary for failure to comply with the requirements of
    title VIII of this Act.
        Section 818(a).--Section 818(a) provides that except as
    provided in section 818(b), if the Secretary finds after
    reasonable notice and opportunity for a hearing that the
    Department of Hawaiian Home Lands has failed to comply
    substantially with any provision of title VIII of this Act, the
    Secretary shall terminate payments to the Department under
    title VIII of this Act; reduce payments to the Department under
    title VIII of this Act by an amount equal to the amount of such
    payments that were not expended in accordance with title VIII
    of this Act; or limit the availability of payments under title
    VIII of this Act to programs, projects, or activities not
    affected by the failure to comply. If the Secretary takes any
    of the actions authorized under section 818(a), the Secretary
    is to continue that action until the Secretary determines that
    the failure by the Department to comply with the provision has
    been remedied by the Department and the Department is in
    compliance with that provision.
        Section 818(b).--Section 818(b) provides that the Secretary
    may provide technical assistance for the Department, either
    directly or indirectly, that is designed to increase the
    capability and capacity of the Director of the Department to
    administer assistance provided under title VIII of this Act in
    compliance with the requirements under title VIII of this Act,
    if the Secretary makes a finding under section 818(a) but
    determines that the failure of the Department to comply
    substantially with the provisions of title VIII of this Act is
    not a pattern or practice of activities constituting willful
    noncompliance and is a result of the limited capability or
    capacity of the Department of Hawaiian Home Lands.
        Section 818(c).--Section 818(c) provides that in lieu of,
    or in addition to any action that the Secretary may take under
    section 818(a), if the Secretary has reason to believe that the
    Department of Hawaiian Home Lands has failed to comply
    substantially with any provision of title VIII of this Act, the
    Secretary may refer the matter to the Attorney General of the
    United States with a recommendation than an appropriate civil
    action be instituted. Upon receiving the Secretary's referral,
    the Attorney General may bring a civil action in any United
    States district court of appropriate jurisdiction for such
    relief as may be appropriate, including an action to recover
    the amount of the assistance furnished under title VIII of this
    Act that was not expended in accordance with title VIII of this
    Act or for mandatory or injunctive relief.
        Section 818(d)(1).--Section 818(d)(1) provides that if the
    Director receives notice under section 818(a) of the
    termination, reduction, or limitation of payments under this
    Act, the Director may, not later than sixty days after
    receiving such notice, file with the United States Court of
    Appeals for the Ninth Circuit, or in the United States Court of
    Appeals for the District of Columbia, a petition for review of
    the action of the Secretary, and upon the filing of any
    petition, the Director is to transmit copies of the petition to
    the Secretary and the Attorney General of the United States,
    who shall represent the Secretary in the litigation.
        Section 818(d)(2).--Section 818(d)(2) provides that the
    Secretary shall file in a court a record of the proceeding on
    which the Secretary based the action as provided in section
    2112 of title 28, United States Code. No objection to the
    action of the Secretary is to be considered by the court unless
    the Department has registered objection before the Secretary.
        Section 818(d)(3).--Section 818(d)(3) provides that the
    court shall have jurisdiction to affirm or modify the action of
    the Secretary or to set the action aside in whole or in part.
    If supported by substantial evidence on the record considered
    as a whole, the findings of fact by the Secretary shall be
    conclusive. The court may order evidence, in addition to the
    evidence submitted for review under section 818(d)(3), to be
    taken by the Secretary, and to be made part of the record. By
    reason of additional evidence and evidence filed with the
    court, the Secretary may modify his findings of fact or make
    new findings, and shall file such modified or new findings and
    his recommendation, if any, for the modification or setting
    aside of the original action of the Secretary. With respect to
    a question of fact, the findings shall be considered to be
    conclusive if those findings are supported by substantial
    evidence on the record, and considered as a whole.
        Section 818(d)(4).--Section 818(d)(4) provides that except
    for review by the U.S. Supreme Court, upon the filing of the
    record under section 818(d)(4) with the court, the jurisdiction
    of the court shall be exclusive and the judgment of the court
    shall be final. A judgment from the court under section
    818(d)(4) shall be subject to review by the U.S. Supreme Court
    upon writ of certiorari or certification as provided in section
    1254 of title 28, United States Code.
        Section 819.--Section 819 addresses the monitoring of
    compliance by the Director of the Department of Hawaiian Home
    Lands.
        Section 819(a).--Section 819(a) provides that the Director,
    through binding contractual agreements with owners or other
    authorized entities shall ensure long-term compliance with the
    provisions of title VIII of this Act. The binding contractual
    agreements with owners or other authorized entities shall
    provide for the enforcement of the provisions of title VIII of
    this Act by the Department and the Secretary to the extent
    allowable by Federal and state law, and remedies for breach of
    the provisions of the binding contractual agreements.
        Section 819(b).--Section 819(b) provides that not less
    frequently than annually, the Director shall review the
    activities conducted and housing assisted under title VIII of
    this Act, to assess compliance with requirements of title VIII
    of this Act. Each review is to include onsite inspection of
    housing to determine compliance with applicable requirements.
    The results of each review shall be included in a performance
    report of the Director submitted to the Secretary under section
    820 and made available to the public.
        Section 819(c).--Section 819(c) provides that the Secretary
    is to establish such performance measures as may be necessary
    to assess compliance with the requirements of title VIII of
    this Act.
        Section 820.--Section 820 addresses the requirements for
    performance reports.
        Section 820(a).--Section 820(a) provides that for each
    fiscal year, the Director is to review the progress the
    Department has made during that fiscal year in carrying out the
    housing plan submitted by the Department under section 803, and
    submit a report to the Secretary, in a form acceptable to the
    Secretary, describing the conclusions of the review.
        Section 820(b).--Section 820(b) provides that each
    performance report submitted for a fiscal year is to describe
    the use of grant amounts provided to the Department of Hawaiian
    Home Lands for that fiscal year, and assess the relationship of
    the use of grant amounts to the goals identified in the housing
    plan submitted under section 803 as a result of its
    experiences.
        Section 820(c).--Section 820(c) provides that the Secretary
    is to establish a date for the submission of each performance
    report, review each performance report, and with respect to
    each performance report, make such recommendations as the
    Secretary considers appropriate to carry out the purposes of
    title VIII of this Act.
        Section 820(d).--Section 820(d) provides that in preparing
    a performance report, the Director shall make the report
    publicly available to the beneficiaries of the Hawaiian Homes
    Commission Act, 1920, and give a sufficient amount of time to
    permit those beneficiaries to comment on that report before it
    is submitted to the Secretary, in such manner and at such time
    as the Director may determine. The report is to include a
    summary of any comments received by the Director from
    beneficiaries regarding the program to carry out the housing
    plan.
        Section 821.--Section 821 provides authority for annual
    performance reviews and audits by the Secretary.
        Section 821(a).--Section 821(a) provides that the Secretary
    shall not less frequently than on an annual basis, make such
    reviews and audits as may be necessary or appropriate to
    determine whether the Director has carried out eligible
    activities under title VIII of this Act in a timely manner, has
    carried out and made certifications in accordance with the
    requirements and the primary objectives of title VIII of this
    Act and with other applicable laws; and has a continuing
    capacity to carry out the eligible activities in a timely
    manner; whether the Director has complied with the housing plan
    submitted by the Director under section 803, and whether the
    performance reports of the Department under section 821 are
    accurate. Each review conducted under section 821 shall, to the
    extent practicable, include onsite visits by employees of the
    Department of Housing and Urban Development.
        Section 821(b).--Section 821(b) provides that the Secretary
    is to give the Department of Hawaiian Home Lands not less than
    thirty days to review and comment on a report under section
    821(b). After taking into consideration the comments of the
    Department, the Secretary is authorized to revise the report
    and to make the comments of the Department and the report, with
    any revisions, readily available to the public not later than
    thirty days after receipt of the Department's comments.
        Section 821(c).--Section 821(c) provides that the Secretary
    may make appropriate adjustments in the amount of annual grants
    under title VIII of this Act in accordance with the findings of
    the Secretary pursuant to reviews and audits under section 821.
    The Secretary may adjust, reduce, or withdraw grant amounts, or
    take other action as appropriate in accordance with the reviews
    and audits of the Secretary under section 821, except that
    grant amounts already expended on affordable housing activities
    may not be recaptured or deducted from future assistance
    provided to the Department of Hawaiian Home Lands.
        Section 822.--Section 822 provides that to the extent the
    financial transactions of the Department of Hawaiian Home Lands
    involving grant amounts under title VIII of this Act relate to
    amounts provided under title VIII, those transactions may be
    audited by the Comptroller General of the United States under
    such regulations as may be prescribed by the Comptroller
    General. The Comptroller General of the United States shall
    have access to all books, accounts, records, reports, files,
    and other papers, things, or property belonging to or in use by
    the Department of Hawaiian Home Lands pertaining to such
    financial transactions and necessary to facilitate the audit.
        Section 823.--Section 823 provides that no later than
    ninety days after the conclusion of each fiscal year in which
    assistance under title VIII of this Act is made available, the
    Secretary shall submit a report to the Congress that contains a
    description of the progress made in accomplishing the
    objectives of title VIII of this Act, a summary of the use of
    funds available under title VIII of this Act during the
    preceding fiscal year, and a description of the aggregate
    outstanding loan guarantees under section 184A of the Housing
    and Community Development Act of 1992. The Secretary may
    require the Director to submit such reports and other
    information as may be necessary in order for the Secretary to
    prepare the report required under section 823(a).
        Section 824.--Section 824 provides authority for the
    appropriation of funds for the Department of Housing and Urban
    Development for grants under title VIII of this Act of such
    sums as may be necessary for each of fiscal year 1999, 2000,
    2001, 2002 and 2003.
        Section 4.--Section 4 amends subtitle E of title I of the
    Housing and Community Development Act of 1992 by inserting
    after section 184, the following provisions--
        Section 184A.--Section 184A provides for loan guarantees
    for Native Hawaiian Housing.
        Section 184A(a)--Section 184A(a) establishes the
    definitions for purposes of the amendment to subtitle E of
    title I of the Housing and Community Development Act of 1992.
        Section 184A(a)(1).--Section 184A(a)(1) provides that for
    purposes of section 184A, the term ``Department of Hawaiian
    Home Lands'' means the agency or department of the government
    of the State of Hawaii that is responsible for the
    administration of the Hawaiian Homes Commission Act, 1920.
        Section 184A(a)(2).--Section 184A(a)(2) provides that for
    purposes of section 184A, the term ``eligible entity'' means a
    Native Hawaiian family, the Department of Hawaiian Home Lands,
    the Office of Hawaiian Affairs, or private nonprofit or for
    profit organizations experienced in the planning and
    development of affordable housing for Native Hawaiian.
        Section 184A(a)(3).--Section 184A(a)(3) provides that for
    purposes of section 184A, the term ``family'' means one or more
    persons maintaining a household, as the Secretary shall by
    regulation provide.
        Section 184A(a)(4).--Section 184A(a)(4) provides that for
    purposes of section 184A, the term ``guarantee fund'' means the
    Native Hawaiian Housing Loan Guarantee Fund established under
    section 184A(i).
        Section 184A(a)(5).--Section 184A(a)(5) provides that for
    purposes of section 184A, the term ``Hawaiian Home Lands''
    means lands that have the status of Hawaiian Home Lands under
    section 204 of the Hawaiian Homes Commission Act, 1920, or
    lands that are acquired pursuant to that Act.
        Section 184A(a)(6).--Section 184A(a)(6) provides that for
    purposes of section 184A, the term ``Native Hawaiian'' has the
    meaning given the term ``Native Hawaiian'' in section 201 of
    the Hawaiian Homes Commission Act, 1920, as amended.
        Section 184A(a)(7).--Section 184A(a)(7) provides that for
    purposes of section 184A, the term ``Office of Hawaiian
    Affairs'' means the entity of that name established under the
    constitution of the State of Hawaii, as amended.
        Section 184A(b).--Section 184A(b) provides that in order to
    provide access to sources of private financing to Native
    Hawaiian families who otherwise could not acquire housing
    financing because of the unique legal status of the Hawaiian
    Home Lands or as a result of a lack of access to private
    financial markets, the Secretary may guarantee an amount not to
    exceed one hundred percent of the unpaid principal and interest
    that is due on an eligible loan under section 184A(b).
        Section 184A(c).--Section 184A(c) establishes the
    requirements for an eligible loan.
        Section 184A(c)(1).--Section 184A(c)(1) provides that a
    loan is an eligible loan if that loan is made only to a
    borrower who is a Native Hawaiian family, the Department of
    Hawaiian Home Lands, the Office of Hawaiian Affairs, or a
    private nonprofit organization experience in the planning and
    development of affordable housing for Native Hawaiians.
        Section 184A(c)(2).--Section 184A(c)(2) provides that a
    loan is an eligible loan if the loan will be used to construct,
    acquire, or rehabilitate not more than four-family dwellings
    that are standard housing and are located on Hawaiian Home
    Lands for which a housing plan submitted under section 803 of
    the Native American Housing Assistance and Self-Determination
    Amendments of 1998 applies. The housing plan must be approved
    by the secretary and must provide for the use of loan
    guarantees under section 184A to provide affordable housing on
    Hawaiian Home Lands.
        Section 184A(c)(3).--Section 184A(c)(3) provides that the
    loan may be secured by any collateral authorized under
    applicable Federal or state law.
        Section 184A(c)(4)(A).--Section 184A(c)(4)(A) provides that
