In the Senate of the United States,
September 5, 1996.
Resolved, That the bill from the House of Representa-
tives (H.R. 3666) entitled ‘‘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 end-
ing September 30, 1997, and for other purposes.’’, do pass
with the following
AMENDMENTS:
Ω1æPage 3, line 3, strike out ø$18,497,854,000¿ and in-
sert: $18,671,259,000
Ω2æPage 3, line 22, strike out ø$1,227,000,000¿ and in-
sert: $1,377,000,000
Ω3æPage 6, line 22, strike out ø$1,964,000¿ and insert:
$2,822,000
Ω4æPage 8, line 12, strike out ø$570,000,000¿ and insert:
$596,000,000
HR 3666 EAS
Ω5æPage 8, line 21, strike out ø$257,000,000¿ and insert:
$262,000,000
Ω6æPage 9, line 9, strike out ø$59,207,000¿ and insert:
$62,207,000
Ω7æPage 10, line 10, strike out ø$823,584,000¿ and in-
sert: $813,730,000
Ω8æPage 10, line 10, strike out øfurther¿
Ω9æPage 11, line 19, strike out ø$245,358,000¿ and in-
sert: $178,250,000
Ω10æPage 13, line 8, strike out ø$160,000,000¿ and in-
sert: $190,000,000
Ω11æPage 13, line 21, strike out ø$12,300,000, together
with¿
Ω12æPage 18, after line 12 insert:
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 there-
on, in the northwest quarter of section 28, township 21
south, range 9 west, of Tuscaloosa County, Alabama, com-
prising a portion of the grounds of the Department of Veter-
HR 3666 EAS
ans Affairs medical center, Tuscaloosa, Alabama, and con-
sisting of approximately 9.42 acres, more or less.
(b) The conveyance under subsection (a) shall be sub-
ject to the condition that the City use the real property con-
veyed 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 Vet-
erans Affairs. The cost of such survey shall be borne by the
City.
(d) The Secretary of Veterans Affairs may require such
additional terms and conditions in connection with the con-
veyance under this section as the Secretary considers appro-
priate to protect the interests of the United States.
Ω13æPage 18, strike out all after line 16, over to and in-
cluding line 9 on page 27
Ω14æPage 27, after line 9 insert:
DEVELOPMENT OF ADDITIONAL NEW SUBSIDIZED HOUSING
For assistance for the purchase, construction, acquisi-
tion, 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, $969,464,442,
to remain available until expended: Provided, That of the
HR 3666 EAS
total amount provided under this head, $595,000,000 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 con-
tracts for project rental assistance, for supportive housing
for the elderly under section 202(c)(2) of the Housing Act
of 1959; and $174,000,000 shall be for capital advances,
including amendments to capital advance contracts, for
supportive housing for persons with disabilities, as author-
ized by section 811 of the Cranston-Gonzalez National Af-
fordable Housing Act; and for project rental assistance, and
amendments to contracts for project rental assistance, for
supportive housing for persons with disabilities as author-
ized by section 811 of the Cranston-Gonzalez National Af-
fordable 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-Gon-
zalez National Affordable Housing Act for tenant-based as-
sistance, as authorized under that section, which assistance
is five years in duration: Provided further, That the Sec-
retary may waive any provision of section 202 of the Hous-
ing 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
HR 3666 EAS
Housing Act of 1937; and for providing replacement hous-
ing and assisting tenants to be displaced by the demolition,
of which the Secretary may use up to $2,500,000 for tech-
nical 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 De-
partment and of public housing agencies and to residents:
Provided further, That of the total amount provided under
this head, $500,000,000 shall be available for use in con-
junction 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):
Provided further, That 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 the Secretary may con-
tinue to impose a moratorium on the acceptance of initial
notices of intent by potential recipients of such funding:
Provided further, That funding shall be limited to: (1) ten-
ant-based assistance under the terms of the tenth and elev-
enth provisos of the second undesignated paragraph under
the ‘‘Annual Contributions for Assisted Housing’’ head of
the Departments of Veterans Affairs and Housing and
HR 3666 EAS
Urban Development, and Independent Agencies Appropria-
tions Act, 1996; (2) plans of action for sales of projects to
