Legislative Notice #29

July 21, 1997

Calendar No. 118

Reported from the Appropriations Committee July 17, 1997, by a 28 to 0 vote. S. Rept. 105-53.

• S. 1034, an original Senate bill, provides a net of $90.90 billion in new budget authority, which is $8.87 billion above FY97, and $38.8 million under the budget request. Overall, the Senate bill provides about $69.4 billion in discretionary funding, and $21.5 billion in mandatory spending. [See attached chart.]
• The Senate bill reflects the high priority the Committee has afforded to veterans' medical care. The bill provides $40.31 billion for the Department of Veterans Affairs ($222.6 million more than last year and $92.9 million more than the President's request) and increases funding for medical care by $68 million over the FY98 request, bringing it to over $17 billion.
• The Senate-reported bill continues the policy and programmatic reforms in housing policies enacted last year and funds the Community Development Block Grants Program and the HOME program at the FY97 level.
• For EPA, the Senate bill provides $6.98 billion for FY98, $176.5 million more than FY97, but $669.6 million less than the budget request.
• The bill funds NASA at the budget request, $13.5 billion, which is $209 million less than the FY97 level.
• The House on July 16 passed H.R. 2158, its VA-HUD funding bill, 397-31.

• This diverse appropriation bill covers veterans, public and assisted housing (HUD), environmental protection (EPA), NASA, the National Science Foundation (NSF), the Federal Emergency Management Agency (FEMA), and the President's national service program.
• Veterans' Funding. The bill provides $18.77 billion in discretionary funding for the Department of Veterans Affairs, providing an increase in funding for VA medical care, research, and the state home program ($92.92 million above the request). .
• Housing Funding. The bill funds HUD at $25.50 billion, ($6.05 billion above FY97). The net amount for Title II (excepting rescissions) is $25.37 billion. The bill freezes most programs at the FY97 levels, including Homeless Assistance Grants at $823 million, Drug Elimination Grants at $290 million, Community Development Block Grants (CDBG) at $4.6 billion, HOME at $1.4 billion. The Committee continues policy and programmatic reforms enacted last year and strongly supports enactment of comprehensive reform legislation under the jurisdiction of the authorizing committee, including an overhaul of the public and assisted housing programs. Until such time, however, the Committee-reported bill contains temporary extensions of provisions needed to halt the increasing cost of housing subsidies. In addition, the bill includes the multifamily housing restructuring proposals now under consideration by the authorizing committee as part of the reconciliation process.
• EPA. The Committee bill provides $6.98 billion for the Environmental Protection Agency, an increase of $176.5 million over last year's level, with increases in such areas as state revolving funds. The bill does not include any legislative riders for EPA.
• FEMA. The Committee recommends the full request of $789 million. Due to its concerns about the skyrocketing costs of disaster relief programs (more than $10 billion has been appropriated in FY's 95-97), a limitation on spending has been included which is consistent with FEMA's recent legislative proposal as a first step toward reforming the disaster relief program.
• NASA. The Senate version provides the requested funding for NASA ($13.50 billion) and recommends full funding of $1.42 billion for the Mission to Planet Earth Program. The Committee fully funds the space shuttle and the space station. This funding level is $209 million less than FY97.
• National Science Foundation. The bill provides a modest increase of $107 million over the 1997 level for a total of $3.38 billion to support high-priority basic research and technology development activities, an increase of $10 million above the President's request.
• Corporation for National and Community Service. The bill appropriates $403.5 million for this agency, which oversees the AmeriCorps program, and provides $1 million above last year for the Inspector General's office. .
• Chemical Safety and Hazard Investigation Board. The Committee operationalizes this Board for which the funds had been rescinded as part of the Clinton administration's reinventing government effort, appropriating $4 million for FY98.

Veterans Affairs (VA)

Total Funding: The Committee has provided a total of $40.31 billion for the VA, including $21.54 billion in mandatory spending and $18.77 billion in discretionary spending. This total is $222.6 million above FY97, and $92.9 million above the request.

Compensation and Pensions: Provides $19.93 billion, which is $1.26 billion above last year and the same as the request.

Medical Care: Increases funding for veterans medical care by $68 million over the request for a total of $17.03 billion. In addition, the Committee concurs with the administration proposal to retain third-part collections estimated to total $604 million. This provides total discretionary resources for medical care of $17.63 billion, an increase of $617.4 million over last year.

The Committee Report supports the restructuring efforts of the Veterans Health Administration (VHA) and the goals to achieve, over a five-year period, a 30-percent decrease in the cost of care on a per-patient basis, a 20-percent increase in the numbers of veterans served, and a 10-percent increase in revenues from nonappropriated sources. However, the Committee is concerned that VHA has yet to develop a nationwide plan for community-based outpatient clinics (CBOCs) to ensure equitable access to medical care nationwide and directs that a report on this be submitted by February 15, 1998.