    the loan shall be made only by a lender approved by, and
    meeting qualifications established by the Secretary including
    any lender described in section 184A(c)(4)(B), except that a
    loan otherwise insured or guaranteed by an agency of the
    Federal government or made by the Department of Hawaiian Home
    Lands from amounts borrowed from the United States shall not be
    eligible for a guarantee under section 184A.
        Section 184A(c)(4)(B).--Section 184A(c)(4)(B) provides that
    the following lenders shall be considered to be lenders that
    have been approved by the Secretary--
              Any mortgagee approved by the Secretary for
            participation in the single family mortgage insurance
            program under title II of the National Housing Act.
              Any lender that makes housing loans under chapter 37
            of title 38, Untied States Code, that are automatically
            guaranteed under section 3702(d) of title 38, United
            States Code.
              Any lender approved by the Secretary of Agriculture
            to make guaranteed loans for single family housing
            under the Housing Act of 1949.
              Any other lender that is supervised, approved,
            regulated, or insured by any agency of the Federal
            government.
        Section 184A(c)(5).--Section 184A(c)(5) provides that the
    loan shall be made for a term not exceeding thirty years, and
    bear interest, exclusive of the guarantee fee under section
    184A(d) and service charges, if any, at a rate agreed upon by
    the borrower and the lender and determined by the Secretary to
    be reasonable, but not to exceed the rate generally charged in
    the area, as determined by the Secretary, for home mortgage
    loans not guaranteed or insured by any agency or
    instrumentality of the Federal government. The section further
    provides that the loan must involve a principal obligation not
    exceeding 97.75 percent of the appraised value of the property
    as of the date of the loan is accepted for guarantee, or 98.75
    percent if the value of the property is $50,000 or less, or the
    amount approved by the Secretary under section 184A(c) and
    involve a payment on account of the property in cash or its
    equivalent or through the value of any improvements to the
    property made through the skilled or unskilled labor of the
    borrower, as the Secretary shall provide.
        Section 184A(d).--Section 184A(d) provides that before the
    Secretary approves any loan for guarantee under section
    184A(d), the lender shall submit the application for the loan
    to the Secretary for examination and if the Secretary approves
    the application, the Secretary shall issue a certificate under
    section 184A(d) as evidence of the loan guarantee approved. The
    Secretary may approve a loan for guarantee under section
    184A(d) only if he determines that there is a reasonable
    prospect of repayment of the loan. A certificate of guarantee
    issued under section 184A(d) by the Secretary is to serve as
    conclusive evidence of the eligibility of the loan for
    guarantee under section 184A(d) and the amount of that
    guarantee, and shall be incontestable in the hands of the
    bearer. The full faith and credit of the United States is
    pledged to the payment of all amounts agreed to be paid by the
    Secretary as security for the obligations made by the Secretary
    under section 184A(d). Section 184A(d) may not be construed to
    preclude the Secretary from establishing defenses against the
    original lender based on fraud or material misrepresentation or
    to bar the Secretary from establishing by regulations that are
    on the date of issuance or disbursement, whichever is earlier,
    partial defenses to the amount payable on the guarantee.
        Section 184A(e) provides that the Secretary shall fix and
    collect a guarantee fee for the guarantee of a loan under
    section 184A(e) which may not exceed the amount equal to one
    percent of the principal obligation of the loan. The fee under
    section 184A(e) is to be paid by the lender at time of issuance
    of the guarantee and be adequate to cover expenses and probable
    losses. The Secretary is to deposit any fees collected under
    section 184A(e) in the Native Hawaiian Housing Loan Guarantee
    Fund established under section 184A(j).
        Section 184A(f).--Section 184A(f) provides that the
    liability under a guarantee provided under section 184A shall
    decrease or increase on a pro rata basis according to any
    decrease or increase in the amount of the unpaid obligation
    under the provisions of the loan agreement involved.
        Section 184A(g).--Section 184A(g) provides that
    notwithstanding any other provision of law, any loan guaranteed
    under section 184A, including the security given for the loan,
    may be sold or assigned by the lender to any financial
    institution subject to examination and supervision by an agency
    of the Federal government or of any state or the District of
    Columbia.
        Section 184A(h).--Section 184A(h) provides that if the
    Secretary determines that any lender or holder of a guarantee
    certificate under section 184A(c) has failed to maintain
    adequate accounting records, or to adequately service loans
    guaranteed under section 184A, or to exercise proper credit or
    underwriting judgment, or has engaged in practices otherwise
    detrimental to the interest of a borrower or the United States,
    the Secretary may take such actions as are authorized in
    section 184A(h). Upon a determination by the Secretary that a
    holder of a guarantee certificate under section 184A(c) has
    failed to carry out an activity outlined in section 184A(h) or
    has engaged in practices described in section 184A(h), the
    Secretary is authorized to refuse, either temporarily or
    permanently, to guarantee any further loans made by such lender
    or holder, bar such lender or holder from acquiring additional
    loans guaranteed under section 184A, and require that such
    lender or holder assume not less than ten percent of any loss
    on further loans made or held by the lender or holder that are
    guaranteed under section 184A. In addition, the Secretary may
    impose a civil monetary penalty on a lender or holder of a
    guarantee certificate under the section 184A(d) if the
    Secretary determines that the holder or lender has
    intentionally failed to maintain adequate accounting records,
    to adequately service loans guaranteed under section 184A, or
    to exercise proper credit or underwriting judgment. A civil
    monetary penalty imposed under section 184A(h) is to be imposed
    in the manner and be in an amount provided under section 536 of
    the National Housing Act with respect to mortgages and lenders
    under that Act. However, notwithstanding the preceding
    provisions of section 184A(h), if a loan was made in good
    faith, the Secretary may not refuse to pay a lender or holder a
    valid guarantee on that loan, without regard to whether the
    lender or holder is barred under section 184A(h).
        Section 184A(i).--Section 184A(i) provides that if a
    borrower on a loan guaranteed under section 184A defaults on
    the loan, the holder of the guarantee certificate is to provide
    written notice of the default to the Secretary. Upon providing
    the notice to the Secretary, the holder of the guarantee
    certificate shall be entitled to payment under the guarantee,
    subject to the provisions of section 184A, and may proceed to
    obtain payment in one of the following manners--
              The holder may initiate foreclosure proceedings,
            after providing written notice of that action to the
            Secretary.
              Upon a final order by the court authorizing
            foreclosure and submission to the Secretary of a claim
            for payment under the guarantee, the Secretary shall
            pay to the holder of the certificate the pro rata
            portion of the amount guaranteed, as determined
            pursuant to section 184A(f), plus reasonable fees and
            expenses as approved by the Secretary.
              The rights of the Secretary shall be subrogated to
            the rights of the holder of the guarantee. The holder
            shall assign the obligation and security to the
            Secretary.
              Without seeking foreclosure, or in any case in which
            a foreclosure proceeding which has been initiated
            continues for a period in excess of one year, the
            holder of the guarantee may submit to the Secretary a
            request to assign the obligation and security interest
            to the Secretary in return for payment of the claim
            under the guarantee. The Secretary may accept
            assignment of the loan if the Secretary determines that
            the assignment is in the best interest of the United
            States.
              Upon assignment, the Secretary shall pay to the
            holder of the guarantee the pro rata portion of the
            amount guaranteed, as determined under section 184A(f).
              The rights of the Secretary shall be subrogated to
            the rights of the holder of the guarantee. The holder
            shall assign the obligation and security to the
            Secretary.
        Section 184A(i) further provides that before any payment
    under a guarantee is made, the holder of the guarantee shall
    exhaust all reasonable possibilities of collection. Upon
    payment, in whole or in part, to the holder, the note or
    judgment evidencing the debt shall be assigned to the United
    States and the holder shall have no further claim against the
    borrower or the United States.
        Section 184A(i) also authorizes the Secretary to take such
    action to collect payment from the borrower as the Secretary
    determines to be appropriate. If a borrower defaults on a loan
    guaranteed under section 184A that involves a security interest
    in restricted Hawaiian Home Land property, the mortgagee or the
    Secretary shall only pursue liquidation after offering to
    transfer the account to another eligible Hawaiian family or to
    the Department of Hawaiian Home Lands. Thereafter, if the
    mortgagee or the Secretary subsequently proceeds to liquidate
    the account, the mortgagee or the Secretary shall not sell,
    transfer, or otherwise dispose of or alienate the property
    except to another eligible Hawaiian family or to the Department
    of Hawaiian Home Lands.
        Section 184A(j)(1).--Section 184A(j)(1) provides
    authorization for the establishment in the United States
    Treasury a fund to be known as the Hawaiian Housing Loan
    Guarantee Fund for the purpose of providing loan guarantees
    under section 184A.
        Section 184A(j)(2).--Section 184A(j)(2) provides that the
    Guarantee Fund is to be credited with: any amount, claims,
    notes, mortgages, contracts, and property acquired by the
    Secretary under section 184A and any collections and proceeds
    therefrom; any amounts appropriated pursuant to section
    184A(j)(7); any guarantee fees collected under section 184A(d)
    and any interest or earnings on amounts invested under section
    184A(j)(4).
        Section 184A(j)(3).--Section 184A(j)(3) provides that the
    amounts in the Guarantee Fund shall be available, to the extent
    provided in appropriations Act, for--
              Fulfillng any obligations of the Secretary with
            respect to loans guaranteed under section 184A,
            including the costs, as that term is defined in section
            502 of the Federal Credit Reform Act of 1990, of such
            loans;
              Paying taxes, insurance, prior liens, expenses
            necessary to make fiscal adjustment in connection with
            the application and transmittal of collections, and
            other expenses and advances to protect the Secretary
            for loans which are guaranteed under section 184A or
            held by the Secretary;
              Acquiring such security property at foreclosure sales
            or otherwise;
              Paying administrative expenses in connection with
            section 184A; and
              Reasonable and necessary costs of rehabilitation and
            repair to properties that the Secretary holds or owns
            pursuant to section 184A.
        Section 184A(j)(4).--Section 184A(j)(4) provides that any
    amounts in the Guarantee Fund determined by the Secretary to be
    in excess of amounts currently required at the time of the
    determination to carry out section 184A may be invested in
    obligations of the United States.
        Section 184A(j)(5).--Section 184A(j)(5) provides that the
    authority of the Secretary to enter into commitments to
    guarantee loans under section 184A shall be effective for any
    fiscal year to the extend, or in such amounts as, are or have
    been provided in appropriations Acts, without regard to the
    fiscal year for which such amounts were appropriated. Section
    184A(j)(5) further provides that the authority of the Secretary
    to enter into commitments to guarantee loans under section 184A
    shall be effective for any fiscal year only to the extent that
    amounts in the Guarantee Fund are or have been made available
    in appropriations Acts to cover the costs, as that term is
    defined in section 502 of the Federal Credit Reform Act of
    1990, of such loan guarantees for such fiscal year. Any amounts
    appropriated pursuant to section 184A(j)(5) shall remain
    available until expended. Subject to these limitations, the
    Secretary may enter into commitments to guarantee loans under
    section 184A for each of fiscal years 1999, 2000, 2001, 2002,
    and 2003 with an aggregate outstanding principal amount not
    exceeding $100,000,000 for each fiscal year.
        Section 184A(j)(6).--Section 184A(j)(6) provides that all
    liabilities and obligations of the assets credited to the
    Guarantee Fund under section 184A(j)(2) shall be liabilities
    and obligations of the Guarantee Fund.
        Section 184A(j)(7).--Section 184(j)(7) provides
    authorization for appropriations to the Guarantee Fund to carry
    out section 184A such sums as necessary be necessary for each
    of fiscal years 1999, 2000, 2001, 2002, and 2003.
        Section 184A(k)(1).--Section 184A(k)(l) provides that the
    Secretary shall, by regulation, establish housing safety and
    quality standards to be applied for use under section 184A.
        Section 184A(k)(2).--Section 184A(k)(2) provides that the
    standards are to provide sufficient flexibility to permit the
    use of various designs and materials in housing acquired with
    loans guaranteed under section 184A and require each dwelling
    unit in any housing to be decent, safe, sanitary, and modest in
    size and design; conform with applicable general construction
    standards for the region in which the housing is located;
    contain a plumbing system that uses a properly installed system
    of piping, includes a kitchen sink and a partitional bathroom
    with lavatory, toilet, and bath or shower, and uses water
    supply, plumbing, and sewage disposal systems that conform to
    any minimum standards established by the applicable country or
    state; contain an electrical system using wiring and equipment
    properly installed to safely supply electrical energy for
    adequate lighting and for operation of appliances that conforms
    to any appropriate country, state or national code; be not less
    than the size provided under the applicable locally-adopted
    standards for size of dwelling units, except that the
    Secretary, upon request of the Department of Hawaiian Home
    Lands, may waive the size requirements under section
    184A(k)(2); and conform with the energy performance
    requirements for new construction established by the Secretary
    under section 526(a) of the National Housing Act, unless the
    Secretary determines that the requirements are not applicable.
        Section 184A(l).--Section 184A(l) provides that to the
    extent that the requirements of title VI of the Civil Rights
    Act of 1964 or of title VIII of the Civil Rights Act of 1968
    apply to a guarantee provided under section 184A(l), nothing in
    the requirements concerning discrimination on the basis of race
    shall be construed to prevent the provision of the guarantee to
    an eligible entity on the basis that the entity serves Native
    Hawaiian families or is a Native Hawaiian family.

