Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997
PL 104-204 (H.R.3666), enacted 09/26/1996

110 STAT. 2874 
PUBLIC LAW 104-204—SEPT. 26, 1996 
Sept. 26,1996 
[H.R. 3666] 
Departments of 
Veterans Affsiirs 
and Housing and 
Urban 
Development, 
and Independent 
Agencies 
Appropriations 
Act, 1997. 
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. 
Be it enacted by the Senate and 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, pa3mient 
of premiums due on commercial life insurance policies guaranteed 
under the provisions of Article FV 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 avail-
able 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 implement-
ing those provisions authorized in the Omnibus Budget Reconcili-
ation 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" appro-
priation: 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 avsiilable 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 insur-
ance, servicemen's indemnities, service-disabled veterans insurEince, 
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 trans-
ferred 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 trans-
ferred 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 
modif3dng such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974, as amended: Provided 
further, 
110 STAT. 2876 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 CEirry 
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 "GenergJ operating 
expenses". 
NATIVE AMERICAN VETERAN HOUSING LOAN PROGRAM ACCOUNT 
(INCLUDING TRANSFER OF FUNDS) 
For administrative expenses to carry out the direct loan pro-
gram 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2877 
property acquisition and disposition, construction and renovation 
of any facility under the jurisdiction or for the use of the Depart-
ment; 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; uni-
forms 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 Eimount 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, hos-
pital, 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 renova-
tion of any facility under the jurisdiction or for the use of the 
Department of Veterans Affairs, including site acquisition; engineer-
ing 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 "Greneral 
post fund": Provided, That such costs, including the cost of modify-
ing such loans, shall be as defined in section 502 of the Congres-
sional 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 "Greneral 
post fund", as authorized by Public Law 102-54, section 8. 
110 STAT. 2878 
PUBLIC LAW 104-204—SEPT. 26, 1996 
DEPARTMENTAL ADMINISTRATION 
GENERAL OPERATING EXPENSES 
For necessary operating expenses of the Department of Veter-
ans 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 Execu-
tive 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 TVavis 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2879 
for fiscal year 1997, for each approved project shall be obligated 
(1) by the awarding of a construction documents contract by Septem-
ber 30, 1997, and (2) by the awarding of a construction contract 
by September 30, 1998: Provided further, That the Secretary shall Reports, 
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 limita-
tions 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 Vetergins 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 engineer-
ing services, maintenance or guarantee period services costs associ-
ated 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 pre-
vious "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 avEiilable 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. 
29-194 0-96-2:QL3Part4 
110 STAT. 2880 
PUBLIC LAW 104-204—SEPT. 26, 1996 
GRANTS FOR THE CONSTRUCTION OF STATE VETERANS CEMETERIES 
For grants to aid States in establishing, expanding, or improv-
ing 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) 
31 use 501 note. 
There is hereby established in the Treasury 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 advan-
tageously as centred services: Provided, That any inventories, equip-
ment 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 here-
after 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 Federed agencies for which such centralized services are per-
formed, 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 improve-
ment 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 Veter-
ans 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. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2881 
SEC. 104. No appropriations in this Act for the Department 
of Veterans Affairs shall be available for hospitalization or examina-
tion 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 Veter-
ans 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 Veter-
ans' 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 administra-
tion 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 shedl 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 pro-
gram 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 Depart-
ment 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. 
110 STAT. 2882 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(d) The Secretary of Veterans Affairs may require such addi-
tional 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 capitsd advances, including amendments 
to capital advance contracts, for housing for the elderly, as author-
ized 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 disabil-
ities, as authorized by section 811 of the Cranston-Gronzalez 
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 gdtemative conditions or terms where appro-
priate: Provided further. That of the total amount provided under 
this head $200,000,000, shall be for the development or acquisition 
cost of pulslic housing for Indian families, including amounts for 
housing under the mutual help homeownership opportunity pro-
gram 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 
avail^le until expended: Provided, That of the total amount pro-
vided 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 con-
tracts: Provided further. That the Secretary may determine not 
to apply section 8(o)(6XB) 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. 13611). 
PRESERVING EXISTING HOUSING INVESTMENT 
For operating, maintaining, revitalizing, rehabilitating, preserv-
ing, 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 pa3mients to public housing agencies and Indian housing authori-
ties 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. 14371), 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 tech-
nical 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 program: Provided further. That of the total amount pro- 12 USC 4ioi 
note. 
110 STAT. 2884 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 Homeowner-
ship 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 Septem-
ber 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, notwith-
standing 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 pajnnent 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 fur-
ther. That eligible low-income housing shall include properties meet-
ing 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2885 
prepajmtient 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 pajnnent standard, 
as applicable, the rent shall be deemed to be the applicable stand-
ard, so long as the administering public housing agency finds that 
the rent is reasonable in comparison with rents charged for com-
parable 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 fiirther, 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 Homeowner-
ship 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 hous-
ing: Provided further. That section 241(0 of the National Housing 
Act is repealed and insurance under such section shall not be 
12 USC l7l5z-6. 
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 avail-
able 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 Invest-
ment 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. 
