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[104th Congress Public Law 204]
[From the U.S. Government Printing Office]

<DOC>
[DOCID: f:publ204.104]

[[Page 2873]]

 DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
              INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1997

[[Page 110 STAT. 2874]]

Public Law 104-204
104th Congress

                                 An Act

 
   Making appropriations for the Departments of Veterans Affairs and 
  Housing and Urban Development, and for sundry independent agencies, 
   boards, commissions, corporations, and offices for the fiscal year 
  ending September 30, 1997, and for other purposes. <<NOTE: Sept. 26, 
                         1996 -  [H.R. 3666]>> 

    Be it enacted by the Senate and <<NOTE: Departments of Veterans 
Affairs and Housing and Urban Development, and Independent Agencies 
Appropriations Act, 1997.>> House of Representatives of the United 
States of America in Congress assembled, That the following sums are 
appropriated, out of any money in the Treasury not otherwise 
appropriated, for the Departments of Veterans Affairs and Housing and 
Urban Development, and for sundry independent agencies, boards, 
commissions, corporations, and offices for the fiscal year ending 
September 30, 1997, and for other purposes, namely:

                                 TITLE I

                     DEPARTMENT OF VETERANS AFFAIRS

                    Veterans Benefits Administration

                        compensation and pensions

                     (including transfers of funds)

    For the payment of compensation benefits to or on behalf of veterans 
as authorized by law (38 U.S.C. 107, chapters 11, 13, 51, 53, 55, and 
61); pension benefits to or on behalf of veterans as authorized by law 
(38 U.S.C. chapters 15, 51, 53, 55, and 61; 92 Stat. 2508); and burial 
benefits, emergency and other officers' retirement pay, adjusted-service 
credits and certificates, payment of premiums due on commercial life 
insurance policies guaranteed under the provisions of Article IV of the 
Soldiers' and Sailors' Civil Relief Act of 1940, as amended, and for 
other benefits as authorized by law (38 U.S.C. 107, 1312, 1977, and 
2106, chapters 23, 51, 53, 55, and 61; 50 U.S.C. App. 540-548; 43 Stat. 
122, 123; 45 Stat. 735; 76 Stat. 1198); $18,671,259,000, to remain 
available until expended: Provided, That not to exceed $26,417,000 of 
the amount appropriated shall be reimbursed to ``General operating 
expenses'' and ``Medical care'' for necessary expenses in implementing 
those provisions authorized in the Omnibus Budget Reconciliation Act of 
1990, and in the Veterans' Benefits Act of 1992 (38 U.S.C. chapters 51, 
53, and 55), the funding source for which is specifically provided as 
the ``Compensation and pensions'' appropriation: Provided further, That 
such sums as may be earned on an actual qualifying patient basis, shall 
be reimbursed to ``Medical facilities revolving fund'' to augment the 
funding of individual 

[[Page 110 STAT. 2875]]

medical facilities for nursing home care provided to pensioners as 
authorized by the Veterans' Benefits Act of 1992 (38 U.S.C. chapter 55).

                          readjustment benefits

    For the payment of readjustment and rehabilitation benefits to or on 
behalf of veterans as authorized by 38 U.S.C. chapters 21, 30, 31, 34, 
35, 36, 39, 51, 53, 55, and 61, $1,377,000,000, to remain available 
until expended: Provided, That funds shall be available to pay any court 
order, court award or any compromise settlement arising from litigation 
involving the vocational training program authorized by section 18 of 
Public Law 98-77, as amended.

                   veterans insurance and indemnities

    For military and naval insurance, national service life insurance, 
servicemen's indemnities, service-disabled veterans insurance, and 
veterans mortgage life insurance as authorized by 38 U.S.C. chapter 19; 
70 Stat. 887; 72 Stat. 487, $38,970,000, to remain available until 
expended.

                 guaranty and indemnity program account

                      (including transfer of funds)

    For the cost of direct and guaranteed loans, such sums as may be 
necessary to carry out the program, as authorized by 38 U.S.C. chapter 
37, as amended: Provided, That such costs, including the cost of 
modifying such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974, as amended.
    In addition, for administrative expenses to carry out the direct and 
guaranteed loan programs, $105,226,000, which may be transferred to and 
merged with the appropriation for ``General operating expenses''.

                      loan guaranty program account

                      (including transfer of funds)

    For the cost of direct and guaranteed loans, such sums as may be 
necessary to carry out the program, as authorized by 38 U.S.C. chapter 
37, as amended: Provided, That such costs, including the cost of 
modifying such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974, as amended.
    In addition, for administrative expenses to carry out the direct and 
guaranteed loan programs, $33,810,000, which may be transferred to and 
merged with the appropriation for ``General operating expenses''.

                       direct loan program account

                      (including transfer of funds)

    For the cost of direct loans, such sums as may be necessary to carry 
out the program, as authorized by 38 U.S.C. chapter 37, as amended: 
Provided, That such costs, including the cost of modifying such loans, 
shall be as defined in section 502 of the Congressional Budget Act of 
1974, as amended: Provided further,

[[Page 110 STAT. 2876]]

That during 1997, within the resources available, not to exceed $300,000 
in gross obligations for direct loans are authorized for specially 
adapted housing loans.
    In addition, for administrative expenses to carry out the direct 
loan program, $80,000, which may be transferred to and merged with the 
appropriation for ``General operating expenses''.

                   education loan fund program account

                      (including transfer of funds)

    For the cost of direct loans, $1,000, as authorized by 38 U.S.C. 
3698, as amended: Provided, That such costs, including the cost of 
modifying such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974, as amended: Provided 
further, That these funds are available to subsidize gross obligations 
for the principal amount of direct loans not to exceed $3,000.
    In addition, for administrative expenses necessary to carry out the 
direct loan program, $195,000, which may be transferred to and merged 
with the appropriation for ``General operating expenses''.

             vocational rehabilitation loans program account

                      (including transfer of funds)

    For the cost of direct loans, $49,000, as authorized by 38 U.S.C. 
chapter 31, as amended: Provided, That such costs, including the cost of 
modifying such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974, as amended: Provided further, That 
these funds are available to subsidize gross obligations for the 
principal amount of direct loans not to exceed $2,822,000.
    In addition, for administrative expenses necessary to carry out the 
direct loan program, $377,000, which may be transferred to and merged 
with the appropriation for ``General operating expenses''.

          native american veteran housing loan program account

                      (including transfer of funds)

    For administrative expenses to carry out the direct loan program 
authorized by 38 U.S.C. chapter 37, subchapter V, as 
amended, $205,000, which may be transferred to and merged with the 
appropriation for ``General operating expenses''.

                     Veterans Health Administration

                              medical care

    For necessary expenses for the maintenance and operation of 
hospitals, nursing homes, and domiciliary facilities; for furnishing, as 
authorized by law, inpatient and outpatient care and treatment to 
beneficiaries of the Department of Veterans Affairs, including care and 
treatment in facilities not under the jurisdiction of the Department; 
and furnishing recreational facilities, supplies, and equipment; 
funeral, burial, and other expenses incidental thereto for beneficiaries 
receiving care in the Department; administrative expenses in support of 
planning, design, project management, real

[[Page 110 STAT. 2877]]

property acquisition and disposition, construction and renovation of any 
facility under the jurisdiction or for the use of the Department; 
oversight, engineering and architectural activities not charged to 
project cost; repairing, altering, improving or providing facilities in 
the several hospitals and homes under the jurisdiction of the 
Department, not otherwise provided for, either by contract or by the 
hire of temporary employees and purchase of materials; uniforms or 
allowances therefor, as authorized by 5 U.S.C. 5901-5902; aid to State 
homes as authorized by 38 U.S.C. 1741; and not to exceed $8,000,000 to 
fund cost comparison studies as referred to in 38 U.S.C. 8110(a)(5); 
$17,008,447,000, plus reimbursements: Provided, That of the funds made 
available under this heading, $700,000,000 is for the equipment and land 
and structures object classifications only, which amount shall not 
become available for obligation until August 1, 1997, and shall remain 
available until September 30, 1998.

                     medical and prosthetic research

    For necessary expenses in carrying out programs of medical and 
prosthetic research and development as authorized by 38 U.S.C. chapter 
73, to remain available until September 30, 1998, $262,000,000, plus 
reimbursements.

       medical administration and miscellaneous operating expenses

    For necessary expenses in the administration of medical, hospital, 
nursing home, domiciliary, construction, supply, and research 
activities, as authorized by law; administrative expenses in support of 
planning, design, project management, architectural, engineering, real 
property acquisition and disposition, construction and renovation of any 
facility under the jurisdiction or for the use of the Department of 
Veterans Affairs, including site acquisition; engineering and 
architectural activities not charged to project cost; and research and 
development in building construction technology; $61,207,000, plus 
reimbursements.

                    transitional housing loan program

                      (including transfer of funds)

    For the cost of direct loans, $7,000, as authorized by Public Law 
102-54, section 8, which shall be transferred from the ``General post 
fund'': Provided, That such costs, including the cost of modifying such 
loans, shall be as defined in section 502 of the Congressional Budget 
Act of 1974, as amended: Provided further, That these funds are 
available to subsidize gross obligations for the principal amount of 
direct loans not to exceed $70,000.
    In addition, for administrative expenses to carry out the direct 
loan program, $54,000, which shall be transferred from the ``General 
post fund'', as authorized by Public Law 102-54, section 8.

[[Page 110 STAT. 2878]]

                       Departmental Administration

                       general operating expenses

    For necessary operating expenses of the Department of Veterans 
Affairs, not otherwise provided for, including uniforms or 
allowances therefor; not to exceed $25,000 for official reception and 
representation expenses; hire of passenger motor vehicles; and 
reimbursement of the General Services Administration for security guard 
services, and the Department of Defense for the cost of overseas 
employee mail; $827,584,000: Provided, That during fiscal year 1997, 
notwithstanding any other provision of law, the number of individuals 
employed by the Department of Veterans Affairs (1) in other than 
``career appointee'' positions in the Senior Executive Service shall not 
exceed 6, and (2) in schedule C positions shall not exceed 11: Provided 
further, That funds under this heading shall be available to administer 
the Service Members Occupational Conversion and Training Act.

                        national cemetery system

    For necessary expenses for the maintenance and operation of the 
National Cemetery System, not otherwise provided for, 
including uniforms or allowances therefor; cemeterial expenses as 
authorized by law; purchase of two passenger motor vehicles for use in 
cemeterial operations; and hire of passenger motor vehicles, 
$76,864,000.

                       office of inspector general

    For necessary expenses of the Office of Inspector General in 
carrying out the Inspector General Act of 1978, as amended, $30,900,000.

                      construction, major projects

    For constructing, altering, extending and improving any of the 
facilities under the jurisdiction or for the use of the Department of 
Veterans Affairs, or for any of the purposes set forth in sections 316, 
2404, 2406, 8102, 8103, 8106, 8108, 8109, 8110, and 8122 of title 38, 
United States Code, including planning, architectural and engineering 
services, maintenance or guarantee period services costs associated with 
equipment guarantees provided under the project, services of claims 
analysts, offsite utility and storm drainage system construction costs, 
and site acquisition, where the estimated cost of a project is 
$3,000,000 or more or where funds for a project were made available in a 
previous major project appropriation, $250,858,000, of which $32,100,000 
shall be for the replacement hospital at Travis Air Force Base, 
Fairfield, California, and shall not be released for obligation prior to 
January 1, 1998, unless action is taken by the Congress specifically 
making such funds available, and all funds appropriated under the above 
heading are to remain available until expended: Provided, That except 
for advance planning of projects funded through the advance planning 
fund and the design of projects funded through the design fund, none of 
these funds shall be used for any project which has not been considered 
and approved by the Congress in the budgetary process: Provided further, 
That funds provided in this appropriation

[[Page 110 STAT. 2879]]

for fiscal year 1997, for each approved project shall be obligated (1) 
by the awarding of a construction documents contract by September 30, 
1997, and (2) by the awarding of a construction contract by September 
30, 1998: Provided further, <<NOTE: Reports.>>  That the Secretary shall 
promptly report in writing to the Comptroller General and to the 
Committees on Appropriations any approved major construction project in 
which obligations are not incurred within the time limitations 
established above; and the Comptroller General shall review the report 
in accordance with the procedures established by section 1015 of the 
Impoundment Control Act of 1974 (title X of Public Law 93-344): Provided 
further, That no funds from any other account except the ``Parking 
revolving fund'', may be obligated for constructing, altering, 
extending, or improving a project which was approved in the budget 
process and funded in this account until one year after substantial 
completion and beneficial occupancy by the Department of Veterans 
Affairs of the project or any part thereof with respect to that part 
only.

                      construction, minor projects

    For constructing, altering, extending, and improving any of the 
facilities under the jurisdiction or for the use of the Department of 
Veterans Affairs, including planning, architectural and engineering 
services, maintenance or guarantee period services costs associated with 
equipment guarantees provided under the project, services of claims 
analysts, offsite utility and storm drainage system construction costs, 
and site acquisition, or for any of the purposes set forth in sections 
316, 2404, 2406, 8102, 8103, 8106, 8108, 8109, 8110, and 8122 of title 
38, United States Code, where the estimated cost of a project is less 
than $3,000,000; $175,000,000, to remain available until expended, along 
with unobligated balances of previous ``Construction, minor projects'' 
appropriations which are hereby made available for any project where the 
estimated cost is less than $3,000,000: Provided, That funds in this 
account shall be available for (1) repairs to any of the nonmedical 
facilities under the jurisdiction or for the use of the Department which 
are necessary because of loss or damage caused by any natural disaster 
or catastrophe, and (2) temporary measures necessary to prevent or to 
minimize further loss by such causes.

                         parking revolving fund

    For the parking revolving fund as authorized by 38 U.S.C. 8109, 
$12,300,000, together with income from fees collected, to remain 
available until expended, which shall be available for all authorized 
expenses except operations and maintenance costs, which will be funded 
from ``Medical care''.

        grants for construction of state extended care facilities

    For grants to assist States to acquire or construct State nursing 
home and domiciliary facilities and to remodel, modify or alter existing 
hospital, nursing home and domiciliary facilities in State homes, for 
furnishing care to veterans as authorized by 38 U.S.C. 8131-8137, 
$47,397,000, to remain available until expended.

[[Page 110 STAT. 2880]]

        grants for the construction of state veterans cemeteries

    For grants to aid States in establishing, expanding, or improving 
State veteran cemeteries as authorized by 38 U.S.C. 2408, $1,000,000, to 
remain available until expended.

                             franchise fund

                      (including transfer of funds)

    There is hereby established in the Treasury <<NOTE: 31 USC 501 
note.>>  a franchise fund pilot, as authorized by section 403 of Public 
Law 103-356, to be available as provided in such section for expenses 
and equipment necessary for the maintenance and operation of such 
administrative services as the Secretary determines may be performed 
more advantageously as central services: Provided, That any inventories, 
equipment and other assets pertaining to the services to be provided by 
the franchise fund, either on hand or on order, less the related 
liabilities or unpaid obligations, and any appropriations made hereafter 
for the purpose of providing capital, shall be used to capitalize the 
franchise fund: Provided further, That the franchise fund may be paid in 
advance from funds available to the Department and other Federal 
agencies for which such centralized services are performed, at rates 
which will return in full all expenses of operation, including accrued 
leave, depreciation of fund plant and equipment, amortization of 
automated data processing (ADP) software and systems (either acquired or 
donated), and an amount necessary to maintain a reasonable operating 
reserve, as determined by the Secretary: Provided further, That the 
franchise fund shall provide services on a competitive basis: Provided 
further, That an amount not to exceed four percent of the total annual 
income to such fund may be retained in the fund for fiscal year 1997 and 
each fiscal year thereafter, to remain available until expended, to be 
used for the acquisition of capital equipment and for the improvement 
and implementation of Departmental financial management, ADP, and other 
support systems: Provided further, That no later than thirty days after 
the end of each fiscal year amounts in excess of this reserve limitation 
shall be transferred to the Treasury: Provided further, That such 
franchise fund pilot shall terminate pursuant to section 403(f) of 
Public Law 103-356.

                        administrative provisions

                      (including transfer of funds)

    Sec. 101. Any appropriation for 1997 for ``Compensation and 
pensions'', ``Readjustment benefits'', and ``Veterans insurance and 
indemnities'' may be transferred to any other of the mentioned 
appropriations.
    Sec. 102. Appropriations available to the Department of Veterans 
Affairs for 1997 for salaries and expenses shall be available for 
services authorized by 5 U.S.C. 3109.
    Sec. 103. No appropriations in this Act for the Department of 
Veterans Affairs (except the appropriations for ``Construction, major 
projects'', ``Construction, minor projects'', and the ``Parking 
revolving fund'') shall be available for the purchase of any site for or 
toward the construction of any new hospital or home.

[[Page 110 STAT. 2881]]

    Sec. 104. No appropriations in this Act for the Department of 
Veterans Affairs shall be available for hospitalization or examination 
of any persons (except beneficiaries entitled under the laws bestowing 
such benefits to veterans, and persons receiving such treatment under 5 
U.S.C. 7901-7904 or 42 U.S.C. 5141-5204), unless reimbursement of cost 
is made to the ``Medical care'' account at such rates as may be fixed by 
the Secretary of Veterans Affairs.
    Sec. 105. Appropriations available to the Department of Veterans 
Affairs for fiscal year 1997 for ``Compensation and pensions'', 
``Readjustment benefits'', and ``Veterans insurance and indemnities'' 
shall be available for payment of prior year accrued obligations 
required to be recorded by law against the corresponding prior year 
accounts within the last quarter of fiscal year 1996.
    Sec. 106. Appropriations accounts available to the Department of 
Veterans Affairs for fiscal year 1997 shall be available to pay prior 
year obligations of corresponding prior year appropriations accounts 
resulting from title X of the Competitive Equality Banking Act, Public 
Law 100-86, except that if such obligations are from trust fund accounts 
they shall be payable from ``Compensation and pensions''.
    Sec. 107. Notwithstanding any other provision of law, during fiscal 
year 1997, the Secretary of Veterans Affairs shall, from the National 
Service Life Insurance Fund (38 U.S.C. 1920), the Veterans' Special Life 
Insurance Fund (38 U.S.C. 1923), and the United States Government Life 
Insurance Fund (38 U.S.C. 1955), reimburse the ``General operating 
expenses'' account for the cost of administration of the insurance 
programs financed through those accounts: Provided, That reimbursement 
shall be made only from the surplus earnings accumulated in an insurance 
program in fiscal year 1997, that are available for dividends in that 
program after claims have been paid and actuarially determined reserves 
have been set aside: Provided further, That if the cost of 
administration of an insurance program exceeds the amount of surplus 
earnings accumulated in that program, reimbursement shall be made only 
to the extent of such surplus earnings: Provided further, That the 
Secretary shall determine the cost of administration for fiscal year 
1997, which is properly allocable to the provision of each insurance 
program and to the provision of any total disability income insurance 
included in such insurance program.
    Sec. 108. (a) The Secretary of Veterans Affairs may convey, without 
consideration, to the City of Tuscaloosa, Alabama (in this section 
referred to as the ``City''), all right, title, and interest of the 
United States in and to a parcel of real property, including any 
improvements thereon, in the northwest quarter of section 28, township 
21 south, range 9 west, of Tuscaloosa 
County, Alabama, comprising a portion of the grounds of the Department 
of Veterans Affairs medical center, Tuscaloosa, Alabama, and consisting 
of approximately 9.42 acres, more or less.
    (b) The conveyance under subsection (a) shall be subject to the 
condition that the City use the real property conveyed under that 
subsection in perpetuity solely for public park or recreational 
purposes.
    (c) The exact acreage and legal description of the real property to 
be conveyed pursuant to this section shall be determined by a survey 
satisfactory to the Secretary of Veterans Affairs. The cost of such 
survey shall be borne by the City.

[[Page 110 STAT. 2882]]

    (d) The Secretary of Veterans Affairs may require such additional 
terms and conditions in connection with the conveyance under this 
section as the Secretary considers appropriate to protect the interests 
of the United States.

                                TITLE II

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                            Housing Programs

            development of additional new subsidized housing

    For assistance for the purchase, construction, acquisition, or 
development of additional public and subsidized housing units for low 
income families under the United States Housing Act of 1937, as amended, 
(``the Act'' herein) (42 U.S.C. 1437), not otherwise provided for, 
$1,039,000,000, to remain available until expended: Provided, That of 
the total amount provided under this head, $645,000,000 shall be for 
capital advances, including amendments to capital advance contracts, for 
housing for the elderly, as authorized by section 202 of the Housing Act 
of 1959, as amended, and for project rental assistance, and amendments 
to contracts for project rental assistance, for supportive housing for 
the elderly under section 202(c)(2) of the Housing Act of 1959; and 
$194,000,000 shall be for capital advances, including amendments to 
capital advance contracts, for supportive housing for persons with 
disabilities, as authorized by section 811 of the Cranston-Gonzalez 
National Affordable Housing Act, and for project rental assistance, and 
amendments to contracts for project rental assistance, for supportive 
housing for persons with disabilities as authorized by section 811 of 
the Cranston-Gonzalez National Affordable Housing Act: Provided further, 
That the Secretary may designate up to 25 percent of the amounts 
earmarked under this paragraph for section 811 of the Cranston-Gonzalez 
National Affordable Housing Act for tenant-based assistance, as 
authorized under that section, including such authority as may be waived 
under the next proviso, which assistance is five years in duration: 
Provided further, That the Secretary may waive any provision of section 
202 of the Housing Act of 1959 and section 811 of the National 
Affordable Housing Act (including the provisions governing the terms and 
conditions of project rental assistance and tenant-based assistance) 
that the Secretary determines is not necessary to achieve the objectives 
of these programs, or that otherwise impedes the ability to develop, 
operate or administer projects assisted under these programs, and may 
make provision for alternative conditions or terms where appropriate: 
Provided further, That of the total amount provided under this head 
$200,000,000, shall be for the development or acquisition cost of public 
housing for Indian families, including amounts for housing under the 
mutual help homeownership opportunity program under section 202 of the 
Act (42 U.S.C. 1437bb).

                   prevention of resident displacement

    For activities and assistance to prevent the involuntary 
displacement of low-income families, the elderly and the disabled 
because of the loss of affordable housing stock, expiration of subsidy 
contracts (other than contracts for which amounts are provided

[[Page 110 STAT. 2883]]

under the head ``Preserving Existing Housing Investment'') or expiration 
of use restrictions, or other changes in housing assistance 
arrangements, and for other purposes, $4,640,000,000, to remain 
available until expended: Provided, That of the total amount provided 
under this head, $3,600,000,000 shall be for assistance under the United 
States Housing Act of 1937 (42 U.S.C. 1437) for use in connection with 
expiring or terminating section 8 subsidy contracts: Provided further, 
That the Secretary may determine not to apply section 8(o)(6)(B) of the 
Act to housing vouchers during fiscal year 1997: Provided further, That 
of the total amount provided under this head, $850,000,000 shall be for 
amendments to section 8 contracts other than contracts for projects 
developed under section 202 of the Housing Act of 1959, as amended: 
Provided further, That of the total amount provided under this head, 
$190,000,000 shall be for assistance under the United States Housing Act 
of 1937 (42 U.S.C. 1437) to relocate residents of properties (i) that 
are owned by the Secretary and being disposed of; (ii) that are 
discontinuing section 8 project-based assistance; or (iii) subject to 
special workout assistance team intervention compliance actions; for the 
conversion of section 23 projects to assistance under section 8; for 
funds to carry out the family unification program; and for the 
relocation of witnesses in connection with efforts to combat crime in 
public and assisted housing pursuant to a request from a law enforcement 
or prosecution agency: Provided further, That of the total amount made 
available under this head, $50,000,000 shall be made available to 
nonelderly disabled families affected by the designation of a public 
housing development under section 7 of such Act or the establishment of 
preferences in accordance with section 651 of the Housing and Community 
Development Act of 1992 (42 U.S.C. 1361l).

                 preserving existing housing investment

    For operating, maintaining, revitalizing, rehabilitating, 
preserving, and protecting existing housing developments for low-income 
families, and the elderly, and the disabled, $5,750,000,000, to remain 
available until expended: Provided, That of the total amount 
made available under this head, $2,900,000,000 shall be available for 
payments to public housing agencies and Indian housing authorities for 
operating subsidies for low-income housing projects as authorized by 
section 9 of the United States Housing Act of 1937, as amended (42 
U.S.C. 1437g): Provided further, That of the total amount made available 
under this head, $2,500,000,000 shall be available for modernization of 
existing public housing projects as authorized under section 14 of the 
United States Housing Act of 1937, as amended (42 U.S.C. 1437l), of 
which $10,000,000 shall be for carrying out activities under section 
6(j) of the United States Housing Act of 1937 and technical assistance 
for the inspection of public housing units, contract expertise, and 
training and technical assistance directly or indirectly, under grants, 
contracts, or cooperative agreements, to assist in the oversight and 
management of public and Indian housing (whether or not the housing is 
being modernized with assistance under this proviso) or tenant-based 
assistance, including, but not limited to, an annual resident survey, 
data collection and analysis, training and technical assistance by or to 
officials and employees of the department and of public housing agencies 
and to residents in connection with the public and Indian 
housing <<NOTE: 12 USC 4101 note.>> program: Provided further, That of 
the total amount pro