                       Cost and Budgetary Considerations

        The cost estimate for S. 109, as amended, as provided by
    the Congressional Budget Office, is set forth below:

                                         U.S. Congress,
                                   Congressional Budget Office,
                                    Washington, DC, September 22, 1998.
    Hon. Ben Nighthorse Campbell,
    Chairman, Committee on Indian Affairs,
    U.S. Senate, Washington, DC.
        Dear Mr. Chairman: The Congressional Budget Office has
    prepared the enclosed cost estimate for S. 109, Native American
    Housing Assistance and Self-Determination Amendments of 1998.
        If you wish further details on this estimate, we will be
    pleased to provide them. The CBO staff contacts for federal
    costs are Carla Pedone and Susanne Mehlman. The contact for
    state and local impact is Leo Lex.
                Sincerely,
                                             June E. O'Neill, Director.

                   Congressional Budget Office Cost Estimate

    S.109--Native American Housing Assistance and Self-Determination
            Amendments of 1998

        Summary.--S.109 would expand housing assistance of Native
    Hawaiians by extending to them the same types of federal
    housing programs available to American Indians and Alaska
    Natives (AIANs). The bill would authorize block grants for
    affordable housing activities by amending the Native American
    Housing Assistance and Self-Determination Act of 1996
    (NAHASDA). In addition, it would provide loan guarantees for
    mortgages for owner- or renter-occupied housing by amending
    section 184 of the Housing and Community Development Act of
    1992.
        S. 109 would authorize appropriations totaling an estimated
    $215 million over the fiscal years 1999 through 2003, assuming
    adjustments for inflation. Without adjustments for inflation
    the total amount authorized would be an estimated $205 million.
    CBO estimates that enactment of the bill would not affect
    direct spending and would have a negligible effect on receipts.
    Nevertheless, pay-as-you go procedures would apply.
        This bill would impose no intergovernmental or private-
    sector mandates as defined in the Unfunded Mandates Reform Act
    (UMRA).
        Estimated cost to the Federal Government.--The estimated
    budgetary impact of S. 109 is shown in Table 1. CBO estimates
    that the bill would authorize appropriations of $41 million in
    1999; authorizations would increase to $45 million in 2003
    assuming adjustments for inflation. Outlays from those
    appropriations would total $3 million in 1999, increasing to
    $39 million in 2003 with adjustments for inflation and to $37
    million without adjustments for inflation.

                                    TABLE 1. ESTIMATED COST TO THE FEDERAL GOVERNMENT
    ----------------------------------------------------------------------------------------------------------------
                                                                          By fiscal year, in millions of dollars
                                                                     -----------------------------------------------
                                                                       1998    1999    2000    2001    2002    2003
    ----------------------------------------------------------------------------------------------------------------
                                            SPENDING SUBJECT TO APPROPRIATION
                                             With Adjustments for Inflation
    Spending under current law:
        Estimated authorization level \1\...........................     605     646     661     676       0       0
        Estimated outlays...........................................      73     240     383     508     514     449
     Proposed changes:
        Estimated authorization level...............................       0      41      42      43      44      45
        Estimated outlays...........................................       0       3      16      26      33      39
    Spending under S. 109:
        Estimated authorization level \1\...........................     605     687     703     719      44      45
        Estimated outlays...........................................      73     243     399     534     547     488
                                            Without Adjustments for Inflation
    Spending under current law:
        Estimated authorization level \1\...........................     605     633     633     633       0       0
        Estimated outlays...........................................      73     239     379     496     497     431
    Proposed changes:
        Estimated authorization level...............................       0      41      41      41      41      41
        Estimated outlays...........................................       0       3      16      25      32      37
    Spending under S. 109
        Estimated authorization level \1\...........................     605     674     674     674      41      41
        Estimated outlays...........................................      73     242     395     521     529     468
    ----------------------------------------------------------------------------------------------------------------
    \1\ The 1998 level is the amount appropriated for that year for NAHASDA and Indian Loan guarantees. The levels
      in subsequent years are estimated authorization amounts.

        The costs of this legislation fall within budget functions
    370 (commerce and housing credit) and 600 (income security).
        Basis of estimate.--The bill stipulates that the provisions
    would take effect on June 1, 1999. CBO assumes that the
    authorized amounts would be fully funded each fiscal year.
                Block grants for affordable housing activities
        Section 3 of S. 109 would add title VIII--Housing
    Assistance for Native Hawaiians--to NAHASDA. That title would
    make Native Hawaiians eligible for the types of block grants
    that are available under current law to American Indians and
    Alaska Natives. The block grants would be provided by the
    Department of Housing and Urban Development (HUD) to the
    Department of Hawaiian Home Lands, an agency of the government
    of the state of Hawaii. That agency would in turn distribute
    the grants by formula to the various areas of Hawaiian Home
    Lands eligible to receive funds. Activities eligible for
    funding would include the acquisition, development, and
    rehabilitation of affordable rental or owner-occupied housing,
    and the provision of housing services such as home ownership
    counseling, self-sufficiency counseling, housing management
    services, and crime prevention activities. The housing
    assistance would generally be limited to Native Hawaiian
    families who live on or near Hawaiian Home Lands and who have
    incomes not exceeding 80 percent of the area median income,
    adjusted for family size. Under the bill's definition, Native
    Hawaiians are people with at least 50 percent Hawaiian
    ancestry--an estimated 69,000 persons at present.
        S. 109 would authorize, for each of the fiscal years 1999
    through 2003, the appropriations necessary to carry out the
    block grant program for Native Hawaiians. CBO estimates that
    the authorization for fiscal year 1999 would be $33 million,
    increasing gradually with inflation to $37 million in 2003 (see
    Table 2).
        The estimated amounts are based on the assumption that
    appropriations for the Native Hawaiian block grants would be
    proportional to the amount that was appropriated for fiscal
    1998 under NAHASDA. The proportion was estimated so as to
    reflect the need for assistance to Native Hawaiians relative to
    the need for all tribes, with need defined by current
    regulations. Under current policy, a share of annual
    appropriations is first allocated to operate and maintain
    existing federally assisted Indian housing. Native Hawaiians
    would not qualify for this funding component because there is
    no federally assisted housing on the Hawaiian Home Lands. The
    remaining funds are distributed among Indian tribes according
    to a needs-based formula, which is based on seven factors,
    including the number of persons in the tribe, the number of
    households with various types of housing problems, and the
    number of households in various income categories. The
    percentage of funds each tribe receives is adjusted further for
    local housing development costs relative to the national
    average.

                TABLE 2. ESTIMATED AUTHORIZATIONS BY PROGRAM TYPE
    ------------------------------------------------------------------------
                                      By fiscal year, in millions of dollars
                                     ---------------------------------------
                                       1999    2000    2001    2002    2003
    ------------------------------------------------------------------------
                        SPENDING SUBJECT TO APPROPRIATION
                         With Adjustments for Inflation
    Block grants:
        Estimated authorization
         level......................      33      34      35      36      37
        Estimated outlays...........       1       7      15      25      31
    Loan guarantees:
        Estimated authorization
         level......................       8       8       8       8       8
        Estimated outlays...........       2       9      11       8       8
    Total:
        Estimated authorization
         level......................      41      42      43      44      45
        Estimated outlays...........       3      16      26      33      39
                        Without Adjustments for Inflation
    Block grants:
        Estimated authorization
         level......................      33      33      33      33      33
        Estimated outlays...........       1       6      14      24      29
    Loan guarantees:
        Estimated authorization
         level......................       8       8       8       8       8
        Estimated outlays...........       2       9      11       8       8
    Total:
        Estimated authorization
         level......................      41      41      41      41      41
        Estimated outlays...........       3      15      25      32      37
    ------------------------------------------------------------------------

        Based on data provided by HUD, the Department of Hawaiian
    Home Lands, and a recent study by the Urban Institute on
    housing problems of Native Hawaiians, CBO estimates that in
    1998 Native Hawaiians would have received roughly 8.6 percent
    of the needs-based component if they had been eligible for
    NAHASDA funding. In 1998, that component amounted to $347
    million of the $600 million appropriated under NAHASDA. In
    order not to diminish funding for AIANs, it would be necessary
    to increase the needs-based component by about 9.4 percent or
    $33 million.
                Loan guarantees
        Section 4 of S. 109 would establish a loan guarantee
    program for Native Hawaiian housing similar to the current
    Indian Housing Loan Guarantee program authorized under section
    184 of the Housing and Community Development Act of 1992. HUD
    would be authorized to guarantee up to $100 million of loans
    each fiscal year over the 1999-2003 period. CBO assumes that
    the 1999 subsidy rate for such loan guarantees would be similar
    to that under the existing program--about 8.13 percent. CBO
    estimates that such a program would require an appropriation of
    about $8 million in fiscal year 1999 and total appropriations
    of about $40 million over the next five years (see Table 2).
        Section 4 also would provide for civil penalties against
    lenders or holders of a guarantee certificate who have
    intentionally failed to meet certain requirements. Payments of
    such penalties would be recorded as miscellaneous receipts to
    the Treasury. CBO expects that any increase in penalty
    collections would be insignificant.
        Pay-as-you-go considerations.--The Balanced Budget and
    Emergency Deficit Control Act sets up pay-as-you-go procedures
    for legislation affecting direct spending or receipts. Because
    the civil penalties that would be imposed by section 4 of the
    bill would constitute receipts, pay-as-you-go procedures would
    apply. However, CBO estimates that those receipts would be
    insignificant.
        Intergovernmental and private-sector impact.--This bill
    would not impose any intergovernmental or private-sector
    mandates as defined in UMRA. The bill would provide funds to
    the state of Hawaii in the form of housing assistance grants,
    and any costs would be incurred as a condition of receiving
    those grants. The state would also be eligible to receive
    federal guarantees for low-income housing loans.
        Estimate prepared by.--Federal costs: Carla Pedone and
    Susanne Mehlman. Impact on State, local, and tribal
    governments: Leo Lex. Impact on the private sector: Lesley
    Frymier.
        Estimate approved by.--Paul N. Van de Water, Assistant
    Director for Budget Analysis.

                            Executive Communications

        The position of the Administration on S. 109, as contained
    in a letter to the Committee on Indian Affairs from the U.S.
    Department of Justice, is set forth below:

                        Regulatory and Paperwork Impact

        Paragraph 11(b) of rule XXVI of the Standing Rules of the
    Senate requires each report accompanying a bill to evaluate the
    regulatory and paperwork impact that would be incurred in carry
    out the bill. The Committee finds that S. 109, as amended, will
    require the promulgation of regulations, but because the
    Secretary of the Department of Housing and Urban Development
    has already promulgated regulations through a negotiated
    rulemaking process for the Native American Housing Assistance
    and Self-Determination Act, the Regulatory and paperwork impact
    should be minimized.

                            Changes in Existing Law

        In compliance with subsection 12 of rule XXVI of the
    Standing Rules of the Senate, changes in existing law made by a
    bill are required to be set forth in the accompanying Committee
    report. Changes in existing law are outlined below, with
    material to be deleted in brackets, and material to be added in
    italic signified by quotation marks:
        The Native American Housing Assistance and Self-
    Determination Act of 1996 (25 U.S.C. 4101 et seq.) is amended
    by adding at the end the following:

             ``TITLE VIII--HOUSING ASSISTANCE FOR NATIVE HAWAIIANS

    ``SEC. 801. DEFINITIONS.

        ``In this title:
              ``(1) Department of hawaiian home lands;
            department.--The term `Department of Hawaiian Home
            Lands' or `Department' means the agency or department
            of the government of the State of Hawaii that is
            responsible for the administration of the Hawaiian
            Homes Commission Act, 1920 (42 Stat. 108 et seq.).
              ``(2) Director.--The term `Director' means the
            Director of the Department of Hawaiian Home Lands.
              ``(3) Elderly families; near-elderly families.--
                      ``(A) In general.--The term `elderly family'
                    or `near-elderly family' means a family whose
                    head (or his or her spouse), or whose member,
                    is--
                              ``(i) for an elderly family, an
                            elderly person; or
                              ``(ii) for a near-elderly family, a
                            near-elderly person.
                      ``(B) Certain families included.--The term
                    `elderly family' or `near-elderly family'
                    includes--
                              ``(i) 2 or more elderly persons or
                            near-elderly persons, as the case may
                            be, living together; and
                              ``(ii) 1 or more persons described in
                            clause (i) living with 1 or more
                            persons determined under the housing
                            plan to be essential to their care or
                            well-being.
              ``(4) Hawaiian home lands.--The term `Hawaiian Home
            Lands' means lands that--
                      ``(A) have the status as Hawaiian home lands
                    under section 204 of the Hawaiian Homes
                    Commission Act (42 Stat. 110); or
                      ``(B) are acquired pursuant to that Act.
              ``(5) Housing area.--The term `housing area' means an
            areas of Hawaiian Home Lands with respect to which the
            Department of Hawaiian Home Lands is authorized to
            provide assistance for affordable housing under this
            Act.
              ``(6) Housing entity.--The term `housing entity'
            means the Department of Hawaiian Home Lands.
              ``(7) Housing plan.--The term `housing plan' means a
            plan developed by the Department of Hawaiian Home
            Lands.
              ``(8) Median income.--The term `median income' means,
            with respect to an area that is a Hawaiian housing
            area, the greater of--
                      ``(A) the median income for the Hawaiian
                    housing area, which shall be determined by the
                    Secretary; or
                      ``(B) the median income for the State of
                    Hawaii.
              ``(9) Native hawaiian.--The term `Native Hawaiian'
            has the meaning given the term `Native Hawaiian' in
            section 201 of the Hawaiian Homes Commission Act, 1920
            (42 Stat. 108 et seq.).

    ``SEC. 802. BLOCK GRANTS FOR AFFORDABLE HOUSING ACTIVITIES.