nonprofit organizations, tenant-sponsored organizations
and other priority purchasers; (3) projects that are subject
to a repayment or settlement agreement that was executed
between the owner and the Secretary prior to September
1, 1995; (4) projects for which submissions were delayed
as a result of their location in areas that were designated
as a Federal disaster area in a Presidential Disaster Dec-
laration; and (5) projects whose processing was, in fact, or
in practical effect, suspended, deferred, or interrupted for
a period of nine months or more because of differing inter-
pretations, by the Secretary and an owner concerning the
timing of the ability of an uninsured section 236 property
to prepay or by the Secretary and a State or local rent
regulatory agency, concerning 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
a notice of intent to extend the low-income affordability re-
strictions of the housing, or transfer to a qualified pur-
chaser who would extend such restrictions, on or before No-
vember 1, 1993: Provided further, That priority shall be
given to funding tenant-based assistance under the terms
of the tenth and eleventh provisos of the second undesignated
HR 3666 EAS
paragraph under the ‘‘Annual Contributions for Assisted
Housing’’ head of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agen-
cies Appropriations Act, 1996, and plans of action for sales
of projects to nonprofit organizations, tenant-sponsored or-
ganizations, and other priority purchasers: Provided fur-
ther, That the Secretary may give priority to funding ap-
proved plans of action for the following projects: (1) projects
that are subject to a repayment or settlement agreement that
was executed between the owner and the Secretary prior to
September 1, 1995; (2) projects for which submissions were
delayed as a result of their location in areas that were des-
ignated as a Federal disaster area in a Presidential Disas-
ter Declaration; and (3) projects whose processing was, in
fact, or in practical effect, suspended, deferred, or inter-
rupted for a period of nine months or more because of differ-
ing interpretations, by the Secretary and an owner concern-
ing the timing of the ability of an uninsured section 236
property to prepay or by the Secretary and a State or local
rent regulatory agency, concerning the effect of a presump-
tively applicable State or local rent control law or regula-
tion on the determination of preservation value under sec-
tion 213 of LIHPRHA, as amended, if the owner of such
project filed a notice of intent to extend the low-income af-
fordability restrictions of the housing, or transfer to a quali-
HR 3666 EAS
fied purchaser who would extend such restrictions, on or
before November 1, 1993: Provided further, That section
241(f) of the National Housing Act is repealed and insur-
ance under such section shall not be offered as an incentive
under LIHPRHA and ELIHPA: Provided further, That a
capital loan may be provided as an incentive under
LIHPRHA or ELIHPA on such terms and conditions as
the Secretary may prescribe: Provided further, That the fol-
lowing provisos under the second undesignated heading
under the ‘‘Annual Contributions for Assisted Housing’’
head of the Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies Appro-
priations Act, 1996 shall continue in effect: the fourth pro-
viso, the sixth proviso, the seventh proviso, the ninth pro-
viso, the tenth proviso, the eleventh proviso, and the twelfth
proviso: Provided further, That notwithstanding any other
provision of law, effective October 1, 1997, the Secretary
shall suspend further funding of plans of action: Provided
further, That of the total amount provided under this head
$290,000,000 shall be for grants to public and Indian hous-
ing 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 serv-
ices authorized by 42 U.S.C. 11921–11925, of which
HR 3666 EAS
$10,000,000 shall be for grants, technical assistance, con-
tracts 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), up to $5,000,000
of which may be used in connection with efforts to combat
violent crime in public and assisted housing under the Op-
eration Safe Home program administered by the Inspector
General of the Department of Housing and Urban Develop-
ment, and up to $5,000,000 of which may be provided to
the Office of Inspector General for Operation Safe Home:
Provided further, 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 hous-
ing youth sports grants.