[[Page 110 STAT. 2884]]

vided under this head, $350,000,000 shall be available for use in 
conjunction with properties that are eligible for assistance under the 
Low-Income Housing Preservation and Resident Homeownership Act of 1990 
(LIHPRHA) or the Emergency Low Income Housing Preservation Act of 1987 
(ELIHPA), of which $75,000,000 shall be available for obligation until 
March 1, 1997 for projects (1) that are subject to a repayment or 
settlement agreement that was executed between the owner and the 
Secretary prior to September 1, 1995; (2) whose submissions were delayed 
as a result of their location in areas that were designated as a Federal 
disaster area in a Presidential Disaster Declaration; or (3) whose 
processing was, in fact or in practical effect, suspended, deferred, or 
interrupted for a period of twelve months or more because of differing 
interpretations, by the Secretary and an owner or by the Secretary and a 
State or local rent regulatory agency, concerning the timing of filing 
eligibility or the effect of a presumptively applicable State or local 
rent control law or regulation on the determination of preservation 
value under section 213 of LIHPRHA, as amended, if the owner of such 
project filed notice of intent to extend the low-income affordability 
restrictions of the housing, or transfer to a qualified purchaser who 
would extend such restrictions, on or before November 1, 1993; and of 
which, up to $100,000,000 may be used for rental assistance to prevent 
displacement of families residing in projects whose owners prepay their 
mortgages; and the balance of which shall be available from the 
effective date of this Act for sales to preferred priority purchasers: 
Provided further, That with the exception of projects described in 
clauses (1), (2), or (3) of the preceding proviso, the Secretary shall, 
notwithstanding any other provision of law, suspend further processing 
of preservation applications which have not heretofore received approval 
of a plan of action: Provided further, That $150,000,000 of amounts 
recaptured from interest reduction payment contracts for section 236 
projects whose owners prepay their mortgages during fiscal year 1997 
shall be rescinded: Provided further, That an owner of eligible low-
income housing may prepay the mortgage or request voluntary termination 
of a mortgage insurance contract, so long as said owner agrees not to 
raise rents for sixty days after such prepayment: Provided further, That 
such developments have been determined to have preservation equity at 
least equal to the lesser of $5,000 per unit or $500,000 per project or 
the equivalent of eight times the most recently published monthly fair 
market rent for the area in which the project is located as the 
appropriate unit size for all of the units in the eligible project: 
Provided further, That the Secretary may modify the regulatory agreement 
to permit owners and priority purchasers to retain rental income in 
excess of the basic rental charge in projects assisted under section 236 
of the National Housing Act, for the purpose of preserving the low- and 
moderate-income character of the housing: Provided further, That 
eligible low-income housing shall include properties meeting the 
requirements of this paragraph with mortgages that are held by a State 
agency as a result of a sale by the Secretary without insurance, which 
immediately before the sale would have been eligible low-income housing 
under LIHPRHA: Provided further, That notwithstanding any other 
provision of law, subject to the availability of appropriated funds, 
each low-income family, and moderate-income family who is elderly or 
disabled or is residing in a low-vacancy area, residing in the housing 
on the date of

[[Page 110 STAT. 2885]]

prepayment or voluntary termination, and whose rent, as a result of a 
rent increase occurring no later than one year after the date of the 
prepayment, exceeds 30 percent of adjusted income, shall be offered 
tenant-based assistance in accordance with section 8 or any successor 
program, under which the family shall pay no less for rent than it paid 
on such date: Provided further, That any family receiving tenant-based 
assistance under the preceding proviso may elect (1) to remain in the 
unit of the housing and if the rent exceeds the fair market rent or 
payment standard, as applicable, the rent shall be deemed to be the 
applicable standard, so long as the administering public housing agency 
finds that the rent is reasonable in comparison with rents charged for 
comparable unassisted housing units in the market or (2) to move from 
the housing and the rent will be subject to the fair market rent of the 
payment standard, as applicable, under existing program rules and 
procedures: Provided further, That the tenant-based assistance made 
available under the preceding two provisos are in lieu of benefits 
provided in subsections 223(b), (c), and (d) of the Low-Income Housing 
Preservation and Resident Homeownership Act of 1990: Provided further, 
That any sales shall be funded using the capital grant available under 
section 220(d)(3)(A) of LIHPRHA: Provided further, That any extensions 
shall be funded using a non-interest-bearing capital (direct) loan by 
the Secretary not in excess of the amount of the cost of rehabilitation 
approved in the plan of action plus 65 percent of the property's 
preservation equity and under such other terms and conditions as the 
Secretary may prescribe: Provided further, That any capital grant shall 
be limited to seven times, and any capital loan limited to six times, 
the annual fair market rent for the project, as determined 
using the fair market rent for fiscal year 1997 for the area in which 
the project is located, using the appropriate apartment sizes and mix in 
the eligible project, except where, upon the request of a priority 
purchaser, the Secretary determines that a greater amount is necessary 
and appropriate to preserve low-income housing: Provided further, That 
section 241(f) of the National Housing Act <<NOTE: 12 USC 1715z-6.>>  is 
repealed and insurance under such section shall not be offered as an 
incentive under LIHPRHA and ELIHPA: Provided further, That up to 
$10,000,000 of the amount of $350,000,000 made available by a preceding 
proviso in this paragraph may be used at the discretion of the Secretary 
to reimburse owners of eligible properties for which plans of action 
were submitted prior to the effective date of this Act, but were not 
executed for lack of available funds, with such reimbursement available 
only for documented costs directly applicable to the preparation of the 
plan of action as determined by the Secretary, and shall be made 
available on terms and conditions to be established by the Secretary: 
Provided further, That, notwithstanding any other provision of law, a 
priority purchaser may utilize assistance under the HOME Investment 
Partnerships Act or the Low Income Housing Tax Credit: Provided further, 
That projects with approved plans of action which exceed the limitations 
on eligibility for funding imposed by this Act may submit revised plans 
of action which conform to these limitations by March 1, 1997, and 
retain the priority for funding otherwise applicable from the original 
date of approval of their plan of action, subject to securing any 
additional necessary funding commitments by August 1, 1997.

[[Page 110 STAT. 2886]]

          revitalization of severely distressed public housing

    For grants to public housing agencies for assisting in the 
demolition of obsolete public housing projects or portions thereof, the 
revitalization (where appropriate) of sites (including remaining public 
housing units) on which such projects are located, replacement housing 
which will avoid or lessen concentrations of very low-income families, 
and tenant-based assistance in accordance with section 8 of the United 
States Housing Act of 1937; and for providing replacement housing and 
assisting tenants to be displaced by the demolition, $550,000,000, to 
remain available until expended, of which the Secretary may use up to 
$2,500,000 for technical assistance, to be provided directly or 
indirectly by grants, contracts or cooperative agreements, including 
training and cost of necessary travel for participants in such training, 
by or to officials and 
employees of the Department and of public housing agencies and to 
residents: Provided, That no funds appropriated in this title shall be 
used for any purpose that is not provided for herein, in the Housing Act 
of 1937, in the Appropriations Acts for Veterans Affairs, Housing and 
Urban Development, and Independent Agencies, for the fiscal years 1993, 
1994, and 1995, and the Omnibus Consolidated Rescissions and 
Appropriations Act of 1996: Provided further, That none of such funds 
shall be used directly or indirectly by granting competitive advantage 
in awards to settle litigation or pay judgments, unless expressly 
permitted herein: Provided 
further, That, notwithstanding any other provision of law, the funds 
made available to the Housing Authority of New Orleans under HOPE VI for 
purposes of Desire Homes, shall not be obligated or expended for on-site 
construction until an independent third party has determined whether the 
site is appropriate.

             drug elimination grants for low-income housing

                      (including transfer of funds)

    For grants to public and Indian housing agencies for use in 
eliminating crime in public housing projects authorized by 42 U.S.C. 
11901-11908, for grants for federally assisted low-income housing 
authorized by 42 U.S.C. 11909, and for drug information clearinghouse 
services authorized by 42 U.S.C. 11921-11925, $290,000,000, to remain 
available until expended, $10,000,000 of which shall be for grants, 
technical assistance, contracts and other assistance training, program 
assessment, and execution for or on behalf of public housing agencies 
and resident organizations (including the cost of necessary travel for 
participants in such training), $5,000,000 of which shall be used in 
connection with efforts to combat violent crime in public and assisted 
housing under the Operation Safe Home Program administered by the 
Inspector General of the Department of Housing and Urban Development, 
and $5,000,000 of which shall be provided to the Office of Inspector 
General for Operation Safe Home: Provided, That the term ``drug-related 
crime'', as defined in 42 U.S.C. 11905(2), shall also include other 
types of crime as determined by the Secretary: Provided further, That 
notwithstanding section 5130(c) of the Anti-Drug Abuse Act of 1988 (42 
U.S.C. 11909(c)), the Secretary may determine not to use any such funds 
to provide public housing youth sports grants.

[[Page 110 STAT. 2887]]

           indian housing loan guarantee fund program account

    For the cost of guaranteed loans, as authorized by section 184 of 
the Housing and Community Development Act of 1992 (106 Stat. 3739), 
$3,000,000: Provided, That such costs, including the costs of modifying 
such loans, shall be as defined in section 502 of the Congressional 
Budget Act of 1974, as amended: Provided further, That these funds are 
available to subsidize total loan principal, any part of which is to be 
guaranteed, not to exceed $36,900,000.

                   Community Planning and Development

                 community development block grants fund

                      (including transfer of funds)

    For grants to States and units of general local government and for 
related expenses, not otherwise provided for, to carry out a community 
development grants program as authorized by title I of the Housing and 
Community Development Act of 1974, as amended (the ``Act'' herein) (42 
U.S.C. 5301), $4,600,000,000, to remain available until September 30, 
1999, of which $67,000,000 shall be for grants to Indian tribes 
notwithstanding section 106(a)(1) of the Act: Provided, That $2,100,000 
shall be available as a grant to the Housing Assistance Council, 
$1,500,000 shall be available as a grant to the National American Indian 
Housing Council, and $49,000,000 shall be available for grants pursuant 
to section 107 of such Act, including up to $14,000,000 for the 
development and operation of a management information system: Provided 
further, That not to exceed 20 percent of any grant made with funds 
appropriated herein (other than a grant made available under the 
preceding proviso to the Housing Assistance Council or the National 
American Indian Housing Council, or a grant using funds under section 
107(b)(3) of the Housing and Community Development Act of 1974, as 
amended) shall be expended for ``Planning and Management Development'' 
and ``Administration'' as defined in regulations promulgated by the 
Department: Provided <<NOTE: 42 USC 5305 note.>>  further, That for 
fiscal year 1997 and thereafter, section 105(a)(25) of such Act, shall 
continue to be effective and the termination and conforming provisions 
of section 907(b)(2) of the Cranston-Gonzalez National Affordable 
Housing Act shall not be effective: Provided further, That section 
916(f) of the Cranston-Gonzalez National Affordable Housing 
Act <<NOTE: 42 USC 5306 note.>>  is repealed.

    Of the amount provided under this heading, the Secretary of Housing 
and Urban Development may use up to $60,000,000 for grants to public 
housing agencies (including Indian housing authorities), nonprofit 
corporations, and other appropriate entities for a supportive services 
program to assist residents of public and assisted housing, former 
residents of such housing receiving tenant-based assistance under 
section 8 of such Act (42 U.S.C. 1437f), and other low-income families 
and individuals to become self-sufficient: Provided, That the program 
shall provide supportive services, principally for the benefit of public 
housing residents, to the elderly and the disabled, and to families with 
children where the head of household would benefit from the receipt of 
supportive services and is working, seeking work, or is preparing for 
work by participating in job training or educational programs: Provided 
further, That

[[Page 110 STAT. 2888]]

the supportive services may include congregate services for the elderly 
and disabled, service coordinators, and coordinated educational, 
training, and other supportive services, including academic skills 
training, job search assistance, assistance related to retaining 
employment, vocational and entrepreneurship development and support 
programs, transportation, and child care: Provided further, That the 
Secretary shall require applications to demonstrate firm commitments of 
funding or services from other sources: Provided further, That the 
Secretary shall select public and Indian housing agencies to receive 
assistance under this head on a competitive basis, taking into account 
the quality of the proposed program (including any innovative 
approaches, the extent of the proposed coordination of supportive 
services, the extent of commitments of funding or services from other 
sources, the extent to which the proposed program includes reasonably 
achievable, quantifiable goals for measuring performance under the 
program over a three-year period, the extent of success an agency has 
had in carrying out other comparable initiatives, and other appropriate 
criteria established by the Secretary): Provided further, That from the 
foregoing $60,000,000, up to $5,000,000 shall be available for the 
Tenant Opportunity Program, and up to $5,000,000 shall be available for 
the Moving to Work Demonstration for public housing families.
    Of the amount made available under this heading, notwithstanding any 
other provision of law, $20,000,000 shall be available for grants to 
entities managing or operating public housing developments, federally-
assisted multifamily-housing developments, or other multifamily-housing 
developments for low-income families supported by non-Federal 
governmental entities or similar housing developments supported by 
nonprofit private sources, to reimburse local law enforcement entities 
for additional police presence in and around such housing developments; 
to provide or augment such security services by other entities or 
employees of the recipient agency; to assist in the investigation and/or 
prosecution of drug related criminal activity in and around such 
developments; and to provide assistance for the development of capital 
improvements at such developments directly relating to the security of 
such developments: Provided, That such grants shall be made on a 
competitive basis as specified in section 102 of the HUD Reform Act.
    Of the amount made available under this heading, notwithstanding any 
other provision of law, $30,000,000 shall be available for youthbuild 
program activities authorized by subtitle D of title IV of the Cranston-
Gonzalez National Affordable Housing Act, as amended, and such 
activities shall be an eligible activity with respect to any funds made 
available under this heading.
    Of the amount made available under this heading, notwithstanding any 
other provision of law, $60,000,000 shall be available for the lead-
based paint hazard reduction program as authorized under sections 1011 
and 1053 of the Residential Lead-Based Hazard Reduction Act of 1992.
    For the cost of guaranteed loans, $31,750,000, as authorized by 
section 108 of the Housing and Community Development Act of 1974: 
Provided, That such costs, including the cost of modifying such loans, 
shall be as defined in section 502 of the Congressional Budget Act of 
1974, as amended: Provided further, That these funds are available to 
subsidize total loan principal, any part of which is to be guaranteed, 
not to exceed $1,500,000,000, notwithstanding any aggregate limitation 
on outstanding obligations

[[Page 110 STAT. 2889]]

garanteed in section 108(k) of the Housing and Community Development Act 
of 1974. In addition, for administrative expenses to carry out the 
guaranteed loan program, $675,000 which shall be transferred to and 
merged with the appropriation for departmental salaries and expenses.

                  home investment partnerships program

    For the HOME investment partnerships program, as authorized under 
title II of the Cranston-Gonzalez National Affordable Housing Act 
(Public Law 101-625), as amended, $1,400,000,000, to remain available 
until expended: Provided, That $21,000,000 shall be available for grants 
to Indian Tribes: Provided further, That up to 0.5 percent, but not less 
than $7,000,000, shall be available for the development and operation of 
a management information 
system: Provided further, That $15,000,000 shall be available for 
Housing Counseling under section 106 of the Housing and Urban 
Development Act of 1968.

                        homeless assistance funds

    For the emergency shelter grants program (as authorized under 
subtitle B of title IV of the Stewart B. McKinney Homeless Assistance 
Act (Public Law 100-77), as amended); the supportive housing program (as 
authorized under subtitle C of title IV of such Act); the section 8 
moderate rehabilitation single room occupancy program (as authorized 
under the United States Housing Act of 1937, as amended) to assist 
homeless individuals pursuant to section 441 of the Stewart B. McKinney 
Homeless Assistance Act; and the shelter plus care program (as 
authorized under subtitle F of title IV of such Act), $823,000,000, to 
remain available until expended.

               housing opportunities for persons with aids

                      (including transfer of funds)

    For carrying out the Housing Opportunities for Persons with AIDS 
program, as authorized by the AIDS Housing Opportunity Act (42 U.S.C. 
12901), $171,000,000, to remain available until expended: Provided, That 
any amounts previously appropriated for such program, and any related 
assets and liabilities, in the ``Annual contributions for assisted 
housing'' account, shall be transferred to and merged with amounts in 
this account.

                     Federal Housing Administration

             fha--mutual mortgage insurance program account

                     (including transfers of funds)

    During fiscal year 1997, commitments to guarantee loans to carry out 
the purposes of section 203(b) of the National Housing Act, as amended, 
shall not exceed a loan principal of $110,000,000,000: Provided, That 
during fiscal year 1997, the Secretary shall sell assigned mortgage 
notes having an unpaid principal balance of up to $2,000,000,000, which 
notes were originally insured under section 203(b) of the National 
Housing Act: Provided further, That the Secretary may use the amount of 
any negative subsidy

[[Page 110 STAT. 2890]]

resulting from the sale of such assigned mortgage notes during fiscal 
year 1997 for the purposes included under this heading.
    During fiscal year 1997, obligations to make direct loans to carry 
out the purposes of section 204(g) of the National Housing Act, as 
amended, shall not exceed $200,000,000: Provided, That the foregoing 
amount shall be for loans to nonprofit and governmental entities in 
connection with sales of single family real properties owned by the 
Secretary and formerly insured under section 203 of such Act.
    For administrative expenses necessary to carry out the guaranteed 
and direct loan program, $350,595,000, to be derived from the FHA-mutual 
mortgage insurance guaranteed loans receipt account, of which not to 
exceed $343,483,000 shall be transferred to the appropriation for 
departmental salaries and expenses; and of which not to exceed 
$7,112,000 shall be transferred to the appropriation for the Office of 
Inspector General.

              fha--general and special risk program account

                     (including transfers of funds)

    For the cost of guaranteed loans, as authorized by sections 238 and 
519 of the National Housing Act (12 U.S.C. 1715z-3 and 1735c), including 
the cost of loan guarantee modifications (as that term is defined in 
section 502 of the Congressional Budget Act of 1974, as amended) 
$85,000,000, to remain available until expended: Provided, That these 
funds are available to subsidize total loan principal, any part of which 
is to be guaranteed, of up to $17,400,000,000: Provided further, That 
during fiscal year 1997, the Secretary shall sell assigned notes having 
an unpaid principal balance of up to $2,500,000,000, which notes are 
held by the Secretary under the General Insurance and Special Risk 
Insurance funds: Provided further, That any amounts made available in 
any prior appropriations Act for the cost (as such term is defined in 
section 502 of the Congressional Budget Act of 1974) of guaranteed loans 
that are obligations of the funds established under section 238 or 519 
of the National Housing Act that have not been obligated or that are 
deobligated shall be available to the Secretary of Housing and Urban 
Development in connection with the making of such guarantees and shall 
remain available until expended, notwithstanding the expiration of any 
period of availability otherwise applicable to such amounts.
    Gross obligations for the principal amount of direct loans, as 
authorized by sections 204(g), 207(l), 238(a), and 519(a) of the 
National Housing Act, shall not exceed $120,000,000; of which not to 
exceed $100,000,000 shall be for bridge financing in connection with the 
sale of multifamily real properties owned by the Secretary and formerly 
insured under such Act; and of which not to exceed $20,000,000 shall be 
for loans to nonprofit and governmental entities in connection with the 
sale of single-family real properties owned by the Secretary and 
formerly insured under such Act.
    In addition, for administrative expenses necessary to carry out the 
guaranteed and direct loan programs, $207,470,000, of which $203,299,000 
shall be transferred to the appropriation for departmental salaries and 
expenses; and of which $4,171,000 shall

[[Page 110 STAT. 2891]]

be transferred to the appropriation for the Office of Inspector 
General.

                Government National Mortgage Association

 guarantees of mortgage-backed securities loan guarantee program account

                      (including transfer of funds)

    During fiscal year 1997, new commitments to issue guarantees to 
carry out the purposes of section 306 of the National Housing Act, as 
amended (12 U.S.C. 1721(g)), shall not exceed $110,000,000,000.
    For administrative expenses necessary to carry out the guaranteed 
mortgage-backed securities program, $9,383,000, to be derived from the 
GNMA-guarantees of mortgage-backed securities guaranteed loan receipt 
account, of which not to exceed $9,383,000 shall be transferred to the 
appropriation for departmental salaries and expenses.

                     Policy Development and Research

                         research and technology

    For contracts, grants, and necessary expenses of programs of 
research and studies relating to housing and urban problems, not 
otherwise provided for, as authorized by title V of the Housing and 
Urban Development Act of 1970, as amended (12 U.S.C. 1701z-1 et seq.), 
including carrying out the functions of the Secretary under section 
1(a)(1)(i) of Reorganization Plan No. 2 of 1968, $34,000,000, to remain 
available until September 30, 1998.

                   Fair Housing and Equal Opportunity

                         fair housing activities

    For contracts, grants, and other assistance, not otherwise provided 
for, as authorized by title VIII of the Civil Rights Act of 1968, as 
amended by the Fair Housing Amendments Act of 1988, and section 561 of 
the Housing and Community Development Act of 1987, as amended, 
$30,000,000, to remain available until September 30, 1998, of which 
$15,000,000 shall be to carry out activities pursuant to section 561. No 
funds made available under this heading shall be used to lobby the 
executive or legislative branches of the Federal Government in 
connection with a specific contract, grant or loan.

                      Management and Administration

                          salaries and expenses

                      (including transfer of funds)

    For necessary administrative and non-administrative expenses of the 
Department of Housing and Urban Development, not otherwise provided for, 
including not to exceed $7,000 for official reception and representation 
expenses, $976,840,000, of which

[[Page 110 STAT. 2892]]

$15,000,000 may be used for additional retraining, relocation, permanent 
change of station, and other activities related to downsizing only upon 
submission of a detailed and specific, multi-year downsizing plan to the 
Committees on Appropriations of the House of Representatives and the 
Senate, and of which $546,782,000 shall be provided from the various 
funds of the Federal Housing Administration, $9,383,000 shall be 
provided from funds of the Government National Mortgage Association, and 
$675,000 shall be provided from the Community Development Grants Program 
account.

                       office of inspector general

                      (including transfer of funds)

    For necessary expenses of the Office of Inspector General in 
carrying out the provisions of the Inspector General Act of 1978, as 
amended, $52,850,000, of which $11,283,000 shall be provided from the 
various funds of the Federal Housing Administration and $5,000,000 shall 
be transfered from the amount earmarked for Operation Safe Home in the 
Drug elimination grants for low income housing account.

             Office of Federal Housing Enterprise Oversight

                          salaries and expenses

                      (including transfer of funds)

    For carrying out the Federal Housing Enterprise Financial Safety and 
Soundness Act of 1992, $15,500,000, to remain available until expended, 
from the Federal Housing Enterprise Oversight Fund: Provided, That such 
amounts shall be collected by the Director as authorized by section 1316 
(a) and (b) of such Act, and deposited in the Fund under section 1316(f) 
of such Act.

                        administrative provisions

    Sec. 201. Extenders.--(a) Public Housing Funding Flexi-
bility.--Section 201(a)(2) of the Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agencies Appropriations 
Act, 1996 <<NOTE: Ante, p. 1321-277.>>  is amended by striking ``1996'' 
and inserting ``1997''.

    (b) One-for-One Replacement of Public and Indian 
Housing.--Section 1002(d) <<NOTE: 42 USC 1437c note.>>  of Public Law 
104-19 is amended by striking ``before September 30, 1996'' and 
inserting ``on or before September 30, 1997''.

    (c) Public and Assisted Housing Rents, Income Adjustments, and 
Preferences.--(1)(A) Section 402(a) of The Balanced Budget Downpayment 
Act, I is <<NOTE: Ante, p. 40.>>  amended--
            (i) by striking ``effective for fiscal year 1996 and no 
        later than October 30, 1995'' and inserting ``and subsection (f) 
        of this section, effective for fiscal year 1997'';
            (ii) in paragraphs (1), (2), and (4), by striking ``not less 
        than $25, and may require a minimum monthly rent of''; and
            (iii) in paragraph (3), by striking ``not less than $25 for 
        the unit, and may require a minimum monthly rent of''.

    (B) Section 230 <<NOTE: Ante, p. 1321-292.>>  of Public Law 104-134 
is hereby repealed.

[[Page 110 STAT. 2893]]

    (2) Section 402(f) of The Balanced Budget Downpayment Act, 
I <<NOTE: Ante, p. 43.>>  is amended by striking ``fiscal year 1996'' 
and inserting ``fiscal years 1996 and 1997''.

    (d) Applicability to IHAs.--In accordance with section 201(b)(2) of 
the United States Housing Act of 1937, the amendments made by 
subsections (a), (b), and (c) shall apply to public housing developed or 
operated pursuant to a contract between the Secretary of Housing and 
Urban Development and an Indian housing 
authority.
    (e) Streamlining Section 8 Tenant-Based Assistance.--Section 203(d) 
of the Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act, 
1996 <<NOTE: Ante, p. 1321-281.>>  is amended by striking ``fiscal year 
1996'' and inserting ``fiscal years 1996 and 1997''.

    (f) Section 8 Fair Market Rentals and Delay in Reissuance.--(1) The 
first sentence of section 403(a) of the Balanced Budget Downpayment Act, 
I, <<NOTE: Ante, p. 43.>>  is amended by striking ``1996'' and inserting 
``1997''.

