APPROPRIATIONS UPDATE

Starr Report Causes Virtual Halt to Appropriations Process

The Starr report, submitted to Congress last week, has left Congress at a virtual standstill. With only 15 working days left until Congress recesses on October 9, no one expects all of the FY 1999 Appropriations bills to be passed this before the fiscal year ends on September 30, 1998. Yesterday, September 17, Congress approved a Continuing Resolution to keep federal agencies operating until October 9, 1998. Absolutely the last thing Congress wants in an election year is to repeat the FY 1995-96 scenario that closed federal agencies and impeded the start of the new fiscal year. The Continuing Resolution will ensure that agencies remain operational until the 12 remaining appropriations bills are complete.

HUD Conferees Expected to Meet on FY 1999 Appropriations Bill (H.R. 4914/S. 1268)

At this point, the VA-HUD Appropriations Conference Committee is expected to meet the week of September 21 to iron out the differences in the House and Senate versions of the FY 1999 VA-HUD Appropriations bill. We are hopeful that this bill will get passed and forwarded to the President before the official October 9 congressional recess. If not, the HUD FY 1999 Appropriations bill will be folded into a Continuing Resolution, along with other appropriations measures that have not been enacted. Funding for programs will remain at FY 1998 levels. Congressional insiders also expect numerous authorizing legislative riders to be added to the Continuing Resolution that moves through Congress. In essence, this will be the one bill that will be laden with everything -- a massive measure that Congress hopes President Clinton will sign.

It was thought that HUD's bill along with Treasury/Postal, Military Construction and Transportation would be conferenced and passed without having them become part of the Continuing Resolution that will be needed to maintain the running of the federal government until after Congress returns in January. But with a push to perhaps separate HR 2 from the HUD appropriations bill and other contentious issues that hold a veto threat -- the Kyoto Treaty and reduced funding for AmeriCorps, it is anyone's guess if Congress will be able to pull off a miracle and pass an FY 1999 HUD/VA spending bill before October 9, 1998.

Will public and assisted housing reform be completed?

Congress is still working through final compromise on a bill. A second draft bill is in its final stages. Both the House and Senate are hopeful that a final public and assisted housing reform measure will be passed this year. We will keep you informed of any updates as they occur.

Both the House and Senate version of the HUD appropriations bill increases funding for CDBG, HOME, and homeless assistance. The House proposes increasing CDBG funding to $4.75 billion, while the Senate recommends an increase to $4.675 billion. The House proposes increasing the HOME program to $1.6 billion, while the Senate proposes a funding level of $1.55 billion. HUD's homeless assistance programs would see an increase. The House proposes an increase from $823 million to $975 million. The Senate would increase the programs to $1 billion. Set-asides within the CDBG program are reduced to $351.8 million in the House and $378.8 million in the Senate. The Senate version includes a requirement that 20 percent of HUD's homeless assistance funds be spent for permanent housing for the homeless. The House version does not include such a provision.

The following chart on HUD's budget represents the passage of by the House and the Senate of HR 4194 and S 2168.

* $80 Million in Lead-based Paint funds are not listed as a CDBG set-aside in the House report. It appears that the House wants these funds to be a separate program outside of CDBG, which is what the administration requested. The Senate specifically identified them as a set-aside of $70 million within CDBG.

^ Brownfields is a set-aside in CDBG in the House. The Senate funded Brownfields as a separate program outside of CDBG as the administration requested.

# Self-help Housing is a program that requires authorization language before it can be considered a set-aside in CDBG.

A Noteworthy Amendment to HUD's Bills: Prohibition on Use of Assistance for Employment Relocation Activities

Over the past eight months NCDA has been reporting on an issue that is specifically related to the CDBG program, particularly its economic development component -- anti-pirating. Anti-pirating relates to the relocation of a commercial or industrial business from one area (city, town, state) to another whereby the result of this relocation causes a significant increase in the unemployment levels in the former location. The act of using federal funds, specifically CDBG funds as the enticement for this relocation is the crux of this issue. Each of the past four fiscal years members of the House of Representatives have supported including an amendment to HUD's appropriations bill to prohibit this use of CDBG funds to be used as incentives for "luring" businesses from one locale to another. There has not been companion language in any of the Senate bills. This year (FY 1999) both appropriations bills contain an anti-pirating amendment.