Ω15æPage 28, line 5, strike out all after ‘‘1999,’’ down
to and including ‘‘and’’ in line 7
Ω16æPage 28, line 7, strike out ø$61,400,000¿ and insert:
$68,500,000
Ω17æPage 28, line 11, strike out ø$1,000,000¿ and insert:
$1,500,000
HR 3666 EAS
Ω18æPage 29, after line 6 insert:
Of the amount provided under this heading, the Sec-
retary of Housing and Urban Development may use up to
$50,000,000 for grants to public housing agencies (includ-
ing Indian housing authorities), nonprofit corporations,
and other appropriate entities for a supportive services pro-
gram to assist residents of public and assisted housing,
former residents of such housing receiving tenant-based as-
sistance 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 sup-
portive 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, seek-
ing work, or is preparing for work by participating in job
training or educational programs: Provided further, That
the supportive services shall include congregate services for
the elderly and disabled, service coordinators, and coordi-
nated 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
HR 3666 EAS
commitments of funding or services from other sources: Pro-
vided further, That the Secretary shall select public and In-
dian housing agencies to receive assistance under this head
on a competitive basis, taking into account the quality of
the proposed program (including any innovative ap-
proaches), the extent of the proposed coordination of sup-
portive 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 car-
rying out other comparable initiatives, and other appro-
priate criteria established by the Secretary.
Ω19æPage 29, after line 6 insert:
Of the amount made available under this heading, not-
withstanding any other provision of law, $20,000,000 shall
be available for grants to entities managing or operating
public housing developments, federally-assisted multifam-
ily-housing developments, or other multifamily-housing de-
velopments for low-income families supported by non-Fed-
eral 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 aug-
ment such security services by other entities or employees
HR 3666 EAS
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: Pro-
vided, That such grants shall be made on a competitive
basis as specified in section 102 of the HUD Reform Act.
Ω20æPage 29, line 8, strike out ø$20,000,000¿ and insert:
$40,000,000
Ω21æPage 30, line 8, after ‘‘for’’ insert: departmental
Ω22æPage 32, line 19, strike out ø$341,595,000¿ and in-
sert: $350,595,000
Ω23æPage 32, line 22, strike out ø$334,483,000¿ and in-
sert: $343,483,000
Ω24æPage 34, line 16, strike out ø$202,470,000, of which
$198,299,000¿ and insert: $207,470,000, of which
$203,299,000
Ω25æPage 34, line 17, after ‘‘for’’ insert: departmental
Ω26æPage 35, line 5, strike out ø$9,101,000¿ and insert:
$9,383,000
Ω27æPage 35, line 7, strike out ø$9,101,000¿ and insert:
$9,383,000
HR 3666 EAS
Ω28æPage 35, line 8, after ‘‘for’’ insert: departmental
Ω29æPage 36, line 13, strike out all after ‘‘penses,’’ down
to and including ‘‘$42,00,000)’’ in line 14 and insert:
$976,840,000
Ω30æPage 36, line 14, strike out ø$532,782,000¿ and in-
sert: $546,782,000
Ω31æPage 36, line 16, strike out ø$9,101,000¿ and insert:
$9,383,000
Ω32æPage 37, line 1, strike out øprovided¿ and insert:
transferred
Ω33æPage 37, line 8, strike out ø$14,895,000¿ and insert:
$15,751,000
Ω34æPage 37, strike out all after line 14, over to and in-
cluding line 11 on page 38 and insert:
SEC. 201. EXTENDERS.—(a) PUBLIC HOUSING FUND-
ING FLEXIBILITY.—Section 201(a)(2) of the Departments of
Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1996 is amended
by striking ‘‘1996’’ and inserting ‘‘1997’’.
