APPROPRIATIONS UPDATE

House and Senate Conferees Complete Conference of FY 1999 VA-HUD-IA Appropriations Bill
With only three days remaining until the October 9 continuing resolution runs out, House and Senate conferees managed to agree on a HUD appropriations bill on October 2. The measure will reach the House floor for a vote today and is expected to go to the Senate tomorrow. It is expected to be forwarded to the President by October 8^th where he is expected to sign the bill. In order to appease the President, conferees provided $425.5 million to the President's prized AmeriCorps program (Corporation for National and Community Service), provided $283 million for incremental Section 8 vouchers for HUD's welfare-to-work voucher initiative, and deleted language that would have impeded the Kyoto global warming treaty. The following chart illustrates HUD's budget for FY 1999.

* $80 Million in Lead-based Paint funds are a separate program outside of CDBG, which is what the administration requested.

^ Brownfields is a separate program

& Office of Rural Housing and Economic Development is a new office at HUD designed to specifically target the housing and economic development of rural areas, particularly in the form of capacity building for rural non-profits.

HUD's programs fared well under the measure in terms of allocation levels, but set-asides continued to deplete the CDBG program. CDBG received an allocation of $4.75 billion for FY 1999, an increase of $55 million over the FY 1998 funding level. However, Congress continued to carve out set asides under the program totaling $525.05 million in FY 1999. The HOME Investment Partnerships Program received an increased of $100 million over its FY 1998 level, bringing the FY 1999 funding level for the program to $1.6 billion. Of this amount, $17.5 million will be set-aside for housing counseling activities. The conferees did not agree to the creation of a HOME Loan Guarantee Program, as originally proposed by HUD in its FY 1999 budget request.

Under the conference agreement, HUD's homeless assistance programs will receive $975 million in FY 1999, $152 million over FY 1998. The conference agreement requires that 30% of the homeless funding be used for permanent housing for the homeless. It also requires a 25% match for all services. It also allows up to 1% of the funds to be used for technical assistance.

The Housing Opportunities for Persons with AIDS program (HOPWA) will receive an allocation of $215 million in FY 1999, $11 million over the FY 1998 funding level. The Section 202 program (elderly housing) received $660 million and the Section 811 program (disabled housing) received $194 million. The measure provides $8.168 billion to fully fund expiring tenant-based and project-based Section 8 rental assistance in FY 1999. Modernization for public housing increased to $3 billion in FY 1999, $500 million over FY 1998. Severely distressed public housing (HOPE VI) received $625 million in FY 1999.

House and Senate authorizers and appropriators are putting the finishing touches on a public and assisted housing reform measure, which is expected to be attached to the VA-HUD appropriations bill. A more detailed outline of this legislation will be provided in the next issue of NCDA Washington Report.

EMPOWERMENT ZONE FUNDING DEPENDS THE PASSAGE OF A TAX -EXTENDER BILL

Senator Trent Lott (R-MS) Declares No Tax Cut Bill this Year
In an effort to enact tax reform legislation this year, the House passed a tax cut measure (HR 4579) on September 26. The plan would cut taxes by $80.1 billion over a five year period. The tax cuts are aimed primarily at married couples, farmers, and small business owners. The Senate is not expected to take up the measure before the congressional recess on October 9. Most Democrats have rallied against this tax cut proposal and the President has vowed to veto the bill if it makes it to his desk. The President and most congressional Democrats would like to see the budget surplus used to shore up Social Security. The Republican tax cut measure would take 10% of the budget surplus for its tax cut plan and use the remaining amount for Social Security reform.

Senator Daschle (D-SD) warned Republicans not to include the measure in an omnibus spending measure or continuing resolution or "...the President will veto the bill...and the Republicans will invite shutting down the government." Democrats in both the House and Senate are pushing their tax cut plan; a scaled down version of the Republican plan. The Democratic plan would provide $25 billion in tax cut relief. The plan would not be paid for out of the budget surplus, but would be offset by other spending cuts and by closing corporate tax loopholes.

Included in the House Republican tax cut plan is a provision to raise the private activity tax-exempt bond volume cap to the greater of $75 per capita or $225 million per state. There is no provision in the tax cut plan to increase the low income housing tax credit or Empowerment Zones.

