[House Report 109-697]
[From the U.S. Government Publishing Office]
109th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 109-697
======================================================================
HAWAIIAN HOMEOWNERSHIP OPPORTUNITY ACT OF 2006
_______
September 28, 2006.--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. 5851]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 5851) to reauthorize the programs of the Department
of Housing and Urban Development for housing assistance for
Native Hawaiians, 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......................................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
Performance Goals and Objectives................................. 3
New Budget Authority, Entitlement Authority, and Tax Expenditures 3
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 6
Advisory Committee Statement..................................... 6
Constitutional Authority Statement............................... 6
Applicability to Legislative Branch.............................. 6
Compliance With House Resolution 1000............................ 7
Section-by-Section Analysis of the Legislation................... 7
Changes in Existing Law Made by the Bill, as Reported............ 7
Purpose and Summary
H.R. 5851, the Hawaiian Homeownership Opportunity Act of
2006, reauthorizes Title VIII of the Native American Housing
Assistance and Self-Determination Act (NAHASDA), a program
administered by the Department of Hawaiian Home Lands (DHHL)
that provides low-income native Hawaiian families the
opportunity for homeownership on Hawaiian home lands.
Background and Need for Legislation
The Native American Housing Assistance and Self-
Determination Act of 1996 reorganized the system of housing
assistance provided to Native Americans through the U.S.
Department of Housing and Urban Development (HUD) by
eliminating several separate programs of assistance and
replacing them with the Indian Housing Block Grant. In 2000,
NAHASDA was amended to include Title VIII so that DHHL can
directly receive this block grant funding, which it uses for
improving lands in order to facilitate Hawaiian homeownership.
The Hawaiian Home Commission Act (HHCA) was enacted by
Congress in 1920 to assist the race of Native Hawaiian people
by providing government land to re-establish Native Hawaiian
communities. In order to qualify for a lease on the
approximately 200,000 acres of Hawaiian home lands set aside by
Congress, eligible applicants must have at least 50 percent
quantum of Native Hawaiian blood. The HHCA operated under
federal authority until Hawaii became a state in 1959. As a
condition of statehood, responsibility for the administration
of the Hawaiian Homes Commission Act was transferred to the
state of Hawaii. DHHL was established as the executive agency
to administer the Hawaiian Home Lands program in order to
develop affordable housing opportunities for native Hawaiian
families. This program targets assistance to families at or
below 80 percent of median income. In conjunction with loan
programs such as the Federal Housing Administration's (FHA)
section 247 program and HUD's section 184(a) program, Title
VIII is successful in assisting low-income Hawaiian families
with their housing needs.
Title VIII of NAHASDA was originally authorized for five
years, through 2005, and has not been formally reauthorized
since, although appropriations acts have continued to provide
de facto one-year reauthorizations for the program.
This legislation would reauthorize Title VIII of NAHASDA
through FY 2011. In addition, it would make two substantive
changes to current law. First, H.R. 5851 would allow the use of
HUD's section 184(a) guaranteed loans for refinancing in
addition to construction. Giving Native Hawaiians access to
Section 184(a) refinancing would continue to provide families
homeownership opportunities. Although relatively new, this
program has already proven effective with Native American
tribes living on trust or restricted lands. This change would
assist native Hawaiians who already own a home and those who
would like to refinance to reduce interest rates or use equity
for improvements to start up businesses.
Further, this bill would allow DHHL to become eligible for
loan guarantees authorized under Title VI of NAHASDA. This
program, modeled on the successful Community Development Block
Grant program (CDBG), would allow DHHL to borrow or issue
bonded debt with the security of the Federal Government, using
the funding stream provided by HUD as collateral. The use of
Title VI funding for continental Native Americans has expanded
greatly, and this change will provide a separate credit subsidy
pool for DHHL, in order to avoid any competition for these
resources. This program would allow native Hawaiians that want
to finance eligible activities but are unable to secure
financing without the assistance of the Federal guarantee.
The Committee understands that providing for greater access
to capital markets on Native Hawaiian Home Lands should not
come at the expense of capital access for Federally-Recognized
Indian Tribes. Therefore, the Committee expects, at the
discretion of the Appropriations Committee, that a separate
credit subsidy for Title VI of NAHASDA shall be established and
funded as necessary so as to provide a distinct credit subsidy
for eligible recipients of NAHASDA under Title VIII.
Hearings
No hearings were held on this legislation.
