Senate Appropriations Committee Issues Report on DOT, HUD, Related Agencies Appropriations Bill, 2018 (Part 6 of 8)

WASHINGTON, Aug. 1 -- The Senate Appropriations Committee issued a report (S.Rpt. 115-138) on legislation (S. 1655) making appropriations for the Departments of Transportation, and Housing and Urban Development, and related agencies for the fiscal year ending September 30, 2018. The report was advanced by Sen. Susan M. Collins, R-Maine, on July 27.

HOUSING

Appropriations, 2017.................................... $392,000,000

Budget estimate, 2018................................... 365,829,000

Committee recommendation................................ 383,000,000

PROGRAM DESCRIPTION

This account provides salary and benefits funding to support staff in headquarters and in 52 field locations in the Office of Housing. The Office of Housing is responsible for implementing programs to assist projects for occupancy by very low- and moderate-income households, to provide capital grants to nonprofit sponsors for the development of housing for the elderly and disabled, and to conduct several regulatory functions. The Office also administers Federal Housing Administration [FHA] programs. FHA administers HUD's mortgage and loan insurance programs, which facilitate the financing of new construction, rehabilitation or the purchase of existing dwelling units. The Office also provides services to maintain and preserve homeownership, especially for underserved populations. This assistance allows lenders to make lower cost financing available to more borrowers for home and home improvement loans, and apartment, hospital, and nursing home loans. FHA provides a vital link in addressing America's homeownership and affordable housing needs.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $383,000,000 for staffing in the Office of Housing, which is $17,171,000 more than the budget request and $9,000,000 less than the fiscal year 2017 enacted level.

POLICY DEVELOPMENT AND RESEARCH

Appropriations, 2017.................................... $24,000,000

Budget estimate, 2018................................... 24,065,000

Committee recommendation................................ 25,400,000

PROGRAM DESCRIPTION

This account provides salary and benefits funding to support staff in headquarters and in 16 field locations in the Office of Policy Development and Research [PD&R;]. PD&R; supports the Department's efforts to help create cohesive, economically healthy communities. PD&R; is responsible for maintaining current information on housing needs, market conditions, and existing programs, as well as conducting research on priority housing and community development issues. The office provides reliable and objective data and analysis to help inform policy decisions.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $25,400,000 for this account, which is $1,335,000 more than the budget request and $1,400,000 more than the fiscal year 2017 enacted level.

PD&R; collects and distributes data on HUD programs, the people HUD serves, and housing needs across the country, in addition to providing technical assistance in these areas. The information it makes available and the analysis it provides to the Department are essential to moving HUD to outcome-based performance measures. The Committee also relies on the data and research provided by PD&R; to inform its work. The recommended amount will ensure that PD&R; can continue to play this important role.

FAIR HOUSING AND EQUAL OPPORTUNITY

Appropriations, 2017.................................... $72,000,000

Budget estimate, 2018................................... 69,808,000

Committee recommendation................................ 72,400,000

PROGRAM DESCRIPTION

This account provides salary and benefits funding to support staff in headquarters and in all regional offices in the Office of Fair Housing and Equal Opportunity [FHEO]. FHEO is responsible for investigating, resolving, and prosecuting complaints of housing discrimination, as well as conducting education and outreach activities to increase awareness of the requirements of the Fair Housing Act. The Office also develops and interprets fair housing policy, processes complaints, performs compliance reviews, and provides oversight and technical assistance to local housing authorities and community development agencies regarding section 3 of the Housing and Urban Development Act of 1968.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $72,400,000, which is $2,592,000 more than the budget request and $400,000 more than the fiscal year 2017 enacted level.

OFFICE OF LEAD HAZARD CONTROL AND HEALTHY HOMES

Appropriations, 2017.................................... $9,353,000

Budget estimate, 2018................................... 7,600,000

Committee recommendation................................ 8,200,000

PROGRAM DESCRIPTION

This account provides salary and benefits funding to support the Office of Lead Hazard Control and Healthy Homes [OLHCHH] headquarters staff. OLHCHH administers and manages the lead-based paint and healthy homes activities of the Department, and is directly responsible for the administration of the Lead-Based Paint Hazard Reduction program. The office also develops lead-based paint regulations, guidelines, and policies applicable to HUD programs, designs lead-based paint and healthy homes training programs, administers lead-hazard control and healthy homes grant programs, and implements the lead and healthy homes research program.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $8,200,000 for this account, which is $600,000 more than the budget request and $1,153,000 less than the fiscal year 2017 enacted level.

WORKING CAPITAL FUND

(INCLUDING TRANSFER OF FUNDS)

PROGRAM DESCRIPTION

The Department of Housing and Urban Development's Working Capital Fund [WCF] was established by the Consolidated Appropriations Act, 2017. The purpose of the WCF is to promote economy, efficiency, and accountability. Amounts transferred to the Fund are for Federal shared services used by offices and agencies of the Department, and are derived from centralized Salaries and Expenses accounts starting in 2017.