If Senator Lott is correct and the Senate will not take up the Tax Cut Bill before adjournment, the "mini-bill" will be drafted, probably on Wednesday, October 7^th that would extend current tax credit programs. These would include welfare-to-work tax credits for businesses, extend the bond cap and it could include the low-income housing tax credit and the possibly the empowerment zone program. Even if the empowerment zone program is included in the extender bill, the Labor/HHS bill is stalled and is not likely to pass on its own merit. It will probably be included in an omnibus appropriations bill or be listed as a continuing resolution.

Some members of Congress are unlikely to include the empowerment zone funds of $1.7 billion over ten years, because the Administration (HUD) has not identified where the funds will come from, or provided for the necessary programmatic off-sets to so that this bill meets the conditions of spending caps agreed to in the Balanced Budget Agreement of 1996.

HUD NOTICES

The Community Development Block Grant Guide to National Objectives and Eligible Activities for Entitlement Communities is Available from HUD.
This is the updated version of the guide last printed in 1988. To get copies of the desk guide please contact HUD at 1-800-767-7468. By the end of next week, Community Connections will be able to send copies to grantees. They can be reached at 1-800-998-9999. At some point in the future, field offices will be able to distribute copies. The desk guide will be available on the internet, through HUD's website within the next week or so.

HUD Issues an Interim Rule on the Mark-to-Market Program.
On September 11, 1998, HUD issued an interim rule for its Mark-to-Market Program. The interim rule takes effect on October 13. A final rule will be released in December. The Mark-to-Market Program is designed to provide a long-term solution to reducing the amount of Section 8 rental subsidy currently provided to FHA-insured multifamily properties where rents exceed market levels. HUD estimates that over 800,000 housing units in approximately 8,500 multifamily projects have been financed with FHA-insured mortgages and supported by project-based Section 8 housing assistance payment contracts. Under the Mark-to-Market program, HUD will reduce project rents to no more than comparable market rents and restructure the HUD-insured or HUD-held mortgage so that the monthly payments on the first mortgage can be paid from reduced rent levels. A new Office of Multifamily Housing Assistance Restructuring (OMHAR) has been established within HUD to oversee the administration of the program.

HUD will Select Qualified Participating Administrative Entities (PAEs) to Restructure the Projects.
State housing finance agencies and local housing agencies will be given first priority to be selected as PAEs by HUD. The PAE will be given the flexibility to provide exceptions for up to 20% of the units for which the PAE is overseeing restructuring. These exception rents would be based on the costs of operating the project (budget-based rents) and could not exceed 120% of Fair Market Rent. State and local and bond financed properties, Section 202 properties, FmHA 515, and Section 8 SROs are all exempt from the Mark-to-Market program. Expiring contracts on these properties will be renewed at their existing rent levels.

HUD is also in the process of drafting a Program Manual which will provide more detailed guidance on the program. Comments on the interim rule are due to HUD by October 26. NCDA is working with NAHRO, the National League of Cities, the National Housing Conference, the National Low-Income Housing Coalition, and several other groups to provide comments to HUD on the interim rule.

NCDA STAFF AND MEMBERS PARTICIPATE IN IDIS WORKING GROUP MEETING AT HUD

On Monday, September 28^th NCDA staff participated in the IDIS Working Group which was specifically designed to provide HUD and its IDIS support contractors with grantee concerns on the workings of IDIS. This group provides HUD will anecdotal information on how IDIS works or does not work.

HUD takes this information and prioritizes it and tells the grantees what can and cannot be fixed or implemented into the system. Most grantees know that there are several reports that HUD requires that are not working and many probably will never work. HUD has indicated that it will put as much available energy (staff time) and contract dollars to address those items that are impeding basic functions of the system. Grantees should be able to draw down funds and input accomplishments. The IDIS technical support team is understaffed and may never be fully staffed. There may be additional funding in the FY 1999 budget to enable the hiring of more staff.

This meeting also highlighted how field offices interpret headquarters' memoranda. It was blatently obvious that some field offices are allowing user friendly GPRs and others are insisting on the "letter of the law" even though the required reports are not functioning properly and printing out inaccurate data.

HUD has asked grantees and the Washington representatives to meet again in to help them try to figure out exactly what kinds of data are important to the grantees and what HUD absolutely needs to satisfy its statutory requirements.

NCDA staff will participate in this meeting and would appreciate any input on this question from the membership. NCDA staff will work with the Committees to come up with information for HUD.