    (2) Section 403(c) of such Act is amended--
            (A) by striking ``fiscal year 1996'' and inserting ``fiscal 
        years 1996 and 1997''; and
            (B) by inserting before the semicolon the following: ``for 
        assistance made available during fiscal year 1996 and October 1, 
        1997 for assistance made available during fiscal year 1997''.

    (g) Section 8 Rent Adjustments.--Section 8(c)(2)(A) of the United 
States Housing Act of 1937 <<NOTE: 42 USC 1437f.>>  is amended--
            (1) in the third sentence by inserting ``, fiscal year 1996 
        prior to April 26, 1996, and fiscal year 1997'' after ``1995'';
            (2) in the fourth sentence, by striking ``For'' and 
        inserting ``Except for assistance under the certificate program, 
        for'';
            (3) after the fourth sentence, by inserting the following 
        new sentence: ``In the case of assistance under the certificate 
        program, 0.01 shall be subtracted from the amount of the annual 
        adjustment factor (except that the factor shall not be reduced 
        to less than 1.0), and the adjusted rent shall not exceed the 
        rent for a comparable unassisted unit of similar quality, type, 
        and age in the market area.''; and
            (4) in the last sentence, by--
                    (A) striking ``sentence'' and inserting ``two 
                sentences''; and
                    (B) inserting ``, fiscal year 1996 prior to April 
                26, 1996, and fiscal year 1997'' after ``1995''.

    Sec. 202. <<NOTE: 42 USC 1437f note.>>  Administrative Fees.--
Notwithstanding section 8(q) of the United States Housing Act of 1937, 
as amended--

    (a) The Secretary shall establish fees for the cost of administering 
the certificate, voucher and moderate rehabilitation programs.
            (1)(A) For fiscal year 1997, the fee for each month for 
        which a dwelling unit is covered by an assistance contract shall 
        be 7.5 percent of the base amount, adjusted as provided herein, 
        in the case of an agency that, on an annual basis, is 
        administering a program of no more than 600 units, and 7 percent 
        of the base amount, adjusted as provided herein, for each 
        additional unit above 600.
            (B) The base amount shall be the higher of--
                    (i) the fair market rental for fiscal year 1993 for 
                a 2-bedroom existing rental dwelling unit in the market 
                area of the agency; and

[[Page 110 STAT. 2894]]

                    (ii) such fair market rental for fiscal year 1994, 
                but not more than 103.5 percent of the amount determined 
                under clause (i).
            (C) The base amount shall be adjusted to reflect changes in 
        the wage data or other objectively measurable data that reflect 
        the costs of administering the program during fiscal year 1996; 
        except that the Secretary may require that the base amount be 
        not less than a minimum amount and not more than a maximum 
        amount.
            (2) For subsequent fiscal years, the Secretary shall 
        publish <<NOTE: Federal Register, publication.>>  a notice in 
        the Federal Register, for each geographic area, establishing the 
        amount of the fee that would apply for the agencies 
        administering the program, based on changes in wage data or 
        other objectively measurable data that reflect the cost of 
        administering the program, as determined by the Secretary.
            (3) The Secretary may increase the fee if necessary to 
        reflect higher costs of administering small programs and 
        programs operating over large geographic areas.
            (4) The Secretary may decrease the fee for PHA-owned units.

    (b) Beginning in fiscal year 1997 and thereafter, the Secretary 
shall also establish reasonable fees (as determined by the Secretary) 
for--
            (1) the costs of preliminary expenses, in the amount of 
        $500, for a public housing agency, but only in the first year it 
        administers a tenant-based assistance program under the United 
        States Housing Act of 1937 and only if, immediately before the 
        effective date of this Act, it was not administering a tenant-
        based assistance program under the 1937 Act 
        (as in effect immediately before the effective date of this 
        Act), in connection with its initial increment of assistance 
        received;
            (2) the costs incurred in assisting families who experience 
        difficulty (as determined by the Secretary) in obtaining 
        appropriate housing under the program; and
            (3) extraordinary costs approved by the Secretary.

    Sec. 203. Single Family Assignment Program.--Section 407(c) of the 
Balanced Budget Downpayment Act, I (12 U.S.C. 1710 note), <<NOTE: Ante, 
p. 46.>>  is amended by striking ``October 1, 1996'' and inserting 
``October 1, 1997''.

    Sec. 204. <<NOTE: 12 USC 1715z-11a.>>  Flexible Authority.--During 
fiscal year 1997 and fiscal years thereafter, the Secretary may manage 
and dispose of multifamily properties owned by the Secretary and 
multifamily mortgages held by the Secretary on such terms and conditions 
as the Secretary may determine, notwithstanding any other provision of 
law.

    Sec. 205. Use of Available Funding for Homeownership.--Up to 
$20,000,000 of amounts of unobligated balances that are or become 
available from the Nehemiah Housing Opportunity Grant program, repealed 
under section 289(b) of the Cranston-Gonzalez National Affordable 
Housing Act, Public Law 101-625, shall be available for use for 
activities relating to promotion and implementation of homeownership in 
targeted geographic areas, as determined by the Secretary. Any grant or 
assistance made under this section shall be made in accordance with 
section 102 of the Department of Housing and Urban Development Reform 
Act of 1989 on a competitive basis.

[[Page 110 STAT. 2895]]

    Sec. 206. Debt Forgiveness.--The Secretary of Housing and Urban 
Development shall cancel the indebtedness of the Greene County Rural 
Health Center relating to a loan received under the Public Facility Loan 
program to establish the health center (Loan #Mis-22-PFL0096). The 
Greene County Rural Health Center is hereby relieved of all liability to 
the Federal Government for such loan and any fees and charges payable in 
connection with such loan.
    Sec. 207. Flexible Subsidy Fund.--From the fund established by 
section 236(g) of the National Housing Act, as amended, all uncommitted 
balances of excess rental charges as of September 30, 1996, and any 
collection during fiscal year 1997, shall be transferred, as authorized 
under such section, to the fund authorized under section 201(j) of the 
Housing and Community Development Amendments of 1978, as amended.
    Sec. 208. Rental Housing Assistance.--The limitation otherwise 
applicable to the maximum payments that may be required in any fiscal 
year by all contracts entered into under section 236 of the National 
Housing Act (12 U.S.C. 1715z-1) is reduced in fiscal year 1997 by not 
more than $2,000,000 in uncommitted balances of authorizations provided 
for this purpose in appropriations Acts.
    Sec. 209. D.C. Modernization Funding.--Notwithstanding the 
provisions of section 14(k)(5)(D) of the United States Housing Act of 
1937, the withheld modernization funds that became credited in fiscal 
years 1993, 1994, and 1995, due to the troubled status of the former 
Department of Public and Assisted Housing of the District of Columbia, 
shall be made available without diminution to its successor, the 
District of Columbia Housing Authority, at such time between the 
effective date of this Act and the end of fiscal year 1998 as the 
District of Columbia Housing Authority is no longer deemed ``mod-
troubled'' under section 6(j)(2)(A)(i) of such Act; after fiscal year 
1998, the District of Columbia Housing Authority shall become subject to 
the provisions of section 14(k)(5)(D) of such Act should it remain mod-
troubled.
    Sec. 210. (a) Financing Adjustment Factors.--Fifty per centum of the 
amounts of budget authority, or in lieu thereof 
50 per centum of the cash amounts associated with such budget authority, 
that are recaptured from projects described in section 1012(a) of the 
Stewart B. McKinney Homeless Assistance Amendments Act of 1988 (Public 
Law 100-628, 102 Stat. 3224, 3268) shall be rescinded, or in the case of 
cash, shall be remitted to the Treasury, and such amounts of budget 
authority or cash recaptured and not rescinded or remitted to the 
Treasury shall be used by State housing finance agencies or local 
governments or local housing agencies with projects approved by the 
Secretary of Housing and Urban Development for which settlement occurred 
after January 1, 1992, in accordance with such section.
    (b) In addition to amounts otherwise provided by this Act, $464,442 
is appropriated to the Department of Housing and Urban Development for 
payment to the Utah Housing Finance Agency, in lieu of amounts lost to 
such agency in bond refinancings during 1994, for its use in accordance 
with subsection (a).
    Sec. 211. <<NOTE: 42 USC 1437f note.>>  Section 8 Contract Renewal 
Authority.--(a) Definitions.--For purposes of this section--

[[Page 110 STAT. 2896]]

            (1) the term ``expiring contract'' means a contract for 
        project-based assistance under section 8 of the United States 
        Housing Act of 1937 that expires during fiscal year 1997;
            (2) the term ``family'' has the same meaning as in section 
        3(b) of the United States Housing Act of 1937;
            (3) the term ``multifamily housing project'' means a 
        property consisting of more than 4 dwelling units that is 
        covered in whole or in part by a contract for project-based 
        assistance under section 8 of the United States Housing Act of 
        1937;
            (4) the term ``owner'' has the same meaning as in section 
        8(f) of the United States Housing Act of 1937;
            (5) the term ``project-based assistance'' means rental 
        assistance under section 8 of the United States Housing Act of 
        1937 that is attached to a multifamily housing project;
            (6) the term ``public agency'' means a State housing finance 
        agency, a local housing agency, or other agency with a public 
        purpose and status;
            (7) the term ``Secretary'' means the Secretary of Housing 
        and Urban Development; and
            (8) the term ``tenant-based assistance'' has the same 
        meaning as in section 8(f) of the United States Housing Act of 
        1937.

    (b) Section 8 Contract Renewal Authority.--
            (1) In general.--Notwithstanding section 405(a) of the 
        Balanced Budget Downpayment Act, I, upon the request of the 
        owner of a multifamily housing project that is covered by an 
        expiring contract, the Secretary shall use amounts made 
        available for the renewal of assistance under section 8 of the 
        United States Housing Act of 1937 to renew the expiring contract 
        as project-based assistance for a period of not more than one 
        year, at rent levels that are equal to those under the expiring 
        contract as of the date on which the contract expires: Provided, 
        That those rent levels do not exceed 120 percent of the fair 
        market rent for the market area in which the project is located. 
        For an FHA-insured multifamily housing project with an expiring 
        contract at rent levels that exceed 120 percent of the fair 
        market rent for the market area, the Secretary shall provide, at 
        the request of the owner, section 8 project-based assistance, 
        for a period of not more than one year, at rent levels that do 
        not exceed 120 percent of the fair market rent.
            (2) Exemption for state and local housing agency projects.--
        Notwithstanding paragraph (1), upon the expiration of a contract 
        with rent levels that exceed the percentage described in that 
        paragraph, if the Secretary determines that the primary 
        financing or mortgage insurance for the multifamily housing 
        project that is covered by that expiring contract was provided 
        by a public agency, the Secretary shall, at the request of the 
        owner and the public agency, renew the expiring contract--
                    (A) for a period of not more than one year; and
                    (B) at rent levels that are equal to those under the 
                expiring contract as of the date on which the contract 
                expires.
            (3) Section 202, section 811, and section 515 projects.--
        Notwithstanding paragraph (1), for section 202 projects, section 
        811 projects and section 515 projects, upon the expiration of

[[Page 110 STAT. 2897]]

        a section 8 contract, the Secretary shall, at the request of the 
        owner, renew the expiring contract--
                    (A) for a period of not more than one year; and
                    (B) at rent levels that are equal to those under the 
                expiring contract as of the date on which the contract 
                expires.
            (4) Other contracts.--
                    (A) Participation in demonstration.--For a contract 
                covering an FHA-insured multifamily housing project that 
                expires during fiscal year 1997 with rent levels that 
                exceed the percentage described in paragraph (1) and 
                after notice to the tenants, the Secretary shall, at the 
                request of the owner of the project and after notice to 
                the tenants, include that multifamily housing project in 
                the demonstration program under section 212 of this Act. 
                The Secretary shall ensure that a multifamily housing 
                project with an expiring contract in fiscal year 1997 
                shall be allowed to be included in the demonstration.
                    (B) Effect of material adverse actions and 
                omissions.--Notwithstanding paragraph (1) or any other 
                provision of law, the Secretary shall not renew an 
                expiring contract if the Secretary determines that the 
                owner of the multifamily housing project has engaged in 
                material adverse financial or managerial actions or 
                omissions with regard to the project (or with regard to 
                other similar projects if the Secretary determines that 
                such actions or omissions constitute a pattern of 
                mismanagement that would warrant suspension or debarment 
                by the Secretary).
                    (C) Transfer of property.--For properties 
                disqualified from the demonstration program because of 
                actions by an owner or purchaser in accordance with 
                subparagraph (B), the Secretary shall establish 
                procedures to facilitate the voluntary sale or transfer 
                of the property, with a preference for tenant 
                organizations and tenant-endorsed community-based 
                nonprofit and public agency purchasers meeting such 
                reasonable qualifications as may be established by the 
                Secretary. The Secretary may include the transfer of 
                section 8 project-based assistance.
            (5) Tenant protections.--Any family residing in an assisted 
        unit in a multifamily housing project that is covered by an 
        expiring contract that is not renewed, shall be offered tenant-
        based assistance before the date on which the contract expires 
        or is not renewed.

    Sec. 212. <<NOTE: 42 USC 1437f note.>>  FHA Multifamily 
Demonstration Authority.--(a) In General.--
            (1) Repeal.--
                    (A) In general.--Section 210 of the Departments of 
                Veterans Affairs and Housing and Urban Development and 
                Independent Agencies Appropriations Act, 1996 (110 Stat. 
                1321) <<NOTE: Ante, p. 1321-285.>>  is repealed.
                    (B) Exception.--Notwithstanding the repeal under 
                subparagraph (A), amounts made available under section 
                210(f) the Departments of Veterans Affairs and Housing 
                and Urban Development and Independent Agencies 
                Appropriations Act, 1996 shall remain available for the 
                demonstration program under this section through the end 
                of fiscal year 1997.

[[Page 110 STAT. 2898]]

            (2) Savings provisions.--Nothing in this section shall be 
        construed to affect any commitment entered into before the date 
        of enactment of this Act under the demonstration program under 
        section 210 of the Departments of Veterans Affairs and Housing 
        and Urban Development and Independent Agencies Appropriations 
        Act, 1996.
            (3) Definitions.--For purposes of this section--
                    (A) the term ``demonstration program'' means the 
                program established under subsection (b);
                    (B) the term ``expiring contract'' means a contract 
                for project-based assistance under section 8 of the 
                United States Housing Act of 1937 that expires during 
                fiscal year 1997;
                    (C) the term ``family'' has the same meaning as in 
                section 3(b) of the United States Housing Act of 1937;
                    (D) the term ``multifamily housing project'' means a 
                property consisting of more than 4 dwelling units that 
                is covered in whole or in part by a contract for 
                project-based assistance;
                    (E) the term ``owner'' has the same meaning as in 
                section 8(f) of the United States Housing Act of 1937;
                    (F) the term ``project-based assistance'' means 
                rental assistance under section 8 of the United States 
                Housing Act of 1937 that is attached to a multifamily 
                housing project;
                    (G) the term ``Secretary'' means the Secretary of 
                Housing and Urban Development; and
                    (H) the term ``tenant-based assistance'' has the 
                same meaning as in section 8(f) of the United States 
                Housing Act of 1937.

    (b) Demonstration Authority.--
            (1) In general.--Subject to the funding limitation in 
        subsection (l), the Secretary shall administer a demonstration 
        program with respect to multifamily projects--
                    (A) whose owners agree to participate;
                    (B) with rents on units assisted under section 8 of 
                the United States Housing Act of 1937 that are, in the 
                aggregate, in excess of 120 percent of the fair market 
                rent of the market area in which the project is located; 
                and
                    (C) the mortgages of which are insured under the 
                National Housing Act.
            (2) Purpose.--The demonstration program shall be designed to 
        obtain as much information as is feasible on the economic 
        viability and rehabilitation needs of the multifamily housing 
        projects in the demonstration, to test various approaches for 
        restructuring mortgages to reduce the financial risk to the FHA 
        Insurance Fund while reducing the cost of section 8 subsidies, 
        and to test the feasibility and desirability of--
                    (A) ensuring, to the maximum extent practicable, 
                that the debt service and operating expenses, including 
                adequate reserves, attributable to such multifamily 
                projects can be supported at the comparable market rent 
                with or without mortgage insurance under the National 
                Housing Act and with or without additional section 8 
                rental subsidies;

[[Page 110 STAT. 2899]]

                    (B) utilizing section 8 rental assistance, while 
                taking into account the capital needs of the projects 
                and the need for adequate rental assistance to support 
                the low- and very low-income families residing in such 
                projects; and
                    (C) preserving low-income rental housing 
                affordability and availability while reducing the long-
                term cost of section 8 rental assistance.

    (c) Goals.--
            (1) In general.--The Secretary shall carry out the 
        demonstration program in a manner that will protect the 
        financial interests of the Federal Government through debt 
        restructuring and subsidy reduction and, in the least costly 
        fashion, address the goals of--
                    (A) maintaining existing affordable housing stock in 
                a decent, safe, and sanitary condition;
                    (B) minimizing the involuntary displacement of 
                tenants;
                    (C) taking into account housing market conditions;
                    (D) encouraging responsible ownership and management 
                of property;
                    (E) minimizing any adverse income tax impact on 
                property owners; and
                    (F) minimizing any adverse impacts on residential 
                neighborhoods and local communities.
            (2) Balance of competing goals.--In determining the manner 
        in which a mortgage is to be restructured or a subsidy reduced 
        under this subsection, the Secretary may balance competing goals 
        relating to individual projects in a manner that will further 
        the purposes of this section.

    (d) Participation Arrangements.--
            (1) In general.--In carrying out the demonstration program, 
        the Secretary may enter into participation arrangements with 
        designees, under which the Secretary may provide for the 
        assumption by designees (by delegation, by contract, or 
        otherwise) of some or all of the functions, obligations, 
        responsibilities and benefits of the Secretary.
            (2) Designees.--In entering into any arrangement under this 
        subsection, the Secretary shall select state housing finance 
        agencies, housing agencies or nonprofits (separately or in 
        conjunction with each other) to act as designees to the extent 
        such agencies are determined to be qualified by the Secretary. 
        In locations where there is no qualified State housing finance 
        agency, housing agency or nonprofit to act as a designee, the 
        Secretary may act as a designee. Each participation arrangement 
        entered into under this subsection shall include a designee as 
        the primary partner. Any organization selected by the Secretary 
        under this section shall have a long-term record of service in 
        providing low-income housing and meet standards of fiscal 
        responsibility, as determined by the Secretary.
            (3) Designee partnerships.--For purposes of any 
        participation arrangement under this subsection, designees are 
        encouraged to develop partnerships with each other, and to 
        contract or subcontract with other entities, including--
                    (A) public housing agencies;
                    (B) financial institutions;
                    (C) mortgage servicers;
                    (D) nonprofit and for-profit housing organizations;

[[Page 110 STAT. 2900]]

                    (E) the Federal National Mortgage Association;
                    (F) the Federal Home Loan Mortgage Corporation;
                    (G) Federal Home Loan Banks; and
                    (H) other State or local mortgage insurance 
                companies or bank lending consortia.

    (e) Long-Term Affordability.--
            (1) In general.--After the renewal of a section 8 contract 
        pursuant to a restructuring under this section, the owner shall 
        accept each offer to renew the section 8 contract, for a period 
        of 20 years from the date of the renewal under the 
        demonstration, if the offer to renew is on terms and conditions, 
        as agreed to by the Secretary or designee and the owner under a 
        restructuring.
            (2) Affordability requirements.--Except as otherwise 
        provided by the Secretary, in exchange for any mortgage 
        restructuring under this section, a project shall remain 
        affordable for a period of not less than 20 years. Affordability 
        requirements shall be determined in accordance with guidelines 
        established by the Secretary or designee. The Secretary or 
        designee may waive these requirements for good cause.

(f) Procedures.--
            (1) Notice of participation in demonstration.--Not later 
        than 45 days before the date of expiration of an expiring 
        contract (or such later date, as determined by the Secretary, 
        for good cause), the owner of the multifamily housing project 
        covered by that expiring contract shall notify the Secretary or 
        designee and the residents of the owner's intent to participate 
        in the demonstration program.
            (2) Demonstration contract.--Upon receipt of a notice under 
        paragraph (1), the owner and the Secretary or designee shall 
        enter into a demonstration contract, which shall provide for 
        initial section 8 project-based rents at the same rent levels as 
        those under the expiring contract or, if practical, the budget-
        based rent to cover debt service, reasonable operating expenses 
        (including reasonable and appropriate services), and a 
        reasonable return to the owner, as determined solely by the 
        Secretary. The demonstration contract shall be for the minimum 
        term necessary for the rents and mortgages of the multifamily 
        housing project to be restructured under the demonstration 
        program, but shall not be for a period of time to exceed 180 
        days, unless extended for good cause by the Secretary.

    (g) Project-Based Section 8.--The Secretary shall renew all expiring 
contracts under the demonstration as section 8 project-based contracts, 
for a period of time not to exceed one year, unless otherwise provided 
under subsection (h).
    (h) Demonstration Actions.--
            (1) Demonstration actions.--For purposes of carrying out the 
        demonstration program, and in order to ensure that contract 
        rights are not abrogated, subject to such third party consents 
        as are necessary (if any), including consent by the Government 
        National Mortgage Association if it owns a mortgage insured by 
        the Secretary, consent by an issuer under the mortgage-backed 
        securities program of the Association, subject to the 
        responsibilities of the issuer to its security holders and the 
        Association under such program, and consent by parties to any 
        contractual agreement which the Secretary proposes to modify or 
        discontinue, the Secretary or, except with respect

[[Page 110 STAT. 2901]]

        to subparagraph (B), designee, subject to the funding limitation 
        in subsection (l), shall take not less than one of the actions 
        specified in subparagraphs (G), (H), and (I) and may take any of 
        the following actions:
                    (A) Removal of restrictions.--
                          (i) In general.--Consistent with the purposes 
                      of this section, subject to the agreement of the 
                      owner of the project and after consultation with 
                      the tenants of the project, the Secretary or 
                      designee may remove, relinquish, extinguish, 
                      modify, or agree to the removal of any mortgage, 
                      regulatory agreement, project-based assistance 
                      contract, use agreement, or restriction that had 
                      been imposed or required by the Secretary, 
                      including restrictions on distributions of income 
                      which the Secretary or designee determines would 
                      interfere with the ability of the project to 
                      operate without above-market rents.
                          (ii) Accumulated residual receipts.--The 
                      Secretary or designee may require an owner of a 
                      property assisted under the section 8 new 
                      construction/substantial rehabilitation program 
                      under the United States Housing Act of 1937 to 
                      apply any accumulated residual receipts toward 
                      effecting the purposes of this section.
                    (B) Reinsurance.--With respect to not more than 
                5,000 units within the demonstration during fiscal year 
                1997, the Secretary may enter into contracts to purchase 
                reinsurance, or enter into participations or otherwise 
                transfer economic interest in contracts of insurance or 
                in the premiums paid, or due to be paid, on such 
                insurance, on such terms and conditions as the Secretary 
                may determine. Any contract entered into under this 
                paragraph shall require that any associated units be 
                maintained as low-income units for the life of the 
                mortgage, unless waived by the Secretary for good cause.
                    (C) Participation by third parties.--The Secretary 
                or designee may enter into such agreements, provide such 
                concessions, incur such costs, make such grants 
                (including grants to cover all or a portion of the 
                rehabilitation costs for a project) and other payments, 
                and provide other valuable consideration as may 
                reasonably be necessary for 
                owners, lenders, servicers, third parties, and other 
                entities to participate in the demonstration program. 
                The Secretary may establish performance incentives for 
                designees.
                    (D) Section 8 administrative fees.--Notwithstanding 
                any other provision of law, the Secretary may make fees 
                available from the section 8 contract renewal 
                appropriation to a designee for contract administration 
                under section 8 of the United States Housing Act of 1937 
                for purposes of any contract restructured or renewed 
                under the demonstration program.
                    (E) Full or partial payment of claim.--
                Notwithstanding any other provision of law, the 
                Secretary may make a full payment of claim or partial 
                payment of claim prior to default.
                    (F) Credit enhancement.--
                          (i) In general.--The Secretary or designee may 
                      provide FHA multifamily mortgage insurance, 
                      reinsur

[[Page 110 STAT. 2902]]

                      ance, or other credit enhancement alternatives, 
                      including retaining the existing FHA mortgage 
                      insurance on a restructured first mortgage at 
                      market value or using the multifamily risk-sharing 
                      mortgage programs, as provided under section 542 
                      of the Housing and Community Development Act of 
                      1992. Any limitations on the number of units 
                      available for mortgage insurance under section 542 
                      shall not apply to insurance issued for purposes 
                      of the demonstration program.
                          (ii) Maximum percentage.--During fiscal year 
                      1997, not more than 25 percent of the units in 
                      multifamily housing projects with expiring 
                      contracts in the demonstration, in the aggregate, 
                      may be restructured without FHA insurance, unless 
                      otherwise agreed to by the owner of a project.
                          (iii) Credit subsidy.--Any credit subsidy 
                      costs of providing mortgage insurance shall be 
                      paid from amounts made available under subsection 
                      (l).
                    (G) Mortgage restructuring.--
                          (i) In general.--The Secretary or designee may 
                      restructure mortgages to provide a restructured 
                      first mortgage to cover debt service and operating 
                      expenses (including a reasonable rate of return to 
                      the owner) at the market rent, and a second 
                      mortgage equal to the difference between the 
                      restructured first mortgage and the mortgage 
                      balance of the eligible multifamily housing 
                      project at the time of restructuring.
                          (ii) Credit subsidy.--Any credit subsidy costs 
                      of providing a second mortgage shall be paid from 
                      amounts made available under subsection (l).
                    (H) Debt forgiveness.--The Secretary or designee, 
                for good cause and at the request of the owner of a 
                multifamily housing project, may forgive at the time of 
                the restructuring of a mortgage any portion of a debt on 
                the project that exceeds the market value of the 
                project.
                    (I) Budget-based rents.--The Secretary or designee 
                may renew an expiring contract, including a contract for 
                a project in which operating costs exceed comparable 
                market rents, for a period of not more than one year, at 
                a budget-based rent that covers debt service, reasonable 
                operating expenses (including all reasonable and 
                appropriate services), and a reasonable rate of return 
                to the owner, as determined solely by the Secretary, 
                provided that the contract does not exceed the rent 
                levels under the expiring contract. The Secretary may 
                establish a preference under the demonstration program 
                for budget-based rents for unique housing projects, such 
                as projects designated for occupancy by elderly families 
                and projects in rural areas.
                    (J) Section 8 tenant-based assistance.--For not more 
                than 10 percent of units in multifamily housing projects 
                that have had their mortgages restructured in any fiscal 
                year under the demonstration, the Secretary or designee 
                may provide, with the agreement of an owner and in 
                consultation with the tenants of the housing, section 8 
                tenant-based assistance for some or all of the assisted 
                units in a multifamily housing project in lieu of 
                section

[[Page 110 STAT. 2903]]

                8 project-based assistance. Section 8 tenant-based 
                assistance may only be provided where the Secretary 
                determines and certifies that there is adequate 
                available and affordable housing within the local area 
                and that tenants will be able to use the section 8 
                tenant-based assistance successfully.
            (2) Offer and acceptance.--Notwithstanding any other 
        provision of law, an owner of a project in the demonstration 
        must accept any reasonable offer made by the Secretary or a 
        designee under this subsection. An owner may appeal the 
        reasonableness of any offer to the Secretary and the Secretary 
        shall respond within 30 days of the date of appeal with a final 
        offer. If the final offer is not acceptable, the owner may opt 
        out of the program.