COMMITTEE RECOMMENDATION

The Committee recommendation provides the Secretary with the authority to transfer amounts provided in this title for salaries and expenses, except those for the Office of Inspector General, to this account for the purpose of funding centralized activities. The Department is required to centralize and fund from this account any shared service agreements executed between HUD and another Federal agency. For fiscal year 2018, the Department is permitted to centralize and fund from this account: financial management, procurement, travel, relocation, human resources, printing, records management, space renovation, furniture, and supply services. The Committee does not expand the authority to include the proposed management data initiative. The Committee expects that, prior to exercising discretion to centrally fund an activity, the Secretary shall have established transparent and reliable unit cost accounting for the offices and agencies of the Department that use the activity and shall have adequately trained staff within each affected office and agency on resource planning and accounting processes associated with the centralization of funds to this account.

Prior to exercising its authority to transfer funds for activities beyond what is required for shared service agreements, the Committee expects HUD to establish a clear execution plan for centralizing the additional activities and to properly vet that plan with the House and Senate Committees on Appropriations prior to transferring such funds into the WCF. Financial management, procurement, travel, and relocation costs for services provided to the Office of the Inspector General are covered by the Office of the Chief Financial Officer.

HUD shall include in its annual operating plan a detailed outline of its plans for transferring budgetary resources to the WCF in fiscal year 2018.

The Committee directs the Department to submit to the House and Senate Committees on Appropriations within 90 days of enactment of this act a report on HUD's shared service agreement with the Administrative Resource Center [ARC] for financial management, procurement, and travel services. This report shall, at a minimum, define the scope of the agreement (including the defined roles of ARC and HUD), summarize the agreed upon solutions for addressing HUD's core accounting, financial management and reporting, procurement, and travel functions, and provide an update on all outcomes of the shared service agreement as of September 30, 2017. The report shall identify how the shared service agreement addresses weaknesses and deficiencies in program administration, systems and data management, and human capital that effect HUD's annual financial accounting and reporting. It shall also identify functionality HUD previously had related to financial management and reporting, procurement, and travel that has been lost as a result of the shift to a shared service model.

Public and Indian Housing

TENANT-BASED RENTAL ASSISTANCE

Appropriations, 2017.................................... $20,292,000,000

Budget estimate, 2018................................... 19,317,900,000

Committee recommendation................................ 21,365,120,000

PROGRAM DESCRIPTION

This account provides funding for the Section 8 tenant- based (voucher) program. Section 8 tenant-based housing assistance is one of the principle appropriations for Federal housing assistance, serving approximately 2.2 million families. The program also funds incremental vouchers for tenants who live in properties where the owner has decided to leave the Section 8 program. The program also provides for the replacement of units lost from the assisted housing inventory through its tenant protection vouchers. Under these programs, eligible low-income individuals and families pay 30 percent of their adjusted income for rent, and the Federal Government is responsible for the remainder of the rent, up to the fair market rent or some other payment standard. This account also provides funding for administrative fees for PHAs, mainstream vouchers, Housing and Urban Development Veterans Supportive Housing [HUD-VASH] programs, and other incremental vouchers for vulnerable populations.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $21,365,120,000 for fiscal year 2018, including $4,000,000,000 as an advance appropriation to be made available on October 1, 2018. This amount is $2,047,220,000 more than the budget request and $1,073,120,000 more than the fiscal year 2017 enacted level.

Contract Renewals.--The Committee recommends $19,370,000,000 for the renewal costs of Section 8 vouchers, which is $1,786,174,000 more than the budget request and $1,015,000,000 more than the fiscal year 2017 enacted level.

The Section 8 rental assistance program is a critical tool that enables more than 2 million low-income individuals and families to access safe, stable, and affordable housing in the private market. In recognition of the Section 8 program's central role in ensuring housing for vulnerable Americans, the Committee recommendation and existing reserves will provide sufficient resources to ensure that no current voucher holders are put at risk of losing their housing assistance. It also supports the first time renewal of incremental vouchers that were funded in prior years, including HUD-VASH vouchers. The Committee will continue to monitor leasing data to make sure residents are protected.

Regulatory Relief.--The Committee recognizes the growing demand placed on small-and medium-sized public housing agencies across the Nation. Given this recognition, the Committee believes that small agencies may face disproportionate regulatory burdens and the Department should simplify monitoring and compliance requirements. The Committee continues to urge HUD to eliminate excessive paperwork and administrative requirements and develop opportunities that achieve new efficiencies in management and operations for small- and medium-sized public housing agencies. The Committee directs HUD to report to the House and Senate Committees on Appropriations on recommendations for statutory and regulatory relief for small- to medium-sized PHAs within 120 days of enactment of this act. The Committee is also concerned that certain PHAs that do not meet the definition of small-and-medium sized also face similar regulatory challenges. Therefore, the Committee encourages HUD to examine the administrative requirements and identify possible efficiency adjustments that can be made for PHAs that only administer the Section 8 Housing Choice Voucher Program.

