Public Law 100-296, 102 Stat. 129
Whereas more than nine million individuals in the United States
suffer traumatic injury each year;
Whereas traumatic injury is the leading cause of death of individuals
of less than forty years of age in the United States;
Whereas every individual is a potential victim of traumatic injury;
Whereas traumatic injury can occur without warning;
Whereas traumatic injury frequently renders its victims incapable of
caring for themselves;
Whereas past inattention to the causes and effects of trauma has led
to the inclusion of trauma among the most neglected medical conditions;
Whereas the people of the United States spend more than
$100,000,000,000 annually on the problem of trauma;
Whereas the problem of trauma can be remedied only by prevention and
treatment; and
Whereas the people of the United States should be educated in the
prevention and treatment of trauma: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That May 1988 is designated as
"National Trauma Awareness Month", and the President of the United
States is authorized and requested to issue a proclamation calling upon
the people of the United States to observe the month with appropriate
ceremonies and activities.
Approved April 26, 1988.
LEGISLATIVE HISTORY - H.J. Res. 373 (S.J. Res. 199):
CONGRESSIONAL RECORD, VOl. 134 (1988): Feb. 26, S.J. Res. 199
considered and passed Senate. Apr. 12, H.J. Res. 373 considered and
passed House. Apr. 14, considered and passed Senate.
Public Law 100-295, 102 Stat. 127
the placement of one of such plaques at Fort Christina
in the State of Delaware.
Whereas, in Public Law 99-304 (100 Stat. 439), the Congress
designated 1988 as the "Year of New Sweden" to commemorate the 350th
anniversary of the arrival of the first Swedish settlers in North
America;
Whereas such Swedish settlers sailed abroard the Calmare Nyckel,
established New Sweden as their first settlement in North America in
what is now Wilmington, Delaware, and built Fort Christina to defend
their settlement;
Whereas Fort Christina is designated as a National Historic Landmark
and will be the site of several activities to observe the "Year of New
Sweden";
Whereas, as part of the celebration of the "Year of New Sweden", the
artists Margareta Hennix and Ginvanni Bizzini, together with the House
of Gustavsberg in Gustavsberg, Sweden, created a limited number of
identical plaques depicting the Calmare Nyckel;
Whereas such plaques are painted in silver and bear the seal of His
Majesty Carl Gustaf XVI, the King of Sweden; and
Whereas a part of the proceeds from the sale of such plaques will be
donated to charities that help the handicapped: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. RECOGNITION OF CALMARE NYCKEL PLAQUES.
The identical plaques initiated by Sami Bandak, created by Margareta
Hennix and Ginvanni Bizzini (together with the House of Gustavsberg),
and depicting the Calmare Nyckle, the ship that brought the first
Swedish settlers to North America, are hereby recognized as significant
symbols of the "Year of New Sweden".
SEC. 2. ACCEPTANCE AND PLACEMENT OF PLAQUE.
The Secretary of the Interior shall --
(1) accept as a gift from Sami Bandak on behalf of the House of
Gustavsberg one of the plaques referred to in section 1, and
(2) with the consent of the owner of Fort Christina in the
State of Delaware, place such plaque at such site to commemorate
the 350th anniversary of the establishment of New Sweden.
Approved April 25, 1988.
LEGISLATIVE HISTORY -- H.J. Res. 347:
CONGRESSIONAL RECORD, Vol. 134 (1988): Apr. 12, considered and
passed House. Apr. 14, considered and passed Senate.
Public Law 100-294, 102 Stat. 102
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. "42 USC 5101 note" SHORT TITLE.
This Act may be referred to as the "Child Abuse Prevention, Adoption,
and Family Services Act of 1988".
SEC. 101. AMENDMENT TO THE CHILD ABUSE PREVENTION AND TREATMENT ACT.
The Child Abuse Prevention and Treatment Act (42 U.S.C. 5101 et seq.)
is amended to read as follows:
"SECTION 1. '42 USC 5101 note" SHORT TITLE AND TABLE OF CONTENTS.
"(a) SHORT TITLE. -- This Act may be cited as the 'Child Abuse
Prevention and Treatment Act'.
"(b) TABLE OF CONTENTS. -- The table of contents is as follows:
"Sec. 1. Short title and table of contents.
"Sec. 2. National Center on Child Abuse and Neglect.
"Sec. 3. Advisory Board on Child Abuse and Neglect.
"Sec. 4. Inter-Agency Task Force on Child Abuse and Neglect.
"Sec. 5. National clearinghouse for information relating to child
abuse.
"Sec. 6. Research and assistance activities of the National Center
on Child Abuse and Neglect.
"Sec. 7. Grants to public agencies and nonprofit private
organizations for demonstration or service programs and projects.
"Sec. 8. Grants to States for child abuse and neglect prevention and
treatment programs.
"Sec. 9. Technical assistance to States for child abuse prevention
and treatment programs.
"Sec. 10. Grants to States for programs relating to the
investigation and prosecution of child abuse cases.
"Sec. 11. Miscellaneous requirements relating to assistance.
"Sec. 12. Coordination of child abuse and neglect programs.
"Sec. 13. Reports.
"Sec. 14. Definitions.
"Sec. 15. Authorization of appropriations.
"SEC. 2. "42 USC 5101" NATIONAL CENTER ON CHILD ABUSE AND NEGLECT.
"(a) ESTABLISHMENT. -- The Secretary of Health and Human Services
shall establish an office to be known as the National Center on Child
Abuse and Neglect.
"(b) APPOINTMENT OF DIRECTOR. --
"(1) APPOINTMENT. -- The Secretary shall appoint a Director of
the Center. Except as otherwise provided in this Act, the
Director shall be responsibile only for administration and
operation of the Center and for carrying out the functions of the
Center under this Act. The Director shall have experience in the
field of child abuse and neglect.
"(2) COMPENSATION. -- The Director shall be compensated at the
annual rate provided for a level GS-15 employee under section 5332
of title 5, United States Code.
"(c) OTHER STAFF AND RESOURCES. -- The Secretary shall make
available to the Center such staff and resources as are necessary for
the Center to carry out effectively its functions under this Act. The
Secretary shall require that professional staff have experience relating
to child abuse and neglect. The Secretary is required to justify, based
on the priorities and needs of the Center, the hiring of any
professional staff member who does not have experience relating to child
abuse and neglect.
"SEC. 3. "42 USC 4102" ADVISORY BOARD ON CHILD ABUSE AND NEGLECT.
"(a) APPOINTMENT. -- The Secretary shall appoint an advisory board
to be known as the Advisory Board on Child Abuse and Neglect.
"(b) SOLICITATION OF NOMINATIONS. -- The Secretary shall publish a
notice in the Federal Register soliciting nominations for the
appointments required by subsection (a).
"(c) COMPOSITION OF BOARD. --
"(1) NUMBER OF MEMBERS. -- The board shall consist of 15
members, each of which shall be a person who is recognized for
expertise in an aspect of the area of child abuse, of which --
"(A) 2 shall be members of the task force established under
section 4; and
"(B) 13 shall be members of the general public and may not be
Federal employees.
"(2) REPRESENTATION. -- The Secretary shall appoint members
from the general public under paragraph (1)(B) who are individuals
knowledgeable in child abuse and neglect prevention, intervention,
treatment, or research, and with due consideration to
representation of ethnic or racial minorities and diverse
geographic areas, and who represent --
"(A) law (including the judiciary);
"(B) psychology (including child development);
"(C) social services (including child protective services);
"(D) medicine (including pediatrics);
"(E) State and local government;
"(F) organizations providing services to disabled persons;
"(G) organizations providing services to adolescents;
"(H) teachers;
"(I) parent self-help organizations;
"(J) parents' groups; and
"(K) voluntary groups.
"(3) TERMS OF OFFICE. -- (A) Except as otherwise provided in
this subsection, members shall be appointed for terms of office of
4 years.
"(B) Of the members of the board from the general public first
appointed under subsection (a) --
"(i) 4 shall be appointed for terms of office of 2 years;
"(ii) 4 shall be appointed for terms of office of 3 years; and
"(iii) 5 shall be appointed for terms of office of 4 years, as
determined by the members from the general public during the first
meeting of the board.
"(C) No member of the board appointed under subsection (a)
shall be eligible to serve in excess of two consecutive terms, but
may continue to serve until such member's successor is appointed.
"(4) VACANCIES. -- Any member of the board appointed under
subsection (a) to fill a vacancy occurring before the expiration
of the term to which such member's predecessor was appointed shall
be appointed for the remainder of such term. If the vacancy
occurs prior to the expiration of the term of a member of the
board appointed under subsection (a), a replacement shall be
appointed in the same manner in which the original appointment was
made.
"(5) REMOVAL. -- No member of the board may be removed during
the term of office of such member except for just and sufficient
cause.
"(d) ELECTION OF OFFICERS. -- The board shall elect a chairperson
and vice-chairperson at its first meeting from among the members from
the general public.
"(e) MEETINGS. -- The board shall meet not less than twice a year at
the call of the chairperson. The chairperson, to the maximum extent
practicable, shall coordinate meetings of the board with receipt of
reports from the taskforce under section 4(f).
"(f) DUTIES. -- The board shall --
"(1) annually submit to the Secretary and the appropriate
committees of Congress a report containing --
"(A) recommendations on coordinating Federal child abuse and
neglect activities to prevent duplication and ensure efficient
allocations of resources and program effectiveness; and
"(B) recommendations as to carrying out the purposes of this
Act;
"(2) annually submit to the Secretary and the Director a report
containing long-term and short-term recommendations on --
"(A) programs;
"(B) research;
"(C) grant and contract needs;
"(D) areas of unmet needs; and
"(E) areas to which the Secretary should provide grant and
contract priorities under sections 6 and 7; and
"(3) annually review the budget of the Center and submit to the
Director a report concerning such review.
"(g) COMPENSATION. --
"(1) IN GENERAL. -- Except as provided in paragraph (3),
members of the board, other than those regularly employed by the
Federal Government, while serving on business of the board, may
receive compensation at a rate not in excess of the daily
equivalent payable to a GS-18 employee under section 5332 of title
5, United States Code, including traveltime.
"(2) TRAVEL. -- Except as provided in paragraph (3), members
of the board, while serving on business of the board away from
their homes or regular places of business, may be allowed travel
expenses (including per diem in lieu of subsistence) as authorized
by section 5703 of title 5, United States Code, for persons in the
Government service employed intermittently.
"(3) RESTRICTION. -- The Director may not compensate a member
of the board under this section if the member is receiving
compensation or travel expenses from another source while serving
on business of the board.
"SEC. 4. (42 USC 5103" INTER-AGENCY TASK FORCE ON CHILD ABUSE AND
NEGLECT.
"(a) ESTABLISHMENT. -- The Secretary shall establish a task force to
be known as the Inter-Agency Task Force on Child Abuse and Neglect.
"(b) COMPOSITION. -- The Secretary shall request representation for
the task force from Federal agencies with responsibility for programs
and activities related to child abuse and neglect.
"(c) CHAIRPERSON. -- The task force shall be chaired by the
Director.
"(d) DUTIES. -- The task force shall --
"(1) coordinate Federal efforts with respect to child abuse
prevention and treatment programs;
"(2) encourage the development by other Federal agencies of
activities relating to child abuse prevention and treatment;
"(3) coordinate the use of grants received under this Act with
the use of grants received under other programs;
"(4) prepare a comprehensive plan for coordinating the goals,
objectives, and activities of all Federal agencies and
organizations which have responsibilities for programs and
activities related to child abuse and neglect, and submit such
plan to such Advisory Board not later than 12 months after the
date of enactment of the Child Abuse Prevention, Adoption, and
Family Services Act of 1988; and
"(5) coordinate adoption related activities, develop Federal
standards with respect to adoption activities under this Act, and
prevent duplication with respect to the allocation of resources to
adoption activities.
"(e) MEETINGS. -- The task force shall meet not less than three
times annually at the call of the chairperson.
"(f) REPORTS. -- The task force shall report not less than twice
annually to the Center and the Board.
"SEC. 5. "42 USC 5104" NATIONAL CLEARINGHOUSE FOR INFORMATION
RELATING TO CHILD ABUSE.
"(a) ESTABLISHMENT. -- Before the end of the 2-year period beginning
on the date of the enactment of the Child Abuse Prevention, Adoption,
and Family Services Act of 1988, the Secretary shall through the Center,
or by contract by no less than 3 years duration let through a
competition, establish a national clearinghouse for information relating
to child abuse.
"(b) FUNCTIONS. -- The Director shall, through the clearinghouse
established by subsection (a) --
"(1) maintain, coordinate, and disseminate information on all
programs, including private programs, that show promise of success
with respect to the prevention, identification, and treatment of
child abuse and neglect, including the information provided by the
National Center for Child Abuse and Neglect under section 6(b);
and
"(2) maintain and disseminate information relating to --
"(A) the incidence of cases of child abuse and neglect in the
general population;
"(B) the incidence of such cases in populations determined by
the Secretary under section 105(a)(1);
"(C) the incidence of any such cases related to alcohol or drug
abuse; and
"(D) State and local recordkeeping with respect to such cases.
"(c) COORDINATION WITH AVAILABLE RESOURCES. -- In establishing a
national clearinghouse as required by subsection (a), the Director shall
--
"(1) consult with other Federal agencies that operate similar
clearinghouses;
"(2) consult with the head of each agency that is represented
on the task force on the development of the components for
information collection and management of such clearinhouse;
"(3) develop a Federal data system involving the elements under
subsection (b) which, to the extent practicable, coordinates
existing State, regional, and local data systems; and
"(4) solicit public comment on the components of such
clearinghouse.
"SEC. 6. "42 USC 5105" RESEARCH AND ASSISTANCE ACTIVITIES OF THE
NATIONAL CENTER ON CHILD ABUSE AND NEGLECT.
"(a) RESEARCH. --
"(1) TOPICS. -- The Secretary shall, through the Center,
conduct research on --
"(A) the causes, prevention, identification, and treatment of
child abuse and neglect;
"(B) appropriate and effective investigative, administrative,
and judicial procedures with respect to cases of child abuse; and
"(C) the national incidence of child abuse and neglect,
including --
"(i) the extent to which incidents of child abuse are
increasing or decreasing in number and severity;
"(ii) the relationship of child abuse and neglect to nonpayment
of child support, handicaps, and various other factors; and
"(iii) the incidence of substantiated reported child abuse
cases that result in civil child protection proceedings or
criminal proceedings, including the number of such cases with
respect to which the court makes a finding that abuse or neglect
exists and the disposition of such cases.
"(2) PRIORITIES. -- (A) The Secretary shall establish research
and demonstration priorities for making grants or contracts for
purposes of carrying out paragraph (1)(A) and activities under
section 7.
"(B) In establishing research and demonstration priorities as
required by subparagraph (A), the Secretary shall --
"(i) publish proposed priorities in the Federal Register for
public comment; and
"(ii) allow not less than 60 days for public comment on such
proposed priorities.
"(b) PUBLICATION AND DISSEMINATION OF INFORMATION. -- The Secretary
shall, through the Center --
"(1) as a part of research activities establish a national data
collection and analysis program, which, to the extent practical,
coordinates existing State child abuse and neglect reports and
which shall include --
"(A) standardized data on false, unfounded, or unsubstantiated
reports; and
"(B) information on the number of deaths due to child abuse and
neglect;
"(2) annually compile and analyze research on child abuse and
neglect and publish a summary of such research;
"(3) compile, evaluate, publish, and disseminate to the States
and to the clearinghouse, established under section 5, materials
and information designed to assist the States in developing,
establishing, and operating the programs described in section 10,
including an evaluation of --
"(A) various methods and procedures for the investigation and
prosecution of child physical and sexual abuse cases; and
"(B) resultant psychological trauma to the child victim;
"(4) compile, publish, and disseminate training materials --
"(A) for persons who are engaged in or intend to engage in the
prevention, identification, and treatment of child abuse and
neglect; and
"(B) to appropriate State and local officials to assist in
training law enforcement, legal, judicial, medical, mental health,
and child welfare personnel in appropriate methods of interacting
during investigative, administrative, and judicial proceedings
with children who have been subjected to abuse; and
"(5) establish model information collection systems, in
consultation with appropriate State and local agencies and
professionals.
"(c) PROVISION OF TECHNICAL ASSISTANCE. -- The Secretary shall,
through the Center, provide technical assistance to public and nonprofit
private agencies and organizations, including disability organizations
and persons who work with children with handicaps, to assist such
agencies and organizations in planning, improving, developing, and
carrying out programs and activities relating to the prevention,
identification, and treatment of child abuse and neglect.
"(d) AUTHORITY TO MAKE GRANTS OR ENTER INTO CONTRACTS. --
"(1) IN GENERAL. -- The functions of the Secretary under this
section may be carried out either directly or through grant or
contract.
"(2) DURATION. -- Grants under this section shall be made for
periods of not more than 5 years. The Secretary shall review each
such grant at least annually, utilizing peer review mechanisms to
assure the quality and progress of research conducted under such
grant.
"(3) PREFERENCE FOR LONG-TERM STUDIES. -- In making grants for
purposes of conducting research under subsection (a), the
Secretary shall give special consideration to applications for
long-term projects.
"(e) PEER REVIEW FOR GRANTS. --
"(1) ESTABLISHMENT OF PEER REVIEW PROCESS. -- (A) The
Secretary shall establish a formal peer review process for
purposes of evaluating applications for grants and contracts under
this section and determining the relative merits of the projects
for which such assistance is requested.
"(B) Members of peer review panels shall be appointed by the
Secretary from among individuals who are not officers or employees
of the Office of Human Development Services. In making
appointments to such panels, the Secretary shall include only
experts in the field of child abuse and neglect.
"(2) REVIEW OF APPLICATIONS FOR ASSISTANCE. -- Each peer
review panel established under paragraph (1)(A) that reviews any
application for a grant, contract, or other financial assistance
shall --
"(A) determine the merit of each project described in such
application; and
"(B) rank such application with respect to all other
applications it reviews in the same priority area for the fiscal
year involved, according to the relative merit of all of the
projects that are described in such application and for which
financial assistance is requested.
"(3) NOTICE OF APPROVAL. -- (A) At the end of each application
process, the Secretary shall make available upon request, no later
than 14 days after the request, to the Committee on Education and
Labor of the House of Representatives and the Committee on Labor
and Human Resources of the Senate the list which identifies all
applications reviewed by such panel and arranges such applications
according to rank determined under paragraph (2) and a list of all
applications funded.
"(B) In the instance in which the Secretary approves an
application for a program without having approved all applications
ranked above such application (as determined under subsection
(e)(2)(B)), the Secretary shall append to the approved application
a detailed explanation of the reasons relied on for approving the
application and for failing to approve each pending application
that is superior in merit, as indicated on the list under
subsection (e)(2)(B).
"SEC. 7. "42 USC 5106" GRANTS TO PUBLIC AGENCIES AND NONPROFIT
PRIVATE ORGANIZATIONS FOR DEMONSTRATION OR SERVICE PROGRAMS AND
PROJECTS.
"(a) GENERAL AUTHORITY. -- The Secretary, through the Center, shall,
in accordance with subsections (b) and (c), make grants to, and enter
into contracts with, public agencies or nonprofit private organizations
(or combinations of such agencies or organizations) for demonstration or
service programs and projects designed to prevent, identify, and treat
child abuse and neglect.
"(b) GRANTS FOR RESOURCE CENTERS. -- The Secretary shall, directly
or through grants or contracts with public or private nonprofit
organizations under this section, provide for the establishment of
resource centers --
"(1) serving defined geographic areas;
"(2) staffed by multidisciplinary teams of personnel trained in
the prevention, identification, and treatment of child abuse and
neglect; and
"(3) providing advice and consultation to individuals,
agencies, and organizations which request such services.
"(c) DISCRETIONARY GRANTS. -- In addition to grants or contracts
made under subsection (b), grants or contracts under this section may be
used for the following:
"(1) Training programs --
"(A) for professional and paraprofessional personnel in the
fields of medicine, law, education, social work, and other
relevant fields who are engaged in, or intend to work in, the
field of prevention, identification, and treatment of child abuse
and neglect; or
"(B) to provide instruction in methods of protecting children
from child abuse and neglect to children and to persons
responsible for the welfare of children, including parents of and
persons who work with children with handicaps.
"(2) Such other innovative programs and projects as the
Secretary may approve, including programs and projects for parent
self-help, for prevention and treatment of alcohol and
drug-related child abuse and neglect, and for home health visitor
programs designed to reach parents of children in populations in
which risk is high, that show promise of successfully preventing
and treating cases of child abuse and neglect, and for a parent
self-help program of demonstrated effectiveness which is national
in scope.
"(3) Projects which provide educational identification,
prevention, and treatment services in cooperation with preschool
and elementary and secondary schools.
"(4) Respite and crisis nursery programs provided by
community-based organizations under the direction and supervision
of hospitals.
"(5) Respite and crisis nursery programs provided by
community-based organizations.
"(6)(A) Providing hospital-based information and referral
services to --
"(i) parents of children with handicaps; and
"(ii) children who have been neglected or abused and their
parents.
"(B) Except as provided in subparagraph (C)(iii), services
provided under a grant received under this paragraph shall be
provided at the hospital involved --
"(i) upon the birth or admission of a handicapped child; and
"(ii) upon the treatment of a child for abuse or neglect.
"(C) Services, as determined as appropriate by the grantee,
provided under a grant received under this paragraph shall be
hospital-based and shall consist of --
"(i) the provision of notice to parents that information
relating to community services is available;
"(ii) the provision of appropriate information to parents of a
child with handicaps regarding resources in the community,
particularly parent training resources, that will assist such
parents in caring for their child;
"(iii) the provision of appropriate information to parents of a
child who has been neglected or abused regarding resources in the
community, particularly parent training resources, that will
assist such parents in caring for their child and reduce the
possibility of abuse or neglect;
"(iv) the provision of appropriate follow-up services to
parents of a child described in subparagraph (B) after the child
has left the hospital; and
"(v) where necessary, assistance in coordination of community
services available to parents of children described in
subparagraph (B).
The grantee shall assure that parental involvement described in
this subparagraph is voluntary.
"(D) For purposes of this paragraph, a qualified grantee is a
nonprofit acute care hospital that --
"(i) is in a combination with --
"(I) a health-care provider organization;
"(II) a child welfare organization;
"(III) a disability organization; and
"(IV) a State child protection agency;
"(ii) submits an application for a grant under this paragraph
that is approved by the Secretary;
"(iii) maintains an office in the hospital involved for
purposes of providing services under such grant;
"(iv) provides assurances to the Secretary that in the conduct
of the project the confidentiality of medical, social, and
personal information concerning any person described in
subparagraph (A) or (B) shall be maintained, and shall be
disclosed only to qualified persons providing required services
described in subparagraph (C) for purposes relating to conduct of
the project; and
"(v) assumes legal responsibility for carrying out the terms
and conditions of the grant.
"(E) In awarding grants under this paragraph, the Secretary
shall --
"(i) give priority under this section for two grants under this
paragraph, provided that one grant shall be made to provide
services in an urban setting and one grant shall be made to
provide services in rural setting; and
"(ii) encourage qualified grantees to combine the amounts
received under the grant with other funds available to such
grantees.
"(7) Such other innovative programs and projects that show
promise of preventing and treating cases of child abuse and
neglect as the Secretary may approve.
"SEC. 8. "42 USC 5026a" GRANTS TO STATES FOR CHILD ABUSE AND NEGLECT
PREVENTION AND TREATMENT PROGRAMS.
"(a) DEVELOPMENT AND OPERATION GRANTS. -- The Secretary, through the
Center, is authorized to make grants to the States for purposes of
assisting the States in developing, strengthening, and carrying out
child abuse and neglect prevention and treatment programs.
"(b) ELIGIBILITY REQUIREMENTS. -- In order for a State to qualify
for a grant under subsection (a), such State shall --
"(1) have in effect a State law relating to child abuse and
neglect, including --
"(A) provisions for the reporting of known and suspected
instances of child abuse and neglect; and
"(B) provisions for immunity from prosecution under State and
local laws for persons who report instances of child abuse or
neglect for circumstances arising from such reporting;
"(2) provide that upon receipt of a report of known or
suspected instances of child abuse or neglect an investigation
shall be initiated promptly to substantiate the accuracy of the
report, and, upon a finding of abuse or neglect, immediate steps
shall be taken to protect the health and welfare of the abused or
neglected child and of any other child under the same care who may
be in danger of abuse or neglect;
"(3) demonstrate that there are in effect throughout the State,
in connection with the enforcement of child abuse and neglect laws
and with the reporting of suspected instances of child abuse and
neglect, shall --
"(A) administrative procedures;
"(B) personnel trained in child abuse and neglect prevention
and treatment;
"(C) training procedures;
"(D) institutional and other facilities (public and private);
and
"(E) such related multidisciplinary programs and services,
as may be necessaary or appropriate to ensure that the State
will deal effectively with child abuse and neglect cases in the
State;
"(4) provide for methods to preserve the confidentiality of all
records in order to protect the rights of the child and of the
child's parents or guardians;
"(5) provide for the cooperation of law enforcement officials,
courts of competent jurisdiction, and appropriate State agencies
providing human services;
"(6) provide that in every case involving an abused or
neglected child which results in a judicial proceeding a guardian
ad litem shall be appointed to represent the child in such
proceedings;
"(7) provide that the aggregate of support for programs or
projects related to child abuse and neglect assisted by State
funds shall not be reduced below the level provided during fiscal
year 1973, and set forth policies and procedures designed to
ensure that Federal funds made available under this Act for any
fiscal year shall be so sued as to supplement and, to the extent
practicable, increase the level of State funds which would, in the
absence of Federal funds, be available for such programs and
projects;
"(8) provide for dissemination of information, including
efforts to encourage more accurate reporting, to the general
public with respect to the problem of child abuse and neglect and
the facilities and prevention and treatment methods available to
combat instances of child abuse and neglect;
"(9) to the extent feasible, ensure that parental organizations
combating child abuse and neglect receive preferential treatment;
and
"(10) have in place for the purpose of responding to the
reporting of medical neglect (including instances of withholding
of medically indicated treatment from disabled infants with
life-threatening conditions), procedures or programs, or both
(within the State child protective services system), to provide
for --
"(A) coordination and consultation with individuals designated
by and within appropriate health-care facilities;
"(B) prompt notification by individuals designated by and
within appropriate health-care facilities of cases of suspected
medical neglect (including instances of withholding of medically
indicated treatment from disabled infants with life-threatening
conditions); and
"(C) authority, under State law, for the State child protective
service system to pursue any legal remedies, including the
authority to initiate legal proceedings in a court of competent
jurisdiction, as may be necessary to prevent the withholding of
medically indicated treatment from disabled infants with
life-threatening conditions.
"(c) WAIVERS. --
"(1) GENERAL RULE. -- Subject to paragraph (3) of this
subsection, any State which does not qualify for assistance under
this subsection may be granted a waiver of any requirement under
paragraph (2) of this subsection --
"(A) for a period of not more than one year, if the Secretary
makes a finding that such State is making a good faith effort to
comply with any such requirement, and for a second one-year period
if the Secretary makes a finding that such State is making
substantial progress to achieve such compliance; or
"(B) for a nonrenewable period of not more than two years in
the case of a State the legislature of which meets only
biennially, if the Secretary makes a finding that such State is
making a good faith effort to comply with such requirement.
"(2) EXTENSION. -- (A) Subject to paragraph (3) of this
subsection, any State whose waiver under paragraph (1) expired as
of the end of fiscal year 1986 may be granted an extension of such
waiver, if the Secretary makes a finding that such State is making
a good faith effort to comply with the requirements under
subsection (b) of this section --
"(i) through the end of fiscal year 1988; or
"(ii) in the case of a State the legislature of which meets
biennially, through the end of the fiscal year 1989 or the end of
the next regularly scheduled session of such legislature,
whichever is earlier.
"(B) This provision shall be effective retroactively to October
1, 1986.
"(3) REQUIREMENTS UNDER SUBSECTION (b)(10). -- No waiver under
paragraph (1) or (2) may apply to any requirement under subsection
(b)(10) of this section.
"(d) REDUCTION OF FUNDS IN CASE OF FAILURE TO OBLIGATE. -- If a
State fails to obligate funds awarded under subsection (a) before the
expiration of the 18-month period beginning on the date of such award,
the next award made to such State under this section after the
expiration of such period shall be reduced by an amount equal of the
amount of such unobligated funds unless the Secretary determines that
extraordinary reasons justify the failure to so obligate.
"(e) RESTRICTIONS RELATING TO CHILD WELFARE SERVICES. -- Programs or
projects relating to child abuse and neglect assisted under part B of
title IV of the Social Security Act shall comply with the requirements
set forth in paragraphs (1)(A), (2), (4), (5), and (10) of subsection
(b).
"(f) COMPLIANCE AND EDUCATION GRANTS. -- The Secretary is authorized
to make grants to the States for purposes of developing, implementing,
or operating --
"(1) the procedures or programs required under subsection
(b)(10);
"(2) information and education programs or training programs
designed to improve the provision of services to disabled infants
with life-threatening conditions for --
"(A) professional and paraprofessional personnel concerned with
the welfare of disabled infants with life-threatening conditions,
including personnel employed in child protective services programs
and health-care facilities; and
"(B) the parents of such infants; and
"(3) programs to assist in obtaining or coordinating necessary
services for families of disabled infants with life-threatening
conditions, including --
"(A) existing social and health services;
"(B) financial assistance; and
"(C) services necessary to facilitate adoptive placement of any
such infants who have been relinquished for adoption.
"SEC. 9. "42 USC 5106b" TECHNICAL ASSISTANCE TO STATES FOR CHILD
ABUSE PREVENTION AND TREATMENT PROGRAMS.
"(a) TRAINING AND TECHNICAL ASSISTANCE. -- The Secretary shall
provide, directly or through grants or contracts with public or private
nonprofit organizations, for --
"(1) training and technical assistance programs to assist
States in developing, implementing, or operating programs and
procedures meeting the requirements of section 8(b)(10); and
"(2) the establishment and operation of national and regional
information and resource clearinghouses for the purpose of
providing the most current and complete information regarding
medical treatment procedures and resources and community resources
for the provision of services and treatment to disabled infants
with life-threatening conditions, including --
"(A) compiling, maintaining, updating, and disseminating
regional directories of community services and resources
(including the names and phone numbers of State and local medical
organizations) to assist parents, families, and physicians; and
"(B) attempting to coordinate the availability of appropriate
regional education resources for health-care personnel.
"(b) LIMITATION ON FUNDING. -- Not more than $1,000,000 of the funds
appropriated for any fiscal year for purposes of carrying out this Act
may be used to carry out this section.
"SEC. 10. "42 USC 5106C" GRANTS TO STATES FOR PROGRAMS RELATING TO
THE INVESTIGATION AND PROSECUTION OF CHILD ABUSE CASES.
"(a) GRANTS TO STATES. -- The Secretary, acting through the Center
and in consultation with the Attorney General, is authorized to make
grants to the States for the purpose of assisting States in developing,
establishing, and operating programs designed to improve --
"(1) the handling of child abuse cases, particularly cases of
child sexual abuse, in a manner which limits additional trauma to
the child victim; and
"(2) the investigation and prosecution of cases of child abuse,
particularly child sexual abuse.
"(b) ELIGIBILITY REQUIREMENTS. -- In order for a State to qualify
for assistance under this section, such State shall --
"(1) fulfill the requirements of sections 8(b) and 8(e) or
receive a waiver under section 8(c);
"(2) establish a task force as provided in subsection (c);
"(3) fulfill the requirements of subsection (d); and
"(4) submit an application to the Secretary at such time and
containing such information and assurances as the Secretary
considers necessary, including an assurance that the State will --
"(A) make such reports to the Secretary as may reasonably be
required; and
"(B) maintain and provide access to records relating to
activities under subsections (a) and (b).
"(c) STATE TASK FORCES. --
"(1) GENERAL RULE. -- Except as provided in paragraph (2), a
State requesting assistance under this section shall establish or
designate a State multidisciplinary task force on children's
justice (hereinafter referred to as 'State task force') composed
of professionals with knowledge and experience relating to the
criminal justice system and issues of child abuse. The State task
force shall include --
"(A) individuals representing the law enforcement community;
"(B) judicial and legal officers (including individuals with
the defense as well as the prosecution of such cases);
"(C) child advocates;
"(D) health and mental health professionals;
"(E) individuals representing child protective service
agencies;
"(F) individuals experienced in working with children with
handicaps;
"(G) parents; and
"(H) representatives of parents' groups.
"(2) EXISTING TASK FORCE. -- As determined by the Secretary, a
State commission or task force established after January 1, 1983,
with substantially comparable membership and functions, may be
considered the State task force for purposes of this subsection.
"(d) STATE TASK FORCE STUDY. -- Before a State receives assistance
under this section, the State task force shall --
"(1) review and evaluate State investigative, administrative
and judicial handling of cases of child abuse, particularly child
sexual abuse; and
"(2) make recommendations in each of the categories described
in subsection (e).
The task force may make such other comments and recommendations as
are considered relevant and useful.
"(e) ADOPTION OF STATE TASK FORCE RECOMMENDATIONS. --
"(1) GENERAL RULE. -- Subject to the provisions of paragraph
(2), before a State receives assistance under this section, a
State shall adopt recommendations of the State task force in each
of the following categories --
"(A) investigative, administrative, and judicial handling of
cases of child abuse, particularly child sexual abuse cases, in a
manner which reduces the additional trauma to the child victim and
which also ensures procedural fairness to the accused;
"(B) experimental, model and demonstration programs for testing
innovative approaches and techniques which may improve the rate of
successful prosecution or enhance the effectiveness of judicial
and administrative action in child abuse cases, particularly child
sexual abuse cases, and which also ensure procedural fairness to
the accused; and
"(C) reform of State laws, ordinances, regulations and
procedures to provide comprehensive protection for children from
abuse, particularly child sexual abuse, while ensuring fairness to
all affected persons.
"(2) EXEMPTION. -- As determined by the Secretary, a
State shall be considered to be in fulfillment of the requirements
of this subsection if --
"(A) the State adopts an alternative to the recommendations of
the State task force, which carries out the purpose of this
section, in each of the categories under paragraph (1) for which
the State task force's recommendations are not adopted; or
"(B) the State is making substantial progress toward adopting
recommendations of the State task force or a comparable
alternative to such recommendations.
"(f) FUNDS AVAILABLE. -- For grants under this section, the
Secretary shall use the amount authorized by section 1404A of the
Victims of Crime Act of 1984.
"SEC. 11. "42 USC 5106d" MISCELLANEOUS REQUIREMENTS RELATING TO
ASSISTANCE.
"(a) CONSTRUCTION OF FACILITIES. --
"(1) RESTRICTION ON USE OF FUNDS. -- Assistance provided under
this Act may not be used for construction of facilities.
"(2) LEASE, RENTAL, OR REPAIR. -- The Secretary may authorize
the use of funds received under this Act --
"(A) where adequate facilities are not otherwise available, for
the lease or rental of facilities; or
"(B) for the repair or minor remodeling or alteration of
existing facilities.
"(b) GEOGRAPHICAL DISTRIBUTION. -- The Secretary shall establish
criteria designed to achieve equitable distribution of assistance under
this Act among the States, among geographic areas of the Nation, and
among rural and urban areas of the Nation. To the extent possible, the
Secretary shall ensure that the citizens of each State receive
assistance from at least one project under this Act.
"(c) PREVENTION ACTIVITIES. -- The Secretary, in consultation with
the task force and the board, shall ensure that a majority share of
assistance under this Act is availabile for discretionary research and
demonstration grants.
"(d) LIMITATIONS. -- No funds appropriated for any grant or contract
pursuant to authorizations made in this Act may be used for any purpose
other than that for which such funds were authorized to be appropriated.
"SEC. 12. "42 USC 5106e" COORDINATION OF CHILD ABUSE AND NEGLECT
PROGRAMS.
"The Secretary shall prescribe regulations and make such arrangements
as may be necessary or appropriate to ensure that there is effective
coordination among programs related to child abuse and neglect under
this Act and other such programs which are assisted by Federal funds.
"SEC. 13. "42 USC 5106f" REPORTS.
"(a) COORDINATION EFFORTS. -- Not later than March 1 of the second
year following the date of enactment of the Child Abuse Prevention,
Adoption, and Family Services Act of 1988 and every 2 years thereafter,
the Secretary shall submit to the appropriate committees of Congress a
report on efforts during the 2-year period preceding the date of the
report to coordinate the objectives and activities of agencies and
organizations which are responsible for programs and activities related
to child abuse and neglect.
"(b) EFFECTIVENESS OF STATE PROGRAMS AND TECHNICAL ASSISTANCE. --
Not later than two years after the first fiscal year for which funds are
obligated under section 1404A of the Victims of Crime Act of 1984, the
Secretary shall submit to the appropriate committees of Congress a
report evaluating the effectiveness of --
"(1) assisted programs in achieving the objectives of section
10; and
"(2) the technical assistance provided under section 9.
"SEC. 14. "42 USC 5106g" DEFINITIONS.
"For purposes of this Act --
"(1) the term 'board' means the Advisory Board on Child Abuse
and Neglect established under section 3;
"(2) the term 'Center' means the National Center on Child Abuse
and Neglect established under section 2;
"(3) the term 'child' means a person who has not attained the
lesser of --
"(A) the age of 18; or
"(B) except in the case of sexual abuse the age specified by
the child protection law of the State in which the child resides;
"(4) the term 'child abuse and neglect' means the physical or
mental injury, sexual abuse or exploitation, negligent treatment,
or maltreatment of a child by a person who is responsible for the
child's welfare, under circumstances which indicate that the
child's health or welfare is harmed or threatened thereby, as
determined in accordance with regulations prescribed by the
Secretary;
(5) the term 'person who is responsible for the child's
welfare' includes --
"(A) any employee of a residential facility; and
"(B) any staff person providing out-of-home care;
"(6) the term 'Secretary' means the Secretary of Health and
Human Services;
"(7) the term 'sexual abuse' includes --
"(A) the employment, use, persuasion, inducement, enticement,
or coercion of any child to engage in, or assist any other person
to engage in, any sexually explicit conduct or simulation of such
conduct for the purpose of producing a visual depiction of such
conduct; or
"(B) the rape, molestation, prostitution, or other form of
sexual exploitation of children, or incest with children;
"(8) the term 'State' means each of the several States, the
District of Columbia, the Commonewealth of Puerto Rico, the Virgin
Islands, Guam, American Samoa, the Commonwealth of the Northern
Mariana Islands, and the Trust Territory of the Pacific Islands;
"(9) the term 'task force' means the Inter-Agency Task Force on
Child Abuse and Neglect established under section 4; and
"(10) the term 'withholding of medically indicated treatment'
means the failure to respond to the infant's life-threatening
conditions by providing treatment (including appropriate
nutrition, hydration, and medication) which, in the treating
physician's or physicians' reasonable medical judgment, will be
most likely to be effective in ameliorating or correcting all such
conditions, except that the term does not include the failure to
provide treatment (other than appropriate nutrition, hydration, or
medication) to an infant when, in the treating physician's or
physicians' reasonable medical judgment --
"(A) the infant is chronically and irreversibly comatose;
"(B) the provision of such treatment would --
"(i) merely prolong dying;
"(ii) not be effective in ameliorating or correcting all of the
infant's life-threatening conditions; or
"(iii) otherwise be futile in terms of the survival of the
infant; or
"(C) the provision of such treatment would be virtually futile
in terms of the survival of the infant and the treatment itself
under such circumstances would be inhumane.
"SEC. 15. "42 USC 5106h" AUTHORIZATION OF APPROPRIATIONS.
"(a) IN GENERAL. -- There are authorized to be appropriated for
purposes of carrying out this Act $48,000,000 for fiscal year 1988, and
such sums as may be necessary for fiscal years 1989, 1990, and 1991. Of
the funds appropriated for any fiscal year under this section, except as
provided in the succeeding sentence (1)(A) $11,000,000 shall be
available for activities under sections 5, 6, and 7, and (B) $9,000,000
shall be available in each fiscal year for activities under sections
8(a) and 9 of this Act, giving special consideration to continued
funding of child abuse and neglect programs or projects (previously
funded by the Department of Health and Human Services) of national or
regional scope and demonstrated effectiveness, (2) $5,000,000 shall be
available in each such year for grants and contracts under section 7(a)
of this Act, for identification, treatment, and prevention of sexual
abuse, and (3) $5,000,000 shall be available in each such year for the
purpose of making additional grants to the States to carry out the
provisions of section 8(f) of this Act. With respect to any fiscal year
in which the total amount appropriated under this section is less than
$30,000,000, no less than $20,000,000 of the funds appropriated in such
fiscal year shall be available as provided in clause (1) in the
preceding sentence and of the remainder, one-half shall be available as
provided for in clause (2) and one-half as provided for in clause (3) in
the preceding sentence.
"(b) AVAILABILITY OF FUNDS WITHOUT FISCAL YEAR LIMITATION. -- The
Secretary shall ensure that funds appropriated pursuant to
authorizations in this Act shall remain available until expended for the
purposes for which they were appropriated.".
SEC. 102. "42USC 5105 note" CHILD ABUSE AND DISABILITY.
(a) STUDY. -- The Director of the National Center of Child Abuse and
Neglect shall conduct a study of --
(1) the incidence of child abuse among children with handicaps,
including children in out-of-home placements, and the relationship
between child abuse and children's handicapping conditions; and
(2) the incidence of children who have developed handicapping
conditions as a result of child abuse or neglect.
(b) REPORT. -- Not later than 2 years after the date of enactment of
this Act, the Director shall report to the appropriate committees of
Congress with respect to the study conducted pursuant to subsection (a).
The report shall include --
(1) the information and data gathered;
(2) an analysis of such information and data; and
(3) recommendations on how to prevent abuse of disabled
children.
SEC. 103. "42 USC 5105 note" CHILD ABUSE AND ALCOHOLIC FAMILIES.
(a) STUDY. -- The Director of the National Center on Child Abuse and
Neglect shall conduct a study of the incidence of child abuse in
alcoholic families and the relationship between child abuse and familial
alcoholism.
(b) REPORT. -- Not later than 2 years after the date of enactment of
this Act, the Director shall report to the appropriate committees of
Congress with respect to the study conducted pursuant to subsection (a).
The report shall include --
(1) the information and data gathered;
(2) an analysis of such information and data; and
(3) recommendations on how to prevent child abuse in alcoholic
families.
SEC. 104. "42 USC 5105 note" STUDY OF GUARDIAN-AD-LITEM.
(a) STUDY. -- The Director of the National Center of Child Abuse and
Neglect shall conduct a study of --
(1) how individual legal representation of children in cases of
child abuse or neglect has been provided in each State; and
(2) the effectiveness of legal representation of children in
cases of abuse or neglect through the use of guardian-ad-litem and
court appointed special advocates.
(b) REPORT. -- Not later than 2 years after the date of enactment of
this Act, the director shall report to the appropriate committees of
Congress with respect to the study conducted pursuant to subsection (a).
The report shall include --
(1) the information and data gathered;
(2) an analysis of such information and data; and
(3) recommendations on how to improve legal representation of
children in cases of abuse or neglect.
SEC. 105. "42 USC 5105 note" HIGH RISK STUDY.
(a) STUDY. -- The Director of the National Center on Child Abuse and
Neglect shall conduct a study --
(1) to identify groups which have been historically undeserved
or unserved by programs relating to child abuse and neglect; and
(2) to report the incidence of child abuse and neglect among
children who are members of such groups.
(b) REPORT. -- Not later than 2 years after the date of enactment of
this Act, the Director shall report to the appropriate committees of
Congress with respect to the study conducted pursuant to subsection (a).
The report shall include --
(1) the information and data gathered;
(2) an analysis of such information and data; and
(3) recommendations on how to better meet the needs of
undeserved or unserved groups.
SEC. 106. "42 USC 5101 note" PRESIDENTIAL COMMISSION ON CHILD AND
YOUTH DEATHS.
(a) FINDINGS. -- The Congress finds that --
(1) even by conservative estimates, during 1985 and 1986, child
abuse fatalities in this country increased by 23 percent;
(2) the average age of children who die from abuse and neglect
is two years old;
(3) child abuse fatalities are not inherently predictable but
many are preventable;
(4) many accidental childhood injuries are likewise
preventable;
(5) accidental childhood injuries remain the biggest killer and
disabler of children between the ages of 1 and 14;
(6) in the face of stagnating infant mortality indicators, the
United States is now tied for last place among 20 industrialized
nations with respect to infant mortality;
(7) the teen suicide rate is starting to climb again, with
deaths totaling over 5,000 in 1986; and
(8) homicide is the second leading cause of death in youths
aged fourteen to twenty-four years.
(b) ESTABLISHMENT OF COMMISSION. -- There is established a National
Commission on Child and Youth Deaths (hereafter in this section referred
to as the "Commission"). The Commission shall be composed of fifteen
members as follows:
(1) Two members of the Senate, one to be selected by the
Majority Leader of the Senate, the other to be selected by the
Minority Leader of the Senate.
(2) Two members of the House, one to be selected by the Speaker
of the House of Representatives, the other to be selected by the
Minority Leader of the House.
(3) Four representatives of State government shall be selected
by the President:
(A) The chief executive officer of a State.
(B) A chief State official responsible for administering child
health and mental health programs.
(C) A chief State official responsible for administering
children's social services programs.
(D) A chief State official responsible for administering law
enforcement programs.
(4) The Secretary of Health and Human Services.
(5) Six at large members, including representatives of
community-based organizations with demonstrated expertise in the
prevention and identification of child and youth deaths due to
child abuse and neglect, infant mortality (including sudden infant
death syndrome), suicide, homicide, and unintentional injuries, to
be jointly selected by the Majority Leader of the Senate and
Speaker of the House of Representatives.
(c) STUDY AND EVALUATION BY THE COMMISSION. -- The Commission shall
study and evaluate comprehensively Federal, State, and local public and
private resources which affect child and youth deaths and shall --
(1) evaluate the adequacy and effectiveness of programs
designed to prevent or identify child and youth deaths which are
intentionally caused or which occur due to negligence, neglect, or
a failure to exercise proper care, including child health and
mental health services, child protective services, child welfare
services, education, juvenile justice services, and law
enforcement activities;
(2) evaluate the effectiveness of current Federal, State, and
local policies and systems aimed at appropriately identifying and
collecting accurate, uniform data on child and youth deaths in a
coordinated fashion;
(3) evaluate the adequacy of current Federal, State, and local
efforts to enable an appropriate distribution of properly trained
child health, mental health, social services, protective services,
education, juvenile justice, and law enforcement personnel to
prevent and identify child and youth deaths; and
(4) identify current resource limitations on and
intergovernmental and Federal interagency barriers to the care
needed to prevent high child and youth death rates.
In order to conduct the study and evaluation required by this
subsection, the Commission shall hold hearings in areas of the United
States with high child and youth death rates.
(d) RECOMMENDATIONS AND REPORT OF THE COMMISSION. -- (1) The
Commission shall make recommendations with respect to --
(A) a national policy designed to reduce and prevent child and
youth deaths, including recommendations for more accurate
reporting systems and recommendations concerning appropriate roles
for the Federal Government, States, and local governments and the
private sector;
(B) specific changes needed in Federal laws and Federal
programs to achieve an effective Federal role in preventing child
and youth deaths, including the programs specified in subparagraph
(A); and
(C) specific changes needed to improve national data collection
with respect to child and youth deaths.
In making its recommendations, the Commission shall review
recommendations made in recent regional and national conferences and
reports on child and youth deaths.
(2) Within 12 months after the appointment of the Commission, the
Commission shall prepare and transmit to the President and the
appropriate committees of the Congress a report describing the
activities of the Commission and containing information gathered and
evaluations required by subsection (c) and recommendations required by
paragraph (1) of this subsection.
(e) ADMINISTRATION PROVISIONS. -- (1) A vacancy in the Commission
shall be filled in the same manner as the original appointment was made.
A vacancy in the Commission shall not affect its powers.
(2) Members shall be appointed for the life of the Commission.
(3) The members of the Commission shall elect a Chairman from among
the members of the Commission.
(4) Eleven members of the Commission shall constitute a quorum, but a
lesser number may hold hearings.
(5) The Commission shall hold its first meeting on a date specified
by the President which is not later than 90 days after October 1, 1988.
Thereafter, the Commission shall meet at the call of the Chairman or a
majority of its members, but shall meet at least three times during the
life of the Commission.
(f) COMPENSATION OF MEMBERS. -- (1) Each member of the Commission
who is not an officer or employee of the United States shall be
compensated at a rate equal to the daily equivalent of the annual rate
of basic pay prescribed for grade GS-18 of the General Schedule under
section 5332 of title 5, United States Code, for each day (including
traveltime) during which such member is engaged in the actual
performance of duties as a member of the Commission. Each member of the
Commission who is an officer or employee of the United States shall
receive no additional compensation.
(2) While away from their homes or regular place of business in the
performance of duties for the Commission, all members of the Commission
shall be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies under
sections 5702 and 5703 of title 5, United States Code.
(g) EXECUTIVE DIRECTOR OF COMMISSION. -- (1) The Commission shall
appoint an Executive Director who shall be compensated at a rate not to
exceed the rate of basic pay prescribed for level V of the Executive
Schedule under section 5316 of title 5, United States Code.
(2) With the approval of the Commission, the Executive Director may
appoint and fix the compensation of such additional personnel as the
Executive Director considers necessary to carry out the duties of the
Commission.
(3) The Executive Director and the additional personnel of the
Commission referred to in paragraph (2) may be appointed without regard
to the provisions of chapter 51 and subchapter III of chapter 53 of such
title relating to classification and General Schedule pay rates.
(4) Subject to such rules as may be prescribed by the Commission, the
Executive Director may procure temporary or intermittent services under
section 3109(b) of title 5, United States Code, at rates for individuals
not to exceed $200 per day.
(5) Upon request of the Commission, the head of any Federal agency is
authorized to detail, on a reimbursable basis, any of the personnel of
such agency to the Commission to assist the Commission in carrying out
its duties under this section.
(6) The Administrator of General Services shall provide to the
Commission on a reimbursable basis such administrative and support
services as the Commission may request.
(h) POWERS OF COMMISSION. -- (1) For the purpose of carrying out
this section, the Commission may hold such hearings, sit and act at such
times and places, take such testimony, and receive such evidence, as the
Commission considers appropriate. The commission may administer oaths
or affirmations to witnesses appearing before the Commission.
(2) Any member or employee of the Commission may, if authorized by
the Commission, take any action which the Commission is authorized to
take by this subsection.
(3) The Commission may secure directly from any Federal agency such
information as may be necessary to enable the Commission to carry out
this section. Upon request of the Chairman of the Commission, the head
of such agency shall furnish such information to the Commission.
(i) AUTHORIZATION OF APPROPRIATIONS. -- For fiscal years beginning
after September 30, 1987, there are authorized to be appropriated such
sums as may be necessary to carry out this section.
(j) TERMINATION. -- The Commission shall terminate 90 days after the
date on which the Commission transmits the report required under
subsection (d)(2) to the President and the appropriate committees of
Congress.
SEC. 201. AUTHORIZATION FOR CHILD ABUSE PREVENTION AND TREATMENT AND
ADOPTION REFORM ACT OF 1978.
Section 205 of the Child Abuse Prevention and Treatment and Adoption
Reform Act of 1978 "42 USC 5115" is amended to read as follows:
"Sec. 205. (a) There are hereby authorized to be appropriated
$6,000,000 for the fiscal year 1988, and such sums as may be necessary
for each of the fiscal years 1989, 1990, and 1991 to carry out programs
and activities under this Act except for programs and activities
authorized under sections 203(b)(8) and 203(c)(1).
"(b) For any fiscal year in which appropriations under subsection (a)
exceeds $5,000,000, there are authorized to be appropriated $3,000,000
for fiscal year 1988, and such sums as may be necessary for fiscal years
1989, 1990, and 1991 for the purpose of carrying out section 203(b)(8),
and there are authorized to be appropriated $3,000,000 for fiscal year
1988, and such sums as may be necessary for fiscal years 1989, 1990, and
1991 for the purpose of carrying out section 203(c)(1).
"(c) The Secretary shall ensure that funds appropriated pursuant to
authorizations in this Act shall remain available until expended for the
purposes for which they were appropriated.".
SEC. 202. AMENDMENTS TO CHILD ABUSE PREVENTION AND TREATMENT AND
ADOPTION REFORM ACT OF 1978 RELATING TO ADOPTION ASSISTANCE AND
SERVICES.
(a) MINORITY CHILDREN PLACEMENTS. -- Section 203(b) of title II of
the Child Abuse Prevention and Treatment and Adoption Reform Act of 1978
"42 USC 5113" is amended by --
(1) striking the "and" at the end of paragraph (6);
(2) striking the period at the end of paragraph (7) and
inserting ";and"; and
(3) adding the following new paragraph:
"(8) provide (directly or by grant to or contract with States,
local government entities, public or private nonprofit licensed
child welfare or adoption agencies or adoptive family groups and
community-based organizations with experience in working with
minority populations) for the provision of programs aimed at
increasing the number of minority children (who are in foster care
and have the goal of adoption) placed in adoptive families, with a
special emphasis on recruitment of minority families --
"(A) which may include such activities as --
"(i) outreach, public education, or media campaigns to inform
the public of the needs and numbers of such children;
"(ii) recruitment of prospective adoptive families for such
children;
"(iii) expediting, where appropriate, the legal availability of
such children;
"(iv) expediting, where appropriate, the agency assessment of
prospective adoptive families identified for such children;
"(v) formation of prospective adoptive family support groups;
"(vi) training of personnel of --
"(I) public agencies;
"(II) private nonprofit child welfare and adoption agencies
that are licensed by the State; and
"(III) adoptive parents organizations and community-based
organizations with experience in working with minority
populations;
"(vii) use of volunteers and adoptive parent groups; and
"(viii) any other activities determined by the Secretary to
further the purposes of this Act; and
"(B) shall be subject to the condition that such grants or
contracts may be renewed if documentation is provided to the
Secretary demonstrating that appropriate and sufficient placements
of such children have occurred during the previous funding
period.".
(b) POST LEGAL ADOPTION SERVICES. -- Section 203 "42 USC 5113" is
amended by adding the following new subsection:
"(c)(1) The Secretary shall provide (directly or by grant to or
contract with States, local government entities, public or private
nonprofit licensed child welfare or adoption agencies or adoptive family
groups) for the provision of post legal adoption services for families
who have adopted special needs children.
"(2) Services provided under grants made under this subsection shall
supplement, not supplant, services from any other funds available for
the same general purposes, including --
"(A) individual counseling;
"(B) group counseling;
"(C) family counseling;
"(D) case management;
"(E) training public agency adoption personnel, personnel of
private, nonprofit child welfare and adoption agencies licensed by
the State to provide adoption services, mental health services
professionals, and other support personnel to provide services
under this subsection;
"(F) assistance to adoptive parent organizations; and
"(G) assistance to support groups for adoptive parents, adopted
children, and siblings of adopted children.
(c) PLACEMENT OF FOSTER CARE CHILDREN. -- Section 203, as amended by
subsection (b), is amended by adding the following new subsection:
"(d)(1) The Secretary shall make grants for improving State efforts
to increase the placement of foster care children legally free for
adoption, according to a pre-established plan and goals for improvement.
Grants funded by this section must include a strong evaluation
component which outlines the innovations used to improve the placement
of special needs children who are legally free for adoption, and the
successes and failures of the initiative. The evaluations will be
submitted to the Secretary who will compile the results of projects
funded by this section and submit a report to the appropriate committees
of Congress. The emphasis of this program must focus on the improvement
of the placement rate -- not the aggregate number of special needs
children placed in permanent homes. The Secretary, when reviewing grant
applications shall give priority to grantees who propose improvements
designed to continue in the absence of Federal funds.
"(2) Each State entering into an agreement under this subsection
shall submit an application to the Secretary for each fiscal year in a
form and manner determined to be appropriate by the Secretary. Each
application shall include verification of the placements described in
paragraph (1).
"(3)(A) Payments under this subsection shall begin during fiscal year
1989. Payments under this section during any fiscal year shall not
exceed $1,000,000. No payment may be made under this subsection unless
an amount in excess of $5,000,000 is appropriated for such fiscal year
under section 205(a).
"(B) Any payment made to a State under this subsection which is not
used by such State for the purpose provided in paragraph (1) during the
fiscal year payment is made shall revert to the Secretary on October 1st
of the next fiscal year and shall be used to carry out the purposes of
this Act.".
SEC. 301. AUTHORIZATION FOR FAMILY VIOLENCE PREVENTION AND SERVICES
ACT.
(a) AUTHORIZATION. -- Section 310(a) of the Family Violence
Prevention and Services Act "42 USC 10409" is amended by --
(1) striking "and" the first place it appears and inserting a
comma; and
(2) by striking out the period at the end and inserting in lieu
thereof the following: ", $26,000,000 for fiscal year 1988, and
such sums as may be necessary for each of the fiscal years 1989,
1990, and 1991.".
(b) LIMITATION ON FUNDS AVAILABLE. -- Section 310 of such Act is
amended by adding at the end thereof the following:
"(c) The Secretary shall ensure that funds appropriated pursuant to
authorizations in this Act shall remain available until expended for the
purposes for which they were appropriated.".
SEC. 302. REMOVAL OF THREE-YEAR LIMIT ON GRANTS FOR SHELTERS.
Section 303(c) of the Family Violence Prevention and Services Act (42
U.S.C. 10402(c)) is amended by striking out the second sentence.
SEC. 303. AMENDMENTS TO FAMILY VIOLENCE PREVENTION AND SERVICES ACT.
(a) TECHNICAL AMENDMENT. -- The Family Violence Prevention and
Services Act is amended by striking out section 312 the first time such
section appears in such Act (Public Law 98-457; 42 U.S.C. 10411).
(b) INFORMATION AND TRAINING GRANTS. -- Section 311(b) of the Family
Violence Prevention and Services Act "42 USC 10410" is amended by
inserting at the end thereof the following:
"(2)(A) The Secretary shall award grants or contracts to local law
enforcement agencies, acting in coordination with domestic violence
shelters, social service agencies and hospitals, for the purposes of --
"(i) the development of materials, to be provided to each
abused family member at the time such spouse is identified by law
enforcement officers, hospital personnel, social services
personnel, education counseling personnel, and other appropriate
personnel involved in the identification of family violence cases
that include --
"(I) an explanation in basic terms of --
"(aa) the rights of the abused family member under the laws of
the jurisdiction involved; and
"(bb) the services available to the abused family member,
including intervention, treatment, and support services; and
"(II) phone numbers and addresses for the services described in
subparagraph (A)(ii);
"(ii) the development of procedures whereby domestic violence
shelter, hospital, social service, or law enforcement personnel
provide to an abused family member a written report, relating to
each incidence of physical abuse reported by the family member,
that includes a description of physical injuries to the family
member observed by such personnel; and
"(iii) the development of systems whereby domestic violence
shelter or local social service personnel, with the consent of the
abused family member involved, may obtain from local law
enforcement personnel information relating to abuse of such family
member, including a report describing the initial contact of such
family member and the law enforcement agency.
"(B) The Secretary shall provide assurances that procedures will be
developed under this paragraph to guarantee the confidentiality of the
records maintained.".
(c) FAMILY VIOLENCE PREVENTION PROJECT. -- The Family Violence
Prevention and Services Act is amended by adding at the end the
following new section:
"SEC. 313. "42 USC 10413" The Secretary shall, directly or by grant
or contract --
"(1) develop data on the individual characteristics relating to
family violence;
"(2) provide for the objective documentation of data on the
victims of family violence and their dependents based on injuries
that are brought to the attention of domestic violence shelter,
hospital, social service, or law enforcement personnel, whether or
not formal civil or criminal action is taken; and
"(3) provide assurances that procedures will be developed to
guarantee the confidentiality of records pertaining to any
individual for whom data are compiled through the subsection.".
SEC. 401. "42 USC 5101 note" REGULATIONS.
(a) For any rule or regulation needed to implement this Act, the
Secretary of Health and Human Services shall --
(1) publish proposed regulations for purposes of implementing
the amendments made by this Act before the expiration of the
90-day period beginning on the date of the enactment of this Act;
(2) allow not less than 45 days for public comment on such
proposed regulations; and
(3) publish final regulations for purposes of implementing the
amendments made by this Act before the end of the 195-day period
beginning on the date of the enactment of this Act.
Approved April 25, 1988.
LEGISLATIVE HISTORY -- H.R. 1900 (S. 1663):
HOUSE REPORTS: No. 100-135 (Comm. on Education and Labor) and No.
100-543 (Comm. of Conference).
SENATE REPORTS: No. 100-210 accompanying S. 1663 (Comm. on Labor and
Human Resources).
CONGRESSIONAL RECORD: Vol. 133 (1987): June 8, considered and
passed House. Nov. 3, considered and passed Senate, amended, in lieu of
S. 1663. Vol. 134 (1988): Mar. 30, Senate agreed to conference report.
Apr. 12, House agreed to conference report.
Public Law 100-293, 102 Stat. 95
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCE.
(a) SHORT TITLE. -- This Act "21 USC 301 note" may be cited as the
"Prescription Drug Marketing Act of 1987".
(b) REFERENCE. -- Whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a section or
other provision of the Federal Food, Drug, and Cosmetic Act.
SEC. 2. "21 USC 353 note" FINDINGS.
The Congress finds the following:
(1) American consumers cannot purchase prescription drugs with
the certainty that the products are safe and effective.
(2) The integrity of the distribution system for prescription
drugs is insufficient to prevent the introduction and eventual
retail sale of substandard, ineffective, or even counterfeit
drugs.
(3) The existence and operation of a wholesale submarket,
commonly known as the "diversion market", prevents effective
control over or even routine knowledge of the true sources of
prescription drugs in a significant number of cases.
(4) Large amounts of drugs are being reimported to the United
States as American goods returned. These imports are a health and
safety risk to American consumers because they may have become
subpotent or adulterated during foreign handling and shipping.
(5) The ready market for prescription drug reimports has been
the catalyst for a continuing series of frauds against American
manufacturers and has provided the cover for the importation of
foreign counterfeit drugs.
(6) The existing system of providing drug samples to physicians
through manufacturer's representatives has been abused for decades
and has resulted in the sale to consumers of misbranded, expired,
and adulterated pharmaceuticals.
(7) The bulk resale of below wholesale priced prescription
drugs by health care entities, for ultimate sale at retail, helps
fuel the diversion market and is an unfair form of competition to
wholesalers and retailers that must pay otherwise prevailing
market prices.
(8) The effect of these several practices and conditions is to
create an unacceptable risk that counterfeit, adulterated,
misbranded, subpotent, or expired drugs will be sold to American
consumers.
SEC. 3. REIMPORTATION.
Section 801 (21 U.S.C. 381) is amended by redesignating subsection
(d) as subsection (e) and by inserting after subsection (c) the
following:
"(d)(1) Except as provided in paragraph (2), no drug subject to
section 503(b) which is manufactured in a State and exported may be
imported into the United States unless the drug is imported by the
person who manufactured the drug.
"(2) The Secretary may authorize the importation of a drug the
importation of which is prohibited by paragraph (1) if the drug is
required for emergency medical care.".
SEC. 4. SALES RESTRICTIONS.
Section 503 (21 U.S.C. 353) is amended by adding at the end the
following:
"(c)(1) No person may sell, purchase, or trade or offer to sell,
purchase, or trade any drug sample. For purposes of this paragraph and
subsection (d), the term 'drug sample' means a unit of a drug, subject
to subsection (b), which is not intended to be sold and is intended to
promote the sale of the drug. Nothing in this paragraph shall subject
an officer or executive of a drug manufacturer or distributor to
criminal liability solely because of a sale, purchase, trade, or offer
to sell, purchase, or trade in violation of this paragraph by other
employees of the manufacturer or distributor.
"(2) No person may sell, purchase, or trade, offer to sell, purchase,
or trade, or counterfeit any coupon. For purposes of this paragraph,
the term 'coupon' means a form which may be redeemed, at no cost or at a
reduced cost, for a drug which is prescribed in accordance with section
503(b).
"(3)(A) No person may sell, purchase, or trade, or offer to sell,
purchase, or trade, any drug --
"(i) which is subject to subsection (b), and
"(ii)(I) which was purchased by a public or private hospital or
other health care entity, or
"(II) which was donated or supplied at a reduced price to a
charitable organization described in section 501(c)(3) of the
Internal Revenue Code of 1954.
"(B) Subparagraph (A) does not apply to --
"(i) the purchase or other acquisition by a hospital or other
health care entity which is a member of a group purchasing
organization of a drug for its own use from the group purchasing
organization or from other hospitals or health care entities which
are members of such organization,
"(ii) the sale, purchase, or trade of a drug or an offer to
sell, purchase, or trade a drug by an organization described in
subparagraph (A)(ii)(II) to a nonprofit affiliate of the
organization to the extent otherwise permitted by law,
"(iii) a sale, purchase, or trade of a drug or an offer to
sell, purchase, or trade a drug among hospitals or other health
care entities which are under common control,
"(iv) a sale, purchase, or trade of a drug or an offer to sell,
purchase, or trade a drug for emergency medical reasons, or
"(v) a sale, purchase, or trade of a drug, an offer to sell,
purchase, or trade a drug, or the dispensing of a drug pursuant to
a prescription executed in accordance with section
67 503(b).
For purposes of this paragraph, the term 'entity' does not include a
wholesale distributor of drugs or a retail pharmacy licensed under State
law and the term 'emergency medical reasons' includes transfers of a
drug between health care entities or from a health care entity to a
retail pharmacy undertaken to alleviate temporary shortages of the drug
arising from delays in or interruptions of regular distribution
schedules.".
SEC. 5. DISTRIBUTION OF DRUG SAMPLES.
Section 503 (as amended by section 4 of this Act) is amended by
adding at the end thereof the following:
"(d)(1) Except as provided in paragraphs (2) and (3), no
representative of a drug manufacturer or distributor may distribute any
drug sample.
"(2)(A) The manufacturer or distributor of a drug subject to
subsection (b) may, in accordance with this paragraph, distribute drug
samples by mail or common carrier to practitioners licensed to prescribe
such drugs or, at the request of a licensed practitioner, to pharmacies
of hospitals or other health care entities. Such a distribution of drug
samples may only be made --
"(i) in response to a written request for drug samples made on
a form which meets the requirements of subparagraph (B), and
"(ii) under a system which requires the recipient of the drug
sample to execute a written receipt for the drug sample upon its
delivery and the return of the receipt to the manufacturer or
distributor.
"(B) A written request for a drug sample required by subparagraph
(A)(i) shall contain --
"(i) the name, address, professional designation, and signature
of the practitioner making the request,
"(ii) the identity of the drug sample requested and the
quantity requested,
"(iii) the name of the manufacturer of the drug sample
requested, and
"(iv) the date of the request.
"(C) Each drug manufacturer or distributor which makes distributions
by mail or common carrier under this paragraph shall maintain, for a
period of 3 years, the request forms submitted for such distributions
and the receipts submitted for such distributions and shall maintain a
record of distributions of drug samples which identifies the drugs
distributed and the recipients of the distributions. Forms, receipts,
and records required to be maintained under this subparagraph shall be
made available by the drug manufacturer or distributor to Federal and
State officials engaged in the regulation of drugs and in the
enforcement of laws applicable to drugs.
"(3) The manufacturer or distributor of a drug subject to subsection
(b) may, by means other than mail or common carrier, distribute drug
samples only if the manufacturer or distributor makes the distributions
in accordance with subparagraph (A) and carries out the activities
described in subparagraphs (B) through (F) as follows:
"(A) Drug samples may only be distributed --
"(i) to practitioners licensed to prescribe such drugs if they
make a written request for the drug samples, or
"(ii) at the written request of such a licensed practitioner,
to pharmacies of hospitals or other health care entities.
A written request for drug samples shall be made on a form
which contains the practitioner's name, address, and professional
designation, the identity of the drug sample requested, the
quantity of drug samples requested, the name of the manufacturer
or distributor of the drug sample, the date of the request and
signature of the practitioner making the request.
"(B) Drug manufacturers or distributors shall store drug
samples under conditions that will maintain their stability,
integrity, and effectiveness and will assure that the drug samples
will be free of contamination, deterioration, and adulteration.
"(C) Drug manufacturers or distributors shall conduct, at least
annually, a complete and accurate inventory of all drug samples in
the possession of representatives of the manufacturer or
distributor. Drug manufacturers or distributors shall maintain
lists of the names and address of each of their representatives
who distribute drug samples and of the sites where drug samples
are stored. Drug manufacturers or distributors shall maintain
records for at least 3 years of all drug samples distributed,
destroyed, or returned to the manufacturer or distributor, of all
inventories maintained under this subparagraph, of all thefts or
significant losses of drug samples, and of all requests made under
subparagraph (A) for drug samples. Records and lists maintained
under this subparagraph shall be made available by the drug
manufactuer or distributor to the Secretary upon request.
"(D) Drug manufacturers or distributors shall notify the
Secretary of any significant loss of drug samples and any known
theft of drug samples.
"(E) Drug manufacturers or distributors shall report to the
Secretary any conviction of their representatives for violations
of section 503(c)(1) or a State law because of the sale, purchase,
or trade of a drug sample or the offer to sell, purchase, or trade
a drug sample.
"(F) Drug manufacturers or distributors shall provide to the
Secretary the name and telephone number of the individual
responsible for responding to a request for information respecting
drug samples.".
SEC. 6. WHOLESALE DISTRIBUTORS.
Section 503 (as amended by section 5 of this Act) is amended by
adding at the end the following:
"(e)(1) Each person who is engaged in the wholesale distribution of
drugs subject to subsection (b) and who is not an authorized distributor
of record of such drugs shall provide to each wholesale distributor of
such drugs a statement identifying each sale of the drug (including the
date of the sale) before the sale to such wholesale distributor. Each
manufacturer shall maintain at its corporate offices a current list of
such authorized distributors.
"(2)(A) No person may engage in the wholesale distribution in
interstate commerce of drugs subject to subsection (b) in a State unless
such person is licensed by the State in accordance with the guidelines
issued under subparagraph (B).
"(B) The Secretary shall be regulation issue guidelines establishing
minimum standards, terms, and conditions for the licensing of persons to
make wholesale distributions in interstate commerce of drugs subject to
subsection (b). Such guidelines shall prescribe requirements for the
storage and handling of such drugs and for the establishment and
maintenance of records of the distributions of such drugs.
"(3) For the purposes of this subsection --
"(A) the term 'authorized distributors of record' means those
distributors with whom a manufacturer has established an ongoing
relationship to distribute such manufacturer's products, and
"(B) the term 'wholesale distribution' means distribution of
drugs subject to subsection (b) to other than the consumer or
patient but does not include intracompany sales and does not
include distributions of drugs described in subsection
(c)(3)(B).".
SEC. 7. PENALTIES.
(a) PROHIBITED ACTS. -- Section 301 (21 U.S.C. 331) is amended by
adding at the end the following:
"(t) The importation of a drug in violation of section 801(d)(1), the
sale, purchase, or trade of a drug or drug sample or the offer to sell,
purchase, or trade a drug or drug sample in violation of section 503(c),
the sale, purchase, or trade of a coupon, the offer to sell, purchase,
or trade such a coupon, or the counterfeiting of such a coupon in
violation of section 503(c)(2), the distribution of a drug sample in
violation of section 503(d) or the failure to otherwise comply with the
requirements of section 503(d), or the distribution of drugs in
violation of section 503(e) or the failure to otherwise comply with the
requirements of section 503(e).".
(b) PENALTIES. -- Section 303 (21 U.S.C. 333) is amended --
(1) by inserting "(1)" after "(a)",
(2) by redesignating subsection (b) as paragraph (2) and by
striking out "subsection (a)" in such subsection and inserting in
lieu thereof "paragraph (1)" and
(3) by inserting after subsection (a) the following:
"(b)(1) Notwithstanding subsection (a), any person who violates
section 301(t) because of an importation of a drug in violation of
section 801(d)(1), because of a sale, purchase, or trade of a drug or
drug sample or the offer to sell, purchase, or trade a drug or drug
sample in violation of section 503(c), because of the sale, purchase, or
trade of a coupon, the offer to sell, purchase, or trade such a coupon,
or the counterfeiting of such a coupon in violation of section
503(c)(2), or the distribution of drugs in violation of section
503(e)(2)(A) shall be imprisoned for not more than 10 years or fined not
more than $250,000, or both.
"(2) Any manufacturer or distributor who distributes drug samples by
means other than the mail or common carrier whose representative, during
the course of the representative's employment or association with that
manufacturer or distributor, violated section 301(t) because of a
violation of section 503(c)(1) or violated any State law prohibiting the
sale, purchase, or trade of a drug sample subject to section 503(b) or
the offer to sell, purchase, or trade such a drug sample shall, upon
conviction of the representative for such violation, be subject to the
following civil penalties:
"(A) A civil penalty of not more than $50,000 for each of the
first two such violations resulting in a conviction of any
representative of the manufacturer or distributor in any 10-year
period.
"(B) A civil penalty of not more than $1,000,000 for each
violation resulting in a conviction of any representative after
the second conviction in any 10-year period.
For the purposes of this paragraph, multiple convictions of one or
more persons arising out of the same event or transaction, or a related
series of events or transactions, shall be considered as one violation.
"(3) Any manufacturer or distributor who violates section 301(t)
because of a failure to make a report required by section 503(d)(3)(E)
shall be subject to a civil penalty of not more than $100,000.
"(4)(A) If a manufacturer or distributor or any representative of
such manufacturer or distributor provides information leading to the
arrest and conviction of any representative of that manufacturer or
distributor for a violation of section 301(t) because of a sale,
purchase, or trade or offer to purchase, sell, or trade a drug sample in
violation of section 503(c)(1) or for a violation of State law
prohibiting the sale, purchase, or trade or offer to sell, purchase, or
trade a drug sample, the conviction of such representative shall not be
considered as a violation for purposes of paragraph (2).
"(B) If, in an action brought under paragraph (2) against a
manufacturer or distributor relating to the conviction of a
representative of such manufacturer or distributor for the sale,
purchase, or trade of a drug or the offer to sell, purchase, or trade a
drug, it is shown, by clear and convincing evidence --
"(i) that the manufacturer or distributor conducted, before the
arrest of such representative for the violation which resulted in
such conviction, an investigation of events or transactions which
would have led to the reporting of information leading to the
arrest and conviction of such representative for such purchase,
sale, or trade or offer to purchase, sell, or trade, or
"(ii) that, except in the case of the conviction of a
representative employed in a supervisory function, despite
diligent implementation by the manufacturer or distributor of an
independent audit and security system designed to detect such a
violation, the manufacturer or distributor could not reasonably
have been expected to have detected such violation,
the conviction of such representative shall not be considered as a
conviction for purposes of paragraph (2).
"(5) If a person provides information leading to the arrest and
conviction of a person for a violation of section 301(t) because of the
sale, purchase, or trade of a drug sample or the offer to sell,
purchase, or trade a drug sample in violation of section 503(c)(1), such
person shall be entitled to one-half of the criminal fine imposed and
collected for such violation but not more than $125,000.".
SEC. 8. "21 USC 353 note" EFFECTIVE DATE.
(a) GENERAL RULE. -- Except as provided in subsection (b), this Act
and the amendments made by this Act shall take effect upon the
expiration of 90 days after the date of the enactment of this Act.
(b) EXCEPTION. --
(1) Section 503(d) of the Federal Food, Drug, and Cosmetic Act
(as added by section 5 of this Act) shall take effect upon the
expiration of 180 days after the date of the enactment of this
Act.
(2) The Secretary of Health and Human Services shall by
regulation issue the guidelines required by section 503(e)(2)(B)
of the Federal Food, Drug, and Cosmetic Act (as added by section 6
of this Act) not later than 180 days after the date of the
enactment of this Act. Section 503(e)(2)(A) of such Act shall
take effect upon the expiration of 2 years after the date such
regulations are promulgated and take effect.
Approved April 22, 1988.
LEGISLATIVE HISTORY -- H.R. 1207:
HOUSE REPORTS: No. 100-76 (Comm. on Energy and Commerce).
SENATE REPORTS: No. 100-303 (Comm. on Finance).
CONGRESSIONAL RECORD: Vol. 133 (1987): May 4, considered and passed
House. Vol. 134 (1988): Mar. 31, considered and passed Senate.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): Apr.
22, Presidential statement.
Public Law 100-292, 102 Stat. 94
Whereas April 21, 1988, marks the fortieth anniversary of the
founding of the State of Israel;
Whereas the months of March, April, and May contain events of major
significance in the Jewish calendar -- Passover, the anniversary of the
Warsaw Ghetto Uprising, Solidarity Sunday for Soviet Jewry, and
Jerusalem Day;
Whereas the Congress recognizes that the understanding of the
heritage of all American ethnic groups contributes to the unit of our
country; and
Whereas intergroup understanding can be further fostered through an
appreciation of the culture, history and traditions of the Jewish
community and the contributions of Jews to our country and society:
Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the week of April 17,
1988, through April 24, 1988, is designated as "Jewish Heritage Week",
and the President is authorized and requested to issue a proclamation
calling upon the people of the United States, State and local government
agencies, and interested organizations to observe the week with
appropriate ceremonies, activities and programs.
Approved April 20, 1988.
LEGISLATIVE HISTORY -- H.J. Res. 527:
CONGRESSIONAL RECORD, Vol. 134 (1988): Apr. 12, considered and
passed House. Apr. 14, considered and passed Senate.
Public Law 100-291, 102 Stat. 93
Whereas millions of Americans are victims of crime each year;
Whereas many of those crime victims are traumatized further by the
physical, psychological, and financial burdens resulting from their
victimizations;
Whereas the sensitivity of our Nation's criminal justice system must
be improved when working with crime victims and their families;
Whereas much progress has been made to correct these injustices by
implementing in the Federal, State, local, and private sectors the
recommendations of the President's Task Force on Victims of Crime; and
Whereas continuation of these efforts must be encouraged to ensure
the restoration of balance to our Nation's criminal justice system and
the fair and compassionate treatment of crime victims and their
families: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the week of April 17,
1988, is designated as "Crime Victims Week", and the President is
authorized and requested to issue a proclamation calling upon the people
of the United States to observe such week with appropriate programs,
ceremonies, and activities.
Approved April 18, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 234:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Apr. 12, considered and passed House.
Public Law 100-290, 102 Stat. 90
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act "21 USC 301 note" may be cited as the "Orphan Drug
Amendments of 1988".
SEC. 2. DESIGNATION AS AN ORPHAN DRUG.
(a) REQUEST. -- Section 526(a)(1) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360bb(a)(1)) is amended by adding after the
first sentence the following: "A request for designation of a drug
shall be made before the submission of an application under section
505(b) for the drug, the submission of an application for certification
of the drug under section 507, or the submission of an application for
licensing of the drug under section 351 of the Public Health Service
Act.".
(b) DISCONTINUANCE. -- Section 526 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360bb) is amended by redesignating subsections
(b) and (c) as subsections (c) and (d), respectively, and by adding
after subsection (a) the following:
"(b) A designation of a drug under subsection (a) shall be subject to
the condition that --
"(1) if an application was approved for the drug under section
505(b), a certificate was issued for the drug under section 507,
or a license was issued for the drug under section 351 of the
Public Health Service Act, the manufacturer of the drug will
notify the Secretary of any discontinuance of the production of
the drug at least one year before discontinuance, and
"(2) if an application has not been approved for the drug under
section 505(b), a certificate has not been issued for the drug
under section 507, or a license has not been issued for the drug
under section 351 of the Public Health Service Act and if
preclinical investigations or investigations under section 505(i)
are being conducted with the drug, the manufacturer or sponsor of
the drug will notify the Secretary of any decision to discontinue
active pursuit of approval of an application under section 505(b),
approval of an application for certification under section 507, or
approval of a license under section 351 of the Public Health
Service Act.".
SEC. 3. FINANCIAL ASSISTANCE.
(a) MEDICAL DEVICES. -- Section 5 of the Orphan Drug Act (21 U.S.C.
360ee) is amended --
(1) in subsection (a), by inserting "(1)" after "assist in" and
by inserting before the period a comma and "(2) defraying the
costs of developing medical devices for rare diseases or
conditions", and
(2) in subsection (b)(2) --
(A) by inserting "(1) in the case of a drug," after "means" in
the first sentence and by adding before the period in that
sentence a comma and "(2) in the case of a medical device, any
disease or condition that occurs so infrequently in the United
States that there is no reasonable expectation that a medical
device for such disease or condition will be developed without
assistance under subsection (a)", and
(B) by striking out "under this subsection" in the last
sentence and inserting in lieu thereof "under section 526 of the
Federal Food, Drug, and Cosmetic Act".
(b) MEDICAL FOODS. -- Section 5 of the Orphan Drug Act (21 U.S.C.
360ee) is amended --
(1) in subsection (a) (as amended by subsection (a)), by
inserting before the period a comma and "and (3) defraying the
costs of developing medical foods for rare diseases or
conditions",
(2) in subsection (b)(2) (as amended by subsection (a)), by
inserting before the period at the end of the first sentence a
comma and "and 093) in the case of a medical food, any disease or
condition that occurs so infrequently in the United States that
there is no reasonable expectation that a medical food for such
disease or condition will be developed without assistance under
subsection (a)", and
(3) by adding at the end of subsection (b) the following:
"(3) The term 'medical food' means a food which is formulated
to be consumed or administered enterally under the supervision of
a physician and which is intended for the specific dietary
management of a disease or condition for which distinctive
nutritional requirements, based on recognized scientific
principles, are established by medical evaluation.".
(c) AUTHORIZATION. -- Section 5(c) of the Orphan Drug Act (21 U.S.C.
360ee(c)) is amended to read as follows:
"(c) For grants and contracts under subsection (a) there are
authorized to be appropriated $10,000,000 for fiscal year 1988,
$12,000,000 for fiscal year 1989, $14,000,000 for fiscal year 1990.".
(d) STUDY. -- The Secretary of Health and Human Services shall
conduct a study to determine whether the application of subchapter B "21
USC 360aa note" of chapter V of the Federal Food, Drug, and Cosmetic Act
(relating to drugs for rare diseases and conditions) and section 28 of
the Internal Revenue Code of 1986 (relating to tax credit) to medical
devices or medical foods for rare diseases or conditions or to both is
needed to encourage the development of such devices and foods. The
Secretary shall report the results of the study to the Committee on
Energy and Commerce of the House of Representatives and the Committee on
Labor and Human Resources of the Senate not later than one year after
the date of the enactment of this Act. For purposes of this section,
the term "rare diseases or conditions" has the meaning prescribed by
section 5 of the Orphan Drug Act (21 U.S.C. 360ee).
SEC. 4. NATIONAL COMMISSION ON ORPHAN DISEASES.
Section 4(n) of the Orphan Drug Amendments of 1985 (42 U.S.C. 236
note) is amended by striking out "September 30, 1987" and inserting in
lieu thereof "February 1, 1989".
Approved April 18, 1988.
LEGISLATIVE HISTORY -- H.R. 3459:
HOUSE REPORTS: No. 100-473 (Comm. on Energy and Commerce).
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 33, considered and
passed House. Mar. 31, considered and passed Senate.
Public Law 100-289, 102 Stat. 89
Whereas, the student-athlete represents a role model worthy of
emulation by America's youth;
Whereas, such worthy values and behaviors as perseverance, teamwork,
self-discipline and commitment to a goal are fostered and promoted by
both academic and athletic pursuits;
Whereas, participation in athletics, together with education,
provides opportunities to develop valuable social and leadership skills
and to gain an appreciation of ethnic and racial groups different from
one's own;
Whereas, in spite of all the positive aspects of sport, overemphasis
on sport at the expense of education can cause serious harm to an
athlete's future;
Whereas, the pursuit of victory in athletics among our nation's
schools and colleges too often leads to exploitation and abuse of the
student-athlete;
Whereas, only 1 in 10,000 high school athletes who dream of a career
in professional sports ever realize that aspiration, while those who do
can expect a professional sports career of less than 4 years;
Whereas, thousands of America's youth sacrifice academic achievement
to the dream of professional athletics;
Whereas, the practice of keeping athletes eligible for participation
on a team, even at the high school level, must be abandoned for a policy
of ensuring a meaningful education and degree;
Whereas, coaches, parents, and educators of student-athletes must
express high expectations for academic performance as well as for
athletic performance; and
Whereas, there is a need in this Nation to reemphasize the "student"
in the term "student-athlete": Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That April 6, 1988, is
designated as "National Student-Athlete Day" and the President of the
United States is authorized and requested to issue a proclamation
calling upon the people of the United States to observe that day with
appropriate programs, ceremonies, and activities.
Approved April 12, 1988.
LEGISLATIVE HISTORY -- H.J. Res. 513:
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 30, considered and
passed House and Senate.
Public Law 100-288, 102 Stat. 88
Whereas the status and composition of the family in the United States
is constantly changing;
Whereas women hold 53 percent of all jobs in the United States;
Whereas 80 percent of the women in the United States who are employed
are of childbearing age;
Whereas, while child care is no longer considered the sole
responsibility of women, the percentage of single-parent families headed
by women has increased by more than 51 percent in 12 years;
Whereas it is estimated that 80 percent of the women with children of
preschool age will hold jobs by 1990;
Whereas the increasing participation of women in the workforce will
continue to increase the demand for child care during the working hours;
Whereas communities across the United States are planning special
activities to honor child care providers and to illustrate the
importance of quality child care as part of the Child Care America
project of the Public Television Outreach Alliance;
Whereas the National Association for the Education of Young Children
and the Public Television Outreach Alliance are sponsoring a week of the
child, and it is appropriate for the Congress to designate the same week
as a period devoted to increasing public awareness of child care issues;
and
Whereas all children deserve quality child care, and all parents have
a profound obligation to provide a safe and wholesome environment for
their children at all times: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the week beginning April
10, 1988, is designated as "National Child Care Awareness Week", and the
President of the United States is authorized and requested to issue a
proclamation calling upon the people of the United States to observe the
week with appropriate ceremonies and activities.
Approved April 7, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 260:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 30, considered and passed House.
Public Law 100-287, 102 Stat. 87
Whereas April 21, 1988, marks the one hundred and fiftieth birthday
of the great American conservationist John Muir, heralded worldwide for
his dedication to the preservation of wilderness in this country;
Whereas generations of Americans have reveled in the wonders of
Yosemite, the Grand Canyon, and other parklands set aside by past
Presidents and Congresses at the urging of the Scottish-born naturalist;
Whereas a system of natural, cultural, historical, and recreational
national parks which John Muir helped pioneer has grown in size to
almost eighty million acres symbolizing the stewardship Americans
demonstrate for their precious public resources;
Whereas John Muir was the cofounder and first president of the Sierra
Club, an organization which contributes in making this Nation a leader
in the global environmental movement;
Whereas the John Muir National Historic Site, in Martinez,
California, one of three hundred and thirty-seven units of the National
Park Service, was set aside by Congress in 1964 as a monument to the
wild lands crusader and was the site from which Muir wrote books
celebrating the natural beauty and wildlife of the United States, books
that are still widely read and treasured by people of all ages; and
Whereas the important role of an ecologically sound environment in
the quality of life for all people was proselytised by the tireless
voice and pen of John Muir: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That April 21, 1988, is
designated as "John Muir Day" and the President is authorized and
requested to issue a proclamation calling upon the people of the United
States to observe such day with appropriate ceremonies and activities.
Approved April 7, 1988.
LEGISLATIVE HISTORY -- S.J. Res 245:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 17, considered and
passed Senate. Mar. 30, considered and passed House.
Public Law 100-286, 102 Stat. 86
Whereas the economic stability and growth of this Nation relies
largely on the collective industry and endeavor of its working citizens;
Whereas the time-honored tradition of American leadership in
work-related ingenuity and know-how has brought about great strides in
productivity;
Whereas growth in productivity in turn improves the standard of
living for United States citizens;
Whereas public awareness of the economic importance of productivity
will promote individual and collective ideas and innovations for
productivity improvement; and
Whereas a conscientious effort to improve productivity will foster a
better standard of living for all citizens and reduce the level of
inflation: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That, for the purpose of
providing for a better understanding of the need for productivity growth
and of encouraging the development of methods to improve individual and
collective productivity in the public and private sectors, the period
commencing on April 10, 1988, and ending on April 16, 1988, is
designated as "National Productivity Improvement Week", and the
President is authorized and requested to issue a proclamation calling
upon the people of the United States to observe such period with
appropriate ceremonies and activities.
Approved April 7, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 223:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 17, considered and
passed Senate. Mar. 30, considered and passed House.
Public Law 100-285, 102 Stat. 82
Whereas the State of Maryland, the Commonwealth of Virginia, and the
District of Columbia have adopted amendments to the Washington
Metropolitan Area Transit Regulation Compact relating to public hearing
requirements, investment flexibility, procurement, and public safety;
and
Whereas the Congress has reviewed such amendments and is willing to
consent to such amendments: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled,
The Congress consents to the amendments of the State of Maryland
(chapters 674 and 675, 1984 Acts of the Maryland General Assembly), the
amendments of the Commonwealth of Virginia (chapter 610, 1984 Acts of
Assembly of Virginia; chapter 112, 1987 Acts of Assembly of Virginia),
and the amendments of the District of Columbia (D.C. Law 5-122) to
sections 62(a), 69(a), 69(b), 73, 76(a), and 76(c) of the Washington
Metropolitan Area Transit Regulation Compact. Such amendments are
substantially as follows:
(1) Section 62(a) is amended to read as follows:
"62.(a) The Board shall not make or change any fare or rate, nor
establish or abandon any service except after holding a public hearing
with respect thereto, except for service changes required by an
emergency; minor service changes as defined by regulations promulgated
by the Board; experimental service established to test the effect of
such service, and in effect for not more than six months; and fare and
service changes established for special events.".
(2) Subsections (a) and (b) of section 69 are amended to read
as follows:
"69.(a) The Board may provide for the creation and administration of
such funds as may be required. The funds shall be disbursed in
accordance with rules established by the Board and all payments from any
fund shall be reported to the Board. Moneys in such funds and other
moneys of the Authority shall be deposited, as directed by the Board, in
any branch or subsidiary of any state or national bank which has
operations within the Zone, and having a total paid-in capital of at
least one million dollars ($1,000,000). The trust department of any
state or national bank may be designated as a depositary to receive any
securities acquired or owned by the Authority. The restriction with
respect to paid-in capital may be waived for any such bank which agrees
to pledge federal securities to protect the funds and securities of the
Authority in such amounts and pursuant to such arrangements as may be
acceptable to the Board.
"(b) Any moneys of the Authority may, in the discretion of the Board
and subject to any agreement or covenant between the Authority and the
holders of any of its obligations limiting or restricting classes of
investments, be invested in:
"(1) Direct obligations of or obligations guaranteed by the
United States of America;
"(2) Bonds, debentures, notes or other evidences of
indebtedness issued by agencies of the United States of America,
including but not limited to the following: Bank for
Cooperatives; Federal Intermediate Credit Banks; Federal Home
Loan Bank System; Export-Import Bank of the United States;
Federal Land Banks; Federal National Mortgage Association;
Student Loan Marketing Association; Government National Mortgage
Association; Tennessee Valley Authority; or United States Postal
Service;
"(3) Securities that qualify as lawful investments and may be
accepted as security for fiduciary, trust and public funds under
the control of the United States or any officer or officers
thereof, or securities eligible as collateral for deposits of
moneys of the United States, including United States Treasury tax
and loan accounts;
"(4) Domestic and Eurodollar certificates of deposits; and
"(5) Bonds, debentures, notes or other evidences of
indebtedness issued by a domestic corporation, such as a
corporation organized under the laws of one of the States of the
United States, provided that such obligations are nonconvertible
and at the time of their purchase are rated in the highest rating
categories by a nationally recognized bond rating agency.".
(3) Section 73 is amended to read as follows:
"73. Contracts for the construction, reconstruction or improvement
of any facility when the expenditure required exceeds twenty-five
thousand dollars ($25,000) and contracts for the purchase of supplies,
equipment and materials when the expenditure required exceeds ten
thousand dollars ($10,000) shall be advertised and let upon sealed bids
to the lowest responsible bidder. Notice requesting such bids shall be
published in a manner reasonably likely to attract prospective bidders,
which publication shall be made at least ten days before bids are
received and in at least two newspapers of general circulation in the
Zone. The Board may reject any and all bids and readvertise in its
discretion. If after rejecting bids the Board determines and resolves
that, in its opinion, the supplies, equipment and materials may be
purchased at a lower price in the open market, the Board may give each
responsible bidder an opportunity to negotiate a price and may proceed
to purchase the supplies, equipment and materials in the open market at
a negotiated price which is lower than the lowest rejected bid of a
responsible bidder, without further observance of the provisions
requiring bids or notice. The Board shall adopt rules and regulations
to provide for purchasing from the lowest responsible bidder when sealed
bids, notice and publication are not required by this section. The
Board may suspend and waive the provisions of this section requiring
competitive bids whenever:
"(a) the purchase is to be made from or the contract is to be
made with the Federal or any State government or any agency or
political subdivision thereof or pursuant to any open-end
bulk-purchase contract of any of them;
"(b) the public exigency requires the immediate delivery of the
articles;
"(c) only one source of supply is available; or
"(d) the equipment to be purchased is of a technical nature and
the procurement thereof without advertising is necessary in order
to assure standardization of equipment and interchangeability of
parts in the public interest.".
(4) Section 76(a) is amended to read as follows:
"76.(a) The Authority is authorized to establish and maintain a
regular police force, to be known as the Metro Transit Police, to
provide protection for its patrons, personnel, and transit facilities.
The Metro Transit Police shall have the powers and duties and shall be
subject to the limitations set forth in this section. It shall be
composed of both uniformed and plaintclothes personnel and shall be
charged with the duty of enforcing the laws of the signatories, and the
laws, ordinances and regulations of the political subdivisions thereof
in the Transit Zone, and the rules and regulations of the Authority.
The jurisdiction of the Metro Transit Police shall be limited to all the
transit facilities (including bus stops) owned, controlled or operated
by the Authority, but this restriction shall not limit the power of the
Metro Transit Police to make arrests in the Transit Zone for violations
committed upon, to or against such transit facilities committed from
within or outside such transit facilities, while in hot or close pursuit
or to execute traffic citations and criminal process in accordance with
subsection (c) below. The members of the Metro Transit Police shall
have concurrent jurisdiction in the performance of their duties with the
duly constituted law enforcement agencies of the signatories and of the
political subdivisions thereof in which any transit facility of the
Authority is located or in which the Authority operates any transit
service. Nothing contained in this section shall either relieve any
signatory or political subdivision or agency thereof from its duty to
provide police, fire and other public safety service and protection, or
limit, restrict or interfere with the jurisdiction of or the performance
of duties by the existing police, fire and other public safety agencies.
For purposes of this section, 'bus stop' means that area within 150
feet of a metrobus bus stop sign, excluding the interior of any building
not owned, controlled, or operated by the Washington Metropolitan Area
Transit Authority.".
(5) Section 76(c) is amended to read as follows:
"(c) Members of the Metro Transit Police shall have power to execute
on the transit faciliies owned, controlled, or operated by the Authority
any traffic citation or any criminal process issued by any court of any
signatory or of any political subdivision of a signatory, for any
felony, misdemeanor, or other offense against the laws, ordinances,
rules, or regulations specified in subsection (a). However, with
respect to offenses committed upon, to, or against the transit
facilities owned, controlled, or operated by the Authority, the Metro
Transit Police shall have power to execute criminal process within the
Transit Zone.".
The right of Congress to alter, amend, or repeal this joint
resolution is hereby expressly reserved.
Approved April 7, 1988.
LEGISLATIVE HISTORY -- H.R. Res. 480:
HOUSE REPORTS: No. 100-521 (Comm. on the Judiciary).
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 21, considered and
passed House. Mar. 23, considered and passed Senate.
Public Law 100-284, 102 Stat. 81
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That, except as the
Office of Personnel Management may by regulation prescribe, nothing in
section 7351 of title 5, "5 USC 7351 note" United States Code, shall
apply with respect to a solicitation, donation, or acceptance of leave
under any program under which, during the fiscal year ending on
September 30, 1988, unused accrued annual leave of officers or employees
of the Federal Government may be transferred for use by other officers
or employees who need such leave due to a personal emergency.
Approved April 7, 1988.
LEGISLATIVE HISTORY -- H.R. 3981 (H.R. 3757):
HOUSE REPORTS: No. 100-519 accompanying H.R. 3757 (Comm. on Post
Office and Civil Service).
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 15, considered and
passed House. Mar. 22, H.R. 3757 considered and passed House. Mar. 23,
H.R. 3981 considered and passed Senate.
Public Law 100-283, 102 Stat. 78
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the "Age Discrimination Claims Assistance
Act of 1988". "29 USC 626 note"
SEC. 2. "29 USC 626 note" FINDINGS.
The Congress finds that --
(1) the Equal Employment Opportunity Commission (hereinafter in
this Act referred to as the "Commission") has failed to process an
undetermined number of charges filed under the Age Discrimination
in Employment Act of 1967 (29 U.S.C. 621-634) before the running
of the statute of limitations applicable to bringing civil actions
in the Federal courts under such Act, and
(2) many persons who filed such charges with the Commission
have lost the right to bring private civil actions with respect to
the unlawful practices alleged in such charges.
SEC. 3. "29 USC 626 note" EXTENSION OF STATUTE OF LIMITATIONS.
Notwithstanding section 7(e) of the Age Discrimination in Employment
Act of 1967 (29 U.S.C. 626(e)), a civil action may be brought under
section 7 of such Act by the Commission or an aggrieved person, during
the 540-day period beginning on the date of enactment of this Act if --
(1) with respect to the alleged unlawful practice on which the
claim in such civil action is based, a charge was timely filed
under such Act with the Commission after December 31, 1983,
(2) the Commission did not, within the applicable period set
forth in section 7(e) either --
(A) eliminate such alleged unlawful practice by informal
methods of conciliation, conference, and persuasion, or
(B) notify such person, in writing, of the disposition of such
charge and of the right of such person to bring a civil action on
such claim,
(3) the statute of limitations applicable under such section
7(e) to such claim ran before the date of enactment of this Act,
and
(4) a civil action on such claim was not brought by the
Commission or such person before the running of the statute of
limitations.
SEC. 4. "29 USC 626 note" NOTICE OF STATUTE OF LIMITATIONS.
(a) NOTICE REGARDING CLAIMS FOR WHICH STATUTE OF LIMITATIONS IS
EXTENDED. -- Not later than 60 days after the date of enactment of this
Act, the Commission shall provide the notice specified in subsection (b)
to each person who has filed a charge to which section 3 applies.
(b) CONTENTS OF NOTICE. -- The notice required to be provided under
subsection (a) to a person shall be in writing and shall include the
following information:
(1) The rights and benefits to which such person is entitled
under the Age Discrimination in Employment Act of 1967.
(2) The date (which is 540 days after the date of the enactment
of this Act) on which the statute of limitations applicable to
such person's claim will run.
(3) That such person may bring a civil action on such claim
before the date specified in paragraph (2).
SEC. 5. "29 USC 626 note" REPORTS.
(a) CONTENTS OF REPORTS. -- For each 180-day period in the 540-day
period beginning on the date of enactment of this Act, the Commission
shall submit a written report that includes all of the following
information:
(1) The number of persons who have claims to which section 3
applies and the dates charges based on such claims were filed with
the Commission.
(2) The number of persons to whom notice was provided in
accordance with section 4(a) and the date the notice was provided.
(3) With respect to alleged unlawful practices on which claims
affected by section 3 are based, the number of such alleged
unlawful practices that the Commission has attempted to eliminate
by informal methods of conciliation, conference, and persuasion in
the 180-day period for which the report is submitted.
(4) The number of alleged unlawful practices referred to in
paragraph (3) that were so eliminated in such period.
(5) The number of civil actions filed by the Commission on
behalf of persons to whom notice was sent under section 4.
(b) SUBMISSION OF REPORTS. -- Each report required by subsection (a)
shall be submitted by the Commission to --
(1) the Committee on Education and Labor, and the Select
Committee on Aging, of the House of Representatives, and
(2) the Committee on Labor and Human Resources, and the Special
Committee on Aging, of the Senate,
not later than 30 days after the expiration of the 180-day period for
which such report is required.
Approved April 7, 1988.
LEGISLATIVE HISTORY -- S. 2117:
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 17, considered and
passed Senate. Mar. 29, considered and passed House.
Public Law 100-282, 102 Stat. 77
Whereas the Honorable Dennis Chavez was the first native-born
Hispanic elected to the United States Senate;
Whereas Dennis Chavez served the State of New Mexico and his country
in a most distinguished manner, serving as a United States
Representative for four years and as a United States Senator for
twenty-seven years until his death in office;
Whereas Dennis Chavez was the highest ranking Hispanic in the Federal
Government for over thirty years;
Whereas Dennis Chavez was too poor to attend high school, but later
passed a special entrance exam to attend Georgetown Law School;
Whereas Dennis Chavez provided a source of pride and inspiration to
the underprivileged;
Whereas Dennis Chavez served as a spokesman for the poor and
oppressed;
Whereas Dennis Chavez exemplifies the true public servant;
Whereas Dennis Chavez provided an everlasting symbol of opportunity
found only in America; and
Whereas 1988 marks the centenary of the birth of Dennis Chavez; Now,
therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That April 8, 1988 is
designated as "Dennis Chavez Day", and the President is authorized and
requested to issue a proclamation calling upon all Government agencies
and the people of the United States to observe the day with appropraite
programs, ceremonies, and activities.
Approved April 6, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 206:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 17, considered and
passed Senate. Mar. 30, considered and passed House.
Public Law 100-281, 102 Stat. 73
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. "36 USC 4001" The Non Commissioned Officers Association
of the United States of America, Incorporated, a nonprofit corporation
organizaed under the laws of the State of Texas, is recognized as such
and is granted a Federal charter.
SEC. 2. "36 USC 4002" The Non Commissioned Officers Association of
the United States of America, Incorporated, (hereinafter in this Act
referred to as the "corporation") shall have only those powers granted
to it through its bylaws and articles of incorporation filed in the
State in which it is incorporated and subject to the laws of such State.
SEC. 3. "36 USC 4003" The objects and purposes of the corporation
are those provided in its bylaws and articles of incorporation and shall
include --
(1) upholding and defending the Constitution of the United
States;
(2) promoting health, prosperity, and scholarship among its
members and their dependents and survivors through benevolent
programs;
(3) assisting veterans and their dependents and survivors
through a service program established for that purpose;
(4) improving conditions for service members, veterans and
their dependents and survivors; and
(5) fostering fraternal and social activities among its members
in recognition that cooperative action is required for the
furtherance of their common interests.
SEC. 4. "36 USC 4004" With respect to service of process, the
corporation shall comply with the laws of the State in which it is
incorporated and those States in which it carries on its activities in
furtherance of its corporate purposes.
SEC. 5. "36 USC 4005" Except as provided in section 8, eligibility
for membership in the corporation and the rights and privileges of
members of the corporation shall be as provided in the constitution and
bylaws of the corporation.
SEC. 6. "36 USC 4006" Except as provided in section 8, the
composition of the board of directors of the corporation and the
responsibilities of such board shall be as provided in the articles of
incorporation of the corporation and in conformity with the laws of the
State in which it is incorporated.
SEC. 7. "36 USC 4007" Except as provided in section 8, the positions
of officers of the corporation and the election of members to such
positions shall be as provided in the articles of incorporation of the
corporation and in conformity with the laws of the State in which it is
incorporated.
SEC. 8. "36 USC 4008" In establishing the conditions of membership
in the corporation and in determining the requirements for serving on
the board of directors or as an officer of the corporation, the
corporation may not discriminate on the basis of race, color, religion,
sex, handicap, age, or national origin.
SEC. 9. "36 USC 4009" (a) No part of the income or assets of the
corporation may inure to the benefit of any member, officer, or director
of the corporation or be distributed to any such individual during the
life of this charter. Nothing in this subsection shall be construed to
prevent the payment of reasonable compensation to the officers of the
corporation or reimbursement for actual necessary expenses in amounts
approved by the board of directors.
(b) The corporation may not make any loan to any officer, director,
or employee of the corporation.
(c) The corporation shall have no power to issue any shares of stock
nor to declare or pay any dividends.
(d) The corporation shall not claim congressional approval or the
authorization of the Federal Government for any of its activities by
virtue of this Act.
SEC. 10. "36 USC 4010" The corporation shall be liable for the acts
of its officers and agents whenever such officers and agents have acted
within the scope of their authority.
SEC. 11. "36 USC 4011" The corporation shall keep correct and
complete books and records of account and minutes of any proceeding of
the corporation involving any of its members, the board of directors, or
any committee having authority under the board of directors. The
corporation shall keep, at its principal office, a record of the names
and addresses of all members having the right to vote in any proceeding
of the corporation. All books and records of such corporation may be
inspected by any member having the right to vote in any corporation
proceeding, or by any agent or attorney of such member, for any proper
purpose at any reasonable time. Nothing in this section shall be
construed to contravene any applicable State law.
SEC. 12. The first section of the Act entitled "An Act to provide
for audit of accounts of private corporations established under Federal
law", approved August 30, 1964 (36 U.S.C. 1101), is amended by adding at
the end thereof the following:
"The Non Commissioned Officers Association of the United States
of America, Incorporated.".
SEC. 13. "36 USC 4012" The corporation shall report annually to the
Congress concerning the activities of the corporation during the
preceding fiscal year. Such annual report shall be submitted at the
same time as the report of the audit required by section 2 of the Act
referred to in section 12 of this Act. The report shall not be printed
as a public document.
SEC. 14. "36 USC 4013" The right to alter, amend, or repeal this Act
is expressly reserved to the Congress.
SEC. 15. "36 USC 4014" For purposes of this Act, the term "State"
includes the District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, and the territories and
possessions of the United States.
SEC. 16. "36 USC 4015" The corporation shall maintain its status as
an organization exempt from taxation as provided in the Internal Revenue
Code of 1986. If the corporation fails to maintain such status, the
charter granted by this Act shall expire.
SEC. 17. "36 USC 4016" The corporation shall have the sole and
exclusive right to use the names "The Non Commissioned Officers
Association of the United States of America", "Non Commissioned Officers
Association of the United States of America", "Non Commissioned Officers
Association", and "NCOA", and such seals, emblems, and badges as the
corporation may lawfully adopt. Nothing in this section may be
construed to conflict or interfere with established or vested rights.
SEC. 18. "36 USC 4017" If the corporation shall fail to comply with
any of the restrictions or provisions of this Act, the charter granted
by this Act shall expire.
Approved April 6, 1988.
LEGISLATIVE HISTORY -- S. 1397:
HOUSE REPORTS: No. 100-522 (Comm. on the Judiciary).
CONGRESSIONAL RECORD: Vol. 133 (1987): Oct. 21, considered and
passed Senate. Vol. 134 (1988): Mar. 21, considered and passed House,
amended. Mar. 24, Senate concurred in House amendments.
Public Law 100-280, 102 Stat. 72
Resolved by the Senate and House of Representatives of the United
States of America in congress assembled, That section 1(b) of the Act of
October 17, 1985 "98 Stat. 2261" entitled "An Act to withdraw certain
public lands in Lincoln County, Nevada, and for other purposes" (Public
Law 98-485), as amended, is hereby further amended by striking out
"March 31, 1988" and by inserting in lieu thereof "June 15, 1988".
Approved April 6, 1988.
LEGISLATIVE HISTORY -- H.J. Res. 519:
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 29, considered and
passed House. Mar. 31, considered and passed Senate.
Public Law 100-279, 102 Stat. 71
Whereas Congress recognizes the historical tradition of ethical
values and principles which are the basis of civilized society and upon
which our great Nation was founded;
Whereas these ethical values and principles have been the bedrock of
society from the dawn of civilization, when they were known as the Seven
Noahide Laws;
Whereas without these ethical values and principles the edifice of
civilization stands in serious peril of returning to chaos;
Whereas society is profoundly concerned with the recent weakening of
these principles that has resulted in crises that beleaguer and threaten
the fabric of civilized society;
Whereas the justified preoccupation with these crises must not let
the citizens of this Nation lose sight of their responsibility to
transmit these historical ethical values from our distinguished past to
the generations of the future;
Whereas the Lubavitch movement has fostered and promoted these
ethical values and principles throughout the world;
Whereas Rabbi Menachem Mendel Schneerson, leader of the Lubavitch
movement, is universally respected and revered and his eighty-sixth year
will be seen as the year of continued "turn and return", the year in
which we continue to turn to an education which will return the world to
the moral and ethical values contained in the Seven Noahide Laws; and
Whereas this is reflected in the "international scroll of honor"
which has been signed by the President of the United States and other
heads of state: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That March 29, 1988, the
birthday of Rabbi Menachem Mendel Schneerson, leader and head of the
worldwide Lubavitch movement, is designated as "Education Day, U.S.A.".
The President is requested to issue a proclamation calling upon the
people of the United States to observe such day with appropriate
ceremonies and activities. We also call on heads of state of the world
to join our President in this tribute by signing the international
scroll of honor which will be presented in their respective countries
this year of completing "celebration 85".
Approved April 6, 1988.
LEGISLATIVE HISTORY -- H.J. Res. 470:
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 17, considered and
passed House. Mar. 25, considered and passed Senate.
Public Law 100-278, 102 Stat. 70
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
The segment of the National System for Interstate and Defense
Highways designated as I-195 in the State of New Jersey shall hereafter
be known and designated as the "James J. Howard Interstate Highway".
Any reference in a law, map, regulation, document, or other paper of
the United States to the highway referred to in section 1 shall be
deemed to be a reference to the "James J. Howard Interstate Highway".
Approved April 6, 1988.
LEGISLATIVE HISTORY -- H.R. 4263:
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 28, considered and
passed House and Senate.
Public Law 100-277, 102 Stat. 67
Be it enacted by the Senate and House of Repesentatives of the United
States of America in Congress assembled,
(a) IN GENERAL. -- Section 416(b)(2)(A) of the Agricultural Act of
1949 (7 U.S.C. 1431(b)(2)(A)) is amended --
(1) by striking out "grains," and inserting in lieu thereof
"wheat, rice, feed grains,"; and
(2) by inserting ", and the products thereof," after "price
support operations".
(b) CONFORMING AMENDMENTS. -- (1) Section 416(b)(10)(B)(i) of such
Act is amended by striking out "grains" both places it appears and
inserting in lieu thereof "wheat, rice, feed grains,".
(2) Section 416(b)(7) of such Act is amended by striking out ", and
products thereof,".
Section 416(b)(3) of the Agricultural Act of 1949 (7 U.S.C.
1431(b)(3)) is amended by adding at the end thereof the following:
"(D) If eligible commodities are made available under this subsection
to a friendly country, nonprofit and voluntary agencies and cooperatives
shall also be eligible to receive commodities for food aid programs in
the country.".
Section 416(b)(4) of the Agricultural Act of 1949 (7 U.S.C.
1431(b)(4)) is amended by adding at the end thereof the following: "In
agreements with recipients of eligible commodities under this subsection
(including nonprofit and voluntary agencies or cooperatives), subject to
the availability of commodities each fiscal year, the Secretary, on
request, shall approve multiyear agreements to make agricultural
commodities available for distribution or sale by the recipients if the
agreements otherwise meet the requirements of this subsection.".
(a) FOREIGN CURRENCY USES. -- Clause (ii) of section 416(b)(7)(D) of
the Agricultural Act of 1949 (7 U.S.C. 1431(b)(7)(D)(ii)) is amended to
read as follows:
"(ii) Foreign currencies generated from partial or full sales
or barter of commodities by a nonprofit and voluntary agency or
cooperative shall be used --
"(I) to transport, store, distribute, and otherwise enhance the
effectiveness of the use of commodities and the products thereof
donated under this section; and
"(II) to implement income generating, community development,
health, nutrition, cooperative development, agricultural programs,
and other developmental activities.".
(b) ALLOCATION REQUIREMENTS. -- Section 416(b)(7)(D)(iii) of such
Act is amended --
(1) by striking out "5 percent" and inserting in lieu thereof
"10 percent"; and
(2) by inserting ", or the minimum tonnage required, whichever
is greater," after "furnished".
Section 416(b)(8) of the Agricultural Act of 1949 (7 U.S.C.
1431(b)(8)) is amended by adding at the end thereof the following:
"(C)(i) If a proposal to make eligible commodities available under
this subsection is submitted by a nonprofit and voluntary agency or
cooperative with the concurrence of the appropriate United States
Government field mission or if a proposal to make such commodities
available to a nonprofit and voluntary agency or cooperative is
submitted by the United States Government field mission, a decision on
the proposal shall be provided within 45 days after receipt by the
Agency for International Development office in Washington, D.C. The
response shall detail the reasons for approval or denial of the
proposal. If the proposal is denied, the response shall specify the
conditions that would need to be met for the proposal to be approved.
"(ii) Not later than 30 days before the issuance of a final guideline
issued to carry out this subsection, the Secretary shall --
"(I) provide notice of the proposed guideline to nonprofit and
voluntary agencies and cooperatives that participate in programs
under this subsection, and other interested persons, that the
proposed guideline is available for review and comment;
"(II) make the proposed guideline available, on request, to
nonprofit and voluntary agencies, cooperatives, and others; and
"(III) take any comments received into consideration before the
issuance of the final guideline.
"(iii) Not later than 15 days after receipt of a call forward from a
field mission for commodities or products that meets the requirements of
this subsection, the order for the purchase or the supply, from
inventory, of such commodities or products shall be transmitted to the
Commodity Credit Corporation.".
Section 1107(a) of the Food Security Act of 1985 (7 U.S.C. 1736 note)
is amended by striking out ", and September 30, 1987" and inserting in
lieu thereof "through September 30, 1990".
ADVISORY COMMITTEE ACT TO AGRICULTURAL AID AND TRADE
MISSIONS.
Any agricultural aid and trade mission established under section 1 of
that portion of the joint resolution entitled "Joint resolution making
further continuing appropriations for the fiscal year 1988, and for
other purposes" approved December 22, 1987, under the heading
"Agricultural Aid and Trade Missions Act", and any other activity under
this section and sections 2 through 7 of such portion, shall not be
considered an advisory committee for the purposes of the Federal
Advisory Committee Act.
Approved April 4, 1988.
LEGISLATIVE HISTORY -- S. 2151:
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 4, considered and passed
Senate. Mar. 15, 16, considered and passed House, amended. Mar. 23,
Senate concurred in House amendments.
Public Law 100-276, 102 Stat. 62
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. GENERAL POLICY. -- It is the policy of the United States
to advance peace and democracy in Central America, and to preserve and
protect security interests in the region. Pursuant to that policy, it
is the purpose of this joint resolution to assist in bringing peace and
democracy to Central America, in a manner compatible with the Guatemala
Peace Accord of August 7, 1987, the Declaration of the Presidents of the
Central American Nations at San Jose, Costa Rica on January 16, 1988,
the Agreement Between the Government of Nicaragua and the Nicaraguan
Resistance signed March 23, 1988 at Sapoa, Nicaragua (hereinafter
referred to as the "Sapoa Agreement") and consistent with the national
security interests of the United States.
SEC. 2. CONSISTENCY WITH SAPOA AGREEMENT. -- The assistance and
support for which this joint resolution provides shall be administered
consistent with the Sapoa Agreement. No authority contained in this
joint resolution is intended to be exercised in any manner that might be
determined by the Verification Commission established by the Sapoa
Agreement to be inconsistent with that Agreement or any subsequent
agreement between the Government of Nicaragua and the Nicaraguan
democratic resistance.
SEC. 3. PURPOSE OF ADDITIONAL ASSISTANCE FOR THE NICARAGUAN
DEMOCRATIC RESISTANCE. -- (a) CONGRESSIONAL INTENT. -- It is the
intention of Congress in providing additional assistance to the
Nicaraguan democratic resistance to reinforce the Central American peace
process by supporting negotiations leading to a permanent negotiated
ceasefire agreement. Such an agreement is seen by the Congress as an
essential step towards the establishment of peace and democracy in
Nicaragua. The Congress provides assistance under this section with the
understanding and strong expectation that the Government of Nicaragua
and the Nicaraguan democratic resistance will cease permanently
offensive military activities against each other and engage in good
faith negotiations towards a permanent ceasefire.
(b) TRANSFER AND USE. -- (1) The President is authorized to transfer
to the Agency for International Development $17,700,000 of unobligated
funds from the appropriations accounts specified in section 6 to provide
assistance for the Nicaraguan democratic resistance in accordance with
this joint resolution. Funds so transferred shall remain available
through September 30, 1988.
(2) The amount which is authorized to be transferred under paragraph
(1) shall be reduced by the cost to the United States Government of any
items or services described in subsection (c)(1) which were previously,
specifically authorized by law for the Nicaraguan democratic resistance
and which are delivered to the Nicaraguan democratic resistance under
subsection (e).
(c) DESCRIPTION OF ASSISTANCE ALLOWED. -- (1) As used in this
section, "assistance" means only food, clothing, shelter, medical
services, medical supplies, and payment for such items or services.
(2) The term "assistance" under this section also includes to the
extent consistent with the Sapoa Agreement, the use of not to exceed
$1,500,000 of the funds made available under subsection (b) for the
purchase of communications equipment.
(d) LIMITATIONS. -- The amount of funds transferred under subsection
(b) which is obligated each month for purchasing items and services
described in subsection (c)(1) --
(1) for April and May 1988, shall not exceed $2,900,000, of
which not less than $400,000 each month shall be available only
for medical supplies and medical services; and
(2) for any month thereafter, shall not exceed $2,700,000,
except that each such amount for any month shall be reduced by the
cost to the United States Government of the items and services described
in subsection (c)(1) (medical supplies and medical services in the case
of the second amount specified in paragraph (1)) which were previously,
specificially authorized by law for the Nicaraguan democratic resistance
and which are delivered to the Nicaraguan democratic resistance under
subsection (e) during that month.
(e) TRANSPORTATION. -- (1) The President shall transfer to the
Agency for International Development, from unobligated funds from the
appropriations accounts specified, in section 6, such funds as may be
necessary to provide, to the extent consistent with the Sapoa Agreement,
transportation for the assistance authorized by subsection (b),
including rental and indemnification of aircraft, trucks or other
vehicles, and transportation for the items and services described in
paragraph (3) of this subsection.
(2) Transportation provided under this subsection may not be used to
deliver any assistance for the Nicaraguan democratic resistance other
than the assistance authorized by subsection (b) and the items and
services described in paragraph (3) of this subsection.
(3) Transportation may be provided under this subsection for items
and services described in subsection (c)(1) which were previously,
specifically authorized by law for the Nicaraguan democratic resistance.
(f) PROHIBITIONS. -- (1) Funds transferred by subsections (b) or (e)
may not be obligated or expended to purchase aircraft or weapons,
weapons systems, or ammunition or any other item or service not
permitted under subsection (c) or to provide any transportation other
than transportation permitted under subsection (e).
(2) Except for items delivered under subsection (e)(3), no item
authorized by "Title II -- Central America" in section 101(k) of the
continuing appropriations resolution for the fiscal year 1987 (Public
Laws 99-500 and 99-591) or section 111 of the joint resolution making
further continuing appropriations for the fiscal year 1988 (Public Law
100-202) may be provided to the Nicaragua democratic resistance.
(g) ASSISTANCE FOR YATAMA. -- (1) In order to support all elements
of the Nicaraguan democratic resistance, assistance authorized by
subsection (b) (including the cost of the United States Government of
items and services delivered under subsection (e)(3)) in the amount of
$2,190,000 shall be provided only to the Indian resistance force known
as Yatama.
(2) The Agency for International Development shall ensure that
assistance under this subsection for Yatama is provided consistent with
the Preliminary Accord signed by Yatama and the Government of Nicaragua
on February 2, 1988, and any subsequent agreement based on that Accord.
SEC. 4. DIRECTION, MANAGEMENT AND DELIVERY. -- (a) DELIVERY OF
ASSISTANCE. -- (1) The Agency for International Development shall
direct, manage and provide for the delivery of assistance and support to
the Nicaraguan democratic resistance through neutral organizations
consistent with the Sapoa Agreement and as authorized by this joint
resolution.
(2) The President shall transfer not to exceed $2,500,000 from the
unobligated funds in the appropriations accounts specified in section 6
for "Operating Expenses of the Agency for International Development" to
meet the necessary administrative expenses to carry out the purposes of
this joint resolution.
(b) INAPPLICABILITY OF CERTAIN PROHIBITIONS. -- Prohibitions on the
furnishing of foreign assistance to Nicaragua shall not be construed to
apply to the provision within Nicaragua of the assistance authorized by
this joint resolution.
(c) ACCOUNTABILITY STANDARDS, PROCEDURES, AND CONTROLS. -- In
implementing this joint resolution, the Agency for International
Development shall adopt standards, procedures, and controls for the
accountability of funds comparable to those applicable with respect to
the assistance for the Nicaraguan democratic resistance provided under
section 111 of the joint resolution making further continuing
appropriations for the fiscal year 1988 (Public Law 100-202).
(d) INTERAGENCY COOPERATION. -- All Government agencies shall
cooperate with the Agency for International Development to ensure the
orderly, effective direction, management, and delivery by the Agency of
assistance for the Nicaraguan democratic resistance. Such cooperation
shall include detailing to the Agency, on a reimbursable basis, such
personnel as the Agency, with the approval of the President, may
request.
(e) SUPPLEMENTAL AUTHORITIES. -- In addition to the authorities
otherwise available by law to the Agency for International Development,
in carrying out this joint resolution, the Agency for International
Development may exercise the same authorities, including authorities
relating to procurement and expenditure of Government funds other than
confidential funds, as the agency administering the assistance provided
pursuant to section 111 of the joint resolution making further
continuing appropriations for the fiscal year 1988 (Public Law 100-202)
could exercise with respect to provision of that assistance.
SEC. 5. GENERAL AUTHORITIES AND LIMITATIONS. -- (a) REQUIREMENTS
DEEMED SATISFIED. -- The requirements, terms and conditions of section
104 of the Intelligence Authorization Act, Fiscal Year 1988 (Public Law
100-178), section 8144 of the Department of Defense Appropriations Act,
1988 (as contained in section 101(b) of Public Law 100-202), section 10
of Public Law 91-672, section 502 of the National Security Act of 1947,
section 15(a) of the State Department Basic Authorities Act of 1956, and
any other provision of law shall be deemed to have been met for the
transfer and use, consistent with the provisions of this joint
resolution, of the funds made available by this joint resolution.
(b) CONTINUATION OF LIMITATIONS. -- Sections 203(e), 204(b), 207,
209(b), 209(c), and 216 in "Title II -- Central America" in section
101(k) of the continuing appropriations resolution for the fiscal year
1987 (Public Laws 99-500 and 99-591), shall apply with respect to funds
made available by this joint resolution, except that section 216 shall
not apply with respect to personnel of the Agency for International
Development or the Department of State.
SEC. 6. DEFENSE APPROPRIATOINS ACCOUNTS. -- The appropriations
accounts to which this resolution refers are the following accounts in
the Department of Defense Appropriations Act, 1986, as contained in
section 101(b) of the further continuing appropriations resolution for
the fiscal year 1986 (Public Law 99-190):
(1) Missile Procurement, Army;
(2) Other, Procurement, Army;
(3) Other Procurement, Navy;
(4) Missile Procurement, Air Force;
(5) Aircraft Procurement, Air Force; and
(6) Weapons Procurement, Navy;
except that section 1351 of the National Defense Authorization Act
for Fiscal Year 1987 (Public Law 99-661) shall apply.
SEC. 7. AUDIT OF FUNDS. -- The Comptroller General shall conduct an
independent audit of funds expended in the provision of assistance and
support under this joint resolution.
SEC. 8. CHILDREN'S SURVIVAL ASSISTANCE. -- (a) AUTHORIZATION. --
The President shall transfer to the Agency for International Development
$17,700,000 of unobligated funds from the appropriations accounts
specified in section 6 to provide medical care and other relief for
children who are victims of the Nicaraguan civil strife. Such
assistance shall be used to make available prosthetic devices and
rehabilitation, provide medicines and immunizations, assist burn
victims, help children who have been orphaned, and otherwise provide
assistance for children who have been physically injured or displaced by
the Nicaraguan civil strife. Priority shall be given to those children
with the greatest needs for assistance. Funds transferred pursuant to
this subsection shall remain available until expended.
(b) USE OF PVO'S AND INTERNATIONAL RELIEF ORGANIZATIONS. --
Assistance pursuant to this section shall be provided only through
nonpolitical private and voluntary organizations and international
relief organizations. Preference in the distribution of such assistance
shall be given to organizations presently providing similar services
such as the Catholic Relief Services, International Committee of the Red
Cross, CARE, United Nations Children's Fund, United Nations High
Commissioner for Refugees, Partners of the Americas, and the
Pan-American Health Organization.
(c) CHILDREN IN NICARAGUA. -- At least one-half of the assistance
provided under this section shall be provided through nonpolitical
private and voluntary organizations and international relief
organizations operating inside Nicaragua. None of this assistance may
be provided to or through the Government of Nicaragua.
SEC. 9. VERIFICATION COMMISSION. -- The President shall transfer to
the Agency for International Development $10,000,000 of unobligated
funds from the appropriations accounts specified in section 6 for
periodic payments to support the activities of the Verification
Commission established by the Sapoa Agreement. Funds transferred
pursuant to this section shall remain available until expended.
Approved April 1, 1988.
LEGISLATIVE HISTORY -- H.J. Res. 523:
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 30, considered and
passed House. Mar. 31, considered and passed Senate.
Public Law 100-275, 102 Stat. 52
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
This Act may be cited as the "Nevada-Florida Land Exchange
Authorization Act of 1988".
As used in this Act:
(1) The term "land" means lands and interests (including the
reserved mineral estate) therein, including leaseholds.
(2) The term "Secretary" means the Secretary of the Interior.
(3) The term "Aerojet" means the Aerojet-General Corporation,
an Ohio corporation.
(4) The term "exchange agreement" means an agreement between
the Secretary and Aerojet which is entered into for purposes of
making the exchange authorized by this Act and which meets the
requirements of this Act.
(5) The term "lease agreement" means an agreement between the
Secretary and Aerojet which is entered into for the purpose of
making the lease authorized and directed by this Act and which
meets the requirements of this Act.
(6) The term "endangered or threatened species" means an
endangered species or a threatened species, as defined in the
Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.).
(a) AUTHORIZATION. -- Subject to valid existing rights, the
Secretary is authorized and directed to convey and lease public lands in
the State of Nevada, described in subsection (b)(1), in exchange for the
conveyance to the United States of the lands in Dade County, Florida,
described in subsection (b)(2).
(b) LANDS TO BE EXCHANGED. --
(1) NEVADA. -- (A) Public lands to be coveyed by the Secretary
pursuant to this Act are the public lands, comprised of
approximately twenty-eight thousand eight hundred acres, described
as "For Conveyance to Aerojet General Corporation" on the map
entitled "Public Domain Lands to be Exchanged and Leased to
Aerojet-General Corporation, Clark and Lincoln Counties, Nevada,"
dated October 1987, and the public lands, comprised of
approximately ten thousand and forty acres, generally depicted on
the map entitled "Public Domain Lands to be Exchanged to
Aerojet-General Corporation, Mineral County, Nevada," dated
February 1987.
(B) In furtherance of an exchange pursuant to this Act, the
Secretary shall also lease to Aerojet the lands described in
section 4.
(2) FLORIDA. -- The private lands to be acquired by the
Secretary pursuant to this Act are all right, title, and interest
of Aerojet (exclusive of severable use rights) in and to
approximately four thousand six hundred and fifty acres of land as
generally depicted on the map entitled "Aerojet-General
Corporation Lands to be Exchanged to United States Fish and
Wildlife Service, Dade County, Florida," dated February 1987, and
available for inspection in the Office of the Secretary.
(c) CONVEYANCE DOCUMENTS. --
(1) BEFORE SURVEY. -- Lands to be conveyed by the United
States pursuant to this Act which have not been surveyed, or with
respect to which any boundary needs to be surveyed, shall be
conveyed by an interim conveyance. An interim conveyance under
this paragraph shall convey to and vest in the recipient the same
right, title, and interest in and to such lands as the recipient
would have received in a patent issued pursuant to this Act.
(2) PATENT. -- Upon being surveyed, the Secretary shall issue
a patent for such lands. The boundary of such lands shall be that
which was defined in and conveyed by the interim conveyance,
except that the boundary may be corrected and redescribed in the
patent, where necessary, as a result of the survey of such lands.
(3) FINALITY. -- The issuance of an interim conveyance or
patent pursuant to this section shall be subject to valid existing
rights and shall be final and irrevocable. The United States
shall not be required to accept a reconveyance or to take any
actions with regard to the lands covered by such interim
conveyance or patent.
(4) DISCREPANCIES. -- The acreages cited in this Act are
approximate, and in the event of discrepancies between cited
acreages and the maps referred to in this section, the maps shall
control.
(d) TERMS AND CONDITIONS. -- The Secretary shall include in any
interim conveyance, patent, or lease subject to this Act all terms and
conditions required by this Act. Such terms and conditions shall apply
to all subsequent purchasers, transferees, and other holders of any land
covered by any such interim conveyance, patent, or lease.
(e) LEGAL DESCRIPTION. -- Within six months after the completion of
an exchange pursuant to this Act, the Secretary shall file maps and
legal descriptions of the lands so exchanged (including lands conveyed
and leased by the United States) with the Committee on Energy and
Natural Resources of the Senate and the Committee on Interior and
Insular Affairs of the House of Representatives. Such legal
descriptions shall have the same force and effect as if included in this
Act, except that the Secretary may correct clerical and typographical
errors in such legal descriptions and in the maps referred to in
subsection (a). Such legal descriptions and maps shall also be on file
and available for public inspection in the Nevada office of the State
Director of the Bureau of Land Management, Department of the Interior.
For purposes of this subsection, the issuance of a conveyance document
(either a patent or an interim conveyance) or lease, whichever is later,
shall constitute completion of an exchange.
(a) LEASE. --
(1) GENERAL AUTHORITY. -- The Secretary is authorized and
directed to lease to Aerojet the approximately fourteen thousand
acres of public lands described as "for Lease to Aerojet" on the
map entitled "Public Lands to be Exchanged and Leased to
Aerojet-General Corporation, Clark and Lincoln Counties, Nevada,"
dated October 1987. Any such lease shall be subject to subsection
(b) and to the terms and conditions specified in section 5.
(2) WITHDRAWAL. -- Subject to valid existing rights, the lands
described in paragraph (1) are withdrawn from all forms of entry
and appropriation under the public land laws (including the mining
laws) and from the operation of the mineral leasing and geothermal
leasing laws. The withdrawal of such lands shall remain in effect
so long as such lands are leased under authority of this Act.
(b) REQUIREMENTS RELATING TO LEASE. --
(1) TERM. -- Any lease issued pursuant to subsection (a) shall
be for an initial term of ninety-nine years, during which time no
rental shall be required to be paid to the United States. Lands
leased pursuant to subsection (a) shall not be deemed to be
entitlement lands for purposes of Public Law 94-565 (31 U.S.C.
1601 et seq.).
(2) USE OF LEASED LANDS. -- During the term of any lease
issued pursuant to subsection (a), the lessee shall be entitled to
use the lands which are subject to such lease only for purposes of
constructing and using necessary roads, utility lines, storage
facilities, and wells. The lessee also shall be entitled to use
such lands for such other related purposes as the Secretary may
from time to time permit, subject to the requirements of this Act
and other applicable law and to reasonable requirements the
Secretary, acting through the Director of the Fish and Wildlife
Service, may establish for the protection of fish, wildlife, or
plants. The lease shall provide that the lessee shall consult
with the Secretary concerning the location of any roads, utility
lines, facilities, and wells on the leased lands, and that with
regard to any such location, the lessee, so far as possible, shall
follow recommendations of the Secretary intended to minimize
adverse impacts on the desert tortoise and other species of
wildlife or plants.
(3) FISH, WILDLIFE, AND PLANTS. -- Any lease issued pursuant
to subsection (a) shall require the lessee to take all reasonable
steps the Secretary, acting through the Director of the Fish and
Wildlife Service, may from time to time require to minimize
adverse impacts on desert tortoises and other species of fish,
wildlife, and plants (including, but not limited to, endangered or
threatened species) from the lessee's activities occurring on such
lands.
(4) ASSIGNABILITY. -- A lease issued pursuant to this section
may be assigned or transferred by Aerojet only with the consent of
the Secretary, which shall not be unreasonably withheld.
(a) VALUE. --
(1) EQUALIZATION OF VALUE. -- Any exchange of lands pursuant
to this Act shall be on the basis of equal value as determined by
the Secretary, except that the Secretary may accept a payment of
money in order to equalize values between lands transferred, or
leased, to Aerojet by the Secretary and lands transferred to the
United States by Aerojet. The Secretary shall require that any
conveyance of a production well drilled at Federal expense which
Aerojet or its successors or assigns subsequently uses for
withdrawal of water for industrial purposes shall be in
consideration of receipt by the United States of land or money
equal in value to the cost of drilling a well suitable for
industrial purposes and located at the same site as the well
conveyed.
(2) APPRAISAL. -- Any determination by the Secretary of values
of lands to be conveyed or leased by the Secretary pursuant to
this Act shall be based on the fair market value of such lands, as
determined by appraisals carried out in accordance with
established procedures used by the Bureau of Land Mangement and
done after the date of enactment of this Act by qualified
appraisers selected and reimbursed by the Secretary. The values
of lands to be conveyed by Aerojet pursuant to this Act shall be
the values agreed to pursuant to section 7(a).
(3) NOTICE AND PUBLIC INSPECTION. -- Upon completion of such
appraisals, the Secretary shall --
(A) publish in newspapers of general circulation in Clark,
Lincoln, and Mineral Counties, Nevada, a notice as to where and
when the results of appraisals carried out pursuant to this Act
will be available for public inspection, and
(B) transmit to the Committee on Energy and Natural Resources
of the Senate and the Committee on Interior and Insular Affairs of
the House of Representatives a copy of such appraisals and the
determination by the Secretary of the values of lands to be
conveyed and leased.
The Secretary shall not issue any interim conveyance, patent,
or lease pursuant to this Act before ten days after such
transmittals are made to the committees specified in subparagraph
(B).
(b) TRANSMISSION CORRIDOR. --
(1) RESERVATION TO THE UNITED STATES. -- The transfer of the
lands in Clark and Lincoln Counties, Nevada to be conveyed to
Aerojet under this Act shall be subject to the reservation to the
United States of the right-of-way corridor described in the draft
exchange agreement referred to in subsection (g). This corridor
shall be designated and administered by the Secretary, who may
grant rights-of-way over, upon, under, and through the corridor
for systems and facilities used or useful for the construction,
operation, and maintenance of electric transmission lines
consistent with title V of the Federal Land Policy and Management
Act of 1976 (43 U.S.C. 1761 et seq.).
(2) ACTIVITIES IN TRANSMISSION CORRIDOR. -- Activities to
construct, operate, and maintain electric transmission lines
within the corridor shall be given priority over all conflicting
activities. The Secretary shall take all reasonable actions to
facilitiate and protect the activities planned and proposed for
the land in Clark County and Lincoln County, Nevada, referred to
in section 3(b), by Aerojet-General Corporation relating to the
development, manufacture, and testing of rocket motors or other
aerospace and defense products, including the granting of
rights-of-way to Aerojet-General Corporation for roads across the
corridor connecting the eastern and western portions of the land
in Clark County and Lincoln County, Nevada, referred to in section
3(b).
(3) ALTERNATIVE TO CORRIDOR ON CERTAIN LANDS. -- If, after
five years from the date of enactment of this Act, other public
lands within the six-mile width of land immediately west of the
Clark County and Lincoln County, Nevada, land referred to in
section 3(b) are returned to multiple use, are suitable as an
alternative to the corridor reserved in this subsection, and are
made available for the construction, operation, and maintenance of
electric transmission lines, no further rights-of-way or other
rights or privileges to construct, operate, and maintain electric
transmission lines within the corridor reserved in this subsection
shall be granted by the Secretary unless --
(A) such rights-of-way or other rights or privileges are
pursuant to or in furtherance or continuation of the specific
rights referred to in subsection (c);
(B) at the time the land becomes so available there is pending
an application for a right-of-way in the corridor reserved in this
subsection and in the opinion of the Secretary such application is
being diligently pursued; or
(C) such rights-of-way or other rights or privileges are in
renewal of a right-of-way granted prior to the land becoming so
available.
(c) PRESERVATION IF EXISTING RIGHTS. -- The existing rights referred
to in section 3(a) include the right-of-way (Number U-42519, granted
April 3, 1980) to construct, operate, and maintain an electric
transmission line from the Intermountain Power Project at Delta, Utah,
through the land in Clark County and Lincoln County, Nevada, referred to
in section 3(b), and the interest of the White Pine Power Project in the
Southern Transmission System (described and analyzed in the final
Environmental Impact Statement as the selected alternative and displayed
on the map attached to the Record of Decision approved on March 26,
1985), within the land in Clark County and Lincoln County, Nevada,
referred to in section 3(b). Nothing in this Act or in the draft
exchange agreement referred to in subsection (g) shall negate or
diminish such existing rights in any respect, except that (unless
otherwise agreed to by the owner of the land in Clark County and Lincoln
County, Nevada, referred to in section 3(b)) on and after the
consummation of the exchange of lands authorized by this Act and without
further act by the holders of such existing rights, such existing rights
shall be altered so that --
(1) all transmission lines and related facilities to be located
on the land in Clark County and Lincoln County, Nevada, referred
to in section 3(b) pursuant to such existing rights may only be
located within the corridor referenced in subsection (b); and
(2) the right to locate such transmission lines and related
facilities pursuant to such existing rights on the land in Clark
County and Lincoln County, Nevada, referred to in section 3(b)
outside of that corridor shall be extinguished and of no further
force or effect.
(d) OFF-ROAD VEHICLES AND ALL-TERRAIN VEHICLES. -- Except for
purposes of administration or in cases of emergency or for public
safety, off-road vehicles and all-terrain vehicles may not be used on
unroaded portions of land located in the State of Nevada which is
conveyed or leased under this Act.
(e) IMMUNITY. -- Notwithstanding any other provision of law, the
United States, its officers, employees, and instrumentalities, may not
be held liable for, and shall be immune from, any claim arising from any
acts or omissions of Aerojet, its employees, agents, successors, or
assigns, on or related to any land conveyed or leased pursuant to this
Act.
(f) OTHER REQUIREMENTS. -- Any exchange pursuant to this Act
(including any conveyance and any lease) shall be performed in
accordance with and subject to the terms of this Act, the exchange
agreement, and the lease agreement.
(g) AGREEMENTS. --
(1) IN GENERAL. -- The issuance of any interim conveyance,
patent, or lease in furtherance of an exchange under this Act
shall be governed by and be in accordance with a written exchange
agreement and lease agreement between the Secretary and Aerojet
which shall incorporate the relevant terms and conditions of this
Act. Such agreements shall incorporate all provisions of the
draft exchange agreement and draft lease agreement, respectively,
dated October 1, 1987, printed as Appendices to the Report of the
Committee on Energy and Natural Resources to accompany S. 854 (S.
Rept. 100-292), which are not inconsistent with this Act.
(2) LIMITATIONS. -- The Secretary shall not agree to the
inclusion in the exchange agreement of any terms or conditions
which, after completion of the exchange authorized and directed by
this Act, would limit the ability of the Secretary to properly
manage lands in Nevada or Florida for which the Secretary will
have responsibility, or which, after completion of such exchange,
would prevent the Secretary from properly discharging the
responsibilities of the Secretary under any then-applicable
provision of law. Nothing in the exchange agreement shall afford
Aerojet or any other party a preferential position with regard to
purchase or lease of any public lands other than those described
in this Act.
(3) RULE OF CONSTRUCTION; NOTIFICATION. -- In the case of any
inconsistency between the terms of the exchange agreement or the
lease agreement or any amendments thereto and this Act, the
provisions of this Act shall prevail. The Secretary shall not
agree to any amendment to either the exchange agreement or the
lease agreement without first consulting with the Committee on
Energy and Natural Resources of the Senate and the Committee on
Interior and Insular Affairs of the House of Representatives, and
shall transmit copies of any such amendment to such committees at
the time of agreeing to such amendment.
(a) GROUND WATER. --
(1) MONITORING OF CONDITIONS AND HABITAT. -- The Secretary,
acting through the Director of the Fish and Wildlife Service,
shall monitor the conditions and habitat of endangered or
threatened species whose habitat the Secretary believes could be
affected by the withdrawal of ground water from the aquifer
beneath lands conveyed or leased pursuant to this Act.