(b) ONE-FOR-ONE REPLACEMENT OF PUBLIC AND IN-
DIAN HOUSING.—Section 1002(d) of Public Law 104–19 is
amended by striking ‘‘before September 30, 1996’’ and in-
serting ‘‘on or before September 30, 1997’’.
HR 3666 EAS
(c) PUBLIC AND ASSISTED HOUSING RENTS, INCOME
ADJUSTMENTS, AND PREFERENCES.—(1) Section 402(a) of
the Balanced Budget Downpayment Act, I is amended by
inserting after ‘‘1995’’ the following: ‘‘, and effective for fis-
cal year 1997’’.
(2) Section 402(f) of such Act is amended by striking
‘‘fiscal year 1996’’ and inserting ‘‘fiscal years 1996 and
1997’’.
(3) The second sentence of section 230 of the Depart-
ments of Veterans Affairs and Housing and Urban Develop-
ment, and Independent Agencies Appropriations Act, 1996
is amended by inserting before the period the following:
‘‘during the entire time the family receives assistance under
the United States Housing Act of 1937’’.
(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 De-
velopment and an Indian housing authority.
(e) STREAMLINING SECTION 8 TENANT-BASED ASSIST-
ANCE.—Section 203(d) of the Departments of Veterans Af-
fairs and Housing and Urban Development, and Independ-
ent Agencies Appropriations Act, 1996 is amended by strik-
HR 3666 EAS
ing ‘‘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, 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 follow-
ing: ‘‘for assistance made available during fiscal year
1996 and October 1, 1997 for assistance made avail-
able during fiscal year 1997’’.
(g) 
SECTION
RENT
ADJUSTMENTS.—Section
8(c)(2)(A) of the United States Housing Act of 1937 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 fol-
lowing new sentence: ‘‘In the case of assistance under
the certificate program, 0.01 shall be subtracted from
HR 3666 EAS
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’’.
Ω35æPage 41, after line 8 insert:
SEC. 205. USE OF AVAILABLE FUNDING FOR HOME-
OWNERSHIP.—Up to $20,000,000 of amounts of unobligated
balances that are or become available from the Nehemiah
Housing Opportunity Grant program, repealed under sec-
tion 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 deter-
mined by the Secretary.
Ω36æPage 41, after line 8 insert:
SEC. 206. DEBT FORGIVENESS.—The Secretary of
Housing and Urban Development shall cancel the indebted-
ness of the Greene County Rural Health Center relating to
HR 3666 EAS
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.
Ω37æPage 41, after line 8 insert:
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.
Ω38æPage 41, after line 8 insert:
SEC. 208. RENTAL HOUSING ASSISTANCE.—The limi-
tation 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.
Ω39æPage 41, after line 8 insert:
HR 3666 EAS
SEC. 209. D.C. MODERNIZATION FUNDING.—Notwith-
standing 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 re-
main mod-troubled.
Ω40æPage 41, after line 8 insert:
SEC. 210. 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 de-
scribed 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
HR 3666 EAS
rescinded or remitted to the Treasury shall be used by State
housing finance agencies or local governments or local hous-
ing agencies with projects approved by the Secretary of
Housing and Urban Development for which settlement oc-
curred after January 1, 1992, in accordance with such sec-
tion.
Ω41æPage 41, after line 8 insert:
SEC. 211. SECTION 8 CONTRACT RENEWAL AUTHORITY.
(a) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘expiring contract’’ means a con-
tract 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 con-
tract 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;
HR 3666 EAS
(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 multifam-
ily 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 hous-
ing 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 Unit-
ed States Housing Act of 1937 to renew the expiring
contract as project-based assistance for a period of not
more than 1 year, at rent levels that are equal to
those under the expiring contract as of the date on
which the contract expires, only if those rent levels do
HR 3666 EAS
not exceed 120 percent of fair market rent for the
market area in which the project is located.
