Government Corporations: Profiles of Recent Proposals (Fact Sheet,
03/30/95, GAO/GGD-95-57FS).

Pursuant to a congressional request, GAO provided information on the
proposed Bonneville Power Corporation (BPC), the National Petroleum
Reserves Corporation (NPRC), the U.S. Air Traffic Services Corporation
(USATS), the Federal Housing Administration (FHA), the Presidio Trust,
the National Infrastructure Development Corporation (NIDC), the National
Infrastructure Insurance Corporation (NIIC), and on the newly created
Community Development Financial Institutions Fund (CDFIF), focusing on
the corporations': (1) purposes; (2) status and sponsors; (3) management
structures; (4) revenue sources and budget; (5) staffing; and (6)
statutory and regulatory exemptions.

GAO found that: (1) BPC would assume the Bonneville Power
Administration's operations, NPRC would manage and operate national
petroleum reserves, USATS would operate the air traffic control system,
FHA would provide mortgage insurance, the Presidio Trust would operate
the Presidio, NIDC would promote public-private partnership investments
in economic projects, and NIIC would provide insurance and reinsurance
for certain infrastructure projects; (2) some proposals are still under
development while others have yet to pass Congress; (3) corporation
sponsors include cabinet officials, representatives, and senators; (4)
the corporations' management structures include a single administrator
reporting to the relevant cabinet secretary or a board of directors; (5)
corporate funding would derive from customers or users, U.S. Treasury or
private-sector borrowing authority, and appropriations; (6) in general,
the corporations would not be included in the federal budget; (7)
staffing for some corporations has not been developed, but some current
federal employees would transfer to the new corporations; (8) the
corporations would be exempt from various procurement, personnel, and
other laws and regulations, but they would be subject to certain
modified provisions; (9) Congress has established CDFIF to promote
economic revitalization and community development through community
development financial institutions; and (10) CDFIF has an administrator
and 6 staff, is funded by appropriations, and is exempt from certain
laws and regulations.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-95-57FS
     TITLE:  Government Corporations: Profiles of Recent Proposals
      DATE:  03/30/95
   SUBJECT:  Federal corporations
             Proposed legislation
             Agency missions
             Federal agency reorganization
             Electric power generation
             Oil resources
             Air traffic control systems
             Mortgage programs
             National parks
             Community development
IDENTIFIER:  Bonneville Power Incorporation Act
             Federal Power Administration Privatization Act of 1995
             Federal Employees Retirement System
             FAA Air Traffic Control System
             Air Traffic Control Service Improvement Act of 1994
             Federal Housing Administration Fund
             Golden Gate National Recreation Area (CA)
             National Infrastructure Development Act of 1994
             Naval Petroleum Reserve No. 1 (Elk Hills, CA)
             
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Cover
================================================================ COVER


Fact Sheet for the Ranking Minority Member, Subcommittee on Post
Office and Civil Service, Committee on Governmental Affairs, U.S. 
Senate

March 1995

GOVERNMENT CORPORATIONS - PROFILES
OF RECENT PROPOSALS

GAO/GGD-95-57FS

Government Corporations


Abbreviations
=============================================================== ABBREV

  ATC - air traffic control
  BPA - Bonneville Power Administration
  BPC - Bonneville Power Corporation
  CBO - Congressional Budget Office
  CDFIF - Community Development Financial Institutions Fund
  CEO - Chief Executive Officer
  DOD - Department of Defense
  DOE - Department of Energy
  DOT - Department of Transportation
  FAA - Federal Aviation Administration
  FACA - Federal Advisory Committee Act
  FAR - Federal Acquisition Regulation
  FHA - Federal Housing Administration
  GCCA - Government Corporation Control Act
  GSA - General Services Administration
  GSE - Government-Sponsored Enterprise
  HUD - Department of Housing and Urban Development
  NAPA - National Academy of Public Administration
  NPS - National Park Service
  NIDC - National Infrastructure Development Corporation
  NIIC - National Infrastructure Insurance Corporation
  NPOSR - Naval Petroleum and Oil Shale Reserves
  OMB - Office of Management and Budget
  SEC - Securities and Exchange Commission
  TVA - Tennessee Valley Authority
  USATS - U.S.  Air Traffic Services Corporation

Letter
=============================================================== LETTER


B-258951

March 30, 1995

The Honorable David Pryor
Ranking Minority Member
Subcommittee on Post Office
 and Civil Service
Committee on Governmental Affairs
Unites States Senate

Dear Senator Pryor: 

You requested our assistance in identifying proposals to create
government corporations between November 1993 and December 1994. 
Government corporations are generally federally chartered entities
created to serve a public function of a predominantly business
nature.  As agreed with your office, we provided you with information
on the proposed corporations as we identified them.  This fact sheet
summarizes and expands upon information we provided your office in
briefings over the last year. 

As used in this fact sheet, a proposed government corporation refers
to a government corporation that met at least one of the following
criteria.  It was (1) contained in legislation introduced in
Congress, (2) proposed in executive department reorganization
efforts, and/or (3) recommended in National Academy of Public
Administration (NAPA) research studies commissioned by federal
agencies.  Because of NAPA's government corporation expertise, we
used NAPA recommendations as one of these criteria.  For example,
NAPA issued reports on three of the seven proposed government
corporations discussed in this fact sheet.\1

This fact sheet also provides information on the Community
Development Financial Institutions Fund, a new government corporation
created by the Riegle Community Development and Regulatory
Improvement Act of 1994 (see app.  VIII).\2 The Department of the
Treasury is assisting with the start of this government corporation. 


--------------------
\1 Reinventing the Bonneville Power Administration, NAPA, Dec.  1993;
Restructuring the Naval Petroleum and Oil Shale Reserves, NAPA, Apr. 
1994; and Renewing HUD:  A Long-Term Agenda for Effective
Performance, NAPA, July 1994. 

\2 President Clinton signed P.L.  103-325 on Sept.  23, 1994. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

We identified the following seven proposed government corporations: 
(1) Bonneville Power Corporation, (2) National Petroleum Reserves
Corporation, (3) U.S.  Air Traffic Services Corporation, (4) Federal
Housing Administration, (5) Presidio Trust, (6) National
Infrastructure Development Corporation, and (7) National
Infrastructure Insurance Corporation (see apps.  I through VII for
profiles of these proposed government corporations).  Some of the
proposed government corporations currently exist in noncorporate form
within federal departments:  (1) Bonneville Power Administration and
(2) Naval Petroleum and Oil Shale Reserves (within the Department of
Energy); (3) Federal Housing Administration (within the Department of
Housing and Urban Development);\3 and (4) Federal Aviation
Administration air traffic control functions to be performed by the
U.S.  Air Traffic Services Corporation (Department of
Transportation).  The proposed Presidio Trust, National
Infrastructure Development Corporation, and National Infrastructure
Insurance Corporation do not currently exist.  To date, no
legislation has been enacted to establish any of the seven proposed
corporations.  Any legislation would need to be evaluated to
determine whether offsetting spending or tax increases would be
required to comply with the Budget Enforcement Act. 


--------------------
\3 The Government Corporation Control Act (31 U.S.C.  9101, et seq.)
lists "the Secretary of the Department of Housing and Urban
Development as a wholly owned government corporation when carrying
out duties and powers related to the Federal Housing Administration
(FHA) Fund."


   BACKGROUND
------------------------------------------------------------ Letter :2

Congress has established government corporations to carry out
business-type programs that need a high degree of autonomy and
flexibility.  Existing government corporations cover a range of
functions, including producing power (Tennessee Valley Authority),
providing insurance and financial services (Federal Crop Insurance
Corporation), and promoting commerce (Overseas Private Investment
Corporation). 

The Government Corporation Control Act names the mixed-ownership and
wholly owned government corporations within its coverage but does not
otherwise define either type of entity.\4 This act resulted from a 2-
year Senate study that concluded that there was no effective, overall
control over government corporations.\5 The act was intended to make
the corporations accountable to Congress for their operations while
allowing them the flexibility and autonomy needed for their
commercial activities.  Government corporations may be exempted from
federal statutes and regulations governing civil service pay scales
and hiring rules, position ceilings, and procurement practices. 


--------------------
\4 31 U.S.C.  9101, et seq. 

\5 U.S.  Congress.  Joint Committee on Reduction of Non-Essential
Federal Expenditures.  Report on Government Corporations.  Senate
Doc.  227.  78th Congress, 2d session (Washington, D.C.:  U.S. 
Government Printing Office, 1944). 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

To identify proposed government corporations, we obtained information
from draft and enacted legislation, congressional hearings and staff,
agency corporation proposals, and NAPA studies.  We gathered
additional background information on proposed corporations by
reviewing documents identified through on-line commercial databases
and our prior reports on government corporations.  We also reviewed
literature on government enterprises, analyzed studies on government
corporations, and interviewed government enterprise experts.  Because
legislation has not been enacted to establish the proposed
corporations we discuss, the information in this fact sheet is
subject to change as the proposals develop.  In addition, as agreed
with your office, we did not attempt to (1) verify the benefits the
proposals claimed would be derived from incorporation and (2) assess
the need for the various statutory and regulatory exemptions as
stated in each proposal.  We updated information on these seven
proposals through January 30, 1995. 

To the extent data existed, this fact sheet provides information on
the following eight topics we agreed upon: 

  proposed corporation name;

  purpose of corporation;

  status of proposal;

  sponsor(s) (the Member of Congress and/or executive agency that
     made the current proposal);

  management structure (a description of the proposed corporation's
     system of governance, board of directors, and advisory board);

  funding/budget (information on whether the proposed corporation
     would be included in the federal budget and the sources of
     revenue that the corporation would use to run its operations);

  staffing (the number and type of employees who would work in the
     proposed corporation); and

  statutory and regulatory exemptions (exemptions sought by the
     proposed corporation from federal laws and regulations). 

If a corporation proposal did not provide information on one of these
topics, we reported such instances in our fact sheet as "information
not noted in proposal/to be determined."

We did our work between December 1994 and January 1995 in Washington,
D.C., in accordance with generally accepted government auditing
standards.  From December 1994 through January 1995, we provided
sponsors of the proposed corporations and officials in the agencies
that are proposed to become corporations with information on their
respective proposal for verification, review, and comment.  They
agreed with our portrayal of their proposals.  Technical and
background information that these officials provided was included
where appropriate. 


---------------------------------------------------------- Letter :3.1

As arranged with your office, unless you publicly release its
contents earlier, we plan no further distribution of this fact sheet
until 30 days after the date of this letter.  At that time, we will
send copies of this report to other interested parties.  Copies will
be made available to others upon request. 

If you have any questions regarding this report or would like to
discuss it further, please call either Charles I.  Patton, Associate
Director, or me on (202) 512-8676. 

Sincerely yours,

William M.  Hunt
Director, Federal Management
 Issues


PROPOSED GOVERNMENT CORPORATION: 
BONNEVILLE POWER CORPORATION
=========================================================== Appendix I


   PURPOSE
--------------------------------------------------------- Appendix I:1

As proposed, the Bonneville Power Corporation would carry out the
power marketing, power transmission, conservation, environmental, and
other responsibilities currently performed by the Bonneville Power
Administration (BPA). 


   STATUS
--------------------------------------------------------- Appendix I:2

BPA currently is seeking comments and recommendations from Pacific
Northwest regional interests on a draft bill it wrote to establish
the BPA as a wholly owned government corporation.  According to a BPA
official, this draft bill, titled the Bonneville Power Incorporation
Act, has not been approved by the Department of Energy (DOE) or
submitted to the Office of Management and Budget (OMB) for final
clearance. 

The House Committee on Natural Resources created a task force on BPA
in the 103d Congress that was chaired by Representative Peter
DeFazio.  In June 1993, Senator Mark Hatfield and Representative
DeFazio wrote to BPA's Administrator and recommended that BPA
contract with the National Academy of Public Administration (NAPA) to
assess alternative structures for BPA. 

A December 1993 NAPA report\1 recommended that BPA be constituted as
a body corporate--the Bonneville Power Corporation--and be given
powers comparable to those of the U.S.  Enrichment Corporation and
the Tennessee Valley Authority.\2 NAPA also recommended that the
corporation be subject to the policy discretion of the Secretary of
Energy concerning matters of national energy policy.  Under this
arrangement, the Secretary of Energy would be solely responsible for
major energy policy issues but not the proposed corporation's
management. 

Of note, Representative Scott Klug introduced H.R.  310, The Federal
Power Administration Privatization Act of 1995, on January 4, 1995,
which would authorize the Secretary of Energy to sell the physical
assets and terminate the operations of the Federal Power Marketing
Administrations (BPA is a federal power marketing administration). 
H.R.  310 was referred to the House Committee on Resources on January
4, 1994, and subsequently referred to the Subcommittee on Water and
Power Resources and the Departments of Interior and Energy for
comment on January 13, 1995. 


--------------------
\1 Reinventing the Bonneville Power Administration, NAPA, Dec.  1993. 

\2 The U.S.  Enrichment Corporation and the Tennessee Valley
Authority (wholly owned government corporations) sell goods and
services to the public. 