(2) POTENTIAL ADVERSE EFFECTS. -- If the Secretary has
reasonable evidence to believe that the withdrawal of ground water
from the aquifer beneath lands conveyed and leased pursuant to
this Act is likely to adversely affect the habitat of any
endangered or threatened species, the Secretary shall --
(A) promptly notify Aerojet (or its successors or assigns in
the event that Aerojet has transferred its interests in such
lands), the Committee on Energy and Natural Resources of the
Senate, the Committee on Interior and Insular Affairs of the House
of Representatives, and the State Engineer of Nevada concerning
such likely adverse effect of such withdrawal; and
(B) request the State Engineer to take appropriate action, in
accordance with applicable laws of the State of Nevada, to
ascertain whether the withdrawal of ground water from such aquifer
is in fact reducing the supply of water to the habitat of any
endangered or threatened species, and, if so, to mitigate that
reduction in accordance with applicable laws of the State of
Nevada.
(3) DEPLETION. -- In the event that the State Engineer of
Nevada determines that the withdrawal of ground water from beneath
lands conveyed or leased pursuant to this Act or from beneath
other lands underlain by the same aquifer is causing depletion of
water to a surface water habitat of any endangered or threatened
species, Aerojet (or its successors or assigns) and the Secretary
shall jointly petition the State Engineer to reduce the total
water allocation in the affected area, or to take any other
actions authorized by State law, in order to eliminate such
depletion of water to such habitat.
(b) ALTERNATIVE SOURCES OF WATER. -- The Secretary may not convey or
lease lands under this Act until the Secretary has been assured by the
State Engineer of Nevada that Aerojet has developed a feasible plan,
consistent with applicable laws of the State of Nevada, for obtaining an
alternative source of water (other than the withdrawal of ground water
from the aquifer beneath lands conveyed and leased under this Act) to be
used, in total or in part, in the event that Aerojet or a successor in
interest is required to cease pumping ground water from beneath the
conveyed or leased lands.
(c) ACCESS FOR MONITORING. -- The Secretary, acting through the
Director of the Fish and Wildlife Service, shall have access at any time
to any land conveyed or leased under this Act to monitor --
(1) the pumping of ground water from such land,
(2) the condition of endangered or threatened species located
on such land,
(3) the impact of any activity occurring on such land on
wildlife and plants, including (but not limited to) endangered or
threatened species.
In exercising such right of access, the Secretary shall afford
reasonable notice to Aerojet (or its successors or assigns).
(d) POLLUTION CONTROLS. -- Nothing in this Act shall be construed as
limiting or impairing the power of any Federal or State agency to
monitor and regulate the handling by Aerojet or its successors in
interest of hazardous materials or wastes or air or water pollutants to
assure compliance with applicable State and Federal laws. The
Secretary, from time to time, shall consult and cooperate with the
Administrator of the Environmental Protection Agency and appropriate
officials of the State of Nevada to facilitate such monitoring and
regulation.
DISTRICT.
(a) SALE TO SOUTH FLORIDA WATER MANAGEMENT DISTRICT. --
Notwithstanding any other provision of law, the Secretary is authorized
and directed to sell by issuance of a quitclaim deed any lands acquired
in accordance with an exchange pursuant to this Act to the South Florida
Water Management District at such per-acre price as may be mutually
agreed upon by the Secretary and the District.
(b) USE OF FUNDS RECEIVED BY THE UNITED STATES. -- Notwithstanding
any other provision of law, any funds received by the United States from
the sale of lands authorized by subsection (a) and from any payments by
Aerojet to equalize values of lands exchanged pursuant to this Act shall
be deposited in the "Contributed Fund Account" of the Fish and Wildlife
Service, and shall be utilized for the purchase of additional lands at
existing elements of the National Wildlife Refuge System in the State of
Florida. Such funds shall be available for obligation without
appropriation.
(c) NOTICE TO CONGRESS. -- The Secretary shall notify the Committee
on Appropriations of the Senate and the Committee on Appropriations of
the House of Representatives of any proposal to obligate funds received
in accordance with the provisons of subsection (a) at least sixty days
prior to the obligation of such funds.
Any public land in the State of Nevada which, as of March 1, 1987,
was managed pursuant to section 603(c) of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1782) shall be retained in Federal
ownership and shall continue to be so managed until Congress determines
otherwise.
Nothing in this Act or in the exchange and lease agreements shall be
construed as affirming or denying the validity of any claim which is
pending on the date of enactment of this Act by any Indian tribe or any
other person with respect to any lands in Nevada.
(a) GENERAL PROVISIONS. -- Except as provided in subsection (b),
nothing in this Act shall be construed as limiting any right of the
Secretary or any other person to bring any action with regard to the
responsibilities of the Secretary or any other person under applicable
law, as affected or modified by this Act. The Secretary shall not
include in the exchange agreement any term or condition that would limit
the ability of the Secretary to bring any action or take any other step
the Secretary may find appropriate in order to carry out the
responsibility of the Secretary under this Act or any other applicable
provision of law, as affected or modified by this Act.
(b) FINDING AND LIMITATION. -- The Congress hereby finds that
studies and analyses completed prior to the date of enactment of this
Act have made available information sufficient to meet the objectives of
the National Environmental Policy Act of 1969 and other relevant law so
far as concerns the possible environmental and other effects of the
conveyance and lease of public lands in Nevada as provided for in this
Act, and that the provisions of this Act adequately address such
possible effects.
(c) LIMITATION. -- Based on the finding set forth in subsection (b),
the congress directs that the execution or consummation of any
agreement, or the issuance of an interim conveyance, patent, or lease,
pursuant to and in accordance with the provisons of this Act, shall not
be subject to judicial review with respect to any complaint alleging a
failure by the Secretary or any other person to comply with any
provision of law other than the provisions of this Act.
It is the sense of Congress that the Secretary shall execute the
exchange agreement and the lease agreement and shall implement the
conveyance and lease of lands pursuant to this Act no later than one
hundred and twenty days after the date of enactment of this Act.
(a) PREPARATION. -- The Secretary shall --
(1) review the status of populations of desert tortoises on
lands in Nevada and other States managed by the Secretary, other
than lands conveyed or leased pursuant to this Act;
(2) assess the nature and extent of threats to the continued
health or stability of such populations on such lands; and
(3) prepare a comprehensive plan to address such threats
through --
(A) reductions in the extent to which uses of such lands which
are potentially harmful to such populations are permitted to
occur; and
(B) other measures to remove or mitigate such threats.
(b) CONSULTATION. -- In preparing the plan required by subsection
(a), the Secretary shall consult with State officials, other Federal
agencies responsible for management of lands where desert tortoise
populations are located, the Desert Tortoise Council, and other persons
or groups identified by the Secretary as having expertise relevant to
the requirements of this section.
(c) DEADLINES AND REPORTS. --
(1) REVIEW AND ASSESSMENT. -- The review and assessment
required by paragraphs (1) and (2) of subsection (a) shall be
completed and the results thereof shall be made available to the
public and transmitted to the Committee on Energy and Natural
Resources of the Senate and the Committee on Interior and Insular
Affairs of the House of Representatives no later than two years
after the date of enactment of this Act.
(2) PLAN. -- The plan requried by subsection (a)(3) shall be
developed and transmitted to the Committee on Energy and Natural
Resources of the Senate and the Committee on Interior and Insular
Affairs of the House of Representatives no later than three years
after the date of enactment of this Act. A failure by the
Secretary to transmit such report within such three-year period
shall not relieve the Secretary from the requirement to prepare
such plan.
Approved March 31, 1988.
LEGISLATIVE HISTORY -- S. 854:
SENATE REPORTS: No. 100-292 (Comm. on Energy and Natural Resources).
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 4, considered and passed
Senate. Mar. 15, considered and passed House.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): Mar.
31, Presidential statement.
Public Law 100-274, 102 Stat. 48
Be it enacted by the Seante and House of Representatives of the
United States of America in Congress assembled,
Section 5132(a) of title 31, United States Code, is amended by
striking out paragraph (2) and inserting in lieu thereof the following
new paragraphs:
"(2) Not more than $46,511,000 may be appropriated to the Secretary
for the fiscal year ending on September 30, 1988, to pay costs of the
mints. Not more than $965,000 of amounts appropriated pursuant to the
preceding sentence shall remain available until expended for research
and development.
"(3) Of amounts appropriated pursuant to paragraph (2), not more than
$75,000 may be expended for the purpose of the hosting the International
Mint Directors' Conference in the United States in 1988, including
reception, representation, and transportation expenses.
"(4) Notwithstanding sections 3302 and 9701 of this title, the
Director of the Mint may --
"(A) collect from participants at the International Mint
Directors' Conference reasonable amounts imposed as fees and other
assessments in connection with such conference;
"(B) hold and administer the amounts referred to in
subparagraph (A); and
"(C) spend on behalf of the United States the amounts referred
to in subparagraph (A) to pay expenses incurred in connection with
such conference, including reception, representation, and
transportation expenses.".
(a) SAN FRANCISCO. -- Section 5131(a)(4) of title 31, United States
Code, is amended by striking out "assay office" and inserting in lieu
thereof "mint".
(b) WEST POINT. -- Section 5131(a)(3) of title 31, United States
Code, is amended by striking out "assay office at New York" and
inserting in lieu thereof "mint at West Point".
(c) TECHNICAL AND CONFORMING AMENDMENTS. --
(1) The first sentence of section 5131(b) of title 31, United
States Code, is amended by striking out "and assay offices, except
that only bars may be made at the assay offices".
(2) Section 5131(c) of such title is amended by striking out
"and the assay office at New York have" and inserting in lieu
thereof "has".
(3) Section 5132(b) of such title is amended by striking out
"and assay offices".
(4) Section 5133(a)(1) of such title is amended by striking out
"and the assay office at New York and the officer in charge of the
assay office at San Francisco" and by striking out "or officer".
(5) Section 5133(a)(2) of such title is amended by striking out
"and the officer" and by striking out "or officer".
(6) Section 5133(a)(3) of such title is amended by striking out
"and the officer".
(7) Section 5133(b) of such title is amended to read as
follows:
"(b) SETTLEMENT OF ACCOUNTS. --
"(1) IN GENERAL. -- At least once each year, the Secretary of
the Treasury shall settle the accounts of the superintendents of
the mints.
"(2) PROCEDURE. -- At any settlement under this subsection,
the superintendent shall --
"(A) return to the Secretary any coin, clipping, or other
bullion in the possession of the superintendent; and
"(B) present the Secretary with a statement of bullion received
and returned since the last settlement (including any bullion
returned for settlement).
"(3) AUDIT. -- The Secretary shall --
"(A) audit the accounts of each superintendent; and
"(B) allow each superintendent the waste of precious metals
that the Secretary determines is necessary --
"(i) for refining and minting (within the limitations which the
Secretary shall prescribe); and
"(ii) for casting fine gold and silver bars (within the limit
prescribed for refining), except that any waste allowance under
this clause may not apply to deposit operations.".
(8) Upon the enactment of this Act, the superintendent of the
United States Assay Office at New York, New York, shall assume the
position of superintendent of the Mint at West Point, New York.
(9) Section 5133(c) of such title is amended by striking out
"and assay offices".
(10) Section 5133(d) of such title is amended --
(A) in the first sentence, by striking out "and assay office";
and
(B) in the third sentence, by striking out "and assay offices".
Section 5111(c) of title 31, United States Code, is amended to read
as follows:
"(c) PROCUREMENTS RELATING TO COIN PRODUCTION. --
"(1) IN GENERAL. -- The Secretary may make contracts, on
conditions the Secretary decides are appropriate and are in the
public interest, to acquire articles, materials, supplies, and
services (including equipment, manufacturing facilities, patents,
patent rights, technical knowledge, and assistance) necessary to
produce the coins referred to in this title.
"(2) DOMESTIC CONTROL OF COINAGE. -- (A) Subject to
subparagraph (B), in order to protect the national security
through domestic control of the coinage process, the Secretary
shall acquire only such articles, materials, supplies, and
services (including equipment, manufacturing facilities, patents,
patent rights, technical knowledge, and assistance) for the
production of coins as have been produced or manufactured in the
United States unless the Secretary determines it to be
inconsistent with the public interest, or the cost to be
unreasonable, and publishes in the Federal Register a written
finding stating the basis for the determination.
"(B) Subparagraph (A) shall apply only in the case of a bid or
offer from a supplier the principal place of business of which is
in a foreign country which does not accord to United States
companies the same competitive opportunities for procurements in
connection with the production of coins as it accords to domestic
companies.
"(3) DETERMINATION. --
"(A) IN GENERAL. -- Any determination of the Secretary
referred to in paragraph (2) shall not be reviewable in any
administrative proceeding or court of the United States.
"(B) OTHER RIGHTS UNAFFECTED. -- This paragraph does not alter
or annul any right of review that arises under any provision of
any law or regulation of the United States other than paragraph
(2).
"(4) Nothing in paragraph (2) of this subsection in any way
affects the procurement by the Secretary of gold and silver for
the production of coins by the United States Mint.".
(a) FINENESS. -- Section 5112(b) of title 31, United States Code, is
amended by inserting the following sentence before the last sentence:
"In minting gold coins, the Secretary shall use alloys that vary not
more than 0.1 percent from the percent of gold required.".
(b) WEIGHT. -- Section 5113(a) of title 31, United States Code, is
amended by adding at the end thereof the following new sentence: "Any
gold coin issued under section 5112 of this title shall contain the full
weight of gold stated on the coin.".
DEBT.
The second sentence of section 5116(a)(2) of title 31, United States
Code, is amended to read as follows: "Amounts received from the sale of
gold shall be deposited by the Secretary in the general fund of the
Treasury and shall be used for the sole purpose of reducing the national
debt.".
Section 5112(f) of title 31, United States Code, is amended to read
as follows:
"(f) SILVER COINS. --
"(1) SALE PRICE. -- The Secretary shall sell the coins minted
under subsection (e) to the public at a price equal to the market
value of the bullion at the time of sale, plus the cost of
minting, marketing, and distributing such coins (including labor,
materials, dies, use of machinery, and promotional and overhead
expenses).
"(2) BULK SALES. -- The Secretary shall make bulk sales of the
coins minted under subsection (e) at a reasonable discount.
"(3) NUMISMATIC ITEMS. -- For purposes of section 5132(a)(1)
of this title, all coins minted under subsection (e) shall be
considered to be numismatic items.".
Approved March 31, 1988.
LEGISLATIVE HISTORY H.R. 2631:
SENATE REPORTS: No. 100-260 (Comm. on Banking, Housing, and Urban
Affairs).
CONGRESSIONAL RECORD: Vol. 133 (1987): Oct. 6, considered and
passed House. Vol. 134 (1988): Feb. 17, considered and passed Senate,
amended. Mar. 10, House concurred in Senate amendments.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): Mar.
31, Presidential statement.
Public Law 100-273, 102 Stat. 47
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the President is
authorized and requested to issue a proclamation designating April 24
through April 30, 1988, as "National Organ and Tissue Donor Awareness
Week".
Approved March 30, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 255:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 22, considered and passed House.
Public Law 100-272, 102 Stat. 46
Whereas water itself is God-given, and the drinking water that flows
dependably through our household taps results from the dedication of the
men and women who operate the public water systems of collection,
storage, treatment, testing, and distribution that insures that drinking
water is available, affordable, and of unquestionable quality;
Whereas the advances in health effects research and water analysis
and treatment technologies, in conjunction with the Safe Drinking Water
Act Amendments of 1986 (Public Law 99-339), could create major changes
in the production and distribution of drinking water;
Whereas this substance, which the public uses with confidence in so
many productive ways, is without doubt the single most important product
in the world and a significant issue of the future;
Whereas the public expects high quality drinking water to always be
there when needed; and
Whereas the public continues to increase its demand for drinking
water of unquestionable quality: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the period commencing on
May 2, 1988, and ending on May 8, 1988, is designated as "National
Drinking Water Week", and the President is authorized and requested to
issue a proclamation calling upon the people of the United States to
observe such period with appropriate ceremonies, activities, and
programs designed to enhance public awareness of drinking water issues
and public recognition of the difference that drinking water makes to
the health, safety, and quality of the life we enjoy.
Approved March 30, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 185:
CONGRESSIONAL RECORD: Vol. 133 (1987): Oct. 30, considered and
passed Senate. Vol. 134 (1988): Mar. 22, considered and passed House.
Public Law 100-271, 102 Stat. 45
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
FORMER SPOUSES.
Section 645(c) of the Department of Defense Authorization Act, 1985
(Public Law 98-525; 98 Stat. 2549), is amended by striking out "April
1, 1988," and inserting in lieu thereof "December 31, 1988,".
Approved March 29, 1988.
LEGISLATIVE HISTORY -- H.R. 3967:
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 9, considered and passed
House. Mar. 17, considered and passed Senate.
Public Law 100-270, 102 Stat. 44
Whereas heart attacks struck an estimated 1,500,000 Americans in
1987, a third of whom died immediately;
Whereas scientific data indicates that effective measures to lower
serum cholesterol are capable of decreasing occurrences of heart
disease;
Whereas only 8 per centum of Americans know their cholesterol level;
and
Whereas as many as 250,000 lives could be saved each year if
Americans were tested for and took action to reduce high levels of
cholesterol: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the month of April 1988,
is designated as "National Know Your Cholesterol Month", and the
President of the United States is authorized and requested to issue a
proclamation calling upon the people of the United States to observe
such month with appropriate programs and activities.
Approved March 29, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 244:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 17, considered and passed House.
Public Law 100-269, 102 Stat. 43
Whereas the United States has fought in many wars;
Whereas thousands of members of the Armed Forces of the United States
who served in such wars were captured by the enemy and held as prisoners
of war;
Whereas many such prisoners of war were subjected to brutal and
inhumane treatment by their captors in violation of international codes
and customs for the treatment of prisoners of war and died, or were
disabled, as a result of such treatment;
Whereas in 1985, the United States Congress (in Public Law 99-145)
directed the Department of Defense to issue a medal to former prisoners
of war in recognition and commemoration of their great sacrifices in
service to our Nation; and
Whereas these great sacrifices of former prisoners of war and their
families deserve national recognition: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That April 9, 1988, is
designated as "National Former Prisoners of War Recognition Day" in
honor of the members of the Armed Forces of the United States who have
been held as prisoners of war, and the President is authorized and
requested to issue a proclamation calling upon the people of the United
States to commemorate such days with appropriate ceremonies and
activities.
Approved March 28, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 253:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 17, considered and passed House.
Public Law 100-268, 102 Stat. 42
Whereas between one million and one million eight hundred thousand
people in the United States suffer head injuries each year;
Whereas twenty years ago 90 per centum of the people who suffered
severe head injuries died as a result of such injuries, but currently
the survival rate for such injuries is 50 per centum;
Whereas most people who suffer head injuries are under thirty years
of age and will survive such injuries for at least forty years;
Whereas more than fifty thousand of the people who survive head
injuries annually are unable to resume their normal lifestyles without
intensive physical and psychological therapy;
Whereas the long term rehabilitation that is available for survivors
of head injuries has not improved at the same rate as the medical
treatment of such injuries;
Whereas Run to Daylight, a nonprofit corporation concerned with
improving the rehabilitation that is available for survivors of head
injuries, is sponsoring a three-thousand-six-hundred-mile run across the
United States called the "Run to Daylight";
Whereas the purpose of the "Run to Daylight" is to raise the
awareness of the people of the United States about the rehabilitation
needs of survivors of head injuries and to raise funds to support the
Nationl Head Injury Foundation, an organization dedicated to improving
the quality of life for survivors of such injuries and their families
and to developing and supporting programs to prevent such injuries; and
Whereas the "Run to Daylight" will begin in San Francisco,
California, on April 1, 1988, and will end in Boston, Massachusetts, on
June 30, 1988: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That April 1, 1988, is
designated as "Run to Daylight Day", and the President is authorized and
requested to issue a proclamation calling on the people of the United
States to observe such day with appropriate ceremonies and activities.
Approved March 28, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 229:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 17, considered and passed House.
Public Law 100-267, 102 Stat. 41
Whereas section 6(a) of the Act entitled "An Act to provide standards
for placement of commemorative works on certain Federal lands in the
District of Columbia and its environs, and for other purposes," approved
November 14, 1986 (100 Stat. 3650, 3651), provides that the location of
a commemorative work in the area described therein as Area I shall be
deemed disapproved unless, not later than 150 days after the Secretary
of the Interior or the Administrator of General Services notifies the
Congress of his determination that the commemorative work should be
located in Area I, the location is approved by law;
Whereas the Act approved October 28, 1986 (100 Stat. 3226),
authorizes The American Battle Monuments Commission to establish a
memorial on Federal land in the District of Columbia and its environs to
honor members of the Armed Forces of the United States who served in the
Korean War, particularly those who were killed in action, are still
listed as missing in action, or were held as prisoners of war; and
Whereas the Secretary of the Interior has notified the Congress of
his determination that the memorial authorized by the said Act approved
October 28, 1986, should be located in Area I: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the location of a
commemorative work to honor members of the Armed Forces who served in
the Korean War, particularly those who were killed in action, are still
listed as missing in action, or were held as prisoners of war,
authorized by the Act approved October 28, 1986 "40 USC 1003 note" (100
Stat. 3226), in the area described in the Act approved November 14, 1986
(100 Stat. 3650), as Area I, is hereby approved.
Approved March 28, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 225:
HOUSE REPORTS: No. 100-516 (Comm. on Interior and Insular Affairs).
SENATE REPORTS: No. 100-289 (Comm. on Energy and Natural Resources).
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 15, 16, considered and passed House.
Public Law 100-266, 102 Stat. 40
National Day of Celebration of Greek and American
Democracy".
Whereas the ancient Greeks developed the concept of democracy, in
which the supreme power to govern was vested in the people;
Whereas the Founding Fathers of the United States of America drew
heavily upon the political and philosophical experience of ancient
Greece in forming our representative democracy;
Whereas March 25, 1988, marks the one hundred and sixty-seventh
anniversary of the beginning of the revolution which freed the Greek
people from the Ottoman Empire;
Whereas these and other ideals have forged a close bond between our
two nations and their peoples; and
Whereas it is proper and desirable to celebrate with the Greek
people, and to reaffirm the democratic principles from which our two
great nations sprang: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That March 25, 1988, is
designated as "Greek Independence Day: A National Day of Celebration of
Greek and American Democracy", and that the President of the United
States is authorized and requested to issue a proclamation calling upon
the people of the United States to observe the designated day with
appropriate ceremonies and activities.
Approved March 25, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 218:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 17, considered and
passed Senate. Mar. 10, considered and passed House.
Public Law 100-265, 102 Stat. 39
Whereas section 6(a) of the Act entitled "An Act to provide standards
for placement of commemorative works on certain Federal lands in the
District of Columbia and its environs, and for other purposes", approved
November 14, 1986 (100 Stat. 3650, 3651), provides that the location of
a commemorative work in the area described therein as area I shall be
deemed disapproved unless, not later than one hundred and fifty days
after the Secretary of the Interior or the Administrator of General
Services notifies the Congress of his determination that the
commemorative work should be located in area I, the location is approved
by law;
Whereas the joint resolution approved October 27, 1986 (100 Stat.
3144), authorizes the Black Revolutionary War Patriots Foundation to
establish a memorial on Federal land in the District of Columbia and its
environs to honor the estimated five thousand courageous slaves and free
black persons who served as soldiers and sailors or provided civilian
assistance during the American Revolution and to honor the countless
black men, women, and children who ran away from slavery or filed
petitions with courts and legislatures seeking their freedom; and
Whereas the Secretary of the Interior has notified the Congress of
his determination that the memorial authorized by the said joint
resolution approved October 27, 1986, should be located in area I: Now,
therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the location of a
commemorative work to honor the slaves and free black persons who served
as soldiers and sailors or provided civilian assistance during the
American Revolution and to honor the black men, women, and children, who
ran away from slavery or filed petitions with courts and legislatures
seeking their freedom, authorized by the joint resolution approved
October 27, 1986 (100 Stat. 3144), "40 USC 1003 note" in the area
described in the Act approved November 14, 1986 (100 Stat. 3650), as
area I, is hereby approved.
Approved March 25, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 216:
SENATE REPORTS: No. 100-288 (Comm. on Energy and Natural Resources).
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 15, considered and passed House.
Public Law 100-264, 102 Stat. 38
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That the United States
Post Office Building located at 300 Sycamore Stree in Waterloo, Iowa, is
hereby designated as the "H. R. Gross Post Office Building". Any
reference to such building in a law, rule, map, document, record, or
other paper of the United States shall be considered to be a reference
to the "H. R. Gross Post Office Building".
Approved March 25, 1988.
LEGISLATIVE HISTORY -- H.R. 3689:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 23, considered and
passed House. Mar. 3, considered and passed Senate.
Public Law 100-263, 102 Stat. 37
Whereas stuttering occurs when the natural flow of speech is
interrupted, such as with the inability to produce certain sounds, or
when an initial sound, word, or phrase is repeated;
Whereas over 3,000,000 Americans, both children and adults, suffer
from this handicap;
Whereas there is a tendency for stuttering to be an inherited trait
which can often be traced through family genealogy;
Whereas men have been found to be four times as likely as women to
have this disorder, the same male to female ratio as with some learning
disorders;
Whereas it should be recognized that although there is no known cure
for stuttering, there is help available, and that available help should
be emphasized; and
Whereas there has been no national recognition of the condition known
as stuttering, and the public and Federal Government are not
sufficiently aware of the frustration and anxiety felt by persons who
stutter and the diminished self-respect and self-esteem which follows:
Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the period commencing on
May 9, 1988, and ending on May 15, 1988, is designated as "National
Stuttering Awareness Week", and the President is authorized and
requested to issue a proclamation calling on the people of the United
States to observe such period with appropriate ceremonies and
activities.
Approved March 24, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 125:
CONGRESSIONAL RECORD, Vol. 133 (1987): Oct. 30, considered and
passed Senate. Mar. 10, considered and passed House.
Public Law 100-262, 102 Stat. 36
Whereas agriculture is the Nation's largest and most basic industry,
and its associated production, processing, and marketing segments
together provide more jobs than any other single industry;
Whereas agriculture serves all Americans by providing food, fiber,
and other basic necessities of life;
Whereas the performance of the agricultural economy is vital to
maintaining the strength of our national economy, the standard of living
of our citizens, and our presence in world trade markets;
Whereas it is important that all Americans should understand the role
that agriculture plays in their lives and well-being, whether they live
in urban or rural areas; and
Whereas, since 1973, the first day of spring has been celebrated as
National Agriculture Day by farmers and ranchers, commodity and farm
organizations, cooperatives and agribusiness organizations, nonprofit
and community organizations, and Federal, State, and local governments:
Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That March 20, 1988, is hereby
proclaimed "National Agriculture Day", and the President is authorized
and requested to issue a proclamation calling upon the people of the
United States to observe this day with appropriate ceremonies and
activities during the week of March 20 through March 26, 1988.
Approved March 23, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 265:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 17, considered and passed House.
Public Law 100-261, 102 Stat. 34
Whereas Neighborhood Housing Services (NHS) and its affiliated
partnership organizations of neighborhood residents, local governments,
and businesses all comprise the NeighborWorks Network;
Whereas the NeighborWorks Network is successfully revitalizing
declining neighborhoods and building and rehabilitating housing for
lower income Americans in 137 cities throughout the United States;
Whereas America's neighborhoods are made up of families of a variety
of ethnic, social, and economic backgrounds and such diversity is
fundamental to a strong nation;
Whereas deterioration of a neighborhood's physical, economic, and
social structures harms the neighborhood's homes, businesses, and
residents and especially harms the neighborhood's elderly and poor
residents;
Whereas reversing such deterioration is essential to the strength of
America's families, neighborhoods, and businesses;
Whereas the NeighborWorks Network has generated over $4,000,000,000
in reinvestment funds for 297 declining neighborhoods and has improved
the quality of life of over 3 million individuals, the majority of whom
are lower income, elderly, or minority Americans;
Whereas more than 3,000 businesses and local governments are annually
contributing over $16,000,000 to the operations of their local
NeighborWorks partnerships; and
Whereas, to accomplish their goals, NHS and both Apartment
Improvement Programs and Mutual Housing Associations in the
NeighborWorks partnerships rely on local government and private sector
resources and on the help of thousands of volunteers who contribute
millions of hours of service to rebuild America's declining
neighborhoods: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That June 5-11, 1988, is
designated as "National NHS -- NeighborWorks Week" and the President is
authorized and requested to issue a proclamation calling upon all
government agencies and the people of the United States to observe the
week with appropriate programs, ceremonies, and activities.
Approved March 23, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 252:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 10, considered and passed House.
Public Law 100-260, 102 Stat. 33
Whereas a fundamental principle of our Government is that a
well-informed citizenry can reach the important decisions that determine
the present and future of the Nation;
Whereas the freedoms we cherish as Americans are fostered by free
access to information;
Whereas many Americans, because they have never known any other way
of life, take for granted the guarantee of free access to information
that derives from the First Amendment to the Constitution of the United
States;
Whereas the guarantee of free access to information should be
emphasized and celebrated annually; and
Whereas March 16 is the anniversary of the birth of James Madison,
one of the Founding Fathers, who recognized and supported the need to
guarantee individual rights through the Bill of Rights: Now, therefore,
be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That March 16, 1988, is
designated as "Freedom of Information Day", and the President is
authorized and requested to issue a proclamation calling upon Federal,
State, and local government agencies and the people of the United States
to observe such day with appropriate programs, ceremonies, and
activities.
Approved March 23, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 126:
CONGRESSIONAL RECORD: Vol. 133 (1987): Oct. 30, considered and
passed Senate. Vol. 134 (1988): Mar. 15, considered and passed House.
Public Law 100-259, 102 Stat. 28
To restore the broad scope of coverage and to clarify the application
of title IX of the Education Amendments of 1972, section 504 of the
Rehabilitation Act of 1973, the Age Discrimination Act of 1975, and
title VI of the Civil Rights Act of 1964.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. "20 USC 1681 note" This Act may be cited as the "Civil
Rights Restoration Act of 1987".
SEC. 2. "20 USC 1687 note" The Congress finds that --
(1) certain aspects of recent decisions and opinions of the
Supreme Court have unduly narrowed or cast doubt upon the broad
application of title IX of the Education Amendments of 1972,
section 504 of the Rehabilitation Act of 1973, the Age
Discrimination Act of 1975, and title VI of the Civil Rights Act
of 1964; and
(2) legislative action is necessary to restore the prior
consistent and long-standing executive branch interpretation and
broad, institution-wide application of those laws as previously
administered.
SEC. 3. (a) Title IX of the Education Amendments of 1972 is amended
by adding at the end the following new sections:
"SEC. 908. "20 USC 1687" For the purposes of this title, the term
'program or activity' and 'program' mean all of the operations of --
"(1)(A) a department, agency, special purpose district, or
other instrumentality of a State or of a local government; or
"(B) the entity of such State or local government that
distributes such assistance and each such department or agency
(and each other State or local government entity) to which the
assistance is extended, in the case of assistance to a
State or local government;
"(2)(A) a college, university, or other postsecondary
institution, or a public system of higher education; or
"(B) a local educational agency (as defined in section
198(a)(10) of the Elementary and Secondary Education Act of 1965),
system of vocational education, or other school system;
"(3)(A) an entire corporation, partnership, or other private
organization, or an entire sole proprietorship --
"(i) if assistance is extended to such corporation,
partnership, private organization, or sole proprietorship as a
whole; or
"(ii) which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
"(B) the entire plant or other comparable, geographically
separate facility to which Federal financial assistance is
extended, in the case of any other corporation, partnership,
private organization, or sole proprietorship; or
"(4) any other entity which is established by two or more of
the entities described in paragraph (1), (2), or (3);
any part of which is extended Federal financial assistance, except
that such term does not include any operation of an entity which is
controlled by a religious organization if the application of section 901
to such operation would not be consistent with the religious tenets of
such organization.".
(b) Notwithstanding any provision of this Act or any amendment
adopted thereto:
"SEC. 909. "20 USC 1688" Nothing in this title shall be construed to
require or prohibit any person, or public or private entity, to provide
or pay for any benefit or service, including the use of facilities,
related to an abortion. Nothing in this section shall be construed to
permit a penalty to be imposed on any person or individual because such
person or individual is seeking or has received any benefit or service
related to a legal abortion.".
SEC. 4. Section 504 of the Rehabilitation Act of 1973 "29 USC 794"
is amended --
(1) by inserting "(a)" after "SEC. 504."; and
(2) by adding at the end the following new subsections:
"(b) For the purposes of this section, the term 'program or activity'
means all of the operations of --
"(1)(A) a department, agency, special purpose district, or
other instrumentality of a State or of a local government; or
"(B) the entity of such State or local government that
distributes such assistance and each such department or agency
(and each other State or local government entity) to which the
assistance is extended, in the case of assistance to a State or
local government;
"(2)(A) a college, university, or other postsecondary
institution, or a public system of higher education; or
"(B) a local educational agency (as defined in section
198(a)(10) of the Elementary and Secondary Education Act of 1965),
system of vocational education, or other school system;
"(3)(A) an entire corporation, partnership, or other private
organization, or an entire sole proprietorship --
"(i) if assistance is extended to such corporation,
partnership, private organization, or sole proprietorship as a
whole; or
"(ii) which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recretation; or
"(B) the entire plant or other comparable, geographically
separate facility to which Federal financial assistance is
extended, in the case of any other corporation, partnership,
private organization, or sole proprietorship; or
"(4) any other entity which is established by two or more of
the entities described in paragraph (1), (2), or (3);
any part of which is extended Federal financial assistance.
"(c) Small providers are not required by subsection (a) to make
significant structural alterations to their existing facilities for the
purpose of assuring program accessbility, if alternative means of
providing the services are available. The terms used in this subsection
shall be construed with reference to the regulations existing on the
date of the enactment of this subsection.".
SEC. 5. "42 USC 6108" Section 309 of the Age Discrimination Act of
1975 is amended --
(1) by striking out "and" at the end of paragraph (2);
(2) by striking out the period at the end of paragraph (3) and
inserting "; and" in lieu thereof; and
(3) by inserting after paragraph (3) the following new
paragraph:
"(4) the term 'program or activity' means all of the operations
of --
"(A)(i) a department, agency, special purpose district, or
other instrumentality of a State or of a local government; or
"(ii) the entity of such State or local government that
distributes such assistance and each such department or agency
(and each other State or local government entity) to which the
assistance is extended, in the case of assistance to a State or
local government;
"(B)(i) a college, university, or other postsecondary
institution, or a public system of higher education; or
"(ii) a local educational agency (as defined in section
198(a)(10), of the Elementary and Secondary Education Act of
1965), system of vocational education, or other school system;
"(C)(i) an entire corporation, partnership, or other private
organization, or an entire sole proprietorship --
"(I) if assistance is extended to such corporation,
partnership, private organization, or sole proprietorship as a
whole; or
"(II) which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
"(ii) the entire plant or other comparable, geographically
separate facility to which Federal financial assistance is
extended, in the case of any other corporation, partnership,
private organization, or sole proprietorship; or
"(D) any other entity which is establish by two or more of the
entities described in subparagraph (A), (B), or (C);
any part of which is extended Federal financial assistance.".
SEC. 6. Title VI of the Civil Rights Act of 1964 is amended by
adding at the end the following new section:
"SEC. 606. "42 USC 2000d-4a" For the purposes of this title, the
term 'program or activity' and the term 'program' mean all of the
operations of --
"(1)(A) a department, agency, special purpose district, or
other instrumentality of a State or of a local government; or
"(B) the entity of such State or local government that
distributes such assistance and each such department or agency
(and each other State or local government entity) to which the
assistance is extended, in the case of assistance to a State or
local government;
"(2)(A) a college, university, or other postsecondary
institution, or a public system of higher education; or
"(B) a local educational agency (as defined in section
198(a)(10) of the Elementary and Secondary Education Act of 1965),
system of vocational education, or other school system;
"(3)(A) an entire corporation, partnership, or other private
organization, or an entire sole proprietorship --
"(i) if assistance is extended to such corporation,
partnership, private organization, or sole proprietorship as a
whole; or
"(ii) which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
"(B) the entire plant or other comparable, geographically
separate facility to which Federal financial assistance is
extended, in the case of any other corporation, partnership,
private organization, or sole proprietorship; or
"(4) any other entity which is established by two or more of
the entities described in paragraph (1), (2), or (3);
any part of which is extended Federal financial assistance.".
SEC. 7. "20 USC 1687 note" Nothing in the amendments made by this
Act shall be construed to extend the application of the Acts so amended
to ultimate beneficiaries of Federal financial assistance excluded from
coverage before the enactment of this Act.
SEC. 8. "20 USC 1688 note" No provision of this Act or any amendment
made by this Act shall be construed to force or require any individual
or hospital or any other institution, program, or activity receiving
Federal Funds to perform or pay for an abortion.
SEC. 9. Section 7(8) of the Rehabilitation Act of 1973 "29 USC 706"
is amended by adding after subparagraph (B) the following:
"(C) For the purpose of sections 503 and 504, as such sections relate
to employment, such term does not include an individual who has a
currently contagious disease or infection and who, by reason of such
disease or infection, would constitute a direct threat to the health or
safety of other individuals or who, by reason of the currently
contagious disease or infection, is unable to perform the duties of the
job.".
JIM WRIGHT
Speaker of the House of
Representatives.
HARRY M. REID
Acting President of the Senate pro
tempore.
March 22 (legislative day, March
21), 1988.
The Senate having proceeded to reconsider the bill (S. 557) entitled
"An Act to restore the broad scope of coverage and to clarify the
application of title IX of the Education Amendments of 1972, section 504
of the Rehabilitation Act of 1973, the Age Discrimmination Act of 1975,
and title VI of the Civil Rights Act of 1964", returned by the President
of the United States with his objections, to the Senate, in which it
originated, it was
Resolved, That the said bill pass, two-thirds of the Senators present
having voted in the affirmative.
Attest:
WALTER J. STEWART
Secretary.
WALTER J. STEWART
Secretary.
March 22, 1988.
The House of Representatives having proceeded to reconsider the bill
(S. 557) entitled "An Act to restore the broad scope of coverage and to
clarify the application of title IX of the Education Amendments of 1972,
section 504 of the Rehabilitation Act of 1973, the Age Discrimination
Act of 1975, and title VI of the Civil Rights Act of 1964", returned by
the President of the United States with his objections, to the Senate,
in which it originated, and passed by the Senate on reconsideration of
the same, it was
Resolved, That the said bill pass, two-thirds of the House of
Representatives agreeing to pass the same.
Attest:
DONNALD K. ANDERSON
Clerk.
LEGISLATIVE HISTORY -- S. 557:
SENATE REPORTS: No. 100-64 (Comm. on Labor and Human Resources).
CONGRESSIONAL RECORD, Vol. 134 (1988): Jan. 26-28, considered and
passed Senate. Mar. 2, considered and passed House.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): Mar.
16, Presidential veto messages.
CONGRESSIONAL RECORD, Vol. 134 (1988): Mar. 22, Senate and House
overrode veto.
Public Law 100-258, 102 Stat. 27
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That the counties of
Morgan and Lawrence in Alabama shall be considered for designation as a
single metropolitan statistical area by the Director of the Office of
Management and Budget without regard to the portion of the Bankhead
National Forest located within Lawrence County.
Approved March 14, 1988.
LEGISLATIVE HISTORY -- S. 1447:
HOUSE REPORTS: No. 100-503 (Comm. on Post Office and Civil Service).
CONGRESSIONAL RECORD: Vol. 133 (1987): June 30, considered and
passed Senate. Vol. 134 (1988): Mar. 1, 2, considered and passed
House.
Public Law 100-257, 102 Stat. 26
Whereas American women of every race, class, and ethnic background
have made historical contributions to the growth and strength of the
Nation in countless recorded and unrecorded ways;
Whereas American women have played and continue to play a critical
economic, cultural, and social role in every sphere of our Nation's life
by constituting a significant portion of the labor force working in and
outside of the home;
Whereas American women have played a unique role throughout our
history by providing the majority of the Nation's volunteer labor force
and have been particularly important in the establishment of early
charitable philanthropic and cultural institutions in this country;
Whereas American women of every race, class, and ethnic background
served as early leaders in the forefront of every major progressive
social change movement, not only to secure their own right of suffrage
and equal opportunity, but also in the abolitionist movement, the
emancipation movement, the industrial labor movement, the civil rights
movement, and other movements to create a more fair and just society for
all; and
Whereas, despite these contributions, the role of American women in
history has been consistently overlooked and undervalued in the body of
American history: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the month of March 1988,
is designated as "Women's History Month", and the President is requested
to issue a proclamation calling upon the people of the United States to
observe such month with appropriate ceremonies and activities.
Approved March 8, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 262:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 2, considered and passed House.
Public Law 100-256, 102 Stat. 24
Whereas the ability of the United States to provide for the economic
security of the American people depends primarily upon the vitality of
the private sector and the competitive free enterprise system;
Whereas the ability of the private sector to generate jobs and a
constantly improving standard of living depends heavily on the policies
which the Federal Government pursues and the services it provides;
Whereas the Congress of the United States, recognizing the importance
of these policies and services, on March 4, 1913, reestablished as the
Department of Commerce the executive agency created by the Act of
February 14, 1903, and directed it to "foster, promote, and develop the
foreign and domestic commerce" of the United States;
Whereas the Department of Commerce has been charged with many
important responsibilities, including the effective administration of
the trade laws, providing social and economic statistics for business
and government planners, promoting the protection of intellectual
property at home and abroad, advancing the Nation's science and
technology and facilitating their use for public benefit, working to
improve our understanding of the Earth's physical environment and ocean
resources, helping the private sector take advantage of commercial
opportunities in space, assisting in the growth of minority business,
promoting domestic economic development, assessing policies and
conducting research on telecommunications, and encouraging foreign
travel to the United States; and
Whereas the officers and employees of the Department of Commerce, by
their dedication, diligence, loyalty, and integrity, reflect the finest
traditions of public service and, along with the important work they
perform deserve public recognition as the Department of Commerce
celebrates its seventy-fifth birthday: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That March 4, 1988, is
designated as "Department of Commerce Day", and the President is
authorized and requested to issue a proclamation calling upon the people
of the United States to observe that day with appropriate ceremonies and
activities.
Approved March 8, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 251:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 26, considered and
passed Senate. Mar. 2, considered and passed House.
Public Law 100-255, 102 Stat. 23
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That section 8103(b)(3)
of title 46, United States Code, is amended by striking "subsection,"
and substituting "section,".
Approved March 4, 1988.
LEGISLATIVE HISTORY -- H.R. 3923:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 16, considered and
passed House. Feb. 19, considered and passed Senate.
Public Law 100-254, 102 Stat. 22
Whereas Gaucher's disease is caused by the failure of the body to
produce an essential enzyme;
Whereas the absence of such enzyme causes the body to store abnormal
quantities of lipids in the liver and spleen and frequently has an
adverse effect on tissues in the body, particularly bone tissue;
Whereas among Jewish persons, Gaucher's disease is the most common
inherited disorder affecting the metabolism of lipids, which are one of
the principal structural components of living cells;
Whereas there is no known cure for Gaucher's disease and no
successful treatment of the symptoms of the disease;
Whereas the increased awareness and understanding of Gaucher's
disease by the people of the United States can aid in the development of
a treatment and cure for the disease;
Whereas the National Gaucher's Disease Foundation provides funds for
research in the United States with respect to the disease; and
Whereas research and clinical programs with respect to Gaucher's
disease should be increased: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the week beginning October
16, 1988, is designated as "Gaucher's Disease Awareness Week", and the
President is authorized and requested to issue a proclamation calling
upon the people of the United States to observe such week with
appropriate ceremonies and activities.
Approved February 29, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 122:
CONGRESSIONAL RECORD: Vol. 133 (1987): June 25, considered and
passed Senate. Dec. 2, considered and passed House, amended. Vol. 134
(1988): Feb. 16, Senate concurred in House amendments.
Public Law 100-253, 102 Stat. 20
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act "38 USC 101 note" may be cited as the "Veterans' Home Loan
Program Emergency Amendments of 1988".
SEC. 2. DOWNPAYMENT REQUIREMENTS FOR VENDEE LOANS.
Section 1816(d)(4)(B) of title 38, United States Code (as amended by
section 6(b)(1) of Public Law 100-198), is amended --
(1) by inserting "(i)" after "(B)"; and
(2) by adding at the end the following new division:
"(ii) A loan described in subparagraph (A) of this paragraph may, to
the extent the Administrator determines to be necessary in order to
market competitively the property involved, exceed 95 percent of the
purchase price.".
SEC. 3. AMOUNT OF GUARANTY ENTITLEMENT.
(a) CONVENTIONAL HOUSING. -- Section 1803(a)(1) of title 38, United
States Code (as amended by section 3(a)(1) of Public Law 100-198) is
amended to read as follows:
"(a)(1)(A) Any loan to a veteran eligible for benefits under this
chapter, if made for any of the purposes specified in section 1810 of
this title and in compliance with the provisions of this chapter, is
automatically guaranteed by the United States in an amount not to exceed
the lesser of --
"(i)(I) in the case of any loan of not more than $45,000, 50
percent of the loan; or
"(II) in the case of any loan of more than $45,000, the lesser
of $36,000 or 40 percent of the loan, except that the amount of
such guaranty for any such loan shall not be less than $22,500;
or
"(ii) the maximum amount of guaranty entitlement available to
the veteran.
"(B) The maximum amount of guaranty entitlement available to a
veteran under section 1810 of this chapter shall be $36,000 reduced by
the amount of entitlement previously used by the veteran under this
chapter and not restored as a result of the exclusion in section 1802(b)
of this title.".
(b) MANUFACTURED HOUSING. -- Section 1819(c) of such title (as
amended by section 3(b) of Public Law 100-198) is amended --
(1) in paragraph (3), by amending the first sentence to read as
follows: "The Administrator's guaranty may not exceed the lesser
of (A) the lesser of $20,000 or 40 percent of the loan, or (B) the
maximum amount of guaranty entitlement available to the veteran.";
(2) in paragraph (4), by amending the first sentence to read as
follows: "The maximum amount of guaranty entitlement available to
a veteran under this section shall be $20,000 reduced by the
amount of any such entitlement previously used by the veteran.";
and
(3) by adding at the end the following new paragraph:
"(5) The amount of any loan guaranteed under this section "38 USC
1803 note" shall not exceed an amount equal to 95 percent of the
purchase price of the property securing the loan.".
(c) EFFECTIVE DATES. -- The amendments made by this section shall
apply to loans which are closed on or after February 1, 1988, except
that they shall not apply to any loan for which a guaranty commitment is
made on or before December 31, 1987.
Approved February 29, 1988.
LEGISLATIVE HISTORY -- S. 2022:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 1, considered and passed
Senate. Feb. 17, considered and passed House.
Public Law 100-252, 102 Stat. 18
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That (a) section 7(a) of
the Earthquake Hazards Reduction Act of 1977 (42 U.S.C. 7706(a)) is
amended by adding at the end the following:
"(7) There are authorized to be appropriated to the Director, to
carry out the provisions of sections 5 and 6 of this Act, $5,778,000 for
the fiscal year ending September 30, 1988, $5,788,000 for the fiscal
year ending September 30, 1989, and $5,798,000 for the fiscal year
ending September 30, 1990.".
(b) Section 7(b) of the Earthquake Hazards Reduction Act of 1977 (42
U.S.C. 7706(b)) is amended --
(1) by striking "and" after "1986;"; and
(2) by inserting immediately before the period the following:
"; $38,540,000 for the fiscal year ending September 30, 1988;
$41,819,000 for the fiscal year ending September 30, 1989; and
$43,283,000 for the fiscal year ending September 30, 1990".
(c) Section 7(c) of the Earthquake Hazards Reduction Act of 1977 (42
U.S.C. 7706(c)) is amended --
(1) by striking "and" after "1986;"; and
(2) by inserting immediately before the period the following:
"; $28,235,000 for the fiscal year ending September 30, 1988;
$31,634,000 for the fiscal year ending September 30, 1989; and
$35,454,000 for the fiscal year ending September 30, 1990".
(d) Section 7(d) of the Earthquake Hazards Reduction Act of 1977 (42
U.S.C. 7706(d)) is amended --
(1) by striking "and" after "1986;"; and
(2) by inserting immediately before the period the following:
"; $525,000 for the fiscal year ending September 30, 1988;
$525,000 for the fiscal year ending September 30, 1989; and
$525,000 for the fiscal year ending September 30, 1990".
SEC. 2. Section 5 of the Earthquake Hazards Reduction Act of 1977
(42 U.S.C. 7704) is amended by adding at the end the following:
"(j) COST-SHARING. -- (1) In the case of any State which has
voluntarily engaged in cost sharing by matching Federal grants from the
Federal Emergency Management Agency for activities under this Act over
the three-fiscal-year period ending September 30, 1987, any such cost
sharing that may be required for the fiscal year ending September 30,
1988, or the fiscal year ending September 30, 1989, shall be at a level
no higher than the State's average level of such cost sharing over such
three-year period.
"(2) In the case of any State which has not engaged in cost sharing
by matching Federal grants from the Federal Emergency Management Agency
for activities under this Act over such three-fiscal-year period --
"(A) no such cost sharing may be required for the fiscal year
ending September 30, 1988; and
"(B) any such cost sharing that may be required for the fiscal
year ending September 30, 1989, shall be at a level no higher than
25 percent of the cost of the activities involved.
"(3) Nothing in this subsection shall be construed to prevent a
State, voluntarily and at its option, from engaging in costs sharing at
a level higher than the maximum level which may be required of it under
paragraph (1) or (2).".
Approved February 29, 1988.
LEGISLATIVE HISTORY -- H.R. 1612:
HOUSE REPORTS: No. 100-89, Pt. 1 (Comm. on Interior and Insular
Affairs) and Pt. 2 (Comm. on Science, Space, and Technology).
SENATE REPORTS: No. 100-239 (Comm. on Commerce, Science, and
Transportation).
CONGRESSIONAL RECORD: Vol. 133 (1987): June 8, considered and
passed House. Dec. 21, considered and passed Senate, amended. Vol. 134
(1988): Feb. 16, House concurred in Senate amendment.
Public Law 100-251, 102 Stat. 17
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That of the funds made
available in the fiscal year 1988 Foreign Operations, Export Financing
and Related Programs Appropriations Act (Public Law 100-202), under the
heading Migration and Refugee Assistance, $8,000,000 for the
construction of educational facilities for North African Jewish refugees
in France is rescinded.
Approved February 16, 1988.
LEGISLATIVE HISTORY -- H.R. 3384:
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 2, considered and passed
House and Senate.
Public Law 100-250, 102 Stat. 16
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That title IX of the
National Parks and Recreation Act of 1978, as amended (16 U.S.C. 230),
is further amended as follows:
(a) "16 USC 230" In section 901 by adding the following new phrase
and renumbering subsequent phrases accordingly:
"(4) folk life centers to be established in the Acadian
region;".
(b) In section 902 by adding the following new subsection:
"(g) "16 USC 230a" The Secretary is authorized to acquire lands or
interests in lands by donation, purchase with donated or appropriated
funds or exchange, not to exceed approximately 20 acres, in Acadian
villages and towns. Any lands so acquired shall be developed,
maintained and operated as part of the Jean Lafitte National Historical
Park.".
(c) "16 USC 230f" In section 907(e) by striking out "ten years" and
inserting in lieu thereof "twenty years".
Approved February 16, 1988.
LEGISLATIVE HISTORY -- H.R. 2566:
HOUSE REPORTS: No. 100-304 (Comm. on Interior and Insular Affairs).
SENATE REPORTS: No. 100-251 (Comm. on Energy and Natural Resources).
CONGRESSIONAL RECORD: Vol. 133 (1987): Sept. 29, considered and
passed House. Dec. 19, considered and passed Senate, amended. Vol. 134
(1988): Feb. 2, House concurred in Senate amendment.
Public Law 100-249, 102 Stat. 13
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 101. AMENDMENTS OF 1950 ACT.
The Act entitled "An Act to provide for the acquisition,
investigation, and preservation of lands to commemorate the historic
Fort Caroline settlement, Saint Johns Bluff, Florida", approved
September 21, 1950 (64 Stat. 897), is amended as follows:
(1) Section 2 is amended by adding the following after the
final period: "Such historical park shall serve as the principal
interpretive center and administrative facility for the
ecological, historic, and prehistoric resources made available
under this legislation. In furtherance of the interpretive and
administrative functions referred to in the preceding sentence,
the Secretary shall construct and maintain appropriate museum
facilities for the display of important artifacts and materials
that illustrate the history and prehistory of the region.".
(2) Section 3 is repealed, and sections 4 and 5 are
redesignated as sections 3 and 4, respectively.
(3) Section 4, as so redesignated, is amended by striking out
the phrase ", not to exceed $40,000,".
SEC. 201. "16 USC 698n" TIMUCUAN ECOLOGICAL AND HISTORIC PRESERVE.
(a) ESTABLISHMENT. -- There is hereby established in the St. Johns
River Valley, Florida, where the Timucuan Indians lived in prehistoric
and historic times, the Timucuan Ecological and Historic Preserve
(hereafter in this Act referred to as the "Preserve"). The Preserve
shall comprise the lands, waters, and interests therein within the
boundaries generally depicted on a map of Duval County, Florida,
entitled "Timucuan Ecological and Historic Preserve" numbered NA-TEHP
80,003-A and dated July 1987. The map shall be on file and available
for public inspection in the Office of the National Park Service,
Department of the Interior. The Secretary of the Interior may make
minor revisions in the boundary of the Preserve in accordance with
section 7(c) of the Land and Water Conservation Fund Act of 1965. The
Preserve shall also include within its boundaries all that land
consisting of approximately 500 acres adjacent to Fort Caroline National
Memorial and known as the Theodore Roosevelt Preserve, being land
formerly owned by one Willie Brown and donated by him to The Natural
Conservancy.
(b) LAND ACQUISITION. -- The Secretary of the Interior (hereinafter
in this Act referred to as the "Secretary") is authorized to acquire
lands and interests therein within the Preserve by donation, purchase
with donated or appropriated funds, or exchange, but no lands other than
wetlands or interests therein may be acquired without the consent of the
owner. For purposes of this subsection, the term "wetlands" has the
same meaning as provided by section 3 of the Emergency Wetlands
Resources Act of 1986. Lands, interests in lands, and improvements
thereon within the boundaries of the Preserve which are owned by the
State of Florida or any political subdivision thereof may be acquired
only by donation or exchange. On lands acquired for inclusion within
the Preserve, the Secretary shall not impair any legal riparian right of
access nor shall he preclude the continued use of any legal right of
way.
(c) ADMINISTRATION. -- The Secretary shall administer those lands
acquired for inclusion within the Preserve in such a manner as to
protect the natural ecology of such land and water areas in accordance
with this Act and the provisions of law generally applicable to units of
the National Park System, including the Act of August 25, 1916 (39 Stat.
535; 16 U.S.C. 1, 2-4). The Secretary shall permit boating,
boating-related activities, hunting, and fishing within the Preserve in
accordance with applicable Federal and State laws. The Secretary may
designate zones where, and establish periods when, no hunting or fishing
shall be permitted for reasons of public safety.
(d) Nothing in this Act shall affect development of a multiunit
residential/resort project currently proposed for Fort Georgia Island,
nor shall any provision of this Act be construed to affect any Federal,
State or local law applicable to such project.
SEC. 202. "16 USC 698o" PROTECTION OF SIGNIFICANT HISTORIC ASSETS.
The Secretary, with the consent of the owners thereof, may acquire by
donation or purchase with donated funds the following properties or
sites of significant historic interest in Duval County, Florida:
(1) Spanish sixteenth century forts San Gabriel and San
Estaban.
(2) Spanish eighteenth century fort Dos Hermanas.
(3) English eighteenth century forts at Saint Johns Bluff and
Fort George Island.
(4) Spanish sixteenth and seventeenth century mission San Juan
del Puerto.
(5) Site of the American Revolutionary War battle of Thomas
Creek.
(6) The Zephaniah Kingsley plantation, with its eighteenth and
nineteenth century buildings.
(7) The Spanish American War fortification on Saint Johns
Bluff.
(8) The confederate fort known as the Yellow Bluff Fort State
Historic Site.
SEC. 203. "16 USC 698p" INTEGRATED ADMINISTRATION AND
INTERPRETATION.
Any properties of historic interest acquired under section 202 shall
become part of the Preserve established under section 201. The
Secretary shall administer such properties in accordance with a plan
that integrates the administration and interpretation of the ecological
values of the Preserve and the historical values of the sites so
acquired and the historical features of Fort Caroline. Such
administration and interpretation shall be conducted through the
facilities and staff of Fort Caroline National Memorial consistent with
section 2 of the Act of September 21, 1950 (64 Stat. 897).
Approved February 16, 1988.
LEGISLATIVE HISTORY -- H.R. 1983:
HOUSE REPORTS: No. 100-224 (Comm. on Interior and Insular Affairs).
SENATE REPORTS: No. 100-247 (Comm. on Energy and Natural Resources).
CONGRESSIONAL RECORD: Vol. 133 (1987): July 21, considered and
passed House. Dec. 11, considered and passed Senate, amended. Vol. 134
(1988): Feb. 2, House concurred in Senate amendments.
Public Law 100-248, 102 Stat. 12
Whereas the year 1988 marks the twentieth anniversary of the passage
of title VIII of the Civil Rights Act of 1968, commonly referred to as
the "Federal Fair Housing Act", declaring a national policy to provide
fair housing throughout the United States;
Whereas the Federal Fair Housing Act prohibits discrimination in
housing on the basis of race, color, religion, sex, or national origin;
Whereas fairness is the foundation of our way of life and reflects
the best of our traditional American values;
Whereas invidious discriminatory housing practices undermine the
strength and vitality of America and the American people; and
Whereas in this twentieth year since the passage of the Fair Housing
Act, all Americans must work to continue to improve the Fair Housing Act
by strengthening enforcement provisions, by extending the protections of
the Act to all our citizens, by assuring there are no victims of
discriminatory housing practices, and by making the ideal of fair
housing a reality: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the President is
authorized and requested to issue a proclamation designating April as
"Fair Housing Month" and to invite the Governors of the several States,
the chief officials of local governments, and the people of the United
States to observe the month with appropriate ceremonies and activities.
Approved February 11, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 143 (H.J. Res. 201):
CONGRESSIONAL RECORD: Vol. 133 (1987): May 4, H.J. Res. 201
considered and passed House. June 5, S.J. Res. 143 considered and
passed Senate. Vol. 134 (1988): Feb. 2, considered and passed House.
Public Law 100-247, 102 Stat. 10
Whereas this year marks the 70th anniversary of the establishment of
the Independent Democratic Republic of Lithuania by the Lithuanian
National Council on February 16, 1918;
Whereas the Government of the Soviet Union recognized the sovereignty
and independence of the Republic of Lithuania in the peace treaty of
July 12, 1920;
Whereas the United States does not recognize the illegal
incorporation of the free and independent Republic of Lithuania in the
Union of Soviet Socialist Republics in 1940;
Whereas the United States continues to provide accreditation to the
Charges d'Affaires of the Republic of Lithuania;
Whereas the United States remains firmly committed to the principle
of self-determination as contained in the Final Act of the Conference on
Security and Cooperation in Europe (also known as the "Helsinki Final
Act"), an agreement to which the Soviet Union is a party;
Whereas the people of the Republic of Lithuania struggle every day
under Soviet domination;
Whereas the United States condemns the Soviet policy of forced
Russification, ethnic dilution, and religious and political persecution;
and
Whereas it is appropriate that the people of the United States, who
so strongly cherish the principles of independence and
self-determination denied the Lithuanian people by the Soviet Union,
join with the people of the Republic of Lithuania to demonstrate our
common desire to advance the cause of freedom: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the 70th anniversary of
the renewal of Lithuanian independence, February 16, 1988, is designated
as "Lithuanian Independence Day" and the President of the United States
is authorized and requested to issue a proclamation calling upon the
people of the United States to observe that day with appropriate
ceremonies and activities.
Approved February 11, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 39 (H.J. Res. 129):
CONGRESSIONAL RECORD: Vol. 133 (1987): Feb. 24, H.J. Res. 129
considered and passed House. June 5, S.J. Res. 39 considered and passed
Senate. Vol. 134 (1988): Feb. 2, considered and passed House.
Public Law 100-246, 102 Stat. 8
Whereas Visiting Nurse Associations have served homebound Americans
since 1885;
Whereas such Associations annually provide home care and support
services to nearly 1,000,000 men, women, children, and infants;
Whereas such Associations serve 504 urban and rural communities in 47
States;
Whereas such Associations adhere to high standards of quality and
provide personalized and cost-effective home health care and support
regardless of the individual's ability to pay;
Whereas such Associations are voluntary in nature, independently
operated, and community-based;
Whereas such Associations ensure the quality of care through
oversight provided by professional advisory committees composed of local
physicians and nurses;
Whereas such Associations enable hundreds of thousands of Americans
to recover from illness and injury in the comfort and security of their
homes;
Whereas such Associations ensure that individuals who are chronically
ill or who have physical and mental handicaps receive the therapeutic
benefits of care and support services provided in the home;
Whereas, in the absence of such Associations, thousands of patients
with mental or physical handicaps or chronically disabling illnesses
would have to be institutionalized;
Whereas such Associations provide a wide range of services, including
(where appropriate) health care, hospice care, personal care,
homemaking, occupational, physical, and speech therapy, "friendly
visiting services", social services, nutritional counseling, specialized
nursing services, and meals on wheels;
Whereas such Associations offer nursing care provided by registered
nurses, homemaking, therapy, and social services by qualified
specialists, and "friendly visiting services" by volunteers;
Whereas in each community served by such Associations, local
volunteers support the Association by serving on the board of directors,
raising funds, visiting patients in their homes, assisting patients and
nurses at wellness clinics, delivering meals on wheels to patients,
running errands for patients, working in the Association's office, and
providing tender loving care;
Whereas the need for home health care for young and old alike
continues to grow annually; and
Whereas on February 23, 1988 a national meeting of Visiting Nurse
Associations from throughout the United States will be held in
Innisbrook, Florida: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the period commencing
February 21, 1988, and ending February 27, 1988, is designated as
"National Visiting Nurse Associations Week", and the President is
authorized and requested to issue a proclamation calling upon the people
of the United States to observe such week with appropriate programs,
ceremonies, and activities.
Approved February 11, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 172:
CONGRESSIONAL RECORD: Vol. 133 (1987): Nov. 4, considered and
passed Senate. Vol. 134 (1988): Feb. 2, considered and passed House.
Public Law 100-245, 102 Stat. 6
Whereas motor vehicle crashes are the number one cause of death of
children over the age of 6 months in the United States;
Whereas motor vehicle crashes are the number one cause of the
crippling of children in the United States;
Whereas more children under the age of 5 years are killed or crippled
as passengers involved in motor vehicle crashes than the total number of
children killed or crippled by the 7 most common childhood diseases;
pertussis (whooping cough), tetanus, diphtheria, measles, mumps, rubella
(German measles), and polio;
Whereas motor vehicle crashes are the leading trauma related cause of
spinal cord injuries, epilepsy, and mental retardation in the United
States;
Whereas, during the years 1978 through 1986, nearly 9,300 children
under the age of 5 years were killed in traffic crashes and more than
450,000 children were injured in the United States;
Whereas an unrestrained child is less protected by padding and
energy-absorbing materials than an adult in a motor vehicle crash as a
result of protective devices being placed in areas more likely to
benefit adults;
Whereas unrestrained children are subject to a significantly higher
risk of serious head, spine, chest, and abdominal injury in motor
vehicle crashes than adult passengers because the bodies of children are
less developed and provide less protection;
Whereas an unrestrained child in a motor vehicle crash faces an
increased danger of fatal or serious injury from ejection as well as
injuries resulting from contact with the vehicle interior;
Whereas an unrestrained child in a motor vehicle not involved in a
collision may be killed or injured as a result of sudden stops, turns,
swerves, or falling from a moving vehicle;
Whereas all 50 States and the District of Columbia have enacted laws
mandating the use of child passenger protection systems;
Whereas the latest national surveys show that 72 percent of children
under the age of 5 are placed in child safety seats in the United States
and that one-third of such seats are used incorrectly;
Whereas current nationwide studies estimate that only 48 percent of
children under the age of 5 are fully protected in cars in the United
States through the correct usage of child safety seats;
Whereas numerous government and private sector organizations have
agreed to work in concert to achieve a minimum 70 percent correct usage
of child passenger protection devices and adult safety belts by the year
1990;
Whereas research shows that the correct use of child passenger
protection devices is 90 percent effective in preventing death and 67
percent effective in preventing injury; and
Whereas death and injuries may be reduced significantly through
greater public awareness, information, education, and enforcement: Now,
therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the week of February 7-13,
1988, is designated as "National Child Passenger Safety Awareness Week",
and the President is authorized and requested to issue a proclamation
calling upon the people of the United States to observe such week with
appropriate programs, ceremonies, and activities to maximize correct
usage of child safety seats.
Approved February 10, 1988.
LEGISLATIVE HISTORY -- H.J. Res. 402 (S.J. Res. 214):
CONGRESSIONAL RECORD, Vol. 134 (1988): Feb. 3, considered and passed
House. Feb. 4, considered and passed Senate.
Public Law 100-244, 102 Stat. 5
Whereas the crew of the space shuttle Challenger was dedicated to
stimulating the interest of American children in space flight and
science generally;
Whereas the members of the Challenger crew gave their lives trying to
benefit the education of American children;
Whereas a fitting tribute to that effort and to the sacrifice of the
Challenger crew and their families is needed;
Whereas an appropriate form for such a tribute would be to expand
educational opportunities in science by the creation of a center that
will offer children and teachers activities and information derived from
American space research; and
Whereas the Challenger Center is the only institution expressly
established by the immediate families of the crew of the Challenger for
the above-named purposes, and it is intended to be the living expression
of the Nation's commemoration of the Challenger crew: Now, therefore,
be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That January 28, 1988, is
designated as "National Challenger Center Day" and the President is
authorized and requested to issue a proclamation calling on the people
of the United States to observe such day --
(1) by resolving that in the course of their regular activities
the people of the United States will remember both the Challenger
astronauts who died while serving their country, and the
importance of the Challenger Center is honoring the
accomplishments of the Challenger crew by continuing their goal of
the expansion of interest and ability in space and science
education; and
(2) with other appropriate ceremonies and activities.
Approved February 9, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 201:
CONGRESSIONAL RECORD: Vol. 133 (1987): Oct. 30, considered and
passed Senate. Vol. 134 (1988): Jan. 27, considered and passed House.
Public Law 100-243, 102 Stat. 3
Whereas women's athletics is one of the most effective avenues
available through which women of America may develop self-discipline,
initiative, confidence, and leadership skills;
Whereas support and fitness activity contributes to emotionial and
physical well-being and women need strong bodies as well as strong
minds;
Whereas the history of women in sports is rich and long, but there
has been little national recognition of the significance of women's
athletic achievements;
Whereas the number of women in leadership positions of coaches,
officials, and administrators has declined drastically over the last
decade and there is a need to restore women to these positions to ensure
a fair representation of women's abilities and to provide role models
for young female athletes;
Whereas the bonds built between women through athletics helps to
break down the social barriers of racism and prejudice;
Whereas the communication and cooperation skills learned through
athletic experience play a key role in the athlete's contributions at
home, at work, and to society;
Whereas women's athletics has produced such winners as Flo Hyman,
whose spirit, talent, and accomplishments distinguished her above others
and exhibited for all of us the true meaning of fairness, determination,
and team play;
Whereas early motor-skill training and enjoyable experiences of
physical activity strongly influence life-long habits of physical
fitness;
Whereas the athletic opportunities for male students at the
collegiate and high school level remain significantly greater than those
for female students; and
Whereas the number of funded research projects focusing on the
specific needs of women athletes is limited and the information provided
by these projects is imperative to the health and performance of future
women athletes: Now, therefore, be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That February 4, 1988, is
hereby designated as "National Women in Sports Day", and the President
is authorized and requested to issue a proclamation calling upon local
and State jurisdictions, appropriate Federal agencies, and the people of
the United States to observe the day with appropriate ceremonies and
activities.
Approved February 9, 1988.
LEGISLATIVE HISTORY -- S.J. Res. 196:
CONGRESSIONAL RECORD: Vol. 133 (1987): Dec. 3, considered and
passed Senate. Vol. 134 (1988): Feb. 2, considered and passed House.
Public Law 100-242, 101 Stat. 1815
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE. -- This Act "42 USC 5301 note" may be cited as the
"Housing and Community Development Act of 1987".
(b) TABLE OF CONTENTS. --
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purpose.
Sec. 3. Budget compliance.
Sec. 4. Credit limitation.
Sec. 5. Limitation on spending authority.
Sec. 101. Lower income housing authorization.
Sec. 102. Tenant rental contributions.
Sec. 103. Income eligibility for assisted housing.
Sec. 111. Discretionary preference for near elderly families in
public housing projects designed for the elderly.
Sec. 112. Grants for public housing development.
Sec. 113. Limitation on public housing development and assurance of
public housing quality standards.
Sec. 114. Limitation on recapture of funding reservations.
Sec. 115. Indian public housing.
Sec. 116. Location of acquired housing.
Sec. 117. Public housing child care grants.
Sec. 118. Payments for operation of lower income housing projects.
Sec. 119. Comprehensive improvement assistance program.
Sec. 120. Comprehensive improvement assistance special purpose
needs.
Sec. 121. Public housing demolition and disposition.
Sec. 122. Public housing resident management.
Sec. 123. Public housing homeownership and management opportunities.
Sec. 124. Treatment of certain public housing development funds.
Sec. 125. Energy efficient public housing demonstration.
Sec. 126. Public housing comprehensive transition demonstration.
Sec. 141. Section 8 contracts for existing dwelling units.
Sec. 142. Section 8 fair market rentals and contract rents.
Sec. 143. Housing voucher program.
Sec. 144. Administrative fees for section 8 certificate and housing
voucher programs.
Sec. 145. Portability of section 8 certificates and vouchers.
Sec. 146. Prohibition of denial of section 8 certificates and
vouchers to residents of public housing.
Sec. 147. Nondiscrimination against section 8 certificate holders
and voucher holders.
Sec. 148. Project-based section 8 assistance.
Sec. 149. Section 8 assistance for residents of rental
rehabilitation projects.
Sec. 150. Rental rehabilitation grants.
Sec. 151. Rental development grants.
Sec. 152. Termination of rental development grant program.
Sec. 161. Housing for the elderly and handicapped.
Sec. 162. Housing for the handicapped.
Sec. 163. Congregate services.
Sec. 164. Modification of restriction on use of assisted housing by
aliens.
Sec. 165. Preventing fraud and abuse in Department of Housing and
Urban Development programs.
Sec. 166. Annual report on characteristics of families in assisted
housing.
Sec. 167. Section 236 rental housing program.
Sec. 168. Tenant eligibility determinations in rent supplement
projects.
Sec. 169. Counseling to tenants and homeowners.
Sec. 170. Housing assistance technical amendments.
Sec. 181. Management and preservation of HUD-owned multifamily
housing projects.
Sec. 182. Acquisition of insured multifamily housing projects.
Sec. 183. Tenant participation in multifamily housing projects.
Sec. 184. Multifamily housing disposition partnership.
Sec. 185. Multifamily housing capital improvements assistance.
Sec. 186. Flexible subsidy program.
Sec. 201. Short title.
Sec. 202. Findings and purpose.
Sec. 203. Termination of certain provisions.
Sec. 221. General prepayment limitation.
Sec. 222. Notice of intent.
Sec. 223. Plan of action.
Sec. 224. Incentives to extend low income use.
Sec. 225. Criteria for approval of plan of action.
Sec. 226. Alternative State strategy.
Sec. 227. Timetable for approval of plan of action.
Sec. 228. Modification of existing regulatory agreements.
Sec. 229. Consultations with other interested parties.
Sec. 230. Right of conversion to alternative prepayment system.
Sec. 231. Insurance for second mortgage financing.
Sec. 232. Report to Congress.
Sec. 233. Definitions.
Sec. 234. Regulations.
Sec. 235. Effective date.
Sec. 241. Prepayment and refinancing procedures.
Sec. 242. Equity recapture loans and loans to nonprofit
organizations and public agencies.
Sec. 243. Use of Rural Housing Insurance Fund.
Sec. 261. Early prepayment.
Sec. 262. Section 8 assistance.
Sec. 263. Section 515 operating reserve and equity contribution
requirements.
Sec. 301. Program authorizations.
Sec. 302. Eligibility requirements.
Sec. 303. Escrowing taxes and insurance.
Sec. 304. Rural housing guaranteed loan demonstration.
Sec. 305. Definition of domestic farm labor.
Sec. 306. Conformance with low-income housing tax credit eligibility
requirements.
Sec. 307. Limitation of fees on rural rental housing loans.
Sec. 308. Rural area classification.
Sec. 309. Procedures for reduction of interest credits.
Sec. 310. Rural housing preservation grant program.
Sec. 311. Rural rental rehabilitation demonstration.
Sec. 312. Study of mortgage credit in rural areas.
Sec. 313. Debt settlement authority of Secretary.
Sec. 314. Manufactured housing.
Sec. 315. Loan packaging by nonprofit organizations.
Sec. 316. Rural housing technical amendments.
Sec. 401. Insurance authority for FHA.
Sec. 402. Amount to be insured under National Housing Act.
Sec. 403. Limitation on Federal Housing Administration insurance
premiums.
Sec. 404. Increase in maximum mortgage amount under single family
insurance program.
Sec. 405. Change in definition of veteran.
Sec. 406. Limitation on use of single family mortgage insurance by
investors.
Sec. 407. Actions to reduce losses under single family mortgage
insurance program.
Sec. 408. Insurance of graduated payment mortgages.
Sec. 409. Refinancing mortgage insurance for hospitals, nursing
homes, intermediate care facilities, and board and care homes.
Sec. 410. Mortgage insurance for nursing homes, intermediate care
facilities, and board and care homes.
Sec. 411. Requirement of State approval for mortgage insurance for
hospitals.
Sec. 412. Mortgage insurance for public hospitals.
Sec. 413. Mortgage insurance on Hawaiian home lands and Indian
reservations.
Sec. 414. Co-insurance program.
Sec. 415. Increases in authority to insure adjustable rate single
family mortgages.
Sec. 416. Penalties for equity skimming.
Sec. 417. Home equity conversion mortgage insurance demonstration.
Sec. 418. Assurance of adequate processing of applications for loan
and mortgage insurance.
Sec. 419. Prohibition of lender requirements discouraging loans with
lower principal amounts.
Sec. 420. Repeal of requirement to publish prototype housing costs
for 1- to 4-family dwelling units.
Sec. 421. Double damages remedy for unauthorized use of multifamily
housing project assets and income.
Sec. 422. Miscellaneous mortgage insurance provisions.
Sec. 423. Calculation of maximum mortgage amount under single family
insurance program.
Sec. 424. Approval of individual residential water purification or
treatment units.
Sec. 425. Regulation of rents in insured projects.
Sec. 426. Mortgage limits for multifamily projects.
Sec. 427. Operating loss loan insurance.
Sec. 428. Interest charges on temporary mortgage assistance payments
and assignment or other assistance.
Sec. 429. Mortgage insurance technical amendments.
Sec. 430. Release of pool funds.
Sec. 441. Limitations on certain secondary mortgage market fees.
Sec. 442. FNMA cumulative voting.
Sec. 443. Permanent authority to purchase second mortgages on
single-family properties.
Sec. 444. Period for approval of actions of FNMA.
Sec. 445. Prohibition of limitation on FHLMC mortgage operations.
Sec. 446. Limitation on GNMA guarantees of mortgage-backed
securities.
Sec. 501. Community development authorizations.
Sec. 502. Targeting of benefits to persons of low and moderate
income.
Sec. 503. City and county classifications.
Sec. 504. Eligible activities.
Sec. 505. Statement of activities and review.
Sec. 506. Alleviation of lakefront flooding and erosion.
Sec. 507. Housing assistance plans.
Sec. 508. Citizen participation plan.
Sec. 509. Conserving neighborhoods and housing by prohibiting
displacement.
Sec. 510. Limited new construction of housing under community
development block grant program.
Sec. 511. Availability of community development block grants for
uniform emergency telephone number systems.
Sec. 512. State certifications for receiving community development
block grants for nonentitlement areas.
Sec. 513. Administrative expenses of States distributing funds to
nonentitlement areas.
Sec. 514. Community development block grant loan guarantees.
Sec. 515. Urban development action grant selection criteria.
Sec. 516. Prohibition on use of urban development action grants for
business relocations.
Sec. 517. Urban homesteading.
Sec. 518. Rehabilitation loans.
Sec. 519. Loan cancellation.
Sec. 520. Neighborhood reinvestment corporation.
Sec. 521. Neighborhood development demonstration program.
Sec. 522. Park Central New Community Project.
Sec. 523. Community development projects labor standards.
Sec. 524. Urban planning.
Sec. 525. Community development technical amendments.
Sec. 541. Extension of flood insurance program.
Sec. 542. Extension of crime insurance program.
Sec. 543. Studies under national flood insurance program.
Sec. 544. Schedule for payment of flood insurance for structures on
land subject to imminent collapse or subsidence.
Sec. 545. Flood and crime insurance technical amendments.
Sec. 561. Fair housing initiatives program.
Sec. 562. Collection of certain data.
Sec. 563. Regulatory authority.
Sec. 564. Research and development.
Sec. 565. Home mortgage disclosure.
Sec. 566. Lead-based paint poisoning prevention.
Sec. 567. Median area income.
Sec. 568. Manufactured housing construction and safety standards.
Sec. 569. Nullification of right of redemption of single-family
mortgagors.
Sec. 570. Miscellaneous programs technical amendments.
Sec. 571. Use of American materials and products.
Sec. 572. Study of voluntary standards for modular homes.
Sec. 601. Statement of purpose.
Sec. 602. Definitions.
Sec. 603. Assistance to nonprofit organizations.
Sec. 604. Use of assistance.
Sec. 605. Program requirements.
Sec. 606. Terms and conditions of assistance.
Sec. 607. Program selection criteria.
Sec. 608. Distribution of assistance to nonprofit organizations.
Sec. 609. Nehemiah Housing Opportunity Fund.
Sec. 610. Report.
Sec. 611. Regulations.
Sec. 612. Authorization of appropriations.
Sec. 613. Sunset.
Sec. 701. Designation of enterprise zones.
Sec. 702. Evaluation and reporting requirements.
Sec. 703. Interaction with other Federal programs.
Sec. 704. Waiver or modification of housing and community
development rules in enterprise zones.
Sec. 705. Coordination of housing and urban development programs in
enterprise zones.
Sec. 706. Coordination with CDBG and UDAG programs.
SEC. 2. "42 USC 5301 note" FINDINGS AND PURPOSE.
(a) FINDINGS. -- The Congress finds that --
(1) for the past 50 years, the Federal Government has taken the
leading role in enabling the people of the Nation to be the best
housed in the world, and recent reductions in Federal assistance
have contributed to a deepening housing crisis for low- and
moderate-income families;
(2) the efforts of the Federal Government have included a
system of specialized lending institutions, favorable tax
policies, construction assistance, mortgage insurance, loan
guarantees, secondary markets, and interest and rental subsidies,
that have enabled people to rent or buy affordable, decent, safe,
and sanitary housing; and
(3) the tragedy of homelessness in urban and suburban
communities across the Nation, involving a record number of
people, dramatically demonstrates the lack of affordable
residential shelter, and people living on the economic margins of
our society (lower income families, the elderly, the working poor,
and the deinstitutionalized) have few available alternatives for
shelter.
(b) PURPOSE. -- The purpose of this Act, therefore, is --
(1) to reaffirm the principle that decent and affordable
shelter is a basic necessity, and the general welfare of the
Nation and the health and living standards of its people require
the addition of new housing units to remedy a serious shortage of
housing units for all Americans, particularly for persons of low
and moderate income;
(2) to make the distribution of direct and indirect housing
assistance more equitable by providing Federal assistance for the
less affluent people of the Nation;
(3) to provide needed housing assistance for homeless people
and for persons of low and moderate income who lack affordable,
decent, safe, and sanitary housing; and
(4) to reform existing programs to ensure that such assistance
is delivered in the most efficient manner possible.
SEC. 3. "42 USC 5301 note" BUDGET COMPLIANCE.
(a) IN GENERAL. -- This Act and the amendments made by this Act may
not be construed to provide for new budget authority, budget outlays, or
new entitlement authority, for fiscal year 1988 in excess of the
appropriate aggregate levels established by the concurrent resolution on
the budget for such fiscal year for the programs authorized by this Act
and the amendments made by this Act.
(b) DEFINITIONS. -- For purposes of this section, the terms "budget
authority", "budget outlays", "concurrent resolution on the budget", and
"entitlement authority" have the meanings given such terms in section 3
of the Congressional Budget Act of 1974 (2 U.S.C. 622).
SEC. 4. "42 USC 5301 note" CREDIT LIMITATION.
Any new credit authority (as defined in section 3 of the
Congressional Budget Act of 1974) which is provided by this Act, or by
an amendment made by this Act, shall be effective only to such extent or
in such amounts as are provided in appropriation Acts.
SEC. 5. "42 USC 5301 note" LIMITATION ON SPENDING AUTHORITY.
Any new spending authority (as defined in section 401(c) of the
Congressional Budget Act of 1974) which is provided by this Act, or by
an amendment made by this Act, shall be effective only to such extent or
in such amounts as are provided in appropriation Acts.
SEC. 101. LOWER INCOME HOUSING AUTHORIZATION.
(a) AGGREGATE BUDGET AUTHORITY. -- Section 5(c)(6) of the United
States Housing Act "42 USC 1437c" of 1937 is amended by adding at the
end the following new sentence: "The aggregate amount of budget
authority that may be obligated for contracts for annual contributions
for assistance under section 8, for contracts referred to in paragraphs
(7)(A)(iv) and (7)(B)(iv), for grants for public housing, for
comprehensive improvement assistance, and for amendments to existing
contracts, is increased (to the extent approved in appropriations Acts)
by $7,167,000,000 on October 1, 1987, and by $7,300,945,000 on October
1, 1988.".
(b) UTILIZATION OF BUDGET AUTHORITY. -- Section 5(c)(7) of the
United States Housing Act of 1937 is amended to read as follows:
"(7)(A) Using the additional budget authority provided under
paragraph (6) and the balances of budget authority that become available
during fiscal year 1988, the Secretary shall, to the extent approved in
appropriations Acts, reserve authority to enter into obligations
aggregating --
"(i) for public housing grants under subsection (a)(2), not
more than $481,320,000, of which amount not more than $144,696,000
shall be available for Indian housing;
"(ii) for assistance under subsections (b)(1) and (o) of
section 8, not more than $2,415,000,000;
"(iii) for assistance under section 8(e)(2), not more than
$400,000,000;
"(iv) for assistance under section 8 in connection with
projects developed under section 202 of the Housing Act of 1959,
not more than $1,681,830,000;
"(v) for comprehensive improvement assistance grants under
section 14, not more than $1,700,000,000;
"(vi) for assistance under section 8 for property disposition,
not more than $301,700,000; and
"(vii) for assistance under section 8 for loan management, not
more than $187,150,000.
"(B) Using the additional budget authority provided under paragraph
(6) and the balances of budget authority that become available during
fiscal year 1989, the Secretary shall, to the extent approved in
appropriations Acts, reserve authority to enter into obligations
aggregating --
"(i) for public housing grants under subsection (a)(2), not
more than $490,465,000, of which amount not more than $147,445,000
shall be available for Indian housing;
"(ii) for assistance under subsections (b)(1) and (o) of
section 8, not more than $2,458,660,000;
"(iii) for assistance under section 8(e)(2), not more than
$407,600,000;
"(iv) for assistance under section 8 in connection with
projects developed under section 202 of the Housing Act of 1959,
not more than $1,713,785,000;
"(v) for comprehensive improvement assistance grants under
section 14, not more than $1,732,300,000;
"(vi) for assistance under section 8 for property disposition,
not more than $307,430,000; and
"(vii) for assistance under section 8 for loan management, not
more than $190,705,000.
"(C)(i) Any amount available for the conversion of a project to
assistance under section 8(b)(1), if not required for such purpose,
shall be used for assistance under section 8(b)(1).
"(ii) Any amount available for assistance under section 8 for
property disposition, if not required for such purpose, shall be used
for assistance under section 8(b)(1).".
SEC. 102. TENANT RENTAL CONTRIBUTIONS.
(a) ECONOMIC RENT. -- Section 3(a) of the United States Housing Act
"42 USC 1437a" of 1937 is amended --
(1) by inserting "(1)" after "(a)";
(2) in the last sentence, by striking "A" and inserting the
following: "Except as provided in paragraph (2), a";
(3) by redesignating paragraphs (1) through (3) as
subparagraphs (A) through (C), respectively; and
(4) by adding at the end the following new paragraph:
"(2)(A) Any public housing agency may provide that each family
residing in a public housing project owned and operated by such agency
(or in lower income housing assisted under section 8 that contains more
than 2,000 dwelling units) shall pay as monthly rent for not more than a
3-year period an amount determined by such agency to be appropriate that
does not exceed a maximum amount that --
"(i) is established by such agency and approved by the
Secretary;
"(ii) is not more than the amount payable as rent by such
family under paragraph (1); and
"(iii) is not less than the average monthly amount of debt
service and operating expenses attributable to dwelling units of
similar size in public housing projects owned and operated by such
agency.
"(B) The 3-year limitation established in subparagraph (A) shall not
apply to any family residing in a public housing project administered by
an Indian public housing agency.".
(b) UTILITY ALLOWANCE. --
(1) The Comptroller General of the United States shall submit
to the Congress not later than October 30, 1988, a report
regarding the utility allowances provided to the residents of
public housing and housing assisted under section 8 of the United
States Housing Act of 1937.
(2) The report shall include the following:
(A) A description of the manner in which public housing
agencies are currently calculating utility allowances, including a
national survey of the calculation methods used.
(B) An estimate of the number of residents of public housing
and housing assisted under section 8 of the United States Housing
Act of 1937 paying more than 30 percent of monthly adjusted income
for rent and utilities, including a separate estimate for each
meter category.
(C) Recommendations for revisions that may be made in current
law to ensure that --
(i) utility allowances will not differ solely because of the
metering system of the dwelling unit;
(ii) residents of public housing and housing assisted under
section 8 of the United States Housing Act of 1937 will not pay
more than 30 percent of monthly adjusted income for rent and
utilities; and
(iii) such residents will have a strong incentive to conserve
energy and reduce utility costs, and residents who waste
substantial amounts of energy will be penalized.
(D) A description of administratively feasible methods of
ensuring that utility allowances will reflect differences in the
size, location, and energy-conserving condition of different types
of dwelling units and appliances.
(E) An estimate of the costs that will be associated with any
recommendation made under subparagraph (C).
(3) In preparing the report under this subsection, the
Comptroller General shall consult with the Secretary of Housing
and Urban Development, other appropriate Federal officials, other
knowledgeable individuals, and national and other organizations
representing public housing agencies, local governments, tenants,
and energy conservation interests.
SEC. 103. INCOME ELIGIBILITY FOR ASSISTED HOUSING.
(a) IMPLEMENTATION OF PERCENTAGE LIMITATIONS. -- Section 16 of the
United States Housing Act "42 USC 1437n" of 1937 is amended by adding at
the end the following:
"(c) In developing admission procedures implementing subsection (b),
the Secretary may not totally prohibit admission of lower income
families other than very low-income families, and shall establish, as
appropriate, differing percentage limitations on admission of lower
income families in separate assisted housing programs that, when
aggregated, will achieve the overall percentage limitation contained in
subsection (b). The Secretary shall issue regulations to carry out this
subsection not later than 60 days after the date of the enactment of the
Housing and Community Development Act of 1987.".
(b) EXEMPTIONS FROM PERCENTAGE LIMITATIONS. -- Section 16 of the
United States Housing Act of 1937 (as amended by subsection (a) of this
section) is further amended by adding at the end the following new
subsection:
"(d)(1) The limitations established in subsection (b) shall not apply
to dwelling units made available under section 8 housing assistance
contracts for the purpose of preventing displacement, or ameliorating
the effects of displacement, including displacement caused by rents
exceeding 30 percent of monthly adjusted family income, of lower income
families from projects being rehabilitated with assistance from
rehabilitation grants under section 17 and the Secretary shall not
otherwise unduly restrict the use of payments under section 8 housing
assistance contracts for this purpose.
"(2) The limitations established in subsections (a) and (b) shall not
apply to dwelling units assisted by Indian public housing agencies.".
SEC. 111. DISCRETIONARY PREFERENCE FOR NEAR ELDERLY FAMILIES IN
PUBLIC HOUSING PROJECTS DESIGNED FOR THE ELDERLY.
Section 3(b)(3) "42 USC 1437a" of the United States Housing Act of
1937 is amended by adding at the end the following new sentence: "In
determining priority for admission to public housing projects designed
for elderly families, the public housing agency shall give preference to
such families. When the public housing agency determines (in accordance
with regulations of the Secretary) that there are insufficient numbers
of elderly families to fill all the units in such a project, the agency
may give preference to families in which the head of household (or
spouse) is at least 50 years of age but below the age of 62 before those
in which the head of household and spouse, if any, are below the age of
50.".
SEC. 112. GRANTS FOR PUBLIC HOUSING DEVELOPMENT.
(a) AUTHORITY TO PROVIDE GRANTS. -- Section 5(a) of the United
States Housing Act "42 USC 1437c" of 1937 is amended to read as follows:
"(a)(1) The Secretary may make annual contributions to public housing
agencies to assist in achieving and maintaining the lower income
character of their projects. The Secretary shall embody the provisions
for such annual contributions in a contract guaranteeing their payment.
The contribution payable annually under this section shall in no case
exceed a sum equal to the annual amount of principal and interest
payable on obligations issued by the public housing agency to finance
the development or acquisition cost of the lower income project
involved. Annual contributions payable under this section shall be
pledged, if the Secretary so requires, as security for obligations
issued by a public housing agency to assist the development or
acquisition of the project to which annual contributions relate and
shall be paid over a period not to exceed 40 years.
"(2) The Secretary may make contributions (in the form of grants) to
public housing agencies to cover the development cost of public housing
projects. The contract under which such contributions shall be made
shall specify the amount of capital contributions required for each
project to which the contract pertains, and that the terms and
conditions of such contract shall remain in effect for a 40-year period.
"(3) The amount of contributions that would be established for a
newly constructed project by a public housing agency designed to
accommodate a number of families of a given size and kind may be
established under this section for a project by such public housing
agency that would provide housing for the comparable number, sizes, and
kinds of families through the acquisition and rehabilitation, or use
under lease, of structures that are suitable for lower income housing
use and obtained in the local market.".
(b) CONFORMING AMENDMENTS. --
(1) Section 5 of the United States Housing Act of 1937 is
amended --
(A) by striking "ANNUAL" in the section heading; and
(B) by striking "annual" in subsection (e)(2).
(2) Section 6 "42 USC 1437d" of the United States Housing Act
of 1937 is amended by striking "annual" the first place it appears
in the first sentence of subsection (g), and each place it appears
in subsection (d) and the first sentence of each of subsections
(a) and (c).
(3) Section 7 "42 USC 1437e" of the United States Housing Act
of 1937 is amended by striking "annual" in the proviso in the
first sentence.
(4) Section 9(a)(2) "42 USC 1437g" of the United States Housing
Act of 1937 is amended --
(A) by striking "being assisted by an annual contributions
contract authorized by section 5(c)" and inserting the following:
"one developed pursuant to a contributions contract authorized by
section 5"; and
(B) by striking "any such annual" and inserting "any such".
(5) Section 12 "42 USC 1437j" of the United States Housing Act
of 1937 is amended by striking "annual".
(6) Section 14 "42 USC 1437l" of the United States Housing Act
of 1937 is amended --
(A) by striking "receive assistance under section 5(c)" in
subsection (c)(2) and inserting "assisted under section 5"; and
(B) by striking "annual" in each of paragraphs (2) and (4)(C)
of subsection (d).
(7) Section 15 "42 USC 1437m" of the United States Housing Act
of 1937 is amended by striking "with loans or debt service annual
contributions" in clause (2).
(8) Section 16(b) "42 USC 1437n" of the United States Housing
Act of 1937 is amended by striking "annual".
(9) Section 18(c) "42 USC 1437p" of the United States Housing
Act of 1937 is amended by striking "annual contributions
authorized under section 5(c)" and inserting "contributions
authorized under section 5".
SEC. 113. LIMITATION ON PUBLIC HOUSING DEVELOPMENT AND ASSURANCE OF
PUBLIC HOUSING QUALITY STANDARDS.
Section 5 "42 USC 1437c" of the United States Housing Act of 1937 is
amended by adding at the end the following new subsection:
"(j)(1) After September 30, 1987, in providing assistance under this
Act to a public housing agency for public housing (other than for Indian
families), the Secretary shall reserve funds for the development of
public housing only if --
"(A) the Secretary determines that additional amounts are
required to complete the development of dwelling units for which
amounts are obligated on or before such date;
"(B) the public housing agency certifies to the Secretary that
85 percent of the public housing dwelling units of the public
housing agency --
"(i) are maintained in substantial compliance with the housing
quality standards established by the Secretary under section
8(o)(6);
"(ii) will be so maintained upon completion of modernization
for which funding has been awarded; or
"(iii) will be so maintained upon completion of modernization
for which applications are pending that have been submitted in
good faith under section 14 (or a comparable State or local
government program) and that there is a reasonable expectation, as
determined by the Secretary in writing, that the applications
would be approved;
"(C) the public housing agency certifies that such development
--
"(i) will replace dwelling units that are disposed of or
demolished by the public housing agency, including dwelling units
disposed of or lost through sale to tenants or through units
redesign; or
"(ii) is required to comply with court orders or directions of
the Secretary;
"(D) the public housing agency certifies that it has demands
for family housing not satisfied by the rental assistance programs
established in subsection (b) or (o) of section 8 for which it
plans to construct or acquire projects of not more than 100 units;
or
"(E) the Secretary makes such reservation under paragraph (2).
"(2) Notwithstanding any other provision of law, not more than 20
percent of the funds appropriated for development of public housing also
may be committed by the Secretary for the substantial redesign,
reconstruction, or redevelopment of existing public housing projects or
units, which work shall be carried out pursuant to the rules and
regulations applicable to the development of public housing.".
SEC. 114. LIMITATION ON RECAPTURE OF FUNDING RESERVATIONS.
Section 5 of the United States Housing Act of 1937 (as amended by
section 113 of this Act) is further amended by adding at the end the
following new subsection:
"(k) After the reservation of public housing development funds to a
public housing agency, the Secretary may not recapture any of the
amounts included in such reservation due to the failure of a public
housing agency to begin construction or rehabilitation, or to complete
acquisition, during the 30-month period following the date of such
reservation. During such 30-month period, the public housing agency
shall be permitted to change the site of the public housing project or
reformulate the project, if not less than the original number of
dwelling units are to be constructed, rehabilitated, or acquired. There
shall be excluded from the computation of such 30-month period any delay
in the beginning of construction or rehabilitation of such project
caused by (1) the failure of the Secretary to process such project
within a reasonable period of time; (2) any environmental review
requirement; (3) any legal action affecting such project; or (4) any
other factor beyond the control of the public housing agency.".
SEC. 115. INDIAN PUBLIC HOUSING.
Section 5 of the United States Housing Act of 1937 (as amended by
section 114 of this Act) is further amended by adding at the end the
following new subsection:
"(l) The Secretary may not use as a criterion for distributing
assistance under this section the progress made by an Indian public
housing agency in collecting rents owed by tenants unless --
"(1) such criterion is used as 1 of several criteria that are
weighted proportionally and is established by regulations issued
after public notice and opportunity to comment in accordance with
section 553 of title 5, United States Code; or
"(2) the Secretary determines that the Indian public housing
agency has demonstrated a pattern of substantial noncompliance
with requirements governing the collection of rents.".
SEC. 116. LOCATION OF ACQUIRED HOUSING.
Section 6(h) "42 USC 1437d" of the United States Housing Act of 1937
is amended --
(1) by inserting before "is" the following: "in the
neighborhood where the public housing agency determines the
housing is needed"; and
(2) by inserting "in such neighborhood" after "rehabilitation".
SEC. 117. PUBLIC HOUSING CHILD CARE GRANTS.
Section 222 "12 USC 1701z-6 note" of the Housing and Urban-Rural
Recovery Act of 1983 is amended to read as follows:
"SEC. 222. (a) PROGRAM AUTHORITY. --
"(1) The Secretary of Housing and Urban Development shall, to
the extent approved in appropriation Acts, carry out a
demonstration program of making grants to nonprofit organizations
to assist such organizations in providing child care services in
lower income housing projects for lower income families who reside
in public housing.
"(2) The Secretary shall design the program described in
paragraph (1) to determine the extent to which the availability of
child care services in lower income housing projects facilitates
the employability of the parents or guardians of children residing
in public housing.
"(b) ELIGIBILITY FOR ASSISTANCE. -- The Secretary may make a grant
to a nonprofit organization for child care services in a lower income
housing project only if --
"(1) prior to receipt of assistance under this section, a child
care services program is not in operation in the project;
"(2) the public housing agency agrees to provide suitable
facilities for the provision of child care services;
"(3) the child care services program in the project will serve
preschool children during the day, school children after school,
or both, in order to permit the parents or guardians of such
children to obtain, retain, or train for employment;
"(4) the child care services program in the project is
designed, to the extent practicable, to involve the participation
of the parents of children benefiting from such program;
"(5) the child care services program in the project is
designed, to the extent practicable, to employ in part-time
positions elderly individuals who reside in the lower income
housing project involved; and
"(6) the child care services program in the project complies
with all applicable State and local laws, regulations, and
ordinances.
"(c) ALLOCATION OF ASSISTANCE. -- In providing grants under this
section, the Secretary shall --
"(1) give priority to nonprofit organizations providing child
care services in lower income housing projects in which reside the
largest number of preschool and school children of lower income
families;
"(2) seek to ensure a reasonable distribution of such grants
between urban and rural areas and among nonprofit organizations
providing child care services in lower income housing projects of
varying sizes; and
"(3) seek to provide such grants to the largest number of
nonprofit organizations practicable, considering the amount of
funds available under this section and the financial requirements
of the particular child care services programs to be established
in the lower income housing projects for which applications are
submitted under this section.
"(d) ADMINISTRATIVE PROVISIONS. --
"(1) Applications for grants under this section shall be made
by nonprofit organizations (in consultation with public housing
agencies) in such form, and according to such procedures, as the
Secretary may prescribe.
"(2) Any nonprofit organization receiving a grant under this
section may use such grant only for operating expenses and minor
renovations of facilities necessary to the provision of child care
services under this section.
"(3) The Secretary shall conduct periodic evaluations of each
child care services program assisted under this section for
purposes of --
"(A) determining the effectiveness of such program in providing
child care services and permitting the parents or guardians of
children residing in public housing to obtain, retain, or train
for employment; and
"(B) ensuring compliance with the provisions of this section.
"(4) No provision of this section may be construed to authorize
the Secretary to establish any health, safety, educational, or
other standards with respect to child care services or facilities
assisted with grants received under this section. Such services
and facilities shall comply with all applicable State and local
laws, regulations, and ordinances, and all requirements
established by the Secretary of Health and Human Services for
child care services and facilities.
"(e) REPORT TO CONGRESS. -- Not later than the expiration of the
3-year period following the date of the enactment of the Housing and
Community Development Act of 1987, the Secretary shall prepare and
submit to the Congress a detailed report setting forth the findings and
conclusions of the Secretary as a result of carrying out the
demonstration program established in this section. Such report shall
include any recommendations of the Secretary with respect to the
establishment of a permanent program of assisting child care services in
lower income housing projects.
"(f) DEFINITIONS. -- For purposes of this section:
"(1) The term 'lower income families' has the meaning given
such term in section 3(b)(2) of the United States Housing Act of
1937.
"(2) The terms 'lower income housing project' and 'public
housing' have the meanings given such terms in section 3(b)(1) of
the United States Housing Act of 1937.
"(3) The term 'public housing agency' has the meaning given
such term in section 3(b)(6) of the United States Housing Act of
1937.
"(4) The term 'Secretary' means the Secretary of Housing and
Urban Development.
"(g) AUTHORIZATION OF APPROPRIATIONS. -- Of the total amount
approved in appropriation Acts under section 103 of the Housing and
Community Development Act of 1974, there shall be set aside to carry out
this section $5,000,000 for fiscal year 1988 and $5,210,000 for fiscal
year 1989.".
SEC. 118. PAYMENTS FOR OPERATION OF LOWER INCOME HOUSING PROJECTS.
(a) PERFORMANCE FUNDING SYSTEM. -- Section 9(a) of the United States
Housing Act "42 USC 1437g" of 1937 is amended --
(1) by striking the last sentence of paragraph (1); and
(2) by adding at the end the following new paragraph:
"(3)(A) For purposes of making payments under this section, the
Secretary shall utilize a performance funding system that is
substantially based on the system defined in regulations and in effect
on the date of the enactment of the Housing and Community Development
Act of 1987 (as modified by this paragraph), and that establishes
standards for costs of operation and reasonable projections of income,
taking into account the character and location of the project and the
characteristics of the families served, in accordance with a formula
representing the operations of a prototype well-managed project. Such
performance funding system shall be established in consultation with
public housing agencies and their associations, be contained in a
regulation promulgated by the Secretary prior to the start of any fiscal
year to which it applies, and remain in effect for the duration of such
fiscal year without change. Notwithstanding the preceding sentences,
the Secretary shall revise the performance funding system by June 15,
1988, to accurately reflect the increase in insurance costs incurred by
public housing agencies.
"(B) Under the performance funding system established under this
paragraph --
"(i) in the first year that the reductions occur, any public
housing agency shall share equally with the Secretary any cost
reductions due to the differences between projected and actual
utility rates attributable to actions taken by the agency which
lead to such reductions;
"(ii) in the case of any public housing agency that receives
financing (from a person other than the Secretary) or enters into
a performance contract to undertake energy conservation
improvements in a public housing project, under which payment does
not exceed the cost of the energy saved as a result of the
improvements during a negotiated contract period of not more than
12 years that is approved by the Secretary --
"(I) the public housing agency shall retain 100 percent of any
cost avoidance due to differences between projected and actual
utility consumption (adjusted for heating degree days)
attributable to the improvements, until the term of the financing
agreement is completed, at which time the annual utility expense
level 3-year rolling base procedures shall be applied using --
"(a) in the first year following the end of the contract
period, the energy use during the 2 years prior to installation of
the energy conservation improvements and the last contract year;
"(b) in the second year following the end of the contract
period, the energy use during the 1 year prior to installation of
the energy conservation improvements and the 2 years following the
end of the contract period; and
"(c) in the third year following the end of the contract
period, the energy use in the 3 years following the end of the
contract period; or
"(II) the Secretary shall provide an additional operating
subsidy above the current allowable utility expense level
equivalent to the cost of the energy saved as a result of the
improvements and sufficient to cover payments for the improvements
through the term of the contract or agreement;
"(iii) there shall be a formal review process for the purpose
of providing such revisions (either increases or reductions) to
the allowable expense level of a public housing agency as
necessary --
"(I) to correct inequities and abnormalities that exist in the
base year expense level of such public housing agency;
"(II) to accurately reflect changes in operating circumstances
since the initial determination of such base year expense level;
and
"(III) to ensure that the allowable expense limit accurately
reflects the higher cost of operating the project in an
economically distressed unit of local government and the lower
cost of operating the project in an economically prosperous unit
of local government; and
"(iv) if a public housing agency redesigns or substantially
rehabilitates a public housing project so that 2 or more dwelling
units are combined to create a single larger dwelling unit, the
payments received under this section shall not be reduced solely
because of the resulting reduction in the number of dwelling units
if not less than the same number of individuals will reside in the
new larger dwelling unit as resided in the dwelling units that
were combined to form such larger dwelling unit.".
(b) AUTHORIZATION OF APPROPRIATIONS. -- Section 9(c) of the United
States Housing Act "42 USC 1437g" of 1937 is amended to read as follows:
"(c) There are authorized to be appropriated for purposes of
providing annual contributions under this section $1,500,000,000 for
fiscal year 1988 and $1,530,000,000 for fiscal year 1989.".
(c) TIME OF PAYMENT. -- Section 9 of the United States Housing Act
of 1937 is amended by adding at the end the following new subsection:
"(e) In the case of any public housing agency that submits its budget
for any fiscal year of such agency to the Secretary in a timely manner
in accordance with the regulations issued by the Secretary under this
section, assistance to be provided to such agency under this section for
such fiscal year shall commence not later than the 1st month of such
fiscal year, and shall be paid in accordance with such payment schedule
as may be agreed upon by the Secretary and such agency.".
(d) USE OF OPERATING SUBSIDIES TO REMEDY PHA NONCOMPLIANCE WITH AUDIT
RESPONSIBILITIES. -- Section 9(a)(1) of the United States Housing Act
of 1937 is amended by adding at the end the following new sentences:
"If the Secretary determines that a public housing agency has failed to
take the actions required to submit an acceptable audit on a timely
basis in accordance with chapter 75 of title 31, United States Code, the
Secretary may arrange for, and pay the costs of, the audit. In such
circumstances, the Secretary may withhold, from assistance otherwise
payable to the agency under this section, amounts sufficient to pay for
the reasonable costs of conducting an acceptable audit, including, when
appropriate, the reasonable costs of accounting services necessary to
place the agency's books and records in auditable condition.".
SEC. 119. COMPREHENSIVE IMPROVEMENT ASSISTANCE PROGRAM.
(a) PURPOSE OF AMENDMENTS. -- It is the purpose of the amendments
made by this section -- "42 USC 1437l note"
(1) to provide assistance on a reliable and more predictable
basis to public housing agencies in furtherance of their plans to
enable them to operate, upgrade, modernize, and rehabilitate
public housing projects financed under the United States Housing
Act of 1937 to ensure their continued availability for the benefit
of lower income families as decent, safe, and sanitary rental
housing at affordable rents;
(2) to provide considerable discretion to public housing
agencies to decide the specific improvements, the manner of their
execution, and the timing of the expenditure of funds in the
modernization of projects under section 14 of the United States
Housing Act of 1937;
(3) to significantly simplify the program of Federal assistance
for capital improvements in public housing projects;
(4) to provide increased opportunities and incentives for more
efficient management of public housing projects; and
(5) to afford public housing agencies greater control in
planning and expending funds under the United States Housing Act
of 1937 for the modernization, rehabilitation, maintenance, and
improvement of public housing projects to benefit lower income
families.
(b) AUTHORITY TO PROVIDE FINANCIAL ASSISTANCE. -- Section 14(b) of
the United States Housing Act "42 USC 1437l" of 1937 is amended --
(A) by inserting "(1)" after the subsection designation; and
(B) by adding at the end the following new paragraph:
"(2) The Secretary may make contributions (in the form of grants) to
public housing agencies under this section. The contract under which
the contributions shall be made shall specify that the terms and
conditions of the contract shall remain in effect for a 20-year period
for any project receiving the benefit of a grant under the contract.".
(c) APPLICATION BY PHA's MANAGING LESS THAN 500 UNITS. -- Section
14(d) of the United States Housing Act of 1937 is amended in the matter
preceding paragraph (1) by inserting after "subsection (b)" the
following: "to a public housing agency that owns or operates less than
500 public housing dwelling units".
(d) COMPREHENSIVE PLANS. -- Section 14 of the United States Housing
Act of 1937 is amended --
(1) by redesignating subsection (e) as subsection (f); and
(2) by inserting after subsection (d) the following new
subsection:
"(e)(1) No financial assistance may be made available under this
section to a public housing agency that owns or operates 500 or more
public housing dwelling units unless the Secretary approves (or has
approved before the effective date of this subsection) a 5-year
comprehensive plan submitted by the public housing agency, except that
the Secretary may provide such assistance if it is necessary to correct
conditions that constitute an immediate threat to the health or safety
of tenants. The comprehensive plan shall contain --
"(A) a comprehensive assessment of --
"(i) the current physical condition of each public housing
project owned or operated by the public housing agency;
"(ii) the physical improvements necessary for each such project
to permit the project --
"(I) to be rehabilitated to a level at least equal to the
modernization standards specified in the Modernization Handbook of
the Department of Housing and Urban Development in effect on the
date of the enactment of the Housing and Community Development Act
of 1987, as well as the modernization standards established by the
Secretary and in effect at the time of the preparation of the
comprehensive plan; and
"(II) to comply with life-cycle cost-effective energy
conservation performance standards established by the Secretary to
reduce operating costs over the estimated life of the building;
and
"(iii) the replacement needs of equipment systems and
structural elements that will be required to be met (assuming
routine and timely maintenance is performed) during the 5-year
period covered by the comprehensive plan;
"(B) a comprehensive assessment of the improvements needed to
upgrade the management and operation of the public housing agency
and of each such project so that decent, safe, and sanitary living
conditions will be provided such projects, which assessment shall
include at least an identification of needs related to --
"(i) the management, financial, and accounting control systems
of the public housing agency that are related to such projects;
"(ii) the adequacy and qualifications of personnel appropriate
to be employed by the public housing agency (in the management and
operation of such projects) for each significant category of
employment; and
"(iii) the improvement of the efficacy of --
"(I) tenant programs and services in such projects;
"(II) the security of each such project and its tenants;
"(III) policies and procedures of the public housing agency for
the selection and eviction of tenants in such projects; and
"(IV) other policies and procedures of the public housing
agency relating to such projects, as specified by the Secretary;
"(C) an analysis, made on a project-by-project basis in
accordance with standards and criteria prescribed by the
Secretary, demonstrating that completion of the improvements and
replacements identified under subparagraphs (A) and (B) will
reasonably ensure the long-term physical and social viability of
each such project at a reasonable cost;
"(D) an action plan for making the improvements and
replacements identified under subparagraphs (A) and (B) that are
determined under the analysis described in subparagraph (C) to
reasonably ensure long-term viability of each such project at a
reasonable cost, which action plan shall include at least a
schedule, in order of priority established by the public housing
agency, of the actions that are to be completed over a period of 5
years from the date of approval of the comprehensive plan by the
Secretary (or any longer period reasonably needed to make the
improvements and replacements, considering the scope of the
improvements and replacements and the amount of funding provided)
and that are necessary --
"(i) to make the improvements and replacements identified under
subparagraph (A) for each project expected to receive capital
improvements or replacements (with priority to improvements and
replacements required to correct any life threatening condition);
and
"(ii) to upgrade the management and operation of the public
housing agency and its public housing projects as described in
subparagraph (B);
"(E) a statement, to be signed by the chief local government
official (or Indian tribal official, if appropriate), certifying
that --
"(i) the comprehensive plan was developed by the public housing
agency in consultation with appropriate local government officials
(or Indian tribal officials) and with tenants of the housing
projects (or tenants of the Indian housing projects) eligible for
assistance under this section, which shall include at least one
public hearing that shall be held prior to the initial adoption of
any plan by the public housing agency for use of such assistance,
and afford tenants and interested parties an opportunity to
summarize their priorities and concerns, to ensure their due
consideration in the planning process of the public housing
agency; and
"(ii) the comprehensive plan is consistent with the assessment
of the community of its lower income housing needs and that the
unit of general local government (or Indian tribe) will cooperate
in the provision of tenant programs and services (as defined in
section 3(c)(2));
"(F) a statement, to be signed by the chief public housing
official, certifying that the public housing agency will carry out
the comprehensive plan in conformity with title VI of the Civil
Rights Act of 1964, title VIII of the Act of April 11, 1968
(commonly known as the Civil Rights Act of 1968), and section 504
of the Rehabilitation Act of 1973;
"(G) a preliminary estimate of the total cost of the items
identified in subparagraphs (A) and (B), including a preliminary
estimate of the funds that will be required during each year
covered by the comprehensive plan to accomplish the work pursuant
to the action plan; and
"(H) such other information as the Secretary may require.
"(2)(A) The Secretary shall approve a comprehensive plan unless --
"(i) the comprehensive plan is incomplete in significant
matters;
"(ii) on the basis of available significant facts and data
pertaining to the physical and operational condition of the public
housing projects of the public housing agency or the management
and operations of the public housing agency, the Secretary
determines that the identification by the public housing agency of
needs is plainly inconsistent with such facts and data;
"(iii) on the basis of the comprehensive plan, the Secretary
determines that the action plan described in paragraph (1)(D) is
plainly inappropriate to meeting the needs identified in the
comprehensive plan, or that the public housing agency has failed
to demonstrate that completion of improvements and replacements
identified under subparagraphs (A) and (B) of paragraph (1) will
reasonably ensure long-term viability of one or more public
housing projects to which they relate at a reasonable cost; or
"(iv) there is evidence available to the Secretary that tends
to challenge in a substantial manner any certification contained
in the comprehensive plan.
"(B) The comprehensive plan shall be considered to be approved,
unless the Secretary notifies the public housing agency in writing
within 75 calendar days of submission that the Secretary has disapproved
the comprehensive plan as submitted, indicating the reasons for
disapproval and modifications required to make the comprehensive plan
approvable.
"(3)(A) Each public housing agency that owns or operates 500 or more
public housing dwelling units shall, after being advised by the
Secretary of the estimated assistance it will receive under this section
in any fiscal year, submit to the Secretary, at a date determined by the
Secretary, an annual statement of the activities and expenditures
projected to be undertaken, in whole or in part, by such assistance
during the 12-month period immediately following the execution of the
contract for such assistance. The Secretary, in establishing the
funding for a public housing agency for any fiscal year, shall review
the relative needs for restoring public housing shown by the approved
comprehensive plans in the regional or area office of the Department of
Housing and Urban Development for such agency. As long as the
activities and expenditures are consistent with the approved plan, the
public housing agency shall have total discretion in expending
assistance for any activity or work set forth in the plan. The annual
statement shall include a certification by the public housing agency
that the proposed activities and expenditures are consistent with the
approved comprehensive plan of the public housing agency. The annual
statement also shall include a certification that the public housing
agency has provided the tenants of the public housing affected by the
planned activities the opportunity to review the annual statement and
comment on it, and that such comments have been taken into account in
formulating the annual statement as submitted to the Secretary.
"(B) A public housing agency may propose an amendment to its
comprehensive plan under paragraph (1) in any annual statement. Any
such proposed amendment shall be reviewed in accordance with paragraph
(2), and shall include a certification that (i) the proposed amendment
has been made publicly available for comment prior to its submission;
(ii) affected tenants have been given sufficient time to review and
comment on it; and (iii) such comments have been taken into
consideration in the preparation and submission of the amendment. A
public housing agency shall have a right to amend its comprehensive plan
and related statements to extend the time for performance whenever the
Secretary has not provided the amount of assistance set forth in the
plan or has not provided the assistance in a timely manner.
"(C) The Secretary shall approve the annual statement and any
amendment to it or the comprehensive plan unless the Secretary
determines that the statement or amendment is plainly inconsistent with
the activities specified in the comprehensive plan. The statement or
amendment shall be considered to be approved, unless the Secretary
notifies the public housing agency in writing before the expiration of
the 75-day period following its submission that the Secretary has
disapproved it as submitted, indicating the reasons for disapproval and
the modifications required to make it approvable.
"(4)(A) Each public housing agency that owns or operates 500 or more
public housing dwelling units shall submit to the Secretary, on a date
determined by the Secretary, a performance and evaluation report
concerning the use of funds made available under this section. The
report of the public housing agency shall include an assessment by the
public housing agency of the relationship of such use of funds made
available under this section, as well as the use of other funds, to the
needs identified in the comprehensive plan of the public housing agency
and to the purposes of this section. The public housing agency shall
certify that the report has been made available for review and comment
by affected tenants prior to its submission to the Secretary.
"(B) The Secretary shall, at least on an annual basis, make such
reviews as may be necessary or appropriate to determine whether each
public housing agency receiving assistance under this section --
"(i) has carried out its activities under this section in a
timely manner and in accordance with its comprehensive plan;
"(ii) has a continuing capacity to carry out its comprehensive
plan in a timely manner;
"(iii) has satisfied, or has made reasonable progress towards
satisfying, such performance standards as shall be prescribed by
the Secretary, and has made reasonable progress in carrying out
modernization projects approved under this section.
"(C) Each public housing agency that owns or operates 500 or more
public housing dwelling units and receives assistance under this section
shall have an audit made in accordance with chapter 75 of title 31,
United States Code. The Secretary, the Inspector General of the
Department of Housing and Urban Development, and the Comptroller General
of the United States shall have access to all books, documents, papers,
or other records that are pertinent to the activities carried out under
this section in order to make audit examinations, excerpts, and
transcripts.
"(D) The comprehensive plan, any amendments to the comprehensive
plan, and the annual statement shall, once approved by the Secretary, be
binding upon the Secretary and the public housing agency. The Secretary
may order corrective action only if the public housing agency does not
comply with subparagraph (A) or (B) or if an audit under subparagraph
(C) reveals findings that the Secretary reasonably believes require such
corrective action. The Secretary may withhold funds under this section
only if the public housing agency fails to take such corrective action
after notice and a reasonable opportunity to do so. In administering
this section, the Secretary shall, to the greatest extent possible,
respect the professional judgment of the administrators of the public
housing agency.".
(e) ELIGIBLE COSTS. -- Section 14(f) of the United States Housing
Act "42 USC 1437l" of 1937 (as so redesignated by this section) is
amended --
(1) by inserting "(1)" after the subsection designation;
(2) in the matter preceding paragraph (1), by inserting after
"public housing agency" the following: "that owns or operates
less than 500 public housing dwelling units";
(3) by redesignating paragraphs (1) through (4) as
subparagraphs (A) through (D); and
(4) by adding at the end the following new paragraph:
"(2) A public housing agency that owns or operates 500 or more public
housing dwelling units may use financial assistance received under
subsection (b) only --
"(A) to undertake activities described in its approved
comprehensive plan under subsection (e)(1) or its annual statement
under subsection (e)(3);
"(B) to correct conditions that constitute an immediate threat
to the health or safety of tenants and to meet special purpose
needs described in section 14(i)(1)(D), whether or not the need
for such correction is indicated in its comprehensive plan or
annual statement; and
"(C) to prepare a comprehensive plan under subsection (e)(1),
including reasonable costs that may be necessary to assist tenants
in participating in the planning process in a meaningful way, an
annual statement under subsection (e)(3), an annual performance
and evaluation report under subsection (e)(4)(A), and an audit
under subsection (e)(4)(C).".
(f) ALLOCATION OF ASSISTANCE. -- Section 14 of the United States
Housing Act "42 USC 1437l" is amended by adding at the end the following
new subsection:
"(k)(1) Until the Congress establishes by law a revised method for
allocating assistance under this section, assistance shall be allocated
under this section in substantial accordance with the allocation method
in effect on the date of the enactment of the Housing and Community
Development Act of 1987.
"(2) Not later than 1 year after the date of the enactment of the
Housing and Community Development Act of 1987, the Secretary shall --
"(A) complete the study of the need for public housing
modernization initiated pursuant to the Department of Housing and
Urban Development-Independent Agencies Appropriation Act, 1984
(Public Law 98-45) and any other studies that are necessary to
evaluate the current condition and capital requirements of public
housing as well as the future need for rehabilitation and
replacement of public housing facilities;
"(B) submit to the Congress proposed methods for determining
the relative allocation of funds between activities to correct
existing deficiencies and the annual accrual of resources to meet
future needs;
"(C) submit to the Congress proposed alternatives for
allocating funds among public housing agencies to correct existing
deficiencies, including formulas for distributing funds to public
housing agencies to regional and field offices of the Department
of Housing and Urban Development, or to States, as well as such
other allocation methods as the Secretary may wish to recommend;
"(D) provide the Congress with --
"(i) an analysis of data and other information used to develop
recommendations for measuring existing deficiencies, future needs,
and anticipated emergencies;
"(ii) an analysis of the bases underlying each of the proposed
allocation methods; and
"(iii) a comparison of proposed allocations to previous
allocations under this section;
"(E) propose to the Congress criteria for distinguishing
capital replacement activities that are routine from those that
are not routine;
"(F) propose to the Congress alternative methods --
"(i) to allocate funds to public housing agencies to meet
predictable routine modernization and regular capital replacement
expenses; and
"(ii) provide for unpredictable, infrequent, or extraordinary
future capital replacement needs through a fund administered on a
national, regional, State, or local level or through such other
methods as the Secretary may recommend;
"(G) consult at least on a quarterly basis with organizations
and individuals representing public housing agencies, local
government, and tenants regarding progress on the studies referred
to in subparagraph (A) and the development of alternatives for
improving this section; and
"(H) estimate, for not less than the 200 largest public housing
agencies, the amount that will be received annually under each
such alternative allocation system and compare such amounts to
funds received in future years under this section.".
(g) ANNUAL REPORT. -- Section 14 of the United States Housing Act
(as amended by subsection (f) of this section) is further amended by
adding at the end the following new subsection:
"(l) The Secretary shall include in the annual report under section 8
of the Department of Housing and Urban Development Act --
"(1) a description of the allocation, distribution, and use of
assistance under this section on a regional basis and on the basis
of public housing agency size; and
"(2) a national compilation of the total funds requested in
comprehensive plans for all public housing agencies owning or
operating 500 or more public housing dwelling units.".
(h) REGULATIONS. -- Section 14 of the United States Housing Act (as
amended by subsection (g) of this section) is further amended by adding
at the end the following new subsection:
"(m) Subject to subsection (k)(1), the Secretary may issue any
regulations that are necessary to carry out this section.".
(i) CONFORMING AMENDMENTS. --
(1) Section 14(d) of the United States Housing Act of 1937 is
amended in the matter preceding paragraph (1) by striking
"subsection (e)(4)" and inserting "subsection (f)(4)".
(2) Section 14(i)(1) of the United States Housing Act of 1937
is amended in the matter preceding subparagraph (A) by inserting
"(f)," after "(e),".
(3) Section 14(f) of the United States Housing Act of 1937 (as
so redesignated by this section) is amended by striking "annual".
(4) Section 14(g) of the United States Housing Act of 1937 is
amended by inserting "or (e)" after "subsection (d)(4)".
(5) Section 14(h)(2) of the United States Housing Act of 1937
is amended by inserting "or (e)" after "subsection (d)(4)".
(6) Section 14(i) of the United States Housing Act "42 USC
1437l" of 1937 is amended by striking "subsections (c), (d), (e),
(g), and (h)" and inserting "subsections (c) through (h)".
SEC. 120. COMPREHENSIVE IMPROVEMENT ASSISTANCE SPECIAL PURPOSE
NEEDS.
Section 14(i)(1)(D) of the United States Housing Act of 1937 is
amended --
(1) by inserting "(i)" after "(D)";
(2) by redesignating clauses (i) and (ii) and clauses (I) and
(II), respectively;
(3) by striking the period at the end and inserting "; and";
and
(4) by adding at the end the following new clause:
"(ii) physical improvement needs eligible under this
subparagraph shall include replacing or repairing major equipment
systems or structural elements, upgrading security, increasing
accessibility for elderly families and handicapped families (as
such terms are defined in section 3(b)(3)), reducing the number of
vacant substandard units, and increasing the energy efficiency of
the units, except that the Secretary may make financial assistance
available under this clause only if the Secretary determines that
the physical improvements are necessary and sufficient to extend
substantially the useful life of the project.".
SEC. 121. PUBLIC HOUSING DEMOLITION AND DISPOSITION.
(a) DETERMINATION OF INFEASIBILITY OF MODIFICATIONS. -- Section
18(a)(1) of the United States Housing Act "42 USC 1437p" of 1937 is
amended by striking "or" after "purposes," and inserting "and".
(b) DEVELOPMENT AND APPROVAL OF REPLACEMENT HOUSING PLAN. -- Section
18(b) of the United States Housing Act of 1937 is amended --
(1) by striking "and" at the end of paragraph (1);
(2) by striking the period at the end of paragraph (2) and
inserting "; and"; and
(3) by adding at the end the following new paragraph:
"(3) the public housing agency has developed a plan for the
provision of an additional decent, safe, sanitary, and affordable
dwelling unit for each public housing dwelling unit to be
demolished or disposed under such application, which plan --
"(A) provides for the provision of such additional dwelling
units through --
"(i) the acquisition or development of additional public
housing dwelling units;
"(ii) the use of 15-year project-based assistance under section
8;
"(iii) the use of not less than 15-year project-based
assistance under other Federal programs;
"(iv) the acquisition or development of dwelling units assisted
under a State or local government program that provides for
project-based assistance comparable in terms of eligibility,
contribution to rent, and length of assistance contract (not less
than 15 years) to assistance under section 8(b)(1);
"(v) the use of 15-year tenant-based assistance under section 8
(excluding vouchers under section 8(o)); or
"(vi) any combination of such methods;
"(B) if it provides for the use of tenant-based assistance
under section 8, may be approved --
"(i) only after a finding by the Secretary that replacement
with project-based assistance is not feasible, and the supply of
private rental housing actually available to those who would
receive such assistance under the plan is sufficient for the total
number of certificates and vouchers available in the community
after implementation of the plan and that such supply is likely to
remain available for the full 15-year term of the assistance; and
"(ii) only if such finding is based on objective information,
which shall include rates of participation by landlords in the
section 8 program, size, conditions and rent levels of available
rental housing as compared to section 8 standards, the supply of
vacant existing housing meeting the section 8 quality standards
with rents at or below the fair market rent or the likelihood of
adjusting the fair market rent, the number of eligible families
waiting for public housing or housing assistance under section 8,
and the extent of discrimination against the types of individuals
or families to be served by the assistance;
"(C) is approved by the unit of general local government in
which the project is located;
"(D) includes a schedule for completing the plan within a
period inconsistent with the size of the proposed demolition or
disposition, except that the schedule shall in no event exceed 6
years;
"(E) includes a method of ensuring that the same number of
individuals and families will be provided housing;
"(F) provides for the payment of the relocation expenses of
each tenant to be displaced and ensures that the rent paid by the
tenant following relocation will not exceed the amount permitted
under this Act; and
"(G) prevents the taking of any action to demolish or dispose
of any unit until the tenant of the unit is relocated to decent,
safe, sanitary, and affordable housing that is, to the extent
practicable, of the tenant's choice.".
(c) FUNDING OF REPLACEMENT HOUSING PLAN. -- Section 18(c) of the
United States Housing Act "42 USC 1437p" of 1937 is amended --
(1) by inserting "(1)" after the subsection designation; and
(2) by adding at the end the following new paragraphs:
"(2) The Secretary shall, upon approving a plan under subsection
(b)(3), agree to commit (subject to the availability of future
appropriations) the funds necessary to carry out the plan over the
approved schedule of the plan.
"(3) The Secretary shall, in allocating assistance for the
acquisition or development of public housing or for moderate
rehabilitation under section 8(e)(2), give consideration to housing that
replaces demolished public housing units in accordance with a plan under
subsection (b)(3).".
(d) APPLICABILITY. -- Section 18 of the United States Housing Act of
1937 is amended by striking subsection (d) and inserting the following
new subsection:
"(d) A public housing agency shall not take any action to demolish or
dispose of a public housing project or a portion of a public housing
project without obtaining the approval of the Secretary and satisfying
the conditions specified in subsections (a) and (b).".
SEC. 122. PUBLIC HOUSING RESIDENT MANAGEMENT.
The United States Housing Act of 1937 is amended by adding at the end
the following new section:
"SEC. 20. "42 USC 1437r" (a) PURPOSE. -- The purpose of this
section is to encourage increased resident management of public housing
projects, as a means of improving existing living conditions in public
housing projects, by providing increased flexibility for public housing
projects that are managed by residents by --
"(1) permitting the retention, and use for certain purposes, of
any revenues exceeding operating and project costs; and
"(2) providing funding, from amounts otherwise available, for
technical assistance to promote formation and development of
resident management entities.
For purposes of this section, the term 'public housing' includes one
or more contiguous buildings or an area of contiguous row houses the
elected resident councils of which approve the establishment of a
resident management corporation and otherwise meet the requirements of
this section.
"(b) PROGRAM REQUIREMENTS. --
"(1) RESIDENT COUNCIL. -- As a condition of entering into a
resident management program, the elected resident council of a
public housing project shall approve the establishment of a
resident management corporation. When such approval is made by
the elected resident council of a building or row house area, the
resident management program shall not interfere with the rights of
other families residing in the project or harm the efficient
operation of the project. The resident management corporation and
the resident council may be the same organization, if the
organization complies with the requirements applicable to both the
corporation and council. The corporation shall be a nonprofit
corporation organized under the laws of the State in which the
project is located, and the tenants of the project shall be the
sole voting members of the corporation. If there is no elected
resident council, a majority of the households of the public
housing project shall approve the establishment of a resident
council to determine the feasibility of establishing a resident
management corporation to manage the project.
"(2) PUBLIC HOUSING MANAGEMENT SPECIALIST. -- The resident
council of a public housing project, in cooperation with the
public housing agency, shall select a qualified public housing
management specialist to assist in determining the feasibility of,
and to help establish, a resident management corporation and to
provide training and other duties agreed to in the daily
operations of the project.
"(3) BONDING AND INSURANCE. -- Before assuming any management
responsibility for a public housing project, the resident
management corporation shall provide fidelity bonding and
insurance, or equivalent protection, in accordance with
regulations and requirements of the Secretary and the public
housing agency. Such bonding and insurance, or its equivalent,
shall be adequate to protect the Secretary and the public housing
agency against loss, theft, embezzlement, or fraudulent acts on
the part of the resident management corporation or its employees.
"(4) MANAGEMENT RESPONSIBILITIES. -- A resident management
corporation that qualifies under this section, and that supplies
insurance and bonding or equivalent protection sufficient to the
Secretary and the public housing agency, shall enter into a
contract with the public housing agency establishing the
respective management rights and responsibilities of the
corporation and the public housing agency. Such contract shall be
consistent with the requirements of this Act applicable to public
housing projects and may include specific terms governing
management personnel and compensation, access to public housing
project records, submission of and adherence to budgets, rent
collection procedures, tenant income verification, tenant
eligibility determinations, tenant eviction, the acquisition of
supplies and materials, and such other matters as may be
appropriate. The contract shall be treated as a contracting out
of services and shall be subject to any provision of a collective
bargaining agreement regarding contracting out to which the public
housing agency is subject.
"(5) ANNUAL AUDIT. -- The books and records of a resident
management corporation operating a public housing project shall be
audited annually by a certified public accountant. A written
report of each audit shall be forwarded to the public housing
agency and the Secretary.
"(c) COMPREHENSIVE IMPROVEMENT ASSISTANCE. -- Public housing
projects managed by resident management corporations may be provided
with comprehensive improvement assistance under section 14 for purposes
of renovating such projects in accordance with such section. If such
renovation activities (including the planning and architectural design
of the rehabilitation) are administered by a resident management
corporation, the public housing agency involved may not retain, for any
administrative or other reason, any portion of the assistance provided
pursuant to this subsection unless otherwise provided by contract.
"(d) WAIVER OF FEDERAL REQUIREMENTS. --
"(1) WAIVER OF REGULATORY REQUIREMENTS. -- Upon the request of
any resident management corporation and public housing agency, and
after notice and an opportunity to comment is afforded to the
affected tenants, the Secretary may waive (for both the resident
management corporation and the public housing agency) any
requirement established by the Secretary (and not specified in any
statute) that the Secretary determines to unnecessarily increase
the costs or restrict the income of a public housing project.
"(2) WAIVER TO PERMIT EMPLOYMENT. -- Upon the request of any
resident management corporation, the Secretary may, subject to
applicable collective bargaining agreements, permit residents of
such project to volunteer a portion of their labor.
"(3) REPORT ON ADDITIONAL WAIVERS. -- Not later than 6 months
after the date of the enactment of the Housing and Community
Development Act of 1987, the Secretary shall submit to the
Congress a report setting forth any additional waivers of Federal
law that the Secretary determines are necessary or appropriate to
carry out the provisions of this section. In preparing the
report, the Secretary shall consult with resident management
corporations and public housing agencies.
"(4) EXCEPTIONS. -- The Secretary may not waive under this
subsection any requirement with respect to income eligibility for
purposes of section 16, rental payments under section 3(a), tenant
or applicant protections, employee organizing rights, or rights of
employees under collective bargaining agreements.
"(e) OPERATING SUBSIDY AND PROJECT INCOME. --
"(1) CALCULATION OF OPERATING SUBSIDY. -- Notwithstanding any
provision of section 9 or any regulation under such section, and
subject to the exception provided in paragraph (3), the portion of
the operating subsidy received by a public housing agency under
section 9 that is allocated to a public housing project managed by
a resident management corporation shall not be less than the
public housing agency per unit monthly amount provided in the
previous year as determined on an individual project basis.
"(2) CONTRACT REQUIREMENTS. -- Any contract for management of
a public housing project entered into by a public housing agency
and a resident management corporation shall specify the amount of
income expected to be derived from the project itself (from
sources such as rents and charges) and the amount of income funds
to be provided to the project from the other sources of income of
the public housing agency (such as operating subsidy under section
9, interest income, and administrative fees and rents).
"(3) CALCULATION OF TOTAL INCOME. --
"(A) Subject to subparagraph (B), the amount of funds provided
by a public housing agency to a public housing project managed by
a resident management corporation may not be reduced during the
3-year period beginning on the date of enactment of the Housing
and Community Development Act of 1987 or on any later date on
which a resident management corporation is first established for
the project.
"(B) If the total income of a public housing agency (including
the operating subsidy provided to the public housing agency under
section 9) is reduced or increased, the income provided by the
public housing agency to a public housing project managed by a
resident management corporation shall be reduced or increased in
proportion to the reduction or increase in the total income of the
public housing agency, except that any reduction in operating
subsidy that occurs as a result of fraud, waste, or mismanagement
by the public housing agency shall not affect the funds provided
to the resident management corporation.
"(4) RETENTION OF EXCESS REVENUES. --
"(A) Any income generated by a resident management corporation
of a public housing project that exceeds the income estimated for
purposes of this subsection shall be excluded in subsequent years
in calculating (i) the operating subsidies provided to the public
housing agency under section 9; and (ii) the funds provided by
the public housing agency to the resident management corporation.
"(B) Any revenues retained by a resident management corporation
under subparagraph (A) shall be used for purposes of improving the
maintenance and operation of the public housing project, for
establishing business enterprises that employ residents of public
housing, or for acquiring additional dwelling units for lower
income families.
"(f) RESIDENT MANAGEMENT TECHNICAL ASSISTANCE AND TRAINING. --
"(1) FINANCIAL ASSISTANCE. -- To the extent budget authority
is available for section 14, the Secretary shall provide financial
assistance to resident management corporations or resident
councils that obtain, by contract or otherwise, technical
assistance for the development of resident management entities,
including the formation of such entities, the development of the
management capability of newly formed or existing entities, the
identification of the social support needs of residents of public
housing projects, and the securing of such support.
"(2) LIMITATION ON ASSISTANCE. -- The financial assistance
provided under this subsection with respect to any public housing
project may not exceed $100,000.
"(3) FUNDING. -- Of the amounts available for financial
assistance under section 14, the Secretary may use to carry out
this subsection not more than $2,500,000 for fiscal year 1988 and
not more than $2,500,000 for fiscal year 1989.
"(g) ASSESSMENT AND REPORT BY THE SECRETARY. -- Not later than 3
years after the date of the enactment of the Housing and Community
Development Act of 1987, the Secretary shall --
"(1) conduct an evaluation and assessment of resident
management, and particularly of the effect of resident management
on living conditions in public housing; and
"(2) submit to the Congress a report setting forth the findings
of the Secretary as a result of the evaluation and assessment and
including any recommendations the Secretary determines to be
appropriate.".
SEC. 123. PUBLIC HOUSING HOMEOWNERSHIP AND MANAGEMENT OPPORTUNITIES.
The United States Housing Act of 1937 (as amended by section 122 of
this Act) is further amended by adding at the end the following new
section:
"SEC. 21. "42 USC 1437s" (a) HOMEOWNERSHIP OPPORTUNITIES IN GENERAL.
-- Lower income families residing in a public housing project shall be
provided with the opportunity to repurchase the dwelling units in the
project through a qualifying resident management corporation as follows:
"(1) FORMATION OF RESIDENT MANAGEMENT CORPORATION. -- As a
condition for public housing homeownership --
"(A) the adult residents of a public housing project shall have
formed a resident management corporation in accordance with
regulations and requirements of the Secretary prescribed under
this section and section 20;
"(B) the resident management corporation shall have entered
into a contract with the public housing agency establishing the
respective management rights and responsibilities of the resident
management corporation and the public housing agency; and
"(C) the resident management corporation shall have
demonstrated its ability to manage public housing effectively and
efficiently for a period of not less than 3 years.
"(2) HOMEOWNERSHIP ASSISTANCE. --
"(A) The Secretary may provide comprehensive improvement
assistance under section 14 to a public housing project in which
homeownership activities under this section are conducted.
"(B) The Secretary, and the public housing agency owning and
operating a public housing project, shall provide such training,
technical assistance, and educational assistance as the Secretary
determines to be necessary to prepare the families residing in the
project, and any resident management corporation established under
paragraph (1), for homeownership.
"(C) This paragraph shall not have effect after September 30,
1990.
"(3) CONDITIONS OF PURCHASE BY A RESIDENT MANAGEMENT
CORPORATION. --
"(A) A resident management corporation may purchase from a
public housing agency one or more multifamily buildings in a
public housing project following a determination by the Secretary
that --
"(i) the resident management corporation has met the conditions
of paragraph (1);
"(ii) the resident management corporation has applied for and
is prepared to undertake the ownership, management, and
maintenance of the building or buildings with continued assistance
from the Secretary;
"(iii) the public housing agency has held one or more public
hearings to obtain the views of citizens regarding the proposed
purchase and, in consultation with the Secretary, has certified
that the purchase will not interfere with the rights of other
families residing in public housing, will not harm the efficient
operation of other public housing, and is in the interest of the
community;
"(iv) the public housing agency has certified that it has and
will implement a plan to replace public housing units sold under
this plan within 30 months of the sale, which plan shall provide
for replacement of 100 percent of the units sold under this
section by --
"(I) production, acquisition, or rehabilitation of vacant
public housing units by the public housing agency; and
"(II) acquisition by the resident management corporation of
nonpublicly owned, decent, and affordable housing units, which the
resident management corporation shall operate as rental housing
subject to tenant income and rent limitations comparable to the
limitations applicable to public housing; and
"(v) the building or buildings meet the minimum safety and
livability standards applicable under section 14, and the physical
condition, management, and operation of the building or buildings
are sufficient to permit affordable homeownership by the families
residing in the project.
"(B) The price of a building purchased under the preceding
sentence shall be approved by the Secretary, in consultation with
the public housing agency and resident management corporation,
taking into account the fair market value of the property, the
ability of resident families to afford and maintain the property,
and such other factors as the Secretary determines to be
consistent with increasing the supply of dwelling units affordable
to very low income families.
"(C) This paragraph shall not have effect after September 30,
1990.
"(4) CONDITIONS OF RESALE. --
"(A)(i) A resident management corporation may sell a dwelling
unit or ownership rights in a dwelling unit only to a lower income
family residing in, or eligible to reside in, public housing and
only if the Secretary determines that the purchase will not
interfere with the rights of other families residing in the
housing project or harm the efficient operation of the project,
and the family will be able to purchase and maintain the property.
"(ii) The sale of dwelling units or ownership rights in
dwelling units under clause (i) shall be made to families in the
following order of priority:
"(I) a lower income family residing in the public housing
project in which the dwelling unit is located;
"(II) a lower income family residing in any public housing
project within the jurisdiction of the public housing agency
having jurisdiction with respect to the project in which the
dwelling unit is located;
"(III) a lower income family receiving Federal housing
assistance and residing in the jurisdiction of such public housing
agency; and
"(IV) a lower income family on the waiting list of such public
housing agency for public housing or assistance under section 8,
with priority given in the order in which the family appears on
the waiting list.
"(iii) Each resident management corporation shall provide each
family described in clause (ii) with a notice of the eligibility
of the family to purchase a dwelling unit under this paragraph.
"(B) A purchase under subparagraph (A) may be made under any of
the following arrangements:
"(i) Limited dividend cooperative ownership.
"(ii) Condominium ownership.
"(iii) Fee simple ownership.
"(iv) Shared appreciation with a public housing agency
providing financing under paragraph (6).
"(v) Any other arrangement determined by the Secretary to be
appropriate.
"(C) Property purchased under this section shall be resold only
to the resident management corporation, a lower income family
residing in or eligible to reside in public housing or housing
assisted under section 8, or to the public housing agency.
"(D) In no case may the owner receive consideration for his or
her interest in the property that exceeds the total of --
"(i) the contribution to equity paid by the owner;
"(ii) the value, as determined by such means as the Secretary
shall determine through regulation, of any improvements installed
at the expense of the owner during the owner's tenure as owner;
and
"(iii) the appreciated value determined by an inflation
allowance at a rate which may be based on a cost of living index,
an income index, or market index as determined by the Secretary
through regulation and agreed to by the purchaser and the resident
management corporation or the public housing agency, whichever is
appropriate, at the time of initial sale, and applied against the
contribution to equity; the resident management corporation or
the public housing agency may, at the time of initial sale, enter
into an agreement with the owner to set a maximum amount which
this appreciation may not exceed.