110 STAT. 2886 
PUBLIC LAW 104-204—SEPT. 26, 1996 
REVITALIZATION OF SEVERELY DISTRESSED PUBLIC HOUSING 
For grants to public housing agencies for assisting in the 
demoUtion 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, replace-
ment 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 assist-
ance, 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 Agen-
cies, 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 
pEirty 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 clearing-
house 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 
tredning, 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. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 prin-
cipal, 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, 
Tliat 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(bX3) of the Housing and Community Development Act 
of 1974, as amended) shall be expended for "Planning and Manage-
ment Development" and "Administration" as defined in regulations 
promulgated by the Department: Provided further. That for fiscal 
42 USC 5305 
year 1997 and thereafter, section 105(aX25) of such Act, shall note. 
continue to be effective and the termination and conforming provi-
sions of section 907(b)(2) of the Cranston-Gronzalez National Afford-
able Housing Act shall not be effective: Provided fuHher, That 
section 916(f) of the Cranston-Gonzalez National Affordable Housing 
Act is repealed. 
42 USC 5306 
Of the amount provided under this heading, the Secretary "ote. 
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-suffi-
cient: 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 participat-
ing in job training or educational programs: Provided further. That 
110 STAT. 2888 
PUBLIC LAW 104-204—SEPT. 26, 1996 
the supportive services may include congregate services for the 
elderly and disabled, service coordinators, and coordinated edu-
cational, training, and other supportive services, including academic 
skills training, job search assistance, assistance related to retaining 
employment, vocational and entrepreneurship development and sup-
port 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 estab-
lished 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 shsill be available for 
the Moving to Work Demonstration for public housing families. 
Of the amount made available under this heading, notwith-
standing any other provision of law, $20,000,000 shall be available 
for grants to entities managing or operating public housing develop-
ments, 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 devel-
opments: Provided, That such grants shall be made on a competitive 
basis as specified in section 102 of the ETUD Reform Act. 
Of the amount made available under this heading, notwith-
standing any other provision of law, $30,000,000 shall be available 
for youthbuild program activities authorized by subtitle D of title 
rV of the Cranston-Gronzalez 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, notwith-
standing 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, notwith-
standing any aggregate limitation on outstanding obligations 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2889 
garanteed in section 108(k) of the Housing and Community Develop-
ment Act of 1974. In addition, for administrative expenses to carry 
out the guaranteed loan program, $675,000 which shall be trans-
ferred to and merged with the appropriation for departmental sala-
ries and expenses. 
HOME INVESTMENT PARTNERSHIPS PRCXJRAM 
For the HOME investment partnerships program, as authorized 
under title II of the Cranston-Gronzalez 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 avail-
able 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 mginagement 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 Assist-
ance 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 pro-
gram (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 canying 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 Sec-
retary 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 
110 STAT. 2890 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 govern-
mental entities in connection with sales of single family real prop-
erties owned by the Secretary and formerly insured under section 
203 of such Act. 
For administrative expenses necessary to carry out the guaran-
teed 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 appro-
priation for the OfRce 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 Einy amounts made avail-
able 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(1), 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 connec-
tion 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 govern-
mental 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2891 
be transferred to the appropriation for the Office of Inspector 
CJeneral. 
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 guaran-
teed mortgage-backed securities program, $9,383,000, to be derived 
from the GNMA-guarantees of mortgage-backed securities guaran-
teed 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. 170Iz-
1 et seq.), including carrying out the functions of the Secretary 
under section l(a)(l)(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 pro-
vided 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 Septem-
ber 30, 1998, of which $15,000,000 shall be to carry out activities 
pursuant to section 561. No funds made available under this head-
ing 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 other-
wise provided for, including not to exceed $7,000 for official recep-
tion 
and 
representation 
expenses, 
$976,840,000, 
of 
which 
110 STAT. 2892 
PUBLIC LAW 104-204—SEPT. 26, 1996 
$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 Pro-
gram 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 Financisd 
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 Direc-
tor 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 
Ante, p. 1321- 
Appropriations Act, 1996 is amended by striking "1996" and insert-
277. 
ing "1997". 
(b) 
ONE-FOR-ONE 
REPLACEMENT OF PUBLIC AND INDIAN 
42 use 1437c 
HOUSING.—Section 1002(d) of Public Law 104-19 is amended by 
note. 
striking "before September 30, 1996" and inserting "on or before 
September 30, 1997". 
(c) PUBLIC AND ASSISTED HOUSING RENTS, INCOME ADJUST-
MENTS, AND PREFERENCES.—(1)(A) Section 402(a) of The Balanced 
Ante. p. 40. 
Budget Downpayment Act, I is 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. 
Ante, p. 1321- 
(B) Section 230 of Public Law 104-134 is hereby repealed. 
292. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2893 
Ante, p. 1321-
281. 
Ante, p. 43. 
42 use 1437f. 
(2) Section 402(f) of The Balanced Budget Downpayment Act, 
I is amended by striking "fiscal year 1996" and inserting "fiscal Ante, p. 43. 