   SPONSOR
--------------------------------------------------------- Appendix I:3

Proposed legislation to make BPA a government corporation has not
been introduced in Congress. 


   MANAGEMENT STRUCTURE
--------------------------------------------------------- Appendix I:4

In the draft BPA bill, the corporation would be managed by a Chief
Executive Officer (CEO) appointed by and serving under the Secretary
of Energy.  The CEO would establish a system to define the duties,
compensation, and bonuses of all employees of the corporation and to
appoint, assign, and terminate those employees.  In its report, NAPA
recommended that the corporation be managed by a single administrator
appointed by the President, by and with the advice and consent of the
Senate, for a 6-year term of office. 


   FUNDING/BUDGET
--------------------------------------------------------- Appendix I:5

The proposed corporation's funding would come from its utility and
direct service industry customers, as currently is the case with BPA. 
The corporation would still be able to borrow funds from the U.S. 
Treasury. 

The corporation's fund account would not be considered appropriated
funds under the proposed legislation.\3 The receipts and
disbursements of the corporation, including administrative expenses,
and the bonds the corporation issues would be on-budget but would be
exempt from any general budget limitation imposed by statute on
expenditures and net lending (budget outlays) of the United States,
or other discretionary spending limit. 

The proposed corporation would be exempt from any sequestration order
issued under the Balanced Budget and Emergency Deficit Control Act of
1985, as amended.\4 Also, the corporation's budget, and authority to
create financial obligations, borrow, and make expenditures would not
be subject to apportionment.\5


--------------------
\3 The fund account would be the proposed corporation's account
containing (1) the unexpended balance of appropriations and other
monies in the BPA fund established by section 11 of the Federal
Columbia River Transportation Act and (2) other monies, or
entitlement to monies, that are related to functions and activities
transferred to the Corporation under the proposed legislation. 

\4 BPA currently is exempt from sequestration under this act. 
Sequestration is the cancellation of budgetary resources provided by
discretionary appropriations or direct spending law.  Under the draft
bill, the corporation's exemption from sequestration would be
extended to cover administrative expenses.  See 2 U.S.C.  901 et seq. 

\5 Chapter 15, subchapter II, of Title 31 U.S.C.  Apportionment is
the action by which OMB distributes amounts available for obligation,
including budgetary reserves established pursuant to law, in an
appropriation or fund account. 


   STAFFING
--------------------------------------------------------- Appendix I:6

The approximately 3700 BPA employees would become corporation
employees on the date that the Bonneville Power Incorporation Act is
passed.  As corporation employees, they would remain federal
employees without a break in their federal service. 

The corporation's CEO would have a rate of basic pay equal to that of
executives defined under section 5316 of Title 5, U.S.C.  The CEO's
total compensation and bonuses for a calendar year (less benefits,
retirement pay, or voluntary separation incentive payments) would not
exceed that of Level I\6 for executives under section 5312 of Title
5, U.S.C.  The Secretary of Energy would appoint an Executive
Compensation Committee, which would consist of individuals with
experience in setting executive compensation and have no interest in
corporation activities, to recommend the CEO's annual bonuses. 

Senior corporation executives and other corporation employees would
not receive total compensation for a calendar year (less benefits,
retirement pay, or voluntary separation incentive payments) that
exceeds the annual rate of basic pay for Level I and Level III\7 of
the Executive Schedule, respectively (as defined in sections 5312 and
5314 of Title 5, U.S.C.). 

Under the proposed legislation, any salary amounts not paid to the
corporation's CEO, executives, or other employees in a calendar year
because of compensation limitations would be paid to those employees
in a lump sum in the following calendar year.  Lump sum payments
would not exceed the difference between Levels I and V of the
Executive Schedule. 


--------------------
\6 Level I of the Executive Schedule generally applies to positions
at the cabinet secretary level (e.g., the Secretaries of State, the
Treasury, and Defense). 

\7 Level III of the Executive Schedule generally applies to positions
at the under secretary level in departments (e.g., the Under
Secretary of Commerce for Export Administration) and the chairpersons
of federal boards (e.g., the Chairman of the Merit Systems Protection
Board). 


   STATUTORY AND REGULATORY
   EXEMPTIONS
--------------------------------------------------------- Appendix I:7

Under BPA's draft bill, the Bonneville Power Corporation would be
exempt from the following laws: 


      FEDERAL PROPERTY AND
      ADMINISTRATIVE SERVICES ACT
      OF 1949 (40 U.S.C.  471 ET
      SEQ.)
------------------------------------------------------- Appendix I:7.1

The purpose of the Federal Property and Administrative Services Act
of 1949 is to provide for the federal government an economic and
efficient system for the procurement and supply of personal property
and nonpersonal services, the use of available property, the disposal
of surplus property, and records management.  Of note, Section 484 of
Title 40, U.S.C., which gives the General Services Administration
(GSA) the authority to authorize an executive agency to dispose of
surplus property, would apply to the corporation.  Under this
section, the corporation would require Presidential approval before
disposing of major assets as surplus property. 


      PUBLIC BUILDINGS ACT OF 1959
      (40 U.S.C.  601-619)
------------------------------------------------------- Appendix I:7.2

The purpose of the Public Buildings Act of 1959 is to modernize and
encompass in one act the provisions of previously existing law
vesting in the Administrator of GSA authority and responsibility for
acquiring, constructing, altering, repairing, remodeling, improving,
or extending public buildings and acquiring the necessary sites or
additions to sites in connection with these responsibilities. 


      BALANCED BUDGET AND
      EMERGENCY DEFICIT CONTROL
      ACT OF 1985 (2 U.S.C.  901
      ET SEQ.)
------------------------------------------------------- Appendix I:7.3

The Balanced Budget and Emergency Deficit Control Act of 1985 was
amended by the Budget Enforcement Act of 1990 to create new
enforcement mechanisms for discretionary spending, entitlements, and
receipts.  The 1990 act established discretionary spending limits for
spending provided in appropriation acts as well as adding a
pay-as-you-go mechanism to ensure that any legislation increasing
entitlements or decreasing receipts would be deficit neutral. 


      BROOKS ACT (40 U.S.C.  759)
------------------------------------------------------- Appendix I:7.4

The purpose of the Brooks Act is to provide for the economic and
efficient purchase, lease, maintenance, operation, and use of
automatic data processing equipment by federal departments and
agencies under the direction and coordination of the Administrator of
GSA. 


      CONTRACT DISPUTES ACT OF
      1978 (41 U.S.C.  601-613)
------------------------------------------------------- Appendix I:7.5

The purpose of the Contract Disputes Act of 1978 is to establish a
comprehensive statutory system providing legal and administrative
remedies for resolving federal government contract claims. 


      COMPETITION IN CONTRACTING
      ACT OF 1984 (PUBLIC LAW 98-
      369, TITLE VII)
------------------------------------------------------- Appendix I:7.6

The purpose of the Competition in Contracting Act is to increase the
use of competition in federal government contracting and to impose
more stringent restrictions on the awarding of noncompetitive
contracts.  The act generally requires agencies to use competitive
procedures; designates "full and open" as the standard for
competition in contracting; strengthens the justification, approval,
and notice requirements to safeguard against unnecessary sole-source
contracts; establishes competition advocates to enhance
accountability; and strengthens the bid protest process. 


      OFFICE OF FEDERAL
      PROCUREMENT POLICY ACT (41
      U.S.C.  401- 424)
------------------------------------------------------- Appendix I:7.7

The purpose of the Office of Federal Procurement Policy Act is to
establish an Office of Federal Procurement Policy in OMB to provide
overall direction of procurement policies, regulations, procedures,
and forms for executive agencies in accordance with applicable laws. 


      STEWART B.  MCKINNEY
      HOMELESS ASSISTANCE ACT (42
      U.S.C.  11411-11412)
------------------------------------------------------- Appendix I:7.8

The purpose of the McKinney Act is to use public resources and
programs in a more coordinated manner to meet the needs of the
homeless.  Specifically, sections 11411 and 11412 provide mechanisms
for the Secretary of Housing and Urban Development to identify
surplus or excess federal real property that is unused or underused,
as well as surplus personal property, which could be made available
to assist the homeless. 


      PAPERWORK REDUCTION ACT OF
      1980 (44 U.S.C.  3501-3520)
------------------------------------------------------- Appendix I:7.9

The purposes of the Paperwork Reduction Act of 1980 include
minimizing the federal paperwork burden and the cost to the federal
government of collecting, maintaining, using, and disseminating
information; maximizing the usefulness of information collected by
the federal government; and coordinating, integrating, and making
uniform federal information policies and practices. 


      FEDERAL CREDIT REFORM ACT OF
      1990 (2 U.S.C.  661-661F)
------------------------------------------------------ Appendix I:7.10

The purposes of the Federal Credit Reform Act are to measure more
accurately the costs of federal credit programs, place the cost of
credit programs on a budgetary basis equivalent to other federal
spending, encourage the delivery of benefits in the form most
appropriate to the needs of beneficiaries, and improve the allocation
of resources among credit programs and between credit and other
spending programs. 


      44 U.S.C.  501-517 AND
      1101-1123
------------------------------------------------------ Appendix I:7.11

These statutory sections provide, with certain limited exceptions,
that printing and binding for Congress, the Executive Office, the
Judiciary (other than the U.S.  Supreme Court), and every executive
department, independent office, and establishment of the federal
government be done or procured by the Government Printing Office. 


      31 U.S.C.  3526-3528
------------------------------------------------------ Appendix I:7.12

These statutory provisions authorize the Comptroller General to
settle accounts of the federal government and to determine whether
accountable officers and certifying officers can be relieved of
liability for losses or erroneous payments. 


      APPORTIONMENT PROVISIONS IN
      31 U.S.C.  1511-1519
------------------------------------------------------ Appendix I:7.13

These sections prescribe procedures dealing with appropriated funds. 
Generally, these sections require appropriated funds to be
apportioned\8 in accordance with specific guidelines. 


--------------------
\8 Apportionment is the action by which OMB distributes amounts
available for obligation, including budgetary reserves established
pursuant to law, in an appropriation or fund account. 


      5 U.S.C. 
------------------------------------------------------ Appendix I:7.14

The personnel provisions of Title 5 of the U.S.  Code generally would
not apply to the Bonneville Power Corporation, but many important
provisions would continue to be applicable.  Some of the provisions
which would be made applicable would be modified to a certain
extent.\9 Title 5 provides general personnel policies for the federal
government, including the organization and procedural framework under
which federal agencies operate as well as statutory policies
pertaining to federal employment. 


--------------------
\9 The draft BPA bill states that the following Title 5 provisions
would apply to the Corporation and its employees, including:  chapter
5 (administrative procedures); chapter 7 (judicial review); section
2301(b) (merit system and whistleblower protection); sections 5517
and 5520 (withholding city and state income or employment taxes);
chapter 71 (labor relations), sections 7201-7203 and 7211
(antidiscrimination and right to petition Congress); chapter 73
(suitability, security, and conduct); chapter 81 (compensation for
work injury); chapter 83 (civil service retirement); chapter 84
(Federal Employees' Retirement System); chapter 85 (unemployment
compensation); chapter 87 (life insurance); chapter 89 (health
insurance); chapter 91 (access to criminal history record
information); Section 704, Civil Service Reform Act of 1978, note to
Section 5343 of Title 5, U.S.C.  (relating to certain prevailing
rates for employees); Appendix 2 (Federal Advisory Committee Act);
Appendix 3 (Inspector General Act of 1978), provided that the
Corporation is considered a "federal entity" under section 8G(a)(1)
and is not subject to review by DOE's Inspector General; Appendix 5
(Office of Government Ethics); Appendix 6 (financial disclosure); and
Appendix 7 (outside income limitations). 


------------------------------------------------------ Appendix I:7.15

Moreover, the draft BPA bill also states that the following laws
would not apply to the corporation or its employees.  However, the
corporation would adopt policies consistent with its corporate
functions and the principles of these laws. 


      SERVICE CONTRACT ACT OF 1965
      (41 U.S.C.  351-358)
------------------------------------------------------ Appendix I:7.16

The purpose of the Service Contract Act of 1965 is to provide labor
standards for the protection of employees of contractors and
subcontractors furnishing services to or performing maintenance
services for federal agencies.  The act included a requirement that
certain minimum and prevailing wages and fringe benefits be paid to
these employees. 


      DAVIS-BACON ACT (40 U.S.C. 
      276A ET SEQ.)
------------------------------------------------------ Appendix I:7.17

The purpose of the Davis-Bacon Act is to require that wages paid to
employees of contractors and subcontractors involved in the
construction, alteration, and/or repair of public buildings be the
prevailing wage paid to employees in the area in which the work is to
be performed. 


      WALSH-HEALEY PUBLIC
      CONTRACTS ACT (41 U.S.C. 
      35-45)
------------------------------------------------------ Appendix I:7.18

The Walsh-Healey Public Contracts Act requires the federal government
to procure and use only goods produced under safe and fair working
conditions and contains wage and hour provisions and other standards
that contractors who enter into contracts with the federal government
have to meet.  The broader purpose of the act was to ensure that the
government would not enter into contracts with contractors who paid
substandard wages and offended fair social standards of employment. 