(2) EXEMPTION FOR STATE AND LOCAL HOUSING
AGENCY PROJECTS.—Notwithstanding paragraph (1),
upon the expiration of an expiring contract with rent
levels that exceed the percentage described in that
paragraph, if the Secretary determines that the pri-
mary financing or mortgage insurance for the multi-
family housing project that is covered by that expir-
ing contract was provided by a public agency, the
Secretary shall, upon the request of the public agency,
renew the expiring contract—
(A) for a period of not more than 1 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) INELIGIBLE CONTRACTS.—
(A) PARTICIPATION IN DEMONSTRATION.—
For contracts covering a multifamily housing
project that expire during fiscal year 1997 with
rent levels that exceed the percentage described in
paragraph (1), the Secretary shall, at the request
of the owner of the project, include that multi-
family housing project in the demonstration pro-
HR 3666 EAS
gram under section 212 of this Act. The Sec-
retary shall ensure, to the maximum extent prac-
ticable, that a project in the demonstration is
maintained as affordable for low-income families
for the maximum feasible period of time.
(B) EFFECT
OF
MATERIAL
ADVERSE
AC-
TIONS
OR
OMISSIONS.—Notwithstanding para-
graph (1) or any other provision of law, the Sec-
retary shall not renew an expiring contract if
the Secretary determines that the owner of the
multifamily housing project has engaged in ma-
terial adverse financial or managerial actions or
omissions with regard to the project (or with re-
gard to other similar projects if the Secretary de-
termines that such actions or omissions con-
stitute a pattern of mismanagement that would
warrant suspension or debarment by the Sec-
retary).
(C) TRANSFER OF PROPERTY.—For prop-
erties disqualified from the demonstration pro-
gram because of actions by an owner or pur-
chaser 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
HR 3666 EAS
tenant-endorsed community-based nonprofit and
public agency purchasers meeting such reason-
able qualifications as may be established by the
Secretary.
(4) TENANT PROTECTIONS.—To the extent pro-
vided in advance in an appropriations Act, any fam-
ily residing in an assisted unit in a multifamily
housing project that is covered by an expiring con-
tract that is not renewed, shall be offered tenant-based
assistance before the date on which the contract ex-
pires or is not renewed.
SEC. 212. FHA MULTIFAMILY DEMONSTRATION AUTHORITY.
(a) IN GENERAL.—
(1) REPEAL.—
(A) IN GENERAL.—Section 210 of the De-
partments of Veterans Affairs and Housing and
Urban Development and Independent Agencies
Appropriations Act, 1996 (110 Stat. 1321) is re-
pealed.
(B) EXCEPTION.—Notwithstanding the re-
peal under subparagraph (A), amounts made
available under section 210(f) the Departments
of Veterans Affairs and Housing and Urban De-
velopment and Independent Agencies Appropria-
tions Act, 1996 shall remain available for the
HR 3666 EAS
demonstration 
program 
under 
this 
section
through the end of fiscal year 1997.
(2) SAVINGS PROVISIONS.—Nothing in this sec-
tion shall be construed to affect any commitment en-
tered 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 sec-
tion—
(A) the term ‘‘affordable’’ means, with re-
spect to a dwelling unit, a unit for which the
rents are restricted to the rent levels established
under a mortgage restructuring;
(B) the term ‘‘demonstration program’’
means the program established under subsection
(b);
(C) the term ‘‘designee’’ means a third-
party public agency that enters into an arrange-
ment with the Secretary under subsection (b)(3);
(D) the term ‘‘expiring contract’’ means a
contract for project-based assistance under sec-
tion 8 of the United States Housing Act of 1937
that expires during fiscal year 1997;
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(E) the term ‘‘family’’ has the same mean-
ing as in section 3(b) of the United States Hous-
ing Act of 1937;
(F) 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;
(G) the term ‘‘owner’’ has the same meaning
as in section 8(f) of the United States Housing
Act of 1937;
(H) the term ‘‘project-based assistance’’
means rental assistance under section 8 of the
United States Housing Act of 1937 that is at-
tached to a multifamily housing project;
(I) the term ‘‘Secretary’’ means the Sec-
retary of Housing and Urban Development; and
(J) the term ‘‘tenant-based assistance’’ has
the same meaning as in section 8(f) of the Unit-
ed States Housing Act of 1937.