        ``(a) Grant Authority.--For each fiscal year, the Secretary
    shall (to the extent amounts are made available to carry out
    this title) make a grant under this title to the Department of
    Hawaiian Home Lands to carry out affordable housing activities
    for Native Hawaiian families on or near Hawaiian Home Lands.
        ``(b) Plan Requirement.--
              ``(1) In general.--The Secretary may make a grant
            under this title to the Department of Hawaiian Home
            Lands for a fiscal year only if--
                      ``(A) the Director has submitted to the
                    Secretary a housing plan for that fiscal year;
                    and
                      ``(B) the Secretary has determined under
                    section 804 that the housing plan complies with
                    the requirements of section 803.
              ``(2) Waiver.--The Secretary may waive the
            applicability of the requirements under paragraph (1),
            in part, if the Secretary finds that the Department of
            Hawaiian Home Lands has not complied or cannot comply
            with those requirements due to circumstances beyond the
            control of the Department of Hawaiian Home Lands.
        ``(c) Use of Affordable Housing Activities Under Plan.--
    Except as provided in subsection (e), amounts provided under a
    grant under this section may be used only for affordable
    housing activities under this title that are consistent with a
    housing plan approved under section 804.
        ``(d) Administrative Expenses.--
              ``(1) In general.--The Secretary shall, by
            regulation, authorize the Department of Hawaiian Home
            Lands to use a percentage of any grant amounts receive
            under this title for an reasonable administrative and
            planning expenses of the Department relating to
            carrying out this title and activities assisted with
            those amounts.
              ``(2) Administrative and planning expenses.--The
            administrative and planning expenses referred to in
            paragraph (1) include--
                      ``(A) cost for salaries of individuals
                    engaged in administering and managing
                    affordable housing activities assisted with
                    grant amounts provided under this title; and
                    ``(B) expenses incurred in preparing a housing
                    plan under section 803.
        ``(e) Public-Private Partnerships.--The Director shall make
    all reasonable efforts, consistent with the purposes of this
    title, to maximize participation by the private sector,
    including nonprofit organizations and for-profit entitles, in
    implementing a housing plan that has been approved by the
    Secretary under section 803.
        ``(f) Applicability of Others Provisions.--
              ``(1) In general.--The Secretary shall be guided by
            the relevant program requirements of titles, I, II, and
            IV in the implementation of housing assistance programs
            for Native Hawaiians under this title.
              ``(2) Exception.--The Secretary may make exceptions
            to, or modifications of, program requirements for
            Native American housing assistance set forth in titles
            I, II, and IV as necessary and appropriate to meet the
            unique situation and housing needs of Native Hawaiians.

    ``SEC. 803. HOUSING PLAN.

        ``(a) Plan Submission.--The Secretary shall--
              ``(1) require the Director to submit a housing plan
            under this section for each fiscal year; and
              ``(2) provide for the review of each plan submitted
            under paragraph (1).
        ``(b) 5-Year Plan.--Each housing plan under this section
    shall--
              ``(1) be in a form prescribed by the Secretary; and
              ``(2) contain, with respect to the 5-year period
            beginning with the fiscal year for which the plan is
            submitted, the following information:
                      ``(A) Mission statement.--A general statement
                    of the mission of the Department of Hawaiian
                    Home Lands to serve the needs of the low-income
    families to be served by the Department.
                      ``(B) Goal and objectives.--A statement of
                    the goals and objectives of the Department of
                    Hawaiian Home Lands to enable the Department to
                    serve the needs identified in subparagraph (A)
                    during the period.
                      ``(C) Activities plans.--An overview of the
                    activities planned during the period including
                    an analysis of the manner in which the
                    activities will enable the Department to meet
                    its mission, goals, and objectives.
        ``(c) 1-Year Plan.--A housing plan under this section
    shall--
              ``(1) be in a form prescribed by the Secretary; and
              ``(2) contain the following information relating to
            the fiscal year for which the assistance under this
            title is to be made available:
                      ``(A) Goals and objectives.--A statement of
                    the goals and objectives to be accomplished
                    during the period covered by the plan.
                      ``(B) Statement of needs.--A statement of the
                    housing needs of the low-income families served
                    by the Department and the means by which those
                    needs will be addressed during the period
                    covered by the plan, including--
                                ``(i) a description of the
                            estimated housing needs and the need
                            for assistance for the low-income
                            families to be served by the
                            Department, including a description of
                            the manner in which the geographical
                            distribution of assistance is
                            consistent with--
                                      ``(I) the geographical needs
                                    of those families; and
                                      ``(II) needs for various
                                    categories of housing
                                    assistance; and
                              ``(ii) a description of the estimated
                            housing needs for all families to be
                            served by the Department.
                      ``(C) Financial resources.--An operating
                    budget for the Department of Hawaiian Home
                    Lands, in a form prescribed by the Secretary,
                    that includes--
                            ``(i) an identification and a
                            description of the financial resources
                            reasonably available to the Department
                            to carry out the purposes of this
                            title, including an explanation of the
                            manner in which amounts made available
                            will be used to leverage additional
                            resources; and
                            ``(ii) the uses to which, the resources
                            described in clause (i) will be
                            committed, including--
                                      ``(I) eligible and required
                                    affordable housing activities;
                                    and
                                      ``(II) administrative
                                    expenses.
                      ``(D) Affordable housing resources.--A
                    statement of the affordable housing resources
                    currently available at the time of the
                    submittal of the plan and to be made available
                    during the period covered by the plan,
                    including--
                              ``(i) a description of the
                            significant characteristics of the
                            housing market in the State of Hawaii,
                            including the availability of housing
                            from other public sources, private
                            market housing; and
                              ``(ii) the manner in which the
                            characteristics referred to in clause
                            (i) influence the decision of the
                            Department of Hawaiian Home Lands to
                            use grant amounts to be provided under
                            this title for--
                                      ``(I) rental assistance;
                                      ``(II) the production of new
                                    units;
                                      ``(III) the acquisition of
                                    existing units; or
                                      ``(IV) the rehabilitation of
                                    units;
                              ``(iii) a description of the
                            structure, coordination, and means of
                            cooperation between the Department of
                            Hawaiian Home Lands and any other
                            governmental entities in the
                            development, submission, or
                            implementation of housing plans,
                            including a description of--
                                      ``(I) the involvement of
                                    private, public, and nonprofit
                                    organizations and institutions;
                                      ``(II) the use of loan
                                    guarantees under section 184A
                                    of the Housing and Community
                                    Development Act of 1992; and
                                      ``(III) other housing
                                    assistance provided by the
                                    United States, including loans,
                                    grants, and mortgage insurance;
                              ``(iv) a description of the manner in
                            which the plan will address the needs
                            identified pursuant to subparagraph
                            (C);
                              ``(v) a description of--
                                      ``(I) any existing or
                                    anticipated homeownership
                                    programs and rental programs to
                                    be carried out during the
                                    period covered by the plan; and
                                      ``(II) the requirements and
                                    assistance available under the
                                    programs referred to in
                                    subclause (I);
                              ``(vi) a description of--
                                      ``(I) any existing or
                                    anticipated housing
                                    rehabilitation programs
                                    necessary to ensure the long-
                                    term viability of the housing
                                    to be carried out during the
                                    period covered by the plan; and
                                      ``(II) the requirements and
                                    assistance available under the
                                    programs referred to in
                                    subclause (I);
                              ``(vii) a description of--
                                      ``(I) all other existing or
                                    anticipated housing assistance
                                    provided by the Department of
                                    Hawaiian Home Lands during the
                                    period covered by the plan,
                                    including--
                                              ``(aa) transitional
                                            housing;
                                              ``(bb) homeless
                                            housing;
                                              ``(cc) college
                                            housing; and
                                              ``(dd) supportive
                                            services housing; and
                                      ``(II) the requirements and
                                    assistance available under such
                                    programs;
                              ``(viii)(I) a description of any
                            housing to be demolished or disposed
                            of;
                              ``(II) a timetable for that
                            demolition or disposition; and
                              ``(III) any other information
                            required by the Secretary with respect
                            to that demolition or disposition;
                              ``(ix) a description of the manner in
                            which the Department of Hawaiian Home
                            Lands will coordinate with welfare
                            agencies in the State of Hawaii to
                            ensure that residents of the affordable
                            housing will be provided with access to
                            resources to assist in obtaining
                            employment and achieving self-
                            sufficiency;
                              ``(x) a description of the
                            requirements established by the
                            Department of Hawaiian Home Lands to--
                                      ``(I) promote the safety of
                                    residents of the affordable
                                    housing;
                                      ``(II) facilitate the
                                    undertaking of crime prevention
                                    measures;
                                      ``(III) allow resident input
                                    and involvement, including the
                                    establishment of resident
                                    organizations; and
                                      ``(IV) allow for the
                                    coordination of crime
                                    prevention activities between
                                    the Department and local law
                                    enforcement officials; and
                              ``(xi) a description of the entities
                            that will carry out the activities
                            under the plan, including the
                            organizational capacity and key
                            personnel of the entities.
                      ``(E) Certification of compliance.--Evidence
                    of compliance that shall include, as
                    appropriate--
                              ``(i) a certification that the
                            Department of Hawaiian Home Lands will
                            comply with--
                                      ``(I) title VI of the Civil
                                    Rights Act of 1964 (42 U.S.C.
                                    2000d et seq). or with title
                                    VIII of the Civil Rights Act of
                                    1968 (42 U.S.C. 3601 et seq.)
                                    in carrying out this title, to
                                    the extent that such title is
                                    applicable; and
                                    ``(II) other applicable Federal
                                    statutes;
                              ``(ii) a certification that the
                            Department will require adequate
                            insurance coverage for housing units
                            that are owned and operated or assisted
                            with grant amounts provided under this
                            title, in compliance with such
                            requirements as may be established by
                            the Secretary;
                              ``(iii) a certification that policies
                            are in effect and are available for
                            review by the Secretary and the public
                            governing the eligibility, admission,
                            and occupancy of families for housing
                            assisted with grant amounts provided
                            under this title;
                              ``(iv) a certification that policies
                            are in effect and are available for
                            review by the Secretary and the public
                            governing rents charged, including the
                            methods by which such rents or
                            homebuyer payments are determined, for
                            housing assisted with grant amounts
                            provided under this title; and
                              ``(v) a certification that policies
                            are in effect and are available for
                            review by the Secretary and the public
                            governing the management and
                            maintenance of housing assisted with
                            grant amounts provided under this
                            title.
        ``(d) Applicability of Civil Rights Statutes.--
              ``(1) In general.--To the extent that the
            requirements of title VI of the Civil Rights Act of
            1964 (42 U.S.C. 2000d et seq.) or of title VIII of the
            Civil Rights Act of 1968 (42 U.S.C. 3601 et seq.) apply
            to assistance provided under this title, nothing in the
            requirements concerning discrimination on the basis of
            race shall be construed to prevent the provision of
            assistance under this title--
                      ``(A) to the Department of Hawaiian Home
                    Lands on the basis that the Department served
                    Native Hawaiians; or
                      ``(B) to an eligible family on the basis that
                    the family is a Native Hawaiian family.
              ``(2) Civil rights.--Program eligibility under this
            title may be restricted to Native Hawaiians. Subject to
            the preceding sentence, no person may be discriminated
            against on the basis of race, color, national origin,
            religion, sex, familial status, or disability.
        ``(e) Use of Nonprofit Organizations.--As a condition of
    receiving grant amounts under this title, the Department of
    Hawaiian Home Lands shall, to the extent practicable, provide
    for private nonprofit organizations experienced in the planning
    and development of affordable housing for Native Hawaiians to
    carry out affordable housing activities with those grant
    amounts.

    ``SEC. 804. REVIEW OF PLANS.

        ``(a) Review and Notice.--
              ``(1) Review.--
                      ``(A) In general.--The Secretary shall
                    conduct a review of a housing plan submitted to
                    the Secretary under section 803 to ensure that
                    the plan complies with the requirements of that
                    section.
                      ``(B) Limitation.--The Secretary shall have
                    the discretion to review a plan referred to in
                    subparagraph (A) only to the extent that the
                    Secretary considers that the review is
                    necessary.
              ``(2) Notice.--
                      ``(A) In general.--Not later than 60 days
                    after receiving a plan under section 803, the
                    Secretary shall notify the Director of the
                    Department of Hawaiian Home Lands whether the
                    plan complies with the requirements under that
                    section.
                      ``(B) Effect of failure of secretary to take
                    action.--For purposes of this title, if the
                    Secretary does not notify the Director, as
                    required under this subsection and subsection
                    (b), upon the expiration of the 60-day period
                    described in subparagraph (A)--
                              ``(i) the plan shall be considered to
                            have been determined to comply with the
                            requirements under section 803; and
                              ``(ii) the Director shall be
                            considered to have been notified of
                            compliance.
        ``(b) Notice of Reasons for Determination of
    Noncompliance.--If the Secretary determines that a plan
    submitted under section 803 does not comply with the
    requirements of that section, the Secretary shall specify in
    the notice under subsection (a)--
              ``(1) the reasons for noncompliance; and
              ``(2) any modifications necessary for the plan to
            meet the requirements of section 803.
        ``(c) Review.--
              ``(1) In general.--After the Director of the
            Department of Hawaiian Home Lands submits a housing
            plan under section 803, or any amendment or
            modification to the plan to the Secretary, to the
            extent that the Secretary considers such action to be
            necessary to make a determination under this
            subsection, the Secretary shall review the plan
            (including any amendments or modifications thereto) to
            determine whether the contents of the plan--
                      ``(A) set forth the information required by
                    section 803 to be contained in the housing
                    plan;
                      ``(B) are consistent with information and
                    data available to the Secretary; and
                      ``(C) are not prohibited by or inconsistent
                    with any provision of this Act or any other
                    applicable law.
              ``(2) Incomplete plans.--If the Secretary determines
            under this subsection that any of the appropriate
            certifications required under section 803(c)(2)(E) are
            not included in a plan, the plan shall be considered to
            be incomplete.
        ``(d) Updates to Plan.--
              ``(1) In general.--Subject to paragraph (2), after a
            plan under section 803 has been submitted for a fiscal
            year, the Director of the Department of Hawaiian Home
            Lands may comply with the provisions of that section
            for any succeeding fiscal year (with respect to
            information included for the 5-year period under
            section 803(b) or for the 1-year period under section
            803(c)) by submitting only such information regarding
            such changes as may be necessary to update the plan
            previously submitted.
              ``(2) Complete plans.--The Director shall submit a
            complete plan under section 803 not later than 4 years
            after submitting an initial plan under that section,
            and not less frequently than every 4 years thereafter.
        ``(e) Effective Date.--This section and section 803 shall
    take effect on the date provided by the Secretary pursuant to
    section 807(a) to provide for timely submission and review of
    the housing plan as necessary for the provision of assistance
    under this title for fiscal year 2000.