      PROMPT PAYMENT ACT (31
      U.S.C.  3901-3907)
------------------------------------------------------ Appendix I:7.19

The purpose of the Prompt Payment Act is to provide incentives for
the federal government to pay its bills on time.  Specifically, the
law provides for interest penalties and limitations on discount
payments for agencies that are delinquent in making payments.  The
law also requires agencies to submit annual reports to OMB on the
amount of interest penalty payments they have incurred. 


      40 U.S.C.  490B
------------------------------------------------------ Appendix I:7.20

The purpose of this section is to provide policy guidelines for the
provision of child care services for federal employees in federal
buildings. 


      VETERANS' PREFERENCE ACT (5
      U.S.C.  1302(B))
------------------------------------------------------ Appendix I:7.21

The Veterans' Preference Act requires agencies to give veterans
preference "in certification for appointment, and in appointment,
reinstatement, reemployment, and retention."


      OBSERVANCE OF FEDERAL
      HOLIDAYS
------------------------------------------------------ Appendix I:7.22

The proposed corporation would observe any legal public holiday and
any other day declared to be a holiday by federal statute or
executive order. 


   RELATED MATERIALS
--------------------------------------------------------- Appendix I:8

BPA-prepared draft bill to establish the Bonneville Power
Corporation, a wholly owned government corporation, Oct.  11, 1994. 

Bonneville Power Administration:  Borrowing Practices and Financial
Condition (GAO/AIMD-94-67BR, Apr.  19, 1994). 

Reinventing the Bonneville Power Administration, NAPA report for the
BPA, Dec.  1993. 

GAO Products on Bonneville Power Administration (GAO/RCED-93-133R,
Mar.  31, 1993). 


PROPOSED GOVERNMENT CORPORATION: 
NATIONAL PETROLEUM RESERVES
CORPORATION
========================================================== Appendix II


   PURPOSE
-------------------------------------------------------- Appendix II:1

DOE operates the Naval Petroleum and Oil Shale Reserves (NPOSR). 
NPOSR was established in the early 1900s as a strategic reserve of
fuel supplies for the military.  The reserves were largely inactive
until Congress passed the Naval Petroleum Reserves Production Act of
1976 (P.L.  94-258) in response to the 1973-1974 Arab oil embargo. 
This statute changed NPOSR from a strategic reserve for the military
to a source of oil for the U.S.  economy.  As a DOE component, NPOSR
is served by and subject to the oversight of other headquarters
offices concerned with budgets, personnel, and legal matters. 

NPOSR's mission is to manage, operate, maintain, and produce the
reserves, located in California, Utah, Colorado, and Wyoming, to
achieve the greatest value and benefits to the government with
consideration for the interests of its joint owners. 


   STATUS
-------------------------------------------------------- Appendix II:2

Restructuring or disposition of NPOSR has been studied extensively
for a number of years.  Divestiture or lease proposals have been made
by the executive branch every year except one since 1985, but
Congress has not acted on these proposals. 

In July 1993, the Senate Armed Services Committee, in its report on
the National Defense Authorization Act for fiscal year 1994, directed
the Secretary of Energy to study management alternatives for the
NPOSR, including the concept of incorporation.  According to this
report, NPOSR is predominantly commercial in nature, potentially
self-sustaining, and particularly suitable for operation by a
government corporation.  NPOSR contracted with NAPA to conduct this
study.\1 The Committee requested that DOE submit a report, with any
legislative recommendations, to the Senate and House Armed Services
Committees by May 1, 1994.  NAPA's April 1994 report recommended that
NPOSR be organized as a wholly owned government corporation.  On
August 2, 1994, DOE's Secretary sent NAPA's study results to Congress
and wrote that DOE's assessment of the NAPA report, including a
financial analysis, would be provided to Congress by September 30,
1994.  However, to date, DOE has not forwarded any analysis to the
Committee. 

In December 1994, the President announced plans to privatize the
Naval Petroleum Reserves in Elk Hills, CA, commonly known as NPR-1.\2
NPR-1 is one of the 10 largest domestic producing oil fields in the
lower 48 states and is also one of the nation's top producing gas
fields.  NPR-1 produces the most revenue of NPOSR's six fields.  The
U.S.  government owns about 78 percent of NPR-1; Chevron U.S.A.,
Inc., owns about 22 percent.  NPR-1 is operated by Bechtel Petroleum
Operations, Inc., under a contract due to expire in July 1995. 


--------------------
\1 NAPA studied three organizational alternatives for NPOSR,
including establishing (1) a separate entity within DOE, comparable
to power marketing administrations such as the Southeastern Power
Administration and the Alaskan Power Administration; (2) an agency
within DOE comparable to the Bonneville Power Administration (see
app.  I) with some, but not all, of the attributes of a government
corporation--including a revolving fund and borrowing authority; and
(3) a wholly owned government corporation subject to the provisions
of the Government Corporation Control Act. 

\2 The administration has announced plans to sell NPR-1 by the end of
fiscal year 1997.  DOE's Deputy Secretary recommended that private
enterprises run NPR-1 because they can do so more efficiently and can
tap into private sources of capital for enhanced development. 


   SPONSOR
-------------------------------------------------------- Appendix II:3

According to an NPOSR official, DOE is drafting legislation to
incorporate NPOSR, but there is no congressional sponsor for NPOSR
incorporation.  DOE management supports incorporation as a way to
sell the reserves as a commercial-type enterprise. 


   MANAGEMENT STRUCTURE
-------------------------------------------------------- Appendix II:4

NAPA recommended that the proposed NPOSR corporation be managed by a
single administrator reporting to the Secretary of Energy.  The
administrator would be appointed by the President, with Senate
confirmation, to a 6-year term. 


   FUNDING/BUDGET
-------------------------------------------------------- Appendix II:5

NAPA recommended that the proposed NPOSR corporation be allowed to
(1) borrow funds up to a limit set by Congress and (2) retain and use
its revenues for the business purpose of the corporation.  Also, NAPA
stated that NPOSR should have the flexibility to determine and incur
obligations and expenditures, subject only to laws specifically
applicable to government corporations.  According to an NPOSR
official, the proposed corporation would pay annual dividends to the
Treasury, rather than pay federal taxes.  According to a draft DOE
document, the corporation would, in lieu of taxes, pay 2.5 percent of
its gross revenues to state and local jurisdictions, patterned after
the policy of the Tennessee Valley Authority. 

NAPA reported that NPOSR is more than self-sustaining.  In fiscal
year 1993, NPOSR expenses totaled $188 million while revenues from
sales totaled $402 million.  However, NAPA added that NPOSR cannot
use proceeds from sales to finance capital projects or operations,
and each year NPOSR is required to deposit its revenues in the U.S. 
Treasury's Miscellaneous Receipts account.  As a result, NPOSR must
seek annual appropriations. 

According to an NPOSR official, from 1976 through 1993, NPOSR had
gross revenues of $15.7 billion and costs of $2.9 billion, resulting
in net revenues of $12.8 billion for that period. 

As of September 30, 1993, NPOSR had no outstanding debt, but it did
recognize unfunded liabilities on its balance sheet amounting to
$13.4 million.  The liabilities represent obligations to make future
payments for nonfederal pensions and environmental restoration costs. 
However, NPOSR's fund balance was more than enough to cover the
unfunded liabilities. 


   STAFFING
-------------------------------------------------------- Appendix II:6

According to an NPOSR official, NPOSR currently has about 79 federal
employees.  The official stated that DOE's intention is that all
current NPOSR employees would transfer to the proposed corporation
and would remain federal employees. 


   STATUTORY AND REGULATORY
   EXEMPTIONS
-------------------------------------------------------- Appendix II:7

In its study, NAPA recommended the following exemptions for the
NPOSR: 


      FEDERAL PROPERTY AND
      ADMINISTRATIVE SERVICES ACT
      OF 1949 (40 U.S.C.  471 ET
      SEQ.)
------------------------------------------------------ Appendix II:7.1

The purpose of the Federal Property and Administrative Services Act
of 1949 is to provide for the federal government an economic and
efficient system for the procurement and supply of personal property
and nonpersonal services, the use of available property, the disposal
of surplus property, and records management. 


      EXECUTIVE BRANCH LIMITATIONS
      ON THE NUMBER OF EMPLOYEES
------------------------------------------------------ Appendix II:7.2

According to an NPOSR official, limits on the number of NPOSR
employees are not specified in any DOE draft legislation. 

Title 5 does not specify a general limitation on the number of
executive branch employees.  However, the Federal Workforce
Restructuring Act of 1994, P.L.  No.  103-226, established a
declining ceiling for fiscal years 1994 through 1999 on the total
number of full-time equivalent positions in all agencies.  This act
aims to reduce the number of federal employees.  Generally, the
number of full-time equivalent positions in each agency is controlled
by OMB when the agency submits its budget. 


      U.S.  DEPARTMENT OF ENERGY
      ORDERS, DIRECTIVES, RULES,
      AND REGULATIONS
------------------------------------------------------ Appendix II:7.3

DOE orders, directives, rules, and regulations would not apply to the
corporation unless specified by the Secretary. 

Under 5 U.S.C.  301, the head of an executive branch department or
military department may prescribe regulations for the government of
his/her department; the conduct of its employees; the distribution
and performance of its business; and the custody, use, and
preservation of its records, papers, and property. 


   RELATED MATERIALS
-------------------------------------------------------- Appendix II:8

Naval Petroleum Reserve:  Opportunities Exist to Enhance its
Profitability (GAO/RCED-95-65, Jan.  12, 1995). 

Statement of OMB's Director regarding changes in five agencies, Dec. 
19, 1994. 

Organizational Alternatives for the Naval Petroleum and Oil Shale
Reserves, draft DOE study, June 1994. 

Naval Petroleum Reserve:  Limited Opportunities Exist to Increase
Revenues From Oil Sales in California (GAO/RCED-94-126, May 24,
1994). 

Restructuring the Naval Petroleum and Oil Shale Reserves, NAPA report
for the Department of Energy, Apr.  1994. 

National Defense Authorization Acts for Fiscal Years 1994 and 1995,
Committee on Armed Services, U.S.  Senate. 

Oil Reserve:  Impact of NPR-1 Operations on Wildlife and Water Is
Uncertain (GAO/RCED-91-129, Aug.  1, 1991). 


PROPOSED GOVERNMENT CORPORATION: 
U.S.  AIR TRAFFIC SERVICES
CORPORATION
========================================================= Appendix III


   PURPOSE
------------------------------------------------------- Appendix III:1

Under an administration proposal, the U.S.  Air Traffic Services
Corporation, a wholly owned government corporation, would have the
responsibility for operating, managing, and modernizing the air
traffic control (ATC) system.\1 The corporation would perform
ATC-related functions and activities of the existing Federal Aviation
Administration (FAA).  FAA would continue to provide safety
oversight.  Splitting FAA's functions represents a change from the
present situation, established by the Federal Aviation Act of 1958,\2
in which the FAA both operates the ATC system and provides oversight
of the system's safety performance.  In times of war or crisis,
however, the corporation would come under the control of the
Secretary of Defense. 

The administration's proposal states that in providing safety
oversight, FAA would use its existing regulatory functions (such as
inspection and surveillance of airlines and the certification of new
aircraft).\3 FAA's enforcement powers over the proposed corporation
would include the power to impose sanctions or override corporation
decisions that could lessen safety.  Specifically, FAA could issue
cease and desist orders for corporation activities. 

A bill introduced in the 103d Congress, entitled the Air Traffic
Control Service Improvement Act of 1994,\4 proposed that a wholly
owned government corporation be established to operate the nation's
air traffic control system.  Under this bill, the corporation would
(1) plan, initiate, construct, own, manage, and operate by itself, or
in cooperation with other entities, an air traffic control system;
(2) offer air traffic control services for hire to air transportation
common carriers and other operators of civil aircraft; (3) establish
reasonable nondiscriminatory fees for the provision of air traffic
control services; (4) contract with other entities to operate
individual air traffic control facilities on behalf of the
corporation; (5) acquire (by construction, purchase, or gift)
physical facilities, equipment, and devices necessary to the
operations of the corporation, including air traffic control and
associated equipment and facilities; and (6) perform or contract for
the performance of research and development related to the
corporation's operations and establish technical specifications of
all elements of the air traffic control system. 


--------------------
\1 Air Traffic Control Corporation Study, Report of the Executive
Oversight Committee to the Secretary of Transportation, May 1994. 

\2 49 U.S.C., App.  1301 et seq. 

\3 FAA functions not incorporated would retain current relationships
with the Department of Transportation, the Department of Defense, the
National Transportation Safety Board, and Congress, and be subject to
the same budget and oversight controls as they are today. 

\4 H.R.  5209, Oct.  6, 1994, 103d Congress, 2d session. 


