MONSTRATION PROGRAM OF COMPENSATED WORK ERAPY AND THERAPEUTIC TRANSITIONAL HOUSING ections 7-8 of Public Law 102-54

amended by Public Law 102-83, §5(c)(2), Aug. 6, 1991, 105 . 406; Public Law 102-86, §501, Aug. 14, 1991, 105 Stat. 424; lic Law 103-452, § 103(f), Nov. 2, 1994, 108 Stat. 4787; Public 104-110, § 102(b), Feb. 13, 1996, 110 Stat. 769) provide:

. 7 [38 U.S.C. 1718 note]. DEMONSTRATION PROGRAM OF COMPENSATED WORK THERAPY AND THERAPEUTIC TRANSITIONAL HOUSING.

) DEMONSTRATION PROGRAM. During the period beginning on ober 1, 1991, and ending on December 31, 1997, the Secretary eterans Affairs may carry out a compensated work therapy and apeutic transitional housing demonstration program. The demration program shall have two components, as follows:

(1) A component, under subsection (c), which provides for direct operation of therapeutic transitional housing in conjunction with the furnishing of compensated work therapy.

(2) A component, under subsection (d), which provides for the contracting with nonprofit corporations to furnish compensated work therapy in conjunction with the operation of the therapeutic transitional housing.

) ELIGIBLE VETERANS.-The veterans for whom therapeutic sitional housing may be provided under this section are veter

(1) who are furnishing services to the Department of Veterans Affairs under subsection (a) of section 1718 of title 38, United States Code; or

(2) who are furnished therapeutic work pursuant to subsection (b) of that section.

AUTHORITY TO OPERATE RESIDENCES AS THERAPEUTIC TRANSIAL HOUSING.-Under the demonstration program, the Secry, in connection with the conduct of compensated work therprograms, may operate residences as therapeutic transitional ing solely for veterans described in subsection (b) of this secThe Secretary may operate no more than 50 residences as apeutic transitional housing under this subsection.

CONTRACT AUTHORITY. (1) Under the demonstration pro1, the Secretary may contract with nonprofit corporations to uct compensated work therapy programs under the demonstraprogram.

The Secretary may enter into a contract with a nonprofit cortion under the demonstration program only if the corporation ides assurances satisfactory to the Secretary that it will opertherapeutic transitional housing for eligible veterans in contion with an existing compensated work therapy program at a ical center. The contract may remain in effect only as long as

the corporation operates the therapeutic transitional housing for el igible veterans in connection with the demonstration program.

(3) A contract with a nonprofit corporation under this subsection may provide for the Secretary to furnish the corporation (with o without consideration) in-kind services, including

(A) technical and clinical advice;

(B) supervision of the activities of compensated work therapy participants in the rehabilitation of any property for use as therapeutic transitional housing under the contract and for possible later sale as a private residence; and

(C) minor maintenance of and minor repairs to such prop erty. (e) PROCUREMENT PROCEDURES.-The Secretary may use such procurement procedures for the purchase, lease, or other acquisi tion of residential housing for purposes of this section as the Sec retary considers appropriate to expedite the opening and operation of transitional housing and to protect the interests of the United States.

(f) CONDITIONSnce may be operated as transitional housing for veterans described in subsection (b) under the following conditions

(1) Only veterans described in such subsection and a house manager may reside in the residence.

(2) Each resident, other than the house manager, shall pay rent for the period of residence in such housing.

(3) In the establishment and operation of housing under this section, the Secretary shall consult with appropriate represent atives of the community in which the housing is established and shall comply with zoning requirements, building permit re quirements, and other similar requirements applicable to othe real property used for similar purposes in the community.

(4) The residence shall meet State and community fire and safety requirements applicable to other real property used for similar purposes in the community in which the transitiona housing is located, but fire and safety requirements applicable to buildings of the Federal Government shall not apply to such property.

(g) HOUSE MANAGERS.-The Secretary shall prescribe the quali fications for house managers for transitional housing units oper ated under this section. The Secretary may provide for free room and subsistence for house managers in addition to, or instead o payment of, a fee for such services.

(h) SOURCES OF HOUSING.-(1) The Secretary may operate a transitional housing under this section

(A) any suitable residential property acquired by the Sec retary as the result of a default on a loan made, guaranteed or insured under chapter 37 of title 38, United States Code and

(B) any other suitable residential property purchased, leased or otherwise acquired by the Secretary.

(2) In the case of any property referred to in paragraph (1)(A) the Secretary shall

(A) transfer administrative jurisdiction_over such property within the Department from the Veterans Benefits Administra

tion to the Veterans Health Services and Research Administration; and

(B) transfer from the General Post Fund of the Department of Veterans Affairs to the Loan Guaranty Revolving Fund under chapter 37 of title 38, United States Code, an amount, not to exceed the amount the Secretary paid for the property, representing the amount the Secretary considers could be obtained by sale of such property to a nonprofit organization or a State for use as a shelter for homeless veterans.

(3) In the case of any residential property obtained by the Secretary from the Department of Housing and Urban Development under this section, the amount paid by the Secretary to that Department for that property may not exceed the amount that the Secretary of Housing and Urban Development would charge for the sale of that property to a nonprofit organization or a State for use as a shelter for homeless persons. Funds for such charge shall be derived from the General Post Fund.

(i) RENT AND LENGTH OF RESIDENCE.-The Secretary shall prescribe

(1) a procedure for establishing reasonable rental rates for persons residing in transitional housing; and

(2) appropriate limits on the period for which such persons may reside in transitional housing.