"(E) Upon sale, the resident management corporation or the
public housing agency, whichever is appropriate, shall ensure that
subsequent owners are bound by the same limitations on resale and
further restrictions on equity appreciation.
"(5) USE OF PROCEEDS. -- Notwithstanding any other provision
of this Act or other law to the contrary, proceeds from the sale
of a building or buildings under paragraph (3) and amounts
recaptured under paragraph (4) shall be paid to the public housing
agency and shall be retained and used by the public housing agency
only to increase the number of public housing units available for
occupancy. The resident management corporation shall keep and
make available to the public housing agency and the Secretary all
records necessary to calculate accurately payments due the local
housing agency under this section. The Secretary shall not reduce
or delay payments under other provisions of law as a result of
amounts made available to the local housing agency under this
section.
"(6) FINANCING. -- When financing for the purchase of the
property is not otherwise available for purposes of assisting any
purchase by a family or resident management corporation under this
section, the public housing agency involved may make a loan on the
security of the property involved to the family or resident
management corporation at a rate of interest that shall not be
lower than 70 percent of the market interest rate for conventional
mortgages on the date on which the loan is made.
"(7) ANNUAL CONTRIBUTIONS. -- Notwithstanding the purchase of
a building in a public housing project under this section, the
Secretary shall continue to pay annual contributions with respect
to the project. Such contributions may not exceed the maximum
contributions authorized in section 5(a).
"(8) OPERATING SUBSIDIES. -- Operating subsidies shall not be
available with respect to a building after the date of its sale by
the public housing agency.
"(b) PROTECTION OF NONPURCHASING FAMILIES. --
"(1) EVICTION PROHIBITION. -- No family residing in a dwelling
unit in a public housing project may be evicted by reason of the
sale of the project to a resident management corporation under
this section.
"(2) TENANTS RIGHTS. -- Families renting a dwelling unit
purchased by a resident management corporation shall have all
rights provided to tenants of public housing under this Act.
"(3) RENTAL ASSISTANCE. -- If any family resides in a dwelling
unit in a building purchased by a resident management corporation,
and the family decides not to purchase the dwelling unit, the
Secretary shall offer to provide to the family (at the option of
the family) a certificate under section 8(b)(1) or a housing
voucher under section 8(o) for as long as the family continues to
reside in the building. The Secretary may adjust the fair market
rent for such certificate to take into account conditions under
which the building was purchased.
"(4) RENTAL AND RELOCATION ASSISTANCE. -- If any family
resides in a dwelling unit in a public housing project in which
other dwelling units are purchased under this section, and the
family decides not to purchase the dwelling unit, the Secretary
shall offer (to be selected by the family, at its option) --
"(A) to assist the family in relocating to a comparable
appropriate sized dwelling unit in another public housing project,
and to reimburse the family for their cost of relocation; and
"(B) to provide to the family the financial assistance
necessary to permit the family to stay in the dwelling unit or to
move to another comparable dwelling unit and to pay no more for
rent than required under subparagraph (A), (B), or (C) of section
3(a)(1).
"(c) FINANCIAL ASSISTANCE FOR PUBLIC HOUSING AGENCIES. -- The
Secretary shall provide to public housing agencies such financial
assistance as is necessary to permit such agencies to carry out the
provisions of this section.
"(d) ADDITIONAL HOMEOWNERSHIP AND MANAGEMENT OPPORTUNITIES. -- This
section shall not apply to the turnkey III, the mutual help, or any
other homeownership program established under section 5(h) or section
6(c)(4)(D) and in existence before the date of the enactment of the
Housing and Community Development Act of 1987.
"(e) REGULATIONS. -- The Secretary shall issue such regulations as
may be necessary to carry out the provisions of this section. Such
regulations may establish any additional terms and conditions for
homeownership or resident management under this section that are
determined by the Secretary to be appropriate.
"(f) ANNUAL REPORT. -- The Secretary shall annually submit to the
Congress a report setting forth --
"(1) the number, type, and cost of units sold;
"(2) the income, race, gender, children, and other
characteristics of families purchasing or moving and not
purchasing;
"(3) the amount and type of financial assistance provided;
"(4) the need for subsidy to ensure continued affordability and
meet future maintenance and repair costs;
"(5) any need for the development of additional public housing
dwelling units as a result of the sale of public housing dwelling
units under this section;
"(6) recommendations of the Secretary for additional budget
authority to carry out such development;
"(7) recommendations of the Secretary to ensure decent homes
and decent neighborhoods for lower income families; and
"(8) the recommendations of the Secretary for statutory and
regulatory improvements to the program.
"(g) LIMITATION. -- Any authority of the Secretary under this
section to provide financial assistance, or to enter into contracts to
provide financial assistance, shall be effective only to such extent or
in such amounts as are or have been provided in advance in an
appropriation Act.".
SEC. 124. TREATMENT OF CERTAIN PUBLIC HOUSING DEVELOPMENT FUNDS.
(a) FORGIVENESS OF CERTAIN INTEREST. -- Notwithstanding any other
provision of law or other requirement, any interest accruing on any
excess funds advanced to the Housing Authority of the City of
Pittsburgh, in the State of Pennsylvania, for development of the public
housing project numbered PA-1-22 shall be forgiven, and any such
interest paid to the Secretary of Housing and Urban Development before
the date of the enactment of this Act shall be returned to such City.
(b) FORGIVENESS OF CERTAIN PAYMENTS. -- Notwithstanding any other
provision of law or other requirement, the Secretary of Housing and
Urban Development may not require the Bay City Housing Commission in the
State of Michigan to pay any amount relating to ineligible costs
incurred with respect to the public housing development grant numbered
Michigan 24-7, awarded in 1974, under the United States Housing Act of
1937.
(c) SUBJECT TO APPROPRIATIONS. -- This section shall be effective
only to the extent approved in appropriation Acts.
SEC. 125. "42 USC 1437k note" ENERGY EFFICIENT PUBLIC HOUSING
DEMONSTRATION.
(a) ESTABLISHMENT. -- The Secretary of Housing and Urban Development
shall establish a demonstration program through the assistance of an
appropriate technology transfer organization that specializes in
producing detailed energy-efficient designs and in conducting local and
statewide, public participation tests for energy efficient,
needs-oriented housing. The appropriate technology organization shall
carry out the demonstration working through and with public housing
agencies to build and test a variety of energy-efficient housing designs
in 100 separate housing units in 4 different States that meet local
lower income housing needs (including single parent, disabled, and
elderly concerns) through a composite ranging from single to 12-plex
units in the cluster approach on vacant lots and open areas.
(b) REPORT. -- As soon as practicable following September 30, 1988,
the Secretary of Housing and Urban Development shall submit to the
Congress a report setting forth the findings and recommendations of the
Secretary as a result of the demonstration under this section.
(c) FUNDING. -- Of the budget authority authorized to be provided
for the development of public housing, there is authorized to be
appropriated to carry out this section $4,700,000 for fiscal year 1988.
SEC. 126. "42 USC 1437f note" PUBLIC HOUSING COMPREHENSIVE
TRANSITION DEMONSTRATION.
(a) ESTABLISHMENT OF DEMONSTRATION PROGRAM. -- The Secretary of
Housing and Urban Development (in this section referred to as the
"Secretary") shall carry out a program to demonstrate the effectiveness
of providing a comprehensive program of services to participating public
housing residents in order to ensure the successful transition of such
residents to private housing. In carrying out the demonstration
program, the Secretary shall consult with the heads of other appropriate
Federal agencies to design and implement procedures to carry out the
transition from public housing.
(b) SCOPE OF DEMONSTRATION PROGRAM. -- The Secretary shall carry out
the demonstration program with respect to public housing administered by
the Housing Authority of the City of Charlotte, in the State of North
Carolina. The Secretary may also carry out the demonstration program
with respect to public housing administered by not more than 10
additional public housing agencies.
(c) REQUIREMENTS OF DEMONSTRATION PROGRAM. -- The demonstration
program shall consist of the following requirements:
(1) CONTRACT OF PARTICIPATION. -- Each participating public
housing agency may enter into a voluntary contract with any family
that is to commence residence in a public housing project
administered by the public housing agency. The contract shall be
made part of the lease, shall set forth the provisions of the
demonstration program, and shall specify the resources to be made
available to the participating family and the responsibilities of
the participating family.
(2) REMEDIATION PHASE. --
(A) During not to exceed the first 2 years of residence of a
participating family in public housing, the public housing agency
shall ensure the provision of remediation services to the family
in accordance with the terms and conditions of the contract of
participation, which may include --
(i) remedial education;
(ii) completion of high school;
(iii) job training and preparation;
(iv) substance abuse treatment and counseling;
(v) training in homemaking skills and parenting; and
(vi) training in money management.
(B) During the remediation phase, the amount of rent charged
the family may not be increased on the basis of any increase in
earned income of the family.
(3) TRANSITION PHASE. --
(A) During not to exceed a 5-year period following completion
of the remediation stage --
(i) the head of the family shall be required to have full-time
employment; and
(ii) the public housing agency shall ensure the provision of
counseling for the family with respect to homeownership, money
management, and problem solving.
(B) During the transition phase, the amount of rent charged the
family --
(i) may be increased on the basis of any increase in family
income; and
(ii) may not be decreased on the basis of any decrease in
earned income due to voluntary termination of employment.
(4) ENCOURAGEMENT OF SAVINGS. -- The public housing agency
shall take appropriate actions (including the establishment of an
escrow savings account) to encourage each participating family to
save funds during the remediation and transition phases.
(5) EFFECT OF INCREASES IN FAMILY INCOME. --
(A) Any increase in the earned income of a family during
participation in the demonstration program under this section may
not be considered as income of a resource for the purpose of
denying the eligibility of, or reducing the amount of benefits
payable to, the family under any other Federal law, unless the
income of the family increases at any time to not less than 50
percent of the median income of the area (as determined by the
Secretary with adjustments for smaller and larger families).
(B) If at any time during the participation of a family in the
demonstration program the income of the family increases to not
less than 80 percent of the median income of the area (as
determined by the Secretary with adjustments for smaller and
larger families), the participation of the family in the
demonstration program shall terminate.
(6) COMPLETION OF TRANSITION. -- Each family participating in
the demonstration program shall be required to complete the
transition out of public housing during a period of not more than
7 years. The public housing agency shall extend the period for
any family that requests an extension for good cause.
(d) REPORTS TO CONGRESS. --
(1) INTERIM REPORT. -- Not later than 2 years after the date
of the enactment of this Act, the Secretary shall submit to the
Congress an interim report evaluating the effectiveness of the
demonstration program under this section.
(2) FINAL REPORT. -- Not later than 60 days after the
termination of the demonstration program under subsection (f), the
Secretary shall submit to the Congress a final report evaluating
the effectiveness of the demonstration program under this section.
(e) REGULATIONS. -- The Secretary shall issue such regulations as
may be necessary to carry out this section.
(f) TERMINATION OF DEMONSTRATION PROGRAM. -- The demonstration
program under this section shall terminate upon the expiration of the
7-year period beginning on the date of the enactment of this Act.
SEC. 141. SECTION 8 CONTRACTS FOR EXISTING DWELLING UNITS.
Section 8(b)(1) "42 USC 1437f" of the United States Housing Act of
1937 is amended by inserting after the first sentence the following new
sentence: "The Secretary shall enter into a separate annual
contributions contract with each public housing agency to obligate the
authority approved each year, beginning with the authority approved in
appropriations Acts for fiscal year 1988 (other than amendment authority
to increase assistance payments being made using authority approved
prior to the appropriations Acts for fiscal year 1988), and such annual
contributions contract (other than for annual contributions under
subsection (o)) shall bind the Secretary to make such authority, and any
amendments increasing such authority, available to the public housing
agency for a specified period.".
SEC. 142. SECTION 8 FAIR MARKET RENTALS AND CONTRACT RENTS.
(a) ANNUAL ADJUSTMENT. -- Section 8(c)(1) of the United States
Housing Act of 1937 "42 USC 1437f" is amended by inserting before the
last sentence the following new sentence: "Each fair market rental in
effect under this subsection shall be adjusted to be effective on
October 1 of each year to reflect changes, based on the most recent
available data trended so the rentals will be current for the year to
which they apply, of rents for existing or newly constructed rental
dwelling units, as the case may be, of various sizes and types in the
market area suitable for occupancy by persons assisted under this
section.".
(b) CALCULATION FOR CERTAIN COUNTY. -- Section 8(c)(1) of the United
States Housing Act of 1937 is amended by adding at the end the following
new sentence: "The Secretary shall establish separate fair market
rentals under this paragraph for Westchester County in the State of New
York.".
(c) COMPARABILITY. --
(1) Section 8(c)(1) of the United States Housing Act of 1937
(as amended by subsection (b) of this section) is further amended
by adding at the end the following new sentence: "If units
assisted under this section are exempt from local rent control
while they are so assisted or otherwise, the maximum monthly rent
for such units shall be reasonable in comparison with other units
in the market area that are exempt from local rent control.".
(2) Section 8(c)(2)(C) of the United States Housing Act of 1937
is amended --
(A) by striking "assisted and comparable unassisted units" and
inserting the following: "assisted units and unassisted units of
similar quality and age in the same market area"; and
(B) by adding at the end the following new sentence: "If the
Secretary or appropriate State agency does not complete and submit
to the project owner a comparability study not later than 60 days
before the anniversary date of the assistance contract under this
section, the automatic annual adjustment factor shall be
applied.".
(d) PROHIBITION ON REDUCTION OF CERTAIN CONTRACT RENTS. -- Section
8(c)(2)(C) of the United States Housing Act of 1937 (as amended by
subsection (c) of this section) is further amended by adding at the end
the following new sentence: "The Secretary may not reduce the contract
rents in effect on or after April 15, 1987, for newly constructed,
substantially rehabilitated, or moderately rehabilitated projects
assisted under this section (including projects assisted under this
section as in effect prior to November 30, 1983), unless the project has
been refinanced in a manner that reduces the periodic payments of the
owner.".
(e) REPEAL OF LIMIT ON CONTRACT RENT INCREASES. -- Section 8(c)(2)
of the United States Housing Act of 1937 is amended by striking
subparagraph (D).
SEC. 143. HOUSING VOUCHER PROGRAM.
(a) OPERATION. -- Section 8(o) of the United States Housing Act of
1937 is amended --
(1) in the first sentence of paragraph (1), by striking "In"
and all that follows through "demonstration program" and inserting
"The Secretary may provide assistance";
(2) by striking paragraph (4); and
(3) by redesignating paragraphs (5) through (8) as paragraphs
(4) through (7), respectively.
(b) FLEXIBILITY TO ADJUST ASSISTANCE PAYMENTS. -- Section 8(o)(6) of
the United States Housing Act of 1937 "42 USC 1437f" (as so redesignated
by subsection (a) of this section) is amended --
(1) in subparagraph (A), by striking "as frequently as twice
during any five-year period" and inserting "annually"; and
(2) by striking subparagraph (D).
(c) USE OF VOUCHERS IN CONNECTION WITH COOPERATIVE AND MUTUAL
HOUSING. -- Section 8(o)(7) of the United States Housing Act of 1937
(as so redesignated by subsection (a) of this section) is amended by
striking "not to exceed 5 per centum of the amount of".
(d) ADJUSTMENT POOLS. -- Section 8(o) of the United States Housing
Act of 1937 (as amended by subsection (a) of this section) is further
amended by adding at the end the following new paragraph:
"(8) The Secretary may set aside up to 5 percent of the budget
authority available under this subsection as an adjustment pool. The
Secretary shall use amounts in the adjustment pool for adjustments
pursuant to paragraph (6)(A) to ensure continued affordability where the
Secretary determines additional assistance for this purpose is
necessary, based on documentation submitted by a public housing
agency.".
SEC. 144. ADMINISTRATIVE FEES FOR SECTION 8 CERTIFICATE AND HOUSING
VOUCHER PROGRAMS.
Section 8 of the United States Housing Act of 1937 is amended by
adding at the end the following new subsection:
"(q)(1) The Secretary shall establish a fee for the costs incurred in
administering the certificate and housing voucher programs under
subsections (b) and (o). The amount of the fee for each month for which
a dwelling unit is covered by an assistance contract shall be 8.2
percent of the fair market rental established under subsection (c)(1)
for a 2-bedroom existing rental dwelling unit in the market area of the
public housing agency. The Secretary may increase the fee if necessary
to reflect the higher costs of administering small programs and programs
operating over large geographic areas.
"(2)(A) The Secretary shall also establish reasonable fees (as
determined by the Secretary) for --
"(i) the costs of preliminary expenses (not to exceed $275)
that the public housing agency documents it has incurred in
connection with new allocations of assistance under the
certificate and housing voucher programs under subsections (b) and
(o);
"(ii) the costs incurred in assisting families who experience
difficulty (as determined by the Secretary) in obtaining
appropriate housing under the programs; and
"(iii) extraordinary costs approved by the Secretary.
"(B) The method used to calculate fees under subparagraph (A) shall
be the same for the certificate and housing voucher programs under
subsections (b) and (o) and shall take into account local cost
differences.
"(3) The Secretary may establish or increase a fee in accordance with
this subsection only to such extent or in such amounts as are provided
in appropriation Acts.".
SEC. 145. PORTABILITY OF SECTION 8 CERTIFICATES AND VOUCHERS.
Section 8 of the United States Housing Act of 1937 (as amended by
section 144 of this Act) is further amended by adding at the end the
following new subsection:
"(r)(1) Any family assisted under subsection (b) or (o) may receive
such assistance to rent an eligible dwelling unit if the dwelling unit
to which the family moves is within the same, or a contiguous,
metropolitan statistical area as the metropolitan statistical area
within which is located the area of jurisdiction of the public housing
agency approving such assistance.
"(2) The public housing agency having authority with respect to the
dwelling unit to which a family moves under this subsection shall have
the responsibility of carrying out the provisions of this subsection
with respect to the family. If no public housing agency has authority
with respect to the dwelling unit to which a family moves under this
subsection, the public housing agency approving the assistance shall
have such responsibility.
"(3) In providing assistance under subsection (b) or (o) for any
fiscal year, the Secretary shall give consideration to any reduction in
the number of resident families incurred by a public housing agency in
the preceding fiscal year as a result of the provisions of this
subsection.
"(4) The provisions of this subsection may not be construed to
restrict any authority of the Secretary under any other provision of law
to provide for the portability of assistance under this section.".
SEC. 146. PROHIBITION OF DENIAL OF SECTION 8 CERTIFICATES AND
VOUCHERS TO RESIDENTS OF PUBLIC HOUSING.
Section 8 of the United States Housing Act of 1937 (as amended by
section 145 of this Act) is further amended by adding at the end the
following new subsection:
"(s) In selecting families for the provision of assistance under this
section (including subsection (o)), a public housing agency may not
exclude or penalize a family solely because the family resides in a
public housing project.".
SEC. 147. NONDISCRIMINATION AGAINST SECTION 8 CERTIFICATE HOLDERS
AND VOUCHER HOLDERS.
Section 8 of the United States Housing Act of 1937 (as amended by
section 146 of this Act) is further amended by adding at the end the
following new subsection:
"(t)(1) No owner who has entered into a contract for housing
assistance payments under this section on behalf of any tenant in a
multifamily housing project shall refuse --
"(A) to lease any available dwelling unit in any multifamily
housing project of such owner that rents for an amount not greater
than the fair market rent for a comparable unit, as determined by
the Secretary under this section to a holder of a certificate of
eligibility under this section a proximate cause of which is the
status of such prospective tenant as a holder of such certificate,
and to enter into a housing assistance payments contract
respecting such unit; or
"(B) to lease any available dwelling unit in any multifamily
housing project of such owner to a holder of a voucher under
subsection (o), and to enter into a voucher contract respecting
such unit, a proximate cause of which is the status of such
prospective tenant as holder of such voucher.
"(2) For purposes of this subsection, the term 'multifamily housing
project' means a residential building containing more than 4 dwelling
units.".
SEC. 148. PROJECT-BASED SECTION 8 ASSISTANCE.
Section 8(d)(2) of the United States Housing Act "42 USC 1437f" of
1937 is amended by inserting before the period at the end of the last
sentence the following: ", except that the Secretary shall permit the
public housing agency to approve such attachment with respect to not
more than 15 percent of the assistance provided by the public housing
agency if the requirements of clause (B) are met".
SEC. 149. SECTION 8 ASSISTANCE FOR RESIDENTS OF RENTAL
REHABILITATION PROJECTS.
Section 8 of the United States Housing Act of 1937 (as amended by
section 147 of this Act) is further amended by adding at the end the
following new subsection:
"(u) In the case of lower income families living in rental projects
rehabilitated under section 17 of this Act or section 533 of the Housing
Act of 1949 before rehabilitation --
"(1) certificates or vouchers under this section shall be made
for families who are required to move out of their units because
of the physical rehabilitation activities or because of
overcrowding; and
"(2) at the discretion of each public housing agency or other
agency administering the allocation of assistance, certificates or
vouchers under this section may be made for families who would
have to pay more than 30 percent of their adjusted income for rent
after rehabilitation whether they choose to remain in, or to move
from, the project.".
SEC. 150. RENTAL REHABILITATION GRANTS.
(a) AUTHORIZATION OF APPROPRIATIONS. -- Section 17(a)(3) of the
United States Housing Act of 1937 "42 USC 1437o" is amended to read as
follows:
"(3) AUTHORIZATION. -- There are authorized to be appropriated for
rental rehabilitation under this section $125,000,000 for each of the
fiscal years 1988 and 1989, of which $1,500,000 shall be available each
fiscal year for technical assistance, including the collection,
processing, and dissemination of program information useful for local
and national program management.".
(b) ELIGIBLE PROPERTY. -- Section 17(a)(1)(A) of the United States
Housing Act of 1937 is amended by inserting after "property" the
following: ", or of real property that will be privately owned upon the
completion of rehabilitation,".
(c) MAXIMUM GRANT AMOUNT. -- Section 17(c)(2)(E) of the United
States Housing Act of 1937 is amended by striking "$5,000 per unit" and
inserting the following: "$5,000 per unit for a unit with no bedrooms,
$6,500 per unit for a unit with 1 bedroom, $7,500 per unit for a unit
with 2 bedrooms, and $8,500 per unit for a unit with 3 or more
bedrooms,".
(d) USE OF FUNDS. -- Section 17(c) of the United States Housing Act
of 1937 is amended by adding at the end the following new paragraph:
"(4) USE OF FUNDS TO COMPLY WITH SEISMIC STANDARDS. -- If a unit of
general local government has a local ordinance that requires
rehabilitation to meet seismic standards, the unit of local government
may use all rehabilitation assistance received under this section to
rehabilitate units with no bedroom or 1 bedroom, if the occupants of the
units will have incomes that do not exceed 50 percent of the median
income of the area.".
(e) ADMINISTRATIVE EXPENSES. -- Section 17(h) of the United States
Housing Act of 1937 "42 USC 1437o" is amended by inserting before the
period at the end the following: ", except that not more than 10
percent of any rehabilitation grant received under subsection (c) may be
retained to cover administrative expenses incurred by any State
administering resources made available under subsection (b) (which State
shall share such amount with units of general local government
administering the program with the State) and by any city or urban
county receiving resources under subsection (b)".
(f) ELIGIBILITY. -- Section 17(k)(4) of the United States Housing
Act of 1937 is amended --
(1) by inserting "privately owned" before "real property";
(2) by inserting "(A)" after "includes"; and
(3) by inserting before the semicolon at the end the following:
", and (B) housing that is owned by a State or locally chartered,
neighborhood based, nonprofit organization the primary purpose of
which is the provision and improvement of housing".
SEC. 151. RENTAL DEVELOPMENT GRANTS.
(a) AUTHORIZATION OF APPROPRIATIONS. -- Section 17(a)(3) of the
United States Housing Act of 1937 (as amended by section 150 of this
Act) is further amended by adding at the end the following new sentence:
"There are authorized to be appropriated for development grants under
this section $75,000,000 for fiscal year 1988 and $75,000,000 for fiscal
year 1989.".
(b) AREA ELIGIBILITY. -- Section 17(d)(2) of the United States
Housing Act of 1937 is amended by adding at the end the following new
sentence: "Notwithstanding any other provision of law, the eligibility
requirements for development grants under this section shall be the
requirements in effect under this subsection on October 17, 1986.".
(c) GRANT AMOUNT. -- Section 17(d)(4)(B) of the United States
Housing Act of 1937 is amended by striking "refinancing costs and".
(d) PROGRAM REQUIREMENTS. -- Section 17(d)(4) of the United States
Housing Act of 1937 is amended --
(1) by inserting before the semicolon at the end of
subparagraph (G) the following: ", except that the Secretary may
extend such period by not more than 6 months if the commencement
of such activities is delayed due to judicial or administrative
proceedings";
(2) by striking "and" at the end of subparagraph (G);
(3) by striking the period at the end of paragraph (H) and
inserting "; and"; and
(4) by adding at the end the following new subparagraph:
"(I) the owner of each assisted structure agrees to comply with
the provisions of paragraph (8) until the 20-year period specified
in paragraph (7) has ended.".
(e) DEVELOPMENT COST. -- Section 17(d) of the United States Housing
Act of 1937 is amended by adding at the end the following new paragraph:
"(10) DEVELOPMENT COST. --
"(A) The Secretary shall include in the development cost of a
project assisted under this subsection any developer's fee if such
fee --
"(i) is included in a mortgage secured by the project; and
"(ii) the lender is a State housing finance agency or the
project is financed by bonds issued by a State housing finance
agency or similar local entity.
"(B) The amount of any developer's fee shall not be counted in
calculating the maximum grant amount pursuant to paragraph (4)(B).
"(C) This paragraph shall only be applicable to projects with
respect to which a notice of project selection is received before
the date of the enactment of the Housing and Community Development
Act of 1987.".
SEC. 152. "42 USC 1437o" TERMINATION OF RENTAL DEVELOPMENT GRANT
PROGRAM.
(a) IN GENERAL. -- Effective on October 1, 1989, the rental
development grant program under section 17(d) of the United States
Housing Act of 1937 shall terminate.
(b) SAVINGS PROVISION. -- The provisions of subsection (a) shall not
apply with respect to any housing development grant under section 17(d)
of the United States Housing Act of 1937 made pursuant to a reservation
of funds made by the Secretary of Housing and Urban Development before
October 1, 1989.
SEC. 161. HOUSING FOR THE ELDERLY AND HANDICAPPED.
(a) BORROWING AUTHORITY. -- The first sentence of section
202(a)(4)(B)(i) of the Housing Act of 1959 "12 USC 1701q" is amended --
(1) by striking "and" the first place it appears; and
(2) by inserting after "1984," the following: "and to such
sums as may approved in appropriation Acts for fiscal years 1988
and 1989,".
(b) LOAN AUTHORITY. -- Section 202(a)(4)(C) of the Housing Act of
1959 is amended by adding at the end the following new sentence: "For
fiscal years 1988 and 1989, not more than $621,701,000 and $630,000,000,
respectively, may be approved in appropriation Acts for such loans.".
(c) INTEREST RATE ON LOANS. --
(1) CALCULATION OF RATE. -- Section 202(a)(3) of the Housing
Act of 1959 is amended --
(A) by inserting "(A)" after the paragraph designation;
(B) by striking all that follows "Secretary" the second place
it appears through "loan is made" and inserting the following:
"taking into consideration the average yield, during the 3-month
period immediately preceding the fiscal year in which the loan is
made, on the most recently issued 30-year marketable obligations
of the United States"; and
(C) by adding at the end the following new subparagraph:
"(B) At the option of the borrower, a loan under this section may be
made and may be processed for a conditional or firm commitment either
(i) at an interest rate not to exceed a rate and allowance determined by
the Secretary in accordance with subparagraph (A) using the 1-month
period immediately prior to the month in which the request for a
commitment is submitted; or (ii) at an interest rate not to exceed a
rate and allowance determined by the Secretary in accordance with
subparagraph (A) using the 3-month period immediately preceding the
fiscal year in which the request for a commitment is submitted.".
(2) MAXIMUM RATE. -- Section 223(a) of the Housing and
Urban-Rural Recovery Act of 1983 "12 USC 1701q note" is amended by
striking paragraph (2).
(d) INTEREST RATE ON NOTES. -- The second sentence of section
202(a)(4)(B)(i) of the Housing Act of 1959 "12 USC 1701q" is amended to
read as follows: "Such notes or other obligations shall bear interest
at a rate determined by the Secretary of the Treasury taking into
consideration the average yield, during the 3-month period immediately
preceding the fiscal year in which the loan is made, on the most
recently issued 30-year marketable obligations of the United States.".
(e) APPEAL OF CANCELLATION OF LOAN AUTHORITY. -- Section 202 of the
Housing Act of 1959 is amended by adding at the end the following new
subsection:
"(n) The Secretary shall notify the project sponsor not less than 30
days prior to canceling any loan authority provided under this section.
During the 30-day period following the receipt of a notice under
paragraph (1), a sponsor may appeal the proposed cancellation of loan
authority. Such appeal, including review by the Secretary, shall be
completed not later than 45 days after the appeal is filed.".
(f) PRIORITY. -- Section 202(a) of the Housing Act of 1959 is
amended by adding at the end the following new paragraph:
"(8) In reviewing applications for loans under this section, the
Secretary shall give a priority to any project that will provide housing
designed to replace a structure that is owned by a public housing
agency, contains not less than 100 dwelling units, is used for housing
only elderly families, and is to be demolished. The requirements of
this paragraph shall not apply after September 30, 1988.".
SEC. 162. HOUSING FOR THE HANDICAPPED.
(a) FINDINGS AND PURPOSE. -- "12 USC 1701q note"
(1) The Congress finds that --
(A) housing for nonelderly handicapped families is assisted
under section 202 of the Housing Act of 1959 and section 8 of the
United States Housing Act of 1937;
(B) the housing programs under such sections are designed and
implemented primarily to assist rental housing for elderly and
nonelderly families and are often inappropriate for dealing with
the specialized needs of the physically impaired, the
developmentally disabled, and the chronically mentally ill;
(C) the development of housing for nonelderly handicapped
families under such programs is often more expensive than
necessary, thereby reducing the number of such families that can
be assisted with available funds;
(D) the program under section 202 of the Housing Act of 1959
can continue to provide direct loans to finance group residences
and independent apartments for nonelderly handicapped families,
but can be made more efficient and less costly by the adoption of
standards and procedures applicable only to housing for such
families;
(E) the cost containment policies currently being implemented
in the development of small group homes (i) do not adequately
reflect the necessity for building designs to meet the needs of
the designated residents; and (ii) do not recognize necessary
State and local standards for the operation of such homes;
(F) the use of the program under section 8 of the United States
Housing Act of 1937 to assist rentals for housing for nonelderly
handicapped families is time consuming and unnecessarily costly
and, in some areas of the Nation, prevents the development of such
housing;
(G) the use of the program under section 8 of the United States
Housing Act of 1937 to assist rentals for housing for nonelderly
handicapped families should be replaced by a more appropriate
subsidy mechanism;
(H) both elderly and handicapped housing projects assisted
under section 202 of the Housing Act of 1959 will benefit from an
increased emphasis on supportive services and a greater use of
State and local funds; and
(I) an improved program for nonelderly handicapped families
will assist in providing shelter and supportive services for
mentally ill persons who might otherwise be homeless.
(2) The purpose of this section is to improve the direct loan
program under section 202 of the Housing Act of 1959 to ensure
that such program meets the special housing and related needs of
nonelderly handicapped families.
(b) HOUSING FOR HANDICAPPED FAMILIES. --
(1) Section 202(h) of the Housing Act of 1959 "12 USC 1701q" is
amended to read as follows:
"(h)(1) Of the amounts made available in appropriation Acts for loans
under subsection (a)(4)(C) for any fiscal year commencing after
September 30, 1987, not less than 15 percent shall be available for
loans for the development costs of housing for handicapped families. If
the amount required for any such fiscal year for approvable applications
for loan under this subsection is less than the amount available under
this paragraph, the balance shall be made available for loans under
other provisions of this section.
"(2) The Secretary shall take such actions as may be necessary to
ensure that --
"(A) funds made available under this subsection will be used to
support a variety of methods of meeting the needs primarily of
nonelderly handicapped families by providing a variety of housing
options, ranging from small group homes to independent living
complexes; and
"(B) housing for handicapped families assisted under this
subsection will provide families occupying units in such housing
with an assured range of services specified in subsection (f),
will provide such families with opportunities for optimal
independent living and participation in normal daily activities,
and will facilitate access by such families to the community at
large and to suitable employment opportunities within such
community.
"(3)(A) In allocating funds under this subsection, and in processing
applications for loans under this section and assistance payments under
paragraph (4), the Secretary shall adopt such distinct standards and
procedures as the Secretary determines appropriate due to differences
between housing for handicapped families and other housing assisted
under this section. In adopting such standards, the Secretary shall
ensure adequate participation by representatives of the disability
community through the provisions available under the Federal Advisory
Committee Act.
"(B) The Secretary may, on a demonstration basis, determine the
feasibility and desirability of reducing processing time and costs for
housing for handicapped families by limiting project design to a small
number of prototype designs. Any such demonstration shall be limited to
the 3-year period following the date of the enactment of the Housing and
Community Development Act of 1987, may only involve projects whose
sponsors consent to participation in such demonstration, and shall be
described in a report submitted by the Secretary to the Congress
following completion of such demonstration.
"(4)(A) The Secretary shall, to the extent approved in appropriation
Acts, enter into contracts with owners of housing for handicapped
families receiving loans under, or meeting the requirements of, this
section to make monthly payments to cover any part of the costs
attributed to units occupied (or, as approved by the Secretary, hold for
occupancy) by lower income families that is not met from project income.
The annual contract amount for any project shall not exceed the sum of
the initial annual project rentals for all units and any initial utility
allowances for such units, as approved by the Secretary. Any contract
amounts not used by a project in any year shall remain available to the
project until the expiration of the contract. The term of a contract
entered into under this subparagraph shall be 240 months. The annual
contract amount may be adjusted by the Secretary if the sum of the
project income and the amount of assistance payments available under
this subparagraph are inadequate to provide for reasonable project
costs. In the case of an intermediate care facility in which there
reside families assisted under title XIX of the Social Security Act,
project income under this subparagraph shall include the same amount as
if such families were being assisted under title XVI of the Social
Security Act.
"(B) The Secretary shall approve initial project rentals for any
project assisted under this subsection based on the determination of the
Secretary of the total actual necessary and reasonable costs of
developing and operating the project, excluding the costs of the assured
range of services under subsection (f), taking into consideration the
need to contain costs to the extent practicable and consistent with the
purposes of the project and this section.
(C) The Secretary shall require that, during the term of each
contract entered into under subparagraph (A), all units in a project
assisted under this subsection shall be made available for occupancy by
lower income families, as such term is defined in section 3(b)(2) of the
United States Housing Act of 1937. The rent payment required of a lower
income family shall be determined in accordance with section 3(a) of
such Act, except that the gross income of a family occupying an
intermediate care facility assisted under title XIX of the Social
Security Act shall be the same amount as if the family were being
assisted under title XVI of the Social Security Act.
"(D) The Secretary shall coordinate the processing of an application
for a loan for housing for handicapped families under this section and
the processing of an application for assistance payments under this
paragraph for such housing.".
(2) Section 202(d) of the Housing Act of 1959 "12 USC 701q" is
amended by adding at the end the following new paragraphs:
"(9) The term 'housing for handicapped families' means housing and
related facilities to be occupied by handicapped families who are
primarily nonelderly handicapped families.
"(10) The term 'nonelderly handicapped families' means elderly or
handicapped families, the head of which (and spouse, if any) is less
than 62 years of age at the time of initial occupancy of a project
assisted under this section.".
(3) Section 202(c)(3) of the Housing Act of 1959 "12 USC 1701q"
is amended by inserting after "section" the following: "and
designed for dwelling use by 12 or more elderly or handicapped
families".
(c) SUPPORTIVE SERVICES FOR ELDERLY AND HANDICAPPED FAMILIES. --
Section 202(f) of the Housing Act of 1959 is amended --
(1) by inserting "(1)" after the subsection designation; and
(2) by adding at the end the following new paragraph:
"(2) Each applicant for a loan under this section for housing and
related facilities shall submit with the application a supportive
services plan describing --
"(A) the category or categories of families such housing and
facilities are intended to serve;
"(B) the range of necessary services to be provided to the
families occupying such housing;
"(C) the manner in which such services will be provided to such
families; and
"(D) the extent of State and local funds available to assist in
the provision of such services.".
(d) TERMINATION OF SECTION 8 ASSISTANCE. -- On and after the first
date that amounts approved in an appropriation Act "12 USC 1701q note"
for any fiscal year become available for contracts under section
202(h)(4)(A) of the Housing Act of 1959, as amended by subsection (b) of
this section, no project for handicapped (primarily nonelderly) families
approved for such fiscal year pursuant to section 202 of such Act shall
be provided assistance payments under section 8 of the United States
Housing Act of 1937, except pursuant to a reservation for a contract to
make such assistance payments that was made before the first date that
amounts for contracts under such section 202(h)(4)(A) became available.
(e) IMPLEMENTATION. -- Not later than the expiration of the 120-day
period following the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall, to the extent amounts are approved
in an appropriation Act for use under section 202(h)(4)(A) of the
Housing Act of 1959 "12 USC 1701q note" for fiscal year 1988, publish in
the Federal Register a notice of fund availability to implement the
provisions of, and amendments made by, this section. The Secretary
shall issue such rules as may be necessary to carry out such provisions
and amendments for fiscal year 1989 and thereafter.
(f) EFFECTIVE DATE AND APPLICABILITY. -- "12 USC 1701q note"
(1) Except as otherwise provided in this section, the
provisions of, and amendments made by, this section shall not
apply with respect to projects with loans or loan reservations
made under section 202 of the Housing Act of 1959 before the
implementation date under subsection (e).
(2) Notwithstanding paragraph (1), the Secretary shall apply
the provisions of, and amendments made by, this section to any
project if needed to facilitate the development of such project in
a timely manner.
SEC. 163. CONGREGATE SERVICES.
(a) AUTHORIZATION OF APPROPRIATIONS. -- Section 411(a) of the
Congregate Housing Services Act of 1978 "42 USC 8010" is amended to read
as follows:
"(a) There are authorized to be appropriated to carry out this title
$10,000,000 for each of the fiscal years 1988 and 1989.".
(b) DELETION OF REFERENCE TO PROGRAM AS NONPERMANENT. -- Section 408
of the Congregate Housing Services Act of 1978 "42 USC 8007" is amended
by striking subsection (c).
(c) REPORT. -- Section 408 of the Congregate Housing Services Act of
1978 (as amended by subsection (b) of this section) is further amended
by adding at the end the following new subsection:
"(c)(1) The Secretary shall contract with a university or qualified
research institution to produce a report --
"(A) documenting the number of elderly living in federally
assisted housing at risk of institutionalization;
"(B) studying and comparing alternative delivery systems in the
States, including the congregate housing services program, to
provide services to older persons in assisted congregate housing;
"(C) assessing existing and potential financial resources at
the Federal, State, and local levels for the support of congregate
housing services; and
"(D) making legislative recommendations as to the feasibility
of permitting State housing agencies and other appropriate State
agencies to participate and operate the program on a matching
grant basis.
"(2) The Secretary shall submit the report to the Congress not later
than September 30, 1988.".
SEC. 164. MODIFICATION OF RESTRICTION ON USE OF ASSISTED HOUSING BY
ALIENS.
(a) ALIENS ADMITTED FOR LAWFUL RESIDENCE. -- Section 214(a) of the
Housing and Community Development Act of 1980 "42 USC 1436a" is amended
--
(1) by striking "or" at the end of paragraph (4);
(2) by striking the period at the end of paragraph (5) and
inserting "; or"; and
(3) by adding at the end the following new paragraph:
"(6) an alien lawfully admitted for temporary or permanent
residence under section 245A of the Immigration and Nationality
Act.".
(b) PRESERVATION OF FAMILIES. -- Section 214 of the Housing and
Community Development Act of 1980 is amended by inserting after
subsection (b) the following new subsection:
"(c)(1) If, following completion of the applicable hearing process,
financial assistance for any individual receiving such assistance on the
date of the enactment of the Housing and Community Development Act of
1987 is to be terminated, the public housing agency or other local
governmental entity involved (in the case of public housing or
assistance under section 8 of the United States Housing Act of 1937) or
the Secretary of Housing and Urban Development (in the case of any other
financial assistance) may, in its discretion, take one of the following
actions:
"(A) Permit the continued provision of financial assistance, if
necessary to avoid the division of a family in which the head of
household or spouse is a citizen of the United States, a national
of the United States, or an alien resident of the United States
described in any of paragraphs (1) through (6) of subsection (a).
For purposes of this paragraph, the term 'family' means a head of
household, any spouse, any parents of the head of household, any
parents of the spouse, and any children of the head of household
or spouse.
"(B) Defer the termination of financial assistance, if
necessary to permit the orderly transition of the individual and
any family members involved to other affordable housing. Any
deferral under this subparagraph shall be for a 6-month period and
may be renewed by the public housing agency or other entity
involved for an aggregate period of 3 years. At the beginning of
each deferral period, the public housing agency or other entity
involved shall inform the individual and family members of their
ineligibility for financial assistance and offer them other
assistance in finding other affordable housing.
"(2) Notwithstanding any other provision of law, the Secretary of
Housing and Urban Development may not make financial assistance
available for the benefit of --
"(A) any alien who --
"(i) has a residence in a foreign country that such alien has
no intention of abandoning;
"(ii) is a bona fide student qualified to pursue a full course
of study; and
"(iii) is admitted to the United States temporarily and solely
for purposes of pursuing such a course of study at an established
institution of learning or other recognized place of study in the
United States, particularly designated by such alien and approved
by the Attorney General after consultation with the Department of
Education of the United States, which institution or place of
study shall have agreed to report to the Attorney General the
termination of attendance of each nonimmigrant student (and if any
such institution of learning or place of study fails to make such
reports promptly the approval shall be withdrawn); and
"(B) the alien spouse and minor children of any alien described
in subparagraph (A), if accompanying such alien or following to
join such alien.".
(c) VERIFICATION PROCEDURES. -- Section 214(d) of the Housing and
Community Development Act of 1980 (as added by section 121(a)(2) of the
Immigration Reform and Control Act of 1986 (Public Law 99-603)) "42 USC
1436a" is amended --
(1) in paragraph (2), by inserting after "States" the
following: ", is not 62 years of age or older, and is receiving
financial assistance on the date of the enactment of the Housing
and Community Development Act of 1987";
(2) in paragraph (4), in the matter before subparagraph (A) --
(A) by inserting after "States" the following: ", is not 62
years of age or older, and is receiving financial assistance on
the date of the enactment of the Housing and Community Development
Act of 1987"; and
(B) by inserting "or recertification" after "application";
(3) in paragraph (4)(A)(i), by inserting after the comma the
following: "or to appeal to the Immigration and Naturalization
Service the verification determination of the Immigration and
Naturalization Service under paragraph (3),";
(4) in paragraph (4)(B), by striking the matter before clause
(i) and inserting the following:
"(B) if any documents or additional information are submitted
as evidence under subparagraph (A), or if appeal is made to the
Immigration and Naturalization Service with respect to the
verification determination of the Service under paragraph (3) --
";
(5) in paragraph (4)(B)(i), by inserting "or additional
information" after "documents";
(6) in paragraph (4)(B)(ii), by inserting "or appeal" after
"verification";
(7) by inserting after paragraph (5) the following new
paragraph:
"(6) For purposes of paragraph (5)(B), the applicable fair
hearing process made available with respect to any individual
shall include not less than the following procedural protections:
"(A) The Secretary shall provide the individual with written
notice of the determination described in paragraph (5) and of the
opportunity for a hearing with respect to the determination.
"(B) Upon timely request by the individual, the Secretary shall
provide a hearing before an impartial hearing officer designated
by the Secretary, at which hearing the individual may produce
evidence of a satisfactory immigration status.
"(C) The Secretary shall notify the individual in writing of
the decision of the hearing officer on the appeal of the
determination in a timely manner.
"(D) Financial assistance may not be denied or terminated until
the completion of the hearing process."; and
(8) by striking the last sentence and inserting the following:
"For purposes of this subsection, the term 'Secretary' means the
Secretary of Housing and Urban Development, a public housing
agency, or another entity that determines the eligibility of an
individual for financial assistance.".
(d) ENFORCEMENT PROCEDURES. -- Section 214(e) of the Housing and
Community Development Act of 1980 (as added by section 121(a)(2) of the
Immigration Reform and Control Act of 1986 (Public Law 99-603)) "42 USC
1436a" is amended --
(1) in the matter before paragraph (1), by inserting "of
Housing and Urban Development" after "Secretary";
(2) in paragraph (2), by inserting after "(d)(4)(A)(ii)" the
following: "(or under any alternative system for verifying
immigration status with the Immigration and Naturalization Service
authorized in the Immigration Reform and Control Act of 1986
(Public Law 99-603))";
(3) in paragraph (3), by inserting after "(d)(4)(B)(ii)" the
following: "(or under any alternative system for verifying
immigration status with the Immigration and Naturalization Service
authorized in the Immigration Reform and Control Act of 1986
(Public Law 99-603))"; and
(4) in paragraph (4), by inserting after "(d)(5)(B)" the
following: "(or provided for under any alternative system for
verifying immigration status with the Immigration and
Naturalization Service authorized in the Immigration Reform and
Control Act of 1986 (Public Law 99-603))".
(e) VERIFICATION SYSTEM. -- Section 214 of the Housing and Community
Development Act of 1980 (as amended by section 121(a)(2) of the
Immigration Reform and Control Act of 1986 (Public Law 99-603)) "42 USC
1436a" is amended by adding at the end the following new subsection:
"(f)(1) Notwithstanding any other provision of law, no agency or
official of a State or local government shall have any liability for the
design or implementation of the Federal verification system described in
subsection (d) if the implementation by the State or local agency or
official is in accordance with Federal rules and regulations.
"(2) The verification system of the Department of Housing and Urban
Development shall not supersede or affect any consent agreement entered
into or court decree or court order entered prior to the date of the
enactment of the Housing and Community Development Act of 1987.".
(f) REIMBURSEMENT FOR COSTS OF IMPLEMENTATION. --
(1) Section 214 of the Housing and Community Development Act of
1980 (as amended by subsection (e) of this section) is further
amended by adding at the end the following new subsection:
"(g) The Secretary of Housing and Urban Development is authorized to
pay to each public housing agency or other entity an amount equal to 100
percent of the costs incurred by the public housing agency or other
entity in implementing and operating an immigration status verification
system under subsection (d) (or under any alternative system for
verifying immigration status with the Immigration and Naturalization
Service authorized in the Immigration Reform and Control Act of 1986
(Public Law 99-603)).".
(2) The United States Housing Act of 1937 (as amended by
section 121(b)(6) of the Immigration Reform and Control Act of
1986 "42 USC 1437r" (Public Law 99-603)) is amended by striking
section 20.
(g) "42 USC 1436a note" TRANSITIONAL CERTIFICATION AND DOCUMENTATION
PROVISIONS. -- In carrying out section 214 of the Housing and Community
Development Act of 1980 during fiscal year 1988, the Secretary of
Housing and Urban Development shall require, as a condition of providing
financial assistance for the benefit of any individual, that such
individual --
(1) declare in writing, under penalty of perjury, whether or
not such individual is a citizen or national of the United States;
and
(2) if not a citizen or national --
(A) declare in writing, under penalty of perjury, the
immigration status of such individual, if such individual is not
less than 62 years of age "and is receiving financial assistance
on the date of the enactment of the Housing and Community
Development Act of 1987"; or
(B) provide such documentation regarding the immigration status
of such individual as the Secretary may require by regulation.
(h) EFFECTIVE DATES. -- "42 USC 1436a note"
(1) The provisions of, and amendments made by, subsections (a),
(b), (e), (f), and (g) shall take effect on the date of the
enactment of this Act.
(2) The amendments made by subsections (c) and (d) shall take
effect on October 1, 1988.
SEC. 165. "42 USC 3543" PREVENTING FRAUD AND ABUSE IN DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT PROGRAMS.
(a) DISCLOSURE OF SOCIAL SECURITY ACCOUNT NUMBER. -- As a condition
of initial or continuing eligibility for participation in any program of
the Department of Housing and Urban Development involving loans, grants,
interest or rental assistance of any kind, or mortgage or loan
insurance, and to ensure that the level of benefits provided under such
programs is proper, the Secretary of Housing and Urban Development may
require that an applicant or participant (including members of the
household of an applicant or participant) disclose his or her social
security account number or employer identification number to the
Secretary.
(b) DEFINITIONS. -- For purposes of this section, the terms
"applicant" and "participant" shall have such meanings as the Secretary
of Housing and Urban Development by regulation shall prescribe. Such
terms shall not include persons whose involvement is only in their
official capacity, such as State or local government officials or
officers of lending institutions.
SEC. 166. ANNUAL REPORT ON CHARACTERISTICS OF FAMILIES IN ASSISTED
HOUSING.
(a) IN GENERAL. "42 USC 3536 note" -- The Secretary of Housing and
Urban Development shall include in the annual report under section 8 of
the Housing and Urban Development Act descriptions of the
characteristics of families assisted under each of the following
programs of assistance: public housing, section 8 of the United States
Housing Act of 1937 (other than subsection (o) of such section), section
8(o) of the United States Housing Act of 1937, and section 202 of the
Housing Act of 1959.
(b) SPECIFIC REQUIREMENTS. -- The descriptions required in
subsection (a) shall include information with respect to --
(1) family size, including the number of children;
(2) amount and sources of family income;
(3) the age, race, and sex of family members; and
(4) whether the head of the family (or the spouse of such
person) is a member of the armed forces.
SEC. 167. SECTION 236 RENTAL HOUSING PROGRAM.
(a) STATE-AIDED PROJECTS. --
(1) Section 236(f)(4) of the National Housing Act "12 USC
1715z-1" is amended by striking "90 per centum" and inserting "100
percent".
(2) Section 101(g) of the Housing and Urban Development Act of
1965 "12 USC 1701s" is amended by striking "90 per centum" and
inserting "100 percent".
(b) INSURING AUTHORITY. -- Section 236(n) of the National Housing
Act "12 USC 1715z-1" is amended by adding at the end the following new
sentence: "A mortgage may be insured under this section after the date
in the preceding sentence in order to refinance a mortgage insured under
this section or to finance pursuant to subsection (j)(3) the purchase,
by a cooperative or nonprofit corporation or association, of a project
assisted under this section.".
SEC. 168. TENANT ELIGIBILITY DETERMINATIONS IN RENT SUPPLEMENT
PROJECTS.
Section 101 of the Housing and Urban Development Act of 1965 is
amended --
(1) by striking the second sentence of subsection (e)(1), and
(2) by striking subsection (k) and inserting the following:
"(k) In selecting individuals or families to be assisted under this
section in accordance with the eligibility criteria and procedures
established under subsection (e)(1), the project owner shall give
preference to individuals or families who are occupying substandard
housing, are paying more than 50 percent of family income for rent, or
are involuntarily displaced at the time they are seeking housing
assistance under this section.".
SEC. 169. COUNSELING TO TENANTS AND HOMEOWNERS.
(a) COUNSELING SERVICES. -- Section 106(a)(3) of the Housing and
Urban Development Act of 1968 "12 USC 1701x" is amended in the first
sentence by striking all that follows the semicolon and inserting the
following: "except that for each of the fiscal years 1988 and 1989
there are authorized to be appropriated $3,500,000 for such purposes.".
(b) EMERGENCY HOMEOWNERSHIP COUNSELING. -- Section 106 of the
Housing and Urban Development Act of 1968 is amended by inserting at the
end the following new subsection:
"(c) GRANTS FOR HOMEOWNERSHIP COUNSELING ORGANIZATIONS. --
"(1) IN GENERAL. -- The Secretary of Housing and Urban
Development may make grants --
"(A) to nonprofit organizations experienced in the provision of
homeownership counseling to enable the organizations to provide
homeownership counseling to eligible homeowners; and
"(B) to assist in the establishment of nonprofit homeownership
counseling organizations.
"(2) PROGRAM REQUIREMENTS. --
"(A) Applications for grants under this subsection shall be
submitted in the form, and in accordance with the procedures, that
the Secretary requires.
"(B) The homeownership counseling organizations receiving
assistance under this subsection shall use the assistance only to
provide homeownership counseling to eligible homeowners.
"(C) The homeownership counseling provided by homeownership
counseling organizations receiving assistance under this
subsection shall include counseling with respect to --
"(i) financial management;
"(ii) available community resources, including public
assistance programs, mortgage assistance programs, home repair
assistance programs, utility assistance programs, food programs,
and social services; and
"(iii) employment training and placement.
"(3) AVAILABILITY OF HOMEOWNERSHIP COUNSELING. -- The
Secretary shall take any action that is necessary --
"(A) to ensure the availability throughout the United States of
homeownership counseling from homeownership counseling
organizations receiving assistance under this subsection, with
priority to areas that --
"(i) are experiencing high rates of home foreclosure and any
other indicators of homeowner distress determined by the Secretary
to be appropriate; and
"(ii) are not already adequately served by homeownership
counseling organizations; and
"(B) to inform the public of the availability of the
homeownership counseling.
"(4) ELIGIBILITY FOR COUNSELING. -- A homeowner shall be
eligible for homeownership counseling under this subsection if --
"(A) the home loan is secured by property that is the principal
residence (as defined by the Secretary) of the homeowner;
"(B) the home loan is not assisted under title V of the Housing
Act of 1949; and
"(C) the homeowner is, or is expected to be, unable to make
payments, correct a home loan delinquency within a reasonable
time, or resume full home loan payments due to a reduction in the
income of the homeowner because of --
"(i) an involuntary loss of, or reduction in, the employment of
the homeowner, the self-employment of the homeowner, or income
from the pursuit of the occupation of the homeowner; or
"(ii) any similar loss or reduction experienced by any person
who contributes to the income of the homeowner.
"(5) NOTIFICATION OF AVAILABILITY OF HOMEOWNERSHIP COUNSELING
REQUIREMENT. -- The creditor of a delinquent home loan shall
notify an eligible homeowner of the availability of any
homeownership counseling offered by the creditor. As a supplement
to the counseling provided by the creditor, the creditor shall
notify the homeowner of the availability of 1 of the following:
"(A) Homeownership counseling provided by nonprofit
organizations approved by the Secretary and experienced in the
provision of homeownership counseling.
"(B) A list of the nonprofit organizations, approved by the
Secretary and experienced in the provision of homeownership
counseling, that can be obtained by calling a toll-free telephone
number at the Department of Housing and Urban Development.
"(C) Homeownership counseling provided by the Administrator of
Veterans' Affairs for loans insured or guaranteed under chapter 37
of title 38, United States Code.
"(6) DEFINITIONS. -- For purposes of this subsection:
"(A) The term 'creditor' means a person or entity that is
servicing a home loan on behalf of itself or another person or
entity.
"(B) The term 'eligible homeowner' means a homeowner eligible
for counseling under paragraph (4).
"(C) The term 'home loan' means a loan secured by a mortgage or
lien on residential property.
"(D) The term 'homeowner' means a person who is obligated under
a home loan.
"(E) The term 'residential property' means a 1-family
residence, including a 1-family unit in a condominium project, a
membership interest and occupancy agreement in a cooperative
housing project, and a manufactured home and the lot on which the
home is situated.
"(7) REGULATIONS. -- The Secretary shall issue any regulations
that are necessary to carry out this subsection.
"(8) AUTHORIZATION OF APPROPRIATIONS. -- There are authorized
to be appropriated to carry out this subsection $3,500,000 for
each of the fiscal years 1988 and 1989. Any amount appropriated
under this subsection shall remain available until expended.
"(9) TERMINATION. -- The provisions of this subsection shall
not be effective after September 30, 1989.".
SEC. 170. HOUSING ASSISTANCE TECHNICAL AMENDMENTS.
(a) SECTION 235 HOMEOWNERSHIP ASSISTANCE. -- Section 235(i)(3)(C) of
the National Housing Act "12 USC 1715z" is amended by inserting an
opening parenthesis before "including".
(b) RENTAL HOUSING FOR LOWER INCOME FAMILIES. -- The last sentence
of section 236(i)(1) of the National Housing Act "12 USC 1715z-1" is
amended by striking "(h)" and inserting "(f)(4)".
(c) DEFINITION OF DISABILITY. -- Section 3(b)(3)(A) of the United
States Housing Act of 1937 "42 USC 1437a" is amended --
(1) by striking "or" the first place it appears and inserting a
comma; and
(2) by striking "or in section 102 of the Developmental
Disabilities Services and Facilities Construction Amendments of
1970" and inserting the following: ", has a developmental
disability as defined in section 102(7) of the Developmental
Disabilities Assistance and Bill of Rights Act (42 U.S.C.
6001(7))".
(d) LOWER INCOME HOUSING. --
(1) The first sentence of section 6(a) of the United States
Housing Act of 1937 "42 USC 1437d" is amended by inserting "The"
before "Secretary".
(2) Section 6(c)(4)(A) of the United States Housing Act of 1937
is amended --
(A) by striking "or are paying more than 50 per centum of
family income for rent"; and
(B) by inserting ", are paying more than 50 percent of family
income for rent," after "substandard housing".
(3) Paragraphs (4) and (5) of section 6(k) of the United States
Housing Act of 1937 are amended by striking "his" each place it
appears and inserting "their".
(e) HOUSING DEVELOPMENT GRANTS. -- Section 17(d)(7)(A) of the United
States Housing Act of 1937 "42 USC 1437o" is amended by striking "title"
and inserting "subsection".
(f) PUBLIC HOUSING DEMOLITION AND DISPOSITION. -- Section 18(b) of
the United States Housing Act of 1937 "42 USC 1437p" is amended in the
matter preceding paragraph (1) by inserting "or" after "section".
(g) HOUSING FOR THE ELDERLY AND HANDICAPPED. --
(1) The third sentence of section 202(d)(4) of the Housing Act
of 1959 "12 USC 1701q" is amended by striking "is a
developmentally disabled individual as defined in section 102(5)
of the Developmental Disabilities Services and Facilities
Construction Amendments of 1950" and inserting the following:
"has a developmental disability as defined in section 102(7) of
the Developmental Disabilities Assistance and Bill of Rights Act
(42 U.S.C. 6001(7))".
(2) Section 202(f) of the Housing Act of 1959 is amended by
striking "section 134" and inserting "section 133".
(3) Section 202(l) of the Housing Act of 1959 is amended by
striking "difference" and inserting "different".
(h) RENT SUPPLEMENTS. -- Section 101(j)(1)(D) of the Housing and
Urban Development Act of 1965 "12 USC 1701s" is amended by striking
"divided" and inserting "dividend".
SEC. 181. MANAGEMENT AND PRESERVATION OF HUD-OWNED MULTIFAMILY
HOUSING PROJECTS.
(a) GOALS. -- Section 203(a) of the Housing and Community
Development Amendments of 1978 "12 USC 1701z-11" is amended by striking
"(a)" and all that follows through the semicolon at the end of paragraph
(1) and inserting the following:
"(a) The Secretary of Housing and Urban Development (in this section
referred to as the 'Secretary') shall manage or dispose of multifamily
housing projects that are owned by the Secretary, or that are subject to
a mortgage held by the Secretary that is either delinquent, under a
workout agreement, or being foreclosed upon by the Secretary, in a
manner that is consistent with the National Housing Act and this section
and that will, in the least costly fashion among the reasonable
alternatives available, further the goals of --
"(1) preserving so that they are available to and affordable by
low- and moderate-income persons --
"(A) all units in multifamily housing projects that are
subsidized projects or formerly subsidized projects;
"(B) in other multifamily housing projects owned by the
Secretary, at least the units that are occupied by low- and
moderate-income persons or vacant; and
"(C) in all other multifamily housing projects, at least the
units that are, on the date of assignment, occupied by low- and
moderate-income persons;".
(b) MANAGEMENT SERVICES. -- Section 203(b)(2) of the Housing and
Community Development Amendments of 1978 is amended --
(1) by inserting "(A)" after the paragraph designation;
(2) by redesignating clauses (A) through (D) as clauses (i)
through (iv), respectively;
(3) by striking ", owned by the Secretary" and inserting the
following: "subject to subsection (a) that is owned by the
Secretary (or for which the Secretary is mortgagee in
possession)";
(4) by striking the period at the end and inserting "; and";
and
(5) by adding at the end the following new subparagraph:
"(B) to require the owner of a multifamily housing project
subject to subsection (a) that is not owned by the Secretary (and
for which the Secretary is not mortgagee in possession), to
contract for management services for the project in the manner
described in subparagraph (A).".
(c) MAINTAINING OF PROJECTS. -- Section 203(c) of the Housing and
Community Development Amendments of 1978 is amended to read as follows:
"(c)(1) In the case of multifamily housing projects
subject to subsection (a) that are owned by the Secretary (or for
which the Secretary is mortgagee in possession), the Secretary
shall --
"(A) to the greatest extent possible, maintain all such
occupied projects in a decent, safe, and sanitary condition;
"(B) to the greatest extent possible, maintain full occupancy
in all such projects; and
"(C) maintain all such projects for purposes of providing
rental or cooperative housing for the longest feasible period.
"(2) In the case of any multifamily housing project subject to
subsection (a) that is not owned by the Secretary (and for which the
Secretary is not mortgagee in possession), the Secretary shall require
the owner of the project to carry out the requirements of paragraph
(1).".
(d) FINANCIAL ASSISTANCE. -- Section 203 of the Housing and
Community Development Amendments of 1978 "12 USC 1701z-11" is amended --
(1) by redesignating subsections (d) through (g) as subsections
(e) through (h), respectively; and
(2) by inserting after subsection (c) the following new
subsection:
"(d) In carrying out the goals specified in subsection (a)(1) the
Secretary shall take not less than one of the following actions:
"(1) Enter into contracts under section 8 of the United States
Housing Act of 1937, to the extent budget authority is available
for such section 8, with owners of multifamily housing projects
that are acquired by a purchaser other than the Secretary at
foreclosure or after sale by the Secretary. Such contracts shall
provide assistance to the project involved for a period of not
less than 15 years. Such contracts shall be sufficient to assist
all units in subsidized or formerly subsidized projects, and all
units in other projects that are occupied by lower income families
eligible for assistance under such section 8 at the time of
foreclosure or sale, as the case may be, and all units that are
vacant at such time (which units shall be made available for such
families as soon as possible). In order to make available to
families any units in subsidized or formerly subsidized projects
that are occupied by persons not eligible for assistance under
such section 8, but that subsequently become vacant, the contract
shall also provide that when any such vacancy occurs the owner
involved shall lease the available unit to a family eligible for
assistance under such section 8. The Secretary shall provide such
contracts at contract rents that, consistent with subsection (a),
provide for the rehabilitation of such project and do not exceed
the most recently adjusted fair market rents for substantially
rehabilitated units published by the Secretary in the Federal
Register.
"(2) In accordance with the authority provided under the
National Housing Act, provide purchase-money mortgages, reduce the
selling price, or provide other financial assistance to the owners
of multifamily housing projects that are acquired by a purchaser
other than the Secretary at foreclosure, or after sale by the
Secretary, on terms that will ensure that, for a period of not
less than 15 years (A) the project will remain available to and
affordable by low- and moderate-income persons; and (B) such
persons shall pay not more than the amount payable as rent under
section 3(a) of the United States Housing Act of 1937.".
(e) RIGHT OF FIRST REFUSAL. -- Section 203 of the Housing and
Community Development Amendments of 1978 is amended --
(1) by redesignating subsections (e) through (h) (as so
redesignated by this section) as subsections (f) through (i); and
(2) by inserting before such subsection (f) the following new
subsection;
"(e) Upon receipt of a bona fide offer to purchase a project subject
to subsection (a), the Secretary shall notify the local government and
the State housing finance agency (or other agency or agencies designated
by the Governor) of the proposed terms and conditions of the offer,
including the assistance that the Secretary plans to make available to
the prospective purchaser. The local government and the designated
State agency shall have 90 days to match the offer and purchase the
project. In administering the right of first refusal provided in this
subsection, the Secretary shall offer assistance to the local government
or designated State agency on terms and conditions at least as favorable
as made available to the prospective purchaser. Notwithstanding any
other provision of law to the contrary, a local government (including a
public housing agency) or designated State agency may purchase a
subsidized project or formerly subsidized project in accordance with
this subsection.".
(f) DISPLACEMENT PROTECTION. -- Section 203(f)(1) of the Housing and
Community Development Amendments of 1978 (as so redesignated by this
section) "12 USC 1701z-11" is amended --
(1) by striking "owned by the Secretary" and inserting the
following: "subject to subsection (a) that is owned by the
Secretary (or for which the Secretary is mortgagee in
possession)"; and
(2) by adding at the end the following new sentence: "In the
case of a multifamily housing project subject to subsection (a)
that is not owned by the Secretary (and for which the Secretary is
not mortgagee in possession), the Secretary shall require the
owner of the project to carry out the requirements of this
paragraph.".
(g) LIMITATIONS ON CERTAIN PROJECT, LOAN, AND MORTGAGE SALES. --
Section 203 of the Housing and Community Development Amendments of 1978
is amended --
(1) by redesignating subsections (h) and (i) (as so
redesignated by this section) as subsections (i) and (j); and
(2) by inserting before such subsection (i) the following new
subsection:
"(h)(1) The Secretary may not approve the sale of any loan or
mortgage held by the Secretary (including any loan or mortgage owned by
the Government National Mortgage Association) on any subsidized project
or formerly subsidized project unless such sale is made as part of a
transaction that will ensure that such project will continue to operate
at least until the maturity date of such loan or mortgage in a manner
that will provide rental housing on terms at least as advantageous to
existing and future tenants as the terms required by the program under
which the loan or mortgage was made or insured prior to the assignment
of the loan or mortgage on such project to the Secretary.
"(2) The Secretary may not approve the sale of any subsidized project
(A) that is subject to a mortgage held by the Secretary; or (B) if the
sale transaction involves the provision of any additional subsidy funds
by the Secretary or a recasting of the mortgage, unless such sale is
made as part of a transaction that will ensure that such project will
continue to operate at least until the maturity date of the loan or
mortgage in a manner that will provide rental housing on terms at least
as advantageous to existing and future tenants as the terms required by
the program under which the loan or mortgage was made or insured prior
to the proposed sale of the project.
"(3) Notwithstanding any provision of law that may require
competitive sales or bidding, the Secretary may carry out negotiated
sales of subsidized or formerly subsidized mortgages held by the
Secretary, without the competitive selection of purchasers or
intermediaries, to agencies of State or local government, or groups of
investors that include at least 1 such agency of State or local
government, if the negotiations are conducted with such agencies, except
that --
"(A) the terms of any such sale shall include the agreement of
the purchasing agency or agencies of State or local government to
act as mortgagee or owner of a beneficial interest in such
mortgages in a manner consistent with maintaining the projects
that are subject to such mortgages for occupancy by the general
tenant group intended to be served by the applicable mortgage
insurance program, including, to the extent the Secretary
determines appropriate, authorizing such agency of State or local
government to enforce the provisions of any regulatory agreement
or other program requirements applicable to the related projects;
and
"(B) the sales prices for such mortgages shall be, in the
determination of the Secretary, the best price that may be
obtained for such mortgages from an agency of State or local
government, consistent with the expectation and intention that the
projects financed will be retained for use under the applicable
mortgage insurance program for the life of the initial mortgage
insurance contract.".
(h) DEFINITIONS. -- Section 203(i) of the Housing and Community
Development Amendments of 1978 "12 USC 1701z-11" (as so redesignated by
this section) is amended --
(1) by inserting "(1)" after the subsection designation; and
(2) by adding at the end the following new paragraphs:
"(2) For the purpose of this section, the term 'subsidized project'
means a multifamily housing project receiving any of the following
assistance immediately prior to the assignment of the mortgage on such
project to, or the acquisition of such mortgage by, the Secretary:
"(A) below market interest rate mortgage insurance under the
proviso of section 221(d)(5) of the National Housing Act;
"(B) interest reduction payments made in connection with
mortgages insured under section 236 of the National Housing Act;
"(C) rent supplement payments under section 101 of the Housing
and Urban Development Act of 1965;
"(D) direct loans at below market interest rates, made under
section 202 of the Housing Act of 1959 or to a multifamily housing
project under section 312 of the Housing Act of 1964; or
"(E) housing assistance payments made under section 23 of the
United States Housing Act of 1937 (as in effect before January 1,
1975) or section 8 of the United States Housing Act of 1937 (other
than subsection (b)(1) of such section), without regard to whether
such payments are made to all or a portion of the units in the
project.
"(3) For the purpose of this section, the term 'formerly subsidized
project' means a multifamily housing project owned by the Secretary that
was a subsidized project immediately prior to its acquisition by the
Secretary.".
SEC. 182. ACQUISITION OF INSURED MULTIFAMILY HOUSING PROJECTS.
Section 207(k) of the National Housing Act "12 USC 1713" is amended
by inserting after the second sentence the following new sentence: "In
determining the amount to be bid, the Secretary shall act consistently
with the goal established in section 203(a)(1) of the Housing and
Community Development Amendments of 1978.".
SEC. 183. TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS.
(a) APPLICABILITY. -- Section 202(a) of the Housing and Community
Development Amendments of 1978 "12 USC 1715z-1b" is amended by inserting
before the period at the end the following: "or section 202 of the
Housing Act of 1959".
(b) NOTICE AND COMMENT. -- Section 202(b)(1) of the Housing and
Community Development Amendments of 1978 is amended by striking "and the
Secretary deems it appropriate" and inserting the following: "or where
the Secretary proposes to sell a mortgage secured by a multifamily
housing project".
(c) NONDISCRIMINATION AGAINST SECTION 8 CERTIFICATE HOLDERS AND
VOUCHER HOLDERS. -- No owner of a subsidized project (as defined in
section 203(i)(2) "42 USC 1437f note" of the Housing and Community
Development Amendments of 1978, as amended by section 181(h) of this
Act) shall refuse --
(1) to lease any available dwelling unit in any such project of
such owner that rents for an amount not greater than the fair
market rent for a comparable unit, as determined by the Secretary
under section 8 of the United States Housing Act of 1937, to a
holder of a certificate of eligibility under such section, a
proximate cause of which is the status of such prospective tenant
as a holder of such certificate, and to enter into a housing
assistance payments contract respecting such unit; or
(2) to lease any available dwelling unit in any such project of
such owner to a holder of a voucher under section 8(o) of such
Act, and to enter into a voucher contract respecting such unit, a
proximate cause of which is the status of such prospective tenant
as holder of such voucher.
SEC. 184. MULTIFAMILY HOUSING DISPOSITION PARTNERSHIP.
(a) ESTABLISHMENT OF DEMONSTRATION PROGRAM. -- "12 USC 1701z-11
note" The Secretary of Housing and Urban Development (referred to in
this section as the "Secretary") shall carry out a program to
demonstrate the effectiveness of disposing of distressed multifamily
housing projects owned by the Department of Housing and Urban
Development through a partnership with State housing finance agencies.
The demonstration program may be carried out with not more than 4 State
housing finance agencies and shall be designed to determine the
feasibility of entering into similar relationships with other State
housing finance agencies.
(b) REQUIREMENTS OF DEMONSTRATION PROGRAM. --
(1) OPPORTUNITY TO PARTICIPATE IN SALE. -- Not less than 30
days before offering to sell any multifamily housing project that
is located in a State participating in the demonstration program
and that is subject to section 204 of the Housing and Community
Development Amendments of 1978, the Secretary shall --
(A) notify the State housing finance agency of the plan of the
Secretary to sell the project; and
(B) provide the State housing finance agency with the option to
provide the long-term financing for the sale of the project
through the co-insurance program of the Secretary, if the project
complies with the State laws applicable to the State housing
finance agency.
(2) TERMS OF PARTICIPATION. -- If the State housing finance
agency agrees to participate in the sale of a project under this
section, the terms of the sale shall be as follows:
(A) The State housing finance agency shall provide a loan to
the purchaser of the property.
(B) The mortgage securing the loan shall be insured by the
Secretary and the State housing finance agency under paragraph (3)
or (4) of section 221(d) of the National Housing Act.
(C) The terms and conditions of the loan shall be consistent
with the terms and conditions of the sale.
(3) COOPERATIVE AGREEMENT. -- Not later than the expiration of
the 3-month period beginning on the date of the enactment of this
Act, the Secretary shall enter into cooperative agreements with
State housing finance agencies to carry out the demonstration
program under this section.
(c) TERMINATION OF DEMONSTRATION PROGRAM. --
(1) IN GENERAL. -- Except as provided in paragraph (2), the
demonstration program under this section shall terminate upon the
expiration of the 3-year period beginning on the date of the
enactment of this Act.
(2) CONTINUATION OF PROGRAM. --
(A) The Secretary may continue the demonstration program under
this section after the termination date established in paragraph
(1) for such additional period as the Secretary determines to be
appropriate.
(B) The Secretary shall continue the demonstration program
under this section with respect to any project for which the
Secretary notifies the State housing finance agency under
subsection (b)(1)(A) before the termination date established in
paragraph (1) or under subparagraph (A).
(d) REPORT TO CONGRESS. -- Not later than 6 months after the
termination date established in subsection (c)(1), the Secretary shall
submit to the Congress a report evaluating the effectiveness of the
demonstration program under this section as a national model for the
disposition of distressed multifamily housing projects owned by the
Department of Housing and Urban Development.
SEC. 185. MULTIFAMILY HOUSING CAPITAL IMPROVEMENTS ASSISTANCE.
(a) PURPOSE. -- Section 201(a) of the Housing and Community
Development Amendments of 1978 "12 USC 1715z-1a" is amended by inserting
after "management," the following: "to permit capital improvements to
be made to maintain certain projects as decent, safe, and sanitary
housing,".
(b) ELIGIBILITY. -- Section 204(c)(1)(B) of the Housing and
Community Development Amendments of 1978 is amended by inserting after
"is assisted under" the following: "section 23 of the United States
Housing Act of 1937, as in effect immediately before January 1, 1975,".
(c) BORROWER REQUIREMENTS. -- Section 201(d) of the Housing and
Community Development Amendments of 1978 is amended --
(1) in paragraph (1), by inserting "or physical" after
"maintain the financial"; and
(2) in paragraph (6), by striking the final period, and
inserting the following: "; except that the Secretary may excuse
an owner from compliance with the plan requirement set forth in
this paragraph in any case in which such owner seeks only
assistance for capital improvements under this section.".
(d) AMOUNT AND CONDITIONS OF ASSISTANCE. -- Section 201(f) of the
Housing and Community Development Amendments of 1978 "12 USC 1715z-1a"
is amended --
(1) in paragraph (1), by inserting after "to any project" in
the matter preceding subparagraph (A) the following: "(except a
project assisted only for capital improvements)"; and
(2) in paragraph (4), by inserting after "for any year" the
following: "for a project (other than a project receiving
assistance only for capital improvements)".
(e) REGULATIONS. -- Section 201(g) of the Housing and Community
Development Amendments of 1978 is amended by inserting before the period
at the end the following: ", to the extent applicable.".
(f) FLEXIBLE SUBSIDY FUND. -- Section 201(j) of the Housing and
Community Development Amendments of 1978 is amended to read as follows:
"(j)(1) For purposes of carrying out the provisions of this section,
there is hereby established in the Treasury of the United States a
revolving fund, to be known as the Flexible Subsidy Fund. The Fund
shall, to the extent approved in appropriation Acts, be available to the
Secretary to provide assistance under this section (including assistance
for capital improvements).
"(2) The Fund shall consist of (A) any amount appropriated to carry
out the purposes of this section; (B) any amount repaid on any
assistance provided under this section; (C) any amounts credited to the
reserve fund described in section 236(g) of the National Housing Act;
and (D) any other amount received by the Secretary under this section
(including any amount realized under paragraph (3)).
"(3) Any amounts in the Fund determined by the Secretary to be in
excess of the amounts currently required to carry out the provisions of
this section shall be invested by the Secretary in obligations of, or
obligations guaranteed as to both principal and interest by, the United
States or any agency of the United States.
"(4) The Secretary may use not more than $50,000,000 from the Fund in
any fiscal year for purposes of providing assistance for capital
improvements in accordance with this section.".
(g) ASSISTANCE FOR CAPITAL IMPROVEMENTS. -- Section 201 of the
Housing and Community Development Amendments of 1978 is amended by
adding at the end the following new subsections:
"(k)(1) Assistance for capital improvements under this section shall
include assistance for any major repair or replacement of a capital item
in a multifamily housing project, including any such repair or
replacement required as a result of deferred or inadequate maintenance.
Capital improvements do not include maintenance of any such item.
Assistance for capital improvements under this section shall be in the
form of a loan.
"(2) The owner of a project receiving assistance for capital
improvements shall agree to contribute assistance to such project in
such amounts, from such sources, and in such manner as the Secretary
determines to be appropriate, except that --
"(A) such contribution shall not be less than 20 percent of the
total estimated cost of the capital improvements involved, unless
the Secretary, upon application of the owner, determines that such
contribution is financially infeasible and waives or reduces such
contribution to the extent necessary;
"(B) the Secretary may not require an amount to be contributed,
from the reserve funds established by the owner of such projects
for the purpose of making capital improvements, in excess of 50
percent of the amount of such reserve funds on the date of such
loan; and
"(C) The Secretary shall waive the requirements of this
paragraph if such owner is a private nonprofit corporation or an
association.
"(3) The Secretary may provide assistance for capital improvements
under this section if the Secretary finds that the reserve funds
established by the owner of a project for the purpose of making capital
improvements are insufficient to finance both the capital improvements
for which such assistance is to be used and other capital improvements
that are reasonably expected to be required in the near future, and such
insufficiency is not the result of the failure of such owner to comply
with any standard established by the Secretary for management of such
reserve funds.
"(4) In providing, and contracting to provide, assistance for capital
improvements under this section, the Secretary shall --
"(A) give priority to projects that are eligible for incentives
under section 224(b) of the Emergency Low Income Housing
Preservation Act of 1987; and
"(B) with respect to any amounts not required for projects
under subparagraph (A), give priority among other projects based
on the extent to which --
"(i) the capital improvements for which such assistance is
requested are immediately required;
"(ii) the projects serve as the residences of lower income
families, and the extent which other suitable housing is
unavailable for such families in the areas in which such projects
are located;
"(iii) the capital improvements for which such assistance is
requested involve the life, safety, or health of the residents of
the project or involve major capital improvements in the projects;
and
"(iv) the projects demonstrate the greatest financial distress,
while continuing to meet the requirements of subsection (d)(1).
"(l)(1) The principal amount of any assistance for capital
improvements under this section that is provided to the owner of a
project shall not exceed the difference between the contribution made by
the owner in accordance with subsection (k)(2) and the sum of --
"(A) the amount determined by the Secretary to be necessary for
such owner to make capital improvements with respect to capital
items that have failed, or are likely to deteriorate seriously or
fail in the near future, in such projects;
"(B) the amount determined by the Secretary to be necessary to
carry out a plan to upgrade the capital items being improved, and
any other capital items determined by the Secretary to be
associated with such capital items being improved and to require
upgrading, to meet cost-effective energy efficiency standards
prescribed by the Secretary; and
"(C) the amount determined by the Secretary to be necessary to
comply with the requirements of section 504 of the Rehabilitation
Act of 1973 (29 U.S.C. 794).
"(2)(A) The term of any assistance for capital improvements in the
form of a loan under this section shall not exceed the remaining term of
the mortgage of the project with respect to which such loan is provided.
"(B) Each loan for capital improvements provided under this section
shall bear interest at a rate determined by the Secretary to be
appropriate, except that --
"(i) such rate shall not be more than 3 percentage points below
a rate determined by the Secretary of the Treasury taking into
consideration the average interest rate on all interest bearing
obligations of the United States then forming a part of the public
debt, computed at the end of the fiscal year next preceding date
on which the loan is made, adjusted to the nearest 1/8 of 1
percent, plus an allowance adequate in the judgment of the
Secretary of Housing and Urban Development to cover administrative
costs and probable losses under the program; and
"(ii) such interest rate plus such allowance shall not exceed 6
percent per annum nor be less than 3 percent per annum.
"(C) Each loan for capital improvements provided under this section
shall be considered to be a liability of the project involved, and shall
not be dischargeable in any bankruptcy proceeding under section 727,
1141, or 1328(b) of title 11, United States Code.
"(D) The Secretary may establish such additional conditions on loans
provided under this section as the Secretary determines to be
appropriate.
"(E) The Secretary may provide more than one loan or assistance in
any other form to any project under this section, if each loan or other
assistance complies with the provisions of this section.
"(m)(1) Increases in rental payments that may occur as a result of
the debt service and other expenses of a loan for capital improvements
provided under this section for a project subject to a plan of action
approved under subtitle B of the Emergency Low Income Housing
Preservation Act of 1987 shall be governed by the rent agreements
entered into under such subtitle.
"(2) In order to minimize any increases in rental payments that may
occur as a result of the debt service and other expenses of a loan for
capital improvements provided under this section for a project not
subject to paragraph (1) and that would be incurred by lower income
residents of the project involved whose rental payments are, or would as
a result of such expenses be, in excess of the amount allowable if
section 3(a) of the United States Housing Act of 1937 were applicable to
such residents, the Secretary may take any or all of the following
actions:
"(A) Provide assistance with respect to such project under
section 8(b)(1) of the United States Housing Act of 1937, to the
extent amounts are available for such assistance and without
regard to section 16 of such Act.
"(B) Reduce the rate of interest charged on such loan to a rate
of not less than 1 percent.
"(C) Increase the term of such loan to a term that does not
exceed the remaining term of the mortgage on such project.
"(D) Increase the amount of assistance to be provided by the
owner of such project under subsection (k)(2), if applicable, to
an amount not to exceed 30 percent of the total estimated cost of
the capital improvements involved.".
(h) CONFORMING AMENDMENT. -- The section heading for section 201 of
the Housing and Community Development Amendments of 1978 "12 USC
1715z-1a" is amended by striking "OPERATING".
SEC. 186. FLEXIBLE SUBSIDY PROGRAM.
(a) USE OF SECTION 236 EXCESS RENTAL CHARGES. -- Section 236(f)(3)
of the National Housing Act "12 USC 1715z-1" is amended by striking
"September 30, 1985" and inserting "September 30, 1989".
(b) ASSISTANCE FOR CERTAIN HOUSING PROJECTS FOR ELDERLY OR
HANDICAPPED FAMILIES. --
(1) Section 201(a) of the Housing and Community Development
Amendments of 1978 is amended by inserting "the Housing Act of
1959," after "1937,".
(2) Section 201(c)(1)(A) of the Housing and Community
Development Amendments of 1978 is amended by inserting before the
semicolon at the end the following: ", or received a loan under
section 202 of the Housing Act of 1959 more than 15 years before
the date on which assistance is made available under this
section".
SEC. 201. "12 USC 1715l note" SHORT TITLE.
This title may be cited as the "Emergency Low Income Housing
Preservation Act of 1987".
SEC. 202. "12 USC 1715l note" FINDINGS AND PURPOSE.
(a) FINDINGS. -- The Congress finds that --
(1) in the next 15 years, more than 330,000 low income housing
units insured or assisted under sections 221(d)(3) and 236 of the
National Housing Act could be lost as a result of the termination
of low income affordability restrictions;
(2) in the next decade, more than 465,000 low income housing
units produced with assistance under section 8 of the United
States Housing Act of 1937 could be lost as a result of the
expiration of the rental assistance contracts;
(3) some 150,000 units of rural low income housing financed
under section 515 of the Housing Act of 1949 are threatened with
loss as a result of the prepayment of mortgages by owners;
(4) the loss of this privately owned and federally assisted
housing, which would occur in a period of sharply rising rents on
unassisted housing and extremely low production of additional low
rent housing, would inflict unacceptable harm on current tenants
and would precipitate a grave national crisis in the supply of low
income housing that was neither anticipated nor intended when
contracts for these units were entered into;
(5) the loss of this affordable housing, to encourage the
production of which the public has provided substantial benefits
over past years, would irreparably damage hard-won progress toward
such important and long-established national objectives as --
(A) providing a more adequate supply of decent, safe, and
sanitary housing that is affordable to low income Americans;
(B) increasing the supply of housing affordable to low income
Americans that is accessible to employment opportunities; and
(C) expanding housing opportunities for all Americans,
particularly members of disadvantaged minorities;
(6) the provision of an adequate supply of low income housing
has depended and will continue to depend upon a strong, long-term
partnership between the public and private sectors that
accommodates a fair return on investment;
(7) recent reductions in Federal housing assistance and tax
benefits related to low income housing have increased the
incentives for private industry to withdraw from the production
and management of low income housing;
(8) efforts to retain this housing must take account of
specific financial and market conditions that differ markedly from
project to project;
(9) a major review of alternative responses to this threatened
loss of affordable housing is now being undertaken by numerous
private sector task forces as well as State and local
oganizations; and
(10) until the Congress can act on recommendations that will
emerge from this review, interim measures are needed to avoid the
irreplaceable loss of low income housing and irrevocable
displacement of current tenants.
(b) PURPOSE. -- It is the purpose of this title --
(1) to preserve and retain to the maximum extent practicable as
housing affordable to low income families or persons those
privately owned dwelling units that were produced for such purpose
with Federal assistance;
(2) to minimize the involuntary displacement of tenants
currently residing in such housing; and
(3) to continue the partnership between all levels of
government and the private sector in the production and operation
of housing that is affordable to low income Americans.
SEC. 203. "12 USC 1715l note" TERMINATION OF CERTAIN PROVISIONS.
(a) IN GENERAL. -- Effective upon the expiration of the 2-year
period beginning on the date of the enactment of this Act --
(1) subtitles B and D are repealed; and
(2) each provision of law amended by subtitle B or D is amended
to read as it would without such amendment.
(b) SAVINGS PROVISION. -- The repeal or amendment of any provision
under subsection (a) shall have no effect on any action taken or
authorized under the provision prior to such repeal or amendment.
SEC. 221. "12 USC 1715l note" GENERAL PREPAYMENT LIMITATION.
(a) PRIOR APPROVAL OF PLAN OF ACTION. -- An owner of eligible low
income housing may prepay, and a mortgagee may accept prepayment of, a
mortgage on such housing only in accordance with a plan of action
approved by the Secretary of Housing and Urban Development under this
subtitle.
(b) ALTERNATIVE PREPAYMENT MORATORIUM. -- In the event any court of
the United States or any State invalidates the requirements established
in this subtitle, an owner of eligible low income housing located in the
geographic area subject to the jurisdiction of such court may not
prepay, and a mortgagee may not accept prepayment of, a mortgage on such
housing during the 2-year period following the date of such
invalidation.
SEC. 222. "12 USC 1715l note" NOTICE OF INTENT.
An owner of eligible low income housing seeking to initiate
prepayment or other changes in the status or terms of the mortgage or
regulatory agreement shall file with the Secretary a notice of the
intent of the owner in such form and manner as the Secretary shall
prescribe. The owner shall simultaneously file the notice or intent
with any appropriate State or local government agency for the
jurisdiction within which the housing is located.
SEC. 223. "12 USC 1715l note" PLAN OF ACTION.
(a) PREPARATION AND SUBMISSION. -- Upon receipt of a notice of
intent, the Secretary shall provide the owner with such information as
the owner needs to prepare a plan of action, which information shall
include a description of the Federal incentives authorized under this
title. The owner shall submit the plan of action to the Secretary in
such form and manner as the Secretary shall prescribe. The owner may
simultaneously submit the plan of action to any appropriate State or
local government agency for the jurisdiction within which the housing is
located, which agency shall, in reviewing the plan, consult with
representatives of the tenants of the housing.
(b) CONTENTS. -- The plan of action shall include --
(1) a description of any proposed changes in the status or
terms of the mortgage or regulatory agreement, which may include a
request for incentives to extend the low income use of the
housing;
(2) a description of any assistance that could be provided by
State or local government agencies, as determined by prior
consultation between the owner and any appropriate State or local
agencies;
(3) a description of any proposed changes in the low income
affordability restrictions;
(4) a description of any change in ownership that is related to
prepayment;
(5) an assessment of the effect of the proposed changes on
existing tenants;
(6) a statement of the effect of the proposed changes on the
supply of housing affordable to lower and very low income families
or persons in the community within which the housing is located
and in the area that the housing could reasonably be expected to
serve; and
(7) any other information that the Secretary determines is
necessary to achieve the purposes of this title.
(c) REVISIONS. -- The owner may from time to time revise and amend
the plan of action as may be necessary to obtain approval of the plan
under this subtitle.
SEC. 224. "12 USC 1715l note" INCENTIVES TO EXTEND LOW INCOME USE.
(a) AGREEMENTS BY SECRETARY. -- After receiving a plan of action
from an owner of eligible low income lousing, the Secretary may enter
into such agreements as are necessary to satisfy the criteria for
approval under section 225.
(b) PERMISSIBLE INCENTIVES. -- Such agreements may include one or
more of the following incentives that the Secretary, after taking into
account local market conditions, determines to be necessary to achieve
the purposes of this title:
(1) An increase in the allowable distribution or other measures
to increase the rate of return on investment.
(2) Revisions to the method of calculating equity.
(3) Increased access to residual receipts accounts or excess
replacement reserves.
(4) Provision of insurance for a second mortgage under section
241(f) of the National Housing Act.
(5) An increase in the rents permitted under an existing
contract under section 8 of the United States Housing Act of 1937,
or (subject to the availability of amounts provided in
appropriation Acts) additional assistance under such section 8 or
an extension of any project-based assistance attached to the
housing.
(6) Financing of capital improvements under section 201 of the
Housing and Community Development Amendments of 1978.
(7) Other actions, authorized in other provisions of law, to
facilitate a transfer or sale of the project to a qualified
nonprofit organization, limited equity tenant cooperative, public
agency, or other entity acceptable to the Secretary.
(8) Other incentives authorized in law.
SEC. 225. "12 USC 1715l note" CRITERIA FOR APPROVAL OF PLAN OF
ACTION.
(a) PLAN OF ACTION INVOLVING TERMINATION OF LOW INCOME AFFORDABILITY
RESTRICTIONS. -- The Secretary may approve a plan of action that
involves termination of the low income affordability restrictions only
upon a written finding that --
(1) implementation of the plan of action will not materially
increase economic hardship for current tenants or involuntarily
displace current tenants (except for good cause) where comparable
and affordable housing is not readily available; and
(2)(A) the supply of vacant, comparable housing is sufficient
to ensure that such prepayment will not materially affect --
(i) the availability of decent, safe, and sanitary housing
affordable to lower income and very low-income families or persons
in the area that the housing could reasonably be expected to
serve;
(ii) the ability of lower income and very low-income families
or persons to find affordable, decent, safe, and sanitary housing
near employment opportunities; or
(iii) the housing opportunities of minorities in the community
within which the housing is located; or
(B) the plan has been approved by the appropriate State agency
and any appropriate local government agency for the jurisdiction
within which the housing is located as being in accordance with a
State strategy approved by the Secretary under section 226.
(b) PLAN OF ACTION INCLUDING INCENTIVES. -- The Secretary may
approve a plan of action that includes incentives only upon finding that
--
(1) the package of incentives is necessary to provide a fair
return on the investment of the owner;
(2) due diligence has been given to ensuring that the package
of incentives is, for the Federal Government, the least costly
alternative that is consistent with the full achievement of the
purposes of this title; and
(3) binding commitments have been made to ensure that --
(A) the housing will be retained as housing affordable for very
low-income families or persons, lower income families or persons,
and moderate income families or persons for the remaining term of
the mortgage;
(B) throughout such period, adequate expenditures will be made
for maintenance and operation of the housing;
(C) current tenants shall not be involuntarily displaced
(except for good cause);
(D) any increase in rent contributions for current tenants
shall be to a level that does not exceed 30 percent of the
adjusted income of the tenant or the fair market rent for
comparable housing under section 8(b) of the United States Housing
Act of 1937, whichever is lower;
(E)(i) any resulting increase in rents for current tenants
(except for increases made necessary by increased operating costs)
--
(I) shall be phased in equally over a period of not less than 3
years, if such increase is 30 percent or more; and
(II) shall be limited to not more than 10 percent per year if
such increase is more than 10 percent but less than 30 percent;
and
(ii) assistance under section 8 of the United States Housing
Act of 1937 shall be provided if necessary to mitigate any adverse
affect on current income eligible tenants; and
(F)(i) rents for units becoming available to new tenants shall
be at levels approved by the Secretary that will ensure, to the
extent practicable, that the units will be available and
affordable to the same proportions of very low-income families or
persons, lower income families or persons, and moderate income
families or persons (including families or persons whose incomes
are 95 percent or more of area median income) as resided in the
housing as of January 1, 1987; and
(ii) in approving rents under this paragraph, the Secretary
shall take into account any additional incentives provided under
this subtitle and shall make provision for such annual rent
adjustments as may be made necessary by future reasonable
increases in operating costs.
SEC. 226. "12 USC 1715l note" ALTERNATIVE STATE STRATEGY.
(a) CRITERIA FOR APPROVAL. -- The Secretary may approve a State
strategy for purposes of section 225(a) only upon finding that it is a
practicable statewide strategy that ensures at a minimum that --
(1) current tenants will not be involuntarily displaced (except
for good cause);
(2) housing opportunities for minorities will not be adversely
affected in the communities within which the housing is located;
(3) any increase in rent for current tenants shall be to a
level that does not exceed 30 percent of the adjusted income of
the tenants or the fair market rent for comparable housing under
section 8(b) of the United States Housing Act of 1937, whichever
is lower, except that any increase not necessitated by increased
operating costs shall be phased in equally over not less than 3
years if such increase exceeds 10 percent;
(4) housing approved under the State strategy will remain
affordable to very low-income, lower income or moderate income
families and persons for not less than the remaining term of the
original mortgage, if the housing is to be made available for
rental, or for not less than 40 years, if the housing is to be
made available for homeownership;
(5)(A) not less than 80 of all units in eligible low income
housing approved under the State strategy shall be retained as
affordable to families or persons meeting the income eligibility
standards for initial occupancy that applies to the housing on
January 1, 1987; and
(B) not less than 60 percent of the units in any one project
shall remain available and affordable to such families or persons,
within which not less than 20 percent of the units shall remain
available and affordable to very low income families or persons as
determined by the Secretary with adjustments for smaller and
larger families;
(6) expenditures for rehabilitation, maintenance and operation
shall be at a level necessary to maintain the housing as decent,
safe and sanitary for the period specified in paragraph (4);
(7) not less than 25 percent of new assistance required to
maintain low income affordability in accordance with this section
shall be provided through State and local actions, such as tax
exempt financing, low-income tax credits, State or local tax
concessions, and other incentives provided by the State or local
governments; and
(8) for each unit of eligible low income housing approved under
the State strategy that is not retained as affordable to families
or persons meeting the income eligibility standards for initial
occupancy on January 1, 1987, the State will provide with State
funds 1 additional unit of comparable housing in the same market
area that is available and affordable to such families or persons,
and such units or funds shall be made available before the
Secretary approves the State strategy.
(b) ADDITIONAL REQUIREMENTS. --
(1) The Secretary may not approve a State strategy until the
State has entered into all of the agreements necessary to carry
out the strategy.
(2) Each State strategy shall include any other provision that
the Secretary determines to be necessary to implement an approved
State strategy.
(c) IMPLEMENTATION AGREEMENTS. -- The Secretary may enter into such
agreements as are necessary to implement an approved State strategy,
which agreements may include incentives that are authorized in other
provisions of this subtitle.
SEC. 227. "12 USC 1715l note" TIMETABLE FOR APPROVAL OF PLAN OF
ACTION.
(a) NOTIFICATION OF DEFICIENCIES. -- Not later than 60 days after
receipt of a plan of action, the Secretary shall notify the owner in
writing of any deficiencies that prevent the plan of action from being
approved. If deficiencies are found, such notice shall describe
alternative ways in which the plan could be revised to meet the criteria
for approval.
(b) NOTIFICATION OF APPROVAL. --
(1) IN GENERAL. -- Not later than 180 days after receipt of a
plan of action, or such longer period as the owner requests, the
Secretary shall notify the owner in writing whether the plan of
action, including any revisions, is approved. If approval is
withheld, the notice shall describe --
(A) the reasons for withholding approval; and
(B) the actions that could be taken to meet the criteria for
approval.
(2) OPPORTUNITY TO REVISE. -- The Secretary shall subsequently
give the owner a reasonable opportunity to revise the plan of
action and seek approval.
SEC. 228. "12 USC 1715l note" MODIFICATION OF EXISTING REGULATORY
AGREEMENTS.
(a) IN GENERAL. -- If a plan of action cannot be approved within 300
days after a plan of action is submitted, the Secretary may, upon the
request of the owner, modify existing regulatory agreements to --
(1) prevent involuntary displacement of current tenants (except
for good cause);
(2) ensure that adequate expenditures will be made for
maintenance and operation of the housing;
(3) extend any expiring project-based assistance on the housing
for the term of the agreement;
(4) permit an increase in the allowable distribution that could
be accommodated by a rise in rents on occupied units to rise to a
level no higher than 30 percent of the adjusted income of the
current tenants, as determined by the Secretary, except that rents
shall not exceed the fair market rent for comparable housing under
section 8(b) of the United States Housing Act of 1937 and any
resulting increase in rents for current tenants shall be phased in
equally over a period of no less than 3 years unless such increase
is less than 10 percent; and
(5) to ensure that units becoming vacant during the term of the
agreement are made available in accordance with section 225(b)(6).
(b) EXPIRATION. -- Agreements entered into under this section shall
expire upon the expiration of the 4-year period beginning on the date of
the enactment of this Act. Upon the expiration of the agreements, the
housing covered by the agreements shall be subject to any law then
affecting low income affordability restrictions.
SEC. 229. "12 USC 1715l note" CONSULTATIONS WITH OTHER INTERESTED
PARTIES.
The Secretary shall confer with any appropriate State or local
government agency to confirm any State or local assistance that is
available to achieve the purposes of this title and shall give
consideration to the views of any such agency when making determinations
under section 225. The Secretary shall also confer with appropriate
interested parties that the Secretary believes could assist in the
development of a plan of action that best achieves the purposes of this
title.
SEC. 230. "12 USC 1715l note" RIGHT OF CONVERSION TO ALTERNATIVE
PREPAYMENT SYSTEM.
Any agreement to extend low income affordability restrictions under
section 225(b) shall, for 4 years from the date of the enactment of this
Act, provide the owner the right to convert to any system of incentives
and restrictions provided in law during such period, with such
adjustments as the Secretary determines are appropriate to compensate
for the value of any benefits the owner had received under this title.
SEC. 231. INSURANCE FOR SECOND MORTGAGE FINANCING.
Section 241 of the National Housing Act "12 USC 1715z-6" is amended
by adding at the end the following new subsection:
"(f)(1) Notwithstanding any other provision of this section, the
Secretary may, upon such terms and conditions as the Secretary may
prescribe, make a commitment to insure and insure equity loans made by
financial institutions approved by the Secretary. For purposes of this
section, the term 'equity loan' means a loan or advance of credit to the
owner of eligible low income housing (as defined in section 233 of the
Emergency Low Income Housing Preservation Act of 1987) that is made for
the purpose of implementing a plan of action approved under such Act.
"(2) To be eligible for insurance under this subsection, an equity
loan shall --
"(A) be limited to an amount equal to 90 percent of the value
of the equity in the project, as determined by the Secretary, and
the Secretary, in making the determination, shall take into
account that rental income for the project may rise within limits
established by section 225(b) of the Emergency Low Income Housing
Preservation Act of 1987;
"(B) have a maturity and provisions for amortization
satisfactory to the Secretary, bear interest at such rate as may
be agreed upon by the mortgagor and mortgagee, and be secured in
such manner as the Secretary may require; and
"(C) contain such other terms, conditions, and restrictions as
the Secretary may prescribe, including phased advances of equity
loan proceeds to reflect project rent levels.
"(3) A qualified nonprofit organization or limited equity tenant
cooperative corporation, when purchasing an otherwise eligible project,
may constitute an owner of eligible low income housing for purposes of
receiving a loan insured under this subsection.
"(4) The provisions of subsections (d), (e), (g), (h), (j), (k), (l),
and (n) of section 207 shall be applicable to loans insured under this
section, except that --
"(A) all references to the term 'mortgage' shall be construed
to refer to the term 'loan' as used in this subsection;
"(B) loans involving projects covered by a mortgage insured
under section 236 shall be insured under and shall be the
obligation of the Special Risk Insurance Fund; and
"(C) with respect to any sale under foreclosure of a mortgage
on the project that is senior to the equity loan insured under
this subsection and when the equity loan is secured by a mortgage,
the Secretary may --
"(i) issue regulations providing that, in order to receive
insurance benefits, the insured mortgagee shall either assign the
equity loan to the Secretary or bid the amount necessary to
acquire the project and convey title to the project to the
Secretary, in which case the insurance benefits paid by the
Secretary shall include the amount bid by the mortgagee to satisfy
the senior mortgage at the foreclosure sale; and
"(ii) if the equity loan has been assigned to the Secretary,
bid, in addition to amounts authorized under section 207(k), any
sum not in excess of the total unpaid indebtedness secured by such
senior mortgage and the equity loan, plus taxes, insurance,
foreclosure costs, fees, and other expenses.
"(5) A mortgagee approved by the Secretary may not withhold consent
to an equity loan on a property on which that mortgagee holds a
mortgage.".
SEC. 232. "12 USC 1715l note" REPORT TO CONGRESS.
Not later than 1 year after the date of the enactment of this Act,
the Secretary shall submit to the Congress a report setting forth the
activities carried out under this subtitle. The report shall include a
description of the plans of action approved under subsections (a) and
(b) of section 225 and an analysis of the extent to which the plans
retain housing affordable for very low-income families or persons, lower
income families or persons, and moderate income families or persons.
SEC. 233. "12 USC 1715l note" DEFINITIONS.
For purposes of this subtitle:
(1) The term "eligible low income housing" means any housing
financed by a loan or mortgage --
(A) that is --
(i) inisured or held by the Secretary under section 221(d)(3)
of the National Housing Act and assisted under section 101 of the
Housing and Urban Development Act of 1965 or section 8 of the
United States Housing Act of 1937;
(ii) insured or held by the Secretary and bears interest at a
rate determined under the proviso of section 221(d)(5) of the
National Housing Act;
(iii) insured, assisted, or held by the Secretary under section
236 of the National Housing Act; or
(iv) held by the Secretary and formerly insured under a program
referred to in clause (i), (ii), or (iii); and
(B) that, under regulation or contract in effect before the
date of the enactment of this Act, is or will be within 1 year
become eligible for prepayment without prior approval of the
Secretary.
(2) The term "low income affordability restrictions" means
limits imposed by regulation or regulatory agreement on tenant
rents, rent contributions, or income eligibility in eligible low
income housing.
(3) The terms "lower income families or persons" and "very
low-income families or persons" mean families or persons whose
incomes do not exceed the respective levels established for lower
income families and very low-income families under section 3(b)(2)
of the United States Housing Act of 1937.
(4) The term "moderate income families or persons" means
families or persons whose incomes are between 80 percent and 95
percent of median income for the area, as determined by the
Secretary with adjustments for smaller and larger families.
(5) The term "owner" means the current or subsequent owner or
owners of eligible low income housing.
(6) The term "Secretary" means the Secretary of Housing and
Urban Development.
(7) The term "termination of low income affordability
restrictions" means any elimination or relaxation of low income
affordability restrictions (other than those permitted under an
approved plan of action under section 225(b)).
SEC. 234. "12 USC 1715l note" REGULATIONS.
The Secretary shall issue final regulations to carry out this
subtitle not later than 60 days after the date of the enactment of this
Act. The Secretary shall provide for the regulations to take effect not
later than 45 days after the date on which the regulations are issued.
SEC. 235. "12 USC 1715l note" EFFECTIVE DATE.
The requirements of this subtitle shall apply to any project that is
eligible low income housing on or after November 1, 1987.
SEC. 241. PREPAYMENT AND REFINANCING PROCEDURES.
Section 502(c) of the Housing Act of 1949 "42 USC 1472" is amended by
adding at the end the following new paragraphs:
"(3) NOTICE OF OFFER TO PREPAY. -- Not less than 30 days after
receiving an offer to prepay any loan made or insured under section 514
or 515, the Secretary shall provide written notice of the offer or
request to the tenants of the housing and related facilities involved,
to interested nonprofit organizations, and to any appropriate State and
local agencies.
"(4)(A) AGREEMENT BY BORROWER TO EXTEND LOW INCOME USE. -- Before
accepting any offer to prepay, or requesting refinancing in accordance
with subsection (b)(3) of, any loan made or insured under section 514 or
515 pursuant to a contract entered into before December 21, 1979, the
Secretary shall make reasonable efforts to enter into an agreement with
the borrower under which the borrower will make a binding commitment to
extend the low income use of the assisted housing and related facilities
involved for not less than the 20-year period beginning on the date on
which the agreement is executed.
"(B) ASSISTANCE AVAILABLE TO BORROWER TO EXTEND LOW INCOME USE. --
To the extent of amounts provided in appropriation Acts, the agreement
under subparagraph (A) may provide for 1 or more of the following forms
of assistance that the Secretary, after taking into account local market
conditions, determines to be necessary to extend the low income use of
the housing and related facilities involved:
"(i) Increase in the rate of return on investment.
"(ii) Reduction of the interest rate on the loan through the
provision of interest credits under section 621(a)(1)(B).
"(iii) Additional rental assistance, or an increase in
assistance provided under existing contracts, under section
521(a)(2) or under section 8 of the United States Housing Act of
1937.
"(iv) An equity loan to the borrower under paragraphs (7) and
(8) of section 515(b).
"(v) Incremental rental assistance in connection with loans
under clauses (ii) and (iv) to the extent necessary to avoid
increases in the rental payments of current tenants not receiving
rental assistance under section 521(a)(2) or under section 8 of
the United States Housing Act of 1937.
"(C) APPROVAL OF ASSISTANCE. -- The Secretary may approve assistance
under subparagraph (B) only if the Secretary determines that the
combination of assistance provided --
"(i) is necessary to provide a fair return on the investment of
the borrower; and
"(ii) is the least costly alternative for the Federal
Government that is consistent with carrying out the purposes of
this subsection.
"(5)(A) OFFER TO SELL TO NONPROFIT ORGANIZATIONS AND PUBLIC AGENCIES.
--
"(i) IN GENERAL. -- If the Secretary determines after a
reasonable period that an agreement will not be entered into with
a borrower under paragraph (4), the Secretary shall require the
borrower (except as provided in subparagraph (G)) to offer to sell
the assisted housing and related facilities involved to any
qualified nonprofit organization or public agency at a fair market
value determined by 2 independent appraisers, one of whom shall be
selected by the Secretary and one of whom shall be selected by the
borrower. If the 2 appraisers fail to agree on the fair market
value, the Secretary and the borrower shall jointly select a third
appraiser, whose appraisal shall be binding on the Secretary and
the borrower.
"(ii) PERIOD FOR WHICH REQUIREMENT IS APPLICABLE. -- If, upon
the expiration of 180 days after an offer is made to sell housing
and related facilities under clause (i), no qualified nonprofit
organization or public agency has made a bona fide offer to
purchase, the Secretary may accept the offer to prepay, or may
request refinancing in accordance with subsection (b)(3) of, the
loan. This clause shall apply only when funds are available for
purposes of carrying out a transfer under this paragraph.
"(B) QUALIFIED NONPROFIT ORGANIZATIONS AND PUBLIC AGENCIES. --
"(i) LOCAL NONPROFIT ORGANIZATION OR PUBLIC AGENCY. -- A local
nonprofit organization or public agency may purchase housing and
related facilities under this paragraph only if --
"(I) the organization or agency is determined by the Secretary
to be capable of managing the housing and related facilities
(either directly or through a contract) for the remaining useful
life of the housing and related facilities; and
"(II) the organization or agency has entered into an agreement
that obligates it (and successors in interest thereof) to maintain
the housing and related facilities as affordable for very
low-income families or persons and low income families or persons
for the remaining useful life of the housing and related
facilities.
"(ii) NATIONAL OR REGIONAL NONPROFIT ORGANIZATION. -- If the
Secretary determines that there is no local nonprofit organization
or public agency qualified to purchase the housing and related
facilities involved, the Secretary shall require the borrower to
offer to sell the assisted housing and related facilities to an
existing qualified national or regional nonprofit organization.
"(C) FINANCING OF SALE. -- To facilitate the sale described in
subparagraph (A), the Secretary shall --
"(i) to the extent provided in appropriation Acts, make an
advance to the nonprofit organization or public agency whose offer
to purchase is accepted under this paragraph to cover any direct
costs (other than the purchase price) incurred by the organization
or agency in purchasing and assuming responsibility for the
housing and related facilities involved;
"(ii) approve the assumption, by the nonprofit organization or
public agency involved, of the loan made or insured under section
514 or 515;
"(iii) to the extent provided in appropriation Acts, transfer
any rental assistance payments that are received under section
521(a)(2)(A), or under section 8 of the United States Housing Act
of 1937, with respect to the housing and related facilities
involved; and
"(iv) to the extent provided in appropriation Acts, provide a
loan under section 515(c)(3) to the nonprofit organization or
public agency whose offer to purchase is accepted under this
paragraph to enable the organization or agency to purchase the
housing and related facilities involved.
"(D) RENT LIMITATION AND ASSISTANCE. -- The Secretary shall, to the
extent provided in appropriation Acts, provide to each nonprofit
organization or public agency purchasing housing and related facilities
under this paragraph financial assistance (in the form of monthly
payments or forgiveness of debt) in an amount necessary to ensure that
the monthly rent payment made by each low income family or person
residing in the housing does not exceed the maximum rent permitted under
section 521(a)(2)(A).
"(E) RESTRICTION ON SUBSEQUENT TRANSFERS. -- Except as provided in
subparagraph (B)(ii), the Secretary may not approve the transfer of any
housing and related facilities purchased under this paragraph during the
remaining useful life of the housing and related facilities, unless the
Secretary determines that --
"(i) the transfer will further the provision of housing and
related facilities for low income families or persons; or
"(ii) there is no longer a need for such housing and related
facilities by low income families or persons.
"(F) GENERAL RESTRICTION ON PREPAYMENTS AND REFINANCINGS. --
Following the transfer of the maximum number of dwelling units set forth
in subparagraph (H)(i) in any fiscal year or the maximum number of
dwelling units for which budget authority is available in any fiscal
year, the Secretary may not accept in such fiscal year any offer to
prepay, or request refinancing in accordance with subsection (b)(3) of,
any loan made or insured under section 514 or 515 pursuant to a contract
entered into before December 21, 1979, except in accordance with
subparagraph (G). The limitation established in this subparagraph shall
not apply to an offer to prepay, or request to refinance, if, following
the date on which such offer or request is made (or following the date
of the enactment of the Housing and Community Development Act of 1987,
whichever occurs later) a 15-month period expires during which no budget
authority is available to carry out this paragraph. For purposes of
this subparagraph, the Secretary shall allocate budget authority under
this paragraph in the order in which offers to prepay, or request to
refinance, are made.
"(G) EXCEPTION. -- This paragraph shall not apply to any offer to
prepay, or any request to refinance in accordance with subsection
(b)(3), any loan made or insured under section 514 or 515 pursuant to a
contract entered into before December 21, 1979, if --
"(i) the borrower enters into an agreement with the Secretary
that obligates the borrower (and successors in interest thereof,
--
"(I) to utilize the assisted housing and related facilities for
the purposes specified in section 514 or 515, as the case may be,
for a period determined by the Secretary (but not less than the
period described in paragraph (1)(B) calculated from the date on
which the loan is made or insured); and
"(II) upon termination of the period described in paragraph
(1)(B), to offer to sell the assisted housing and related
facilities to a qualified nonprofit organization or public agency
in accordance with this paragraph; or
"(ii) the Secretary determines that housing opportunities of
minorities will not be materially affected as a result of the
prepayment or refinancing; and that --
"(I) the borrower (and any successor in interest thereof) are
obligated to ensure that tenants of the housing and related
facilities financed with the loan will not be displaced due to a
change in the use of the housing, or to an increase in rental or
other charges, as a result of the prepayment or refinancing; or
"(II) there is an adequate supply of safe, decent, and
affordable rental housing within the market area of the housing
and related facilities and sufficient actions have been taken to
ensure that the rental housing will be made available to each
tenant upon displacement.
"(H) FUNDING. --
"(i) BUDGET LIMITATION. -- Not more than 5,000 dwelling units
may be transferred under this paragraph in any fiscal year, and
the budget authority that may be provided under this paragraph for
any fiscal year may not exceed the amounts required to carry out
this paragraph with respect to such number.
"(ii) REIMBURSEMENT OF RURAL HOUSING INSURANCE FUND. -- There
are authorized to be appropriated to the Rural Housing Insurance
Fund such sums as may be necessary to reimburse the Fund for
financial assistance provided under this paragraph, paragraph (4),
and section 517(j)(7).
"(I) DEFINITION. -- For purposes of this paragraph, the term
'nonprofit organization' means any private organization --
"(i) no part of the net earnings of which inures to the benefit
of any member, founder, contributor, or individual; and
"(ii) that is approved by the Secretary as to financial
responsibility.
"(J) REGULATIONS. -- Notwithstanding section 534, the Secretary
shall issue final regulations to carry out this paragraph not later than
60 days after the date of the enactment of the Housing and Community
Development Act of 1987. The Secretary shall provide for the
regulations to take effect not later than 45 days after the date on
which the regulations are issued.".
SEC. 242. EQUITY RECAPTURE LOANS AND LOANS TO NONPROFIT
ORGANIZATIONS AND PUBLIC AGENCIES.
Section 515 of the Housing Act of 1949 "42 USC 1485" is amended --
(1) by redesignating subsections (c) through (p) as subsections
(d) through (q), respectively; and
(2) by inserting after subsection (b) the following:
"(c) With respect to a loan made or insured under subsection (a) or
(b), the Secretary is authorized to --
"(1) make or insure an equity loan in the form of a
supplemental loan for the purpose of equity takeout to the owner
of housing financed with a loan made or insured under this section
pursuant to a contract entered into before December 21, 1979, for
the purpose of extending the affordability of the housing for low
income families or persons and very low-income families or persons
for not less than 20 years, except that such loan may not exceed
90 percent of the value of the equity in the project as determined
by the Secretary;
"(2) transfer and reamortize an existing loan in connection
with assistance provided under paragraph (1); and
"(3) make or insure a loan to enable a nonprofit organization
or public agency to make a purchase described in section
502(c)(5).".
SEC. 243. USE OF RURAL HOUSING INSURANCE FUND.
Section 517(j) of the Housing Act of 1949 "42 USC 1487" is amended --
(1) by striking "and" at the end of paragraph (5);
(2) by striking the period at the end of paragraph (6) and
inserting "; and"; and
(3) by adding at the end the following new paragraph:
"(7) to provide advances and assistance required to carry out
paragraphs (4) and (5) of section 502(c).".
SEC. 261. EARLY PREPAYMENT.
Section 250(a)(1) of the National Housing Act "12 USC 1715z-15" is
amended by striking "or" and all that follows through "needs" the last
place it appears.
SEC. 262. SECTION 8 ASSISTANCE.
(a) REQUIRED NOTICE. -- Section 8(c) of the United States Housing
Act "42 USC 1437f" of 1937 is amended by adding at the end the following
new paragraph:
"(9) Not less than 1 year prior to terminating any contract under
which assistance payments are received under this section (but not less
than 90 days in the case of housing certificates or vouchers under
subsection (b) or (o)), an owner shall provide written notice to the
Secretary and the tenants involved of the proposed termination,
specifying the reasons for the termination with sufficient detail to
enable the Secretary to evaluate whether the termination is lawful and
whether there are additional actions that can be taken by the Secretary
to avoid the termination. The Secretary shall review the owner's
notice, shall consider whether there are additional actions that can be
taken by the Secretary to avoid the termination, and shall ensure a
proper adjustment of the contract rents for the project in conformity
with the requirements of paragraph (2). The Secretary shall issue a
written finding of the legality of the termination and the reasons for
the termination, including the actions considered or taken to avoid the
termination. For purposes of this paragraph, the term 'termination'
means the expiration of the assistance contract or an owner's refusal to
renew the assistance contract.".
(b) ADJUSTMENT OF ALLOWABLE RENT. -- Section 8(c) of the United
States Housing Act of 1937 (as amended by subsection (a) of this
section) is further amended by adding at the end the following new
paragraph:
"(10) If an owner provides notice of proposed termination under
paragraph (9) and the contract rent is lower than the maximum monthly
rent for units assisted under subsection (b)(1), the Secretary shall
adjust the contract rent based on the maximum monthly rent for units
assisted under subsection (b)(1) and the value of the lower income
housing after rehabilitation.".
(c) LOAN MANAGEMENT AND PROPERTY DISPOSITION PROGRAMS. -- Section 8
of the United States Housing Act of 1937 (as amended by section 149 of
this Act) is further amended by adding at the end the following new
subsection:
"(v)(1) Each contract entered into by the Secretary under this
section for loan management assistance shall be for a term of 180
months.
"(2) The Secretary shall extend any expiring contract entered into
under this section for loan management assistance or execute a new
contract, if the owner agrees to continue providing housing for lower
income families during the term of the contract.".
SEC. 263. SECTION 515 OPERATING RESERVE AND EQUITY CONTRIBUTION
REQUIREMENTS.
Section 515 of the Housing Act of 1949 (as amended by section 242) is
further amended by adding at the end the following new subsection:
"(r) The Secretary --
"(1) may require that the initial operating reserve under this
section may be in the form of an irrevocable letter of credit;
and
"(2) may not require more than a 3 percent contribution to
equity.".
SEC. 301. PROGRAM AUTHORIZATIONS.
(a) INSURANCE AND GUARANTEE AUTHORITY. -- Section 513(a)(1) of the
Housing Act of 1949 "42 USC 1483" is amended to read as follows:
"(a)(1) The Secretary may, to the extent approved in appropriation
Acts, insure and guarantee loans under this title during fiscal years
1988 and 1989 in aggregate amounts not to exceed $1,775,395,000 and
$1,794,925,000, respectively, as follows:
"(A) For insured or guaranteed loans under section 502 on
behalf of borrowers receiving assistance under section 521(a)(1)
or receiving guaranteed loans pursuant to section 304 of the
Housing and Community Development Act of 1987, $1,104,000,000 for
fiscal year 1988 and $1,116,144,000 for fiscal year 1989.
"(B) For loans under section 504, $11,335,000 for fiscal year
1988 and $11,460,000 for fiscal year 1989.
"(C) For insured loans under section 514, $11,485,000 for
fiscal year 1988 and $11,612,000 for fiscal year 1989.
"(D) For insured loans under section 515, $647,000,000 for
fiscal year 1988 and $654,117,000 for fiscal year 1989.
"(E) For loans under section 523(b)(1)(B) $1,000,000 for fiscal
year 1988 and $1,011,000 for fiscal year 1989.
"(F) For site loans under section 524, $575,000 for fiscal year
1988 and $581,000 for fiscal year 1989.".
(b) AUTHORIZATION OF APPROPRIATIONS. -- Section 513(b) of the
Housing Act of 1949 "42 USC 1483" is amended to read as follows:
"(b) There are authorized to be appropriated for fiscal years 1988
and 1989, and to remain available until expended, the following amounts:
"(1) For grants under section 504, $13,113,000 for fiscal year
1988 and $13,362,000 for fiscal year 1989.
"(2) For purposes of section 509(c), $713,000 for fiscal year
1988 and $727,000 for fiscal year 1989.
"(3) Such sums as may be necessary to meet payments on notes or
other obligations issued by the Secretary under section 511 equal
to --
"(A) the aggregate of the contributions made by the Secretary
in the form of credits on principal due on loans made pursuant to
section 503; and
"(B) the interest due on a similar sum represented by notes or
other obligations issued by the Secretary.
"(4) For financial assistance under section 516, $9,979,000 for
fiscal year 1988 and $10,169,000 for fiscal year 1989.
"(5) For grants under section 523(f), $8,392,000 for fiscal
year 1988 and $8,551,000 for fiscal year 1989.
"(6) For grants under section 533, $20,078,000 for fiscal year
1988 and $20,460,000 for fiscal year 1989.".
(c) RENTAL ASSISTANCE PAYMENT CONTRACTS. -- Section 513(c) of the
Housing Act of 1949 is amended to read as follows:
"(c)(1) The Secretary, to the extent approved in appropriation Acts
for fiscal years 1988 and 1989, may enter into rental assistance payment
contracts under section 521(a)(2)(A) aggregating $275,310,000 for fiscal
year 1988 and $280,000,000 for fiscal year 1989.
"(2) Any authority approved in appropriation Acts for fiscal year
1988 or any succeeding fiscal year for rental assistance payment
contracts under section 521(a)(2)(A) shall be used by the Secretary --
"(A) to renew rental assistance payment contracts that expire
during such fiscal year;
"(B) to provide amounts required to continue rental assistance
payments for the remaining period of an existing contract, in any
case in which the original amount of rental assistance is used
prior to the end of the term of the contract; and
"(C) to make additional rental assistance payment contracts for
existing or newly constructed dwelling units.".
(d) SUPPLEMENTAL RENTAL ASSISTANCE CONTRACTS. -- Section 513 of the
Housing Act of 1949 is amended by adding at the end the following new
subsection:
"(d) The Secretary, to the extent approved in appropriation Acts for
fiscal years 1988 and 1989, may enter into 5-year supplemental rental
assistance contracts under section 502(c)(5)(D) aggregating $26,000,000
for fiscal year 1988 and $27,534,000 for fiscal year 1989.".
(e) RENTAL HOUSING LOAN AUTHORITY. -- Section 515(b)(4) of the
Housing Act of 1949 "42 USC 1485" is amended by striking "March 15,
1988" and inserting "September 30, 1989".
(f) MUTUAL AND SELF-HELP HOUSING GRANT AND LOAN AUTHORITY. --
Section 523(f) of the Housing Act of 1949 "42 USC 1490c" is amended by
striking "March 15, 1988" and inserting "September 30, 1989".
(g) RURAL HOUSING VOUCHER DEMONSTRATION. -- Section 513 of the
Housing Act of 1949 (as amended by subsection (d) of this section) is
further amended by adding at the end the following:
"(e)(1) To such extent or in such amounts as are approved in
appropriation Acts, the Secretary shall carry out a demonstration rural
housing voucher program during fiscal years 1988 and 1989. For such
purpose, the Secretary shall enter into contracts using a payment
standard in accordance with section 8(o) of the United States Housing
Act of 1937 covering up to 7,500 dwelling units located in rural areas
in not more than 5 States during each such fiscal year.
"(2) The Secretary may use the authority conferred by paragraph (1)
in a State only if the State Farmers Home Administration Administrator
certifies that --
"(A) such Administrator has completed an inventory of the
State's housing supply, including housing suitable for
rehabilitation, using currently available data; and
"(B) there is an adequate supply of decent, safe, and sanitary
housing available for occupancy by voucher holders in that State.
"(3) In carrying out the voucher demonstration program under this
subsection, the Secretary shall coordinate activities under this
subsection with activities assisted under sections 515 and 533 of this
title and under section 17 of the United States Housing Act of 1937.
"(4) Funding for the voucher demonstration program under this
subsection shall be from amounts in the Rural Housing Insurance Fund
authorized for loans under sections 502 and section 515 in proportion to
the amounts authorized for such loans. Any reduction in the amounts
available for such loans shall be made from the total amounts available
for such loans in all States.".
SEC. 302. ELIGIBILITY REQUIREMENTS.
(a) RESIDENT ALIENS. -- Section 501 of the Housing Act of 1949 "42
USC 1471" is amended by adding at the end the following new subsection:
"(h)(1) The Secretary may not restrict the availability of assistance
under this title for any alien for whom assistance may not be restricted
by the Secretary of Housing and Urban Development under section 214 of
the Housing and Community Development Act of 1980.
"(2) In carrying out any restriction established by the Secretary on
the availability of assistance under this title for any alien, the
Secretary shall follow procedures comparable to the procedures
established in section 214 of the Housing and Community Development Act
of 1980.".
(b) INCOME LEVELS. --
(1) Section 501(b)(4) of the Housing Act of 1949 is amended by
adding at the end the following new sentence: "Notwithstanding
the preceding sentence, the maximum income levels established for
purposes of this title for such families and persons in the Virgin
Islands shall not be less than the highest such levels established
for purposes of this title for such families and persons in
American Samoa, Guam, the Northern Mariana Islands, and the Trust
Territory of the Pacific Islands.".
(2) The amendment made by paragraph (1) shall be applicable to
any determination of eligibility for assistance under title V of
the Housing Act of 1949 "42 USC 1471 note" made on or after the
date of the enactment of this Act.
SEC. 303. ESCROWING TAXES AND INSURANCE.
Section 501(e) of the Housing Act of 1949 "42 USC 1471" is amended to
read as follows:
"(e) The Secretary shall establish procedures under which borrowers
under this title are required to make periodic payments for the purpose
of taxes, insurance, and other necessary expenses as the Secretary may
deem appropriate. Notwithstanding any other provision of law, such
payments shall not be considered public funds. The Secretary shall
direct the disbursement of the funds at the appropriate time or times
for the purposes for which the funds were escrowed. If the prepayments
made by the borrower are not sufficient to pay the amount due, advances
may be made by the Secretary to pay the costs in full, which advances
shall be charged to the account of the borrower, bear interest, and be
payable in a timely fashion as determined by the Secretary. The
Secretary shall notify a borrower in writing when loan payments are
delinquent.".
SEC. 304. 42 USC 1472 note" RURAL HOUSING GUARANTEED LOAN
DEMONSTRATION.
(a) ESTABLISHMENT OF DEMONSTRATION. -- The Secretary of Agriculture
(referred to in this section as the "Secretary") shall carry out a rural
housing guaranteed loan demonstration program under which the Secretary
shall, to the extent of amounts provided in appropriation Acts, provide
guaranteed loans in accordance with section 502, section 517(d), and the
last sentence of section 521(a)(1)(A), of the Housing Act of 1949.
(b) AMOUNT AVAILABLE FOR DEMONSTRATION. --
(1) There shall be available for guaranteed loans under this
section for any fiscal year in each State an amount equal to
whichever of the following is lower:
(A) 10 percent of the total loan authority allocated under
section 502 of the Housing Act of 1949 to the State for the fiscal
year.
"(B) The average, during the preceding 3 fiscal years, of the
funds allocated to the State under section 502 of the Housing Act
of 1949 that have not been utilized.
(2) Any amount made available under this subsection that is not
used before the last 60 days of a fiscal year shall become
available for assistance for low income families or persons under
section 502 of the Housing Act of 1949.
(c) ELIGIBILITY FOR LOANS. -- Loans guaranteed pursuant to this
section shall be made only to borrowers with moderate incomes that do
not exceed the median income of the area, as determined by the
Secretary, with adjustments for smaller and larger families.
(d) REPORTS TO CONGRESS. -- The Secretary shall submit to the
Congress --
(1) as soon as practicable after September 30, 1989, an interim
report setting forth the findings and recommendations of the
Secretary as a result of the demonstration; and
(2) as soon as practicable after September 30, 1991, a final
report setting forth the findings and recommendations of the
Secretary as a result of the demonstration.
(e) TERMINATION. -- The Secretary may not provide any guaranteed
loan under this section after September 30, 1991, except pursuant to a
commitment entered into on or before such date.
SEC. 305. DEFINITION OF DOMESTIC FARM LABOR.
(a) INSURED LOAN PROGRAM. -- Section 514(f)(3) of the Housing Act of
1949 "42 USC 1484" is amended to read as follows:
"(3) the term 'domestic farm labor' means any person (and the
family of such person) who receives a substantial portion of his
or her income from primary production of agricultural or
aquacultural commodities or the handling of such commodities in
the unprocessed stage, without respect to the source of
employment, except that --
"(A) such person shall be a citizen of the United States or a
person legally admitted for permanent residence;
"(B) such term includes any person (and the family of such
person) who is retired or disabled, but who was domestic farm
labor at the time of retirement or becoming disabled; and
"(C) in applying this paragraph with respect to vacant units in
farm labor housing, the Secretary shall make units available for
occupancy in the following order of priority:
"(i) to active farm laborers (and their families);
"(ii) to retired or disabled farm laborers (and their families)
who were active in the local farm labor market at the time of
retiring or becoming disabled; and
"(iii) to other retired or disabled farm laborers (and their
families).".
(b) GRANT PROGRAM. -- Section 516(g) of the Housing Act of 1949 "42
USC 1486" is amended --
(1) by striking "and" at the end of paragraph (2);
(2) by striking the period at the end of paragraph (3) and
inserting "; and"; and
(3) by adding at the end the following new paragraph:
"(4) the term 'domestic farm labor' has the meaning given such
term in section 514(f)(3).".
SEC. 306. CONFORMANCE WITH LOW-INCOME HOUSING TAX CREDIT ELIGIBILITY
REQUIREMENTS.
Section 515(p) of the Housing Act of 1949 (as so redesignated by
section 242 of this Act) is amended by adding at the end the following:
"(4) In projects financed under this section, units that have been
allocated a low-income housing tax credit by a housing credit agency
pursuant to section 42 of the Internal Revenue Code of 1986 shall not be
available for occupancy by persons or families other than persons or
families with incomes not in excess of the qualifying income applicable
to such units pursuant to subparagraph (A) or (B) of section 42(g)(1) of
such Code, except when the Secretary determines that the continued
vacancy of units that have been unoccupied for at least 6 months
threatens the financial viability of the project.".
SEC. 307. LIMITATION OF FEES ON RURAL RENTAL HOUSING LOANS.
Section 515 of the Housing Act of 1949 (as amended by section 263 of
this Act) is further amended by adding at the end the following new
subsection:
"(s) No fee other than a late fee may be imposed by or for the
Secretary or any other Federal agency on or with respect to a loan made
or insured under this section.".
SEC. 308. RURAL AREA CLASSIFICATION.
(a) HOLD HARMLESS. -- Section 520 of the Housing Act of 1949 "42 USC
1490" is amended by striking "March 15, 1988" in the last sentence and
inserting "September 30, 1989".
(b) ELIGIBILITY OF RURAL AREA PROXIMATE TO URBAN AREA. -- Section
520 of the Housing Act of 1949 is amended in the first sentence by
inserting before "part of or associated with" the following: "(except
in the case of Pajaro, in the State of California)".
SEC. 309. PROCEDURES FOR REDUCTION OF INTEREST CREDITS.
Section 521(a)(1)(B) of the Housing Act of 1949 "42 USC 1490a" is
amended by adding at the end the following new sentence: "In the case
of assistance provided under this subparagraph with respect to a loan
under section 502, the Secretary may not reduce, cancel, or refuse to
renew the assistance due to an increase in the adjusted income of the
borrower if the reduction, cancellation, or nonrenewal will cause the
borrower to be unable to reasonably afford the resulting payments
required under the loan.".
SEC. 310. RURAL HOUSING PRESERVATION GRANT PROGRAM.
Section 533(h) of the Housing Act of 1949 "42 USC 1490m" is amended
--
(1) by inserting "(1)" after the subsection designation; and
(2) by adding at the end the following new paragraph:
"(2) The Secretary shall, not later than the expiration of the 30-day
period following the date of the enactment of the Housing and Community
Development Act of 1987 issue regulations to carry out the program of
grants under subsection (a)(2).".
SEC. 311. RURAL RENTAL REHABILITATION DEMONSTRATION.
(a) ESTABLISHMENT OF DEMONSTRATION. "42 USE 1490m note" -- The
Secretary of Housing and Urban Development (referred to in this section
as the "Secretary") shall carry out a rural rental rehabilitation
demonstration program in accordance with this section.
(b) AVAILABILITY OF AMOUNTS. -- For purposes of the demonstration
program, any rental rehabilitation grant amount provided to a State
under section 17 of the United States Housing Act of 1937 that is
unutilized from any prior fiscal year shall be available for use in
areas eligible for assistance under title V of the Housing Act of 1949.
(c) REPORT TO CONGRESS. -- The Secretary shall submit to the
Congress as soon as practicable after September 30, 1989, a report
setting forth the findings and recommendations of the Secretary as a
result of the demonstration program. The report shall include an
evaluation of the following:
(1) The effectiveness of the program in meeting the need for
the rehabilitation of rental housing in rural areas.
(2) The extent of participation by the owners of rental
properties in the program.
(3) The cost of the program.
(d) TERMINATION. -- The authority provided in this section shall
terminate after September 30 1989.
SEC. 312. STUDY OF MORTGAGE CREDIT IN RURAL AREAS.
The Secretary of Housing and Urban Development shall conduct a study
of the availability and use of funds (including mortgages and loans
insured under title II of the National Housing Act, loans made or
insured under title V of the Housing Act of 1949, and conventional
mortgages and loans) for the purchase and improvement of residential
real property in rural areas, particularly in communities that have
populations of not more than 2,500 individuals. Not later than April 1,
1988, the Secretary shall submit to the Congress a detailed report
setting forth the findings of the Secretary as a result of the study.
SEC. 313. DEBT SETTLEMENT AUTHORITY OF SECRETARY.
Section 510(c) of the Housing Act of 1949 "42 USC 1480" is amended to
read as follows:
"(c) compromise, adjust, reduce, or charge-off claims, and
adjust, modify, subordinate, or release the terms of security
instruments, leases, contracts, and agreements entered into or
administered by the Secretary under this title, as circumstances
may require, including the release of borrowers or others
obligated on a debt from personal liability with or without
payment of any consideration at the time of the compromise,
adjustment, reduction, or charge-off of any claim;".
SEC. 314. MANUFACTURED HOUSING.
Section 502(e) of the Housing Act of 1949 "42 USC 1472" is amended by
adding at the end the following:
"(3) A loan that may be made or insured under this section with
respect to a manufactured home on a permanent foundation, or a
manufactured home on a permanent foundation and a lot, shall be
repayable over the same period as would be applicable under section
203(b) of the National Housing Act.".
SEC. 315. LOAN PACKAGING BY NONPROFIT ORGANIZATIONS.
Section 501 of the Housing Act of 1949 (as amended by section 302 of
this Act) is further amended by adding at the end the following new
subsection:
"(i) For the purposes of this title, the term 'development cost'
shall include the packaging of loan and grant applications and actions
related thereto by public and private nonprofit organizations tax exempt
under the Internal Revenue Code of 1986.".
SEC. 316. RURAL HOUSING TECHNICAL AMENDMENTS.
(a) DEFINITIONS. -- Section 501(b)(3) of the Housing Act of 1949 is
amended by striking "is a developmentally disabled individual as defined
in section 102(7) of the Development Disabilities Services and
Facilities Construction Act" and inserting the following: "has a
developmental disability as defined in section 102(7) of the
Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C.
6001(7))".
(b) FARM LABOR HOUSING. -- Section 514(f)(1) of the Housing Act of
1949 "42 USC 1484" is amended by striking "and" at the end.
(c) HOUSING FOR ELDERLY FAMILIES. -- Section 515(p)(1) of the
Housing Act of 1949 (as so redesignated by section 242 of this Act) is
amended by striking "effective".
(d) LOANS TO LOW- AND MODERATE-INCOME FAMILIES. -- Section 521(a) of
the Housing Act of 1949 "42 USC 1490a" is amended --
(1) in paragraph (1)(A), by striking ", except" and all that
follows through "charges"; and
(2) in paragraph (2)(A), by striking "; or" and inserting ",
or".
(e) HOUSING FOR RURAL TRAINEES. -- Section 552(a) of the Housing Act
of 1949 "42 USC 1490b" is amended by striking the comma after "Health".
(f) CONDOMINIUM HOUSING. -- "42 USC 1490f"
(1) Section 526(a) of the Housing Act of 1949 is amended by
striking "and" the first place it appears.
(2) Section 526(c) of the Housing Act of 1949 is amended by
striking "and" the first place it appears.
(g) HOUSING PRESERVATION GRANTS. --
(1) Section 533(e)(1)(B)(iii) of the Housing Act of 1949 "42
USC 1490m" is amended by inserting "to" before "refuse".
(2) Section 533(g) of the Housing Act of 1949 is amended by
striking "persons of low income and very low-income" and inserting
"low income families or persons and very low-income families and
persons".
SEC. 401. INSURANCE AUTHORITY FOR FHA.
(a) REPEALS. -- Each of the following provisions of law is repealed:
(1) Section 217 of the National Housing Act. "12 USC 1715h"
(2) The fifth sentence of section 221(f) of the National
Housing Act. "12 USC 1715l"
(3) Section 244(d), and the last sentence of section 244(h), of
the National Housing Act. "12 USC 1715z-9"
(4) The last sentence of section 245(a) of the National Housing
Act. "12 USC 1715z-10"
(5) The second sentence of section 809(f) of the National
Housing Act. "12 USC 1748h-1"
(6) The second sentence of section 810(k) of the National
Housing Act. "12 USC 1748h-2"
(7) The second sentence of section 1002(a) of the National
Housing Act. "12 USC 1749bb"
(8) The second sentence of section 1101(a) of the National
Housing Act. "12 USC 1749aaa"
(b) AMENDMENT. -- The first sentence of section 2(a) of the National
Housing Act "12 USC 1703" is amended by striking "and not later than
March 15, 1988,".
(c) EXTENSION OF SECTION 235. -- The last sentence of section
235(h)(1), section 235(m), and the last sentence of section 235(q)(1),
of the National Housing Act "12 USC 1715z" are each amended by striking
out "March 15, 1988" and inserting in lieu thereof "September 30, 1989".
(d) TERMINATION OF SECTION 235. -- "12 USC 1715z note"
(1) IN GENERAL. -- Effective on October 1, 1989, the program
under section 235 of the National Housing Act shall terminate.
(2) SAVINGS PROVISION. -- The provisions of paragraph (1)
shall not affect --
(A) any mortgage insurance commitment issued; or
(B) any assistance pursuant to a reservation of funds made;
under section 235 of the National Housing Act prior to October
1, 1989.
SEC. 402. AMOUNT TO BE INSURED UNDER NATIONAL HOUSING ACT.
Sec. 531 of the National Housing Act "12 USC 1735f-9" is amended --
(1) by inserting "(a)" after "SEC. 531."; and
(2) by adding at the end thereof the following:
"(b) Notwithstanding any other provision of law and subject only to
the absence of qualified requests for insurance, to the authority
provided in this Act, and to the limitation in subsection (a), the
Secretary shall enter into commitments to insure mortgages under this
Act with an aggregate principal amount of $100,000,000,000 during fiscal
year 1988, and $104,000,000,000 during fiscal year 1989.".
SEC. 403. LIMITATION ON FEDERAL HOUSING ADMINISTRATION INSURANCE
PREMIUMS.
Section 203(c) of the National Housing Act "12 USC 1709" is amended
by adding at the end the following new sentence: "In the case of any
mortgage secured by a 1- to 4-family dwelling, the total premium charge
shall not exceed an amount equal to 3.8 percent of the original
principal obligation of the mortgage if the Secretary requires (1) a
single premium charge to cover the total premium obligation of the
insurance of the mortgage; or (2) a periodic premium charge over less
than the term of the mortgage.".
SEC. 404. INCREASE IN MAXIMUM MORTGAGE AMOUNT UNDER SINGLE FAMILY
INSURANCE PROGRAM.
Section 203(b)(2)(A) of the National Housing Act is amended by
striking "133 1/3 per centum" and inserting "150 percent".
SEC. 405. CHANGE IN DEFINITION OF VETERAN.
The National Housing Act is amended --
(1) by inserting before the period at the end of the first
undesignated paragraph of section 203(b)(3)(2) the following: ",
except that persons enlisting in the armed forces after September
7, 1980, or entering active duty after October 16, 1981, shall
have their eligibility determined in accordance with section
3103A(d) of title 38, United States Code"; and
(2) by inserting before the semicolon at the end of section
220(d)(3)(A)(i) "12 USC 1715k" the following: ", except that
persons enlisting in the armed forces after September 7, 1980, or
entering active duty after October 16, 1981, shall have their
eligibility determined in accordance with section 3103A(d) of
title 38, United States Code".
SEC. 406. LIMITATION ON USE OF SINGLE FAMILY MORTGAGE INSURANCE BY
INVESTORS.
(a) IN GENERAL. -- Section 203 of the National Housing Act "12 USC
1709" is amended by inserting the following new subsection before
subsection (h):
"(g)(1) The Secretary may insure a mortgage under this title that is
secured by a 1- to 4-family dwelling, or approve a substitute mortgagor
with respect to any such mortgage, only if the mortgagor is to occupy
the dwelling as his or her principal residence or as a secondary
residence, as determined by the Secretary.
"(2) The occupancy requirement established in paragraph (1) shall
apply only if the mortgage involves a principal obligation that exceeds,
as appropriate, 75 percent of --
"(A) the appraised value of the dwelling;
"(B) the estimate of the Secretary of the replacement cost of
the property;
"(C) the sum of the estimates of the Secretary of the cost of
repair and rehabilitation and the value of the property before
repair and rehabilitation; or
"(D) the sum of the estimates of the Secretary of the cost of
repair and rehabilitation and the amount (as determined by the
Secretary) required to refinance existing indebtedness secured by
the property, and, in the case of a property refinanced under
section 220(d)(3)(A), any existing indebtedness incurred in
connection with improving, repairing, or rehabilitating the
property.
