# Appropriations for FY2004: VA, HUD, and Independent Agencies > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3ARL31804 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** March 9, 2004 - **Citation:** RL31804 ## Text Order Code RL31804 CRS Report for Congress Received through the CRS Web Appropriations for FY2004: VA, HUD, and Independent Agencies Updated March 9, 2004 E. Richard Bourdon and name redacted, Coordinators Domestic Social Policy Division Congressional Research Service ˜ The Library of Congress The annual consideration of appropriations bills (regular, continuing, and supplemental) by Congress is part of a complex set of budget processes that also encompasses the consideration of budget resolutions, revenue and debt-limit legislation, other spending measures, and reconciliation bills. In addition, the operation of programs and the spending of appropriated funds are subject to constraints established in authorizing statutes. Congressional action on the budget for a fiscal year usually begins following the submission of the President's budget at the beginning of the session. Congressional practices governing the consideration of appropriations and other budgetary measures are rooted in the Constitution, the standing rules of the House and Senate, and statutes, such as the Congressional Budget and Impoundment Control Act of 1974. This report is a guide to one of the 13 regular appropriations bills that Congress considers each year. It is designed to supplement the information provided by the House and Senate Appropriations Subcommittees on VA, HUD, and Independent Agencies. It summarizes the status of the bill, its scope, major issues, funding levels, and related congressional activity, and is updated as events warrant. The report lists the key CRS staff relevant to the issues covered and related CRS products. NOTE: A Web version of this document with active links is available to congressional staff at [http://www.crs.gov/products/appropriations/apppage.shtml]. Appropriations for FY2004: VA, HUD, and Independent Agencies Summary On January 23, 2004, the Consolidated Appropriations Act, 2004 (P.L. 108-199) which combines several appropriations bills into one was signed by the President. Division G of this omnibus bill provides appropriations for the Departments of Veterans Affairs (VA) and Housing and Urban Development (HUD), and several independent agencies, including the Environmental Protection Agency (EPA), the National Aeronautics and Space Administration (NASA), and the National Science Foundation (NSF). This division of the bill, popularly referred to as “VA-HUD,” provides $128.2 billion in appropriations, comprised of $32.7 billion in mandatory spending (mostly for VA cash entitlements), $91.3 billion in discretionary funds, and $4.2 billion of advanced appropriations for FY2005. The Administration had requested a total of $126 billion for programs funded through the VA-HUD bill, including $89.4 billion in new, discretionary funds. The House had recommended $126.9 billion; the Senate had approved $128.2 billion. P.L. 108-199 restructures the accounting for VA medical care costs, and adds $1.3 billion to the Administration’s request for medical services, bringing the total for FY2004 to $27 billion, a $2.6 billion increase over the level provided for FY2003. Mandatory spending for VA entitlements is projected to increase $1.1 billion. The bill signed by the President approves a net appropriation of $31.4 billion in spending available for HUD for FY2004, an increase of $408 million over FY2003 funding. The Section 8 Housing Certificate Fund will receive $19.4 billion, paid in part by $2.8 billion in rescissions from previous years. The Administration had requested $16.7 billion, offset by rescission of $300 million. Under the Administration’s proposed budget, the Section 8 program would have been split into two components. The largest part, a new Housing Assistance for Needy Families (HANF) program initiative (H.R. 1841/S. 947) would have converted the existing Section 8 Housing Choice Voucher program into a block grant to the states; the Section 8 project-based rental assistance program would remain largely unchanged. The omnibus bill provides $8.4 billion for EPA for FY2004, compared to the request for $7.6 billion. It approves NASA funding of $15.5 billion for FY2004, the amount requested and about $200 million more than provided for FY2003. NSF will receive $5.6 billion in FY2004, about $100 million more than requested and about $300 million more than provided for FY2003. The Administration had requested $598 million for FY2004 for the Corporation for National and Community Service, the parent agency administering AmeriCorps. The House recommended $480 million; the Senate $484 million. Conferees provided $584 million. In previous years, the House bill has recommended that the Corporation not be funded, with the Senate restoring funds in its bill, and conferees approving amounts nearer to the Senate recommendation. FY2004 amounts in this report do not include effects of the .59% across-the-board reduction in most discretionary accounts called for in P.L. 108-199. This is the final update of this report. Key Policy Staff Name Area of Expertise CRS Division Richard Bourdon Housing DSP (name redacted) Community Development G&F Bruce Foote Housing DSP Paul Graney David Bearden (name redacted) Christine Matthews Veterans Benefits Administration Environmental Policy National and Community Service National Science Foundation Margaret M. McCarty Housing Bruce Mulock Sidath Panangala (name redacted) Marcia Smith Consumer Affairs Veterans Health Administration Banking National Aeronautics and Space Admin. DSP RSI DSP RSI DSP G&F DSP G&F RSI Telephone and E-Mail 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov 7-.... [redacted]@crs.loc.gov Division abbreviations: DSP=Domestic Social Policy; G&F=Government and Finance; RSI=Resources, Science and Industry. Contents Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Total Appropriations Enacted for FY2003 and Requested for FY2004 for VA, HUD, and Independent Agencies . . . . . . . . . . . . . . . . . 2 Resolutions Continue Spending at FY2003 Levels . . . . . . . . . . . . . . . . . . . . 2 Title I: Department of Veterans Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Spending for VA Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 VA Cash Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Medical Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Medical Care Cost Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Medical Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Medical Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Medical Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Housing Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 VA Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Burial and Cemetery Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Department Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Title II: Department of Housing and Urban Development . . . . . . . . . . . . . . . . . 10 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Highlights of the Administration’s Proposed HUD Budget . . . . . . . . . . . . 10 Congressional Response to Proposed Budget (H.R. 2673) . . . . . . . . . . . . . 11 The Major Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 FY2003 Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Public and Indian Housing Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Project-based and Tenant-based Rental Assistance . . . . . . . . . . . . . . . 15 Public Housing Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Public Housing Operating Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Public Housing Capital Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 HOPE VI Revitalization of Distressed Public Housing . . . . . . . . . . . . 30 Native American Block Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Community Planning and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Housing for Persons with AIDS (HOPWA) . . . . . . . . . . . . . . . . . . . . 31 Rural Housing and Economic Development . . . . . . . . . . . . . . . . . . . . 32 Empowerment Zones and Enterprise Communities . . . . . . . . . . . . . . 32 Community Development Block Grants . . . . . . . . . . . . . . . . . . . . . . . 33 Brownfields Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 The HOME Investment Partnership Program . . . . . . . . . . . . . . . . . . . 38 Homeless Assistance Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Housing Programs and Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Housing for Special Populations (Elderly and Disabled) . . . . . . . . . . 41 Federal Housing Administration (FHA) . . . . . . . . . . . . . . . . . . . . . . . 43 Office of Federal Housing Enterprise Oversight (OFHEO) . . . . . . . . . 46 Fair Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Lead-Based Paint Hazard Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Title III: Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Environmental Protection Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 State and Tribal Assistance Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Superfund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 National Aeronautics and Space Administration . . . . . . . . . . . . . . . . . . . . . 52 Changes to the FY2004 NASA Budget Structure . . . . . . . . . . . . . . . . 52 Science, Aeronautics, and Exploration . . . . . . . . . . . . . . . . . . . . . . . . 53 Space Flight Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 National Science Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Research and Related Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Major Research Equipment; Facilities Construction . . . . . . . . . . . . . . 60 Education and Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Other Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Agency for Toxic Substances and Disease Registry . . . . . . . . . . . . . . 62 American Battle Monuments Commission . . . . . . . . . . . . . . . . . . . . . 62 Cemeterial Expenses, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Chemical Safety and Hazard Investigation Board . . . . . . . . . . . . . . . . 62 Community Development Financial Institutions Fund . . . . . . . . . . . . 62 Consumer Product Safety Commission (CPSC) . . . . . . . . . . . . . . . . . 63 Corporation for National and Community Service (CNCS) . . . . . . . . 63 Council on Environmental Quality; Office of Environmental Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 U.S. Court of Appeals for Veterans Claims . . . . . . . . . . . . . . . . . . . . . 64 Federal Citizen Information Center (FCIC) . . . . . . . . . . . . . . . . . . . . . 64 Federal Deposit Insurance Corporation . . . . . . . . . . . . . . . . . . . . . . . . 64 Interagency Council on the Homeless . . . . . . . . . . . . . . . . . . . . . . . . . 64 National Credit Union Administration (NCUA) . . . . . . . . . . . . . . . . . 64 National Institute of Environmental Health Sciences . . . . . . . . . . . . . 66 Neighborhood Reinvestment Corporation (NRC) . . . . . . . . . . . . . . . . 66 Office of Science and Technology Policy . . . . . . . . . . . . . . . . . . . . . . 66 Selective Service System (SSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Selected World Wide Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 List of Tables Table 1. Status of VA, HUD and Independent Agencies Appropriations, FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Table 2. Summary of VA, HUD, and Independent Agencies Appropriations, FY2003-FY2004 . . . . . . . . . . . . . . . 2 Table 3. Department of Veterans Affairs Appropriations, FY2000-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Table 4. Appropriations: Department of Veterans Affairs, FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Table 5. Department of Housing and Urban Development Appropriations, FY2000 to FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Table 6. Appropriations: Housing and Urban Development, FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Table 7. Comparison of Existing Housing Voucher Program and HANF Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Table 8. FY2003 and FY2004 Appropriation Levels for Vouchers and Project-based Rental Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Table 9. Community Development Fund Appropriations, CDBG and Related Set Asides: FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . 35 Table 10. Environmental Protection Agency Appropriations, FY2000-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Table 11. Appropriations: Environmental Protection Agency, FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Table 12. National Aeronautics and Space Administration Appropriations, FY2000-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Table 13. Appropriations: National Aeronautics and Space Administration, FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Table 14. National Science Foundation Appropriations, FY2000 to FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Table 15. Appropriations: National Science Foundation, FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Table 16. Appropriations: Other Independent Agencies, FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Appropriations for FY2004: VA, HUD, and Independent Agencies Most Recent Developments Consolidated Appropriations Act, 2004 becomes law. On January 23, 2004, the President signed H.R. 2673 (P.L. 108-199). The bill provides for $128.2 billion in FY2004 appropriations for VA, HUD, and Independent Agencies, including $32.7 billion in mandatory spending, $91.3 billion in discretionary funds, and $4.2 billion of advanced appropriations for FY2005. The Senate approved the conference report on the bill on January 22, 2004, and the House, on December 8, 2003. Conferees Reach Agreement. On November 25, 2003, conferees on several bills combined their efforts (H.Rept. 108-401) and approved the consolidated appropriations bill, H.R. 2673. Senate Approves its Version of H.R. 2861. On November 18, the Senate approved H.R. 2861, as amended by the text of S. 1584, the VA-HUD appropriations bill reported (S.Rept. 108-143) in the Senate, September 4, 2004. The Senate version called for $124 billion in total funds. House Completes Action on FY2004 VA, HUD, Independent Agencies Appropriations Bill (H.R. 2861; H.Rept. 108-235). On July 25, 2003 the House passed H.R. 2861 (H.Rept. 108-235) appropriations for FY2004, calling for $122.7 billion in total funds. FY2003 Consolidated Appropriations Act signed by President on February 20, 2003 (H.J.Res. 2; P.L. 108-7). Administration submits FY2004 Budget on February 3, 2003. Status Table 1. Status of VA, HUD and Independent Agencies Appropriations, FY2004 Subcommittee Comm. Comm. markup markup markup H.Rept. Passed S.Rept. House Senate 108-235 House 108-143 Conference Conference Signed Report Reported P.L. Passed H.Rept. 108Senate 108-401 House Senate 199 07/15 11/18 — 07/21 07/25 09/04 11/25 12/08 01/22 01/23 CRS-2 Total Appropriations Enacted for FY2003 and Requested for FY2004 for VA, HUD, and Independent Agencies Table 2. Summary of VA, HUD, and Independent Agencies Appropriations, FY2003-FY2004 (budget authority in billions) Department or Agency FY2003 FY2004 FY2004 FY2004 FY2004 enacted request House Senate Confer. Department of Veterans Affairs 58.100 60.719 60.721 62.024 62.019 Department of Housing and Urban Development 35.204 35.929 36.031 36.086 35.612 Environmental Protection Agency 8.079 7.631 8.005 8.183 8.411 National Aeronautics and Space Administration 15.339 15.469 15.540 15.339 15.469 National Science Foundation 5.310 5.481 5.634 5.586 5.611 Other Independent Agencies .920 1.116 1.011 1.026 1.120 Advance appropriations (HUD) 4.200 4.200 4.200 4.200 4.200 Grand total, this cycle 127.204 130.545 131.144 132.444 132.444 Total (this bill, w/o adv. approp.) 