Set-Aside for Special Circumstances.--The Committee has provided a set-aside of $75,000,000 to allow the Secretary to adjust allocations to PHAs under certain circumstances. Qualifying factors include: (1) a significant increase, as determined by the Secretary, in renewal costs of tenant-based rental assistance resulting from unforeseen circumstances and voucher utilization or the impact from portability under section 8(r) of the act; (2) vouchers that were not in use during the previous 12-month period in order to be available to meet a commitment pursuant to section 8(o)(13) of the act; (3) adjustments or costs associated with HUD-VASH vouchers; and (4) possible termination of families as a result of insufficient funding. A PHA should not receive an adjustment to its allocation from the funding provided under this section if the Secretary determines that such PHA, through negligence or intentional actions, would exceed its authorized level of vouchers.

HUD-VASH.--Since 2008, the Committee has provided more than $500,000,000 in targeted funding to address veterans' homelessness. Communities across the country have been able to use these resources to make tremendous strides in addressing veterans' homelessness. Progress continues to be made in 2017 as communities including La Crosse, Wisconsin, and Akron, Ohio joined a growing list of cities and states that have ended veterans' homelessness. These successes, which are the result of hard work and effective collaboration, have been critical in reducing veterans' homeless by 47 percent since 2010. For this reason, the Committee again rejects the budget proposal to prematurely end funding for new VASH vouchers and includes $40,000,000 for this purpose.

The Committee also encourages the Department to use existing authority to recapture HUD-VASH voucher assistance from PHAs that voluntarily declare that they no longer have a need for that assistance, and reallocate it to PHAs with an identified need. The Committee directs HUD to expedite this process, ensuring that communities that have successfully ended veterans' homelessness enable other communities to assist this population. The Committee encourages the Department to prioritize, as part of this reallocation, PHAs that project- base a portion of their HUD-VASH vouchers.

Tribal-VASH.--The Committee recommendation includes $5,000,000 for rental assistance and associated administrative costs for Tribal HUD-VASH to serve Native American veterans that are homeless or at-risk of homelessness living on or near a reservation or other Indian areas. The Committee is aware that House and Senate authorizing committees are considering authorizing this demonstration program. As part of this consideration, the Committee encourages the respective committees of jurisdiction to consider the effectiveness of administering the program through the Office of Native American Programs, as currently demonstrated, rather than the Office of Housing Choice Vouchers, where traditional HUD-VASH vouchers are managed. The Department's administration and use of these funds have been in alignment with the administration of programs authorized under the Native American Housing and Self Determination Act [NAHASDA]. As a result, the Committee encourages the authorizing committees to consider authorizing this program, as appropriate, as part of NAHASDA rather than under the 1937 Housing Act.

Administrative Fees.--The Committee recommends $1,725,000,000 for administrative fees, which is $175,000,000 more than the budget request and $75,000,000 more than the fiscal year 2017 enacted level. The Committee is concerned that where there is a significant fluctuation in local rental market conditions, HUD's published fair market rents do not reflect the increased need in rental subsidy and the associated operating costs. As a result, some PHAs are conducting independent market surveys to more accurately reflect local market conditions, to submit to HUD for review and consideration. The Committee understands that such surveys are an eligible administrative expense under the Housing Choice Voucher program, and therefore directs HUD to issue clarifying guidance within 90 days of enactment of this act on how PHAs can use administrative fee funding for this purpose.

Tenant Protection Vouchers.--The Committee recommendation includes $75,000,000 for tenant protection vouchers. These vouchers are provided to public housing residents whose buildings have health or safety issues, or whose projects are being demolished. However, the largest share of these vouchers is provided to tenants living in properties with expiring HUD assistance that may face rent increases if their owners opt out of HUD programs. In these instances, the vouchers ensure continued affordability of tenants' housing.

Section 811 Mainstream Vouchers.--The Committee recommends $130,120,000 to continue the rental assistance and administrative costs of this program.

Family Unification Program [FUP].--Young adults associated with child welfare systems are more likely to experience homelessness as adults or as they transition to adulthood. The Committee recognizes that stable, affordable housing with appropriate services can help prevent children from being unnecessarily removed from their families and help youth exiting foster care transition to adulthood. Therefore, the Committee includes $20,000,000 for new FUP vouchers. The Committee directs HUD to prioritize the award of these new vouchers to PHAs that will target them to youth and PHAs that have partnered with their local public child welfare agency to ensure youth referrals for these vouchers. The Committee also includes language permitting the Secretary to recapture voucher assistance from PHAs that no longer have a need for that assistance, and reallocate to it to PHAs with an identified need.

HOUSING CERTIFICATE FUND

(INCLUDING RESCISSIONS)

PROGRAM DESCRIPTION

Until fiscal year 2005, the Housing Certificate Fund provided funding for both the project-based and tenant-based components of the Section 8 program. Project-based rental assistance and tenant-based rental assistance are now separately funded accounts. The Housing Certificate Fund retains balances from previous years' appropriations.