    ``SEC. 805. TREATMENT OF PROGRAM INCOME AND LABOR STANDARDS.

        ``(a) Program Income.--
              ``(1) Authority to retain.--The Department of
            Hawaiian Home Lands may retain any program income that
            is realized from any grant amounts received by the
            Department under this title if--
                      ``(A) that income was realized after the
                    initial disbursement of the grant amounts
                    received by the Department; and
                      ``(B) the Director agrees to use the program
                    income for affordable housing activities in
                    accordance with the provisions of this title.
              ``(2) Prohibition of reduction of grant.--The
            Secretary may not reduce the grant amount for the
            Department of Hawaiian Home Lands based solely on--
                      ``(A) whether the Department retains program
                    income under paragraph (1); or
                      ``(B) the amount of any such program income
                    retained.
              ``(3) Exclusion of amounts.--The Secretary may, by
            regulation, exclude from consideration as program
            income any amounts determined to be so small that
            compliance with the requirements of this subsection
            would create an unreasonable administrative burden on
            the Department.
        ``(b) Labor Standards.--
              ``(1) In general.--Any contract or agreement for
            assistance, sale, or lease pursuant to this title shall
            contain--
                      ``(A) a provision requiring that an amount
                    not less than the wages prevailing in the
                    locality, as determined or adopted (subsequent
                    to a determination under applicable State or
                    local law) by the Secretary, shall be paid to
                    all architects, technical engineers, draftsmen,
                    technicians employed in the development and all
                    maintenance, and laborers and mechanics
                    employed in the operation, of the affordable
                    housing project involved; and
                      ``(B) a provision that an amount not less
                    than the wages prevailing in the locality, as
                    predetermined by the Secretary of Labor
                    pursuant to the Act commonly known as the
                    `Davis-Bacon Act' (46 Stat. 1494, chapter 411;
                    40 U.S.C. 276a et seq.) shall be paid to all
                    laborers and mechanics employed in the
                    development of the affordable housing involved.
              ``(2) Exceptions.--Paragraph (1) and provisions
            relating to wages required under paragraph (1) in any
            contract or agreement for assistance, sale, or lease
            under this title, shall not apply to any individual who
            performs the services for which the individual
            volunteered and who is not otherwise employed at any
            time in the construction work and received no
            compensation or is paid expenses, reasonable benefits,
            or a nominal fee for those services.

    ``SEC. 806. ENVIRONMENTAL REVIEW.

        ``(a) In General.--
              ``(1) Release of funds.--
                      ``(A) In general.--The Secretary may carry
                    out the alternative environmental protection
                    procedures described in subparagraph (B) in
                    order to ensure--
                              ``(i) that the policies of the
                            National Environmental Policy Act of
                            1969 (42 U.S.C. 4321 et seq.) and other
                            provisions of law that further the
                            purposes of such Act (as specified in
                            regulations issued by the Secretary)
                            are most effectively implemented in
                            connectionwith the expenditure of grant
    amounts provided under this title; and
                              ``(ii) to the public undiminished
                            protection of the environment.
                      ``(B) Alternative environmental protection
                    procedure.--In lieu of applying environmental
                    protection procedures otherwise applicable, the
                    Secretary may by regulation provide for the
                    release of funds for specific projects to the
                    Department of Hawaiian Home Lands if the
                    Director of the Department assumes all of the
                    responsibilities for environmental review,
                    decisionmaking, and action under the National
                    Environmental Policy Act of 1969 (42 U.S.C.
                    4321 et seq.), and such other provisions of law
                    as the regulations of the Secretary specify,
                    that would apply to the Secretary were the
                    Secretary to undertake those projects as
                    Federal projects.
              ``(2) Regulations.--
                      ``(A) In general.--The Secretary shall issue
                    regulations to carry out this section only
                    after consultation with the Council on
                    Environmental Quality.
                      ``(B) Contents.--The regulations issued under
                    this paragraph shall--
                              ``(i) provide for the monitoring of
                            the environmental reviews performed
                            under this section;
                              ``(ii) in the discretion of the
                            Secretary, facilitate training for the
                            performance of such reviews; and
                              ``(iii) provide for the suspension or
                            termination of the assumption of
                            responsibilities under this section.
              ``(3) Effect on assumed responsibility.--The duty of
            the Secretary under paragraph (2)(B) shall not be
            construed to limit or reduce any responsibility assumed
            by the Department of Hawaiian Home Lands for grant
            amounts with respect to any specific release of funds.
        ``(b) Procedure.--
              ``(1) In general.--The Secretary shall authorize the
            release of funds subject to the procedures under this
            section only if, not less than 15 days before that
            approval and before any commitment of funds to such
            projects, the Director of the Department of Hawaiian
            Home Lands submits to the Secretary a request for such
            release accompanied by a certification that meets the
            requirements of subsection (c).
              ``(2) Effect of approval.--The approval of the
            Secretary of a certification described in paragraph (1)
            shall be deemed to satisfy the responsibilities of the
            Secretary under the National Environmental Policy Act
            of 1969 (42 U.S.C. 4321 et seq.) and such other
            provisions of law as the regulations of the Secretary
            specify to the extent that those responsibilities
            relate to the release of funds for projects that are
            covered by that certification.
        ``(c) Certification.--A certification under the procedures
    under this section shall--
              ``(1) be in a form acceptable to the Secretary;
              ``(2) be executed by the Director of the Department
            of Hawaiian Home Lands;
              ``(3) specify that the Department of Hawaiian Home
            Lands has fully carried out its responsibilities as
            described under subsection (a); and
              ``(4) specify that the Director--
                      ``(A) consents to assume the status of a
                    responsible Federal official under the National
                    Environmental Policy Act of 1969 (42 U.S.C.
                    4321 et seq.) and each provision of law
                    specified in regulations issued by the
                    Secretary to the extent that those laws apply
                    by reason of subsection (a); and
                      ``(B) is authorized and consents on behalf of
                    the Department of Hawaiian Home Lands and the
                    Director accepts the jurisdiction of the
                    Federal courts for the purpose of enforcement
                    of the responsibilities of the Director of the
                    Department of Hawaiian Home Lands as such an
                    official.

    ``SEC. 807. REGULATIONS.

        ``The Secretary shall issue final regulations necessary to
    carry out this title not later than June 1, 1999.

    ``SEC. 808. EFFECTIVE DATE.

        ``Except as otherwise expressly provided in this title,
    this title shall take effect on June 1, 1999.

    ``SEC. 809. AFFORDABLE HOUSING ACTIVITIES.

        ``(a) National Objectives and Eligible Families--
              ``(1) Primary objective.--The national objectives of
            this title are--
                      ``(A) to assist and promote affordable
                    housing activities to develop, maintain, and
                    operate affordable housing in safe and healthy
                    environments for occupancy by low-income Native
                    Hawaiian families;
                      ``(B) to ensure better access to private
                    mortgage markets and to promote self-
                    sufficiency of low-income Native Hawaiian
                    families;
                      ``(C) to coordinate activities to provide
                    housing for low-income Native Hawaiian families
                    with Federal, State and local activities to
                    further economic and community development;
                      ``(D) to plan for and integrate
                    infrastructure resources on the Hawaiian Home
                    Lands with housing development; and
                      ``(E) to--
                              ``(i) promote the development of
                            private capital markets; and
                              ``(ii) allow the markets referred to
                            in clause (i) to operate and grow,
                            thereby benefiting Native Hawaiian
                            communities.
              ``(2) Eligible families.--
                      ``(A) In general.--Except as provided under
                    subparagraph (B), assistance for eligible
                    housing activities under this title shall be
                    limited to low-income Native Hawaiian families.
                      ``(B) Exception to low-income requirement.--
                              ``(i) In general.--The Director may
                            provide assistance for homeownership
                            activities under--
                                      ``(I) section 810(b);
                                      ``(II) model activities under
                                    section 810(f); or
                                      ``(III) loan guarantee
                                    activities under section 184A
                                    of the Housing and Community
                                    Development Act of 1992 to
                                    Native Hawaiian families who
                                    are not low-income families, to
                                    the extent that the Secretary
                                    approves the activities under
                                    that section to address a need
                                    for housing for those families
                                    that cannot be reasonably met
                                    without that assistance.
                              ``(ii) Limitations. The Secretary
                            shall establish limitations on the
                            amount of assistance that may be
                            provided under this title for
                            activities for families that are not
                            low-income families.
                      ``(C) Other families.--Notwithstanding
                    paragraph (1), the Director may provide housing
                    or housing assistance provided through
                    affordable housing activities assisted with
                    grant amounts under this title to a family that
                    is not composed of Native Hawaiians if--
                              ``(i) the Department determines that
                            the presence of the family in the
                            housing involved is essential to the
                            well-being of Native Hawaiian families;
                            and
                              ``(ii) the need for housing for the
                            family cannot be reasonably met without
                            the assistance.
                      ``(D) Preference.--
                              ``(i) In general.--A housing plan
                            submitted under section 803 may
                            authorize a preference, for housing or
                            housing assistance provided through
                            affordable housing activities assisted
                            with grant amounts provided under this
                            title to be provided, to the extent
                            practicable, to families that are
                            eligible to reside on the Hawaiian Home
                            Lands.
                              ``(ii) Application.--In any case in
                            which a housing plan provides for
                            preference described in clause (i), the
                            Director shall ensure that housing
                            activities that are assisted with grant
                            amounts under this title are subject to
                            that preference.
                      ``(E) Use of nonprofit organizations.--As a
                    condition of receiving grant amounts under this
                    title, the Department of Hawaiian Home Lands,
                    shall to the extent practicable, provide for
                    private nonprofit organizations experienced in
                    the planning and development of affordable
                    housing for Native Hawaiians to carry out
                    affordable housing activities with those grant
                    amounts.

    ``SEC. 180. ELIGIBLE AFFORDABLE HOUSING ACTIVITIES.

        ``(a) In General.--Affordable housing activities under this
    section are activities conducted in accordance with the
    requirements of section 811 to--
              ``(1) develop or to support affordable housing for
            rental or homeownership; or
              ``(2) provide housing services with respect to
            affordable housing, through the activities described in
            subsection (b).
        ``(b) Activities.--The activities described in this
    subsection are the following:
              ``(1) Development.--The acquisition, new
            construction, reconstruction, or moderate or
            substantial rehabilitation of affordable housing, which
            may include--
                      ``(A) real property acquisition;
                      ``(B) site improvement;
                      ``(C) the development of utilities and
                    utility services;
                      ``(D) conversion;
                      ``(E) demolition;
                      ``(F) financing;
                      ``(G) administration and planning; and
                      ``(H) other related activities.
              ``(2) Housing services.--The provision of housing-
            related services for affordable housing, including--
                      ``(A) housing counseling in connection with
                    rental or homeownership assistance;
                      ``(B) the establishment and support of
                    resident organizations and resident management
                    corporations;
                      ``(C) energy auditing;
                      ``(D) activities related to the provision of
                    self-sufficiency and other services; and
                      ``(E) other services related to assisting
                    owners, tenants, contractors, and other
                    entities participating or seeking to
                    participate in other housing activities
                    assisted pursuant to this section.
              ``(3) Housing management services.--The provision of
            management services for affordable housing, including--
                      ``(A) the preparation of work specifications;
                      ``(B) loan processing;
                      ``(C) inspections;
                      ``(D) tenant selection;
                      ``(E) management of tenant-based rental
                    assistance; and
                      ``(F) management of affordable housing
                    projects.
              ``(4) Crime prevention and safety activities.--The
            provision of safety, security, and law enforcement
            measures and activities appropriate to protect
            residents of affordable housing from crime.
              ``(5) Model activities.--Housing activities under
            model programs that are--
                      ``(A) designed to carry out the purposes of
                    this title; and
                      ``(B) specifically approved by the Secretary
                    as appropriate for the purpose referred to in
                    subparagraph (A).

    ``SEC. 811. PROGRAM REQUIREMENTS.