(b) DEMONSTRATION AUTHORITY.—
(1) IN GENERAL.—The Secretary shall admin-
ister a demonstration program with respect to multi-
family projects—
(A) whose owners agree to participate;
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(B) with rents on units assisted under sec-
tion 8 of the United States Housing Act of 1937
that are, in the aggregate, in excess of 120 per-
cent 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 test the feasibility and desirabil-
ity of—
(A) ensuring, to the maximum extent prac-
ticable, that the debt service and operating ex-
penses, 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 subsidies;
(B) utilizing project-based assistance, while
taking into account the capital needs of the
projects and the need for assistance to low- and
very low-income families in such projects; and
(C) preserving low-income rental housing
affordability and availability while reducing the
long-term cost of project-based assistance.
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(3) DESIGNEES.—In carrying out the dem-
onstration program, the Secretary may enter into ar-
rangements with one or more third-party public enti-
ties, under which the Secretary may provide for the
assumption by the designee (by delegation, by con-
tract, or otherwise) of some or all of the functions, ob-
ligations, and benefits of the Secretary.
(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 Govern-
ment through debt restructuring and subsidy reduc-
tion 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 displace-
ment 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
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(F) minimizing any adverse impacts on
residential neighborhoods and local communities.
(2) BALANCE OF COMPETING GOALS.—In deter-
mining the manner in which a mortgage is to be re-
structured 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) JOINT VENTURE ARRANGEMENTS.—
(1) IN
GENERAL.—In carrying out the dem-
onstration program, the Secretary may enter into
joint venture arrangements with designees, under
which the Secretary may provide for the assumption
by the third parties (by delegation, by contract, or
otherwise) of some or all of the functions, obligations,
and benefits of the Secretary.
(2) PREFERENCE.—In entering into any ar-
rangement under this subsection, the Secretary shall
give preference to State housing finance agencies and
local housing agencies to act as designees to the extent
such agencies are determined to be qualified by the
Secretary.
(3) PUBLIC AGENCIES.—Each joint venture ar-
rangement entered into under this subsection shall in-
clude a public agency as the primary partner.
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(4) DESIGNEE PARTNERSHIPS.—For purposes of
any joint venture 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 orga-
nizations;
(E) the Federal National Mortgage Associa-
tion;
(F) the Federal Home Loan Mortgage Cor-
poration;
(G) Federal Home Loan Banks; and
(H) other State or local mortgage insurance
companies or bank lending consortia.
(e) LONG-TERM AFFORDABILITY.—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.
(f) PROCEDURES.—
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(1) NOTICE OF PARTICIPATION IN DEMONSTRA-
TION.—Not later than 45 days before the date of expi-
ration 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 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 budg-
et-based rent to cover debt service, reasonable operat-
ing expenses (including reasonable and appropriate
services), and a reasonable return on equity, as deter-
mined 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.
(g) HUD-OWNED AND HUD-HELD MORTGAGES.—For
purposes of carrying out the demonstration program—
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(1) 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,
without regard to any other provision of law; and
(2) as provided under subsection (b)(3), the Sec-
retary may delegate to one or more designees the au-
thority to carry out some or all of the functions and
responsibilities of the Secretary in connection with
mortgages held by the Secretary under the National
Housing Act.