COMMITTEE RECOMMENDATION

The Committee has included language that will allow unobligated balances from specific accounts to be used to renew or amend project-based rental assistance contracts.

PUBLIC HOUSING CAPITAL FUND

Appropriations, 2017.................................... $1,941,500,000

Budget estimate, 2018................................... 628,000,000

Committee recommendation................................ 1,945,000,000

PROGRAM DESCRIPTION

This account provides funding for modernization and capital needs of PHAs (except Tribally Designated Housing Entities), including management improvements, resident relocation, and homeownership activities.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $1,945,000,000 for the Public Housing Capital Fund, which is $1,317,000,000 more than the budget request and $3,500,000 more than the fiscal year 2017 enacted level.

Of the amount made available under this account, $25,000,000 is for supportive services for residents of public housing under the Resident Opportunity and Self-Sufficiency [ROSS] program, and $15,000,000 is for the Jobs-Plus demonstration. The Committee also recommends up to $8,300,000 to support the ongoing financial and physical assessment activities performed by the Real Estate Assessment Center [REAC] and $1,000,000 for the cost of administrative and judicial receiverships.

ConnectHome.--The Committee does not include resources for the ConnectHome initiative, which provides a platform for collaboration among local governments, public housing agencies, Internet service providers, philanthropic foundations, nonprofit organizations and other relevant stakeholders to work together to produce local solutions for narrowing the digital divide in communities across the Nation served by HUD. However, the Committee encourages the Department to continue to partner with these entities to help identify ways residents living in public housing can connect to broadband infrastructure through technical assistance and digital literacy training. The Committee encourages HUD to work with its partners to take steps to expand the number of participating communities.

Safety and Security in Public Housing.--The Committee directs at least $5,000,000 of the $21,500,000 recommended for emergency capital needs for safety and security measures necessary to address crime and drug-related activity in public housing. The Committee has included this specific set-aside because there are PHAs facing safety and security issues that rely on these funds to protect their tenants. The Committee notes that the demand for these funds continues to grow while the amount that HUD is awarding to PHAs is decreasing. The Committee believes that the level of funding recommended will support both repairs from disasters and safety and security improvements. Therefore, the Committee directs the Department to fund eligible safety and security projects with a portion of these funds as quickly as possible. The Committee continues language clarifying that unused funds from the emergency set- aside shall be used to address safety and security needs of PHAs and the residents who live in these properties.

Quality Assurance of Physical Inspections.--The Committee remains concerned about the physical quality of some HUD- subsidized properties across the country, including incidences of unaddressed or untimely responses to health-related hazards in HUD-assisted housing. The scope of this issue has spanned geographic regions, but the Committee is encouraged that authorizing committees have taken steps to address systemic problems with HUD's oversight, and improved the Real Estate Assessment Center's [REAC] inspections of HUD-assisted housing. The Committee directs the Department to move expeditiously to implement the provisions contained in section 101 of title I of the Housing Opportunity Through Modernization Act of 2016, which unambiguously affirms congressional intent regarding inspections and tenant protections. The Committee also directs the Department to submit to the House and Senate Committees on Appropriations 30 days after enactment of this act, a report identifying how funds provided for the Real Estate Assessment Center, including any carryover balances, will be utilized during fiscal year 2018. The Committee further directs the Real Estate Assessment Center to work with the Office of Policy Development and Research to identify and implement a statistically significant sample photographic review of HUD- assisted properties that receive a passing inspection score during fiscal year 2018. The Department shall report its findings from this review to the House and Senate Committees on Appropriations no later than September 30, 2018.

The Committee encourages the Department to work with the House and Senate authorizing committees on enforcement actions, including civil monetary penalties, that HUD can take to ensure PHAs and landlords maintain the physical quality of HUD- assisted units.

The Committee continues to support efforts to quickly issue tenant-protection vouchers to ensure affected residents are expeditiously securing housing that meets HUD's decent, safe and sanitary standards. The Committee would like to reiterate that failure to maintain the physical condition of HUD-assisted properties results in a loss of critical affordable housing and tenant protection vouchers are of questionable value to families that encounter a lack of affordable housing in their communities. The Committee recognizes that residents displaced from public housing may find it difficult to find replacement housing within their existing community and may have to find replacement housing within the jurisdictions of other public housing authorities. One of the few options that may be available to residents in communities with limited rental housing stock is replacement housing that is owned by a family member, which is currently prohibited under 24 CFR Part 982. The Committee supports the intent of the rule, which is to reduce the potential for fraud and abuse under the Section 8 program, however there are limited circumstances where an exception to the regulatory prohibition may be warranted. Therefore, the Committee encourages the Department to waive the prohibition under 24 CFR Part 982 on a case-by-case basis in emergency circumstances where a resident has been displaced due to uninhabitable conditions, there are no other safe and affordable housing options within the public housing agency's jurisdiction, and moving outside of the PHA's jurisdiction would place an undue burden on the resident. Housing rented under such a waiver must continue to meet all other requirements for housing assistance payment contracts.