        ``(a) Rents.--
              ``(1) Establishment.--Subject to paragraph (2), as a
            condition to receiving grant amounts under this title,
            the Director shall develop written policies governing
            rents and homebuyer payments charged for dwelling units
            assisted under this title, including methods by which
            such rents and homebuyer payments are determined.
              ``(2) Maximum rent.--In the case of any low-income
            family residing in a dwelling unit assisted with grant
            amounts under this title, the monthly rent or homebuyer
            payment (as applicable) for that dwelling unit may not
            exceed 30 percent of the monthly adjusted income of
            that family.
        ``(b) Maintenance and Efficient Operation.--
              ``(1) In general.--The Director shall, using amounts
            of any grants received under this title, reserve and
            use for operating under section 810 such amounts as may
            be necessary to provide for the continued maintenance
            and efficient operation of such housing.
              ``(2) Disposal of certain housing.--This subsection
            may not be construed to prevent the Director, or any
            entity funded by the Department, from demolishing or
            disposing of housing, pursuant to regulations
            established by the Secretary.
        ``(c) Insurance Coverage.--As a condition to receiving
    grant amounts under this title, the Director shall require
    adequate insurance coverage for housing units that are owned or
    operated or assisted with grant amounts provided under this
    title.
        ``(d) Eligibility for Admission.--As a condition to
    receiving grant amounts under this title, the Director shall
    develop written policies governing the eligibility, admission,
    and occupancy of families for housing assisted with grant
    amounts provided under this title.
        ``(e) Management and Maintenance.--As a condition to
    receiving grant amounts under this title, the Director shall
    develop policies governing the management and maintenance of
    housing assisted with grant amounts under this title.

    ``SEC. 812. TYPES OF INVESTMENTS.

        ``(a) In General.--Subject to section 811 and an applicable
    housing plan approved under section 803, the Director shall
    have--
              ``(1) the discretion to use grant amounts for
            affordable housing activities through the use of--
                      ``(A) equity investments;
                      ``(B) interest-bearing loans or advances;
                      ``(C) noninterest-bearing loans or advances;
                      ``(D) interest subsidies;
                      ``(E) the leveraging of private investments;
                    or
                      ``(F) any other form of assistance that the
                    Secretary determines to be consistent with the
                    purposes of this title; and
              ``(2) the right to establish the terms of assistance
            provided with funds referred to in paragraph (1).
        ``(b) Investments.--The Director of the Department of
    Hawaiian Home Lands may invest grant amounts for the purposes
    of carrying out affordable housing activities in investment
    securities and other obligations, as approved by the Secretary.

    ``SEC. 813. LOW-INCOME REQUIREMENT AND INCOME TARGETING.

        ``(a) In General.--Housing shall qualify for affordable
    housing for purposes of this title only if--
              ``(1) each dwelling unit in the housing--
                      ``(A) in the case of rental housing, is made
                    available for occupancy only by a family that
                    is a low-income family at the time of the
                    initial occupancy of that family of that unit;
                    and
                      ``(B) in the case of housing for
                    homeownership, is made available for purchase
                    only by a family that is a low-income family at
                    the time of purchase; and
              ``(2) each dwelling unit in the housing will remain
            affordable, according to binding commitments
            satisfactory to the Secretary, for--
                      ``(A) the remaining useful life of the
                    property (as determined by the Secretary)
                    without regard to the term of the mortgage or
                    to transfer of ownership; or
                      ``(B) such other period as the Secretary
                    determines is the longest feasible period of
                    time consistent with sound economics and the
                    purposes of this title, except upon a
                    foreclosure by a lender (or upon other transfer
                    in lieu of foreclosure) if that action--
                              ``(i) recognizes any contractual or
                            legal rights of any public agency,
                            nonprofit sponsor, or other person or
                            entity to take an action that would--
                                      ``(I) avoid termination of
                                    low-income affordability, in
                                    the case of foreclosure; or
                                      ``(II) transfer ownership in
                                    lieu of foreclosure; and
                              ``(ii) is not for the purpose of
                            avoiding low-income affordability
                            restrictions, as determined by the
                            Secretary.
        ``(b) Exception.--Notwithstanding subsection (a), housing
    assisted pursuant to section 809(a)(2)(B) shall be considered
    affordable housing for purposes of this title.

    ``SEC. 814. LEASE REQUIREMENTS AND TENANT SELECTION.

        ``(a) Leases.--Except to the extent otherwise provided by
    or inconsistent with the laws of the State of Hawaii, in
    renting dwelling units in affordable housing assisted with
    grant amounts provided under this title, the Director, owner,
    or manager shall use leases that--
              ``(1) do not contain unreasonable terms and
            conditions;
              ``(2) require the Director, owner, or manager to
            maintain the housing in compliance with applicable
            housing codes and quality standards;
              ``(3) require the Director, owner, or manager to give
            adequate written notice of termination of the lease,
            which shall be the period of time required under
            applicable State or local law;
              ``(4) specify that, with respect to any notice of
            eviction or termination, notwithstanding any State or
            local law, a resident shall be informed of the
            opportunity, before any hearing or trial, to examine
            any relevant documents, record, or regulations directly
            related to the eviction or termination;
              ``(5) require that the Director, owner, or manager
            may not terminate the tenancy, during the term of the
            lease, except for serious or repeated violation of the
            terms and conditions of the lease, violation of
            applicable Federal, State, or local law, or for other
            good cause; and
              ``(6) provide that the Director, owner, and manager
            may terminate the tenancy of a resident for any
            activity, engaged in by the resident, any member of the
            household of the resident, or any guest or other person
            under the control of the resident, that--
                      ``(A) threatens the health or safety of, or
                    right to peaceful enjoyment of the premises by,
                    other residents or employees of the Department,
                    owner, or manager;
                      ``(B) threatens the health or safety of, or
                    right to peaceful enjoyment of their premises
                    by, persons residing in the immediate vicinity
                    of the premises; or
                      ``(C) is criminal activity (including drug-
                    related criminal activity) on or off the
                    premises.
        ``(b) Tenant or Homebuyer Selection.--As a condition to
    receiving grant amounts under this title, the Director shall
    adopt and use written tenant and homebuyer selection policies
    and criteria that--
              ``(1) are consistent with the purpose of providing
            housing for low-income families;
              ``(2) are reasonably related to program eligibility
            and the ability of the applicant to perform the
            obligations of the lease; and
              ``(3) provide for--
                      ``(A) the selection of tenants and homebuyers
                    from a written waiting list in accordance with
                    the policies and goals set forth in an
                    applicable housing plan approved under section
                    803; and
                      ``(B) the prompt notification in writing to
                    any rejected applicant of the grounds for that
                    rejection.

    ``SEC. 815. REPAYMENT.

        ``If the Department of Hawaiian Home Lands uses grant
    amounts to provide affordable housing under activities under
    this title and, at any time during the useful life of the
    housing, the housing does not comply with the requirement under
    section 813(a)(2), the Secretary shall--
              ``(1) reduce future grant payments on behalf of the
            Department by an amount equal to the grant amounts used
            for that housing (under authority of section
            818(a)(1)(B)); or
              ``(2) require repayment to the Secretary of any
            amount equal to those grant amounts.

    ``SEC. 816. ANNUAL ALLOCATION.

        ``For each fiscal year, the Secretary shall allocate any
    amounts made available for assistance under this title for the
    fiscal year, in accordance with the formula established
    pursuant to section 817 to the Department of Hawaiian Home
    Lands if the Department complies with the requirements under
    this title for a grant under this title.

    ``SEC. 817. ALLOCATION FORMULA.

        ``(a) Establishment.--The Secretary shall, by regulation
    issued not later than the expiration of the 6-month period
    beginning on the date of enactment of the native American
    Housing Assistance and Self-Determination Amendments of 1998,
    in the manner provided under section 807, establish a formula
    to provide for the allocation of amounts available for a fiscal
    year for block grants under this title in accordance with the
    requirements of this section.
        ``(b) Factors for Determination of Need.--The formula under
    subsection (a) shall be based on factors that reflect the needs
    for assistance for affordable housing activities, including--
              ``(1) the number of low-income dwelling units owned
            or operated at the time pursuant to a contract between
            the Director and the Secretary;
              ``(2) the extent of poverty and economic distress and
            the number of Native Hawaiian families eligible to
            reside on the Hawaiian Home Lands; and
              ``(3) any other objectively measurable conditions
            that the Secretary and the Director may specify.
        ``(c) Other Factors for Consideration.--In establishing the
    formula under subsection (a), the Secretary shall consider the
    relative administrative capacities of the Department of
    Hawaiian Home Lands and other challenges faced by the
    Department, including--
              ``(1) geographic distribution within Hawaiian Home
            Lands; and
              ``(2) technical capacity.
        ``(d) Effective Date.--This section shall take effect on
    the date of enactment of the Native American Housing Assistance
    and Self-Determination Amendments of 1998.

    ``SEC. 818. REMEDIES FOR NONCOMPLIANCE.

        ``(a) Actions by Secretary Affecting Grant Amounts.--
              ``(1) In general.--Except as provided in subsection
            (b), if the Secretary finds after reasonable notice and
            opportunity for a hearing that the Department of
            Hawaiian Home Lands has failed to comply substantially
            with any provision of this title, the Secretary shall--
                      ``(A) terminate payments under this title to
                    the Department;
                      ``(B) reduce payments under this title to the
                    Department by an amount equal to the amount of
                    such payments that were not expended in
                    accordance with this title; or
                      ``(C) limit the availability of payments
                    under this title to programs, projects, or
                    activities not affected by such failure to
                    comply.
              ``(2) Actions.--If the Secretary takes an action
            under subparagraph (A), (B), or (C) of paragraph (1),
            the Secretary shall continue that action until the
            Secretary determines that the failure by the Department
            to comply with the provision has been remedied by the
            Department and the Department is in compliance with
            that provision.
        ``(b) Noncompliance Because of a Technical Incapacity.--The
    Secretary may provide technical assistance for the Department,
    either directly or indirectly, that is designed to increase the
    capability and capacity of the Director of the Department to
    administer assistance provided under this title in compliance
    with requirements under this title if the Secretary makes a
    finding under subsection (a), but determines that the failure
    of the Department to comply substantially with the provisions
    of this title--
              ``(1) is not a pattern or practice of activities
            constituting willful noncompliance; and
              ``(2) is a result of the limited capability or
            capacity of the Department of Hawaiian Home Lands.
        ``(c) Referral for Civil Action.--
              ``(1) Authority.--In lieu of, or in addition to, any
            action that the Secretary may take under subsection
            (a), if the Secretary has reason to believe that the
            Department of Hawaiian Home Lands has failed to comply
            substantially with any provision of this title, the
            Secretary may refer the matter to the Attorney General
            of the United States with a recommendation that any
            appropriate civil action to instituted.
              ``(2) Civil Action.--Upon receiving a referral under
            paragraph (1), the Attorney General may bring a civil
            action in any United States district court of
            appropriate jurisdiction for such relief as may be
            appropriate, including an action--
                      ``(A) to recover the amount of the assistance
                    furnished under this title that was not
                    expended in accordance with this title; or
                      ``(B) for mandatory or injunctive relief.
        ``(d) Review.--
              ``(1) In general.--If the Director receives notice
            under subsection (a) of the termination, reduction, or
            limitation of payments under this Act, the Director--
                      ``(A) may, not later than 60 days after
                    receiving such notice, file with the United
                    States Court of Appeals for the Ninth Circuit,
                    or in the United States Court of Appeals for
                    the District of Columbia, a petition for review
                    of the action of the Secretary; and
                      ``(B) upon the filing of any petition under
                    subparagraph (A), shall forthwith transmit
                    copies of the petition to the Secretary and the
                    Attorney General of the United States, who
                    shall represent the Secretary in the
                    litigation.
              ``(2) Procedure.--
                      ``(A) In general.--The Secretary shall file
                    in the court a record of the proceeding on
                    which the Secretary based the action, as
                    provided in section 2112 of title 28, United
                    States Code.
                      ``(B) Objections.--No objection to the action
                    of the Secretary shall be considered by the
                    court unless the Department has registered the
                    objection before the Secretary.
              ``(3) Disposition.--
                      ``(A) Court Proceedings.--
                              ``(i) Jurisdiction of Court.--The
                            court shall have jurisdiction to affirm
                            or modify the action of the Secretary
                            or to set the action aside in whole or
                            in part.
                              ``(ii) Findings of Fact.--If
                            supported by substantial evidence on
                            the record considered as a whole, the
                            findings of fact by the Secretary shall
                            be conclusive.
                              ``(iii) Addition.--The court may
                            order evidence, in addition to the
                            evidence submitted for review under
                            this subsection, to be taken by the
                            Secretary, and to be made part of the
                            record.
                      ``(B) Secretary.--
                              ``(i) In general.--The Secretary, by
                            reason of the additional evidence
                            referred to in subparagraph (A) and
                            filed with the court--
                                      ``(I) may--
                                              ``(aa) modify the
                                            findings of fact of the
                                            Secretary; or
                                              ``(bb) make new
                                            findings; and
                                      ``(II) shall file--
                                              ``(aa) such modified
                                            or new findings; and
                                              ``(bb) the
                                            recommendation of the
                                            Secretary, if any, for
                                            the modification or
                                            setting aside of the
                                            original action of the
                                            Secretary.
                              ``(ii) Findings.--The findings
                            referred to in clause (i)(II)(bb)
                            shall, with respect to a question of
                            fact, be considered to be conclusive if
                            those findings are--
                                      ``(I) supported by
                                    substantial evidence on the
                                    record; and
                                      ``(II) considered as a whole.
              ``(4) Finality.--
                      ``(A) In general.--Except as provided in
                    subparagraph (B), upon the filing of the record
                    under this subsection with the court--
                              ``(i) the jurisdiction of the court
                            shall be exclusive; and
                              ``(ii) the judgment of the court
                            shall be final.
                      ``(B) Review by supreme court.--A judgment
                    under subparagraph (A) shall be subject to
                    review by the Supreme Court of the United
                    States upon writ of certiorari or
                    certification, as provided in section 1254 of
                    title 28, United States Code.

    ``SEC. 819. MONITORING OF COMPLIANCE.