   STATUS
------------------------------------------------------- Appendix III:2

On May 3, 1994, the Department of Transportation's (DOT) Executive
Oversight Committee\5 study recommended that the Secretary of
Transportation create the U.S.  Air Traffic Services Corporation, a
wholly owned government corporation within DOT, to operate the
nation's air traffic control system.  The Secretary of Transportation
commissioned the Executive Oversight Committee study in response to
National Performance Review and National Commission to Ensure a
Strong Competitive Airline Industry recommendations to restructure
FAA's air traffic control services. 

The Senate Subcommittee on Transportation and Related Agencies,
Committee on Appropriations, held a hearing on the proposed
corporation on May 12, 1994.  The Secretary of Transportation,
representatives from prior administrations, and aviation industry
representatives testified at this hearing.  We also testified on the
administration's proposal at this hearing.\6

Representative Joe Barton introduced the Air Traffic Control Service
Improvement Act of 1994, on October 6, 1994, which would have
established a wholly owned government corporation to operate the air
traffic control system of the United States.  This bill was referred
to the Committee on Public Works and Transportation, but Congress did
not take any further action on this bill. 

Of note, after we completed our audit work, the House Subcommittee on
Aviation, Committee on Transportation and Infrastructure, held a
hearing on USATS on February 23, 1995, at which we also testified.\7


--------------------
\5 The Executive Oversight Committee comprised executives from FAA,
the Office of the Secretary of Transportation, the Executive Office
of the President, three other government agencies, and two existing
government corporations.  The Committee was supported by a task force
that comprised career executives from FAA, DOT, other government
entities, and FAA labor unions. 

\6 Our testimony at the hearing focused on three main issues:  (1)
the link between problems with ATC system modernization and FAA's
compliance with federal procurement regulations, (2) actions that FAA
is taking to better position itself to meet the ATC system's future
needs, and (3) financing and safety concerns raised by the proposal
that require further analysis.  We noted that our work over the past
decade does not support the conclusion that exemption from federal
procurement regulations would result in ATC equipment being installed
more quickly in the field.  With regard to safety oversight, we noted
that FAA has encountered major difficulties in its oversight of the
airline industry.  For example, FAA has had problems targeting its
inspector resources, carrying out enforcement actions in a timely
manner, and developing an early-warning system of safety performance
indicators.  We noted that FAA would need to expeditiously develop
tools and techniques to perform effective oversight of the proposed
corporation (see Air Traffic Control:  Observations on Proposed
Corporation GAO/T-RCED-94-210, May 12, 1994). 

\7 Our testimony noted that USATS can be financially viable if
certain budgetary, costs, and revenue assumptions are realized. 
These include exemption from the spending caps contained in the
Budget Enforcement Act and exclusion from certain pension and health
care costs.  We expressed concern about how the proposed safety
decisionmaking responsibilities will work in practice and how
regulatory disputes will be resolved between the two entities in a
timely manner.  As for governance, we noted that under a corporation,
an important issue facing the Congress will be whether and to what
extent USATS should accommodate smaller stakeholders' needs for
services and equipment, especially when these stakeholders contribute
less financially to the system than they receive in related services
(see Air Traffic Control:  Issues Presented by Proposal to Create a
Government Corporation GAO/T-RCED-95-114, Feb.  23, 1995). 


   SPONSORS
------------------------------------------------------- Appendix III:3

Secretary of Transportation, Federico Peï¿½a. 

Representative Joe Barton. 


   MANAGEMENT STRUCTURE
------------------------------------------------------- Appendix III:4

Under the administration's proposal, USATS would be governed by an
11-member board of directors.  The board of directors would consist
of a CEO, the Secretary of Transportation (or designee), the
Secretary of Defense (or designee), and eight members appointed by
the President and confirmed by the Senate.  The President would
appoint an interim CEO for USATS, to handle the preliminary
development of the corporation before the appointment of the board of
directors.\8 The board of directors' functions would include
strategic planning, approving major financial decisions, the annual
budget, and setting the level of user charges.  The CEO of the
corporation would be elected by the board and would serve at its
discretion.  The board would fix the term of employment and
compensation of the CEO. 

All other board members would serve 5-year staggered terms to assure
continuity and leadership for the corporation.  The eight board
members appointed by the President would be as follows: 

  four who represent commercial aviation interests,\9

  one who represents the views of airports,

  one who represents the views of USATS employees who belong to a
     union,

  one who represents the views of general business interests, and

  one who represents the views of noncommercial aviation
     interests.\10

The board of directors would also have a permanent three-member
safety committee. 


--------------------
\8 Under H.R.  5209, the interim CEO would also appoint a six-member
transition team that would be responsible for making USATS
operational and would serve until the corporation is operational. 

\9 In contrast, H.R.  5209 proposed three members representing
commercial aviation interests. 

\10 In contrast, H.R.  5209 proposed two members representing
noncommercial aviation interests. 


   FUNDING/BUDGET
------------------------------------------------------- Appendix III:5

Under the administration's proposal, USATS would be funded through
revenues earned by charging fees to users of the air traffic control
system.  General aviation aircraft and public users of the ATC system
would be permanently exempted from fees.  The corporation would not
rely on appropriations for any of its operating or investment
costs.\11 The kind and level of user charges would be developed by
the board of directors in consultation with system users and would be
subject to the disapproval of the Secretary of Transportation.  USATS
would submit an annual business-type budget to Congress, not subject
to line item reviews, as specified by the Government Corporation
Control Act. 

USATS would have the flexibility to obtain debt financing from the
Treasury or private capital markets for construction of facilities
and acquisition of equipment.  The Secretary of Transportation, in
consultation with the Secretary of the Treasury, would have the
authority to disapprove corporation borrowing on private markets if
USATS tried to (1) borrow funds at levels that exceed a reasonable
prospect for repayment; and (2) borrow funds for inappropriate,
wasteful, or unreasonably speculative activities.  The Executive
Oversight Committee's proposal recommended a ceiling on total
corporation borrowing of $15 billion based on the anticipated net
asset value of the corporation over the first 10 years of its
existence. 

According to a DOT official, FAA currently funds capital projects
from annual appropriations.  FAA does not use debt financing and has
no outstanding debt. 


--------------------
\11 For detailed information on the costs of operating the proposed
USATS corporation see the administration's Air Traffic Control
Corporation Study Financial Update, February 7, 1995, and Air Traffic
Control:  Analysis of Illustrative Corporate Financial Scenarios,
Technical Report prepared by Corporation Assessment Task Force for
the Executive Oversight Committee to the Secretary of Transportation,
May 3, 1994. 


   STAFFING
------------------------------------------------------- Appendix III:6

According to a DOT official, the proposed corporation would consist
of approximately 42,000 employees that would include air traffic
controllers, air traffic system maintenance technicians, and support
staff.  Corporation employees would remain federal government
employees. 


   STATUTORY AND REGULATORY
   EXEMPTIONS
------------------------------------------------------- Appendix III:7

Based on the administration's proposal, the USATS corporation would
be exempt from a number of statutes and regulations, including the
following: 


      APPROPRIATIONS AUTHORITY
----------------------------------------------------- Appendix III:7.1

Title 31 of the United States Code, particularly chapters 13 and 15,
contain numerous provisions dealing with appropriated funds.  These
provisions would not apply to funds of the corporation.  Under the
administration's proposal, USATS would be funded through revenues
earned by charging fees to users of the ATC system and would not rely
on appropriations for any of its operating or investment costs. 


      ANTI-DEFICIENCY ACT (31
      U.S.C.  1341)
----------------------------------------------------- Appendix III:7.2

The Anti-Deficiency Act prohibits officers and employees of the
United States from making expenditures or obligations prior to
appropriations or exceeding amounts available in an appropriation or
fund account. 


      BUDGET ENFORCEMENT ACT OF
      1990 (TITLE XIII OF THE
      OMNIBUS BUDGET
      RECONCILIATION ACT OF 1990)
----------------------------------------------------- Appendix III:7.3

The Budget Enforcement Act of 1990 modified procedures and
definitions for sequestration and deficit reduction and reformed
budgetary credit accounting.  Under this act, aviation taxes could
not be reduced unless offset by reductions in mandatory spending or
increases in other taxes. 


      FEDERAL AVIATION ACT -
      SECTION 303 AS AMENDED (49
      U.S.C.  APP.  1344)
----------------------------------------------------- Appendix III:7.4

The Federal Aviation Act provides procurement authority for the
acquisition and disposal of real property by the Secretary of
Transportation, on behalf of the United States.  The Secretary could
acquire real property by purchase, condemnation, lease, or otherwise. 


      BROOKS ACT (40 U.S.C.  759)
----------------------------------------------------- Appendix III:7.5

The purpose of the Brooks Act is to provide for the economic and
efficient purchase, lease, maintenance, operation, and use of
automatic data processing equipment by federal departments and
agencies under the direction and coordination of the Administrator of
GSA. 


      COMPETITION IN CONTRACTING
      ACT OF 1984 (PUBLIC LAW
      98-369, TITLE VII)
----------------------------------------------------- Appendix III:7.6

The purpose of the Competition in Contracting Act of 1984 is to
increase the use of competition in federal government contracting and
to impose more stringent restrictions on the awarding of
noncompetitive contracts.  The act generally requires agencies to use
competitive procedures; designates "full and open" as the standard
for competition in contracting; strengthens the justification,
approval, and notice requirements to safeguard against unnecessary
sole-source contracts; establishes competition advocates to enhance
accountability; and strengthens the bid protest process. 


      OFFICE OF FEDERAL
      PROCUREMENT POLICY ACT (41
      U.S.C.  401- 424)
----------------------------------------------------- Appendix III:7.7

The purpose of the Office of Federal Procurement Policy Act is to
establish an Office of Federal Procurement Policy in OMB to provide
overall direction of procurement policies, regulations, procedures,
and forms for executive agencies in accordance with applicable laws. 


      PROCUREMENT INTEGRITY ACT
      (41 U.S.C.  423)
----------------------------------------------------- Appendix III:7.8

The purpose of the Procurement Integrity Act is to specify that
certain conduct by contractors and government procuring officials in
procuring property or services is prohibited.  The act provides for
both civil and criminal penalties for violation. 


      ANTI-KICKBACK ACT OF 1986
      (41 U.S.C.  51-58)
----------------------------------------------------- Appendix III:7.9

The purpose of the Anti-Kickback Act is to strengthen the prohibition
of kickbacks relating to subcontracts under federal government
contracts.  The act prohibits the practice by subcontractors of
granting gifts or gratuities to employees of prime contractors or
higher tier subcontractors for the purpose of securing the
subcontract. 


      ETHICS REFORM ACT OF 1989
      (P.L.  101-194)
---------------------------------------------------- Appendix III:7.10

The purpose of the Ethics Reform Act of 1989 is to strengthen federal
ethical standards, including extending post-employment "revolving
door" restrictions to the legislative branch, prohibiting the receipt
of honoraria by federal employees, limiting outside earned income by
higher salaried noncareer employees, expanding financial disclosure
requirements, and creating conflict of interest rules for legislative
branch staff. 


      BYRD AMENDMENT (31 U.S.C. 
      1352)
---------------------------------------------------- Appendix III:7.11

The purpose of this amendment is to prohibit the recipient of a
federal contract, grant, loan, or cooperative agreement from using
appropriated funds to pay any person for influencing, or attempting
to influence, an officer or employee of an agency or Congress, or
Member of Congress, in order to obtain a contract, grant, loan, or
cooperative agreement. 


      ECONOMY ACT (31 U.S.C. 
      1535-1536)
---------------------------------------------------- Appendix III:7.12

The purpose of the Economy Act is to authorize agencies to enter into
agreements for the inter- and intra-departmental furnishing of
materials or performance of work or services on a reimbursable basis. 
The act provides for the crediting of such payments to agency
appropriations. 



---------------------------------------------------- Appendix III:7.13

USATS would also be exempt from the following provisions of Title 5
U.S.C. 


      PERSONNEL PROVISIONS (THE NO
      STRIKE PROVISION IN 5 U.S.C. 
      7311(3) WOULD REMAIN IN
      EFFECT)
---------------------------------------------------- Appendix III:7.14

Title 5 of the United States Code provides general personnel policies
for the federal government, including the organization and procedural
framework under which federal agencies operate as well as statutory
policies pertaining to federal employment, selection, promotion,
compensation, performance, etc. 

The no strike provision, which would apply to Corporation personnel,
is 5 U.S.C.  7311(3), which provides that an individual may not
accept or hold a position in the government of the United States or
the District of Columbia if that individual participates in a strike,
or asserts the right to strike, against the government.  Also, the
criminal provisions in 18 U.S.C.  1918, prevent anyone from accepting
or holding a public office who has been convicted of an illegal
strike against the government. 


      LABOR-MANAGEMENT RELATIONS
      PROVISIONS (U.S.C.  7101, ET
      SEQ.)
---------------------------------------------------- Appendix III:7.15

The Labor-Management Relations provisions of Title 5 of the United
States Code prescribe certain rights and obligations of employees of
the federal government to join and participate in unions without fear
of penalty or reprisal. 


      EMPLOYMENT PROVISIONS
      (CHAPTERS 31, 33, 35 OF 5
      U.S.C.)
---------------------------------------------------- Appendix III:7.16

Chapter 31, 5 U.S.C.  provides the general authority for each
executive agency, and military department, to employ such number of
employees as Congress may appropriate from year to year. 