"(3) The occupancy requirement established in paragraph (1) shall not
apply to any mortgagor (or co-mortgagor, as appropriate) that is --
"(A) a public entity, as provided in section 214 or 247;
"(B) a private nonprofit or public entity, as provided in
section 221(h) or 235(j);
"(C) an Indian tribe, as provided in section 248;
"(D) a serviceperson who is unable to meet such requirement
because of his or her duty assignment, as provided in section 216
or subsection (b)(4) or (f) of section 222; or
"(E) a mortgagor or co-mortgagor under subsection (k).
"(4) For purposes of this subsection, the term 'substitute mortgagor'
means a person who, upon the release by a mortgagee of a previous
mortgagor from personal liability on the mortgage note, assumes such
liability and agrees to pay the mortgage debt.".
(b) CONFORMING AMENDMENTS. --
(1) Section 203(b)(2) of the National Housing Act is amended --
(A) in the first sentence, by striking "(whether" and all that
follows through "purposes)"; and
(B) in the second sentence, by striking the following: "to be
occupied as a principal residence of the owner".
(2) Section 203(b) of the National Housing Act is amended by
striking paragraph (8).
(3) Section 203(h) of the National Housing Act is amended by
striking "is the owner and occupant and".
(4) Section 203(i) of the National Housing Act is amended --
(A) by striking the first proviso; and
(B) by striking "further" the first place it appears.
(5) The first sentence of section 203(o)(2) of the National
Housing Act is amended by striking "occupant".
(6) The first sentence of section 203(p)(2) of the National
Housing Act "12 USC 1709" is amended by striking "owner-occupant"
and inserting "owner".
(7) The fourth sentence of section 214 of the National Housing
Act "12 USC 1715d" is amended by striking the following: "shall
be the owner and occupant of the property or".
(8) Section 216 of the National Housing Act "12 USC 1715g" is
amended --
(A) by striking "that the mortgagor be the occupant" and
inserting "with respect to the occupancy of the mortgagor"; and
(B) by striking "occupy the property" each place it appears and
inserting "meet such requirement".
(9) Section 220(d)(3)(A) of the National Housing Act "12 USC
1715k" is amended --
(A) by inserting "and" at the end of clause (i);
(B) by striking clauses (ii) and (iii);
(C) in clause (iv), by striking the following: "(except as
provided in clause (iii)"; and
(D) by redesignating clause (iv) as clause (ii).
(10) Section 221(d)(2) of the National Housing Act "12 USC
1715l" is amended --
(A) by striking the colon at the end of subparagraph (A)(iv)
and all that follows through "Provided further, That" the first
place it appears, and inserting ", except that";
(B) by striking "Provided, That (i)" and all that follows
through "(1) in" and inserting the following: "Provided, That
(i)(1) in";
(C) by striking the penultimate proviso; and
(D) in the last proviso, by striking the following: ", if the
mortgagor is the owner and an occupant of the property such" and
inserting "the".
(11) Section 221(d)(6)(ii) of the National Housing Act is
amended by striking the following: "is an owner-occupant of the
property and".
(12) The first sentence of section 221(h)(6) of the National
Housing Act is amended by striking "and occupied".
(13) Section 221(h)(8) of the National Housing Act is amended
by striking the following: "if one of the units is to be occupied
by the owner".
(14) Subsections (b)(4) and (f) of section 222 of the National
Housing Act "12 USC 1715m" are amended by inserting "as a
principal residence" after "occupies the property" each place it
appears.
(15) Section 223(a) of the Nationial Housing Act "42 USC 1715n"
is amended by inserting after "this Act," the first place it
appears the following: "other than the limitation in section
203(g),".
(16) The first sentence of section 223(e) of the National
Housing Act is amended by inserting after "title XI," the
following: "other than the limitation in section 203(g),".
(17) Section 234(c) of the National Housing Act "12 USC 1715y"
is amended by striking the fourth sentence.
(18) Section 235(i)(3)(A) of the National Housing Act "12 USC
1715z" is amended by striking the following: "one of the units of
which is to be occupied by the owner and".
(19) Section 235(j)(6) of the National Housing Act is amended
by striking the following: "if one of the units is to be occupied
by the owner".
(c) REPEAL OF VACATION AND SEASONAL HOME INSURANCE PROGRAM. --
Section 203 of the National Housing Act "12 USC 1709" is amended by
striking subsection (m).
(d) APPLICABILITY. -- The amendments made by this section "12 USC
1709 note" shall apply only with respect to --
(1) mortgages insured --
(A) pursuant to a conditional commitment issued on or after the
date of the enactment of this Act; or
(B) in accordance with the direct endorsement program (24 CFR
200.163), if the approved underwriter of the mortgagee signs the
appraisal report for the property on or after the date of the
enactment of this Act; and
(2) the approval of substitute mortgagors, referred to in the
amendment made by subsection (a), if the original mortgagor was
subject to such amendment.
(e) TRANSITION PROVISIONS. -- Any mortgage insurance provided under
title II of the National Housing Act, "12 USC 1709 note" as it existed
immediately before the date of the enactment of this Act, shall continue
to be governed (to the extent applicable) by the provisions specified in
subsections (a) through (c), as such provisions existed immediately
before such date.
SEC. 407. ACTIONS TO REDUCE LOSSES UNDER SINGLE FAMILY MORTGAGE
INSURANCE PROGRAM.
(a) IN GENERAL. -- "12 USC 1709 note"
(1) AMENDMENT TO SECTION 203. -- Section 203 of the National
Housing Act is amended by adding at the end the following new
subsection:
"(r) The Secretary shall take appropriate actions to reduce losses
under the mortgage insurance program carried out under this section.
Such actions shall include --
"(1) an annual review by the Secretary of the rate of early
serious defaults and claims, in accordance with section 533;
"(2) requiring reviews of the credit standing of each person
seeking to assume a mortgage insured under this section (A) during
the 12-month period following the date on which the mortgage is
endorsed for insurance, or (B) during the 24-month period
following the date on which the mortgage is endorsed for insurance
in the case of an investor originated mortgage; and
"(3) in any case where a mortgage is assumed after the period
specified in paragraph (2), requiring that the original mortgagor
be advised of the procedures by which he or she may be released
from liability.
In any case where the homeowner does not request a release from
liability, the purchaser and the homeowner shall have joint and several
liability for any default for a period of 5 years following the date of
the assumption. After the close of such 5-year period, only the
purchaser shall be liable for any default on the mortgage unless the
mortgage is in default at the time of the expiration of the 5-year
period.".
(2) EFFECTIVE DATE. -- The amendment "12 USC 1709 note" made
by paragraph (1) shall apply to mortgages endorsed for issuance on
or after December 1, 1986.
(b) REPORTS BY MORTGAGEES. -- Title V of the National Housing Act is
amended by adding at the end thereof the following new section:
"DIRECTION TO THE SECRETARY TO REQUIRE MORTGAGEES WITH ABOVE NORMAL
RATES OF EARLY, SERIOUS DEFAULTS AND CLAIMS TO SUBMIT REPORTS AND TAKE
CORRECTIVE ACTION.
"SEC. 533. (a) "12 USC 1735f-11" To reduce losses in connection with
mortgage insurance programs under this Act, the Secretary shall review,
at least once a year, the rate of early serious defaults and claims
involving mortgagees approved under this Act. On the basis of this
review, the Secretary shall notify each mortgagee which, as determined
by the Secretary, had a rate of early serious defaults and claims during
the preceding year which was higher than the normal rate for the
geographic area or areas in which that mortgagee does business. In the
notification, the Secretary shall require each mortgagee to submit a
report, within a time determined by the Secretary, containing the
mortgagee's (1) explanation for the above normal rate of early serious
defaults and claims; (2) plan for corrective action, if applicable,
both with regard to (A) mortgages in default; and (B) its
mortgage-processing system in general; and (3) a timeframe within which
this corrective action will be begun and completed. If the Secretary
does not agree with this timeframe or plan, a mutually agreeable
timeframe and plan will be determined.
"(b) Failure of the mortgagee to submit a report required under
subsection (a) within the time determined by the Secretary or to
commence or complete the plan for corrective action within the timeframe
agreed upon by the Secretary may be cause for suspension of the
mortgagee from participation in programs under this Act.".
SEC. 408. INSURANCE OF GRADUATED PAYMENT MORTGAGES.
(a) AUTHORITY TO INSURE REFINANCING. -- Section 223(a)(7) of the
National Housing Act "12 USC 1715n" is amended in the first proviso by
inserting after "except that" the following: "(A) the principal amount
of any such refinancing mortgage may equal the outstanding balance of an
existing mortgage insured pursuant to section 245, if the amount of the
monthly payment due under the refinancing mortgage is less than that due
under the existing mortgage for the month in which the refinancing
mortgage is executed; and (B)".
(b) TERMINATION OF AUTHORITY TO INSURE. -- Section 245(b) of the
National Housing Act "12 USC 1715z-10" is amended by adding at the end
the following new sentence: "No loan or mortgage may be insured under
this subsection after the date of the enactment of the Housing and
Community Development Act of 1987, except pursuant to a commitment to
insure entered into on or before such date.".
SEC. 409. REFINANCING MORTGAGE INSURANCE FOR HOSPITALS, NURSING
HOMES, INTERMEDIATE CARE FACILITIES, AND BOARD AND CARE HOMES.
(a) STATE CERTIFICATION REQUIREMENT. -- Section 223(f)(4)(D) of the
National Housing Act is amended to read as follows:
"(D) the applicable requirements for certificates, studies, and
statements of section 232 (for the existing nursing home,
intermediate care facility, board and care home, or any
combination thereof, proposed to be refinanced) or of section 242
(for the existing hospital proposed to be refinanced) have been
met.".
(b) REFINANCING INSURANCE FOR NURSING HOMES, INTERMEDIATE CARE
FACILITIES, AND BOARD AND CARE HOMES. -- Section 223(f) of the National
Housing Act is amended --
(1) in paragraph (1), by inserting after "existing hospital"
the following: "(or existing nursing home, existing intermediate
care facility, existing board and care home, or any combination
thereof)"; and
(2) in paragraph (4) (other than in subparagraph (D)), by
inserting after "existing hospital" each place it appears the
following: "(or existing nursing home, existing intermediate care
facility, existing board and care home, or any combination
thereof)".
(c) REGULATIONS. -- "12 USC 1715n note" The Secretary of Housing and
Urban Development shall issue such regulations as may be necessary to
carry out the amendment made by this section by not later than the
expiration of the 90-day period following the date of the enactment of
this Act.
SEC. 410. MORTGAGE INSURANCE FOR NURSING HOMES, INTERMEDIATE CARE
FACILITIES, AND BOARD AND CARE HOMES.
(a) INSURANCE FOR PUBLIC NURSING HOMES. -- Section 232(b)(1) of the
National Housing Act "12 USC 1715w" is amended by inserting "public
facility," before "proprietary".
(b) REQUIREMENT OF STATE APPROVAL. -- Section 232(d)(4)(A) of the
National Housing Act is amended by inserting at the end the following
new sentences: "If no such State agency exists, or if the State agency
exists but is not empowered to provide a certification that there is a
need for the home or facility or combined home and facility as required
in clause (i) of the first sentence, the Secretary shall not insure any
mortgage under this section unless (i) the State in which the home or
facility or combined home and facility is located has conducted or
commissioned and paid for the preparation of an independent study of
market need and feasibility that (I) is prepared in accordance with the
principles established by the American Institute of Certified Public
Accountants; (II) assesses, on a marketwide basis, the impact of the
proposed home or facility or combined home and facility on, and its
relationship to, other health care facilities and services, the
percentage of excess beds, demographic projections, alternative health
care delivery systems, and the reimbursement structure of the home,
facility, or combined home and facility; (III) is addressed to and is
acceptable to the Secretary in form and substance; and (IV) in the
event the State does not prepare the study, is prepared by a financial
consultant who is selected by the State or the applicant for mortgage
insurance and is approved by the Secretary; and (ii) the State complies
with the other provisions of this subparagraph that would otherwise be
required to be met by a State agency designated in accordance with
section 604(a)(1) or section 1521 of the Public Health Service Act. The
proposed mortgagor may reimburse the State for the cost of the
independent feasibility study required in the preceding sentence. In
the case of a small intermediate care facility for the mentally retarded
or developmentally disabled, or a board and care home housing less than
10 individuals, the State program agency or agencies responsible for
licensing, certifying, financing, or monitoring the facility or home
may, in lieu of the requirements of clause (i) of the third sentence,
provide the Secretary with written support identifying the need for the
facility or home.".
(c) REGULATIONS. -- "12 USC 1715w note" The Secretary of Housing and
Urban Development shall issue such regulations as may be necessary to
carry out the amendments made by this section by not later than the
expiration of the 90-day period following the date of the enactment of
this Act.
SEC. 411. REQUIREMENT OF STATE APPROVAL FOR MORTGAGE INSURANCE FOR
HOSPITALS.
(a) IN GENERAL. -- Section 242(d)(4) of the National Housing Act "12
USC 1715z-7" is amended by inserting at the end the following new
sentences: "If no such State agency exists, or if the State agency
exists but is not empowered to provide a certification that there is a
need for the hospital as set forth in clause (A) of the first sentence,
the Secretary shall not insure any mortgage under this section unless
(A) the State in which the hospital is located has conducted or
commissioned and paid for the preparation of an independent study of
market need and feasibility that (i) is prepared in accordance with the
principles established by the American Institute of Certified Public
Accountants; (ii) assesses, on a marketwide basis, the impact of the
proposed hospital on, and its relationship to, other health care
facilities and services, the percentage of excess beds, demographic
projections, alternative health care delivery systems, and the
reimbursement structure of the hospital; (iii) is addressed to and is
acceptable to the Secretary in form and substance; and (iv) in the
event the State does not prepare the study, is prepared by a financial
consultant selected by the State and approved by the Secretary; and (B)
the State complies with the other provisions of this paragraph that
would otherwise be required to be met by a State agency designated in
accordance with section 604(a)(1) or section 1521 of the Public Health
Service Act. The proposed mortgagor may reimburse the State for the
cost of the independent feasibility study required in the preceding
sentence.".
(b) REGULATIONS. -- "12 USC 1715z-7 note" The Secretary of Housing
and Urban Development shall issue such regulations as may be necessary
to carry out the amendment made by this section by not later than the
expiration of the 90-day period following the date of the enactment of
this Act.
SEC. 412. MORTGAGE INSURANCE FOR PUBLIC HOSPITALS.
(a) ELIMINATION OF ADDITIONAL COLLATERAL REQUIREMENTS FOR PUBLIC
HOSPITALS. -- Section 242(a) of the National Housing Act is amended by
adding at the end the following: "Such assistance shall be provided
regardless of the amount of public financial or other support a hospital
may receive, and the Secretary shall neither require additional security
or collateral to guarantee such support, nor impose more stringent
eligibility or other requirements on publicly owned or supported
hospitals.".
(b) CREDIT FOR EXISTING EQUIPMENT AND IMPROVEMENTS. -- Section
242(d)(2) of the National Housing Act is amended by striking the matter
preceding subparagraph (A) and inserting the following:
"(2) The mortgage shall involve a principal obligation in the amount
requested by the mortgagor if such amount does not exceed 90 percent of
the estimated replacement cost of the property or project including --
".
(c) CONTINUED USE OF LETTERS OF CREDIT. -- Section 242(d) of the
National Housing Act is amended by adding at the end the following new
paragraph:
"(6) To the extent that a private nonprofit or public facility
mortgagor is required by the Secretary to provide cash equity in excess
of the amount of the mortgage to complete the project, the mortgagor
shall be entitled, at the option of the mortgagee, to fund the excess
with a letter of credit. In such event, mortgage proceeds may be
advanced to the mortgagor prior to any demand being made on the letter
of credit.".
(d) IMMEDIATE PROCESSING OF APPLICATIONS FOR PUBLIC HOSPITALS. --
Section 242(f) of the National Housing Act "12 USC 1715z-7" is amended
by adding at the end the following: "The Secretary shall begin
immediately to process applications of public facilities for mortgage
insurance under this section in accordance with regulations, guidelines,
and procedures applicable to facilities of private nonprofit
corporations and associations.".
(e) REPORT ON INSURANCE UNDER SECTION 242. -- The Comptroller
General of the United States shall conduct a study of the long-term
financial exposure of the Federal Government under the mortgage
insurance program pursuant to section 242 of the National Housing Act.
Not later than October 1, 1988, the Comptroller General of the United
States shall transmit to the Congress a report setting forth the results
of such study, including documentation of the long-term financial
exposure determined in the course of such study and recommendations for
such legislation as the Comptroller General deems appropriate.
SEC. 413. MORTGAGE INSURANCE ON HAWAIIAN HOME LANDS AND INDIAN
RESERVATIONS.
(a) APPLICABILITY OF MORTGAGE INSURANCE ON HAWAIIAN HOME LANDS. --
Section 247(c)(1) of the National Housing Act "12 USC 1715z-12" is
amended by inserting before the period at the end the following: "(or,
in the case of an individual who succeeds a spouse or parent in an
interest in a lease of Hawaiian home lands, such lower percentage as may
be established for such succession under section 209 of the Hawaiian
Homes Commission Act, 1920, or under the corresponding provision of the
Constitution of the State of Hawaii adopted under section 4 of the Act
entitled 'An Act to provide for the admission of the State of Hawaii
into the Union', approved March 18, 1959 (73 Stat. 5))".
(b) MORTGAGE INSURANCE ON HAWAIIAN HOME LANDS AS OBLIGATIONS OF
GENERAL INSURANCE FUND. -- Section 247 of the National Housing Act is
amended --
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following new
subsection:
"(c) Notwithstanding any other provision of this Act, the insurance
of a mortgage using the authority contained in this section shall be the
obligation of the General Insurance Fund established in section 519.
The mortgagee shall be eligible to receive the benefits of insurance as
provided in section 204 with respect to mortgages insured pursuant to
this section, except that (1) all references in section 204 to the
Mutual Mortgage Insurance Fund or the Fund shall be construed to refer
to the General Insurance Fund; and (2) all references in section 204 to
section 203 shall be construed to refer to the section under which the
mortgage is insured.".
(c) MORTGAGE INSURANCE ON INDIAN RESERVATIONS AS OBLIGATIONS OF
GENERAL INSURANCE FUND. -- Section 248 of the National Housing Act "12
USC 1715z-13" is amended --
(1) in paragraphs (3) and (5) of subsection (f), by striking
"insurance fund" each place it appears and inserting "General
Insurance Fund";
(2) by redesignating subsections (f), (g), and (h) as
subsections (g), (h), and (i), respectively; and
(3) by inserting after subsection (e) the following new
subsection:
"(f) Notwithstanding any other provisions of this Act, the insurance
of a mortgage using the authority contained in this section shall be the
obligation of the General Insurance Fund established in section 519.
The mortgagee shall be eligible to receive the benefits of insurance as
provided in section 204 with respect to mortgages insured pursuant to
this section, except that (1) all references in section 204 to the
Mutual Mortgage Insurance Fund or the Fund shall be construed to refer
to the General Insurance Fund; and (2) all references in section 204 to
section 203 shall be construed to refer to the section under which the
mortgage is insured.".
SEC. 414. CO-INSURANCE PROGRAM.
(a) REPEALER. -- Section 244 of the National Housing Act "12 USC
1715z-9" is amended by striking subsection (c).
(b) CO-INSURANCE AMENDMENTS. -- Section 244 of the National Housing
Act is amended --
(1) in subsection (h), by striking "coinsurance" each place it
appears and inserting "co-insurance"; and
(2) by adding at the end the following new subsection:
4 "(i) Any mortgagee which enters into a contract of co-insurance under
this section shall have the authority to assign its interest in any note
or mortgage, subject to a contract of co-insurance to a warehouse bank
or other financial institution which provides interim funding for a loan
co-insured under this section, and to retain the co-insurance risk of
such note or mortgage, upon such terms and conditions as the Secretary
shall prescribe.".
SEC. 415. INCREASE IN AUTHORITY TO INSURE ADJUSTABLE RATE SINGLE
FAMILY MORTGAGES.
(a) IN GENERAL. -- Section 251(c) of the National Housing Act "12
USC 1715z-16" is amended to read as follows:
"(c) The aggregate number of mortgages and loans insured under this
section in any fiscal year may not exceed 30 percent of the aggregate
number of mortgages and loans insured by the Secretary under this title
during the preceding fiscal year.".
(b) CONFORMING AMENDMENTS. --
(1) Section 245(c) of the National Housing Act "12 USC
1715z-10" is amended in the last sentence by striking ", section
251,".
(2) Section 252(g) of the National Housing Act "12 USC
1715z-17" is amended --
(A) by striking the first comma and inserting "and"; and
(B) by striking ", and section 251".
SEC. 416. PENALTIES FOR EQUITY SKIMMING.
(a) PURCHASE OF DWELLING SUBJECT TO LOAN IN DEFAULT. -- Section 912
of the Housing and Urban Development Act "12 USC 1709-2" of 1970 is
amended --
(1) in paragraph (1), by inserting "(including condominiums and
cooperatives)" after "dwellings";
(2) in paragraph (2), by inserting after "due" the following:
", regardless of whether the purchaser is obligated on the loan";
and
(3) in the matter following paragraph (3) --
(A) by striking "$5,000" and inserting "$250,000"; and
(B) by striking "three" and inserting "5".
(b) USE OF FUNDS DERIVED FROM PROPERTY SUBJECT TO LOAN IN DEFAULT.
-- Title II of the National Housing Act is amended by adding at the end
the following new section:
"SEC. 254. "12 USC 1715z-19" Whoever, as an owner, agent, or
manager, or who is otherwise in custody, control, or possession of
property that is security for a mortgage note that is insured, acquired,
or held by the Secretary pursuant to section 203, 207, 213, 220,
221(d)(3), 221(d)(4), 223(f), 231, 232, 234, 236, 238(c), 241, 242, 244,
608, or 810, or title XI, or is made pursuant to section 202 of the
Housing Act of 1959, willfully uses or authorizes the use of any part of
the rents, assets, proceeds, income or other funds derived from property
covered by such mortgage note during a period when the mortgage note is
in default or the project is in a nonsurplus cash position as defined by
the regulatory agreement covering such property, for any purpose other
than to meet actual or necessary expenses that include expenses approved
by the Secretary if such approval is required under the terms of the
regulatory agreement, shall be fined not more than $250,000 or
imprisoned not more than 5 years, or both.".
(c) CONFORMING AMENDMENTS. -- Section 239 of the National Housing
Act "12 USC 1715z-4" is amended --
(1) by striking "INSURED" in the section heading;
(2) by striking "(a)" after "SEC. 239."; and
(3) by striking subsection (b).
SEC. 417. HOME EQUITY CONVERSION MORTGAGE INSURANCE DEMONSTRATION.
(a) IN GENERAL. -- Title II of the National Housing Act (as amended
by section 416 of this Act) is further amended by adding at the end the
following new section:
"SEC. 255. "12 USC 1715z-20" (a) PURPOSE. -- The purpose of this
section is to authorize the Secretary to carry out a demonstration
program of mortgage insurance designed --
"(1) to meet the special needs of elderly homeowners by
reducing the effect of the economic hardship caused by the
increasing costs of meeting health, housing, and subsistence needs
at a time of reduced income, through the insurance of home equity
conversion mortgages to permit the conversion of a portion of
accumulated home equity into liquid assets;
"(2) to encourage and increase the involvement of mortgagees
and participants in the mortgage markets in the making and
servicing of home equity conversion mortgages for elderly
homeowners; and
"(3) to require the evaluation of data to determine --
"(A) the extent of the need and demand among elderly homeowners
for insured and uninsured home equity conversion mortgages;
"(B) the type of home equity conversion mortgages that best
serve the needs and interests of elderly homeowners, the Federal
Government, and lenders; and
"(C) the appropriate scope and nature of participation by the
Secretary in connection with home equity conversion mortgages for
elderly homeowners.
"(b) DEFINITIONS. -- For purposes of this section:
"(1) The terms 'elderly homeowner' and 'homeowner' mean any
homeowner who is, or whose spouse is, at least 62 years of age or
such higher age as the Secretary may prescribe.
"(2) The terms 'mortgage', 'mortgagee', 'mortgagor', and
'State' have the meanings given such terms in section 201.
"(3) The term 'home equity conversion mortgage' means a first
mortgage which provides for future payments to the homeowner based
on accumulated equity and which a housing creditor (as defined in
section 803(2) of the Garn-St. Germain Institutions Act of 1982)
is authorized to make (A) under any law of the United States
(other than section 804 of such Act) or applicable agency
regulations thereunder; (B) in accordance with section 804 of
such Act, notwithstanding any State constitution, law, or
regulation; or (C) under any State constitution, law, or
regulation.
"(c) INSURANCE AUTHORITY. -- The Secretary may, upon application by
a mortgagee, insure any home equity conversion mortgage eligible for
insurance under this section and, upon such terms and conditions as the
Secretary may prescribe, make commitments for the insurance of such
mortgages prior to the date of their execution or disbursement to the
extent that the Secretary determines such mortgages --
"(1) have promise for improving the financial situation or
otherwise meeting the special needs of elderly homeowners;
"(2) will include appropriate safeguards for mortgagors to
offset the special risks of such mortgages; and
"(3) have a potential for acceptance in the mortgage market.
"(d) ELIGIBILITY REQUIREMENTS. -- To be eligible for insurance under
this section, a mortgage shall --
"(1) have been made to a mortgagee approved by the Secretary as
responsible and able to service the mortgage properly;
"(2) have been executed by a mortgagor who --
"(A) qualifies as an elderly homeowner;
"(B) has received adequate counseling by a third party (other
than the lender) as provided in subsection (f); and
"(C) meets any additional requirements prescribed by the
Secretary;
"(3) be secured by a dwelling that is designed principally for
a 1-family residence and is occupied by the mortgagor and that has
a value not to exceed the maximum dollar amount established by the
Secretary under section 203(b)(2) for a 1-family residence;
"(4) provide that prepayment, in whole or in part, may be made
without penalty at any time during the period of the mortgage;
"(5) provide for a fixed or variable interest rate or future
sharing between the mortgagor and the mortgagee of the
appreciation in the value of the property, as agreed upon by the
mortgagor and the mortgagee;
"(6) contain provisions for satisfaction of the obligation
satisfactory to the Secretary;
"(7) provide that the homeowner shall not be liable for any
difference between the net amount of the remaining indebtedness of
the homeowner under the mortgage and the amount recovered by the
mortgagee from --
"(A) the foreclosure sale; or
"(B) the insurance benefits paid pursuant to subsection
(i)(1)(C); and
"(8) contain such terms and provisions with respect to
insurance, repairs, alterations, payment of taxes, default
reserve, delinquency charges, foreclosure proceedings,
anticipation of maturity, additional and secondary liens, and
other matters as the Secretary may prescribe.
"(e) DISCLOSURES BY MORTGAGEE. -- The Secretary shall require each
mortgagee of a mortgage insured under this section to make available to
the homeowner --
"(1) at the time of the loan application, a written list of the
names and addresses of third-party information sources who are
approved by the Secretary as responsible and able to provide the
information required by subsection (f);
"(2) at least 10 days prior to loan closing, a statement
explaining the homeowner's rights, obligations, and remedies with
respect to temporary absences from the home, late payments, and
payment default by the lender, all conditions requiring
satisfaction of the loan obligation, and any other information
that the Secretary may require; and
"(3) on an annual basis (but not later than January 31 of each
year), a statement summarizing the total principal amount paid to
the homeowner under the loan secured by the mortgage, the total
amount of deferred interest added to the principal, and the
outstanding loan balances at the end of the preceding year.
"(f) INFORMATION SERVICES FOR MORTGAGORS. -- The Secretary shall
provide or cause to be provided by entities other than the lender the
information required in subsection (d)(2)(B). Such information shall be
discussed with the mortgagor and shall include --
"(1) options other than a home equity conversion mortgage that
are available to the homeowner, including other housing, social
service, health, and financial options;
"(2) other home equity conversion options that are or may
become available to the homeowner, such as sale-leaseback
financing, deferred payment loans, and property tax deferral;
"(3) the financial implications of entering into a home equity
conversion mortgage;
"(4) a disclosure that a home equity conversion mortgage may
have tax consequences, affect eligibility for assistance under
Federal and State programs, and have an impact on the estate and
heirs of the homeowner; and
"(5) any other information that the Secretary may require.
"(g) LIMITATION ON INSURANCE AUTHORITY. -- No mortgage may be
insured under this section after September 30, 1991, except pursuant to
a commitment to insure issued on or before such date. The total number
of mortgages insured under this section may not exceed 2,500. In no
case may the benefits of insurance under this section exceed the maximum
dollar amount established under section 203(b)(2) for a 1-family
residence.
"(h) ADMINISTRATIVE AUTHORITY. -- The Secretary may --
"(1) enter into such contracts and agreements with Federal,
State, and local agencies, public and private entities, and such
other persons as the Secretary determines to be necessary or
desirable to carry out the purposes of this section; and
"(2) make such investigations and studies of data, and publish
and distribute such reports, as the Secretary determines to be
appropriate.
"(i) PROTECTION OF HOMEOWNER AND LENDER. --
"(1) Notwithstanding any other provision of law, and in order
to further the purposes of the demonstration program authorized in
this section, the Secretary shall take any action necessary --
"(A) to provide any mortgagor under this section with funds to
which the mortgagor is entitled under the insured mortgage or
ancillary contracts but that the mortgagor has not received
because of the default of the party responsible for payment;
"(B) to obtain repayment of disbursements provided under
subparagraph (A) from any source; and
"(C) to provide any mortgagee under this section with funds not
to exceed the limitations in subsection (g) to which the mortgagee
is entitled under the terms of the insured mortgage or ancillary
contracts authorized in this section.
"(2) Actions under paragraph (1) may include --
"(A) disbursing funds to the mortgagor or mortgagee from the
General Insurance Fund;
"(B) accepting an assignment of the insured mortgage
notwithstanding that the mortgagor is not in default under its
terms, and calculating the amount and making the payment of the
insurance claim on such assigned mortgage;
"(C) requiring a subordinate mortgage from the mortgagor at any
time in order to secure repayments of any funds advanced or to be
advanced to the mortgagor;
"(D) requiring a subrogation to the Secretary of the rights of
any parties to the transaction against any defaulting parties;
and
"(E) imposing premium charges.
"(j) SAFEGUARD TO PREVENT DISPLACEMENT OF HOMEOWNER. -- The
Secretary may not insure a home equity conversion mortgage under this
section unless such mortgage provides that the homeowner's obligation to
satisfy the loan obligation is deferred until the homeowner's death, the
sale of the home, or the occurrence of other events specified in
regulations of the Secretary. For purposes of this subsection, the term
'homeowner' includes the spouse of a homeowner.
"(k) REPORTS TO CONGRESS. --
"(1) The Secretary shall, not later than September 30, 1989,
submit an interim report to Congress describing --
"(A) design and implementation of the demonstration;
"(B) number and types of reverse mortgages written to date;
"(C) profile of participant homeowner-borrowers, including
incomes, home equity, and regional distribution; and
"(D) problems encountered in implementation, including
impediments associated with State or Federal laws or regulations
governing taxes, insurance, securities, public benefits, banking,
and any other problems in implementation that the Secretary
encounters.
"(2) Not later than March 30, 1992, the Secretary shall submit
to Congress a preliminary evaluation of the program authorized in
this section. Such evaluation shall include an updated report on
the matters referred to in paragraph (1) and shall in addition --
"(A) describe the types of mortgages appropriate for inclusion
in such program;
"(B) describe any changes in the insurance programs under this
title, or in other Federal regulatory provisions, determined to be
appropriate;
"(C) describe any risk created under such mortgages to
mortgagors and mortgagees or the insurance programs under this
title, and whether the risk is adequately covered by the premiums
under the insurance programs;
"(D) evaluate whether such program has improved the financial
situation or otherwise met the special needs of participating
elderly homeowners;
"(E) evaluate whether such program has included appropriate
safeguards for mortgagors to offset the special risks of such
mortgages; and
"(F) evaluate whether home equity conversion mortgages have a
potential for acceptance in the mortgage markets.
"(3) The preliminary evaluation shall incorporate comments and
recommendations solicited by the Secretary from the Board of
Governors of the Federal Reserve System, the Secretary of Health
and Human Services, the Federal Council on Aging, Federal Home
Loan Bank Board, the Comptroller of the Currency, and the National
Credit Union Administration Board regarding any of the matters
referred to in paragraph (1) or (2).
"(4) Following submission of the preliminary evaluation, the
Secretary shall, on a biennial basis, submit to the Congress an
updated report and evaluation covering the period since the most
recent report under this subsection and shall include analysis of
the repayment of the home equity conversion mortgages under this
demonstration during such period.".
(b) REGULATIONS. -- "12 USC 1715z-20 note" The Secretary of Housing
and Urban Development shall --
(1) not later than 6 months after the date of enactment of this
Act, consult with lenders, insurers, and organizations and
individuals with expertise in home equity conversion in developing
proposed regulations implementing section 254 of the National
Housing Act; and
(2) not later than 9 months after the date of the enactment of
this Act, issue proposed regulations implementing section 254 of
the National Housing Act.
SEC. 418. ASSURANCE OF ADEQUATE PROCESSING OF APPLICATIONS FOR LOAN
AND MORTGAGE INSURANCE.
Title V of the National Housing Act (as amended by section 407 of
this Act) is amended by adding at the end the following new section:
"SEC. 534. "12 USC 1735f-12" In order to ensure the adequate
processing of applications for insurance of loans and mortgages under
this Act, the Secretary shall maintain not less than one office in each
State to carry out the provisions of this Act.".
SEC. 419. PROHIBITION OF LENDER REQUIREMENTS DISCOURAGING LOANS WITH
LOWER PRINCIPAL AMOUNTS.
(a) LOAN AMOUNT OF ORIGINAL LOANS. -- Title V of the National
Housing Act (as amended by sections 407 and 418 of this Act) is further
amended by adding at the end the following new section:
"SEC. 535. "12 USC 1735f-13" A mortgagee or lender may not require,
as a condition of providing a loan insured under this Act or secured by
a mortgage insured under this Act, that the principal amount of the loan
exceed a minimum amount established by the mortgagee or lender.".
(b) LOAN AMOUNT OF REFINANCINGS. -- Section 223(a)(7) of the
National Housing Act "12 USC 1715n" (as amended by section 408 of this
Act) is further amended by striking "; and (B)" and inserting the
following: "; (B) a mortgagee may not require a minimum principal
amount to be outstanding on the loan secured by the existing mortgage;
and (C)".
(c) STUDY OF OTHER LENDING PRACTICES. -- During the 6-month period
beginning on the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall conduct a study of the interest
rates and discount points charged for mortgages and loans insured under
the National Housing Act. The study shall be designed to identify any
pattern or practice of charging higher interest rates or discount points
for mortgages or loans with lower principal amounts than for mortgages
or loans with the maximum principal amounts permitted for insurance
under the National Housing Act. Not later than 3 months after the
expiration of the 6-month period, the Secretary shall submit to the
Congress a report setting forth the findings and recommendations of the
Secretary.
SEC. 420. REPEAL OF REQUIREMENT TO PUBLISH PROTOTYPE HOUSING COSTS
FOR 1- TO 4-FAMILY DWELLING UNITS.
The Housing and Community Development Act of 1977 "42 USC 3540" is
amended by striking section 904.
SEC. 421. DOUBLE DAMAGES REMEDY FOR UNAUTHORIZED USE OF MULTIFAMILY
HOUSING PROJECT ASSETS AND INCOME.
(a) ACTION TO RECOVER ASSETS OR INCOME. --
(1) The Secretary of Housing and Urban Development (referred to
in this section as the "Secretary") may request the Attorney
General to bring an action in a United States district court to
recover any assets or income used by any person in violation of
(A) a regulatory agreement that applies to a multifamily project
whose mortgage is insured or held by the Secretary under title II
of the National Housing Act; or (B) any applicable regulation.
For purposes of this section, a use of assets or income in
violation of the regulatory agreement or any applicable regulation
shall include any use for which the documentation in the books and
accounts does not establish that the use was made for a reasonable
operating expense or necessary repair of the project and has not
been maintained in accordance with the requirements of the
Secretary and in reasonable condition for proper audit.
(2) For purposes of a mortgage insured or held by the Secretary
under title II of the National Housing Act, the term "any person"
shall mean any person or entity which owns a project, as
identified in the regulatory agreement, including but not limited
to any stockholder holding 25 percent or more interest of a
corporation that owns the project; any beneficial owner under any
business or trust; any officer, director, or partner of an entity
owning the project; and any heir, assignee, successor in
interest, or agent of any owner.
(b) INITIATION OF PROCEEDINGS AND TEMPORARY RELIEF. -- The Attorney
General, upon request of the Secretary, shall have the exclusive
authority to authorize the initation of proceedings under this section.
Pending final resolution of any action under this section, the court may
grant appropriate temporary or preliminary relief, including restraining
orders, injunctions, and acceptance of satisfactory performance bonds,
to protect the interests of the Secretary and to prevent use of assets
or income in violation of the regulatory agreement and any applicable
regulation and to prevent loss of value of the realty and personalty
involved.
(c) AMOUNT RECOVERABLE. -- In any judgment favorable to the United
States entered under this section, the Attorney General may recover
double the value of the assets and income of the project that the court
determines to have been used in violation of the regulatory agreement or
any applicable regulation, plus all costs relating to the action,
including but not limited to reasonable attorney and auditing fees.
Notwithstanding any other provision of law, the Secretary may apply the
recovery, or any portion of the recovery, to the project or to the
applicable insurance fund under the National Housing Act.
(d) TIME LIMITATION. -- Notwithstanding any other statute of
limitations, the Secretary may request the Attorney General to bring an
action under this section at any time up to and including 6 years after
the latest date that the Secretary discovers any use of project assets
and income in violation of the regulatory agreement or any applicable
regulation.
(c) CONTINUED AVAILABILITY OF OTHER REMEDIES. -- The remedy provided
by this section is in addition to any other remedies available to the
Secretary or the United States.
SEC. 422. MISCELLANEOUS MORTGAGE INSURANCE PROVISIONS.
(a) MORTGAGE INSURANCE FOR CONDOMINIUMS. -- Section 234(e)(3) of the
National Housing Act "12 USC 1715y" is amended by inserting after
"design;" the following: "except that each of the foregoing dollar
amounts is increased to the amount established for a comparable unit in
section 221(d)(3)(ii);".
(b) MORTGAGE INSURANCE FOR CERTAIN PROPERTIES WITHIN AN INDIAN
RESERVATION. -- Section 203(q)(1) of the National Housing Act "12 USC
1709" is amended by striking "Secretary may" and inserting "Secretary
shall".
SEC. 423. CALCULATION OF MAXIMUM MORTGAGE AMOUNT UNDER SINGLE FAMILY
INSURANCE PROGRAM.
Section 203(b)(2) of the National Housing Act is amended by inserting
after the first sentence the following: "For purposes of the preceding
sentence, the term 'area' means a county, or a metropolitan statistical
area as established by the Office of Management and Budget, whichever
results in the higher dollar amount.".
SEC. 424. APPROVAL OF INDIVIDUAL RESIDENTIAL WATER PURIFICATION OR
TREATMENT UNITS.
(a) IN GENERAL. -- "12 USC 1701z-15" When the existing water supply
does not meet the minimum property standards established by the
Department of Housing and Urban Development and a permanent alternative
acceptable water supply is not available, a continuous supply of water
may be provided through the use of approved residential water treatment
equipment or a water purification unit that provides bacterially and
chemically safe drinking water.
(b) APPROVAL PROCESS. -- A performance-based approval of the
equipment or unit and the maintenance, monitoring, and replacement plan
for such equipment or unit shall be certified by field offices of the
Department of Housing and Urban Development based upon general standards
recognized by the Department as modified for local or regional
conditions. As a part of such approved plan, a separate monthly escrow
account may be required to be established through the lender to cover
the cost of the approved yearly maintenance and monitoring schedule and
projected replacement of the equipment or unit.
SEC. 425. REGULATION OF RENTS IN INSURED PROJECTS. "12 USC
1715z-1c"
After December 1, 1987, the Secretary of Housing and Urban
Development shall control rents and charges as they were controlled
prior to April 19, 1983, for any multifamily housing project insured
under the National Housing Act if --
(1) during the period of April 19, 1983, through December 1,
1987, the project owner and the Secretary have not executed, and
the project owner has not filed a written request with the
Secretary to enter into, an amendment to the regulatory agreement
pursuant to regulations published by the Secretary on April 19,
1983, or June 4, 1986, electing to deregulate rents or utilize an
alternative formula for determining the maximum allowable rents
pursuant to regulations published by the Secretary on April 19,
1983, or June 4, 1986; and
(2)(A) the project was, as of December 1, 1987, receiving a
housing assistance payment under a contract pursuant to section 8
of the United States Housing Act of 1937 (other than under the
existing housing certificate program of section 8(b)(1) of such
Act); or
(B) not less than 50 percent of the units in the project are
occupied by lower income families (as defined in section 3(a)(2)
of the United States Housing Act of 1937).
SEC. 426. MORTGAGE LIMITS FOR MULTIFAMILY PROJECTS.
(a) SECTION 207 LIMITS. -- Section 207(c)(3) of the National Housing
Act "12 USC 1713" is amended --
(1) by striking out "$19,500", "$21,600", "$25,800", "$31,800",
and "$36,000" and inserting in lieu thereof "$25,350", "$28,080",
"$33,540", "$41,340", and "$46,800", respectively; and
(2) by striking out "$22,500", "$25,200", "$30,900", "$38,700",
and "$43,758" and inserting in lieu thereof "$29,250", "$32,760",
"$40,170", "$50,310", and "$56,885", respectively.
(b) SECTION 213 LIMITS. -- Section 213(b)(2) of the National Housing
Act "12 USC 1715e" is amended --
(1) by striking out "$19,500", "$21,600", "$25,800", "$31,800",
and "$36,000" and inserting in lieu thereof "$25,350", "$28,080",
"$33,540", "$41,340", and "$46,800", respectively; and
(2) by striking out "$22,500", "$25,200", "$30,900", "$38,700",
and "$43,758" and inserting in lieu thereof "$29,250", "$32,760",
"$40,170", "$50,310", and "$56,885", respectively.
(c) SECTION 220 LIMITS. -- Section 220(d)(3)(B)(iii) of the National
Housing Act "12 USC 1715k" is amended --
(1) by striking out "$19,500", "$21,600", "$25,800", "$31,800",
and "$36,000" and inserting in lieu thereof "$25,350", "$28,080",
"$33,540", "$41,340", and "$46,800", respectively; and
(2) by striking out "$22,500", "$25,200", "$30,900", "$38,700",
and "$43,758" and inserting in lieu thereof "$29,250", "$32,760",
"$40,170", "$50,310", and "$56,885", respectively.
(d) SECTION 221(d)(3) LIMITS. -- Section 221(d)(3)(ii) of the
National Housing Act "12 USC 1715l" is amended by striking out
"$21,563"; "$24,862"; "$29,984"; "$38,379"; "$42,756"; $22,692";
"$26,012"; "$31,631"; "$40,919"; and "$44,917" and inserting in lieu
thereof "$28,032"; "$32,321"; "$38,979"; "$49,893"; "$55,583";
"$29,500"; "$33,816"; "$41,120"; "$53,195"; and "$58,392",
respectively.
(e) SECTION 221(d)(4) LIMITS. -- Section 22(d)(4)(ii) of the
National Housing Act of 1934 is amended by striking out "$19,406";
"$22,028"; "$26,625"; "$33,420"; "$37,870"; "$20,962"; "$24,030";
"$29,220"; "$37,800"; and "$41,494" and inserting in lieu thereof
"$25,228"; "$28,636"; "$34,613"; "$43,446"; "$49,231"; "$27,251";
"$31,239"; "$37,986"; "$49,140"; and "$53,942", respectively.
(f) SECTION 231 LIMITS. -- Section 231(c)(2) of the National Housing
Act "12 USC 1715v" is amended --
(1) by striking out "$18,450", "$20,625", "$24,630", "$29,640",
and "$34,846" and inserting in lieu thereof "$23,985", "$26,813",
"$32,019", "$38,532", and "$45,300", respectively; and
(2) by striking out "$20,962", "$24,030", "$29,220", "$37,800",
and "$41,494" and inserting in lieu thereof "$27,251", "$31,239",
"$37,986", "$49,140", and "$53,942", respectively.
(g) SECTION 234 LIMITS. -- Section 234(e)(3) of the National Housing
Act "12 USC 1715y" is amended --
(1) by striking out "$19,500", "$21,600", "$25,800", "$31,800",
and "$36,000" and inserting in lieu thereof "$25,350", "$28,080",
"$33,540", "$41,340", and "$46,800", respectively; and
(2) by striking out "$22,500", "$25,200", "$30,900", "$38,700",
and "$43,758" and inserting in lieu thereof "$29,250", "$32,760",
"$40,170", "$50,310", and "$56,885", respectively.
(h) LIMITS FOR MULTIFAMILY PROJECTS IN HIGH-COST AREAS. -- Section
207(c)(3), the second proviso of section 213(b)(2), "12 USC 1713, 1715e,
1715k, 1715l, 1715v, 1715y" the first proviso of section 220(d)(3)(B)
(iii), section 221(d)(3)(ii), section 221(d)(4)(ii), section 231(c)(2),
and section 234(e)(3) of the National Housing Act are each amended by
striking "not to exceed 75 per centum" and all that follows through
"involved) in such an area" and inserting the following: "not to exceed
110 percent in any geographical area where the Secretary finds that cost
levels so require and by not to exceed 140 percent where the Secretary
determines it necessary on a project-by-project basis, but in no case
may any such increase exceed 90 percent where the Secretary determines
that a mortgage purchased or to be purchased by the Government National
Mortgage Association in implementing its special assistance functions
under section 305 of this Act (as such section existed immediately
before November 30, 1983) is involved".
SEC. 427. OPERATING LOSS LOAN INSURANCE.
Section 223(d) of the National Housing Act "12 USC 1715n" is amended
--
(1) by inserting "(1)" after the subsection designation;
(2) by striking the first and second sentences and inserting
the following:
"Notwithstanding any other provision of this Act, the Secretary is
authorized to insure loans made to cover the operating losses of certain
projects that have existing project mortgages insured by the Secretary.
Insurance under this subsection shall be in the Secretary's discretion
and upon such terms and conditions as the Secretary may prescribe, and
shall be provided in accordance with the provisions of this subsection.
For purposes of this subsection, the term 'operating loss' means the
amount by which the sum of the taxes, interest on the mortgage debt,
mortgage insurance premiums, hazard insurance premiums, and the expense
of maintenance and operation of the project covered by the mortgage,
exceeds the income of the project.
"(2) To be eligible for insurance pursuant to this paragraph --
"(A) the existing project mortgage (i) shall have been insured
by the Secretary at any time before or after the date of enactment
of the Housing and Community Development Act of 1987; and (ii)
shall cover any property, other than a property upon which there
is located a 1- to 4-family dwelling;
"(B) the operating loss shall have occurred during the first 24
months after the date of completion of the project, as determined
by the Secretary; and
"(C) the loan shall be in an amount not exceeding the operating
loss.
"(3) To be eligible for insurance pursuant to this paragraph --
"(A) the existing project mortgage (i) shall have been insured
by the Secretary at any time before or after the date of enactment
of the Housing and Community Development Act of 1987; (ii) shall
cover any property, other than a property upon which there is
located a 1- to 4-family dwelling; and (iii) shall not cover a
subsidized project, as defined by the Secretary;
"(B) the loan shall be in an amount not exceeding 80 percent of
the unreimbursed cash contributions made on or after March 18,
1987, by the project owner for the use of the project, during any
period of consecutive months (not exceeding 24 months) in the
first 10 years after the date of completion of the project, as
determined by the Secretary, except that in no event may the
amount of the loan exceed the operating loss during such period;
"(C) the loan shall be made within 10 years after the end of
the period of consecutive months referred to in the preceding
subparagraph; and
"(D) the project shall meet all applicable underwriting and
other requirements of the Secretary at the time the loan is to be
made.
"(4) Any loan insured pursuant to this subsection shall (A) bear
interest at such rate as may be agreed upon by the mortgagor and
mortgagee; (B) be secured in such manner as the Secretary shall
require; (C) be limited to a term not exceeding the unexpired term of
the original mortgage; and (D) be insured under the same section as the
original mortgage. The Secretary may provide insurance pursuant to
paragraph (2) or (3), or pursuant to both such paragraphs, in connection
with an existing project mortgage, except that the Secretary may not
provide insurance pursuant to both such paragraphs in connection with
the same period of months referred to in paragraphs (2)(B) and (3)(B).";
and
(3) by inserting "(5)" before "A loan" at the beginning of the
undesignated paragraph at the end.
SEC. 428. INTEREST CHARGES ON TEMPORARY MORTGAGE ASSISTANCE PAYMENTS
AND ASSIGNMENT OR OTHER ASSISTANCE.
Section 230(a)(5) of the National Housing Act "12 USC 1715u" is
amended by striking the third sentence and inserting the following:
"The interest rate on payments made under this subsection shall be the
rate established under section 1803(c) of title 38, United States Code.
The interest rate to be charged shall be determined when the Secretary
approves assistance under this subsection.".
SEC. 429. MORTGAGE INSURANCE TECHNICAL AMENDMENTS.
(a) ADMINISTRATIVE PROVISIONS. -- The second sentence of section 1
of the National Housing Act "12 USC 1702" is amended by striking the
last comma.
(b) APPLICABILITY. -- Section 9 of the National Housing Act "12 USC
1706d" is amended by inserting the following section heading:
(c) LOAN INSURANCE PROGRAMS. -- Sections 203(k)(3)(B) and 241(b)(3)
of the National Housing Act "12 USC 1709, 1715z-5" are amended --
(1) by striking "mortgagor" each place it appears and inserting
"borrower"; and
(2) by striking "mortgagee" each place it appears and inserting
"financial institution".
(d) MISCELLANEOUS HOUSING INSURANCE. --
(1) Section 223(a)(7) of the National Housing Act "12 USC
1715n" is amended --
(A) in the first proviso, by striking "a rate not in excess of
the maximum rate prescribed under the applicable section or title
of this Act" and inserting the following: "such rate as may be
agreed upon by the mortgagor and the mortgagee";
(B) in the second proviso, by striking "maturity, a principal
obligation, and an interest rate" and inserting the following:
"maturity and a principal obligation"; and
(C) by inserting before the semicolon at the end the following:
", and shall bear interest at such rate as may be agreed upon by
the mortgagor and the mortgagee".
(2) Section 223(d)(1) of the National Housing Act is amended by
striking "bear interest (exclusive of premium charges for
insurance) at not to exceed the per centum per annum currently
permitted for mortgages insured under the section under which it
is to be insured" and inserting the following: "bear interest at
such rate as may be agreed upon by the mortgagor and the
mortgagee".
(e) INSURANCE FOR NURSING HOMES, INTERMEDIATE CARE FACILITIES, AND
BOARD AND CARE HOMES. --
(1) Section 232(b) of the National Housing Act "12 USC 1715w"
is amended --
(A) by indenting as a separate paragraph (in the same manner as
paragraph (1)) "(3) a nursing" and all that follows through "day;
and";
(B) in such new paragraph (3) --
(i) by inserting "the term" after the paragraph designation;
and
(ii) by striking "and" at the end;
(C) by redesignating the second paragraph (3) as paragraph (4);
and
(D) by redesignating paragraph (4) as paragraph (5).
(2) Section 232(i)(2)(B) of the National Housing Act "12 USC
1715w" is amended to read as follows:
"(B) bear interest at such rate as may be agreed upon by the
mortgagor and the mortgagee;".
(f) MULTIFAMILY ASSISTANCE. -- Section 236 of such Act "12 USC
1715z-1" is amended by striking out "(h)" in the last sentence of
subsection (i)(1) and inserting in lieu thereof "(f)(4)".
(g) CO-INSURANCE. --
(1) Section 244(g) of the National Housing Act "12 USC 1715z-9"
is amended --
(A) by striking paragraph (2); and
(B) by redesignating paragraphs (3) through (6) as paragraphs
(2) through (5), respectively.
(2) Section 244(h) of the National Housing Act is amended by
striking "coinsurance" each place it appears and inserting
"co-insurance".
(h) INSURANCE ON HAWAIIAN HOME LANDS. -- Section 247(a)(2) of the
National Housing Act "12 USC 1715z-12" is amended by striking
"Mortgagor" and inserting "mortgagor".
(i) INSURANCE ON INDIAN RESERVATIONS. -- Section 248 of the National
Housing Act "12 USC 1715z-13" is amended --
(1) in subsection (a)(1), by striking "lands" and inserting
"land";
(2) in subsection (a)(2), by striking "lands"; and
(3) in subsection (d), by striking "tribal or trust land" and
inserting "trust or otherwise restricted land".
(j) SHARED APPRECIATION MORTGAGES. -- Section 253 of the National
Housing Act "12 USC 1715z-18" is amended --
(1) in subsection (b), by striking the fourth sentence and
inserting the following: "For purposes of this section, the term
'net appreciated value' means the amount by which the sales price
of the property (less the mortgagor's selling costs) exceeds the
actual project cost after completion, as approved by the
Secretary.";
(2) in the first sentence of subsection (c), by striking "204"
and inserting "207"; and
(3) in subsection (c), by striking the last sentence and
inserting the following: "The term 'original principal face
amount of the mortgage' as used in section 207 shall not include
the mortgagee's share of net appreciated value.".
(k) DEFENSE HOUSING FOR IMPACTED AREAS. -- The first sentence of
section 810(h) of the National Housing Act "12 USC 1748h-2" is amended
--
(1) by striking "(exclusive of premium charges for insurance)
at not to exceed the rate applicable to mortgages insured under
section 207" and inserting the following: "at such rate as may be
agreed upon by the mortgagor and the mortgagee"; and
(2) by striking "not to exceed the rate applicable to mortgages
insured under section 203" and inserting the following: "such
rate as may be agreed upon by the mortgagor and the mortgagee".
SEC. 430. RELEASE OF POOL FUNDS.
(a) SECTION 236. -- Section 236 of the National Housing Act "12 USC
1715z-1" is amended by adding at the end thereof the following:
"(r) The Secretary shall, not later than 45 days after receipt of an
application by the mortgagee, provide interest reduction and rental
assistance payments for the benefit of projects assisted under this
section whose mortgages were made by State or local housing finance
agencies or State or local government agencies for a term equal to the
remaining mortgage term to maturity on projects assisted under this
section to the extent of --
"(1) unexpended balances of amounts of authority as set forth
in certain letter agreements between the Department of Housing and
Urban Development and such State or local housing finance agencies
or State or local government agencies, and
"(2) existing allocation under section 236 contracts on
projects whose mortgages were made by State or local housing
finance agencies or State or local government agencies which are
not being funded, to the extent of such excess allocation, for any
purposes permitted under the provisions of this section, including
without limitation rent supplement and rental assistance payment
unit increases and mortgage increases for any eligible purpose
under this section, including without limitation operating deficit
loans.
An application shall be eligible for assistance under the previous
sentence only if the mortgagee submits the application within 548 days
after the effective date of this subsection, along with a certification
of the mortgagee that amounts hereunder are to be utilized only for the
purpose of either (A) reducing rents or rent increases to tenants, or
(B) making repairs or otherwise increasing the economic viability of a
related project. Unexpended balances referred to in the first sentence
of this subsection which remain after disposition of all such
applications is favorably concluded shall be rescinded. The calculation
of the amount of assistance to be provided under an interest reduction
contract pursuant to this subsection shall be made on the basis of an
assumed mortgage term equal to the lesser of a 40-year amortization
period or the term of that part of the mortgage which relates to the
additional assistance provided under this subsection, even though the
additional assistance may be provided for a shorter period. The
authority conferred by this subsection to provide interest reduction and
rental assistance payments shall be available only to the extent
approved in appropriation Acts.".
(b) RENT SUPPLEMENT PROGRAM. -- Section 101 of the Housing and Urban
Development Act "12 USC 1701s" of 1965 is amended by adding at the end
thereof the following:
"(m) The Secretary shall, not later than 45 days after receipt of an
application by the mortgagee, provide interest reduction and rental
assistance payments for the benefit of projects assisted under this
section whose mortgages were made by State or local housing finance
agencies or State or local government agencies for a term equal to the
remaining mortgage term to maturity on projects assisted under this
section to the extent of --
"(1) unexpended balances of amounts of authority as set forth
in certain letter agreements between the Department of Housing and
Urban Development and such State or local housing finance agencies
or State or local government agencies, and
"(2) existing allocation under section 236 contracts on
projects whose mortgages were made by State or local housing
finance agencies or State or local government agencies which are
not being funded, to the extent of such excess allocation, for any
purposes permitted under the provisions of this section.
An application shall be eligible for assistance under the previous
sentence only if the mortgagee submits the application within 548 days
after the effective date of this subsection, along with a certification
of the mortgagee that amounts are to be utilized hereunder for the
purpose of either (A) reducing rents or rent increases to tenants, or
(B) making repairs or otherwise increasing the economic viability of a
related project. Unexpended balances referred to in the first sentence
of this subsection which remain after disposition of all such
applications is favorably concluded shall be rescinded. The authority
conferred by this subsection to provide interest reduction and rental
assistance payments shall be available only to the extent approved in
appropriation Acts.".
SEC. 441. LIMITATIONS ON CERTAIN SECONDARY MORTGAGE MARKET FEES.
(a) FEDERAL NATIONAL MORTGAGE ASSOCIATION. -- Section 304 of the
Federal National Mortgage Association Charter Act "12 USC 1719" is
amended by adding at the end the following new subsection:
"(f) Except for fees paid pursuant to section 309(g), no fee or
charge may be assessed or collected by the United States (including any
executive department, agency, or independent establishment of the United
States) on or with regard to the purchase, acquisition, sale, pledge,
issuance, guarantee, or redemption of any mortgage, asset, obligation,
trust certificate of beneficial interest, or other security by the
corporation. No provision of this subsection shall affect the purchase
of any obligation by the Secretary of the Treasury pursuant to
subsection (c).".
(b) FEDERAL HOME LOAN MORTGAGE CORPORATION. -- Section 306 of the
Federal Home Loan Mortgage Corporation Act "12 USC 1455" is amended by
adding at the end the following new subsection:
"(i) Except for fees paid pursuant to section 303(c) or 306(c), no
fee or charge may be assessed or collected by the United States
(including any executive department, agency, or independent
establishment of the United States) on or with regard to the purchase,
acquisition, sale, pledge, issuance, guarantee, or redemption of any
mortgage, asset, obligation, or other security by the Corporation. No
provision of this subsection shall affect the purchase of any obligation
by any Federal home loan bank pursuant to section 303(a).".
SEC. 442. FNMA CUMULATIVE VOTING.
Section 303(a) of the Federal National Mortgage Association Charter
Act "12 USC 1718" is amended by inserting after the first sentence the
following new sentence: "The corporation may eliminate such rights of
cumulative voting by a resolution adopted by its board of directors and
approved by the holders of a majority of the shares of common stock
voting in person or by proxy at the annual meeting, or other special
meeting, at which such resolution is considered.".
SEC. 443. PERMANENT AUTHORITY TO PURCHASE SECOND MORTGAGES ON
SINGLE-FAMILY PROPERTIES.
(a) FEDERAL NATIONAL MORTGAGE ASSOCIATION. -- Section
302(b)(5)(A)(i) of the Federal National Mortgage Association Charter Act
"12 USC 1717" is amended by striking "through March 15, 1988,".
(b) FEDERAL HOME LOAN MORTGAGE CORPORATION. -- Section
305(a)(4)(A)(i) of the Federal Home Loan Mortgage Corporation Act "12
USC 1454" is amended by striking "through March 15, 1988,".
SEC. 444. PERIOD FOR APPROVAL OF ACTIONS OF FNMA.
Section 309(i) of the Federal National Mortgage Association Charter
Act "12 USC 1723a" is amended in the second sentence by inserting before
the period at the end the following: ", but such 45-day period may not
be extended for any other reason or for any period in addition to or
other than such 15-day period".
SEC. 445. PROHIBITION OF LIMITATION ON FHLMC MORTGAGE OPERATIONS.
Section 305 of the Federal Home Loan Mortgage Corporation Act "12 USC
1454" is amended by adding at the end the following new subsection:
"(c) The Board of Directors may not impose any annual limitation on
the maximum aggregate principal amount of mortgages purchased by the
Corporation.".
SEC. 446. LIMITATION ON GNMA GUARANTEES OF MORTGAGE-BACKED
SECURITIES.
Section 306(g)(2) of the Federal National Mortgage Association
Charter Act "12 USC 1721" is amended to read as follows:
"(2) Notwithstanding any other provision of law and subject only to
the absence of qualified requests for guarantees, to the authority
provided in this subsection, and to any funding limitation approved in
appropriation Acts, the Association shall enter into commitments to
issue guarantees under this subsection in an aggregate amount of
$150,000,000,000 for fiscal year 1988, and $156,000,000,000 for fiscal
year 1989.".
SEC. 501. COMMUNITY DEVELOPMENT AUTHORIZATIONS.
(a) COMMUNITY DEVELOPMENT BLOCK GRANTS. -- The second sentence of
section 103 of the Housing and Community Development Act "42 USC 5303"
of 1974 is amended to read as follows: "There are authorized to be
appropriated for purposes of assistance under sections 106 and 107
$3,000,000,000 for fiscal year 1988, and $3,000,000,000 for fiscal year
1989.".
(b) DISCRETIONARY FUND. --
(1) The first sentence of section 107(a) of the Housing and
Community Development Act "42 USC 5307" of 1974 is amended to read
as follows: "Of the total amount provided in appropriation Acts
under section 103 for fiscal years 1988 and 1989, $60,000,000 may
be set aside in each year in a special discretionary fund for
grants under subsection (b).".
(2) Section 107 of the Housing and Community Development Act
"42 USC 5307" of 1974 is amended --
(A) by redesignating subsections (c) and (d) as subsections (d)
and (e) respectively; and
(B) by inserting after subsection (b) the following new
subsection:
"(c) Of the amount set aside for use under subsection (b) in any
fiscal year, the Secretary shall, to the extent approved in
appropriation Acts, make available not less than $3,000,000 in the form
of grants to institutions of higher education, either directly or
through areawide planning organizations or States, for the purpose of
providing assistance to economically disadvantaged and minority students
who participate in community development work study programs and are
enrolled in full-time graduate or undergraduate programs in community
and economic development, community planning, or community management.".
(c) URBAN DEVELOPMENT ACTION GRANTS. -- Section 119(a) of the
Housing and Community Development Act "42 USC 5318" of 1974 is amended
by striking the second and last sentences and inserting the following
new sentences: "There are authorized to be appropriated to carry out
this section $225,000,000 for fiscal year 1988, and $225,000,000 for
fiscal year 1989. Any amount appropriated under this subsection shall
remain available until expended.".
SEC. 502. TARGETING OF BENEFITS TO PERSONS OF LOW AND MODERATE
INCOME.
(a) PRIMARY OBJECTIVE. -- Section 101(c) of the Housing and
Community Development Act "42 USC 5301" of 1974 is amended in the second
sentence by striking "51 percent" and inserting "60 percent".
(b) SPECIFIC OBJECTIVES. -- Section 101(c)(6) of the Housing and
Community Development Act of 1974 is amended by striking "to attract
persons of higher income".
(c) CERTIFICATION. -- Section 104(b)(3) of the Housing and Community
Development Act "42 USC 5403" of 1974 is amended by striking "51
percent" and inserting "60 percent".
SEC. 503. CITY AND COUNTY CLASSIFICATIONS.
(a) METROPOLITAN CITY. -- Section 102(a)(4) of the Housing and
Community Development Act "42 USC 5302" of 1974 is amended --
(1) in the second sentence, by striking "March 15, 1988" and
inserting "September 30, 1989";
(2) by striking out the third sentence and inserting in lieu
thereof the following: "Any unit of general local government that
becomes eligible to bde classified as a metropolitan city, and was
not classified as a metropolitan city in the immediately preceding
fiscal year, may, upon submission of written notification to the
Secretary, defer its classification as a metropolitan city for all
purposes under this title, if it elects to have its population
included in an urban county under subsection (d). Notwithstanding
the second sentence of this paragraph, a city may elect not to
retain its classification as a metropolitan city for fiscal year
1988 or 1989."; and
(3) by adding at the end thereof the following new sentence:
"Any city classified as a metropolitan city pursuant to the first
or second sentence of this paragraph, and that no longer qualifies
as a metropolitan city under such first or second sentence in a
fiscal year beginning after fiscal year 1989, shall retain its
classification as a metropolitan city for such fiscal year and the
succeeding fiscal year, except that in such succeeding fiscal year
(A) the amount of the grant to such city shall be 50 percent of
the amount calculated under section 106(b); and (B) the remaining
50 percent shall be added to the amount allocated under section
106(d) to the State in which the city is located and the city
shall be eligible in such succeeding fiscal year to receive a
distribution from the State allocation under section 106(d) as
increased by this sentence.".
(b) URBAN COUNTY. -- Section 102(a)(6) of the Housing and Community
Development Act "42 USC 5302" of 1974 is amended to read as follows:
"(6)(A) The term 'urban county' means any county within a
metropolitan area which --
"(i) is authorized under State law to undertake essential
community development and housing assistance activities in its
unincorporated areas, if any, which are not units of general local
government, and
"(ii) either --
"(I) has a population of 200,000 or more (excluding the
population of metropolitan cities therein) and has a combined
population of 100,000 or more (excluding the population of
metropolitan cities therein) in such unincorporated areas and in
its included units of general local government (and in the case of
counties having a combined population of less than 200,000, the
areas and units of general local government must include the areas
and units of general local government which in the aggregate have
the preponderance of the persons of low and moderate income who
reside in the county) (a) in which it has authority to undertake
essential community development and housing assistance activities
and which do not elect to have their population excluded, or (b)
with which it has entered into cooperation agreements to undertake
or to assist in the undertaking of essential community development
and housing assistance activities, or
"(II) has a population in excess of 100,000, a population
density of at least 5,000 persons per square mile, and contains
within its boundaries no incorporated places as defined by the
United States Bureau of the Census.
"(B) In order to permit an orderly transition of each county losing
its classification as an urban county by reason of a decrease in
population, any county classified as or deemed to be an urban county
under this paragraph for purposes of receiving assistance under any
section of this title for fiscal year 1983 or subsequent years shall
retain such qualification for purposes of receiving such assistance
through September 30, 1989, or for such longer period covered by a
cooperation agreement entered into during fiscal year 1984, except that
the provisions of this subparagraph shall not apply with respect to any
county losing its classification as an urban county by reason of the
election of any unit of general local government included in such county
to have its population excluded under clause (ii)(I)(a) of subparagraph
(A) or to not renew a cooperation agreement under clause (ii)(I)(b) of
such subparagraph.
"(C) Notwithstanding the combined population amount set forth in
clause (ii) of subparagraph (A), a county shall also qualify as an urban
county for purposes of assistance under section 106 if such county --
"(i) complies with all other requirements set forth in the
first sentence;
"(ii) has, according to the most recent available decennial
census data, a combined population between 190,000 and 199,999,
inclusive (excluding the population of metropolitan cities
therein) in all its unincorporated areas that are not units of
general local government and in all units of general local
government located within such county;
"(iii) had a population growth rate of not less than 15 percent
during the most recent 10-year period measured by applicable
censuses; and
"(iv) has submitted data satisfactory to the Secretary that it
has a combined population of not less than 200,000 (excluding the
population of metropolitan cities therein) in all its
unincorporated areas that are not units of general local
government and in all units of general local government located
within such county.
"(D) Such term also includes a county that --
"(i) has a combined population in excess of 175,000, has more
than 50 percent of the housing units of the area unsewered, and
has an aquifer that was designated before March 1, 1987, a sole
source aquifer by the Environmental Protection Agency;
"(ii) has taken steps, which include at least one public
referendum, to consolidate substantial public services with an
adjoining metropolitan city, and in the opinion of the Secretary,
has consolidated these services with the city in an effort that is
expected to result in the unification of the two governments
within 6 years of the date of enactment of the Housing and
Community Development Act of 1987; or
"(iii) had a population between 180,000 and 200,000 on October
1, 1987, was eligible for assistance under section 119 of the
Housing and Community Development Act of 1974 in fiscal year 1986,
and does not contain any metropolitan cities.
"(E) Any county classified as an urban county pursuant to
subparagraph (A), (B), or (C) of this paragraph, and that no longer
qualifies as an urban county under such subparagraph in a fiscal year
beginning after fiscal year 1989, shall retain its classification as an
urban county for such fiscal year and the succeeding fiscal year, except
that in such succeeding fiscal year (i) the amount of the grant to such
an urban county shall be 50 percent of the amount calculated under
section 106(b); and (ii) the remaining 50 percent shall be added to the
amount allocated under section 106(d) to the State in which the urban
county is located and the urban county shall be eligible in such
succeeding fiscal year to receive a distribution from the State
allocation under section 106(d) as increased by this sentence.".
(c) INCLUSION OF UNITS OF GENERAL LOCAL GOVERNMENT IN URBAN COUNTIES.
-- Section 102(d) of the Housing and Community Development Act "42 USC
5302" of 1974 is amended by striking the last sentence.
SEC. 504. ELIGIBLE ACTIVITIES.
(a) ELIGIBLE ACTIVITIES. -- Section 105(a)(15) of the Housing and
Community Development Act "42 USC 5305" of 1974 is amended by striking
out "grants" both places it appears and inserting in lieu thereof
"assistance".
(b) ENERGY USE STRATEGIES. -- Section 105(a)(16) of such Act "42 USC
5305" is amended to read as follows:
"(16) activities necessary to the development of energy use
strategies related to a recipient's development goals, to assure
that those goals are achieved with maximum energy efficiency,
including items such as --
"(A) an analysis of the manner in, and the extent to, which
energy conservation objectives will be integrated into local
government operations, purchasing and service delivery, capital
improvements budgeting, waste management, district heating and
cooling, land use planning and zoning, and traffic control,
parking, and public transportation functions; and
"(B) a statement of the actions the recipient will take to
foster energy conservation and the use of renewable energy
resources in the private sector, including the enactment and
enforcement of local codes and ordinances to encourage or mandate
energy conservation or use of renewable energy resources,
financial and other assistance to be provided (principally for the
benefit of low- and moderate-income persons) to make energy
conserving improvements to residential structures, and any other
proposed energy conservation activities;".
SEC. 505. STATEMENT OF ACTIVITIES AND REVIEW.
Section 104(a)(1) of the Housing and Community Development Act "42
USC 5304" of 1974 is amended by striking out the last sentence. 4 SEC.
506. ALLEVIATION OF LAKEFRONT FLOODING AND EROSION.
Section 104(b)(3) of the Housing and Community Development Act of
1974 is amended --
(1) by inserting "(A)" after "except that"; and
(2) by inserting before the semicolon at the end the following:
"; and (B) a grantee that borders on the Great Lakes and that
experiences significant adverse financial and physical effects due
to lakefront erosion or flooding may include in the projected use
of funds activities that are clearly designed to alleviate the
threat posed, and rectify the damage caused, by such erosion or
flooding if such activities will principally benefit persons of
low and moderate income and the grantee certifies that such
activities are necessary to meet other needs having a particular
urgency".
SEC. 507. HOUSING ASSISTANCE PLANS.
(a) HOUSING PRESERVATION. -- Section 104(c)(1) of the Housing and
Community Development Act of 1974 is amended --
(1) by striking "and" at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C) and
inserting "; and"; and
(3) by adding at the end the following new subparagraph:
"(D) specifies activities that will be undertaken annually to
minimize displacement and preserve or expand the availability of
housing for persons of low and moderate income, such as the
preservation of single room occupancy housing and the development
by public and private nonprofit organizations of vacant properties
that become available under in rem proceedings, and specifies
separately the activities that will be undertaken for persons of
low income and the activities that will be undertaken for persons
of moderate income.".
(b) TECHNICAL AMENDMENTS. -- Section 104(c)(1) of the Housing and
Community Development Act "42 USC 5304" of 1974 is amended --
(1) by striking "lower income persons" each place it appears
and inserting "persons of low and moderate income"; and
(2) in subparagraph (C)(ii), by striking "low-income persons"
and inserting "persons of low and moderate income".
SEC. 508. CITIZEN PARTICIPATION PLAN.
Section 104(a) of the Housing and Community Development Act of 1974
is amended by adding at the end thereof the following:
"(3) A grant under section 106 may be made only if the grantee
certifies that it is following a detailed citizen participation plan
which --
"(A) provides for and encourages citizen participation, with
particular emphasis on participation by persons of low and
moderate income who are residents of slum and blight areas and of
areas in which section 106 funds are proposed to be used, and in
the case of a grantee described in section 106(a), provides for
participation of residents in low and moderate income
neighborhoods as defined by the local jurisdiction;
"(B) provides citizens with reasonable and timely access to
local meetings, information, and records relating to the grantee's
proposed use of funds, as required by regulations of the
Secretary, and relating to the actual use of funds under this
title;
"(C) provides for technical assistance to groups representative
of persons of low and moderate income that request such assistance
in developing proposals with the level and type of assistance to
be determined by the grantee;
"(D) provides for public hearings to obtain citizen views and
to respond to proposals and questions at all stages of the
community development program, including at least the development
of needs, the review of proposed activities, and review of program
performance, which hearings shall be held after adequate notice,
at times and locations convenient to potential or actual
beneficiaries, and with accommodation for the handicapped;
"(E) provides for a timely written answer to written complaints
and grievances, within 15 working days where practicable; and
"(F) identifies how the needs of non-English speaking residents
will be met in the case of public hearings where a significant
number of non-English speaking residents can be reasonably
expected to participate.
This paragraph may not be construed to restrict the responsibility or
authority of the grantee for the development and execution of its
community development program.".
SEC. 509. CONSERVING NEIGHBORHOODS AND HOUSING BY PROHIBITING
DISPLACEMENT.
(a) IN GENERAL. -- Section 104 of the Housing and Community
Development Act of 1974 is amended --
(1) by redesignating subsections (d) through (j) as subsections
(e) through (k), respectively; and
(2) by inserting after subsection (c) the following new
subsection:
"(d)(1) A grant under section 106 or 119 may be made only if the
grantee certifies that it is following a residential antidisplacement
and relocation assistance plan. A grantee receiving a grant under
section 106(a) or section 119 shall so certify to the Secretary. A
grantee receiving a grant under section 106(d) shall so certify to the
State.
"(2) The residential antidisplacement and relocation assistance plan
shall in connection with a development project assisted under section
106 or 119 --
"(A) in the event of such displacement, provide that --
"(i) governmental agencies or private developers shall provide
within the same community comparable replacement dwellings for the
same number of occupants as could have been housed in the occupied
and vacant occupiable low and moderate income dwelling units
demolished or converted to a use other than for housing for low
and moderage income persons, and provide that such replacement
housing may include existing housing assisted with project based
assistance provided under section 8 of the United States Housing
Act of 1937;
"(ii) such comparable replacement dwellings shall be designed
to remain affordable to persons of low and moderate income for 10
years from the time of initial occupancy;
"(iii) relocation benefits shall be provided for all low or
moderate income persons who occupied housing demolished or
converted to a use other than for low or moderate income housing,
including reimbursement for actual and reasonable moving expenses,
security deposits, credit checks, and other moving-related
expenses, including any interim living costs; and in the case of
displaced persons of low and moderate income, provide either --
"(I) compensation sufficient to ensure that, for a 5-year
period, the displaced families shall not bear, after relocation, a
ratio of shelter costs to income that exceeds 30 percent; or
"(II) if elected by a family, a lump-sum payment equal to the
capitalized value of the benefits available under subclause (I) to
permit the household to secure participation in a housing
cooperative or mutual housing association;
"(iv) persons displaced shall be relocated into comparable
replacement housing that is --
"(I) decent, safe, and sanitary;
"(II) adequate in size to accommodate the occupants;
"(III) functionally equivalent; and
"(IV) in an area not subject to unreasonably adverse
environmental conditions;
"(B) provide that persons displaced shall have the right to
elect, as an alternative to the benefits under this subsection, to
receive benefits under the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.)
if such persons determine that it is in their best interests to do
so; and
"(C) provide that where a claim for assistance under
subparagraph (A)(iv) is denied by a grantee, the claimant may
appeal to the Secretary in the case of a grant under section 106
or 119 or to the appropriate State official in the case of a grant
under section 106(d), and that the decision of the Secretary or
the State official shall be final unless a court determines the
decision was arbitrary and capricious.
"(3) Paragraphs (2)(A)(i) and (2)(A)(ii) shall not apply in any case
in which the Secretary finds, on the basis of objective data, that there
is available in the area an adequate supply of habitable affordable
housing for low and moderate income persons. A determination under this
paragraph is final and nonreviewable.".
(b) EFFECTIVE DATE. -- The amendment made by subsection (a) "42 USC
5304 note" shall take effect on October 1, 1988.
SEC. 510. LIMITED NEW CONSTRUCTION OF HOUSING UNDER COMMUNITY
DEVELOPMENT BLOCK GRANT PROGRAM.
Section 105(a) of the Housing and Community Development Act "42 USC
5305" of 1974 is amended --
(1) by striking out "and" at the end of paragraph (17);
(2) by striking out the period at the end of paragraph (18) and
inserting in lieu thereof "; and"; and
(3) by adding at the end thereof the following new paragraph:
"(19) provision of assistance to facilitate substantial
reconstruction of housing owned and occupied by low and moderate
income persons (A) where the need for the reconstruction was not
determinable until after rehabilitation under this section had
already commenced, or (B) where the reconstruction is part of a
neighborhood rehabilitation effort and the grantee (i) determines
the housing is not suitable for rehabilitation, and (ii)
demonstrates to the satisfaction of the Secretary that the cost of
new construction and less than the fair market value of the
property after substantial reconstruction.".
SEC. 511. AVAILABILITY OF COMMUNITY DEVELOPMENT BLOCK GRANTS FOR
UNIFORM EMERGENCY TELEPHONE NUMBER SYSTEMS.
Section 105(c)(2) of the Housing and Community Development Act of
1974 is amended --
(1) by inserting "(A)" after the paragraph designation;
(2) by redesignating subparagraphs (A) and (B) as clauses (i)
and (ii), respectively; and
(3) by adding at the end thereof the following new
subparagraph:
"(B) The requirements of subparagraph (A) do not prevent the use of
assistance under this title for the development, establishment, and
operation for not to exceed 2 years after its establishment of a uniform
emergency telephone number system if the Secretary determines that --
"(i) such system will contribute substantially to the safety of
the residents of the area served by such system;
"(ii) not less than 51 percent of the use of the system will be
by persons of low and moderate income; and
"(iii) other Federal funds received by the grantee are not
available for the development, establishment, and operation of
such system due to the insufficiency of the amount of such funds,
the restrictions on the use of such funds, or the prior commitment
of such funds for other purposes by the grantee.
The percentage of the cost of the development, establishment, and
operation of such a system that may be paid from assistance under this
title and that is considered to benefit low and moderate income persons
is the percentage of the population to be served that is made up of
persons of low and moderate income.".
SEC. 512. STATE CERTIFICATIONS FOR RECEIVING COMMUNITY DEVELOPMENT
BLOCK GRANTS FOR NONENTITLEMENT AREAS.
Section 106(d)(2) of the Housing and Community Act "42 USC 5306" of
1974 is amended --
(1) in subparagraph (C), by striking "the Governor must certify
that the State" and inserting "the State must certify that it";
and
(2) in subparagraph (D), by striking "the Governor of each
State" and inserting "the State".
SEC. 513. ADMINISTRATIVE EXPENSES OF STATES DISTRIBUTING FUNDS TO
NONENTITLEMENT AREAS.
Section 106(d)(3)(A) of the Housing and Community Development Act of
1974 is amended by striking "$102,000" and inserting "$100,000".
SEC. 514. COMMUNITY DEVELOPMENT BLOCK GRANT LOAN GUARANTEES.
(a) LIMITATION ON COMMITMENTS. -- The last sentence of section
108(a) of the Housing and Community Development Act "42 USC 5308" of
1974 is amended --
(1) by striking "during fiscal year 1984"; and
(2) by striking "$225,000,000" and inserting "$150,000,000
during fiscal year 1988, and $153,000,000 during fiscal year
1989".
(b) PROHIBITION ON FEES. -- Section 108 of the Housing and Community
Development Act of 1974 is amended by adding at the end the following
new subsection:
"(m) No fee or charge may be imposed by the Secretary or any other
Federal agency on or with respect to a guarantee made by the Secretary
under this section after the date of the enactment of the Housing and
Community Development Act of 1987.".
(c) ELIGIBLE USES OF LOAN GUARANTEES. -- Section 108(a) of the
Housing and Community Development Act of 1974 is amended in the first
sentence --
(1) by inserting "(1)" after "purposes of financing"; and
(2) by inserting before the period at the end the following:
"; (2) housing rehabilitation; or (3) economic development
activities permitted under paragraphs (14), (15), and (17) of
section 105(a)".
SEC. 515. URBAN DEVELOPMENT ACTION GRANT SELECTION CRITERIA.
(a) PROJECT QUALITY CRITERIA. -- Section 119(d)(1) of the Housing
and Community Development Act "42 USC 5318" of 1974 is amended --
(1) by inserting a dash before "(A)";
(2) by indenting subparagraphs (A) and (B) in the same manner
as subparagraphs (C) and (D), as inserted by this subsection;
(3) in subparagraph (A), by striking out "as the primary
criterion,";
(4) by striking out "and" at the end of subparagraph (B); and
(5) by striking out subparagraph (C) and inserting in lieu
thereof the following new subparagraphs:
"(C) the following other criteria:
"(i) the extent to which the grant will stimulate economic
recovery by leveraging private investment;
"(ii) the number of permanent jobs to be created and their
relation to the amount of grant funds requested;
"(iii) the proportion of permanent jobs accessible to lower
income persons and minorities, including persons who are
unemployed;
"(iv) the extent to which the project will retain jobs that
will be lost without the provision of a grant under this section;
"(v) the extent to which the project will relieve the most
pressing employment or residential needs of the applicant by --
"(I) reemploying workers in a skill that has recently suffered
a sharp increase in unemployment locally;
"(II) retraining recently unemployed residents in new skills;
"(III) providing training to increase the local pool of skilled
labor; or
"(IV) producing decent housing for low- and moderate-income
persons in cases where such housing is in severe shortage in the
area of the applicant, except that an application shall be
considered to produce housing for low- and moderate-income persons
under this clause only if such application proposes that (a) not
less than 51 percent of all funds available for the project shall
be used for dwelling units and related facilities; and (b) not
less than 30 percent of all funds used for dwelling units and
related facilities shall be used for dwelling units to be occupied
by persons of low and moderate income, or not less than 20 percent
of all dwelling units made available to occupancy using such funds
shall be occupied by persons of low and moderate income, whichever
results in the occupancy of more dwelling units by persons of low
and moderate income;
"(vi) the impact of the proposed activities on the fiscal base
of the city or urban county and its relation to the amount of
grant funds requested;
"(vii) the extent to which State or local Government funding or
special economic incentives have been committed; and
"(viii) the extent to which the project will have a substantial
impact on physical and economic development of the city or urban
county, the proposed activities are likely to be accomplished in a
timely fashion with the grant amount available, and the city or
urban county has demonstrated performance in housing and community
development programs; and
"(D) additional consideration for projects with the following
characteristics:
"(i) projects to be located within a city or urban county which
did not receive a preliminary grant approval under this section
during the 12-month period preceding the date on which
applications are required to be submitted for the grant
competition involved; and
"(ii) twice the amount of the additional consideration provided
under clause (i) for projects to be located in cities or urban
counties which did not receive a preliminary grant approval during
the 24-month period preceding the date on which applications under
this section are required to be submitted for the grant
competition involved.
If a city or urban county has submitted and has pending more
than one application, the additional consideration provided by
subparagraph (D) of the preceding sentence shall be available only
to the project in such city or urban county which received the
highest number of points under subparagraph (C) of such
sentence.".
(b) SELECTION LIMITATIONS AND CRITERIA WEIGHT. -- Section 119(d) of
the Housing and Community Development Act "42 USC 5318" of 1974 is
amended by adding at the end thereof the following new paragraphs:
"(3) The Secretary shall award points to each application as follows:
"(A) not more than 35 points on the basis of the criteria
referred to in paragraph (1)(A);
"(B) not more than 35 points on the basis of the criteria
referred to in paragraph (1)(B);
"(C) not more than 33 points on the basis of the criteria
referred to in paragraph (1)(C); and
"(D)(i) 1 additional point on the basis of the criterion
referred to in paragraph (1)(D)(i); or
"(ii) 2 additional points on the basis of the criterion
referred to in paragraph (1)(D)(ii).
"(4) The Secretary shall distribute grant funds under this section so
that to the extent practicable during each funding cycle --
"(A) 65 percent of the funds is first made available utilizing
all of the criteria set forth in paragraph (1); and
"(B) 35 percent of the funds is then made available solely on
the basis of the factors referred to in subparagraphs (C) and (D)
of paragraph (1).
"(5)(A) Within 30 days of the start of each fiscal year, the
Secretary shall announce the number of competitions for grants to be
held in that fiscal year. The number of competitions shall be not less
than two nor more than three.".
"(B) Each competition for grants described in any clause of
subparagraph (A) shall be for an amount equal to the sum of --
"(i) approximately the amount of the funds available for such
grants for the fiscal year divided by the number of competitions
for those funds;
"(ii) any funds available for such grants in any previous
competition that are not awarded; and
"(iii) any funds available for such grants in any previous
competition that are recaptured.
"(6) In an application under this subsection, an urban county may use
data relating to the criteria under paragraph (1) that reflect distress
conditions of census tracts within a radius of 15 miles of the proposed
project and within that urban county and in metropolitan cities within
that urban county, except that if any data reflecting conditions in a
metropolitan city with a population of 100,000 or more are included,
then data reflecting conditions in any metropolitan city with a
population of 75,000 or more may be used only with the consent of that
metropolitan city.".
(c) USE OF REPAID GRANT FUNDS. -- Section 119(f) of the Housing and
Community Development Act of 1974 is amended by adding at the end
thereof the following: "In any case in which the project proposes the
repayment to the applicant of the grant funds, such funds shall be made
available by the applicant for economic development activities that are
eligible activities under this section or section 104. The applicant
shall annually provide the Secretary with a statement of the projected
receipt and use of repaid grant funds during the next year together with
a report acceptable to the Secretary on the use of such funds during the
most recent preceding full fiscal year of the applicant.".
(d) NONDISCRIMINATION. -- Section 119(r) of the Housing and
Community Development Act "42 USC 5318" of 1974 is amended to read as
follows:
"(r) In utilizing the discretion of the Secretary when providing
assistance and applying selection criteria under this section, the
Secretary may not discriminate against applications on the basis of (1)
the type of activity involved, whether such activity is primarily
housing, industrial, or commercial; or (2) the type of applicant,
whether such applicant is a city or urban county.".
(e) REPORTS OF COMPTROLLER GENERAL. -- "42 USC 5318 note"
(1)(A) Not later than the expiration of the 1-year period
following the date of enactment of this Act and every 3 years
thereafter, the Comptroller General of the United States shall
prepare and submit to the Congress a comprehensive report
evaluating the eligibility standards and selection criteria
applicable under section 119 of the Housing and Community
Development Act of 1974.
(B) Such report shall evaluate in detail the standards and
criteria specified in such section that measure the level or
comparative degree of economic distress of cities and urban
counties and the effect of the grants awarded on the basis of such
standards and criteria on stimulating the maximum economic
development activity.
(C) Such report shall also evaluate in detail the extent to
which the economic and social data utilized by the Secretary in
awarding grants under such section is current and accurate, and
shall compare the data used by the Secretary with other available
data. The Comptroller General shall make recommendations to the
Congress on whether or not other data should be collected by the
Federal Government in order to fairly and accurately distribute
grants under such section based on the level or comparative degree
of economic distress. The Comptroller General shall also make
recommendations on whether or not existing data should be
collected more frequently in order to ensure that timely data is
used to evaluate grant applications under such section.
(2) Not later than the expiration of the 3-month period
following the date of the final competition for grants for fiscal
year 1988 under section 119 of the Housing and Community
Development Act of 1974, the Comptroller General of the United
States shall prepare and submit to the Congress a comprehensive
report describing the effect of the amendments made by this
section on --
(A) the targeting of grant funds to cities and urban counties
having the highest level or degree of economic distress;
(B) the distribution of grants funds among regions of the
United States;
(C) the number and types of projects receiving grants;
(D) the per capita funding levels for each city, urban county,
or identifiable community described in subsection (p) of such
section 119, receiving assistance under such section 119; and
(E) the stimulation of the maximum economic development
activity.
(f) REGULATIONS. -- "42 USE 5318 note" The Secretary of Housing and
Urban Development shall issue such regulations as may be necessary to
carry out the amendments made by this section. Such regulations shall
be published for comment in the Federal Register not later than 60 days
after the date of enactment of this Act. The provisions of section
119(d)(1)(D), section 119(d)(3), and section 119(d)(4) of the Housing
and Community Development Act of 1974, shall take effect on the date of
enactment of this Act.
(g) APPLICABILITY. --
(1) IN GENERAL. -- "42 USC 5318 note" The amendments made by
this section shall be applicable to the making of urban
development action grants that have not received the preliminary
approval of the Secretary of Housing and Urban Development before
the date on which final regulations issued by the Secretary under
subsection (f) become effective. For the fiscal year in which the
amendments made by this section become applicable, such amendments
shall only apply with respect to the aggregate amoung awarded for
such grants on or after such effective date.
(2) SUNSET OF URBAN COUNTY COMPETITION RULE. -- Effective
October 1, 1989, section 119(d)(6) "42 USC 5318" of the Housing
and Community Development Act of 1974 is repealed.
(h) LIMITATION ON GRANT AMOUNTS. -- Section 119 of the Housing and
Community Development Act of 1974 is amended by adding at the end
thereof the following:
"(s) For fiscal years 1988 and 1989, the maximum grant amount for any
project under this section is $10,000,000.".
(i) CONSIDERATION OF CERTAIN COUNTIES AS CITIES UNDER URBAN
DEVELOPMENT ACTION GRANT PROGRAM. -- Section 119(n)(1) of the Housing
and Community Development Act of 1974 is amended by adding at the end
thereof the following new sentence: "Such term also includes the
counties of Kauai, Maui, and Hawaii in the State of Hawaii.".
SEC. 516. PROHIBITION ON USE OF URBAN DEVELOPMENT ACTION GRANTS FOR
BUSINESS RELOCATIONS.
(a) IN GENERAL. -- Section 119(h) of the Housing and Community
Development Act of 1974 is amended --
(1) by inserting after the subsection designation the
following: "(1) SPECULATIVE PROJECTS. -- ";
(2) by adding at the end of paragraph (1) (as so redesignated
by paragraph (1) of this subsection) the following new sentence:
"The provisions of this paragraph shall apply only to projects
that do not have identified intended occupants."; and
(3) by adding at the end the following new paragraphs:
"(2) PROJECTS WITH IDENTIFIED INTENDED OCCUPANTS. -- No assistance
may be provided or utilized under this section for any project with
identified intended occupants that is likely to facilitate --
"(A) a relocation of any operation of an industrial or
commercial plant or facility or other business establishment --
"(i) from any city, urban county, or identifiable community
described in subsection (p), that is eligible for assistance under
this section; and
"(ii) to the city, urban county, or identifiable community
described in subsection (p), in which the project is located; or
"(B) an expansion of any such operation that results in a
reduction of any such operation in any city, county, or community
described in subparagraph (A)(i).
"(3) SIGNIFICANT AND ADVERSE EFFECT. -- The restrictions established
in paragraph (2) shall not apply if the Secretary determines that the
relocation or expansion does not significantly and adversely affect the
employment or economic base of the city, county, or community from which
the relocation or expansion occurs.
"(4) APPEAL OF ADVERSE DETERMINATION. -- Following notice of intent
to withhold, deny, or cancel assistance under paragraph (1) or (2), the
Secretary shall provide a period of not less than 90 days in which the
applicant can appeal to the Secretary the withholding, denial, or
cancellation of assistance. Notwithstanding any other provision of this
section, nothing in this section or in any legislative history related
to the enactment of this section may be construed to permit an inference
or conclusion that the policy of the Congress in the urban development
action grant program is to facilitate the relocation of businesses from
one area to another.
"(5) ASSISTANCE FOR INDIVIDUALS ADVERSELY AFFECTED BY PROHIBITED
RELOCATIONS. --
"(A) Any amount withdrawn by, recaptured by, or paid to the
Secretary due to a violation (or a settlement of an alleged
violation) of this subsection (or of any regulation issued or
contractual provision entered into to carry out this subsection)
by a project with identified intended occupants shall be made
available by the Secretary as a grant to the city, county, or
community described in subsection (p), from which the operation of
an industrial or commercial plant or facility or other business
establishment relocated or in which the operation was reduced.
"(B)(i) Any amount made available under this paragraph shall be
used by the grantee to assist individuals who were employed by the
operation involved prior to the relocation or reduction and whose
employment or terms of employment were adversely affected by the
relocation or reduction. The assistance shall include job
training, job retraining, and job replacement.
"(ii) If any amount made available to a grantee under this
paragraph is more than is required to provide assistance under
clause (i), the grantee shall use the excess amount to carry out
community development activities eligible under section 105(a).
"(C)(i) The provisions of this paragraph shall be applicable to
any amount withdrawn by, recaptured by, or paid to the Secretary
under this section, including any amount withdrawn, recaptured, or
paid before the effective date of this paragraph.
"(ii) Grants may be made under this paragraph only to the
extent of amounts provided in appropriation Acts.
"(6) DEFINITION. -- For purposes of this subsection, the term
'operation' includes any plant, equipment, facility, position,
employment opportunity, production capacity, or product line.
"(7) REGULATIONS. -- Not later than 60 days after the date of the
enactment of the Housing and Community Development Act of 1987, the
Secretary shall issue such regulations as may be necessary to carry out
the provisions of this subsection. Such regulations shall include
specific criteria to be used by the Secretary in determining whether
there is a significant and adverse effect under paragraph (3).".
(b) APPLICABILITY. -- Except as otherwise provided in section
119(h)(5) of the Housing and Community Development Act "42 USC 5318
note" of 1974 (as added by subsection (a)), the amendments made by this
section shall be applicable to urban development action grants that have
not received the preliminary approval of the Secretary of Housing and
Urban Development before the date of the enactment of this Act.
SEC. 517. URBAN HOMESTEADING.
(a) EXTENSIONS. --
(1) Section 810(h)(1) of the Housing and Community Development
Act "12 USC 1706e" of 1974 is amended by striking out "1984 and
1985" and inserting in lieu thereof "1988 and 1989".
(2) Section 810(i)(1) of such Act is amended by striking out
"1984 and 1985" and inserting in lieu thereof "1988 and 1989".
(3) Section 810(j) of such Act is amended by striking out
"December 31, 1985" and inserting in lieu thereof "December 1,
1987".
(b) STATE ADMINISTRATIVE EXPENSES. --
(1) The second sentence of section 106(d)(3)(A) of the Housing
and Community Development Act "42 USC 5306" of 1974 is amended --
(A) by inserting immediately after "such expenses" the first
time it appears the following: "and its administrative expenses
under section 810 of this Act"; and
(B) by inserting immediately after "such expenses" the second
time it appears the following: "under this title".
(2) Section 107(b)(4) of such Act "42 USC 5307" is amended by
inserting before the first semicolon the following: "and section
810 of this Act".
(c) SELECTION PROCEDURE. --
(1) Section 810(b)(2) of the Housing and Community Development
Act "12 USC 1706e" of 1974 is amended to read as follows:
"(2) an equitable procedure for selecting recipients of
homestead properties who have the capacity to make or cause to be
made the repairs and improvements required under paragraph (3) of
this subsection, which procedure shall --
"(A) give special priority to applicants who are 'lower income
families' as defined in section 3(b)(2) of the United States
Housing Act of 1937;
"(B) exclude applicants who are currently homeowners;
"(C) take into account the applicant's capacity to contribute a
substantial amount of labor to the rehabilitation process, or to
obtain assistance from private sources, community organizations,
or other sources; and
"(D) include other reasonable selection criteria.".
(2) Section 810(b)(5) of such Act is amended by adding "and"
after the semicolon.
(3) Section 810(b)(6) of such Act is amended by striking out ";
and" and inserting in lieu thereof a period.
(4) Section 810(b)(7) of such Act is repealed.
(d) TRANSFER OF PROPERTY TO QUALIFIED COMMUNITY ORGANIZATIONS. --
Section 810 of the Housing and Community Development Act of 1974 is
amended --
(1) in subsection (a), by inserting "qualified community
organization or" before "public agency designated";
(2) in subsection (b), by inserting "qualified community
organization or" before "public agency designated";
(3) in subsection (b)(1), by inserting before the semicolon the
following: "or in accordance with subsection (l) to qualified
community organizations";
(4) in subsection (b)(3)(D), by inserting "qualified community
organization or" before "public agency designated";
(5) in subsection (b)(5), by inserting "qualified community
organization or" before "public agency designated";
(6) by redesignating subsection (k) as subsection (l); and
(7) by inserting after subsection (j) the following new
subsection:
"(k) A unit of general local government or a State, or a public
agency designated by a unit of general local government or a State, may
transfer any real property that it receives under subsection (a) or
purchases under subsection (i) to a qualified community organization.
Qualified community organizations shall be limited to organizations that
--
"(1) are incorporated and controlled by a board of directors
whose members receive no compensation of any kind for the
performance of their duties;
"(2) are organized exclusively for charitable, educational,
scientific purposes, or the promotion of social welfare, and
qualify as exempt organizations under paragraph (3) or (4) of
section 501(c) of the Internal Revenue Code of 1986; and
"(3) agree to assist the applicable State or unit of general
local government with the selection of homesteaders, the
selection, inspection, and rehabilitation of the properties, and
to perform such other functions as may be agreed between the State
or unit of general local government and the qualified nonprofit
organization, including the acceptance of title to property from
the relevant Federal agency and the direct conveyance of the
property to the homesteaders subject to the terms and conditions
specified in this section.".
(e) AUTHORIZATION OF APPROPRIATIONS. -- The first sentence of
section 810(l) of the Housing and Community Development Act of 1974 (as
so redesignated by subsection (d) of this section) is amended to read as
follows: "To reimburse the housing loan funds for properties
transferred pursuant to this section, and to carry out subsections (c),
(g), (h), and (i), there are authorized to be appropriated $12,000,000
for fiscal year 1988, and $13,000,000 for fiscal year 1989.".
SEC. 518. REHABILITATION LOANS.
(a) EXTENSION OF LOAN AUTHORITY. -- Section 312(h) of the Housing
Act "42 USC 1452b" of 1964 is amended by striking "March 15, 1988" and
inserting "September 30, 1989".
(b) PROHIBITION OF CERTAIN FEES. -- Section 312(g) of the Housing
Act of 1964 is amended by adding at the end the following new sentence:
"No risk premium or loan fee may be imposed by or for the Secretary or
any other Federal agency on or with respect to a loan made under this
section after the date of the enactment of the Housing and Community
Development Act of 1987.".
(c) PROHIBITION OF LOAN SALES. -- Section 312 of the Housing Act of
1964 is amended by adding at the end the following new subsection:
"(l) The Secretary may not sell any loan made under this section.".
SEC. 519. LOAN CANCELLATION.
The Secretary of Housing and Urban Development shall cancel the
indebtedness represented by loan number 070024914 under section 312 of
the Housing Act of 1964. The obligor on such loan is relieved of all
liability to the Government for the outstanding principal balance on
such loan, for the amount of accrued interest on such loan, and for any
other fees and charges payable in connection therewith. This section
shall be effective only to such extent or in such amounts as may be
approved in appropriation Acts.
SEC. 520. NEIGHBORHOOD REINVESTMENT CORPORATION.
(a) COMPOSITION OF BOARD. -- Section 604 of the Neighborhood
Reinvestment Corporation Act "42 USC 8103" is amended --
(1) by inserting before the semicolon in subsection (a)(1) the
following: "or a member of the Federal Home Loan Bank Board to be
designated by the Chairman";
(2) by striking out subsection (a)(3) and inserting in lieu
thereof the following: "(3) the Chairman of the Board of
Governors of the Federal Reserve System, or a member of the Board
of Governors of the Federal Reserve System to be designated by the
Chairman;";
(3) by inserting before the semicolon in subsection (a)(4) the
following: "or the appointive member of the Board of Directors of
the Federal Deposit Insurance Corporation if so designated by the
Chairman"; and
(4) by striking out "Administrator" in subsection (a)(6) and
inserting in lieu thereof the word "Chairman"; and by inserting
after "Administration" the following: "or a member of the Board
of the National Credit Union Administration to be designated by
the Chairman.".
(b) AUTHORIZATION OF APPROPRIATIONS. -- Section 608(a) of the
Neighborhood Reinvestment Corporation Act "42 USC 8107" is amended to
read as follows:
"(a) There are authorized to be appropriated to the corporation to
carry out this title $19,000,000 for fiscal year 1988, and $19,000,000
for fiscal year 1989.".
SEC. 521. NEIGHBORHOOD DEVELOPMENT DEMONSTRATION PROGRAM.
Section 123(g) of the Housing and Urban-Rural Recovery Act "42 USC
5318 note" of 1983 is amended to read as follows:
"(g) There are authorized to be appropriated to carry out this
section $2,000,000 for fiscal year 1988, and $2,000,000 for fiscal year
1989.".
SEC. 522. PARK CENTRAL NEW COMMUNITY PROJECT.
(a) HOUSING ASSISTANCE. -- Section 213 of the Housing and Community
Development Act "12 USC 1439" of 1974 is amended by adding at the end
the following new subsection:
"(e) From budget authority made available in appropriation Acts for
fiscal year 1988, the Secretary shall enter into an annual contributions
contract for a term of 180 months to obligate sufficient funds to
provide assistance payments pursuant to section 8(b)(1) of the United
States Housing Act of 1937 on behalf of 500 lower income families from
budget authority made available for fiscal year 1988, so long as such
families occupy properties in the Park Central New Community Project or
in adjacent areas that are recognized by the unit of general local
government in which such Project is located as being included within the
Park Central New Town In Town Project. If a lower income family
receiving assistance payments pursuant to this subsection ceases to
qualify for assistance payments pursuant to the provisions of section 8
of such Act or of this subsection during the 180-month term of the
annual contributions contract, assistance payments shall be made on
behalf of another lower income family who occupies a unit identified in
the previous sentence.".
(b) COMMUNITY DEVELOPMENT ASSISTANCE. -- Section 107(a) of the
Housing and Community Development Act "42 USC 5307" of 1974 is amended
by adding at the end the following new sentence: "Of the amount set
aside for grants under subsection (b) for fiscal year 1988, $5,000,000
shall be made available by the Secretary for purposes of grants under
subsection (b)(1) for the Park Central New Community Project.".
SEC. 523. COMMUNITY DEVELOPMENT PROJECTS LABOR STANDARDS.
Section 110 of the Housing and Community Development Act "42 USC
5310" of 1974 is amended by striking "is designed for residential use of
eight or more families" and insert "contains not less than 8 units".
SEC. 524. URBAN PLANNING.
Section 702 of the Housing Act "40 USC 462" of 1954 is amended --
(1) by striking subsections (c) and (h); and
(2) by striking subsection (g) and inserting the following:
"(g) Effective upon the date of the enactment of the Housing and
Community Development Act of 1987, and in accordance with such
accounting and other procedures as the Secretary may prescribe, each
advance made by the Secretary under this section that has any principal
amount outstanding shall be forgiven. The terms and conditions of any
contract, or any amendment to a contract, for such advance with respect
to any promise to repay the advance shall be canceled.".
SEC. 525. COMMUNITY DEVELOPMENT TECHNICAL AMENDMENTS.
Section 123(e)(3) of the Housing and Urban-Rural Recovery Act "42 USC
5318 note" of 1983 is amended by striking "Act" and inserting "section".
SEC. 541. EXTENSION OF FLOOD INSURANCE PROGRAM.
(a) GENERAL AUTHORITY. -- Section 1319 of the National Flood
Insurance Act "42 USC 4026" of 1968 is amended by striking "March 15,
1988" and inserting "September 30, 1989".
(b) EMERGENCY IMPLEMENTATION. -- Section 1336(a) of the National
Flood Insurance Act "42 USC 4056" of 1968 is amended by striking "March
15, 1988" and inserting "September 30, 1989".
(c) ESTABLISHMENT OF FLOOD-RISK ZONES. -- Section 1360(a)(2) of the
National Flood Insurance Act "42 USC 4101" of 1968 is amended by
striking "March 15, 1988" and inserting "September 30, 1989".
(d) LIMITATION ON PREMIUMS. -- "42 USC 4015 note" The premium rates
charged for flood insurance under any program established pursuant to
the National Flood Insurance Act of 1968 may not be increased during the
period beginning on the date of the enactment of this Act and ending on
September 30, 1989, by more than a prorated annual rate of 10 percent.
SEC. 542. EXTENSION OF CRIME INSURANCE PROGRAM.
(a) GENERAL AUTHORITY. -- Section 1201(b)(1) of the National Housing
Act "12 USC 1749bbb" is amended by striking "March 15, 1988" in the
matter preceding subparagraph (A) and inserting "September 30, 1989".
(b) CONTINUATION OF EXISTING CONTRACTS. -- Section 1201(b)(1)(A) of
the National Housing Act is amended by striking "September 30, 1986" and
inserting "September 30, 1990".
(c) LIMITATION ON PREMIUMS. -- The premium rates charged for crime
insurance under any program established pursuant to part C of title XII
of the National Housing Act "12 USC 1749bbb-10c" may not be increased
during the period beginning on the date of the enactment of this Act and
ending on September 30, 1989, by more than a prorated annual rate of 5
percent.
SEC. 543. STUDIES UNDER NATIONAL FLOOD INSURANCE PROGRAM.
Section 1376(c) of the National Flood Insurance Act "42 USC 4127" of
1968 is amended to read as follows:
"(c) There are authorized to be appropriated for studies under this
title $37,000,000 for fiscal year 1988, and $37,000,000 for fiscal year
1989. Any amount appropriated under this subsection shall remain
available until expended.".
SEC. 544. SCHEDULE FOR PAYMENT OF FLOOD INSURANCE FOR STRUCTURES ON
LAND SUBJECT TO IMMINENT COLLAPSE OR SUBSIDENCE.
(a) IN GENERAL. -- Section 1306 of the National Flood Insurance Act
"42 USC 4013" of 1968 is amended by adding at the end the following new
subsection:
"(c)(1) If any structure covered by a contract for flood insurance
under this title and located on land that is along the shore of a lake
or other body of water is certified by an appropriate State or local
land use authority to be subject to imminent collapse or subsidence as a
result of erosion or undermining caused by waves or currents of water
exceeding anticipated cyclical levels, the Director shall (following
final determination by the Director that the claim is in compliance with
regulations developed pursuant to paragraph (6)(A)) pay amounts under
such flood insurance contract for proper demolition or relocation as
follows:
"(A) For proper demolition --
"(i) Following final determination by the Director, 40 percent
of the value of the structure; and
"(ii) Following demolition of the structure (including any
septic containment system) prior to collapse, the remaining 60
percent of the value of the structure and 10 percent of the value
of the structure, or the actual cost of demolition, whichever
amount is less.
"(B) For proper relocation (including removal of any septic
containment system) if the owner chooses to relocate the structure
--
"(i) following final determination by the Director, prior to
collapse, up to 40 percent of the value of the structure;
"(ii) the total payment under this subparagraph shall not
exceed the actual cost of relocation.
"(2) If any structure subject to a final determination under
paragraph (1) collapses or subsides before the owner demolishes or
relocates the structure and the Director determines that the owner has
failed to take reasonable and prudent action to demolish or relocate the
structure, the Director shall not pay more than the amount provided in
subparagraph (A)(i) with respect to the structure.
"(3) For purposes of paying flood insurance pursuant to this
subsection, the value of a structure shall be whichever of the following
is lowest:
"(A) The fair market value of a comparable structure that is
not subject to imminent collapse or subsidence.
"(B) The price paid for the structure and any improvement to
the structure, as adjusted for inflation in accordance with an
index determined by the Director to be appropriate.
"(C) The value of the structure under the flood insurance
contract issued pursuant to this title.
"(4)(A) The provisions of this subsection shall apply to contracts
for flood insurance under this title that are in effect on, or entered
into after, the date of the enactment of the Housing and Community
Development Act of 1987.
"(B) The provisions of this subsection shall not apply to any
structure not subject to a contract for flood insurance under this title
on the date of a certification under paragraph (1).
"(C) The provisions of this subsection shall not apply to any
structure unless the structure is covered by a contract for flood
insurance under this title --
"(i) on or before June 1, 1988;
"(ii) for a period of 2 years prior to certification under
paragraph (1); or
"(iii) for the term of ownership if less than 2 years.
"(D) The provisions of this subsection shall not apply to any
structure located in the area west of the groin field on the barrier
island from Moriches Inlet to Shinnecock Inlet on the southern shore of
Long Island of Suffolk County, New York.
"(5) For any parcel of land on which a structure is subject to a
final determination under paragraph (1), no subsequent flood insurance
coverage under this title or assistance under the Disaster Relief Act of
1974 (except emergency assistance essential to save lives and protect
property, public health and safety) shall be available for --
"(A) any structure consisting of one to four dwelling units
which is constructed or relocated to a point seaward of the
30-year erosion setback; or
"(B) any other structure which is constructed or relocated at a
point seaward of the 60-year erosion setback.
"(6)(A) The Director shall promulgate regulations and guidelines to
implement the provisions of this subsection.
"(B) Prior to issuance of regulations regarding the State and local
certifications pursuant to paragraph (1), all provisions of this
subsection shall apply to any structure which is determined by the
Director --
"(i) to otherwise meet the requirements of this subsection;
and
"(ii) to have been condemned by a State or local authority and
to be subject to imminent collapse or subsidence as a result of
erosion or undermining caused by waves or currents of water
exceeding anticipated cyclical levels.
"(7) No payments under this subsection may be made after September
30, 1989, except pursuant to a commitment made on or before such date.".
(b) EFFECTIVE DATE. -- The amendment made by this section shall
become effective on the date of the enactment of this Act. "42 USC 4013
note"
SEC. 545. FLOOD AND CRIME INSURANCE TECHNICAL AMENDMENTS.
(a) CRIME INSURANCE PROGRAM AUTHORITY. -- Section 1201(b) of the
National Housing Act "12 USC 1749bbb" is amended --
(1) by striking paragraphs (2) and (3);
(2) by striking "(b)(1)" and inserting "(b)"; and
(3) by redesignating subparagraphs (A) through (C) as
paragraphs (1) through (3), respectively.
(b) REINSURANCE AGREEMENTS. -- Section 1222(c) of the National
Housing Act "12 USC 1749bbb-8" is amended by striking "section 3679(a)
of the Revised Statutes of the United States (31 U.S.C. 665(a))," and
inserting "section 1341(a) of title 31, United States Code,".
(c) NATIONAL INSURANCE DEVELOPMENT FUND. -- Section 1243(d) of the
National Housing Act "12 USC 1749bbb-13" is amended by striking "by law
(sections 102, 103, and 104 of the Government Corporation Control Act
(31 U.S.C. 847-849))" and inserting "by sections 9103 and 9104 of title
31, United States Code,".
(d) NATIONAL FLOOD INSURANCE FUND. -- Section 1310(e) of the
National Flood Insurance Act "42 USC 4017" of 1968 is amended by
inserting a comma after "Code".
(e) FLOOD INSURANCE IN COLORADO RIVER FLOODWAY. -- The National
Flood Insurance Act of 1968 is amended by inserting the following
section heading for section 1322: "42 USC 4029" "COLORADO RIVER
FLOODWAY".
(f) FEMA TREASURY BORROWINGS. -- The third sentence of section 15(e)
of the Federal Flood Insurance Act "42 USC 2414" of 1956 is amended by
inserting a comma after "Code".
SEC. 561. FAIR HOUSING INITIATIVES PROGRAM.
(a) IN GENERAL. -- The Secretary of Housing and Urban Development
(in this section referred to as the "Secretary") may make grants to, or
(to the extent of amounts provided in appropriation Acts) "42 USC 3616
note" enter into contracts or cooperative agreements with, State or
local governments or their agencies, public or private nonprofit
organizations or institutions, or other public or private entities that
are formulating or carrying out programs to prevent or eliminate
discriminatory housing practices, to develop, implement, carry out, or
coordinate --
(1) programs or activities designed to obtain enforcement of
the rights granted by title VIII of the Act of April 11, 1968
(commonly referred to as the Civil Rights Act of 1968), or by
State or local laws that provide rights and remedies for alleged
discriminatory housing practices that are substantially equivalent
to the rights and remedies provided in such title VIII, through
such appropriate judicial or administrative proceedings (including
informal methods of conference, conciliation, and persuasion) as
are available therefor; and
(2) education and outreach programs designed to inform the
public concerning rights and obligations under the laws referred
to in paragraph (1).
(b) PROGRAM ADMINISTRATION. --
(1) Not less than 30 days before providing a grant or entering
into any contract or cooperative agreement to carry out activities
authorized by this section, the Secretary shall submit
notification of such proposed grant, contract, or cooperative
agreement (including a description of the geographical
distribution of such contracts) to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Banking, Finance and Urban Affairs of the House of
Representatives.
(2) The Secretary shall provide to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Banking, Finance and Urban Affairs of the House of Representatives
a quarterly report that summarizes the activities funded under
this section and describes the geographical distribution of
grants, contracts, or cooperative agreements funded under this
section.
(c) REGULATIONS. --
(1) The Secretary shall issue such regulations as may be
necessary to carry out the provisions of this section.
(2) The Secretary shall, for use during the demonstration
authorized in this section, establish guidelines for testing
activities funded under the private enforcement initiative of the
fair housing initiatives program. The purpose of such guidelines
shall be to ensure that investigations in support of fair housing
enforcement efforts described in subsection (a)(1) shall develop
credible and objective evidence of discriminatory housing
practices. Such guidelines shall apply only to activities funded
under this section, shall not be construed to limit or otherwise
restrict the use of facts secured through testing nor funded under
this section in any legal proceeding under Federal fair housing
laws, and shall not be used to restrict individuals or entities,
including those participating in the fair housing initiatives
program, from pursuing any right or remedy guaranteed by Federal
law. Not later than 6 months after the end of the demonstration
period authorized in this section, the Secretary shall submit to
Congress the evaluation of the Secretary of the effectiveness of
such guidelines in achieving the purposes of this section.
(3) Such regulations shall include provisions governing
applications for assistance under this section, and shall require
each such application to contain --
(A) a description of the assisted activities proposed to be
undertaken by the applicant, together with the estimated costs and
schedule for completion of such activities;
(B) a description of the experience of the applicant in
formulating or carrying out programs to prevent or eliminate
discriminatory housing practices;
(C) available information, including studies made by or
available to the applicant, indicating the nature and extent of
discriminatory housing practices occurring in the general location
where the applicant proposes to conduct its assisted activities,
and the relationship of such activities to such practices;
(D) an estimate of such other public or private resources as
may be available to assist the proposed activities;
(E) a description of proposed procedures to be used by the
applicant for monitoring conduct and evaluating results of the
proposed activities; and
(F) any additional information required by the Secretary.
(4) Regulations issued under this subsection shall not become
effective prior to the expiration of 90 days after the Secretary
transmits such regulations, in the form such regulations are
intended to be published, to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Banking,
Finance and Urban Affairs of the House of Representatives.
(5) The Secretary shall not obligate or expend any amount under
this section before the effective date of the regulations required
under this subsection.
(d) AUTHORIZATION OF APPROPRIATIONS. -- There are authorized to be
appropriated to carry out the provisions of this section, including any
program evaluations, $5,000,000 for fiscal year 1988, and $5,000,000 for
fiscal year 1989, of which not more than $3,000,000 in each year shall
be for the private enforcement initiative demonstration. Any amount
appropriated under this section shall remain available until expended.
(e) SUNSET. -- The demonstration period authorized in this section
shall end on September 30, 1989.
SEC. 562. "42 USC 3608a" COLLECTION OF CERTAIN DATA.
(a) IN GENERAL. -- To assess the extent of compliance with Federal
fair housing requirements (including the requirements established under
title VI of Public Law 88-352 and title VIII of Public Law 90-284), the
Secretary of Housing and Urban Development and the Secretary of
Agriculture shall each collect, not less than annually, data on the
racial and ethnic charcteristics of persons eligible for, assisted, or
otherwise benefiting under each community development, housing
assistance, and mortgage and loan insurance and guarantee program
administered by such Secretary. Such data shall be collected on a
building by building basis if the Secretary involved determines such
collection to be appropriate.
(b) REPORTS TO CONGRESS. -- The Secretary of Housing and Urban
Development and the Secretary of Agriculture shall each include in the
annual report of such Secretary to the Congress a summary and evaluation
of the data collected by such Secretary under subsection (a) during the
preceding year.
SEC. 563. REGULATORY AUTHORITY.
(a) DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. -- Section 7(o) of
the Department of Housing and Urban Development Act "42 USC 3535" is
amended by adding at the end thereof the following new paragraph:
"(7) The Secretary shall include with each rule or regulation
required to be transmitted to the Committees under this subsection a
detailed summary of all changes required by the Office of Management and
Budget that prohibit, modify, postpone, or disapprove such rule or
regulation in whole or part.".
(b) FARMERS HOME ADMINISTRATION. -- Section 534 of the Housing Act
"42 USC 1490n" of 1949 is amended by adding at the end thereof the
following new subsection:
"(d) The Secretary shall include with each rule or regulation
required to be transmitted to the Committees under this section a
detailed summary of all changes required by the Office of Management and
Budget that prohibit, modify, postpone, or disapprove such rule or
regulation in whole or part.".
SEC. 564. RESEARCH AND DEVELOPMENT.
Section 501 of the Housing and Urban Development Act "12 USC 1701z-1"
of 1970 is amended by striking the second and third sentences and
inserting the following: "There are authorized to be appropriated to
carry out this title $17,000,000 for fiscal year 1988, and $18,000,000
for fiscal year 1989.".
SEC. 565. HOME MORTGAGE DISCLOSURE.
(a) APPLICABILITY TO MORTGAGE BANKING AFFILIATES. --
(1) Section 303(2) of the Home Mortgage Disclosure Act "12 USC
2802" of 1975 is amended --
(A) by striking "or" the first place it appears; and
(B) by inserting before the semicolon at the end the following:
", mortgage banking subsidiary of a bank holding company or
savings and loan holding company, or savings and loan service
corporation that originates or purchases mortgage loans".
(2) Section 304 of the Home Mortgage Disclosure Act "12 USC
2803" of 1975 is amended by adding at the end the following new
subsection:
"(g) The requirements of subsections (a) and (b) shall not apply with
respect to mortgage loans that are --
"(1) made by any mortgage banking subsidiary of a bank holding
company or savings and loan holding company or by any savings and
loan service corporation that originates or purchases mortgage
loans; and
"(2) approved by the Secretary for insurance under title I or
II of the National Housing Act.".
(3) The first sentence of section 311 of the Home Mortgage
Disclosure Act "12 USC 2810" of 1975 is amended by inserting after
"306(b)" the following: "(and for each mortgagee making mortgage
loans exempted under section 304(g))".
(4) The amendments made by this subsection "12 USC 2802 note"
shall be applicable to calendar years beginning after December 31,
1986.
(b) PERMANENT EXTENSION OF GENERAL AUTHORITY. -- The Home Mortgage
Disclosure Act "12 USC 2811" of 1975 is amended by striking section 312.
SEC. 566. LEAD-BASED PAINT POISONING PREVENTION.
(a) DETECTION AND ABATEMENT PROCEDURES. -- Section 302 of the
Lead-Based Paint Poisoning Prevention Act "42 USC 4822" is amended --
(1) by inserting after the section designation the following:
"(a) GENERAL REQUIREMENTS. -- ";
(2) in the second sentence, by striking "housing constructed
prior to 1950" and inserting the following: "housing constructed
or substantially rehabilitated prior to 1978";
(3) in clause (1) of the second sentence, by striking "paint
which may contain lead and to which children may be exposed" and
inserting the following: "accessible intact, intact, and
nonintact interior and exterior painted surfaces that may contain
lead in any such housing in which any child who is less than 7
years of age resides or is expected to reside";
(4) in clause (2) of the second sentence, by inserting after
"notification" the following: "(using a brochure developed after
consultation with the National Institute of Building Sciences)";
(5) by striking the third sentence; and
(6) by adding at the end the following new subsections:
"(b) MEASUREMENT CRITERIA. -- The procedures established by the
Secretary under this section for the detection and abatement of
lead-based paint poisoning hazards in any housing, including housing
assisted under section 8 of the United States Housing Act of 1937 --
"(1) shall be based upon criteria that measure the condition of
the housing; and
"(2) shall not be based upon criteria that measure the health
of the residents of the housing.
"(c) INSPECTION REQUIREMENTS. -- The Secretary shall require the
inspection of all intact and nonintact interior and exterior painted
surfaces of housing subject to this section for lead-based paint using
an approved x-ray fluorescence analyzer or comparable approved sampling
or testing technique. A qualified inspector shall certify in writing
the precise results of the inspection. If the results equal or exceed a
level of 1.0 milligrams per centimeter squared, the results shall be
provided to any potential purchaser or tenant of the housing. The
Secretary shall periodically review and reduce the level below 1.0
milligram per centimeter squared to the extent that reliable technology
makes feasible the detection of a lower level and medical evidence
supports the imposition of a lower level. The requirements of this
subsection shall apply as provided in subsection (d).
"(d) ABATEMENT REQUIRED. --
"(1) PUBLIC HOUSING. -- In the case of public housing assisted
under section 9 of the United States Housing Act of 1937, the
Secretary shall require the inspection described in subsection (c)
for --
"(A) each vacant dwelling prior to rerenting;
"(B) a random sample of all occupied dwellings; and
"(C) each dwelling in any housing in which there is a dwelling
determined under subparagraph (A) or (B) to have lead-based paint
hazards.
The Secretary shall require the inspection of all housing
subject to this paragraph prior to the expiration of 5 years from
the date of the publication of final regulations pursuant to this
subsection. The Secretary shall prioritize, within such 5-year
period, inspections on the basis of vacancy, age of housing, or
projected modernization or rehabilitation. The Secretary shall
require abatement to eliminate the lead-based paint poisoning
hazards in housing in which the test results equal or exceed the
standard established by or under subsection (c). Final inspection
and certification after abatement shall be made by a qualified
inspector.
"(2) HUD-OWNED PROPERTIES. --
"(A) ABATEMENT DEMONSTRATION PROGRAM. -- In carrying out the
requirements of this subsection with respect to single-family and
multifamily properties owned by the Department of Housing and
Urban Development, the Secretary shall utilize a sufficient
variety of abatement methods in a sufficient number of areas and
circumstances to demonstrate their relative cost-effectiveness and
their applicability to various types of housing.
"(B) REPORT. -- Not later than 18 months after the effective
date of the regulations issued to carry out this subsection, the
Secretary shall transmit to the Congress the findings and
recommendations of the Secretary as a result of the demonstration
program, including any recommendations of the Secretary for
legislation to revise the requirements of this subsection. In
preparing such report, the Secretary shall examine --
"(i) the most reliable technology available for detecting
lead-based paint;
"(ii) the most efficient and cost-effective methods for
abatement;
"(iii) safety considerations in testing;
"(iv) the overall accuracy and reliability of laboratory
testing of physical samples, x-ray fluorescence machines, and
other available testing procedures;
"(v) availability of qualified samplers and testers; and
"(vi) an estimate of the amount, characteristics, and regional
distribution of housing in the United States that contains
lead-based paint hazards at differing levels of contamination.
"(3) REPORT REQUIRED. -- Not later than 9 months after completion of
the demonstration required by paragraph (2), the Secretary shall, based
on the demonstration, prepare and transmit to the Congress, a
comprehensive and workable plan, including any recommendations for
changes in legislation, for the prompt and cost effective inspection and
abatement of privately-owned single family and multifamily housing,
including housing assisted under section 8 of the United States Housing
Act of 1937. After the expiration of the 9-month period referred to in
the preceding sentence, the Secretary may not obligate or expend any
funds or otherwise carry out activities related to any other policy
development and research project until the report is transmitted.
"(e) EXCEPTIONS. -- The provisions of this section shall not apply
to --
"(1) housing for the elderly or handicapped, except for any
dwelling in such housing in which any child who is less than 7
years of age resides or is expected to reside;
"(2) any project for which an application for insurance is
submitted under section 231, 232, 241, or 242 of the National
Housing Act; or
"(3) any 0-bedroom dwelling.
"(f) FUNDING. -- The Secretary shall carry out the provisions of
this section utilizing available Federal funding sources. The Secretary
shall use funds available for comprehensive improvement assistance under
section 14 of the United States Housing Act of 1937 to carry out this
section in public housing.".
(b) REGULATIONS. --
(1) PROPOSED REGULATIONS. -- Not later than the expiration of
the 60-day period following the date of the enactment of this Act,
the Secretary of Housing and Urban Development shall publish
proposed regulations to carry out the amendments made by this
section.
(2) FINAL REGULATIONS. -- The Secretary shall publish final
regulations to carry out the amendments made by this section,
which shall become effective not later than the expiration of the
120-day period following the date of the enactment of this Act.
(3) REQUIRED CONSULTATIONS. -- Before issuing proposed
regulations under this subsection, the Secretary shall consult
with --
(A) the National Institute of Building Sciences and the
National Bureau of Standards with respect to the most
cost-effective methods of detecting and abating lead-based paint
poisoning hazards; and
(B) public housing agencies to develop a cost-efficient plan
for detecting and abating lead-based paint poisoning hazards in
dwelling assisted under section 8 of the United States Housing Act
of 1937 and dwellings in public housing assisted under such Act.
SEC. 567. "42 USC 1437a note" MEDIAN AREA INCOME.
For purposes of calculating the median income for any area that is
not within a metropolitan statistical area (as established by the Office
of Management and Budget) for programs under title I of the Housing and
Community Development Act of 1974, the United States Housing Act of
1937, the National Housing Act, or title V of the Housing Act of 1949,
the Secretary of Housing and Urban Development or the Secretary of
Agriculture (as appropriate) shall use whichever of the following is
higher:
(1) the median income of the county in which the area is
located; or
(2) the median income of the entire metropolitan area of the
State.
SEC. 568. MANUFACTURED HOUSING CONSTRUCTION AND SAFETY STANDARDS.
Section 604 of the National Manufactured Housing Construction and
Safety Standards Act "42 USC 5403" of 1974 is amended by adding at the
end the following new subsection:
"(i)(1) The Federal manufactured home construction and safety
standards established by the Secretary under this section shall include
preemptive energy conservation standards in accordance with this
subsection.
"(2) The energy conservation standards established under this
subsection shall be cost-effective energy conservation performance
standards designed to ensure the lowest total of construction and
operating costs.
"(3) The energy conservation standards established under this
subsection shall take into consideration the design and factory
construction techniques of manufactured homes and shall provide for
alternative practices that result in net estimated energy consumption
equal to or less than the specified standards.".
SEC. 569. NULLIFICATION OF RIGHT OF REDEMPTION OF SINGLE-FAMILY
MORTGAGORS.
Section 204 of the National Housing Act "12 USC 1710" is amended by
adding at the end the following new subsection:
"(l)(1) Whenever the Secretary or a contract mortgagee (pursuant to
its contract with the Secretary) forecloses on a Secretary-held single
family mortgage in any Federal or State court or pursuant to a power of
sale in a mortgage, the purchaser at the foreclosure sale shall be
entitled to receive a conveyance of title to, and possession of, the
property, subject to the interests senior to the interests of the
Secretary or the contract mortgagee, as the case may be.
Notwithstanding any State law to the contrary, there shall be no right
of redemption (including in all instances any right to possession based
upon any right of redemption) in the mortgagor or any other person
subsequent to the foreclosure sale in connection with a Secretary-held
single family mortgage. The appropriate State official or the trustee,
as the case may be, shall execute and deliver a deed or other
appropriate instrument conveying title to the purchaser at the
foreclosure sale, consistent with applicable procedures in the
jurisdiction and without regard to any such right of redemption.
"(2) The following actions shall be taken in order to verify title in
the purchaser at the foreclosure sale:
"(A) In the case of a judicial foreclosure in any Federal or
State court, there shall be included in the petition and in the
judgment of foreclosure a statement that the foreclosure is in
accordance with this subsection and that there is no right of
redemption in the mortgagor or any other person.
"(B) In the case of a foreclosure pursuant to a power of sale
provision in the mortgage, the statement required in subparagraph
(A) shall be included in the advertisement of the sale and either
in the recitals of the deed or other appropriate instrument
conveying title to the purchaser at the foreclosure sale or in an
affidavit or addendum to the deed.
"(3) For purposes of this subsection:
"(A) The term 'contract mortgagee' means a person or entity
under a contract with the Secretary that provides for the
assignment of a single-family mortgage from the Secretary to the
person or entity for the purpose of pursuing foreclosure.
"(B) the term 'mortgage' means a deed of trust, mortgage, deed
to secure debt, security agreement, or any other form of
instrument under which any interest in property, real, personal,
or mixed, or any interest in property, including leaseholds, life
estates, reversionary interests, and any other estates under
applicable State law, is conveyed in trust, mortgaged, encumbered,
pledged, or otherwise rendered subject to a lien, for the purpose
of securing the payment of money or the performance of an
obligation.
"(C) The term 'Secretary-held single family mortgage' means a
single-family mortgage held by the Secretary or by a contract
mortgagee at the time of initiation of foreclosure that --
"(i) was formerly insured by the Secretary under any section of
this title; or
"(ii) was taken by the Secretary as a purchase money mortgage
in connection with the sale or other transfer of Secretary-owned
property under any section of this title.
"(D) The term 'single-family mortgage' means a mortgage that
covers property on which is located a 1-to-4 family residence.".
SEC. 570. MISCELLANEOUS PROGRAMS TECHNICAL AMENDMENTS.
(a) HUD ADMINISTRATIVE PROVISIONS. --
(1) Section 502(a) of the Housing Act "12 USC 1701c" of 1948 is
amended by striking the fourth sentence.
(2) Section 502(b) of the Housing Act "42 USC 1404a" of 1948 is
amended --
(A) by striking "United States Housing Authority" each place it
appears and inserting "Secretary of Housing and Urban
Development"; and
(B) by striking "the Authority" each place it appears and
inserting "the Secretary of Housing and Urban Development".
(3) Section 502(c)(2) of the Housing Act "12 USC 1701c" of 1948
is amended by adding "and" at the end.
(b) ANNUAL REPORT OF SECRETARY. -- Section 802 of the Housing Act
"12 USC 1701o" of 1954 is amended by inserting the following section
heading:
(c) ENERGY CONSERVATION IN NEW BUILDINGS. -- Section 303(11) of the
Energy Conservation Standards for New Buildings Act "42 USC 6832" of
1976 is amended by striking "Secretary of Housing and Urban Development"
and inserting "Secretary of Energy".
(d) WEATHERIZATION ASSISTANCE. -- Section 412(9)(G) of the Energy
Conservation in Existing Buildings Act "42 USC 6862" of 1976 is amended
by striking the first comma after "determine".
(e) SOLAR ENERGY AND ENERGY CONSERVATION BANK. -- Sections
506(f)(1), 509(b)(2)(E), 509(c), 515(b)(1)(A)(iii), 515(b)(1)(B),
515(b)(1)(C)(ii), 515(b)(1)(D), and 515(b)(2) of the Solar Energy and
Energy Conservation Bank Act "12 USC 3604, 3607, 3613" are amended --
(1) by striking "section 38" each place it appears and
inserting "section 23";
(2) by striking "section 44C" each place it appears and
inserting "section 38"; and
(3) by striking "Internal Revenue Code of 1954" each place it
appears and inserting "Internal Revenue Code of 1986".
(f) NATIONAL INSTITUTE OF BUILDING SCIENCES. --
(1) Section 809(g)(4) of the Housing and Community Development
Act "12 USC 1701j-2" of 1974 is amended by striking "and its" and
inserting "of its".
(2) Section 809(h) of the Housing and Community Development Act
of 1974 is amended by striking "preceeding" in the last sentence
and inserting "preceding".
(g) REAL ESTATE SETTLEMENT PROCEDURES. -- Section 8(c)(5) of the
Real Estate Settlement Procedures Act "12 USC 2607" of 1974 is amended
by striking "clause 4(B)" and inserting "clause (4)(B)".
(h) HOME MORTGAGE DISCLOSURE. -- Section 304(a)(1) of the Home
Mortgage Disclosure Act "12 USC 2803" of 1975 is amended by striking "at
at" and inserting "at".
(i) STEWART B. MCKINNEY HOMELESS ASSISTANCE ACT. --
(1) Section 422(1) of the Steward B. McKinney Homeless
Assistance Act "42 USC 11382" is amended by inserting
"governmental entity," after "urban county,".
(2) Section 431(1) of such Act "42 USC 11391" is amended by
inserting "governmental entity," after "urban county,".
SEC. 571. "12 USC 1735e-1" USE OF AMERICAN MATERIALS AND PRODUCTS.
In the administration of housing assistance programs, the Secretary
of Housing and Urban Development shall encourage the use of materials
and products mined and produced in the United States.
SEC. 572. STUDY OF VOLUNTARY STANDARDS FOR MODULAR HOMES.
(a) IN GENERAL. -- In order to facilitate the construction and
delivery of housing, the National Institute of Building Sciences shall
prepare and submit to the Congress not later than 6 months after the
date of the enactment of this Act a report describing feasible
alternative systems for implementing one or more voluntary preemptive
national codes for modular housing, including the method for inspecting
the structures to ensure compliance with the selected code or set of
codes. Such codes may be national model codes and shall provide for
periodic upgrading through recognized model code development procedures
and the development of modular housing standards for construction,
design, and performance that ensure quality, durability, and safety and
are in accordance with life-cycle cost-effective energy conservation
standards established by the Secretary of Housing and Urban Development
and designed to ensure the lowest total construction and operating costs
over the estimated life of such housing.
(b) DEFINITION. -- For purposes of this section, the term "modular
housing" means factory-built single-family and multifamily housing
(including closed wall panelized housing) not subject to the
requirements of the National Manufactured Housing Construction and
Safety Standards Act of 1974.
(c) GRANT. -- From amounts appropriated pursuant to section 501 of
the Housing and Urban Development Act of 1970, the Secretary of Housing
and Urban Development shall make a grant to the National Institute of
Building Sciences in an amount not to exceed $50,000 to cover the cost
of the report under this section.
SEC. 601. "12 USC 1715l note" STATEMENT OF PURPOSE.
It is the purpose of this title --
(1) to encourage homeownership by families in the United States
who are not otherwise able to afford homeownership;
(2) to undertake a concentrated effort to rebuild the depressed
areas of the cities of the United States and to create sound and
attractive neighborhoods; and
(3) to increase the employment of neighborhood residents.
SEC. 602. "12 USC 1715l note" DEFINITIONS.
For purposes of this title:
(1) The term "Fund" means the Nehemiah Housing Opportunity Fund
established in section 609(a).
(2) The term "home" means any 1- to 4-family dwelling. Such
term includes any dwelling unit in a condominium project or
cooperative project consisting of not more than 4 dwelling units,
any town house, and any manufactured home.
(3) The term "lower income families" has the meaning given such
term in section 3(b)(2) of the United States Housing Act of 1937.
(4) The term "metropolitan statistical area" means a
metropolitan statistical area as established by the Office of
Management and Budget.
(5) The term "nonprofit organization" means a private nonprofit
corporation, or other private nonprofit legal entity, that is
approved by the Secretary as to financial responsibility.
(6) The term "Secretary" means the Secretary of Housing and
Urban Development.
(7) The term "State" means each of the several States, the
District of Columbia, the Commonwealth of Puerto Rico, the Virgin
Islands, Guam, American Samoa, the Northern Mariana Islands, the
Trust Territory of the Pacific Islands, and any other territory or
possession of the United States.
(8) The term "substantial rehabilitation" means --
(A) rehabilitation involving costs in excess of 60 percent of
the maximum sale price of a home assisted under this title in the
market area in which it is located; or
(B) the rehabilitation of a vacant, uninhabitable structure.
(9) The term "unit of general local government" means any
borough, city, county, parish, town, township, village, or other
general purpose political subdivision of a State.
SEC. 603. "12 USC 1715l note" ASSISTANCE TO NONPROFIT ORGANIZATIONS.
(a) IN GENERAL. -- The Secretary may provide assistance to nonprofit
organizations to carry out Nehemiah housing opportunity programs in
accordance with the provisions of this title. Such assistance shall be
made in the form of grants.
(b) APPLICATIONS. -- Applications for assistance under this title
shall be made in such form, and in accordance with such procedures, as
the Secretary may prescribe.
SEC. 604. "12 USC 1715l note" USE OF ASSISTANCE.
(a) IN GENERAL. -- Any nonprofit organization receiving assistance
under this title shall use such assistance to provide loans to families
purchasing homes constructed or substantially rehabilitated in
accordance with a Nehemiah housing opportunity program approved under
this title.
(b) SPECIFIC REQUIREMENTS. -- Each loan made to a family under this
section shall --
(1) be secured by a second mortgage held by the Secretary on
the property involved;
(2) be in an amount not exceeding $15,000;
(3) bear no interest; and
(4) be repayable to the Secretary upon the sale, lease, or
other transfer of such property.
SEC. 605. "12 USC 1715l note" PROGRAM REQUIREMENTS.
(a) IN GENERAL. -- Assistance provided under this title may be used
only in connection with a Nehemiah housing opportunity program of
construction or substantial rehabilitation of homes.
(b) FAMILY NEED. -- Each family purchasing a home under this title
shall --
(1) have a family income on the date of such purchase that is
not more than whichever of the following is higher:
(A) the median income for a family of 4 persons in the
metropolitan statistical area involved, except that if and to the
extent that the unit of general local government demonstrates to
the Secretary that such action is necessary to achieve or maintain
neighborhood stability, not to exceed 15 percent of the families
in a project at any time during development or occupancy may have
incomes up to 115 percent of such median income; or
(B) the national median income for a family of 4 persons; and
(2) not have owned a home during the 3-year period preceding
such purchase. (C) DOWNPAYMENT. --
(1) Each family purchasing a home under this title shall make a
downpayment of not less than 10 percent of the sale price of such
home unless --
(A) the nonprofit organization determines a higher downpayment
to be appropriate; or
(B) the first mortgage on the home is held by a State or unit
of general local government under a home loan program of the State
or unit of general local government, and the program provides for
a lower downpayment.
(2) Any downpayment made under this subsection shall accrue
interest from the date on which such downpayment is made through
the date of settlement, at a rate not less than the passbook rate.
Such interest shall be paid by the nonprofit organization
involved to the family purchasing the home for which such
downpayment was made.
(d) LEASING PROHIBITION. -- No family purchasing a home under this
title may lease such home.
SEC. 606. TERMS AND CONDITIONS OF ASSISTANCE.
(a) LOCAL CONSULTATION. -- "12 USE 1715l note" No proposed Nehemiah
housing opportunity program may be approved by the Secretary under this
title unless the nonprofit organization involved demonstrates to the
satisfaction of the Secretary that --
(1) it has consulted with and received the support of residents
of the neighborhood in which such program is to be located; and
(2) it has the approval of each unit of general local
government in which such program is to be located.
(b) PROGRAM SCHEDULE. -- Each nonprofit organization applying for
assistance under this title shall submit to the Secretary an estimated
schedule for completion of its proposed Nehemiah housing opportunity
program, which schedule shall have been agreed to by each unit of
general local government in which such program is to be located.
(c) MINIMUM PARTICIPATION. -- No nonprofit organization receiving
assistance under this title may commence any construction or substantial
rehabilitation (except with respect to homes to be constructed or
substantially rehabilitated for the purpose of display) until not less
than 25 percent of the homes to be constructed or substantially
rehabilitated are contracted for sale to purchasers who intend to live
in such homes and the required downpayments are made.
(d) FINANCIAL FEASIBILITY. -- The Secretary may not provide any
assistance under this title to any nonprofit organization unless such
nonprofit organization demonstrates the financial feasibility of its
proposed Nehemiah housing opportunity program, including the
availability of non-Federal public and private funds.