The probability of this language being removed during conference is remote. NCDA and NAHRO submitted alternate language to the Senate version that would make the implementation of this amendment more palatable. The following is the NCDA/NAHRO language.

Section 412. Prohibition on Use of Assistance for Employment Relocation Activities Section 105 of the Housing and Community Development Act of 1974 (42 U.S.C. 5305) is amended by adding at the following:

(h) Prohibition on use of assistance for employment relocation activities-- Notwithstanding any other provision of law, no amount from a grant under section 106 made in fiscal year 1999 or any succeeding fiscal year may be used for the purpose of directly soliciting or inducing relocation of any industrial or commercial plant, facility, or operation, within one year of expenditure of funds from one area to another area, if the relocation will directly result in an increase in the unemployment rate in the labor market area from which the relocation occurs.

HUD feels that this amendment would be difficult to enforce, as they would have to prove the community directly solicited the relocation and that CDBG funds were used as an enticement for the relocation. We are hopeful that Senate staff will use our language and that the House will agree with it, otherwise this amendment could severely cripple many cities' economic development activities.

EMPOWERMENT ZONE FUNDING DEPENDS THE PASSAGE OF A TAX BILL

As Congress get closer to adjournment, the likelihood of a Continuing Resolution (CR)for the Labor/HHS bill becomes more of a reality. If this bill does not get passed before Congress adjourns, a CR will ensure that federal agencies will continue to operate existing programs -- perhaps with some modifications -- until both houses can agree on a bill. This action effectively delays funding ($1.7 billion over a ten-year period) for the yet to be designated empowerment zones. With only 15 working days left until adjournment, the likelihood of the empowerment zone tax incentives added to a small tax bill could prove improbable, but not impossible. It is an election year and things have been know to fall into place at the last minute.

Another interesting item on the Empowerment Zone saga is the deadline for applications, October 9, 1998. HUD has said that this deadline will not be pushed back. It is assumed that at some point during the upcoming year Congress will pass the Labor/HHS bill, if not before adjournment. The grant funding for the EZ program is contained in that bill. The authorizing language that set forth the 20 new EZs requires that the new zones be designated by January 1, 1999. Even if there is no grant funding, the zones will be designated. All this means nothing if the new EZ program is not attached to a tax bill. There will be no EZs if they are not included in a tax bill.

The following is a list of the most frequently asked questions about Empowerment Zones and what it will take to get them funded.

Q: What is the purpose of EZ funding legislation?

A: The purpose of EZ funding legislation is to provide grant funding for the 20 new Empowerment Zones (15 urban 5 rural) that will be designated by January 1, 1999. Although the Taxpayer Relief Act of 1997 authorized the designation of the 20 new Zones and provided tax incentives, no grant funds were included. This legislation provides for $1.7 billion for grant funding.

Q: Why is funding being sought through the Department of Health and Human Services' Social Services Block Grant (SSBG) and not through HUD and USDA appropriations?

A: The current 105 Empowerment Zones and Enterprise Communities receive their grants from EZ/EC SSBG funds. A decision was made to fund 20 new Zones through the same vehicle -- SSBG -- to keep Round II program consistent with Round I.

Q: Won't the issue of SSBG funds for EZ grants mean a decreased funding level for the other SSBG funded programs?

A: Absolutely not. Both HUD and USDA provided offsets within their 1999 FY budgets to get the Office of Management and Budget to make the $ 1.7 billion available. The EZ/EC SSBG funds are separate from the regular Title XX SSBG funds. If the $1.7 billion requested is not authorized for EZ grants, the money WILL NOT be available for other SSBG programs.

Q: Why are grant funds needed for the EZ's? Aren't the tax incentives enough?

A: The EZ/EC Incentive is a comprehensive, holistic revitalization strategy. The tax incentives are important in business attraction, retention and expansion efforts, but do not allow communities to address other key issues that impact community revitalization and are linked to a successful business development strategy. The flexible grant funds are vital to enable communities the ability to address these issues, including: education; job training; child care; transportation; welfare-to-work strategies; public safety; housing; brownfields redevelopment; support services for children, youth, families and seniors; add capitol for business development. The grant funds are also critical in helping communities to leverage privet investment.

Q: There are a number of bills that have been introduced. Which bills does the Administration support?