(j) DISPOSAL OF PROPERTY.-The Secretary may dispose of any property acquired for the purpose of this section. The proceeds of any such disposal shall be credited to the General Post Fund of the Department of Veterans Affairs.

(k) AVAILABILITY OF GENERAL POST FUND.-Funds received by the Department under this section shall be deposited in the General Post Fund. The Secretary may distribute out of the fund such amounts as necessary for the acquisition, management, maintenance, and disposition of real property for the purpose of carrying out such program. The operation of the demonstration program and funds received shall be separately accounted for, and shall be stated in the documents accompanying the President's budget for each Fiscal year.

(1) REPORT.-After a demonstration program under this section as been in effect for two years, the Secretary shall submit to the Committees on Veterans' Affairs of the Senate and House of Representatives a report on the operation of the program. The Secetary shall include in the report such recommendations with reard to the program as the Secretary considers appropriate.

EC. 8. LOANS TO ORGANIZATIONS PROVIDING TRANSITIONAL HOUSING FOR SUBSTANCE ABUSERS.

(a) LOAN PROGRAM.-The Secretary of Veterans Affairs may ake loans in accordance with this section to assist in the proviion of transitional housing exclusively to veterans who are in (or ho recently have been in) a program for the treatment of subtance abuse.

(b) LOAN RECIPIENTS.-A loan under this section may only be ade to a nonprofit organization under selection criteria promulated by the Secretary and only to assist that organization in leasg housing units for use as a group residence for the purposes deribed in subsection (a). The amount of such a loan that is used

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with respect to any single residential unit may not exceed $4,500, In making loans under this subsection, the Secretary shall, except to the extent that the Secretary determines that it is infeasible to do so, ensure that

(1) each loan is repaid within two years after the date on which the loan is made;

(2) each loan is repaid through monthly installments and that a reasonable penalty is assessed for each failure to pay an installment by the date specified in the loan agreement involved; and

(3) each loan is made only to a nonprofit private entity which agrees that, in the operation of each residence established with the assistance of the loan

(A) the use of alcohol or any illegal drug in the residence will be prohibited;

(B) any resident who violates the prohibition in sub clause (A) of this clause will be expelled from the resi dence;

(C) the costs of maintaining the residence, including fees for rent and utilities, will be paid by the residents;

(D) the residents will, through a majority vote of the residents, otherwise establish policies governing the condi tions of residence, including the manner in which applica tions for residence are approved; and

(E) the residence will be operated solely as a residence for not less than six veterans.

(c) FUNDING.-Loans under this section shall be made from the special account of the General Post Fund of the Department of Vet erans Affairs established for purposes of this section. The amoun of such loans outstanding at any time may not exceed $100,000 Amounts received as payment of principal and interest on such loans shall be deposited in that account. The operation of the loar program under this section shall be separately accounted for, and shall be separately stated in the documents accompanying the President's budget for each fiscal year.

(d) TERMS AND CONDITIONS.-Loans under this section shall be made on such terms and conditions, including interest, as the Sec retary prescribes.

(e) REPORT.-After the end of the 15-month period beginning or the date the first loan is extended under this section, the Secretary shall issue a report on the Department's experience under the sec tion. The report shall include the following information:

(1) The default rate on loans extended under this section. (2) The manner in which loan payments are collected. (3) The number of facilities at which loans have been ex tended.

(4) The adequacy of the amount of funds in the special ac count referred to in subsection (c).

[For provisions ratifying action taken by the Secretary of Veter ans Affairs between Oct. 1, 1995 and Feb. 13, 1996, in carrying out section 7 of Public Law 102-54, as amended and set out above, se section 103 of Public Law 104-110, set out as a note under section 1710 of this title.]

DIRECT ADMINISTRATION OF VETERANS' MORTGAGE LIFE INSURANCE

Section 333(c)-(e) of Public Law 100-322, May 20, 1988, 102 Stat. 539, provides:

SEC. 333. DIRECT ADMINISTRATION OF VETERANS' MORTGAGE LIFE

INSURANCE.

(c) SAVINGS PROVISION.-Mortgage protection life insurance granted to any veteran under the former section 806 shall continue in force with the United States as insurer, subject to the terms of subsection (d). Nothing in that subsection shall impair any rights of any veteran or mortgage loan holder under the former section 806 that matured before the effective date specified in subsection b) (see Effective Date of 1988 Amendment note above].

(d) DISCONTINUANCE OF CONTRACT PROGRAM.-(1) Effective as of the effective date specified in subsection (b), the Administrator shall discontinue the policy of insurance purchased in accordance with the former section 806.

(2) All premiums collected or received by the insurer on or after such effective date under a policy purchased under the former section 806 shall be promptly forwarded to the Administrator and shall be credited to the "Veterans Insurance and Indemnities" appropriation account. Any positive balance of the contingency reserve maintained by the insurer under such policy remaining after all charges have been made shall be payable to the Administrator and shall be deposited by the Administrator in such account, except that such balance may, upon the election of the insurer, be paid by the insurer in equal monthly installments over a period of not more than two years beginning on the date, after such effective date, that the Administrator specifies.

(e) FORMER SECTION 806 DEFINED.-For the purpose of subsections (c) and (d), the term "former section 806" means section 806 [this section] of title 38, United States Code, as in effect on the day before the effective date specified in subsection (b).