NCDA NOTES

ANNOUNCING THE NCDA 1999 AUDREY NELSON COMMUNITY DEVELOPMENT ACHIEVEMENT AWARDS

On August 22, 1999, the nation will celebrate the 25^th anniversary of the authorization of the Community Development Block Grant Program. Over the past thirteen years NCDA has recognized the efforts of community development practitioners by presenting the "Audrey Nelson Community Development Achievement Awards" to communities who exemplify outstanding uses of CDBG funds.

Any NCDA member may nominate qualified programs by submitting the enclosed application. These awards will be presented on January 28, 1999, during NCDA's 1999 Winter Meeting in Washington, D.C.

The deadline for applications is November 23, 1998. All applications and questions pertaining to this award should be directed to Michael Lightfield with a postmark of November 23, 1998. (PLEASE NOTE: Due to the overwhelming number of applications that mut be reviewed, NCDA requests that no videos be submitted with applications).

NCDA REGIONAL CONFERENCES

Region 1 Fall Meeting
October 28-30, 1998
Burlington, VT
Contact: Nancy Remington 401-435-7535
E. Providence, RI

Region 9 Fall Meeting
December 3-4, 1998
San Francisco, CA
Contact: Steve Young 209-577-5247
Modesto, CA

NCDA Winter Meeting

The NCDA Winter Meeting will be held on January 27-30, 1999 at the J.W. Mariott Hotel in Washington, DC. At the request of members, we will not schedule the program committees (CD,ED, and Housing) concurrently. We have included one-half day for committee meetings beginning at 12:00 p.m. and ending the Board of Directors meeting on Wednesday, January 27, 1999.

NCDA TECHNOLOGY NEWS

NCDAonline UPDATE!!!

If you did not log on with your temporary password and user ID, or send in your commitment to pay dues before June 30, 1998, you will not be able to access the Members Only section of the website. If this is the case for you, simply e-mail Chandra Western at chandra@ncdaonline.org. She will provide you with the information necessary to get into the Members Only section as well as personalize your password and user ID.  As we continue to improve the system, NCDAonline will provide more services and links to other sites and allow members to communicate more effectively with each other and NCDA staff. Our investigation into how we can provide members with membership dues discounts if they use the NCDAonline to receive NCDA mailings and publications, indicates that only about 25-30 percent of NCDA members are taking advantage of the website. At this time, it is not cost effective for us to provide those members with a discount if they use NCDAonline exclusively to receive mailings and other publications. As more members get online, we will address this issue then.  The Board of Directors have approved several modifications of the website to make the entire system more user friendly. The technology committee will assist NCDA staff with modifications suggestions and scheduling. We will also look to discontinue the PAL system. To maintain the PAL and chat rooms and the member e-mail list is redundant. We will keep you informed of our progress.

POSTING JOB ANNOUNCEMENTS

NCDA staff is ever willing to include position vacancies of member communities in the NCDA Washington Report. To better assist members as well as staff, we ask member communities to e-mail position vacancies to Carla Sauls, carla@ncdaonline.org, whenever possible. If you are not set up for e-mail, please fax them to Carla. An electronic copy makes it easier to post the position on NCDAonline.

FEDERAL REGISTER NOTICES

September 24, 1998. Section 8 Housing Assistance Payments Program -- Contract Rent Annual Adjustment Factors, Fiscal Year 1999. The United States Housing Act of 1937 requires that assistance contracts signed by the owners participating in the Department's Section 8 housing assistance payments program provide for annual adjustment in the monthly rentals for units covered by the contract. This notice announces revised Annual Adjustment Factors for adjustment of contract rents on assistance contract anniversaries from October 1, 1998. The factors are based on a formula using data on residential rent and utilities cost changes from the most current Bureau of Labor Statistics Consumer Price Index (CPI) survey and from HUD Random Digit Dialing rent change surveys.

October 2, 1998. Deadlines Limiting the Availability of Community Development Block Grant and Certain Other Program Funds for Obligation and Expenditure. This notice advises grantees on the effect of the appropriation accounting provisions in 31 U.S.C. 1551-1557, as added by the National Defense Authorization Act for Fiscal Year 1991, on Community Development Block Grant funds, including all programs funded under that account and related accounts. These statutory provisions control the availability of certain appropriations for expenditure.

October 2, 1998. Empowerment Zones: Rule for Second Round Designations. This rule adopts as final the interim rule published on this subject on April 16, 1998, without substantive change. The only change to the final rule is to include the OMB approval number for the rule's information collection requirements. The August 16, 1998 interim rule increased the scope of HUD's Empowerment Zones Program by providing authorization for the designation of 15 new urban zones.

Job Opportunities 

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