        ``(a) Enforceable Agreements.--
              ``(1) In general.--The Director, through binding
            contractual agreements with owners or other authorized
            entities, shall ensure long-term compliance with the
            provisions of this title.
              ``(2) Measures.--The measures referred to in
            paragraph (1) shall provide for--
                      ``(A) to the extent allowable by Federal and
                    State law, the enforcement of the provisions of
                    this title by the Department and the Secretary;
                    and
                      ``(B) remedies for breach of the provisions
                    referred to in paragraph (1).
        ``(b) Periodic Monitoring.--
              ``(1) In general.--Not less frequently than annually,
            the Director shall review the activities conducted and
            housing assisted under this title to assess compliance
            with the requirements of this title.
              ``(2) Review.--Each review under paragraph (1) shall
            include onsite inspection of housing to determine
            compliance with applicable requirements.
              ``(3) Results.--The results of each review under
            paragraph (1) shall be--
                      ``(A) included in a performance report of the
                    Director submitted to the Secretary under
                    section 820; and
                      ``(B) made available to the public.
        ``(c) Performance Measures.--The Secretary shall establish
    such performance measures as may be necessary to assess
    compliance with the requirements of this title.

    ``SEC. 820. PERFORMANCE REPORTS.

        ``(a) Requirement.--For each fiscal year, the Director
    shall--
              ``(1) review the progress the Department has made
            during that fiscal year in carrying out the housing
            plan submitted by the Department under section 803; and
              ``(2) submit a report to the Secretary (in a form
            acceptable to the Secretary) describing the conclusions
            of the review.
        ``(b) Content.--Each report submitted under this section
    for a fiscal year shall--
              ``(1) describe the use of grant amounts provided to
            the Department of Hawaiian Home Lands for that fiscal
            year;
              ``(2) assess the relationship of the use referred to
            in paragraph (1) to the goals identified in the housing
            plan;
              ``(3) indicate the programmatic accomplishments of
            the Department; and
              ``(4) describe the manner in which the Department
            would change its housing plan submitted under section
            803 as a result of its experiences.
        ``(c) Submissions.--The Secretary shall--
              ``(1) establish a date for submission of each report
            under this section;
              ``(2) review each such report; and
              ``(3) with respect to each such report, make
            recommendations as the Secretary considers appropriate
            to carry out the purposes of this title.
        ``(d) Public Availability.--
              ``(1) Comments by beneficiaries.--In preparing a
            report under this section, the Director shall make the
            report publicly available to the beneficiaries of the
            Hawaiian Homes Commission Act, 1920 (42 Stat. 108 et
            seq.) and give a sufficient amount of time to permit
            those beneficiaries to comment on that report before it
            is submitted to the Secretary (in such manner and at
            such time as the Director may determine).
              ``(2) Summary of comments.--The report shall include
            a summary of any comments received by the Director from
            beneficiaries under paragraph (1) regarding the program
            to carry out the housing plan.

    ``SEC. 821. REVIEW AND AUDIT BY SECRETARY.

        ``(a) Annual Review.--
              ``(1) In general.--The Secretary shall, not less
            frequently than on an annual basis, make such reviews
            and audits as may be necessary or appropriate to
            determine whether--
                      ``(A) the Director has--
                              ``(i) carried out eligible activities
                            under this title in a timely manner;
                              ``(ii) carried out and made
                            certifications in accordance with the
                            requirements and the primary objectives
                            of this title and with other applicable
                            laws; and
                              ``(iii) a continuing capacity to
                            carry out the eligible activities in a
                            timely manner;
                      ``(B) The Director has complied with the
                    housing plan submitted by the Director under
                    section 803; and
                      ``(C) the performance reports of the
                    Department under section 821 are accurate.
              ``(2) Onsite visits.--Each review conducted under
            this section shall, to the extent practicable, include
            onsite visits by employees of the Department of Housing
            and Urban Development.
        ``(b) Report by Secretary.--The Secretary shall give the
    Department of Hawaiian Home Lands not less than 30 days to
    review and comment on a report under this subsection. After
    taking into consideration the comments of the Department, the
    Secretary may revise the report and shall make the comments of
    the Department and the report with any revisions, readily
    available to the public not later than 30 days after receipt of
    the comments of the Department.
        ``(c) Effect of Reviews.--The Secretary may make
    appropriate adjustments in the amount of annual grants under
    this title in accordance with the findings of the Secretary
    pursuant to reviews and audits under this section. The
    Secretary may adjust, reduce, or withdraw grant amounts, or
    take other action as appropriate in accordance with the reviews
    and audits of the Secretary under this section, except that
    grant amounts already expended on affordable housing activities
    may not be recaptured or deducted from future assistance
    provided to the Department of Hawaiian Home Lands.

    ``SEC. 822. GENERAL ACCOUNTING OFFICE AUDITS.

        ``To the extent that the financial transactions of the
    Department of Hawaiian Home Lands involving grant amounts under
    this title relate to amounts provided under this title, those
    transactions may be audited by the Comptroller General of the
    United States under such regulations as may be prescribed by
    the Comptroller General. The Comptroller General of the United
    States shall have access to all books, accounts, records,
    reports, files, and other papers, things, or property belonging
    to or in use by the Department of Hawaiian Home Lands
    pertaining to such financial transactions and necessary to
    facilitate the audit.

    ``SEC. 823. REPORTS TO CONGRESS.

        ``(a) In General.--Not later than 90 days after the
    conclusion of each fiscal year in which assistance under this
    title is made available, the Secretary shall submit to the
    Congress a report that contains--
              ``(1) a description of the progress made in
            accomplishing the objectives of this title;
              ``(2) a summary of the use of funds available under
            this title during the preceding fiscal year; and
              ``(3) a description of the aggregate outstanding loan
            guarantees under section 184A of the Housing and
            Community Development Act of 1992.
        ``(b) Related Reports.--The Secretary may require the
    Director to submit to the Secretary such reports and other
    information as may be necessary in order for the Secretary to
    prepare the report required under subsection (a).

    ``SEC. 824. AUTHORIZATION OF APPROPRIATIONS.

        ``There are authorized to be appropriated to the Department
    of Housing and Urban Development for grants under this title
    such sums as may be necessary for each of fiscal years 1999,
    2000, 2001, 2002 and 2003.''.

               *       *       *       *       *       *       *

        Subtitle E of title I of the Housing and Community
    Development Act of 1992 is amended by inserting after section
    184 (12 U.S.C. 1715z-13a) the following:

    ``SEC. 184A. LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING.