(e) HOME QUALITY AND LOCATION. -- A Nehemiah housing opportunity
program may be approved under this title only if it provides that --
(1) the number of homes to be constructed or substantially
rehabilitated under such program will not be less than whichever
of the following is less:
(A) the greater of (i) 50 homes; or (ii) 0.25 percent of the
number of existing dwelling units in the unit of general local
government that provides the most assistance to such program; or
(B) 250 homes;
except that the Secretary may waive the requirements of this
paragraph for any unit of general local government if the Governor
of the State or the unit of general local government requests such
waiver and certifies with supporting documentation that such
requirements will prevent the State or the unit of general local
government from being able to use such program effectively;
(2) each home constructed or substantially rehabilitated under
such program will comply with --
(A)(i) applicable local building code standards;
(ii) in any case in which there is not an applicable local
building code, a nationally recognized model building code
mutually agreed upon by the sponsoring nonprofit organization and
the Secretary; or
(iii) in the case of a manufactured home, the standards
prescribed pursuant to title VI of the Housing and Community
Development Act of 1974 and the installation, structural, and site
requirements that would apply under title II of the National
Housing Act; and
(B) the energy performance requirements established under
section 526 of the National Housing Act or, in the case of
manufactured housing, the energy conservation requirements
prescribed in accordance with section 203(b) of the National
Housing Act;
(3) all homes constructed or substantially rehabilitated under
such program will be located in census tracts, or identifiable
neighborhoods within census tracts, in which the median family
income is not more than 80 percent of the median family income of
the area in which such program is to be located, as such median
family income and area are determined for purpose of assistance
under section 8 of the United States Housing Act of 1937;
(4) all homes constructed or substantially rehabilitated under
such program will be concentrated in a single neighborhood and
located on contiguous parcels of land, except that homes may be
constructed or substantially rehabilitated in up to 4 identifiable
neighborhoods that each consist of contiguous parcels of land if
--
(A) the unit of general local government in which the project
is located certifies that land cannot be made available in a
single neighborhood for a program of the size required by
paragraph (1);
(B) the nonprofit organization submits evidence satisfactory to
the Secretary that construction or substantial rehabilitation in
more than 1 identifiable neighborhood will result in cost
reductions through economies of scale comparable to the costs
reductions achieved by other programs eligible for assistance
under this title; and
(C) the nonprofit organization submits evidence satisfactory to
the Secretary that the program, by itself or together with
improvement efforts that are or will be undertaken in the
identifiable neighborhoods by the unit of general local government
or private entities, will result in a substantial improvement in
the overall quality and long-term viability of the neighborhoods;
and
(5) sales contracts entered into under such program will
contain provisions requiring repayment of any loan made under this
title upon the sale or other transfer of the home involved, unless
the Secretary approves a transfer of such home without repayment
(in which case the second mortgage held by the Secretary on such
home shall remain in force until such loan is fully repaid).
SEC. 607. "12 USC 1715l note" PROGRAM SELECTION CRITERIA.
(a) IN GENERAL. -- In selecting Nehemiah housing opportunity
programs for assistance under this title from among eligible programs,
the Secretary shall make such selection on the basis of the extent to
which --
(1) non-Federal public or private entities will contribute land
necessary to make each program feasible;
(2) non-Federal public and private financial or other
contributions (including tax abatements, waivers of fees related
to development, waivers of construction, development, or zoning
requirements, and direct financial contributions) will reduce the
cost of homes constructed or substantially rehabilitated under
each program;
(3) each program will produce the greatest number of units for
the least amount of assistance provided under this title, taking
into consideration the cost differences among different market
areas;
(4) each program is located in a neighborhood of severe
physical and economic blight (and, in determining the degree of
physical blight, the Secretary shall consider the condition of the
housing, other buildings, and infrastructure, in the neighborhood
of the proposed program);
(5) each program uses construction methods that will reduce the
cost per square foot below the average construction cost in the
market area involved; and
(6) each program provides for the involvement of local
residents in the planning, and construction or substantial
rehabilitation, of homes.
(b) EXCEPTION. -- To the extent that non-Federal public entities are
prohibited by the law of any State from making any form of contribution
described in paragraph (1) or (2) of subsection (a), the Secretary shall
not consider such form of contribution in evaluating such program.
SEC. 608. "12 USC 1715l note" DISTRIBUTION OF ASSISTANCE TO
NONPROFIT ORGANIZATIONS.
(a) RESERVATION OF AMOUNTS. -- Following the selection of any
Nehemiah housing opportunity program for assistance under this title,
the Secretary shall reserve sufficient amounts in the Nehemiah Housing
Opportunity Fund for such assistance.
(b) DISTRIBUTION OF ASSISTANCE. -- Following the sale of any home
constructed or substantially rehabilitated under a Nehemiah housing
opportunity program selected for assistance under this title, the
Secretary shall provide to the sponsoring nonprofit organization an
amount equal to the amount of the loan made to the family purchasing
such home. Such amount shall be provided not more than 30 days after
the sale of such home.
(c) MAXIMUM ASSISTANCE. -- The assistance provided to any nonprofit
organization under this title may not exceed $15,000 per home.
SEC. 609. "12 USC 1715l note" NEHEMIAH HOUSING OPPORTUNITY FUND.
(a) ESTABLISHMENT. -- There is established in the Treasury of the
United States a revolving fund, to be known as the Nehemiah Housing
Opportunity Fund. The Fund shall be available to the Secretary, to the
extent approved in appropriation Acts, for purposes of providing
assistance under section 603.
(b) ASSETS. -- The Fund shall consist of --
(1) any amount appropriated under section 612;
(2) any amount received by the Secretary under section
604(b)(4); and
(3) any amount received by the Secretary under subsection (c).
(c) ADMINISTRATION. -- Any amount in the Fund determined by the
Secretary to be in excess of the amount currently required to carry out
the provisions of this title shall be invested by the Secretary in
obligations of, or obligations guaranteed as to both principal and
interest by, the United States or any agency of the United States.
SEC. 610. "12 USC 1715l note" REPORT.
Not later than March 1, 1990, the Secretary shall prepare and submit
to the Congress a comprehensive report setting forth the activities
carried out under this title. Such report shall include --
(1) an analysis of the characteristics of the families assisted
under this title, including family size, number of children,
family income, sources of family income, race, age, and sex;
(2) an analysis of the market value of homes purchased under
this title;
(3) an analysis of the non-Federal public and private financial
or other contributions made to reduce the cost of homes
constructed or substantially rehabilitated under each program;
(4) an analysis of the sales prices of homes under this title;
(5) an analysis of the amounts of the grants made to programs
under this title; and
(6) any recommendations of the Secretary for modifications in
the program established by this title in order to ensure the
effective implementation of such program.
SEC. 611. "12 USC 1715l note" REGULATIONS.
Not later than July 1, 1988, the Secretary shall issue final
regulations to carry out the provisions of this title. Any such
regulations shall be issued in accordance with section 553 of title 5,
United States Code, notwithstanding the provisions of subsection (a)(2)
of such section.
SEC. 612. "12 USC 1715l note" AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this title
$25,000,000 for fiscal year 1988 and $100,000,000 for fiscal year 1989.
Any amount appropriated under this section shall be deposited in the
Nehemiah Housing Opportunity Fund, and shall remain available until
expended.
SEC. 613. "12 USC 1715l note" SUNSET.
No assistance may be provided under this title after September 30,
1989, except pursuant to a commitment made on or before such date.
SEC. 701. "42 USC 11501" DESIGNATION OF ENTERPRISE ZONES.
(a) DESIGNATION OF ZONES. --
(1) DEFINITION. -- For purposes of this section, the term
"enterprise zone" means any area that --
(A) is nominated by one or more local governments and the State
or States in which it is located for designation as an enterprise
zone (in this section referred to as a "nominated area"); and
(B) the Secretary of Housing and Urban Development designates
as an enterprise zone, after consultation with --
(i) the Secretaries of Agriculture, Commerce, Labor, and the
Treasury, the Director of the Office of Management and Budget, and
the Administrator of the Small Business Administration; and
(ii) in the case of an area on an Indian reservation, the
Secretary of the Interior.
(2) NUMBER OF DESIGNATIONS. --
(A) IN GENERAL. -- The Secretary of Housing and Urban
Development may designate not more than 100 nominated areas as
enterprise zones.
(B) MINIMUM DESIGNATION IN RURAL AREAS. -- Of the areas
designated under clause (i), not less than 1/3 shall be areas that
--
(i) are within a local government jurisdiction or jurisdictions
with a population of less than 50,000 (as determined under the
most recent census data available);
(ii) are outside of a metropolitan statistical area (as
designated by the Director of the Office of Management and
Budget); or
(iii) that are determined by the Secretary, after consultation
with the Secretary of Commerce, to be rural areas.
(3) AREAS DESIGNATED BASED SOLELY ON DEGREE OF POVERTY. --
(A) IN GENERAL. -- Except as provided in subparagraph (B), the
Secretary shall designate the nominated areas with the highest
average ranking with respect to the criteria set forth in
subparagraphs (C), (D), and (E) of subsection (c)(3). For
purposes of the preceding sentence, an area shall be ranked within
each such criterion on the basis of the amount by which the area
exceeds such criterion, with the area that exceeds such criterion
by the greatest amount given the highest ranking.
(B) EXCEPTION WHERE INADEQUATE COURSE OF ACTION, ETC. -- An
area shall not be designated under subparagraph (A), if the
Secretary determines that the course of action with respect to
such area is inadequate.
(C) SEPARATE APPLICATION TO RURAL AND OTHER AREAS. --
Subparagraph (A) shall be applied separately with respect to areas
described in paragraph (2)(B) and to other areas.
(4) LIMITATION ON DESIGNATIONS. --
(A) PUBLICATION OF REGULATIONS. -- Before designating any area
as an enterprise zone, the Secretary shall prescribe by regulation
not later than 4 months following the date of the enactment of
this Act, after consultation with the officials described in
paragraph (1)(B) --
(i) the procedures for nominating an area under paragraph
(1)(A);
(ii) the parameters relating to the size and population
characteristics of an enterprise zone; and
(iii) the manner in which nominated areas will be evaluated
based on the criteria specified in subsection (d).
(B) TIME LIMITATIONS. -- The Secretary shall designate
nominated areas as enterprise zones only during the 24-month
period beginning on the 1st day of the 1st month following the
month in which the effective date of the regulations described in
subparagraph (A) occurs.
(C) PROCEDURAL RULES. -- The Secretary shall not make any
designation under paragraph (1) unless --
(i) the local governments and the State in which the nominated
area is located have the authority --
(I) to nominate such area for designation as an enterprise
zone;
(II) to make the State and local commitments under subsection
(d); and
(III) to provide assurances satisfactory to the Secretary that
such commitments will be fulfilled;
(ii) a nomination therefor is submitted in such a manner and in
such form, and contains such information, as the Secretary shall
be regulation prescribe;
(iii) the Secretary determines that any information furnished
is reasonably accurate; and
(iv) the State and local governments certify that no portion of
the area nominated is already included in an enterprise zone or in
an area otherwise nominated to be an enterprise zone.
(5) NOMINATION PROCESS FOR INDIAN RESERVATIONS. -- In the case
of a nominated area on an Indian reservation, the reservation
governing body (as determined by the Secretary of the Interior)
shall be deemed to be both the State and local governments with
respect to such area.
(b) PERIOD FOR WHICH DESIGNATION IS IN EFFECT. --
(1) IN GENERAL. -- Any designation of an area as an enterprise
zone shall remain in effect during the period beginning on the
date of the designation and ending on the earliest of --
(A) December 31 of the 24th calendar year following the
calendar year in which such date occurs;
(B) the termination date designated by the State and local
governments as provided for in their nomination pursuant to
subsection (a)(4)(C)(ii); or
(C) the date the Secretary revokes such designation under
paragraph (2).
(2) REVOCATION OF DESIGNATION. -- The Secretary, after
consultation with the officials described in subsection (a)(1)(B)
and a hearing on the record involving officials of the State or
local government involved, may revoke the designation of an area
if the Secretary determines that the local government or the State
in which it is located is not complying substantially with the
State and local commitments pursuant to subsection (d).
(c) AREA AND ELIGIBILITY REQUIREMENTS. --
(1) IN GENERAL. -- The Secretary may make a designation of any
nominated area under subsection (a)(1) only if it meets the
requirements of paragraphs (2) and (3).
(2) AREA REQUIREMENTS. -- A nominated area meets the
requirements of this paragraph if --
(A) the area is within the jurisdiction of the local
government;
(B) the boundary of the area is continuous; and
(C) the area --
(i) has a population, as determined by the most recent census
data available, of not less than --
(I) 4,000 if any portion of such area (other than a rural area
described in subsection (a)(2)(B)(i)) is located within a
metropolitan statistical area (as designated by the Director of
the Office of Management and Budget) with a population of 50,000
or more; or
(II) 1,000 in any other case; or
(ii) is entirely within an Indian reservation (as determined by
the Secretary of the Interior).
(3) ELIGIBILITY REQUIREMENTS. -- For purposes of paragraph
(1), a nominated area meets the requirements of this paragraph if
the State and local governments in which it is located certify and
the Secretary, after such review of supporting data as he deems
appropriate, accepts such certification, that --
(A) the area is one of pervasive poverty, unemployment, and
general distress;
(B) the area is located wholly within the jurisdiction of a
local government that is eligible for Federal assistance under
section 119 of the Housing and Community Development Act of 1974,
as in effect on the date of the enactment of this Act;
(C) the unemployment rate, as determined by the appropriate
available data, was not less than 1.5 times the national
unemployment rate for that period;
(D) the poverty rate (as determined by the most recent census
data available) for each populous census tract (or where not
tracted, the equivalent county division as defined by the Bureau
of the Census for the purpose of defining poverty areas) within
the area was not less than 20 percent for the period to which such
data relate; and
(E) the area meets at least one of the following criteria:
(i) Not less than 70 percent of the households living in the
area have incomes below 80 percent of the median income of
households of the local government (determined in the same manner
as under section 119(b)(2) of the Housing and Community
Development Act of 1974).
(ii) The population of the area decreased by 20 percent or more
between 1970 and 1980 (as determined from the most recent census
available).
(4) ELIGIBILITY REQUIREMENTS FOR RURAL AREAS. -- For purposes
of paragraph (1), a nominated area that is a rural area described
in subsection (a)(2)(B) meets the requirements of paragraph (3) if
the State and local governments in which it is located certify and
the Secretary, after such review of supporting data as he deems
appropriate, accepts such certification, that the area meets --
(A) the criteria set forth in subparagraphs (A) and (B) of
paragraph (3); and
(B) not less than one of the criteria set forth in the other
subparagraphs of paragraph (3).
(d) REQUIRED STATE AND LOCAL COMMITMENTS. --
(1) IN GENERAL. -- No nominated area shall be designated as an
enterprise zone unless the local government and the State in which
it is located agree in writing that, during any period during
which the area is an enterprise zone, such governments will follow
a specified course of action designated to reduce the various
burdens borne by employers or employees in such area. A course of
action shall not be treated as meeting the requirements of this
paragraph unless the course of action include provisions described
in not less than 4 of the subparagraphs of paragraph (2).
(2) COURSE OF ACTION. -- The course of action under paragraph
(1) may be implemented by both such governments and private
nongovernmental entities, may be funded from proceeds of any
program administered by the Secretary of Housing and Urban
Development or of any program administered by the Secretary of
Agriculture under title V of the Housing Act of 1949, and may
include, but is not limited to --
(A) a reduction of tax rates or fees applying within the
enterprise zone;
(B) an increase in the level of public services, or in the
efficiency of the delivery of public services, within the
enterprise zone;
(C) actions to reduce, remove, simplify, or streamline
paperwork requirements within the enterprise zone;
(D) involvement in the program by public authorities or private
entities, organizations, neighborhood associations, and community
groups, particularly those within the nominated area, including a
written commitment to provide jobs and job training for, and
technical, financial, or other assistance to, employers,
employees, and residents of the nominated area;
(E) the giving of special preference to contractors owned and
operated by members of any minority; and
(F) the gift (or sale at below fair market value) of surplus
land in the enterprise zone to neighborhood organizations agreeing
to operate a business on the land.
(3) RECOGNITION OF PAST EFFORTS. -- In evaluating courses of
action agreed to by any State or local government, the Secretary
shall take into account the past efforts of such State or local
government in reducing the various burdens borne by employers and
employees in the area involved.
(4) PROHIBITION OF ASSISTANCE FOR BUSINESS RELOCATIONS. --
(A) IN GENERAL. -- The course of action implemented under
paragraph (1) may not include any action to assist --
(i) any establishment relocating from one area to another area;
or
(ii) any subcontractor whose purpose is to divest, or whose
economic success is dependent upon divesting, any other contractor
or subcontractor of any contract customarily performed by such
other contractor or subcontractor.
(B) EXCEPTION. -- The limitations established in subparagraph
(A) shall not be construed to prohibit assistance for the
expansion of an existing business entity through the establishment
of a new branch, affiliate, or subsidiary if the Secretary --
(i) finds that the establishment of the new branch, affiliate,
or subsidiary will not result in an increase in unemployment in
the area of original location or in any other area where the
existing business entity conducts business operations; and
(ii) has no reason to believe that the new branch, affiliate,
or subsidiary is being established with the intention of closing
down the operations of the existing business entity in the area of
its original location or in any other area where the existing
business entity conducts business operations.
(e) DEFINITIONS. -- For purposes of this section:
(1) GOVERNMENT. -- If more than one government seeks to
nominate an area as an enterprise zone, any reference to, or
requirement of, this section shall apply to all such governments.
(2) LOCAL GOVERNMENT. -- The term "local government" means --
(A) any county, city, town, township, parish, village, or other
general purpose political subdivision of a State;
(B) any combination of political subdivisions described in
subparagraph (A) recognized by the Secretary; and
(C) the District of Columbia.
(3) SECRETARY. -- The term "Secretary" means the Secretary of
Housing and Urban Development.
(4) STATE. -- The term "State" includes Puerto Rico, the
Virgin Islands, Guam, American Samoa, the Northern Mariana
Islands, and any other possession of the United States.
SEC. 702. "42 USC 11502" EVALUATION AND REPORTING REQUIREMENTS.
Not later than the close of the 4th calendar year after the year in
which the Secretary of Housing and Urban Development first designates
areas as enterprise zones, and at the close of each 4th calendar year
thereafter, the Secretary shall prepare and submit to the Congress a
report on the effects of such designation in accomplishing the purposes
of this title.
SEC. 703. "42 USC 11503" INTERACTION WITH OTHER FEDERAL PROGRAMS.
(a) COORDINATION WITH RELOCATION ASSISTANCE. -- The designation of
an enterprise zone under section 701 shall not --
(1) constitute approval of a Federal or federally assisted
program or project (within the meaning of the Uniform Relocation
Assistance and Real Property Acquisition Policy Act of 1970 (42
U.S.C. 4601 et seq.)); or
(2) entitle any person displaced from real property located in
such zone to any rights or any benefits under such Act.
(b) ENTERPRISE ZONES TREATED AS LABOR SURPLUS AREAS. -- Any area
that is designated as an enterprise zone under section 701 shall be
treated for all purposes under Federal law as a labor surplus area.
SEC. 704. "42 USC 11504" WAIVER OR MODIFICATION OF HOUSING AND
COMMUNITY DEVELOPMENT RULES IN ENTERPRISE ZONES.
(a) IN GENERAL. -- Upon the written request of the governments that
designated and approved an area that has been designated as an
enterprise zone under section 701, the Secretary of Housing and Urban
Development (or, with respect to any rule issued under title V of the
Housing Act of 1949, the Secretary of Agriculture) may, in order to
further the job creation, community development, or economic
revitalization objectives of the zone, waive or modify all or part of
any rule that the Secretary has authority to promulgate, as such rule
pertains to the carrying out of projects, activities, or undertakings
within the zone.
(b) LIMITATION. -- No provision of this section may be construed to
authorize the Secretary to waive or modify any rule adopted to carry out
a statute or Executive order that prohibits, or the purpose of which is
to protect persons against, discrimination on the basis of race, color,
religion, sex, marital status, national origin, age, or handicap.
(c) SUBMISSION OF REQUESTS. -- A request under subsection (a) shall
specify the rule or rules to be waived or modified and the change
proposed, and shall briefly describe why the change would promote the
achievement of the job creation, community development, or economic
revitalization objectives of the enterprise zone. If a request is made
to the Secretary of Agriculture, the requesting governments shall send a
copy of the request to the Secretary of Housing and Urban Development at
the time the request is made.
(d) CONSIDERATION OF REQUESTS. -- In considering a request, the
Secretary shall weigh the extent to which the proposed change is likely
to further job creation, community development, or economic
revitalization within the enterprise zone against the effect the change
is likely to have on the underlying purposes of applicable statutes in
the geographic area that would be affected by the change. The Secretary
shall approve the request whenever the Secretary finds, in the
discretion of the Secretary, that the public interest that the proposed
change would serve in furthering such job creation, community
development or economic revitalization outweighs the public interest
that continuation of the rule unchanged would serve in furthering such
underlying purposes. The Secretary shall not approve any request to
waive or modify a rule if that waiver or modification would --
(1) directly violate a statutory requirement; or
(2) be likely to present a significant risk to the public
health, including environmental health or safety.
(e) NOTICE OF DISAPPROVAL. -- If a request is disapproved, the
Secretary shall inform the requesting governments in writing of the
reasons therefor and shall, to the maximum extent possible, work with
such governments to develop an alternative, consistent with the
standards contained in subsection (d).
(f) PERIOD FOR DETERMINATION. -- The Secretary shall discharge the
responsibilities of the Secretary under this section in an expeditious
manner, and shall make a determination on requests not later than 90
days after their receipt.
(g) APPLICABLE PROCEDURES. -- A waiver or modification of a rule
under subsection (a) shall not be considered to be a rule, rulemaking,
or regulation under chapter 5 of title 5, United States Code. To
facilitate reaching a decision on any requested waiver or modification,
the Secretary may seek the views of interested parties and, if the views
are to be sought, determine how they should be obtained and to what
extent, if any, they should be taken into account in considering the
request. The Secretary shall publish a notice in the Federal Register
stating any waiver or modification of a rule under this section.
(h) EFFECT OF SUBSEQUENT AMENDMENT OF RULES. -- In the event that
the Secretary proposes to amend a rule for which a waiver or
modification under this section is in effect, the Secretary shall not
change the waiver or modification to impose additional requirements
unless the Secretary determines, consistent with standards contained in
subsection (d), that such action is necessary.
(i) EXPIRATION OF WAIVERS AND MODIFICATIONS. -- No waiver or
modification of a rule under this section shall remain in effect for a
longer period than the period for which the enterprise zone designation
remains in effect for the area in which the waiver or modification
applies.
(j) DEFINITIONS. -- For purposes of this section:
(1) RULE. -- The term "rule" means --
(A) any rule as defined in section 551(4) of title 5, United
States Code; or
(B) any rulemaking conducted on the record after opportunity
for an agency hearing pursuant to sections 556 and 557 of such
title 5.
(2) SECRETARY. -- The term "Secretary" means the Secretary of
Housing and Urban Development or, with respect to any rule issued
under title V of the Housing Act of 1949, the Secretary of
Agriculture.
SEC. 705. COORDINATION OF HOUSING AND URBAN DEVELOPMENT PROGRAMS IN
ENTERPRISE ZONES.
Section 3 of the Department of Housing and Urban Development Act "42
USC 3532" is amended by adding at the end the following new subsection:
"(d) The Secretary shall --
"(1) promote the coordination of all programs under the
jurisdiction of the Secretary that are carried on within an
enterprise zone designated pursuant to section 701 of the Housing
and Community Development Act of 1987;
"(2) expedite, to the greatest extent possible, the
consideration of applications for programs referred to in
paragraph (1) through the consolidation of forms or otherwise;
and
"(3) provide, whenever possible, for the consolidation of
periodic reports required under programs referred to in paragraph
(1) into one summary report submitted at such intervals as may be
designated by the Secretary.".
SEC. 706. "42 USC 11505" COORDINATION WITH CDBG AND UDAG PROGRAMS.
It is the policy of the Congress that amounts provided under the
community development block grant and urban development action grant
programs under title I of the Housing and Community Development Act of
1974 shall not be reduced in any fiscal year in which the provisions of
this title are in effect.
Approved February 5, 1988.
LEGISLATIVE HISTORY -- S. 825 (H.R. 4):
HOUSE REPORTS: No. 100-122 and Pt. 2 accompanying H.R. 4 (Comm. on
Banking, Finance and Urban Affairs) and No. 100-426 (Comm. of
Conference).
SENATE REPORTS: No. 100-21 (Comm. on Banking, Housing, and Urban
Affairs).
CONGRESSIONAL RECORD, Vol. 133 (1987): Mar. 30, 31, considered and
passed Senate. June 10, 11, H.R. 4 considered and passed House. June
17, S. 825 considered and passed House, amended. Nov. 9, House agreed
to conference report. Dec. 21, Senate concurred in House amendments
with amendment. House concurred in Senate amendment.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): Feb.
5, Presidential remarks.
Public Law 100-241, 101 Stat. 1788
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That (a) this Act may be
cited as the "Alaska Native Claims Settlement Act Amendments of 1987".
(b) Unless otherwise expressly provided, whenever in this Act "43 USC
1601 note" an amendment is expressed in terms of an amendment to a
section or subsection, the reference shall be considered to be made to a
section or subsection of the Alaska Native Claims Settlement Act (43
U.S.C. 1601 and following).
SEC. 2. "43 USC 1601 note" The Congress finds and declares that --
(1) the Alaska Native Claims Settlement Act was enacted in 1971
to achieve a fair and just settlement of all aboriginal land and
hunting and fishing claims by Natives and Native groups of Alaska
with maximum participation by Natives in decisions affecting their
rights and property;
(2) the settlement enabled Natives to participate in the
subsequent expansion of Alaska's economy, encouraged efforts to
address serious health and welfare problems in Native villages,
and sparked a resurgence of interest in the cultural heritage of
the Native peoples of Alaska;
(3) despite these achievements and Congress's desire that the
settlement be accomplished rapidly without litigation and in
conformity with the real economic and social needs of Natives, the
complexity of the land conveyance process and frequent and costly
litigation have delayed implementation of the settlement and
diminished its value;
(4) Natives have differing opinions as to whether the Native
Corporation, as originally structured by the Alaska Native Claims
Settlement Act, is well adapted to the reality of life in Native
villages and to the continuation of traditional Native cultural
values;
(5) to ensure the continued success of the settlement and to
guarantee Natives continued participation in decisions affecting
their rights and property, the Alaska Native Claims Settlement Act
must be amended to enable the shareholders of each Native
Corporation to structure the further implementation of the
settlement in light of their particular circumstances and needs;
(6) among other things, the shareholders of each Native
Corporation must be permitted to decide --
(A) when restrictions on alienation of stock issued as part of
the settlement should be terminated, and
(B) whether Natives born after December 18, 1971, should
participate in the settlement;
(7) by granting the shareholders of each Native Corporation
options to structure the further implementation of the settlement,
Congress is not expressing an opinion on the manner in which such
shareholders choose to balance individual rights and communal
rights;
(8) no provision of this Act shall --
(A) unless specifically provided, constitute a repeal or
modification, implied or otherwise, of any provision of the Alaska
Native Claims Settlement Act; or
(B) confer on, or deny to, any Native organization any degree
of sovereign governmental authority over lands (including
management or regulation of the taking, of fish and wildlife) or
persons in Alaska; and
(9) the Alaska Native Claims Settlement Act and this Act are
Indian legislation enacted by Congress pursuant to its plenary
authority under the Constitution of the United States to regulate
Indian affairs.
SEC. 3. Section 3 (43 U.S.C. 1602) is amended --
(1) by inserting "group," after "individual," in subsection
(h);
(2) by striking out "and" at the end of subsection (k);
(3) by striking out the period at the end of subsection (l) and
inserting in lieu thereof a semicolon;
(4) by striking out "Native Group." in subsection (m) and
inserting in lieu thereof "Group Corporation;"; and
(5) by adding at the end thereof the following new subsections:
"(n) 'Group Corporation' means an Alaska Native Group Corporation
organized under the laws of the State of Alaska as a business for profit
or nonprofit corporation to hold, invest, manage and/or distribute
lands, property, funds, and other rights and assets for and on behalf of
members of a Native group in accordance with the terms of this Act;
"(o) 'Urban Corporation' means an Alaska Native Urban Corporation
organized under the laws of the State of Alaska as a business for profit
or nonprofit corporation to hold, invest, manage and/or distribute
lands, property, funds, and other rights and assets for and on behalf of
members of an urban community of Natives in accordance with the terms of
this Act;
"(p) 'Settlement Common Stock' means stock of a Native Corporation
issued pursuant to section 7(g)(1) that carries with it the rights and
restrictions listed in section 7(h)(1);
"(q) 'Replacement Common Stock' means stock of a Native Corporation
issued in exchange for Settlement Common Stock pursuant to section
7(h)(3);
"(r) 'Descendant of a Native' means --
"(1) a lineal descendant of a Native or of an individual who
would have been a Native if such individual were alive on December
18, 1971, or
"(2) an adoptee of a Native or of a descendant of a Native,
whose adoption --
"(A) occurred prior to his or her majority, and
"(B) is recognized at law or in equity;
"(s) 'Alienability restrictions' means the restrictions imposed on
Settlement Common Stock by section 7(h)(1)(B);
"(t) 'Settlement Trust' means a trust --
"(1) established and registered by a Native Corporation under
the laws of the State of Alaska pursuant to a resolution of its
shareholders, and
"(2) operated for the sole benefit of the holders of the
corporation's Settlement Common Stock in accordance with section
39 and the laws of the State of Alaska.".
SEC. 4. Subsection (g) of section 7 (43 U.S.C. 1606(g)) is amended
to read as follows:
"(g)(1) SETTLEMENT COMMON STOCK. -- (A) The Regional Corporation
shall be authorized to issue such number of shares of Settlement Common
Stock (divided into such classes as may be specified in the articles of
incorporation to reflect the provisions of this Act) as may be needed to
issue one hundred shares of stock to each Native enrolled in the region
pursuant to section 5.
"(B)(i) A Regional Corporation may amend its articles of
incorporation to authorize the issuance of additional shares of
Settlement Common Stock to --
"(I) Natives born after December 18, 1971,
"(II) Natives who were eligible for enrollment pursuant to
section 5 but were not so enrolled, or
"(III) Natives who have attained the age of 65,
for no consideration or for such consideration and upon such terms
and conditions as may be specified in such amendment or in a resolution
approved by the board of directors pursuant to authority expressly
vested in the board by the amendment. The amendment to the articles of
incorporation may specify which class of Settlement Common Stock shall
be issued to the various groups of Natives.
"(ii) Not more than one hundred shares of Settlement Common Stock
shall be issued to any one individual pursuant to clause (i).
"(iii) The amendment authorized by clause (i) may provide that
Settlement Common Stock issued to a Native pursuant to such amendment
(or stock issued in exchange for such Settlement Common Stock pursuant
to subsection (h)(3) or section 37(d)) shall be deemed cancelled upon
the death of such Native. No compensation for this cancellation shall
be paid to the estate of the deceased Native or to any person holding
the stock.
"(iv) Settlement Common Stock issued pursuant to clause (i) shall not
carry rights to share in distributions made to shareholders pursuant to
subsections (j) and (m) unless, prior to the issuance of such stock, a
majority of the class of existing holders of Settlement Common Stock
carrying such rights separately approve the granting of such rights.
The articles of incorporation of the Regional Corporation shall be
deemed to be amended to authorize such class vote.
"(C)(i) A Regional Corporation may amend its articles of
incorporation to authorize the issuance of additional shares of
Settlement Common Stock as a dividend or other distribution (without
regard to surplus of the corporation under the laws of the State) upon
each outstanding share of Settlement Common Stock issued pursuant to
subparagraphs (A) and (B).
"(ii) The amendment authorized by clause (i) may provide that shares
of Settlement Common Stock issued as a dividend or other distribution
shall constitute a separate class of stock with greater per share voting
power than Settlement Common Stock issued pursuant to subparagraphs (A)
and (B).
"(2) OTHER FORMS OF STOCK. -- (A) A Regional Corporation may amend
its articles of incorporation to authorize the issuance of shares of
stock other than Settlement Common Stock in accordance with the
provisions of this paragraph. Such amendment may provide that --
"(i) preemptive rights of shareholders under the laws of the
State shall not apply to the issuance of such shares, or
"(ii) issuance of such shares shall permanently preclude the
corporation from --
"(I) conveying assets to a Settlement Trust, or
"(II) issuing shares of stock without adequate consideration as
required under the laws of the State.
"(B) The amendment authorized by subparagraph (A) may provide that
the stock to be issued shall be one or more of the following --
"(i) divided into classes and series within classes, with
preferences, limitations, and relative rights, including, without
limitation --
"(I) dividend rights,
"(II) voting rights, and
"(III) liquidation preferences;
"(ii) made subject to one or more of --
"(I) the restrictions on alienation described in clauses (i),
(ii), and (iv) of subsection (h)(1)(B), and
"(II) the restriction described in paragraph (1)(B)(iii); and
"(iii) restricted in issuance to --
"(I) Natives who have attained the age of sixty-five;
"(II) other identifiable groups of Natives or identifiable
groups of descendants of Natives defined in terms of general
applicability and not in any way by reference to place of
residence or family;
"(III) Settlement Trusts; or
"(IV) entities established for the sole benefit of Natives or
descendants of Natives, in which the classes of beneficiaries are
defined in terms of general applicability and not in any way by
reference to place of residence, family, or position as an
officer, director, or employee of a Native Corporation.
"(C) The amendment authorized by subparagraph (A) shall provide that
the additional shares of stock shall be issued --
"(i) as a dividend or other distribution (without regard to
surplus of the corporation under the laws of the State) upon all
outstanding shares of stock of any class or series, or
"(ii) for such consideration as may be permitted by law (except
that this requirement may be waived with respect to issuance of
stock to the individuals or entities described in subparagraph
(B)(iii)).
"(D) During any period in which alienability restrictions are in
effect, no stock whose issuance is authorized by subparagraph (A) shall
be --
"(i) issued to, or for the benefit of, a group of individuals
composed only or principally of employees, officers, and directors
of the corporation; or
"(ii) issued more than thirteen months after the date on which
the vote of the shareholders on the amendment authorizing the
issuance of such stock occurred if, as a result of the issuance,
the outstanding shares of Settlement Common Stock will represent
less than a majority of the total voting power of the corporation
for the purpose of electing directors.
"(3) DISCLOSURE REQUIREMENTS. -- (A) An amendment to the articles of
incorporation of a Regional Corporation authorized by paragraph (2)
shall specify --
"(i) the maximum number of shares of any class or series of
stock that may be issued, and
"(ii) the maximum number of votes that may be held by such
shares.
"(B)(i) If the board of directors of a Regional Corporation intends
to propose an amendment pursuant to paragraph (2) which would authorize
the issuance of classes or series of stock that, singly or in
combination, could cause the outstanding shares of Settlement Common
Stock to represent less than a majority of the total voting power of the
corporation for the purposes of electing directors, the shareholders of
such corporation shall be expressly so informed.
"(ii) Such information shall be transmitted to the shareholders in a
separate disclosure statement or in another informational document in
writing or in recorded sound form both in English and any Native
language used by a shareholder of such corporation. Such statement or
informational document shall be transmitted to the shareholders at least
sixty days prior to the date on which such proposal is to be submitted
for a vote.
"(iii) If not later than thirty days after issuance of such
disclosure statement or informational document the board of directors
receives a prepared concise statement setting forth arguments in
opposition to the proposed amendment together with a request for
distribution thereof signed by the holders of at least 10 per centum of
the outstanding shares of Settlement of Common Stock, the board shall
either distribute such statement to the shareholders or provide to the
requesting shareholders a list of all shareholder's names and addresses
so that the requesting shareholders may distribute such statement.
"(4) SAVINGS. -- (A)(i) No shares of stock issued pursuant to
paragraphs (1)(C) and (2) shall carry rights to share in distributions
made to shareholders pursuant to subsections (j) and (m). No shares of
stock issued pursuant to paragraph (1)(B) shall carry such rights unless
authorized pursuant to paragraph (1)(B)(iv).
"(ii) Notwithstanding the issuance of additional shares of stock
pursuant to paragraphs (1)(B), (1)(C), or (2), a Regional Corporation
shall apply the ratio last computed pursuant to subsection (m) prior to
the date of the enactment of the Alaska Native Claims Settlement Act
Amendments of 1987 for purposes of distributing funds pursuant to
subsections (j) and (m).
"(B) The issuance of additional shares of stock pursuant to
paragraphs (1)(B), (1)(C), or (2) shall not affect the division and
distribution of revenues pursuant to subsection (i).
"(C) No provision of this Act shall limit the right of a Regional
Corporation to take an action authorized by the laws of the State unless
such action is inconsistent with the provisions of this Act.".
SEC. 5. Subsection (h) of section 7 (43 U.S.C. 1606(h)) is amended
to read as follows:
"(h)(1) RIGHTS AND RESTRICTIONS. -- (A) Except as otherwise
expressly provided in this Act, Settlement Common Stock of a Regional
Corporation shall --
"(i) carry a right to vote in elections for the board of
directors and on such other questions as properly may be presented
to shareholders;
"(ii) permit the holder to receive dividends or other
distributions from the corporation; and
"(iii) vest in the holder all rights of a shareholder in a
business corporation organized under the laws of the State.
"(B) Except as otherwise provided in this subsection, Settlement
Common Stock, inchoate rights thereto, and rights to dividends or
distributions declared with respect thereto shall not be --
"(i) sold;
"(ii) pledged;
"(iii) subjected to a lien or judgment execution;
"(iv) assigned in present or future;
"(v) treated as an asset under --
"(I) title 11 of the United States Code or any successor
statute,
"(II) any other insolvency or moratorium law, or
"(III) other laws generally affecting creditors' rights; or
"(vi) otherwise alienated.
"(C) Notwithstanding the restrictions set forth in subparagraph (B),
Settlement Common Stock may be transferred to a Native or a descendant
of a Native --
"(i) pursuant to a court decree of separation, divorce, or
child support;
"(ii) by a holder who is a member of a professional
organization, association, or board that limits his or her ability
to practice his or her profession because he or she holds
Settlement Common Stock; or
"(iii) as an inter vivos gift from a holder to his or her
child, grandchild, great-grandchild, niece, or nephew.
"(2) INHERITANCE OF SETTLEMENT COMMON STOCK. -- (A) Upon the death
of a holder of Settlement Common Stock, ownership of such stock (unless
canceled in accordance with subsection (g)(1)(B)(iii)) shall be
transferred in accordance with the lawful will of such holder or
pursuant to applicable laws of intestate succession. If the holder
fails to dispose of his or her stock by will and has no heirs under
applicable laws of intestate succession, the stock shall escheat to the
issuing Regional Corporation and be canceled.
"(B) The issuing Regional Corporation shall have the right to
purchase at fair value Settlement Common Stock transferred pursuant to
applicable laws of intestate succession to a person not a Native or a
descendant of a Native after the date of the enactment of the Alaska
Native Claims Settlement Act Amendments of 1987 if --
"(i) the corporation --
"(I) amends its articles of incorporation to authorize such
purchases, and
"(II) gives the person receiving such stock written notice of
its intent to purchase within ninety days after the date that the
corporation either determines the decedent's heirs in accordance
with the laws of the State or receives notice that such heirs have
been determined, whichever later occurs; and
"(ii) the person receiving such stock fails to transfer the
stock pursuant to paragraph (1)(C)(iii) within sixty days after
receiving such written notice.
"(C) Settlement Common Stock of a Regional Corporation --
"(i) transferred by will or pursuant to applicable laws of
intestate succession after the date of the enactment of the Alaska
Native Claims Settlement Act Amendments of 1987, or
"(ii) transferred by any means prior to the date of the
enactment of the Alaska Native Claims Settlement Act Amendments of
1987,
to a person not a Native or a descendant of a Native shall not carry
voting rights. If at a later date such stock is lawfully transferred to
a Native or a descendant of a Native, voting rights shall be
automatically restored.
"(3) REPLACEMENT COMMON STOCK. -- (A) On the date on which
alienability restrictions terminate in accordance with the provisions of
section 37, all Settlement Common Stock previously issued by a Regional
Corporation shall be deemed canceled, and shares of Replacement Common
Stock of the appropriate class shall be issued to each shareholder,
share for share, subject only to subparagraph (B) and to such
restrictions consistent with this Act as may be provided by the articles
of incorporation of the corporation or in agreements between the
corporation and individual shareholders.
"(B)(i) Replacement Common Stock issued in exchange for Settlement
Common Stock issued subject to the restriction authorized by subsection
(g)(1)(B)(iii) shall bear a legend indicating that the stock will
eventually be canceled in accordance with the requirements of that
subsection.
"(ii) Prior to the termination of alienability restrictions, the
board of directors of the corporation shall approve a resolution to
provide that each share of Settlement Common Stock carrying the right to
share in distributions made to shareholders pursuant to subsections (j)
and (m) shall be exchanged either for --
"(I) a share of Replacement Common Stock that carries such
right, or
"(II) a share of Replacement Common Stock that does not carry
such right together with a separate, non-voting security that
represents only such right.
"(iii) Replacement Common Stock issued in exchange for a class of
Settlement Common Stock carrying greater per share voting power than
Settlement Common Stock issued pursuant to subsections (g)(1)(A) and
(g)(1)(B) shall carry such voting power and be subject to such other
terms as may be provided in the amendment to the articles of
incorporation authorizing the issuance of such class of Settlement
Common Stock.
"(C) The articles of incorporation of the Regional Corporation shall
be deemed amended to authorize the issuance of Replacement Common Stock
and the security described in subparagraph (B)(ii)(II).
"(D) Prior to the date on which alienability restrictions terminate,
a Regional Corporation may amend its articles of incorporation to impose
upon Replacement Common Stock one or more of the following --
"(i) a restriction denying voting rights to any holder of
Replacement Common Stock who is not a Native or a descendant of a
Native;
"(ii) a restriction granting the Regional Corporation, or the
Regional Corporation and members of the shareholder's immediate
family who are Natives or descendants of Natives, the first right
to purchase, on reasonable terms, the Replacement Common Stock of
the shareholder prior to the sale or transfer of such stock (other
than a transfer by will or intestate succession) to any other
party, including a transfer in satisfaction of a lien, writ of
attachment, judgment execution, pledge, or other encumbrance; and
"(iii) any other term, restriction, limitation, or provision
authorized by the laws of the State.
"(E) Replacement Common Stock shall not be subjected to a lien or
judgment execution based upon any asserted or unasserted legal
obligation of the original recipient arising prior to the issuance of
such stock.".
SEC. 6. Subsection (c) of section 8 (43 U.S.C. 1607(c)) is amended
to read as follows:
"(c) APPLICABILITY OF SECTION 7. -- The provisions of subsections
(g), (h), and (o) of section 7 shall apply in all respects to Village
Corporations, Urban Corporations, and Group Corporations.".
SEC. 7. The Alaska Native Claims Settlement Act is further amended
by adding the following new section:
"PROCEDURES FOR CONSIDERING AMENDMENTS AND RESOLUTIONS
"SEC. 36. "43 USC 1629b" (a) COVERAGE. -- Notwithstanding any
provision of the articles of incorporation and bylaws of a Native
Corporation or of the laws of the State, except those related to proxy
statements and solicitations that are not inconsistent with this section
--
"(1) an amendment to the articles of incorporation of a Native
Corporation authorized by subsections (g) and (h) of section 7,
subsection (d)(1)(B) of this section, or section 37;
"(2) a resolution authorized by section 38(a)(2);
"(3) a resolution to establish a Settlement Trust; or
"(4) a resolution to convey all or substantially all of the
assets of a Native Corporation to a Settlement Trust pursuant to
section 39(a)(1);
shall be considered in accordance with the provisions of this
section.
"(b) BASIC PROCEDURE. -- (1) An amendment or resolution described in
subsection (a) may be approved by the board of directors of a Native
Corporation in accordance with its bylaws. If the board approves the
amendment or resolution, it shall direct that the amendment or
resolution be submitted to a vote of the shareholders at the next annual
meeting or at a special meeting (if the board, at its discretion,
schedules such special meeting). One or more such amendments or
resolutions may be submitted to the shareholders and voted upon at one
meeting.
"(2)(A) A written notice (including a proxy statement if required
under applicable law), setting forth the amendment or resolution
approved pursuant to paragraph (1) (and, at the discretion of the board,
a summary of the changes to be effected) together with any amendment or
resolution submitted pursuant to subsection (c) and the statements
described therein shall be sent, not less than fifty days nor more than
sixty days prior to the meeting of the shareholders, by first-class mail
or hand-delivered to each shareholder of record entitled to vote at his
or her address as it appears in the records of the Native Corporation.
The corporation may also communicate with its shareholders at any time
and in any manner authorized by the laws of the State.
"(B) The board of directors may, but shall not be required to,
appraise or otherwise determine the value of --
"(i) land conveyed to the corporation pursuant to section
14(h)(1) or any other land used as a cemetery;
"(ii) the surface estate of land that is both --
"(I) exempt from real estate taxation pursuant to section
907(d)(1)(A) of the Alaska National Interest Lands Conservation
Act (16 U.S.C. 31 and following); and
"(II) used by the shareholders of the corporation for
subsistence uses (as defined in section 803 of the Alaska National
Interest Lands Conservation Act); or
"(iii) land or interest in land which the board of directors
believes to be only of speculative value;
in connection with any communication made to the shareholders
pursuant to this subsection.
"(C) If the board of directors determines, for quorum purposes or
otherwise, that a previously-noticed meeting, must be postponed or
adjourned, it may, by giving notice to the shareholders, set a new date
for such meeting not more than forty-five days later than the original
date without sending the shareholders a new written notice (or a new
summary of changes to be effected). If the new date is more than
forty-five days later than the original date, however, a new written
notice (and a new summary of changes to be effected if such a summary
was originally sent pursuant to subparagraph (A)), shall be sent or
delivered to shareholders not less than thirty days nor more than
forty-five days prior to the new date.
"(c) SHAREHOLDER PETITIONS. -- (1)(A) With respect to an amendment
authorized by section 7(g)(1)(B) or section 37(b) or an amendment
authorizing the issuance of stock subject to the restrictions provided
by section 7(g)(2)(B)(iii), the holders of shares representing at least
25 per centum of the total voting power of a Native Corporation may
petition the board of directors to submit such amendment to a vote of
the shareholders in accordance with the provisions of this section.
"(B) The requirements of the laws of the State relating to the
solicitation of proxies shall govern solicitation of signatures for a
petition described in subparagraph (A) except that the requirements of
Federal law shall govern the solicitation of signatures for a petition
that is to be submitted to a Native Corporation which at the time of
such submission has issued a class of equity securities registered
pursuant to the Securities Exchange Act of 1934. If a petition meets
the applicable solicitation requirements and --
"(i) the board agrees with such petition, the board shall
submit the amendment and either the proponents' statement or its
own statement in support of the amendment to the shareholders for
a vote, or
"(ii) the board disagrees with the petition for any reason, the
board shall submit the amendment and the proponents' statement to
the shareholders for a vote and may, at its discretion, submit an
opposing statement or an alternative amendment.
"(2) Paragraph (1) shall not apply to a Native Corporation that on or
before the date one year after the date of enactment of the Alaska
Native Claims Settlement Act Amendments of 1987 elects application of
section 37(d) in lieu of section 37(b). Until December 18, 1991,
paragraph (1) shall not apply to a Native Corporation that elects
application of section 37(c) in lieu of section 37(b). Insofar as they
are not inconsistent with this section, the laws of the State shall
govern any shareholder right of petition for Native Corporations.
"(d) VOTING STANDARDS. -- (1) An amendment or resolution described
in subsection (a) shall be considered to be approved by the shareholders
of a Native Corporation if it receives the affirmative vote of shares
representing --
"(A) a majority of the total voting power of the corporation,
or
"(B) a level of the total voting power of the corporation
greater than a majority (but not greater than two-thirds of the
total voting power of the corporation) if the corporation
establishes such a level by an amendment to its articles of
incorporation.
"(2) A Native Corporation in amending its articles of incorporation
pursuant to section 7(g)(2) to authorize the issuance of a new class or
series of stock may provide that a majority (or more than a majority) of
the shares of such class or series must vote in favor of an amendment or
resolution described in subsection (a) (other than an amendment
authorized by section 37) in order for such amendment or resolution to
be approved.
"(e) VOTING POWER. -- For the purposes of this section, the
determination of total voting power of a Native Corporation shall
include all outstanding shares of stock that carry voting rights except
shares that are not permitted to vote on the amendment or resolution in
question because of restrictions in the articles of incorporation of the
corporation.".
SEC. 8. The Alaska Native Claims Settlement Act is further amended
by adding the following new section after section 36:
"SEC. 37. "43 USC 1629c" (a) GENERAL RULE. -- Alienability
restrictions shall continue until terminated in accordance with the
procedures established by this section. No such termination shall take
effect until after December 18, 1991.
"(b) OPT-OUT PROCEDURE. (1)(A) A Native Corporation may amend its
articles of incorporation to terminate alienability restrictions in
accordance with this subsection. Only one amendment to terminate
alienability restrictions shall be considered and voted on prior to
December 18, 1991. Rejection of the amendment shall not preclude
consideration prior to December 18, 1991, of subsequent amendments to
terminate alienability restrictions.
"(B) If an amendment to terminate alienability restrictions is
considered, voted on, and rejected prior to December 18, 1991, then
subsequent amendments to terminate alienability restrictions after
December 18, 1991, shall be considered and voted on --
"(i) in the case of an amendment submitted by the board of
directors of the corporation on its own motion, not earlier than
five years after the rejection of the most recently rejected
amendment to terminate restrictions; or
"(ii) in the case of an amendment submitted by the board of
directors of the corporation pursuant to a shareholder petition,
not earlier than two years after the rejection of the most
recently rejected amendment to terminate restrictions.
"(C) If no amendment to terminate alienability restrictions is
considered and voted on prior to December 18, 1991, then amendments to
terminate alienability restrictions after December 18, 1991, shall be
considered and voted on --
"(i) in the case of an amendment submitted by the board of
directors of the corporation on its own motion, not more than once
every five years; or
"(ii) in the case of an amendment submitted by the board of
directors of the corporation pursuant to a shareholder petition,
not more than once every two years.
"(2) An amendment authorized by paragraph (1) shall specify the time
of termination, either by establishing a date certain or by describing
the specific event upon which alienability restrictions shall terminate.
"(3) Dissenters rights may be granted by the corporation in
connection with the rejection of an amendment to terminate alienability
restrictions in accordance with section 38. Once dissenters rights have
been so granted, they shall not be granted again in connection with
subsequent amendments to terminate alienability restrictions.
"(c) RECAPITALIZATION PROCEDURE. -- (1)(A) On or prior to December
18, 1991, a Native Corporation may amend its articles of incorporation
to implement a recapitalization plan in accordance with this subsection.
Rejection of an amendment or amendments to implement a recapitalization
plan shall not preclude consideration prior to December 18, 1991, of a
subsequent amendment or amendments to implement such a plan. Subsequent
amendment or amendments shall be considered and voted on not earlier
than one year after the date on which the most recent previous
recapitalization plan was rejected. No recapitalization plan shall
provide for the termination of alienability restrictions prior to
December 18, 1991.
"(B) An amendment or amendments submitted pursuant to subparagraph
(A) (and any subsequent amendment submitted pursuant to subparagraph
(C)) may provide for the maintenance or extension of alienability
restrictions for --
"(i) an indefinite period of time;
"(ii) a specified period of time not to exceed fifty years; or
"(iii) a period of time that shall end upon the occurrence of a
specified event.
"(C) If an amendment or amendments approved pursuant to subparagraph
(A) or this subparagraph maintains or extends alienability restrictions
for a specified period of time, termination of the restrictions at the
close of such period may be postponed if a further amendment to the
articles of incorporation of the corporation is approved to extend the
restrictions. There shall be no limit on the number of such amendments
that can be approved. Such amendments shall not be effective to extend
the restrictions unless approved prior to the expiration of the period
of maintenance or extension then in force.
"(D) The board of directors may ask the shareholders to approve en
bloc pursuant to a single vote a series of amendments (including an
amendment to authorize the issuance of stock pursuant to section 7(g))
to implement a recapitalization plan that includes a provision
maintaining alienability restrictions.
"(2)(A) If an amendment to the articles of incorporation of a Native
Corporation maintaining or extending alienability restrictions for a
specified period of time is approved pursuant to paragraph (1), the
restrictions shall automatically terminate at the end of such period
unless the restrictions are extended in accordance with the provisions
of paragraph (1)(C).
"(B)(i) A Native Corporation that approves an amendment to its
articles of incorporation pursuant to paragraph (1)(B) to maintain or
extend alienability restrictions for an indefinite period may later
amend its articles to terminate such restrictions. Such amendment shall
specify the time of termination, either by establishing a date certain
or by describing the specific event upon which the restrictions shall
terminate.
"(ii) Rejection of an amendment described in clause (i) by the
shareholders shall not preclude consideration of subsequent amendments
to terminate alienability restrictions.
"(3) If a recapitalization plan approved pursuant to paragraph (1)
distributes voting alienable common stock to each holder of shares of
Settlement Common Stock (issued pursuant to section 7(g)(1)(A)) that
carries aggregate dividend and liquidation rights equivalent to those
carried by such shares of Settlement Common Stock (except for rights to
distributions made pursuant to sections 7(j) and 7(m)) upon completion
of the recapitalization plan, then such holder shall have no right under
section 38 and any other provision of law to further compensation from
the corporation with respect to action taken pursuant to this
subsection.
"(d) OPT-IN PROCEDURE. -- (1)(A) Subsection (b) shall not apply to a
Native Corporation whose board of directors approves, no later than one
year after the date of the enactment of the Alaska Native Claims
Settlement Act Amendments of 1987, a resolution electing the application
of this subsection.
"(B) This subsection shall not apply to Village Corporations, Urban
Corporations, and Group Corporations located outside of the Bristol Bay
and Aleut regions.
"(2)(A) Alienability restrictions imposed on Settlement Common Stock
issued by a Native Corporation electing application of this subsection
shall terminate on December 18, 1991, unless extended in accordance with
the provisions of this subsection.
"(B) The board of directors of a Native Corporation electing
application of this subsection shall, at least once prior to January 1,
1991, approve, and submit to a vote of the shareholders, an amendment to
the articles of incorporation of the corporation to extend alienability
restrictions. If the amendment is not approved by the shareholders, the
board of directors may submit another such amendment to the shareholders
once or more a year until December 18, 1991.
"(C) An amendment submitted pursuant to subparagraph (B) and any
amendment submitted pursuant to subparagraph (D) may provide for an
extension of alienability restrictions for --
"(i) an indefinite period of time, or
"(ii) a specified period of time of not less than one year and
not more than fifty years.
"(D) If an amendment approved by the shareholders of a Native
Corporation pursuant to subparagraph (B) or this subparagraph extends
alienability restrictions for a specified period of time, termination of
the restrictions at the close of such period may be postponed if a
further amendment to the articles of incorporation of the corporation is
approved to extend the restrictions. There shall be no limit on the
number of such amendments that can be approved. Such amendments shall
not be effective to extend the restrictions unless approved prior to the
expiration of the period of extension then in force.
"(3)(A) If an amendment to the articles of incorporation of a Native
Corporation extending alienability restrictions for a specified period
of time is approved pursuant to paragraph (2), the restrictions shall
automatically terminate at the end of such period unless the
restrictions are extended in accordance with the provisions of paragraph
(2)(D).
"(B) If the board of directors of a Native Corporation electing
application of this subsection does not submit for a shareholder vote an
amendment to the articles of incorporation of the corporation in
accordance with paragraph (2)(B), or if the amendment submitted does not
comply with paragraph (2)(C), alienability restrictions shall not
terminate and shall instead remain in effect until such time as a court
of competent jurisdiction, upon petition of one or more shareholders of
the corporation, orders that a shareholder vote be taken on an amendment
which complies with paragraph (2)(C) and such vote is conducted.
Following the vote, status of alienability restrictions shall be
determined in accordance with the other provisions of this subsection
and the amendment, if approved.
"(4)(A) A Native Corporation that approves an amendment to its
articles of incorporation pursuant to paragraph (2) to extend
alienability restrictions for an indefinite period of time may later
amend its articles of incorporation to terminate the restrictions. Such
amendment shall specify the time of termination, either by establishing
a date certain or by describing the specific event upon which the
restrictions shall terminate.
"(B) The rejection of an amendment described in subparagraph (A) by
the shareholders shall not preclude consideration of subsequent
amendments to terminate alienability restrictions.
"(5)(A) If a Native Corporation amends its articles of incorporation
pursuant to paragraph (2) to extend alienability restrictions, a
shareholder who --
"(i) voted against such amendment, and
"(ii) desires to relinquish his or her Settlement Common Stock
in exchange for the stock or payment authorized by the board of
directors pursuant to subparagraph (B),
shall notify the Corporation within ninety days of the date of the
vote of the shareholders on the amendment of his or her desire.
"(B) Within one hundred and twenty days after the date of ths vote
described in subparagraph (A), the board of directors shall approve a
resolution to provide that each shareholder who has notified the
corporation pursuant to subparagraph (A) shall receive either --
"(i) alienable common stock in exchange for his or her
Settlement Common Stock pursuant to paragraph (6), or
"(ii) an opportunity to request payment for his or her
Settlement Common Stock pursuant to section 38(a)(1)(B).
"(C) This paragraph shall apply only to the first extension of
alienability restrictions approved by the shareholders. No dissenters
rights of any sort shall be permitted in connection with subsequent
extensions of such restrictions.
"(6)(A) If the board of directors of a Native Corporation approves a
resolution providing for the issuance of alienable common stock pursuant
to paragraph (5)(B), then on December 18, 1991, or sixty days after the
approval of the resolution, whichever later occurs, the Settlement
Common Stock of each shareholder who has notified the corporation
pursuant to paragraph (5)(A) shall be deemed canceled, and shares of
alienable common stock of the appropriate class shall be issued to such
shareholder, share for share, subject only to subparagraph (B) and to
such restrictions consistent with this Act as may be provided by the
articles of incorporation of the corporation or in agreements between
the corporation and individual shareholders.
"(B)(i) Alienable common stock issued in exchange for Settlement
Common Stock issued subject to the restriction authorized by section
7(g)(1)(B)(iii) shall bear a legend indicating that the stock will
eventually be canceled in accordance with the requirements of that
section.
"(ii) Alienable common stock issued in exchange for a class of
Settlement Common Stock carrying greater per share voting power than
Settlement Common Stock issued pursuant to subsections (g)(1)(A) and
(g)(1)(B) shall carry such voting power and be subject to such other
terms as may be provided in the amendment to the articles of
incorporation authorizing the issuance of such class of Settlement
Common Stock.
"(iii) In the resolution authorized by paragraph (5)(B), the board of
directors shall provide that each share of Settlement Common Stock
carrying the right to share in distributions made to shareholders
pursuant to subsections (j) and (m) of section 7 shall be exchanged
either for --
"(I) a share of alienable common stock carrying such right, or
"(II) a share of alienable common stock that does not carry
such right together with a separate, non-voting security that
represents only such right.
"(iv) In the resolution authorized by paragraph (5)(B), the board of
directors may impose upon the alienable common stock to be issued in
exchange for Settlement Common Stock one or more of the following --
"(I) a restriction granting the corporation, or the corporation
and members of the shareholder's immediate family who are Natives
or descendants of Natives the first right to purchase, on
reasonable terms, the alienable common stock of the shareholder
prior to the sale or transfer of such stock (other than a transfer
by will or intestate succession) to any other party, including a
transfer in satisfaction of a lien, writ of attachment, judgment
execution, pledge, or other encumbrance; or
"(II) any other term, restriction, limitation, or other
provision permitted under the laws of the State.
"(C) The articles of incorporation of the Native Corporation shall be
deemed amended to implement the provisions of the resolution authorized
by paragraph (5)(B).
"(D) Alienable common stock issued pursuant to this subparagraph
shall not be subjected to a lien or judgment execution based upon any
asserted or unasserted legal obligation of the original recipient
arising prior to the issuance of such stock.
"(7)(A) No share of alienable common stock issued pursuant to
paragraph (6) shall carry voting rights if it is owned, legally or
beneficially, by a person not a Native or a descendant of a Native.
"(B)(i) A purchaser or other transferee of shares of alienable common
stock shall, as a condition of the obligation of the issuing Native
Corporation to transfer such shares on the books of the corporation,
deliver to the corporation or transfer agent, as the case may be, a
statement on a form prescribed by the corporation identifying the number
of such shares to be transferred to such transferee and certifying --
"(I) that such transferee is or is not a Native or a descendant
of a Native;
"(II) that such transferee, if not a Native or a descendant of
a Native, understands that shares of such alienable common stock
shall not carry voting rights so long as such shares are held by
the transferee or any subsequent transferee not a Native or a
descendant of a Native;
"(III) that such transferee, if a purchaser, understands that
such acquisition may be subject to section 13(d) of the Securities
Exchange Act of 1934, as amended, and the regulations of the
Securities and Exchange Commission promulgated thereunder; and
"(IV) whether such transferee will be the sole beneficial owner
of such shares (if not, the transferee must certify as to the
identities of all beneficial owners of such shares and whether
such owners are Natives or descendants of Natives).
"(ii) The statement required by clause (i) shall be prima facie
evidence of the matters certified therein and may be relied upon by the
corporation in effecting a transfer on its books.
"(iii) For purposes of this subparagraph, a beneficial owner of a
security includes any person (including a corporation, partnership,
trust, association, or other entity) who, directly or indirectly,
through any contract, arrangement, understanding, relationship, or
otherwise has or shares --
"(I) voting power, which includes the power to vote, or to
direct the voting of, such security; or
"(II) investment power, which includes the power to dispose of,
or to direct the disposition of, such security.
"(iv) Any person who, directly or indirectly, creates or uses a
trust, proxy, power of attorney, pooling arrangement, or any other
contract, arrangement, or device with the purpose or effect of divesting
such person of beneficial ownership of a security or preventing the
vesting of such beneficial ownership as part of a plan or scheme to
evade the requirements imposed by this section or section 13(d) of the
Securities Exchange Act of 1934, as amended, shall be deemed for
purposes of such sections to be the beneficial owner of such security.
"(C) The statement required by subparagraph (B) shall be verified by
the transferee before a notary public or other official authorized to
administer oaths in accordance with the laws of the jurisdiction of the
transferee or in which the transfer is made.".
SEC. 9. The Alaska Native Claims Settlement Act is further amended
by adding the following new section after section 37:
"SEC. 38. "43 USC 1629d" (a) COVERAGE. -- (1) Notwithstanding the
laws of the State, if the shareholders of a Native Corporation --
"(A) fail to approve an amendment authorized by section 37(b)
to terminate alienability restrictions, a shareholder who voted
for the amendment may demand payment from the corporation for all
of his or her shares of Settlement Common Stock; or
"(B) approve an amendment authorized by section 37(d) to
continue alienability restrictions without issuing alienable
common stock pursuant to section 37(d)(6), a shareholder who voted
against the amendment may demand payment from the corporation for
all of his or her shares of Settlement Common Stock.
"(2)(A) A demand for payment made pursuant to paragraph (1)(A) shall
be honored only if at the same time as the vote giving rise to the
demand, the shareholders of the corporation approved a resolution
providing for the purchase of Settlement Common Stock from dissenting
shareholders.
"(B) A demand for payment made pursuant to paragraph (1)(B) shall be
honored.
"(b) RELATIONSHIP TO STATE PROCEDURE. -- (1) Except as otherwise
provided in this section, the laws of the State governing the right of a
dissenting shareholder to demand and receive payment for his or her
shares shall apply to demands for payment honored pursuant to subsection
(a)(2).
"(2) The board of directors of a Native Corporation may approve a
resolution to provide a dissenting shareholder periods of time longer
than those provided under the laws of the State to take actions required
to demand and receive payment for his or her shares.
"(c) VALUATION OF STOCK. -- (1) Prior to a vote described in
subsection (a)(1), the board of directors of a Native Corporation may
approve a resolution to provide that one or more of the following
conditions will apply in the event a demand for payment is honored
pursuant to subsection (a)(2) --
"(A) the Settlement Common Stock shall be valued as restricted
stock; and
"(B) the value of --
"(i) any land conveyed to the corporation pursuant to section
14(h)(1) or any other land used as a cemetery; and
"(ii) the surface estate of any land that is both --
"(I) exempt from real estate taxation pursuant to section
907(d)(1)(A) of the Alaska National Interest Lands Conservation
Act, and
"(II) used by the shareholders of the corporation for
subsistence uses (as defined in section 803 of the Alaska National
Interest Lands Conservation Act); or
"(iii) any land or interests in land which the board of
directors believes to be only of speculative value;
shall be excluded by the shareholder making the demand for
payment, the corporation purchasing the Settlement Common Stock of
the shareholder, and any court determining the fair value of the
shares of Settlement Common Stock to be purchased.
"(2) No person shall have a claim against a Native Corporation or its
board of directors based upon the failure of the board to approve a
resolution authorized by this subsection.
"(d) FORM OF PAYMENT. -- (1) Prior to a vote described in subsection
(a)(1), the board of directors of a Native Corporation may approve a
resolution to provide that in the event a demand for payment is honored
pursuant to subsection (a)(2) payments to each dissenting shareholder
shall be made by the corporation through the issuance of a negotiable
note in the principal amount of the payment due, which shall be secured
by --
"(A) a payment bond issued by an insurance company or financial
institution;
"(B) the deposit in escrow of securities or property having a
fair market value equal to at least 125 per centum of the face
value of the note; or
"(C) a lien upon real property interests of the corporation
valued at 125 percent or more of the face amount of the note,
except that no such lien shall be applicable to --
"(i) land conveyed to the corporation pursuant to section
14(h)(1), or any other land used as a cemetery;
"(ii) the percentage interest in the corporation's timber
resources and subsurface estate that exceeds its percentage
interest in revenues from such property under section 7(i); or
"(iii) the surface estate of land that is both --
"(I) exempt from real estate taxation pursuant to section
907(d)(1)(A) of the Alaska National Interest Lands Conservation
Act; and
"(II) used by the shareholders of the corporation for
subsistence uses (as defined in section 803 of the Alaska National
Interest Lands Conservation Act),
unless the Board of Directors of the corporation acts so as to
make such lien applicable to such surface estate.
"(2) A note issued pursuant to paragraph (1) shall provide that --
"(A) interest shall be paid semi-annually, beginning as of the
date on which the vote described in subsection (a)(1) occurred, at
the rate applicable on such date to obligations of the United
States having a maturity date of one year, and
"(B) the principal amount and accrued interest on such note
shall be payable to the holder at a time specified by the
corporation but in no event later than the date that is five years
after the date of the vote described in subsection (a)(1).
"(e) DIVIDEND ADJUSTMENT. -- (1) The cash payment made pursuant to
subsection (a) or the principal amount of a note issued pursuant to
subsection (d) to a dissenting shareholder shall be reduced by the
amount of dividends paid to such shareholder with respect to his or her
Settlement Common Stock after the date of the vote described in
subsection (a)(1).
"(2) Upon receipt of a cash payment pursuant to subsection (a) or a
note pursuant to subsection (d), a dissenting shareholder shall no
longer have an interest in the shares of Settlement Common Stock or in
the Native Corporation.".
SEC. 10. The Alaska Native Claims Settlement Act is further amended
by adding the following new section:
"SEC. 39. "43 USC 1629e" (a) CONVEYANCE OF CORPORATE ASSETS. --
(1)(A) A Native Corporation may convey assets (including stock or
beneficial interests therein) to a Settlement Trust in accordance with
the laws of the State (except to the extent that such laws are
inconsistent with this section and section 36).
"(B) The approval of the shareholders of the corporation in the form
of a resolution shall be required to convey all or substantially all of
the assets of the corporation to a Settlement Trust. A conveyance in
violation of this clause shall be void ab initio and shall not be given
effect by any court.
"(2) No subsurface estate in land shall be conveyed to a Settlement
Trust. A conveyance of title to, or any other interest in, subsurface
estate in violation of this subparagraph shall be void ab initio and
shall not be given effect by any court.
"(3) Conveyances made pursuant to this subsection --
"(A) shall be subject to applicable laws respecting fraudulent
conveyance and creditors rights; and
"(B) shall give rise to dissenters rights to the extent
provided under the laws of the State only if the rights of
beneficiaries in the Settlement Trust receiving a conveyance are
inalienable.
"(4) The provisions of this subsection shall not prohibit a Native
Corporation from engaging in any conveyance, reorganization, or
transaction not otherwise prohibited under the laws of the State or the
United States.
"(b) AUTHORITY AND LIMITATIONS OF A SETTLEMENT TRUST. -- (1) The
purpose of a Settlement Trust shall be to promote the health, education,
and welfare of its beneficiaries and preserve the heritage and culture
of Natives. A Settlement Trust shall not --
"(A) operate as a business;
"(B) alienate land or any interest in land received (from the
settlor Native Corporation (except if the recipient of the land is
the settlor corporation); or
"(C) discriminate in favor of a group of individuals composed
only or principally of employees, officers, or directors of the
settlor Native Corporation.
An alienation of land or an interest in land in violation of this
paragraph shall be void ab initio and shall not be given effect by any
court.
"(2) A Native Corporation that has established a Settlement Trust
shall have exclusive authority to --
"(A) appoint the trustees of the trust, and
"(B) remove the trustees of the trust for cause.
Only a natural person shall be appointed a trustee of a Settlement
Trust. An appointment or removal of a trustee in violation of this
paragraph shall be void ab initio and shall not be given effect by any
court.
"(3) A Native Corporation that has established a Settlement Trust may
expand the class of beneficiaries to include holders of Settlement
Common Stock issued after the establishment of the trust without
compensation to the original beneficiaries.
"(4) A Settlement Trust shall not be held to violate any laws against
perpetuities.
"(c) SAVINGS. -- (1) The provisions of this Act shall continue to
apply to any land or interest in land received from the Federal
Government pursuant to this Act and later conveyed to a Settlement Trust
as if the land or interest in land were still held by the Native
Corporation that conveyed the land or interest in land.
"(2) No timber resources subject to section 7(i) conveyed to a
Settlement Trust shall be sold, exchanged, or otherwise conveyed except
as necessary to --
"(A) dispose of diseased or dying timber or to prevent the
spread of disease or insect infestation;
"(B) prevent or suppress fire; or
"(C) ensure public safety.
The revenue, if any, from such timber harvests shall be subject to
section 7(i) as if such conveyance had not occurred.
"(3) The conveyance of assets (including stock or beneficial
interests) pursuant to subsection (a) shall not affect the applicability
or enforcement (including specific performance) of a valid contract,
judgment, lien, or other obligation (including an obligation arising
under section 7(i)) to which such assets, stock, or beneficial interests
were subject immediately prior to such conveyance.
"(4) A claim based upon paragraph (1), (2), or (3) shall be
enforceable against the transferee Settlement Trust holding the land,
interest in land, or other assets (including stock or beneficial
interests) in question to the same extent as such claim would have been
enforceable against the transferor Native Corporation, and valid
obligations arising under section 7(i) as well as claims with respect to
a conveyance in violation of a valid contract, judgment, lien, or other
obligation shall also be enforceable against the transferor corporation.
"(5) Except as provided in paragraphs (1), (2), (3), and (4), once a
Native Corporation has made, pursuant to subsection (a), a conveyance to
a Settlement Trust that does not --
"(A) render it --
"(i) unable to satisfy claims based upon paragraph (1), (2), or
(3); or
"(ii) insolvent; or
"(B) occur when the Native Corporation is insolvent;
the assets so conveyed to the Settlement Trust shall not be subject
to attachment, distraint, or sale on execution of judgment or other
process or order of any court, except with respect to the lawful debts
or obligations of the Settlement Trust.
"(6) No transferee Settlement Trust shall make a distribution or
conveyance of assets (including cash, stock, or beneficial interests)
that would render it unable to satisfy a claim made pursuant to
paragraph (1), (2), or (3). A distribution or conveyance made in
violation of this paragraph shall be void ab initio and shall not be
given effect by any court.
"(7) Except where otherwise expressly provided, no provision of this
section shall be construed to require shareholder approval of an action
where shareholder approval would not be required under the laws of the
State.".
SEC. 11. Section 907 of the Alaska National Interest Lands
Conservation Act (43 U.S.C. 1636) is amended --
(1) by striking out "subsection (c)(2)" throughout the section
and inserting in lieu thereof "subsection (d)(1)";
(2) in the proviso of subsection (a), by striking out "lands
not owned by landowners described in subsection (c)(2) shall not"
and inserting in lieu thereof "no lands shall";
(3) by amending subsections (c), (d), and (e) to read as
follows:
"(c) BENEFITS TO PRIVATE LANDOWNERS. -- (1) In addition to any
requirement of applicable law, the appropriate Secretary is authorized
to provide technical and other assistance with respect to fire control,
trespass control, resource and land use planning, and the protection,
maintenance, and enhancement of any special values of the land subject
to the agreement, all with or without reimbursement as agreed upon by
the parties, so long as the landowner is in compliance with the
agreement.
"(2) The provision of section 21(e) of the Alaska Native Claims
Settlement Act shall apply to all lands which are subject to an
agreement made pursuant to this section so long as the parties to the
agreement are in compliance therewith.
"(d) AUTOMATIC PROTECTIONS FOR LANDS CONVEYED PURSUANT TO THE ALASKA
NATIVE CLAIMS SETTLEMENT ACT. -- (1)(A) Notwithstanding any other
provision of law or doctrine of equity, all land and interests in land
in Alaska conveyed by the Federal Government pursuant to the Alaska
Native Claims Settlement Act to a Native individual or Native
Corporation or subsequently reconveyed by a Native Corporation pursuant
to section 39 of that Act to a Settlement Trust shall be exempt, so long
as such land and interests are not developed or leased or sold to third
parties from --
"(i) adverse possession and similar claims based upon estoppel;
"(ii) real property taxes by any governmental entity;
"(iii) judgments resulting from a claim based upon or arising
under --
"(I) title 11 of the United States Code or any successor
statute,
"(II) other insolvency or moratorium laws, or
"(III) other laws generally affecting creditors' rights;
"(iv) judgments in any action at law or in equity to recover
sums owed or penalties incurred by a Native Corporation or
Settlement Trust or any employee, officer, director, or
shareholder of such corporation or trust, unless this exemption is
contractually waived prior to the commencement of such action;
and
"(v) involuntary distributions or conveyances related to the
involuntary dissolution of a Native Corporation or Settlement
Trust.
"(B) Except as otherwise provided specifically provided, the
exemptions described in subparagraph (A) shall apply to any claim or
judgment existing on or arising after the date of the enactment of the
Alaska Native Claims Settlement Act Amendments of 1987.
"(2) DEFINITIONS. -- (A) For purposes of this subsection, the term
--
"(i) 'Developed' means a purposeful modification of land, or an
interest in land, from its original state that effectuates a
condition of gainful and productive present use without further
substantial modification. Surveying, construction of roads,
providing utilities, or other similar actions, which are normally
considered to be component parts of the development process but do
not create the condition described in the preceding sentence,
shall not constitute a developed state within the meaning of this
clause. In order to terminate the exemptions listed in paragraph
(1), land, or an interest in land, must be developed for purposes
other than exploration, and the exemptions will be terminated only
with respect to the smallest practicable tract actually used in
the developed state;
"(ii) 'Exploration' means the examination and investigation of
undeveloped land to determine the existence of subsurface
nonrenewable resources; and
"(iii) 'Leased, means subjected to a grant of primary
possession entered into for a gainful purpose with a determinable
fee remaining in the hands of the grantor. With respect to a
lease that conveys rights of exploration and development, the
exemptions listed in paragraph (1) shall continue with respect to
that portion of the leased tract that is used solely for the
purposes of exploration.
"(B) For purposes of this subsection --
"(i) land shall not be considered developed solely as a result
of --
"(I) the construction, installation, or placement upon such
land of any structure, fixture, device, or other improvement
intended to enable, assist, or otherwise further subsistence uses
or other customary or traditional uses of such land, or
"(II) the receipt of fees related to hunting, fishing, and
guiding activities conducted on such land;
"(ii) land upon which timber resources are being harvested
shall be considered developed only during the period of such
harvest and only to the extent that such land is integrally
related to the timber harvesting operation; and
"(iii) land subdivided by a State or local platting authority
on the basis of a subdivision plat submitted by the holder of the
land or its agent, shall be considered developed on the date an
approved subdivision plat is recorded by such holder or agent
unless the subdivided property is a remainder parcel.
"(3) ACTION BY A TRUSTEE. -- (A) Except as provided in this
paragraph and in section 14(c)(3) of the Alaska Native Claims Settlement
Act no trustee, receiver, or custodian vested pursuant to applicable
Federal or State law with a right, title, or interest of a Native
individual or Native Corporation shall --
"(i) assign or lease to a third party,
"(ii) commence development or use of, or
"(iii) convey to a third party,
any right, title, or interest in any land, or interests in land,
subject to the exemptions described in paragraph (1).
"(B) The prohibitions of subparagraph (A) shall not apply --
"(i) when the actions of such trustee, receiver, or custodian
are for purposes of exploration or pursuant to a judgment in law
or in equity (or arbitration award) arising out of any claim made
pursuant to section 7(i) or section 14(c) of the Alaska Native
Claims Settlement Act; or
"(ii) to any land, or interest in land, which has been --
"(I) developed or leased prior to the vesting of the trustee,
receiver, or custodian with the right, title, or interest of the
Native Corporation; or
"(II) expressly pledged as security for any loan or expressly
committed to any commercial transaction in a valid agreement.
"(4) EXCLUSIONS, REATTACHMENT OF EXEMPTIONS. -- (A) The exemptions
listed in paragraph (1) shall not apply to any land, or interest in
land, which is --
"(i) developed or leased or sold to a third party;
"(ii) held by a Native Corporation in which neither --
"(I) the Settlement Common Stock of the corporation,
"(II) the Settlement Common Stock of the corporation and other
stock of the corporation held by holders of Settlement Common
Stock, nor
"(III) the Settlement Common Stock of the corporation and other
stock of the corporation held by holders of Settlement Common
Stock and by Natives and descendants of Natives,
represents a majority of either the total equity of the corporation
or the total voting power of the corporation for the purposes of
electing directors; or
"(iii) held by a Settlement Trust with respect to which any of
the conditions set forth in section 39 of the Alaska Native Claims
Settlement Act have been violated.
"(B) The exemptions described in clauses (iii), (iv), and (v) of
paragraph (1)(A) shall not apply to any land, or interest in land --
"(i) to the extent that such land or interest is expressly
pledged as security for any loan or expressly committed to any
commercial transaction in a valid agreement; and
"(ii) to the extent necessary to enforce a judgment in any
action at law or in equity (or any arbitration award) arising out
of any claim made pursuant to section 7(i) or section 14(c) of the
Alaska Native Claims Settlement Act.
"(C) If the exemptions listed in paragraph (1) are terminated with
respect to land, or an interest in land, as a result of development (or
a lease to a third party), and such land, or interest in land,
subsequently reverts to an undeveloped state (or the third-party lease
is terminated), then the exemptions shall again apply to such land, or
interest in land, in accordance with the provisions of this subsection.
"(5) TAX RECAPTURE UPON SUBDIVISION PLAT RECORDATION. -- (A) Upon
the recordation with an appropriate government authority of an approved
subdivision plat submitted by, or on behalf of, a Native individual,
Native Corporation, or Settlement Trust with respect to land described
in paragraph (1), such individual, corporation, or trust shall pay in
accordance with this paragraph all State and local property taxes on the
smallest practicable tract integrally related to the subdivision project
that would have been incurred by the individual, corporation, or trust
on such land (excluding the value of subsurface resources and timber) in
the absence of the exemption described in paragraph (1)(A)(ii) during
the thirty months prior to the date of the recordation of the plat.
"(B) State and local property taxes specified in subparagraph (A) of
this paragraph (together with interest at the rate of 5 per centum per
annum commencing on the date of recordation of the subdivision plat)
shall be paid in equal semi-annual installments over a two-year period
commencing on the date six months after the date of recordation of the
subdivision plat.
"(C) At least thirty days prior to final approval of a plat of the
type described in subparagraph (A), the government entity with
jurisdiction over the plat shall notify the submitting individual,
corporation, or trust of the estimated tax liability that would be
incurred as a result of the recordation of the plat at the time of final
approval.
"(6) SAVINGS. -- (A) No provision of this subsection shall be
construed to impair, or otherwise affect, any valid contract or other
obligation that was entered into prior to the date of the enactment of
the Alaska Native Claims Settlement Act Amendments of 1987.
"(B) Enactment of this subsection shall not affect any real property
tax claim in litigation on the date of enactment of the Alaska Native
Claims Settlement Act Amendments of 1987.
"(e) CONDEMNATION. -- All land subject to an agreement made pursuant
to subsection (a) and all land, and interests in land, conveyed or
subsequently reconveyed pursuant to the Alaska Native Claims Settlement
Act to a Native individual, Native Corporation, or Settlement Trust
shall be subject to condemnation for public purposes in accordance with
the provisions of this Act and other applicable law."; and
(4) by adding at the end thereof the following new subsection:
"(g) STATE JURISDICTION. -- Except as expressly provided in
subsection (d), no provision of this section shall be construed as
affecting the civil or criminal jurisdiction of the State of Alaska.".
SEC. 12. (a) SECTION 7. -- Subsection (o) of section 7 (43 U.S.C.
1606) is amended to strike everything following the word "stockholder"
except the period at the end of the subsection.
"(b) SECTION 21. -- Section 21 (43 U.S.C. 1620) is amended --
(1) by inserting after "distributions" in subsection (a) "(even
if the Regional Corporation or Village Corporation distributing
the dividend has not segregated revenue received from the Alaska
Native Fund from revenue received from other sources)";
(2) by striking out "Village Corporation" and inserting in lieu
thereof "Native Corporation" in subsection (j); and
(3) by striking out everything after "one and one-half acres;"
in subsection (j) and inserting in lieu thereof: "Provided
further, That if the shareholder receiving the homesite subdivides
such homesite, he or she shall pay all Federal, State, and local
taxes that would have been incurred but for this subsection
together with simple interest at 6 per centum per annum calculated
from the date of receipt of the homesite, including taxes or
assessments for the provision of road access and water and sewage
facilities by the conveying corporation or the shareholder.".
(c) SECTION 30. -- Subsection (b) of section 30 (43 U.S.C. 1627(b))
is amended by striking out "prior to December 19, 1991" and inserting in
lieu thereof "while the Settlement Common Stock of all corporations
subject to merger or consolidation remains subject to alienability
restrictions.".
(d) SECURITIES EXCHANGE ACT OF 1934. -- Section 13(d)(1) of the
Securities Exchange Act of 1934 "15 USC 78m" is amended by inserting "or
any equity security issued by a Native Corporation pursuant to section
37(d)(6) of the Alaska Native Claims Settlement Act" after "Investment
Company Act of 1940".
SEC. 13. "43 USC 1601 note" Section 27 (85 Stat. 688) is amended to
read as follows:
"SEC. 27. The provisions of this Act, as amended, and the Alaska
Native Claims Settlement Act Amendments of 1987 are severable. If any
provision of either Act is determined by a court of competent
jurisdiction to be invalid, such invalidity shall not affect the
validity of any other provision of either Act.".
SEC. 14. Section 28 (43 U.S.C. 1625) is amended to read as follows:
"SEC. 28. (a) A Native Corporation shall be exempt from the
provisions, as amended, of the Investment Company Act of 1940 (54 Stat.
789), the Securities Act of 1933 (48 Stat. 74), and the Securities
Exchange Act of 1934 (48 Stat. 881) until the earlier of the day after
--
"(1) the date on which the corporation issues shares of stock
other than Settlement Common Stock in a transaction where --
"(A) the transaction or the shares are not otherwise exempt
from Federal securities laws; and
"(B) the shares are issued to persons or entities other than --
"(i) individuals who held shares in the corporation on the date
of the enactment of the Alaska Native Claims Settlement Act
Amendments of 1987;
"(ii) Natives;
"(iii) descendants of Natives;
"(iv) individuals who have received shares of Settlement Common
Stock by inheritance pursuant to section 7(h)(2);
"(v) Settlement Trusts; or
"(vi) entities established for the sole benefit of Natives or
descendants of Natives; or
"(2) the date on which alienability restrictions are
terminated; or
"(3) the date on which the corporation files a registration
statement with the Securities and Exchange Commission pursuant to
either the Securities Act of 1933 or the Securities Exchange Act
of 1934.
"(b) No provision of this section shall be construed to require or
imply that a Native Corporation shall, or shall not, be subject to
provisions of the Acts listed in subsection (a) after any of the dates
described in subsection (a).
"(c)(1) A Native Corporation that, but for this section, would be
subject to the provisions of the Securities Exchange Act of 1934 shall
annually prepare and transmit to its shareholders a report that contains
substantially all the information required to be included in an annual
report to shareholders by a corporation subject to that Act.
"(2) For purposes of determining the applicability of the
registration requirements of the Securities Exchange Act of 1934 on or
after the date described in subsection (a), holders of Settlement Common
Stock shall be excluded from the calculation of the number of
shareholders of record pursuant to section 12(g) of that Act.
"(d)(1) Notwithstanding any other provision of law, prior to January
1, 2001, the provisions of the Investment Company Act of 1940 shall not
apply to any Native Corporation or any subsidiary of such corporation if
such subsidiary is wholly owned (as that term is defined in the
Investment Company Act of 1940) by the corporation and the corporation
owns at least 95 per centum of the equity of the subsidiary.
"(2) The Investment Company Act of 1940 shall not apply to any
Settlement Trust.
"(3) If, but for this section, a Native Corporation would qualify as
an Investment Company under the Investment Company Act of 1940, it shall
be entitled to voluntarily register pursuant to such Act and any such
corporation which so registered shall thereafter comply with the
provisions of such Act.".
STATUS
SEC. 15. Section 29 (43 U.S.C. 1626) is amended by adding the
following new subsections:
"(c) In determining the eligibility of a household, an individual
Native, or a descendant of a Native (as defined in section 3(r)) to --
"(1) participate in the Food Stamp Program,
"(2) receive aid, assistance, or benefits, based on need, under
the Social Security Act, or
"(3) receive financial assistance or benefits, based on need,
under any other Federal program or federally-assisted program,
none of the following, received from a Native Corporation, shall be
considered or taken into account as an asset or resource;
"(A) cash (including cash dividends on stock received from a
Native Corporation) to the extent that it does not, in the
aggregate, exceed $2,000 per individual per annum;
"(B) stock (including stock issued or distributed by a Native
Corporation as a dividend or distribution on stock);
"(C) a partnership interest;
"(D) land or an interest in land (including land or an interest
in land received from a Native Corporation as a dividend or
distribution on stock); and
"(E) an interest in a settlement trust.
"(d) Notwithstanding any other provision of law, Alaska Natives shall
remain eligible for all Federal Indian programs on the same basis as
other Native Americans.
"(e)(1) For all purposes of Federal law, a Native Corporation shall
be considered to be a corporation owned and controlled by Natives and a
minority business enterprise if the Settlement Common Stock of the
corporation and other stock of the corporation held by holders of
Settlement Common Stock and by Natives and descendants of Natives,
represents a majority of both the total equity of the corporation and
the total voting power of the corporation for the purposes of electing
directors.
"(2) For all purposes of Federal law, direct and indirect subsidiary
corporations, joint ventures, and partnerships of a Native Corporation
qualifying pursuant to paragraph (1) shall be considered to be entities
owned and controlled by Natives and a minority business enterprise if
the shares of stock or other units of ownership interest in any such
entity held by such Native Corporation and by the holders of its
Settlement Common Stock represent a majority of both --
"(A) the total equity of the subsidiary corporation, joint
venture, or partnership; and
"(B) the total voting power of the subsidiary corporation,
joint venture, or partnership for the purpose of electing
directors, the general partner, or principal officers.
"(3) No provision of this subsection shall --
"(A) preclude a Federal agency or instrumentality from applying
standards for determining minority ownership (or control) less
restrictive than those described in paragraphs (1) and (2), or
"(B) supersede any such less restrictive standards in existence
on the date of enactment of the Alaska Native Claims Settlement
Act Amendments of 1987.
"(f)(1) Section 3 "30 USC 1702" of Public Law 97-451 (96 Stat. 2448)
is amended by inserting 'or which is administered by the United States
pursuant to section 14(g) of Public Law 92-203, as amended' after
'alienation' in subsection (3) and subsection (4).
"(2) The amendment made by paragraph (1) shall be effective as if
originally included in section 3 "30 USC 1702 note" of Public Law
97-451.
"(g) For the purposes of implementation of the Civil Rights Act of
1964, a Native Corporation and corporations, partnerships, joint
ventures, trusts, or affiliates in which the Native Corporation owns not
less than 25 per centum of the equity shall be within the class defined
in section 701(b) of Public Law 88-352 (78 Stat. 253), as amended, or
successor statutes.".
SEC. 16. "43 USC 1601 note" (a) STATUTE OF LIMITATIONS. -- (1)
Notwithstanding any other provision of law, a civil action that
challenges the constitutionality of an amendment made by, or other
provision of this Act (the Alaska Native Claims Settlement Act
Amendments of 1987) shall be barred unless filed within the periods
specified in this subsection.
(2) If a civil action described in paragraph (1) challenges --
(A) the issuance or distribution of Settlement Common Stock for
less than fair market value consideration pursuant to section
7(g)(1)(B) or 7(g)(2)(C)(ii) of the Alaska Native Claims
Settlement Act; or
(B) an extension of alienability restrictions that involves the
issuance of stock pursuant to subsections (c) or (d) of section 37
of such Act; or
(C) the denial of dissenters rights after the rejection of an
amendment to terminate alienability restrictions pursuant to
section 37(b) of such Act;
such civil action shall be barred unless it is filed within one year
after the date of the shareholder vote authorizing such issuance or
distribution, extension of restrictions, or denial of right, and unless
a request for a declaratory judgment or injunctive relief is made before
stock is issued or distributed.
(3) Any other civil action described in paragraph (1) shall be barred
unless it is filed within two years of the date of the enactment of this
Act.
(4) No Native Corporation taking an action described in paragraph
(2)(A), (2)(B), or (2)(C) shall issue or distribute stock sooner than
fourteen days after the date of the shareholder vote authorizing such
action.
(b) JURISDICTION AND PROCEDURE. -- (1) The United States District
Court for the District of Alaska shall have exclusive original
jurisdiction over a civil action described in subsection (a)(1). The
action shall be heard and determined by a court of three judges as
provided in section 2284 of title 28 of the United States Code. An
appeal of the final judgment of such court shall be made directly to the
United States Supreme Court.
(2) No money judgment shall be entered against the United States in a
civil action subject to this section.
(c) STATEMENT OF PURPOSE. -- The purpose of the limitation on civil
actions established by this section is --
(1) to ensure that after the expiration of a reasonable period
of time, Native Shareholders, Native Corporations, the United
States, and the State of Alaska and its political subdivisions
will be able to plan their affairs with certainty in full reliance
on the provisions of this Act, and
(2) to eliminate the possibility that the United States will
incur a monetary liability as a result of the enactment of this
Act.
SEC. 17. "30 USC 1601 note" (a) No provision of this Act (the Alaska
Native Claims Settlement Act Amendments of 1987), exercise of authority
pursuant to this Act, or change made by, or pursuant to, this Act in the
status of land shall be construed to validate or invalidate or in any
way affect --
(1) any assertion that a Native organization (including a
federally recognized tribe, traditional Native council, or Native
council organized pursuant to the Act of June 18, 1934 (48 Stat.
987), as amended) has or does not have governmental authority over
lands (including management of, or regulation of the taking of,
fish and wildlife) or persons within the boundaries of the State
of Alaska, or
(2) any assertion that Indian country (as defined by 18 U.S.C.
1151 or any other authority) exists or does not exist within the
boundaries of the State of Alaska.
(b) Nothing in the Alaska Native Claims Settlement Act Amendments of
1987 (or any amendment made thereby) shall be construed --
(1) to diminish or enlarge the ability of the Federal
government to assess, collect, or otherwise enforce any Federal
tax, or
(2) to affect, for Federal tax purposes, the valuation of any
stock issued by a Native Corporation.
Approved February 3, 1988.
LEGISLATIVE HISTORY -- H.R. 278:
HOUSE REPORTS: No. 100-31 (Comm. on Interior and Insular Affairs).
SENATE REPORTS: No. 100-201 (Comm. on Energy and Natural Resources).
CONGRESSIONAL RECORD, Vol. 133 (1987): Mar. 31, considered and
passed House. Oct. 29, considered and passed Senate, amended. Dec. 21,
House concurred in Senate amendment with amendment. Senate concurred in
House amendment.
PUBLIC LAW 100-240, 101 Stat. 1785
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled.
SECTION 1. PURPOSES OF THE FOUNDATION.
(a) IN GENERAL. -- Section (2)(b) of the National Fish and Wildlife
Foundation Establishment Act (16 U. S.C. 3701(b)) is amended --
(1) by striking out "and" at the end of paragraph (1);
(2) by striking out the period at the end of paragraph (2) and
inserting "; and"; and
(3) by adding at the end thereof the following:
"(3) to participate with, and otherwise assist, foreign
governments, entities, and individuals in undertaking and
conducting activities that will further the conservation and
management of the fish, wildlife, and plant resources of other
countries.".
(b) CONFORMING AMENDMENT. -- Section 4(a)(2) of the National Fish
and and Wildlife Foundation Establishment Act (16 U.S.C. 3703(a)(2)) is
amended by inserting "and abroad" after "United States".
AND DISPOSAL OF REAL
PROPERTY.
(a) IN GENERAL. -- Section 4 of the National Fish and Wildlife
Foundation Establishment Act (16 U.S.C. 3703) is amended by adding at
the end thereof the following:
"(e) ACQUISITION, MANAGEMENT AND DISPOSAL OF REAL PROPERTY. -- (1)
The Foundation may only use Federal funds for the acquisition of
interests in real if property --
"(A) the interest is a long-term
interest, and
"(B) the Director of the United States Fish and Wildlife
Service (hereinafter in this subsection referred to as the
"Director") consents to the acquisition acquisition in writing.
"(2) The Foundation shall convey to the United States Fish and
Wildlife Service for inclusion within the National Wildlife Refuge
System any real property acquired by the Foundation in whole or in part
with with Federal funds if the Director, within one year after the date
on which the property was acquired by the the Foundation, requests the
conveyance in writing.
"(3)(A) Subject to subparagraph (B), the Foundation may --
"(i) convey to another person any real property acquired in
whole or in part with Federal funds and not conveyed under
paragraph (2); and
"(ii) grant or otherwise provide Federal funds to another
person for purposes of assisting that person to acquire real
property in whole or in part with such funds.
"(B) The Foundation may only make a conveyance or provide Federal
funds under subparagraph (A) if --
"(i) the conveyance or provision is subject to terms and
conditions that will ensure the real property will be administered
for the long-term conservation and management of fish and wildlife
and in a manner that will provide for appropriate public access
and use; and
"(ii) the Director finds that conveyance or provision of
Federal funds meets the requirements of clause (i) and consents to
it in writing.
"(4) All real property acquired by the Foundation in whole or in part
with Federal funds and held by it shall be administered for the
conservation and management of fish and wildlife and in a manner that
will provide for appropriate public access and use.
"(5) The Foundation shall convey at not less than fair-market value
any real property acquired by it in whole or in part with Federal funds
if the Foundation and the Director Director determine, in writing, that
--
"(A) the land is no longer valuable for the purposes of fish
and wildlife conservation or management, and
and
"(B) the purposes of the Foundation would be better served by
the use of the Federal funds for other authorized activities of
the Foundation.".
(b) CONFORMING AMENDMENTS. -- (1) Section 4(c)(2) of the National
Fish and Wildlife Foundation Establishment Act (16 U.S.C. 3703(c)(2)) is
amended by striking "therein;" and inserting in lieu thereof the
following: "therein, subject to subsection (e);".
(2) Section 7(b) of such Act (16 U.S.C. 3706(b)) is amended by
inserting before the period following: "; and a description of all
acquisition and disposal of real property that is subject to section
4(e).".
ADMINISTRATIVE SERVICES.
Section 5 of the National Fish and Wildlife Foundation Establishment
Act (16 U..S.C. 3704) is amended --
(1) by inserting "(a) PROVISION OF SERVICES. -- " before "The
Secretary";
(2) by striking out "Act," and all that follows thereafter and
inserting "Act."; and
(3) by adding at the end thereof the following:
"(b) REIMBURSEMENT. -- The Foundation may reimburse the Secretary
for any administrative service provided under subsection (a). The
Secretary shall deposit any reimbursement received under this subsection
into the Treasury to the credit of the appropriations then current and
chargeable for the cost of providing such services.".
SEC. 4. AUTHORIZATION OF APPROPRIATIONS.
Section 10 of the National Fish and Wildlife Foundation Establishment
Act (16 U.S.C. 3709) is amended to read as follows:
"SEC. 10. AUTHORIZATION OF
APPROPRIATIONS.
"There are authorized to be appropriated to the Department of the
Interior for each of fiscal years 1988 through 1993, inclusive, not to
exceed $5,000,000 to be made available to the Foundation -- --
"(1) to match partially or wholly the amount or value of
contributions (whether in currency, services, or property) made to
the Foundation by private persons and State and local government
agencies; and
"(2) to provide administrative services under section 5.".
Approved January 11, 1988.
LEGISLATIVE HISTORY -- S. 1389:
SENATE REPORTS: No. 100-225 (Comm. on and Environment Public Works).
CONGRESSIONAL RECORD, Vol. 133 (1987):
Dec. 18, considered and passed Senate.
Dec. 21, considered and passed House.
PUBLIC LAW 100-239, 101 STAT. 1778
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
This Act may be cited as the "Commercial Fishing Industry Vessel
Anti-Reflagging Act of 1987".
Section 3(27) of the Magnuson Fishery Conservation and Management Act
(16 U.S.C. 1802(27)) is amended to read as follows:
"(27) The term 'vessel of the United States' means --
"(A) any vessel documented under chapter 121 of title 46,
United States Code;
"(B) any vessel numbered in accordance with chapter 123 of
title 46, United States Code, and measuring less than 5 net tons;
"(C) any vessel numbered in accordance with chapter 123 of
title 46, United States Code, and used exclusively for pleasure;
or
"(D) any vessel not equipped with propulsion machinery of any
kind and used exclusively for pleasure.".
Title 46, United States Code, is amended as follows:
(1) Item 12101 of the analysis of chapter 121 is amended to
read as follows:
(2) The caption of section 12101 is amended to read as follows:
laws.".
(3) Section 12101 is amended by --
(A) designating the existing text as subsection (b);
(B) striking paragraph (6); and
(C) inserting a new subsection (a) before subsection (b) (as
designated by this section) as follows:
"(a) In this chapter --
"(1) 'fisheries' includes processing, storing, transporting
(except in foreign commerce), planting, cultivating, catching,
taking, or harvesting fish, shellfish, marine animals, pearls,
shells, or marine vegetation in the navigable waters of the United
States or in the exclusive economic zone.
"(2) 'rebuilt' has the same meaning as in the second proviso of
section 27 of the Merchant Marine Act, 1920 (46 App. U.S.C.
883).".
(4) Section 12108(a) is amended by --
(A) at the end of paragraph (2)(B), strike "and";
(B) redesignating paragraph (3) as (4); and
(C) inserting after paragraph (2) a new paragraph (3) that
reads as follows:
"(3) if rebuilt, was rebuilt in the United States; and".
(5) Section 12108(c)(2) is amended by striking "built in the United
States" and substituting "built or rebuilt in the United States".
(a) Notwithstanding the requirements of section 12108(a)(2) and (3)
of title 46, United States Code, a fishery license may be issued to a
vessel that before July 28, 1987 --
(1)(A) was documented under chapter 121 of that title; and
(B) was operated as a fish processing or fish tender vessel in
the navigable waters of the United States or the exclusive
economic zone;
(2) was a fish tender or fish processing vessel contracted to
be purchased by a citizen of the United States, if the purchase is
shown by contract or similarly reliable evidence acceptable to the
Secretary to have been made for the purpose of using the vessel as
a fish tender or fish processing vessel in the fisheries;
(3) was documented under chapter 121 of that title and --
(A) was rebuilt in a foreign country; or
(B) is subsequently rebuilt in the United States for use as a
fish processing vessel; or
(4) was built in the United States and --
(A) is rebuilt in a foreign country under a contract entered
into before 6 months after the date of enactment of this Act, and
was purchased or contracted to be purchased before July 28, 1987
with the intent that the vessel be used in the fisheries, if that
intent is evidenced by --
(i) the contract itself; or
(ii) a ruling letter by the Coast Guard before July 29, 1987
under 46 C.F.R. Section 67.21-1 or Section 67.27-3 pursuant to a
ruling request evidencing that intent; or
(B) is purchased for use as a fish processing vessel under a
contract entered into after July 27, 1987, if --
(i) a contract to rebuild the vessel for use as a fish
processing vessel was entered into before September 1, 1987; and
(ii) that vessel is part of a specific business plan involving
the conversion in foreign shipyards of a series of three vessels
and rebuilding work on at least one of the vessels had begun
before July 28, 1987.
(b) A vessel rebuilt under subsection (a)(3)(B) or (4) of this
section must be redelivered to the owner before July 28, 1990. However,
the Secretary may, on proof of circumstances beyond the control of the
owner of a vessel affected by this section, extend the period for
rebuilding in a foreign country permitted by this section.
(c)(1) Any fishery license or registry issued to a vessel built in a
foreign country under this section shall be endorsed to restrict the
vessel from catching, taking, or harvesting.
(2) Before being issued a fishery license, any vessel described in
subsection (a)(2) of this section must be documented under an
application for documentation acceptable to the Secretary filed before
July 28, 1987.
(a)(1) Section 8103(a) of title 46, United States Code, is amended by
inserting "radio officer," after "chief engineer,".
(2) Section 8103(b) of title 46, United States Code, is amended to
read as follows:
"(b)(1) Except as otherwise provided in this section, on a documented
vessel --
"(A) each unlicensed seaman must be a citizen of the United
States or an alien lawfully admitted to the United States for
permanent residence; and
"(B) not more than 25 percent of the total number of unlicensed
seamen on the vessel may be aliens lawfully admitted to the United
States for permanent residence.
"(2) Paragraph (1) of this subsection does not apply to --
"(A) a yacht;
"(B) a fishing vessel fishing exclusively for highly migratory
species (as that term is defined in section 3 of the Magnuson
Fishery Conservation and Management Act (16 U.S.C. 1802)); and
"(C) a fishing vessel fishing outside of the exclusive economic
zone.
"(3) The Secretary may waive a citizenship requirement under this
subsection, other than a requirement that applies to the master of a
documented vessel, with respect to --
"(A) an offshore supply vessel or other similarly engaged
vessel of less than 1,600 gross tons that operates from a foreign
port:
"(B) a mobile offshore drilling unit or other vessel engaged in
support of exploration, exploitation, or production of offshore
mineral energy resources operating beyond the water above the
outer Continental Shelf (as that term is defined in section 2(a)
of the Outer Continental Shelf Lands Act (43 U.S.C. 1331(a)); and
"(C) any other vessel if the Secretary determines, after an
investigation, that qualified seamen who are citizens of the
United States are not available.".
(3) Paragraph (2) of this subsection is effective 30 days after the
date of enactment of this Act. "46 USC 8103 note"
(b) Subsection (c) and (d)(1) of section 8103 of title 46, United
States Code, are each amended by striking "from the United States".
(c) Section 8103(e) of title 46, United States Code, is amended --
(1) by inserting "and the radio officer" after "the master";
and
(2) by striking "until the vessel's first return to a United
States port at which" and substituting "until the vessel's return
to a port at which in the most expeditious manner".
(d)(1) Section 8103 of title 46, United States Code, is amended by
adding at the end the following:
"(i)(1) Except as provided in paragraph (3) of this subsection, each
unlicensed seaman on a fishing, fish processing, or fish tender vessel
that is engaged in the fisheries in the navigable waters of the United
States or the exclusive economic zone must be --
"(A) a citizen of the United States;
"(B) an alien lawfully admitted to the United States for
permanent residence; or
"(C) any other alien allowed to be employed under the
Immigration and Naturalization Act (8 U.S.C. 1101 et seq.).
"(2) Not more than 25 percent of the unlicensed seaman on a vessel
subject to paragraph (1) of this subsection may be aliens referred to in
clause (C) of that paragraph.
"(3) This subsection does not apply to a fishing vessel fishing
exclusively for highly migratory species (as that term is defined in
section 3 of the Magnuson Fishery Conservation and Management Act (16
U.S.C. 1802)).".
(2) This subsection is effective 360 days after the day of the
enactment of this Act. "46 USC 8103 note"
(e) Section 8702(b) of title 46, United States Code, is amended by
striking "depart from a port of the United States" and substituting
"operate".
(f)(1) Chapter 87 of title 46, United States Code, is amended by
adding at the end the following new section:
States
"An alien is deemed to be employed in the United States for purposes
of section 274A of the Immigration and Nationality Act (8 U.S.C. 1324a)
if the alien is an unlicensed individual employed on a fishing, fish
processing, or fish tender vessel that --
"(1) is a vessel of the United States engaged in the fisheries
in the navigable waters of the United States or the exclusive
economic zone; and
"(2) is not engaged in fishing exclusively for highly migratory
species (as that term is defined in section 3 of the Magnuson
Fishery Conservation and Management Act (16 U.S.C. 1802).".
(2) The table of sections at the beginning of that chapter is amended
by adding at the end the following new item:
"8704. Alien deemed to be employed in the United States.".
(3) With respect to an alien who is deemed to be employed in the
United States under section 8704 "46 USC 8704 note" of title 46, United
States Code (as amended by this subsection), the term "date of the
enactment of this section" as used in section 274A(i) of the Immigration
and Nationality Act means the date 180 days after the enactment of this
section.
(a) Title 46, United States Code, is amended as follows:
(1) Section 2101 is amended by adding after paragraph 10 the
following new paragraph:
"(10a) 'Exclusive Economic Zone' means the zone established by
Presidential Proclamation Numbered 5030, dated March 10, 1983.".
(2) Section 12106(b) is amended to read as follows:
"(b) Subject to the laws of the United States regulating the
coastwise trade, only a vessel for which a coastwise license or an
appropriately endorsed registry is issued may be employed in the
coastwise trade.".
(3) Section 12106 is amended by inserting a new subsection (d)
after subsection (c) as follows:
"(d) On application of the owner of a vessel that qualifies for a
Great Lakes license under section 12107 or a fishery license under
section 12108 of this title, the Secretary may issue an endorsement
authorizing the vessel to be employed in the Great Lakes trade or
fisheries, as the case may be.".
(4) Section 12107(b) is amended --
(A) after the semicolon at the end of paragraph (1) by
inserting "and";
(B) in paragraph (2) by striking "Canada; and" and
substituting "Canada."; and
(C) by striking paragraph (3).
(5) Section 12107 is amended by inserting a new subsection (c)
after subsection (b) as follows:
"(c) On application of the owner of a vessel that qualifies for a
coastwise license under section 12106 or a fishery license under section
12108 of this title, the Secretary may issue an endorsement authorizing
the vessel to be employed in the coastwise trade or the fisheries, as
the case may be.".
(6) Section 12108 is amended by adding a new subsection (d)
after subsection (c) as follows:
"(d) On application of the owner of a vessel that qualifies for a
coastwise license under section 12106 or a Great Lakes license under
section 12107 of this title, the Secretary may issue an endorsement
authorizing the vessel to be employed in the coastwise trade or the
Great Lakes trade, as the case may be.". "46 USC 12105 note"
(b) Notwithstanding the requirements of chapter 121 of title 46,
United States Code, a vessel for which a coastwise, Great Lakes, or
fishery license, or an appropriately endorsed registry, was issued
before July 28, 1987, may continue to be employed in the specified
trades for which it was qualified at the time the license or registry
was issued for one year from date of enactment or until the certificate
of documentation is renewed, whichever comes later. On renewal, the
owner or master of a documented vessel shall make the vessel's
certificate of documentation available as the law or Secretary may
require for replacement with an appropriately endorsed certificate.
(c)(1) Section 27 of the Merchant Marine Act, 1920 (46 App. U.S.C.
883), is amended after "vessel" in the second proviso by striking "of
more than five hundred gross tons".
(2) Paragraph (1) of this subsection "46 USC app. 883 note" does not
apply to a vessel under contract to be purchased or rebuilt entered into
before July 28, 1987, if that vessel is rebuilt before July 28, 1990.
(3) The Secretary, on proof of circumstances beyond the control of
the owner of a vessel affected by this section, "46 USC 12108 note" may
extend the period for rebuilding in a foreign country permitted by this
section.
(d) The terms in this Act "46 USC 12108 note" have the same meaning
as in subtitle II of title 46, United States Code (as amended by this
Act).
(a) Section 12102 of title 46, United States Code, is amended as
follows:
(1) by inserting "(a)" before "A vessel";
(2) by adding at the end the following:
"(b)(1) A vessel owned by a corporation is not eligible for a fishery
license under section 12108 of this title unless the controlling
interest (as measured by a majority of voting shares in that
corporation) is owned by individuals who are citizens of the United
States. However, if the corporation is owned in whole or in part by
other United States corporations, the controlling interest in those
corporations, in the aggregate, must be owned by individuals who are
citizens of the United States.
"(2) The Secretary shall apply the restrictions on controlling
interest in section 2(b) of the Shipping Act, 1916 (46 App. U.S.C.
802(b)) when applying this subsection.".
(b) Section 12102(b) "46 USC 12102 note" of title 46, United States
Code (as enacted by subsection (a) of this section) applies to vessels
issued a fishery license after July 28, 1987. However, that section
does not apply if before that date the vessel --
(1) was documented under chapter 121 of title 46 and operating
as a fishing, fish processing, or fish tender vessel in the
navigable waters of the United States or the Exclusive Economic
Zone; or
(2) was contracted for purchase for use as a fishing, fish
tender, or fish processing vessel in the navigable waters of the
United States or the Exclusive Economic Zone, if the purchase is
shown by the contract or similarly reliable evidence acceptable to
the Secretary to have been made for the purpose of using the
vessel in the fisheries.
(a) Section 4311(a) of the Revised Statutes of the United States (46
App. U.S.C. 251(a)) is amended by adding at the end the following: "The
Secretary of Commerce may issue any regulations that the Secretary
considers necessary to obtain information on the transportation of fish
products by vessels of the United States for foreign fish processing
vessels to points in the United States.".
(b) Within 6 months after the date of enactment of this Act, the
Secretary of Commerce shall submit a report to the Committee on
Commerce, Science, and Transportation of the Senate and the Committee on
Merchant Marine and Fisheries of the House of Representatives, setting
forth --
(1) an evaluation of the potential impact, on the development
of the United States fishing industry, of the transportation of
fish products by vessels of the United States from foreign fish
processing vessels to points in the United States; and
(2) recommendations, if any, for legislation or other action to
regulate that transportation of fish products in a manner most
beneficial to the future development of the United States fishing
industry.
(c) Within 6 months after the date of enactment of this Act, the
Secretary of Commerce shall submit to the Committee on Commerce,
Science, and Transportation of the Senate and the Committee on Merchant
Marine and Fisheries of the House of Representatives, a report
discussing the trends in the development of fishery resources under the
exclusive fishery management authority of the United States as specified
in section 101 of the Magnuson Fishery Conservation and Management Act
(16 U.S.C. 1811) and analyzing the effects of those trends on the United
States fishing industry and the conservation and management of those
resources. The Secretary shall include in the report --
(1) an evaluation of the extent to which the development of
domestic harvesting and processing capacity has been or is likely
to be affected, if at all, by this Act;
(2) an evaluation of the extent to which harvesting vessels
currently engaged in joint venture operations with foreign vessels
have been or are likely to be affected, if at all, by this Act;
and
(3) any other matters relating to fishery development,
including recommendations for legislation or other action, that
the Secretary considers appropriate.
Notwithstanding sections 12105, 12106, 12107, and 12108 of title 46,
United States Code, and section 27 of the Merchant Marine Act, 1920 (46
App. U.S.C. 883), the Secretary of the department in which the Coast
Guard is operating may issue a certificate of documentation for each of
the following vessels:
(1) the Electra (United States Official number 230024);
(2) the Barlovento (United States official number 231569);
(3) the Tie One On (United States official number 924056);
(4) the White Seal (United States official number 514961);
(5) the Laura Beth (United States number 676614);
(6) the Rondo (Hawaiian Registration number 7678(D);
(7) the Tropical Princess (Hawaiian Registration number 6557D);
and
(8) the Port Pacer II (Wisconsin Registration number 1747KC).
Approved January 11, 1988.
LEGISLATIVE HISTORY -- H.R. 2598:
CONGRESSIONAL RECORD, Vol. 133 (1987): Nov. 9, considered and passed
House. Dec. 17, considered and passed Senate, amended. Dec. 21, House
concurred in Senate amendments with amendment. Dec. 22, Senate
concurred in House amendment.
PUBLIC LAW 100-238, 101 STAT. 1744
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
Except as otherwise expressly provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to, or a
repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of title 5, United
States Code.
EMPLOYEES UNDER CSRS OFFSET PROVISIONS.
Section 8334(c) is amended by striking the period at the end of the
last sentece and inserting in lieu thereof the following: ", and, with
respect to any such service performed after December 31, 1986, be equal
to the amount that would have been deducted from the employee's basic
pay under subsection (k) of this section if the employee's pay had been
subject to that subsection during such period.".
AND FIREFIGHTERS.
(a) MAXIMUM ENTRY AGES. --
(1) IN GENERAL. -- Section 3307 is amended --
(A) in subsection (d), by striking "may, with the concurrence
of such agent as the President may designate," and inserting in
lieu thereof "may"; and
(B) by adding at the end the following:
"(e) The head of an agency may determine and fix the maximum age
limit for an original appointment to a position as a firefighter or law
enforcement officer, as defined by section 8401 (14) or (17),
respectively, of this title.".
(2) CLARIFYING AMENDMENTS. -- Paragraphs (14)(A)(ii) and (17)
of section 8401 are amended by striking "are required to be" each
place those words appear and inserting in lieu thereof "should
be".
(b) DEFINITION UNDER THE LIFE INSURANCE PROGRAM. -- Section
8704(c)(2) is amended by inserting "or 8401(17)" after "8331(20)".
(c) AMENDMENTS TO DEFINITIONS. --
(1) LAW ENFORCEMENT OFFICERS. -- Section 8401(17) is amended
--
(A) by redesignating subparagraphs (B) and (C) as subparagraphs
(C) and (D), respectively;
(B) by inserting after subparagraph (A) the following:
"(B) an employee of the Department of the Interior or the
Department of the Treasury (excluding any employee under
subparagraph (A)) who occupies a position that, but for the
enactment of the Federal Employees' Retirement System Act of 1986,
would be subject to the District of Columbia Police and
Firefighters' Retirement System, as determined by the Secretary of
the Interior or the Secretary of the Treasury, as appropriate;";
and
(C) by amending subparagraph (C), as so redesignated by
subparagraph (A), to read as follows:
"(C) an employee who is transferred directly to a supervisory
or administrative position after performing duties described in
subparagraph (A) and (B) for at least 3 years; and".
(2) FIREFIGHTERS. -- Section 8401(14)(B) is amended by
striking "for at least 10 years" and inserting in lieu thereof
"for at least 3 years".
(d) COORDINATION OF FERS WITH THE DISTRICT OF COLUMBIA POLICE AND
FIREFIGHTERS' RETIREMENT SYSTEM FOR EMPLOYEES OF THE PARK POLICE AND THE
SECRET SERVICE. --
IN GENERAL. -- Section 4-607(1) of title 4 of the District of
Columbia Code is amended by striking the period and inserting in
lieu thereof the following: ", but does not include an officer or
member of the United States Park Police force, or of the United
States Secret Service Division, whose service is employment for
the purposes of title II of the Social Security Act and chapter 21
of the Internal Revenue Code of 1986, and who is not excluded from
coverage under chapter 84 of title 5, United States Code, by
operation of section 8402 of such title.".
(2) CONFORMING AMENDMENT. -- Section 8401(11)(i)(II) is
amended by striking "(other than an employee of the United States
Park Police, or the United States Secret Service, whose civilian
service after December 31, 1983, is such employment)".
(e) OFFSETS TO PREVENT FULL DOUBLE COVERAGE FOR EMPLOYEES OF THE PARK
POLICE AND THE SECRET SERVICE "5 USC 8334 note". -- Notwithstanding any
other provision of law, in the case of an employee of the United States
Secret Service or the United States Park Police whose pay is
simultaneously subject to a deposit requirement under the District of
Columbia Police and Firefighters' Retirement and Disability System and
the contribution requirement under section 3101(a) of the Internal
Revenue Code of 1986 --
(1) any deposits under the District of Columbia Police and
Firefighters' Retirement and Disability System shall be adjusted
in a manner consistent with section 8334(k) of title 5, United
States Code (relating to offsets in deductions from pay to reflect
OASDI contributions); and
(2) any benefits payable under the District of Columbia Police
and Firefighters' Retirement and Disability System based on the
service of any such employee shall be adjusted in a manner
consistent with section 8349 of title 5, United States Code
(relating to offsets to reflect benefits under title II of the
Social Security Act).
(f) EFFECTIVE DATE. -- This section, "5 USC 3307 note" and the
amendments made by this section, shall be effective as of January 1,
1987.
(a) Section 8422(e) is amended by adding at the end the following:
"(5) For the purpose of survivor annuities, deposits authorized by
this subsection may also be made by a survivor of an employee or
Member.".
(b) Section 8411(c)(4)(A) is amended by striking "subsection (f)(4)"
and inserting in lieu thereof "section 8422 (e)(5)".
UNDER THE CIVIL SERVICE RETIREMENT SYSTEM.
(a) DEPOSIT FOR SERVICE COVERED BY REFUND PERMITTED ONLY IF REFUND
WAS PURSUANT TO APPLICATION FILED BEFORE BECOMING SUBJECT TO FERS. --
Section 8411(f)(1) is amended by adding at the end the following: "A
deposit under this paragraph may be made only with respect to a refund
received pursuant to an application filed with the Office before the
date on which the employee or Member first becomes subject to this
chapter.".
(b) LUMP-SUM CREDIT FOR CERTAIN CSRS SERVICE SOUGHT AFTER BECOMING
SUBJECT TO FERS IS PAYABLE TO THE EXTENT THAT IT EXCEEDS 1.3 PERCENT OF
BASIC PAY. -- The last sentence of section 8342(a), as added by section
207(h) of the Federal Employees' Retirement System Act of 1986 (Public
Law 99-335; 100 Stat. 596) is amended to read as follows: "In applying
this subsection to an employee or member who becomes subject to chapter
84 (other than by an election under title III of the Federal Employees'
Retirement System Act of 1986) and who, while subject to such chapter,
files an application with the Office for a payment under this subsection
--
"(i) entitlement to payment of the lump-sum credit shall be
determined without regard to paragraph (1) or (3), if, or to the
extent that, such lump-sum credit relates to service of a type
described in clauses (i) through (iii) of section 302(a)(1)(C) of
the Federal Employees' Retirement System Act of 1986; and
"(ii) if, or to the extent that, the lump-sum credit so relates
to service of a type referred to in clause (i), it shall
(notwithstanding section 8331(8)) consist of --
"(I) the amount by which any unrefunded amount described in
section 8331(8) (A) or (B) relating to such service, exceeds 1.3
percent of basic pay for such service; and
"(II) interest on the amount payable under subclause (I),
computed in a manner consistent with applicable provisions of
section 8331(8).".
TO ELECT FERS COVERAGE.
Section 301(a) of the Federal Employees' Retirement System Act of
1986 (Public Law 99-335; 100 Stat. 599) is amended by adding at the end
the following:
"(3)(A) Except as provided in subparagraph (B), any individual --
"(i) who is excluded from the operation of subchapter III of
chapter 83 of title 5, United States Code, under subsection (g),
(i), (j), or (l) of section 8347 of such title, and
"(ii) with respect to whom chapter 84 of title 5, United States
Code, does not apply because of section 8402(b)(2) of such title,
shall, for purposes of an
election under paragraph (1) or (2), be treated as if such
individual were subject to subchapter III of chapter 83 of title
5, United States Code.
"(B) An election under this paragraph may not be made by any
individual who would be excluded from the operation of chapter 84 of
title 5, United States Code, under section 8402(c) of such title
(relating to exclusions based on the temporary or intermittent nature of
one's employment).".
CREDITABLE TO DETERMINE ELIGIBILITY FOR 1.1 PERCENT
ACCRUAL RATE.
Section 302(a)(1)(D) of the Federal Employees' Retirement System Act
of 1986 (Public Law 99-335; 100 Stat. 602) is amended --
(1) by striking "and" at the end of subclause (IV);
(2) by striking the period at the end of subclause (V) and
inserting in lieu thereof "; and"; and
(3)by adding after subclause (V) the following:
"(VI) the provision of subsection (g) of section 8415 which
relates to the minimum period of service required to qualify for
the higher accrual rate under such subsection.".
OF LAW EXTENDING COVERAGE OR BENEFITS UNDER CERTAIN
FEDERAL PROGRAMS TO INDIVIDUALS NOT OTHERWISE ELIGIBLE.
(a) TERMINATION OF CERTAIN SPECIAL ELIGIBILITY PROVISIONS. --
(1) CIVIL SERVICE RETIREMENT SYSTEM. -- Section 8347 is
amended by adding at the end the following:
"(o) Any provision of law outside of this subchapter which provides
coverage, service credit, or any other benefit under this subchapter to
any individuals who (based on their being employed by an entity other
than the Government) would not otherwise be eligible for any such
coverage, credit, or benefit, shall not apply with respect to any
individual appointed, transferred, or otherwise commencing that type of
employment on or after October 1, 1988.".
(2) LIFE INSURANCE. --
(A) IN GENERAL. -- Section 87 of title 5, United States Code,
is amended by inserting after section 8712 the following:
"Any provision of law outside of this chapter which provides coverage
or any other benefit under this chapter to any individuals who (based on
their being employed by an entity other than the Government) would not
otherwise be eligible for any such coverage or benefit, shall not apply
with respect to any individual appointed, transferred, or otherwise
commencing that type of employment on or after October 1, 1988.".
(B) CHAPTER ANALYSIS. -- The analysis for chapter 87 of title
5, United States Code, is amended by inserting after the item
relating to section 8712 the following:
"8713. Effect of other statutes.".
(3) HEALTH INSURANCE. --
(A) IN GENERAL. -- Chapter 89 of title 5, United States Code,
is amended by adding at the end the following:
"Any provision of law outside of this chapter which provides coverage
or any other benefit under this chapter to any individuals who (based on
their being employed by an entity other than the Government) would not
otherwise be eligible for any such coverage or benefit shall not apply
with respect to any individual appointed, transferred, or otherwise
commencing that type of employment on or after October 1, 1988.".
(B) CHAPTER ANALYSIS. -- The analysis for chapter 89 of title
5, United States Code, is amended by adding at the end the
following:
(b) EXTENSION OF OFFSET PROVISIONS UNDER CHAPTER 83. --
(1) CONTRIBUTIONS. -- Section 8334(k) is amended by adding at
the end the following:
"(4) In administering paragraphs (1) through (3) --
"(A) the term 'an individual described in section 8402(b)(2) of
this title' shall be considered to include any individual --
"(i) who is subject to this subchapter as a result of a
provision of law described in section 8347(o), and
"(ii) whose employment (as described in section 8347(o)) is
also employment for purposes of title II of the Social Security
Act and chapter 21 of the Internal Revenue Code of 1986; and
"(B) the term 'Federal wages', as applied with respect to any
individual to whom this subsection applies as a result of
subparagraph (A), means basic pay for any employment referred to
in subparagraph (A)(ii).".
(2) BENEFITS. -- Section 8349 is amended by adding at the end
the following:
"(d) In administering subsections (a) through (c) --
"(1) the terms 'an individual under section 8402(b)(2)' and 'an
individual described in section 8402(b)(2)' shall each be
considered to include any individual --
"(A) who is subject to this subchapter as a result of any
provision of law described in section 8347(o), and
"(B) whose employment (as described in section 8347(o)) is also
employment for purposes of title II of the Social Security Act and
chapter 21 of the Internal Revenue Code of 1986; and
"(2) the term 'Federal service', as applied with respect to any
individual to whom this section applies as a result of paragraph
(1), means any employment referred to in paragraph (1)(B)
performed after December 31, 1983.".
(3) EFFECTIVE DATE. -- The amendments made by this subsection
"5 USC 8334 note" shall be effective as of January 1, 1987.
EMPLOYEE BENEFIT PROGRAMS FOR CERTAIN EMPLOYEES OF SAINT
ELIZABETHS HOSPITAL.
(a) IN GENERAL. -- Section 207 of the Federal Employees' Retirement
System Act "5 USC 8331 note" of 1986 (Public Law 99-335; 100 Stat. 594)
is amended by adding at the end the following:
"(o) An employee of Saint Elizabeths Hospital who is appointed to a
position in the government of the District of Columbia on October 1,
1987, pursuant to the Saint Elizabeths Hospital and District of Columbia
Mental Health Services Act (Public Law 98-621; 98 Stat. 3369 and
following) shall, for purposes of chapters 83, 87, and 89 of title 5,
United States Code, be treated in the same way as an individual first
employed by the government of the District of Columbia before October 1,
1987.".
(b) The amendment made by this section shall be effective as of
October 1, 1987.
CERTAIN SERVICE PERFORMED UNDER A PERSONAL SERVICE
CONTRACT WITH THE UNITED STATES.
(a) IN GENERAL. --
(1) CONDITIONS FOR RECEIVING CREDIT. -- Subject to the making
of a deposit under section 8334(c) of title 5, United States Code,
upon application to the Office of Personnel Management within 2
years after the date of the enactment of this Act, any individual
who is an employee (as defined by section 8331(1) or 8401(11) of
such title) on such date shall be allowed credit under subchapter
III of chapter 83 of such title for any service if such service
was performed --
(A) before November 5, 1985; and
(B) under a personal service contract with the United States,
except as provided in paragraph (3).
(2) CERTIFICATION. --
(A) IN GENERAL. -- The Office shall, with respect to any
service for which credit is sought under this subsection, accept
the certification of the head of the agency which was party to the
contract referred to in paragraph (1)(B), but only if such
certification --
(i) states that the agency had intended, through such contract,
that the individual involved (or that persons like the individual
involved) be considered as having been appointed to a position in
which such individual would be subject to subchapter III of
chapter 83 of title 5, United States Code; and
(ii) indicates the period of service which was performed under
the contract by the individual involved, and includes copies of
appropriate records or other documentation to support the
determination as to the length of such period.
(B) FINALITY. -- A decision by an agency head concerning
whether or not to make a certification under this paragraph in any
particular instance shall be at the sole discretion of the agency
head, and shall not be subject to administrative or judicial
review.
(3) EXCEPTION. -- Nothing in this subsection shall apply with
respect to any service performed under --
(A) a contract for which any appropriations, allocations, or
funds were used under section 636(a)(3) of the Foreign Assistance
Act of 1961;
(B) a contract entered into under section 10(a)(5) of the Peace
Corps Act;
(C) a contract under which the services of an individual may be
terminated by a person other than the individual or the
Government; or
(D) a contract for a single transaction or a contract under
which services are paid for in a single payment.
(b) APPLICABILITY TO ANNUITANTS. --
(1) IN GENERAL. -- In the case of any individual who --
(A) performed service for which credit is allowable under
subsection (a), and
(B) retired on an annuity payable under subchapter III of
chapter 83 of title 5, United States Code, after January 23, 1980,
and before the date of the enactment of this Act,
any annuity under such subchapter based on the service of such
individual shall be redetermined to take into account the
amendment made by subsection (a) if application therefor is made,
and the deposit requirement under such subsection is met, within 2
years after the date of the enactment of this Act.
(2) AMOUNTS TO WHICH APPLICABLE. -- Any change in an annuity
resulting from a redetermination under paragraph (1) shall be
effective with respect to payments accruing for months beginning
after the date of the enactment of this Act.
CSRS FROM PARTICIPATING IN THE THRIFT SAVINGS PLAN.
(a) IN GENERAL. -- Section 8351 is amended --
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
"(c) A member of the Foreign Service described in section 103(6) of
the Foreign Service Act of 1980 shall be ineligible to make any election
under this section.".
(b) EFFECTIVE DATE. -- The amendments made by subsection (a) "5 USC
8351 note" shall be effective as of March 31, 1987. Any refund which
becomes payable as a result of the preceding sentence shall, to the
extent that such refund involves an individual's contributions to the
Thrift Savings Fund (established under section 8437 of title 5, United
States Code), be adjusted to reflect any earnings attributable thereto.
DECEMBER 1987 EXCLUDED FROM CSRS.
Section 8331(1) is amended --
(1) by striking "or" at the end of clause (x);
(2) by striking the period atthe end of clause (xi) and
inserting in lieu thereof "; or"; and
(3) by adding after clause (xi) the following:
"(xii) a member of the Foreign Service (as described in section
103(6) of the Foreign Service Act of 1980), appointed after
December 31, 1987.".
FERS.
(a) NO ELECTION TO CONVERT FROM CSRS. --
(1) IN GENERAL. -- Section 301(a) "5 USC 8331 note" of the
Federal Employees' Retirement System Act of 1986 (Public Law
99-335; 100 Stat. 599) is amended by adding at the end the
following:
"(4) A member of the Foreign Service described in section 103(6) of
the Foreign Service Act of 1980 "5 USC 8331 note" shall be ineligible to
make any election under this subsection.".
(2) EFFECTIVE DATE. -- The amendment made by paragraph (1)
shall be effective as of June 30, 1987. Any refund which becomes
payable as a result of the preceding sentence shall, to the extent
that such refund involves an individual's contributions to the
Thrift Savings Fund (established under section 8437 of title 5,
United States Code), be adjusted to reflect any eanrings
attributable thereto.
(b) EXCLUSION FROM FERS. --
(1) IN GENERAL. -- Section 8401(11) is amended --
(A) by striking "or" at the end of clause (i)(III);
(B) by inserting "or" after the semicolon in clause (ii); and
(C) by adding at the end the following:
"(iii) a member of the Foreign Service described in section
103(6) of the Foreign Service Act of 1980;". "5 USC 8401 note"
(2) EFFECTIVE DATE. -- The amendments made by paragraph (1) shall be
effective as of January 1, 1987. Any refund which becomes payable as a
result of the preceding sentence shall, to the extent that such refund
involves an individual's contributions to the Thrift Savings Fund
(established under section 8437 of title 5, United States Code), be
adjusted to reflect any earnings attributable thereto.
CONTRIBUTIONS TO THRIFT SAVINGS PLAN.
Section 8432(d) is amended by adding at the end the following;
"However, no contribution made under subsection (c)(3) shall be subject
to, or taken into account, for purposes of the preceding sentence.".
FORFEITABLE FOR DEATH IN SERVICE.
Section 8432(g) is amended --
(1) In paragraph (1), by striking "Except as provided in
paragraphs (2) and (3)," and inserting in lieu thereof "Except as
otherwise provided in this subsection,"; and
(2) by adding at the end the following:
"(4) Nothing in paragraph (2) or (3) shall cause the forfeiture of
any contributions made for the benefit of an employee, Member, or
Congressional employee under subsection (c)(1), or any earnings
attributable thereto, if such employee, Member, or Congressional
employee is not separated from Government employment as of date of
death.".
LEGAL PROCESS FOR CHILD SUPPORT OR ALIMONY.
Section 8437(e)(3) is amended by adding at the end the following:
"For the purposes of this paragraph, an amount contributed for the
benefit of an individual under section 8432(c)(1) (including any
earnings attributable thereto) shall not be considered part of the
balance in such individual's account unless such amount is
nonforfeitable, as determined under applicable provisions of section
8432(g).".
ADMINISTRATIVE EXPENSES OF THE THRIFT SAVINGS PLAN.
(a) IN GENERAL. -- Section 8437 is amended --
(1) in subsection (d), by inserting a period after "earnings in
such Fund" and by striking the matter thereafter; and
(2) in subsection (e)(1), by inserting "subsection (d) and"
before "paragraphs (2) and (3),".
(b) EFFECTIVE DATE. -- The amendments made by subsection (a) "5 USC
8437 note" shall take effect on the first day of the first month
beginning on or after date of the enactment of this Act.
REDUCTION UNDER CHAPTER 83 FOR CSRS PORTION OF ANNUITY
MADE SUBJECT TO REDUCTION UNDER CHAPTER 84 FOLLOWING AN
ELECTION INTO FERS.
Section 302(a)(4) of the Federal Employees' Retirement System Act of
1986 (Public Law 99-335; 100 Stat. 603) is amended by adding at the end
the following: "Notwithstanding the preceding sentence, in computing
accrued benefits under this paragraph for an individual retiring under
section 8412(g) or 8431(b) of title 5, United States Code, section
8339(h) of such title (relating to reductions based on age at date of
separation) shall not apply.".
(a) FOR INDIVIDUALS ELECTING FERS COVERAGE. -- Section 302(c)(2) of
the Federal Employees' Retirement System Act of 1986 (Public Law 99-335;
100 Stat. 605), as amended by section 302(a) of the Federal Employees'
Retirement System Technical Corrections Act of 1986 (Public Law 99-556;
100 Stat. 3136), is amended to read as follows:
"(2) In accordance with regulations prescribed by the Office of
Personnel Management, a refund under this subsection shall be payable
upon written application therefor filed with the Office and shall
include interest at the rate provided in section 8334(e)(3) of title 5,
United States Code. Interest on the refund shall accrue monthly and
shall be compounded annually.".
(b) FOR INDIVIDUALS ELECTING COVERAGE UNDER CSRS WITH OFFSETS FOR
SOCIAL SECURITY. -- The last sentence of section 303(a) of the Federal
Employees' Retirement System Act of 1986 (Public Law 99-335; 100 Stat.
605), as added by section 302(b) "5 USC 8331 note" of the Federal
Employees' Retirement System Technical Corrections Act of 1986 (Public
Law 99-556; 100 Stat. 3136), is amended to read as follows: "A refund
under this subsection shall be computed with interest in accordance with
section 302(c)(2) and regulations prescribed by the Office of Personnel
Management.".
PERFORMANCE MANAGEMENT AND RECOGNITION SYSTEM FOR
EMPLOYEES OF SAINT ELIZABETHS HOSPITAL.
(a) IN GENERAL. -- Notwithstanding any other provision of law, the
effective date of any merit increase under section 5404 of title 5,
United States Code, during calendar year 1987 shall, in the case of any
individual employed in or under Saint Elizabeths Hospital on September
1, 1987, be considered to be the first day of the first applicable pay
period commencing on or after September 1 (rather than October 1) of
such year.
(b) DEFINITION. -- For purposes of this section, "Saint Elizabeths
Hospital" refers to the institution identified under section 3(1) of the
Saint Elizabeths Hospital and District of Columbia Mental Health
Services Act (Public Law 98-621; 98 Stat. 3371).
SAVINGS PLAN.
(a) THE 1-PERCENT CONTRIBUTION. -- Section 8432(c)(1)(A) is amended
--
(1) by striking "At the end of" and inserting in lieu thereof
"At the time prescribed by the Executive Director, but no later
than 12 days after the end of"; and
(2) by striking "at the end of each succeeding pay period," and
inserting in lieu thereof "within such time as the Executive
Director may prescribe with respect to succeeding pay periods (but
no later than 12 days after the end of each such pay period),".
(b) AMOUNTS BASED ON INDIVIDUAL CONTRIBUTIONS. -- The second
sentence of section 8432(c)(2)(A) is amended by striking "at the end of
such pay period." and inserting in lieu thereof "within such time as the
Executive Director may prescribe, but no later than 12 days after the
end of each such pay period.".
(a) INITIAL DISABILITY ANNUITY OFFSET TO BE BASED ON ACTUAL SOCIAL
SECURITY DISABILITY INSURANCE BENEFIT; AMOUNT OF OFFSET NOT SUBJECT TO
ADJUSTMENT UNTIL AFTER THE FIRST YEAR. -- Section 8452(a)(2)(B)(i) of
title 5, United States Code, is amended to read as follows:
"(B)(i) For purposes of this paragraph, the assumed disability
insurance benefit of an annuitant for any month shall be equal to --
"(I) the amount of the disability insurance benefit to which
the annuitant is entitled under section 223 of the Social Security
Act for the month in which the annuity under this subchapter
commences, or is restored, or, if no entitlement to such
disability insurance benefits exists for such month, the first
month thereafter for which the annuitant is entitled both to an
annuity under this subchapter and disability insurance benefits
under section 223 of the Social Security Act, adjusted by
"(II) all adjustments made under section 8462(b) after the end
of the period referred to in paragraph (1)(A)(i) (or, if later,
after the end of the month preceding the first month for which the
annuitant is entitled both to an annuity under this subchapter and
disability insurance benefits under section 223 of the Social
Security Act) and before the start of the month involved (without
regard to whether the annuitant's annuity was affected by any of
those adjustments).".
(b) REVISED METHOD FOR REDETERMINING A DISABILITY ANNUITY AT AGE 62.
-- Section 8452(b) of title 5, United States Code, is amended to read as
follows:
"(b)(1) Except as provided in subsection (d), if an annuitant is
entitled to an annuity under this subchapter as of the day before the
date of the sixty-second anniversary of the annuitant's birth
(hereinafter in this section referred to as the annuitant's
'redetermination date'), such annuity shall be redetermined by the
Office in accordance with paragraph (2). Effective as of the
annuitant's redetermination date, the annuity (as so redetermined) shall
be in lieu of any annuity to which such annuitant would otherwise be
entitled under this subchapter.
"(2)(A) An annuity redetermined under this subsection shall be equal
to the amount of the annuity to which the annuitant would be entitled
under section 8415, taking into account the provisions of subparagraph
(B).
"(B) In performing a computation under this paragraph --
"(i) creditable service of an annuitant shall be increased by
including any period (or periods) before the annuitant's
redetermination date during which the annuitant was entitled to an
annuity under this subchapter; and
"(ii) the average pay which would otherwise be used shall be
adjusted to reflect all adjustments made under section 8462(b)
with respect to any period (or periods) referred to in clause (i)
(without regard to whether the annuitant's annuity was affected by
any of those adjustments).".
(c) METHOD FOR APPLYING COST-OF-LIVING ADJUSTMENTS TO CERTAIN
DISABILITY ANNUITY PROVISIONS. --
(1) MINIMUM DISABILITY ANNUITY AMOUNT SUBJECT TO ADJUSTMENT
AFTER THE FIRST YEAR. -- Section 8452 is amended --
(A) by redesignating subsection (d) as subsection (d)(1); and
(B) by adding after subsection (d)(1), as so redesignated, the
following:
"(2) In applying this subsection with respect to any annuitant, the
amount of an annuity so computed under section 8415 shall be adjusted
under section 8462 (including subsection (c) thereof) --
"(A) to the same extent, and otherwise in the same manner, as
if it were an annuity --
"(i) subject to adjustment under such section; and
"(ii) with a commencement date coinciding with the date the
annuitant's annuity commenced or was restored under this
subchapter, as the case may be; and
"(B) whether the amount actually payable to the annuitant under
this section in any month is determined under this subsection or
otherwise.".
(2) DISABILITY ANNUITY COLAS. --
(A) IN GENERAL. -- Section 8425(a)(1)(B) of title 5, United
States Code, is amended to read as follows:
"(B) An annuity computed under this paragraph --
"(i) shall not, during any period referred to in subparagraph
(A)(i), be adjusted under section 8462; but
"(ii) shall, after the end of any period referred to in
subparagraph (A)(i), be adjusted to reflect all adjustments made
under section 8462(b) after the end of the period referred to in
subparagraph (A)(i), whether the amount actually payable to the
annuitant under this section in any month is determined under this
subsection or otherwise.".
(B) CLARIFYING AMENDMENT. -- Section 8452(a) of title 5,
United States Code, is amended by adding at the end the following:
"(3) Section 8462 "5 USC 8452 note" shall apply with respect to
amounts under this subsection only as provided in paragraphs (1) and
(2).".
(d) EFFECTIVE DATE. -- The amendments made by this section shall be
effective as of January 1, 1987, as if they had been enacted as part of
the Federal Employees' Retirement System Act of 1986 (Public Law 99-335;
100 Stat. 514 and following).
FUND BALANCE. -- Section 8331(18) is amended by adding at the end
the following:
"but does not include any amount attributable to --
"(i) the Federal Employees' Retirement System; or
"(ii) contributions made under the Federal Employees'
Retirement Contribution Temporary Adjustment Act of 1983 by or on
behalf of any individual who became subject to the Federal
Employee's Retirement System;".
81 AND CHAPTER 83 OR 84 OF TITLE 5, UNITED STATES CODE.
(a) IN GENERAL. --
(1) AMENDMENTS. --
(A) CSRS. -- Section 8337 is amended by striking subsections
(f) and (g) and inserting in lieu thereof the following:
"(f)(1) An individual is not entitled to receive --
"(A) an annuity under this subchapter, and
"(B) compensation for injury to, or disability of, such
individual under subchapter I of chapter 81, other than
compensation payable under section 8107,
covering the same period of time.