123.004 126.345 126.943 128.244 128.244 adjustments; advance approp. -4.204 -4.203 Total: VA, HUD, and Independent Agencies (net) 123.004 126.345 126.943 128.244 128.244 mandatory 31.577 32.707 32.707 32.707 32.707 discretionary 87.223 89.435 90.033 91.334 91.334 -4.203 -4.203 -4.203 Source: H.Rept. 108-401. Note: Totals will not add due to rounding at agency level. Totals are net, after incorporating supplementals, rescissions and other reductions, and advance appropriations. FY2004 amounts do not include effects of the .59% across-the-board reduction in most discretionary accounts, as called for in P.L. 108-199. Resolutions Continue Spending at FY2003 Levels Because work on FY2004 appropriations for VA, HUD, and Independent Agencies was not completed at the beginning of the fiscal year, October 1, 2003, Congress passed, and the President signed a series of continuing resolutions. The last of these resolutions, P.L. 108-135, provided authority for those departments and agencies to spend at a rate not to exceed the rate available to them during FY2003. The authority of P.L. 108-135 expired January 31, 2004. CRS-3 Title I: Department of Veterans Affairs Spending for VA Programs FY2004. In passing H.R. 2861, the House approved the $60.7 billion the Administration requested for the Department of Veterans Affairs (VA) for FY2004, including $32.7 billion for VA cash benefits, and $28 billion for discretionary funding. The House bill restructured the funding for the Veterans Health Administration (VHA) into four accounts for medical care, medical research, medical administration, and prosthetic research, providing a total of $25.7 billion for those functions, an amount equal to the Administration request. The final bill follows the House account structure while providing most of the Senate amount at $27 billion. In addition, H.Rept. 108-235 took issue with VA for submitting the FY2004 budget request using an appropriations structure that the Department had not had approved by the House Committee on Appropriations. The report contains language instructing VA to comply with existing justification requirements in “the traditional appropriations account structure” rather than submit a new structure to replace the structure preferred by the Committee. The report goes on to direct the Department to “refrain from incorporating ‘performance-based’ budget documents in the 2005 budget justifications....” FY2003. The President requested $56.94 billion for the Department of Veterans Affairs for FY2003, according to congressional estimates contained in the conference report (H.Rept 108-10) to H.J.Res 2, the consolidated appropriations bill for FY2003 (P.L. 108-7). P.L. 108-7 provided $58.1 billion for VA programs for the fiscal year ending September 30, 2003, including $31.58 billion in mandatory spending for VA entitlements, and $26.5 billion for discretionary programs, $23.5 billion of which is for medical care for veterans. Table 3. Department of Veterans Affairs Appropriations, FY2000-FY2004 (budget authority in billions) FY2000 FY2001 FY2002 FY2003 FY2004 $46.04 $47.95 $52.38 $58.10 $62.02 Source: Figures for FY2000-FY2002 are from administration budget submissions of subsequent years; FY2003 and FY2004 are from H.Rept. 108-401. Actual final spending levels for any fiscal year include all supplemental appropriations or rescissions. Final totals remain uncertain until all program experience has been recorded, a process that may not be completed for several months after the end of the fiscal year. VA Cash Benefits. Spending for the VA cash benefit programs is mandatory, and the amounts requested in the budget are based on projected caseloads. Eligibility requirements and benefit levels are specified in law. While the number of veterans is declining, VA entitlement spending, mostly service-connected compensation, pensions, and readjustment (primarily education) payments, reached $23.4 billion in FY2000, $25.7 billion in FY2001, $28.4 billion in FY2002, $31.6 billion in FY2003, CRS-4 and is projected to reach $32.7 billion in FY2004. Much of the projected increases in FY2001-FY2004 result from cost-of-living adjustments for compensation benefits, and from liberalizations to the Montgomery GI Bill, the primary education program. Compensation and Pensions. The compensation program pays benefits to living veterans who have suffered a loss or reduction in earning capacity as a result of a condition traceable to a period of military service, and to the dependent survivors of certain veterans. The VA pension program is a means-tested benefit for permanently disabled (from a condition unrelated to their military service) veterans of war-time service, whose incomes and assets fall below certain levels. After taking into consideration the financial circumstances and dependents of eligible veterans, the pension payments, along with countable income, are intended to bring their total incomes to the basic targeted amounts.1 Given the broad availability of other sources of income, including Social Security, program caseload is diminishing, as fewer veterans have incomes below the categorical levels. During FY2004, VA estimates that about 2.8 million veterans will draw an average of $783 in monthly compensation for service-connected disabilities. Pension payments for about 554,000 totally disabled, veterans (and their eligible survivors) of wartime service, whose income and assets fall below certain levels, will average about $508 monthly. Readjustment. Following a tradition going back to the beginnings of the Republic, near the end of World War II Congress enacted a series of programs to assist veterans in their readjustment to civilian life, and to help the national economy adapt to the influx of demobilizing armed forces. The GI Bill has entered the national lexicon as an example of federal responsibility for this readjustment responsibility, and many citizens continue to refer to the current array of programs by that historical name. Indeed, the largest current program providing readjustment education benefits is named the Montgomery GI Bill program, for its congressional sponsor and the heritage it brought into the age of an all-volunteer military service. Without conscription to fill the ranks of active duty armed services, the inducements to potential recruits must be sufficient to attract them to enlist. The Montgomery GI Bill provides recruits with the promise of educational assistance when they separate, and the amounts that eligible participants receive has climbed significantly over the last few years. The previous payment of $800 per month for 36 months for a participant completing a three-year enlistment rose to $900 per month on October 1, 2002, and to $985 per month on October 1, 2003. During FY2003, about $2.3 billion in total payments for education payments went to 326,000 active duty personnel and veterans, 82,000 reservists, and 52,000 dependents. About 160,000 veterans received other forms of tuition assistance, 65,000 received vocational assistance, and 81,000 received assistance with preparing for and taking licensing and certification tests. 1 For 2004 the annual basic level for an eligible single veteran is $9,894; with one dependent, $12,959; and each additional dependent, $1,688. Additional amounts are available for eligible veterans who are housebound, or in need of aid and attendance. CRS-5 Medical Care. VA operates the nation’s largest integrated health care system, with 158 hospitals, 133 nursing homes, 42 residential rehabilitation treatment programs, 867 outpatient clinics, 73 home health-care programs, and 206 readjustment counseling centers. During FY 2002, VA provided care to 4.7 million unique patients, with 745,000 inpatient episodes and over 47 million outpatient visits. VHA estimated that by the end of FY2003 it would experience an annual growth rate of 6.2% as the number of unique patients treated reached approximately 5 million. Outpatient visits are rapidly increasing. The total number of such visits reached 47 million during FY2001, and was projected to increase by 2.3 million to 49.2 million. Veterans who are provided outpatient care average around 12 visits per year. According to VA data, the daily inpatient caseload for FY2003 was estimated to be 57,116, and is expected to decline to 56,842 patients by the end of FY2004. There is a projected caseload decline in all service units except for two categories, acute care and rehabilitative care. Acute care patients have increased because of the larger number of veterans who are seeking VA medical services, and while the total number of acute care cases is expected to increase by almost 15,000 over the last year, the average daily census for acute care should decline slightly as a result of a shorter average length of stay. The aging of the veteran population, and the congressional commitment to increase the capacity of VA to serve this population, means that the number of patients receiving rehabilitative care will increase during FY2004, but the average daily nursing home census is expected to decrease. The FY2004 Budget for VA Medical Care. The Administration’s budget request for direct medical care for FY2004 was $25.2 billion. This was a $1.3 billion increase over the FY2003 appropriation for direct medical care.2 The House-passed bill [H.R. 2861] would have provided $25.7 billion for the Veterans Health Administration for FY2004. This includes funding for medical care, facility maintenance, research, and administration of medical programs. The Senate Appropriations Committee [S. 1584] approved $27.2 billion for VHA for FY2004, of this amount $26.8 billion would have been for direct medical care. This is a $3 billion increase over FY2003, and an increase of $1.6 over the President’s budget request. The Consolidated Appropriations Act, 2004 [H.R. 2673] provides approximately $28.6 billion for VHA. The conference report [H.Rept. 108-401] includes language restructuring the medical program accounts, from the current structure of one account for most medical programs, one account for research, and one account for medical administration, to a new account structure comprised of four accounts. The new accounts that would be funded are: medical services, medical administration, medical facilities, and medical and prosthetic research. According 2 The Administration’s budget request for FY2004 proposed a new account structure that combined numerous accounts with the direct medical care account into one medical care business line. However, neither the House nor Senate Appropriations Committees recommended the new medical care business line. CRS-6 to the Conference Committee such an account structure would provide for “better oversight and receive a more accurate accounting of funds.” Medical Care Cost Collections. In addition to the funds provided by Congress, VA medical care is also authorized to “recycle” budget authority from amounts VA facilities collect from various sources with an obligation to help defray the cost of VA care for certain patients. The Balanced Budget Act of 1997 (P.L. 10533) gave VA authority to retain net receipts of the Medical Care Collections Fund (MCCF), allowing the funds to be spent for medical services to veterans rather than be transferred to the Treasury as under previous law. Collection receipts added $691 million in recycled spending authority in FY2002 and are projected to add $1.386 billion in FY2003 and $1.8 billion in FY2004. H.Rept. 108-235 shows $1.5 billion in receipts as available to a separate account providing medical services to Priority 7-8 veterans. The Consolidated Appropriation Act of 2004 shows that approximately $1.6 billion would be available for medical services from MCCF. Medical Administration. Under the new account structure the Consolidated Appropriations Act provides $5 billion for medical administration. This includes funding for VHA as well as administrative expenses of the Veterans Integrated Service Networks (VISNs). The conference report [H.Rept 108-401] language directs that approximately $5 million of medical administration funds should be set aside for creation of a research oversight board to implement research protocols related specifically to patient protections. Medical Facilities. The omnibus bill also provides $4 billion for the operations, maintenance, and security of VA’s medical facilities. This includes funding for utilities, food services, and facility repair, among other things. The following table shows appropriations to VA for FY2003, the Administration’s request for FY2004, the amounts recommended by each House, and the amounts ultimately enacted by Congress and signed by the President. CRS-7 Table 4. Appropriations: Department of Veterans Affairs, FY2003-FY2004 (budget authority in billions) FY2003 enacted FY2004 request FY2004 House FY2004 Senate FY2004 Confer. Compens., pension, burial 28.949 29.845 29.845 29.845 29.845 Readjustment benefits 2.265 2.530 2.530 2.530 2.530 Insurance/indemnities .028 .029 .029 .029 .029 Housing prog.