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 Jby 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.—Sec-
tion 203(d) of the Departments of Veterans Affairs and Housing 
and Urban Development, and Independent Agencies Appropriations 
Act, 1996 is amended by striking "fiscal year 1996" and inserting 
"fiscal years 1996 and 1997". 
(f) SECTION 8 FAIR MARKET RENTALS AND DELAY IN REISSU-
ANCE.—(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 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 is amended— 
(1) in the third sentence by inserting ", fiscal year 1996 
prior to April 26, 1996, and fiscal year 1997" afler "1995"; 
(2) in the fourth sentence, by striking "For" Eind inserting 
"Except for assistance under the certificate progrgmti, 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. 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 administer-
ing 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 
42 use 1437f 
note. 
110 STAT. 2894 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(ii) such fair msirket 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. 
Federal Register, 
(2) For subsequent fiscal years, the Secretary shall publish 
publication. 
a notice in the Federsd 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 pro-
grams 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 appro-
priate 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. 
Ante, p. 46. 
1710 note), is amended by striking "October 1, 1996" and inserting 
"October 1, 1997". 
12 use I7i5z- 
SEC. 204. FLEXIBLE AUTHORITY.—^During fiscal year 1997 and 
lla. 
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 provi-
sion 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-Gronzalez 
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 accordsince with section 102 
of the Department of Housing and Urban Development Reform 
Act of 1989 on a competitive basis. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 Grovemment 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 trans-
ferred, 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 other-
wise 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-l) is reduced in 
fiscal year 1997 by not more than $2,000,000 in uncommitted bal-
ances 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)(AXi) 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 cen-
tum 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 Amend-
ments 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 recap-
tured 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 Janu-
ary 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 refinEincings during 
1994, for its use in accordance with subsection (a). 
SEC. 211. SECTION 8 CONTRACT RENEWAL AUTHORITY.—(a) 42 use i437f 
DEFINITIONS.—For purposes of this section— 
note. 
110 STAT. 2896 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(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 assist-
ance 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 mean-
ing 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 con-
tract 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 multifam-
ily 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 sii, AND SECTION 515 PROJECTS.— 
Notwithstanding paragraph (1), for section 202 projects, section 
811 projects and section 515 projects, upon the expiration of 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 ^ent 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 pro-
gram 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 OMIS-
SIONS.—^Notwithstanding paragraph (1) or any other provi-
sion 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 managerisd 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 disquali-
fied 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 pref-
erence for tenant 
organizations and 
tenant-endorsed 
community-based nonprofit and public agency purchasers 
meeting such reasonable qualifications as may be estab-
lished 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. FHA MULTIFAMILY DEMONSTRATION AUTHORITY.— 42usci437f 
(a) IN GENERAL.— 
note. 
(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) is repealed. 
Ante, p. 1321-
(B) EXCEPTION.—Notwithstanding the repeal under 285. 
subparagraph (A), amounts made available under section 
210(f) the Departments of Veterans Affairs and Housing 
and Urban Development and Independent Agencies Appro-
priations Act, 1996 shall remain available for the dem-
onstration program under this section through the end 
of fiscal year 1997. 
110 STAT. 2898 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(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 pro-
gram 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" mesins 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 Hous-
ing 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 sub-
section (1), the Secretary shall administer a demonstration pro-
gram 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 ade-
quate 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 sub-
sidies; 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 dem-
onstration program in a manner that will protect the financial 
interests of the Federal Grovemment 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 manage-
ment of property; 
(E) minimizing any adverse income tax impact on prop-
erty 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 bEdance 
competing goals relating to individual projects in a manner 
that will further the purposes of this section. 
(d) PARTICIPATION ARRANGEMENTS.— 
(1) IN GENERAL.—In canying out the demonstration pro-
gram, 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, respon-
sibilities 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 arrange-
ment entered into under this subsection shall include a designee 
as the primary partner. Any organization selected by the Sec-
retary 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 partici-
pation 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; 
110 STAT. 2900 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(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 demonstra-
tion, if the offer to renew is on terms and conditions, as agreed 
to by the Secretary or designee and the owner under a restruc-
turing. 
(2) AFFORDABILITY REQUIREMENTS.—Except as otherwise 
provided by the Secretary, in exchange for any mortgage 
restructuring under this section, a project shall remain afford-
able for a period of not less than 20 years. Affordability require-
ments 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 reason-
able return to the owner, as determined solely by the Secretary. 
The demonstration contract shall be for the minimum term 
necesssiry for the rents and mortgages of the multifamily hous-
ing 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 £iny), 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2901 
to subparagraph (B), designee, subject to the funding Hmitation 
in subsection (1), shall take not less than one of the actions 
specified in subparagraphs (G), (H), and (I) £ind 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, includ-
ing 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 Sec-
retary or designee may require an owner of a property 
assisted under the section 8 new construction/substan-
tial 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 trans-
fer 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 deter-
mine. 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 valu-
able 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 £iny contract restructured or renewed under the dem-
onstration program. 
(E) FULL OR PARTIAL PAYMENT OF CLAIM.—^Notwith-
standing any other provision of law, the Secretary may 
make a full payment of claim or partial pajrment of claim 
prior to default. 