Public Housing Receiverships.--The Committee directs the Department to report quarterly during fiscal year 2018 to the House and Senate Committees on Appropriations on the status of public housing agencies under receivership, including factors that informed the receivership such as physical and financial scores, deficiencies with internal controls, and other information demonstrating why HUD believes PHAs are unable to effectively oversee their business operations. This report shall also include an identification of funding resources and technical assistance provided to the PHA for the purpose of bringing it out of receivership, and future steps HUD will take to address deficiencies in an effort to return the respective PHAs to local control.

Cash Management.--The Committee is aware that the Department continues to work on implementing improved cash management for public housing agencies. The Department is reminded that effective cash management policies will require coordinated efforts and transparency across offices.

Lead-Based Paint.--In fiscal year 2017 the Committee included $25,000,000 to help PHAs address lead-based paint hazards in public housing units, to ensure the physical condition of units meet the criteria set forth in HUD's amended blood lead level standards. This funding will be competitively awarded to PHAs for lead inspections, risk assessments, interim controls and abatements, and will provide greater protections for more than 1,000 children under the age of 6 living in public housing. As the Department develops the notice of funding availability for this competition, the Committee encourages the Office of Public Housing Investments [OPHI] to consult with the Office of Lead Hazard Control and Healthy Homes in the design of the initiative to ensure the competition meets the standards set-forth in HUD's lead-based paint regulations. Further, the Committee expects the Department to work with PHAs to ensure that the initiative reflects the unique needs of the industry. The Committee continues to strongly encourage HUD to work with PHAs, their maintenance staff, and tenants to help ensure potential lead-based paint risks are identified and addressed expeditiously.

PUBLIC HOUSING OPERATING FUND

Appropriations, 2017.................................... $4,400,000,000

Budget estimate, 2018................................... 3,900,000,000

Committee recommendation................................ 4,500,000,000

PROGRAM DESCRIPTION

This account provides funding for the payment of operating subsidies to approximately 3,100 PHAs (except tribally designated housing entities) with a total of approximately 1.2 million units under management in order to augment rent payments by residents in order to provide sufficient revenues to meet reasonable operating costs.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $4,500,000,000 for the public housing operating fund, which is $600,000,000 more than the budget request and $100,000,000 more than the fiscal year 2017 enacted level.

Regulatory Relief.--The Committee recognizes the growing demand placed on small-and medium-sized public housing agencies across the Nation. Given this recognition, the Committee believes that small agencies may face disproportionate regulatory burdens and the Department should simplify monitoring and compliance requirements. The Committee continues to urge HUD to eliminate excessive paperwork and administrative requirements and develop opportunities that achieve new efficiencies in management and operations for small public housing agencies. The Committee directs HUD to report to the House and Senate Committees on Appropriations on recommendations for statutory and regulatory relief for small- to medium-sized PHAs within 120 days of enactment of this act.

Operating Fund Adjustment Factors.--The Committee is concerned that the Department's current methodology for calculating formula income and utility expenses for PHAs does not accurately reflect the reality that many experience locally. This is especially true for those PHAs that serve a large elderly or disabled populations, or operate on a utility that is of higher cost than other parts of the country. The Committee appreciates that the Department takes seriously concerns raised by PHAs and is reviewing its data and evaluating alternative approaches. The Committee directs the Department to report to the House and Senate Committees on Appropriations 30 days after enactment of this act on alternative methodologies for calculating PHA formula income for purposes of Operating Fund eligibility.

CHOICE NEIGHBORHOODS INITIATIVE

Appropriations, 2017.................................... $137,500,000

Budget estimate, 2018...................................................

Committee recommendation................................ 50,000,000

PROGRAM DESCRIPTION

The Choice Neighborhoods initiative provides competitive grants to transform impoverished neighborhoods into functioning, sustainable, mixed-income neighborhoods with co- location of appropriate services, schools, public assets, transportation options, and access to jobs or job training. Choice Neighborhoods grants fund the preservation, rehabilitation, and transformation of public and HUD-assisted housing, as well as their neighborhoods. Grantees include PHAs, tribes, local governments, and nonprofit organizations. For- profit developers may also apply in partnership with another eligible grantee. Grant funds can be used for resident and community services, community development and affordable housing activities in surrounding communities. Grantees undertake comprehensive local planning with input from residents and the community.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $50,000,000 for the Choice Neighborhoods initiative. This amount is $87,500,000 less than the fiscal year 2017 enacted level and $50,000,000 more than the budget request. Of the total amount provided, not less than $25,000,000 shall be awarded to projects where PHAs are the lead applicant, and no more than $5,000,000 may be used for planning, including planning and action, grants.