(net, indef.) .340 .306 .306 .306 .306 31.581 32.710 32.710 32.710 32.710 Med. services — — 16.443 — 17.867 Med. administration — — 4.854 — 5.000 Medical facilities — — 4.000 — 4.000 Med., prosthetic research .397 .408 .408 .413 .408 23.889 25.218 — 25.688 — — — — — — — 1.100 -.270 — -.270 .074 .079 — .079 — -1.386 1.386 -1.800 1.800 — — -1.564 1.564 -1.564 1.564 Subtotal: Med. programs & admin. (appropriations) 24.361 25.705 25.705 27.010 27.005 (total available, including cost collection receipts)a (25.747) (27.505) (25.705) (28.574) (28.569) Gen. admin. exp. (total) 1.346 1.283 1.283 1.283 1.283 Nat’l Cemetery Admin. .132 .144 .144 .144 .144 Housing program admin. .168 .156 .156 .156 .156 Inspector General .058 .062 .062 .062 .062 Construction .324 .525 .527 .525 .525 Grants; state facilities .099 .102 .102 .102 .102 State veteran cemeteries .032 .032 .032 .032 .032 Subtotal: Discretionary 26.520 28.009 28.011 29.314 29.309 Subtotal: (VA) 58.100 60.719 60.721 62.024 62.019 Program Subtotal: Mandatory Medical care delayed obligations rescission Med. admin. & misc. (old) Med. care cost collect. a (offsetting receipts) (approps. indefinite) Source: H.Rept. 108-401 Note: Totals may not add due to rounding. FY2004 amounts do not include effects of the .59% across-the-board reduction in most discretionary accounts, as called for in P.L. 108-199. a Medical Care Collections Fund (MCCF) receipts are restored to the Veterans Health Administration (VHA) as an indefinite budget authority equal to the revenue collected, estimated to be $1.386 billion in FY2003. The amount initially projected for FY2004 was $1.8 billion; the conferees used a later estimate of $1.564 billion. CRS-8 Medical Research. The VA engages in research as an ancillary function of the treatment of veterans, and conducts independent research projects intended to advance medical science. Almost one-half of VA’s research funding comes from conventional medical research funding sources, the bulk of which is provided through grants from the National Institutes of Health (NIH). The remaining funds supporting VA research are split almost evenly between appropriations from Congress specifically for such research and salaries and expenses from the VA medical care budget for the VA medical staff who are producing the studies that exhibit VA’s research findings. About two-thirds of the research projects are initiated by the medical staff reporting their findings. These projects are giving greater attention to the diseases associated with an aging population, especially in conjunction with the management of those chronic conditions that are a growing part of the outpatient workload. P.L. 108-199 incorporates administration of the research budget into the broader account structure for medical programs, and provides $408 million for research for FY2004, same as the amount requested by the Administration. P.L. 108-7 provided $400 million for VA medical research for FY2003. Congress provided $371 million for VA research in FY2002, $350 million for FY2001, and $321 million for FY2000. Housing Benefits. The VA program to guarantee home loans for veterans has made a significant contribution to the national goal of increasing the number of families who own their own homes. Because of the guarantees, lenders are protected against losses up to the amount of the guarantee, thereby permitting veterans to obtain mortgages with little or no down payment and with competitive interest rates. These guarantees, and certain direct loans to specific categories of veterans, are obligations of the federal government that constitute mandatory spending. Administrative expenses are discretionary appropriations that in previous fiscal years have been transferred from the home loan programs to the General Operating Expenses account. For FY2004, the Administration proposed treating administrative expenses for all programs as part of the request for the program, instead of having one requested amount for general administration. VA Construction. The Administration’s FY2004 budget requested construction funds as an amount attached to the program budget authority line for which the construction is intended. The total amount of construction funds requested was $525 million for FY2004, and H.R. 2861 included $527 million. S. 1584, as reported by the Senate Committee on Appropriations, recommended $525 million for FY2004. P.L. 108-199 provides $273 million for major construction, and $252 million for minor construction (projects with an estimated cost under $4 million). “Major construction” projects have an estimated cost over $4 million. Many of the construction projects will continue VA’s overall strategy of expanding outpatient access for medical care. Capital Asset Realignment. In 2000, VA embarked on a planning approach to constructing, altering, extending, or improving facilities. In part, this approach, called Capital Asset Realignment for Enhanced Services (CARES), was the Department’s reaction to criticism from areas of the country in which hospital resources have been cut back, in order to redirect those resources to outpatient care, usually in other geographical areas. CRS-9 While VA has been successful in expanding the number of patients it serves, conflict continues between advocates of a more efficient use of resources (who advocate reducing hospital space and closing or selling superfluous inpatient facilities) and veterans groups (who see any reduction in inpatient care as a threat to the veterans’ services). The CARES effort is an attempt to make the planning process by which the capital assets are developed, used, modified, or relinquished, open to veterans groups. Often, the fears about reductions in health care to veterans are based on an inadequate understanding of the improvements in care for more veterans that such realignment of resources makes possible. Some veterans have expressed the belief that, over time, moving resources from an inpatient facility in one area to outpatient access in another yields an unacceptable rate of deterioration in the former facility, as the commitment to maintain the building is diminished as the Department moves toward its eventual abandonment. The Conference Committee has expressed concern with the recommendations made by the CARES Commission with regard to closure of some VA medical facilities. The Committee has directed VA to consider all travel issues in analysis of future needs of veterans health care. In addition the conferees direct the Secretary of VA to develop recommendations for future use of facilities that would be closed following final recommendations of the CARES Commission. Burial and Cemetery Benefits. The Administration requested $176 million to honor and help defray the cost of veterans’ burials during FY2004; Congress provided $164 million for that service for FY2003, which covers about 84,000 burials, 69,000 burial plots, 9,000 service-connected deaths, 528,000 flags, and 354,000 headstones and markers. Department Administration. In its FY2004 budget request for VA, the Administration distributed the request for administrative expenses among the several programs to be served by those administrative personnel. In the past, most administrative costs were shown as a total under the General Operating Expenses (GOE) account, with a separate request for medical care administration. For FY2004, the total requested for general administration was $1.283 billion, and $79 million for medical administration. Congress provided $1.346 billion for GOE for FY2003, and $74 million for medical administration. P.L. 108-199 provides $1.283 billion for GOE and the amount for medical care administration is included in the $5 billion for the new medical administration account mentioned earlier. VA Employment Estimates. The Bush Administration projects an overall VA employment increase to an average of 211,752 in FY2003, up from an average 208,870 during FY2002, which was up from an average of 206,949 during FY2001, and 202,621 in FY2000. CRS-10 Title II: Department of Housing and Urban Development Introduction Most of the appropriations for the Department of Housing and Urban Development (HUD) address the housing problems faced by households with very low incomes or other special housing needs. Programs of rental assistance for the poor, elderly or disabled, housing assistance for persons with AIDS, varying types of shelter for those who are homeless — all deal with the issue of the availability of low-cost housing. The two large HUD block grant programs, HOME and Community Development Block Grants, also help communities finance a variety of activities to address housing needs of disadvantaged populations. Since 1994, when the Clinton Administration started its homeowner initiative in partnership with the housing industry, HUD has focused more attention than previously on efforts to increase homeownership opportunities for lower-income and minority households. The Bush Administration has made increasing homeownership a top priority. The following discussion of the FY2004 HUD budget first summarizes the major issues in the proposed budget, and then examines individual programs, comparing enacted levels for FY2003 with Administration proposals for FY2004 and the congressional response, highlighting significant changes in funding levels and associated issues. It should be noted that the budget figures presented below do not include the 0.59% across the board rescission proposed in the Omnibus appropriations bill. Most Recent Developments. An omnibus spending bill (H.R. 2673, H.Rept. 108-401) that will fund HUD for FY2004 was signed into law by the President on January 23, 2004 (P.L. 108-199). The Senate had approved the conference report on the bill on January 22, 2004 and the House, on December 8, 2003. The new budget provides HUD with nearly $31.4 billion of appropriations (not including an advanced appropriation of $4.2 billion that cannot be spent until FY2005). Highlights of the Administration’s Proposed HUD Budget Proposed budget of $31.73 billion, up $719 million over the $31.01 billion enacted for FY2003 (including a 0.65% “across-the-board” rescission enacted in FY2003); ! New Housing Assistance for Needy Families (HANF) block grants to states, funded at $13.6 billion (including the use of recaptured funds) to replace current Section 8 housing choice vouchers; ! Approximately 5,600 incremental housing vouchers, targeted to nonelderly disabled families; ! No new funding requested for the HOPE VI public housing program, Brownfields Redevelopment, Rural Housing Economic Development, and Empowerment Zone/Enterprise Communities (EZ/ECs) programs; ! CRS-11 A new Public Housing Reinvestment Initiative to encourage private capital for the rehabilitation of public housing; ! New Downpayment Assistance Initiative as a $200 million set-aside within HOME program (H.R. 1276), $45 million for counseling, and new FHA insurance products to help lower income and minority households (an effort to combat predatory lending); ! Increased funding for homeless assistance, with new $50 million Samaritan Initiative; and ! Community Development Block Grants requested at $4.716 billion, $189 million below FY2003 level, with no funding for Economic Development Initiatives (congressionally earmarked projects). ! Congressional Response to Proposed Budget (H.R. 2673) Total HUD budget of $31.4 billion; Housing Certificate Fund provided with $19.4 billion, with no incremental vouchers; ! HANF, Public Housing Reinvestment, Samaritan and Colonias Initiatives not approved; ! HOME funded at $2.0 billion, with $87.5 million for Downpayment Assistance Initiative; ! Large reduction for HOPE VI, at $150 million compared to $570 million in FY2003; ! Near level funding for Public Housing Capital and Operating programs at just over $6.3 billion; ! Homeless programs increased by $50 million over FY2003; ! Proposed anti-predatory lending FHA product not adopted; ! Brownfields funded at $25 million and Rural Housing at $25 million; and ! Community Development Block Grants funded at about $5 billion, near level funding with FY2003, and about $230 million above the budget request. ! ! The Major Issues There were a number of basic themes in the Administration’s FY2004 budget proposal: devolution, deregulation, more private capital involvement in solutions to housing problems, and efforts to increase homeownership for lower income and minority households (to increase their net worth and financial independence). Of particular controversy were major changes in the way the agency would operate and fund its two largest housing programs, Section 8 tenant-based vouchers (about 2 million vouchers) and public housing (about 1.25 million units). On July 25, 2003, the House responded to the HUD proposal with the passage of an amended version of H.R. 2861 (H.Rept. 108-235). The Senate passed its version of the HUD budget, S. 1584, on November 18, 2003 (S.Rept.108-143). The conference report on an omnibus appropriations bill for FY2004, filed on November 25, 2003 (H.R. 2673, H.Rept. 108-401), contained significant changes to the Section CRS-12 8 Housing Certificate program compared to recommendations made by the House and Senate bills. The Administration’s major initiative, the Housing Assistance for Needy Families Act of 2003 (HANF), presented in the FY2004 budget proposal and introduced on April 30, 2003 as H.R. 1841/S. 947, would have converted the existing Section 8 housing choice voucher program into a state-administered block grant program. Grants would have been made to states to provide tenant-based rental and homeownership housing assistance. Under the current program, there are thousands of pages of federal regulations that are cited as inhibiting HUD from quickly adjusting the program to meet local needs. HUD contends that by eliminating most of these regulations (and limiting its involvement largely to oversight of performance standards), each state would have the flexibility to be innovative in meeting its unique housing problems. HUD claims that this approach would make it possible to end the chronic problem of unspent monies in the housing voucher program. Opponents worried that funding under the new HANF program would not keep pace with rapidly rising housing costs, and that states might establish new requirements such as time limits on receiving assistance for tenants, similar