ESTABLISHMENT OF MINIMUM MONTHLY AMOUNT OF VARIABLE HOUSING ALLOWANCE FOR HIGH HOUSING COST AREAS.

SEC. 606. ESTABLISHMENT OF MINIMUM MONTHLY AMOUNT OF VARIABLE HOUSING ALLOWANCE FOR HIGH HOUSING COST AREAS. (a) Minimum Monthly Amount of Allowance.— Subsection (c) of section 403a of title 37, United States Code, is amended by striking out paragraph (1) and inserting in lieu thereof the following new paragraph: “(1) The monthly amount of a variable housing allowance under this section for a member of a uniformed service with respect to an area is equal to the greater of the following amounts: “(A) An amount equal to the difference between— “(i) the median monthly cost of housing in that area for members of the uniformed services serving in the same pay grade and with the same dependency status as that member; and “(ii) 80 percent of the median monthly cost of housing in the United States for members of the uniformed services serving in the same pay grade and with the same dependency status as that member. “(B) An amount equal to the difference between— “(i) the adequate housing allowance floor determined by the Secretary of Defense for all members of the uniformed services in that area entitled to a variable housing allowance under this section; and “(ii) the monthly basic allowance for quarters for members of the uniformed services serving in the same pay grade and with the same dependency status as that member.”. (b) Adequate Housing Allowance Floor.— Such subsection is further amended by adding at the end the following new paragraph: “(7) (A) For purposes of paragraph (1)(B)(i), the Secretary of Defense shall establish an adequate housing allowance floor for members of the uniformed services in an area as a selected percentage, not to exceed 85 percent, of the cost of adequate housing in that area based on an index of housing costs selected by the Secretary of Defense from among the following: 110 STAT. 2542 “(i) The fair market rentals established annually by the Secretary of Housing and Urban Development under section 8(c)(1) of the United States Housing Act of 1937 (42 U.S.C. 1437f(c)(D). “(ii) An index developed in the private sector that the Secretary of Defense determines is comparable to the fair market rentals referred to in clause (i) and is appropriate for use to determine the adequate housing allowance floor. “(B) The Secretary of Defense shall carry out this paragraph in consultation with the Secretary of Transportation, the Secretary of Commerce, and the Secretary of Health and Human Services.”. (c) Effect on Total Amount Available for Allowance.— Subsection (d)(3) of such section is amended in the second sentence by striking out “the second sentence of subsection (c)(3)” and inserting in lieu thereof “paragraph (1)(B) of subsection (c) and the second sentence of paragraph (3) of that subsection”. (d) Conforming Amendments.— Subsection (c) of such section is further amended— (1) in paragraph (3), by striking out “this subsection” in the first sentence and inserting in lieu thereof “paragraph (1)(A) or the minimum amount of a variable housing allowance under paragraph (1)(B)”; and (2) in paragraph (5), by inserting “or minimum amount of a variable housing allowance” after “costs of housing”. (e) Effective Date.— The amendments made by this section shall take effect on January 1, 1997, except that the Secretary of Defense may delay implementation of the requirements imposed by the amendments to such later date as the Secretary considers appropriate upon publication of notice to that effect in the Federal Register.