(F) CREDIT ENHANCEMENT.— 
(i) IN GENERAL.—^The Secretary or designee may 
provide FHA multifamily mortgage insurance, reinsur-
110 STAT. 2902 
PUBLIC LAW 104-204—SEPT. 26, 1996 
ance, or other credit enhancement alternatives, includ-
ing 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 insur-
ance 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 multi-
family 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 (1). 
(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 (1). 
(H) DEBT FORGIVENESS.—^The Secretary or designee, 
for good cause and at the request of the owner of a multi-
family 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 mar-
ket 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 appro-
priate 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 pref-
erence under the demonstration program for budget-based 
rents for unique housing projects, such as projects des-
ignated 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2903 
8 project-based assistance. Section 8 tenant-based assist-
ance 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 success-
fully. 
(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 sec-
tion, 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 
{>urchasers meeting such reasonable qualifications as may be estab-
ished by the Secretary. 
(k) LIMITATION ON DEMONSTRATION AUTHORITY.—The Secretary 
shall carry out the demonstration program with respect to mort-
gages not to exceed 50,000 units. 
(1) 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 Appro-
priations Act, 1996 (110 Stat. 1321), for the costs (including any 
credit subsidy costs associated with providing direct loans or mort-
gage 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 finsd report on the demonstration 
program. 
(2) CONTENTS.—Each report submitted under paragraph 
(1)(A) shall include a description of— 
(A) each restructuring propossd submitted by an owner 
of a multifamily housing project, including a description 
of the physical, financial, tenancy, and market characteris-
tics of the project; 
(B) the Secretary's evaluation and reasons for each 
multifamily housing project selected or rejected for partici-
pation in the demonstration program; 
110 STAT. 2904 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(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 pro-
gram, 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); £ind 
(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 Hous-
ing 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 Sec-
retary 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 Sec-
retary 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; 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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; 
"(11) 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 emplo3rment 
by more than 7,000 Federal Grovemment civiligm 
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 legm 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 Develop-
ment, and Independent Agencies Appropriations Act, 1996 and prior 
Acts that are recaptured hereafter, to the extent not governed 
by the specific lemguage 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.—^Notwithstand-
ing 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 
110 STAT. 2906 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 Devel-
opment 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-l), as 
amended by section 405(d)(1) of The Balanced Budget Downpayment 
Ante, p. 44. 
Act, I, and by section 228(a) of The Balanced Budget Downpa3rment 
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 con-
tract, 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 pursu-
ant to this paragraph, or (ii) the actual rent paid for a com-
parable 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 mort-
gages 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, accumu-
late, 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.". 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2907 
TITLE III 
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 monu-
ments outside of the United States and its territories and posses-
sions; 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, That where station allowance has been 36 USC I2ib. 
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 traveling on business 36 USC 122. 
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 o
J
F the Commission: Provided 
36 USC I22a. 
further. That the Commission shall reimburse other Government 
agencies, including the Armed Forces, for salary, pay, and allow-
ances 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 qualifjdng commu-
nity 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 modifjdng such logins, 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 author-
ized 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 
110 STAT. 2908 
PUBLIC LAW 104-204—SEPT. 26, 1996 
to exceed the per diem rate equivalent to the rate for GS-18, 
purchase of nomingil awards to recognize non-Federal officials' con-
tributions 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 initia-
tives 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 Septem-
ber 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 representa-
tion expenses: Provided further. That not more than $59,000,000, 
to remain available without fiscal year limitation, shall be trans-
ferred 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 
grgmts 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 head-
ing 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, innova-
tion, 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 author-
ized 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 con-
tributions 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, includ-
ing 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; 
110 STAT. 2910 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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. 
ENVIRO^fMENTAL PROGRAMS AND MANAGEMENT 
For environmental programs and management, including nec-
essary 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 author-
ized 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; pur-
chase 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, alter-
ation, 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 
canying 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 avail-
able until expended: Provided, That EPA is authorized to establish 
and construct a consolidated research facility at Research Triangle 
Park, North Carolina, at a msiximum 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 author-
ized to construct such facility through multi-year 
contracts 
incrementally funded through appropriations hereafter made avail-
able for this project: Provided further. That, notwithstanding the 
previous provisos, for monies obligated pursuEint 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 Reauthoriza-
tion 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 fiirther, That $11,000,000 of the funds appropriated under 
this heading shall be transferred to the "Office of Inspector Greneral" 
appropriation to remain available until September 30, 1997: 
Provided further. That notwithstanding section lll(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 lll(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 dur-
ing fiscal year 1997. 
LEAKING UNDERGROUND STORAGE TANK TRUST FUND 
(INCLUDING TRANSFER OF FUNDS) 
For necessary expenses to carry out leaking underground stor-
age 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 Gen-
eral" appropriation to remain available until September 30, 1997. 