Chapter 33, 5 U.S.C.  provides for the examination, certification,
appointment, transfer, and promotion of employees in the civil
service. 

Chapter 35, 5 U.S.C.  provides for retention preference in the event
of a reduction in force, restoration and reemployment rights. 


      EMPLOYEE PERFORMANCE
      PROVISIONS (CHAPTER 43, 5
      U.S.C.)
---------------------------------------------------- Appendix III:7.17

Employee performance provisions provide for the establishment of
performance rating plans by agencies. 


      PAY RATE AND ALLOWANCE
      PROVISION (5 U.S.C.  5392)
---------------------------------------------------- Appendix III:7.18

This provision provides the authority for the establishment of
special occupational pay systems.  This provision establishes
procedures for the consideration of alternative approaches for
determining the pay for employees in positions in certain occupations
or groups of occupations. 


      FEDERAL ACQUISITION
      REGULATION (48 C.F.R.  PARTS
      1-53, ET SEQ.)
---------------------------------------------------- Appendix III:7.19

The Federal Acquisition Regulation (FAR) was established for the
codification and publication of uniform policies and procedures for
the acquisition of supplies or services (including construction)
through purchase or lease by all executive agencies.  The Federal
Acquisition Regulation System consists of the FAR, which is the
primary document, and agency acquisition regulations that implement
or supplement the FAR. 


      REAL PROPERTY AND GENERAL
      SERVICES ADMINISTRATION
      REGULATION (41 C.F.R.  PART
      101)
---------------------------------------------------- Appendix III:7.20

The Real Property and General Services Administration Regulation is
prescribed by the Administrator of General Services and applies to
federal agencies.  The regulation prescribes policies, procedures,
and delegations of authority pertaining to the management of
property, and other programs and activities of the type administered
by GSA, except procurement and contract matters contained in the FAR. 


   RELATED MATERIALS
------------------------------------------------------- Appendix III:8

Air Traffic Control:  Issues Presented by Proposal to Create a
Government Corporation (GAO/T-RCED-95-114, Feb.  23, 1995). 

Air Traffic Control Corporation Study Financial Update, DOT, February
7, 1995. 

Air Traffic Control Service Improvement Act of 1994, draft bill, H.R. 
5209, 103d Congress, 2d Session, Oct.  6, 1994. 

Air Traffic Control:  Observations on Proposed Corporation
(GAO/T-RCED-94-210, May 12, 1994). 

Air Traffic Control Corporation Study, Report of the Executive
Oversight Committee to the Secretary of Transportation, May 3, 1994. 

Air Traffic Control:  Analysis of Illustrative Corporate Financial
Scenarios, Technical Report prepared by the Corporation Assessment
Task Force for the Executive Oversight Committee to the Secretary of
Transportation, May 3, 1994. 

Air Traffic Control:  Management Attention Needed for Future
Investment Decisions (GAO/T-RCED-94-195, Apr.  24, 1994). 

Air Traffic Control:  Agency Faces Key Management Challenges on Major
Issues (GAO/T-RCED-94-191, Apr.  19, 1994). 

Air Traffic Control:  Status of FAA's Modernization Program
(GAO/RCED-94-167FS, Apr.  15, 1994). 

Advanced Automation System:  Implications of Problems and Recent
Changes (GAO/T-RCED-94-188, Apr.  13, 1994). 

Aircraft Certification:  FAA Can Better Meet Challenges Posed by
Advances in Aircraft Technologies (GAO/RCED-94-53, Oct.  20, 1993). 

Aviation Research:  Issues Related to FAA's Research Activities
(GAO/T-RCED-93-68, July 29, 1993). 

Air Traffic Control:  Improvements Needed in FAA's Management of
Acquisitions (GAO/T-RCED-93-36, May 5, 1993). 

Air Traffic Control:  Uncertainties and Challenges Face FAA's
Advanced Automation System (GAO/T-RCED-93-20, Apr.  19, 1993). 

Air Traffic Control:  Status of FAA's Modernization Program
(GAO/RCED-93-121FS, Apr.  16, 1993). 

Air Traffic Control:  Advanced Automation System Problems Need to Be
Addressed (GAO/T-RCED-93-15, Mar.  10, 1993). 

Air Traffic Control:  Justifications for Capital Investments Need
Strengthening (GAO/RCED-93-55, Jan.  14, 1993). 

Air Traffic Control:  Advanced Automation System Still Vulnerable to
Cost and Schedule Problems (GAO/RCED-92-264, Sept.  18, 1992). 

Air Traffic Control:  Challenges Facing FAA's Modernization System
(GAO/T-RCED-92-34, Mar.  3, 1992). 


PROPOSED GOVERNMENT CORPORATION: 
FEDERAL HOUSING ADMINISTRATION
========================================================== Appendix IV


   PURPOSE
-------------------------------------------------------- Appendix IV:1

The Federal Housing Administration (FHA) was established under the
National Housing Act of 1934\1 to encourage improvement in housing
standards and conditions, provide an adequate home financing system
by insurance of housing mortgages and credit, and exert a stabilizing
influence on the mortgage market (24 CFR 200.3).  FHA was
consolidated into the newly established Department of Housing and
Urban Development (HUD) in 1965 (P.L.  80-174) and is currently
subject to the provisions of the Government Corporation Control Act
(GCCA).\2 As part of HUD's recent reinvention plan, FHA would be
transformed into a government- owned corporation. 

Currently, GCCA lists "the Secretary of the Department of Housing and
Urban Development as a wholly owned government corporation when
carrying out duties and powers related to the Federal Housing
Administration Fund." FHA's Special Assistant to the Assistant
Secretary for Housing/FHA Commissioner said that FHA does not have a
corporate charter and does not currently operate as a government
corporation.  According to NAPA, in 1965 Congress assigned the
corporate powers of FHA to the Secretary of HUD, who has delegated
them to the Assistant Secretary for Housing/FHA Commissioner. 

NAPA concluded that because of FHA's integration with HUD, "FHA
functions more like an executive branch agency that receives funding
solely from congressional appropriations than as a corporate entity
that generates substantial revenue--which it is and does." However,
NAPA reported that FHA's Commissioner does not have the flexibility
to adjust the FHA product to changing market conditions, such as
fluctuating interest rates, and that the Commissioner must operate
within the budgeting and administrative parameters of a traditional
federal agency. 

In its July 1994 report,\3 NAPA recommended that Congress transfer
FHA's corporate powers from the Secretary of HUD to the proposed
corporation, permitting it to function with greater operational
autonomy within HUD.  To minimize confusion over FHA's current
organizational structure, we will provide information that refers to
FHA as a "new corporation."

The new FHA corporation would consolidate FHA's existing insurance
programs into two general insurance authorities:  single family and
multifamily.  According to HUD, the FHA corporation would rely on
partnerships with well-capitalized, sophisticated, financial
institutions including government-sponsored enterprises, the Federal
Home Loan Banks, private mortgage insurance companies, state and
local housing finance agencies, and community-based organizations to
design a variety of products meeting market needs and ensure that FHA
insurance and credit enhancement is delivered as efficiently and
effectively as possible. 

A new debt restructuring group within the new FHA corporation would
be responsible for restructuring, project-by-project, the debt on the
nation's portfolio of assisted housing in a process known as
"marking-to-market." By using this process, the debt would be
established on the basis of the property's true market value, so HUD
could stop providing above-market rent subsidies to keep projects
alive. 

FHA's restructuring plan would subject assisted housing projects to
competitive market forces, aimed at improving their financial
management and the living conditions of their tenants.  Housing
opportunities for existing tenants would be ensured through a
combination of portable certificates, use of the Affordable Housing
Fund, and wherever appropriate, continuing project-specific use
restrictions. 


--------------------
\1 12 U.S.C.  1701, et seq. 

\2 31 U.S.C.  9101, et seq. 

\3 Renewing HUD:  A Long-Term Agenda for Effective Performance, NAPA,
July 1994. 


   STATUS
-------------------------------------------------------- Appendix IV:2

Mr.  Nicholas Retsinas, Assistant Secretary for Housing/FHA
Commissioner, conducted a study of FHA's organizational structure at
the request of Henry Cisneros, Secretary of HUD.  This study was to
answer two questions:  (1) Is FHA appropriately structured to carry
out its mission today and in the future?  and (2) If not, how might
FHA be better organized?  According to Mr.  Retsinas' Special
Assistant, two initial assumptions that guided this study were that
FHA should not be (1) privately owned or (2) placed outside the HUD
Secretary's control. 

Mr.  Retsinas, with assistance from Harvard University's Joint Center
for Housing Studies, hosted eight public forums in cities across the
United States (from July 27 through November 3, 1994) to gather
information to assist in the FHA study.  According to the Special
Assistant, Mr.  Retsinas is expected to present a report on the FHA
forums, which Harvard's Joint Center is also working on, to Secretary
Cisneros at the end of March 1995. 

In addition, the Special Assistant said that, in advance of
completing the final report, the HUD Secretary adopted the Assistant
Secretary/Commissioner's recommendation to transform FHA into a new
government corporation.  This recommendation was also accepted by the
President and included in the Reinvention Blueprint describing the
administration's proposal for reinventing HUD.  In addition, the
administration is now preparing a concept paper for Congress
describing the legislation necessary to create the new corporation. 

NAPA made the following three recommendations to Congress on the FHA: 
(1) transfer the corporate powers of FHA from the HUD Secretary to
the corporation, permitting it to function with greater operational
autonomy within HUD; (2) vest management of FHA in a single
administrator appointed by the President, with Senate confirmation
for a 6-year term of office (administrator to be compensated at the
same level as the chief executive officer of comparable government
corporations); and (3) commission an analysis of the advantages and
disadvantages of a possible merger of FHA and the Government National
Mortgage Association. 


   SPONSOR
-------------------------------------------------------- Appendix IV:3

HUD Secretary, Henry Cisneros, requested the FHA organizational
structure study. 


   MANAGEMENT STRUCTURE
-------------------------------------------------------- Appendix IV:4

According to a November 1994 draft of HUD's plan to reinvent FHA, the
proposed new corporation's administrator, appointed by the President
with Senate confirmation, would act under the policy direction of
HUD's Secretary. 

NAPA concluded that vesting management in a single administrator
--without a formal advisory board--would provide the best structure
to clarify lines of authority, provide unity and continuity of
leadership, and ensure accountability and responsiveness to Congress,
the President, and the public. 


   FUNDING/BUDGET
-------------------------------------------------------- Appendix IV:5

The corporation, according to HUD's draft plan, would have an annual
business-type budget, the flexibility to design its own products and
pricing, the authority to manage financial assets to preserve value
and protect against interest rate risk, and the ability to use its
earnings from profitable lines of business to carry out the
corporation's activities.  In the draft plan, HUD states that the
corporation could sustain its activities without appropriations if it
were authorized to restructure and to mark-to-market FHA's existing
portfolio of multifamily housing, generate revenue-producing lines of
business, and balance its public purpose goals and target markets. 

However, FHA had a funding deficiency of almost $6.3 billion as of
September 30, 1993, that resulted from operating losses in prior
fiscal years.  This deficiency will require funding for FHA to meet
its future operating needs.  In addition, FHA had outstanding debt to
external parties of $1.793 billion as of the end of fiscal year 1993. 

Moreover, NAPA reported that FHA has not been self-sustaining and
will not likely become so under a corporate structure.  FHA will use
insurance premium income to fund staffing, overhead, direct operating
expenses, and some program activities.  NAPA explained that even in a
corporate structure there are inherent risks in providing insurance
to the families and businesses FHA serves; if there were not, the
private sector would provide it.  In addition, the nation will still
have to devote considerable funds to subsidize multifamily housing,
which often works in tandem with FHA insurance programs. 


   STAFFING
-------------------------------------------------------- Appendix IV:6

According to a draft HUD document, eventually the corporation would
have a small, but highly-skilled staff. 


   STATUTORY AND REGULATORY
   EXEMPTIONS
-------------------------------------------------------- Appendix IV:7

According to HUD's draft plan, the corporation would have
business-like flexibility in employment, contracting, and deployment
of resources.  However, this document did not specify particular
statutory or regulatory exemptions. 


   RELATED MATERIALS
-------------------------------------------------------- Appendix IV:8

Office of Inspector General testimony before the Subcommittee on VA,
HUD, and Independent Agencies, House Committee on Appropriations,
Department of Housing and Urban Development, January 24, 1995. 

Housing and Urban Development:  Major Management and Budget Issues
(GAO/T-RCED-95-89, Jan.  24, 1995). 

Housing and Urban Development:  Major Management and Budget Issues
(GAO/T-RCED-95-86, Jan.  19, 1995). 

Reinvention Blueprint, HUD, Dec.  1994. 

A Reinvented FHA, draft HUD study, Nov.  30, 1994. 

Mortgage Financing:  Financial Health of FHA's Home Mortgage
Insurance Program Has Improved (GAO/RCED-95-20, Oct.  18, 1994). 