Committee Consideration
The Committee on Financial Services met in open session on
July 26, 2006, and ordered H.R. 5851, Hawaiian Homeownership
Opportunity Act of 2006, favorably reported to the House 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 within 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 hearings 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:
H.R. 5851, the Hawaiian Homeownership Opportunity Act of
2006, reauthorizes Title VIII of the Native American Housing
Assistance and Self-Determination Act (NAHASDA) with the goal
to provide low-income native Hawaiian families the opportunity
for homeownership on Hawaiian home lands.
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 adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act.
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, August 29, 2006.
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. 5851, the Hawaiian
Homeownership Opportunity Act of 2006.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Chad Chirico.
Sincerely,
Robert P. Murphy,
(for Donald B. Marron, Acting Director).
Enclosure.
H.R. 5851--Hawaiian Homeownership Opportunity Act of 2006
Summary: H.R. 5851 would reauthorize the Native Hawaiian
Housing Block Grant and Loan Guarantee programs and would
authorize the appropriation of such sums as necessary for those
programs for each of the fiscal years 2007 through 2011. In
addition, the bill would reauthorize loans provided under Title
VI of the Native American Housing Assistance and Self-
Determination Act of 1996 for fiscal years 2008 through 2011
and would expand eligibility to include the Department of
Hawaiian Home Lands (DHHL).
CBO estimates that appropriation of the amounts necessary
to implement H.R. 5851 would cost $26 million over the 2007-
2011 period. Enacting H.R. 5851 would not affect direct
spending or revenues.
H.R. 5851 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would provide benefits to the state of Hawaii.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 5851 is shown in the following table.
The costs of this legislation fall within budget functions 600
(income security) and 370 (commerce and housing credit).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------
2006 2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for Hawaiian Housing Programs
Budget Authority/Authorization Level 1...................... 12 2 0 0 0 0
Estimated Outlays........................................... 4 4 2 2 2 1
Proposed Changes:
Native Hawaiian Housing Block Grants
Estimated Authorization Level........................... 0 9 9 9 10 10
Estimated Outlays....................................... 0 * 1 2 4 6
Native Hawaiian Loan Guarantees
Estimated Authorization Level........................... 0 1 1 1 1 1
Estimated Outlays....................................... 0 1 1 1 1 1
Title VI Loan Guarantees
Estimated Authorization Level........................... 0 * 2 2 2 2
Estimated Outlays....................................... 0 * 2 2 2 2
Total
Estimated Authorization Level....................... 0 10 12 12 13 13
Estimated Outlays................................... 0 1 4 5 7 9
Spending Under H.R. 5851 for Hawaiian Housing Programs
Estimated Authorization Level............................... 12 12 12 13 13 13
Estimated Outlays........................................... 4 5 6 7 8 10
----------------------------------------------------------------------------------------------------------------
\1\ The 2006 level is the amount appropriated in that year for Native Hawaiian Housing Block Grants, Native
Hawaiian Housing Loan Guarantees, and Title VI Loan Guarantees.
Note: * = less than $500,000.
Basis of estimate
Native Hawaiian housing block grants
Section 2 would authorize the appropriation of such sums as
necessary for the Native Hawaiian Housing Block Grant program
from 2007 through 2011. Program grants are used to assist
affordable housing activities for eligible low-income Native
Hawaiian families. In 2006, $9 million was appropriated for
this program. Assuming appropriation of similar amounts (and
adjusting for anticipated inflation), CBO estimates that
implementing this section would cost $13 million through 2011.
Native Hawaiian housing loan guarantees
Section 3 would authorize the appropriation of such sums as
necessary for the Native Hawaiian Housing Loan Guarantee
program from 2007 through 2011. This program guarantees loans
made to eligible Native Hawaiian families who reside on the
Hawaiian Home Lands and who otherwise could not acquire private
financing because of the unique legal status of the Hawaiian
Home Lands. In 2006, $1 million was appropriated for this
program. Assuming appropriation of similar amounts (and
adjusting for anticipated inflation), CBO estimates that
implementing this section would cost $5 million through 2011.