(h) DEMONSTRATION ACTIONS.—For purposes of car-
rying out the demonstration program, and in order to en-
sure 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 pro-
gram, and consent by parties to any contractual agreement
which the Secretary proposes to modify or discontinue, the
Secretary or, except with respect to paragraph (2), designee,
shall take not less than 1 of the actions specified in para-
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graphs (6), (7), and (8) and may take any of the following
actions:
(1) REMOVAL OF RESTRICTIONS.—
(A) IN
GENERAL.—Notwithstanding any
other provision of law, and subject to the agree-
ment of the owner of the project and after con-
sultation with the tenants of the project, the Sec-
retary or designee may remove, relinquish, extin-
guish, modify, or agree to the removal of any
mortgage, regulatory agreement, project-based as-
sistance contract, use agreement, or restriction
that had been imposed or required by the Sec-
retary, including restrictions on distributions of
income which the Secretary or designee deter-
mines would interfere with the ability of the
project to operate without above-market rents.
(B) 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.
(2) REINSURANCE.—With respect to not more
than 5,000 units during fiscal year 1997, the Sec-
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retary may enter into contracts to purchase reinsur-
ance, or enter into participations or otherwise trans-
fer economic interest in contracts of insurance or in
the premiums paid, or due to be paid, on such insur-
ance to the designee, on such terms and conditions as
the Secretary may determine.
(3) INDUCE
PARTICIPATION
OF
THIRD
PAR-
TIES.—Notwithstanding any other provision of law,
of amounts made available under appropriations
Acts, including amounts made available under this
section, 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 consider-
ation, as may reasonably be necessary to induce par-
ticipation of owners, lenders, servicers, third parties,
and other entities in the demonstration program, in-
cluding the use of fees for contract administration
under section 8 of the United States Housing Act of
1937 for purposes of any contract restructured or re-
newed under the demonstration program.
(4) FULL OR PARTIAL PAYMENT OF CLAIM.—Not-
withstanding any other provision of law, the Sec-
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retary may make a full payment of claim or partial
payment of claim prior to default.
(5) CREDIT ENHANCEMENT.—
(A) IN
GENERAL.—The Secretary or des-
ignee may provide FHA multifamily mortgage
insurance, reinsurance, or other credit enhance-
ment alternatives, including retaining the exist-
ing FHA mortgage insurance on a restructured
first mortgage at market value or using the mul-
tifamily risk-sharing mortgage programs, as pro-
vided under section 542 of the Housing and
Community Development Act of 1992.
(B) EFFECT OF LIMITATIONS.—Any limita-
tions on the number of units available for mort-
gage insurance under section 542 shall not apply
to insurance issued for purposes of the dem-
onstration program.
(C) MAXIMUM PERCENTAGE.—During fiscal
year 1997, not more than 10 percent of multi-
family housing projects with expiring contracts
may be restructured without FHA insurance,
unless otherwise agreed by the owner of a project.
(D) CREDIT SUBSIDY.—Subject to the fund-
ing restrictions under subsection (l), any credit
subsidy costs of providing mortgage insurance
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shall be paid from the General Insurance Fund
and the Special Risk Insurance Fund.
(6) MORTGAGE RESTRUCTURING.—
(A) IN
GENERAL.—The Secretary or des-
ignee may restructure mortgages to provide a re-
structured first mortgage to cover debt service
and operating expenses 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.
(B) INTEREST
RATE
ON
SECOND
MORT-
GAGE.—The second mortgage shall bear interest
at a rate not to exceed the applicable Federal
rate for a term not to exceed 40 years.
(C) TIMING
OF
PAYMENTS.—If the first
mortgage remains outstanding, payments of in-
terest and principal on the second mortgage shall
be made from all excess project income only after
the payment of all reasonable and necessary op-
erating expenses (including deposits in a reserve
for replacement), debt service on the first mort-
gage, and such other expenditures as may be ap-
proved by the Secretary.
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(D) ASSUMPTION OF SECOND MORTGAGE.—
The second mortgage shall be assumable by any
subsequent purchaser of the multifamily housing
project.