Credit Reform:  Appropriations of Negative Subsidy Receipts Raises
Questions (GAO/AIMD-94-58, Sept.  26, 1994). 

Renewing HUD:  A Long-Term Agenda for Effective Performance, NAPA,
July 1994. 

Mortgage Financing:  Financial Health of FHA's Home Mortgage
Insurance Program Has Improved (GAO/T-RCED-94-255, June 30, 1994). 

Audit Report:  Federal Housing Administration Audit of Fiscal Year
1993 Financial Statements (94-FO-131-0002), Office of Inspector
General, HUD, June 8, 1994. 

Multifamily Housing:  Status of HUD's Multifamily Loan Portfolios
(GAO/RCED-94-173FS, Apr.  12, 1994). 

Multifamily Housing:  Information on Selected Properties Owned by HUD
(GAO/RCED-94-163FS, Apr.  11, 1994). 

Housing Finance:  Characteristics of Borrowers of FHA-Insured
Mortgages (GAO/RCED-94-135BR, Apr.  6, 1994). 

Federal Home Loan Bank System:  Reforms Needed to Promote Its Safety,
Soundness, and Effectiveness (GAO/GGD-94-38, Dec.  8, 1993). 

Housing Finance:  Expanding Capital for Affordable Multifamily
Housing (GAO/RCED-94-3, Oct.  27, 1993). 

Federal Credit Reform:  Information On Credit Modifications and
Financing Accounts (GAO/AIMD-93-26, Sept.  30, 1993). 

Homeownership:  Actuarial Soundness of FHA's Single-Family Mortgage
Insurance Program (GAO/T-RCED-93-64, July 27, 1993). 

Government National Mortgage Association:  Greater Staffing
Flexibility Needed to Improve Management (GAO/RCED-93-100, June 30,
1993). 

Multifamily Housing:  Impediments to Disposition of Properties Owned
by the Department of Housing and Urban Development (GAO/T-RCED-93-37,
May 12, 1993). 

FHA Internal Controls (GAO/RCED-92-227R, Sept.  30, 1992). 

Mortgage Credit Enhancements:  Options for FHA in Meeting the Need
for Affordable Multifamily Housing (GAO/T-RCED-92-52, Apr.  3, 1992). 

Fiscal Year 1992 Annual Management Report, FHA/HUD. 

Financial Management:  Analysis of Selected VA and FHA Housing
Program Accounting Methods (GAO/AFMD-92-8, Nov.  25, 1991). 

Property Disposition:  Information on Federal Single-Family
Properties (GAO/RCED-91-69, Mar.  29, 1991). 

Homeownership:  Loan Policy Changes Made to Strengthen FHA's Mortgage
Insurance Program (GAO/RCED-91-61, Mar.  1, 1991). 

Federal Housing Administration:  Monitoring of Single Family
Mortgages Needs Improvement (GAO/RCED-91-11, Feb.  7, 1991). 

Financial Audit:  Government National Mortgage Association's 1989
Financial Statements (GAO/AFMD-91-8, Oct.  30, 1990). 

Impact of FHA Loan Policy Changes on Financial Losses and Homebuyers
(GAO/T-RCED-90-95, July 10, 1990). 

Impact of FHA Loan Policy Changes on Its Cash Position
(GAO/T-RCED-90-70, June 6, 1990). 

Financial Audit:  Federal Housing Administration Fund's 1988
Financial Statements (GAO/AFMD-90-36, Feb.  9, 1990). 

Impact of FHA Loan Policy Changes (GAO/T-RCED-90-17, Nov.  16, 1989). 


PROPOSED GOVERNMENT CORPORATION: 
PRESIDIO TRUST
=========================================================== Appendix V


   PURPOSE
--------------------------------------------------------- Appendix V:1

The corporation, proposed in H.R.  3433, would seek to revitalize the
Presidio, a historic military base that became a unit of the Golden
Gate National Recreation Area--an existing unit of the National Park
Service (NPS)--in San Francisco, CA, on October 1, 1994.  The
Presidio Trust would be a "nonprofit public benefit government
corporation" within the Department of the Interior.\1 This Trust has
been proposed to rehabilitate, lease, and manage the bulk of the
Presidio's properties.  NPS would manage the Presidio's open space
areas. 

The Secretary of the Interior may use the Presidio's resources to
provide for and support programs and activities that foster research,
education, or demonstration projects, and that relate to the
environment, energy, transportation, international affairs, arts and
cultural understanding, and health and science. 

NPS' proposed action would establish public-private partnerships to
preserve and interpret the cultural and natural resources of the
Presidio while minimizing the cost to the U.S.  Treasury.  According
to H.R.  3433, this action would make efficient use of private sector
resources that could be used in the public interest.  To this end,
the Trust would negotiate and enter into agreements, including
contracts, leases, and cooperative agreements, with any person
including any governmental entity for the occupancy of any property
within the Presidio that the Trust manages.\2


--------------------
\1 On September 30, 1994, the Department of the Army transferred the
Presidio to the Department of the Interior in accordance with P.L. 
92-589, October 27, 1972.  P.L.  92-589 provided that the Secretary
of Defense could transfer all or any substantial portion of the
Presidio to the Interior when the Department of Defense (DOD)
determined the Presidio to be in excess of DOD needs. 

\2 The Secretary of the Interior is to initially transfer eight
Presidio properties to the Trust and any others that the Secretary
deems appropriate. 


   STATUS
--------------------------------------------------------- Appendix V:2

Representative Nancy Pelosi introduced H.R.  3433 on November 3,
1993.  The bill was referred to the House Committee on Natural
Resources.  The Senate Committee on Energy and Natural Resources did
markup on H.R.  3433 and made two significant changes on the Trust's
ability to obtain appropriations and its borrowing authority.  H.R. 
3433 did not pass in the 103d Congress. 

Senator Barbara Boxer introduced S.  1639 on November 8, 1993.  The
bill was referred to the Senate Committee on Energy and Natural
Resources.  S.  1639 did not pass in the 103d Congress. 

In addition, Representative Pelosi introduced H.R.  5231 in the 103d
Congress' second session.  According to an Interior official, H.R. 
5231 was a final attempt to create a Presidio Trust--this bill also
did not pass in the 103d Congress. 


   SPONSORS
--------------------------------------------------------- Appendix V:3

Representative Nancy Pelosi.

Senator Barbara Boxer.

Senator Dianne Feinstein. 


   MANAGEMENT STRUCTURE
--------------------------------------------------------- Appendix V:4

The Trust would have a 13-member board of directors to be appointed
by the Secretary of the Interior.  The board members would include
the NPS Director, Secretary of the Army,\3 Administrator of the
Environmental Protection Agency, and 10 individuals who are not
federal government employees. 

Each member would serve a 5-year term.  However, the Secretary, in
making initial appointments to the board, would appoint 3 directors
for a term of 2 years and 3 directors for a term of 3 years. 


--------------------
\3 The Secretary of the Army shall serve on the board until the Sixth
Army Headquarters ceases to exist at the Presidio.  At that time, the
Secretary of Energy will replace the Secretary of the Army on the
board. 


   FUNDING/BUDGET
--------------------------------------------------------- Appendix V:5

Proceeds from the leasing of Presidio properties managed by the Trust
would have been retained by the Trust without further appropriation
and used to offset the costs of administration, preservation,
restoration, operation, maintenance, repair, and related Trust
expenses for such properties.  As previously mentioned, the House and
Senate versions of H.R.  3433 differ in two key aspects: 
appropriations and borrowing authority. 

The House bill would have capped appropriations for purposes of the
Presidio, including the Presidio Trust, at $25 million in any fiscal
year.  However, the Senate version of H.R.  3433 would have placed
the $25 million appropriations cap on the Presidio alone, thus
allowing the Trust to obtain additional funding, if necessary. 

The House version of H.R.  3433 would have allowed the Trust to
borrow from the Treasury and from private sources as needed to carry
out the Trust's duties, obligations, and responsibilities.  In the
Senate version, the Trust would have only been able to borrow from
the Department of the Treasury and have outstanding obligations of up
to $150 million at any one time.  The purpose of providing borrowing
authority to the Trust was to have provided a means to accomplish the
repair and rehabilitation of Presidio buildings and structures
transferred to the Trust without relying on appropriated federal
construction dollars.  According to a July 1994 House report, the
Presidio would have generated substantial income through a reuse of
buildings and facilities, but only if those buildings are in a
condition to be leased.  In order to accommodate public use, hundreds
of buildings must meet building code requirements for seismic,
accessibility, health, and safety requirements.  The total cost to
repair and rehabilitate Presidio structures is estimated to be $490
million. 


   STAFFING
--------------------------------------------------------- Appendix V:6

Information not noted in proposal/to be determined.  However, the
Trust would have been able to accept volunteers as provided for under
the Volunteers in Parks Act of 1969.\4


--------------------
\4 16 U.S.C.  18g, et seq. 


   STATUTORY AND REGULATORY
   EXEMPTIONS
--------------------------------------------------------- Appendix V:7

Both versions of H.R.  3433 would have raised the dollar limitations
applicable to the Trust in the following two statutes: 


      FEDERAL PROPERTY AND
      ADMINISTRATIVE SERVICES ACT
      OF 1949 (40 U.S.C.  253(G))
------------------------------------------------------- Appendix V:7.1

The purpose of the Federal Property and Administrative Services Act
of 1949 is to provide for the federal government an economic and
efficient system for the procurement and supply of personal property
and nonpersonal services, the use of available property, the disposal
of surplus property, and records management. 

Under the proposed legislation, the Secretary may authorize the
Trust, in exercising authority under section 303(g) of the Federal
Property and Administrative Services Act of 1949,\5 which relates to
simplified purchase procedures, to use as the dollar limit of each
purchase or contract under that subsection an amount which does not
exceed $500,000.  Under the Federal Acquisition and Streamlining Act,
the dollar limit for agencies is $100,000.\6


--------------------
\5 41 U.S.C.  253(g). 

\6 P.L.  103-355. 


      OFFICE OF FEDERAL
      PROCUREMENT POLICY ACT (41
      U.S.C.  416)
------------------------------------------------------- Appendix V:7.2

The purpose of the Office of Federal Procurement Policy Act is to
establish an Office of Federal Procurement Policy in OMB to provide
overall direction of procurement policies, regulations, procedures,
and forms for executive agencies in accordance with applicable laws. 

Under the proposed legislation, the Secretary could authorize the
Trust, in carrying out the requirement of section 18 of the Office of
Federal Procurement Policy Act,\7 to furnish to the Secretary of
Commerce for publication notices of proposed procurement actions, to
use as the applicable dollar threshold for each expected procurement
an amount which does not exceed $1 million.  The dollar limit
established by section 4202 of the Federal Acquisition and
Streamlining Act for agencies is $25,000. 


--------------------
\7 41 U.S.C.  416. 


   RELATED MATERIALS
--------------------------------------------------------- Appendix V:8

Senate Report on the Presidio, 103d Congress, 2d Session, Report
103-429, Nov.  30, 1994. 

H.R.  5231, 103d Congress, 2d Session, Oct.  8, 1994. 

H.R.  3433, 103d Congress, 2d Session, Aug.  23, 1994 (Senate
version). 

House of Representatives Report on the Presidio, 103d Congress, 2d
Session, Report 103-615, July 21, 1994. 

Presidio Corporation Establishment Act, S.  1639, 103d Congress, 1st
Session, Nov.  8, 1993. 

H.R.  3433, 103d Congress, 2d Session, Nov.  3, 1993 (House version). 

Department of the Interior:  Transfer of the Presidio From the Army
to the National Park Service (GAO/RCED-94-61, Oct.  26, 1993). 

Department of the Interior:  Transfer of the Presidio From the Army
to the National Park Service (GAO/T-RCED-94-64, Oct.  26, 1993). 

Military Bases:  An Analysis of the Commission's Realignment and
Closure Recommendations (GAO/NSIAD-90-42, Nov.  29, 1989). 

Base Realignment and Closures (GAO/T-NSIAD-89-24, Apr.  12, 1989). 

The Presidio Corp., B-225714, Feb.  20 1987, 87-1 CPD, Para.  195 (CG
Decision). 

TeQcom, Inc., B-224664, Dec.  22, 1986, 86-2 CPD, Para.  700 (CG
Decision). 


PROPOSED GOVERNMENT CORPORATION: 
NATIONAL INFRASTRUCTURE
DEVELOPMENT CORPORATION
========================================================== Appendix VI


   PURPOSE
-------------------------------------------------------- Appendix VI:1

The proposed National Infrastructure Development Act of 1994 would
have created the National Infrastructure Development Corporation
(NIDC).  As expressed in Executive Order 12893 of January 26, 1994,
which sets out guiding principles for federal infrastructure
investments, a well-functioning infrastructure is vital to sustained
economic growth.  According to Representative Rosa DeLauro, the
proposal's sponsor, a self-supporting national level entity could
develop new uniform financing mechanisms to promote increased
public-private partnership investments and expand the resources
available to address unmet infrastructure needs.  In addition, the
act called for the corporation, within 5 years of the act, to prepare
a strategic plan for NIDC's transition to a government-sponsored
enterprise (GSE)\1 and for the sale or transfer to investors other
than the federal government. 