"(2) An individual is not entitled to receive an annuity under this
subchapter and a concurrent benefit under subchapter I of chapter 81 on
account of the death of the same person.
"(3) Paragraphs (1) and (2) do not bar the right of a claimant to the
greater benefit conferred by either this subchapter or subchapter I of
chapter 81.
"(g) If an individual is entitled to an annuity under this
subchapter, and the individual receives a lump-sum payment for
compensation under section 8135 based on the disability or death of the
same person, so much of the compensation as has been paid for a period
extended beyond the date payment of the annuity commences, as determined
by the Department of Labor, shall be refunded to that Department for
credit to the Employees' Compensation fund. Before the individual may
receive the annuity, the individual shall --
"(1) refund to the Department of Labor the amount representing
the compensation payments for the extended period; or
"(2) authorize the deduction of the amount from the annuity.
Deductions from the annuity may be made from accrued or accruing
payments. The amounts deducted and withheld from the annuity
shall be transmitted to the Department of Labor for reimbursement
to the Employees' Compensation Fund. When the Department of Labor
finds that the financial circumstances of an individual entitled
to an annuity under this subchapter warrant deferred refunding,
deductions from the annuity may be prorated agains and paid from
accruing payments in such manner as the Department determines
appropriate.".
(B) FERS. -- Subchapter VI of chapter 84 is amended by
inserting after section 8464 the following:
and workers' compensation
"(a)(1) An individual is not entitled to receive --
"(A) an annuity under subchapter II or V, and
"(B) compensation for injury to, or disability of, such
individual under subchapter I of chapter 81, other than
compensation payable under section 8107,
covering the same period of time.
"(2) An individual is not entitled to receive an annuity under
subchapter IV and a concurrent benefit under subchapter I of chapter 81
on account of the death of the same person.
"(3) Paragraphs (1) and (2) do not bar the right of a claimant to the
greater benefit conferred by either this chapter or subchapter I of
chapter 81.
"(b) If an individual is entitled to an annuity under subchapter II,
IV, or V, and the individual receives a lump-sum payment for
compensation under section 8135 based on the disability or death of the
same person, so much of the compensation as has been paid for a period
extended beyond the date payment of the annuity commences, as determined
by the Department of Laobr, shall be refunded to that Department for
credit to the Employees' Compensation Fund. Before the individual may
receive the annuity, the individual shall --
"(1) refund to the Department of Labor the amount representing
the commuted compensation payments for the extended period; or
"(2) authorize the deduction of the amount from the annuity.
Deductions from the annuity may be made from accrued or accruing
payments. The amounts deducted and withheld from the annuity
shall be transmitted to the Department of Labor for reimbursement
to the Employees' Compensation Fund. When the Department of Labor
finds that the financial circumstances of an individual entitled
to an annuity under subchapter II, IV, or V warrant deferred
refunding, deductions from the annuity may be prorated against and
paid from accruing payments in such manner as the Department
determines appropriate.".
(2) CHAPTER ANALYSIS. -- The analysis for chapter 84 is amended by
inserting after the item relating to section 8464 the following:
compensation.".
(b) TECHNICAL AND CONFORMING AMENDMENTS. --
(1) Subchapter V of chapter 84 is amended --
(A) by striking section 8456; and
(B) by redesignating section 8457 as section 8456.
(2) The analysis for chapter 84 is amended --
(A) by striking the item relating to section 8456; and
(B) by striking "8457" and inserting in lieu thereof "8456".
(c) EFFECTIVE DATE. -- "5 USC 8337 note"
(1) In GENERAL. -- Except as provided in paragraph (2), the
amendments made by this section shall be effective as of January
1, 1987, and shall apply with respect to benefits payable based on
a death or disability occurring on or after that date.
(2) EXCEPTION. -- The amendment made by subsection (a)(1)(A)
shall take effect on the date of the enactment of this Act and
shall apply with respect to benefits payable based on a death or
disability occurring on or after that date.
INDIVIDUALS TO PARTICIPATE IN THE THRIFT SAVINGS PLAN.
(a) DEFINITIONS. -- For purposes of this section --
(1) the term "Executive Director" means the Executive Director
under section 8474 of title 5, United States Code; and
(2) the term "Thrift Savings Plan" refers to the program under
subchapter III of chapter 84 of title 5, United States Code.
(b) REGULATIONS. --
(1) IN GENERAL. -- The Executive Director shall prescribe
regulations relating to participation in the Thrift Savings Plan
by an individual described in subsection (c).
(2) SPECIFIC MATTERS TO BE INCLUDED. -- Under the regulations
--
(A) in computing a percentage of basic pay to determine an
amount to be contributed to the Thrift Savings Fund, the rate of
basic pay to be used shall be the same as that used in computing
any amount which the individual involved is otherwise required, as
a condition for participating in the Civil Service Retirement
System or the Federal Employee's Retirement System (as the case
may be), to contribute to the Civil Service Retirement and
Disability Fund; and
(B) an employing authority which would not otherwise make
contributions to the Thrift Savings Fund shall be allowed, with
respect to any individual under subsection (c) who is serving
under such authority, and at the sole discretion of such
authority, to make any contributions on behalf of such individual
which would be permitted or required under the provisions of
section 8432(c) of title 5, United States Code, if such authority
were the individual's employing agency under such provisions.
(c) APPLICABILITY. -- This section applies with respect to --
(1) any individual participating in the Civil Service
Retirement System or the Federal Employees' Retirement System as
--
(A) an individual who has entered on approved leave without pay
to serve as a full-time officer or employee of an organization
composed primarily of employees (as defined by section 8331(1) or
8401(11) of title 5, United States Code);
(B) an individual assigned from a Federal agency to a State or
local government under subchapter VI of chapter 33 of title 5,
United States Code; or
(C) an individual appointed or otherwise assigned to one of the
cooperative extension services, as defined by section 1404(5) of
the National Agricultural Research, Extension, and Teaching Policy
Act of 1977 (7 U.S.C. 3103(5)); and
(2) any individual who is participating in the Civil Service
Retirement System as a result of a provision of law described in
section 8347(o).
(d) EFFECTIVE DATE. --
(1) IN GENERAL. -- Except as provided in paragraph (2), the
regulations prescribed under this section shall become effective
in accordance with the provisions of such regulations.
(2) EXCEPTION. -- The regulations prescribed under this
section shall, with respect to individuals under subsection
(c)(1)(C), be effective as of January 1, 1987.
PHYSICIANS INCLUDED IN AVERAGE SALARY UNDER FERS.
Section 4118(f) of title 38, United States Code, is amended --
(1) in paragraph (1), by striking "81 or 83" and inserting in
lieu thereof "81, 83, or 84"; and
(2) in paragraph (2) --
(A) in the first sentence, by striking "chapter 83 of title 5"
and inserting in lieu thereof "chapter 83 or 84 of title 5, as the
case may be";
(B) in the second sentence, by striking "section 8331(4)" and
all that follows thereafter through "; or" and inserting in lieu
thereof the following: "section 8331(4) or 8401(3) of such title
(as applicable) only --
"(A) for the purposes of computing benefits paid under section
8337, 8341 (d) or (e), 8442(b), 8443, or 8451 of such title; or";
and
(C) in subparagraph (B), by inserting "if" at the beginning
thereof.
CERTAIN FORMER SPOUSES.
Section 4(b)(1)(B) of the Civil Service Retirement Spouse Equity Act
of 1984 (Public Law 98-615; 98 Stat. 3205), as amended by section
201(b)(1)(C) of the Federal Employees Benefits Improvement Act of 1986
(Public Law 99-251; 100 Stat. 22), is amended --
(1) in clause (i), by inserting ", and before May 8, 1987"
before the semicolon; and
(2) by amending clause (iv) to read as follows:
"(iv) the former spouse files an application for the survivor
annuity with the Office on or before May 7, 1989; and"; and
(3) by amending clause (v) by striking out "at the time of
filing such application" and inserting in lieu thereof "on May 7,
1987".
DEDUCTIONS TAKEN AFTER 1983 TO OFFSET EMPLOYEES UNDER
THE CIVIL SERVICE RETIREMENT SYSTEM.
(a) REFUND ELIGIBILITY. -- An individual shall upon written
application to the Office of Personnel Management, receive a refund
under subsection (b), if such individual --
(1) was subject to section 8334(a)(1) of title 5, United States
Code, for any period of service after December 31, 1983, because
of an election under section 208(a)(1)(B) of the Federal
Employees' Retirement Contribution Temporary Adjustment Act of
1983 (97 Stat. 1107; 5 U.S.C. 8331 note);
(2) is not eligible to make an election under section 301(b) of
the Federal Employees' Retirement System Act of 1986 (Public Law
99-335; 100 Stat. 599); and
(3) becomes subject to section -- 8334(k) of title 5, United
States Code.
(b) REFUND COMPUTATION. -- An individual eligible for a refund under
subsection (a) shall receive a refund --
(1) for the period beginning on January 1, 1984, and ending on
December 31, 1986, for the amount by which --
(A) the total amount deducted from such individual's basic pay
under section 8334(a)(1) of title 5, United States Code, for
service described in subsection (a)(1) of this section, exceeds
(B) 1.3 percent of such individual's total basic pay for such
period; and
(2) for the period beginning on January 1, 1987, and ending on
the day before such individual becomes subject to section 8334(k)
of title 5, United States Code, for the amount by which --
(A) the total amount deducted from such individual's basic pay
under section 8334(a)(1) of title 5, United States Code, for
service described in subsection (a)(1) of this section, exceeds
(B) the total amount which would have been deducted if such
individual's basic pay had instead been subject to section 8334(k)
of title 5, United States Code, during such period.
(c) INTEREST COMPUTATION. -- A refund under this section shall be
computed with interest in accordance with section 8334(e) of title 5,
United States Code, and regulations prescribed by the Office of
Personnel Management.
YEARS WITH ZERO OR NEGATIVE INFLATION.
Section 8434(a)(2) (C) and (D) of title 5, United States Code, is
amended to read as follows:
"(C) a method described in subparagraph (A) which provides for
automatic adjustments in the amount of the annuity payable so long
as the amount of the payable in any one year shall not be less
than the amount payable in the previous year;
"(D) a method described in subparagraph (B) which provides for
automatic adjustments in the amount of the annuity payable so long
as the amount of the annuity payable in any one year shall not be
less than the amount payable in the previous year; and".
SYSTEM FOR INDIVIDUALS SUBJECT TO THE FOREIGN SERVICE
PENSION SYSTEM WHO ENTER FEDERAL EMPLOYMENT OTHER THAN
THE FOREIGN SERVICE.
Section 8402 of title 5, United States Code, is amended --
(1) in the matter following subparagraph (B) of paragraph (2)
of subsection (b) by inserting "subsection (d) of this section or"
before "title III"; and
(2) by inserting after subsection (c) the following new
subsection (d):
"(d) Paragraph (2) of subsection (b) shall not apply to an individual
who becomes subject to subchapter II of chapter 8 of title I of the
Foreign Service Act of 1980 relating (relating to the Foreign Service
Pension System) pursuant to an election and who subsequently enters a
position in which, but for such paragraph (2), he would be subject to
this chapter.".
RETIREMENT SYSTEM.
(a) SURVIVOR REDUCTION COMPUTATION. -- Section 8419(a) of title 5,
United States Code, is amended --
(1) in paragraph (1) by striking out ", shall be reduced" and
inserting in lieu thereof "or one-half of the annuity, if jointly
designated for this purpose by the employee or Member and the
spouse of the employee or Member under procedures prescribed by
the Office of Personnel Management shall be reduced"; and
(2) in paragraph (2)(A) by striking out ", shall be reduced"
and inserting in lieu thereof "or one-half of the annuity, if
jointly designated for this purpose by the employee or Member and
the spouse of the employee or Member under procedures prescribed
by the Office of Personnel Management, shall be reduced".
(b) SURVIVOR BENEFITS. -- Section 8442 of title 5, United States
Code, is amended --
(1) in subsection (a)(1) by inserting after "with respect to
the annuitant," the following: "(or one-half thereof, if
designated for this purpose under section 8419 of this title),";
and
(2) in subsection (g)(1) by inserting after "paragraph (2)" the
following: "(or one-half thereof if designated for this purpose
under section 8419 of this title)".
SAVINGS FUND.
Section 8433(i)(3) of title 5, United States Code, is amended to read
as follows:
"(3) Loans under this subsection shall be available to all
employees and Members on a reasonably equivalent basis, and shall
be subject to such other conditions as the Board may by regulation
prescribe. The restrictions of section 8477(c)(1) of this title
shall not apply to loans made under this subsection.".
MANAGEMENT OF THRIFT SAVINGS FUND.
(a) FIDUCIARY RESPONSIBILITIES AND LIABILITIES. -- Section 8477(e)
of title 5, United States Code, is amended --
(1) in paragraph (1)(A) by inserting before the period at the
end of the first sentence a comma and "except as provided in
paragraphs (3) and (4) of this subsection";
(2) in paragraph (1)(B) by striking out "Internal Revenue Code
of 1954" and inserting in lieu thereof Internal Revenue Code of
1986";
(3) in paragraph (1)(D) by inserting "only" before "if" in the
matter preceding clause (i);
(4) by redesignating paragraphs (4) and (5) as paragraphs (7)
and (8), respectively; and
(5) by striking out paragraphs (2) and (3) and inserting in
lieu thereof:
"(2) No civil action may be maintained against any fiduciary with
respect to the responsibilities, liabilities, and penalties authorized
or provided for in this section except in accordance with paragraphs (3)
and (4).
"(3) A civil action may be brought in the district courts of the
United States --
"(A) by the Secretary of Labor against any fiduciary other than
a Member of the Baord or the Executive Director of the Board --
"(i) to determine and enforce a liability under paragraph
(1)(A);
"(ii) to collect any civil penalty under paragraph (1)(B);
"(iii) to enjoin any act or practice which violates any
provision of subsection (b) or (c);
"(iv) to obtain any other appropriate equitable relief to
redress a violation of any such provision; or
"(v) to enjoin any act or practice which violates subsection
(g)(2) or (h) of section 8472 of this title:
"(B) by any participant, beneficiary, or fiduciary against any
fiduciary --
"(i) to enjoin any act or practice which violates any provision
of subsection (b) or (c);
"(ii) to obtain any other appropriate equitable relief to
redress a violation of any such provision;
"(iii) to enjoin any act or practice which violates subsection
(g)(2) or (h) of section 8472 of this title; or
"(C) by any participant or beneficiary --
"(i) to recover benefits of such participant or beneficiary
under the provisions of subchapter III of this chapter, to enforce
any right of such participant or beneficiary under such
provisions, or to clarify any such right to future benefits under
such provisions; or
"(ii) to enforce any claim otherwise cognizable under sections
1346(b) and 2671 through 2680 of title 28, if the remedy against
the United States provided by sections 1346(b) and 2672 of title
28 for damages for injury or loss of property caused by the
negligent or wrongful act or omission of any fiduciary while
acting within the scope of his duties or employment is exclusive
of any other civil action or proceeding by the participant or
beneficiary for recovery of money by reason of the same subject
matter against the fiduciary (or the estate of such fiduciary)
whose act or omission gave rise to such action or proceeding,
whether or not such action or proceeding is based on an alleged
violation of subsection (b) or (c).
"(4)(A) In all civil actions under paragraph (3)(A), attorneys
appointed by the Secretary may represent the Secretary (except as
provided in section 518(a) of title 28), however all such litigation
shall be subject to the direction and control of the Attorney General.
"(B) The Attorney General shall defend any civil action or proceeding
brought in any court against any fiduciary referred to in paragraph
(3)(C)(ii) (or the estate of such fiduciary) for any such injury. Any
fiduciary against whom such a civil action or proceeding is brought
shall deliver, within such time after date of service or knowledge of
service as determined by the Attorney General, all process served upon
such fiduciary (or an attested copy thereof) to the Executive Director
of the Board, who shall promptly furnish copies of the pleading and
process to the Attorney General and the copies of the pleading and
process to the Attorney General and the United States Attorney for the
district wherein the action or proceeding is brought.
"(C) Upon certification by the Attorney General that a fiduciary
described in paragraph (3)(C)(ii) was acting in the scope of such
fiduciary's duties or employment as a fiduciary at the time of the
occurrence or omission out of which the action arose, any such civil
action or proceeding commenced in a State court shall be --
"(i) removed without bond at any time before trial by the
Attorney General to the district court of the United States for
the district and division in which it is pending; and
"(ii) deemed a tort action brought against the United States
under the provisions of title 28 and all references thereto.
"(D) The Attorney General may compromise or settle any claim asserted
in such civil action or proceeding in the manner provided in section
2677 of title 28, and with the same effect. To the extent section 2672
of title 28 provides that persons other than the Attorney General or his
designee may compromise and settle claims, and that payment of such
claims may be made from agency appropriations, such provisions shall not
apply to claims based upon an alleged violation of subsection (b) or
(c).
"(E) For the purposes of paragraph (3)(C)(ii) the provisions of
sections 2680(h) of title 28 shall not apply to any claim based upon an
alleged violation of subsection (b) or (c).
"(F) Notwithstanding sections 1346(b) and 2671 through 2680 of title
28, whenever an award, compromise, or settlement is made under such
sections upon any claim based upon an alleged violation of subsection
(b) or (c), payment of such award, compromise, or settlement shall be
made to the appropriate account within the Thrift Savings Fund, or where
there is no such appropriate account to the participant or beneficiary
bringing the claim.
"(G) For purposes of paragraph (3)(C)(ii), fiduciary includes only
the Members of the Board and the Board's Executive Director.
"(5) Any relief awarded against a Member of the Board or the
Executive Director of the Board in a civil action authorized by
paragraphs (3) and (4) may not include any monetary damages or any other
recovery of money.
"(6) An action may not be commenced under paragraph (3)(A) or (B)
with respect to a fiduciary's breach of any responsibility, duty, or
obligation under subsection (b) or a violation of subsection (c) after
the earlier of --
"(A) 6 years after (i) the date of the last action which
constituted a part of the breach or violation, or (ii) in the case
of an omission, the latest date on which the fiduciary could have
cured the breach or violation; or
"(B) 3 years after the earliest date on which the plaintiff had
actual knowledge of the breach or violation, except that, in the
case of fraud or concealment, such action may be commenced not
later than 6 years after the date of discovery of such breach or
violation.".
(b) EFFECTIVE DATE. -- The provisions of section 8477(e) "5 USC 8477
note" (1), (2), (3), (4), (5), and (6) of title 5, United States Code
(as amended by subsection (a) of this section), shall apply to any civil
action or proceeding arising from any act or omission occurring on or
after October 1, 1986.
(c) REPEAL. -- The provisions of subsection (a) (and the amendments
to section 8477(e) "5 USC 8477 and note" of title 5, United States Code,
contained therein) and subsection (b) of this section are repealed
effective on December 31, 1990. On and after December 31, 1990, the
provisions of section 8477(e) of title 5, United States Code, shall be
in effect as such provisions were in effect on the date immediately
preceding the date of enactment of this section.
(a) AMENDMENT TO CHAPTER 84 OF TITLE 5, UNITED STATES CODE. --
Section 8468 is amended to read as follows:
reemployment
"(a) If an annuitant, except a disability annuitant whose annuity is
terminated because of the annuitant's recovery or restoration of earning
capacity, becomes employed in an appointive or elective position, an
amount equal to the annuity allocable to the period of actual employment
shall be deducted from the annuitant's pay, except for lump-sum leave
payment purposes under section 5551. Unless the annuitant's appointment
is on an intermittent basis or is to a position as a justice or judge
(as defined by section 451 of title 28) or as an employee subject to
another retirement system for Government employees, or unless the
annuitant is serving as President, deductions for the Fund shall be
withheld from annuitant's pay under section 8422(a) and contributions
under section 8423 shall be made. The deductions and contributions
referred to in the preceding provisions of this subsection shall be
deposited in the Treasury of the United States to the credit of the
Fund. The annuitant's lump-sum credit may not be reduced by annuity
paid during the reemployment.
"(b)(1)(A) If an annuitant subject to deductions under the second
sentence of subsection (a) serves on a full-time basis for at least 1
year, or on a part-time basis for periods equivalent to at least 1 year
of full-time service, the annuitant's annuity on termination of
reemployment shall be increased by an annuity computed under section
8415 (a) through (f) as may apply based on the period of reemployment
and the basic pay, before deduction, averaged during the reemployment.
"(B)(i) If the annuitant is receiving a reduced annuity as provided
in section 8419, the increase in annuity payable under subparagraph (A)
is reduced by 10 percent and the survivor annuity or combination of
survivor annuities payable under section 8442 or 8445 (or both) is
increased by 50 percent of the increase in annuity payable under
subparagraph (A), unless, at the time of claiming the increase payable
under subparagraph (A), the annuitant notifies the Office in writing
that the annuitant does not desire the survivor annuity to be increased.
"(ii) If an annuitant who is subject to the deductions referred to in
subparagraph (A) dies while still reemployed, after having been
reemployed for not less that 1 year of full-time service (or the
equivalent thereof, in the case of full-time employment), the survivor
annuity payable is increased as though the reemployment had otherwise
terminated.
"(2)(A) If an annuitant subject to deductions under the second
sentence of subsection (a) serves on a full-time basis for at least 5
years, or on a part-time basis for periods equivalent to at least 5
years of full-time service, the annuitant may elect, instead of the
benefit provided by paragraph (1), to have such annuitant's rights
redetermined under this chapter.
"(B) If an annuitant who is subject to the deductions referred to in
subparagraph (A) dies while still reemployed, after having been
reemployed for at least 5 years of full-time service (or the equivalent
thereof in the case of part-time employment), any person entitled to a
survivor annuity under section 8442 or 8445 based on the service of such
annuitant shall be permitted to elect, in accordance with regulations
prescribed by the Office of Personnel Management, to have such person's
rights under subchapter IV redetermined. A redetermined survivor
annuity elected under this subparagraph shall be in lieu of an increased
annuity which would otherwise be payable in accordancewith paragraph
(1)(B)(ii).
"(3) If an annuitant subject to deductions under the second sentence
of subsection (a) serves on a full-time basis for a period of less than
1 year, or on a part-time basis for periods equivalent to less than 1
year of full-time service, the total amount withheld under section
8422(a) from the annuitant's basic pay for the period or periods
involved shall, upon written application to the Office, be payable to
the annuitant (or the appropriate survivor or survivors, determined in
the order set forth in section 8424(d)).
"(c) This section does not apply to an individual appointed to serve
as a Governor of the Borad of Governors of the United States Postal
Service.
"(d) If an annuitant becomes employed as a justice or judge of the
United States, as defined by section 451 of title 28, the annuitant may,
at any time prior to resignation or retirement from regular active
service as such a justice or judge, apply for and be paid, in accordance
with section 8424(a), the amount (if any) by which the lump-sum credit
exceeds the total annuity paid, notwithstanding the time limitation
contained in such section for filing an application for payment.
"(e) A reference in this section to an 'annuity' shall not be
considered to include any amount payable from a source other than the
Fund.".
(b) AMENDMENT TO FERSA. -- Section 302(a)(12) "5 USC 8331 note" of
the Federal Employees' Retirement System Act of 1986 is amended to read
as follows:
"(12)(A)(i) If the electing individual is a reemployed annuitant
under section 8344 of title 5, United States code, under conditions
allowing the annuity to continue during reemployment, payment of the
annuitant's annuity shall continue after the effective date of the
election, and an amount equal to the annuity allocable to the period of
actual employment shall continue to be deducted from the annuitant's pay
and deposited as provided in subsection (a) of such section. Deductions
from pay under section 8422(a) of such title and contributions under
section 8423 of such title shall begin effective on the effective date
of the election.
"(ii) Notwithstanding any provision of section 301, an election under
such section shall not be available to any reemployed annuitant who
would be excluded from the operation of chapter 84 of title 5, United
States Code, under section 8402(c) of such title relating to exclusions
based on the temporary or intermittent nature of one's employment).
"(B) If the annuitant serves on a full-time basis for at least 1
year, or on a part-time basis for periods equivalent to at least 1 year
of full-time service, such annuitant's annuity, on termination of
reemployment, shall be increased by any annuity computed --
"(i) with respect to reemployment service before the effective
date of the election, under section 8339(a), (b), (d) (e), (h),
(i), and (n) of title 5, United States Code, as may apply based on
the reemployment in which such annuitant was engaged before such
effective date; and
"(ii) with respect to reemployment service on or after the
effective date of the election, under section 8415(a) through (f)
of such title, as may apply based on the reemployment in which
such annuitant was engaged on or after such effective date;
with the 'average pay' used in any computation under clause (i) or
(ii) being determined (based on rates of pay in effect during the period
of reemployment, whether before, on, or after the effective date of the
election) in the same way as provided for in paragraph (6). If the
annuitant is receiving a reduced annuity as provided in section 8339(j)
or section 8339(k)(2) of title 5, United States Code, the increase in
annuity payable under this subparagraph is reduced by 10 percent and the
survivor annuity payable under section 8341(b) of such title is
increased by 55 percent of the increase in annuity payable under this
subparagraph, unless, at the time of claiming the increase payable under
this subparagraph, the annuitant notifies the Office of Personnel
Management in writing that such annuitant does not desire the survivor
annuity to be increased. If the annuitant dies while still reemployed,
after having been reemployed for at least 1 full year (or the equivalent
thereof, in the case of part-time employment), any survivor annuity
payable under section 8341(b) of such title based on the service of such
annuitant is increased as though the reemployment had otherwise
terminated. In applying paragraph (7) to an amount under this
subparagraph, any portion of such amount attributable to clause (i)
shall be adjusted under subparagraph (A) of such paragraph, and any
portion of such amount attributable to clause (ii) shall be adjusted
under subparagraph (B) of such paragraph.
"(C)(i) If the annuitant serves on a full-time basis for at least 5
years, or on a part-time basis for periods equivalent to at least 5
years of full-time service, such annuitant may elect, instead of the
benefit provided by subparagraph (B), to have such annuitant's rights
redetermined, effective upon separation from employment. If the
annuitant so elects, the redetermined annuity will become payable as if
such annuitant were retiring for the first time based on the separation
from reemployment service, and the provisions of this section concerning
computation of annuity (other than any provision of this paragraph)
shall apply.
"(ii) If the annuitant dies while still reemployed, after having been
reemployed for at least 5 full years (or the equivalent thereof, in the
case of part-time employment), any person entitled to a survivor annuity
under section 8341(b) of title 5, United States Code, based on the
service of such annuitant shall be permitted to elect to have such
person's rights redetermined in accordance with regulations which the
Office shall prescribe. Redetermined benefits elected under this clause
shall be in lieu of any increased benefits which would otherwise be
payable in accordance with the next to last sentence of subparagraph(B).
"(D) If the annuitant serves on a full-time basis for less than 1
year (or the equivalent thereof, in the case of part-time employment),
any amounts withheld under section 8422(a) of title 5, United States
Code, from such annuitant's pay for the period (or periods) involved
shall, upon written application to the Office, be payable to such
annuitant (or the appropriate survivor or survivors, determined in the
order set forth in section 8342(c) of such title).
"(E) For purposes of determining the period of an annuitant's
reemployment service under this paragraph, a period of reemployment
service shall not be taken into account unless --
"(i) with respect to service performed before the effective
date of the election under section 301, it is service which, if
performed for at least 1 full year, would have allowed such
annuitant to elect under section 8344(a) of title 5, United States
Code, to have deductions withheld from pay; or
"(ii) with respect to service performed on or after the
effective date of the election under section 301, it is service
with respect to which deductions from pay would be required to be
withheld under the second sentence of section 8468(a) of title 5,
United States Code.".
(c) TECHNICAL AMENDMENT. -- Section 302(a)(4) "5 USC 8331 note" of
the Federal Employees' Retirement System Act of 1986 is amended by
striking out all before "benefits" and inserting "Accrued".
(d) EFFECTIVE DATE. -- "5 USC 8468 note"
(1) GENERALLY. -- The amendments made by this section shall
take effect on the date of the enactment of this Act, and as
provided in paragraph (2), shall apply with respect to any
individual who becomes a reemployed annuitant on or after such
date.
(2) EXCEPTION. -- The amendment made by subsection (b) shall
apply with respect to any election made by a reemployed annuitant
on or after the date of the enactment of this Act.
BUILDING.
The United States Post Office Building located at 809 Nueces Bay
Boulevard, Corpus Christi, Texas, shall be designated and hereafter
known as the "Dr. Hector Perez Garcia Post Office Building". Any
reference in any law, map, regulation, document, record, or other paper
of the United States to that building shall be deemed to be a reference
to the "Dr. Hector Perez Garcia Post Office Building".
ANNUITANTS OF THE ALASKA RAILROAD IN FEDERAL HEALTH
BENEFITS PLANS AND LIFE INSURANCE PLANS.
(a) AMENDMENTS TO ALASKA RAILROAD TRANSFER ACT OF 1982. -- Section
607 of the Alaska Railroad Transfer Act of 1982 (45 U.S.C. 1206) is
amended by adding at the end thereof the following new subsection:
"(e)(1) Any person described under the provisions of paragraph (2)
may elect life insurance coverage under chapter 87 of title 5, United
States Code, and enroll in a health benefits plan under chapter 89 of
title 5, United States Code, in accordance with the provisions of this
subsection.
"(2) The provisions of paragraph (1) shall apply to any person who --
"(A)(i) retired from the State-owned railroad during the period
beginning on or after January 4, 1985 through the date of
enactment of this subsection; and
"(ii)(I) was covered under a life insurance policy pursuant to
chapter 87 of title 5, United States Code, on January 4, 1985, for
the purpose of electing life insurance coverage under the
provisions of paragraph (1); or
"(II) was enrolled in a health benefits plan pursuant to
chapter 89 of title 5, United States Code, on January 4, 1985, for
the purpose of enrolling in a health benefits plan under the
provisions of paragraph (1); or
"(B)(i) on the date of enactment of this subsection is an
employee of the State-owned railroad; and
"(ii)(I) has 26 years or more of service (in the civil service
as a Federal employee or as an employee of the State-owned
railroad, combined) on the date of retirement from the State-owned
railroad; and
"(II)(aa) was covered under a life insurance policy pursuant to
chapter 87 of title 5, United States Code, January 4, 1985, for
the purpose of electing life insurance coverage under the
provisions of paragraph (1); or
"(bb) was enrolled in a health benefits plan pursuant to
chapter 89 of title 5, United States Code, on January 4, 1985, for
the purpose of enrolling in a health benefits plan under the
provisions of paragraph (1).
"(3) For purposes of this section, any person described under the
provisions of paragraph (2) shall be deemed to have been covered under a
life insurance policy under chapter 87 of title 5, United States Code,
and to have been enrolled in a health benefits plan under chapter 89 of
title 5, United Staes Code, during the period beginning on January 5,
1985 through the date of retirement of any such person.
"(4) The provisions of paragraph (1) shall not apply to any person
described under paragraph (2)(B), until the date such person retires
from the State-owned railroad.".
(b) ADMINISTRATIVE PROVISIONS. -- Within 180 days after the date of
enactment of this section, "45 USC 1206 note" the Director of the Office
of Personnel Management shall notify any person described under the
provisions of section 607(e)(2)(A) of such Act, for the purpose of the
election of a life insurance policy or the enrollment in a health
benefits plan pursuant to the provisions of section 607(e)(1) of the
Alaska Railroad Transfer Act of 1982 (as amended by subsection (a) of
this section).
SEC. 137. Section 5402 of title 39, United States Code, is amended
--
(1) in subsection (f) by striking out "January 1, 1989" and
inserting in lieu thereof "January 1, 1999"; and
(2) by adding at the end thereof the following new subsection:
"(g)(1) The Postal Service, in selecting carriers of non-priority
bypass mail to any point served by more than one carrier in the State of
Alaska, shall, at a minimum, require that any such carrier shall --
"(A) hold a certificate of public convenience and necessity
issued under section 401 of the Federal Aviation Act of 1958 (49
U.S.C. 1371);
"(B) operate at least 3 scheduled flights each week to such
point;
"(C) exhibit an adherence to such scheduled flights to the best
of the abilities of such carrier; and
"(D) have provided scheduled service within the State of Alaska
for at least 12 months before being selected as a carrier of
non-priority bypass mail.
"(2) The Postal Service --
"(A) may provide direct mainline non-priority bypass mail
service to any bush point in the State of Alaska, without regard
to paragraph (1)(B), if such service is equal to or better than
interline service in cost and quality; and
"(B) shall deduct the non-priority bypass mail poundage flown
on direct mainline flights to bush points within the State of
Alaska by any carrier, from such carrier's allocation of the total
poundage of non-priority bypass mail transported to the nearest
appropriate Postal Service hub point in any month.
"(3)(A) The Postal Service shall determine the bypass mail bush
points and hub points described under paragraph (2)(B) after
consultation with the State of Alaska and the affected local communities
and air carriers.
"(B) Any changes in the determinations of the Postal Service under
subparagraph (A) shall be made --
"(i) after consultation with the State of Alaska and the
affected local communities and air carriers; and
"(ii) after giving 12 months public notice before any such
change takes effect.
Except as otherwise expressly provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment or repeal to a
section or other provision, the reference shall be considered to be made
to a section or other provision of the Foreign Service Act of 1980 (22
U.S.C. 4041 et seq.).
YEARS.
(a) IN GENERAL. -- Subchapter I of chapter 8 (22 U.S.C. 4041 et
seq.) is amended by adding after section 829 the following new section:
"SEC. 830. "22 USC 4069-1" QUALIFIED FORMER WIVES AND HUSBANDS. --
(a) Notwithstanding section 4(h) of the Civil Service Retirement Spouse
Equity Act of 1984, section 827 of this Act shall apply with respect to
section 8339(j), section 8341(e), and section 8341(h) of title 5, United
States Code, and section 4 (except for subsection (b)) of the Civil
Service Retirement Spouse Equity Act of 1984 to the extent that those
sections apply to a qualified former wife or husband. For the purposes
of this section any reference in the Civil Service Retirement Spouse
Equity Act of 1984, to the effective date of that Act shall be deemed to
be a reference to the effective date of this section.
"(b)(1) Payments pursuant to this section which would otherwise be
made to a participant or former participant based upon his service shall
be paid (in whole or in part) by the Secretary of State to another
poerson if and to the extent expressly provided for in the terms of any
court order or spousal agreement. Any payment under this paragraph to a
person bars recovery by any other person.
"(2) Paragraph (1) shall only apply to payments made by the Secretary
of State under this chapter after the date of receipt by the Secretary
of State of written notice of such court order or spousal agreement and
such additional information and documentation as the Secretary of State
may prescribe.
"(c) For the purposes of this section, the term 'qualified former
wife or husband' means a former wife or husband of an individual if --
"(1) such individual performed at least 18 months of civilian
service creditable under this chapter; and
"(2) the former wife or husband was married to such individual
for at least 9 months but not more than 10 years.
"(d) Regulations issued pursuant to section 827 to implement this
section shall be submitted to the Committee on Post Office and Civil
Service and the Committee on Foreign Affairs of the House of
Representatives and the Committee on Governmental Affairs and the
Committee on Foreign Relations of the Senate. Such regulations shall
not take effect until 60 days after the date on which such regulations
are submitted to the Congress.".
(b) CONFORMING AMENDMENT. -- The table of contents in section 2 of
the Foreign Service Act of 1980 is amended by inserting after the item
relating to section 829 the following:
"Sec. 830. Qualified former wives and husbands.".
ANNUITY FOR CERTAIN SPOUSES ACQUIRED BEFORE THE
EFFECTIVE DATE OF THE FOREIGN SERVICE ACT OF 1980.
(a) ELECTION. -- A former participant who married his or her current
spouse before the effective date of the Foreign Service Act of 1980 and
who married such spouse after retirement under the Foreign Service
Retirement and Disability System and who was unable to provide a
survivor annuity for such spouse because --
(1) the participant was married at the time of retirement and
elected not to provide a survivor annuity for that spouse at the
time of retirement, or
(2) subject to subsection (e), the participant failed to notify
the Secretary of State of the participant's post-retirement
marriage within one year after the marriage,
4 may make the election described in subsection (b).
(b) ELECTION DESCRIBED. --
(1) The election referred to in subsection (a) is an election
in writing --
(A) to provide for a survivor annuity for such spouse under
section 806(g) of the Foreign Service Act of 1980 (22 U.S.C.
4046(g));
(B) to have his or her annuity reduced under section 806(b)(2)
of such Act; and
(C) to depositin the Foreign Service Retirement and Disability
Fund an amount determined by the Secretary of State, as nearly as
may be administratively feasible, to reflect the amount by which
such participant's annuity would have been reduced had the
election been continuously in effect since the annuity commenced,
plus interest computed under paragraph (2).
(2) For the purposes of paragraph (1), the annual rate of
interest shall be 6 percent for each year during which the annuity
would have been reduced if the election had been in effect on and
after the date the annuity commenced.
(c) OFFSET. -- If the participant does not make the deposit referred
to in subsection (b)(1)(C), the Secretary of State shall collect such
amount by offset against such participant's annuity, up to a maximum of
25 percent of the net annuity otherwise payable to such participant.
Such participant is deemed to consent to such offset.
(d) NOTICE. -- The Secretary of State shall provide for notice to
the general public of the right to make an election under this section.
(e) PROOF OF ATTEMPTED ELECTION. -- In any case in which subsection
(a)(2) applies, the retired employee or Member shall provide the
Secretary of State with such documentation as the Secretary of State
shall decide is appropriate, to show that such participant attempted to
elect a reduced annuity with survivor benefit for his or her current
spouse and that such election was rejected by the Secretary of State
because it was untimely filed.
(f) DEPOSIT. -- A deposit required by this subsection may be made by
the surviving spouse of the participant.
(g) LIMITATION. -- The election authorized in subsection (a) may
only be made within one year after the date of enactment of this title
in accordance with procedures prescribed by the Secretary of State.
(h) DEFINITIONS. -- For the purposes of this section, the terms
"participant" and "surviving spouse" have the same meaning given such
terms in subchapter I of chapter 8 of the Foreign Service Act of 1980.
OF THE FOREIGN SERVICE.
(a) IN GENERAL. -- Subchapter I of chapter 8 (22 U.S.C. 3901 et
seq.), as amended by section 202 of this title, is amended by inserting
after section 830 the following:
FORMER SPOUSES.
"(a) Any individual who was a former spouse of a participant or
former participant on February 14, 1981, shall be entitled, to the
extent of available appropriations, and except to the extent such former
spouse is disqualified under subsection (b), to benefits --
"(1) if married to the participant throughout the creditable
service of the participant, equal to 50 percent of the benefits of
the participant; or
"(2) if not married to the participant throughout such
creditable service, equal to that former spouse's pro rata share
of 50 percent of such benefits.
"(b) A former spouse shall not be entitled to benefits under this
section if --
"(1) the former spouse remarries before age 55; or
"(2) the former spouse was not married to the participant at
least 10 years during service of the participant which is
creditable under this chapter with at least 5 years occurring
while the participant was a member of the Foreign Service.
"(c)(1) The entitlement of a former spouse to benefits under this
section --
"(A) shall commence on the later of --
"(i) the day the participant upon whose service the benefits
are based becomes entitled to benefits under this chapter; or
"(ii) the first day of the month in which the divorce or
annulment involved becomes final; and
"(B) shall terminate on the earlier of --
"(i) the last day of the month before the former spouse dies or
remarries before 55 years of age; or
"(ii) the date of the benefits of the participant terminates.
"(2) Notwithstanding paragraph (1), in the case of any former spouse
of a disability annuitant --
"(A) the benefits of the former spouse shall commence on the
date the participant would qualify on the basis of his or her
creditable service for benefits under this chapter (other than a
disability annuity) or the date the disability annuity begins,
whichever is later, and
"(B) the amount of benefits of the former spouse shall be
calculated on the basis of benefits for which the participant
would otherwise so qualify.
"(3) Benefits under this section shall be treated the same as an
annuity under section 814(a)(7) for purposes of section 806(h) or any
comparable provision of law.
"(4)(A) Benefits under this section shall not be payable unless
appropriate written application is provided to the Secretary, complete
with any supporting documentation which the Secretary may by regulation
require, within 30 months after the effective date of this section. The
Secretary may waive the 30-month application requirement under this
subparagraph in any case in which the Secretary determines that the
circumstances so warrant.
"(B) Upon approval of an application provided under subparagraph (A),
the appropriate benefits shall be payable to the former spouse with
respect to all periods before such approval during which the former
spouse was entitled to such benefits under this section, but in no event
shall benefits by payable under this section with respect to any period
before the effective date of this section.
"(d) For the purpose of this section, the term "benefits" means --
"(1) with respect to a participant or former participant
subject to this subchapter, the annuity of the participant or
former participant; and
"(2) with respect to a participant or former participant
subject to subchapter II, the benefits of the participant or
former participant under that subchapter.
"(e) Nothing in this section shall be construed to impair, reduce, or
otherwise affect the annuity or the entitlement to an annuity of a
participant or former participant under this chapter.
FORMER SPOUSES.
"(a) Any individual who was a former spouse of a participant or
former participant on February 14, 1981, shall be entitled, to the
extent of available appropriations, and except to the extent such former
spouse is disqualified under subsection (b), to a survivor annuity equal
to 55 percent of the greater of --
"(1) the full amount of the participant's or former
participant's annuity, as computed under this chapter; or
"(2) the full amount of what such annuity as so computed would
be if the participant or former participant had not withdrawn a
lump-sum portion of contributions made with respect to such
annuity.
"(b) If an election has been made with respect to such former spouse
under section 2109 or 806(f), then the survivor annuity under subsection
(a) of such former spouse shall be equal to the full amount of the
participant's or former participant's annuity referred to in subsection
(a) less the amount of such election.
"(c) A former spouse shall not be entitled to a survivor annuity
under this section if --
"(1) the former spouse remarries before age 55; or
"(2) the former spouse was not married to the participant at
least 10 years during service of the participant which is
creditable under this chapter with at least 5 years occurring
while the participant was a member of the Foreign Service.
"(d)(1) The entitlement of a former spouse to a survivor annuity
under this section --
"(A) shall commence --
"(i) in the case of a former spouse of a participant or former
participant who is deceased as of the effective date of this
section, beginning on such date; and
"(ii) in the case of any other former spouse, beginning on the
later of --
"(I) the date that the participant or former participant to
whom the former spouse was married dies; or
"(II) the effective date of this section; and
"(B) shall terminate on the last day of the month before the former
spouse's death or remarriage before attaining the age 55.
"(2)(A) A survivor annuity under this section shall not be payable
unless appropriate written application is provided to the Secretary,
complete with any supporting documentation which the Secretary may by
regulation require, within 30 months after the effective date of this
section. The Secretary may waive the 30-month application requirement
under this subparagraph in any case in which the Secretary determines
that the circumstances so warrant.
"(B) Upon approval of an application provided under subparagraph (A),
the appropriate survivor annuity shall be payable to the former spouse
with respect to all periods before such approval during which the former
spouse was entitled to such annuity under this section, but in no event
shall a survivor annuity be payable under this section with respect to
any period before the effective date of this section.
"(e) The Secretary shall --
"(1) as soon as possible, but not later than 60 days after the
effective date of this section, issue such regulations as may be
necessary to carry out this section; and
"(2) to the extent practicable, and as soon as possible, inform
each individual who was a former spouse of a participant or former
participant on February 14, 1981, of any rights which such
individual may have under this section.
"(f) Nothing in this section shall be construed to impair, reduce, or
otherwise affect the annuity or the entitlement to an annuity of a
participant or former participant under this chapter.
FORMER SPOUSES.
"(a) Except as provided in subsection (c)(1), any individual --
"(1) formerly married to an employee or former employee of the
Foreign Service, whose marriage was dissolved by divorce or
annulment before May 7, 1985;
"(2) who, at any time during the 18-month period before the
divorce or annulment became final, was covered under a health
benefits plan as a member of the family of such employee or former
employee; and
"(3) who was married to such employee for not less than 10
years during periods of government service by such employee, is
eligible for coverage under a health benefits plan in accordance
with the provisions of this section.
"(b)(1) Any individual eligible for coverage under subsection (a) may
enroll in a health benefits plan for self alone or for self and family
if, before the expiration of the 6-month period beginning on the
effective date of this section, and in accordance with such procedures
as the Director of the Office of Personnel Management shall by
regulation prescribe, such individual --
"(A) files an election for such enrollment; and
"(B) arranges to pay currently into the Employees Health
Benefits Fund under section 8909 of title 5, United States Code,
an amount equal to the sum of the employee and agency
contributions payable in the case of an employee enrolled under
chapter 89 of such title in the same health benefits plan and with
the same level of benefits.
"(2) The Secretary shall, as soon as possible, take all steps
practicable --
"(A) to determine the identity and current address of each
former spouse eligible for coverage under subsection (a); and
"(B) to notify each such former spouse of that individual's
rights under this section.
"(3) The Secretary shall waive the 6-month limitation set forth in
paragraph (1) in any case in which the Secretary determines that the
circumstances so warrant.
"(c)(1) Any former spouse who remarries before age 55 is not eligible
to make an election under subsection (b)(1).
"(2) Any former spouse enrolled in a health benefits plan pursuant to
an election under subsection (b)(1) may continue the enrollment under
the conditions of eligibility which the Director of the Office of
Personnel Management shall by regulation prescribe, except that any
former spouse who remarries before age 55 shall not be eligible for
continued enrollment under this section after the end of the 31-day
period beginning on the date of remarriage.
"(d) No individual may be covered by a health benefits plan under
this section during any period in which such individual is enrolled in a
health benefits plan under any other authority, nor may any individual
be covered under more than one enrollment under this section.
"(e) For purposes of this section the term 'health benefits plan'
means an approved health benefits plan under chapter 89 of title 5,
United States Code.".
(b) CONFORMING AMENDMENT. -- The table of contents in section 2 of
the Foreign Service Act of 1980 is amended by inserting after the item
relating to section 830 the following:
"Sec. 831. Retirement benefits for certain former spouses.
"Sec. 832. Survivor benefits for certain former spouses.
"Sec. 833. Health benefits for certain former spouses.".
Paragraph (13) of section 804 (22 U.S.C. 4044) is amended --
(1) by striking out ", in the case of death in service or
marriage after retirement,";
(2) by striking out "one year" and inserting in lieu thereof "9
months"; and
(3) by inserting before the semicolon the following: ", except
that the requirement for at least 9 months of marriage shall be
deemed satisfied in any case in which the participant or annuitant
dies within the applicable 9-month period, if --
"(A) the death of such participant or annuitant was accidental;
or
"(B) the surviving spouse of such individual had been
previously married to the individual and subsequently divorced and
the aggregate time married is at least 9 months".
Paragraph (1) of section 805(d) (22 U.S.C. 4045(d)) is amended --
(1) by striking out "equal to" and inserting in lieu thereof ".
Special contributions for purposes of subparagraph (A) shall
equal"; and
(2) by adding at the end thereof the following: "Special
contributions for refunds under subparagraph (B) shall equal the
amount of the refund received by the participant.".
(a) JOINT ELECTION TO WAIVE SURVIVOR ANNUITY WITH RESPECT TO A FORMER
SPOUSE. -- Subparagraph (C) of section 806(b)(1) (22 U.S.C. 4046(b)(1))
is amended by striking out "12-month" and inserting in lieu thereof
"24-month".
(b) RECALL SERVICE. -- Paragraph (2) of section 806(i) (22 U.S.C.
4046(i)) is amended by striking out "section 814(b)" and inserting in
lieu thereof "this subchapter".
(a) SURVIVOR BENEFITS FOR CHILDREN. -- Section 806 of chapter 8 (22
U.S.C. 4046) (as amended by section 213 of this Act) is amended --
(1) in subsection (c), by inserting "or a former spouse who is
the natural or adoptive parent of a surviving child of the
annuitant" after "survived by a spouse" each place it appears;
and
(2) in subsection (d), by amending the first sentence to read
as follows: "On the death of the surviving spouse or former
spouse or termination of the annuity of a child, the annuity of
any other child or children shall be recomputed and paid as though
the spouse, former spouse, or child had not survived the
participant.".
(b) DEATH IN SERVICE. -- Section 809 (22 U.S.C. 4049) is amended --
(1) in subsection (c), by inserting "or a former spouse who is
the natural or adoptive parent of a surviving child of the
annuitant," after "spouse"; and
(2) in subsection (d), by inserting "or a former spouse who is
the natural or adoptive parent of a surviving child of the
annuitant," after "spouse,".
(a) DISABILITY ANNUITY. -- Subsections (a) and (b) of section 808
(22 U.S.C. 4048) are each amended by striking out "65" each place it
appears and inserting in lieu thereof "60".
(b) DEATH IN SERVICE. -- Subsection (e) of section 809 (22 U.S.C.
4049) is amended by striking out "65" and inserting in lieu thereof
"60".
Section 811 of chapter 8 (22 U.S.C. 4051) is amended by adding at the
end thereof the following: "The Secretary shall withhold consent for
retirement under this section by any participant who has not been a
member of the Service for 5 years. Any participant who voluntarily
separates from the Service before completing 5 years in the System and
who, on the date of separation, would be eligible for an annuity, based
on a voluntary separation, under section 8336 or 8338 of title 5, United
States Code, if the participant had been covered under the Civil Service
Retirement System rather than subject to this chapter while a member of
the Service, may receive an annuity under section 8336 or 8338,
notwithstanding section 8333(b) of title 5, United States Code, if all
contributions transferred to the Fund under section 805(c)(1) of this
Act, as well as all contributions withhled from the participant's pay or
contributed by the employer, and deposited into the Fund during the
period he or she was subject to this chapter, including interest on
these amounts, are transferred to the Civil Service Retirement and
Disability Fund effective on the date the participant separates from the
Service.".
(a) 5 YEAR FOREIGN SERVICE REQUIREMENT. -- Paragraph (1) of section
814(a) "22 USC 4054" is amended by inserting "if such former spouse was
married to the participant for at least 10 years during service of the
participant which is creditable under this chapter with at least 5 of
such years occurring while the participant was a member of the Foreign
Service and" after "annuity".
(b) COURT ORDER EFFECTIVE 24 MONTHS AFTER MARRIAGE IS DISSOLVED. --
Paragraph (4) of section 814(a) (22 U.S.C. 4054 (a)) is amended by
striking out "12" and inserting in lieu thereof "24".
(c) MONTHLY RATE OF ANNUITY NOT APPLICABLE IN CERTAIN SITUATION. --
(1) Subsection (1) of section 806 (22 U.S.C. 4046) is repealed.
(2) Subsection (d) of section 814 (22 U.S.C. 4054) is repealed.
(a) REQUIREMENTS FOR PAYMENT. -- Subsection (a) of section 815 (22
U.S.C. 4055) is amended to read as follows:
"(a)(1) A participant is entitled to be paid a lump-sum credit if the
participant --
"(A) is separated from the Service for at least 31 consecutive
days, or is transferred to a position in which the participant is
not subject to this chapter and remains in such a position for at
least 31 consecutive days;
"(B) files an application with the Secretary of State for
payment of the lump-sum credit;
"(C) is not reemployed in a position in which the participant
is subject to this chapter at the time the participant files the
application;
"(D) will not become eligible to receive an annuity under this
subchaper within 31 days after filing the application; and
"(E) has notified any spouse or former spouse the participant
may have of the application for payment in accordance with
regulations prescribed by the Secretary of State.
Such regulations may provide for waiver of subparagraph (E) under
circumstances described in section 806(b)(1)(D).
"(2) Such lump-sum credit shall be paid to the participant and to any
former spouse of the participant in accordance with subsection (i).".
Paragraph (1) of section 826(c) (22 U.S.C. 4066(c)) is amended to
read as follows:
"(1) The first increase (if any) made under this section to an
annuity which is payable from the Fund to a participant or to the
surviving spouse or former spouse of a deceased participant who
died in service or a deceased annuitant whose annuity was not
increased under this section, shall be equal to the product
(adjusted to the nearest 1/10 of 1 percent) of --
"(A) 1/12 of the applicable percent change computed under
subsection (b) of this section, multiplied by
"(B) the number of months (counting any portion of a month as a
month) --
"(i) for which the annuity was payable from the Fund before the
effective date of the increase, or
"(ii) in the case of a surviving spouse or former spouse of a
deceased annuitant whose annuity has not been so increased, since
the annuity was first payable to the deceased annuitant.".
Section 852 of chapter 8 (22 U.S.C. 4071a) is amended --
(1) by redesignating paragraphs (3), (4), (5), (6), and (7) as
paragraphs (4), (5), (6), (7), and (8), respectively; and
(2) by inserting after paragraph (2) the following new
paragraph:
"(3) the term 'lump-sum credit' means the unrefunded amount
consisting of --
"(A) retirement deductions made from the basic pay of a
participant under section 856 of this chapter (or under section
204 of the Federal Employees' Retirement Contribution Temporary
Adjustment Act of 1983);
"(B) amounts deposited by a participant under section 854 to
obtain credit under this System for prior civilian or military
service; and
"(C) interest on the deductions and deposits which, for any
calendar year, shall be equal to the overall average yield to the
Fund during the preceding fiscal year from all obligations
purchased by the Secretary of the Treasury during such fiscal year
under section 819, as determined by the Secretary of the Treasury
(compounded annually); but does not include interest --
"(i) if the service covered thereby aggregates 1 year or less;
or
"(ii) for a fractional part of a month in the total service;".
OF A MEMBER OR OFFICE OF THE CONGRESS.
The second sentence of subsection (e) of section 854 (22 U.S.C.
4071c) is amended --
(1) by striking out "matching"; and
(2) by inserting "determined under section 857(a)" after
"participant)".
Subsection (b) of section 904 (22 U.S.C 4084) is amended by inserting
"or Foreign Service Pension System" after "Foreign Service Retirement
and Disability System".
(a) IN GENERAL. -- Except as provided in subsection (b), this title
and the amendments made by this title shall take effect 90 days after
the date of enactment of this title.
(b) EXCEPTIONS. --
(1) The amendments made by section 202 shall apply to any
individual who, on or after the date of enactment of this title,
is married to a participant or former participant.
(2) The amendment made by section 217(a) shall not apply with
respect to the former spouse of a participant or former
participant who is subject to subchapter I of chapter 8 of the
Foreign Service Act of 1980 if, on the date of enactment of this
title, that former spouse --
(A) was the spouse of that participant or former participant;
or
(B) is entitled to an annuity under section 814 of the Foreign
Service Act of 1980 pursuant to the divorce or annulment of the
marriage to that participant or former participant.
(c) DEFINITIONS. -- For the purpose of this section, the terms
"participant" and "former participant" have the same meaning as such
terms in chapter 8 of the Foreign Service Act of 1980.
Approved January 8, 1988.
LEGISLATIVE HISTORY -- H.R. 3395;
HOUSE REPORTS: No. 100-374 (Comm. on Post Office and Civil Service).
CONGRESSIONAL RECORD, Vol. 133 (1987): Oct. 19, considered and
passed House. Dec. 19, considered and passed Senate, amended. Dec. 21,
House concurred in Senate amendments.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): Jan.
8, Presidential statement.
Public Law 100-237, 101 Stat. 1733
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
This Act may be cited as the "commodity Distribution Reform Act and
WIC Amendments of 1987". 7 USC 612c note."
CONGRESS.
(a) STATEMENT OF PURPOSE. -- It is the purpose of this Act to
improve the manner in which argicultural commodities acquired by the
Department of Agriculture are distributed to recipient agencies, the
quality of the commodities that are distributed, and the degree to which
such distribution responds to the needs of the recipient agencies.
(b) SENSE OF CONGRESS. -- It is the sense of Congress that the
distribution of commodities and products --
(1) should be improved as an effective means of removing
agricultural surpluses from the market and providing nutritious
high-quality foods to recipient agencies;
(2) is inextricably linked to the agricultural support and
surplus removal programs; and
(3) is an important mission of the Secretary of Agriculture.
REFORMS.
(a) COMMODITIES SPECIFICATIONS. --
(1) DEVELOPMENT. -- In developing specifications for
commodities acquired through price support, surplus removal, and
direct purchase programs of the Department of Agriculture that are
donated for use for programs or institutions described in
paragraph (2), the Secretary shall --
(A) consult with the advisory council established under
paragraph (3);
(B) consider both the results of the information received from
recipient agencies under subsection (f)(2) and the results of an
ongoing field testing program under subsection (g) in determining
which commodities and products, and in which form the commodities
and products, should be provided to recipient agencies; and
(C) give significant weight to the recommendations of the
advisory council established under paragraph (3) in ensuring that
commodities and products are --
(i) of the quality, size, and form most usable by recipient
agencies; and
(ii) to the maximum extent practicable, consistent with the
Dietary Guidelines for Americans published by the Secretary of
Agriculture and the Secretary of Health and Human Services.
(2) Applicability. -- Paragraph (1) shall apply to --
(A) the commodity distribution and commodity supplemental food
programs established under sections 4(a) and 5 of the Agriculture
and Consumer Protection Act of 1973 (7 U.S.C. 612c note);
(B) the program established under section 4(b) of the Food
Stamp Act of 1977 (7 U.S.C. 2013(b));
(C) the school lunch, commodity distribution, and child care
food programs established under sections 6, 14, and 17 of the
National School Lunch Act (42 U.S.C. 1755, 1762a, and 1766);
(D) the school breakfast program established under section 4 of
the Child Nutrition Act of 1966 (42 U.S.C. 1773);
(E) the donation of surplus commodities to provide nutrition
services under section 311 of the Older Americans Act of 1965 (42
U.S.C. 3030a); and
(F) to the extent practicable --
(i) the temporary emergency food assistance program established
under the Temporary Emergency Food Assistance Act of 1983 (7
U.S.C. 612c note); and
(ii) programs under which food is donated to charitable
institutions.
(3) Advisory Council. -- (A) The Secretary shall establish an
advisory council on the distribution of donated commodities to
recipient agencies. The Secretary shall appoint not less than
nine and not more than 15 members to the council, including --
(i) representatives of recipient agencies;
(ii) representatives of food processors and food distributors;
(iii) representatives of agricultural organizations;
(iv) representatives of State distribution agency directors;
and
(v) representatives of State advisory committees.
(B) The council shall meet not less than semiannually with
appropriate officials of the Department of Agriculture and shall
provide guidance to the Secretary on regulations and policy
development with respect to specifications for commodities.
(C) Members of the council shall serve without compensation but
shall receive reimbursement for necessary travel and subsistence
expenses incurred by them in the performance of the duties of the
committee.
(D) The council shall report annually to the Secretary of
Agriculture, the Committee on Education and Labor and the
Committee on Agriculture of the House of Representatives, and the
Committee on Agriculture, Nutrition, and Forestry of the Senate.
(E) The council shall expire on September 30, 1992.
(b) DUTIES OF SECRETARY WITH RESPECT TO PROVISION OF COMMODITIES. --
With respect to the provision of commodities to recipient agencies, the
Secretary shall --
(1) before the end of the 270-day period beginning on the date
of the enactment of this Act --
(A) implement a system to provide recipient agencies with
options with respect to package sizes and forms of such
commodities, based on information received from such agencies
under subsection (f)(2), taking into account the duty of the
Secretary --
(i) to remove surplus stocks of agricultural commodities
through the Commodity Credit Corporation;
(ii) to purchase surplus agriculture commodities through
section 32 of the Agricultural Adjustment Act (7 U.S.C. 601 et
seq.); and
(iii) to make direct purchases of agricultural commodities and
other foods for distribution recipient agencies under --
(I) the commodity distribution and commodity supplemental food
programs established under sections 4(a) and 5 of the Agriculture
and Consumer Protection Act of 1973 (7 U.S.C. 612c note);
(II) the program established under section 4(b) of the Food
Stamp Act of 1977 (7 U.S.C. 2013(b));
(III) the school lunch, commodity distribution, and child care
food programs established under sections 6, 14, and 17 of the
National School Lunch Act (42 U.S.C. 1755, 1762a, and 1766);
(IV) the school breakfast program established under section 4
of the Child Nutrition Act of 1966 (42 U.S.C. 1773); and
(V) the donation of surplus commodities to provide nutrition
services under section 311 of the Older Americans Act of 1965 (42
U.S.C. 3030a); and
(B) implement procedures to monitor the manner in which State
distribution agencies carry out their responsibilities;
(2) provide technical assistance to recipient agencies on the
use of such commodities, including handling, storage, and menu
planning and shall distribute to all recipient agencies suggested
recipes for the use of donated commodities and products (the
recipe cards shall be distributed as soon as practicable after the
date of enactment of this Act and updated on a regular basis
taking into consideration the Dietary Guidelines for Americans
published by the Secretary of Agriculture and the Secretary of
Health and Human Services, as in effect at the time of the update
of the recipe files);
(3) before the end of the 120-day period beginning on the date
of the enactment of this Act, implement a system under which the
Secretary shall --
(A) make available to State agencies summaries of the
specifications with respect to such commodities and products; and
(B) require State agencies to make such summaries available to
recipient agencies on request;
(4) implement a system for the dissemination to recipient
agencies and to State distribution agencies --
(A) not less than 60 days before each distribution of
commodities by the Secretary is scheduled to begin, of information
relating to the types and quantities of such commodities that are
to be distributed; or
(B) in the case of emergency purchases and purchases of
perishable fruits and vegetables, of as much advance notification
as is consistent with the need to ensure that high-quality
commodities are distributed;
(5) before the expiration of the 90-day period beginning on the
date of the enactment of this Act, establish procedures for the
replacement of commodities received by recipient agencies that are
stale, spoiled, out of condition, or not in compliance with the
specifications developed under subsection (a)(1), including a
requirement that the appropriate State distribution agency be
notified promptly of the receipt of commodities that are stale,
spoiled, out of condition, or not in compliance with the
specifications developed under subsection (a)(1);
(6) monitor the condition of commodities designated for
donation to recipient agencies that are being stored by or for the
Secretary to ensure that high quality is maintained;
(7) establish a value for donated commodities and products to
be used by State agencies in the allocation or charging of
commodities against entitlements; and
(8) require that each State distribution agency shall receive
donated commodities not more than 90 days after such commodities
are ordered by such agency, unless such agency specifies a longer
delivery period.
(c) QUALIFICATIONS FOR PURCHASE OF COMMODITIES. --
(1) OFFERS FOR EQUAL OR LESS POUNDAGE. -- subject to
compliance by the Secretary with surplus removal responsibilities
under other provisions of law, the Secretary may not refuse any
offer in response to an invitation to bid with respect to a
contract for the purchase of entitlement commodities (provided in
standard order sizes) solely on the basis that such offer provides
less than the total amount of poundage for a destination specified
in such invitation.
(2) OTHER QUALIFICATIONS. -- The Secretary may not enter into
a contract for the purchase of entitlement commodities unless the
Secretary considers the previous history and current patterns of
the bidding party with respect to compliance with applicable meat
inspection laws and with other appropriate standards relating to
the wholesomeness of food for human consumption.
(d) DUTIES OF STATE DISTRIBUTION AGENCIES. -- Before the expiration
of the 270-day period beginning on the date of the enactment of this
Act, the Secretary shall be regulation require each State distribution
agency to --
(1) evaluate its warehousing and distribution systems for
donated commodities;
(2) implement the most cost-effective and efficient system for
providing warehousing and distribution services to recipient
agencies;
(3) use commercial facilities for providing warehousing and
distribution services to recipient agencies unless the State
applies to the Secretary for approval to use other facilities,
showing that other facilities are more cost effective and
efficient;
(4) consider the preparation and storage capabilities of
recipient agencies when ordering donated commodities, including
capabilities of such agencies to handle commodity product forms,
quality, packaging, and quantities; and
(5) in the case of any such agency that enters into a contract
with respect to processing of agricultural commodities and their
products for recipient agencies --
(A) test the product of such processing with the recipient
agencies before entering into a contract for such processing; and
(B) develop a system for monitoring product acceptability.
(e) REGULATIONS. --
(1) IN GENERAL. -- The Secretary shall provide by regulation
for --
(A) whenever fees are charged to local recipient agencies, the
establishment of mandatory criteria for such fees based on
national standards and industry charges (taking into account
regional differences in such charges) to be used by State
distribution agencies for storage and deliveries of commodities;
(B) minimum performance standards to be followed by State
agencies responsible for intrastate distribution of donated
commodities and products;
(C) procedures for allocating donated commodities among the
States; and
(D) delivery schedules for distribution of commodities and
products that are consistent with the needs of eligible recipient
agencies, taking into account the duty of the Secretary --
(i) to remove surplus stocks of agricultural commodities
through the Commodity Credit Corporation;
(ii) to purchase surplus agricultural commodities through
section 32 of the Act entitled "An Act to amend the Agricultural
Adjustment Act, and for other purposes", approved August 24, 1935
(7 U.S.C. 612c); and
(iii) to make direct purchases of agricultural commodities and
other foods for distribution to recipient agencies under --
(I) the commodity distribution and commodity supplemental food
programs established under sections 4(a) and 5 of the Agriculture
and Consumer Protecti n Act of 1973 (7 U.S.C. 612c note);
(II) the program established under section 4(b) of the Food
Stamp Act of 1977 (7 U.S.C. 2013(b)); and
(III) the school lunch, commodity distribution, and child care
food programs established under sections 6, 14, and 17 of the
National School Lunch Act (42 U.S.C. 1755, 1762a, and 1766);
(IV) the school breakfast program established under section 4
of the Child Nutrition Act of 1966 (42 U.S.C. 1773); and
(V) the donation of surplus commodities to provide nutrition
services under section 311 of the Older Americans Act of 1965 (42
U.S.C. 3030a).
(2) TIME FOR PROMULGATION OF REGULATIONS. -- The Secretary
shall promulgate --
(A) regulations as required by paragraph (1)(D) before the end
of the 90-day period beginning on the date of enactment of this
Act; and
(B) regulations as required by subparagraphs (A), (B), and (C)
of paragraph (1) before the end of the 270-day period beginning on
such date.
(f) Review of Provision of Commodities. --
(1) IN GENERAL. -- Before the expiration of the 270-day period
beginning on the date of the enactment of this Act, the Secretary
shall establish procedures to provide for systematic review of the
costs and benefits of providing commodities of the kind and
quantity that are suitable to the needs of recipient agencies.
(2) INFORMATION FROM RECIPIENT AGENCIES. -- Before the
expirat-on of the 120-day period beginning on the date of the
enactment of this Act, the Secretary shall establish procedures to
ensure that information is received from recipient agencies at
least semiannually with respect to the types and forms of
commodities that are most useful to persons participating in
programs operated by recipient agencies.
(g) TESTING FOR ACCEPTABILITY. -- The Secretary shall establish an
ongoing field testing program for present and anticipated commodity and
product purchases to test product acceptability with program
participants. Test results shall be taken into consideration in
deciding which commodities and products, and in what form the
commodities and products, should be provided to recipient agencies.
(h) BUY AMERICAN PROVISION. --
(1) IN GENERAL. -- The Secretary shall require that recipient
agencies purchase, whenever possible, only food products that are
produced in the United States.
(2) WAIVER. -- The Secretary may waive the requirement
established in paragraph (1) --
(A) in the case of recipient agencies that have unusual or
ethnic preferences in food products; or
(B) for such other circumstances as the Secretary considers
appropriate.
(3) EXCEPTION. -- The requirement established in paragraph (1)
shall not apply to recipient agencies in Alaska, Hawaii, Guam,
American Samoa, Puerto Rico, the Virgin Islands, or the
Commonwealth of the Northern Mariana Islands.
(i) UNIFORM INTERPRETATION. -- The Secretary shall take such actions
as are necessary to ensure that regional offices of the Department of
Agriculture interpret uniformly across the United States policies and
regulations issued to implement this section.
(j) PER MEAL VALUE OF DONATED FOODS. -- Section 6(e) of the National
School Lunch Act (42 U.S.C. 1755(e)) is amended by --
(1) inserting "(1)" after the subsection designation; and
(2) adding at the end the following new paragraph:
"(2) Each State agency shall offer to each school food
authority under its jurisdiction that participates in the school
lunch program and receives commodities, agricultural commodities
and their products, the per meal value of which is not less than
the national average value of donated foods established under
paragraph (1). Each such offer shall include the full range of
such commodities and products that are available from the
Secretary to the extent that quantities requested are sufficient
to allow efficient delivery to and within the State.".
(k) REPORT. -- Not later than January 1, 1989, the Secretary shall
submit to the Committee on Education and Labor and the Committee on
Agriculture of the House of Representatives and to the Committee on
Agriculture, Nutrition, and Forestry of the Senate a report of the
implementation and operation of this section.
(a) DEMONSTRATION PROJECT. -- The Secretary shall carry out no less
than one demonstration project to provide and redistribute agricultural
commodities and food products thereof as authorized under section 32 of
the Act "7 USC 612c note." entitled "An Act to amend the Agricultural
Adjustment Act, and for other purposes", approved August 24, 1935 (7
U.S.C. 612c), to needy individuals and families through community food
banks. The Secretary may use a State agency or any other food
distribution system for such provision or redistribution of section 32
agricultural commodities and food products through community food banks
under a demonstration project.
(b) RECORDKEEPING AND MONITORING. -- Each food bank participating in
the demonstration projects under this section shall establish a
recordkeeping system and internal procedures to monitor the use of
agricultural commodities and food products provided under this section.
The Secretary shall develop standards by which the feasibility and
effectiveness of the projects shall be measured, and shall conduct an
ongoing review of the effectiveness of the projects.
(c) DETERMINATION OF QUANTITIES, VARIETIES, AND TYPES OF COMMODITIES.
-- The Secretary shall determine the quantities, varieties, and types
of agricultural commodities and food products to be made available under
this section.
(d) EFFECTIVE PERIOD. -- This section shall be effective for the
period beginning on the date of enactment of this Act and ending on
December 31, 1990.
(e) PROGRESS REPORTS. -- The Secretary shall submit annual progress
reports to Congress beginning on July 1, 1988, and a final report on
July 1, 1990, regarding each demonstration project carried out under
this section. Such reports shall include analyses and evaluations of
the provision and redistribution of agricultural commodities and food
products under the demonstration projects. In addition, the Secretary
shall include in the final report any recommendations regarding
improvements in the provision and redistribution of agricultural
commodities and food products to community food banks and the
feasibility of expanding such method of provisions and redistribution of
agricultural commodities and food products to other community food
banks.
Section 18 of the National School Lunch Act (42 U.S.C. 1769) is
amended by adding at the end the following new subsection:
"(e)(1) Upon request to the Secretary, any school district that on
January 1, 1987, was receiving all cash payments or all commodity
letters of credit in lieu of entitlement commodities for its school
lunch program shall receive all cash payments or all commodity letters
of credit in lieu of entitlement commodities for its school lunch
program for the duration beginning July 1, 1987, and ending December 31,
1990.
"(2) Any school district that elects under paragraph (1) to
receive all cash payments or all commodity letters of credit in
lieu of entitlement commodities for its school lunch program shall
receive bonus commodities in the same manner as if such school
district was receiving all entitlement commodities for its school
lunch program.".
PROGRAMS.
Section 1114(a)(2)(A) of the Agriculture and Food Act of 1981 (7
U.S.C. 1431e(a)(2)(A)) is amended by striking out "June 30, 1987," and
inserting in lieu thereof "September 30, 1990,".
CONGRESS.
(a) ASSESSMENT. -- The Comptroller General of the United States
shall monitor and assess the implementation by the Secretary of the
provisions of this Act.
(b) REPORT. -- Before the expiration of the 18-month period
beginning on the date of the enactment of this Act, the Comptroller
General shall submit to the Committee on Education and Labor and the
Committee on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of the Senate a report
of the findings of the assessment conducted as required by subsection
(a).
(a) IN GENERAL. -- Section 17(h) of the Child Nutrition Act of 1966
(42 U.S.C. 1786(h)) is amended by adding at the end thereof the
following new paragraph:
"(5)(A) In addition to the amounts otherwise made available
under paragraphs (1) and (2), each State agency may convert funds
initially allocated to the State agency for program food purchases
to nutrition services and administration funds for the cost of the
State agency and local agencies associated with increases in the
number of persons served, if the State agency has implemented a
competitive bidding, rebate, direct distribution, or home delivery
system as described in its approved plan of operation and
Administration.
"(B) The Secretary shall --
"(i) project each such State agency's level of participation
for the fiscal year, excluding anticipated increases due to use
during the fiscal year of any of the cost-saving strategies
identified in subparagraph (A) of this paragraph; and
"(ii) compute, with an adjustment for the anticipated effects
of inflation, each such State agency's average administrative
grant per participant for the preceding fiscal year.
"(C) Each such State agency may convert funds at a rate equal
to the amount established by the Secretary under subparagraph
(B)(ii) of this paragraph for each food package distributed to
each additional participant above the participation level
projected by the Secretary under subparagraph (B)(i) of this
paragraph, up to the level of increased participation estimated in
its approved Plan of Operation and Administration.".
(b) STATE PLAN OR PLAN AMENDMENT. -- Section 17(f) of the Child
Nutrition Act of 1966 (42 U.S.C. 1786(f) is amended by, in paragraph
(1)(C) --
(1) striking out "and" at the end of clause (vii);
(2) redesignating clause (viii) as clause (ix); and
(3) adding the following new clause:
"(viii) if the State agency chooses to request the funds
conversion authority established in clause (h)(5) of this section,
an estimate of the increased participation which will result from
its cost-saving initiative, including an explanation of how the
estimate was developed; and".
(c) STUDY OF NUTRITION SERVICES AND ADMINISTRATION FUNDING. -- The
Secretary shall conduct a study of the appropriateness of the percentage
of the annual appropriation for the program required by paragraph (h)(1)
of this section "42 USC 1786 note." to be made available for State and
local agency costs for nutrition services and administration, and shall
report the results of this study to the Congress not later than March 1,
1989. Such study shall include an analysis of the impact in future
years on per participant administrative costs if a substantial number of
States implement competitive bidding, rebate, direct distribution, or
home delivery systems and shall examine the impact of the percentage
provided for nutrition services and administration on the quality of
such services.
(d) EFFECTIVE DATE. -- The amendment made by subsections (a), (b),
and (c) shall take effect October 1, 1987.
COUNSELING.
Section 17(f)(1)(C)(iii) of the Child Nutrition Act of 1966 (42
U.S.C. 1786(f)(1)(C)(iii) is amended by striking out "and maternal and
child health care programs" and inserting in lieu therof "maternal and
child health care, and medicaid programs".
NEWBORNS FROM WIC PROGRAM.
(a) STUDY. -- The Secretary of Agriculture in consultation with the
Secretary of Health and Human Services shall conduct a national study of
savings in the amount of assistance provided to families with newborns
under State plans for medical assistance approved under title XIX of the
Social Security Act (42 U.S.C. 1396 et seq.) and State indigent health
care programs, during the first 60-day period after birth, as the result
of the participation of mothers of newborns before birth in the special
supplemental food program authorized under section 17 of the Child
Nutrition Act of 1966 (42 U.S.C. 1786).
(b) REPORT. -- Not later than February 1, 1990, the Secretary shall
submit to Congress a report that describes the results of the study
conducted under subsection (a).
(c) FUNDING. -- This section shall be carried out using funds made
available under section 17(g)(3) of the Child Nutrition Act of 1966.
Section 17(f) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(f))
is amended by adding at the end thereof the following new paragraph:
"(16) To be eligible to participate in the program authorized
by this section, a manufacturer of infant formula that supplies
formula for the program shall --
"(A) register with the Secretary of Health and Human Services
under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321 et
seq.); and
"(B) before bidding for a State contract to supply infant
formula for the program, certify with the State health department
that the formula complies with such Act and regulations issued
pursuant to such Act.".
PROGRAM.
Section 17(i)(3) of the Child Nutrition Act of 1966 (42 U.S.C.
1786(i)(3)) is amended --
(1) in subparagraph (A) --
(A) by inserting "and subject to subparagraphs (B) and (C)"
after "paragraph (2)"; and
(B) by striking out "or" at the end of clause (i) and inserting
in lieu thereof "and"; and
(2) by adding at the end thereof the following new
subparagraph:
"(C) The total amount of funds transferred from any fiscal year
under clauses (i) and (ii) of subparagraph (A) shall not exceed 1
percent of the amount of the funds allocated to a State agency for
such fiscal year.".
For purposes of this Act:
(1) The term "donated commodities" means agricultural
commodities and their products that are donated by the Secretary
to recipient agencies.
(2) The term "entitlement commodities" means agric ltural
commodities and their products that are donated and charged by the
Secretary against entitlements established under programs
authorized by statute to receive such commodities.
(3) The term "recipient agency" means --
(A) a school, school food service authority, or other agnecy
authorized under the National School Lunch Act or the Child
Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) to operate
breakfast programs, lunch programs, child care food programs,
summer food service programs, or similar programs and to receive
donations of agricultural commodities and their products acquired
by the Secretary through price support, surplus removal, or direct
purchase;
(B) a nutrition program for the elderly authorized under title
III of the Older Americans Act of 1965 (42 U.S.C. 3021 et seq.) to
receive donations of agricultural commodities and their products
acquired by the Secretary through price support, surplus removal,
or direct purchase;
(C) an agency or organization distributing commodities under
the commodity supplemental food program established in section 4
of the Agriculture and Consumer Protection Act of 1973 (7 U.S.C.
612c note);
(D) any charitable institution, summer camp, or assistance
agency for the food distribution program on Indian reservations
authorized under section 4 of the Agriculture and Consumer
Protection Act of 1973 (7 U.S.C. 612c note) to receive donations
of agricultural commodities and their products acquired by the
Secretary through price support, surplus removal, or direct
purchase; or
(E) an agency or organization distributing commodities under a
program established in section 202 of the Temporary Emergency Food
Assistance Act of 1983 7 U.S.C. 612c note).
(4) The term "State distribution agency" means a State agency
responsible for the intrastate distribution of donated
commodities.
(5) The term "Secretary" means Secretary of Agriculture, unless
the context specifies otherwise.
Except as otherwise provided in this Act, this Act and the amendments
made by this Act shall take effect on the date of the enactment of this
act.
Approved January 8, 1988.
LEGISLATIVE HISTORY -- H.R. 1340 (S. 305):
HOUSE REPORTS: No. 100-216, Pt. 1 (Comm. on Agriculture) and Pt. 2
(Comm. on Education and Labor).
SENATE REPORTS: No. 100-127 accompanying S. 305 (Comm. on
Agriculture, Nutrition, and Forestry).
CONGRESSIONAL RECORD, Vol. 133 (1987): Aug. 3, considered and passed
House. Aug. 5, considered and passed Senate, amended, in lieu of S.
305. Dec. 17, House concurred in Senate amendment with amendment. Dec.
19, Senate concurred in House amendment.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 24 (1988): Jan.
8, Presidential statement.
Public Law 100-236, 101 Stat. 1731
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
Section 2112(a) of title 28, United States Code, is amended by
striking out the last three sentences and inserting in lieu thereof the
following: "If proceedings are instituted in two or more courts of
appeals with respect to the same order, the following shall apply:
"(1) If within ten days after issuance of the order the agency,
board, commission, or officer concerned receives, from the persons
instituting the proceedings, the petition for review with respect
to proceedings in at least two courts of appeals, the agency,
board, commission, or officer shall proceed in accordance with
paragraph (3) of this subsection. If within ten days after the
issuance of the order the agency, board, commission, or officer
concerned receives, from the persons instituting the proceedings,
the petition for review with respect to proceedings in only one
court of appeals, the agency, board, commission, or officer shall
file the record in that court notwithstanding the institution in
any other court of appeals of proceedings for review of that
order. In all other cases in which proceedings have been
instituted in two or more courts of appeals with respect to the
same order, the agency, board, commission, or officer concerned
shall file the record in the court in which proceedings with
respect to the order were first instituted.
"(2) For purposes of paragraph (1) of this subsection, a copy
of the petition or other pleading which institutes proceedings in
a court of appeals and which is stamped by the court with the date
of filing shall constitute the petition for review. Each agency,
board, commission, or officer, as the case may be, shall designate
by rule the office and the officer who must receive petitions for
review under paragraph (1).
"(3) If an agency, board, commission, or officer receives two
or more petitions for review of an order in accordance with the
first sentence of paragraph (1) of this subsection, the agency,
board, commission, or officer shall, promptly after the expiration
of the ten-day period specified in that sentence, so notify the
judicial panel on multidistrict litigation authorized by section
1407 of this title, in such form as that panel shall prescribe.
The judicial panel on multidistrict litigation shall, by means of
random selection, designate one court of appeals, from among the
courts of appeals in which petitions for review have been filed
and received within the ten-day period specified in the first
sentence of paragraph (1), in which the record is to be filed, and
shall issue an order consolidating the petitions for review in
that court of appeals. The judicial panel on multidistrict
litigation shall, after providing notice to the public and an
opportunity for the submission of comments, prescribe rules with
respect to the consolidation of proceedings under this paragraph.
The agency, board, commission, or officer concerned shall file the
record in the court of appeals designated pursuant to this
paragraph.
"(4) Any court of appeals in which proceedings with respect to
an order of an agency, board, commission, or officer have been
instituted may, to the extent authorized by law, stay the
effective date of the order. Any such stay may thereafter be
modified, revoked, or extended by a court of appeals designated
pursuant to paragraph (3) with respect to that order or by any
other court of appeals to which the proceedings are transferred.
"(5) All courts in which proceedings are instituted with
respect to the same order, other than the court in which the
record is filed pursuant to this subsection, shall transfer those
proceedings to the court in which the record is so filed. For the
convenience of the parties in the interest of justice, the court
in which the record is filed may thereafter transfer all the
proceedings with respect to that order to any other court of
appeals.".
Section 509(b) of the Federal Water Pollution Control Act (33 U.S.C.
1369(b)) is amended by strking out paragraph (3) and redesignating
paragraph (4) as paragraph (3).
The amendments made by this Act take effect 180 days after the date
of the enactment of this Act, except that the judicial panel on
multidistrict litigation may issue rules pursuant to subsection (a)(3)
of section 2112 of title 28, United States Code (as added by section 1),
on or after such date of enactment.
Approved January 8, 1988.
LEGISLATIVE HISTORY -- H.R. 1162 (S. 1134):
HOUSE REPORTS: No. 100-72 (Comm. on the Judiciary).
SENATE REPORTS: No. 100-263 accompanying S. 1134 (Comm. on the
Judiciary).
CONGRESSIONAL RECORD, Vol. 133 (1987): May 27, considered and passed
House. Dec. 19, considered and passed Senate.
Public Law 100-235, 101 Stat. 1724
Be it enacted by the Senate and House of Representatives of the
United States of America In Congress assembled,
This Act may be cited as the Computer Security Act of 1987".
(a) IN GENERAL. -- The Congress declares that improving the security
and privacy of sensitive information in Federal computer systems is in
the public interest, and hereby creates a means for establishing a
minimum acceptable security practices for such systems, without limiting
the scope of security measures already planned or in use.
(b) SPECIFIC PURPOSES. -- The purposes of this Act are --
(1) by amending the Act of March 3, 1901, to assign to the
National Bureau of Standards responsibility for developing
standards and guidelines for Federal computer systems, including
responsibility for developing standards and guidelines needed to
assure the cost-effective security and privacy of sensitive
information in Federal computer systems, drawing on the technical
advice and assistance (including work products) of the National
Security Agency, where appropriate;
(2) to provide for promulgation of such standards and
guidelines by amending section 111(d) of the Federal Property and
Administrative Services Act of 1949;
(3) to require establishment of security plans by all operators
of Federal computer systems that contain sensitive information;
and
(4) to require mandatory periodic training for all persons
involved in management, use, or operation of Federal computer
systems that contain sensitive information.
The Act of March 3, 1901 (15 U.S.C. 271-278h), is amended --
(1) in section 2(f), "15 USC 272." by striking out "and" at the
end of paragraph (18), by striking out the period at the end of
paragraph (19) and inserting in lieu thereof: ";and", and by
inserting after such paragraph the following:
"(20) the study of computer systems (as that term is defined in
section 20(d) "15 USC 278h." of this Act) and their use to control
machinery and processes.";
(2) by redesignating section 20 as section 22, and by inserting
after section 19 the following new sections:
"sec. 20. (a) "15 USC 278g-3" The National Bureau of Standards
shall --
"(1) have the mission of developing standards, guidelines, and
associated methods and techniques for computer systems;
"(2) except as described in paragraph (3) of this subsection
(relating to security standards), develop uniform standards and
guidelines for Federal computer systems, except those systems
excluded by section 2315 of title 10, United States Code, or
section 3502(2) of title 44, United States Code;
"(3) have responsibility within the Federal Government for
developing technical, management, physical, and administrative
standards and guidelines for the cost-effective security and
privacy of sensitive information in Federal computer systems
except --
"(A) those systems excluded by section 2315 of title 10, United
States Code, or section 3502(2) of title 44, United States Code;
and
"(B) those systems which are protected at all times by
procedures established for information which has been specifically
authorized under criteria established by an Executive order or an
Act of Congress to be kept secret in the interest of national
defense or foreign policy,
the primary purpose of which standards and guidelines shall be
to control loss and unauthorized modification or disclosure of
sensitive information in such systems and to prevent
computer-related fraud and misuse;
"(4) submit standards and guidelines developed pursuant to
paragraphs (2) and (3) of this subsection, along with
recommendations as to the extent to which these should be made
compulsory and binding, to the Secretary of Commerce for
promulgation under section 111(d) of the Federal Property and
Administrative Services Act of 1949;
"(5) develop guidelines for use by operators of Federal
computer systems that contain sensitive information in training
their employees in security awareness and accepted security
practice, as required by section 5 of the Computer Security Act of
1987; and
"(6) develop validation procedures for, and evaluate the
effectiveness of, standards and guidelines developed pursuant to
paragraphs (1), (2), and (3) of this subsection through research
and liaison with other government and private agencies.
"(b) In fulfilling subsection (a) of this section, the National
Bureau of Standards is authorized --
"(1) to assist the private sector, upon request, in using and
applying the results of the programs and activities under this
section;
"(2) to make recommendations, as appropriate, to the
Administrator of General Services on policies and regulations
proposed pursuant to section 111(d) of the Federal Property and
Administrative Services Act of 1949;
"(3) as requested, to provide to operators of Federal computer
systems technical assistance in implementing the standards and
guidelines promulgated pursuant to section 111(d) of the Federal
Property and Administrative Services Act of 1949;
"(4) to assist, as appropriate, the Office of Personnel
Management in developing regulations pertaining to training, as
required by section 5 of the Computer Security Act of 1987;
"(5) to perform research and to conduct studies, as needed, to
determine the nature and extent of the vulnerabilities of, and to
devise techniques for the cost-effective security and privacy of
sensitive information in Federal computer systems; and
"(6) to coordinate closely with other agencies and offices
(including, but not limited to, the Departments of Defense and
Energy, the National Security Agency, the General Accounting
Office, the Office of Technology Assessment, and the Office of
Management and Budget) --
"(A) to assure maximum use of all existing and planned
programs, materials, studies, and reports relating to computer
systems security and privacy, in order to avoid unnecessary and
costly duplication of effort; and
"(B) to assure, to the maximum extent feasible, that standards
developed pursuant to subsection (a) (3) and (5) are consistent
and compatible with standards and procedures developed for the
protection of information in Federal computer systems which is
authorized under criteria established by Executive order or an Act
of Congress to be kept secret in the interest of national defense
or foreign policy.
"(c) For the purposes of --
"(1) developing standards and guidelines for the protection of
sensitive information in Federal computer systems under
subsections (a)(1) and (a)(3), and
"(2) performiwg research and conducting studies unde subsection
(b)(5),
the National Bureau of Standards shall draw upon computer system
technical security guidelines developed by the National Security Agency
to the extent that the National Bureau of Standards determines that such
guidelines are consistent with the requirements for protecting sensitive
information in Federal computer systems.
"(d) As used in this section --
"(1) the term 'computer system' --
"(A) means any equipment or interconnected system or subsystems
of equipment that is used in the automatic acquisition, storage,
manipulation, management, movement, control, display, switching,
interchange, transmission, or reception, of data or information;
and
"(B) includes --
"(i) computers;
"(ii) ancillary equipment;
"(iii) software, firmware, and similar procedures;
"(iv) services, including support services; and
"(v) related resources as defined by regulations issued by the
Administrator for General Services pursuant to section 111 of the
Federal Property and Administrative Services Act of 1949;
"(2) the term 'Federal computer system' --
"(A) means a computer system operated by a Federal agency or by
a contractor of a Federal agency or other organization that
processes information (using a computer system) on behalf of the
Federal Government to accomplish a Federal function; and
"(B) includes automatic data processing equipment as that term
is defined in section 111(a)(2) of the Federal Property and
Administrative Services Act of 1949;
"(3) the term 'operator of a Federal computer system' means a
Federal agency, contractor of a Federal agency, or other
organization that processes information using a computer system on
behalf of the Federal Government to accomplish a Federal function;
"(4) the term 'sensitive information' means any information,
the loss, misuse, or unauthorized access to or modification of
which could adversely affect the national interest or the conduct
of Federal programs, or the privacy to which individuals are
entitled under section 552a of title 5, United States Code (the
Privacy Act), but which has not been specifically authorized under
criteria established by an Executive order or an Act of Congress
to be kept secret in the interest of national defense or foreign
policy; and
"(5) the term 'Federal agency' has the meaning given such term
by section 3(b) "15 USC 278g-4." of the Federal Property and
Administrative Services Act of 1949.
"SEC. 21. (a) There is hereby established a Computer System Security
and Privacy Advisory Board within the Department of Commerce. The
Secretary of Commerce shall appoint the chairman of the Board. The
Board shall be composed of twelve additional members appointed by the
Secretary of Commerce as follows:
"(1) four members from outside the Federal Government who are
eminent in the computer or telecommunications industry, at least
one of whom is representative of small or medium sized companies
in such industries;
"(2) four members from outside the Federal Government who are
eminent in the fields of computer or telecommunications
technology, or related disciplines, but who are not employed by or
representative of a producer of computer or telecommunications
equipment; and
"(3) four members from the Federal Government who have computer
systems management experience, including experience in computer
systems security and privacy, at least one of whom shall be from
the National Security Agency.
"(b) The duties of the Board shall be --
"(1) to identify emerging managerial, technical,
administrative, and physical safeguard issues relative to computer
systems security and privacy;
"(2) to advise the Bureau of Standards and the Secretary of
Commerce on security and privacy issues pertaining to Federal
computer systems; and
"(3) to report its findings to the Secretary of Commerce, the
Director of the Office of Management and Budget, the Director of
the National Security Agency, and the appropriate committees of
the Congress.
"(c) The term of office of each member of the Board shall be four
years, except that --
"(1) of the initial members, three shall be appointed for terms
of one year, three shall be appointed for terms of two years,
three shall be appointed for terms of three years, and three shall
be appointed for terms of four years; and
"(2) any member appointed to fill a vacancy in the Board shall
serve for the remainder of the term for which his predecessor was
appointed.
"(d) The Board shall not act in the absence of a quorum, which shall
consist of seven members.
"(e) Members of the Board, other than full-time employees of the
Federal Government, while attending meetings of such committees or while
otherwise performing duties at the request of the Board Chairman while
away from their homes or a regular place of business, may be allowed
travel expenses in accordance with subchapter I of chapter 57 of title
5, United States Code.
"(f) To provide the staff services necessary to assist the Board in
carrying out its functions, the Board may utilize personnel from the
National Bureau of Standards or any other agency of the Federal
Government with the consent of the head of the agency.
"(g) As used in this section, the terms 'computer system' and
'Federal computer system' have the meanings given in section 20(d) of
this Act."; and
(3) by adding at the end thereof the following new section:
"SEC. 23. "15 USC 271 note." This Act may be cited as the National
Bureau of Standards Act.".
Section 111(d) of the Federal Property and Administrative Services
Act of 1949 (40 U.S.C. 759(d)) is amended to read as follows:
"(d)(1) The Secretary of Commerce shall, on the basis of
standards and guidelines developed by the National Bureau of
Standards pursuant to section 20(a)(2) and (3) of the National
Bureau of Standards Act, promulgate standards and guidelines
pertaining to Federal computer systems, making such standards
compulsory and binding to the extent to which the Secretary
determines necessary to improve the efficiency of operation or
security and privacy of Federal computer systems. The President
may disapprove or modify such standards and guidelines if he
determines such action to be in the public interest. The
President's authority to disapprove or modify such standards and
guidelines may not be delegated. Notice of such disapproval or
modification shall be submitted promptly to the Committee on
Government Operations of the House of Representatives and the
Committee on Governmental Affairs of the Senate and shall be
published promptly in the Federal Register. Upon receiving notice
of such disapproval or modification, the Secretary of Commerce
shall immediately rescind or modify such standards or guidelines
as directed by the President.
"(2) The head of a Federal agency may employ standards for the
cost-effective security and privacy of sensitive information in a
Federal computer system within or under the supervision of that
agency that are more stringent that the standards promulgated by
the Secretary of Commerce, if such standards contain, at a
minimum, the provisions of those applicable standards made
compulsory and binding by the Secretary of Commerce.
"(3) The standards determined to be compulsory and binding may
be waived by the Secretary of Commerce in writing upon a
determination that compliance would adversely affect the
accomplishment of the mission of an operator of a Federal computer
system, or cause a major adverse financial impact on the operator
which is not offset by Government-wide savings. The Secretary may
delegate to the head of one or more Federal agencies authority to
waive such standards to the extent to which the Secretary
determines such action to be necessary and desirable to allow for
timely and effective implementation of Federal computer systems
standards. The head of such agency may redelegate such authority
only to a senior official designated pursuant to section 3506(b)
of title 44, United States Code. Notice of each such waiver and
delegation shall be transmitted promptly to the Committee on
Government Operations of the House of Representatives and the
Committee on Governmental Affairs of the Senate and shall be
published promptly in the Federal Register.
"(4) The Administrator shall revise the Federal information
resources management regulations (41 CFR ch. 201) to be consistent
with the standards and guidelines promulgated by the Secretary of
Commerce under this subsection.
"(5) As used in this subsection, the terms 'Federal computer
system' and 'operator of a Federal computer system' have the
meanings given in section 20(d) of the National Bureau of
Standards Act.".
SECURITY TRAINING.
(a) IN GENERAL. -- Each Federal agency shall provide for the
mandatory periodic training in computer security awareness and accepted
computer security practice of all employees who are involved with the
management, use, or operation of each Federal computer system within or
under the supervision of that agency. Such training shall be --
(1) provided in accordance with the guidelines developed
pursuant to section 20(a)(5) of the National Bureau of Standards
Act (as added by section 3 of this Act), and in accordance with
the regulations issued under subsection (c) of this section for
Federal civilian employees; or
(2) provided by an alternative training program approved by the
head of that agency on the basis of a determination that the
alternative training program is at least as effective in
accomplishing the objectives of such guidelines and regulations.
(b) TRAINING OBJECTIVES. -- Training under this section shall be
started within 60 days after the issuance of the regulations described
in subsection (c). Such training shall be designed --
(1) to enhance employees' awareness of the threats to and
vulnerability of computer systems; and
(2) to encourage the use of improved computer security
practices.
(c) REGULATIONS. -- Within six months after the date of enactment of
this Act, the Director of the Office of Personnel Management shall issue
regulations prescribing the procedures and scope of the training to be
provided Federal civilian employees under subsection (a) and the manner
in which such training is to be carried out.
FOR COMPUTER SYSTEMS SECURITY AND PRIVACY.
(a) IDENTIFICATION OF SYSTMES THAT CONTAIN SENSITIVE INFORMATION. --
Within 6 months after the date of enactment of this Act, each Federal
agency shall identify each Federal computer system, and system under
development, which is within or under the supervision of that agency and
which contains sensitive information.
(b) SECURITY PLAN. -- Within one year after the date of enactment of
this Act, each such agency shall, consistent with the standards,
guidelines, policies, and regulations prescribed pursuant to section
111(d) of the Federal Property and Administrative Services Act of 1949,
establish a plan for the security and privacy of each Federal computer
system identified by that agency pursuant to subsection (a) that is
commensurate with the risk and magnitude of the harm resulting from the
loss, misuse, or unauthorized access to or modification of the
information contained in such system. Copies of each such plan shall be
transmitted to the National Bureau of Standards and the National
Security Agency for advice and comment. A summary of such plan shall be
included in the Agency's five-year plan required by section 3505 of
title 44, United States Code. Such plan shall be subject to disapproval
by the Director of the Office of Management and Budget. Such plan shall
be revised annually as necessary.
As used in this Act, the terms "computer system", Federal computer
system", "operator of a Federal computer system", "sensitive
information", and "Federal agency" have the meanings given in section
20(d) of the National Bureau of Standards Act (as added by section 3 of
this Act).
Nothing in this Act, or in any amendment made by this Act, shall be
construed --
(1) to constitute authority to withhold information sought
pursuant to section 552 of title 5, United States Code; or
(2) to authorize any Federal agency to limit, restrict,
regulate, or control the collection, maintenance, disclosure, use,
transfer, or sale of any information (regardless of the medium in
which the information may be maintained) that is --
(A) privately-owned information;
(B) disclosable under section 552 of title 5, United States
Code, or other law requiring or authorizing the public disclosure
of information; or
(C) public domain information
Approved January 8, 1988.
LEGISLATIVE HISTORY -- H.R. 145:
HOUSE REPORTS: No. 100-153, Pt. 1 (Comm. on Science, Space, and
Technology and Pt. 2 (Comm. on Government Operations).
CONGRESSIONAL RECORD, Vol. 133 (1987): June 22, considered and
passed House. Dec. 21, considered and passed Senate.
Public Law 100-234, 101 Stat. 1719
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
(a) That this Act may be referred to as the "notice to "lessees
Numbered 5 Gas Royalty Act of 1987".
(b) FINDINGS. -- The Congress finds that --
(1) effective on June 1, 1977, in Notice to Lessees and
Operators of Federal and Indian Onshore Oil and Gas Leases
Numbered 5 (NTL-5) (42 Fed. Reg. 22,610), the Secretary of the
Interior established the method of calculating the amount of
royalties to be paid to the United States on natural gas
production from Federal and Indian oil and gas leases.
(2) NTL-5 was a duly promulgated rule of the Department of the
Interior within the meaning of the Administrative Procedure Act;
(3) under the NTL-5 method of calculation, the base value for
royalty purposes of certain gas production was the greater of the
price received under the gas sales contract or the highest
applicable ceiling rate then established by the Federal Power
Commission. The applicable ceiling rate was subsequently
interpreted to be the maximum lawful price established under the
Natural Gas Policy Act of 1978 (15 U.S.C. 3301 et seq.);
(4) although between 1982 and 1986 gas prices in many areas
declined below the maximum lawful prices established under the
Natural Gas Policy Act of 1978, the continued application of NTL-5
required some royalties to be paid on the basis of a ceiling rate
higher than the market value for the gas;
(5) effective August 1, 1986, the Secretary of the Interior
modified the method of calculating certain future Federal and
Indian gas royalty payments. This modification, published in the
Federal Register on July 25, 1986 51 Fed. Reg. 26,759) was a duly
promulgated regulation of the Department of the Interior. The
modification left the original provisions of NTL-5 in effect for
gas sales prior to August 1, 1986, since the Secretary found that
retroactive modification of NTL-5 would have resulted in
inconsistent royalty enforcement and would have undermined the
policy of strict compliance with lawful Federal royalty valuation
rules and the need to ensure that Federal lessees and other payors
rely upon rules until such time as the rules are lawfully changed
(51 Fed. Reg. 26,759);
(6) in Jaunuary 1987, the Department of the Interior proposed
to reconsider its position and proposed to modify NTL-5
retroactively;
(7) there is a trust responsibility of the United States for
the administration of Indian oil and gas resources as reaffirmed
in sections 2 (a)(4) and (b)(4) of the Federal Oil and Gas Royalty
Management Act of 1982 (30 U.S.C. 1701 (a)(4) and (b)(4)); and
(8) the failure to adjust the method of calculating royalty
payments resulting from changes in the gas market created various
problems in valuation, produced inequitable situations for many
lessees and payors whose gas market price was well below the
National Gas Policy Act ceiling prices, and created uncertainty
associated with the collection of royalty revenues. Uniform
application of National Gas Policy Act ceiling prices was
inequitable given market conditions during this period. For these
reasons, it is necessary and appropriate for the Congress to
provide for certain adjustments through legislation.
For purposes of this Act:
(a) SECRETARY. -- The term "Secretary" means the Secretary of the
Interior or his designee.
(b) NTL-5. -- The term "NTL-5" means the Notice to Lessees and
Operators of Federal and Indian Onshore Oil and Gas Leases published May
4, 1977 (42 Fed. Reg. 22,610).
(c) OTHER TERMS. -- All other terms carry the same meanings as
provided in section 3 of the Federal Oil and Gas Royalty Management Act
of 1982 (30 U.S.C. Sec. 1702).
PRODUCTION FROM FEDERAL AND INDIAN LANDS.
(a) Applicability. -- The provisions of this section shall be used
in determining the value for royalty purposes of any gas production from
Federal onshore or Indian oil and gas leases during the period from
January 1, 1982, through July 31, 1986, which is within the coverage of
section I.A.2, section II.A.2 of section VI of NTL-5.
(b) ROYALTY CALCULATION FOR CERTAIN FEDERAL ONSHORE AND INDIAN OIL
AND GAS LEASES. -- If the gas referred to in subsection (a) of this
section was produced from a Federal onshore or Indian lease, the value
of production, for the purpose of computing royalty, shall be the
reasonable value of the product as determined consistent with the lease
terms and the regulations codified at part 206 of title 30, Code of
Federal Regulations, in effect at the time of production. In
establishing the reasonable value, due consideration shall be given to
the highest price paid for a part or for a majority of production of
like quality in the same field, to the price received by the lessee, to
posted prices, and to other relevant matters. Under no circumstances
shall the value of production of any of said substances for the purposes
of computing royalty be deemed to be less than the gross proceeds
accruing to the lessee from the sale thereof or less than the value
computed on such reasonable unit value as shall have been determined by
the Secretary. In the absence of good reason to the contrary, value
computed on the basis of the highest price per thousand cubic feet or
gallon paid or offered at the time of production in a fair and open
market for the major portion of like-quality gas, or other products
produced and sold from the field or areas where the leased lands are
situated will be considered to be a reasonable value. In addition, if
the gas was produced from an Indian lease, the reasonable value shall be
determined consistent with the Secretary's trust responsibility, the
lease terms, and the regulations codified at section 211.13 or section
212.16 of title 25, Code of Federal Regulations, as applicable, in
effect at the time of production.
(c) Written Documentation. -- In order for the Secretary to make
royalty value determinations under this section, there must be written
documentation which (1) has been determined to be adequate by the
Secretary, (2) was in existence at or near the time of sale, (3) shows
the actual price received, and (4) may include, but is not limited to, a
gas sales contract, purchase statement, receipt, minerals management
service oil and gas records, or other written documentation.
(d) EXCEPTION. -- This section shall not apply to any gas for which,
in the Secretary's judgment, the lessee or royalty payor received less
than the highest applicable price under the Natural Gas Policy Act due
to a failure by the lessee or payor to collect amounts which the
purchaser would have been required to pay under a gas sales contract
providing for that price and not as a result of market conditions or
considerations.
(a) CASE-BY-CASE AUDIT FOR CERTAIN FEDERAL ONSHORE OIL AND GAS
LEASES. -- The Secretary shall publish in the Federal Register and send
to each lessee or royalty payor of record for any Federal onshore oil
and gas lease a notice of enactment of this Act informing such lessees
and royalty payors of the provisions of this Act. Such notice shall
include a description of the process whereby underpayments, if any, by
lessees will be sought and the terms and conditions for lessees to
obtaining refunds, if any, based on royalty calculations under this Act.
Any lessee that has reason to believe that it is entitled to a refund
under this Act shall provide written notice to the Secretary in a form
prescribed by the Secretary specifying the Federal onshore oil and gas
lease or leases involved. The Secretary, and any State in accordance
with delegations of authority under section 205 or cooperative
agreements under section 202 of the Federal Oil and Gas Royalty
Management Act of 1982 (30 U.S.C. 1732, 1735), shall conduct a
case-by-case audit of royalties for such leases and any other Federal
onshore lease which is examined under existing law to determine the
amount of royalties due and payable under this Act and other applicable
law and the amount of any refund due a lessee. In additiion to those
leases for which the lessee has provided written notice to the Secretary
pursuant to this subsection, priority shall be given to auditing those
leases for which there is the greatest likelihood of underpayment of
royalties.
(b) CASE-BY-CASE AUDIT ON INDIAN LEASES. -- The Secretary shall
publish in the Federal Register and send to each lessee or royalty payor
of record for any Indian oil and gas lease a notice of enactment of this
Act informing such lessees and royalty payors of the provisions of this
Act. Such notice shall include a description of the process whereby
underpayments, if any, by lessees will be sought and the terms and
conditions for lessees to obtain refunds, if any, based on royalty
calculations under this act. Any lessee that has reason to believe that
it is entitled to a refund under this Act shall provide written notice
to the Secretary in a form prescribed by the Secretary specifying the
Indian oil and gas lease or leases involved. The Secretary, and any
Tribe in accordance with cooperative agreements under section 202 of the
Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1732),
shall conduct a case-by-case audit of royalties for such leases and
other Indian oil and gas leases on which gas was produced at any time
during the period from January 1, 1982, through July 31, 1986, which is
within the coverage of section I.A.2, section II.A.2, or section VI of
NTL-5 to determine the amount of royalties due and payable under this
Act and other applicable law and the amount of any refund due a lessee.
In addition to those leases for which the lessee has provided written
notice to the Secretary pursuant to this subsection, priority shall be
given to auditing those leases for which there is the greatest
likelihood of underpayment of royalties.
(c) The Secretary shall demand payment of any underpayment which is
determined to be owed to the Federal or Indian lessor as a result of the
case-by-case review required in this section.
(d) MMS NOTICE. -- The Secretary shall provide a notice under this
section to each lessee under a Federal onshore or Indian oil and gas
lease on which an audit was performed in accordance with this section.
The notice shall contain each of the following:
(1) A statement of the amount of the royalty payments made in
accordance with the provisions of NTL-5.
(2) A statement of additional royalty payment, if any, to be
made by a lessee or the amount of refund, if any, to which the
lessee is entitled under this Act and a description of the means
by which such refund will be provided.
(e) REPORT TO INDIAN TRIBES. -- The Secretary shall provide a report
ot each Indian Tribe holding an Indian oil and gas lease on which gas
was produced at any time during the period from January 1, 1982, through
July 31, 1986, which is within the coverage of section I.A.2, Section
II.A.2, or section VI of NTL-5. The report to each Tribe shall contain
information for each such lease held by the Tribe stating the difference
between royalties computed in accordance with NTL-5 and royalties
computed in accordance with subsection 3(b) of this Act.
(a) REFUND FOR FEDERAL ONSHORE OIL AND GAS LEASES. --
(1) If the Secretary or a court of competent jurisdiction
determines that a lessee or royalty payor on a Federal onshore
lease has paid, prior to October 1, 1987, more than the value
determined under subsection 3(b) of this Act for any gas within
the coverage of subsection 3(a) of this Act, the Secretary shall
refund the Federal share of such overpayment from moneys received
under section 35 of the Mineral Lands Leasing Act of 1920, as
amended (30 U.S.C. 191), which would otherwise be deposited to
miscellaneous receipts in the Treasury, in accordance with
procedures established by the Secretary.
(2) The portion of any excess amount, as determined under
paragraph (1), previously paid to a State under applicable law
from royalties paid under a Federal onshore oil and gas lease or
group of leases subject to a unit agreement shall be recouped from
the next subsequent disbursements to that State. If the total
amount of such recoupments for any month exceeds ten per centum of
the total disbursement to that State for that month from mineral
lease revenues, the Secretary shall recoup amounts in excess of
that level from disbursements to the State in the next month
subject to the same limitation. The Secretary shall pay any
difference between the amounts required to be paid to a State as a
result of this paragraph and the amounts available to be paid to
the State from current royalty revenues from moneys received under
section 35 of the Minerals Lands Leasing Act of 1920, as amended
(30 U.S.C. 191), which would otherwise be deposited to
miscellaneous receipts.
(b) Refund For Indian Leases. -- If the Secretary or a court of
competent jurisdiction determines that a lessee or royalty payor has
paid, prior to October 1, 1987, more than the value determined under
subsection 3(b) of this Act for any gas within the coverage of
subsection 3(a) of this Act and produced from an Indian lease, the
Secretary shall refund the amount paid in excess of the value determined
under subsection 3(b) from monies received under section 35 of the
Mineral Lands Leasing Act of 1920, as amended (30 U.S.C. 191) which
would otherwise be deposited to miscellaneous receipts in the Treasury.
The Secretary shall not recoup any portion of any such refund from the
Indian lessor.
(c) The total amount of refunds made under this section shall not
exceed two million dollars ($2,000,000).
Notwithstanding the requirements of section 103 of the Federal Oil
and Gas Royalty Management Act of 1982 (30 U.S.C. 1713), and any
regulations promulgated pursuant thereto, lessees and other payors are
required to maintain records related to the value of gas production to
which this Act applies for the period January 1, 1982 through July 31,
1986, until the Secretary gives notice that maintenance of such records
no longer is required.
Nothing in this Act shall be construed to affect the right of any
Indian, Indian Tribe, or lessee to bring any action in a court of
competent jurisdiction.
Approved January 6, 1988.
LEGISLATIVE HISTORY -- H.R. 3479:
HOUSE REPORTS: No. 100-377 (Comm. on Interior and Insular Affairs).
SENATE REPORTS: No. 100-234 (Comm. on Energy and Natural Resources).
CONGRESSIONAL RECORD, Vol. 133 (1987): Nov. 3, considered and passed
House. Dec. 9, considered and passed Senate, amended. Dec. 18, House
concurred in Senate amendment with amendment and disagreed with other
amendment. Dec. 21, Senate concurred in House amendment and receded
from other amendment.
Public Law 100-233, 101 Stat 1568
Be it enacted by the Senate and House of Representative of the United
States of America in Congress assembled,
(a) SHORT TITLE. -- This Act may be cited as the "Agricultural
Credit Act of 1987".
(b) TABLE OF CONTENTS. -- The table of contents is as follows: "12
USC 2001 note"
Sec. 1. Short title; table of contents.
Sec. 2. References to the Farm Credit Act of 1971.
Sec. 101. Protection of borrower stock.
Sec. 102. Restructuring distressed loans.
Sec. 103. Disclosure by banks and associations.
Sec. 104. Access to documents and information.
Sec. 105. Notice of action on application for loans or
restructuring.
Sec. 106. Reconsideration of actions.
Sec. 107. Protection of borrowers who meet all loan obligations.
Sec. 108. Right of first refusal.
Sec. 109. Differential interest rates.
Sec. 110. Application of uninsured accounts.
Sec. 201. Assistance to Farm Credit System.
"Sec. 6.0. Establishment of Board.
"Sec. 6.1. Purposes.
"Sec. 6.2. Board of Directors.
"Sec. 6.3. Corporate powers.
"Sec. 6.4. Certification of eligibility to issue preferred
stock.
"Sec. 6.5. Assistance.
"Sec. 6.6. Special powers.
"Sec. 6.7. Administration.
"Sec. 6.8. Limitation of powers.
"Sec. 6.9. Succession.
"Sec. 6.10. Effect of regulations; audits.
"Sec. 6.11. Exemption from taxation.
"Sec. 6.12. Termination.
"Sec. 6.13. Transitional provisions.
"Sec. 6.20. Establishment of Corporation.
"Sec. 6.21. Purpose.
"Sec. 6.22. Board of Directors.
"Sec. 6.23. Stock.
"Sec. 6.24. Corporate powers.
"Sec. 6.25. Accounts.
"Sec. 6.26. Debt obligations.
"Sec. 6.27. Preferred stock.
"Sec. 6.28. Payments.
"Sec. 6.29. One-time stock purchase.
"Sec. 6.30. Exemption from taxation.
"Sec. 6.31. Termination.
Sec. 202. Revolving fund.
Sec. 203. Unsafe or unsound practices.
Sec. 204. Federal Farm Credit Banks Funding Corporation.
Sec. 205. Regulatory accounting procedures.
Sec. 206. Financial report.
Sec. 207. Conforming amendments.
Sec. 301. Capitalization of System institutions.
Sec. 302. Insurance of obligations of Farm Credit System.
"Sec. 5.51. Definitions.
"Sec. 5.52. Establishment of Farm Credit System Insurance
Corporation.
"Sec. 5.53. Board of Directors.
"Sec. 5.54. Commencement of insurance.
"Sec. 5.55. Premiums.
"Sec. 5.56. Certification of premiums.
"Sec. 5.57. Overpayment and underpayment of premiums;
remedies.
"Sec. 5.58. General corporate powers.
"Sec. 5.59. Conduct of corporate affairs; examination of
insured System banks.
"Sec. 5.60. Insurance Fund.
"Sec. 5.61. Powers of Corporation with respect to troubled
insured System banks.
"Sec. 5.62. Investment of funds.
"Sec. 5.63. Exemption from taxation.
"Sec. 5.64. Reports.
"Sec. 5.65. Prohibitions.
Sec. 303. Joint and several liability of banks.
Sec. 304. Enhancement of capital adequacy of banks.
Sec. 305. Federal intermediate credit bank assessment power.
Sec. 306. Conservators and receivers.
Sec. 401. Farm Credit Banks and associations charters.
"Sec. 1.3. Establishment, charters, titles, branches.
"Sec. 1.4. Board of directors.
"Sec. 1.5. General corporate powers.
"Sec. 1.6. Farm Credit Bank capitalization.
"Sec. 1.7. Lending authority.
"Sec. 1.8. Interest rates and other charges.
"Sec. 1.9. Eligibility.
"Sec. 1.10. Security; terms.
"Sec. 1.11. Purposes for extensions of credit.
"Sec. 1.12. Related services.
"Sec. 1.13. Loans through associations or agents.
"Sec. 1.14. Liens on stock.
"Sec. 1.15. Taxation.
"Sec. 2.0. Organization and charters.
"Sec. 2.1. Board of directors.
"Sec. 2.2. General corporate powers.
"Sec. 2.3. Production credit association capitalization.
"Sec. 2.4. Short- and intermediate-term loans; participation;
other financial assistance; terms; conditions; interest;
security.
"Sec. 2.5. Other services.
"Sec. 2.6. Taxation.
"Sec. 2.10. Organizations; articles; charters; powers of
the Farm Credit Administration.
"Sec. 2.11. Board of directors.
"Sec. 2.12. General corporate powers.
"Sec. 2.13. Federal land bank association capitalization.
"Sec. 2.14. Liquidation.
"Sec. 2.15. Agreements for sharing gains or losses.
"Sec. 2.16. Liens on stock.
"Sec. 2.17. Taxation.
Sec. 410. Mandatory merger.
Sec. 411. Merger of production credit associations and Federal land
bank associations.
Sec. 412. Consolidation of Farm Credit System districts.
Sec. 413. Voluntary merger of the banks for cooperatives.
Sec. 414. Bank for cooperatives board of directors.
Sec. 415. Organization and operation of the merged bank for
cooperatives.
"Sec. 3.20. Charter, powers, and operation.
"Sec. 3.21. Board of directors provisions.
"Sec. 3.22. Credit delivery office.
"Sec. 3.23. Consolidation of functions.
"Sec. 3.24. Exchange of ownership interests.
"Sec. 3.25. Capitalization.
"Sec. 3.26. Patronage pools.
"Sec. 3.27. Transactions to accomplish the merger.
"Sec. 3.28. Lending limits.
Sec. 416. Merger of System institutions.
"Sec. 7.0. Power to merge.
"Sec. 7.1. Board of Directors for the district.
"Sec. 7.2. Powers of merged banks.
"Sec. 7.3. Capital stock.
"Sec. 7.4. Earnings, reserves, and distributions.
"Sec. 7.5. Reports by merged banks for cooperatives.
"Sec. 7.6. Transfer of lending authority.
"Sec. 7.7. Mergers of unlike associations.
"Sec. 7.8. Merger of associations.
"Sec. 7.9. Reconsideration.
"Sec. 7.10. Termination of System institution status.
"Sec. 7.11. Approval of disclosure information and issuance of
charters.
"Sec. 7.12. Merger of similar banks.
"Sec. 7.13. Merger of similar associations.
Sec. 414. Nondiscrimination.
Sec. 415. Conforming amendments.
Sec. 420. Communications with stockholders.
Sec. 421. Eligibility to borrower from a bank of cooperatives.
Sec. 422. Sales of insurance by System institutions.
Sec. 423. Civil money penalties.
Sec. 424. Limitation on FCA authority to require disclosure of
information.
Sec. 425. Removal of certain sunset provisions; prohibition against
use of signed ballots.
Sec. 426. Federal land bank loan security.
Sec. 427. Affirmative action.
Sec. 428. Encouragement of conservation practices.
Sec. 429. Uniform financial reporting instructions.
Sec. 430. Compensation for directors.
Sec. 431. Farm Credit Administration Board.
Sec. 432. Farm Credit Administration organization.
Sec. 433. Reassignment of associations to adjoining districts.
Sec. 434. Conforming amendment.
Sec. 501. Qualifying States.
Sec. 502. Matching grants to States.
Sec. 503. Participation of Federal agencies.
Sec. 504. Regulations.
Sec. 505. Report.
Sec. 506. Authorization of appropriations.
Sec. 511. Waiver of mediation rights by Farm Credit System
borrowers.
Sec. 512. Waiver of mediation rights by FmHA borrowers.
Sec. 601. Amendment of Consolidated Farm and Rural Development Act.
Sec. 602. Definitions.
Sec. 603. Security for FmHA real estate loans.
Sec. 604. Additional collateral.
Sec. 605. Notice of loan service programs.
Sec. 606. Planting and production history guidelines.
Sec. 607. County committees.
Sec. 608. Administrative appeals.
Sec. 609. Borrowers' right to information.
Sec. 610. Disposition and leasing of farmland.
Sec. 611. Income release.
Sec. 612. Conservation easements.
Sec. 613. Interest rate reduction program; demonstration project
for purchase of System land.
Sec. 614. Homestead protection.
Sec. 615. Debt restructuring and loan servicing.
Sec. 616. Transfer of inventory lands.
Sec. 617. Target participation rates.
Sec. 618. Expedite clearing of title to inventory property.
Sec. 619. Payment of losses on guaranteed loans.
Sec. 620. Lease of certain acquired property.
Sec. 621. Study and report to Congress before issuance of certain
final regulations.
Sec. 622. Continuation of limited resource farmers' initiative.
Sec. 623. Farm ownership outreach program to socially disadvantaged
individuals.
Sec. 624. Regulations.
Sec. 625. Sense of Congress regarding guaranteed loan program.
Sec. 626. Sense of Congress regarding National Rural Crisis Response
Center.
Sec. 701. Statement of purpose.
Sec. 702. Agricultural mortgage secondary market.
"Sec. 8.0. Definitions.
"Sec. 8.1. Federal Agricultrual Mortgage Corporation.
"Sec. 8.2. Board of directors.
"Sec. 8.3. Powers and duties of Corporation and Board.
"Sec. 8.4. Stock issuance.
"Sec. 8.5. Certification of agricultural mortgage marketing
facilities.
"Sec. 8.6. Guarantee of qualified loans.
"Sec. 8.7. Reserves and subordinated participation interests
of certified facilities.
"Sec. 8.8. Standards for qualified loans.
"Sec. 8.9. Exemption from restructuring and borrowers rights
provisions for pooled loans.
"sec. 8.10. Funding for guarantee; reserves of Corporation.
"Sec. 8.11. Supervision, examination, and report of condition.
"Sec. 8.12. Securities in credit enhanced pools.
"Sec. 8.13. Authority to issue obligations to cover guarantee
losses of Corporation.
"Sec. 8.14. Federal jurisdiction.
Sec. 703. GAO audit of Federal Agricultural Mortgage Corporation.
Sec. 704. GAO studies.
Sec. 705. Conforming amendments.
Sec. 711. Improvement of secondary market operations for loans
guaranteed by the Farmers Home Administration.
Sec. 801. Ownership requirement under the conservation reserve
program.
Sec. 802. Repeal of preapproval and related authorities.
Sec. 803. Sale of rural development notes.
Sec. 804. Other conforming amendments.
Sec. 805. Technical amendments.
Sec. 901. Effective dates.
Except as otherwise specifically provided, whenever in this Act
(other than in title VI) and amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other provision
of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.).
Part A of title IV (12 U.S.C. 2151 et seq.) is amended by adding at
the end thereof the following new section:
"(a) RETIREMENT OF STOCK. -- Notwithstanding any other section of
this Act, each institution of the Farm Credit System when retiring
eligible borrower stock in accordance with this Act, shall retire such
stock at par value. Any such institution whose capital stock is
impaired (as determined in accordance with generally accepted accounting
principles) shall coordinate such retirement of stock under this section
with the activities of the Assistance Board and the Financial Assistance
Corporation.
"(b) CERTAIN POWERS NOT AFFECTED. -- This section does not affect
the authority of any institution of the Farm Credit System --
"(1) to retire or cancel borrower stock at par value for
application against a loan in default;
"(2) to cancel borrower stock at par value under section 4.14B;
or
"(3) to apply, against any outstanding indebtedness to a System
association arising out of or in connection with a liquidation
referred to in subsection (d)(2), the par value of borrower stock
frozen in such liquidation.
"(c) INABILITY TO RETIRE AT PAR VALUE. -- If an institution is
unable to retire eligible borrower stock at par value due to the
freezing of such stock during a liquidation of the institution, the
receiver of the institution shall retire such stock at par value as
would have been retired in the ordinary course of business of the
institution and the Financial Assistance Corporation, on request of the
Assistance Board, shall provide the receiver with sufficient funds to
enable the receiver to carry out this subsection.
"(d) DEFINITIONS. -- For purposes of this section:
"(1) BORROWER STOCK. -- The term 'borrower stock' means voting
and nonvoting stock, equivalent contributions to a guaranty fund,
participation certificates, allocated equities, and other similar
equities that are subject to retirement under a revolving cycle
issued by any System institution and held by any person other than
any System institution.
"(2) ELIGIBLE BORROWER STOCK. -- The term 'eligible borrower
stock' means borrower stock that --
"(A) is outstanding on the date of the enactment of this
section;
"(B) is required to be purchased, and is purchased, as a
condition of obtaining a loan made after the date of the enactment
of this section, but prior to the earlier of --
"(i) in the case of each bank and association, the date of
approval, by the stockholders of such bank or association, of the
capitalization requirements of the institution in accordance with
section 4.9B; or
"(ii) the date that is 9 months after the date of the enactment
of this section;
"(C) was, after January 1, 1983, but before the date of the
enactment of this section, frozen by an institution that was
placed in liquidation; or
"(D) was retired at less than par value by an institution that
was placed in liquidation after January 1, 1983, but before the
date of the enactment of this section.
"(3) INSTITUTION. -- The term 'institution' means a bank or
association chartered under this Act.
"(4) PAR VALUE. -- The term 'par value' means --
"(A) in the case of stock, par value;
"(B) in the case of participation certificates and other
equities and interests not described in subparagraph (C), face or
equivalent value; or
"(C) in the case of participation certificates and allocated
equities subject to retirement under a revolving cycle but that a
System institution elects to retire out of order for application
against a loan in default or otherwise as provided in this Act,
par or face value discounted, at a rate determined by the
institution, to reflect the present value of the equity or
interest as of the date of such retirement.".
(a) In General. -- Part C of title IV is amended by inserting after
section 4.14 (12 U.S.C. 2202) the following new sections:
LOANS.
"(a) DEFINITIONS. -- As used in this part (other than in sections
4.17 and 4.18):
"(1) APPLICATION FOR RESTRUCTURING. -- The term 'application
for restructuring' means a written request --
"(A) from a borrower for the restructuring of a distressed loan
in accordance with a preliminary restructuring plan proposed by
the borrower as a part of the application;
"(B) submitted on the appropriate forms prescribed by the
qualified lender; and
"(C) accompanied by sufficient financial information and
repayment projections, where appropriate, as required by the
qualified lender to support a sound credit decision.
"(2) COST OF FORECLOSURE. -- The term 'cost of foreclosure'
includes --
"(A) the difference between the outstanding balance due on a
loan made by a qualified lender and the liquidation value of the
loan, taking into consideration the borrower's repayment capacity
and the liquidation value of the collateral used to secure the
loan;
"(B) the estimated cost of maintaining a loan as a
nonperforming asset;
"(C) the estimated cost of administrative and legal actions
necessary to foreclose a loan and dispose of property acquired as
the result of the foreclosure, including attorneys' fees and court
costs;
"(D) the estimated cost of changes in the value of collateral
used to secure a loan during the period beginning on the date of
the initiation of an action to foreclose or liquidate the loan and
ending on the date of the disposition of the collateral; and
"(E) all other costs incurred as the result of the foreclosure
or liquidation of a loan.
"(3) DISTRESSED LOAN. -- The term 'distressed loan' means a
loan that the borrower does not have the financial capacity to pay
according to its terms and that exhibits one or more of the
following characteristics;
"(A) The borrower is demonstrating adverse financial and
repayment trends.
"(B) The loan is delinquent or past due under the terms of the
loan contract.
"(C) One or both of the factors listed in subparagraphs (A) and
(B), together with inadequate collateralization, present a high
probability of loss to the lender.
"(4) FORECLOSURE PROCEEDING. -- The term 'foreclosure
proceeding' means --
"(A) a foreclosure or similar legal proceeding to enforce a
lien on property, whether real or personal, that secures a
nonaccrual or distressed loan; or
"(B) the seizing of and realizing on nonreal property
collateral, other than collateral subject to a statutory lien
arising under title I or II, to effect collection of a nonaccrual
or distressed loan.
"(5) LOAN. -- The term 'loan' means a loan made to a farmer,
rancher, or producer or harvester of aquatic products, for any
agricultural or aquatic purpose and other credit needs of the
borrower, including financing for basic processing and marketing
directly related to the borrower's operations and those of other
eligible farmers, ranchers, and producers or harvesters of aquatic
products.
"(6) QUALIFIED LENDER. -- The term 'qualified lender' means --
"(A) a System institution that makes loans (as defined in
paragraph (5)) except a bank for cooperatives; and
"(B) each bank, institution, corporation, company, union, and
association described in section 2.3(a)(2) but only with respect
to loans discounted or pledged under section 2.3(a).
"(7) RESTRUCTURE AND RESTRUCTURING. -- The terms 'restructure'
and restructuring' include rescheduling, reamortization, renewal,
deferral of principal or interest, monetary concessions, and the
taking of any other action to modify the terms of, or forbear on,
a loan in any way that will make it probable that the operations
of the borrower will become financially viable.
"(b) NOTICE. --
"(1) IN GENERAL. -- On a determination by a qualified lender
that a loan made by the lender is or has become a distressed loan,
the lender shall provide written notice to the borrower that the
loan may be suitable for restructuring, and include with such
notice --
"(A) a copy of the policy of the lender established under
subsection (g) that governs the treatment of distressed loans;
and
"(B) all materials necessary to enable the borrower to submit
an application for restructuring on the loan.
"(2) NOTICE BEFORE FORECLOSURE. -- Not later than 45 days
before any qualified lender begins foreclosure proceedings with
respect to a loan outstanding to any borrower, the lender shall
notify the borrower that the loan may be suitable for
restructuring and that the lender will review any such suitable
loan for restructuring, and shall include with such notice a copy
of the policy and the materials described in paragraph (1).
"(3) LIMITATION ON FORECLOSURE. -- No qualified lender may
foreclose or continue any foreclosure proceeding with respect to
any distressed loan before the lender has completed any pending
consideration of the loan for restructuring under this section.
"(c) MEETINGS. -- On determination by a qualified lender that a loan
made by the lender is or has become a distressed loan, the lender shall
provide a reasonable opportunity for the borrower thereof to personally
meet with a representative of the lender --
"(1) to review the status of the loan, the financial condition
of the borrower, and the suitability of the loan for
restructuring; and
"(2) with respect to a loan that is in nonaccrual status, to
develop a plan for restructuring the loan if the loan is suitable
for restructuring.
"(d) CONSIDERATION OF APPLICATIONS. --
"(1) IN GENERAL. -- When a qualified lender receives an
application for restructuring from a borrower, the qualified
lender shall determine whether or not to restructure the loan,
taking into consideration --
"(A) whether the cost to the lender of restructuring the loan
is equal to or less than the cost of foreclosure;
"(B) whether the borrower is applying all income over and above
necessary and reasonable living and operating expenses to the
payment of primary obligations;
"(C) whether the borrower has the financial capacity and the
management skills to protect the collateral from diversion,
dissipation, or deterioration;
"(D) whether the borrower is capable of working out existing
financial difficulties, reestablishing a viable operation, and
repaying the loan on a rescheduled basis, and
"(E) in the case of a distressed loan that is not delinquent,
whether restructuring consistent with sound lending practices may
be taken to reasonably ensure that the loan will not become a loan
that it is necessary to place in nonaccrual status.
"(2) APPLICATIONS NOT REQUIRED FOR RESTRUCTURING PLANS. --
This section shall not prevent a qualified lender from proposing a
restructuring plan for an individual borrower in the absence of an
application for restructuring from the borrower.
"(e) RESTRUCTURING. --
"(1) IN GENERAL. -- If a qualified lender determines that the
potential cost to a qualified lender or restructuring the loan in
accordance with a proposed restructuring plan is less than or
equal to the potential cost of foreclosure, the qualified lender
shall restructure the loan in accordance with the plan.
"(2) COMPUTATION OF COST OF RESTRUCTURING. -- In determining
whether the potential cost to the qualified lender of
restructuring a distressed loan is less than or equal to the
potential cost of foreclosure, a qualified lender shall consider
all relevant factors, including --
"(A) the present value of interest income and principal forgone
by the lender in carrying out the restructuring plan;
"(B) reasonable and necessary administrative expenses involved
in working with the borrower to finalize and implement the
restructuring plan;
"(C) whether the borrower has presented a preliminary
restructuring plan and cash-flow analysis taking into account
income from all sources to be applied to the debt and all assets
to be pledged, showing a reasonable probability that orderly debt
retirement will occur as a result of the proposed restructuring;
and
"(D) whether the borrower has furnished or is willing to
furnish complete and current financial statements in a form
acceptable to the institution.
"(f) LEAST COST ALTERNATIVE. -- If two or more restructuring
alternatives are available to a qualified lender under this section with
respect to a distressed loan, the lender shall restructure the loan in
conformity with the alternative that results in the least cost to the
lender.
"(g) RESTRUCTURING POLICY. --
"(1) ESTABLISHMENT. -- Each farm credit district board of
directors shall develop a policy within 60 days after the date of
the enactment of this section, that is consistent with this
section, to govern the restructuring of distressed loans. Such
policy shall constitute the restructuring policy of each qualified
lender within the district.
"(2) CONTENTS OF POLICY. -- The policy established under
paragraph (1) shall include an explanation of --
"(A) the procedure for submitting an application for
restructuring; and
"(B) the right of borrowers with distressed loans to seek
review by a credit review committee in accordance with section
4.14 of a denial of an application for restructuring.
"(3) SUBMISSION OF POLICY TO FCA. -- Each district board shall
submit the policy of the district governing the treatment of
distressed loans under this section to the Farm Credit
Administration. Notwithstanding the duty imposed by the preceding
sentence, the other duties imposed by this section shall take
effect on the date of the enactment of this section.
"(h) REPORTS. -- During the 5-year period beginning on the date of
the enactment of this section, each qualified lender shall submit
semiannual reports to the Farm Credit Administration containing --
"(1) the results of the review of distressed loans of the
lender; and
"(2) the financial effect of loan restructurings and
liquidations on the lender.
"(i) COMPLIANCE. -- The Farm Credit Administration may issue a
directive requiring compliance with any provision of this section to any
qualified lender that fails to comply with such provision.
"(j) PERMITTED FORECLOSURES. -- This section shall not be construed
to prevent any qualified lender from enforcing any contractual provision
that allows the lender to foreclose a loan, or from taking such other
lawful action as the lender deems appropriate, if the lender has
reasonable grounds to believe that the loan collateral will be
destroyed, dissipated, consumed, concealed, or permanently removed from
the state in which the collateral is located.
"(k) APPLICATION OF SECTION. -- The time limitation prescribed in
subsection (b)(2), and the requirements of subsection (c), shall not
apply to a loan that became a distressed loan before the date of the
enactment of this section if the borrower and lender of the loan are in
the process of negotiating loan restructuring with respect to the loan.
"(l) ASSISTANCE IN RESTRUCTURING. -- Each Federal intermediate
credit bank, on request of any production credit association, may assist
the association in restructuring loans under this section.
BORROWER STOCK.
"(a) FEDERAL LAND BANK. -- If a Federal land bank forgives and
writes off, under section 4.14A, any of the principal outstanding on a
loan made to any borrower, the Federal land bank association of which
the borrower is a member and stockholder shall cancel the same dollar
amount of borrower stock held by the borrower in respect of the loan, up
to the total amount of such stock, and the Federal land bank shall
retire an equal amount of stock owned by the Federal land bank
association.
"(b) PRODUCTION CREDIT ASSOCIATION. -- If a production credit
association forgives and writes off, under section 4.14A, any of the
principal outstanding on a loan made to any borrower, the association
shall cancel the same dollar amount of borrower stock held by the
borrower in respect of the loan, up to the total amount of such stock.
"(c) RETENTION OF STOCK. -- Notwithstanding subsections (a) and (b),
the borrower shall be entitled to retain at least one share of stock to
maintain the borrower's membership and voting interest in the
association.
DENIALS.
"(a) REQUIREMENTS FOR RESTRUCTURING BY SYSTEM INSTITUTIONS. --
"(1) EXISTING NONACCRUAL LOANS. -- Within 9 months after a
qualified lender is certified under section 6.4, such lender shall
review each loan that has not been previously restructured and
that is in nonaccrual status on the date the lender is certified,
and determine whether to restructure the loan.
"(2) NEW NONACCRUAL LOANS. -- Within 6 months after a loan
made by a certified lender is placed in nonaccrual status, the
lender shall determine whether to restructure the loan.
"(b) SPECIAL ASSET GROUPS. --
"(1) ESTABLISHMENT. -- Within 30 days after a qualified lender
in a district is certified to issue preferred stock under section
6.27, the district board of such district shall establish a
special asset group that shall review each determination by the
lender not to restructure a loan.
"(2) RESTRUCTURING PLAN. -- If a special asset group
determines under paragraph (1) that a loan under review should be
restructured, the group shall prescribe a restructuring plan for
the loan that the qualified lender shall implement.
"(c) NATIONAL SPECIAL ASSET COUNCIL. --
"(1) ESTABLISHMENT. -- A National Special Asset Council shall
be established by the Assistance Board to --
"(A) monitor compliance with the restructuring requirements of
this section by qualified lenders certified to issue preferred
stock under section 6.27, and by special asset groups established
under subsection (b); and
"(B) review a sample of determinations made by each special
asset group that a loan will not be restructured.
"(2) REVIEW OF DETERMINATION. -- The National Special Asset
Council shall review a sufficient number of determinations made by
each special asset group to foreclose on any loan to assure the
Council that such group is complying with this section. With
regard to each determination reviewed, the Council shall make an
independent judgment on the merits of the decision to foreclose
rather than restructure the loan.
"(3) NONCOMPLIANCE. -- If the National Special Asset Council
determines that any special asset group is not in substantial
compliance with this section, the Council shall notify the group
of the determination, and may take such other action as the
Council considers necessary to ensure that such group complies
with this section.
"(d) REPORT. -- With respect to determinations by a special asset
group that a loan will not be restructured, the special asset group
shall submit to the National Special Asset Council a report evaluating
the loan and the basis for the determination that the loan should not be
restructured.
"(e) RESTRUCTURING FACTORS. -- In determining whether a loan is to
be restructured, the National Special Asset Council, each special asset
group, and each qualified lender certified under section 6.4 shall take
into consideration the factors specified in section 4.14A(d)(1).".
(b) SENSE OF CONGRESS. -- It is the sense of Congress that the banks
and associations (except banks for cooperatives) operating under the
Farm Credit Act of 1971 "12 USC 2202a note" (12 U.S.C. et seq.) should
administer distressed loans to farmers with the objective of using the
loan guarantee programs of the Farmers Home Administration and other
loan restructuring measures, including participation in interest rate
buy-down programs that are Federally or State funded, and other Federal
and State sponsored financial assistance programs that offer relief to
financially distressed farmers, as alternatives to foreclosure,
considering the availability and appropriateness of such programs on a
case-by-case basis.
Section 4.13 (12 U.S.C. 2199) is amended to read as follows:
"In accordance with regulations of the Farm Credit Administration,
qualified lenders shall provide to borrowers, for all loans that are not
subject to the Truth in Lending Act (15 U.S.C. 1601 et seq.), meaningful
and timely disclosure not later than the time of the loan closing, of --
"(1) the current rate of interest on the loan;
"(2) in the case of an adjustable or variable rate loan, the
amount and frequency by which the interest rate can be increased
during the term of the loan or, if there are no such limitations,
a statement to that effect, and the factors (including the cost of
funds, operating expenses, and provision for loan losses) that
will be taken into account by the qualified lender in determining
adjustments to the interest rate;
"(3) the effect, as shown by a representative example or
examples, of any loan origination charges or purchases of stock or
participation certificates on the effective rate of interest;
"(4) any change in the interest rate applicable to the
borrower's loan;
"(5) except with respect to stock guaranteed under section
4.9A, a statement indicating that stock that is purchased is at
risk; and
"(6) a statement indicating the various types of loan options
available to borrowers, with an explanation of the terms and
borrowers' rights that apply to each type of loan.".
Section 4.13A (12 U.S.C. 2200) is amended --
(1) by striking out "System institutions" and inserting in lieu
thereof "qualified lenders"; and
(2) by striking out the period at the end thereof and inserting
in lieu thereof: "and copies of each appraisal of the borrower's
assets made or used by the qualified lender.".
RESTRUCTURING.
Section 4.13B (12 U.S.C. 2201) is amended to read as follows:
"(a) LOAN APPLICATIONS. -- Each qualified lender to which a person
has applied for a loan shall provide the person with prompt written
notice of --
"(1) the action on the application;
"(2) if the loan applied for is reduced or denied, the reasons
for such action; and
"(3) the applicant's right to review under section 4.14.
"(b) DISTRESSED LOANS. -- Each qualified lender that has a
distressed loan outstanding that is subject to restructuring
requirements under this Act shall provide, in accordance with
regulations prescribed by the Farm Credit Administration the borrower
with prompt written notice of --
"(1) any action taken with respect to restructuring the loan
under section 4.14A;
"(2) if restructuring is denied, the reasons for such action;
and
"(3) the borrower's right to review under section 4.14.".
Section 4.14 (12 U.S.C. 2202) is amended to read as follows:
"(a) CREDIT REVIEW COMMITTEES. --
"(1) IN GENERAL. -- The board of directors of each qualified
lender shall establish one or more credit review committees, which
shall include farmer board representation.
"(2) MEMBERSHIP. -- In no case shall a loan officer involved
in the initial decision on a loan serve on the credit review
committee when the committee reviews such loan.
"(b) REVIEW OF DECISIONS. --
"(1) DENIALS OF REDUCTIONS. -- Any applicant for a loan from a
qualified lender that has received a written notice issued under
section 4.13B of a decision to deny or reduce the loan applied for
may submit a written request, not later than 30 days after
receiving a notice denying or reducing the amount of the loan
application, to obtain a review of the decision by a credit review
committee.
"(2) DENIALS OF RESTRUCTURING. -- A borrower of a loan from a
qualified lender that has received notice, under section 4.13B, of
a decision to deny loan restructuring with respect to a loan made
to the borrower, if the borrower so requests in writing within 7
days after receiving such notice, may obtain a review of such
decision in person before the credit review committee.
"(c) PERSONAL APPEARANCE. -- An applicant for a loan or for
restructuring, who is entitled to and has requested a review under this
section, may appear in person before the credit review committee, and
may be accompanied by counsel or by any other representative of such
person's choice, to seek a reversal of the decision on the application
under review.
"(d) INDEPENDENT APPRAISAL. --
"(1) IN GENERAL. -- An appeal filed with a credit review
committee under this section may include, as a part of the request
for a review of the decision filed under subsection (b)(1), a
request for an independent appraisal, by an accredited appraiser,
of any interests in property securing the loan (other than the
stock or participation certificates of the qualified lender held
by the borrower).
"(2) ARRANGEMENT AND COST. -- Within 30 days after a request
for an appraisal under paragraph (1), the credit review committee
shall present the borrower with a list of three appraisers
approved by the appropriate qualified lender from which the
borrower shall select an appraiser to conduct the appraisal the
cost of which shall be borne by the borrower, and shall consider
the results of such appraisal in any final determination with
respect to the loan.
"(3) COPY TO BORROWER. -- A copy of any appraisal made under
this subsection shall be provided to the borrower.