A: In the Senate, S-1927, introduced by Senator Moseley-Braun, and S-2418, introduced by Senators Jeffords and Leahy. In the House, HR-3622, introduced by Representative Rangel.

Q: What communities have jurisdiction over this legislation?

A: Senate Finance and House Ways and Means.

GAO LISTS FACTORS FOR EZ/EC SUCCESS

Appearing before the House Small Business Committee on August 19, the U.S. General Accounting Office outlined results from a 1996 survey to 32 federal, state and local officials involved in planning and implementing the EZ/EC program. The survey found two primary factors for EZ/EC success: (1) community representation on the local governing board, and (2) maintaining open communication among all parties involved in the development of the EZ/EC. In addition, support from elected officials -- mainly the Mayor -- and from Federal agencies was important. Elements that led to difficulty in implementing the program included: (1) problems in developing a governing board; (2) the state level adding a second level of bureaucracy; (3) lack of federal funding for initial administrative activities; and (4) pressure for quick results.

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.

NCDA MEMBERS CALL FOR A NATIONAL FORUM ON IDIS PROBLEMS

Because of the delays in receiving grant agreements and funding amounts entered into IDIS, as well as the fundamental problems of working within IDIS, some of NCDA's members have called for a national forum with HUD Headquarters staff to address these problems. NCDA has discussed this idea with HUD, however there seem to be schedule conflicts. HUD system management staff are fully aware of the problems, however with a reduced staff who are trained with the IDIS software, it is believed that HUD would like more time to fix the problems. We hope to work with other practitioner groups to encourage HUD to meet with us at our Winter Meeting in January.

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 would 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). All questions pertaining to this award program should be directed to Karen Means.

Regional Conferences

Region 6 Fall Meeting October 6-9, 1998 Beaumont, TX
Contact: Johnny Beatty 409-880-3786 Beaumont, TX

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

Region 9 Fall Meeting December 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 a full day for committee meetings and the Board of Directors meeting on Wednesday, January 27, 1999. Space will be limited at the hotel, so please register early if you plan to arrive on Tuesday, January 26, 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

August 24. Lead-Based Hazard Control in Privately Owned Housing Announcement of Funding Awards. This announcement notifies the public of funding decisions made by the Department in a competition for funding under the NOFA for Lead-Based Paint Hazard Control in Privately Owned Housing. This announcement contains the names and addresses of the award recipients and the amounts of awards.

September 2. Lead; Fees for Accreditation of Training Programs and Certification of Lead-Based Paint Activities Contractors. EPA is issuing this final rule to establish fees for the accreditation of training programs and certification of contractors engaged in lead-based paint activities pursuant to section 402(a)(3) of the Toxic Substances Control Act.

September 10. Section 8 Rental Voucher and Certificate Programs and Establishment Section 8 Management Assessment Program (SEMAP). This rule establishes the Section 8 Management Assessment Program (SEMAP) to objectively measure public housing agency performance in key Section 8 tenant-based assistance program areas. SEMAP enables HUD to ensure program integrity and accountability by identifying public housing agency management capabilities and deficiencies and by improving risk assessment to effectively target monitoring and program assistance. Public housing agencies can use the SEMAP performance analysis to assess their own program operations.

September 11. Multifamily Housing Mortgage and Housing Assistance Restructuring Program (Mark-to-Market) and Renewal of Expiring Section 8 Project-Based Assistance Contracts. This rule implements recently-enacted legislation that created a Mark-to-Market Program through which Section 8 rents for multifamily projects with HUD-insured or HUD-held mortgages will be reduced. The purpose of the program is to preserve low-income rental housing affordability while reducing the long-term costs of Federal rental assistance and risk to HUD's FHA insurance funds. The Mark-to-Market Program will be implemented through Mortgage Restructuring and Rental Assistance Sufficiency Plans to be developed for individual projects by "Participating Administrative Entities" selected by HUD. The interim rule also implements legislation for renewal of Section 8 project-based assistance contracts for projects outside of the Mark-to-Market Program. Comments are due to HUD on or before October 26. Comments can be submitted directly to HUD through the internet at http://www.hud.gov/ogc/regcom2.html. If you plan to submit comments to HUD on this interim regulation, please also send your comments to Vicki Watson at NCDA. NCDA would like to send a letter to HUD encompassing all of its members' comments on this regulation. Please forward your comments to Vicki on or before October 21.

Job Opportunities 

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