According to the act, before the transition to a GSE, NIDC would not
have been an agency of the United States.  NIDC would have complied
with all federal laws regulating the budgetary and auditing practices
of a government corporation, except as provided in the proposed act. 
After becoming a GSE, NIDC would not have been considered an agency,
instrumentality, or establishment of the United States; a government
corporation; or a government-controlled corporation for any purposes
of federal law; except as provided in the proposed act. 

The act's sponsor estimated that for every $1 billion of federal
appropriations used to capitalize NIDC, at least $10 billion of new
project work would result, and 225,000 to 300,000 new jobs would be
created.  NIDC's mission would have been to

  make senior and subordinated loans\2 and equity based investments
     to assist states and private entities develop revenue-based
     infrastructure projects;

  assist projects by lending funds to state revolving funds or
     directly to projects;

  provide financial insurance, through its insurance corporation
     subsidiary (see app.  VII), on taxable and tax-exempt debt,
     particularly for smaller or start-up projects that have
     difficulty obtaining conventional credit enhancement;

  provide development risk insurance for critical preconstruction and
     other development phase costs;

  facilitate pension fund infrastructure investments through the
     issuance of investment grade infrastructure securities;

  create an opportunity, through a transition plan, for these funds
     to purchase a controlling interest in NIDC from the federal
     government; and

  guard the public interest by the use of strict project selection
     criteria and by application of the Davis-Bacon Act wage
     provisions to NIDC-assisted projects. 

The proposed National Infrastructure Development Act of 1994 also
stated that state and local authority to approve and regulate an
infrastructure project would not have been superseded by NIDC
assistance. 

According to the Counsel, Commission to Promote Investment in
America's Infrastructure,\3 NIDC, in essence, is a national level
revolving fund intended to facilitate the financing of projects that
can be self-sustaining based on user charges or other dedicated
revenue sources.  This financing, in turn, would have freed up
federal and state grant money for those projects that cannot be
self-sustaining. 

NIDC, as proposed, would have provided financial support to
potentially self-sustaining infrastructure projects, such as
establishing a commuter rail service, building new toll roads,
repairing a tunnel, or redecking an existing free bridge and
converting it to a toll facility. 

In February 1994, the Congressional Budget Office (CBO) reported on
creating a noncorporate infrastructure development organization in
three ways, as (1) an on-budget agency, (2) a government-sponsored
enterprise, or (3) a special-purpose finance company.  CBO summarized
the characteristics of each option but did not recommend any
organizational form. 


--------------------
\1 GSEs are federally established, privately owned corporations
designed to increase the flow of credit to specific economic sectors. 
Examples include the Federal National Mortgage Association (Fannie
Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). 

\2 The term "subordinate debt" is sometimes also referred to as
"junior debt," which means debt which is legally subordinated to (not
due before) payments on the remaining "senior" portion of a debt
offering sold to finance a project.  By subordinating some bonds to
the remaining senior portion of a debt offering, the issuer enhances
the investment grade quality of senior debt. 

\3 In 1991, Congress created this Commission to identify new ways of
encouraging investment in the nation's stock of physical
infrastructure.  The Commission found that current levels of spending
and traditional means of financing are inadequate to meet current and
future U.S.  infrastructure needs.  The Commission, in their February
1993 report, made three major recommendations:  (1) create a national
infrastructure corporation to leverage federal dollars and boost
investment in infrastructure projects with a capacity to become
self-sustaining through user fees or dedicated revenues; (2) create a
new range of investment options to attract institutional investors,
including pension funds, as new sources of infrastructure capital;
and (3) strengthen existing infrastructure financing tools and
programs by making federal incentives more consistent and by
providing uniform treatment for investment in infrastructure
projects. 


   STATUS
-------------------------------------------------------- Appendix VI:2

On September 28, 1994, Representative Rosa DeLauro introduced a bill
entitled the National Infrastructure Development Act of 1994.  The
103d Congress did not pass the bill.  This bill would have
established NIDC, and a subsidiary to be called the National
Infrastructure Insurance Corporation (NIIC), as wholly owned
government corporations. 


   SPONSOR
-------------------------------------------------------- Appendix VI:3

Representative Rosa DeLauro. 


   MANAGEMENT STRUCTURE
-------------------------------------------------------- Appendix VI:4

As proposed, NIDC would have had a 12-member board of directors, of
which 9 would have been appointed by the President and 3 would have
been officers of the corporation.  Of the nonofficer directors
appointed to the board, a minimum of six would have been selected
from private sector representatives as follows: 

  two representatives from organized labor,

  two individuals involved in the field of public-private
     infrastructure finance and related disciplines, and

  two individuals selected by the President after consulting with and
     considering the recommendations of the National Governors'
     Conference. 

A majority of nonofficer members of the board would have appointed
the NIDC president, who also would have served on the board.  The
NIDC president would have selected two executive officers to be
appointed to the board, subject to confirmation by a majority of the
board. 

The terms for directors first appointed by the President would have
been as follows:  one-third of the directors for 2 years, one-third
for 3 years, and one-third for 4 years.  After this initial
appointment, presidential appointees are to have a term of 4 years. 
Officer directors are to serve for a period of 1 year or until they
cease to be officers of the corporation. 


   FUNDING/BUDGET
-------------------------------------------------------- Appendix VI:5

The act would have authorized $30 million to be appropriated to the
Secretary of the Treasury to facilitate NIDC's initial operations. 
In addition, NIDC would have received start-up capital through the
sale of common stock to the U.S.  Treasury, authorized at $1 billion
for each of the fiscal years 1995 through 1997. 

Thereafter, NIDC would have been self-sustaining through revenues
generated by income from loan repayments, fees, and charges.  The act
prohibited any additional federal financing after the initial
start-up capitalization and specified that NIDC's obligations were
not to carry a federal government guarantee.  According to the
Counsel, Commission to Promote Investment in America's
Infrastructure, NIDC would not have a line of credit at the
Department of the Treasury. 

The act would have created a category of financial instrument called
"public benefit bonds" designed to help facilitate pension plan
investment in the development of infrastructure facilities.\4 The
projected additional revenue to the U.S.  Treasury generated by the
Public Benefit Bond is anticipated to offset the amount of the
federal investment in NIDC.  The act also provided for a transition
plan under which the federal government's investment in NIDC would
have been repaid. 

According to the proposal's sponsor, sources of private capital,
including the more than $4.5 trillion in assets held by institutional
investors such as pension funds, have expressed a growing interest in
public-private infrastructure investment opportunities that provide
competitive rates of return. 

According to a member of Representative DeLauro's staff and an
official from Lehman Brothers,\5 before NIDC's transition to a GSE,
it would have been treated as on-budget for the purpose of scoring\6
its federal capital contributions according to the Federal Credit
Reform Act.\7 However, the proposed corporation's on-going activities
would not have been subject to further fiscal year appropriation or
apportionment. 


--------------------
\4 Public and private pension plans would be permitted to purchase
Public Benefit Bonds issued to finance infrastructure facilities. 
The interest income would be distributed tax-free to the plan member
at retirement, passing the tax benefits through the plan
beneficiaries.  According to the proposal's sponsor, these bonds
would be of particular interest to defined contribution plans which
could offer their participants new competitive investment
opportunities tied to infrastructure development.  Public Benefit
Bonds would include bonds, which are currently tax-exempt, as well as
infrastructure debt, which is otherwise taxable. 

\5 Lehman Brothers assisted Representative DeLauro to prepare case
studies of infrastructure projects that could have benefited from the
National Infrastructure Development Act of 1994. 

\6 Scorekeeping is the process of estimating the budgetary effects of
pending and enacted legislation and comparing them to limits set in
the budget resolution or legislation.  Scorekeeping tracks data such
as budget authority, receipts, outlays, the surplus or deficit, and
the public debt limit. 

\7 The Federal Credit Reform Act of 1990 requires that the net
present value of the estimated long-term cost to the government of
new direct loans and loan guarantees be financed from new budget
authority and be recorded as budget outlays at the time the direct or
guaranteed loans are disbursed. 


   STAFFING
-------------------------------------------------------- Appendix VI:6

According to a member of Representative Rosa DeLauro's staff, the
number of staff that NIDC would have employed was never determined. 


   STATUTORY AND REGULATORY
   EXEMPTIONS
-------------------------------------------------------- Appendix VI:7


      EXEMPT SECURITIES
------------------------------------------------------ Appendix VI:7.1

All equity and debt securities and other obligations issued by the
NIDC under the act would have been exempt securities under laws
administered by the Securities and Exchange Commission (SEC) to the
same extent as securities that are direct obligations of, or
obligations fully guaranteed as to principal or interest by, the
United States. 

The SEC is responsible for registering securities and reviewing
disclosure statements before their issuance.  The proposed
legislation provided that all equity and debt securities and other
obligations issued by the NIDC would have been exempt from regulation
by the Securities and Exchange Commission in the same way as those
issued or guaranteed by the U.S.  government. 


      FEDERAL RESERVE ACT, SECTION
      14 AND 31 U.S.C.  3124
------------------------------------------------------ Appendix VI:7.2

NIDC obligations would have been deemed obligations of the United
States for the purposes of the provision designated as (b)(2) of the
second undesignated paragraph of section 14 of the Federal Reserve
Act and section 3124 of Title 31, United States Code.  By specifying
that the obligations of the corporation are deemed obligations of the
United States for certain purposes, the proposed bill would have
allowed these obligations to be bought and sold by any Federal
Reserve Bank and to be exempt from state and local taxation. 


      31 U.S.C.  3713
------------------------------------------------------ Appendix VI:7.3

Generally, 31 U.S.C.  3713 provides that a claim of the U.S. 
government against a debtor would be paid first.  The priority
established in favor of the United States by 31 U.S.C.  3713 would
not have applied concerning any indebtedness of NIDC. 


   RELATED MATERIALS
-------------------------------------------------------- Appendix VI:8

National Infrastructure Development Act of 1994, draft bill, H.R. 
5120, 103d Congress, 2d Session, Sept.  28, 1994. 

National Infrastructure Development Act of 1994, Summary,
Representative Rosa DeLauro, House of Representatives, 1994. 

National Infrastructure Development Act of 1994, draft summary,
Representative Rosa DeLauro, House of Representatives, Sept.  6,
1994. 

Description of Public Benefit Bonds, Representative Rosa DeLauro,
House of Representatives, 1994. 

Prototypical Case Studies of Infrastructure Projects Benefiting from
the National Infrastructure Development Act of 1994, Representative
Rosa DeLauro, House of Representatives, 1994. 

An Analysis of the Report of the Commission to Promote Investment in
America's Infrastructure, Congressional Budget Office, CBO Papers,
Feb.  1994. 

Financing the Future, Report of the Commission to Promote Investment
in America's Infrastructure, Feb.  1993. 


PROPOSED GOVERNMENT CORPORATION: 
NATIONAL INFRASTRUCTURE INSURANCE
CORPORATION
========================================================= Appendix VII


   PURPOSE
------------------------------------------------------- Appendix VII:1

The proposed National Infrastructure Development Act of 1994 would
have created the National Infrastructure Insurance Corporation (NIIC)
as a subsidiary of the National Infrastructure Development
Corporation (NIDC) (see app.  VI).  NIIC would have provided
insurance and reinsurance for taxable and tax-exempt obligations used
to finance the development of smaller and start-up infrastructure
projects that have difficulty accessing the private bond insurance
market.  In addition, the act called for the NIDC, within 5 years of
the act, to prepare a strategic plan for NIIC's transition to a GSE
and for its sale or transfer to investors other than the federal
government. 

According to the act, before the transition to a GSE, NIIC would not
have been an agency of the United States.  NIIC would have complied
with all federal laws regulating the budgetary and auditing practices
of a government corporation, except as provided in the proposed act. 
After becoming a GSE, NIIC would not have been considered an agency,
instrumentality, or establishment of the United States; a government
corporation; or a government-controlled corporation for any purposes
of federal law; except as provided in the proposed act. 

According to CBO and the Commission to Promote Investment in
America's Infrastructure, NIIC would have provided a financial
guarantee by offering primary insurance of principal and interest for
investment grade bonds below single-A,\1 similar to the operations of
the College Construction Loan Insurance Association (Connie Lee). 
According to the Counsel for the Commission to Promote Investment in
America's Infrastructure,\2 NIIC is to operate primarily in the
BBB/BB underlying credit range, where coverage by existing bond
insurers is limited.\3 NIIC would have also provided reinsurance to
existing bond insurers to free up additional capacity for them.\4 The
Commission assumed that half of the proposed corporation's debt would
be tax-exempt and half would be taxable.  At the same time, NIIC
would have been required to maintain sufficient reserves to receive
the highest national rating (AAA) on its claims-paying ability. 

Examples when NIIC would have supported projects include providing
primary bond insurance, secondary reinsurance (which would free up
new insurance underwriting), and development phase risk insurance. 

In February 1994, the CBO reported on creating a noncorporate
infrastructure insurance organization in two ways, as (1) an
on-budget agency or (2) a municipal bond insurer.  CBO summarized the
characteristics of each option but did not recommend any
organizational form. 