"(4) ADDITIONAL COLLATERAL. -- An independent appraisal shall
be permitted if additional collateral for a loan is demanded by
the qualified lender when determining whether to restructure the
loan.
"(e) NOTIFICATION OF APPLICANT. -- Promptly after a review by the
credit review committee, the committee shall notify the applicant or
borrower, as the case may be, in writing of the decision of the
committee and the reasons for the decision.".
OBLIGATIONS.
Part C of title IV is amended by inserting after the sections added
by section 102(a) of this Act the following new section:
MEET ALL LOAN OBLIGATIONS.
"(a) FORECLOSURE PROHIBITED. -- A qualified lender may not foreclose
on any loan because of the failure of the borrower thereof to post
additional collateral, if the borrower has made all accrued payments of
principal, interest, and penalties with respect to the loan.
"(b) PROHIBITION AGAINST REQUIRED PRINCIPAL REDUCTION. -- A
qualified lender may not require any borrower to reduce the outstanding
principal balance of any loan made to the borrower by any amount that
exceeds the regularly scheduled principal installment payment (when due
and payable), unless --
"(1) the borrower sells or otherwise disposes of part or all of
the collateral; or
"(2) the parties agree otherwise in a written agreement entered
into by the parties.
"(c) NONENFORCEMENT. -- After a borrower has made all accrued
payments of principal, interest, and penalites with respect to a loan
made by a qualified lender, the lender shall not enforce acceleration of
the borrower's repayment schedule due to the borrower having not timely
made one or more principal or interest payments.
"(d) PLACING LOANS IN NONACCRUAL STATUS. --
"(1) NOTIFICATION. -- If a qualified lender places any loan in
nonaccrual status, the lender shall document such change of status
and promptly notify the borrower thereof in writing of such action
and the reasons therefor.
"(2) REVIEW OF DENIAL. -- If the borrower was not delinquent
in any principal or interest payment under the loan at the time of
such action and the borrower's request to have the loan placed
back into accrual status is denied, the borrower may obtain a
review of such denial before the appropriate credit review
committee under section 4.14.
"(3) APPLICATION. -- This subsection shall only apply if a
loan being placed in nonaccrual status results in an adverse
action being taken against the borrower.".
Section 4.36 (12 U.S.C. 2219a) is amended to read as follows:
"(a) GENERAL RULE. -- Agricultural real estate that is acquired by
an institution of the System as a result of a loan foreclosure or a
voluntary conveyance by a borrower (hereinafter in this section referred
to as the 'previous owner') who, as determined by the institution, does
not have the financial resources to avoid foreclosure (hereinafter in
this section referred to as 'acquired real estate') shall be subject to
the right of first refusal of the previous owner to repurchase or lease
the property, as provided in this section.
"(b) APPLICATION OF RIGHT OF FIRST REFUSAL TO SALE OF PROPERTY. --
"(1) ELECTION TO SELL AND NOTIFICATION. -- Within 15 days
after an institution of the System first elects to sell acquired
real estate, or any portion of such real estate, the institution
shall notify the previous owner by certified mail of the owner's
right --
"(A) to purchase the property at the appraised fair market
value of the property, as established by an accredited appraiser;
or
"(B) to offer to purchase the property at a price less than the
appraised value.
"(2) ELIGIBILITY TO PURCHASE. -- To be eligible to purchase
the property under paragraph (1), the previous owner must, within
15 days after receiving the notice required by such paragraph,
submit an offer to purchase the property.
"(3) MANDATORY SALE. -- An institution of the System receiving
an offer from the previous owner to purchase the property at the
appraised value shall, within 30 days after the receipt of such
offer, accept such offer and sell the property to the previous
owner.
"(4) PERMISSIVE SALE. -- An institution of the System
receiving an offer from the previous owner to purchase the
property at a price less than the appraised value may accept such
offer and sell the property to the previous owner. Notice shall
be provided to the previous owner of the acceptance or rejection
of such offer within 15 days after the receipt of such offer.
"(5) REJECTION OF OFFER OF PREVIOUS OWNER. --
"(A) DUTIES OF INSTITUTION. -- An institution of the System
that rejects an offer from the previous owner to purchase the
property at a price less than the appraised value may not sell the
property to any other person --
"(i) at a price equal to, or less than, that offered by the
previous owner; or
"(ii) on different terms and conditions than those that were
extended to the previous owner, without first affording the
previous owner an opportunity to purchase the property at such
price or under such terms and conditions.
"(B) NOTICE. -- Notice of the opportunity in subparagraph (A)
shall be provided to the previous owner by certified mail, and the
previous owner shall have 15 days in which to submit an offer to
purchase the property at such price or under such terms and
conditions.
"(c) APPLICATION OF RIGHT OF FIRST REFUSAL TO LEASING OF PROPERTY.
--
"(1) ELECTION TO LEASE AND NOTIFICATION. -- Within 15 days
after an institution of the System first elects to lease acquired
real estate, or any portion of such real estate, the institution
shall notify the previous owner by certified mail of the owner's
right --
"(A) to lease the property at a rate equivalent to the
appraised rental value of the property, as established by an
accredited appraiser; or
"(B) to offer to lease the property at a rate that is less than
the appraised rental value of the property.
"(2) ELIGIBILITY TO LEASE. -- To be eligible to lease the
property under paragraph (1), the previous owner must, within 15
days after receiving the notice required by such paragraph, submit
an offer to lease the property.
"(3) MANDATORY LEASE. -- An institution of the System
receiving an offer from the previous owner to lease the property
at a rate equivalent to the appraised rental value of the property
shall, within 15 days after the receipt of such offer, accept such
offer and lease the property to the previous owner unless the
institution determines that the previous owner --
"(A) does not have the resources available to conduct a
successful farming or ranching operation; or
"(B) cannot meet all of the payments, terms and conditions of
such lease.
"(4) PERMISSIVE LEASE. -- An institution of the System
receiving an offer from the previous owner to lease the property
at a rate that is less than the appraised rental value of the
property may accept such offer and lease the property to the
previous owner.
"(5) NOTICE TO PREVIOUS OWNER. -- An institution of the System
receiving an offer from the previous owner to lease the property
at a rate less than the appraised rental value of the property
shall notify the previous owner of its acceptance or rejection of
the offer within 15 days after the receipt of such offer.
"(6) REJECTION OF OFFER OF PREVIOUS OWNER. --
"(A) DUTIES OF INSTITUTION. -- An institution of the System
rejecting an offer from the previous owner to lease the property
at a rate less than the appraised rental value of the property may
not lease the property to any other person --
"(i) at a rate equal to or less than that offered by the
previous owner; or
"(ii) on different terms and conditions than those that were
extended to the previous owner, without first affording the
previous owner an opportunity to lease the property at such rate
or under such terms and conditions.
"(B) NOTICE. -- Notice of the opportunity described in
subparagraph (A) shall be given to the previous owner by certified
mail, and the previous owner shall have 15 days after the recipt
of such notice in which to agree to lease the property at such
rate or under such terms and conditions.
"(d) PUBLIC OFFERINGS. --
"(1) NOTIFICATION OF PREVIOUS OWNER. -- If an institution of
the System elects to sell or lease acquired property or a portion
thereof through a public auction, competitive bidding process, or
other similar public offering, the institution shall notify the
previous owner, by certified mail, of the availability of the
property. Such notice shall contain the minimum amount, if any,
required to qualify a bid as acceptable to the institution and any
terms and conditions to which such sale or lease will be subject.
"(2) PRIORITY. -- If two or more qualified bids in the same
amount are received by the institution under paragraph (1), such
bids are the highest received, and one of the qualified bids is
offered by the previous owner, the institution shall accept the
offer by the previous owner.
"(3) NONDISCRIMINATION. -- No institution of the System may
discriminate against a previous owner in any public auction,
competitive bidding process, or other similar public offering of
property acquired by the institution from such person.
"(e) TERM OR CONDITION. -- For the purposes of this section,
financing by a System institution shall not be considered to be a term
or condition of a sale of acquired real estate.
"(f) FINANCING. -- Notwithstanding any other provision of this
section, a System institution shall not be required to provide financing
to the previous owner in connection with the sale of acquired real
estate.
"(g) MAILING OF NOTICE. -- Notwithstanding any other provision of
this section, each certified mail notice requirement in this section
shall be fully satisfied by mailing one certified mail notice to the
last known address of the former borrower.
"(h) STATE LAWS. -- The rights provided in this section shall not
diminish any such right of first refusal under the law of the State in
which the property is located.
"(i) APPLICABILITY. -- This section shall not apply to a bank for
cooperatives.".
Section 4.13 "12 USC 2199" (12 U.S.C. 2201) (as amended by section
103(a) of this Act) is further amended --
(1) by striking out "In" and inserting in lieu thereof "(a) IN
GENERAL. -- In"; and
(2) by adding at the end thereof the following new subsection:
"(b) DIFFERENTIAL INTEREST RATES. -- A qualified lender offering
more than one rate of interest to borrowers shall, at the request of a
borrower of a loan --
"(1) provide a review of the loan to determine if the proper
interest rate has been established;
"(2) explain to the borrower in writing the basis for the
interest rate charged; and
"(3) explain to the borrower in writing how the credit status
of the borrower may be improved to receive a lower interest rate
on the loan.".
Part F of title IV (12 U.S.C. 2219 et seq.) is amended by adding at
the end thereof the following new section:
ACCOUNTS.
"(a) IN GENERAL. -- Money of a borrower held by a Farm Credit System
institution in an uninsured voluntary or involuntary account as
authorized under regulations issued by the Farm Credit Administration
(as in effect immediately before the date of the enactment of this
section), including all such other accounts known as 'advanced payment
accounts' or 'future prepayment accounts' shall, in the event the
institution is placed in liquidation, be immediately applied as payment
against the indebtedness of any outstanding loans of such borrower.
"(b) REGULATIONS. -- The Farm Credit Administration shall promulgate
regulations --
"(1) that define the term 'uninsured voluntary or involuntary
account'; and
"(2) to otherwise effectively carry out this section.".
The Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) is amended by
adding at the end thereof the following new title:
"(a) CHARTERS. -- On the date which is 15 days after the date of the
enactment of this title, the Farm Credit Administration shall revoke the
charter of the Farm Credit System Capital Corporation (hereinafter
referred to in this title as the 'Capital Corporation') and shall
charter the Farm Credit System Assistance Board (hereinafter referred to
in this Act as the 'Assistance Board') that, subject to this subtitle,
shall be a Federally chartered instrumentality of the United States.
"(b) USE OF CAPITAL CORPORATION STAFF. -- During the 90-day period
beginning on the date of the revocation of the charter of the Capital
Corporation, the Assistance Board may temporarily employ, by contract or
otherwise under reasonable and necessary terms and conditions, such
staff of the Capital Corporation as is necessary to facilitate and
effectuate an orderly transition to, and commencement of, the Assistance
Board, and the termination of the affairs of the Capital Corporation.
"The purposes of the Assistance Board shall be to carry out a program
to provide assistance to, and protect the stock of borrowers of, the
institutions of the Farm Credit System, and to assist in restoring
System institutions to economic viability and permitting such
institutions to continue to provide credit to farmers, ranchers, and the
cooperatives of such, at reasonable and competitive rates.
"(a) MEMBERSHIP. -- The Board of Directors of the Assistance Board
(hereinafter referred to in this subtitle as the 'Board of Directors')
shall consist of three members --
"(1) one of which shall be the Secretary of the Treasury;
"(2) one of which shall be the Secretary of Agriculture; and
"(3) one of which shall be an agricultural producer experienced
in financial matters, and appointed by the President, by and with
the advice and consent of the Senate.
"(b) CHAIRMAN. -- The Board of Directors shall elect annually a
Chairman from among the members of the Board.
"(c) TERMS OF OFFICE, SUCCESSION, AND VACANCIES. --
"(1) TERMS OF OFFICE AND SUCCESSION. -- The term of each
member of the Board of Directors shall expire when the Assistance
Board is terminated.
"(2) VACANCIES. -- Vacancies on the Board of Directors shall
be filled in the same manner as the vacant position was previously
filled.
"(d) COMPENSATION OF BOARD MEMBERS. -- Members of the Board of
Directors --
"(1) appointed under paragraphs (1) and (2) of subsection (a)
shall receive reasonable allowances for necessary expenses of
travel, lodging, and subsistence incurred in attending meetings
and other activities of the Assistance Board, as set forth in the
bylaws issued by the Board of Directors, except that such level
shall not exceed the maximum fixed by subchapter 1 of chapter 57
of title 5, United States Code, for officers and employees of the
United States; and
"(2) appointed under paragraph (3) of subsection (a) shall
receive compensation for the time devoted to meetings and other
activities at a daily rate not to exceed the daily rate of
compensation prescribed for Level III of the Executive Schedule
under section 5314 of title 5, United States Code, and reasonable
allowances for necessary expenses of travel, lodging, and
subsistence incurred in attending meetings and other activities of
the Assistance Board, as set forth in the bylaws issued by the
Board of Directors, except that such level shall not exceed the
maximum fixed by subchapter 1 of chapter 57 of title 5, United
States Code, for officers and employees of the United States.
"(e) RULES AND RECORDS. -- The Board of Directors of the Assistance
Board shall adopt such rules as it may deem appropriate for the
transaction of the business of the Assistance Board, and shall keep
permanent and accurate records and minutes of its acts and proceedings.
"(f) QUORUM REQUIRED. -- A quorum shall consist of two members of
the Board of Directors. All decisions of the Board shall require an
affirmative vote of at least a majority of the members voting.
"(g) CHIEF EXECUTIVE OFFICER. -- A chief executive officer of the
Assistance Board shall be selected by the Board of Directors of the
Assistance Board and shall serve at the pleasure of the Board.
"(a) IN GENERAL. -- The Assistance Board shall be a body corporate
that shall have the power to --
"(1) operate under the direction of its Board of Directors;
"(2) adopt, alter, and use a corporate seal, which shall be
judicially noted;
"(3) provide for one or more vice presidents, a secretary, a
treasurer, and such other officers, employees, and agents, as may
be necessary, define their duties, and require surety bonds or
make other provisions against losses occasioned by acts of such
persons;
"(4) hire, promote, compensate, and discharge officers and
employees of the Assistance Board, without regard to title 5,
United States Code, except that no such officer or employee shall
receive an annual rate of basic pay in excess of the rate
prescribed for Level III of the Executive Schedule under section
5314 of title 5, United States Code;
"(5) prescribe by its Board of Directors its bylaws, that shall
be consistent with law, and that shall provide for the manner in
which --
"(A) its officers, employees, and agents are selected;
"(B) its property is acquired, held, and transferred;
"(C) its general operations are to be conducted; and
"(D) the privileges granted by law are exercised and enjoyed;
"(6) with the consent of any executive department or
independent agency, use the information, services, staff, and
facilities of such in carrying out this title;
"(7) enter into contracts and make advance, progress, or other
payments with respect to such contracts;
"(8) sue and be sued in its corporate name, and complain and
defend in courts of competent jurisdiction;
"(9) acquire, hold, lease, mortgage, or dispose of at public or
private sale, real and personal property, and otherwise exercise
all the usual incidents of ownership of property necessary and
convenient to its operations;
"(10) obtain insurance against loss;
"(11) modify or consent to the modification of any contract or
agreement to which it is a party or in which it has an interest
under this title;
"(12) deposit its securities and its current funds with any
member bank of the Federal Reserve System or any insured State
nonmember bank (as defined in section 3(b) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)) and pay fees therefor and
receive interest thereon as may be agreed; and
"(13) exercise other powers as set forth in this title, and
such other incidental powers as are necessary to carry out its
powers, duties, and functions in accordance with this title.
"(b) POWER TO REMOVE; JURISDICTION. -- Notwithstanding any other
provision of law, any civil action, suit, or proceeding to which the
Assistance Board is a party shall be deemed to arise under the laws of
the United States, and the United States District Court for the District
of Columbia shall have original jurisdiction over such. The Assistance
Board may, without bond or security, remove any such action, suit, or
proceeding from a State court to the United States District Court for
the District of Columbia.
TO ISSUE PREFERRED STOCK.
"(a) BOOK VALUE LESS THAN PAR VALUE OF STOCK AND EQUITIES. -- If the
book value of the stock, participation certificates, and other similar
equities of a System institution, based on generally accepted accounting
principles, is less than the par value of the stock or the face value of
the certificates or equities --
"(1) the Farm Credit Administration shall notify the Assistance
Board of such impairment;
"(2) the Assistance Board shall monitor the financial
condition, business plans, and operations of the institution; and
"(3) the institution may request the Assistance Board to grant
certification to issue preferred stock under section 6.27(a).
"(b) BOOK VALUE LESS THAN 75 PERCENT OF PAR VALUE OF STOCK AND
EQUITIES. -- If the book value of the stock, participation
certificates, and other similar equities of a System institution, based
on generally accepted accounting principles, is less than 75 percent of
the par value of the stock or the face value of the certificates or
equities, the institution shall request the Assistance Board to grant
certification to issue preferred stock under section 6.27(a).
"(c) MANDATORY DETERMINATION OF ELIGIBILITY. --
"(1) IN GENERAL. -- The Assistance Board shall determine
whether to certify a System institution as eligible to issue
preferred stock under section 6.27, if --
"(A) the institution requests such certification;
"(B) the book value of the stock, participation certificates,
and other similar equities of the institution, based on generally
accepted accounting principles, has declined to 75 percent of the
par value of the stock or the face value of the certificates or
equities; and
"(C) the institution agrees to meet the terms and conditions
specified by the Assistance Board pursuant to section 6.6.
"(2) EFFECTIVE DATE OF CERTIFICATION. -- If the determination
of the Assistance Board is to certify the institution under
paragraph (1), such certification shall be effective at the time
of such determination.
"(c) IMPLEMENTATION. -- As soon as practicable after the date of the
enactment of this title, the Assistance Board shall take such actions as
are necessary to carry out this section.
"(d) DEFINITION. -- Except where otherwise provided in this Act, the
term 'other similar equities' includes allocated equities.
"(a) IN GENERAL. -- The Assistance Board shall assist an institution
that has been certified under section 6.4 by --
"(1) authorizing the institution to issue preferred stock under
the appropriate provision of section 6.27, in amounts necessary to
maintain the book value of stock, participation certificates, and
other similar equities of the institution, at the level provided
for in subsection (c);
"(2) in the case of high-cost debt for which the institution is
primarily liable, authorizing the institution to issue preferred
stock under the appropriate provision of section 6.27, in an
amount equal to the premium that would be required by the holder
of the debt for the institution to retire the debt at the then
current market value;
"(3) on a request by the institution, authorizing the issuance
of preferred stock under the appropriate provision of section 6.27
to facilitate the merger of the requesting institution with one or
more other System institutions; or
"(4) providing assistance by such other methods as the
Assistance Board determines appropriate.
"(b) DEFINITION OF HIGH-COST DEBT. -- For purposes of subsection
(a)(2), the term 'high-cost debt' means securities or similar
obligations issued before January 1, 1986, that mature on or after
December 31, 1987, and bear a rate of interest in excess of the then
current market rate for similar securities or obligations.
"(c) MINIMUM EQUITY VALUE. -- The Asistance Board shall authorize a
certified institution to issue amounts of preferred stock under the
appropriate provision of section 6.27 sufficient to --
"(1) maintain the value of stock, participation certificates
and other similar equities at no less than 75 percent of the par
value of the stock or the face value of the certificates or
equities, as determined under generally accepted accounting
principles; and
"(2) strengthen the institution to a point where it is
economically viable, and capable of delivering credit at
reasonable and competitive rates.
"(d) LIMITATION. -- No assistance shall be provided in connection
with a merger until the stockholders and the institutions involved have
approved the merger and the Farm Credit Administration has given final
approval to the merger plan.
"(a) IN GENERAL. -- In the case of a System institution that
requests certification under section 6.4, the Assistance Board may --
"(1) require the institution to obtain approval from the
Assistance Board before implementing business, operating, and
investment plans and policies;
"(2) if one or more of the conditions described in section
4.12(b) are met, as determined by the Farm Credit Administration,
direct the Farm Credit Administration Board to appoint a
conservator for the institution, in accordance with such section,
and to instruct the conservator to evaluate the operations of the
institution and report to the Farm Credit Administration Board and
the Assistance Board on the possibility of restoring the
institution to sound financial condition;
"(3) request that the Farm Credit Administration Board or the
Farm Credit Administration, as appropriate --
"(A) approve or require a merger or consolidation of the
institution to the extent authorized under this Act;
"(B) initiate action to appoint a receiver under section
4.12(b); or
"(C) exercise any enforcement power authorized under this Act;
"(4) require the institution to obtain approval from the
Assistance Board before setting the terms and conditions of any
debt issuances of the institution;
"(5) require the institution to obtain approval from the
Assistance Board before setting the policy on credit standards to
be used, and the policy on rates of interest to be charged on
loans, by the institution, including requiring that --
"(A) the institution set interest rates at levels necessary to
ensure that the cost of money to the institution reflects the
marginal cost to the institution of borrowing an additional amount
of money at the time a new loan is made; and
"(B) loans primarily secured by real estate mortgages not
exceed 85 percent of the appraised agricultural value of the real
estate security, or 75 percent of the then current market value of
the real estate security, whichever is greater;
"(6) require the institution to obtain approval from the
Assistance Board for the design of management information and
accounting systems at the institution, and of the continued use by
the institution of regulatory accounting practices in accordance
with sections 4.8(b) and 5.19(b);
"(7) require that the plans and policies of the institution
resulting from the merger of System banks reduce the overhead
costs of such institution, to the maximum extent practicable, with
respect to the delivery of services to, and performance of duties
for, System associations in the district;
"(8) require the institution to obtain approval from the
Assistance Board of --
"(A) the hiring policies of the institution;
"(B) the compensation and retirement benefits of the chief
executive officer, other managers, and directors of the
institution notwithstanding the authority of the Farm Credit
Administration to approve such matters under sections 5.5 and
5.17(a)(15);
"(C) any change in the management of the institution; and
"(D) policy decisions regarding continued employment and
promotion of the officials referred to in subparagraph (B);
"(9) may suspend for any period of time, or terminate, any
certification granted to an institution under section 6.4 if the
Farm Credit Administration notifies the Assistance Board that the
institution has substantially deviated from the institution's
business plan or has failed to comply with a term or condition
governing the use of any financial assistance provided to the
institution under this title; and
"(10) take such other action as the Assistance Board determines
may be necessary to establish prudent operating practices at the
institution and to return the institution to a sound financial
condition.
"(b) SUSPENSION OF ASSISTANCE. --
"(1) NOTIFICATION. -- The Assistance Board shall promptly
notify the Farm Credit Administration of any action taken by the
Assistance Board under subsection (a)(8).
"(2) ENFORCEMENT. -- The Farm Credit Administration may use
any of its enforcement powers, with respect to any institution to
which the Assistance Board has provided assistance or has
certified the institution to issue preferred stock under the
appropriate provision of section 6.27, to obtain the compliance of
the institution with the terms or conditions governing the use of
financial assistance provided under this title.
"(c) UNDATED LETTERS OF RESIGNATION. -- The Assistance Board shall
not, for any reason, request or require any member of the board of
directors of any System institution to submit to the Assistance Board an
undated letter of resignation. Immediately after the date of the
enactment of this title, the Assistance Board shall destroy all such
letters over which it has control.
"(d) REPORTS. -- During the 5-year period beginning on the date of
the enactment of this title, the Assistance Board, in coordination with
the Financial Assistance Corporation, shall report annually to the
Committee on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of the Senate on the
extent to which System institutions translate the savings in the cost of
the operations of such institutions due to the Federal assistance
provided to the System under this title into lower interest rates
charged to System borrowers or enhanced financial solvency of such
institutions.
"(a) EXPENSES. -- The Financial Assistance Corporation shall pay the
necessary and reasonable administrative expenses of the Assistance Board
from funds in the Assistance Fund established in section 6.25.
"(b) INTERIM FUNDING. -- Before the availability of funding from the
Assistance Fund, the Assistance Board may use the revolving fund
established under section 4.0. Such amounts used shall be repaid to the
revolving fund out of the Assistance Fund within the same fiscal year
that such funds were received by the Assistance Board.
"(c) ASSISTANCE OPERATIONS. -- The Farm Credit Administration shall
provide such personnel and facilities to the Assistance Board as the
Farm Credit Administration considers are necessary to avoid unnecessary
duplication and waste.
"(d) ACCESS TO FCA DOCUMENTS. -- The Assistance Board shall have
access to all reports of examination and supervisory documents of the
Farm Credit Administration, and relevant supporting material for the
purpose of carrying out the special powers of the Assistance Board under
section 6.6, under terms and conditions that are acceptable to the Farm
Credit Administration Board, as are necessary and appropriate to protect
the confidentiality of the documents and materials.
"(a) PURPOSES. -- The powers of the Assistance Board under this
title shall be exercised only for the purposes specified in this title
and shall not be exercised in a manner that would result in the
Assistance Board supplanting the Farm Credit System lending institutions
as the primary providers of credit and other financial services to
farmers, ranchers, and the cooperatives of such.
"(b) PROHIBITION. -- The powers of the Assistance Board under this
title shall not include the management, administration, or disposition
of any loans or other assets owned by other System institutions, or the
providing of technical assistance or other related services to other
System institutions in connection with the administration of loans owned
by such other institutions.
"(a) LIABILITIES. -- On the issuance by the Farm Credit
Administration of the charter for the Assistance Board under this
subtitle, the Assistance Board shall succeed to the assets of and assume
all debts, obligations, contracts, and other liabilities of the Capital
Corporation, matured or unmatured, accrued, absolute, contingent or
otherwise, and whether or not reflected or reserved against on balance
sheets, books of account, or records of the Capital Corporation.
"(b) CONTRACTS. -- The existing contractual obligations, security
instruments, and title instruments of the Capital Corporation shall, by
operation of law and without any further action by the Farm Credit
Administration, the Capital Corporation, or any court, become and be
converted into obligations, entitlements, and instruments of the
Assistance Board chartered under this subtitle.
"(c) ADJUSTMENT OF ASSESSMENTS. -- Not later than 15 days after the
issuance of the charter of the Assistance Board, the Board shall retire
all debt and equity obligations issued to any System institution under
section 4.28G(a)(14) or 4.28H (as in effect immediately before the date
of the enactment of this title) at the book value of such obligations
(determined as of such date of enactment) and shall pay such amounts to
the holders of such debt and equity obligations.
"(d) SURPLUS FUNDS. -- To the extent that, on the extinguishing of
liabilities assumed by the Assistance Board under this section, and on
full performance or other final disposition of contract obligations of
the Assistance Board, there remain surplus funds attributable to such
obligations or contracts, the Assistance Board shall distribute such
surplus funds among the System institutions that contributed funds to
the Capital Corporation on the basis of the relative amount of funds so
contributed by each institution.
"(e) PRESERVATION AGREEMENTS. --
"(1) TRANSFER OF OBLIGATIONS. -- Notwithstanding any other
provision of this Act or the terms and conditions of the
Thirty-Seven Banks Capital Preservation Agreement, the Federal
Land Banks Capital Preservation Agreement, the Federal
Intermediate Credit Banks Capital Preservation Agreement, and the
Banks for Cooperatives Loss Sharing Agreement --
"(A) at the time the receiving bank receives funds from the
Financial Assistance Corporation in an equal and equivalent amount
in accordance with this subsection, any amounts received by, or
that remain accrued to, any System bank in accordance with the
activation of any such agreement for the calendar quarter ending
on September 30, 1986, shall be --
"(i) repaid to the contributing bank by the bank that received
such payments; or
"(ii) cancelled;
"(B) on the date the Financial Assistance Corporation is
chartered, the accounts payable of each contributing bank under
such agreements for the calendar quarter ending on September 30,
1986, shall, by operation of law and without bank, or any court,
become and be converted into accounts payable of the Financial
Assistance Corporation to each receiving bank under such agreement
for such calendar quarter in the same amounts as previously
carried on the books of each such receiving bank; and
"(C) on the date the Financial Assistance Corporation is
chartered, the accounts receivable of each receiving bank under
such agreements for the calendar quarter ending September 30,
1986, shall, by operation of law and without any further action by
such receiving bank or any other bank, or any court, become and be
converted into accounts receivable to such receiving bank from the
Financial Assistance Corporation, in the same amount as previously
carried on the books of such receiving bank and such receivables
shall, for all financial reporting purposes, be accounted for as
an asset on the books of such receiving bank in accordance with
generally accepted accounting practices.
"(2)(A) Not later than 30 days after the first issuance of
obligations by the Financial Assistance Corporation in accordance
with section 6.26, the Corporation shall pay to each receiving
bank such sums as are necessary to permit each receiving bank to
repay, in accordance with paragraph (1), the amounts each such
receiving bank received under any such agreement.
"(B) The accruals shall be paid by the Corporation to each
receiving bank for the actual net loan charge-offs recorded on the
books of each such bank before January 1, 1993, not previously
paid by the contributing banks.
"(3) DEBT OBLIGATIONS. --
"(A) ISSUANCE. -- For the purpose of obtaining funds to carry
out this subsection, the Financial Assistance Corporation shall
issue debt obligations under section 6.26. Such obligations shall
be subject to the terms and conditions of such section, except as
provided for in this paragraph.
"(B) PAYMENT OF INTEREST. -- During each year of the 15-year
period of such obligation issued pursuant to subparagraph (A), the
banks operating under this Act shall pay to the Financial
Assistance Corporation, at such times as the Corporation shall
determine, an amount equal to the entire amount of interest due on
such obligation. Each bank shall pay a proportion of such
interest equal to --
"(i) the average accruing loan volume of the bank during the
year preceding the year of such payment; divided by
"(ii) the average accruing loan volume of all of the banks of
the System for the same period.
"(C) PAYMENT OF PRINCIPAL. -- After the end of the 15-year
period beginning on the date of the issuance of any obligation
issued to carry out this subsection, the banks operating under
this Act shall pay to the Financial Assistance Corporation, on
demand, an amount equal to the outstanding principal of such
obligation. Each bank shall pay a proportion of such principal
equal to --
"(i) the average accruing loan volume of the bank for the
preceding 15 years; divided by
"(ii) the average accruing loan volume of all banks of the
System for the same period.
"(D) Until each obligation issued in accordance with this
subsection reaches maturity, for all financial reporting purposes,
such obligation shall be considered to be the sole obligation of
the Financial Assistance Corporation and shall not be considered a
liability of any System bank.
"(4) FUNDS NOT CONSIDERED FINANCIAL ASSISTANCE. -- The funds
made available to each bank, whether through the issuance of stock
or otherwise, by the Financial Assistance Corporation to meet
obligations under any agreement referred to in paragraph (1) or to
meet any obligations of the contributing banks under any such
agreement, as required by this subsection, shall not be considered
financial assistance under this Act.
"(5) SUSPENSION OF PRESERVATION AGREEMENTS. -- During the
5-year period beginning on the date of enactment of this
subsection and thereafter whenever funds from the Farm Credit
System Insurance Fund are available for use in assisting System
institutions to meet their obligations on their debt instruments,
the Thirty-Seven Banks Capital Preservation Agreement, the Federal
Land Banks Capital Preservation Agreement, the Federal
Intermediate Credit Banks Capital Preservation Agreement, and the
Banks for Cooperatives Loss Sharing Agreement shall be suspended,
in exchange for the benefits flowing to the signatories to such
agreements under the Agricultural Credit Act of 1987.".
AUDITS.
"(a) ISSUANCE. -- The Assistance Board may issue such regulations,
policies, procedures, guidelines, or statements as the Board considers
necessary or appropriate to carry out this title, all of which shall be
promulgated and enforced without regard to subchapter II of chapter 5 of
title 5, United States Code.
"(b) REGULATION BY FARM CREDIT ADMINISTRATION. -- The Assistance
Board shall not be subject to regulation by the Farm Credit
Administration.
"(c) AUDITS. -- The Assistance Board shall not require an audit or
examination of a System institution that would be duplicative of an
audit or examination that is conducted under other provisions of law.
"The Assistance Board, the capital, reserves, and surplus thereof,
and the income derived therefrom, shall be exempt from Federal, State,
municipal, and local taxation, except taxes on real estate held by the
Assistance Board to the same extent, according to its value, as other
similar property held by other persons is taxed.
"The Assistance Board and the authority provided by this subtitle
shall terminate on December 31, 1992.
"(a) EXERCISE OF POWERS. -- The powers of the Assistance Board under
this title shall be exercised by the Farm Credit Administration Board
until the issuance of the charter of the Assistance Board, or such later
date not to exceed 30 days thereafter, as may be requested by the
Assistance Board.
"(b) LIMITATION ON ASSISTANCE. -- Any assistance provided to System
institutions by the Farm Credit Administration in accordance with this
section shall be provided from, and shall not exceed, the amounts
contained in the revolving fund established under section 4.0.
"(c) ISSUANCE OF STOCK. -- Each institution that receives assistance
from the Farm Credit Administration during the interim period specified
in subsection (a), in consideration thereof, shall issue preferred stock
to the Financial Assistance Corporation in an amount equal to the amount
of such assistance. Payments by the Financial Assistance Corporation
under subsection (d) shall be considered to be payments to each such
institution for such stock.
"(d) REPAYMENT. -- The Financial Assistance Corporation shall pay to
the Farm Credit Administration the full amount of all financial
assistance provided by the Farm Credit Administration in accordance with
this section, from the proceeds from the sale of the first issue of
obligations by the Financial Assistance Corporation in accordance with
section 6.26.
"Not later than 5 days after the date of the enactment of this title,
the Farm Credit Administration shall charter the Farm Credit System
Financial Assistance Corporation (hereinafter referred to in this Act as
the 'Financial Assistance Corporation') which shall be --
"(1) an institution of the Farm Credit System; and
"(2) a Federally chartered instrumentality of the United
States.
"The purpose of the Financial Assistance Corporation shall be to
carry out a program to provide capital to institutions of the Farm
Credit System that are experiencing financial difficulty.
"(a) BOARD OF DIRECTORS. --
"(1) COMPOSITION. -- The Board of Directors of the Financial
Assistance Corporation (hereinafter referred to in this Act as the
'Board of Directors') shall consist of the Board of Directors of
the Federal Farm Credit Banks Funding Corporation.
"(2) CHAIRMAN. -- The Board of Directors shall elect annually
a Chairman from among the members of the Board.
"(3) COMPENSATION. -- The members of the Board of Directors
shall receive compensation for the time devoted to meetings and
other activities of the Board and reasonable allowances for
necessary expenses of travel, lodging, and subsistence incurred in
attending meetings and other activities of the Board of Directors
in amounts not exceeding levels set by the Farm Credit
Administration Board.
"(b) RULES AND RECORDS. -- The Board of Directors shall adopt such
rules as it may deem appropriate for the transaction of its business and
shall keep permanent and accurate records and minutes of its acts and
proceedings.
"(c) QUORUM REQUIRED. -- No business may be conducted at a meeting
of the Board of Directors unless a quorum of the members of the Board is
present, and a vote to approve an action requires a majority vote of the
members voting.
"(d) CHIEF EXECUTIVE OFFICER. -- A chief executive officer of the
Financial Assistance Corporation shall be selected by the Board of
Directors and shall serve at the pleasure of the Board.
"The Financial Assistance Corporation shall isue stock with a par
value of $5 to System institutions, as provided for in this subtitle,
and such stock shall not be transferable.
"(a) IN GENERAL. -- The Financial Assistance Corporation shall have
the power to --
"(1) operate under the direction of its Board of Directors;
"(2) adopt, alter, and use a corporate seal, which shall be
judicially noted;
"(3) provide for such officers, employees, and agents,
including joint employees with the Funding Corporation, as may be
necessary, define their duties, and require surety bonds or make
other provisions against losses occasioned by acts of such
persons;
"(4) adopt a salary scale for officers and employees of the
Financial Assistance Corporation, in accordance with the
directives of the Board of Directors;
"(5) prescribe by its Board of Directors bylaws, that are not
inconsistent with law, and that shall provide for the manner in
which --
"(A) its officers, employees, and agents are selected;
"(B) its property is acquired, held, and transferred;
"(C) its general business is conducted; and
"(D) the privileges granted by law are exercised and enjoyed;
"(6) enter into contracts and make advance, progress, or other
payments with respect to such contracts;
"(7) sue and be sued in its corporate name and complain and
defend in courts of competent jurisdiction;
"(8) acquire, hold, lease, mortgage, or dispose of, at public
or private sale, real and personal property, and otherwise
exercise all the usual incidents of ownership of property
necessary and convenient to its business;
"(9) obtain insurance against loss;
"(10) modify or consent to the modification of any contract or
agreement to which it is a party or in which it has an interest
under this subtitle;
"(11) borrow from any commercial bank on its own individual
responsibility and on such terms and conditions as it may
determine with the approval of the Farm Credit Administration;
"(12) deposit its securities and its current funds with any
member bank of the Federal Reserve System or any insured State
nonmember bank (as defined in section 3(b) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)) and pay fees therefor and
receive interest thereon as may be agreed; and
"(13) exercise such other incidental powers as are necessary to
carry out its powers, duties, and functions in accordance with its
charter and this subtitle.
"(b) POWER TO REMOVE, AND JURISDICTION. -- Notwithstanding any other
provision of law, any civil action, suit, or proceeding to which the
Financial Assistance Corporation is a party shall be deemed to arise
under the laws of the United States, and the United States District
Court for the District of Columbia shall have original jurisdiction over
such. The Financial Assistance Corporation may, without bond or
security, remove any such action, suit, or proceeding from a State court
to the United States District Court for the District of Columbia.
"(a) FARM CREDIT ASSISTANCE FUND. --
"(1) ESTABLISHMENT. -- The Financial Assistance Corporation
shall establish an account called the Farm Credit Assistance Fund
(referred to in this Act as the 'Assistance Fund') which shall be
available to the Financial Assistance Corporation as a revolving
fund to carry out this subtitle. The moneys of such Assistance
Fund shall be invested in direct obligations of the United States
or obligations guaranteed by the United States or an agency
thereof.
"(2) FUNDING. -- The Assistance Fund shall be funded through
the issuance of debt obligations and payments, as provided in
section 6.26, and payments, as provided in section 6.28.
"(b) FINANCIAL ASSISTANCE CORPORATION TRUST FUND. -- The Financial
Assistance Corporation shall establish an account called the Financial
Assistance Corporation Trust Fund (hereinafter referred to in this Act
as the 'Trust Fund') that shall consist of securities of the United
States Treasury purchased by the Financial Assistance Corporation with
the funds received from the purchase of stock by System institutions
from the Financial Assistance Corporation under section 6.29.
"(a) ISSUANCE. -- During the period beginning 61 days after the date
of the enactment of this title and ending September 30, 1992, the
Financial Assistance Corporation, subject to the approval of the
Assistance Board, may issue uncollateralized bonds, notes, debentures,
and similar obligations, guaranteed as to the timely payment of
principal and interest by the Secretary of the Treasury as set forth in
subsection (d), with semiannual interest coupon payments and a maturity
period of 15 years --
"(1) in an aggregate amount not to exceed $2,800,000,000; and
"(2) beginning January 1, 1989, in an additional amount, not to
exceed $1,200,000,000, if --
"(A) debt obligations have been issued by the Corporation to
the full extent authorized under paragraph (1);
"(B) the Assistance Board determines that such additional funds
are needed to carry out this title; and
"(C) at least 90 days before the issuance of any debt
obligations under this paragraph, the Assistance Board submits a
report to Congress that sets forth the determination of the
Assistance Board that such additional debt obligations should be
issued, and that contains a detailed evaluation supporting the
determination.
"(b) CONDITIONS. -- The debt obligations shall be in such forms and
denominations, bear such rates of interest, be subject to such
conditions, be issued in such manner, and be sold at such prices as may
be prescribed by the Financial Assistance Corporation.
"(c) INTEREST PAYMENTS. --
"(1) PAYMENT OF INTEREST DURING FIRST 5-YEAR PERIOD. -- During
each year of the first 5-year period of the 10-year period
beginning on the date of issuance of each obligation under
subsection (a), the Financial Assistance Corporation shall pay,
without recourse to System institutions, other than that described
in paragraph (5), all of the interest due on such obligation.
"(2) PAYMENT OF INTEREST DURING SECOND 5-YEAR PERIOD. --
"(A) IN GENERAL. -- During each year of the second 5-year
period of the 10-year period beginning on the date of issuance of
each obligation under subsection (a), the Financial Assistance
Corporation shall pay all of the interest due on such obligation.
"(B) PAYMENT BY SYSTEM INSTITUTIONS TO FINANCIAL ASSISTANCE
CORPORATION. -- During each year of the second 5-year period,
System institutions shall pay to the Financial Assistance
Corporation 50 percent of the interest due on the obligations,
except that System institutions shall pay an additional 10 percent
of the interest expense for each 1 percent that the unallocated
retained earnings of the System (as determined under generally
accepted accounting principles) exceed 5 percent of net assets
(total assets less allowance for loan losses) based on a year-end
financial statement for the preceding year.
"(C) ALLOCATION. -- During each year of the second 5-year
period, each System institution shall pay to the Financial
Assistance Corporation a proportion of the interest due from
System institutions under this paragraph equal to --
"(i) the amount of the performing loan volume of the
institution (based on the average loan volume for the preceding
year); divided by
"(ii) the total performing loan volume of the System for the
preceding year.
"(D) SPECIAL RULE. -- For purposes of determining the average
loan volume of Federal intermediate credit banks, loan volume
shall consist of loans made by such banks with the exception of
loans made to production credit associations.
"(3) PAYMENTS BY TREASURY. -- The Secretary of the Treasury,
in accordance with section 6.28, shall pay to the Financial
Assistance Corporation, in a timely manner, the balance of each
interest payment not made by the System institutions.
"(4) PAYMENT OF INTEREST AFTER FIRST 10-YEAR PERIOD. -- During
each year of the third 5-year period of the 15-year period
beginning on the date of the issuance of each obligation under
subsection (a), the Financial Assistance Corporation shall pay all
of the interest due on such obligation. During each year of such
5-year period, System institutions shall pay the entire amount of
interest due on the obligation allocated in the same manner as
under paragraph (2)(C). Such payments shall be made to the
Financial Assistance Corporation at such times as the Financial
Assistance Corporation shall determine.
"(5) REPAYMENT BY SYSTEM INSTITUTIONS. --
"(A) IN GENERAL. -- Subject to the other provisions of this
paragraph, the institutions of the Farm Credit System shall, on a
fair and equitable basis, repay to the Secretary of the Treasury
the total amount of any annual interest charges on debt
obligations issued under subsection (a) that such institutions
have not previously paid, and such institutions shall not be
required to pay any additional interest charges on such payments.
"(B) TIME OF PAYMENT. -- The institutions of the Farm Credit
System shall begin making interest payments when the Farm Credit
Administration, in consultation with the Secretary of the
Treasury, determines that such institutions possess the financial
viability to make such payments, except that such institutions
shall not be required to begin making such payments until the
obligations issued under subsection (d)(1)(C) have been fully
repaid.
"(C) TERMS OF PAYMENTS. --
"(i) IN GENERAL. -- The institutions of the Farm Credit System
shall make interest payments at such levels, and on such dates, as
the Farm Credit Administration determines appropriate, except that
the Farm Credit Administration shall not set payment levels or
dates that would jeopardize the financial viability of any such
institution.
"(ii) LIMITATIONS. -- The institutions of the Farm Credit
System shall not be required to make such repayments in a manner
that --
"(I) impairs the stock of such institution; or
"(II) jeopardizes the minimum capital requirements of the
institution.
"(iii) UNCOLLATERALIZED OBLIGATION. -- Obligations to make
repayments under this paragraph shall not be required to be
collateralized.
"(d) REFINANCING AND PAYMENT OF PRINCIPAL. --
"(1) IN GENERAL. --
"(A) TIME OF REPAYMENT. -- On maturity of an obligation issued
under subsection (a), the obligation shall be repaid by the
Financial Assistance Corporation.
"(B) PAYMENTS BY INSTITUTIONS. -- Except as provided in
subparagraph (C), in order to enable the Financial Assistance
Corporation to repay the obligation referred to in subparagraph
(A), each institution that issued preferred stock under section
6.27(a) with respect to such obligation (or the successor thereto)
shall pay to the Financial Assistance Corporation, before the
maturity date of such obligation, an amount equal to the par value
of such stock outstanding for such institution.
"(C) SYSTEMWIDE REPAYMENT. -- In order to enable the Financial
Assistance Corporation to repay the obligations referred to in
section 410(c) of the Agricultural Credit Act of 1987, each System
institution shall pay to the Financial Assistance Corporation a
proportion of such principal equal to --
"(i) the average performing loan volume of the bank for the
preceding 15 years; divided by
"(ii) the average performing loan volume of all of the System
banks for the same period.
"(D) SPECIAL RULE. -- For purposes of determining the average
loan volume of Federal intermediate credit banks, loan volume
shall consist of loans made by such banks with the exception of
loans made to production credit associations.
"(E) FUNDS FOR PAYMENTS. -- Payments under subparagraph (B)
shall be made by each such institution from the funds of the
institution or from funds raised by the institution through the
issuance of debt obligations, which may be issued without a
collateral requirement and without any guarantee by the Secretary
of the Treasury.
"(2) REFINANCED OBLIGATIONS. -- The refinanced obligations
issued under paragraph (1) shall be solely the obligations of the
institutions refinancing such, and sections 4.3 and 4.4 shall not
apply to such obligations.
"(3) DEFAULTS. --
"(A) INTEREST. --
"(i) PAYMENT BY CORPORATION. -- If a System institution
defaults on the payment of interest due under this subsection
during the first 15 years after an obligation is issued under
subsection (a), the Financial Assistance Corporation shall pay the
amount of the interest due by the System institution out of the
Trust Fund, and shall recover the amount of the interest due from
the defaulting System institution, and such amount shall be paid
to the Trust Fund.
"(ii) PAYMENT OF INSURANCE FUND. -- If the Financial
Assistance Corporation has not recovered the full amount of
interest due from a defaulting institution by the end of the
12-month period beginning on the date of default, such uncollected
interest shall be paid to the Trust Fund from the Insurance Fund
established under section 5.60, to the full extent of funds
available in the Insurance Fund as of the date the Financial
Assistance Corporation notified the Farm Credit System Insurance
Corporation of amounts due under this section.
"(iii) PAYMENT BY REMAINING INSTITUTIONS. -- To the extent
that the payment from the Insurance Fund is insufficient to
reimburse the Trust Fund, the remaining balance shall be added to
the amount of interest due from remaining System institutions,
under this subsection, and each remaining System institution,
subject to the special rule provided in subsection (c)(2)(D),
shall pay to the Trust Fund a proportion of the uncollected
interest equal to --
"(I) the amount of the performing loan volume of the
institution (based on the average loan volume for the preceding
year); divided by
"(II) the total performing loan volume of the System.
"(B) PRINCIPAL. --
"(i) EVALUATION. -- Not later than 90 days before the maturity
of any obligation issued under subsection (a), the Farm Credit
Administration shall complete an evaluation of the general
financial condition of each System institution that issued
preferred stock under section 6.27(a) with respect to such
obligation to determine whether such System institution will be
able to redeem such stock at par value on the maturity of the
obligation, and remain a viable institution capable of providing
credit to eligible borrowers at equitable and competitive interest
rates.
"(ii) AVAILABILITY OF EVALUATION. -- A copy of the evaluation
required under clause (i) shall be furnished to the Secretary of
the Treasury and the appropriate committees of Congress.
"(iii) REDEMPTION BY INSTITUTION; PURCHASE BY SECRETARY OF THE
TREASURY. -- If the Farm Credit Asministration determines, in
consultation with the Secretary of the Treasury, on the basis of
the evaluation required under clause (i), that the redemption of
such stock at par value would impair the other stock or equities
of such institution or render such institution incapable of
meeting its capital adequacy standards, the institution shall be
prohibited from redeeming the preferred stock it issued under
section 6.27 with respect to the maturing obligation. If the Farm
Credit Administration determines, in consultation with the
Secretary of the Treasury, on the basis of the evaluation required
under clause (i), that such institution will be able to redeem, in
a timely manner and at par value, the preferred stock it isswed
under section 6.27 with respect to the maturing obligation, and
remain a viable and competitive institution, such institution
shall have the option of redeeming or not redeeming such stock.
If such institution elects not to redeem such stock, the Financial
Assistance Corporation shall withdraw funds from the Trust Fund in
an amount equal to the par value of the preferred stock issued by
such institution under section 6.27 so as to enable the Financial
Assistance Corporation to pay the principal of the maturing
obligation. Simultaneously with such withdrawal of funds from the
Trust Fund, the Financial Assistance Corporation shall transfer to
the Insurance Fund an equal amount, at par value, of preferred
stock of such institution. To the extent that the Trust Fund is
insufficient to enable the Financial Assistance Corporation to pay
the full principal of the maturing obligation, the Insurance Fund
shall be used by the Farm Credit System Insurance Corporation to
purchase, at par value, the preferred stock issued by such
institution under section 6.27(a) to enable the Financial
Assistance Corporation to pay the principal of the maturing
obligation. To the extent that the Insurance Fund is insufficient
to enable the Financial Assistance Corporation to pay the full
principal of the maturing obligation, the Secretary of the
Treasury shall purchase, at par value, the remaining quantity of
the preferred stock issued by such institution to enable the
Financial Assistance Corporation to make such full payment. For
that purpose, the Secretary of the Treasury may use, as a public
debt transaction, the proceeds from the sale of any securities
issued under chapter 31 of title 31, United States Code. The
purposes for which such securities may be issued under such
chapter are extended to include such purchases of stock. Any
preferred stock transferred to, or purchased by, the Farm Credit
System Insurance Corporation under this clause shall be retired by
the issuing institution at such times and under such terms and
conditions as are agreed to between the Insurance Corporation and
such institution.
"(C) RECOURSE BY OTHER SYSTEM INSTITUTIONS. -- A defaulting
institution shall be liable to the remaining System institutions
for the amount of any interest paid by the remaining institutions
under this paragraph.
"(4) PAYMENT BY UNITED STATES. --
"(A) INABILITY TO PAY. -- Notwithstanding any other provision
of this Act, if the Financial Assistance Corporation is unable to
pay the principal or interest of any obligation issued under
subsection (a), the Secretary of the Treasury shall pay to the
Financial Assistance Corporation the amount due which shall be
used by the Financial Assistance Corporation to pay the
obligation.
"(B) RECOVERY. --
"(i) INTEREST PAYMENTS. -- In each instance in which the
Secretary of the Treasury is required to make a payment under
subparagraph (A) to the Financial Assistance Corporation as a
result of a default made by a System institution on interest due
from such System institution under subsection (c), the Secretary
of the Treasury shall recover the amount of the payments the
Secretary made, with respect to each defaulting institution, from
such defaulting institution. If the Secretary has not recovered
the full amount due from the defaulting institution by the end of
the 12-month period beginning on the date of payment by the
Secretary, the uncollected amount shall be paid to the Secretary
from the Insurance Fund established under section 5.60.
"(ii) PRINCIPAL PAYMENTS. -- In each instance in which the
Secretary of the Treasury is required under paragraph (3)(B)(iii)
to purchase preferred stock issued by a System institution under
section 6.27(a), the Farm Credit System Insurance Corporation
shall use funds deposited in the Insurance Fund to repurchase, at
par value, from the Secretary of the Treasury such stock required
to be purchased under paragraph (3)(B)(iii) as funds become
available for such repurchase.
"(iii) PRIORITY. -- Notwithstanding any other provision of
this Act except for section 5.60, during any year in which
payments are due to the Secretary of the Treasury from the
Insurance Fund under clause (i), or preferred stock held by the
Secretary is due to be repurchased by the Insurance Fund under
clause (ii), the funds in such Fund, and all funds deposited in
such Fund during such year, shall be used first for the purposes
specified in clauses (i) and (ii).
"(a) ISSUANCE. --
"(1) IN GENERAL. -- Each System institution that is certified
under section 6.4 (a) or (b) may issue a special class of
preferred stock only in an amount, and subject to such terms and
conditions, as authorized by the Assistance Board.
"(2) DIVIDENDS. --
"(A) IN GENERAL. -- Except as provided in subparagraph (B),
dividends shall not be payable on stock issued under this section.
"(B) EXCEPTION. -- Stock issued under this section shall be
issued under such terms and conditions as to enable the Secretary
of the Treasury, with respect to any of such stock the Secretary
purchases under section 6.26(d)(3)(B)(iii), and the Reserve
Account Board, with respect to any of such stock that the Board
purchases or otherwise acquires under section 6.26(d)(3)(B)(iii)
or section 6.26(d)(4)(B)(ii), to establish for such stock a stated
dividend rate equal to the current market yield on outstanding,
marketable obligations of the United States with maturities of 30
years, plus a premium to reflect the cost of capital for
institutions in financial distress.
"(3) VOTING RIGHTS. -- A holder of stock issued under this
subsection shall have no voting rights with respect to the stock.
"(b) PURCHASE. -- The Financial Assistance Corporation shall
purchase shares of stock issued by certified System institutions under
subsections (a) and (b) to the extent that the issuance of such stock is
approved by the Assistance Board.
"(a) IN GENERAL. -- Beginning in fiscal year 1989, the Secretary of
the Treasury shall reimburse the Financial Assistance Corporation for
any amounts such Corporation pays in interest charges under section
6.26(c) during fiscal year 1988, and thereafter the Secretary shall pay
the Financial Assistance Corporation any amounts due from the Secretary
to such Corporation under section 6.26(c).
"(b) REPAYMENT OF INTEREST PAID BY SECRETARY OF TREASURY. --
"(1) IN GENERAL. -- Any amounts paid into the Assistance Fund
by the Secretary of the Treasury pursuant to subsection (a)
exceeding $2,000,000,000 shall be repaid by System institutions in
accordance with a schedule to be established by the Farm Credit
Administration Board.
"(2) ALLOCATION. -- Until such repayment is completed, each
System institution shall pay a proportionate share of the amount
due under this paragraph to --
"(A) the amount of the performing loan volume of the
institution, determined in accordance with subsection (c)(1)(D)
(based on the average loan volume for the preceding year);
divided by
"(B) the total performing loan volume of the System for the
preceding year.
"(c) AUTHORIZATION OF APPROPRIATIONS. -- There is authorized to be
appropriated to the Secretary of the Treasury such sums on an annual
basis as may be necessary to carry out this subtitle.
"(a) AMOUNT OF STOCK PURCHASE. --
"(1) IN GENERAL. -- Except as provided in paragraph (2), for
the purpose of obtaining funds for the Trust Fund, each System
institution shall purchase from the Financial Assistance
Corporation stock issued in accordance with section 6.23 in an
amount equal to the amount by which the unallocated retained
earnings of the institution (after taking into account any funds
received by the institution under section 6.9(c)) exceeds --
"(A) in the case of a System bank, 5 percent of assets; or
"(B) in the case of a production credit association or a
Federal land bank association, 13 percent of assets.
"(2) REALLOCATION. -- The district board of a district,
subject to the unanimous consent of the bank and associations in
the district that would be affected by the reallocation, may
reallocate the amount of stock required to be purchased by banks
and associations in the district under paragraph (1) to equitably
reflect the ability of the banks and associations to pay, except
that --
"(A) the total amount of stock purchased by banks and
associations in the district under this paragraph shall equal the
total amount of stock required to be purchased by the banks and
associations under paragraph (1); and
"(B) the board may not impair the stock of an association in
carrying out this paragraph; and
"(C) a district board's authority to reallocate stock purchases
under this paragraph shall be limited to reallocation among like
associations of the amount of stock required to be purchased by
such associations; reallocation of the amount of stock required
to be purchased by production credit associations among such
associations and the district Federal intermediate credit bank;
and reallocation of the amount of stock required to be purchased
by Federal land bank associations among such associations and the
district Federal land bank. Other reallocations than those
enumerated above shall not be permitted.
"(b) COMPUTATIONS. -- For purposes of subsection (a), the
unallocated retained earnings and assets of a System institution shall
be computed in accordance with generally accepted accounting principles
on the basis of the financial statement of the institution on December
31, 1986.
"(c) NOTICE. -- Within 15 days after the retirement of the
obligations of the Capital Corporation under section 6.9 --
"(1) the Financial Assistance Corporation shall notify each
System institution of the amount of stock such institution is
required to purchase under subsection (a); or
"(2) in the case of a district in which the district board has
reallocated the stock purchase requirement in accordance with
subsection (a)(2), the district board shall notify each System
institution in the district of the amount of stock such
institution is required to purchase under subsection (a).
"(d) INSTITUTION REQUIREMENTS AFTER NOTICE. -- Within 15 days after
a System institution is notified of the amounts due under subsection
(c), the institution shall purchase from the Financial Assistance
Corporation the amount of stock required to be purchased by the
institution under this section. No further stock purchases,
obligations, or assessments shall be required beyond that provided in
section 6.26 and this section.
"(e) JURISDICTION OVER ACTIONS. -- Notwithstanding any other
provision of law, the United States district court for the District of
Columbia shall have exclusive jurisdiction over any action brought under
or arising out of this section. No suit or proceeding shall be
maintained for the recovery of any amount of stock alleged to have been
erroneously or illegally purchased, and no suit or proceeding shall be
maintained to enjoin or otherwise prevent or impede the giving of notice
or the purchase of stock required under this section, unless the amount
of stock required to be purchased under this section has been purchased
and paid for in full.
"(a) ASSETS. -- The Financial Assistance Corporation, and the
capital, reserves, and surplus thereof, and the income derived
therefrom, shall be exempt from Federal, State, municipal, and local
taxation, except taxes on real estate held by the Financial Assistance
Corporation to the same extent, according to its value, as other similar
property held by other persons is taxed.
"(b) OBLIGATIONS. -- The notes, bonds, debentures, and other
obligations issued by the Financial Assistance Corporation shall be
accorded the same tax treatment as System-wide obligations.
"(a) FINANCIAL ASSISTANCE CORPORATION. -- The Financial Assistance
Corporation and the authority provided to such Corporation by this
subtitle shall terminate on the maturity and full payment of all debt
obligations issued under section 6.26(a).
"(b) ACCOUNTS. -- Simultaneously with the termination of the
Financial Assistance Corporation as provided in subsection (a), any
funds in the accounts established under section 6.25 shall be
transferred to the Insurance Fund established under section 5.60.".
Section 4.0 (12 U.S.C. 2151) is amended to read as follows:
"(a) REVOLVING FUND. -- The revolving fund established by this
section (in effect immediately before the date of the enactment of the
Agricultural Credit Act of 1987) shall be available to the Farm Credit
Administration during the period, and for the purposes provided for, in
sections 6.7(b) and 6.13.
"(b) FARM CREDIT INSURANCE FUND. -- On the date the first premium is
due and payable under section 5.56(c), any funds remaining in the
revolving fund shall be transferred to the Farm Credit Insurance Fund in
accordance with the terms and conditions established by the Farm Credit
Administration.".
Paragraph (4) of section 5.35 (12 U.S.C. 2271(4)) is amended to read
as follows:
"(4) the term 'unsafe or unsound practice' shall --
"(A) have the meaning given to it by the Farm Credit
Administration by regulation, rule, or order; and
"(B) during the period begining on the date of the enactment of
this paragraph and ending December 31, 1992, mean any
noncompliance by a System institution, as determined by the Farm
Credit Administration in consultation with the Assistance Board,
with any term or condition imposed on the institution by the
Assistance Board under section 6.6.".
(a) IN GENERAL. -- Section 4.9 (12 U.S.C. 2160) is amended to read
as follows:
"(a) ESTABLISHMENT. -- There is hereby established the Federal Farm
Credit Banks Funding Corporation (hereinafter in this section referred
to as the 'Corporation'), which shall be an institution of the Farm
Credit System.
"(b) DUTIES. -- The Corporation --
"(1) shall issue, market, and handle the obligations of the
banks of the Farm Credit System, and interbank or intersystem flow
of funds as may from time to time be required;
"(2) acting for the banks of the Farm Credit System, subject to
approval of the Farm Credit Administration, shall determine the
amount, maturities, rates of interest, terms and conditions of
participation by the several banks in each issue of joint,
consolidated, or System-wide obligations; and
"(3) shall exercise such other powers as were provided to the
Funding Corporation in accordance with its charter issued under
section 4.25, in effect immediately before the date of the
enactment of the Agricultural Credit Act of 1987.
"(c) OFFICERS AND COMMITTEES. --
"(1) DESIGNATION. -- The board of directors may designate such
officers and committees for such terms and such purposes as may be
agreed on by the board.
"(2) ISSUANCE OF OBLIGATIONS. -- When appropriate to the
board's functions under this section, a committee of the board of
directors of the Corporation, or representatives thereof, may act
on behalf of the board in connection with the issuance of joint,
consolidated, and System-wide obligations.
"(d) BOARD OF DIRECTORS. --
"(1) COMPOSITION. -- The board of directors shall be composed
of nine voting members and one nonvoting member, as follows:
"(A) Four voting members shall be current or former directors
of the System banks elected by the shareholders of the
Corporation.
"(B) Three voting members shall be chief executive officers or
presidents of System banks elected by the shareholders of the
Corporation.
"(C) Two voting members shall be appointed by the members
elected under subparagraphs (A) and (B) after the elected members
have received recommendations for such appointments from, and
consulted with, the Secretary of the Treasury and the Chairman of
the Board of Governors of the Federal Reserve System. The
appointed members shall be selected from United States citizens --
"(i) who are not borrowers from, shareholders in, or employees
or agents of any System institution, who are not affiliated with
the Farm Credit Administration, and who are not actively engaged
with a bank or investment organization that is a member of the
Corporations' selling group for System-wide securities; and
"(ii) who are experienced or knowledgeable in corporate and
public finance, agricultural economics, and financial reporting
and disclosure.
"(D) The president of the Corporation shall serve as a
nonvoting member of the board.
In selecting candidates under subparagraphs (A) and (B), due
consideration shall be given to choosing individuals knowledgeable
in agricultural economics, public and corporate finance, and
financial reporting and disclosure.
"(2) NONVOTING REPRESENTATIVES. --
"(A) ASSISTANCE BOARD. -- During the period in which the
Assistance Board is in existence, the board of directors of the
Assistance Board shall designate one of its directors to serve as
a nonvoting representative to the board of directors of the
Corporation.
"(B) INSURANCE CORPORATION. -- After such period, the board of
directors of the Farm Credit System Insurance Corporation may
designate one of its directors to serve as a nonvoting
representative to the board of directors of the Federal Farm
Credit Banks Funding Corporation.
"(C) MEETINGS. -- The persons so designated by the Assistance
Board and by the Farm Credit System Insurance Corporation may
attend and participate in all deliberations of the board of
directors of the Federal Farm Credit Banks Funding Corporation.
"(e) TRANSITIONAL AUTHORITY. -- Until a quorum of the board of
directors of the Corporation is elected or appointed, the finance
committee established under section 4.5 in effect before the date of the
enactment of this section, and the fiscal agency established under
section 4.9 in effect before such date of enactment, shall continue to
operate as if this section had not been enacted.".
(b) CONFORMING REPEALER. -- Section 4.5 (12 U.S.C. 2156) is
repealed.
(a) DATES FOR PURCHASE AND SALE OF OBLIGATIONS. -- Section 4.8(b)
(12 U.S.C. 2159(b)) is amended by striking out "1988" each place it
appears and inserting in lieu thereof "1992".
(b) ANNUAL REPORTS. -- Section 5.19(b) "12 USC 2254" (12 U.S.C.
2253(b)) is amended--
(1) by inserting "(1)" after the subsection designation; and
(2) by adding at the end thereof the following new paragraphs:
"(2) In accordance with the regulations of the Farm Credit
Administration, for the period ending December 31, 1992, System
institutions are authorized to use the authorities contained in this
section except as otherwise provided in section 6.6.
"(3) Any preferred stock issued under section 6.27 shall be
subordinated to, and impaired before, other stock or equities of the
institution.".
During the period beginning September 30, 2001, and ending December
31, 2001, the Farm Credit Administration shall review and evaluate the
financial condition of the Farm Credit System and report to the
Secretary of the Treasury and the appropriate committees of Congress on
--
(1) the general financial condition of each System institution;
(2) the total outstanding principal of debt obligations issued
under section 6.26 of the Farm Credit Act of 1971 (as added by
section 201 of this Act); and
(3) the ability of each System institution to retire, at par
value, preferred stock issued by the institution in accordance
with section 6.27 of the Farm Credit Act of 1971 (as added by
section 201 of this Act).
(a) REPEAL. -- The following provisions are hereby repealed:
(1) Section 4.1 (12 U.S.C. 2152).
(2) Section 5.17(a)(8) (12 U.S.C. 2252(a)(8)).
(3) Part D1 of title IV (12 U.S.C. 2216 et seq.).
(b) EFFECTIVE DATE. -- The repeals made by subsection (a) shall take
effect 15 days after the date of the enactment of this Act. "12 USC
2152 note"
(c) DEFINITION OF BANK. -- Section 4.4 (12 U.S.C. 2155) is amended
by striking out subsection (c) and by redesignating subsection (d) as
subsection (c).
(d) REDESIGNATION. -- Section 5.35(3) (12 U.S.C. 2271(3)) is amended
by striking out "Capital Corporation" and inserting in lieu thereof
"Financial Assistance Corporation.".
INSTITUTIONS.
(a) MINIMUM CAPITAL ADEQUACY STANDARDS. --
(1) IN GENERAL. --
(A) ESTABLISHMENT. -- Within 120 days after the date of the
enactment of this Act, the Farm Credit Administration shall issue
regulations under section 4.3(a) of the Farm Credit Act of 1971
(12 U.S.C. 2154(c)) that establish minimum permanent capital
adequacy standards for Farm Credit System institutions.
(B) BASIS FOR ESTABLISHMENT. -- The standards established
under subparagraph (A) shall be based on the financial statements
of the institution prepared in accordance with generally accepted
accounting principles.
(C) RATIO OF CAPITAL TO ASSETS. -- The standards established
under subparagraph (A) shall specify fixed percentages
representing the ratio of permanent capital of the institution to
the assets of the institution, taking into consideration relative
risk factors as determined by the Farm Credit Administration.
(D) PHASE-IN PERIOD. -- The standards established under
subparagraph (A) shall be phased in during the 5-year period
beginning on the date of the enactment of this Act.
(2) EMERGENCY POWER NOT AVAILABLE. -- The Farm Credit
Administration shall not invoke the emergency provisions of
section 5.17(b)(2) of the Farm Credit Act of 1971 (12 U.S.C.
2251(b)(2)) with respect to the issuance of the proposed
regulations required under paragraph (1)(A).
(3) PROHIBITIONS DURING TRANSITION PERIOD. -- During the
5-year period specified in paragraph (1)(C), the Farm Credit
Administration shall not initiate any receivership,
conservatorship, liquidation, or enforcement action against any
System institution certified to issue preferred stock under
section 6.27 of the Farm Credit Credit Act of 1971 (as added by
section 201 of this Act), solely because of the failure of such
institution to meet minimum permanent capital adequacy standards
unless such action is recommended or concurred in by the Farm
Credit System Assistance Board established under section 6.0 of
such Act (as added by section 201 of this Act).
(4) PERMANENT CAPITAL. -- For purposes of this subsection, the
term "permanent capital" has the same meaning given that term in
section 4.3A(a)(1) of the Farm Credit Act of 1971.
(b) CAPITALIZATION BYLAWS. -- Title IV (12 US.C. 2151 et seq.) is
amended by inserting after section 4.3 the following new section:
INSTITUTIONS.
"(a) DEFINITIONS. -- As used in this section:
"(1) PERMANENT CAPITAL. -- The term 'permanent capital' means
current year retained earnings, allocated and unallocated
earnings, all surplus (less allowances for losses), and stock
issued by a System institution, except stock that --
"(A) may be retired by the holder thereof on repayment of the
holder's loan, or otherwise at the option or request of the
holder; or
"(B) is protected under section 4.9B or is otherwise not at
risk.
"(2) STOCK. -- The term 'stock' means voting and nonvoting
stock (including preferred stock), equivalent contributions to a
guaranty fund, participation certificates, allocated equities, and
other forms and types of equities.
"(b) ADOPTION OF BYLAWS. -- Subject to approval by shareholders
under subsection (c)(2), each bank and association shall adopt bylaws,
developed by its board of directors, that provide for the capitalization
of the institution in accordance with subsection (c)(1).
"(c) REQUIREMENTS OF BYLAWS. --
"(1) IN GENERAL. -- Notwithstanding any other provision of
this Act, the bylaws adopted under subsection (b) --
"(A) shall provide for such classes, par value, and amounts of
the stock of the institution, the manner in which such stock shall
be issued, transferred, and retired, and the payment of dividends
and patronage refunds, as determined appropriate by the Board of
Directors, subject to this section;
"(B) may provide for the charging of loan origination fees as
determined appropriate by the Board of Directors;
"(C) shall enable the institution to meet the capital adequacy
standards established under the regulations issued under section
4.3(a);
"(D) shall provide for the issuance of voting stock, which may
only be held by --
"(i) borrowers who are farmers, ranchers, or producers, or
harvesters of aquatic products, and cooperative associations
eligible to borrow from System institutions under this Act;
"(ii) in the case of a Central Bank for Cooperatives, other
banks for cooperatives; and
"(iii) in the case of banks other than banks for cooperatives,
System associations;
"(E) shall require that --
"(i) as a condition of borrowing from or through the
institution, any borrower who is entitled to hold voting stock or
participation certificates shall, at the time a loan is made,
acquire voting stock or participation certificates in an amount
not less than $1,000 or 2 percent of the amount of the loan,
whichever is less; and
"(ii) within 2 years after the loan of a borrower is repaid in
full, any voting stock held by the borrower be converted to
nonvoting stock;
"(F) may provide that persons who are not borrowers from the
institution may hold nonvoting stock of the institution;
"(G) shall require that any holder of stock issued before the
adoption of bylaws under this section exchange a portion of such
stock for new voting stock;
"(H) do not need to provide for maximum or minimum standards of
borrower stock ownership based on a percentage of the loan of the
borrower;
"(I) shall permit the retirement of stock at the discretion of
the institution if the institution meets the capital adequacy
standards established under standards issued under section 4.3(a);
and
"(J) shall permit stock to be transferable.
"(2) EFFECTIVE DATE. -- The bylaws adopted by the board of
directors of a System institution under subsection (b) shall take
effect only on approval of a majority of the stockholders of such
institution present and voting, or voting by written proxy, at a
duly authorized stockholders' meeting.
"(d) REDUCTION OF CAPITAL. --
"(1) GENERAL RULE. -- Except as provided in paragraph (2) and
in section 4.9A, the board of directors of a System institution
may not reduce the permanent capital of the institution through
the payment of patronage refunds or dividends, or the retirement
of stock or allocated equities if, after or due to such action,
the permanent capital of the institution would thereafter fail to
meet the minimum capital adequacy standards established under
section 4.3(a).
"(2) EXCEPTIONS. -- Paragraph (1) shall not apply to the
payment of noncash patronage refunds by any institution exempt
from Federal income tax if the entire refund paid qualifies as
permanent capital. Notwithstanding paragraph (1), any System
institution subject to Federal income tax may pay patronage
refunds partially in cash as long as the cash portion of the
refund is the minimum amount required to qualify the refund as a
deductible patronage distribution for Federal income tax purposes
and the remaining portion of the refund paid qualifies as
permanent capital.
"(e) COMPLIANCE. -- The Farm Credit Administration may issue a
directive that requires compliance with subsection (d), to the board of
directors of any System institution that fails to comply therewith.
"(f) CONSTRUCTION. -- This section shall not be construed to affect
the provisions of this Act that confer on System institutions a lien on
borrower stock or other equities and the privilege to retire or cancel
such stock or other equities for application against the indebtedness on
a defaulted or restructured loan.
"(g) CONTROLLING AUTHORITY. -- To the extent than any provision of
this section is inconsistent with any other provision of this Act (other
than section 4.9A), the provision of this section shall control.".
Title V (12 U.S.C. 2221 et seq.) is amended by adding at the end
thereof the following new part:
"As used in this part:
"(1) BOARD OF DIRECTORS. -- The term 'Board of Directors'
means the Board of Directors of the Corporation.
"(2) CORPORATION. -- The term 'Corporation' means the Farm
Credit System Insurance Corporation established in section 5.52.
"(3) INSURED OBLIGATION. -- The term 'insured obligation'
means any note, bond, debenture, or other obligation issued under
subsection (c) or (d) of section 4.2 --
"(A) on or before the date of the enactment of this part, on
behalf of any System bank; and
"(B) after such date, on behalf of any insured System bank.
"(4) INSURED SYSTEM BANK. -- The term 'insured System bank'
means any System bank whose participation in notes, bonds,
debentures, and other obligations issued under subsection (c) or
(d) of section 4.2 is insured under this part.
"(5) RECEIVER. -- The term 'receiver' means a receiver or
conservator appointed by the Farm Credit Administration to
liquidate a System institution.
"(6) STATE. -- The term 'State' means any of the 50 States,
the District of Columbia, and Territory of the United States,
Puerto Rico, Guam, American Samoa, the Trust Territory of the
Pacific Islands, or the Virgin Islands.
SYSTEM INSURANCE CORPORATION.
"There is hereby established the Farm Credit System Insurance
Corporation which shall insure, in accordance with this part, the timely
payment of principal and interest on notes, bonds, debentures, and other
obligations issued under subsection (c) or (d) of section 4.2 on behalf
of one or more System banks all of which are entitled to the benefits of
insurance under this part.
"(a) ESTABLISHMENT. -- The Corporation shall be managed by a Board
of Directors that shall consist of the members of the Farm Credit
administration Board.
"(b) CHAIRMAN. -- The Board of Directors shall be chaired by any
Board member other than the Chairman of the Farm Credit Administration
Board.
"Effective beginning on January 1, 1989, or 12 months after the date
of the enactment of this part, whichever is later, each System bank
shall be an insured System bank and shall be subject to this part. Each
System bank that is authorized to commence or resume operations under a
title of this Act shall be an insured System bank from the time of such
authorization. A bank resulting from the merger or consolidation of
insured System banks shall be an insured System bank.
"(a) AMOUNT IN FUND NOT EXCEEDING SECURE BASE AMOUNT. -- Until the
aggregate of amounts in the Farm Credit Insurance Fund exceeds the
secure base amount, the annual premium due from any insured System bank
for any calendar year shall be equal to the sum of --
"(1) the annual average principal outstanding for such year on
loans made by the bank that are in accrual status, multiplied by
0.0015; and
"(2) the annual average principal outstanding for such year on
loans made by the bank that are in nonaccrual status, multiplied
by 0.0025.
"(b) AMOUNT IN FUND EXCEEDING SECURE BASE AMOUNT. -- At any time the
aggregate of amount in the Insurance Fund exceeds the secure base
amount, the Corporation shall reduce the annual premium due from each
insured System bank for the following calendar year by a percentage
determined by the Corporation so that the aggregate of the premiums
payable by all System banks is sufficient to ensure that the aggregate
of amounts in the Insurance Fund after such premiums are paid is not
less than the secure base amount at such time.
"(c) SECURE BASE AMOUNT. -- For purposes of this part, the term
'secure base amount' means, with respect to any point in time, 2 percent
of the aggregate outstanding insured obligations of all insured System
banks at such time, or such other percentage of the aggregate amount as
the Corporation in its sole discretion determines is actuarially sound
to maintain in the Insurance Fund taking into account the risk of
insuring outstanding insured obligations.
"(d) DETERMINATION OF PRINCIPAL OUTSTANDING. -- For the purpose of
subsection (a), the principal outstanding on all loans made by a Federal
intermediate credit bank shall be determined based on all loans made --
"(1) by the production credit associations in the district in
which such bank is located;
"(2) by any bank, company, institution, corporation, union, or
association described in section 2.3(a)(2), that is able to make
such loans because such entity is receiving, or has received,
funds provided through the Federal intermediate credit bank; and
"(3) by such Federal intermediate credit bank (other than loans
made to any party described in paragraph (1) or (2)).
"(a) FILING CERTIFIED STATEMENTS. -- Annually, on a date to be
determined in the sole discretion of the Board of Directors, each
insured System bank that became insured before the beginning of such
year shall file with the Corporation a certified statement showing the
annual average principal outstanding on loans made by the bank that are
in accrual status, the annual average principal outstanding on loans
that are in nonaccrual status, and the amount of the premium due the
Corporation from the bank for such year.
"(b) CONTENTS AND FORM OF STATEMENT. -- The certified statement
required to be filed with the Corporation under subsection (a) shall be
in such form and set forth such supporting information as the Board of
Directors shall prescribe, and shall be certified by the president of
the bank or any other officer designated by its board of directors that
to the best of the person's knowledge and belief the statement is true,
correct, complete, and has been prepared in accordance with this part
and all regulations issued thereunder.
"(c) INITIAL PREMIUM PAYMENT. -- Each System bank shall pay to the
Corporation the amount of the initial premium it is required to certify
under subsection (a) as soon as practicable after January 1, 1990, based
on the application of section 5.55 to the accruing loan volume of the
bank for calendar year 1989.
"(d) SUBSEQUENT PREMIUM PAYMENTS. -- The premium payments required
from insured System banks under subsection (a) shall be made not less
frequently than annually in such manner and at such time or times as the
Board of Directors shall prescribe, except that the amount of the
premium shall be established not later than 60 days after filing the
certified statement setting forth the amount of the premium.
"(e) REGULATIONS. -- The Board of Directors shall prescribe all
rules and regulations necessary for the enforcement of this section.
The Board of Directors may limit the retroactive effect, if any, of any
of its rules or regulations.
OF PREMIUMS; REMEDIES.
"(a) OVERPAYMENTS. -- The Corporation may refund to any insured
System bank any premium payment made by the bank exceeding the amount
due the Corporation.
"(b) UNDERPAYMENTS. --
"(1) RECOVERY. -- The Coporation, in a suit brought at law or
in equity in any court of competent jurisdiction, may recover from
any insured System bank the amount of any unpaid premium lawfully
payable by the bank to the Corporation, whether or not the bank
has made any report of condition required under section 5.55 or
filed any certified statement under section 5.56, and whether or
not suit has been brought to compel the bank to make any such
report or file any such statement.
"(2) LIMITATION. -- Any action or proceeding for the recovery
of any premium due the Corporation under paragraph (1), or for the
recovery of any amount paid to the Corporation exceeding the
amount due the Corporation, shall be brought within 5 years after
the right accrued for which the claim is made. If an insured
System bank has made or filed with the Corporation a false or
fraudulent certified statement with the intent to evade, in whole
or in part, the payment of a premium, the claim shall not be
deemed to have accrued until the Corporation discovers that the
certified statement is false or fraudulent.
"(c) FAILURE TO FILE STATEMENT OR PAY PREMIUM. --
"(1) FORFEITURE OF RIGHTS. -- If any insured System bank fails
to file any certified statement required to be filed by such bank
under section 5.56 or fails to pay any premium required to be paid
by such bank under any provision of this part, and if the bank
does not correct such failure within 30 days after the Corporation
gives written notice to an officer of the bank, citing this
subsection and stating that the bank has failed to so file or pay
as required by law, all the rights, privileges, and franchises of
the bank granted to it under this Act shall be thereby forfeited.
"(2) ENFORCEMENT. -- The Corporation may bring an action to
enforce this subsection against any such bank in any court of
competent jurisdiction for the judicial district in which the bank
is located.
"(3) LIABILITY OF DIRECTORS. -- Every director who
participated in or assented to a failure (described in paragraph
(1)) shall be held personally liable for all consequential
damages.
"(d) EFFECT ON OTHER REMEDIES. -- The remedies provided in
subsection (b) and (c) shall not be construed as limiting any other
remedies against any insured System bank, but shall be in addition
thereto.
"On the date of the enactment of this part, the Corporation shall
become a body corporate and as such shall have the following powers:
"(1) SEAL. -- The Corporation may adopt and use a corporate
seal.
"(2) SUCCESSION. -- The Corporation may have succession until
dissolved by an Act of Congress.
"(3) CONTRACTS. -- The Corporation may make contracts.
"(4) LEGAL ACTIONS. --
"(A) IN GENERAL. -- The Corporation may sue and be sued,
complain and defend, in any court of law or equity, State or
Federal.
"(B) JURISDICTION. -- All suits of a civil nature at common
law or in equity to which the Corporation shall be a party shall
be deemed to arise under the laws of the United States, and the
United States district courts shall have original jurisdiction
thereof, without regard to the amount in controversy, and the
Corporation, without bond or security, may remove any such action,
suit, or proceeding from a State court to the United States
district court for the district or division embracing the place
where the same is pending by following any procedure for removal
then in effect.
"(C) ATTACHMENT AND EXECUTION. -- No attachment or execution
may be issued against the Corporation or its property before final
judgment in any suit, action, or proceeding in any State, county,
municipal, or United States court.
"(D) AGENT FOR SERVICE OF PROCESS. -- The Board of Directors
shall designate an agent on whom service of process may be made in
any State or jurisdiction in which any insured System bank is
located.
"(5) OFFICERS AND EMPLOYEES. --
"(A) IN GENERAL. -- The Corporation may appoint by its Board
of Directors such officers and employees as are not otherwise
provided for in this part, to define their duties, fix their
compensation, and require bonds of them and fix the penalty
thereof, and to dismiss at pleasure such officers or employees.
"(B) EMPLOYEES OF THE UNITED STATES. -- Nothing in this or any
other Act shall be construed to prevent the appointment and
compensation, as an officer or employee of the Corporation, of any
officer or employee of the United States in any board, commission,
independent establishment, or executive department thereof.
"(6) BYLAWS. -- The Corporation may prescribe, by its Board of
Directors, bylaws not inconsistent with law, regulating the manner
in which its general business may be conducted, and the privileges
granted to it by law may be exercised and enjoyed.
"(7) INCIDENTAL POWERS. -- The Corporation may exercise by its
Board of Directors, or duly authorized officers or agents, all
powers specifically granted by the provisions of this part, and
such incidental powers as shall be necessary to carry out the
powers so granted.
"(8) INFORMATION. -- The Corporation may, when necessary, make
examinations of, and require information and reports from, System
institutions, as provided in this part.
"(9) RECEIVER. -- The Corporation may act as receiver.
"(10) RULES AND REGULATIONS. -- The Corporation may prescribe
by its Board of Directors such rules and regulations as it
considers necessary to carry out this part (except to the extent
that authority to issue such rules and regulations has been
expressly and exclusively granted to any other regulatory agency).
EXAMINATION OF INSURED SYSTEM BANKS.
"(a) CONDUCT OF CORPORATE AFFAIRS. --
"(1) FAIR ADMINISTRATION. -- The Board of Directors shall
administer the affairs of the Corporation fairly and impartially
and without discrimination.
"(2) OBLIGATIONS AND EXPENSES. -- The Board of Directors shall
determine and prescribe the manner in which the obligations of the
Corporation may be incurred and the expenses of the Corporation
may be allowed and paid.
"(3) USE OF MAILS. -- The Corporation may use the United
States mails in the same manner and under the same conditions as
the executive departments of the Federal Government.
"(4) USE OF INFORMATION. -- The Corporation, with the consent
of any board, commission, independent establishment, or executive
department of the Federal Government, including any field service
thereof, may avail itself of the use of information, services, and
facilities thereof in carrying out this part.
"(b) EXAMINATION OF INSURED SYSTEM BANKS. --
"(1) APPOINTMENT OF EXAMINERS. -- The Board of Directors may
appoint examiners who may, on behalf of the Corporation, examine
any insured System bank, and production credit association, and
any System institution in receivership, if in the judgment of the
Board of Directors an examination of the institution is necessary.
"(2) POWERS AND REPORT. -- Each examiner may make a thorough
examination of all affairs of the institution, and shall make a
full and detailed report of the condition of the institution to
the Corporation.
"(3) APPOINTMENT OF CLAIM AGENTS. -- The Board of Directors,
in like manner, shall appoint claim agents who may investigate and
examine all claims for insured obligations.
"(c) OATH, AFFIRMATIONS, AND TESTIMONY. -- In connection with
examinations under this section, the Corporation or its designated
representatives may administer oaths and affirmations, and may examine,
take, and preserve testimony under oath, as to any matter with respect
to the affairs of any such institution.
"(d) COOPERATION WITH FCA EXAMINERS. -- The examiners appointed by
the Board of Directors shall cooperate to the maximum extent possible
with examiners of the Farm Credit Administration to minimize duplication
of effort and minimize costs.
"(a) ESTABLISHMENT. -- There is hereby established a Farm Credit
Insurance Fund (hereinafter referred to in this section as the
'Insurance Fund') for insuring the timely payment of principal and
interest on insured obligations. The assets in the Fund shall be held
by the Corporation for the uses and purposes of the Corporation.
"(b) AMOUNTS IN FUND. --
"(1) REVOLVING FUND. -- All amounts in the revolving fund
established by section 4.0 (in effect immediately before the date
of the enactment of this part) shall be transferred into the Farm
Credit Insurance Fund on January 1, 1989, or 12 months after the
date of the enactment of this part, whichever is later, except
that the obligations to, and rights of, any person in such
revolving fund arising out of any event or transaction before the
date of the enactment of this part shall remain unimpaired.
"(2) DEPOSIT OF PREMIUMS. -- Beginning 5 years after the date
of the enactment of this part, the Corporation shall deposit in
the Insurance Fund all premium payments received by the
Corporation under this part.
"(c) USES OF FUND. --
"(1) MANDATORY USE. -- Beginning 5 years after the date of the
enactment of this part, the Corporation shall expend amounts in
the Insurance Fund to the extent necessary to insure the timely
payment of interest and principal on insured obligations.
"(2) OTHER MANDATORY USES. -- Beginning 5 years after the date
of enactment of this part, the Corporation shall use amounts in
the Insurance Fund to --
"(A) satisfy System institution defaults through the purchase
of preferred stock or other payments as provided for in section
6.26(d)(3); and
"(B) ensure the retirement of borrower stock at par value and
participation certificates or other similar equities at face value
as provided for under section 4.9A(c)(2).
"(3) PERMISSIVE USES. -- The Corporation may expend amounts in
the Insurance Fund to carry out section 5.61 and to cover the
operating costs of the Corporation.
"(4) CORPORATE PAYMENT OR REFUNDS. -- The Corporation shall
make all payments and refunds required to be made by the
Corporation under this part from amounts in the Insurance Fund.
RESPECT TO TROUBLED INSURED SYSTEM BANKS.
"(a) AUTHORITY TO PROVIDE ASSISTANCE. --
"(1) IN GENERAL. -- The Corporation, in its sole discretion
and on such terms and conditions as the Board of Directors may
prescribe, may make loans to, purchase the assets or securities
of, assume the liabilities of, or make contributions to, any
insured System bank if such action is taken --
"(A) to prevent the placing of the bank in receivership;
"(B) to restore the bank to normal operation; or
"(C) to reduce the risk to the Corporation posed by the bank
when severe financial conditions threaten the stability of a
significant number of insured System banks or of insured System
banks possessing significant financial resources.
"(2) ENUMERATED POWERS. --
"(A) FACILITATION OF MERGERS OR CONSOLIDATION. -- To
facilitate a merger or consolidation of a qualifying insured
System bank, the sale of assets of such insured System bank to
another insured System bank, the assumption of such insured System
bank's liabilities by such other insured System bank, or the
acquisition of the stock of such insured System bank by such other
insured System bank, the Corporation, in its sole discretion and
on such terms and conditions as the Board of Directors may
prescribe, may --
"(i) purchase any such assets or assume any such liabilities;
"(ii) make loans or contributions to, or purchase debt
securities of, such other insured System bank;
"(iii) guarantee such other insured System bank against loss by
reason of such other insured System bank's merging or
consolidating with, or assuming the liabilities and purchasing the
assets of, such insured System bank; or
"(iv) take any combination of the actions referred to in the
preceding clauses.
"(B) QUALIFYING INSURED SYSTEM BANK. -- For purposes of
subparagraph (A), the term 'qualifying insured System bank' means
any insured Bystem bank that --
"(i) is in receivership;
"(ii) is, in the judgment of the Board of Directors, in danger
of being placed in receivership; or
"(iii) is, in the sole discretion of the Corporation, an
insured System bank that, when severe financial conditions exist
that threaten the stability of a significant number of insured
System banks or of insured System banks possessing significant
financial resources, requires assistance under subparagraph (A) to
lessen the risk to the Corporation posed by such insured System
bank under such threat of instability.
"(3) LIMITATION. --
"(A) COST OF LIQUIDATION. -- Assistance shall not be provided
to an insured System bank under this subsection if the amount of
such assistance exceeds an amount determined by the Corporation to
be the cost of liquidating the bank (including paying the insured
obligations issued on behalf of the bank). This subparagraph
shall not apply to the provision of assistance to a bank if the
Corporation determines that the continued operation of the bank is
essential to provide adequate agricultural credit services in the
area of operations of the bank.
"(B) PURCHASE OF STOCK. -- The Corporation may not use its
authority under this subsection to purchase any stock of an
insured System bank. The preceding sentence shall not be
construed to limit the ability of the Corporation to enter into
and enforce covenants and agreements that it determines to be
necessary to protect the financial interests of the Corporation.
"(4) SUBORDINATION. -- Any assistance provided under this
subsection may be in subordination to the rights of owners of
obligations and other creditors.
"(5) REPORTS. -- The Corporation, in its annual report to
Congress, shall report the total amount saved, or it estimates to
be saved, by the Corporation exercising the authority provided to
the Corporation in this subsection.
"(b) AUTHORITY TO PLEDGE OR SELL ASSETS. -- The Corporation, in its
discretion, may make loans on the security of, or may purchase, and
liquidate or sell, any part of the assets of, any insured System bank
that is placed in receivership because of the inability of the bank to
pay principal or interest on any of its notes, bonds, debentures, or
other obligations in a timely manner.
"(c) SUBROGATION. --
"(1) IN GENERAL. -- On the payment to an owner of an insured
obligation issued on behalf of an insured System bank in
receivership, the Corporation shall be subrogated to all rights of
the owner against the bank to the extent of the payment.
"(2) RECEIPT OF DIVIDENDS. -- Subrogation under paragraph (1)
shall include the right on the part of the Corporation to receive
the same dividends from the proceeds of the assets of the bank as
would have been payable to the owner on a claim for the insured
obligation.
"(d) RIGHT TO ASSETS. -- Any agreement that shall diminish or defeat
the right, title, or interest of the Corporation in any asset acquired
by such Corporation under this section, either as security for a loan or
by purchase, shall not be valid against the Corporation unless the
agreement --
"(1) is in writing;
"(2) is executed by the bank and the person or persons claiming
an adverse interest thereunder, including the obligor,
contemporaneously with the acquisition of the asset by the bank;
"(3) has been approved by the board of directors of the bank or
its loan committee, which approval shall be reflected in the
minutes of the board or committee; and
"(4) has been, continuously, from the time of its execution, an
official record of the bank.
"(e) INSURED SYSTEM BANK. -- As used in this section, the terms
'insured System bank' and 'bank' include each production credit
association.
"(f) EFFECTIVE DATE. -- The Corporation shall not exercise any
authority under this section during the 5-year period beginning on the
date of the enactment of this part.
"Money of the Corporation not otherwise employed shall be invested in
obligations of the United States or in obligations guaranteed as to
principal and interest by the United States.
"Notwithstanding any other provision of law, the Corporation,
including its franchise, and its capital, reserves, surplus, and income,
shall be exempt from all taxation imposed by the United States or by any
State, county, municipality, or local taxing authority, except that any
real property of the Corporation shall be subject to State, county,
municipal, and local taxation to the same extent according to its value
as other real property is taxed.
"(a) IN GENERAL. -- The Corporation annually shall prepare and
submit to Congress a report of the operations of the Corporation, as
soon as practicable after the first day of January in each calendar
year.
"(b) CONTENTS. -- Reports submitted under subsection (a) shall
include information concerning the --
"(1) aggregate amount in the Insurance Fund at the close of the
preceding calendar year;
"(2) projections of the costs to be incurred by the Corporation
during the calendar year; and
"(3) estimates of the aggregate amount to be collected as
premiums during the calendar year.
"(a) CORPORATE NAME. --
"(1) USE OF CORPORATE NAME. -- It shall be unlawful for any
person or entity to use the words 'Farm Credit System Insurance
Corporation' or any combination of such words that would have the
effect of leading the public to believe that there is any
connection between such person or entity and the Corporation, by
virtue of the name under which such person or entity does
business.
"(2) FALSE REPRESENTATION. --
"(A) BY OUTSIDE PERSON OR ENTITIES. -- It shall be unlawful
for any person or entity to falsely represent by any device, that
the notes, bonds, debentures, or other obligations of the person
or entity are insured or in any way guaranteed by the Corporation.
"(B) SYSTEM BANKS. -- It shall be unlawful for any insured
System bank or person that markets insured obligation to falsely
represent the extent to which or the manner in which such
obligations are insured by the Corporation.
"(3) PENALTY. -- Any person or entity that willfully violates
any provision of this subsection shall be fined not more than
$1,000, imprisioned for not more than 1 year, or both.
"(b) PAYMENTS OR DISTRIBUTIONS WHILE IN DEFAULT. --
"(1) IN GENERAL. -- It shall be unlawful for any insured
System bank to pay any dividends on bank stock or participation
certificates or interest on the capital notes or debentures of
such bank (if such interest is required to be paid only out of net
profits) or distribute any of the capital assets of such bank
while the bank remains in default in the payment of any premium
due to the Corporation.
"(2) LIABILITY OF DIRECTORS. -- Each director or officer of
any insured System bank who willfully participates in the
declaration or payment of any dividend or interest or in any
distribution in violation of this subsection shall be fined not
more than $1,000, imprisoned not more than 1 year, or both.
"(3) APPLICABILITY. -- This subsection shall not apply to any
default that is due to a dispute between the insured System bank
and the Corporation over the amount of such premium if such bank
deposits security satisfactory to the Corporation for payment on
final determination of the issue.
"(c) FAILURE TO FILE STATEMENT OR PAY PREMIUM. --
"(1) IN GENERAL. -- Any insured System bank that willfully
fails or refuses to file any certified statement or pay any
premium required under this part shall be subject to a penalty of
not more than $100 for each day that such violations continue,
which penalty the Corporation may recover for its use.
"(2) APPLICABILITY. -- This subsection shall not apply to
conduct with respect to any default that is due to a dispute
between the insured System bank and the Corporation over the
amount of such premium if such bank deposits security satisfactory
to the Corporation for payment on final determination of the
issue.
"(d) EMPLOYMENT OF PERSONS CONVICTED OF CRIMINAL OFFENSES. --
"(1) IN GENERAL. -- Except with the prior written consent of
the Farm Credit Administration, it shall be unlawful for any
person convicted of any criminal offense involving dishonesty or a
breach of trust to serve as a director, officer, or employee of
any insured System bank.
"(2) PENALTY. -- For each willful violation of paragraph (1),
the bank involved shall be subject to a penalty of not more than
$100 for each day during which the violation continues, which the
Corporation may recover for its use.".
(a) CLARIFICATION OF JOINT AND SEVERAL LIABILITY. -- Subsection (a)
of section 4.4 (12 U.S.C. 2155(a)) is amended to read as follows;
(a)(1) Each bank of the System shall be fully liable on notes, bonds,
debentures, or other obligations issued by it individually, and shall be
liable for the interest payments on long-term notes, bonds, debentures,
or other obligations issued by other banks operating under the same
title of this Act.
(2)(A) Each bank shall also be primarily liable for the portion of
any issue of condolidated or System-wide obligations made on its behalf
and be jointly and severally liable for the payment of any additional
sums as called upon by the Farm Credit Administration in order to make
payments of interest or principal which any bank primarily liable
therefor shall be unable to make.
(B) Such calls first shall be made on all nondefaulting banks in
proportion to each such bank's proportionate share of the aggregate
available collateral held by all such banks.
"(C) For purposes of this paragraph, the term 'available collateral'
means the amount (determined at the close of the last calendar quarter
ending before such call) by which a bank's collateral as described in
section 4.3 exceeds the collateral required to support the bank's
outstanding notes, bonds, debentures, and other similar obligations.
"(D) If the Farm Credit Administration makes any such call and the
available collateral of all such banks does not fully satisfy the
liability necessitating such calls, such calls shall be made on all
nondefaulting banks in proportion to each such bank's remaining assets.
"(E) Any System bank that, pursuant to a call by the Farm Credit
Administration, makes a payment of principal or interst to the holder of
any consolidated or System-wide obligation issued on behalf of another
System bank shall be subrogated to all rights of the holder against such
other bank to the extent of such payment.
"(F) On making such a call with respect to obligations issued on
behalf of a System bank, the Farm Credit Administration shall appoint a
receiver for the bank, which shall expeditiously liquidate or otherwise
wind up the affairs of the bank.".
(b) INSURANCE FUND CALLED ON BEFORE INVOKING JOINT AND SEVERAL
LIABILITY. -- Section 4.4 (12 U.S.C. 2155) is amended by adding at the
end thereof the following new subsection:
"(e) Beginning 5 years after the date of the enactment of this
subsection, the Farm Credit Administration shall not call on any System
institution to satisfy the liability of the institution on any joint,
consolidated, or System-wide obligation participated in by the
institution or with respect to which the institution is primarily, or
jointly and severally, liable, before the Farm Credit Insurance Fund is
exhausted, even if the Fund is only able to make a partial payment
because of insufficient amounts in the Fund.".
Subsection (c) of section 4.3 (12 U.S.C. 2154(c)) is amended to read
as follows:
"(c) Each bank shall have on hand at the time of issuance of any
note, bond, debenture, or other similar obligation and at all times
thereafter maintain, free from any lien or other pledge, notes and other
obligations representing loans made under this Act or real or personal
property acquired in connection with loans made under this Act,
obligations of the United States or any agency thereof direct or fully
guaranteed, other bank assets (including marketable securities) approved
by the Farm Credit Administration, or cash, in an aggregate value equal
to the total amount of notes, bonds, debentures, or other similar
obligations outstanding for which the bank is primarily liable.".
POWER.
Section 2.5 (12 U.S.C. 2076)is amended --
(1) in the title, by inserting "; AUTHORITY TO PASS ALONG COST
OF INSURANCE PREMIUMS" before the period;
(2) by inserting "(a)" before "The Federal"; and
(3) by adding at the end thereof the following new subsection:
"(b) Each Federal intermediate credit bank may assess each production
credit association and other financing institution described in section
2.3(a)(2) in the district in which the bank is located to cover the
costs of making premium payments under part E of title V. The
assessment on any such association or other financing institution for
any calendar year shall not exceed the sum of --
"(1) the annual average principal outstanding for such year on
loans made by the association, or on loans made by the other
financing institution and discounted with the Federal intermediate
credit bank, that are in accrual status, multiplied by 0.0015;
and
"(2) the annual average principal outstanding for such year on
loans made by the association, or on loans made by the other
financing institution and discounted with the Federal intermediate
credit bank, that are in nonaccrual status, multiplied by
0.0025.".
Section 4.12(b) (12 U.S.C. 2183(b)) is amended --
(1) by striking out the period at the end of paragraph (5) and
inserting in lieu thereof a semicolon;
(2) by inserting after paragraph (5) the following new
paragraph: "(6) the institution is unable to timely pay principal
or interest on any insured obligation (as defined in section 5.51
(3)) issued by the institution."; and
(3) in the second sentence by inserting before the period at
the end thereof the following: ", and such receiver or
conservator, after the 5-year period beginning on the date of the
enactment of the Agricultural Credit Act of 1987, shall be the
Farm Credit System Insurance Corporation".
ASSOCIATIONS CHARTERS.
Effective 6 months after the date of enactment of this Act, titles I
and II of the Farm Credit Act of 1971 (12 . U.S.C. 2000 et seq.) are
amended to read as follows:
BRANCHES.
"(a) ESTABLISHMENT. -- The banks established pursuant to the merger
of each District Federal Intermediate Credit Bank and Federal Land Bank
(hereinafter referred to in this title as 'FARM Credit Banks') shall be
Federally chartered instrumentalities of the United States.
"(b) CHARTERS. -- The charters or organization certificates of Farm
Credit Banks may be modified from time to time by the Farm Credit
Administration Board, not inconsistent with the provisions of this
title, as may be necessary or expedient to implement this Act.
"(c) TITLE. -- Each Farm Credit Bank may include in its title the
name of the city in which it is located or other geographical
designation.
"(d) BRANCHES. -- Each Farm Credit Bank may establish such branches
or other offices as may be appropriate for the effective operation of
its business.
"Each Farm Credit Bank shall elect from its voting stockholders a
board of directors of such number, for such term, in such manner, and
with such qualifications, as may be required in its bylaws, except that,
at least one member shall be elected by the other directors, which
member shall not be a director, officer, employee, or stockholder of a
System institution.
"Each Farm Credit Bank shall be a body corporate and, subject to
regulation by the Farm Credit Administration, shall have power to --
"(1) adopt and use a corporate seal;
"(2) have succession until dissolved under the provisions of
this Act or other Act of Congress;
"(3) make contracts;
"(4) sue and be sued;
"(5) acquire, hold, dispose, and otherwise exercise all the
usual incidents of ownership of real and personal property
necessary or convenient to its business;
"(6) make, participate in, and discount loans, make commitments
for credit, accept advance payments, and provide services as
authorized in this Act, and charge fees for such;
"(7) operate under the direction of its board of directors;
"(8) provide by its board of directors for a president, one or
more vice presidents, a secretary, a treasurer, and provide for
such other officers, employees, and agents as may be necessary, as
provided in this Act, define their duties, and require surety
bonds or make other provision against losses occasioned by
employees;
"(9) prescribe by its board of directors --
"(A) the bylaws of such bank that shall not be inconsistent
with law, providing for the classes of the stock of the bank and
the manner in which such stock shall be issued, transferred, and
retired;
"(B) the officers, employees, and agents of the bank as
provided for;
"(C) the property of the bank acquired, held, and transferred;
"(D) the loans and discounts made by the bank;
"(E) the general business conducted by the bank; and
"(F) the privileges granted to the bank by law exercised and
enjoyed;
"(10) borrow money and issue notes, bonds, debentures, or other
obligations individually, or in concert with one or more other
banks of the System of such character, terms, conditions, and
rates of interest as may be determined as provided for in this
Act;
"(11) purchase nonvoting stock in, or pay in surplus to, and
accept deposits or securities of funds from associations in its
district, and pay interest on such funds;
"(12) participate with --
"(A) one or more other Farm Credit Banks in loans under this
title on such terms as may be agreed on among such banks;
"(B) participate with one or more other Farm Credit System
institutions in loans made under this title or other titles on the
basis prescribed in section 4.18; and
"(C) participate with lenders that are not Farm Credit System
institutions in loans that the bank is authorized to make under
this title;
"(13) approve the salary scale of the officers and employees of
the associations in its district, and the appointment and
compensation of the chief executive officer thereof, and supervise
the exercise by such associations of the functions vested in or
delegated to them;
"(14) deposit the securities and current funds of the bank with
any member bank of the Federal Reserve System or any insured State
nonmember bank as definded in section 3 of the Federal Deposit
Insurance Act and pay fees and receive interest on such as may be
agreed, and when designated for that purpose by the Secretary of
the Treasury, such bank --
"(A) shall be a depository of public money, except receipts
from customs, under such regulations as may be prescribed by the
Secretary;
"(B) may be employed as a fiscal agent of the Government; and
"(C) shall perform all such reasonable duties as a depository
of public money or financial agent of the Government as may be
required of such bank;
except that no Government funds deposited under the provisions
of this paragraph shall be invested in loans or bonds or other
obligations of the bank;
"(15) buy and sell obligations of, or insured by, the United
States or any agency thereof, or securities backed by the full
faith and credit of any such agency, and make other investments as
may be authorized under regulations issued by the Farm Credit
Administration;
"(16) sell to lenders that are not Farm Credit System
institutions interests in loans, and buy from and sell to Farm
Credit System institutions interests in loans and other extensions
of credit, and nonvoting stock as may be authorized under
regulations issued by the Farm Credit Administration;
"(17) conduct studies and make and adopt standards for lending;
"(18) delegate to Federal land bank associations such functions
as the bank determines appropriate;
"(19) amend and modify loan contracts, documents, and payment
schedules, and release, subordinate, or substitute security for
any of such items;
"(20) for loans made by the bank, require associations to
endorse notes and other obligations of borrowers from the bank;
"(21) exercise through the board of directors or authorized
officers, employees, or agents of the bank, all such incidental
powers as may be necessary or expedient to carry on the business
of the bank;
"(22) accept contributions to the capital of the bank from
associations and account for such as authorized by the Farm Credit
Administration; and
"(23) as may be authorized by the board of directors of the
bank and approved by the Farm Credit Administration Board, agree
with other Farm Credit System institutions to share loan and other
losses, whether to protect against capital impairment or for any
other purpose.
"In accordance with section 4.3A, the Farm Credit Banks shall
provide, through bylaws and subject to Farm Credit Administration
regulations, for the capitalization of the bank and the manner in which
bank stock shall be issued, held, transferred, and retired and bank
earnings distributed.
"(a) REAL ESTATE LOANS. -- The Farm Credit Banks are authorized to
make or participate with other lenders in long-term real estate mortgage
loans in rural areas, as defined by the Farm Credit Administration, or
to producers or harvesters of aquatic products, and make continuing
commitments to make such loans under specified circumstances, for a term
of not less than 5 nor more than 40 years.
"(b) INTERMEDIATE CREDIT. --
"(1) IN GENERAL. -- The Farm Credit Banks are authorized to
make loans and extend other similar financial assistance to and to
discount for or purchase from --
"(A) any production credit association, or
"(B) any national bank, State bank, trust company, agricultural
credit corporation, incorporated livestock loan company, savings
institution, credit union, or any association of agricultural
producers engaged in the making of loans to farmers and ranchers,
and any corporation engaged in the making of loans to producers or
harvesters of aquatic products,
any note, draft, or other obligation with the institution's
endorsement or guarantee, the proceeds of which note, draft, or
other obligation have been advanced to persons and for purposes
eligible for financing by production credit associations as
authorized by this Act.
"(2) PARTICIPATION WITH OTHER ENTITIES. -- The Farm Credit
Banks may participate with one or more production credit
associations or other Farm Credit Banks in the making of loans to
eligible borrowers and may participate with one or more other Farm
Credit System institutions in loans made under this title or other
titles of this Act on the basis prescribed in section 4.18 of this
Act. The banks may own and lease or lease with option to purchase
to persons eligible for assistance under this title, equipment
needed in the operations of such persons.
"(3) LIMITATIONS ON EXTENSION OF FINANCIAL ASSISTANCE. --
"(A) GENERAL RULE. -- No paper shall be purchased from or
discounted for, and no loans shall be made or other similar
financial assistance extended by a Farm Credit Bank to any entity
identified in paragraph (1) (B) of this subsection if the amount
of such paper added to the aggregate liabilities of such entity,
whether direct or contingent (other than bona fide deposit
liabilities), exceeds ten times the paid-in and unimpaired capital
and surplus of such entity or the amount of such liabilities
permitted under the laws of the jurisdiction creating such
institution, whichever is the lesser.
"(B) LIMITATION ON NATIONAL BANK. -- It shall be unlawful for
any national bank which is indebted to any Farm Credit Bank, on
paper discounted or purchased under paragraph (1), to incur any
additional indebtedness, if by virtue of such additional
indebtedness its aggregate liabilities direct or contingent, will
exceed the limitation herein contained.
"(4) FCA REGULATIONS. --
"(A) IN GENERAL. -- All of the loans, financial assistance,
discounts and purchases authorized by this section shall be
subject to regulations of the Farm Credit Administration and shall
be secured by collateral, if any, as may be required in such
regulations.
"(B) REQUIREMENT OF REGULATIONS. -- The regulations shall
assure that such loans, financial assistance, discounts, and
purchases are available on a reasonable basis to any financing
institution authorized to receive such services under paragraph
(1)(B) of this subsection, and that --
"(i) is significantly involved in lending for agricultural or
aquatic purposes;
"(ii) demonstrates a continuing need for supplementary sources
of funds to meet the credit requirements of its agricultural or
aquatic borrowers;
"(iii) has limited access to national or regional capital
markets; and
"(iv) does not use such services to expand its financing
activities to persons and for purposes other than those authorized
under title II.
"(C) FEES. -- The regulations may authorize a Farm Credit Bank
to charge reasonable fees for any commitment to extend service
under this section to such a financing institution.
"(D) SUBSIDIARIES AND AFFILIATES. -- For purposes of this
subsection, a financing institution together with the subsidiaries
and affiliates of such may be considered as one, but such
determination to consider such institution together with the
subsidiaries and affiliates of such as one shall be made in the
first instance by the bank and in the event of a denial by the
bank of its services to a financial institution, then by the Farm
Credit Administration on a case-by-case basis with due regard to
the total relationship of the financing institution, its,
subsidiaries, and affiliates.
"(5) EFFECTIVE DATE. -- Nothing in this section shall require
termination of discount relationships in existence on the
effective date of the Farm Credit Act Amendments of 1980.
"(a) IN GENERAL. -- Loans and discounts made by a Farm Credit Bank
shall bear interest at a rate or rates, and on such terms and
conditions, as may be determined by the board of directors of the bank
from time to time.
"(b) SETTING RATES AND CHARGES. -- In setting rates and charges, it
shall be the objective to provide the types of credit needed by eligible
borrowers at the lowest reasonable costs on a sound business basis
taking into consideration the cost of money to the bank, necessary
reserve and expenses of the bank and associations, and providing
services to members. The loan documents or discounting and financing
agreements, may provide for the interest rate or rates to vary from time
to time during the repayment period of the loan or agreement.
"The credit and financial services authorized in this title may be
made available to persons who are or become stockholders or members of
the bank or associations in the district, and who are --
"(1) bona fide farmers, ranchers, or producers or harvesters of
aquatic products;
"(2) persons furnishing to farmers and ranchers farm-related
services directly related to their on-farm operating needs; or
"(3) owners of rural homes.
"(a) REAL ESTATE LOANS. --
"(1) MAXIMUM LEVEL OF LOANS. --
"(A) IN GENERAL. -- Real estate mortgage loans originated by a
Farm Credit Bank, or in which a Farm Credit Bank paticipates in
with a lender that is not a System institution, shall not exceed
85 percent of the appraised value of the real estate security,
except as provided for in paragraphs (2) and(3).
"(B) REGULATION. -- The Farm Credit Administration may, by
regulation, require that loans not exceed 75 percent of the
appraised value of the real estate security.
"(C) GUARANTEED LOANS. -- If the loan is guaranteed by
Federal, State, or other governmental agencies, the loan may not
exceed 97 percent of the appraised value of the real estate
security, as may be authorized under regulations of the Farm
Credit Administration.
"(2) SECURITY. -- All loans originated or participated in by a
bank under this section shall be secured by first liens on
interests in real estate of such classes as may be approved by the
Farm Credit Administration.
"(3) VALUE OF SECURITY. -- To adequately secure the loan, the
value of security shall be determined by appraisal under appraisal
standards prescribed by the bank and approved by the Farm Credit
Administration.
"(4) ADDITIONAL SECURITY. -- Additional security for any loan
may be required by the bank to supplement real estate security.
Credit factors, other than the ratio between the amount of the
loan and the security value, shall be given due consideration.
"(5) FINANCIAL STATEMENT. -- Each Farm Credit Bank shall
require a financial statement from each borrower at least once
every 3 years, or during such shorter period of time as may be
required under regulations of the Farm Credit Administration.
"(b) INTERMEDIATE CREDIT. -- Loans, other than real estate loans,
and discounts made under the provisions of this title shall be repayable
in not more than 7 years (15 years if made to producers or harvester of
aquatic products) from the time that such are made or discounted by the
Farm Credit Bank, except that the Board of Directors, under regulations
of the Farm Credit Administration, may approve policies permitting
loans, advances, or discounts (other than those made to producers or
harvesters of aquatic products) to be repayable in not more than 10
years from the time that such are made or discounted by such bank.
CREDIT.
"(a) AGRICULTURAL OR AQUATIC PURPOSES. -- Loans made by a Farm
Credit Bank to farmers, ranchers, and producers or harvesters of aquatic
products may be for any agricultural or aquatic purpose and other credit
needs of the applicant, including financing for basic processing and
marketing directly related to the applicant's operations and those of
other eligible farmers, ranchers, and producers or harvesters of aquatic
products, except that the operations of the applicant shall supply at
least 20 percent, or such larger percent as may be required by the board
of directors of the bank under regulations of the Farm Credit
Administration, of the total processing or marketing for which financing
is extended.
"(b) RURAL HOUSING FINANCING. --
"(1) IN GENERAL. -- Loans and discounts may be made to rural
residents for rural housing financing under regulations of the
Farm Credit Administration.
"(2) LIMITATIONS. -- Rural housing financed under this title
shall be for single-family, moderate-priced dwellings and their
appurtenances not inconsistent with the general quality and
standards of housing existing in, or planned or recommended for,
the rural area where it is located, except that a Farm Credit Bank
may not at any one time have a total amount of loans outstanding
for such rural housing to persons other than farmers or ranchers
in amounts exceeding 15 percent of the total of all loans
outstanding in such bank.
"(3) RURAL AREAS. -- For rural housing purposes under this
section the term 'rural areas' shall not be defined to include any
city or village having a population in excess of 2,500
inhabitants.
"(c) FARM-RELATED SERVICES. --
"(1) IN GENERAL. -- Loans to persons furnishing farm-related
services to farmers and ranchers directly related to their on-farm
operating needs may be made for the necessary capital structures
and equipment and initial working capital for such services.
"(2) FACILITIES. -- The banks may own and lease, or lease with
option to purchase, to persons eligible for credit under this
title, facilities needed in the operations of such persons.
"The Farm Credit Banks may provide technical assistance to borrowers,
members, and applicants from the bank and associations in the district,
including persons obligated on paper discounted by the bank, and may
make available to them at their option such financial related services
appropriate to their on-farm and aquatic operations as determined to be
feasible by the board of directors of each district bank, under
regulations of the Farm Credit Administration.
AGENTS.
"(a) IN GENERAL. -- The Farm Credit Banks shall, except as otherwise
herein provided, make loans of the type authorized under section 1.7(a)
through a Federal land bank association chartered to serve the territory
in which the real estate of the borrower is located.
"(b) NO ACTIVE ASSOCIATION. -- If there is no active association
chartered to serve territory where the real estate is located, the bank
may make the loan directly or through such bank or trust company or
savings or other financial institution as such bank may designate.
"(c) PURCHASE OF STOCK REQUIRED. -- When the loan is not made
through a Federal land bank association, the applicant shall purchase
stock in the bank in accordance with the capitalization requirements
provided for in the bylaws of the bank.
"The Farm Credit Banks shall have a first lien on the stock or
participation certificates it issues for the payment of any liability of
the stockholders to the bank.
"The Farm Credit Banks and the capital, reserves, and surplus
thereof, and the income derived therefrom shall be exempt from Federal,
State, municipal, and local taxation, except taxes on real estate held
by a Farm Credit Bank to the same extent, according to its value, as
other similar property held by other persons is taxed. The mortgages
held by the Farm Credit Banks and the notes, bonds, debentures, and
other obligations issued by the banks shall be considered and held to be
instrumentalities of the United States and, as such, they and the income
therefrom shall be exempt from all Federal, State, municipal, and local
taxation, other than Federal income tax liability of the holder thereof
under the Public Debt Act of 1941 (31 U.S.C. 742(a)).
"(a) CHARTER. -- Each production credit association shall continue
as a Federally chartered instrumentality of the United States.
"(b) ORGANIZATION. --
"(1) IN GENERAL. -- Production credit associations may be
organized by 10 or more farmers or ranchers or producers or
harvesters of aquatic products desiring to borrow money under the
provisions of this title.
"(2) ARTICLES OF ASSOCIATION. -- The proposed articles of
association shall be forwarded to the Farm Credit Bank for the
district accompanied by an agreement to subscribe on behalf of the
association for stock in the bank in such amounts as may be
required by the bank.
"(3) CONTENTS OF ARTICLES. -- The articles shall specify in
general terms the --
"(A) objects for which the association is formed;
"(B) the powers to be exercised by the association in carrying
out the functions authorized by this part; and
"(C) the territory the association proposes to serve.
"(4) SIGNATURES. -- The articles shall be signed by persons
desiring to form such an association and shall be accompanied by a
statement signed by each such person establishing eligibility to
borrow from the association in which such person will become a
stockholder.
"(5) COPY TO FCA. -- A copy of the articles of association
shall be forwarded to the Farm Credit Administration with the
recommendations of the bank concerning the need for such an
association in order to adequately serve the credit needs of
eligible persons in the proposed territory and whether that
territory includes any area described in the charter of another
production credit association.
"(6) DENIAL OF CHARTER. -- The Farm Credit Administration for
good cause shown may deny the charter.
"(7) APPROVAL OF ARTICLES. -- On approval of the proposed
articles by the Farm Credit Administration, and on the issuance of
a charter, the association shall become as of such date a
federally chartered body corporate and an instrumentality of the
United States.
"(8) POWERS OF FCA. -- The Farm Credit Administration shall
have the power, under rules and regulations prescribed by the Farm
Credit Administration or by prescribing in the terms of the
charter or by approval of bylaws of the association to --
"(A) provide for the organization of the association;
"(B) provide for the initial amount of stock of the
association;
"(C) provide for the territory within which the association's
operations may be carried on; and
"(D) direct at any time such changes in the charter as the Farm
Credit Administration finds necessary for the accomplishment of
the purposes of this Act.
"Each production credit association shall elect from the voting
members of such association, a board of directors of such number, for
such terms, with such qualifications, and in such manner as may be
required by the bylaws of the association, except that, at least one
member shall be elected by the other directors, which member shall not
be a director, officer, employee, or stockholder of a System
institution.
"Each production credit association shall be a body corporate and,
subject to supervision by the Farm Credit Bank for the district and
regulation by the Farm Credit Administration, shall have the power to --
"(1) have succession until terminated in accordance with this
Act or any other Act of Congress;
"(2) adopt and use a corporate seal;
"(3) make contracts;
"(4) sue and be sued;
"(5) acquire, hold, dispose, and otherwise exercise all of the
usual incidents of ownership of real and personal property
necessary or convenient to the business of the association;
"(6) operate under the direction of the board of directors of
the association in accordance with the provisions of this Act;
"(7) subscribe to stock of the bank;
"(8) purchase stock of the bank held by other production credit
associations and stock of other production credit associations;
"(9) contribute to the capital of the bank or other production
credit associations;
"(10) invest funds of the association as may be approved by the
Farm Credit Bank under regulations of the Farm Credit
administration and deposit the current funds and securities of
such with the Farm Credit Bank, a member bank of the Federal
Reserve System, or any bank insured under the Federal Deposit
Insurance Corporation, and may pay fees therefor and receive
interest thereon as may be agreed;
"(11) buy and sell obligations of or insured by the United
States or of any agency thereof or of any banks of the Farm Credit
System and buy from and sell to such banks, interests in loans and
in other financial assistance extended and nonvoting stock, as may
be authorized by the Farm Credit Bank in accordance with
regulations of the Farm Credit Administration;
"(12) borrow money from the Farm Credit Bank, and with the
approval of such bank, borrow from and issue notes or other
obligations to any commercial bank or other financial institution;
"(13) make and participate in loans, accept advance payments,
and provide services and other assistance as authorized in this
subtitle and charge fees therefor, and when authorized by the bank
participate with one or more other Farm Credit System institutions
in loans made under this title or other titles of this Act on the
basis prescribed in section 4.18 of this Act;
"(14) endorse and become liable on loans discounted or pledged
to the Farm Credit Bank;
"(15) as may be authorized by the Farm Credit Bank in
accordance with regulations of the Farm Credit Administration,
agree with other Farm Credit System institutions to share loan or
other losses, whether to protect against capital impairment or for
any other purpose;
"(16) prescribe by the board of directors of the association
the bylaws not inconsistent with law providing for --
"(A) the classes of association stock and the manner in which
the stock shall be issued, transferred, and retired;
"(B) the officers and employees elected or provided for;
"(C) the property acquired, held, and transferred by the
association; and
"(D) the general business conducted, and the privileges granted
to the association by law exercised and enjoyed;
"(17) elect by the board of directors of the association a
manager or other chief executive officer, and provide for such
other officers or employees as may be necessary, including joint
employees as provided in this Act, define their duties, and
require surety bonds or make other provisions against losses
occasioned by employees, but no director shall, within one year
after the date when such director ceases to be a member of the
board, be elected or designated a salaried employee of the
association on the board of which he served;
"(18) elect by the board of directors of the association a loan
committee with power to approve applications for membership in the
association and loans or participations or, with the approval of
the bank, delegate the approval of applications for membership and
loans or participations within specified limits to other
committees or to authorized officers and employees of the
association;
"(19) perform any functions delegated to the association by the
bank; and
"(20) exercise by the board of directors or authorized officers
or employees of the association, all such incidental powers as may
be necessary or expedient to carry on the business of the
association.
CAPITALIZATION.
"(a) IN GENERAL. -- In accordance with section 4.3A, each production
credit association shall provide, through its bylaws and subject to Farm
Credit Administration regulations, for its capitalization and the manner
in which its stock shall be issued, held, transferred, and retired and,
except as provided in subsection (b), its earnings distributed.
"(b) APPLICATION OF EARNINGS. -- Each production credit association
at the end of each fiscal year shall apply the amount of the earnings of
the association for such year in excess of the operating expenses of the
association (including provision for valuation reserves against loan
assets in an amount equal to one-half of 1 percent of the loans
outstanding at the end of the fiscal year to the extent that such
earnings in such year in excess of other operating expenses permit, or
in such greater amounts as are deemed necessary under generally accepted
accounting principles, until such reserves equal or exceed 3 1/2 percent
of the loans outstanding at the end of the fiscal year, beyond which 3
1/2 percent further additions to such reserves may be made, if deemed
necessary under generally accepted accounting principles) first to the
restoration of the impairment, if any, of capital, and second, to the
establishment and maintenance of the surplus accounts, the minimum
aggregate maintenance of the surplus accounts, the minimum aggregate
amount of which shall be prescribed by the Farm Credit Bank.
"(c) PATRONAGE. -- When the bylaws of an association so provide and
subject to the general directions of the Farm Credit Administration,
available net earnings at the end of any fiscal year may be distributed
on a patronage basis in stock, participation certificates, or in cash.
Any part of the earnings of the fiscal year in excess of the operating
expenses for such year held in the surplus account may be allocated to
patrons on a patronage basis.
LOANS; PARTICIPATION; OTHER FINANCIAL ASSISTANCE;
TERMS;
CONDITIONS; INTEREST; SECURITY.
"(a) SHORT- AND INTERMEDIATE-TERM LOANS. -- Each production credit
association, under standards prescribed by the board of directors of the
Farm Credit Bank of the district, may make, quarantee, or participate
with other lenders in short- and intermediate-term loans and other
similar financial assistance to --
"(1) bona fide farmers and ranchers and the producers or
harvesters of aquatic products, for agricultural or aquatic
purposes and other requirements of such borrowers, including
financing for basic processing and marketing directly related to
the operations of the borrower and those of other eligible
farmers, ranchers, and producers or harvesters of aquatic products
except that the operations of the borrower shall supply at least
20 percent, or such larger percent as is required by the
supervising bank under regulations of the Farm Credit
Administration, of the total processing or marketing for which
financing is extended;
"(2) rural residents for housing financing in rural areas,
under regulations of the Farm Credit Admistration; and
"(3) persons furnishing to farmers and ranchers farm-related
services directly related to their on-farm operating needs.
"(b) RURAL HOUSING. --
"(1) IN GENERAL. -- Rural housing financed under this title
shall be for single-family, moderate-priced dwellings and the
appurtenances of such not inconsistent with the general quality
and standards of housing existing in, planned or recommended for,
the rural area where it is located.
"(2) LIMITATION. -- The aggregate of such housing loans in an
association to persons other than farmers or ranchers shall not
exceed 15 percent of the outstanding loans at the end of its
preceding fiscal year except on prior approval by the Farm Credit
Bank of the district. The aggregate of such housing loans in any
farm credit district shall not exceed 15 percent of the
outstanding loans of all associations in the district at end of
the preceding fiscal year.
"(3) RURAL AREAS. -- For rural housing purposes under this
section the term 'rural areas' shall not be defined to include any
city or village having a population in excess of 2,500
inhabitants.
"(4) EQUIPMENT. -- Each association may own and lease, or
lease with option to purchase, to stockholders of the association
equipment needed in the operation of the stockholder.
"(c) INTEREST RATES AND CHARGES. --
"(1) IN GENERAL. -- Loans authorized in subsection (a) hereof
shall bear such rate or rates of interest as are determined under
standards prescribed by the board of the bank subject to the
provisions of section 4.17 of this Act, and shall be made upon
such terms, conditions, and upon such security, if any, as shall
be authorized in such standards.
"(2) SETTING OF RATES. -- In setting rates and charges, it
shall be the objective to provide the types of credit needed by
eligible borrowers, at the lowest reasonable cost on a sound
business basis, taking into account the cost of money to the
association, necessary reserves and expenses of the association,
and services provided to borrowers and members.
"(3) VARYING RATES. -- The loan documents may provide for the
interest rate or rates to vary from time to time during the
repayment period of the loan in accordance with the rate or rates
currently being charged by the association.
"(4) PRIOR APPROVAL. -- Such standards may require prior
approval of the bank on certain classes of loans, and may
authorize a continuing commitment to a borrower of a line of
credit.
"Each production credit association may provide technical assistance
to borrowers, applicants, and members and may make available to them at
their option such financial related services appropriate to their
on-farm and aquatic operations as is determined feasible by the board of
directors of each Farm Credit Bank, under regulations prescribed by the
Farm Credit Administration.
"Each production credit association and its obligations are
instrumentalities of the United States and as such any and all notes,
debentures, and other obligations issued by such associations shall be
exempt, both as to principal and interest from all taxation (except
surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed
by the United States or any State, territorial, or local taxing
authority.
CHARTERS; POWERS OF THE FARM CREDIT ADMINISTRATION.
"(a) CHARTER. -- Each Federal land bank association shall continue
as a federally chartered instrumentality of the United States.
"(b) ORGANIZATION. --
"(1) IN GENERAL. -- A Federal land bank association may be
organized by any group of 10 or more persons desiring to borrow
money from a Farm Credit Bank, including persons to whom the Farm
Credit Bank has made a loan directly or through an agent and has
taken as security real estate located in the territory proposed to
be served by the association.
"(2) ARTICLES OF ASSOCIATION. --
"(A) DESCRIPTION OF TERRITORY. -- The articles of association
shall describe the territory within which the association proposes
to carry on its operations.
"(B) SUBMISSION TO FCA. -- Proposed articles shall be
forwarded to the Farm Credit Bank for the district, accompanied by
an agreement to subscribe on behalf of the association for stock
in accordance with the bylaws of the Farm Credit Bank.
"(C) STOCK PURCHASE. -- Association stock may be paid for by
surrendering for cancellation stock in the bank held by a borrower
and the issuance of an equivalent amount of stock to such borrower
in the association.
"(D) STATEMENT. -- The articles shall be accompanied by a
statement signed by each of the members of the proposed
association establishing --
"(i) the individual's eligibility for, and request or need of
the individual of a Farm Credit Bank loan;
"(ii) that the real estate with respect to which the individual
desires the loan for is not being served by another Federal land
bank association; and
"(iii) that the individual is or will become a stockholder in
the proposed association.
"(E) SUBMISSION TO FCA. -- A copy of the articles of
association shall be forwarded to the Farm Credit Administration
with the recommendations of the bank concerning the need for the
proposed association in order to adequately serve the credit needs
of eligible persons in the proposed territory and a statement as
to whether or not the territory includes any territory described
in the charter of another Federal land bank association.
"(3) DENIALS OF CHARTERS. -- The Farm Credit Administration
for good cause shown may deny the charter applied for.
"(4) APPROVAL OF ARTICLES. -- On the approval of the proposed
articles by the Farm Credit Administration and the issuance of
such charter, the association shall become as of such date a
federally chartered body corporate and an instrumentality of the
United States.
"(c) FCA AUTHORITY ON ORGANIZATION. -- The Farm Credit
Administration shall have power, in the terms of the charter, under
rules and regulations prescribed by the Farm Credit Administration or by
approving the bylaws of the association, to provide for the --
"(1) organization of the association;
"(2) the initial amount of stock of such association;
"(3) the territory within which the operations of the
association may be carried on; and
"(4) to direct at any time changes in the charter of such
association as the Farm Credit Administration finds necessary in
accomplishing the purposes of this Act.
"Each Federal land bank association shall elect from its voting
shareholders a board of directors of such number, for such terms, in
such manner, and with such qualifications as may be required by its
bylaws except that, at least one member shall be elected by the other
directors, which member shall not be a director, officer, employee, or
stockholder of a System institution.
"Each Federal land bank association shall be a body corporate and,
subject to supervision of the Farm Credit Bank for the district and the
regulation of the Farm Credit Administration, shall have the power to --
"(1) adopt and use a corporate seal;
"(2) have succession until dissolved under the provisions of
this Act or other Act of Congress;
"(3) make contracts;
"(4) sue and be sued;
"(5) acquire, hold, dispose, and otherwise exercise all of the
usual incidents of ownership of real estate and personal property
necessary or convenient to the business of the association;
"(6) operate under the direction of the board of directors of
the association in accordance with this Act;
"(7) elect by its board of directors a manager or other chief
executive officer, and provide for such other officers or
employees as may be necessary, including joint employees as
provided in this Act, define the duties of such, and require
surety bonds or make other provision against losses occasioned by
employees, except that no director shall, within one year after
the date when such director ceases to be a member of the board, be
elected or designated a salaried employee of the association on
the board of which such director served;
"(8) prescribe by its board of directors, association bylaws,
not inconsistent with law, providing for the classes of
association stock and the manner in which such stock shall be
issued, transferred, and retired; the officers and employees of
the association elected or provided for, the property of the
association that is acquired, held, and transferred, the general
business of the association conducted, and the privileges granted
to the association by law exercised and enjoyed;
"(9) accept applications for Farm Credit Bank loans and receive
from such bank and disburse to the borrowers the proceeds of such
loans;
"(10) subscribe to stock of the Farm Credit Bank of the
district;
"(11) elect by its board of directors a loan committee with
power to elect applicants for membership in the association and
recommend loans to the Farm Credit Bank, or with the approval of
the Farm Credit Bank, delegate the election of applicants for
membership and the approval of loans within specified limits to
other committees or to authorized employees of the association;
"(12) on agreement with the bank, take such additional actions
with respect to applications and loans and perform such functions
as are vested by law in the Farm Credit Banks as may be agreed to
or delegated to the association;
"(13) endorse and become liable to the bank on loans it makes
to association members;
"(14) receive such compensation and deduct such sums from loan
proceeds with respect to each loan as may be agreed between the
association and the bank and make such other charges for services
as may be approved by the bank;
"(15) provide technical assistance to members, borrowers,
applicants, and other eligible persons and make available to them,
at their option, such financial related services appropriate to
their operations as it determines, with Farm Credit Bank approval,
are feasible, under regulations of the Farm Credit Administration;
"(16) borrow money from the bank and, with the approval of such
bank, borrow from and issue association notes or other obligations
to any commercial bank or other financial institution;
"(17) buy and sell obligations of or insured by the United
States or any agency thereof or of any banks of the Farm Credit
System;
"(18) invest association funds in such obligations as may be
authorized in regulations of the Farm Credit Administration and
approved by the bank and deposit securities and current funds of
the association with any member bank of the Federal Reserve
System, with the Farm Credit Bank, or with any bank insured by the
Federal Deposit Insurance Corporation, and pay fees therefor and
receive interest thereon as may be agreed;
"(19) perform such other function delegated to the association
by the Farm Credit Bank of the district;
"(20) exercise by its board of directors or authorized officers
or agents all such incidental powers as may be necessary or
expedient in the conduct of its business; and
"(21) contribute to the capital of the bank.
CAPITALIZATION.
"In accordance with section 4.3A, the Federal land bank association
shall provide, through its bylaws and subject to Farm Credit
Administration regulations, for its capitalization and the manner in
which its stock shall be issued, held, transferred, and retired and its
earnings distributed.
"Whenever any Federal land bank association is liquidated, a sum
equal to its reserve account as required in this Act shall be paid and
become the property of the bank in which such association is a
shareholder.
LOSSES.
"Each Farm Credit Bank may enter into agreements with Federal land
bank associations in its district for sharing the gain or losses on
loans or on security held therefor or acquired in liquidation thereof,
and associations are authorized to enter into any such agreements and
also, subject to bank approval, agreements with other associations in
the district for sharing the risk of loss on loans endorsed by each such
association. As may be authorized by the bank in accordance with
regulations of the Farm Credit Administration, associations also may
enter into agreements with other Farm Credit System institutions to
share loan and other losses, whether to protect against capital
impairment or for any other purpose.
"Each Federal land bank association shall have a first lien on the
stock and participation certificates it issues, except on stock or
participation certificates held by other Farm Credit System
institutions, for the payment of any liability of the stockholder to the
association or to the bank, or to both of them.
"Each Federal land bank association and the capital, reserves, and
surplus thereof, and the income derived therefrom shall be exempt from
Federal, State, municipal, and local taxation, except taxes on real
estate held by a Federal land bank association to the same extent,
according to its value, as other similar property held by other persons
is taxed. The mortgages held by the Federal land bank associations and
the notes, bonds, debentures, and other obligations issued by the banks
shall be considered and held to be instrumentalities of the United
States and, as such, they and the income therefrom shall be exempt from
all Federal, State, municipal, and local taxation, other than Federal
income tax liability of the holder thereof under the Public Debt Act of
1941 (31 U.S.C. 742(a)).".
(a) IN GENERAL. -- Not later than 6 months after the date of the
enactment of this section, the Federal land bank and the Federal
intermediate credit bank of each district shall merge into a Farm Credit
Bank in such district pursuant to a plan of merger agreed on by the
Boards of Directors of such banks and approved by the Farm Credit
Administration, or if such banks fail to agree, a plan of merger
prescribed by the Farm Credit Administration.
(b) CAPITAL STOCK. -- The number of shares of capital stock issued
by a Farm Credit Bank to stockholders and other owners of the
institution involved in the merger, and the rights and privileges of
such shares (including voting power, redemption rights, preferences on
liquidation, and the right to dividends) shall be determed by the plan
of merger adopted by the merging banks, and shall be consistent with
section 4.3A and the regulations issued by the Farm Credit
Administration.
(c) ASSISTANCE. -- The Assistance Board shall direct the Financial
Assistance Corporation to provide any Farm Credit Bank with that amount
of financial assistance as is necessary to ensure that the stock of the
Farm Credit Bank, upon implementation of the merger, has a book value
equal to 75 percent of par, and such Farm Credit Bank shall be subject
to all of the requirements of title VI of the Farm Credit Act of 1971.
(d) INITIAL BOARD. -- The initial board of each Farm Credit Bank
shall be composed of the members of the district board (which is
dissolved upon the creation of such bank) elected by the production
credit associations, Federal land bank associations, and stockholders at
large. Such initial board shall operate for such term as is agreed to
by the members of the board, except that such period shall not exceed
two years. Thereafter the board shall be elected and serve in
accordance with the provisions of section 1.4 of the Farm Credit Act of
1971.
ASSOCIATIONS AND FEDERAL LAND BANK ASSOCIATIONS.
(a) SUBMISSION OF PROPOSAL. -- Not later than 6 months after the
date of the merger of the Federal land bank and the Federal intermediate
credit bank in a district, the Boards of Directors of each Federal land
bank association and each production credit association in such
district, that share substantially the same geographical territory with
each other, shall submit to the voting stockholders of each such
association for their approval, a plan, approved by the supervising bank
and the Farm Credit Administration, for merging such associations.
(b) PREREQUISITES TO MERGER. --
(1) STOCKHOLDER VOTE. -- The stockholder vote required for
approval of a merger under subsection (a) shall be a majority of
voting stockholders of each association voting, in person or by
written proxy, at a duly authorized stockholders meeting.
(2) SUBMISSION TO FCA. -- Not later than 60 days prior to the
end of the 6-month period beginning on the date of the enactment
of this section, the plan of merger under subsection (a), together
with all information to be presented to the stockholders, shall be
submitted to the Farm Credit Administration.
(3) EXPEDITED CONSIDERATION BY FCA. -- The Farm Credit
Administration shall expedite its consideration of the plan and
accompanying information submitted under paragraph (2) so that
review and approval of such plan and information shall be
completed by the Administration so as to enable a stockholder vote
to occur within the 6-month period referred to in paragraph (2).
(c) DIRECT LENDERS. -- On approval of a merger under this
subsection, the resulting association shall be a direct lender in the
same manner as applies to production credit associations.
SYSTEM DISTRICTS.
(a) SUBMISSION OF PROPOSAL. --
(1) SPECIAL COMMITTEE. --
(A) IN GENERAL. -- Not later than 6 months after the date of
the enactment of this section, a special committee shall be
selected pursuant to regulations of the Farm Credit Administration
for the purpose of developing a proposal for the consolidation of
Farm Credit System districts.
(B) COMPOSITION. -- The special committee selected under
subparagraph (A) shall be composed of one representative from each
Farm Credit Bank board and the members of the Board of Directors
of the Assistance Board.
(2) DEVELOPMENT OF PROPOSAL. -- Not later than 6 months after
the formation of the special committee, the committee shall
develop, a proposal to consolidate the Farm Credit System banks
into no less than six financially viable farm credit banks through
inter-district mergers.
(3) REPORT. -- Not later than the end of each calendar quarter
beginning at least 6 months after the selection of the special
committee, such committee shall prepare and submit, to the
Committee on Agriculture of the House of Representatives, and the
Committee on Agriculture, Nutrition, and Forestry of the Senate, a
report on the progress of the committee in developing a proposal
under this subsection.
(b) PREREQUISITES TO CONSOLIDATION. --
(1) FCA REVIEW OF PROPOSAL. -- Prior to the submission of the
proposal developed under subsection (b)(2) to the stockholders
under paragraph (2), the proposal together with all information to
be presented to the stockholders, shall be submitted to the Farm
Credit Administration for approval.
(2) PREREQUISITES. -- Proposals developed under subsection
(a)(2) shall not be submitted to stockholders under paragraph (3)
unless the proposal is approved by --
(A) a majority of the members of the Board of Directors of the
Assistance Board; and
(B) the members of the special committee that represent the
districts affected by the terms of the proposal.
(3) SUBMISSION TO STOCKHOLDERS. -- Not later than the end of
the 18-month period after the date of enactment of this Act, each
Farm Credit Bank involved, in consultation with the special
committee, shall submit the proposed merger affecting such bank to
the voting stockholders of each such bank.
(4) STOCKHOLDER VOTE. -- Each association shall be entitled to
cast a number of votes equal to the number of voting stockholders
of such association.
FOR COOPERATIVES.
(a) SUBMISSION OF PROPOSAL. --
(1) SPECIAL COMMITTEE. --
(A) IN GENERAL. -- Not later than 15 days after the date of
the enactment of this section, a special committee shall be
selected pursuant to subparagraph (B), for the purpose of
developing a proposal for the voluntary merger of the banks for
cooperatives.
(B) COMPOSITION. -- The special committee selected under
subparagraph (A) shall be composed of --
(i) one member of each district board elected by the voting
stockholders of the bank for cooperatives in the district; and
(ii) one member chosen from the board of directors of the
Central Bank for Cooperatives by the board of such Bank.
(C) DEVELOPMENT OF PLAN. -- Not later than 75 days after the
date of the enactment of this section, the special committee shall
develop a plan of merger for all such banks and the Central Bank
for Cooperatives into a National Bank for Cooperatives.
(2) PREREQUISITES TO MERGER. --
(A) SUBMISSION TO FCA. -- On completion of the plan of merger
pursuant to subparagraph (C), the special committee shall submit
the proposed plan, together with all information that is to be
distributed to the stockholders concerning such plan, to the Farm
Credit Administration for approval.
(B) EXPEDITED REVIEW. -- Not later than 30 days after the Farm
Credit Administration receives the plan of merger, the
Administration shall promptly review such Plan and advise the
special committee concerning any required changes that are
necessary to the plan.
"(3) SUBMISSION TO STOCKHOLDERS. -- On approval of the plan by
the Farm Credit Administration, the special committee shall, under
such procedures as may be established by the committee, submit the
plan and recommendations to all voting stockholders and
subscribers to the guaranty funds of the district banks and the
Central Bank for Cooperatives.
(b) VOTING REQUIREMENTS. --
(1) MAJORITY VOTE REQUIRED. -- An approval of the plan of
merger developed and submitted under subsection (a) shall --
(A) require a majority vote of the stockholders of each
district bank for cooperatives voting, in person or by proxy at a
duly authorized stockholders' meeting, computed both --
(i) in accordance with the requirement that, except as provided
in section 3.3(d), each cooperative that is the holder of voting
stock in, or a subscriber to the guaranty fund of the bank for
cooperatives shall be entitled to cast one vote; and
(ii) on the basis of the total equity interests in the bank
(including allocated, but not unallocated, surplus and reserves)
held by such stockholders;
(B) require a majority vote of the voting stockholders of the
Central Bank for Cooperatives voting on a one-bank-one-vote basis;
(C) take place not later than 180 days after the date of the
enactment of this section; and
(D) take place prior to any other merger vote involving a bank
for cooperatives.