    (i) Community and Tenant Input.--In carrying out this section, the 
Secretary shall develop procedures to provide appropriate and timely 
notice, including an opportunity for comment and timely access to all 
relevant information, to officials of the unit of general local 
government affected, the community in which the project is situated, and 
the tenants of the project.
    (j) Transfer of Property.--The Secretary shall establish procedures 
to facilitate the voluntary sale or transfer of multifamily housing 
projects under the demonstration to tenant organizations and tenant-
endorsed community-based nonprofit and public agency purchasers meeting 
such reasonable qualifications as may be established by the Secretary.
    (k) Limitation on Demonstration Authority.--The Secretary shall 
carry out the demonstration program with respect to mortgages not to 
exceed 50,000 units.
    (l) Funding.--In addition to the $30,000,000 made available under 
section 210 of the Departments of Veterans Affairs and Housing and Urban 
Development and Independent Agencies Appropriations Act, 1996 (110 Stat. 
1321), for the costs (including any credit subsidy costs associated with 
providing direct loans or mortgage insurance) of modifying and 
restructuring loans held or guaranteed by the Federal Housing 
Administration, as authorized under this section, $10,000,000 is hereby 
appropriated, to remain available until September 30, 1998.
    (m) Report to Congress.--
            (1) In general.--
                    (A) Quarterly reports.--Not less than every 3 
                months, the Secretary shall submit to the Congress a 
                report describing and assessing the status of the 
                projects in the demonstration program.
                    (B) Final report.--Not later than 6 months after the 
                end of the demonstration program, the Secretary shall 
                submit to the Congress a final report on the 
                demonstration program.
            (2) Contents.--Each report submitted under paragraph (1)(A) 
        shall include a description of--
                    (A) each restructuring proposal submitted by an 
                owner of a multifamily housing project, including a 
                description of the physical, financial, tenancy, and 
                market characteristics of the project;
                    (B) the Secretary's evaluation and reasons for each 
                multifamily housing project selected or rejected for 
                participation in the demonstration program;

[[Page 110 STAT. 2904]]

                    (C) the costs to the FHA General Insurance and 
                Special Risk Insurance funds;
                    (D) the subsidy costs provided before and after 
                restructuring;
                    (E) the actions undertaken in the demonstration 
                program, including the third-party arrangements made; 
                and
                    (F) the demonstration program's impact on the owners 
                of the projects, including any tax consequences.
            (3) Contents of final report.--The report submitted under 
        paragraph (1)(B) shall include--
                    (A) the required contents under paragraph (2); and
                    (B) any findings and recommendations for legislative 
                action.

     Sec. 213. Hawaiian Home Lands.--Section 282 of the 
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12832) is 
amended by adding at the end the following new sentence: ``The Secretary 
may waive this section in connection with the use of funds made 
available under this title on lands set aside under the Hawaiian Homes 
Commission Act, 1920 (42 Stat. 108).''.
    Sec. 214. Uses of Certain Assisted Housing Amounts.--(a) Transfer 
Authority.--The Secretary may transfer recaptured section 8 amounts from 
the Annual Contributions for Assisted Housing account under Public Law 
104-134 (approved April 26, 1996; 110 Stat. 1321, 1321-265) and prior 
laws to the accounts and for the purposes set forth in subsection (b). 
The amounts transferred under this section shall be made available for 
use as prescribed under this section notwithstanding section 8(bb) of 
the United States Housing Act of 1937.
    (b) Receiving Accounts.--
            (1) Prevention of resident displacement.--The Secretary may 
        transfer to the Prevention of Resident Displacement account an 
        amount up to $50,000,000, in addition to amounts in such 
        account, that may be used to extend, under existing terms and 
        conditions, existing project-based section 8 contracts in effect 
        before a Plan of Action was approved, so that these contracts 
        expire 5 years from the date on which funds were obligated for 
        the Plan of Action approved under the Low-Income Housing 
        Preservation and Resident Homeownership Act of 1990 or the 
        Emergency Low Income Housing Preservation Act of 1987. The 
        Secretary shall transfer all amounts that the Secretary 
        determines to be necessary for fiscal year 1997 for the purposes 
        of this paragraph before transferring any amounts under any 
        other paragraph in this subsection.
            (2) HOPWA.--The Secretary may transfer to the Housing 
        Opportunities for Persons with AIDS account up to $25,000,000, 
        for use in addition to amounts appropriated in such account.

    Sec. 215. Requirement for HUD To Maintain Public Notice and Comment 
Rulemaking.--The Secretary of Housing and Urban Development shall 
maintain all current requirements under part 10 of the Department of 
Housing and Urban Development's 
regulations (24 CFR part 10) with respect to the Department's policies 
and procedures for the promulgation and issuance of rules, including the 
use of public participation in the rulemaking process.
    Sec. 216. Community Development Block Grants.--Section 102(a)(6)(D) 
of the Housing and Community Development Act of 1974 (42 U.S.C. 
5302(a)(6)(D)) is amended--
            (1) in clause (iv), by striking ``or'' at the end;

[[Page 110 STAT. 2905]]

            (2) in clause (v), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following new clause:
                    ``(vi) has entered into a local cooperation 
                agreement with a metropolitan city that received 
                assistance under section 106 because of such 
                classification, and has elected under paragraph (4) to 
                have its population included with the population of the 
                county for the purposes of qualifying as an urban 
                county, except that to qualify as an urban county under 
                this clause, the county must--
                          ``(I) have a combined population of not less 
                      than 210,000, excluding any metropolitan city 
                      located in the county that is not relinquishing 
                      its metropolitan city classification, according to 
                      the 1990 decennial 
                      census of the Bureau of the Census of the 
                      Department of Commerce;
                          ``(II) including any metropolitan cities 
                      located in the county, have had a decrease in 
                      population of 10,061 from 1992 to 1994, according 
                      to the estimates of the Bureau of the Census of 
                      the Department of Commerce; and
                          ``(III) have had a Federal naval installation 
                      that was more than 100 years old closed by action 
                      of the Base Closure and Realignment Commission 
                      appointed for 1993 under the Base Closure and 
                      Realignment Act of 1990, directly resulting in a 
                      loss of employment by more than 7,000 Federal 
                      Government civilian employees and more than 15,000 
                      active duty military personnel, which naval 
                      installation was located within one mile of an 
                      enterprise community designated by the Secretary 
                      pursuant to section 1391 of the Internal Revenue 
                      Code of 1986, which enterprise community has a 
                      population of not less than 20,000, according to 
                      the 1990 decennial census of the Bureau of the 
                      Census of the Department of Commerce.''.

    Sec. 217. Fair Housing and Free Speech.--None of the amounts made 
available under this Act may be used during fiscal year 1997 to 
investigate or prosecute under the Fair Housing Act any otherwise lawful 
activity engaged in by one or more persons, including the filing or 
maintaining of a nonfrivolous legal action, that is engaged in solely 
for the purpose of achieving or preventing action by a government 
official or entity, or a court of competent jurisdiction.
    Sec. 218. Account Transition.--The amounts of obligated balances in 
appropriations accounts, as set forth in title II of the Departments of 
Veterans Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations Act, 1996 and prior Acts that are recaptured 
hereafter, to the extent not governed by the specific language in an 
account or provision in this Act, shall be held in reserve subject to 
reprogramming, notwithstanding any other provision of law.
    Sec. 219. Treatment of Certain Properties.--Notwithstanding any 
other provision of law, rehabilitation activities undertaken in projects 
using the Low-Income Housing Tax Credit allocated to developments in the 
city of New Brunswick, New Jersey, in 1991, are deemed to have met the 
requirements for rehabilitation in accordance with clause (ii) of the 
third sentence of section

[[Page 110 STAT. 2906]]

8(d)(2)(A) of the United States Housing Act of 1937, as in effect before 
the date of the enactment of this Act.
    Sec. 220. Amendment Relating to Community Development Assistance.--
Section 105(a) of the Housing and Community Development Act of 1974 (42 
U.S.C. 5305(a)(8)) is amended by striking ``through 1997'' and inserting 
``through 1998''.
    Sec. 221. Section 236 Program Amendments.--(a) Section 236(f)(1) of 
the National Housing Act (12 U.S.C. 1715z-1), as 
amended by section 405(d)(1) of The Balanced Budget Downpayment Act, 
I, <<NOTE: Ante, p. 44.>>  and by section 228(a) of The Balanced Budget 
Downpayment Act, II, is amended--
            (1) in the second sentence, by striking ``the lower of 
        (i)'';
            (2) in the second sentence, by striking ``or (ii) the fair 
        market rental established under section 8(c) of the United 
        States Housing Act of 1937 for the market area in which the 
        housing is located, or (iii) the actual rent (as determined by 
        the Secretary) paid for a comparable unit in comparable 
        unassisted housing in the market area in which the housing 
        assisted under this section is located,''; and
            (3) by inserting after the second sentence the following: 
        ``However, in the case of a project which contains more than 
        5,000 units, is subject to an interest reduction payments 
        contract, and is financed under a State or local program, the 
        Secretary may reduce the rental charge ceiling, but in no case 
        shall the rent be below basic rent. For plans of action approved 
        for Capital Grants under the Low-Income Housing Preservation and 
        Resident Homeownership Act of 1990 (LIHPRHA) or the Emergency 
        Low Income Housing Preservation Act of 1987 (ELIHPA), the rental 
        charge for each dwelling unit shall be at the basic rental 
        charge or such greater amount, not exceeding the lower of (i) 
        the fair market rental charge determined pursuant to this 
        paragraph, or (ii) the actual rent paid for a comparable unit in 
        comparable unassisted housing in the market area in which the 
        housing assisted under this section is located, as represents 30 
        percent of the tenant's adjusted income, but in no case shall 
        the rent be below basic rent.''.

    (b) Section 236(f) of the National Housing Act is amended by adding 
the following new paragraph at the end:
            ``(7) The Secretary shall determine whether and under what 
        conditions the provisions of this subsection shall apply to 
        mortgages sold by the Secretary on a negotiated basis.''.

    (c) Section 236(g) of the National Housing Act is amended to read as 
follows:
    ``The project owner shall, as required by the Secretary, accumulate, 
safeguard, and periodically pay the Secretary or such other entity as 
determined by the Secretary and upon such terms and conditions as the 
Secretary deems appropriate, all rental charges collected on a unit-by-
unit basis in excess of the basic rental charges. Unless otherwise 
directed by the Secretary, such excess charges shall be credited to a 
reserve fund to be used by the Secretary to make additional assistance 
payments as provided in paragraph (3) of subsection (f). However, a 
project owner with a mortgage insured under this section may retain some 
or all of such excess charges for project use if authorized by the 
Secretary and upon such terms and conditions as established by the 
Secretary.''.

                                TITLE III

[[Page 110 STAT. 2907]]

                          INDEPENDENT AGENCIES

                  American Battle Monuments Commission

                          salaries and expenses

    For necessary expenses, not otherwise provided for, of the American 
Battle Monuments Commission, including the acquisition of land or 
interest in land in foreign countries; purchases and repair of uniforms 
for caretakers of national cemeteries and monuments outside of the 
United States and its territories and possessions; rent of office and 
garage space in foreign countries; purchase (one for replacement only) 
and hire of passenger motor vehicles; and insurance of official motor 
vehicles in foreign countries, when required by law of such countries; 
$22,265,000, to remain available until expended: Provided, <<NOTE: 36 
USC 121b.>>  That where station allowance has been authorized by the 
Department of the Army for officers of the Army serving the Army at 
certain foreign stations, the same allowance shall be authorized for 
officers of the Armed Forces assigned to the Commission while serving at 
the same foreign stations, and this appropriation is hereby made 
available for the payment of such allowance: Provided further, That 
when <<NOTE: 36 USC 122.>> traveling on business of the Commission, 
officers of the Armed Forces serving as members or as Secretary of the 
Commission may be reimbursed for expenses as provided for civilian 
members of the Commission: Provided <<NOTE: 36 USC 122a.>>  
further, That the Commission shall reimburse other Government agencies, 
including the Armed Forces, for salary, pay, and allowances of personnel 
assigned to it.

                       Department of the Treasury

              Community Development Financial Institutions

    community development financial institutions fund program account

    For grants, loans, and technical assistance to qualifying community 
development lenders, and administrative expenses of the Fund, 
$45,000,000, to remain available until September 30, 1998, of 
which $8,000,000 may be used for the cost of direct loans, and up to 
$800,000 may be used for administrative expenses to carry out the direct 
loan program: Provided, That the cost of direct loans, including the 
cost of modifying such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974: Provided further, That not more than 
$19,400,000 of the funds made available under this heading may be used 
for programs and activities authorized in section 114 of the Community 
Development Banking and Financial Institutions Act of 1994.

                   Consumer Product Safety Commission

                          salaries and expenses

    For necessary expenses of the Consumer Product Safety Commission, 
including hire of passenger motor vehicles, services as authorized by 5 
U.S.C. 3109, but at rates for individuals not

[[Page 110 STAT. 2908]]

to exceed the per diem rate equivalent to the rate for GS-18, purchase 
of nominal awards to recognize non-Federal officials' contributions to 
Commission activities, and not to exceed $500 for official reception and 
representation expenses, $42,500,000.

             Corporation for National and Community Service

       national and community service programs operating expenses

                      (including transfer of funds)

    For necessary expenses for the Corporation for National and 
Community Service (referred to in the matter under this heading as the 
``Corporation'') in carrying out programs, activities, and initiatives 
under the National and Community Service Act of 1990 (referred to in the 
matter under this heading as the ``Act'') (42 U.S.C. 12501 et seq.), 
$400,500,000, of which $265,000,000 shall be available for obligation 
from September 1, 1997, through September 30, 1998: Provided, That not 
more than $25,000,000 shall be available for administrative expenses 
authorized under section 501(a)(4) of the Act (42 U.S.C. 12671(a)(4)): 
Provided further, That not more than $2,500 shall be for official 
reception and representation expenses: Provided further, That not more 
than $59,000,000, to remain available without fiscal year limitation, 
shall be transferred to the National Service Trust account for 
educational awards authorized under subtitle D of title I of the Act (42 
U.S.C. 12601 et seq.): Provided further, That not more than $215,000,000 
of the amount provided under this heading shall be available for grants 
under the National Service Trust program authorized under subtitle C of 
title I of the Act (42 U.S.C. 12571 et seq.) (relating to activities 
including the Americorps program), of which not more than $40,000,000 
may be used to administer, reimburse or support any national service 
program authorized under section 121(d)(2) of such Act (42 U.S.C. 
12581(d)(2)): Provided further, That not more than $5,500,000 of the 
funds made available under this heading shall be made available for the 
Points of Light Foundation for activities authorized under title III of 
the Act (42 U.S.C. 12661 et seq.): Provided further, That no funds shall 
be available for national service programs run by Federal agencies 
authorized under section 121(b) of such Act (42 U.S.C. 12571(b)): 
Provided further, That to the maximum extent feasible, funds 
appropriated in the preceding proviso shall be provided in a manner that 
is consistent with the recommendations of peer review panels in order to 
ensure that priority is given to programs that demonstrate quality, 
innovation, replicability, and sustainability: Provided further, That 
not more than $18,000,000 of the funds made available under this heading 
shall be available for the Civilian Community Corps authorized under 
subtitle E of title I of the Act (42 U.S.C. 12611 et seq.): Provided 
further, That not more than $43,000,000 shall be available for school-
based and community-based service-learning programs authorized under 
subtitle B of title I of the Act (42 U.S.C. 12521 et seq.): Provided 
further, That not more than $30,000,000 shall be available for quality 
and innovation activities authorized under subtitle H of title I of the 
Act (42 U.S.C. 12853 et seq.): Provided further, That not more than 
$5,000,000 shall be available for audits and other evaluations 
authorized under section 179 of the Act (42 U.S.C. 12639): Provided 
further, That

[[Page 110 STAT. 2909]]

no funds from any other appropriation, or from funds otherwise made 
available to the Corporation, shall be used to pay for personnel 
compensation and benefits, travel, or any other administrative expense 
for the Board of Directors, the Office of the Chief Executive Officer, 
the Office of the Managing Director, the Office of the Chief Financial 
Officer, the Office of National and Community Service Programs, the 
Civilian Community Corps, or any field office or staff of the 
Corporation working on the National and Community Service or Civilian 
Community Corps programs: Provided further, That to the maximum extent 
practicable, the Corporation shall increase significantly the level of 
matching funds and in-kind contributions provided by the private sector, 
shall expand significantly the number of educational awards provided 
under subtitle D of title I, and shall reduce the total Federal costs 
per participant in all programs.

                       office of inspector general

    For necessary expenses of the Office of Inspector General in 
carrying out the provisions of the Inspector General Act of 1978, as 
amended, $2,000,000.

                        Court of Veterans Appeals

                          salaries and expenses

    For necessary expenses for the operation of the United States Court 
of Veterans Appeals as authorized by 38 U.S.C. sections 7251-7292, 
$9,229,000, of which $700,000, to remain available until September 30, 
1998, shall be available for the purpose of providing financial 
assistance as described, and in accordance with the process and 
reporting procedures set forth, under this heading in Public Law 102-
229.

         Department of Defense--Civil Cemeterial Expenses, Army

                          salaries and expenses

    For necessary expenses, as authorized by law, for maintenance, 
operation, and improvement of Arlington National Cemetery and Soldiers' 
and Airmen's Home National Cemetery, including the purchase of one 
passenger motor vehicle for replacement only, and not to exceed $1,000 
for official reception and representation expenses, $11,600,000, to 
remain available until expended.

                     Environmental Protection Agency

                         science and technology

    For science and technology, including research and development 
activities, which shall include research and development activities 
under the Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980 (CERCLA), as amended; necessary expenses for 
personnel and related costs and travel expenses, including uniforms, or 
allowances therefore, as authorized by 5 U.S.C. 5901-5902; services as 
authorized by 5 U.S.C. 3109, but at rates for individuals not to exceed 
the per diem rate equivalent to the rate for GS-18; procurement of 
laboratory equipment and supplies;

[[Page 110 STAT. 2910]]

other operating expenses in support of research and development; 
construction, alteration, repair, rehabilitation, and renovation of 
facilities, not to exceed $75,000 per project, $542,000,000, which shall 
remain available until September 30, 1998.

                  environmental programs and management

    For environmental programs and management, including necessary 
expenses, not otherwise provided for, for personnel and related costs 
and travel expenses, including uniforms, or allowances therefore, as 
authorized by 5 U.S.C. 5901-5902; services as authorized by 5 U.S.C. 
3109, but at rates for individuals not to exceed the per diem rate 
equivalent to the rate for GS-18; hire of passenger motor vehicles; 
hire, maintenance, and operation of aircraft; purchase of reprints; 
library memberships in societies or associations which issue 
publications to members only or at a price to members lower than to 
subscribers who are not members; construction, alteration, repair, 
rehabilitation, and renovation of facilities, not to exceed $75,000 per 
project; and not to exceed $6,000 for official reception and 
representation expenses, $1,710,000,000, which shall remain available 
until September 30, 1998.

                       office of inspector general

    For necessary expenses of the Office of Inspector General in 
carrying out the provisions of the Inspector General Act of 1978, as 
amended, and for construction, alteration, repair, rehabilitation, and 
renovation of facilities, not to exceed $75,000 per project, 
$28,500,000.

                        buildings and facilities

    For construction, repair, improvement, extension, alteration, and 
purchase of fixed equipment or facilities of, or for use by, the 
Environmental Protection Agency, $87,220,000, to remain available until 
expended: Provided, That EPA is authorized to establish and construct a 
consolidated research facility at Research Triangle Park, North 
Carolina, at a maximum total construction cost of $232,000,000, and to 
obligate such monies as are made available by this Act for this purpose: 
Provided further, That EPA is authorized to construct such facility 
through multi-year contracts incrementally funded through appropriations 
hereafter made available for this project: Provided further, That, 
notwithstanding the previous provisos, for monies obligated pursuant to 
this authority, EPA may not obligate monies in excess of those provided 
in advance in annual appropriations, and such contracts shall clearly 
provide for this limitation.

                      hazardous substance superfund

                      (including transfer of funds)

    For necessary expenses to carry out the Comprehensive Environmental 
Response, Compensation, and Liability Act of 1980 (CERCLA), as amended, 
including sections 111 (c)(3), (c)(5), (c)(6), and (e)(4) (42 U.S.C. 
9611), and for construction, alteration, repair, rehabilitation, and 
renovation of facilities, not to exceed $75,000 per project; not to 
exceed $1,394,245,000 (of which $100,000,000

[[Page 110 STAT. 2911]]

shall not become available until September 1, 1997), to remain available 
until expended, consisting of $1,144,245,000 as authorized by section 
517(a) of the Superfund Amendments and Reauthorization Act of 1986 
(SARA), as amended by Public Law 101-508, and $250,000,000 as a payment 
from general revenues to the Hazardous Substance Superfund as authorized 
by section 517(b) of SARA, as amended by Public Law 101-508: Provided, 
That funds appropriated under this heading may be allocated to other 
Federal agencies in accordance with section 111(a) of CERCLA: Provided 
further, That $11,000,000 of the funds appropriated under this heading 
shall be transferred to the ``Office of Inspector General'' 
appropriation to remain available until September 30, 1997: 
Provided further, That notwithstanding section 111(m) of CERCLA or any 
other provision of law, not to exceed $64,000,000 of the funds 
appropriated under this heading shall be available to the Agency for 
Toxic Substances and Disease Registry to carry out activities described 
in sections 104(i), 111(c)(4), and 111(c)(14) of CERCLA and section 
118(f) of the Superfund Amendments and Reauthorization Act of 1986: 
Provided further, That $35,000,000 of the funds appropriated under this 
heading shall be transferred to the ``Science and technology'' 
appropriation to remain available until September 30, 1998: Provided 
further, That none of the funds appropriated under this heading shall be 
available for the Agency for Toxic Substances and Disease Registry to 
issue in excess of 40 toxicological profiles pursuant to section 104(i) 
of CERCLA during fiscal year 1997.

               leaking underground storage tank trust fund

                      (including transfer of funds)

    For necessary expenses to carry out leaking underground storage tank 
cleanup activities authorized by section 205 of the Superfund Amendments 
and Reauthorization Act of 1986, and for construction, alteration, 
repair, rehabilitation, and renovation of facilities, not to exceed 
$75,000 per project, $60,000,000, to remain available until expended: 
Provided, That no more than $7,000,000 shall be available for 
administrative expenses: Provided further, That $577,000 shall be 
transferred to the ``Office of Inspector General'' appropriation to 
remain available until September 30, 1997.