--------------------
\1 There are two general categories of investment.  The
lower-risk/higher-quality category is called investment-grade.  For
example, Standard and Poor's (S&P) bond ratings from the highest to
lowest investment-grade are AAA, AA, A, and BBB.  Riskier categories
of bonds are called speculative-grade.  S&P's alphabetic range from
highest to lowest grade of speculative debt are BB, B, CCC, CC, C,
and D.  Moody's investment-grade ratings are Aaa, Aa, A, and Baa, and
their speculative-grade ratings are Ba, B, Caa, Ca, and C.  Moody's
Aaa rating means that the interest payments are protected by a large
or exceptionally stable margin and the principal is secure.  Further,
foreseeable changes are unlikely to impair the fundamentally strong
position of such bonds. 

\2 See NIDC's "Purpose" section in app.  VI for more information on
this Commission. 

\3 A minimum of 75% of the primary insurance issued by NIIC would
have been for smaller or start-up projects whose debt is often rated
at BBB and BB. 

\4 Reinsurers enter into contracts with the primary insurer to
reimburse the primary insurer for part of any default loss on the
bond. 


   STATUS
------------------------------------------------------- Appendix VII:2

On September 28, 1994, Representative Rosa DeLauro introduced a bill
entitled the National Infrastructure Development Act of 1994.  The
103d Congress did not pass the bill.  This act would have established
NIDC and NIIC as wholly owned government corporations. 


   SPONSOR
------------------------------------------------------- Appendix VII:3

Representative Rosa DeLauro. 


   MANAGEMENT STRUCTURE
------------------------------------------------------- Appendix VII:4

NIIC would have had a 12-member board of directors elected by NIIC
stockholders.  The board would have comprised individuals who
demonstrated expertise and experience in the field of credit
enhancement or insurance and related disciplines.  A minimum of nine
members would have represented the private sector.  The proposed
corporation's initial directors would have been appointed by NIDC's
board of directors for a term of 2 years. 


   FUNDING/BUDGET
------------------------------------------------------- Appendix VII:5

According to the Commission to Promote Investment in America's
Infrastructure, NIIC would have charged premiums and operate on a
self-supporting basis, similar to Connie Lee.  In addition, NIDC may
have purchased common stock in NIIC as NIDC's board of directors
deemed appropriate.  However, not more than 25 percent of NIDC's
capital, surplus, and retained earnings may be invested in NIIC
without the consent of the Secretary of the Treasury. 


   STAFFING
------------------------------------------------------- Appendix VII:6

According to a member of Representative Rosa DeLauro's staff, the
number of staff that NIIC would have employed was never determined. 


   STATUTORY AND REGULATORY
   EXEMPTIONS
------------------------------------------------------- Appendix VII:7


      EXEMPT SECURITIES
----------------------------------------------------- Appendix VII:7.1

All equity and debt securities and other obligations issued by NIIC
under the act would have been exempt securities under laws
administered by the SEC to the same extent as securities that are
direct obligations of, or obligations fully guaranteed as to
principal or interest by, the United States. 

The SEC is responsible for registering securities and reviewing
disclosure statements before their issuance.  The proposed
legislation provided that all equity and debt securities and other
obligations issued by the NIIC would have been exempt from regulation
by the SEC in the same way as those issued or guaranteed by the U.S. 
government. 


      FEDERAL RESERVE ACT, SECTION
      14 AND 31 U.S.C.  3124
----------------------------------------------------- Appendix VII:7.2

NIIC obligations would have been deemed obligations of the United
States for the purposes of the provision designated as (b)(2) of the
second undesignated paragraph of section 14 of the Federal Reserve
Act and section 3124 of Title 31, United States Code.  By specifying
that the obligations of the corporation are deemed obligations of the
United States for certain purposes, the proposed bill would have
allowed these obligations to be bought and sold by any Federal
Reserve Bank and exempt from state and local taxation. 


      31 U.S.C.  3713
----------------------------------------------------- Appendix VII:7.3

Generally, 31 U.S.C.  3713 provides that a claim of the U.S. 
government against a debtor would be paid first.  The priority
established in favor of the United States by 31 U.S.C.  3713 would
not have applied concerning any indebtedness of NIIC. 


   RELATED MATERIALS
------------------------------------------------------- Appendix VII:8

National Infrastructure Development Act of 1994, draft bill, H.R. 
5120, 103d Congress, 2d Session, Sept.  28, 1994. 

National Infrastructure Development Act of 1994, Summary,
Representative Rosa DeLauro, House of Representatives, 1994. 

National Infrastructure Development Act of 1994, draft summary,
Representative Rosa DeLauro, House of Representatives, Sept.  6,
1994. 

Description of Public Benefit Bonds, Representative Rosa DeLauro,
House of Representatives, 1994. 

Prototypical Case Studies of Infrastructure Projects Benefiting from
the National Infrastructure Development Act of 1994, Representative
Rosa DeLauro, House of Representatives, 1994. 

An Analysis of the Report of the Commission to Promote Investment in
America's Infrastructure, Congressional Budget Office, CBO Papers,
Feb.  1994. 

Financing the Future, Report of the Commission to Promote Investment
in America's Infrastructure, Feb.  1993. 


NEW GOVERNMENT CORPORATION: 
COMMUNITY DEVELOPMENT FINANCIAL
INSTITUTIONS FUND
======================================================== Appendix VIII


   PURPOSE
------------------------------------------------------ Appendix VIII:1

The Community Development Banking and Financial Institutions Act of
1994\1 created the Community Development Financial Institutions Fund
(CDFIF).  CDFIF is intended to promote economic revitalization and
community development through investment in and assistance to
community development financial institutions, including enhancing
their liquidity. 

CDFIF may provide (1) financial assistance through equity
investments, deposits, credit union shares, loans, and grants and (2)
technical assistance directly, through grants, or by contracting with
organizations that possess expertise in community development
finance.  CDFIF may also be used to facilitate small business capital
enhancement.  Participating states may apply to CDFIF for assistance
to (1) promote economic opportunity and growth, (2) create jobs, (3)
promote economic efficiency, (4) enhance productivity, and (5) spur
innovation. 


--------------------
\1 The Community Development Banking and Financial Institutions Act
of 1994 is Title 1, Subtitle A, of the Riegle Community Development
and Regulatory Improvement Act of 1994, P.L.  103- 325. 


   STATUS
------------------------------------------------------ Appendix VIII:2

On September 23, 1994, President Clinton signed the Riegle Community
Development and Regulatory Improvement Act of 1994.  The Department
of the Treasury is assisting with the start-up of CDFIF. 

CDFIF is in a transition period during which the Secretary of the
Treasury may assist in the establishment of CDFIF administrative
functions and hire staff.  The act defined the transition period as
beginning on the date of its enactment and ending on the date on
which the CDFIF Administrator is appointed. 


   SPONSOR
------------------------------------------------------ Appendix VIII:3

Senator Donald W.  Riegle, Jr., former Chairman, Senate Committee on
Banking, Housing, and Urban Affairs, introduced the Community
Development Banking and Financial Institutions Act of 1993 on July
21, 1993.\2

Representative Henry B.  Gonzalez, then Chairman, House Committee on
Banking, Finance, and Urban Affairs, introduced The Community
Development Banking and Financial Institutions Act of 1993 on
November 9, 1993.\3

Both the Riegle and Gonzalez bills proposed the establishment of the
Community Development Banking Financial Institutions Fund. 


--------------------
\2 S.  1275, 103d Congress, 1st session. 

\3 H.R.  3474, 103d Congress, 1st session. 


   MANAGEMENT STRUCTURE
------------------------------------------------------ Appendix VIII:4

CDFIF is a wholly owned government corporation in the executive
branch. 

CDFIF is to be managed by an administrator to be appointed by the
President, with the advice and consent of the Senate.  The CDFIF
Administrator is to appoint a Chief Financial Officer (CFO) who is to
have the authority and functions of an agency CFO as specified by the
CFO Act of 1990.\4 The administrator may also appoint other such
officers and employees of CDFIF as the administrator deems necessary
or appropriate. 

The act established a 15-member advisory board to CDFIF, known as the
Community Development Advisory Board, which is to be operated
according to the provisions of the Federal Advisory Committee Act
(FACA).\5 However, section 14 of FACA, requiring that an advisory
committee must terminate after 2 years unless it is renewed, does not
apply to the board.  Board members are to include the secretaries of
Agriculture, Commerce, Housing and Urban Development, the Interior,
the Treasury, or their designees; the Administrator of the Small
Business Administration, or his or her designee; and nine private
citizens appointed by the President. 


--------------------
\4 Section 902 of the CFO Act specifies that agency CFOs report
directly to the head of their agency and oversee all financial
management activities related to the programs and operations of their
agency. 

\5 P.L.  92-463. 


   FUNDING/BUDGET
------------------------------------------------------ Appendix VIII:5

To promote economic revitalization and community development through
investment in and assistance to community development financial
institutions, the following amounts are authorized to be appropriated
to CDFIF and to remain available until expended:  $60 million (fiscal
year 1995); $104 million (fiscal year 1996); $107 million (fiscal
year 1997); and $111 million (fiscal year 1998). 

Of the amounts authorized to be appropriated to CDFIF, not more than
$5.55 million may be used by CDFIF in any fiscal year to pay for its
administrative costs and expenses. 


   STAFFING
------------------------------------------------------ Appendix VIII:6

During the transition period for CDFIF, the Secretary of the Treasury
may hire not more than six individuals to serve as employees of CDFIF
and not more than two of them may be Treasury employees. 


   STATUTORY AND REGULATORY
   EXEMPTIONS
------------------------------------------------------ Appendix VIII:7


      GOVERNMENT CORPORATION
      CONTROL ACT (31 U.S.C. 
      9107(B))
---------------------------------------------------- Appendix VIII:7.1

The Government Corporation Control Act (GCCA) mandates audit,
accounting, and budget requirements for mixed-ownership and wholly
owned government corporations.  CDFIF financial assistance in the
form of deposits in insured community development institutions is
exempt from section 9107(b) of GCCA, which provides that the
Secretary of the Treasury has authority over deposits of government
corporations. 


      FEDERAL ADVISORY COMMITTEE
      ACT, SECTION 14 (5 U.S.C. 
      APP.  2, 14)
---------------------------------------------------- Appendix VIII:7.2

The Community Development Advisory Board, established to advise the
CDFIF Administrator, is exempt from section 14 of the Federal
Advisory Committee Act, which requires that an advisory committee
must terminate after 2 years unless it is renewed. 


      ADMINISTRATIVE
      CLASSIFICATION AND
      COMPENSATION
---------------------------------------------------- Appendix VIII:7.3

CDFIF transitional employees are not covered by the federal employee
classification system requirements under 5 U.S.C.  Chapter 51 and the
General Schedule and Executive Service compensation system under 5
U.S.C.  Chapter 53.  These employees may not be paid more than the
rate payable for Level V\6 of the Executive Schedule, established
under 5 U.S.C.  5316. 


--------------------
\6 Level V of the Executive Schedule covers a range of executive
positions within departments (for example, the Administrator of the
Agricultural Marketing Service, Department of Agriculture; General
Counsel, Department of the Navy; and Inspector General, Department of
the Interior). 


   RELATED MATERIAL
------------------------------------------------------ Appendix VIII:8

Riegle Community Development and Regulatory Improvement Act of 1994,
P.L.  103-325, Sept.  23, 1994. 


MAJOR CONTRIBUTORS AND STAFF
ACKNOWLEDGEMENTS
========================================================== Appendix IX

GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C. 

J.  Christopher Mihm, Assistant Director, (202) 512-3236
Donald L.  Bumgardner, Assignment Manager, (202) 512-7034
Anthony J.  Wysocki, Evaluator-in-Charge
Matthew D.  Ryan, Senior Evaluator
Kiki Theodoropoulos, Communications Analyst

OFFICE OF GENERAL COUNSEL,
WASHINGTON, D.C. 

Alan Belkin, Assistant General Counsel

STAFF ACKNOWLEDGEMENTS

In addition to those named above, the following individuals made
important contributions to this report: 

Bruce Goddard, Bob Heitzman, Jim Rebbe, and Paul Thompson, Office of
General Counsel, provided legal research assistance on all laws cited
in this report. 

John Davis and Greg Kutz, Accounting and Information Management
Division, provided budget and financial information on all
corporation profiles. 

Andy Finkel, Patricia Gleason, Cheryl Kramer, Bob Levin, Belva
Martin, Margaret Reese, and Mathew Scire, Resources, Community, and
Economic Development Division, provided information on the BPA, FHA,
NIDC, NIIC, NPOSR, Presidio Trust, and USATS corporation profiles. 

Teresa Anderson, Mark Gillen, and Tom McCool, General Government
Division, provided assistance in developing the CDFIF, NIDC, and NIIC
corporation profiles. 

Tony Ellis, Donita Ferguson, Glenda Hudson, and Audrey Ruge, Office
of Information Management and Communications, provided legislative
history research assistance. 