        ``(a) Definitions.--In this section:
              ``(1) Department of hawaiian home lands.--The term
            Department of Hawaiian Home Lands' means the agency or
            department of the government of the State of Hawaii
            that is responsible for the administration of the
            Hawaiian Homes Commission Act, 1920 (42 Stat. 108 et
            seq.).
              ``(2) Eligible entity.--The term `eligible entity'
            means a Native Hawaiian family, the Department of
            Hawaiian Home Lands, the Office of Hawaiian Affairs, or
            private nonprofit or for-profit organizations
            experienced in the planning and development of
            affordable housing for Native Hawaiians.
              ``(3) Family.--The term `family' means 1 or more
            persons maintaining a household, as the Secretary shall
            by regulation provide.
              ``(4) Guarantee fund.--The term `Guarantee Fund'
            means the Native Hawaiian Housing Loan Guarantee Fund
            established under subsection (i) of this section.
              ``(5) Hawaiian home lands.--The term `Hawaiian Home
            Lands' means lands that--
                      ``(A) have the status of Hawaiian Home Lands
                    under section 204 of the Hawaiian Homes
                    Commission Act (42 Stat. 110); or
                      ``(B) are required pursuant to that Act.
              ``(6) Native hawaiian.--The term `Native Hawaiian'
            has the meaning given the terms `native Hawaiian' in
            section 201 of the Hawaiian Homes Commission Act, 1920
            (42 Stat. 108 et seq.).
              ``(7) Office of hawaiian affairs.--The term `Office
            of Hawaiian Affairs' means the entity of that name
            established under the constitution of the State of
            Hawaii.
        ``(b) Authority.--To provide access to sources of private
    financing to Native Hawaiian families who otherwise could not
    acquire housing financing because of the unique legal status of
    the Hawaiian Home Lands or as a result of a lack of access to
    private financial markets, the Secretary may guarantee an
    amount not to exceed 100 percent of the unpaid principal and
    interest that is due on an eligible loan under subsection (b).
        ``(c) Eligible Loans.--Under this section, a loan is an
    eligible loan if that loan meets the following requirements:
              ``(1) Eligible borrowers.--The loan is made only to a
            borrower who--
                      ``(A) is a Native Hawaiian family;
                      ``(B) the Department of Hawaiian Home Lands;
                      ``(C) the Office of Hawaiian Affairs; or
                      ``(D) a private nonprofit organization
                    experienced in the planning and development of
                    affordable housing for Native Hawaiians.
              ``(2) Eligible housing.--
                      ``(a) In general.--The loan will be used to
                    construct, acquire, or rehabilitate not more
                    than 4-family dwellings that are standard
                    housing and are located on Hawaiian Home Lands
                    for which a housing plan described in sub-
                    paragraph (B) applies.
                      ``(B) Housing plan.--A housing plan described
                    in this subparagraph is a housing plan that--
                              ``(i) has been submitted and approved
                            by the Secretary under section 803 of
                            the Native American Housing Assistance
                            and Self-Determination Amendments of
                            1998; and
                              ``(ii) provides for the use of loan
                            guarantees under this section to
                            provide affordable homeownership
                            housing on Hawaiian Home Lands.
              ``(3) Security.--The loan may be secured by any
            collateral authorized under applicable Federal law or
            State law.
              ``(4) Lenders.--
                      ``(A) In general.--The loan shall be made
                    only by a lender approved by, and meeting
                    qualifications established by, the Secretary,
                    including any lender described in subparagraph
                    (B), except that a loan otherwise insured or
                    guaranteed by an agency of the Federal
                    Government or made by the Department of
                    Hawaiian Home Lands from amounts borrowed from
                    the United States shall not be eligible for a
                    guarantee under this section.
                      ``(B) Approval.--The following lenders shall
                    be considered to be lenders that have been
                    approved by the Secretary:
                              ``(i) Any mortgagee approved by the
                            Secretary for participation in the
                            single family mortgage insurance
                            program under title II of the National
                            Housing Act (12 U.S.C.A. 1707 et seq.).
                              ``(ii) Any lender that makes housing
                            loans under chapter 37 of title 38,
                            United States Code, that are
                            automatically guaranteed under section
                            3702(d) of title 38, United States
                            Code.
                              ``(iii) Any lender approved by the
                            Secretary of Agriculture to make
                            guaranteed loans for single family
                            housing under the Housing Act of 1949
                            (42 U.S.C.A. 1441 et seq.).
                              ``(iv) Any other lender that is
                            supervised, approved, regulated, or
                            insured by any agency of the Federal
                            Government.
              ``(5) Terms.--The loan shall--
                      ``(A) be made for a term not exceeding 30
                    years;
                      ``(B) bear interest (exclusive of the
                    guarantee fee under subsection (d) and service
                    charges, if any) at a rate agreed upon by the
                    borrower and the lender and determined by the
                    Secretary to be reasonable, but not to exceed
                    the rate generally charged in the area (as
                    determined by the Secretary) for home mortgage
                    loans not guaranteed or insured by any agency
                    or instrumentality of the Federal Government;
                      ``(C) involve a principal obligation not
                    exceeding--
                              ``(i) 97.75 percent of the appraised
                            value of the property as of the date
                            the loan is accepted for guarantee (or
                            98.75 percent if the value of the
                            property is $50,000 or less); or
                              ``(ii) the amount approved by the
                            Secretary under this section; and
                      ``(D) involves a payment on account of the
                    property--
                              ``(i) in cash or its equivalent; or
                              ``(ii) through the value of any
                            improvements to the property made
                            through the skilled or unskilled labor
                            of the borrower, as the Secretary shall
                            provide.
        ``(d) Certificate of Guarantee.--
              ``(1) Approval process.--
                      ``(A) In general.--Before the Secretary
                    approves any loan for guarantee under this
                    section, the lender shall submit the
                    application for the loan to the Secretary for
                    examination.
                      ``(B) Approval.--If the Secretary approves
                    the application submitted under subparagraph
                    (A), the Secretary shall issue a certificate
                    under this subsection as evidence of the loan
                    guarantee approved.
              ``(2) Standard for approval.--The Secretary may
            approve a loan for guarantee under this section and
            issue a certificate under this subsection only if the
            Secretary determines that there is a reasonable
            prospect of repayment of the loan.
              ``(3) Effect.--
                      ``(A) In general.--A certificate of guarantee
                    issued under this subsection by the Secretary
                    shall be conclusive evidence of the eligibility
                    of the loan for guarantee under this section
                    and the amount of that guarantee.
                      ``(B) Evidence.--The evidence referred to in
                    subparagraph (A) shall be incontestable in the
                    hands of the bearer.
                      ``(C) Full faith and credit.--The full faith
                    and credit of the United States is pledged to
                    the payment of all amounts agreed to be paid by
                    the Secretary as security for the obligations
                    made by the Secretary under this section.
              ``(4) Fraud and misrepresentation.--This subsection
            may not be construed--
                      ``(A) to preclude the Secretary from
                    establishing defenses against the original
                    lender based on fraud or material
                    misrepresentation; or
                      ``(B) to bar the Secretary from establishing
                    by regulations that are on the date of issuance
                    or disbursement, whichever is earlier, partial
                    defenses to the amount payable on the
                    guarantee.
        ``(e) Guarantee Fee.--
              ``(1) In general.--The Secretary shall fix and
            collect a guarantee fee for the guarantee of a loan
            under this section, which may not exceed the amount
            equal to 1 percent of the principal obligation of the
            loan.
              ``(2) Payment.--The fee under this subsection shall--
                      ``(A) be paid by the lender at time of
                    issuance of the guarantee; and
                      ``(B) be adequate, In the determination of
                    the Secretary, to cover expenses and probable
                    losses.
              ``(3) Deposit.--The Secretary shall deposit any fees
            collected under this subsection in the Native Hawaiian
            Housing Loan Guarantee Fund established under
            subsection (j).
        ``(f) Liability Under Guarantee.--The liability under a
    guarantee provided under this section shall decrease or
    increase on a pro rata basis according to any decrease or
    increase in the amount of the unpaid obligation under the
    provisions of the loan agreement involved.
        ``(g) Transfer and Assumption.--Notwithstanding any other
    provision of law, any loan guaranteed under this section,
    including the security given for the loan, may be sold or
    assigned by the lender to any financial institution subject to
    examination and supervision by an agency of the Federal
    Government or of any State or the District of Columbia.
        ``(h) Disqualification of Lenders and Civil Money
    Penalties.--
              ``(1) In general.--
                      ``(A) Grounds for action.--If the Secretary
                    determines that any lender or holder of a
                    guarantee certificate under subsection (c)--
                              ``(i) has failed--
                                      ``(I) to maintain adequate
                                    accounting records;
                                      ``(II) to serve adequately
                                    loans guaranteed under this
                                    section; or
                                      ``(III) to exercise proper
                                    credit or underwriting
                                    judgment; or
                              ``(ii) has engaged in practices
                            otherwise detrimental to the interest
                            of a borrower or the United States, the
                            Secretary may take action under
                            subparagraph (B).
                      ``(B) Actions.--Upon a determination by the
                    Secretary that a holder of a guarantee
                    certificate under subsection (c) has failed to
                    carry out an activity described in subparagraph
                    (A)(i) or has engaged in practices described in
                    subparagraph (A)(ii), the Secretary may--
                              ``(i) refuse, either temporarily or
                            permanently, to guarantee any further
                            loans made by such lender or holder;
                              ``(ii) bar such lender or holder from
                            acquiring additional loans guaranteed
                            under this section; and
                              ``(iii) require that such lender or
                            holder assume not less than 10 percent
                            of any loss on further loans made or
                            held by the lender or holder that are
                            guaranteed under this section.
              ``(2) Civil money penalties for intentional
            violations.--
                      ``(A) In general.--The Secretary may impose a
                    civil monetary penalty on a lender or holder of
                    a guarantee certificate under subsection (d) if
                    the Secretary determines that the holder or
                    lender has intentionally failed--
                              ``(i) to maintain adequate accounting
                            records;
                              ``(ii) to adequately service loans
                            guaranteed under this section; or
                              ``(iii) to exercise proper credit or
                            underwriting judgment.
                      ``(B) Penalities.--A civil monetary penalty
                    imposed under this paragraph shall be imposed
                    in the manner and be in an amount provided
                    under section 536 of the National Housing Act
                    (12 U.S.C.A. 1735f-1) with respect to
                    mortgagees and lenders under that Act.
              ``(3) Payment on loans made in good faith.--
            Notwithstanding paragraphs (1) and (2), if a loan was
            made in good faith, the Secretary may not refuse to pay
            a lender or holder of a valid guarantee on that loan,
            without regard to whether the lender or holder is
            barred under this subsection.
        ``(i) Payment Under Guarantee.--
              ``(1) Lender options.--
                      ``(A) In general.--
                              ``(i) Notification.--If a borrower on
                            a loan guaranteed under this section
                            defaults on the loan, the holder of the
                            guarantee certificate shall provide
                            written notice of the default to the
                            Secretary.
                              ``(ii) Payment.--Upon providing the
                            notice required under clause (i), the
                            holder of the guarantee certificate
                            shall be entitled to payment under the
                            guarantee (subject to the provisions of
                            this section) and may proceed to obtain
                            payment in 1 of the following manners:
                                      ``(I) Foreclosure.--
                                              ``(aa) In general.--
                                            The holder of the
                                            certificate may
                                            initiate foreclosure
                                            proceedings (after
                                            providing written
                                            notice of that action
                                            to the Secretary).
                                              ``(bb) Payment.--Upon
                                            a final order by the
                                            court authorizing
                                            foreclosure and
                                            submission to the
                                            Secretary of a claim
                                            for payment under the
                                            guarantee, the
                                            Secretary shall pay to
                                            the holder of the
                                            certificate the pro
                                            rata portion of the
                                            amount guaranteed (as
                                            determined pursuant to
                                            subsection (f) plus
                                            reasonable fees and
                                            expenses as approved by
                                            the Secretary.
                                              ``(cc) Subrogation.--
                                            The rights of the
                                            Secretary shall be
                                            subrogated to the
                                            rights of the holder of
                                            the guarantee. the
                                            holder shall assign the
                                            obligation and security
                                            to the Secretary.
                                      ``(II) No foreclosure.--
                                              ``(aa) In general.--
                                            Without seeking
                                            foreclosure (or in any
                                            case in which a
                                            foreclosureproceeding
    initiated under clause (i) continues for a period in excess of 1 year),
    the holder of the guarantee may submit to the Secretary a request to
    assign the obligation and security interest to the Secretary in return
    for payment of the claim under the guarantee. The Secretary may accept
    assignment of the loan if the Secretary determines that the assignment
    is in the best interest of the United States.
                                              ``(bb) Payment.--Upon
                                            assignment, the
                                            Secretary shall pay to
                                            the holder of the
                                            guarantee the pro rata
                                            portion of the amount
                                            guaranteed (as
                                            determined under
                                            subsection (f)).
                                              ``(cc) Subrogation.--
                                            The right of the
                                            Secretary shall be
                                            subrogated to the
                                            rights of the holder of
                                            the guarantee. The
                                            holder shall assign the
                                            obligation and security
                                            to the Secretary.
                      ``(B) Requirements.--Before any payment under
                    a guarantee is made under subparagraph (A), the
                    holder of the guarantee shall exhaust all
                    reasonable possibilities of collection. Upon
                    payment, in whole or in part, to the holder,
                    the note of judgment evidencing the debt shall
                    be assigned to the United States and the holder
                    shall have no further claim against the
                    borrower or the United States. The Secretary
                    shall then take such action to collect as the
                    Secretary determines to be appropriate.
              ``(2) Limitation on liquidation.--
                      ``(A) In general.--If a borrower defaults on
                    a loan guaranteed under this section that
                    involves a security interest in restricted
                    Hawaiian Home Land property, the mortgagee or
                    the Secretary shall only pursue liquidation
                    after offering to transfer the account to
                    another eligible Hawaiian family or to the
                    Department of Hawaiian Home Lands.
                      ``(B) Limitation.--If, after action is taken
                    under subparagraph (A), the mortgagee or the
                    Secretary subsequently proceeds to liquidate
                    the account, the mortgagee or the Secretary
                    shall not sell, transfer, or otherwise dispose
                    of or alienate the property described in
                    subparagraph (A) except to another eligible
                    Hawaiian family or to the Department of
                    Hawaiian Home Lands.
        ``(j) Hawaiian Housing Loan Guarantee Fund.--
              ``(1) Establishment.--There is established in the
            Treasury of the United States the Hawaiian Housing Loan
            Guarantee Fund for the purpose of providing loan
            guarantees under this section.
              ``(2) Credits.--the Guarantee Fund shall be credited
            with--
                      ``(A) any amount, claims, notes, mortgages,
                    contracts, and any collections and proceeds
                    therefrom:
                      ``(B) any amounts appropriated pursuant to
                    paragraph (7);
                      ``(C) any guarantee fees collected under
                    subsection (d); and
                      ``(D) any interest or earnings on amounts
                    invested under paragraph (4).
              ``(3) Use.--Amounts in the Guarantee Funds shall be a
            available, to the extent provided in appropriations
            Acts, for--
                      ``(A) fulfilling any obligations of the
                    Secretary with respect to loans guaranteed
                    under this section, including the costs (as
                    that term is defined in section 502 of the
                    Federal Credit Reform Act of 1990 (2 U.S.C.
                    661A)) of such loans;
                      ``(B) paying taxes, insurance, prior liens,
                    expenses necessary to make fiscal adjustment in
                    connection with the application and transmittal
                    of collections, and other expenses and advances
                    to protect the Secretary for loans which are
                    guaranteed under this section or held by the
                    Secretary;
                      ``(C) acquiring such security property at
                    foreclosure sales or otherwise;
                      ``(D) paying administrative expenses in
                    connection with those section; and
                      ``(E) reasonable and necessary costs of
                    rehabilitation and repair to properties that
                    the Secretary hold or owns pursuant to this
                    section.
              ``(4) Investment.--Any amounts in the Guarantee Fund
            determined by the Secretary to be in excess of amounts
            currently required at the time of the determination to
            carry our this section may be invested in obligations
            of the United States.
              ``(5) Limitation on commitments to guarantee loans
            and mortgages.--
                      ``(A) Requirement of appropriations.--The
                    authority of the Secretary to enter into
                    commitments to guarantee loans under this
                    section shall be effective for any fiscal year
                    to the extent, or in such amounts as, are or
                    have been provided in appropriations Acts,
                    without regard to the fiscal year for which
                    such amounts were appropriated.
                      ``(B) Limitations on costs of guarantees.--
                    The authority of the Secretary to enter into
                    commitments to guarantee loans under this
                    section shall be effective for any fiscal year
                    only to the extent that amounts in the
                    Guarantee Fund are or have been made available
                    in appropriations Acts to cover the costs (as
                    that term is defined in section 502 of the
                    Federal Credit Reform Act of 1990 (2 U.S.C.
                    661a)) of such loan guarantees for such fiscal
                    year. Any amounts appropriated pursuant to this
                    subparagraph shall remain available until
                    expended.
                      ``(C) Limitation of outstanding aggregate
                    principal amount.--Subject to the limitations
                    in subparagraphs (A) and (B), the Secretary may
                    enter into commitments to guarantee loans under
                    this section for each of fiscal years 1999,
                    2000, 2001, 2002, and 2003 with an aggregate
                    outstanding principal amount not exceeding
                    $100,000,000 for each such fiscal year.
              ``(6) Liabilities.--All liabilities and obligations
            of the assets credited to the Guarantee Fund under
            paragraph (2)(A) shall be liabilities and obligations
            of the Guarantee Fund.
              ``(7) Authorization of appropriations.--There are
            authorized to be appropriated to the Guarantee Fund to
            carry out this section such sums as may be necessary
            for each of fiscal years 1999, 2000, 2001, 2002, and
            2003.
        ``(k) Requirements for Standard Housing.--
              ``(1) In general.--The Secretary shall, by
            regulation, establish housing safety and quality
            standards to be applied for use under this section.
              ``(2) Standards.--The standards referred to in
            paragraph (1) shall--
                      ``(A) provide sufficient flexibility to
                    permit the use of various designs and materials
                    in housing acquired with loans guaranteed under
                    this section; and
                      ``(B) require each dwelling unit in any
                    housing acquired in the manner described in
                    subparagraph (A) to--
                              ``(i) be decent, safe, sanitary, and
                            modest in size and design;
                              ``(ii) conform with applicable
                            general construction standards for the
                            region in which the housing is located;
                              ``(iii) contain a plumbing system
                            that--
                                      ``(I) uses a properly
                                    installed system of piping;
                                      ``(II) includes a kitchen
                                    sink and a partitional bathroom
                                    with lavatory, toilet, and bath
                                    or shower; and
                                      ``(III) uses water supply,
                                    plumbing, and sewage disposal
                                    systems that conform to any
                                    minimum standards established
                                    by the applicable county or
                                    State;
                              ``(iv) contain an electrical system
                            using wiring and equipment properly
                            installed to safely supply electrical
                            energy for adequate lighting and for
                            operation of appliances that conforms
                            to any appropriate county, State, or
                            national code;
                              ``(v) be not less than the size
                            provided under the applicable locally
                            adopted standards for size of dwelling
                            units, except that the Secretary, upon
                            request of the Department of Hawaiian
                            Home Lands may waive the size
                            requirements under this paragraph; and
                              ``(vi) conform with the energy
                            performance requirements for new
                            construction established by the
                            Secretary under section 526(a) of the
                            National Housing Act (12 U.S.C.A.
                            1735f-4), unless the Secretary
                            determines that the requirements are
                            not applicable.
        ``(l) Applicability of Civil Rights Statutes.--To the
    extent that the requirements of title VI of the Civil Rights
    Act of 1964 (42 U.S.C. 2000d et seq.) or of title VIII of the
    Civil Rights Act of 1968 (42 U.S.C. 3601 et seq.) apply to a
    guarantee provided under this subsection, nothing in the
    requirements concerning discrimination on the basis of race
    shall be construed to prevent the provision of the guarantee to
    an eligible entity on the basis that the entity serves Native
    Hawaiian families or is a Native Hawaiian family.''.

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                                   APPENDIX A

                         Hawaiian Homes Commission Act

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                                   APPENDIX B

                             Hawaiian Admission Act

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                                   APPENDIX C

                    Hawaiian State Constitution, as amended

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                                   APPENDIX D

                       Department of Hawaiian Home Lands

                         Beneficiary Needs Study, 1995

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                                   APPENDIX E

                               Executive Summary

                 Housing Problems and Needs of Native Hawaiians

                             Study prepared for the

                U.S. Department of Housing and Urban Development

                                       by

           The Urban Institute, Center for Public Finance and Housing

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