Congress officially adjourned last night and finalized the remaining spending bills. Compromise was the key to the less than speedy adjournment. To get the final three bills passed, members compromised on several key issues. The most pertinent of these issues for NCDA's members in the remaining appropriations bills was the provision in the Commerce/Justice/State bill (H.R. 2276) to allow sampling to augment the head count of the 2000 census. Many Republican members of Congress are opposed to sampling as they fear it will add more people to Congressional districts that might vote democratic. The sampling method was proposed because the Census Department was highly criticized for undercounting minorities during the 1990 census. Conferees compromised and added language to allow the Census Bureau to move forward with trial runs on sampling to augment the Census. It is expected that a Republican challenge to the constitutionality of this method would get put on a fast track to the Supreme Court. The compromise allows funds used for sampling to be spent until a final decision is received. What this really does is delay the issue until next year, and allow the Census Bureau to do it's job until the Supreme Court makes a decision.

HUD APPROPRIATIONS BILL WRAP-UP: PRESIDENT VETOES TWO PROJECTS UNDER THE CDBG LINE UNDER THE EDI SET-ASIDE

On Monday, October 27, the VA/HUD FY98 Appropriations Bill was signed by President Clinton exactly as the Conferees adopted what became Public Law 105-65. On Saturday November 1, the President vetoed two projects within the EDI set-aside. The projects vetoed were the Carter County Chamber of Commerce Trade and Development project in Carter County, Montana and the Multi-departmental Police Training Facility in Arab, Alabama. As we understand it, under the line-item veto, any veto of projects or programs reduces the account from which they originate and the funds go back to the U.S. Treasury. The President's veto of two projects totaling $1,015,000, effectively reduces the total CDBG allocation to $4,673,985,000. There were five other set-asides or programs vetoed in this bill also. These came from the Veterans Administration and the Environmental Protection Agency. Congress has 30 days from veto to contest the action. From all reports, it has been determined that they will not contest these vetoes.

Recap of CDBG Allocation
Funding for the Community Development Block Grant, (CDBG) is set at $4.673985 billion. The level of set asides within the CDBG program is no at $498.785 million, up from $289.6 billion in FY 1997. These set asides represent a 72 percent increase from FY 1997 levels. In the October 31 issue of the NCDA Washington Report we reported that this year's CDBG program, with the $499.8 million (now with the President's veto, $498.785) represents an approximate 11 percent cut to the $4.675 billion program (now at $4.673985). To clarify this it would have been better to say that with almost $500 million taken from the a $4.675 billion program, is approximately an 11 percent reduction from that appropriated. From FY 1997 to FY 1998, the actual amount lost to grantees is approximately 3 percent. Please refer to the list of projects funded from the $138 million EDI set-aside. Perhaps your community is included on that list. Also see the final chart on HUD's FY 1998 appropriations.

With the Presidential veto, HUD staff in the data systems division has indicated that with the Presidential veto, grantee allocations may take longer that originally planned. NCDA staff has been advised that grantees can expect to receive their allocation figures by Thanksgiving.

SECTION 8 PORTFOLIO REFORM -- PROVISIONS THAT WILL HAVE A REAL IMPACT ON YOUR COMMUNITY

As reported in the October 31, 1997 NCDA Washington Report, the FY98 VA/HUD appropriations measure (PL 105-65) includes long-awaited Section 8 portfolio reform. The reform increased funding for Section 8 renewals by $4.6 billion to enable HUD to renew all expiring contracts and keep people in their homes -- at least for another year. About 1.8 million contracts for affordable apartments housing 4.4 million people were set to expire this fiscal year.

The renewal commitment will be for one year at a time and the program that will bring rents to market levels will not begin until late 1998. As such, HUD will face another budget crunch when it attempts to fund public housing developments, particularly those with rents exceeding market rates. Consequently, communities remain uncertain in regards to the viability of their public housing developments.

Some aspects of the reform that will most impact NCDA members and their communities:

• All expiring Section 8 units will be renewed. 
  
  
• The renewal commitment will only be for one year at a time. Further, by the year 2002, the annual renewal cost of all Section 8 units will be $20 billion -- the largest portion of the HUD budget by far.
  
  
• The mark-to-market program will not start until FY99. In the meantime, all contracts with rents under 120 percent of fair market rent (FMR) can be renewed for one year under their current terms and conditions. All others will be subject to the terms of the current Portfolio Re-engineering Demonstration. Owners can choose not to renew, in which case their tenants would receive vouchers. 
  