                           oil spill response

                      (including transfer of funds)

    For expenses necessary to carry out the Environmental Protection 
Agency's responsibilities under the Oil Pollution Act of 1990, 
$15,000,000, to be derived from the Oil Spill Liability trust fund, and 
to remain available until expended: Provided, That not more than 
$8,000,000 of these funds shall be available for administrative 
expenses.

                   state and tribal assistance grants

    For environmental programs and infrastructure assistance, including 
capitalization grants for State revolving funds and performance 
partnership grants, $2,875,207,000, to remain available until expended, 
of which $1,900,000,000 shall be for making

[[Page 110 STAT. 2912]]

capitalization grants for State revolving funds to support water 
infrastructure financing; $100,000,000 for architectural, engineering, 
planning, design, construction and related activities in connection with 
the construction of high priority water and wastewater facilities in the 
area of the United States-Mexico Border, after consultation with the 
appropriate border commission; $50,000,000 for grants to the State of 
Texas, which shall be matched by an equal amount of State funds from 
State resources, for the purpose of improving wastewater treatment for 
colonias; $15,000,000 for grants to the State of Alaska subject to an 
appropriate cost share as determined by the Administrator, to address 
water supply and wastewater infrastructure needs of rural and Alaska 
Native Villages; $136,000,000 for making grants for the construction of 
wastewater and water treatment facilities and the development of 
groundwater in accordance with the terms and conditions specified for 
such grants in the conference report and joint explanatory statement of 
the committee of conference accompanying this Act (H.R. 3666); and 
$674,207,000 for grants to States and federally recognized tribes for 
multi-media or single media pollution prevention, control and abatement 
and related activities pursuant to the provisions set forth under this 
heading in Public Law 104-134: Provided, That, from funds appropriated 
under this heading, the Administrator may make grants to federally 
recognized Indian governments for the development of multi-media 
environmental programs: Provided further, <<NOTE: 33 USC 128 note.>>  
That notwithstanding any other provision of law, beginning in fiscal 
year 1997 the Administrator may make grants to States, from funds 
available for obligation in the State under title II of the Federal 
Water Pollution Control Act, as amended, for administering the 
completion and closeout of the State's construction grants program, 
based on a budget annually negotiated with the State: Provided further, 
That of the $1,900,000,000 for capitalization grants for State revolving 
funds to support water infrastructure financing, $1,275,000,000 shall be 
for drinking water State revolving funds: Provided further, That the 
funds made available in Public Law 103-327 for a grant to the City of 
Bangor, Maine, in accordance with House Report 103-715, shall be 
available for a grant to that city for meeting combined sewer overflow 
requirements: Provided further, That, notwithstanding any other 
provision of law, a State that did not receive, in fiscal year 1996, 
grants under title VI of the Federal Water Pollution Control Act, as 
amended, that obligated all the funds allotted to it from the 
$725,000,000 that became available for that purpose on August 1, 1996, 
may receive reallotted funds from the fiscal year 1996 appropriation, 
provided the State receives such grants in fiscal year 1997.

                          working capital fund

                      (including transfer of funds)

    There is hereby established <<NOTE: 31 USC 501 note.>>  in the 
Treasury a franchise fund pilot to be known as the ``Working capital 
fund'', as authorized by section 403 of Public Law 103-356, to be 
available as provided in such section for expenses and equipment 
necessary for the maintenance and operation of such administrative 
services as the Administrator determines may be performed more 
advantageously as central services: Provided, That any inventories, 
equipment, and other assets pertaining to the services to be provided by 
such

[[Page 110 STAT. 2913]]

fund, either on hand or on order, less the related liabilities or unpaid 
obligations, and any appropriations made hereafter for the purpose of 
providing capital, shall be used to capitalize such fund: Provided 
further, That such fund shall be paid in advance from funds available to 
the Agency and other Federal agencies for which such centralized 
services are performed, at rates which will return in full all expenses 
of operation, including accrued leave, depreciation of fund plant and 
equipment, amortization of automated data processing (ADP) software and 
systems (either acquired or donated), and an amount necessary to 
maintain a reasonable operating reserve, as determined by the 
Administrator: Provided further, That such fund shall provide services 
on a competitive basis: Provided further, That an amount not to exceed 
four percent of the total annual income to such fund may be retained in 
the fund for fiscal year 1997 and each fiscal year thereafter, to remain 
available until expended, to be used for the acquisition of capital 
equipment and for the improvement and implementation of Agency financial 
management, ADP, and other support systems: Provided further, That no 
later than thirty days after the end of each fiscal year amounts in 
excess of this reserve limitation shall be transferred to the Treasury: 
Provided further, That such franchise fund pilot shall terminate 
pursuant to section 403(f) of Public Law 103-356.

                    Executive Office of the President

                 office of science and technology policy

    For necessary expenses of the Office of Science and Technology 
Policy, in carrying out the purposes of the National Science and 
Technology Policy, Organization, and Priorities Act of 1976 (42 U.S.C. 
6601 and 6671), hire of passenger motor vehicles, and services as 
authorized by 5 U.S.C. 3109, not to exceed $2,500 for official reception 
and representation expenses, and rental of conference rooms in the 
District of Columbia, $4,932,000.

  council on environmental quality and office of environmental quality

    For necessary expenses to continue functions assigned to the Council 
on Environmental Quality and Office of Environmental Quality pursuant to 
the National Environmental Policy Act of 1969, the Environmental Quality 
Improvement Act of 1970, and Reorganization Plan No. 1 of 1977, 
$2,436,000.

                   Federal Emergency Management Agency

                             disaster relief

    For necessary expenses in carrying out the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.), 
$1,320,000,000, and, notwithstanding 42 U.S.C. 5203, to become available 
for obligation on September 30, 1997, and remain available until 
expended: Provided, That notwithstanding any other provision of this 
paragraph, amounts appropriated herein shall be available for obligation 
on October 1, 1996: <<NOTE: Reports.>>  Provided further, That the 
Director of the Federal Emergency Management Agency (FEMA) shall submit 
to the appropriate committees of Congress within 120 days of enactment 
of this Act a comprehensive report

[[Page 110 STAT. 2914]]

on FEMA's plans to reduce disaster relief expenditures and improve 
managment controls on the Disaster Relief Fund.

             disaster assistance direct loan program account

    For the cost of direct loans, $1,385,000, as authorized by section 
319 of the Robert T. Stafford Disaster Relief and Emergency Assistance 
Act (42 U.S.C. 5121 et seq.): Provided, That such costs, 
including the cost of modifying such loans, shall be as defined in 
section 502 of the Congressional Budget Act of 1974, as amended: 
Provided further, That these funds are available to subsidize gross 
obligations for the principal amount of direct loans not to exceed 
$25,000,000.
    In addition, for administrative expenses to carry out the direct 
loan program, $548,000.

                          salaries and expenses

    For necessary expenses, not otherwise provided for, including hire 
and purchase of motor vehicles (31 U.S.C. 1343); uniforms, or allowances 
therefor, as authorized by 5 U.S.C. 5901-5902; 
services as authorized by 5 U.S.C. 3109, but at rates for individuals 
not to exceed the per diem rate equivalent to the rate for GS-18; 
expenses of attendance of cooperating officials and individuals at 
meetings concerned with the work of emergency preparedness; 
transportation in connection with the continuity of Government programs 
to the same extent and in the same manner as permitted the Secretary of 
a Military Department under 10 U.S.C. 2632; and not to exceed $2,500 for 
official reception and representation expenses, $167,500,000.

                       office of inspector general

    For necessary expenses of the Office of Inspector General in 
carrying out the provisions of the Inspector General Act of 1978, as 
amended, $4,673,000.

              emergency management planning and assistance

    For necessary expenses, not otherwise provided for, to carry out 
activities under the National Flood Insurance Act of 1968, as amended, 
and the Flood Disaster Protection Act of 1973, as amended (42 U.S.C. 
4001 et seq.), the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (42 U.S.C. 5121 et seq.), the Earthquake Hazards 
Reduction Act of 1977, as amended (42 U.S.C. 7701 et seq.), the Federal 
Fire Prevention and Control Act of 1974, as amended (15 U.S.C. 2201 et 
seq.), the Defense Production Act of 1950, as amended (50 U.S.C. App. 
2061 et seq.), sections 107 and 303 of the National Security Act of 
1947, as amended (50 U.S.C. 404-405), and Reorganization Plan No. 3 of 
1978, $206,701,000.

                   emergency food and shelter program

    To carry out an emergency food and shelter program pursuant to title 
III of Public Law 100-77, as amended, $100,000,000: Provided, That total 
administrative costs shall not exceed three and one-half percent of the 
total appropriation.

[[Page 110 STAT. 2915]]

                      national flood insurance fund

    For activities under the National Flood Insurance Act of 1968, the 
Flood Disaster Protection Act of 1973, and the National Flood Insurance 
Reform Act of 1994, not to exceed $20,981,000 for salaries and expenses 
associated with flood mitigation and flood insurance operations, and not 
to exceed $78,464,000 for flood mitigation, including up to $20,000,000 
for expenses under section 1366 of the National Flood Insurance Act, 
which amount shall be available until September 30, 1998. The first 
sentence of section 1376(c) of the National Flood Insurance Act of 1968, 
as amended (42 U.S.C. 4127(c)), is amended by striking all after ``this 
subsection'' and inserting ``such sums as may be necessary through 
September 30, 1997 for studies under this title.''. In fiscal year 1997, 
no funds in excess of (1) $47,000,000 for operating expenses, (2) 
$335,680,000 for agents' commissions and taxes, and (3) $35,000,000 for 
interest on Treasury borrowings shall be available from the National 
Flood Insurance Fund without prior notice to the Committees on 
Appropriations. For fiscal year 1997, flood insurance rates shall not 
exceed the level authorized by the National Flood Insurance Reform Act 
of 1994. Section 1319 of the National Flood Insurance Act of 1968, as 
amended (42 U.S.C. 4026), is amended by striking out September 30, 
1996.'' and inserting ``September 30, 1997.''.

                          working capital fund

    For the establishment <<NOTE: 31 USC 501 note.>>  of a working 
capital fund for the Federal Emergency Management Agency, to be 
available without fiscal year limitation, for expenses and equipment 
necessary for maintenance and operations of such administrative services 
as the Director determines may be performed more advantageously as 
central services: Provided, That any inventories, equipment, and other 
assets pertaining to the services to be provided by such fund, either on 
hand or on order, less the related liabilities or unpaid obligations, 
and any appropriations made hereafter for the purpose of providing 
capital, shall be used to capitalize such fund: Provided further, That 
such fund shall be reimbursed or credited with advance payments from 
applicable appropriations and funds of the Federal Emergency Management 
Agency, other Federal agencies, and other sources authorized by law for 
which such centralized services are performed, including supplies, 
materials, and services, at rates that will return in full all expenses 
of operation, including accrued leave, depreciation of fund plant and 
equipment, amortization of automated data processing (ADP) software and 
systems (either acquired or donated), and an amount necessary to 
maintain a reasonable operating reserve as determined by the Director: 
Provided further, That income of such fund may be retained, to remain 
available until expended, for purposes of the fund: Provided further, 
That fees for services shall be established by the Director at a level 
to cover the total estimated costs of providing such services, such fees 
to be deposited in the fund shall remain available until expended for 
purposes of the fund: Provided further, That such fund shall terminate 
in a manner consistent with section 403(f) of Public Law 103-356.

[[Page 110 STAT. 2916]]

                        administrative provision

    The Director <<NOTE: Regulations.>>  of the Federal Emergency 
Management Agency shall promulgate through rulemaking a methodology for 
assessment and collection of fees to be assessed and collected beginning 
in fiscal year 1997 applicable to persons subject to the Federal 
Emergency Management Agency's radiological emergency preparedness 
regulations. The aggregate charges assessed pursuant to this section 
during fiscal year 1997 shall approximate, but not be less than, 100 per 
centum of the amounts anticipated by the Federal Emergency Management 
Agency to be obligated for its radiological 
emergency preparedness program for such fiscal year. The methodology for 
assessment and collection of fees shall be fair and equitable, and shall 
reflect the full amount of costs of providing radiological emergency 
planning, preparedness, response and associated services. Such fees 
shall be assessed in a manner that reflects the use of agency resources 
for classes of regulated persons and the administrative costs of 
collecting such fees. Fees received pursuant to this section shall be 
deposited in the general fund of the Treasury as offsetting receipts. 
Assessment and collection of such fees are only authorized during fiscal 
year 1997.

                     General Services Administration

                    consumer information center fund

    For necessary expenses of the Consumer Information Center, including 
services authorized by 5 U.S.C. 3109, $2,260,000, to be deposited into 
the Consumer Information Center Fund: Provided, That the appropriations, 
revenues and collections deposited into the fund shall be available for 
necessary expenses of Consumer Information Center activities in the 
aggregate amount of $7,500,000. Appropriations, revenues, and 
collections accruing to this fund during fiscal year 1997 in excess of 
$7,500,000 shall remain in the fund and shall not be available for 
expenditure except as authorized in appropriations Acts: 
Provided <<NOTE: 40 USC 761a.>>  further, That notwithstanding any other 
provision of law, the Consumer Information Center may accept and deposit 
to this account, during fiscal year 1997 and hereafter, gifts for the 
purpose of defraying its costs of printing, publishing, and distributing 
consumer information and educational materials and undertaking other 
consumer information activities; may expend those gifts for those 
purposes, in addition to amounts appropriated or otherwise made 
available; and the balance shall remain available for expenditure for 
such purpose.

              National Aeronautics and Space Administration

                           human space flight

    For necessary expenses, not otherwise provided for, in the conduct 
and support of human space flight research and development activities, 
including research, development, operations, and services; maintenance; 
construction of facilities including repair, rehabilitation, and 
modification of real and personal property, and acquisition or 
condemnation of real property, as authorized by law; space flight, 
spacecraft control and communications activities including operations, 
production, and services; and purchase, lease, charter, maintenance and 
operation of mission and administrative

[[Page 110 STAT. 2917]]

aircraft, $5,362,900,000, to remain available until September 30, 1998.

                   science, aeronautics and technology

    For necessary expenses, not otherwise provided for, in the conduct 
and support of science, aeronautics and technology research and 
development activities, including research, development, 
operations, and services; maintenance; construction of facilities 
including repair, rehabilitation, and modification of real and personal 
property, and acquisition or condemnation of real property, as 
authorized by law; space flight, spacecraft control and communications 
activities including operations, production, and services; and purchase, 
lease, charter, maintenance and operation of mission and administrative 
aircraft, $5,762,100,000, to remain available until September 30, 1998. 
Chapter VII of Public Law 104-6 <<NOTE: 109 Stat. 88.>>  is amended 
under the heading, ``National Aeronautics and Space Administration'' by 
replacing ``September 30, 1997'' with ``September 30, 1998'' and 
``1996'' with ``1997''.

                             mission support

    For necessary expenses, not otherwise provided for, in carrying out 
mission support for human space flight programs and science, 
aeronautical, and technology programs, including research operations and 
support; space communications activities including operations, 
production and services; maintenance; construction of facilities 
including repair, rehabilitation, and modification of facilities, minor 
construction of new facilities and additions to existing facilities, 
facility planning and design, environmental compliance and restoration, 
and acquisition or condemnation of real property, as authorized by law; 
program management; personnel and related costs, including uniforms or 
allowances therefor, as authorized by 5 U.S.C. 5901-5902; travel 
expenses; purchase, lease, charter, maintenance, and operation of 
mission and administrative aircraft; not to exceed $35,000 for official 
reception and representation expenses; and purchase (not to exceed 33 
for replacement only) and hire of passenger motor vehicles; 
$2,562,200,000, to remain available until September 30, 1998.

                       office of inspector general

    For necessary expenses of the Office of Inspector General in 
carrying out the Inspector General Act of 1978, as amended, $17,000,000.

                        administrative provisions

                      (including transfer of funds)

    Notwithstanding the limitation on the availability of funds 
appropriated for ``Human space flight'', ``Science, aeronautics and 
technology'', or ``Mission support'' by this appropriations Act, when 
(1) any activity has been initiated by the incurrence of obligations for 
construction of facilities as authorized by law, or (2) amounts are 
provided for full-funding for the Tracking and Data Relay Satellite 
(TDRS) replenishment program, such amount available for such activity 
shall remain available until expended. This provision does not apply to 
the amounts appropriated in ``Mission 

[[Page 110 STAT. 2918]]

support'' pursuant to the authorization for repair, rehabilitation and 
modification of facilities, minor construction of new facilities and 
additions to existing facilities, and facility planning and design.
    Notwithstanding the limitation on the availability of funds 
appropriated for ``Human space flight'', ``Science, aeronautics and 
technology'', or ``Mission support'' by this appropriations Act, the 
amounts appropriated for construction of facilities shall remain 
available until September 30, 1999.
    Notwithstanding the limitation on the availability of funds 
appropriated for ``Mission support'' and ``Office of Inspector 
General'', amounts made available by this Act for personnel and related 
costs and travel expenses of the National Aeronautics and Space 
Administration shall remain available until September 30, 1997 and may 
be used to enter into contracts for training, investigations, cost 
associated with personnel relocation, and for other services, to be 
provided during the next fiscal year.
    Upon the determination by the Administrator that such action is 
necesssary, the Administrator may, with the approval of the Office of 
Management and Budget, transfer not to exceed $177,000,000 of funds made 
available in this Act to the National Aeronautics and Space 
Administration for the International Space Station between ``Science, 
aeronautics and technology'' and ``Human space flight'', to be merged 
with and to be available for the same purposes, and for the same time 
period, as the appropriation to which transferred: Provided, That such 
authority may not be used unless for higher priority items than those 
for which originally appropriated: Provided further, 
That <<NOTE: Notification.>>  the Administrator of the National 
Aeronautics and Space Administration shall notify the Congress promptly 
of all transfers made pursuant to this authority.

                  National Credit Union Administration

                       central liquidity facility

    During fiscal year 1997, gross obligations of the Central Liquidity 
Facility for the principal amount of new direct loans to member credit 
unions, as authorized by the National Credit Union Central Liquidity 
Facility Act (12 U.S.C. 1795), shall not exceed $600,000,000: Provided, 
That administrative expenses of the Central Liquidity Facility in fiscal 
year 1997 shall not exceed $560,000: Provided further, That $1,000,000, 
together with amounts of principal and interest on loans repaid, to be 
available until expended, is available for loans to community 
development credit unions.

                       National Science Foundation

                     research and related activities

    For necessary expenses in carrying out the National Science 
Foundation Act of 1950, as amended (42 U.S.C. 1861-1875), and the Act to 
establish a National Medal of Science (42 U.S.C. 1880-1881); services as 
authorized by 5 U.S.C. 3109; maintenance and operation of aircraft and 
purchase of flight services for research support; acquisition of 
aircraft; $2,432,000,000, of which not to exceed $226,000,000 shall 
remain available until expended for Polar research and operations 
support, and for reimbursement to other Federal agencies for operational 
and science support and logistical

[[Page 110 STAT. 2919]]

and other related activities for the United States Antarctic program; 
the balance to remain available until September 30, 1998: Provided, That 
receipts for scientific support services and materials furnished by the 
National Research Centers and other National Science Foundation 
supported research facilities may be credited to this appropriation: 
Provided further, That to the extent that the amount appropriated is 
less than the total amount authorized to be appropriated for included 
program activities, all amounts, including floors and ceilings, 
specified in the authorizing Act for those program activities or their 
subactivities shall be reduced proportionally.

                        major research equipment

    For necessary expenses of major construction projects pursuant to 
the National Science Foundation Act of 1950, as amended, $80,000,000, to 
remain available until expended.

                      education and human resources

    For necessary expenses in carrying out science and engineering 
education and human resources programs and activities pursuant to the 
National Science Foundation Act of 1950, as amended (42 U.S.C. 1861-
1875), including services as authorized by 5 U.S.C. 3109 and rental of 
conference rooms in the District of Columbia, $619,000,000, to remain 
available until September 30, 1998: Provided, That to the extent that 
the amount of this appropriation is less than the total amount 
authorized to be appropriated for included program activities, all 
amounts, including floors and ceilings, specified in the authorizing Act 
for those program activities or their subactivities shall be reduced 
proportionally.

                          salaries and expenses

    For necessary salaries and expenses of the National Science 
Foundation Act of 1950, as amended (42 U.S.C. 1861-1875); services 
authorized by 5 U.S.C. 3109; hire of passenger motor vehicles; not to 
exceed $9,000 for official reception and representation expenses; 
uniforms or allowances therefor, as authorized by 5 U.S.C. 5901-5902; 
rental of conference rooms in the District of Columbia; reimbursement of 
the General Services Administration for security guard services and 
headquarters relocation; $134,310,000: Provided, That contracts may be 
entered into under salaries and expenses in fiscal year 1997 for 
maintenance and operation of facilities, and for other services, to be 
provided during the next fiscal year.

                       office of inspector general

    For necessary expenses of the Office of Inspector General as 
authorized by the Inspector General Act of 1978, as amended, $4,690,000, 
to remain available until September 30, 1998.

                  Neighborhood Reinvestment Corporation

          payment to the neighborhood reinvestment corporation

    For payment to the Neighborhood Reinvestment Corporation for use in 
neighborhood reinvestment activities, as authorized by

[[Page 110 STAT. 2920]]

the Neighborhood Reinvestment Corporation Act (42 U.S.C. 8101-8107), 
$49,900,000.

                        Selective Service System

                          salaries and expenses

    For necessary expenses of the Selective Service System, including 
expenses of attendance at meetings and of training for uniformed 
personnel assigned to the Selective Service System, as authorized by 5 
U.S.C. 4101-4118 for civilian employees; and not to exceed $1,000 for 
official reception and representation expenses; $22,930,000: Provided, 
That during the current fiscal year, the President may exempt this 
appropriation from the provisions of 31 U.S.C. 1341, whenever he deems 
such action to be necessary in the interest of national defense: 
Provided further, That none of the funds appropriated by this Act may be 
expended for or in connection with the induction of any person into the 
Armed Forces of the United States.

                      TITLE IV--GENERAL PROVISIONS

    Sec. 401. Where appropriations in titles I, II, and III of this Act 
are expendable for travel expenses and no specific limitation has been 
placed thereon, the expenditures for such travel expenses may not exceed 
the amounts set forth therefore in the budget estimates submitted for 
the appropriations: Provided, That this provision does not apply to 
accounts that do not contain an object classification for travel: 
Provided further, That this section shall not apply to travel performed 
by uncompensated officials of local boards and appeal boards of the 
Selective Service System; to travel performed directly in connection 
with care and treatment of medical beneficiaries of the Department of 
Veterans Affairs; to travel performed in connection with major disasters 
or emergencies declared or determined by the President under the 
provisions of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act; to travel performed by the Offices of Inspector General 
in connection with audits and investigations; or to payments to 
interagency motor pools where separately set forth in the budget 
schedules: Provided further, That if appropriations in titles I, II, and 
III exceed the amounts set forth in budget estimates initially submitted 
for such appropriations, the expenditures for travel may correspondingly 
exceed the amounts therefore set forth in the estimates in the same 
proportion.
    Sec. 402. Appropriations and funds available for the administrative 
expenses of the Department of Housing and Urban Development and the 
Selective Service System shall be available in the current fiscal year 
for purchase of uniforms, or allowances therefor, as authorized by 5 
U.S.C. 5901-5902; hire of passenger motor vehicles; and services as 
authorized by 5 U.S.C. 3109.
    Sec. 403. Funds of the Department of Housing and Urban Development 
subject to the Government Corporation Control Act or section 402 of the 
Housing Act of 1950 shall be available, without regard to the 
limitations on administrative expenses, for legal services on a contract 
or fee basis, and for utilizing and making payment for services and 
facilities of Federal National Mortgage Association, Government National 
Mortgage Association, Federal Home Loan Mortgage Corporation, Federal 
Financing Bank, Federal Reserve

[[Page 110 STAT. 2921]]

banks or any member thereof, Federal Home Loan banks, and any insured 
bank within the meaning of the Federal Deposit Insurance Corporation 
Act, as amended (12 U.S.C. 1811-1831).
    Sec. 404. No part of any appropriation contained in this Act shall 
remain available for obligation beyond the current fiscal year unless 
expressly so provided herein.
    Sec. 405. No funds appropriated by this Act may be expended--
            (1) pursuant to a certification of an officer or employee of 
        the United States unless--
                    (A) such certification is accompanied by, or is part 
                of, a voucher or abstract which describes the payee or 
                payees and the items or services for which such 
                expenditure is being made, or
                    (B) the expenditure of funds pursuant to such 
                certification, and without such a voucher or abstract, 
                is specifically authorized by law; and
            (2) unless such expenditure is subject to audit by the 
        General Accounting Office or is specifically exempt by law from 
        such audit.

    Sec. 406. None of the funds provided in this Act to any department 
or agency may be expended for the transportation of any officer or 
employee of such department or agency between his domicile and his place 
of employment, with the exception of any officer or employee authorized 
such transportation under 31 U.S.C. 1344 or 5 U.S.C. 7905.
    Sec. 407. None of the funds provided in this Act may be used for 
payment, through grants or contracts, to recipients that do not share in 
the cost of conducting research resulting from proposals not 
specifically solicited by the Government: Provided, That the extent of 
cost sharing by the recipient shall reflect the mutuality of interest of 
the grantee or contractor and the Government in the research.
    Sec. 408. None of the funds in this Act may be used, directly or 
through grants, to pay or to provide reimbursement for payment of the 
salary of a consultant (whether retained by the Federal Government or a 
grantee) at more than the daily equivalent of the rate paid for level IV 
of the Executive Schedule, unless specifically authorized by law.
    Sec. 409. None of the funds provided in this Act shall be used to 
pay the expenses of, or otherwise compensate, non-Federal parties 
intervening in regulatory or adjudicatory proceedings. Nothing herein 
affects the authority of the Consumer Product Safety Commission pursuant 
to section 7 of the Consumer Product Safety Act (15 U.S.C. 2056 et 
seq.).
    Sec. 410. <<NOTE: Contracts. Public information. Records.>>  Except 
as otherwise provided under existing law or under an existing Executive 
Order issued pursuant to an existing law, the obligation or expenditure 
of any appropriation under this Act for contracts for any consulting 
service shall be limited to contracts which are (1) a matter of public 
record and available for public inspection, and (2) thereafter included 
in a publicly available list of all contracts entered into within 
twenty-four months prior to the date on which the list is made available 
to the public and of all contracts on which performance has not been 
completed by such date. The list required by the preceding sentence 
shall be updated quarterly and shall include a narrative description of 
the work to be performed under each such contract.