to those under welfare reform programs. Opponents questioned whether a block grant to states would merely add another layer of bureaucracy if states were to reroute federal funds back to the same local public housing authorities. The House Appropriations Committee report recommended continued funding of the Housing Certificate Fund account rather than through the HANF proposal, noting that “this proposal is currently under consideration by the relevant authorization committees and therefore [the committee] defers any changes to the funding structure until further congressional action on the legislative proposal.” The House-approved bill concurred with this view. The Senate bill also rejected the HANF proposal, with the Appropriations Committee report stating that “Until there is reliable data on the current per-unit costs and utilization rates of vouchers as well as assurances that the block grant funding will meet all voucher needs, the Committee is not inclined to consider fully the administration’s block grant proposal.” Likewise, the Omnibus bill also rejected the HANF proposal. In addition to the controversy surrounding HANF, the President’s FY2004 budget raised some funding concerns among low-income housing advocates. Some observers worried that there might not be adequate funds under the Administration’s FY2004 budget request to renew all currently authorized vouchers. In recognition of a possible funding shortfall, H.R. 2861, the House bill, increased the Housing Certificate Fund (HCF) by $150 million to near $18.6 billion (taking the money from HUD’s working capital fund that is used to make improvements to computers and other information technology systems). Some housing groups said this would still be too little to pay for all renewals and that, even with the increase, more than 60,000 vouchers would be at risk. CRS-13 The Senate Appropriations Committee (S.Rept. 108-143), which provided $18.4 billion for the HCF, acknowledged in its report that the funding provided might not be adequate to cover all renewals and stated that the Committee expected the Administration to address any budget shortfall through a FY2004 supplemental appropriations request. However, the Omnibus bill addressed this issue by increasing the appropriation for renewals, which would be offset by a larger rescission of unobligated balances in several HUD programs. The Administration’s FY2004 budget did not request funding for the HOPE VI program for the revitalization of distressed public housing. This program received $570 million in FY2003. HUD Secretary Martinez argued that there are sufficient unspent funds in the pipeline to keep this program operating, and in the meantime, sought a dialogue with Congress on how the program might be improved. During a number of congressional hearings on the proposed budget in 2003, considerable bipartisan support was expressed for continued funding of the program. Others made the case that in a tight budget period, this was the most reasonable program to cut. S. 811, which was signed into law by the President on December 16, 2003, reauthorized the HOPE VI program from FY2004 through FY2006 (P.L. 108-186). The House appropriations bill, H.R. 2861, recommended $50 million in funding for HOPE VI and the Senate bill, S. 1584, would provide $195 million for FY2004. The Omnibus appropriations bill recommended appropriations of $150 million for HOPE VI in FY2004. The Administration proposed its Public Housing Reinvestment Initiative to encourage Public Housing Authorities (PHAs) to convert some public housing units to Section 8 project-based assistance again this year. Under this initiative, PHAs would turn to the private sector for rehabilitation loans, pledging the project-based revenues as collateral. Congress rejected this reinvestment initiative in 2002, directing HUD to report to the Appropriations Committees about PHAs that have already obtained private financing for their capital needs. HUD would like to move public housing towards private ownership, with more market-based decisions about the operations and maintenance of projects. HUD also claims that the large backlog of modernization needs faced by PHAs may be more quickly addressed if annual capital fund appropriations are supplemented by an infusion of private capital. Opponents contend the $90 billion public housing stock is a national asset that provides a social safety net for the most disadvantaged and poorest of households — and that it should not be mortgaged or sold off. The House Appropriations Committee report says it understands that “under existing statutory authorities, a number of PHAs have in fact successfully pursued approximately $1 billion in public-private financing partnerships ... [and] the Committee believes that such proposals need to be more fully examined before significant statutory and funding changes are made.” (Baltimore, Chicago, and Philadelphia are examples of cities that have obtained such private financing.) The House bill and Senate bill rejected the proposal, with the Senate Appropriations Committee report stating that it “could result in a loss of public housing units, and would not benefit public housing units with the greatest capital needs.” The CRS-14 Omnibus bill (P.L. 108-199) also did not adopt the President’s PHRI initiative, noting that many PHAs already secure private financing. Under the President’s FY2004 budget, the HOME housing block grant program would have been increased by $210 million to $2.2 billion, with $200 million of the increase set-aside for the Administration’s American Dream Downpayment Initiative. HUD estimates that this program would provide an average grant of $5,000 for downpayment and closing cost assistance for 40,000 low-income households each year. Few are opposed to increasing homeownership opportunities for lower income households unless it means less funding for rental assistance. But some urge caution in putting lower income households into their first home if they have a high risk of failure because of inadequate savings or the inability to protect themselves from a variety of financial predators. Language authorizing the Downpayment Act at $200 million annually from FY2004 through FY2007 was signed by the President on December 16, 2003 (S. 811, P.L. 108-186). The Omnibus bill appropriates $87.5 million to provide downpayment assistance to low-income families. Table 5. Department of Housing and Urban Development Appropriations, FY2000 to FY2004 (net budget authority in billions) FY2000 FY2001 FY2002 FY2003 FY2004 $25.92 $28.48 $30.15 $31.01 $31.41 Source: Figures for FY2000-FY2002 are from administration budget submissions of subsequent years;FY2003 and FY2004 are from H.Rept. 108-401. Actual final spending levels for any fiscal year include all supplemental appropriations or rescissions. However, the FY2002 number does not include $2 billion in emergency supplemental funds for the Community Development Fund for assistance to New York City following the terrorist attacks of September 11, 2001, a one time anomaly. Final totals remain uncertain until all program experience has been recorded, a process that may not be completed for several months after the end of the fiscal year. FY2003 Appropriations President Bush signed P.L. 108-7, the consolidated appropriations bill for FY2003, on February 20, 2003, nearly five months into the fiscal year. The law provided HUD with $31.01 billion (after application of a 0.65% across-the-board rescission included in the law). HUD’s largest program, the Housing Certificate Fund (frequently referred to as “Section 8"), received $17.1 billion, almost $1.5 billion more than enacted in FY2002. Despite the increase, no incremental housing vouchers were funded — that is, there was no increase in the number of low-income renters assisted. The FY2003 appropriations law included some reforms to address the chronic underutilization of housing voucher funds, directing that HUD only renew contracts with PHAs for the number of vouchers they had under lease, not those simply authorized in the previous year. Congress appropriated $2.7 billion in FY2003 for the Public Housing Capital Fund, $113 million below the FY2002 funding level. The Administration’s Public CRS-15 Housing Reinvestment Initiative, designed to encourage PHAs to convert some public housing units to Section 8 project-based assistance, was rejected. Under this initiative, PHAs would pledge the project-based revenue as collateral for rehabilitation loans. The conferees directed HUD to report to the Appropriations Committees about PHAs using private financing for their capital needs. P.L. 108-7 increased the Public Housing Operating Fund to $3.58 billion, $82 million above the FY2002 level. The conferees agreed to allow HUD to use this appropriation to cover a controversial $250 million shortfall for FY2002 that the agency blamed on flaws in its accounting system. This transfer effectively reduced the FY2003 appropriation by $250 million. The HOPE VI program, which is used to rehabilitate or tear down the worst public housing units, received $570 million, level with the prior year’s funding. Almost $5 billion was approved for the Community Development Block Grant program, nearly the same as in FY2002, while the HOME block grant received an increase of about $141 million to a total of just under $2 billion. There was a $75 million set-aside within the HOME program for the Administration’s Downpayment Assistance Initiative, which was less than the Agency’s $200 million request. Housing for the elderly was funded at $776 million, down by $7 million from FY2002, and housing for the disabled received $251 million, up by about $10 million. Housing opportunities for persons with AIDS was funded at $290 million, an increase of about $13 million. The Administration made ending chronic homelessness in the next 10 years a top priority, and Congress provided $1.22 billion, $93 million more than enacted in F2002. For more details, see CRS Report RL31304, Appropriations for FY2003: VA, HUD, and Independent Agencies. Public and Indian Housing Programs Project-based and Tenant-based Rental Assistance. HUD’s low-income rental assistance program, commonly referred to as Section 8, has two components: vouchers (the Housing Choice Voucher (HCV) program); and project-based rental assistance. Vouchers are rental subsidies that eligible families can use to lower their rents in the housing units they choose to live in; project-based subsidies are rental subsidies attached to specific housing developments that are under contract with HUD. For several years, funding for these two programs has been provided in one account, called the Housing Certificate Fund (HCF). In FY2003, Congress provided $17.1 billion in direct appropriations for the HCF. For FY2004, the Administration proposed to abolish the HCF by splitting it into two separate accounts, creating two separate programs: the Housing Assistance for Needy Families (HANF) block grant to states, which would provide vouchers; and the project-based rental assistance program which would remain essentially unchanged. For HANF, the Administration requested a total funding level of $13.6 billion for FY2004. This figure includes a direct appropriation of $12.5 billion and $1.1 billion that the Administration estimates will be available from unobligated balances carried over from previous CRS-16 years. For the project-based rental assistance program, the Administration requested $4.8 billion in new budget authority for FY2004 and indicated that $300 million is available for rescission. Combined, the President requested $18.4 billion for the Section 8 programs (including the $1.1 billion in unobligated balances). Table 6. Appropriations: Housing and Urban Development, FY2003-FY2004 (budget authority in billions) Programs FY2003 FY2004 FY2004 FY2004 FY2004 request House Senate Conf. Housing Certificate Fund (HCF) Direct appropriation Advance approp. from previous acts Advance approp. in current year 12.939 4.173 4.200 — — — — — — 8.335 4.200 4.200 21.312 16.735 14.381 14.234 4.200 4.200 4.200 4.200 15.171 4.200 4.200 Housing Assistance for Needy Families (HANF)a Direct appropriation Advance approp. from previous acts Advance approp. in current year Subtotal: Housing assistance funds Direct appropriations Advance approp. prov. in current year — — — — — — — — — 22.781 22.634 23.571 (17.312) (16.735) (18.581) (18.434) (19.371) (4.200) (4.200) (4.200) (4.200) (4.200) Project-based Rental Assistance — 4.823 — — — Section 8 recaptures (rescission) -1.600 -0.300 -1.372 -1.372 -2.844 Public housing capital fund 2.712 2.641 2.712 2.641 2.712 Public housing operating fund 3.577 3.574 3.600 3.577 3.600 Revitalization of distressed public housing (HOPE VI) .570 — .050 .195 .150 Native American housing block grants .645 .647 .662 .647 .654 Indian housing loan guarantee .005 .001 .005 .005 .005 Native Hawaiian Block Grant — .010 — — — Native Hawaiian loan guarantee .001 .001 .001 .001 .001 Subtotal: Public & Indian Housing 27.222 28.132 28.439 28.327 27.850 (Rescissions) (Advance approps., FY2003 & FY2004) (Appropriations) (-1.600) (-.300) (-1.372) (-1.372) (-2.844) (4.200) (4.200) (4.200) (4.200) (4.200) (23.022) (23.932) (24.239) (24.127) (23.650) Housing, persons with AIDS (HOPWA) .290 .297 .302 .291 .297 Rural Housing Economic Development .025 .000 .025 .025 .025 Empowerment zones; enterprise communities .030 .000 .015 — .015 CRS-17 Programs Community Development Block Grant FY2003 FY2004 FY2004 FY2004 FY2004 request House Senate Conf. 4.905 4.716 4.959 4.951 4.950 Colonias Initiative — .016 — — — Urban Develop. Act. Grants (rescission) — -.030 -.030 -.030 -.030 Section 108 loan guarantee; subsidy .007 — — .007 .007 Brownfields redevelopment .025 — .025 .025 .025 HOME Investment Partnerships 1.987 2.197 2.064 1.975 2.018 Homeless Assistance Grants 1.217 1.325 1.242 1.325 1.267 — .050 — — — Subtotal: Community Plan. & Develop. 