OIL SPILL RESPONSE 
(INCLUDING TRANSFER OF FUNDS) 
For expenses necessary to carry out the Environmental Protec-
tion 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 avail-
able until expended, of which $1,900,000,000 shall be for making 
29-194 O - 96 - 3 : QL 3 Part 4 
110 STAT. 2912 
PUBLIC LAW 104-204—SEPT. 26, 1996 
capitalization grants for State revolving funds to support water 
infrastructure financing; $100,000,000 for architectural, engineer-
ing, planning, design, construction and related activities in connec-
tion with the construction of high priority water and wastewater 
facilities in the area of the United States-Mexico Border, aifter 
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 Vil-
lages; $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 speci-
fied for such grants in the conference report and joint explanatory 
statement of the committee of conference accompanjdng this Act 
(H.R. 3666); and $674,207,000 for grants to States and federally 
recognized tribes for multi-media or single media pollution preven-
tion, 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 
33 use 128 note, programs: Provided further. That notwithstanding any other provi-
sion 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, notwithstand-
ing 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 fiscgd 
year 1996 appropriation, provided the State receives such grants 
in fiscal year 1997. 
WORKING CAPITAL FUND 
(INCLUDING TRANSFER OF FUNDS) 
31 use 501 note. 
There is hereby established 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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, deprecia-
tion 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 CEirrying out the purposes of the National Science and 
Technology Policy, OrgEinization, and Priorities Act of 1976 (42 
U.S.C. 6601 and 6671), hire of passenger motor vehicles, and serv-
ices as authorized by 5 U.S.C. 3109, not to exceed $2,500 for 
official reception and representation expenses, and rental of con-
ference 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 Reorga-
nization Plan No. 1 of 1977, $2,436,000. 
FEDERAL EMERGENCY MANAGEMENT AGENCY 
DISASTER R E L I E F 
For necessary expenses in carrjdng 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, Eimounts appropriated herein shall 
be available for obligation on October 1, 1996: Provided further. 
Reports. 
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 
110 STAT. 2914 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 Assist-
ance 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 allowEinces 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: Pro-
vided, That total administrative costs shall not exceed three and 
one-half percent of the total appropriation. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 sifter "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 Appro-
priations. For fiscal year 1997, flood insursince 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 of a working capital fund for the Federal 31USC 501 note. 
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 deter-
mines 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 pay-
ments 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. 
110 STAT. 2916 
PUBLIC LAW 104-204—SEPT. 26, 1996 
ADMINISTRATIVE PROVISION 
Regulations. 
The Director 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 Emer-
gency 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 Emer-
gency Management Agency to be obligated for its radiological 
emergency preparedness program for such fiscal year. The meth-
odology 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 associ-
ated 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 pursu-
ant 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 dur-
ing fiscal year 1997 in excess of $7,500,000 shall remain in the 
fund and shall not be available for expenditure except as authorized 
40 use 761a. 
in appropriations Acts: Provided 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 develop-
ment 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 per-
sonal property, and acquisition or condemnation of real property, 
as authorized by law; space flight, spacecraft control and commu-
nications 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 is 
109 Stat. 88. 
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 oper-
ations and support; space communications activities including oper-
ations, production and services; maintenance; construction of facili-
ties including repair, rehabilitation, and modification of facilities, 
minor construction of new facilities and additions to existing facili-
ties, 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 provi-
sion does not apply to the amounts appropriated in "Mission 
110 STAT. 2918 
PUBLIC LAW 104-204—SEPT. 26, 1996 
support" pursuant to the authorization for repair, rehabilitation 
and modification of faciUties, minor construction of new faciUties 
and additions to existing faciUties, and faciUty 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 Gen-
eral", 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 
Notification. 
appropriated: Provided further, 
That 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 Liquid-
ity Facility for the principal amount of new direct loans to member 
credit unions, as authorized by the National Credit Union Central 
Liquidity 
FaciHty 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 appro-
priated 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 £ind rental of conference rooms in the District of Columbia, 
$619,000,000, to remain available until September 30, 1998: Pro-
vided, 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 ceil-
ings, 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 pa3mtient to the Neighborhood Reinvestment Corporation 
for use in neighborhood reinvestment activities, as authorized by 
110 STAT. 2920 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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, includ-
ing expenses of attendance at meetings and of training for uni-
formed 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 
E
erformed directly in connection with care and treatment of medical 
eneficiaries of the Department of Veterans Affairs; to travel per-
formed 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, £ind 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 fiinds available for the adminis-
trative expenses of the Department of Housing and Urban Develop-
ment 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 avmlable, without 
regard to the limitations on administrative expenses, for legal serv-
ices 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, Federsd Home Loan 
Mortgage Corporation, Federal Financing Bank, Federal Reserve 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2921 
banks or any member thereof, Federal Home Loan banks, and 
any insured bank within the meaning of the Federal Deposit Insur-
ance 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 sm 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 certifi-
cation, and without such a voucher or abstract, is specifi-
cally authorized by law; and 
(2) unless such expenditure is subject to audit by the Gen-
eral Accounting Office or is specifically exempt by law from 
such audit. 
SEC. 406. None of the funds provided in this Act to any depart-
ment 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 emplo3mtient, 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 Govern-
ment 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 pajntnent 
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 specifi-
cally 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. Noth-
ing 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. Except as otherwise provided under existing law 
or under an existing Executive Order issued pursusint 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 avail-
able 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. 
Contracts. 
Public 
infonnation. 
Records. 