Choice Neighborhoods builds on the HOPE VI program by expanding the pool of eligible grantees and allowing funding to be used for HUD-owned or -assisted housing, as well as the surrounding community. Inherent to the Choice Neighborhoods initiative is the understanding that community transformation requires more than replacing housing. The creation of vibrant, sustainable communities also requires greater access to transportation, jobs and services that will increase opportunities for community residents. However, HUD funding cannot support all of these activities without strong public- private partnerships. The Committee continues to be encouraged by the ability of Choice Neighborhood grantees to leverage significant resources with their grant awards, to expand opportunities for residents living in Choice Neighborhoods sites.

The Committee notes that successful community planning brings together multiple partners and funding sources that aid in community transformation. The Committee continues to direct the Secretary to give priority consideration to grantees that have been previously awarded planning grants when making implementation grant awards.

FAMILY SELF-SUFFICIENCY

Appropriations, 2017.................................... $75,000,000

Budget estimate, 2018................................... 75,000,000

Committee recommendation................................ 75,000,000

PROGRAM DESCRIPTION

The Family Self-Sufficiency [FSS] program provides funding to help Housing Choice Voucher, project-based Section 8, and Public Housing residents achieve self-sufficiency and economic independence. The FSS program is designed to provide service coordination through community partnerships that link residents with employment assistance, job training, child care, transportation, financial literacy, and other supportive services. The funding will be allocated through one competition to eligible PHAs to support service coordinators who will serve both public housing and vouchers residents.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $75,000,000 for the FSS program in fiscal year 2018, an amount equal to the fiscal year 2017 enacted level and the budget request.

The Committee strongly supports the FSS program, which helps provide public housing and Section 8 residents with the tools to improve their lives and achieve self-sufficiency. In fiscal year 2014, the Committee combined Section 8 voucher and public housing FSS programs so that public housing agencies could manage one unified program. Since fiscal year 2015, the Committee has included language expanding the program to serve residents living in project-based Section 8 housing. This authority allows property owners to create escrow accounts and fund service coordinators with residual receipts. As a result of this language, HUD is working with project-based Section 8 property owners on the implementation of FSS at select properties. As the program expands to additional project-based Section 8 properties, the Committee expects HUD to continue to hold webinars, trainings, and share best-practices for property owners currently operating and seeking to implement a new FSS program. Further, the Committee strongly encourages the Department to continue work with PHAs and property owners, including those converting existing FSS programs through the Rental Assistance Demonstration, to ensure they comply with reporting and other program requirements.

NATIVE AMERICAN HOUSING BLOCK GRANTS

Appropriations, 2017.................................... $654,000,000

Budget estimate, 2018................................... 600,000,000

Committee recommendation................................ 655,000,000

PROGRAM DESCRIPTION

This account funds the Indian Housing Block Grant Program, as authorized under title I of the Native American Housing Assistance and Self-Determination Act of 1996 [NAHASDA]. This program provides a funding allocation on a formula basis to Indian tribes and their tribally designated housing entities to help address the housing needs within their communities. Under this block grant, Indian tribes use performance measures and benchmarks that are consistent with the national goals of the program, but can base these measures on the needs and priorities established in their own Indian housing plan.

COMMITTEE RECOMMENDATION

The Committee recommends a total of $655,000,000 for the Indian Housing Block Grant [IHBG] and Title VI Loan Guarantee programs, of which $646,000,000 is for IHBG formula grants, $7,000,000 is for technical assistance, and $2,000,000 is for credit subsidy to support a Title VI guaranteed loan level not to exceed $17,391,304. The recommended level of funding is $1,000,000 more than the amount provided in fiscal year 2017 and $55,000,000 more than the budget request.

Recognizing the tremendous needs in Indian Country and the limited resources available to address these challenges, the Committee includes a provision limiting the amount of funding a Tribe may receive from the IHBG program to not more than 10 percent. The Committee directs HUD to collect data as part of tribes' Indian Housing Plan submissions on new program activity that is generated due to this provision.

IHBG is a vital resource for tribal governments to address the dire housing conditions in Indian Country, and access to affordable housing remains in a critical state for many tribes across the country. Native Americans living in tribal areas are nearly twice as likely to live in poverty compared to the rest of the Nation. As a result, the housing challenges on tribal lands are daunting. According to the American Housing Survey data for 2013, 16 percent of homes on American Indian reservations and off-reservation trust land are overcrowded, compared to 2 percent of households nationwide. In addition to being overcrowded, 34 percent of Native American housing units suffer from one or more physical problems compared with only 7 percent for U.S. households, on average.

The Committee believes the housing goals for American Indians, Alaska Natives, and Native Hawaiians remain a priority. The housing resources provided by this Committee serve communities who are disproportionately low income, more likely to experience homelessness or overcrowded living conditions and unable to utilize traditional lending sources for homeownership. IHBG has aided thousands of individuals and families in the pursuit of safe, affordable housing and the Committee encourages HUD to continue providing appropriate assistance and resources based on continued demonstrable need.