8.486 8.571 8.602 8.569 8.573 Housing, special populations b 1.027 1.025 1.024 1.034 1.029 — — .774 .251 .773 .251 — — .778 .251 — .045 — — — Rental housing assistance (rescission) -.100 -.303 -.303 -.303 -.303 Federal Housing Administration (net)c Samaritan Initiative Housing for the elderly Housing for the disabled Housing Counseling Assistance -2.217 -2.359 -2.359 -2.359 -2.359 d -.348 -.307 -.307 -.307 -.307 Research and technology .047 .051 .047 .047 .047 Fair housing activities .046 .050 .046 .050 .048 Office, lead hazard control .175 .136 .130 .175 .175 Salaries and expenses .527 .537 .547 .535 .547 Working capital fund .275 .276 .090 .240 .235 Inspector General .074 .076 .076 .078 .077 Rescissions; legislative savings; supplemental -.008 — — — — Subtotal: net HUD approps. (this bill) 35.204 35.929 36.031 36.086 35.612 GNMA (net) Appropriations Rescissions; total Negative subsidy Offsetting collections (36.091) (35.883) (37.046) (37.118) (38.106) (-1.708) (-0.633) (-1.705) (-1.705) (-3.177) (-2.978) (-3.146) (-3.146) (-3.146) (-3.146) (-.401) (-.367) (-.363) (-.381) (-.371) Advance appropriations (4.200) (4.200) (4.200) (4.200) (4.200) 31.004 31.729 31.831 31.886 31.412 Subtotal: HUD (net, current year, w/o adv. for following fiscal year) Source: H.Rept. 108-401 Note: Totals may not add due to rounding. FY2004 amounts do not include effects of the .59% across-the-board reduction in most discretionary accounts, as called for in P.L. 108-199. CRS-18 a The Administration has requested a direct appropriation of $12.535 billion for FY2004; however, they anticipate the availability of $1.072 billion in unobligated balances, leading to a total program level of $13.607 billion. b The Administration did not request a total amount for special populations, but requests separate amounts for the elderly and the disabled. The House and omnibus conference agreement adopted the Administration’s proposal to fund the programs separately; the Senate did not. c Net, interagency transfers and offsetting receipts against appropriations of the current year; included in the totals are projected experience gains greater than premiums to the mortgage insurance fund, which are now treated as offsetting receipts against discretionary funds. The effect is estimated to be $-2.753 billion for FY2003 and $-2.921 billion for FY2004. d Net, interagency transfers and offsetting receipts against appropriations of the current year. e Amounts less than $1million do not appear in this table. In FY2003, $195,000 in surplus offsetting receipts was collected by HUD from the Office of Federal Housing Enterprise Oversight and $85,000 was collected from the Manufactured Housing Fees Trust Fund. The House appropriations bill, H.R. 2861, did not adopt the HANF proposal’s funding structure. Instead, the House bill would provide $18.6 billion for the HCF for FY2004, up $150 million from the President’s request. Of that amount, $4.7 billion would be provided for project-based rental assistance and $13.8 billion would be provided in direct appropriations for vouchers. The House proposed to rescind the $1.1 billion in carryover funds that the Administration highlighted for program use as well as the $300 million the Administration highlighted for rescission. The Senate bill also rejected the President’s HANF proposal. The Senate did adopt the President’s funding level for Section 8, providing $18.4 billion for FY2004, less than the $18.6 billion provided by the House. The bill would also rescind $1.4 billion in unobligated balances. Like the House and Senate, the Omnibus appropriations bill rejected the HANF proposal. The bill would fund the HCF at a level almost $1 billion higher than the requested level ($19.4 billion), but would rescind twice as much as the House or Senate bills ($2.844 billion). What is HANF? The Housing Assistance for Needy Families (HANF) (H.R. 1841, S. 947) program would replace the existing voucher program that is administered by local PHAs with a block grant provided to states. In the Administration’s FY2004 congressional budget justification, HUD asserts that state administration would increase the utilization of vouchers, eliminating the large amounts of unobligated balances available for recapture every year. They argue that states would have the flexibility to quickly adjust the program to meet local and regional needs. Critics of the proposal fear that the value of the block grant will erode over time, leaving the program underfunded. They also express concern that states will not have the capacity, because of inexperience with the program and tight budgets, to handle the program. According to the Administration, FY2004 would be a transition year for the HANF proposal, meaning that PHAs would continue to administer the program as usual; the Administration anticipates that the program, if passed, would be fully implemented in FY2005. The table below compares some of the proposed features of HANF to existing features of the HCV program. CRS-19 Table 7. Comparison of Existing Housing Voucher Program and HANF Proposal Housing choice voucher program HANF Thirty-three states currently administer a portion of the HCV program, but most funds are administered by local PHAs. States would have the option to administer the whole program, contract all or part to PHAs or not participate. If a state chose not to participate, HUD could administer the program itself or choose another entity to administer the program. At least 75% of vouchers must be targeted to extremely low income families (30% or below area median income), although the Secretary can change the definition of extremely low income for certain communities. At least 75% of vouchers would be targeted to extremely low income families (30% or below area median income), although the Secretary would be able to grant waivers to communities as long as at least 55% of vouchers remain targeted to extremely low income families. PHAs currently have the option of setting a minimum rent of up to $50 per month. A minimum rent of at least $50 per month would be required for each family. Initial eligibility for the program is set at the very low income level (50% or below area median income), although PHAs can choose to expand eligibility to the low income level (80% or below area median income) for certain categories of families they choose. Initial eligibility for the program would be set at the low income level (80% or below area median income), although the Secretary could choose to expand eligibility above the low income level for elderly and disabled families. Families cannot pay more than 40% of their incomes toward rent. Families could not be required to pay more than 30% of their incomes towards rent, but could choose to pay more. Housing units under voucher contracts must be inspected annually. Housing units under voucher contracts would be required to be inspected every three years. An estimated 2 million vouchers are up for renewal in FY2004. States would be required to make every effort to assist the same number of families under HANF as are currently being assisted under the HCV program. PHAs are evaluated annually through the Section 8 Management Assessment Protocol (SEMAP) which is a set of 14 criteria established by HUD. If PHAs perform poorly, they may face financial penalties until they improve or may come under receivership. Each state would be required to make performance evaluation reports to the Secretary on its progress in reaching the goals it has established in an annual plan. If a state is not making sufficient progress, HUD can retake administration of the program. Source: Congressional Research Service, from CRS Report RL31930, The Housing Choice Voucher Program, Funding, and Issues in the 108th Congress. CRS-20 For more details on the Housing Choice Voucher Program and the HANF proposal, see CRS Report RL31930, The Housing Choice Voucher Program: Background, Funding and Issues in the 108th Congress. Contract Renewals. Most vouchers and project-based rental assistance subsidies are funded by Congress in one-year increments. As a result, PHAs enter into one-year contracts, which come up for renewal every year. The renewal of expiring contracts accounts for the majority of the cost of the Section 8 programs. In FY2003, $10.9 billion was appropriated for the renewal of approximately 2 million expiring vouchers (not including administrative funds and central reserve funds) and $4.3 billion was appropriated to renew approximately 817,000 project-based units. These renewal costs accounted for $15.24 billion (or 89%) of the HCF appropriation in FY2003. For FY2004, the Administration requested $11.48 billion for the renewal of expiring vouchers through the HANF program (not including administrative funds or central reserve funds) and $4.72 billion to renew expiring project-based contracts. The Administration estimated that its request for renewals, $16.2 billion, would renew approximately 1.9 million vouchers and approximately 870,000 project-based contracts. The House-passed appropriations bill would have provided a total of $16.5 billion for Section 8 renewals. Of that amount, $11.73 billion would be to renew expiring vouchers (slightly more than the Administration requested) and $4.72 billion would be to renew expiring project-based contracts. The Senate bill would have provided $16.2 billion for renewals in FY2004 — $11.5 billion for voucher renewals and $4.7 billion for project-based renewals. The omnibus bill provided $17.6 billion for renewals; $1 billion more than the House, Senate or President’s level. In prior years, HUD had set aside funding for each PHA based on the number of vouchers the PHA was authorized to lease, rather than the number of vouchers it was actually using (leasing). Every time a PHA would have less than 100% utilization of vouchers, HUD would come in at the end of the year and recapture unobligated balances. This system resulted in HUD recapturing over a billion dollars in unobligated balances every year. In FY2003, Congress adopted a new funding structure for voucher renewals. This structure provides funding to local PHAs only for those vouchers that they are leasing, or can reasonably expect to lease, rather than the full number that they are authorized to lease. This change provides HUD with the flexibility to move money to where it is needed in a more timely manner and is expected to reduce the size of unobligated balances available for recapture. All three appropriations bills continue this new funding structure. The President’s FY2004 budget request raised some funding concerns among low-income housing advocates. Several were worried that there may not be adequate funds under the Administration’s FY2004 budget request to renew all currently authorized vouchers. Analyzing HUD data, the Center on Budget and Policy Priorities (CBPP) concluded that the Administration’s funding request for vouchers could result in insufficient funding in 2004 to support as many as 90,000 housing vouchers now in use. HUD’s FY2004 funding request was based on data from 2001 CRS-21 and 2002, which indicated that fewer vouchers were being used and that voucher costs were lower than CBPP estimated using FY2003 data. If the funding provided by Congress is insufficient to renew all existing vouchers, then HUD has several options. It could dip into unspent funds from prior years to cover any shortfall, although it is unclear how much is available from this source. HUD could also direct PHAs not to reissue vouchers that become available, which would cut down on costs without evicting anyone. Finally, if these other strategies did not work, HUD could direct PHAs to take back subsidies from families. In recognition of a possible funding shortfall, the House increased the Housing Certificate Fund (HCF) by $150 million over the Appropriations Committee recommendation (taking the money from HUD’s working capital fund that is used to make improvements to computers and other information technology systems). Some housing groups say this was still too little to pay for all renewals and that, even with the increase, more than 60,000 vouchers would still be at risk. The Senate Appropriations Committee acknowledged that the funding level provided in the Senate bill might not be adequate to cover all renewals and that they expect the Administration to address any budget shortfall through a FY2004 supplemental appropriations request. A “Sense of the Senate” amendment was added to the bill on the Senate floor, which stated that — (1) housing vouchers are a critical resource in ensuring that families in America can afford safe, decent, and adequate housing; (2) public housing agencies must retain the ability to use 100% of their authorized vouchers to help house low-income families; and (3) the Senate expects the Department of Housing and Urban Development to take all necessary actions to encourage full utilization of vouchers, and to use all legally available resources as needed to support full funding for housing vouchers in FY2004, so that every voucher can be used by a family in need. The conference agreement on the omnibus appropriations bill, H.R. 2673, takes a different approach than the House or Senate to deal with concerns about insufficient renewal funds. P.L. 108-199 provides an additional $1 billion for renewals, and then increases the rescission level, which allows the Secretary to spend more to renew vouchers, since the rescission can be met using excess balances from other accounts. According to the report language, the conferees were concerned about the escalating costs of the voucher program. In that language, they directed the Secretary to report back on the causes of the rising costs and possible solutions. Central Reserve Fund. The Secretary can use central reserve funds to supplement the voucher program if PHAs’ costs increase. Such cost increases can result either from increases in the average cost per voucher or increases in the average utilization of vouchers. The central reserve fund was created in FY2003 and funded at $389 million. For FY2004, the Administration requested $609 million for the central reserve fund as a part of its HANF proposal. Of that amount, $100 million would be earmarked for states to use in preparation for full implementation of HANF in FY2005. An additional $36 million from the central reserve fund would be available for incremental vouchers targeted to non-elderly disabled families. The CRS-22 authority to use central reserve funds for new incremental vouchers would be new; currently, central reserve funds cannot be used for new vouchers. H.R. 2861 proposed $569 million for the central reserve fund, up substantially from FY2003, but down slightly from the Administration’s request. The House did not include a $100 million set-aside for HANF costs, nor did it provide the Secretary with the authority to use central reserve funds to create incremental vouchers. The Senate approved $461 million for the central reserve fund. Like the