[[Page 110 STAT. 2922]]

    Sec. 411. Except as otherwise provided by law, no part of any 
appropriation contained in this Act shall be obligated or expended by 
any executive agency, as referred to in the Office of Federal 
Procurement Policy Act (41 U.S.C. 401 et seq.), for a contract for 
services unless such executive agency (1) has awarded and entered into 
such contract in full compliance with such Act and the regulations 
promulgated thereunder, and (2) requires any report prepared pursuant to 
such contract, including plans, evaluations, studies, analyses and 
manuals, and any report prepared by the agency which is substantially 
derived from or substantially includes any report prepared pursuant to 
such contract, to contain information concerning (A) the contract 
pursuant to which the report was prepared, and (B) the contractor who 
prepared the report pursuant to such contract.
    Sec. 412. Except as otherwise provided in section 406, none of the 
funds provided in this Act to any department or agency shall be 
obligated or expended to provide a personal cook, chauffeur, or other 
personal servants to any officer or employee of such department or 
agency.
    Sec. 413. None of the funds provided in this Act to any department 
or agency shall be obligated or expended to procure passenger 
automobiles as defined in 15 U.S.C. 2001 with an EPA estimated miles per 
gallon average of less than 22 miles per gallon.
    Sec. 414. <<NOTE: Reports.>>  None of the funds appropriated in 
title I of this Act shall be used to enter into any new lease of real 
property if the estimated annual rental is more than $300,000 unless the 
Secretary submits, in writing, a report to the Committees on 
Appropriations of the Congress and a period of 30 days has expired 
following the date on which the report is received by the Committees on 
Appropriations.

    Sec. 415. (a) Purchase of American-Made Equipment and Products.--It 
is the sense of the Congress that, to the greatest extent practicable, 
all equipment and products purchased with funds made available in this 
Act should be American-made.
    (b) Notice Requirement.--In providing financial assistance to, or 
entering into any contract with, any entity using funds made available 
in this Act, the head of each Federal agency, to the greatest extent 
practicable, shall provide to such entity a notice describing the 
statement made in subsection (a) by the Congress.
    Sec. 416. None of the funds appropriated in this Act may be used to 
implement any cap on reimbursements to grantees for indirect costs, 
except as published in Office of Management and Budget Circular A-21.
    Sec. 417. Such sums as may be necessary for fiscal year 1997 pay 
raises for programs funded by this Act shall be absorbed within the 
levels appropriated in this Act.
    Sec. 418. None of the funds made available in this Act may be used 
for any program, project, or activity, when it is made known to the 
Federal entity or official to which the funds are made available that 
the program, project, or activity is not in compliance with any Federal 
law relating to risk assessment, the protection of private property 
rights, or unfunded mandates.
    Sec. 419. <<NOTE: Government organization.>>  Such funds as may be 
necessary to carry out the orderly termination of the Office of Consumer 
Affairs shall be made available from funds appropriated to the 
Department of Health and Human Services for fiscal year 1997.

[[Page 110 STAT. 2923]]

    Sec. 420. Corporations and agencies of the Department of Housing and 
Urban Development which are subject to the Government Corporation 
Control Act, as amended, are hereby authorized to make such 
expenditures, within the limits of funds and borrowing authority 
available to each such corporation or agency and in accord with law, and 
to make such contracts and commitments without regard to fiscal year 
limitations as provided by section 104 of the Act as may be necessary in 
carrying out the programs set forth in the budget for 1997 for such 
corporation or agency except as hereinafter provided: Provided, That 
collections of these corporations and agencies may be used for new loan 
or mortgage purchase commitments only to the extent expressly provided 
for in this Act (unless such loans are in support of other forms of 
assistance provided for in this or prior appropriations Acts), except 
that this proviso shall not apply to the mortgage insurance or guaranty 
operations of these corporations, or where loans or mortgage purchases 
are necessary to protect the financial interest of the United States 
Government.
    Sec. 421. <<NOTE: 38 USC 1801 note.>>  (a) The purpose of this 
section is to provide for the special needs of certain children of 
Vietnam veterans who were born with the birth defect spina bifida, 
possibly as the result of the exposure of one or both parents to 
herbicides during active service in the Republic of Vietnam during the 
Vietnam era, through the provision of health care and monetary benefits.

    (b)(1) Part II of title 38, United States Code, is amended by 
inserting after chapter 17 the following new chapter:

  ``CHAPTER 18--BENEFITS FOR CHILDREN OF VIETNAM VETERANS WHO ARE BORN 
                            WITH SPINA BIFIDA

``Sec.
``1801. Definitions.
``1802. Spina bifida conditions covered.
``1803. Health care.
``1804. Vocational training and rehabilitation.
``1805. Monetary allowance.
``1806. Effective date of awards.

``Sec. 1801. Definitions

    ``For the purposes of this chapter--
            ``(1) The term `child', with respect to a Vietnam veteran, 
        means a natural child of the Vietnam veteran, regardless of age 
        or marital status, who was conceived after the date on which the 
        veteran first entered the Republic of Vietnam during the Vietnam 
        era.
            ``(2) The term `Vietnam veteran' means a veteran who 
        performed active military, naval, or air service in the Republic 
        of Vietnam during the Vietnam era.

``Sec. 1802. Spina bifida conditions covered

    ``This chapter applies with respect to all forms and manifestations 
of spina bifida except spina bifida occulta.

``Sec. 1803. Health care

    ``(a) In accordance with regulations <<NOTE: Regulations.>>  which 
the Secretary shall prescribe, the Secretary shall provide a child of a 
Vietnam veteran who is suffering from spina bifida with such health care 
as the Secretary determines is needed by the child for the spina bifida 
or any disability that is associated with such condition.

[[Page 110 STAT. 2924]]

    ``(b) The Secretary may provide health care under this section 
directly or by contract or other arrangement with any health care 
provider.
    ``(c) For the purposes of this section--
            ``(1) The term `health care'--
                    ``(A) means home care, hospital care, nursing home 
                care, outpatient care, preventive care, habilitative and 
                rehabilitative care, case management, and respite care; 
                and
                    ``(B) includes--
                          ``(i) the training of appropriate members of a 
                      child's family or household in the care of the 
                      child; and
                          ``(ii) the provision of such pharmaceuticals, 
                      supplies, equipment, devices, appliances, 
                      assistive technology, direct transportation costs 
                      to and from approved sources of health care, and 
                      other materials as the Secretary determines 
                      necessary.
            ``(2) The term `health care provider' includes specialized 
        spina bifida clinics, health care plans, insurers, 
        organizations, institutions, and any other entity or individual 
        who furnishes health care that the Secretary determines 
        authorized under this section.
            ``(3) The term `home care' means outpatient care, 
        habilitative and rehabilitative care, preventive health 
        services, and health-related services furnished to an individual 
        in the individual's home or other place of residence.
            ``(4) The term `hospital care' means care and treatment for 
        a disability furnished to an individual who has been 
        admitted to a hospital as a patient.
            ``(5) The term `nursing home care' means care and treatment 
        for a disability furnished to an individual who has been 
        admitted to a nursing home as a resident.
            ``(6) The term `outpatient care' means care and treatment of 
        a disability, and preventive health services, furnished to an 
        individual other than hospital care or nursing home care.
            ``(7) The term `preventive care' means care and treatment 
        furnished to prevent disability or illness, including periodic 
        examinations, immunizations, patient health education, and such 
        other services as the Secretary determines necessary to provide 
        effective and economical preventive health care.
            ``(8) The term `habilitative and rehabilitative care' means 
        such professional, counseling, and guidance services and 
        treatment programs (other than vocational training under section 
        1804 of this title) as are necessary to develop, maintain, or 
        restore, to the maximum extent practicable, the functioning of a 
        disabled person.
            ``(9) The term `respite care' means care furnished on an 
        intermittent basis for a limited period to an individual who 
        resides primarily in a private residence when such care will 
        help the individual to continue residing in such private 
        residence.

``Sec. 1804. Vocational training and rehabilitation

    ``(a) Pursuant to such regulations as the Secretary may prescribe, 
the Secretary may provide vocational training under this section to a 
child of a Vietnam veteran who is suffering from

[[Page 110 STAT. 2925]]

spina bifida if the Secretary determines that the achievement of a 
vocational goal by such child is reasonably feasible.
    ``(b) Any program of vocational training for a child under this 
section shall be designed in consultation with the child in order to 
meet the child's individual needs and shall be set forth in an 
individualized written plan of vocational rehabilitation.
    ``(c)(1) A vocational training program for a child under this 
section--
            ``(A) shall consist of such vocationally oriented services 
        and assistance, including such placement and post-placement 
        services and personal and work adjustment training, as the 
        Secretary determines are necessary to enable the child to 
        prepare for and participate in vocational training or 
        employment; and
            ``(B) may include a program of education at an institution 
        of higher education if the Secretary determines that the program 
        of education is predominantly vocational in content.

    ``(2) A vocational training program under this subsection may not 
include the provision of any loan or subsistence allowance or any 
automobile adaptive equipment.
    ``(d)(1) Except as provided in paragraph (2) and subject to 
subsection (e)(2), a vocational training program under this section may 
not exceed 24 months.
    ``(2) The Secretary may grant an extension of a vocational training 
program for a child under this section for up to 24 additional months if 
the Secretary determines that the extension is necessary in order for 
the child to achieve a vocational goal identified (before the end of the 
first 24 months of such program) in the written plan of vocational 
rehabilitation formulated for the child pursuant to subsection (b).
    ``(e)(1) A child who is pursuing a program of vocational training 
under this section and is also eligible for assistance under a program 
under chapter 35 of this title may not receive assistance under both 
such programs concurrently. The child shall elect (in such form and 
manner as the Secretary may prescribe) the program under which the child 
is to receive assistance.
    ``(2) The aggregate period for which a child may receive assistance 
under this section and chapter 35 of this title may not exceed 48 months 
(or the part-time equivalent thereof).

``Sec. 1805. Monetary allowance

    ``(a) The Secretary shall pay a monthly allowance under this chapter 
to any child of a Vietnam veteran for any disability resulting from 
spina bifida suffered by such child.
    ``(b)(1) The amount of the allowance paid to a child under this 
section shall be based on the degree of disability suffered by the 
child, as determined in accordance with such schedule for rating 
disabilities resulting from spina bifida as the Secretary may prescribe.
    ``(2) The Secretary shall, in prescribing the rating schedule for 
the purposes of this section, establish three levels of disability upon 
which the amount of the allowance provided by this section shall be 
based.
    ``(3) The amounts of the allowance shall be $200 per month for the 
lowest level of disability prescribed, $700 per month for the 
intermediate level of disability prescribed, and $1,200 per month

[[Page 110 STAT. 2926]]

for the highest level of disability prescribed. Such amounts are subject 
to adjustment under section 5312 of this title.
    ``(c) Notwithstanding any other provision of law, receipt by a child 
of an allowance under this section shall not impair, infringe, or 
otherwise affect the right of the child to receive any other benefit to 
which the child may otherwise be entitled under any law administered by 
the Secretary, nor shall receipt of such an allowance impair, infringe, 
or otherwise affect the right of any individual to receive any benefit 
to which the individual is entitled under any law administered by the 
Secretary that is based on the child's relationship to the individual.
    ``(d) Notwithstanding any other provision of law, the allowance paid 
to a child under this section shall not be considered income or 
resources in determining eligibility for or the amount of benefits under 
any Federal or federally assisted program.

``Sec. 1806. Effective date of awards

    ``The effective date for an award of benefits under this chapter 
shall be fixed in accordance with the facts found, but shall not be 
earlier than the date of receipt of application for the benefits.''.
    (2) The tables of chapters before part I and at the beginning of 
part II of such title are each amended by inserting after the item 
referring to chapter 17 the following new item:

``18. Benefits for Children of Vietnam Veterans Who Are Born With 
Spina Bifida.....................................................1801''.

    (c) Section 5312 of title 38, United States Code, is amended--
            (1) in subsection (a)--
                    (A) by striking out ``and the rate of increased 
                pension'' and inserting in lieu thereof ``, the rate of 
                increased pension''; and
                    (B) by inserting after ``on account of children,'' 
                the following: ``and each rate of monthly allowance paid 
                under section 1805 of this title,''; and
            (2) in subsection (c)(1), by striking out ``and 1542'' and 
        inserting in lieu thereof ``1542, and 1805''.

    (d) <<NOTE: Effective date. 38 USC 1801 note.>>  This section and 
the amendments made by this section shall take effect on January 1, 
1997.

    Sec. 422. (a) Section 1151 of title 38, United States Code, is 
amended--
            (1) by striking out the first sentence and inserting in lieu 
        thereof the following:

    ``(a) Compensation under this chapter and dependency and indemnity 
compensation under chapter 13 of this title shall be awarded for a 
qualifying additional disability or a qualifying death of a veteran in 
the same manner as if such additional disability or death were service-
connected. For purposes of this section, a disability or death is a 
qualifying additional disability or qualifying death if the disability 
or death was not the result of the veteran's willful misconduct and--
            ``(1) the disability or death was caused by hospital care, 
        medical or surgical treatment, or examination furnished the 
        veteran under any law administered by the Secretary, either by a 
        Department employee or in a Department facility as defined in 
        section 1701(3)(A) of this title, and the proximate cause of the 
        disability or death was--
                    ``(A) carelessness, negligence, lack of proper 
                skill, error in judgment, or similar instance of fault 
                on the part of

[[Page 110 STAT. 2927]]

                the Department in furnishing the hospital care, medical 
                or surgical treatment, or examination; or
                    ``(B) an event not reasonably foreseeable; or
            ``(2) the disability or death was proximately caused by the 
        provision of training and rehabilitation services by the 
        Secretary (including by a service-provider used by the Secretary 
        for such purpose under section 3115 of this title) as part of an 
        approved rehabilitation program under chapter 31 of this 
        title.''; and
            (2) in the second sentence--
                    (A) by redesignating that sentence as subsection 
                (b);
                    (B) by striking out ``, aggravation,'' both places 
                it appears; and
                    (C) by striking out ``sentence'' and substituting in 
                lieu thereof ``subsection''.

    (b)(1) <<NOTE: Effective date. 38 USC 1151 note.>>  The amendments 
made by subsection (a) <<NOTE: 38 USC 1151 note.>>  shall take effect on 
October 1, 1996.

    (2) Section 1151 of title 38, United States Code (as amended by 
subsection (a)), shall govern all administrative and judicial 
determinations of eligibility for benefits under such section that are 
made with respect to claims filed on or after the effective date set 
forth in paragraph (1), including those based on original applications 
and applications seeking to reopen, revise, reconsider, or otherwise 
readjudicate on any basis claims for benefits under such section 1151 or 
any provision of law that is a predecessor of such section.
    (c) Nothwithstanding subsection (b)(1), section 421(d), <<NOTE: 38 
USC 1151 note.>>  or any other provision of this Act, section 421 and 
this section shall not take effect until October 1, 1997, unless 
legislation other than this Act is enacted to provide for an earlier 
effective date.

    Sec. 423. The amount provided in title I for ``Veterans Health 
Administration--Medical Care'' is hereby increased by $5,000,000.
    Sec. 424. FHA Mortgage Insurance Premiums.--Section 203(c)(2)(A) of 
the National Housing Act (12 U.S.C. 1709(c)(2)(A)) is amended by 
inserting after the first sentence the following new sentence: ``In the 
case of a mortgage for which the mortgagor is a first-time homebuyer who 
completes a program of counseling with respect to the responsibilities 
and financial management involved in homeownership that is approved by 
the Secretary, the premium payment under this subparagraph shall not 
exceed 2.0 percent of the amount of the original insured principal 
obligation of the mortgage.''.
    Sec. 425. (a) Authority To Use Amounts Borrowed From Family Members 
for Downpayments on FHA-Insured Loans.--Section 203(b)(9) of the 
National Housing Act (12 U.S.C. 1709(b)(9)) is amended by inserting 
before the period at the end the following: ``: Provided further, That 
for purposes of this paragraph, the Secretary shall consider as cash or 
its equivalent any amounts borrowed from a family member (as such term 
is defined in section 201), subject only to the requirements that, in 
any case in which the repayment of such borrowed amounts is secured by a 
lien against the property, such lien shall be subordinate to the 
mortgage and the sum of the principal obligation of the mortgage and the 
obligation secured by such lien may not exceed 100 percent of the 
appraised value of the property plus any initial service charges, 
appraisal, inspection, and other fees in connection with the mortgage''.

[[Page 110 STAT. 2928]]

    (b) Definition of Family Member.--Section 201 of the National 
Housing Act (12 U.S.C. 1707) is amended by adding at the end the 
following new subsections:
    ``(e) The term `family member' means, with respect to a mortgagor 
under such section, a child, parent, or grandparent of the mortgagor (or 
the mortgagor's spouse). In determining whether any of the relationships 
referred to in the preceding sentence exist, a legally adopted son or 
daughter of an individual (and a child who is a member of an 
individual's household, if placed with such individual by an authorized 
placement agency for legal adoption by such individual), and a foster 
child of an individual, shall be treated as a child of such individual 
by blood.
    ``(f) The term `child' means, with respect to a mortgagor under such 
section, a son, stepson, daughter, or stepdaughter of such mortgagor.''.
    Sec. 426. Calculation of Downpayment.--Section 203(b) of the 
National Housing Act (12 U.S.C. 1709(b)) is amended by adding at the end 
the following new paragraph:
            ``(10) Alaska and hawaii.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, with respect to a mortgage 

                originated in the State of Alaska or the State of Hawaii 
                and endorsed for insurance in fiscal year 1997, 
                involving a principal obligation not in excess of the 
                sum of--
                          ``(i) the amount of the mortgage insurance 
                      premium paid at the time the mortgage is insured; 
                      and
                          ``(ii)(I) in the case of a mortgage for a 
                      property with an appraised value equal to or less 
                      than $50,000, 98.75 percent of the appraised value 
                      of the property;
                          ``(II) in the case of a mortgage for a 
                      property with an appraised value in excess of 
                      $50,000 but not in excess of $125,000, 97.65 
                      percent of the appraised value of the property;
                          ``(III) in the case of a mortgage for a 
                      property with an appraised value in excess of 
                      $125,000, 97.15 percent of the appraised value of 
                      the property; or
                          ``(IV) notwithstanding subclauses (II) and 
                      (III), in the case of a mortgage for a property 
                      with an appraised value in excess of $50,000 that 
                      is located in an area of the State for which the 
                      average closing cost exceeds 2.10 percent of the 
                      average, for the State, of the sale price of 
                      properties located in the State for which 
                      mortgages have been executed, 97.75 percent of the 
                      appraised value of the property.
                    ``(B) Average closing cost.--For purposes of this 
                paragraph, the term `average closing cost' means, with 
                respect to a State, the average, for mortgages executed 
                for properties that are located within the State, of the 
                total amounts (as determined by the Secretary) of 
                initial service charges, appraisal, inspection, and 
                other fees (as the Secretary shall approve) that are 
                paid in connection with such mortgages.''.

    Sec. 427. Delegation of Single Family Mortgage Insuring Authority to 
Direct Endorsement Mortgagees.--Title II of the National Housing Act (12 
U.S.C. 1707 et seq.) is amended by adding at the end the following new 
section:

[[Page 110 STAT. 2929]]

   ``delegation of insuring authority to direct endorsement mortgagees

    ``Sec. 256.(a) <<NOTE: 12 USC 1715z-21.>>  Authority.--The Secretary 
may delegate, to one or more mortgagees approved by the Secretary under 
the direct endorsement program, the authority of the Secretary under 
this Act to insure mortgages involving property upon which there is 
located a dwelling designed principally for occupancy by 1 to 4 
families.

    ``(b) Considerations.--In determining whether to delegate authority 
to a mortgagee under this section, the Secretary shall consider the 
experience and performance of the mortgagee compared to the default rate 
of all insured mortgages in comparable markets, and such other factors 
as the Secretary determines appropriate to minimize risk of loss to the 
insurance funds under this Act.
    ``(c) Enforcement of Insurance Requirements.--
            ``(1) In general.--If the Secretary determines that a 
        mortgage insured by a mortgagee pursuant to delegation of 
        authority under this section was not originated in accordance 
        with the requirements established by the Secretary, and the 
        Secretary pays an insurance claim with respect to the mortgage 
        within a reasonable period specified by the Secretary, the 
        Secretary may require the mortgagee approved under this section 
        to indemnify the Secretary for the loss.
            ``(2) Fraud or misrepresentation.--If fraud or 
        misrepresentation was involved in connection with the 
        origination, the Secretary may require the mortgagee approved 
        under this section to indemnify the Secretary for the loss 
        regardless of when an insurance claim is paid.

    ``(d) Termination of Mortgagee's Authority.--If a mortgagee to which 
the Secretary has made a delegation under this section violates the 
requirements and procedures established by the Secretary or the 
Secretary determines that other good cause exists, the Secretary may 
cancel a delegation of authority under this section to the mortgagee by 
giving notice to the mortgagee. Such a cancellation shall be effective 
upon receipt of the notice by the mortgagee or at a later date specified 
by the Secretary. A decision by the Secretary to cancel a delegation 
shall be final and conclusive and shall not be subject to judicial 
review.
    ``(e) <<NOTE: Regulations.>>  Requirements and Procedures.--Before 
approving a delegation under this section, the Secretary shall issue 
regulations establishing appropriate requirements and procedures, 
including requirements and procedures governing the indemnification of 
the Secretary by the mortgagee.''.

    Sec. 428. Implementation of Comprehensive Conservation and 
Management Plans.--Notwithstanding section 320(g) of the Federal Water 
Pollution Control Act (33 U.S.C. 1330(g)), funds made available pursuant 
to authorization under such section for fiscal year 1997 and prior 
fiscal years may be used for implementing comprehensive conservation and 
management plans.
    Sec. 429. (a) Plan.--(1) The Secretary of Veterans Affairs shall 
develop a plan for the allocation of health care resources (including 
personnel and funds) of the Department of Veterans Affairs among the 
health care Networks of the Department so as to ensure that veterans who 
have similar economic status and eligibility priority and who are 
eligible for medical care have similar

[[Page 110 STAT. 2930]]

access to such care regardless of the region of the United States in 
which such veterans reside.
    (2) The plan shall--
            (A) reflect, to the maximum extent possible, the Veterans 
        Integrated Service Network developed by the Department to 
        account for forecasts in expected workload and to ensure 
        fairness to facilities that provide cost-efficient health care; 
        and
            (B) include--
                    (i) procedures to identify reasons for variations in 
                operating costs among similar facilities where Network 
                allocations are based on similar unit costs for similar 
                services and workload;
                    (ii) ways to improve the allocation of resources so 
                as to promote efficient use of resources and provision 
                of quality health care;
                    (iii) adjustments to unit costs in subsection (a) to 
                reflect factors which directly influence the cost of 
                health care delivery within each Network and where such 
                factors are not under the control of Network or 
                Department management; and
                    (iv) include forecasts in expected workload and 
                consideration of the demand for Veterans Administration 
                health care that may not be reflected in current 
                workload projections.

    (3) The Secretary shall prepare the plan in consultation with the 
Under Secretary of Health of the Department of Veterans Affairs.
    (b) Plan Elements.--The plan under subsection (a) shall 
set forth--
            (1) milestones for achieving the goal referred to in 
        paragraph (1) of that subsection; and
            (2) a means of evaluating the success of the Secretary in 
        meeting the goal.

    (c) Submittal to Congress.--The Secretary shall submit to Congress 
the plan developed under subsection (a) not later than 180 days after 
the date of the enactment of this Act.
    (d) <<NOTE: Notification.>>  Implementation.--The Secretary shall 
implement the plan developed under subsection (a) not later than 60 days 
after submitting the plan to Congress under subsection (c), unless 
within that time the Secretary notifies Congress that the plan will not 
be implemented in that time and includes with the notification an 
explanation why the plan will not be implemented in that time.

    Sec. 430. GAO Audit on Staffing and Contracting.--The Comptroller 
General shall audit the operations of the Office of Federal Housing 
Enterprise Oversight concerning staff organization, expertise, capacity, 
and contracting authority to ensure that the office resources and 
contract authority are adequate and that they are being used 
appropriately to ensure that the Federal National Mortgage Association 
and the Federal Home Loan Mortgage Corporation are adequately 
capitalized and operating safely.
    Sec. 431. None of the funds appropriated or otherwise made available 
to the National Aeronautics and Space Administration by this Act, or any 
other Act enacted before the date of enactment of this Act, may be used 
by the Administrator of the National Aeronautics and Space 
Administration to relocate aircraft of the National Aeronautics and 
Space Administration based east of the

[[Page 110 STAT. 2931]]

Mississippi River to the Dryden Flight Research Center in 
California for the purpose of the consolidation of such aircraft.
    Sec. 432. <<NOTE: National Aeronautics and Space Administration 
Federal Employment Reduction Assistance Act of 1996. 5 USC 5597 note.>>  
To Promote and Support Management 
Reorganization of the National Aeronautics and Space Administration.--
(a) Short Title.--This section may be cited as the ``National 
Aeronautics and Space Administration Federal Employment Reduction 
Assistance Act of 1996.''.