The Committee bill delays the availability until September 30, 1998, of $550 million in the equipment, lands and structures object classifications.

Construction Projects: Provides $92.8 million for major construction projects and $166.3 million for minor projects.

Departmental Administration: Appropriates $786.4 million for general operating expenses, a decrease of $41.2 million from last year, and $60 million below the request. Additional resources are made available through reimbursements totaling $312.5 million, with total estimated obligations of approximately $1.1 billion. The National Academy of Public Administration panel calls for the VA to develop a comprehensive reform plan, and the Committee directs the VA to present a formal plan to Congress by March 31, 1998.

Housing and Urban Development (HUD)

Housing Reforms: Consistent with the reform of housing policies begun over the last several years, the Committee recommends a new account structure for HUD. The new housing voucher fund would include the renewal of section 8 contracts, funding for section 8 contract amendments, and section 8 relocation assistance. The new public housing operating fund would fund the operating costs of the public housing program, and the new public housing capital fund would address the capital needs of public housing including the public housing modernization program. The "Native American housing block grants" account consolidates most of the funding for Native American housing activities under a single account. Finally, a new "Housing for special populations" account would provide the funding for section 202 elderly and section 811 disabled housing.

Due to concern over HUD's repeated gestures of reinvention, the Committee directs the Department to report within 120 days of enactment of this bill on how many programs the Department plans to eliminate, what cost savings may occur, and what increased efficiency will be gained (including staff reassignments and reductions). Also, the Committee urges HUD to meet all the requirements of the Government Performance and Results Act.

Housing Certificate Fund: The Committee recommends $10.69 billion, of which $9.2 billion is to fund expiring section 8 contracts, $1.15 billion is to fund contract amendments, and $343 million is to fund section 8 relocation assistance, including the costs of sticky vouchers for families that choose to continue to live in multifamily housing in which a mortgage is refinanced and the housing was previously eligible for the Preservation Program. Also, this account includes funds for new section 8 certificates and vouchers to assist residents that are facing displacement due to prepayment of subsidized mortgages or because of demolition and redevelopment activities under HOPE VI. Finally, the Committee reiterates its continuing concern over HUD's inability to provide adequate accounting procedures for identifying excess section 8 contract reserves.

Public Housing Capital Fund: The bill provides $2.5 billion (same as request) for modernization and capital needs of public housing authorities.

Public Housing Operating Fund: The bill recommends $2.9 billion (same as request) for the Fund, and requests GAO to conduct a study on the adequacy of the performance funding system and public housing operating funds for the management of public housing agencies.

Drug Elimination Grants for Low-Income Housing: The Committee recommends $290 million for these grants (same as the request), including $10 million for technical assistance grants, and $10 million for Operation Safe House.

Revitalization of Severely Distressed Public Housing (HOPE VI): The Committee appropriates $550 million for this account and urges the Department to review the cost of projects under this program, including the high cost of replacing units throughout the Nation.

Native American Housing Block Grant: The Committee recommends $485 million (same as request) for the Native American housing block grants to help Indian Tribes address their housing needs within their communities (consolidates most Indian housing activities into a flexible block grant).

Community Development Grants: The bill provides $4.6 billion for the Community Development Block Grant (CDBG) Program, the same as last year and the budget request. The Committee has included brownfields cleanup as an eligible activity and urges communities to work with the EPA to maximize the cleanup of brownfields and the return of these areas to productive use.

HOME Investment Partnerships Program: This program, which provides assistance to states and local governments for the purpose of expanding the supply of affordable housing, is funded at $1.4 billion, the same level as last year, and $91 million over the budget request.

Legislative Provisions: The bill contains a number of administrative provisions, including the following: (1) incorporates the section 8 mark-to-market multifamily reform bill, as passed by the Senate on June 25, 1997, as part of the Balanced Budget Act of 1997. This comprehensive program would provide options for restructuring mortgages and lowering section 8 costs; and (2) provides HUD flexibility to make rehabilitation grants and loans in disposing of HUD-owned and HUD-held properties. Due to the Committee's concern about accountability, HUD is directed to report to the Committee on January 15, 1999, and August 15, 1999, on all grants and loans made under this authority.

Environmental Protection Agency (EPA)

Total Funding: Appropriates $6.98 billion for FY 98, $669.6 million below the request, and $176.5 million above the current level. With the exception of funding for Superfund, the total amount recommended for EPA comes close to the budget agreement. Significant increases are recommended in the areas of particulate matter research and monitoring, implementation activities associated with the new food quality and safe drinking water laws, leaking underground storage tank grants, state and tribal environmental assistance grants, and state revolving loan funds. Because the Superfund program needs to be reformed and reauthorized, coupled with the constraints imposed by the budget allocation, justification could not be made to significantly increase funding for the program.