110 STAT. 2922 
PUBLIC LAW 104-204—SEPT. 26, 1996 
Reports. 
Government 
organization. 
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, evalua-
tions, studies, analyses and manugds, 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 persongJ cook, chauffeur, 
or other personal servants to any officer or employee of such depart-
ment or agency. 
SEC. 413. None of the funds provided in this Act to any depart-
ment 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. 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 annusd rental is more than $300,000 unless the 
Secretary submits, in writing, a report to the Committees on Appro-
priations 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 OfRce 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. 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. 
" fc*"'-'^*' 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2923 
SEC. 420. Corporations and agencies of the Department of Hous-
ing 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 corpora-
tions 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 pur-
chases are necessary to protect the financial interest of the United 
States Government. 
SEC. 421. (a) The purpose of this section is to provide for 38USC1801 
the special needs of certain children of Vietnam veterans who note. 
were bom 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 CfflLDREN 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. 
"§ 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. 
"§ 1802. Spina biHda conditions covered 
'This chapter applies with respect to all forms and manifesta-
tions of spina bifida except spina bifida occulta. 
"§ 1803. Health care 
"(a) In accordance with regulations which the Secretary shall Regulations. 
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. 
110 STAT. 2924 
PUBLIC LAW 104-204—SEPT. 26, 1996 
"(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, sup-
plies, equipment, devices, appliances, assistive tech-
nology, 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 treat-
ment 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 treat-
ment 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 resi-
dence. 
''§ 1804. Vocational training and rehabilitation 
"(a) Pursuant to such regulations as the Secretary may pre-
scribe, the Secretary may provide vocational training under this 
section to a child of a Vietnam veteran who is suffering from 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 pre-
pare for and participate in vocational training or emplojrment; 
and 
"(B) may include a program of education at an institution 
of higher education if the Secretary determines that the pro-
gram 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 addi-
tional months if the Secretary determines that the extension is 
necessary in order for the child to achieve a vocational goal identi-
fied (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 assist-
ance 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. 
"(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 
110 STAT. 2926 
PUBLIC LAW 104-204—SEPT. 26, 1996 
Effective date. 
38 u s e 1801 
note. 
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 £iny 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. 
"§ 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. BeneHts for Children of Vietnam Veterans Who Are B o m With 
Spina BiHda 
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 pen-
sion"; 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) 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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) The amendments made by subsection (a) shall take effect 
Effective date. 
on October 1, 1996. 
38 USC 1151 
(2) Section 1151 of title 38, United States Code (as amended '^°^-
by subsection (a)), shall govern all administrative and judicial deter-
minations 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 applica-
tions and applications seeking to reopen, revise, reconsider, or other-
wise 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), or any 38 USC 1151 
other provision of this Act, section 421 and this section shall not ^ote. 
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 Sec-
retary shall consider as cash or its equivalent any amounts bor-
rowed 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 mort-
gage". 
110 STAT. 2928 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(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 mortga-
gor 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 provi-
sion 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 pre-
mium paid at the time the mortgage is insured; and 
"(ii)(l) 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 mort-
gages 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: 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2929 
"DELEGATION OF INSURING AUTHORITY TO DIRECT ENDORSEMENT 
MORTGAGEES 
"SEC. 256.(a) AUTHORITY.—The Secretary may delegate, to one 
or more mortgagees approved by the Secretary imder 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 occupgincy 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 mort-
gage 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 misrepre-
sentation was involved in connection with the origination, the 
Secretary may require the mortgagee approved under this sec-
tion 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 imder this section 
violates the requirements and procedures established by the Sec-
retary or the Secretary determines that other good cause exists, 
the Secretary may cancel a delegation of authority under this sec-
tion 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) 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 OP 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 £ind 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 
12 u s e 1715z-
21. 
Regulations. 
110 STAT. 2930 
PUBLIC LAW 104-204—SEPT. 26, 1996 
Notification. 
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 fair-
ness 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 serv-
ices 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 manage-
ment; and 
(iv) include forecasts in expected workload and consid-
eration of the demand for Veterans Administration health 
care that may not be reflected in current workload projec-
tions. 
(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 para-
graph (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) IMPLEMENTATION.—^The Secretary shall implement the plan 
developed under subsection (a) not later than 60 days after submit-
ting 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. 
GAG 
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 Cor-
poration 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2931 
Mississippi River to the Dryden Flight Research Center in 
California for the purpose of the consolidation of such aircraft. 
SEC. 
432. 
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. Ill), would qualify for a voluntary 
separation incentive payment under section 3 of such 
Act; or 
(D) an employee who has previously received any vol-
untary separation incentive pajonent 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 mini-
mize 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 sepa-
ration 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 separa-
tion, 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 pajonent, and shgill not be 
included in the computation, of any other type of Government 
benefit; 
National 
Aeronautics and 
Space 
Administration 
Federal 
Employment 
Reduction 
Assistance Act of 
1996. 
5 u s e 5597 note. 