    (b) Definitions.--For the purpose of this section--
            (1) the term ``Administrator'' means the Administrator of 
        the National Aeronautics and Space Administration; and
            (2) the term ``employee'' means an employee of the National 
        Aeronautics and Space Administration serving under an 
        appointment without time limitation, who has been currently 
        employed with NASA for a continuous period of at least twelve 
        months, except that such term does not include--
                    (A) a reemployed annuitant under subchapter III of 
                chapter 83 or chapter 84 of title 5, United States Code, 
                or another retirement system for employees of the 
                Government;
                    (B) an employee who is in receipt of a specific 
                notice of involuntary separation for misconduct or 
                unacceptable performance;
                    (C) an employee who, upon completing an additional 
                period of service as referred to in section 
                3(b)(2)(B)(ii) of the Federal Workforce Restructuring 
                Act of 1994 (Public Law 103-226; 108 Stat. 111), would 
                qualify for a voluntary separation incentive payment 
                under section 3 of such 
                Act; or
                    (D) an employee who has previously received any 
                voluntary separation incentive payment by the Federal 
                Government under this Act or any other authority and has 
                not repaid such payment.

    (c) Incentive Payment Program.--In order to avoid or minimize the 
need for involuntary separations due to a reduction in force, 
installation closure, reorganization, transfer of function, or other 
similar action affecting the National Aeronautics and Space 
Administration, the Administrator shall establish a program under which 
separation pay, subject to the availability of appropriated funds, may 
be offered to encourage eligible employees to separate from service 
voluntarily (whether by retirement or resignation).
    (d) Incentive Payments.--In order to receive a voluntary separation 
incentive payment, an employee must separate voluntarily (whether by 
retirement or resignation) during the period of time for which the 
payment of incentives has been authorized for the employee under the 
agency plan. Such separation payments--
            (1) shall be paid in a lump sum after the employee's 
        separation, and
            (2) shall be equal to the lesser of--
                    (A) an amount equal to the amount the employee would 
                be entitled to receive under section 5595(c) of title 5, 
                United States Code, if the employee were entitled to 
                payment under such section; or
                    (B) an amount that shall not exceed $25,000;
            (3) shall not be a basis for payment, and shall not be 
        included in the computation, of any other type of Government 
        benefit;

[[Page 110 STAT. 2932]]

            (4) shall not be taken into account for purposes of 
        determining the amount of any severance pay to which an 
        individual may be entitled under section 5595 of title 5, United 
        States Code, based on any other separation;
            (5) shall be considered payment for a voluntary separa-
        tion; and
            (6) shall be paid from the appropriations or funds available 
        for payment of the basic pay of the employee.

    (e) Effect of Subsequent Employment With the 
Government.--
            (1) An individual who has received a voluntary separation 
        incentive payment under this section and accepts any employment 
        with the Government of the United States within five years after 
        the date of the separation on which the payment is based shall 
        be required to repay, prior to the individual's first day of 
        employment, the entire amount of the incentive payment to NASA.
            (2) If the employment under paragraph (1) above is with an 
        executive agency (as defined by section 105 of title 5, United 
        States Code), the United States Postal Service, or the Postal 
        Rate Commission, the Director of the Office of Personnel 
        Management may, at the request of the head of the agency, waive 
        the repayment if the individual involved possesses unique 
        abilities and is the only qualified applicant available for the 
        position.
            (3) If the employment under paragraph (1) above is with an 
        entity in the legislative branch, the head of the entity or the 
        appointing official may waive the repayment if the individual 
        involved possesses unique abilities and is the only qualified 
        applicant available for the position.
            (4) If the employment under paragraph (1) above is with the 
        judicial branch, the Director of the Administrative Office of 
        the United States Courts may waive the repayment if the 
        individual involved possesses unique abilities and is the only 
        qualified applicant available for the position.
            (5) For the purpose of this section, the term 
        ``employment''--
                    (A) includes employment of any length or under any 
                type of appointment, but does not include employment 
                that is without compensation; and
                    (B) includes employment under a personal services 
                contract.

    (f) Effect of Subsequent Disability Retirement.--An employee who has 
received an incentive payment is ineligible to receive an annuity for 
reasons of disability under applicable regulations, unless the incentive 
payment is repaid.
    (g) Additional Agency Contributions to the Retirement Fund.--
            (1) In addition to any other payments which it is required 
        to make under subchapter III of chapter 83 or chapter 84 of 
        title 5, United States Code, NASA shall remit to the Office of 
        Personnel Management for deposit in the Treasury of the United 
        States to the credit of the Civil Service Retirement and 
        Disability Fund an amount equal to 15 percent of the final basic 
        pay of each employee who is covered under subchapter III of 
        chapter 83 or chapter 84 of title 5 to whom a voluntary 
        separation incentive has been paid under this Act.

[[Page 110 STAT. 2933]]

            (2) For the purpose of this section, the term ``final basic 
        pay'', with respect to an employee, means the total amount of 
        basic pay which would be payable for a year of service by such 
        employee, computed using the employee's final rate of basic pay, 
        and, if last serving on other than a full-time basis, with 
        appropriate adjustment therefor.

    (h) Reduction of Agency Employment Levels.--
            (1) Total full-time-equivalent employment in NASA shall be 
        reduced by one for each separation of an employee who receives a 
        voluntary separation incentive payment under this Act. The 
        reduction will be calculated by comparing the agency's full-
        time-equivalent employment for the fiscal year in which the 
        voluntary separation payments are made with the authorized full-
        time-equivalent employment for the prior fiscal year.
            (2) The Office of Management and Budget shall monitor and 
        take appropriate action necessary to ensure that the 
        requirements of this section are met.
            (3) <<NOTE: President.>>  The President shall take 
        appropriate action to ensure that functions involving more than 
        10 full time equivalent employees are not converted to contracts 
        by reason of the enactment of this section, except in cases in 
        which a cost comparison demonstrates such contracts would be to 
        the advantage of the Government.
            (4) The provisions of subsections (1) and (3) of this 
        section may be waived upon a determination by the President 
        that--
                    (A) the existence of a state of war or other 
                national emergency so requires; or
                    (B) the existence of an extraordinary emergency 
                which threatens life, health, safety, property, or the 
                environment so requires.

    (i) Reports.--No later than March 31 of each fiscal year, NASA shall 
submit to the Office of Personnel Management, who will subsequently 
report to the Committee on Governmental Affairs of the Senate and the 
Committee on Government Reform and Oversight of the House of 
Representatives a report which, with respect to the preceding fiscal 
year, shall include--
            (1) the number of employees who received voluntary 
        separation incentives;
            (2) the average amount of such incentives; and
            (3) the average grade or pay level of the employees who 
        received incentives.

    (j) Effective Date.--
            (1) The provisions of this section shall take effect on the 
        date of enactment of this Act.
            (2) No voluntary separation incentive under this section may 
        be paid based on the separation of an employee after September 
        30, 2000.

    Sec. 433. (a) Subject to the concurrence of the Administrator of the 
General Services Administration (GSA) and notwithstanding section 707 of 
Public Law 103-433, the Administrator of the National Aeronautics and 
Space Administration may convey to the city of Downey, California, all 
right, title, and interest of the United States in and to a parcel of 
real property, including improvements thereon, consisting of 
approximately 60 acres and known as Parcels III, IV, V, and VI of the 
NASA Industrial Plant, Downey, California.
    (b)(1) Delay in Payment of Consideration.--After the end of the 20-
year period beginning on the date on which the conveyance

[[Page 110 STAT. 2934]]

under subsection (a) is completed, the City of Downey shall pay to the 
United States an amount equal to fair market value of the conveyed 
property as of the date of the Federal conveyance.
    (2) Effect of Reconveyance by the City.--If the City of Downey 
reconveys all or any part of the conveyed property during such 20-year 
period, the City shall pay to the United States an amount equal to the 
fair market value of the reconveyed property as of the time of the 
reconveyance, excluding the value of any improvements made to the 
property by the City.
    (3) Determination of Fair Market Value.--The Administrator of GSA 
shall determine fair market value in accordance with Federal appraisal 
standards and procedures.
    (4) Treatment of Leases.--The Administrator of GSA may treat a lease 
of the property within such 20-year period as a reconveyance if the 
Administrator determines that the lease is being used to avoid 
application of paragraph (b)(2).
    (5) Deposit of Proceeds.--The Administrator of GSA shall deposit any 
proceeds received under this subsection in the special account 
established pursuant to section 204(h)(2) of the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 485(h)(2)).
    (c) The exact acreage and legal description of the real property to 
be conveyed under subsection (a) shall be determined by 
a survey satisfactory to the Administrator of GSA. The cost of the 
survey shall be borne by the City of Downey, California.
    (d) The Administrator of GSA may require such additional terms and 
conditions in connection with the conveyance under subsection (a) as the 
Administrator of GSA considers appropriate to protect the interests of 
the United States.
    (e) If the City at any time after the conveyance of the property 
under subsection (a) notifies the Administrator of GSA that the City no 
longer wishes to retain the property, it may convey the property under 
the terms of subsection (b), or, it may revert all right, title, and 
interest in and to the property (including any facilities, equipment, or 
fixtures conveyed, but excluding the value of any improvements made to 
the property by the City) to the United States, and the United States 
shall have the right of immediate entry onto the property.

                          TITLE V--SUPPLEMENTAL

                     DEPARTMENT OF VETERANS AFFAIRS

                    Veterans Benefits Administration

                        compensation and pensions

    For an additional amount for ``Compensation and Pensions'', 
$100,000,000, to be made available upon enactment of this Act, to remain 
available until expended.

[[Page 110 STAT. 2935]]

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                Government National Mortgage Association

 guarantees of mortgage backed securities loan guarantee program account

    During fiscal year 1996 and in addition to commitments previously 
provided, additional commitments to issue guarantees to carry out 
section 306 of the National Housing Act, as amended (12 U.S.C. 1721(g)), 
shall not exceed $20,000,000,000.

 TITLE <<NOTE: Newborns' and Mothers' Health Protection Act of 1996.>>  
VI--NEWBORNS' AND MOTHERS' HEALTH PROTECTION ACT OF 1996

    Sec. 601. <<NOTE: 42 USC 201 note.>>  Short Title.--This title may 
be cited as the ``Newborns' and Mothers' Health Protection Act of 
1996''.

    Sec. 602. <<NOTE: 42 USC 300gg-4 note.>>  Findings.--Congress finds 
that--
            (1) the length of post-delivery hospital stay should be 
        based on the unique characteristics of each mother and her 
        newborn child, taking into consideration the health of the 
        mother, the health and stability of the newborn, the ability and 
        confidence of the mother and the father to care for their 
        newborn, the adequacy of support systems at home, and the access 
        of the mother and her newborn to appropriate follow-up health 
        care; and
            (2) the timing of the discharge of a mother and her newborn 
        child from the hospital should be made by the attending provider 
        in consultation with the mother.

    Sec. 603. Amendments to the Employee Retirement Income Security Act 
of 1974.--(a) In General.--Part 7 of subtitle B of title I of the 
Employee Retirement Income Security Act of 1974 (added by section 101(a) 
of the Health Insurance Portability and Accountability Act of 
1996) <<NOTE: Ante, p. 1939.>>  is amended--
            (1) by amending the heading of the part to read as follows:

               ``Part 7--Group Health Plan Requirements'';

            (2) by inserting after the part heading the following:

     ``Subpart A--Requirements Relating to Portability, Access, and 
                             Renewability'';

            (3) by redesignating <<NOTE: 29 USC 1191-1191c.>>  sections 
        704 through 707 as sections 731 through 734, respectively;
            (4) by inserting before section 731 (as so redesignated) the 
        following new heading:

                   ``Subpart C--General Provisions'';

        and
            (5) by inserting after section 703 the following new 
        subpart:

                     ``Subpart B--Other Requirements

``SEC. 711. <<NOTE: 29 USC 1185.>>  STANDARDS RELATING TO BENEFITS FOR 
            MOTHERS AND NEWBORNS.

    ``(a) Requirements for Minimum Hospital Stay Following Birth.--

[[Page 110 STAT. 2936]]

            ``(1) In general.--A group health plan, and a health 
        insurance issuer offering group health insurance coverage, may 
        not--
                    ``(A) except as provided in paragraph (2)--
                          ``(i) restrict benefits for any hospital 
                      length of stay in connection with childbirth for 
                      the mother or newborn child, following a normal 
                      vaginal delivery, to less than 48 hours, or
                          ``(ii) restrict benefits for any hospital 
                      length of stay in connection with childbirth for 
                      the mother or newborn child, following a cesarean 
                      section, to less than 96 hours; or
                    ``(B) require that a provider obtain authorization 
                from the plan or the issuer for prescribing any length 
                of stay required under subparagraph (A) (without regard 
                to paragraph (2)).
            ``(2) Exception.--Paragraph (1)(A) shall not apply in 
        connection with any group health plan or health insurance issuer 
        in any case in which the decision to discharge the mother or her 
        newborn child prior to the expiration of the minimum length of 
        stay otherwise required under paragraph (1)(A) is made by an 
        attending provider in consultation with the mother.

    ``(b) Prohibitions.--A group health plan, and a health insurance 
issuer offering group health insurance coverage in connection with a 
group health plan, may not--
            ``(1) deny to the mother or her newborn child eligibility, 
        or continued eligibility, to enroll or to renew coverage under 
        the terms of the plan, solely for the purpose of avoiding the 
        requirements of this section;
            ``(2) provide monetary payments or rebates to mothers to 
        encourage such mothers to accept less than the minimum 
        protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending provider because such provider 
        provided care to an individual participant or beneficiary in 
        accordance with this section;
            ``(4) provide incentives (monetary or otherwise) to an 
        attending provider to induce such provider to provide care to an 
        individual participant or beneficiary in a manner inconsistent 
        with this section; or
            ``(5) subject to subsection (c)(3), restrict benefits for 
        any portion of a period within a hospital length of stay 
        required under subsection (a) in a manner which is less 
        favorable than the benefits provided for any preceding portion 
        of such stay.

    ``(c) Rules of Construction.--
            ``(1) Nothing in this section shall be construed to require 
        a mother who is a participant or beneficiary--
                    ``(A) to give birth in a hospital; or
                    ``(B) to stay in the hospital for a fixed period of 
                time following the birth of her child.
            ``(2) This section shall not apply with respect to any group 
        health plan, or any group health insurance coverage offered by a 
        health insurance issuer, which does not provide benefits for 
        hospital lengths of stay in connection with childbirth for a 
        mother or her newborn child.
            ``(3) Nothing in this section shall be construed as 
        preventing a group health plan or issuer from imposing 
        deductibles, coinsurance, or other cost-sharing in relation to 
        benefits for

[[Page 110 STAT. 2937]]

        hospital lengths of stay in connection with childbirth for a 
        mother or newborn child under the plan (or under health 
        insurance coverage offered in connection with a group health 
        plan), except that such coinsurance or other cost-sharing for 
        any portion of a period within a hospital length of stay 
        required under subsection (a) may not be greater than such 
        coinsurance or cost-sharing for any preceding portion of such 
        stay.

    ``(d) Notice Under Group Health Plan.--The imposition of the 
requirements of this section shall be treated as a material modification 
in the terms of the plan described in section 102(a)(1), for purposes of 
assuring notice of such requirements under the plan; except that the 
summary description required to be provided under the last sentence of 
section 104(b)(1) with respect to such modification shall be provided by 
not later than 60 days after the first day of the first plan year in 
which such requirements apply.
    ``(e) Level and Type of Reimbursements.--Nothing in this section 
shall be construed to prevent a group health plan or a health insurance 
issuer offering group health insurance coverage from negotiating the 
level and type of reimbursement with a provider for care provided in 
accordance with this section.

    ``(f) Preemption; Exception for Health Insurance Coverage in Certain 
States.--
            ``(1) In general.--The requirements of this section shall 
        not apply with respect to health insurance coverage if there is 
        a State law (as defined in section 731(d)(1)) for a State that 
        regulates such coverage that is described in any of the 
        following subparagraphs:
                    ``(A) Such State law requires such coverage to 
                provide for at least a 48-hour hospital length of stay 
                following a normal vaginal delivery and at least a 96-
                hour hospital length of stay following a cesarean 
                section.
                    ``(B) Such State law requires such coverage to 
                provide for maternity and pediatric care in accordance 
                with guidelines established by the American College of 
                Obstetricians and Gynecologists, the American Academy of 
                Pediatrics, or other established professional medical 
                associations.
                    ``(C) Such State law requires, in connection with 
                such coverage for maternity care, that the hospital 
                length of stay for such care is left to the decision of 
                (or required to be made by) the attending provider in 
                consultation with the mother.
            ``(2) Construction.--Section 731(a)(1) shall not be 
        construed as superseding a State law described in paragraph 
        (1).''.

    (b) Conforming Amendments.--
            (1) Section 731(c) of such Act (as added by section 101 of 
        the Health Insurance Portability and Accountability Act of 1996 
        and redesignated by the preceding provisions of this section) 
        is <<NOTE: 29 USC 1191.>>  amended by striking ``Nothing'' and 
        inserting ``Except as provided in section 711, nothing''.
            (2) Section 732(a) of such Act (as added by section 101 of 
        the Health Insurance Portability and Accountability Act of 1996 
        and redesignated by the preceding provisions of this section) 
        is <<NOTE: 29 USC 1191a.>>  amended by inserting ``(other than 
        section 711)'' after ``part''.
            (3) Title I of such Act (as amended by section 101 of the 
        Health Insurance Portability and Accountability Act of 1996

[[Page 110 STAT. 2938]]

        and the preceding provisions of this section) is further 
        amended--
                    (A) in the last sentence of section 4(b) <<NOTE: 29 
                USC 1003.>> , by striking ``section 706(b)(2)'', 
                ``section 706(b)(1)'', and ``section 706(a)(1)'' and 
                inserting ``section 733(b)(2)'', ``section 733(b)(1)'', 
                and ``section 733(a)(1)'', respectively;
                    (B) in section 101(g), <<NOTE: 29 USC 1021.>>  by 
                striking ``section 706(a)(2)'' and inserting ``section 
                733(a)(2)'';
                    (C) in section 102(b), <<NOTE: 29 USC 1022.>>  by 
                striking ``section 706(a)(1)'' each place it appears and 
                inserting ``section 733(a)(1), and by striking ``section 
                706(b)(2)'' and inserting ``section 733(b)(2)'';
                    (D) in section 104(b)(1), <<NOTE: 29 USC 1024.>>  by 
                striking ``section 706(a)(1)'' each place it appears and 
                inserting ``section 733(a)(1)'';
                    (E) in section 502(b)(3), <<NOTE: 29 USC 1132.>>  by 
                striking ``section 706(a)(1)'' and inserting ``section 
                733(a)(1)'';
                    (F) in section 506(c), <<NOTE: 29 USC 1136.>>  by 
                striking ``section 706(a)(2)'' and inserting ``section 
                733(a)(2)'';
                    (G) in section 514(b)(9), <<NOTE: 29 USC 1144.>>  by 
                striking ``section 704'' and inserting ``section 731'';
                    (H) in the last sentence of section 
                701(c)(1), <<NOTE: 29 USC 1181.>>  by striking ``section 
                706(c)'' and inserting ``section 733(c)'';
                    (I) in section 732(b), <<NOTE: 29 USC 1191a.>>  by 
                striking ``section 706(c)(1)'' and inserting ``section 
                733(c)(1)'';
                    (J) in section 732(c)(1), by striking ``section 
                706(c)(2)'' and inserting ``section 733(c)(2)'';
                    (K) in section 732(c)(2), by striking ``section 
                706(c)(3)'' and inserting ``section 733(c)(3)''; and
                    (L) in section 732(c)(3), by striking ``section 
                706(c)(4)'' and inserting ``section 733(c)(4)''.
            (4) The table of contents in section 1 of such Act is 
        amended by striking the items relating to part 7 and inserting 
        the following:

                ``Part 7--Group Health Plan Requirements

     ``Subpart A--Requirements Relating to Portability, Access, and 
                              Renewability

``Sec. 701. Increased portability through limitation on preexisting 
           condition exclusions.
``Sec. 702. Prohibiting discrimination against individual participants 
           and beneficiaries based on health status.
``Sec. 703. Guaranteed renewability in multiemployer plans and multiple 
           employer welfare arrangements.

                     ``Subpart B--Other Requirements

``Sec. 711. Standards relating to benefits for mothers and newborns.

                     ``Subpart C--General Provisions

``Sec. 731. Preemption; State flexibility; construction.
``Sec. 732. Special rules relating to group health plans.
``Sec. 733. Definitions.
``Sec. 734. Regulations.''.

    (c) <<NOTE: Applicability.>>  Effective Date.--The amendments made 
by this section shall apply with respect to group health plans for plan 
years beginning on or after January 1, 1998.

    Sec. 604. Amendments to the Public Health Service Act Relating to 
the Group Market.--(a) In General.--Title XXVII of the Public Health 
Service Act (as added by section 102 of the Health Insurance Portability 
and Accountability Act of 1996) <<NOTE: Ante, p. 1955.>>  is amended--

[[Page 110 STAT. 2939]]

            (1) by amending the title heading to read as follows:

  ``TITLE XXVII--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE'';

            (2) by redesignating subparts 2 and 3 of part A as subparts 
        3 and 4 of such part;
            (3) by inserting after subpart 1 of part A the following new 
        subpart:

                     ``Subpart 2--Other Requirements

``SEC. 2704. <<NOTE: 42 USC 300gg-4.>>  STANDARDS RELATING TO BENEFITS 
            FOR MOTHERS AND NEWBORNS.

    ``(a) Requirements for Minimum Hospital Stay Following Birth.--
            ``(1) In general.--A group health plan, and a health 
        insurance issuer offering group health insurance coverage, may 
        not--
                    ``(A) except as provided in paragraph (2)--
                          ``(i) restrict benefits for any hospital 
                      length of stay in connection with childbirth for 
                      the mother or newborn child, following a normal 
                      vaginal delivery, to less than 48 hours, or
                          ``(ii) restrict benefits for any hospital 
                      length of stay in connection with childbirth for 
                      the mother or newborn child, following a cesarean 
                      section, to less than 96 hours, or
                    ``(B) require that a provider obtain authorization 
                from the plan or the issuer for prescribing any length 
                of stay required under subparagraph (A) (without regard 
                to paragraph (2)).
            ``(2) Exception.--Paragraph (1)(A) shall not apply in 
        connection with any group health plan or health insurance issuer 
        in any case in which the decision to discharge the mother or her 
        newborn child prior to the expiration of the minimum length of 
        stay otherwise required under paragraph (1)(A) is made by an 
        attending provider in consultation with the mother.

    ``(b) Prohibitions.--A group health plan, and a health insurance 
issuer offering group health insurance coverage in connection with a 
group health plan, may not--
            ``(1) deny to the mother or her newborn child eligibility, 
        or continued eligibility, to enroll or to renew coverage under 
        the terms of the plan, solely for the purpose of avoiding the 
        requirements of this section;
            ``(2) provide monetary payments or rebates to mothers to 
        encourage such mothers to accept less than the minimum 
        protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending provider because such provider 
        provided care to an individual participant or beneficiary in 
        accordance with this section;
            ``(4) provide incentives (monetary or otherwise) to an 
        attending provider to induce such provider to provide care to an 
        individual participant or beneficiary in a manner inconsistent 
        with this section; or
            ``(5) subject to subsection (c)(3), restrict benefits for 
        any portion of a period within a hospital length of stay 
        required

[[Page 110 STAT. 2940]]

        under subsection (a) in a manner which is less favorable than 
        the benefits provided for any preceding portion of such stay.

    ``(c) Rules of Construction.--
            ``(1) Nothing in this section shall be construed to require 
        a mother who is a participant or beneficiary--
                    ``(A) to give birth in a hospital; or
                    ``(B) to stay in the hospital for a fixed period of 
                time following the birth of her child.
            ``(2) This section shall not apply with respect to any group 
        health plan, or any group health insurance coverage offered by a 
        health insurance issuer, which does not provide benefits for 
        hospital lengths of stay in connection with childbirth for a 
        mother or her newborn child.
            ``(3) Nothing in this section shall be construed as 
        preventing a group health plan or issuer from imposing 
        deductibles, coinsurance, or other cost-sharing in relation to 
        benefits for hospital lengths of stay in connection with 
        childbirth for a mother or newborn child under the plan (or 
        under health insurance coverage offered in connection with a 
        group health plan), except that such coinsurance or other cost-
        sharing for any portion of a period within a hospital length of 
        stay required under subsection (a) may not be greater than such 
        coinsurance or cost-sharing for any preceding portion of such 
        stay.

    ``(d) Notice.--A group health plan under this part shall comply with 
the notice requirement under section 711(d) of the Employee Retirement 
Income Security Act of 1974 with respect to the requirements of this 
section as if such section applied to such plan.
    ``(e) Level and Type of Reimbursements.--Nothing in this section 
shall be construed to prevent a group health plan or a health insurance 
issuer offering group health insurance coverage from negotiating the 
level and type of reimbursement with a provider for care provided in 
accordance with this section.

