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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-550
======================================================================


 
      HOMEOWNERSHIP OPPORTUNITIES FOR NATIVE AMERICANS ACT OF 2004

                                _______
                                

 June 17, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Oxley, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4471]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 4471) to clarify the loan guarantee authority 
under title VI of the Native American Housing Assistance and 
Self-Determination Act of 1996, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Committee Votes..................................................     2
Committee Oversight Findings.....................................     3
Performance Goals and Objectives.................................     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     3
Federal Mandates Statement.......................................     4
Advisory Committee Statement.....................................     4
Constitutional Authority Statement...............................     4
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     5

                          Purpose and Summary

    H.R. 4471, the Homeownership Opportunities for Native 
Americans Act of 2004, will clarify the loan guarantee 
authority under title VI of the Native American Housing 
Assistance and Self-Determination Act of 1996.

                  Background and Need for Legislation

    Under title VI of NAHASDA (25 U.S.C. 4191 et seq.), HUD 
guarantees, with tribal approval, obligations issued by tribes 
or tribally-designated housing entities (TDHEs) to finance 
eligible affordable housing activities and community 
development activities related to affordable housing. The 
program requires issuers to pledge current and future Indian 
Housing Block Grant (IHBG) appropriations to the repayment of 
the guaranteed obligations.
    Under this program, HUD may not guarantee obligations 
exceeding $400 million for each of the Fiscal Years 1997-2007, 
with a cumulative cap of $2 billion for the eleven-year period. 
Once 50 percent of the authority has been committed in any 
year, HUD may then limit the amount of the guarantees any one 
tribe may receive in any fiscal year to $50 million, or request 
an increase in the statutory dollar limitations. HUD may enter 
into commitments to guarantee loans for any fiscal year only to 
the extent that funds have been appropriated.
    Title VI is modeled on HUD's Section 108 loan program under 
the Community Planning and Development program. Section 108 has 
a 100 percent loan guarantee authority included in the statute 
for the program. During the previous Administration, the Title 
VI program was operated at a 95 percent loan guarantee level. 
In fact, severalloans are currently pending based on the 95 
percent loan guarantee level. However, OMB asserts, by authority of OMB 
Circular A-129, that loan guarantees cannot exceed 80 percent in all 
cases where there is not explicit statutory authority to exceed that 
level. The statute for the Title VI program is silent regarding the 
loan guarantee level. H.R. 4471 will amend NAHASDA to provide explicit 
statutory authority for the Title VI program to continue to operate at 
a 95 percent loan guarantee level.

                                Hearings

    No hearings were held on the legislation.

                        Committee Consideration

    The Committee on Financial Services met on June 3, 2004 and 
ordered H.R. 4471 reported to the House, with a favorable 
recommendation, by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken with in conjunction with the 
consideration of this legislation. A motion by Mr. Oxley to 
report the bill to the House with a favorable recommendation 
was agreed to by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a hearing and made 
findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    The Secretary of Housing and Urban Development will utilize 
the authority granted in this legislation to guarantee loans 
under the Title VI program at 95 percent.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that this 
legislation would result in no new budget authority, 
entitlement authority, or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 14, 2004.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4471, the 
Homeownership Opportunities for Native Americans Act of 2004.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman.
            Sincerely,
                                         Elizabeth Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 4471--Homeownership Opportunities for Native Americans Act of 2004

    CBO estimates that implementing H.R. 4471 would increase 
the cost of loan guarantees made to Indian tribes and 
designated housing entities under title VI of the Native 
American Housing Assistance and Self-Determination Act of 1996 
by less than $500,000 annually, assuming the availability of 
appropriated funds. This loan guarantee program is a 
discretionary federal credit program that requires annual 
appropriation bills to establish a dollar limitation on the 
value of loans that may be guaranteed and to provide a credit 
subsidy appropriation for the cost of such guarantees. Enacting 
H.R. 4471 would have no impact on direct spending or revenues.
    H.R. 4471 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act, and 
would impose no costs on state or local governments. Enacting 
this bill would provide benefits to tribal governments.
    H.R. 4471 would require the Department of Housing and Urban 
Development (HUD) to provide insurance for 95 percent of the 
unpaid principal and interest on future loans. Currently, loans 
guaranteed under title VI of the 1996 act are insured by HUD 
for up to 80 percent of the loan value. By expanding the 
insurance coverage from 80 percent to 95 percent, CBO estimates 
that costs stemming from defaults would increase, resulting in 
the need for additional appropriated credit subsidy amounts 
each year.
    The administration estimates this program currently has a 
subsidy rate of 10.3 percent. For 2004 the loan volume is set 
at about $16.7 million, thus the subsidy cost of the program is 
nearly $2 million. CBO estimates that by expanding the 
insurance coverage from 80 percent to 95 percent, the amount 
the federal government would have to spend in the event of a 
default would increase and that the subsidy rate associated 
with the loan guarantee program would increase from 10.3 
percent to 12.3 percent each year.
    Assuming that the volume limitation for the program over 
the 2005-2009 period would remain at levels similar to the 2004 
level of $16.7 million, CBO estimates that the subsidy cost of 
the program would increase by less than $500,000 each year to 
cover the additional cost of the loan guarantees. It is 
possible that this change in insurance coverage could lead to 
an increase in the demand for loan guarantees, and that this 
increase may be reflected in future appropriation actions. If 
guarantees for a higher loan volume were authorized, the 
subsidy cost would also increase.
    The CBO contact for this estimate is Susanne S. Mehlman. 
The estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section establishes the short title of the bill, the 
``Homeownership Opportunities for Native Americans Act of 
2004.''

Section 2. Federal guarantees for financing for tribal housing 
        activities

    This section amends section 601 of the Native American 
Housing Assistance and Self-Determination Act of 1996 by adding 
a new subsection that provides explicit statutory authority for 
the Title VI program to continue to operate at a 95 percent 
loan guarantee level.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

    SECTION 601 OF THE NATIVE AMERICAN HOUSING ASSISTANCE AND SELF-
                       DETERMINATION ACT OF 1996


SEC. 601. AUTHORITY AND REQUIREMENTS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Limitation on Percentage.--A guarantee made under this 
title shall guarantee repayment of 95 percent of the unpaid 
principal and interest due on the notes or other obligations 
guaranteed.