Administration’s request, up to $36 million could be used to provide vouchers to non-elderly, disabled families; however, unlike the Administration’s request, the Senate would not set aside any money for state HANF start-up costs. The omnibus provides $137 million for the central reserve fund, but does not allow any of the funds to be used for new vouchers. Incremental Vouchers. The term “incremental” is used to describe new vouchers. No new incremental vouchers were provided in FY2003; for FY2004, as described above, the Administration requested the authority to use central reserve funds for new incremental vouchers, including up to $36 million for non-elderly disabled families. Neither the House bill nor the conference agreement on the omnibus included any funding for new incremental vouchers or permit the Secretary to use central reserve funds for new incremental vouchers. The Senate bill would have permitted HUD to use up to $36 million from the central reserve fund for incremental vouchers for non-elderly, disabled families, if the Secretary determines that the funds are not needed to support existing vouchers. Tenant Protection Vouchers. Tenant protection vouchers are used to relocate families whose subsidized housing units have been demolished, sold or converted to market-rate. These vouchers are also used for families in the Family Unification Program or in the Witness Protection Program. The Administration requested $252 million for tenant protection vouchers as a part of its FY2004 HANF request, which was an increase from the $232 million provided in FY2003. The FY2004 request would fund the same number of vouchers funded in FY2003 (43,300). Funding for tenant protection vouchers, like other vouchers, does not include administrative costs. The House bill would have provided $206 million for tenant protection vouchers, down both from the FY2003 funding level as well as the Administration’s request. The Senate would have provided $252 million for tenant protection vouchers, equal to the Administration’s request. The omnibus provides $206 million for tenant protection vouchers. Administrative Costs. The voucher program is managed at the local level by quasi-governmental bodies called PHAs; the project-based program is managed by state, local, and private entities called contract administrators. PHAs distribute vouchers, help families find housing, and manage the program accounting; contract administrators oversee the physical and financial health of projects that are under CRS-23 contract with HUD. Funding for contract administrators in the project-based program is provided separately from funding for PHAs in the voucher program. Congress has expressed concern over the past couple of years that PHAs may receive too much in administrative fees for the voucher program and that they are using the excess for other purposes. Changed in FY2003, and proposed changes in FY2004 aim to address that concern. For the voucher program, HUD requested $1.19 billion for administrative costs in FY2004, as a part of its overall HANF request. This request would provide an increase from the $1.07 billion provided in FY2003. For the project-based program, HUD requested $100 million for contract administrators in FY2004. This request is a decrease from the $195 million provided in FY2003. The House bill, H.R. 2861, would have provided $1.21 billion for voucher administrative costs in FY2004, which is up from the President’s request. The House bill maintains provisions included in the FY2003 appropriations law that limit the administrative fee reserves maintained by PHAs to 5% and prohibited the use of administrative fees for programs other than the voucher program. In addition, the House bill included new provisions which direct the Secretary to distribute administrative fees to PHAs, in a manner prescribed by the Secretary, in an amount not to exceed the amount provided in the bill. Under current practice, the Secretary uses a formula to determine administrative fees earned by PHAs. As a result, the cumulative amount owed to PHAs can vary based on a number of factors, including utilization rates and fair market rents, and therefore, could conceivably rise above the amount provided in an appropriations bill. The provision in the House bill would direct the Secretary to ensure that the amount of administrative fees paid to PHAs stays at or below the appropriated amount, which may mean that the Secretary will have to adopt a new formula for providing administrative fees, potentially resulting in lower fees paid to PHAs. The Senate bill would have provided $1.3 billion for administrative fees for the voucher program, greater than the amount requested and recommended by the House. The funds would have been allocated under the existing formula. The Senate bill would have maintained the 5% cap on administrative fee reserves introduced in FY2003, however, the bill did not include the language from the House bill that could potentially limit PHA administrative fee earnings. The omnibus bill provides $1.24 billion for administrative fees for the voucher program in FY2004. Rather than adopting the new House-proposed allocation formula, or retaining the current allocation formula as the Senate proposed, P.L. 108199 introduces a new allocation plan. $1.19 billion would be available to be distributed on a pro-rata basis to PHAs, based on what they received in the previous year. The remaining $50 million will be allocated at the Secretary’s discretion to PHAs who need additional funds. Under this bill, administrative fees and fee reserves would be limited for use only in the Section 8 program. For contract administrators, all three bills provide funding at the President’s requested level of $100 million. CRS-24 Family Self Sufficiency Coordinators. Family Self Sufficiency (FSS) coordinators help families obtain job training and employment. The FSS program’s goal is to decrease families’ dependency on public assistance programs and move them towards economic self sufficiency. In FY2003, $48 million was provided for FSS coordinators; in FY2004, $72 million is requested for FSS coordinators. The amount provided in H.R. 2861 and the omnibus for FSS coordinators in FY2004 would match the amount provided in FY2003 ($48 million), but would be significantly less than the amount requested by the Administration ($72 million). The Senate bill would fund FSS coordinators at the President’s requested level. Unobligated Balances. For several years, unspent funds have accumulated within the HCF. These unspent funds, called unobligated balances, accrue when local PHAs do not spend all of the funds, or use all of the vouchers, they were given in a year. Congress has expressed great concern over this “chronic underutilization.” Another source of unobligated balances comes from expiring project-based Section 8 rental assistance contracts. Originally, Congress provided funding for these contracts, most of which originated in the late 1970s and early 1980s, in 20 year increments. In many cases, the amount of funding needed to maintain these contracts was over estimated, so when they expire after 20 years, some budget authority is left over. It is estimated that the majority of these contracts will expire by FY2008, although it is unclear how much budget authority those expirations will release each year. In FY2003, HUD reported $2.84 billion in unobligated balances in the Housing Certificate Fund, according to the FY2004 Budget Appendix. Of that amount, HUD expected Congress to rescind $1.1 billion in FY2003. Congress actually rescinded $1.6 billion in FY2003 and required HUD to change the way that it obligated voucher funds in the hopes of reducing future unobligated balances resulting from voucher underutilization. The remaining $1.24 billion dollars was available for use in FY2003 or could be carried over into FY2004. In its FY2004 request, the Administration stated that it expected to have $1.37 billion available in unobligated balances. Of that amount, the Administration anticipated that $1.07 billion will be used for vouchers under HANF and $300 million will be rescinded by Congress from the project-based rental assistance program. However, HUD’s estimate of unobligated balances available in FY2004 is no longer current. Since the Administration developed the FY2004 budget request before the FY2003 funding level was enacted, they had to base their estimates on the funding levels they had requested, rather than what they had received. Therefore, the $1.37 billion was estimated using a smaller rescission level and a higher overall appropriation level for the HCF than was actually enacted. Therefore, it is unclear how much HUD will actually have available in unobligated balances in FY2004. Both the original House and Senate bills accepted the Administration’s estimate of unobligated balances and both chose to rescind the full $1.37 billion that HUD claims to have available. However, the omnibus bill would rescind $2.84 billion in unobligated balances in FY2004. This amount is significantly higher than either the House or Senate proposed level and higher than the amount the Administration said was available. However, language in P.L. 108-199 directs the Secretary to use CRS-25 unobligated balances from other accounts if funds in the HCF are insufficient to meet the higher rescission level. Table 8 shows a breakdown of funding for the vouchers and project-based programs. Note that the last column does not include the .59% across the board rescission contained in the omnibus appropriations bill. Table 8. FY2003 and FY2004 Appropriation Levels for Vouchers and Project-based Rental Assistance ($ in billions) FY2003 FY2004 FY2004 FY2004 FY2004 enacteda request House Senate Conf. Budget authority: Vouchers/HANF New appropriations 12.604 12.535 13.757 13.611 14.548 Advance approp., prior year (4.172) (4.200) (4.200) (4.200) (4.200) Current-year appropriation (8.431) (8.335) (9.557) (9.411) (10.348) Budget authority available from unobligated balances 2.838 1.072b 1.072b 1.072b 1.072b Budget authority rescinded or not expected to be used in specified FY -2.838c 0 -1.072b -1.072b -2.844b Subtotal 12.604d 13.607e 13.757e 13.611e 14.548 Contract renewals 10.870 11.482 11.725 11.484 12.916 New incremental vouchers 0.000 0.036 0.000 0.036 0.000 Tenant protection vouchers 0.232 0.252 0.206 0.252 0.206 Administrative fees 1.065 1.192 1.209 1.339 1.242 Central reserve fund 0.389 0.473 0.569 0.425 0.136 Funds to states for HANF startup costs 0.000 0.100 0.000 0.000 0.000 Family self sufficiency coordinators 0.048 0.072 0.048 0.072 0.048 Audit Costs 0.000 0.000 0.000 0.003 0.000 Subtotal 12.604 13.607 13.757 13.611 14.548 4.507 4.823 4.823 4.823 4.823 Budget authority available from unobligated balances 0 0.300f 0.300f 0.300f 0.300f Budget authority rescinded or not expected to be used in specified 0 -0.300 -0.300 -0.300 -0.300 Breakdown: Vouchers/HANF Budget authority: Project-based rental assistance New appropriations CRS-26 FY2003 FY2004 FY2004 FY2004 FY2004 enacteda request House Senate Conf. FY Subtotal 4.507 4.823 4.823 4.823 4.823 Project based vouchers 4.309 4.720 4.720 4.720 4.720 Contract administrators 0.195 0.100 0.100 0.100 0.100 Working capital fund 0.003 0.003 0.003 0.003 0.003 Subtotal 4.507 4.823 4.823 4.823 4.823 Tenant-based and projectbased combined funding level 17.111 18.430 18.580 18.434 19.371 Breakdown: Project-based rental assistance Source: This table was prepared by the Congressional Research Service using data from the FY2003 Consolidated Appropriations Conference Report (H.Rept. 108-10), HUD FY2004 Congressional Justifications, H.Rept. 108-235, S.Rept. 108-143, and H.Rept. 108-401. a The FY2003 numbers reflect an across the board rescission of .65% enacted in FY2003. The Administration assumes a recapture of $1.072 billion in unobligated funds from HANF and has, therefore, requested an appropriation of $1.072 billion less than their actual needs; however, Congress has historically considered the actual needs as the request for new budget authority while rescinding unobligated balances. The Administration’s estimate of unobligated balances may not be accurate (see earlier discussion of unobligated balances). c In FY2003, $2.838 billion was available in unobligated balances, according to the FY2004 HUD Budget Appendix. Of this amount, Congress rescinded $1.6 billion. The FY2003 appropriations bill conference report stated that any unobligated balances in excess of the $1.6 billion necessary to meet the rescission would be available to the Secretary. However, the conferees provided more than the Secretary had requested for the HCF in FY2003, so one could assume that the Secretary would not need to use any unobligated balances in FY2003. (See earlier discussion of unobligated balances.) d This amount does not include $4.2 billion in advance appropriations provided in FY2003 for use in FY2004. The $4.2 billion provided in FY2003 for use in FY2004 is included in the next column under “advance appropriations from previous year.” e This amount does not include $4.2 billion in advance appropriations requested in FY2004 for use in FY2005. In the case of the omnibus, this amount assumes that any rescissions above $1.072 that are not available in unobligated balances in the HCF are taken from other accounts, rather than lowering the funding level available to the voucher program. f Based on the FY2004 HUD budget justification, this table allocates $300 million of the unobligated balances from the Housing Certificate Fund to the project-based rental assistance program. The Administration’s estimate of unobligated balances may not be accurate (see earlier discussion of unobligated balances). b Advance Appropriations. For the past several years, two types of appropriations have been used to fund the Housing Certificate Fund: an appropriation available in the named fiscal year; and an advance appropriation of $4.2 billion, which is not available until the next fiscal year. For example, funding for the HCF in FY2003 included: $12.9 billion in appropriations for use in FY2003; and +$ 4.2 billion in advance appropriations provided in FY2002 for use in FY2003 =$17.1 billion in available appropriations (not including unobligated balances) for the HCF in FY2003 CRS-27 Note that the $4.2 billion in advance appropriations that was provided in FY2003 for FY2004 is not included in the total for the HCF in FY2003 shown above. However, it is included in the