Coordinated Environmental Reviews for Tribal Housing and Related Infrastructure.--In fiscal year 2015, the Committee directed HUD to collaborate with the Council on Environmental Quality and affected Federal agencies, including the Departments of the Interior, Agriculture, Commerce, Energy, Health and Human Services, the Federal Highway Administration, and the Environmental Protection Agency, to develop a coordinated environmental review process to simplify tribal housing development and its related infrastructure needs. The Committee expects HUD to continue to update the Committee on the status and progress of these ongoing efforts.

Technical Assistance.--Limited capacity hinders the ability of many tribes to effectively address their housing needs. The Committee recommendation includes $7,000,000 for technical assistance needs in Indian country to support the IHBG program, as well as other HUD programs, in order to meet the needs of Native American families and Indian country. The Committee expects HUD to use the technical assistance funding provided to aid tribes with capacity challenges, especially tribes receiving small grant awards. The funding should be used for training, contract expertise, and other services necessary to improve data collection, increase leveraging, and address other needs identified by tribes. The Committee also expects that these technical assistance funds will be provided to both national and regional organizations with experience in providing technical assistance that reflects the unique needs and culture of Native Americans.

INDIAN HOUSING LOAN GUARANTEE FUND PROGRAM ACCOUNT

(TABLE OMITTED)

PROGRAM DESCRIPTION

This program provides access to private financing for Indian families, Indian tribes, and their tribally designated housing entities that otherwise could not acquire housing financing because of the unique status of Indian trust land. HUD continues to be the largest single source of financing for housing in tribal communities. This program makes it possible to promote sustainable reservation communities by providing access to financing for higher income Native Americans to achieve homeownership within their Native communities. As required by the Federal Credit Reform Act of 1990, this account includes the subsidy costs associated with the loan guarantees authorized under this program.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $1,000,000 in program subsidies to support a loan level of $270,270,270. This subsidy amount is $6,227,000 less than the fiscal year 2017 enacted subsidy level and $1,000,000 more than the budget request.

NATIVE HAWAIIAN HOUSING BLOCK GRANT

Appropriations, 2017.................................... $2,000,000

Budget estimate, 2018...................................................

Committee recommendation................................ 1,000,000

PROGRAM DESCRIPTION

The Hawaiian Homelands Homeownership Act of 2000 created the Native Hawaiian Housing Block Grant program to provide grants to the State of Hawaii Department of Hawaiian Home Lands [DHHL] for housing and housing-related assistance, in order to develop, maintain, and operate affordable housing for eligible low-income Native Hawaiian families. As one of the United States' indigenous people, Native Hawaiian people have a unique relationship with the Federal Government.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $1,000,000 for the Native Hawaiian Housing Block Grant Program, which is $1,000,000 less than the fiscal year 2017 enacted level and $1,000,000 more than the budget request.

The Native Hawaiian Housing Block Grant Program [NHHBG] provides funding for affordable housing activities on Hawaiian home lands to eligible Native Hawaiian families. This program is necessary given the general living conditions and poverty rates for Native Hawaiians. According to the 2011-2013 American Community Survey, approximately 19 percent of Native Hawaiian households were overcrowded compared to 3.3 percent of all households in the United States, and about 18.4 percent of Native Hawaiians in Hawaii live in poverty. According to HUD's 2017 Housing Needs of Native Hawaiians report, Native Hawaiians are overrepresented in Hawaii's homeless population.

Hawaiian home lands are dispersed throughout the Hawaiian Islands and are often in less desirable areas with steep terrain that is difficult to access and develop. The challenges involved with development of this raw land add to the already high cost of construction in the State. Project development is a lengthy process that involves complex environmental reviews with strict water resource requirements, procurement of construction contracts, and installation of entire public works systems. Development in several Hawaiian home land areas has been halted after the discovery of unexploded ordinance and DHHL is working with the U.S. Army Corps of Engineers to identify and remediate trust lands affected. These challenges have impeded the DHHL's ability to advance the traditional model of single housing family community developments. The Committee remains concerned that this traditional housing model does not address the severe housing needs of the 34,100 low- income Native Hawaiian households that are eligible for assistance under the NHHBG program. The Committee directs HUD to ensure that the funds provided are administered to maximize the provision of affordable housing through the construction of high density, multi-family affordable housing and rental units, as well as housing counseling services and the rehabilitation of housing on Native Hawaiian home lands that do not meet safe and sanitary housing building standards.

COMMUNITY PLANNING AND DEVELOPMENT

HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS

Appropriations, 2017.................................... $356,000,000

Budget estimate, 2018................................... 330,000,000

Committee recommendation................................ 330,000,000

PROGRAM DESCRIPTION

The Housing Opportunities for Persons With AIDS [HOPWA] program provides States and localities with resources and incentives to devise long-term, comprehensive strategies for meeting the housing and supportive service needs of persons living with HIV/AIDS and their families.

By statute, 90 percent of formula-appropriated funds are distributed to qualifying States and metropolitan areas on the basis of the number of living HIV and living AIDS cases, as well as poverty and local housing cost factors. The remaining 10 percent of funds are awarded through a national competition, with priority given to the renewal of funding for expiring agreements consistent with appropriations act requirements.