110 STAT. 2932 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(4) shall not be taken into account for purposes of determin-
ing 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 pa3anent 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 pa3anent under this section and accepts any employ-
ment with the Grovemment of the United States within five 
years after the date of the separation on which the pa5mient 
is based shall be required to repay, prior to the individual's 
first day of emplojrment, the entire amount of the incentive 
pajonent 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 repa3anent 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 emplojrment 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 regula-
tions, unless the incentive payment is repaid. 
(g) ADDITIONAL AGENCY CONTRIBUTIONS TO THE RETIREMENT 
FUND.— 
(1) In addition to any other pa3nnents 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 sub-
chapter III of chapter 83 or chapter 84 of title 5 to whom 
a voluntary separation incentive has been paid under this Act. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 pajrment 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 author-
ized 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) The President shall take appropriate action to ensure President, 
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 advan-
tage 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 Over-
sight 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 separa-
tion 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 
110 STAT. 2934 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 Adminis-
trator 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 imme-
diate entry onto the property. 
TITLE 
V—SUPPLEMENTAL 
DEPARTMENT 
OF 
VETERANS 
AFFAIRS 
VETERANS BENEFITS ADMINISTRATION 
COMPENSATION AND PENSIONS 
For an additional amount for "Compensation £ind Pensions", 
$100,000,000, to be made available upon enactment of this Act, 
to remain available until expended. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 pre-
viously 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 VI—NEWBORNS' AND MOTHERS' HEALTH 
PROTECTION ACT OF 1996 
SEC. 601. SHORT TITLE.—This title may be cited as the 
"Newborns' and Mothers' Health Protection Act of 1996". 
SEC. 602. 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 pro-
vider 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) 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 
R E N E W A B I L I T Y " ; 
(3) by redesignating sections 704 through 707 as sections 
731 through 734, respectively; 
(4) by inserting before section 731 (as so redesignated) 
the following new heading: 
and 
"SUBPART C—GENERAL PROVISIONS"; 
(5) by inserting after section 703 the following new subpart: 
"SUBPART B—OTHER REQUIREMENTS 
"SEC. 711. STANDARDS RELATING TO BENEFITS FOR MOTHERS AND 
NEWBORNS. 
"(a) REQUIREMENTS FOR MINIMUM HOSPITAL STAY FOLLOWING 
BIRTH.— 
Newborns' and 
Mothers' Health 
Protection Act of 
1996. 
42 u s e 201 note. 
42 u s e 300gg-4 
note. 
Ante, p. 1939. 
29 u s e 1191-
1191c. 
29 u s e 1185. 
110 STAT. 2936 
PUBLIC LAW 104-204—SEPT. 26, 1996 
"(1) IN GENERAL.—^A group health plan, and a health insur-
ance 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 para-
graph (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 insur-
ance 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 reimburse-
ment 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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2937 
hospital lengths of stay in connection with childbirth for a 
mother or newborn child under the plan (or under health insur-
ance 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 pro-
vider 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 guide-
lines 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 con-
strued 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 sec-
tion) is amended by striking "Nothing" and inserting "Except 
29 USC 1191. 
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 sec-
tion) is amended by inserting "(other than section 711)" after 
29 USC 1191a. 
"part". 
(3) Title I of such Act (as amended by section 101 of 
the Health Insurance Portability and Accountability Act of 1996 
110 STAT. 2938 
PUBLIC LAW 104-204—SEPT. 26, 1996 
and the preceding provisions of this section) is further 
amended— 
29 use 1003. 
(A) in the last sentence of section 4(b), by striking 
"section 
706(b)(2)", 
"section 
706(b)(1)", 
and 
"section 
706(a)(1)" and 
inserting 
"section 
733(b)(2)", 
"section 
733(b)( D", and "section 733(a)( 1)", respectively; 
29 use 1021. 
(B) in section 101(g), by striking "section 706(a)(2)" 
and inserting "section 733(a)(2)"; 
29 use 1022. 
(C) in section 102(b), 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)"; 
29 use 1024. 
(D) in section 104(b)(1), by striking "section 706(a)(1)" 
each place it appears and inserting "section 733(a)(1)"; 
29 use 1132. 
(E) in section 502(b)(3), by striking "section 706(a)(1)" 
and inserting "section 733(a)(1)"; 
29 use 1136. 
(F) in section 506(c), by striking "section 706(a)(2)" 
and inserting "section 733(a)(2)"; 
29 use 1144. 
(G) in section 514(b)(9), by striking "section 704" and 
inserting "section 731"; 
29 use 1181. 
(H) in the last sentence of section 701(c)(1), by striking 
"section 706(c)" and inserting "section 733(c)"; 
29 use 1191a. 
(I) in section 732(b), 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 exclu-
sions. 
"Sec. 702. Prohibiting discrimination against individual participants and bene-
ficiaries 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 e—GENERAL PROVISIONS 
"Sec. 731. Preemption; State flexibility; construction. 
"Sec. 732. Special rules relating to group health plans. 
"Sec. 733. Definitions. 
"Sec. 734. Regulations.". 
Applicability. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply with respect to group health plans for plan years begin-
ning 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 
Ante, p. 1955. 
Health Insurance Portability and Accountability Act of 1996) is 
amended— 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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. STANDARDS RELATING TO BENEFITS FOR MOTHERS AND 
42 USC 300gg-4. 
NEWBORNS. 