    ``(f) Preemption; Exception for Health Insurance Coverage in Certain 
States.--
            ``(1) In general.--The requirements of this section shall 
        not apply with respect to health insurance coverage if there is 
        a State law (as defined in section 2723(d)(1)) for a State that 
        regulates such coverage that is described in any of the 
        following subparagraphs:
                    ``(A) Such State law requires such coverage to 
                provide for at least a 48-hour hospital length of stay 
                following a normal vaginal delivery and at least a 96-
                hour hospital length of stay following a cesarean 
                section.
                    ``(B) Such State law requires such coverage to 
                provide for maternity and pediatric care in accordance 
                with guidelines established by the American College of 
                Obstetricians and Gynecologists, the American Academy of 
                Pediatrics, or other established professional medical 
                associations.
                    ``(C) Such State law requires, in connection with 
                such coverage for maternity care, that the hospital 
                length of stay for such care is left to the decision of 
                (or required to be made by) the attending provider in 
                consultation with the mother.
            ``(2) Construction.--Section 2723(a)(1) shall not be 
        construed as superseding a State law described in paragraph 
        (1).''.

    (b) Conforming Amendments.--

[[Page 110 STAT. 2941]]

            (1) Section 2721 of such Act (as added by section 102 of the 
        Health Insurance Portability and Accountability Act of 
        1996) <<NOTE: Ante, p. 1967.>>  is amended--
                    (A) in subsection (a), by striking ``subparts 1 and 
                2'' and inserting ``subparts 1 and 3'', and
                    (B) in subsections (b) through (d), by striking 
                ``subparts 1 and 2'' each place it appears and inserting 
                ``subparts 1 through 3''.
            (2) Section 2723(c) of such Act (as added by section 102 of 
        the Health Insurance Portability and Accountability Act of 
        1996) <<NOTE: Ante, p. 1971.>>  is amended by inserting ``(other 
        than section 2704)'' after ``part''.

    (c) Effective Date.--The <<NOTE: 42 USC 300gg-4 note.>> amendments 
made by this section shall apply with respect to group health plans for 
plan years beginning on or after January 1, 1998.

    Sec. 605. Amendments to the Public Health Service Act Relating to 
the Individual Market.--(a) In General.--Part B of title XXVII of the 
Public Health Service Act (as added by section 111 of the Health 
Insurance Portability and Accountability Act of 1996) <<NOTE: Ante, p. 
1978.>>  is amended--
            (1) by inserting after the part heading the following:

   ``Subpart 1--Portability, Access, and Renewability Requirements'';

            (2) by redesignating sections 2745, <<NOTE: 42 USC 300gg-
        61--300gg-63.>> 2746, and 2747 as sections 2761, 2762, and 2763, 
        respectively;
            (3) by inserting before section 2761 (as so redesignated) 
        the following:

                 ``Subpart 3--General Provisions''; and

            (4) by inserting after section 2744 the following:

                     ``Subpart 3--Other Requirements

``SEC. 2751. <<NOTE: 42 USC 300gg-51.>>  STANDARDS RELATING TO BENEFITS 
            FOR MOTHERS AND NEWBORNS.

    ``(a) In General.--The provisions of section 2704 (other than 
subsections (d) and (f)) shall apply to health insurance coverage 
offered by a health insurance issuer in the individual market in the 
same manner as it applies to health insurance coverage offered by a 
health insurance issuer in connection with a group health plan in the 
small or large group market.
    ``(b) Notice Requirement.--A health insurance issuer under this part 
shall comply with the notice requirement under section 711(d) of the 
Employee Retirement Income Security Act of 1974 with respect to the 
requirements referred to in subsection (a) as if such section applied to 
such issuer and such issuer were a group health plan.

    ``(c) Preemption; Exception for Health Insurance 
Coverage in Certain States.--
            ``(1) In general.--The requirements of this section shall 
        not apply with respect to health insurance coverage if there is 
        a State law (as defined in section 2723(d)(1)) for a State that 
        regulates such coverage that is described in any of the 
        following subparagraphs:

[[Page 110 STAT. 2942]]

                    ``(A) Such State law requires such coverage to 
                provide for at least a 48-hour hospital length of stay 
                following a normal vaginal delivery and at least a 96-
                hour hospital length of stay following a cesarean 
                section.
                    ``(B) Such State law requires such coverage to 
                provide for maternity and pediatric care in accordance 
                with guidelines established by the American College of 
                Obstetricians and Gynecologists, the American Academy of 
                Pediatrics, or other established professional medical 
                associations.
                    ``(C) Such State law requires, in connection with 
                such coverage for maternity care, that the hospital 
                length of stay for such care is left to the decision of 
                (or required to be made by) the attending provider in 
                consultation with the mother.
            ``(2) Construction.--Section 2762(a) shall not be construed 
        as superseding a State law described in paragraph (1).''.

    (b) Conforming Amendments.--Such part (as so added) is further 
amended as follows:
            (1) In section 2744(a)(1), strike ``2746(b)'' <<NOTE: 42 USC 
        300gg-44.>>  and insert ``2762(b)''.
            (2) In section 2745(a)(1) <<NOTE: 42 USC 300gg-61.>>  
        (before redesignation under subsection (a)(1)), strike ``2746'' 
        and insert ``2762''.
            (3) In section 2746(b) <<NOTE: 42 USC 300gg-62.>>  (before 
        redesignation under subsection (a)(1))--
                    (A) by inserting ``(1)'' after the dash, and
                    (B) by adding at the end the following:

    ``(2) Nothing in this part (other than section 2751) shall be 
construed as requiring health insurance coverage offered in the 
individual market to provide specific benefits under the terms of such 
coverage.''.

    (c) <<NOTE: Applicability. 42 USC 300gg-44 note.>>  Effective 
Date.--The amendments made by this section shall apply with respect to 
health insurance coverage offered, sold, issued, renewed, in effect, or 
operated in the individual market on or after January 1, 1998.

    Sec. 606. <<NOTE: 42 USC 300gg-4 note.>>  Reports to Congress 
Concerning Childbirth.--(a) Findings.--Congress finds that--
            (1) childbirth is one part of a continuum of experience that 
        includes prepregnancy, pregnancy and prenatal care, labor and 
        delivery, the immediate postpartum period, and a longer period 
        of adjustment for the newborn, the mother, and the family;
            (2) health care practices across this continuum are changing 
        in response to health care financing and delivery system 
        changes, science and clinical research, and patient preferences; 
        and
            (3) there is a need--
                    (A) to examine the issues and consequences 
                associated with the length of hospital stays following 
                childbirth;
                    (B) to examine the follow-up practices for mothers 
                and newborns used in conjunction with shorter hospital 
                stays;
                    (C) to identify appropriate health care practices 
                and procedures with regard to the hospital discharge of 
                newborns and mothers;
                    (D) to examine the extent to which such care is 
                affected by family and environmental factors; and
                    (E) to examine the content of care during hospital 
                stays following childbirth.

[[Page 110 STAT. 2943]]

    (b) <<NOTE: Establishment.>>  Advisory Panel.--
            (1) In general.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary of Health and Human 
        Services (in this section referred to as the ``Secretary'') 
        shall establish an advisory panel (referred to in this section 
        as the ``advisory panel'')--
                    (A) to guide and review methods, procedures, and 
                data collection necessary to conduct the study described 
                in subsection (c) in a manner that is intended to 
                enhance the quality, safety, and effectiveness of health 
                care services provided to mothers and newborns;
                    (B) to develop a consensus among the members of the 
                advisory panel regarding the appropriateness of the 
                specific requirements of this title; and
                    (C) to prepare and submit to the Secretary, as part 
                of the report of the Secretary submitted under 
                subsection (d), a report summarizing the consensus (if 
                any) developed under subparagraph (B) or the reasons for 
                not reaching such a consensus.
            (2) Participation.--
                    (A) Department representatives.--The Secretary shall 
                ensure that representatives from within the Department 
                of Health and Human Services that have expertise in the 
                area of maternal and child health or in outcomes 
                research are appointed to the advisory panel.
                    (B) Representatives of public and private sector 
                entities.--
                          (i) In general.--The Secretary shall ensure 
                      that members of the advisory panel include 
                      representatives of public and private sector 
                      entities having knowledge or experience in one or 
                      more of the following areas:
                                    (I) Patient care.
                                    (II) Patient education.
                                    (III) Quality assurance.
                                    (IV) Outcomes research.
                                    (V) Consumer issues.
                          (ii) Requirement.--The panel shall include 
                      representatives of each of the following 
                      categories:
                                    (I) Health care practitioners.
                                    (II) Health plans.
                                    (III) Hospitals.
                                    (IV) Employers.
                                    (V) States.
                                    (VI) Consumers.

    (c) Studies.--
            (1) In general.--The Secretary shall conduct a study of--
                    (A) the factors affecting the continuum of care with 
                respect to maternal and child health care, including 
                outcomes following childbirth;
                    (B) the factors determining the length of hospital 
                stay following childbirth;
                    (C) the diversity of negative or positive outcomes 
                affecting mothers, infants, and families;
                    (D) the manner in which post natal care has changed 
                over time and the manner in which that care has adapted 
                or related to changes in the length of hospital stay, 
                taking into account--

[[Page 110 STAT. 2944]]

                          (i) the types of post natal care available and 
                      the extent to which such care is accessed; and
                          (ii) the challenges associated with providing 
                      post natal care to all populations, including 
                      vulnerable populations, and solutions for 
                      overcoming these challenges; and
                    (E) the financial incentives that may--
                          (i) impact the health of newborns and 
                      mothers; and
                          (ii) influence the clinical decisionmaking of 
                      health care providers.
            (2) Resources.--The Secretary shall provide to the advisory 
        panel the resources necessary to carry out the duties of the 
        advisory panel.

    (d) Reports.--
            (1) In general.--The Secretary shall prepare and submit to 
        the Committee on Labor and Human Resources of the Senate and the 
        Committee on Commerce of the House of Representatives a report 
        that contains--
                    (A) a summary of the study conducted under sub-
                section (c);
                    (B) a summary of the best practices used in the 
                public and private sectors for the care of newborns and 
                mothers;
                    (C) recommendations for improvements in prenatal 
                care, post natal care, delivery and follow-up care, and 
                whether the implementation of such improvements should 
                be accomplished by the private health care sector, 
                Federal or State governments, or any combination 
                thereof; and
                    (D) limitations on the databases in existence on the 
                date of the enactment of this Act.
            (2) Deadlines.--The Secretary shall prepare and submit to 
        the Committees referred to in paragraph (1)--
                    (A) an initial report concerning the study conducted 
                under subsection (c) and elements described in paragraph 
                (1), not later than 18 months after the date of the 
                enactment of this Act;
                    (B) an interim report concerning such study and 
                elements not later than 3 years after the date of the 
                enactment of this Act; and
                    (C) a final report concerning such study and 
                elements not later than 5 years after the date of the 
                enactment of this Act.

    (e) Termination of Panel.--The advisory panel shall terminate on the 
date that occurs 60 days after the date on which the last report is 
submitted under subsection (d).

 TITLE <<NOTE: Mental Health Parity Act of 1996.>>  VII--PARITY IN THE 
APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH BENEFITS

    Sec. 701. <<NOTE: 42 USC 201 note.>>  Short Title.--This title may 
be cited as the ``Mental Health Parity Act of 1996''.

    Sec. 702. Amendments to the Employee Retirement Income Security Act 
of 1974.--(a) In General.--Subpart B of part 7 of subtitle B of title I 
of the Employee Retirement Income Security Act of 1974 (as added by 
section 603(a)) is amended by adding at the end the following new 
section:

[[Page 110 STAT. 2945]]

``SEC. 712. <<NOTE: 29 USC 1185a.>>  PARITY IN THE APPLICATION OF 
            CERTAIN LIMITS TO 
            MENTAL HEALTH BENEFITS.

    ``(a) In General.--
            ``(1) Aggregate lifetime limits.--In the case of a group 
        health plan (or health insurance coverage offered in connection 
        with such a plan) that provides both medical and surgical 
        benefits and mental health benefits--
                    ``(A) No lifetime limit.--If the plan or coverage 
                does not include an aggregate lifetime limit on 
                substantially all medical and surgical benefits, the 
                plan or coverage may not impose any aggregate lifetime 
                limit on mental health benefits.
                    ``(B) Lifetime limit.--If the plan or coverage 
                includes an aggregate lifetime limit on substantially 
                all medical and surgical benefits (in this paragraph 
                referred to as the `applicable lifetime limit'), the 
                plan or coverage shall either--
                          ``(i) apply the applicable lifetime limit both 
                      to the medical and surgical benefits to which it 
                      otherwise would apply and to mental health 
                      benefits and not distinguish in the application of 
                      such limit between such medical and surgical 
                      benefits and mental health benefits; or
                          ``(ii) not include any aggregate lifetime 
                      limit on mental health benefits that is less than 
                      the applicable lifetime limit.
                    ``(C) Rule in case of different limits.--In the case 
                of a plan or coverage that is not described in 
                subparagraph (A) or (B) and that includes no or 
                different aggregate lifetime limits on different 
                categories of medical and surgical benefits, the 
                Secretary shall establish rules under which subparagraph 
                (B) is applied to such plan or coverage with respect to 
                mental health benefits by substituting for the 
                applicable lifetime limit an average aggregate lifetime 
                limit that is computed taking into account the weighted 
                average of the aggregate lifetime limits applicable to 
                such categories.
            ``(2) Annual limits.--In the case of a group health plan (or 
        health insurance coverage offered in connection with such a 
        plan) that provides both medical and surgical benefits and 
        mental health benefits--
                    ``(A) No annual limit.--If the plan or coverage does 
                not include an annual limit on substantially all medical 
                and surgical benefits, the plan or coverage may not 
                impose any annual limit on mental health benefits.
                    ``(B) Annual limit.--If the plan or coverage 
                includes an annual limit on substantially all medical 
                and surgical benefits (in this paragraph referred to as 
                the `applicable annual limit'), the plan or coverage 
                shall either--
                          ``(i) apply the applicable annual limit both 
                      to medical and surgical benefits to which it 
                      otherwise would apply and to mental health 
                      benefits and not distinguish in the application of 
                      such limit between such medical and surgical 
                      benefits and mental health benefits; or
                          ``(ii) not include any annual limit on mental 
                      health benefits that is less than the applicable 
                      annual limit.

[[Page 110 STAT. 2946]]

                    ``(C) Rule in case of different limits.--In the case 
                of a plan or coverage that is not described in 
                subparagraph (A) or (B) and that includes no or 
                different annual limits on different categories of 
                medical and surgical benefits, the Secretary shall 
                establish rules under which subparagraph (B) is applied 
                to such plan or coverage with respect to mental health 
                benefits by substituting for the applicable annual limit 
                an average annual limit that is computed taking into 
                account the weighted average of the annual limits 
                applicable to such categories.

    ``(b) Construction.--Nothing in this section shall be 
construed--
            ``(1) as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        mental health benefits; or
            ``(2) in the case of a group health plan (or health 
        insurance coverage offered in connection with such a plan) that 
        provides mental health benefits, as affecting the terms and 
        conditions (including cost sharing, limits on numbers of visits 
        or days of coverage, and requirements relating to medical 
        necessity) relating to the amount, duration, or scope of mental 
        health benefits under the plan or coverage, except as 
        specifically provided in subsection (a) (in regard to parity in 
        the imposition of aggregate lifetime limits and annual limits 
        for mental health benefits).

    ``(c) Exemptions.--
            ``(1) Small employer exemption.--
                    ``(A) In general.--This section shall not apply to 
                any group health plan (and group health insurance 
                coverage offered in connection with a group health plan) 
                for any plan year of a small employer.
                    ``(B) Small employer.--For purposes of subparagraph 
                (A), the term `small employer' means, in connection with 
                a group health plan with respect to a calendar year and 
                a plan year, an employer who employed an average of at 
                least 2 but not more than 50 employees on business days 
                during the preceding calendar year and who employs at 
                least 2 employees on the first day of the plan year.
                    ``(C) Application of certain rules in determination 
                of employer size.--For purposes of this paragraph--
                          ``(i) Application of aggregation rule for 
                      employers.--Rules similar to the rules under 
                      subsections (b), (c), (m), and (o) of section 414 
                      of the Internal Revenue Code of 1986 shall apply 
                      for purposes of treating persons as a single 
                      employer.
                          ``(ii) Employers not in existence in preceding 
                      year.--In the case of an employer which was not in 
                      existence throughout the preceding calendar year, 
                      the determination of whether such employer is a 
                      small employer shall be based on the average 
                      number of employees that it is reasonably expected 
                      such employer will employ on business days in the 
                      current calendar year.
                          ``(iii) Predecessors.--Any reference in this 
                      paragraph to an employer shall include a reference 
                      to any predecessor of such employer.

[[Page 110 STAT. 2947]]

            ``(2) Increased cost exemption.--This section shall not 
        apply with respect to a group health plan (or health insurance 
        coverage offered in connection with a group health plan) if the 
        application of this section to such plan (or to such coverage) 
        results in an increase in the cost under the plan (or for such 
        coverage) of at least 1 percent.

    ``(d) Separate Application to Each Option Offered.--In the case of a 
group health plan that offers a participant or beneficiary two or more 
benefit package options under the plan, the requirements of this section 
shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Aggregate lifetime limit.--The term `aggregate 
        lifetime limit' means, with respect to benefits under a group 
        health plan or health insurance coverage, a dollar limitation on 
        the total amount that may be paid with respect to such benefits 
        under the plan or health insurance coverage with respect to an 
        individual or other coverage unit.
            ``(2) Annual limit.--The term `annual limit' means, with 
        respect to benefits under a group health plan or health 
        insurance coverage, a dollar limitation on the total amount of 
        benefits that may be paid with respect to such benefits in a 12-
        month period under the plan or health insurance coverage with 
        respect to an individual or other coverage unit.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to 
        medical or surgical services, as defined under the terms of the 
        plan or coverage (as the case may be), but does not include 
        mental health benefits.
            ``(4) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to mental health services, 
        as defined under the terms of the plan or coverage (as the case 
        may be), but does not include benefits with respect to treatment 
        of substance abuse or chemical dependency.

    ``(f) Sunset.--This section shall not apply to benefits for services 
furnished on or after September 30, 2001.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act, as amended by section 603 of this Act, is amended by inserting 
after the item relating to section 711 the following new item:

``Sec. 712. Parity in the application of certain limits to mental health 
           benefits.''.

    (c) <<NOTE: Applicability. 29 USC 1183b note.>>  Effective Date.--
The amendments made by this section shall apply with respect to group 
health plans for plan years beginning on or after January 1, 1998.

    Sec. 703. Amendments to the Public Health Service Act Relating to 
the Group Market.--(a) In General.--Subpart 2 of part A of title XXVII 
of the Public Health Service Act (as added by section 604(a)) is amended 
by adding at the end the following new section:

``SEC. 2705. <<NOTE: 42 USC 300gg-5.>>  PARITY IN THE APPLICATION OF 
            CERTAIN LIMITS TO 
            MENTAL HEALTH BENEFITS.

    ``(a) In General.--
            ``(1) Aggregate lifetime limits.--In the case of a group 
        health plan (or health insurance coverage offered in connection 
        with such a plan) that provides both medical and surgical 
        benefits and mental health benefits--

[[Page 110 STAT. 2948]]

                    ``(A) No lifetime limit.--If the plan or coverage 
                does not include an aggregate lifetime limit on 
                substantially all medical and surgical benefits, the 
                plan or coverage may not impose any aggregate lifetime 
                limit on mental health benefits.
                    ``(B) Lifetime limit.--If the plan or coverage 
                includes an aggregate lifetime limit on substantially 
                all medical and surgical benefits (in this paragraph 
                referred to as the `applicable lifetime limit'), the 
                plan or coverage shall either--
                          ``(i) apply the applicable lifetime limit both 
                      to the medical and surgical benefits to which it 
                      otherwise would apply and to mental health 
                      benefits and not distinguish in the application of 
                      such limit between such medical and surgical 
                      benefits and mental health benefits; or
                          ``(ii) not include any aggregate lifetime 
                      limit on mental health benefits that is less than 
                      the applicable lifetime limit.
                    ``(C) Rule in case of different limits.--In the case 
                of a plan or coverage that is not described in 
                subparagraph (A) or (B) and that includes no or 
                different aggregate lifetime limits on different 
                categories of medical and surgical benefits, the 
                Secretary shall establish rules under which subparagraph 
                (B) is applied to such plan or coverage with respect to 
                mental health benefits by substituting for the 
                applicable lifetime limit an average aggregate lifetime 
                limit that is computed taking into account the weighted 
                average of the aggregate lifetime limits applicable to 
                such categories.
            ``(2) Annual limits.--In the case of a group health plan (or 
        health insurance coverage offered in connection with such a 
        plan) that provides both medical and surgical benefits and 
        mental health benefits--
                    ``(A) No annual limit.--If the plan or coverage does 
                not include an annual limit on substantially all medical 
                and surgical benefits, the plan or coverage may not 
                impose any annual limit on mental health benefits.
                    ``(B) Annual limit.--If the plan or coverage 
                includes an annual limit on substantially all medical 
                and surgical benefits (in this paragraph referred to as 
                the `applicable annual limit'), the plan or coverage 
                shall either--
                          ``(i) apply the applicable annual limit both 
                      to medical and surgical benefits to which it 
                      otherwise would apply and to mental health 
                      benefits and not distinguish in the application of 
                      such limit between such medical and surgical 
                      benefits and mental health benefits; or
                          ``(ii) not include any annual limit on mental 
                      health benefits that is less than the applicable 
                      annual limit.
                    ``(C) Rule in case of different limits.--In the case 
                of a plan or coverage that is not described in 
                subparagraph (A) or (B) and that includes no or 
                different annual limits on different categories of 
                medical and surgical benefits, the Secretary shall 
                establish rules under which subparagraph (B) is applied 
                to such plan or coverage with respect to mental health 
                benefits by substituting for the applicable annual limit 
                an average annual limit that is computed

[[Page 110 STAT. 2949]]

                taking into account the weighted average of the annual 
                limits applicable to such categories.

    ``(b) Construction.--Nothing in this section shall be 
construed--
            ``(1) as requiring a group health plan (or health insurance 
        coverage offered in connection with such a plan) to provide any 
        mental health benefits; or
            ``(2) in the case of a group health plan (or health 
        insurance coverage offered in connection with such a plan) that 
        provides mental health benefits, as affecting the terms and 
        conditions (including cost sharing, limits on numbers of visits 
        or days of coverage, and requirements relating to medical 
        necessity) relating to the amount, duration, or scope of mental 
        health benefits under the plan or coverage, except as 
        specifically provided in subsection (a) (in regard to parity in 
        the imposition of aggregate lifetime limits and annual limits 
        for mental health benefits).

    ``(c) Exemptions.--
            ``(1) Small employer exemption.--This section shall not 
        apply to any group health plan (and group health insurance 
        coverage offered in connection with a group health plan) for any 
        plan year of a small employer.
            ``(2) Increased cost exemption.--This section shall not 
        apply with respect to a group health plan (or health insurance 
        coverage offered in connection with a group health plan) if the 
        application of this section to such plan (or to such coverage) 
        results in an increase in the cost under the plan (or for such 
        coverage) of at least 1 percent.

    ``(d) Separate Application to Each Option Offered.--In the case of a 
group health plan that offers a participant or beneficiary two or more 
benefit package options under the plan, the requirements of this section 
shall be applied separately with respect to each such option.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Aggregate lifetime limit.--The term `aggregate 
        lifetime limit' means, with respect to benefits under a group 
        health plan or health insurance coverage, a dollar limitation on 
        the total amount that may be paid with respect to such benefits 
        under the plan or health insurance coverage with respect to an 
        individual or other coverage unit.
            ``(2) Annual limit.--The term `annual limit' means, with 
        respect to benefits under a group health plan or health 
        insurance coverage, a dollar limitation on the total amount of 
        benefits that may be paid with respect to such benefits in a 12-
        month period under the plan or health insurance coverage with 
        respect to an individual or other coverage unit.
            ``(3) Medical or surgical benefits.--The term `medical or 
        surgical benefits' means benefits with respect to 
        medical or surgical services, as defined under the terms of the 
        plan or coverage (as the case may be), but does not include 
        mental health benefits.
            ``(4) Mental health benefits.--The term `mental health 
        benefits' means benefits with respect to mental health services, 
        as defined under the terms of the plan or coverage (as the case 
        may be), but does not include benefits with respect to treatment 
        of substance abuse or chemical dependency.

[[Page 110 STAT. 2950]]

    ``(f) Sunset.--This section shall not apply to benefits for services 
furnished on or after September 30, 2001.''.

    (b) <<NOTE: Applicability. 42 USC 300gg-5 note.>>  Effective Date.--
The amendments made by this section shall apply with respect to group 
health plans for plan years beginning on or after January 1, 1998.

    This Act may be cited as the ``Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agencies Appropriations 
Act, 1997''.

    Approved September 26, 1996.

LEGISLATIVE HISTORY--H.R. 3666:
---------------------------------------------------------------------------

HOUSE REPORTS: Nos. 104-628 (Comm. on Appropriations) and 104-812 (Comm. 
of Conference).
SENATE REPORTS: No. 104-318 (Comm. on Appropriations).
CONGRESSIONAL RECORD, Vol. 142 (1996):
            June 25, 26, considered and passed House.
            Sept. 3-5, considered and passed Senate, amended.
            Sept. 24, House agreed to conference report.
            Sept. 25, Senate agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996):
            Sept. 26, Presidential remarks and statement.

                                  <all>
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