Administration’s FY2004 anticipated budget for HANF: $ 4.8 billion in appropriations for use in FY2004 (for the project-based program); $ 8.3 billion in appropriations for use in FY2004 (for HANF); and +$ 4.2 billion in advance appropriations provided in FY2003 for use in FY2004 =$17.3 billion in available appropriations (not including unobligated balances) for HANF and the project-based rental assistance program in FY2004 The advance appropriation structure was adopted again in the FY2004 budget request. For FY2004, the Administration requested $4.2 billion in advance appropriations (to be spent in FY2005) for HANF. The House, Senate and omnibus bills also propose to maintain the advance appropriation funding structure. Public Housing Programs. The public housing program was designed to provide safe, decent and affordable housing to low-income families. While no new public housing developments have been built for many years (except through the HOPE VI program, which is discussed below), Congress continues to provide funds to maintain the existing stock of over 1.2 million units. (HUD defines “affordability” as requiring a family to pay no more than 30% of its adjusted income for rent.) Public Housing Operating Fund. The Public Housing Operating Fund provides subsidies to local PHAs for public housing operating expenses, including maintenance, utilities, and tenant and protective services. These subsidies allow PHAs to keep rents affordable for very low-income families. For FY2004, the Administration requested $3.57 billion for the Operating Fund, which is less than the $3.58 billion provided in FY2003. Of the amount requested for FY2004, $15 million would be set aside for the Resident Opportunities for Self Sufficiency (ROSS) program. The ROSS program provides residents with supportive services and assistance in becoming economically self-sufficient. H.R. 2861 would have provided $3.6 billion for the Public Housing Operating Fund, an increase over the FY2003 level and the President’s request. Of that amount, the House bill would transfer $10 million to the Department of Justice to be used for efforts to fight crime and drugs in public housing. This transfer was not proposed by the Administration. The House bill did not adopt the President’s proposal to set-aside Operating Fund dollars for the ROSS program. However, the House also proposed to set aside Capital Fund dollars for the ROSS program, as has been done in the past (see discussion below). The Senate would have provided $3.58 billion for the Operating Fund for FY2004, the same level that was provided in FY2003. As in the House bill, $10 million would be available for transfer to the Department of Justice. The Omnibus provides $3.6 billion for the Public Housing Operating Fund for FY2004, of which $10 million would be available for transfer to the Department of Justice. CRS-28 A Note About the Operating Fund Shortfall From FY2002. In FY2002, HUD did not have enough operating funds to provide full subsidies to all PHAs. HUD was short $250 million because it had been miscalculating how much it needed for the Operating Fund for several years. In past years, HUD would cover the shortfall by automatically dipping into future years’ appropriations without requesting advance approval from Congress. However, HUD was unable to automatically dip into its FY2003 appropriation to cover its FY2002 shortfall because the agency was operating under a series of short-term continuing resolutions. Instead, HUD had to ask Congress’ permission to use funds from FY2003 to cover FY2002. Congress granted HUD that permission, but Congress did not increase HUD’s FY2003 appropriation to compensate for the $250 million that was used for FY2002. Since the FY2003 Operating Fund was effectively reduced, HUD had to reduce PHAs’ operating budgets. HUD instructed PHAs to reduce their budget requests by 30%, but informed them that their budgets may be adjusted again later in the year (See HUD Notice PIH 2003-1, released in January 2003). HUD has since adjusted PHA budgets to close to 90% (a final cut of approximately 10%). A Note About Calculating Operating Subsidies. The Quality Housing and Work Responsibility Act of 1998 (P.L. 105-276) directed HUD to develop a new formula for allocating operating funds to the PHAs. However, developing this new formula is proving difficult and controversial. An interim formula-based approach for allocating operating funds was implemented in FY2001, following regulatory negotiations required by the 1998 Act. The current formula takes into account size, location, age of housing stock, occupancy and other factors intended to reflect the cost of operating a well-managed public housing development. The final report of the Public Housing Operating Cost Study was released in June 2003 [http://www.gsd.harvard.edu/research/research_centers/phocs/]. The study makes several recommendations including using FHA properties to bench-mark future operating costs and converting the existing public housing system to a property-based management structure. Since its release, the study has generated much controversy, in particular its recommendations have received some resistance from the advocacy groups who represent PHAs. HUD states that it has undertaken rule making action based on the recommendations of the study; advocacy groups and some Members of Congress are calling for the creation of a negotiated rule making committee, including advocacy groups and industry representatives, to complete work on the regulations. HUD has indicated that it would like to finalize a new formula by the end of 2003. An amendment added to the HUD funding bill on the Senate floor and included in the omnibus would require HUD to undertake negotiated rule making in implementing the new operating formula. Public Housing Capital Fund. The Public Housing Capital Fund provides money to PHAs for the rehabilitation and modernization of public housing. Regular physical maintenance ensures that these developments do not become unsafe for residents or so obsolete that they must be demolished. HUD estimates that there is a backlog of $20 billion in rehabilitation and modernization needs facing public housing and that an additional $2.2 billion in capital needs accrue annually. CRS-29 The HUD budget requested $2.64 billion for the capital fund in FY2004, less than the $2.71 billion enacted in FY2003. The justification for this cut in the face of such a large backlog was the introduction of what the Administration terms the Public Housing Reinvestment Initiative (PHRI) and Loan Guarantee. Under this proposal, HUD would consider requests from PHAs to participate in this initiative on a property-by-property basis. The program would include leveraging of private capital through a combination of loan guarantees and the conversion of public housing units to project-based voucher assistance. For loan guarantees, this proposal would set aside $131 million in public housing capital funds, which could partially guarantee (up to 80%) $1.7 billion in loans to pay for capital improvements to public housing. The conversion of public housing to project-based vouchers is designed to make PHAs seem more credit-worthy. The Administration claims that lenders will view project-based voucher funding as a more predictable stream of income than capital fund appropriations. Furthermore, the Administration thinks that converting public housing to project-based vouchers would benefit families. Families with project-based vouchers have the ability to convert their project-based vouchers to portable tenant-based vouchers after one year. Therefore, families who used to be tied to public housing but who convert to project-based and then to tenant-based vouchers, would be able to move to the housing of their choice. Legislation to enact this proposal has not been introduced in the 108th Congress. A similar proposal was offered by the Administration in FY2003, but was not adopted. Critics of the Administration’s PHRI proposal argue that many PHAs already successfully participate in private financing without converting public housing to vouchers. They are concerned that converting public housing units to vouchers would essentially privatize public housing and further deplete the nation’s stock of low-cost housing. In addition to the $131 million for the PHRI, the Administration requested the following set-asides in the Capital Fund for FY2004: $40 million for ROSS; $40 million for the emergency disaster reserve; $10 million for the working capital fund; $50 million for technical assistance; and $30 million for the demolition of obsolete public housing units. The House appropriations bill, H.R. 2861, would have provided $2.7 billion for the Capital Fund for FY2004, an amount higher than the Administration’s request and level with FY2003. The Committee rejected the Administration’s PHRI initiative, stating that many PHAs have already pursued public-private financing partnerships under existing statutory authority. The House provided for the following set-asides in the Capital Fund for FY2004: $55 million for ROSS; $40 million for emergency disaster reserve; $11 million for the working capital fund; and $51 million for technical assistance. The House did not provide a set-aside for the demolition of obsolete public housing units since they provided HOPE VI funding, which can be used for that purpose (see below). However, the House did provide for $429 million to be set aside from the CRS-30 funds available for formula allocation to be distributed to those PHAs who had obligated all of the Capital Funds they had received for FY2001 and FY2002. This “timely expenditure bonus” was included in the FY2003 appropriations bill and is designed to reward those housing authorities who are fully utilizing their Capital Fund allocations. The Senate-passed bill would provide $2.6 billion for the Capital Fund for FY2004, an amount less than the House-passed level and equal to the amount requested by the Administration. While the Senate did not adopt the Administration’s PHRI initiative, the Appropriations Committee did voice support for PHAs seeking private financing. To support their efforts, the Senate bill would establish a new public housing development loan guarantee program. The bill would allow the Secretary to make $125 million of the Capital Fund available for a loan loss reserve and other purposes implementing the loan guarantee. In addition to the loan guarantee set-aside, the Senate bill would set aside $400 million to provide timely expenditure bonuses. The Omnibus bill would provide $2.7 billion for the Capital Fund for FY2004. The bill does not accept the PHRI initiative, noting in report language that 92 PHAs already successfully leverage private funds. P.L. 108-199 also does not include the timely obligation set aside, noting that HUD has now implemented the provisions of a previous public housing reform bill (P.L. 105-276) that reward PHAs for timely expenditure and penalize them for slow expenditure. HOPE VI Revitalization of Distressed Public Housing. The HOPE VI program funds the demolition and revitalization of deteriorated and distressed public housing. Since the inception of the HOPE VI program, HUD has approved the demolition of approximately 115,000 units of distressed public housing and the creation of over 66,000 rental and homeowner units. New housing created by HOPE VI must have a mixed-income tenancy — the poor, the not quite so poor, and some moderate-income households — in an effort to change the culture and eliminate the stigma of public housing. Authorization for the program ended at the end of FY2002; it was extended in FY2003 through the end of FY2004. The House Financial Services Committee passed H.R. 1614 to revise and reauthorize the HOPE VI program through FY2005. A Senate bill with HOPE VI provisions similar to H.R. 1614 (S. 811), passed the Senate on November 24, 2003. For FY2004, the Administration requested no new funding for the HOPE VI program, which was funded at $570 million in FY2003. The Administration argued that the program does not need new funding for two reasons. First, the program’s goals — namely the demolition of the nation’s worst public housing — have largely been accomplished. Second, the program has some problem areas. One major problem with the HOPE VI program is the amount of time it takes to complete a project. Of the 195 projects funded since 1992, only 16 are completed and only half of the obligated funds have been spent. Another problem with the HOPE VI program is the displacement of former residents. Few families whose units have been demolished under HOPE VI come back to live in the revitalized housing and little is known about what happens to them. CRS-31 Despite these concerns, the HOPE VI program is one of the most popular programs under HUD’s jurisdiction. Many advocacy groups and Members of Congress have spoken out on behalf of the program. They argue that need for the program is still great and that instead of ending the program, HUD should work with Congress to improve it so that it can continue to transform the most distressed public housing in the nation. The House bill would provide $50 million for the HOPE VI program, $5 million of which would be available for technical assistance. The Senate would provide $195 million for HOPE VI, $3 million of which would be available for technical assistance. P.L. 108-199, the Omnibus appropriations bill, would provide $150 million for HOPE VI — $4 million of which would be for technical assistance. Native American Block Grants. This block grant program provides tribes or tribally designated housing entities with a flexible source of funding for low-cost housing and related activities. As provided in the Native American Housing Assistance and Self-Determination Act (P.L. 104-330), block grant funds may be used for a wide range of homeownership and rental activities. The Administration’s FY2004 budget requested $646.6 million, about $2 million more than enacted in FY2003. With unemployment that usually far exceeds the national average in many Indian and Native communities, the Senate Appropriations Committee report for FY2003 (S.Rept. 107-222) directed HUD and its grantees to give primary consideration to qualified Native owned firms in the design and construction of Indian housing. The House bill recommended $661.6 million for FY2004, an increase of $15 million above HUD’s request and $16.8 million more than provided in