(2) APPROVAL BY ALL BANKS FOR COOPERATIVES. -- If the
stockholders of all of the banks for cooperatives approve the
merger, the merger shall take place.
(3) EFFECT OF LESSER VOTE. -- If the stockholders of more than
one but fewer than all of the banks approve the plan, each such
bank whose stockholders voted to approve the merger shall be
merged into a single bank for cooperatives, as provided in
paragraphs (4) or (5).
(4) NATIONAL BANK FOR COOPERATIVES. --
(A) CREATION. -- If the stockholders of eight or more of the
district banks approve the merger, such banks, and the Central
Bank for Cooperatives, shall be merged into a single bank, which
shall be referred to as the "National Bank for Cooperatives".
(B) SERVICES PROVIDED. -- The National Bank for Cooperatives
may offer credit and related services to eligible borrowers
located within any territory that may be served by Farm Credit
System institutions under section 5.0, or to any borrower
otherwise eligible under section 3.7(b).
(5) UNITED BANK FOR COOPERATIVES. --
(A) CREATION. -- If the stockholders of more than one but
fewer than eight of the district banks approve the plan, each such
bank, and the Central Bank for Cooperatives (if approved by a
numerical majority of its stockholders), shall be merged into a
single bank, which shall be referred to as the "United Bank for
Cooperatives".
(B) SERVICES PROVIDED. -- The United Bank for Cooperatives
shall offer credit and related services only in the territory
included, as of the date of the enactment of this section, within
the boundaries of the districts that had been served by the
constituent banks of the United Bank for Cooperatives, and to any
borrower otherwise eligible under section 3.7(b).
(6) NONCONSENTING BANKS. --
(A) IN GENERAL. --
(i) NATIONAL BANK FOR COOPERATIVES. -- Any of the district
banks whose stockholders did not approve the plan of merger may
offer credit and related services to any eligible borrowers within
any territory or area that may be served by the National Bank.
(ii) UNITED BANK FOR COOPERATIVES. -- Any of the district
banks whose stockholders did not approve the plan of merger, shall
continue as district banks for cooperatives and shall continue to
serve only the territory within the boundaries of the district
that such banks served as of the date of the enactment of this
section.
(B) NONDISCRIMINATION. -- Any district bank whose stockholders
did not approve the plan of merger, shall be entitled to the
availability, from the National Bank for Cooperatives or the
United Bank for Cooperatives, as the case may be, of the same
credit and related services now provided by the Central Bank for
Cooperatives as of the date of the enactment of this section,
regardless of the decision not to merge.
(C) SUBSEQUENT MERGERS. -- Any district bank referred to in
subparagraph (A) may subsequently merge with the National Bank for
Cooperatives or the United Bank for Cooperatives, as the case may
be, on the approval of the voting stockholders of both banks
proposing to merge based on the voting requirement of subsection
(a).
(c) REFERENCES. -- References in this section to voting stockholders
shall include subscribers to the guaranty fund.
OF DIRECTORS.
(a) INITIAL BOARD. -- The initial board of each district bank for
cooperatives shall be composed of the members of the district board
(which is dissolved upon the creation of the district Farm Credit Bank)
elected by the stockholders of the bank for cooperatives and one member
elected by the other two members, which member shall not be a director,
officer, employee, or stockholder of a System institution. The initial
board shall operate for such term as is agreed to by the members of the
board, except that such period shall not exceed two years. Thereafter,
the board shall be elected and serve in accordance with section 3.0 of
the Farm Credit Act of 1971.
(b) PERMANENT BOARD. -- Section 3.0 "12 USC 2121" of the Act shall
be amended --
(1) by inserting "(a)" after the section designation; and
(2) by adding at the end thereof the following new subsection:
"(b) Each bank for cooperatives shall elect from its voting
stockholders a board of directors of such number, for such term, in such
manner, and with such qualifications as may be required in its bylaws,
except that, at least one member shall be elected by the other
directors, which member shall not be a director, officer, employee, or
stockholder of a System institution.".
FOR COOPERATIVES.
Title III (12 U.S.C. 2121 et seq.) is amended --
(1) by inserting after the title designation the following:
"PART A -- BANKS FOR COOPERATIVES"; and
(2) by adding at the end thereof the following new part:
"PART B -- UNITED AND NATIONAL BANKS FOR COOPERATIVES
"(a) CHARTER. -- The National Bank for Cooperatives or the United
Bank for Cooperatives, as the case may be (hereinafter in this part
referred to in this section as the 'consolidated bank') shall be a
federally chartered instrumentality of the United States and an
institution of the Farm Credit System.
"(b) Powers. -- The consolidated bank and the board of directors of
such bank shall have all of the powers, rights, responsibilities, and
obligations of the district banks for cooperatives and the Central Bank
for Cooperatives and the boards of directors of such banks, as otherwise
provided for in this Act.
"(c) OPERATION. -- The consolidated bank shall be organized and
operated on a cooperative basis.
"(a) INITIAL BOARD OF DIRECTORS. -- The initial board of directors
of a consolidated bank shall include the members of the boards of
directors of the farm credit districts who were elected by voting
stockholders of the constituent district banks for cooperatives (as such
banks existed on the date of the enactment of this section) and who
shall serve out the terms for which they were elected.
"(b) PERMANENT BOARD OF DIRECTORS. --
"(1) COMPOSITION. -- The permanent board of directors of a
consolidated bank shall consist of --
"(A) three members, elected by the voting stockholders of the
consolidated bank, from each of the farm credit districts that had
been served by constituent banks, as such districts existed on the
date of the enactment of this section, at least one of whom, from
each such district, shall be a farmer;
"(B) one member elected by the voting stockholders of each
district bank for cooperatives that is not a constituent of the
consolidated bank; and
"(C) one member appointed by the members chosen under
subparagraphs (A) and (B) who shall not be a stockholder or
borrower of a System institution or an officer or director of any
such stockholder or borrower.
"(2) NOMINATION AND ELECTION. -- For purposes of nominating
and electing members of the board of directors under paragraph
(1)(A):
"(A) FIRST MEMBER. -- The nomination and election of the first
member from each district shall be carried out on the basis
provided for in section 3.3(d).
"(B) SECOND MEMBER. --
"(i) IN GENERAL. -- The nomination and election of the second
member from each district shall be carried out with each voting
stockholder of the consolidated bank located in the district
having one vote, plus a number of votes (or fractional part
thereof) equal to the number of stockholders eligible to vote in
that district multiplied by the percentage (or fractional part
thereof) of the total equity interest (including allocated, but
not unallocated, surplus and reserves) in the consolidated bank of
all such stockholders located in that district held by the
individual voting stockholder --
"(I) as of the final date of the fiscal year of the
consolidated bank; or
"(II) with respect to the first election held under this
subsection, as of such date as the Farm Credit Administration
shall prescribe.
"(ii) TOTAL NUMBER OF VOTES. -- The total number of votes for
each district under this subparagraph shall be the number of
voting stockholders of the consolidated bank located in the
district multiplied by two.
"(3) TERMS. --
"(A) IN GENERAL. -- The members of the board of directors of
the consolidated bank shall serve for a term of 3 years.
"(B) TIMING OF ELECTIONS. -- Procedures for electing members
of the board of directors of the consolidated bank under this
subsection shall ensure that the beginning of the terms of such
members coincide with the expiration of the terms of members of
the interim board of directors of the bank under subsection (a).
"(4) FCA REGULATIONS. -- The nomination and election of the
members of the board of directors of the consolidated bank under
this subsection shall be carried out in accordance with
regulations issued by the Farm Credit Administration.
"(c) MODIFICATION OF BOARD OF DIRECTORS PROVISIONS. -- The
provisions of subsection (b) relating to the board of directors of the
consolidated bank, other than the provisions relating to the initial
composition, nomination, and election of the members of the board, may
be modified on an affirmative vote of at least two-thirds of the voting
stockholders of the bank, with each such stockholder to have, for such
purposes, only one vote. Any proposals for modifying such provisions
shall be submitted for a vote by such stockholders in accordance with
procedures prescribed by the Farm Credit Administration.
"On a determination by the board of directors of the United Bank for
Cooperatives or the National Bank for Cooperatives that the bank's loan
portfolio is concentrated in any one district or districts (according to
the district boundaries in effect immediately prior to the effective
date of the merger), the bank may consider the creation of regional
service centers to accommodate such loan concentrations.
"Subject to section 3.22, to the greatest extent practicable, the
functions of the consolidated bank shall be consolidated in the central
office of the bank.
"On the establishment of the consolidated bank, ownership interests
of the stockholders and subscribers to the guaranty funds of the
constituent district banks for cooperatives (including stock,
participation certificates, and allocated equities) shall be exchanged
for like ownership interests in the consolidated bank on a book value
basis.
"The board of directors of the consolidated bank shall provide for
the capitalization of such bank in accordance with the provisions of
section 4.3A.
"Under such terms and conditions as may be determined by its board of
directors, the consolidated bank may --
"(1) for a period of at least 3 years following the date of the
enactment of this section, establish separate patronage pools
consisting of loans to eligible borrowers located in each
constituent farm credit district (as such district existed on the
date of the enactment of this section); and
"(2) allocate revenues, expenses, and net savings among such
pools on an equitable basis.
MERGER.
"The receipt of assets or assumption of liabilities by the
consolidated bank, the exchange of stock, equities, or other ownership
interests, and any other transaction carried out in accomplishing the
merger of the banks for cooperatives shall not be treated as a taxable
event under the laws of the United States or of any State or political
subdivision thereof. The preceding sentence shall also apply to the
receipt of assets and liabilities by a taxable institution to the extent
that the net amount of the distribution is immediately reinvested in
stock of a consolidated bank (and in such case the basis of such stock
shall be appropriately reduced by the amount of gain not recognized by
reason of this sentence).
"The Farm Credit Administration may not establish lending limits for
the consolidated bank with respect to any loans or borrowers that are
more restrictive than the combined lending limits that were previously
established by the Farm Credit Administration for a district bank for
cooperatives and the Central Bank for Cooperatives with respect to such
loans or borrowers.".
The Act (12 U.S.C. 2001 et seq.) (as amended by section 201 of this
Act) is further amended by adding at the end thereof the following new
title:
"Two or more banks within a district may merge into a single entity
(hereinafter in this title referred to as a 'merged bank') if the plan
of merger is approved by --
"(1) the Farm Credit Administration Board;
"(2) the respective boards of directors of the banks involved;
"(3) a majority of the stockholders of each bank voting, in
person or by proxy, at a duly authorized stockholders' meeting in
accordance with the provisions of section 5.2(c) relating to the
casting of votes by stockholders; and
"(4) in the case of a bank for cooperatives, a majority of the
total equity interests in such merging bank for cooperatives
(including allocated, but not unallocated, surplus and reserves)
held by those stockholders or subscribers to the guaranty fund of
the bank voting.
"(a) COMPOSITION. --
"(1) IN GENERAL. -- Following a merger pursuant to section
7.1, the district Board of Directors shall continue to be composed
of seven members as provided in section 5.1.
"(2) REGULATIONS. -- The Farm Credit Administration shall
issue regulations to ensure the fair and equitable representation
of the associations of each of the merging banks on the initial
Board of Directors of the merged bank.
"(b) ELECTION. -- Following a merger pursuant to section 7.8, the
members of the district board shall be elected pursuant to regulations
issued by the Farm Credit Administration prescribing procedures that are
as consistent as practicable with those set forth in section 5.2.
"(a) IN GENERAL. -- Except as otherwise provided in this title, a
merged bank shall have all of the powers granted to, and shall be
subject to all of the obligations imposed on, any of the constituent
entities of the merged bank.
"(b) REGULATIONS. -- The Farm Credit Administration shall issue
regulations that establish the manner in which the powers and
obligations of the banks that form the merged bank are consolidated, and
to the extent necessary, reconciled in the merged bank.
"(a) PLAN OF MERGER. -- Subject to subsection (c), the number of
shares of capital stock issued by a merged bank to stockholders and
other owners of any institution involved in the merger, and the rights
and privileges of such shares (including voting power, redemption
rights, preferences on liquidation, and the right to dividends) shall be
determined by the plan of merger adopted by the banks involved, and
shall be consistent with section 4.3A and the regulations issued by the
Farm Credit Administration.
"(b) BOARD OF DIRECTORS. -- Subject to subsection (a), the number of
shares of capital stock issued by a merged bank, and the rights and
privileges thereof, shall be determined by the Board of Directors of the
merged bank established under this subtitle.
"(c) VOTING STOCK. -- Voting stock of a merged bank shall be held
only --
"(1) by associations or cooperatives that were, immediately
prior to the merger, entitled to hold voting stock of one of the
banks that merged; or
"(2) by farmers, ranchers, or producers or harvesters of
aquatic products that are or were, immediately prior to the
merger, direct borrowers from the merged bank or one of the banks
that comprise the merged bank.
DISTRIBUTIONS.
"(a) USE OF NET EARNINGS. -- The Board of Directors of a merged bank
shall determine the use or other application of net earnings after
payment of operating expenses.
"(b) RESTORATION OF VALUE OF IMPAIRED CAPITAL STOCK. -- Net earnings
shall first be applied to restore the value of impaired capital stock.
"(c) OTHER USES. -- After restoration, the application of net
earnings may include (but not necessarily in the following order) --
"(1) additions to an allocated reserve account;
"(2) additions to an unallocated reserve account;
"(3) payment of a dividend on capital stock; and
"(4) payment of patronage refunds in cash or in stock or other
notices of allocation.
"(d) USE OF CAPITAL AND RETAINED EARNINGS. -- All capital and
retained earnings of a merged bank shall be available for use in the
activities of the merged bank as the Board of Directors shall determine,
without regard to the activities giving rise to such earnings.
COOPERATIVES.
"(a) IN GENERAL. -- When two or more banks for cooperatives merge,
the resulting bank shall, not later than December 31 of each year of the
succeeding 5 years following the date of the merger, file an annual
report with the Farm Credit Administration that --
"(1) analyzes the effect of the merger;
"(2) includes a breakdown of loans outstanding according to the
size of the cooperative stockholders of the bank; and
"(3) describes the adequacy of credit and other assistance
services provided to smaller cooperatives.
"(b) AVAILABILITY. -- A copy of the report required in subsection
(a) shall be made available to the Committee on Agriculture of the House
of Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate.
"(a) ASSIGNMENTS. -- A Federal land bank or a merged bank having a
Federal land bank as one of its constituents, may assign to a Federal
land bank association, and the association may assume, the authority of
the transferring bank in the territorial area served by the association,
to make and participate in long-term real estate mortgage loans under
sections 1.6 through 1.9 if the assignment is approved by --
"(1) the Farm Credit Administration Board;
"(2) the Board of Directors of both institutions; and
"(3) a majority of the stockholders of the bank and of the
association, in accordance with the voting provisions of sections
7.0 and 7.6.
"(b) DIRECT LOANS AND FINANCIAL ASSISTANCE. -- After an assignment
described in subsection (a) --
"(1) the Federal land bank association shall possess all of the
direct long-term real estate mortgage loan authority, formerly
possessed by the transferring bank, in the territory served by the
association; and
"(2) the Federal land bank may provide and extend financial
assistance to, and discount for, or purchase from, the transferee
Federal land bank association any note, draft, or other obligation
with the endorsement or guarantee of the association, the proceeds
of which have been advanced to persons eligible and for purposes
of financing by the association under subsection (a).
"(c) REGULATIONS. -- The Farm Credit Administration shall issue
regulations that establish the manner in which the powers and
obligations of the banks that make assignments or transfers are
consolidated and, to the extent necessary, reconciled in the association
referred to in subsection (a). Following a transfer or assignment under
subsection (a), the provisions of section 4.3A shall be applicable to
the association.
"On the merger of one or more production credit associations with one
or more Federal land bank associations, the bank supervising the Federal
land bank association shall transfer all of its direct lending authority
of the bank to such association under section 7.8.
"(a) IN GENERAL. -- Two or more associations within the same
district, whether or not organized under the same title of this Act, may
merge into a single entity (hereinafter in this title referred to as a
'merged association') if the plan of merger is approved by --
"(1) the Farm Credit Administration Board;
"(2) the boards of directors of the associations;
"(3) a majority of the shareholders of each association voting,
in person or by proxy, at a duly authorized stockholders' meeting;
and
"(4) the Farm Credit Bank.
"(b) POWERS, OBLIGATIONS, AND CONSOLIDATION. --
"(1) POWERS AND OBLIGATIONS. -- Except as otherwise provided
by this title, a merged association shall --
"(A) possess all powers granted under this Act to the
associations forming the merged association; and
"(B) be subject to all of the obligations imposed under this
Act on the associations forming the merged association.
"(2) CONSOLIDATION. -- The Farm Credit Administration shall
issue regulations that establish the manner in which the powers
and obligations of the associations that form the merged
association are consolidated and, to the extent necessary,
reconciled in the merged association. Following a merger under
subsection (a), the provisions of section 4.3A shall be applicable
to the merged association.
"(c) STOCK ISSUANCE. --
"(1) PLAN OF MERGER. -- Subject to section 4.3A, the number of
shares of capital stock issued by a merged association to the
stockholders of any association forming such merged association,
and the rights and privileges of such shares (including voting
power, preferences on liquidation, and the right to dividends),
shall be determined by the plan of merger adopted by the merged
associations.
"(2) PLAN OF CAPITALIZATION. -- The number of shares of
capital stock, and the rights and privileges thereof, issued by a
merged association after a merger shall be determined by the Board
of Directors of the merged association, with the approval of the
supervising bank, and shall be consistent with section 4.3A and
the regulations issued by the Farm Credit Administration.
"(3) VOTING STOCK. -- Voting stock of a merged association
shall be issued to and held by farmers, ranchers, or producers or
harvesters of aquatic products who are or were, immediately prior
to the merger, direct borrowers from one of the associations
forming the merged association or the supervising bank of such
merged association.
"(d) CAPITALIZATION. -- The plan of merger shall provide for the
issuance, transfer, and retirement of stock and the distribution of
earnings in accordance with the provisions of section 4.3A.
"(a) PERIOD. -- A stockholder vote in favor of --
"(1) the merger of districts under section 5.17(a)(2);
"(2) the merger of banks within a district under section 7.0;
"(3) the transfer of the lending authority of a Federal land
bank or a merged bank having a Federal land bank or a merged bank
having a Federal land bank as one of its constituents, under
section 7.6;
"(5) the merger of two or more associations under section 7.8;
"(6) the termination of the status of an institution as a
System institution under section 7.10; and
"(7) the merger of similar banks under section 7.13; shall not
take effect except in accordance with subsection (b).
"(b) RECONSIDERATION. --
"(1) NOTICE. -- Not later than 30 days after a stockholder
vote in favor of any of the actions described in subsection (a),
the officer or employee that records such vote shall ensure that
all stockholders of the voting entity receive notice of the final
results of the vote.
"(2) EFFECTIVE DATE. -- A voluntary merger, transfer, or
termination that is approved by a vote of the stockholders of two
or more banks or associations, shall not take effect until the
expiration of 30 days after the date on which the stockholders of
such associations are notified of the final result of the vote in
accordance with paragraph (1).
"(3) PETITION FILED. -- If a petition for reconsideration of a
merger, transfer, or termination vote, signed by at least 15
percent of the stockholders of one or more of the affected banks
or associations, is presented to the Farm Credit Administration
within 30 days after the date of the notification required under
paragraph (1) --
"(A) a voluntary merger, transfer, or termination shall not
take effect until the expiration of 60 days after the date on
which the stockholders were notified of the final result of the
vote; and
"(B) a special meeting of the stockholders of the affected
banks or associations shall be held during the period referred to
in subparagraph (A) to reconsider the vote.
"(4) VOTE ON RECONSIDERATION. -- If a majority of stockholders
of any one of the affected banks or associations voting, in person
or by written proxy, at a duly authorized stockholders' meeting,
vote against the proposed merger, transfer, or termination, such
action shall not take place.
"(5) FAILURE TO FILE PETITION. -- If a petition for
reconsideration of such vote is either not filed prior to the 60th
day after the vote or, if timely filed, is not signed by at least
15 percent of the stockholders, the merger, transfer, or
termination shall become effective in accordance with the plan of
merger, transfer, or termination.
"(c) SPECIAL RECONSIDERATION. --
"(1) ISSUANCE OF REGULATIONS. -- Notwithstanding any other
provision of this Act, the Farm Credit Administration shall issue
regulations under which the stockholders of any association that
voluntarily merged with one or more associations after December
23, 1985, and before the date of the enactment of this section,
may petition for the opportunity to organize as a separate
association.
"(2) REQUIREMENTS. -- The regulations issued by the Farm
Credit Administration shall require that --
"(A) the petition be filed within 1 year after the date of the
implementation of such regulations;
"(B) the petition be signed by at least 15 percent of the
stockholders of any one of the associations that merged during the
period;
"(C) the petition describe the territory in which the proposed
separate association will operate;
"(D) if the petition is approved --
"(i) the loans of the members of the new association will be
transferred from the current association to such new association;
"(ii) the stock, participation certificates, and other similar
equities of the current association held by members of the new
association will be retired at book value and the proceeds of such
will be transferred to the new association, and an equivalent
amount of stock, participation certificates, and other similar
equities will be issued to the members by the new association;
and
"(iii) the other assets of the current association will be
distributed equitably among the current association and any
resulting new association.
"(3) NOTIFICATION. --
"(A) IN GENERAL. -- Not later than 30 days after the filing of
the petition for organization, the current association shall
notify its stockholders that a petition to establish the separate
association has been filed.
"(B) CONTENTS. -- The notification required under this
paragraph shall contain --
"(i) the date of a special stockholders' meeting to consider
the petition for organization; and
"(ii) an enumerated statement of the anticipated benefits and
the potential disadvantages to such stockholders if the new
association is established.
"(C) FCA APPROVAL. --
"(i) IN GENERAL. -- All notifications under this paragraph
shall be submitted to the Farm Credit Administration Board for
approval prior to being distributed to the stockholders.
"(ii) AMENDING NOTIFICATION. -- The Farm Credit Administration
Board shall require that, prior to the distribution of the
notification to the stockholders, the notification be amended as
determined necessary by the Board to provide accurate information
to the stockholders that will enable such stockholders to make an
informed decision as to the advisability of establishing a new
association.
"(D) SPECIAL STOCKHOLDERS' MEETING. --
"(i) TIMING OF MEETING. -- The special stockholders' meeting
to consider the petition shall be held within 60 days after the
filing of the petition.
"(ii) APPROVAL. -- If, at the special stockholders' meeting, a
majority of the stockholders of the current association who would
be served by the new association approve, by voting in person or
by proxy, the establishment of the separate association, the Farm
Credit Administration shall, within 30 days of such vote, issue a
charter to the new association and amend the charter of the
current association to reflect the territory to be served by the
new association.
INSTITUTION STATUS.
"(a) CONDITIONS. -- A System institution may terminate the status of
the institution as a System institution if --
"(1) the institution provides written notice to the Farm Credit
Administration Board not later than 90 days prior to the proposed
termination date;
"(2) the termination is approved by the Farm Credit
Administration Board;
"(3) the appropriate Federal or State authority grants approval
to charter the institution as a bank, savings and loan
association, or other financial institution;
"(4) the institution pays to the Farm Credit Assistance Fund,
as created under section 6.25, if the termination is prior to
January 1, 1992, or pays to the Farm Credit Insurance Fund, if the
termination is after such date, the amount by which the total
capital of the institution exceeds, 6 percent of the assets;
"(5) the institution pays or makes adequate provision for
payment of all outstanding debt obligations of the institution;
"(6) the termination is approved by a majority of the
stockholders of the institution voting, in person or by written
proxy, at a duly authorized stockholders' meeting, held prior to
giving notice to the Farm Credit Administration Board; and
"(7) the institution meets such other conditions as the Farm
Credit Administration Board by regulation considers appropriate.
"(b) EFFECT. -- On termination of its status as a System institution
--
"(1) the Farm Credit Administration Board shall revoke the
charter of the institution; and
"(2) the institution shall no longer be an instrumentality of
the United States under this Act.
INFORMATION AND ISSUANCE OF CHARTERS.
"(a) DISCLOSURE OF INFORMATION --
"(1) APPROVAL OF PLAN. -- With respect to any plan of merger,
transfer or assignment of lending authority, dissolution, or
termination, prior to submission to the voters (voting
stockholders and, where required, contributors to guaranty funds)
of such institutions, such plan shall be submitted to the Farm
Credit Administration Board, together with all information that is
to be distributed to the voters with respect to the contemplated
action, including an enumerated statement of the anticipated
benefits and potential disadvantages of such action.
"(2) NOTICE OF APPROVAL. -- On notification that the Farm
Credit Administration Board has approved such plan for submission
to the stockholders, or after 30 days of no action on the plan by
the Board, the submitting institutions may submit the plan,
together with the disclosure information, to the voters for the
prescribed vote.
"(b) NOTICE OF REASONS FOR DISAPPROVAL. -- If the Farm Credit
Administration Board disapproved the plan for submission to the
stockholders, notification to the submitting institutions shall specify
the reasons for the determination by the Board. If such plan is
determined to be inadequate, it shall not be submitted to the voters for
a vote.
"(c) FEDERAL CHARTER. -- Each plan of merger or transfer of lending
authority may include a proposed new or revised Federal charter for the
merged or transferee entity. The Farm Credit Administration Board shall
issue such charter on the approval of the plan, as prescribed in this
title, unless the Board determines that the charter submitted is not
consistent with this Act.
"(a) IN GENERAL. -- Banks organized or operating under this Act may
merge with banks in other districts operating under the same title if
the plan of merger is approved by --
"(1) the Farm Credit Administration Board;
"(2) the respective Boards of Directors of the banks involved;
"(3) a majority vote of the stockholders of each bank voting,
in person or by proxy, at a duly authorized stockholders' meeting,
with each association having a number of votes equal to the number
of such association's voting stockholders; and
"(4) in the case of a bank for cooperatives, a majority of the
total equity interests in such merging bank for cooperatives
(including allocated, but not unallocated, surplus and reserves)
held by those stockholders or subscribers to the guaranty fund of
the bank voting.
"(b) PROCEDURES. -- The provisions of sections 7.2 through 7.4 shall
apply to banks merged under this section.
"(c) BOARD OF DIRECTORS. --
"(1) IN GENERAL. -- After a merger under subsection (a), a
board of directors shall be created for the resulting bank
"(2) COMPOSITION. -- The board shall be composed of --
"(A) two directors elected by each of the bank boards, with at
least one such director from each bank being elected by the
eligible stockholders of, or subscribers to, the guaranty fund of
the merging banks; and
"(B) one outside director elected by the members elected under
subparagraph (A).
"(3) OUTSIDE DIRECTOR. --
"(A) QUALIFICATIONS. -- The outside director elected under
paragraph (2)(B) shall be experienced in financial services and
credit, and within the 2-year period prior to such election, shall
not have been a borrower from, shareholder in, or director,
officer, employee, or agent of any institution of the Farm Credit
System.
"(B) FAILURE TO ELECT. -- If the other members of the board
fail to elect an outside director, the Farm Credit Administration
Board shall appoint a qualified person to serve on the board of
directors until such member is so elected.
"(4) BYLAWS. -- Notwithstanding paragraph (2), the bylaws of
the merged bank may, with the approval of the Farm Credit
Administration, provide for a different number of directors to be
selected in a different manner, except that the bylaws shall
provide for at least one outside director.
ASSOCIATIONS.
"(a) IN GENERAL. -- Associations may voluntarily merge with other
like associations if the plan of merger is approved by --
"(1) the Farm Credit Administration Board;
"(2) the respective Boards of Directors of the associations
involved;
"(3) a majority vote of the stockholders of each association
voting, in person or by proxy, at a duly authorized stockholders'
meeting; and
"(4) the Farm Credit Bank.
"(b) PROCEDURES. -- The provisions of subsections (b), (c), and (d)
of section 7.8 shall apply to associations merged under this section".
The second sentence of section 5.17(a)(2) (12 U.S.C. 2251(a)(2)) is
amended by striking out "; and the Farm Credit Administration shall
ensure" and all that follows through "discriminated against in the
provision of any financial service and assistance" and inserting in lieu
thereof ". The Farm Credit Administration Board shall ensure that
disapproving associations (A) shall not be charged any assessment under
this Act at a rate higher than that charged other like associations in
the district, and (B) shall be provided with financial services and
assistance on the same basis as other like associations in the
district".
(a) DISSOLUTION AND MERGER. --
(1) PART HEADING. -- The part heading of part B of title IV
(12 U.S.C. 2181 et seq.) is amended by striking out "AND MERGER".
(2) MERGER. -- Section 4.10 (12 U.S.C. 2181) is repealed.
(3) BOARDS OF DIRECTORS. -- Section 4.11 (12 U.S.C. 2182) is
repealed.
(4) DISSOLUTION. -- Section 4.12(a) (12 U.S.C. 2183(a)) is
amended --
(A) by striking out the third sentence; and
(B) in the fourth sentence, by striking out "may require such
merger" and inserting in lieu thereof "Board may require an
association to merge with another association".
(b) ISSUANCE OF OBLIGATIONS. -- Section 4.2(d) "12 USC 2153" (12
U.S.C. 2174(d)) is amended by striking out "each of the 12 districts and
the Central Bank for Cooperatives" and inserting in lieu thereof "each
bank".
(c) DISTRICT AND FARM CREDIT ADMINISTRATION ORGANIZATION. --
Sections 5.1 through 5.6 (12 U.S.C. 2222-2227) are repealed.
(d) FARM CREDIT ADMINISTRATION POWERS. -- Section 5.17(a)(2) (12
U.S.C. 2252(a)(2)) is amended --
(1) by striking out "; approve mergers of banks" and all that
follows through "territories" and inserting in lieu thereof
"approve mergers and any related activities as provided for in
title VII; and the consolidation or division of the territories";
and
(2) by striking out "4.10" and inserting in lieu thereof "7.0".
Part B of title IV (12 U.S.C. 2181 et seq.) is amended by adding at
the end thereof the following new section:
"(a) PROVISION OF STOCKHOLDER LISTS. --
"(1) IN GENERAL. -- Within 7 days after receipt of a written
request by a stockholder, a bank for cooperatives, Federal land
bank association, or production credit association shall provide a
current list of its stockholders to such requesting stockholder.
"(2) CONDITIONS. -- As a condition of providing a stockholder
list under paragraph (1), the bank or association may require that
the stockholder agree and certify in writing that the stockholder
will --
"(A) use the list exclusively for communicating with
stockholders for permissible purposes; and
"(B) not make the list available to any person, other than the
stockholder's attorney or accountant, without first obtaining the
written consent of the institution.
"(b) ALTERNATIVE COMMUNICATIONS. --
"(1) REQUEST TO ISSUE. -- As an alternative to receiving a
list of stockholders, a stockholder may request the institution to
mail or otherwise furnish to each stockholder a communication for
a permissible purpose on behalf of the requesting stockholder.
"(2) WHEN PERMISSIBLE. -- Alternative communications may be
used, at the discretion of the requesting stockholder, if the
requester agrees to defray the reasonable costs of the
communication. If the requester decides to exercise this option,
the institution shall provide the requester with a written
estimate of the costs of handling and mailing the communication as
soon as is practicable after receipt of the stockholder's request
to furnish the communication.".
COOPERATIVES.
Section 3.8 (12 U.S.C. 2129) is amended by striking out subsection
(2) and inserting in lieu thereof the following new subsection:
"(b) Notwithstanding any other provision of this section:
"(1) The following entities shall also be eligible to borrow
from a bank for cooperatives:
"(A) Cooperatives and other entities that have received a loan,
loan commitment, or loan guarantee from the Rural Electrification
Administration, or a loan or loan commitment from the Rural
Telephone Bank, or that have been certified by the Administrator
of the Rural Electrification Administration to be eligible for
such a loan, loan commitment, or loan guarantee, and subsidiaries
of such cooperatives or other entities.
"(B) Any legal entity more than 50 percent of the voting
control of which is held by one or more associations or other
entities that are eligible to borrow from a bank for cooperatives
under subsection (a) or subparagraph (A) of this paragraph, except
that any such legal entity, when considered together with one or
more such associations or other entities that hold such control,
meet the requirement of subsection(a)(3).
"(C) Any legal entity that (i) holds more than 50 percent of
the voting control of an association or other entity that is
eligible to borrow from a bank for cooperatives under subsection
(a) or subparagraph (A) of this paragraph, and (ii) borrows for
the purpose of making funds available to that association or
entity, and make funds available to that association or entity
under the same terms and conditions that the funds are borrowed
from a bank for cooperatives.
"(2) Notwithstanding the provisions of section 3.9, the board
of directors of a bank for cooperatives may determine that, with
respect to a loan to any borrower eligible to borrow from a bank
under paragraph (1)(A) that is fully guaranteed by the United
States, no stock purchase requirement shall apply, other than the
requirement that a borrower eligible to own voting stock shall
purchase one share of such stock.
"(3) Each association and other entity eligible to borrow from
a bank for cooperatives under this subsection, for purposes of
section 3.7(a), shall be treated as an eligible cooperative
association and a stockholder eligible to borrow from the bank.
"(4) Nothing in this subsection shall be construed to adversely
affect the eligibility, as it existed on the date of the enactment
of this subsection, of cooperatives and other entities for any
other credit assistance under Federal law.".
(a) IN GENERAL. -- Section 4.29 (12 U.S.C. 2218) is amended --
(1) in subsection (a) --
(A) by inserting "(1)" after the subsection designation;
(B) by striking out "of this Act";
(C) by inserting "or borrower from" before "any such bank";
(D) by adding at the end thereof the following new sentence:
"A member or borrower shall have the option, without coercion from
the bank or association of such member or borrower, to accept or
reject such insurance."; and
(E) by adding at the end thereof the following new paragraph:
"(2) In making insurance available through private insurers, the
banks shall approve the programs of more than two insurers for each type
of insurance offered in the district. The banks may provide comparative
information relating to costs and quality of approved programs and the
financial conditions of approved companies. Associations shall offer at
least two insurers for each program from among those approved by the
Federal intermediate credit banks."; and
(2) in paragraph (2) of subsection (b) --
(A) by redesignating clauses (i), (ii), and (iii), as
subparagraphs (A), (B), and (C), respectively;
(B) by striking out "and" in subparagraph (B) as so
redesignated;
(C) by striking out "and" in subparagraph (C) as so
redesignated; and
(D) by adding at the end thereof the following new
subparagraphs:
"(D) the insurance program has been approved by the bank or
association from among specific programs made available to it by
insurers --
"(i) meeting reasonable financial and quality of service
standards; and
"(ii) licensed under State law to do business in the State;
and
"(E) in making insurance available through approved insurers,
the board of directors of the association or bank selects and
offers at least two approved insurers for each type of insurance
made available to the members and borrowers; and".
(b) CONTINUATION OF PROGRAM. -- Notwithstanding the amendments made
to section 4.29 "12 USC 2218 note" by subsection (a), any insurance
program offered by any bank or association of the Farm Credit System on
the date of the enactment of this Act that does not meet the
requirements of section 4.29, as so amended, may be continued until July
1, 1988.
(a) ASSESSMENT AUTHORITY. -- Section 5.32(a) (12 U.S.C. 2268(a)) is
amended by striking out "continues, but" and inserting in lieu thereof
the following: "continues. Any such institution or person who violates
any provision of this Act or any regulation issued under this Act shall
forfeit and pay a civil penalty of not more than $500 per day for each
day during which such violation continues. Notwithstanding the
preceding sentences,".
(b) NOTIFICATION OF ALLEGED VIOLATORS. -- Section 5.32(b) (12 U.S.C.
2268(b)) is amended by inserting after the subsection designation the
following new sentence: "Before determining whether to assess a civil
money penalty and determining the amount of such penalty, the Farm
Credit Administration shall notify the institution or person to be
assessed of the violation or violations alleged to have occurred or to
be occurring, and shall solicit the views of the institution or person
regarding the imposition of such penalty.".
(c) REVIEW OF FINAL ORDERS. -- Section 5.32(d) (12 U.S.C. 2268(d))
is amended by striking out the last sentence and inserting in lieu
thereof the following new sentence: "Final orders of the Farm Credit
Administration issued under subsection (c) shall be reviewable under
chapter 7 of title 5, United States Code.".
DISCLOSURE OF INFORMATION.
(a) IN GENERAL. -- Section 5.17(a)(9) (12 U.S.C. 2252(a)(9)) is
amended by inserting before the period the following: ", except that
the Farm Credit Administration may not require any System institution to
disclose in any report to stockholders information concerning the
condition or classification of a loan --
"(A) to a director of the institution --
"(i) who has resigned before the time for filing the applicable
report with the Farm Credit Administration; or
"(ii) whose term of office will expire no later than the date
of the meeting of stockholders to which the report relates; or
"(B) to a member of the immediate family of a director of the
institution unless --
"(i) the family member resides in the same household as the
director; or
"(ii) the director has a material financial or legal interest
in the loan or business operation of the family member.".
(b) REGULATIONS. -- Within 30 days after the date of the enactment
of this Act, "12 USC 2252 note" the Farm Credit Administration shall
amend its regulations as necessary to implement the amendment made by
subsection (a).
PROHIBITION AGAINST USE OF SIGNED BALLOTS.
Section 4.20 (12 U.S.C. 2208) is amended to read as follows:
"In any election or merger vote, or other proceeding subject to a
vote of the stockholders (or subscribers to the guaranty fund of a bank
for cooperatives), conducted by a lending institution of the Farm Credit
System, the institution --
"(1) may not use signed ballots; and
"(2) shall implement measures to safeguard the voting process
for the protection of the right of stockholders (or subscribers)
to a secret ballot.".
Section 1.9 (12 U.S.C. 2017) is amended to read as follows:
"(a) MAXIMUM LEVEL OF LOANS. --
"(1) IN GENERAL. -- Loans originated by a Federal land bank,
or in which a Federal land bank participates in with a lender that
is not a System institution, shall not exceed 85 percent of the
appraised value of the real estate security, except as provided
for in paragraphs (2) and (3).
"(2) REGULATION. -- The Farm Credit Administration may, by
regulation, require that loans not exceed 75 percent of the
appraised value of the real estate security.
"(3) GUARANTEED LOANS. -- If the loan is guaranteed by
Federal, State, or other governmental agencies, the loan may not
exceed 97 percent of the appraised value of the real estate
security, as may be authorized under regulations of the Farm
Credit Administration.
"(b) SECURITY. -- All loans originated or participated in by a bank
under this section shall be secured by first liens on interests in real
estate of such classes as may be approved by the Farm Credit
Administration.
"(c) VALUE OF SECURITY. -- To adequately secure the loan, the value
of security shall be determined by appraisal under appraisal standards
prescribed by the bank and approved by the Farm Credit Administration.
"(d) ADDITIONAL SECURITY. -- Additional security for any loan may be
required by the bank to supplement real estate security. Credit
factors, other than the ratio between the amount of the loan and the
security value, shall be given due consideration.
"(e) FINANCIAL STATEMENT. -- Each Federal land bank shall require a
financial statement from each borrower at least once every 3 years, or
during such shorter period of time as may be required under regulations
of the Farm Credit Administration.".
Part F of title IV (12 U.S.C. 2219 et seq.) is amended by adding at
the end thereof the following new section:
The Assistance Board established under section 6.0 and all
institutions of the Farm Credit System with more than 20 employees shall
establish and maintain an affirmative action program plan that applies
the affirmative action standards otherwise applied to contractors of the
Federal Government.".
Part F of title IV (12 U.S.C. 2219 et seq.) is amended by adding at
the end thereof the following new section:
PRACTICES.
"At the time a System institution or an agricultural mortgage loan
originator (as defined in section 8.0(7)) approves a loan made to a
borrower that, in the opinion of the institution or originator, would be
ineligible for a loan made, insured, or guaranteed under the
Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) by
reason of subtitle B or C of title XII of the Food Security Act of 1985
(16 U.S.C. 3811 et seq.), the institution or originator, as the case may
be, shall encourage the borrower to contact the Department of
Agriculture Soil Conservation Service to obtain information about soil
conservation methods and practices.".
Part B of title V is amended by inserting after section 5.22 (12
U.S.C. 2257) the following new section:
INSTRUCTIONS.
"(a) IN GENERAL. -- Each System institution shall comply with
uniform financial reporting instructions required by the Farm Credit
Administration, to standardize and facilitate the reporting of System
data.
"(b) COMPUTERIZED SYSTEM. -- If the financial reports are maintained
by a computer system, each System institution may develop an internal
computer system or it may contract out to a vendor under open
competitive bidding any or all aspects of the computerized system.
"(c) SUBMISSION OF PROPOSAL. -- Within 6 months of the date of the
enactment of this section, each System institution shall submit to the
Farm Credit Administration a report on the plan of that institution to
bring the operations of the institution into compliance with the uniform
financial reporting instructions required by the Farm Credit
Administration.".
Section 5.5 (12 U.S.C. 2226) is amended by inserting before the
period at the end thereof the following: "No director may receive
compensation under this section during any year in a total amount
exceeding $15,000.".
(a) RULES AND RECORDS. -- Section 5.8(c) (12 U.S.C. 2242) is amended
by striking out the last sentence and inserting in lieu thereof the
following new sentence: "The Board shall adopt such rules as it deems
appropriate for the transaction of business by the Board, and shall keep
permanent and accurate records and minutes of the actions and
proceedings of the Board.".
(b) CHAIRMAN. -- Subsection (a) of section 5.10 (12 U.S.C. 2244(a))
is amended to read as follows:
"(a)(1) The Chairman of the Board shall be the chief executive
officer of the Farm Credit Administration.
"(2) In carrying out the responsibilities of the chief executive
officer, the Chairman shall be responsible for directing the
implementation of policies and regulations adopted by the Board and,
after consultation with the Board, the execution of the administrative
functions and duties of the Farm Credit Administration.
"(3) In carrying out policies as directed by the Board, the Chairman
shall act as spokesperson for the Board and represent the Board and the
Farm Credit Administration in their official relations within the
Federal Government.
"(4) Under policies adopted by the Board, the Chairman shall consult
on a regular basis with --
"(A) the Secretary of the Treasury concerning the exercise, by
the System, of the powers conferred under section 4.2;
"(B) the Board of Governors of the Federal Reserve System
concerning the effect of System lending activities on national
monetary policy; and
(C) the Secretary of Agriculture concerning the effect of
System policies on farmers, ranchers, and the agricultural
economy.".
(c) FUNCTIONS AND APPOINTMENTS. -- Section 5.11 (12 U.S.C. 2245) is
amended to read as follows:
ADMINISTRATION.
"(a) POLICIES OF THE BOARD. -- The Chairman of the Farm Credit
Administration Board, in carrying out the powers and duties vested in
the Chairman by this Act, and Acts supplementary thereto, shall be
governed by policies of the Board and by such regulatory decisions,
findings, and determinations as the Board may by law be authorized to
make.
"(b) APPOINTMENTS. -- The Chairman of the Board shall appoint such
personnel as may be necessary to carry out the functions of the Farm
Credit Administration. The appointment by the Chairman of the heads of
major administrative divisions under the Board shall be subject to the
approval of the Board.
"(c) PERSONNEL. --
"(1) APPOINTMENTS BY BOARD MEMBERS. -- Personnel employed
regularly and full-time in the immediate offices of Board members
shall be appointed by each such Board member.
"(2) OFFICERS AND EMPLOYEES. -- The officers and employees of
the agency shall be --
"(A) subject to the Ethics in Government Act of 1978 (2 U.S.C.
701 et seq.);
"(B) considered officers or employees of the United States for
the purposes of sections 201 through 203, and sections 205 through
209, of title 18, United States Code; and
"(C) subject to section 5315 of title 5, United States Code.
"(3) DELEGATION. -- The powers of the Chairman as chief
executive officer necessary for day to day management may be
exercised and performed by the Chairman through such other
officers and employees of the Administration as the Chairman shall
designate, except that the Chairman may not delegate powers
specifically reserved to the Chairman by this Act without Board
approval.
"(d) FUNDING. -- The operations of the Farm Credit Administration,
and the salaries of members of the Board and employees of the
Administration, shall be funded and paid for from the fund created under
section 5.15.".
(d) ADVISORY COMMITTEES. -- Section 5.12 (12 U.S.C. 2246) is amended
by inserting ", subject to the approval of the Board," after "Chairman
of the Board".
(e) POWERS. -- Section 5.17(a) "12 USC 2252" (12 U.S.C. 2251(a)) is
amended --
(1) in paragraph (2), by striking out the last sentence and
inserting in lieu thereof the following new sentence: "The Farm
Credit Administration Board, after consultation with the
respective boards of directors of the affected banks, may require
two or more banks operating under the same or different titles to
merge if the Board determines that one of such banks has failed to
meet its outstanding obligations."; and
(2) in paragraph (15) --
(A) by inserting "by the Board" after "determined"; and
(B) by adding at the end thereof the following new sentence:
"The Board may not delegate its responsibilities under this
paragraph.".
(f) SPECIAL DISTRICT RULE. -- Section 2.15 (12 U.S.C. 2096) is
amended by adding at the end thereof the following new subsection:
"(c)(1) On request, the Farm Credit Administration Board may
permit a production credit association, located in a district in
which there are no more than three such associations,
notwithstanding any territorial limitation in the charter of such
association, to provide credit and technical assistance to any
borrower who is denied credit by a production credit association
that --
"(A) has an adjoining service territory; and
"(B) is located in the same district,
if the Board determines that one of the production credit
associations in the district is unduly restrictive in the
application of credit standards.
"(2) If the Farm Credit Administration Board approves the
extension of credit and technical assistance under paragraph (1),
the association shall approve or deny the application for credit
within 90 days after the receipt of the application from the
borrower.".
(g) CONFORMING AMENDMENT. -- Section 4.12 (12 U.S.C. 2183) is
amended by inserting "Board" after "Farm Credit Administration" each
place it appears in subsection (b) other than in clause (5) of the first
sentence.
(a) OPERATING EXPENSES FUND. -- Section 5.15 (12 U.S.C. 2249) is
amended to read as follows:
OPERATING EXPENSES FUND.
"(a) DETERMINATIONS REQUIRED. --
"(1) GENERALLY. -- Prior to the first day of each fiscal year,
the Farm Credit Administration shall determine --
"(A) the cost of administering this Act for the subsequent
fiscal year, including expenses for official functions;
"(B) the amount of assessments that will be required to pay
such administrative expenses, taking into consideration the funds
contained in the Administrative Expense Account, and maintain a
necessary reserve; and
"(C) the amount of assessments that will be required to pay the
costs of supervising and examining the Mortgage Corporation
established under title VIII.
"(2) APPORTIONMENTS. -- On the basis of
the determinations made under paragraph (1), the Farm Credit
Administration shall --
"(A) apportion the amount of such assessment among the System
institutions on a basis that is determined to be equitable by the
Farm Credit Administration;
"(B) assess and collect such apportioned amounts from time to
time during the fiscal year as determined necessary by the Farm
Credit Administration; and
"(C) assess and collect from the Mortgage Corporation, from
time to time during the fiscal year, the amount specified in
paragraph (1)(C).
"(b) DEPOSITS INTO FUND. --
"(1) TREASURY FUND. -- The amounts collected under subsection
(a) shall be deposited in the Farm Credit Administration
Administrative Expense Account. The Expense Account shall be
maintained in the Treasury of the United States and shall be
available, without regard to the Balanced Budget and Emergency
Deficit Control Act of 1985 (2 U.S.C. 901 note) or any other law,
to pay the expenses of the Farm Credit Administration.
"(2) NONGOVERNMENT FUNDS. -- The funds contained in the
Expense Account shall not be construed to be Federal Government
funds or appropriated moneys.
"(3) INVESTMENT. --
"(A) AUTHORITY. -- On request of the Farm Credit
Administration, the Secretary of the Treasury shall invest and
reinvest such amounts contained in the Expense Account as, in the
determination of the Farm Credit Administration, are in excess of
the amounts necessary for current expenses of the Farm Credit
Administration.
"(B) RETURNS. -- All income earned from such investments and
reinvestments shall be deposited in the Expense Account.
"(C) TYPE. -- Such investments shall be made in public debt
securities with maturities suitable to the needs of the Expense
Account, as determined by the Farm Credit Administration, and
bearing interest at rates determined by the Secretary of the
Treasury, taking into consideration current market yields on
outstanding marketable obligations of the United States of
comparable maturities.".
(b) EXAMINATION OF FEDERAL LAND BANK ASSOCIATIONS. -- Section
5.19(a) (12 U.S.C. 2253(a)) "12 USC 2254" is amended --
(1) in the first sentence, by striking out "Each" and inserting
in lieu thereof "Except for Federal land bank associations, each";
(2) by inserting after the first sentence the following new
sentence: "Each Federal land bank association shall be examined
by Farm Credit Administration examiners at such times as the Farm
Credit Administration Board may determine, except that each such
association shall be examined at least once every 5 years."; and
(3) by striking out "the Chairman of" each place it appears in
such subsection.
(c) POWER TO REMOVE DIRECTORS AND OFFICERS. -- Part C of title V (12
U.S.C. 2260) is amended by adding at the end thereof the following new
section:
OFFICERS.
"Notwithstanding any other provision of this Act, a farm credit
district board, bank board, or bank officer or employee shall not remove
any director or officer of any production credit association or Federal
land bank association.".
TO ADJOINING DISTRICTS.
(a) PETITION OF BANK. -- Notwithstanding any other provision of this
Act, effective for the 12-month period beginning on the date of
enactment of the Agricultural Credit Act of 1987, each Federal land bank
association or production credit association, whose chartered territory
adjoins the territory of another district, may petition the Farm Credit
Administration to amend the charters of the association and the
adjoining district bank to provide that the territory of the association
is part of the adjoining district.
(b) REQUIREMENTS OF PETITION. -- To be considered under this
section, the petition must be signed by not less than 15 percent of the
stockholders of the association. Only one such petition may be filed by
an association under this subsection.
(c) FCA ACTION. -- The Farm Credit Administration shall take any
action necessary --
(1) to amend the charters of the association and the district
bank; and
(2) to incorporate the petitioning association into the
adjoining district if the reassignment is approved by --
(A) a majority of the stockholders of the association voting,
in person or by proxy, at a duly authorized stockholders' meeting
held for such purpose;
(B) the board of directors of such adjoining district;
(C) the Assistance Board; and
(D) the Farm Credit Administration Board.
Effective 6 months after the date of the enactment of this Act
section 1.2 (12 U.S.C. 2002) is amended to read as follows:
"The Farm Credit System shall include the Farm Credit Banks, the
Federal land bank associations, the production credit associations, the
banks for cooperatives, and such other institutions as may be made a
part of the System, all of which shall be chartered by and subject to
the regulation by the Farm Credit Administration.".
(a) IN GENERAL. -- A State is a qualifying State if the Secretary of
Agriculture (hereinafter in this subtitle referred to as the
"Secretary") determines that the State has in effect an agricultural
loan mediation program that meets the requirements of subsection (c).
(b) DETERMINATION BY SECRETARY. -- Within 15 days after the
Secretary receives from the Governor of a State, a description of the
agricultural loan mediation program of the State and a statement
certifying that the State has met all of the requirements of subsection
(c), the Secretary shall determine whether the State is a qualifying
State.
(c) REQUIREMENTS OF STATE PROGRAMS. -- Within 15 days after the
Secretary receives a description of a State agricultural loan mediation
program, the Secretary shall certify the State as a qualifying State if
the State program --
(1) provides for mediation services to be provided to
producers, and their creditors, that, if decisions are reached,
result in mediated, mutually agreeable decisions between parties
under an agricultural loan mediation program;
(2) is authorized or administered by an agency of the State
government or by the Governor of the State;
(3) provides for the training of mediators;
(4) provides that the mediation sessions shall be confidential;
and
(5) ensures that all lenders and borrowers of agricultural
loans receive adequate notification of the mediation program.
(a) MATCHING GRANTS. -- Within 60 days after the Secretary certifies
the State as a qualifying State under section 501(b), the Secretary
shall provide financial assistance to the State, in accordance with
subsection (b), for the operation and administration of the agricultural
loan mediation program.
(b) AMOUNT OF GRANT. --
(1) IN GENERAL. -- Subject to paragraph (2), the Secretary
shall pay to a State under subsection (a) not more than 50 percent
of the cost of the operation and administration of the
agricultural loan mediation program within the State.
(2) MAXIMUM AMOUNT. -- The Secretary shall not pay more than
$500,000 per year to a single State under subsection (a).
(c) USE OF GRANT. -- Each State that receives an amount paid under
subsection (a) shall use that amount only for the operation and
administration of the agricultural loan mediation program of the State.
(d) PENALTY. -- If the Secretary determines that a State has not
complied with subsection (c), such State shall not be eligible for
additional financial assistance under this subtitle.
(a) DUTIES OF THE SECRETARY OF AGRICULTURE. --
(1) IN GENERAL. -- The Secretary, with respect to each program
under the jurisdiction of the Secretary that makes, guarantees, or
insures agricultural loans --
(A) shall prescribe rules requiring each such program to
participate in good faith in any State agricultural loan mediation
program;
(B) shall, on the date of the enactment of this Act,
participate in agricultural loan mediation programs; and
(C) shall --
(i) cooperate in good faith with requests for information or
analysis of information made in the course of mediation under any
agricultural loan mediation program described in section 501; and
(ii) present and explore debt restructuring proposals advanced
in the course of such mediation.
(2) NONBINDING ON SECRETARY. -- The Secretary shall not be
bound by any determination made in a program described in
paragraph (1) if the Secretary has not agreed to such
determination.
(b) DUTIES OF THE FARM CREDIT ADMINISTRATION. -- The Farm Credit
Administration shall prescribe rules requiring the institutions of the
Farm Credit System --
(1) to cooperate in good faith with requests for information or
analysis of information made in the course of mediation under any
agricultural loan mediation program described in section 501; and
(2) to present and explore debt restructuring proposals
advanced in the course of such mediation.
Within 150 days after the date of the enactment of this Act, the
Secretary and the Farm Credit Administration shall prescribe such
regulations as may be necessary to carry out this subtitle.
Not later than January 1, 1990, the Secretary of Agriculture shall
report to Congress on --
(1) the effectiveness of the State agricultural loan mediation
programs receiving matching grants under this subtitle;
(2) recommendations for improving the delivery of mediation
services to producers; and
(3) the savings to the States as a result of having an
agricultural loan mediation program.
There are authorized to be appropriated to carry out this subtitle
$7,500,000 for each of the fiscal years 1988 through 1991.
BORROWERS.
Part C of Title IV (12 U.S.C. 2151 et seq.) is amended by inserting
after the section added by section 107 the following new section:
BORROWERS.
"No System institution may make a loan secured by a mortgage or lien
on agricultural property to a borrower on the condition that the
borrower waive any right under the agricultural loan mediation program
of any State.".
Subtitle D of the Consolidated Farm and Rural Development Act (7
U.S.C. 1981 et seq.) is amended by adding after the section added by
section 619 of this Act the following new section:
BORROWERS.
"The Secretary may not make, insure, or guarantee any farmer program
loan to a farm borrower on the condition that the borrower waive any
right under the agricultural loan mediation program of any State.".
DEVELOPMENT ACT.
Except as otherwise specifically provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1921 et seq.).
Section 343 (7U.S.C. 1991) is amended --
(1) by inserting "(a)" after the section designation; and
(2) by adding at the end thereof the following new subsection:
"(b) As used in sections 307(e), 331D, 335(e) and (f), 338(f),
351(h), 352(b) and (c), 353, and 357:
"(1) The term 'borrower' means any farm borrower who has
outstanding obligations to the Secretary under any farmer program
loan, without regard to whether the loan has been accelerated, but
does not include any farm borrower all of whose loans and accounts
have been foreclosed on or liquidated, voluntarily or otherwise.
"(2) The term 'loan service program' means, with respect to a
farmer program borrower, a primary loan service program or a
preservation loan service program.
"(3) The term 'primary loan service program' means --
"(A) loan consolidation, rescheduling, or reamortization;
"(B) interest rate reduction, including the use of the limited
resource program;
"(C) loan restructuring, including deferral, set aside, or
writing down of the principal or accumulated interest charges, or
both, of the loan; or
"(D) any combination of actions described in subparagraphs (A),
(B), and (C).
"(4) The term 'preservation loan service program' means --
"(A) homestead retention as authorized under section 352; and
"(B) a leaseback or buyback of farmland authorized under
section 335.".
Section 307(c) (7 U.S.C. 1927(c)) is amended by adding at the end
thereof the following new sentence: "A borrower may use the same
collateral to secure two or more loans made, insured, or guaranteed
under this subtitle, except that the outstanding amount of such loans
may not exceed the total value of the collateral so used.".
Section 307 (7 U.S.C. 1927) is amended by adding at the end thereof
the following new subsection:
"(e) The Secretary may not --
"(1) require any borrower to provide additional collateral to
secure a farmer program loan made or insured under this title, if
the borrower is current in the payment of principal and interest
on the loan; or
"(2) bring any action to foreclose, or otherwise liquidate, any
such loan as a result of the failure of a borrower to provide
additional collateral to secure a loan, if the borrower was
current in the payment of principal and interest on the loan at
the time the additional collateral was requested.".
Subtitle D (7 U.S.C. 1981 et seq.) is amended by inserting after
section 331C the following new section:
"(a) REQUIREMENT. -- The Secretary shall provide notice by certified
mail to each borrower who is at least 180 days delinquent in the payment
of principal or interest on a loan made or insured under this title.
"(b) CONTENTS. -- The notice required under subsection (a) shall --
"(1) include a summary of all primary loan service programs,
preservation loan service programs, and appeal procedures,
including the eligibility criteria, and terms and conditions of
such programs and procedures;
"(2) include a summary of the manner in which the borrower may
apply, and be considered, for all such programs, except that the
Secretary shall not require the borrower to select among such
programs or waive any right in order to be considered for any
program carried out by the Secretary;
"(3) advise the borrower regarding all filing requirements and
any deadlines that must be met for requesting loan servicing;
"(4) provide any relevant forms, including applicable response
forms;
"(5) advise the borrower that a copy of regulations is
available on request; and
"(6) be designed to be readable and understandable by the
borrower.
"(c) CONTAINED IN REGULATIONS. -- All notices required by this
section shall be contained in the regulati ns implementing this title.
"(d) TIMING. -- The notice described in subsection (b) shall be
provided --
"(1) at the time an application is made for participation in a
loan service program;
"(2) on written request of the borrower; and
"(3) before the earliest of --
"(A) initiating any liquidation;
"(B) requesting the conveyance of security property;
"(C) accelerating the loan;
"(D) repossessing property;
"(E) foreclosing on property; or
"(F) taking any other collection action.
"(e) CONSIDERATION OF BORROWERS FOR LOAN SERVICE PROGRAMS. -- The
Secretary shall consider a farmer program borrower for all loan service
programs if, within 45 days after receipt of the notice required in this
section, the borrower requests such consideration in writing. In
considering a borrower for loan service programs, the Secretary shall
place the highest priority on the preservation of the borrower's farming
operations.".
Subtitle D (7 U.S.C. 1981 et seq.) is amended by inserting after the
section added by section 605 of this Act the following new section:
GUIDELINES.
"The Secretary shall ensure that appropriate procedures, including to
the extent practicable onsite inspections, or use of county or State
yield averages, are used in calculating future yields for an applicant
for a loan, when an accurate projection cannot be made because the
applicant's past production history has been affected by natural
disasters declared under the Disaster Relief Act of 1974.".
Section 332(a) (7 U.S.C. 1982(a)) is amended --
(1) by inserting "(1)" after the subsection designation;
(2) in the second sentence, by striking out "deriving the
principal part of their income from farming";
(3) by inserting before the period at the end thereof the
following: "before conducting any county committee election. The
Secretary shall publish any regulation promulgated under this
subsection"; and
(4) by adding at the end thereof the following new paragraphs:
"(2) The Secretary shall ensure that farmers have --
"(A) at least 45 days to submit nominations following general
public notice of any procedure by which to submit nominations for
county committee elections in each county; and
"(B) at least 30 days after general public notice of an
election in each county, before the election is held.
"(3) Any farmer eligible for a loan made or insured under subtitle A
shall be eligible to serve as an elected or appointed county committee
member, subject to section 336(c).
"(4) Not more than one farmer eligible for a loan made or insured
under subtitle A may serve on a county committee at the same time.
"(5) For purposes of this subsection, the term 'farmer' shall include
the spouse of a farmer otherwise eligible under this section.".
Section 333B (7 U.S.C. 1983b) is amended by adding at the end thereof
the following new subsections:
"(d) The Secretary shall establish and maintain within the Farmers
Home Administration a national appeals division, which shall consist of
a director, hearing officers, and such other personnel necessary to the
administration of the division, all of whom shall be employees of the
Farmers Home Administration who shall have no duties other than hearing
and determining formal appeals arising uder this section.
"(e)(1) Hearing officers within the appeals division in a State shall
hear and determine all formal appeals of decisions which are subject to
this section and are made by county supervisors, county committees,
district directors, State directors, or other employees of the Secretary
working in the State. Such hearings shall be held in the State of
residence of the appellant. The decisions of hearing officers shall, on
the request and election of the borrower, be reviewed by the State
director of the State of residence of the appellant or shall be referred
directly to the director of the national appeals division. If the
borrower elects review by the State director, the decisions of the State
director shall, on request of the borrower, be subject to further review
by the director of the national appeals division.
"(2) Each hearing before a hearing officer in the appeals division
shall be recorded verbatim by voice recorder, stenographer, or other
method, and a transcript of the hearing, together with all documents and
evidence submitted, shall be made available to the appellant, on
request, if the decision of the hearing officer is appealed. The record
of the hearing shall consist of copies of all documents and other
evidence presented to the hearing officer and the transcript of the
hearing.
"(3) If a decision of a hearing officer is appealed, the hearing
officer shall certify the record and deliver or otherwise provide the
certified record to the director of the national appeals division and
the Secretary. The national appeals division shall base its review of
the hearing on the transcript of the hearing and the evidence presented
to the hearing officer.
"(f) All hearing officers within the national appeals division shall
report to the principal officers of the division, and shall not be under
the direction or control of, or receive administrative support (except
on a reimbursable basis) from, offices other than the national appeals
division.
"(g) The Secretary shall ensure that the national appeals division
has resources and personnel adequate to hear and determine all initial
appeals in the State of residence of the appellant on a timely basis,
and that hearing officers receive training and retraining adequate for
their duties on initial employment and at regular intervals thereafter.
The Secretary may expend sums available in the Farmers Home
Administration's various revolving insurance funds for the purposes of
this subsection in the event that necessary appropriations sufficient to
fund the division are not available.".
Subtitle D (7 U.S.C. 1981 et seq.) is amended by inserting after
section 333B the following new section:
"(a) IN GENERAL. -- On request of a farm borrower of a farmer
program loan, the Secretary shall make available to the borrower the
following:
"(1) One copy of each document signed by the borrower.
"(2) One copy of each appraisal performed with respect to the
loan.
"(3) All documents that the Secretary otherwise is required to
provide to the borrower under any law or rule of law in effect on
the date of such request.
"(b) CONSTRUCTION OF SECTION. -- Subsection (a) shall not be
construed to supersede any duty imposed on the Secretary by any law or
rule of law in effect immediately before the date of the enactment of
this section, unless such duty is in direct conflict with any duty
imposed by subsection (a).".
(a) CLASSIFICATION OF PROPERTY. -- Section 335(c) (7 U.S.C. 1985(c))
is amended --
(1) by inserting "(1)" after the subsection designation;
(2) by inserting after the first sentence the following new
sentence: "The County Committee shall classify or reclassify real
property administered by the Secretary on the date of the
enactment of this sentence) that is farmland, as being suitable
for farming operation for such disposition unless the property,
including property subdivided in accordance with subsection
(e)(5), cannot be used to meet any of the purposes of section 303
(including being used as a start-up or add-on parcel of
farmland)."; and
(3) by adding at the end thereof the following new paragraph:
"(2) Notwithstanding any other provision of law, the Secretary shall
sell suitable farmland administered under this subtitle to operators (as
of the time immediately after such contract for sale or lease is entered
into) of not larger than family sized farms, as determined by the county
committee. In selling such land, the county committee shall --
"(A) grant a priority to persons eligible for loans under
subtitle A, including individuals approved for, but who, as of the
date of the enactment of this paragraph, have not yet received,
such loans;
"(B) offer suitable land at a price not greater than that which
reflects the appraised market value of such land;
"(C) select from among qualified applicants the applicant who
has the greatest need for farm income and best meets the criteria
for eligibility to receive loans under subtitle A; and
"(D) publish or caused to be published three consecutive weekly
announcements at least twice annually of the availability of such
farmland, in at least one newspaper that is widely circulated in
the county in which the land is located until the property is
sold.".
(b) DISPOSITION AND LEASING. -- Section 335(e) (7 U.S.C. 1985(e)) is
amended --
(1) by striking out paragraph (1) and inserting in lieu thereof
the following new paragraph:
"(1)(A)(i) During the 180-day period beginning on the date of
acquisition, or during the applicable period under State law, the
Secretary shall allow the borrower from whom the Secretary acquired real
property used to secure any loan made to the borrower under this title
(hereinafter referred to in this paragraph as the 'borrower-owner') to
purchase or lease such property.
"(ii) The period for the purchase or lease of real property described
under clause (i), by a person described in clauses (i) or (ii) of
subparagraph (C), shall expire 190 days after the date of acquisition,
or after the applicable period under State law.
"(iii) The rights regarding the purchase or lease of real property
provided by this paragraph and accorded a person described in
subparagraph (C) may be freely and knowingly waived by such person.
"(B) Any purchase or lease under subparagraph (A) shall be on such
terms and conditions as are established in regulations promulgated by
the Secretary.
"(C) The Secretary shall give preference in the sale or lease, with
option to purchase, of property that has been foreclosed, purchased,
redeemed, or otherwise acquired by the Secretary to persons in the
following order:
"(i) The immediate previous borrower-owner of the acquired
property.
"(ii) If actively engaged in farming --
"(I) the spouse or child of the previous borrower-owner; or
"(II) a stockholder in the corporation, if the borrower-owner
is a corporation held exclusively by members of the same family.
"(iii) The immediate previous family size farm operator of such
acquired property.
"(iv) Operators (as of the time immediately after such sale or
lease is entered into) of not larger than family-size farms.
"(D)(i) If --
"(I) the real property described in subparagraph (A)(i) is
located within an Indian reservation,
"(II) the borrower-owner is the Indian tribe that has
jurisdiction over the reservation in which the real property is
located or the borrower-owner is a member of such Indian tribe,
and
"(III) the period in which the right to purchase or lease such
real property provided in clauses (i) and (ii) of subparagraph (A)
has expired,
the Secretary shall dispose of or administer the property only as
provided for in this subparagraph.
"(ii) For purposes of this subparagraph, the term 'Indian
reservation' means all land located within the limits of any Indian
reservation under the jurisdiction of the United States, notwithstanding
the issuance of any patent, and, including rights-of-way running through
the reservation; trust or restricted land located within the boundaries
of a former reservation of a federally recognized Indian tribe in the
State of Oklahoma; or all Indian allotments the Indian titles to which
have not been extinguished if such allotments are subject to the
jurisdiction of a federally recognized Indian tribe.
"(iii) The Secretary shall, within 90 days after the expiration of
the period for which the right to purchase or lease real property
described in clause (i) is provided in clauses (i) and (ii) of
subparagraph (A), afford an opportunity to purchase or lease the real
property in accordance with the order of priority established under
clause (iv) by the Indian tribe having jurisdiction over the Indian
reservation within which the real property is located or, if no order of
priority is established by such Indian tribe under clause (iv), in the
following order:
"(I) to an Indian member of the Indian tribe that has
jurisdiction over the reservation within which the real property
is located;
"(II) to an Indian corporate entity;
"(III) to such Indian tribe.
"(iv) The governing body of any Indian tribe having jurisdiction over
an Indian reservation may revise the order of priority provided in
clause (iii) under which lands located within such reservation shall be
offered for purchase or lease by the Secretary under clause (iii) and
may restrict the eligibility for such purchase or lease to --
"(I) persons who are members of such Indian tribe,
"(II) Indian corporate entities that are authorized by such
Indian tribe to lease or purchase lands within the boundaries of
such reservation, or
"(III) such Indian tribe itself.
"(v) If real property described in clause (i) is not purchased or
leased under clause (iii) and the Indian tribe having jurisdiction over
the reservation within which the real property is located is unable to
purchase or lease the real property, the Secretary shall transfer the
real property as if the real property were held in trust by the United
States for the benefit of such Indian tribe. From the rental income
derived from the lease of the transferred real property, and all other
income generated from the transferred real property, the Secretary of
the Interior shall pay those State, county, municipal, or other local
taxes to which the transferred real property was subject at the time of
acquisition by the Secretary, until the earlier of --
"(I) the expiration of the 4-year period beginning on the date
on which the real property is so transferred, or
"(II) such time as the lands are transferred into trust
pursuant to clause (viii).
"(vi) At any time any real property is transferred to the Secretary
of the Interior under clause (v), the Secretary of Agriculture shall be
deemed to have no further responsibility under this Act for collection
of any amounts with regard to the farm program loan which had been
secured by such real property, nor with regard to any lien arising out
of such loan transaction, nor for repayments of any amount with regard
to such loan transactions or liens to the Treasury of the United States,
and the Secretary of the Interior shall be deemed to have succeeded to
all right, title and interest of the Secretary of Agriculture in such
real estate arising from the farm program loan transaction, including
the obligation to remit to the Treasury of the United States, in
repayment of the original loan, those amounts provided in clause (vii).
"(vii) After the payment of any taxes which are required to be paid
under clause (v), all remaining rental income derived from the lease of
the real property transferred to the Secretary of the Interior under
clause (v), and all other income generated from the real property
transferred to the Secretary of the Interior under clause (v), shall be
deposited as miscellaneous receipts in the Treasury of the United States
until the amount deposited is equal to the lesser of --
"(I) the amount of the outstanding lien of the United States
against such real property, as of the date the real property was
acquired by the Secretary;
"(II) the fair market value of the real property, as of the
date of the transfer to the Secretary of the Interior; or
"(III) the capitalized value of the real property, as of the
date of the transfer to the Secretary of the Interior.
"(viii) When the total amount that is required to be deposited under
clause (vii) with respect to any real property has been deposited into
the Treasury of the United States, title to the real property shall be
held in trust by the United States for the benefit of the Indian tribe
having jurisdiction over the Indian reservation within which the real
property is located.
"(ix) Notwithstanding any other clause of this subparagraph, the
Indian tribe having jurisdiction over the Indian reservation within
which the real property described in clause (i) is located may, at any
time after the real property has been transferred to the Secretary of
the Interior under clause (v), offer to pay the remaining amount on the
lien, or the fair market value of the real property, whichever is less.
Upon payment of such amount, title to such real property shall be held
by the United States in trust for the tribe and such trust or restricted
lands that have been acquired by the Secretary under foreclosure or
voluntary transfer under a loan made or insured under this title and
transferred to an Indian person, entity, or tribe under the provisions
of this subparagraph shall be deemed to have never lost trust or
restricted status.
"(E) The rights provided in this subsection shall be in addition to
any such right of first refusal under the law of the State in which the
property is located.";
(2) in paragraph (3) --
(A) by striking out subparagraph (A);
(B) by redesignating subparagraphs (B), (C), and (D), as
subparagraphs (A), (B), and (C), respectively;
(C) in subparagraph (B) (as so redesignated), by striking out
"give special consideration to a previous owner or operator of
such land if such owner or operator" and inserting in lieu thereof
"determine if the lessee"; and
(D) by adding at the end thereof the following new
subparagraph:
"(D) The Secretary may enter into a contract with a borrower of a
farmer program loan made or insured under this title, to provide for the
subsequent sale or lease of land that will be acquired from the borrower
in the future, before the Secretary takes possession of such land.";
(3) by amending subparagraph (A) of paragraph (5) to read as
follows:
"(A) If the Secretary determines that farmland administered under
this chapter is not suitable for sale or lease to persons eligible for a
loan made or insured under subtitle A because such farmland is in a
tract or tracts that the Secretary determines to be larger than that
necessary for such eligible persons, the Secretary shall, to the
greatest extent practicable, subdivide such land into tracts suitable
for sale under subsection (c). Such land shall be subdivided into
parcels of land the shape and size of which are suitable for farming,
the value of which shall not exceed the individual loan limits as
prescribed under section 305.";
(4) in paragraph (6) --
(A) by striking out "and" at the end of subparagraph (A);
(B) by striking out the period at the end of subparagraph (B)
and inserting in lieu thereof "; and"; and
(C) by adding at the end thereof the following new
subparagraph:
"(C) provide written notice reasonably calculated to inform the
immediate previous owner or immediate previous family-size farm
operator of such farmland, of the availability of such farmland.";
and
(5) by adding at the end thereof the following new paragraphs:
"(9) Denials of applications for or disputes over terms and
conditions of a lease or purchase agreement under this section are
appealable under section 333B.
"(10) In the event of any conflict between any provision of this
subsection and any provision of the law of any State providing a right
of first refusal to the owner of farmland or the operator of a farm
before the sale or lease of land to any other person, such provision of
State law shall prevail.".
Subsection (f) of section 335 (7 U.S.C. 1985(f)) is amended to read
as follows:
"(f)(1) As used in this subsection, the term 'normal income security'
means all security not considered basic security, including crops,
livestock, poultry products, Agricultural Stabilization and Conservation
Service payments and Commodity Credit Corporation payments, and other
property covered by Farmers Home Administration liens that is sold in
conjunction with the operation of a farm or other business, but shall
not include any equipment (including fixtures in States that have
adopted the Uniform Commercial Code), or foundation herd or flock, that
is the basis of the farming or other operation, and is the basic
security for a Farmers Home Administration farmer program loan.
"(2) The Secretary shall release from the normal income security
provided for such loan an amount sufficient to pay for the essential
household and farm operating expenses of the borrower, until such time
as the Secretary accelerates such loan.
"(3) A borrower whose account was accelerated on or after November 1,
1985, and on or before May 7, 1987, but not thereafter foreclosed on or
liquidated, shall be entitled to the release of security income for a
period of 12 months, to pay the essential household and farm operating
expenses of such borrower in an amount not to exceed $18,000 over 12
months, if such borrower --
"(A) as of October 30, 1987, continued to be actively engaged
in the farming operations for which the Secretary had made the
farmer program loan; and
"(B) as of the deadline for responding to the notice provided
for under paragraph (5), requests restructuring of such loans
pursuant to section 353.
"(4) The county committee in the county in which borrower's land is
located shall determine whether the borrower has complied with the
requirements of paragraph (3)(A).
"(5)(A) Within 45 days after the date of the enactment of this
subsection, the Secretary shall provide to the borrowers described in
paragraph (3) notice by certified mail of the right of such borrowers to
apply for the benefits under such paragraph.
"(B) Releases under such paragraph shall be made to qualified
borrowers who have responded to the notice within 30 days after receipt.
"(C) Within 12 months after a borrower has requested restructuring
under section 353, the Secretary shall make a final determination on the
request. Notwithstanding the 12-month limitation provided for in
paragraph (3), releases shall continue to be made to the borrower until
a denial or dismissal of the application of the borrower for
restructuring under section 353 is made. The amount of essential
household and farm operating expenses which may be released to any
borrower eligible for such releases after 12 months may exceed $18,000,
by an amount proportionate to the period of time beyond 12 months before
a final determination is made by the Secretary.
"(6) If a borrower is required to plan for or to report on how
proceeds from the sale of collateral property will be used, the
Secretary shall --
"(A) notify the borrower of such requirement; and
"(B) notify the borrower of the right to the release of funds
under this section and the means by which a request for the funds
may be made.
"(7) The Secretary shall issue regulations consistent with this
section that --
"(A) ensure the release of funds to each borrower; and
"(B) establish guidelines for releases under paragraph (3),
including a list of expenditures for which funds will normally be
released.".
Section 349 (7 U.S.C. 1997) is amended --
(1) in subsection (c)(4), by inserting "and other wildlife
habitat" after "wetland"; and
(2) in subsection (e), by striking out the last period and
inserting in lieu thereof the following: "or the difference
between the amount of the outstanding loan secured by the land and
the current value of the land, whichever is greater.".
PROJECT FOR PURCHASE OF SYSTEM LAND.
(a) EXTENSION OF PROGRAM FOR 5 YEARS. -- Section 1320 "7 USC 1999
note" of the Food Security Act of 1985 "7 USC 1999" (99 Stat. 1532) is
amended by striking out "1988" and inserting in lieu thereof "1993".
(b) AMENDMENTS TO PROGRAM. -- Section 351 (7 U.S.C. 1999) is amended
--
(1) in subsection (b)(1)(C), by striking out "12-month" and
inserting in lieu thereof "24-month"; and
(2) by adding at the end thereof the following new subsections:
"(f) Each Farmers Home Administration county supervisor shall make
available to farmers, on request, a list of approved lenders in the area
that participate in the Farmers Home Administration guaranteed farm loan
programs and other lenders in the area that express a desire to
participate in such programs and that request inclusion in the list.
"(g) Notwithstanding any other provision of law, each contract of
guarantee on a farm loan entered into under this title after the date of
the enactment of this subsection shall contain a condition that the
lender of the guaranteed loan may not initiate foreclosure action on the
loan until 60 days after a determination is made with respect to the
eligibility of the borrower thereof to participate in the program under
this section.".
(c) DEMONSTRATION PROJECT FOR PURCHASE OF SYSTEM LAND. -- Section
351 (7 U.S.C. 1999) is amended by adding after the subsection added by
subsection (b) of this section the following new subsection:
"(h)(1) During the 3-year period beginning on the date of the
enactment of this subsection, the Secretary shall establish and carry
out a demonstration project in accordance with this subsection under
which the Secretary may issue certificates of eligibility to Farmers
Home Administration eligible borrowers to reduce the interest rate paid
by the borrowers on loans obtained from legally organized lending
institutions and Farm Credit System institutions to purchase acquired
properties owned by institutions of the Farm Credit System certified to
issue preferred stock under section 6.27 of the Farm Credit Act of 1971.
"(2) To be eligible to participate in the project, a borrower must --
"(A) meet the requirements of subsection (b)(1);
"(B) provide a down payment to purchase the land, using
personal funds of the borrower, equal to at least 15 percent of
the purchase price of the land; and
"(C) meet all conservation requirements for the land that are
imposed on borrowers of guaranteed farm ownership loans under this
title.
"(3) A certificate of eligibility issued under this subsection may be
used to reduce the interest rate payable by an eligible borrower on a
guaranteed loan by not more than 4 percent.
"(4) A certificate of eligibility issued under this subsection shall
reduce the interest rate on a guaranteed loan for a term equal to the
outstanding term of such loan, or 5 years, whichever is less.
"(5) Notwithstanding any other provision of law, if the lender of a
guaranteed loan assisted under this subsection reduces the interest rate
payable on the loan by at least 1 full percentage point, the Secretary
may guarantee the repayment of 95 percent of the principal and interest
due on the loan.
"(6) In carrying out this subsection, the Secretary may --
"(A) certify the eligibility of borrowers to participate in the
demonstration project;
"(B) process applications for participation in the project;
"(C) provide certificate of eligibility to eligible borrowers
on a timely basis consistent with the availability of acquired
property owned by institutions of the Farm Credit System certified
to issue preferred stock under section 6.27 of the Farm Credit Act
of 1971; and
"(D) set aside the largest practicable portion of funds made
available to guarantee farm ownership loans under this title
(including unobligated funds) to carry out this subsection.
"(7) To carry out this subsection, the Secretary may transfer such
amounts as may be necessary from farm operating guaranteed loans to farm
ownership guaranteed loans.
"(8) In carrying out this subsection, Farm Credit System institutions
shall --
"(A) sell land to eligible borrowers under this subsection at
fair market value;
"(B) to the extent practicable, set aside each fiscal year land
acquired or owned by such institutions of the Farm Credit System
in an aggregate amount not to exceed $250,000,000 at fair market
value, for purchase by eligible borrowers in accordance with this
subsection; and
"(C) if necessary, subdivide tracts of land made available
under this subsection into parcels that permit eligible borrowers
to purchase the parcels consistent with limits placed on the size
of loans made, insured, or guaranteed under this title.
"(9) Not later than 60 days after the date of the enactment of this
subsection, the Secretary and the Farm Credit Administration shall
develop a joint memorandum of understanding governing the implementation
of this subsection.".
Section 352 (7 U.S.C. 2000) is amended --
(1) in subsection (a)(3), by inserting before the period ",
including a reasonable number of farm outbuildings located on the
adjoining land that are useful to the occupants of the homestead,
and no more than 10 acres of adjoining land that is used to
maintain the family of the individual";
(2) in subsection (b), by striking out paragraph (1) and
inserting in lieu thereof the following new paragraph:
"(1) The Secretary or the Administrator shall, on application by a
borrower who meets the eligibility requirements of subsection (c)(1),
permit the borrower to retain possession and occupancy of homestead
property under the terms set forth, and until the action described in
this section has been completed, if --
"(A) the Secretary forecloses, holds in inventory on the date
of the enactment of this paragraph, or takes into inventory,
property securing a loan made or insured under this title;
"(B) the Administrator forecloses, holds in inventory on the
date of the enactment of this paragraph, or takes into inventory,
property securing a farm program loan made under the Small
Business Act (15 U.S.C. 631 et seq.); or
"(C) the borrower of a loan made or insured by the Secretary or
the Administrator files a petition in bankruptcy that results in
the conveyance of the homestead property to the Secretary or the
Administrator, or agrees to voluntarily liquidate or convey such
property in whole or in part.";
(3) by striking out subsection (c) and inserting in lieu
thereof the following new subsection:
"(c)(1) To be eligible to occupy homestead property, a borrower of a
loan made or insured by the Secretary or the Administrator shall --
"(A) apply for such occupancy not later than 90 days after the
property is acquired by the Secretary or Administrator, or for
property in inventory on the date of the enactment of this
subsection, the borrower shall apply for occupancy not later than
90 days after such date;
"(B) have received from farming or ranching operations gross
farm income reasonably commensurate with --
"(i) the size and location of the farming unit of the borrower;
and
"(ii) local agricultural conditions (including natural and
economic conditions), in at least 2 calendar years during the
6-year period preceding the calendar year in which the application
is made;
"(C) have received from farming or ranching operations at least
60 percent of the gross annual income of the borrower and any
spouse of the borrower in at least 2 calendar years during any
6-year period described in subparagraph (B);
"(D) have continuously occupied the homestead property during
the 6-year period described in subparagraph (B), except that such
requirement may be waived if a borrower has, due to circumstances
beyond the control of the borrower, had to leave the homestead
property for a period of time not to exceed 12 months during the
6-year period;
"(E) during the period of the occupancy of the homestead
property, pay a reasonable sum as rent for such property to the
Secretary or the Administrator in an amount substantially
equivalent to rents charged for similar residential properties in
the area in which the homestead property is located;
"(F) during the period of teh occupancy of the homestead
property, maintain the property in good condition; and
"(G) meet such other reasonable and necessary terms and
conditions as the Secretary may require consistent with this
section.
"(2) For purposes of subparagraphs (B) and (C) of paragraph (1), the
term 'farming or ranching operations' shall include rent paid by lessees
of agricultural land during any period in which the borrower, due to
circumstances beyond the control of the borrower, is unable to actively
farm such land.
"(3) For the purposes of paragraph (1)(E), the failure of the
borrower to make timely rental payments shall constitute cause for the
termination of all rights of such borrower to possession and occupancy
of the homestead property under this section. In effecting any such
termination, the Secretary shall afford the borrower or lessee the
notice and hearing procedural rights described in section 333B and shall
comply with all applicable State and local laws governing eviction from
residential property.
"(4)(A) The period of occupancy allowed the prior owner of homestead
property under this section shall be the period requested in writing by
the prior owner, except that such period shall not exceed 5 years.
"(B) At any time during the period of occupancy, the borrower shall
have a right of first refusal to reacquire the homestead property on
such terms and conditions as the Secretary shall determine, except that
the Secretary may not demand a payment for the homestead property as
established by an independent appraisal. The independent appraisal
shall be conducted by an appraiser selected by the borrower from a list
of three appraisers approved by the county supervisor.
"(5) No rights of a borrower under this section, and no agreement
entered into between the borrower and the Secretary for occupancy of the
homestead property, shall be transferable or assignable by the borrower
or by operation of any law, except that in the case of death or
incompetency of such borrower, such rights and agreements shall be
transferable to the spouse of the borrower if the spouse agrees to
comply with the terms and conditions thereof.
"(6) Within 30 days of the acquisition of the homestead property
securing a loan made or insured under this title, the Secretary shall
notify the borrower from whom the property was acquired of the
availability of homestead protection rights under this section. For
property in inventory on the date of the enactment of this subsection,
the Secretary shall make a good faith effort to notify the borrower of
the availability of homestead protection rights under this section
within 60 days after such date.";
(3) in subsection (d), by adding at the end thereof the
following new sentence: "Such terms and conditions shall not be
less favorable than those intended to be offered to any other
buyer."; and
(4) by adding at the end thereof the following new subsections:
"(f) The Secretary may enter into contracts authorized by this
section before the Secretary acquires title to the homestead property.
"(g) In the event of any conflict between this section and any
provision of the law of any State relating to the right of a borrower to
designate for separate sale or redeem part or all of the real property
securing a loan foreclosed on by the lender thereof, such provision of
State law shall prevail.".
(a) IN GENERAL. -- Subtitle D (7 U.S.C. 1981 et seq.) is amended by
adding at the end thereof the following new section:
SERVICING.
"(a) IN GENERAL. -- The Secretary shall modify delinquent farmer
program loans made or insured under this title, or purchased from the
lender or the Federal Deposit Insurance Corporation under section 309B,
to the maximum extent possible --
"(1) to avoid losses to the Secretary on such loans, with
priority consideration being placed on writing-down the loan
principal and interest (subject to subsections (d) and (e)), and
debt set-aside (subject to subsection (e)), whenever these
procedures would facilitate keeping the borrower on the farm or
ranch, or otherwise through the use of primary loan service
programs as provided in this section; and
"(2) to ensure that borrowers are able to continue farming or
ranching operations.
"(b) ELIGIBILITY. -- To be eligible to obtain assistance under
subsection (a) --
"(1) the delinquency must be due to circumstances beyond the
control of the borrower, as defined in regulations issued by the
Secretary;
"(2) the borrower must have acted in good faith with the
Secretary in connection with the loan as defined in regulations
issued by the Secretary;
"(3) the borrower must present a preliminary plan to the
Secretary that contains reasonable assumptions that demonstrate
that the borrower will be able to --
"(A) meet the necessary family living and farm operating
expenses; and
"(B) service all debts, including those of the loans
restructured; and
"(4) the loan, if restructured, must result in a net recovery
to the Federal Government, during the term of the loan as
restructured, that would be more than or equal to the net recovery
to the Federal Government from an involuntary liquidation or
foreclosure on the property securing the loan.
"(c) RESTRUCTURING DETERMINATIONS. --
"(1) DETERMINATION OF NET RECOVERY. -- In determining the net
recovery from the involuntary liquidation of a loan under this
section, the Secretary shall calculate --
"(A) the recovery value of the collateral securing the loan, in
accordance with paragraph (2); and
"(B) the value of the restructured loan, in accordance with
paragraph (3).
"(2) RECOVERY VALUE. -- For the purpose of paragraph (1), the
recovery value of the collateral securing the loan shall be based
on --
"(A) the amount of the current appraised value of the property
securing the loan; less
"(B) the estimated administrative, legal, and other expenses
associated with the liquidation and disposition of the loan and
collateral, including --
"(i) the payment of prior liens;
"(ii) taxes and assessments, depreciation, management costs,
the yearly percentage decrease or increase in the value of the
property, and lost interest income, each calculated for the
average holding period for the type of property involved;
"(iii) resale expenses, such as repairs, commissions, and
advertising; and
"(iv) other administrative and attorney's costs.
"(3) VALUE OF THE RESTRUCTURED LOAN. --
"(A) IN GENERAL. -- For the purpose of paragraph (1), the
value of the restructured loan shall be based on the present value
of payments that the borrower would make to the Federal Government
if the terms of such loan were modified under any combination of
primary loan service programs to ensure that the borrower is able
to meet such obligations and continue farming operations.
"(B) PRESENT VALUE. -- For the purpose of calculating the
present value referred to in subparagraph (A), the Secretary shall
use a discount rate of not more than the current rate on 90-day
Treasury bills.
"(4) NOTIFICATION. -- Within 60 days after receipt of a
written request for restructuring from the borrower, the Secretary
shall --
"(A) make the calculations specified in paragraphs (2) and (3);
"(B) notify the borrower in writing of the results of such
calculations; and
"(C) provide documentation for the calculations.
"(5) RESTRUCTURING OF LOANS. -- If the value of the
restructured loan is greater than or equal to the recovery value,
the Secretary shall, within 45 days after notifying the borrower
of such calculations, offer to restructure the loan obligations of
the borrower under this title through primary loan service
programs that would enable the borrower to meet the obligations
(as modified) under the loan and to continue the farming
operations of the borrower. If the borrower accepts such offer,
within 45 days after receipt of notice of acceptance, the
Secretary shall restructure the loan accordingly.
"(6) TERMINATION OF LOAN OBLIGATIONS. -- If the value of the
restructured loan is less than the recovery value and if, within
45 days after receipt of the notification described in paragraph
(4)(B), the borrower pays (or obtains third-party financing to
pay) the Secretary an amount equal to the recovery value, the
obligations of the borrower to the Secretary under the loan shall
terminate, except that the Secretary may require, as a condition
of such termination of loan obligations, that the borrower enter
into an agreement with the Secretary if the borrower sells or
otherwise conveys the real property used to secure such loan
within 2 years after the date of such agreement. Any such
agreement shall provide for the recapture of part or all of the
difference between the recovery value of the loan and the fair
market value (on the date of such agreement) of the property
securing the loan if the borrower realizes a gain on the sale or
conveyance over the amount of the recovery value of the loan. In
no event shall any such agreement provide for recapture of an
amount that exceeds the difference between such recovery value and
the fair market value of the property securing the loan on the
date of such agreement.
"(d) PRINCIPAL AND INTEREST WRITE-DOWN. --
"(1) IN GENERAL. --
"(A) PRIORITY CONSIDERATION. -- In selecting the restructuring
alternatives to be used in the case of a borrower who has
requested restructuring under this section, the Secretary shall
give priority consideration to the use of principal and interest
write-down, except that this procedure shall not be given first
priority in the case of a borrower unless other creditors of such
borrower (other than those creditors who are fully collateralized)
representing a substantial portion of the total debt of the
borrower held by such creditors, agree to participate in the
development of the restructuring plan or agree to participate in a
State mediation program.
"(B) FAILURE OF CREDITORS TO AGREE. -- Failure of creditors to
agree to participate in the restructuring plan or mediation
program shall not preclude the use of principal and interest
write-down by the Secretary if the Secretary determines that this
restructuring alternative results in the least cost to the
Secretary.
"(2) PARTICIPATION OF CREDITORS. -- Before eliminating the
option to use debt write-down in the case of a borrower, the
Secretary shall make a reasonable effort to contact the creditors
of such borrower, either directly or through the borrower, and
encourage such creditors to participate with the Secretary in the
development of a restructuring plan for the borrower.
"(e) SHARED APPRECIATION ARRANGEMENTS. --
"(1) IN GENERAL. -- As a condition of restructuring a loan in
accordance with this section, the borrower of the loan may be
required to enter into a shared appreciation arrangement that
requires the repayment of amounts written off or set aside.
"(2) TERMS. -- Shared appreciation agreements shall have a
term not to exceed 10 years, and shall provide for recapture based
on the difference between the appraised values of the real
security property at the time of restructuring and at the time of
recapture.
"(3) PERCENTAGE OF RECAPTURE. -- The amount of the
appreciation to be recaptured by the Secretary shall be 75 percent
of the appreciation in the value of such real security property if
the recapture occurs within 4 years of the restructuring, and 50
percent if the recapture occurs during the remainder of the term
of the agreement.
"(4) TIME OF RECAPTURE. -- Recapture shall take place at the
end of the term of the agreement, or sooner --
"(A) on the conveyance of the real security property;
"(B) on the repayment of the loans; or
"(C) if the borrower ceases farming operations.
"(5) TRANSFER OF TITLE. -- Transfer of title to the spouse of
a borrower on the death of such borrower shall not be treated as a
conveyance for the purpose of paragraph (4).
"(f) DETERMINATION TO RESTRUCTURE. -- If the appeal process results
in a determination that a loan is eligible for restructuring, the
Secretary shall restructure the loan in the manner consistent with this
section, taking into consideration the restructuring recommendations, if
any, of the appeals officer.
"(g) PREREQUISITES TO FORECLOSURE OR LIQUIDATION. -- No foreclosures
or other similar actions shall be taken to liquidate any loan determined
to be ineligible for restructuring by the Secretary under this section
--
"(1) until the borrower has been given the opportunity to
appeal such decision; and
"(2) if the borrower appeals, the appeals process has been
completed, and a determination has been made that the loan is
ineligible for restructuring.
"(h) TIME LIMITS FOR RESTRUCTURING. -- Once an appeal has been filed
under section 333B, a decision shall be made at each level in the
appeals process within 45 days after the receipt of the appeal or
request for further review.
"(i) NOTICE OF INELIGIBILITY FOR RESTRUCTURING. --
"(1) IN GENERAL. -- A notice of ineligibility for
restructuring shall be sent to the borrower by registered or
certified mail within 15 days after such determination.
"(2) CONTENTS. -- The notice required under paragraph (1)
shall contain --
"(A) the determination and the reasons for determination;
"(B) the computations used to make the determination, including
the calculation of the recovery value of the collateral securing
the loan; and
"(C) a statement of the right of the borrower to appeal the
decision to the appeals division, and to appear before a hearing
officer.
"(j) INDEPENDENT APPRAISALS. -- An appeal filed with the appeals
division under section 333B may include a request by the borrower for an
independent appraisal of any property securing the loan. On such
request, the appeals division shall present the borrower with a list of
three appraisers approved by the county supervisor, from which the
borrower shall select an appraiser to conduct the appraisal, the cost of
which shall be borne by the borrower. The results of such appraisal
shall be considered in any final determination concerning the loan. A
copy of any appraisal made under this paragraph shall be provided to the
borrower.
"(k) FUTURE CREDITWORTHINESS OF BORROWER DETERMINED WITHOUT REGARD TO
RESTRUCTURING. -- The creditworthiness of, or the adequacy of
collateral offered by, any borrower whose loan obligations are
restructured under this section shall be determined without regard to
such restructuring.".
(b) OTHER RESTRUCTURING PROVISIONS. --
(1) OPTION TO RESTRUCTURE INTEREST RATES FOR CERTAIN WATER AND
WASTE DISPOSAL AND COMMUNITY FACILITY BORROWERS. --
(A) IN GENERAL. -- The item designated "Loan Programs" under
the subheading "Farmers Home Administration" in chapter I of title
I of the Supplemental Appropriations Act, 1985 (7 U.S.C. 1927a;
99 Stat. 296) is amended --
(i) by striking out "Effective November 12, 1983, and
thereafter," and inserting in lieu thereof "Effective October 1,
1981, and thereafter, in the case of water and waste disposal and
community facility borrowers, and effective November 12, 1983, and
thereafter, in the case of housing and farm borrowers,"; and
(ii) by striking out "housing, farm, water and waste disposal,
and community facility" and inserting in lieu thereof "such". "7
USC 1927a note"
(B) CERTAIN OBLIGATIONS EXCEPTED. -- The amendment made by
subparagraph (A) shall not apply to any note or other obligation
sold under section 1001 of the Omnibus Reconciliation Act of 1986
on or before the date of the enactment of this paragraph.
(2) INTEREST RATE RESTRUCTURING FOR CERTAIN OTHER BORROWERS.
-- Effective July 29, 1987, "7 USC 1926 note" the interest rate
charged on any loan of $2,000,000 or more made on such date under
section 306 to any nonprofit corporation shall be the interest
rate quoted to such nonprofit corporation by the Farmers Home
Administration on June 22, 1987, in the request for obligation of
funds made with respect to the loan.
(c) LIQUIDATION NOT REQUIRED AS PREREQUISITE TO DEBT RESTRUCTURING
AND LOAN SERVICING. -- Subsection (d) of section 331 (7 U.S.C. 1981(d))
is amended --
(1) by inserting "debts or" before "claims"; and
(2) by adding at the end of the first sentence the following:
"The Secretary may not require liquidation of property securing
any farmer program loan or acceleration of any payment required
under any farmer program loan or acceleration of any payment
required under any farmer program loan as a prerequisite to
initiating an action authorized under this subsection.". "7 USC
2001 note"
(d) SUSPENSION OF COLLECTION ACTIVITIES DURING TRANSITION PERIOD. --
The Secretary of Agriculture shall not initiate any acceleration,
foreclosure, or liquidation in connection with any delinquent farmer
program loan before the date the Secretary has issued final regulations
to carry out the amendments made by this section. The preceding
sentence shall not prohibit the Secretary from taking any action with
respect to waste, fraud, or abuse by the borrower.
Subtitle D (7 U.S.C. 1981 et seq.) is amended by adding after the
section added by section 615(a) of this Act the following new section:
"The Secretary, without reimbursement, may transfer to any Federal or
State agency, for conservation purposes any real property, or interest
therein, administered by the Secretary under this Act --
"(1) with respect to which the rights of all prior owners and
operators have expired;
"(2) that is determined by the Secretary to be suitable or
surplus; and
"(3) that --
"(A) has marginal value for agricultural production;
"(B) is environmentally sensitive; or
"(C) has special management importance."
Subtitle D (7 U.S.C. 1981 et seq.) is amended by adding after the
section added by section 616 of this Act the following new section:
"(a) ESTABLISHMENT. --
"(1) IN GENERAL. -- The Secretary shall establish annual
target participation rates, on a county wide basis, that shall
ensure that members of socially disadvantaged groups will receive
loans made or insured under subtitle A and will have the
opportunity to purchase or lease inventory farmland.
"(2) GROUP POPULATION. -- In establishing such target rates
the Secretary shall take into consideration the portion of the
population of the county made up of such groups, and the
availability of inventory farmland in such county.
"(b) RESERVATION AND ALLOCATION. --
"(1) RESERVATION. -- The Secretary shall, to the greatest
extent practicable, reserve sufficient loan funds made available
under subtitle A, for use by members of socially disadvantaged
groups identified under target participation rates established
under subsection (a).
"(2) ALLOCATION. -- The Secretary shall allocate such loans on
the basis of the proportion of members of socially disadvantaged
groups in a county and the availability of inventory farmland,
with the greatest amount of loan funds being distributed in the
county with the greatest proportion of socially disadvantaged
group members and the greatest amount of available inventory
farmland.
"(c) REPORT. -- The Secretary shall prepare and submit, to the
Committee on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of the Senate, a
report that describes the annual target participation rates and the
success in meeting such rates.
"(d) DEFINITION. -- As used in this section, the term 'socially
disadvantaged group' means a group whose members have been subjected to
racial or ethnic prejudice because of their identity as members of a
group without regard to their individual qualities.".
PROPERTY.
Subtitle D (7 U.S.C. 1981 et seq.) is amended by adding after the
section added by section 617 of this Act the following:
INVENTORY PROPERTY.
"The Farmers Home Administration may employ local attorneys, on a
case-by-case basis, to process all legal procedures necessary to clear
the title to foreclosed properties in the inventory of the Farmers Home
Administration. Such attorneys shall be compensated at not more than
their usual and customary charges for such work.".
Subtitle D (7 U.S.C. 1981 et seq.) is amended by adding at the end
thereof the following new section:
LOANS.
"(a) PAYMENTS TO LENDERS. --
"(1) REQUIREMENT. -- Within 3 months after a court of
competent jurisdiction confirms a plan of reorganization under
chapter 12 of title 11, United States Code, for any borrower to
whom a lender has made a loan guaranteed under this title, the
Secretary shall pay the lender an amount estimated by the
Secretary to be equal to the loss incurred by the lender for
purposes of the guarantee.
"(2) PAYMENT TOWARD LOAN GUARANTEE. -- Any amount paid to a
lender under this subsection with respect to a loan guaranteed
under this title shall be treated as payment towards satisfaction
of the loan guarantee.
"(b) ADMINISTRATION. --
"(1) LOSS BY LENDER. -- If the lender of a guaranteed farmer
program loan takes any action described in section 331(d) with
respect to the loan and the Secretary approves such action, then,
for purposes of the guarantee, the lender shall be treated as
having sustained a loss equal to the amount by which --
"(A) the outstanding balance of the loan immediately before
such action, exceeds
"(B) the outstanding balance of the loan immediately after such
action.
"(2) NET PRESENT VALUE OF LOAN. -- The Secretary shall approve
the taking of an action described in section 331(d) by the lender
of a guaranteed farmer program loan with respect to the loan if
such action reduces the net present value of the loan to an amount
equal to not less than the greater of --
"(A) the greatest net present value of a loan the borrower
could reasonably be expected to repay; and
"(B) the greatest amount that the lender of the loan could
reasonably expect to recover from the borrower through bankruptcy,
or liquidation of the property securing the loan, less all
reasonable and necessary costs and expenses that the lender of the
loan could reasonably expect to incur to preserve or dispose of
such property (including all associated legal and property
management costs) in the course of such a bankruptcy or
liquidation.
"(3) CONSTRUCTION OF SUBSECTION. -- This subsection shall not
be construed to limit the authority of the Secretary to enter into
a shared appreciation arrangement with a borrower, or the terms
and conditions which shall be required of a borrower, under
section 353(e).".
Notwithstanding any other provision of law, the Secretary of
Agriculture may lease to public or private nonprofit organizations, for
a nominal rent, any facilities acquired in connection with the
disposition of a loan made by the Secretary under section 306. Any such
lease shall be for such reasonable period of time as the Secretary
determines is appropriate.
CERTAIN FINAL REGULATIONS.
Not later than 60 days before the Secretary of Agriculture issues
final regulations providing for the use of ratios and standards as part
of loan applications or preapplications, for determining the degree of
potential loan risk on loans insured or guaranteed under the
Consolidated Farm and Rural Development Act, the Secretary shall
complete a study and report to the Committee on Agriculture, Nutrition,
and Forestry of the Senate and the Committee on Agriculture of the House
of Representatives on the effects of such regulations on a
representative sample of persons who, as of the date of the enactment of
this Act, are borrowers or potential borrowers of such loans, and shall
demonstrate in such study that the implementation of such final
regulations will not result in a portfolio of borrowers that is
inconsistent with the purposes of the Consolidated Farm and Rural
Development Act.
INITIATIVE.
The Secretary of Agriculture shall maintain substantially at the
levels in effect on the date of the enactment of this title, the limited
resource farmers' initiative in the office of the Director of the Office
of Advocacy and Enterprise.
DISADVANTAGED INDIVIDUALS.
The Secretary of Agriculture, in coordination with the limited
resource farmers' initiative in the office of the Director of the Office
of Advocacy and Enterprise, shall establish a farm ownership outreach
program for persons who are members of any group with respect to which
an individual may be identified as a socially disadvantaged individual
under section 8(a)(5) of the Small Business Act (15 U.S.C. 637(a)(5)) to
encourage the acquisition of inventory farmland of the Farmers Home
Administration by --
(1) informing persons eligible for assistance under any other
provision of this Act of --
(A) the possibility of acquiring such inventory farmland; and
(B) various farm ownership loan programs; and
(2) providing technical assistance to such persons in the
acquisition of such inventory farmland.
Within 150 days after the date of the enactment of this title, and
after considering public comment obtained under section 553 of title 5,
United States Code, the Secretary shall issue final regulations to carry
out the amendments made by this title.
PROGRAM.
It is the sense of Congress that the Secretary of Agriculture should
issue guarantees for loans under the Consolidated Farm, and Rural
Development Act, to the maximum extent practicable, to assist eligible
borrowers whose loans are restructured by institutions of the Farm
Credit System, commercial banks, insurance companies, and other lending
institutions.
CRISIS RESPONSE CENTER.
It is the sense of Congress that efforts by various State and local
public agencies, citizens' groups, church and civic organizations, and
individuals to focus attention on and respond to rural problems
throughout the Nation are deserving of the recognition, encouragement,
and support of Congress and the American people for the valuable
services they provide.
It is the purpose of this subtitle --
(1) to establish a corporation chartered by the Federal
Government;
(2) to authorize the certification of agricultural mortgage
marketing facilities by the corporation;
(3) to provide for a secondary marketing arrangement for
agricultural real estate mortgages that meet the underwriting
standards of the corporation --
(A) to increase the availability of long-term credit to farmers
and ranchers at stable interest rates;
(B) to provide greater liquidity and new lending capacity in
extending credit to farmers and ranchers; and
(C) to provide an arrangement for new lending to facilitate
capital market investments in providing long-term agricultural
funding, including funds at fixed rates of interest; and
(4) to enhance the ability of individuals in small rural
communities to obtain financing for moderate-priced homes.
The Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.) is amended by
adding after title VII (as added by section 401 of this Act) the
following new title:
"For purposes of this title:
"(1) AGRICULTURAL REAL ESTATE. -- The term 'agricultural real
estate' means --
"(A) a parcel or parcels of land, or a building or structure
affixed to the parcel or parcels, that --
"(i) is used for the production of one or more agricultural
commodities or products; and
"(ii) consists of a minimum acreage or is used in producing
minimum annual receipts, as determined by the Corporation; or
"(B) a principal residence that is a single family,
moderate-priced residential dwelling located in a rural area,
excluding --
"(i) any community having a population in excess of 2,500
inhabitants; and
"(ii) any dwelling with a purchase price exceeding $100,000 (as
adjusted for inflation).
"(2) BOARD. -- The term 'Board' means --
"(A) the interim board of directors established in section
8.2(a); and
"(B) the permanent board of directors established in section
8.2(b); as the case may be.
"(3) CERTIFIED FACILITY. -- The term 'certified facility'
means a secondary marketing agricultural loan facility that is
certified under section 8.5.
"(4) CORPORATION. -- The term 'Corporation' means the Federal
Agricultural Mortgage Corporation established in section 8.1.
"(5) GUARANTEE. -- The term 'guarantee' means the guarantee of
timely payment of the principal and interest on securities
representing interests in, or obligations backed by, pools of
qualified loans, in accordance with this title.
"(6) INTERIM BOARD. -- The term 'interim board' means the
interim board of directors established in section 8.2(a).
"(7) ORIGINATOR. -- The term 'originator' means any Farm
Credit System institution, bank, insurance company, business and
industrial development company, savings and loan association,
association of agricultural producers, agricultural cooperative,
commercial finance company, trust company, credit union, or other
entity that originates and services agricultural mortgage loans.
"(8) PERMANENT BOARD. -- The term 'permanent board' means the
permanent board of directors established in section 8.2(b).
"(9) QUALIFIED LOAN. -- The term 'qualified loan' means an
obligation that --
"(A) is secured by a fee-simple or leasehold mortgage with
status as a first lien on agricultural real estate located in the
United States that is not subject to any legal or equitable claims
deriving from a preceding fee-simple or leasehold mortgage;
"(B) is an obligation of --
"(i) a citizen or national of the United States or an alien
lawfully admitted for permanent residence in the United States;
or
"(ii) a private corporation or partnership whose members,
stockholders, or partners hold a majority interest in the
corporation or partnership and are individuals described in clause
(i); and
"(C) is an obligation of a person, corporation, or partnership
that has training or farming experience that, under criteria
established by the Corporation, is sufficient to ensure a
reasonable likelihood that the loan will be repaid according to
its terms.
"(10) STATE. -- The term "State' has the meaning given such
term in section 5.51.
CORPORATION.
"(a) ESTABLISHMENT. --
"(1) IN GENERAL. -- There is hereby established a corporation
to be known as the Federal Agricultural Mortgage Corporation,
which shall be a federally chartered instrumentality of the United
States.
"(2) INSTITUTION WITHIN FARM CREDIT SYSTEM. -- The Corporation
shall be an institution of the Farm Credit System.
"(3) LIABILITY. --
"(A) CORPORATION. -- The Corporation shall not be liable for
any debt or obligation of any other institution of the Farm Credit
System.
"(B) SYSTEM INSTITUTIONS. -- The Farm Credit System and System
institutions (other than the Corporation) shall not be liable for
any debt or obligation of the Corporation.
"(b) DUTIES. -- The Corporation shall --
"(1) in consultation with originators, develop uniform
underwriting, security appraisal, and repayment standards for
qualified loans;
"(2) determine the eligibility of agricultural mortgage
marketing facilities to contract with the Corporation for the
provision of guarantees for specific mortgage pools; and
"(3) provide guarantees for the timely repayment of principal
and interest on securities representing interests in, or
obligations backed by, pools of qualified loans.
"(a) INTERIM BOARD. --
"(1) NUMBER AND APPOINTMENT. -- Until the permanent board of
directors established in subsection (b) first meets with a quorum
of its members present, the Corporation shall be under the
management of an interim board of directors composed of 9 members
appointed by the President within 90 days after the effective date
of this title as follows:
"(A) 3 members appointed from among persons who are
representatives of banks, other financial institutions or
entities, and insurance companies.
"(B) 3 members appointed from among persons who are
representatives of the Farm Credit System institutions.
"(C) 2 members appointed from among persons who are farmers or
ranchers who are not serving, and have not served, as directors or
officers of any financial institution or entity, of which not more
than 1 may be a stockholder of any Farm Credit System institution.
"(D) 1 member appointed from among persons who represent the
interests of the general public and are not serving, and have not
served, as directors or officers of any financial institution or
entity.
"(2) POLITICAL AFFILIATION. -- Not more than 5 members of the
interim board shall be of the same political party.
"(3) VACANCY. -- A vacancy in the interim board shall be
filled in the manner in which the original appointment was made.
"(4) CONTINUATION OF MEMBERSHIP. -- If --
"(A) any member of the interim board who was appointed to such
board from among persons who are representatives of banks, other
financial institutions or entities, insurance companies, or Farm
Credit System institutions ceases to be such a representative; or
"(B) any member who was appointed from among persons who are
not or have not been directors or officers of any financial
institution or entity becomes a director or an officer of any
financial institution or entity;
such member may continue as a member for not longer than the
45-day period beginning on the date such member ceases to be such
a representative or becomes such a director or officer, as the
case may be.
"(5) TERMS. -- The members of the interim board shall be
appointed for the life of such board.
"(6) QUORUM. -- 5 members of the interim board shall
constitute a quorum.
"(7) CHAIRPERSON. -- The President shall designate 1 of the
members of the interim board as the chairperson of the interim
board.
"(8) MEETINGS. -- The interim board shall meet at the call of
the chairperson or a majority of its members.
"(9) VOTING COMMON STOCK. --
"(A) INITIAL OFFERING. -- Upon the appointment of sufficient
members of the interim board to convene a meeting with a quorum
present, the interim board shall arrange for an initial offering
of common stock and shall take whatever other actions are
necessary to proceed with the operations of the Corporation.
"(B) PURCHASERS. -- Subject to subparagraph (C), the voting
common stock shall be offered to banks, other financial entities,
insurance companies, and System institutions under such terms and
conditions as the interim board may adopt.
"(C) DISTRIBUTION. -- The voting stock shall be fairly and
broadly offered to ensure that no institution or institutions
acquire a disproportionate amount of the total amount of voting
common stock outstanding of a class and that capital contributions
and issuances of voting common stock for the contributions are
fairly distributed between entities eligible to hold class A and
class B stock, as provided under section 8.4.
"(10) TERMINATION. -- The interim board shall terminate when
the permanent board of directors established in subsection (b)
first meets with a quorum present.
"(b) PERMANENT BOARD. --
"(1) ESTABLISHMENT. -- Immediately after the date that banks,
other financial institutions or entities, insurance companies, and
System institutions have subscribed and fully paid for at least
$20,000,000 of common stock of the Corporation, the Corporation
shall arrange for the election and appointment of a permanent
board of directors. After the termination of the interim board,
the Corporation shall be under the management of thepermanent
board.
"(2) COMPOSITION. -- The permanent board shall consist of 15
members, of which --
"(A) 5 members shall be elected by holders of common stock that
are insurance companies, banks, or other financial institutions or
entities;
"(B) 5 members shall be elected by holders of common stock that
are Farm Credit System institutions; and
"(C) 5 members shall be appointed by the President, by and with
the advice and consent of the Senate --
"(i) which members shall not be, or have been, officers or
directors of any financial institutions or entities;
"(ii) which members shall be representatives of the general
public;
"(iii) of which members not more than 3 shall be members of the
same political party; and
"(iv) of which members at least 2 shall be experienced in
farming or ranching.
"(3) PRESIDENTIAL APPOINTEES. -- The President shall appoint
the members of the permanent board referred to in paragraph (2)(C)
not later than the later of --
"(A) the date referred to in paragraph (1); or
"(B) the expiration of the 270-day period beginning on the
effective date of this title.
"(4) VACANCY. --
"(A) ELECTED MEMBERS. -- Subject to paragraph (6), a vacancy
among the members elected to the permanent board in the manner
described in subparagraph (A) and (B) of paragraph (2) shall be
filled by the permanent board from among persons eligible for
election to the postion for which the vacancy exists.
"(B) APPOINTED MEMBERS. -- A vacancy among the members
appointed to the permanent board under paragraph (2)(C) shall be
filed in the manner in which the original appointment was made.
"(5) CONTINUATION OF MEMBERSHIP. -- If --
"(A) any member of the permanent board who was appointed or
elected to the permanent board from among persons who are
representatives of banks, other financial institutions or
entities, insurance companies, or Farm Credit System institutions
ceases to be such a representative; or
"(B) any member who was appointed from persons who are not or
have not been directors or officers of any financial institution
or entity becomes a director or an officer of any financial
institution or entity;
such member shall continue as a member for not longer than the
45-day period beginning on the date such member ceases to be such
a representative, officer, or employee or becomes such a director
or officer, as the case may be.
"(6) TERMS. --
"(A) APPOINTED MEMBERS. -- The members appointed by the
President shall serve at the pleasure of the President.
"(B) ELECTED MEMBERS. -- The members elected under
subparagraphs (A) and (B) of subsection (b)(2) shall each be
elected annually for a term ending on the date of the next annual
meeting of the common stockholders of the Corporation and shall
serve until their successors are elected and qualified. Any seat
on the permanent board that becomes vacant after the annual
election of the directors shall be filled by the members of the
permanent board from the same category of directors, but only for
the unexpired portion of the term.
"(C) VACANCY APPOINTMENT. -- Any member appointed to fill a
vacancy occurring before the expiration of the term for which the
predecessor of the member was appointed shall be appointed only
for the remainder of such term.
"(D) SERVICE AFTER EXPIRATION OF TERM. -- A member may serve
after the expiration of the term of the member until the successor
of the member has taken office.
"(7) QUORUM. -- 8 members of the permanent board shall
constitute a quorum.
"(8) NO ADDITIONAL PAY FOR FEDERAL OFFICERS OR EMPLOYEES. --
Members of the permanent board who are fulltime officers or
employees of the United States shall receive no additional pay by
reason of service on the permanent board.
"(9) CHAIRPERSON. -- The President shall designate 1 of the
members of the permanent board who are appointed by the President
as the chairperson of the permanent board.
"(10) MEETINGS. -- The permanent board shall meet at the call
of the chairperson or a majority of its members.
"(c) OFFICERS AND STAFF. -- The Board may appoint, employ, fix the
pay of, and provide other allowances and benefits for such officers and
employees of the Corporation as the Board determines to be appropriate.
CORPORATION AND BOARD.
"(a) GUARANTEES. -- After the Board has been duly constituted,
subject to the other provisions of this title and other commitments and
requirements established pursuant to law, the Corporation may provide
guarantees on terms and conditions determined by the Corporation of
securities issued on the security of, or in participation in, pooled
interests in qualified loans.
"(b) DUTIES OF THE BOARD. --
"(1) IN GENERAL. -- The Board shall --
"(A) determine the general policies that shall govern the
operations of the Corporation;
"(B) select, appoint, and determine the compensation of
qualified persons to fill such offices as may be provided for in
the bylaws of the Corporation; and
"(C) assign to such persons such executive functions, powers,
and duties as may be prescribed by the bylaws of the Corporation
or by the Board.
"(2) EXECUTIVE OFFICERS AND FUNCTIONS. -- The persons elected
or appointed under paragraph (1)(B) shall be the executive
officers of the Corporation and shall discharge the executive
functions, powers, and duties of the Corporation.
"(c) POWERS OF THE CORPORATION. -- The Corporation shall be a body
corporate and shall have the following powers:
"(1) To operate under the direction of its Board.
"(2) To issue stock in the manner provided in section 8.4.
"(3) To adopt, alter, and use a corporate seal, which shall be
judicially noted.
"(4) To provide for a president, 1 or more vice presidents,
secretary, treasurer, and such other officers, employees, and
agents, as may be necessary, define their duties and compensation
levels, all without regard to title 5, United States Code, and
require surety bonds or make other provisions against losses
occasioned by acts of the persons.
"(5) To provide guarantees in the manner provided under section
8.6.
"(6) To have succession until dissolved by a law enacted by the
Congress.
"(7) To prescribe bylaws, through the Board, not inconsistent
with law, that shall provide for --
"(A) the classes of the stock of the Corporation; and
"(B) the manner in which --
"(i) the stock shall be issued, transferred, and retired;
"(ii) the officers, employees, and agents of the Corporation
are selected;
"(iii) the property of the Corporation is acquired, held, and
transferred;
"(iv) the commitments and other financial assistance of the
Corporation are made;
"(v) the general business of the Corporation is conducted; and
"(vi) the general business of the Corporation are exercised and
enjoyed;
"(8) To prescribe such standards as may be necessary to carry
out this title.
"(9) To enter into contracts and make payments with respect to
the contracts.
"(10) To sue and be sued in its corporate capacity and to
complain and defend in any action brought by or against the
Corporation in any State or Federal court of competent
jurisdiction.
"(11) To make and perform contracts, agreements, and
commitments with persons and entities both inside and outside of
the Farm Credit System.
"(12) To acquire, hold, lease, mortgage or dispose of, at
public or private sale, real and personal property, purchase or
sell any securities or obligations, and otherwise exercise all the
usual incidents of ownership of property necessary and convenient
to the business of the Corporation.
"(13) To exercise such other incidental powers as are necessary
to carry out the powers, duties, and functions of the Corporation
in accordance with this title.
"(d) FEDERAL RESERVE BANKS AS DEPOSITARIES AND FISCAL AGENTS. -- The
Federal Reserve banks may act as depositaries for, or as fiscal agents
or custodians of, the Corporation.
"(e) ACCESS TO BOOK-ENTRY SYSTEM. -- The Secretary of the Treasury
may authorize the Corporation to use the book-entry system of the
Federal Reserve System.
"(a) VOTING COMMON STOCK. --
"(1) ISSUE. -- The Corporation shall issue voting common stock
having such par value as may be fixed by the Board from time to
time. Each share of voting common stock shall be entitled to one
vote with rights of cumulative voting at all elections of
directors. Voting shall be by classes as described in section
8.2(a)(9). The stock shall be divided into two classes with the
same par value per share. Class A stock may be held only by
entities that are not Farm Credit System institutions that are
entitled to vote for directors specified in section 8.2(b)(2)(A).
Class B stock may be held only by Farm Credit System institutions
that are entitled to vote for directors specified in section
8.2(b)(2)(B).
"(2) LIMITATION ON ISSUE. -- After the date the permanent
board first meets with a quorum of its members present, voting
common stock of the Corporation may be issued only to originators
and certified facilities.
"(3) AUTHORITY OF BOARD TO ESTABLISH TERMS AND PROCEDURES. --
The Board shall adopt such terms, conditions, and procedures with
regard to the issue of stock under this section as may be
necessary, including the establishment of a maximum amount
limitation on the number of shares of voting common stock that may
be outstanding at any time.
"(4) TRANSFERABILITY. -- Subject to such limitations as the
Board may impose, any share of any class of voting common stock
issued under this section shall be transferable among the
institutions or entities to which shares of such class of common
stock may be offered under paragraph (1), except that, as to the
Corporation, such shares shall be transferable only on the books
of the Corporation.
"(5) MAXIMUM NUMBER OF SHARES. -- No stockholder, other than a
holder of class B stock, may own, directly or indirectly, more
than 33 percent of the outstanding shares of such class of the
voting common stock of the Corporation.
"(b) REQUIRED CAPITAL CONTRIBUTIONS. --
"(1) IN GENERAL. -- The Corporation may require each
originator and each certified facility to make, or commit to make,
such nonrefundable capital contributions to the Corporation as are
reasonable and necessary to meet the administrative expenses of
the Corporation.
"(2) STOCK ISSUED AS CONSIDERATION FOR CONTRIBUTION. -- The
Corporation, from time to time, shall issue to each originator or
certified facility voting common stock evidencing any capital
contributions made pursuant to this subsection.
"(c) DIVIDENDS. --
"(1) IN GENERAL. -- Such dividends as may be declared by the
Board, in the discretion of the Board, shall be paid by the
Corporation to the holders of the voting common stock of the
Corporation pro rata based on the total number of shares of both
classes of stock outstanding.
"(2) RESERVES REQUIREMENT. -- No dividend may be declared or
paid by the Board under this section unless the Board determines
that adequate provision has been made for the reserve required
under section 8.10(c)(1).
"(3) DIVIDENDS PROHIBITED WHILE OBLIGATIONS ARE OUTSTANDING.
-- No dividend may be declared or paid by the Board under this
section while any obligation issued by the Corporation to the
Secretary of the Treasury under section 8.13 remains outstanding.
"(d) NONVOTING COMMON STOCK. -- The Corporation is authorized to
issue nonvoting common stock having such par value as may be fixed by
the Board from time to time. Such nonvoting common stock shall be
freely transferable, except that, as to the Corporation, such stock
shall be transferable only on the books of the Corporation. Such
dividends as may be declared by the Board, in the discretion of the
Board, may be paid by the Corporation to the holders of the nonvoting
common stock of the Corporation, subject to paragraphs (2) and (3) of
subsection (c).
"(e) PREFERRED STOCK. --
"(1) AUTHORITY OF BOARD. -- The Corporation is authorized to
issue nonvoting preferred stock having such par value as may be
fixed by the Board from time to time. Such preferred stock issued
shall be freely transferable, except that, as to the Corporation,
such stock shall be transferred only on the books of the
Association.
"(2) RIGHTS OF PREFERRED STOCK. -- Subject to paragraphs (2)
and (3) of subsection (c), the holders of the preferred stock
shall be entitled to such rate of cumulative dividends, and such
holders shall be subject to such redemption or other conversion
provisions, as may be provided for at the time of issuance. No
dividends shall be payable on any share of common stock at any
time when any dividend is due on any share of preferred stock and
has not been paid.
"(3) PREFERENCE ON TERMINATION OF BUSINESS. -- In the event of
any liquidation, dissolution, or winding up of the business of the
Corporation, the holders of the preferred shares of stock shall be
paid in full at the par value thereof, plus all accrued dividends,
before the holders of the common shares receive any payment.
AGRICULTURAL, MORTGAGE MARKETING FACILITIES.
"(a) ELIGIBILITY STANDARDS. --
"(1) ESTABLISHMENT REQUIRED. -- Within 120 days after the date
on which the permanent board first meets with a quorum present,
the Corporation shall issue standards for the certification of
agricultural mortgage marketing facilities, including eligibility
standards in accordance with paragraph (2).
"(2) MINIMUM REQUIREMENTS. -- To be eligible to be certified
under the standards referred to in paragraph (1), an agricltural
mortgage marketing facility shall --
"(A) be an institution of the Farm Credit System or a
corporation, association, or trust organized under the laws of the
United States or of any State;
"(B) meet or exceed capital standards established by the Board;
"(C) have as one of the purposes of the facility, the sale or
resale of securities representing interests in, or obligations
backed by, pools of qualified loans that have been provided
guarantees by the Corporation;
"(D) demonstrate managerial ability with respect to
agricultural mortgage loan underwriting, servicing, and marketing
that is acceptable to the Corporation;
"(E) adopt appropriate agricultural mortgage loan underwriting,
appraisal, and servicing standards and procedures that meet or
exceed the standards established by the Board;
"(F) for purposes of enabling the Corporation to examine the
facility, agree to allow officers or employees of the Corporation
to have access to all books, accounts, financial records, reports,
files, and all other papers, things, or property, of any type
whatsoever, belonging to or used by the Corporation that are
necessary to facilitate an examination of the operations of
facility in connection with securities, and the pools of qualified
loans that back securities, for which the Corporation has provided
guarantees; and
"(G) adopt appropriate minimum standards and procedures
relating to loan administration and disclosure to borrowers
concerning the terms and rights applicable to loans for which
guarantee is provided, in conformity with uniform standards
established by the Corporation.
"(3) NONDISCRIMINATION REQUIREMENT. -- The standards
established under this subsection shall not discriminate between
or against Farm Credit System and non-Farm Credit System
applicants.
"(b) CERTIFICATION BY CORPORATION. -- Within 60 days after receiving
an application for certification under this secttion, the Corporation
shall certify the facility if the facility meets the standards
established by the Corporation under subsection (a)(1).
"(c) MAXIMUM TIME PERIOD FOR CERTIFICATION. -- Any certification by
the Corporation of an agricultural mortgage marketing facility shall be
effective for a period determined by the Corporation of not to exceed 5
years.
"(d) REVOCATION. --
"(1) IN GENERAL. -- After notice and an opportunity for a
hearing, the Corporation may revoke the certification of an
agricultural mortgage marketing facility if the Corporation
determines that the facility no longer meets the standards
referred to in subsection (a).
"(2) EFFECT OF REVOCATION. -- Revocation of a certification
shall not affect any pool guarantee that has been issued by the
Corporation.
"(e) AFFILIATION OF FCS INSTITUTIONS WITH FACILITY. --
"(1) ESTABLISHMENT OF AFFILIATE AUTHORIZED. -- Notwithstanding
any other provision of this Act, any Farm Credit System
institution (other than the Corporation), acting for such
institution alone or in conjunction with one or more other such
institutions, may establish and operate, as an affiliate, an
agricultural mortgage marketing facility if, within a reasonable
time after such establishment, such facility obtains and
thereafter retains certification under subsection (b) as a
certified facility.
"(2) EXCLUSIVE AGENCY AGREEMENT AUTHORIZED. -- Any number of
Farm Credit System institutions (other than the Corporation) may
enter into an agreement with any certified facility (including an
affiliate established under paragraph (1)) to sell the qualified
loans of such institutions exclusively to or through the facility.
"(a) GUARANTEE AUTHORIZED FOR CERTIFIED FACILITIES. --
"(1) IN GENERAL. -- Subject to the requirements of this
section and on such other terms and conditions as the Corporation
shall consider appropriate, the Corporation shall guarantee the
timely payment of principal and interest on the securities issued
by a certified facility that represents interests in, or
obligations backed by, any pool of qualified loans held by such
facility.
"(2) INABILITY OF FACILITY TO PAY. -- If the facility is
unable to make any payment of principal or interest on any
security for which a guarantee has been provided by the
Corporation under paragraph (1), subject to the provisions of
subsection (b) the Corporation shall make such payment as and when
due in cash, and on such payment shall be subrogated fully to the
rights satisfied by such payment.
"(3) POWER OF CORPORATION. -- Notwithstanding any other
provision of law, the Corporation is empowered, in connection with
any guarantee under this subsection, whether before or after any
default, to provide by contract with the facility for the
extinguishment, on default by the facility, of any redemption,
equitable, legal, or other right, title, or interest of the
facility in any mortgage or mortgages constituting the pool
against which the guaranteed securities are issued. With respect
to any issue of guaranteed securities, in the event of default and
pursuant otherwise to the terms of the contract, the mortgages
that constitute such pool shall become the absolute property of
the Corporation subject only to the unsatisfied rights of the
holders of the securities based on and backed by such pool.
"(b) RESERVE OR SUBORDINATED PARTICIPATION REQUIREMENTS. -- In the
case of any pool referred to in subsection (a), the Corporation shall --
"(1) provide a guarantee only with respect to an individual
pool of qualified loans on application of a certified facility;
"(2) provide a guarantee only if a reserve, or retained
subordinated participating interests, in an amount equal to at
least 10 percent of the outstanding principal amount of the loans
constituting the pool has been established in accordance with this
title;
"(3) require that full recourse be taken against reserves and
retained subordinated participating interests before any demand be
made by the certified facility with respect to the guarantee of
the Corporation; and
"(4) ensure the timely receipt of principal and interest due to
security or obligation holders only after full recourse has been
taken against such reserves and retained subordinated particpating
interests.
"(c) STANDARDS REQUIRING DIVERSIFIED POOLS. --
"(1) IN GENERAL. -- To reduce the risks incurred by the
Corporation in providing guarantees under this section and to
further the purposes of this title, the Board shall establish
standards governing the composition of each pool of qualified
loans (in connection with which such guarantees are provided) over
the period during which the commitment to provide guarantees is
effective.
"(2) MINIMUM CRITERIA. -- The standards established by the
Board pursuant to paragraph (1) for pools of qualified loans
shall, at a minimum --
"(A) require that each pool consist of loans that --
"(i) are secured by agricultural real estate that is widely
distributed geographically;
"(ii) vary widely in terms of amounts of principal; and
"(iii) in the case of land used in the production of
agricultural commodites, are secured by agricultural real estate
that, in the aggregate, is used to produce a wide range of
agricultural commodities;
"(B) prohibit the inclusion in any such pool of --
"(i) any loan the principal amount of which exceeds 3.5 percent
of the aggregate amount of principal of all loans in such pool;
and
"(ii) 2 or more loans to related borrowers; and
"(C) require that each pool consist of not less than 50 loans.
"(3) SMALL FARMS AND FAMILY FARMERS. -- In establishing the
standards described in paragraph (2)(A)(ii), the Board shall
include provisions that promote and encourage the inclusion of
loans for small farms and family farmers in pools of qualified
loans.
"(4) CONGRESSIONAL REVIEW. -- No standard prescribed under
this subsection shall take effect before the later of --
"(A) the end of a period consisting of 30 legislative days and
beginning on the date such standards are submitted to Congress;
or
"(B) the end of a period consisting of 90 calendar days and
beginning on such date.
"(d) OTHER RESPONSIBILITIES OF AND LIMITATIONS ON CERTIFIED
FACILITIES. -- As a condition for providing any guarantees under this
section for securities issued by a certified facility that represent
interests in, or obligations backed by, any pool of qualified loans, the
Corporation shall require such facility to agree to comply with the
following requirements:
"(1) LOAN DEFAULT RESOLUTION. -- The facility shall act in
accordance with the standards of a prudent institutional lender to
resolve loan defaults.
"(2) SUBROGATION OF UNITED STATES AND CORPORATION TO INTERESTS
OF FACILITY. -- The proceeds of any collateral, judgments,
settlements, or guarantees received by the facility with respect
to any loan in such pool, shall be applied, after payment of costs
of collection --
"(A) first, to reduce the amount of any principal outstanding
on any obligation of the Corporation that was purchased by the
Secretary of the Treasury under section 8.13 to the extent the
proceeds of such obligation were used to make guarantees in
connection with such securities; and
"(B) second, to reimburse the Corporation for any such
guarantee payments.
"(3) LOAN SERVICING. -- The originator of any loan in such
pool shall be permitted to retain the right to service the loan.
"(4) LOANS WITH RECOURSE TO ORIGINATOR PROHIBITED. -- Each
loan in the pool shall have been sold to the certified facility
without recourse to the originator of such loan (other than
recourse to any interest of such originator in a reserve
established in connection with such loan or any subordinated
participation interest of such originator in such loan).
"(5) COMPLIANCE WITH DIVERSIFIED POOL STANDARDS. -- The
facility shall comply with the standards adopted by the Board
under subsection (c) in establishing and maintaining the pool.
"(6) MINORITY PARTICIPATION IN PUBLIC OFFERINGS. -- The
facility shall take such steps as may be necessary to ensure that
minority owned or controlled investment banking firms,
underwriters, and bond counsels throughout the United States have
an opportunity to participate to a significant degree in any
public offering of securities.
"(7) NO DISCRIMINATION AGAINST STATES WITH BORROWERS RIGHTS.
-- The facility may not refuse to purchase qualified loans
originating in States that have established borrowers rights laws
either by statute or under the constitution of such States, except
that the facility may require discounts or charge fees reasonably
related to costs and expenses arising from such statutes or
constitutional provisions.
"(e) ADDITIONAL AUTHORITY OF THE BOARD. -- To ensure the liquidity
of securities for which guarantees have been provided under this
section, the Board shall adopt appropriate standards regarding --
"(1) the characteristics of any pool of qualified loan serving
as collateral for such securities;
"(2) registration requirements (if any) with respect to such
securities; and
"(3) transfer requirements.
"(f) AGGREGATE PRINCIPAL AMOUNTS OF QUALIFIED LOANS. --
"(1) INITIAL YEAR. -- During the first year after the
effective date of this title, the Corporation may not provide
guarantees for securities representing interests in, or
obligations backed by, qualified loans (other than loans which
back securities issued by Farm Credit System insitutions for which
the Corporation provides a guarantee) in an aggregate principal
amount in excess of 2 percent of the total agricultural real
estate debt outstanding at the close of the prior calendar year
(as published by the Board of Governors of the Federal Reserve
System), less all Farmers Home Administration agricultural real
estate debt.
"(2) SECOND YEAR. -- During the year following the year
referred to in paragraph (1), the Corporation may not provide
guarantees for securities representing interests in, or
obligations backed by, qualified loans (other than loans which
back securities issued by Farm Credit System institutions for
which the Corporation provides a guarantee) in an additional
principal amount in excess of 4 percent of the total agricultural
real estate debt outstanding at the close of the prior calendar
year, less all Farmers Home Administration agricultural real
estate debt.
"(3) THIRD YEAR. -- During the year following the year
referred to in paragraph (2), the Corporation may not provide
guarantees for securities representing interests in, or
obligations backed by, qualified loans (other than loans which
back securities issued by Farm Credit System institutions for
which the Corporation provides a guarantee) in an additional
principal amount in excess of 8 percent of the total agricultural
real estate debt outstanding at the close of the prior calendar
year, less all Farmers Home Administration agricultural real
estate debt.
"(4) SUBSEQUENT YEARS. -- In years subsequent to the year
referred to in paragraph (3), the Corporation may provide
guarantees without regard to the principal amount of the qualified
loans guaranteed.
PARTICIPATION INTERESTS OF CERTIFIED FACILITIES.
"(a) CASH CONTRIBUTIONS. --
"(1) CONTRIBUTIONS BY ORIGINATORS. -- For each pool of loans,
a certified facility and the participating originators may each
contribute a share of the minimum reserve required under section
8.6(b)(2).
"(2) COMPOSITION OF RESERVES. -- The reserves required under
this section, other than retained subordinated participation
interests, shall be held in the form of United States Treasury
securities or other securities issued, guaranteed, or insured by
an agency or instrumentality of the United States Government.
"(3) USE AND DISPOSITION OF ASSETS IN RESERVE. -- Subject to
the requirements of subsection (c), any certified facility that
establishes a reserve pursuant to this subsection shall be
required by the Corporation to maintain such reserve as a
segregated account consisting of the amounts contributed (but not
the earnings accruing on such amounts) to ensure the repayment of
principal of, and the payment of interest on, the securities
representing an interest in, or obligations backed by, the pool of
qualified loans with respect to which such reserve is established.
"(b) RETENTION OF SUBORDINATED PARTICIPATION INTERESTS. --
"(1) IN GENERAL. -- A certified facility may meet the
requirements of section 8.6(b)(2) with respect to any pool of
qualified loans by retaining a subordinated participation interest
in each loan included in each such pool in an amount not less than
the amount that is equal to 10 percent of the principal amount of
such loan.
"(2) RETENTION OF SUCH INTERESTS BY LOAN ORIGINATORS. -- Under
the terms of the sale of any qualified loan by the originator of
such loan to a certified facility, the originator of such loan may
agree to retain a subordinated participation interest in such loan
and the amount of the subordinated interest so retained by such
loan originator shall be attributed to the facility for purposes
of determining whether the requirements of paragraph (1) have been
met.
"(3) DISTRIBUTION RIGHTS OF HOLDERS OF SUBORDINATED INTERESTS.
-- The rights of the holders of the subordinated participation
interests to receive distributions with respect to the loans
constituting the pool shall be subordinated as prescribed by the
Corporation to enhance the likelihood of regular receipt by the
other holders of interests in such pool of the full amount of
scheduled payments of principal and interest on loans constituting
the pool.
"(c) ADDITIONAL REQUIREMENTS RELATING TO SECTION 8.6(b)(2) RESERVES.
--
"(1) DISTRIBUTION OF EARNINGS ACCRUING IN SECTION 8.6(b)(2)
RESERVES. -- In the case of each applicable loan pool, a
certified facility shall distribute to originators, at least
semiannually, any earnings on the contributions of the originators
to the reserve.
"(2) EXCEPTION FOR WITHDRAWALS THAT WOULD DECREASE RESERVE
LEVELS BELOW RESERVE REQUIREMENT. -- No withdrawal and
distribution authorized under paragraph (1) may be made to the
extent such withdrawal would cause the reserve to fall below the
amount required to be held in such reserve under section
8.6(b)(2).
"(3) SEPARATE LOAN LOSS ACCOUNTING. -- Any certified facility
that maintains a reserve (pursuant to section 8.6(b)(2)) to which
any originator has contributed shall maintain separate loan loss
accounting for each loan for which a contribution was made by such
originator to such reserve.
"(4) LOAN LOSS ATTRIBUTION RULE. -- Except for that portion of
losses absorbed by a contribution of a certified facility to the
reserve as provided in subsection (a)(1), each originator
participating in the pool shall absorb any losses on loans
originated up to the total amount the originator has contributed
to the reserve before the losses are absorbed by the contributions
of other originators who are participating in the pool.
"(d) AUTHORITY OF BOARD TO ESTABLISH OTHER POLICIES AND PROCEDURES.
-- The Board may establish such other policies and procedures with
respect to --
"(1) the establishment of reserves and the retention of
subordinated participation interests under this section; and
"(2) the manner in which such reserves or interests shall be
available to make payments of interest on, and repayments of
principal of, securities for which the Corporation has provided
guarantees, as the Board determines to be necessary or appropriate
to carry out the purposes of this title.
LOANS.
"(a) STANDARDS. -- Not later than 120 days after the appointment and
election of the Board, the Corporation, in consultation with
originators, shall establish uniform underwriting, security appraisal,
and repayment standards for qualified loans. In establishing standards
for qualified loans, the Corporation shall confine corporate operations,
so far as practicable, to mortgage loans that are deemed by the Board to
be of such quality so as to meet, substantially and generally, the
purchase standards imposed by private institutional mortgage investors.
"(b) MINIMUM CRITERIA. -- To further the purpose of this title to
provide a new source of long-term fixed rate financing to assist farmers
and ranchers to purchase agricultural real estate, the standards
established by the Board pursuant to subsection (a) shall, at a minimum
--
"(1) provide that no agricultural mortgage loan with a
loan-to-value ratio in excess of 80 percent may be treated as a
qualified loan;
"(2) require each borrower to demonstrate sufficient cash-flow
to adequately service the agricultural mortgage loan;
"(3) contain sufficient documentation standards;
"(4) contain adequate standards to protect the integrity of the
appraisal process with respect to any agriculutral mortgage loans;
"(5) contain adequate standards to ensure that the borrower is
or will be actively engaged in agricultural production, and
require the borrower to certify to the originator that the
borrower intends to continue agricultural production on the site
involved;
"(6) minimize speculation in agricultural real estate for
nonagricultural purposes; and
"(7) in establishing the value of agricultural real estate,
consider the purpose for which the real estate is taxed.
"(c) LOAN AMOUNT LIMITATION. --
"(1) IN GENERAL. -- A loan may not be treated as a qualified
loan if the principal amount of such loan exceeds $2,500,000,
adjusted for inflation, except as provided in paragraph (2).
"(2) ACREAGE EXCEPTION. -- Paragraph (1) shall not apply with
respect to any agricultural mortgage loan described in such
paragraph if such loan is secured by agricultural real estate
that, in the aggregate, comprises not more than 1,000 acres.
"(d) CONGRESSIONAL REVIEW. -- No standard prescribed under
subsection (a) shall take effect before the later of --
"(1) the end of a period consisting of 30 legislative days and
beginning on the date such standards are submitted to the
Congress; or
"(2) the end of a period consisting of 90 calendar days and
beginning on such date.
"(e) NONDISCRIMINATION REQUIREMENT. -- The standards established
under subsection (a) shall not discriminate against small originators or
small agricultural mortgage loans that are at least $50,000.