COMMITTEE RECOMMENDATION

The Committee recommends an appropriation of $330,000,000 for the Housing Opportunities for Persons With AIDS [HOPWA] program. This level of funding is equal to the President's budget request and $26,000,000 less than the fiscal year 2017 enacted level. The Committee continues to include language requiring HUD to allocate these funds in a manner that preserves existing HOPWA programs, to the extent that those programs are determined to be meeting the needs of persons with HIV/AIDS.

COMMUNITY DEVELOPMENT FUND

Appropriations, 2017.................................... $3,060,000,000

Budget estimate, 2018...................................................

Committee recommendation................................ 3,060,000,000

PROGRAM DESCRIPTION

Under title I of the Housing and Community Development Act of 1974, as amended, the Department is authorized to award block grants to units of general local government and States for the funding of local community development programs. A wide range of physical, economic, and social development activities are eligible with spending priorities determined at the local level, but the law enumerates general objectives which the block grants are designed to fulfill, including adequate housing, a suitable living environment, and expanded economic opportunities, principally for persons of low and moderate income. Grant recipients are required to use at least 70 percent of their block grant funds for activities that benefit low- and moderate-income persons.

Funds are distributed to eligible recipients for community development purposes utilizing the higher of two objective formulas, one of which gives somewhat greater weight to the age of housing stock. Of the funds appropriated, 70 percent are distributed to entitlement communities and 30 percent are distributed to nonentitlement communities after deducting designated amounts for insular areas.

COMMITTEE RECOMMENDATION

The Committee has provided $3,000,000,000 for Community Development Block Grants [CDBG]. The recommended amount is $3,000,000,000 above the budget request and equal to the fiscal year 2017 enacted level. CDBG funding provides States and entitlement communities with resources that allow them to undertake a wide range of community development activities, including public infrastructure improvements, housing rehabilitation and construction, job creation and retention, and public services that primarily benefit low and moderate income persons. The CDBG program supports homeownership, housing rehabilitation, public improvements and economic development projects while encouraging additional local investment. From fiscal year 2005-2016, CDBG has assisted more than 1.3 million households rehabilitate their homes, provided down payment and closing cost assistance to qualified home buyers, and assisted homeowners with lead-based paint abatement. In addition, since 2005, the program has assisted in the creation and retention of more than 387,109 economic development-related jobs in low-income and moderate-income communities and provided public services benefitting over 133 million people. For every $1.00 of CDBG Federal investment leverages another $3.65 in non-CDBG funding. Urban and rural communities rely on this funding to serve their most vulnerable residents, and where residents experience economic hardship. This program is vital to our nation's downtown and neighborhood revitalization efforts, and the Committee believes that every effort must be made to protect this essential funding mechanism.

The flexibility associated with CDBG enables State and local governments to tailor solutions to effectively meet the unique needs of their communities. The Committee notes the importance of States and local grantees meeting the program's three national objectives, as they utilize the program's resources to address a wide range of community needs. As HUD works with communities to determine eligible activities that meet the national objective of benefiting low- and moderate- income persons, the Committee encourages the Department to extend flexibility for rural communities under 1,000 residents to use alternate sources of data to establish Low-Moderate Income Survey Data [LMISD] when American Community Survey [ACS] data is considered by the Community Development Block Grant applicant to be unreliable.

The Committee recommends $60,000,000 for grants to Indian Tribes for essential economic and community development activities, which is $60,000,000 above the budget request and equal to the fiscal year 2017 enacted level.

To ensure the program remains flexible, but also accountable and transparent, the Committee recommendation continues provisions in bill language that prohibit any community from selling its CDBG award to another community and that any funding provided to a for-profit entity for an economic development project funded under this act undergo appropriate underwriting. The Committee has included these provisions to address concerns raised about how program dollars have been used and mitigate risks associated with it.

Procurement Standards for Disaster Grantees.--Community Development Block Grant Disaster Recovery provides essential funding to States and localities recovering from natural disasters. In prior appropriations, Congress has directed HUD to provide thorough oversight of the auditing and procurement procedures implemented by grantees. In the Disaster Relief Appropriations Act of 2013 (Public Law 113-2), and in subsequent disaster recovery appropriations in fiscal years 2015 and 2016, Congress specifically required HUD to certify that the procurement processes employed by each grantee meet a standard of proficiency. On March 5, 2013, HUD published Notice FR-5696-N-01 clarifying that a proficient standard is one that is equivalent to and in alignment with Federal procurement standards. The Committee believes that as long as HUD provides consistent and rigorous oversight of the procurement processes employed by State and local recipients, an equivalent, though not identical procurement standard that upholds the principles of fair and open competition can prevent Federal dollars appropriated for disaster recovery from being spent irresponsibly. The Committee agrees that this approach provides maximum feasible deference to grantees, particularly States, which is consistent with the CDBG program design.

Continues with Part 7 of 8

Myron Struck, editor, Targeted News Service, Springfield, Va., 703/304-1897; [email protected]; http://www.targetednews.com