FY2003. The Senate approved $646.6 million, the same as the budget request. The Senate bill, however, directed that each grant recipient receive the same percentage of funding as was received in FY2003. The Omnibus appropriates $654.1 million. HUD is directed to submit a report by December 15, 2004 on the extent of black mold infestation of Native American housing, and recommendations to address this problem. Community Planning and Development Housing for Persons with AIDS (HOPWA). The President requested $297 million for the HOPWA program for FY2004, up from the $290 million enacted in FY2003. The House bill would fund HOPWA at $302 million, $5 million above the President’s requested level. This increase was added on the House floor and was offset by a reduction in National Science Foundation funding. The Senate bill would provide $291 million, less than the President’s request and the House-passed level. P.L. 108-199, the Omnibus appropriations bill, would provide $297 million for HOPWA. HOPWA provides housing assistance and related supportive services for low-income persons with HIV/AIDS and their families. Funding is distributed both by formula allocation and competitive grants to states, localities and nonprofit CRS-32 organizations. HOPWA funds may be used for housing information services, resource identification to establish and coordinate housing assistance resources, to acquire, rehabilitate or lease housing and services, to construct single room occupancy dwelling and community residences, for rental assistance and for short-term rental assistance. Funds may also be used for mortgage or utility payments to prevent homelessness of a tenant or mortgagor and for supportive services including health, mental health, drug and alcohol abuse treatment and counseling, day care, nutritional services and assistance in gaining access to local, state and federal government benefits. For more information on HOPWA, see CRS Report RS20704, Housing Opportunities for Persons with AIDS (HOPWA). Rural Housing and Economic Development.The FY1999 HUD Appropriations Act (P.L. 105-276) established within HUD an Office of Rural Housing and Economic Development to support housing and economic development in rural areas. Congress provided $25 million in each of FY2001 and FY2002, and just short of $25 million in FY2003. However, the Administration did not request funds in FY2002 and FY2003, and did not do so for FY2004, arguing that many of the agency’s core programs, such as CDBG, already serve rural communities, and because other Departments like the U.S. Department of Agriculture have very large and effective programs already in place to address rural housing and economic development issues. However, both the House and Senate Appropriations Committees have continued to appropriate funds in recent years, believing that this housing program is sufficiently different from Department of Agriculture programs to merit separate appropriations. H.R. 2861 proposed $25 million for the Rural Housing and Economic Development program for FY2004, requiring that HUD award funds for this program by June 30, 2004. The Senate also recommended $25 million. The Omnibus also appropriates $25 million, requiring that HUD award funds competitively, as proposed by the House. Empowerment Zones and Enterprise Communities. Spend-outs have been much slower than projected for these programs. The Administration proposed no funding for Empowerment Zones/Enterprise Communities (EZs/ECs) for FY2003 (although Congress appropriated close to $30 million) and proposed no funding for FY2004, concluding that this program has not been sufficiently effective. This federal initiative is an interagency effort to promote economic development and community revitalization in distressed areas, by directing tax relief and federal funds to designated EZs and ECs. EZs and ECs are eligible for a variety of tax credits and other incentives intended to stimulate investment, economic growth, and revitalization activities. Grants are used for activities that assist residents and businesses, including workforce preparation and job creation efforts linked to welfare reform; neighborhood development; support for financing capital projects; financing of projects in conjunction with Section 108 loans or other economic development projects. Funds are also used for rental assistance and other housing assistance. CRS-33 To date, there have been three rounds of EZ/EC designations. In the first round, nine communities (six urban and three rural) were designated as Empowerment Zones; and 95 communities were named as Enterprise Communities. Twenty new Empowerment Zones — 15 urban and five rural — were designated in the Round II competition, along with 20 new Enterprise Communities, all rural. The Community Renewal Tax Relief Act of 2000 (P.L. 106-554) authorized the designation of 40 renewal communities (28 urban and 12 rural) and nine new Round III Empowerment Zones (seven urban, two rural) designated on December 21, 2001, which utilize only tax incentive provisions. In FY2002, $45 million was approved for urban EZs — $3 million each for the 15 Round II zones designated by HUD. The Administration’s FY2003 budget proposed no funding for Round II Empowerment Zones because after four years of funding, major balances of unused funds had been built up. To help develop the economies of distressed urban and rural areas, HUD has recently designated 40 Renewal Communities (RZs) and seven additional Round II urban Empowerment Zones. Private investors in both RZ and EZ areas are eligible for tax benefits over the next 10 years tied to the expansion of job opportunities in these locations. P.L. 108-7 included $30 million for Round II EZ-designated communities with $2 million allocated to each of the 15 empowerment zone communities. Both the Senate and House recommended an appropriation of $30 million for this program for FY2003, $15 million less than enacted for FY2002 and $30 million more than the President’s budget requested. The conference report argued that, consistent with Round I empowerment zone funding, this program should be classified as mandatory spending rather than an obligation of the VA-HUD appropriations bill. During its consideration of the bill, the Senate Appropriations Committee also expressed concern over accountability in this program and noted that the HUD Inspector General has been critical about how communities have implemented this program and used EZ funds. The House-passed bill, H.R. 2861, recommended $15 million for FY2004 for continued grant funding for the 15 urban Round II EZ/ECs. The Senate did not included funding for the program for FY2004 while the conference agreement appropriates $15 million for Round II EZ\ECs. The omnibus conference agreement directs HUD to implement the recommendations resulting from the HUD Inspector General’s audit of Round II recipients and to provide a status report to Congress no later than March 1, 2004. Community Development Block Grants. The Community Development Block Grant (CDBG) program is the largest source of federal financial assistance in support of state and local governments’ community development and neighborhood revitalization activities. The program was first authorized by Congress under Title I of the Housing and Community Development Act of 1974, P.L. 93-383, and now stands as the federal government’s longest running block grant.3 3 42 U.S.C. 5301 CRS-34 During its 29-year history, the program has undergone some changes, but its structure and focus have remained essentially unchanged. The program promotes local decision making in the development of community development plans intended to principally benefit low- or moderate-income persons, aid in preventing or eliminating slums and blight, or meeting urgent needs threatening the health and safety of the public. CDBG funds are allocated by formula to 1,082 entitlement communities, states, and the Commonwealth of Puerto Rico. After funds are set aside to fund a number of related categorical programs, 70% of the remaining funds appropriated are allocated by formula to CDBG entitlement communities while states share the remaining 30%. FY2004 Funding Proposal. The Bush Administration’s FY2004 budget proposed $4.716 billion for the Community Development Fund (CDF), which includes CDBG formula grants to states and entitlement communities and related programs. The Bush Administration’s budget request included $280 million for program set-asides, and $4.436 billion in CDBG formula-based grants to entitlement communities and states. The Administration’s budget request proposed an increase in the formula-based portion of the program by $96.5 million for FY2004. The Administration also recommended the conversion o f Section 107 funding for insular areas into a formula-based allocation. The Administration’s budget did not include funding for Neighborhood Initiative or Economic Development Initiative grants, two categorical programs that recently have been used exclusively to fund congressionally earmarked projects. Within the context of HUD’s total budget request for FY2004, the Administration sought to allocate 15% ($4.7 billion) of the HUD proposed $31.1 billion budget to programs funded under the CDF account. Within the CDF account, CDBG formula grants to the states and entitlement communities would account for 93.6% of the CDF budget request while set-asides and earmarks would account for 6.4% of the request. The Administration also requested $16 million in funding for its Colonias Gateway Initiative (CGI), a proposal that was first included in its FY2003 budget request within the Community Development Fund but was proposed for FY2004 as a separate program. This southwest regional initiative would have targeted assistance to communities in Texas, New Mexico, Arizona, and California within 150 miles of the border with Mexico. Funds would be used for housing, infrastructure, and economic development projects in these distressed areas. The following table provides a breakdown of the actual FY2003 appropriations and the Administration’s FY2004 proposed budget request for the CDF account and the recommendations of the House as outlined in H.R. 2861 and the accompanying H.Rept. 108-235, the Senate as outlined in S. 1584. and the accompanying S.Rept. 108-143, and the conference committee as outlined in H.R. 2673 and the accompanying conference report (H.Rept. 108-401). CRS-35 Table 9. Community Development Fund Appropriations, CDBG and Related Set Asides: FY2003-FY2004 (funding in millions) FY2003 Programs and set-asides FY2004 enacted request House Senate Conf. Subtotals: Set-asides (see below for details) Formula-based (entitle. communities) Insular areas Formula-based (state allocation) 565.4 280.0 420.4 404.3 593.5 3,037.6 3,100.3 3,177.0 3,181.9 3,049.6 0.0 7.0 0.0 0.0 0.0 1,301.9 1,328.7 1,361.6 1,363.7 1,306.9 Set-asides: Indian Tribes 70.5 72.5 72.0 72.5 72.0 Housing Assistance Council 3.3 3.0 3.3 3.3 3.3 Nat’l American Indian Housing Council 2.4 2.2 2.4 2.6 2.5 Nat’l Housing Development Corporation 5.0 0.0 5.0 0.0 5.0 - Operating expenses (2.0) (0.0) (2.0) 0.0 (2.0) 5.0 0.0 5.0 0.0 5.0 - Technical assistance (0.5) (0.0) (0.5) 0.0 (0.5) - HOPE Fund, other activities (4.5) (0.0) (4.5) 0.0 (4.5) 48.8 37.9 43.0 52.5 52.0 Insular areas (7.0) (0.0a) (7.0) (7.0) (7.0) Prog. management and analysis (0.0) (3.0) (0.0) (0.0) (0.0) Technical assistance (0.0) (0.0) (0.0) (0.0) (1.5) Native Hawaiian Hous. Block Grant (9.5) (0.0) (9.5) (10.0) (9.5) University Programs (32.3) (31.9) (26.5) (34.5) (36.0) Historically Black Coll. & Univ. (9.9) (10.0) (10.0) (11.0) (10.5) - HBCU technical assistance 0.0 (3.0) (2.0) (2.0) (2.0 ) Hispanic Serving Institutions (6.4) (5.5) (6.5) (7.5) (7.0) Community Develop. Work Study (3.0) (3.0) (3.0) (3.0) (3.0) Alaskan Native and Native Hawaiian Serving Institutions (3.0) (2.4) (0.0) (4.0) (3.5) Tribal Colleges and Universities (3.0) (3.0) (0.0) (3.0) (3.0) Community Outreach Partnership Working Capital Fund, develop. of information technology systems Wellstone Ctr. for Community Building (7.0) (8.0) (7.0) (4.0) (7.0) 3.4 8.9 4.9 0.0 4.9 0.0 0.0 0.0 0.0 0.0 Self-Help Homeownership Opportunity 25.1 65.0 28.0 12.0 27.0 Nat’l Council of La Raza HOPE Fund Section 107 CRS-36 FY2003 Programs and set-asides FY2004 enacted request House Senate - Capacity building Conf. (0.0) (3.0) (0.0) (0.0 (0.0 28.1 25.0 33.2 35.5 34.8 (23.1) (20.0) (28.2) (31.5) (30.0) (5.0) (5.0) (5.0) 5.0 5.0 4.2 4.5 5.0 (4.0) (4.8) (0.0) (0.0) (0.7) (0.0) (0.6) Neighborhood Initiative Demonstration 41.8 0.0 21.0 21.0 44.0 Youthbuild 59.6 65.0 65.0 60.0 65.0 - Rural and underserved areas (10.0) (10.0) (10.0) (10.0) (10.0) - USA capacity building (2.0) (2.0) (2.0) (2.0) (2.0) Economic Development Initiative 259.3 0.0 137.5 140.0 278.0 Capacity Building for Community Development and Affordable Housing Nat’l Comm. Devel. Initiative (NCDI)b - Rural area and tribal lands c Habitat for Humanity - Indian tribes SHOP Total: CDF, CDBG 4,904.9 4,716.0 4,959.0 4,950.0 4,950.0 Source: H.Rept. 108-401 Note: Totals may not add due to rounding. Amounts do not include effects of the .59% across-theboard reduction in most discretionary accounts, as called for in P.L. 108-199. Italics indicates entries subsumed under CDBG line in Table 6; parenthesis indicates entry subsumed in this table under summary line immediately above. a Insular areas would be included in formula portion of the CDBG program and would not be included as a set aside under Section 107 (Special Purpose Grants). b Includes funding for the Enterprise Foundation and the Local Initiative Support Corporation in support of local community development corporations. c For FY2003, $5 million of NCDI program funds were set-aside for rural areas and tribal lands, and similar treatment was proposed in the FY2004 request and in the House bill. Conferees adopted the Senate recommendation that the $5 million be specified separately. H.R. 2861, as passed by the House on July 25, 2003, recommended a total CDF appropriation of $4.959 billion, including $4.539 billion for the formula portion of the CDBG program, and $420.4 million in set-asides and earmarks. The House bill included $137.5 million in earmarked funds under the Economic Development Initiative, which represents 32.7% of the funds targeted for earmarks and set-asides. In addition, the House [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3ARL31804. Public record. Not legal advice.