(E) DISPOSITION OF PROPERTY.—The bal-
ance of the principal and accrued interest due
under the second mortgage shall be fully payable
upon disposition of the property, unless the
mortgage is assumed under subparagraph (D).
(F) SECOND MORTGAGE REPAYMENT.—The
owner shall begin repayment of the second mort-
gage upon full payment of the first mortgage in
equal monthly installments in an amount equal
to the monthly principal and interest payments
formerly paid under the first mortgage.
(G) FAILURE TO COMPLY.—The principal
and interest of a second mortgage shall be imme-
diately due and payable upon a finding by the
Secretary that an owner has failed to materially
comply with this section or any applicable re-
quirement of the United States Housing Act of
1937 in relation to the project at issue.
(H) CREDIT SUBSIDY.—Subject to the fund-
ing restrictions under subsection (l), any credit
subsidy costs of providing a second mortgage
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shall be paid from the General Insurance Fund
and the Special Risk Insurance Fund.
(7) DEBT FORGIVENESS.—The Secretary or des-
ignee, 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. In exchange for debt forgiveness under
this paragraph, the project shall remain affordable to
low-income families for a period of 20 years, unless
otherwise provided by the Secretary.
(8) BUDGET-BASED RENTS.—During fiscal year
1997, the Secretary or designee may renew an expir-
ing contract, for a period of not more than 1 year,
at a budget-based rent that covers debt service, reason-
able operating expenses (including all reasonable and
appropriate services), and a reasonable return on eq-
uity, as determined solely by the Secretary, but that
does not exceed the rent levels under the expiring con-
tract. 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 in rural areas.
(i) COMMUNITY AND TENANT INPUT.—In carrying out
this section, the Secretary shall develop procedures to pro-
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vide appropriate and timely notice, including an oppor-
tunity for comment, 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) LIMITATION ON DEMONSTRATION AUTHORITY.—
The Secretary shall carry out the demonstration program
with respect to mortgages not to exceed 50,000 units.
(k) PRIORITY FOR PARTICIPATION.—The Secretary or
designee shall give priority for participation in the dem-
onstration program to any owner of an eligible multifamily
housing project with an expiring contract for project-based
assistance.
(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 Inde-
pendent Agencies Appropriations Act, 1996 (110 Stat.
1321), for the costs (including any credit subsidy costs asso-
ciated 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, are hereby appropriated,
to remain available until September 30, 1998.
(m) REPORT TO CONGRESS.—
(1) IN GENERAL.—
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(A) BIANNUAL REPORTS.—Not less than bi-
annually, the Secretary shall submit to the Con-
gress a report describing and assessing the pro-
grams carried out under the demonstration pro-
gram.
(B) FINAL
REPORT.—Not later than 6
months after the end of the demonstration pro-
gram, the Secretary shall submit to the Congress
a final report on the demonstration program.
(2) CONTENTS.—Each report submitted under
paragraph (1) shall include—
(A) any findings and recommendations for
legislative action; and
(B) a description of the status of each mul-
tifamily housing project selected for the dem-
onstration program.
(3) CONTENTS OF FINAL REPORT.—The report
submitted under paragraph (1)(B) may include—
(A) with respect to each multifamily hous-
ing project participating in the demonstration
program, information relating to—
(i) the size of the project;
(ii) the geographic locations of the
project, by State and region;
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months of such program) in the written plan of vocational
rehabilitation formulated for the child pursuant to sub-
section (b).
‘‘(e)(1) A child who is pursuing a program of voca-
tional 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 con-
currently. 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 re-
ceive assistance under this section and chapter 35 of this
title may not exceed 48 months (or the part-time equivalent
thereof).
‘‘§ 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.
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‘‘(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 pro-
vided 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 for the highest level of disability pre-
scribed. Such amounts are subject to adjustment under sec-
tion 5312 of this title.
‘‘(c) Notwithstanding any other provision of law, re-
ceipt 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.