State Assistance Programs: The Committee appropriates $3.05 billion for state and tribal assistance grants, an increase of $136.8 million over the 1997 enacted level, and an increase of $253.7 million over the request. The Committee provides $1.35 billion for clean water state revolving funds (which is $275 million above the request); $725 million for performance partnership/categorical grants ($10 million over the request); $725 million for drinking water state revolving funds; and $150 million for water and wastewater projects on the U.S.-Mexico border.

Environmental Programs and Management: This account includes the development of environmental standards; monitoring and surveillance of pollution conditions; direct federal pollution control planning; preparation of environmental impact statements; and compliance assurance. For these activities, $1.8 billion is appropriated, an increase of $48.8 million above last year, and $86.6 million below the request. The Committee made numerous changes to the budget request. The programs that took the biggest reductions from the request include the climate change action plan (a decrease of $52.3 million, but leaving $75 million, which is a 7- percent increase over last year); the new environmental monitoring for public access and community tracking program (a decrease of $10 million); sustainable development challenge grants (a decrease of $10 million); and the Montreal Protocol Facilitation Fund (a decrease of $9 million, but leaving $12 million).

Superfund: The Committee recommends $1.3 billion for the Superfund program, an increase of $5.8 million above last year, and $794 million less than requested. (See Committee Report, p. 65.) This includes $250 million from general revenues, as authorized, and the balance from the trust fund. The amount of $903 million is provided for response action (site cleanup activities), including the President's full request for brownfields. Also, the Committee provides $174 million for enforcement, and $125 million for management and support.

Federal Emergency Management Agency

The bill provides the full request of $788.6 million. This is a decrease of $4.3 billion below the enacted level, owing largely to the disaster relief supplemental appropriation of FY97. The Committee recommends the budget request of $320 million for FEMA disaster relief. However, due to its concerns about the skyrocketing costs of disaster relief programs (more than $10 billion has been appropriated in FYs 95-97), a limitation on spending has been included which is consistent with FEMA's recent legislative proposal as a first step toward reforming the disaster relief program. Consistent with FEMA's legislative proposal to begin to curb disaster relief expenditures, the bill's restrictions on FEMA spending are intended to serve as an interim measure in the anticipation of enactment of comprehensive amendments to the Stafford Act.

National Aeronautics and Space Administration (NASA)

Total Funding: Fully funds the request of $13.5 billion for NASA, which is $209.2 million less than last year.

Human Space Flight: Appropriates $5.33 billion for Human Space Flight activities, which is the same as the budget request. The bill provides full funding of $2.1 billion for the space station.

Science, Aeronautics, and Technology: Fully funds the request of $5.64 billion. The Committee supports funding of $2.04 billion for space science activities, the same as the budget request.

Mission Support: Fully funds the budget request of $2.51 billion, which includes $5 million for facilities enhancement at Stennis Space Center.

National Service

For the Corporation for National and Community Service, the Committee appropriates $403.5 million ($145.5 million less than requested, and $1 million above last year for the Inspector General's office). Of this amount, $59 million is for educational awards; $215 million is for grants under the National Service Trust, including the AmeriCorps program; $5.5 million is for the Points of Light Foundation; $18 million is for the Civilian Community Corps; $43 million is available for school-based and community-based service-learning programs; $30 million is for quality and innovation activities; $25 million is for administrative expenses; $5 million is for audits and other evaluations; and $3 million is for the Office of the Inspector General.

Government Performance and Results Act

The Government Performance and Results Act of 1993, commonly called GPRA, was intended to rationalize the agency budget process by requiring each agency and department to develop a strategic plan, including a comprehensive mission statement based on the agency's statutory authority, a set of outcome-related strategic goals, and a description on how the agency will accomplish these goals. Certain deadlines of the Results Act are rapidly approaching. For example, each agency must develop a strategic plan that covers at least five years and submit the plan to Congress and the Office of Management and Budget no later than September 30, 1997.

The Committee remains concerned over the status of the strategic plans of most of the agencies covered by this bill. "While NASA has made real progress in developing its strategic plan, most of the other agencies have had mixed success. The Committee advises that it takes the requirements of the Results Act very seriously, including the requirement to consult with Congress, and expects each agency and department to fully meet all requirements of the Results Act."

CBO estimates that the bill would result in outlays of $52.0 billion in FY98; $8.8 billion in FY99; $2.5 billion in FY2000; $1.1 billion in FY 2001; and $659 million in FY 2002 and future years.

Bumpers. Delete funding for the space station.

Harkin. FHA amendments (1) raising single-family mortgage limits to Fannie Mae/Freddie Mac conforming ban limits ($221,500); and (2) streamlining FHA downpayment.

[Chart attached]