  
• HUD will delegate administrative authority to operate the mark-to-market program to other designees, which will almost always be housing finance or other public entities. These designees will be regulated by a new Office of Multifamily Housing Assistance Restructuring (OMHAR) at HUD. 
  
  
• Participating owners will be required to accept long-term affordability restrictions, including agreeing to accept subsequent Section 8 renewals, non-discrimination against voucher holders and continuing restrictions in the absence of Section 8 assistance.

HOMELESSNESS CONSOLIDATION BILL MARK-UP COMPLETED

On November 5, the House Banking and Financial Services Committee passed H.R. 217, the Homeless Housing Programs Consolidation and Flexibility Act by a vote of 35-5. The measure would consolidate seven homeless programs established by the McKinney Act into two funds: a competitive-based Permanent Housing Fund Grant and a formula-based Flexible Block Grant.

Although the measure passed by a wide margin, several amendments were attached before the committee gave its final approval. The amendments revise the original measure in the following ways:

• Changes the 25 percent earmark for the Permanent Housing Fund Grant to 30 percent after the first year of enactment.
  
  
• Instructs HUD to submit to Congress proposed alternatives to the current allocation of flexible block grant homeless assistance between metropolitan cities, urban counties and states. 
  
  
• Raises the cap for spending on supportive services from 30 percent to 35 percent of a grantee's allocation. 
  
  
• Allows up to 35 percent of the Permanent Housing Fund Grant to be used for Section 8 housing. 
  
  
• Eliminates the 15 percent cap on spending for emergency shelters. 
  
  
• Directs HUD to conduct an inventory of federal facilities suitable for emergency shelters for homeless persons and requires consultation on possible use of National Guard facilities for the homeless. 
  
  
• The funding level for homeless housing programs remained at $1 billion, as attempts to both increase it to $1.6 billion and decrease it to $850 million failed.

PUBLIC HOUSING REFORM UPDATE 

Public Housing reform legislation appeared to be on a fast track, however this is no longer the case. During the final days of the first session of the 105^th Congress, Representative Lazio (R-NY) and Senator Mack (R-FL), found themselves at odds over issues in the so-called "extender bill" related to authorization language in the National Rural Housing Program and the National Flood Insurance Program. It was not completed most likely due to amendments proposed by the Senate. It is commonly believed that the two Congressmen are back to ground zero on getting to the point of conference on this bill. It is felt that nothing will be accomplished until late in the winter or early spring.

HUD AWARDS $217.3 MILLION IN DRUG ELIMINATION GRANTS 

On November 10, Vice President Gore announced that $217.3 million in Drug Elimination Grants were awarded to 686 public housing authorities, Indian housing authorities and privately-owned low-income housing developments that receive HUD assistance.

The competitively-awarded grants are used to fight crime and drug abuse by funding drug intervention and treatment programs, physical improvements, job training initiatives and stepped up security.

For a complete list of the recipients, call NCDA at 202.293.7587.

RAMIREZ CONFIRMED AS HUD ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT 

Saul Ramirez, former mayor of Laredo, Texas was officially confirmed to assume the position of Assistant Secretary of HUD's Community Planning and Development Division. Mr. Ramirez will be over programs such as CDBG, HOME, McKinney Homelessness Programs, HOPWA and a whole host of other housing and community development programs. NCDA congratulates Mr. Ramirez.

COMMUNITY 2020 SOFTWARE (FORMERLY KNOWN AS CPS+) UPDATE

Please call 1-800-998-9999 (Community Connections) for registration and site information.

Reminder:

• The NCDA Washington Report is now available on the internet! Just point your browser to http://www.ncdaonline.org

• NCDA's new e-mail address is ncda@ncdaonline.org -- DO WE HAVE YOURS?

Announcement of Funding Awards: Community Development Block Grant Program for Indian Tribes and Alaska Native Villages Fiscal 1997. November 7, 1997 [Docket No. FR-4180-N-03], page 60251. Please refer the this issue of the Federal Register for the complete list of projects.

Announcement of Funding Awards for the Historically Black Colleges and Universities Program, Fiscal 1997. November 12, 1997. [Docket N. FR-4213-N-04] This funding announcement addresses the NOFA that appeared in the Federal Register on May 12, 1997. For a complete listing of awardees, please consult page 60726 of the register or NCDA staff.

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