"(a) REQUIREMENTS FOR MINIMUM HOSPITAL STAY FOLLOWING 
BIRTH.— 
"(1) IN GENERAL.—^A group health plan, and a health insur-
ance 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 para-
graph (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 insur-
ance 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 reimburse-
ment 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 
110 STAT. 2940 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 insur-
ance 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 require-
ments 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 pro-
vider 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 guide-
lines 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 con-
strued as superseding a State law described in paragraph (1).". 
(b) CONFORMING AMENDMENTS.— 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2941 
(1) Section 2721 of such Act (as added by section 102 
of the Health Insurance Portability and Accountability Act of 
1996) is amended— 
Ante, p. 1967. 
(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) is amended by inserting "(other than section 2704)" after Ante, p. 1971. 
"part". 
(c) EFFECTIVE DATE.—^The amendments made by this section 
shall apply with respect to group health plans for plan years begin-
ning 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) is amended— 
Ante, p. 1978. 
(1) by inserting after the part heading the following: 
42 use 300gg-4 
note. 
"Subpart 1—Portability, Access, and Renewability Requirements"; 
(2) by redesignating sections 2745, 2746, and 2747 as sec-
tions 2761, 2762, and 2763, respectively; 
(3) by inserting before section 2761 (as so redesignated) 
the following: 
42 use 300gg-
61—300gg-63. 
"Subpart 3—CJeneral Provisions"; and 
(4) by inserting after section 2744 the following: 
"Subpart 3—Other Requirements 
"SEC. 2751. 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(dXl)) for a State 
that regulates such coverage that is described in any of the 
following subparagraphs: 
42 use 300gg-
5L 
110 STAT. 2942 
PUBLIC LAW 104-204—SEPT. 26, 1996 
42 use 300gg-
44. 
42 use 300gg-
61. 
42 use 300gg-
62. 
Applicability. 
42 use SOOgg-
44 note. 
42 use 300gg-4 
note. 
"(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 guide-
lines 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)" and insert 
"2762(b)". 
(2) In section 2745(a)(1) (before redesignation under sub-
section (a)(1)), strike "2746" and insert "2762". 
(3) In section 2746(b) (before redesignation under sub-
section (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) 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. 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 chang-
ing 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. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2943 
(b) ADVISORY PANEL.— 
Establishment. 
(1) IN GENERAL.—^Not later than 90 days after the date 
of enactment of this Act, the Secretary of Heeilth 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 sub-
section (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 Depart-
ment 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 rep-
resentatives 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 out-
comes following childbirth; 
(B) the factors determining the length of hospital stay 
following childbirth; 
(C) the diversity of negative or positive outcomes affect-
ing 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— 
29-194 O - 96 - 4: QL 3 Part 4 
110 STAT. 2944 
PUBLIC LAW 104-204—SEPT. 26, 1996 
(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 chal-
lenges; 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 Representa-
tives 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 enact-
ment of this Act; 
(B) an interim report concerning such study and ele-
ments 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 termi-
nate on the date that occurs 60 days after the date on which 
the last report is submitted under subsection (d). 
Mental Health 
TITLE VII—PARITY IN THE APPLICATION OF CERTAIN 
Parity Act of 
LIMITS TO MENTAL HEALTH BENEFITS 
1996. 
42 use 201 note. 
SEC. 701. 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: 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2945 
"SEC. 712. PARITY IN THE APPUCATION OF CERTAIN LIMITS TO 29 USC 1185a. 
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 life-
time 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 cat-
egories. 
"(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 medi-
cal 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. 
110 STAT. 2946 
PUBLIC LAW 104-204—SEPT. 26, 1996 
"(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 subpara-
graph (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 pro-
vided 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 sub-
sections (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 para-
graph to an employer shall include a reference to any 
predecessor of such employer. 
PUBLIC LAW 104-204—SEPT. 26, 1996 
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 require-
ments 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 life-
time 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 insur-
ance 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 menteil health benefits.". 
(c) EFFECTIVE DATE.—^The amendments made by this section 
shall apply with respect to group health plans for plan years begin-
ning 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. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
42 USC 300gg-5. 
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— 
AppUcabUity. 
29 use 1183b 
note. 
110 STAT. 2948 
PUBLIC LAW 104-204—SEPT. 26, 1996 
"(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 life-
time 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 medi-
cal 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 subpara-
graph (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 
PUBLIC LAW 104-204—SEPT. 26, 1996 
110 STAT. 2949 
taking into account the weighted average of the annual 
hmits appUcable 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 pro-
vided 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 plsin) 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 require-
ments 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 life-
time limit' means, with respect to benefits under a group health 
plsin 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 cov-
erage 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. 
110 STAT. 2950 
PUBLIC LAW 104-204—SEPT. 26, 1996 
"(f) SUNSET.—This section shall not apply to benefits for services 
furnished on or after September 30, 2001.". 
Applicability. 
(b) EFFECTIVE DATE.—The amendments made by this section 
42 use 300gg-5 
shall apply with respect to group health plans for plan years begin-
™*®" 
ning 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.