Title VI loan guarantees
Section 4 would extend the authorization of the Title VI
loan guarantee program through 2011 and expand eligibility to
include the DHHL. Such guarantees allow Native American Block
Grant recipients to leverage their funding by pledging future
grants as security for the repayment of a loan. A private
lender provides the financing and the Department of Housing and
Urban Development (HUD) provides a 95 percent guarantee of the
principal and interest due in the case of a default. The size
of the Title VI loans can be no larger than five times the
grant recipient's annual grant amount. HUD estimates this
program currently has a subsidy rate of about 12 percent. In
2006, $1.8 million for subsidy costs was appropriated for the
program, which would support about $15 million in loans.
Assuming appropriation of similar amounts and adjusting for the
expansion of eligibility to include DHHL, CBO estimates that
implementing this section would cost $8 million through 2011.
CBO assumes that loans to DHHL that are paid off using Native
Hawaiian Housing Block Grants would have a similar loan-to-
grant ratio as those Title VI loans backed by Native American
Block Grants.
There have been few losses to date in the Title VI program;
however, repayment of these loans have been funded by federal
grants. As a result, the actual cost to the government is borne
by the grant program. It is uncertain what the cost of these
loans would be in the absence of the grant program but it
likely would be higher, perhaps substantially.
Intergovernmental and private-sector impact: H.R. 5851
contains no intergovernmental or private-sector mandates as
defined in UMRA and would provide benefits to the state of
Hawaii. The bill would allow certain state and tribal entities
in the state of Hawaii to continue helping native Hawaiians
with low incomes purchase, construct, or refinance homes.
Estimate prepared by: Federal Costs: Chad Chirico and
Susanne S. Mehlman. Impact on State, Local, and Tribal
Governments: Sarah Puro. Impact on the Private Sector: Paige
Piper/Bach.
Estimate 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.
Compliance With House Resolution 1000
No ``earmarks'' within the meaning of House Resolution 1000
were created by this legislation.
Section-by-Section Analysis of the Legislation
Section 1. Short title
The short title of this bill is the Hawaiian Homeownership
Opportunity Act of 2006.
Section 2. Authorization of appropriations for housing assistance
This section reauthorizes Title VIII of the Native American
Housing Assistance and Self-Determination Act (NAHASDA) (25
U.S.C. 4221) for fiscal years 2007 through 2011.
Section 3. Loan guarantee for Native Hawaiian housing
This section reauthorizes the section 184(a) Native
Hawaiian Housing Loan Guarantee Fund for fiscal years 2007
through 2011.
This section would also permit the use of section 184(a)
guaranteed loans for refinancing, in addition to construction
activities.
Section 4. Eligibility of Department of Hawaiian Home Lands for Title
VI Loan Guarantees
This section would allow the Department of Hawaiian Home
Lands (DHHL) to become eligible for loan guarantees authorized
under Title VI of NAHASDA. This program, modeled on the HUD
Community Development Block Grant program (CDBG), would allow
DHHL to borrow or issue bonded debt with the security of the
federal government, using the funding stream provided by HUD as
collateral.
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 (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
NATIVE AMERICAN HOUSING ASSISTANCE AND SELF-DETERMINATION ACT OF 1996
* * * * * * *
TITLE VI--FEDERAL GUARANTEES FOR FINANCING FOR TRIBAL AND NATIVE
HAWAIIAN HOUSING ACTIVITIES
SEC. 601. AUTHORITY AND REQUIREMENTS.
(a) Authority.--To such extent or in such amounts as provided
in appropriations Acts, the Secretary may, subject to the
limitations of this title (including limitations designed to
protect and maintain the viability of rental housing units
owned or operated by the recipient that were developed under a
contract between the
Secretary and an Indian housing authority pursuant to the
United States Housing Act of 1937), and upon such terms and
conditions as the Secretary may prescribe, guarantee and make
commitments to guarantee, the notes or other obligations issued
by Indian tribes or tribally designated housing entities with
tribal approval, or by the Department of Hawaiian Home Lands,
for the purposes of financing affordable housing activities
described in section 202 or 810, as applicable, and housing
related community development activity as consistent with the
purposes of this Act.
* * * * * * *
(c) Limitation on Outstanding Guarantees.--No guarantee or
commitment to guarantee shall be made with respect to any note
or other obligation if the total outstanding notes or
obligations of the issuer guaranteed under this title
(excluding any amount defeased under the contract entered into
under section 602(a)(1)) would thereby exceed an amount equal
to 5 times the amount of the grant approval for the issuer
pursuant to title III or VIII, as applicable.
* * * * * * *
SEC. 602. SECURITY AND REPAYMENT.
(a) Requirements on Issuer.--To assure the repayment of notes
or other obligations and charges incurred under this title and
as a condition for receiving such guarantees, the Secretary
shall require the Indian tribe [or housing entity], housing
entity, or Department of Hawaiian Home Lands issuing such notes
or obligations to--
(1) * * *
* * * * * * *
(3) demonstrate that the extent of such issuance and
guarantee under this title is within the financial
capacity of the tribe or Department and is not likely
to impair the ability to use grant amounts under title
I or VIII, as applicable,, taking into consideration
the requirements under section 203(b) or 811(b), as
applicable; and
* * * * * * *
(b) Repayment From Grant Amounts.--Notwithstanding any other
provision of this Act--
(1) * * *
(2) grants allocated under this Act for an Indian
tribe [or housing entity], housing entity, or the
Department of Hawaiian Home Lands (including program
income derived therefrom) may be used to pay principal
and interest due (including such servicing,
underwriting, and other costs as may be specified in
regulations issued by the Secretary) on notes or other
obligations guaranteed pursuant to this title.
* * * * * * *
SEC. 603. PAYMENT OF INTEREST.
The Secretary may make, and contract to make, grants, in such
amounts as may be approved in appropriations Acts, to or on
behalf of an Indian tribe [or housing entity], housing entity,
or the Department of Hawaiian Home Lands issuing notes or other
obligations guaranteed under this title, to cover not to exceed
30 percent of the net interest cost (including such servicing,
underwriting, or other costs as may be specified in regulations
of the Secretary) to the borrowing entity or agency of such
obligations. The Secretary may also, to the extent approved in
appropriations Acts, assist the issuer of a note or other
obligation guaranteed under this title in the payment of all or
a portion of the principal and interest amount due under the
note or other obligation, if the Secretary determines that the
issuer is unable to pay the amount because of circumstances of
extreme hardship beyond the control of the issuer.
* * * * * * *
SEC. 605. LIMITATIONS ON AMOUNT OF GUARANTEES.
(a) * * *
(b) Authorization of Appropriations for Credit Subsidy.--
There are authorized to be appropriated to cover the costs (as
such term is defined in section 502 of the Congressional Budget
Act of 1974) of guarantees under this title such sums as may be
necessary for each of fiscal years [1997 through 2007] 2007
through 2011.
* * * * * * *
TITLE VIII--HOUSING ASSISTANCE FOR NATIVE HAWAIIANS
* * * * * * *
SEC. 824. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Department of
Housing and Urban Development for grants under this title such
sums as may be necessary for each of [fiscal years 2001, 2002,
2003, 2004, and 2005.] fiscal years 2007, 2008, 2009, 2010, and
2011.
----------
SECTION 184A OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992
SEC. 184A. LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING.
(a) * * *
(b) Authority.--To provide access to sources of private
financing to Native Hawaiian families who otherwise could not
acquire housing financing because of the unique legal status of
the Hawaiian Home Lands [or as a result of a lack of access to
private financial markets], the Secretary may guarantee an
amount not to exceed 100 percent of the unpaid principal and
interest that is due on an eligible loan under subsection (c).
(c) Eligible Loans.--Under this section, a loan is an
eligible loan if that loan meets the following requirements:
(1) * * *
[(2) Eligible housing.--
[(A) In general.--The loan will be used to
construct, acquire, or rehabilitate not more
than 4-family dwellings that are standard
housing and are located on Hawaiian Home Lands
for which a housing plan described in
subparagraph (B) applies.
[(B) Housing plan.--A housing plan described
in this subparagraph is a housing plan that--
[(i) has been submitted and approved
by the Secretary under section 803 of
the Native American Housing Assistance
and Self-Determination Act of 1996; and
[(ii) provides for the use of loan
guarantees under this section to
provide affordable homeownership
housing on Hawaiian Home Lands.]
(2) Eligible housing.--The loan will be used to
construct, acquire, refinance, or rehabilitate 1- to 4-
family dwellings that are standard housing and are
located on Hawaiian Home Lands.
* * * * * * *
( j) Hawaiian Housing Loan Guarantee Fund.--
(1) * * *
* * * * * * *
(7) Authorization of appropriations.--There are
authorized to be appropriated to the Guarantee Fund to
carry out this section such sums as may be necessary
for each of [fiscal years 2001, 2002, 2003, 2004, and
2005.] fiscal years 2007, 2008, 2009, 2010, and 2011.
* * * * * * *